Allied Gaming & Entertainment Inc.
For the period ended Sep 30, 2024. Filed Nov 14, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 14, 2024
AIFA$3.97-0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-19.
0001213900-24-070775
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-14.
0001213900-24-098566
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 77 previous paragraphs and 79 current paragraphs.
34 unchanged; 32 reworded; 13 added; 8 removed; 3 previous and 0 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
Brookfield Settlement
Current report
On September 16, 2024, the Company and Brookfield entered into a Settlement Agreement and Release (the “Settlement Agreement”) to resolve and terminate all obligations under the Brookfield Agreement. Pursuant to the Settlement Agreement, the entire Purchase Price was released from escrow of which $3,000,000 was paid to Brookfield and $2,000,000 was paid to the Company. The parties further agreed to release and discharge each other from any and all present and future obligations under the Brookfield Agreement.
Current report
Blue Planet New Energy Technology Limited Securities Purchase Agreement
Current report
On October 18, 2024, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Blue Planet New Energy Technology Limited (“Blue Planet”), pursuant to which the Company agreed to sell and issue and Blue Planet agreed to purchase (i) 6,000,000 shares of Common Stock of the Company at a purchase price of $1.10 per share (the “Purchased Shares”) for a total purchase price of $6,600,000 and (ii) a corresponding warrant (the “Warrant”) to purchase up to 6,000,000 shares of Common Stock, with an exercise price of $1.80 per share, which represents a 50% premium to the closing sales price of the Common Stock on October 17, 2024, issuable upon exercise of the Warrant (the “Warrant Shares” and together with the Purchased Shares and the Warrant, the “Registrable Securities”) (such transaction, the “Transaction”). The Warrant expires five years from the date of issuance. The Purchase Agreement is subject to customary representations, warranties, covenants and conditions. In addition, Blue Planet is subject to a 6-month lock-up period commencing from the date of closing.
Current report
The Purchase Agreement does not contain any voting commitment, and Blue Planet may vote its shares of Common Stock in its discretion for any matter requiring a vote of the Company’s stockholders. The Warrant may not be exercised if Blue Planet, together with its affiliates, would beneficially own more than 19.99% of the number of shares of the Common Stock outstanding immediately after giving effect to such exercise, unless the Company obtains shareholder approval pursuant to applicable NASDAQ rules. Finally, the Company agreed to register the resale of Registrable Securities pursuant to a registration statement to be filed under the Securities Act of 1933, as amended.
Current report
Loss on escrow settlement
Current report
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 8 – Commitments and Contingencies – Investment Agreement). The entire escrow account of $5.0 million was included in restricted cash on the condensed consolidated balance sheets since that date.
Current report
Loss on foreign currency transactions
Current report
Depreciation and amortization increased by approximately $152 thousand, or 15%, to approximately $1.2 million for the nine months ended September 30, 2024, from approximately $1.0 million for the nine months ended September 30, 2023. The increase was primarily due to the depreciation and amortization of fixed assets and intangibles that were part of the business combination in the fourth quarter of 2023.
Current report
Loss on escrow settlement
Current report
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 8 – Commitments and Contingencies – Investment Agreement). The entire escrow account of $5.0 million was included in restricted cash on the condensed consolidated balance sheets since that date.
Current report
Loss on foreign currency transactions
Current report
Interest income, net, was approximately $2.9 million for the nine months ended September 30, 2024 compared to approximately $2.2 million for the nine months ended September 30, 2023. The increase is a result of the interest earned on certificates of deposit purchased during the fourth quarter of 2023, loans receivable issued in 2024, and equity linked and Fx notes purchased in 2024. This was slightly offset by interest expense of $0.04 million on loans borrowed during the fourth quarter of 2023 and the nine month period ended September 30, 2024.
Removed paragraphs (8)
Previous report
Gain realized on foreign currency transaction
Previous report
Depreciation and amortization decreased by approximately $11 thousand, or 1%, to approximately $0.8 million for the six months ended June 30, 2024, from approximately $0.8 million for the six months ended June 30, 2023. The decrease was primarily due to the disposal of office equipment and production equipment in 2023 related to the winding up of the Germany business, in addition to assets that became fully depreciated in 2023.
