GameSquare Holdings, Inc.

1. Corporate information and going concern

(a)Corporate information

GameSquare Holdings, Inc. (NASDAQ: GAME)(formerly Engine Gaming & Media, Inc.) (“GameSquare” or the “Company”) is a corporation existing under the laws of the State of Delaware as of March 7, 2024 (and was a corporation existing under the Business Corporations Act (Province of British Columbia) prior to March 7, 2024). The registered head office of the Company is 6775 Cowboys Way, Ste. 1335, Frisco, Texas, USA, 75034.

GameSquare is a vertically integrated, digital media, entertainment and technology company that connects global brands with gaming and youth culture audiences. GameSquare’s end-to-end platform includes Swingman LLC dba as Zoned, a gaming and lifestyle marketing agency, Code Red Esports Ltd. (“Code Red”), a UK based esports talent agency, Click Management Pty Ltd (“Click”), an Australia based gaming and esports talent agency, FaZe Holdings Inc. (“FaZe”), a lifestyle and media platform rooted in gaming and youth culture whose premium brand, talent network, and large audience can be monetized across a variety of products and services, GameSquare Esports, (USA), Inc. dba as Fourth Frame Studios, a creative production studio, Mission Supply, a merchandise and consumer products business, Stream Hatchet S.L. (“Stream Hatchet”), live streaming data and analytics platform, SideQik, Inc. (“Sideqik”) a social influencer marketing platform, Gaming Community Network (“GCN”), a digital media company focused on gaming and esports audiences, and TubeBuddy, Inc. (“TubeBuddy”), a powerful search engine optimization, workflow, analytics, and productivity tool company.

GameSquare completed the plan of arrangement (the “Arrangement”) with GameSquare Esports Inc. (“GSQ”) on April 11, 2023, resulting in the Company acquiring all the issued and outstanding securities of GSQ. At completion of the Arrangement Engine Gaming and Media, Inc. changed its name to GameSquare Holdings Inc.

GameSquare completed its Plan of Merger (the “Merger”) with FaZe Holdings, Inc. (“FaZe”) on March 7, 2024, resulting in the Company acquiring all the issued and outstanding securities of FaZe.

GameSquare completed its acquisition of Click, an Australian proprietary limited company (“Click”), on September 11, 2025, resulting in the Company acquiring all the issued and outstanding securities of Click.

GameSquare acquired TubeBuddy, Inc. (“TubeBuddy”) on February 20, 2026, a company with powerful search engine optimization, workflow, analytics, and productivity tools powered by proprietary AI, which are used by creators and digital publishers to grow, manage, and monetize their content.

(b)Going concern

These unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. Accordingly, they 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 liquidate 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. It is not possible to predict whether the Company will be able to raise adequate financing or ultimately attain profit levels of operations.

The Company has not yet realized profitable operations and has incurred significant losses to date resulting in an accumulated deficit of $190.6 million as of June 30, 2026 and of $162.3 million as of December 31, 2025. The recoverability of the carrying value of the assets and the Company’s continued existence is dependent upon the achievement of profitable operations, further appreciation of its ETH holdings or the ability of the Company to raise alternative financing, if necessary. While management has been historically successful in raising the necessary capital, it cannot provide assurance that it will be able to execute its business strategy or be successful in future financing activities. As of June 30, 2026, the Company had a working capital deficiency of $4.5 million and of $18.7 million as of December 31, 2025, which is comprised of current assets less current liabilities.

These conditions indicate the existence of a material uncertainty that raises substantial doubt about the Company’s ability to continue as a going concern and, therefore, the Company may be unable to realize its assets and discharge its liabilities in the normal course of business.

The Company does not have any current plans to raise additional funds, given the Company has a significant digital asset treasury, but given the uncertainty on price movement in its ETH holdings, it is possible its digital asset treasury would not be sufficient to fund operations and other management objectives over the next twelve months. If required, the Company can raise additional capital through equity or debt offerings. Further, the Company has substantial asset value in each of its wholly owned subsidiaries, which could be used as a source of capital if required. While management has been historically successful in raising the necessary capital, it cannot provide assurance that it will be able to execute its business strategy or be successful in future financing activities.

2. Significant accounting policies

(a)Basis of presentation

The accompanying unaudited condensed consolidated financial statements have been prepared following generally accepted accounting principles in the United States of America (“GAAP”) for interim financial reporting and the rules and regulations of the SEC for interim reporting. Accordingly, the unaudited condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for audited financial statements. The balance sheet as of December 31, 2025 was derived from the Company’s audited consolidated financial statements but does not include all disclosures required by GAAP for annual financial statements. In management’s opinion, the interim information contains all adjustments, which include normal recurring adjustments necessary for a fair statement of the results for the interim periods. The footnote disclosures related to the interim financial information contained herein are also unaudited. Such financial information should be read in conjunction with the consolidated financial statements and related notes thereto for the year ended December 31, 2025, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the SEC on April 8, 2026 (the “2025 Form 10-K”).

(b)Principles of consolidation

The unaudited condensed 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 Company’s material subsidiaries as of June 30, 2026, are as follows:

(c)Use of estimates

The preparation of unaudited condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements and the reported amount of revenue and expenses during the reporting period. Management evaluates these estimates and judgments on an ongoing basis and bases its estimates on historical experience, current and expected future conditions, third-party evaluations and various other assumptions that management believes are reasonable under the circumstances. Significant estimates have been used by management in conjunction with the following: (i) credit losses on promissory notes receivable; (ii) assumptions used in business combinations, primarily related to management forecasting of operating cash flows; and (iii) testing for impairment of long-lived assets and goodwill. Actual results may differ from the estimates and assumptions used in the consolidated financial statements.

(d)Concentration of credit risk

The Company places its cash, which may at times be in excess of Federal Deposit Insurance Corporation insurance limits, with high credit quality financial institutions and attempts to limit the amount of credit exposure with any one institution.

The Company had no customers whose revenue accounted for more than 10% of total revenue for the three and six months ended June 30, 2026 and 2025.

No customers individually accounted for more than 10% of the Company’s accounts receivable as of June 30, 2026 and December 31, 2025.

(e)Segment reporting

In accordance with the ASC 280,Segment Reporting, the Company’s Chief Operating Decision Maker (“CODM”) has been identified as the Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company.

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 Company’s underlying performance for the period under evaluation to determine resource allocation. As of June 30, 2026, the Company is organized into five operating segments, which represent three reportable segments: Owned and Operated IP, Agency and SaaS and managed services. Talent Agency and Marketing Agency operating segments are combined into Agency reportable segment. B2B SaaS and B2C SaaS operating segments are combined into SaaS and managed services reportable segment.

ASC 280 establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue.

(f)Revenue recognition

The following table provides a breakdown of the Company’s revenue streams from continuing operations for the three and six months ended June 30, 2026 and 2025:

(g)Redeemable convertible preferred stock – Mezzanine equity

The Company accounted for its Series A-2 redeemable convertible preferred stock in accordance with ASC 480, Distinguishing Liabilities from Equity, ASC 815, Derivatives and Hedging, and applicable SEC guidance, including ASC 480-10-S99.

