GameSquare Esports Inc said it has signed a letter of intent for a US$5 million credit facility to be provided by an entity to be established by Goff Capital Inc and Blue & Silver Ventures Limited, a Jerry Jones owned company.
The Toronto-based gaming and esports company said the credit facility will provide the company with additional access to capital to execute on its strategic priorities of developing profitable, cash flowing digital agencies, and a content creation organization as GameSquare businesses connect global brands with gaming fans.
The credit facility would bolster the company's $7.7 million cash-on-hand as of December 31, 2021. GameSquare expects to complete negotiations and strike a definitive agreement pertaining to the credit facility in the coming weeks.
READ: Gamesquare Esports announces 40% rise in league fees paid to its subsidiary Complexity Gaming
"This US$5 million credit facility provides GameSquare with growth capital, while managing dilution in a challenging capital market environment. It also demonstrates the strong support and confidence we have from our partners and investors," GameSquare CEO Justin Kenna said in a statement.
"We have made great progress integrating the profitable digital agencies that we have acquired, and we continue our path toward profitability. On the content creation side, we expect to provide an update on growth of our social following and media network which is leading to an increased sales pipeline and provides the company confidence in its FY2022 revenue guidance of $28 million," he added.
Meanwhile, Travis Goff of Goff Capital Inc, who is also a board member at GameSquare, noted that GameSquare continues to "execute on all fronts."
“We see significant growth going forward and are thrilled to continue to support the company and team during these exciting times," Goff added.
GameSquare pointed out that the lender is an insider as Goff Capital and Blue & Silver Ventures each own or control greater than 10% of the shares of the company. Accordingly, the credit facility will represent a related party transaction, said the company.
GameSquare owns a portfolio of companies including Code Red Esports Limited, an esports talent agency serving the UK, Reciprocity Corp, which provides the group access to Asia, Latin America and North America, NextGen Tech LLC, doing business as Complexity Gaming, and Cut+Sew and Zoned, a gaming and lifestyle marketing agency based in Los Angeles, US.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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