GameSquare Holdings, Inc.
For the period ended Dec 31, 2024. Filed Apr 15, 2025.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Apr 15, 2025
GAME$2.58+3.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-04-16.
0001493152-24-014809
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-04-15.
0001641172-25-004869
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
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Tables are not compared: 4 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (78)
Current report
FaZe
Current report
FaZe a digitally native lifestyle and media brand founded and rooted in gaming and youth culture. FaZe is at the forefront of the global creator economy, which is an industry centered around innovative digital content development fueled by social media influencers, creators and businesses who monetize their content online. With a leading digital content platform created for and by Generation Z and Millennials, FaZe has established a highly engaged and growing global fanbase. FaZe produces engaging content, merchandise, consumer products and experiences, and create advertising and sponsorship programs for leading national brands. FaZe has several revenue streams including brand sponsorships, content, consumer products, and Esports.
Current report
Frankly Media
Current report
Gigamoon CD Conversion
Current report
As previously disclosed, on November 13, 2024, the Company and Gigamoon entered into a senior secured convertible promissory note in the principal amount of $10 million (the “Gigamoon CD”). On April 2, 2025, GameSquare and Gigamoon entered into an exchange agreement, effective April 1, 2025, pursuant to which, the parties agreed to accelerate the exercise date under the Gigamoon CD to April 1, 2025. As a result, on April 1, 2025, GameSquare transferred the 5,725,000 shares of Series A-1 Preferred Stock of Faze Media Inc. to Gigamoon.
Current report
Promissory Note
Current report
On March 25, 2025, the Company entered into a secured promissory note with Blue & Silver Ventures, Ltd. The principal amount of $2 million under the promissory note is payable on demand and no later than July 1, 2025. The promissory note bears interest at a rate of ten percent (10%) per annum, with a default interest rate of fifteen percent (15%) per annum, and is payable on demand and no later than July 1, 2025 with the principal amount. The Company, at its option, may prepay the promissory note, in whole or in part, without a prepayment penalty of any kind.
Current report
In connection with the promissory note, the Company entered into a security agreement, by and between the Company and Blue & Silver Ventures, Ltd. to provide a security interest in the assets of the Company to Blue & Silver Ventures, Ltd. in order to secure the obligations underlying the promissory note.
Current report
Yorkville CD conversion and settlement
Current report
On January 2, 2025, the Company announced that it has extinguished its outstanding convertible note and standby equity purchase agreement with Yorkville Advisors Global L.P. (“Yorkville”). Under the strategic transaction, GameSquare has issued a zero-coupon, 60-day promissory note to Yorkville associated with a prepayment penalty of $0.8 million. Additionally, all shares previously owned by Yorkville, were purchased by outside investors in block transactions that occurred on January 21, 2025.
Current report
Gigamoon CD
Current report
On November 13, 2024, the Company and Gigamoon entered into a senior secured convertible promissory note in the principal amount of $10 million (the “Gigamoon CD”). On December 15, 2024, the Company received cash of $10 million from Gigamoon for issuance of the Gigamoon CD.
Current report
The Gigamoon CD bears an interest rate of 7.5% per annum, which automatically shall be increased to 10.0% in the event of an event of default. The Gigamoon CD has a maturity date of five years from the issuance, unless earlier accelerated upon the occurrence of an event of default upon the election of the holder. Interest shall accrue as of the issuance date and shall be payable by the Company on (i) each anniversary of such issuance date, and (ii) the earlier of (a) the maturity date and (b) the conversion or exchange of the Gigamoon CD. Interest payments under the Gigamoon CD are payable in the Company’s common stock, equal to the quotient of (a) the aggregate amount of any accrued and unpaid interest as of such payment date, and (b) the conversion price of $2.50 per common share.
Current report
At the option of the holder, at any time on or after December 31, 2025, or upon an event of default or certain change of control events, the Gigamoon CD can be converted into either (i) GameSquare common stock at a conversion price of $2.50 per common share or (ii) exchanged for the 5,725,000 shares of Series A-1 Preferred Stock of Faze Media Inc. held by the Company.
Current report
Standby Equity Purchase Agreement
Current report
On July 8, 2024, the Company entered into the Standby Equity Purchase Agreement (“SEPA”) with YA II PN, LTD, a Cayman Islands exempt limited partnership (“Yorkville”), pursuant to which the Company has the right to sell to Yorkville up to $20.0 million of its shares of common stock, par value $0.0001 per share (“Common Stock”), subject to certain limitations and conditions set forth in the SEPA, from time to time during the term of the SEPA. Sales of the shares of Common Stock to Yorkville under the SEPA, and the timing of any such sales, are at the Company’s option, and the Company is under no obligation to sell any shares of Common Stock to Yorkville under the SEPA except in connection with notices that may be submitted by Yorkville, in certain circumstances as described below.
