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What changed in Allied Gaming & Entertainment Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Allied Gaming & Entertainment Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+221 added−178 removedSource: 10-K (2025-06-09) vs 10-K (2024-03-28)

Top changes in Allied Gaming & Entertainment Inc.'s 2024 10-K

221 paragraphs added · 178 removed · 115 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeAllied is subject to the complicated laws and regulations in various states or countries over sweepstakes, promotions and giveaways. Any negative finding of law regarding the characterization of the type of online activity carried out on the esports gaming platform could limit or prevent Allied’s ability to obtain subscribers in those jurisdictions.
Biggest changeAny negative finding of law regarding the characterization of the type of online activity carried out on the esports gaming platform could limit or prevent Allied’s ability to obtain subscribers in those jurisdictions. In addition, Allied is subject to a number of foreign and domestic laws and regulations that affect companies conducting business on the Internet.
Allied Esports Media, Inc. (“AEM”), a Delaware corporation, was formed in November 2018 to act as a holding company for Allied Esports International Inc. (“Allied Esports”) and immediately prior to close of the Merger (as defined below) to also include Noble Link Global Limited (“Noble Link”).
Allied Esports Media, Inc. (“AEM”), a Delaware corporation, was formed in November 2018 to act as a holding company for Allied Esports International Inc. (“Allied Esports”) and immediately prior to the close of the Merger (as defined below) to also include Noble Link Global Limited (“Noble Link”).
Allied updates its intellectual property portfolio from time to time as appropriate. Competition The esports gaming industry is competitive. Competitors range from established leagues and championships owned directly, as well as leagues franchised by well-known and capitalized game publishers and developers, interactive entertainment companies, diversified media companies and emerging start-ups.
Allied updates its intellectual property portfolio from time to time as appropriate. 7 Competition The esports gaming industry is competitive. Competitors range from established leagues and championships owned directly, as well as leagues franchised by well-known and capitalized game publishers and developers, interactive entertainment companies, diversified media companies and emerging start-ups.
Gaming companies such as Tencent, Activision Blizzard, and Electronic Arts, which are involved in game development and also host their own esports events in their own selected venues. 5 4. Live entertainment companies such as Live Nation and AEG, which also host live events and concerts and may expand into the esports space. 5.
Gaming companies such as Riot, Tencent, Activision Blizzard, and Electronic Arts, which are involved in game development and also host their own esports events in their own selected venues. 4. Live entertainment companies such as Live Nation and AEG, which also host live events and concerts and may expand into the esports space. 5.
As of December 31, 2023, the Company’s operation includes Allied Esports International, which owns and operates HyperX Arena Las Vegas, one of the world’s most recognized esports and entertainment events facilities, one mobile arena-Allied Esports Omen Truck, and original content studio which creates and produces proprietary content series to serve brand activation and promotion, fans and community engagement.
As of December 31, 2024, the Company’s operation includes Allied Esports International, which owns and operates HyperX Arena Las Vegas, one of the world’s most recognized esports and entertainment events facilities, one mobile arena-Allied Esports Omen Truck, and original content studio which creates and produces proprietary content series to serve brand activation and promotion, fans and community engagement.
(the “Purchaser”), pursuant to which the Purchaser agreed to purchase 7,330,000 shares of common stock of the Company, par value $0.0001 per share (the “Common Stock”) at a purchase price of $0.90 per share (the “Purchased Shares”) for a total purchase price of $6,597,000.
(the “Purchaser”), pursuant to which the Purchaser agreed to purchase 7,330,000 shares of common stock of the Company, par value $0.0001 per share (the “Common Stock”) at a purchase price of $0.90 per share for a total purchase price of $6,597,000.
Consequently, the assets and liabilities and the historical operations that are reflected in the combined financial statements prior to the Merger are those of Allied Esports and WPT. The Company operates through its wholly owned subsidiaries Allied Esports International, Inc. (“AEII”), Esports Arena Las Vegas, LLC (“ESALV”), Allied Mobile Entertainment Inc, Allied Experiential Entertainment Inc and Allied Esports GmbH (“AEGmbH”).
Consequently, the assets and liabilities and the historical operations that are reflected in the combined financial statements prior to the Merger are those of Allied Esports and WPT. The Company operates through its wholly owned subsidiaries Allied Esports International, Inc. (“AEII”), Esports Arena Las Vegas, LLC (“ESALV”), Allied Mobile Entertainment Inc. (“AME”), Allied Experiential Entertainment, Inc.
In addition to the patent, Allied’s intellectual property portfolio includes the following: (1) approximately sixty (60) registered domain names, (2) an exclusive worldwide (excluding the PRC) casual gaming software license, and (3) approximately twenty-five (25) trademarks, including, but not limited to, “Allied” – which has been filed in the U.S., “Allied” – which bold mark has been filed in China and Europe; the “Allied” logos – which have been filed in the U.S. and Europe; the “Allied Member Property Network” logo – which has been filed in the U.S., China, and Europe; the “Big Betty” logos – which have been registered in Europe; “Esports Superstars” logo – which has been filed in the U.S.; “Legend Series” logo – which has been filed in the U.S. and Europe; the “Allied” emblem – which has been filed in China and Europe, and “Glory Road” – which has been filed in the U.S.
In addition to the patent, Allied’s intellectual property portfolio includes the following: (i) approximately sixty (60) registered domain names, (ii) an exclusive worldwide (excluding the PRC) casual gaming software license, and (iii) approximately twenty-five (25) trademarks, including, but not limited to, “Allied” – which has been filed in the U.S., “Allied” – which bold mark has been filed in China and Europe; the “Allied” logos – which have been filed in the U.S. and Europe; the “Allied Member Property Network” logo – which has been filed in the U.S., China, and Europe; the “Big Betty” logos – which have been registered in Europe; “Esports Superstars” logo – which has been filed in the U.S.; “Legend Series” logo – which has been filed in the U.S. and Europe; the “Allied” emblem – which has been filed in China and Europe, and “Glory Road” – which has been filed in the U.S.
Our filings with the SEC are available to the public on the SEC’s website at http://www.sec.gov. 6
Our filings with the SEC are available to the public on the SEC’s website at http://www.sec.gov. 8
AEII operates global competitive esports properties designed to connect players and fans via a network of connected arenas. ESALV operates a flagship gaming arena located at the Luxor Hotel in Las Vegas, Nevada. Allied Mobile Entertainment (“AME”), is dedicated to exploring opportunities in the massive and growing mobile games markets.
(“AEE”), and Allied Esports GmbH (“AEG”). AEII operates global competitive esports properties designed to connect players and fans via a network of connected arenas. ESALV operates a flagship gaming arena located at the Luxor Hotel in Las Vegas, Nevada. AME is dedicated to exploring opportunities in the massive and growing mobile games markets.
On October 31, 2023, the Company completed its acquisition of a 40% equity interest in Beijing Lianzhong Zhihe Technology Co., Ltd, a developer and operator of casual mobile games, see commentary on Strategic Transactions in 2023 below.
On October 31, 2023, the Company completed its acquisition of a 40% equity interest in Beijing Lianzhong Zhihe Technology Co., Ltd, a developer and operator of casual mobile games.
Other esports organizations such as ESL and Faceit, which also host esports tournaments and events. 2. Gaming lifestyle influencers network and marketing companies such as Gamesquare, FaZe Clan, 100thieves, which owns gaming influencers that have strong brand partnerships could create competition to Allied on sponsorship and advertising revenue. 3.
Other esports organizations such as ESL and Faceit, and Blast tv, which also host esports tournaments and events. 2. Gaming lifestyle influencers network and marketing companies such as Gamesquare, 100thieves, Super League Enterprise, which owns gaming influencers and have strong brand partnerships could create competition to Allied on sponsorship and advertising revenue. 3.
The Company offers a variety of esports and gaming-related content, including world class tournaments, live and virtual entertainment and gaming events, and original programming to continuously nurture vibrant communities primarily comprising Gen Y, Z, and Alpha consumers.
The Company offers a variety of esports, gaming-and entertainment content and services through its three subsidiaries, Allied Esports International, Allied Mobile Entertainment and Allied Experiential Entertainment, including world class tournaments, live and virtual entertainment and gaming events, and original programming to continuously nurture vibrant communities primarily comprising Gen Y, Z, and Alpha consumers.
(the “Target Company”), pursuant to which AME-HK agreed to acquire a 40% equity interest in the Target Company held by the Seller for a total purchase price of $7,000,000 in cash (the “Acquisition”).
(the “Target Company” or “Z-Tech”), pursuant to which we acquired a 40% equity interest in the Target Company held by the Seller for a total purchase price of $7,000,000 in cash (the “Acquisition”).
Employees As of March 27, 2024, we had 73 employees, including 27 employees that operated under collective-bargaining agreements. Available Information Our company’s website address is https://www.alliedesports.gg/.
Employees As of May 27, 2025, we had 71 employees, including 23 employees that operated under collective-bargaining agreements. Available Information Our company’s website address is https://www.alliedgaming.gg/.
After the Acquisition, which was completed on October 31, 2023, the Company has become Z-Tech’s largest shareholder. Z-Tech was founded in Beijing, China in April 2022 and has emerged as a mobile games developer and operator, specializing in the innovation, research, development and operation of premium card and Mahjong casual games.
Z-Tech was founded in Beijing, China in April 2022 and has emerged as a mobile games developer and operator, specializing in the innovation, research, development and operation of premium card and Mahjong casual games.
Mobile gaming and esports are the major driver of this exponentially growing market. Esports, an abbreviation of “electronic sports,” encompasses a diverse range of competitive electronic games that are played by gamers against each other. Popular esports games include Fortnite, League of Legends, Dota 2, Counter-Strike, Call of Duty, Overwatch, and FIFA.
In 2024, mobile gaming generated $92.5 billion in revenue, accounting for approximately half of total global gaming market revenue. Esports, an abbreviation of “electronic sports,” encompasses a diverse range of competitive electronic games that are played by gamers against each other. Popular esports games include Fortnite, League of Legends, Dota 2, Counter-Strike, Call of Duty, Overwatch, and FIFA.
The SPA is subject to customary representations, warranties, covenants and conditions, including an agreement that the Company and Purchaser will each use its best efforts to negotiate and finalize a collaboration or partnership agreement under which the Purchaser will assist the Company with organizing live shows and events in Asia.
The SPA included an agreement that the Company and Purchaser will each use its best efforts to negotiate and finalize a collaboration or partnership agreement under which the Purchaser will assist the Company with organizing live shows and events in Asia. The transaction was closed on March 7, 2024.
Allied will continue to use a three-pillar strategy in its gaming and entertainment services; in-person experiences, multiplatform content, and interactive services both independently and in connection with its strategic partners.
Allied will continue to use a three-pillar strategy in its gaming and entertainment services; in-person experiences, multiplatform content, and interactive services both independently and in connection with its strategic partners. Our Growth Strategies 1. In-Person Experiences Allied continues to deepen its presence in the live entertainment and location-based entertainment (LBE) sectors, where global consumer demand is experiencing a powerful resurgence.
Corporate Organization Our principal offices are located at 745 Fifth Avenue, Suite 500, New York, NY 10151, and our telephone number at that office is (646) 768-4240.
Ultimately, our vision is to build a unified platform where content, community, and commerce intersect—positioning Allied at the forefront of next-generation interactive and experiential focused entertainment. 6 Corporate Organization Our principal offices are located at 745 Fifth Avenue, Suite 500, New York, NY 10151, and our telephone number at that office is (646) 768-4240.
Leveraging advanced in-game advertising strategies, Z-Tech has generated substantial revenue streams and established a premier leisure entertainment platform and community, which further solidifies its connection with customers, enhancing engagement and fostering enduring relationships. On December 28, 2023, we entered into a Share Purchase Agreement (the “SPA”) with Elite Fun Entertainment Co., Ltd.
The Acquisition allowed us to leverage the advanced in-game advertising strategies of Z-Tech and access to premier leisure entertainment platform and community, which also provided us with an additional revenue stream. 1 Strategic Transactions — Overview On December 28, 2023, we entered into a Share Purchase Agreement (the “SPA”) with Elite Fun Entertainment Co., Ltd.
