Item
10. Directors, Executive Officers and Corporate Governance
CURRENT
DIRECTORS, DIRECTOR NOMINEES AND EXECUTIVE OFFICERS
Our
Board of Directors
Our
Second Amended and Restated Certificate of Incorporation provides for a classified Board of Directors in which directors are divided
into three classes, designated as Class A, Class B and Class C. Each class serves staggered, three-year terms. The terms of office of
our Class A directors will expire at the annual meeting of stockholders to be held in 2023. The terms of office of our Class B directors
will expire at the annual meeting of stockholders to be held in 2024. The terms of office of our Class C directors will expire at the
annual meeting of stockholders to be held in 2025.
Set
forth below are the names and certain information about each of our directors as of April 14, 2023. The information presented includes
each director’s age, principal occupation and business experience for the past five years and the names of other public companies
of which he or she has served as a director during the past five years. In addition, the table contains information about the specific
and particular experience, qualifications, attributes or skills of each director nominee.
Name | |
Director
Class | | |
Positions
and Offices
Held | | |
Director
Since | | |
Director
Term
Expires | | |
Age | |
Lyle
Berman | |
Class
A | | |
Director, Co-Chair | | |
2019 | | |
2023 | | |
81 | |
Yangyang
Li | |
Class
A | | |
Director,
Co-Chair | | |
2021 | | |
2023 | | |
44 | |
Benjamin
Oehler | |
Class
A | | |
Director | | |
2019 | | |
2023 | | |
74 | |
Bradley
Berman | |
Class
B | | |
Director | | |
2019 | | |
2024 | | |
51 | |
Joseph
Lahti | |
Class
B | | |
Director | | |
2019 | | |
2024 | | |
62 | |
Jingsheng
(Jason) Lu | |
Class
B | | |
Director | | |
2021 | | |
2024 | | |
44 | |
Guanzhou
(Jerry) Qin | |
Class
B | | |
Director | | |
2021 | | |
2024 | | |
45 | |
Yinghua
Chen | |
Class
C | | |
Chief
Executive Officer, Director and President | | |
2020 | | |
2026 | | |
43 | |
Yushi Guo | |
Class
C | | |
Director | | |
2022 | | |
2026 | | |
50 | |
Adam Pliska | |
Class
C | | |
Director | | |
2019 | | |
2026 | | |
50 | |
Yuanfei
Qu | |
Class
C | | |
Director
| | |
2022 | | |
2026 | | |
44 | |
Name
of Director and/or
Nominee |
|
Principal
Occupation, Business Experience For the Past Five Years and Directorships of Public Companies |
|
|
CLASS
A |
Lyle
Berman |
|
Lyle
Berman has served as a director of the Company since May 2017 (when the Company at the time of such election was Black Ridge Acquisition
Corp.). Mr. Berman has served as co-Chair of the Company since December 2021. Prior to that time, he served as Chair of the Company
from August 2019-December 2021. In addition to co-Chair of the Company, Mr. Berman is also Vice President, Mergers & Acquisitions.
Mr. Berman served as the Company’s President from November 2021 until February 2022, at which time Mr. Berman was appointed
to serve as the Company’s Interim Chief Executive Officer until September 2022. Mr. Berman has been a director of Sow Good
Inc., f/k/a Black Ridge Oil & Gas, Inc. since October 2016, and is also a director of Golden Entertainment, Inc., Mill City Ventures
III, Ltd., Auego Affinity Marketing, Inc., 52 Gaming, LLC, Redstone American Grill, Inc., LubeZone, Inc., Drake’s Organic Spirits,
LLC, Foxo Technologies and Sow Good, Inc. Since June 1990, Mr. Berman has been the chair and chief executive officer of Berman Consulting
Corporation, a private consulting firm he founded. Mr. Berman began his career with Berman Buckskin, his family’s leather business,
which he helped grow into a major specialty retailer with 27 outlets. After selling Berman Buckskin to W.R. Grace in 1979, Mr. Berman
continued as president and chief executive officer and led the company to become one the country’s largest retail leather chains,
with over 200 stores nationwide. In 1990, Mr. Berman participated in the founding of Grand Casinos, Inc. Mr. Berman is credited as
one of the early visionaries in the development of casinos outside of the traditional gaming markets of Las Vegas and Atlantic City.
In less than five years, the company opened eight casino resorts in four states. In 1994, Mr. Berman financed the initial development
of Rainforest Cafe. He served as the chair and chief executive officer from 1994 unti1 2000. In October 1995, Mr. Berman was honored
with the B’nai B’rith “Great American Traditions Award.” In April 1996, he received the Gaming Executive
of the Year Award; in 2004, Mr. Berman was inducted into the Poker Hall of Fame; and in 2009, he received the Casino Lifetime Achievement
Award from Raving Consulting & Casino Journal. In 1998, Lakes Entertainment, Inc. was formed. In 2002, as chair of the board
and chief executive officer of Lakes Entertainment, Inc., Mr. Berman was instrumental in creating the World Poker Tour. Mr. Berman
served as the executive chair of the board of WPT Enterprises, Inc. (later known as Voyager Oil & Gas, Inc. and Emerald Oil,
Inc.) from its inception in February 2002 until July 2013. Mr. Berman also served as a director of PokerTek, Inc. from January 2005
until October 2014, including serving as chair of the board from January 2005 until October 2011. Mr. Berman has a degree in business
administration from the University of Minnesota. Mr. Berman is the father of Bradley Berman, one of our directors. |
Name
of Director and/or
Nominee |
|
Principal
Occupation, Business Experience For the Past Five Years and Directorships of Public Companies |
Yangyang
Li |
|
Mr.
Li has has served as a director of the Company since March 2021, and as the Company’s co-Chair since December 2021. Mr. Li
is the current Chair and an Executive Director of Ourgame International Holdings Limited (“Ourgame”), the beneficial
owner of Primo Vital Limited, which is the Company’s largest stockholder, beneficially owning approximately 34% of the Company’s
outstanding common stock. Mr. Li received a Bachelor of Business Administration from the University of International Business &
Economics in Beijing, China. In 2001, Mr. Li served as Assistant President to China Great Wall Industry Corporation. In 2003, Mr.
Li founded Business Media China Group (Frankfurt Stock Exchange: BMC) and served as its CEO in 2005, with a market value at the time
in excess of 5 billion RMB. Mr. Li served as Chair of the Board of Directors of Elephant Media Group in 2008. Since 2014, he has
served as Chair of the Board of Directors of World Business Services Union and Choi Shun Investment. |
Benjamin
Oehler |
|
Benjamin
S. Oehler has served as a director of the Company since May 2017 (when the Company at the time of such election was Black Ridge Acquisition
Corp.). Mr. Oehler has been director of Sow Good Inc., f/k/a Black Ridge Oil & Gas, Inc., since November 2010, and chair of its
audit committee and compensation committee since February 2011. Mr. Oehler is a Founding Partner of Windward Mark, LLC which advises
business owners with regard to strategic planning, owner governance and education, business continuity, legacy, philanthropy and
liquidity. Windward Mark LLC is a continuation of Mr. Oehler’s consulting practice at Bashaw Group. Inc. (2007 to 2017) and
Linea Capital, LLC (2009 to 2017). From 1999 to 2007, Mr. Oehler was the president and chief executive officer of Waycrosse, Inc.,
a financial advisory firm for the family owners of Cargill Incorporated. While at Waycrosse, Mr. Oehler was the primary advisor to
the five family members who were serving on the Cargill Incorporated board of directors from 1999 to 2006. Mr. Oehler played a key
role in two major growth initiatives for Cargill: the merger of Cargill’s fertilizer business into a public company which is
now Mosaic, Inc., and the transformation of Cargill’s proprietary financial markets trading group into two major investment
management companies: Black River Asset Management, LLC and CarVal Investors, LLC. An investment banker for 20 years, Mr. Oehler’s
transaction experience includes public offerings and private placements of debt and equity securities, mergers and acquisitions,
fairness opinions and valuations of private companies. Prior to joining Waycrosse, Mr. Oehler was an investment banker for Piper
Jaffray. By the time he left Piper Jaffray in 1999, he was group head for Piper Jaffray’s Industrial Growth Team. He has also
played a leadership role in a number of corporate buy-outs and venture stage companies, served on corporate and non-profit boards
of directors, and has been involved in the creation and oversight of foundations and charitable organizations, as well as U.S. trusts
and off-shore entities.
