GAME GameSquare Holdings Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): October 16, 2024

 

GameSquare Holdings, Inc.

(Exact Name of Registrant as Specified in Its Charter)

 

Delaware		001-39389		99-1946435
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

6775 Cowboys Way, Ste. 1335 Frisco, Texas, USA		75034
(Address of Principal Executive Offices)		(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: (216) 464-6400

 

N/A

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol		Name of each exchange on which registered
Common Stock, no par value per share		GAME		The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

Item 2.02 Results of Operations and Financial Condition.

 

On October 17, 2024, GameSquare Holdings, Inc. (the “Company”) issued a press release announcing its preliminary financial results for the third quarter ended September 30, 2024, a copy of which is furnished pursuant to Item 2.02 as Exhibit 99.1 hereto. The preliminary financial results contained in the press release do not present all information for an understanding of the Company’s financial condition as of September 30, 2024 or its results of operations for the third quarter ended September 30, 2024. The review of the Company’s financial statements for the third quarter ended September 30, 2024 is ongoing and could result in changes to the information in the press release.

 

In accordance with General Instruction B.2. of Form 8-K, the information in this report furnished pursuant to Item 2.02, including Exhibit 99.1 attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, or to the liabilities of Section 11 and 12(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), nor shall it be deemed incorporated by reference into any of the Company’s filings under the Exchange Act or the Securities Act, except as expressly set forth by specific reference in such a filing.

 

Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

 

Nasdaq Minimum Bid Price Notice

 

On October 16, 2024, the Company received a letter (the “Minimum Bid Price Notice”) from the Nasdaq Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that for the last 30 consecutive business days, the closing bid price for the Company’s common stock (the “Common Stock”) has been below the minimum $1.00 per share required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Nasdaq Minimum Bid Price Requirement”). The Minimum Bid Price Notice has no immediate effect on the listing of the Common Stock, and the Common Stock will continue to trade The Nasdaq Capital Market.

 

In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been provided an initial compliance period of 180 calendar days, or until April 14, 2025, to regain compliance with the Nasdaq Minimum Bid Price Requirement, which requires that the closing bid price of the Common Stock meet or exceed $1.00 per share for a minimum of ten consecutive trading days.

 

If the Company is unable to regain compliance with the Nasdaq Minimum Bid Price Requirement, the Company may be eligible for an additional 180-day compliance period. To qualify, the Company will be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the Nasdaq Minimum Bid Price Requirement and will need to provide written notice to Nasdaq of its intention to cure the deficiency during the second compliance period. If the Company does not qualify for the second compliance period or fails to regain compliance during the second 180-day period, Nasdaq will notify the Company of its determination to delist the Common Stock, at which point the Company would have an opportunity to appeal the delisting determination to a hearings panel.

 

The Company will continue to monitor the bid price of the Common Stock and consider its available options to regain compliance with the Nasdaq Minimum Bid Price Requirement. However, there can be no assurance that the Company will be able to regain compliance with the Nasdaq Minimum Bid Price Requirement.

 

 

Forward-Looking Statements

 

Certain information contained in this Current Report on Form 8-K includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We may in some cases use terms such as “predicts,” “believes,” “potential,” “continue,” “anticipates,” “estimates,” “expects,” “plans,” “intends,” “may,” “could,” “might,” “likely,” “will,” “should” or other words that convey uncertainty of the future events or outcomes to identify these forward-looking statements. Our forward-looking statements are based on current beliefs and expectations of our management team that involve risks, potential changes in circumstances, assumptions, and uncertainties, including statements regarding the Company’s intent to file for a hearing, our ability to regain compliance with the Nasdaq continued listing requirements, and our financial condition, growth and strategies. Any or all of the forward-looking statements may turn out to be wrong or be affected by assumptions we make that later turn out to be incorrect, or by known or unknown risks and uncertainties. These forward-looking statements are subject to risks and uncertainties including risks related to our ability to regain compliance with Nasdaq’s continued listing requirements or otherwise maintain compliance with any other listing requirement of the Nasdaq Capital Market, including the Nasdaq Minimum Bid Price Requirement, timely file our request for a hearing, the potential de-listing of our shares from the Nasdaq Capital Market due to our failure to comply with the Nasdaq Minimum Bid Price Requirement, and the other risks set forth in our filings with the Securities and Exchange Commission, including in our Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q. For all these reasons, actual results and developments could be materially different from those expressed in or implied by our forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which are made only as of the date of this Current Report on Form 8-K. We undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances unless required by law.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit No.		Description
99.1		Press Release of GameSquare Holdings, Inc. issued on October 17, 2024.
104		Cover Page Interactive Data File (formatted as Inline XBRL).

