What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2020-05-15 compared with 2019-11-14 · 525 added, 992 removed, 398 unchanged (79% of the section changed)

FINANCIAL STATEMENTS .

BLACK RIDGE OIL & GAS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

CONSOLIDATED BALANCE SHEETS

Current assets:

Cash and cash equivalents

Accounts receivable

Receivable from Allied Esports Entertainment, Inc.

Prepaid expenses

Current assets from discontinued operations

Total current assets

4 unchanged sentences

Investment in Allied Esports Entertainment, Inc.

Non-current assets from discontinued operations

$ 142,865,980

LIABILITIES AND STOCKHOLDERS' EQUITY

3 unchanged sentences

Deferred compensation

Current liabilities of discontinued operations

Notes payable, net of $251,205 of debt discounts at March 31, 2020

Total current liabilities

2 unchanged sentences

Commitments and contingencies

Redeemable non-controlling interest

Stockholders' equity:

4 unchanged sentences

Additional paid-in capital

Accumulated other comprehensive income

Accumulated deficit

2 unchanged sentences

Total stockholders' equity

Total liabilities, redeemable non-controlling interest and stockholders' equity

$ 142,865,980

See accompanying notes to financial statements.

Total liabilities and stockholders' equity

See accompanying notes to unaudited condensed financial statements.

BLACK RIDGE OIL & GAS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

CONDENSED STATEMENTS OF OPERATIONS

For the Three Months

For the Nine Months

Ended September 30,

Ended March 31,

Management fee income

3 unchanged sentences

Salaries and benefits

Stock-based compensation and deferred compensation

Stock-based compensation

Professional services

5 unchanged sentences

Other income (expense):

Gain on deconsolidation of subsidiary

Merger incentive expense

Settlement income

Settlement expense

Interest expense, including $13,795 of warrants issued as a debt discount

Loss on investments

Total other income (expense)

Net profit before provision for income taxes

Net loss before provision for income taxes

Provision for income taxes

Net profit from continuing operations, net of tax

Net profit (loss) from discontinued operations

Net profit before non-controlling interest

Less net profit attributable to redeemable non-controlling interest

Net income attributable to Black Ridge Oil & Gas, Inc.

Other comprehensive income:

Unrealized gain on investments

Net other comprehensive income attributed to Black Ridge Oil & Gas, Inc.

Net income from continuing operations, net of tax

Net income from discontinued operations

Net loss before non-controlling interest

Less net loss attributable to redeemable non-controlling interest

Net loss attributable to Black Ridge Oil & Gas, Inc.

$ (2,645,579 )

Weighted average common shares outstanding - basic

2 unchanged sentences

Net income per common share - fully diluted

See accompanying notes to financial statements.

See accompanying notes to unaudited condensed financial statements.

BLACK RIDGE OIL & GAS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

Comprehensive

Stockholders'

Balance, July

$ (36,308,492 )

stock options granted for services to employees and directors

Exercise of warrants

income attributable to Black Ridge Oil & Gas, Inc.

September 30, 2018

$ (34,705,457 )

Comprehensive

Stockholders'

Balance, July

$ (36,788,926 )

stock options granted for services to employees and directors

attributable to Black Ridge Oil & Gas, Inc.

Other Comprehensive income

September 30, 2019

$ (27,708,160 )

Comprehensive

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

Stockholders'

Balance, January

$ (35,143,888 )

stock options granted for services to employees and directors

Exercise of warrants

income attributable to Black Ridge Oil & Gas, Inc.

September 30, 2018

$ (34,705,457 )

Comprehensive

Balance, December 31, 2018

Common stock options granted for services to employees and directors

Net loss attributable to Black Ridge Oil & Gas, Inc.

Balance, March 31, 2019

Stockholders'

Balance, January

$ (35,487,902 )

stock options granted for services to employees and directors

attributable to Black Ridge Oil & Gas, Inc.

Other Comprehensive income

September 30, 2019

$ (27,708,160 )

See accompanying notes to financial statements.

Balance, December 31, 2019

Common stock options granted for services to employees and directors

Common stock warrants granted to employees and directors for personal guaranty on debt

Net loss attributable to Black Ridge Oil & Gas, Inc.

Balance, March 31, 2020

See accompanying notes to unaudited condensed

financial statements.

BLACK RIDGE OIL & GAS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months

Ended September 30,

CONDENSED STATEMENTS OF CASH FLOWS

For the Three Months

Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES

Net income attributable to Black Ridge Oil & Gas, Inc.

Net loss (profit) from discontinued operations

Net income attributable to redeemable non-controlling interest

Adjustments to reconcile net loss attributable to Black

Ridge Oil & Gas, Inc.

to net cash provided by (used in) operating activities:

Gain on deconsolidation of subsidiary

Net loss attributable to Black Ridge Oil & Gas, Inc.

$ (2,645,579 )

Merger incentive expense

Net income from discontinued operations

Net loss attributable to redeemable non-controlling interest

Adjustments to reconcile net loss attributable to Black Ridge Oil & Gas,

to net cash used in operating activities:

Depreciation and amortization

Loss on investment in Allied Esports Entertainment, Inc.

Amortization of stock options

Deferred compensation

Amortization of stock warrants issued as a debt discount

Decrease (increase) in current assets:

5 unchanged sentences

Accrued expenses

Net cash provided by (used in) operating activities of continuing operations

Net cash used in operating activities of continuing operations

Net cash used in operating activities of discontinued operations

Net cash provided by (used in) operating activities

Net cash used in operating activities

CASH FLOWS FROM INVESTING ACTIVITIES

Cash disposed in deconsolidation

Purchase of property and equipment

3 unchanged sentences

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from exercise of stock warrants

Proceeds received from notes payable

Repayments on notes payable

Net cash provided by financing activities from continuing operations

Net cash provided by financing activities from discontinued operations

Net cash provided by financing activities from continuing operations

Net cash provided by financing activities

NET CHANGE IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

CASH AND CASH EQUIVALENTS AT END OF PERIOD

CASH AT BEGINNING OF PERIOD

CASH AT END OF PERIOD

SUPPLEMENTAL INFORMATION:

2 unchanged sentences

NON-CASH INVESTING AND FINANCING ACTIVITIES:

Unrealized gain on investment in AESE

Recognition of subsidiary equity upon deconsolidation

BRAC Redemptions of redeemable preferred stock from trust account

$ 126,205,985

BRAC redeemable preferred stock transferred to equity

BRAC stock issued in merger

BRAC stock issued to settle intercompany debt

BRAC loan and accrued interest assumed to settle intercompany debt

BRAC stock issued to settle liabilities

See accompanying notes to financial statements.

Value of debt discounts attributable to warrants

See accompanying notes to unaudited condensed financial statements.

BLACK RIDGE OIL & GAS, INC.

to Condensed Consolidated Financial Statements

Condensed Financial Statements

Note 1 –

11 unchanged sentences

On September 26, 2017, the Company finalized

an equity raise utilizing a rights offering and backstop agreement, raising net proceeds of $5,051,675 and issuing 431,819,910

The proceeds were used to sponsor the Company’s obligations sponsoring a special purpose acquisition company, discussed

below, with the remainder for general corporate purposes.

an equity raise utilizing a rights offering and backstop agreement, raising net proceeds of $5,051,675 and issuing 1,439,400 shares.

The proceeds were used to sponsor a special purpose acquisition company, discussed below,

with the remainder for general corporate purposes.

October 10, 2017, the Company’s sponsored special purpose acquisition company, Black Ridge Acquisition Corp.

7 unchanged sentences

BRAC’s efforts to identify

a prospective target business were not limited to a particular industry or geographic region, but the initial focus of its search

was for target businesses in the energy or energy-related industries with an emphasis on opportunities in the upstream oil and

gas industry in North America.

Following the IPO and over-allotment, BROG owned 22% of the outstanding common stock of BRAC and

managed BRAC’s operations via a management services agreement.

a prospective target business were not limited to a particular industry or geographic region.

Following the IPO and over-allotment,

BROG owned 22% of the outstanding common stock of BRAC and managed BRAC’s operations via a management services agreement.

On December 19, 2018, BRAC entered into

a business combination agreement and the business combination closed on August 9, 2019, as discussed in Note 5.

a business combination agreement and the business combination closed on August 9, 2019.

Following the close of the business combination

6 unchanged sentences

Company is evaluating plans for the remaining Sponsor Shares which could include a distribution of some or all of the Sponsor Share

proceeds after expiration of the lock-up agreement on August 9, 2020.

proceeds after expiration of the lock-up agreement on August 9, 2020, presuming that as of such date AESE has repaid or converted

amounts it owes pursuant to the bridge financing Note Purchase Agreement and Notes dated as of October 11, 2018 and May 17, 2019.

Note 2 –

1 unchanged sentence

and Significant Accounting Policies

The interim condensed consolidated financial

statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US

dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange

Certain information and footnote disclosures normally included in financial statements prepared in accordance with

generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company

believes that the disclosures are adequate to not make the information presented misleading.

The interim condensed financial statements

included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars,

have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted

accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that

the disclosures are adequate to not make the information presented misleading.

These statements reflect all adjustments,

4 unchanged sentences

be read in conjunction with the audited financial statements for the year ended December 31, 2019, which were included

in our Annual Report on Form 10-K.

in our Annual Report on Form 10-K/A.

The Company follows the same accounting policies in the preparation of interim reports.

BLACK RIDGE OIL & GAS, INC.

to Condensed Consolidated Financial Statements

Principles of Consolidation

The accompanying consolidated financial

statements include the accounts of the following entities:

Name of entity

Incorporation

Black Ridge Oil and Gas, Inc.

Black Ridge Acquisition Corp.

Subsidiary (1)

(1) Wholly-owned subsidiary through

October 10, 2017, the date of BRAC’s IPO, after which it was consolidated as a variable interest entity through August 9,

2019, the date of BRAC’s business combination.

BRAC was renamed Allied Esports Entertainment, Inc.

(‘AESE”) on

the date of its business combination and all references to the surviving entity following the business combination are hereafter

referred to as such.

The Company had determined that AESE, following

its IPO, was a variable interest entity (“VIE”) and that the Company was the primary beneficiary of the VIE.

determined that, due to the redemption feature associated with the IPO shares, that the IPO shareholders were indirectly protected

from the operating expenses of BRAC and it had the power to direct the activities of BRAC through the date BRAC afforded the stockholders

the opportunity to vote to approve the proposed business combination.

Therefore, BRAC’s operations are included in the BROG’s

consolidated financial statements herein through August 9 2019.

BRAC’s IPO shareholders are reflected in our Consolidated

Financial Statements as a non-controlling interest through BRAC’s business combination on August 9, 2019.

Under guidance

in ASC 810-10-05-8 (“Consolidation of VIEs”) the Company’s management has determined that BRAC, following its

merger, should no longer be consolidated for financial statement purposes as the Company no longer had the power to direct the

activities of BRAC.

Following BRAC’s business combination, the Company’s investment in AESE is accounted for using

the cost method as AESE no longer was considered a VIE and the Company now owned 12.4% of the outstanding common stock of AESE.

All significant inter-company transactions have been eliminated in the preparation of these financial statements.

The parent company, BROG, and BRAC, for

the period it was consolidated, are collectively referred to herein as the “Company”

or “Black Ridge”.

The Company’s headquarters is in Minneapolis, Minnesota and substantially all of its operations are in the United States.

Condensed Financial Statements

Reclassifications

In the current year, the income, expense

and cash flows from BRAC during the period they were consolidated have been classified as discontinued operations.

