UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
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Item 1.01. Entry into Material Definitive Agreement.
On November 5, 2024, GameSquare Holdings, Inc. (the “Company”) entered into a Standstill and Repayment Agreement (the “Standstill Agreement”) with YA II PN, Ltd. (the “Holder”).
Under the Standstill Agreement, the Holder agrees that until November 30, 2024 (the “Standstill Period”), Holder shall not sell the 640,000 shares (the “Issued Shares”) of the Company’s common stock the Holder currently holds which were acquired by the Holder pursuant to its rights under the Standby Equity Purchase Agreement between Holder and the Company dated July 8, 2024 (the “SEPA”) and the Convertible Promissory Note between Holder and the Company dated July 8, 2024 (the “Note”) issued thereunder.
During the Standstill Period, the Company may purchase or arrange for third parties to purchase directly from Holder all or a portion of the Issued Shares held by Holder, at the then current market price of the Company’s shares, provided that such market price is at least $0.70 per share. If the Company or a suitable third party do not purchase all of the Issued Shares from the Holder, then the Company shall make a payment to the Holder in an amount equal to the number of unsold Issued Shares held by the Holder as of the last day of the Standstill Period multiplied by the difference between the closing price of the Company’s shares as of the last day of the Standstill Period and $0.70 per share.
In exchange for the Holder’s performance under the Standstill Agreement, the Company will make cash payments to Holder in the amount of $1,900,000 (the “Redemption Amount”), payable in installments as set forth in the Standstill Agreement, 93% of which will be applied to reduction of the principal balance under the Note, and the remaining 7% to the applicable redemption premium.
Notwithstanding the forgoing, the Holder may sell the Issued Shares during the Standstill Period, (i) at any time after the occurrence of an event of default (as defined in the Note and SEPA), (ii) if at any time the Company has failed to pay any installment payment of the required Redemption Amount to the Holder, or (iii) at any time provided such sales are at a price per share of at least $1.00 per share.
Also under the Standstill Agreement, the Holder agrees that until December 31, 2024 (the “Conversion Standstill Period”), (a) the Holder may not convert any portion of the outstanding amount of principal under the Note into common shares of the Company and will not deliver any conversion notices under the Note to the Company, (b) the Holder may not issue any investor notices under the SEPA to Company, and (c) the Company will not submit any advance notices under the SEPA to the Holder. The limitations set forth in (a) and (b) of this paragraph shall not apply (i) any time after the occurrence of an event of default (as defined in the Note and SEPA), (ii) if at any time the Company has failed to pay any installment payment of the required Redemption Amount to the Holder, or (iii) if waived in writing by the Company.
This summary is qualified in its entirety by reference to the text of the Standstill Agreement, which is included as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description | |
| 10.1 | Standstill and Repayment Agreement by and between GameSquare Holdings, Inc. and YA II PN, Ltd., dated as of November 5, 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: November 6, 2024 | By: | /s/ Justin Kenna |
| Name: | Justin Kenna | |
| Title: | Chief Executive Officer and Director | |