UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to _______ Securities registered pursuant to Section 12(b) of the Act: | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | --- | --- | ...

Exhibit 99.1 Allied Gaming & Entertainment Announces Second Quarter 2025 Financial Results New York, NY (August 14, 2025) – Allied Gaming & Entertainment, Inc. (NASDAQ: AGAE) (the "Company" or "AGAE"), a global experiential entertainment company, today announced financial results for the second quarter ended June 30, 2025. "I am honored to be appointed CEO and I look forward to sharing more detail about our strategic vision in the second half of the year," said Mr. Yangyang Li, Allied Gaming & Entertainment ...

Core Viewpoint - Knighted Pastures, LLC, which owns approximately 31.5% of Allied Gaming's shares, advocates for change in the company's board and recommends shareholders vote for their nominee, Roy Choi, at the upcoming annual meeting [1][2]. Group 1: Operational Performance and Governance - Allied Gaming has underperformed financially and operationally across various metrics, lacking a clear strategy and exhibiting poor corporate governance [2][4]. - The company's overall financial performance has been characterized by slow revenue growth and persistent losses since 2019, continuing into Q1 2025 [4]. - There are significant concerns regarding the independence of the board, particularly due to ties with the largest shareholder, Ourgame, which raises questions about governance and decision-making [3][6]. Group 2: Proxy Advisory Firm's Recommendations - Institutional Shareholder Services Inc. (ISS) has recommended that stockholders vote for the election of Knighted's Class B director candidate, Roy Choi, citing the need for boardroom change [1][4]. - ISS supports Knighted's critique of Allied Gaming's unfocused strategy and lack of transparency in capital allocation decisions, which have led to operational challenges and litigation risks [4][6]. Group 3: Strategic Vision - Knighted emphasizes the need to restore accountability in the boardroom and implement a coherent strategic vision to unlock Allied Gaming's untapped potential for sustainable growth [4][5]. - The company has faced challenges with operational performance and has not provided shareholders with sufficient information to evaluate its performance effectively [4].

Concludes that Knighted Presented a “Focused Critique” that Supports a Case for Change Recommends Allied Gaming’s Shareholders Vote to Elect Knighted’s Class B Nominees – Roy Choi, Walter Delph, and Jennifer van Dijk - at Upcoming Annual Meeting on Knighted’s BLUE Proxy Card Raises Concerns about the Independence of the Incumbent Board Highlights Issues with Allied Gaming’s Operational Performance, Corporate Governance and “Unfocused Strategy” LOS ANGELES, July 25, 2025 (GLOBE NEWSWIRE) --  Knighted Pasture ...

PART I: FINANCIAL INFORMATION This section presents the company's financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures for the quarter ended March 31, 2025 [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements.) The company reported a net loss of $4.9 million for Q1 2025, driven by increased general and administrative expenses, with total assets rising to $117.9 million and liabilities to $45.0 million [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows total assets increased to $117.9 million, primarily due to a rise in short-term investments, while total liabilities grew to $45.0 million from increased loans payable Balance Sheet Summary (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $19,486 | $59,243 | | Short-term investments | $49,204 | $8,800 | | Total Current Assets | $98,009 | $94,746 | | **Total Assets** | **$117,861** | **$112,687** | | **Liabilities & Equity** | | | | Loans payable | $34,511 | $25,757 | | Total Current Liabilities | $40,706 | $30,478 | | **Total Liabilities** | **$44,972** | **$35,157** | | **Total Stockholders' Equity** | **$72,889** | **$77,530** | - Total assets increased by **$5.2 million**, primarily due to a **$40.4 million** increase in short-term investments, which was offset by a **$39.7 million** decrease in cash and cash equivalents[10](index=10&type=chunk) - Total liabilities increased by **$9.8 million**, mainly driven by an **$8.7 million** increase in loans payable[10](index=10&type=chunk) [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The statement of operations reveals a widened net loss of $4.9 million in Q1 2025, primarily due to a