The Company classifies redeemable convertible preferred stock as temporary equity (mezzanine equity) outside of permanent stockholders’ equity in the consolidated balance sheets because the shares contain redemption features that are not solely within the control of the Company. The redeemable convertible preferred stock is initially recorded at its issuance date fair value, net of issuance costs.

The Company evaluates the terms of the redeemable convertible preferred stock to determine whether any embedded features, including conversion options, redemption features, or other contingent settlement provisions, require bifurcation and separate accounting as derivative instruments pursuant to ASC 815.

Subsequent to initial recognition, the carrying value of the redeemable convertible preferred stock is adjusted for accretion to the redemption value when redemption becomes probable or, if applicable, using the effective interest method or by recognizing changes immediately as they occur pursuant to ASC 480-10-S99. Accretion is recorded as an adjustment to retained earnings, or in the absence of retained earnings, as an adjustment to additional paid-in capital and accumulated deficit.

Dividends on redeemable convertible preferred stock, whether declared or cumulative, are recorded in accordance with the terms of the applicable agreements and are reflected as adjustments in arriving at net income (loss) attributable to common stockholders in the calculation of earnings per share.

Upon conversion, redemption, extinguishment, or modification of the redeemable convertible preferred stock, the Company evaluates the transaction to determine the appropriate accounting treatment, including whether the transaction should be accounted for as an extinguishment, modification, or induced conversion in accordance with applicable U.S. GAAP.

The Company reassesses the classification of redeemable convertible preferred stock at each reporting date to determine whether changes in facts or circumstances impact the presentation or accounting treatment of the instrument.

As of June 18, 2026, the Series A-2 redeemable convertible preferred stock was automatically converted into common stock upon successful shareholder vote to expand the Company’s authorized common stock from 100 million to 500 million.

3. Recent accounting pronouncements

The Company reviewed all recently issued accounting standards updates and determined that there were no accounting pronouncements adopted during the period, or not yet adopted, that are expected to have a material impact on the Company’s financial statements or disclosures.

4. Acquisitions and divestitures

(a)Acquisition of 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, pursuant to which the Company acquired substantially all the assets, and certain specified liabilities, of the TubeBuddy relating to software which utilizes search engine optimization, bulk processing, workflow, and other tools for social media and content creation. As consideration for the transaction, the Company issued 5,000,000 shares of its newly designated Series A-2 Redeemable 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 hold a related meeting of stockholders for the purposes of obtaining the approval (the “Shareholder Approval”) of the holders of the Company’s capital stock to authorize a sufficient number of additional shares of common stock of the Company, par value $0.0001 per share, to allow for the conversion of the Series A-2 Preferred Stock into common stock in accordance with, and pursuant to the terms and conditions set forth in, the Certificate of Designation (as defined below). The Company agreed to hold a meeting of stockholders to seek the Shareholder Approval no later than 120 days after the closing of the transaction. The Company held a meeting on June 18, 2026 and obtained the Shareholder Approval before September 30, 2026 (the “Shareholder Approval Deadline”). The Series A-2 redeemable convertible preferred stock, including the embedded redemption feature and conversion feature, was accounted for as mezzanine (temporary) equity. Refer to Note 11 for further discussion on the accounting treatment of the Series A-2 redeemable convertible preferred stock.

As of June 18, 2026, the Series A-2 redeemable convertible preferred stock was automatically converted into 5 million shares of common stock upon successful shareholder vote to expand the Company’s authorized common stock from 100 million to 500 million. As such, the cash redemption feature is no longer applicable. As of June 18, 2026, the Company reclassified the Series A-2 Preferred Stock, at its carrying value of $1.8 million, to common equity (common par value and additional paid-in capital).

The asset purchase agreement also provides for deferred consideration upon the occurrence of certain events. Under the asset purchase agreement, in the event the volume weighted average per share price of the Series A-2 Preferred Stock on a one-to-one as-converted basis to Common Stock for the 30 trading days preceding the date that is 18 months after closing of the transaction is less than $0.70 per share, after accounting for changes in the Series A-2 Preferred Stock (on such as-converted basis) by way of stock split, stock dividend, combination, reclassification, or similar event, or through merger, consolidation, reorganization, recapitalization or business combination, Seller shall be entitled to additional cash consideration (the “Deferred Cash Consideration”). Such Deferred Cash Consideration shall be equal to(a) the product of (i) 5,000,000 multiplied by (ii) the absolute value of the dollar amount by which such calculation in the previous sentence is less than $0.70, minus (b) any proceeds received by Seller from the sale of the Series A-2 Preferred Stock prior to the date that is 18 months after closing (the “Deferred Cash Consideration Date”). However, no Deferred Cash Consideration shall be owed if, prior to the Deferred Cash Consideration Date and after the Series A-2 Preferred Stock are converted into shares of Common Stock (the “Converted Shares”), the (x) closing price of the Converted Shares is greater than $0.70 per share for ten consecutive trading days or 20 total trading days subsequent to the date such Converted Shares are no longer subject to any trading restrictions to the holder of such shares under Rule 144 of the Securities Act of 1933, as amended (the “Securities Act”), or (y) the Seller or its affiliates sells any of such shares prior to the Deferred Cash Consideration Date for aggregate gross proceeds in excess of $3,500,000. The Deferred Cash Consideration was accounted for as contingent purchase consideration. Refer to Note 11 for further discussion on the accounting treatment of the Deferred Cash Consideration.

Each share of Series A-2 Preferred Stock was issued with an initial liquidation value of $1.00 per share, subject to adjustments for stock splits, combinations and similar transactions. Upon the receipt of the Shareholder Approval, each share of Series A-2 Preferred Stock automatically converted into one share of common stock.

Each share of Series A-2 Preferred Stock is entitled to vote with the holders of the Common Stock, voting together as a single class, with respect to any matters presented to the stockholders of the Company. Each share of Series A-2 Preferred Stock is entitled to a number of votes equal to 3.86 shares of common stock, provided such number of votes shall not exceed 19.99% of the outstanding number of common stock. In connection with the transaction, Seller agreed to vote its shares of Series A-2 Preferred Stock in favor of authorizing an increase to the number of authorized common stock of the Company.

The Series A-2 Preferred Stock ranks senior to all junior securities, including common stock, and ranks on parity with the Company’s Series A-1 Preferred Stock. The Series A-2 Preferred Stock will participate equally in any dividends declared to holders of common stock.

Pro-forma results of operations

The following unaudited pro-forma condensed consolidated results of operations for the three and six months ended June 30, 2026 and 2025, have been prepared as if the acquisition had occurred on January 1 of each period presented. The below does not include any pro-forma adjustments other than adding in the actual results of TubeBuddy from January 1, 2026 to February 20, 2026 for the six month period ending June 30, 2026 and the three and six months ended June 30, 2025 for the 2025 periods.

Revenue and net income of TubeBuddy included in the condensed consolidated statements of operations and comprehensive loss for the six months ended June 30, 2026 amounted to $2.9 million and $0.9 million, respectively.

