Company: GAME
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023589
Chunk: 302

Company: GameSquare Holdings, Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part II, Item 1A
Chunk 302
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 In periods of market stress or regulatory
disruption, we may be unable to sell Ethereum at favorable prices, or at all, which could impact our liquidity and financial flexibility.

We
may not achieve the expected benefits from purchasing cryptocurrencies, and such strategy may not align with investor expectations.

While
we may pursue the purchase of cryptocurrency, such as Ethereum, by way of direct or indirect ownership, for strategic, treasury, or investment
purposes, there is no assurance that this strategy will generate positive returns or provide a long-term benefit. Investors may not support
our allocation of corporate funds to a highly speculative asset, and such use of proceeds could adversely affect investor perception
and our stock price.

49

Regulatory
change reclassifying Ethereum as a security could lead to our classification as an “investment company” under the Investment
Company Act of 1940, as amended, or the 1940 Act, and could adversely affect the market price of Ethereum and the market price of our
common stock.

Under
Sections 3(a)(1)(A) and (C) of the 1940 Act, a company generally will be deemed to be an “investment company” for purposes
of the 1940 Act if (1) it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing,
reinvesting or trading in securities or (2) it engages, or proposes to engage, in the business of investing, reinvesting, owning, holding
or trading in securities and it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total
assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. We do not believe that we are an “investment
company,” as such term is defined in the 1940 Act, and are not registered as an “investment company” under the 1940
Act as of the date of this prospectus.

While
senior SEC officials have stated their view that Ethereum is not a “security” for purposes of the federal securities laws,
a contrary determination by the SEC could lead to our classification as an “investment company” under the 1940 Act, if the
portion of our assets consists of investments in Ethereum exceeds 40% safe harbor limits prescribed in the 1940 Act, which would subject
us to significant additional regulatory controls that could have a material adverse effect on our business and operations and may also