Third Quarter 2019 Revenue of $ 6.0 Million, Up 10% Year-Over-Year

IRVINE, Calif .– (BUSINESS WIRE) -Allied Esports Entertainment, Inc. (NASDAQ: AESE) ("Allied Esports" or the "Company") September 30, 2019 as well as an update on several key business initiatives. As previously announced, the Company was formed on August 9, 2019 as a result of the completion of a business combination among Black Ridge Acquisition Corp., Allied Esports International, Inc., WPT Enterprises, Inc. and other affiliates.

Commenting on the Company's third quarter results, Allied Esports' CEO Frank Ng said, “In our first quarter as a public export company, Allied Exports delivered solid results driven and TV Azteca. At the topline, total revenues expanded more than 10, compared to the third quarter of last year, with multi-platform content, and interactive — generating year-over-year growth. I am pleased with the progress we are making in our partnership with our strategic investors, Simon and TV Azteca, as well as the premiere of WPT television programming and social gaming across Mexico. various distribution channels via TV Azteca. Looking ahead to the fourth quarter, momentum continues to build and we expect a strong finish to the year. "

Third Quarter 2019 Financial Results

Revenues: Total revenues in the third quarter of 2019 increased 10.2% to $ 6.0 million from $ 5.5 million in the third quarter of 2018, reflecting growth from all strategic pillars.

In-person revenues increased by approximately $ 0.4 million, or approximately $ 17 million for the third quarter of 2.6 from approximately $ 2019 million in the third quarter of last year. The increase in In-person revenues is driven by the Allied business, particularly revenue generated from Allied Esports' flagship venue, the HyperX Esports Arena Las Vegas, which opened its doors in March of 2.2.

Multiplatform Content Revenues Increased Approximately $ 0.1 million, or 9%, approximately approximately $ 1.0 million for the three months ended September 30, 2019 from approximately $ 0.9 The increase in Multiplatform Content revenues to the WPT business, with increased sponsorship of $ 30 million being the greatest contributor.

Interactive revenues increased by approximately $ 0.1 million, or approximately $ 4 million for the third quarter of 2.4 from approximately $ 2019 million in the prior year quarter. The increase in Interactive revenues all related to the WPT business. Increases in product licensing revenue ($ 2.3 million) and social gaming revenue ($ 0.1 million) were the primary drivers for the increase. WPT managed social gaming in-house at 0.2, but has licensed out the product, resulting in a $ 2018 million decrease in the third quarter of 0.2 period as compared to a year ago.

For the Three Months Ended

For the Nine Months Ended

September 30,

September 30,

2019

2018

2019

2018

Revenues

In-person

$

2,586,965

$

2,202,443

$

8,887,366

$

6,068,081

Multiplatform content

1,031,383

949,345

3,540,373

2,121,645

interactive

2,423,193

2,328,453

7,187,196

7,009,570

Total Revenues

$

6,041,541

$

5,480,241

$

19,614,935

$

15,199,296

Costs and expenses: Total costs and expenses for the third quarter fell 17.1% to $ 9.9 million from $ 11.9 million in the third quarter of 2018. 3.3 million-year-over-year loss of income in the first quarter of 2019 This was partially offset by increased expenses and higher SG&A, including public company costs.

For the Three Months Ended

For the Nine Months Ended

September 30,

September 30,

2019

2018

2019

2018

Costs and expenses

In-person (exclusive of depreciation and amortization)

$

1,196,572

$

975,254

$

2,901,220

$

3,992,607

Multiplatform content (exclusive of depreciation and amortization)

786,706

860,332

2,907,827

2,033,834

Interactive (exclusive of depreciation and amortization)

569,478

612,786

1,976,012

1,903,347

Online operating expenses

172,879

129,770

489,269

1,541,789

Selling and marketing expenses

705,714

302,508

2,644,645

3,143,563

General and administrative expenses

4,711,692

3,871,179

13,378,166

12,364,722

Depreciation and amortization

1,716,103

1,892,665

5,133,947

5,228,709

Impairment expense

-

3,252,545

600,000

7,590,205

Total Costs and Expenses

$

9,859,144

$

11,897,039

$

30,031,086

$

37,798,776

Net loss attributed to Allied Exports for the third quarter of 2019 improved to $ 4.3 million, compared to a net loss of $ 6.7 million in the prior year period.