|
Name of Director and/or
Nominee
| | Principal
Occupation, Business Experience For the Past Five Years and Directorships of Public Companies |
|
|
|
|
|
Mr.
Oehler has been a Board member and/or founder of many non-profit organizations including the Minnesota Zoological Society, Minnesota
Landscape Arboretum, The Lake Country Land School, Greencastle Tropical Study Center, Park Nicollet Institute, Afton Historical Society
Press, United Theological Seminary and University of Minnesota Investment Advisor, Inc. He has been a director of Waycrosse, Inc.,
WayTrust Inc., Dain Equity Partners, Inc., Time Management, Inc., BioNIR, Inc. and Agricultural Solutions, Inc. In September 2007,
Mr. Oehler completed the Stanford University Law School Directors Forum, a three-day update on key issues facing corporate directors
presented by the Stanford Business School and Stanford Law School. From 1984 through 1999, Mr. Oehler was registered with the National
Association of Securities Dealers as a financial principal. Mr. Oehler is a graduate of the University of Minnesota College of Liberal
Arts and has completed all course work at the University of Minnesota Business School with a concentration in finance. |
|
|
CLASS
B |
Bradley
Berman |
|
Bradley
Berman has served as a director of the Company since May 2017 (when the Company at the time of such election was Black Ridge Acquisition
Corp.). He has been the Chair of Black Ridge Oil & Gas, Inc. since November 2010 and has served as a director of Black Ridge
Oil & Gas, Inc. since its inception in April 2010. He was the chief executive officer of Black Ridge Oil & Gas, Inc. from
November 2010 to November 2011, its chief financial officer between November 12, 2010 and November 15, 2010, and its corporate secretary
from November 2010 to February 2011. Mr. Berman is the president of King Show Games, Inc., a company he founded in 1998. Mr. Berman
has worked in various capacities in casino gaming from 1992 to 2004 for Grand Casinos, Inc. and then Lakes Entertainment, Inc., achieving
the position of Vice President of Gaming, after which he assumed a lesser role in that company. Mr. Berman was a director of Voyager
Oil and Gas, Inc. (formerly Ante4 and WPT) from August 2004 to November 2010. Mr. Berman is the son of Lyle Berman, the Chair of
the Board of Directors for Allied Gaming & Entertainment. |
Joseph
Lahti |
|
Joseph
Lahti has served as a director of the Company since May 2017 (when the Company at the time of such election was Black Ridge Acquisition
Corp.). Mr. Lahti has been a director of Sow Good, Inc., f/k/a Black Ridge Oil & Gas, Inc., since August 2012. Mr. Lahti is a
Minneapolis native and leader in numerous Minnesota business and community organizations. As principal of JL Holdings since 1989,
Mr. Lahti has provided funding and management leadership to several early-stage or distressed companies. From 1993 to 2002, he held
the positions of chief operating officer, chief financial officer, president, chief executive officer and chair at Shuffle Master,
Inc., a company that provided innovative products to the gaming industry. Mr. Lahti served as a director of PokerTek, Inc., a publicly
traded company, from 2008 until it was sold in October 2014 (including serving as chair of the board from 2012 to 2014), and has
since 2018 has been an independent director and chair of the board of Innealta Capital and Acclivity Capital, investment managers.
In 2021, Mr. Lahti was named chair of an early stage company which has created a financial services marketplace for Latin America.
Mr. Lahti also served as chair of AF Holdings, Inc, an asset manager, until its sale in October 2018 and remains as CEO of the surviving
shareholder representative company until the earn out period ends in 2023. Previously, Mr. Lahti also served on the board of directors
of Voyager Oil & Gas, Inc. and Zomax, Inc., and served as the chair of the board of directors of Shuffle Master, Inc. Through
his public company board experience, he has participated on, and chaired, both audit and compensation committees. Mr. Lahti has a
Bachelor of Arts degree in Economics from Harvard College. |
Name of Director and/or
Nominee
| | Principal Occupation, Business Experience For the Past Five Years and Directorships
of Public Companies |
Jingsheng
(Jason) Lu |
|
Jingsheng
(Jason) Lu has served as a director of the Company since April 2021. Mr. Lu is the current Chief Executive Officer and Executive
Director of Ourgame and served as an independent director of Ourgame from June 2020 to April 2021. Prior to that, he served as a
director of Zhejiang Xiangyuan Culture Co., Ltd.,(“Xiangyuan Culture”), which is a main board listed company in China
(Code in Shanghai Stock Exchange: 600576). From 2015 to 2017, he served as co-CEO of Xiamen Xtone Animation Co., Ltd., (“Xtone”),
and led the merger of Xtone by Xiangyuan Culture in 2014. He also served as CFO of Beijing International Advertising & Communication
Group from 2018 to 2019. He previously served as a senior audit manager at Deloitte China for six years, and at Deloitte US for two
years from 2001 to 2010. He is currently a non-practicing certified public accountant in China since 2007, as well as a member of
the American Institute of Certified Public Accountants since 2009. He holds a Bachelor of Economics degree from University of International
Business and Economics in Beijing, China. |
Guanzhou
(Jerry) Qin |
|
Jerry
Qin has served as a director of the Company since 2021. Mr. Qin brings strong management skills from Fortune 500 companies, hands-on
experiences in high-tech startups, and deep experience in finance and accounting. Mr. Qin has served as Finance Director of Content
Business at Tencent since February 2020, and served as the Head of Finance at Aibee Inc., a top artificial-intelligence start-up,
from September 2018-February 2020. Mr. Qin also served as the Senior Finance Director of the APAC (China, Japan, India and others)
for TripAdvisor (Nasdaq: TRIP) from June 2017-August 2018. Mr. Qin also served at the Chief Financial Officer of Glu Mobile, a top
mobile game developer, and as a consultant for Andersen/PWC. Mr. Qin received an International MBA from Peking University & Fordham
University in 2008 and a Bachelor of Economics, University of International Business & Economics in 2001. |
Name
of Director and/or
Nominee |
|
Principal Occupation, Business Experience For the Past Five Years and Directorships
of Public Companies
|
|
|
CLASS
C |
Yinghua
Chen |
|
Yinghua
Chen has as served a director since 2020, has served as President since February 2022, and currently serves as the Company’s
Chief Executive Officer since September 2022. Prior to this, Ms. Chen served as the Company’s Chief Investment Officer from
November 2021 until September 2022 and Board Secretary from February 2022 until September 2022. Ms. Chen is a Co-Founder of Aupera
Technologies, a leading video AI technology company, where she is responsible for corporate financing, business development, and
strategic partnership. She has successfully raised multiple rounds of funding for Aupera, including from Silicon Valley giant Xilinx
(Nasdaq: XLNX). Prior to this, she served as the Executive Vice President of Anthill Resources, a natural resources investment company
in Canada, where she oversaw business operations and investment activities. Ms. Chen is also the former Managing Director of China
for The Cavendish Group, a UK B2B media and public relations company. In that role, Ms. Chen built up subscriber networks for over
ten vertical industry media products and managed the Group’s strategic relationship with the Boyao Forum for Asia. Ms. Chen
was also part of the founding team of The Balloch Group, a boutique investment banking firm, later acquired by Canaccord Genuity,
where she specialized in financial, pharmaceutical, resources and media industry transactions. Ms. Chen holds an EMBA from the University
of Paris I: Panthéon-Sorbonne and a Bachelor of Arts degree from the University of International Business and Economics. |
Yushi
Guo |
|
Yushi
Guo was appointed as a director of the Company in February 2022. Mr. Guo currently serves as an independent non-executive director
of Ourgame International Holdings Limited. He has broad experience in management consulting, board advisory and entrepreneurship.
