Allied Gaming & Entertainment Inc.
For the period ended Mar 31, 2025. Filed Jul 7, 2025.
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.
Mar 31, 2025 · Filed Jul 7, 2025
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 2024-09-30; filed 2024-11-14.
0001213900-24-098566
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-07-07.
0001213900-25-061782
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 79 previous paragraphs and 65 current paragraphs.
20 unchanged; 23 reworded; 20 added; 32 removed; 4 previous and 2 current paragraphs rearranged.
Tables are not compared: 4 previous and 3 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 (20)
Current report
Under AEI we operate global competitive esports properties designed to connect players and fans via a network of connected arenas and creation of original esports content. AEI 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 an original content studio which creates and produces proprietary content series to serve brand activation and promotion, fans and community engagement.
Current report
Allied Experiential Entertainment (“AEE”) focuses on orchestrating live entertainment events and offers management and consultation service to experiential entertainment venue operations. In January 2025, AEE made a strategic investment by acquiring a minority interest stake in a partnership engaged in the production and distribution of The Angry Birds Movie 3, which will allow us to potentially receive profits generated by the movie after it is released. This initiative underscores Allied’s commitment to investing in iconic intellectual properties with broad, cross-generational appeal and multi-platform potential; supporting the Company’s growth strategy and expanding its global audience reach.
Current report
Termination of Securities Purchase Agreement
Current report
Noncompliance with Nasdaq Listing Rules
Current report
On April 17, 2025, the Company received a deficiency letter (the “Form 10-K Letter”) from the Listing Qualifications Department (the “Staff”) of the Nasdaq Stock Market (“Nasdaq”) notifying the Company that it was not in compliance with the periodic filing requirements for continued listing set forth in Nasdaq Listing Rule 5250(c)(1) because the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the “Form 10-K”) was not filed with the SEC by the required due date of March 31, 2025 (or April 15, 2025, following the Form 12b-25 filed by the Company on March 31, 2025).
Current report
On May 22, 2025, the Company received a deficiency letter (the “Form 10-Q Letter”) from the Staff of Nasdaq notifying the Company that it was not in compliance with the periodic filing requirements for continued listing set forth in Nasdaq Listing Rule 5250(c)(1) because the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 (the “Form 10-Q”) was not filed with the SEC by the required due date of May 15, 2025 (or May 20, 2025, following the Form 12b-25 filed by the Company on May 15, 2025) and because the Company had at the time of the Form 10-Q Letter remained delinquent in its filings for its Form 10-K (together the “Delinquent Reports”).
Current report
The Company was provided until June 16, 2025, or 60 calendar days from the receipt of the Form 10-K Letter, to submit a plan (the “Compliance Plan”) to regain compliance with the Nasdaq Listing Rules with respect to the Delinquent Reports. The Company filed its Form 10-K on June 9, 2025, and received a letter from the Staff of Nasdaq on June 10, 2025, notifying the Company that it had regained partial compliance with the periodic filings requirements upon the filing of the Form 10-K. On June 16, 2025, the Company submitted its Compliance Plan to the Staff with respect to its delinquent Form 10-Q filing.
Current report
On June 18, 2025, the Company received a notice from the Staff of Nasdaq indicating that, based on the Company’s non-compliance with Listing Rule 5620(a), which requires the Company to hold an annual meeting of shareholders within twelve months of the end of the Company’s fiscal year end, in addition to the Company’s non-compliance with Listing Rule 5250(c)(1) with respect to its Form 10-Q, the Staff determined to initiate procedures to delist the Company’s securities unless the Company requested an appeal to a Nasdaq Hearings Panel (the “Panel”) by June 25, 2025. On June 25, 2025, the Company submitted to the Staff a Request for Additional Stay, requesting a further stay of any suspension action pending the conclusion of the hearing process. Also on June 25, 2025, the Company received from the Staff a letter providing formal notice that the Panel will consider the Company’s appeal at an oral hearing. A hearing is scheduled for July 31, 2025.
Current report
As disclosed on our Current Report on Form 8-K filed with the SEC on May 23, 2025, and the proxy statement filed with the SEC on June 30, 2025, the Company’s Annual Meeting is scheduled for August 4, 2025, the Company is diligently preparing for the hearing to address the Annual Meeting deficiency and regain compliance with the Nasdaq Listing Rules.
Current report
Depreciation and amortization increased by approximately $7 thousand, or 2%, to approximately $382 thousand for the three months ended March 31, 2025, from approximately $375 thousand for the three months ended March 31, 2024.
