Company: GAME
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001641172-25-004869
Chunk: 547

Company: GameSquare Holdings, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 3
Chunk 547
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 capital as well as maintenance of liquidity. As we do not
presently generate sufficient revenue to cover costs, managing liquidity risk is dependent upon the ability to reduce monthly operating
cash outflow and secure additional financing. The recoverability of the carrying value of the assets and our continued existence is dependent
upon our ability to raise financing in the near term, and ultimately the achievement of profitable operations.

As of December 31, 2024, we had a working deficit
of $18.3 million, compared to $13.9 million as of December 31, 2023. The increase in the working capital resulted mostly from the liabilities
related to the FaZe acquisition as well as from the Company’s use of cash in operating activities as described in the cash flows
section. In addition, as of December 31, 2024, there is $6.5 million of convertible debt at fair value reflected as current, but the bulk
of this related to the Yorkville CD which was converted to equity subsequent to year end. We have not yet realized profitable operations
and have incurred significant losses to date resulting in a cumulative deficit of $122.2 million as of December 31, 2024 (December 31,
2023: $73.4 million).

We
have plans to raise additional funds. While management has been historically successful in raising the necessary capital, it cannot provide
assurance that it will be able to execute its business strategy or be successful in future financing activities.

Our
ability to maintain sufficient liquidity could be affected by various risks and uncertainties including, but not limited to, our ability
to raise additional funds through financing, those related to consumer demand and acceptance of our products and services, our ability
to collect payments as they become due, achieving our internal forecasts and objectives, the economic conditions of the United States
and abroad.

Sources
and Uses of Cash

Since inception, we have financed our operations primarily
by issuing equity and debt. As of December 31, 2024, our principal sources of liquidity were our cash in the amount of $12.1 million,
available borrowings under our line of credit as well as new debt and/or equity issuances.

As discussed in recent developments above, we obtained
gross proceeds of $10.0 million from the Kalish CD issued on December 15, 2024. Further, as discussed above, the Kalish CD was exchanged
on April 1, 2025 for the Company’s remaining preferred shares held in