Gamer Pakistan (NASDAQ:GPAK) stock is down on Friday after the esports company announced its shares will be delisted from the Nasdaq Exchange. A news release from Gamer Pakistan notes that its request to remain listed on the exchange has been denied by the Nasdaq Hearings Panel. This is due to it not being compliant with the $1 minimum bid price required to remain on the exchange. Gamer Pakistan CEO James Knopf said the following about the news. "While we are disappointed in the Nasdaq delisting, this does ...

Acquisition and Ownership - The company acquired 90% ownership of K2 Gamer in November 2022, with SECP approval granted in July 2023, establishing it as the operating subsidiary in Pakistan [180]. - The company acquired 90% of K2 Gamer for 900,000 PKR (approximately $3,500), with the acquisition approved in July 2023 [232]. Esports Market Growth - The esports audience in Asia grew by 13% in 2021, reaching nearly 700 million fans, with the industry generating $634.3 million in revenue, a 16.6% increase from the previous year [185]. - Sponsorship revenues accounted for nearly 60% of all esports revenues in 2022, with other sources including media rights, publisher fees, merchandise, and ticket sales [187]. - The mobile gaming segment is projected to grow at an annual rate of 6.54% from 2023 to 2027, reaching $221.7 billion globally, with Pakistan's mobile gaming revenue expected to grow to $40.27 million in 2023 [189]. Revenue Generation Plans - The company plans to generate revenue from registration fees, admission fees, sponsorships, advertising, and merchandise sales, including event-specific items [193]. - The company has organized over 30 esports championships, including the inaugural National Esports Free Fire Championship in December 2022 [181]. Competitive Landscape - The esports market in Pakistan is fragmented and competitive, with the company focusing on university esports, a segment that is just beginning to be commercialized [222]. Operational Considerations - The company has no current plans for research and development, relying on third-party technology for its operations [198][225]. - The company expects to face political and economic uncertainty in Pakistan following the National Assembly election in February 2024, prompting a review of its business direction [194]. - The company is subject to various laws and regulations in Pakistan, including those related to sales, use, and value-added taxes, but currently faces no specific regulations governing esports tournaments [200][202]. Financial Arrangements - Face Rebel, LLC provides consulting services for $16,000 per month, focusing on marketing and IP registration support [234]. - Richard Whelan loaned a total of $85,750 to the company, which was repaid in Q4 2023, alongside $15,000 paid for consulting services [235]. - K2 Gamer's office rent is $6,000 per year, paid for ten years, indicating stable operational costs [238]. Company Classification - The company is classified as a smaller reporting company and an emerging growth company, indicating potential for future growth [154].

Financial Performance - The company has not generated any revenue to date, and anticipates organizing approximately 12 or more esports tournaments in 2023 to begin generating revenue [64][65]. - The net loss for the three months ended September 30, 2023, was $(171,066), representing a 17% increase compared to a net loss of $(145,763) for the same period in 2022 [70]. - General and administrative expenses for the three months ended September 30, 2023, were approximately $166,000, an increase of 14% compared to $146,000 for the same period in 2022 [71]. - For the nine months ended September 30, 2023, general and administrative expenses were approximately $297,000, a significant increase of 104% compared to $146,000 for the same period in 2022 [72][70]. - Net cash used in operating activities increased by approximately $162,000 for the nine months ended September 30, 2023, compared to the same period in 2022 [80]. IPO and Funding - The company raised gross proceeds of approximately $6,800,000 through its initial public offering (IPO) in October 2023, with net proceeds of approximately $5,435,000 after deducting underwriting discounts and commissions [66]. - The company intends to use the net proceeds from the IPO for operating expenses, marketing, event expenses, technology development, and potential acquisitions [76]. - The company has financed its operations primarily through the issuance of common stock, with no cash investing activities reported for the nine months ended September 30, 2023 [81][82]. Cash Position - The company had cash and cash equivalents of approximately $72,000 as of September 30, 2023, down from $90,000 as of December 31, 2022 [74]. Future Plans - The company plans to expand its esports offerings and potentially consider live sports in the future, focusing initially on opportunities in Pakistan [63].