Financial Analysis

20. Commitments and contingencies Contingencies Allinsports - A September 2021 decision issued by an arbitrator located in Alberta, Canada, directed the Company to issue 241,666 shares to Allinsports in connection with a dispute over whether certain closing conditions in the acquisition agreement for Allinsports had been met. The Company recognized a liability for the arbitration ruling of $ 1.5 million, which represented the fair value of the common shares directed to be delivered as of April 11, 2023. The liability is recorded as arbitration reserve on the Companys consolidated balance sheets. This liability will be adjusted to fair value at the end of each reporting period. SPAC Complaint In June 2024, a complaint was filed in Delaware Chancery Court by Nathan Carter (Plaintiff ), a purported stockholder of B. Riley Principal 150 Merger Corp. (BRPM), against several former directors of BRPM, Faze Holdings, Inc.s predecessor, and several other BRPM affiliated entities, challenging the disclosures made in connection with the July 2022 merger between BRPM and Faze Holdings. The Company is required to indemnify certain of the defendants due to its subsequent acquisition of FaZe Holdings. As previously reported, the Company, the Plaintiff and the defendants entered into a settlement agreement in February 2025 (the Settlement Agreement) pursuant to which the parties agreed to terms resolving the matter, which were later approved by the Court of Chancery. Under the Settlement Agr …

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13. Convertible debt Yorkville CD and SEPA On July 8, 2024, the Company entered into a Standby Equity Purchase Agreement (SEPA) with YA II PN, LTD, a Cayman Islands exempt limited partnership (Yorkville), pursuant to which the Company has the right to sell to Yorkville up to $ 20.0 million of its shares of common stock, par value $ 0.0001 per share, subject to certain limitations and conditions set forth in the SEPA. Each advance the Company requests in writing to Yorkville under the SEPA may be for a number of shares of common stock up to the greater of (i) 500,000 shares or (ii) such amount as is equal to 100% of the average daily volume traded of the common stock during the five trading days immediately prior to the date the Company requests each advance. The shares of common stock purchased pursuant to an advance delivered by the Company will be purchased at a price equal to 97% of the lowest daily VWAP of the shares of common stock during the three consecutive trading days commencing on the date of the delivery of the advance notice. The SEPA will automatically terminate on the earliest to occur of (i) the 36-month anniversary of the date of the SEPA or (ii) the date on which the Company shall have made full payment of advances pursuant to the SEPA. In connection with the execution of the SEPA, the Company paid a diligence fee in cash to Yorkville in the amount of $ 25,000 . Additionally, the Company agreed to pay a commitment fee of $ 200,000 to Yorkville, payable as fo …

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17. Share-based compensation The Company grants share purchase options (Options) for the purchase of common shares to its directors, officers, employees and consultants. Options may be exercisable over periods of up to 10 years as determined by the Board of Directors of the Company. The Option price for shares that are the subject of any Option shall be fixed by the Board when such Option is granted but shall not be less than the market value of such shares at the time of grant. The Omnibus Plan allows the Company to award restricted share units to directors, officers, employees and consultants of the Company and its subsidiaries upon such conditions as the Board may establish, including the attainment of performance goals recommended by the Companys compensation committee. The purchase price for common shares of the Company issuable under each RSU award, if any, shall be established by the Board at its discretion. Common shares issued pursuant to any RSU award may be made subject to vesting conditions based upon the satisfaction of service requirements, conditions, restrictions, time periods or performance goals established by the board. The maximum number of common shares available for issuance pursuant to the settlement of RSUs and Options shall be 20% of the issued and outstanding common shares as of January 1 each year, or 6.5 million common shares as of January 1, 2025. On January 1, 2026, the amount was 19.6 million, being 20% of the outstanding common shares on Januar …

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9. Goodwill and intangible assets (a) Goodwill The following table presents the changes in the carrying amount of goodwill: Schedule of goodwill Balance, December 31, 2023 $ 16,303,989 Acquisition of FaZe 7,147,428 Disposal of Frankly Media assets (3,315,139 ) Impairment of Stream Hatchet (4,945,299 ) Impairment of Sideqik (2,486,000 ) Balance, December 31, 2024 $ 12,704,979 Disposal of FaZe Media (7,147,428 ) Acquisition of Click 5,496,529 Impairment of Frankly (5,141,849 ) Balance, December 31, 2025 $ 5,912,230 Goodwill resulting from the acquisition of Click was allocated to the Agency reportable segment. In connection with the disposal of FaZe Media, Inc. on April 1, 2025 ( see Note 4), the Company disposed of goodwill of $ 7.1 million. In connection with the decision in the third quarter of 2025 to discontinue the operations of Frankly ( see Note 21), the remaining value of goodwill of Frankly was impaired. Goodwill impairment charges were $ 5.1 million and were recorded within net income (loss) from discontinued operations on the consolidated statements of operations and comprehensive loss. The Company concluded goodwill related to Stream Hatchet and Sideqik reporting units were impaired as of December 31, 2024. The Company recognized an impairment charge of $ 7.4 million for the year ended December 31, 2024. Goodwill as of December 31, 2025 consisted of $ 5.5 million within the Click reporting unit and $ 0.4 million within the Stream Hatchet reporting unit. The Company …