Current report
Each advance (each, an “Advance”) the Company requests in writing to Yorkville under the SEPA (notice of such request, an “Advance Notice”) may be for a number of shares of Common Stock up to the greater of (i) 500,000 shares or (ii) such amount as is equal to 100% of the average daily volume traded of the Common Stock during the five trading days immediately prior to the date the Company requests each Advance; The shares of Common Stock purchased pursuant to an Advance delivered by the Company will be purchased at a price equal to 97% of the lowest daily VWAP of the shares of Common Stock during the three consecutive trading days commencing on the date of the delivery of the Advance Notice, other than the daily VWAP on a day in which the daily VWAP is less than a minimum acceptable price as stated by the Company in the Advance Notice or there is no VWAP on the subject trading day. The Company may establish a minimum acceptable price in each Advance Notice below which the Company will not be obligated to make any sales to Yorkville. “VWAP” is defined as the daily volume weighted average price of the shares of Common Stock for such trading day on the Nasdaq Stock Market (“Nasdaq”) during regular trading hours as reported by Bloomberg L.P.
Current report
The SEPA will automatically terminate on the earliest to occur of (i) the 36-month anniversary of the date of the SEPA or (ii) the date on which the Company shall have made full payment of Advances pursuant to the SEPA. We have the right to terminate the SEPA at no cost or penalty upon five trading days’ prior written notice to Yorkville, provided that there are no outstanding Advance Notices for which shares of common stock need to be issued and the Company has paid all amounts owed to Yorkville pursuant to the Promissory Note. The Company and Yorkville may also agree to terminate the SEPA by mutual written consent.
Current report
Any purchase under an Advance would be subject to certain limitations, including that Yorkville shall not purchase or acquire any shares that would result in it and its affiliates beneficially owning more than 4.99% of the then outstanding voting power or number of shares of Common Stock or any shares that, aggregated with shares issued under all other earlier Advances, would exceed 19.99% of all shares of Common Stock outstanding on the date of the SEPA (the “Exchange Cap”), unless the Company obtains stockholder approval to issue shares of Common Stock in excess of the Exchange Cap in accordance with applicable Nasdaq rules.
Current report
In connection with the execution of the SEPA, the Company paid a diligence fee (in cash) to Yorkville in the amount of $25,000. Additionally, the Company agreed to pay a commitment fee of $200,000 to Yorkville, payable as follows: (i) $100,000 payable within three days of the date of the SEPA, in the form of the issuance of 80,000 shares of Common Stock, representing $100,000 divided by the closing price as of the trading day immediately prior to the date of the SEPA, and (ii) $100,000 payable on the three-month anniversary of the date of the SEPA, payable in either cash or in the form of an Advance.
Current report
Additionally, Yorkville agreed to advance to the Company, in exchange for a convertible promissory note (the “Promissory Note”), an aggregate principal amount of up to $6.5 million (the “Pre-Paid Advance”), which was funded on July 8, 2024. The purchase price for the Pre-Paid Advance is 93.0% of the principal amount of the Pre-Paid Advance. Interest shall accrue on the outstanding balance of the Pre-Paid Advance at an annual rate equal to 0%, subject to an increase to 18% upon an event of default as described in the Promissory Note. The maturity date of the Promissory Note issued in connection with the Pre-Paid Advance will be 12 months after the issuance date of such Promissory Note. Yorkville may convert the Promissory Note into shares of Common Stock at any time at a conversion price equal to the lower of (i) $1.375 (the “Fixed Price”) or (ii) a price per share equal to 93% of the lowest daily VWAP during the seven consecutive trading days immediately prior to the conversion date of the Promissory Note (the “Variable Price”), but which Variable Price shall not be lower than the Floor Price then in effect. The “Floor Price” will be the lower of (i) $0.25 per share or (ii) 20% of the average VWAP of the Common Stock for the five trading days immediately prior to the date of effectiveness of the Resale Registration Statement. Additionally, the Company, at its option, shall have the right, but not the obligation, to redeem early a portion or all amounts outstanding under the Promissory Notes at a redemption amount equal to the outstanding principal balance being repaid or redeemed, plus a 7% prepayment premium, plus all accrued and unpaid interest; provided that (i) the Company provides Yorkville with no less than ten trading days’ prior written notice thereof and (ii) on the date such notice is issued, the VWAP of the Common Stock is less than the Fixed Price.
Current report
At any time during the Commitment Period that there is a balance outstanding under the Promissory Note, Yorkville may deliver notice (an “Investor Notice”) to the Company to cause an Advance Notice to be deemed delivered to Yorkville and the issuance and sale of shares of Common Stock to Yorkville pursuant to an Advance (an “Investor Advance”) in an amount not to exceed the balance owed under the Promissory Note outstanding on the date of delivery of such Investor Notice, and shall not exceed during any calendar month period, the greater of (i) an amount equal to 15% of the product of (A) the average of the daily traded amount on each trading day during such period and (B) the VWAP for such trading day, and (ii) $750,000. The foregoing limitation on the amount of any such Investor Advances shall not apply at any time (x) upon the occurrence and during the continuance of an Event of Default and (y) where the purchase price is greater than or equal to the Fixed Price. As a result of an Investor Advance, the amounts payable under the Promissory Note will be offset by such amount subject to each Investor Advance.