Current report
Realized gain on investment in money market fund
Current report
We realized a gain on investment in money market fund of $0.4 million for the three months ended March 31, 2025, resulting from to the change in fair value of the money market funds between the purchase date and March 31, 2025. There were no investments in money market funds for the three months ended March 31, 2024.
Current report
Loss on investment in marketable securities
Current report
The Company recognized a loss of $0.3 million on its investments in marketable securities during the three months ended March 31, 2025, due to the change in fair value of the marketable securities that were owned during the period. There were no investments in marketable securities for the three months ended March 31, 2024.
Current report
Loss on foreign currency transactions, net
Current report
Change in fair value of digital assets
Current report
The decrease in the fair value of digital assets was approximately $63 thousand and $0 for the three months ended March 31, 2025 and 2024, respectively. We adopted ASU 2023-08 on January 1, 2025, which requires entities to measure crypto assets at fair value. The decrease in fair value is a result of the decrease in the fair value of Ethereum from the date of adoption.
Current report
Net cash used in investing activities for the three months ended March 31, 2025 was approximately $45.1 million, which consisted of $64.0 million used for the purchase of short-term investments, $2.4 million used for loans receivable, $2.6 million used for other receivables, and $2.5 million used for the investments, partially offset by $23.8 million in proceeds from the maturing of short-term investments, $1.3 million from proceeds from repayment of short-term loans, and $1.2 million from proceeds from the sale of marketable securities.
Current report
Net cash provided by financing activities for the three months ended March 31, 2024 was approximately $7.6 million, which consisted of approximately $5.6 million from proceeds from short-term loans and $2.0 million from proceeds from issuance of common stock in a share purchase agreement.
Current report
There are no off-balance sheet arrangements between us and any other entity that have, or are reasonably likely to have, a current or future effect on financial conditions, changes in financial conditions, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.
Removed paragraphs (32)
Previous report
Elite Fun Entertainment Co., Ltd. Strategic Investment
Previous report
On December 28, 2023, the Company entered into a Share Purchase Agreement (the “Elite Purchase Agreement”) with Elite Fun Entertainment Co., Ltd. (the “Purchaser”), pursuant to which the Purchaser agreed to purchase 7,330,000 shares of Common Stock at a purchase price of $0.90 per share (the “Purchased Shares”) for a total purchase price of $6,597,000. The Purchased Shares represented less than 20% of the total issued and outstanding shares of the Company prior to the closing of the transaction.
Previous report
On March 7, 2024, the Company received an initial payment of the Purchase Price of $2 million for the Purchased Shares and entered into a side letter agreement (the “Elite Side Letter Agreement”) with the Purchaser whereby the Purchaser agreed to pay the remaining consideration of $4.597 million within 2 months of the closing along with interest thereon at a simple interest rate of 5% per annum. The remaining consideration was collateralized by a pledge and first priority lien and security interest in 5,107,778 shares of Common Stock of the Purchased Shares issued by the Company to the Purchaser. All obligations under the termination agreement were satisfied as of July 3, 2024.
Previous report
On June 15, 2024, the Company entered into a Termination Agreement (the “Termination Agreement”) with the Purchaser, pursuant to which the Parties agreed to mutually terminate each of that certain Share Purchase Agreement, dated December 28, 2023 (the “SPA”), First Letter Agreement, dated February 1, 2024, Second Letter Agreement, dated February 28, 2024, and Third Letter Agreement, dated March 7, 2024. In addition, the Company agreed to (i) pay the Purchaser a total of $2,000,000, in cash, and (ii) forgive the Purchaser’s obligation to pay the remaining purchase price of $4.597 million for the shares, in exchange for the Purchaser transferring back to the Company all of the shares of common stock previously issued to the Purchaser pursuant to the SPA.
Previous report
Brookfield Settlement
Previous 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.
Previous report
Blue Planet New Energy Technology Limited Securities Purchase Agreement
Previous 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.
Previous report
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 report
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 report
Loss on escrow settlement
Previous 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.
Previous report
Loss on foreign currency transactions
Previous report
Revenues
Previous report
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 report
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 report
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 report
Costs and expenses
Previous report
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 report
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 report
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 report
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 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.
Previous report
Other income (expense), net
Previous report
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 report
Loss on escrow settlement
Previous 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.
Previous report
Loss on foreign currency transactions
Previous report
Interest income, net
Previous 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.
Previous report
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 report
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.
Reworded paragraphs (23)
Previous 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.
