Company: GAME
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010979
Chunk: 152

Company: GameSquare Holdings, Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 8
Chunk 152
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warrants issued are expected to be outstanding. The risk-free rate is based on government treasury bond rates issued with a remaining
term approximately equal to the expected life of the warrants.

The
Company had 123,930 liability-classified warrants with a weighted average exercise price of CAD$9.68 outstanding as of March 31, 2025
and December 31, 2024. There we no changes during the three months then ended March 31, 2025.

(b)
Equity-classified warrants

As
discussed in Note 4 above in conjunction with the acquisition of FaZe, the Company issued 775,415 warrants with an acquisition fair value
of $26 thousand, included in the FaZe acquisition purchase price consideration.

As
discussed in Note 9, in conjunction with the PIPE Financing on March 7, 2024, 1,079,136 warrants were issued with an exercise price of
$1.55 and a contractual term of 5 years. The relative fair value of the warrants of $1.1 million was estimated using the Black-Scholes
option pricing model with the following assumptions: share price of $1.56, expected dividend yield of 0%, expected volatility rate of
120.00%, based on the historical volatility of comparable companies, a risk free rate of 3.36% and an expected life of 5 years. The warrants
have an exercise price in USD and are equity-classified.

The
Company had 1,854,551 equity-classified warrants with a weighted average exercise price of $37.63 outstanding as of March 31, 2025 and
December 31, 2024. There we no changes during the three months then ended March 31, 2025.

13.
Related party transactions

(a)
Convertible debenture with a director of the Company as counterparty

On
September 1, 2022, Engine extended convertible debentures that were due to expire in October and November 2022 with an aggregate principal
amount of $1.3 million. Key terms include (a) maturity date of August 31, 2025, (b) interest rate of 7% (interest to be paid in full
at maturity) and (c) conversion price of $4.40. The convertible debenture is beneficially held by a director of the Company (see Note
8).

(b)
Promissory note with significant investor

On
March