NEW YORK, November 16, 2022–(BUSINESS WIRE)–Allied Esports Entertainment, Inc. (NASDAQ: AESE) (the “Company” or “AESE”), a world esports leisure firm, immediately introduced monetary outcomes for the third quarter ended September 30, 2022. This launch refers to “continuing” and “discontinued” operations because of the sale of the Company’s subsidiaries proudly owning and working its poker-related enterprise, the World Poker Tour® (“World Poker Tour,” or “WPT®”) on July 12, 2021. Unless in any other case famous, outcomes introduced on this launch relate to the persevering with operations of the Company and its Allied Esports enterprise, and excludes the operations of the World Poker Tour, that are categorised as discontinued operations of the Company.

Commenting on the third quarter 2022 outcomes and strategic course of, the Company’s Chief Executive Officer, Yinghua Chen, mentioned, “As the recovery of our Esports operations continues to gain momentum, we delivered strong sequential quarter revenue growth of 35%. With a robust slate of Esports events scheduled for the fourth quarter, we expect a strong finish to the year. I am also very pleased with our continued progress in evaluating strategic alternatives for our business, including investing the cash on our balance sheet for M&A opportunities to generate profitable growth and drive shareholder value. We intend to provide the market with an update on these activities at the appropriate time.”

Third Quarter 2022 Financial Results

Revenues: Total revenues of $1.6 million decreased 7% for the third quarter of 2022 in comparison with the third quarter of 2021, however had been up 35% from the second quarter of 2022. The decline from the third quarter of 2021 was pushed by a year-over-year discount in our multi-platform content material revenues, most notably from reside streaming occasions with Trovo. The sequential enchancment was primarily pushed by a rise in proprietary and third-party manufacturing occasions at our Esports enviornment.

Costs and bills: Total prices and bills for the third quarter of 2022 had been $3.3 million, a lower of 42% in comparison with the third quarter of 2021. The internet lower in prices and bills is primarily on account of a $1.0 million, or 29%, discount on the whole and administrative bills, consisting primarily of severance funds to a former government {and professional} charges associated to the sale of WPT in addition to a $1.1 million discount in non-cash depreciation and amortization expense.

Net loss for the third quarter of 2022 was $1.6 million in comparison with internet revenue of $74.3 million within the prior yr interval. The 2021 internet revenue contains an $80.4 million achieve on the sale of WPT partially offset by a $3.2 million loss from discontinued operations previous to the sale of WPT.

Adjusted EBITDA loss was $1.8 million for the third quarter of 2022 in comparison with a lack of $3.0 million within the third quarter of 2021. A reconciliation of the GAAP-basis internet loss to adjusted EBITDA is offered within the desk on the finish of this press launch.

Balance Sheet

As of September 30, 2022, the Company had a money place of $89.2 million, together with $5.0 million of restricted money in comparison with $97.9 million at December 31, 2021, which additionally included $5.0 million of restricted money. At September 30, 2022, the Company had a working capital place of $81.6 million in comparison with $89.0 million at December 31, 2021. As of September 30, 2022, the Company had roughly 39.1 million shares of excellent widespread inventory.

Operational Update

Allied Esports produced 93 occasions within the third quarter of 2022, with 61 proprietary occasions and 32 third occasion occasions. Third occasion occasions had been up 23% over the second quarter of 2022 and had been highlighted by HackerOne, Universal Domino League, the Rainbow Six North America League and The Ultimate Crown: The Ultimate Battle that includes MrBeast, Ninja, Voyboy, Mizkif, Tyler1, Doublelift and Ludwig amongst different prime influencers.

Live occasion and manufacturing enterprise continued to develop stronger with the Company’s HyperX Arena Las Vegas posting its finest quarter yr up to now whereas rising revenues by 51% and bettering adjusted EBITDA by 32% over the second quarter.

The Allied Esports Trucks had been energetic with 5 eNASCAR Arcade occasions happening within the third quarter of 2022 on the Richmond FireKeepers Casino 400 at Michigan International Speedway in Brooklyn, Michigan, the NASCAR Cup Series Race at Richmond Raceway in Richmond, Virginia, Go Bowling at The Glen at Watkins Glen International in Watkins Glen, New York, the Coke Zero Sugar 400 at Daytona International Speedway in Daytona Beach, Florida, and the Cook Out Southern 500 at Darlington Raceway in Darlington, South Carolina. In addition, the corporate executed pop-up gaming exhibition occasions for Boys and Girls Club on the Keystone Conference in Anaheim, California, for NASCAR at Bubba’s Block Party that includes Bubba Wallace in Richmond, Virginia, for NASCAR and the Coca-Cola iRacing Series at University of Central Florida in Orange County, Florida and for NASCAR in partnership with Southern Computer Warehouse at Kansas Speedway in Kansas City, Kansas.