For comparative

purposes amounts in the prior periods have been reclassified to conform to current year presentation.

Additionally, the assets

and liabilities from BRAC are shown on the balance sheet as assets and liabilities for discontinued operations.

In the prior year, the income, expense

and cash flows from Black Ridge Acquisition Corp.

(“BRAC”), a wholly-owned subsidiary formed on October 10, 2017, which

was consolidated as a variable interest entity through August 9, 2019, the date that BRAC completed a business combination with

Allied Esports Entertainment, Inc.

(“AESE”), were consolidated and have been retrospectively classified as discontinued

Use of Estimates

7 unchanged sentences

of assets in the oil and gas industry.

The oil and gas industry is subject, by its nature, to environmental hazards and clean-up

Oil and gas companies are subject, by their nature, to environmental hazard and clean-up

At this time, management knows of no substantial losses from environmental accidents or events which would have a material

effect on the Company.

Cash and Cash Equivalents

Cash equivalents include money market accounts

which have maturities of three months or less.

For the purpose of the statements of cash flows, all highly liquid investments with

an original maturity of three months or less are considered to be cash equivalents.

Cash equivalents are stated at cost plus accrued

interest, which approximates market value.

Cash equivalents on hand at September 30, 2019 and December 31, 2018

were $-0- and $2,312, respectively.

BLACK RIDGE OIL & GAS, INC.

to Condensed Consolidated Financial Statements

Restricted Cash and Securities held

in Trust Account

The Company had $2,312 of cash equivalents

and $141,304,995 of marketable securities on December 31, 2018 held in the Trust Account which was restricted for the benefit of

the AESE’s IPO shareholders to be available for those shareholders in the event they elected to redeem their shares following

an approved business combination.

Cash in Excess of FDIC Limits

3 unchanged sentences

Corporation (FDIC) and the Securities Investor Protection Corporation (SIPC) up to $250,000 and $500,000, respectively, under current

The Company had approximately $-0- and $1,119,770 in excess of FDIC and SIPC insured limits at September 30, 2019

and December 31, 2018, respectively.

The Company didn’t have any cash in excess of FDIC and SIPC insured limits at March 31, 2020 and December 31,

The Company has not experienced any losses in such accounts.

5 unchanged sentences

Basic and Diluted Loss Per Share

The basic net loss per share is computed

by dividing the net loss (the numerator) by the weighted average number of common shares outstanding for the period (the denominator).

Diluted net loss per common share is computed by dividing the net loss by the weighted average number of common shares and potential

common shares outstanding (if dilutive) during each period.

Potential common shares include stock options, warrants and restricted

The number of potential common shares outstanding relating to stock options, warrants and restricted stock is computed using

the treasury stock method.

The reconciliation of the denominators

used to calculate basic EPS and diluted EPS for the three and nine months ended September 30, 2019 and 2018 are as follows:

Three Months Ended

Nine Months Ended

September 30,

Weighted average common shares outstanding –

Potentially dilutive common shares:

Stock options and warrants

Weighted average common shares outstanding –

Stock options and warrants excluded from

the calculation of diluted EPS because their effect was anti-dilutive were 10,646,500 and 10,835,300 for the three months ended

September 30, 2019 and 2018, respectively, and 10,646,500 and 10,835,300 for the nine months ended September 30, 2019 and 2018,

respectively.

The basic net loss per common share is

computed by dividing the net loss by the weighted average number of common shares outstanding.

Diluted net loss per common share

is computed by dividing the net loss adjusted on an “as if converted”

basis, by the weighted average number of common

shares outstanding plus potential dilutive securities.

For the periods presented, potential dilutive securities had an anti-dilutive

effect and were not included in the calculation of diluted net loss per common share.

Fair Value of Financial Instruments

9 unchanged sentences

BLACK RIDGE OIL & GAS, INC.

to Condensed Consolidated Financial Statements

Condensed Financial Statements

Property and Equipment

6 unchanged sentences

not be recoverable.

Depreciation expense was $754 and $7,650 for the nine months ended September 30, 2019 and 2018, respectively.

Depreciation expense was $271 and $443 for the three months ended March 31, 2020 and 2019, respectively.

Revenue Recognition

The Company recognizes management fee income

as services are provided.

The Company adopted FASB guidance on stock-based

compensation upon inception at April 9, 2010.

Under FASB ASC 718-10-30-2, all share-based payments to employees, including grants

of employee stock options, are recognized in the income statement based on their fair values.

Expense related to common stock and

stock options issued for services and compensation totaled $83,705 and $244,664 for the nine months ended September 30, 2019 and

2018, respectively, using the Black-Scholes options pricing model and an effective term of 6 to 6.5 years based on the weighted

average of the vesting periods and the stated term of the option grants and the discount rate on 5 to 7 year U.S.

Treasury securities

at the grant date.

The Company recognized management fee income

as services were provided.

The Company accounts for equity instruments

issued to employees in accordance with the provisions of ASC 718 Stock Compensation (ASC 718) and Equity-Based Payments to Non-employees

pursuant to ASC 2018-07 (ASC 2018-07).

All transactions in which the consideration provided in exchange for the purchase of goods

or services consists of the issuance of equity instruments are accounted for based on the fair value of the consideration received

or the fair value of the equity instrument issued, whichever is more reliably measurable.

The measurement date of the fair value

of the equity instrument issued is the earlier of the date on which the counterparty’s performance is complete or the date

at which a commitment for performance by the counterparty to earn the equity instruments is reached because of sufficiently large

disincentives for nonperformance.

Stock-based compensation was $21,489 and $27,931 consisting entirely of expenses related to common

stock options issued for services of $21,489 and $27,931 for the three months ended March 31, 2020 and 2019, respectively, using

the Black-Scholes options pricing model and an effective term of 6 to 6.5 years based on the weighted average of the vesting periods

and the stated term of the option grants and the discount rate on 5 to 7 year U.S.

Treasury securities at the grant date.

$13,795 of expenses related to the amortization of warrants issued in consideration of personal guarantees provided for debt financing

for the three months ended March 31, 2020, using the Black-Scholes options pricing model and an effective term of 5 years based

on the weighted average of the vesting periods and the stated term of the warrant grants and the discount rate on 5 year U.S.

securities at the grant date were recognized as interest expense for the three months ended March 31, 2020.

Uncertain Tax Positions

Effective upon inception at April 9, 2010,

the Company adopted standards for accounting for uncertainty in income taxes.

These standards prescribe a recognition threshold

and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken

in a tax return.

These standards also provide guidance on de-recognition, classification, interest and penalties, accounting in

interim periods, disclosure, and transition.

In accordance with ASC 740, “Income

(“ASC 740”), the Company recognizes the tax benefit from an uncertain tax position only if it is more

likely than not that the tax position will be capable of withstanding examination by the taxing authorities based on the technical

merits of the position.

These standards prescribe a recognition threshold and measurement attribute for the financial statement

recognition and measurement of a tax position taken or expected to be taken in a tax return.

These standards also provide guidance

on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.

Various taxing authorities may periodically

10 unchanged sentences

position relies on the judgment of management to estimate the exposures associated with the Company’s various filing positions.

Recent Accounting Pronouncements

New accounting pronouncements are issued

by the Financial Accounting Standards Board (“FASB”) that are adopted by the Company as of the specified effective

If not discussed below, management believes there have been no developments to recently issued accounting standards, including

expected dates of adoption and estimated effects on our financial statements, from those disclosed in our Annual Report on Form

10-K for the year ended December 31, 2018.

In July 2018,

the FASB issued ASU No.

2018-10, Codification Improvements to Topic 842, Leases .

The amendments in ASU 2018-10 provide

additional clarification and implementation guidance on certain aspects of the previously issued ASU No.

2016-02, Leases (Topic

842) (“ASU 2016-02”) and have the same effective and transition requirements as ASU 2016-02.

Upon the effective date,

ASU 2018-10 will supersede the current lease guidance in ASC Topic 840, Leases.

Under the new guidance, lessees will be required

to recognize for all leases, with the exception of short-term leases, a lease liability, which is a lessee’s obligation to

make lease payments arising from a lease, measured on a discounted basis.

Concurrently, lessees will be required to recognize a

right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset

for the lease term.

ASU 2018-10 is effective for private companies and emerging growth public companies for interim and annual

reporting periods beginning after December 15, 2019, with early adoption permitted.

The guidance is required to be applied using

a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative

periods presented in the financial statements.

The Company adopted this guidance effective January 1, 2019, and the standard did

not have a material impact on the Company’s combined financial statements and related disclosures.

BLACK RIDGE OIL & GAS, INC.

to Condensed Consolidated Financial Statements

Condensed Financial Statements

Recent Accounting Pronouncements

From time to time, new accounting pronouncements

are issued by the Financial Accounting Standards Board (“FASB”) that are adopted by the Company as of the specified

effective date.

If not discussed below, management believes there have been no developments to recently issued accounting standards,

including expected dates of adoption and estimated effects on our financial statements, from those disclosed in our Annual Report

on Form 10-K/A for the year ended December 31, 2019.

In July 2018, the FASB issued ASU No.

2018-10, Codification

Improvements to Topic 842, Leases .

The amendments in ASU 2018-10 provide additional clarification and implementation guidance

on certain aspects of the previously issued ASU No.

2016-02, Leases (Topic 842) (“ASU 2016-02”) and have the same effective

and transition requirements as ASU 2016-02.

Upon the effective date, ASU 2018-10 will supersede the current lease guidance in ASC

Topic 840, Leases.

Under the new guidance, lessees will be required to recognize for all leases, with the exception of short-term

leases, a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted

Concurrently, lessees will be required to recognize a right-of-use asset, which is an asset that represents the lessee’s

right to use, or control the use of, a specified asset for the lease term.

ASU 2018-10 is effective for private companies and emerging

growth public companies for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted.

The guidance is required to be applied using a modified retrospective transition approach for leases existing at, or entered into

after, the beginning of the earliest comparative periods presented in the financial statements.

The Company adopted this guidance

effective January 1, 2019, and the standard did not have a material impact on the Company’s combined financial statements

and related disclosures.

Note 3 –

1 unchanged sentence

As shown in the accompanying financial

statements, as of September 30, 2019, the Company had a cash balance of $64,613 and total working capital of negative $2,620,633.

The Company’s management consulting agreement with AESE calls for management fees of $313,316 from October 1, 2019 through

December 31, 2019 and does not continue into 2020.

Based on projections of cash expenditures in the Company’s current business

plan, the cash on hand would be insufficient to fund the Company’s general and administrative expenses over the next year.

The Company continues to pursue sources

of additional capital through various management fee agreements and financing transactions or arrangements, including joint venturing

of projects, equity financing, debt financing or other means.

We may not be successful in identifying suitable funding transactions

in a sufficient time period or at all, and we may not obtain the capital we require by other means.

If we do not succeed in raising

additional capital, our resources may not be sufficient to fund our business.

statements, as of March 31, 2020, the Company had a cash balance of $52,097, and total working capital of negative $882,749.

Company has incurred recurring losses from operations resulting in an accumulated deficit of $34,002,978, and as of March 31, 2020,

the Company’s cash on hand may not be sufficient to sustain operations.

These factors raise substantial doubt about the Company’s

ability to continue as a going concern.

The Company is currently seeking additional sources of capital to fund short term operations.