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	GAMESQUARE HOLDINGS, INC.
	(Registrant)
Date: October 18, 2024	By:	/s/ Justin Kenna
	Name:	Justin Kenna
	Title:	Chief Executive Officer and Director

 

 

Exhibit 99.1

 

GameSquare Announces Preliminary Third Quarter 2024 Results and Provides Business Update

 

Preliminary Q3 revenue estimated to exceed $26.5 million

 

Expected adjusted EBITDA loss of approximately $2.4 million,
representing a $3.0 million improvement from Q2 2024

 

As a result of strong Q3 and YTD performance, GameSquare has increased
its 2024 annual proforma revenue guidance to $105 million to $110 million

FRISCO, TX / October 17, 2024 / GameSquare Holdings, Inc. (NASDAQ: GAME), (“GameSquare”, or the “Company”), today announced preliminary financial results for the third quarter ended September 30, 2024, and provided a business update for the fourth quarter of 2024. The Company expects to report third quarter financial results and host a conference call with investors on November 14, 2024.

 

Justin Kenna, CEO of GameSquare stated, “2024 is shaping up to be a transformative year for GameSquare, as we benefit from the strategies underway to drive organic sales growth, complete the integration of our recent acquisitions, and build a profitable organization. Our performance during the third quarter of 2024 demonstrates the progress we are making and the positive momentum underway as we execute against these initiatives.”

 

“Over the past nine months, we have increased the number of customers on retainer, grown our average contract value by 46%, more than tripled the number of UEFN world building campaigns deployed, and achieved record monthly contract wins in August 2024. These trends contributed to strong third quarter revenue, higher gross margin, and a significant improvement in profitability as compared to the second quarter of 2024. We expect to show further improvements in revenue and profitability going forward as our business scales and approaches breakeven,” Mr. Kenna continued.

 

“With the strong performance during the third quarter and year-to-date, we are increasing our annual revenue guidance and now expect annual proforma revenue of $105 million to $110 million for 2024, compared to our prior guidance of $100 million. The progress we are making is encouraging, and I want to thank everyone at GameSquare for their hard work and dedication,” concluded Mr. Kenna.

 

Preliminary 2024 Third Quarter Financial Results

 

			Q3 2024 (preliminary)
Revenue
Owned and Operated IP		$	9.4 million
Agency + Media		$	15.5 million
SaaS		$	1.6 million
Revenue		$	26.5 million

 

 

The Company currently estimates that 2024 third quarter gross margin was approximately 18%, compared to 14.8% for the second quarter of 2024. Third quarter gross margin benefitted from revenue mix, which was partially offset by start-up costs associated with new programs and relationships that are expected to benefit both revenue and profitability in the fourth quarter of 2024. Overall profitability for the third quarter of 2024 benefited from revenue growth and the Company’s cost-cutting initiatives. As a result, GameSquare expects adjusted EBITDA to be a loss of approximately $2.4 million, a $3.0 million improvement from an adjusted EBITDA loss of $5.4 million for the second quarter of 2024.

 

GameSquare Increases 2024 Annual Proforma Guidance

 

			2024 Nine Months Proforma* Results (preliminary)				2024 Full Year Guidance (proforma*)
Revenue		$	78.6 million			$	105 million - 110 million

 

*2024’s annual guidance is based on a proforma basis and includes a full 12 months of contribution from FaZe Clan, which was acquired on March 7, 2024. Guidance also assumes GameSquare continues to fully consolidate the financial results of FaZe Media, Inc.