Current report
An “Amortization Event” will occur under the terms of the Promissory Note if (i) the daily VWAP is less than the Floor Price for five trading days during a period of seven consecutive trading days, or (ii) the Company has issued in excess of 99% of the shares of Common Stock available under the Exchange Cap. Within seven trading days of an Amortization Event, the Company will be obligated to make monthly cash payments in an amount equal to the sum of (i) $1.0 million of principal of the Promissory Note (or the outstanding principal if less than such amount) (the “Amortization Principal Amount”), plus (ii) a payment premium of 7% in respect of such Amortization Principal Amount, plus (iii) accrued and unpaid interest thereunder. The obligation of the Company to make monthly prepayments shall cease (with respect to any payment that has not yet come due) if any time after an Amortization Event (a) the Company reduces the Floor Price to an amount no more than 50% of the closing price of the Common Stock on the trading day immediately prior to such reset notice (and no greater than the initial Floor Price), or (b) the daily VWAP is greater than the Floor Price for a period of ten consecutive trading days, unless a subsequent Amortization Event occurs.
Current report
The Company will control the timing and amount of any sales of shares of Common Stock to Yorkville, except with respect to Investor Advances. Actual sales of shares of Common Stock to Yorkville as an Advance under the SEPA will depend on a variety of factors to be determined by the Company from time to time, which may include, among other things, market conditions, the trading price of the Company’s Common Stock and determinations by the Company as to the appropriate sources of funding for our business and operations.
Current report
The SEPA contains customary representations, warranties, conditions and indemnification obligations of the parties. The representations, warranties and covenants contained in such agreements were made only for purposes of such agreements and as of specific dates, were solely for the benefit of the parties to such agreements and may be subject to limitations agreed upon by the contracting parties.
Current report
King Street CD
Current report
On June 21, 2024, the Company received a notice from King Street Partners LLC (“King Street”), the holder of a 12.75% Convertible Senior Secured Note with a principal amount of $5,800,000 dated December 29, 2023. The notice objected to the Company’s ability to maintain its 51% economic interest in FaZe Media, Inc. and other related matters.
Current report
As a result, King Street requested the immediate repayment of the full principal amount, along with any premiums and accrued interest.
Current report
On October 1, 2024, the Company entered into a Settlement and Release Agreement with King Street pertaining to the King Street Note.
Current report
On July 10, 2024, the Company paid down the outstanding principal and accrued interest on the King Street CD of $5.7 million.
Current report
Frankly Media asset disposal
Current report
On May 31, 2024, the Company, through its wholly owned subsidiary Frankly Media LLC (“Frankly”), entered into an Asset Purchase Agreement (the “UNIV APA”) to sell the producer content management software platform and associated software technology (“CMS Assets”) of Frankly to UNIV, Ltd (“UNIV”) (the “UNIV Asset Sale”).
Current report
Pursuant to the UNIV APA, UNIV paid the Company aggregate purchase consideration with a transaction closing date fair value of $1.2 million in exchange for the CMS Assets, including $25 thousand paid in cash upon closing of the transaction and issuance of a secured subordinated promissory note (the “UNIV Note”) with a transaction closing date fair value of $1.2 million. The UNIV Note was valued using a discount rate of 13.7% (Level 3).
Current report
Additionally on May 31, 2024, the Company, through its wholly owned subsidiary Frankly, entered into an Asset Purchase Agreement (the “XPR APA”) to sell the press release and content distribution service assets (the “PR Assets”) of Frankly to XPR Media LLC (“XPR”) (the “XPR Asset Sale” and, collectively with the UNIV Asset Sale, the “Frankly Asset Sales”).
Current report
Pursuant to the XPR APA, XPR paid the Company aggregate purchase consideration with a transaction closing date fair value of $0.6 million in exchange for the PR Assets, including $10.5 thousand paid in cash upon closing of the transaction and issuance of a secured subordinated promissory note (the “XPR Note”) with a transaction closing date fair value of $0.5 million. The XPR Note was valued using a discount rate of 13.7% (Level 3).
Current report
As a result of the Frankly Asset Sales during the year ended December 31, 2024, the Company recognized a loss of $8.3 million in Other income (expense), net in the consolidated statements of operations and comprehensive loss after offsetting the consideration received with the carrying value of the disposed assets.
