GameSquare Holds $25.9M in Crypto; $2.1M Cash, $12.1M Notes

GameSquare Holdings reported $25.9 million in combined crypto, other tokens and cash at June 30 in an Aug. 12 earnings exhibit, listing 15,080.51 ETH. The exhibit showed $2.1 million of cash on hand and $12.1 million of current promissory notes payable. Restricted cash of $2.36 million was reported separately. The company did not disclose how much ETH, if any, remained pledged against the notes as of June 30.

The company recorded a $7.83 million realized and unrealized loss tied to its crypto holdings and an ETH-fund investment during the quarter. That line produced a six-month loss of $22.42 million. GameSquare’s GAAP consolidated net loss for the period was $10.65 million. Revenue for the quarter was $18.48 million, and company-defined adjusted EBITDA was $961,636 after adding back the crypto loss and other items in the unaudited non-GAAP reconciliation, which treats treasury gains and losses separately from operating results.

Earlier SEC disclosures for the quarter ended March 31 described ETH-backed borrowings carrying annual interest of 8.5% to 9.5% and automatic successive 60-day extensions unless either party gave notice. The borrowing balance was $9.5 million at March 31 and rose to $11.1 million in April. At March 31, 6,958.15 ETH, then valued at about $14.6 million, secured those borrowings and could not be freely transferred.

Those filings set collateral trigger points: a collateral ratio below 130% would prompt a margin call, and a ratio below 120% would permit liquidation after a 24-hour cure period. The June earnings exhibit did not update the amount of ETH then pledged, nor did it disclose the notes’ updated maturity or rollover status. As of Aug. 13, the company had not filed a June-quarter Form 10-Q that included those details.

In a July 15 capital-allocation update, GameSquare reported selling 1,209 ETH and stated it held approximately 14,300 ETH on July 14. That reported July balance was lower than the June 30 ETH snapshot but the company did not provide a full reconciliation between the reported balances.

At the June 30 reported values, the combined pool of crypto and cash exceeded the principal of the current promissory notes, while cash alone was smaller than the note balance. The company’s public filings and earnings exhibit separate operating results from treasury gains and losses, treating the crypto impairment as a non-operating accounting item in non-GAAP metrics.