Allied Gaming & Entertainment Responds to Lawsuit from Dissident Stockholder
Allied Gaming & Entertainment (NASDAQ: AGAE) responds to a derivative lawsuit filed by Knighted Pastures, against the company's directors regarding the Yellow River strategic investment. The company states the lawsuit is without merit and views it as an attempt by Knighted and Roy Choi to gain control at a discounted price. Seven of eight AGAE board members are independent directors who thoroughly vetted the Yellow River transaction. The company previously offered Knighted a board seat, which was rejected in favor of demanding four out of seven board seats. AGAE maintains these actions aim to protect long-term stockholder value while executing announced business strategies.
Allied Gaming & Entertainment (NASDAQ: AGAE) risponde a una causa derivativa intentata da Knighted Pastures contro i membri del consiglio dell'azienda riguardo all'investimento strategico nel Yellow River. L'azienda afferma che la causa non ha fondamento e la considera un tentativo di Knighted e Roy Choi di ottenere il controllo a un prezzo scontato. Sette degli otto membri del consiglio AGAE sono direttori indipendenti che hanno esaminato a fondo la transazione con il Yellow River. In precedenza, l'AGAE aveva offerto a Knighted un posto nel consiglio, che è stato rifiutato a favore della richiesta di quattro posti su sette nel consiglio. AGAE sostiene che queste azioni mirano a proteggere il valore a lungo termine per gli azionisti mantenendo l'esecuzione delle strategie aziendali annunciate.
Allied Gaming & Entertainment (NASDAQ: AGAE) responde a una demanda derivativa presentada por Knighted Pastures contra los directores de la compañía relacionada con la inversión estratégica en el Yellow River. La empresa sostiene que la demanda carece de fundamento y la ve como un intento de Knighted y Roy Choi de obtener el control a un precio reducido. Siete de los ocho miembros de la junta de AGAE son directores independientes que revisaron minuciosamente la transacción del Yellow River. La empresa previamente ofreció a Knighted un asiento en la junta, el cual fue rechazado a favor de exigir cuatro de los siete asientos en la junta. AGAE mantiene que estas acciones tienen como objetivo proteger el valor a largo plazo para los accionistas mientras ejecutan las estrategias comerciales anunciadas.
Allied Gaming & Entertainment (NASDAQ: AGAE)는 Yellow River 전략적 투자와 관련하여 회사 이사들에 대한 Knighted Pastures가 제기한 파생소송에 대응합니다. 회사는 소송이 근거가 없다고 주장하며, Knighted와 Roy Choi가 할인된 가격으로 통제권을 얻으려는 시도로 보고 있습니다. AGAE 이사회 구성원 8명 중 7명이 독립 이사로 구성되어 있으며, Yellow River 거래를 철저히 검토했습니다. 회사는 이전에 Knighted에게 이사회 자리를 제안했으나, 이는 7석 중 4석을 요구하는 쪽으로 거부되었습니다. AGAE는 이러한 조치가 발표된 비즈니스 전략을 실행하는 동안 장기 주주 가치를 보호하기 위한 것이라고 주장합니다.
Allied Gaming & Entertainment (NASDAQ: AGAE) répond à un procès dérivé déposé par Knighted Pastures contre les directeurs de l'entreprise concernant l'investissement stratégique dans le Yellow River. L'entreprise déclare que le procès est infondé et le considère comme une tentative de Knighted et Roy Choi de prendre le contrôle à un prix réduit. Sept des huit membres du conseil d'administration d'AGAE sont des directeurs indépendants qui ont soigneusement examiné la transaction avec le Yellow River. L'entreprise avait précédemment offert à Knighted un siège au conseil, qui a été rejeté au profit de l'exigence de quatre sièges sur sept. AGAE affirme que ces actions visent à protéger la valeur à long terme des actionnaires tout en exécutant les stratégies commerciales annoncées.
Allied Gaming & Entertainment (NASDAQ: AGAE) reagiert auf eine derivativen Klage, die von Knighted Pastures gegen die Direktoren des Unternehmens bezüglich der strategischen Investition in den Yellow River eingereicht wurde. Das Unternehmen erklärt, dass die Klage unbegründet sei und sieht sie als einen Versuch von Knighted und Roy Choi, Kontrolle zu einem reduzierten Preis zu erlangen. Sieben der acht AGAE-Vorstandsmitglieder sind unabhängige Direktoren, die die Transaktion mit dem Yellow River umfassend geprüft haben. Das Unternehmen hatte Knighted zuvor einen Sitz im Vorstand angeboten, der zugunsten der Forderung nach vier von sieben Sitzen im Vorstand abgelehnt wurde. AGAE betont, dass diese Maßnahmen darauf abzielen, den langfristigen Wert für die Aktionäre zu schützen, während die angekündigten Geschäftsstrategien umgesetzt werden.