The Company, however, is dependent upon its ability to secure equity and/or debt financing and there are no assurances that the

Company will be successful;

therefore, without sufficient financing it would be unlikely for the Company to continue as a going

The financial statements do not include

any adjustments that might result from the outcome of any uncertainty as to the Company’s ability to continue as a going

These financial statements also do not include any adjustments relating to the recoverability and classification of recorded

The financial statements also do not include any adjustments relating to the recoverability and classification of recorded

asset amounts, or amounts and classifications of liabilities that might be necessary should the Company be unable to continue as

a going concern.

Note 4 –

Rights Offering and Formation

of Black Ridge Acquisition Corp.

The Company filed a Registration Statement

on Form S-1 (the “Registration Statement”) with the Securities and Exchange Commission (the “SEC”) to register

the issuance of 431,819,910 shares of common stock in the Rights Offering that was declared effective by the SEC on August 3, 2017.

Pursuant to the Rights Offering, the Company distributed, on a pro rata basis, one right for each share of common stock owned by

shareholders on August 2, 2017 (the “Record Date”).

Each right permitted a shareholder to purchase up to nine shares

of common stock at a subscription price of $0.012 per share.

The Rights Offering expired on September 8, 2017 (the “Expiration

Date”).

In connection with the Rights Offering,

the Company also entered into a Standby Purchase Agreement (the “Backstop Agreement”) with a consortium of investors,

including members of the Company’s board of directors and our Chief Executive Officer (collectively, the “Backstop

Purchasers”), who agree to purchase up to $2.9 million of the unsubscribed shares following the completion of the rights

On September 26, 2017, the Company completed

the Rights Offering, raising gross proceeds of $5,181,839 and issued 431,819,910 shares in connection with the exercise of rights

in connection with the Rights Offering and related Backstop Agreement.

Under the Rights Offering the Company’s current shareholders

exercised rights to purchase 199,811,421 shares of stock for a total of $2,397,737.

Under the Backstop Agreement, the Backstop

Purchasers purchased 232,008,489 shares of stock for a total of $2,784,102.

Additionally, as part of the Backstop agreement, the

Company issued 435,000 warrants to purchase its common stock at $0.01 to participants in the Backstop Agreement.

The warrants fair

value was estimated to be $10,135.

Officers and directors of the Company purchased 173,843,308 shares between the Rights Offering

and as participants of the Backstop Agreement for $2,086,120 and received 179,376 warrants to purchase shares of common stock at

$0.01 per share for their participation in the Backstop Agreement.

The remaining 257,976,602 shares were purchased by non-related

parties for proceeds of $2,965,555.

The fair value of warrants issued to related parties was estimated to be $4,179.

incurred $130,164 in costs associated with raising capital, which has been netted against stockholders’

On October 10, 2017 and October 18, 2017,

in connection with the underwriter exercising its over-allotment option, the Company used $4,450,000 of the net proceeds of the

Rights Offering to fulfill its obligation as sponsor of BRAC, as part of BRAC’s IPO.

BRAC was formed on May 9, 2017 with

the purpose of becoming the special acquisition company as a wholly owned subsidiary of the Company with an initial equity contribution

After the IPO, the Company retained ownership of 22% of BRAC’s common stock.

The remaining proceeds from the

Rights Offering following the sponsorship are being used for general corporate purposes.

BLACK RIDGE OIL & GAS, INC.

to Condensed Consolidated Financial Statements

Note 5 –

BRAC’s IPO, BRAC’s

Merger, Consolidation of BRAC and Non-controlling Interest

BRAC’s IPO

The registration statement for the BRAC’s

IPO was declared effective on October 4, 2017.

The registration statement was initially declared effective for 10,000,000 units

(“Units”

and, with respect to the common stock included in the Units being offered, the “Public Shares”),

but the offering was increased to 12,000,000 Units pursuant to Rule 462(b) under the Securities Act of 1933, as amended.

10, 2017, BRAC consummated the IPO of 12,000,000 units, generating gross proceeds of $120,000,000.

Simultaneous with the closing of the IPO,

BRAC sold 400,000 units (the “Placement Units”) at a price of $10.00 per Unit in a private placement to BROG, generating

gross proceeds of $4,000,000.

BROG’s investment in BRAC’s common stock is eliminated in consolidation prior to the

BRAC’s merger on August 9, 2019.

Transaction costs relating to the IPO amounted

to $2,882,226, consisting of $2,400,000 of underwriting fees and $482,226 of other costs.

Following the closing of the IPO on October

10, 2017, an amount of $120,600,000 ($10.05 per Unit) from the net proceeds of the sale of the Units in the IPO and the Placement

Units was placed in a trust account (“Trust Account”) and invested in U.S.

government securities, within the meaning

set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with

a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund selected by

BRAC meeting the conditions of paragraphs (d)(2), (d)(3) and (d)(4) of Rule 2a-7 of the Investment Company Act, as determined by

BRAC, until the earlier of:

(i) the consummation of a Business Combination or (ii) the distribution of the Trust Account, as described

On October 18, 2017, in connection with

the underwriters’

exercise of their over-allotment option in full, BRAC sold an additional 1,800,000 Units and sold an additional

45,000 Placement Units to BROG at $10.00 per Unit, generating total proceeds of $18,450,000.

Transaction costs for underwriting

fees on the sale of the over-allotment units were $360,000.

Following the closing, an additional $18,090,000 of the net proceeds

($10.05 per Unit) was placed in the Trust Account, bringing the total aggregate proceeds held in the Trust Account to $138,690,000

($10.05 per Unit).

BROG’s investment in BRAC’s common stock is eliminated in consolidation prior to the BRAC’s

merger on August 9, 2019.

Upon the closing of the IPO, $10.05 per

Unit sold in the IPO, including some of the proceeds of the Private Placements was deposited in a trust account (“Trust Account”)

to be held until the earlier of (i) the consummation of its initial Business Combination or (ii) BRAC’s failure to consummate

a Business Combination within 21 months from the consummation of the IPO (the “Combination Period”).

The Extension Meeting

On July 9, 2019, BRAC held a

special meeting of its stockholders (the “Meeting”).

At the Meeting, BRAC’s stockholders considered a proposal

to adopt and approve an amendment to BRAC’s amended and restated certificate of incorporation (the “Charter”)

to extend the date that BRAC had to consummate a business combination (the “Extension”) to August 10, 2019.

The amendment

was approved by the stockholders and filed with the Secretary of State of the State of Delaware on July 9, 2019.

In connection with this vote,

the holders of 9,246,727 shares of BRAC’s common stock properly exercised their right to convert their shares into cash at

a conversion price of approximately $10.29 per share resulting in $95,125,574 in Trust Account assets being distributed back to

shareholders.

In connection with the Extension, BROG loaned $30,000 to BRAC to be placed in the Trust Account for the benefit of

the public shares that were not converted.

The loan was non-interest bearing and evidenced by a promissory note issued by BRAC

on the same date.

The loan was repaid on August 12, 2019.

BLACK RIDGE OIL & GAS, INC.

to Condensed Consolidated Financial Statements

Business Combination Agreement

On December 19, 2018, BRAC entered into

the Business Combination Agreement with Merger Sub, Allied Esports, Ourgame, Noble and Primo.

The Business Combination Agreement

was amended on August 5, 2019 and the Business Combination Agreement as amended is referred to as the Amended Business Combination

The merger closed on August 9, 2019.

Subject to the Amended Business Combination

Agreement, (i) Noble merged with and into Allied Esports (the “Redomestication Merger”) with Allied Esports being the

surviving entity in such merger and (ii) immediately after the Redomestication Merger, Merger Sub merged with into Allied Esports

with Allied Esports being the surviving entity of such merger (the “Transaction Merger”

and together with the Redomestication

Merger, the “Mergers”).

The Mergers resulted in BRAC acquiring

two of Ourgame’s global esports and entertainment assets, Allied Esports and WPT.

Allied Esports is a premier esports entertainment

company with a global network of dedicated esports properties and content production facilities.

WPT is the creator of the World

Poker Tour®

(WPT®) –

the premier name in internationally televised gaming and entertainment with brand presence in

land-based tournaments, television, online and mobile.

The transactions strategically combined the globally recognized Allied Esports

brand with the three-pronged business model of the iconic World Poker Tour, featuring in-person experiences, multiplatform content

and interactive services, to leverage the high-growth opportunities in the global esports industry.

Upon consummation of the Mergers (the “Closing”),

BRAC issued to the former owners of Allied Esports and WPT (i) an aggregate of 11,602,754 shares of common stock, par value $0.0001

per share, of BRAC common stock and (ii) an aggregate of 3,800,003 warrants to purchase shares of common stock of the BRAC.

In addition to the consideration described

above, the former owners of Allied Esports and WPT will receive their pro rata portion of an aggregate of an additional 3,846,153

shares of the BRAC’s common stock if the last sales price of BRAC’s common stock equals or exceeds $13.00 per share

(as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for thirty (30) consecutive days at any

time during the five (5) year period commencing on the date of the Closing (the “Closing Date”).

The Business Combination Agreement, which

original called for a debt repayment to Ourgame of $35,000,000 was amended to call for BRAC to (i) assume $10,000,000 of the debt

obligations of Ourgame and Noble (including an additional $1,200,000 of accrued interest) and (ii) repay Ourgame the remaining

balance of $23,800,000 by paying $3,500,000 in cash to Ourgame and its designees, issuing to Ourgame and its designees 2,928,679

shares of BRAC’s common stock and Ourgame retaining $1,000,000 of the proceeds of such loans to pay its transaction expenses

incurred in the Merger.

In connection with entering into the Amendment, BROG, as BRAC’s founder, agreed to transfer an aggregate

of 600,000 shares of BRAC’s common stock held by it to Ourgame.

Additionally, In July and August 2019,

BRAC and BROG entered into several share purchase agreements (the “Purchase Agreements”) with several parties (collectively

referred to as the “Purchasers”).

Pursuant to the Purchase Agreements, the Purchasers agreed to purchase an aggregate

of $18,000,000 of shares of BRAC’s common stock in open market or privately negotiated transactions.

If the Purchasers were

unable to purchase the full $18,000,000 of shares of common stock in open market or privately negotiated transactions, BRAC will

issue to the Purchasers newly issued shares at the Closing at a per-share price equal to the per-share amount held in BRAC’s

trust account ($10.30 per share), and having an aggregate value equal to the difference between $18,000,000 and the dollar amount

of shares purchased by them in the open market or in privately negotiated transactions.

At the Closing, BRAC agreed to issue to

the Purchasers 1.5 shares of common stock for every 10 shares purchased by them under the Purchase Agreements.

Additionally, BROG

agreed to transfer an aggregate of 720,000 shares held by it of BRAC common stock to the Purchasers.

Pursuant to the Purchase Agreements,

BRAC is required to file a registration statement with the SEC as promptly as practicable following the closing of the merger to

register the resale of any securities purchased by the Purchasers that are not already registered and cause such registration statement

to become effective as soon as possible.

The Purchasers included a $3 million investment from Lyle Berman, a member of the

board of directors of both BRAC and BROG and the largest shareholder of BROG.

Additionally, $5 million will be held in an

escrow account and its usage will be limited to specific capital projects.

Consummation of the transactions contemplated

by the Amended Business Combination Agreement was subject to certain closing conditions including, among others, (i) approval by

the stockholders of BRAC, and (ii) that BRAC have available cash in an amount not less than $22,000,000 after payment to stockholders

who elect to redeem their shares of common stock in accordance with the provisions of BRAC’s charter documents.

condition was waived by Ourgame prior to the close.

BLACK RIDGE OIL & GAS, INC.

to Condensed Consolidated Financial Statements

Consolidation of BRAC and Non-controlling

The Company determined that BRAC, following

its IPO, was a VIE and that the Company is the primary beneficiary of the VIE.