Corporate Developments

During the third quarter of 2022, the Company’s Board of Directors (the “Board”) appointed Yinghua Chen as Chief Executive Officer. Ms. Chen had beforehand served because the Company’s President, Chief Investment Officer and Board Secretary. Given Ms. Chen’s extra duties as Chief Executive Officer, Ms. Chen now not serves the Company as Chief Investment Officer or Board Secretary, however continues to function President. Ms. Chen assumed the Chief Executive Officer place from Lyle Berman, who served as Interim Chief Executive Officer since February 2022. Mr. Berman retained his place as Co-Chairman of the Board, and has been appointed as Vice President, Mergers & Acquisitions, the place he shall be extra centered on the Company’s M&A actions.

Subsequent to the top of the third quarter of 2022, the Company introduced Judson Hannigan resigned as Chief Executive Officer of Allied Esports International, Inc., the Company’s wholly owned subsidiary that operates the Allied Esports enterprise. In addition, on account of elevated international financial uncertainty and in an effort to enhance the Company’s money circulate and monetary flexibility, the Company is within the means of closing Allied Esports’ European workplace and can handle its operations by Allied Esports’ services within the U.S.

As beforehand introduced, late in 2021, the Company engaged The Benchmark Company, LLC to function the Company’s unique monetary advisor in reference to a possible enterprise mixture transaction. The Company has reviewed a variety of potential goal funding alternatives over the previous a number of months, and due diligence, in addition to the continued sourcing of different alternatives, stays ongoing. The Company intends to supply additional updates on the acceptable time.

Additionally, as beforehand introduced, the Company stays within the means of exploring strategic choices for the Esports enterprise and intends to supply additional updates on the acceptable time.

About Allied Esports Entertainment

Allied Esports Entertainment, Inc. (NASDAQ: AESE) is a world esports leisure enterprise devoted to offering transformative reside experiences, multiplatform content material and interactive providers to audiences worldwide. For extra data, go to alliedesports.gg.

Non-GAAP Financial Measures

As a complement to our monetary measures introduced in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), the Company presents sure non-GAAP measures of monetary efficiency. These non-GAAP monetary measures will not be meant to be thought-about in isolation from, as an alternative to, or as extra essential than, the monetary data ready and introduced in accordance with GAAP. In addition, these non-GAAP measures have limitations in that they don’t mirror all the objects related to the corporate’s outcomes of operations as decided in accordance with GAAP.

The Company gives internet revenue (loss) and earnings (loss) per share in accordance with GAAP. In addition, the Company gives EBITDA (outlined as GAAP internet revenue (loss) from persevering with operations earlier than curiosity (revenue) expense, revenue taxes, depreciation, and amortization). The Company defines “Adjusted EBITDA” as EBITDA excluding sure non-cash costs, comparable to stock-based compensation, inducement expense, extinguishment losses and impairment losses.

In the longer term, the Company may additionally take into account whether or not different objects must also be excluded in calculating the non-GAAP monetary measures utilized by the Company. Management believes that the presentation of those non-GAAP monetary measures gives buyers with extra helpful data to measure the Company’s monetary and working efficiency. In explicit, these measures facilitate comparability of our working efficiency between durations and assist buyers to raised perceive the working outcomes of the Company by excluding sure objects that will not be indicative of the Company’s core enterprise, working outcomes, or future outlook. Additionally, we take into account quantitative and qualitative elements in assessing whether or not to regulate for the influence of things which may be vital or that might have an effect on an understanding of our ongoing monetary and enterprise efficiency or tendencies. Internally, administration makes use of these non-GAAP monetary measures, together with others, in assessing the Company’s working outcomes, measuring compliance with any relevant necessities of the Company’s debt financing agreements in place at such time, in addition to in planning and forecasting.

The Company’s non-GAAP monetary measures will not be primarily based on a complete set of accounting guidelines or rules, and our non-GAAP definitions of the “EBITDA” and “Adjusted EBITDA” should not have a standardized that means. Therefore, different firms could use the identical or equally named measures, however embrace or exclude totally different objects, which can not present buyers a comparable view of the Company’s efficiency in relation to different firms.