Revenue and net income of TubeBuddy included in the condensed consolidated statements of operations and comprehensive loss for the three months ended June 30, 2026 amounted to $1.9 million and $0.5 million, respectively.

The acquisition of TubeBuddy was accounted for using the acquisition method of accounting under ASC 805,Business Combinations, which requires that the Company recognize the identifiable assets acquired and the liabilities assumed at their fair values on the date of acquisition.

The following preliminary table summarizes the consideration for the acquisition:

The preliminary purchase price allocation is as follows:

Measurement period adjustments

Where provisional values are used in accounting for a business combination, they may be adjusted in subsequent periods, not to exceed twelve months. The primary areas that are subject to change relate to the fair value of the purchase consideration transferred and purchase price allocations related to the fair values of certain tangible assets, the valuation of intangible assets acquired, and residual goodwill. The Company expects to continue to obtain information to assist in determining the fair value of the net assets acquired during the measurement periods.

Goodwill

The difference between the estimated acquisition date fair value of the consideration transferred and the estimated values assigned to the assets acquired and liabilities assumed represents goodwill of $2.7 million.

The goodwill recorded represents the following:

Goodwill arising from the acquisition is expected to be deductible for tax purposes.

(b)Acquisition of Click

On September 10, 2025, GameSquare entered into an equity purchase agreement pursuant to which it acquired all of the outstanding equity interests in Click, an Australian proprietary limited company, subject to the terms and conditions in the Purchase Agreement. The acquisition of Click closed on September 11, 2025.

Under the terms of the Click Purchase Agreement, the Company paid a base purchase price of $4,500,000 subject to customary adjustments for cash, net working capital, indebtedness and transaction expenses. The sellers will also receive, subject to the terms and conditions described in the Click Purchase Agreement: (i) a deferred cash payment of $4,000,000 within sixty (60) days following December 31, 2025; and (ii) up to an aggregate of $3,000,000 in cash earn-out payments based onthe post-closing performance of the Click Group. Specifically, (a) up to $1,500,000 may be payable based on the Click Group’s EBITDA for the 12-month period beginning January 1, 2026, if Actual EBITDA for such period falls within specified target ranges set forth in the Purchase Agreement, and (b) up to an additional $1,500,000 may be payable based on the Click Group’s EBITDA for the 12-month period beginning January 1, 2027, if Actual EBITDA for such period falls within specified target ranges set forth in the Purchase Agreement.

Pro-forma results of operations

The following unaudited pro-forma condensed consolidated results of operations for the three and six months ended June 30, 2026 and 2025, have been prepared as if the acquisition had occurred on January 1 of the 2025 period. The below does not include any pro-forma adjustments other than adding in the actual results of Click for the three and six months ended June 30, 2025 for the 2025 period.

The acquisition of Click was accounted for using the acquisition method of accounting under ASC 805,Business Combinations, which requires that the Company recognize the identifiable assets acquired and the liabilities assumed at their fair values on the date of acquisition.

The following table summarizes the consideration for the acquisition:

The purchase price allocation is as follows:

Goodwill

The difference between the estimated acquisition date fair value of the consideration transferred and the estimated values assigned to the assets acquired and liabilities assumed represents goodwill of $5.5 million.

The goodwill recorded represents the following:

Goodwill arising from the acquisition is expected to be deductible for tax purposes.

(c)Disposal of FaZe Media

On April 1, 2025, the Company, through its wholly owned subsidiary FaZe Media Holdings, LLC, entered into an exchange agreement with Gigamoon, effective April 1, 2025 (the “Exchange Agreement”), pursuant to which the Company agreed to accelerate the conversion date under Gigamoon’s convertible debenture dated as of December 16, 2024, in the principal amount of $10 million. Pursuant to the terms of the Exchange Agreement, FaZe Media Holdings, LLC transferred to Gigamoon 5,725,000 shares of Series A-1 Preferred Stock of FaZe Media, Inc. In addition, GameSquare issued 87,946 shares of its common stock to Gigamoon as payment of accrued interest on the convertible debenture through the conversion date.

As a result of the Exchange Agreement, FaZe Media met the requirements to be reported as discontinued operations (see Note 20). The Company recognized a gain of $3.0 million in net income (loss) from discontinued operations in the condensed consolidated statements of operations and comprehensive loss after offsetting the consideration received, conversion of $10 million Gigamoon convertible debenture discussed above (see Note 10), with the carrying value of the disposed assets and liabilities. The fair value of consideration received was concluded to be $10 million, the principal value of convertible debt being converted by Gigamoon. FaZe Media assets and liabilities disposed had a net carrying value of $7.0 million and consist of $0.6 million of cash, $2.9 million of accounts receivable, $0.2 million of prepaid expenses and other current assets, $1.6 million of amounts due from GameSquare, $0.1 million of property and equipment, $0.7 million of right-of-use assets, $9.6 million of intangible assets and $7.1 million of goodwill, partially offset by $0.2 million of accounts payable, $1.7 million of accrued liabilities, $0.5 million of deferred revenue, $0.7 million of lease liabilities and $12.9 million in non-controlling interests in FaZe Media.

5. Digital assets

The Company holds Ethereum (“ETH”), Animecoin (“ANIME”), and REKT, all of which are within the scope of ASC 350-60.

The following table presents a roll forward of digital assets held directly by the Company:

Unrealized and realized gains (losses) on digital assets are included in realized and change in unrealized gain (loss) on digital assets and investment in ETH fund in the condensed consolidated statements of operations and comprehensive loss.

Digital asset holdings as of June 30, 2026, were as follows:

In August and September 2025, the Company received 171.9 million ANIME tokens as non-cash consideration under an agency services agreement. An additional 222.0 million ($1.5 million cost basis) ANIME tokens were purchased in the open market as partial fulfillment required under the contract. Both tranches were subject to a six-month holding restriction beginning August 12, 2025. In accordance with ASC 820, no adjustment to fair value is made for this holder-specific restriction.

In August 2025, the Company received 2,305,905 million REKT tokens as non-cash consideration under an agency services agreement. The tokens are subject to a lockup as follows: Two-twelfths (2/12) will not have any restriction, the remaining ten-twelfths (10/12) will be subject to lock up, provided that on each monthly anniversary of the effective date the lock up will expire on one-tenth (1/10) of the initial total number of locked tokens such that on the tenth monthly anniversary of the effective date, the lock up shall have expired with respect to all of the tokens. Effective date for lockup start is August 28, 2025. In accordance with ASC 820, no adjustment to fair value is made for this holder-specific restriction.

6. Investment in ETH fund

The Company holds an investment in Dialectic Ellipse Feeder Fund LP (“Dialectic”), which is within the scope of ASC 321.

The following table presents a roll forward of Investment in ETH fund held directly by the Company:

Upon redemption of amounts from investment in ETH fund, a realized gain (loss) is recognized as limited partner units within the fund are being sold. The realized loss does not represent a cash loss as the Company is redeeming its ETH equity position within the fund for ETH.

