NEW YORK--(BUSINESS WIRE)--Allied Gaming & Entertainment, Inc. (NASDAQ: AGAE) (the “Company” or “AGAE”), a global experiential entertainment company, today announced a strategic investment in Beijing Lianzhong Zhihe Technology Co. (“Zhihe”), a prominent mobile games developer and operator with proven distribution capabilities. AGAE will assume a controlling interest in the Board and become the Company’s largest shareholder.
Founded in Beijing in April, 2022, Zhihe has rapidly emerged as a trailblazing mobile games developer and operator, specializing in the innovation, research, development and operation of premium card and Mahjong casual games. Leveraging advanced in-game advertising strategies, Zhihe has efficiently generated substantial revenue streams. Within a relatively short period of time, Zhihe has established a premier leisure entertainment platform and community, which further solidifies its connection with customers, enhancing engagement and fostering enduring relationships.
“We are delighted to announce our strategic investment in Beijing Lianzhong Zhihe Technology Co.,” stated Yinghua Chen, AGAE’s Chief Executive Officer. “In just over a year, Zhihe has made remarkable strides in the expansive mobile games market, which will harmonize seamlessly with our strategic goals and the establishment of our subsidiary, Allied Mobile Entertainment (‘AME’). Zhihe brings a compelling library of popular mobile games that will bring significant traction to AME, while also providing distribution channels for our current portfolio of casual mobile games that are in the process of testing and pre-public launching. We look forward to working with their leadership team to drive future value and realize the synergies of our businesses.”
In just nine months of operations in the fiscal year of 2022, Zhihe generated revenue of approximately $10 million (USD), with positive results in key financial areas, including EBITDA, operating cash flow and net income. Unaudited interim results for the first five months of 2023 indicate an upward trajectory in all key financial areas, including revenues.
Terms of Deal
On August 16, 2023, AME agrees to acquire 40% equity interests of Beijing Lianzhong Zhihe Technology Co. indirectly held by Ourgame International Holdings Limited, a major stockholder of AGAE, for approximately $7 million (USD), in cash. The acquisition is subject to customary closing conditions and is expected to close by the end of September 2023. For financial reporting purposes, the Company expects to consolidate the post-acquisition financial statements of Zhihe, which the Company believes will strengthen its financial performance measures and enhance value for its stockholders.
About Allied Gaming & Entertainment
Allied Gaming & Entertainment Inc. (Nasdaq: AGAE) is a global experiential entertainment company focused on providing a growing world of gamers with unique experiences through renowned assets, products and services. For more information, visit alliedgaming.gg.
Forward Looking Statements
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