He is the founder and CEO of PanoSoar Management Technology Co., Ltd, a company that builds technological platforms for small and
medium-sized businesses. In 2011, Mr. Guo founded Beijing Panorfinity Consulting Co., Ltd., which offers management consulting, board
advisory and executive search services. Prior to founding Beijing Panorfinity Consulting Co., Ltd., Mr. Guo served at a client partner
at Korn Ferry International from 2009 – 2011 and Gallup Consulting from 2003 – 2009. Mr. Guo holds a Master of Science
in Ecology and Bachelor of Science from Beijing Forestry University, and Master of Business Administration from Emory University. |
Adam
Pliska |
|
Adam
Pliska has served as a director since August 2019, and served as the Company’s President from August 2019 until July 2021,
when the Company sold the World Poker Tour. He has been with the World Poker Tour since 2003. As President and CEO of WPT, Mr. Pliska
has overseen the entire WPT business portfolio, including but not limited to live events, online services, televised broadcasts,
and WPT office personnel in Los Angeles, London and Beijing. He is one of the longest serving executives in the poker industry and
was named the American Poker Awards Industry Person of the Year for 2014. Under his watch, the WPT has witnessed massive global growth
from 14 events to over 60 worldwide on 6 continents, has maintained historic ratings of one of the longest running television shows
in US history and has awarded more than a billion dollars over its 18 years. In addition to his position as CEO, Mr. Pliska serves
as Executive Producer of the World Poker Tour television show and is the co-writer of the WPT Theme song Rise Above. Mr. Pliska holds
a B.A. from the University of Southern California’s School of Cinematic Arts and a J.D. from the University of California,
Berkeley’s Law School, Boalt Hall.
|
Name of Director and/or
Nominee
| | Principal Occupation, Business Experience For the Past Five Years and Directorships
of Public Companies |
|
|
|
|
|
From
November 2000 to June 2002, Mr. Pliska served as the Vice-President of Legal and Business
Affairs and eventually General Counsel for Anticipa, LLC, a multi-media company headed by
the futurist, Alvin Toffler, a Telmex Corporation. In addition, Mr. Pliska served as an associate
at the law firm of Sonnenschein, Nath & Rosenthal in Los Angeles from July 1999 to November
2000, where he worked on various litigation and intellectual property matters. Before his
legal career, Mr. Pliska worked as a television producer in connection with noted industry
veteran Al Burton, including work at Universal Television and Castle Rock Entertainment where
he produced and developed numerous television properties. Mr. Pliska contributed and worked
on various programs including The New Lassie, Baywatch, Out of the Blue, and shares an Emmy
Award for his contributions to television creative development. While at Berkeley Law, he
worked as a research assistant to Professor John Yoo and was an extern to the 9th Circuit
Court of Appeals for the Judge Alex Kozinski and at the Governor’s Office of Legal
Affairs in the state of California for then Governor Pete Wilson.
|
|
|
He
has served as a mentor of the Tiger Wood’s Foundation Earl Woods Scholar program, is a member of the Pacific Council, a director
of the WPT Foundation and on the board of the GOCAT (Greater Orange County Community Arts Theater). Mr. Pliska holds a B.A. from
the University of Southern California’s School of Cinematic Arts and a J.D. from the University of California, Berkeley’s
Law School, Boalt Hall. |
Yuanfei
(Cliff) Qu |
|
Yuanfei
(Cliff) Qu has served as a director of the Company since 2022. Since July 2020, he has served as Vice President of Ourgame International
Holdings Limited, responsible for new investment and portfolio management. In June 2020, Mr. Qu founded Sansokuu Limited (Japan)
to develop new UAV markets in other Asian countries. Prior to that, from 2018, he focused on the investment of civil use of unmanned
aerial vehicles (“UAVs”), providing services like plant protection and UAV training qualification from AOPA-China, the
only test center in southwest China. Mr. Qu established Beijing Sansokuu Consulting Company in 2009, providing consulting service
for different businesses including exhibition, advertising, TMT, pawnshop, taxi, and wine. From 2004, Mr. Qu joined Macro Link Group
Ltd and led acquisition transactions for Shanghai Stock Exchange listed company, Tonghua Grape Wine (SH 600365) as well as a reverse
takeover transaction for a Hong Kong Exchange listed company, New Silkroad (HK 00472).
|
|
|
Mr.
Qu received his Bachelor’s degree in 2001 from the University of International Business and Economics, majoring in marketing,
and a Master of Commerce degree in 2003 from the University of Sydney, where he majored in Finance and Banking. |
The
following table sets forth certain information concerning our executive officers as of April 14, 2023.
Name |
|
Position(s) |
|
Age |
Yinghua
Chen |
|
Chief
Executive Officer |
|
43 |
Lyle
Berman |
|
Vice
President, Mergers & Acquisitions |
|
81 |
Roy
L. Anderson |
|
Chief
Financial Officer |
|
64 |
Yinghua
Chen
Chief Executive Officer |
Ms.
Chen’s biography is included above under the section titled “Our Board of Directors.” |
Lyle
Berman
Vice
President, Mergers & Acquisitions |
Mr.
Berman’s biography is included above under the section titled “Our Board of Directors.” |
Roy
L. Anderson
Chief Financial Officer |
Roy
L. Anderson has served as the Company’s Chief Financial Officer since October 2021. Mr. Anderson is a senior finance executive
with deep expertise and experience in financial management and reporting, accounting, internal controls, and risk management. With
a focus on Technology, Media and Telecommunications, he has been a strategic and trusted advisor to CEOs, Senior Executives, Board
of Directors, and investors in these industries. From May 2005 to October 2021, Mr. Anderson was a partner with Mazars USA, an independent
member firm of Mazars Group, an international accounting firm servicing clients in over 90 countries worldwide. In this role, Mr.
Anderson worked closely with the top executives and investors of companies in the Technology, Media and Telecommunications (TMT)
markets ranging from start-ups to companies with multinational/divisional components and revenues in excess of $500 million. As an
audit, tax and advisory partner in the TMT Group of Mazars, Mr. Anderson’s clients included companies engaged in online media
(B2B and B2C), entertainment, gaming, events, trade shows, digital marketing/advertising, SaaS, eCommerce, AI, lead generation, Tech-enabled
services, cybersecurity, and software development. In addition, Mr. Anderson was a key member of Mazars’ SEC Practice Group.