Investment in ETH fund as of June 30, 2026, was as follows:

The Company contributed an aggregate of 15,630 ETH, with a fair value of $55.3 million at the contribution dates in the third quarter of 2025, to the Dialectic Moonphase Feeder Fund LP, and subsequently on October 1, 2025 transferred its holdings into Dialectic Ellipse Feeder Fund LP in exchange for limited partnership units of Dialectic. The Company may redeem its interest with 30 days’ notice, subject to standard fund provisions. Dialectic is a Cayman Islands limited partnership focused on decentralized finance (“DeFi”) yield strategies.

The investment in Dialectic is subject to the provisions of ASC 321 and, because the investment in Dialectic does not have a readily determinable fair value, the Company elected to use the NAV practical expedient and, therefore, the investment is not included in the fair value hierarchy.

The investment generated yield during the three and six months ended June 30, 2026 of $(121) thousand and $(154) thousand, respectively, which is included in yield on digital assets in the condensed consolidated statements of operations and comprehensive loss. Further, realized and change in unrealized losses on changes in market value of ETH of $0.7 million and $(11.7) million were recognized during the three and six months ended June 30, 2026, respectively, and are included in realized and change in unrealized gain (loss) on digital assets and investment in ETH fund in the condensed consolidated statements of operations and comprehensive loss.

7. Goodwill and intangible assets

(a)Goodwill

The following table presents the changes in the carrying amount of goodwill:

Goodwill resulting from the acquisition of Click was allocated to the Agency reportable segment. Goodwill resulting from the acquisition of TubeBuddy was allocated to the SaaS and managed services 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 20), 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 condensed consolidated statements of operations and comprehensive loss.

Goodwill as of June 30, 2026 consisted of $5.5 million within the Click reporting unit, $2.7 million within the TubeBuddy reporting unit and $0.4 million within the Stream Hatchet reporting unit. The Company has set an annual goodwill impairment test date for the Click reporting unit of June 30, which aligns with its local financial reporting year end.

Effective April 1, 2026, the Company reorganized its internal reporting structure by transferring management oversight and operational control of its Influencer Marketing ("IM") line of business from Stream Hatchet to the Click. IM was originally established organically in March 2025 within Stream Hatchet.

Following this operational transfer, discrete financial information is available and regularly reviewed by segment management for both legacy Click operations and IM, establishing each as a component within the Click operating segment pursuant to ASC 350-20, Goodwill. In accordance with ASC 350-20-35-35, components within the same operating segment are aggregated and deemed a single reporting unit if they share similar economic characteristics.

Management evaluated the nature of services, target customer profiles, technology and delivery mechanisms, and long-term financial margin profiles of legacy Click and IM, and concluded that the components exhibit similar economic characteristics. Consequently, legacy Click and IM are aggregated and evaluated as a single reporting unit ("Click Reporting Unit") for goodwill impairment testing purposes.

Because IM was developed organically as a standalone operational unit with $0 initial allocated goodwill, the reorganization had no impact on the historical carrying amount of goodwill recorded within the Click reporting unit ($5.5 million) or the Stream Hatchet reporting unit ($0.4 million). No goodwill reallocation was required or recorded in connection with this internal reorganization.

The Company completed its annual goodwill impairment test for the Click reporting unit as of June 30, 2026 using a quantitative assessment. Based on the evaluation, the fair value of the Click reporting unit exceeded its carrying value, and no goodwill impairment loss was recognized. Additionally, no events or changes in circumstances occurred during the period to indicate that the carrying value of goodwill for the TubeBuddy or Stream Hatchet reporting units may not be recoverable.

(b)Intangible assets, definite lived

Intangible assets, definite-lived consist of the following:

The Company recognized amortization expense for definite-lived intangible assets of $1.0 million and $0.7 million for the six months ended June 30, 2026 and 2025, respectively.

Amortization expense for definite-lived intangible assets is expected to be as follows over the next five years, and thereafter:

On February 20, 2026, the Company acquired TubeBuddy (see Note 4) and recognized the following intangible assets: a) Customer relationships of $1.6 million; b) Brand name of $0.7 million; and c) Software of $1.0 million.

In connection with the disposal of FaZe Media, Inc. on April 1, 2025 (see Note 4), the Company disposed of intangible assets with carrying value of $9.6 million as follows: a) Customer relationships with an original cost of $2.7 million and accumulated amortization of $0.2 million; b) Brand name with an original cost of $7.2 million and accumulated amortization of $0.4 million; and c) Talent network with an original cost of $0.7 million and accumulated amortization of $0.4 million.

On September 11, 2025, the Company acquired Click (see Note 4) and recognized the following intangible assets: a) Customer relationships of $0.6 million; b) Brand name of $0.7 million; and c) Talent network of $3.2 million.

In connection with the decision in the third quarter of 2025 to discontinue the operations of Frankly (see Note 20), the remaining carrying value of intangible assets of Frankly were impaired. Intangible assets impairment charges were $3.4 million and were recorded within net income (loss) from discontinued operations on the condensed consolidated statements of operations and comprehensive loss.

During the fourth quarter of 2025, FaZe Esports recognized an impairment expense of $0.3 million on its talent network intangible assets, due to the departure of a player in 2025 that was acquired earlier in 2025 for $0.3 million.

(c)Intangible assets, indefinite lived

On July 24, 2025, the Company entered into a subscription agreement, pursuant to which the subscriber purchased from the Company 3,433.33 shares of Series A-1 Convertible Preferred Stock of the Company, par value $0.0001 per share (see Note 12), in consideration for Crypto Punk 5577 NFT, which was deemed to have a fair market value of $3.9 million.

Regarding thenon-fungible token (“NFT”), CryptoPunks launched as a fixed set of 10,000 items in mid-2017. Rare and highly sought-after “Cowboy Ape” CryptoPunk NFT from Robert Leshner, founder of the DeFi protocol Compound and CEO of Superstate. Valued for its rarity and historical significance as one of only 24 Ape CryptoPunks in existence, the Cowboy Ape is widely regarded as the most desirable CryptoPunks of the 10,000-piece collection and NFTs in general.

In addition to the acquisition of the Cowboy Ape NFT, the Company acquired an additional seven CryptoPunks using ETH valued at $1.8 million at the time of purchase.

Digital assets outside the scope of ASC 350-60, such as NFTs, are accounted for as indefinite-lived intangible assets under ASC 350-30.

In the first quarter of 2026, the Company sold all eight of its CryptoPunk assets for total consideration of $1.9 million. As a result, during the fourth quarter of 2025, the Company recognized impairment expense of $3.7 million on the consolidated statements of operations and comprehensive loss.

8. Leases

On June 30, 2021, the Company acquired Complexity. Complexity leased a building in Frisco, Texas. Upon the sale of Complexity on March 1, 2024, 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 condensed consolidated statements of operations and comprehensive loss, are as follows:

As of June 30, 2026, the remaining lease-term and discount rate on the Frisco, TX lease was 2.8 years and 8.3%, respectively.

Maturities of the lease liability are as follows:

9. Line of credit and promissory notes payable

Line of credit

On September 14, 2023, the Company entered into an accounts receivable financing and security agreement with a maximum availability of $10.0 million for a three-year term with SLR Digital Finance, LLC (the “LOC”). The LOC matures on September 14, 2026. Interest accrues on the outstanding principal amount of the LOC at a rate equal to the greater of Prime plus 4.00% or 9.50%, per annum. The terms of the LOC provide for the lender to fund 85% of the purchased accounts receivable and it includes various service fees.