Neither we nor any of our predecessors have been in bankruptcy, receivership, or any similar proceeding. 4 Government Regulation Allied intends to offer subscribers the chance to win cash and prizes when playing esports games and tournaments on the esports gaming platform it intends to develop.
Government Regulation Allied intends to offer subscribers the chance to win cash and prizes when playing esports games and tournaments on the esports gaming platform it intends to develop. Allied is subject to the complicated laws and regulations in various states or countries over sweepstakes, promotions and giveaways.
The entertainment industry has witnessed the rapid growth of gaming, which now ranks among the largest and fastest-growing markets. As of 2023, with a staggering 3.4 billion gamers worldwide, the global gaming industry was valued at $187.7 billion and is projected to grow at a compound annual growth rate (“CAGR”) of 2.6% between 2023 and 2024.
The entertainment industry has witnessed the rapid growth of gaming, which now ranks among the largest and fastest-growing markets. In 2024, the global gaming market generated revenues of $187.7 billion, up 2.1% from the previous year, while the number of worldwide players reached 3.42 billion.
Strategic Transactions in 2023 On August 16, 2023, AME-HK entered into an Equity Interest Purchase Agreement (the “Purchase Agreement”) with, among others, Beijing Lianzhong Co., Ltd (the “Seller”) and Beijing Lianzhong Zhihe Technology Co., Ltd.
These figures underscore the dynamic nature of the gaming and esports industries, highlighting their increasing influence within the broader entertainment landscape. In 2023, we, through one of our subsidiaries, entered into an Equity Interest Purchase Agreement (the “Purchase Agreement”) with Beijing Lianzhong Co., Ltd (the “Seller”) and Beijing Lianzhong Zhihe Technology Co., Ltd.
Pursuant to the terms of the Purchase Agreement AME-HK has the right to appoint three out of five members of the Board of Directors of the Target Company, and AME-HK also will acquire certain rights held by the Seller as the major shareholder of the Target Company prior to the Acquisition.
Pursuant to the terms of the Purchase Agreement, we have the right to appoint three out of five members of the Board of Directors of the Target Company. After the Acquisition, which was completed on October 31, 2023, the Company has become Z-Tech’s largest stockholders.
For years to come, infrastructure development and the growth of mobile esports will be the key drivers in emerging regions, while the diversification of content is likely to drive viewing behavior in western markets.
The audience for live game streaming continues to grow, with projections estimating it will reach 1.21 billion viewers by 2025, achieving a CAGR of 12.7%. This growth is driven by infrastructure development and the rise of mobile esports in emerging regions, while content diversification influences viewing habits in Western markets.
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In 2023, the games live-streaming audience grew by [14.5]% year over year to [927.3] million (Newzoo report). It is estimated that this category will reach 1.21 billion by 2025 at a CAGR of +12.7%.
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The staggering number of worldwide gamers is predicted to exceed 3.75 billion by the end of 2027 (newzoo.com). As of 2024, the global gaming industry was valued at $298 billion with a projected compound annual growth rate (“CAGR”) of 8.7% between 2025 to 2030 (Grand View Research). Mobile gaming and esports are the major drivers of this exponentially growing market.
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Our Growth Strategies In-person Experiences With its world class gaming and live broadcasting equipped facilities, Hyper X Arena Las Vegas, Allied will continue delivering first-in-class live experiences to customers which will allow them to compete against other players in world esports competitions, to host live events with influencers that potentially stream to millions of viewers worldwide with unprecedently engaged experience, to produce and distribute incredible entertainment content with its on-site production facilities and studios.
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On June 15, 2024, we entered into a Termination Agreement (the “Termination Agreement”) with the Purchaser, pursuant to which we agreed to terminate the SPA and related agreement.
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Allied’s flagship HyperX Arena Las Vegas serves as a marquee destination for esports fans globally and has become one of the most recognized esports and live entertainment venues in the world.
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Pursuant to the Termination Agreement, we agreed to (i) pay a total of $2,000,000 to the Purchaser, and (ii) forgive the Purchaser’s obligation to pay the remaining purchase price of $4,597,000 for the shares, in exchange for the Purchaser transferring back to us all of the shares of common stock previously issued pursuant to the SPA.
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Additionally, Allied has one mobile esports arena, which is an 18-wheel semi-trailers that convert into first class esports arenas and competition stages with full content production capabilities and interactive talent studios.
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The termination became effective on June 15, 2024. In addition, the Purchaser has agreed to use reasonable effort to pursue, negotiate and finalize a strategic partnership agreement in order to advance and facilitate the Company’s gaming, entertainment and related business operations in China and the Asia Pacific Region.
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Through our renowned assets, Allied believes it can offer customers an unmatched ability to participate in simultaneous global esports events and offer sponsors and partners a truly scalable global platform and audience to promote their businesses and products. 1 Flagship Arena .
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In October 2024, we completed a strategic investment by Yellow River Global Capital (“Yellow River”), an alternative private equity manager with deep expertise in large-scale, long-term investments in digital technologies, new energy and entertainment.
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In March 2018, Allied opened its first flagship arena, the HyperX Arena Las Vegas, at the Luxor Hotel & Casino on the Vegas strip, whose pyramid is one of the most visible landmarks in Las Vegas.
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In addition to the financial investment, Yellow River will provide us with strategic resources, networking opportunities, and industry expertise that will be extremely valuable as the Company advances its strategic initiatives forward.
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This arena has over 130 gaming stations, two bars, food service, private rooms, an unmatched full-scale broadcast and production facility, and space for up to 1,000 people for events. The arena is custom-built for esports tournaments and has a broadcast-ready television studio to broadcast live events and produce content.
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The investment was made pursuant to that certain Securities Purchase Agreement with Blue Planet New Energy Technology Limited (“Blue Planet”), an affiliate of Yellow River, pursuant to which the Company issued to such affiliate 6,000,000 shares of common stock at a purchase price of $1.10 per share for a total purchase price of $6,600,000 and (ii) a corresponding warrant to purchase up to 6,000,000 shares of Common Stock, with an exercise price of $1.80 per share.
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Allied monetizes the arena through hosting or renting the space for live events; merchandise sales; daily usage fees from day-to-day gamers using the gaming stations; tournament entry and player venue fees; food and beverage; and a long-term sponsorship (i.e., our HyperX naming rights relationship). Affiliate Arenas .
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On April 25, 2025, the Company and Blue Planet entered into a termination agreement pursuant to which each party agreed to terminate the Securities Purchase Agreement.
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One of Allied’s strategic advantages is its global network of esports arena partners, which enables it to host events and promote competitions around the world, with those competitions culminating in live events held at the flagship arena in Las Vegas. Allied achieves this through its Affiliate Program, which consists of strategic partnerships with third-party esports operators around the globe.
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Pursuant to the termination agreement, the Company agreed to refund the $6,600,000 and in exchange Blue Planet will transfer back to the Company all of the shares of common stock and warrant to purchase shares of common stock.
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Allied generally charges these affiliates an upfront fee and a minimal annual revenue share of gross revenue, starting in the second year of the operation of the venue.
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As the world fully emerges from the COVID-19 pandemic, there’s a renewed appetite for in-person, social experiences—particularly among Gen Z and post, millennial audiences who prioritize entertainment, travel, and cultural engagement.
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Allied’s brand visibility and reputation have already resulted in affiliate arrangements with arenas and gaming centers in China and a multi-year agreement with Fortress Esports Pty Ltd, a new gaming, esports and entertainment venue enterprise in Australia, which opened its first affiliate arena in Melbourne in March 2020 and the second arena in Sydney in 2023.
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Market Trends & Demand Drivers: ● According to PwC’s Global Entertainment & Media Outlook, global entertainment and media industry saw a 5% increase in revenue in 2023, reaching $2.8 trillion, and is expected to grow to $3.4 trillion by 2028.
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Allied has been approached by and in talks with various players in the market who seek management and operation consultation for esports focused mixed use space. This network of affiliate arenas and operation consultation service allows Allied to scale its brand penetration worldwide on a rapid basis, driving more gamers into the Allied ecosystem, with minimal costs to Allied.
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Advertising is a major contributor to this growth, anticipated to hit $1 trillion in 2026, driven by strong consumer demand, increased artist touring, and brand sponsorship activation. The live music industry is showing a remarkable recovery, with ticket sales in 2023 surpassed pre-pandemic levels from 2019.
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Furthermore, Allied can utilize its leading production facility to support all venues within the affiliate network content streaming and production, optimizing capex and opex for affiliated venues. Mobile Arenas . The mobile arenas are 18-wheeler trucks that expand out into fully functional esports arenas with event hosting, broadcasting and production capabilities.
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Revenues from live experiences are expected to grow significantly over the next few years. ● The location-based entertainment (LBE) market, which includes esports arenas, immersive entertainment centers, and themed attractions, is expected to grow at a CAGR of 13%+, reaching over $30 billion by 2030 (Allied Market Research, 2024). Location-based entertainment market is experiencing significant growth.
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The mobility of the trucks makes them ideal for sponsors to reach a large audience in multiple locations at an economical cost. The trucks serve as mobile billboards for potential third-party sponsorship, as well as the Allied brand, providing highly visible brand presence wherever they appear. Live Entertainment Events in Partnership with 3 rd Party Venues.
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It was valued at USD 5.17 billion in 2024 and is projected to reach USD 23.34 billion by 2032, showing a strong compound annual growth rate (CAGR) of 20.9%. North America currently holds the largest share of this market.
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The live concert and show market in 2023 was marked by a strong rebound from the pandemic. The global market size was estimated to be around $58.9 billion, reflecting a significant increase from previous pandemic years. Ticket sales were strong, with online sales reaching an estimated $33.8 billion, exceeding pre-pandemic levels (2019) (source: Statista).
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The growth is being fueled by several factors, including increased consumer spending on digital entertainment, a desire for immersive and interactive experiences, and the growing popularity of virtual and augmented reality technologies.
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With gaming, entertainment and live events genes at heart, AGAE formed wholly owned subsidiary Allied Experiential Entertainment (“AEE”), focusing on orchestrating live entertainment events and offers management and consultation service to experiential entertainment venue operation.
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The trend of people wanting to share social experiences and the increasing investments in this sector are also significant contributors. 2 North America Trends ● North America remains the largest market for live entertainment, with the U.S. accounting for over 40% of global ticket revenue (PwC, 2023). ● Las Vegas continues to lead in immersive entertainment investment, including esports venues, integrated resorts, and tech-enabled nightlife. ● Youth-driven demand: Gen Z and Millennials are attending more live events than any previous generation, with preference for hybrid formats combining music, gaming, and social experiences.
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In February 2024, AGAE announced the debut event of its recently formed joint venture, Skyline Music Entertainment (“Skyline”), hosting the inaugural leg of the highly acclaimed multiple Juno Award-winning band Walk off the Earth’s first-ever tour in China in April 2024.
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Asia-Pacific Trends ● The Asia-Pacific LBE market is growing at the fastest rate, led by China, Japan, and South Korea. ● Hainan, China is being developed as a tourism and entertainment hub under a government-supported Free Trade Zone, with incentives for international media, gaming, and culture brands. ● Japan, a global capital for gaming and anime culture, is seeing a resurgence in esports cafes, themed venues, and cross-media events, particularly in Tokyo and Osaka. ● Regional consumers show strong demand for IP-integrated experiences, blending anime, gaming, and live performance. ● Cities like Las Vegas, Tokyo, and Hainan are actively investing in next-generation destination entertainment, attracting international travelers, esports fans, and cultural tourists alike.
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Skyline Music Entertainment, a joint venture based in Macau, is poised to capitalize on the burgeoning entertainment industry in the Asia market. AEE owns 51% of Skyline Music Entertainment. Multiplatform Content Built upon unique state-of-the-art facilities and a growing gamers community, Allied continues to produce successful gamers centric original content programing.
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Allied’s Strategic Approach: Building on our operational expertise in gaming and esports, Allied is expanding into broader entertainment formats to capitalize on this growth. Our approach is centered around creating experiential entertainment hubs that blend gaming, music, lifestyle, and immersive media under one roof.
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Allied’s original content series Elevated, designed to help up-and-coming Twitch streamers break through the clutter, get discovered and grow their audiences, has brought in more than 10 million live viewers and 3 million VOD views over 4 episodes during its Season 1 debut in March of 2022.
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Key Initiatives Include: ● Expansion of Entertainment Network Properties: o Developing in partnership for a second flagship location in Las Vegas, focused on esports, gaming-themed nightlife, immersive activations, and celebrity-driven content production. o Exploring development plans in Hainan (a fast-growing tourist and free-trade hub in China) and Japan, where gaming, anime and pop culture are deeply embedded in mainstream entertainment. 3 ● World-Class Event Production: o Hosting large-scale esports tournaments, unique gaming & entertainment shows that position Allied as a key platform for live fan engagement. o Curating proprietary music festivals IP and concerts that feature cross-cultural lineups and incorporate gaming, fashion, and influencer culture to drive both ticket revenue and brand partnerships.
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The series was renewed for Season 2 with stronger support from our brand partner Progressive Insurance, by doubling the production and expanded to 10 episodes for Season 2, which aired in Q2 2023.
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These investments reflect our belief that location-based live entertainment is not just a vertical—but a physical manifestation of our brand. By offering fans and creators a place to gather, compete, and celebrate, we are building high-impact, IP-driven venues that serve as both revenue engines and cultural landmarks. 2.
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Allied has also signed a multi-year, multi-episode content partnership with the YES Network to produce original series Wannabe, which explores the journeys of professional gamers and professional athletes who have appeared on the YES Network, all of whom have a strong passion for esports and competitive gaming, and the common themes between their different careers.
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Multiplatform Content We are investing heavily in original content and intellectual property (IP) with a focus on formats that can be distributed across multiple platforms and create sustainable monetization—including digital streaming, social media, theatrical releases, and live broadcasts—and monetized globally through licensing, sponsorship, and direct-to-consumer models.
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Each episode delves into the early dreams of these individuals and traces their paths to success. This highly entertaining original content series continues to strengthen our brand engagement, expand our fans out-reach, and build up multi-channel monetization through sponsorship, advertisement, and distribution.
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Why Multiplatform Content Matters: In the current media landscape, audiences are platform-agnostic and expect content to be accessible, interactive, and culturally relevant. The convergence of gaming, animation, live competition, and streaming entertainment is creating new high-growth opportunities for IP owners.
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We believe Allied’s ecosystem of esports branded properties gives it the reach, reputation and experience to produce world-class live events, in partnership with some of the most prominent names in the esports and entertainment industry.
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Global Content & Media Growth ● According to PwC’s Global Entertainment & Media Outlook (2023–2027), global media and entertainment spending is projected to reach $2.8 trillion by 2027, with digital video, gaming, and live content driving the majority of that growth. ● The global video streaming market alone is expected to grow at a CAGR of ~12%, reaching $150 billion+ by 2027 (Grand View Research, 2024). ● IP-based franchises (e.g.
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These live events provide Allied with the material to produce exciting content that can be distributed via three different formats, each of which has its own revenue generation model: live streaming, post-produced episodic content, and short-form repackaged content. 2 Live Streaming .
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Pokémon, Marvel, Super Mario, Angry Birds) continue to generate massive returns through multimedia monetization across film, TV, games, merchandise, and events.
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According to a report by Stream Hatchet, in 2023, viewers watched a total of [2.76] billion hours of live gaming content on popular streaming platforms such as Twitch, Youtube Gaming, and Facebook Gaming making a 75% increase from 2020.
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Content Fragmentation Creates Opportunity ● Viewership is shifting from traditional broadcast to a fragmented digital ecosystem: YouTube, Twitch, TikTok, OTT platforms, and emerging Web3 streaming formats. ● Success depends on owning or controlling content IP and adapting it across formats — from live tournament broadcasts to short-form clips, feature films, and branded experiences. 4 Gaming & Esports Content Evolution ● Esports-related video content generated over $1 billion in global revenue in 2023, and is expected to grow to $1.6 billion+ by 2026, as per Newzoo. ● Formats such as “game show meets esports”, “traditional sports + gaming hybrids”, and “live hosted tournaments” are gaining popularity among Gen Z audiences. ● Niche tournaments in mahjong, flair bartending, boxing, and fantasy sports have the potential to become scalable content IP with global fan bases.
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The Esports Live-Streaming Trends Report, which livestreaming analytics platform Stream Hatchet releases quarterly, also indicated that co-streaming continued to boost esports viewership and engagement. Authorized co-streaming contributed a 195% growth in viewer hours. The viewership boost from co-streaming — an increasingly popular practice amongst tournament organizers — was spread across various games and content creator.
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Audience Demand for Cultural and Cross-Genre Content ● Cultural content like World Mahjong Tour appeals to both legacy fans and younger, competitive gaming audiences. ● Animation continues to outperform, with family-friendly IPs like The Angry Birds franchise demonstrating high ROI potential across global theatrical and digital release windows.
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Twitch is still the most popular form of esports content delivery channel today, as it offers the best interactive experiences for the audience. Twitch is especially commanding with small events, where it has a market share of 81%. Twitch and YouTube make up 62% and 30% of the market, respectively.
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Allied’s Strategic Positioning We are uniquely positioned to capitalize on these trends through: ● Original IP creation: Including tournament titles across esports, traditional sports with gaming elements, boxing, bartending, and traditional game shows with a twist. ● Cultural expansion: Leading with World Mahjong Tour to blend Eastern heritage with modern competition formats, and create unique content surrounding the game play blending with culture exchange . ● Content investment: Participation in large-scale, globally recognized family-friendly films IP such as The Angry Birds Movie 3 and others via filming and movie veterans. ● Monetization ecosystem: Combining event-based revenue, platform distribution, sponsorship integration, and potential merchandise/licensing models. 3.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe interests of Ourgame may not always coincide with our interests or the interests of our other stockholders, and Ourgame’s influence may delay, deter or prevent acts that would be favored by us or our other stockholders. This concentration of ownership may also have the effect of delaying, preventing or deterring a change in control of the Company.
Biggest changeThe interests of each of the Significant Stockholders, individually, may not always align with that of other Significant Stockholders, our interests and interests of minority stockholders, and the Significant Stockholders may have the power and ability to delay, deter or prevent acts that would be favorable by us or our other stockholders.
Even if we do issue public guidance, there can be no assurance that we will continue to do so in the future. We incur increased costs and are subject to additional regulations and requirements as a result of being a public company, which could lower our profits or make it more difficult to run our business.
Even if we do issue public guidance, there can be no assurance that we will continue to do so in the future. 17 We incur increased costs and are subject to additional regulations and requirements as a result of being a public company, which could lower our profits or make it more difficult to run our business.
As a result, you may not receive any return on an investment in our common stock unless you sell your common stock for a price greater than that which you paid for it. 17 If securities or industry analysts do not publish research or reports about our business or publish negative reports, the market price of our common stock could decline.
As a result, you may not receive any return on an investment in our common stock unless you sell your common stock for a price greater than that which you paid for it. If securities or industry analysts do not publish research or reports about our business or publish negative reports, the market price of our common stock could decline.
In addition, any unauthorized use of our intellectual property by third parties may adversely affect its current and future revenues. Allied may not be able to develop compelling intellectual property content or secure media content distributors to promote, sell, and distribute such content, which could harm its business and competitive position.
In addition, any unauthorized use of our intellectual property by third parties may adversely affect its current and future revenues. 16 Allied may not be able to develop compelling intellectual property content or secure media content distributors to promote, sell, and distribute such content, which could harm its business and competitive position.
Allied cannot assure you that it will achieve profitability. 8 Allied generates a portion of its revenues from advertising and sponsorship. If it fails to attract more advertisers and sponsors to its live events, tournaments or content, or if advertisers or sponsors are less willing to advertise with or sponsor Allied, its revenues may be adversely affected.
Allied cannot assure you that it will achieve profitability. Allied generates a portion of its revenues from advertising and sponsorship. If it fails to attract more advertisers and sponsors to its live events, tournaments or content, or if advertisers or sponsors are less willing to advertise with or sponsor Allied, its revenues may be adversely affected.
Additionally, if such third parties increase their prices, fail to provide their services effectively, terminate their service or agreements or discontinue their relationships with Allied, Allied could suffer service interruptions, reduced revenues, or increased costs, any of which may have a material adverse effect on its business, financial condition, and results of operations. 11 Allied may not be able to procure the necessary permits and licenses to operate its arenas.
Additionally, if such third parties increase their prices, fail to provide their services effectively, terminate their service or agreements or discontinue their relationships with Allied, Allied could suffer service interruptions, reduced revenues, or increased costs, any of which may have a material adverse effect on its business, financial condition, and results of operations. 13 Allied may not be able to procure the necessary permits and licenses to operate its arenas.
There is uncertainty as to whether a court would enforce such provision with respect to claims under the Securities Act, and our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder. 18 Any person or entity purchasing or otherwise acquiring any interest in any of our securities shall be deemed to have notice of and consented to these provisions.
There is uncertainty as to whether a court would enforce such provision with respect to claims under the Securities Act, and our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder. 20 Any person or entity purchasing or otherwise acquiring any interest in any of our securities shall be deemed to have notice of and consented to these provisions.
We expect to incur additional costs to defend such litigation which may cause our management to divert attention and resources from our business operations.
We expect to incur additional costs to defend against such litigation which may cause our management to divert attention and resources from our business operations.
Allied’s business model may not remain effective and it cannot guarantee that its future monetization strategies will be successfully implemented or generate sustainable revenues and profit. Allied generates revenues from advertising and sponsorship of its live events, its content, the sale of merchandising, and the operation of its esports arenas.
Allied’s business model may not remain effective and it cannot guarantee that its future monetization strategies will be successfully implemented or generate sustainable revenues and profit. Allied generates revenues from advertising and sponsorship of its live events, its content, the sale of merchandising, in-game advertisement, and the operation of its esports arenas.
Allied’s ability to market its tournaments and competitions is dependent in part upon the success of these programs. The esports gaming industry is competitive, and gamers may prefer competitors’ arenas, leagues, competitions or tournaments over those offered by Allied. The esports gaming industry is competitive.
Allied’s ability to market its tournaments and competitions is dependent in part upon the success of these programs. The esports gaming and entertainment industry is competitive, and gamers may prefer competitors’ arenas, leagues, competitions tournaments or live events over those offered by Allied. The esports gaming and entertainment industry is competitive.
Also, Ourgame may seek to cause us to take courses of action that, in its judgment, could enhance its investments in us, but which might involve risks to our other stockholders or adversely affect us or our other stockholders. As a result, the market price of our shares could decline.
Also, any Significant Stockholder may seek to cause us to take courses of action that, in its judgment, could enhance its investments in us, but which might involve risks to our other stockholders or adversely affect us or our other stockholders. As a result, the market price of our shares could decline.
The historical operations of Allied have resulted in net losses of $3.6 million and $10.8 million for the years ended December 31, 2023 and 2022, respectively. We do not know with any degree of certainty whether or when the consolidated operations of Allied will become profitable.
The historical operations of Allied have resulted in net losses of $22.6 million and $3.6 million for the years ended December 31, 2024 and 2023, respectively. We do not know with any degree of certainty whether or when the consolidated operations of Allied will become profitable.
This concentrated ownership enables Ourgame to exert significant influence over all matters requiring stockholder votes, including: the election of directors; mergers, consolidations, acquisitions and other strategic transactions; the sale of all or substantially all of our assets and other decisions affecting our capital structure; amendments to our Certificate of Incorporation or our bylaws; and our winding up and dissolution.
This concentrated ownership and voting power enables Significant Stockholders to exert substantial influence over all matters requiring stockholder votes and approval, including the election of directors; mergers, consolidations, acquisitions and other strategic transactions; the sale of all or substantially all of our assets and other decisions affecting our capital structure; amendments to our Certificate of Incorporation or our bylaws; and our winding up and dissolution.
As of December 31, 2023, there were 1,662,345 shares available under the plan. Any common stock that we issue, including under our 2019 Plan or other equity incentive plans that we may adopt in the future, would dilute the percentage ownership held by our common stockholders.
As of December 31, 2024, there were 250,616 shares available under the plan. Any common stock that we issue, including under our 2019 Plan or other equity incentive plans that we may adopt in the future, would dilute the percentage ownership held by our common stockholders.
Adding these mobile arenas will depend upon a number of factors, many of which are beyond Allied’s control, including but not limited to our ability, or the ability of our licensees, to: ● reach acceptable agreements regarding the lease or acquisition of the trucks that are the basis of the mobile arenas; ● comply with applicable zoning, licensing, land use and environmental regulations and orders and obtain required permits and approvals; ● raise or have available an adequate amount of cash or currently available financing for construction of the mobile arenas and the related operational costs; ● timely hire, train and retain the skilled management and other employees necessary to operate the mobile arenas; ● efficiently manage the amount of time and money used to build and operate each new mobile arena; and ● manage the risks of road hazards, accidents, traffic violations, etc. that may impede the operations of the mobile arenas. 9 The nature of hosting esports events exposes Allied to negative publicity or customer complaints, including in relation to, among other things, accidents, injuries or thefts at the arenas, and health and safety concerns.
Adding these mobile arenas will depend upon a number of factors, many of which are beyond Allied’s control, including but not limited to our ability, or the ability of our licensees, to: ● reach acceptable agreements regarding the lease or acquisition of the trucks that are the basis of the mobile arenas; ● comply with applicable zoning, licensing, land use and environmental regulations and orders and obtain required permits and approvals; ● raise or have available an adequate amount of cash or currently available financing for construction of the mobile arenas and the related operational costs; ● timely hire, train and retain the skilled management and other employees necessary to operate the mobile arenas; ● efficiently manage the amount of time and money used to build and operate each new mobile arena; and ● manage the risks of road hazards, accidents, traffic violations, etc. that may impede the operations of the mobile arenas.
Although we have been able to fund our current working capital requirements through operations, debt and equity financing, there is no assurance that we will be able to do so in the future. We may experience security breaches and cyber threats.
Although we have been able to fund our current working capital requirements through the sale of WPT, there is no assurance that we will be able to do so in the future. 15 We may experience security breaches and cyber threats.
In order to attract, retain and engage gamers and remain competitive, Allied must continue to develop and expand its live events, leagues, produce engaging tournaments and competitions, and implement new content formats, technologies and strategies to improve its product offerings. There is no assurance it will be able to do so.
In order to attract, retain and engage gamers and remain competitive, Allied must continue to develop and expand its live events, leagues, produce engaging tournaments and competitions, and implement new content formats, technologies and strategies to improve its product offerings.
In addition, if our new strategic plan fails, we will not be able to rely on our existing Allied Esports business to generate positive financial performance and may be required to seek other options and alternatives to continue our business operations, which may be subject to new risks and uncertainties. 7 We may engage in strategic transactions that could impact our liquidity, increase our expenses and present significant distractions to our management.
In addition, if our new strategic plan fails, we will not be able to rely on our existing Allied Esports business to generate positive financial performance and may be required to seek other options and alternatives to continue our business operations, which may be subject to new risks and uncertainties.
A decline in the number of gamers may adversely affect the engagement level of gamers with Allied’s tournament and entertainment platform under development may reduce our revenue opportunities and have a material and adverse effect on our business, financial condition and results of operations.
There is no assurance it will be able to do so. 12 A decline in the number of gamers may adversely affect the engagement level of gamers with Allied’s tournament and entertainment platform under development may reduce our revenue opportunities and have a material and adverse effect on our business, financial condition and results of operations.
Although Allied anticipates growth in Allied’s business utilizing this revenue model, there is no guarantee that growth will continue in the future, and the demand for its offerings may change, decrease substantially or dissipate, or it may fail to anticipate and serve esports gamer demands effectively.
Although Allied believes that this model will enable the Company to increase its revenue and grow its business operation, there is no guarantee that such growth will occur, and the demand for its offerings may change, decrease substantially or dissipate, or it may fail to anticipate and serve esports gamer demands effectively.
If Allied’s affiliate arenas are poorly operated, or if those operators fail to use Allied’s name and branding in a manner consistent with Allied’s corporate messaging and branding, or if there are safety issues or other negative occurrences at affiliate arenas, Allied’s name and brand could be significantly damaged, which would make its expansion difficult and materially adversely affect its results of operations and financial condition.
If Allied’s affiliate arenas are poorly operated, or if those operators fail to use Allied’s name and branding in a manner consistent with Allied’s corporate messaging and branding, or if there are safety issues or other negative occurrences at affiliate arenas, Allied’s name and brand could be significantly damaged, which would make its expansion difficult and materially adversely affect its results of operations and financial condition. 11 Allied’s long-term growth strategy includes deploying additional mobile arenas in the U.S. and Europe to host its tournaments and events and it must operate them profitably.
We have no current plans to pay cash dividends on our common stock; as a result, you may not receive any return on investment unless you sell your common stock for a price greater than that which you paid for it.
In addition, if we are unable to continue to meet these requirements, we may not be able to maintain our common stock listing on Nasdaq. 19 We have no current plans to pay cash dividends on our common stock; as a result, you may not receive any return on investment unless you sell your common stock for a price greater than that which you paid for it.
Furthermore, to carry out Allied’s worldwide distribution plans, film and media distribution partners will be needed and, in the event, Allied is not able to secure content distributors on terms acceptable to Allied, this will have a significant adverse impact on revenue streams from the sale or licensing of intellectual property. 15 Allied has not entered into definitive license agreements with all game publishers that it currently has relationships with, and it may never do so.
Furthermore, to carry out Allied’s worldwide distribution plans, film and media distribution partners will be needed and, in the event, Allied is not able to secure content distributors on terms acceptable to Allied, this will have a significant adverse impact on revenue streams from the sale or licensing of intellectual property.
Any actual or perceived failure by us to comply with our privacy policies or legal or regulatory requirements in one or multiple jurisdictions could result in proceedings, actions, or penalties against us.
Accordingly, the forecasts of market growth should not be taken as indicative of our future growth. 14 Any actual or perceived failure by us to comply with our privacy policies or legal or regulatory requirements in one or multiple jurisdictions could result in proceedings, actions, or penalties against us.
In addition, future laws, regulations, standards and other obligations, and changes in the interpretation of existing laws, regulations, standards and other obligations, could impair our ability to collect, use or disclose data relating to individuals, which could increase our costs and impair our ability to maintain and grow our customer base and increase our revenue. 13 Allied publicly posts its privacy policies and practices concerning processing, use, and disclosure of the personally identifiable information provided to it by website visitors.
In addition, future laws, regulations, standards and other obligations, and changes in the interpretation of existing laws, regulations, standards and other obligations, could impair our ability to collect, use or disclose data relating to individuals, which could increase our costs and impair our ability to maintain and grow our customer base and increase our revenue.
Under this plan, we have pursued and will continue to pursue various acquisitions, joint ventures, and other such strategic opportunities for the purpose of leveraging our location-based-entertainment expertise and focusing on gaming lifestyle and experiential entertainment, as well as growing our digital footprint and monetization capabilities through mobile gaming.
We have expanded our existing esports business to include a broader array of entertainment and gaming products and services, and we continue to pursue acquisitions, joint ventures and other strategic transactions of accretive and complimentary assets and business operations for the purpose of leveraging our location-based-entertainment expertise and focusing on gaming lifestyle and experiential entertainment, as well as growing our digital footprint and monetization capabilities through mobile gaming.
As a global entertainment company that hosts numerous live events with spectators and participants in destination cities, such outbreak may cause people to avoid traveling to and attending our events, which will adversely affect our business operations and financial results. 14 Risks Related to Intellectual Property Allied licensed certain brand names under agreements that have expired and may also be subject to claims of infringement of third-party intellectual property rights.
As a global entertainment company that hosts numerous live events with spectators and participants in destination cities, such outbreak may cause people to avoid traveling to and attending our events, which will adversely affect our business operations and financial results.
Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of our common stock on the Nasdaq market, fines, sanctions and other regulatory action and potentially civil litigation. 16 Our business depends substantially on the continuing efforts of our executive officers, key employees and qualified personnel, and our business operations may be severely disrupted if we lose the services of such personnel.
Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of our common stock on the Nasdaq market, fines, sanctions and other regulatory action and potentially civil litigation. We may not be able to maintain a listing of our common stock on the Nasdaq Capital Market.
Our growth is subject to many factors, including our success in implementing our business strategy, which is subject to many risks and uncertainties. Accordingly, the forecasts of market growth should not be taken as indicative of our future growth.
Our growth is subject to many factors, including our success in implementing our business strategy, which is subject to many risks and uncertainties.
Allied cannot assure you that it can attract and license popular esports games from their publishers, and failure to do so would have a material and adverse impact on Allied’s results of operations and financial conditions. 10 If Allied fails to keep its existing gamers engaged, acquire new gamers and expand interest in its live events, leagues, tournaments and competitions, its business, its ability to achieve profitability, and its prospects may be adversely affected.
Allied cannot assure you that it can attract and license popular esports games from their publishers, and failure to do so would have a material and adverse impact on Allied’s results of operations and financial conditions.
In addition, in the event directors nominated by Knighted are elected to our board of director, such directors may disagree with the strategic directions of the Company or otherwise take actions that may adversely affect the interest of our shareholders. 12 Allied has historically operated at a net loss on a consolidated basis, and there is no guarantee that that it will be able to be profitable.
In addition, in the event we are unsuccessful and directors nominated by Knighted Pastures are elected to our board of director, such directors may disagree with the strategic directions of the Company or otherwise take actions that may adversely affect the interest of our stockholders.
Through its wholly-owned subsidiary Primo Vital Limited, Ourgame International Holdings Limited (“Ourgame”) owns a significant percentage of our outstanding common stock, enabling it to exert significant influence over our operations and activities, which may affect the trading price of our common stock.
We have two major stockholders that each own a significant percentage of our outstanding common stock, enabling them to exert significant influence over our operations and activities, which may affect the trading price of our common stock.
Furthermore, Allied’s failure to comply with these laws or the application of these laws in an unanticipated manner may harm its business and result in penalties or significant legal liability. We may be subject to litigation, including stockholder litigation, which could have an adverse effect on our business and operations.
Furthermore, Allied’s failure to comply with these laws or the application of these laws in an unanticipated manner may harm its business and result in penalties or significant legal liability. Allied has historically operated at a net loss on a consolidated basis, and there is no guarantee that that it will be able to be profitable.
Our stock price could be subject to significant fluctuations or otherwise be adversely affected by the events, risks and uncertainties of any shareholder activism. 19 Item 1B. Unresolved Staff Comments None.
Our stock price could be subject to significant fluctuations or otherwise be adversely affected by the events, risks and uncertainties of any shareholder activism. As discussed in more detail in Item 3, “Legal Proceeding” below, the Company and its Board are subject to litigation involving one of its major stockholders, Knighted Pastures, LLC (“Knighted Pastures”), and its managing member.
The Rights will expire at the close of business on February 9, 2027, unless previously redeemed or exchanged by the Company. See Note 14 – Subsequent Events to our Consolidated Financial Statements for additional information. Shareholder activism could cause us to incur significant expense, impact the execution of our business strategy and have an adverse effect on our business.
The Rights will expire at the close of business on February 9, 2027, unless previously redeemed or exchanged by the Company.
In addition, if we are unable to continue to meet these requirements, we may not be able to maintain our common stock listing on Nasdaq.
We must meet certain financial and liquidity criteria to maintain the listing of our common stock on the Nasdaq Capital Market. If we violate the Nasdaq Capital Market’s listing requirements or fail to meet its listing standards, our common stock may be delisted.
Removed
In December 2022, we announced plans to restructure our existing esports business and expand its focus to include a broader array of entertainment and gaming products and services.
Added
Our business could be negatively affected as a result of actions of activist shareholders, and such activism could impact the trading value of our securities. In recent years, shareholder activists have become involved in numerous public companies. Shareholder activists frequently propose to involve themselves in the governance, strategic direction and operations of the Company, including election of directors.
Removed
Allied’s long-term growth strategy includes deploying additional mobile arenas in the U.S. and Europe to host its tournaments and events and it must operate them profitably.
Added
Such proposals and shareholder director nominations may disrupt our business and divert the attention of our Board of Directors, management and employees, and any perceived uncertainties as to our future direction resulting from such a situation could result in the loss of potential business opportunities, interfere with our ability to execute our strategic plan, be exploited by our competitors, cause concern to our current or potential customers, and make it more difficult to attract and retain qualified personnel and business partners, all of which could adversely affect our business.
Removed
As discussed in more detail in Item 3, “Legal Proceeding” below, Knighted Pastures, LLC (“Knighted”) recently filed a complaint against us and alleges that it seeks to nominate directors to AGAE’s Board and effect certain changes with respect to the business and management of AGAE.
Added
Activist stockholder initiatives could result in perceived uncertainties as to the Company’s future direction, strategy or leadership, which may result in the loss of potential business opportunities, harm our ability to attract new investors, customers, employees and other strategic partners and cause our stock price to experience periods of volatility.
Removed
According to its SEC filings, Ourgame, through Primo Vital Limited, beneficially owns and controls approximately 31% of our outstanding common stock. Primo Vital Limited is entitled to full voting rights with respect to the shares of common stock that it owns.
Added
In addition, actions of activist shareholders may cause significant fluctuations in our stock price based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business.
Added
At the combined 2024/2025 annual meeting of stockholders, Knighted Pastures has nominated three directors for election to our board of directors, which has resulted in the Company’s incurrence of unexpected costs and a diversion of time and resources. The Knighted Pastures director nominees are inexperienced in working with an experimental entertainment company.
Added
Responding to the proxy contest and related litigatory actions has been costly and time-consuming, and has disrupted the Company’s operations and diverted the attention of our Board of Directors, management and employees. 9 We may be subject to litigation, including as a result of stockholder activism, which has caused us and may continue to cause us to incur significant expense, impact the execution of our business strategy and have an adverse effect on our business and operations.
Added
As we have disclosed in various filings with the SEC, the Company believes that Knighted Pastures is employing litigation tactics and stockholder activism to obtain control of the Company’s Board without paying a control premium. Knighted Pastures has indicated it intends to seek representation on the Company’s Board and to seek the removal for cause of certain additional directors.
Added
On October 27, 2024, the Company offered Knighted Pasture’s managing member a seat on the Company’s Board. On October 31, 2024, Knighted Pastures refused the proposal and demanded four seats on the Company’s Board.
Added
As described further herein, on November 12, 2024, Knighted Pastures filed a lawsuit challenging the Company’s strategic partnership and equity investment with an affiliate of Yellow River. The Company and its Board believe the lawsuit is entirely without merit and is defending against the claims vigorously.
Added
To date we have incurred significant legal fees with respect to the Knighted Pastures stockholder litigation, as well as fees incurred pursuing good faith negotiations with Knighted Pastures, which has, and may continue to, negatively impacted our revenues.
Added
Further, continued and persistent shareholder activism may result in reputational harm to us, loss of customers, decreased strategic partner engagement, or other adverse impacts to our business. We may engage in strategic transactions that could impact our liquidity, increase our expenses and present significant distractions to our management.
Added
Our growth could be adversely affected if we are not able to pursue our acquisition strategy, to successfully integrate acquired businesses or to achieve the anticipated benefit from acquired companies. We cannot guarantee that we will be able to execute acquisitions on commercially acceptable terms.
Added
Furthermore, the failure to successfully integrate an acquired business, including implementing financial controls and measures, successfully managing any minority stockholders or achieving our strategic objectives, could significantly impact our financial results.
Added
Financial results most likely to be negatively affected include revenue, gross margin, salaries and benefits, general and administrative expenses, depreciation and amortization, interest expense, net income and our debt level. 10 Furthermore, we may not be able to realize the anticipated benefits from acquired companies.
Added
Achieving those benefits depends on the timely, efficient and successful execution of a number of post-acquisition events.
Added
Factors that could affect our ability to achieve these benefits include the integration risks described above as well as the failure of acquired businesses to perform in accordance with our expectations; the failure to achieve anticipated synergies between our business units and the business units of acquired businesses; the loss of customers of acquired businesses; or the loss of key managers of acquired businesses.
Added
If acquired businesses do not operate as we anticipate, it could materially impact our business, financial condition and results of operations. In addition, acquired businesses may operate in new markets in which we have little or no experience.
Added
Our failure to realize the benefits expected from our acquisitions could result in a reduction in the price of our common stock as well as in increased costs, decreases in the amount of expected revenues and diversion of management’s time and energy and could materially and adversely impact our business, financial condition or results of operations.
Added
The nature of hosting esports related or live events exposes Allied to negative publicity or customer complaints, including in relation to, among other things, accidents, injuries or thefts at the arenas, and health and safety concerns.
Added
If Allied fails to keep its existing gamers engaged, acquire new gamers and expand interest in its live events, leagues, tournaments and competitions, its business, its ability to achieve profitability, and its prospects may be adversely affected.
Added
Allied publicly posts its privacy policies and practices concerning processing, use, and disclosure of the personally identifiable information provided to it by website visitors.
Added
Risks Related to Intellectual Property Allied licensed certain brand names under agreements that have expired and may also be subject to claims of infringement of third-party intellectual property rights.
Added
Allied has not entered into definitive license agreements with all game publishers that it currently has relationships with, and it may never do so.
Added
In addition, our Board of Directors may determine that the cost of maintaining our listing on a national securities exchange outweighs the benefits of such listing.
Added
A delisting of our common stock from the Nasdaq Capital Market may materially impair our stockholders’ ability to buy and sell our common stock and could have an adverse effect on the market price of, and the efficiency of the trading market for, our common stock.
Added
The delisting of our common stock could significantly impair our ability to raise capital and the value of your investment.
Added
As previously reported on our Current Report on Form 8-K filed with the SEC on January 12, 2025, on January 6, 2025, we received a formal letter from the Listing Qualifications Department (the “Staff”) of the Nasdaq Stock Market notifying us that we did not comply with Listing Rule 5620(a), which requires that we hold an annual meeting of stockholders within twelve months of the end of our fiscal year end.
Added
On January 27, 2025, we submitted to the Staff a Plan of Compliance which describes the circumstances under which we became noncompliant with the Listing Rule 5620(a) and our plan with which we will regain compliance.
Added
The Staff granted us an extension until June 30, 2025, to regain compliance with the Listing Rule 5620(a) by holding an annual meeting of stockholders. The letter had no immediate effect on our listing on the Nasdaq Capital Market.
Added
We believe that delisting of our common stock from the Nasdaq Capital Market may adversely affect our ability to raise additional financing through the public or private sale of equity securities, may significantly affect the ability of investors to trade our securities and may negatively affect the value and liquidity of our common stock.
Added
Delisting could have other negative results, including the potential loss of employee confidence, the loss of institutional investors and/or interest in significant business development opportunities.
Added
If we are delisted from the Nasdaq Capital Market and we are not able to list our common stock on another exchange, our common stock may be quoted on the OTC Markets or on the “pink sheets.” As a result, we could face significant adverse consequences including, among others: ● A limited availability of market quotations for our securities; ● A determination that our common stock is a “penny stock” which will require brokers trading in our common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; ● A limited amount of news and little or no analyst coverage for our company; ● We would no longer qualify for exemptions from state securities registration requirements, which may require us to comply with applicable state securities laws; and ● A decreased ability to issue additional securities (including pursuant to short-form registration statements on Form S-3) or obtain additional financing in the future.
Added
In addition, an increase in the per share trading value of our common stock would be beneficial because it would: ● Improve the perception of our common stock as an investment security; ● Reset our stock price to more normalized trading levels in the face of potentially extended market dislocations; ● Assist with future potential capital raises; ● Appeal to a broader range of investors to generate greater investor interest in us; and ● Reduce stockholder transaction costs because investors would pay lower commissions to trade a fixed dollar amount of our stock if our stock price were higher than they would if our stock price were lower. 18 Our business depends substantially on the continuing efforts of our executive officers, key employees and qualified personnel, and our business operations may be severely disrupted if we lose the services of such personnel.
Added
Our two major stockholders, Ourgame International Holdings Limited (“Ourgame”) and Knighted Pastures, hold shares of our common stock representing approximately 31.5% and 31.5%, respectively, of our total voting power as of May 27, 2025 (collectively, the “Significant Stockholders”).
Added
See Risk Factors — “We may be subject to litigation, including stockholder litigation, which could have an adverse effect on our business and operations.” This concentration of ownership may also have the effect of delaying, preventing or deterring a change in control of the Company.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

2 edited+1 added−0 removed10 unchanged
Biggest changeWe regularly assess the threat landscape and take a universal view of cybersecurity risks, with a layered cybersecurity strategy based on prevention, detection, and mitigation. Our information technology (IT) security team reviews enterprise risk management-level cybersecurity risks annually.
Biggest changeWe regularly assess the threat landscape and take a universal view of cybersecurity risks, with a layered cybersecurity strategy based on prevention, detection, and mitigation. Our information technology (IT) security team reviews enterprise risk, including management-level cybersecurity risks annually.
We face a number of cybersecurity risks in connection with our business. Although such risks have not materially affected us, including our business strategy, results of operations or financial condition, to date, we have, from time to time, experienced threats to and breaches of our data and systems, including malware and computer virus attacks. 20
We face a number of cybersecurity risks in connection with our business. Although such risks have not materially affected us, including our business strategy, results of operations or financial condition, to date, we have, from time to time, experienced threats to and breaches of our data and systems, including malware and computer virus attacks.
Added
As of the date of this Annual Report on Form 10-K, we are not aware of any previous cybersecurity incidents that have materially affected or are reasonably likely to materially affect the Company. 22

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed3 unchanged
Biggest changeItem 2. Properties The Company’s main offices are licensed and are located at 745 Fifth Avenue, Suite 500, New York, NY 10151. The Company considers this office space adequate for its current office operations. The initial term expired on July 31, 2022, and the Company has been on a month-to-month basis thereafter.
Biggest changeItem 2. Properties The Company’s main offices are leased and are located at 745 Fifth Avenue, Suite 500, New York, NY 10151. The Company considers this office space adequate for its current office operations. The initial term expired on July 31, 2022, and the Company has been on a month-to-month basis thereafter.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

5 edited+11 added−3 removed0 unchanged
Biggest changeThe Knighted Action seeks both injunctive reliefs and money damages. We believe the claims in the Knighted Action lack merit and intend to defend against them vigorously. For information regarding legal proceedings, also see Note 12 “Commitments and Contingencies,” to the Consolidated Financial Statements included in this Annual Report on Form 10-K. Item 4.
Biggest changeFor information regarding legal proceedings, also see Note 14 “Commitments and Contingencies,” to the Consolidated Financial Statements included in this Annual Report on Form 10-K. Item 4. Mine Safety Disclosures Not applicable. 23 PART II
The complaint alleges, among other things, that the members of our Board of Directors breached their fiduciary duty in connection with (1) the approval of a Share Purchase Agreement that AGAE entered into on or around December 28, 2023, (2) the approval and adoption of certain amendments to AGAE’s Bylaws on or around January 5, 2024, and (3) the approval and adoption of a rights agreement on or around February 8, 2024.
The complaint alleged, among other things, that the members of our Board of Directors breached their fiduciary duty in connection with (1) the approval of a Share Purchase Agreement that AGAE entered into on or around December 28, 2023, (2) the approval and adoption of certain amendments to AGAE’s Bylaws on or around January 5, 2024, and (3) the approval and adoption of a rights agreement on or around February 8, 2024.
Yangyang Li, et al. , C.A. No. 2024-0222 in the Court of Chancery of the State of Delaware against us, the members of our Board of Directors, and certain additional defendants (the “Knighted Action”).