Management compensates for the constraints ensuing from the exclusion of this stuff by contemplating the influence of the objects individually and by contemplating the Company’s GAAP, in addition to non-GAAP, monetary outcomes and outlook, and by presenting essentially the most comparable GAAP measures immediately forward of non-GAAP measures, and by offering a reconciliation that signifies and describes the changes made.

Forward-Looking Statements

This communication incorporates sure forward-looking statements beneath federal securities legal guidelines. Forward-looking statements could embrace our statements relating to our targets, beliefs, methods, aims, plans, together with product and repair developments, future monetary circumstances, outcomes or projections or present expectations. In some circumstances, you possibly can establish forward-looking statements by terminology comparable to “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “intend” or “continue,” the destructive of such phrases, or different comparable terminology. These statements are topic to identified and unknown dangers, uncertainties, assumptions and different elements which will trigger precise outcomes to be materially totally different from these contemplated by the forward-looking statements. These forward-looking statements will not be ensures of future efficiency, circumstances or outcomes, and contain a variety of identified and unknown dangers, uncertainties, assumptions and different essential elements, a lot of that are outdoors our management, that might trigger precise outcomes or outcomes to vary materially from these mentioned in these forward-looking statements. Important elements, amongst others, which will have an effect on precise outcomes or outcomes embrace: the flexibility to satisfy Nasdaq’s continued itemizing requirements; our skill to execute on our marketing strategy; the flexibility to retain key personnel; potential litigation; normal financial and market circumstances impacting demand for our providers; a change in our plans to retain or make investments the online money proceeds from the WPT sale transaction; our lack of ability to enter into a number of future acquisition or strategic transactions utilizing the online proceeds from the WPT sale transaction; and our skill, or a choice to not pursue strategic choices for the esports enterprise. You ought to take into account the areas of danger described in reference to any forward-looking statements which may be made herein. The enterprise and operations of AESE are topic to substantial dangers, which enhance the uncertainty inherent within the forward-looking statements contained on this communication. Except as required by regulation, we undertake no obligation to launch publicly the results of any revision to those forward-looking statements which may be made to mirror occasions or circumstances after the date hereof or to mirror the incidence of unanticipated occasions. Further data on potential elements that might have an effect on our enterprise and outcomes is described beneath “Item 1A. Risk Factors” in our Annual Report on Form 10-Okay for the yr ended December 31, 2021, as filed with the SEC on May 26, 2022, in addition to subsequent experiences we file with the SEC. Readers are additionally urged to fastidiously evaluation and take into account the assorted disclosures we made in such Annual Report on Form 10-Okay and in subsequent experiences with the SEC.

Non-GAAP Financial Measures

EBITDA and Adjusted EBITDA are non-GAAP monetary measures and shouldn’t be thought-about as an alternative to internet revenue (loss), working revenue (loss) or another efficiency measure derived in accordance with United States typically accepted accounting rules (“GAAP”) or as an alternative choice to internet money offered by working actions as a measure of AESE’s profitability or liquidity. AESE’s administration believes EBITDA and Adjusted EBITDA are helpful as a result of they permit exterior customers of its monetary statements, comparable to business analysts, buyers, lenders and ranking businesses, to extra successfully consider its working efficiency, evaluate the outcomes of its operations from interval to interval and towards AESE’s friends with out regard to AESE’s financing strategies, hedging positions or capital construction and since it highlights tendencies in AESE’s enterprise that won’t in any other case be obvious when relying solely on GAAP measures. AESE presents EBITDA and Adjusted EBITDA as a result of it believes EBITDA and Adjusted EBITDA are essential supplemental measures of its efficiency which are ceaselessly utilized by others in evaluating firms in its business. Because EBITDA and Adjusted EBITDA exclude some, however not all, objects that have an effect on internet revenue (loss) and will differ amongst firms, the EBITDA and Adjusted EBITDA AESE presents will not be corresponding to equally titled measures of different firms. AESE defines “EBITDA” as earnings earlier than curiosity, revenue taxes, depreciation and amortization of intangibles. AESE defines “Adjusted EBITDA” as EBITDA excluding stock-based compensation, achieve on forgiveness of PPP loans, transaction prices and different costs associated to the sale of WPT, impairment losses, conversion inducement bills and extinguishment losses.

The following desk presents a reconciliation of EBITDA and Adjusted EBITDA to internet loss from persevering with operations, AESE’s most immediately comparable monetary measure calculated and introduced in accordance with GAAP.

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Contacts

Investor Contact:
Lasse Glassen
Addo Investor Relations
lglassen@addo.com
424-238-6249

Media Contact:
Brian Fisher
Allied Esports Entertainment
brian@alliedesports.com