Current report
The UNIV Note has a principal amount of $1.5 million, inclusive of the $25 thousand paid in cash upon closing. The principal amount of the UNIV Note will be repaid in monthly installments, beginning August 2024. Monthly principal payments will be $25 thousand from August 2024 to June 2025, $45 thousand from July 2025 to June 2026, and $55 thousand from July 2026 to final maturity on June 30, 2027. The UNIV Note is secured by assets of the UNIV pursuant to a Security Agreement executed in conjunction with the UNIV APA between the Company and UNIV.
Current report
The XPR Note has a principal amount of $0.7 million, inclusive of the $10.5 thousand paid in cash upon closing. The principal amount of the XPR Note will be repaid in monthly installments, beginning August 2024. Monthly principal payments will be $12.5 thousand from August 2024 to June 2025, $20 thousand from July 2025 to June 2026, and $26 thousand from July 2026 to final maturity on June 30, 2027. The XPR Note is secured by all rights of XPR to customer agreements and publisher agreements pursuant to a Security Agreement executed in conjunction with the XPR APA between the Company and XPR.
Current report
Faze Media, Inc. asset contribution
Current report
On May 2, 2024, the Company created FaZe Media, Inc. (“Faze Media”). On May 15, 2024, the Company entered into a business venture with Gigamoon Media, LLC (“Gigamoon”). As part of this venture, the Company contributed certain media assets of Faze Clan, Inc. to Faze Media and Gigamoon invested $11.0 million in Faze Media in exchange for 11,000,000 shares of Series A-2 Preferred Stock of Faze Media, 49% of Faze Media’s voting equity interests, pursuant to a Securities Purchase Agreement (the “SPA”). The Company was issued 11,450,0000 shares of Series A-1 Preferred Stock of Faze Media, 51% of Faze Media’s voting equity interests.
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Removed paragraphs (40)
Previous report
GameSquare Esports, Inc was traded on the Canadian Securities Exchange (CSE) under the symbol “GSQ” and on the OTCQB Venture Market in the Unites States under the symbol “GMSQF” until April 11, 2023.
Previous report
Outlook
Previous report
GameSquare is pursuing organic growth opportunities, as well as M&A growth opportunities. From August 2020 to March 2024, the Company has completed five acquisitions and divested two non-core assets. GameSquare’s organic growth strategy focuses on growing audience and reach within its digital agencies, media network, and teams segments. GameSquare’s digital agencies, teams, and services segments serve the gaming and esports market, and more broadly sports and entertainment through content creation, audience development and growing brand relationships. The digital agency industry is highly fragmented, and these businesses are generally characterized by high revenue growth with healthy earnings before income, taxes, depreciation and amortization margins, which management believes positions the Company well for sustainable growth through organic efforts and presents significant opportunities to grow through accretive acquisitions.
Previous report
The combination of Engine Gaming’s best-in-class technology assets with GameSquare’s award-winning agency and creative capabilities, allows the Company to offer unparalleled insight into consumer behaviors. It also allows GameSquare to develop data-driven creative strategies, and measure and optimize campaigns towards customer acquisition goals in real-time - creating impactful marketing solutions that drive ROI for its customers.
Previous report
The Company has invested in its sales organization and continues to see significant growth in the number, and the size, of requests for proposals within its agency businesses. The Company’s financial profile compares very favorably against its esports peers, as well as other companies seeking to engage with youth audiences.
Previous report
The Company believes enterprise growth may come as a result of synergistic approaches to combining the strengths of its multiple SaaS companies that it can present as a unified offering to the market.
Previous report
Complexity
Previous report
Complexity Gaming, is one of North America’s longest-standing esports organizations. Complexity’s esports teams have won more than 140 championships in nearly 30 game titles over its 20-year history. Staunchly committed to passion, professionalism, and a player-first mentality, Complexity has been continuously recognized as a global leader in modern esports.
Previous report
Frankly
Previous report
Frankly Inc. (“Frankly”), through its wholly-owned subsidiary Frankly Media, LLC, provides a complete suite of solutions that give publishers a unified workflow for the creation, management, publishing and monetization of digital content to any device, while maximizing audience value and revenue.
Previous report
Frankly’s products include a ground-breaking online video platform for Live, Video-on-Demand (“VOD”) and Live-to-VOD workflows, a full-featured content management system with rich storytelling capabilities, as well as native apps for iOS, Android, Apple TV, Fire TV and Roku.
Previous report
Disposition of certain Frankly Media LLC, assets
Previous report
The Company announced that on November 9, 2023, GameSquare and its Frankly Media LLC subsidiary (“Frankly”) entered into a definitive agreement with SoCast, Inc. (“SoCast”) for SoCast’s acquisition of Frankly’s radio business assets. Frankly provides an online content management platform and related content services for approximately 700+ radio stations. In exchange for the Frankly technology platform and customer accounts, SoCast has agreed to pay Frankly $3.3 million, which includes $2.8 million upon closing of the transaction and contingent consideration receivable, with a transaction closing date fair value of $0.5 million, based on future revenue derived from the radio assets. The transaction closed on December 29, 2023.