For the last several years, Mr. Anderson has been an invited speaker at key media and technology industry conferences, and presented
educational webcasts on various technical issues including revenue recognition, share based compensation, and business combinations.
A certified public accountant (CPA), he holds a Bachelor of Science degree from Long Island University’s School of Professional
Accountancy. |
Family
Relationships
Mr.
Bradley Berman, one of our directors, is the son of Mr. Lyle Berman, one of our directors. There are no other family relationships between
any of the other directors or executive officers. Mr. Bradley Berman will not stand for reelection to the Board, and as such there will
be no family relationships between any of the directors or executive officers after the annual meeting.
Board
Diversity Matrix
In
compliance with Nasdaq Rules 5605(f) and 5606, the Board has self-reported the diversity characteristics summarized in the table below.
Board
Diversity Matrix (as of April 14, 2023)
Total Number of Directors |
|
|
11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Part I: Gender Identity |
|
|
Female |
|
|
|
Male |
|
|
|
Nonbinary |
|
|
|
Did Not Disclose |
|
|
|
|
1 |
|
|
|
10 |
|
|
|
— |
|
|
|
— |
|
Part II: Demographic Background |
|
|
Asian |
|
|
|
White |
|
|
|
|
|
|
|
|
|
|
|
|
6 |
|
|
|
5 |
|
|
|
— |
|
|
|
— |
|
Independence
of Directors
When
considering whether directors have the experience, qualifications, attributes and skills to enable the Board of Directors to satisfy
its oversight responsibilities effectively in light of our business and structure, our Board of Directors focuses primarily on the information
discussed in each of the directors’ individual biographies set forth above.
Nasdaq
listing standards require that a majority of our Board of Directors be “independent directors” as defined by The Nasdaq Marketplace
Rules. We currently have seven “independent directors”: Yushi Guo, Yuanfei (Cliff) Qu, Joseph Lahti, Yangyang Li, Jingsheng
(Jason) Lu, Benjamin Oehler, and Guanzhou (Jerry) Qin.
Board
Leadership Structure and Risk Oversight
Lyle
Berman and Yangyang Li currently serve as co-Chairs of our Board of Directors. We believe that this allow us to maintain an independent
Chair of the Board who oversees, among other things, communications and relations between our Board of Directors and senior management,
consideration by our Board of Directors of the company’s strategies and policies, and the evaluation of our principal executive
officers by our Board of Directors. However, the Board may decide in the future that the co-Chair structure may not be the most efficient
method to provide board leadership and oversight and may determine that a single Chair is the best structure.
Meetings
and Committees of the Board of Directors
During
the fiscal year ended December 31, 2022, the Board of Directors held 9 meetings. We expect our directors to attend all Board meetings
and any meetings of committees of which they are members and to spend the time needed and meet as frequently as necessary to properly
discharge their responsibilities. Although we do not have any formal policy regarding director attendance at stockholder meetings, we
attempt to schedule meetings so that all directors can attend.
We
have a separately standing Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee, each of which is
comprised of independent directors. Each of the Company’s committees has a separately adopted charter which is available on the
Company’s website at ir.alliedesportsent.com.
Audit
Committee
Our
audit committee currently consists of Benjamin S. Oehler (Chair), Guanzhou (Jerry) Qin, Yushi Guo, Joseph Lahti, and Jingsheng (Jason)
Lu. Benjamin S. Oehler currently serves as Chair.
The
Audit Committee will, at all times, be composed exclusively of “independent directors,” as defined for Audit Committee members
under the Nasdaq listing standards and the rules and regulations of the SEC, who are “financially literate,” as defined under
Nasdaq’s listing standards. Nasdaq’s listing standards define “financially literate” as being able to read and
understand fundamental financial statements, including a company’s balance sheet, income statement and cash flow statement. In
addition, we must certify to Nasdaq that the committee has, and will continue to have, at least one member who has past employment experience
in finance or accounting, requisite professional certification in accounting, or other comparable experience or background that results
in the individual’s financial sophistication. The Board of Directors has determined that each member of the Audit Committee satisfies
Nasdaq’s definition of financial sophistication and that Jingsheng (Jason) Lu qualifies as an “Audit Committee financial
expert” as defined under rules and regulations of the SEC.
Pursuant
to our Audit Committee charter, responsibilities of the Audit Committee include:
| ● | reviewing
and discussing with management and the independent auditor the annual audited financial statements,
and recommending to the board whether the audited financial statements should be included
in our Form 10-K; |
| ● | discussing
with management and the independent auditor significant financial reporting issues and judgments
made in connection with the preparation of our financial statements; |
| ● | discussing
with management major risk assessment and risk management policies; |
| ● | monitoring
the independence of our independent auditor; |
| ● | verifying
the rotation of the lead (or coordinating) audit partner having primary responsibility for
the audit and the audit partner responsible for reviewing the audit as required by law; |
| ● | reviewing
and approving all related-party transactions; |
| ● | inquiring
and discussing with management our compliance with applicable laws and regulations; |
| ● | pre-approving
all audit services and permitted non-audit services to be performed by our independent auditor,
including the fees and terms of the services to be performed; |
| ● | appointing
or replacing the independent auditor; |
| ● | determining
the compensation and oversight of the work of the independent auditor (including resolution
of disagreements between management and the independent auditor regarding financial reporting)
for the purpose of preparing or issuing an audit report or related work; |
| ● | establishing
procedures for the receipt, retention and treatment of complaints received by us regarding
accounting, internal accounting controls or reports which raise material issues regarding
our financial statements or accounting policies; and |
| ● | approving
reimbursement of expenses incurred by our management team in identifying potential target
businesses. |
Compensation
Committee
Our
compensation committee currently consists of Yushi Guo (Chair), Yuanfei Qu, and Yangyang Li.
Each
of the members of the Compensation Committee is independent under the applicable Nasdaq listing standards. The Compensation Committee
has a written charter. The Compensation Committee’s duties, which are specified in the Compensation Committee charter, include,
but are not limited to:
| ● | reviewing
and approving on an annual basis the corporate goals and objectives relevant to the Company’s
Chief Executive Officer’s compensation, evaluating the Company’s Chief Executive
Officer’s performance in light of such goals and objectives and determining and approving
the remuneration (if any) of the Company’s Chief Executive Officer’s based on
such evaluation; |
| ● | reviewing
and approving the compensation of all of our other executive officers; |
| ● | reviewing
our executive compensation policies and plans; |
| ● | implementing
and administering our incentive compensation equity-based remuneration plans; |
| ● | assisting
management in complying with our proxy statement and annual report disclosure requirements; |
| ● | approving
all special perquisites, special cash payments, and other special compensation and benefit
arrangements for our executive officers and employees; |
| ● | if
required, producing a report on executive compensation to be included in our annual proxy
statement; and |
| ● | reviewing,
evaluating, and recommending changes, if appropriate, to the remuneration for directors. |
Nominating
and Corporate Governance Committee
Yangyang
Li (Chair), Joseph Lahti, Jingsheng (Jason) Lu, and Guanzhou (Jerry) Qin currently serve as members of our nominating and corporate governance
committee. Mssrs. Li, Lahti, Lu, and Qin are independent under the applicable Nasdaq listing standards. The nominating and corporate
governance committee has a written charter. The nominating and corporate governance committee is responsible for overseeing the selection
of persons to be nominated to serve on our Board of Directors.
