Company: GAME
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001641172-25-004869
Chunk: 204

Company: GameSquare Holdings, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1B
Chunk 204
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 upon which the awards were granted such as stock price, term, and stock volatility. At each financial
position reporting date, the amount recognized as an expense is adjusted to reflect the actual number of awards, for which the related
service and non-market vesting conditions are expected to be met. Share based payments expense is adjusted for subsequent changes in
management’s estimate of the number of Options that are expected to vest.

Restricted
share units

For
each Restricted Share Units (“RSU”) granted, the Company recognizes an expense equal to the market value of a common share
at the date of grant and for each RSU granted, the Company recognizes an expense equal to the fair value of the RSU estimated using a
Black Scholes model at grant date, based on the number of RSUs expected to vest, recognized over the term of the vesting period, with
a corresponding increase to additional paid-in capital. Share based payments expense is adjusted for subsequent changes in management’s
estimate of the number of RSUs that are expected to vest. The effect of these changes are recognized in the period of the change.

Warrants

The
Company’s warrants that have an exercise price in the functional currency of the Company are equity-classified. The grant-date
fair value of these warrants is recorded in additional paid-in capital on the consolidated balance sheets.

For
equity-settled share-based payment transactions, including Options, RSUs granted to officers and directors of the Company and warrants
granted to advisors in a financing transaction, the fair value of the awards is established based on the value of the goods or services
received, unless that fair value cannot be estimated reliably, in which cases, the Company measures the value, and the corresponding
increase in equity, indirectly, by reference to the fair value of the equity instruments granted.

(x)
Derivative warrant liability

Certain
of the Company’s warrants are recorded as a derivative liability pursuant to ASC 815 due to having an exercise price in a currency
other than the Company’s functional currency. The derivative warrant liability is recognized on the consolidated balance sheets
at fair value and classified based on each warrant’s maturity date. Changes in the fair value of the warrant liability are recognized
in the consolidated statements of operations and comprehensive loss.

(y)
Income taxes

Income
tax on the profit or loss for the periods presented comprises current and deferred tax. Income tax is recognized in profit or loss except
to the extent that it relates to items recognized directly in equity, in which case it is