Company: GAME
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001641172-25-004869
Chunk: 495

Company: GameSquare Holdings, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 2
Chunk 495
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 terms. The functional currency of the Company is USD and the replacement warrants have an exercise price in CAD.
The issuance of the replacement warrants was accounted for as a modification to equity-classified instruments that resulted in reclassification
to a liability. As a result, 927,228 warrants of GSQ with a modification date fair value of $0.9 million, were reclassified to a derivative
warrant liability in accordance with ASC 815, Derivatives and Hedging, on April 11, 2023. Furthermore, 269,601 of Engine’s
warrants, with an acquisition date fair value of $0.2 million, included in the Engine reverse acquisition purchase consideration (see
Note 4), have an exercise price in CAD and are similarly liability classified. No liability-classified warrants were issued or outstanding
prior to the completion of the Arrangement.

    F-41

The
following is a summary of changes in the value of the warrant liability during the years ended December 31, 2024 and 2023:

 Schedule of changes in value of warrant liability

    Amount 
  
    Balance, December 31, 2022 
    $- 
  
    Acquisition of Engine 
     153,275 
  
    Reclassify GSQ Esports Inc. warrants to warrant liability 
     900,818 
  
    Change in fair value 
     (968,757)
  
    Foreign exchange 
     16,948 
  
    Balance, December 31, 2023 
    $102,284 
  
    Change in fair value 
     (84,449)
  
    Foreign exchange 
     (3,521)
  
    Balance, December 31, 2024 
    $14,314 

The
following assumptions were used to determine the fair value of the warrant liability using the Black-Scholes option pricing model:

 Schedule of assumptions fair value of warrant liability

    December 31, 2024  
    December 31, 2023 
  
    Share price 
      CAD$1.19   
      CAD$2.91  
  
    Term, in years 
     2.75  
     0.39 - 4.00 
  
    Exercise price 
     CAD$9.68  
     CAD$6.29 - $30.00 
  
    Expected volatility 
     100.00% 
     90.00