Previous report
Convertible Note Refinance
Previous report
On December 29, 2023, the Company retired the convertible debenture in the principal amount of $5.0 million, dated February 24, 2021, issued to EB Acquisition Company, LLC (“EB”) by the Company (the “EB Debenture”), and the related Security Agreements between Frankly Media, Frankly Co., Franky, Inc., and EB dated January 6, 2020, and between the Company and EB dated December 1, 2020; and the Company entered into a $5.8 million convertible note (the “Convertible Note”) and security agreement (the “Security Agreement”), dated as of December 29, 2023, with EB affiliate, King Street Partners LLC (“King Street”), that bears interest at 12.75%, has a two-year term, and is convertible at the holder’s option into common shares of Company at a price of $5.00 per share (subject to standard anti-dilution provisions).
Previous report
Completion of the plan of Arrangement
Previous report
On April 11, 2023, the Company announced that it completed its previously announced plan of arrangement (the “Arrangement”) with Engine Gaming and Media, Inc. (“Engine”) resulting in Engine acquiring all of the issued and outstanding securities of the Company. As a result of the completion of the Arrangement, GameSquare Esports’s common shares have been halted from trading on the Canadian Securities Exchange and will be subsequently delisted. The combined entity is now known as GameSquare Holdings, Inc. (“GameSquare Holdings”) with shares traded on the Nasdaq Capital Market and TSX Venture Exchange under the ticker symbol GAME.
Previous report
Prior to the closing of the Arrangement, Engine closed a public offering of 7,673,000 subscription receipts (the “Subscription Receipts”) at an issue price of $1.25 per Subscription Receipt, including the partial exercise of an over-allotment option, for aggregate gross proceeds of $9.6 million. As a result of the closing of the Arrangement, the Subscription Receipts were consolidated on the same ratio as the Consolidation (as discussed below) and automatically exchanged on a one-to-one basis for common shares of the GameSquare Holdings without any further action on the part of the holder and without payment of additional consideration. GameSquare Holdings enacted a reverse stock split to consolidate (the “Consolidation”) the outstanding common shares on the basis of one new common share for every four existing common shares. As a result, GameSquare Holdings had approximately 12.9 million shares outstanding following completion of the Consolidation, the Arrangement and the conversion of the Subscription Receipts.
Previous report
Pursuant to the Arrangement, all the common shares of the Company were acquired in exchange for post consolidation common shares of GameSquare Holdings based on a 1-for-0.020655 exchange ratio.
Previous report
The management team of GameSquare Holdings includes Justin Kenna as Chief Executive Officer, Lou Schwartz as President, Mike Munoz as Chief Financial Officer, Sean Horvath as Chief Revenue Officer, Tyler “Ninja” Blevins as Chief Innovation Officer, John Wilk as General Counsel, and Matt Ehrens as Chief Technology Officer.
Previous report
On April 11, 2023, 6,380,083 shares of the Company were issued for the completion of the Arrangement (see Note 4).
Previous report
On April 3 and 10, 2023, an aggregate of 29,929 shares of the Company were issued to settle legal matters.
Previous report
On March 10, 2023, 29,359 common shares of the Company were issued for contingent consideration on the acquisition of Cut+Sew (see Note 22(a)).
Previous report
Revenues for the year ended December 31, 2023, were $52.0 million, in comparison to $28.1 million for the year ended December 31, 2022. The increase was primarily related to $29.8 million attributed to Engine post-acquisition which is represented in the SaaS + Advertising segment in the above table.
Previous report
Team revenue for the year ended December 31, 2023, was $10.7 million, in comparison to $9.6 million for the year ended December 31, 2022. The increase was primarily related to increased sticker revenue over the prior year.
Previous report
Agency revenue for the year ended December 31, 2023, was $11.5 million, in comparison to $18.5 million for the year ended December 31, 2022. The decrease was primarily due to a material drop off in brand and advertising spend that impacted many in the industry and led to mass layoffs.
Previous report
Cost of sales for the year ended December 31, 2023, was $38.6 million, in comparison to $18.4 million for the year ended December 31, 2022. The increase of $20.1 million was primarily due the acquisition of Engine and cost of sales from April 11, 2023 to December 31, 2023 of $23.1 million. This was partially offset by a $3.0 million reduction in cost of sales primarily driven by the reduction in Agency revenue explained above.
Previous report
General and administrative expenses for the year ended December 31, 2023, were $21.6 million, in comparison to $17.5 million for the year ended December 31, 2022. The $4.1 million increasewas primarily the result of an increase in expenses from the operations of Engine that did not impact the comparative period.
Previous report
Selling and marketing expenses for the year ended December 31, 2023, were $6.5 million, in comparison to $7.1 million for the year ended December 31, 2022. The $0.6 million decrease was primarily due toour cost reduction initiatives in 2023. In the 2022 period, significant investments were made by the Company to drive sales and align with sponsor deliverables including in person events. The decrease is offset by an increase in expenses from the operations of Engine that did not impact the comparative period.