Current wording
The following discussion and analysis of the results of operations and financial condition of Allied Gaming & Entertainment Inc. (the “Company”) as of March 31, 2025 and for the three months ended March 31, 2025 and 2024 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, 2024, which are included in the Form 10-K (the “Annual Report”) filed with the Securities and Exchange Commission (“SEC”) on June 9, 2025. 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
Allied Gaming and Entertainment Inc., along with its subsidiaries (“AGAE” or the “Company”) is a global experiential entertainment company focused on providing a growing audience of gamers with unique experiences through renowned assets, products, and services. Under the Allied Esports International subsidiary (“AEI”) we operate global competitive esports properties designed to connect players and fans via a network of connected arenas and creation of original esports content. Esports Arena Las Vegas, LLC subsidiary, operates a flagship gaming arena located at the Luxor Hotel in Las Vegas, Nevada. Meanwhile, Allied Mobile Entertainment subsidiary (“AME”), is dedicated to exploring opportunities in the massive and growing mobile games markets. AME’s ownership of a 40% equity interest in Beijing Lianzhong Zhihe Technology Co. 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. 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 of Gen Y, Z, and Alpha consumers.
Current wording
Allied Gaming and Entertainment Inc., along with its subsidiaries (“Allied” or the “Company”) is a global experiential entertainment company focused on providing a growing audience of gamers with unique experiences through renowned assets, products, and services. The Company offers a variety of esports, gaming-and entertainment content and services through its three subsidiaries, Allied Esports International (“AEI”), 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.
Previous wording
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 wording
On April 25, 2025, the Company and Blue Planet each agreed to terminate the Securities Purchase Agreement dated October 18, 2024, pursuant to which the Company had sold to Blue Planet (i) 6,000,000 shares of common stock of the Company and (ii) a corresponding warrant to purchase up to 6,000,000 shares of common stock at an exercise price of $1.80 per share, for an aggregate purchase price of $6,600,000. Pursuant to the termination agreement, the Company agreed to (1) refund the $6,600,000 purchase price, (2) Blue Planet transferred back to the Company all of the shares of common stock and warrants to purchase shares of common stock that had been issued in connection with the Securities Purchase Agreement and (3) cancel the corresponding warrant to purchase up to 6,000,000 shares of common stock.
Previous 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.
Current 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.
Previous 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.
Current wording
In-person experience revenues increased by approximately $0.4 million, or 32%, to approximately $1.7 million for the three months ended March 31, 2025 from approximately $1.3 million for the three months ended March 31, 2024. The increase in in-person revenues resulted from higher revenue generated from arena events.
Previous 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.
Current wording
Casual mobile gaming revenue was $0.6 million for the three months ended March 31, 2025 and $1.1 million for the three months ended March 31, 2024, respectively. The decrease in casual mobile games revenue was primarily due to contraction of the online card game market as well as increasing competition from new mobile game developers.
Previous 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.
Current wording
In-person costs (exclusive of depreciation and amortization) increased by approximately $0.2 million, or 35%, to approximately $0.9 million for the three months ended March 31, 2025 from approximately $0.6 million for the three months ended March 31, 2024. The increase is the result of the costs associated with third party events at the arena held during the three months ended March 31, 2025 compared to the three months ended March 31, 2024.
Previous 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.
Current wording
Casual mobile gaming costs (exclusive of depreciation and amortization) were $0.6 million for the three months ended March 31, 2025 and $0.9 million for the three months ended March 31, 2024, respectively, resulting from a decrease in user incentive fees and user acquisition costs during the period in connection with the decrease in revenues described above.
Previous 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.
Current wording
Research and development expenses were $181 thousand and $195 thousand for the three months ended March 31, 2025 and 2024, 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 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.
Current wording
Selling and marketing expenses decreased by approximately $14 thousand, or 26%, to approximately $40 thousand for the three months ended March 31, 2025 from approximately $54 thousand for the three months ended March 31, 2024.
Previous 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.
Current wording
General and administrative expenses increased by approximately $2.6 million, or 92%, to approximately $5.5 million for the three months ended March 31, 2025, from approximately $2.9 million for the three months ended March 31, 2024. The increase in general and administrative expenses resulted primarily from a $3.2 million increase in legal and professional fees incurred in connection with a complaint filed by a dissident stockholder, as well as a $0.1 million increase in salaries due to the hiring of our new President in April of 2024. These increases were partially offset by the decrease in audit, tax, and filing fees of $0.2 million and stock-based compensation of $0.3 million due to restricted share awards granted on February 22, 2024 in which a portion immediately vested.
