ESports may be on the rise, but champion clan FaZe is struggling financially.

FaZe released its financial report for the final quarter of 2022, which showed that it ended the year with a $54M deficit.

During the same period, FaZe reported $70M in increased revenue, which wasn’t enough to offset losses.

FaZe Clan went public last year after a highly-publicized merger with B. Riley Principal 150 Merger Corp. FaZe’s public move came via a SPAC vehicle, a merger that allows private firms easier access to the market with fewer regulations and restrictions.

However, SPAC companies have not performed well in recent years, and FaZe is no exception.

When they first went public, FaZe expected strong enthusiasm from young investors, but they never materialized. When shares kept dropping, even initial investors distanced themselves from the company.

FaZe received a deficiency notice from NASDAQ. Their share prices must stay above $1 for at least ten consecutive days in a row sometime over the next 180 days to avoid being delisted on NASDAQ.

CEO Lee Trink told shareholders in a letter, “We are optimistic as ever about the future of FaZe Clan. We believe we have a gifted roster of esports athletes and content creators, a talented and dedicated team committed to our mission, and a loyal fan base that continues to grow and engage with our brand.”