Previous report
Research and development expenses for the year ended December 31, 2023, were $2.1 million, in comparison to $0 for the year ended December 31, 2022. The $2.1 million increase was the result of an increase in expenses from the operations of Engine that did not impact the comparative period.
Previous report
Depreciation and amortization for the year ended December 31, 2023, were $3.3 million, in comparison to $2.3 million for the year ended December 31, 2022. The $1.0 million increase was primarily the result of an increase in expenses from the operations of Engine that did not impact the comparative period.
Previous report
Restructuring charges for the year ended December 31, 2023, were $0.5 million, in comparison to zero for the year ended December 31, 2022. The $0.5 million increase was due cost reduction initiatives in 2023 and related restructuring of operations with the integration of GameSquare and Engine.
Previous report
Goodwill and intangible asset impairment
Previous report
Goodwill and intangible asset impairment expense was $7.0 million for the year ended December 31, 2023, in comparison to $0.7 million for the year ended December 31, 2022. After considering the impact of the sale of the Frankly radio assets on projected sales and assumptions of future growth, as part of our 2023 annual impairment assessment, we concluded goodwill related to Frankly was impaired. We recognized an impairment charge of $7.0 million for the year ended December 31, 2023. We impaired the remaining Code Red intangible assets by $0.7 million during the year ended December 31, 2022, to reflect continued delays in growing its gross and net margins as expected at the time of the acquisition in March 2020.
Previous report
Other operating expenses for the year ended December 31, 2023, were $3.1 million, in comparison to $0.4 million for the year ended December 31, 2022. The $2.7 million increase was primarily due to transaction costs of $3.0 million from the Engine acquisition, in-process acquisition of FaZe Clan, and disposal of Frankly radio assets, that did not impact the comparative period.
Previous report
Interest expense
Previous report
Change in fair value of convertible debt gain for the year December 31, 2023, was $0.5 million in comparison to zero for the year ended December 31, 2022. Prior to the Engine acquisition, we did not have any convertible debt. The change represents adjusting the convertible debt to fair value at the end of the reporting period, primarily driven by changes in our share price at the end of the period.
Previous report
Net income from discontinued operations for the year ended December 31, 2023, was $0.3 million, in comparison to a net loss of $30 thousand for the year ended December 31, 2022. The net income in 2023 was primarily comprised of gains from the abandoned business operations of Winview, a former operating entity of Engine. In the third quarter of 2023, litigation with the founder of the patent portfolio held by Winview was settled. In connection with that settlement, promissory notes issued by Winview were forgiven. The net loss in 2022 was related to the loss on the disposition of Biblos.
Previous report
Net cash provided by financing activities was $6.8 million for the year ended December 31, 2022, which was primarily due to $6.3 million of proceeds from private placements and $0.8 million proceeds from the credit facility, offset by $0.1 million of payments on promissory note, and $0.1 million of share issuance costs.
Previous report
Deferred revenue consists of customer advances for Company services to be rendered that will be recognized as income in future periods.
Reworded paragraphs (19)
Previous wording
GameSquare is a vertically integrated, digital media, entertainment and technology company that connects global brands with gaming and youth culture audiences. Our end-to-end platform includes GCN, a digital media company focused on gaming and esports audiences, Swingman LLC dba as Cut+Sew, a gaming and lifestyle marketing agency, Code Red Esports Ltd. (“Code Red”), a UK based esports talent agency, NextGen Tech, LLC, dba as Complexity Gaming (“Complexity”), a leading esports organization, GameSquare Esports Inc. dba as Fourth Frame Studios, a creative production studio, Mission Supply, a merchandise and consumer products business, Frankly Media, programmatic advertising, Stream Hatchet, live streaming analytics, and Sideqik a social influencer marketing platform.
Current wording
GameSquare is a vertically integrated, digital media, entertainment and technology company that connects global brands with gaming and youth culture audiences. GameSquare’s end-to-end platform includes Gaming Community Network (“GCN”), a digital media company focused on gaming and esports audiences, Zoned, a gaming and lifestyle marketing agency, Code Red, a UK based esports talent agency, FaZe, a lifestyle and media platform rooted in gaming and youth culture whose premium brand, talent network, and large audience can be monetized across a variety of products and services, Fourth Frame Studios, a creative production studio, Mission Supply, a merchandise and consumer products business, Frankly Media, programmatic advertising, Stream Hatchet, live streaming analytics, and Sideqik a social influencer marketing platform.
Previous wording
GameSquare Holdings, Inc. (formerly Engine Gaming and Media, Inc.), (NASDAQ: GAME; TSXV: GAME) completed its plan of arrangement (the “Arrangement”) with GameSquare Esports Inc. (“GSQ”) on April 11, 2023, resulting in the Company acquiring all the issued and outstanding securities of GSQ. At completion of the Arrangement Engine Gaming and Media, Inc. changed its name to GameSquare Holdings Inc.