significant increase in general and administrative expenses Statement of Operations Summary (in thousands) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Revenues:** | | | | In-person | $1,657 | $1,255 | | Casual mobile gaming | $618 | $1,124 | | **Total Revenues** | **$2,275** | **$2,379** | | **Costs and Expenses:** | | | | General and administrative expenses | $5,481 | $2,858 | | **Total Costs and Expenses** | **$7,527** | **$5,055** | | **Loss From Operations** | **($5,252)** | **($2,675)** | | **Net Loss** | **($4,900)** | **($1,829)** | | **Net Loss per Share (Basic & Diluted)** | **($0.11)** | **($0.04)** | - Net loss attributable to common stockholders widened to **$4.8 million**, or **($0.11)** per share, compared to a loss of **$1.7 million**, or **($0.04)** per share, in the prior-year period[12](index=12&type=chunk) - The increase in net loss was primarily driven by a **92%** increase in general and administrative expenses, which rose to **$5.5 million** from **$2.9 million** year-over-year[12](index=12&type=chunk)[144](index=144&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flow analysis indicates a net decrease in cash of $39.8 million, primarily driven by increased cash used in investing activities for short-term investments Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Cash Used In Operating Activities | ($2,184) | ($2,145) | | Net Cash Used in Investing Activities | ($45,092) | ($14,493) | | Net Cash Provided By Financing Activities | $7,506 | $7,627 | | **Net Decrease In Cash** | **($39,757)** | **($9,020)** | - Cash used in investing activities significantly increased to **$45.1 million**, mainly due to **$64.0 million** in purchases of short-term investments and a **$2.5 million** investment in an unconsolidated affiliate[20](index=20&type=chunk)[158](index=158&type=chunk) - Cash provided by financing activities was **$7.5 million**, resulting from **$19.2 million** in proceeds from short-term loans, partially offset by **$11.7 million** in repayments[20](index=20&type=chunk)[160](index=160&type=chunk) [Selected Notes to Financial Statements](index=9&type=section&id=Notes%20to%20Financial%20Statements) Key notes detail business segments, revenue trends, significant new investments, ongoing legal proceedings, and subsequent events including a terminated securities purchase agreement and CEO change - **Business Segments:** The company operates through three main subsidiaries: Allied Esports Media (AEM) for esports events, a **40%** interest in ZTech for casual mobile games in China, and a **51%** interest in Skyline for live entertainment events[25](index=25&type=chunk) - **Revenue Breakdown:** In Q1 2025, in-person revenue (events, sponsorships) increased to **$1.66 million** from **$1.26 million** YoY, while casual mobile gaming revenue decreased to **$0.62 million** from **$1.12 million** YoY[40](index=40&type=chunk)[45](index=45&type=chunk) - **New Investments:** In Q1 2025, the company invested **$64 million** in new short-term investments, including equity-linked, ETF-linked, and bond-linked notes, and made a **$2.4 million** investment in Flywheel AB3 for "The Angry Birds Movie 3"[64](index=64&type=chunk)[79](index=79&type=chunk) - **Legal Proceedings:** The company is involved in a second lawsuit with stockholder Knighted Pastures, LLC, alleging breach of fiduciary duty, which is currently stayed pending the company's 2024/2025 annual meeting, with no estimable potential loss[98](index=98&type=chunk)[99](index=99&type=chunk)[100](index=100&type=chunk) - **Subsequent Events:** On April 25, 2025, the company terminated a Securities Purchase Agreement with Blue Planet, refunding **$6.6 million**, and on June 24, 2025, Yinghua Chen resigned as CEO, succeeded by Yangyang (James) Li[119](index=119&type=chunk)[120](index=120&type=chunk) [Management's Discussion and Analysis (MD&A)](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management attributes the wider net loss to increased legal fees and declining mobile gaming revenue, while liquidity remains strong despite Nasdaq delisting concerns and a terminated securities agreement [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Total revenues slightly decreased to $2.3 million, with in-person revenue growth offset by a significant decline in casual mobile gaming, leading to a wider operating loss Results of Operations Comparison (in thousands) | Account | Q1 2025 | Q1 2024 | Favorable (Unfavorable) | | :--- | :--- | :--- | :--- | | **Total