During the third quarter of 2025, in connection with the discontinued operations of Frankly, which was the primary borrower under the line of credit, the Company paid down the balance under the LOC. As of December 31, 2025, the outstanding principal, and unpaid accrued interest, on the LOC was $0. During the six months ended June 30, 2026 and 2025, the Company recognized interest expense of $0 and $0.3 million on the LOC.

Promissory notes payable

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 obligations underlying the promissory note.

In July 2025, the Company paid $2.1 million, principal and accrued interest, to pay the promissory note in full.

ETH backed short-term promissory notes

The Company entered into short-term promissory note arrangements with third-party lenders that are collateralized by the Company’s holdings of ETH. The borrowings are evidenced by promissory notes with a contractual term of 60 days and bear interest at a stated rate of 8.5% to 9.5% per annum. The two notes have maturity dates of August 16, 2026 and September 30, 2026. Both notes automatically extend to a successive 60-day term, unless written notice is provided by either party prior to the maturity date. The Company intends to further extend the maturity dates of both notes until ETH price recovers to values closer to its original cost basis on purchases made in the third quarter of 2025.

Under the terms of the agreements, the Company pledges ETH as collateral to secure repayment of the notes. The arrangements require the Company to maintain specified loan-to-value (“LTV”) ratios based on the market value of ETH relative to the outstanding principal balance of the borrowings. The applicable collateralization thresholds are as follows: a) Initial borrowing ratio of 150% - At inception, the Company must pledge ETH with a market value equal to at least 150% of the principal amount borrowed; b) Margin call ratio of 130% - if the collateral value declines such that the collateral coverage falls below 130% of the outstanding loan balance, the lender will issue a margin call requiring the Company to pledge additional ETH or repay a portion of the borrowing; c) Liquidation ratio of 120% - if the collateral coverage falls below 120% and the Company does not cure the deficiency within 24 hours, the lender may liquidate pledged ETH to satisfy the outstanding obligation; and d) capital return ratio of 170% - if the collateral coverage exceeds 170%, the Company may request the return of excess pledged ETH, subject to lender approval and continued compliance with minimum collateralization requirements.

The Company continues to recognize the pledged ETH on its balance sheet, as the collateral arrangement does not constitute a transfer of control. The ETH collateral is subject to restrictions while pledged and cannot be freely transferred until the related borrowings are repaid or the lender releases the collateral.

Interest expense under ETH backed short-term promissory notes for the six months ended June 30, 2026 was $0.4 million. Interest expense related to the promissory notes is recognized in interest expense, net in the condensed consolidated statements of operations and comprehensive loss using the contractual interest rate over the term of the borrowings.

The fair value of ETH collateral is subject to significant market volatility. Declines in the market price of ETH could result in margin calls requiring the Company to post additional collateral or repay a portion of the outstanding borrowings. If the Company were unable to meet such requirements, the lender may liquidate pledged ETH to satisfy the Company’s obligations under the promissory notes.

As of June 30, 2026, the Company had $12.1 million of outstanding borrowings under ETH-backed promissory notes, which were collateralized by 11,319.65 ETH with a fair value of $17.8 million, resulting in a collateral coverage ratio of approximately 147%.

10. 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.

On January 22, 2025, Yorkville converted $3.7 million of its then outstanding $4.1 million convertible debt balance for 5,032,233 common shares of the Company. The Company terminated the remaining outstanding balance on the Yorkville CD of $0.4 million and the SEPA with Yorkville Advisors Global L.P. (“Yorkville”). Under the strategic transaction, GameSquare issued a zero-coupon, 60-day promissory note to Yorkville associated with remaining unconverted principal of $0.4 million and a prepayment penalty of $0.4 million. The prepayment penalty was recorded within other operating expenses on the condensed consolidated statements of operations and comprehensive loss. In July 2025, the Company paid the balance due under the promissory note.

Gigamoon CD

On November 13, 2024, the Company and Gigamoon entered into a senior secured convertible promissory note in the principal amount of $10 million (the “Gigamoon CD”). On December 15, 2024, the Company received cash of $10 million from Gigamoon for issuance of the Gigamoon CD.

On April 2, 2025, GameSquare and Gigamoon entered into an exchange agreement, effective April 1, 2025, pursuant to which, the parties agreed to accelerate the exercise date under the Gigamoon CD to April 1, 2025. As a result, on April 1, 2025, GameSquare transferred the 5,725,000 shares of Series A-1 Preferred Stock of FaZe Media Inc. to Gigamoon (See Note 4).

Interest expense on the Gigamoon CD for the six months ended June 30, 2026 and 2025, amounted to $0 and $0.2 million, respectively, and is recorded within interest expense, net on the condensed consolidated statements of operations and comprehensive loss.

Three Curve CD

On September 1, 2022, Engine extended convertible debentures that were due to mature in October and November 2022 with an aggregate principal amount of $1.3 million. Key terms include (a) a maturity date of August 31, 2025, (b) an interest rate of 7% per annum (interest to be paid in full at maturity) and (c) a conversion price of $4.40 per share.

The Three Curve CD matured on August 31, 2025, and the balance was paid in full.

Interest expense on the Three Curve CD for the six months ended June 30, 2026 and 2025, amounted to $0 and $43 thousand, respectively, and is recorded within interest expense, net on the condensed consolidated statements of operations and comprehensive loss.

11. Series A-2 Redeemable Convertible Preferred Stock and Contingent Purchase Consideration

Acquisition of TubeBuddy

On February 20, 2026, in connection with the Company’s acquisition of substantially all of the assets of TubeBuddy, the Company issued 5,000,000 shares of newly designated Series A-2 Convertible Preferred Stock, par value $0.0001 per share (the “Series A-2 Preferred Stock”), pursuant to a Certificate of Designation filed with the Secretary of State of Delaware on February 20, 2026. The shares were issued to the Seller in a private transaction exempt from the registration requirements of the Securities Act of 1933, as amended, in reliance on the exemptions afforded by Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated thereunder. The shares are not registered and are subject to transfer restrictions under applicable securities laws and Rule 144.

The Series A-2 Preferred Stock has the following material rights, preferences, and contingent settlement provisions:

In connection with the issuance of the Series A-2 Preferred Stock, the Company also entered into a contingent cash payment arrangement (the “Deferred Cash Consideration”) under Section 2.06(a) of the asset purchase agreement. If the volume-weighted average price of the Series A-2 Preferred Stock (on an as-converted basis to common stock) for the thirty trading days preceding August 20, 2027 (the “Deferred Cash Consideration Date”) is less than $0.70 per share, the Seller is entitled to additional cash consideration equal to (i) 5,000,000 multiplied by (ii) the absolute value of the dollar amount by which such price is less than $0.70, less any proceeds received by the Seller from the sale of the Series A-2 Preferred Stock or the underlying common stock prior to the Deferred Cash Consideration Date. The Deferred Cash Consideration is not payable if the Failure Payment becomes payable. The Deferred Cash Consideration is capped at $0.70 per share aggregate, reduced by any sale proceeds received by the Seller before the Deferred Cash Consideration Date.