Previous report
Gain realized on foreign currency transaction
Previous report
On December 13, 2023, AME-HK borrowed 1.3 billion Yen or approximately $9.0 million (USD) under a $10 million credit facility provided by Morgan Stanley Bank Asia Limited (the “Bank”) in connection with the Company’s $40 million investment in 12-month certificates of deposit with the Bank. The credit facility includes term loans, bank overdrafts, margin loans and certain other borrowings. The 12-month term loan is non-interest bearing.
Previous report
On March 8, 2024, the credit facility was increased to $20 million under which, on March 15, 2024, AME-HK borrowed an additional 948.2 million Yen or approximately $6.5 million (USD). This 12-month term loan bears interest at a fixed rate of 0.3% per annum, payable at maturity on March 17, 2025.
Previous report
On May 14, 2024, AME-HK borrowed an additional 837.4 million Yen or approximately $5.4 million (USD). This 12-month term loan bears interest at a fixed rate of 0.65% per annum, payable at maturity on May 14, 2025.
Previous report
On June 28, 2024, the credit facility was increased to $35 million under which, on June 28, 2024, AME-HK borrowed an additional 1.6 billion Yen or approximately $10.0 million (USD). This 12-month term loan bears interest at a fixed rate of 0.45% per annum, payable at maturity on June 30, 2025.
Previous report
The proceeds of these loans were used to acquire the equity and FX linked notes discussed in Note 4 – Short Term Investments.
Reworded paragraphs (32)
Previous wording
The following discussion and analysis of the results of operations and financial condition of Allied Gaming & Entertainment Inc. (the “Company”) as of June 30, 2024 and for the three and six months ended June 30, 2024 and 2023 should be read in conjunction with our financial statements and the notes to those financial statements that are included elsewhere in this Quarterly Report on Form 10-Q. This discussion and analysis should be read in conjunction with the Company’s audited financial statements and related disclosures as of December 31, 2023, which are included in the Form 10-K (the “Annual Report”) filed with the Securities and Exchange Commission (“SEC”) on March 28, 2024, as amended on Form 10-K/A which was filed on April 29, 2024. References in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to “us”, “we”, “our” and similar terms refer to the Company and its subsidiaries. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains statements that are forward-looking. These statements are based on current expectations and assumptions that are subject to risk, uncertainties and other factors. These statements are often identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” or “continue,” and similar expressions or variations. Actual results could differ materially because of the factors discussed in “Risk Factors” in our Annual Report, and other factors that we may not know. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements above, to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q.
Current wording
The following discussion and analysis of the results of operations and financial condition of Allied Gaming & Entertainment Inc. (the “Company”) as of September 30, 2024 and for the three and nine months ended September 30, 2024 and 2023 should be read in conjunction with our financial statements and the notes to those financial statements that are included elsewhere in this Quarterly Report on Form 10-Q. This discussion and analysis should be read in conjunction with the Company’s audited financial statements and related disclosures as of December 31, 2023, which are included in the Form 10-K (the “Annual Report”) filed with the Securities and Exchange Commission (“SEC”) on March 28, 2024, as amended on Form 10-K/A which was filed on April 29, 2024. References in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to “us”, “we”, “our” and similar terms refer to the Company and its subsidiaries. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains statements that are forward-looking. These statements are based on current expectations and assumptions that are subject to risk, uncertainties and other factors. These statements are often identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” or “continue,” and similar expressions or variations. Actual results could differ materially because of the factors discussed in “Risk Factors” in our Annual Report, and other factors that we may not know. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements above, to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q.
Previous wording
Our operations consist of our esports gaming operations, casual mobile games and live entertainment events organizing. Our esports gaming operations take place at global competitive esports properties designed to connect players and fans via a network of connected arenas. Through our subsidiaries, we offer esports fans state-of-the-art facilities to compete against other players in esports competitions, host live events with esports superstars that potentially stream to millions of viewers worldwide, and produce and distribute esports content at our on-site production facilities and studios. At our flagship arena in Las Vegas, Nevada, we provide an attractive facility for hosting a diverse range of events, including corporate events, tournaments, game launches, and brand activation. Furthermore, 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.
