Esports company and FaZe Clan owner GameSquare Holdings has secured a $10m (~£7.8m) convertible note deal with investment entity GigaMoon Media.
The transaction intends to support Gamesquare’s strategy to secure non-dilutive capital. Part of the proceeds from the deal intend to repay the company’s existing equity line facility with Yorkville Advisors Global L.P.
Earlier this year, GameSquare announced a $20m (~£15.61m) Pre-Paid Advance Agreement (PPA) with an investment fund managed by Yorkville.
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The convertible note, set to mature on December 31st, 2025, will convert into either shares of GameSquare’s common stock at a conversion price of $2.50 per share, or 5.725m shares of FaZe Media Series A-1 Preferred Stock held by GameSquare.
Launched last year following the merger of GameAquare and FaZe Clan, FaZe Media is a subsidiary that houses FaZe Clan’s media-related IP. In June, GameSqaure sold 25.5% of the subsidiary to one of the North American esports organisation’s founders. Richard ‘FaZe Banks’ Bengston, for $9.5m (~£7.5m).
Interestingly, GigaMoon Media is controlled by Matt Kalish, the President and Co-Founder of fantasy sports platform DraftKings. Alongside the launch of FaZe Media, the subsidiary secured an $11m (~£8.68m) investment from Kalish.
If GigaMoon Media opts to convert the note into FaZe Media shares, it would increase GameSquare’s market valuation to $44m, according to the company. GameSquare noted that the entity’s current market cap stands at ~$32m.
In a release, Justin Kenna, CEO of GameSquare stated: “Over the past 12 months, we have successfully pursued shareholder-friendly transactions that raise non-dilutive capital and today’s announcement reflects a continuation of this approach.
“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. I am also pleased to announce that we intend to repay the existing equity line facility with Yorkville. With a strengthened balance sheet and capital position, we believe we have the financial resources in place to support the growth strategies we are pursuing and to take advantage of growing demand trends currently underway across our global markets.”