Third quarter adjusted EBITDA, to non-GAAP measure, was ($ 2.1) million from ($ 1.2) million in the third quarter of 2018. A reconciliation of the GAAP-basis net loss to adjusted EBITDA is provided in the table of the end of this press release.

At quarter-end, the cash position totaled $ 14.3 million, including $ 5.0 million of restricted cash, compared to $ 10.5 million at December 31, 2018. The increase was two to the proceeds from the merger. The Company's convertible debt totaled $ 14.0 million. As of September 30, 2019, the Company's basic and diluted common shares outstanding totaled 23.1 million shares.

Operational Update

Allied Esports

The Company held 85 events at its flagship location, HyperX Esports Arena Las Vegas, during the quarter, notable events such as, Twitch Prime Crown Cup, EVO Official Red Bull After Party, HyperX Kickoff to WoW Classic, Newegg FragFest and the Company's lineup of weekly original programming, including Wednesday Whiffs, Friday Frags and Saturday Night Speedway.

The HyperX Esports Trucks in North America and in Europe activated with sponsors such as HyperX, Lenovo, Intel, Warsteiner and Acer, and were deployed at eight events, including Anime Expo, VidCon, Gamescom, Wacken Open Air, GameStop Expo and Scotland's Resonate Total Gaming Festival.

Fortress Esports, the newest member of Allied Esports Property Network covering Australia and New Zealand, released renderings and announced the planned opening of its first location at 2020 at Australia's largest shopping mall, Emporium, in Melbourne, Australia.

Allied Esports and TV Azteca produced two exports of Mexico City: Glory Road, at Smash Ultimate event featuring top players Samsora and 2019 EVO Champion, MKLeo, and Kombat to Glory, a Mortal Kombat event with Captain Morgan. The events were live streamed across TV Azteca's social and digital platforms.

As a part of its strategic partnership with the Simon, the Simon Cup, which exemplifies all three pillars of Allied Esports' three pillar strategy. The tournament combines online and in-person qualifying rounds in the New York and Los Angeles markets, with appearances by popular influencers from FaZe Clan to drive participation. The Grand Final will be streamed live from HyperX Esports Arena Las Vegas on November 13, 23 on Allied Esports 'distribution channels as well as simulcast on popular FaZe Clan member NickMercs' Twitch channel. Through this partnership, the Company has developed an online platform that allows the creation of a replicable offering together with Simon that engages with sponsors and retailers.

World Poker Tour®

A localized version of the WPT television show for the Mexico market premiered on Channel 7 in July and coincided with the launch of the social gaming platform in Mexico, WPTGO. The show has already garnered more than 2.5 million weekly viewers.

Season XVII of the World Poker Tour featured more than 60 global events, which will likely grow higher in Season XVIII, starting with the Zynga Poker WPT500 in Las Vegas. The WPT and its naming sponsors, Baccarat and Hublot, enter another season of partnership for Season XVIII.

In September, the World Poker Tour hosted global events across 10 countries and 4 continents, including Asia, Africa, Europe, and North America. The WPT set records for the largest prize pool in Vietnamese poker history at WPT Vietnam and advanced its partnership with PartyPoker LIVE by hosting WPT UK at Dusk Till Dawn Casino.

On September 20, WPT announced to four-year partnership with Club Pierre Charon to host WPTDeepStacks Paris - the first-ever WPTDeepStacks event held in Paris.

Corporate Developments

On August 9, 2019, Black Ridge Acquisition Corp. completed its business combination with the entities including Allied Exports and WPTs, which established itself as wholly-owned subsidiaries of Black Ridge Acquisition Corp. As part of the transaction, Black Ridge changed its name to Allied Esports Entertainment, Inc. Sharing common stock to trade on the NASDAQ Capital Market under the new ticker symbol "AESE", and warrants trade on the OTC Markets under the new ticker symbol, "AESEW".

