Company: GAME
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010979
Chunk: 94

Company: GameSquare Holdings, Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 94
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Liability-classified warrants having CAD exercise price

The
functional currency of the Company is USD and certain of the Company’s warrants have an exercise price in CAD, resulting liability
classification of the warrants.

The
following is a summary of changes in the value of the warrant liability for the three months ended March 31, 2025:

Schedule of changes in value of warrant liability

    Amount 
  
    Balance, December 31, 2024 
    $14,314 
  
    Change in fair value 
     (5,347)
  
    Foreign exchange 
     24 
  
    Balance, March 31, 2025 
    $8,991 

The
following assumptions were used to determine the fair value of the warrant liability using the Black-Scholes option pricing model:

Schedule of assumptions fair value of warrant liability 

    March
    31, 2025  
    December
    31, 2024 
  
    Share price 
     CAD$0.85
                                              
     CAD$1.19

    Term, in years 
     2.50  
     2.75 
  
    Exercise price 
     CAD$9.68  
     CAD$9.68 
  
    Expected volatility 
     100.00% 
     100.00%
  
    Risk-free interest rate 
     2.44% 
     2.85%
  
    Expected dividend yield 
     0% 
     0%

    18

Volatility
was estimated by using the average historical volatility of the Company. The expected life in years represents the period of time that
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