Current wording
Our operations consist of our esports gaming operations, casual mobile games and live entertainment events organizing. Through our subsidiaries, we offer esports fans state-of-the-art facilities to compete against other players in esports competitions, host live events with esports superstars that potentially stream to millions of viewers worldwide and produce and distribute esports content at our on-site production facilities and studios. At our flagship arena in Las Vegas, Nevada, we provide an attractive facility for hosting a diverse range of events, including corporate events, tournaments, game launches, and brand activation. Furthermore, 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.
Previous wording
In-person experience revenues decreased by approximately $0.3 million, or 12%, to approximately $2.2 million for the six months ended June 30, 2024 from approximately $2.5 million for the six months ended June 30, 2023. The decrease of in-person experience revenues was driven by a $0.3 million decrease in arena and truck event revenue for the six months ended June 30, 2024 resulting from fewer events held during the period.
Current wording
In-person experience revenues increased by approximately $0.2 million, or 20%, to approximately $1.3 million for the three months ended September 30, 2024 from approximately $1.1 million for the three months ended September 30, 2023. The increase of in-person experience revenues was driven by a $0.2 million increase in arena and truck event revenue for the three months ended September 30, 2024 resulting from an increase in revenue earned per event held during the period.
Previous wording
Casual mobile gaming revenue was $1.7 million for the three months ended June 30, 2024 and $0.0 million for the three months ended June 30, 2023, respectively. The increase in casual mobile games revenue was due to the casual mobile gaming revenue earned as the result of the business combination with ZTech on October 31, 2023.
Current wording
Casual mobile gaming revenue was $0.8 million for the three months ended September 30, 2024 and $0.0 million for the three months ended September 30, 2023, respectively. The increase in casual mobile games revenue was due to the casual mobile gaming revenue recognized in the current year as a result of the business combination with ZTech on October 31, 2023.
Previous wording
In-person costs (exclusive of depreciation and amortization) decreased by approximately $0.2 million, or 14%, to approximately $1.1 million for the six months ended June 30, 2024 from approximately $1.3 million for the six months ended June 30, 2023. The decrease is the result of the decrease in costs associated with the arena and truck events for the six months ended June 30, 2024 resulting from fewer events held during the period.
Current wording
In-person costs (exclusive of depreciation and amortization) increased by approximately $0.1 million, or 19%, to approximately $0.7 million for the three months ended September 30, 2024 from approximately $0.6 million for the three months ended September 30, 2023. The increase is the result of the increase in costs associated with the arena and truck events for the three months ended September 30, 2024 resulting from an increase in costs per event held during the period.
Previous wording
Casual mobile gaming costs (exclusive of depreciation and amortization) were $1.6 million for the three months ended June 30, 2024 and $0 for the three months ended June 30, 2023, respectively. The recognition of casual gaming costs and expenses began in connection with the business combination with ZTech on October 31, 2023.
Current wording
Casual mobile gaming costs (exclusive of depreciation and amortization) were $0.7 million for the three months ended September 30, 2024 and $0.0 million for the three months ended September 30, 2023, respectively. The recognition of casual gaming costs and expenses began in connection with the business combination with ZTech on October 31, 2023.
Previous wording
Research and development expenses were $174 thousand and $0 for the three months ended June 30, 2024 and 2023, respectively. Research and development expenses consist principally of costs related to the development of new casual mobile games for ZTech.
Current wording
Research and development expenses were $158 thousand and $0 for the three months ended September 30, 2024 and 2023, respectively. Research and development expenses consist principally of costs related to the development of new casual mobile games for ZTech.
Previous wording
Selling and marketing expenses decreased by approximately $13 thousand, or 19%, to approximately $54 thousand for the three months ended June 30, 2024 from approximately $67 thousand for the three months ended June 30, 2023.
Current wording
Selling and marketing expenses increased by approximately $40 thousand, or 78%, to approximately $91 thousand for the three months ended September 30, 2024 from approximately $52 thousand for the three months ended September 30, 2023.
