# EDGAR Filing Document

**Accession Number:** 0001714562
**File Stem:** 0001654954-23-004117
**Filing Date:** 2023-3
**Character Count:** 730453
**Document Hash:** e2dcdce42a0d478efea796f752763454
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001654954-23-004117.hdr.sgml**: 20230331

**ACCESSION NUMBER**: 0001654954-23-004117

**CONFORMED SUBMISSION TYPE**: 6-K

**PUBLIC DOCUMENT COUNT**: 15

**CONFORMED PERIOD OF REPORT**: 20230331

**FILED AS OF DATE**: 20230331

**DATE AS OF CHANGE**: 20230331

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Engine Gaming & Media, Inc.
- **CENTRAL INDEX KEY:** 0001714562
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-AMUSEMENT & RECREATION SERVICES [7900]
- **IRS NUMBER:** 000000000
- **STATE OF INCORPORATION:** A6
- **FISCAL YEAR END:** 0831

**FILING VALUES:**
- **FORM TYPE:** 6-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-39389
- **FILM NUMBER:** 23788930

**BUSINESS ADDRESS:**
- **STREET 1:** 3000 - 77 KING ST W
- **CITY:** TORONTO
- **STATE:** A6
- **ZIP:** M5K 1G8
- **BUSINESS PHONE:** 212-931-1200

**MAIL ADDRESS:**
- **STREET 1:** 3000 - 77 KING ST W
- **CITY:** TORONTO
- **STATE:** A6
- **ZIP:** M5K 1G8

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Engine Media Holdings, Inc.
- **DATE OF NAME CHANGE:** 20200818

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Torque Esports Corp.
- **DATE OF NAME CHANGE:** 20200102

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Millennial Esports Corp.
- **DATE OF NAME CHANGE:** 20170811

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**Form 6-K**

**REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16**

**UNDER THE SECURITIES EXCHANGE ACT OF 1934**

For the month of March 2023.

Commission File Number: 001-39389

---

| |
|:---|
| **Engine Gaming and Media, Inc.** |
| (Exact Name of Registrant as Specified in Charter) |

---

**<u>77 King Street West, Suite 3000, PO Box 95, Toronto, Ontario, Canada M5K 1G8</u>**

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F ⊠ Form 40-F ☐

**INCORPORATION BY REFERENCE**

Exhibits 99.1 - 99.6 of this Form 6-K of Engine Gaming and Media, Inc. (the "Company") are hereby incorporated by reference into the Registration Statement on Form F-10 (File No. 333-254709) of the Company, as amended or supplemented.

**SIGNATURE**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | **ENGINE GAMING AND MEDIA, INC.**  | **ENGINE GAMING AND MEDIA, INC.**  |
|  | (Registrant)  | (Registrant)  |
| Date: March 31, 2023 | By:  | */s/ Louis Schwartz*  |
|  | Name:  | Louis Schwartz  |
|  | Title:  | Chief Executive Officer and Director<br>|

---

**<u>EXHIBIT INDEX</u>**

---

| | |
|:---|:---|
| [99.1](egmi_ex991.htm) | [Annual Report on Form 20-F of GameSquare Esports Inc. for the fiscal year ended December 31, 2021](egmi_ex991.htm) |
| [99.2](egmi_ex992.htm) | [Consent of Kreston GTA LLP](egmi_ex992.htm) |
| [99.3](egmi_ex993.htm) | [Unaudited condensed consolidated interim financial statements of GameSquare Esports Inc. for the three and nine months ended September 30, 2022 and the three and nine months ended August 31, 2021, together with the notes thereto](egmi_ex993.htm) |
| [99.4](egmi_ex994.htm) | [Management's discussion and analysis of financial condition and financial performance of GameSquare Esports Inc. for the three and nine months ended September 30, 2022 and the three and nine months ended August 31, 2021](egmi_ex994.htm) |
| [99.5](egmi_ex995.htm) | [Management information circular of GameSquare Esports Inc. dated May 4, 2022](egmi_ex995.htm) |
| [99.6](egmi_ex996.htm) | [Material change report of GameSquare Esports Inc. dated December 19, 2022](egmi_ex996.htm) |

---

## Exhibit 99.1

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 20-F**

☐ **REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934.**

**OR**

☒ **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the fiscal year ended December 31, 2021**

**OR**

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the transition period from _______________ to _______________**

**OR**

☐ **SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

Commission file number:

---

| |
|:---|
| **GAMESQUARE ESPORTS INC.** |
| (Exact name of Registrant as specified in its charter) |

---

**<u>ONTARIO, CANADA</u>**

(Jurisdiction of incorporation or organization)

**<u>150 YORK STREET, SUITE 1008, TORONTO, ONTARIO M5H 3S5, CANADA</u>**

**(Address of principal executive offices**

**KEVIN WRIGHT** 

**TELEPHONE: (647) 670-2500**

**EMAIL: KEVIN@GAMESQUARE.COM**

<u>**ADDRESS: 150 YORK STREET, SUITE 1008, TORONTO, ONTARIO M5H 3S5, CANADA**</u>

(Name, Telephone, E-Mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12 (b) of the Act:

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| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |

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Securities registered or to be registered pursuant to Section 12(g) of the Act: Common Shares

The number of outstanding common shares of GameSquare's only class of capital or common stock as at April 28, 2022 was 244,381,900 common shares.

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None.

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report: 244,381,900.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ Yes ☒ No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ☒ No ☐

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☐ No ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See the definition of "accelerated filer" and "large accelerated filer" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ <br> Non-accelerated filer ☐ Emerging growth company ☒

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ☐ International Financial Reporting Standards as issued By the International Accounting Standards Board ☒ Other ☐

If "Other" has been checked in response to previous question, indicate by check mark which financial statement item the registrant has elected to follow. Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

**TABLE OF CONTENTS**

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| | | | |
|:---|:---|:---|:---|
| [PART I](#P1) |  |  | 4 |
|  | [ITEM 1.](#I1) | [IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS](#I1) | 4 |
|  | [ITEM 2.](#I2) | [OFFER STATISTICS AND EXPECTED TIMETABLE](#I2) | 4 |
|  | [ITEM 3.](#i3) | [KEY INFORMATION](#i3) | 4 |
|  | [ITEM 4.](#i4) | [INFORMATION ON THE COMPANY](#i4) | 17 |
|  | [ITEM 5.](#i5) | [OPERATING AND FINANCIAL REVIEW AND PROSPECTS](#i5) | 27 |
|  | [ITEM 6.](#i6) | [DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES](#i6) | 35 |
|  | [ITEM 7.](#i7) | [MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS](#i7) | 39 |
|  | [ITEM 8.](#i8) | [FINANCIAL INFORMATION](#i8) | 42 |
|  | [ITEM 10.](#i10) | [ADDITIONAL INFORMATION](#i10) | 43 |
|  | [ITEM 11.](#i11) | [QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](#i11) | 52 |
|  | [ITEM 12.](#I12) | [DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES](#I12) | 52 |
| [PART II](#p2) |  |  | 53 |
|  | [ITEM 13.](#i13) | [DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES](#i13) | 53 |
|  | [ITEM 14.](#i14) | [MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS](#i14) | 53 |
|  | [ITEM 15.](#i15) | [CONTROLS AND PROCEDURES](#i15) | 53 |
|  | [ITEM 16.](#reservrd) | [\[RESERVED\]](#reservrd) | 53 |
| [PART III](#p3) | [PART III](#p3) |  | 55 |
|  | [ITEM 17.](#i17) | [FINANCIAL STATEMENTS](#i17) | 55 |
|  | [ITEM 18.](#i18) | [FINANCIAL STATEMENTS](#i18) | 55 |
|  | [ITEM 19.](#i19) | [EXHIBITS](#i19) | 55 |

---

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| 2 |
| *[**Table of Contents**](#toc)* |

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In this Form 20-F, the terms "we", "our", "us" and "GameSquare" refer, unless the context requires otherwise, to GameSquare Esports Inc.

**CURRENCY**

All amounts are expressed in Canadian dollars ("**C$**") unless otherwise stated. See the information under the heading "*Item 3.A. Selected Financial Data - Exchange Rates*" for relevant information about the rates of exchange between Canadian dollars and the other functional currencies used by certain subsidiaries of GameSquare.

**CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS**

Certain statements contained in this registration statement on Form 20-F (this "**Form 20-F**") constitute "forward-looking statements" within the meaning of the United States *Private Securities Litigation Reform Act* of 1995 and "forward- looking information" within the meaning of Canadian provincial securities laws (such forward-looking statements and forward-looking information are referred to herein as "**forward-looking statements**"). These statements reflect our management's expectations with respect to future events, the Company's financial performance and business prospects. All statements other than statements of historical fact are forward-looking statements. The words "plans", "expects", "estimated", "anticipates", "intend", "focus", "outlook", "potential", "seek", "strategy", "vision", "goal", "targets" or "believes", or variations of such words and phrases or statements that certain future conditions, actions, events or results "will", "may", "could", "would", "should", "might" or "can", or negative versions thereof, "be taken", "occur", "continue" or "be achieved", and other similar expressions, frequently identify forward-looking statements. These statements involve known and unknown risks, uncertainties, and other factors that may cause actual results or events to differ materially from those anticipated or implied in such forward-looking statement. No assurance can be given that these expectations will prove to be correct and such forward-looking statement included in this Form 20-F should not be unduly relied upon. Unless otherwise indicated, these statements speak only as of the date of this Form 20-F.

In particular, this Form 20-F contains forward-looking statements pertaining to, among other things, opportunities within esports, industry trends, the Company's growth strategy, ability to pursue and execute on opportunistic and accretive acquisitions; synergies available to the Company following acquisitions; the Company's business objectives; the Company's ability to monetize its core asset portfolio; and the Company's ability to execute on its business plan and the factors discussed under "*Item 3. Key Information - D. Risk Factors*."

In addition to any factors and assumptions set forth in this Form 20-F, the material factors and assumptions used to develop the forward-looking information include, but are not limited to: the Company being able to grow its business and execute on its business plan, the Company being able to successfully identify and integrate strategic acquisition opportunities; the Company being able to recognize and capitalize on opportunities earlier than its competitors; the culture and business structure of the Company supporting its growth; the Company continuing to attract qualified personnel to support its development requirements; and that the risk factors noted below, collectively, do not have a material impact on the Company.

Known and unknown risk factors, many of which are beyond the control of the Company, could cause actual results to differ materially from the forward-looking information in this Form 20-F. Such factors include, without limitation, the following: industry competition, the Company's ability to achieve its objectives, the Company's size and position in the industry and its growth strategy, the ability of the Company to obtain future financings or complete offerings on acceptable terms, the ability of the Company to leverage its portfolio across entertainment and media platforms, dependence on the Company's key personnel, ability to execute on future acquisitions, mergers or dispositions, currency exchange rates, laws and government regulations, electronic data compromises and general business, economic, competitive, political and social uncertainties including the impact of the COVID-19 pandemic and its variants. This list is not exhaustive of the factors that may affect any of our forward-looking statements. Some of the important risks and uncertainties that could affect forward-looking statements are described further under the heading *"Item 3. Key Information - D. Risk Factors.".* If one or more of these risks or uncertainties materializes, or if underlying assumptions prove incorrect, our actual results may vary materially from those expected, estimated or projected. Forward-looking statements in this document are not a prediction of future events or circumstances, and those future events or circumstances may not occur. Given these uncertainties, users of the information included in this Form 20-F, including investors and prospective investors are cautioned not to place undue reliance on such forward-looking statements.

The forward-looking statements in this Form 20-F speak only as to the date hereof and are based on our beliefs, opinions and expectations at the time they are made. Except as required by applicable law, including the securities laws of the United States and Canada, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

Any forward-looking statements included in this Form 20-F are expressly qualified by this cautionary statement, and except as otherwise indicated, are made as of the date of this Form 20-F. The Company does not assume or undertake any obligation to update or revise any forward-looking statements or departures from them, except as required by applicable law. New factors emerge from time to time, and it is not possible for our management to predict all such factors and to assess in advance the impact of each such factor on the business of the Company or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement.

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| 3 |
| *[**Table of Contents**](#toc)* |

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**PART I**

**ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS**

Not applicable.

**ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE**

Not applicable.

**ITEM 3. KEY INFORMATION**

**Selected Financial Data**

The following tables present selected historical financial data for GameSquare and its subsidiaries (collectively, the "**Group**"). The balance sheet financial data as at December 31, 2021 and the income statement financial data for the year ended December 31, 2021, in each case as set forth below, has been derived from the Group's audited consolidated financial statements incorporated by reference in this Form 20-F. The Company changed its fiscal year-end from November 30 to December 31 during the 2021 fiscal year which resulted in a transition year of thirteen months.

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| 4 |
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**Balance Sheet**

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| | | |
|:---|:---|:---|
| *($ Canadian)* | **December 31, 2021** | **November 30, 2020** |
| **ASSETS** |  |  |
| **Current** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Cash  | $**7642593** | $660686 |
| &nbsp;&nbsp;&nbsp;&nbsp; Amounts receivable | **3911638** | 381749 |
| &nbsp;&nbsp;&nbsp;&nbsp; Prepaid expenses and deposits | **385639** | 109142 |
| &nbsp;&nbsp;&nbsp;&nbsp; Other investments | **-** | 62635 |
| &nbsp;&nbsp;&nbsp;&nbsp; Other current assets  | **388478** | - |
| Total current assets | **12328348** | 1214212 |
| **Long-term** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Equipment | **4600404** | 1419 |
| &nbsp;&nbsp;&nbsp;&nbsp; Intangibles | **9339175** | 2361567 |
| &nbsp;&nbsp;&nbsp;&nbsp; Goodwill  | **-** | 2258109 |
| &nbsp;&nbsp;&nbsp;&nbsp; Right-of-use asset  | **3501614** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Reclamation deposits | **340443** | 338606 |
| &nbsp;&nbsp;&nbsp;&nbsp; Non-current assets held for sale | **99535** | - |
| Total assets | $**30209519** | $6173913 |
| **LIABILITIES** |  |  |
| **Current** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Accounts payable and accrued liabilities  | $**2796756** | $845273 |
| &nbsp;&nbsp;&nbsp;&nbsp; Deferred revenue | **414628** | 104630 |
| &nbsp;&nbsp;&nbsp;&nbsp; Current portion of lease liability  | **382057** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Loan payable  | **152305** | - |
| Total current liabilities | **3745746** | 949903 |
| &nbsp;&nbsp;&nbsp;&nbsp; Deferred consideration on acquisition of Code Red  | **-** | 335000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Long term loan  | **-** | 40000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Lease liability, net of current portion  | **3421383** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Reclamation provision | **323933** | 323933 |
| &nbsp;&nbsp;&nbsp;&nbsp; Deferred tax liability  | **347958** | 464000 |
| Total liabilities | **7839020** | 2112836 |
| **SHAREHOLDERS' EQUITY** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Common shares  | **45690856** | 6340328 |
| &nbsp;&nbsp;&nbsp;&nbsp; Share based payments reserve  | **3923193** | 718951 |
| &nbsp;&nbsp;&nbsp;&nbsp; Contingently issuable shares  | **66238** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Warrants  | **2923808** | 827461 |
| &nbsp;&nbsp;&nbsp;&nbsp; Accumulated other comprehensive income | **221183** | 884 |
| &nbsp;&nbsp;&nbsp;&nbsp; Accumulated deficit | **(30341957)** | (3826547) |
| &nbsp;&nbsp;&nbsp;&nbsp; Equity attributable to owners of the parent | **22483321** | 4061077 |
| &nbsp;&nbsp;&nbsp;&nbsp; Non-controlling interest  | **(112822)** |  |
| Total Shareholders' Equity | **22370499** | 4061077 |
| Total liabilities and shareholders' equity  | $**30209519** | $6173913 |

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**Income Statement**

The following tables present the Group's statement of loss and comprehensive loss for the year ended December 31, 2021.

During the period ended December 31, 2021, the Company changed its fiscal year end from November 30 to December 31. As a result of this change, the results of the quarter ended December 31, 2021 are for the four months ended December 31, 2021 with the comparative period consisting of the three months ended November 31, 2020

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| | | |
|:---|:---|:---|
| *($ Canadian)*  | **December 31, 2021** | **November 30, 2020** |
| **Revenue** | $**13687889** | 488774 |
| Cost of sales | **9250631** | 331228 |
| Gross profit | **4437258** | 157546 |
| **Other income** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Interest and other income | **9645** | 1947 |
| Total other income | **9645** | 1947 |
| **Expenses** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Salaries, consulting and management fees | **7617319** | 760648 |
| &nbsp;&nbsp;&nbsp;&nbsp; Player compensation | **724777** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Professional fees | **1436522** | 8323 |
| &nbsp;&nbsp;&nbsp;&nbsp; General office expenses | **1340366** | 202569 |
| &nbsp;&nbsp;&nbsp;&nbsp; Selling and marketing expenses | **1426503** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Travel expenses | **676221** | 4107 |
| &nbsp;&nbsp;&nbsp;&nbsp; Shareholder communications and filing fees | **209830** | 52229 |
| &nbsp;&nbsp;&nbsp;&nbsp; Interest expense | **181527** | 11497 |
| &nbsp;&nbsp;&nbsp;&nbsp; Bad debt expense | **56318** | 74581 |
| &nbsp;&nbsp;&nbsp;&nbsp; Foreign exchange loss | **2972** | 5110 |
| &nbsp;&nbsp;&nbsp;&nbsp; Change in provision for reclamation deposit | **(97323)** | 6308 |
| &nbsp;&nbsp;&nbsp;&nbsp; Share-based compensation | **3644287** | 709953 |
| &nbsp;&nbsp;&nbsp;&nbsp; Transaction costs | **9744815** | 1817540 |
| &nbsp;&nbsp;&nbsp;&nbsp; Amortization | **1879825** | 81433 |
| &nbsp;&nbsp;&nbsp;&nbsp; Impairment on goodwill | **2258109** | - |
| Total expenses | **31102068** | 3734298 |
| Loss for the period before income taxes | **(26655165)** | (3574805) |
| Income tax (recovery) | **(98854)** | (1697) |
| Loss for the period | **(26556311)** | (3573108) |
| **Other comprehensive loss** |  |  |
| *Items that will subsequently be reclassified to operations:* |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Foreign currency translation | **220299** | 884 |
| **Total comprehensive loss for the period** | $**(26336012)** | $(3572224) |
| **(Loss) for the period attributable to:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Owners of the parent | **(26515410)** | (3573108) |
| &nbsp;&nbsp;&nbsp;&nbsp; Non-controlling interest | **(40901)** | - |
|  | $**(26556311)** | $(3573108) |
| Basic and diluted net loss per share | $**(0.17)** | $(0.14) |
| Weighted average number of common shares outstanding - basic and diluted | **156258509** | 24995371 |

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**Exchange Rates**

Our consolidated financial information is presented in Canadian dollars. However, the functional currency of Code Red Ltd. ("**Code Red**") is the U.K. pound sterling ("**GBP**") and GameSquare Esports (USA) Inc. and its subsidiaries is the U.S. dollar ("**USD**"). Transactions in foreign currencies, including GBP and USD, are translated into the transacting entities' functional currency at the exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the statement of financial position dates. Non-monetary items in a foreign currency are measured in terms of historical cost and are translated using the exchange rates on the dates of the initial transactions. All differences are taken to the statements of income in the periods in which they arise.

The assets and liabilities of foreign operations are translated at the exchange rates at the reporting date to the presentation currency. The income and expenses of foreign operations are translated at the exchange rates at the dates of the transactions. Foreign currency differences are recognized in other comprehensive income (loss) and accumulated in the translation reserve.

**A. (Reserved)**

**B. (Reserved)**

**C. Reasons for the Offer and Use of Proceeds**

Not applicable.

**D. Risk Factors**

An investment in our securities involves a high degree of risk and the securities must be considered highly speculative. You should consider carefully all of the risks described below, together with the other information contained in this Form 20-F, before making a decision to invest in our securities. If any of the following events occur, our business, financial condition and operating results may be materially adversely affected. In that event, the trading price of our securities could decline, and you could lose all or part of your investment.

The risk factors outlined below are not a definitive list of all risk factors associated with an investment in the securities described hereunder. Additional risks and uncertainties not presently known to us, or which we currently deem not to be material, may also have a material adverse effect. Prospective investors and shareholders should consider carefully all of the information set out in this Form 20-F and the risks attaching to an investment in us before making any investment decision and consult with their own professional advisors where necessary.

**Risks Related to Our Business**

***GameSquare has limited operating history and operates in an evolving sector.***

GameSquare Inc. was acquired by oil and gas exploration company Magnolia Colombia Ltd. ("**Magnolia**") pursuant to a reverse-takeover transaction ("**RTO**"), which was completed on October 2, 2020. On September 30, 2020, Magnolia changed its name to GameSquare Esports Inc.

GameSquare had no experience in the esports industry prior to the RTO. GameSquare acquired its first revenue-generating asset, Code Red, on October 2, 2020. Prior to the acquisition of Code Red, GameSquare's operations were limited to identifying and acquiring target companies in the esports industry.

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Consequently, we are subject to all the risks and uncertainties inherent in a new business and in connection with the development and sale of new services. In addition, the esports and gaming industry is a relatively new and an evolving sector. Accordingly, investors should consider our prospects in light of the costs, uncertainties, delays, and difficulties frequently encountered by companies in this early stage of development and operating in a changing and evolving sector. Investors should carefully consider the risks and uncertainties that a company, such as GameSquare, with a limited operating history will face. In particular, investors should consider that we cannot provide assurance that we will be able to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. successfully implement or execute our current business plan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. maintain our management team;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. raise sufficient funds in the capital markets to effectuate our business plan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. attract, enter into or maintain contracts with, and retain clients; and/or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. compete effectively in the extremely competitive environment in which we operate.

If we cannot successfully accomplish any of the foregoing objectives, our business may not succeed.

***GameSquare generates a significant portion of revenue from representing esports players, influencers, gaming personalities and other on-screen talent through our agency operating segment. Failure to attract new clients or to successfully represent our existing clients, may adversely affect revenue.***

Our Agency Services segment represents esports agencies which include Code Red, the Gaming Community Network ("**GCN**") and Swingman LLC (dba Cut+Sew and Zoned) ("**Cut+Sew/Zoned**"). Our agencies generate revenue through representing players, influencers and on-screen talent, consulting and managing and brokering brand activations for influencers. Our agency services sector generates the majority of our revenue.

The agency segment of the esports industry is highly competitive and there is no guarantee that we will succeed in attracting new clients to represent or that we will retain our existing clients. Factors that influence our success in attracting and retaining clients include our ability to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. successfully negotiate contracts on behalf of our clients;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. secure sponsorships for our clients; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h. secure event and tournament participation for our clients.

Failure to attract or retain clients would have a material, adverse effect on our business, financial condition and results of operations.

***GameSquare's agency services business model may not remain effective and it cannot guarantee that its future monetization strategies will be successfully implemented or generate sustainable revenues and profit.***

Our agencies business generates a portion of its revenue from securing talent for live esports events. Although we anticipate that the audience for such live esports will continue to grow, creating more opportunities for us to provide services, such growth is not guaranteed and demand for GameSquare's services may change, decrease substantially or dissipate, or we may fail to anticipate and serve client demands effectively. For example, COVID-19 and related variants have reduced demand for in-person esports events while increasing demand for online and broadcasted events. Although we also provide a variety of services relating to online and broadcasted events, any decision to reduce or eliminate its service offering for live esports events in order to prioritize online and broadcasted events may be unsuccessful and would involve additional risks and costs that could materially and adversely affect our business, financial condition and results of operations.

***If GameSquare fails to maintain and enhance its brands, its business, financial condition and results of operations may be materially and adversely affected.***

We believe that maintaining and enhancing our brands, including GameSquare, NextGen Tech LLC (dba Complexity Gaming) ("**Complexity**"), Swingman LLC (dba Cut+Sew and Zoned) and Code Red, as well as any other brands that we may acquire in the future, is important for our business to succeed by increasing our visibility and reputation in the esports industry and enabling GameSquare to attract new clients and retain existing clients for our businesses. Since GameSquare operates in a highly competitive industry, brand maintenance and enhancement directly affect our ability to maintain and enhance our market position. As GameSquare expands, we may conduct various marketing and brand promotion activities using various methods to continue promoting our brands, but we cannot assure investors that these activities will be successful. In addition, negative publicity, regardless of its veracity, could harm our brands and reputation, which may materially and adversely affect our business, financial condition and results of operations.

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***GameSquare's teams business is substantially dependent on the continued popularity and success of our teams and players.***

The financial results of our teams segment are largely depended on our esports teams remaining popular with our fan bases. The popularity of our teams will, in part, depend on their performance in the leagues and tournaments in which they participate. We cannot ensure that our teams will be successful in the leagues and tournaments in which they play and therefore our ability to attract or retain talented players and coaching staff, supporters, sponsors and other commercial partners, as well as potentially result in lower prize money. Moreover, the popularity of the individual players can impact online viewership and television ratings, which could affect the long-term value of the media rights and sponsorship opportunities. There can be no assurance that our players will develop or maintain continued popularity. Furthermore, the popularity of the teams, and, in turn, their financial results, further depend, in part, upon the popularity of the esports played and their ability to attract audiences and generate online viewership. There can be no guarantee that games currently popular, will develop or maintain continued popularity in esports.

***Defection of GameSquare's players to other teams could hinder our success.***

GameSquare competes with other esports teams to sign and retain world class esports players, some of which have greater resources or brand recognition and popularity than GameSquare. GameSquare's players under contract may choose to move to other esports organizations for various reasons, including higher pay or that they have chosen to pursue new or other opportunities. The loss of any of our players could have negative consequences on our business and results of operations.

***Adverse publicity concerning GameSquare, one of our businesses or key personnel or talent could negatively affect our business.***

GameSquare's reputation is essential to our continued success, and any decrease in the quality of our reputation could impair our ability to, among other things, recruit and retain key personnel, retain or attract clients and maintain relationships with our partners. GameSquare's reputation can be negatively impacted by a number of factors, including negative publicity concerning GameSquare, members of our management or other key personnel including our talent and players. In addition, GameSquare is dependent for a portion of our revenues on our key talent and our ability to monetize through various channels. Such publicity could have a negative impact on GameSquare and adversely affect our business, financial condition and results of operations.

***If GameSquare fails to anticipate, adopt and build expertise in new esports technologies, our business may suffer.***

Rapid technology changes in the esports gaming market requires us to anticipate which technologies we should adopt and build expertise in to remain competitive in the esports industry. GameSquare has invested, and in the future may invest, in new business strategies, technologies or services to engage a growing number of esports players, influencers and other on-screen talent, sponsors and others. For example, Code Red assists game publishers and developers such as Ubisoft and Massive Entertainment in designing broadcast-ready games by honing in-game spectator modes for improved viewing and commentating. Such advice typically relates to overlay placement, broadcasting options for streamers and commentators and scoreboard, replay and timer displays, as well as a number of other design elements. If we fail to anticipate, adopt or build expertise in new technologies which impact in-game spectator modes, GameSquare may fail to attract new or retain existing game publishers, developers, influencers and brands as clients.

Adopting new technologies involves significant risks and uncertainties, and no assurance can be given that GameSquare will successfully identify which technologies will complement our business. If we do not successfully implement new technologies, our reputation may be materially adversely affected and our business, financial condition and operating results may be impacted.

***The success of GameSquare's business depends on our marketing efforts.***

Achieving market success will require substantial marketing efforts and investments to inform potential clients of the distinctive benefits and characteristics of our products and services. GameSquare's long-term success will depend on our ability to expand current marketing capabilities. We will, among other things, need to attract and retain experienced marketing and sales personnel. No assurance can be given that we will be able to attract and retain such personnel or that any efforts undertaken by such personnel will be successful.

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***Acquisitions may never materialize, may be subject to unexpected delays or may entail unexpected costs or prove unsuccessful.***

As a growing company, we are engaged in identifying, acquiring and developing esports and gaming assets that we believe are a strategic fit for our business. However, we cannot predict what form future acquisitions might take or when such acquisitions will be consummated, if at all. GameSquare is likely to face significant competition in seeking appropriate acquisitions and these acquisitions can be complicated and time consuming to negotiate and document. We may not be able to negotiate acquisitions on acceptable terms, or at all, and we are unable to predict when, if ever, we will consummate such acquisitions due to the numerous risks and uncertainties associated with them.

Since GameSquare may not be able to accurately predict these difficulties and expenditures, these costs may outweigh the value we realize from a future acquisition. Future acquisitions could result in issuances of securities that would dilute shareholders' ownership interest, the incurrence of debt, contingent liabilities, amortization of expenses related to other intangible assets, and the incurrence of large, immediate write-offs.

Any of the forgoing could materially and adversely affect our business, financial condition and results of operations.

***Difficulties integrating acquisitions.***

GameSquare has acquired a number of businesses since the RTO and acquisitions continue to be part of our growth strategy. The benefits of an acquisition may take considerable time to develop, and we cannot be certain that any particular acquisition will produce the intended benefits. These risks and difficulties associated with acquisitions, if they materialize, could disrupt our ongoing business, distract management, result in the loss of key personnel, increase expenses and otherwise have a material adverse effect on our business, results of operations and financial performance.

***GameSquare may be unable to achieve or sustain profitability or continue as a going concern.***

There is no assurance that GameSquare will earn profits in the future, or that profitability will be sustained in the near future or at all. Beyond this, we may incur significant losses in the future for a number of reasons including other risks described in this document, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown events. There is also no assurance that future revenues will be sufficient to generate the funds required to continue our business development and our activities. If we do not have sufficient capital to fund our operations, we may be required to reduce our sales and marketing efforts or forego certain business opportunities and strategies.

Our consolidated financial statements have been prepared on the assumption that we will continue as a going concern. Our continuation as a going concern is dependent upon our ability to raise equity capital or borrowings sufficient to meet current and future obligations and ultimately achieve profitable operations. There is no assurance that we will be able to obtain such financings or obtain them on favourable terms. These matters represent material uncertainties that cast significant doubt on our ability to continue as a going concern.

***GameSquare will require additional financing and cannot be certain that such additional financing will be available on reasonable terms when required, or at all.***

To date, we have relied primarily on equity financing to carry on our business. We have limited financial resources and operating cash flow and can make no assurance that sufficient funding will be available to us to fund our operating expenses and to further develop our business. As of December 31, 2021, GameSquare had cash of $7,642,593. Additionally, on April 5, 2022, GameSquare announced a fully subscribed US$3 million non-brokered private placement. As at that date of this Form 20-F, the private placement had not closed. We also entered into US$5 million credit facility which will provide the Company with access to capital, if required, to execute on its strategic priorities. The credit agreement will become available for draw down after satisfaction of certain conditions precedent.

GameSquare does not have any contracts or commitments for additional financing other than a US$5 million revolving credit facility which we entered into on April 15, 2022. $Nil has been drawn on that facility as of the date of this Form 20-F. Any additional equity financing may involve substantial dilution to then existing shareholders. There can be no assurance that such additional capital will be available, on a timely basis or on acceptable terms. Failure to obtain such additional financing could result in delay or indefinite postponement of operations or the further development of our business with the possible loss of such properties or assets. If adequate funds are not available or are not available on acceptable terms, we may not be able to fund our business or the expansion thereof, take advantage of strategic acquisitions or investment opportunities or respond to competitive pressures. Such inability to obtain additional financing when needed could have a material adverse effect on our business, financial condition and results of operations.

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***Future cash flow fluctuations may affect GameSquare's ability to fund our working capital requirements or achieve our business objectives in a timely manner.***

The working capital requirements and cash flows are expected to be subject to quarterly and yearly fluctuations, depending on such factors as timing and size of capital expenditures, acquisitions, levels of sales and collection of receivables and client payment terms and conditions. If our revenues and cash flows are materially lower than we currently expect, we may be required to reduce our capital expenditures and investments or take other measures in order to meet our cash requirements. GameSquare may also seek additional funds from liquidity-generating transactions and other conventional sources of external financing (which may include a variety of debt, convertible debt and/or equity financings). We cannot provide any assurance that the net cash requirements will be as we currently expect. Our inability to manage cash flow fluctuations resulting from the above factors could have a material adverse effect on our ability to fund the working capital requirements from operating cash flows and other sources of liquidity or to achieve our business objectives in a timely manner.

***International operations and expansion exposes GameSquare to risks associated with international markets.***

GameSquare currently operates and has businesses predominantly in U.K., EU and U.S. markets and may further expand internationally and operate in select foreign markets. Managing a global organization is more time consuming and expensive than managing a company operating in one jurisdiction. Conducting international operations subjects GameSquare to risks related to foreign regulatory requirements and complying with a wide variety of laws and legal standards, managing and staffing international operations, fluctuations in foreign exchange rates, managing tax consequences, accounting and reporting complexities and political, social and economic instability in various jurisdictions. The investment and additional resources required to establish and manage operations in various countries and jurisdictions may result in lower levels of revenue or profitability.

***The requirements related to being a public company.***

As a reporting issuer, GameSquare is subject to and must comply with applicable securities legislation, the listing requirements and rules of the exchange and other applicable securities rules and regulations. Compliance with these rules and regulations may increase our legal and financial compliance costs, make some activities more difficult, time consuming or costly and increase demand on our systems and resources. Applicable securities laws require GameSquare to, among other things, file certain annual and quarterly reports with respect to our business and results of operations. In addition, applicable securities laws require GameSquare to, among other things, maintain effective disclosure controls and procedures and internal control over financial reporting. In order to maintain and, if required, improve our disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight may be required including due to complexity of transactions and our expanding international business. As a result, management's attention may be diverted from other business concerns in order to comply with these requirements. To comply with these requirements, GameSquare may need to hire more employees in the future or engage outside consultants, which will increase our costs and expenses.

In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating increasing legal and financial compliance costs and making some activities more time consuming. We intend to continue to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management's time and attention from revenue generating activities to compliance activities.

***GameSquare is subject to privacy laws in each jurisdiction in which we operate and we may face risks related to breaches of the applicable privacy laws.***

GameSquare collects and stores personal information about our users, clients and partners and is responsible for protecting that information from privacy breaches. A privacy breach may occur through procedural or process failure, information technology malfunction or deliberate unauthorized intrusions. Theft of data for competitive purposes, particularly user and partner lists, is an ongoing risk whether perpetrated via employee collusion or negligence or through deliberate cyber-attack. Any such theft or privacy breach could have a material adverse effect on our business, financial condition or results of operations.

In addition, there are a number of Canadian federal and provincial laws as well as local rules which are applicable to GameSquare and our subsidiaries which protect the confidentiality of personal information and restrict the use and disclosure of that protected information. The Canadian privacy rules under the *Personal Information Protection and Electronics Documents Act* (Canada) ("**PIPEDA**") protect personal information by limiting its use and disclosure of personal information. If we are found to be in violation of the privacy or security rules under PIPEDA or other laws protecting the confidentiality of personal information, we could be subject to sanctions and civil or criminal penalties, which could increase our liability, harm our reputation and have a material adverse effect on our business, financial condition or results of operations.

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***GameSquare is exposed to cyber security incidents resulting from deliberate attacks or unintentional events.***

Cyber security incidents can result from deliberate attacks or unintentional events, and may arise from internal sources (e.g., employees, contractors, service providers, suppliers and operational risks) or external sources (e.g., nation states, terrorists, hacktivists, competitors and acts of nature). Cyber incidents include, but are not limited to, unauthorized access to information systems and data (e.g., through hacking or malicious software) for purposes of misappropriating or corrupting data or causing operational disruption. Cyber incidents also may be caused in a manner that does not require unauthorized access, such as causing denial-of-service attacks on websites (e.g., efforts to make network services unavailable to intended users).

A cyber incident that affects our business or our service providers might cause disruptions and adversely affect their respective business operations and might also result in violations of applicable law (e.g., personal information protection laws), each of which might result in potentially significant financial losses and liabilities, regulatory fines and penalties, reputational harm and reimbursement and other compensation costs. In addition, substantial costs might be incurred to investigate, remediate and prevent cyber incidents.

***GameSquare uses third-party services and partnerships in connection with our business, and any disruption to these services or partnerships could result in a disruption to our business, negative publicity and a slowdown in the growth of our clients, materially and adversely affecting our business, financial condition and results of operations.***

GameSquare depends upon third-party software and services to conduct our business. The inability to access these services could result in a disruption while sourcing replacement service vendors. Additionally, we rely on contracted third-party partnerships to conduct our business. While we have minimized our reliance on any single vendor or partner, any disruption of service from our partners could have a material adverse effect on our business, financial condition or results of operations.

***Failure to attract, retain and motivate key employees may adversely affect GameSquare's ability to compete and the loss of the services of key personnel could have a material adverse effect on our business.***

GameSquare depends on the services of a few key executive officers. The loss of any of these key persons could have a material adverse effect on our business, financial condition and results of operations. Our success is also highly dependent on our continuing ability to identify, hire, train, motivate and retain highly qualified technical, marketing and management personnel. Competition for such personnel can be intense, and we cannot provide assurance that we will be able to attract or retain highly qualified technical, marketing and management personnel in the future. Stock options and other share-based compensation plans may comprise a significant component of key employee compensation, and if the price of the Common Shares declines, it may be difficult to retain such individuals. Similarly, changes in the share price may hinder our ability to recruit key employees, as they may elect to seek employment with other companies that they believe have better long-term prospects. Our inability to attract and retain the necessary technical, marketing and management personnel may adversely affect our future growth and profitability. Our retention and recruiting may require significant increases in compensation expense, which would adversely affect our results of operation.

Our executive officers and other members of senior management have substantial experience and expertise in the business and have made significant contributions to our growth and success. The unexpected loss of services of one or more of these individuals could also adversely affect the business, financial condition and results of operations. GameSquare is not protected by key man or similar life insurance covering members of senior management.

***Litigation costs and the outcome of litigation could have a material adverse effect on our business.***

From time to time, GameSquare may be subject to litigation claims through the ordinary course of our business operations regarding, but not limited to, employment matters, security of client and employee personal information, contractual relations with clients, including gamers, influencers and other on-screen talent, production crew and sponsors, among others and marketing and infringement of trademarks. Litigation to defend against claims by third parties, or to enforce any rights that we may have against third parties, may be necessary, which could result in substantial costs and diversion of our resources, causing a material adverse effect on our business, financial condition and results of operations.

We are not aware of any current material legal proceedings outstanding, threatened or pending as of the date hereof by or against GameSquare. However, given the nature of our business, we are, and may from time to time in the future be, party to various, and at times numerous, legal investigations, proceedings and claims that arise in the ordinary course of business. Because the outcome of litigation is inherently uncertain, if one or more of such legal matters were to be resolved against us for amounts in excess of our expectations, our business, financial condition and results of operations could be materially adversely affected.

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***GameSquare is exposed to foreign currency risk and we have not hedged against risk associated with foreign exchange rate exposure.***

Although GameSquare's functional currency is the Canadian dollar, it generates revenue and incurs costs in foreign currencies. In particular, we expect to generate revenue and incur costs in GBP, the functional currency of Code Red, and euro, as well as, U.S. dollars, the functional currency of our other subsidiaries. Accordingly, GameSquare is subject to risk from fluctuations in the rates of currency exchange between such foreign currency and the Canadian dollar, and such fluctuations may materially adversely affect our business, financial condition and results of operations. GameSquare does not currently hedge against such currency fluctuations.

***Public health crises may adversely affect our growth.***

GameSquare may be negatively impacted by volatility in the equity markets as a result of certain events that are beyond our control, including infectious diseases, pandemics or similar health threats, such as the COVID-19 outbreak and its variants. Many governments, including in the United States, the United Kingdom and Canada, imposed stringent restrictions to seek to mitigate, or slow, the spread of COVID-19 and its variants, including restrictions on international and local travel, public gatherings and participation in business meetings, as well as closures of workplaces, schools, and other public sites, and are continuing to encourage "social distancing." While many of these measures are being eased, the duration of such measures is highly uncertain, but could be prolonged, and stricter measures may still be put in place or reintroduced in areas where such measures have very recently started to be gradually eased.

As a result of the COVID-19 related restrictions, in-person esports tournaments and other events have been cancelled or required to enforce social distancing and other policies designed to reduce the spread of the virus. The resulting loss of revenue from ticket sales has not been fully offset by a corresponding increase in paid online or televised esports events. There can be no guarantee that demand for in-person esports events will resume in the near future. Any continuation of COVID-19 related or other restrictions could have a material adverse effect on our business, financial condition and operating results may be impacted.

**Risks Related to the Industry**

***GameSquare's business and success is dependent on the continuing popularity and growth of the esports industry.***

Our business is substantially dependent on the continuing popularity of the esports industry which is in the early stages of its development. Although the esports industry has experienced rapid growth and we anticipate the industry to continue to grow, consumer preferences may shift and there is no assurance that this growth will continue in the future. We have taken steps to diversify our business and continues to seek out new opportunities in the esports industry but there is no guarantee that it will be successful in doing so. Given the dynamic evolution of this industry, it can be difficult to plan strategically, and it is possible that competitors will be more successful than we are at adapting to change and pursuing business opportunities.

***The esports and gaming industry is intensely competitive. GameSquare faces competition from a growing number of companies and, if we are unable to compete effectively, our business could be negatively impacted.***

The esports and gaming industry is in competition with other sporting and entertainment events, both live and delivered over television networks, radio, the Internet, mobile applications and other sources. As a result of the large number of options available and the global nature of the esports industry, we face strong competition for esports fans. There is also intense competition amongst businesses operating in the segments of the esports industry where we currently operate or may operate in the future, including esports agencies, influencer technology platforms, analytics technologies, content creation and media content assets.

As some of GameSquare's competitors have greater financial resources, they may spend more money and time on developing their products or services, undertake more extensive marketing campaigns, adopt more aggressive pricing policies or otherwise develop more commercially successful products or services, which could impact our ability to secure new clients or retain existing clients. Competition may also lead to reduced margins as companies compete for clients by adopting aggressive pricing policies or our costs of doing business may increase in a competitive environment. Furthermore, new competitors may enter the segments of the esports industry where we currently operate or may operate in the future. If GameSquare is unable to obtain significant market presence or if we lose market share to our competitors, our business, financial condition and results of operations could be materially adversely affected. Finally, there are many companies with established relationships with third parties, including sponsors, event and tournament organizers, influencers and esports organizations. Consequently, some competitors may be able to develop and expand their esports organization more quickly. Our success depends on our ability to develop and maintain relationships with such third parties.

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As a result, GameSquare may not be able to continue to effectively compete against current and future competitors which could materially and adversely affect our business, financial condition and results of operations.

***Esports is a new and evolving industry, which presents significant uncertainty and business risks.***

The esports industry is relatively new and continues to evolve. GameSquare has taken steps to diversify our business and continues to seek out new opportunities in the esports industry, including in the teams segment through the acquisition of Complexity, but most of our revenue continues to be generated from our agency business. However, whether this industry grows and whether our business will ultimately succeed will be affected by, among other things, the success of efforts to monetize the esports industry through tournament fees, live event ticket sales, advertising and sponsorships, spectator demand for in-person, online and televised esports events and tournaments, the success of industry marketing efforts, including on social media platforms, the development of new games and technologies to attract and retain gamers and spectators, data privacy laws and regulation and other factors that we are unable to predict and which are beyond our control. Given the dynamic evolution of this industry, it can be difficult to plan strategically, and it is possible that competitors will be more successful than GameSquare at adapting to change and pursuing business opportunities.

***Reliance on advertisers for revenue.***

The esports industry relies on advertisers as part of its revenue. Our inability to secure contracts for advertising revenues may have a material adverse effect on our business, financial condition and results of operations. Additionally, this is a relatively new and rapidly evolving industry and as such, it is difficult to predict the prospects of growth. There is no assurance that advertisers will continue to increase their purchases of online advertising or that the supply of advertising inventory on digital media properties will not exceed the demand. If the industry grows slower than anticipated or we fail to maintain and grow our market position, we may not be able to achieve our revenue projections.

***Our business is vulnerable to changing economic conditions and to other factors that adversely affect the industries in which we operate.***

The demand for entertainment and leisure activities, including esports and gaming, tends to be highly sensitive to changes in consumers' free time and disposable income, and thus can be affected by changes in the economy and consumer tastes, both of which are difficult to predict and beyond our control. Unfavorable changes in general economic conditions, including recessions, economic slowdown, inflation, sustained high levels of unemployment, and increasing fuel or transportation costs, may reduce customers' disposable income or result in fewer individuals attending ticketed in-person or online esports events or tournaments, paying for subscriptions to esports media channels or otherwise engaging in entertainment and leisure activities. As a result, we cannot ensure that demand for our services will remain constant. Continued or renewed adverse developments affecting economies throughout the world, including a general tightening of availability of credit, inflation, increasing interest rates, increasing energy costs, acts of war or armed conflicts (including the conflict in Ukraine), terrorism, transportation disruptions, natural disasters, pandemics, declining consumer confidence, sustained high levels of unemployment or significant declines in stock markets, could lead to a further reduction in discretionary spending on leisure activities, such as esports. Any significant or prolonged decrease in consumer spending on entertainment or leisure activities could reduce demand for our services, which would have a material adverse effect on our business, financial condition and results of operations.

**Risk Factors Related to the Common Shares**

***Future sales or the issuances of our securities may cause the market price of the Common Shares to decline.***

The market price of the Common Shares could decline as a result of issuances of securities (including additional Common Shares) by the Company, exercises of outstanding options or warrants for additional Common Shares or sales by existing shareholders of Common Shares in the market, or the perception that these issuances or sales could occur. Sales of Common Shares by shareholders may make it more difficult for GameSquare to sell equity securities at a time and price that we deem appropriate. Sales or issuances of substantial numbers of Common Shares, including in the context of future acquisitions, or the perception that such sales or issuances could occur, may adversely affect prevailing market prices of the Common Shares. With any such sale or issuance of Common Shares, investors may suffer dilution and GameSquare may experience dilution in our earnings per share.

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***GameSquare expects that the price of the Common Shares may fluctuate significantly.***

The market price of securities of many companies, particularly development and early commercial stage esports companies, experiences wide fluctuations in price that are not necessarily related to the operating performance, underlying asset values or prospects of such companies.

The market price of the Common Shares could be subject to wide fluctuations in response to many risk factors set out herein, and others beyond our control. These and other market and industry factors may cause the market price and demand for the Common Shares to fluctuate substantially, regardless of the actual operating performance of GameSquare, which may limit or prevent investors from readily selling their Common Shares and may otherwise negatively affect the liquidity of the Common Shares. In addition, stock markets in general, and the share prices of esports and early-growth companies in particular, have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of such companies.

***Significant ownership by principal shareholders.***

As of the date of this Form 20-F, two shareholders hold approximately 40% of the Common Shares. As a result, these shareholders have significant influence over all corporate actions and securities matters requiring shareholder approval, including election of our directors and significant corporate transactions. The concentrated voting control of the Common Shares will limit the ability of other shareholders to influence corporate matters and actions may be approved that certain shareholders may not view as beneficial. Additionally, the principal shareholders' interest in GameSquare may discourage transactions involving a change of control, including transactions in which shareholders might otherwise receive a premium for their shares over the then current market price.

***If equity research analysts do not publish research or reports about GameSquare and our business or if they issue unfavorable commentary or downgrade the Common Shares, the price of the Common Shares could decline.***

The trading market for the Common Shares will rely in part on the research and reports that equity research analysts publish about GameSquare and our business. The price of the Common Shares could decline if one or more equity analysts downgrade the Common Shares or if analysts issue other unfavorable commentary or cease publishing reports about GameSquare or our business.

***GameSquare may be subject to securities litigation, which is expensive and could divert management attention.***

The market price of the Common Shares may be volatile, and in the past companies that have experienced volatility in the market price of their shares have been subject to securities class action litigation. GameSquare may be the target of this type of litigation in the future. Litigation of this type could result in substantial costs and diversion of management's attention and resources, which could adversely impact its business. Any adverse determination in litigation could also subject GameSquare to significant liabilities.

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***Variable revenues and earnings.***

The revenues and earnings of GameSquare may fluctuate from quarter to quarter, which could affect the market price of the Common Shares. Revenues and earnings may vary quarter to quarter as a result of a number of factors, including acquisition of new customers and clients, cyclical fluctuations related to the evolution of the industry and impairment of goodwill or intangible assets which may result in a significant change to earnings in the period in which impairment is determined. Any of the risk factors listed in this Form 20-F could also cause significant variations to our revenues, gross margins and earnings in any given quarter.

***GameSquare has never paid dividends on the Common Shares and it does not anticipate paying any dividends in the foreseeable future. Consequently, any gains from an investment in the Common Shares will likely depend on whether the price of the Common Shares increases.***

GameSquare has not paid dividends on the Common Shares to date and we currently intend to retain our future earnings, if any, to fund the development and growth of our business. As a result, capital appreciation, if any, of the Common Shares will be investors sole source of gain for the foreseeable future. Consequently, in the foreseeable future, investors will likely only experience a gain from their investment in the Common Shares if the price of the Common Shares increases.

***GameSquare may lose foreign private issuer status in the future, which could result in significant additional costs and expenses.***

GameSquare may in the future lose foreign private issuer status if a majority of the Common Shares are held in the United States and GameSquare fails to meet the additional requirements necessary to avoid loss of foreign private issuer status, such as if: (i) a majority of our directors or executive officers are U.S. citizens or residents; (ii) a majority of our assets are located in the United States; or (iii) our business is administered principally in the United States. The regulatory and compliance costs to the Company under U.S. securities laws as a U.S. domestic issuer will be significantly more than the costs incurred as an SEC foreign private issuer. If GameSquare is not a foreign private issuer, we would be required to file periodic and current reports and registration statements on U.S. domestic issuer forms with the SEC, which are generally more detailed and extensive than the forms available to a foreign private issuer. In addition, GameSquare may lose the ability to rely upon exemptions from corporate governance requirements that are available to foreign private issuers.

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**ITEM 4. INFORMATION ON THE COMPANY**

**A. History and Development of the Company History of GameSquare Inc.**

GameSquare Inc. was incorporated under the laws of the province of Ontario, Canada on December 13, 2018 for the purposes of identifying, acquiring and developing esports-focused companies in the areas of agency, influencer technology platforms, analytics technologies, content creation and media content assets. On May 27, 2019, GameSquare Inc. changed its name to Octane Play Inc. On September 18, 2019, GameSquare Inc. changed its name back to GameSquare Inc.

On November 7, 2019, GameSquare Inc. and Code Red entered into a share purchase agreement pursuant to which GameSquare Inc. would acquire all outstanding common shares of Code Red (as amended on January 24, 2020 and February 18, 2020, the "**Share Purchase Agreement**").

On February 10, 2020, Magnolia signed a letter of intent pursuant to which Magnolia would acquire all of the issued and outstanding shares in the capital of GameSquare Inc. by way of a reverse-takeover transaction. The RTO was structured as a three-cornered amalgamation, pursuant to which 2631443 Ontario Inc. ("**Magnolia Subco**"), a wholly-owned subsidiary of Magnolia, and GameSquare Inc. amalgamated (the "**Amalgamation**") to form a new company, GameSquare (Ontario) Inc. ("**Amalco**"). Prior to the completion of the Amalgamation, the existing common shares in the capital of Magnolia were consolidated and GameSquare Inc.'s shareholders received one common share of Magnolia for each common share of GameSquare Inc. As a result, Amalco became a wholly-owned subsidiary of Magnolia.

Magnolia was previously involved in oil and gas exploration activities in Canada, the U.S. and Colombia. Magnolia ceased all direct oil and gas exploration activities in 2014.

Magnolia completed the RTO on October 2, 2020. Effective September 30, 2020, Magnolia delisted its common shares from the TSX Venture Exchange and, effective October 8, 2020, listed them on the Canadian Securities Exchange. On September 30, 2020 Magnolia changed its name to GameSquare Esports Inc..On December 1, 2020, Amalco and GameSquare amalgamated to become GameSquare Esports Inc.

Pursuant to the Share Purchase Agreement, Amalco acquired all outstanding common shares of Code Red on October 2, 2020.

On December 31, 2020, GameSquare and Reciprocity, a gaming and esports company, entered into an arrangement agreement pursuant to which GameSquare would acquire all outstanding common shares in Reciprocity (the "**Reciprocity Acquisition**"). The Reciprocity Acquisition closed on March 16, 2021. The Reciprocity Acquisition constituted a 'significant acquisition' for the Company and the Company filed a business acquisition report with respect to the acquisition in accordance with Form 51-102F4.

On January 22, 2021, the Company announced the appointment of Justin Kenna as its Chief Executive Officer.

On June 30, 2021, the Company completed the acquisition of all of the issued and outstanding membership interests (the "**Interests**") in the capital of Nextgen Tech LLC (dba Complexity Gaming) pursuant to a purchase agreement (the "**Purchase Agreement**") among the Company, Blue & Silver Ventures Ltd., Goff NextGen Holdings LLC and Jason Lake.

Complexity is a leading esports organization, which fields world-class esports teams in CS:GO, Fortnite, Valorant, APEX Legends, Hearthstone, Madden Football and FIFA Soccer and has participated and hosted numerous major esports events with combined annual viewer minutes of 3.2 billion. Complexity has also attracted blue-chip sponsors, including Miller Lite, Dairy MAX, ARterra Labs and Herman Miller and is one of only four esports organizations to have an exclusive partnership with Twitch.

As consideration for the acquisition of the Interests, the Company issued 83,328,750 Common Shares pursuant to the terms of the Purchase Agreement. The Common Shares issued in consideration for the Interests were subject to a standard statutory four-month hold period, which expired on October 31, 2021. In addition, the parties entered into a voluntary lock-up agreement with the Company pursuant to which, among other things, the Common Shares received by the vendors as consideration are subject to restrictions on sale for a period of 180 days following the date of the acquisition.

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On July 27, 2021, the Company closed its acquisition of 100% of the issued and outstanding membership units of Swingman LLC (dba Cut+Sew and Zoned), a privately held marketing agency based in Los Angeles, California operating in the sports and esports industries (the "**Cut+Sew/Zoned Transaction**"). The Company issued two (2) million Common Shares and paid $3 million in cash on closing of the Cut+Sew/Zoned Transaction. Additionally, certain former members of Cut+Sew/Zoned are entitled to receive: (i) up to $1,250,000 in Common Shares (such shares to be issued at a deemed issue price of $0.50 per Common Share), up to $975,000 in Common Shares (such shares to be issued at the closing price of the Common Shares on July 27, 2022) and up to $150,000 in cash if Cut+Sew/Zoned generates up to US$1 million in EBITDA in the 12 months following closing of the Cut+Sew/Zoned Transaction; and (ii) up to $650,000 in Common Shares (such shares to be issued at a deemed issue price of $0.50 per Common Share), up to $1,560,000 in Common Shares (such shares to be issued at the closing price of the Common Shares on July 27, 2022) and up to $240,000 in cash if Cut+Sew/Zoned generates up to US$1.5 million in EBITDA in the period from 12 to 24 months following the closing. The Common Shares issued pursuant to the Cut+Sew/Zoned Transaction are subject to a 6-month lock up period.

On July 30, 2021, GameSquare changed its fiscal year-end from November 30 to December 31.

On September 21, 2021, the Company announced the election of the Board including Tom Walker, Travis Goff, Craig Armitage, Paul LeBreux, Justin Kenna, and Kevin Wright. Neil Said resigned as a director of the Company at this time.

Effective November 1, 2021, as part of an internal reorganization, GameSquare Esports Inc. amalgamated with its wholly-owned subsidiary, Reciprocity Corp. The amalgamated company retained the name GameSquare Esports Inc.

On December 20, 2021, the Common Shares began trading on the OTCQB Venture Market in the United States under the symbol "GMSQF".

**Recent Developments** 

On January 6, 2022, the Company, announced that Justin Kenna, CEO of GameSquare, and Christina Grushkin, Head of Sales at Complexity Gaming, were named by Business Insider as top executives defining the future of advertising in video games and esports. The list includes executives from leading companies such as Anheuser-Busch, McDonald's, Verizon, State Farm, Nike, and Honda as well as top agencies and esports organizations like Dentsu, Omnicom Media Group, and Evil Geniuses. The article, published by *Business Insider*, highlights the acquisitions that GameSquare has completed under Justin's tenure as CEO and the positive impact that the business can have on satisfying advertisers' needs around marketing, talent management, and organizing events. *Business Insider* also noted that Complexity provides sponsorship opportunities for brands and that its head of sales, Christina Grushkin, is key to these efforts.

On January 27, 2022, the Company announced that it had entered into a sponsorship agreement with ARterra Labs Co. ("ARterra"), an NFT (Non-Fungible Token) platform hyper-focused on the esports and gaming market. ARterra has been named the Official NFT Marketplace of Complexity Gaming and the Exclusive NFT Platform of Complexity Gaming. The sponsorship is meaningful to Complexity with additional opportunities to expand and grow the sponsorship as ARterra seeks to accelerate engagement within the esports and gaming community. Complexity and ARterra will collaborate on the official launch of the platform and together intend to build engagement strategies to ensure authenticity for the gaming and esports community through education and enhanced understanding of digital collectibles. ARterra has created a carbon neutral platform and marketplace and strives to create genuine utility for its fans and creators.

On February 23, 2022, the Company released a Letter to Shareholders, available on the Company's website, which highlights the importance of identifying and launching new businesses that scale rapidly and the importance of building diversity to improve the Company's ability to make great decisions and become a world class organization. Management believes that the launch of Fourth Frame Studios, with Mr. Okusanya at the helm, supports these initiatives.

On March 1, 2022, Oluwafemi "Femi" Okusanya joined the Company to lead the newly launched Fourth Frame Studios. Mr. Okusanya is a leading creative director with extensive experience growing content studios. He is the recipient of numerous Streamy Awards, including best branded content in 2021. His extensive resume of working with top tier companies includes global brands and household names within the automotive, sports apparel, footwear, luxury brands, and professional sports teams and leagues. Fourth Frame Studios is a first-of-its-kind content production and creative execution studio at the intersection of gaming and culture. The LA based studio will develop creative content solutions for brands to reach the next generation of consumers.

Additionally, on April 5, 2022, GameSquare announced a fully subscribed US$3 million non-brokered private placement. As of the date of this Form 20-F, the private placement had not closed.

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We also entered into US$5 million credit facility which will provide the Company with access to capital, if required, to execute on its strategic priorities. The credit agreement will become available for draw down after satisfaction of certain conditions precedent.

**History of Magnolia Colombia Ltd.**

Camflo Resources Ltd. ("**Camflo**"), a predecessor to Magnolia, was incorporated on March 21, 1997 under the *Business Corporations Act* (Alberta) ("**ABCA**").

By articles of continuance dated May 24, 2001, Camflo was continued into Yukon Territory, and its name was changed to Camflo International Inc. by articles of amendment dated November 22, 2001. Camflo was continued back into Alberta by articles of continuance dated August 20, 2004 pursuant to the ABCA.

696406 Alberta Inc. ("**Spearhead**"), another predecessor to Magnolia, was incorporated on May 24, 1996 under the ABCA. By articles of amendment dated July 22, 1996, Spearhead changed its name to Spearhead Resources Inc.

Camflo amalgamated with Spearhead to become Arctos Petroleum Corp. ("**Arctos**") on September 30, 2004 by way of articles of amalgamation under the ABCA. Thereafter, Arctos amalgamated with Stetson Oil & Gas Ltd. and changed its name to Stetson Oil & Gas Ltd. ("**Stetson**") by way of articles of amalgamation dated November 9, 2007.

By articles of amalgamation pursuant to the ABCA dated June 1, 2009, Stetson amalgamated with 1470975 Alberta Ltd. to become Stetson. Stetson was then continued into Ontario pursuant to the provisions of the OBCA by articles of continuance dated August 21, 2014, and its name was changed to Magnolia Colombia Ltd. by articles of amendment dated June 14, 2017.

Following the completion of the RTO, Magnolia changed its name to GameSquare Esports Inc. by articles of amendment pursuant to the OBCA dated September 30, 2020. GameSquare Esports Inc.'s registered office is located at 150 York Street, Suite 1008, Toronto, Ontario M5H3S5, Canada. Its telephone number is (647) 670-2500.

The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov. the Company maintains an Internet site at https://www.gamesquare.com/.

**B. Business Overview**

The Company is an international esports company. Esports refers to competitive video gaming where gamers compete against one another individually or in teams. Typically, spectators can observe esports competitions by accessing different online viewing platforms, such as Twitch, or in person at live events. Esports gamers can now participate in regulated leagues, tournaments or other competitions for various games on different entertainment systems. Gamers, teams, team managers, streamers, game developers, online viewing platforms and other participants in the esports industry monetize such competitions through different means, including viewer subscriptions, marketing sponsorships and ticket sales for live events. Within the esports market, the Company seeks to bridge the gap between global brands and the large gaming and esports communicates by providing digital media services to global brands seeking to target the large and growing esports market, and by signing top-tier talent in the influencer, on-screen talent and player categories. GameSquare seeks to augment its organic growth through acquisitions.

The esports industry is growing rapidly, with The Esports Observer reporting US$8.1 billion (approximately $9.8 billion) of disclosed investment and over 100 billion hours watched in 2020. NewZoo predicts that by 2023, the global audience for esports will reach 600 million and the industry will generate US$218 billion (approximately $264 billion) in revenue annually.

The Company's business is primarily carried out through four entities, GameSquare (which now includes the previous Reciprocity business), NextGen Tech LLC dba Complexity Gaming, Swingman LLC (dba Cut+Sew and Zoned) and Code Red. The business is comprised of two operating segments: Teams and Agency Services. The Company's Teams segment represents its esports teams which generate revenue through sponsorship, prize and player-related revenue. The Company's teams include: Complexity Gaming, R7 Gaming, and LGD Gaming. The Company's Agency Services segment represents its esports agencies which include: Code Red, GCN and Cut+Sew/Zoned. The Company's agencies generate revenue through talent management, influencer promotional fees and consulting.

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**Revenue and Segmented Information**

IFRS 8 requires operating segments to be determined based on the Company's internal reporting to the Chief Operating Decision Maker ("CODM"). The CODM has been determined to be the Company's managing director as he is primarily responsible for the allocation of resources and the assessment of performance. The CODM uses net income, as reviewed at periodic business review meetings, as the key measure of the Company's results as it reflects the Company's underlying performance for the period under evaluation.

The CODM's primary focus for review and resource allocation is the Company as a whole and not any component part of the business. Having considered these factors, management has judged that the Company having two operating segments under IFRS.

The Company's "Teams" segment represents its esports teams, which generate revenue through sponsorship, prize and player related revenue. The Company's teams include: Complexity Gaming, R7 Gaming, and LGD Gaming.

The Company's "Agency Services" segment represents its esports agencies which include: Code Red, GCN and Cut+Sew/Zoned. The Company's agencies generate revenue through talent management, influencer promotional fees and consulting.

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| **Thirteen months ended December 31, 2021** | **Thirteen months ended December 31, 2021** |  |  |  |  |
| <br>Revenue channel | **Europe**<br>**$** | **USA**<br>**$** | **Canada**<br>**$** | **Mexico**<br>**$** | **Total**<br>**$** |
| &nbsp;&nbsp;&nbsp;&nbsp; Sponsorship |  | 1482499 |  |  | 1482499 |
| &nbsp;&nbsp;&nbsp;&nbsp; Winning/Player buyout/Other | - | 1258047 | - | 265034 | 1523081 |
| Total Team Revenue |  | 2740546 |  | 265034 | 3005580 |
| Cost of Sales | - | 2647056 | - | 241701 | 2888757 |
| Gross profit | - | 93490 | - | 23333 | 116823 |
| &nbsp;&nbsp;&nbsp;&nbsp; Influencer / on screen talent representation | 5707071 |  |  |  | 5707071 |
| &nbsp;&nbsp;&nbsp;&nbsp; Digital media and marketing | - | 4975238 | - | - | 4975238 |
| Total Agency Revenue | 5707071 | 4975238 |  |  | 10682309 |
| Cost of sales | 4384258 | 1977616 |  |  | 6361874 |
| Gross profit | 1322813 | 2997622 | - | - | 4320435 |
| Non-current assets | 1236690 | 16267137 | 340444 | 36900 | 17881171 |

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| **Year ended November 30, 2020** | | | | | |
| <br>Revenue channel | **Europe**<br>**$** | **USA**<br> **$** | **Canada**<br> **$** | **Mexico**<br> **$** | **Total**<br>**$** |
| &nbsp;&nbsp;&nbsp;&nbsp; Influencer / on screen talent representation | 488774 |  | - |  | 488774 |
| Total Agency Revenue | 488774 |  |  |  | 488774 |
| Cost of sales | 331228 |  | - |  | 331228 |
| Gross profit | 157546 |  | - |  | 157546 |
| Non-current assets | 4621095 |  | 338606 |  | 4959701 |

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**Code Red**

Code Red is an international esports company incorporated under the laws of England and Wales on November 25, 2016, with registration number 10498527 and its registered address at 20-22 Wenlock Road, London N17GU, U.K.

Code Red generates 100% of its revenue in the agency services segment in the U.K. and EU esports markets. Code Red focuses on three areas of agency services: (i) representing players, influencers and other on-screen talent; (ii) consulting; and (iii) managing and brokering brand activations for influencers.

<sup>1</sup> Seck, Tobias. December Investment Recap: Acquisitions, Growth Funding Rounds, and a Bidding War. The Esports Observer. January 5, 2021. https://archive.esportsobserver.com/december-2020-investment-recap/.

<sup>2</sup> NewZoo. (2020). Global Esports Market Report.

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***Representing esports players, influencers and other on-screen talent.***

Code Red represents esports players and influencers, including leading Twitch streamers, YouTubers and gaming personalities, as well as other on-screen talent, such as commentators, analysts, event hosts, and production crew. Such representation includes soliciting and negotiating contracts with respect to sponsorships and endorsements and participation in esports tournaments, television shows and corporate events. Code Red currently represents approximately 75 esports personalities.

For the year ended December 31, 2021, representation of esports players, influencers and other on-screen talent and production crew generated approximately **62**% of Code Red's revenue.

***Consulting.***

Code Red provides consulting services to individuals and businesses operating in a variety of roles in the esports industry, including (i) ventures, sponsors and investors; (ii) tournament organizers; (iii) game publishers and developers; and (iv) producers and broadcasters.

For the year ended December 31, 2021, consulting generated approximately 20% of Code Red's revenue.

<u>Ventures, Sponsors and Investors</u>

Code Red advises esports organizations, sponsors and investors on a variety of esports industry-related matters, including: (i) industry networking; (ii) content acquisition; (iii) public relations; (iv) marketing; (v) customer acquisition, product development and strategy for esports betting; (vi) soliciting and negotiating sponsorships; and (vii) team purchases and player movement.

<u>Tournament Organizers</u>

Code Red advises tournament organizers on tournament structure and rule sets for a range of tournament formats, from worldwide community-based tournaments to stadium esports formats, such as Blizzard's StarCraft II World Championship Series U.K.

<u>Game Publishers and Developers</u>

Code Red advises game publishers and developers such as Ubisoft and Massive Entertainment on designing broadcast- ready games by honing in-game spectator modes for improved viewing and commentating. Such advice typically relates to overlay placement, broadcasting options for streamers and commentators and scoreboard, replay and timer displays, as well as a number of other design elements.

 <u>Producers and Broadcasters</u>

Code Red leverages its experience assisting in the production of more than 100 esports shows, including online broadcasts via IPTV and Twitch, as well as traditional satellite and cable television broadcasts on channels including Sky Sports, Sky One, ESPN, Eurosport and DirecTV, to advise esports producers and broadcasters on esports-related matters. Typical advice covers a range of matters, including the preparation of show scripts and rundowns, esports event production, live streaming and talent hiring.

***Managing and brokering of brand activations for influencers.***

Code Red advises players, influencers and other on-screen talent in the esports industry on matters relating to the production of events and campaigns to generate brand awareness and build lasting connections with its clients' target audience. Most brand activations are interactive, allowing audiences to engage directly with the Company's client's brand. For example, a global virtual private network provider contracts with Code Red influencers to generate brand awareness for its product. Influencers use or endorse this client's products during streaming events.

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For the year ended December 31, 2021, managing and brokering of brand activations for influencers generated approximately 18% of Code Red's revenue.

**Reciprocity**

Effective November 1, 2021, as part of an internal reorganization, GameSquare Esports Inc. amalgamated with its wholly-owned subsidiary, Reciprocity Corp. The amalgamated company retained the name GameSquare Esports Inc. and carries on the previous business of Reciprocity.

Prior to the amalgamation, Reciprocity contractually owned a 49% interest in HangZhou Lyon Culture and Creativity Co, Ltd. ("Lyon"), a limited liability company duly incorporated and existing in the People's Republic of China. The Company's Chinese local partner in this entity is LGD Gaming. Lyon owns a CrossFire game franchise spot and its esports team competes in China to win prize money. The Company has assessed the carrying amount of its investment in Lyon and, in consideration of losses sustained, expected recoverable values and the future direction of the business, recorded an impairment charge to reduce the carrying value to a nominal $1.00. Following the amalgamation, the interest is held by the Company.

**Complexity Gaming (NextGen Tech LLC)**

NextGen Tech LLC is a limited liability company incorporated under the laws of the State of Texas, United States with its headquarters in Frisco, Texas.

Complexity is a leading esports organization, which fields world-class esports teams in CS:GO, Fortnite, Valorant, APEX Legends, Hearthstone, Madden Football, Rocket League, Halo, MTG:Arena and FIFA soccer. Over the last eighteen years, Complexity has won over 140 championships in nearly 30 games. Complexity has also participated and hosted numerous major esports events with combined annual viewer minutes of 3.2 billion and is home to one of the foremost operations centers and training facilities at The Star.

The principal activity of Complexity is esports team management in which Complexity generates revenue primarily from sponsorships. Complexity's reputation has attracted blue-chip sponsors, including Miller Lite, Dairy MAX, ARterra Labs and Herman Miller (NASDAQ: MLHR). The Company is in the process of building out its merchandise business.

As part of the Complexity acquisition, the Company entered into a multi-year esports and gaming partnership to become the agency of record for the Dallas Cowboys.

In September 2021, TimTheTatman, one of the most popular esports personalities with more than 18 million social followers, joined Complexity. It is expected that TimTheTatman, as a member of Complexity, will increase viewership and engagement with the team and help to position Complexity as a leading streaming organization.

In March 2022, the Company announced that Complexity had entered into a multi-year sponsorship agreement with Lenovo Group which provides Lenovo with naming rights for the Complexity headquarters located at the home of the Dallas Cowboys as The Star in Frisco and its lead sponsor.

**Cut+Sew/Zoned (Swingman LLC)**

Cut+Sew/Zoned is a gaming and lifestyle marketing agency based in Los Angeles, California. The company's management team, led by Devon Woodruff and Sean Maher, has built a leading creative agency and brand studio sitting at the intersection of traditional sports and gaming, emerging technology, new media and music industries. The company has built campaigns for some of the world's most innovative brands, while also maintaining a portfolio of start-ups that is has advised and helped to bring to market.

**Growth Strategy**

The Company's growth strategy entails four elements: (i) focused execution of its esports agency and digital media businesses; (ii) scale organically by bridging the gap between global brands and gaming and esports communities; (iii) grow partnerships with major sports teams and leagues in North America and Europe; and (iv) pursue opportunistic and accretive acquisitions.

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***Focused execution of our digital media and agency businesses.***

The Company intends to generate significant organic growth through Code Red's representation business, the digital media agency, GCN and Cut+Sew/Zoned's gaming and lifestyle marketing agency business and Complexity's increased viewership and engagement and partnership with the Dallas Cowboys.

With respect to Code Red, continued expansion of on-screen talent represented, with a focus on increasing the number of influencers, is expected to accelerate sales within its brand activation segment. Code Red increased its focus on the influencer segment during 2020 and 2021 and added headcount to manage its representation business, enabling it to increase efforts to broker new brand activations. The Company believes that Code Red is well positioned to capitalize on the significant growth potential of the esports industry as secular trends are driving increasing viewership, growing corporate sponsorships, and a sharp increase in media rights.

GCN has increased headcount in sales, marketing and production to accelerate organic growth of the digital marketing group and has dramatically increased its outbound sales calls, resulting in a growing project pipeline. Similarly, Cut+Sew/Zoned provides an opportunity to expand its client base within the gaming and lifestyle marketing sector.

***Scale organically by bridging the gap between global brands and gaming and esports communities.***

Global brands are increasingly aware of the esports industry's significant growth potential, resulting in greater opportunities for sponsorships of streamed and in-person esports events and esports teams, players, influencers and other on-screen talent, as well as other forms of advertising. In light of this trend, the Company will continue to invest in sales, marketing and production activities to attract new on-screen talent and global brands as clients and accelerate organic growth. Recently announced partnerships with TimTheTatman, Dennis "Cloakzy" Lepore, the Dallas Cowboys, Paradigm Sports, and Roc Nation Sports as well as innovative activations with clients like Bagel Bites and the NFL illustrate the types of relationships that the Company has been able to secure as a result of this effort and will continue to explore.

