Simran Joshi
GameSquare, a prominent esports and gaming company, has announced a significant financial update regarding its convertible note, which is set to mature on December 31, 2025.
The note, which offers a conversion option into either GameSquare’s common stock or shares of FaZe Media Series A-1 Preferred Stock, marks a pivotal moment for the company as it continues to expand its market footprint.
FaZe Media, a subsidiary launched last year following the merger of GameSquare and FaZe Clan, recently secured investments and has seen its valuation rise, with potential market implications tied to the upcoming note conversion. This move is part of GameSquare’s broader strategy to enhance its financial position and support its ongoing growth initiatives.
Convertible Note to Increase GameSquare’s Worthiness
GameSquare’s convertible note matures on December 31, 2025, with the right to convert it into either a number of shares in GameSquare’s common stock at the conversion price of $2.50 per share or 5.725 million shares of FaZe Media Series A-1 Preferred Stock held by GameSquare. In the event GigaMoon Media, controlled by Matt Kalish, does decide to go for that conversion option for the note into FaZe Media shares, that would raise GameSquare’s market valuation to $44 million, from around ~$32 million.
In a statement to go with the release, Justin Kenna, GameSquare CEO, emphasized the strategic importance of such undertakings: “Our ability to raise $10m of capital at a $2.50 conversion price demonstrates the meaningful opportunities strategic investors see in the platform we have created.” This is an example of how GameSquare has been working towards strengthening its financial position to be able to take advantage of increasing market demand.
GameSquare Strategic Investments and Market Confidence
GameSquare launched FaZe Media as a subsidiary shortly after the company’s merger with FaZe Clan, its affiliate media IP in that deal. GameSquare has sold 25.5% of FaZe Media to Richard “FaZe Banks” Bengston for $9.5 million. GigaMoon Media, controlled by DraftKings’ President Matt Kalish, invested $11 million into the subsidiary, as well.
Kenna added, “Over the last 12 months, we have successfully pursued shareholder-friendly transactions that raise non-dilutive capital and today’s announcement reflects a continuation of this approach.” This further cements GameSquare’s commitment towards maintaining a strong balance sheet and capital base to further its long-term growth prospects.
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