Company: GAME
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001641172-25-004869
Chunk: 117

Company: GameSquare Holdings, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1
Chunk 117
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 On June 20, 2024, Plaintiff Harold Villanueva (“Plaintiff”) filed a Complaint in the California
Superior Court for the County of Los Angeles, seeking damages against FaZe Clan, Inc. and other parties. Plaintiff asserts causes of
action for (1) Negligence, (2) Negligent Hiring, Retention, and Supervision, and (3) Premises Liability in connection with injuries alleged
incurred on FaZe Clan’s premises. FaZe Clan has denied liability for the alleged injuries and this matter is in the discovery stage.
FaZe Clan’s insurer is providing defense of these claims pursuant to a reservation of rights letter.

The
outcomes of pending litigations in which the Company is involved are necessarily uncertain as are the Company’s expenses in prosecuting
and defending these actions. From time to time the Company may modify litigation strategy and/or the terms on which it retains counsel
and other professionals in connection with such actions, which may affect the outcomes of and/or the expenses incurred in connection
with such actions.

The
Company is subject to various other claims, lawsuits and other complaints arising in the ordinary course of business. The Company records
provisions for losses when claims become probable, and the amounts are estimable. Although the outcome of such matters cannot be determined,
it is the opinion of management that the final resolution of these matters will not have a material adverse effect on the Company’s
financial condition, operations, or liquidity.

19. Discontinued
                                                                                    operations and assets held for sale

As
discussed in Note 4, on March 1, 2024, the Company sold Complexity and recognized a gain on disposition of $3.0 million, resulting in
Complexity meeting the requirements for presentation as discontinued operations. Prior to disposition, Complexity was part of the Teams
operating and reportable segment.

The
Company recognized a pretax net loss of $1.4 million and $5.3 million for the year ended December 31, 2024 and 2023, respectively, in
net income (loss) from discontinued operations in the consolidated statements of operations and comprehensive loss in relation to Complexity.
The pretax net loss of $1.4 million during the year ended December 31, 2024, includes revenue of $1.0 million, cost of revenue of $0.9
million, and operating expenses of $1.5 million. The pretax net loss of $5.3 million for the year