Publicly traded esports and gaming company GameSquare (NASDAQ:GAME, TSXV:GAME) announced Wednesday that it has completed the sale of the “non-core radio business assets” of its wholly owned subsidiary Frankly Media to SoCast in an “asset sale” valued at $3.4M USD. The company also announced that it has refinanced its convertible debt.
“After completing four acquisitions in under three years, we believe there are opportunities to streamline our operations, enhance our cost structure and add non-dilutive capital to support our business by unlocking the value of certain non-core assets such as the radio assets of Frankly,” noted Justin Kenna, CEO of GameSquare, in a release. “In addition, selling just the radio assets of Frankly at approximately 1.8x trailing 12-month sales, compared to GameSquare’s current market cap of approximately 0.4x trailing 12-month sales, supports our strategies to unlock and drive value for our shareholders.”
In its announcement, GameSquare noted that it has retired the previous debenture valued at $5M USD that was due to mature in February of 2024. A “debenture” is a type of debt instrument that is typically not backed by any collateral and usually (but not always) has a term greater than 10 years. That debenture has been replaced with a $5.8M convertible note issued to an “arm’s length party” that “bears interest at 12.75%, has a two-year term, and is convertible at the holder’s option into common shares of [the] company at a price of US$5 per share (subject to standard anti-dilution provisions).”
GameSquare is better known as the owner of Texas-based esports organization, Complexity Gaming, and soon—following the close of its transaction in the first quarter or this year (assuming it receives the necessary shareholder and regulatory approvals)— FaZe Clan. The company backed by Dallas Cowboys owner Jerry Jones owns several esports assets, including UK-based esports talent agency Code Red Esports, gaming and esports media company GCN, and gaming and lifestyle marketing agency Cut+Sew (Zoned), among others. It is also the home to popular content creators Tyler “Ninja” Blevins and Tim “TimTheTatman” Betar.
Editor’s note: An earlier iteration erroneously claimed that GameSquare had unloaded Frankly Media, when in fact it sold assets from Frankly Media to SoCast. We apologize for the error.