Previous wording
General and administrative expenses increased by approximately $3.3 million, or 70%, to approximately $8.1 million for the six months ended June 30, 2024, from approximately $4.8 million for the six months ended June 30, 2023. The increase in general and administrative expenses resulted primarily from a $3.1 million increase in legal and professional fees related to a shareholder complaint filed in 2024, a $0.3 million increase in other legal and professional fees, and a $0.6 million increase in stock-based compensation related to restricted share awards granted on February 22, 2024. These increases were slightly offset by a $0.4 million decrease in payroll and payroll related costs in 2024 due to a decrease in headcount, in addition to a $0.3 million decrease in insurance costs related to D&O insurance that was renewed at a lower cost in August 2023.
Current wording
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, from approximately $0.9 million for the three months ended September 30, 2023. The increase in general and administrative expenses is primarily attributable to an increase in payroll and payroll related costs resulting from a $1.5 million Employee Retention Credit (“ERC”) received and recorded as a reduction of expense during the three months ended September 30, 2023, a $0.2 million increase in payroll due to the hiring of our new president during the second quarter of 2024, and a $0.2 million increase in stock-based compensation related to restricted share awards granted on February 22, 2024. These increases were slightly offset by a) a $1.3 million decrease in legal and professional fees resulting from (i) an insurance reimbursement of second quarter 2024 defense costs incurred in connection with a shareholder complaint filed in March 2024, and (ii) costs related to various merger and acquisition activities during the third quarter of 2023, and b) 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.
Previous wording
Depreciation and amortization increased by approximately $0.2 million, or 91%, to approximately $0.4 million for the three months ended June 30, 2024, from approximately $0.2 million for the three months ended June 30, 2023. The increase was primarily due to the amortization of intangibles that were recorded as part of the business combination with ZTech on October 31, 2023.
Current wording
Depreciation and amortization increased by approximately $0.2 million, or 68% to approximately $0.4 million for the three months ended September 30, 2024, from approximately $0.2 million for the three months ended September 30, 2023. The increase was primarily due to the amortization of intangibles that were recorded as part of the business combination with ZTech on October 31, 2023.
Previous wording
We recognized other income, net, of approximately $14 thousand during the three months ended June 30, 2024 compared to $11 thousand of other expense recorded for the three months ended June 30, 2023.
Current wording
We recognized other expense, net, of approximately $1 thousand during the three months ended September 30, 2024 compared to $0 thousand of other expense recorded for the three months ended September 30, 2023.
Previous wording
The gain realized on foreign currency transaction was approximately $0.4 million for the three months ended June 30, 2024 compared to $0.0 for the three months ended June 30, 2023. The increase is a result of the change in the exchange rate of the Yen to United States Dollar for the loan received from Morgan Stanley Bank Asia Limited.
Current wording
The loss on foreign currency transactions was approximately $1.2 million for the three months ended September 30, 2024 compared to $0.0 million for the three months ended September 30, 2023. 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 were purchased and September 30, 2024.
Previous wording
Interest income, net, was approximately $1.0 million for the three months ended June 30, 2024 compared to approximately $0.7 million of interest income for the three months ended June 30, 2023. The increase is a result of the interest earned on a short-term investment purchased during the fourth quarter of 2023.
Current wording
Interest income, net, was approximately $1.0 million for the three months ended September 30, 2024 compared to approximately $0.7 million of interest income for the three months ended September 30, 2023. The increase is a result of the interest earned on certificates of deposit purchased during the fourth quarter of 2023, in addition to equity linked notes purchased in the third quarter of 2024.
Previous wording
Results of Operations for the Six Months Ended June 30, 2024 and 2023
Current wording
Results of Operations for the Nine Months Ended September 30, 2024 and 2023
Previous wording
In-person experience revenues decreased by approximately $0.4 million, or 28%, to approximately $0.9 million for the three months ended June 30, 2024 from approximately $1.3 million for the three months ended June 30, 2023. The decrease of in-person experience revenues was driven by a $0.4 million decrease in arena and truck event revenue for the three months ended June 30, 2024 resulting from fewer events held during the period.
