Enthusiast Gaming Reports EBITDA Growth as Filings Show C$45M Debt in Default

What the report says

Enthusiast Gaming reported a fourth consecutive quarter of positive adjusted EBITDA on Aug. 12, the same day it filed interim financial statements disclosing that all C$45 million CAD ($32.4 million USD) of its debt sits in default and that its cash cannot fund operations for the next 12 months.According to the company’s Aug. 12 earnings release, second-quarter revenue was C$6.9 million ($5 million), a 3% decrease year-over-year, while gross margin increased to 89% from 88% and adjusted EBITDA more than doubled to C$0.7 million ($504,000) from C$0.3 million ($216,000) a year earlier.

Trailing twelve-month adjusted EBITDA reached C$5.1 million ($3.7 million).“Q2 marked our fourth consecutive quarter of positive Adjusted EBITDA, giving us a full year of consistent profitability and $5.1 million of trailing twelve-month Adjusted EBITDA,” said Alex Macdonald, CEO of Enthusiast Gaming, in the release.The release does not contain the words going concern, forbearance, default or covenant.The interim financial statements filed the same day contain all four.Those statements disclose a working capital deficiency of C$51.9 million ($37.4 million), an accumulated deficit of C$486.2 million ($350 million), and cash of C$2.04 million ($1.5 million), down from C$3.26 million ($2.3 million) at the end of December.

The entire C$45 million debt load sits in current liabilities because the company is in breach of covenants “for which waivers have not been received.” The statements say that “the Company’s cash resources as of June 30, 2026, are not sufficient to fund its planned business operations over the next 12 months,” and conclude that these factors “represent a material uncertainty that casts substantial doubt” on the going concern assumption. Auditor KPMG LLP first attached a going-concern warning to the company’s 2023 annual statements, in a report dated April 1, 2024. The 2022 statements carried none.The debt dates to the company’s acquisition years.

Key details

Enthusiast Gaming borrowed C$20 million ($14.4 million) from Beedie Investments Ltd. in July 2024, secured by a second-ranking interest over substantially all of its assets and subordinated to term and operating facilities from a senior bank the filings never name.In July 2025, the company disclosed that it had defaulted under both. Beedie and the bank agreed to forbear, a special committee of John Albright, Jordan Gnat and Thomas Hearne was formed, and Oakvale Capital Partners LLP was engaged as the committee’s financial advisor on a strategic review covering recapitalization and refinancing. The company said it intended to enter a definitive agreement by the end of 2025, and the Beedie forbearance was written to end early if a lender-approved strategic transaction closed on or before Dec.

1, 2025.Neither date produced an announcement.Both forbearances have since run out. The bank’s has been extended “on a day-to-day basis since December 31, 2025,” meaning it can be withdrawn without notice. Beedie’s “ended on March 31, 2026,” and default interest on its second loan began accruing April 1 and is being added to principal. Both lenders have been charging default interest since Jan. 1, 2025; in the first half of 2026 alone, C$1.21 million ($871,000) of paid-in-kind and default interest was added to the principal of the Beedie loans rather than paid in cash.

The filings state that the covenant breach “provides the Lenders the right to accelerate repayment,” rendering the loans “due and payable immediately.”The more immediate pressure is a payment schedule. Monthly principal repayments of C$362,745 ($261,000) “resumed in June 2026 at the Bank’s request,” according to the statements. Against C$2.04 million of cash and negative operating cash flow of C$917,000 ($660,000) in the first half, six more of those payments would exhaust the company’s cash before the end of the year, before any operating burn. Its operating line is drawn to C$7.3 million ($5.3 million) of a C$7.5 million ($5.4 million) limit.That both lenders have held off is consistent with their positions rather than with confidence in the business.

More from the announcement

The bank ranks first, is owed C$16.5 million ($11.9 million) and is being repaid on a schedule; enforcement would convert an orderly recovery into ownership of a digital media and events company. Beedie ranks behind it against a balance sheet that is almost entirely goodwill and intangible assets: C$31.6 million ($22.8 million) and C$24.6 million ($17.7 million) of C$61.5 million ($44.3 million) in total assets, or 91%. Property and equipment is carried at C$5,356 ($3,900).