***Grow partnerships with distribution partners and technology vendors in North America and Europe.***

Rather than director ownership of distribution assets, GCN partners with approximately 75 websites and internet properties with more than 65 million monthly unique users in the U.S. GCN will continue to contract with distribution partners to grow its end audience, primarily in the U.S. and Europe, and enhance its offering to large global brands seeking to market to esports fans.

The acquisition of Complexity Gaming provides the Company with one of the longest-standing esports organizations which, over the past 18 years, has won over 140 championships in nearly 30 games. In 2017, founder and current CEO Jason Lake made history by welcoming Dallas Cowboys owner Jerry Jones and investor John Goff to the team's ownership. With unparalleled support and infrastructure from its ownership group, Complexity has created the world's foremost operations center and training facilities. Complexity's player-first mentality, passion, professionalism and innovation have led them to be recognized as a global leader in modern esports. The team provides opportunities for brands to access the large and growing gaming and esports audience through sponsorships, branded content, events, customer activations and more. Complexity is located at The Star in Frisco, Texas, which is home to the Ford Centre, a 12,000 person indoor stadium which can host global esports events.

***Pursue opportunistic and accretive acquisitions.***

The Company engages in identifying, acquiring and developing esports agencies, influencer technology platforms, analytics technologies, content creation and media content assets as evidenced by the recent acquisitions of Complexity and Cut+Sew/Zoned. The Company intends to continue pursuing accretive acquisitions on an opportunistic basis which complement its existing business. GameSquare will continue to focus on digital media groups and agency assets focusing on the esports industry, and more broadly within entertainment and sports. Additionally, the Company will seek to acquire assets with compelling content and audiences that are under-monetized.

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**Competition**

The success of the business depends on the ability to successfully compete with other esports businesses in identifying, acquiring and developing complementary businesses and in growing the Company's existing businesses organically.

***Competition for strategic acquisitions***

The Company competes with other businesses seeking to identify and acquire esports-related businesses in North America and Europe. The Company's competition for strategic acquisitions is typically characterized by its focus on esports-related target businesses and access to capital in the public markets. In some cases, the competitors may be larger than GameSquare and with significant more cash available to pursue an acquisition than the Company.

***Competition among esports agencies***

The Company competes, through Code Red, with other esports agencies operating in North America and Europe, for the representation of esports players, influencers and other on-screen talent, including commentators, analysts, event hosts, and production crew. GameSquare also competes with other esports agencies for sponsorships, tournament participation and other opportunities for clients. This segment of the esports market is typically characterized by a high degree of fragmentation. Agencies are typically private, and often lack significant access to capital, which hinders the Company's competitors' ability to scale.

***Competition among esports digital marketing agencies***

As a result of the Reciprocity and Cut+Sew/Zoned acquisitions, the Company competes with other esports and lifestyle digital marketing agencies in North America and Europe. This segment of the esports market is typically characterized by private companies competing in a highly fragmented market. Typically, digital media groups are undercapitalized and lack the benefit of a substantial balance sheet, which hinders their ability to compete for long-term business with large clients seeking significant financial resources to ensure the longevity of a vendor.

***Competition amount esports organizations***

As a result of the Complexity acquisition, the Company competes with other esports teams for revenue through sponsorships, merchandise sales and tournament winnings. Complexity's success and financial results depend in large part on the performance and popularity of its players and teams which compete with other esports teams and players. There is competition among these organizations for talent which can lead to loss or defection of any of Complexity's players or higher salaries and costs.

***Branding and Marketing***

Our branding and marketing activities consist primarily of business-to-business activities which are driven by relationship- based marketing. GameSquare and Code Red engage with professional agencies to create, maintain and develop logos, websites and social platforms, as well as utilize the services of public relations firms to amplify newsworthy press releases. Additionally, Gamesquare and Code Red participate in conferences and industry panels to enhance awareness of their services and brands.

**Technology**

GCN has developed a bespoke advertisement unit, built to Interactive Advertising Bureau standards and operated through GCN's proprietary media network of websites and communities, enabling the unit to showcase "live" content as it is being streamed in the form of banner advertisements. As a result, GCN can efficiently and effectively present live content to a core gaming audience while enticing the audience to click the banner and visit the source content.

**Risk Management and Internal Control**

The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board approves and monitors the Company's risk management processes, inclusive of documented investment policies, counterparty limits and controlling and reporting structures. The type of risk exposure and the way in which the Company manages such exposure is as follows:

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***Credit risk***

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company's primary exposure to credit risk is on its cash held in bank accounts. The majority of cash is deposited in bank accounts held with a major bank in Canada. As most of the Company's cash is held by one bank there is a concentration of credit risk. This risk is managed by using major banks that are high credit quality financial institutions as determined by rating agencies.

***Liquidity risk***

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company has a planning and budgeting process in place to help determine the funds required to support its normal operating requirements on an ongoing basis. The Company ensures that there are sufficient funds to meet its short-term business requirements, taking into account its anticipated cash flows from operations and its holdings of cash. As of December 31, 2021, the Company had a working capital surplus of $8,582,602 and $264,309 as at November 30, 2020.

Historically, the source of funding for the Company have been private placement and, recently, a revolving loan facility. The Company has not drawn down on the loan facility of the date of this Form 20-F. The Company's access to financings is always uncertain and there can be no assurance of continued access to significant equity funding.

***Foreign exchange risk***

Foreign currency risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because they are denominated in currencies that differ from the respective functional currency. Although GameSquare's functional currency is the Canadian dollar, Code Red's functional currency is GBP and U.S. dollars is the functional currency of the Company's other subsidiaries. The Company's subsidiaries are affected by currency transaction and translation risk primarily with respect to the GBP, the euro and the U.S. dollar. Consequently, fluctuations in the Canadian dollar currency against these currencies could have a material impact on its business, financial condition and results of operations. The Company does not engage in hedging activity to mitigate this risk.

***Interest rate risk***

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. As of the date of this Form 20-F, the Company does not have any financial instruments (other than cash and fixed income investments that earn interest at variable interest rates) subject to interest rate risk**.**

***Capital management***

The Company's policy is to maintain a strong capital base so as to maintain investor and creditor confidence and to sustain future development of the business. The Company's capital structure consists of shareholders' equity and cash. The Company is not subject to any externally imposed capital requirements.

***Fair value***

The fair value of the Company's financial assets and liabilities approximates the carrying amount. Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are:

· Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities;

· Level 2 - Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and

· Level 3 - Inputs that are not based on observable market data.

Cash, receivables, accounts payable and accrued liabilities and loans approximate its fair value due to its short-term maturity.

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**Intellectual Property**

The Company's intellectual property rights are significant assets of the Company in that they provide brand recognition worldwide. The Company relies on a combination of intellectual property laws, confidentiality procedures and contractual provisions to protect its proprietary assets and its brands. The Company customarily seeks U.S., Canadian and international trademark or copyright protection to the extent that such protection is available, cost effective and meaningful. The Company vigorously protects its intellectual property under international trademark and copyright laws, and is actively engaged in enforcement of its rights against potential infringers of those rights along with other protective activities. Although a number of the Company's trademarks and copyrights relate to brands that are significant to the Company's business and operations, the Company does not believe it is dependent on a single trademark or copyright, however the loss of such protection for a number of significant brands might have such an effect. The Company believes its rights to these brands are adequately protected, but these rights may not be successfully asserted in the future or may be invalidated, circumvented or challenged.

**Regulation**

The Company's business is not materially affected by government regulations. The esports industry is not regulated by any governmental regulatory body in the jurisdictions in which the Company operates.

**C. Organizational Structure**

The following structure chart identifies GameSquare's material subsidiaries as of the date of this Form 20-F.

![](gcn_20fimg25.jpg)

The subsidiaries as listed have share capital consisting solely of common shares, which are held directly or indirectly by GameSquare and the proportion of ownership interest held is equal to the voting rights held by GameSquare.

**D. Property, Plants and Equipment**

GameSquare does not own any material property, plants and equipment.

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**ITEM 4A. UNRESOLVED STAFF COMMENTS**

Not applicable.

**ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS**

The following discussion of our financial condition and results of operations is intended to convey management's perspective on our operational performance and financial performance as measured in accordance with International Financial Reporting Standards and in accordance with the International Accounting Standards 34, Interim Financial Reporting, as issued by the International Accounting Standards Board.

We intend this disclosure to assist readers in understanding and interpreting the audited consolidated financial statements included in this Form 20-F. This section is based on, and should be read in conjunction with, those audited consolidated financial statements and the notes thereto.

The following discussion also contains trend information and forward-looking statements. Actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this registration statement, particularly under "*Forward-Looking Statements*" and "*Item 3. Key Information - D. Risk Factors.*"

**A. Operating Results**

**Key Factors Affecting Results of Operations**

Our operating results are affected by a number of factors, including, in particular, (i) the continued growth of the esports industry; (ii) the successful identification and acquisition of esports assets; and (iii) the performance of our business.

***Continued growth of the esports industry***

Our results of operations depends on our ability to organically grow our portfolio of esports assets. Currently, esports industry is growing rapidly, with US$8.1 billion (approximately C$10 billion) of disclosed investment and over 100 billion hours watched in 2020. NewZoo predicts that by 2023, the global audience for esports will reach 600 million and the industry will generate US$218 billion (approximately C$273 billion) in revenue annually. However, there is no guarantee that the industry will continue to grow or will achieve these predictions. We are focusing our growth efforts and strategies on the digital agency vertical which serves the esports market, and more broadly in sports and entertainment through content creation, audience development and growing brand relationships.

Should the esports industry stagnate or shrink, there will be fewer opportunities for GameSquare, including other esports assets that the Company may acquire from time to time, to generate revenue and grow.

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***Successful identification and acquisition of esports assets***

The Company has developed a thorough and rigorous set of acquisition criteria and is considering companies that generate revenue roughly between $5 million to $25 million with EBITDA margins in the 20% to 40% range, depending on the size and maturity of the business. Transactions will typically be structured to favour stock over cash and include achievable and reasonable earn outs over as many as 24 months. We intend to use these criteria and guidelines; however, we may decide to enter into a transaction with a target that does not meet any or all of these criteria or guidelines. These criteria are not intended to be exhaustive and may not apply in all cases or at all. There is no assurance that the Company will be able to complete such potential acquisitions in the near future or at all and on terms, that are favourable to the Company. Any of these challenges could affect its results of operations.

***Performance of our Business***

We will seek to generate significant organic growth through Code Red's representation business, our digital media agency, GCN, and Cut+Sew/Swingman's gaming and lifestyle marketing agency business and Complexity's increased viewership and engagement and partnership with the Dallas Cowboys.

With respect to Code Red, continued expansion of on-screen talent represented, with a focus on increasing the number of influencers, is expected to accelerate sales within its brand activation segment. Code Red increased focus on the influencer segment during 2020 and throughout 2021 and added headcount to manage its representation business, enabled the Company to increase its efforts to broker new brand activations.

GCN has increased headcount in sales, marketing and production to accelerate organic growth of the digital marketing group and has dramatically increased its outbound sales calls, resulting in a growing project pipeline. Similarly, Cut+Sew/Swingman provides an opportunity to expand its client base within the gaming and lifestyle marketing sector.

**COVID-19** 

The Company's operations could be significantly adversely affected by the effects of a widespread global outbreak of a contagious disease, including the outbreak of respiratory illness caused by COVID-19. The Company cannot accurately predict the impact COVID-19 will have on its operations and the ability of others to meet their obligations with the Company, including uncertainties relating to the ultimate geographic spread of the virus, the severity of the disease, the duration of the outbreak, and the length of travel and quarantine restrictions imposed by governments of affected countries. In addition, a significant outbreak of contagious diseases in the human population could result in a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could further affect the Company's operations and ability to finance its operations.

**Results of Operations**

The following financial information is derived from the consolidated financial statements for the four and thirteen months ended December 31, 2021 and the three months and year ended November 30, 2020. During the period ended December 31, 2021, the Company changed its fiscal year end from November 30 to December 31. As a result of this change, the results of the quarter ended December 31, 2021 are for the four months ended December 31, 2021 with the comparative period consisting of the three months ended November 30, 2020.

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| | | | | |
|:---|:---|:---|:---|:---|
| ***($ Canadian)***  | **Four months ended**<br>**December 31, 2021** | **Three months ended**<br>**November 30, 2020** | **Thirteen months ended**<br>**December 31, 2021** | **Year ended**<br>**November 30, 2020** |
| **Revenue** | $**9070912** | $488774 | $**13687889** | 488774 |
| Cost of sales | **5710992** | 331228 | **9250631** | 331228 |
| Gross profit | **3359920** | 157546 | **4437258** | 157546 |
| **Other income** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Interest and other income | **5527** | 1947 | **9645** | 1947 |
| Total other income | **5527** | 1947 | **9645** | 1947 |
| **Expenses** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Salaries, consulting and management fees | **4226742** | 564016 | **7617319** | 760648 |
| &nbsp;&nbsp;&nbsp;&nbsp; Player compensation | **361874** |  | **724777** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Professional fees | **516327** | (5641) | **1436522** | 8323 |
| &nbsp;&nbsp;&nbsp;&nbsp; General office expenses | **684040** | 200275 | **1340366** | 202569 |
| &nbsp;&nbsp;&nbsp;&nbsp; Selling and marketing expenses | **327333** |  | **1426503** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Travel expenses | **315714** | 4107 | **676221** | 4107 |
| &nbsp;&nbsp;&nbsp;&nbsp; Shareholder communications and filing fees | **46259** | 42229 | **209830** | 52229 |
| &nbsp;&nbsp;&nbsp;&nbsp; Interest expense | **19040** | 1457 | **181527** | 11497 |
| &nbsp;&nbsp;&nbsp;&nbsp; Bad debt expense | **345** | 74581 | **56318** | 74581 |
| &nbsp;&nbsp;&nbsp;&nbsp; Foreign exchange loss | **(3932)** | 5110 | **2972** | 5110 |
| &nbsp;&nbsp;&nbsp;&nbsp; Change in provision for reclamation deposit | **(2035)** | 6308 | **(97323)** | 6308 |
| &nbsp;&nbsp;&nbsp;&nbsp; Share-based compensation | **1209792** | 709953 | **3644287** | 709953 |
| &nbsp;&nbsp;&nbsp;&nbsp; Transaction costs | **(5268453)** | 1817540 | **9744815** | 1817540 |
| &nbsp;&nbsp;&nbsp;&nbsp; Amortization | **(953398)** | 81433 | **1879825** | 81433 |
| &nbsp;&nbsp;&nbsp;&nbsp; Impairment on goodwill | **2258109** | - | **2258109** | - |
| Total expenses | **3737757** | 3501368 | **31102068** | 3734298 |
| Loss for the period before income taxes | **(372310)** | (3341875) | **(26655165)** | (3574805) |
| Income tax (recovery) | **306310** | (1697) | **(98854)** | (1697) |
| Loss for the period | **(678620)** | (3340178) | **(26556311)** | (3573108) |
| **Other comprehensive loss** |  |  |  |  |
| *Items that will subsequently be reclassified to operations:* |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Foreign currency translation | **(302049)** | 884 | **220299** | 884 |
| **Total comprehensive loss for the period** | $**(980669)** | $(3339294) | $**(26336012)** | $(3572224) |
| **(Loss) for the period attributable to:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Owners of the parent | **(600215)** | (3340178) | **(26515410)** | (3573108) |
| &nbsp;&nbsp;&nbsp;&nbsp; Non-controlling interest | **(78405)** | - | **(40901)** | - |
|  | $**(678620)** | $(3340178) | $**(26556311)** | $(3573108) |
| Basic and diluted net loss per share | $**(0.00)** | $(0.08) | $**(0.17)** | $(0.14) |
| Weighted average number of common shares outstanding - basic and diluted | **243901900** | 40091272 | **156258509** | 24995371 |

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**<u>RESULTS OF OPERATIONS FOR THE FOUR MONTHS ENDED DECEMBER 31, 2021</u>**

During the period ended December 31, 2021, the Company changed its fiscal year end from November 30 to December 31. As a result of this change, the results of the quarter ended December 31, 2021 are for the four months ended December 31, 2021 with the comparative period consisting of the three months ended November 31, 2020.

**Revenue**

Revenues for the four months ended December 31, 2021 were $9,070,912, which include $2,132,776 from Complexity, $2,516,577 from Cut+Sew and $2,457,004 from Code Red.

For the four months ended December 31, 2021, the Company's Team's segment generated revenue of $2,139,795 in North America. The Company's Agency services segment generated revenue of $6,931,117 (Europe $2,217,445 and North America $4,713,672). The Team's segment generated gross loss of $83,777, while the Agency services segment generated gross proft of $3,443,697.

**Expenses**

Salaries, consulting and management fees incurred during the four months ended December 31, 2021 were $4,226,742 compared to $564,016 during the three months ended November 30, 2020. Consulting fees in the current period reflect the consulting fees of GameSquare, Code Red Complexity, Cut+Sew and Reciprocity (and its subsidiaries) for the four months ended December 31, 2021. The consulting fees during the comparative period were for GameSquare (Ontario) Inc. for the three months ended November 30, 2020 and for Code Red and GameSquare from October 2, 2020 (date of acquisition) to November 30, 2020.

Player compensation for the four months ended December 31, 2021 was $361,874 compared to $nil in the comparative period and consisted of salaries and benefits paid to players. The increase reflects the acquisition of teams as part of the Complexity acquisition that did not exist in the Company in the prior periods.

Professional fees of $516,327 incurred during the four months ended December 31, 2021 were for amounts paid or accrued for audit and legal fees for the consolidated Company. Professional fees incurred during the same period in the prior year were a credit of $5,641 and related to the reversal of accounting and audit fees accrued by GameSquare (Ontario) Inc.

General office expenses for the four months ended December 31, 2021 were $684,040, compared to $200,275 in the comparative period. The increase from the prior periods is the result of the acquisitions of Code Red, Reciprocity, Complexity and Cut+Sew.

Selling and marketing expenses were $327,333 for the four months ended December 31, 2021, versus nil in the comparative period. The increase reflects the acquisitions of Complexity and Cut+Sew during the quarter, as well as additional investor relations.

Travel expenses for the four months ended December 31, 2021 were $315,714, versus $4,107 in the comparative period. The increase from the prior period is the result of increased commercial activity of the combined company and the easing of COVID-19 travel restrictions in the current year.

Shareholder communications and filing fees during the four months ended December 31, 2021, were $46,259 compared to $42,229 during the comparative period in the prior year. The increase was due to the acquisitions of Complexity and Cut+Sew, the closing of a bought deal private placement and a concurrent non-brokered private placement and the related press releases and securities filings. During the three months ended November 30, 2020, the Company closed the RTO Transaction and related financing.

The Company recorded a bad debt expense of $345 during the four months ended December 31, 2021, compared to $74,581 in the comparative period in the prior year. The bad debt expense during the comparative period related mainly to the write off of uncollectible accounts and expected credit losses on Code Red amounts receivable from the acquisition date of October 2, 2020 to November 30, 2020.

The Company recorded $1,209,792 in share-based compensation during the four months ended December 31, 2021 related to the amortization of the fair market value of the options and RSUs granted during the thirteen months ended December 31, 2021. The Company granted 14,509,241 options to directors, officers, and consultants of the Company. The options have vesting periods of immediate to three years. In addition, the Company granted 6,242,158 RSUs during the thirteen months ended December 31, 2021 with vesting periods of immediate to three years. The Company recorded $709,953 in share-based compensation during the three months ended November 30, 2020. The Company granted 2,000,000 options to directors, officers, and consultants of the Company in the comparative period; the options vested immediately.

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During the four months ended December 31, 2021, the Company recorded a recovery of $5,268,453 in transaction costs on measurement period adjustments of the purchase price on the acquisitions of Reciprocity, Complexity and Cut&Sew over the fair value of assets acquired and other costs. During the comparative period, on October 2, 2020, the Company completed an RTO Transaction and recorded transaction costs of $1,817,540 which represented the excess of the estimated purchase price over the estimated fair value of the assets acquired in the transaction.

During the four months ended December 31, 2021, the Company recorded amortization recovery of $953,398 related mainly to adjustments to the fair value of intangible assets, equipment and right of use assets acquired on the acquisition of Code Red on October 2, 2020, Reciprocity on March 16, 2021, Complexity on June 30, 2021 and Cut+Sew on July 27, 2021.

During the four months ended December 31, 2021, the Company reassessed the fair value of the goodwill acquired on the acquisition of Code Red and recorded a loss on the impairment of $2,258,109 in the consolidated statements of loss and comprehensive loss.

**<u>RESULTS OF OPERATIONS FOR THE THIRTEEN MONTHS ENDED DECEMBER 31, 2021</u>**

During the period ended December 31, 2021, the Company changed its fiscal year end from November 30 to December 31. As a result of this change, the results of the period ended December 31, 2021 are for the period from December 1, 2020 to December 31, 2021 with the comparative period consisting of the twelve-month period from December 1, 2019 to November 30, 2020.

**Revenue**

For the thirteen months ended December 31, 2021, total revenue was $13,687,889 versus $488,774 for the year ended November 30, 2020. The acquisitions of Complexity and Cut+Sew on June 30, 2021 and July 27, 2021, respectively, contributed $5,482,745 to the revenues for the thirteen months ended December 31, 2021. The remaining revenue for the thirteen months ended December 31, 2021 related mainly to the revenues of Code Red being $5,707,071, which was acquired on October 2, 2020.

For the thirteen months ended December 31, 2021, the Company's Teams segment generated revenue of $3,005,580 in North America. The Company's Agency services segment generated revenue of $10,682,309 (Europe $5,707,071 and North America $4,975,238). The Team segment generated gross profit of $116,823, while the Agency Services segment generated gross profit of $4,320,435.

**Expenses**

Salaries, consulting and management fees incurred during the thirteen months ended December 31, 2021 were $7,617,319 compared to $760,648 during the year ended November 30, 2020. Consulting fees in the current period reflect the consulting fees of GameSquare and Code Red for the thirteen months ended December 31, 2021, Reciprocity (including its subsidiaries) for the period from March 17 to December 31, 2021, Complexity for the period from July 1, 2021 to December 31, 2021 and Cut+Sew for the period from July 27, 2021 to December 31, 2021. The consulting fees during the comparative period in the prior year were for GameSquare (Ontario) Inc. for the full year ended November 30, 2020 and the addition of Code Red and GameSquare consulting fees for the period from October 2, 2020 (acquisition date) to November 30, 2020.

Player compensation for the thirteen months ended December 31, 2021 was $724,777 compared to $nil in the comparative period and consisted of salaries and benefits paid to players. The increase reflects the acquisition of teams as part of the Complexity acquisition that did not exist in the Company in the prior periods.

Professional fees of $1,436,522 incurred during the thirteen months ended December 31, 2021 were for amounts paid or accrued for audit and legal fees for the consolidated Company and included legal and accounting fees incurred on the acquisitions of Reciprocity, Complexity and Cut&Sew and the bought deal financings. Professional fees incurred during the same period in the prior year were $8,323 and related to accounting and audit fees incurred by Gamesquare (Ontario) Inc.

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General office expenses for the thirteen months ended December 31, 2021 were $1,340,366, versus $202,569 in the comparative period. The increase from the prior periods is mainly the result of the additional expenses of the combined entity.

Selling and marketing expenses were $1,426,503 for the thirteen months ended December 31, 2021, versus $nil in the comparative period as a result of enhanced investor relations and the impact of the acquisitions of Reciprocity, Complexity and Cut+Sew during the period.

Travel expenses for the thirteen months ended December 31, 2021 were $676,221, compared to $4,107 in the comparative period. The increase from the prior period is the result of the easing of COVID-19 travel restrictions in the current year.

Shareholder communications and filing fees during the thirteen months ended December 31, 2021 were $209,830 compared to $52,229 during the comparative period in the prior year. The increase was due to the acquisitions of Reciprocity, Code Red, Complexity and Cut+Sew and the closing of three financings and the related required press releases and securities filings.

The Company recorded bad debt expense of $56,318 during the thirteen months ended December 31, 2021, related to the impairment of certain receivables compared to $74,581 in the same period in the prior year.

During the thirteen months ended December 31, 2021, the Company recorded a gain on the change in provision for reclamation deposits of $97,323. On March 17, 2021, the Company received a notice of release on its letter of credit related to oil and gas mining leases in North Dakota. Management had previously considered the letter of credit uncollectible. The reclamation deposits relate to the former activities of Magnolia Colombia Ltd., a predecessor of GameSquare Esports Inc.

The Company recorded $3,644,287 in share-based compensation during the thirteen months ended December 31, 2021 related to the amortization of the fair market value of the options and RSUs granted during the thirteen months ended December 31, 2021. The Company granted 14,509,241 options to directors, officers, and consultants of the Company. The options have vesting periods of immediate to three years. In addition, the Company granted 6,242,158 RSUs during the thirteen months ended December 31, 2021 with vesting periods of immediate to three years. The Company recorded $709,953 in share-based compensation during the year ended November 30, 2020. The Company granted 2,000,000 options to directors, officers, and consultants of the Company in the comparative period. The options vested immediately.

During the thirteen months ended December 31, 2021, the Company recorded $8.5 million in transaction costs on the excess of the purchase price on the acquisition of Reciprocity over the fair value of assets acquired. In addition, the Company incurred $207,678 in transaction costs on the acquisition of Cut+Sew and $1 million in transaction costs on the acquisition of Complexity. During the comparative period, on October 2, 2020, the Company completed an RTO Transaction and recorded transaction costs of $1,817,540 which represented the excess of the estimated purchase price over the estimated fair value of the assets acquired in the transaction.

During the thirteen months ended December 31, 2021, the Company recorded amortization expenses of $1,879,825 on the intangible assets, equipment and right of use assets acquired on the acquisition of Code Red on October 2, 2020, Reciprocity on March 16, 2021, Complexity on June 30, 2021 and Cut+Sew on July 27, 2021.

During the thirteen months ended December 31, 2021, the Company reassessed the fair value of the goodwill on the acquisition of Code Red and recorded a loss on the impairment of $2,258,109 in the consolidated statements of loss and comprehensive loss.

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<u>CASH FLOWS</u>

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| | | | | |
|:---|:---|:---|:---|:---|
| *($ Canadian)* | **Four months ended December 31, 2021** | **Three months ended November 30, 2020** | **Thirteen months ended December 31, 2021** | **Year ended November 30, 2020** |
| Cash flows (used in) operating activities | $**(5265420)** | (354687) | **(13928053)** | (545627) |
| Cash flows (used in) provided by financing activities | **(148963)** | 2727630 | **22468969** | 2895240 |
| Cash flows (used in) investing activities | **(101443)** | (1744448) | **(1677521)** | (2011948) |
| Effect of exchange rate changes on cash | **79207** | 878 | **118512** | 878 |
| Net change in cash | $**(5436619)** | 629373 | **6981907** | 338543 |

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The Company used cash of $5,265,420 and $13,928,053 in operating activities during the four and thirteen months ended December 31, 2021 compared with $354,687 and $545,627 in the comparative periods. The increase in the use of cash was mainly the result of increases in consulting and management fees, professional fees, general office expenses, selling and marketing expenses and shareholder communications as described in the Results of Operations section.

On February 19, 2021, the Company closed a non-brokered private placement financing of 2,381,477 units at a price of $0.42 per unit for gross proceeds of $1,000,220. On March 4, 2021, the Company closed a bought deal private placement financing of 16,700,000 units of the Company at a price of $0.42 per unit for gross proceeds of $7,014,000 and paid share issue costs of $1,150,975. On July 22, 2021, the Company closed the Offering and the Non-Brokered Offering of 42,500,000 Units at a price of $0.40 per Unit for gross proceeds of $17,000,000 and paid share issue costs of $773,835.

In addition, the Company received a $20,000 top up on a Canada Emergency Business Account loan, repaid loans of $602,831, made lease payments of $333,140, had 312,766 options exercised for cash proceeds of $105,000 and had 480,000 warrants exercised for cash proceeds of $192,000 during the thirteen months ended December 31, 2021.

During the thirteen months ended December 31, 2021, the Company acquired $538,385 in cash on the acquisition of Complexity, $396,251 on the acquisition of Cut+Sew and $516,236 in cash on the acquisition of Reciprocity. In addition, the Company acquired all the issued and outstanding membership units of Cut+Sew for $3,000,000 and transferred $16,636 in cash to assets available for sale. During the thirteen months ended December 31, 2021, the Company purchased equipment for $111,757. During the three months and year ended November 30, 2020, the Company purchased shares of Code Red for $2,222,500 and $2,490,000, respectively.

**Off-Balance Sheet Arrangements**

Not applicable.

**B. Research and Development, Patents and Licenses, etc.**

We do not maintain research and development policies and do not engage in research and development.

**C. Trend Information**

For a discussion of trend information, see "*A. Operating Results - Key Factors Affecting Results of Operations*."

**D. Off-Balance Sheet Arrangements**

Not applicable.

**E. Disclosure of Contractual Obligations**

**Office Lease**

On June 30, 2021, the Company acquired Complexity. Complexity leases an office in Frisco, Texas. The lease commenced on April 9, 2019 and expires in April 2029. The lease had a carrying amount of $3,656,573 at the date of acquisition of Complexity. The amortization charge during the period was $237,297.

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The lease liability is measured at the present value of the lease payments that are not paid at the statement of financial position date. Lease payments are apportioned between interest expenses and a reduction of the lease liability using the Company's incremental borrowing rate to achieve a constant rate of interest on the remaining balances of the liabilities. For the thirteen months ended December 31, 2021, the Company recognized $158,637 in interest expense related to its lease liabilities.

A reconciliation of the lease liabilities for the thirteen months ended December 31, 2021 is as follows:

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| | |
|:---|:---|
|  | **December 31, 2021** |
| Balance, beginning of period | $**-** |
| Acquisiton of Complexity | **3889875** |
| Cash outflows  | **(333140)** |
| Finance costs | **158637** |
| Other comprehensive income due to foreign currency adjustment | **88068** |
|  | $**3803440** |

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|:---|:---|
|  | **December 31, 2021** |
| Lease Liability - current | $**382057** |
| Lease Liability - non-current | **3421383** |
|  | $**3803440** |

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**Management Commitments**

The Company is party to certain management contracts. These contracts require payments of approximately $1,761,000 to be made upon the occurrence of a change in control to the officers of the Company. The Company is also committed to payments upon termination of approximately $1,093,000 pursuant to the terms of these contracts. As a triggering event has not taken place, these amounts have not been recorded in these consolidated financial statements.

**Former Activities**

The Company was previously involved in oil and gas exploration activities in Canada, the United States and Colombia. The Company ceased all direct oil and gas exploration activities in 2014. While management estimated that the exposure to additional liabilities from its former oil and gas activities over and above the reclamation provision accrued in the condensed interim consolidated financial statements to be remote, the outcome of any such contingent matters is inherently uncertain.

**Legal Matters** 

From time to time, the Company is named as a party to claims or involved in proceedings, including legal, regulatory and tax related, in the ordinary course of its business. While the outcome of these matters may not be estimable at period end, the Company makes provisions, where possible, for the estimated outcome of such claims or proceedings. Should a loss result from the resolution of any claims or proceedings that differs from these estimates, the difference will be accounted for as a charge to net income (loss) in that period.

**B. Liquidity and Capital Resources**

As at December 31, 2021, the Company had working capital of $8,582,602, compared to $264,309 as at November 30, 2020. The increase in the working capital resulted mostly from the Company's financings undertaken during this period.

The financial statements have been prepared on a going-concern basis, which assumes the realization of assets and liquidation of liabilities in the normal course of business. Continuing operations, as intended, are dependent on management's ability to raise required funding through future equity issuances, its ability to acquire business interests and develop profitable operations or a combination thereof, which is not assured, given today's volatile and uncertain financial markets. The Company may revise programs depending on its working capital position.

Other than its current liabilities of $3,745,746 at December 31, 2021, the Company has no short-term material capital spending requirements, and future plans and expectations are based on the assumption that the Company will realize its assets and discharge its liabilities in the normal course of business rather than through a process of forced liquidation. There can be no assurance that the Company will be able to obtain adequate financing in the future or, if available. that such financing will be on acceptable terms. If adequate financing is not available when required, the Company may be required to delay, scale back or eliminate various programs or acquisition plans and may be unable to continue operations. The Company may seek such additional financing through debt or equity offerings. Any equity offering will result in dilution to the ownership interests of the Company's shareholders and may result in dilution to the value of such interests.

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Additionally, on April 5, 2022, GameSquare announced a fully subscribed US$3 million non-brokered private placement. As of the date of this Form 20-F, the private placement had not closed.

We also entered into US$5 million credit facility which will provide the Company with access to capital, if required, to execute on its strategic priorities. The credit agreement will become available for draw down after satisfaction of certain conditions precedent.

**C. Research and Development, Patents and Licences, etc.**

We do not maintain research and development policies and do not engage in research and development.

**D. Trend Information**

For a discussion of trend information, see "*A. Operating Results - Key Factors Affecting Results of Operations*."

**E. Critical Accounting Estimate**s

Not applicable.

**ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES**

**A. Directors and Senior Management Directors**

The following table sets forth the names and positions of the members of the Board as of the date of this Form 20-F.

---

| | |
|:---|:---|
| **Name** | **Position** |
| Tom Walker | Independent Non-Executive Director |
| Travis Goff | Independent Non-Executive Director |
| Justin Kenna | Chief Executive Officer and Executive Director |
| Kevin Wright | President and Chairman of the Board  |
| Craig Armitage | Independent Non-Executive Director |
| Paul LeBreux | Independent Non-Executive Director |

---

Biographical information for each member of the Board is set forth below.

***Tom Walker, Non-Executive Director, Age 47***

Tom Walker is the Chief Financial Officer of the Dallas Cowboys Football Club and for the Jones Family Office. He previously served at KPMG in various roles across income and transfer tax for high net worth individuals, international tax and legal for ultra high net worth individuals, and global risk for KPMG in North American and European offices.

Mr. Walker received a Bachelor of Science and Master of Science from Oklahoma State University.

***Travis Goff, Non-Executive Director, Age 37***

Travis Goff is President of Goff Capital, Inc., the family office of John C. Goff, and manages its existing and prospective public and private investments. He currently serves as a board member of Complexity Gaming, ProbablyMonsters, Alto, Wyre, Cascade Engineering Technologies and Kilburn Media. Travis previously served as a board member of the NASDAQ listed company Mid-Con Energy Partners.

Mr. Goff received a Bachelor of Arts in Economics from the University of Texas.

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***Justin Kenna, Chief Executive Officer and Executive Director, Age 37***

Justin Kenna is GameSquare's Chief Executive Officer and a member of the Board. Mr. Kenna joined GameSquare after serving and the Chief Financial Officer and Chief Investment Officer of FaZe Clan, a U.S.-based professional esports and entertainment organization. Mr. Kenna's prior experience also includes serving as the director of finance for Madison & Vine and a variety of other positions with Goldman Sachs, Deloitte, Ernst & Young and others.

Mr. Kenna received a Bachelor of Business in Accountancy at RMIT University.

***Kevin Wright, Chairman of the Board and President, Age 48***

Kevin Wright is GameSquare's President and Chairman of the Board and previously served as GameSquare's Chief Executive Officer. Prior to joining GameSquare, Mr. Wright served in a variety of roles in the finance and communications industries, including as a consultant for LodeRock Advisors and Rogers Communications and as an equity analyst covering technology, fintech, gaming and diversified financials companies for Canaccord Genuity and publicly listed telecommunications and wireless companies for Macquarie Capital.

Mr. Wright received a Master of Business Administration from the University of Western Ontario, Richard Ivey School of Business.

***Craig Armitage, Non-Executive Director, Age 49***

Craig Armitage is a member of the Board and is a highly experienced capital markets practitioner, having spent the past 20 years advising and working with various listed growth companies. In addition to serving on the Board, Mr. Armitage is a capital markets communications consultant for LodeRock Advisors and previously performed a variety of investor relations and communications roles with the Equicom Group, IA Clarington Mutual Funds and others.

Mr. Armitage received a Bachelor of Arts in English from the University of Western Ontario, King's University College.

***Paul LeBreux, Non-Executive Director, Age 55***

Paul LeBreux is a leading international tax expert and businessman. With nearly three decades of experience, Mr. LaBreux is an industry leader and published author in his fields of expertise. He was a founding partner and co-managing partner of the Toronto law firm Harris & Harris for nearly 10 years where his legal practice included, mergers and acquisitions, corporate financings, corporate reorganizations, restructurings, amalgamations, wind-ups and divestitures, and domestic and international tax, estate, and trust planning. Mr. LeBreux is a past Chair of the Society of Trust and Estate Practitioners (Canada) and a past Chair of the STEP Canada Technical Committee. He is a partner in the Globacor Group of Companies and a partner at Moodys Tax Law LLP.

Mr. LeBreux received a Bachelor of Laws from the University of Ottawa and a Master of Laws from York University, Osgood Hall Law School.

**Senior Management**

The following table sets forth the names and positions of the members of our senior management as of the date of this Form 20-F.

---

| | |
|:---|:---|
| **Name** | **Position** |
| Justin Kenna | Chief Executive Officer |
| Kevin Wright | President |
| Paul Bozoki  | Chief Financial Officer |
| Jan Neumeister  | Head of European Operations |

---

Biographical information for each member of our senior management (other than Justin Kenna and Kevin Wright, our Executive Directors) is set forth below.

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***Paul Bozoki, Chief Financial Officer, Age 50***

Paul Bozoki is GameSquare's Chief Financial Officer. Mr. Bozoki is a dual Canadian and U.S. certified public accountant with approximately 25 years of accounting, tax and corporate finance experience. He has served as the Chief Financial Officer of several development stage TSX and TSX Venture-listed companies in the mining, technology and consumer products sectors and has extensive experience working in emerging markets. Mr. Bozoki began his career at Ernst & Young where he spent six years in the audit practice.

Mr. Bozoki received a Master of Business Administration from the University of Western Ontario, Richard Ivey School of Business and a Bachelor of Commerce from Queen's University.

***Jan Neumeister, Head of European Operations, Age 38***

Jan Neumeister is GameSquare's Head of European Operations. Prior to joining GameSquare, Mr. Neumeister was the Senior Vice President of Media and Partnerships at FaZe Clan, a U.S.-based professional esports and entertainment organization. Mr. Neumeister also served in a variety of roles for the Manchester City Football Club, including Head of Commercial Media and Mediacom.

Mr. Neumeister received a degree in business management from the University of Surrey.

There is no family relationship between any of the named persons above.

The Company does not have any arrangement or understanding with major shareholders, customers, suppliers or others, pursuant to which any person referred to above was selected as a director or member of senior management.

**Bankruptcies**

Other than as set out below, no director or executive officer of the Company, or a shareholder holding a sufficient number

of securities of the Company to affect materially the control of the Company: (i) is, or within 10 years prior to the date hereof has been, a director or executive officer of any company (including the Company) that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or (ii) has, within 10 years prior to the date hereof, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the director, executive officer or shareholder. On January 19, 2021, Wellflex Energy Partners Fort Worth, LLC was issued a final order of dismissal by the United States Bankruptcy Court. Goff Capital, Inc. was the manager of Wellflex Energy Partners Fort Worth, LLC and Travis Goff, a director of the Company, is the President of Goff Capital, Inc.

**B. Compensation**

The compensation to key management personnel is as below:

---

| | | |
|:---|:---|:---|
|  | **Thirteen months ended December 31, 2021** | **Year ended November 30, 2020** |
| Short term employee benefits | $**1429187** | $339000 |
| Share-based payments | **983943** | 319479 |
| Short term employee benefits | $**2413130** | $658479 |

---

During the thirteen months ended December 31, 2021, the Company granted 2,000,000 options to the Chief Executive Officer and 700,000 options to officers of the Company and recorded $380,080 in share-based compensation related to the vesting of these options. In addition, the Company granted 2,000,000 RSUs to the Chief Executive Officer and recorded $603,863 in share-based compensation related to the vesting of these RSUs.

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**C. Board Practices Term of Office**

Each board member holds his office until the next annual meeting of GameSquare or until his successor is elected or appointed.

**Service Agreements**

See "*Item 1. Identity of Directors, Senior Management and Advisers - A. Directors and Senior Management - Service Agreements*" for a summary of our service agreements.

For the purpose of the agreements with the directors and officers as set forth therein, "Change in Control" is defined as the acquisition by any person or entity of:

1. shares or rights or options to acquire Common Shares or securities which are convertible into common shares or any combination thereof such that after the completion of such acquisition such person would be entitled to exercise 30% or more of the votes entitled to be cast at a meeting of the shareholders of GameSquare;

2. shares or rights or options to acquire shares, or their equivalent, of any material subsidiary of GameSquare or securities which are convertible into shares of the material subsidiary or any combination thereof such that after the completion of such acquisition such person would be entitled to exercise 30% or more of the votes entitled to be cast a meeting of the shareholders of the material subsidiary; or

3. more than 50% of the material assets of GameSquare, including the acquisition of more than 50% of the material assets of any material subsidiary of GameSquare.

Such Change of Control payments may be triggered by either GameSquare or the director or officer who elects from the date of such Change in Control to elect to have such officer's agreement terminated. GameSquare has no compensatory plan or arrangement in respect of compensation received or that may be received by the officers or directors in GameSquare's most recently completed or current financial year in the event of the termination of employment (resignation, retirement, Change in Control) or in the event of a change in responsibilities following a Change in Control.

**Board of Directors and Key Committees**

Certain of our strategic decisions and authorities are reserved as matters for the Board, with other matters, responsibilities and authorities delegated to its committees.

**Audit Committee**

Our audit committee (the "**Audit Committee**") assists the Board in overseeing the integrity of our financial statements, our compliance with legal and regulatory requirements, the qualifications and independence of our independent auditors and the performance of the independent auditors and our internal audit function.

As of the date of this Form 20-F, the Audit Committee is comprised of three directors: Paul LeBreux (Chair), Craig Armitage and Tom Walker. Each member of the Audit Committee is financially literate and independent, as required by applicable securities laws. Please refer to "*Item 6 - A. Directors and Senior Management - Directors*" for the relevant education and experience of each of the members of the Audit Committee. The members of the Audit Committee are appointed annually by the Board and serve at the pleasure of the Board until their successors are duly appointed.

**D. Employees**

The Company's employees are essential to its long-term success. The Company continues to invest in the development of its people and strive to ensure that it is positioned to attract and retain the best talent in the esports industry.

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The table below sets forth the number of full time equivalent ("**FTE**") employees by Group entity and geography for the periods presented.

---

| | |
|:---|:---|
|  | **Number of Employees as at December 31, 2021** |
| GameSquare |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Canada | 2 |
| Code Red |  |
| &nbsp;&nbsp;&nbsp;&nbsp; United Kingdom | 16 |
| Complexity  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; United States | 35 |
| Fourth Frame Studios |  |
| &nbsp;&nbsp;&nbsp;&nbsp; United States | 1 |
| GCN Inc. |  |
| &nbsp;&nbsp;&nbsp;&nbsp; United States | 11 |
| Cut+Sew/Zoned |  |
| &nbsp;&nbsp;&nbsp;&nbsp; United States | 7 |
| Total  | 71 |

---

**E. Share Ownership**

The table below sets forth the number of options to purchase Common Shares and the number of Common Shares currently held by the Company's directors and senior management. This table is based on information provided by such persons and has not been independently confirmed by the Company.

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Name and Title** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Options** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Common Shares** |
| Kevin Wright | **325000** | **2800000** |
| *President & Director* |  |  |
| Justin Kenna | **2000000** | **500000** |
| *CEO & Director* |  |  |
| Paul Bozoki | **384483** | **Nil** |
| &nbsp;&nbsp;&nbsp;&nbsp; *CFO* |  |  |
| Jan Neumeister | **500000** | **Nil** |
| *Head of European Operations* |  |  |
| Craig Armitage | **250000** | **Nil** |
| &nbsp;&nbsp;&nbsp;&nbsp; *Director* |  |  |
| Paul LeBreux | **100000** | **1074649** |
| &nbsp;&nbsp;&nbsp;&nbsp; *Director* |  |  |
| Tom Walker  | **100000** | **Nil** |
| &nbsp;&nbsp;&nbsp;&nbsp; *Director* |  |  |
| Travis Goff<sup>1</sup>  | **100000** | **34894791** |
| &nbsp;&nbsp;&nbsp;&nbsp; *Director*  |  |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Goff NextGen Holdings, LLC owns 34,894,791 Common Shares and 7,968,750 warrants. Travis Goff is the president of Goff NextGen Holdings, LLC.

**ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS**

**A. Major Shareholders**

The following table shows the names of the persons or companies who, to our knowledge, own beneficially, directly or indirectly, more than 5% of any class or series of our securities.

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Name of Shareholder** | &nbsp;&nbsp;&nbsp;&nbsp; **Common Shares** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage of Share Capital** |
| Blue & Silver Ventures, Ltd. | **62184372** | **25.5%** |
| Goff NextGen Holdings, LLC | **34894791** | **14.3%** |

---

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**B. Related Party Transactions**

interest bearing.

**C. Board Practices Term of Office**

Each board member holds his office until the next annual meeting of GameSquare or until his successor is elected or appointed.

**Service Agreements**

See "*Item 1. Identity of Directors, Senior Management and Advisers - A. Directors and Senior Management - Service Agreements*" for a summary of our service agreements.

For the purpose of the agreements with the directors and officers as set forth therein, "Change in Control" is defined as the acquisition by any person or entity of:

· shares or rights or options to acquire Common Shares or securities which are convertible into common shares or any combination thereof such that after the completion of such acquisition such person would be entitled to exercise 30% or more of the votes entitled to be cast at a meeting of the shareholders of GameSquare;

· shares or rights or options to acquire shares, or their equivalent, of any material subsidiary of GameSquare or securities which are convertible into shares of the material subsidiary or any combination thereof such that after the completion of such acquisition such person would be entitled to exercise 30% or more of the votes entitled to be cast a meeting of the shareholders of the material subsidiary; or

· more than 50% of the material assets of GameSquare, including the acquisition of more than 50% of the material assets of any material subsidiary of GameSquare.

Such Change of Control payments may be triggered by either GameSquare or the director or officer who elects from the date of such Change in Control to elect to have such officer's agreement terminated. GameSquare has no compensatory plan or arrangement in respect of compensation received or that may be received by the officers or directors in GameSquare's most recently completed or current financial year in the event of the termination of employment (resignation, retirement, Change in Control) or in the event of a change in responsibilities following a Change in Control.

**Board of Directors and Key Committees**

Certain of our strategic decisions and authorities are reserved as matters for the Board, with other matters, responsibilities and authorities delegated to its committees. The Company does not have a compensation committee.

***Audit Committee***

Our audit committee (the "**Audit Committee**") assists the Board in overseeing the integrity of our financial statements, our compliance with legal and regulatory requirements, the qualifications and independence of our independent auditors and the performance of the independent auditors and our internal audit function.

As of the date of this Form 20-F, the Audit Committee is comprised of three directors: Paul LeBreux (Chair), Craig Armitage and Tom Walker. Each member of the Audit Committee is financially literate and independent, as required by applicable securities laws. Please refer to "*Item 6 - A. Directors and Senior Management - Directors*" for the relevant education and experience of each of the members of the Audit Committee. The members of the Audit Committee are appointed annually by the Board and serve at the pleasure of the Board until their successors are duly appointed.

**D. Employees**

The Company's employees are essential to its long-term success. The Company continues to invest in the development of its people and strive to ensure that it is positioned to attract and retain the best talent in the esports industry.

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The table below sets forth the number of full time equivalent ("**FTE**") employees by Group entity and geography for the periods presented.

---

| | |
|:---|:---|
|  | **Number of Employees as at December 31, 2021**  |
| **GameSquare** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Canada  | **2** |
| **Code Red** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; United Kingdom | **16** |
| **Complexity** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; United States  | **35** |
| **Fourth Frame Studios** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; United States | **1** |
| **GCN Inc.** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; United States | **11** |
| **Cut+Sew/Zoned** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; United States | **7** |
| **Total** | **71** |

---

**E. Share Ownership**

The table below sets forth the number of options to purchase Common Shares and the number of Common Shares currently held by the Company's directors and senior management. This table is based on information provided by such persons and has not been independently confirmed by the Company.

---

| | | |
|:---|:---|:---|
| **Name and Title** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Options** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Common Shares** |
| Kevin Wright | **425000** | **2878000** |
| *President & Director* |  |  |
| Justin Kenna<sup>1</sup>  | **2000000** | **1054000** |
| *CEO & Director* |  |  |
| Paul Bozoki | **350000** | **Nil** |
| &nbsp;&nbsp;&nbsp;&nbsp; *CFO* |  |  |
| Jan Neumeister | **500000** | **Nil** |
| *Head of European Operations* |  |  |
| Craig Armitage | **250000** | **Nil** |
| &nbsp;&nbsp;&nbsp;&nbsp; *Director* |  |  |
| Paul LeBreux | **100000** | **1074649** |
| &nbsp;&nbsp;&nbsp;&nbsp; *Director* |  |  |
| Tom Walker  | **100000** | **Nil** |
| &nbsp;&nbsp;&nbsp;&nbsp; *Director* |  |  |
| Travis Goff<sup>2</sup>  | **100000** | **500000** |
| &nbsp;&nbsp;&nbsp;&nbsp; *Director*  |  |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Justin Kenna owns an additional 2,000,000 RSUs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Goff NextGen Holdings, LLC owns 34,894,791 Common Shares and 7,968,750 warrants. Travis Goff is the president of Goff NextGen Holdings, LLC.

---

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**ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS**

**F. Major Shareholders**

The following table shows the names of the persons or companies who, to our knowledge, own beneficially, directly or indirectly, more than 5% of any class or series of our securities.

---

| | | |
|:---|:---|:---|
| **Name of Shareholder** | &nbsp;&nbsp;&nbsp;&nbsp; **Common Shares** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage of Share Capital** |
| Blue & Silver Ventures, Ltd. | **62184372** | **25.5%** |
| Goff NextGen Holdings, LLC | **34894791** | **14.3%** |

---

**G. Related Party Transactions**

**Key management personnel compensation:**

During the thirteen months ended December 31, 2021, the Company paid $nil for accounting fees to a company jointly controlled by the former CFO (year ended November 30, 2020 - $12,500).

Included in accounts payable and accrued liabilities at December 31, 2021 is $225,978 (November 30, 2020 - $255,807) owed to the chairman of the board of directors of the Company. This amount is due on demand, unsecured, and non-interest bearing.

**H. Interests of Experts and Counsel**

Not applicable.

**ITEM 8. FINANCIAL INFORMATION**

**A. Consolidated Statements and Other Financial Information Financial Statements**

The Group's audited consolidated financial statements for the thirteen month year ended December 31, 2021 with comparative and audited consolidated financial statements for the twelve months ended November 30, 2020 with comparative are incorporated by reference beginning on page F-1.

**Legal Proceedings**

There are no governmental, legal or arbitration proceedings (including such proceedings which are pending or threatened of which the Group is aware) during a period covering at least the previous 12 months preceding the date of this Form 20-F which may have, or have had in the recent past, significant effects on the Group's financial position or profitability.

**Dividend Policy**

We maintain a policy that establishes priorities for the utilization of capital, which, in order of importance, are: (i) funding organic growth and M&A; and (ii) if there is excess cash after these priorities, to return it to shareholders.

**B. Significant Changes**

The following significant changes have occurred relating to the financial information of the Group since December 31, 2021:

On March 1, 2022, the Company announced that it had launched Fourth Frame Studios, a first-of-its-kind content production and creative execution studio with Oluwafemi "Femi" Okusanya as the head of the studio.

On March 25, 2022, the Company announced that it had signed a letter of intent in respect of a US$5 million credit facility to be established by Goff Capital, Inc. and Blue & Silver Ventures, Ltd., a Jerry Jones owned company. The credit facility was finalized on April 15, 2022 and will provide the Company with additional access to capital, if required, to execute on its strategic priorities of continuing to develop profitable, cash flowing digital agencies, and a world-class content creation organization.

On April 5, 2022, the Company announced a fully subscribed US$3.0 million non-brokered private placement. This capital injection along with the recently announced letter of intent for a US$5 million credit facility illustrates the strong support that the Company has from its largest investors, Goff Capital and the Jones Family.

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**ITEM 9. THE OFFER AND LISTING**

**A. Offer and Listing Details**

GameSquare Esports Inc.'s common shares are listed on the Canadian Securities Exchange under the symbol "GSQ", the Frankfurt Exchange under the symbol "29Q1" and the OTCQB Venture Market in the United States under the symbol "GMSQF".

**B. Plan of Distribution**

Not applicable.

**C. Markets**

See "*- A. Offer and Listing Details*" for all stock exchanges where GameSquare's common shares are traded.

**D. Selling Shareholders**

Not applicable.

**E. Dilution**

Not applicable.

**F. Expenses of the Issue**

Not applicable.

**ITEM 10. ADDITIONAL INFORMATION**

**A. Share Capital**

As of December 31, 2021, our authorized share capital consisted of an unlimited number of common shares (without par value). As of the date hereof, 244,381,900 Common Shares were outstanding. All of the allotted and issued shares are fully paid or credited as fully paid.

For additional information on our Common Shares in issue and treasury shares, please refer to note 10 to our audited consolidated financial statements for the twelve months ended December 31, 2021 and 2020, included elsewhere in this Form 20-F.

**B. Memorandum and Articles of Association Incorporation**

GameSquare Esports Inc. an international esports company incorporated under the laws of the province of Ontario, Canada on December 13, 2018 with registry ID 5041519 and its registered office at 150 York Street, Suite 1008, Toronto, Ontario, M5H 3S5, Canada.

**Objects and Purposes of the Company**

Our articles of incorporation do not contain and are not required to contain a description of our objects and purposes. There is no restriction contained in the Company's articles of incorporation on the business that it may carry on.

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**Voting on Certain Proposal, Arrangement, Contract or Compensation by Directors**

Other than as disclosed below, neither our articles nor our corporate by-laws restrict our directors' power to (a) vote on a proposal, arrangement or contract in which the directors are materially interested or (b) to vote with regard to compensation payable to themselves or any other members of their body in the absence of an independent quorum.

Our corporate by-laws provide that a director or officer who: (a) is a party to; or (b) is a director or an officer of, or has a material interest in, any person who is a party to; a material contract or transaction or proposed material contract or transaction with us, shall disclose the nature and extent of such director's or officer's interest at the time and in the manner provided by the OBCA. Any such contract or transaction or proposed material contract or transaction shall be referred to the Board or shareholders for approval in accordance with the OBCA even if such contract or proposed material contract or transaction is one that in the ordinary course of our business would not require approval by the Board or shareholders, and a director interested in a contract or transaction so referred to the Board shall not attend any part of a meeting of our Board of Directors during which the contract or transaction is discussed and shall not vote on any resolution to approve such contract or transaction except as provided by the OBCA.

Subject to our articles, our directors shall be paid such remuneration for their services as our Board of Directors may from time to time determine. Our directors shall also be entitled to be reimbursed for travelling and other expenses properly incurred by them in attending meetings of our Board of Directors or any committee thereof.

The OBCA provides that a director who holds a disclosable interest in a contract or transaction into which it has entered or propose to enter shall not attend any part of a meeting of directors during which the contract or transaction is discussed and shall not vote on any resolution to approve the contract or transaction unless it is a contract or transaction:

(i) relating primarily to such director's remuneration as a director of the company or one of our affiliates; (ii) for indemnity or insurance for the benefit of such director in his/her capacity as a director; or (iii) with one of our affiliates.

A director or officer who holds a disclosable interest in a contract or transaction into which it has entered or propose to enter is not accountable to the Company or its shareholders for any profit or gain realized from the contract or transaction and the contract or transaction is neither void nor voidable by reason only of that relationship or by reason only that the director was present at or was counted to determine the presence of a quorum at the meeting of directors that authorized the contract or transaction, if the director or officer disclosed his or her interest in accordance with the OBCA and the contract or transaction was reasonable and fair to the Company at the time it was approved.

The OBCA provides that a director or officer generally holds a disclosable interest in a contract or transaction if either (a) the director or officer is a party to the contract or transaction with us and such contract or transaction is material to us; or

(b) the director or officer is a director or an officer of, or has a material interest in, any person who is a party to a material contract or transaction or proposed material contract or transaction with us.

**Borrowing Powers of Directors**

Our corporate by-laws provide that, if authorized by its directors, the Company may:

· borrow money upon our credit;

· issue, reissue, sell or pledge debt obligations, including bonds, debentures, notes or other evidences of indebtedness or guarantees, whether secured or unsecured;

· give a guarantee on our behalf to secure performance of an obligation of any person; and

· mortgage, hypothecate, pledge or otherwise create a security interest in all or any currently owned or subsequently acquired real or personal, movable or immovable, property of GameSquare including book debts, rights, powers, franchises and undertakings, to secure any such bonds, debentures, notes or other evidences of indebtedness or guarantee or any other present or future indebtedness, liability or obligation of GameSquare.

Amendment to the borrowing powers described above requires an amendment to our corporate by-laws. Our corporate by- laws do not contain any provisions in connection with amending the by-laws. The OBCA provides that our Board of Directors may by resolution, make, amend or repeal any by-laws that regulate our business and affairs and that the Board of Directors will submit such by-law, amendment or repeal to our shareholders at the next meeting of shareholders and the shareholders may, by ordinary resolution, confirm, reject or amend the by-law, amendment or repeal.

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**Qualifications of Directors**

Under our articles and by-laws, a director is not required to hold a share in our capital as qualification for his or her office but must be qualified as required by the OBCA to become, act or continue to act as a director. The OBCA provides that the following persons are disqualified from being a director of a corporation: (i) a person who is less than 18 years of age; (ii) a person who has been found under the Substitute Decisions Act, 1992 or under the Mental Health Act to be incapable of managing property or who has been found to be incapable by a court in Canada or elsewhere; (iii) a person who is not an individual; and (iv) a person who has the status of a bankrupt.

**Share Rights**

Our authorized share capital consists of an unlimited number of common shares without nominal or par value.

The holders of common shares are entitled to receive notice of and to attend all annual and special meetings of our shareholders and to one vote per share held at each such meeting, and they are entitled to receive dividends as determined and declared by our Board of Directors.

Subject to the rights of the holders of any other class of our shares entitled to receive dividends in priority to or concurrently with the holders of the common shares, our Board of Directors may in its sole discretion declare dividends on the common shares to the exclusion of any other class of shares of GameSquare.

In the event of our liquidation, dissolution or winding up or other distribution of our assets among our shareholders for the purpose of winding up our affairs, the holders of the common shares shall, subject to the rights of the holders of any other class of shares entitled to receive our assets upon such a distribution in priority to or concurrently with the holders of the common shares, be entitled to participate in the distribution. Such distribution shall be made in equal amounts per share on all the common shares at the time outstanding without preference or distinction.

**Procedures to Change the Rights of Shareholders**

The rights, privileges, restrictions and conditions attaching to our shares are contained in our articles and such rights, privileges, restrictions and conditions may be changed by amending our articles. In order to amend our articles, the OBCA requires a resolution to be passed by a majority of not less than two-thirds of the votes cast by the shareholders entitled to vote thereon. In addition, if the Company resolves to make particular types of amendments to its articles, a holder of its shares may dissent with regard to such resolution and, if such shareholder so elects, the Company would have to pay such shareholder the fair value of the shares held by the shareholder in respect of which the shareholder dissents as of the close of business on the day before the resolution was adopted. The types of amendments that would be subject to dissent rights include without limitation: (i) to add, remove or change restrictions on the issue, transfer or ownership of shares of a class or series of our shares; and (ii) to add, remove or change any restriction upon the business that the Company may carry on or upon the powers that it may exercise.

**Meetings**

Each director holds office until our next annual general meeting or until his office is earlier vacated in accordance with our articles or with the provisions of the OBCA. A director appointed or elected to fill a vacancy on our board also holds office until our next annual general meeting.

Annual meetings of our shareholders must be held at such time in each year not more than 15 months after the last annual meeting, as the Board of Directors may determine. Notice of the time and place of a meeting of shareholders must be sent not less than twenty-one days and not more than fifty days, before the meeting.

Meetings of our shareholders shall be held at our registered office or, if our Board of Directors shall so determine, at some other place in Ontario or, at some place outside Ontario if all the shareholders entitled to vote at the meeting so agree.

Our Board of Directors, the Chair of our Board, our Chief Executive Officer, or our President shall have power to call a special meeting of our shareholders at any time.

The OBCA provides that our shareholders may requisition a special meeting in accordance with the OBCA. The OBCA provides that the holders of not less than five percent of our issued shares that carry the right to vote at a meeting may requisition our directors to call a special meeting of shareholders for the purposes stated in the requisition.

Under our by-laws, the quorum for the transaction of business at a meeting of our shareholders is two or more persons, present in person or by proxy and holding in aggregate not less than 33 1/3% of our issued shares entitled to vote at such meeting.

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**Limitations on Ownership of Securities**

Except as provided in the Investment Canada Act (Canada), there are no limitations specific to the rights of non-Canadians to hold or vote our shares under the laws of Canada or Ontario, or in our charter documents.

**Change in Control**

There are no provisions in our articles or by-laws that would have the effect of delaying, deferring or preventing a change in control of our Company, and that would operate only with respect to a merger, acquisition or corporate restructuring involving our Company or our subsidiaries.

**Ownership Threshold**

Neither our by-laws nor our articles contain any provisions governing the ownership threshold above which shareholder ownership must be disclosed. In addition, securities legislation in Canada requires that the Company disclose in its proxy information circular for its annual meeting and certain other disclosure documents filed by it under such legislation, holders who beneficially own more than 10% of the issued and outstanding shares.

**C. Material Contracts**

Other than those disclosed under "*Item 1. Identity of Directors, Senior Management and Advisers - A. Directors and Senior Management - Service Agreemen*ts" and those entered into in the ordinary course of our business, the only contracts material to our business are as follows: (i) Arrangement Agreement dated December 31, 2020 entered into by GameSquare and Reciprocity Corp.; (ii) Purchase Agreement dated June 30, 2021 entered into by Blue & Silver Ventures, Ltd., Goff NextGen Holdings, LLC, Jason Lake and GameSquare; and (iii) Share Purchase Agreement dated July 14, 2021 entered into by GameSquare, Swingman LLC (dba CUT + SEW) and members of Swingman LLC (dba CUT + SEW).

**D. Exchange Controls**

We are not aware of any Canadian federal or provincial laws, decrees, or regulations that restrict the export or import of capital, including foreign exchange controls, or that affect the remittance of dividends, interest or other payments to non- Canadian holders of the Common Shares. There are no limitations under the laws of Canada or by the charter or our other constituent documents, except the *Investment Canada Act* which may require review and approval by the Minister of Industry (Canada) of certain acquisition of control of us by non-Canadians. The threshold for acquisitions of control is generally defined as being one-third or more of our voting shares. If the investment is potentially injurious to national security it may be subject to review under the Investment Canada Act notwithstanding the percentage interest acquired or amount of the investment. "Non-Canadian" generally means an individual who is not a Canadian citizen, or a corporation, partnership, trust or joint venture that is ultimately controlled by non-Canadians.

**E. Taxation**

**Certain Canadian Federal Income Tax Considerations**

The following is a general summary of the principal Canadian federal income tax considerations applicable to the acquisition, holding and disposition of our Common Shares by a holder of such shares as beneficial owner who, for purposes of the *Income Tax Act* (Canada) (including the regulations thereunder, the "**Tax Act**") and the *Canada-United States Tax Convention,* as amended by the protocols thereto (the "**Treaty**"), at all relevant times (a) is a resident of the United States and is not and is not deemed to be a resident of Canada, (b) deals at arm's length and is not affiliated with our Company, and (c) holds the Common Shares as capital property and does not use or hold, and is not deemed to use or hold, his, her or its Common Shares in connection with carrying on a business in Canada (a "**non-resident holder**"). Generally, the Common Shares will be considered to be capital property to a holder provided that the holder does not use or hold the Common Shares in the course of carrying on a business of buying and selling securities and such holder has not acquired them in one or more transactions considered to be an adventure or concern in the nature of trade. This part of the summary is not applicable to a non-resident holder that is an insurer that carries on an insurance business in Canada and elsewhere or is an "authorized foreign bank" (within the meaning of the Tax Act).

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This summary is based upon the current provisions of the Tax Act and the Treaty, and an understanding of the current administrative policies and assessing practices of the Canada Revenue Agency publicly announced prior to the date hereof. This summary also takes into account the proposed amendments to the Tax Act publicly announced by the Minister of Finance (Canada) prior to the date hereof (the "**Tax Proposals**") and assumes that all such Tax Proposals will be enacted in their present form. However, no assurances can be given that the Tax Proposals will be enacted in the form proposed, or at all. This summary is not exhaustive of all possible Canadian federal income tax consequences applicable to a holder of our Common Shares and, except for the foregoing, this summary does not take into account or anticipate any changes in law, whether by legislative, administrative or judicial decision or action, nor does it take into account provincial, territorial or foreign income tax legislation or considerations, which may differ from the Canadian federal income tax consequences described herein.

This summary is of a general nature only and is not intended to be, and should not be construed to be, legal, business or tax advice to any particular holder or prospective holder of our Common Shares, and no opinion or representation with respect to the tax consequences to any holder or prospective holder of our Common Shares is given or made. Accordingly, holders and prospective holders of our Common Shares should consult their own tax advisors with respect to the income tax consequences of purchasing, owning and disposing of our Common Shares in their particular circumstances.

***Dividends***

Dividends paid on our Common Shares to a non-resident holder will be subject under the Tax Act to withholding tax at a rate of 25% subject to a reduction under the provisions of an applicable tax treaty. In particular, the Treaty provides that the foregoing 25% withholding tax rate is reduced to 15% on dividends paid on shares of a corporation resident in Canada (such as our Company) to a resident of the United States who is the beneficial owner of the dividend and who is entitled to the benefits of the Treaty, and also provides for a further reduction of this rate to 5% where the beneficial owner of the dividends is a corporation resident in the United States entitled to the benefits of the Treaty that owns at least 10% of the voting shares of the corporation paying the dividend. Non-resident holders are urged to consult their own tax advisors to determine their entitlement to relief under an applicable income tax treaty or convention.

***Capital Gains***

A non-resident holder is not subject to tax under the Tax Act in respect of a capital gain realized upon the disposition or deemed disposition of a common share of our Company (other than in a disposition to our Company that is not a sale in the open market in the manner in which shares would normally be purchased by any member of the public in an open market) unless such share represents "taxable Canadian property", as defined in the Tax Act, to the holder thereof. Our Common Shares generally will not be considered taxable Canadian property to a non-resident holder at any time if they are listed on a designated stock exchange (which includes the CSE) at that time, unless, at any time during the 60-month period ending at that time: (i) 25% or more of the issued shares of any class or series of the Company's capital stock were owned by any combination of (a) the non-resident holder, (b) persons with whom the non-resident holder did not deal at arm's length, and (c) partnerships in which the non-resident holder or a person described in (b) holds a membership interest directly or indirectly through one or more partnerships; and (ii) more than 50% of the value of the Common Shares was derived, directly or indirectly, from one or any combination of (a) real or immoveable property situated in Canada, (b) Canadian resource properties, (c) timber resource properties, and (d) options in respect of any such property, all for purposes of the Tax Act. A non-resident holder's Common Shares can also be deemed to be taxable Canadian property in certain circumstances set out in the Tax Act.

If the Common Shares are considered taxable Canadian property to the non-resident holder, then upon a disposition or a deemed disposition of such Common Shares (other than a disposition to the Company that is not a sale in the open market in the manner in which shares would normally be purchased by any member of the public in an open market), the non-resident holder will realize a capital gain (or a capital loss) equal to the amount by which the proceeds of disposition of the Common Shares, net of any reasonable costs of disposition, exceed (or are less than) the adjusted cost base of the Common Shares to the non-resident holder. One half of any such capital gain (a "**taxable capital gain**") realized by a non-resident holder in a taxation year will be required to be included in computing the non-resident holder's income for that year, and one half of any such capital loss (an "**allowable capital loss**") realized by a non-resident holder in a taxation year must generally be deducted against taxable capital gains realized by the non-resident holder in that year from dispositions of taxable Canadian property. Allowable capital losses from dispositions of taxable Canadian property not deductible in the taxation year in which they are realized may ordinarily be carried back and deducted in any of the three preceding taxation years or carried forward and deducted in any subsequent taxation year against taxable capital gains realized in such years from dispositions of taxable Canadian property, subject to the detailed rules contained in the Tax Act in this regard. An applicable income tax treaty or convention may apply to exempt a non-resident holder from tax under the Tax Act in respect of a disposition of Common Shares notwithstanding that such shares may constitute taxable Canadian property. In particular, in the case of a non- resident holder who is the beneficial owner of shares of our Company that are taxable Canadian property and who is resident in the United States and entitled to the benefits of the Treaty, no Canadian taxes will generally be payable on a capital gain realized on such shares by reason of the Treaty unless the value of such shares is derived principally from real property situated in Canada.

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Non-resident holders whose Common Shares may be taxable Canadian property should consult their own tax advisors.

**Certain U.S. Federal Income Tax Considerations**

The following is a summary of the U.S. federal income tax considerations generally applicable to a U.S. Holder (as defined below) of the acquisition, ownership, and disposition of Common Shares. This summary does not purport to address all U.S. federal income tax matters that may be relevant to a particular U.S. Holder of Common Shares, nor is it a complete analysis of all potential U.S. federal income tax consequences. This summary does not address any tax consequences arising under any state, local or non-U.S. tax laws or U.S. federal estate or gift tax laws. This summary is based on the provisions of the Internal Revenue Code of 1986, as amended (the "**Code**"), the Treasury regulations thereunder, and administrative and judicial interpretations thereof, all as in effect on the date hereof and all of which are subject to change, possibly with retroactive effect. This summary applies only to a U.S. Holder that acquires Common Shares and holds Common Shares as capital assets for U.S. federal income tax purposes (generally, property held for investment). This summary does not address all U.S. federal income tax considerations that may be relevant to shareholders that are subject to special tax rules, including, without limitation, expatriates and certain former citizens of the United States, partnerships and other pass-through entities, financial institutions, insurance companies, brokers, dealers or traders in securities, commodities or currencies, tax-exempt organizations, tax qualified retirement plans and individual retirement accounts, regulated investment companies, real estate investment trusts, persons subject to the alternative minimum tax, persons whose functional currency for U.S. federal income tax purposes is not the U.S. dollar, persons holding Common Shares as part of a hedge, straddle or other risk reduction strategy or as part of a hedging or conversion transaction or other integrated investment, persons that own or have owned (directly, indirectly, or by attribution) 10% or more of the total combined voting power or value of the outstanding shares (including Common Shares) of GameSquare, and persons who acquired Common Shares through stock option or shares purchase plan programs or in other compensatory arrangements.

If a partnership (or other entity taxed as a partnership for U.S. federal income tax purposes) holds Common Shares, the tax treatment of a partner in the partnership generally will depend upon the status of the partner and the activities of the partnership. Partnerships and partners in such a partnership are urged to consult their tax advisers regarding the tax consequences of acquiring, owning, and disposing of Common Shares.

For purposes of this discussion, a "**U.S. Holder**" is a beneficial owner of Common Shares that is: (i) a citizen or an individual who is a resident of the United States as determined for U.S. federal income tax purposes; (ii) a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized under the laws of the United States, any State or political subdivision thereof or the District of Columbia; (iii) an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or (iv) a trust (1) if a court within the United States is able to exercise primary supervision over its administration and one or more U.S. persons has the authority to control all of the substantial decisions of the trust; or (2) that has a valid election in effect under applicable Treasury regulations to be treated as a U.S. person.

This summary is of a general nature only and is not intended to be tax advice to any prospective investor, and no representation with respect to the tax consequences to any particular investor is made. Prospective investors are urged to consult their tax advisers with respect to the U.S. federal, state, local and non-U.S. income and other tax considerations relevant to them, having regard to their particular circumstances.

***Distributions***

Subject to the discussion under "- *Passive Foreign Investment Company Considerations*" below, the gross amount of a distribution paid to a U.S. Holder with respect to Common Shares (including amounts withheld to pay Canadian withholding taxes) will be included in such holder's gross income as dividend income to the extent that the distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). To the extent that the amount of a distribution exceeds our current and accumulated earnings and profits, it will be treated first as a tax-free return of a U.S. Holder's tax basis in Common Shares, and to the extent the amount of the distribution exceeds such U.S. Holder's tax basis, the excess will be taxed as capital gain. Because we do not expect to calculate our earnings and profits in accordance with U.S. federal income tax principles, U.S. Holders should expect that a distribution generally will be treated as a dividend for U.S. federal income tax purposes.

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Dividends received by individuals and other non-corporate U.S. Holders of Common Shares generally will be subject to tax at preferential rates applicable to long-term capital gains, provided that such holders meet certain holding period and other requirements and that GameSquare is not treated as a PFIC (as defined below) for the taxable year in which the dividend is paid or for the preceding taxable year. Dividends on Common Shares generally will not be eligible for the dividends-received deduction allowed to corporations. U.S. Holders are urged to consult their tax advisers regarding the application of the relevant rules to their particular circumstances.