The Company determined that, due to the redemption

feature associated with the IPO shares, that the IPO shareholders are indirectly protected from the operating expenses of BRAC

and BROG had the power to direct the activities of BRAC through the date at which BRAC affords the stockholders the opportunity

to vote to approve a proposed business combination.

Therefore, the consolidated financial statements contain the operations of

the BRAC from its inception on May 9, 2017 through the date of the merger, when BRAC was determined to no longer be a VIE.

IPO shareholders are reflected in our Consolidated Financial Statements as a redeemable non-controlling interest prior to the merger.

The non-controlling interest was recorded at fair value on October 10, 2017, with an addition on October 18, 2017 as a result of

the underwriters’

exercise of their over-allotment option.

During the period in which BRAC was consolidated, the net earnings

attributable to the IPO shareholders are subtracted from the net gain (loss) for any period to arrive at the net loss attributable

to the Company and the non-controlling interest on the balance sheet is adjusted to include the net earnings attributable to the

IPO shareholders.

Deconsolidation of BRAC

Additionally, US GAAP (ASC 810-10-40) provides

guidance on “Derecognition”

of a previously consolidated entity or entities.

Under this guidance, the Company shall

account for the deconsolidation of a subsidiary or derecognition of a group of assets specified in ASC 810-10-40-3A by recognizing

a gain or loss in net income attributable to the parent, measured as the difference between the combination of:

a) The fair value of:

any consideration received.

In this case, the Company received no consideration.

any retained non-controlling investment in the former subsidiary or group of assets at the date the subsidiary is deconsolidated,

or the group of assets is derecognized.

In this case the fair value of the BRAC common stock at the close of the business combination

was $11,950,475;

b) The carrying amount of the former

subsidiaries assets and liabilities or the carrying amount of the group of assets.

With the above guidance the Company determined

that the effect of the deconsolidation of BRAC produced a gain of $26,322,687, which is a non-cash adjustment.

Intercompany transactions and eliminations

BROG was paid a management fee by AESE

of $10,000 per month as part of an administrative services agreement, which commenced October 5, 2017 and ended on the date of

the merger, for general and administrative services including the cost of office space and personnel dedicated to AESE.

also reimbursed for any out-of-pocket expenses, particularly travel, incurred in connection with activities on AESE’s behalf,

including but not limited to identifying potential target businesses and performing due diligence on suitable business combinations.

AESE paid a total of $72,903 to BROG for such services for the nine months ended September 30, 2019 while AESE remained a VIE and

was consolidated.

The management services income of BROG and the management services expense of AESE as well as any balances due

between the companies for such services or reimbursements were eliminated in consolidation.

Management fees earned by BROG of $153,279

subject to the management services agreement between AESE and BROG in effect subsequent to the merger are not eliminated.

BLACK RIDGE OIL & GAS, INC.

to Condensed Consolidated Financial Statements

Note 6 –

Prepaid Expenses

Prepaid expenses consist of the following:

September 30,

Prepaid insurance costs

Prepaid employee benefits

Prepaid office and other costs

Total prepaid expenses

Note 7 –

Property and Equipment

Property and equipment at September 30, 2019 and December 31,

2018, consisted of the following:

September 30,

Property and equipment

Accumulated depreciation and amortization

Total property and equipment, net

The Company recognized depreciation expense of $754 and $7,650

for the nine month periods ended September 30, 2019 and 2018, respectively.

Note 8 –

Investment in Allied

Esports Entertainment, Inc.

Following the close of

BRAC’s merger, the Company retained 2,685,500 shares of AESE common stock with a value, based on the closing stock of

$4.45 on the merger, of $11,950,475.

As noted below, in Note 9 - Related Party Transactions, 20% or 537,100, of the shares

are committed to be released to employees one year from the date of the merger, or on August 9, 2020.

Therefore, the Company

recorded compensation expense and recorded a deferred compensation liability of $2,309,095 to recognize the commitment to

To facilitate the BRAC merger the Company transferred 1,320,000 shares to the former owners of Allied Esports and

WPT and other investors, recognizing an expense of $5,874,000.

As of September 30, 2019, the market value

of the Company’s investment in AESE’s common stock was $14,045,165, based on the closing stock price of $5.23 per share.

Thus, we recorded an unrealized gain of $2,094,690, as part of other comprehensive income, and adjusted the compensation expense

and deferred compensation expense to $2,809,033 to reflect the change in the market value of the stock committed to employees and

The balance in deferred compensation will be adjusted quarterly to reflect changes in the market value of the AESE common

stock committed to them.

Condensed Financial Statements

Note 4 –

Related Party Transactions

Related Party

On March 1, 2018, the Board of Directors

(the “Board”) of the Company approved and adopted the Black Ridge Oil & Gas, Inc.

2018 Management Incentive Plan

(the “Plan”) and the form of 2018 Management Incentive Plan Award Agreement (the “Award Agreement”).

(the “Board”) of the Company approved and adopted the Black Ridge Gas, Inc.

2018 Management Incentive Plan (the “Plan”)

and the form of 2018 Management Incentive Plan Award Agreement (the “Award Agreement”).

In connection with the approval of the

Plan and Award Agreement, the Board approved the issuance of awards (the “Awards”) to certain individuals including

officers and directors (the “Grantees”), representing 20% of the shares of AESE held by the Company as of the date

of closing of a business combination for the acquisition of a target business as described in the AESE prospectus dated October

4, 2017, as follows:

Percentage of AESE Shares Owned by the

Company to be Granted to the Grantee

officers and directors (the “Grantees”), representing a percentage of the shares of BRAC held by the Company as of

the date of closing of a business combination for the acquisition of a target business as described in the BRAC prospectus dated

October 4, 2017, as follows:

Percentage of BRAC Shares Owned by the

Company Granted to the Grantee

Bradley Berman

2 unchanged sentences

Michael Eisele

BLACK RIDGE OIL & GAS, INC.

to Condensed Consolidated Financial Statements

As of September 30, 2019, and following

the AESE merger on August 9, 2019, the Company owned 2,685,500 shares of AESE common stock.

As a result, 537,100 shares of AESE

common stock (the “AESE Shares”) are committed to employees and directors of the Company.

Employees and directors are

required to remain in their positions for a one-year period, with certain exceptions, to receive the granted shares.

The AESE Shares

had a fair market value of $2,809,033 on September 30, 2019.

The Company is recognizing the full expense related to the Plan immediately

upon the AESE merger date.

Compensation expense of $2,309,095 was recognized upon merger and was adjusted on September 30, 2019

to $2,809,033 due to changes in the AESE market price between the August 9, 2019 merger and September 30, 2019.

Subsequent adjustments

will be required each quarter to adjust the deferred compensation liability until the shares can be transferred to the employees.

Shares Transferred to Purchasers of

BRAC Common Stock

As presented in Note 5, In July and

August 2019, BRAC and BROG entered into several share purchase agreements (the “Purchase Agreements”) with

several parties (collectively referred to as the “Purchasers”).

Pursuant to the Purchase Agreements, the

Purchasers agreed to purchase an aggregate of $18,000,000 of shares of BRAC’s common stock in open market or privately

negotiated transactions.

If the Purchasers were unable to purchase the full $18,000,000 of shares of common stock in open

market or privately negotiated transactions, BRAC will issue to the Purchasers newly issued shares at the Closing at a

per-share price equal to the per-share amount held in BRAC’s trust account ($10.30 per share), and having an aggregate

value equal to the difference between $18,000,000 and the dollar amount of shares purchased by them in the open market or in

privately negotiated transactions.

At the Closing, BRAC agreed to issue to the Purchasers 1.5 shares of common stock for

every 10 shares purchased by them under the Purchase Agreements.

Additionally, the Company agreed to transfer an aggregate of

720,000 shares held by it of BRAC common stock to the Purchasers.

The Purchasers included a $3 million investment from

Lyle Berman, a member of the board of directors of both BRAC and BROG and the largest shareholder of BROG, and a $2 million

investment from Morris Goldfarb, a major shareholder of the Company.

Berman and Mr.

Goldfarb received 43,800 and 29,127 bonus

shares, respectively, of BRAC common stock issued by BRAC and 120,000 and 80,000 shares, respectively, of BRAC common stock

transferred from the Company.

BRAC Convertible Loans

In order to finance transaction costs in

connection with an intended initial business combination, BROG had loaned AESE an aggregate $750,000 in the form of convertible

The notes were unsecured, non-interest bearing and payable upon the consummation by AESE of a merger, share exchange, asset

acquisition, or other similar business combination, with one or more businesses or entities (a “Business Combination”).

Upon consummation of a Business Combination, the principal balance of the notes could be converted, at BROG’s option, to

units at a price of $10.00 per unit.

The terms of the units are identical to the units issued by BRAC in its IPO, except the

warrants included in such units could be exercised on a cashless basis, in each case so long as they continued to be held by BROG

or its permitted transferees.

BROG elected to convert $600,000 of the principal balance of the convertible promissory notes and

received 60,000 units consisting of 66,000 shares of AESE common stock (after conversion of the stock rights into 6,000 shares)

and 60,000 warrants.

The remaining $150,000 was repaid to BROG at the date of merger.

As of March 31, 2020, and following the

AESE merger on August 9, 2019, the Company owned 2,685,500 shares of AESE common stock.

As a result, 537,100 shares of AESE common

stock (the “AESE Shares”) are committed to employees and directors of the Company.

Employees and directors are required

to remain in their positions for a one-year period, with certain exceptions, to receive the granted shares.

The AESE Shares had

a fair market value of $843,247 on March 31, 2020.

The Company recognized the $1,396,460 of compensation expense related to the

Plan during the year ended December 31, 2019.

For the three months ended March 31, 2020, the Company recognized a gain of $553,213

related to the reduction in the value of the shares to be paid to employees on August 9, 2020, which was offset against the Company’s

loss on the investment in AESE shares due to changes in the AESE market price between December 31, 2019 and March 31, 2020.

adjustments will be required each quarter to adjust the deferred compensation liability until the shares can be transferred to

the employees.

Note 5 –

Fair Value of Financial Instruments

The Company adopted FASB ASC 820-10 upon

inception at April 9, 2010.

Under FASB ASC 820-10-5, fair value is defined as the price that would be received to sell an asset

or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price).

The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability

of fair value measurements and the related disclosures.

Under GAAP, certain assets and liabilities must be measured at fair value,

and FASB ASC 820-10-50 details the disclosures that are required for items measured at fair value.

BLACK RIDGE OIL & GAS, INC.

to Condensed Consolidated Financial Statements

The Company had revolving credit facilities

that must be measured under the new fair value standard.

The Company’s financial assets and liabilities are measured using

inputs from the three levels of the fair value hierarchy.

Fair Value of Financial

Under FASB ASC 820-10-5, fair value is

defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between

market participants at the measurement date (an exit price).

The standard outlines a valuation framework and creates a fair value

hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures.

GAAP, certain assets and liabilities must be measured at fair value, and FASB ASC 820-10-50 details the disclosures that are required

for items measured at fair value.

The Company has cash and cash equivalents

and a revolving credit facility that must be measured under the fair value standard.

The Company’s financial assets and liabilities

are measured using inputs from the three levels of the fair value hierarchy.

The three levels are as follows:

8 unchanged sentences

that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.

The following schedule summarizes the valuation

of financial instruments at fair value on a recurring basis in the balance sheets as of September 30, 2019 and December 31, 2018:

Fair Value Measurements at September 30, 2019

Cash and cash equivalents

BLACK RIDGE OIL & GAS, INC.