Current wording
In-person experience revenues decreased by approximately $0.1 million, or 2%, to approximately $3.5 million for the nine months ended September 30, 2024 from approximately $3.6 million for the nine months ended September 30, 2023. The decrease of in-person experience revenues was driven by a $0.1 million decrease in truck event revenue for the nine months ended September 30, 2024 resulting from fewer events held during the period.
Previous wording
Multiplatform content revenue was $0.0 for the three months ended June 30, 2024 and $2.0 million for the three months ended June 30, 2023. The decrease was due to Season 2 of Elevated, a live streaming event, that occurred during the three months ended June 30, 2023 and did not occur in 2024.
Current wording
Multiplatform content revenue was $0.0 million for the nine months ended September 30, 2024 and $2.0 million for the nine months ended September 30, 2023. The decrease was due to Season 2 of Elevated, a live streaming event, that occurred during the nine months ended September 30, 2023 and did not occur in 2024.
Previous wording
Casual mobile gaming revenue was $2.9 million for the six months ended June 30, 2024 and $0.0 million for the six months ended June 30, 2023, respectively. The increase in casual mobile games revenue was due to the casual mobile gaming revenue earned as the result of the business combination with ZTech on October 31, 2023.
Current wording
Casual mobile gaming revenue was $3.7 million for the nine months ended September 30, 2024 and $0.0 million for the nine months ended September 30, 2023, respectively. The increase in casual mobile games revenue was due to the casual mobile gaming revenue recognized in the current year as a result of the business combination with ZTech on October 31, 2023.
Previous wording
In-person costs (exclusive of depreciation and amortization) decreased by approximately $0.1 million, or 22%, to approximately $0.5 million for the three months ended June 30, 2024 from approximately $0.6 million for the three months ended June 30, 2023. The decrease is the result of the decrease in costs associated with the arena and truck events for the three months ended June 30, 2024 resulting from fewer events held during the period.
Current wording
In-person costs (exclusive of depreciation and amortization) decreased by approximately $0.1 million, or 4%, to approximately $1.8 million for the nine months ended September 30, 2024 from approximately $1.9 million for the nine months ended September 30, 2023. The decrease is the result of the decrease in costs associated with the truck events for the nine months ended September 30, 2024 resulting from fewer events held during the period.
Previous wording
Multiplatform costs (exclusive of depreciation and amortization) decreased by approximately $1.5 million to $0.0 for the three months ended June 30, 2024 from approximately $1.5 million for the three months ended June 30, 2023. The decrease in multiplatform costs corresponds to the decrease in revenue as discussed above.
Current wording
Multiplatform costs (exclusive of depreciation and amortization) decreased by approximately $1.5 million to $0.0 million for the nine months ended September 30, 2024 from approximately $1.5 million for the nine months ended September 30, 2023. The decrease in multiplatform costs corresponds to the decrease in revenues, as discussed above.
Previous wording
Casual mobile gaming costs (exclusive of depreciation and amortization) were $2.5 million for the six months ended June 30, 2024 and $0.0 million for the six months ended June 30, 2023, respectively. The recognition of casual gaming costs and expenses began in connection with the business combination with ZTech on October 31, 2023.
Current wording
Casual mobile gaming costs (exclusive of depreciation and amortization) were $3.2 million for the nine months ended September 30, 2024 and $0.0 million for the nine months ended September 30, 2023, respectively. The recognition of casual mobile gaming costs and expenses began in connection with the business combination with ZTech on October 31, 2023.
Previous wording
Research and development expenses were $369 thousand and $0 for the six months ended June 30, 2024 and 2023, respectively. Research and development expenses consist principally of costs related to the development of new casual mobile games for ZTech.
Current wording
Research and development expenses were $527 thousand and $0.0 million for the nine months ended September 30, 2024 and 2023, respectively. Research and development expenses consist principally of costs related to the development of new casual mobile games for ZTech.
Previous wording
Selling and marketing expenses decreased by approximately $14 thousand, or 11%, to approximately $108 thousand for the six months ended June 30, 2024 from approximately $122 thousand for the six months ended June 30, 2023.
Current wording
Selling and marketing expenses increased by approximately $25 thousand, or 14%, to approximately $198 thousand for the nine months ended September 30, 2024 from approximately $173 thousand for the nine months ended September 30, 2023.