 

Additional 2024 Guidance Includes

 

	●	$18+ million of cost savings associated with the FaZe Clan acquisition are expected for the 12 months ended December 31, 2024, compared to 12 months ended December 31, 2023
	●	Management anticipates sequential quarterly improvements to profitability throughout 2024, supported by sales growth, gross margin improvement, and the benefit of cost saving initiatives

 

GameSquare’s financial closing procedures for the third quarter ended September 30, 2024, are not yet complete. It is possible that the final results may differ from the preliminary results, and that the Company’s fourth quarter and annual 2024 outlook may change from the initial outlook discussed above between now and when results are finalized.

 

Third Quarter 2024 Earnings Conference Call

 

GameSquare will release its final third quarter of 2024 financial results after the market closes on November 14, 2024. In addition, GameSquare will host a conference call at 5:00 p.m. ET that day to discuss its results and business outlook. The event will be webcast live and can be accessed on GameSquare’s Investor Relations webpage.

 

 

About GameSquare Holdings, Inc.

 

GameSquare’s (NASDAQ: GAME) mission is to revolutionize the way brands and game publishers connect with hard-to-reach Gen Z, Gen Alpha, and Millennial audiences. Our next generation media, entertainment, and technology capabilities drive compelling outcomes for creators and maximize our brand partners’ return on investment. Through our purpose-built platform, we provide award winning marketing and creative services, offer leading data and analytics solutions, and amplify awareness through FaZe Clan, one of the most prominent and influential gaming organizations in the world. With one of the largest gaming media networks in North America, as verified by Comscore, we are reshaping the landscape of digital media and immersive entertainment. GameSquare’s largest investors are Dallas Cowboys owner Jerry Jones and the Goff family.

 

To learn more, visit www.gamesquare.com.

 

Forward-Looking Information

 

This news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of the applicable securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate, among other things, to: the Company’s and FaZe Media Inc.’s future performance, revenue, growth and profitability; and the Company’s and FaZe Media’s ability to execute their business plans. These forward-looking statements are provided only to provide information currently available to us and are not intended to serve as and must not be relied on by any investor as, a guarantee, assurance or definitive statement of fact or probability. Forward-looking statements are necessarily based upon a number of estimates and assumptions which include, but are not limited to: the Company’s and FaZe Media’s ability to grow their business and being able to execute on their business plans, the Company being able to complete and successfully integrate acquisitions, the Company being able to recognize and capitalize on opportunities and the Company continuing to attract qualified personnel to supports its development requirements. These assumptions, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: the Company’s ability to achieve its objectives, the Company successfully executing its growth strategy, the ability of the Company to obtain future financings or complete offerings on acceptable terms, failure to leverage the Company’s portfolio across entertainment and media platforms, dependence on the Company’s key personnel and general business, economic, competitive, political and social uncertainties. These risk factors are not intended to represent a complete list of the factors that could affect the Company which are discussed in the Company’s most recent MD&A. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. GameSquare assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.

 

Corporate Contact

 

Lou Schwartz, President

Phone: (216) 464-6400

Email: ir@gamesquare.com

 

Investor Relations

 

Andrew Berger

Phone: (216) 464-6400

Email: ir@gamesquare.com

 

Media Relations

 

Chelsey Northern / The Untold

Phone: (254) 855-4028

Email: pr@gamesquare.com

 

 

v3.24.3

Cover	Oct. 16, 2024
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Entity File Number	001-39389
Entity Registrant Name	GameSquare Holdings, Inc.
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Entity Tax Identification Number	99-1946435
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	6775 Cowboys Way
Entity Address, Address Line Two	Ste. 1335
Entity Address, City or Town	Frisco
Entity Address, State or Province	TX
Entity Address, Country	US
Entity Address, Postal Zip Code	75034
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Title of 12(b) Security	Common Stock, no par value per share
Trading Symbol	GAME
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false

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