Guidelines
for Selecting Director Nominees
The
guidelines for selecting nominees, which are specified in the Nominating and Corporate Governance Committee charter, generally provide
that persons to be nominated:
| ● | should
have demonstrated notable or significant achievements in business, education or public service; |
| ● | should
possess the requisite intelligence, education and experience to make a significant contribution
to the board of directors and bring a range of skills, diverse perspectives and backgrounds
to its deliberations; and |
| ● | should
have the highest ethical standards, a strong sense of professionalism and intense dedication
to serving the interests of the stockholders. |
The
Nominating and Corporate Governance Committee will consider a number of qualifications relating to management and leadership experience,
background and integrity and professionalism in evaluating a person’s candidacy for membership on the board of directors. The Nominating
and Corporate Governance Committee may require certain skills or attributes, such as financial or accounting experience, to meet specific
board needs that arise from time to time and will also consider the overall experience and makeup of its members to obtain a broad and
diverse mix of board members. The Nominating and Corporate Governance Committee does not distinguish among nominees recommended by stockholders
and other persons.
Our
Nominating and Corporate Governance Committee will consider recommendations by stockholders of candidates for election to the Board of
Directors. Any stockholder who wishes that the Nominating and Corporate Governance Committee consider a candidate must follow the procedures
set forth in our bylaws. Under our bylaws, if a stockholder plans to nominate a person as a director at a meeting, the stockholder is
required to place a proposed director’s name in nomination by written request delivered to or mailed and received at our principal
executive offices not less than 60 days nor more than 90 days prior to the meeting; provided however, that in the event that less
than 70 days’ notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder,
to be timely, must be received no later than the close of business on the 10th day following the day on which such notice
of the date of the meeting was mailed or such public disclosure was made, whichever first occurs. A stockholder’s nomination must
also satisfy the substantive requirements set forth in our bylaws.
Availability
of Corporate Governance Information
Our
Audit, Compensation, and Nominating and Governance Committees operating under the charters adopted by the Board that describe the authority
and responsibilities delegated to the committees by our Board. Our Board has adopted a Code of Business Conduct & Ethics that applies
to the Company, its subsidiaries, and all of our employees, including our executive officers and directors. We post on our website, at
www.alliedgaming.gg under the “Investors—Governance” tab, the charters of our Audit Committee, Compensation
Committee, and Nominating Committee, and the Code of Business Conduct & Ethics referenced above. A copy of the Code of Business Conduct
& Ethics has been provided to each of our executive officers and members of the Board. We intend to disclose any amendments to our
Code of Business Conduct & Ethics, or any waivers of its requirements, on our website to the extent required by applicable SEC or
Nasdaq rules. The inclusion of our website address in this Form 10-K/A does not include or incorporate by reference the information on
or accessible through our website into this Form 10-K/A. These documents are also available in print to any stockholder requesting a
copy in writing from our Secretary at Allied Gaming & Entertainment Inc. 745 Fifth Avenue, Suite 500 New York, NY 10151.
Ability
of Stockholders to Communicate with our Board of Directors
Our
Board of Directors has established several means for stockholders and others to communicate with our Board of Directors. If a stockholder
has a concern regarding our financial statements, accounting practices or internal controls, the concern should be submitted in writing
to the Chair of our Audit Committee in care of our Secretary at the address of our principal executive offices. If the concern relates
to our governance practices, business ethics or corporate conduct, the concern should be submitted in writing to the co-Chairs of the
Board of Directors in care of our Secretary at the address of our principal executive offices. If a stockholder wishes to provide input
with respect to our executive compensation policies and programs, input should be submitted in writing to the Chair of our Compensation
Committee in care of our Secretary at the address of our principal executive offices. If a stockholder is unsure as to which category
the concern relates, the stockholder may communicate it to any one of the independent directors in care of our Secretary at the address
of our principal executive offices. All stockholder communications sent in care of our Company Secretary will be forwarded promptly to
the applicable director(s).
Item
11. Executive Compensation
EXECUTIVE
AND DIRECTOR COMPENSATION
The
following tables set forth information regarding compensation for services rendered in all capacities to the Company and its subsidiaries
for the fiscal years ended December 31, 2021 and December 31, 2022 by the Company’s Chief Executive Officer and two other individuals
who served in such capacity during fiscal year 2022, the Company’s Chief Financial Officer, the Company’s one other executive
officer whose total compensation for the 2022 fiscal year was in excess of $100,000 and who was serving as an executive officer at the
end of the 2022 fiscal year, and one former executive officer whose employment terminated on October 26, 2022 and is included based on
total compensation for fiscal year 2022 under SEC rules. The listed individuals are herein referred to as the “named executive
officers.”
Summary
Compensation Table
Name
and principal position | |
Year
(b) | | |
Salary
($) | | |
Bonus
($) | | |
Stock
Awards ($) |
| | |
Option
Awards ($) |
| | |
Nonequity
incentive plan compensation ($) | | |
Nonqualified
deferred compensation earnings ($) (h) | | |
All
other compensation ($) |
| | |
Total
($) | |
Yinghua
Chen(1) | |
| 2022 | | |
| 244,110 | (2) | |
| — | | |
| — |
| | |
| — |
| | |
| — | | |
| — | | |
| 4,851 |
(3) | | |
| 248,961 | |
President,
Chief Executive Officer | |
| 2021 | | |
| — | | |
| — | | |
| — |
| | |
| — |
| | |
| — | | |
| — | | |
| 64,120 |
| | |
| 64,120 | |
| |
| | | |
| | | |
| | | |
| |
| | |
| |
| | |
| | | |
| | | |
| |
| | |
| | |
Lyle
Berman(4) | |
| 2022 | | |
| 210,458 | (5) | |
| — | | |
| — |
| | |
| — |
| | |
| — | | |
| — | | |
| 5,685 |
(3) | | |
| 216,143 | |
Vice
President, Mergers & Acquisitions Former Interim Chief Executive Officer | |
| 2021 | | |
| — | | |
| — | | |
| — |
| | |
| — |
| | |
| — | | |
| — | | |
| 65,786 |
| | |
| 65,786 | |
| |
| | | |
| | | |
| | | |
| |
| | |
| |
| | |
| | | |
| | | |
| |
| | |
| | |
Libing
(Claire) Wu(6) | |
| 2022 | | |
| 67,308 | | |
| — | | |
| 142,400 |
(7) | | |
| 200,383 |
(8) | | |
| — | | |
| — | | |
| 790,759 |
(9) | | |
| 1,200,850 | |
Former
Chief Executive Officer | |
| 2021 | | |
| 234,848 | | |
| 200,000 | | |
| 160,000 |
(7) | | |
| 239,354 |
(8) | | |
| — | | |
| — | | |
| 35,182 |
| | |
| 869,384 | |
| |
| | | |
| | | |
| | | |
| |
| | |
| |
| | |
| | | |
| | | |
| |
| | |
| | |
Roy
Anderson(10) | |
| 2022 | | |
| 285,000 | | |
| — | | |
| — |
| | |
| — |
| | |
| — | | |
| — | | |
| — |
| | |
| 285,000 | |
Chief
Financial Officer, Secretary | |
| 2021 | | |
| 63,333 | | |
| — | | |
| — |
| | |
| — |
| | |
| — | | |
| — | | |
| — |
| | |
| 63,333 | |
| |
| | | |
| | | |
| | | |
| |
| | |
| |
| | |
| | | |
| | | |
| |
| | |
| | |
Judson Hannigan(11) | |
| 2022 | | |
| 233,542 | | |
| — | | |
| — |
| | |
| — |
| | |
| — | | |
| — | | |
| 34,529 |
(12) | | |
| 268,071 | |
Former
Chief Executive Officer of Allied Esports | |
| 2021 | | |
| 285,000 | | |
| 114,000 | | |
| — |
| | |
| — |
| | |
| — | | |
| — | | |
| 48,417 |
| | |
| 447,417 | |
| (1) | Ms.