- Board independence with 7 out of 8 directors being independent
- Professional vetting of Yellow River transaction with financial advisor input
- Ongoing legal disputes causing waste of stockholder money
- Management time diverted to handle litigation instead of business operations
Insights
The derivative lawsuit against AGAE's directors represents a significant corporate governance challenge. The dispute centers on the strategic investment with Yellow River, with dissident stockholder Knighted Pastures alleging breach of fiduciary duty. Several key aspects warrant attention:
- The board's composition of 7 out of 8 independent directors strengthens their defense position
- The company's documented due diligence process, including financial advisor consultation, demonstrates proper business judgment
- The rejected board seat offer and Knighted's demand for 4 out of 7 board seats suggests potential control motivations
The lawsuit's timing and nature, coupled with the company's cash position being above market value, indicates this could be a strategic move to force control rather than a legitimate governance concern. The litigation costs and management distraction could impact operational efficiency and shareholder value in the short term.
- This lawsuit is yet another attempt by Knighted and its Managing Partner, Roy Choi, to continue their scheme to gain control of the Company at a discounted price below the Company’s cash value to further their own short-term interests while destroying long-term value for all stockholders of AGAE. Despite our clear progress advancing upon AGAE’s strategic initiatives, Knighted continues to file frivolous lawsuits, which have only resulted in the waste of stockholder money and diversion of the Board and Management’s time.
- Knighted and Mr. Choi’s actions have clearly demonstrated that they are solely interested in benefitting themselves at the expense of all stockholders. They have not articulated any business plan for AGAE and we believe that if they were able to gain control of the Company, they would further destroy stockholder value through poor investments before ultimately liquidating the Company in order to return cash to themselves. The Board and Management will defend these meritless allegations while remaining focused on maximizing stockholder value for all by executing its previously announced business strategies.
In light of Knighted’s statement regarding the litigation, it is important to highlight certain facts relevant to these issues:
- Seven of the eight members of Allied Gaming & Entertainment’s Board of Directors are independent directors.
- The Company’s independent Board of Directors vetted and assessed the Yellow River transaction thoroughly and deliberately, received input and advice from a financial advisor, and believed in their respective business judgment that the transaction was in the best interest of the Company and its shareholders, and the Company’s Board overwhelmingly voted to approve the transaction.
In addition, for years the Board has attempted in good faith to engage constructively with Knighted and Mr. Choi without success, including in October 2024 offering Knighted a board seat which would provide Knighted with the opportunity to participate in the decision making process of AGAE’s business operations. If Knighted were to accept our offer for a Board seat, it would be similarly situated to our other two large shareholders who each have a board seat. Instead, Knighted demanded that we surrender four out of seven Board seats and therefore cede control of the Company for its own benefit. AGAE urges all stockholders to see through these ploys by Knighted and Mr. Choi and continue to support the Management and the Board’s actions to advance the interest of all shareholders.
About Allied Gaming & Entertainment
Allied Gaming & Entertainment Inc. (Nasdaq: AGAE) is a global experiential entertainment company focused on providing a growing world of gamers and concertgoers with unique experiences through renowned assets, products and services. For more information, visit alliedgaming.gg.
Forward Looking Statements
This communication contains certain forward-looking statements under federal securities laws. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “intend” or “continue,” the negative of such terms, or other comparable terminology. These statements are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause actual results to be materially different from those contemplated by the forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside our control, that could cause actual results or outcomes to differ materially from those discussed in these forward-looking statements. The inclusion of such information should not be regarded as a representation by the Company, or any person, that the objectives of the Company will be achieved.
Important Information Regarding the 2024 Annual Meeting and Where to Find It
The Company has filed a preliminary proxy statement and WHITE proxy card with the
Certain Information Regarding Participants
The Company, its directors and certain of its executive officers and employees may be deemed to be participants in connection with the solicitation of proxies from the Company’s stockholders in connection with the matters to be considered at the 2024 Annual Meeting of Stockholders. Information regarding the direct and indirect interests, by security holdings or otherwise, of the Company’s directors and executive officers in the Company is included in the preliminary proxy statement filed on November 12, 2024, which can be found through the SEC’s website at https://www.sec.gov/Archives/edgar/data/1708341/000114036124045943/ny20037580x2_prer14a.htm. To the extent that there are changes to the direct or indirect interests of the Company’s securities by directors and executive officers, they will be set forth in SEC filings on Statements of Beneficial Ownership on Forms 3, 4 and 5. More detailed and updated information regarding the identity of these potential participants, and their direct or indirect interests in the Company, by security holdings or otherwise, will be set forth in the proxy statement for the 2024 Annual Meeting of Stockholders and other materials to be filed with the SEC.
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Investor Contact:
Addo Investor Relations
ir@alliedgaming.gg
Source: Allied Gaming & Entertainment, Inc.
FAQ
What lawsuit was filed against Allied Gaming & Entertainment (AGAE)?
How many independent directors does AGAE have on its board?
What board representation did AGAE offer to Knighted Pastures?
How did AGAE's board evaluate the Yellow River transaction?