Condensed Financial Statements

The following schedule summarizes the

valuation of financial instruments at fair value on a recurring basis in the balances sheet as of March 31, 2020 and December

Fair Value Measurements at March 31, 2020

Investment in Allied Esports Entertainment, Inc.

Notes payable, net of $251,205 of debt discounts at March 31, 2020

Total liabilities

Fair Value Measurements at December 31, 2019

Cash and cash equivalents

Restricted cash and investments held in trust

Investment in Allied Esports Entertainment, Inc.

Total liabilities

$ 142,810,807

There were no transfers of financial assets

or liabilities between Level 1 and Level 2 inputs for the nine months ended September 30, 2019.

or liabilities between Level 1 and Level 2 inputs for the three months ended March 31, 2020.

Note 6 –

Stockholders’

Prepaid Expenses

Prepaid expenses consist of the following:

Prepaid insurance costs

Prepaid employee benefits

Prepaid office and other costs

Total prepaid expenses

BLACK RIDGE OIL & GAS, INC.

Condensed Financial Statements

Note 7 –

Property and Equipment

Property and equipment at March 31, 2020 and December 31, 2019,

consisted of the following:

Property and equipment

Accumulated depreciation and amortization

Total property and equipment, net

The Company recognized depreciation expense of $271 and $443

for the three-month periods ended March 31, 2020 and 2019, respectively.

Note 8 –

Investment in Allied

Esports Entertainment, Inc.

Following the close of BRAC’s merger,

the Company retained 2,685,500 shares of Allied Esports Entertainment Inc.

AESE) common stock with a value, based on the

closing stock of $4.45 on the merger, of $11,950,475.

As noted in Note 4 - Related Party Transactions, 20% or 537,100, of the shares

are committed to be released to employees one year from the date of the merger, or on August 19, 2020.

Therefore, the Company recorded

a deferred compensation liability of $843,247 to recognize the commitment to employees as of March 31, 2020.

As of March 31, 2020, the market value

of the Company’s investment in AESE’s common stock was $4,216,235, based on the closing stock price of $1.57 per share.

Thus, we recognized a loss of $2,766,065, as offset by a gain of $553,213 pursuant to the change in the market value of the stock

committed to employees and directors, resulting in a net loss of $2,212,852 as of March 31, 2020.

The balance in deferred compensation

is also adjusted quarterly to reflect changes in the market value of the AESE common stock commitment.

On January 2, 2020, the Company deposited

500,000 shares of its holdings of AESE pursuant to its brokerage account agreement with RBC Capital Markets, LLC.

were subsequently used as collateral the $700,000 promissory note, described below, pursuant to a commercial pledge and security

agreement, dated March 10, 2020.

On February 10, 2020, an additional 66,000 of AESE shares were deposited into this brokerage account.

Under this standard brokerage agreement, the Company will be able to borrow funds secured by the value of the AESE shares pursuant

to a standard margin account arrangement.

The current value of the deposited AESE shares is $933,900 based on a closing price of

$1.65 as of May 5, 2020.

BLACK RIDGE OIL & GAS, INC.

Condensed Financial Statements

Note 9 –

Notes Payable

Notes payable consists of the following

at March 31, 2020 and December 31, 2019, respectively:

On November 25, 2019, the Company entered into a credit account agreement (“Margin Account”) with RBC Capital Markets, LLC (“RBC”).

The Margin Account enables the Company to borrow against the Company’s AESE shares that are held in an account with RBC.

The advances received on margin bear interest at rates of between 1.00% and 2.75% over the Base Lending Rate, depending on the average outstanding debit balance.

The Base Lending Rate is internally determined by RBC using Broker Call, Prime Rate as determined by commercial banks utilized by RBC CM, Fed Funds, RBC CM’s cost of funds, and other commercially recognized rates of interest.

The margin loans are collateralized by the underlying AESE shares.

A total of $122,100 was borrowed on the Margin Account over various dates between January 29, 2020 and March 6, 2020.

The outstanding balance was repaid in full on, or about, March 12, 2020 out of the proceeds of the loan from Cadence Bank, described below.

On March 12, 2020, the Company entered into a business loan agreement with Cadence Bank, N.A.

(“Cadence”), as lender encompassing a $700,000 Promissory Note issued to Cadence (the “Note”), a Security Agreement by the Company in favor of Cadence and limited commercial guarantees by the Company’s Chief Executive Officer and Interim Chief Financial Officer, who is one in the same, and members of the Company’s Board of Directors (the “Guarantors”) (collectively, the “Cadence Loan”).

The Note bears interest at a rate of 0.50 percentage points over the prime rate, as published in the Wall Street Journal, payable monthly, and is due on March 9, 2021.

The Note may be repaid at any time without penalty.

The Note is secured by all of the Company’s rights, title and interests in and to 500,000 shares of the common stock of Allied Esports Entertainment Inc.

AESE) currently owned by the Company and held in the Company’s brokerage account with RBC Capital Markets, LLC.

On March 26, 2020, the Company subsequently entered into a separate letter agreement with the Guarantors (the “Letter Agreement”), which provides that if the Company defaults or fails to make any payment due under the Cadence Loan and the Guarantors are required to make payment to Cadence pursuant to the Guarantees, then the Company agrees to issue additional equity interests or rights to Guarantors reflecting ninety-five percent (95%) of the outstanding equity of the Company at the time of such default to participating Guarantors who have made the payments to Cadence.

All equity issuances will be subject to any third party or shareholder approvals required at the time of issuance.

Total notes payable

Less unamortized derivative discounts:

Notes payable

current maturities

Notes payable, less current maturities

BLACK RIDGE OIL & GAS, INC.

Condensed Financial Statements

The Company recorded total discounts of

$265,000, consisting of debt discounts on warrants granted to four officers and directors for warrants issued in consideration

of personal guarantees provided for debt financing incurred during the three months ended March 31, 2020.

The discounts are

being amortized to stock-based compensation expense over the term of the note using the straight-line method, which closely approximates

the effective interest method.

The Company recorded $13,795 of stock-based compensation expense pursuant to the amortization of

note discounts during the three months ended March 31, 2020.

The Company recognized $15,109 of interest

expense, consisting of $1,314 of interest and $13,795 of stock-based warrant expense pursuant to the amortization of the debt discount

on the business loans during the three months ended March 31, 2020.

Note 10 –

Changes in Stockholders’

Reverse Stock Split

On February 21, 2020, the Company effected

a 1-for-300 reverse stock split (the “Reverse Stock Split”).

No fractional shares were issued.

Instead, the Company

issued the following to any stockholder who otherwise would have received a fractional share as a result of the Reverse Stock Split:

Stockholders owning 300 or more shares of Common Stock received (1) one share of Common Stock for every 300 shares owned and (2) cash in lieu of fractional shares upon the surrender of such stockholder’s shares;

Stockholders owning between 25 and 300 shares of Common Stock had their ownership of shares of Common Stock rounded up to one share;

Stockholders owning fewer than 25 shares of Common Stock received cash in lieu of fractional shares upon the surrender of such stockholders’

shares and no longer own shares of Common Stock.

Any cash payment in lieu of fractional

shares were based on the volume weighted average of the closing sales prices of the Company’s Common Stock on the OTCQB

operated by OTC Markets Group Inc.

(the “OTCQB”) during regular trading hours for the five consecutive trading days

immediately preceding the Effective Date, which was $0.018 per share prior to the effects of the reverse stock split.

The Company was authorized to issue 500,000,000

shares of common stock prior to the Reverse Stock Split, which remains unaffected.

The Reverse Stock Split did not have any effect

on the stated par value of the common stock, or the Company’s authorized preferred stock.

Unless otherwise stated, all share

and per share information in this Interim Report has been retroactively adjusted to reflect the Reverse Stock Split.

Preferred Stock

4 unchanged sentences

shares of $0.001 par value common stock.

As of September 30, 2019, and December 31, 2018, a total of 479,844,900 shares of

common stock have been issued.

As of March 31, 2020, and December 31, 2019, a total of 1,600,424 shares of common

stock have been issued.

BLACK RIDGE OIL & GAS, INC.

to Condensed Consolidated Financial Statements

Condensed Financial Statements

Note 11 –

The 2020 Equity Plan was approved by written

consent of a majority of shareholders of record as of November 12, 2019 and adopted by the Board on December 5, 2019, as provided

in the definitive information statement filed with Securities and Exchange Commission on January 10, 2020 (the “DEF 14C”).

The description of the 2020 Equity Plan is qualified in its entirety by the text of the 2020 Equity Plan, a copy of which was

attached as Annex C to the DEF 14C.

Outstanding Options

Options to purchase an aggregate total

of 274,204 shares of common stock at a weighted average strike price of $16.41, exercisable over a weighted average life of nine

years were outstanding as of March 31, 2020.

Options Granted

No options were granted during the nine

months ended September 30, 2019 and 2018.

On February 26, 2020, the Company’s

Board of Directors granted an aggregate amount of 240,000 stock options pursuant to the 2020 Equity Plan to purchase shares of

the Company’s common stock to several officers, directors, and employees at an exercise price of $5.41 per share, which represents

the closing price of the Company’s shares on the OTCQB marketplace on February 20, 2020.

The officers and directors

receiving grants and the amounts of such grants were as follows:

Name and Title

Shares Granted

Ken DeCubellis, Chief Executive Officer and Interim Chief Financial Officer

Michael Eisele, Chief Operating Officer

Bradley Berman, Chairman of the Board and Director

Joseph Lahti, Director

Benjamin Oehler, Director

Lyle Berman, Director

All of the stock options granted under

the 2020 Equity Plan presented in the table above will vest in five equal installments, commencing one year from the date of grant

on February 26, 2021, and continuing for the next four anniversaries thereof until fully vested.

No options were granted during the three

months ended March 31, 2019.

The Company recognized a total of $21,489,

and $244,664 of compensation expense during the nine months ended September 30, 2019 and 2018, respectively, related to common

and $27,931 of compensation expense during the three months ended March 31, 2020 and 2019, respectively, related to common

stock options issued to Employees and Directors that are being amortized over the implied service term, or vesting period, of the

The remaining unamortized balance of these options is $44,079 as of September 30, 2019.

The remaining unamortized balance of these options is $889,412 as of March 31, 2020.

Options Exercised

No options were exercised during the nine

months ended September 30, 2019 and 2018.

No options were exercised during the three

months ended March 31, 2020 and 2019.

Options Forfeited

A total of 137,000 options expired and

were forfeited during the nine months ended September 30, 2019.

A total of 22,000 options were forfeited during the nine months

ended September 30, 2018.

No options were forfeited during the three

months ended March 31, 2020.

A total of 125,000 options expired and were forfeited during the three months ended March 31, 2019.

BLACK RIDGE OIL & GAS, INC.

Condensed Financial Statements

Note 12 –

Outstanding Warrants

Warrants to purchase an aggregate total

of 1,300 shares of common stock at a $3.00 strike price, exercisable until September 22, 2022 were outstanding as of March 31,

Warrants Granted

No warrants were granted during the nine

months ended September 30, 2019 and 2018.

In consideration for four officers and

director’s willingness to serve as guarantors of the Cadence Loan, the Company issued warrants to each of the Guarantors

(the “Guarantor Warrants”) for the purchase of the Company’s common stock on March 12, 2020.

The Guarantor Warrants

entitle each Guarantor to purchase 26,250 shares of the Company's common stock (the “Warrant Shares”) at an exercise

price of $4.00 per share.

