GameSquare Holdings, Inc.

ITEM 1. LEGAL PROCEEDINGS

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 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 Company’s consolidated balance sheets. This liability will be adjusted to fair value at the end of each reporting period.

SPAC Complaint – As previously disclosed, 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, Inc. 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 tentative terms resolving the matter, subject to approval from the Court of Chancery. On September 22, 2025, the Court of Chancery granted final approval of the Settlement Agreement, pursuant to which the Company and BRPM agreed to pay to Plaintiff a total of $3.25 million in cash, $2.15 million of which the Company had the option to in the form of shares of its Common Stock in lieu of cash. As of the date of this Report, the Company and BRPM have made the required settlement payment amounts in cash in full. As a result the litigation has been resolved.

Alta Partners v. FaZe Holdings, Inc. On April 23, 2025, Alta Partners, LLC (“Alta”) filed a complaint against FaZe Holdings, Inc. and GameSquare Holdings, Inc., in the United States District Court for the Southern District of New York, alleging that in 2022, FaZe Holdings breached a warrant agreement between FaZe Holdings and Alta. On August 11, 2025, the Company entered into a Settlement and Release Agreement with Alta Partners, LLC, pursuant to which the Company agreed to issue to Alta $150,000 of the Company’s restricted Common Stock (“Settlement Shares”). In the event that the collective value of the Settlement Shares drops below $150,000 on the six-month anniversary date following issuance of the Settlement Shares, or the next business day if the six-month anniversary date falls on a weekend or holiday (the collective value to be computed based on the Nasdaq closing price of the Company’s common stock on that six-month anniversary date, or the next business day if the six-month anniversary date falls on a weekend or holiday), then within three business days of that date, the Company shall pay the difference between the collective value and $150,000 to Alta in cash (the “True-Up Payment”). Upon the Company’s delivery of the Settlement Shares and True Up Payment, if applicable, the public warrants that are owned and/or beneficially held by Alta at that time shall be cancelled immediately and Alta shall have no ownership, right, claim, interest or benefit in such public warrants. Moreover, within three business days of Alta’s receipt of the Settlement Shares, Alta shall file the Stipulation of Voluntary Dismissal with Prejudice, dismissing all claims asserted in the action against the Company with prejudice.

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

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