Company: GAME
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001641172-25-004869
Chunk: 517

Company: GameSquare Holdings, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 3
Chunk 517
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Allinsports - In April 2020, Engine announced
its renegotiation of the acquisition of Allinsports. The revised purchase agreement provided for the acquisition of 100% of Allinsports
in exchange for the issuance of 241,666 common shares of the Engine and other considerations, including payments of $1,200,000 as a portion
of the purchase consideration. In September 2020, Engine advised the shareholders of Allinsports that closing conditions of the transaction,
including the requirement to provide audited financial statements, had not been satisfied.

In response, in November 2020, the shareholders of
Allinsports commenced arbitration in Alberta, Canada seeking, among other things, to compel Engine to complete the acquisition of Allinsports
without the audited financial statements, and to issue 241,666 common shares of Engine to those shareholders. As alternative relief, the
shareholders of Allinsports sought up to $20.0 million in damages. A hearing in this matter was held in May of 2021, and by a decision
dated September 30, 2021, the Arbitrator determined that the closing of the transaction had previously occurred and directed Engine to
issue 241,666 common shares. In conjunction with completion of the Arrangement, the Company assumed this obligation to issue 241,666 common
shares. The Company has not yet issued the shares and is pursuing relief against Allinsports shareholders for various alleged breaches
of the share purchase agreement. The Company recognized a liability for the arbitration ruling of $1.5 million, which represented the
fair value of the common shares directed to be delivered as of April 11, 2023, the closing date of the Arrangement. The liability is recorded
as arbitration reserve on the Company’s consolidated balance sheets. This liability will be adjusted to fair value at the end of
each reporting period.

Promissory Note Recovery - By Order to Continue
dated May 5, 2022, Engine was substituted in as the plaintiff in a matter pending in the Ontario Superior Court of Justice, seeking recovery
of $2.1 million (€1.9 million) of principal and additional amounts of accrued interest under promissory notes acquired by Engine.
The matter is in the discovery stage.

SPAC Complaint - A complaint has been filed
in Delaware Chancery Court against several former directors of Faze Holdings, Inc.’s predecessor, B Riley 150 Merger Corp., and
several other B Riley