Current wording
GameSquare Holdings, Inc. (formerly Engine Gaming and Media, Inc.), (NASDAQ: GAME) completed its plan of arrangement (the “Arrangement”) with GameSquare Esports Inc. (“GSQ”) on April 11, 2023, resulting in the Company acquiring all the issued and outstanding securities of GSQ. At completion of the Arrangement Engine Gaming and Media, Inc. changed its name to GameSquare Holdings Inc.
Previous wording
Frankly also provides comprehensive advertising products and services, including direct sales and programmatic ad support. With the release of its serverside ad insertion (SSAI) platform, Frankly has been positioned to help video producers take full advantage of the growing market in addressable advertising.
Current wording
Frankly Media provides comprehensive advertising products and services, including direct sales and programmatic ad support.
Previous wording
On March 24, 2023 and December 29, 2023, an aggregate of 72,409 shares were issued in settlement of outstanding amounts payable of $0.2 million.
Current wording
On October 16, 2024, 28,169 common shares were issued in settlement of outstanding amounts payable of $20 thousand.
Previous wording
During the year ended December 31, 2023, 125,148 shares were issued upon the vesting of RSUs.
Current wording
During the years ended December 31, 2024 and 2023, 1,088,132 and 125,148 shares were issued upon the vesting of RSUs.
Previous wording
The Company had previously announced, subsequent to the closing of the Arrangement, pro-forma annual revenue guidance of $75 million. When including Engine revenue for the period from January 1, 2023 to April 11, 2023 of $8.8 million, pro-forma 2023 revenue amounted to approximately $61 million. The miss of $14 million was primarily driven by the decline in Agency revenue for reasons explained above.
Current wording
The Company had previously announced, subsequent to the closing of the acquisition of Faze, pro-forma annual revenue guidance of $100+ million. When including Faze revenue for the period from January 1, 2024 to March 7, 2024 of $5.7 million, pro-forma 2024 revenue amounted to approximately $102.0 million.
Previous wording
SaaS + Advertising revenue for the year ended December 31, 2023, was $29.8 million, in comparison to zero for the year ended December 31, 2022. The increase was due to the acquisition of Engine and revenue contribution from April 11, 2023 to December 31, 2023.
Current wording
Restructuring charges for the year ended December 31, 2024, were $1.3 million, in comparison to $0.5 million for the year ended December 31, 2023. The increase was due to more restructuring needed post FaZe acquisition as compared to Engine acquisition the prior year.
Previous wording
Interest expense for the year ended December 31, 2023 was $0.7 million, in comparison to $0.2 million for the year ended December 31, 2022. The $0.5 million increase was attributable to interest expense on convertible debt acquired in connection with the acquisition of Engine and line of credit that was closed in September 2023. We did not have comparable debt instruments outstanding during the comparative period.
Current wording
Interest expense, net for the year ended December 31, 2024 was $0.6 million, in comparison to $0.7 million for the year ended December 31, 2023. After removing interest income recognized on the promissory notes from the disposal of Complexity on March 1, 2024 and Frankly Media assets on May 31, 2024, there was a large increase in interest expense. The increase was primarily related to interest expense on convertible debt acquired in connection with the acquisition of Engine and line of credit that was closed in September 2023. As such, the comparative prior year period did not include a full year of interest expense on these instruments.
Previous wording
We recognized a loss on debt extinguishment of $2.2 million during the year ended December 31, 2023, due to the extinguishment of the EB CD as part of the Convertible Note Refinance. There were no debt extinguishments during the year ended December 31, 2022.
Current wording
We recognized a loss on debt extinguishment of $1.0 million during the year ended December 31, 2024, in comparison to $2.2 million for the year ended December 31, 2023. The Company recognized a day one loss on issuance of debt of $1.4 million on July 8, 2024 in connection with the issuance of the Yorkville CD. The loss is presented net of the $0.3 million gain on extinguishment of the King Street CD which was paid down in full on July 10, 2024. The 2023 loss was due to the extinguishment of the EB CD as part of a convertible note refinance.
Previous wording
Change in fair value of investment for the year December 31, 2023, was $0.5 million in comparison to zero for the year ended December 31, 2022. Prior to the Engine acquisition, we did not have any investments. The change represents an observable price change in our investment accounted for under the measurement alternative of ASC 321 during the year ended December 31, 2023.
Current wording
Change in fair value of investment for the year December 31, 2024 was $0.5 million, in comparison to $0.5 million loss for the year ended December 31, 2023. The variance was not significant.