Dividends paid on Common Shares generally will constitute foreign-source income classified as "passive category" income for foreign tax credit limitation purposes. A U.S. Holder may be entitled to deduct or credit any Canadian withholding taxes on dividends in determining its U.S. income tax liability, subject to certain limitations (including that the election to deduct or credit foreign taxes applies to all of such U.S. Holder's foreign taxes for a particular taxable year). The rules governing the foreign tax credit are complex. U.S. Holders are urged to consult their tax advisers regarding the availability of the foreign tax credit under their particular circumstances.

***Receipt of Foreign Currency***

The U.S. dollar value of any distribution on Common Shares made in Canadian dollars generally will be calculated by reference to the exchange rate between U.S. dollars and Canadian dollars in effect on the date of actual or constructive receipt of such distribution by the U.S. Holder, regardless of whether the Canadian dollars so received are in fact converted into U.S. dollars. If the Canadian dollars so received are converted into U.S. dollars on the date of receipt, then a U.S. Holder generally will not recognize foreign currency gain or loss on such conversion. If the Canadian dollars so received are not converted into U.S. dollars on the date of receipt, then a U.S. Holder generally will have a tax basis in the Canadian dollars equal to the U.S. dollar value of such Canadian dollars on the date of receipt. Any gain or loss on a subsequent conversion or other disposition of the Canadian dollars generally will be treated as ordinary income or loss to a U.S. Holder and generally will be U.S.-source income or loss for U.S. foreign tax credit purposes. U.S. Holders are urged to consult their tax advisers regarding the U.S. federal income tax consequences of receiving distributions on Common Shares in Canadian dollars.

***Sale or Other Disposition of Common Shares***

Subject to the discussion under "*-Passive Foreign Investment Company Considerations*" below, a U.S. Holder will recognize taxable gain or loss upon the sale, exchange, or other taxable disposition of Common Shares equal to the difference, if any, between the amount realized for Common Shares and the U.S. Holder's tax basis in such Common Shares. The gain or loss will be capital gain or loss. Non-corporate U.S. Holders, including individual U.S. Holders that have held Common Shares for more than one year, currently are eligible for reduced tax rates. The deductibility of capital losses is subject to limitations. Any such gain or loss recognized by a U.S. Holder generally will be treated as U.S.-source gain or loss for foreign tax credit limitation purposes.

***Passive Foreign Investment Company Considerations***

Certain adverse tax consequences could apply to a U.S. Holder if we are treated as a "passive foreign investment company" (a "**PFIC**") for any taxable year during which the U.S. Holder holds Common Shares. In general, a non-U.S. corporation is a PFIC for any taxable year in which (i) 75% or more of its gross income consists of passive income (the "income test") or (ii) 50% or more of the average quarterly value of its assets consists of assets that produce, or are held for the production of, passive income (the "asset test"). Generally, "passive income" includes interest, dividends, rents, royalties and certain gains, and cash is a passive asset for PFIC purposes. For purposes of the asset test and income test, a non-U.S. corporation that directly or indirectly owns at least 25% by value of the shares of another corporation is treated as if it held its proportionate share of the assets of the other corporation and received directly its proportionate share of the income of the other corporation.

We have made no determination as to whether we are classified as a PFIC for U.S. federal income tax purposes. The determination of whether we are a PFIC depends on the particular facts and circumstances (such as the valuation of our assets, including goodwill and other intangible assets) and is also affected by the application of the PFIC rules, which are subject to differing interpretations. The fair market value of our assets is expected to depend, in part, upon (i) the market price of Common Shares, which is likely to fluctuate, and (ii) the composition of our income and assets, which will be affected by how, and how quickly, we spend any cash that is raised in any financing transaction. Moreover, our PFIC status is determined on an annual basis after the end of each taxable year. In light of the foregoing, no assurance can be provided that we are not currently a PFIC or that we will not become a PFIC in any future taxable year.

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In general, if we were a PFIC for any taxable year during which a U.S. Holder held Common Shares, gain recognized upon a disposition of Common Shares by the U.S. Holder would be allocated ratably over the U.S. Holder's holding period for such Common Shares. The amounts allocated to the taxable year of disposition and to taxable years prior to the first taxable year in which we were a PFIC would be taxed as ordinary income. The amount allocated to each other taxable year would be subject to tax at the highest tax rate in effect for that taxable year for individuals or corporations, as appropriate, and an interest charge would be imposed on the resulting tax liability for each such year. Further, to the extent that any distribution received by a U.S. Holder on Common Shares exceeded 125% of the average of the annual distributions received on such Common Shares during the preceding three years or the U.S. Holder's holding period, whichever is shorter, that distribution would be subject to taxation in the same manner.

Alternatively, if we were a PFIC and if Common Shares were "regularly traded" on a "qualified exchange," a U.S. Holder might be able to make a mark-to-market election with respect to Common Shares that would result in tax treatment different from the general tax treatment for PFICs described above. The Common Shares would be treated as "regularly traded" in any calendar year in which more than a de minimis quantity of Common Shares were traded on a qualified exchange on at least 15 days during each calendar quarter. Nasdaq, where Common Shares are expected to be listed, is a qualified exchange for this purpose. If a U.S. Holder makes the mark-to-market election, in each year that we are a PFIC the U.S. Holder generally will recognize as ordinary income any excess of the fair market value of Common Shares at the end of the taxable year over their adjusted tax basis, and will recognize an ordinary loss in respect of any excess of the adjusted tax basis of Common Shares over their fair market value at the end of the taxable year (but only to the extent of the net amount of income previously included as a result of the mark-to-market election). If a U.S. Holder makes the election, the U.S. Holder's tax basis in Common Shares will be adjusted to reflect these income or loss amounts. In addition, if a U.S. Holder makes the mark-to-market election, any gain that the U.S. Holder recognizes on the sale or other disposition of Common Shares in a year in which we are a PFIC will be treated as ordinary income and any loss will be treated as an ordinary loss (but only to the extent of the net amount of income previously included as a result of the mark- to-market election). U.S. Holders should consult their tax advisers regarding the availability and advisability of making a mark-to-market election in their particular circumstances.

We do not intend to provide information necessary for U.S. Holders to make qualified electing fund elections, which, if available, would result in a further alternative tax treatment.

If we were a PFIC for any year during which a U.S. Holder owned Common Shares, we generally would continue to be treated as a PFIC with respect to such U.S. Holder's Common Shares unless (i) we ceased to be a PFIC and (ii) the U.S. Holder had made a "deemed sale" election under the PFIC rules to recognize gain (but not loss) under the PFIC rules described above, without the receipt of corresponding cash.

If we were a PFIC or, with respect to a particular U.S. Holder, we were treated as a PFIC for the taxable year in which we pay a dividend or for the prior taxable year, the preferential rates discussed above with respect to dividends paid to certain non-corporate U.S. Holders would not apply. In addition, if we were a PFIC for any taxable year during which a U.S. Holder owns Common Shares, the U.S. Holder would be required to file annual reports with the Internal Revenue Service, subject to certain exceptions.

The application of the PFIC rules to U.S. Holders is uncertain in certain respects, and the PFIC rules remain subject to recently proposed Treasury Regulations yet to be made final. Each U.S. Holder should consult its own tax adviser regarding the application of the PFIC rules, including the foregoing filing requirements and the recently proposed Treasury Regulations, as well as the advisability of making any available election under the PFIC rules, with regard to such holder's ownership and disposition of Common Shares.

***Additional Tax on Net Investment Income***

Certain U.S. Holders that are individuals, estates or trusts are subject to a 3.8% tax on all or a portion of their "net investment income," which may include all or a portion of their dividend income and net gains from the disposition of Common Shares. Each U.S. Holder that is an individual, estate or trust is urged to consult its tax advisers regarding the applicability of this tax to its income and gains in respect of Common Shares.

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***Foreign Financial Asset Reporting***

Citizens or individual residents of the United States holding "specified foreign financial assets" (which generally include shares and other securities issued by a foreign person unless held in an account maintained by a financial institution) that exceed certain U.S. dollar thresholds are required to report information relating to such assets, which could include Common Shares, by filing a completed Internal Revenue Service Form 8938 (Statement of Specified Foreign Financial Assets) with their tax returns. Significant penalties may apply for the failure to satisfy this reporting obligation. U.S. Holders are urged to consult their tax advisers regarding the foregoing reporting obligation with regard to their ownership of Common Shares.

***Information Reporting and Backup Withholding***

Distributions with respect to Common Shares and proceeds from the sale, exchange, or other taxable disposition of Common Shares may be subject to information reporting to the Internal Revenue Service and U.S. backup withholding. Backup withholding will not apply, however, to a U.S. Holder who furnishes a correct taxpayer identification number and makes other required certifications, or who is otherwise exempt from backup withholding and properly establishes such exempt status. Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against a U.S. Holder's U.S. federal income tax liability, and a U.S. Holder generally may obtain a refund of any excess amounts withheld under the backup withholding rules by timely filing the appropriate claim for refund with the Internal Revenue Service and furnishing any required information.

**F. Dividends and Paying Agents**

Not applicable.

**G. Statement by Experts**

Not applicable.

**H. Documents on Display**

The Company is subject to the informational requirements of the Exchange Act. You may read and copy any of our reports and other information at, and obtain copies upon payment of prescribed fees from, the Public Reference Room maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. In addition, the SEC maintains a website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC at http://www.sec.gov. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

The documents concerning us referred to in this Form 20-F may be viewed at our executive offices during normal business hours.

We are required to file reports and other information with the securities commissions in Canada. You are invited to read and copy any reports, statements or other information, other than confidential filings, that we file with the provincial securities commissions. These filings are also electronically available from SEDAR at www.sedar.com, the Canadian equivalent of the SEC's electronic document gathering and retrieval system.

**I. Subsidiary Information**

Not applicable.

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**ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

For a description of market risks relevant our business, please see "*Item 4B. Business Overview - Risk Management and Internal Control*."

**ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES**

**A. Debt Securities**

Not applicable.

**B. Warrants And Rights**

As of December 31, 2021, we had 46,186,841 warrants outstanding, 11,975,900 of which entitle the registered holder to purchase one Common Share at a price of C$0.40 per share at any time until October 2, 2022, 600,000 of which entitle the registered holder to purchase one Common Share at a price of C$0.40 per share at any time until November 17, 2022, 1,357,441 of which entitle the registered holder to purchase one Common Share at a price of C$0.60 until February 19, 2024, 9,519,000 of which entitle the registered holder to purchase one Common Share at a price of C$0.60 until March 4, 2024, 21,250,000 of which entitle the registered holder to purchase one Common Share at a price of C$0.60 until July 22, 2023 and 1,487,500 of which entitle the registered holder to purchase one Common Share at a price of C$0.40 per share at any time until July 22, 2024.

**C. Other Securities**

Not applicable.

**D. American Depository Shares**

Not applicable.

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**PART II**

**ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES**

Not applicable.

**ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS**

Not applicable.

**ITEM 15. CONTROLS AND PROCEDURES**

**A. Disclosure Controls and Procedures**

It is the conclusion of our Chief Executive Officer and Chief Financial Officer that our Company's disclosure controls and procedures (as defined in Exchange Act rules 13a-15(e) and 15d-15(e)), based on their evaluation of these controls and procedures as of the end of the period covered by this annual report, are effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

**B. Management's annual report on internal control over financial reporting**

This annual report does not include a report of management's assessment regarding internal control over financial reporting due to a transition period established by rules of the SEC for newly public companies.

**C. Attestation report of the registered public accounting firm**

This annual report does not include an attestation report of the company's registered public accounting firm due to a transition period established by rules of the SEC for newly public companies.

**D. Changes in Internal Control over Financial Reporting**

There were no changes in our internal controls over financial reporting that occurred during the period that is covered by this annual report that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

**ITEM 16. [RESERVED]**

Not applicable.

**ITEM 16A.** 

Audit Committee Expert.

The Company's Board of Directors has at least one financial expert serving on its audit committee. The audit committee is comprised of three independent members.

**ITEM 16B CODE OF ETHICS**

The Company's corporate policies include a Code of Business Conduct and Ethics.

---

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**ITEM 16 C PRINCIPAL ACCOUNTANT FEES AND SERVICES**

Kreston GTA LLP is the Company's auditor and has served in such capacity continuously since March 26, 2021. From May 8, 2013 until the appointment of Kreston GTA LLP, McGovern Hurley LLP, Chartered Accountants, was the external auditor of the Company. For the fiscal years ended December 31, 2021 and November 30, 2020, the Company was billed the following fees by the external auditors:

---

| | | |
|:---|:---|:---|
|  | **Fiscal year ended December 31, 2021**  | **Fiscal year ended November 30, 2020** |
| Audit fees | $150000 | $73000 |
| Audit-related fees<sup>(1)</sup> | $65000 | $27000 |
| Tax fees<sup>(2)</sup> | $Nil | $5000 |
| All other fees | $Nil | $Nil |
| **Total** | $215000 | $105000 |

---

(1) Audit-related fees in each of 2021 and 2020 were for quarterly reviews of unaudited financials.

(2) Tax fees in each of 2021 and 2020 were for paid for tax compliance services including preparation of tax returns and tax-related advice.

**ITEM 16D EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES**

Not applicable.

**ITEM 16E PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS**

None.

**ITEM 16F CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT**

Effective March 26, 2021, GameSquare changed its auditor from McGovern Hurley LLP ("**McGovern**") to Kreston GTA LLP ("**Kreston**") to take advantage of Kreston's registration with the Public Company Accounting Oversight Board, a registration which McGovern did not hold. There were no disagreements between the Company and McGovern Hurley LLP.

**ITEM 16G CORPORATE GOVERNANCE**

Not applicable.

**ITEM 16H MINE SAFETY DISCLOSURE**

Not applicable.

---

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**PART III**

**ITEM 17. FINANCIAL STATEMENTS**

We have elected to provide audited consolidated financial statements and the related information pursuant to Item 18.

**ITEM 18. FINANCIAL STATEMENTS**

See pages F-1 to F-52, of the Financial Statement which is filed with and incorporated by reference as part of this Annual Report as Exhibit F-1. All schedules are omitted as the required information is inapplicable or the information is presented in the Group's audited consolidated financial statements or notes thereto.

**ITEM 19. EXHIBITS**

---

| | |
|:---|:---|
| **Number** | **Description** |
| 1.1\* | Articles of Incorporation of GameSquare Esports Inc.\* |
| 1.2\* | Bylaws of GameSquare Esports Inc.\* |
| 4.1\* | Promissory note issued March 19, 2020 by Gamesquare Inc. to GameSquare;\* |
| 4.2\* | Loan agreement dated February 26, 2021 between GameSquare and Reciprocity.\* |
| 4.3\* | Capital Markets Advisory Agreement dated April 21, 2021 between GameSquare and Sophic Capital<br> Inc.\* |
| 11. 1 | Code of Business Conduct and Ethics |
| 12.1 | Certification of Chief Executive Officer of GameSquare Esports Inc. pursuant to Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934 |
| 12.2 | Certification of Chief Financial Officer of GameSquare Esports Inc. pursuant to Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934 |
| 13.1 | Certification of Chief Executive Officer of GameSquare Esports Inc. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
| 13.2 | Certification of Chief Financial Officer of GameSquare Esports Inc. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
| 15.1 | Audit Committee Charter |
| F-1 | Financial Statements |
| 101.INS | XBRL Instance Document |
| 101.SCH | XBRL Taxonomy Extension - Schema |
| 101.CAL | Inline XBRL Taxonomy Extension - Calculations |
| 101.DEF | Inline XBRL Taxonomy Extension - Definitions |
| 101.LAB | Inline XBRL Taxonomy Extension - Labels |
| 101.PRE | Inline XBRL Taxonomy Extension - Presentation |

---

\*Previously filed

---

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**SIGNATURES**

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this registration statement on its behalf.

---

| | | |
|:---|:---|:---|
|  | **GAMESQUARE ESPORTS INC.** | **GAMESQUARE ESPORTS INC.** |
| Date: April 29, 2022 | By: | /s/ Paul Bozoki |
|  |  | Paul Bozoki |
|  |  | Chief Financial Officer |

---

[*Signature Page to Form 20-F*]

---

| |
|:---|
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---

![](gcn_20fimg38.jpg)

**GAMESQUARE ESPORTS INC.**

**CONSOLIDATED FINANCIAL STATEMENTS**

**For the thirteen months ended December 31, 2021** 

**And the year ended November 30, 2020**

![](gcn_20fimg39.jpg)

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To the Board of Directors and Shareholders of GameSquare Esports Inc.

**Opinion on the Consolidated Financial Statements**

We have audited the accompanying consolidated statement of financial position of GameSquare Esports Inc. (the "Company") as of December 31, 2021 and November 30, 2020, and the related consolidated statements of loss and comprehensive loss, consolidated statements of changes in shareholders' equity, and consolidated statements of cash flows for the periods then ended, and the related notes (collectively referred to as the "consolidated financial statements").

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2021 and November 30, 2020, and its consolidated financial performance and its consolidated cash flows for the periods then ended, in conformity with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board.

**Material Uncertainty Related to Going Concern**

We draw attention to Note 1 in the consolidated financial statements, which describe the events and conditions that indicate the existence of material uncertainties that may cast significant doubt about the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

**Basis for Opinion**

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provide a reasonable basis for our opinion.

**Critical Audit Matters**

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the

Kreston GTA LLP \| 8953 Woodbine Avenue, Markham, Ontario, Canada, L3R 0J9, T. 905.474.5593 \| www.krestongta.com

A member of Kreston International \| A global network of independent accounting firms

![](gcn_20fimg40.jpg)

**Accounting for business combinations and valuation of acquired intangibles**

*Critical Audit Matter Description*

During the financial year ended 31 December 2021, the Company completed three acquisitions that have resulted in the Company acquiring controlling interest in Reciprocity, Complexity, and Cut+Sew. The acquisitions were completed on March 16, June 30, and July 27, 2021, for total consideration of approximately $7,760,686, $10,035,546 and $3,307,105 respectively. The Company accounted for these acquisitions in accordance with IFRS 3 *Business Combinations* ("IFRS 3"). The company disclosed the significant judgements, estimates, and assumptions and the results of their analyses on business combinations in Note 3 and Note 4 to the consolidated financial statements.

We considered the accounting of these acquisitions to be a critical audit matter as these are significant transactions during the period and involved significant management judgments regarding the valuation of the purchase price and the allocation of purchase price to the assets and liabilities acquired. This exercise also required management to determine the fair value of the assets and liabilities acquired and to identify and value intangible assets acquired in the acquisition which involved significant assumptions and estimates. The fair value of intangible assets acquired included intangible assets of $8,285,021 on the date of acquisition. Changes in these assumptions may have a material impact on the fair values.

*How the Critical Audit Matter Was Addressed in the Audit*

Our audit procedures focused on valuation and allocation of purchase price, and the identification and valuation of intangibles asset acquired in the acquisition. The procedures included, amongst others, the following:

- We reviewed the purchase agreements in relation to these acquisitions to obtain an understanding of the transactions and key terms to identify necessary accounting considerations and identification of assets acquired and liabilities assumed at the acquisition date.

- We validated the considerations paid and their valuations, and reviewed the identification of the acquired assets and liabilities by corroborating this identification based on our discussion with management and understanding of the business of the acquired entities.

- We assessed the competence, objectivity, independence, and relevant work experience of the external specialists engaged by management to calculate fair value of intangible assets acquired and perform the purchase price allocation.

- We have assessed the key valuation inputs and significant assumptions used by management in determining the fair value of the intangible assets acquired by:

· Evaluating the reasonableness of management's revenue growth an earnings forecasts by comparing the forecasts to historical results and business plans.

· Evaluating the revenue growth rates, earning margins, royalty rates, and discount rates by testing the source information underlying the determination of revenue growth rates, earnings margins, royalty rates, and discount rates and the mathematical accuracy of the calculations.

- We have assessed the adequacy of the Company's disclosure included in Note 3 - Critical Accounting estimates and Judgments and Note 4 - Acquisitions, of the accompanying consolidated financial statements regarding these acquisitions.

The accounting and measurement methods applied are in accordance with IFRS 3. We consider the underlying assumptions and measurement parameters to be reasonable.

**Impairment assessment of goodwill and intangible assets**

*Critical Audit Matter Description*

As at 31 December 2021, included in the consolidated statement of financial position are goodwill of $nil and intangible assets totaling $9,339,175, disclosed in Note 7 to the consolidated financial statements.

The Company is required to, at least annually, perform impairment assessment of goodwill. For intangible assets with useful lives, the Company is required to review these for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable, and at least annually, review whether there is any change in their expected useful lives. To perform impairment assessments, all intangible assets including goodwill are allocated to the cash generating units ("CGUs"). An impairment loss is recognized if the carrying amount of a CGU exceeds its recoverable amount. The recoverable amount of each CGU is based on the greater of fair value less costs to dispose and value in use. To determine recoverable amount, significant assumptions are used in projecting earning margins, earning multiples, growth rates and discount rates in estimating and discounting future cashflows. As a result of the assessment, management recognized goodwill impairment of $2,258,109 and intangible assets impairment of $nil. These impairment assessments were a critical audit matter because there is considerable estimation uncertainty related to the projections of future cash flows.

Kreston GTA LLP \| 8953 Woodbine Avenue, Markham, Ontario, Canada, L3R 0J9, T. 905.474.5593 \| www.krestongta.com

A member of Kreston International \| A global network of independent accounting firms

![](gcn_20fimg41.jpg)

*How the Critical Audit Matter Was Addressed in the Audit*

Our audit procedures included, amongst others, the following:

- We obtained management's five-year cash flow projection for CodeRed, future cashflows forecasts and tested the mathematical accuracy of the underlying value-on-use calculations. We also compared historical actual results to these budgeted to assess in the quality of management's forecasts.

- We assessed the reasonableness of key assumptions used in the calculations comprising earnings margins, earnings multiples, growth rates, and discount rates.

- We tested the appropriateness of the methods used and the mathematical accuracy of calculation.

We consider the underlying assumptions and measurement parameters to be reasonable.

We have served as the Company's auditor since 2019.

**Kreston GTA LLP**

**Chartered Professional Accountants**

**Licensed Public Accountants**

Markham, Canada

April 28, 2022

Kreston GTA LLP \| 8953 Woodbine Avenue, Markham, Ontario, Canada, L3R 0J9, T. 905.474.5593 \| www.krestongta.com

A member of Kreston International \| A global network of independent accounting firms

**GAMESQUARE ESPORTS INC.** 

**CONSOLIDATED STATEMENTS OF FINANCIAL POSITION**

---

| | | |
|:---|:---|:---|
| *($ Canadian)* | **December 31, 2021** | **November 30, 2020** |
| **ASSETS** |  |  |
| **Current** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Cash  | $**7642593** | $660686 |
| &nbsp;&nbsp;&nbsp;&nbsp; Amounts receivable (Note 5) | **3911638** | 381749 |
| &nbsp;&nbsp;&nbsp;&nbsp; Prepaid expenses and deposits | **385639** | 109142 |
| &nbsp;&nbsp;&nbsp;&nbsp; Other investments (Note 9) | **-** | 62635 |
| &nbsp;&nbsp;&nbsp;&nbsp; Other current assets (Note 10) | **388478** | - |
| Total current assets | **12328348** | 1214212 |
| **Long-term** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Equipment (Note 6) | **4600404** | 1419 |
| &nbsp;&nbsp;&nbsp;&nbsp; Intangibles (Note 7) | **9339175** | 2361567 |
| &nbsp;&nbsp;&nbsp;&nbsp; Goodwill (Note 7) | **-** | 2258109 |
| &nbsp;&nbsp;&nbsp;&nbsp; Right-of-use asset (Note 14) | **3501614** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Reclamation deposits (Note 8) | **340443** | 338606 |
| &nbsp;&nbsp;&nbsp;&nbsp; Non-current assets held for sale | **99535** | - |
| Total assets | $**30209519** | $6173913 |
| **LIABILITIES** |  |  |
| **Current** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Accounts payable and accrued liabilities (Note 19) | $**2796756** | $845273 |
| &nbsp;&nbsp;&nbsp;&nbsp; Deferred revenue | **414628** | 104630 |
| &nbsp;&nbsp;&nbsp;&nbsp; Current portion of lease liability (Note 14) | **382057** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Loan payable (Note 13) | **152305** | - |
| Total current liabilities | **3745746** | 949903 |
| &nbsp;&nbsp;&nbsp;&nbsp; Deferred consideration on acquisition of Code Red (Note 4(a)) | **-** | 335000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Long term loan (Note 23) | **-** | 40000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Lease liability, net of current portion (Note 14) | **3421383** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Reclamation provision (Note 8) | **323933** | 323933 |
| &nbsp;&nbsp;&nbsp;&nbsp; Deferred tax liability (Note 12) | **347958** | 464000 |
| Total liabilities | **7839020** | 2112836 |
| **SHAREHOLDERS' EQUITY** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Common shares (Note 15(b)) | **45690856** | 6340328 |
| &nbsp;&nbsp;&nbsp;&nbsp; Share based payments reserve (Note 16) | **3923193** | 718951 |
| &nbsp;&nbsp;&nbsp;&nbsp; Contingently issuable shares (Notes 4(d)) | **66238** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Warrants (Note 17) | **2923808** | 827461 |
| &nbsp;&nbsp;&nbsp;&nbsp; Accumulated other comprehensive income | **221183** | 884 |
| &nbsp;&nbsp;&nbsp;&nbsp; Accumulated deficit | **(30341957)** | (3826547) |
| &nbsp;&nbsp;&nbsp;&nbsp; Equity attributable to owners of the parent | **22483321** | 4061077 |
| &nbsp;&nbsp;&nbsp;&nbsp; Non-controlling interest (Note 18) | **(112822)** |  |
| Total Shareholders' Equity | **22370499** | 4061077 |
| Total liabilities and shareholders' equity  | $**30209519** | $6173913 |

---

Nature of operations and going concern (Note 1)

Contingencies and commitments (Notes 1, 8 and 23)

Subsequent events (Note 26)

Approved by the Board of Directors on April 26, 2022

<u>"*KEVIN WRIGHT*"</u>, Director <u>"*Paul Lebreux*"</u>, Director

**GAMESQUARE ESPORTS INC.** 

**CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS**

---

| | | | |
|:---|:---|:---|:---|
| <br>***($ Canadian)***  |<br>**Thirteen months**<br>**ended**<br>**December 31, 2021** |<br>**Year ended**<br>**November 30, 2020** | **Period from** <br>**December 13, 2018**<br>**(incorporation) to**<br>**November 30, 2019** |
| **Revenue** | $**13687889** | 488774 |  |
| Cost of sales | **9250631** | 331228 |  |
| Gross profit (Note 24) | **4437258** | 157546 | - |
| **Other income** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Interest and other income | **9645** | 1947 |  |
| Total other income | **9645** | 1947 | - |
| **Expenses** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Salaries, consulting and management fees (Note 19) | **7617319** | 760648 | 229200 |
| &nbsp;&nbsp;&nbsp;&nbsp; Player compensation | **724777** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Professional fees | **1436522** | 8323 | 30628 |
| &nbsp;&nbsp;&nbsp;&nbsp; General office expenses | **1340366** | 202569 | 325 |
| &nbsp;&nbsp;&nbsp;&nbsp; Selling and marketing expenses | **1426503** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Travel expenses | **676221** | 4107 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Shareholder communications and filing fees | **209830** | 52229 | 300 |
| &nbsp;&nbsp;&nbsp;&nbsp; Interest expense | **181527** | 11497 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Bad debt expense | **56318** | 74581 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Foreign exchange loss | **2972** | 5110 | 18 |
| &nbsp;&nbsp;&nbsp;&nbsp; Change in provision for reclamation deposit (Note 8) | **(97323)** | 6308 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Share-based compensation (Note 16) | **3644287** | 709953 | 2639 |
| &nbsp;&nbsp;&nbsp;&nbsp; Transaction costs (Note 4(b) and (d)) | **9744815** | 1817540 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Amortization (Notes 6, 7 and 14) | **1879825** | 81433 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Impairment on goodwill (Note 7) | **2258109** |  |  |
| Total expenses | **31102068** | 3734298 | 263110 |
| Loss for the period before income taxes | **(26655165)** | (3574805) | (263110) |
| Income tax (recovery) (Note 12) | **(98854)** | (1697) | - |
| Loss for the period | **(26556311)** | (3573108) | (263110) |
| **Other comprehensive loss** |  |  |  |
| *Items that will subsequently be reclassified to operations:* |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Foreign currency translation | **220299** | 884 |  |
| **Total comprehensive loss for the period** | $**(26336012)** | $(3572224) | $(263110) |
| **(Loss) for the period attributable to:** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Owners of the parent | **(26515410)** | (3573108) | (263110) |
| &nbsp;&nbsp;&nbsp;&nbsp; Non-controlling interest | **(40901)** | - |  |
|  | $**(26556311)** | $(3573108) | $(263110) |
| Basic and diluted net loss per share | $**(0.17)** | $(0.14) | $(0.04) |
| Weighted average number of common shares outstanding - basic and diluted (Note 20) | **156258509** | 24995371 | 6948630 |

---

**GAMESQUARE ESPORTS INC.** 

**CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **($ Canadian)**  | **Common Shares** | **Contributed Surplus**  | **Warrants**  | **Contingently Issuable Shares and Options**  | **Accumulated other comprehensive income**  | **Non-Controlling Interest**  | **Accumulated Deficit**  | **Shareholders' Equity**  |
|  | **#** | **$** | **$** | **$** | **$** | **$** | **$** | **$** |
| Balance, December 1, 2018 |  |  |  |  |  |  |  |  |
| Private placement | 20000000 |  |  |  |  |  |  |  |
| Options granted |  |  |  |  |  |  |  |  |
| Net loss for the year | - |  |  | - | - |  |  |  |
| **Balance, November 30, 2019**  | **20000000** |  |  | **-** | **-** |  |  |  |
| GameSquare common shares and effect of deemed acquisiton by Gamesquare Inc. at fair value of capital consideration (Note 25) | 9996011 |  |  |  |  |  |  |  |
| Issued on acquisition of Code Red (Note 4(a)) | 9300000 |  |  |  |  |  |  |  |
| Private placement (Note 15(b)) | 12632900 |  |  |  |  |  |  |  |
| Share issuance costs (Note 15(b)) |  |  |  |  |  |  |  |  |
| Broker warrants (Note 17) |  |  |  |  |  |  |  |  |
| Options granted (Note 16(c)) |  |  |  |  |  |  |  |  |
| Option expiry (Note 16(a)) |  |  |  |  |  |  |  |  |
| Other comprehensive income |  |  |  |  | 884 |  |  |  |
| Net loss for the year | - |  |  | - | - |  |  |  |
| **Balance, November 30, 2020**  | **51928911** |  |  | **-** | **884** |  |  |  |
| Issued on acquisition of Reciprocity (Note 4(b)) | 43749996 |  |  |  |  |  |  |  |
| Contingent consideration on acquisition of Cut&Sew (Note 4(d)) |  |  |  | 66238 |  |  |  |  |
| Non-controlling interest acquired on acquisiton of Reciprocity (Note 4(b)) |  |  |  |  |  |  |  |  |
| Issued on acquisition of Complexity (Note 4(c)) | 83328750 |  |  |  |  |  |  |  |
| Issued on acquisition of Cut&Sew (Note 4(d)) | 2000000 |  |  |  |  |  |  |  |
| Private placement (Note 15(b)) | 61581477 |  |  |  |  |  |  |  |
| Share issuance costs (Note 15(b)) |  |  |  |  |  |  |  |  |
| Broker warrants (Note 17) |  |  |  |  |  |  |  |  |
| Warrants exercised (Note 17) | 480000 |  |  |  |  |  |  |  |
| Options granted (Note 16(a)) |  |  |  |  |  |  |  |  |
| Option exercise (Note 16(a)) | 312766 |  |  |  |  |  |  |  |
| Restricted share units (Note 16(b)) |  |  |  |  |  |  |  |  |
| RSUs exercised (Note 16(b)) | 1000000 |  |  |  |  |  |  |  |
| Other comprehensive income |  |  |  |  | 220299 |  |  |  |
| Net loss for the period | - |  |  | - | - |  |  |  |
| **Balance, December 31, 2021**  | **244381900** |  |  | **66238** | **221183** |  |  |  |

---

**GAMESQUARE ESPORTS INC.** 

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

---

| | | | |
|:---|:---|:---|:---|
| *($ Canadian)* | **Thirteen months ended December 31, 2021** | **Year ended November 30, 2020** | **For the period from December 13, 2018 (incorporation) to November 30, 2019** |
| CASH (USED IN) PROVIDED BY: |  |  |  |
| OPERATING ACTIVITIES |  |  |  |
| Net (loss) | $**(26556311)** | $(3573108) | $(263110) |
| Adjustment for: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Income tax recovery | **(98854)** | (1697) |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Transaction costs (Note 4) | **8453794** | 1817540 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Share-based compensation (Note 16) | **3644287** | 709953 | 2639 |
| &nbsp;&nbsp;&nbsp;&nbsp; Interest expense (Notes 13 and 14) | **189814** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Change in provision for reclamation deposit (Note 8) | **-** | 6308 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Amortization (Notes 6, 7 and 14) | **1879825** | 81433 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Impairment on goodwill | **2258109** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Bad debt | **56318** |  |  |
|  | **(10173018)** | (959571) | (260471) |
| Net change in non-cash working capital | **(3755035)** | 413944 | 68879 |
| Net cash flow from operating activities | **(13928053)** | (545627) | (191592) |
| FINANCING ACTIVITIES |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Proceeds received from long term loan (Note 23) | **20000** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Repayment of loans (Notes 13 and 23) | **(602831)** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Principal reduction in lease liability (Note 14) | **(333140)** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Private placement (Note 15(b)) | **25014220** | 3000240 | 515000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Share issue costs (Note 15(b)) | **(1926280)** | (105000) | (1265) |
| &nbsp;&nbsp;&nbsp;&nbsp; Proceeds from option exercise (Note 16(a)) | **105000** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Proceeds from warrant exercise (Note 17) | **192000** |  |  |
| Net cash flow from financing activities | **22468969** | 2895240 | 513735 |
| INVESTING ACTIVITIES |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Cash acquired on acquisition of GameSquare (Note 19) | **-** | 226213 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Acquisiton of Code Red shares (Note 4(a)) | **-** | (2490000) |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Cash acquired on acquisiton of Code Red (Note 4) | **-** | 251839 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Cash acquired on acquisiton of Reciprocity (Note 4(b)) | **516236** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Cash acquired on acquisition of Complexity (Note 4(c)) | **538385** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Acquisiton of Cut & Sew shares (Note 4(d)) | **(3000000)** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Cash acquired on acquisition of Cut & Sew (Note 4(d)) | **396251** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Equipment purchase (Note 6) | **(111757)** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Non-current assets held for sale (Note 11) | **(16636)** |  |  |
| Net cash flow from investing activities | **(1677521)** | (2011948) |  |
| Effect of exchange rate changes on cash | **118512** | 878 | - |
| CHANGE IN CASH  | **6981907** | 338543 | 322143 |
| CASH, beginning of the period | **660686** | 322143 | - |
| CASH, end of the period | $**7642593** | $660686 | $322143 |

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| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**<br> For the thirteen months ended December 31, 2021 and the year ended November 30, 2020 |
| (Amounts in Canadian dollars) |

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**1. NATURE AND CONTINUANCE OF OPERATIONS**

GameSquare Esports Inc. (formerly Magnolia Colombia Ltd.) (the "Company" or "GameSquare") was incorporated under the Ontario Business Corporations Act on June 01, 2009. The Company is a publicly traded company with the registered office located at 150 York Street, Suite 1008, Toronto, Ontario, M5H 3S5, Canada. GameSquare changed its name from Magnolia Colombia Ltd. on September 30, 2020.

GameSquare is focused on the high growth esports market. The Company bridges the gap between global brands and the large gaming and esports communities. GameSquare does this by signing top-tier talent in the influencer, on-screen talent and player categories as well as adding new companies to its roster of global brand relationships. On October 2, 2020, the Company completed a reverse acquisition with GameSquare (Ontario) Inc., which acquired all the outstanding shares of Code Red Esports Ltd. ("Code Red") at the same day. On December 1, 2020, the Company completed the amalgamation with GameSquare (Ontario) Inc. On March 16, 2021, the Company acquired all the outstanding shares of Reciprocity Corp. ("Reciprocity"), which owns 100% of common shares of GCN Inc. ("GCN"), 100% of common shares of GameSquare Esports (USA) Inc. and 40% of the common shares of Biblos Gaming S.A. de C.V. ("Biblos"). On June 30, 2021, the Company acquired all the outstanding shares of NextGen Tech, LLC (dba. Complexity Gaming) ("Complexity"). On July 27, 2021, the Company acquired 100% of the outstanding shares of Swingman LLC. (dba Cut+Sew and Zoned) ("Cut+Sew"). The Company is traded on the Canadian Securities Exchange (CSE) under the symbol "GSQ" and on the OTCQB Venture Market in the Unites States under the symbol "GMSQF".

These consolidated financial statements include the accounts of the Company and its subsidiaries listed in the following table:

On May 3, 2021, Stetson Oil & Gas Corporation was dissolved. On December 1, 2021, the Company and Reciprocity were amalgamated.

The accompanying consolidated financial statements were prepared on a going concern basis, which contemplates the realization of assets and the payment of liabilities in the ordinary course of business. Accordingly, the consolidated financial statements do not give effect to adjustments that would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and meet its liabilities and commitments in other than the normal course of business and at amounts different from those in the consolidated financial statements. Such adjustments could be material.

As at December 31, 2021, the Company had working capital of $8,582,601 (November 30, 2020 - $264,309). The Company's continuation as a going concern is dependent upon its ability to raise equity capital or borrowings sufficient to meet current and future obligations and ultimately achieve profitable operations. Management intends to finance operating costs over the next twelve months with issuance of common shares, loans or profits from its business activities. There is no assurance that the Company will be able to obtain such financings or obtain them on favorable terms. These matters represent material uncertainties that cast significant doubt on the Company's ability to continue as a going concern.

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| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**<br> For the thirteen months ended December 31, 2021 and the year ended November 30, 2020 |
| (Amounts in Canadian dollars) |

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

The accompanying consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board ("IASB").

The Board of Directors approved these consolidated financial statements on April 28, 2022.

Basis of presentation

These consolidated financial statements include the accounts of the Company and its subsidiaries listed in the table above (see Notes 1 and 4).

Subsidiaries consist of entities over which the Company is exposed to, or has rights to, variable returns as well as the ability to affect those returns through the power to direct the relevant activities of the entity. Subsidiaries are fully consolidated from the date control is transferred to the Company and are de-consolidated from the date control ceases. The financial statements include all the assets, liabilities, revenues, expenses and cash flows of the Company and its subsidiaries after eliminating inter-entity balances and transactions.

The acquisition method of accounting is used to account for acquisitions of subsidiaries that meet the definition of a business under IFRS 3. All intercompany balances and transactions are eliminated on consolidation. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The excess of the cost of acquisition over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized immediately in the consolidated statement of loss.

**Functional and presentation currency and translation**

These consolidated financial statements are presented in Canadian dollars, which is the functional currency of the parent company, its Canadian subsidiary, GameSquare (Ontario) and its U.S. subsidiary, Stetson Oil & Gas Corporation. The functional currency of its U.S. subsidiaries, GameSquare Exports (USA) Inc., GCN, Complexity and Cut+Sew, is the U.S. dollar. The functional currency of its Mexican subsidiary, Biblos, is the Mexican Peso. The functional currency of its UK subsidiary, Code Red, is the United Kingdom pound sterling ("GBP").

Transactions in foreign currencies are translated to the respective functional currency of each subsidiary at exchange rate at the date of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date. Non-monetary items which are measured using historical cost in a foreign currency are translated to functional currency using the exchange rate at the reporting date. Foreign currency differences arising on translation are recognized in profit or loss.

Foreign operations in currencies other than the presentation currency are translated from their functional currencies into Canadian dollars on consolidation. Assets and liabilities are translated into US dollars at the exchange rate in effect at the balance sheet date. Share capital, equity reserves, shares to be (cancelled) issued, accumulated other comprehensive income, and accumulated deficit are translated into Canadian dollars at historical exchange rates. Revenues and expenses are translated into Canadian dollars at the average exchange rate for the year. Foreign currency translation adjustment is included in other comprehensive income.

On disposal of a foreign operation the cumulative translation differences recognized in equity are reclassified to profit or loss and recognized as part of the gain or loss on disposal.

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| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**<br> For the thirteen months ended December 31, 2021 and the year ended November 30, 2020 |
| (Amounts in Canadian dollars) |

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

**Revenue recognition**

The Company generates revenue from consulting services, influencer marketing and promotion fees, broadcast talent management services, and other services. The Company recognizes serves revenue over a period of time as performance obligations are completed. In some instances, cash is received before the Company has satisfied the performance obligations and this amount is recorded as deferred revenue.

*Talent representation service revenues* 

Talent representation service revenue is recorded on completion of the event in which the talent management service has been provided.

*Influencer promotional fees* 

Influencer marketing and promotional fees are recognized over the period during which the services are performed. Revenue and income from custom service contracts are determined on the percentage of completion method, based on the ratio of contract time passed in the reporting period over estimated total length of the contract.

*Consulting fees and other revenues* 

Consulting fees and other revenues are recognized when the services have been performed.

**Accounting for Business Combinations**

Business combinations are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of fair values of the assets transferred, liabilities assumed by the Company, liabilities incurred and equity instruments issued in exchange for control of the acquiree at the by the Company to former owners of the acquiree in exchange for control of the acquiree acquisition date. The acquisition date is the date where the Company obtains control of the acquiree. At the acquisition date, the identifiable assets acquired, liabilities and contingent liabilities assumed are recognized at their fair values, except for deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements, which are recognized and measured in accordance with IAS 12 Income tax and IAS 19 Employee Benefits respectively. Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer's previously held equity interest in the acquiree (if any) over the net of the acquisition date amounts of the identifiable assets acquired and the liabilities assumed. If, after assessment, the net of the acquisition date amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer's previously held interest in the acquiree (if any), the excess is recognized immediately in the statement of loss as a bargain purchase gain. Acquisition related costs are recognized in net income (loss) as incurred.

Contingent consideration, if any, is measured at its acquisition date fair value and included as part of the consideration transferred in a business combination. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration that is classified as an asset or a liability is remeasured at subsequent reporting dates with the corresponding gain or loss being recognized in profit or loss.

**Equipment**

Equipment is initially recorded at cost and subsequently measured at cost less accumulated depreciation and accumulated impairment, if any. Depreciation is calculated using the straight-line method based on the following estimated useful lives:

Equipment 3 to 5 years <br> Leasehold improvements term of the lease

Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

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| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**<br> For the thirteen months ended December 31, 2021 and the year ended November 30, 2020 |
| (Amounts in Canadian dollars) |

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**2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

**Intangible assets**

Intangible assets consist mainly of customer relationships and brand names. Customer relationships and brand names acquired through business combinations are initially recorded at their estimated fair value based on the present value of expected future cash flows.

The Company amortizes its intangible assets on a straight-line basis over the following estimated useful lives:

Customer relationships 3 to 5 years <br> Brand names 3 to 5 years

**Goodwill**

Goodwill arising on a business acquisition is recognized as an asset at the date that control is acquired (the "acquisition date"). Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of the acquirer's previously held equity interest (if any) in the entity over the fair value of the identifiable net assets.

The Company is required to, at least annually, perform impairment assessment of goodwill. To perform impairment assessments, the goodwill are allocated to the cash generating units ("CGUs"). An impairment loss is recognized if the carrying amount of a CGU exceeds its recoverable amount. The recoverable amount of each CGU is based on the greater of fair value less costs to dispose and value in use. To determine recoverable amount, significant assumptions are used in projecting earning margins, earning multiples, growth rates and discount rates in estimating and discounting future cashflows. As a result of the assessment, management recognized goodwill impairment of $2,258,109 during the thirteen months ended December 31, 2021 (Note 4 and Note 7). No impairment losses were recognized during the year ended November 30, 2020.

**Share-based payments**

Share-based payments to employees are measured at the fair value of the instruments issued and amortized over the vesting periods. Share-based payments to non-employees are measured at the fair value of goods or services received or the fair value of the equity instruments issued if it is determined the fair value of the goods or services cannot be reliably measured and are recorded at the date the goods or services are received.

The Company operates an employee stock option plan. The corresponding amount is recorded to the stock option reserve. The fair value of options is determined using the Black-Scholes pricing model which incorporates all market vesting conditions. The number of shares and options expected to vest is reviewed and adjusted at the end of each reporting period such that the amount recognized for services received as consideration for the equity instruments granted shall be based on the number of equity instruments that eventually vest. On exercise of a stock option, any amount related to the initial value of the stock option, along with the proceeds from exercise are recorded to share capital. On expiry of a stock option, any amount related to the initial value of the stock option is recorded to contributed surplus.

**Financial instruments**

**Financial assets**

**Initial recognition and measurement**

Non-derivative financial assets within the scope of IFRS 9 are classified and measured as "financial assets at fair value", as either fair value through profit or loss ("FVTPL") or fair value through other comprehensive income ("FVTOCI"), and "financial assets at amortized costs", as appropriate. The Company determines the classification of financial assets at the time of initial recognition based on the Company's business model and the contractual terms of the cash flows.

**Subsequent measurement - Financial assets at amortized cost**

After initial recognition, financial assets measured at amortized cost are subsequently measured at the end of each reporting period at amortized cost using the Effective Interest Rate ("EIR") method. Amortized cost is calculated by taking into account any discount or premium on acquisition and any fees or costs that are an integral part of the EIR. Financial assets are adjusted for any expected credit losses. The Company's cash and amounts receivable are classified as financial assets at amortized cost.

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| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**<br> For the thirteen months ended December 31, 2021 and the year ended November 30, 2020 |
| (Amounts in Canadian dollars) |

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**2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

**Subsequent measurement - Financial assets at FVTPL**

Financial assets measured at FVTPL include financial assets management intends to sell in the short term and any derivative financial instrument that is not designated as a hedging instrument in a hedge relationship. Financial assets measured at FVTPL are carried at fair value in the consolidated statements of financial position with changes in fair value recognized in other income or expense in the consolidated statements of loss. The Company's other investments are classified as financial assets at FVTPL.

**Subsequent measurement - Financial assets at FVTOCI**

Financial assets measured at FVTOCI are non-derivative financial assets that are not held for trading and the Company has made an irrevocable election at the time of initial recognition to measure the assets at FVTOCI. The Company does not measure any financial assets at FVOCI.

After initial measurement, investments measured at FVTOCI are subsequently measured at fair value with unrealized gains or losses recognized in other comprehensive income or loss in the consolidated statements of comprehensive income (loss). When the investment is sold, the cumulative gain or loss remains in accumulated other comprehensive income or loss and is not reclassified to profit or loss.

Dividends from such investments are recognized in other income in the consolidated statements of earnings (loss) when the right to receive payments is established.

**Derecognition**

A financial asset is derecognized when the contractual rights to the cash flows from the asset expire, or the Company no longer retains substantially all the risks and rewards of ownership.

**Impairment of financial assets**

The Company's only financial assets subject to impairment are amounts receivable, which are measured at amortized cost. The Company has elected to apply the simplified approach to impairment as permitted by IFRS 9, which requires the expected lifetime loss to be recognized at the time of initial recognition of the receivable. To measure estimated credit losses, amounts receivable have been grouped based on shared credit risk characteristics, including the number of days past due. An impairment loss is reversed in subsequent periods if the amount of the expected loss decreases and the decrease can be objectively related to an event occurring after the initial impairment was recognized.

**Financial liabilities**

**Initial recognition and measurement**

Financial liabilities are measured at amortized cost, unless they are required to be measured at FVTPL. All financial liabilities are recognized initially at fair value and in the case of long-term debt, net of directly attributable transaction costs.

**Subsequent measurement - Financial liabilities at amortized cost**

After initial recognition, financial liabilities measured at amortized cost are subsequently measured at the end of each reporting period at amortized cost using the EIR method. Amortized cost is calculated by taking into account any discount or premium on acquisition and any fees or costs that are an integral part of the EIR. The Company's financial liabilities at amortized cost include accounts payable and accrued liabilities, long term loan and deferred consideration on acquisition of Code Red.

**Derecognition**

A financial liability is derecognized when the obligation under the liability is discharged, cancelled, or expires with any associated gain or loss recognized in other income or expense in the consolidated statements of loss.

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| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**<br> For the thirteen months ended December 31, 2021 and the year ended November 30, 2020 |
| (Amounts in Canadian dollars) |

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**2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

**Investments** 

Purchases and sales of investments are recognized on a trade date basis. Public and private investments at fair value through profit or loss are initially recognized at fair value, with changes in fair value reported in profit (loss). At each financial reporting period, the Company's management estimates the fair value of its investments based on the criteria below and reflects such valuations in the financial statements.

Transaction costs are expensed as incurred in profit (loss). The determination of fair value requires judgment and is based on market information where available and appropriate. At the end of each financial reporting period, the Company's management estimates the fair value of investments based on the criteria below and reflects such changes in valuations in the statements of comprehensive loss. The Company is also required to present its investments (and other financial assets and liabilities reported at fair value) into three hierarchy levels (Level 1, 2, or 3) based on the transparency of inputs used in measuring the fair value, and to provide additional disclosure in connection therewith. The three levels are defined as follows:

· Level 1 - investment with quoted market price;

· Level 2 - investment which valuation technique is based on observable market inputs; and

· Level 3 - investment which valuation technique is based on non-observable market inputs.

**Privately-held investments** 

Securities in privately-held companies (other than options and warrants) are initially recorded at cost, being the fair value at the time of acquisition. At the end of each financial reporting period, the Company's management estimates the fair value of investments based on the criteria below and reflects such valuations in the financial statements. The Company had previously classified its investment in Irati at Level 3. As at December 31, 2021, its investment in Irati is included in assets held for sale. See Note 11.

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| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**<br> For the thirteen months ended December 31, 2021 and the year ended November 30, 2020 |
| (Amounts in Canadian dollars) |

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**2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

**Income taxes**

Income tax expense is comprised of current and deferred tax. Income tax expense is recognized in profit or loss except to the extent that it relates to items recognized in equity, in which case it is recognized in equity. Current income tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustments to tax payable in respect of previous years.

Deferred tax liabilities or assets are recognized using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and amounts used for taxation purposes. Deferred tax is not recognized on the initial recognition of assets or liabilities in a transaction that is not a business combination.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset, and they relate to income taxes

levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.

A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

**2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

**Government grants**

Government grants are recognized as income when the Company qualifies for such grants and where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to an expense item, it is recognized as income over the period necessary to match the grant on a systematic basis to the costs that it is intended to compensate.

**Impairment of non-financial assets**

The carrying amount of the Company's assets is reviewed at each reporting date to determine whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. An impairment loss is recognized whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are recognized in net loss.

The recoverable amount of assets is the greater of an asset's fair value less cost to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

An impairment loss is only reversed if there is an indication that the impairment loss may no longer exist and there has been a change in the estimates used to determine the recoverable amount, however, not to an amount higher than the carrying amount that would have been determined had no impairment loss been recognized in previous years. Assets that have an indefinite useful life are not subject to amortization and are tested annually for impairment.

**Loss per share**

Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of shares outstanding during the reporting period. Diluted loss per share is computed similar to basic loss per share except that the weighted average shares outstanding are increased to include additional shares for the assumed exercise of stock options and warrants, if dilutive. The number of additional shares is calculated by assuming that outstanding stock options and warrants were exercised and that the proceeds from such exercises were used to acquire common stock at the average market price during the reporting periods**.**

**New accounting standards**

Effective December 1, 2020, the Company adopted the following new accounting standard.

IAS 1 - Presentation of Financial Statements ("IAS 1") and IAS 8 - Accounting Policies, Changes in Accounting Estimates and Errors ("IAS 8") were amended in October 2018 to refine the definition of materiality and clarify its characteristics. The revised definition focuses on the idea that information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general-purpose financial statements make on the basis of those financial statements. This new standard did not have any material impact on the Company's condensed interim consolidated financial statements.

**Accounting pronouncements not yet adopted**

Certain pronouncements were issued by the IASB or the IFRIC that are mandatory for accounting periods commencing on or after January 1, 2022. Many are not applicable or do not have a significant impact to the Company and have been excluded.

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| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**<br> For the thirteen months ended December 31, 2021 and the year ended November 30, 2020 |
| (Amounts in Canadian dollars) |

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

**Accounting pronouncements not yet adopted (continued)**

IAS 37 - Provisions, Contingent Liabilities, and Contingent Assets ("IAS 37") was amended. The amendments clarify that when assessing if a contract is onerous, the cost of fulfilling the contract includes all costs that relate directly to the contract - i.e. a full-cost approach. Such costs include both the incremental costs of the contract (i.e. costs a company would avoid if it did not have the contract) and an allocation of other direct costs incurred on activities required to fulfill the contract - e.g. contract management and supervision, or depreciation of equipment used in fulfilling the contract. The amendments are effective for annual periods beginning on January 1, 2022.

IFRS 3 - Business Combinations ("IFRS 3") was amended. The amendments introduce new exceptions to the recognition and measurement principles in IFRS 3 to ensure that the update in references to the revised conceptual framework does not change which assets and liabilities qualify for recognition in a business combination. An acquirer should apply the definition of a liability in IAS 37 - rather than the definition in the Conceptual Framework - to determine whether a present obligation exists at the acquisition date as a result of past events. For a levy in the scope of IFRIC 21, the acquirer should apply the criteria in IFRIC 21 to determine whether the obligating event that gives rise to a liability to pay the levy has occurred by the acquisition date. In addition, the amendments clarify that the acquirer should not recognize a contingent asset at the acquisition date. The amendments are effective for annual periods beginning on January 1, 2022.

IAS 16 - Property, Plant and Equipment ("IAS 16") was amended. The amendments introduce new guidance, such that the proceeds from selling items before the related property, plant and equipment is available for its intended use can no longer be deducted from the cost. Instead, such proceeds are to be recognized in profit or loss, together with the costs of producing those items. The amendments are effective for annual periods beginning on January 1, 2022.

**3. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS**

The preparation of the consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies regarding certain types of assets, liabilities, revenues and expenses. Actual results could differ from those estimates.

Estimates and underlying assumptions are based on historical experience and are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the year in which the estimates are revised and in any future years affected.

Information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements:

**Impairment of non-financial assets**

In the determination of impairment charges, management looks at recoverable amount, which is the higher of value-in-use or fair value less costs to sell in the case of assets and at objective evidence, significant or prolonged decline of fair value on financial assets indicating impairment. The estimate of the value-in-use of cash-generating units depends on a number of assumptions, in particular market data, estimated future cash flows, and the discount rate. The estimate and their individual assumptions require that management make a decision based on the available information and market condition at each reporting period. These assumptions are subject to risk and uncertainty. Any material changes in these assumptions could result in a significant change in the recoverable value of the Company's equipment, intangible assets, and goodwill.

**Estimated useful life of equipment and intangible assets**

Management estimates the useful lives of equipment and intangibles based on the period during which the assets are expected to be available for use. The amounts and timing of recorded expenses for amortization of equipment and intangibles for any period are affected by these estimated useful lives. The estimates are reviewed at each reporting date and are updated if expectations change as a result of physical wear and tear, technical or commercial obsolescence, industry trends and legal or other limits to use. It is possible that changes in these factors may cause significant changes in the estimated useful lives of the Company's equipment in the future.

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| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br> For the thirteen months ended December 31, 2021 and the year ended November 30, 2020 |
| (Amounts in Canadian dollars) |

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3. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS (continued)

**Principal versus agent** 

The Company is required to make judgments with respect to its relationships with its consultants. Based on the terms of the arrangements, the Company determines whether it acts as the principal or an agent for the services provided to its customers. The key elements to determine if the Company acts as a principal or an agent are whether it has primarily responsible to fulfill the promise to deliver the services, whether it has inventory risk and has discretion in establishing the sales prices for the services.

**Revenue recognition** 

In its determination of the amount and timing of revenue to be recognized, management relies on assumptions and estimates supporting its revenue recognition policy. Estimates of the percentage of completion for applicable customer projects are based upon current actual and forecasted information and contractual terms.

**Expected credit losses** 

Determining an allowance for ECLs requires management to make assumptions about the historical patterns for the probability of default, the timing of collection and the amount of incurred credit losses, which are adjusted based on management's judgment about whether economic conditions and credit terms are such that actual losses may be higher or lower than what the historical patterns suggest.

**Share-based payment transactions**

The Company measures the cost of equity-settled transactions with employees and applicable non-employees by reference to the fair value of the equity instruments at the date at which they are vested. Estimating fair value for share-based payment transactions requires determining the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determining the most appropriate inputs to the valuation model including the expected life of the share option, risk-free interest rates, volatility and dividend yield and making assumptions about them.

**Fair value of investment in securities not quoted in an active market or private company investments** 

Where the fair values of financial assets and financial liabilities recorded on the consolidated statement of financial position cannot be derived from active markets, they are determined using a variety of valuation techniques. The inputs to these models are derived from observable market data where possible, but where observable market data are not available, judgment is required to establish fair values.

**Functional currency** 

The Company operates in multiple jurisdictions. Judgment from management is applied in order to determine the functional currency of each entity.

**Business combinations** 

For business combinations, the Company must make assumptions and estimates to determine the fair value of net assets being acquired. To do so, the Company must determine the acquisition date fair value of the identifiable assets acquired, including such intangible assets as technology and liabilities assumed. Among other things, the determination of these fair market values involves the use of discounted cash flow analyses and future sales growth. Goodwill is measured as the excess of the fair value of the consideration transferred measured at the acquisition date. These assumptions and estimates have an impact on the asset and liability amounts recorded in the consolidated statement of financial position on the acquisition date. In addition, the estimated useful lives of the acquired amortizable assets, the identification of intangible assets and the determination of the indefinite or finite useful lives of intangible assets acquired will have an impact on the Company's future profit or loss.

**Provisions and contingencies**

Going concern - see Note 1.

The assessment of contingencies inherently involves the exercise of significant judgment and estimates of the outcome of future events. By their nature, contingencies will only be resolved when one or more future events occur or fail to occur. The assessment of contingencies inherently involves the exercise of significant judgement and estimates of the outcome of future events. See Note 23.

---

| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br> For the thirteen months ended December 31, 2021 and the year ended November 30, 2020 |
| (Amounts in Canadian dollars) |

---

**4. ACQUISITIONS**

**a) Acquisition of Code Red**

On October 2, 2020, the Company acquired all of the outstanding shares of Code Red. Code Red is a private company incorporated in England and Wales that operates an esports agency representing on screen talent, influencers and players in Europe and throughout the world. GameSquare is focused on the esports market and has been seeking to acquire additional assets and entities serving the esports market and more broadly in sports and entertainment. As a result of the control obtained through the acquisition of 100% of the outstanding shares of Code Red, the assets and liabilities were consolidated into the Company's financial statements. The assets consisted primarily of cash, amounts receivable, prepaid expenses, equipment and intangibles (customer relationships and brand name). The liabilities assumed consisted of accounts and taxes payable, deferred tax liability and deferred revenue.

As consideration for the acquisition, the Company paid $2,490,000 in cash and issued 9,300,000 shares of its common stock with an estimated fair value of $1,735,473 based on the value allocated to common shares issued in the October 2, 2020 private placement. The cash deferred portion of $185,000 is due on, or before, December 31, 2021. In addition, the Company owes bonuses of $150,000 to consultants of the Company, related to the closing of the acquisition, included in deferred consideration in the consolidated statements of financial position.

The following table summarizes the consideration for the acquisition:

---

| | |
|:---|:---|
| Cash | $2490000 |
| Cash deferred portion | 185000 |
| Fair value of shares issued  | 1735473 |
|  | $4410473 |

---

The following table summarizes the accounting estimates of the acquisition with a purchase price of $4,410,473:

---

| | |
|:---|:---|
| Cash | $251839 |
| Amounts receivable | 474201 |
| Prepaid | 17589 |
| Fixed assets | 1411 |
| Customer relationships | 1644000 |
| Brand name | 799000 |
| Accounts payable and accruals | (374797) |
| Taxes payable | (9152) |
| Deferred tax liability | (464000) |
| Deferred revenue | (187727) |
|  | 2152364 |
| Goodwill | $2258109 |
| Preliminary accounting estimate of net assets acquired | $4410473 |

---

Revenues and net profit during the thirteen months ended December 31, 2021 from Code Red were $5,707,071 and $70,184, respectively (year ended November 30, 2020, $488,774 and net loss of $7,223).

During the thirteen months ended December 31, 2021, the Company recognized an impairment of goodwill $2,258,109 based on the estimated the recoverable amount (Note 2 and Note 7).

---

| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br> For the thirteen months ended December 31, 2021 and the year ended November 30, 2020 |
| (Amounts in Canadian dollars) |

---

**4. ACQUISITIONS (continued)**

&nbsp;&nbsp;&nbsp;&nbsp;**b) Acquisition of Reciprocity**

On March 16, 2021, the Company acquired 100% of the outstanding shares of Reciprocity, a privately held gaming and esports company. Reciprocity owned 100% of GameSquare Esports USA Inc. (formerly Reciprocity Corp of Nevada, Inc.) and GCN Inc. In addition, Reciprocity held a 40% interest in Biblos Gaming S.A. de C.V. Management determined that this acquisition meets the definition of a business under IFRS 3 and therefore the transaction was accounted as a business combination.

As consideration for the acquisition, the Company issued 43,749,996 of its common shares with an estimated fair value of $7,345,478 to certain shareholders of Reciprocity and 3,000,000 options of the Company with an estimated fair value of $415,208 to option-holders of Reciprocity. The consideration shares are subject to a 12-month lock-up period, a third of which will be released every four months following the closing date of March 16, 2021.

Certain Reciprocity shareholders will also be entitled to receive (i) 5.255 million common shares of the Company if the Reciprocity business generates a minimum of USD$5 million of revenue and USD$1 million of net earnings before interest, taxes, and depreciation and amortization ("EBITDA<sup>"</sup>) within 12 months of the acquisition date of March 16, 2021 (the "Acquisition Date") and (ii) 9 million Common Shares if the Reciprocity business generates a minimum of USD$7 million of revenue and USD$1.4 million of EBITDA. In addition, the Company has agreed to grant or issue (i) up to 6,168,000 options to certain Reciprocity securityholders exercisable for 24 months to acquire an equal number of Common Shares at an exercise price of $1.00 per share if certain performance targets of Reciprocity are achieved 12 months and 24 months following the Acquisition Date and (ii) up to 3,725,000 common shares to certain Reciprocity securityholders if certain performance targets of Reciprocity are achieved 12 months and 24 months following the Acquisition Date. The estimated fair value of the contingent consideration at the date of acquisition was $nil due to the uncertainty of future performance target.

The following table summarizes the consideration for the acquisition:

---

| | |
|:---|:---|
| Estimated fair value of shares issued | $7345478 |
| Estimated fair value of options issued | 415208 |
|  | $7760686 |

---

The following table summarizes the preliminary accounting estimates of the acquisition with a purchase price of $7,760,686:

---

| | |
|:---|:---|
| Cash | $516236 |
| Amounts receivable | 263363 |
| Prepaids | 9993 |
| Equipment | 11862 |
| Accounts payable and accrued liabilities | (985290) |
| Loan payable | (996400) |
|  | (1180236) |
| Excess of purchase price over fair value of assets acquired (expensed) | 8940922 |
|  | $7760686 |

---

Revenues and net loss during the thirteen months ended December 31, 2021 were $2,451,286 and $1,452,850, respectively. On December 1, 2021, the Company and Reciprocity were amalgamated.

---

| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br> For the thirteen months ended December 31, 2021 and the year ended November 30, 2020 |
| (Amounts in Canadian dollars) |

---

**4. ACQUISITIONS (continued)**

&nbsp;&nbsp;&nbsp;&nbsp;**c) Acquisition of Complexity**

On June 30, 2021, the Company acquired 100% of the issued and outstanding shares of Complexity, an esports organization in Texas USA. Management determined that this acquisition meets the definition of a business under IFRS 3 and therefore the transaction was accounted as a business combination. As total purchase consideration for the acquisition, the Company issued 83,328,750 common shares of the Company with an estimated fair value of $10,035,546 to former shareholders of Complexity. The shares are subject to a 180-day trading hold post the closing date of June 30, 2021.

The following table summarizes the consideration for the acquisition:

---

| | |
|:---|:---|
| Estimated fair value of shares issued | $18535546 |
| Share consideration received | (8500000) |
|  | $10035546 |

---

The following table summarizes the preliminary accounting estimates of the acquisition with a purchase price of $10,035,546:

---

| | |
|:---|:---|
| Cash | $538385 |
| Amounts receivable | 112319 |
| Other current assets | 878103 |
| Fixed assets | 4704833 |
| ROU asset | 3656573 |
| Brand name | 5260635 |
| Accounts payable and accrued liabilities | (603901) |
| Lease Liability | (3889875) |
| Loans | (621526) |
|  | $10035546 |

---

**d) Acquisition of Cut+Sew**

On July 27, 2021, the Company acquired 100% of the issued and outstanding shares of Cut+Sew, a privately held marketing agency operating in the sports and esports industries. Management determined that this acquisition meets the definition of a business under IFRS 3 and therefore the transaction is a business combination.

As consideration for the acquisition, the Company paid $3,000,000 in cash and issued 2 million of its common shares with an estimated fair value of $240,866. The shares are subject to a six month trading hold following the closing date of July 27, 2021.

Additionally, certain members of Cut+Sew became entitled to receive (i) up to $1,250,000 paid in common shares of the Company and up to $150,000 paid in cash if Cut+Sew generates up to US$1.0 million of EBITDA in the 12 months following the closing date of July 27, 2021 of the acquisition, and (ii) up to $2,210,000 paid in common shares of the Company and up to $240,000 paid in cash if Cut+Sew generates EBITDA of up to US$1.5 million in the period of 12 to 24 months following the cClosing date of July 27, 2021, for a maximum contingent consideration of up to $7.85 million paid in cash and common shares. The estimated fair value of the contingent consideration at the date of acquisition was $66,238.

---

| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br> For the thirteen months ended December 31, 2021 and the year ended November 30, 2020 |
| (Amounts in Canadian dollars) |

---

**4. ACQUISITIONS (continued)**

**d) Acquisition of Cut+Sew**

The following table summarizes the consideration for the acquisition:

---

| | |
|:---|:---|
| Cash | $3000000 |
| Estimated fair value of shares issued | 240866 |
| Contingent consideration - shares | 66238 |
|  | $3307104 |

---

The following table summarizes the preliminary accounting estimates of the acquisition with a purchase price of $3,307,104:

---

| | |
|:---|:---|
| Cash | $396251 |
| Amounts receivable | 188258 |
| Prepaid expenses | 5795 |
| Other current assets | 11320 |
| Customer relationships | 1421461 |
| Brand name | 1602924 |
| Accounts payable and accrued liabilities | (255881) |
| Deferred revenue | (63024) |
|  | $3307104 |

---

**5. AMOUNTS RECEIVABLE**

Amounts receivable balances as at December 31, 2021 and November 30, 2020 consist of:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2021** | November 30, 2020 |
| Trade receivables | $**3863965** | $347269 |
| HST receivable | **36880** | 34480 |
| Other receivables | **10793** | - |
| Balance, end of period | $**3911638** | $381749 |

---

---

| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br> For the thirteen months ended December 31, 2021 and the year ended November 30, 2020 |
| (Amounts in Canadian dollars) |

---

**6. EQUIPMENT**

---

| | | | |
|:---|:---|:---|:---|
|  | **Equipment** | **Leasehold improvements** | **Total** |
| **Cost:** |  |  |  |
| Balance, December 1, 2020 | $1419 | $- | $1419 |
| Acquisition of Reciprocity | 11861 |  | 11861 |
| Acquisition of Complexity | 174058 | 4530775 | 4704833 |
| Additions | 111757 |  | 111757 |
| Transfer to assets available for sale | (803) |  | (803) |
| Effect of foreign exchange | 4697 | 103820 | 108517 |
| **Balance, December 31, 2021** | $302989 | $4634595 | $4937584 |
| **Depreciation:** |  |  |  |
| Balance, December 1, 2020 | $- | $- | $- |
| Depreciation charge for the period | 34589 | 300562 | 335151 |
| Effect of foreign exchange | 192 | 1837 | 2029 |
| **Balance, December 31, 2021** | $34781 | $302399 | $337180 |
| **Net book value:** |  |  |  |
| **Balance, December 31, 2021** | $**268208** | $**4332196** | $**4600404** |
| Balance, December 1, 2020 | $1419 | $- | $1419 |
| **Cost:** |  |  |  |
| Balance, December 1, 2019 | $- | $- | $- |
| Acquisition of Code Red | 1411 |  | 1411 |
| Effect of foreign exchange | 8 |  | 8 |
| **Balance, November 30, 2020** | $1419 | $- | $1419 |
| **Net book value:** |  |  |  |
| **Balance, November 30, 2020** | $**1419** | $**-** | $**1419** |
| Balance, December 1, 2019 | $- | $- | $- |

---

---

| |
|:---|
| GAMESQUARE ESPORTS INC. <br> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br> For the thirteen months ended December 31, 2021 and the year ended November 30, 2020 |
| (Amounts in Canadian dollars) |

---

**7. INTANGIBLES AND GOODWILL** 

**Intangibles**

The components of intangible assets as of December 31, 2021 are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Customer relationships** | **Brand name** | **Total** |
| Balance, December 1, 2019 | $- | $- | $- |
| Acquisition of Code Red | 1644000 | 799000 | 2443000 |
| Amortization | (54800) | (26633) | (81433) |
| **Balance, November 30, 2020** | $1589200 | $772367 | $2361567 |
| Acquisition of Complexity |  | 5260635 | 5260635 |
| Acquisition of Cut & Sew | 1421461 | 1602924 | 3024385 |
| Amortization | (474655) | (832757) | (1307412) |
| **Balance, December 31, 2021** | $2536006 | $6803169 | $9339175 |

---

On October 2, 2020, the Company acquired all of the outstanding shares of Code Red (see Note 4(a)). The intangible assets acquired consisted of customer relationships and the Code Red brand name. On June 30, 2021, the Company acquired all the outstanding shares of Complexity. The intangible assets acquired consisted of the Complexity brand name and its ties to the Dallas Cowboys. On July 27, 2021, the Company acquired all the issued and outstanding shares of Cut+Sew. The intangible assets acquired consisted of the Cut+Sew brand name and customer relationships.

**Goodwill**

Changes in the carrying value of goodwill were as follows:

---

| | |
|:---|:---|
| Balance, December 1, 2019 | $- |
| Acquisition of Code Red | 2258109 |
| **Balance, November 30, 2020** | $2258109 |
| Impairment of goodwill | (2258109) |
| **Balance, December 31, 2021** | $- |

---

During the year ended December 31, 2021, the Company recognized an impairment of its goodwill based on the estimated fair value of the recoverable amount.

---

| |
|:---|
| GAMESQUARE ESPORTS INC. <br> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br> For the thirteen months ended December 31, 2021 and the year ended November 30, 2020 |
| (Amounts in Canadian dollars) |

---

**8. DEPOSITS AND RECLAMATION PROVISION**

The following table presents a reconciliation of the beginning and ending aggregate carrying amount of the reclamation provision associated with the retirement of formerly owned oil and gas exploration properties (both operated and non-operated) in Alberta, Canada and North Dakota, USA:

---

| | |
|:---|:---|
|  | **Alberta** |
| Balance, reclamation provisions, December 1, 2019 |  |
| Acquisition of GameSquare/RTO | 317625 |
| Change in estimates | 6308 |
| Balance, reclamation provision, December 31, 2021 and November 30, 2020 | $**323933** |

---

As at December 31, 2021, the Company had reclamation deposits of $340,443 held by the Alberta Energy Regulator ("AER"). On March 17, 2021, the Company received a notice of release on a Letter of Credit related to oil and gas mining leases in North Dakota. Management had previously considered the Letter of Credit uncollectible. As a result, the Company has recorded a recovery of $97,323 included in the consolidated statements of loss and comprehensive loss related to the change in provision for the reclamation deposit.

The reclamation provision represents the present value of estimated costs for required future decommissioning and other site restoration activities in Alberta. The total future reclamation provision is estimated based on the Company's net ownership interest in all wells and facilities and the estimated costs to abandon and reclaim these wells and facilities.

The Company is not in compliance with all the regulations imposed by the AER. As long as the Company is not in compliance with the AER regulations, it may not drill or operate any oil and gas assets within the Province of Alberta. The Company is aware that the Alberta Orphan Well Fund has commenced reclamation activities at several the Company's former oil and gas exploration sites. The Company has not received any demand letters from the Orphan Well Fund requesting reimbursement for reclamation costs.

