Allied Gaming & Entertainment issues statement regarding derivative lawsuit

Allied Gaming & Entertainment was alerted earlier this week of a derivative lawsuit filed by Knighted Pastures, against the company’s directors and certain third parties alleging breach of fiduciary duty in connection with approving the recent strategic investment with Yellow River. AGAE‘s directors believe the lawsuit is without merit and plan to vigorously defend against the allegations within it. AGAE issued the following statement: “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.”