The Guarantor Warrants expire on March 12, 2030.

No warrants were granted during the three months ended

March 31, 2019.

The officers and directors receiving grants and the amounts of such grants were as follows:

Stock Warrant

Name and Title

Shares Granted

Ken DeCubellis, Chief Executive Officer and Interim Chief Financial Officer

Bradley Berman, Chairman of the Board and Director

Lyle Berman, Director

Benjamin Oehler, Director

Warrants Exercised

No warrants were exercised during the nine

months ended September 30, 2019.

Warrants to purchase 45,000 shares were exercised in the nine months ended September 30, 2018

for proceeds of $450.

Outstanding Warrants

The Company issued 435,000 warrants (of

which 390,000 are outstanding as of September 30, 2019) to purchase shares at $0.01 per share to participants of the Backstop Agreement

on September 22, 2017.

The Company accounted for the warrants as an expense of the Rights Offering which resulted in a charge directly

to stockholders’

The Company estimated the fair value of these warrants to be approximately $10,135 (or $0.0233 per

warrant) using the Black-Scholes option-pricing model.

The fair value of the warrants was estimated as of the date of grant using

the following assumptions:

(1) expected volatility of 388%, (2) risk-free interest rate of 1.89% and (3) expected life of five

No warrants were exercised during the three

months ended March 31, 2020 and 2019.

Note 13 –

5 unchanged sentences

Losses incurred during the period from

April 9, 2011 (inception) to September 30, 2019 could be used to offset future tax liabilities.

Accounting standards require the

consideration of a valuation allowance for deferred tax assets if it is “more likely than not”

that some component

or all of the benefits of deferred tax assets will not be realized.

As of September 30, 2019, net deferred tax assets were $4,359,663,

with no deferred tax liability, primarily related to net operating loss carryforwards.

A valuation allowance of approximately $4,359,663

was applied to the net deferred tax assets.

April 9, 2011 (inception) to March 31, 2020 could be used to offset future tax liabilities.

Accounting standards require the consideration

of a valuation allowance for deferred tax assets if it is “more likely than not”

that some component or all of the

benefits of deferred tax assets will not be realized.

As of March 31, 2020, net deferred tax assets were $6,770,453, with no deferred

tax liability, primarily related to net operating loss carryforwards.

A valuation allowance of approximately $6,770,453 was applied

to the net deferred tax assets.

Therefore, BROG has no tax expense for 2020 to date.

In accordance with FASB ASC 740, the Company

has evaluated its tax positions and determined there are no significant uncertain tax positions as of any date on, or before September

has evaluated its tax positions and determined there are no significant uncertain tax positions as of any date on, or before March

BLACK RIDGE OIL & GAS, INC.

to Condensed Consolidated Financial Statements

Condensed Financial Statements

Note 14 –

9 unchanged sentences

Subsequent Events

The Company evaluates events that

have occurred after the balance sheet date through the date these financial statements were issued.

No events occurred of a material

nature that would have required adjustments to or disclosures in these financial statements.

MANAGEMENT’S

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The Company evaluates events that have

occurred after the balance sheet date through the date these financial statements were issued.

On April 24, 2020, the Company entered

into a loan agreement with Kensington Bank (“Kensington”), as lender (the “Loan Agreement”) encompassing

a $112,925 Promissory Note issued to Kensington (the “PPP Note”) pursuant to the Payroll Protection Program established

as part of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which provides loans to qualifying

businesses and is administered by the U.S.

Small Business Administration (the “SBA”).

The PPP Note bears interest at

1.00% per annum, payable monthly beginning November 24, 2020, and is due on April 24, 2022.

The PPP Note may be repaid at any time

without penalty.

Under the Payroll Protection Program, the

Company will be eligible for loan forgiveness up to the full amount of the PPP Note and any accrued interest.

The forgiveness amount

will be equal to the amount that the Company spends during the 8-week period beginning April 24, 2020 on payroll costs, payment

of rent on any leases in force prior to February15, 2020 and payment on any utility for which service began before February 15,

The maximum amount of loan forgiveness for non-payroll expenses is 25% of the amount of the PPP Note.

No assurance is provided

that the Company will obtain forgiveness under the PPP Note in whole or in part.

The PPP Note contains customary events

of default relating to, among other things, payment defaults, breach of representations and warranties, or provisions of the promissory

The occurrence of an event of default may result in a claim for the immediate repayment of all amounts outstanding under

such PPP Note, collection of all amounts owing from the Company, filing suit and obtaining judgment against the Company.

MANAGEMENT’S DISCUSSION

AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Cautionary Statements

29 unchanged sentences

results to differ materially from those set forth in the forward-looking statements include the following:

failure to identify acquire or invest in alternatives for

the Company that generate shareholder value, including a merger, acquisition, or a business combination in connection with our

Board’s evaluation of strategic options ;

the effect of the coronavirus (“COVID-19”) pandemic

on our efforts to identify, review and explore strategic alternatives and our ability to obtain funding through various

financing transactions or arrangements;

volatility or decline of our stock price;

low trading volume and illiquidity of our common stock, and possible application of the SEC’s penny stock rules;

low trading volume and illiquidity of our common stock, and possible application of the SEC’s

penny stock rules;

potential fluctuation in quarterly results;

1 unchanged sentence

material defaults on monetary obligations owed us, resulting in unexpected losses;

inadequate capital of our clients to acquire working interests in oil and gas prospects and to

participate in the drilling and production of oil and other hydrocarbons;

inability to maintain adequate liquidity to meet our financial obligations;

failure to acquire or grow new business;

unavailability of oil and gas prospects to acquire for our clients;

failure to acquire or grow new business ourselves

litigation, disputes and legal claims involving outside parties;

risks related to seeking a listing on a national securities exchange and meeting listing requirements;

risks related to our holdings of AESE common stock.

risks related to our ability to be traded on the OTCQB and meeting trading requirements

We have based these

22 unchanged sentences

“ANFC.”

Company is focused on acquiring, investing in, and managing the oil and gas assets for ourselves or our partners.

Additionally,

as the sponsor and manager of Black Ridge Acquisition Corp.

the sponsor and manager of Black Ridge Acquisition Corp.

(“BRAC”) beginning in May of 2017, the Company was focused

on identifying and closing a business combination for BRAC.

Now that BRAC (renamed Allied Esports Entertainment, Inc.

the merger or “AESE”, and hereafter named as such following the merger) has completed its business combination we will

continue to provide additional management services to BRAC through December 31, 2019.

Following the close

of the Merger, the Company commenced a strategic review to identify, review and explore alternatives for the Company, including

a merger, acquisition, or a business combination.

The Company currently owns 2,685,500 shares of BRAC (the “Sponsor Shares”).

Of those shares, 537,100 of the Sponsor Shares are subject to distribution rights to officers and directors under the 2018 Management

Incentive Plan dated March 6, 2018.

Black Ridge is evaluating plans for the remaining Sponsor Shares which could include a distribution

of some or all of the Sponsor Share proceeds after expiration of the lock-up agreement on August 9, 2020.

BRAC Business Combination

On December 19, 2018,

BRAC entered into an Agreement and Plan of Reorganization (the “Merger Agreement”) with Black Ridge Merger Sub, Corp.,

a Delaware corporation and wholly-owned subsidiary of BRAC’s (“Merger Sub”), Allied Esports Entertainment, Inc.

(“Allied Esports”), Ourgame International Holdings Ltd.

(“Ourgame”), Noble Link Global Limited, a wholly-owned

subsidiary of Ourgame (“Noble”), and Primo Vital Ltd., also a wholly-owned subsidiary of Ourgame (“Primo”).

Pursuant to the Agreement,

as amended on August 5, 2019, (i) Noble merged with and into Allied Esports (the “Redomestication Merger”) with Allied

Esports continuing as the surviving entity in such merger and (ii) immediately after the Redomestication Merger, Merger merged

with and into Allied Esports with Allied Esports continuing as the surviving entity of such merger (the “Transaction Merger”

and together with the Redomestication Merger, the “Mergers”

or the “Proposed Business Combination”) and

became a wholly-owned subsidiary of BRAC The Mergers closed on August 9, 2019.

Upon consummation of

the Mergers (the “Closing”), BRAC issued to the former owners of Allied Esports and WPT Enterprises, Inc.

(“WPT”)

(i) an aggregate of 11,602,754 shares of BRAC’s common stock and (ii) an aggregate of 3,800,003 warrants to purchase shares

of BRAC’s common stock.

In addition to the

consideration described above, the former owners of Allied Esports and WPT are entitled to receive their pro rata portion of an

aggregate of an additional 3,846,153 shares of AESE’s common stock if the last sales price of AESE’s common stock equals

or exceeds $13.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for thirty (30)

consecutive days at any time during the five (5) year period commencing on the date of the Closing (the “Closing Date”).

The Mergers resulted

in BRAC acquiring two of Ourgame’s global esports and entertainment assets, Allied Esports and WPT.

Allied Esports is a premier

esports entertainment company with a global network of dedicated esports properties and content production facilities.

creator of the World Poker Tour®

(WPT®) –

the premier name in internationally televised gaming and entertainment

with brand presence in land-based tournaments, television, online and mobile.

The transaction strategically combined the globally

recognized Allied Esports brand with the three-pronged business model of the iconic World Poker Tour, featuring in-person experiences,

multiplatform content and interactive services, to leverage the high-growth opportunities in the global esports industry.

Further information

regarding the Business Combination, the combined company following consummation of the Business Combination and the risks related

to the business of the combined company following consummation of the Business Combination can be found in BRAC’s Current

Report on Form 8-K filed with the Securities and Exchange Commission on December 20, 2018, the preliminary proxy statement filed

by BRAC with the Securities and Exchange Commission on February 15, 2019 (and subsequently amended on April 29, 2019, May 20, 2019

and June 5, 2019 and the definitive proxy statement filed by BRAC with the Securities and Exchange Commission on June 12, 2019.

The Extension Meeting

9, 2019, BRAC held a special meeting of its stockholders (the “Meeting”).

At the Meeting, BRAC’s stockholders

considered a proposal to adopt and approve an amendment to BRAC’s amended and restated certificate of incorporation (the

“Charter”) to extend the date that BRAC has to consummate a business combination (the “Extension”) to August

The amendment was approved by the stockholders and filed with the Secretary of State of the State of Delaware on July

In connection

with this vote, the holders of 9,246,727 shares of BRAC’s common stock properly exercised their right to convert their shares

into cash at a conversion price of approximately $10.29 per share resulting in $95,125,574 in Trust Account assets being distributed

back to shareholders.

In connection with the Extension, BROG, loaned $30,000 to BRAC to be placed in the Trust Account for the

benefit of the public shares that were not converted.

The loan is non-interest bearing and is evidenced by a promissory note issued

by BRAC on the same date.

The loan was repaid by BRAC on August 12, 2019.

Amendment to the Business Combination

On August 5, 2019,

BRAC entered into an amendment (the “Amendment”) to the Business Combination Agreement.

The Amendment reduced the closing

condition originally contained in the Business Combination Agreement requiring BRAC to have minimum cash on hand following the

proper exercise of conversion rights by the holders of public shares from at least $80,000,000 to $22,000,000.

This condition was

waived by Ourgame prior to the close of the Business Combination.

The Business Combination Agreement also originally provided for

BRAC to repay $35,000,000 of indebtedness of Allied Esports and the World Poker Tour owed to Ourgame in cash at the closing of

the transactions (the “Closing”).