**9. CASH FLOWS SUPPLEMENTAL INFORMATION**

---

| | | |
|:---|:---|:---|
| *($ Canadian)* | **Thirteen months ended December 31, 2021** | **Year ended November 30, 2020** |
| SUPPLEMENTAL INFORMATION: |  |  |
| Value of shares issued on acquisition of Reciprocity  | $**7345478** | $- |
| Value of options issued on acquisition of Reciprocity  | **415208** |  |
| Value of shares issued on acquisiton of Cut & Sew | **240866** |  |
| Value of shares issued on acquistion of Complexity | **10035546** |  |
| Value of shares issued on reverse acquisiton of GameSquare (Note 25) | **-** | 1865356 |
| Value of options issued on reverse acquisition of GameSquare (Note 25) | **-** | 16030 |
| Value of shares issued on acquistion of Code Red (Note 4(a)) | **-** | 1735473 |
| Cash deferred on acquisition of Code Red (Note 4(a)) | **-** | 185000 |
| Value of broker warrants issued (Note 17) | **204006** | 26640 |
| Interest paid | **17932** |  |
|  | 0 |  |

---

**10. OTHER ASSETS**

Other assets consist of acquisition costs of players and security deposits. Acquisition costs of players are amortized on a straight-line basis over the players' contract terms.

**11. ASSETS AND LIABILITIES HELD FOR SALE**

**(a) Biblos**

Subsequent to December 31, 2021, the Company entered into an agreement to sell it's 40% share of Biblos for US$125,000.

The assets and liabilities related to Biblos have been included in assets and liabilities held for sale in the consolidated statements of financial position as at December 31, 2021. The assets and liabilities associated with Biblos are comprised of the following:

---

| | |
|:---|:---|
| Cash  | $16636 |
| Amounts receivable | 172030 |
| Prepaid expenses and deposits | 10254 |
| Equipment | 803 |
| Total assets | $199723 |
| Accounts payable and accrued liabilities | $162823 |
| Total liabilities | $162823 |
| Net carrying amount | $36900 |

---

**(b) Irati Energy Corporation ("Irati")**

Irati is a private company primarily focused on the development of its northern oilshale block located in Brazil.

On April 14, 2022, the Company entered into an agreement to sell its investment in Irati (See Note 26). The Company currently holds 1,252,710 Irati common shares valued at $0.05 per share.

**12. INCOME TAXES**

**a) Provision for income taxes:**

Major items causing the Company's effective income tax rate to differ from the combined Canadian federal and provincial statutory rate of 26.5% (2020 - 26.5%) were as follows:

---

| |
|:---|
| (Loss) before income taxes |
| Expected income tax (recovery) based on statutory rate |
| Adjustment to expected income tax benefit: |
| Change in benefit of tax assets not recognized |
| Income tax (recovery) |

---

---

| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br> For the thirteen months ended December 31, 2021 and the year ended November 30, 2020 |
| (Amounts in Canadian dollars) |

---

**12. INCOME TAXES (continued)**

**b) Deferred Income Taxes**

Deferred income tax liabilities have been recognized in respect of the following:

---

| | | |
|:---|:---|:---|
|  | **2021** | **2020** |
|  | **$** | **$** |
| Intangibles | 347958 | 464000 |
| Total | 347958 | 464000 |

---

---

| | | |
|:---|:---|:---|
|  | **2021** | **2020** |
|  | **$** | **$** |
| Non-capital loss carry-forwards | 6678000 | 1298000 |
| Total | 6678000 | 1298000 |

---

Deferred income tax assets have not been recognized in respect of the following deductible temporary differences:

Deferred tax assets have not been recognized in respect of these items because it is not probable that future taxable profit will be available against which the Company can use the benefits. Certain tax pools and balances may be restricted given the change in business.

The non-capital losses for Canadian income tax purposes of approximately $3,552,000 (2020 - $1,298,000) as at December 31, 2021, expire in 2041. The Company also has non-capital losses for foreign income tax purposes of approximately $3,126,000 as at December 31, 2021.

**13. LOAN PAYABLE**

The Company's loan payable bore an interest rate of 20% per annum and had a maturity date of February 13, 2021 which is one year from the date of issuance. On May 18, 2021, the loan was amended to reduce the interest rate to 10% per annum and extend the maturity date to March 31, 2022. During the thirteen months ending December 31, 2021, the Company accrued an interest expense of $31,177 and repaid principal and interest of $562,831. As at December 31, 2021, the principal and accrued interest were carried at $152,305.

---

| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br> For the thirteen months ended December 31, 2021 and the year ended November 30, 2020 |
| (Amounts in Canadian dollars) |

---

**14. LEASE**

On June 30, 2021, the Company acquired Complexity (see Note 4(c)). Complexity leases a building in Frisco, Texas. The lease commenced on April 9, 2019 and expired in April 2029. The lease had a carrying amount of $3,656,573 at the date of acquisition of Complexity. The amortization charge during the period was $237,297.

The lease liability is measured at the present value of the lease payments that are not paid at the statement of financial position date. Lease payments are apportioned between interest expenses and a reduction of the lease liability using the Company's incremental borrowing rate to achieve a constant rate of interest on the remaining balances of the liabilities. For the thirteen months ended December 31, 2021, the Company recognized $158,637 in interest expense related to its lease liabilities.

A reconciliation of the lease liabilities for the thirteen months ended December 31, 2021 is as follows:

---

| | |
|:---|:---|
|  | **December 31, 2021** |
| Balance, beginning of period | $**-** |
| Acquisiton of Complexity | **3889875** |
| Cash outflows  | **(333140)** |
| Finance costs | **158637** |
| Other comprehensive income due to foreign currency adjustment | **88068** |
|  | $**3803440** |

---

---

| | |
|:---|:---|
|  | **December 31, 2021** |
| Lease Liability - current | $**382057** |
| Lease Liability - non-current | **3421383** |
|  | $**3803440** |

---

---

| |
|:---|
| GAMESQUARE ESPORTS INC. <br> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br> For the thirteen months ended December 31, 2021 and the year ended November 30, 2020 |
| (Amounts in Canadian dollars) |

---

**15. CAPITAL STOCK**

a) Authorized

Unlimited common shares without par value

b) Common shares

---

| | | |
|:---|:---|:---|
|  | **Number of common shares** | **Amount** |
| Balance as of November 30, 2019 | 20000000 | $513735 |
| Shares issued on reverse take-over | 9996011 | 1865356 |
| Shares issued on acquisition of Code Red | 9300000 | 1735473 |
| Private placement | 12632900 | 2357404 |
| Share issue costs | - | (131640) |
| Balance as of November 30, 2020 | 51928911 | $6340328 |
| Shares issued on acquisition of Reciprocity (Note 4(b)) | 43749996 | 7345478 |
| Shares issued on acquisition of NextGen (Note 4(c)) | 83328750 | 10035546 |
| Shares issued on acquisition of Cut&Sew (Note 4(d)) | 2000000 | 240866 |
| Private placements | 61581477 | 23091436 |
| Share issue costs |  | (2130286) |
| Options exercised | 312766 | 150045 |
| RSUs exercised | 1000000 | 395000 |
| Warrants exercised | 480000 | 222443 |
| Balance as of December 31, 2021 | 244381900 | $45690856 |

---

On October 2, 2020, the Company completed a reverse take-over transaction (see Note 25) and issued 9,996,011 common shares valued at $1,865,356 based on the price of the concurrent financing. In addition, options to purchase an aggregate of 223,276 common shares, valued at $16,030, were issued as replacement options for GameSquare options outstanding immediately prior to the transaction. The purchase price was allocated $63,846 to the assets and liabilities assumed (Note 25) with the remaining $1,817,540 recorded as transaction costs in the consolidated statements of loss.

In connection with the reverse takeover transaction detailed in Note 25, on October 2, 2020, the Company closed a financing of 12,032,900 units at a purchase price of $0.25 per unit for aggregate gross proceeds of $3,008,225. Each unit consists of one common share and one common share purchase warrant entitling the holder to acquire one common share of the Company at an exercise price of $0.40 for a period of 24 months from issuance. In connection with the financing, the Company paid finder's fees comprised of (i) $105,000 in cash and (ii) 420,000 broker warrants. The broker warrants will be exercisable for a period of two years from the date of issuance at a price of $0.40 per common share. See Note 17. The gross proceeds were prorated to common shares and warrants based on their relative fair values.

Following the completion of the reverse take-over transaction, on October 2, 2020, the Company completed the acquisition of Code Red by issuing 9,300,000 shares of the Company at an estimated fair value of $1,735,473 based on the value of the concurrent private placement.

On November 17, 2020, the Company closed a non-brokered private placement financing issuing 600,000 units of the Company at a price of $0.25 per unit for gross proceeds of $150,000. Each unit consists of one common share and one common share purchase warrant entitling the holder to acquire one common share of the Company at an exercise price of $0.40 for a period of 24 months from issuance. See Note 17. The gross proceeds were prorated to common shares and warrants based on their relative fair values.

---

| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br> For the thirteen months ended December 31, 2021 and the year ended November 30, 2020 |
| (Amounts in Canadian dollars) |

---

**15. CAPITAL STOCK (continued)**

b) Common shares (continued)

On February 19, 2021, the Company closed a non-brokered private placement financing of 2,381,477 units at a price of $0.42 per Unit for gross proceeds of $1,000,220 (the "Offering"). Each Unit consists of one common share of the Company and one-half of one common share purchase warrant (each whole warrant, a "Warrant"). Each Warrant entitles the holder thereof to acquire one additional common share at an exercise price of $0.60 for a period of 36 months from issuance. In connection with the financing, the Company paid finder's fees of $1,470 and issued 166,703 finder warrants. Each finder warrant entitles the holder to acquire one Common Share at a price of $0.60 per Common Share for a period of 36 months following issuance. The gross proceeds were prorated to common shares and warrants based on their relative fair values. See Note 17.

On March 4, 2021, the Company closed a bought deal private placement financing and upsize led by Canaccord Genuity Corp., on behalf of a syndicate of underwriters (collectively, the "Underwriters") issuing 16,700,000 units of the Company for gross proceeds of $7,014,000. Each Unit consists of one common share of the Company and one-half of one common share purchase warrant (each whole warrant, a "Warrant"). Each Warrant entitles the holder thereof to purchase one Common Share at an exercise price of $0.60 for a period of 36 months from the closing date of the offering, subject to a Warrant acceleration right exercisable by the Company if, at any time following the date that is four months and one day from the date of the closing of the Offering, the daily volume weighted average trading price of the Company's common shares on the Canadian Securities Exchange is greater than $1.00 for the preceding five consecutive trading days.

As consideration for their services with respect to the Offering, the Underwriters received fees of $500,000, a cash commission of $490,980 and 1,169,000 warrants of the Company (the "Broker Warrants"), exercisable for a period of 36 months following the closing date, to acquire 1,169,000 Units of the Company. Each Unit consists of one common share of the Company and one half of one common share purchase warrant. Each warrant is exercisable to purchase one common share of the Company at an exercise price of $0.60 per common share for a period of 36 months from the Escrow Release Date. In addition, the Company incurred legal and other expenses totaling $159,995 in connection with the Offering.

On March 24, 2021, 212,766 options with exercise prices of $0.47 were exercised for gross proceeds of $100,000.

On July 6, 2021, 1,000,000 shares were issued on the exercise of RSUs (see Note 16(b).

On July 22, 2021, the Company closed a bought deal private placement offering led by Canaccord Genuity Corp. acted as lead underwriter on behalf of a syndicate of underwriters, issuing 21,250,000 units of the Company at a price of $0.40 per unit for gross proceeds of $8.5 million. Each Unit consists of one common share of the Company and one half of one purchase warrant. Each Warrant is exercisable for one common share at an exercise price of $0.60 per common share for a period of 24 months from the closing date of the offering, subject to the Warrant Acceleration Right (as defined below). If, at any time following the closing of the offering, the daily volume weighted average trading price of the common shares on the Canadian Securities Exchange is greater than $1.00 per common share for the preceding 10 consecutive trading days, the Company shall have the right to accelerate the expiry date of the Warrants to a date that is at least 30 trading days following the date of such written notice and press release (the "Warrant Acceleration Right").

On July 22, 2021, the Company also closed a concurrent non-brokered private placement whereby the Jones family and the Goff family subscribed for an additional 21,250,000 units of the Company for gross proceeds of $8.5 million on the same terms as those in the bought deal private placement offering.

As consideration for the services rendered by the Underwriters in connection with the Offering, the Company has (i) paid the Underwriters a cash commission of $595,000, and (ii) issued an aggregate of 1,487,500 broker warrants. Each broker warrant is exercisable into that number of Units at an exercise price of $0.40 for a period of 36 months from the closing date. In addition, the Company incurred legal and other expenses totaling $178,835 in connection with the Offering.

---

| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br> For the thirteen months ended December 31, 2021 and the year ended November 30, 2020 |
| (Amounts in Canadian dollars) |

---

**16. SHARE BASED PAYMENTS**

a) Options

The Company has granted options for the purchase of common shares to its directors, consultants, employees and officers. The aggregate number of shares that may be issuable pursuant to options granted under the Company's stock option plan (the "Option Plan") will not exceed 10% of the issued common shares of the Company at the date of grant. No more than 5% of the issued shares of the Company may be granted to any one optionee. The options are non-transferable and non-assignable and may be granted for a term not exceeding five years. The exercise price of the options may not be less than the greater of $0.05 and the market price, subject to all applicable regulatory requirements.

The following is a summary of stock options outstanding at December 31, 2021 and November 30, 2020 and changes during the periods then ended.

---

| | | |
|:---|:---|:---|
|  | **Number of stock options** | **Weighted average** <br> **exercise price** |
| Balance, November 30, 2019 | 100000 | $0.05 |
| Issued on acquisition of GameSquare | 223275 | 0.60 |
| Cancelled | (137931) | 0.61 |
| Granted | 2000000 | 0.48 |
| Balance, November 30, 2020 | 2185344 | $0.46 |
| Granted | 14509241 | 0.45 |
| Issued on acquisition of Reciprocity | 3000000 | 0.40 |
| Exercised | (312766) | 0.34 |
| Balance as of December 31, 2021 | 19381819 | $0.45 |

---

Information relating to share options outstanding as at December 31, 2021 is as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Exercise price** | **Options outstanding** | **Options exercisable** | **Expiry date** | **Weighted average grant date fair value vested** | **Weighted average remaining life in years** |
| $0.40 | 3000000 | 3000000 | Thursday, March 16, 2023 | 415208 | 1.21 |
| $0.61 | 50861 | 50861 | Sunday, October 1, 2023 | 3566 | 1.75 |
| $0.58 | 34483 | 34483 | Thursday, March 14, 2024 | 2793 | 2.20 |
| $0.41 | 350000 | 175000 | Sunday, April 28, 2024 | 47235 | 2.33 |
| $0.48 | 2000000 | 2000000 | Tuesday, November 25, 2025 | 709953 | 3.90 |
| $0.44 | 2000000 | 750000 | Thursday, January 22, 2026 | 285313 | 4.06 |
| $0.50 | 500000 | 375000 | Tuesday, February 24, 2026 | 106226 | 4.15 |
| $0.47 | 550000 | 237500 | Monday, March 2, 2026 | 89937 | 4.17 |
| $0.44 | 1000000 | 750000 | Monday, March 16, 2026 | 183553 | 4.21 |
| $0.41 | 100000 | 50000 | Thursday, April 9, 2026 | 16324 | 4.27 |
| $0.47 | 1100000 | 300000 | Tuesday, April 28, 2026 | 113379 | 4.33 |
| $0.51 | 2300000 | 2300000 | Sunday, July 5, 2026 | 483893 | 4.51 |
| $0.44 | 6396475 | 561787 | Monday, September 21, 2026 | 388428 | 4.73 |
| Total  | 19381819 | 10584631 |  | $2845808 | 3.86 |

---

---

| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br> For the thirteen months ended December 31, 2021 and the year ended November 30, 2020 |
| (Amounts in Canadian dollars) |

---

**16. SHARE BASED PAYMENTS (continued)**

a) Options (continued)

On October 2, 2020, the Company completed a reverse take-over transaction (Note 25) and issued 223,275 replacement options for GameSquare (formerly Magnolia Columbia Ltd.) options outstanding immediately prior to the transaction. The fair market value of the options of $16,030 was estimated using the Black-Scholes option pricing model based on the following weighted average assumptions: share price of $0.187 based on the fair value allocated to the shares in the concurrent private placement financing completed on October 2, 2020, risk free rate of 0.25%, expected volatility of 100%, based on the historical volatility of comparable companies, and an estimated life of 3.07 years and an expected dividend yield of 0%.

On October 13, 2020, 137,931 options with a weighted average exercise price of $0.61 expired, unexercised.

On November 25, 2020, the Company granted 2,000,000 options directors, officers and consultants of the Company. The options vested immediately, have an exercise price of $0.48 and expire on November 25, 2025. The fair market value of the options of $709,953 was estimated using the Black-Scholes option pricing model based on the following weighted average assumptions: share price of $0.48 based on the closing price of the Company's shares on November 24, 2020, risk free rate of 0.45%, expected volatility of 100%, an estimated life of 5 years and an expected dividend yield of 0%.

On January 22, 2021, the Company granted 2,000,000 options to the Chief Executive Officer of the Company. The options vest in equal quarterly instalments over a two-year period. Each option is exercisable at a price of $0.44 per common share and expire January 22, 2026. The fair market value of the options of $360,627 was estimated using the Black-Scholes option pricing model based on the following weighted average assumptions: share price of $0.44 based on the closing price of the Company's shares on January 21, 2021, risk free rate of 0.44%, expected volatility of 52.7%, an estimated life of 5 years and an expected dividend yield of 0%. The fair value of the options is amortized over the vesting period. During the thirteen months ended December 31, 2021, the Company expensed $285,313 in share-based compensation related to the vesting of these options.

On February 24, 2021, the Company granted 500,000 options to consultants of the Company. The options vest in quarterly installments over one year. Each option is exercisable at a price of $0.50 per common share and expire February 19, 2026. The fair market value of the options of $110,384 was estimated using the Black-Scholes option pricing model based on the following weighted average assumptions: share price of $0.50 based on the closing price of the Company's shares on February 23, 2021, risk free rate of 0.73%, expected volatility of 52.9%, an estimated life of 5 years and an expected dividend yield of 0%. The fair value of the options is amortized over the vesting period. During the thirteen months ended December 31, 2021, the Company expensed $106,226 in share-based compensation related to the vesting of these options.

On March 2, 2021, the Company granted 550,000 options to consultants of the Company. 50,000 of the options vest immediately and 500,000 vest in quarterly installments over two years. Each option is exercisable at a price of $0.47 per common share and expire March 2, 2026. The fair market value of the options of $117,368 was estimated using the Black-Scholes option pricing model based on the following weighted average assumptions: share price of $0.47 based on the closing price of the Company's shares on March 1, 2021, risk free rate of 0.78%, expected volatility of 52.6%, an estimated life of 5 years and an expected dividend yield of 0%. The fair value of the options is amortized over the vesting period. During the thirteen months ended December 31, 2021, the Company expensed $89,937 in share-based compensation related to the vesting of these options.

On March 16, 2021, the Company completed the acquisition of Reciprocity (Note 4(b)) and issued 3,000,000 replacement options for Reciprocity options outstanding immediately prior to the transaction. The options are exercisable for one common share of the Company at an exercise price of $0.40 per common share for period of two years from the date of grant. The fair market value of the options of $415,208 was estimated using the Black-Scholes option pricing model based on the following weighted average assumptions: share price of $0.44 based on the closing price of the Company's shares on March 15, 2021, risk free rate of 0.31%, expected volatility of 50.1%, based on the historical volatility of comparable companies, an estimated life of 2 years and an expected dividend yield of 0%.

---

| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br> For the thirteen months ended December 31, 2021 and the year ended November 30, 2020 |
| (Amounts in Canadian dollars) |

---

**16. SHARE BASED PAYMENTS (continued)**

a) Options (continued)

On March 16, 2021, the Company granted 1,000,000 options to a consultant of the Company. The options vest in quarterly installments over one year. Each option is exercisable at a price of $0.44 per common share and expire March 16, 2026. The fair market value of the options of $193,493 was estimated using the Black-Scholes option pricing model based on the following weighted average assumptions: share price of $0.44 based on the closing price of the Company's shares on March 15, 2021, risk free rate of 1.03%, expected volatility of 50.1%, an estimated life of 5 years and an expected dividend yield of 0%. The fair value of the options is amortized over the vesting period. During the thirteen months ended December 31, 2021, the Company expensed $183,553 in share-based compensation related to the vesting of these options.

On March 18, 2021, the Company granted 212,766 options to consultants of the Company. The options vest immediately. Each option is exercisable at a price of $0.47 per common share and expire March 18, 2026. The fair market value of the options of $42,405 was estimated using the Black-Scholes option pricing model based on the following weighted average assumptions: share price of $0.46 based on the closing price of the Company's shares on March 16, 2021, risk free rate of 1.01%, expected volatility of 50.1%, an estimated life of 5 years and an expected dividend yield of 0%. The fair value of the options is amortized over the vesting period. During the thirteen months ended December 31, 2021, the Company expensed $42,405 in share-based compensation related to the vesting of these options.

On April 9, 2021, the Company granted 100,000 options to consultants of the Company. The options vest in quarterly installments over one year. Each option is exercisable at a price of $0.43 per common share and expire April 8, 2026. The fair market value of the options of $17,666 was estimated using the Black-Scholes option pricing model based on the following weighted average assumptions: share price of $0.43 based on the closing price of the Company's shares on April 8, 2021, risk free rate of 0.95%, expected volatility of 46.5%, an estimated life of 5 years and an expected dividend yield of 0%. The fair value of the options is amortized over the vesting period. During the thirteen months ended December 31, 2021, the Company expensed $16,324 in share-based compensation related to the vesting of these options.

On April 28, 2021, the Company granted 1,100,000 options to consultants of the Company. 1,000,000 of the options vest in quarterly installments over two years and 100,000 vest in quarterly installments over one year. Each option is exercisable at a price of $0.47 per common share and expire April 28, 2026. The fair market value of the options of $166,107 was estimated using the Black-Scholes option pricing model based on the following weighted average assumptions: share price of $0.40 based on the closing price of the Company's shares on April 27, 2021, risk free rate of 0.93%, expected volatility of 46.3%, an estimated life of 5 years and an expected dividend yield of 0%. The fair value of the options is amortized over the vesting period. During the thirteen months ended December 31, 2021, the Company expensed $113,379 in share-based compensation related to the vesting of these options.

On April 28, 2021, the Company granted 350,000 options to a consultant of the Company. The options vest in quarterly installments over one year. Each option is exercisable at a price of $0.47 per common share and expire April 28, 2024. The fair market value of the options of $52,853 was estimated using the Black-Scholes option pricing model based on the following weighted average assumptions: share price of $0.40 based on the closing price of the Company's shares on April 27, 2021, risk free rate of 0.48%, expected volatility of 46.3%, an estimated life of 3 years and an expected dividend yield of 0%. The fair value of the options is amortized over the vesting period. During the thirteen months ended December 31, 2021, the Company expensed $47,235 in share-based compensation related to the vesting of these options.

On July 5, 2021, the Company granted 2,300,000 options to a consultant of the Company. Half of the of the options vested immediately and half of the options vest in equal monthly tranches over a six month period commencing July 30, 2021. Each option is exercisable at a price of $0.51 per common share and expire July 5, 2026. The fair market value of the options of $483,893 was estimated using the Black-Scholes option pricing model based on the following weighted average assumptions: share price of $0.51 based on the closing price of the Company's shares on July 5, 2021, risk free rate of 0.99%, expected volatility of 46.6%, an estimated life of 5 years and an expected dividend yield of 0%. The fair value of the options is amortized over the vesting period. During the thirteen months ended December 31, 2021, the Company expensed $483,893 in share-based compensation related to the vesting of these options.

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| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br> For the thirteen months ended December 31, 2021 and the year ended November 30, 2020 |
| (Amounts in Canadian dollars) |

---

**16. SHARE BASED PAYMENTS (continued)**

a) Options (continued)

On September 20, 2021, the Company granted 6,396,475 options to officers, directors and consultants of the Company. 200,000 of the options vest in two equal installments on March 13, 2022 and September 13, 2022, 450,000 of the options vest on March 13, 2022, 100,000 of the options vest on September 13, 2022, 145,000 options vest on December 31, 2021, 500,000 of the options vest in four equal instalments of 125,000 every six months starting on March 13, 2022 and 5,001,475 of the options vest in 35 monthly instalments of 138,929 starting on October 20, 2021 and the remaining 138,960 vesting on September 20, 2024. Each option is exercisable at a price of $0.435 per common share and expire September 21, 2026. The fair market value of the options of $1,138,100 was estimated using the Black-Scholes option pricing model based on the following weighted average assumptions: share price of $0.435 based on the closing price of the Company's shares on September 17, 2021, risk free rate of 0.85%, expected volatility of 46.4%, an estimated life of 5 years and an expected dividend yield of 0%. The fair value of the options is amortized over the vesting period. During the thirteen months ended December 31, 2021, the Company expensed $388,428 in share-based compensation related to the vesting of these options.

b) Restricted share units ("RSU")

On June 4, 2021, the Company adopted a restricted share unit ("RSU") plan (the "RSU Plan"). The Plan provides for the grant of RSUs to employees, officers or directors of the Company and allows the Company the ability to issue on common share from treasury for each RSU held on the vesting date as determined by the board on the date of grant. The aggregate number of shares that may be issuable pursuant to RSUs granted under the Company's RSU Plan together with the Option plan will not exceed 10% of the issued common shares of the Company at the date of grant. The number of shares to be reserved for issue under the RSU Plan together with shares reserved for issuance under the Option Plan to any one person within a twelve-month period may not exceed 5% of the number of shares issued and outstanding.

On June 4, 2021, the Company granted 2,000,000 RSUs to the Company's Chief Executive Officer. 1,000,000 of the RSUs vest immediately and 1,000,000 of the RSUs vest 12 months following the date of grant. The estimated fair value of the RSUs on the date of grant is amortized over the vesting periods. During the thirteen months ended December 31, 2021, the Company recognized an expense of $603,863. On July 6, 2021, 1,000,000 of the RSUs were exercised for 1, 000,000 common shares of the Company.

On July 26, 2021, the Company granted 1,575,000 RSUs to key management of Complexity. Half of the RSUs vest on June 30, 2022 and half vest on June 30, 2023. The estimated fair value of the RSUs on the date of grant is amortized over the vesting periods. During the thirteen months ended December 31, 2021, the Company recognized an expense of $214,791.

On September 20, 2021, the Company granted 2,667,158 RSUs according to the terms of a talent agreement with a consultant of Complexity. 1,000,000 of the RSUs vested on the date of grant, 1,620,815 of the RSUs vest in thirty five equal installments of 46,309 per month starting on October 20, 2021 and the remaining 46,343 vest on September 20, 2021. The estimated fair value of the RSUs on the date of grant is amortized over the vesting periods. During the thirteen months ended December 31, 2021, the Company recognized an expense of $653,732.

As at December 31, 2021, 5,242,158 RSUs were outstanding, of which 1,138,927 were vested.

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| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br> For the thirteen months ended December 31, 2021 and the year ended November 30, 2020 |
| (Amounts in Canadian dollars) |

---

**17. WARRANTS**

The following is a summary of warrants outstanding at December 31, 2021 and November 30, 2020 and changes during the periods then ended.

---

| | | | |
|:---|:---|:---|:---|
|  | **Number of warrants** | **Weighted average exercise prices** | **Grant date fair value** |
| Balance as of December 1, 2019 |  | $- | $- |
| Private placements | 12632900 | 0.40 | 800821 |
| Broker warrants issued | 420000 | 0.40 | 26640 |
| Balance, November 30, 2020 | 13052900 | $0.40 | $827461 |
| Private placements | 30790738 | 0.60 | 1922784 |
| Broker warrants issued | 2823203 | 0.49 | 204006 |
| Warrants exercised | (480000) | 0.40 | (30443) |
| Balance, December 31, 2021 | 46186841 | $0.54 | $2923808 |

---

In connection with the private placement on October 2, 2020 (Note 15(b)), 12,032,900 warrants were issued. Each warrant entitles the holder to purchase one common share of the Company at a price of $0.40 until October 2, 2022. The fair value of the warrants of $762,766, was estimated using the Black-Scholes option pricing model with the following weighted average assumptions: share price of $0.187, expected dividend yield of 0%, expected volatility of 100%, based on the historical volatility of comparable companies, a risk-free interest rate of 0.25% and an expected life of 2 years. In addition, the Company issued 420,000 broker warrants in connection with the financing. The fair value of the broker warrants of $26,640 was estimated using the Black-Scholes option pricing model with the same weighted average assumptions.

In connection with the private placement on November 17, 2020 (Note 15(b)), 600,000 warrants were issued. Each warrant entitles the holder to purchase one common share of the Company at a price of $0.40 until November 17, 2022. The fair value of the warrants of $38,055, was estimated using the Black-Scholes option pricing model with the following weighted average assumptions: share price of $0.187, expected dividend yield of 0%, expected volatility of 100%, based on the historical volatility of comparable companies, a risk-free interest rate of 0.27% and an expected life of 2 years.

In connection with the private placement on February 19, 2021 (Note 15(b)), 1,190,738 warrants were issued. Each warrant entitles the holder to purchase one common share of the Company at a price of $0.60 until February 19, 2024. The fair value of the warrants of $109,470, was estimated using the Black-Scholes option pricing model with the following weighted average assumptions: share price of $0.34, expected dividend yield of 0%, expected volatility of 52.8%, based on the historical volatility of comparable companies, a risk-free interest rate of 0.30% and an expected life of 3 years. In addition, the Company issued 166,703 broker warrants in connection with the financing. The fair value of the broker warrants of $13,333 was estimated using the Black-Scholes option pricing model with the same weighted average assumptions.

In connection with the bought deal private placement on March 4, 2021 (Note 15(b)), 8,350,000 warrants were issued. Each warrant entitles the holder to purchase one common share of the Company at a price of $0.60 until March 4, 2024. The fair value of the warrants of $767,257, was estimated using the Black-Scholes option pricing model with the following weighted average assumptions: share price of $0.42, expected dividend yield of 0%, expected volatility of 52.6%, based on the historical volatility of comparable companies, a risk-free interest rate of 0.48% and an expected life of 3 years. In addition, the Company issued 1,169,000 broker warrants in connection with the financing. The fair value of the broker warrants of $93,436 was estimated using the Black-Scholes option pricing model with the same weighted average assumptions.

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| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br> For the thirteen months ended December 31, 2021 and the year ended November 30, 2020 |
| (Amounts in Canadian dollars) |

---

**17. WARRANTS (continued)**

In connection with the bought deal private placement on July 22, 2021 (Note 15(b)), 21,250,000 warrants were issued. Each warrant entitles the holder to purchase one common share of the Company at a price of $0.60 until July 22, 2023. The fair value of the warrants of $1,045,787, was estimated using the Black-Scholes option pricing model with the following weighted average assumptions: share price of $0.40, expected dividend yield of 0%, expected volatility of 46.6%, based on the historical volatility of comparable companies, a risk-free interest rate of 0.45% and an expected life of 2 years. In addition, the Company issued 1,487,500 broker warrants with exercise prices of $0.40 in connection with the financing. The fair value of the broker warrants of $97,237 was estimated using the Black-Scholes option pricing model with the same weighted average assumptions.

At December 31, 2021, outstanding warrants to acquire common shares of the Company were as follows:

**18. NON-CONTROLLING INTEREST**

On March 16, 2021, the Company acquired all the issued and outstanding common shares of Reciprocity (see Note 4(b)) which holds a 40% interest in Biblos. Subsequent to December 31, 2021, the Company entered into an agreement to sell it's 40% interest in Biblos (see Note 11).

The following summarizes the changes in non-controlling interest in Biblos for the thirteen months ended December 31, 2021:

---

| | |
|:---|:---|
| Balance, December 1, 2020 | $- |
| Non-controlling interest acquired on acquisiton of Reciprocity | (71921) |
| Share of profit for the period | (40901) |
| Balance, December 31, 2021 | $(112822) |

---

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| |
|:---|
| GAMESQUARE ESPORTS INC. <br> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br> For the thirteen months ended December 31, 2021 and the year ended November 30, 2020 |
| (Amounts in Canadian dollars) |

---

**18. NON-CONTROLLING INTEREST**

The following summarizes the information relating to Biblos and related non-controlling interest, before any intercompany eliminations:

---

| | |
|:---|:---|
| NCI percentage | 60% |
| Current assets | $198920 |
| Non-current assets | 803 |
| Current liabilities | (388920) |
| Translation adjustment | 1162 |
| Net Assets | (188035) |
| Carrying amount of NCI | $(112822) |
| Loss for the period | $(68168) |
| Loss allocated to NCI | (40901) |
| Cash flows from operating activities | $9473 |
| Effect of foreign exchange | 494 |
| Net change in cash | $9967 |

---

**19. RELATED PARTY TRANSACTIONS**

Key management personnel compensation:

---

| | | |
|:---|:---|:---|
|  | **Thirteen months ended December 31, 2021** | **Year ended November 30, 2020** |
| Short term employee benefits | $**1429187** | $339000 |
| Share-based payments | **983943** | 319479 |
| Short term employee benefits | $**2413130** | $658479 |

---

During the thirteen months ended December 31, 2021, the Company granted 2,000,000 options to the Chief Executive Officer and 700,000 options to officers of the Company and recorded $380,080 in share-based compensation related to the vesting of these options (see Note 16(a)). In addition, the Company granted 2,000,000 RSUs to the Chief Executive Officer and recorded $603,863 in share-based compensation related to the vesting of these RSUs (see Note 16(b)).

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| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br> For the thirteen months ended December 31, 2021 and the year ended November 30, 2020 |
| (Amounts in Canadian dollars) |

---

**19. RELATED PARTY TRANSACTIONS (continued)**

Other related party transactions:

Included in accounts payable and accrued liabilities at December 31, 2021 is $225,978 (November 30, 2020 - $255,807) owed to the chairman of the board of directors of the Company. This amount is due on demand, unsecured, and non-interest bearing.

See Note 23.

**20. NET LOSS PER SHARE**

**The number of shares used to calculate the diluted net loss per share for the thirteen months ended December 31, 2021included the weighted average number of the Company's common shares outstanding of 156,258,509 (for the year ended November 30, 2020 - 24,995,371), plus nil shares related to the dilutive effect of the conversion of stock options and warrants as they would be anti-dilutive.**

**21. CAPITAL MANAGEMENT**

The Company's primary objective with respect to its capital management is to ensure that it has sufficient cash resources to fund the identification and evaluation of potential acquisitions. To secure the additional capital necessary to pursue these plans, the Company may attempt to raise additional funds through the issuance of equity or by securing strategic partners. The outcome of these activities is uncertain. The Company's capital management objectives, policies and processes have remained unchanged during the thirteen months ended December 31, 2021 and the year ended November 30, 2020.

The Company is not subject to any capital requirements imposed by a lending institution or regulatory body.

**22. FINANCIAL INSTRUMENTS & FINANCIAL RISK MANAGEMENT**

The fair value of the Company's cash, amounts receivable, accounts payable and accrued liabilities approximate carrying value, due to their short-term nature and in consideration of impairments and allowances recorded.

The Company's financial instruments are exposed to certain financial risks including credit risk, liquidity risk, interest rate risk, price risk and currency risk.

**Credit risk**

Credit risk is the risk of an unexpected loss if a customer or a third party to a financial instrument fails to meet its contractual obligations.

The Company is subject to credit risk on its cash and amounts receivable. The carrying amount of amounts receivable represents the maximum credit exposure and reflects management's assessment of the credit risk associated with these parties. The Company's cash and deposits are held with major financial institutions.

**Liquidity risk**

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due.

The Company manages liquidity risk through its capital management as outlined in Note 21.

The Company has planning, budgeting and forecasting processes to help determine its funding requirements to meet various contractual and other obligations. The Company maintained a cash balance as at December 31, 2021 of $7,642,593 (November 30, 2020 - $660,686) in order to settle current liabilities. Most of the Company's short-term financial liabilities have contractual maturities of 30 days or less and are subject to normal trade terms. As at December 31, 2021, the Company had accounts payable and accrued liabilities of $2,796,757 (November 30, 2020 - $845,273).

---

| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br> For the thirteen months ended December 31, 2021 and the year ended November 30, 2020 |
| (Amounts in Canadian dollars) |

---

**22. FINANCIAL INSTRUMENTS & FINANCIAL RISK MANAGEMENT (continued)**

**Market risk**

Market risk is the risk of loss that may arise from changes in market factors such as interest rates and foreign exchange rates.

(a) Interest rate risk

The Company's cash consists of cash held in bank accounts and fixed income investments that earn interest at variable interest rates. Due to the short-term nature of these financial instruments, fluctuations in market rates do not generally have a significant impact on their estimated fair values. Future cash flows from interest income on cash will be affected by interest rate fluctuations. The Company manages interest rate risk by maintaining an investment policy that focuses primarily on preservation of capital and liquidity. The Company's sensitivity analysis suggests that a change in interest rates of 1% would increase or decrease net income by approximately $76,426.

(b) Currency risk

Currency risk exposures arise from transactions denominated in a foreign currency and exposure as a result of the Company's investment in its foreign subsidiary. Fluctuations in exchange rates may have a significant effect on the cash flows of the Company. Future changes in exchange rates could materially affect the Company's results in either a positive or negative direction.

The Company's functional currency is the Canadian dollar. The Company is affected by currency transaction and translation risk primarily with respect to the GBP and the U.S. dollar ("USD"). Consequently, fluctuations in the Canadian dollar currency against these currencies could have a material impact on the Company's business, financial condition, and results of operations. The Company does not engage in hedging activity to mitigate this risk.

The following summary illustrates the fluctuations in the exchange rates applied during the thirteen months ended December 31, 2021:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Average rate** | **Average rate** | **Closing rate** | **Closing rate** |
| USD |  | 1.2556 |  | 1.2678 |
| GBP |  | 1.7243 |  | 1.7132 |

---

A $0.01 strengthening or weakening of the U.S. dollar against the Canadian dollar at December 31, 2021 would result in an increase or decrease in operating loss of $6,404. A $0.01 strengthening or weakening of the GBP against the Canadian dollar would result in an increase or decrease in other comprehensive income of approximately $23,037. A $0.01 strengthening or weakening of the U.S. dollar against the Canadian dollar would result in an increase or decrease in other comprehensive income of approximately $182,514.

**23. CONTINGENCIES AND COMMITMENTS**

**Management Commitments**

The Company is party to certain management contracts. These contracts require payments of approximately $1,761,000 to be made upon the occurrence of a change in control to the officers of the Company. The Company is also committed to payments upon termination of approximately $1,093,000 pursuant to the terms of these contracts. As a triggering event has not taken place, these amounts have not been recorded in these consolidated financial statements.

**Former Activities**

The Company was previously involved in oil and gas exploration activities in Canada, the United States and Colombia. The Company ceased all direct oil and gas exploration activities in 2014. While management estimated that the exposure to additional liabilities from its former oil and gas activities over and above the reclamation provision accrued in these consolidated financial statements to be remote, the outcome of any such contingent matters is inherently uncertain.

---

| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br> For the thirteen months ended December 31, 2021 and the year ended November 30, 2020 |
| (Amounts in Canadian dollars) |

---

**23. CONTINGENCIES AND COMMITMENTS (continued)**

**Legal Matters** 

From time to time, the Company is named as a party to claims or involved in proceedings, including legal, regulatory and tax related, in the ordinary course of its business. While the outcome of these matters may not be estimable at period end, the Company makes provisions, where possible, for the estimated outcome of such claims or proceedings. Should a loss result from the resolution of any claims or proceedings that differs from these estimates, the difference will be accounted for as a charge to net income (loss) in that period.

**Novel Coronavirus** 

The Company's operations could be significantly adversely affected by the effects of a widespread global outbreak of a contagious disease, including the respiratory illness caused by COVID-19. The Company cannot accurately predict the impact COVID-19 will have on its operations and the ability of others to meet their obligations with the Company, including uncertainties relating to the ultimate geographic spread of the virus, the severity of the disease, the duration of the outbreak, and the length of travel and quarantine restrictions imposed by governments of affected countries. In addition, a significant outbreak of contagious diseases in the human population could result in a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could further affect the Company's operations and ability to finance its operations.

**Government Assistance Loans**

On May 27, 2020, the Company received a $40,000 Canada Emergency Business Account ("CEBA") loan from the Government of Canada via its commercial bank. On January 11, 2021, the Company received an additional $20,000 increasing the loan to $60,000. The loan was interest free until December 31, 2022 and matured on December 31, 2025. If $40,000 loan is repaid by December 31, 2022, the remaining $20,000 will be forgiven. If the loan is not repaid by December 31, 2022, interest at 5% will be charged per annum commencing on January 1, 2023 until maturity on December 31, 2025. The loan is unsecured. On October 8, 2021, the Company repaid $40,000 of the loan and on November 30, 2021, the remaining $20,000 was forgiven. The gain on the loan forgiveness is included in salaries, consulting and management fees in the consolidated statements of loss.

On June 30, 2021, the Company acquired Complexity (see Note 4(c)). Complexity had a Paycheck Protection Program ("PPP") loan from J.P. Morgan in the amount of $631,906 (USD$501,473) under the PPP established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The loan was subject to a note dated April 15, 2020 and may be forgiven to the extent proceeds of the loan are used for eligible expenditures such as payroll and other expenses described in the CARES Act. The loan expires in two years from drawn down date. On July 15, 2021, the Company received full forgiveness of the balance. The gain on the loan forgiveness is included in salaries, consulting and management fees in the consolidated statements of loss.

**24. REVENUE AND SEGMENTED INFORMATION**

IFRS 8 requires operating segments to be determined based on the Company's internal reporting to the Chief Operating Decision Maker ("CODM"). The CODM has been determined to be the Company's managing director as he is primarily responsible for the allocation of resources and the assessment of performance. The CODM uses net income, as reviewed at periodic business review meetings, as the key measure of the Company's results as it reflects the Company's underlying performance for the period under evaluation.

The CODM's primary focus for review and resource allocation is the Company as a whole and not any component part of the business. Having considered these factors, management has judged that the Company having two operating segments under IFRS 8.

---

| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br> For the thirteen months ended December 31, 2021 and the year ended November 30, 2020 |
| (Amounts in Canadian dollars) |

---

**24. REVENUE AND SEGMENTED INFORMATION (continued)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Thirteen months ended December 31, 2021** | **Thirteen months ended December 31, 2021** | | | | |
|  | **Europe** | **USA** | **Canada** | **Mexico** | **Total** |
| Revenue channel | **$**  | **$** | **$**  | **$** | **$** |
| &nbsp;&nbsp;&nbsp;&nbsp; Sponsorship |  | 1482499 |  |  | 1482499 |
| &nbsp;&nbsp;&nbsp;&nbsp; Winning/Player buyout/Other | - | 1258047 | - | 265034 | 1523081 |
| Total Team Revenue |  | 2740546 |  | 265034 | 3005580 |
| &nbsp;&nbsp;&nbsp;&nbsp; Cost of Sales | - | 2647056 | - | 241701 | 2888757 |
| Gross profit | - | 93490 | - | 23333 | 116823 |
| &nbsp;&nbsp;&nbsp;&nbsp; Influencer / on screen talent representation | 5707071 |  |  |  | 5707071 |
| Digital media and marketing | - | 4975238 | - | - | 4975238 |
| Total Agency Revenue | 5707071 | 4975238 |  |  | 10682309 |
| &nbsp;&nbsp;&nbsp;&nbsp; Cost of sales | 4384258 | 1977616 | - | - | 6361874 |
| Gross profit | 1322813 | 2997622 | - | - | 4320435 |
| Non-current assets | 1236690 | 16267137 | 340444 | 36900 | 17881171 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Year ended November 30, 2020** | | | | | |
|  | **Europe** | **USA** | **Canada** | **Mexico** | **Total** |
| Revenue channel | **$** | **$** | **$** | **$** | **$** |
| &nbsp;&nbsp;&nbsp;&nbsp; Influencer / on screen talent representation | 488774 |  | - |  | 488774 |
| Total Agency Revenue | 488774 |  |  |  | 488774 |
| &nbsp;&nbsp;&nbsp;&nbsp; Cost of sales | 331228 |  | - |  | 331228 |
| Gross profit | 157546 |  | - |  | 157546 |
| Non-current assets | 4621095 |  | 338606 |  | 4959701 |

---

Substantially all of the Company's revenues are recognized as services are rendered throughout the term of the contract for the thirteen months ended December 31, 2021.

During the thirteen months ended December 31, 2021, revenues from customers that amounted to more than 5% of the Company's revenues accounted for the following percentage of the Company's total revenues and amounts receivable, as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Thirteen months ended December 31, 2021**  | **Thirteen months ended December 31, 2021**  | **Thirteen months ended December 31, 2021**  |
|  | **$ of revenues for the period**  | **% of revenues for the period**  | **% of amounts recevable at period end**  |
| Customer 1 | 751457 | 5% | 1% |
| Customer 2 | 629654 | 5% | 2% |
| Customer 3 | 999757 | 7% | 2% |
| Customer 4 | 783759 | 6% | 4% |
| Customer 5 | 812305 | 6% | 3% |
| Customer 6 | 772895 | 6% | 2% |

---

---

| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br> For the thirteen months ended December 31, 2021 and the year ended November 30, 2020 |
| (Amounts in Canadian dollars) |

---

**25. REVERSE TAKEOVER TRANSACTION**

On October 2, 2020 the Company completed a reverse takeover transaction ("RTO Transaction"). The RTO Transaction was structured as a three-cornered amalgamation, pursuant to which 2631443 Ontario Inc. ("Subco"), a wholly-owned subsidiary of the Company, and GameSquare Inc. amalgamated (the "Amalgamation") to form a newly amalgamated company ("GameSquare (Ontario)"). Prior to the completion of the Amalgamation, the existing common shares in the capital of the Company (the "GameSquare Shares") were consolidated on a 5.8 to 1 basis resulting in 9,996,011 GameSquare Shares outstanding post consolidation. Pursuant to the Amalgamation, former holders of common shares of GameSquare Inc. (the "Target Shares") received one post-consolidation share of the Company for each Target Share held and GameSquare (Ontario) became a wholly-owned subsidiary of the Company.

Immediately following the completion of the Amalgamation, the Company was the parent and the sole shareholder of GameSquare (Ontario). On December 1, 2020, the Company completed the amalgamation of GameSquare (Ontario) and GameSquare. The amalgamated company will carry on the business of GameSquare Inc. under the name "Gamesquare Esports Inc."

The Common Shares were delisted from the TSX Venture Exchange ("TSX-V") effective September 30, 2020 and commenced trading on the Canadian Securities Exchange ("CSE") on Tuesday, October 13, 2020 under the symbol "GSQ".

Pursuant to the RTO Transaction, the fiscal year-end of the Company was changed to November 30, 2020, being the fiscal year end of Gamesquare Inc.

The transaction is assumed to constitute an asset acquisition as GameSquare (formerly Magnolia Columbia Ltd.) did not meet the definition of a business. The assets acquired and liabilities assumed were recorded at their estimated fair values, which are based on management's estimates.

**Purchase price consideration paid**:

---

| | |
|:---|:---|
| **Purchase Price Consideration Paid** |  |
| Estimated fair value of shares issued (i) | $1865356 |
| Estimated fair value of options issued (ii) | 16030 |
|  | $1881386 |

---

---

| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br> For the thirteen months ended December 31, 2021 and the year ended November 30, 2020 |
| (Amounts in Canadian dollars) |

---

**25. REVERSE TAKEOVER TRANSACTION (continued)**

**Net assets acquired (GameSquare at October 2, 2020):**

---

| | |
|:---|:---|
| Cash | $226213 |
| Trade Receivables | 37492 |
| Amounts receivable | 181606 |
| Prepaids | 77320 |
| Reclamation deposits | 336710 |
| Other investments | 62635 |
| Accounts payable and accruals | (342520) |
| Loan | (40000) |
| Reclamation provision | (317625) |
| Common shares to be issued | (157985) |
|  | 63846 |
| Excess of purchase price over fair value | 1817540 |
| of assets acquired (expensed) |  |
|  | $1881386 |

---

(i) The estimated fair value of the shares issued was based on the financing price as completed by GameSquare on October 2, 2020 at $0.25 per unit (allocated 18.7 cents to the common shares and 6.3 cents to the warrants) and considering the exchange ratio of 5.8 to 1.

(ii) The estimated fair value of 223,275 options issued with a weighted average exercise price of $0.60 was estimated using the Black-Scholes option pricing model based on the following weighted average assumptions: risk free rate of 0.25%, expected volatility of 100%, based on historical volatility of comparable companies, and an estimated life of 3.07 years and an expected dividend yield of 0%.

**26. SUBSEQUENT EVENTS**

On March 23, 2022, the Company granted 950,000 options to a consultant of the Company with exercise prices of $0.35 per common share and an expiry date of March 23, 2027. In addition, the Company granted 800,000 RSUs to the same consultant.

On April 5, 2022, the Company announced a fully subscribed US$3 million non-brokered private placement. As of the date of these financial statements, the private placement had not closed.

The Company also entered into a US$5 million credit facility which will provide the Company with access to capital, if required, to execute on its strategic priorities. The credit agreement will become available for draw down after satisfaction of certain conditions precedent.

On April 14, 2022, the Company entered into an agreement with a private company to sell its investment in Irati for $62,635 or $0.05 per common share of Irati.

## Exhibit 99.2

**EXHIBIT 99.2**

**Consent of Independent Auditor**

We hereby consent to the incorporation by reference into Amendment No. 1 to the Registration Statement on Form F-10 (File No.333-254709) of Engine Gaming and Media, Inc. (formerly, Engine Media Holdings, Inc.) (the "Company") of our name and to the use of our report dated April 28, 2022, included in the Annual Report on Form 20-F dated May 2, 2022 (the "Form 20-F") of GameSquare Esports Inc. ("GameSquare") filed by the Company with the United States Securities and Exchange Commission, on the consolidated statement of financial position of GameSquare as of December 31, 2021 and November 30, 2020, and the related consolidated statements of loss and comprehensive loss, consolidated statements of changes in shareholders' equity, and consolidated statements of cash flows for each of the years in the three year-period ended December 31, 2021 and the related notes thereto.

Sincerely,

---

| |
|:---|
| /s/ Kreston GTA LLP  |
| Chartered Professional Accountants,<br> Licensed Public Accountants |
| Markham, Canada<br> March 31, 2023 |

---

## Exhibit 99.3

EXHIBIT 99.3

**GameSquare Esports Inc.'s condensed interim consolidated financial statements for the three and nine months ended September 30, 2022 and August 31, 2021 are being refiled to remove the "Notice of No Auditor Reviewed of Condensed Consolidated Interim Financial Statements" as the financial statements have now been reviewed and to add disclosure under Note 19 - Subsequent Events for the disclosure of transactions subsequent to the original filing date. No other changes were made to the document.**

**GAMESQUARE ESPORTS INC.**

**CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS**

**For the three and nine months ended September 30, 2022** 

**and the three and nine months ended August 31, 2021**

**(Unaudited)**

**GAMESQUARE ESPORTS INC.** 

**CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION**

**(Unaudited)**

---

| | | | |
|:---|:---|:---|:---|
| *($ U.S. dollars)*  | **September 30, 2022** | **December 31, 2021** | November 30, 2020 |
|  |  | (Restated - Note 3) | (Restated - Note 3) |
| **ASSETS** |  |  |  |
| **Current** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Cash  | $**4023102** | $**6028232** | $509592 |
| &nbsp;&nbsp;&nbsp;&nbsp; Amounts receivable (Note 5) | **7695456** | **3085375** | 294446 |
| &nbsp;&nbsp;&nbsp;&nbsp; Prepaid expenses and deposits | **601446** | **304180** | 84182 |
| &nbsp;&nbsp;&nbsp;&nbsp; Other investments | **-** | **-** | 48311 |
| &nbsp;&nbsp;&nbsp;&nbsp; Other current assets (Note 8) | **581648** | **306419** |  |
| Total current assets | **12901652** | **9724206** | 936531 |
| **Long-term** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Equipment (Note 6) | **3166116** | **3628758** | 1094 |
| &nbsp;&nbsp;&nbsp;&nbsp; Intangibles (Note 7) | **5639433** | **7366442** | 1821494 |
| &nbsp;&nbsp;&nbsp;&nbsp; Goodwill (Note 7) | **-** | **-** | 1741696 |
| &nbsp;&nbsp;&nbsp;&nbsp; Right-of-use asset (Note 11) | **2479488** | **2761961** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Reclamation deposits | **-** | **268531** | 261169 |
| &nbsp;&nbsp;&nbsp;&nbsp; Non-current assets held for sale (Note 9) | **-** | **78510** |  |
| Total assets | $**24186689** | $**23828408** | $4761984 |
| **LIABILITIES** |  |  |  |
| **Current** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Accounts payable and accrued liabilities (Note 16) | $**6014344** | $**2205991** | $651966 |
| &nbsp;&nbsp;&nbsp;&nbsp; Deferred revenue | **1218996** | **327045** | 80702 |
| &nbsp;&nbsp;&nbsp;&nbsp; Current portion of lease liability (Note 11) | **327239** | **301354** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Loan payable (Note 10) | **-** | **120133** |  |
| Total current liabilities | **7560579** | **2954523** | 732668 |
| &nbsp;&nbsp;&nbsp;&nbsp; Deferred consideration on acquisition of Code Red (Note 4(a)) | **-** | **-** | 258388 |
| &nbsp;&nbsp;&nbsp;&nbsp; Long term loan | **-** | **-** | 30852 |
| &nbsp;&nbsp;&nbsp;&nbsp; Lease liability, net of current portion (Note 11) | **2449672** | **2698677** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Reclamation provision | **-** | **255508** | 249852 |
| &nbsp;&nbsp;&nbsp;&nbsp; Deferred tax liability | **203058** | **274458** | 357887 |
| Total liabilities | **10213309** | **6183166** | 1629647 |
| **SHAREHOLDERS' EQUITY** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Common shares (Note 12(b)) | **43397170** | **36218116** | 4764970 |
| &nbsp;&nbsp;&nbsp;&nbsp; Share based payments reserve (Note 13) | **2903091** | **3101014** | 552752 |
| &nbsp;&nbsp;&nbsp;&nbsp; Contingently issuable shares (Notes 4(b) and 4(d)) | **52662** | **52662** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Warrants (Note 14) | **2497376** | **2287484** | 622155 |
| &nbsp;&nbsp;&nbsp;&nbsp; Accumulated other comprehensive income | **(371321)** | **135981** | 86380 |
| &nbsp;&nbsp;&nbsp;&nbsp; Accumulated deficit | **(34505598)** | **(24059541)** | (2893920) |
| &nbsp;&nbsp;&nbsp;&nbsp; Equity attributable to owners of the parent | **13973380** | **17735716** | 3132337 |
| &nbsp;&nbsp;&nbsp;&nbsp; Non-controlling interest (Note 15) | **-** | **(90474)** |  |
| Total Shareholders' Equity | **13973380** | **17645242** | 3132337 |
| Total liabilities and shareholders' equity  | $**24186689** | $**23828408** | $4761984 |

---

Nature of operations and going concern (Note 1)

Contingencies and commitments (Notes 1 and 17)

Subsequent events (Note 19)

Approved by the Board of Directors on January 20, 2023

<u>"*KEVIN WRIGHT*"</u>, Director <u>"*Paul Lebreux*"</u>, Director

*See accompanying notes to the condensed interim consolidated financial statements.*

**GAMESQUARE ESPORTS INC.** 

**CONDENSED INTERIM CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS**

**(Unaudited)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended** | Three months ended | **Nine months ended** | Nine months ended |
| *($ U.S. dollars)*  | **September 30, 2022** | August 31, 2021 | **September 30, 2022** | August 31, 2021 |
|  |  | (Restated - Note 3) |  | (Restated - Note 3) |
| **Revenue** | $**10133280** | $1979031 | $**21829246** | 3692301 |
| Cost of sales | **6547235** | 1422408 | **13580839** | 2823864 |
| Gross profit (Note 18) | **3586045** | 556623 | **8248407** | 868437 |
| **Other income** |  |  |  |  |
| Interest and other income | **1512** | 2521 | **6053** | 3287 |
| Total other income | **1512** | 2521 | **6053** | 3287 |
| **Expenses** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Salaries, consulting and management fees (Note 16) | **2413028** | 1244060 | **7442140** | 2717564 |
| &nbsp;&nbsp;&nbsp;&nbsp; Player compensation | **426705** | 290383 | **1315745** | 290139 |
| &nbsp;&nbsp;&nbsp;&nbsp; Professional fees | **437672** | 399892 | **1425585** | 734914 |
| &nbsp;&nbsp;&nbsp;&nbsp; General office expenses | **301738** | 167445 | **1155941** | 523653 |
| &nbsp;&nbsp;&nbsp;&nbsp; Selling and marketing expenses | **2780025** | 860106 | **3239090** | 876512 |
| &nbsp;&nbsp;&nbsp;&nbsp; Travel expenses | **361724** | 189486 | **799496** | 288026 |
| &nbsp;&nbsp;&nbsp;&nbsp; Shareholder communications and filing fees | **12454** | 33585 | **101994** | 130554 |
| &nbsp;&nbsp;&nbsp;&nbsp; Interest expense | **56885** | 127493 | **276238** | 129475 |
| &nbsp;&nbsp;&nbsp;&nbsp; Bad debt expense | **114750** | (1898) | **114750** | 45064 |
| &nbsp;&nbsp;&nbsp;&nbsp; Foreign exchange loss | **(20695)** | 10606 | **(66675)** | 5566 |
| &nbsp;&nbsp;&nbsp;&nbsp; Change in provision for reclamation deposit | **15403** |  | **15403** | (75119) |
| &nbsp;&nbsp;&nbsp;&nbsp; Share-based compensation (Note 13) | **265105** | 1351213 | **1206332** | 1954369 |
| &nbsp;&nbsp;&nbsp;&nbsp; Transaction costs | **-** | 4718091 | **-** | 12057971 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gain on disposition of assets available for sale (Note 9) | **(46915)** |  | **(46915)** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Amortization (Notes 6, 7 and 11) | **669490** | 1579167 | **2030108** | 2261824 |
| Total expenses | **7787369** | 10969629 | **19009232** | 21940512 |
| Loss for the period before income taxes | **(4199812)** | (10410485) | **(10754772)** | (21068788) |
| Income tax (recovery) | **(17770)** | (141975) | **(54276)** | (323381) |
| Loss for the period | **(4182042)** | (10268510) | **(10700496)** | (20745407) |
| **Other comprehensive loss** |  |  |  |  |
| *Items that will subsequently be reclassified to operations:* |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Foreign currency translation | **(372085)** | (100095) | **(507302)** | 220537 |
| **Total comprehensive loss for the period** | $**(4554127)** | $(10368605) | $**(11207798)** | $(20524870) |
| **(Loss) profit for the period attributable to:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Owners of the parent | **(4182042)** | (10294076) | **(10714214)** | (20775628) |
| &nbsp;&nbsp;&nbsp;&nbsp; Non-controlling interest | **-** | 25566 | **13718** | 30221 |
|  | $**(4182042)** | $(10268510) | $**(10700496)** | $(20745407) |
| Basic and diluted net loss per share | $**(0.02)** | $(0.05) | $**(0.04)** | $(0.18) |
| Weighted average number of common shares outstanding - basic and diluted | **272426342** | 191051221 | **255057363** | 117061379 |

---

*See accompanying notes to the condensed interim consolidated financial statements.*

**GAMESQUARE ESPORTS INC.** 

**CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY**

**(Unaudited)**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| ***($ U.S. dollars)***  | | | | | | | | |
|  |<br>**Share Capital**  |<br>**Contributed Surplus** |<br>**Warrants**  |<br>**Contingently Issuable Shares and Options** |<br>**Accumulated other comprehensive income** |<br>**Non-Controlling Interest**  |<br>**Accumulated Deficit**  | **Shareholders'**<br> **Equity** |
|  | **$** | **$** | **$** | **$** | **$** | **$** | **$** | **$** |
| Balance, January 1, 2022 (Restated - Note 3) |  |  | 2287484 | 52662 |  |  |  |  |
| Private placements (Note 12(b)) |  |  | 140677 |  |  |  |  |  |
| Share issuance costs (Note 12(b))  |  |  |  |  |  |  |  |  |
| Options granted (Note 13(a))  |  |  |  |  |  |  |  |  |
| Options expired (Note 13(a))  |  |  |  |  |  |  |  |  |
| Restricted share units (Note 13(b))  |  |  |  |  |  |  |  |  |
| Restricted share units exercised (Note 13(b))  |  |  |  |  |  |  |  |  |
| Warrants issued for credit facility  |  |  | 69215 |  |  |  |  |  |
| Non-controlling interest on sale of Biblos  |  |  |  |  |  |  |  |  |
| Other comprehensive income  |  |  |  |  |  |  |  |  |
| Net (loss) for the period  |  |  | - | - |  |  |  |  |
| **Balance, September 30, 2022**  |  |  | **2497376** | **52662** |  |  |  |  |
| Balance, December 1, 2020 (Restated - Note 3)  |  |  | 622155 |  |  |  |  |  |
| Issued on acquisiton of Reciprocity  |  |  |  | 213244 |  |  |  |  |
| Non-controlling interest acquired on acquisition of Reciprocity  |  |  |  |  |  |  |  |  |
| Contingent consideration on acquisition of Cut&Sew (Note 4(d))  |  |  |  | 25679 |  |  |  |  |
| Issued on acquisition of Complexity (Note 4(c))  |  |  |  |  |  |  |  |  |
| Issued on acquisition of Cut&Sew (Note 4(d))  |  |  |  |  |  |  |  |  |
| Private placements (Note 12(b))  |  |  | 3718077 |  |  |  |  |  |
| Share issuance costs (Note 12(b))  |  |  | 469405 |  |  |  |  |  |
| Options granted (Note 13(a))  |  |  |  |  |  |  |  |  |
| Option exercise  |  |  |  |  |  |  |  |  |
| Restricted share units (Note 13(b))  |  |  |  |  |  |  |  |  |
| RSUs exercised (Note 13(b))  |  |  |  |  |  |  |  |  |
| Other comprehensive income  |  |  |  |  |  |  |  |  |
| Net (loss) for the period  |  |  | - | - |  |  |  |  |
| **Balance, August 31, 2021**  |  |  | **4809637** | **238923** |  |  |  |  |

---

*See accompanying notes to the condensed interim consolidated financial statements.*

**GAMESQUARE ESPORTS INC.**

**CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
| *($ U.S. dollars)* | **Nine months ended September 30, 2022** | Nine months ended August 31, 2021 |
| CASH (USED IN) PROVIDED BY: |  | (Restated - Note 3) |
| OPERATING ACTIVITIES |  |  |
| Net (loss) | $**(10700496)** | $(20745407) |
| Adjustment for: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Income tax recovery | **(54276)** | (323381) |
| &nbsp;&nbsp;&nbsp;&nbsp; Transaction costs | **-** | 10466656 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gain on disposition of assets available for sale (Note 9) | **(46915)** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Share-based compensation (Note 13) | **1206332** | 1954369 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gain on forgiveness of small business loan | **-** | (501473) |
| &nbsp;&nbsp;&nbsp;&nbsp; Interest expense (Notes 10 and 11) | **276232** | 122904 |
| &nbsp;&nbsp;&nbsp;&nbsp; Change in provision for reclamation deposit | **15403** | (75119) |
| &nbsp;&nbsp;&nbsp;&nbsp; Amortization (Notes 6, 7 and 11) | **2030108** | 2267774 |
| &nbsp;&nbsp;&nbsp;&nbsp; Bad debt | **114750** |  |
|  | **(7158862)** | (6833677) |
| Net change in non-cash working capital | **(523535)** | (52364) |
| Net cash flow from operating activities | **(7682397)** | (6886041) |
| FINANCING ACTIVITIES |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Proceeds received from long term loan (Note 17) | **-** | 15692 |
| &nbsp;&nbsp;&nbsp;&nbsp; Repayment of loans (Notes 10 and 17) | **(149442)** | (387500) |
| &nbsp;&nbsp;&nbsp;&nbsp; Principal reduction in lease liability (Note 11) | **(400828)** | (88125) |
| &nbsp;&nbsp;&nbsp;&nbsp; Private placement (Note 12(b)) | **6303211** | 19870806 |
| &nbsp;&nbsp;&nbsp;&nbsp; Share issue costs (Note 12(b)) | **(42822)** | (1527362) |
| &nbsp;&nbsp;&nbsp;&nbsp; Proceeds from option exercise | **-** | 83684 |
| Net cash flow from financing activities | **5710119** | 17967195 |
| INVESTING ACTIVITIES |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Cash acquired on acquisition of Reciprocity | **-** | 414481 |
| &nbsp;&nbsp;&nbsp;&nbsp; Cash acquired on acquisition of Complexity | **-** | 434392 |
| &nbsp;&nbsp;&nbsp;&nbsp; Acquistion of Cut &Sew shares | **-** | (2385000) |
| &nbsp;&nbsp;&nbsp;&nbsp; Cash acquired on acquisition of Cut & Sew | **-** | 315035 |
| &nbsp;&nbsp;&nbsp;&nbsp; Cash received on sale of assets held for sale | **49356** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Equipment purchase (Note 6) | **(31264)** | (21682) |
| Net cash flow from investing activities | **18092** | (1242774) |
| Effect of exchange rate changes on cash | **(50944)** | 18369 |
| CHANGE IN CASH  | **(2005130)** | 9856749 |
| CASH, beginning of the period | **6028232** | 509592 |
| CASH, end of the period | $**4023102** | $10366341 |
| SUPPLEMENTAL INFORMATION: |  |  |
| Value of shares issued on acquisition of Reciprocity  | **-** | 9852217 |
| Value of options issued on acquisition of Reciprocity  | **-** | 577301 |
| Value of shares issued on acquisiton of Cut & Sew | **-** | 416531 |
| Value of shares issued on acquistion of Complexity | **-** | 17368154 |
| Value of broker warrants issued (Note 14) | **-** | 469405 |
| Value of warrants issued for credit facility | **69215** |  |
| Right of use asset and lease liability at modification of lease | **-** | 1738076 |
| Interest paid | **11948** | 6571 |

---

*See accompanying notes to the condensed interim consolidated financial statements.*

---

| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS<br> For the three and nine months ended September 30, 2022 and the three and nine months ended August 31, 2021 |
| (Amounts in U.S. dollars) |

---

**1. NATURE AND CONTINUANCE OF OPERATIONS**

GameSquare Esports Inc. (formerly Magnolia Colombia Ltd.) (the "Company" or "GameSquare") was incorporated under the Ontario Business Corporations Act on June 01, 2009. The Company is a publicly traded company with the registered office located at 150 York Street, Suite 1008, Toronto, Ontario, M5H 3S5, Canada.

GameSquare is focused on esports market. The Company bridges the gap between global brands and the gaming and esports communities. GameSquare does this by signing talent in the influencer, on-screen talent and player categories as well as adding new companies to its roster of global brand relationships. On October 2, 2020, the Company completed a reverse acquisition with GameSquare (Ontario) Inc., which acquired all the outstanding shares of Code Red Esports Ltd. ("Code Red") on the same day. On December 1, 2020, the Company completed the amalgamation with GameSquare (Ontario) Inc. On March 16, 2021, the Company acquired all the outstanding shares of Reciprocity Corp. ("Reciprocity"), which owned 100% of common shares of GCN Inc. ("GCN"), 100% of common shares of GameSquare Esports (USA) Inc. and 40% of the common shares of Biblos Gaming S.A. de C.V. ("Biblos"). On June 30, 2021, the Company acquired all the outstanding shares of NextGen Tech, LLC (dba. Complexity Gaming) ("Complexity"). On July 27, 2021, the Company acquired 100% of the outstanding shares of Swingman LLC. (dba Cut+Sew and Zoned) ("Cut+Sew"). The Company is traded on the Canadian Securities Exchange (CSE) under the symbol "GSQ" and on the OTCQB Venture Market in the Unites States under the symbol "GMSQF".

These condensed interim consolidated financial statements include the accounts of the Company and its subsidiaries listed in the following table:

---

| | | | | |
|:---|:---|:---|:---|:---|
| <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Name of Subsidiary** | **Country of**<br>**Incorporation** | **Functional**<br>**Currency** | **Ownership Percentage** | **Ownership Percentage** |
|  |  |  | **September 30,** | **December 31,** |
|  |  |  | **2022** | **2021** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Code Red Esports Ltd. ("Code Red") | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; England and Wales | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; UK pound sterling | 100% | 100% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Stetson Oil & Gas Corporation | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; USA | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Canadian Dollar | NA | NA |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; GameSquare (Ontario) Inc. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Canada | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Canadian Dollar | NA | NA |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; GameSquare Esports (USA) Inc.  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; USA | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; U.S. Dollar | 100% | 100% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Biblos Gaming S.A. de C.V. ("Biblos") | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Mexico | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Mexican Peso | NA | 40% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; GCN Inc. ("GCN") | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; USA | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; U.S. Dollar | 100% | 100% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NextGen Tech, LLC (dba as Complexity Gaming) ("Complexity") | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; USA | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; U.S. Dollar | 100% | 100% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Swingman LLC. (dba Cut+Sew and Zoned) ("Cut+Sew") | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; USA | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; U.S. Dollar | 100% | 100% |

---

On May 3, 2021, Stetson Oil & Gas Corporation was dissolved. On December 1, 2021, the Company and Reciprocity were amalgamated. During the nine months ended September 30, 2022, the Company sold its 40% interest in Biblos.

The accompanying condensed consolidated financial statements were prepared on a going concern basis, which contemplates the realization of assets and the payment of liabilities in the ordinary course of business. Accordingly, the condensed interim consolidated financial statements do not give effect to adjustments that would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and meet its liabilities and commitments in other than the normal course of business and at amounts different from those in the consolidated financial statements. Such adjustments could be material.

As at September 30, 2022, the Company had working capital of $5,341,073 (December 31, 2021 – $6,769,683). On June 30, 2022, the Company entered into an agreement for a US$5 million credit facility for a one-year term, subject to extension, which will provide the Company with access to capital, if required, to execute on its strategic priorities. As at September 30, 2022, the Company had not drawn down on the credit facility. The Company's continuation as a going concern is dependent upon its ability to raise equity capital or borrowings sufficient to meet current and future obligations and ultimately achieve profitable operations. Management intends to finance operating costs over the next twelve months with issuance of common shares, loans, draw downs on its credit facility or profits from its business activities. There is no assurance that the Company will be able to obtain such financings or obtain them on favorable terms. These matters represent material uncertainties that cast significant doubt on the Company's ability to continue as a going concern.

---

| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS<br> For the three and nine months ended September 30, 2022 and the three and nine months ended August 31, 2021 |
| (Amounts in U.S. dollars) |

---

**2. BASIS OF PRESENTATION**

The accompanying condensed interim consolidated financial statements have been prepared by management in conformity with IAS 34, *Interim Financial Reporting* and do not include all the disclosures required in full annual financial statements in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). These condensed interim consolidated financial statements should be read in conjunction with the Company's consolidated financial statements for the thirteen months ended December 31, 2021.

The condensed interim consolidated financial statements were authorized for issue by the Board of Directors on November 14, 2022.

**3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

**Significant accounting policies**

The unaudited condensed interim consolidated financial statements were prepared using the same accounting policies and methods as those used in the Company's consolidated financial statements for the thirteen months ended December 31, 2021, with the exception of the following new accounting standards and change in presentation currency noted below.

**Change in presentation currency**

On January 1, 2022, the Company elected to change its presentation currency from Canadian dollars ("CAD") to United States dollars ("U.S. dollars" or "USD"). The change in presentation currency is to better reflect the Company's business activities and to improve investors' ability to compare the Company's financial results with other publicly traded businesses in similar industries. The Company applied the change to U.S. dollar presentation currency retrospectively and restated the comparative financial information as if U.S. dollars had always been the Company's presentation currency.

The functional currency of GameSquare is the Canadian dollar, and the functional currency of the Company's subsidiaries are listed in the table in Note 1. For periods prior to January 1, 2022, the statements of financial position for each period presented have been translated from the functional currency of the Company and each of its subsidiaries to U.S. dollar at the rate of exchange prevailing at the respective financial position date with the exception of equity items which have been translated at the exchange rate prevailing at the date of the transaction. The statements of loss and comprehensive income (loss) were translated at the average exchange rates for the respective reporting periods. Exchange differences arising on translation from the functional currency to the U.S. dollar have been recorded in accumulated other comprehensive income (loss) in the shareholders' equity.

**4. ACQUISITIONS**

**a) Acquisition of Reciprocity**

On March 16, 2021, the Company acquired 100% of the outstanding shares of Reciprocity, a privately held gaming and esports company. Reciprocity owned 100% of GameSquare Esports USA Inc. (formerly Reciprocity Corp of Nevada, Inc.) and GCN Inc. In addition, Reciprocity held a 40% interest in Biblos Gaming S.A. de C.V. Management determined that this acquisition meets the definition of a business under IFRS 3 and therefore the transaction was accounted as a business combination.

As consideration for the acquisition, the Company issued 43,749,996 of its common shares with an estimated fair value of $5,897,614 (CAD$7,345,478) to certain shareholders of Reciprocity and 3,000,000 options of the Company with an estimated fair value of $333,367 (CAD$415,208) to option-holders of Reciprocity. The consideration shares were subject to a 12-month lock-up period, a third of which was released every four months following the closing date of March 16, 2021.