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14. Income tax The Company computes taxes using the asset and liability method in accordance with FASB ASC Topic 740, Income Taxes . Under the asset and liability method, the Company determines deferred income tax assets and liabilities based on the differences between the financial reporting and tax bases of assets and liabilities and measure them using currently enacted tax rates and laws. A valuation allowance is provided for deferred tax assets that, based on available evidence, are more likely than not to be realized. The Companys accounting for deferred taxes involves the evaluation of a number of factors concerning the realizability of its net deferred tax assets. The Company primarily considered such factors as its history of operating losses, the nature of the companys deferred tax assets, and the timing, likelihood and amount, if any, of future taxable income during the periods in which those temporary differences and carryforwards become deductible. As of December 31, 2025 and 2024, the Company does not believe that it is more likely than not that the deferred tax assets will be realized for the U.S. entities and the foreign entities; accordingly, a full valuation allowance has been established for the U.S. entities and the foreign entities, and no deferred tax asset is shown in the Companys balance sheet. For the year ended December 31, 2025, the valuation allowance for deferred tax assets decreased by $ 4.1 million due to NOL write off for inactive foreign entiti …

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11. Leases On June 30, 2021, the Company acquired Complexity. Complexity leased a building in Frisco, Texas. Upon the sale of Complexity ( see Note 4), the lease was assigned to GameSquare Esports (USA), Inc. and the Company entered into an agreement to sublease the building to Complexity for a 12-month period. The lease has an original lease period expiring in April 2029. The lease agreement does not contain any material residual value guarantees or material restrictive covenants. On April 1, 2024, GameSquare Holdings, Inc. leased a building in Culver City, CA, which it later assigned to Faze Media Inc. on May 15, 2024. The lease has an original lease period expiring in March 2027. The lease agreement does not contain any material residual value guarantees or material restrictive covenants. The Company disposed of Faze Media Inc. on April 1, 2025, including the lease right-of-use assets and lease liabilities ( see Note 4). The components of operating lease expense, recognized in general and administrative expenses on the consolidated statements of operations and comprehensive loss, are as follows: Schedule of components operating lease expense 2025 2024 Year ended December 31, 2025 2024 Operating lease expense 636,823 730,561 Variable lease expense 274,094 315,011 Total operating lease costs 910,917 1,045,572 As of December 31, 2025, the remaining lease-term and discount rate on the Frisco, TX lease was 3.3 years and 8.3 %, respectively. Maturities of the lease liability are …

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19. Related party transactions (a) Convertible debenture with a director of the Company as counterparty On September 1, 2022, Engine extended convertible debentures that were due to expire in October and November 2022 with an aggregate principal amount of $ 1.3 million. Key terms include (a) maturity date of August 31, 2025 , (b) interest rate of 7 % (interest to be paid in full at maturity) and (c) conversion price of $ 4.40 . The convertible debenture is beneficially held by Stu Porter, a director of the Company. The convertible debenture matured in the third quarter of 2025 ( see Note 13). (b) Promissory note with significant investor On March 25, 2025, the Company entered into a secured promissory note with Blue & Silver Ventures, Ltd. The principal amount of $ 2 million under the promissory note is payable on demand and no later than July 1, 2025. The promissory note bears interest at a rate of ten percent ( 10 %) per annum, with a default interest rate of fifteen percent ( 15 %) per annum, and is payable on demand and no later than July 1, 2025 with the principal amount. The Company, at its option, may prepay the promissory note, in whole or in part, without a prepayment penalty of any kind. In connection with the promissory note, the Company entered into a security agreement, by and between the Company and Blue & Silver Ventures, Ltd. to provide a security interest in the assets of the Company to Blue & Silver Ventures, Ltd. in order to secure the obligatio …