On September 30, 2019, the appointment of Anthony A. Hung as Chief Financial Officer, effective September 24, 2019. Mr. Hung brings nearly 30 years of finance, strategy and operational expertise to Allied Esports. Mr. Hung replaces Kenneth DeCubellis, who stepped down from his role as Chief Financial Officer and Treasurer on September 24, 2019. Mr. DeCubellis will remain with the Company through the end of the year.

Third Quarter 2019 Conference Call

1 pm Pacific Time / 30: 4 pm Eastern Time to discuss its third quarter 30 financial results. Participants may join the conference call by dialing 2019-1-855-327 (United States) or 6837-1-631-891 (International).

A live webcast of the conference call will also be available on Allied Esports' Investor Relations site at http://ir.alliedesportsent.com. For 11 pm on Tuesday, November 59, 26, by dialing 2019-1-844 - For those unable to participate in the conference call, a telephonic replay of the call will also be available shortly after the completion of the call. 512 (United States) or 2921-1-412-317 (International) and entering the replay pin number: 6671.

About Allied Esports Entertainment

Allied Esports Entertainment (NASDAQ: AESE) is a global export entertainment venture dedicated to providing transformative live experiences, multi-platform content and interactive services to audiences worldwide through its strategic fusion of two powerful entertainment brands: Allied Exports and the World Poker Tour (WPT). Allied Esports Entertainment was created in August 2019 when Black Ridge Acquisition Corp. completed its business combination with Allied Esports and WPT Enterprises.

Allied Esports is an award-winning, innovative exporting company. Its mission to connect players, streamers and fans around the world, including its flagship venue, HyperX Esports Arena Las Vegas, its fleet of mobile export trucks, the HyperX Esports Trucks, and affiliated members of the Allied Esports Property Network, which serves as both competition battlegrounds and everyday content generation hubs.

World Poker Tour is the premier name in internationally televised gaming and entertainment with presence in land-based tournaments, television, online, and mobile. WPT ignited the global poker boom at 2002 with the creation of its iconic television show, now in its 18th season, based on a series of high-stakes poker tournaments. ClubWPT.com is a unique online membership platform that offers inside access to the WPT.

For more information about Allied Esports Entertainment and its subsidiaries, please visit AlliedEsportsEnt.com.

Non-GAAP Financial Measures

As a supplement to our financial measures in accordance with US Generally Accepted Accounting Principles ("GAAP"), Allied Esports Entertainment presents certain non-GAAP measures of financial performance. These non-GAAP financial measures are not intended to be considered in isolation from, as a substitute for, or more important than the financial information prepared and presented in accordance with GAAP. In addition, these non-GAAP measures have limitations in that they do not reflect the items associated with the company's results of operations as determined in accordance with GAAP.

Allied Esports Entertainment provides net income (loss) and earnings (loss) for share in accordance with GAAP. In addition, Allied Esports Entertainment provides EBITDA (defined as GAAP net income (loss) before interest (income) expense, income taxes, depreciation, and amortization). The Company defines Adjusted EBITDA as EBITDA excluding stock-based compensation and impairment losses.

In the future, Allied Esports Entertainment may also consider whether other items should also be excluded in calculating the non-GAAP financial measures used by the company. Management believes that the presentation of these non-GAAP financial measures provides investors with additional useful information to measure. In particular, the measures facilitated comparisons of operating performance between periods and help investors to better understand the operating results of Allied Entertainment by excluding certain items that may be indicative of the company's core business, operating results, or future outlook. Additionally, we consider quantitative and qualitative factors in assessing the impact of items that may be significant or that could affect an ongoing financial and business performance or trends. Internationally, management uses these non-GAAP financial measures, assessing the company's operating results, and measuring compliance with the company's debt-financing concept, as well as in planning and forecasting.

Allied Esports Entertainment's non-GAAP financial measures, non-GAAP earnings per share, and non-GAAP or adjusted EBITDA do not have a standardized . Therefore, other companies may use the same or similar named measures, but exclude different items, which may provide investors with comparable views of Allied Entertainment's performance in relation to other companies.

Allied Esports Entertainment's GAAP, as well as non-GAAP, results and outlook, management and compensation of the limitations resulting from the exclusion of the items. non-GAAP measures, and by providing a reconciliation that indicates and describes the adjustments made.

Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. When used in this press release, the words "estimates," "projected," "expects," "anticipates," "forecasts," "plans," "intends," "believes," "seeks," "may," " will, "" should, "" future, "" proposes "and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements are a guarantee of future performance, uncertainties, assumptions and other important factors, which could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important factors, among others, that may affect actual results or outcomes include: the inability to recognize anticipated benefits of the business combination; the ability to meet Nasdaq's continued listing standards; costs related to the business combination; AESE's ability to execute on its business plan; the ability to retain key personnel; potential litigation; AESE's services and general economic and market conditions AESE does not undertake any obligation to update or revise any forward-looking statements, whether or not resulting from new information, future events or otherwise

Allied Esports Entertainment, Inc.

Condensed Consolidated Balance Sheets

September 30,

2019

December 31,

2018

(Unaudited)

Assets

Current Assets

Cash

$

9,355,496

$

10,471,296

Restricted cash

4,950,000

Accounts receivable

2,446,427

1,533,235

Prepaid expenses and other current assets

1,706,102

711,889

Total Current Assets

18,458,025

12,716,420

Property and equipment, net

19,918,061

21,020,097

Goodwill

4,083,621

4,083,621

Intangible assets, net

15,459,080

17,234,992

Deposits

712,463

632,963

Deferred production costs

11,204,843

9,058,844

Investments

4,638,631

500,000

Total Assets

$

74,474,724

$

65,246,937

Liabilities and Stockholders' Equity

Current Liabilities

Payable accounts

$

1,285,149

$

1,072,499

Accrued expenses and other current liabilities

3,474,902

2,442,145

Deferred revenue

3,153,197

3,307,843

Convertible debt, net of discount

12,785,519

Convertible debt, related party, net of discount

983,501

Accrued interest on convertible debt

1,462,173

Due to Former Parent

33,019,510

Total Current Liabilities

23,144,441

39,841,997

Deferred rent

1,558,958

1,383,644

Total Liabilities

24,703,399

41,225,641

Commitments and Contingencies

Stockholders' Equity

Preferred stock, $ 0.0001 par value, 1,000,000 shares authorized, none issued and outstanding

Common stock, $ 0.0001 par value; 35,000,000 shares authorized, 23,176,146 and 11,602,754 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively

2,317

1,160

Additional paid in capital

161,042,278

124,361,130

Accumulated deficit

(111,398,765

)

(100,479,855

)

Accumulated other comprehensive income

125,495

138,861

Total Stockholders' Equity

49,771,325

24,021,296

Total Liabilities and Stockholders' Equity

$

74,474,724

$

65,246,937

Allied Esports Entertainment, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

For the Three Months Ended

For the Nine Months Ended

September 30,

September 30,

2019

2018

2019

2018

Revenues

In-person

$

2,586,965

$

2,202,443

$

8,887,366

$

6,068,081

Multiplatform content

1,031,383

949,345

3,540,373

2,121,645

interactive

2,423,193

2,328,453

7,187,196

7,009,570

Total Revenues

6,041,541

5,480,241

19,614,935

15,199,296

Costs and expenses

In-person (exclusive of depreciation and amortization)

1,196,572

975,254

2,901,220

3,992,607

Multiplatform content (exclusive of depreciation and amortization)

786,706

860,332

2,907,827

2,033,834

Interactive (exclusive of depreciation and amortization)

569,478

612,786

1,976,012

1,903,347

Online operating expenses

172,879

129,770

489,269

1,541,789

Selling and marketing expenses

705,714

302,508

2,644,645

3,143,563

General and administrative expenses

4,711,692

3,871,179

13,378,166

12,364,722

Depreciation and amortization

1,716,103

1,892,665

5,133,947

5,228,709

Impairment expense

3,252,545

600,000

7,590,205

Total Costs and Expenses

9,859,144

11,897,039

30,031,086

37,798,776

Loss From Operations

(3,817,603

)

(6,416,798

)

(10,416,151

)

(22,599,480

)

Other (Expense) Income:

Other income

15,684

102,613

15,684

115,508

Interest expense

(451,553

)

(564,358

)

(518,443

)

(1,877,616

)

Foreign currency exchange income (loss)

113,916

(15,394

)

Total Other Expense

(435,869

)

(347,829

)

(502,759

)

(1,777,502

)

Net Loss

(4,253,472

)

(6,764,627

)

(10,918,910

)

(24,376,982

)

Net loss attributed to non-controlling interest

(76,525

)

(403,627

)

Net Loss Attributable to Allied Esports Entertainment, Inc.