Pursuant to the Amendment, the parties agreed that instead of paying the full $35,000,000

in cash at the Closing, BRAC would (i) assume $10,000,000 of the debt obligations of Ourgame and Noble (including an additional

$1,200,000 of accrued interest) and (ii) repay Ourgame the remaining balance of $23,800,000 by paying $3,500,000 in cash to Ourgame

and its designees, issuing to Ourgame and its designees 2,928,679 shares of BRAC’s common stock and Ourgame retaining $1,000,000

of the proceeds of such loans to pay its transaction expenses incurred in the Merger.

In connection with entering into the Amendment,

BROG agreed to transfer an aggregate of 600,000 shares of BRAC’s common stock held by it to Ourgame.

In connection with

the execution of the Amendment, the parties entered into an amendment and acknowledgment agreement (“Acknowledgment Agreement”)

whereby the terms of the previously issued convertible notes (“Notes”) of Allied Esports and WPT (collectively “AEII/WPT”)

whereby bridge holders provided $14 million to be used for the operations of AEII/WPT were amended.

Pursuant to the Acknowledgement

Agreement, the bridge holders have agreed to defer repayment of the Notes to one year and two weeks following the Closing (the

“Maturity Date”).

In consideration of agreeing to the deferred repayment, the bridge holders will be paid an additional

six months of interest (i.e., a total of 18 months of interest) to the extent any bridge holder elects not to convert their Note

BRAC agreed to assume the debt under the Notes as part of the mergers contemplated by the Agreement, and agreed that

the debt will be secured by all the assets of BRAC following the Closing.

BROG, as the Sponsor, has also agreed that it will not

make any further transfer of its securities of BRAC, subject to certain exceptions, until the debt is repaid.

The Notes are convertible

at any time by a holder between the Closing and the Maturity Date at the “Conversion Price.”

The “Conversion

is the lesser of $8.50 per share or the price at which shares are issued to Ourgame or its affiliates in connection

with the mergers.

In July and August

2019, BRAC and BROG also entered into several share purchase agreements (the “Purchase Agreements”) with several parties

(collectively referred to as the “Purchasers”).

Pursuant to the Purchase Agreements, the Purchasers agreed to purchase

an aggregate of $18,000,000 of shares of BRAC’s common stock in open market or privately negotiated transactions.

Purchasers are unable to purchase the full $18,000,000 of shares of common stock in open market or privately negotiated transactions,

BRAC will issue to the Purchasers newly issued shares at the Closing at a per-share price equal to the per-share amount held in

BRAC’s trust account (currently approximately $10.30 per share), and having an aggregate value equal to the difference between

$18,000,000 and the dollar amount of shares purchased by them in the open market or in privately negotiated transactions.

the agreements also contains certain restrictions on the use of cash from the purchase.

At the Closing, BRAC agreed to issue to

the Purchasers 1.5 shares of common stock for every 10 shares purchased by them under the Purchase Agreements.

Additionally, BROG

agreed to transfer an aggregate of 720,000 shares held by it of BRAC common stock to the Purchasers.

Pursuant to the Purchase Agreements,

BRAC was required to file a registration statement with the SEC as promptly as practicable following Closing to register the resale

of any securities purchased by the Purchasers that are not already registered and cause such registration statement to become effective

as soon as possible.

The registration statement was filed by AESE on September 20, 2019 and became effective on October 3, 2019.

The Purchasers included a $3 million investment from Lyle Berman, a member of the board of directors of both BRAC and BROG

and the largest shareholder of BROG.

Additionally, $5 million will be held in an escrow account and its usage will be limited

to specific capital projects.

Closing of the Business Combination

The Business Combination

was closed on August 9, 2019.

In connection with the closing, the holders of 3,015,124 shares of the Company’s common stock

properly exercised their right to convert their shares into cash at a conversion price of approximately $10.31 per share resulting

in $31,080,410 in Trust Account assets being distributed back to shareholders.

Additionally, the Purchasers fulfilled their purchase

commitments purchasing approximately $12.1 million of BRAC’s shares in the open market or through privately negotiated

transactions and directly purchasing 479,546 additional shares of BRAC common stock for $4.9 million directly from BRAC.

Commensurate with the

Business Combination BROG converted $600,000 of convertible loans to BRAC into 60,000 units (comprised 66,000 shares after conversion

of stock rights and 60,000 warrants with terms similar to the IPO warrants).

The remaining $150,000 in convertible loans were returned

in cash by BRAC to BROG.

Additionally, the underwriter agreed to an amendment to its agreement, modifying its payment due at the

close of the Business Combination to $4 million, $2 million in cash and $2 million in equity.

Other advisors used

in the transaction agreed to accept payment for $3.8 million in contingent fees in BRAC equity.

Upon, the close of

the Business Combination, BROG owned 2,685,500 shares of BRAC stock, representing approximately 11.6% of the outstanding shares

As per the Black Ridge Oil & Gas, Inc.

2018 Management Incentive Plan, 20% of the shares, or 537,100 shares, owned

by BROG are committed to employees and directors of the Company.

Additionally, as the conditions warranting BROG’s treatment

of BRAC as a VIE have been eliminated, BRAC will no longer be accounted for as a VIE and consolidated for financial statement reporting

purposes from the date of the closing of the Business Combination forward.

on identifying and closing a business combination for BRAC, which closed on August 9, 2019.

Upon BRAC (renamed Allied Esports Entertainment,

following the merger or “AESE”, and hereafter named as such following the merger) completing its business combination,

we continued to provide additional management services to BRAC until December 31, 2019 .

the close of the Merger, the Company commenced a strategic review to identify, review and explore alternatives for the Company,

including a merger, acquisition, or a business combination.

The Company currently owns 2,685,500 Sponsor Shares.

Of those shares,

537,100 of the Sponsor Shares are subject to distribution rights to officers and directors under the 2018 Management Incentive

Plan dated March 6, 2018.

Black Ridge is evaluating plans for the remaining Sponsor Shares which could include a distribution of

some or all of the Sponsor Share proceeds after expiration of the lock-up agreement on August 9, 2020, presuming that as of such

date AESE has repaid or converted amounts it owes pursuant to the bridge financing Note Purchase Agreement and Notes dated as of

October 11, 2018 and May 17, 2019.

Going Concern Uncertainty

As of September 30,

As of March 31, 2020,

the Company had a cash balance of $52,097, and total working capital of negative $882,749.

The Company’s management

consulting agreement with BRAC calls for management fees of $313,316 from October 1, 2019 through December 31, 2019 and does not

continue into 2020.

Based on projections of cash expenditures in the Company’s current business plan, the cash on hand would

be insufficient to fund the Company’s general and administrative expenses over the next year.

The Company has incurred recurring losses

from operations resulting in an accumulated deficit of $34,002,978, and as of March 31, 2020, the Company’s cash on hand

may not be sufficient to sustain operations.

These factors raise substantial doubt about the Company’s ability to continue

as a going concern.

The Company is currently seeking additional sources of capital to fund short term operations.

however, is dependent upon its ability to secure equity and/or debt financing and there are no assurances that the Company will

be successful;

therefore, without sufficient financing it would be unlikely for the Company to continue as a going concern.

We continue to pursue

7 unchanged sentences

independent registered public accounting firm that accompanies its audited consolidated financial statements in the Company’s

Annual Report on Form 10-K contains an explanatory paragraph regarding the substantial doubt about the Company’s ability

Annual Report on Form 10-K/A contains an explanatory paragraph regarding the substantial doubt about the Company’s ability

to continue as a going concern.

2 unchanged sentences

Results of Operations for the Three

Months Ended September 30, 2019 and 2018.

Months Ended March 31, 2020 and 2019.

The following table

summarizes selected items from the statement of operations for the three months ended September 30, 2019 and 2018, respectively.

summarizes selected items from the statement of operations for the three months ended March 31, 2020 and 2019, respectively.

Three Months Ended

September 30,

Management fee income

3 unchanged sentences

Salaries and benefits

Stock and deferred compensation

Professional services

Other general and administrative expenses

Total general and administrative expenses

Depreciation and amortization

Total operating expenses

Net operating loss

Other income (expense)

Gain on deconsolidation of subsidiary

Merger incentive expense

Settlement income

Settlement expense

Total other income (expense)

(18,310,987 )

Net profit from continuing operations before provision for income taxes

Provision for income taxes

Net profit from continuing operations, net of tax

Net profit (loss) from discontinued operations

Net profit before non-controlling interest

Net income attributable to redeemable non-controlling interest

Net income attributable to Black Ridge Oil & Gas, Inc.

Management fee revenue

The Company earned

management fees of $153,279 during the three months ended September 30, 2019 from its management agreement with BRAC subsequent

to the Mergers.

The Company didn’t earn any management fees during the three months ended September 30, 2018.

General and administrative expenses

Salaries and benefits

for the three months ended September 30, 2019 were $279,621, compared to $285,839 for the three months ended September 30, 2018,

a decrease of $6,218, or 2%.

Base salaries were consistent between the two periods.

Stock-based compensation

expense for the three months ended September 30, 2019 was $2,836,920, compared to $77,901 for the three months ended September

30, 2018, an increase of $2,759,019 or 3,542%.

Included in the expense for the three months ended September 30, 2019, was $2,809,033

of expense related to the 2018 Management Incentive Plan (the “2018 Plan”).

Professional services

General and administrative

expenses related to professional services were $40,287 for the 2019 period, compared to $39,348 for the 2018 period, an increase

of $939, or 2%.

Professional services were generally consistent between the periods.

Other general and administrative expenses

Other general and administrative

expenses for the three months ended September 30, 2019 were $69,157, compared to $58,289 for the three months ended September 30,

2018, an increase of $10,868, or 19%.

The increase is attributable to increased insurance costs and meals and entertainment expenses.

Depreciation expense

for the three months ended September 30, 2019 was $131, compared to $2,535 for the three months ended September 30, 2018.

Other income (expense)

months ended September 30, 2019, other income was $20,448,687 consisting of the gain upon deconsolidation of BRAC of

$26,322,687 and an offsetting merger incentive expense of $5,874,000 to recognize the cost related to transferring shares of

AESE stock to the former owners of Allied Esports and WPT and other investors as incentive to participate in

In the three months

ended September 30, 2018, other income was $2,137,700 consisting primarily of net settlement income of $2,137,500 from the final

settlement of the contingent portion of a 2012 settlement agreement.

Provision for income taxes

The Company had no

income tax expense in the 2019 or 2018 periods, as the Company continues to reserve against any deferred tax assets due to the

uncertainty of realization of any benefit.

Net profit (loss)

from discontinued operations

Net profit (loss) from

discontinued operations relates to the income and expenses of BRAC during the periods prior to deconsolidation.

Net profit (loss)

from discontinued operations consisted of a loss of $8,152,165, compared to a profit of $442,487, a difference of $8,594,652.

the 2019 period, there were contingent closing costs from BRAC’s underwriter and other investment bankers involved in the

merger of $7,917,500.

Additionally, interest from investments in the trust account for the benefit of potential redeeming shareholders

was $676,147 in 2018, but decreased to $145,367 in 2019, as the trust account redemptions and the withdrawal of the remaining assets

at the time of the Mergers shortened the period and decreased the balances on which interest was earned.

Other legal, audit and

consulting costs were higher during the 2019 period due to numerous SEC filings in the periods leading up to the merger.

Results of Operations for the Nine Months

Ended September 30, 2019 and 2018.

The following table

summarizes selected items from the statement of operations for the nine months ended September 30, 2019 and 2018, respectively.