Revenues** | **$2,275** | **$2,379** | **($104)** | | In-person | $1,657 | $1,255 | $402 | | Casual mobile gaming | $618 | $1,124 | ($506) | | **Total Costs and Expenses** | **$7,527** | **$5,055** | **($2,472)** | | General and administrative expenses | $5,481 | $2,858 | ($2,623) | | **Loss From Operations** | **($5,252)** | **($2,675)** | **($2,577)** | | **Net Loss** | **($4,900)** | **($1,829)** | **($3,071)** | - In-person revenues increased by **32%** due to higher revenue from arena events[139](index=139&type=chunk) - Casual mobile gaming revenue decreased by **45%** due to market contraction and increased competition[140](index=140&type=chunk) - General and administrative expenses increased by **92%** (**$2.6 million**), primarily from a **$3.2 million** increase in legal and professional fees related to a dissident stockholder complaint[144](index=144&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a working capital surplus of $57.3 million, primarily supported by cash, short-term investments, and funds from the World Poker Tour sale Working Capital (in thousands) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current Assets | $98,009 | $94,746 | | Current Liabilities | $40,706 | $30,478 | | **Working Capital Surplus** | **$57,303** | **$64,268** | - As of March 31, 2025, the company had cash and cash equivalents of **$19.5 million**, short-term investments of **$49.2 million**, and marketable securities of **$2.1 million**[154](index=154&type=chunk) - The primary source of liquidity has been cash and short-term investments, including funds from the previous sale of the World Poker Tour[153](index=153&type=chunk) [Corporate Developments](index=28&type=section&id=Corporate%20Developments) Recent corporate developments include the termination of a $6.6 million securities purchase agreement and ongoing Nasdaq non-compliance issues leading to a delisting appeal - On April 25, 2025, the company terminated a Securities Purchase Agreement from October 2024, refunding a **$6.6 million** purchase price to Blue Planet[130](index=130&type=chunk) - The company received deficiency letters from Nasdaq for late filings of its 10-K and 10-Q reports and for not holding an annual meeting within twelve months of its fiscal year-end[131](index=131&type=chunk)[132](index=132&type=chunk)[134](index=134&type=chunk) - Nasdaq has initiated procedures to delist the company's securities, which the company has appealed, with a hearing scheduled for July 31, 2025[134](index=134&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) The company has indicated that this section is not applicable for this reporting period - Not applicable[165](index=165&type=chunk) [Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of March 31, 2025, with no material changes in internal control over financial reporting during the quarter - Based on an evaluation as of March 31, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[166](index=166&type=chunk) - There were no changes in internal control over financial reporting during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[168](index=168&type=chunk) PART II: OTHER INFORMATION This section covers ongoing legal proceedings, significant risk factors related to Nasdaq listing compliance, and other standard disclosures for the reporting period [Legal Proceedings](index=34&type=section&id=ITEM%201.%20Legal%20Proceedings.) The company is engaged in ongoing litigation with stockholder Knighted Pastures, LLC, including a stayed breach of fiduciary duty complaint and a new lawsuit filed by the company - A complaint filed by Knighted Pastures, LLC in November 2024 regarding a transaction with Blue Planet is currently stayed by the court pending the outcome of the company's combined 2024/2025 annual meeting scheduled for August 4, 2025[173](index=173&type=chunk) - On June 11, 2025, the company filed a lawsuit against Knighted Pastures, LLC and others, alleging failure to disclose a coordinated group of stockholders acquiring more than **5%** of the company's stock[174](index=174&type=chunk) - A separate complaint filed in September 2024 by stockholder Timothy G Schuebel regarding the company's Shareholder Rights Plan is also pending[175](index=175&type=chunk) [Risk Factors](index=34&type=section&id=ITEM%201A.%20Risk%20Factors.) The primary risk factor is the company's non-compliance with Nasdaq listing requirements, leading to delisting procedures and potential severe impacts on stock price and liquidity - The company is not in compliance with Nasdaq Listing Rule 5250(c)(1) for late filings and Listing Rule 5620(a) for not holding an annual meeting within twelve months of its fiscal year-end[177](index=177&type=chunk)[181](index=181&type=chunk) - Nasdaq has determined to initiate procedures to delist the company's securities, a decision the company has appealed, with a hearing scheduled for July 31, 2025[181](index=181&type=chunk) - Potential consequences of delisting include limited market quotations, classification as a "penny stock," reduced analyst coverage, and a decreased ability to obtain future financing[182](index=182&type=chunk)[187](index=187&type=chunk) [Other Information (Items 2, 3, 4, 5, 6)](index=36&type=section&id=Other%20Information) This section confirms no unregistered sales of equity securities, no defaults on senior securities, no mine safety disclosures, and no Rule 10b5-1 trading arrangements by directors or officers during the quarter - **Item 2:** No unregistered sales of equity securities or purchases of equity by the issuer were made during the period[182](index=182&type=chunk)[183](index=183&type=chunk) - **Item 3 & 4:** There were no defaults upon senior securities, and mine safety disclosures are not applicable[184](index=184&type=chunk)[185](index=185&type=chunk) - **Item 5:** No director or officer adopted or terminated any Rule 10b5-1 trading arrangements during the quarter[186](index=186&type=chunk)

Revenue Performance - Total revenues increased by approximately $1.4 million, or 18.6%, to $9.1 million for the year ended December 31, 2024, compared to $7.7 million for 2023[175]. - Casual mobile gaming revenue surged to $4.4 million in 2024 from $0.7 million in 2023, reflecting a growth of approximately $3.7 million, or 528.6%[178]. - In-person experience revenue decreased by $0.3 million, or 6.0%, to $4.7 million in 2024 from $5.0 million in 2023[176]. - Multiplatform content revenues dropped by approximately $2.0 million, or 100%, to $0 in 2024 due to the absence of the live streaming event "Elevated" that occurred in 2023[177]. Expenses and Losses - General and administrative expenses rose by approximately $5.8 million, or 76%, to $13.4 million in 2024, primarily due to increased payroll costs and professional fees[184]. - Impairment of goodwill was approximately $9.6 million for 2024, compared to $0 for 2023, indicating a significant decline in the fair value of a reporting unit[186]. - Research and development expenses increased to $866 thousand in 2024 from $163 thousand in 2023, driven by costs related to new casual mobile game development[182]. - For the years ended December 31, 2024 and 2023, the company incurred net losses of approximately $22.6 million and $3.6 million, respectively, with net cash used in operations of approximately $9.8 million and $8.1 million[196][200]. - The increase in net cash used in operating activities from 2023 to 2024 was approximately $1.7 million, primarily due to the increase in net loss[200]. Cash and Investments - Interest income increased by approximately $0.7 million, or 24%, to $3.7 million in 2024, attributed to interest earned on new investments[193]. - Current assets grew to $94.7 million in 2024 from $78.3 million in 2023, while current liabilities increased to $30.5 million from $12.0 million[195]. - As of December 31, 2024, the company had cash and cash equivalents of approximately $59.2 million, with working capital of approximately $64.3 million[196]. - Net cash provided by investing activities for the year ended December 31, 2024 was approximately $23.8 million, significantly higher than $6.1 million in 2023[201][202]. - Net cash provided by financing activities for the year ended December 31, 2024 was approximately $23.9 million, compared to $7.1 million in 2023[203][204]. Capital Management - The company had no material commitments for capital expenditures as of December 31, 2024[206]. - The stock repurchase program authorized by the Board allows for the repurchase of up to $10.0 million of common stock, with $7,305,926 available as of December 31, 2024[207]. - The total number of shares repurchased during the years ended December 31, 2024 and 2023 was 514 and 1,698,038, respectively, at an average price of $1.23 per share[207]. - Cash requirements for current liabilities include approximately $25.8 million for loans payable and $2.5 million for accounts payable and accrued expenses[196]. - The company intends to meet its cash requirements from its current cash and cash equivalents balance[196].

Financial Data and Key Metrics Changes - Total revenues for Q3 2024 were $2.2 million, representing a 93% increase from Q3 2023, primarily driven by higher casual mobile gaming revenues and increased in-person revenues at HyperX and Open Mobile arenas [14] - Total costs and expenses for Q3 2024 were $3.3 million, up from $1.8 million in the prior year, mainly due to investments in Z-Tech and other operational costs [15] - The net loss for Q3 2024 was $4.0 million, compared to a net income of $0.1 million in Q3 2023, impacted by a $3 million loss on a settlement and a $1.2 million net unrealized loss on foreign currency transactions [16] - Adjusted EBITDA loss improved to $0.1 million from a loss of $0.3 million in Q3 2023 [17] - Cash and short-term investments totaled $80.2 million as of September 30, 2024, compared to $78.6 million at the end of 2023 [18] Business Line Data and Key Metrics Changes - The HyperX Arena hosted 61 event days in Q3 2024, with 34 being third-party events, indicating strong demand for the venue [6] - The Omen Mobile arena had its busiest quarter since 2023, hosting significant events and tournaments, showcasing its versatility beyond e-sports [8] - The launch of two new casual mobile games was part of the strategy to expand the gaming portfolio, focusing on card and Mahjong games with strong user retention [11] Market Data and Key Metrics Changes - The World Mahjong Tour (WMT) is set to kick off with two satellite events in Los Angeles and Beijing, aiming to attract significant interest leading up to the finale in Las Vegas [9] - The company is co-hosting the RhythmX Music Festival in Macau in partnership with the Strawberry Music Festival, aiming to establish it as a landmark event [10] Company Strategy and Development Direction - The company is focused on capitalizing on significant assets and gearing up for the World Mahjong Tour, launching new mobile game titles, and increasing demand at its arenas [20] - The strategic investment from Yellow River Global Capital is expected to provide valuable resources and expertise to accelerate growth initiatives [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about substantial progress impacting both top and bottom lines, driven by upcoming events and strategic initiatives [20] Other Important Information - The company recorded a $5 million redistribution of escrow funds related to a settlement agreement, affecting cash and working capital positions [19] Q&A Session Summary - The Q&A session concluded without any recorded questions or answers, indicating a wrap-up of the conference call [22]

Revenue Performance - Total revenues for the three months ended September 30, 2024, increased to approximately $2.16 million, a rise of 93% from $1.12 million in the same period of 2023[125] - In-person experience revenues rose by approximately $0.2 million, or 20%, to approximately $1.35 million for the three months ended September 30, 2024, compared to $1.12 million for the same period in 2023[126] - Casual mobile gaming revenue was $0.8 million for the three months ended September 30, 2024, attributed to the business combination with ZTech on October 31, 2023[127] - Total revenues increased by approximately $1.6 million, or 29%, to $7.2 million for the nine months ended September 30, 2024, compared to $5.6 million for the same period in 2023[139] - Casual mobile gaming revenue was $3.7 million for the nine months ended September 30, 2024, compared to $0.0 million for the same period in 2023, driven by the business combination with ZTech[142] Expenses and Losses - Total costs and expenses increased to $3.34 million for the three months ended September 30, 2024, up from $1.76 million in the same period of 2023, representing a 90% increase[125] - Loss from operations for the three months ended September 30, 2024, was $1.18 million, compared to a loss of $0.64 million in the same period of 2023[125] - Research and development expenses were $158,000 for the three months ended September 30, 2024, reflecting the costs related to the development of new casual mobile games for ZTech[130] - General and administrative expenses increased by approximately $0.4 million, or 47%, to approximately $1.3 million for the three months ended September 30, 2024, primarily due to increased payroll costs[133] - Net loss attributable to common stockholders was approximately $9.5 million for the nine months ended September 30, 2024, compared to a net loss of $2.5 million for the same period in 2023[139] Cash Flow and Financing - Cash and cash equivalents were approximately $10.9 million as of September 30, 2024, not including approximately $66.7 million of short-term investments[155] - Net cash used in operating activities increased to approximately $13.2 million for the nine months ended September 30, 2024, from $4.6 million for the same period in 2023[158] - Net cash provided by financing activities for the nine months ended September 30, 2024 was approximately $28 million, a significant increase from the net cash used of approximately $2.1 million during the same period in 2023[162] - The net cash provided in 2024 included proceeds from short-term loans of approximately $28 million and $2 million from the issuance of common stock, offset by a $2 million return of proceeds upon cancellation of previously issued common stock[162] Accounting and Estimates - The company prepares its financial statements in accordance with U.S. generally accepted accounting principles, requiring management to make estimates affecting reported amounts of assets and liabilities[164] - Critical accounting estimates include assumptions about highly uncertain matters, with goodwill impairment being a significant area of focus[165] Other Financial Information - The Company entered into a Securities Purchase Agreement with Blue Planet, agreeing to sell 6,000,000 shares at $1.10 per share for a total of $6.6 million[121] - The Company reported a net loss attributable to common stockholders of $4.03 million for the three months ended September 30, 2024[125] - The Company expects operating expenses to increase as it expands marketing efforts and operations in new vertical markets[115] - General and administrative expenses increased by approximately $3.7 million, or 66%, to $9.4 million for the nine months ended September 30, 2024, from $5.7 million for the same period in 2023[148] - Interest income, net, increased to approximately $2.9 million for the nine months ended September 30, 2024, from approximately $2.2 million for the same period in 2023[152] - Loss on foreign currency transactions was approximately $0.8 million for the nine months ended September 30, 2024, compared to $0.0 million for the same period in 2023[151] - Total current assets increased to approximately $102.8 million as of September 30, 2024, compared to $78.3 million as of December 31, 2023[154] - The company recognized a loss of $3.0 million related to an escrow settlement with Brookfield Property Partners during the nine months ended September 30, 2024[135] - The company does not engage in any off-balance sheet financing activities or have interests in variable interest entities[163]

Financial Performance - Total revenues for Q3 2024 reached $2.2 million, a 93% increase from $1.1 million in Q3 2023[3] - Total revenues for Q3 2024 reached $2,163,541, a 93.2% increase from $1,119,959 in Q3 2023[20] - Net loss for Q3 2024 was $4.0 million, compared to net income of $0.1 million in the prior year, largely due to a $3.0 million settlement and $1.2 million in unrealized foreign currency losses[5] - Net loss attributable to common stockholders for Q3 2024 was $(4,027,941), compared to a profit of $75,246 in Q3 2023[20] - Net loss for the three months ended September 30, 2024, was $(4,028,622), compared to a net income of $75,246 for the same period in 2023[23] - The company reported a pre-tax net loss of $(4,361,484) for Q3 2024, compared to a profit of $75,246 in Q3 2023[20] - The company reported a total loss of $(9,741,024) for the nine months ended September 30, 2024, compared to $(2,585,005) in 2023[23] Revenue Streams - In-person event revenues at HyperX Arena increased by $0.2 million, while casual mobile gaming revenues rose by $0.8 million due to strategic investment in Z-Tech[3] - Casual mobile gaming revenue was $817,986 in Q3 2024, compared to $0 in Q3 2023, indicating a new revenue stream[20] Costs and Expenses - Total costs and expenses for Q3 2024 were $3.3 million, up from $1.8 million in the prior year, primarily driven by the investment in Z-Tech[4] - Total costs and expenses for Q3 2024 were $3,344,114, up from $1,760,218 in Q3 2023, indicating rising operational costs[20] - Research and development expenses for Q3 2024 were $158,162, compared to $0 in Q3 2023, highlighting increased investment in innovation[20] - Stock compensation expenses increased to $229,731 for the three months ended September 30, 2024, compared to $64,623 in 2023[23] - Depreciation and amortization expenses rose to $401,452 for the three months ended September 30, 2024, from $239,413 in 2023[23] Cash and Assets - As of September 30, 2024, the company had cash and short-term investments of $80.2 million, up from $78.6 million at the end of 2023[7] - Total current assets increased to $102,805,701 as of September 30, 2024, up from $78,341,061 at December 31, 2023, representing a 31.4% growth[19] - Cash and cash equivalents decreased