Company: GAME
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001641172-25-004869
Chunk: 368

Company: GameSquare Holdings, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1C
Chunk 368
---

compensation expense related to the vesting of RSUs was $1.3 million and $1.4 million for the years ended December 31, 2024 and 2023,
respectively, and is included in general and administrative expense on the consolidated statements of operations and comprehensive loss.

16.
Warrants

(a)
Liability-classified warrants having CAD exercise price

In
conjunction with completion of the Arrangement (see Note 4), outstanding warrants of GSQ were cancelled and the Company issued replacement
warrants with identical terms. The functional currency of the Company is USD and the replacement warrants have an exercise price in CAD.
The issuance of the replacement warrants was accounted for as a modification to equity-classified instruments that resulted in reclassification
to a liability. As a result, 927,228 warrants of GSQ with a modification date fair value of $0.9 million, were reclassified to a derivative
warrant liability in accordance with ASC 815, Derivatives and Hedging, on April 11, 2023. Furthermore, 269,601 of Engine’s
warrants, with an acquisition date fair value of $0.2 million, included in the Engine reverse acquisition purchase consideration (see
Note 4), have an exercise price in CAD and are similarly liability classified. No liability-classified warrants were issued or outstanding
prior to the completion of the Arrangement.

    F-41

The
following is a summary of changes in the value of the warrant liability during the years ended December 31, 2024 and 2023:

 Schedule of changes in value of warrant liability

    Amount 
  
    Balance, December 31, 2022 
    $- 
  
    Acquisition of Engine 
     153,275 
  
    Reclassify GSQ Esports Inc. warrants to warrant liability 
     900,818 
  
    Change in fair value 
     (968,757)
  
    Foreign exchange 
     16,948 
  
    Balance, December 31, 2023 
    $102,284 
  
    Change in fair value 
     (84,449)
  
    Foreign exchange 
     (3,521)
  
    Balance, December 31, 2024 
    $14,314 

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