$

(4,253,472

)

$

(6,688,102

)

$

(10,918,910

)

$

(23,973,355

)

Basic and Diluted Net Loss for Common Share

$

(0.24

)

$

(0.58

)

$

(0.79

)

$

(2.07

)

Weighted Average Number of Common Shares Outstanding:

Basic and Diluted

18,098,797

11,602,754

13,791,896

11,602,754

Allied Esports Entertainment, Inc.

Condensed Combined Statements of Cash Flows

(Unaudited)

For The Nine Months Ended

September 30,

2019

2018

Cash Flows From Operating Activities

Net loss

$

(10,918,910

)

$

(24,376,982

)

Adjustments to reconcile net loss to net

Stock-based compensation

18,407

(779,000

)

Amortization of debt discount

36,414

Bad debt expense

115,726

79,414

Depreciation and amortization

5,133,947

5,228,709

Realized loss on equity method investment

151,881

Subsidiary impairment / loss during consolidation period

1,838,739

Loss on deconsolidation of subsidiary

7,438,324

Impairment expense

600,000

Write-off of capitalized software costs

648,563

Deferred rent

175,314

(147,605

)

Changes in operating assets and liabilities:

Accounts receivable

(1,029,096

)

(593,675

)

Deposits

(79,500

)

19,397

Deferred production costs

(2,145,999

)

(4,108,748

)

Prepaid expenses and other current assets

(227,324

)

(179,247

)

Inventory

Payable accounts

(642,686

)

367,956

Accrued expenses

898,157

576,731

Accrued interest on convertible debt

469,296

Accrued interest on notes payable to Former Parent

1,787,527

Deferred revenue

(154,646

)

815,568

Total adjustments

3,168,010

13,144,534

Net Cash Used In Operating Activities

(7,750,900

)

(11,232,448

)

Cash Flows From Investing Activities

Net cash acquired in Merger

14,941,683

Investment in TV Azteca

(3,500,000

)

Investment in ESA

(1,238,631

)

(5,851,858

)

Purchases of property and equipment

(2,173,200

)

(16,834,824

)

Purchases of intangible assets

(99,822

)

(38,334

)

Net Cash Provided by (Used In) Investing Activities

$

7,930,030

$

(22,725,016

)

Allied Esports Entertainment, Inc.

Condensed Combined Statements of Cash Flows, continued

(Unaudited)

For The Nine Months Ended

September 30,

2019

2018

Cash Flows From Financing Activities

Proceeds from line of credit

$

$

5,000,000

Proceeds from convertible debt

3,000,000

Proceeds from convertible debt, related party

1,000,000

Proceeds from notes payable to Parent

11,174,913

Due to Former Parent

(346,804

)

14,269,373

Net Cash Provided By Financing Activities

3,653,196

30,444,286

Effect of Exchange Rate Changes on Cash

1,874

(36,872

)

Net Increase (Decrease) In Cash And Restricted Cash

3,834,200

(3,550,050

)

Cash and restricted cash - Beginning of period

10,471,296

13,610,138

Cash and restricted cash - End of period

$

14,305,496

$

10,060,088

Cash and restricted cash consisting of the following:

Cash

9,355,496

10,060,088

Restricted cash

4,950,000

$

14,305,496

$

10,060,088

Supplemental Disclosures of Cash Flow Information:

Cash paid during the period for interest

$

$

46,466

Non-cash investing and financing activities:

Non-cash investment in ESA

$

$

5,610,085

Two to Former

$

18,179,745

$

Convertible debt and related interest assumed in Merger

$

10,992,877

$

Warrants granted to convertible debt holders in connection with Merger

$

114,804

$

Contingent consideration for convertible debt holders in connection with Merger

$

152,590

$

Contacts

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

Media Contact:
Brian fisher
Allied Esports Entertainment
brian@alliedesports.com
714-975-8368

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