Knighted Pastures, LLC On March 7, 2024, Knighted Pastures, LLC (“Knighted”), an AGAE stockholder, filed a complaint captioned Knighted Pastures, LLC v. Yangyang Li, et al. , C.A. No. 2024-0222 in the Court of Chancery of the State of Delaware against us, the members of our Board of Directors, and certain additional defendants (the “Knighted Action”).
Item 3. Legal Proceedings We may be subject to litigation from stockholders, suppliers and other third parties from time to time. Such litigation may have an adverse impact on our business and results of operations or may cause disruptions to our operations.
Item 3. Legal Proceedings We may be subject to litigation from stockholders, suppliers and other third parties from time to time.
As discussed in more detail below, Knighted Pastures, LLC (“Knighted”) recently filed a complaint against, among other defendants, us and the members of our Board of Directors. We expect to incur additional costs to defend such litigation which may cause our management to divert attention and resources from our business operations.
As discussed in more detail below, Knighted Pastures, LLC (“Knighted”) has filed multiple complaints against, among other defendants, us and the members of our Board of Directors.
Removed
In addition, the complaint states that Knighted seeks to nominate directors to AGAE’s Board and effect certain changes with respect to the business and management of AGAE.
Added
Such litigation, such as those discussed below, may have an adverse impact on our business and results of operations or may cause disruptions to our operations, and may result in fines; penalties, compensatory, treble or other damages; or non-monetary relief.
Removed
In the event directors nominated by Knighted are elected to our board of directors, such directors may disagree with the strategic directions of the Company or otherwise take actions that may adversely affect the interest of our shareholders. Knighted Pastures, LLC On March 7, 2024, Knighted Pastures, LLC (“Knighted”), an AGAE stockholder, filed a complaint captioned Knighted Pastures, LLC v.
Added
We have incurred and expect to continue incurring additional costs to defend against active litigations which may cause our management to divert attention and resources from our business operations For further information on the risks we face from existing and future claims, suits, investigations and proceedings, see “Risk Factors” in Part I, Item 1A of this report.
Removed
Mine Safety Disclosures Not applicable. 21 PART II
Added
On June 15, 2024, the Company’s board of directors approved resolutions providing Amendment of Bylaws, Exemption to Shareholders Rights Plan, Election of Class B Directors, Proxy for Restricted Stock Awards, Waiver of Advance Notice Provision in Bylaws, Determination of Annual Meeting Date and Authority to Modify Resolutions.
Added
On June 17, 2024, the directors filed a motion to dismiss the complaint as moot based on the board of directors’ approval of the foregoing resolutions. On October 10, 2024, the Court issued an order closing the case. On November 12, 2024, Knighted filed a complaint captioned Knighted Pastures, LLC v. Yangyang Li, et al., , C.A.
Added
No. 2024-1158-JTL in the Court of Chancery of the State of Delaware, naming the Company’s board of directors and certain third parties concerning the board of directors’ approval of the transaction with Blue Planet New Technology, Ltd., an affiliate of Yellow River.
Added
The complaint alleges that the board of directors breached its fiduciary duties by approving the transaction which Knighted alleges served to disenfranchise Knighted’s stockholder rights.
Added
On April 25, 2025, the board of directors approved resolutions to rescind the transaction with Blue Planet New Technologies, Ltd., acknowledge and accept the resignation of Zongmin Ding from the board, effective April 25, 2025, determine to hold a combined annual meeting for 2024 and 2025 within 120 days from the date the Court enters dismissal or otherwise stays the lawsuit, and resolve that until the occurrence of the 2024 and 2025 combined annual meeting, the Company shall not: (i) take any action that would result in changes to the size of Board; (ii) modify the Company’s Bylaws or Certificate of Incorporation; (iii) modify the Company’s charters for its audit, compensation, and nominating and corporate governance committees; (iv) modify the Company’s code of business conduct and ethics; (v) take any action to invalidate Plaintiff’s nomination of Roy Choi, Walter Ivey Delph III, and Jennifer van Dijk to the Board in opposition to the Company’s three directors that are up for election at the 2024 annual meeting; and (vi) enter into any transaction that would result in the issuance of equity in the Company to any third party, provided, however, that the foregoing shall not apply to any matter that is subject to a stockholder vote and does not take effect until the requisite stockholder approval is obtained.
Added
The same day, director defendants filed a motion to dismiss the complaint as moot, or in the alternative stay the action pending the outcome of the 2024/2025 combined annual meeting. On April 29, 2025, the Court granted the motion with modifications.
Added
On May 22, 2025, the Court entered an order staying the case and preserving the status quo pending the outcome of the 2024/2025 combined annual meeting of stockholders scheduled to be held on August 4, 2025. Timothy G. Schuebel On September 25, 2024, Timothy G. Schubel, an AGAE stockholder, filed a complaint captioned Timothy G. Schubel v.
Added
Allied Gaming & Entertainment, Inc. et al. , C.A. No. 2024-0996-JTL, seeking to represent a class of AGAE stockholders and alleging that the Shareholder Rights Plan of the Company, dated February 9, 2024 (the “Rights Plan”), contained provision(s) that were contrary to Delaware law.
Added
The Company’s board of directors is evaluating the claims related to the Rights Plan, and the Company and its board of directors’ legal rights. On May 30, 2025, the Board approved an amendment to certain provisions in Shareholder Rights Plan governing liabilities and fiduciary duties of directors under applicable Delaware law. The matter is presently pending.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+0 added−4 removed4 unchanged
Biggest changeThe Shares were issued in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act of 1933, as amended. Securities Authorized for Issuance Under Equity Compensation Plans Information about our equity compensation plan in Item 12 of Part III of this Annual Report on Form 10-K is incorporated herein by reference.
Biggest changeSecurities Authorized for Issuance Under Equity Compensation Plans Information about our equity compensation plan in Item 12 of Part III of this Annual Report on Form 10-K is incorporated herein by reference.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers On November 11, 2022, our Board of Directors (the “Board”) authorized a stock repurchase program under which we are authorized to repurchase up to $10 million of our outstanding shares of common stock through November 17, 2024.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers On November 11, 2022, our Board of Directors (the “Board”) authorized a stock repurchase program under which we are authorized to repurchase up to $10 million of our outstanding shares of common stock.
Payment of future cash dividends, if any, will be at the discretion of our Board of Directors after taking into account various factors, including our financial condition, operating results, current and anticipated cash needs, the requirements of our current or then-existing debt instruments and other factors our Board of Directors deems relevant.
Payment of future cash dividends, if any, will be at the discretion of our Board of Directors after taking into account various factors, including our financial condition, operating results, current and anticipated cash needs, the requirements of our current or then-existing debt instruments and other factors our Board of Directors deems relevant. Recent Sales of Unregistered Securities None.
Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Market Information Our common stock is traded on the NASDAQ Capital Market under the symbol “AGAE.” Holders On March 27, 2024, there were 23 holders of record of our common stock, one of which was Cede & Co., a nominee for The Depository Trust Company, or DTC.
Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Market Information Our common stock is traded on the NASDAQ Capital Market under the symbol “AGAE.” Holders On May 27, 2025, there were 28 holders of record of our common stock, one of which was Cede & Co., a nominee for The Depository Trust Company, or DTC.
The following table provides information with respect to repurchases made under the stock repurchase program during the fourth quarter of 2023: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Program Approximate Dollar Value of Shares Available to be Purchased Under the Program October 1, 2023 to October 31, 2023 - $ - - $ - November 1, 2023 to November 30, 2023 36,977 $ 0.83 36,977 $ 7,306,347 December 1, 2023 to December 31, 2023 - $ - - $ - Item 6. [Reserved] 22
The following table provides information with respect to repurchases made under the stock repurchase program during the fourth quarter of 2024: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Program Approximate Dollar Value of Shares Available to be Purchased Under the Program October 1, 2024 to October 31, 2024 - $ - - $ - November 1, 2024 to November 30, 2024 - $ - - $ - December 1, 2024 to December 31, 2024 514 $ 0.79 514 $ 7,305,926 24 Item 6. [Reserved]
Removed
Recent Sales of Unregistered Securities On December 28, 2023, we entered into a securities purchase agreement with Elite Fun Entertainment Co., Ltd.
Removed
(“Elite Fun”) (as amended by those certain Side Letters dated February 28, 2024, and March 7, 2024, the “SPA”), pursuant to which we agreed to issue and sell to Elite Fun an aggregate of 7,330,000 shares of our common stock (the “Shares”) for a total purchase price of $6,597,000.
Removed
Elite Fun also agreed to assist us in the pursuit of certain strategic and business transactions in China. The transaction closed on March 7, 2024 (the “Closing Date”). We intend to use the net proceeds from this financing for working capital and general corporate purposes.
Removed
In addition, pursuant to the SPA, we have agreed to use commercially reasonable efforts to (i) prepare and file with the SEC within 45 days of the Closing Date a registration statement registering the resale of the Shares and (ii) ensure that the registration statement is declared effective within 90 days following the Closing Date.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

39 edited+20 added−6 removed35 unchanged
Biggest changeFurthermore, we boast a mobile esports arena, an 18-wheel semi-trailer, which seamlessly transforms into a top-tier esports arena and competition stage or a dynamic live show arena complete with full content production capabilities and an interactive talent studio. 23 Results of Operations for the Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 For the Years Ended December 31, Favorable (in thousands) 2023 2022 (Unfavorable) Revenues: In-person $ 4,956 $ 4,951 $ 5 Multiplatform content 2,000 1,401 599 Casual mobile games 699 - 699 Total Revenues 7,655 6,352 1,303 Costs and Expenses: In-person (exclusive of depreciation and amortization) 2,684 3,777 1,093 Multiplatform content (exclusive of depreciation and amortization) 1,518 1,035 (483 ) Casual mobile games (exclusive of depreciation and amortization) 594 - (594 ) Research and development expenses 163 - (163 ) Selling and marketing expenses 227 235 8 General and administrative expenses 7,569 10,774 3,205 Depreciation and amortization 1,500 2,065 565 Impairment of digital assets - 164 164 Impairment of property and equipment - 68 68 Total Costs and Expenses 14,255 18,118 3,863 Loss From Operations (6,600 ) (11,766 ) 5,166 Other income, net 47 153 (106 ) Interest income, net 2,958 790 2,168 Total Other Income 3,005 943 2,062 Net loss $ (3,595 ) $ (10,823 ) $ 7,228 Revenues In-person experience revenue was $5.0 million for each of the years ended December 31, 2023 and 2022.
Biggest changeFurthermore, we boast a mobile esports arena, an 18-wheel semi-trailer, which seamlessly transforms into a top-tier esports arena and competition stage or a dynamic live show arena complete with full content production capabilities and an interactive talent studio. 25 Results of Operations for the Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 For the Years Ended December 31, Favorable (in thousands) 2024 2023 (Unfavorable) Revenues: In-person $ 4,670 $ 4,956 $ (286 ) Multiplatform content - 2,000 (2,000 ) Casual mobile gaming 4,409 699 3,710 Total Revenues 9,079 7,655 1,424 Costs and Expenses: In-person (exclusive of depreciation and amortization) 2,497 2,684 187 Multiplatform content (exclusive of depreciation and amortization) - 1,518 1,518 Casual mobile gaming (exclusive of depreciation and amortization) 3,876 594 (3,282 ) Research and development expenses 865 163 (702 ) Selling and marketing expenses 287 227 (60 ) General and administrative expenses 13,349 7,569 (5,780 ) Depreciation and amortization 1,586 1,500 (86 ) Impairment of goodwill 9,567 - (9,567 ) Impairment of software license 358 - (358 ) Total Costs and Expenses 32,385 14,255 (18,130 ) Loss From Operations (23,306 ) (6,600 ) (16,706 ) Other Income (Expense): Other income (expense), net 6 47 (41 ) Loss on escrow settlement (3,000 ) - (3,000 ) Realized gain on investment in money market fund 209 - 209 Unrealized loss on investment in marketable securities (536 ) - (536 ) Loss on foreign currency transactions, net (29 ) - (29 ) Interest income, net 3,655 2,958 697 Pre-Tax Loss (23,001 ) (3,595 ) (19,406 ) Income tax benefit 425 - 425 Net Loss $ (22,576 ) $ (3,595 ) $ (18,981 ) Revenues In-person experience revenue was $4.7 million and $5.0 million for the years ended December 31, 2024 and 2023.
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment dates. 27 The Company assesses uncertain tax positions in accordance with ASC 740, Income Taxes.
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment dates. The Company assesses uncertain tax positions in accordance with ASC 740, Income Taxes.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with the financial statements and related disclosures for the years ended December 31, 2023 and 2022, which are included elsewhere in this Annual Report on Form 10-K.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with the financial statements and related disclosures for the years ended December 31, 2024 and 2023, which are included elsewhere in this Annual Report on Form 10-K.
Ltd (“ZTech”), a prominent mobile games developer and operator, is engaged in the development and distribution of casual mobile games in Mainland China, solidifies our presence in this lucrative sector. Moreover, our subsidiary Allied Experiential Entertainment (“AEE”), focuses on orchestrating live entertainment events and offers management and consultation service to experiential entertainment venue operation.
Ltd (“Z-Tech”), a prominent mobile games developer and operator, is engaged in the development and distribution of casual mobile games in Mainland China, solidifies our presence in this lucrative sector. Moreover, our subsidiary Allied Experiential Entertainment (“AEE”), focuses on orchestrating live entertainment events and offers management and consultation service to experiential entertainment venue operation.
The Company intends to meet these cash requirements from its current cash balance. Cash Flows from Operating, Investing and Financing Activities The table below summarizes cash flows from operations for the years ended December 31, 2023 and 2022, respectively.
The Company intends to meet these cash requirements from its current cash and cash equivalents balance. 28 Cash Flows from Operating, Investing and Financing Activities The table below summarizes cash flows from operations for the years ended December 31, 2024 and 2023, respectively.
Net Cash Provided By (Used In) Investing Activities Net cash provided by investing activities during the year ended December 31, 2023 was approximately $6.1 million, which consisted of $80.0 million in proceeds from the maturing of short-term investments and $0.1 million proceeds from the sale of equipment.
Net cash provided by investing activities for the year ended December 31, 2023 was approximately $6.1 million, which consisted of $80.0 million from proceeds from the sale of short-term investments, and approximately $0.1 million from proceeds from the sale of equipment.
The dollar value of the shares available to be purchased under the program is $7,306,347 as of December 31, 2023. Off-Balance Sheet Arrangements The Company does not engage in any off-balance sheet financing activities, nor does the Company have any interest in entities referred to as variable interest entities.
The dollar value of the shares available to be purchased under the program is $7,305,926 as of December 31, 2024. Off-Balance Sheet Arrangements The Company does not engage in any off-balance sheet financing activities, nor does the Company have any interest in entities referred to as variable interest entities.
During the years ended December 31, 2023 and 2022, the net cash used in operating activities was primarily attributable to the net losses of approximately $3.6 million and $10.8 million, respectively, adjusted for $2.6 million and $4.0 million, respectively, of net non-cash expenses, and approximately $7.1 million and $4.1 million, respectively, of cash used to fund changes in the levels of operating assets and liabilities.
During the years ended December 31, 2024 and 2023, the net cash used in operating activities was primarily attributable to the net loss of approximately $22.6 million and $3.6 million, respectively, adjusted for $12.7 million and $2.6 million, respectively, of net non-cash expenses, and approximately ($0.1) million and $7.2 million, respectively, of cash used to fund changes in the levels of operating assets and liabilities.
This was offset by $66.5 million for the purchase of short-term investments, $6.4 million from the acquisition of ZTech, $0.7 million from the purchases of intangible assets, and $0.4 million from the purchases of property and equipment.
This was offset by $66.5 million for purchases of short-term investments, approximately $6.4 million for the acquisition of Z-Tech, approximately $0.7 million for purchases of intangible assets, and approximately $0.4 million for purchases of property and equipment.
Cash requirements for our current liabilities include approximately $9.2 million for loans payable, $1.1 million for accounts payable and accrued expenses, and $1.5 million for the current portion of an operating lease liability. Cash requirements for non-current liabilities include approximately $5.6 million for the non-current portion of an operating lease liability.
Cash requirements for our current liabilities include approximately $25.8 million for loans payable, approximately $2.5 million in aggregate for accounts payable and accrued expenses, and approximately $1.6 million for the current portion of an operating lease liability. Cash requirements for non-current liabilities include approximately $4.0 million for the non-current portion of an operating lease liability.
The evaluation of asset impairment requires the Company to make assumptions about future cash flows over the life of the asset being evaluated. These assumptions require significant judgment and actual results may differ from assumed and estimated amounts. Item 7A. Quantitative and Qualitative Disclosures about Market Risk Not applicable.
The evaluation of asset impairment requires the Company to make assumptions about future cash flows over the life of the asset being evaluated. These assumptions require significant judgment and actual results may differ from assumed and estimated amounts.
Interest income, net Interest income was approximately $3.0 million for the twelve months ended December 31, 2023 compared to approximately $0.8 million for the year ended December 31, 2022, representing an increase of interest income of approximately $2.2 million, or 274%.
Interest income, net Interest income was approximately $3.7 million for the twelve months ended December 31, 2024 compared to approximately $3.0 million for the year ended December 31, 2023, representing an increase of interest income of approximately $0.7 million, or 24%.
For the years ended December 31, 2023 and 2022, we incurred net losses of approximately $3.7 million and $10.8 million, respectively, and used cash in operations of approximately $8.1 million and $10.9 million, respectively.
For the years ended December 31, 2024 and 2023, we incurred net losses of approximately $22.6 million and $3.6 million, respectively, and had net cash used in operations of approximately $9.8 million and $8.1 million, respectively.
For the Years Ended December 31, (in thousands) 2023 2022 Net cash provided by (used in) Operating activities $ (8,139 ) $ (10,934 ) Investing activities $ 6,128 $ (70,135 ) Financing activities $ 7,147 $ (611 ) Net Cash Used in Operating Activities Net cash used in operating activities primarily represents the results of operations exclusive of non-cash expenses plus the impact of changes in operating assets and liabilities.
For the Years Ended December 31, (in thousands) 2024 2023 Net cash provided by (used in): Operating activities $ (9,769 ) $ (8,139 ) Investing activities $ 23,808 $ 6,128 Financing activities $ 23,929 $ 7,147 Net Cash Used in Operating Activities Net cash used in operating activities primarily represents the results of operations exclusive of non-cash expenses plus the impact of changes in operating assets and liabilities.
The increase in multiplatform revenues is the result of additional revenue generated from Season 2 of Elevated, a live streaming event which had 10 episodes in 2023 compared to 4 episodes in 2022. Casual mobile games revenue was $0.7 million for the year ended December 31, 2023 and $0 for the year ended December 31, 2022, respectively.
The decrease in multiplatform revenues is the result of revenue generated from Season 2 of Elevated, a live streaming event which had 10 episodes in 2023 and did not occur in 2024. Casual mobile gaming revenue was $4.4 million for the year ended December 31, 2024 and $0.7 for the year ended December 31, 2023, respectively.
Net cash used in operating activities for the years ended December 31, 2023 and 2022 were approximately $8.1 million and $10.9 million, respectively, representing a decrease of $2.8 million.
Net cash used in operating activities for the years ended December 31, 2024 and 2023 were approximately $9.8 million and $8.1 million, respectively, representing an increase of approximately $1.7 million.
Multiplatform content revenues increased by approximately $0.6 million, or 43%, to approximately $2 million for the year ended December 31, 2023 from approximately $1.4 million for the year ended December 31, 2022.
Multiplatform content revenues decreased by approximately $2.0 million, or 100% to approximately $0.0 million for the year ended December 31, 2024 from approximately $2.0 million for the year ended December 31, 2023.
Casual gaming costs and revenues began in connection with the business combination with ZTech on October 31, 2023. Research and development expenses were $163 thousand and $0 for the years ended December 31, 2023 and 2022, respectively. Research and development expenses consist principally of costs related to the development of new casual mobile games for ZTech.
Casual mobile gaming costs and revenues began in connection with the business combination with Z-Tech on October 31, 2023, making 2024 the first full year of casual mobile gaming costs and revenues. Research and development expenses were $866 thousand and $163 thousand for the years ended December 31, 2024 and 2023, respectively.
Costs and expenses In-person costs (exclusive of depreciation and amortization) decreased by approximately $1.1 million, or 29%, to approximately $2.7 million for the year ended December 31, 2023 from approximately $3.8 million for the year ended December 31, 2022. The decrease is a result of a decrease in HyperX Arena events in 2023.
Costs and expenses In-person costs (exclusive of depreciation and amortization) decreased by approximately $0.2 million, or 7%, to approximately $2.5 million for the year ended December 31, 2024 from approximately $2.7 million for the year ended December 31, 2023.
General and administrative expenses decreased by approximately $3.2 million, or 30%, to approximately $7.6 million for the year ended December 31, 2023 from approximately $10.8 million for the year ended December 31, 2022.
General and administrative expenses increased by approximately $5.8 million, or 76%, to approximately $13.4 million for the year ended December 31, 2024 from approximately $7.6 million for the year ended December 31, 2023.
December 31, (in thousands) 2023 2022 Current Assets $ 78,341 $ 82,377 Current Liabilities $ 11,952 $ 3,298 Working Capital Surplus $ 66,389 $ 79,079 Our primary sources of liquidity and capital resources have been cash and short-term investments on the balance sheet and funds raised through debt or equity financing.
December 31, (in thousands) 2024 2023 Current Assets $ 94,746 $ 78,341 Current Liabilities $ 30,478 $ 11,952 Working Capital Surplus $ 64,268 $ 66,389 Our primary sources of liquidity and capital resources have been cash and short-term investments on the balance sheet and the funds received through the sale of WPT.
The total number of shares purchased by the Company during the years ended December 31, 2023 and 2022 was 1,698,038 and 581,746, respectively. The average price per share for the shares purchased during the years ended December 31 2023 and 2022 were $1.18 per share.
The stock repurchase will be funded using the Company’s working capital. The total number of shares purchased by the Company during the years ended December 31, 2024 and 2023 was 514 and 1,698,038, respectively. The average price per share for the shares purchased during the years ended December 31 2024 and 2023 was $1.23 per share.
Other income (expense), net We recognized other income, net, of approximately $47 thousand during the year ended December 31, 2023, compared to $153 thousand of other income, net, recorded for the year ended December 31, 2022. The decrease was a result of the reversal of an income tax payable in 2022 that was no longer due.
Other income, net We recognized other expense, net, of approximately $6 thousand during the year ended December 31, 2024, compared to $47 thousand of other income, net, recorded for the year ended December 31, 2023, a decrease of $41 thousand.
The stock repurchase program does not obligate the Company to acquire any particular amount of common stock, and it may be extended, suspended or discontinued at any time at management’s discretion. The stock repurchase will be funded using the Company’s working capital.
Repurchases under the program will be made in open market transactions in compliance with the SEC Rule 10b-18 and federal securities laws. The stock repurchase program does not obligate the Company to acquire any particular amount of common stock, and it may be extended, suspended or discontinued at any time at management’s discretion.
Stock Repurchase Program On November 11, 2022, our Board of Directors (the “Board”) authorized a stock repurchase program under which we are authorized to repurchase up to $10 million of our outstanding shares of common stock through November 17, 2024.
Stock Repurchase Program On November 11, 2022, our Board of Directors (the “Board”) authorized a stock repurchase program under which we are authorized to repurchase up to $10.0 million of our outstanding shares of common stock. The manner, timing and amount of any purchase will be based on an evaluation of market conditions, stock price and other factors.
The increase in casual mobile games revenue was due to the casual mobile gaming revenue earned subsequent to the business combination with ZTech on October 31, 2023.
The increase in casual mobile games revenue was due to the recognition of twelve months of revenue in 2024 as opposed to only two months in 2023, which were earned subsequent to the business combination with Z-Tech on October 31, 2023.
As of December 31, 2023, we had cash of $16.3 million (not including approximately $5.0 million of restricted cash and $56.5 million of short-term investments) and working capital of approximately $66.4 million.