Previous 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.
Current wording
We recognized other non-operating income, net, of approximately $24 thousand during the three months ended March 31, 2024, compared to $13 thousand of other expense, net, recorded for the three months ended March 31, 2024, representing a increase in other income of $37 thousand.
Previous 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.
Current wording
The loss on foreign currency transactions was approximately $0.6 million for the three months ended March 31, 2025 compared to $0 for the three months ended March 31, 2024. The increase in loss 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, bond linked notes, ETF linked notes, and foreign securities were purchased and the remeasurement date of March 31, 2025.
Previous 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.
Current wording
Interest income, net, was approximately $864 thousand for the three months ended March 31, 2025 compared to approximately $859 thousand of interest income for the three months ended March 31, 2024. The increase is a result of the interest earned on fixed term deposits and equity, bond, and ETF linked notes, as well as interest earned on loans receivable during the period.
Previous wording
Our primary sources of liquidity and capital resources are cash and short-term investments on the balance sheet and funds that can be raised through debt or equity financing. We intend to utilize our credit facilities provided by our financial institutions for investment purposes, including but not limited to fixed interest returns on notes, bonds, and loans to qualified borrowers.
Current wording
Our primary sources of liquidity and capital resources have been cash and short-term investments on the balance sheet, including the funds received through the sale of World Poker Tour.
Previous 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.
Current wording
As of March 31, 2025, we had cash and cash equivalents of approximately $19.5 million (not including $49.2 million of short-term investments and $2.1 million of marketable securities) and working capital of approximately $57.3 million.
Previous 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.
Current wording
Cash requirements for our current liabilities include approximately $34.5 million for loans payable, approximately $4.5 million in the 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 $3.6 million for the non-current portion of an operating lease liability. The Company intends to meet these cash requirements from its current cash balance.
Previous wording
The table below summarizes cash flows for the nine months ended September 30, 2024 and 2023:
Current wording
The table below summarizes cash flows for the three months ended March 31, 2025 and 2024:
Previous 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.
Current wording
Net cash used in operating activities for the three months ended March 31, 2025 and 2024 was approximately $2.2 million and $2.1 million, respectively, representing increased usage of cash of $0.1 million. During the three months ended March 31, 2025 and 2024, the net cash used in operating activities was primarily attributable to the net loss of approximately $4.9 million and $1.8 million, respectively, adjusted for approximately $1.5 million and $1.1 million, respectively, of net non-cash expenses, and approximately $1.2 and $1.4 million, respectively, of cash used to fund changes in the levels of operating assets and liabilities.*** ***
Previous 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.
Current wording
Net cash used in investing activities for the three months ended March 31, 2024 was approximately $14.5 million, which consisted of $19.6 million used for the purchase of short-term investments and $1.3 million used for the issuance of a short-term loan, partially offset by $6.5 million in proceeds from the maturing of short-term investments.
Previous wording
Net Cash Provided By Investing Activities
Current wording
Net Cash Provided By Financing Activities
Previous 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.
Current wording
Net cash provided by financing activities for the three months ended March 31, 2025 was approximately $7.5 million compared to approximately $7.6 million of net cash used in financing activities during the three months ended March 31, 2024. Net cash provided by financing activities during the three months ended March 31, 2025 represented proceeds from a short-term loan of $19.2 million, which is partially offset by a repayment of short-term loans of 11.7 million.
Previous wording
We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. We consider accounting for goodwill impairment to be a critical accounting estimate. There are additional items within our financial statements that require estimation but are not deemed critical, as defined above.
Current wording
We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. We consider accounting for income taxes, impairment of long-lived assets, and impairment of goodwill to be critical accounting estimates. There are other items within our financial statements that require estimation but are not deemed critical, as defined above.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Allied Mobile Entertainment (“AME”) is dedicated to exploring opportunities in the massive and growing mobile games markets. AME’s ownership of a 40% equity interest in Beijing Lianzhong Zhihe Technology Co. Ltd, a prominent mobile games developer and operator who is engaged in the development and distribution of casual mobile games in Mainland China, solidifies our presence in this lucrative sector.
Current report — wording carried from elsewhere
Net Cash Used In Investing Activities
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
Results of Operations for the Nine Months Ended September 30, 2024 and 2023
Previous report — wording carried elsewhere
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 report — wording carried elsewhere
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 report — wording carried elsewhere
Net Cash Provided By (Used In) Financing Activities