The Series A-2 Preferred Stock was classified as temporary (mezzanine) equity in accordance with ASC 480-10-S99-3A because the Cash Redemption is triggered by failure of a stockholder vote — an event not solely within the Company’s control. The Company evaluated the embedded Automatic Conversion and Cash Redemption features under ASC 815-15 and concluded that bifurcation is not required. The Deferred Cash Consideration is contingent purchase consideration in the business combination and is recognized at fair value, with changes in fair value recognized in earnings.

The total fair value of the instruments issued in connection with the TubeBuddy Acquisition was $3.2 million at the closing date, determined using a Monte Carlo simulation. Of this amount, $1.5 million was allocated to the contingent purchase consideration and the residual $1.8 million was allocated to the Series A-2 Preferred Stock in mezzanine equity.

The Series A-2 Preferred Stock is not remeasured to fair value. The carrying amount is accreted toward the redemption value (the $3,500,000 Failure Payment plus accrued interest) using the effective interest method if and when redemption becomes probable. As of June 18, 2026, the Series A-2 redeemable convertible preferred stock was automatically converted into 5 million shares of common stock upon successful shareholder vote to expand the Company’s authorized common stock from 100 million to 500 million. As such, the cash redemption feature is no longer applicable. As of June 18, 2026, the Company reclassified the Series A-2 Preferred Stock, at its carrying value of $1.8 million, to common equity (common par value and additional paid-in capital).

The contingent purchase consideration is remeasured to fair value at each reporting date, with changes in fair value recognized in earnings. For the six months ended June 30, 2026, the change in fair value of the contingent purchase consideration was a loss of $90 thousand and is included in other operating expenses on the condensed consolidated statements of operations and comprehensive loss. The fair value of the contingent purchase consideration was $1.6 million as of June 30, 2026.

The fair value of the contingent purchase consideration is determined using a Monte Carlo simulation that produces probability-weighted scenario outcomes. Significant unobservable inputs to the valuation are summarized below:

Acquisition of Click – contingent purchase consideration

Under the terms of the Click Purchase Agreement, the Company agreed to pay up to an aggregate of $3 million in cash earn-out payments based onthe post-closing performance of the Click Group. Specifically, (a) up to $1,500,000 may be payable based on the Click Group’s EBITDA for the 12-month period beginning January 1, 2026, if actual EBITDA for such period falls within specified target ranges set forth in the purchase agreement, and (b) up to an additional $1,500,000 may be payable based on the Click Group’s EBITDA for the 12-month period beginning January 1, 2027, if Actual EBITDA for such period falls within specified target ranges set forth in the purchase agreement.

The contingent purchase consideration is remeasured to fair value at each reporting date, with changes in fair value recognized in earnings. For the six months ended June 30, 2026, the change in fair value of the contingent purchase consideration was a loss of $1.35 million and is included in other operating expenses on the condensed consolidated statements of operations and comprehensive loss. The fair value of the contingent purchase consideration was $2.1 million as of June 30, 2026, of which $1.4 million was current and $0.7 million was long-term.

12. Shareholders’ Equity

(a)Description of the Company’s securities

The Company is authorized to issue 500,000,000 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 Company’s 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 ranked senior to all junior securities, including common stock, and carried a $1.50 per share liquidation preference on an as-converted basis. After satisfying this preference, each share of Series A-1 preferred stock would automatically convert into 1,000 shares of the common stock. The Series A-1 preferred stock has no voting rights and is equity classified.

As of June 18, 2026, the Series A-1 preferred stock was automatically converted into 3,433,000 shares of common stock upon successful shareholder vote to expand the Company’s authorized common stock from 100 million to 500 million.

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. On April 14, 2026, the Board of Directors authorized an increase in its stock repurchase program from $5 million to $15 million. Under the repurchase program, GameSquare may purchase shares of its Common Stock on a discretionary basis from time to time through open market repurchases, in privately negotiated transactions, or other means, including through Rule 10b5-1 trading plans. The timing and actual number of shares repurchased will be determined by management depending on a variety of factors, including, among other factors, stock price, trading volume, market conditions and other general business considerations. The repurchase program has no expiration date and may be modified, suspended, or terminated at any time. Repurchases under this program will be funded from the Company’s surplus cash and cash equivalents or future cash flow generated by its Ethereum yield strategy. As of June 30, 2026, the Company had repurchased 7,844,590 common shares at a total cost of $3.8 million under this program. Subsequent to June 30, 2026, the Company acquired an additional 1,042,665 common shares at a total cost of $0.4 million. Following these transactions, the Company has $10.8 million remaining under its current authorization.

(b)Activity for the periods presented – common shares

As of June 18, 2026, the Company issued 3,433,000 common shares and 5,000,000 common shares in connection with the conversion of its Series A-1 preferred stock and Series A-2 preferred stock, respectively. As of June 18, 2026, both series of preferred stock were automatically converted into common stock upon successful shareholder vote to expand the Company’s authorized common stock from 100 million to 500 million. As of June 18, 2026, the carrying value of the Series A-1 preferred stock of $3.9 million was reclassified out of preferred stock and into common stock. Further, the carrying value of the Series A-2 preferred stock of $1.8 million was reclassified out of preferred stock within mezzanine equity to common stock.

During the six months ended June 30, 2026, the Company issued a total of 468,175 shares of common stock for payment of accounts payable obligations. FaZe Media was issued 226,508 common shares for payment of FaZe tradename license fees for the period covering January 1, 2025 to December 31, 2025. Fees are computed as 2.5% of total revenue generated by FaZe Esports. As a result of the difference between the fair value of the common shares issued of $135 thousand and the carrying value of the obligation of $312 thousand, the Company recorded a gain on settlement of $178 thousand, included in other income (expense), net on the condensed consolidated statements of operations and comprehensive loss. The remaining 241,667 shares of common stock were issued to AIS for final payment of the arbitration reserve.

During the six months ended June 30, 2026, the Company had repurchased an additional 4,852,073 common shares at a total cost of $2.0 million under its share repurchase program. Additionally, the Company cancelled 5,395,860 of its common shares in treasury, resulting in a reduction to treasury stock at cost and a reduction of additional paid-in capital of $2.4 million. As of June 30, 2026, the Company held 495,000 common shares as treasury stock.

During the six months ended June 30, 2026, the Company issued 799,324 common shares from the exercise of Restricted Share Units (“RSUs”) under its equity incentive plan (see Note 14).

On January 22, 2025, Yorkville converted $3.7 million of its then outstanding $4.1 million convertible debt balance (see Note 10). Yorkville was issued 5,032,233 common shares for conversion of $3.7 million principal ($4.0 million fair value), with the remaining $411 thousand refinanced into the promissory note with Yorkville.

On March 10, 2025, the Company issued 1,094,891 common shares to pay an outstanding settlement due to the former CEO of FaZe Clan for $1.5 million.