Previous wording
Change in fair value of warrant liability gain was $1.0 million for the year ended December 31, 2023, versus zero in the comparative period. Prior to the Engine acquisition, we did not have any liability measured warrants. The gain represents adjusting the liability measured warrants to fair value at the end of the reporting period, primarily driven by changes in our share price at the end of the period.
Current wording
Change in fair value of warrant liability gain was $80 thousand for the year ended December 31, 2024, in comparison to gain of $1.0 million for the year ended December 31, 2023. Prior to the Engine acquisition, we did not have any liability measured warrants. The gain represents adjusting the liability measured warrants to fair value at the end of the reporting period, primarily driven by changes in our share price. The large reduction in gain is primarily driven by the expiration of the majority of the liability measured warrants, and therefore the change in fair value over the current period is not significant.
Previous wording
Arbitration settlement reserve was $1.0 million gain for the year ended December 31, 2023, compared to zero in the comparative period. Prior to the Engine acquisition, we did not have an arbitration settlement reserve. The change represents adjusting the arbitration settlement reserve to fair value at the end of the reporting period, primarily driven by changes in our share price at the end of the period.
Current wording
Arbitration settlement reserve was $0.2 million gain for the year ended December 31, 2024, in comparison to gain of $1.0 million for the year ended December 31, 2023. Prior to the Engine acquisition, we did not have an arbitration settlement reserve. The change represents adjusting the arbitration settlement reserve to fair value at the end of the reporting period, primarily driven by changes in our share price.
Previous wording
Income tax benefit for the year ended December 31, 2023, was $55 thousand, in comparison to $0.3 million for the year ended December 31, 2022. The change was trivial between the two periods and relates to change in deferred tax liabilities during the year.
Current wording
Income tax benefit for the year ended December 31, 2024, was $0, in comparison to $55 thousand for the year ended December 31, 2023. The change was trivial between the two periods and relates to change in deferred tax liabilities during the year.
Previous wording
As of December 31, 2023, we had a working deficit of $13.9 million, compared to $0.4 million as of December 31, 2022. The decrease in the working capital resulted mostly from the liabilities related to the Engine acquisition as well as from the Company’s use of cash in operating activities as described in the cash flows section. We have not yet realized profitable operations and have incurred significant losses to date resulting in a cumulative deficit of $73.4 million as of December 31, 2023 (December 31, 2022: $42.1 million).
Current wording
As of December 31, 2024, we had a working deficit of $18.3 million, compared to $13.9 million as of December 31, 2023. The increase in the working capital resulted mostly from the liabilities related to the FaZe acquisition as well as from the Company’s use of cash in operating activities as described in the cash flows section. In addition, as of December 31, 2024, there is $6.5 million of convertible debt at fair value reflected as current, but the bulk of this related to the Yorkville CD which was converted to equity subsequent to year end. We have not yet realized profitable operations and have incurred significant losses to date resulting in a cumulative deficit of $122.2 million as of December 31, 2024 (December 31, 2023: $73.4 million).
Previous wording
Since inception, we have financed our operations primarily by issuing equity and debt, including the proceeds of the acquisition of Engine. As of December 31, 2023, our principal sources of liquidity were our cash in the amount of $3.0 million, available borrowings under our line of credit as well as new debt and/or equity issuances.
Current wording
Since inception, we have financed our operations primarily by issuing equity and debt. As of December 31, 2024, our principal sources of liquidity were our cash in the amount of $12.1 million, available borrowings under our line of credit as well as new debt and/or equity issuances.
Previous wording
As discussed in recent developments above, we obtained gross proceeds of $10.0 million from the PIPE Financing on March 7, 2024.
Current wording
As discussed in recent developments above, we obtained gross proceeds of $10.0 million from the Kalish CD issued on December 15, 2024. Further, as discussed above, the Kalish CD was exchanged on April 1, 2025 for the Company’s remaining preferred shares held in Faze Media Inc.
Previous wording
The Company used cash of $16.1 million in operating activities during the year ended December 31, 2023, compared with $11.8 million in the comparative period. The use of funds in operating activities is described in the Results of Operations section above.
Current wording
The Company used cash of $30.6 million in operating activities during the year ended December 31, 2024, compared with $16.1 million in the comparative period. The use of funds in operating activities is described in the Results of Operations section above.
Previous wording
Net cash provided by investing activities was $18 thousand for the year ended December 31, 2022.
Current wording
Net cash provided by investing activities was $2.7 million for the year ended December 31, 2024, consisting primarily of $2.4 million cash acquired in the FaZe Clan acquisition.
Previous wording
Net cash provided by investing activities was $14.1 million for the year ended December 31, 2023, consisting of $11.3 million from the acquisition of Engine coupled with proceeds of $2.8 million from the disposal of the Frankly radio assets.
Current wording
Net cash provided by investing activities was $14.1 million for the year ended December 31, 2023, consisting primarily of $11.3 million in cash acquired in the Engine acquisition and $2.75 million cash from the disposal of Frankly Media radio assets.