to $10,992,235 as of September 30, 2024, down from $16,320,583 at December 31, 2023[19] - Total assets increased to $129,827,256 as of September 30, 2024, compared to $112,016,687 at December 31, 2023, reflecting overall growth[19] Strategic Initiatives - A strategic investment was announced with Yellow River Global Capital to enhance growth opportunities in location-based entertainment and content acquisition[9] - Future growth opportunities are being actively pursued in collaboration with Yellow River, focusing on digital technologies and entertainment content[9] - The company is preparing for the inaugural World Mahjong Tour events starting next month and developing new mobile game titles[2] Losses and Legal Fees - Non-recurring legal fees amounted to $102,854 for the three months ended September 30, 2024[24] - Loss on foreign currency for the three months ended September 30, 2024, was $1,213,446[24] - The company incurred a loss of $3,000,000 related to the settlement of the Brookfield agreement during the nine months ended September 30, 2024[23] EBITDA - Adjusted EBITDA loss was $0.1 million for Q3 2024, an improvement from a loss of $1.4 million in the prior quarter and a loss of $0.3 million in Q3 2023[6] - Adjusted EBITDA for the nine months ended September 30, 2024, was $(4,566,183), a decline from $(3,583,677) in 2023[23] - EBITDA for the three months ended September 30, 2024, was $(4,660,532), significantly worse than $(401,234) in the same period of 2023[23] - Interest income, net, for the three months ended September 30, 2024, was $(1,033,362), compared to $(715,893) in 2023[23]

Financial Data and Key Metrics - Total revenues for Q2 2024 were $2.6 million, up 11% from Q1 2024 but down 19% from Q2 2023 [10] - The year-over-year revenue decline was primarily due to a $2 million decrease in branded content production revenues, partially offset by a $1.7 million increase in casual mobile gaming revenues from Z-Tech [10] - Total costs and expenses for Q2 2024 were $7.9 million, up from $4.7 million in Q2 2023, with $3 million of the increase attributed to litigation costs related to Knighted Pastures' hostile takeover attempt [10] - Net loss for Q2 2024 was $3.9 million, compared to a loss of $1.8 million in Q1 2024 and $0.7 million in Q2 2023 [11] - Adjusted EBITDA loss for Q2 2024 was $1.4 million, compared to a loss of $1.7 million in Q1 2024 and $1.1 million in Q2 2023 [11] - Cash and short-term investments totaled $95.2 million as of June 30, 2024, up from $78.6 million at December 31, 2023, primarily due to low and non-interest-bearing loans from Morgan Stanley Bank Asia Limited [12] - Working capital surplus was $61.8 million as of June 30, 2024, compared to $66.4 million at December 31, 2023 [12] Business Line Performance - HyperX Arena hosted 65 event dates in Q2 2024, including 40 third-party events, with notable events such as the WPT Seminole Hard Rock Poker Showdown and the Mobile Legends Bang Bang 2024 North America Challenger Tournament Spring Grand Finale [6] - Z-Tech, the casual mobile gaming subsidiary, saw a 53% increase in Q2 in-game ad revenue compared to Q1 2024, driven by the release of the new game Balloon Pop Mania [8] - The company announced the launch of the World Mahjong Tour (WMT), modeled after the World Poker Tour, with regional tournaments leading to a final event at HyperX Arena in spring 2025 [7] Market and Strategic Initiatives - The World Mahjong Tour (WMT) is expected to leverage the company's expertise in mobile games, content production, and membership services, aiming to capitalize on the resurging popularity of mahjong, particularly among younger generations [7] - Allied Experiential Entertainment (AEE) is in negotiations to partner with a popular annual music festival in Macau, expanding its opportunities in Asia [7] - Z-Tech's momentum in casual mobile gaming is expected to drive sustained revenue growth in the second half of 2024 [8] Management Commentary - The CEO expressed optimism about the company's upward trajectory, particularly with the launch of the World Mahjong Tour and the strong performance of Z-Tech [5][13] - The CFO highlighted the impact of litigation costs on expenses but noted the company's strong cash position and working capital surplus [10][12] Other Important Information - The company emphasized its focus on non-GAAP financial measures, with reconciliations and explanations provided in the earnings release [4] - The CEO reiterated confidence in the management team's ability to lead the company forward, with all three subsidiaries expected to capitalize on revenue opportunities in the near future [13] Q&A Session - No questions or answers were provided in the transcript [14]