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22. Revenue and Segmented Information The CODM uses gross profit, as reviewed at periodic business review meetings, as the key measure of the operating segment results as it reflects the Companys underlying performance for the period under evaluation to determine resource allocation. As of December 31, 2025, the Company is organized into the four operating segments, which also represent its four reportable segments: Owned and Operated IP, Agency, SaaS and managed services and Yield. Revenue, cost of sales and gross profit for the Companys operating and reportable segments, disaggregated into geographic locations, are as follows: Schedule of disaggregated into geographic regions Segment United Kingdom USA Spain Australia Total Year ended December 31, 2025 Segment United Kingdom USA Spain Australia Total Revenue Owned and Operated IP $ - $ 12,779,530 $ - $ - $ 12,779,530 Agency 1,356,524 16,037,141 5,439,669 3,665,582 26,498,916 SaaS and managed services - 1,510,249 3,069,862 - 4,580,111 Yield - 1,140,745 - - 1,140,745 Total Revenue 1,356,524 31,467,665 8,509,531 3,665,582 44,999,302 Cost of sales Owned and Operated IP - 8,160,020 - - 8,160,020 Agency 987,233 9,146,455 3,625,804 2,713,931 16,473,423 SaaS and managed services - 455,187 395,095 - 850,282 Yield - - - - - Total Cost of sales 987,233 17,761,662 4,020,899 2,713,931 25,483,725 Gross profit Owned and Operated IP - 4,619,510 - - 4,619,510 Agency 369,291 6,890,686 1,813,865 951,651 10,025,493 SaaS and managed services - …

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2. Significant accounting policies (a) Basis of presentation The consolidated financial statements of the Company have been prepared in accordance with GAAP and the rules and regulations of the Securities and Exchange Commission (SEC) as of, and for the years ended, December 31, 2025 and 2024. (b) Principles of consolidation The consolidated financial statements include the accounts of the Company, all wholly owned and majority-owned subsidiaries in which the Company has a controlling voting interest and, when applicable, variable interest entities in which the Company has a controlling financial interest or is the primary beneficiary. Investments in affiliates where the Company does not exert a controlling financial interest are not consolidated. All significant intercompany transactions and balances have been eliminated upon consolidation. The Companys material subsidiaries as of December 31, 2025, are as follows: Schedule of material subsidiaries Name of Subsidiary Country of Incorporation Ownership Percentage Functional Currency Stream Hatchet S.L. Spain 100.00 % Euro Code Red Esports Ltd. United Kingdom 100.00 % UK Pound Click Management Pty Ltd Australia 100.00 % Australian Dollar GameSquare Esports (USA) Inc. (dba as Fourth Frame Studios) USA 100.00 % US Dollar GCN Inc. USA 100.00 % US Dollar Faze Clan Inc. USA 100.00 % US Dollar Swingman LLC (dba as Zoned) USA 100.00 % US Dollar Mission Supply LLC USA 100.00 % US Dollar SideQik, Inc. USA 100.00 % US Dollar Non-control …

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15. Shareholders equity (a) Description of the Companys securities The Company is authorized to issue 100,000,000 common shares, par value $ 0.0001 per share, and 50,000,000 preferred shares, par value $ 0.0001 per share. Holders of common shares are entitled to one vote in respect of each common share held at shareholder meetings of the Company. On July 23, 2025, the board of directors of the Company approved a Certificate of Designation of Series A-1 Convertible Preferred Stock of the Company (the Certificate of Designation) establishing the rights, preferences, powers, restrictions and limitations of the Companys newly authorized 3,433.33 shares of the Series A-1 preferred stock. The Certificate of Designation was filed with the Secretary of State of the State of Delaware on July 24, 2025, and became effective upon filing. The Series A-1 preferred stock ranks senior to all junior securities, including common stock, and carries a $ 1.50 per share liquidation preference on an as-converted basis. After satisfying this preference, each share of Series A-1 preferred stock will automatically convert into 1,000 shares of the common stock. The Series A-1 preferred stock has no voting rights and is equity classified. On August 1, 2025, the Board of Directors of the Company authorized a share repurchase program pursuant to which the Company may purchase shares of common stock, par value $ 0.0001 per share up to $ 5,000,000 worth of Common Stock. Under the repurchase program, GameSqu …

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24. Subsequent events The Company has evaluated subsequent events from the balance sheet date through April 8, 2026, the date at which the consolidated financial statements were available to be issued and determined there were no additional items to be disclosed other than those described below. Asset Purchase Agreement and Preferred Stock Issuance TubeBuddy On February 20, 2026, GameSquare Holdings, Inc., TubeBuddy, Inc., a Delaware corporation and indirect wholly-owned subsidiary of the Company (Buyer), Ben Group, Inc., a Nevada corporation (Ben Group), and TubeBuddy, LLC, a California limited liability company (TB LLC, and together with Ben Group, Seller), entered into an asset purchase agreement (the Asset Purchase Agreement), pursuant to which the Seller has agreed to sell to Buyer and Buyer has agreed to purchase from Seller substantially all the assets, and certain specified liabilities, of the Seller relating to software which utilizes search engine optimization, bulk processing, workflow, and other tools for social media and content creation (the Transaction). As consideration for the Transaction, the Company issued to Seller 5,000,000 shares of newly designated Series A-2 Convertible Preferred Stock of the Company, par value $ 0.0001 per share (the Series A-2 Preferred Stock). Pursuant to the Asset Purchase Agreement, the Company agreed to file a preliminary proxy statement with the Securities and Exchange Commission (the SEC) on or prior to April 30, 2026 and to ho …

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