Previous wording
General and administrative expenses increased by approximately $3.0 million, or 136%, to approximately $5.2 million for the three months ended June 30, 2024, from approximately $2.2 million for the three months ended June 30, 2023. The increase in general and administrative expenses resulted primarily from a $3.0 million increase in legal and professional fees related to a shareholder complaint filed in 2024, a $0.2 million increase in other legal and professional fees, and a $0.1 million increase in stock-based compensation related to restricted share awards granted on February 22, 2024. These increases were slightly offset by a $0.1 million decrease in payroll and payroll related costs in 2024 due to a decrease in headcount, in addition to a $0.2 million decrease in insurance costs related to D&O insurance that was renewed at a lower cost in August 2023.
Current wording
General and administrative expenses increased by approximately $3.7 million, or 66%, to approximately $9.4 million for the nine months ended September 30, 2024, from approximately $5.7 million for the nine months ended September 30, 2023. The increase in general and administrative expenses resulted primarily from a $2.1 million increase in legal and professional fees related to a shareholder complaint filed in 2024, a $1.3 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 nine months ended September 30, 2023, and a $0.8 million increase in stock-based compensation related to restricted share awards granted on February 22, 2024. These increases were slightly offset by a $0.2 million decrease in payroll and payroll related costs in 2024 due to a decrease in headcount, in addition to a $0.3 million decrease in insurance costs related to a D&O insurance policy that was renewed at a lower cost in August 2023.
Previous wording
We recognized other income, net, of approximately $1 thousand during the six months ended June 30, 2024 compared to $16 thousand of other income recorded for the six months ended June 30, 2023.
Current wording
We recognized $0 thousand in other expense, net, during the nine months ended September 30, 2024 compared to $16 thousand of other income recorded for the nine months ended September 30, 2023.
Previous wording
The gain realized on foreign currency transaction was approximately $0.4 million for the three months ended June 30, 2024 compared to $0.0 for the three months ended June 30, 2023. The increase is a result of the change in the exchange rate of the Yen to United States Dollar for the loan received from Morgan Stanley Bank Asia Limited.
Current wording
The 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 nine months ended September 30, 2023. 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 were purchased and September 30, 2024.
Previous wording
As of June 30, 2024, we had cash and cash equivalents of approximately $33.3 million (not including approximately $54.8 million of short-term investments and $5.0 million of restricted cash) and working capital of approximately $61.8 million. For the six months ended June 30, 2024 and 2023, we incurred a net loss of approximately $5.7 million and $2.6 million, respectively, and used cash in operations of approximately $4.5 million and $3.0 million, respectively.
Current wording
As of September 30, 2024, we had cash and cash equivalents of approximately $10.9 million (not including approximately $66.7 million of short-term investments) and working capital of approximately $62.8 million. For the nine months ended September 30, 2024 and 2023, we incurred a net loss of approximately $9.7 million and $2.5 million, respectively, and used cash in operations of approximately $13.2 million and $4.6 million, respectively.
Previous wording
Cash requirements for our current liabilities include approximately $29.1 million for loans payable, $2.0 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 $4.8 million for the non-current portion of an operating lease liability. The Company intends to meet these cash requirements from its current cash balance.
Current wording
Cash requirements for our current liabilities include approximately $37.3 million for loans payable, $0.4 million for accounts payable, $0.5 million for accrued expenses, and $1.6 million for the current portion of an operating lease liability. Cash requirements for non-current liabilities include approximately $1.5 million for the non-current portion of an operating lease liability. The Company intends to meet these cash requirements from its current cash and short-term investments balance.