On April 1, 2025, the Company issued 87,946 common shares to Gigamoon as payment of accrued interest on the Gigamoon CD through the conversion date (see Note 4).

On June 6, 2025, the Company issued 210,403 common shares to FaZe Media for payment of FaZe tradename license fees for the period covering May 15, 2024 to December 31, 2024. Fees are computed as 2.5% of total revenue generated by FaZe Esports.

During the six months ended June 30, 2025, the Company issued 62,500 common shares from the exercise of Restricted Share Units (“RSUs”) under its equity incentive plan (see Note 14).

13. Net loss per share

As the Company incurred a net loss for the three and six months ended June 30, 2026 and 2025, the inclusion of certain options, RSUs, warrants, and contingent shares in the calculation of diluted earnings per share would be anti-dilutive and, accordingly, were excluded from the diluted loss per share calculation.

The following table summarizes potential common shares that were excluded as their effect is anti-dilutive:

14. 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 Company’s 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 January 1, 2026.

(a)Options

The following is a summary of Options outstanding as of June 30, 2026 and December 31, 2025, and changes during the six months then ended, by Option exercise currency:

Share-based compensation expense related to the vesting of options was $30 thousand and $4 thousand for the six months ended June 30, 2026 and 2025, respectively, and $30 thousand and $2 thousand for the three months ended June 30, 2026 and 2025, respectively, and is included in general and administrative expense on the condensed consolidated statements of operations and comprehensive loss.

(b)RSUs

The following is a summary of RSUs outstanding on June 30, 2026, and December 31, 2025, and changes during the six months then ended:

The grant-date fair values of RSUs are based on the Company’s stock price as of the grant date.

Share-based compensation expense related to the vesting of RSUs was $0.8 million and $30 thousand for the six months ended June 30, 2026 and 2025, respectively, and $0.3 million and $4 thousand for the three months ended June 30, 2026 and 2025, respectively, and is included in general and administrative expense on the condensed consolidated statements of operations and comprehensive loss.

15. Warrants

(a)Liability-classified warrants having CAD exercise price

The functional currency of the Company is USD and certain of the Company’s warrants have an exercise price in CAD, resulting liability classification of the warrants.

The following is a summary of changes in the value of the warrant liability for the six months ended June 30, 2026:

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

Volatility was estimated by using the average historical volatility of the Company. The expected life in years represents the period of time that warrants issued are expected to be outstanding. The risk-free rate is based on government treasury bond rates issued with a remaining term approximately equal to the expected remaining life of the warrants.

The Company had 123,930 liability-classified warrants (CAD exercise price) with a weighted average exercise price of CAD$9.68 outstanding as of June 30, 2026 and December 31, 2025. There were no changes during the six months ended June 30, 2026.

(b)Liability-classified warrants having USD exercise price

Beginning July 18, 2025, after closing of the offering of its common shares, the Company no longer had sufficient unissued authorized common shares to cover its outstanding equity-classified warrants. As a result, beginning on July 18, 2025 and through June 18, 2026, these warrants were reclassified to warrant liability. The Company reclassed all equity-classified warrants to warrant liability, in the amount of $9.1 million, the fair value of all outstanding equity-classified warrants as of that date. These warrants were reclassified back to equity-classified warrants on June 18, 2026 after the Company successfully increased its common share authorization from 100 million to 500 million.

The following is a summary of changes in the value of the warrant liability (USD exercise price) during the six months ended June 30, 2026:

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

Volatility was estimated by using the average historical volatility of the Company. The expected life in years represents the period of time that warrants issued are expected to be outstanding. The risk-free rate is based on government treasury bond rates issued with a remaining term approximately equal to the expected remaining life of the warrants.

The Company had 8,439,638 liability-classified warrants (USD exercise price) with a weighted average exercise price of $9.54 outstanding as of June 18, 2026 and December 31, 2025. On June 18, 2026, all USD exercise price warrants were reclassified from warrant liability to equity warrants at $1.7 million, the fair value of the warrants on June 18, 2026.

(c)Equity-classified warrants

Beginning July 18, 2025, after closing of the offering of its common shares, the Company no longer had sufficient unissued authorized common shares to cover its outstanding equity-classified warrants. As a result, beginning on July 18, 2025 and through June 18, 2026, these warrants were reclassified to warrant liability. The Company reclassified all equity-classified warrants to warrant liability, in the amount of $9.1 million, the fair value of all outstanding equity-classified warrants as of that date. These warrants were reclassified back to equity-classified warrants on June 18, 2026 after the Company successfully increased its common share authorization from 100 million to 500 million.

The Company had 8,439,638 equity-classified warrants (USD exercise price) with a weighted average exercise price of $9.54 outstanding as of June 30, 2026.

16. 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 10).

(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 obligations underlying the promissory note.

In July 2025, the Company paid $2.1 million, principal and accrued interest, to pay the promissory note in full.

17. Commitments and contingencies

Contingencies

Reid v. GameSquare Holdings, Inc., et al. – A Complaint was filed on December 15, 2025, in the United States District Court, Northern District of Texas by Kevin Reid against GameSquare Holdings, Inc., its former President, Louis Schwartz and its Chief Executive Officer, Justin Kenna. The plaintiff alleges that he was induced by the defendants’ misrepresentations about the Company to purchase GameSquare stock and seeks damages of approximately $5 million under Texas law. The Company does not believe the claims have merit and intends to vigorously defend the matter. The Company is also indemnifying Mr. Schwartz in this matter, who is represented by separate counsel.

A motion to dismiss Mr. Reid’s complaint was filed on behalf of Mr. Kenna and a partial motion to dismiss Mr. Reid’s complaint was filed on behalf of GameSquare. Mr. Schwartz has also filed a motion to dismiss the complaint. Decision on these motions is pending.

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.

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. 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.

Commitments

In August and September 2025, the Company entered into an agency services agreement with Anime Foundation. The agreements contain a requirement that the Company acquire $1.5 million of ANIME tokens in the open market. In September and October 2025, $0.5 million or 33.7 million ANIME tokens were purchased in the open market as partial fulfillment required under the contract. In February and March 2026, $1 million or 188.3 million ANIME tokens were purchased in the open market. No remaining commitment is outstanding.

18. 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 Company’s underlying performance for the period under evaluation to determine resource allocation. As of June 30, 2026, the Company is organized into five operating segments, which represent three reportable segments: Owned and Operated IP, Agency and SaaS and managed services. Talent Agency and Marketing Agency operating segments are combined into Agency reportable segment. B2B SaaS and B2C SaaS operating segments are combined into SaaS and managed services reportable segment.

Revenue, cost of sales and gross profit for the Company’s operating and reportable segments, disaggregated into geographic locations, are as follows:

Management does not evaluate operating segments using discrete asset information. The Company’s consolidated assets are generally shared across, and are not specifically ascribed to, operating and reportable segments.

Property and equipment, net, by geographic region, are summarized as follows:

19. Fair value measurements

The carrying value of cash approximates fair value. The carrying amount of other current assets and liabilities, such as accounts and other receivables and accounts payable, approximates fair value due to the short-term maturity of the amounts, and such current assets and liabilities are considered Level 2 in the fair value hierarchy.