Chen was appointed the Chief Executive Officer of the Company on September 6, 2022. She had served as the Company’s President and
Secretary from February 18, 2022. Ms. Chen has served as a member of the Board since 2020. |
| (2) | Ms.
Chen’s salary includes her salary at $275,000 established upon her appointment as President
and Secretary of the Company and $300,000 upon her appointment as Chief Executive Officer
of the Company. |
| (3) | Represents
compensation earned for service on the Board of Directors prior to February 18, 2022. |
| (4) | Mr.
Berman was appointed Interim Chief Executive Officer of the Company on February 18, 2022.
On September 6, 2022, his position was changed to Vice President, Mergers & Acquisitions.
Mr. Berman has served as a member of the Board since 2017. |
| (5) | Mr.
Berman’s salary includes his salary at $300,000 established upon his appointment as
Interim Chief Executive Officer of the Company and $150,000 following his appointment as
Vice President, Mergers & Acquisitions. |
| (6) | Ms.
Wu was appointed as Chief Executive Officer of the Company on July 13, 2021; her employment
terminated on February 18, 2022. Ms. Wu continued to serve as a member of the Board until
July 13, 2022. |
| (7) | The
dollar amount reported for 2021 represents the aggregate grant-date fair value of the award
of 80,000 shares of restricted stock granted on July 13, 2021, calculated in accordance with
FASB ASC Topic 718, without taking into account any estimated forfeitures related to service-vesting
conditions. Assumptions used in the calculation of these amounts are included in Note 13,
“Stockholders Equity,” to our audited consolidated financial statements for the
fiscal year ended December 31, 2021 included in our Annual Report on Form 10-K. The dollar
amount reported for 2022 represents the incremental fair value of the award resulting from
the accelerated vesting of the award upon Ms. Wu’s termination as more fully described
in the section below titled “Libing (Claire) Wu Employment Agreement”. |
| (8) | The
dollar amount reported for 2021 represents the aggregate grant-date fair value of the 40,000-share
option granted on May 6, 2021 and the 200,000-share option granted on July 13, 2021, calculated
in accordance with FASB ASC Topic 718, without taking into account any estimated forfeitures
related to service-vesting conditions. Assumptions used in the calculation of these amounts
are included in Note 13, “Stockholders Equity,” to our audited consolidated financial
statements for the fiscal year ended December 31, 2021 included in our Annual Report on Form
10-K. The dollar amount reported for 2022 represents the incremental fair value of the 200,000-share
option resulting from the acceleration of the option and extension of the post-service option
exercise period in connection with Ms. Wu’s termination as more fully described in
the section below titled “Libing (Claire) Wu Employment Agreement”. |
| (9) | The
reported amount is comprised of the following: (a) cash severance payment in accordance with
Ms. Wu’s employment agreement in the amount of $750,000 payable in 18 equal monthly
installments with the first payment commencing on March 15, 2022 (of which $416,667 was paid
in 2022), (b) $22,783 for accrued vacation in connection with Ms. Wu’s termination
and (c) $17,976 for service on the Board of Directors between February 18, 2022 and July
13, 2022. In connection with her termination, the vesting of her 80,000-share restricted
stock award and 200,000-share option granted in 2021 was accelerated and the post-service
exercise period of her option was extended. The incremental fair value of the acceleration
and extension are reported in this table for 2022 in the columns titled Stock Awards and
Option Awards, respectively. The fair market value per share of Company common stock on December
31, 2022 was $1.05 which was lower than the $2.21 per share exercise price of the option;
accordingly, the intrinsic value of the option was zero. The value of the shares subject
to the restricted stock award (that were fully vested) as of December 31, 2022 was $ $50,991
which is less than the incremental fair value reported for the acceleration in the Stock
Awards column. |
| (10) | Mr.
Anderson was appointed Chief Financial Officer of the Company on October 11, 2021. |
| (11) | Mr.
Hannigan’s employment terminated on October 26, 2022. |
| (12) | Represents
payment of accrued vacation in connection with Mr. Hannigan’s termination. |
Employment
Arrangements
The
Company does not have employment agreements with any of its current executive officers. The compensation for our executive officers is
set by the compensation committee and for 2022 was comprised of base salary and discretionary bonus based on the Compensation Committee’s
assessment of the Company’s financial performance and progress in achieving its objectives in 2022. In March 2023, the compensation
committee determined that no bonus should be awarded to any executive officers based on such assessment. Ms. Chen’s base salary
was set at $300,000 effective with her appointment as the Company chief executive officer. Mr. Berman’s base salary was set at
$300,000 upon his appointment as Interim Chief Executive Officer of the Company and $150,000 following his appointment as Vice President,
Mergers & Acquisitions. Mr. Anderson’s base salary was set at $285,000. Mr. Hannigan’s base salary was set at $285,000.
The Company had previously entered into an employment agreement with Ms. Wu which is summarized below.
Libing
(Claire) Wu Employment and Separation Agreement
In
connection with the Company’s appointment of Libing (Claire) Wu as Chief Executive Officer of the Company on July 13, 2021, the
Company entered into an employment agreement with Ms. Wu that provided for, among other things, payment to Ms. Wu of an annual base salary
equal to $500,000, subject to cost-of-living adjustments applicable to Company employee salaries from time to time. Ms. Wu was eligible
to receive an annual incentive bonus of up to 60% of her annual salary, determined at the discretion of the Board of Directors and subject
to the attainment of certain Board objectives. She was also granted an option to purchase 200,000 shares of Company common stock at a
per share exercise price of $2.21 vesting in 4 equal annual installments commencing on the one-year anniversary of the July 13, 2021
grant date and 80,000 shares of restricted stock vesting on August 16, 2022. Under her employment agreement, if Ms. Wu’s employment
was terminated by the Company for any reason other than Cause (as defined in the employment agreement), or Ms. Wu resigned as an employee
of the Company for Good Reason (as defined in the employment agreement), so long as she has signed and has not revoked a release agreement,
she would be entitled to receive severance in the form of continued base salary payments over a period of 18 months, and the vesting
of all of her stock options and restricted stock grants would automatically accelerate.
On
February 18, 2022, Ms. Wu resigned as Chief Executive Officer and General Counsel of the Company. In connection with her resignation,
the Company entered into a Separation Agreement and Release with Ms. Wu (the “Separation Agreement”) pursuant to which, among
other things, Ms. Wu. released the Company from any and all claims she may have against the Company (subject to certain exclusions),
and the Company agreed to provide Ms. Wu with the separation benefits under her employment agreement, including $750,000 in severance
pay payable over an 18-month period, accelerated vesting of the 200,000-share option and extension of the post-service exercise period
of the option to July 13, 2031 and accelerated vesting of the 80,000 share restricted stock award. The Separation Agreement also contains
a customary non-disparagement provision.