Previous wording
The table below summarizes cash flows for the six months ended June 30, 2024 and 2023:
Current wording
The table below summarizes cash flows for the nine months ended September 30, 2024 and 2023:
Previous wording
Net cash used in operating activities for the six months ended June 30, 2024 and 2023 was approximately $4.5 million and $3.0 million, respectively, representing increased usage of cash of approximately $1.5 million. During the six months ended June 30, 2024 and 2023, the net cash used in operating activities was primarily attributable to the net loss of approximately $5.7 million and $2.6 million, respectively, adjusted for approximately $2.0 million and $1.3 million, respectively, of net non-cash expenses, and approximately $0.8 million and $1.7 million, respectively, of cash used in changes in the levels of operating assets and liabilities.*** ***
Current wording
Net cash used in operating activities for the nine months ended September 30, 2024 and 2023 was approximately $13.2 million and $4.6 million, respectively, representing increased usage of cash of approximately $8.6 million. During the nine months ended September 30, 2024 and 2023, the net cash used in operating activities was primarily attributable to the net loss of approximately $9.7 million and $2.5 million, respectively, adjusted for approximately $2.9 million and $1.9 million, respectively, of net non-cash expenses, and approximately $6.4 million and $4.0 million, respectively, of cash used in changes in the levels of operating assets and liabilities.
Previous wording
Net cash provided by investing activities for the six months ended June 30, 2024 was approximately $1.7 million, which consisted of approximately $41.6 million in proceeds from the maturing of short-term investments, partially offset by approximately $39.9 million used for the purchase of short-term investments.
Current wording
Net cash used in investing activities for the nine months ended September 30, 2024 was approximately $24.7 million, which consisted of approximately $72.9 million used for the purchase of short-term investments and $14.4 million used for the issuance of a short-term loan. This was partially offset by approximately $62.7 million in proceeds from the maturing of short-term investments.
Previous wording
Net cash provided by investing activities for the six months ended June 30, 2023 was approximately $14.9 million, which consisted primarily of proceeds from the maturing of certificate of deposits of $20.0 million and approximately $0.1 million in proceeds from the sale of equipment. This was partially offset by $4.5 million of certificate of deposit purchases, approximately $0.6 million related to the acquisition of a mobile games license, and $0.1 million of property and equipment purchases.
Current wording
Net cash provided by investing activities for the nine months ended September 30, 2023 was approximately $5.9 million, which consisted primarily of proceeds from the maturing of certificate of deposits of $30.0 million and $0.1 million in proceeds from the sale of equipment. This was partially offset by $20.0 million of certificate of deposit purchases, $0.1 million of property and equipment purchases, $0.6 million related to the acquisition of a mobile games license, and $3.5 million in a loan to an affiliate.
Previous wording
Net cash provided by financing activities for the six months ended June 30, 2024 was approximately $19.8 million compared to approximately $1.9 million of net cash used in financing activities during the six months ended June 30, 2023. Net cash provided by financing activities during the six months ended June 30, 2024 represented proceeds from a short-term loan of approximately $19.8 million and proceeds from the issuance of common stock in a share purchase agreement of $2.0 million, offset by the $2.0 million return of proceeds upon cancellation of common stock previously issued. Net cash used in financing activities during the six months ended June 30, 2023 represented the purchase of treasury stock.
Current wording
Net cash provided by financing activities for the nine months ended September 30, 2024 was approximately $28 million compared to approximately $2.1 million of net cash used in financing activities during the nine months ended September 30, 2023. Net cash provided by financing activities during the nine months ended September 30, 2024 represented proceeds from short-term loans of approximately $28 million and proceeds from the issuance of common stock in a share purchase agreement of $2 million, offset by the $2 million return of proceeds upon cancellation of common stock previously issued. Net cash used in financing activities during the nine months ended September 30, 2023 represented the purchase of treasury stock.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Multiplatform content revenue was $0.0 for the six months ended June 30, 2024 and $2.0 million for the six months ended June 30, 2023. The decrease was due to Season 2 of Elevated, a live streaming event, that occurred during the six months ended June 30, 2023 and did not occur in 2024.
Previous report — wording carried elsewhere
Multiplatform costs (exclusive of depreciation and amortization) decreased by approximately $1.5 million to $0.0 for the six months ended June 30, 2024 from approximately $1.5 million for the six months ended June 30, 2023. The decrease in multiplatform costs corresponds to the decrease in revenue as discussed above.
Previous report — wording carried elsewhere
Interest income, net, was approximately $1.9 million for the six months ended June 30, 2024 compared to approximately $1.5 million of interest income for the six months ended June 30, 2023. The increase is a result of the interest earned on a short-term investment purchased during the fourth quarter of 2023.