---

| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS<br> For the three and nine months ended September 30, 2022 and the three and nine months ended August 31, 2021 |
| (Amounts in U.S. dollars) |

---

**4. ACQUISITIONS (continued)**

**a) Acquisition of Reciprocity (continued)**

Certain Reciprocity shareholders will also be entitled to receive (i) 5.255 million common shares of the Company if the Reciprocity business generates a minimum of $5 million of revenue and $1 million of net earnings before interest, taxes, and depreciation and amortization ("EBITDA<sup>"</sup>) within 12 months of the acquisition date of March 16, 2021 (the "Acquisition Date") and (ii) 9 million Common Shares if the Reciprocity business generates a minimum of $7 million of revenue and $1.4 million of EBITDA. In addition, the Company has agreed to grant or issue (i) up to 6,168,000 options to certain Reciprocity securityholders exercisable for 24 months to acquire an equal number of Common Shares at an exercise price of $1.00 per share if certain performance targets of Reciprocity are achieved 12 months and 24 months following the Acquisition Date and (ii) up to 3,725,000 common shares to certain Reciprocity securityholders if certain performance targets of Reciprocity are achieved 12 months and 24 months following the Acquisition Date. The estimated fair value of the contingent consideration at the date of acquisition was $nil due to the uncertainty of future performance targets.

The following table summarizes the consideration for the acquisition:

---

| | |
|:---|:---|
| Estimated fair value of shares issued | $5897614 |
| Estimated fair value of options issued | 333367 |
|  | $6230981 |

---

The following table summarizes the preliminary accounting estimates of the acquisition with a purchase price of $6,230,981:

---

| | |
|:---|:---|
| Cash | $414481 |
| Amounts receivable | 211452 |
| Prepaids | 8023 |
| Equipment | 9523 |
| Accounts payable and accrued liabilities | (791080) |
| Loan payable | (800000) |
|  | (947601) |
| Excess of purchase price over fair value of assets acquired (expensed) | 7178582 |
|  | $6230981 |

---

---

| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS<br> For the three and nine months ended September 30, 2022 and the three and nine months ended August 31, 2021 |
| (Amounts in U.S. dollars) |

---

On December 1, 2021, the Company and Reciprocity were amalgamated.

**b) Acquisition of Complexity**

On June 30, 2021, the Company acquired 100% of the issued and outstanding shares of Complexity, an esports organization in Texas USA. Management determined that this acquisition meets the definition of a business under IFRS 3 and therefore the transaction was accounted as a business combination. As total purchase consideration for the acquisition, the Company issued 83,328,750 common shares of the Company with an estimated fair value of $8,097,100 (CAD$10,035,546) to former shareholders of Complexity. The shares were subject to a 180-day trading hold post the closing date of June 30, 2021.

**4. ACQUISITIONS (continued)**

**b) Acquisition of Complexity (continued)**

The following table summarizes the consideration for the acquisition:

---

| | |
|:---|:---|
| Estimated fair value of shares issued | $14955257 |
| Share consideration received | (6858157) |
|  | $8097100 |

---

The following table summarizes the preliminary accounting estimates of the acquisition with a purchase price of $8,097,100:

---

| | |
|:---|:---|
| Cash | $434392 |
| Amounts receivable | 90624 |
| Other current assets | 708490 |
| Fixed assets | 3796057 |
| ROU asset | 2950277 |
| Brand name | 4244501 |
| Accounts payable and accrued liabilities | (487253) |
| Lease Liability | (3138515) |
| Loans | (501473) |
|  | $8097100 |

---

**c) Acquisition of Cut+Sew**

On July 27, 2021, the Company acquired 100% of the issued and outstanding shares of Cut+Sew, a privately held marketing agency operating in the sports and esports industries. Management determined that this acquisition meets the definition of a business under IFRS 3 and therefore the transaction is a business combination.

As consideration for the acquisition, the Company paid $2,385,117 (CAD$3,000,000) in cash and issued 2 million of its common shares with an estimated fair value of $191,498 (CAD$240,866). The shares were subject to a six-month trading hold following the closing date of July 27, 2021.

Additionally, certain members of Cut+Sew became entitled to receive (i) up to $970,045 (CAD$1,250,000) paid in common shares of the Company and up to $116,405 (CAD$150,000) paid in cash if Cut+Sew generates up to $1.0 million of EBITDA in the 12 months following the closing date of July 27, 2021 of the acquisition, and (ii) up to $1,715,040 (CAD$2,210,000) paid in common shares of the Company and up to $186,249 (CAD$240,000) paid in cash if Cut+Sew generates EBITDA of up to $1.5 million in the period of 12 to 24 months following the Closing date of July 27, 2021, for a maximum contingent consideration of up to $6.09 million (CAD$7.85 million) paid in cash and common shares. The estimated fair value of the contingent consideration at the date of acquisition was $52,662.

The following table summarizes the consideration for the acquisition:

---

| | |
|:---|:---|
| Cash | $2385117 |
| Estimated fair value of shares issued | 191498 |
| Contingent consideration - shares | 52662 |
|  | $2629277 |

---

---

| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS<br> For the three and nine months ended September 30, 2022 and the three and nine months ended August 31, 2021 |
| (Amounts in U.S. dollars) |

---

**4. ACQUISITIONS (continued)**

**c) Acquisition of Cut+Sew (continued)**

The following table summarizes the preliminary accounting estimates of the acquisition with a purchase price of $2,629,277:

---

| | |
|:---|:---|
| Cash | $315035 |
| Amounts receivable | 149672 |
| Prepaid expenses | 4607 |
| Other current assets | 9000 |
| Customer relationships | 1130117 |
| Brand name | 1274387 |
| Accounts payable and accrued liabilities | (203435) |
| Deferred revenue | (50106) |
|  | $2629277 |

---

**5. AMOUNTS RECEIVABLE**

Amounts receivable balances as at September 30, 2022 and December 31, 2021 consist of:

---

| | | |
|:---|:---|:---|
|  | **September 30, 2022** | December 31, 2021 |
| Trade receivables | $**6482515** | $3047772 |
| HST receivable | **51685** | 29090 |
| Other receivables | **1161256** | 8513 |
| Balance, end of period | $**7695456** | $3085375 |

---

---

| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS<br> For the three and nine months ended September 30, 2022 and the three and nine months ended August 31, 2021 |
| (Amounts in U.S. dollars) |

---

**6. EQUIPMENT**

---

| | | | |
|:---|:---|:---|:---|
|  | **Equipment** | **Leasehold improvements** | **Total** |
| **Cost:** |  |  |  |
| Balance, January 1, 2022 | $238988 | $3655734 | $3894722 |
| Additions | 31264 |  | 31264 |
| Effect of foreign exchange | (914) | (115) | (1029) |
| **Balance, September 30, 2022** | $269338 | $3655619 | $3924957 |
| **Depreciation:** |  |  |  |
| Balance, January 1, 2022 | $27434 | $238530 | $265964 |
| Depreciation charge for the period | 84700 | 408489 | 493189 |
| Effect of foreign exchange | (312) |  | (312) |
| **Balance, September 30, 2022** | $111822 | $647019 | $758841 |
| **Net book value:** |  |  |  |
| **Balance, September 30, 2022** | $**157516** | $**3008600** | $**3166116** |
| Balance, January 1, 2022 | $211554 | $3417204 | $3628758 |
| **Cost:** |  |  |  |
| Balance, December 1, 2020 | $1094 | $- | $1094 |
| Acquisition of Reciprocity | 9523 |  | 9523 |
| Acquisition of Complexity | 140323 | 3655734 | 3796057 |
| Additions | 88711 |  | 88711 |
| Transfer to assets available for sale | (633) |  | (633) |
| Effect of foreign exchange | (30) |  | (30) |
| **Balance, December 31, 2021** | $238988 | $3655734 | $3894722 |
| **Depreciation:** |  |  |  |
| Balance, December 1, 2020 | $- | $- | $- |
| Depreciation charge for the period | 27548 | 238530 | 266078 |
| Effect of foreign exchange | (114) |  | (114) |
| **Balance, December 31, 2021** | $27434 | $238530 | $265964 |
| **Net book value:** |  |  |  |
| **Balance, December 31, 2021** | $**211554** | $**3417204** | $**3628758** |
| Balance, December 1, 2020 | $1094 | $- | $1094 |

---

---

| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS<br> For the three and nine months ended September 30, 2022 and the three and nine months ended August 31, 2021 |
| (Amounts in U.S. dollars) |

---

**7. INTANGIBLES AND GOODWILL** 

**Intangibles**

The components of intangible assets as of September 30, 2022 are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Customer relationships** | **Brand name** | **Total** |
| **Balance, November 30, 2020** | $1225762 | $595732 | $1821494 |
| Acquisition of Complexity |  | 4244501 | 4244501 |
| Acquisition of Cut&Sew | 1130117 | 1274387 | 2404504 |
| Amortization | (377612) | (661266) | (1038878) |
| Effect of foreign exchange | 22053 | (87232) | (65179) |
| **Balance, December 31, 2021** | $2000320 | $5366122 | $7366442 |
| Amortization | (358450) | (895996) | (1254446) |
| Effect of foreign exchange | (127180) | (345383) | (472563) |
| **Balance, September 30, 2022** | $1514690 | $4124743 | $5639433 |

---

On June 30, 2021, the Company acquired all the outstanding shares of Complexity. The intangible assets acquired consisted of the Complexity brand name and its ties to the Dallas Cowboys. On July 27, 2021, the Company acquired all the issued and outstanding shares of Cut+Sew. The intangible assets acquired consisted of the Cut+Sew brand name and customer relationships.

**Goodwill**

Changes in the carrying value of goodwill were as follows:

---

| | |
|:---|:---|
| **Balance, November 30, 2020** | $1741696 |
| Impairment of goodwill | (1798430) |
| Effect of foreign exchange | 56734 |
| **Balance, September 30, 2022 and December 31, 2021** | $- |

---

During the year ended December 31, 2021, the Company impaired goodwill to $nil.

**8. OTHER ASSETS**

Other assets consist of acquisition costs of players and security deposits. Acquisition costs of players are amortized on a straight-line basis over the players' contract terms.

---

| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS<br> For the three and nine months ended September 30, 2022 and the three and nine months ended August 31, 2021 |
| (Amounts in U.S. dollars) |

---

**9. ASSETS AND LIABILITIES HELD FOR SALE**

**(a) Biblos**

During the nine months ended September 30, 2022, the Company entered into an agreement to sell it's 40% share of Biblos for $125,000. The net carrying amount of the assets and liabilities related to Biblos was $78,085 at the date of disposition. As a result, the Company recorded a gain on the disposition of Biblos of $46,915, included in the statements of loss and comprehensive loss for the nine months ended September 20, 2022.

**(b) Irati Energy Corporation ("Irati")**

Irati is a private company primarily focused on the development of its northern oilshale block located in Brazil.

On April 25, 2022, the Company sold its investment in Irati for $49,356 (CAD$62,635) or CAD$0.05 per common share of Irati.

**10. LOAN PAYABLE**

The Company's loan payable bore an interest rate of 20% per annum and had a maturity date of February 13, 2021 which was one year from the date of issuance. On May 18, 2021, the loan was amended to reduce the interest rate to 10% per annum and extend the maturity date to March 31, 2022. During the nine months ending September 30, 2022, the Company accrued an interest expense of $29,309 (nine months ended August 31, 2021 - $13,486) and repaid principal and interest of $149,442 (nine months ended August 31, 2021 - $143,979). As at September 30, 2022, the principal and accrued interest were carried at $nil (December 31, 2021 - $120,133).

**11. LEASE**

On June 30, 2021, the Company acquired Complexity (see Note 4(b)). Complexity leases a building in Frisco, Texas. The lease commenced on April 9, 2019 and expires in April 2029. The lease had a carrying amount of $2,950,277 at the date of acquisition of Complexity. The amortization charge during the period was $282,473 (nine months ended August 31, 2021 - $188,316).

The lease liability is measured at the present value of the lease payments that are not paid at the statement of financial position date. Lease payments are apportioned between interest expenses and a reduction of the lease liability using the Company's incremental borrowing rate to achieve a constant rate of interest on the remaining balances of the liabilities. For the nine months ended September 30, 2022, the Company recognized $177,708 (nine months ended August 31, 2021 - $125,892) in interest expense related to its lease liabilities.

A reconciliation of the lease liabilities for the nine months ended September 30, 2022 is as follows:

---

| | | |
|:---|:---|:---|
|  | **September 30, 2022** | December 31, 2021 |
| Balance, beginning of period | $**3000031** | $- |
| Acquisiton of Complexity | **-** | 3138515 |
| Cash outflows  | **(400828)** | (264376) |
| Finance costs | **177708** | 125892 |
|  | $**2776911** | $3000031 |
|  | **September 30, 2022** | December 31, 2021 |
| Lease Liability - current | $**327239** | $301355 |
| Lease Liability - non-current | **2449672** | 2698676 |
|  | $**2776911** | $3000031 |

---

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| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS<br> For the three and nine months ended September 30, 2022 and the three and nine months ended August 31, 2021 |
| (Amounts in U.S. dollars) |

---

**12. CAPITAL STOCK**

a) Authorized

The authorized share capital of the Company, which has no par value, is comprised of the following:

(i) Unlimited common shares – common shares shall be convertible at the option of the holder into proportionate voting shares on the basis of 100 common shares per 1 proportionate voting share.

(ii) Unlimited Proportionate Voting Shares ("PVS") – each PVS shall be convertible at the option of the holder into common shares at a ratio of 100 common shares per PVS. Each PVS is entitled to 100 votes per PVS at shareholder meetings of the Company.

b) Share Capital

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| | | | |
|:---|:---|:---|:---|
|  | **Number of Proportionate**<br> **Voting Shares** | **Number of**<br> **common** <br> **shares** | **Amount** |
| Balance as of November 30, 2020 |  | 51928911 | $4764970 |
| Shares issued on acquisition of Reciprocity (Note 4(a)) |  | 43749996 | 5897614 |
| Shares issued on acquisition of NextGen (Note 4(b)) |  | 83328750 | 8097100 |
| Shares issued on acquisition of Cut&Sew (Note 4(c)) |  | 2000000 | 191498 |
| Private placements |  | 61581477 | 18344487 |
| Share issue costs |  |  | (1689245) |
| Options exercised |  | 312766 | 119705 |
| RSUs exercised |  | 1000000 | 317371 |
| Warrants exercised |  | 480000 | 174616 |
| Balance as of December 31, 2021 |  | 244381900 | $36218116 |
| Private placements |  | 59855285 | 6162534 |
| Share issue costs |  |  | (42822) |
| RSUs exercised |  | 3304281 | 1059342 |
| Conversion from Common to Proportionate Voting Shares | 150000 | (15000000) |  |
| **Balance as of September 30, 2022** | 150000 | 292541466 | $43397170 |

---

On February 19, 2021, the Company closed a non-brokered private placement financing of 2,381,477 units at a price of CAD$0.42 per Unit for gross proceeds of $792,945 (CAD$1,000,220) (the "Offering"). Each Unit consists of one common share of the Company and one-half of one common share purchase warrant (each whole warrant, a "Warrant"). Each Warrant entitles the holder thereof to acquire one additional common share at an exercise price of CAD$0.60 for a period of 36 months from issuance. In connection with the financing, the Company paid finder's fees of $1,165 (CAD$1,470) and issued 166,703 finder warrants. Each finder warrant entitles the holder to acquire one Common Share at a price of CAD$0.60 per Common Share for a period of 36 months following issuance. The gross proceeds were prorated to common shares and warrants based on their relative fair values. See Note 14.

On March 4, 2021, the Company closed a bought deal private placement financing and upsize led by Canaccord Genuity Corp., on behalf of a syndicate of underwriters (collectively, the "Underwriters") issuing 16,700,000 units of the Company for gross proceeds of $5,550,368 (CAD$7,014,000). Each Unit consists of one common share of the Company and one-half of one common share purchase warrant (each whole warrant, a "Warrant"). Each Warrant entitles the holder thereof to purchase one Common Share at an exercise price of CAD$0.60 for a period of 36 months from the closing date of the offering, subject to a Warrant acceleration right exercisable by the Company if, at any time following the date that is four months and one day from the date of the closing of the Offering, the daily volume weighted average trading price of the Company's common shares on the Canadian Securities Exchange is greater than CAD$1.00 for the preceding five consecutive trading days.

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| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS<br> For the three and nine months ended September 30, 2022 and the three and nine months ended August 31, 2021 |
| (Amounts in U.S. dollars) |

---

**12. CAPITAL STOCK (continued)**

b) Share Capital (continued)

As consideration for their services with respect to the Offering, the Underwriters received fees of $395,664 (CAD$500,000), a cash commission of $388,526 (CAD$490,980) and 1,169,000 warrants of the Company (the "Broker Warrants"), exercisable for a period of 36 months following the closing date, to acquire 1,169,000 Units of the Company. Each Unit consists of one common share of the Company and one half of one common share purchase warrant. Each warrant is exercisable to purchase one common share of the Company at an exercise price of CAD$0.60 per common share for a period of 36 months from the Escrow Release Date. In addition, the Company incurred legal and other expenses totaling $126,970 (CAD$159,995) in connection with the Offering.

On March 24, 2021, 212,766 options with exercise prices of CAD$0.47 were exercised for gross proceeds of $79,624 (CAD$100,000).

On July 6, 2021, 1,000,000 shares were issued on the exercise of RSUs (see Note 13(b).

On July 22, 2021, the Company closed a bought deal private placement offering led by Canaccord Genuity Corp. acted as lead underwriter on behalf of a syndicate of underwriters, issuing 21,250,000 units of the Company at a price of CAD$0.40 per unit for gross proceeds of $6,763,747 (CAD$8.5 million). Each Unit consists of one common share of the Company and one half of one purchase warrant. Each Warrant is exercisable for one common share at an exercise price of CAD$0.60 per common share for a period of 24 months from the closing date of the offering, subject to the Warrant Acceleration Right (as defined below). If, at any time following the closing of the offering, the daily volume weighted average trading price of the common shares on the Canadian Securities Exchange is greater than CAD$1.00 per common share for the preceding 10 consecutive trading days, the Company shall have the right to accelerate the expiry date of the Warrants to a date that is at least 30 trading days following the date of such written notice and press release (the "Warrant Acceleration Right").

On July 22, 2021, the Company also closed a concurrent non-brokered private placement whereby the Jones family and the Goff family subscribed for an additional 21,250,000 units of the Company for gross proceeds of $6,763,746 (CAD$8.5 million) on the same terms as those in the bought deal private placement offering.

As consideration for the services rendered by the Underwriters in connection with the Offering, the Company has (i) paid the Underwriters a cash commission of $473,462 (CAD$595,000), and (ii) issued an aggregate of 1,487,500 broker warrants. Each broker warrant is exercisable into that number of Units at an exercise price of CAD$0.40 for a period of 36 months from the closing date. In addition, the Company incurred legal and other expenses totaling $141,936 in connection with the Offering.

On May 30, 2022, the Company closed the first tranche of a non-brokered private placement. The Company issued 20,040,429 common shares of the Company at a price of CAD$0.14 per common share for gross proceeds of $2,215,811 (CAD$2,805,660). The Company incurred legal and other expenses totaling $38,063 in connection with the private placement.

On June 23, 2022, 15,000,000 common shares were converted into 150,000 PVS.

On July 20, 2022, the Company closed the second tranche of a non-brokered private placement. The Company issued 926,285 common shares of the Company at a price of CAD$0.14 per common share for gross proceeds of $100,652 (CAD$129,680).

On August 11, 2022, the Company closed the third tranche of a non-brokered private placement. The Company issued 8,988,571 common shares of the Company at a price of CAD$0.14 per common share for gross proceeds of $986,748 (CAD$1,258,400). The Company incurred legal and other expenses totaling $4,759 in connection with the private placement.

On September 30, 2022, the Company closed a non-brokered private placement financing of 29,900,000 units at a price of CAD$0.14 per unit for gross proceeds of $3,000,000 (CAD$4,186,000). Each unit consists of one common share of the Company and 0.20 of one common share purchase warrant. Each whole warrant entitles the holder thereof to acquire one additional common share at an exercise price of CAD$0.20 commencing on September 30, 2023 and expiring on September 30, 2027. The gross proceeds were prorated to common shares and warrants based on their relative fair values. See Note 14.

During the nine months ended September 30, 2022, 3,304,281 shares were issued on the exercise of RSUs (see Note 13(b).

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| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS<br> For the three and nine months ended September 30, 2022 and the three and nine months ended August 31, 2021 |
| (Amounts in U.S. dollars) |

---

**13. SHARE BASED PAYMENTS**

a) Options

The Company has granted options for the purchase of common shares to its directors, consultants, employees and officers. The aggregate number of shares that may be issuable pursuant to options granted under the Company's stock option plan (the "Option Plan") will not exceed 10% of the issued common shares of the Company at the date of grant. No more than 5% of the issued shares of the Company may be granted to any one optionee. The options are non-transferable and non-assignable and may be granted for a term not exceeding five years. The exercise price of the options may not be less than the greater of CAD$0.05 and the market price, subject to all applicable regulatory requirements.

The following is a summary of stock options outstanding at September 30, 2022 and December 31, 2021 and changes during the periods then ended.

Information relating to share options outstanding as at September 30, 2022 is as follows:

---

| | | |
|:---|:---|:---|
|  | **Number of stock options** | **Weighted average** <br> **exercise price (CAD$)** |
| Balance, November 30, 2020  | 2185344 | $0.46 |
| Granted  | 14509241 | 0.45 |
| Issued on acquisition of Reciprocity  | 3000000 | 0.40 |
| Exercised  | (312766) | 0.34 |
| Balance as of December 31, 2021 | 19381819 | $0.45 |
| Granted  | 3800000 | 0.32 |
| Cancelled  | (1775861) | 0.46 |
| **Balance as of September 30, 2022** | 21405958 | $0.42 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Exercise price (CAD$)** | **Options outstanding** | **Options exercisable** | **Expiry date** | **Weighted average grant date fair value vested** | **Weighted average remaining life in years** |
| $0.40 | 3000000 | 3000000 | Thursday, March 16, 2023 | 333367 | 0.46 |
| $0.61 | 34483 | 34483 | Sunday, October 1, 2023 | 1816 | 1.00 |
| $0.41 | 350000 | 350000 | Sunday, April 28, 2024 | 42771 | 1.58 |
| $0.48 | 925000 | 925000 | Tuesday, November 25, 2025 | 252521 | 3.16 |
| $0.44 | 2000000 | 1500000 | Thursday, January 22, 2026 | 276843 | 3.32 |
| $0.50 | 250000 | 250000 | Tuesday, February 24, 2026 | 43985 | 3.41 |
| $0.47 | 500000 | 312500 | Monday, March 2, 2026 | 81253 | 3.42 |
| $0.44 | 1000000 | 1000000 | Monday, March 16, 2026 | 155354 | 3.46 |
| $0.47 | 1100000 | 725000 | Tuesday, April 28, 2026 | 126385 | 3.58 |
| $0.51 | 2300000 | 2300000 | Sunday, July 5, 2026 | 392038 | 3.76 |
| $0.44 | 6396475 | 2812148 | Monday, September 21, 2026 | 665727 | 3.98 |
| $0.35 | 200000 | 50000 | Tuesday, February 16, 2027 | 6181 | 4.38 |
| $0.35 | 550000 |  | Monday, March 1, 2027 | 25261 | 4.42 |
| $0.35 | 950000 | 350000 | Wednesday, March 24, 2027 | 10527 | 4.48 |
| $0.18 | 1287500 |  | Tuesday, August 31, 2027 | 4433 | 4.92 |
| $0.20 | 312500 | 312500 | Tuesday, August 31, 2027 | 16348 | 4.92 |
| $0.13 | 250000 | - | Tuesday, September 14, 2027 | 347 | 4.96 |
| Total  | 21405958 | 13921631 |  | $2435157 | 3.38 |

---

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| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS<br> For the three and nine months ended September 30, 2022 and the three and nine months ended August 31, 2021 |
| (Amounts in U.S. dollars) |

---

**13. SHARE BASED PAYMENTS (continued)**

a) Options (continued)

On January 22, 2021, the Company granted 2,000,000 options to the Chief Executive Officer of the Company. The options vest in equal quarterly instalments over a two-year period. Each option is exercisable at a price of CAD$0.44 per common share and expire January 22, 2026. The fair market value of the options of $283,601 was estimated using the Black-Scholes option pricing model based on the following weighted average assumptions: share price of CAD$0.44 based on the closing price of the Company's shares on January 21, 2021, risk free rate of 0.44%, expected volatility of 52.7%, an estimated life of 5 years and an expected dividend yield of 0%. The fair value of the options is amortized over the vesting period. During the nine months ended September 30, 2022, the Company expensed $52,470 in share-based compensation related to the vesting of these options.

On February 24, 2021, the Company granted 500,000 options to consultants of the Company. The options vest in quarterly installments over one year. Each option is exercisable at a price of CAD$0.50 per common share and expire February 19, 2026. The fair market value of the options of $87,969 was estimated using the Black-Scholes option pricing model based on the following weighted average assumptions: share price of $0.50 based on the closing price of the Company's shares on February 23, 2021, risk free rate of 0.73%, expected volatility of 52.9%, an estimated life of 5 years and an expected dividend yield of 0%. The fair value of the options is amortized over the vesting period.

On March 2, 2021, the Company granted 550,000 options to consultants of the Company. 50,000 of the options vest immediately and 500,000 vest in quarterly installments over two years. Each option is exercisable at a price of CAD$0.47 per common share and expire March 2, 2026. The fair market value of the options of $92,957 was estimated using the Black-Scholes option pricing model based on the following weighted average assumptions: share price of CAD$0.47 based on the closing price of the Company's shares on March 1, 2021, risk free rate of 0.78%, expected volatility of 52.6%, an estimated life of 5 years and an expected dividend yield of 0%. The fair value of the options was amortized over the vesting period.

On March 16, 2021, the Company completed the acquisition of Reciprocity (Note 4(a)) and issued 3,000,000 replacement options for Reciprocity options outstanding immediately prior to the transaction. The options are exercisable for one common share of the Company at an exercise price of $0.40 per common share for period of two years from the date of grant. The fair market value of the options of $333,367 was estimated using the Black-Scholes option pricing model based on the following weighted average assumptions: share price of CAD$0.44 based on the closing price of the Company's shares on March 15, 2021, risk free rate of 0.31%, expected volatility of 50.1%, based on the historical volatility of comparable companies, an estimated life of 2 years and an expected dividend yield of 0%.

On March 16, 2021, the Company granted 1,000,000 options to a consultant of the Company. The options vest in quarterly installments over one year. Each option is exercisable at a price of CAD$0.44 per common share and expire March 16, 2026. The fair market value of the options of $155,354 was estimated using the Black-Scholes option pricing model based on the following weighted average assumptions: share price of CAD$0.44 based on the closing price of the Company's shares on March 15, 2021, risk free rate of 1.03%, expected volatility of 50.1%, an estimated life of 5 years and an expected dividend yield of 0%. The fair value of the options is amortized over the vesting period. During the nine months ended September 30, 2022, the Company expensed $7,980 in share-based compensation related to the vesting of these options.

On March 18, 2021, the Company granted 212,766 options to consultants of the Company. The options vested immediately. Each option is exercisable at a price of CAD$0.47 per common share and expire March 18, 2026. The fair market value of the options of $34,038 was estimated using the Black-Scholes option pricing model based on the following weighted average assumptions: share price of CAD$0.46 based on the closing price of the Company's shares on March 16, 2021, risk free rate of 1.01%, expected volatility of 50.1%, an estimated life of 5 years and an expected dividend yield of 0%.

On April 9, 2021, the Company granted 100,000 options to consultants of the Company. The options vest in quarterly installments over one year. Each option was exercisable at a price of CAD$0.43 per common share and expire April 8, 2026. The fair market value of the options of $14,083 was estimated using the Black-Scholes option pricing model based on the following weighted average assumptions: share price of CAD$0.43 based on the closing price of the Company's shares on April 8, 2021, risk free rate of 0.95%, expected volatility of 46.5%, an estimated life of 5 years and an expected dividend yield of 0%. The fair value of the options was amortized over the vesting period.

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| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS<br> For the three and nine months ended September 30, 2022 and the three and nine months ended August 31, 2021 |
| (Amounts in U.S. dollars) |

---

**13. SHARE BASED PAYMENTS (continued)**

a) Options (continued)

On April 28, 2021, the Company granted 1,100,000 options to consultants of the Company. 1,000,000 of the options vest in quarterly installments over two years and 100,000 vest in quarterly installments over one year. Each option is exercisable at a price of CAD$0.47 per common share and expire April 28, 2026. The fair market value of the options of $134,423 was estimated using the Black-Scholes option pricing model based on the following weighted average assumptions: share price of CAD$0.40 based on the closing price of the Company's shares on April 27, 2021, risk free rate of 0.93%, expected volatility of 46.3%, an estimated life of 5 years and an expected dividend yield of 0%. The fair value of the options is amortized over the vesting period. During the nine months ended September 30, 2022, the Company expensed $34,632 in share-based compensation related to the vesting of these options.

On April 28, 2021, the Company granted 350,000 options to a consultant of the Company. The options vest in quarterly installments over one year. Each option is exercisable at a price of CAD$0.47 per common share and expire April 28, 2024. The fair market value of the options of $42,772 was estimated using the Black-Scholes option pricing model based on the following weighted average assumptions: share price of $0.40 based on the closing price of the Company's shares on April 27, 2021, risk free rate of 0.48%, expected volatility of 46.3%, an estimated life of 3 years and an expected dividend yield of 0%. The fair value of the options is amortized over the vesting period. During the nine months ended September 30, 2022, the Company expensed $4,546 in share-based compensation related to the vesting of these options.

On July 5, 2021, the Company granted 2,300,000 options to a consultant of the Company. Half of the of the options vested immediately and half of the options vested in equal monthly tranches over a six-month period commencing July 30, 2021. Each option is exercisable at a price of CAD$0.51 per common share and expire July 5, 2026. The fair market value of the options of $392,038 was estimated using the Black-Scholes option pricing model based on the following weighted average assumptions: share price of CAD$0.51 based on the closing price of the Company's shares on July 5, 2021, risk free rate of 0.99%, expected volatility of 46.6%, an estimated life of 5 years and an expected dividend yield of 0%. The fair value of the options was amortized over the vesting period.

On September 20, 2021, the Company granted 6,396,475 options to officers, directors and consultants of the Company. 200,000 of the options vest in two equal installments on March 13, 2022 and September 13, 2022, 450,000 of the options vest on March 13, 2022, 100,000 of the options vest on September 13, 2022, 145,000 options vest on December 31, 2021, 500,000 of the options vest in four equal instalments of 125,000 every six months starting on March 13, 2022 and 5,001,475 of the options vest in 35 monthly instalments of 138,929 starting on October 20, 2021 and the remaining 138,960 vesting on September 20, 2024. Each option is exercisable at a price of CAD$0.435 per common share and expire September 21, 2026. The fair market value of the options of $887,200 was estimated using the Black-Scholes option pricing model based on the following weighted average assumptions: share price of CAD$0.435 based on the closing price of the Company's shares on September 17, 2021, risk free rate of 0.85%, expected volatility of 46.4%, an estimated life of 5 years and an expected dividend yield of 0%. The fair value of the options is amortized over the vesting period. During the nine months ended September 30, 2022, the Company expensed $362,930 in share-based compensation related to the vesting of these options.

On February 15, 2022, the Company granted 200,000 options to a consultant of the Company. The options vest on February 15, 2023. Each option is exercisable at a price of CAD$0.35 per common share and expire February 16, 2027. The fair market value of the options of $10,541 was estimated using the Black-Scholes option pricing model based on the following weighted average assumptions: share price of CAD$0.23 based on the closing price of the Company's shares on February 14, 2022, risk free rate of 1.82%, expected volatility of 46.92%, an estimated life of 5 years and an expected dividend yield of 0%. The fair value of the options is amortized over the vesting period. During the nine months ended September 30, 2022, the Company expensed $6,181 in share-based compensation related to the vesting of these options.

On February 28, 2022, the Company granted 1,400,000 options to consultants of the Company. The options vest on March 1, 2023. Each option is exercisable at a price of CAD$0.35 per common share and expire March 1, 2027. The fair market value of the options of $43,204 was estimated using the Black-Scholes option pricing model based on the following weighted average assumptions: share price of CAD$0.19 based on the closing price of the Company's shares on February 27, 2022, risk free rate of 1.64%, expected volatility of 46.95%, an estimated life of 5 years and an expected dividend yield of 0%. The fair value of the options is amortized over the vesting period. During the nine months ended September 30, 2022, the Company expensed $25,621 in share-based compensation related to the vesting of these options.

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| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS<br> For the three and nine months ended September 30, 2022 and the three and nine months ended August 31, 2021 |
| (Amounts in U.S. dollars) |

---

**13. SHARE BASED PAYMENTS (continued)**

a) Options (continued)

On March 23, 2022, the Company granted 950,000 options to a consultant of the Company. 150,000 options vested on the date of grant with the remaining options vesting in 8 equal installments every three months starting June 23, 2022. Each option is exercisable at a price of CAD$0.35 per common share and expire March 24, 2027. The fair market value of the options of $16,548 was estimated using the Black-Scholes option pricing model based on the following weighted average assumptions: share price of CAD$0.13 based on the closing price of the Company's shares on March 22, 2022, risk free rate of 2.2%, expected volatility of 46.92%, an estimated life of 5 years and an expected dividend yield of 0%. The fair value of the options is amortized over the vesting period. During the nine months ended September 30, 2022, the Company expensed $10,527 in share-based compensation related to the vesting of these options.

On August 31, 2022, the Company granted 1,287,500 options to employees and consultants of the Company. 643,750 options vest on August 31, 2023 and 643,750 options vest on August 31, 2024. Each option is exercisable at a price of CAD$0.18 per common share and expire August 31, 2027. The fair market value of the options of $71,952 was estimated using the Black-Scholes option pricing model based on the following weighted average assumptions: share price of CAD$0.16 based on the closing price of the Company's shares on August 30, 2022, risk free rate of 3.34%, expected volatility of 52.68%, an estimated life of 5 years and an expected dividend yield of 0%. The fair value of the options is amortized over the vesting period. During the nine months ended September 30, 2022, the Company expensed $4,433 in share-based compensation related to the vesting of these options.

On August 31, 2022, the Company granted 312,500 options to employees and consultants of the Company. The options vested immediately on the date of grant. Each option is exercisable at a price of CAD$0.20 per common share and expire August 31, 2027. The fair market value of the options of $16,348 was estimated using the Black-Scholes option pricing model based on the following weighted average assumptions: share price of CAD$0.16 based on the closing price of the Company's shares on August 30, 2022, risk free rate of 3.34%, expected volatility of 52.68%, an estimated life of 5 years and an expected dividend yield of 0%. The fair value of the options is amortized over the vesting period. During the nine months ended September 30, 2022, the Company expensed $16,348 in share-based compensation related to the vesting of these options.

On September 14, 2022, the Company granted 250,000 options to the COO of the Company. 125,000 of the options vest on September 14, 2023 and 125,000 options vest on September 14, 2024. Each option is exercisable at a price of CAD$0.13 per common share and expire September 14, 2027. The fair market value of the options of $10,547 was estimated using the Black-Scholes option pricing model based on the following weighted average assumptions: share price of CAD$0.12 based on the closing price of the Company's shares on September 13, 2022, risk free rate of 3.39%, expected volatility of 51.81%, an estimated life of 5 years and an expected dividend yield of 0%. The fair value of the options is amortized over the vesting period. During the nine months ended September 30, 2022, the Company expensed $347 in share-based compensation related to the vesting of these options.

During the nine months ended September 30, 2022, 1,775,861 options with weighted average exercise prices of CAD$0.46, expired, unexercised.

b) Restricted share units ("RSU")

On June 4, 2021, the Company adopted a restricted share unit ("RSU") plan (the "RSU Plan"). The Plan provides for the grant of RSUs to employees, officers or directors of the Company and allows the Company the ability to issue on common share from treasury for each RSU held on the vesting date as determined by the board on the date of grant. The aggregate number of shares that may be issuable pursuant to RSUs granted under the Company's RSU Plan together with the Option plan will not exceed 10% of the issued common shares of the Company at the date of grant. The number of shares to be reserved for issue under the RSU Plan together with shares reserved for issuance under the Option Plan to any one person within a twelve-month period may not exceed 5% of the number of shares issued and outstanding.

On June 4, 2021, the Company granted 2,000,000 RSUs to the Company's Chief Executive Officer. 1,000,000 of the RSUs vested immediately and 1,000,000 of the RSUs vested 12 months following the date of grant. The estimated fair value of the RSUs on the date of grant is amortized over the vesting periods. During the nine months ended September 30, 2022, the Company recognized an expense of $150,389. On July 6, 2021, 1,000,000 of the RSUs were exercised for 1, 000,000 common shares of the Company and on July 26, 2022 the remaining 1,000,000 of the RSUs were exercised for 1,000,000 common shares of the Company.

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| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS<br> For the three and nine months ended September 30, 2022 and the three and nine months ended August 31, 2021 |
| (Amounts in U.S. dollars) |

---

**13. SHARE BASED PAYMENTS (continued)**

b) Restricted share units ("RSU") (continued)

On July 26, 2021, the Company granted 1,575,000 RSUs to key management of Complexity. Half of the RSUs vested on June 30, 2022 and half vest on June 30, 2023. The estimated fair value of the RSUs on the date of grant is amortized over the vesting periods. During the nine months ended September 30, 2022, the Company recognized an expense of $228,635.

On September 20, 2021, the Company granted 2,667,158 RSUs according to the terms of a talent agreement with a consultant of Complexity. 1,000,000 of the RSUs vested on the date of grant, 1,620,815 of the RSUs vest in thirty-five equal installments of 46,309 per month starting on October 20, 2021 and the remaining 46,343 vest on September 20, 2024. The estimated fair value of the RSUs on the date of grant is amortized over the vesting periods. During the nine months ended September 30, 2022, the Company recognized an expense of $225,434.

On February 15, 2022, the Company granted 200,000 RSUs to a consultant of the Company. The RSUs vest on February 15, 2023. The estimated fair value of the RSUs on the date of grant is amortized over the vesting periods. During the nine months ended September 30, 2022, the Company recognized an expense of $20,712.

On March 23, 2022, the Company granted 800,000 RSUs to a consultant of the Company. The RSUs vest in 8 equal installments every three months starting June 24, 2022. The estimated fair value of the RSUs on the date of grant is amortized over the vesting periods. During the nine months ended September 30, 2022, the Company recognized an expense of $45,115.

On August 31, 2022, the Company granted 1,250,000 RSUs to an employee of the Company. The RSU will vest on the date on which the Company's common shares start trading on the New York Stock Exchange ("NYSE") or NASDAQ if such date occurs prior to November 30, 2024. The estimated fair value of the RSUs on the date of grant is amortized over the vesting periods. During the nine months ended September 30, 2022, the Company recognized an expense of $5,574.

During the nine months ended September 30, 2022, 3,304,281 vested RSUs were exchanged for common shares of the Company. As at September 30, 2022, 4,187,877 RSUs were outstanding, of which 288,927 were vested.

**14. WARRANTS**

The following is a summary of warrants outstanding at September 30, 2022 and December 31, 2021 and changes during the periods then ended.

---

| | | | |
|:---|:---|:---|:---|
|  | **Number of warrants** | **Weighted average exercise prices (CAD$)** | **Grant date fair value** |
| Balance, November 30, 2020 | 13052900 | $0.54 | $622155 |
| Private placements | 30790738 | 0.60 | 1526319 |
| Broker warrants issued | 2823203 | 0.49 | 161883 |
| Warrants exercised | (480000) | 0.40 | (22873) |
| Balance, December 31, 2021 | 46186841 | $0.47 | $2287484 |
| Private placements | 6000000 | $0.20 | 140677 |
| Warrants issued for credit facility | 4494286 | 0.14 | 69215 |
| Balance, September 30, 2022 | 56681127 | $0.47 | $2497376 |

---

---

| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS<br> For the three and nine months ended September 30, 2022 and the three and nine months ended August 31, 2021 |
| (Amounts in U.S. dollars) |

---

**14. WARRANTS (continued)**

In connection with the private placement on February 19, 2021 (Note 12(b)), 1,190,738 warrants were issued. Each warrant entitles the holder to purchase one common share of the Company at a price of $0.60 until February 19, 2024. The fair value of the warrants of $86,785, was estimated using the Black-Scholes option pricing model with the following weighted average assumptions: share price of CAD$0.34, expected dividend yield of 0%, expected volatility of 52.8%, based on the historical volatility of comparable companies, a risk-free interest rate of 0.30% and an expected life of 3 years. In addition, the Company issued 166,703 broker warrants in connection with the financing. The fair value of the broker warrants of $10,570 was estimated using the Black-Scholes option pricing model with the same weighted average assumptions.

In connection with the bought deal private placement on March 4, 2021 (Note 12(b)), 8,350,000 warrants were issued. Each warrant entitles the holder to purchase one common share of the Company at a price of CAD$0.60 until March 4, 2024. The fair value of the warrants of $607,635, was estimated using the Black-Scholes option pricing model with the following weighted average assumptions: share price of CAD$0.42, expected dividend yield of 0%, expected volatility of 52.6%, based on the historical volatility of comparable companies, a risk-free interest rate of 0.48% and an expected life of 3 years. In addition, the Company issued 1,169,000 broker warrants in connection with the financing. The fair value of the broker warrants of $73,969 was estimated using the Black-Scholes option pricing model with the same weighted average assumptions.

In connection with the bought deal private placement on July 22, 2021 (Note 12(b)), 21,250,000 warrants were issued. Each warrant entitles the holder to purchase one common share of the Company at a price of CAD$0.20 until July 22, 2023. The fair value of the warrants of $832,169, was estimated using the Black-Scholes option pricing model with the following weighted average assumptions: share price of CAD$0.40, expected dividend yield of 0%, expected volatility of 46.6%, based on the historical volatility of comparable companies, a risk-free interest rate of 0.45% and an expected life of 2 years. In addition, the Company issued 1,487,500 broker warrants with exercise prices of CAD$0.40 in connection with the financing. The fair value of the broker warrants of $77,374 was estimated using the Black-Scholes option pricing model with the same weighted average assumptions.

On June 30, 2022, 4,494,286 warrants were issued in connection with a credit facility (Note 1). Each warrant entitles the holder to purchase one common share of the Company at a price of CAD$0.14 until June 30, 2024. The fair value of the warrants of $69,215, was estimated using the Black-Scholes option pricing model with the following weighted average assumptions: share price of CAD$0.105, expected dividend yield of 0%, expected volatility of 48.06%, based on the historical volatility of comparable companies, a risk-free interest rate of 3.1% and an expected life of 2 years.

In connection with the private placement on September 30, 2022 (Note 12(b)), 6,000,000 warrants were issued. Each warrant entitles the holder to purchase one common share of the Company at a price of $0.20 commencing on September 30, 2023 until September 30, 2027. The fair value of the warrants of $140,677, was estimated using the Black-Scholes option pricing model with the following weighted average assumptions: share price of CAD$0.09, expected dividend yield of 0%, expected volatility of 64.69%, based on the historical volatility of comparable companies, a risk-free interest rate of 3.32% and an expected life of 5 years.

At September 30, 2022, outstanding warrants to acquire common shares of the Company were as follows:

---

| | | | |
|:---|:---|:---|:---|
| **Exercise price (CAD$)** | **Number of warrants** | **Expiry date** | **Weighted average**<br> **remaining life in years** |
| $0.40 | 11972900 | Sunday, October 2, 2022 | 0.01 |
| $0.40 | 600000 | Thursday, November 17, 2022 | 0.13 |
| $0.60 | 21250000 | Saturday, July 22, 2023 | 0.81 |
| $0.60 | 1357441 | Monday, February 19, 2024 | 1.39 |
| $0.60 | 9519000 | Monday, March 4, 2024 | 1.43 |
| $0.14 | 4494286 | Sunday, June 30, 2024 | 1.75 |
| $0.40 | 1487500 | Monday, July 22, 2024 | 1.81 |
| $0.20 | 6000000 | Thursday, September 30, 2027 | 5.00 |
| Total  | 56681127 |  | 1.29 |

---

---

| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS<br> For the three and nine months ended September 30, 2022 and the three and nine months ended August 31, 2021 |
| (Amounts in U.S. dollars) |

---

**15. NON-CONTROLLING INTEREST**

On March 16, 2021, the Company acquired all the issued and outstanding common shares of Reciprocity (see Note 4(a)) which held a 40% interest in Biblos. During the nine months ended September 30, 2022, the Company entered into an agreement to sell it's 40% interest in Biblos (see Note 9).

The following summarizes the changes in non-controlling interest in Biblos for the nine months ended September 30, 2022:

---

| | |
|:---|:---|
| Balance, December 1, 2020 | $- |
| Non-controlling interest acquired on acquisiton of Reciprocity | (57745) |
| Share of profit for the period | (32729) |
| Balance, December 31, 2021 | $(90474) |
| Share of profit for the period | 13718 |
| Non-controlling interest on sale of Biblos | 76756 |
| Balance, September 30, 2022 | $- |

---

**16. RELATED PARTY TRANSACTIONS**

Key management personnel compensation:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended September 30, 2022** | Three months ended August 31, 2021 | **Nine months ended September 30, 2022** | Nine months ended August 31, 2021 |
| Short term employee benefits | $**263957** | $275436 | $**774624** | $785150 |
| Share-based payments | **15436** | 505062 | **244641** | 770730 |
| Short term employee benefits | $**279393** | $780497 | $**1019265** | $1555879 |

---

The Company recorded $244,641 in share-based compensation related to the vesting of options and RSUs granted during the nine months ended September 30, 2022 and the 13 months ended December 31, 2021 (see Notes 13(a) and (b)).

Other related party transactions:

Included in accounts payable and accrued liabilities at September 30, 2022 is $150,288 (December 31 - $178,244) owed to the chairman of the board of directors of the Company. This amount is due on demand, unsecured, and non-interest bearing.

See Note 17.

---

| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS<br> For the three and nine months ended September 30, 2022 and the three and nine months ended August 31, 2021 |
| (Amounts in U.S. dollars) |

---

**17. CONTINGENCIES AND COMMITMENTS**

**Management Commitments**

The Company is party to certain management contracts. These contracts require payments of approximately $1,990,000 to be made upon the occurrence of a change in control to the officers of the Company. The Company is also committed to payments upon termination of approximately $845,000 pursuant to the terms of these contracts. As a triggering event has not taken place, these amounts have not been recorded in these consolidated financial statements.

**Former Activities**

The Company was previously involved in oil and gas exploration activities in Canada, the United States and Colombia. The Company ceased all direct oil and gas exploration activities in 2014. While management estimated that the exposure to additional liabilities from its former oil and gas activities over and above the reclamation deposits held in trust for the Alberta Energy Regulator of CAD$343,691 ($250,742) to be remote, the outcome of any such contingent matters is inherently uncertain.

**17. CONTINGENCIES AND COMMITMENTS (continued)**

**Legal Matters** 

From time to time, the Company is named as a party to claims or involved in proceedings, including legal, regulatory and tax related, in the ordinary course of its business. While the outcome of these matters may not be estimable at period end, the Company makes provisions, where possible, for the estimated outcome of such claims or proceedings. Should a loss result from the resolution of any claims or proceedings that differs from these estimates, the difference will be accounted for as a charge to net income (loss) in that period.

**COVID-19**

The Company's operations could be significantly adversely affected by the effects of a widespread global outbreak of a contagious disease, including the respiratory illness caused by COVID-19. The Company cannot accurately predict the impact COVID-19 will have on its operations and the ability of others to meet their obligations with the Company, including uncertainties relating to the ultimate geographic spread of the virus, the severity of the disease, the duration of the outbreak, and the length of travel and quarantine restrictions imposed by governments of affected countries. In addition, a significant outbreak of contagious diseases in the human population could result in a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could further affect the Company's operations and ability to finance its operations.

**Government Assistance Loans**

On May 27, 2020, the Company received a $31,551 (CAD$40,000) Canada Emergency Business Account ("CEBA") loan from the Government of Canada via its commercial bank. On January 11, 2021, the Company received an additional $15,775 (CAD$20,000) increasing the loan to $47,326 (CAD$60,000). The loan was interest free until December 31, 2022 and matured on December 31, 2025. If $31,551 (CAD$40,000) loan is repaid by December 31, 2022, the remaining $15,775 (CAD$20,000) would be forgiven. If the loan was not repaid by December 31, 2022, interest at 5% would be charged per annum commencing on January 1, 2023 until maturity on December 31, 2025. The loan is unsecured. On October 8, 2021, the Company repaid $31,551 (CAD$40,000) of the loan and on November 30, 2021, the remaining $15,775 (CAD$20,000) was forgiven. The gain on the loan forgiveness is included in salaries, consulting and management fees in the condensed interim consolidated statements of loss.

On June 30, 2021, the Company acquired Complexity (see Note 4(b)). Complexity had a Paycheck Protection Program ("PPP") loan from J.P. Morgan in the amount of $501,473 under the PPP established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The loan was subject to a note dated April 15, 2020 and may be forgiven to the extent proceeds of the loan are used for eligible expenditures such as payroll and other expenses described in the CARES Act. The loan expires in two years from drawn down date. On July 15, 2021, the Company received full forgiveness of the balance. The gain on the loan forgiveness is included in salaries, consulting and management fees in the condensed interim consolidated statements of loss.

**18. REVENUE AND SEGMENTED INFORMATION**

IFRS 8 requires operating segments to be determined based on the Company's internal reporting to the Chief Operating Decision Maker ("CODM"). The CODM has been determined to be the Company's managing director as he is primarily responsible for the allocation of resources and the assessment of performance. The CODM uses net income, as reviewed at periodic business review meetings, as the key measure of the Company's results as it reflects the Company's underlying performance for the period under evaluation.

The CODM's primary focus for review and resource allocation is the Company as a whole and not any component part of the business. Having considered these factors, management has judged that the Company having three operating segments under IFRS 8.

---

| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS<br> For the three and nine months ended September 30, 2022 and the three and nine months ended August 31, 2021 |
| (Amounts in U.S. dollars) |

---

**18. REVENUE AND SEGMENTED INFORMATION (continued)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Three months ended September 30, 2022** |  |  |  |  |  |
|  | **United Kingdon** | **USA** | **Canada** | **Mexico** | **Total** |
| Revenue channel | **$** | **$** | **$** | **$** | **$** |
| &nbsp;&nbsp;&nbsp; Sponsorship |  |  |  |  | 1554229 |
| &nbsp;&nbsp;&nbsp; Winning/Player buyout/Other | - |  |  |  | 2596812 |
| Total Team Revenue |  |  |  |  | 4151041 |
| &nbsp;&nbsp;&nbsp;&nbsp; Cost of Sales | - |  |  |  | 2356997 |
| Gross profit | - |  |  |  | 1794044 |
| &nbsp;&nbsp;&nbsp; Influencer / on screen talent representation | 1540915 |  |  |  | 1540915 |
| &nbsp;&nbsp;&nbsp; Digital media | - |  |  |  | 4043714 |
| Total Agency Revenue | 1540915 |  |  |  | 5584629 |
| &nbsp;&nbsp;&nbsp;&nbsp; Cost of sales | 1268089 |  |  |  | 3874392 |
| Gross profit | 272826 |  |  |  | 1710237 |
| Content production |  |  |  |  | 397610 |
| Cost of sales | - |  |  |  | 315846 |
| Gross profit | - |  |  |  | 81764 |
| **Nine months ended September 30, 2022** |  |  |  |  |  |
|  | **United Kingdon** | **USA** | **Canada** | **Mexico** | **Total** |
| Revenue channel | **$** | **$** | $ | **$** | **$** |
| &nbsp;&nbsp;&nbsp; Sponsorship |  |  |  |  | 5758471 |
| &nbsp;&nbsp;&nbsp; Winning/Player buyout/Other | - |  |  |  | 2696660 |
| Total Team Revenue |  |  |  |  | 8455131 |
| &nbsp;&nbsp;&nbsp;&nbsp; Cost of Sales | - |  |  |  | 4624129 |
| Gross profit | - |  |  |  | 3831002 |
| &nbsp;&nbsp;&nbsp; Influencer / on screen talent representation | 4035666 |  |  |  | 4035666 |
| &nbsp;&nbsp;&nbsp; Digital media | - |  |  |  | 8481339 |
| Total Agency Revenue | 4035666 |  |  |  | 12517005 |
| &nbsp;&nbsp;&nbsp;&nbsp; Cost of sales | 3280655 |  |  |  | 8137405 |
| Gross profit | 755011 |  |  |  | 4379600 |
| Content production |  |  |  |  | 857110 |
| &nbsp;&nbsp;&nbsp;&nbsp; Cost of sales | - |  |  |  | 819305 |
| Gross profit | - |  |  |  | 37805 |
| Non-current assets | 1071708 |  |  |  | 11285037 |

---

Substantially all of the Company's revenues are recognized as services are rendered throughout the term of the contract for the nine months ended September 30, 2022.

---

| |
|:---|
| **GAMESQUARE ESPORTS INC.** <br> NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS<br> For the three and nine months ended September 30, 2022 and the three and nine months ended August 31, 2021 |
| (Amounts in U.S. dollars) |

---

**18. REVENUE AND SEGMENTED INFORMATION (continued)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Three months ended August 31, 2021\*** | | | | | |
|  | **United Kingdon** | **USA** | **Canada** | **Mexico** | **Total** |
| Revenue channel | **$** | **$** | **$** | **$** | **$** |
| &nbsp;&nbsp;&nbsp; Sponsorship |  |  |  |  | 483662 |
| &nbsp;&nbsp;&nbsp; Winning/Player buyout/Other | - |  | - | 137643 | 137643 |
| Total Team Revenue |  |  |  | 137643 | 621305 |
| &nbsp;&nbsp;&nbsp;&nbsp; Cost of Sales | - |  | - | - | 528455 |
| Gross profit | - |  | - | 137643 | 92850 |
| &nbsp;&nbsp;&nbsp; Influencer / on screen talent representation | 962379 |  |  |  | 962379 |
| &nbsp;&nbsp;&nbsp; Digital media and marketing | - |  | - | - | 395347 |
| Total Agency Revenue | 962379 |  |  |  | 1357726 |
| &nbsp;&nbsp;&nbsp;&nbsp; Cost of sales | 770990 |  | - | - | 893953 |
| Gross profit | 191389 |  | - | - | 463773 |
| **Nine months ended August 31, 2021\*** |  |  |  |  |  |
|  | **United Kingdon** | **USA** | **Canada** | **Mexico** | **Total** |
| Revenue channel | **$** | **$** | **$** | **$** | **$** |
| &nbsp;&nbsp;&nbsp; Sponsorship |  |  |  |  | 483662 |
| &nbsp;&nbsp;&nbsp; Winning/Player buyout/Other | - |  | - | 207909 | 207909 |
| Total Team Revenue |  |  |  | 207909 | 691571 |
| &nbsp;&nbsp;&nbsp;&nbsp; Cost of Sales | - |  | - | - | 528455 |
| Gross profit | - |  | - | 207909 | 163116 |
| &nbsp;&nbsp;&nbsp; Influencer / on screen talent representation | 2594036 |  |  |  | 2594036 |
| &nbsp;&nbsp;&nbsp; Digital media and marketing | - |  | - | - | 406694 |
| Total Agency Revenue | 2594036 |  |  |  | 3000730 |
| &nbsp;&nbsp;&nbsp;&nbsp; Cost of sales | 2172446 |  | - | - | 2295409 |
| Gross profit | 421590 |  | - | - | 705321 |
| Non-current assets | 3393229 |  | 269378 | 644 | 29585068 |

---

\* Comparative figures have been reclassified to conform with presentation adopted for the current period.

**19. SUBSEQUENT EVENTS**

On October 2, 2022, 11,972,900 warrants, with exercised prices of CAD$0.40, expired, unexercised.

On December 7, 2022, the Company granted 2,000,000 restricted share units to its CEO. The RSU's vested immediately.

On December 7, 2022, the Company entered into a Definitive Arrangement Agreement with Engine Gaming & Media Inc. ("Engine") pursuant to which, and subject to the terms and conditions of the Arrangement Agreement, GameSquare and Engine will combine their businesses via an all share deal whereby Engine will acquire all of the issued and outstanding shares of GameSquare in exchange for shares of Engine in accordance with a plan of arrangement of GameSquare under the *Business Corporations Act* (Ontario) (the "Arrangement").

Pursuant to the terms of the Arrangement Agreement, Engine will acquire each outstanding GameSquare share in exchange for 0.08262 of an Engine common share (the "Exchange Ratio"). Each outstanding option of GameSquare will be exchanged for an Engine option entitling the holder to a number of Engine common shares, as adjusted on the basis of the Exchange Ratio, and be subject to exercise thereof in accordance with the terms of the options, including payment of the exercise price, which will also be adjusted based upon the Exchange Ratio. All other material terms of the options will remain the same. Each outstanding restricted share unit of GameSquare will be exchanged for an Engine restricted share unit entitling the holder to a number of Engine common shares, as adjusted on the basis of the Exchange Ratio. All other material terms of the restricted share units will remain the same. Each outstanding warrant of GameSquare will be adjusted pursuant to its governing contractual instrument to entitle the holder to receive, upon due exercise, Engine common shares, adjusted on the basis of the Exchange Ratio.

## Exhibit 99.4

**EXHIBIT 99.4**

**GAMESQUARE ESPORTS INC.**

**MANAGEMENT'S DISCUSSION AND ANALYSIS**

**GameSquare Esports Inc.** <br> **Management's Discussion and Analysis**<br> **For the three and nine months ended September 30, 2022 and August 31, 2021**<br>

For the three and nine months ended September 30, 2022 and August 31, 2021

**<u>INTRODUCTION</u>**

The following Management's Discussion and Analysis ("MD&A") relates to the financial results and related data of GameSquare Esports Inc. (formerly Magnolia Colombia Ltd.) ("GameSquare" or the "Company") and its wholly owned subsidiaries for the three and nine months ended September 30, 2022. This MD&A should be read in conjunction with the Company's condensed interim consolidated financial statements for the three and nine months ended September 30, 2022, its audited consolidated financial statements for the thirteen months ended December 31, 2021 and its annual MD&A for the thirteen months ended December 31, 2021 ("Annual MD&A") filed on the System for Electronic Document Analysis and Retrieval ("SEDAR") at www.sedar.com. The Company's interim financial statements have been prepared in accordance with International Financial Reporting Standard 34 – *Interim Financial Reporting* and do not include all the disclosures required for full annual financial statements in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). On January 1, 2022, the Company elected to change its presentation currency from Canadian dollars ("CAD") to United States dollars ("U.S. dollar" or "USD"). Accordingly, except as otherwise disclosed, all dollar figures in this report are stated in U.S. dollars. Additional information relevant to the Company can be found under the Company's profile on SEDAR. References to "Q3", "this quarter", or "the quarter" are to the three months ended September 30, 2022. References to "this year" or "the year" are to the twelve months ended December 31, 2022. References to "last year" or "prior year" are to the thirteen months ended December 31, 2021. During the thirteen months ended December 31, 2021, the Company changed its fiscal year-end to December 31 and thus the comparative period covers the nine-month period from December 1, 2020 to August 31, 2021 and the three-month period from June 1, 2021 to August 31, 2021.

The commentary has been prepared taking into consideration information available to November 14, 2022. The reader should be aware that historical results are not necessarily indicative of future performance.

**CAUTIONARY STATEMENTS REGARDING FORWARD LOOKING INFORMATION**

Certain statements, other than statements of historical fact, contained in this MD&A constitute "forward-looking information" within the meaning of certain securities laws, including the *Securities Act* (Ontario), and are based on expectations, estimates and projections as of the date on which the statements are made in this MD&A. The words "plans", "expects", "estimated", "anticipates", "intend", "focus", "outlook", "potential", "seek", "strategy", "vision", "goal", "targets" or "believes", or variations of such words and phrases or statements that certain future conditions, actions, events or results "will", "may", "could", "would", "should", "might" or "can", or negative versions thereof, "be taken", "occur", "continue" or "be achieved", and other similar expressions, frequently identify forward-looking statements. Forward-looking statements include, without limitation, statements of the Company with respect to: the size and expected growth of the esports industry, statements regarding the operations, business, financial condition, expected financial results, prospects, opportunities, targets, goals, ongoing objectives, strategies and outlook of GameSquare, including the Company's outlook for 2022 (see "Outlook"), management's expectations for the Content Production business to generate margins of approximately 30%, and the positioning of the Company for sustainable growth. Forward-looking statements are necessarily based upon management's perceptions of historical trends, current conditions and expected future developments, as well as a number of specific factors and assumptions that, while considered reasonable by management as of the date on which the statements are made in this MD&A, are inherently subject to significant business, economic and competitive uncertainties and contingencies which could result in the forward-looking statements ultimately being incorrect. In addition to any factors and assumptions set forth in this MD&A, the material factors and assumptions used to develop the forward-looking information include, but are not limited to: the Company being able to grow its business and being able to execute on its business plan, the Company being able to successfully identify and integrate strategic acquisition opportunities; the Company being able to recognize and capitalize on opportunities earlier than its competitors; the culture and business structure of the Company supporting its growth; the Company continuing to attract qualified personnel to support its development requirements; and that the risk factors noted below, collectively, do not have a material impact on the Company.

By its nature, forward-looking information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct, and that objectives, strategic goals and priorities will not be achieved. Known and unknown risk factors, many of which are beyond the control of the Company, could cause actual results to differ materially from the forward-looking information in this MD&A. Such factors include, without limitation, risks relating to the following, which are discussed in greater detail in the "Risk Factors" section in the Annual Information Form and the "Risks and Uncertainties" section of the Annual MD&A: industry competition, the Company's ability to achieve its objectives, the Company's size and position in the industry and potential growth strategy, the ability of the Company to obtain future financings or complete offerings on acceptable terms, failure to leverage the Company's portfolio across entertainment and media platforms, dependence on the Company's key personnel, ability to execute on future acquisitions, mergers or dispositions, currency exchange rates, laws and government regulations, electronic data compromises and general business, economic, competitive, political and social uncertainties including the impact of the COVID-19 pandemic. These risk factors are not intended to represent a complete list of the factors that could affect the Company and investors are cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking statements.

Page 2 of 18

**GameSquare Esports Inc.** <br> **Management's Discussion and Analysis**<br> **For the three and nine months ended September 30, 2022 and August 31, 2021**<br>

There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are provided for the purpose of providing information about management's expectations and plans relating to the future. The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, or to explain any material difference between subsequent actual events and such forward-looking statements, except to the extent required by applicable law. All forward-looking statements in this MD&A are qualified by these cautionary statements.

**<u>OVERVIEW</u>**

GameSquare is focused on the high growth gaming and esports market. The Company seeks to bridge the gap between global brands and the large gaming and esports communities by providing digital agency and media services, operating top tier competitive esports teams, signing leading content creators and influencer, and by providing services to the industry including content production and consumer product design. GameSquare seeks to accelerate its organic growth by serving brands and esports organizations through its vertically integrated platform. The Company seeks to complement its organic growth through acquisitions of new companies that further strengthen its roster of global brand relationships.

The Company's business is primarily carried out through five entities: GameSquare, Code Red Esports Ltd. ("Code Red"), NextGen Tech, LLC (dba as Complexity Gaming) ("Complexity"), Swingman LLC (dba Cut+Sew / Zoned) ("Cut+Sew"), Fourth Frame Studios, a multidisciplinary creative production studio rooted in gaming, pop culture, and youth, and Mission Supply, which provides merchandise and consumer product design, marketing, and sales consultation to brands and esports organizations.

The Company's common shares ("Common Shares") are traded on the Canadian Securities Exchange (the "CSE") under the symbol "GSQ", the OTCQB Venture Market in the United States operated by the OTC Markets Group Inc. under the symbol "GMSQF" and the Frankfurt Stock Exchange under the symbol "29Q1".

**<u>OUTLOOK</u>**

Management believes GameSquare is well positioned to benefit from the significant growth of the gaming and esports industry. The gaming and esports industry is projected to have a global audience of nearly 650 million viewers by 2025, with live streaming expected to reach more than 1.4 billion by the end of 2025 and the gaming market is expected to generate more than 225 billion of revenue by 2025. (source: NewZoo 2022 Global Esports and Live Streaming Report and NewZoo 2022 Global Games Market Report). GameSquare's revenue growth is expected to be driven by increasing marketing spend from global brands that seek exposure to and connections with these audiences.

The Company's growth strategy focuses on growing audience and reach within its digital agencies, media network, and teams segments. GameSquare's digital agencies, teams, and services segments serve the gaming and esports market, and more broadly sports and entertainment through content creation, audience development and growing brand relationships. The digital agency industry is highly fragmented, and these businesses are generally characterized by high revenue growth with healthy earnings before income, taxes, depreciation and amortization ("EBITDA") margins, which management believes positions the Company well for sustainable growth through organic efforts and presents significant opportunities to grow through accretive acquisitions.

The Company has invested in its sales organization and continues to see significant growth in the number, and the size, of requests for proposals within its agency businesses and greater sales activity within Complexity. The quality and performance of the Company's sales organization resulted in significant growth in the Company's H1 2022 and Q3 2022 revenue and investments in marketing have led to a robust contracted revenue and a significant sales pipeline for 2023. As a result of this momentum, the Company issued 2023 revenue guidance within a range of US$45.0 - $50 million with gross margins of 35% to 40%. The Company's financial profile compares very favorably against its esports peers.

See "Risks and Uncertainties" in the annual MD&A and the Company's 20-F for the year ended December 31, 2021, available under the Company's profile on SEDAR at www.sedar.com.

Page 3 of 18

**GameSquare Esports Inc.** <br> **Management's Discussion and Analysis**<br> **For the three and nine months ended September 30, 2022 and August 31, 2021**<br>

**<u>THIRD QUARTER OF 2022 HIGHLIGHTS</u>**

On July 16, 2022, GameSquare arranged and promoted the *TimTheTatman Tailgate*. The two-day festival brought together gaming, sports, music, and pop culture, and was held at the Ford Center at The Star, in Frisco, Texas. The event was one of the largest of its kind within the esports industry, and the first-ever hosted by an individual creator.

On July 25, 2022, the Company increased 2022 revenue guidance to a range of US$27.5 to $30.0 million, with a gross margin of 35-40%, from its previously issued revenue target of US$23.5 to $25.0 million, an approximately 20% increase.

On August 18, 2022, the Company announced that Fourth Frame Studios is represented by United Talent Agency which represents some of the world's most iconic, barrier-breaking artists, creators and changemakers.

On August 22, 2022, the Company closed the second tranche of its US$3.3 million private placement financing.

On September 8, 2022, The Company launched a new merchandise and consumer products company, Mission Supply, led by Derek Chestnut, former VP Consumer Products at FaZe Clan.

On September 15, 2022, the Company added experienced team members to support accelerating revenue growth, including Jill Peters as Chief Operating Officer, Paolo DiPasquale as Chief Strategy Officer, and regional sales directors.

On September 30, 2022, the Company closed a US$3 million non-brokered private placement financing at C$0.14, a premium to the market closing price.

**<u>SUBSEQUENT EVENTS</u>**

On October 2, 2022, 11,972,900 warrants, with exercise prices of CAD$0.40, expired unexercised.

On October 12, 2022, the Company announced that the prestigious Tempest Awards nominated Complexity Gaming as a finalist in the *Esports Team of the Year* category with TimTheTatman's Tailgate nominated as a finalist in the *New Event of the Year* category.

On October 14, all-pro Dallas Cowboys cornerback Trevon Diggs joined Complexity Stars.

On October 27, the Company issued 2023 revenue guidance of US$45 to US$50 million, and gross margin of 35% to 40%. Revenue guidance represents a 65% increase over 2022 guidance.

On November 2, 2022, Jason Lake, the founder, and CEO of Complexity Gaming, received a *Lifetime Achievement in Esports* award at the Tempest Awards hosted at the HyperX Arena in Las Vegas, Nevada.

On November 2, 2022, the TimTheTatman Tailgate event was awarded the *New Event of the Year* at the Tempest Awards in Las Vegas, Nevada.

On November 9, 2022, Complexity Gaming joined the Halo Competitive Series as a partner team. Joining the HCS provides new revenue generating opportunities that are only provided to partner teams through the release of exclusive content, digital goods, merchandise collaborations and hosting of HCS events within the popular *Halo Infinite* game, published by Xbox Game Studios.

Page 4 of 18

**GameSquare Esports Inc.** <br> **Management's Discussion and Analysis**<br> **For the three and nine months ended September 30, 2022 and August 31, 2021**<br>

**<u>REVIEW OF FINANCIAL RESULTS</u>**

The following financial information is derived from the condensed interim consolidated financial statements for the three and nine months ended September 30, 2022 and the three and nine months ended August 31, 2021.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended** | Three months ended | **Nine months ended** | Nine months ended |
| *($ U.S. dollars)*  | **September 30, 2022** | August 31, 2021 | **September 30, 2022** | August 31, 2021 |
|  |  | (Restated\*) |  | (Restated\*) |
| **Revenue** | $**10133280** | $1979031 | $**21829246** | $3692301 |
| Cost of sales | **6547235** | 1422408 | **13580839** | 2823864 |
| Gross profit | **3586045** | 556623 | **8248407** | 868437 |
| **Other income** |  |  |  |  |
| Interest and other income | **1512** | 2521 | **6053** | 3287 |
| Total other income | **1512** | 2521 | **6053** | 3287 |
| **Expenses** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Salaries, consulting and management fees | **2413028** | 1244060 | **7442140** | 2717564 |
| &nbsp;&nbsp;&nbsp;&nbsp; Player compensation | **426705** | 290383 | **1315745** | 290139 |
| &nbsp;&nbsp;&nbsp;&nbsp; Professional fees | **437672** | 399892 | **1425585** | 734914 |
| &nbsp;&nbsp;&nbsp;&nbsp; General office expenses | **301738** | 167445 | **1155941** | 523653 |
| &nbsp;&nbsp;&nbsp;&nbsp; Selling and marketing expenses | **2780025** | 860106 | **3239090** | 876512 |
| &nbsp;&nbsp;&nbsp;&nbsp; Travel expenses | **361724** | 189486 | **799496** | 288026 |
| &nbsp;&nbsp;&nbsp;&nbsp; Shareholder communications and filing fees | **12454** | 33585 | **101994** | 130554 |
| &nbsp;&nbsp;&nbsp;&nbsp; Interest expense | **56885** | 127493 | **276238** | 129475 |
| &nbsp;&nbsp;&nbsp;&nbsp; Bad debt expense | **114750** | (1898) | **114750** | 45064 |
| &nbsp;&nbsp;&nbsp;&nbsp; Foreign exchange loss | **(20695)** | 10606 | **(66675)** | 5566 |
| &nbsp;&nbsp;&nbsp;&nbsp; Change in provision for reclamation deposit | **15403** |  | **15403** | -75119 |
| &nbsp;&nbsp;&nbsp;&nbsp; Share-based compensation | **265105** | 1351213 | **1206332** | 1954369 |
| &nbsp;&nbsp;&nbsp;&nbsp; Transaction costs | **-** | 4718091 | **-** | 12057971 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gain on disposition of assets available for sale | **(46915)** |  | **(46915)** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Amortization | **669490** | 1579167 | **2030108** | 2261824 |
| Total expenses | **7787369** | 10969629 | **19009232** | 21940512 |
| Loss for the period before income taxes | **(4199812)** | (10410485) | **(10754772)** | (21068788) |
| Income tax (recovery) | **(17770)** | (141975) | **(54276)** | (323381) |
| Loss for the period | **(4182042)** | (10268510) | **(10700496)** | (20745407) |
| **Other comprehensive loss** |  |  |  |  |
| *Items that will subsequently be reclassified to operations:* |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Foreign currency translation | **(372085)** | (100095) | **(507302)** | 220537 |
| **Total comprehensive loss for the period** | $**(4554127)** | $(10368605) | $**(11207798)** | $(20524870) |
| **(Loss) profit for the period attributable to:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Owners of the parent | **(4182042)** | (10294076) | **(10714214)** | (20775628) |
| &nbsp;&nbsp;&nbsp;&nbsp; Non-controlling interest | **-** | 25566 | **13718** | 30221 |
|  | $**(4182042)** | $(10268510) | $**(10700496)** | $(20745407) |
| Basic and diluted net loss per share | $**(0.02)** | $(0.05) | $**(0.04)** | $(0.18) |
| Weighted average number of common shares outstanding - basic and diluted | **272426342** | 191051221 | **255057363** | 117061379 |

---

\* On January 1, 2022, the Company elected to change its presentation currency from CAD to USD. For periods prior to January 1, 2022, the results have been restated to reflect this change. See Note 3 of the Company's condensed interim consolidated financial statements.

Page 5 of 18

**GameSquare Esports Inc.** <br> **Management's Discussion and Analysis**<br> **For the three and nine months ended September 30, 2022 and August 31, 2021**<br>

Readers are advised that Reciprocity's (and its subsidiaries) results have been consolidated from the date of acquisition of March 16, 2021; Complexity's results have been consolidated from the date of acquisition of June 30, 2021; and Cut+Sew's results have been consolidated from the date of acquisition of July 27, 2021.