Outstanding
Equity Awards at Fiscal Year-End
As
of December 31, 2022, the Company’s named executive officers had the following option and/or stock awards:
Name
(a) | |
Number
of
securities
underlying
unexercised
options
exercisable (#)(b) | | |
Number
of
Securities
underlying unexercised options unexercisable (#)(c) | | |
Equity
Incentive plan awards: Number of Securities underlying unexercised unearned options unexercisable (#)(c) | | |
Option
exercise price ($)(e) | | |
Option
expiration date (f) | |
Number
of shares of units of stock that have not vested (#)(g) | | |
Market
value of shares or units of stock that have not vested ($)(h) | | |
Equity
Incentive plan awards: Number of unearned shares, units or other rights that have not vested (#)(i) | | |
Equity
Incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested ($)(j) | |
| |
| | |
| | |
| | |
| | |
| |
| | |
| | |
| | |
| |
Yinghua Chen | |
| 20,000 | | |
| 20,000 | (1) | |
| — | | |
| 2.11 | | |
7/01/2030 | |
| — | | |
| — | | |
| — | | |
| — | |
| |
| 18,750 | | |
| 56,250 | (2) | |
| — | | |
| 2.21 | | |
11/11/2031 | |
| — | | |
| — | | |
| — | | |
| — | |
| |
| | | |
| | | |
| | | |
| | | |
| |
| | | |
| | | |
| | | |
| | |
Lyle Berman | |
| 20,000 | | |
| 20,000 | (1) | |
| — | | |
| 2.11 | | |
7/01/2030 | |
| — | | |
| — | | |
| — | | |
| — | |
| |
| 12,500 | | |
| 37,500 | (3) | |
| — | | |
| 2.21 | | |
11/11/2031 | |
| — | | |
| — | | |
| — | | |
| — | |
| |
| | | |
| | | |
| | | |
| | | |
| |
| | | |
| | | |
| | | |
| | |
Libing (Claire) Wu | |
| 200,000 | (4) | |
| — | | |
| — | | |
| 2.21 | | |
7/13/2031 | |
| — | | |
| — | | |
| — | | |
| — | |
| |
| | | |
| | | |
| | | |
| | | |
| |
| | | |
| | | |
| | | |
| | |
Judson Hannigan | |
| 85,000 | (5) | |
| — | | |
| — | | |
| 4.09 | | |
1/24/2023 | |
| — | | |
| — | | |
| — | | |
| — | |
| (1) | Represents
a stock option granted on July 1, 2020 in connection with service as a member of the Board
of Directors. The option vests in 4 equal annual installments on each of July 1, 2021, 2022,
2023, and 2024. |
| (2) | Represents
a stock option granted on November 11, 2021 in connection with Ms. Chen’s employment.
The option vests in 4 equal annual installments on each of November 11, 2022, 2023, 2024,
and 2025. |
| (3) | Represents
a stock option granted on November 11, 2021 in connection with Mr. Berman’s employment.
The option vests in 4 equal annual installments on each of November 11, 2022, 2023, 2024,
and 2025. |
| (4) | Represents
the option granted on July 13, 2021, in connection with Ms. Wu’s employment; in connection
with her termination, the option became fully vested and the post-service exercise period
was extended to July 13, 2031. |
| (5) | Represents
the portion of the option granted to Mr. Hannigan on November 21, 2019, that was vested at
the time of his termination; the unvested portion was forfeited. |
Director
Compensation
The
following table sets forth information regarding the compensation earned for service on our Board of Directors by our non-employee directors
during the year ended December 31, 2022.
Director
Compensation Table |
Name
(a) | |
Fees
earned
or paid
in cash ($) (b) | | |
Stock
awards(1) ($) (c) | | |
Option
awards(1) ($) (d) | | |
Non-equity
incentive
plan
compensation ($) (e) | | |
Nonqualified
deferred
compensation
earnings ($) (f) | | |
All
other
compensation ($) (g) | | |
Total
($) (h) | |
Lyle
Berman | |
| 30,000 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 30,000 | |
Yangyang
Li | |
| 65,000 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 65,000 | |
Benjamin
Oehler | |
| 55,000 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 55,000 | |
Bradley
Berman | |
| 50,000 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 50,000 | |
Joseph
Lahti | |
| 50,000 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 50,000 | |
Jingshen
(Jason) Lu | |
| 50,000 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 50,000 | |
Guanzhou
(Jerry) Qin | |
| 50,000 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 50,000 | |
Yinghua
Chen | |
| 30,000 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 30,000 | |
Yushi Guo | |
| 65,000 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 65,000 | |
Adam Pliska(2) | |
| 30,000 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 69,285 | | |
| 99,285 | |
Jerry Lewin(3) | |
| 6,161 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 6,161 | | |
| 6,161 | |
(1) | The
amounts shown represent compensation expense recognized for financial statement purposes
under ASC Topic 718. Pursuant to SEC rules, the amounts shown exclude the impact of estimated
forfeitures related to service-based vesting conditions. For a discussion of the assumptions
relating to our valuations of these stock awards and option awards, please see Note 13 to
the financial statements included in the Company’s Annual Report on Form 10K for the
fiscal year ended December 31, 2022. These amounts reflect our accounting expense for these
stock awards and option awards and do not correspond to the actual value that may be recognized
by the directors. |
(2) | Mr.
Pliska received $4,850 for his service as a director on the Board from January to February
2022. In February 2022, Mr. Pliska entered into a consulting arrangement with the Company
pursuant to which he agreed to provide certain business and strategic advice to the Company
and received a consulting fee in the amount of $69,285 for fiscal year 2022. On April 17,
2023, Mr. Pliska received a true-up payment of $25,150 for his service as a director on the
Board from February 2022 to December 2022. |
(3) | Mr.
Lewin resigned from the Board on February 18, 2022. |
Director
Compensation Program
On
July 6, 2021, the Company’s Board of Directors approved the following compensation for non-executive directors: (i) annual $30,000
fee for director services; (ii) annual $10,000 fee for non-chair committee services (capped at $10,000 per director); and (iii) annual
$15,000 fee for committee chairs (capped at $15,000 per director). The Company has the option to pay such amounts in cash or stock from
the Company’s incentive plan (valued at the closing price of AESE common stock on the trading day immediately prior to the scheduled
payment date), with the current fees payable in cash. The fees are payable monthly by the Company.
Item
12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS, MANAGEMENT AND DIRECTORS
The
table below sets forth information known to us regarding the beneficial ownership of our common stock as of the April 14, 2023, for:
| ● | each
person we believe beneficially holds more than 5% of our outstanding common shares (based
solely on our review of SEC filings); |
| ● | each
of our “named executive officers” as identified in the summary compensation table;
and |
| ● | all
of our current directors and executive officers as a group. |
The
number of shares beneficially owned by a person includes shares issuable under options, warrants and other securities convertible into
common stock held by that person and that are currently exercisable or that become exercisable within 60 days of April 14, 2023. Percentage
calculations assume, for each person and group, that all shares that may be acquired by such person or group pursuant to options, warrants
and other convertible securities currently exercisable or that become exercisable within 60 days of the April 14, 2023, are outstanding.