As of December 31, 2024, we had cash and cash equivalents of approximately $59.2 million (not including $8.8 million of short-term investments and $3.5 million of marketable securities) and working capital of approximately $64.3 million.
The increase in multiplatform costs corresponds to the production costs for 10 episodes of Season Two of Elevated which aired in Q2 2023 versus only four episodes in Season One which aired in Q1 of 2022. 24 Casual mobile games costs (exclusive of depreciation and amortization) were $594 thousand for the year ended December 31, 2023 and $0 for the year ended December 31, 2022, respectively.
The decrease in multiplatform costs corresponds to the production costs for 10 episodes of Season Two of Elevated which were streamed in 2023 but did not occur in 2024. Casual mobile gaming costs (exclusive of depreciation and amortization) were $3.9 million for the year ended December 31, 2024 and $0.6 million for the year ended December 31, 2023, respectively.
Multiplatform content costs (exclusive of depreciation and amortization) increased by approximately $0.5 million, or 47%, to approximately $1.5 million for the year ended December 31, 2023 from approximately $1.0 million for the year ended December 31, 2022.
The decrease is the result of the decrease in costs associated with third party events at the arena held during the year ended 2024 compared to 2023. 26 Multiplatform content costs (exclusive of depreciation and amortization) decreased by approximately $1.5 million, or 100%, to approximately $0.0 million for the year ended December 31, 2024 from approximately $1.5 million for the year ended December 31, 2023.
Business Combinations We record business combinations using the acquisition method of accounting, which requires all of the assets acquired and liabilities assumed to be recorded at fair value as of the acquisition date. The excess of the purchase price over the estimated fair values of the net tangible and intangible assets acquired is recorded as goodwill.
The excess of the purchase price over the estimated fair values of the net tangible and intangible assets acquired is recorded as goodwill.
Net cash provided by financing activities during the year ended December 31, 2023 represented proceeds from a short-term loan of $9.2 million partially offset by the purchase of treasury stock of $2.1 million.
Net cash provided by financing activities during the year ended December 31, 2023 was approximately $7.1 million, which consisted of approximately $9.2 million from proceeds from short-term loans, partially offset by approximately $2.1 million for repurchases of common stock. 29 Capital Expenditures As of December 31, 2024, the Company had no material commitments for capital expenditures.
The following are not intended to be a comprehensive list of all of our accounting estimates. Our accounting estimates are more fully described in Note 2 – Summary of Significant Accounting Policies, in our financial statements included at the end of this Annual Report.
Our accounting estimates are more fully described in Note 2 – Summary of Significant Accounting Policies, in our financial statements included at the end of this Annual Report. 30 Business Combinations We record business combinations using the acquisition method of accounting, which requires all of the assets acquired and liabilities assumed to be recorded at fair value as of the acquisition date.
The in-person experience revenues consisted of a $0.5 million decrease in event revenue and a $0.6 million decrease in food and beverage revenue all due to a decrease in HyperX Arena events in 2023. The decreases were offset by an increase in sponsorship revenue related to a new naming rights agreement for our HyperX Arena in Las Vegas.
The in-person experience revenues consisted of a $0.2 million decrease in event revenue, a $0.1 million decrease in ticket and gaming revenue, and a $0.1 million decrease in merchandising revenue. The decreases were offset by an increase of $0.1 million in sponsorship revenue related to Meta truck sponsorships.
Depreciation and amortization decreased by approximately $0.6 million, or 29%, to approximately $1.5 million for the year ended December 31, 2023, from approximately $2.1 million for the year ended December 31, 2022. The decrease was primarily due to production equipment with a gross cost of approximately $7.0 million that became fully depreciated on March 31, 2023.
Depreciation and amortization increased by approximately $85 thousand, or 6%, to approximately $1.6 million for the year ended December 31, 2024, from approximately $1.5 million for the year ended December 31, 2023. The increase was primarily due to the amortization of intangibles that were recorded as part of the business combination with Z-Tech on October 31, 2023.
Net Cash Provided by (Used in) Financing Activities Net cash provided by financing activities for the year ended December 31, 2023 was approximately $7.1 million compared to approximately $0.6 million of net cash used in financing activities during the year ended December 31, 2022.
Loss on foreign currency transactions, net The loss on foreign currency transactions was approximately $0.1 million for the year ended December 31, 2024 compared to $0 for the year ended December 31, 2023.
Net cash used in investing activities during the year ended December 31, 2022 was approximately $70.1 million, which consisted primarily of approximately $70.0 million for the purchase of short-term investments, and $0.1 million for capital expenditures.
Net Cash Provided By Investing Activities Net cash provided by investing activities for the year ended December 31, 2024 was approximately $23.8 million, which consisted of approximately $127.7 million from proceeds from the sale of short-term investments, approximately $1.3 million from proceeds from the repayment of a short-term loan receivable, and approximately $0.8 million of proceeds from the redemption of marketable securities.
The increase is a result of the interest earned on short-term investments purchased at various times commencing in the fourth quarter of 2022. 25 Liquidity and Capital Resources The following table summarizes our total current assets, current liabilities and working capital at December 31, 2023 and December 31, 2022, respectively.
L iquidity and Capital Resources The following table summarizes our total current assets, current liabilities and working capital at December 31, 2024 and December 31, 2023, respectively.
Selling and marketing expenses decreased by approximately $8 thousand, or 3%, to approximately $227 thousand for the year ended December 31, 2023 from approximately $235 thousand for the year ended December 31, 2022.
Research and development expenses consist principally of costs related to the development of new casual mobile games for Z-Tech which was acquired on October 31, 2023. Selling and marketing expenses increased by approximately $60 thousand, or 26%, to approximately $287 thousand for the year ended December 31, 2024 from approximately $227 thousand for the year ended December 31, 2023.
The decrease in general and administrative expenses resulted from (a) a $1.5 million ERC credit recognized in 2023, (b) a $0.8 million reduction in payroll and payroll related costs during 2023 due to reduced headcount, (c) $0.8 million of higher stock-based compensation in 2022 related to the accelerated vesting of options previously granted to the former Chief Executive Officer, (d) a $0.2 million decrease in insurance expenses, and a $0.1 million decrease in rent expense.
The increase in general and administrative expenses resulted from (a) a $1.1 million increase in payroll and payroll related costs due to an Employee Retention Credit (“ERC”) received and recorded as a reduction of expenses during the year ended December 31, 2023, (b) a $3.9 million increase professional and legal fees relating to shareholder complaints filed in 2024, and (c) a $1.0 million increase in stock-based compensation related to restricted share awards granted on February 22, 2024.
Removed
These decreases were slightly offset by a $0.2 million increase in legal and professional fees related to various employment and service provider transition matters, in addition to merger and acquisition related professional fees in connection with the acquisition of a 40% equity interest in ZTech and other strategic investment opportunities.
Added
These increases were slightly offset by a $0.2 million decrease in insurance costs related to a D&O insurance policy that was renewed at a lower cost in August 2023.
Removed
Impairment of digital assets was $0 for the year ended December 31, 2023, compared to $164 thousand for the year ended December 31, 2022. The impairment loss during 2022 was the result of the market price on active exchanges going below the carrying value of the digital assets.
Added
Impairment of goodwill was approximately $9.6 million for the year ended December 31, 2024, compared to $0.0 million for the year ended December 31, 2023. The impairment resulted from management’s determination that the fair value of one of its reporting units was less than its carrying amount.
Removed
The market price has not gone below the carrying value of the digital assets during the twelve months ended December 31, 2023. Impairment of property and equipment was $0 for the year ended December 31, 2023, compared to $68 thousand for the year ended December 31, 2022.
Added
Impairment of software license was approximately $0.4 million for the year ended December 31, 2024, compared to $0.0 million for the year ended December 31, 2023. The impairment resulted from management’s determination that the fair value of its software license was less than its carrying amount.
Removed
The impairment in 2022 resulted from management’s determination that the projected cash flows from certain equipment will not be sufficient to recover the carrying value of those assets.
Added
Loss on escrow settlement We recognized a loss in connection with a Settlement and Release Agreement dated September 16, 2024, with Brookfield Property Partners (“Brookfield”), under which $3.0 million was released and paid to Brookfield from an escrow account established in January 2020 (see Note 14 – Commitments and Contingencies – Investment Agreement).
Removed
Net cash used in financing activities during the year ended December 31, 2022 represented the purchase of treasury stock. 26 Capital Expenditures As of December 31, 2023, the Company had no material commitments for capital expenditures.
Added
The entire escrow account of $5.0 million was included in restricted cash on the consolidated balance sheets from that date through the date of the Settlement and Release Agreement.
Removed
The manner, timing and amount of any purchase will be based on an evaluation of market conditions, stock price and other factors. Repurchases under the program will be made in open market transactions in compliance with the Securities and Exchange Commission Rule 10b-18 and federal securities laws.
Added
Realized gain on investment in money market fund We realized a gain on investment in money market fund of $0.2 million for the year ended December 31, 2024, compared to $0.0 million for the year ended December 31, 2023.
Added
This increase is due to the change in fair value of the money market funds between the purchase date and December 31, 2024.
Added
There were no investments in money market funds for the year ended December 31, 2023. 27 Unrealized loss on investment in marketable securities The unrealized loss on investments in marketable securities for the years ended December 31, 2024 and 2023 were $0.5 million and $0.0, respectively.
Added
The increase in loss is due to the change in fair value of the marketable securities that were purchased during the year ended December 31, 2024. There were no investments in marketable securities for the year ended December 31, 2023.
Added
The increase is a result of changes in the exchange rate of the Japanese Yen to United States Dollar between the dates certain loans payable were borrowed, the dates certain loans receivable were issued, and the dates certain equity linked notes, and foreign securities were purchased in 2024.
Added
The increase is a result of the interest earned on certificates of deposit purchased at the end of 2023, equity and FX linked notes purchased in 2024, and interest on loans issued during the year ended December 31, 2024.
Added
This was offset by approximately $79.6 million for purchases of short-term investments, approximately $19.0 million for loans receivable, approximately $5.0 million for payments for investments in marketable securities, approximately $2.2 million for a land deposit, and approximately $0.1 million for purchases of intangible assets and property and equipment.
Added
Net Cash Provided By Financing Activities Net cash provided by financing activities for the year ended December 31, 2024 was approximately $23.9 million, which consisted of approximately $26.0 million from the proceeds of short-term loans, $6.6 million of proceeds from the issuance of common stock in securities purchase agreements, and $2.0 million of proceeds from issuance of common stock in share purchase agreements.
Added
This was partially offset by approximately $8.5 million for repayments of short-term loans, $2.0 million for repayments of proceeds from the cancellation of common stock previously issued pursuant to a share purchase agreement, and approximately $0.2 million for issuance costs associated with common stock issuances.
Added
The following are not intended to be a comprehensive list of all of our accounting estimates.
Added
Impairment of Goodwill The Company reviews for the impairment of goodwill annually or on an interim basis if events or circumstances indicate that the fair value of an asset has more likely than not decreased below its carrying value.
Added
In determining whether a quantitative assessment is required, the Company will evaluate relevant events or circumstances to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount.
Added
If, after performing the qualitative assessment, an entity concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the entity would perform the quantitative impairment test described in ASC 350.
Added
However, if, after applying the qualitative assessment, the entity concludes that it is not more than likely that the fair value is less than the carrying amount, the quantitative impairment test is not required. The Company bases these assumptions on its historical data and experience, industry projections, micro and macro general economic condition projections, and its expectations. 31 Item 7A.
Added
Quantitative and Qualitative Disclosures about Market Risk Not applicable.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 7A. Quantitative and Qualitative Disclosures about Market Risk 28 Item 8. Financial Statements and Supplementary Data 28 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 28 Item 9A. Controls and Procedures 28 Item 9B. Other Information 29
Biggest changeItem 7A. Quantitative and Qualitative Disclosures about Market Risk 32 Item 8. Financial Statements and Supplementary Data 32 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 32 Item 9A. Controls and Procedures 32 Item 9B. Other Information 33

Other AGAE 10-K year-over-year comparisons