For the three and nine months ended September 30, 2022, the Company reported losses of $4,182,042 and $10,700,496 or $(0.02) and $(0.04) per Common Share, respectively, compared with losses of $10,268,510 and $20,745,407 or $(0.05) and $(0.18) per Common Share, respectively, for the three and nine months ended August 31, 2021. The decrease in net losses is the result of higher expenses in the prior period on the acquisition of Reciprocity on March 16, 2021, the acquisition of Complexity on June 30, 2021, and the acquisition of Cut&Sew on July 27, 2021, resulting in transactions costs of $4,718,091 and $12,057,971, respectively, during the three and nine months ended August 31, 2021.

**<u>REVENUE AND SEGMENTED INFORMATION</u>**

IFRS 8 requires operating segments to be determined based on the Company's internal reporting to the Chief Operating Decision Maker ("CODM"). The CODM has been determined to be the Company's managing director as he is primarily responsible for the allocation of resources and the assessment of performance. The CODM uses net income, as reviewed at periodic business review meetings, as the key measure of the Company's results as it reflects the Company's underlying performance for the period under evaluation.

The CODM's primary focus for review and resource allocation is the Company as a whole and not any component part of the business. Having considered these factors, management has judged that the Company having three operating segments under IFRS 8.

The Company's "Teams" segment represents its esports teams, which generate revenue through sponsorship, prize and player related revenue. The Company's teams include: Complexity Gaming, R7 Gaming, and LGD Gaming.

The Company's "Agency Services" segment represents its esports agencies which include: Code Red, GCN and Cut+Sew. The Company's agencies generate revenue through talent management, influencer promotional fees and consulting.

The Company's "Content Production" segment represents Fourth Frame Studios and Mission Supply businesses. Fourth Frame is involved with the creation and production of original online content. It produces both white label content for clients and original content which it sells to distributors. Mission Supply provides merchandise and consumer product design, marketing, and sales consultation to brands and esports organizations.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Three months ended September 30, 2022** |  |  |  |  |  |
|  | **United Kingdon** | **USA** | **Canada** | **Mexico** | **Total** |
| Revenue channel | **$** | **$** | **$** | **$** | **$** |
| &nbsp;&nbsp;&nbsp; Sponsorship |  |  |  |  | 1554229 |
| &nbsp;&nbsp;&nbsp; Winning/Player buyout/Other | - |  |  |  | 2596812 |
| Total Team Revenue |  |  |  |  | 4151041 |
| &nbsp;&nbsp;&nbsp;&nbsp; Cost of Sales | - |  |  |  | 2356997 |
| Gross profit | - |  |  |  | 1794044 |
| &nbsp;&nbsp;&nbsp; Influencer / on screen talent representation | 1540915 |  |  |  | 1540915 |
| &nbsp;&nbsp;&nbsp; Digital media | - |  |  |  | 4043714 |
| Total Agency Revenue | 1540915 |  |  |  | 5584629 |
| &nbsp;&nbsp;&nbsp;&nbsp; Cost of sales | 1268089 |  |  |  | 3874392 |
| Gross profit | 272826 |  |  |  | 1710237 |
| Content production |  |  |  |  | 397610 |
| &nbsp;&nbsp;&nbsp;&nbsp; Cost of sales | - |  |  |  | 315846 |
| Gross profit | - |  |  |  | 81764 |
| **Nine months ended September 30, 2022** |  |  |  |  |  |
|  | **United Kingdon** | **USA** | **Canada** | **Mexico** | **Total** |
| Revenue channel | **$** | **$** | $ | **$** | **$** |
| &nbsp;&nbsp;&nbsp; Sponsorship |  |  |  |  | 5758471 |
| &nbsp;&nbsp;&nbsp; Winning/Player buyout/Other | - |  |  |  | 2696660 |
| Total Team Revenue |  |  |  |  | 8455131 |
| &nbsp;&nbsp;&nbsp;&nbsp; Cost of Sales | - |  |  |  | 4624129 |
| Gross profit | - |  |  |  | 3831002 |
| &nbsp;&nbsp;&nbsp; Influencer / on screen talent representation | 4035666 |  |  |  | 4035666 |
| &nbsp;&nbsp;&nbsp; Digital media | - |  |  |  | 8481339 |
| Total Agency Revenue | 4035666 |  |  |  | 12517005 |
| &nbsp;&nbsp;&nbsp;&nbsp; Cost of sales | 3280655 |  |  |  | 8137405 |
| Gross profit | 755011 |  |  |  | 4379600 |
| Content production |  |  |  |  | 857110 |
| &nbsp;&nbsp;&nbsp;&nbsp; Cost of sales | - |  |  |  | 819305 |
| Gross profit | - |  |  |  | 37805 |
| Non-current assets | 1071708 |  |  |  | 11285037 |

---

Page 6 of 18

**GameSquare Esports Inc.** <br> **Management's Discussion and Analysis**<br> **For the three and nine months ended September 30, 2022 and August 31, 2021**<br>

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Three months ended August 31, 2021\*** | | | | | |
|  | **United Kingdon** | **USA** | **Canada** | **Mexico** | **Total** |
| Revenue channel | **$** | **$** | **$** | **$** | **$** |
| &nbsp;&nbsp;&nbsp; Sponsorship |  |  |  |  | 483662 |
| &nbsp;&nbsp;&nbsp; Winning/Player buyout/Other | - |  | - | 137643 | 137643 |
| Total Team Revenue |  |  |  | 137643 | 621305 |
| &nbsp;&nbsp;&nbsp;&nbsp; Cost of Sales | - |  | - | - | 528455 |
| Gross profit | - |  | - | 137643 | 92850 |
| &nbsp;&nbsp;&nbsp; Influencer / on screen talent representation | 962379 |  |  |  | 962379 |
| &nbsp;&nbsp;&nbsp; Digital media and marketing | - |  | - | - | 395347 |
| Total Agency Revenue | 962379 |  |  |  | 1357726 |
| &nbsp;&nbsp;&nbsp;&nbsp; Cost of sales | 770990 |  | - | - | 893953 |
| Gross profit | 191389 |  | - | - | 463773 |
| **Nine months ended August 31, 2021\*** |  |  |  |  |  |
|  | **United Kingdon** | **USA** | **Canada** | **Mexico** | **Total** |
| Revenue channel | **$**  | **$** | **$** | **$**  | **$** |
| &nbsp;&nbsp;&nbsp; Sponsorship |  |  |  |  | 483662 |
| &nbsp;&nbsp;&nbsp; Winning/Player buyout/Other | - |  | - | 207909 | 207909 |
| Total Team Revenue |  |  |  | 207909 | 691571 |
| &nbsp;&nbsp;&nbsp;&nbsp; Cost of Sales | - |  | - | - | 528455 |
| Gross profit | - |  | - | 207909 | 163116 |
| &nbsp;&nbsp;&nbsp; Influencer / on screen talent representation | 2594036 |  |  |  | 2594036 |
| &nbsp;&nbsp;&nbsp; Digital media and marketing | - |  | - | - | 406694 |
| Total Agency Revenue | 2594036 |  |  |  | 3000730 |
| &nbsp;&nbsp;&nbsp;&nbsp; Cost of sales | 2172446 |  | - | - | 2295409 |
| Gross profit | 421590 |  | - | - | 705321 |
| Non-current assets | 3393229 |  | 269378 | 644 | 29585068 |

---

\* On January 1, 2022, the Company elected to change its presentation currency from CAD to USD. For periods prior to January 1, 2022, the results have been restated to reflect this change. See Note 3 of the Company's condensed interim consolidated financial statements. In addition, comparative figures have been reclassified to conform with presentation adopted for the current period.

Page 7 of 18

**GameSquare Esports Inc.** <br> **Management's Discussion and Analysis**<br> **For the three and nine months ended September 30, 2022 and August 31, 2021**<br>

<u>**RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2022**</u>

During the period ended December 31, 2021, the Company changed its fiscal year end from November 30 to December 31. As a result of this change, the results of the quarter ended September 30, 2022, are for the three months ended September 30, 2022 with the comparative period consisting of the three months ended August 31, 2021.

**Revenue**

Revenues for the three months ended September 30, 2022, were $10,133,280, which include $4,151,042 from Complexity, $1,028,572 from Cut+Sew, $2,935,141 from GCN and $1,540,915 from Code Red. In the comparative period ended August 31, 2021, revenues of $1,979,031 which included $962,379 from Code Red, $483,662 from Complexity, $213,541 from GCN and $181,806 from Cut+Sew.

For the three months ended September 30, 2022, the Company's Teams segment generated revenue of $4,151,041 in the U.S. The Teams segment saw $1,770,313 (74.3%) quarter-over-quarter sequential revenue growth over Q2 2022 revenues of $2,380,728 due in large part to the $1,152,000 revenues earned at the *TimTheTatman* tailgate event held in July 2022 in Frisco, Texas. The Company's Agency Services segment generated Q3 2022 revenue of $5,584,629 (United Kingdom $1,540,915 and the U.S. $4,043,714). The Agency segment saw $1,646,465 (41.8%) quarter-over-quarter sequential revenue growth over Q2 2022 revenues of $3,938,164 due mainly to very strong programmatic advertising related revenues at its GCN subsidiary. The Teams segment generated gross profit of $1,794,044, while the Agency Services segment generated gross profit of $1,710,237. The newly added Content Production segment generated a gross profit of $81,764 and only commenced operations during the first quarter of the 2022 year. Longer term, the Company expects the Content Production business to generate gross margins of approximately 30%.

The Company is striving to aggressively grow its revenues to achieve a critical mass in the esports industry.

**Expenses**

Salaries, consulting and management fees incurred during the three months ended September 30, 2022 were $2,413,028 compared to $1,244,060 during the three months ended August 31, 2021. Consulting fees in the current period reflect the consulting fees of GameSquare, Code Red, Complexity and Cut+Sew for the three months ended September 30, 2022. The consulting fees during the comparative period were for GameSquare (Ontario) Inc., Code Red and Reciprocity for the three months ended August 31, 2021, Complexity for the two months ended August 31, 2021, and Cut+Sew for the period from July 28, 2021 to August 31, 2021.

Player compensation for the three months ended September 30, 2022, was $426,705 compared to $290,383 in the comparative period and consisted of salaries and benefits paid to players. The increase reflects the acquisition of teams as part of the Complexity acquisition on June 30, 2021.

Page 8 of 18

**GameSquare Esports Inc.** <br> **Management's Discussion and Analysis**<br> **For the three and nine months ended September 30, 2022 and August 31, 2021**<br>

Professional fees of $437,672 incurred during the three months ended September 30, 2022, were for amounts paid or accrued for audit and legal fees for the consolidated Company. Professional fees incurred during the same period in the prior year were $399,892 and related to legal and audit fees incurred on the acquisitions of Reciprocity, Complexity and Cut+Sew.

General office expenses for the three months ended September 30, 2022, were $301,738, compared to $167,445 in the comparative period. The increase from the prior periods is the result of the acquisitions of Complexity on June 30, 2021, and Cut+Sew on July 27, 2021.

Selling and marketing expenses were $2,780,025 for the three months ended September 30, 2022, versus $860,106 in the comparative period. The increase reflects the significant investment made by the Company to drive sales and align with sponsor deliverables including in person events.

Travel expenses for the three months ended September 30, 2022, were $361,724, versus $189,486 in the comparative period. The increase from the prior period is the result of increased commercial activity of the combined company and the easing of COVID-19 travel restrictions.

Shareholder communications and filing fees during the three months ended September 30, 2022, were $12,454 compared to $33,585 during the comparative period in the prior year. The Company increased activity in the prior period following its acquisitions of Complexity and Cut+Sew and a concurrent private placement financing.

Interest expense during the three months ended September 30, 2022, was $56,885 compared to $127,493 in the comparative period and related to interest on a lease liability acquired on the acquisition of Complexity. The prior period also included interest accrued on a loan acquired as part of the acquisition of Reciprocity which was repaid in the first quarter of 2022.

The Company recorded $265,105 in share-based compensation during the three months ended September 30, 2022, compared to $1,351,213 in the comparative period. Share-based compensation relates to the amortization of the fair market value of options and RSUs granted during the nine months ended September 30, 2022, and the thirteen months ended December 31, 2021. The Company granted 3,800,000 options to directors, officers, and consultants of the Company during the nine months ended September 30, 2022 (thirteen months ended December 31, 2021 - 14,509,241) and 2,250,000 RSUs (thirteen months ending December 31, 2021 - 6,242,158). The options and RSUs have vesting periods of immediate to three years.

During the three months ended August 31, 2021, the Company recorded $4,576,416 in transaction costs on the excess of the purchase price on the acquisition of Complexity over the fair value of assets acquired and other costs. In addition, the Company incurred $141,675 in transaction costs on the acquisition of Cut+Sew.

During the three months ended September 30, 2022, the Company entered into an agreement to sell it's 40% share of Biblos and recorded a gain of $46,915 on the excess of the selling price over the net carrying amount of the assets and liabilities at the date of disposition.

During the three months ended September 30, 2022, the Company recorded amortization expense of $669,490, compared to $1,579,167 in the prior period. Amortization expense consists of the amortization of intangible assets, equipment and right of use assets acquired on the acquisitions of Code Red on October 2, 2020, Reciprocity on March 16, 2021, Complexity on June 30, 2021, and Cut+Sew on July 27, 2021.

Page 9 of 18

**GameSquare Esports Inc.** <br> **Management's Discussion and Analysis**<br> **For the three and nine months ended September 30, 2022 and August 31, 2021**<br>

**<u>RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022</u>**

During the period ended December 31, 2021, the Company changed its fiscal year end from November 30 to December 31. As a result of this change, the results of the nine months ended September 30, 2022, are for the nine months ended September 30, 2022 with the comparative period consisting of the nine months ended August 31, 2021.

**Revenue**

Revenues for the nine months ended September 30, 2022, were $21,829,246, which include $8,355,283 from Complexity, $3,362,955 from Cut+Sew, $5,118,384 from GCN and $4,035,666 from Code Red. In the comparative period ended August 31, 2021, the Company had revenues of $3,692,301, which included $2,594,036 from Code Red, $483,662 from Complexity, $181,806 from Cut+Sew, $224,888 from GCN and $207,909 from Biblos.

For the nine months ended September 30, 2022, the Company's Teams segment generated revenue of $8,355,283 in the U.S. The Company's Agency Services segment generated revenue of $12,517,005 (United Kingdom $4,035,666 and the U.S. $8,481,339). The Teams segment generated gross profit of $3,831,002, while the Agency Services segment generated gross profit of $4,379,600. The newly added Content Production segment generated gross profit of $37,805 and only commenced operations during the first quarter of 2022. Longer term, the Company expects the Content Production business to generate gross margins of approximately 30%.

The $18,136,945 increase in revenues earned for the nine months ended September 30, 2022 compared to the nine months ended August 31, 2021 is due to:: 1) acquisitions of: Reciprocity (March 16, 2021), Complexity (June 30, 2021) and Cut+Sew (July 27, 2021) being included for the full nine month period in the September 30, 2022 revenue numbers whereas these entities were included for less than nine months in the nine months ended August 31, 2021 due to first time consolidation and 2) organic revenue growth in all revenue segments.

The Company is striving to aggressively grow its revenues to achieve a critical mass in the esports industry.

**Expenses**

Salaries, consulting and management fees incurred during the nine months ended September 30, 2022, were $7,442,140 compared to $2,717,564 during the nine months ended August 31, 2021. Consulting fees in the current period reflect the consulting fees of GameSquare, Code Red, Complexity and Cut+Sew for the nine months ended September 30, 2022. The consulting fees during the comparative period were for GameSquare (Ontario) Inc. and Code Red for the nine months ended August 31, 2021, Reciprocity for the period from March 17, 2021, to August 31, 2021, Complexity for the two months ended August 31, 2021, and Cut+Sew for the period from July 28, 2021 to August 31, 2021. Complexity was acquired June 30, 2021, Cut+Sew was acquired July 27, 2021 and Reciprocity (including its subsidiaries) were acquired March 17, 2021.

Player compensation for the nine months ended September 30, 2022, was $1,315,745 compared to $290,139 in the comparative period and consisted of salaries and benefits paid to players. The increase reflects the acquisition of teams as part of the Complexity acquisition.

Professional fees of $1,425,585 incurred during the nine months ended September 30, 2022, were for amounts paid or accrued for audit and legal fees for the consolidated Company. Professional fees incurred during the same period in the prior year were $734,914 and related to legal and audit fees incurred on the acquisitions of Reciprocity, Complexity and Cut+Sew.

General office expenses for the nine months ended September 30, 2022, were $1,155,941, compared to $523,653 in the comparative period. The increase from the prior periods is the result of the acquisitions of Complexity and Cut+Sew.

Selling and marketing expenses were $3,239,090 for the nine months ended September 30, 2022, versus $876,512 in the comparative period. The increase reflects the significant investment made by the Company to drive sales and align with sponsor deliverables including in person events.

Page 10 of 18

**GameSquare Esports Inc.** <br> **Management's Discussion and Analysis**<br> **For the three and nine months ended September 30, 2022 and August 31, 2021**<br>

Travel expenses for the nine months ended September 30, 2022, were $799,496, versus $288,026 in the comparative period. The increase from the prior period is the result of increased commercial activity of the combined company and the easing of COVID-19 travel restrictions.

Shareholder communications and filing fees during the nine months ended September 30, 2022, were $101,994 compared to $130,554 during the comparative period in the prior year. The Company increased activity in the prior period following its public listing through a reverse takeover transaction which closed on October 2, 2020, and its acquisitions of Reciprocity, Complexity and Cut+Sew.

Interest expense during the nine months ended September 30, 2022, was $276,238 compared to $129,475 in the comparative period and related to interest on a loan acquired as part of the acquisition of Reciprocity and a lease liability acquired on the acquisition of Complexity. In addition, on June 30, 2022, the Company issued warrants on a credit facility valued at $69,215 included in interest expense in the condensed consolidated statements of loss and comprehensive loss.

The Company recorded $1,206,332 in share-based compensation during the nine months ended September 30, 2022, compared to $1,954,369 in the comparative period. Share-based compensation relates to the amortization of the fair market value of options and RSUs granted during the nine months ended September 30, 2022, and the thirteen months ended December 31, 2021. The Company granted 3,800,000 options to directors, officers, and consultants of the Company during the nine months ended September 30, 2022, (thirteen months ended December 31, 2021 - 14,509,241) and 2,250,000 RSUs (thirteen months ending December 31, 2021 - 6,242,158). The options and RSUs have vesting periods of immediate to three years.

During the nine months ended Augst 31, 2021, the Company recorded $12,057,971 in transaction costs which included $7,337,463 on the excess of the purchase price on the acquisition of Reciprocity over the fair value of assets acquired and $4,578,833 in transaction costs on the excess of the purchase price on the acquisition of Complexity over the fair value of assets acquired and other transaction costs. In addition, the Company incurred $141,675 in transaction costs on the acquisition of Cut+Sew.

During the nine months ended September 30, 2022, the Company entered into an agreement to sell it's 40% share of Biblos and recorded a gain of $46,915 on the excess of the selling price over the net carrying amount of the assets and liabilities at the date of disposition.

During the nine months ended September 30, 2022, the Company recorded amortization expense of $2,030,108 (nine months ended August 31, 2021 - $2,261,824) related mainly to the amortization of intangible assets, equipment and right of use assets acquired on the acquisitions of Code Red on October 2, 2020, Reciprocity on March 16, 2021, Complexity on June 30, 2021, and Cut+Sew on July 27, 2021.

**<u>CASH FLOWS</u>**

---

| | | | | |
|:---|:---|:---|:---|:---|
| *($ Canadian)* | **Three months ended September 30, 2022** | Three months ended August 31, 2021 | **Nine months ended September 30, 2022** | Nine months ended August 31, 2021 |
| Cash flows (used in) operating activities | $**(2926617)** | (4094214) | **(7682397)** | (6886041) |
| Cash flows from financing activities | **3948321** | 12690530 | **5710119** | 17967195 |
| Cash flows (used in) investing activities | **26** | (1643966) | **18092** | (1242774) |
| Effect of exchange rate changes on cash | **(15945)** | (158070) | **(50944)** | 18369 |
| Net change in cash | $**1005785** | 6794280 | **(2005130)** | 9856749 |

---

The Company used cash of $2,926,617 and $7,682,397, respectively, in operating activities during the three and nine months ended September 30, 2022 compared with $4,094,214 and $6,886,041, respectively, in the comparative periods. The increase in the use of cash for the nine month period was mainly the result of increases in consulting and management fees, professional fees, general office expenses, selling and marketing expenses and shareholder communications as described in the Results of Operations section. Operating activities in the three months ended August 31, 2021, were higher as the Company completed the acquisitions of Complexity and Cut+Sew and incurred $948,941 in cash transaction costs.

Page 11 of 18

The Company repaid loan amounts of $nil and $149,442 and made lease payments of $134,320 and $400,828, respectively, during the three and nine months ended September 30, 2022.

On May 30, 2022, the Company closed a non-brokered private placement financing of 20,040,429 Common Shares for gross proceeds of $2,215,811 and incurred $38,063 in legal and other expenses in connection with the private placement.

On July 20, 2022, the Company closed the second tranche of a non-brokered private placement. The Company issued 926,285 common shares of the Company at a price of CAD$0.14 per common share for gross proceeds of $100,652 (CAD$129,680).

On August 11, 2022, the Company closed the third tranche of a non-brokered private placement. The Company issued 8,988,571 common shares of the Company at a price of CAD$0.14 per common share for gross proceeds of $986,748 (CAD$1,258,400). The Company incurred legal and other expenses totaling $4,759 in connection with the private placement.

On September 30, 2022, the Company closed a non-brokered private placement financing of 29,900,000 units at a price of CAD$0.14 per Unit for gross proceeds of $3,000,000 (CAD$4,186,000).

On February 19, 2021, the Company closed a non-brokered private placement financing of 2,381,477 units at a price of CAD$0.42 per unit for gross proceeds of $792,945 (CAD$1,000,220) and paid share issue costs of $1,165.

On March 4, 2021, the Company closed a bought deal private placement financing of 16,700,000 units of the Company at a price of CAD$0.42 per unit for gross proceeds of $5,550,368 (CAD$7,014,000) and paid share issue costs of $910,799.

On July 22, 2021, the Company closed a bought deal private placement, issuing 21,250,000 units of the Company at a price of CAD$0.40 per unit for gross proceeds of $6,763,747 (CAD$8.5 million). As consideration for the services rendered by the Underwriters in connection with the Offering, the Company has (i) paid the Underwriters a cash commission of $473,462 (CAD$595,000). In addition, the Company incurred legal and other expenses totaling $141,936. On July 22, 2021, the Company also closed a concurrent non-brokered private placement whereby the Jones family and the Goff family subscribed for an additional 21,250,000 units of the Company for gross proceeds of $6,763,746 (CAD$8.5 million) on the same terms as those in the bought deal private placement offering.

During the nine months ended August 31, 2021, the Company received a $15,692 (CAD$20,000) top up on a Canada Emergency Business Account loan. The Company repaid loans of $137,500 and $387,500, respectively, and made lease payments of $88,125 and $88,125, respectively, during the three and nine months ended August 31, 2021. In addition, the Company had 100,000 and 302,766 options exercised for cash proceeds of $4,060, and $83,684, respectively, during the three and nine months ended August 31, 2021.

During the nine months ended September 30, 2022, the Company received $49,356 on the sale of its investment in Irati Energy Corporation and purchased equipment for $31,264.

During the three and nine months ended August 31, 2021, the Company acquired all the issued and outstanding shares of Cut+Sew for a cash payment of $2,385,000 and acquired cash of $434,392 on the acquisition of Complexity and $315,035 on the acquisition of Cut+Sew. During the three and nine months ended August 31, 2021, the Company also purchased equipment for $8,393 and $21,682, respectively. During the nine months ended August 31, 2021, the Company acquired cash of $414,481 on the acquisition of Reciprocity.

Page 12 of 18

**GameSquare Esports Inc.** <br> **Management's Discussion and Analysis**<br> **For the three and nine months ended September 30, 2022 and August 31, 2021**<br>

**<u>SELECTED QUARTERLY FINANCIAL INFORMATION</u>**

The following selected financial information is derived from the consolidated financial statements of the Company for the most recent eight historical quarters and should be read in conjunction with the financial statements of the Company:

---

| | | | | |
|:---|:---|:---|:---|:---|
| *($, except per share amounts)\** | **Sep-22** | **Jun-22** | **Mar-22** | **Dec-21** |
| Revenue | 10133280 | 6655892 | 5040074 | 7198956 |
| Cash flow from operating activities | (2926617) | (719010) | (4036770) | (4206706) |
| Net (loss) | (4182042) | (2524825) | (3993629) | (452943) |
| Per share - basic and diluted | (0.02) | (0.01) | (0.02) | (0.00) |
| Total assets | 24186689 | 22186918 | 20459388 | 23828404 |
| *($, except per share amounts)\** | **Aug-21** | **May-21** | **Feb-21** | **Nov-20** |
| Revenue | 1979031 | 893141 | 820129 | 371974 |
| Cash flow from operating activities | (4094214) | (2358393) | (433434) | (264720) |
| Net (loss) income | (10268510) | (9935967) | (540930) | (2531085) |
| Per share - basic and diluted | (0.05) | (0.09) | (0.01) | (0.07) |
| Total assets | 42286412 | 14141010 | 5347189 | 4761984 |

---

\* On January 1, 2022, the Company elected to change its presentation currency from CAD to USD. For periods prior to January 1, 2022, the results have been restated to reflect this change. See Note 3 of the Company's condensed interim consolidated financial statements.

**<u>MANAGEMENT'S USE OF NON-IFRS MEASURES</u>**

This MD&A contains certain financial performance measures, including "EBITDA" and "Adjusted EBITDA," that are not recognized under International Financial Reporting Standards ("IFRS") and do not have a standardized meaning prescribed by IFRS. As a result, these measures may not be comparable to similar measures presented by other companies. For a reconciliation of these measures to the most directly comparable financial information presented in the Interim Financial Statements in accordance with IFRS, see the section entitled "Reconciliation of Non-IFRS Measures" of this MD&A.

We believe EBITDA is a useful measure to assess the performance of the Company as it provides more meaningful operating results by excluding the effects of expenses that are not reflective of our underlying business performance and other one-time or non-recurring expenses. We define "EBITDA" as net income (loss) before (i) depreciation and amortization; (ii) income taxes; and (iii) interest expense.

*Adjusted EBITDA*

We believe Adjusted EBITDA is a useful measure to assess the performance of the Company as it provides more meaningful operating results by excluding the effects of expenses that are not reflective of our underlying business performance and other one-time or non-recurring expenses. We define "Adjusted EBITDA" as EBITDA adjusted to exclude extraordinary items, non-recurring items and, other non-cash items, including, but not limited to (i) share based compensation expense, (ii) non-recurring legal and professional fees, human-resources, one time events, marketing investments and collections-related expenses, (iv) intangible and goodwill impairments and loss on disposal of assets, and (v) transaction costs related to merger and acquisition activities.

Page 13 of 18

**GameSquare Esports Inc.** <br> **Management's Discussion and Analysis**<br> **For the three and nine months ended September 30, 2022 and August 31, 2021**<br>

<u>Reconciliation of Non-IFRS Measures</u>

A reconciliation of EBITDA and Adjusted EBITDA to the most directly comparable measure determined under IFRS is set out below.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended**<br>**September 30, 2022** | Three months ended<br>August 31, 2021 | **Nine months ended**<br>**September 30, 2022** | Nine months ended<br>August 31, 2021 |
| Net loss as reported | **(4181656)** | **(10268510)** | **(10700110)** | **(20745407)** |
| *Adjustments:* |  |  |  |  |
| Interest expense  | 56499 | 127493 | 275852 | 129475 |
| Amortization | 669490 | 1579167 | 2030108 | 2261824 |
| Income Tax (recovery) | (17770) | (141975) | (54276) | (323381) |
| **EBITDA Loss** | **(3473437)** | **(8703825)** | **(8448426)** | **(18677489)** |
| *Adjustments:* |  |  |  |  |
| Share based compensation | 265105 | 1351213 | 1206332 | 1954369 |
| Change in reclamation provision | 15403 |  | 15403 | (75119) |
| Gain on disposition of assets held for sale | (46915) |  | (46915) |  |
| Transaction costs |  | 4718091 |  | 12057971 |
| Marketing investment | 1197000 | - | 1197000 | - |
| **Adjusted EBITDA Loss** | **(2042844)** | **(2634521)** | **(6076606)** | **(4740268)** |

---

**<u>LIQUIDITY AND CAPITAL RESOURCES</u>**

As at September 30, 2022, the Company had working capital of $5,341,073, compared to $6,769,683 as at December 31, 2021. The decrease in the working capital resulted mostly from the Company's use of cash in operating activities as described in the cash flows section.

The financial statements have been prepared on a going-concern basis, which assumes the realization of assets and liquidation of liabilities in the normal course of business. Continuing operations, as intended, are dependent on management's ability to raise required funding through future equity issuances, its ability to acquire business interests and develop profitable operations or a combination thereof, which is not assured, given today's volatile and uncertain financial markets. The Company may revise programs depending on its working capital position.

Other than its current liabilities of $7,560,579 at September 30, 2022, the Company has no short-term capital spending requirements, and future plans and expectations are based on the assumption that the Company will realize its assets and discharge its liabilities in the normal course of business rather than through a process of forced liquidation. There can be no assurance that the Company will be able to obtain adequate financing in the future or, if available. that such financing will be on acceptable terms. If adequate financing is not available when required, the Company may be required to delay, scale back or eliminate various programs or acquisition plans and may be unable to continue operations. The Company may seek such additional financing through debt or equity offerings. On September 12, 2022, the Company filed a Short Form Base Shelf Prospectus via which it may from time-to-time issue up to C$35 million of common shares, subscription receipts, warrants or common share and warrants combined as a unit offering. Any equity offering will result in dilution to the ownership interests of the Company's shareholders and may result in dilution to the value of such interests.

On May 30, 2022, the Company closed a non-brokered private placement financing and issued 20,040,429 Common Shares at a price of CAD$0.14 per Common Share for gross proceeds of $2,215,811 (CAD$2,805,660).

On July 20, 2022, the Company closed the second tranche of a non-brokered private placement. The Company issued 926,285 common shares of the Company at a price of CAD$0.14 per common share for gross proceeds of $100,652 (CAD$129,680).

Page 14 of 18

**GameSquare Esports Inc.** <br> **Management's Discussion and Analysis**<br> **For the three and nine months ended September 30, 2022 and August 31, 2021**<br>

On August 11, 2022, the Company closed the third tranche of a non-brokered private placement. The Company issued 8,988,571 common shares of the Company at a price of CAD$0.14 per common share for gross proceeds of $986,748 (CAD$1,258,400). The Company incurred legal and other expenses totaling $4,759 in connection with the private placement.

On September 30, 2022, the Company closed a non-brokered private placement financing of 29,900,000 units at a price of CAD$0.14 per unit for gross proceeds of $3,000,000 (CAD$4,186,000).

The Company also entered into a US$5 million credit facility which will provide the Company with access to capital, if required, to execute on its strategic priorities. The Company has not yet drawn down on the credit facility.

GameSquare does not have any contracts or commitments for additional financing other than the previously mentioned US$5 million revolving credit facility. $Nil has been drawn on the facility as of the date of this MD&A.

The Company has a material office lease in Frisco, Texas, United States which runs until April 2029 as described below.

On June 30, 2021, the Company acquired Complexity. Complexity leases a building in Frisco, Texas. The lease commenced on April 9, 2019, and expires in April 2029. The lease had a carrying amount of $2,950,277 at the date of acquisition of Complexity. The amortization charge during the period was $282,473.

The lease liability is measured at the present value of the lease payments that are not paid at the statement of financial position date. Lease payments are apportioned between interest expenses and a reduction of the lease liability using the Company's incremental borrowing rate to achieve a constant rate of interest on the remaining balances of the liabilities. For the nine months ended September 30, 2022, the Company recognized $177,708 (nine months ended August 31, 2021 - $188,316) in interest expense related to its lease liabilities.

A reconciliation of the lease liabilities for the nine months ended September 30, 2022, is as follows:

---

| | | |
|:---|:---|:---|
|  | **September 30, 2022** | December 31, 2021 |
| Balance, beginning of period | $**3000031** | $- |
| Acquisiton of Complexity | **-** | 3138515 |
| Cash outflows  | **(400828)** | (264376) |
| Finance costs | **177708** | 125892 |
|  | $**2776911** | $3000031 |
|  | **September 30, 2022** | December 31, 2021 |
| Lease Liability - current | $**327239** | $301355 |
| Lease Liability - non-current | **2449672** | 2698676 |
|  | $**2776911** | $3000031 |

---

Page 15 of 18

**GameSquare Esports Inc.** <br> **Management's Discussion and Analysis**<br> **For the three and nine months ended September 30, 2022 and August 31, 2021**<br>

**<u>RELATED PARTY TRANSACTIONS</u>**

**Key management personnel compensation:**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended September 30, 2022** | Three months ended August 31, 2021 | **Nine months ended September 30, 2022** | Nine months ended August 31, 2021 |
| Short term employee benefits | $**263957** | $275436 | $**774624** | $785150 |
| Share-based payments | **15436** | 505062 | **244641** | 770730 |
| Short term employee benefits | $**279393** | $780497 | $**1019265** | $1555879 |

---

The Company recorded $244,641 in share-based compensation related to the vesting of options and RSUs granted during the nine months ended September 30, 2022, and the 13 months ended December 31, 2021.

Included in accounts payable and accrued liabilities at September 30, 2022, is $150,288 (December 31 - $178,244) owed to the chairman of the board of directors of the Company. This amount is due on demand, unsecured, and non-interest bearing.

**<u>COMMITMENTS AND CONTINGENCIES</u>**

**Management Commitments**

The Company is party to certain management contracts. These contracts require payments of approximately $1,990,000 to be made upon the occurrence of a change in control to the officers of the Company. The Company is also committed to payments upon termination of approximately $845,000 pursuant to the terms of these contracts. As a triggering event has not taken place, these amounts have not been recorded in the consolidated financial statements.

**Former Activities**

The Company was previously involved in oil and gas exploration activities in Canada, the United States and Colombia. The Company ceased all direct oil and gas exploration activities in 2014. While management estimated that the exposure to additional liabilities from its former oil and gas activities over and above the reclamation deposits held in trust for the Alberta Energy Regulator of CAD$343,691 ($250,742) to be remote, the outcome of any such contingent matters is inherently uncertain.

**Legal Matters** 

From time to time, the Company is named as a party to claims or involved in proceedings, including legal, regulatory and tax related, in the ordinary course of its business. While the outcome of these matters may not be estimable at period end, the Company makes provisions, where possible, for the estimated outcome of such claims or proceedings. Should a loss result from the resolution of any claims or proceedings that differs from these estimates, the difference will be accounted for as a charge to net income (loss) in that period.

**COVID-19** 

The Company's operations could be significantly adversely affected by the effects of a widespread global outbreak of a contagious disease, including the outbreak of respiratory illness caused by COVID-19. The Company cannot accurately predict the impact COVID-19 will have on its operations and the ability of others to meet their obligations with the Company, including uncertainties relating to the ultimate geographic spread of the virus, the severity of the disease, the duration of the outbreak, and the length of travel and quarantine restrictions imposed by governments of affected countries. In addition, a significant outbreak of contagious diseases in the human population could result in a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could further affect the Company's operations and ability to finance its operations.

Page 16 of 18

**GameSquare Esports Inc.** <br> **Management's Discussion and Analysis**<br> **For the three and nine months ended September 30, 2022 and August 31, 2021**<br>

**Government Assistance Loans**

On May 27, 2020, the Company received a CAD$40,000 Canada Emergency Business Account ("CEBA") unsecured loan from the Government of Canada via its commercial bank. On January 11, 2021, the Company received an additional CAD$20,000 increasing the loan to CAD$60,000. The loan was interest free until December 31, 2022, and matured on December 31, 2025. If CAD$40,000 of the loan was repaid by December 31, 2022, the remaining CAD$20,000 would be forgiven. On October 8, 2021, the Company repaid CAD$40,000 of the loan and on November 30, 2021, the remaining CAD$20,000 was forgiven. The gain on the loan forgiveness is included in salaries, consulting and management fees in the condensed interim consolidated statements of loss.

On June 30, 2021, the Company acquired Complexity (see Note 4(b) of the condensed interim consolidated financial statements). Complexity had a Paycheck Protection Program ("PPP") loan from J.P. Morgan in the amount of $501,473 under the PPP established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The loan was subject to a note dated April 15, 2020, and could be forgiven to the extent proceeds of the loan were used for eligible expenditures such as payroll and other expenses described in the CARES Act. The loan was set to expire in two years from the drawn down date. On July 15, 2021, the Company received full forgiveness of the balance. The gain on the loan forgiveness is included in salaries, consulting and management fees in the condensed interim consolidated statements of loss.

**<u>ACCOUNTING POLICIES</u>**

**Significant accounting policies**

The unaudited condensed interim consolidated financial statements were prepared using the same accounting policies and methods as those used in the Company's consolidated financial statements for the thirteen months ended December 31, 2021 with the exception of the following new accounting standards and change in presentation currency noted below.

**Change in presentation currency**

On January 1, 2022, the Company elected to change its presentation currency from Canadian dollars to United States dollars. The change in presentation currency is to better reflect the Company's business activities and to improve investors' ability to compare the Company's financial results with other publicly traded businesses in similar industries. The Company applied the change to U.S. dollar presentation currency retrospectively and restated the comparative financial information as if the new presentation currency had always been the Company's presentation currency.

The functional currency of GameSquare is the Canadian dollar, and the functional currency of the Company's subsidiaries are listed in the table in Note 1 of the condensed interim consolidated financial statements for the three and six months ended June 30, 2022. For periods prior to January 1, 2022, the statements of financial position for each period presented have been translated from the functional currency of the Company and each of its subsidiaries to the new U.S. dollar presentation currency at the rate of exchange prevailing at the respective financial position date with the exception of equity items which have been translated at accumulated historical rates from the date of incorporation of GameSquare (Ontario) Inc. on December 13, 2018. The statements of loss and comprehensive income (loss) were translated at the average exchange rates for the reporting periods, or at the exchange rate prevailing at the date of transactions. Exchange differences arising on translation from functional currency to the U.S. dollar presentation currency have been recognized in other comprehensive income (loss) and accumulated as a separate component of equity.

**New accounting standards**

Effective January 1, 2022, the Company adopted the following new accounting standards.

IAS 37 – Provisions, Contingent Liabilities, and Contingent Assets ("IAS 37") was amended. The amendments clarify that when assessing if a contract is onerous, the cost of fulfilling the contract includes all costs that relate directly to the contract – i.e. a full-cost approach. Such costs include both the incremental costs of the contract (i.e. costs a company would avoid if it did not have the contract) and an allocation of other direct costs incurred on activities required to fulfill the contract – e.g. contract management and supervision, or depreciation of equipment used in fulfilling the contract. The adoption of this standard on January 1, 2022, did not have a material impact on the Company's condensed interim consolidated financial statements.

Page 17 of 18

**GameSquare Esports Inc.** <br> **Management's Discussion and Analysis**<br> **For the three and nine months ended September 30, 2022 and August 31, 2021**<br>

IFRS 3 – Business Combinations ("IFRS 3") was amended. The amendments introduce new exceptions to the recognition and measurement principles in IFRS 3 to ensure that the update in references to the revised conceptual framework does not change which assets and liabilities qualify for recognition in a business combination. An acquirer should apply the definition of a liability in IAS 37 – rather than the definition in the Conceptual Framework – to determine whether a present obligation exists at the acquisition date as a result of past events. For a levy in the scope of IFRIC 21, the acquirer should apply the criteria in IFRIC 21 to determine whether the obligating event that gives rise to a liability to pay the levy has occurred by the acquisition date. In addition, the amendments clarify that the acquirer should not recognize a contingent asset at the acquisition date. The adoption of this standard on January 1, 2022, did not have a material impact on the Company's condensed interim consolidated financial statements.

IAS 16 – Property, Plant and Equipment ("IAS 16") was amended. The amendments introduce new guidance, such that the proceeds from selling items before the related property, plant and equipment is available for its intended use can no longer be deducted from the cost. Instead, such proceeds are to be recognized in profit or loss, together with the costs of producing those items. The adoption of this standard on January 1, 2022, did not have a material impact on the Company's condensed interim consolidated financial statements.

**Accounting pronouncements not yet adopted**

Certain pronouncements were issued by the IASB or the IFRIC that are mandatory for accounting periods commencing on or after January 1, 2023. Many are not applicable or do not have a significant impact to the Company and have been excluded.

IAS 1 – Presentation of Financial Statements ("IAS 1") was amended in January 2020 to provide a more general approach to the classification of liabilities under IAS 1 based on the contractual arrangements in place at the reporting date. The amendments clarify that the classification of liabilities as current or noncurrent is based solely on a company's right to defer settlement at the reporting date. The right needs to be unconditional and must have substance. The amendments also clarify that the transfer of a company's own equity instruments is regarded as settlement of a liability, unless it results from the exercise of a conversion option meeting the definition of an equity instrument. The amendments are effective for annual periods beginning on January 1, 2023.

**<u>Off-balance sheet arrangements</u>**

The Company does not have any off-balance sheet arrangements.

**<u>OUTSTANDING SHARE DATA</u>**

As at the date of this MD&A, the Company has:

a) 150,000 proportionate voting shares outstanding;

b) 292,541,466 Common Shares outstanding;

c) 21,405,958 stock options outstanding with expiry dates between March 16, 2023, and September 14, 2027; and

d) 4,187,877 RSUs of which 335,236 were vested

e) 44,708,227 warrants with expiry dates between November 17, 2022, and September 30, 2027.

<br> <u>Page 18 of 18</u>

## Exhibit 99.5

**EXHIBIT 99.5**

![](egmi_ex995img1.jpg)

**GAMESQUARE ESPORTS INC.**

**NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS**

**AND**

**MANAGEMENT INFORMATION CIRCULAR**

<br> **ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS**<br> **TO BE HELD ON June 21, 2022**<br>

May 4, 2022

---

| | | |
|:---|:---|:---|
| NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS | NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS | 1 |
| MANAGEMENT INFORMATION CIRCULAR | MANAGEMENT INFORMATION CIRCULAR | 1 |
| GENERAL INFORMATION | GENERAL INFORMATION | 1 |
| GENERAL INFORMATION | GENERAL INFORMATION | 1 |
| PROXY SOLICITATION AND VOTING | PROXY SOLICITATION AND VOTING | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp; Record Date | &nbsp;&nbsp;&nbsp;&nbsp; Record Date | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp; Voting Securities | &nbsp;&nbsp;&nbsp;&nbsp; Voting Securities | &nbsp;&nbsp;&nbsp;&nbsp; 2 |
| &nbsp;&nbsp;&nbsp;&nbsp; Solicitation of Proxies | &nbsp;&nbsp;&nbsp;&nbsp; Solicitation of Proxies | &nbsp;&nbsp;&nbsp;&nbsp; 2 |
| &nbsp;&nbsp;&nbsp;&nbsp; Quorum | &nbsp;&nbsp;&nbsp;&nbsp; Quorum | 2 |
| ATTENDING THE MEETING | ATTENDING THE MEETING | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp; Virtual Only Format | &nbsp;&nbsp;&nbsp;&nbsp; Virtual Only Format | &nbsp;&nbsp;&nbsp;&nbsp; 2 |
| &nbsp;&nbsp;&nbsp;&nbsp; Participation by Registered Shareholders and Duly Appointed Proxyholders | &nbsp;&nbsp;&nbsp;&nbsp; Participation by Registered Shareholders and Duly Appointed Proxyholders | &nbsp;&nbsp;&nbsp;&nbsp; 3 |
| &nbsp;&nbsp;&nbsp;&nbsp; Participation by Non-Registered Holders | &nbsp;&nbsp;&nbsp;&nbsp; Participation by Non-Registered Holders | 3 |
| VOTING INFORMATION FOR REGISTERED HOLDERS | VOTING INFORMATION FOR REGISTERED HOLDERS | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp; Voting by Proxy | &nbsp;&nbsp;&nbsp;&nbsp; Voting by Proxy | &nbsp;&nbsp;&nbsp;&nbsp; 4 |
| &nbsp;&nbsp;&nbsp;&nbsp; Revocation of Proxy | &nbsp;&nbsp;&nbsp;&nbsp; Revocation of Proxy | &nbsp;&nbsp;&nbsp;&nbsp; 4 |
| &nbsp;&nbsp;&nbsp;&nbsp; Voting at the Meeting | &nbsp;&nbsp;&nbsp;&nbsp; Voting at the Meeting | 5 |
| VOTING INFORMATION FOR NON-REGISTERED HOLDERS | VOTING INFORMATION FOR NON-REGISTERED HOLDERS | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp; Voting by Proxy | &nbsp;&nbsp;&nbsp;&nbsp; Voting by Proxy | &nbsp;&nbsp;&nbsp;&nbsp; 5 |
| &nbsp;&nbsp;&nbsp;&nbsp; Revocation of Proxy | &nbsp;&nbsp;&nbsp;&nbsp; Revocation of Proxy | &nbsp;&nbsp;&nbsp;&nbsp; 6 |
| &nbsp;&nbsp;&nbsp;&nbsp; Voting at the Meeting | &nbsp;&nbsp;&nbsp;&nbsp; Voting at the Meeting | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp; Delivery of Proxy-Related Materials to Objecting Beneficial Holders | &nbsp;&nbsp;&nbsp;&nbsp; Delivery of Proxy-Related Materials to Objecting Beneficial Holders | 7 |
| REGISTERING A PROXYHOLDER | REGISTERING A PROXYHOLDER | 7 |
| VOTING OF SHARES | VOTING OF SHARES | 7 |
| VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF | VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF | 8 |
| APPROVAL OF MATTERS | APPROVAL OF MATTERS | 8 |
| MATTERS TO BE CONSIDERED AT THE MEETING | MATTERS TO BE CONSIDERED AT THE MEETING | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;1. | <u>Election of Directors</u> | 8 |
| Nominees for Election to the Board | Nominees for Election to the Board | 8 |
| Corporate Cease Trade Order, Bankruptcies, Penalties or Sanctions | Corporate Cease Trade Order, Bankruptcies, Penalties or Sanctions | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;2. | <u>Appointment of Auditors</u> | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;3. | <u>Approval of the Stock Option Plan</u> | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;4. | <u>Approval of the RSU Plan</u> | 14 |
| &nbsp;&nbsp;&nbsp;&nbsp;5. | <u>Amendment to Articles</u> | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;6. | <u>Approval of the Common Share Consolidation</u> | 21 |
| STATEMENT OF EXECUTIVE COMPENSATION | STATEMENT OF EXECUTIVE COMPENSATION | 24 |
| &nbsp;&nbsp;&nbsp;&nbsp; Director Compensation | &nbsp;&nbsp;&nbsp;&nbsp; Director Compensation | &nbsp;&nbsp;&nbsp;&nbsp; 24 |
| &nbsp;&nbsp;&nbsp;&nbsp; Compensation Securities | &nbsp;&nbsp;&nbsp;&nbsp; Compensation Securities | &nbsp;&nbsp;&nbsp;&nbsp; 27 |
| &nbsp;&nbsp;&nbsp;&nbsp; Pension Plan Benefits | &nbsp;&nbsp;&nbsp;&nbsp; Pension Plan Benefits | &nbsp;&nbsp;&nbsp;&nbsp; 30 |
| &nbsp;&nbsp;&nbsp;&nbsp; Termination of Employment, Change in Responsibilities, and Employment Contracts | &nbsp;&nbsp;&nbsp;&nbsp; Termination of Employment, Change in Responsibilities, and Employment Contracts | 30 |
| INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS | INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS | 31 |
| &nbsp;&nbsp;&nbsp;&nbsp; Director and Officer Insurance | &nbsp;&nbsp;&nbsp;&nbsp; Director and Officer Insurance | 31 |
| INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS | INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS | 32 |
| STATEMENT OF GOVERNANCE PRACTICES | STATEMENT OF GOVERNANCE PRACTICES | 32 |
| &nbsp;&nbsp;&nbsp;&nbsp; Director Independence | &nbsp;&nbsp;&nbsp;&nbsp; Director Independence | &nbsp;&nbsp;&nbsp;&nbsp; 32 |
| &nbsp;&nbsp;&nbsp;&nbsp; Board Mandate | &nbsp;&nbsp;&nbsp;&nbsp; Board Mandate | &nbsp;&nbsp;&nbsp;&nbsp; 32 |
| &nbsp;&nbsp;&nbsp;&nbsp; Meetings | &nbsp;&nbsp;&nbsp;&nbsp; Meetings | &nbsp;&nbsp;&nbsp;&nbsp; 33 |
| &nbsp;&nbsp;&nbsp;&nbsp; Board Committees | &nbsp;&nbsp;&nbsp;&nbsp; Board Committees | &nbsp;&nbsp;&nbsp;&nbsp; 33 |
| &nbsp;&nbsp;&nbsp;&nbsp; Directorships and Board Interlocks | &nbsp;&nbsp;&nbsp;&nbsp; Directorships and Board Interlocks | &nbsp;&nbsp;&nbsp;&nbsp; 34 |
| &nbsp;&nbsp;&nbsp;&nbsp; Position Descriptions | &nbsp;&nbsp;&nbsp;&nbsp; Position Descriptions | &nbsp;&nbsp;&nbsp;&nbsp; 34 |
| &nbsp;&nbsp;&nbsp;&nbsp; Orientation and Continuing Education | &nbsp;&nbsp;&nbsp;&nbsp; Orientation and Continuing Education | &nbsp;&nbsp;&nbsp;&nbsp; 34 |
| &nbsp;&nbsp;&nbsp;&nbsp; Ethical Business Conduct | &nbsp;&nbsp;&nbsp;&nbsp; Ethical Business Conduct | &nbsp;&nbsp;&nbsp;&nbsp; 35 |
| &nbsp;&nbsp;&nbsp;&nbsp; Nomination and Election of Directors | &nbsp;&nbsp;&nbsp;&nbsp; Nomination and Election of Directors | &nbsp;&nbsp;&nbsp;&nbsp; 35 |
| &nbsp;&nbsp;&nbsp;&nbsp; Other Board Committees | &nbsp;&nbsp;&nbsp;&nbsp; Other Board Committees | &nbsp;&nbsp;&nbsp;&nbsp; 35 |
| &nbsp;&nbsp;&nbsp;&nbsp; Assessments | &nbsp;&nbsp;&nbsp;&nbsp; Assessments | &nbsp;&nbsp;&nbsp;&nbsp; 35 |
| &nbsp;&nbsp;&nbsp;&nbsp; Risk Oversight | &nbsp;&nbsp;&nbsp;&nbsp; Risk Oversight | 36 |
| OTHER BUSINESS | OTHER BUSINESS | 36 |
| SHAREHOLDER PROPOSALS | SHAREHOLDER PROPOSALS | 36 |
| ADDITIONAL INFORMATION | ADDITIONAL INFORMATION | 36 |
| APPROVAL OF DIRECTORS | APPROVAL OF DIRECTORS | 37 |
| SCHEDULE "A" AUDIT COMMITTEE CHARTER | SCHEDULE "A" AUDIT COMMITTEE CHARTER | A-1 |
| SCHEDULE "B" AMENDMENT RESOLUTION | SCHEDULE "B" AMENDMENT RESOLUTION | B-1 |
| SCHEDULE "C" CONSOLIDATION RESOLUTION | SCHEDULE "C" CONSOLIDATION RESOLUTION | C-1 |

---

**GAMESQUARE ESPORTS INC.**

**NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS**

**NOTICE IS HEREBY GIVEN THAT** an annual meeting (the "**Meeting**") of the holders ("**Shareholders**") of common shares ("**Common Shares**") of GameSquare Esports Inc. ("**GameSquare**" or the "**Corporation**") will be held virtually via live audio webcast available online using <u>https://virtual-meetings.tsxtrust.com/1344</u> on Tuesday June 21, 2022 at 11:00 a.m. (Toronto time) for the following purposes:

1. to receive the audited consolidated financial statements of the Corporation as at and for the thirteen months ended December 31, 2021, together with the auditors' report thereon (the "**Financial Statements** ");

2. to elect directors to the board of directors of the Corporation (the "**Board of Directors**") for the ensuing year;

3. to re-appoint Kreston GTA LLP as auditors of the Corporation for the ensuing year and to authorize the Board of Directors to fix their remuneration;

4. to approve the continuation of the Corporation's rolling stock option plan;

5. to approve the continuation of the Corporation's restricted share unit compensation plan;

6. to consider and, if thought advisable, pass, with or without variation, a special resolution, the full text of which is set forth in Schedule "B" of the accompanying management information circular of the Corporation (the "**Circular** "), to authorize and approve an amendment of the articles of the Corporation to amend the rights, privileges, conditions and restrictions of the existing class of the issued and outstanding common shares of the Corporation (the "**Common Shares**") and to create a new class of shares of the Corporation to be designated as "Proportionate Voting Shares" (the "**Amendment Resolution** ");

7. to consider and, if thought advisable, pass, with or without variation, a special resolution, the full text of which is set forth in Schedule "C" of the Circular, to authorize and approve an amendment of the articles of the Corporation to consolidate the issued and outstanding Common Shares on the basis of one (1) post-consolidation Common Share for four (4) pre-consolidation Common Shares (the "**Consolidation Resolution** "); and

8. to transact such further or other business as may properly come before the Meeting or any postponements or adjournments thereof.

The accompanying Circular, dated May 4, 2022, provides additional information relating to the matters to be dealt with at the Meeting and forms part of this notice.

This year, to deal with the ongoing public health impact of COVID-19 and mitigate risks to the health and safety of the Corporation's Shareholders, employees and other stakeholders, we will hold the Meeting in a virtual only format which will be conducted via live audio webcast available online using <u>https://virtual-meetings.tsxtrust.com/1344</u>. At this website, Shareholders will be able to participate in the Meeting, submit questions and vote their Common Shares while the Meeting is being held. We hope that hosting a virtual meeting helps enable greater participation by our Shareholders by allowing Shareholders that might not otherwise be able to travel to a physical meeting to attend online, while minimizing the health risk that are associated with large gatherings.

In connection with the Meeting, the Corporation has elected to use the Canadian Securities Administrators' "notice-and-access" delivery model, which allows the Corporation to furnish the Circular, the accompanying proxy-related materials, the Financial Statements and associated management's discussion and analysis (collectively, the "**Meeting Materials**") to Shareholders over the internet, resulting in lower costs and a reduction in the environmental impact of the Meeting. Under notice-and-access, Shareholders will continue to receive a proxy or voting instruction form enabling them to vote at the Meeting; however, instead of a paper copy of the Meeting Materials, including the Circular, Shareholders will receive a notice with information on how they may access the Meeting Materials, including the Circular, electronically. On or about May 20, 2022, the Corporation intends to mail Shareholders of record as of May 9, 2022 a notice with information about the notice-and-access process and voting instructions, as well as a proxy or voting instruction form containing instructions on how to access the Meeting Materials. **Shareholders are reminded to review the circular prior to voting**. Shareholders with questions about notice-and-access can call TSX Trust Company toll free at 1-866-600-5869 or by email at <u>tsxtis@tmx.com</u>. The Meeting Materials can be viewed online at the following internet address: <u>https://docs.tsxtrust.com/2310</u> or under the Corporation's SEDAR profile at www.sedar.com. Please note that if you request a paper copy of the Circular, you will not receive a new form of proxy or voting instruction form, so you should retain these forms sent to you in order to vote.

Registered Shareholders and duly appointed proxyholders will be able to attend, submit questions and vote at the Meeting online at <u>https://virtual-meetings.tsxtrust.com/1344</u>. If you are a registered Shareholder, whether or not you plan to attend the Meeting, you are requested to complete, sign, date and return to TSX Trust Company, the transfer agent and registrar of the Common Shares, the enclosed form of proxy. **To be valid, proxies must be deposited with TSX Trust Company, 301 – 100 Adelaide Street West, Toronto, Ontario M5H 4H1 or over the internet at www.voteproxyonline.com no later than 11:00 a.m. (Toronto time) on June 17, 2022, being the second last business day preceding the date of the Meeting, and any instruments appointing proxies to be used at any adjournment or postponement of the Meeting must be so deposited at least 48 hours (excluding Saturdays, Sundays and holidays) prior to the time set for such adjournment or postponement of the Meeting. The deadline for the deposit of proxies may be waived or extended by the Chair of the Meeting at his or her discretion, without notice.**

If you are a non-registered Shareholder (for example, if you hold your Common Shares in an account with a broker, dealer or other intermediary), whether or not you plan to attend the Meeting, you should complete and send the form of proxy or voting instruction form, as applicable, in accordance with the instructions provided by your broker or intermediary. These instructions include the additional step of registering proxyholders with TSX Trust Company, the transfer agent and registrar of the Common Shares, after submitting your form of proxy or voting instruction form. Failure to register the proxyholder with our transfer agent will result in the proxyholder not receiving a "Control Number" or username to participate in the Meeting and only being able to attend as a guest. Non-registered Shareholders who have not duly appointed themselves as proxyholder will be able to attend the Meeting as guests, but will not be able to vote or submit questions at the Meeting. Please refer to the voting instructions provided in the "Proxy Voting Information for Non-Registered Holders" section of the accompanying Circular and call your broker, dealer or other intermediary for information on how you can vote your Common Shares.

The Board of Directors has fixed May 4, 2022 as the record date for the determination of Shareholders entitled to receive notice of and vote at the Meeting. Any Shareholder that has acquired Common Shares after the record date will not be entitled to receive notice of or vote those Common Shares at the Meeting.

**DATED** at Toronto, Ontario this 4<sup>th</sup> day of May, 2022.

**BY ORDER OF THE BOARD OF DIRECTORS**<br>*"Justin Kenna"*<br> Justin Kenna<br> Chief Executive Officer<br> GameSquare Esports Inc.<br>

**GAMESQUARE ESPORTS INC.**

**MANAGEMENT INFORMATION CIRCULAR**

**This management information circular dated May 4, 2022 (the "Circular") is furnished in connection with the solicitation of proxies by or on behalf of management of GameSquare Esports Inc. ("GameSquare" or the "Corporation"), for use at the annual meeting (the "Meeting") of holders ("Shareholders") of common shares ("Common Shares") to be held on June 21, 2022 commencing at 11:00 a.m. (Toronto time), and at all postponements or adjournments thereof, for the purposes set forth in the accompanying notice of the Meeting (the "Notice of Meeting")**.

**GENERAL INFORMATION**

The Corporation has elected to utilize the Canadian Securities Administrators' "notice-and-access" delivery model for distribution of this Circular (along with the audited consolidated financial statements of the Corporation for the thirteen months ended December 31, 2021 and the report of the auditors thereon, as well as the associated management's discussion and analysis) to registered Shareholders and Beneficial Holders (as defined below). Notice-and-access is a set of rules that allows issuers to post electronic versions of proxy-related materials (such as proxy circulars) online, via the SEDAR website at <u>www.sedar.com</u> and one other website, rather than mailing paper copies of such materials to Shareholders.

Notice-and-access directly benefits the Corporation through a substantial reduction in both postage and printing costs and also promotes environmental responsibility by decreasing the large volume of paper documents generated by printing proxy-related materials.

It is anticipated that copies of proxy-related materials will be distributed to registered Shareholders and Beneficial Holders on or about May 20, 2022 pursuant to the notice-and-access regime. It is anticipated that a notice with information about the notice-and-access process and voting instructions as well as a proxy or voting instruction form (collectively, the "**Meeting Materials**") will be distributed to Shareholders on or about May 20, 2022.

Registered Shareholders and Beneficial Holders with questions about notice-and-access can call the Corporation's transfer agent, TSX Trust Company toll free at 1-866-600-5869 or by email at <u>tsxtis@tmx.com</u>. The Meeting Materials can be viewed online at the following internet address: <u>https://docs.tsxtrust.com/2310</u> or under the Corporation's SEDAR profile at www.sedar.com. Please note that if you request a paper copy of the Circular, you will not receive a new form of proxy or voting instruction form, so you should retain these forms sent to you in order to vote

Registered Shareholders and Beneficial Holders may obtain paper copies of the Meeting Materials by postal delivery at no cost to them. Requests may be made up to one year from the date the Circular was filed on <u>www.sedar.com</u> by contacting TSX Trust Company toll free at 1-866-600-5869 or via e-mail to <u>tsxtis@tmx.com</u>. In order to receive the Circular in sufficient time to allow for review and return of the proxy by no later than 11:00 a.m. (Toronto time) on June 17, 2022, a request for paper copies should be sent so that it is received by TSX Trust Company no later than the end of business on June 10, 2022.

**GENERAL INFORMATION**

With respect to dollar amounts referenced herein, "$" refers to Canadian dollars unless otherwise noted. Unless the context otherwise requires, all references hereinafter in this Circular to the "Corporation" refer to GameSquare Esports Inc. and its subsidiary entities as a whole.

References to "management" in this Circular means the persons acting in the capacities of the Corporation's Chief Executive Officer, President and Chief Financial Officer. Any statements in this Circular made by or on behalf of management are made in such persons' capacities as officers of the Corporation and not in their personal capacities.

**PROXY SOLICITATION AND VOTING**

**Record Date**

The board of directors of the Corporation (the "**Directors**", the "**Board**" or the "**Board of Directors**") has fixed May 4, 2022 as the record date (the "**Record Date**") for the determination of Shareholders entitled to receive notice of and vote at the Meeting. Shareholders of record at the close of business on that date will be entitled to vote at the Meeting. Accordingly, any Shareholder that has acquired Common Shares after the Record Date will not be entitled to receive notice of or vote those Common Shares at the Meeting.

**Voting Securities**

The Common Shares are the only outstanding securities of the Corporation that entitle holders to vote at meetings of Shareholders. Each Common Share outstanding on the Record Date is entitled to one vote. Instructions on how registered and non-registered Shareholders may vote their Common Shares are provided below under the headings "Voting Information for Registered Holders" and "Voting Information for Non-Registered Holders".

**Solicitation of Proxies**

The solicitation of proxies for the Meeting will be made primarily by mail, but proxies may also be solicited personally, in writing or by telephone by representatives of the Corporation without special compensation. The Corporation may also engage a third party to provide proxy solicitation services on behalf of management in connection with the solicitation of proxies for the Meeting. The Corporation will bear the cost in respect of the solicitation of proxies for the Meeting and will bear the legal, printing and other costs associated with the preparation of this Circular. The Corporation will also pay the fees and costs of intermediaries for their services in transmitting proxy-related material in accordance with National Instrument 54-101 — *Communication with Beneficial Owners of Securities of a Reporting Issuer* ("**NI 54-101**"). The Corporation is sending the proxy-related materials directly to "NOBOs" (as defined herein), through the services of its transfer agent and registrar, TSX Trust Company (the "**Transfer Agent**"). These costs are expected to be nominal.

**Quorum**

The quorum at the Meeting or any adjournment or postponement thereof (other than at an adjournment or postponement for lack of quorum) will be two persons present, each being a Shareholder entitled to vote thereat or a duly appointed proxyholder or representative for a Shareholder so entitled, who, together, hold or represent by proxy not less than 33 1/3% of the votes attaching to the outstanding Common Shares on the Record Date.

**ATTENDING THE MEETING**

**Virtual Only Format**

This year, to deal with the ongoing public health impact of COVID-19 and mitigate risks to the health and safety of the Corporation's Shareholders, employees and other stakeholders, we will hold the Meeting in a virtual only format which will be conducted via live audio webcast available online using <u>https://virtual-meetings.tsxtrust.com/1344</u>. At this website, Shareholders will be able to participate in the Meeting, submit questions and vote their Common Shares while the Meeting is being held. We hope that hosting a virtual meeting helps enable greater participation by our Shareholders by allowing Shareholders that might not otherwise be able to travel to a physical meeting to attend online, while minimizing the health risk that are associated with large gatherings.

The Meeting will be hosted online only by way of a live audio webcast. A summary of the information Shareholders will need to attend the online Meeting is provided below. The Meeting will begin at 11:00 a.m. on June 21, 2022, and can be accessed online at <u>https://virtual-meetings.tsxtrust.com/1344</u>. Registered Shareholders and duly appointed proxyholders will be able to attend, submit questions and vote at the Meeting. Beneficial Holders who have not duly appointed themselves as proxyholder will be able to attend the Meeting, but can only attend as a guest and will not be able to vote or submit questions at the Meeting.

Please refer to the virtual meeting guide for instructions regarding the registration and participation of Shareholders at the Meeting, including a list of compatible web browsers and contact information for technical support. This guide was enclosed with the materials mailed to registered Shareholders and is also available at <u>https://docs.tsxtrust.com/2310</u>.

It is recommended that Shareholders and proxyholders submit their questions and comments on any formal matters to be considered during the Meeting as soon as possible after joining the Meeting so they can be addressed at the right time. Submission may be made in writing by using the relevant dialog box in the function "Ask a question" during the Meeting. Only registered Shareholders and duly appointed and registered proxyholders may make submissions during the Meeting.

The Chair of the Meeting or members of management present at the Meeting will respond to submissions relating to a matter to be voted on before a vote is held on such matter, if applicable. General questions will be addressed by the Chair of the Meeting and other members of management following the end of the Meeting during the question period.

So that as many submissions as possible are addressed, Shareholders and proxyholders are asked to be brief and concise and to cover only one topic per submission. Submissions from multiple Shareholders on the same topic or that are otherwise related will be grouped, summarized and addressed together.

All Shareholder submissions are welcome. However, the Corporation does not intend to address submissions that:

· are irrelevant to the Corporation, its operations or to the business of the Meeting;

· are related to non-public information;

· are derogatory or otherwise offensive;

· are repetitive or have already been asked by other Shareholders;

· are in furtherance of a Unitholder's personal or business interests; or

· are out of order or not otherwise appropriate as determined by the Chair or Secretary of the Meeting in their reasonable judgment.

In the event of a technical malfunction or other significant problem that disrupts the Meeting, the Chair of the Meeting may adjourn, recess, or expedite the Meeting, or take such other action as the Chair determines is appropriate considering the circumstances.

**Participation by Registered Shareholders and Duly Appointed Proxyholders**

Registered Shareholders that have a 12-digit control number located on their Form of Proxy (as defined below), along with duly appointed proxyholders who were assigned a username by the Transfer Agent (see "Registering a Proxyholder" below), will be able to vote and submit questions during the Meeting. To do so, please go to <u>https://virtual-meetings.tsxtrust.com/1344</u> at least 15 minutes prior to the start of the Meeting to login. Click on "I have a control number" and enter your 12-digit control number or username along with the password "gamesquare2022" (case sensitive).

If a Shareholder who has submitted a proxy attends the Meeting via webcast, any votes cast by such Shareholder on a ballot will be counted and the submitted Form of Proxy will be revoked and disregarded.

It is important that registered Shareholders and duly appointed proxyholders eligible to vote at the Meeting are connected to the internet at all times during the Meeting in order to vote when balloting commences. It is the responsibility of each registered Shareholder and duly appointed proxyholder to ensure connectivity for the duration of the Meeting.

**Participation by Non-Registered Holders**

Beneficial Holders who have not appointed themselves as proxyholder to vote at the Meeting but who wish to attend the Meeting virtually will only be able to attend as a guest by going to <u>https://virtual-meetings.tsxtrust.com/1344</u> at least 15 minutes prior to the start of the Meeting, clicking on "I am a guest". Such Beneficial Holders will be able to listen to the Meeting but will not be able to vote or submit questions.

**VOTING INFORMATION FOR REGISTERED HOLDERS**

A registered Shareholder (that is, a person who holds Common Shares in his, her or its own name as of the Record Date) may vote at the Meeting or may appoint another person as proxyholder in accordance with the instructions below. Registered Shareholders are requested to vote their Common Shares in advance of the proxy voting deadline of 11:00 a.m. (Toronto time) on June 17, 2022, or if the Meeting is adjourned or postponed, not less than 48 hours, excluding Saturdays, Sundays and holidays, prior to such adjourned or postponed Meeting, whether or not they plan to virtually attend the Meeting. The deadline for the deposit of proxies may be waived or extended by the Chair of the Meeting at his or her discretion, without notice.

Registered Shareholders may vote their Common Shares in two ways:

· Vote by proxy; or

· Attend the Meeting and vote online.

**Voting by Proxy**

Together with this Circular, registered Shareholders will also be sent a form of proxy (a "**Form of Proxy**"). To be valid, proxies or instructions must be deposited at the offices of TSX Trust Company at 301 – 100 Adelaide Street West, Toronto, Ontario M5H 4H1, so as not to arrive later than 11:00 a.m. (Toronto time) on June 17, 2022. If the Meeting is postponed or adjourned, proxies or instructions to the Transfer Agent must be deposited 48 hours (excluding Saturdays, Sundays and holidays) before the time set for any reconvened meeting at which the proxy or instructions are to be used. You may also vote online by going to www.voteproxyonline, entering your 12-digit control number and providing your voting instructions, by facsimile by completing, dating and signing the form of proxy and returning it by facsimile to the Transfer Agent at 416-595-9593 or by email at or by email at <u>tsxtis@tmx.com</u>.

The persons named in such Form of Proxy are officers of the Corporation. **A Shareholder who wishes to appoint some other person to represent him, her or it at the Meeting may do so by inserting another person's name in the blank space provided in the Form of Proxy or by completing another proper form of proxy. Such other person need not be a Shareholder of the Corporation.** Registered Shareholders who wish to appoint a proxyholder to represent them at the Meeting must submit their Form of Proxy and follow the instructions set out under "Registering a Proxyholder" in order to register such proxyholder with the Transfer Agent in advance of the Meeting. Registering your proxyholder is an additional step to be completed AFTER your have submitted your Form of Proxy. Failure to register the proxyholder will result in the proxyholder not receiving a control number or username that is required to participate in and vote at the Meeting.

The Form of Proxy (or any other document appointing a proxy) must be in writing and completed and signed by a Shareholder or his or her attorney authorized in writing or, if the Shareholder is a corporation, by an officer or attorney thereof duly authorized. Persons signing as officers, attorneys, executors, administrators and directors or similarly otherwise should so indicate and provide satisfactory evidence of such authority.

**Revocation of Proxy**

A Shareholder that has given a proxy may revoke the proxy or revoke or amend the voting instructions given to the proxyholder: (a) by completing and signing a proxy bearing a later date and depositing it as aforesaid; (b) by depositing an instrument in writing executed by the Shareholder or by his or her attorney authorized in writing confirming the revocation of the previously submitted proxy: (i) by email to Mr. Kevin Wright, President, at IR@gamesquare.com at any time up to and including the last business day preceding the day of the applicable Meeting, or any postponement or adjournment thereof, at which the proxy is to be used, or (ii) with the Chair of the Meeting prior to the commencement of such Meeting on the day of such Meeting or any postponement or adjournment thereof; or (c) in any other manner permitted by law.

If a Shareholder who has submitted a proxy attends the Meeting via webcast, any votes cast by such Shareholder on a ballot will be counted and the submitted Form of Proxy will be revoked and disregarded.

**Voting at the Meeting**

A registered Shareholder that wishes to vote his, her or its Common Shares personally at the Meeting does not need to complete and return the Form of Proxy. To vote online during the Meeting:

· Log in at <u>https://virtual-meetings.tsxtrust.com/1344</u> at least 15 minutes before the Meeting starts;

· Click on "I have a control number";

· Enter your 12-digit control number or username;

· Enter the password: "gamesquare2022" (case sensitive); and

· Vote.

If you attend the Meeting, it is important that you are connected to the internet at all times during the Meeting in order to vote when balloting commences. It is your responsibility to ensure connectivity for the duration of the Meeting. You should allow ample time to log in to the Meeting online and complete the related procedures. The votes of registered Shareholders who elect to vote at the Meeting will be taken and counted at the Meeting.

**VOTING INFORMATION FOR NON-REGISTERED HOLDERS**

**Information set forth in this section is very important to persons who hold Common Shares otherwise than in their own names.** A non-registered securityholder of the Corporation (a "**Beneficial Holder**") who beneficially owns Common Shares, but such Common Shares are registered in the name of an intermediary (such as a securities broker, financial institution, trustee, custodian or other nominee who holds securities on behalf of the Beneficial Holder or in the name of a clearing agency in which the intermediary is a participant) should note that only proxies or instructions deposited by securityholders whose names are on the records of the Corporation as the registered holders of Common Shares can be recognized and acted upon at the Meeting.

Common Shares that are listed in an account statement provided to a Beneficial Holder by a broker are likely not registered in the Beneficial Holder's own name on the records of the Corporation and such Common Shares are more likely registered in the name of CDS Clearing and Depository Services Inc. ("**CDS**") or its nominee.

Beneficial Holders may vote their Common Shares in two ways:

· Vote by proxy; or

· Attend the Meeting and vote online.

