Company: GAME
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001641172-25-004869
Chunk: 835

Company: GameSquare Holdings, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 5
Chunk 835
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 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 recognized in equity.

Current
tax expense is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at year
end, adjusted for amendments to tax payable with regards to previous years.

Deferred
tax is provided using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for the following temporary
differences: the initial recognition of goodwill; the initial recognition of assets or liabilities in a transaction that is not a business
combination and that affects neither accounting nor taxable profit; and differences relating to investments in subsidiaries, associates,
and jointly controlled entities to the extent that they will probably not reverse in the foreseeable future. The amount