Nevertheless, shares of common stock that are issuable upon exercise of presently unexercised options, warrants and other convertible
securities are not deemed to be outstanding for purposes of calculating the “Percentage of Shares Beneficially Owned” by
any other person or any other group.
Except
as otherwise indicated in the table or its footnotes, the persons in the table below have sole voting and investment power with respect
to all shares of common stock shown as beneficially owned by them, subject to community property laws where applicable.
As
of the April 14, 2023, we had 39,085,470 shares of common stock issued and outstanding.
Name
and Address of Beneficial Owners(1) | |
Shares
Beneficially
Owned | | |
Percentage
of Shares
Beneficially
Owned | |
Five
Percent Stockholders: | |
| | |
| |
Knighted
Pastures LLC(2) | |
| 8,002,610 | | |
| 20.4 | % |
Ourgame
International Holdings Limited(3) | |
| 15,112,163 | | |
| 35.8 | % |
Directors
and Named Executive Officers: | |
| | | |
| | |
Yinghua
Chen(4) | |
| 64,052 | | |
| * | |
Lyle
Berman(5) | |
| 1,137,959 | | |
| 2.9 | % |
Roy
Anderson | |
| ― | | |
| ― | |
Yangyang
Li(6) | |
| 15,132,163 | | |
| 35.8 | % |
Benjamin
Oehler(7) | |
| 89,325 | | |
| * | |
Bradley
Berman(7) | |
| 92,325 | | |
| * | |
Joseph
Lahti(7) | |
| 92,325 | | |
| * | |
Jingsheng
(Jason) Lu(8) | |
| 15,132,163 | | |
| 35.8 | % |
Guanzhou
(Jerry) Qin | |
| ― | | |
| ― | |
Yushi
Guo | |
| ― | | |
| ― | |
Adam
Pliska(9) | |
| 466,111 | | |
| 1.18 | % |
Yuanfei
Qu | |
| ― | | |
| ― | |
Judson
Hannigan(10) | |
| 279,225 | | |
| * | |
Claire
Wu(11) | |
| 248,563 | | |
| * | |
All
current directors and executive officers, as a group (14 individuals) | |
| 17,602,048 | | |
| 38.0 | % |
| (1) | Unless
otherwise noted, the business address of each of the following entities or individuals is
745 Fifth Ave, Suite 500, New York, NY 10151. Unless otherwise indicated, we believe that
all persons named in the table have sole voting and investment power with respect to all
shares of common stock beneficially owned by them. |
| (2) | Based
on a joint Schedule 13D filed on February 9, 2022, by Knighted Pastures LLC and Roy Choi.
Includes 190,000 five-year warrants to purchase shares of Company common stock at a price
per share of $11.50 that are currently exercisable. |
| (3) | Based
on a joint Schedule 13D filed on September 18, 2019, filed by Primo Vital Ltd. (“Primo”)
and Ourgame International Holdings Limited (“Ourgame”). Primo is the wholly-owned
subsidiary of Ourgame and is the record holder of the Companys common stock. Ourgame has
the power to vote or direct the voting of 15,112,163 shares of common stock and has the power
to dispose or direct the disposition of 15,112,163 shares of common stock. |
| (4) | Includes
options to purchase 38,750 shares of common stock that are exercisable within 60 days after
April 14, 2023. |
| (5) | Includes
options to purchase 42,500 shares of common stock that are exercisable within 60 days after
April 14, 2023. |
| (6) | Mr.
Li is the current Chair, and an Executive Director of Ourgame, the wholly-owned parent of
Primo. Mr. Li may exercise voting and dispositive power over the shares beneficially owned
by Primo and disclaims any beneficial ownership in such shares except to the extent of his
pecuniary interest in Ourgame. Shares include 15,112,163 shares held by Primo, including
3,125,640 warrants, and options to purchase 20,000 shares of common stock that are exercisable
within 60 days after April 14, 2023. |
| (7) | Includes
options to purchase 30,000 shares of common stock that are exercisable within 60 days after
April 14, 2023. |
| (8) | Mr.
Lu serves as an executive director and the Chief Executive Officer of Ourgame, the wholly-owned
parent of Primo. Mr. Li may exercise voting and dispositive power over the shares beneficially
owned by Primo and disclaims any beneficial ownership in such shares except to the extent
of his pecuniary interest in Ourgame. Shares include 15,112,163 shares held by Primo, including
3,125,640 warrants, and options to purchase 20,000 shares of common stock that are exercisable
within 60 days after April 14, 2023. |
| (9) | Shares
include (i) 102,024 shares issuable upon the exercise of warrants to purchase common stock
at a price per share of $11.50 issued on August 9, 2019 to Mr. Pliska that are currently
exercisable; (ii) 38,000 shares issuable upon the exercise of warrants to purchase common
stock at a price per share of $11.50 issued on August 9, 2019 to Lipscomb/Visoli Children’s
Trust that are currently exercisable; (iii) options to purchase 206,250 shares of common
stock that are exercisable within 60 days after April 14, 2023; and (iv) 117,647 shares of
common stock held by Lipscomb/Visoli Children’s Trust over which Mr. Pliska may exercise
sole voting and dispositive power. Mr. Pliska disclaims any pecuniary interest in the 38,000
warrants and 117,647 shares of common stock held by Lipscomb/Visoli Children’s Trust. |
| (10) | Includes
options to purchase 85,000 shares of common stock that are fully exercisable as of Mr. Hannigan’s
date of termination and 90,350 shares issuable upon the exercise of warrants to purchase
common stock at a price per share of $11.50 issued on August 9, 2019 to Mr. Hannigan that
are currently exercisable. |
| (11) | Includes
options to purchase 200,000 shares of common stock that are exercisable within 60 days after
April 14, 2023. |
Securities
Authorized for Issuance Under Equity Compensation Plans
The
Company maintains a 2019 Equity Incentive Plan. The purpose of the 2019 Equity Incentive Plan is to enable the Company to offer to employees,
officers, and directors of, and consultants to, the Company and its subsidiaries whose past, present and/or potential future contributions
to the Company and its subsidiaries have been, are or will be important to the success of the Company, an opportunity to share monetarily
in the success of and/or acquire an equity interest in the Company. 3,763,305 shares of our common stock have been approved for issuance
under the 2019 Equity Incentive Plan, of which 1,344,904 shares remained available for issuance pursuant to future grants at December
31, 2022.
The
2019 Equity Incentive Plan was approved by our stockholders. The following table sets forth certain information as of December 31, 2022,
with respect to securities authorized for issuance under compensation arrangements.
Plan Category | |
Number
of
securities to be
issued upon
exercise of
outstanding
options,
warrants,
and rights | | |
Weighted-
average
exercise
price of
outstanding
options,
warrants
and rights | | |
Number
of
securities
remaining
available for
future
issuance
under equity
compensation
plans
(excluding
securities
reflected in
column (a)) | |
| |
(a) | | |
(b) | | |
(c) | |
Equity compensation
plans approved by security holders(1) | |
| 1,675,000 | | |
$ | 4.73 | | |
| 1,344,904 | |
Equity
compensation plans not approved by securityholders | |
| — | | |
| — | | |
| — | |
Total | |
| 1,675,000 | | |
$ | 4.73 | | |
| 1,344,904 | |
(1) | Consists
of shares subject to outstanding stock options under the 2019 Equity Incentive Plan (the
“2019 Plan”), some of which are vested and some of which remain subject to the
vesting relating to the respective equity award. |