**Voting by Proxy**

There are two kinds of Beneficial Shareholders - those who object to their name being made known to the issuers of securities which they own (called "**OBOs**" for Objecting Beneficial Owners) and those who do not object to the issuers of the securities they own knowing who they are (called "**NOBOs**" for Non-Objecting Beneficial Owners).

The Corporation is relying upon the provisions of NI 54-101 that permit it to deliver proxy-related materials directly to its NOBOs. As a result, NOBOs can expect to receive a scannable voting instruction form ("**VIF**") from the Transfer Agent. The VIF is to be completed and returned to TSX Trust Company as set out in the instructions provided on the VIF. TSX Trust Company will tabulate the results of the VIFs received from NOBOs and will provide appropriate instructions at the Meeting with respect to the Common Shares represented by the VIFs they receive.

The proxy-related materials are being sent to both registered Shareholders and Beneficial Holders. If you are a Beneficial Holder, and the Corporation or its agent has sent these materials directly to you, your name, address and information about your holdings of Common Shares, were obtained in accordance with applicable securities regulatory requirements from the intermediary holding Common Shares on your behalf. By choosing to send these materials to you directly, the Corporation (and not the intermediary holding Common Shares on your behalf) has assumed responsibility for (i) delivering these materials to you, and (ii) executing your proper voting instructions. Please return your VIF as specified in the request for voting instructions that was sent to you.

Beneficial Holders who are OBOs should follow the instructions of their intermediary carefully to ensure that their Common Shares are voted at the Meeting. The Corporation has elected to pay for intermediaries to distribute these materials to Beneficial Holders who are OBOs under NI 54-101.

Applicable regulatory policy in Canada requires brokers and other intermediaries to seek voting instructions from Beneficial Holders in advance of securityholders' meetings. Every broker or other intermediary has its own mailing procedures and provides its own return instructions, which should be carefully followed by Beneficial Holders in order to ensure that their Common Shares are voted at the Meeting. Often, the VIF supplied to a Beneficial Holder by its broker is identical to that provided to registered securityholders. However, its purpose is limited to instructing the registered securityholder how to vote on behalf of the Beneficial Holder. Most brokers now delegate responsibility for obtaining instructions from clients to Broadridge Investor Communications Solutions ("**Broadridge**"). Broadridge typically prepares a machine-readable VIF, mails those forms to the Beneficial Holders and asks Beneficial Holders to return the VIF to Broadridge. Broadridge then tabulates the results of all instructions received and provides appropriate instructions representing the voting of the securities to be represented at the Meeting. The VIF must be returned to Broadridge (or other intermediary) well in advance of the Meeting in order to have the Common Shares voted. **A Beneficial Holder receiving a VIF cannot use that VIF to vote Common Shares directly at the Meeting.** You may also vote using the following methods:

· Online – Go to www.proxyvote.com, enter your 16-digit control number and provide your voting instructions.

· Telephone – Call the toll-free number listed on your voting instruction form from a touch tone phone and follow the automatic voice recording instructions to vote. You will need your 16-digit control number to vote.

**Revocation of Proxy**

Each broker or intermediary has its own procedures for revoking a proxy or voting instructions. Accordingly, a Beneficial Holder that wishes to revoke his, her or its proxy or voting instructions should contact such broker or intermediary directly well in advance of the Meeting.

**Voting at the Meeting**

Although Beneficial Holders may not be recognized directly at the Meeting for the purposes of voting Common Shares registered in the name of CDS or their broker or other intermediary, a Beneficial Holder may virtually attend the Meeting as proxyholder for the registered holder and vote their Common Shares in that capacity. **Beneficial Holders who wish to virtually attend the Meeting and vote their own Common Shares as proxyholder for the registered holder should enter their own names in the blank space on the VIF provided to them and return the same to their broker, intermediary or agent in accordance with the instructions provided by such broker, intermediary or agent well in advance of the Meeting and follow the instructions set out under "Registering a Proxyholder" for registering themselves as a proxyholder with the Transfer Agent in advance of the Meeting.** Registering your proxyholder is an additional step to be completed AFTER your have submitted your Form of Proxy. Failure to register the proxyholder will result in the proxyholder not receiving a control number or username that is required to participate in and vote at the Meeting.

Beneficial Holders who have appointed themselves as proxyholders and received a control number or username to join the Meeting, must follow the steps outlined below:

· Log in at <u>https://virtual-meetings.tsxtrust.com/1344</u> at least 15 minutes before the Meeting starts;

· Click on "I have a control number";

· Enter your 12-digit control number or username;

· Enter the password: "gamesquare2022" (case sensitive); and

· Vote.

If you have appointed yourself as a proxyholder to vote your Common Shares at the Meeting, it is important that you are connected to the internet at all times during the Meeting in order to vote when balloting commences. It is your responsibility to ensure connectivity for the duration of the Meeting. You should allow ample time to log in to the Meeting online and complete the related procedures.

**Delivery of Proxy-Related Materials to Objecting Beneficial Holders**

The Corporation intends to pay for intermediaries to deliver proxy-related materials and Form 54-101F7 – *Request for Voting Instructions* to "objecting beneficial owners" in accordance with NI 54-101.

**REGISTERING A PROXYHOLDER**

Shareholders who wish to appoint a proxyholder to represent them at the Meeting, including Beneficial Holders who wish to appoint themselves as proxyholder to attend and vote at the Meeting, must submit their Form of Proxy or VIF, as applicable, prior to registering a proxyholder. Registering a proxyholder is an additional step Shareholders will need to complete after submitting a Form of Proxy or VIF. Failure to register a proxyholder will result in the proxyholder not receiving a control number or username to participate in the Meeting. To register a proxyholder, Shareholders must complete the form to request a control number found at the following website: <u>https://tsxtrust.com/resource/en/75</u> and return the form according to the instructions included on the form via email to: TSXTrustProxyVoting@tmx.com **not later than 11:00 a.m. (Toronto time) on June 17, 2022, or if the Meeting is adjourned or postponed, not less 48 hours, excluding Saturdays, Sundays and holidays, prior to such adjourned or postponed Meeting**, and provide the Transfer Agent with their proxyholder's contact information so that the Transfer Agent may provide the proxyholder with a control number or username via email. Without a control number or username, proxyholders will not be able to participate online at the Meeting.

**VOTING OF SHARES**

The Common Shares represented by proxies will be voted for, against or withheld from voting in accordance with the instructions of the Shareholder on any ballot that may be called for and, if the Shareholder specifies a choice with respect to any matter to be acted upon at the Meeting, Common Shares represented by properly executed proxies will be voted for, against or withheld from voting accordingly. **In the absence of such specification, such Common Shares represented by the proxyholders specified by management of the Corporation in the Form of Proxy will be voted at the Meeting as follows:**

·  **<u>FOR</u> the election of six nominees to the Board of Directors;** 

·  **<u>FOR</u> the re-appointment of Kreston GTA LLP as auditors of the Corporation and to authorize the Board of Directors to fix their remuneration;** 

·  **<u>FOR</u> approving the continuation of the Corporation's rolling stock option plan;** 

·  **<u>FOR</u> approving the continuation of the Corporation's restricted share unit compensation plan;** 

·  **<u>FOR</u> approving the Amendment Resolution; and** 

·  **<u>FOR</u> approving the Consolidation Resolution.** 

For more information on these matters, please see the section entitled "Matters to be Considered at the Meeting" in this Circular.

The persons appointed under the Form of Proxy or VIF provided by a broker or intermediary have discretionary authority with respect to amendments or variations to matters identified in the Notice of Meeting and with respect to other matters that may properly come before the Meeting or any postponement or adjustment. At the time of printing this Circular, management and the Directors are not aware of any such amendments, variations or other matters to be presented for action at the Meeting. If any other matter should properly be presented at the Meeting or any postponement or adjustment, a proxyholder will have the discretion to vote the Common Shares represented by such proxy in accordance with his or her best judgment.

**VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF**

The Corporation is authorized to issue an unlimited number of Common Shares. As of the date of this Circular, there were 244,381,900 Common Shares outstanding. At the Meeting, each Shareholder of record at the close of business on May 9, 2022, the Record Date for the Meeting, will be entitled to one vote for each Common Share held on all matters proposed to come before the Meeting.

To the knowledge of the Directors and executive officers of the Corporation, except as set forth below, there are no persons that beneficially own or exercise control or direction, directly or indirectly, more than 10% of the issued and outstanding Common Shares, other than as set out below:

---

| | | |
|:---|:---|:---|
| **Name**<br>| **Aggregate Number of Common Shares Beneficially Owned, Controlled or Directed, Directly or Indirectly**<br>| **Percentage of Outstanding Common Shares**<br>|
| Blue & Silver Ventures, Ltd.<br>| 62184372<br>| 25.4%<br>|
| Goff NextGen Holdings, LLC | 34894791 | 14.3%<br>|

---

**APPROVAL OF MATTERS**

The approval of matters to be placed before the Meeting, other than the Option Plan Resolution, RSU Plan Resolution, Amendment Resolution and Consolidation Resolution, will be by "ordinary resolution", which is a resolution passed by a simple majority (50% plus 1) of the votes cast by Shareholders of the Corporation present at the Meeting and entitled to vote in person or by proxy. The Option Plan Resolution and RSU Plan Resolution will each be approved by a majority of the disinterested Shareholders of the Corporation. The Amendment Resolution will be approved (a) by "special resolution", which is a resolution passed by a special majority (66 2/3%) of the votes cast by Shareholders of the Corporation present at the Meeting and entitled to vote in person or by proxy ("**Special Resolution**") and (b) a simple majority (50% plus 1) of the votes cast by Shareholders of the Corporation present at the Meeting and entitled to vote in person or by proxy, excluding the votes required to be excluded by the Restricted Share Rules (as defined below). The Consolidation Resolution will be approved by Special Resolution.

**MATTERS TO BE CONSIDERED AT THE MEETING** 

**1. <u>Election of Directors</u>**

**Nominees for Election to the Board**

The articles of the Corporation provide for a minimum of one and a maximum of ten Directors. The Board has the authority to set the number of Directors, such number presently being fixed at six. Each of the six individuals listed below are being recommended for election as Directors, as the term of office for each current Director expires at the close of the Meeting. If elected, they will hold office until the close of the next annual meeting of Shareholders or until their successors are elected or appointed, unless such office is earlier vacated in accordance with the Corporation's by-laws. All of the proposed nominees are currently Directors.

The following tables set forth profiles of the six nominees, including the positions and offices with the Corporation now held by each nominee, the present principal occupation or employment of each nominee, the period during which each nominee has served as a Director and the number of securities of the Corporation (including Common Shares, options to purchase Common Shares, RSUs (as defined herein), in each case if applicable) beneficially owned, or controlled or directed, directly or indirectly, by each nominee as at the date of this Circular. The information as to securities beneficially owned, or controlled or directed, directly or indirectly, by each nominee has been furnished by the respective proposed nominee.

The Board has determined that four of the six individuals nominated for election as a Director at the Meeting are independent. The only Directors who are not independent are Mr. Kenna, due to also being the Chief Executive Officer of the Corporation, and Mr. Wright, due to also being the President of the Corporation. All of the members of the Audit Committee are independent Directors. For more information about the Corporation's independence standards and assessment, see the section of this Circular entitled "Statement of Governance Practices – Director Independence". For information on the compensation paid to Directors, see the section of this Circular entitled "Statement of Executive Compensation ". In addition, a description of the role of the Board is included in the section of this Circular entitled "Statement of Governance Practices – Board Mandate".

**It is the intention of the individuals designated by management in the enclosed form of proxy to vote <u>FOR</u> the election of each of the nominees listed below, to hold office until the close of the next annual meeting of Shareholders or until their successors are duly elected or appointed, unless specifically instructed in the proxy to withhold such vote**. Management of the Corporation does not contemplate that any of the nominees will be unable or unwilling to serve as a Director; however, if such event should occur prior to the Meeting, the persons designated by management in the enclosed form of proxy reserve the right to vote in their discretion for other nominees.

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| | | | |
|:---|:---|:---|:---|
| **Craig Armitage**<br> Toronto, Ontario<br> Age: 49<br> Director since: September 2020<br> *Independent Director* | Mr. Armitage is a highly experienced capital markets practitioner, having spent the past 20 years advising and working with growth companies. Craig was a senior member of Canada's largest investor relations agency, where he led the technology and financial services practices. Previously, he led investor relations and communications at one of Canada's largest independent asset management companies. During his time in the field, Craig has gained extensive experience in all areas of investor relations, initial public officers, mergers and acquisitions, investor outreach, media and crisis management. Mr. Armitage served on the board of directors of CIRI Ontario for several years. He is a graduate of the University of Western Ontario. | Mr. Armitage is a highly experienced capital markets practitioner, having spent the past 20 years advising and working with growth companies. Craig was a senior member of Canada's largest investor relations agency, where he led the technology and financial services practices. Previously, he led investor relations and communications at one of Canada's largest independent asset management companies. During his time in the field, Craig has gained extensive experience in all areas of investor relations, initial public officers, mergers and acquisitions, investor outreach, media and crisis management. Mr. Armitage served on the board of directors of CIRI Ontario for several years. He is a graduate of the University of Western Ontario. | Mr. Armitage is a highly experienced capital markets practitioner, having spent the past 20 years advising and working with growth companies. Craig was a senior member of Canada's largest investor relations agency, where he led the technology and financial services practices. Previously, he led investor relations and communications at one of Canada's largest independent asset management companies. During his time in the field, Craig has gained extensive experience in all areas of investor relations, initial public officers, mergers and acquisitions, investor outreach, media and crisis management. Mr. Armitage served on the board of directors of CIRI Ontario for several years. He is a graduate of the University of Western Ontario. |
| **Craig Armitage**<br> Toronto, Ontario<br> Age: 49<br> Director since: September 2020<br> *Independent Director* | **Board/Committee Membership** | **Principal Occupation(s)** | **Principal Occupation(s)** |
| **Craig Armitage**<br> Toronto, Ontario<br> Age: 49<br> Director since: September 2020<br> *Independent Director* | Board<br> Audit Committee | Capital markets communications consultant with LodeRock Advisors | Capital markets communications consultant with LodeRock Advisors |
| **Securities of the Corporation of the Corporation beneficially owned, or controlled or directed, directly or indirectly** | **Securities of the Corporation of the Corporation beneficially owned, or controlled or directed, directly or indirectly** | **Securities of the Corporation of the Corporation beneficially owned, or controlled or directed, directly or indirectly** | **Securities of the Corporation of the Corporation beneficially owned, or controlled or directed, directly or indirectly** |
| **Common Shares** <br> **(#)** | **Common Shares** <br> **(#)** | **Common Shares** <br> **(#)** | **Options**<br> **(#)** |
| Nil | Nil | Nil | 250000 |

---

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| | | | |
|:---|:---|:---|:---|
| **Travis Goff**<br> Dallas, Texas<br> Age: 37<br> Director since: September 2021<br> *Independent Director*  | Travis Goff is President of Goff Capital, Inc., the family office of John C. Goff, and manages its existing and prospective public and private investments. He currently serves as a board member of Complexity Gaming, ProbablyMonsters, Alto, Wyre, Cascade Engineering Technologies and Kilburn Media. Travis previously served as a board member of the NASDAQ listed company Mid-Con Energy Partners. Mr. Goff received a Bachelor of Arts in Economics from the University of Texas. | Travis Goff is President of Goff Capital, Inc., the family office of John C. Goff, and manages its existing and prospective public and private investments. He currently serves as a board member of Complexity Gaming, ProbablyMonsters, Alto, Wyre, Cascade Engineering Technologies and Kilburn Media. Travis previously served as a board member of the NASDAQ listed company Mid-Con Energy Partners. Mr. Goff received a Bachelor of Arts in Economics from the University of Texas. | Travis Goff is President of Goff Capital, Inc., the family office of John C. Goff, and manages its existing and prospective public and private investments. He currently serves as a board member of Complexity Gaming, ProbablyMonsters, Alto, Wyre, Cascade Engineering Technologies and Kilburn Media. Travis previously served as a board member of the NASDAQ listed company Mid-Con Energy Partners. Mr. Goff received a Bachelor of Arts in Economics from the University of Texas. |
| **Travis Goff**<br> Dallas, Texas<br> Age: 37<br> Director since: September 2021<br> *Independent Director*  | **Board/Committee Membership** | **Principal Occupation(s)** | **Principal Occupation(s)** |
| **Travis Goff**<br> Dallas, Texas<br> Age: 37<br> Director since: September 2021<br> *Independent Director*  | Board | President, Goff Capital Inc. | President, Goff Capital Inc. |
| **Securities of the Corporation of the Corporation beneficially owned, or controlled or directed, directly or indirectly** | **Securities of the Corporation of the Corporation beneficially owned, or controlled or directed, directly or indirectly** | **Securities of the Corporation of the Corporation beneficially owned, or controlled or directed, directly or indirectly** | **Securities of the Corporation of the Corporation beneficially owned, or controlled or directed, directly or indirectly** |
| **Common Shares** <br> **(#)** | **Common Shares** <br> **(#)** | **Common Shares** <br> **(#)** | **Options**<br> **(#)** |
| 500,000\* | 500,000\* | 500,000\* | Nil |

---

\*Travis Goff is the president of Goff NextGen Holdings, LLC. Goff NextGen Holdings, LLC beneficially owns 34,894,791 Common Shares.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Justin Kenna**<br> Los Angeles, California<br> Age: 37<br> Director since: January 2021<br> *Non-Independent Director* | Mr. Kenna serves as CEO of GameSquare Esports. Prior to joining GameSquare, Justin served as CFO for FaZe Clan, one of the world's leading gaming brands. During his tenure at FaZe Clan, the organization grew into one of the most valuable gaming companies, as noted in Forbes' The Most Valuable Esports Companies 2020. Mr. Kenna was previously the Director of Finance at Madison + Vine, a next-gen creative studio, and served in various roles at Goldman Sachs, Deloitte, and Ernst & Young. Justin is a Chartered Professional Accountant and received a Bachelor of Business, Accountancy from the RMIT University in Melbourne, Australia. | Mr. Kenna serves as CEO of GameSquare Esports. Prior to joining GameSquare, Justin served as CFO for FaZe Clan, one of the world's leading gaming brands. During his tenure at FaZe Clan, the organization grew into one of the most valuable gaming companies, as noted in Forbes' The Most Valuable Esports Companies 2020. Mr. Kenna was previously the Director of Finance at Madison + Vine, a next-gen creative studio, and served in various roles at Goldman Sachs, Deloitte, and Ernst & Young. Justin is a Chartered Professional Accountant and received a Bachelor of Business, Accountancy from the RMIT University in Melbourne, Australia. | Mr. Kenna serves as CEO of GameSquare Esports. Prior to joining GameSquare, Justin served as CFO for FaZe Clan, one of the world's leading gaming brands. During his tenure at FaZe Clan, the organization grew into one of the most valuable gaming companies, as noted in Forbes' The Most Valuable Esports Companies 2020. Mr. Kenna was previously the Director of Finance at Madison + Vine, a next-gen creative studio, and served in various roles at Goldman Sachs, Deloitte, and Ernst & Young. Justin is a Chartered Professional Accountant and received a Bachelor of Business, Accountancy from the RMIT University in Melbourne, Australia. | Mr. Kenna serves as CEO of GameSquare Esports. Prior to joining GameSquare, Justin served as CFO for FaZe Clan, one of the world's leading gaming brands. During his tenure at FaZe Clan, the organization grew into one of the most valuable gaming companies, as noted in Forbes' The Most Valuable Esports Companies 2020. Mr. Kenna was previously the Director of Finance at Madison + Vine, a next-gen creative studio, and served in various roles at Goldman Sachs, Deloitte, and Ernst & Young. Justin is a Chartered Professional Accountant and received a Bachelor of Business, Accountancy from the RMIT University in Melbourne, Australia. |
| **Justin Kenna**<br> Los Angeles, California<br> Age: 37<br> Director since: January 2021<br> *Non-Independent Director* | **Board/Committee Membership** | **Board/Committee Membership** | **Principal Occupation(s)** | **Principal Occupation(s)** |
| **Justin Kenna**<br> Los Angeles, California<br> Age: 37<br> Director since: January 2021<br> *Non-Independent Director* | Board | Board | Chief Executive Officer of the Corporation | Chief Executive Officer of the Corporation |
| **Securities of the Corporation beneficially owned, or controlled or directed, directly or indirectly** | **Securities of the Corporation beneficially owned, or controlled or directed, directly or indirectly** | **Securities of the Corporation beneficially owned, or controlled or directed, directly or indirectly** | **Securities of the Corporation beneficially owned, or controlled or directed, directly or indirectly** | **Securities of the Corporation beneficially owned, or controlled or directed, directly or indirectly** |
| **Common Shares** <br> **(#)** | **Common Shares** <br> **(#)** | **Options**<br> **(#)** | **Options**<br> **(#)** | **RSUs**<br> **(#)** |
| 1054100 | 1054100 | 2000000 | 2000000 | 1000000 |

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| | | |
|:---|:---|:---|
| **Paul LeBreux**<br> Toronto, Ontario<br> Age: 55<br> Director since: March 2021<br> *Independent Director*  | Paul LeBreux is a leading international tax expert and businessman. With nearly three decades of experience, Paul is an industry leader and published author in his fields of expertise. He was a founding partner and co-managing partner of the Toronto law firm Harris & Harris for nearly 10 years where his legal practice included, mergers and acquisitions, corporate financings, corporate reorganizations, restructurings, amalgamations, wind-ups and divestitures, and domestic and international tax, estate, and trust planning. Paul is a past Chair of the Society of Trust and Estate Practitioners (Canada) and a past Chair of the STEP Canada Technical Committee. Paul is a partner in the Globacor Group of Companies and a partner at Moodys Tax Law LLP. Mr. LeBreux received a Bachelor of Laws from the University of Ottawa and a Master of Laws from York University, Osgood Hall Law School. | Paul LeBreux is a leading international tax expert and businessman. With nearly three decades of experience, Paul is an industry leader and published author in his fields of expertise. He was a founding partner and co-managing partner of the Toronto law firm Harris & Harris for nearly 10 years where his legal practice included, mergers and acquisitions, corporate financings, corporate reorganizations, restructurings, amalgamations, wind-ups and divestitures, and domestic and international tax, estate, and trust planning. Paul is a past Chair of the Society of Trust and Estate Practitioners (Canada) and a past Chair of the STEP Canada Technical Committee. Paul is a partner in the Globacor Group of Companies and a partner at Moodys Tax Law LLP. Mr. LeBreux received a Bachelor of Laws from the University of Ottawa and a Master of Laws from York University, Osgood Hall Law School. |
| **Paul LeBreux**<br> Toronto, Ontario<br> Age: 55<br> Director since: March 2021<br> *Independent Director*  | **Board/Committee Membership** | **Principal Occupation(s)** |
| **Paul LeBreux**<br> Toronto, Ontario<br> Age: 55<br> Director since: March 2021<br> *Independent Director*  | Board<br> Audit Committee (Chair) | Partner at Globacor Tax Advisors |
| **Securities of the Corporation of the Corporation beneficially owned, or controlled or directed, directly or indirectly** | **Securities of the Corporation of the Corporation beneficially owned, or controlled or directed, directly or indirectly** | **Securities of the Corporation of the Corporation beneficially owned, or controlled or directed, directly or indirectly** |
| **Common Shares** <br> **(#)** | **Common Shares** <br> **(#)** | **Options**<br> **(#)** |
| 1074649 | 1074649 | 100000 |

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| | | | |
|:---|:---|:---|:---|
| **Tom Walker**<br> Dallas, Texas<br> Age: 47<br> Director since: September 2021<br> *Independent Director*  | Tom Walker is the Chief Financial Officer of the Dallas Cowboys Football Club and for the Jones Family Office. He previously served at KPMG in various roles across income and transfer tax for high net worth individuals, international tax and legal for ultra high net worth individuals, and global risk for KPMG in North American and European offices. Mr. Walker received a Bachelor of Science and Master of Science from Oklahoma State University. | Tom Walker is the Chief Financial Officer of the Dallas Cowboys Football Club and for the Jones Family Office. He previously served at KPMG in various roles across income and transfer tax for high net worth individuals, international tax and legal for ultra high net worth individuals, and global risk for KPMG in North American and European offices. Mr. Walker received a Bachelor of Science and Master of Science from Oklahoma State University. | Tom Walker is the Chief Financial Officer of the Dallas Cowboys Football Club and for the Jones Family Office. He previously served at KPMG in various roles across income and transfer tax for high net worth individuals, international tax and legal for ultra high net worth individuals, and global risk for KPMG in North American and European offices. Mr. Walker received a Bachelor of Science and Master of Science from Oklahoma State University. |
| **Tom Walker**<br> Dallas, Texas<br> Age: 47<br> Director since: September 2021<br> *Independent Director*  | **Board/Committee Membership** | **Principal Occupation(s)** | **Principal Occupation(s)** |
| **Tom Walker**<br> Dallas, Texas<br> Age: 47<br> Director since: September 2021<br> *Independent Director*  | Board<br> Audit Committee | Chief Financial Officer, Dallas Cowboys Football Club | Chief Financial Officer, Dallas Cowboys Football Club |
| **Securities of the Corporation of the Corporation beneficially owned, or controlled or directed, directly or indirectly** | **Securities of the Corporation of the Corporation beneficially owned, or controlled or directed, directly or indirectly** | **Securities of the Corporation of the Corporation beneficially owned, or controlled or directed, directly or indirectly** | **Securities of the Corporation of the Corporation beneficially owned, or controlled or directed, directly or indirectly** |
| **Common Shares** <br> **(#)** | **Common Shares** <br> **(#)** | **Common Shares** <br> **(#)** | **Options**<br> **(#)** |
| Nil | Nil | Nil | Nil |

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| | | | | |
|:---|:---|:---|:---|:---|
| **Kevin Wright**<br> Toronto, Ontario<br> Age: 48<br> Director since: September 2020<br> *Non-Independent Director* | Kevin Wright is GameSquare's President and Chairman of the Board and previously served as GameSquare's Chief Executive Officer. Prior to joining GameSquare, Mr. Wright served in a variety of roles in the finance and communications industries, including as a consultant for LodeRock Advisors and Rogers Communications and as an equity analyst covering technology, fintech, gaming and diversified financials companies for Canaccord Genuity and publicly listed telecommunications and wireless companies for Macquarie Capital. Mr. Wright received a Master of Business Administration from the University of Western Ontario, Richard Ivey School of Business. | Kevin Wright is GameSquare's President and Chairman of the Board and previously served as GameSquare's Chief Executive Officer. Prior to joining GameSquare, Mr. Wright served in a variety of roles in the finance and communications industries, including as a consultant for LodeRock Advisors and Rogers Communications and as an equity analyst covering technology, fintech, gaming and diversified financials companies for Canaccord Genuity and publicly listed telecommunications and wireless companies for Macquarie Capital. Mr. Wright received a Master of Business Administration from the University of Western Ontario, Richard Ivey School of Business. | Kevin Wright is GameSquare's President and Chairman of the Board and previously served as GameSquare's Chief Executive Officer. Prior to joining GameSquare, Mr. Wright served in a variety of roles in the finance and communications industries, including as a consultant for LodeRock Advisors and Rogers Communications and as an equity analyst covering technology, fintech, gaming and diversified financials companies for Canaccord Genuity and publicly listed telecommunications and wireless companies for Macquarie Capital. Mr. Wright received a Master of Business Administration from the University of Western Ontario, Richard Ivey School of Business. | Kevin Wright is GameSquare's President and Chairman of the Board and previously served as GameSquare's Chief Executive Officer. Prior to joining GameSquare, Mr. Wright served in a variety of roles in the finance and communications industries, including as a consultant for LodeRock Advisors and Rogers Communications and as an equity analyst covering technology, fintech, gaming and diversified financials companies for Canaccord Genuity and publicly listed telecommunications and wireless companies for Macquarie Capital. Mr. Wright received a Master of Business Administration from the University of Western Ontario, Richard Ivey School of Business. |
| **Kevin Wright**<br> Toronto, Ontario<br> Age: 48<br> Director since: September 2020<br> *Non-Independent Director* | **Board/Committee Membership** | **Board/Committee Membership** | **Principal Occupation(s)** | **Principal Occupation(s)** |
| **Kevin Wright**<br> Toronto, Ontario<br> Age: 48<br> Director since: September 2020<br> *Non-Independent Director* | Board (Chair) | Board (Chair) | President of the Corporation | President of the Corporation |
| **Securities of the Corporation beneficially owned, or controlled or directed, directly or indirectly** | **Securities of the Corporation beneficially owned, or controlled or directed, directly or indirectly** | **Securities of the Corporation beneficially owned, or controlled or directed, directly or indirectly** | **Securities of the Corporation beneficially owned, or controlled or directed, directly or indirectly** | **Securities of the Corporation beneficially owned, or controlled or directed, directly or indirectly** |
| **Common Shares** <br> **(#)** | **Common Shares** <br> **(#)** | **Options**<br> **(#)** | **Options**<br> **(#)** | **RSUs**<br> **(#)** |
| 2878000 | 2878000 | 425000 | 425000 | Nil |

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**Corporate Cease Trade Order, Bankruptcies, Penalties or Sanctions**

To the knowledge of the Corporation, no person proposed to be nominated for election as a Director at the Meeting is, or was within the ten years prior to the date hereof has been, a director, chief executive officer or chief financial officer of any company that (i) was subject to a cease trade order or similar order or an order that denied the company access to any exemption under securities legislation, in each case in effect for a period of more than 30 consecutive days, that was issued while that person was acting in the capacity of a director, chief executive officer or chief financial officer of that company, or (ii) was subject to such an order that was issued after that person ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while the person was acting in that capacity.

To the knowledge of the Corporation, other than as set out below, no proposed Director (nor any personal holding company of any such individual): (i) is, as of the date of this Circular, or has been within the ten years before the date of this Circular, a director or executive officer of any company (including the Corporation) that, while that individual was acting in that capacity, or within a year of that individual ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or (ii) has, within the ten years before the date of this Circular, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold its assets.

On January 19, 2021, Wellflex Energy Partners Fort Worth, LLC was issued a final order of dismissal by the United States Bankruptcy Court. Goff Capital, Inc. was the manager of Wellflex Energy Partners Fort Worth, LLC and Travis Goff, a director of the Company, is the President of Goff Capital, Inc.

To the knowledge of the Corporation, no proposed Director (nor any personal holding company of any such individual) has been subject to: (i) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or (ii) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable Shareholder in deciding whether to vote for the proposed Director.

**2. <u>Appointment of Auditors</u>**

It is proposed that Kreston GTA LLP, the current auditors of the Corporation, be appointed as the auditors of the Corporation, to hold office until the close of the next annual meeting of Shareholders, or until a successor is appointed, and that the Directors be authorized to fix Kreston GTA LLP's remuneration. The Audit Committee has recommended to the Board, and the Board has approved, the nomination of Kreston GTA LLP for such appointment. Kreston GTA LLP have been the auditors of the Corporation since 2021.

**It is the intention of the individuals designated by management in the enclosed form of proxy to vote <u>FOR</u> the appointment of Kreston GTA LLP as auditors of the Corporation to hold office until the close of the next annual meeting of Shareholders and in favour of authorizing the Directors to fix the remuneration of the auditors, unless specifically instructed in the proxy to withhold such vote.**

**3. <u>Approval of the Stock Option Plan</u>**

The Corporation has a stock option plan which was most recently approved by the Shareholders at the last annual and special meeting of the Shareholders held on September 21, 2021 (the "**Plan**" or "**Stock Option Plan**").

The Stock Option Plan is designed to advance the interests of the Corporation by encouraging employees, officers, directors and consultants to have equity participation in the Corporation through the acquisition of Common Shares. The following is a summary of the material terms of the Stock Option Plan, which is qualified in its entirety by the provisions of the Stock Option Plan. A copy of the Stock Option Plan was attached to the Corporation's proxy circular mailed to Shareholders in connection with the Corporation's annual and special meeting held on September 21, 2021 and is available under the Corporation's profile on <u>www.sedar.com</u>.

The Stock Option Plan is considered a "rolling" or "evergreen" stock option plan since the Corporation will be authorized to grant stock options of up to 10% of its issued and outstanding Common Shares at the time of the stock option grant, from time to time, with no vesting provisions and after taking into account any stock options or RSUs (as defined herein) outstanding. The number of options available to grant increases as the number of issued and outstanding Common Shares increases. This percentage is consistent with the historically approved stock option plans of the Corporation and the Corporation believes that it is competitive with industry peers. As of the date of this Circular, an aggregate of 16,055,958 stock options are outstanding pursuant to the Stock Option Plan, representing approximately 6.57% of the outstanding Common Shares on a non-diluted basis.

The terms and conditions of each option granted under the Plan will be determined by the Board. Options will be priced in the context of the market and in compliance with applicable securities laws and the policies of the Canadian Securities Exchange ("**CSE**"). Consequently, the exercise price for any stock option shall not be lower than the greater of the closing market prices of the Common Shares on the CSE on (a) the trading day prior to the date of grant of the stock options and (b) the date of grant of the stock options. Vesting terms will be determined at the discretion of the Board. The Board shall also determine the term of stock options granted under the Plan, provided that no stock option shall be outstanding for a period greater than five years.

The Plan provides for amendment procedures that specify the kind of amendments to the Plan that will require shareholder approval. The Board believes that except for certain material changes to the Plan it is important that the Board has the flexibility to make changes to the Plan without shareholder approval. Such amendments could include making appropriate adjustments to outstanding options in the event of certain corporate transactions, the addition of provisions requiring forfeiture of options in certain circumstances, specifying practices with respect to applicable tax withholdings and changes to enhance clarity or correct ambiguous provisions.

The Plan does not provide for the transformation of stock options granted under the Plan into a stock appreciation right involving the issuance of securities from the treasury of the Corporation.

Directors, officers, employees and certain consultants shall be eligible to receive stock options under the Plan. Upon the termination of an optionholder's engagement with the Corporation, the cancellation or early vesting of any stock option shall be in the discretion of the Board. In general, the Corporation expects that stock options will be cancelled 90 days following an optionholder's termination from the Corporation. Stock options granted under the Plan shall not be assignable or transferable.

The Corporation will not provide financial assistance to any optionholder to facilitate the exercise of options under the Plan.

At the Meeting, Shareholders will be asked to consider and, if thought advisable, to pass, with or without variation, the following ordinary resolution approving the Stock Option Plan (the "**Option Plan Resolution**"). To be effective, the Option Plan Resolution must be passed by a majority of the votes cast by Shareholders present or represented by proxy at the Meeting other than votes attaching to Common Shares beneficially owned by related persons to whom options may be issued under the Stock Option Plan. To the knowledge of the Corporation, as of the date hereof, an aggregate of 40,901,540 Common Shares, representing approximately 16.74% of the issued and outstanding Common Shares, are held by Shareholders who are considered to be insiders of the Corporation and to whom options may be granted, and the associates thereof, and will be excluded from voting on the Option Plan Resolution.

The text of the Option Plan Resolution to be submitted to shareholders at the Meeting is set forth below:

"**BE IT RESOLVED AS AN ORDINARY RESOLUTION OF THE MAJORITY OF THE DISINTERESTED SHAREHOLDERS THAT**:

1. the current stock option plan of GameSquare Esports Inc. (the "**Corporation** "), as described in the management information circular of the Corporation dated May 4, 2022 is hereby approved; and

2. any director or officer of the Corporation is hereby authorized to execute (whether under the corporate seal of the Corporation or otherwise) and deliver all such documents and to do all such other acts and things as such director or officer may determine to be necessary or advisable to give effect to the true intent of these resolutions."

Management of the Corporation and the Board recommend that Shareholders vote in favour of the Option Plan Resolution.

**It is the intention of the individuals designated by management in the enclosed form of proxy to vote <u>FOR</u> the approval of the Option Plan Resolution, unless specifically instructed otherwise in the proxy.**

**4. <u>Approval of the RSU Plan</u>**

The Corporation has a restricted share unit compensation plan which was approved by the Board on June 4, 2021 (the "**RSU Plan**") and was approved by disinterested shareholders at the Corporation's last annual and special meeting held on September 21, 2021. The following is a summary of the material provisions of the RSU Plan. It is not a comprehensive discussion of all of the terms and conditions of the RSU Plan and it is qualified in its entirety by the full text of the RSU Plan. A copy of the RSU Plan was attached to the Corporation's proxy circular mailed to Shareholders in connection with the Corporation's annual and special meeting held on September 21, 2021 and is available under the Corporation's profile on <u>www.sedar.com</u>.

**Purpose and Overview**

The RSU Plan is intended to bring the Corporation's compensation policies in line with trends in industry compensation practice, which includes a move towards restricted share units ("**RSUs**"), and to preserve the working capital of the Corporation by paying Eligible Persons (as defined herein) compensation in the form of share-based awards as opposed to cash. Eligible Persons who are granted RSUs under the RSU Plan are collectively referred to herein as "Participants" or "Grantees". RSUs are performance-based share units which will be granted to Eligible Persons under the RSU Plan based on both individual and corporate performance criteria as determined by the Board or the Granting Authority (as such term is defined in the RSU Plan).

The RSU Plan advances the interests of the Corporation by encouraging Participants to receive equity-based compensation and incentives, thereby (i) increasing the proprietary interests of such persons in the Corporation, (ii) aligning the interests of such persons with the interests of the shareholders of the Corporation generally, (iii) encouraging such persons to remain associated with the Corporation, and (iv) furnishing such persons with additional incentive in their efforts on behalf of the Corporation. The Board also believes that through the RSU Plan, the Corporation will be better able to compete for and retain the services of the individuals needed for the continued growth and success of the Corporation. The RSU Plan is intended to complement the Stock Option Plan by allowing the Corporation to offer a broader range of incentives to diversify and customize the rewards for Eligible Persons.

**Administration**

Under the RSU Plan, the Board may, at any time, appoint a committee to, among other things, interpret, administer and implement the RSU Plan on behalf of the Board in accordance with such terms and conditions as the Board may prescribe, consistent with the RSU Plan.

**Eligible Persons**

Under the RSU Plan, RSUs may be granted to any Director or Employee of the Corporation or an Affiliate thereof, or any Consultant, other than persons involved in Investor Relations Activities relating to the Corporation (as such terms are defined in the RSU Plan) (collectively the "**Eligible Persons**"). A Participant or Grantee is an Eligible Person to whom a RSU has been granted under the RSU Plan.

**Number of Securities Issued or Issuable**

Subject to the adjustment provisions provided for in the RSU Plan and applicable rules and regulations of all regulatory authorities to which the Corporation is subject (including any stock exchange), the total number of Common Shares that may be reserved for issue in connection with the RSUs granted pursuant to the RSU Plan shall not exceed 11,497,315 Common Shares, being 10% of the total number of issued and outstanding Common Shares on the date the RSU Plan was adopted by the Board. As of the date of this Circular, 6,242,158 RSUs have been granted pursuant to the RSU Plan and 1,000,000 RSUs have been settled for Common Shares, resulting in 4,255,157 remaining available for grant. Notwithstanding the foregoing, the Common Shares reserved for issue under the RSU Plan, together with any Common Shares reserved for issue pursuant to the Stock Option Plan, may not exceed 10% of the total issued and outstanding Common Shares (on a non-diluted basis) on the date of a grant of RSUs to a Participant. Accordingly, as of the date hereof, an additional 1,540,074 RSUs remain available for grant.

If any RSU is cancelled in accordance with the terms of the RSU Plan or the agreements evidencing the grant, the Common Shares reserved for issue pursuant to such RSU shall, upon cancellation of such RSUs, revert to the RSU Plan and will be available for other RSUs.

**Maximum Grant to Any One Participant**

The issue of RSUs to Eligible Persons is subject to, among others, the following restrictions:

(a) the number of Common Shares which may be reserved for issue pursuant to the RSU Plan together with the Common Shares which may be reserved for issue pursuant to any other share compensation arrangements of the Corporation, including the Stock Option Plan, to any one Eligible Person within a 12 month period may not exceed in the aggregate 5% of the number of Common Shares issued and outstanding on a non-diluted basis on the date of the grant of the RSU unless the Corporation has received disinterested shareholder approval;

(b) the number of Common Shares which may be reserved for issue pursuant to the RSU Plan together with the Common Shares which may be reserved for issue pursuant to any other share compensation arrangements of the Corporation, including the Stock Option Plan, to all insiders of the Corporation may not exceed 10% of the number of Common Shares issued and outstanding on a non-diluted basis at any point in time unless the Corporation has received disinterested shareholder approval;

(c) the number of Common Shares which may be reserved for issue pursuant to the RSU Plan together with the Common Shares which may be reserved for issue pursuant to any other share compensation arrangements of the Corporation, including the Stock Option Plan, to all insiders of the Corporation within a 12-month period may not exceed in the aggregate 10% of the number of Common Shares issued and outstanding on a non-diluted basis on the date of the grant of the RSU unless the Corporation has received disinterested shareholder approval; and

(d) the number of Common Shares which may be reserved for issue pursuant to the RSU Plan together with the Common Shares which may be reserved for issue pursuant to any other share compensation arrangements of the Corporation, including the Stock Option Plan, to any one Consultant in any 12-month period may not exceed 2% of the number of Common Shares issued and outstanding on a non-diluted basis on the date of the grant of the RSU.

**Restricted Share Units**

Restricted Share Units granted pursuant to the RSU Plan will be used to compensate Participants for their individual performance-based achievements and are intended to supplement stock option awards in this specific respect. RSUs granted pursuant to the RSU Plan will be used as a means of reducing the cash payable by the Corporation in respect of a Participant's compensable amounts. The goal of such grants is to more closely tie RSUs to individual performance based on established Performance Criteria (as such term is defined in the RSU Plan) and to more closely align the interests of the Participant with those of the Corporation and its shareholders.

**Vesting and Term of Restricted Share Units**

The Granting Authority may determine the conditions to the vesting of RSUs at the time of grant. The Granting Authority shall also determine the term of RSUs granted under the RSU Plan, provided that no RSU shall be outstanding for a period greater than ten years or such shorter period as may be required pursuant to applicable tax laws.

If a Grantee dies or is terminated without cause, any non-vested RSUs granted prior to such death or termination will be cancelled 90 days following the date of death or termination without liability or compensation and will be of no further force and effect after such time. Where the Grantee voluntarily terminates his/her employment with the Corporation or is otherwise terminated by the Corporation for cause, or, in the case of a director of the Corporation, is otherwise removed as a result of losing his/her eligibility to serve on the Board due to an order by a regulatory body or stock exchange or for culpable conduct as determined by the Granting Authority, all non-vested RSUs of the Grantee shall be immediately cancelled without compensation or liability therefor and be of no further force and effect.

In the event of a Change of Control (as defined in the RSU Plan), the Granting Authority may take any action it deems necessary or desirable with respect to the outstanding RSUs, including accelerating the vesting date of RSUs to the date which is immediately preceding the Change of Control or otherwise waiving all restrictions and conditions of RSUs. Moreover, if approved by the Board prior to or within 30 days after such time as a Change of Control is deemed to have occurred, the Board has the right to require that all or any portion of the RSUs be settled and discharged in cash based on the "cash value" of such RSUs in lieu of settlement by issue of Common Shares.

**Settlement of Vested Restricted Share Units**

Subject to the provisions of the RSU Plan with respect to Changes of Control, payment to the Grantee in respect of vested RSUs will be made in the form of Common Shares and will be evidenced by book entry registration or by a share certificate registered in the name of the Grantee as soon as practicable following the date on which the RSUs become vested. Settlement of RSUs shall be made by delivery of one Common Share for each such RSU then being settled. Common Shares delivered to Participants in connection with the settlement of vested RSUs may be authorized by unissued Common Shares from the treasury of the Corporation, Common Shares purchased in the open-market or in private transactions.

Common Shares issued pursuant to the settlement of vested RSUs shall not be available for subsequent grants of RSUs, unless approval of the Board is received for the reversion of such Common Shares to the RSU Plan.

**Assignability**

Unless otherwise provided in an agreement evidencing a RSU, RSUs granted under the RSU Plan are non-transferable and non-assignable to anyone other than to the estate of a Participant in the event of death and then only in accordance with the terms of the RSU Plan.

**Procedure for Amending of the RSU Plan**

Subject to the terms of the RSU Plan and any applicable requirements of an applicable stock exchange (including the CSE) (the "**Exchange**"), the Granting Authority has the right at any time to amend, suspend or terminate the RSU Plan, or to amend any RSU awarded thereunder, provided that disinterested shareholder approval may be required in respect of certain amendments. Notwithstanding the foregoing, shareholder approval is not required for the amendments set out below:

(a) amendments of a technical, clerical or "housekeeping" nature including, without limiting the generality of the foregoing, any amendments for the purpose of curing any ambiguity, error or omission in the RSU Plan or to correct or supplement any provision of the RSU Plan that is inconsistent with any other provision of the RSU Plan;

(b) amendments necessary to comply with the provisions of applicable law and the applicable rules of the Exchange;

(c) amendments necessary in order for RSUs to qualify for favourable treatment under the *Income Tax Act* (Canada) or under the United States Internal Revenue Code;

(d) amendments respecting administration of the RSU Plan;

(e) any amendments to the vesting provision of the RSU Plan or any RSU;

(f) any amendments to the early termination provisions of the RSU Plan or any RSU, whether or not such RSU is held by an insider of the Corporation, provided such amendment does not entail an extension of a RSU beyond the original expiry date;

(g) any amendments in the termination provisions of the RSU Plan or any RSU, other than a RSU held by an insider of the Corporation in the case of an amendment extending the term of a RSU, provided any such amendment does not entail an extension of the expiry date of such RSU beyond its original expiry date;

(h) adjustments to outstanding RSUs in the event of a Change of Control or similar transaction entered into by the Corporation;

(i) amendments necessary to suspend or terminate the RSU Plan; and

(j) any other amendment, whether fundamental or otherwise, not requiring shareholder approval under applicable law or the rules of the Exchange.

**Other Material Information**

Appropriate adjustments to the RSU Plan and to RSUs granted thereunder will be made by the Corporation to give effect to adjustments in the number and type of Common Shares (or other securities or other property) resulting from subdivisions, consolidations, substitutions, or reclassifications of Common Shares, payment of stock dividends or other prescribed changes in the Corporation's capital.

At the Meeting, Shareholders will be asked to consider and, if thought advisable, to pass, with or without variation, the following ordinary resolution approving the RSU Plan (the "**RSU Plan Resolution**"). To be effective, the RSU Plan Resolution must be passed by a majority of the votes cast by Shareholders present or represented by proxy at the Meeting other than votes attaching to Common Shares beneficially owned by related persons to whom RSUs may be issued under the RSU Plan. To the knowledge of the Corporation, as of the date hereof, an aggregate of 40,901,540 Common Shares, representing approximately 16.74% of the issued and outstanding Common Shares, are held by Shareholders who are considered to be insiders of the Corporation and to whom RSUs may be granted, and the associates thereof, and will be excluded from voting on the RSU Plan Resolution.

The text of the RSU Plan Resolution to be submitted to shareholders at the Meeting is set forth below:

"**BE IT RESOLVED AS AN ORDINARY RESOLUTION OF THE MAJORITY OF THE DISINTERESTED SHAREHOLDERS THAT**:

1. the current restricted share unit plan of GameSquare Esports Inc. (the "**Corporation** "), as described in the management information circular of the Corporation dated May 4, 2022 is hereby approved; and

2. any director or officer of the Corporation is hereby authorized to execute (whether under the corporate seal of the Corporation or otherwise) and deliver all such documents and to do all such other acts and things as such director or officer may determine to be necessary or advisable to give effect to the true intent of these resolutions."

Management of the Corporation and the Board recommend that Shareholders vote in favour of the RSU Plan Resolution.

**It is the intention of the individuals designated by management in the enclosed form of proxy to vote <u>FOR</u> the approval of the RSU Plan Resolution, unless specifically instructed otherwise in the proxy.**

**5. <u>Amendment to Articles</u>**

At the Meeting, Shareholders will be asked to consider and, if deemed advisable approve, with or without variation, a special resolution (the "**Amendment Resolution**") authorizing and approving an amendment (the "**Amendment**") to the articles of the Corporation pursuant to subsection 168(1)(g) of the *Business Corporations Act* (Ontario) (the "**OBCA**"), to amend the rights, privileges, conditions and restrictions of the existing class of Common Shares and to create a new class of shares to be designated as "proportionate voting shares" (the "**Proportionate Voting Shares**").

The Proportionate Voting Shares are being proposed in order to minimize the proportion of the outstanding voting securities of the Corporation that are held by "U.S. persons" for purposes of determining whether the Corporation is a "foreign private issuer", as such terms are defined in Rule 405 of the United States Securities Act of 1933, as amended, in order to reduce compliance costs. The Corporation may in the future lose "foreign private issuer" status if more than 50% of its outstanding voting securities are held in the United States (the "**FPI Voting Threshold**") and the Corporation fails to meet the additional requirements necessary to avoid loss of foreign private issuer status, such as if: (i) a majority of the Corporation's directors or executive officers are U.S. citizens or residents; (ii) a majority of the Corporation's assets are located in the United States; or (iii) the Corporation's business is administered principally in the United States. The regulatory and compliance costs to the Corporation under U.S. securities laws as a U.S. domestic issuer will be significantly more than the costs incurred as a U.S. Securities and Exchange Commission ("**SEC**") foreign private issuer. If the Corporation loses its "foreign private issuer" status, it would be required to file periodic and current reports and registration statements on U.S. domestic issuer forms with the SEC, which are generally more detailed and extensive than the forms available to a foreign private issuer. In addition, the Corporation may lose the ability to rely upon exemptions from corporate governance requirements that are available to foreign private issuers.

If the Amendment becomes effective, holders of Common Shares, at their option, may convert their Common Shares into fully paid and non-assessable Proportionate Voting Shares as is determined by multiplying the number of Common Shares by 0.01 (the inverse of the Conversion Ratio (as defined below)). Each issued and outstanding Proportionate Voting Share will be convertible back into such number of Common Shares, at the option of the holder thereof, at any time after the date of issuance, as is determined by multiplying the number of Proportionate Voting Shares by the conversion ratio, which will be one hundred (100) Common Shares for each Proportionate Voting Share (the "**Conversion Ratio**"), subject to anti-dilution and other adjustments as set out in the Articles. Holders of Proportionate Voting Shares will be entitled to notice of and to attend at any meeting of Shareholders and will be entitled to one hundred (100) votes in respect of each Proportionate Voting Share held. No dividend will be declared or paid on the Common Shares unless the Corporation simultaneously declares or pays, as applicable, equivalent dividends (on an as-converted to Common Share basis) on the Proportionate Voting Shares, and no dividend will be declared or paid on the Proportionate Voting Shares unless the Corporation simultaneously declares or pays, as applicable, equivalent dividends (on an as-converted to Common Share basis) on the Common Shares. In the event of the liquidation, dissolution or winding up of the Corporation, the holders of Common Shares and the Proportionate Voting Shares shall be entitled to participate in the distribution of the remaining property and assets of the Corporation, with each Proportionate Voting Share being entitled to one hundred (100) times the amount distributed per Common Share and fractional Proportionate Voting Shares will be entitled to the applicable fraction thereof, and otherwise without preference or distinction among or between the Proportionate Voting Shares and Common Shares.

As such, as there is no disproportionality in the Corporation's proposed capital structure between the Common Shares, on the one hand, and the Proportionate Voting Shares, on the other hand, because each share of each such class has voting power equal to its economic interest and dividend and liquidation entitlement.

The Proportionate Voting Shares are not expected to be listed on an exchange.

**Approval Requirements**

To be effective, the Amendment Resolution requires (a) the affirmative vote of not less than two-thirds of the votes cast by Shareholders present or represented by proxy and entitled to vote at the Meeting and (b) pursuant to National Instrument 41-101 – *General Prospectus Requirements* and Ontario Securities Commission Rule 56-501 – *Restricted Shares* (collectively, the "**Restricted Share Rules**"), the affirmative vote of a majority of the votes cast by Shareholders excluding any votes attaching to Common Shares held, directly or indirectly, by control persons and affiliates of the Corporation.

To the knowledge of management of the Corporation, only Blue & Silver Ventures, Ltd. is considered an affiliate or control person of the Corporation, and therefore the votes attached to their Common Shares will be excluded from voting on the Amendment Resolution for purposes of the approval required under the Restricted Share Rules.

**Board Recommendation**

The Board believes that approval of the Amendment Resolution is in the best interests of the Corporation and therefore unanimously recommends that Shareholders vote in favour of the Amendment Resolution.

**Tax Consequences of a Conversion into Proportionate Voting Shares**

Investors are advised to consult their own tax advisors as to the tax considerations relating to the voluntary conversion of Common Shares into Proportionate Voting Shares in the event that the Amendment Resolution is approved at the Meeting, including with respect to the receipt, ownership, conversion and disposition of Proportionate Voting Shares in light of their particular circumstances.

**"Restricted Securities" Exemption** 

In connection with the Amendment Resolution, the Corporation intends to apply for exemptions from the securities regulatory authorities in Ontario, Alberta and British Columbia with regard to requirements applicable to "restricted securities" (the "**Exemption**") as there is no disproportionality in the Corporation's proposed capital structure between the Common Shares on the one hand, and the Proportionate Voting Shares, on the other hand, because each share of each such class has voting power equal to its economic interest and dividend and liquidation entitlement. Specifically, the Corporation intends to apply for exemptions from the requirements of NI 41-101 – *General Prospectus Requirements* ("**NI 41-10**"), Part 10 of National Instrument 51-102 – *Continuous Disclosure Obligations* ("**NI 51-102**"), and from the requirements under Part 2 of OSC Rule 56-501 – *Restricted Shares* ("**OSC Rule 56-501**") relating to the use of, as applicable, restricted security and restricted share terms and disclosure with respect to the Common Shares following completion of the Amendment. Upon completion of the Amendment, the Common Shares will be "restricted securities" (as defined in NI 41-101 and NI 51-102) and "restricted shares" (as defined in OSC Rule 56- 501) and absent the Exemption, the Corporation would be unable to use the word "common" to refer to the Common Shares in prospectuses, continuous disclosure documents, dealer and adviser documentation, rights offering circulars and offering memorandums. Absent the Exemption, the Corporation would be subject to a disclosure practice that is not intended to be applicable, would result in a misleading description of its capital structure and would defeat the underlying objective behind the disclosure rules regarding restricted shares. Furthermore, it would require the Corporation to comply with additional restrictions and requirements which are not warranted given that the Common Shares are not, in principle, restricted securities. Specifically, as part of the Exemption, the Corporation also intends to apply for exemptions from the requirements of section 12.3 of NI 41-101 and Part 3 of OSC Rule 56-501, without which the Corporation would be required to obtain minority shareholder approval prior to making distributions of Proportionate Voting Shares, Common Shares, or securities that are, directly or indirectly, convertible into, or exercisable or exchangeable for, Proportionate Voting Shares or Common Shares. The Corporation expects to obtain such relief but there can be no assurance that such exemptions will be granted.

If the Exemption is not granted, the Board may rename the Common Shares as "Subordinate Voting Shares" or such other name as may be permitted under law and approved by the Boardif it determines that such actions are in the best interests of the Corporation.

**Summary of Share Terms**

Following the Amendment, each Common Share shall be convertible, at the option of the holder thereof, into one-hundredth (1/100) Proportionate Voting Share and each Proportionate Voting Share shall be convertible, at the option of the holder thereof, at any time after the date of issuance of such Proportionate Voting Share, into one hundred (100) Common Shares.

Holders of Common Shares and Proportionate Voting Shares will be entitled to notice of and to attend at any meeting of the shareholders of the Corporation, except those meetings at which holders of another particular class or series of shares of the Corporation are entitled to vote separately as a class or series under applicable law. The Common Shares will carry one (1) vote per Common Share and the Proportionate Voting Shares will carry one hundred (100) votes per Proportionate Voting Share.

As long as any Common Shares or Proportionate Voting Shares remain outstanding, the Corporation will not, without the consent of the holders of the Common Shares or the Proportionate Voting Shares by separate special resolution of such class, prejudice or interfere with any right or special right attached to the Common Shares or the Proportionate Voting Shares, as applicable.

Holders of Common Shares and Proportionate Voting Shares will be entitled to dividends if, as and when dividends are declared by the Board, with each Proportionate Voting Share being entitled to one hundred (100) times the amount of the dividend declared per Common Share (or if a stock dividend is declared on the Common Shares payable in Common Shares only if the Board simultaneously declares a stock dividend in: (A) Proportionate Voting Shares on the Proportionate Voting Shares, in a number of shares per Proportionate Voting Share (or fraction thereof) equal to the number of shares declared per Common Share (or fraction thereof); or (B) Common Shares on the Proportionate Voting Shares, in a number of shares per Proportionate Voting Share (or fraction thereof), multiplied by one hundred (100), and fractional Proportionate Voting Shares will be entitled to the application thereof, and otherwise without preference or distinction among or between the shares.

In the event of the liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary, or in the event of any other distribution of assets of the Corporation among its shareholders for the purpose of winding up its affairs, the holders of Common Shares and Proportionate Voting Shares will, subject to the prior rights of the holders of any shares of the Corporation ranking in priority to the Common Shares and the Proportionate Voting Shares, be entitled to participate rateably along with the holders of the Common Shares and the Proportionate Voting Shares, with each Proportionate Voting Share being entitled to one hundred (100) times the amount distributed per Common Share and fractional Proportionate Voting Shares being entitled to the applicable fraction thereof, and otherwise without preference or distinction among or between the Common Shares and Proportionate Voting Shares.

No subdivision or consolidation of the Common Shares or Proportionate Voting Shares shall occur unless, simultaneously, the shares of the other class are subdivided or consolidated in the same manner and on the same basis, so as to preserve the relative rights of the holders of each such class of shares.

Each Proportionate Voting Share shall automatically convert, without any action on the part of the holder thereof, into Common Shares on the basis of one hundred (100) Common Shares for one (1) Proportionate Voting Share if the Board, in its sole discretion, determines that it is no longer in the best interests of the Corporation to retain Proportionate Voting Shares.

*<u>Coattail Provisions</u>*

The terms of the Common Shares and Proportionate Voting Shares shall include take-over bid protective measures (i.e. coattail provisions):

***Common Shares***

In the event that an offer is made to purchase Proportionate Voting Shares, and such offer is:

(a) required, pursuant to applicable securities legislation or the rules of any stock exchange on which: (i) the Proportionate Voting Shares; or (ii) the Common Shares which may be obtained upon conversion of the Proportionate Voting Shares; may then be listed, to be made to all or substantially all of the holders of Proportionate Voting Shares in a province or territory of Canada to which the requirement applies; and

(b) not made to the holders of Common Shares for consideration per Common Share equal to 0.01 of the consideration offered per Proportionate Voting Share,

each Common Share shall become convertible at the option of the holder into a Proportionate Voting Share on the basis of one hundred (100) Common Shares for one (1) Proportionate Voting Share, at any time while such offer is in effect until one day after the time prescribed by applicable securities legislation or stock exchange rules for the offeror to take up and pay for such shares as are to be acquired pursuant to such offer. Fractions of Proportionate Voting Shares may be issued in respect of any amount of Common Shares in respect of which the conversion right is exercised which is less than one hundred (100). This conversion right may only be exercised for the purpose of depositing the Proportionate Voting Shares acquired upon conversion under such offer, and for no other reason. If this conversion right is exercised, the Corporation will ensure that the transfer agent for the Common Shares shall deposit under such offer the Proportionate Voting Shares acquired upon conversion, on behalf of the holder.

***Proportionate Voting Shares***

In the event that an offer is made to purchase Common Shares, and such offer is:

(a) required, pursuant to applicable securities legislation or the rules of any stock exchange on which: (i) the Proportionate Voting Shares; or (ii) the Common Shares which may be obtained upon conversion of the Proportionate Voting Shares; may then be listed, to be made to all or substantially all of the holders of Common Shares in a province or territory of Canada to which the requirement applies; and

(b) not made to the holders of Proportionate Voting Shares for consideration per Proportionate Voting Share equal to (one hundred) 100 times the consideration offered per Common Share,

each Proportionate Voting Share shall become convertible at the option of the holder into a Common Share on the basis of one hundred (100) Common Shares for one (1) Proportionate Voting Share, at any time while such offer is in effect until one day after the time prescribed by applicable securities legislation or stock exchange rules for the offeror to take up and pay for such shares as are to be acquired pursuant to such offer. This conversion right may only be exercised for the purpose of depositing the Common Shares acquired upon conversion under such offer, and for no other reason. If this conversion right is exercised, the Corporation will ensure that the transfer agent for the Proportionate Voting Shares shall deposit under such offer the Common Shares acquired upon conversion, on behalf of the holder.

The text of the Amendment Resolution is set out in Schedule "B" of this Information Circular.

If the Consolidation Resolution is approved at the Meeting, the Corporation expects that, subject to the Board's discretion, the Amendment will be completed following the Common Share Consolidation, as applicable.

**It is the intention of the management designees, if named as proxy, to vote "FOR" the Amendment Resolution unless otherwise directed**.

**6. <u>Approval of the Common Share Consolidation</u>**

**Basis for Consolidation**

The Board is of the opinion that it may be in the best interests of the Corporation to consolidate the Common Shares. Accordingly, at the Meeting, Shareholders will be asked to consider and, if deemed advisable approve, with or without variation, a special resolution (the "**Consolidation Resolution**") authorizing and approving an amendment to the articles of the Corporation pursuant to subsection 168(1)(h) of the OBCA to consolidate the issued and outstanding Common Shares on the basis of one new Common Share for four (4) existing Common Shares (the "**Common Share Consolidation**").

The Corporation believes that an increase in the trading price of the Common Shares that may result from the Common Share Consolidation could heighten the interest of the analyst and financial community in the Corporation and potentially broaden the pool of potential investors in the Common Shares, including certain institutional investors. Investors may also benefit from lower trading costs associated with a higher trading price for post-consolidation Common Shares as some investors may pay commissions based on the number of Common Shares traded when they buy or sell Common Shares. A higher trading price may also assist the Corporation if it determines to apply to list the Common Shares on another exchange as some exchanges may require that the price per Common Share meet certain thresholds for listing. The Common Share Consolidation will also reduce the number of issued and outstanding Common Shares to a number that the Corporation believes is more appropriate and at the same time would not negatively effect liquidity.

**Principal Effects of the Common Share Consolidation**

The Common Share Consolidation will not have a dilutive effect on the Corporation's Shareholders since each Shareholder will hold the same percentage of Common Shares outstanding immediately following the Common Share Consolidation as such Shareholder held immediately prior to the Common Share Consolidation. The Common Share Consolidation will not affect the relative voting and other rights that accompany the Common Shares.

The principal effects of the Common Share Consolidation include the following:

(1) the fair market value of each Common Share may increase and will, in part, form the basis upon which further Common Shares or other securities of the Corporation will be issued;

(2) based on the number of issued and outstanding Common Shares as at May 4, 2022, the number of issued and outstanding Common Shares would be reduced from 244,381,900 to 61,095,475 (excluding the effect on fractional Common Shares as disclosed below), based on a consolidation ratio of one (1) new Common Share for each four (4) existing Common Shares;

(3) the exercise prices and the number of Common Shares issuable upon the exercise or deemed exercise of any Options or other convertible (including RSUs) or exchangeable securities of the Corporation will be automatically adjusted in accordance with the terms of such securities based on a consolidation ratio of one (1) new Common Share for each four (4) existing Common Shares; and

(4) as the Corporation currently has an unlimited number of Common Shares authorized for issuance, the Common Share Consolidation will not have any effect on the number of Common Shares of the Corporation available for issuance.

**Effect on Fractional Shareholders**

No fractional shares will be issued, and no cash consideration will be paid, if, as a result of the Common Share Consolidation, a Shareholder would otherwise become entitled to a fractional Common Share. Persons otherwise entitled to receive fractional post-consolidation Common Shares will instead receive post-consolidation Common Shares rounded down to the nearest whole Common Share. As such, after the Common Share Consolidation, Shareholders as at the effective date of the Common Share Consolidation will have no further interest in the Corporation with respect to their fractional Common Shares. This is not, however, the purpose for which the Corporation is effecting the Common Share Consolidation.

**Procedure for Implementing the Common Share Consolidation**

If the Consolidation Resolution is approved by the Shareholders, the Corporation is expected to promptly file Articles of Amendment pursuant to the OBCA to amend the articles of the Corporation. The Common Share Consolidation will become effective on the date shown in the Certificate of Amendment issued pursuant to the OBCA.

If the Common Share Consolidation is approved, no delivery of a certificate or a direct registration system statement evidencing a post-consolidation Common Share will be made to a Shareholder until the Shareholder has surrendered the issued certificates or statements representing its pre-consolidation Common Shares. Until surrendered, each certificate or statement formerly representing pre-consolidation Common Shares shall be deemed for all purposes to represent the number of post-consolidation Common Shares to which the holder is entitled as a result of the Common Share Consolidation.

No further action on the part of the Shareholders is expected to be required by non-registered Shareholders holding their Common Shares through a bank, broker or other nominee; however such banks, brokers or other nominees may have various procedures for processing the Common Share Consolidation. A Shareholder is encouraged to contact its nominee if it has any questions regarding the applicable procedure.

**Dissent Rights**

Under the OBCA, Shareholders are not entitled to exercise any dissent rights with respect to the proposed Common Share Consolidation.

**Accounting Consequences**

If the Common Share Consolidation is implemented, net income or loss per Common Share, and other per share amounts, will be increased because there will be fewer Common Shares issued and outstanding. In future financial statements, net income or loss per Common Share and other per share amounts for periods ending before the Common Share Consolidation took effect would be recast to give retroactive effect to the Common Share Consolidation.

**Interests of Directors and Executive Officers in the Common Share Consolidation**

The Corporation's directors and executive officers, and their associates, have no substantial interest, directly or indirectly, in the matters set forth in the Common Share Consolidation proposal except to the extent of their ownership of Common Shares and options to purchase Common Shares and interest in Common Shares issuable pursuant to their ownership of RSUs.

**Risks Associated with the Common Share Consolidation**

There can be no assurance that the market price of the consolidated Common Shares will increase as a result of the Common Share Consolidation. The market price of the Common Shares will also be affected by the Corporation's financial and operational results, its financial position, including its liquidity and capital resources, industry conditions, the market's perception of the Corporation's business and other factors, which are unrelated to the number of Common Shares outstanding.

The market price of the Common Shares immediately following the implementation of the Common Share Consolidation is expected to be approximately equal to the market price of the Common Shares prior to the implementation of the Common Share Consolidation multiplied by the consolidation ratio of four (4) but there is no assurance that the anticipated market price immediately following the implementation of the Common Share Consolidation will be realized or, if realized, will be sustained or will increase. There is a risk that the total market capitalization of the Common Shares (the market price of the Common Shares multiplied by the number of Common Shares outstanding) after the implementation of the Common Share Consolidation may be lower than the total market capitalization of the Common Shares prior to the implementation of the Common Share Consolidation.

The marketability and trading liquidity of the consolidated shares of the Corporation may not improve. Although the Corporation believes that establishing a higher market price for the Common Shares could increase investment interest for the Common Shares in equity capital markets by potentially broadening the pool of investors that may consider investing in the Corporation, including investors whose internal investment policies prohibit or discourage them from purchasing stocks trading below a certain minimum price, there is no assurance that implementing the Common Share Consolidation will achieve this result.

The consolidation may result in some Shareholders owning "odd lots" of less than 100 or 1,000 Common Shares which may be more difficult for such Shareholders to sell or which may require greater transaction costs per Common Share to sell.

**Consolidation Resolution**

To be effective, the Consolidation Resolution requires the affirmative vote of not less than two-thirds of the votes cast by Shareholders present or represented by proxy and entitled to vote at the Meeting.

**Board Recommendation**

The Board believes that approval of the Consolidation Resolution is in the best interests of the Corporation and therefore unanimously recommends that Shareholders vote in favour of the Consolidation Resolution.

The text of the Consolidation Resolution is set out in Schedule "C" of this Information Circular.

**It is the intention of the management designees, if named as proxy, to vote "FOR" the Consolidation Resolution unless otherwise directed**.

**STATEMENT OF EXECUTIVE COMPENSATION**

**Director Compensation**

The Board determines the compensation payable to the Directors of the Corporation and reviews such compensation periodically throughout the year. For their role as Directors of the Corporation, each Director of the Corporation who is not a NEO (as defined herein) may, from time to time, be paid cash fees, awarded RSUs under the RSU Plan, awarded stock options under the provisions of the Stock Option Plan, and/or receive cash bonuses. There are no other arrangements under which the Directors of the Corporation who are not NEOs were compensated by the Corporation or its subsidiaries during the most recently completed financial year for their services in their capacity as Directors of the Corporation.

**Compensation Discussion and Analysis**

For the financial year ended December 31, 2021, the objective of the Corporation's compensation strategy was to ensure that compensation for its NEOs is sufficiently attractive to recruit, retain and motivate high performing individuals to assist GameSquare in achieving its goals.

The process for determining executive compensation is relatively informal, in view of the size and stage of the Corporation and its operations. Executive officers are involved in the process and make recommendations to the Board which considers and decides whether to approve the discretionary components (e.g., cash bonuses, stock options and RSUs) of the annual compensation of senior management (other than the Chief Executive Officer). Except as otherwise described below, the Corporation does not maintain specific performance goals or use benchmarks in determining the compensation of executive officers. The Board may at its discretion award either a cash bonus, stock options or RSUs for high achievement or for accomplishments that the Board deem as worthy of recognition.

Compensation for the NEOs is composed primarily of three components: base fees, performance bonuses and stock-based compensation. In establishing the levels of base fees, performance bonuses and the awards of stock options and RSUs, the Board takes into consideration a variety of factors, including the financial and operating performance of the Corporation, and each NEO's individual performance and contribution towards meeting corporate objectives, responsibilities and length of service.

*Approach*

While the Corporation does not have a formal compensation policy, the general objectives of the Corporation's executive compensation are to:

· attract, retain and motivate executives critical to the success of the Corporation;

· link the interests of management with those of the Shareholders; and

· provide rewards, through discretionary bonuses, for outstanding corporate and individual performance.

The following principles guide the Corporation's overall compensation philosophy:

· compensation is determined on an individual basis by the need to attract and retain talented, entrepreneurial, high achievers;

· an appropriate portion of total compensation is variable and linked to achievements, both individual and corporate; and

· all compensation and compensation objectives shall be fully and plainly disclosed.

The Board is responsible for ensuring the application of the compensation policy is appropriately aligned to support its stated objectives and encourage the appropriate management behaviours, while avoiding excessive risk-taking by executive officers. The Board believes that the compensation paid to each NEO during the last financial year was commensurate with each NEO's position, experience and performance.

*Compensation Risk Oversight and Assessment*

In light of the Corporation's size and the balance between long-term objectives and short-term financial goals with respect to the Corporation's executive compensation program, the Board does not presently deem it necessary to consider the implications of the risks associated with its compensation policies and practices.

*Financial Instruments*

All employees, including NEOs and Directors, are prohibited from purchasing financial instruments (including prepaid variable forward contracts, equity swaps, collars, or units of exchange funds) that are designed to hedge or offset a decrease in market value of equity securities granted as compensation or held, directly or indirectly, by the NEO or Director.

*Components of Compensation*

<u>Base Fees</u>

Base fees form an essential component of the Corporation's compensation mix as they are the first base measure to remain competitive relative to industry compensation practices, are fixed and therefore not subject to uncertainty, and can be used as the base to determine other elements of compensation and benefits. In determining the base fees of executive officers, the Board considers the following:

· the recommendations of the President and Chief Executive Officer of the Corporation (other than with respect to the compensation of the President and Chief Executive Officer);

· the particular responsibilities related to the position;

· the experience, expertise and level of the executive officer;

· what the Board members believe is industry practice;

· the executive officer's length of service to the Corporation; and

· the executive officer's level of responsibilities and overall performance based on informal feedback.

There is no mandatory framework that determines which of these factors may be more or less important and the emphasis placed on any of these factors is at the discretion of the Board and may vary among the executive officers. The determination of base fees relies principally on negotiations between the respective NEO and the Corporation and is therefore heavily discretionary. In respect of the base fees paid to the President and Chief Executive Officer, the Board also broadly considers the performance of the President and Chief Executive Officer against the Corporation's performance in the previous year.

<u>Bonus Payments</u>

GameSquare's cash bonus awards are designed to reward an executive for the direct contribution which he or she can make to the Corporation. NEOs are entitled to receive discretionary bonuses from time to time as determined or approved by the Board, upon the recommendation of the Chief Executive Officer. The Corporation does not currently prescribe a set of formal objective measures to determine discretionary bonus entitlements. Rather the Corporation uses informal goals which may include an assessment of an individual's current and expected future performance, level of responsibilities and the importance of his/her position and contribution to the Corporation. Precise goals or milestones are not pre-set by the Board. The performance-based bonuses paid to the NEOs during the financial year ended December 31, 2021 are listed in the summary compensation table below.

<u>Long-term Incentives, RSUs and Options</u>

The Board believes that granting stock options and RSUs to key personnel encourages retention and more closely aligns the interests of such key personnel with the interests of Shareholders while at the same time not drawing on the limited cash resources of the Corporation.

