SCHEDULE 13D/A: Allied Gaming & Entertainment Sues Major Shareholders Knighted Pastures and Roy Choi Over Alleged Disclosure Violations

Allied Gaming & Entertainment Inc. has filed a lawsuit against its significant shareholders, Knighted Pastures LLC and Roy Choi, alleging violations of SEC reporting requirements and corporate bylaws.

Summary

• This document is Amendment No. 17 to the Schedule 13D filing by Knighted Pastures LLC and Roy Choi regarding their beneficial ownership in Allied Gaming & Entertainment Inc.
• The amendment reflects a change in beneficial ownership percentage, primarily due to a decrease in the number of outstanding shares of Common Stock, which was reported as 38,018,882 shares as of May 29, 2025.
• As of the filing date, Knighted Pastures LLC beneficially owns 8,906,270 shares, representing approximately 23.4% of the outstanding shares.
• Roy Choi, as Chief Executive Officer and Manager of Knighted, is deemed to beneficially own the 8,906,270 shares held by Knighted, and directly owns an additional 3,080,153 shares, totaling 11,986,423 shares, which represents approximately 31.5% of the outstanding shares.
• On June 11, 2025, Allied Gaming & Entertainment Inc. filed a lawsuit in the United States District Court for the Central District of California against the Reporting Persons and certain other third parties.
• The lawsuit alleges that the defendants violated Section 13(d) of the Securities Exchange Act of 1934 by failing to disclose the existence of a 'group' and failed to comply with the Issuer's advance notice bylaws for the 2024/2025 annual meeting nominations and proposals.
• The Issuer is seeking permanent injunctive relief and damages from the lawsuit.
• The Reporting Persons deny the allegations, do not believe the Issuer is entitled to any relief, and intend to vigorously defend themselves against the lawsuit.
• There have been no transactions in the Issuer's securities by the Reporting Persons since the filing of Amendment No. 16 to the Schedule 13D.

Sentiment

Score: 3

Explanation: The document reports a significant legal dispute initiated by the Issuer against its major shareholders, alleging serious violations. This indicates substantial internal conflict and potential negative outcomes for the reporting persons and the company, leading to a negative sentiment.

Negatives

• Allied Gaming & Entertainment Inc. has initiated a lawsuit against the Reporting Persons (Knighted Pastures LLC and Roy Choi) and other third parties.
• The lawsuit alleges serious violations of Section 13(d) of the Securities Exchange Act of 1934, specifically regarding the failure to disclose the existence of a 'group' of shareholders.
• The Issuer also alleges non-compliance with its Amended and Restated Bylaws concerning advance notice provisions for nominations and proposals for the combined 2024/2025 annual meeting.
• The Issuer is seeking significant legal remedies, including permanent injunctive relief and damages, which could have material adverse effects on the Reporting Persons.

Risks

• Legal proceedings initiated by Allied Gaming & Entertainment Inc. against the Reporting Persons could result in significant financial penalties, injunctive relief, or other adverse judgments.
• Allegations of violations of Section 13(d) of the Exchange Act could lead to further regulatory scrutiny or enforcement actions by the SEC.
• The ongoing legal dispute and corporate governance conflict between the company and its major shareholders may create uncertainty and negatively impact investor confidence.

Future Outlook

The document does not provide forward-looking statements or guidance from Allied Gaming & Entertainment Inc. It primarily focuses on the current legal dispute. The Reporting Persons have stated their intention to vigorously defend themselves against the lawsuit.

Management Comments

• "The Reporting Persons do not believe the Issuer is entitled to any relief and intend to defend themselves vigorously."
• "The filing of this Schedule 13D shall not be deemed an admission that the Reporting Persons are, for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, the beneficial owners of any securities of the Issuer he or it does not directly own."
• "Each of the Reporting Persons specifically disclaims beneficial ownership of the securities reported herein that he or it does not directly own."

Industry Context

This filing highlights a significant corporate governance dispute and potential shareholder activism within the gaming and entertainment industry. Such legal battles between a company and its major shareholders can indicate internal discord, potentially impacting investor confidence and strategic direction. It underscores the importance of compliance with SEC reporting requirements and corporate bylaws, especially for large shareholders.

Corporate Governance

Legal Proceedings

• On June 11, 2025, Allied Gaming & Entertainment Inc. filed a lawsuit in the United States District Court for the Central District of California against the Reporting Persons (Knighted Pastures LLC and Roy Choi) and certain other third parties.
• The lawsuit alleges that the Defendants violated the reporting requirements of Section 13(d) of the Securities Exchange Act of 1934 by failing to disclose the existence of a 'group'.
• It also alleges that the Defendants failed to comply with the advance notice provisions in the Issuer's Amended and Restated Bylaws regarding nominations and proposals for the combined 2024/2025 annual meeting.
• The Issuer is seeking permanent injunctive relief and damages.
• The Reporting Persons deny the allegations and intend to vigorously defend themselves.

Stakeholder Impact

• Shareholders: Potential uncertainty and volatility in share price due to ongoing litigation and internal corporate governance disputes. The lawsuit could impact the company's strategic direction and management stability.
• Management: Increased focus on legal defense and potential distraction from core business operations due to the lawsuit.
• Regulatory Authorities: Increased scrutiny on compliance with Section 13(d) reporting requirements and corporate governance practices.

Next Steps

• The Reporting Persons intend to vigorously defend themselves against the lawsuit filed by Allied Gaming & Entertainment Inc.
• The legal proceedings in the United States District Court for the Central District of California will continue.

Key Dates

Keywords

Allied Gaming & Entertainment Inc., Knighted Pastures LLC, Roy Choi, Schedule 13D, beneficial ownership, SEC filing, Section 13(d), lawsuit, corporate governance, shareholder activism, litigation, common stock, Exchange Act, annual meeting, bylaws