Allied Gaming & Entertainment Inc.

In addition to the other information set forth in this report, you should carefully consider the factors discussed in the “Risk Factors” in the Company’s Form 10-K for the year ended December 31, 2024 and our other public filings, which could materially affect our business, financial condition or future results. Except as listed below, there have been no material changes from risk factors previously disclosed in “Risk Factors” in such Form 10-K in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on June 9, 2025.

We are currently not in compliance with Nasdaq’s continued listing requirements. Failure to regain compliance with Nasdaq’s listing requirements could result in delisting and adversely affect our stock price, liquidity and ability to raise capital.

Our continued eligibility for listing on Nasdaq depends on our ability to comply with Nasdaq’s continued listing requirements. Continued listing of a security on Nasdaq is conditioned upon compliance with various continued listing standards.

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 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. The hearing was held on July 31, 2025, and the Panel’s decision is pending. In the event that the Panel issues an unfavorable decision against the Company, the Company’s stock may be delisted from NASDAQ.

If Nasdaq delists the Company’s common stock from trading on its exchange for failure to meet the requirements for continued listing or any other listing standards, we and our stockholders could face significant material adverse consequences including:

We have been subject to aggressive and malicious proxy contest and related shareholder litigations by Knighted Pastures, which has caused us to incur significant legal expenses and impaired our business strategy.

As discussed in more detail in Item 3, “Legal Proceeding” below, the Company and its Board are subject to litigation involving one of its major stockholders, Knighted Pastures, LLC (“Knighted Pastures”), and its managing member. As we have disclosed in various filings with the SEC, the Company believes that Knighted Pastures is employing litigation tactics and stockholder activism to obtain control of the Company’s Board without paying a control premium. Knighted Pastures has indicated it intends to seek representation on the Company’s Board and to seek the removal for cause of certain additional directors. On October 27, 2024, the Company offered Knighted Pasture’s managing member a seat on the Company’s Board. On October 31, 2024, Knighted Pastures refused the proposal and demanded four seats on the Company’s Board. As described further herein, on November 12, 2024, Knighted Pastures filed a lawsuit challenging the Company’s strategic partnership and equity investment with an affiliate of Yellow River. The Company and its Board believe the lawsuit is entirely without merit and is defending against the claims vigorously.

In addition, at the combined 2024/2025 annual meeting of stockholders (the “Combined Annual Meeting”), Knighted Pastures nominated three directors for election to our board of directors, which has resulted in the Company’s incurrence of unexpected costs and a diversion of time and resources. The Knighted Pastures director nominees are inexperienced in working with an experimental entertainment company. Responding to the proxy contest and related litigatory actions has been costly and time-consuming, and has disrupted the Company’s operations and diverted the attention of our Board of Directors, management and employees.

To date we have incurred significant legal fees with respect to the Knighted Pastures stockholder litigation and related proxy contest, as well as fees incurred pursuing good faith negotiations with Knighted Pastures, which has, and may continue to, negatively impacted our financial performance. In addition, in the event we are unsuccessful and directors nominated by Knighted Pastures are elected to our board of director, such directors may disagree with the strategic directions of the Company or otherwise take actions that may adversely affect the interest of our stockholders. Further, continued and persistent shareholder activism may result in reputational harm to us, loss of customers, decreased strategic partner engagement, or other adverse impacts to our business.

In connection with our complaint against Knights Pastures regarding its beneficial ownership filings with the SEC (the “Rule 13D Action”), on August 1, 2025, the United States District Court for the Central District of California (the “Court”) issued an order that the Combined Annual Meeting not be postponed and enjoining Allied and Knighted Pastures from conducting any vote regarding changes to the composition of our Board of Directors at the Combined Annual Meeting. As such, the Annual Meeting was held as planned on August 4, 2025, but no vote was taken on any of the Company’s or Knighted’s director nominees or Knighted’s proposal to remove our director from the board of directors. While we have maintained control over our Board of Directors after the Annual Meeting, we expect Knighted Pasture to continue its aggressive tactics to gain control of the Company, either by additional litigations or engagement of proxy contests in the future. Furthermore, we cannot predict how the Court will ultimately decide with respect to the Rule 13D Action, and any adverse judgment may cause us to lose control of our Board of Directors, which will seriously impair our business operation, financial conditions and price of our stock.