GameSquare does not utilize a set of formal objective measures to determine long-term incentive entitlements, rather, long-term incentive grants, such as stock options and RSUs, to NEOs are determined in a discretionary manner on a case-by-case basis but having consideration to the number of options or RSUs previously granted. There are no other specific quantitative or qualitative measures associated with option and RSU grants and no specific weights are assigned to any criteria individually; rather, the performance of the Corporation is broadly considered as a whole when determining the stock-based compensation (if any) to be granted and the Corporation does not focus on any particular performance metric.

The Corporation has adopted the Stock Option Plan and RSU Plan, the material terms of which are summarized under "Matters to be Considered at the Meeting – Approval of the Stock Option Plan" and "Matters to be Considered at the Meeting – Approval of the RSU Plan," respectively, above. The Stock Option Plan was approved by the shareholders of the Corporation at its last annual general meeting in 2021. At the Meeting, shareholders of the Corporation will be able to consider, and if thought advisable, pass ordinary resolutions approving the Stock Option Plan and the RSU Plan. See "Matters to be Considered at the Meeting – Approval of the Stock Option Plan" and "Matters to be Considered at the Meeting – Approval of the RSU Plan," respectively, above.

*Chief Executive Officer Compensation*

The independent Directors:

· will periodically review the CEO's compensation and recommend any changes to the Board for approval;

· will review corporate goals and objectives relevant to the compensation of the CEO and recommend them to the Board for approval; and

· will review and, if appropriate, recommend to the Board for approval any agreements between the Corporation and the CEO, including protections in the event of a change of control or other special circumstances, as appropriate.

The components of the CEO's compensation are the same as those that apply to the other executive officers of the Corporation, namely base salary, bonus and long-term incentives in the form of stock options and RSUs.

<u>Summary Compensation Table</u>

The following table summarizes the compensation paid during the two most recently completed financial years in respect of the individuals who were carrying out the role of the Chief Executive Officer of the Corporation ("**CEO**"), the Chief Financial Officer of the Corporation ("**CFO**"), each of the three most highly compensated executive officers other than the CEO and CFO at the end of the most recently completed financial year whose total compensation was individually more than $150,000 for that financial year (the "**Named Executive Officers**" or "**NEOs**") and each of the Directors of the Corporation. As of December 31, 2021, the Chief Executive Officer, Chief Financial Officer and President were the only Named Executive Officers of the Corporation as the Corporation did not employ any other executive officers whose total compensation was greater than $150,000.

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | | **Annual Compensation excluding compensation securities<sup>(1)</sup>** | **Annual Compensation excluding compensation securities<sup>(1)</sup>** | **Annual Compensation excluding compensation securities<sup>(1)</sup>** | **Annual Compensation excluding compensation securities<sup>(1)</sup>** | **Annual Compensation excluding compensation securities<sup>(1)</sup>** | |
| <br>**Name and Principal Position** | <br>**Year Ended**<br> **<sup>(2)</sup>** | **Salary, consulting fee, retainer or commission ($)** | **Bonus ($)** | **Committee or Meeting Fees ($)** | **Value of Perquisites ($)** | **Value of All Other Compensation ($)** | <br>**Total Compensation ($)** |
| **Officers** |  |  |  |  |  |  |  |
| Justin Kenna,<br> Director, Chief Executive Officer<sup>(3)</sup> | 2021 | 687810 | Nil | Nil | Nil | 889176 | 1576986 |
| Justin Kenna,<br> Director, Chief Executive Officer<sup>(3)</sup> | 2020 | N/A | N/A | N/A | N/A | N/A | N/A |
| Kevin Wright, Director, Chairman of the Board, President and Former CEO<sup>(4)(5)</sup> | 2021 | 243750 | Nil | Nil | Nil | Nil | 243750 |
| Kevin Wright, Director, Chairman of the Board, President and Former CEO<sup>(4)(5)</sup> | 2020 | 75000 | 168500 | N/A | Nil | 115367 | 358867 |
| Paul Bozoki, Chief Financial Officer<sup>(4)</sup> | 2021 | 101667 | Nil | Nil | Nil | 15500 | 117167 |
| Paul Bozoki, Chief Financial Officer<sup>(4)</sup> | 2020 | 16500 | Nil | N/A | Nil | 53246 | 69746 |
| Jan Neumeister, Head of European Operations | 2021 | 267960 | Nil | Nil | Nil | 79267 | 347227 |
| Jan Neumeister, Head of European Operations | 2020 | N/A | N/A | N/A | N/A | N/A | N/A |
| **Directors** | **Directors** | **Directors** | **Directors** | **Directors** | **Directors** | **Directors** | **Directors** |
| Craig Armitage, Director<sup>(6)</sup> | 2021 | Nil | Nil | Nil | Nil | Nil | Nil |
| Craig Armitage, Director<sup>(6)</sup> | 2020 | Nil | Nil | Nil | Nil | 8874 | 8874 |
| Travis Goff, Director<sup>(7)</sup> | 2021 | Nil | Nil | Nil | Nil | Nil | Nil |
| Travis Goff, Director<sup>(7)</sup> | 2020 | N/A | N/A | N/A | N/A | N/A | N/A |
| Paul LeBreux, Director<sup>(8)</sup> | 2021 | Nil | Nil | Nil | Nil | Nil | Nil |
| Paul LeBreux, Director<sup>(8)</sup> | 2020 | N/A | N/A | N/A | N/A | N/A | N/A |
| Tom Walker, Director<sup>(7)</sup> | 2021 | Nil | Nil | Nil | Nil | Nil | Nil |
| Tom Walker, Director<sup>(7)</sup> | 2020 | N/A | N/A | N/A | N/A | N/A | N/A |
| **Former Directors** | **Former Directors** | **Former Directors** | **Former Directors** | **Former Directors** | **Former Directors** | **Former Directors** | **Former Directors** |
| Neil Said<sup>(5)(9)</sup> | 2021 | 75000 | Nil | Nil | Nil | Nil | Nil |
| Neil Said<sup>(5)(9)</sup> | 2020 | 10000 | Nil | Nil | Nil | 53246 | 63246 |

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________

Notes:

(1) The Corporation completed a reverse takeover transaction (the "**RTO**") effective September 30, 2020. Certain amounts included in the table above reflect the compensation paid to the directors of Magnolia Colombia Ltd., as a predecessor to the Corporation, and the Corporation, subsequent to the completion of the RTO.

(2) On July 30, 2021, the Corporation announced it had changed its fiscal year end from November 30 to December 31. Information in the table above has been presented for the 13 months ended December 31, 2021 and the 12 months ended November 30, 2020.

(3) Mr. Kenna joined the Corporation as Chief Executive Officer and a Director on January 22, 2021. Mr. Kenna does not receive any additional compensation for acting as a Director.

(4) Compensation paid as consulting fees under the independent contractor agreements with the Named Executive Officer as described under the heading "Executive Compensation – Termination of Employment, Change in Responsibilities and Employment Contracts" of this Circular.

(5) Effective on completion of the RTO, Mr. Wright replaced Neil Said as Chief Executive Officer and President of the Corporation and joined the board as a Director. On January 22, 2021, Mr. Wright stepped down as CEO concurrently with Mr. Kenna assuming the role of CEO. Mr. Wright does not receive any additional compensation for acting as a Director.

(6) Mr. Armitage was first appointed as a Director effective September 30, 2020 in connection with the RTO.

(7) Messrs. Goff and Walker were each first elected at the Corporation's annual and special meeting held on September 21, 2021.

(8) Mr. LeBreux was first appointed as a Director effective March 30, 2021.

(9) Effective September 30, 2020, in connection with the RTO, Mr. Said ceased to be a director of the Corporation. On December 3, 2020, Mr. Said was re-appointed to the Board as Chairman. Mr. Said did not stand for election at the Corporation's annual and special meeting held on September 21, 2021 and accordingly ceased to be a Director on September 21, 2021.

**Compensation Securities**

The following table sets out all compensation securities granted or issued to each Named Executive Officer and Director by the Corporation for services provided or to be provided, directly or indirectly, to the Corporation during the thirteen months ended December 31, 2021.

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Compensation Securities** | **Compensation Securities** | **Compensation Securities** | **Compensation Securities** | **Compensation Securities** | **Compensation Securities** | **Compensation Securities** | **Compensation Securities** |
| **Name and Position** | **Type of Compensation Security** | **Number of compensation securities, number of underlying securities, and percentage of class** | **Date of issue or grant** | **Issue, conversion or exercise price**<br> **($)** | **Closing price of security or underlying security on date of grant**<br> **($)** | **Closing price of security or underlying security at year end ($)** | **Expiry date** |
| **Officers** | **Officers** | **Officers** | **Officers** | **Officers** | **Officers** | **Officers** | **Officers** |
| Justin Kenna,<br> Director, Chief Executive Officer<sup>(1)</sup> | Options | 2,000,000 / 2,000,000 / 0.8% | January 22, 2021 | $0.44 | $0.52 | $0.31 | January 22, 2026 |
| Justin Kenna,<br> Director, Chief Executive Officer<sup>(1)</sup> | RSUs | 2000000 | June 21, 2021 | N/A | $0.38 | $0.31 | N/A |
| Kevin Wright, Director, Chairman of the Board, President and Former CEO<sup>(2)</sup> | Options | Nil | N/A | N/A | N/A | N/A | N/A |
| Kevin Wright, Director, Chairman of the Board, President and Former CEO<sup>(2)</sup> | RSUs | Nil | N/A | N/A | N/A | N/A | N/A |
| Paul Bozoki, Chief Financial Officer<sup>(3)</sup> | Options | 200,000 / 200,000 / 0.08% | September 17, 2021 | $0.435 | $0.38 | $0.31 | September 21, 2026 |
| Paul Bozoki, Chief Financial Officer<sup>(3)</sup> | RSUs | Nil | N/A | N/A | N/A | N/A | N/A |
| Jan Neumeister, Head of European Operations<sup>(4)</sup> | Options | 500,000 / 500,000 / 0.2% | March 2, 2021 | $0.47 | $0.465 | $0.31 | March 2, 2026 |
| Jan Neumeister, Head of European Operations<sup>(4)</sup> | 2020 | N/A | N/A | N/A | N/A | N/A | N/A |
| **Directors** | **Directors** | **Directors** | **Directors** | **Directors** | **Directors** | **Directors** | **Directors** |
| Craig Armitage, Director<sup>(5)</sup> | Options | Nil | N/A | N/A | N/A | N/A | N/A |
| Craig Armitage, Director<sup>(5)</sup> | RSUs | Nil | N/A | N/A | N/A | N/A | N/A |
| Travis Goff, Director<sup>(6)</sup> | Options | Nil | N/A | N/A | N/A | N/A | N/A |
| Travis Goff, Director<sup>(6)</sup> | RSUs | Nil | N/A | N/A | N/A | N/A | N/A |
| Paul LeBreux, Director<sup>(7)</sup> | Options | 100000 | March 30, 2021 | $0.40 | N/A | N/A | N/A |
| Paul LeBreux, Director<sup>(7)</sup> | RSUs | Nil | N/A | N/A | N/A | N/A | N/A |
| Tom Walker, Director<sup>(6)</sup> | Options | Nil | N/A | N/A | N/A | N/A | N/A |
| Tom Walker, Director<sup>(6)</sup> | RSUs | Nil | N/A | N/A | N/A | N/A | N/A |
| **Former Directors** | **Former Directors** | **Former Directors** | **Former Directors** | **Former Directors** | **Former Directors** | **Former Directors** | **Former Directors** |
| Neil Said<sup>(8)</sup> | Options | Nil | N/A | N/A | N/A | N/A | N/A |
| Neil Said<sup>(8)</sup> | RSUs | Nil | N/A | N/A | N/A | N/A | N/A |

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________

Notes:

(1) As at December 31, 2021, Mr. Kenna held an aggregate of 2,000,000 options, exercisable into 2,000,000 Common Shares, and 1,000,000 RSUs, eligible to be settled in Common Shares. These options vest quarterly over a two-year period and the RSUs vest annually.

(2) As at December 31, 2021, Mr. Wright held an aggregate of 325,000 options, exercisable into 325,000 Common Shares. These options vested immediately upon grant.

(3) As at December 31, 2021, Mr. Bozoki held an aggregate of 384,483 options, exercisable into 384,483 Common Shares. 175,000 of these options vested on March 13, 2022 and 175,000 vest on September 13, 2022. 34,483 options previously vested.

(4) As at December 31, 2021, Mr. Neumeister held an aggregate of 500,000 options, exercisable into 500,000 Common Shares. One eighth of these options vest every three months and will be fully vested two years from the date of grant.

(5) As at December 31, 2021, Mr. Armitage held an aggregate of 250,000 options, exercisable into 250,000 Common Shares. These options vested immediately upon grant.

(6) As at December 31, 2021, Messrs. Goff and Walker did not hold any compensation securities of the Corporation.

(7) As at December 31, 2021, Mr. LeBreux held an aggregate of 100,000 options, exercisable into 100,000 Common Shares. These options vested immediately upon grant.

(8) Mr. Said's previously issued options expired unexercised following the expiry of his term as a Director and accordingly, as at December 31, 2021, Mr. Said did not hold any compensation securities of the Corporation.

**Exercise of Compensation Securities**

No Named Executive Officer or Director exercised stock options in the most recently completed financial year. The following table describes the settlement of RSUs in the most recently completed financial year:

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Exercise of Compensation Securities** | **Exercise of Compensation Securities** | **Exercise of Compensation Securities** | **Exercise of Compensation Securities** | **Exercise of Compensation Securities** | **Exercise of Compensation Securities** | **Exercise of Compensation Securities** | **Exercise of Compensation Securities** |
| **Name and Position** | **Type of Compensation Security** | **Number of underlying securities exercised** | **Exercise price per security ($)** | **Date of exercise / settlement** | **Closing price per security on date of exercise ($)** | **Difference between exercise price and closing price on date of exercise**  | **Total value on exercise / settlement date ($)** |
| Justin Kenna,<br> Director, Chief Executive Officer | RSUs | 1000000 | N/A | June 21, 2021 | $0.38 | N/A | $380000 |

---

No other Directors or Named Executive Officers had RSUs settle during the most recently completed financial year.

**Stock Option Plans and Other Incentive Plans**

Options and RSUs are granted pursuant to the Stock Option Plan and RSU Plan, respectively, and in accordance with the policies of the CSE. The Stock Option Plan and RSU Plan are administered by the Board. See above under the heading "Matters to be Considered at the Meeting – Approval of the Stock Option Plan" and "Matters to be Considered at the Meeting – Approval of the RSU Plan."

**Securities Authorized for Issuance under Equity Compensation Plans**

The following table shows the Common Shares authorized for issuance from treasury under the Stock Option Plan and the RSU Plan, being the Corporation's only compensation plans under which Common Shares are authorized for issuance, as at December 31, 2021.

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| | | | | |
|:---|:---|:---|:---|:---|
| **Plan Category** |  | **Number of Common Shares to be Issued Upon Exercise of Outstanding Options, Warrants and Rights** <br> **(A)** | **Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights**<br> **(B)** | **Number of Common Shares Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Common Shares Reflected in Column (A))**<br> **(C)** |
| Equity Compensation Plans Not | Approved by Shareholders | Nil | N/A | N/A |
| Equity Compensation Plans Approved by Shareholders<sup>(1)</sup> | Stock Option Plan<sup>(2)</sup>  | 14955958 | $0.46 |  |
|  | RSU Plan | 5242158 | N/A | 4240074 |
| Total |  | 20198116 | $0.46 | 4240074 |

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_______

Note:

(1) The number of RSUs granted pursuant to the RSU Plan shall not exceed 11,497,315 Common Shares, being 10% of the total number of issued and outstanding Common Shares on the date the RSU Plan was adopted by the Board. As of the date of this Circular, 6,242,158 RSUs have been granted pursuant to the RSU Plan and 1,000,000 RSUs have been settled for Common Shares, resulting in 4,255,157 remaining available for grant. Notwithstanding the foregoing, the Common Shares reserved for issue under the RSU Plan, together with any Common Shares reserved for issue pursuant to the Stock Option Plan, may not exceed 10% of the total issued and outstanding Common Shares (on a non-diluted basis) on the date of a grant of RSUs to a Participant. Accordingly, as of the date hereof, an additional 1,540,074 RSUs and options, in the aggregate, remain available for grant. See "Matters to be Considered at the Meeting – Approval of the Stock Option Plan" and "Matters to be Considered at the Meeting – Approval of the RSU Plan."

As at the date of this Circular, the number of stock options and RSUs outstanding that were issued under the Stock Option Plan and RSU Plan, respectively, represents approximately 8.79% of the outstanding Common Shares.

**Pension Plan Benefits**

The Corporation does not have and does not intend to implement any deferred compensation plan or pension plan that provides for payments or benefits at, following or in connection with retirement.

**Termination of Employment, Change in Responsibilities, and Employment Contracts**

The following describes the respective consulting agreements entered into by the Corporation and each NEO as of December 31, 2021:

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| | | | | |
|:---|:---|:---|:---|:---|
| **Name and Position** | **Notice Period** | **Monthly Fees** | **Severance on Termination** | **Severance on Change of Control** |
| Justin Kenna,<br> Chief Executive Officer<sup>(</sup> | N/A | US$50,000 | 12 months' fees | 24 months' fees |
| Kevin Wright,<br> President and Former CEO | 30 days | $18750 | 18 months' fees | 36 months' fees plus aggregate cash bonuses paid in the 24 months prior to the Change of Control |
| Paul Bozoki,<br> Chief Financial Officer | 30 days | $10000 | 6 months' fees | 24 months' fees plus aggregate cash bonuses paid in the 24 months prior to the Change of Control |
| Jan Neumeister,<br> Head of European Operations | 30 days | US$12,500 | 3 months' fees | N/A |

---

*Change of Control Provisions*

For the purpose of the agreements with the officers as set forth above, "Change of Control" is defined as the acquisition by any person or entity of:

(1) shares or rights or options to acquire Common Shares or securities which are convertible into Common Shares or any combination thereof such that after the completion of such acquisition such person would be entitled to exercise 50% or more of the votes entitled to be cast at a meeting of the Shareholders of the Corporation;

(2) shares or rights or options to acquire shares, or their equivalent, of any material subsidiary of the Corporation or securities which are convertible into shares of the material subsidiary or any combination thereof such that after the completion of such acquisition such person would be entitled to exercise 50% or more of the votes entitled to be cast a meeting of the shareholders of the material subsidiary; or

(3) more than 50% of the material assets of the Corporation, including the acquisition of more than 50% of the material assets of any material subsidiary of the Corporation.

Such Change of Control payments may be triggered by either the Corporation or the officer who elects within one year from the date of such Change of Control to elect to have such officer's agreement terminated.

*Summary of Termination Payments*

The estimated incremental payments, payables and benefits that might be paid to the officers pursuant to the above noted agreements in the event of termination without cause or after a Change of Control (assuming such termination or Change of Control is effective as of December 31, 2021) are detailed below:

---

| | | |
|:---|:---|:---|
| **Name and Position** | **Termination not for Cause**<br> **($)<sup>(1)</sup>** | **Termination on a Change of Control**<br> **($)<sup>(1)</sup>** |
| Justin Kenna,<br> Chief Executive Officer |  |  |
| Salary/Fees | $752100 | $1504200 |
| Bonus: | Nil | Nil |
| **Total:** | $752100 | $1504200 |
| Kevin Wright,<br> President |  |  |
| Salary/Fees | $225000 | $675000 |
| Bonus: | Nil | $168500 |
| **Total:** | $225000 | $843500 |
| Paul Bozoki,<br> Chief Financial Officer |  |  |
| Salary/Fees | $60000 | $240000 |
| Bonus: | Nil | Nil |
| **Total:** | $60000 | $240000 |
| Jan Neumeister,<br> Head of European Operations |  |  |
| Salary/Fees | $47006 | N/A |
| Bonus: | Nil | N/A |
| **Total:** | $47006 | N/A |

---

Note:

(1) Amounts for Mr. Kenna and Mr. Neumeister have been converted from USD into CAD at the average exchange rate for 2021 of US$1.000:C$1.2535.

**Other Arrangements**

No management functions of the Corporation or its subsidiaries are to any substantial degree performed by a person or company other than the directors or executive officers of the Corporation or its subsidiaries.

**INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS**

No Director, executive officer or Director nominee proposed for election at the Meeting (or any associates thereof) are indebted to the Corporation or any of its subsidiaries and none of the Corporation or any of its subsidiaries has guaranteed or otherwise agreed to provide assistance in the maintenance or servicing of any indebtedness of any Director, executive officer or Director nominee proposed for election at the Meeting (or any associates thereof).

**DIRECTOR AND OFFICER INSURANCE**

The Corporation maintains insurance for the benefit of its directors and officers against liability in their respective capacities as directors and officers. The Corporation has purchased in respect of directors and officers an aggregate of $5,000,000 in coverage. The approximate amount of premiums paid by the Corporation during the financial year ended December 31, 20201 in respect of such insurance was $80,600.

Subject to the limitations contained in the OBCA, the Corporation shall indemnify a director or officer, a former director or officer, or another individual who acts or acted at the Corporation's request as a director or officer or an individual acting in a similar capacity, of another entity, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by the individual in respect of any civil, criminal, investigative or other proceeding in which the individual involved because of that association with the Corporation or other entity, if (a) the individual acted honestly and in good faith with a view to the best interests of the Corporation or, as the case may be, to the best interests of the other entity for which the individual acted as a director or officer or in a similar capacity at the Corporation's request; (b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the individual had reasonable grounds for believing that the individual's conduct was lawful; and (c) a court or other competent authority has not judged that the individual has committed any fault or omitted to do anything that the individual ought to have done.

**INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS**

Except as otherwise disclosed in this Circular, the Corporation is not aware of any material interest, direct or indirect, of: (i) any informed person of the Corporation or any associate or affiliate of any informed person, in any transaction since the commencement of the Corporation's most recently completed financial year, or in any proposed transaction, that has materially affected or would materially affect the Corporation or any of its Subsidiaries; (ii) any proposed nominee for election as a Director, or any associate or affiliate of such person, in any matter to be acted upon at the Meeting; or (iii) any person who has been a Director or executive officer of the Corporation at any time since the beginning of the last financial year, or any associate or affiliate of any such person, in any matter to be acted upon at the Meeting, other than with respect to the approval of the Stock Option Plan and RSU Plan as described in this Circular.

On June 30, 2021, the Corporation completed the acquisition of all of the issued and outstanding membership interests (the "**Interests**") in the capital of Nextgen Tech LLC (d/b/a Complexity Gaming) pursuant to a purchase agreement (the "**Purchase Agreement**") among the Corporation, Blue & Silver Ventures Ltd., Goff NextGen Holdings, LLC and Jason Lake. As consideration for the acquisition of the Interests, the Company issued 83,328,750 Common Shares pursuant to the terms of the Purchase Agreement, of which 56,871,872 Common Shares were issued to Blue & Silver Ventures Ltd. and 18,957,291 Common Shares were issued to Goff NextGen Holdings, LLC. Blue & Silver Ventures Ltd. and Goff NextGen Holdings, LLC each subsequently participated in a non-brokered private placement of units at a purchase price of $0.40 per unit, with each unit comprised of one common share and one-half of one commons hare purchase warrant of the Corporation, and acquired 5,312,500 and 15,937,500 units, respectively. Each whole warrant entitles the holder thereof to purchase one Common Share at a price of $0.60 per Common Share (subject to adjustment) until July 22, 2023.

**STATEMENT OF GOVERNANCE PRACTICES**

**Director Independence**

Currently, the Board is comprised of six Directors, four of whom are considered to be independent within the meaning of Section 1.4 of National Instrument 52-110 – *Audit Committees* ("**NI 52-110**"), being Craig Armitage, Travis Goff, Paul LeBreux and Tom Walker. Justin Kenna is not considered to be an independent Director since he is the Chief Executive Officer of the Corporation and Kevin Wright is not considered to be an independent Director since he is the President of the Corporation. If the individuals nominated for election as Directors at the Meeting are elected, the Board will be comprised of six Directors, four of whom will be considered to be independent within the meaning of Section 1.4 of NI 52-110.

The Corporation has taken steps to ensure that adequate structures and processes are in place to permit the Board to function independently of management of the Corporation: (i) a majority of the directors are not management of the Corporation and four are independent, (ii) members of management, including without limitation, the President and CEO of the Corporation, are not present for the discussion and determination of certain matters at meetings of the Board unless required, (iii) under the by-laws of the Corporation, any two directors may call a meeting of the Board; (iv) in addition to the standing committees of the Board, independent committees will be appointed from time to time, when appropriate; and (v) the Board policy is to hold in-camera meetings with the independent directors at the end of each meeting of the Board or committee of the Board to the extent required. The Corporation's Audit Committee is comprised entirely of independent Directors.

**Board Mandate** 

The Board does not have a written mandate. The duties and responsibilities of the Board are to supervise the management of the business and affairs of the Corporation, and to act with a view towards the best interests of the Corporation. In discharging its mandate, the Board is responsible for the oversight and review of: (i) the strategic planning process of the Corporation; (ii) identifying the principal risks of the Corporation's business and ensuring the implementation of appropriate systems to manage these risks; succession planning, including appointing, training and monitoring senior management; (iii) a communications policy for the Corporation to facilitate communications with investors and other interested parties; and (iv) the integrity of the Corporation's internal control and management information systems.

The Board discharges its responsibilities directly and through its committees, currently consisting solely of the Audit Committee.

**Meetings**

The Board meets not less than four times per year: three meetings to review quarterly results and one meeting prior to the issuance of the annual financial results of the Corporation. At each Board meeting, unless otherwise determined by the Board, an *in camera* meeting of independent directors takes place.

The Chairman of the Board provides leadership to the directors in discharging the Board's mandate, including: leading, managing and organizing the Board consistent with the approach to governance adopted by the Board from time to time; promoting cohesiveness among the directors; and being satisfied that the responsibilities of the Board and its committees are well understood by the directors. The Chairman of the Board provides advice, counsel and mentorship to the Corporation's management team, promotes the provision of information to the directors on a timely basis, is responsible for various tasks in connection with meetings of the directors and presides over meetings of the Corporation's shareholders.

In discharging its mandate, the Board and any committee of the Board have the authority to retain and receive advice from outside financial, legal or other advisors (at the cost of the Corporation) as the Board or any such committee determines to be necessary to permit it to carry out its duties.

The Board appreciates having certain members of senior management attend each Board meeting to provide information and opinion to assist the members of the Board in their deliberations. Management attendees who are not Board members are excused for any agenda items which are reserved for discussion among directors only.

**Board Committees**

*Audit Committee*

The purposes of the Audit Committee are to assist the Board's oversight of: the integrity of the Corporation's financial statements; the Corporation's compliance with legal and regulatory requirements; the qualifications and independence of the Corporation's independent auditors; and the performance of the independent auditors and the Corporation's internal audit function.

The Corporation's Audit Committee is currently comprised of three directors: Paul LeBreux (Chair), Craig Armitage and Tom Walker, each of whom is considered "independent" and "financially literate" within the meaning of NI 52-110. For the education and experience relevant to the performance by each such person of the responsibilities as a member of the Audit Committee, see "Matters to be Considered at the Meeting – Election of Directors – Nominees for Election to the Board. The members of the Audit Committee are appointed annually by the Board and serve at the pleasure of the Board until their successors are duly appointed.

NI 52-110 relating to the composition and function of audit committees applies to every CSE-listed corporation, including the Corporation. NI 52-110 requires the Corporation to have a written audit committee charter and to make the disclosure required by Form 52-110F2, which includes disclosure of the text of the audit committee charter in the management information circular of the Corporation wherein management solicits proxies from the security holders of the Corporation for the purpose of electing directors to the Board. A copy of the Audit Committee charter is set out in Schedule "A".

<u>Audit Committee Oversight</u>

At no time since the commencement of the Corporation's most recently completed financial year has there been a recommendation of the Audit Committee to nominate or compensate an external auditor which was not adopted by the Board.

<u>Reliance on Certain Exemptions</u>

At no time during the Corporation's fiscal year ended December 31, 2021 has the Corporation relied on the exemption in Section 2.4 of NI 52-110, or an exemption from NI 52-110, in whole or in part, granted under Part 8 of NI 52-110. However, the Corporation is relying on the exemption contained in section 6.1 of NI 52-110 and is not required to comply with Parts 3 and 5 of NI 52-110 given that it is a venture issuer as defined in NI 52-110.

<u>Pre-Approval Policies and Procedures</u>

The Audit Committee of the Corporation has not adopted specific policies and procedures for the engagement of non-audit services.

<u>External Auditor Service Fees</u>

Kreston GTA LLP is the Company's auditor and has served in such capacity continuously since March 26, 2021. From May 8, 2013 until the appointment of Kreston GTA LLP, McGovern Hurley LLP, Chartered Accountants, was the external auditor of the Company. For the fiscal years ended December 31, 2021 and November 30, 2020, the Corporation was billed the following fees by the external auditors:

---

| | | |
|:---|:---|:---|
| **Fee Category** | **Fiscal year ended December 31, 2021** | **Fiscal year ended November 30, 2020** |
| Audit fees | $150000 | $73000 |
| Audit-related fees<sup>(1)</sup> | $65000 | $27000 |
| Tax fees<sup>(2)</sup> | Nil | $5000 |
| All other fees<sup>(3)</sup> | Nil | Nil |
| Total | $215000 | $105000 |

---

Notes:

(1) Audit-related fees in each of 2021 and 2020 were for quarterly reviews of unaudited financials.

(2) Tax fees in each of 2021 and 2020 were for paid for tax compliance services including preparation of tax returns and tax-related advice.

Before the auditors are engaged by the Corporation to render audit or non-audit services, the engagement is approved by the Audit Committee.

**Directorships and Board Interlocks**

None of the Directors currently sits on the board of another public company.

The Board considers it to be good governance to avoid interlocking relationships if possible. However, there is no formal limit on the number of the Directors that may sit on the same public company board and/or committee. The Board considers interlocking memberships on a case-by-case basis. As of the date hereof, there are no interlocking board membership among the Directors.

**Position Descriptions**

The Board has not adopted formal position descriptions for the Chairman, the committee chair or the Chief Executive Officer as their respective roles are well understood within GameSquare.

**Orientation and Continuing Education**

The Board will be responsible for ensuring that new directors are provided with an orientation and education program, which will include information about the duties and obligations of directors, the business and operations of the Corporation, documents from recent Board meetings, and opportunities for meetings and discussion with senior management and other directors. Directors are expected to attend all meetings of the Board and are also expected to prepare thoroughly in advance of each meeting in order to actively participate in the deliberations and decisions.

The Board recognizes the importance of ongoing director education and the need for each director to take personal responsibility for this process. The Board notes that it has benefited from the experience and knowledge of individual members of the Board in respect of the evolving governance regime and principles. The Board ensures that all directors are apprised of changes in the Corporation's operations and business.

**Ethical Business Conduct**

The Board is apprised of the activities of the Corporation and ensures that it conducts such activities in an ethical manner. The Board has not adopted a written code of business conduct and ethics, however, the Board encourages and promotes an overall culture of ethical business conduct by promoting compliance with applicable laws, rules and regulations; providing guidance to consultants, officers and directors to help them recognize and deal with ethical issues; promoting a culture of open communication, honesty and accountability; and ensuring awareness of disciplinary actions for violations of ethical business conduct. In particular, the Board ensures that directors exercise independent judgment in considering transactions and certain activities of the Corporation by holding in-camera sessions of independent directors, when applicable, and by having each director declare his or her interest in a particular transaction and abstaining from voting on such matters, where applicable.

**Nomination and Election of Directors**

Generally, the independent directors are responsible for identifying and recruiting new candidates for nomination to the Board and reviewing the qualifications of new candidates proposed by other members of the Board. The process by which the Board anticipates that it will identify new candidates is through recommendations of the independent directors whose responsibility it is to develop, and periodically update and recommend to the Board for approval, a long-term plan for Board composition that takes into consideration the following: (a) the independence of each director; (b) the competencies and skills the Board, as a whole, should possess such as financial literacy, integrity and accountability, the ability to engage in informed judgment, governance, strategic business development, excellent communications skills and the ability to work effectively as a team; (c) the current strengths, skills and experience represented by each director, as well as each director's personality and other qualities as they affect Board dynamics; and (d) the strategic direction of the Corporation.

**Other Board Committees**

The Board does not have any standing committees other than the Audit Committee.

**Assessments**

The Board and its individual directors are assessed on an informal basis continually as to their effectiveness and contribution. Each member of the Board is encouraged to engage in discussions amongst the members of the Board as to evaluation of the effectiveness of the Board as a whole and of each individual director. All directors are free to make suggestions for improvement of the practice of the Board at any time and are encouraged to do so.

**Environmental, Social and Governance**

The Corporation understands that Environmental, Social and Governance ("**ESG**") matters are becoming increasingly valued by its various stakeholders, including our shareholders, customers, suppliers and employees. The Corporation is committed to embedding these practices into its business model, which include: (i) complying with all applicable environmental laws and regulations; (ii) actively supporting diversity and inclusion; (iii) aiming to provide safe and healthy environment for all employees; and (iv) promoting a culture where all of the Corporation's employees share the foregoing commitments. The Corporation expects to continue to focus its ESG initiatives within the above areas while assessing additional areas of importance to its stakeholders in the coming year.

**Shareholder Engagement**

Management welcomes frequent dialogue with shareholders. Management is committed to ensuring that if items of significant concern are raised by shareholders, these items are brought to the attention of the Board. In addition, management regularly engages with the investment community through: annual and quarterly reports, news releases, the Corporation's website https://www.gamesquare.com, disclosure and regulatory documents filed on SEDAR at <u>www.sedar.com</u>; quarterly conference calls to review financial and operating results open to all investors, the investment community, analysts and media; attendance at investor-focused conferences; and are available to meet or set up calls, as requested, with shareholders and potential shareholders.

**Conflicts of Interest**

In accordance with the OBCA, Directors or officers of the Corporation who have a material interest in a material contract or a proposed material contract with the Corporation are required, subject to certain exceptions, to disclose that interest and generally abstain from voting on any resolution to approve the contract. In addition, the Directors are required to act honestly and in good faith with a view to the best interests of the Corporation.

Some of the Directors and officers of the Corporation have or will have either other employment or other business or time restrictions placed on them and, accordingly, these Directors and officers of the Corporation will only be able to devote part of their time to the affairs of the Corporation.

**Risk Oversight**

The Board is responsible for identifying the principal risks of the Corporation and the mitigation strategies with regards to those risks, and for taking reasonable steps to ensure that management has an effective risk management structure in place relative to its risk profile so the Corporation can achieve its strategy and objectives. The Board periodically discusses with management guidelines and policies with respect to risk assessment, risk management, and major strategic, financial and operational risk exposures, and the steps management has taken to monitor and control any exposure resulting from such risks. The Board relies on senior management to supervise day-to-day risk management, and management reports quarterly to the Audit Committee.

The Board believes that the most significant risks facing the Corporation vary from time to time depending on the prevailing economic climate and the specific nature of the Corporation's activities at the relevant time. From time to time, the Board reviews general and particular risks faced by the Corporation. A comprehensive list of material risks applicable to the Corporation and how they are mitigated is provided in the Corporation's management's discussion and analysis for the thirteen months ended December 31, 2021 and annual report on Form 20-F.

**OTHER BUSINESS**

The management of the Corporation and the Directors are not aware of any matters intended to come before the Meeting other than those items of business set forth in the attached Notice of Meeting accompanying this Circular. If any other matters properly come before the Meeting, it is the intention of the persons designated by management in the Form of Proxy to vote in respect of those matters in accordance with their judgment.

**SHAREHOLDER PROPOSALS**

The final date by which the Corporation must receive a proposal for any matter that a Shareholder proposes to raise at the annual meeting to be held in 2023 is March 4, 2023.

**ADDITIONAL INFORMATION**

Additional information relating to the Corporation can be found on the Corporation's profile on the SEDAR website at www.sedar.com. Additional financial information is provided in the audited consolidated financial statements and management's discussion and analysis of the Corporation for the thirteen months ended December 31, 2021. Copies of this Circular, and the audited consolidated financial statements of the Corporation as at and for the thirteen months ended December 31, 2021, may be obtained without charge by writing to the President at 150 York Street, Suite 1008, Toronto, Ontario, M5H 3S5. The Corporation may require payment of a reasonable charge if the request is made by a person who is not a Shareholder. These documents and additional information relating to the Corporation may also be found on SEDAR at <u>www.sedar.com</u> and on the Corporation's website at https://www.gamesquare.com.

**APPROVAL OF DIRECTORS**

The contents and the sending of this Circular to the Shareholders have been approved by the Board of Directors.

---

| | |
|:---|:---|
| Dated: May 4<sup>th</sup>, 2022 | **BY ORDER OF THE BOARD OF DIRECTORS**<br>*"Justin Kenna"* |
|  | Justin Kenna<br> Chief Executive Officer<br> GameSquare Esports Inc. |

---

**SCHEDULE "A"**

**AUDIT COMMITTEE CHARTER**

**Schedule A**

**Audit Committee Charter** 

(Implemented pursuant to National Instrument 52-110)

This Charter has been adopted by the Board in order to comply with the Instrument and to more properly define the role of the Committee in the oversight of the financial reporting process of the Corporation. Nothing in this Charter is intended to restrict the ability of the Board or Committee to alter or vary procedures in order to comply more fully with the Instrument, as amended from time to time.

**PART 1**

**Purpose:** The purpose of the Committee is to:

(a) significantly improve the quality of the Corporation's financial reporting;

(b) assist the Board to properly and fully discharge its responsibilities;

(c) provide an avenue of enhanced communication between the Board and external auditors;

(d) enhance the external auditor's independence;

(e) increase the credibility and objectivity of financial reports; and

(f) strengthen the role of the outside members of the Board by facilitating in depth discussions between Members, management and external auditors.

**1.1 Definitions**

"accounting principles" has the meaning ascribed to it in National Instrument 52-107 *Acceptable Accounting Principles, Auditing Standards and Reporting Currency;*

"Affiliate" means a company that is a subsidiary of another company or companies that are controlled by the same entity;

"audit services" means the professional services rendered by the Corporation's external auditor for the audit and review of the Corporation's financial statements or services that are normally provided by the external auditor in connection with statutory and regulatory filings or engagements;

"Board" means the board of directors of the Corporation;

"Charter" means this audit committee charter;

"Corporation" means GameSquare Esports Inc.;

"Committee" means the committee established by and among certain members of the Board for the purpose of overseeing the accounting and financial reporting processes of the Corporation and audits of the financial statements of the Corporation;

"Control Person" means any person that holds or is one of a combination of persons that holds a sufficient number of any of the securities of the Corporation so as to affect materially the control of the Corporation, or that holds more than 20% of the outstanding voting shares of the Corporation, except where there is evidence showing that the holder of those securities does not materially affect control of the Corporation;

"executive officer" means an individual who is:

(a) the chair of the Corporation;

(b) the vice-chair of the Corporation;

(c) the President of the Corporation;

(d) the vice-president in charge of a principal business unit, division or function including sales, finance or production;

(e) an officer of the Corporation or any of its subsidiary entities who performs a policy-making function in respect of the Corporation; or

(f) any other individual who performs a policy-making function in respect of the Corporation;

"financially literate" has the meaning set forth in Section 1.3;

"immediate family member" means a person's spouse, parent, child, sibling, mother or father-inlaw, son or daughter-in-law, brother or sister-in-law, and anyone (other than an employee of either the person or the person's immediate family member) who shares the individual's home;

"independent" has the meaning set forth in Section 1.2;

"Instrument" means National Instrument 52-110;

"MD&A" has the meaning ascribed to it in the National Instrument;

"Member" means a member of the Committee;

"National Instrument 51-102" means National Instrument 51-102 *Continuous Disclosure Obligations;* and

"non-audit services" means services other than audit services.

**1.2 Meaning of Independence**

1. A Member is independent if the Member has no direct or indirect material relationship

with the Corporation.

2. For the purposes of subsection 1, a material relationship means a relationship which could, in the view of the Board, reasonably interfere with the exercise of a Member's independent judgment.

3. Despite subsection 2 and without limitation, the following individuals are considered to have a material relationship with the Corporation:

(a) a Control Person of the Corporation;

(b) an Affiliate of the Corporation; and

(c) an employee of the Corporation.

**1.3 Meaning of Financial Literacy --** For the purposes of this Charter, an individual is financially literate if he or she has the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Corporation's financial statements.

**PART 2**

**2.1 Audit Committee –** The Board has hereby established the Committee for, among other purposes, compliance with the Instrument.

**2.2 Relationship with External Auditors –** The Corporation will henceforth require its external auditor to report directly to the Committee and the Members shall ensure that such is the case.

**2.3 Committee Responsibilities**

1. The Committee shall be responsible for making the following recommendations to the Board:

(a) the external auditor to be nominated for the purpose of preparing or issuing an auditor's report or performing other audit, review or attest services for the Corporation; and

(b) the compensation of the external auditor.

2. The Committee shall be directly responsible for overseeing the work of the external auditor engaged for the purpose of preparing or issuing an auditor's report or performing other audit, review or attest services for the Corporation, including the resolution of disagreements between management and the external auditor regarding financial reporting.

This responsibility shall include:

(a) reviewing the audit plan with management and the external auditor;

(b) reviewing with management and the external auditor any proposed changes in major accounting policies, the presentation and impact of significant risks and uncertainties, and key estimates and judgments of management that may be material to financial reporting;

(c) questioning management and the external auditor regarding significant financial reporting issues discussed during the fiscal period and the method of resolution;

(d) reviewing any problems experienced by the external auditor in performing the audit, including any restrictions imposed by management or significant accounting issues on which there was a disagreement with management;

(e) reviewing audited annual financial statements, in conjunction with the report of the external auditor, and obtaining an explanation from management of all significant variances between comparative reporting periods;

(f) reviewing the post-audit or management letter, containing the recommendations of the external auditor, and management's response and subsequent follow up to any identified weakness;

(g) reviewing interim unaudited financial statements before release to the public;

(h) reviewing all public disclosure documents containing audited or unaudited financial information before release, including any prospectus, the annual report, the annual information form and the MD&A;

(i) reviewing any evaluation of internal controls by the external auditor, together with management's response;

(j) reviewing the terms of reference of the internal auditor, if any;

(k) reviewing the reports issued by the internal auditor, if any, and management's response and subsequent follow up to any identified weaknesses; and

(l) reviewing the appointments of the Chief Financial Officer and any key financial executives involved in the financial reporting process, as applicable.

3. The Committee shall pre-approve all non-audit services to be provided to the Corporation or its subsidiary entities by the issuer's external auditor.

4. The Committee shall review the Corporation's financial statements, MD&A and annual and interim earnings press releases before the Corporation publicly discloses this information.

5. The Committee shall ensure that adequate procedures are in place for the review of the Corporation's public disclosure of financial information extracted or derived from the Corporation's financial statements and shall periodically assess the adequacy of those procedures.

6. When there is to be a change of auditor, the Committee shall review all issues related to the change, including the information to be included in the notice of change of auditor called for under National Policy 31, and the planned steps for an orderly transition.

7. The Committee shall review all reportable events, including disagreements, unresolved issues and consultations, as defined in the National Instrument, on a routine basis, whether or not there is to be a change of auditor.

8. The Committee shall, as applicable, establish procedures for:

(a) the receipt, retention and treatment of complaints received by the issuer regarding accounting, internal accounting controls, or auditing matters; and

(b) the confidential, anonymous submission by employees of the issuer of concerns regarding questionable accounting or auditing matters.

9. As applicable, the Committee shall establish, periodically review and approve the Corporation's hiring policies regarding partners, employees and former partners and employees of the present and former external auditor of the issuer, as applicable.

10. The responsibilities outlined in this Charter are not intended to be exhaustive. Members should consider any additional areas which may require oversight when discharging their responsibilities.

**2.4 De Minimis Non-Audit Services –** The Committee shall satisfy the pre-approval requirement in subsection 2.3(3) if:

(a) the aggregate amount of all the non-audit services that were not pre-approved is reasonably expected to constitute no more than five per cent of the total amount of fees paid by the issuer and its subsidiary entities to the issuer's external auditor during the fiscal year in which the services are provided;

(b) the Corporation or the relevant subsidiary of the Corporation, as the case may be, did not recognize the services as non-audit services at the time of the engagement; and

(c) the services are promptly brought to the attention of the Committee and approved by the Committee or by one or more of its members to whom authority to grant such approvals has been delegated by the Committee, prior to the completion of the audit.

**2.5 Delegation of Pre-Approval Function**

1. The Committee may delegate to one or more independent Members the authority to preapprove non-audit services in satisfaction of the requirement in subsection 2.3(3).

2. The pre-approval of non-audit services by any Member to whom authority has been delegated pursuant to subsection 1 must be presented to the Committee at its first scheduled meeting following such pre-approval.

**PART 3**

**3.1 Composition**

1. The Committee shall be composed of a minimum of three Members.

2. Every Member shall be a director of the issuer.

3. The majority of Members shall be independent.

4. Every audit committee member shall be financially literate.

**PART 4**

**4.1 Authority –** Until the replacement of this Charter, the Committee shall have the authority to:

(a) engage independent counsel and other advisors as it determines necessary to carry out its duties;

(b) set and pay the compensation for any advisors employed by the Committee;

(c) communicate directly with the internal and external auditors; and

(d) recommend the amendment or approval of audited and interim financial statements to the Board.

**PART 5**

**5.1 Disclosure in Information Circular --** If management of the Corporation solicits proxies from the security holders of the Corporation for the purpose of electing directors to the Board, the Corporation shall include in its management information circular the disclosure required by Form 52-110F2 (*Disclosure by Venture Issuers).*

**PART 6**

**6.1 Meetings**

1. Meetings of the Committee shall be scheduled to take place at regular intervals and, in

any event, not less frequently than quarterly.

2. Opportunities shall be afforded periodically to the external auditor, the internal auditor, if

any, and to members of senior management to meet separately with the Members.

3. Minutes shall be kept of all meetings of the Committee.

**SCHEDULE "B"**

**AMENDMENT RESOLUTION**

**BE IT RESOLVED AS A SPECIAL RESOLUTION THAT:**

(1) the articles of GameSquare Esports Inc. (the "**Corporation**") shall be amended to (i) amend the rights, privileges, conditions and restrictions of the existing class of common shares of the Corporation (the "**Common Shares**") such that they have the rights, privileges, conditions and restrictions as set out in Appendix 1; and (ii) create a new class of shares of the Corporation consisting of an unlimited number of proportionate voting shares of the Corporation (the "**Proportionate Voting Shares**") having the rights, privileges, conditions and restrictions as set out in Appendix 2;

(2) notwithstanding the approval of the shareholders of the Corporation as herein provided, the board of directors of the Corporation may, in its sole discretion, rename the Common Shares as "Subordinate Voting Shares" of the Corporation or revoke this special resolution before it is acted upon, without further approval of the shareholders; and

(3) any one or more of the directors or officers of the Corporation is hereby authorized and directed, acting for, in the name of and on behalf of the Corporation, to execute or cause to be executed, under the seal of the Corporation or otherwise, and to deliver or cause to be delivered, such other documents and instruments, and to do or cause to be done all such other acts and things, as may in the opinion of such director or officer of the Corporation be necessary or desirable to carry out the intent of the foregoing resolution (including, without limitation, the execution and filing of articles of amendment and such other forms as required) such determination to be conclusively evidenced by the execution and delivery of such documents, or the doing of any such act or thing.

**APPENDIX 1**

**TO AMENDMENT RESOLUTION**

**SPECIAL RIGHTS, PRIVILEGES, CONDITIONS AND RESTRICTIONS ATTACHED TO**

**COMMON SHARES**

The Common Shares of the Corporation shall consist of an unlimited number of shares designated as "Common Shares". The specific rights, privileges, conditions and restrictions attaching to the Common Shares are as follows:

**1.1 Voting**

The holders of common shares in the capital of the Corporation ("**Common Shares**") shall be entitled to receive notice of and to attend and vote at all meetings of shareholders of the Corporation except a meeting at which only the holders of another class or series of shares are entitled to vote. Each Common Share shall entitle the holder thereof to one vote at each such meeting.

**1.2 Equality**

Except as set out in these Articles, the Common Shares and proportionate voting shares in the capital of the Corporation ("**Proportionate Voting Shares**") have the same rights and are equal in all respects and shall be treated by the Corporation as if they were shares of one class only.

In connection with any Change of Control Transaction (as defined below) requiring approval of the holders of Common Shares and Proportionate Voting Shares under the *Business Corporations Act* (Ontario), holders of Common Shares and Proportionate Voting Shares shall be treated equally and identically, on a per share basis (except in respect of the number of votes allotted to each share and the 100:1 economic rights of the Proportionate Voting Shares versus the Common Shares), unless different treatment of the shares of each such class is approved by a majority of the votes cast by the holders of outstanding Common Shares or their proxyholders in respect of a resolution approving such Change of Control Transaction, voting separately as a class at a meeting of the holders of that class called and held for such purpose.

For the purpose of these Articles, a "**Change of Control Transaction**" means an amalgamation, arrangement, recapitalization, business combination or similar transaction of the Corporation, other than an amalgamation, arrangement, recapitalization, business combination or similar transaction that would result in (i) the voting securities of the Corporation outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the continuing entity or its direct or indirect parent) more than fifty percent (50%) of the total voting power of the voting securities of the Corporation, the continuing entity or its direct or indirect parent, and more than fifty percent (50%) of the total number of outstanding Common Shares (on an "as converted" basis in the case of Proportionate Voting Shares), the continuing entity or its direct or indirect parent, in each case as outstanding immediately after such transaction, and (ii) the shareholders of the Corporation immediately prior to the transaction owning voting securities of the Corporation, the continuing entity or its direct or indirect parent immediately following the transaction in substantially the same proportions (vis-a-vis each other) as such shareholders owned the voting securities of the Corporation immediately prior to the transaction (provided that in neither event shall the exercise of any exchangeable shares of a subsidiary of the Corporation that are exchangeable into shares of the Corporation be taken into account in such determination, and provided that each Proportionate Voting Shares shall be considered as equivalent to one hundred (100) Common Shares).

**1.3 Alteration to Rights of Common Shares**

So long as any Common Shares remain outstanding, the Corporation will not, without the consent of the holders of Common Shares expressed by separate special resolution, alter or amend these Articles if the result of such alteration or amendment would:

(a) prejudice or interfere with any right or special right attached to the Common Shares; or

(b) affect the rights or special rights of the holders of Common Shares or Proportionate Voting Shares on a per share basis as provided for herein.

**1.4 Dividends**

The holders of Common Shares shall be entitled to receive such dividends payable in cash or property of the Corporation as may be declared thereon by the board of directors from time to time. The board of directors may not declare any dividend payable in cash or property (other than a stock dividend payable in Common Shares) on the Common Shares unless the board of directors simultaneously declares a dividend payable in cash or property (other than a stock dividend payable in Common Shares or Proportionate Voting Shares) on the Proportionate Voting Shares in an amount per share equal to the amount of the dividend declared per Common Share, multiplied by one hundred (100), and each fraction of a Proportionate Voting Share will be entitled to the applicable fraction thereof.

The board of directors may declare a stock dividend payable in Common Shares on the Common Shares, but only if the board of directors simultaneously declare a stock dividend payable in:

(a) Proportionate Voting Shares on the Proportionate Voting Shares, in a number of shares per Proportionate Voting Share (or fraction thereof) equal to the number of shares declared per Common Share (or fraction thereof); or

(b) Common Shares on the Proportionate Voting Shares, in a number of shares per Proportionate Voting Share (or fraction thereof) equal to the number shares declared per Common Share, multiplied by one hundred (100).

**1.5 Liquidation Rights**

In the event of the liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary, or in the event of any other distribution of assets of the Corporation to its shareholders for the purposes of winding up its affairs, the holders of the Common Shares shall be entitled to participate *pari passu* with the holders of Proportionate Voting Shares on the basis that each Proportionate Voting Share will be entitled to the amount of such distribution per Common Share multiplied by one hundred (100), and each fraction of a Proportionate Voting Share will be entitled to the amount calculated by multiplying the fraction by the amount otherwise payable in respect of a whole Proportionate Voting Share.

**1.6 Subdivision or Consolidation**

The Common Shares shall not be consolidated or subdivided unless the Proportionate Voting Shares are simultaneously consolidated or subdivided utilizing the same divisor or multiplier.

**1.7 Voluntary Conversion of Common Shares** 

Common Shares shall be convertible at the option of the holder into such number of Proportionate Voting Shares as is determined by dividing the number of Common Shares being converted by one hundred (100) (the "**Common Share Conversion Right**").

Before any holder of Common Shares shall be entitled to voluntarily convert Common Shares into Proportionate Voting Shares in accordance with this subsection 1.7, the holder shall surrender the certificate or certificates representing the Common Shares to be converted at the head office of the Corporation, the office of any transfer agent of the Common Shares or such other location or way as instructed by the Corporation, deliver any other document, including any medallion signature guarantee, as may be required by the Corporation's transfer agent, if applicable, and shall give written notice to the Corporation at its head office of his, her or its election to convert such Common Shares and shall state therein the name or names in which the certificate or certificates representing the Proportionate Voting Shares are to be issued (a "**Common Shares Conversion Notice**"). Unless the board of directors determines otherwise, the Corporation shall (or shall cause its transfer agent to) as soon as practicable thereafter, issue to such holder or his, her or its nominee, a certificate or certificates or direct registration statement representing the number of Proportionate Voting Shares to which such holder is entitled upon conversion of such Common Shares and such conversion shall be deemed to have taken place immediately prior to the close of business on the day on which the certificate or certificates representing the Common Shares to be converted is surrendered and the Common Shares Conversion Notice is delivered, and the person or persons entitled to receive the Proportionate Voting Shares issuable upon such conversion shall be treated for all purposes as the holder or holders of record of such Proportionate Voting Shares as of such date. For avoidance of doubt, fractions of Proportionate Voting Shares may be issued in respect of any amount of Common Shares in respect of which the Common Share Conversion Right is exercised which is less than one hundred (100).

**1.8 Conversion of Common Share Upon an Offer** 

In the event that an offer is made to purchase Proportionate Voting Shares, and such offer is:

(a) required, pursuant to applicable securities legislation or the rules of any stock exchange on which the Proportionate Voting Shares and/or the Common Shares may then be listed (or would be if the offeree was located in Canada), to be made to all or substantially all of the holders of Proportionate Voting Shares in a province or territory of Canada to which the requirement applies (a "**Proportionate Voting Share Offer** "); and

(b) not made to the holders of Common Shares for consideration per Common Share equal to 0.01 of the consideration offered per Proportionate Voting Share and otherwise on identical terms, and with no condition attached other than the right not to take up and pay for shares tendered if no shares are purchased under the offer for Proportionate Voting Shares;

each Common Share shall become convertible at the option of the holder into Proportionate Voting Shares on the basis of one hundred (100) Common Shares for one (1) Proportionate Voting Share, at any time while the Proportionate Voting Share Offer is in effect until one day after the time prescribed by applicable securities legislation or stock exchange rules for the offeror to take up and pay for such shares as are to be acquired pursuant to the Proportionate Voting Share Offer. The Corporation shall provide notice to holders of Common Shares of a Proportionate Voting Share Offer which satisfies subsection (a) and (b). For avoidance of doubt, fractions of Proportionate Voting Shares may be issued in respect of any amount of Common Shares which are exercised under a Proportionate Voting Share Offer which is less than one hundred (100).

The conversion right with respect to a Proportionate Voting Share Offer may only be exercised for the purpose of depositing the Proportionate Voting Shares acquired upon conversion under such Proportionate Voting Share Offer, and for no other reason. If the conversion right is exercised, the Corporation shall procure that the transfer agent for the Proportionate Voting Shares shall deposit under such Proportionate Voting Share Offer, the Proportionate Voting Shares acquired upon conversion, on behalf of the holder.

**APPENDIX 2**

**TO AMENDMENT RESOLUTION**

**SPECIAL RIGHTS, PRIVILEGES, CONDITIONS AND RESTRICTIONS ATTACHED TO**

**PROPORTIONATE VOTING SHARES**

The Proportionate Voting Shares of the Corporation shall consist of an unlimited number of shares designated as "Proportionate Voting Shares". The specific rights, privileges, conditions and restrictions attaching to the Proportionate Voting Shares are as follows:

**1.1 Voting**

The holders of proportionate voting shares in the capital of the Corporation ("**Proportionate Voting Shares**") shall be entitled to receive notice of and to attend and vote at all meetings of shareholders of the Corporation except a meeting at which only the holders of another class or series of shares are entitled to vote. Each Proportionate Voting Share shall entitle the holder to one hundred (100) votes and each fraction of a Proportionate Voting Share shall entitle the holder to the number of votes calculated by multiplying the fraction by one hundred (100) and rounding the product down to the nearest whole number, at each such meeting.

**1.2 Equality**

Except as set out in these Articles, the Common Shares and the Proportionate Voting Share have the same rights and are equal in all respects and shall be treated by the Corporation as if they were shares of one class only.

In connection with any Change of Control Transaction requiring approval of the holders of Common Shares and Proportionate Voting Shares under the *Business Corporations Act* (Ontario), holders of Common Shares and Proportionate Voting Shares shall be treated equally and identically, on a per share basis (except in respect of the number of votes allotted to each share and the 100:1 economic rights of the Proportionate Voting Shares versus the Common Shares), unless different treatment of the shares of each such class is approved by a majority of the votes cast by the holders of the outstanding Proportionate Voting Shares or their proxyholders in respect of a resolution approving such Change of Control Transaction, voting separately as a class at a meeting of the holders of that class called and held for such purpose.

**1.3 Alteration to Rights of Proportionate Voting Shares**

So long as any Proportionate Voting Shares remain outstanding, the Corporation will not, without the consent of the holders of Proportionate Voting Shares expressed by separate special resolution alter or amend these Articles if the result of such alteration or amendment would:

(a) prejudice or interfere with any right or special right attached to the Proportionate Voting Shares; or

(b) affect the rights or special rights of the holders of Common Shares and Proportionate Voting Shares on a per share basis which differs from the basis of one (1) per share in the case of the Common Shares, and one hundred (100) per share in the case of the Proportionate Voting Shares.

At any meeting of holders of Proportionate Voting Shares called to consider such a separate special resolution, each Proportionate Voting Share shall entitle the holder to one (1) vote and each fraction of a Proportionate Voting Share will entitle the holder to the corresponding fraction of one (1) vote.

**1.4 Dividends**

The holders of Proportionate Voting Shares shall be entitled to receive such dividends payable in cash or property of the Corporation as may be declared by the board of directors from time to time. The board of directors may not declare any dividend payable in cash or property (other than a stock dividend payable in Common Shares or Proportionate Voting Shares) on the Proportionate Voting Shares unless the board of directors simultaneously declares a dividend payable in cash or property on the Common Shares (other than a stock dividend payable in Common Shares) in an amount equal to the amount of the dividend declared per Proportionate Voting Share divided by one hundred (100).

The board of directors may declare a stock dividend payable in Proportionate Voting Shares on the Proportionate Voting Shares or Common Shares on the Proportionate Voting Shares, but only if the board of directors simultaneously declares a stock dividend payable in:

(a) in the case of a stock dividend payable in Proportionate Voting Shares on the Proportionate Voting Shares (or fraction thereof), Common Shares on the Common Shares, in a number of shares per Common Share equal to the number of shares declared per Proportionate Voting Share (or fraction thereof); or

(b) in the case of a stock dividend payable in Common Shares on the Proportionate Voting Shares (or fraction thereof), Common Shares on the Common Shares, in a number of shares per Common Share equal to the number of shares declared per Proportionate Voting Share (or fraction thereof), divided by one hundred (100).

**1.5 Liquidation Rights**

In the event of the liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary, or in the event of any other distribution of assets of the Corporation to its shareholders for the purpose of winding up its affairs, the holders of the Proportionate Voting Shares shall be entitled to participate *pari passu* with the holders of Common Shares on the basis that each Proportionate Voting Share will be entitled to the amount of such distribution per Common Share multiplied by one hundred (100), and each fraction of a Proportionate Voting Share will be entitled to the amount calculated by multiplying the fraction by the amount payable per whole Proportionate Voting Share.

**1.6 Subdivision or Consolidation**

The Proportionate Voting Shares shall not be consolidated or subdivided unless the Common Shares are simultaneously consolidated or subdivided utilizing the same divisor or multiplier.

**1.7 Mandatory Conversion of Proportionate Voting Shares**

All issued and outstanding Proportionate Voting Shares will automatically, without any action on the part of the holder, be converted into Common Shares on the basis of one hundred (100) Common Shares for one (1) Proportionate Voting Share if the board of directors, in its sole discretion, determines that it is no longer in the best interests of the Corporation to retain Proportionate Voting Shares (the "**Mandatory Conversion**"). The Corporation will send, or cause its transfer agent to send, notice of the Mandatory Conversion to each holder of Proportionate Voting Shares (a "**Mandatory Conversion Notice**") specifying:

(a) that all issued and outstanding Proportionate Voting Shares will automatically be converted into Common Shares on the basis of one hundred (100) Common Share for one (1) Proportionate Voting Share; and

(b) the number of Common Shares into which the Proportionate Voting Shares held by such holder have been converted.

As soon as practicable after the sending of the Mandatory Conversion Notice, the Corporation shall issue or shall cause its transfer agent to issue to each holder of Proportionate Voting Shares certificates representing the number of Common Shares into which such holder's Proportionate Voting Shares have been converted.

**1.8 Voluntary Conversion of Proportionate Voting Shares** 

Each Proportionate Voting Share shall be convertible at the option of the holder into such number of Common Shares as is determined by multiplying the number of Proportionate Voting Shares being converted by one hundred (100). Fractions of Proportionate Voting Shares may be converted into such number of Common Shares as is determined by multiplying the fraction by one hundred (100) (the "**Proportionate Voting Share Conversion Right**").

Before any holder of Proportionate Voting Shares shall be entitled to voluntarily convert Proportionate Voting Shares into Common Shares in accordance with this subsection 1.7, the holder shall surrender the certificate or certificates representing the Proportionate Voting Shares to be converted at the head office of the Corporation, the office of any transfer agent of the Proportionate Voting Shares or such other location or way as instructed by the Corporation, deliver any other document, including any medallion signature guarantee, as may be required by the Corporation's transfer agent, if applicable, and shall give written notice to the Corporation at its head office of his, her or its election to convert such Proportionate Voting Shares and shall state therein the name or names in which the certificate or certificates representing the Common Shares are to be issued (a "**Proportionate Voting Shares Conversion Notice**"). The Corporation shall (or shall cause its transfer agent to) as soon as practicable thereafter, issue to such holder or his, her or its nominee, a certificate or certificates or direct registration statement representing the number of Common Shares to which such holder is entitled upon conversion and such conversion shall be deemed to have taken place immediately prior to the close of business on the day on which the certificate or certificates representing the Proportionate Voting Shares to be converted is surrendered and the Proportionate Voting Shares Conversion Notice is delivered, and the person or persons entitled to receive the Common Shares issuable upon such conversion shall be treated for all purposes as the holder or holders of record of such Common Shares as of such date. For avoidance of doubt, fractions of Proportionate Voting Shares may be converted into such number of Common Shares as is determined by multiplying the fraction by one hundred (100) under the Proportionate Voting Share Conversion Right.

**1.9 Conversion of Proportionate Voting Shares Upon an Offer to Acquire Common Shares**

In the event that an offer is made to purchase Common Shares, and such offer is:

(a) required, pursuant to applicable securities legislation or the rules of any stock exchange on which the Common Shares and/or Proportionate Voting Shares may then be listed (or would be if the offeree was located in Canada), to be made to all or substantially all of the holders of Common Shares in a province or territory of Canada to which the requirement applies (a "**Common Share Offer** "); and

(b) not made to the holders of Proportionate Voting Shares for consideration per Proportionate Voting Share equal to one hundred (100) times the consideration offered per Common Share and otherwise on identical terms, and with no condition attached other than the right not to take up and pay for shares tendered if no shares are purchased under the offer for Common Shares;

each Proportionate Voting Share shall become convertible at the option of the holder into Common Shares on the basis of one hundred (100) Common Shares for one (1) Proportionate Voting Share, at any time while the Common Share Offer is in effect until one day after the time prescribed by applicable securities legislation or stock exchange rules for the offeror to take up and pay for such shares as are to be acquired pursuant to the Common Share Offer. The Corporation shall provide notice to holders of Proportionate Voting Shares of the Common Share Offer which satisfies subsection (a) and (b). For avoidance of doubt, fractions of Proportionate Voting Shares may be converted with respect to the Common Share Offer into such number of Common Shares determined by multiplying the fraction by one hundred (100).

The conversion right with respect to the Common Share Offer may only be exercised for the purpose of depositing the Common Shares acquired upon conversion under such Common Share Offer, and for no other reason. If the conversion right is exercised, the Corporation shall procure that the transfer agent for the Common Shares shall deposit under such Common Share Offer, the Common Shares acquired upon conversion, on behalf of the holder**.**

**SCHEDULE "C"**

**CONSOLIDATION RESOLUTION**

**BE IT RESOLVED AS A SPECIAL RESOLUTION THAT**:

(1) the articles of GameSquare Esports Inc. (the "**Corporation**") be amended to change the number of issued and outstanding common shares of the Corporation ()"**Common Shares**") by consolidating the issued and outstanding Common Shares on the basis of one new Common Share for four (4) existing Common Shares (the "**Common Share Consolidation** "), and in the event that the Common Share Consolidation would otherwise result in a shareholder's holding a fraction of a Common Share, such shareholder shall not receive any whole new Common Shares or any cash consideration for each such fraction;

(2) any director or officer of the Corporation be and is hereby authorized, for and on behalf of the Corporation, to execute and deliver or cause to be delivered Articles of Amendment to the Director under the *Business Corporations Act* (Ontario) to reflect the effect of this special resolution;

(3) notwithstanding that this special resolution has been duly passed by the shareholders of the Corporation, the directors of the Corporation are hereby authorized in their sole discretion to revoke this special resolution in whole or in part at any time prior to its being given effect without further notice to, or approval of, the shareholders; and

(4) any one or more of the directors or officers of the Corporation is hereby authorized and directed, acting for, in the name of and on behalf of the Corporation, to execute or cause to be executed, under the seal of the Corporation or otherwise, and to deliver or cause to be delivered, such other documents and instruments, and to do or cause to be done all such other acts and things, as may in the opinion of such director or officer of the Corporation be necessary or desirable to carry out the intent of the foregoing resolution (including, without limitation, the execution and filing of articles of amendment and such other forms as required) such determination to be conclusively evidenced by the execution and delivery of such documents, or the doing of any such act or thing.

## Exhibit 99.6

**EXHIBIT 99.6**

**FORM 51-102F3**

**MATERIAL CHANGE REPORT**

**ITEM 1– NAME AND ADDRESS OF COMPANY**

GameSquare Esports Inc. (the "**Company**" or "**GameSquare**")

150 York Street, Suite 1008

Toronto, Ontario, M5H 3S5

**ITEM 2– DATE OF MATERIAL CHANGE**

December 7, 2022

**ITEM 3– NEWS RELEASE**

A news release with respect to the material change was disseminated by the Company on December 8, 2022 through ACCESSWIRE and can be found under the Company's profile on SEDAR at www.sedar.com.

**ITEM 4– SUMMARY OF MATERIAL CHANGE**

On December 7, 2022, the Company entered into an arrangement agreement (the "**Arrangement Agreement**") with Engine Gaming and Media, Inc. ("**Engine Gaming**") to combine their businesses via an all share deal, whereby each common share of GameSquare (a "**GameSquare Share**") will be exchanged for 0.08262 Engine Gaming common shares (the "**Engine Gaming Shares**") pursuant to a statutory plan of arrangement (the "**Plan of Arrangement**") under the *Business Corporations Act* (Ontario) (the "**Arrangement**").

**ITEM 5– FULL DESCRIPTION OF MATERIAL CHANGE**

**5.1 Full Description of Material Change**

On December 7, 2022, the Company and Engine Gaming entered into the Arrangement Agreement to combine their businesses via an all share deal. Subject to the terms and conditions set forth in the Arrangement Agreement and Plan of Arrangement, holders of the GameSquare Shares will receive 0.08262 Engine Gaming Shares, subject to adjustment as described below (the "**Exchange Ratio**"), for each GameSquare Share (on an as converted to GameSquare Share basis) outstanding immediately prior to the effective time of the Arrangement (the "**Effective Time**").

At the Effective Time, (i) each GameSquare option, to the extent it has not been exercised as at the Effective Time, will be transferred by the holder thereof to Engine Gaming for such number of replacement options issued by Engine Gaming under its omnibus incentive plan equal to the Exchange Ratio and the exercise price of such replacement option will be adjusted based on the Exchange Ratio; (ii) each GameSquare restricted share unit, to the extent it has not been exchanged for a GameSquare Share as at the Effective Time, will be transferred by the holder thereof to Engine Gaming for such number of replacement restricted share units issued by Engine Gaming under its omnibus incentive plan equal to the Exchange Ratio; and (iii) each GameSquare warrant, to the extent it has not been exercised as at the Effective Time, will be transferred by the holder thereof to Engine Gaming for a warrant issued by Engine Gaming to purchase such number of Engine Gaming Shares equal to the Exchange Ratio and the exercise price of such replacement warrant will be adjusted based on the Exchange Ratio. *Conditions to the Arrangement*

The Arrangement is subject to a number of conditions, including the approval by holders of GameSquare Shares (the "**GameSquare Shareholders**") at a special meeting expected to be held in the first quarter of 2023 to approve the Arrangement (the "**Meeting**"). The Arrangement requires the approval of GameSquare Shareholders holding at least 66.67% of the votes cast on the resolution approving the Arrangement by GameSquare Shareholders voting as a single class present in person or represented by proxy and entitled to vote at the Meeting, and if required by applicable law, approval by GameSquare Shareholders holding a simple majority of the votes attached to GameSquare Shares voting as a single class present in person or represented by proxy and entitled to vote at the Meeting, excluding the votes of those persons whose votes are required to be excluded under Multilateral Instrument 61-101 - *Protection of Minority Security Holders in Special Transactions*. It is a condition to closing in favor of Engine Gaming that holders of less than 5% of the outstanding GameSquare Shares shall have validly exercised dissent rights with respect to the Arrangement that have not been withdrawn as of the Effective Date.

In addition, the Arrangement is subject to (i) approval of the Ontario Superior Court of Justice (or any other court with appropriate jurisdiction) at a hearing upon the procedural and substantive fairness of the terms and conditions of the Arrangement, (ii) the TSX Venture Exchange, (iii) the Nasdaq Capital Market and (iv) certain regulatory approvals.

*Certain Other Terms of the Arrangement Agreement*

The Arrangement Agreement includes customary representations and warranties of GameSquare and Engine Gaming and each party has agreed to customary covenants, including, among others, covenants relating to the conduct of each party's business during the interim period between the date of the Arrangement Agreement and the Effective Time.

The board of directors of each of the Company and Engine Gaming have unanimously approved the Arrangement and recommend their respective shareholders vote in favor of the Arrangement. The board of directors of the Company received an opinion from Evans & Evans, Inc. that, based upon and subject to the assumptions, limitations, and qualification set forth in the opinion, the consideration to be received by shareholders of the Company pursuant to the Arrangement is fair, from a financial point of view to the shareholders of the Company.

**5.2 Disclosure for Restructuring Transactions**

Subject to the terms and conditions set forth in the Arrangement Agreement and Plan of Arrangement, holders of the GameSquare Shares will receive 0.08262 Engine Gaming Shares, subject to adjustment as described below, for each GameSquare Share (on an as converted to GameSquare Share basis) outstanding immediately prior to the Effective Time. All warrants, options and restricted share units of the Company will be exchanged for replacement warrants, stock options and restricted stock units of Engine Gaming on identical terms, as adjusted in accordance with the Exchange Ratio.

**ITEM 6– RELIANCE ON SUBSECTION 7.1(2) OF NATIONAL INSTRUMENT 51-102**

Not applicable.

**ITEM 7– OMITTED INFORMATION**

Not applicable.

**ITEM 8– EXECUTIVE OFFICER**

Further information regarding the matters described in this report may be obtained from Paolo DiPasquale, Chief Strategy Officer, who is knowledgeable about the details of the Arrangement and may be contacted at (216) 464-6400.

**ITEM 9– DATE OF REPORT**

December 19, 2022.

*This report contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this report, forward-looking statements relate, among other things, to the Arrangement, including the receipt of court, shareholder, stock exchange and regulatory approvals and the anticipated timing of the Meeting. These forward-looking statements are included only to provide information currently available to GameSquare and are not intended to serve as, and must not be relied on by any investor as, a guarantee, assurance or definitive statement of fact or probability. Forward-looking statements are necessarily based upon a number of estimates and assumptions. These assumptions, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: Engine Gaming and GameSquare's ability to complete the Arrangement and the receipt of necessary approvals. These risk factors are not intended to represent a complete list of the factors that could affect GameSquare, which are discussed in GameSquare's annual management's discussion and analysis. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this report. GameSquare assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.*