The following tables summarize financial assets and liabilities measured at fair value on a recurring basis:

(a)Fair values measured on a non-recurring basis

The Company’s non-financial assets, such as property and equipment, goodwill and intangible assets, are recorded at fair value upon a business combination and are remeasured at fair value only if an impairment charge is recognized. The Company’s investments, accounted for under the measurement alternative of ASC 321, is remeasured at fair value only upon an observable price change or if an impairment charge is recognized. The Company uses unobservable inputs to the valuation methodologies that are significant to the fair value measurements, and the valuations require management’s judgment due to the absence of quoted market prices. The Company determines the fair value of its held and used assets, goodwill and intangible assets using an income, cost or market approach as determined reasonable.

Digital assets measured at fair value under ASC 350-60 are not included in the fair value hierarchy table above, in accordance with ASC 350-60.

(b)NAV practical expedient

The investment in Dialectic is measured at fair value using the NAV practical expedient under ASC 820-10 and is not categorized in the fair value hierarchy. The NAV is calculated monthly by the general partner in accordance with ASC 946 using fair value for substantially all underlying assets.

20. Discontinued operations

(a)FaZe Media

As discussed in Note 4, on April 1, 2025, the Company sold FaZe Media and recognized a gain on disposition of $3.0 million, resulting in FaZe Media meeting the requirements for presentation as discontinued operations.

The Company recognized a pretax net loss of $0 and $2.6 million for the three and six months ended June 30, 2026 and 2025, respectively, in net income (loss) from discontinued operations in the condensed consolidated statements of operations and comprehensive loss in relation to FaZe Media. The pretax net loss of $2.6 million during the three and six months ended June 30, 2025, includes revenue of $6.4 million, cost of revenue of $6.4 million, and operating expenses of $2.6 million.

FaZe Media had amortization and depreciation of $0 and $0.3 million for the three and six months ended June 30, 2026 and 2025, respectively. FaZe Media did not have significant capital expenditures or significant noncash activity during the periods presented.

(b)Frankly

During the third quarter of 2025, the Company executed a plan to discontinue the operations of Frankly, following a strategic decision to focus the Company’s resources on its full-service creative agency, SaaS and newly launched digital asset treasury. Subsequent to the May 31, 2024 Frankly asset disposal, the business of Frankly that remained was its legacy programmatic advertising operation. Given its single digit-gross margins and operating losses, management deemed it in the best interest of the Company to discontinue operations of Frankly. During the periods presented, Frankly met the requirements to be reported as discontinued operations.

The Company recognized a pretax net loss of $39 thousand and $2.0 million for the three months ended June 30, 2026 and 2025, respectively, in net income (loss) from discontinued operations in the condensed consolidated statements of operations and comprehensive loss in relation to Frankly. The pretax net loss of $39 thousand during the three months ended June 30, 2026, includes revenue of $6 thousand, cost of revenue of $0, and operating expenses of $45 thousand. The pretax net loss of $2.0 million during the three months ended June 30, 2025, includes revenue of $8.1 million, cost of revenue of $7.9 million, and operating expenses of $2.1 million.

The Company recognized a pretax net loss of $133 thousand and $2.5 million for the six months ended June 30, 2026 and 2025, respectively, in net income (loss) from discontinued operations in the condensed consolidated statements of operations and comprehensive loss in relation to Frankly. The pretax net loss of $133 thousand during the six months ended June 30, 2026, includes revenue of $12 thousand, cost of revenue of $11 thousand, and operating expenses of $134 thousand. The pretax net loss of $2.5 million during the six months ended June 30, 2025, includes revenue of $15.4 million, cost of revenue of $15.0 million, and operating expenses of $2.8 million.

Frankly had amortization and depreciation of $2 thousand and $50 thousand for the three months ended June 30, 2026 and 2025, respectively. Frankly did not have significant capital expenditures or significant noncash activity during the periods presented.

Frankly had amortization and depreciation of $6 thousand and $103 thousand for the six months ended June 30, 2026 and 2025, respectively. Frankly did not have significant capital expenditures or significant noncash activity during the periods presented.

21. Subsequent events

Equity Incentive Plan

On July 1, 2026, the Board of Directors of the Company (the “Board”), including the Compensation Committee, approved a discretionary equity award to the Company’s Chief Operating Officer, to be granted on July 10, 2026. The award consists of 50,000 restricted stock units (“RSUs”), with each RSU representing the right to receive one share of the Company’s common stock, subject to the terms and conditions of the Company’s 2024 Stock Incentive Plan, as amended and the applicable RSU Grant agreement (“Award Agreement”).

The RSUs were granted as a discretionary bonus and are separate from, and in addition to, any bonus or other compensation payable to the Chief Operating Officer pursuant to her previously disclosed employment agreement. All 50,000 RSUs vested in full on the grant date, July 10, 2026, and, subject to the terms of the Award Agreement, were settled through the issuance of 50,000 shares of the Company’s common stock on July 10, 2026.

On July 10, 2025, and December 3, 2025, the Board, including the Compensation Committee, approved grants to Justin Kenna, the Company’s Chief Executive Officer, and Michael Munoz, the Company’s Chief Financial Officer, of an option to purchase 1,045,712 shares and an option to purchase 301,249 shares of the Company’s common stock, respectively (the “Option Awards”), to be granted on July 10, 2026, pursuant to the Company’s 2024 Stock Incentive Plan. As previously disclosed in Forms 4 filed by Mr. Kenna and Mr. Munoz on July 15, 2025, and Forms 4/A subsequently filed by Mr. Kenna and Mr. Munoz on November 14, 2025, the Company previously reported the grant of option awards covering the same number of shares underlying the Option Awards; however, such previously reported awards were not validly issued. Accordingly, the Option Awards granted on July 10, 2026, constitute new grants and do not represent the reinstatement or reissuance of the previously reported awards.

The Option Awards vest as follows, subject to each of Mr. Kenna’s and Mr. Munoz’s continued service through the applicable vesting date: (i)62.5% of the shares subject to the applicable Option Award vest on July 10, 2026, and (ii)37.5% of the shares subject to the applicable Option Award vest on the first anniversary of July 10, 2026.

Repurchases of Shares

As of June 30, 2026, the Company had repurchased 7,844,590 common shares at a total cost of $3.8 million under this program. Subsequent to June 30, 2026, the Company acquired an additional 1,042,665 common shares at a total cost of $0.4 million. Following these transactions, the Company has $10.8 million remaining under its current authorization. Consistent with its capital allocation priorities, GameSquare intends to continue using funds generated by its treasury strategy to opportunistically repurchase its common stock.

Special Meeting of Shareholders

On August 13, 2026, the Company’s shareholders approved a proposal to approve an amendment to the Company’s First Amended and Restated Certificate of Incorporation, and authorize the Company’s Board of Directors (the “Board”), to effect a reverse stock split of the Company’s issued and outstanding Common Stock, par value $0.0001 per share, within a range from 1 for 2 to 1 for 8, with the exact ratio of the reverse stock split to be determined by the Board.