Company: GAME
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023589
Chunk: 28

Company: GameSquare Holdings, Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 28
---
 services agreement.
An additional 8.4 million ANIME tokens were purchased in the open market as partial fulfillment required under the contract. Both tranches
are subject to a six-month holding restriction beginning August 12, 2025. In accordance with ASC 820, no adjustment to fair value is
made for this holder-specific restriction.

In
August 2025, the Company received 2,305,905 million REKT tokens as non-cash consideration under an agency services agreement. The tokens
are subject to a lockup as follows: Two-twelfths (2/12) will not have any restriction, the remaining ten-twelfths (10/12) will be subject
to lock up, provided that on each monthly anniversary of the effective date the lock up will expire on one-tenth (1/10) of the initial
total number of locked tokens such that on the tenth monthly anniversary of the effective date, the lock up shall have expired with respect
to all of the tokens. Effective date for lockup start is August 28, 2025. In accordance with ASC 820, no adjustment to fair value is
made for this holder-specific restriction.

6.
Investment in ETH fund

During
the nine months ended September 30, 2025, the Company contributed an aggregate of 15,630 ETH, with a fair value of $55.3 million at the
contribution dates, to the Dialectic Moonphase Feeder Fund LP (“Dialectic”) in exchange for limited partnership units of
Dialectic. The Company may redeem its interest with 30 days’ notice, subject to standard fund provisions. Dialectic is a Cayman
Islands limited partnership focused on decentralized finance (“DeFi”) yield strategies. The ETH was derecognized at fair
value under ASC 350-60 upon transfer and no gain or loss was recognized.

The
investment in Dialectic is subject to the provisions of ASC 321 and, because the investment in Dialectic does not have a readily determinable
fair value, the Company elected to use the NAV practical expedient and, therefore, the investment is not included in the fair value hierarchy.

The
investment generated yield in August and September 2025 of $588,242 which is included in revenue in the condensed consolidated statements
of operations. Further, unrealized gains on changes in market value of ETH of $9.6 million were recognized during both the three and
nine months ended September