Nine Months Ended

September 30,

Management fee income

Total revenues:

Operating expenses:

General and administrative expenses:

Salaries and benefits

Stock compensation

Professional services

Other general and administrative expenses

Total general and administrative expenses

3 unchanged sentences

Other income (expense)

Gain on deconsolidation of subsidiary

Merger incentive expense

Settlement income

Settlement expense

Interest expense, including $13,795 of warrants issued as a debt discount

Loss on investment in Allied Esports Entertainment, Inc.

Total other income (expense)

Net profit from continuing operations before provision for income taxes

Net loss from continuing operations, net of tax

Provision for income taxes

Net profit from continuing operations, net of tax

Net profit (loss) from discontinued operations

Net profit before non-controlling interest

Net income attributable to redeemable non-controlling interest

Net income attributable to Black Ridge Oil & Gas, Inc.

Net income from discontinued operations

Net loss before non-controlling interest

Net loss attributable to redeemable non-controlling interest

Net loss attributable to Black Ridge Oil & Gas, Inc.

$ (2,645,579 )

Management fee revenue

The Company earned

management fees during the nine months ended September 30, 2019, from its management agreement with BRAC subsequent to the Mergers.

The Company didn’t earn any management fees during the nine months ended September 30, 2018.

The Company didn’t

earn any management fees from its management agreement with BRAC during the three months ended March 31, 2020, compared to $30,000

during the three months ended March 31, 2019.

The decrease is attributable to the termination of the agreement subsequent to the

merger between BRAC and AESE on August 9, 2019.

General and administrative expenses

1 unchanged sentence

Salaries and benefits

for the nine months ended September 30, 2019 were $910,191, compared to $914,166 for the nine months ended September 30, 2018,

a decrease of $3,975, or less than 1%.

Base salaries were consistent between the two periods.

for the three months ended March 31, 2020 were $219,724 compared to $318,110 for the three months ended March 31, 2019, a decrease

of 98,386, or 31%.

The decrease in salaries and benefits was primarily due to a headcount decrease and decreased health benefit

Stock-based compensation

expense for the nine months ended September 30, 2019 was $2,892,738, compared to $244,664 for the nine months ended September 30,

2018, an increase of $2,648,074 or 1,082%.

Included in the expense for the nine months ended September 30, 2019, was $2,809,033

of expense related to the 2018 Management Incentive Plan (the “2018 Plan”).

expense for the three months ended March 31, 2020 was $21,489 compared to $27,931 for the three months ended March 31, 2019, a

decrease of $6,442 or 23%.

Included in the expense for the three months ended March 31, 2020, was $16,685 of expense related

to the 2020 Stock Incentive Plan, and $4,804 related to the 2019 Stock Incentive Plan.

Amortization of stock options decreased

by $160,959, as a significant group of options became fully amortized at the end of 2018.

as a significant group of options became fully amortized at the end of 2019.

Professional services

1 unchanged sentence

expenses related to professional services were $84,984 for the 2020 period compared to $27,708 for the 2019 period, an increase

of $23, or less than 1%.

Professional services were largely unchanged between the periods.

of $57,276 or 207%.

The increase was primarily due to accounting services provided by an outside consultant and legal costs associated

with the reverse stock split, stock option agreements and Cadence loan agreement.

Other general and administrative expenses

Other general and administrative

expenses for the nine months ended September 30, 2019 were $185,035, compared to $194,530 for the nine months ended September 30,

2018, a decrease of $9,495, or 5%.

The decrease is attributable to public relations costs, travel costs and insurance costs, as

diminished by increased meals and entertainment.

expenses for the three months ended March 31, 2020 was $91,150 compared to $56,558 for the three months ended March 31, 2019, an

increase of $34,592, or 61%.

The increase is primarily attributable to increased stock services expense related to the reverse

Depreciation expense

for the nine months ended September 30, 2019 was $754, compared to $7,650 for the nine months ended September 30, 2018.

for the three months ended March 31, 2020 was $271, compared to $443 for the three months ended March 31, 2019, a decrease of $172,

The decrease is attributable to certain equipment becoming fully amortized.

Other income (expense)

months ended September 30, 2019, other income was $20,448,738, consisting of the gain upon deconsolidation of BRAC of

$26,322,687 and an offsetting merger incentive expense of $5,874,000 to recognize the cost related to transferring shares of

AESE stock to the former owners of Allied Esports and WPT and other investors as incentive to participate in

In the nine months

ended September 30, 2018, other income was $2,138,440, consisting primarily of net settlement income of $2,137,500 resulting from

the final settlement of the contingent portion of a 2012 settlement agreement.

In the three months

ended March 31, 2020, other expense was $2,227,961, consisting of $1,314 of interest expense derived from the business loans the

Company received from Cadence Bank, N.A and RBC Capital Markets, LLC, and $13,795 of expense related to the amortization

of warrants issued in consideration of personal guarantees provided for debt financing, along with a net loss on investments in

Allied Esports Entertainment, Inc.

of $2,212,852, compared to $51 of other income, consisting entirely of other income related

to a refund received during the three months ended March 31, 2019.

Provision for income taxes

4 unchanged sentences

from discontinued operations

Net profit (loss) from

discontinued operations relates to the income and expenses of BRAC during the periods prior to deconsolidation.

Net profit (loss)

from discontinued operations consisted of a loss of $7,421,050, compared to a profit of $1,078,489, a difference of $8,499,539.

During the 2019 period, there were contingent closing costs from BRAC’s underwriter and other investment bankers involved

in the merger of $7,917,500.

Other legal, audit and consulting costs were higher during the 2019 period due to numerous SEC filings

in the periods leading up to the merger.

Offsetting the additional costs, interest from investments in the trust account for the

benefit of potential redeeming shareholders was $1,722,249 in 2018, but increased to $1,780,992 in 2019 as interest rates on investments

were higher, offsetting trust account redemptions and the withdrawal of the remaining assets at the time of the Mergers that shortened

the period and decreased the balances on which interest was earned.

Net income from discontinued

operations relates to the income and expenses of BRAC during the periods prior to deconsolidation.

Net income from discontinued

operations of $332,411 during the three months ended March 31, 2019, consisting primarily of $811,335 of interest income on investments

in the trust account for the benefit of potential redeeming shareholders and a gain of $4,733 on investments, as offset by $223,726

of general and administrative expenses, $73,352 of professional fees and $186,579 of income taxes.

Liquidity and Capital Resources

The following table

summarizes our total current assets, liabilities and working capital at September 30, 2019 and December 31, 2018,

respectively.

September 30,

summarizes our total current assets, liabilities and working capital at March 31, 2020 and December 31, 2019, respectively.

Current Assets

2 unchanged sentences

$ (1,289,995 )

As of September 30,

As of March 31, 2020,

we had negative working capital of $882,749.

Liabilities of $2,809,033 related to the 2018 Management Incentive Plan are

included in current liabilities as of September 30, 2019, which will be settled in common stock from the Company’s Investment

in Allied Esports Entertainment, Inc., a long-term asset.

Liabilities of $843,247 related to the 2018 Management Incentive Plan are included

in current liabilities as of March 31, 2020, which will be settled in common stock from the Company’s Investment in Allied

Esports Entertainment, Inc., a long-term asset.

The following table

summarizes our cash flows during the nine month periods ended September 30, 2019 and 2018, respectively.

Nine Months Ended

September 30,

summarizes our cash flows during the three-month periods ended March 31, 2020 and 2019, respectively.

Three Months Ended

Net cash used in operating activities

$ (9,759,160 )

Net cash provided by investing activities

1 unchanged sentence

Net change in cash and cash equivalents

$ (1,438,887 )

Net cash used in operating

activities was $9,759,160 for the nine months ended September 30, 2019, and net cash provided by operating activities was $473,366

for the nine months ended September 30, 2018, a period over period decrease of $10,232,526.

The decrease was primarily due to net

settlement income $2,137,500 received in 2018, and an increase of $6,342,561 in net losses in discontinued operations of BRAC due

primarily to the recognition of $7,917,500 of contingent fees upon BRAC’s business combination.

Changes in working capital

from continuing operating activities resulted in a decrease in cash of $181,718 in the nine months ended September 30, 2019, as

compared to a decrease in cash of $11,218 for the same period in the previous year.

provided by investing activities were $6,888,299 and $187,773 for the nine months ended September 30, 2019 and 2018,

respectively.

In 2019, cash disposed upon deconsolidation resulted in a decrease of $9,992,493.

In the 2019 and 2018 periods,

cash provided from discontinued operations of $16,880,792 and $187,773, respectively, was the result of transfers and

withdrawals from the Trust Account.

activities was $321,659 and $741,799 for the three months ended March 31, 2020 and 2019, respectively, a period over period decrease

The decrease was primarily due to a decrease of $390,335 in net losses in discontinued operations of BRAC.

in working capital from continuing operating activities resulted in a decrease in cash of $56,659 in the three months ended March

31, 2020, as compared to a decrease in cash of $646,975 for the same period in the previous year.

Net cash provided by

financing activities was $1,431,974 and $450 for the nine months ended September 30, 2019.

All of the 2019 activity was the result

of activities in the discontinued operations of BRAC.

investing activities were $-0- and $94,824 for the three months ended March 31, 2020 and 2019, respectively.

In the period ended

March 31, 2019, virtually all the cash was provided from discontinued operations and was the result of transfers and withdrawals

from the Trust Account.

Net cash provided by

financing activities was $265,000 and $-0- for the three months ended March 31, 2020 and 2019, respectively.

All of the 2020 activity

was the result of net proceeds from notes payable.

Satisfaction of our cash obligations

for the next 12 months

As of September 30, 2019,

our balance of cash and cash equivalents was $64,613.

Our plan for satisfying our cash requirements for the next twelve months

is through additional management service fees generated from our current management agreement with AESE through the end of 2019,

management fees from new partners and additional financing in the form of equity or debt as needed.

As of March 31, 2020,

our balance of cash was $52,097 and we had total working capital of negative $882,749.

We expect to incur significant costs related

to a potential business combination which will put a strain on our cash resources.

Our plan for satisfying our cash requirements

for the next twelve months is through cash on hand and additional financing in the form of equity or debt as needed.

12, 2020, the Company received a business loan from Cadence Bank, N.A.

via a $700,000 Promissory Note, of which the Company

drew down $265,000, a Security Agreement by the Company and limited commercial guarantees by the Company’s Chief Executive

Officer and Interim Chief Financial Officer and members of the Company’s Board of Directors (the “Guarantors”).

The Note bears interest at a rate of 0.500 percentage points over the prime rate, currently 4.25% per annum, payable monthly,

is due on March 9, 2021 and is secured by all of the Company’s rights, title and interests in and to 500,000 shares of the

common stock of Allied Esports Entertainment Inc.

AESE) currently owned by the Company and held in the Company’s

brokerage account with RBC Capital Markets, LLC.

Off-Balance Sheet Arrangements

16 unchanged sentences

policies are more fully described in Note 2 of the footnotes to our financial statements appearing elsewhere in this Form 10-Q,

and Note 2 of the footnotes to the financial statements provided in our Annual Report on Form 10-K for the fiscal year ended December

AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK .

Interest Rate Risk

We currently have no

long-term debt, but should we take on debt in the future changes in interest rates could impact results of operations and cash

and Note 2 of the footnotes to the financial statements provided in our Annual Report on Form 10-K/A for the fiscal year ended December

QUANTITATIVE AND QUALITATIVE

DISCLOSURES ABOUT MARKET RISK .

As a “smaller

reporting company”

as defined by Item 10 of Regulation S-K, the Company is not required to provide the information required

by this Item.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements