Company: GAME
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-023972
Chunk: 166

Company: GameSquare Holdings, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 1
Chunk 166
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, management believes the foregoing efforts will, when implemented, strengthen our DC&P
and ICFR. Management will take additional remedial actions as necessary as they continue to evaluate and work to improve the Company’s
control environment.

Changes
in Internal Control Over Financial Reporting

There
were no changes in the Company’s internal control over financial reporting that occurred during the six months ended June 30,
2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over
financial reporting.

41

PART
II - OTHER INFORMATION

ITEM
1. LEGAL PROCEEDINGS

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.

Promiss