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 UNITED
STATES

 SECURITIES
AND EXCHANGE COMMISSION

 Washington,
D.C. 20549

 Form

 (Mark
One)

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

 For
the Fiscal Year Ended December 31, 2023

 OR

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

 Commission
File Number: 001-39389

 GAMESQUARE
HOLDINGS, INC.

 (Exact
name of registrant as specified in its charter)

 Delaware

 99-1946435

 (State
 or other jurisdiction of

 incorporation
 or organization)

 (I.R.S.
 Employer

 Identification
 No.)

 6775
Cowboys Way, Ste. 1335

 Frisco,
 Texas, USA

 (Address
of principal executive offices, including zip code)

 (216) 464-6400

 (Registrant's
telephone number, including area code)

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

 Title
 of Each Class

 Trading
 Symbol

 Name
 of Each Exchange on Which Registered

 Common
 Stock, $0.0001 par value

 GAME

 The
 NASDAQ Stock Market LLC

 Securities
registered pursuant to Section 12(g) of the Act: None

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

by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No

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

by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files). Yes or No

by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer,"
"smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 Large
 Accelerated Filer

 Accelerated
 Filer

 Non-accelerated
 Filer

 Smaller
 reporting Company

 Emerging
 growth company

 If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report.

 If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.

by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).

by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

 The
aggregate market value of the shares of GAME common stock held by non-affiliates of the registrant as of June 30, 2023 was $ 27,906,523
based on the closing price of $3.01 as reported by The Nasdaq Stock Market.

 The
number of shares outstanding of the Registrant's common stock as of April 12, 2024 were:

 GAME
Common Stock 30,316,256

 DOCUMENTS
INCORPORATED BY REFERENCE

 Portions of the Proxy Statement
for the 2024 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission pursuant to Regulation 14A are incorporated
by reference into Part III of this Annual Report on Form 10-K.

Holdings Inc. Annual

 Report
on Form 10-K

 For
the fiscal year ended December 31, 2023

 Table
of Contents

 PAGE
 NO.

 Item 1. Business

 Item 1B. Unresolved Staff Comments

 Item 1C. Cybersecurity

 Item 2. Properties

 Item 3. Legal Proceedings

 Item 4. Mine Safety Disclosures

 Item 5. Market for Registrant's
 Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item 6. [Reserved]

 Item 7. Management's Discussion
 and Analysis of Financial Condition and Results of Operations

 Item 8. Financial Statements and
 Supplementary Data

 Item 9. Changes in and Disagreements
 with Accountants on Accounting and Financial Disclosure

 Item 9A. Controls and Procedures

 Item 9B. Other Information

 Item 9C. Disclosure Regarding Foreign
 Jurisdictions that Prevent Inspections

 Item 10. Directors, Executive Officers
 and Corporate Governance

 Item 11. Executive Compensation

 Item 12. Security Ownership of Certain
 Beneficial Owners and Management and Related Stockholder Matters

 Item 13. Certain Relationships and
 Related Transactions, and Director Independence

 Item 14. Principal Accounting Fees
 and Services

 Item
 15. Exhibits and Financial Statement Schedules

 i

 Part
I.

 Cautionary
Statement Regarding Forward-Looking Statements

 This
Annual Report on Form 10-K (this "Annual Report") contains forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") that involve substantial risks and uncertainties. These forward-looking statements depend upon
events, risks and uncertainties that may be outside of our control. All statements other than statements of historical fact are forward-looking
statements. The words "anticipate," "believe," "continue," "could," "estimate,"
"expect," "intends," "may," "might," "plan," "possible," "potential,"
"predict," "project," "should," "would" and similar expressions may identify forward-looking
statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements include,
without limitation, our expectations concerning the outlook for our business, productivity, plans and goals for future operational improvements
and capital investments, operational performance, future market conditions or economic performance and developments in the capital and
credit markets and expected future financial performance, as well as any information concerning possible or assumed future results of
operations.

 Forward-looking
statements involve a number of risks, uncertainties and assumptions, and actual results or events may differ materially from those projected
or implied in those statements. Important factors that could cause such differences include, but are not limited to:

 the
 sufficiency of our cash, cash equivalents and investments to meet our liquidity needs;

 our
 limited operating history and uncertain future prospects and rate of growth due to our limited operating history, including our ability
 to implement business plans and other expectations;

 our
 ability to grow market share in our existing markets or any new markets we may enter;

 our
 ability to maintain and grow the strength of our brand reputation;

 the
 Company's ability to achieve its objectives;

 our
 ability to manage our growth effectively;

 our
 ability to retain existing and attract new Esports professionals, content creators and influencers;

 our
 success in retaining or recruiting, or changes required in, our officers, directors and other key employees or independent contractors;

 our
 ability to maintain and strengthen our community of brand partners, engaged consumers, content creators, influencers and Esports
 professionals, and the success of our strategic relationships with these and other third parties;

 our
 ability to effectively compete within the industry;

 our
 presence on the internet and various third-party mass media platforms;

 risks
 related to data security and privacy, including the risk of cyber-attacks or other security incidents;

 risks
 resulting from our global operations;

 our
 ability to maintain the listing of our Common Stock on Nasdaq;

 our
 securities' potential liquidity and trading, including that the price of our securities may be volatile;

 future
 issuances, sales or resales of our securities;

 the
 grant and future exercise of registration rights;

 our
 ability to secure future financing, if needed, and our ability to repay any future indebtedness when due;

 the
 ability of the Company to complete offerings on acceptable terms;

 the
 impact of the regulatory environment in our industry and complexities with compliance related to such environment, including our
 ability to comply with complex regulatory requirements;

 our
 ability to maintain an effective system of internal controls over financial reporting;

 our
 ability to respond to general economic conditions, including market interest rates;

 our
 ability to execute on future acquisitions, mergers or dispositions; and

 changes
 to accounting principles and guidelines.

 We
caution you not to rely on forward-looking statements, which reflect current beliefs and are based on information currently available
as of the date a forward-looking statement is made. Forward-looking statements set forth herein speak only as of the date of this Annual
Report on Form 10-K. Forward-looking statements are not guarantees of performance. There can be no assurance that future developments
affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some
of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those
expressed or implied by these forward-looking statements. Other sections of this report describe additional factors that could adversely
affect our business, financial condition or results of operations. Should one or more of these risks or uncertainties materialize, or
should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking
statements.

 We
undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or
otherwise, except as may be required under applicable securities laws. In the event that any forward-looking statement is updated, no
inference should be made that we will make additional updates with respect to that statement, related matters, or any other forward-looking
statements except to the extent required by law. All forward-looking statements attributable to us or persons acting on our behalf are
expressly qualified in their entirety by the foregoing cautionary statements. Any corrections or revisions and other important assumptions
and factors that could cause actual results to differ materially from forward-looking statements may appear in our public filings with
the U.S. Securities and Exchange Commission ("SEC"), which are or will be (as appropriate) accessible at www.sec.gov, and
which you are advised to consult.

 Item
1. Business

Holdings, Inc. ("GameSquare," the "Company," "we," "us," and "our") 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 Gaming Community Network (a "GCN"), a digital media company focused
on gaming and esports audiences, Swingman LLC dba as Zoned, a gaming and lifestyle marketing agency, Code Red Esports Ltd. ("Code
Red"), a leading esports organization, GameSquare Esports Inc. dba as Fourth Frame Studios, a creative production studio, Mission
Supply, a merchandise and consumer products business, Frankly Media, programmatic advertising, Stream Hatchet, live streaming analytics,
and Sideqik a social influencer marketing platform.

Holdings, Inc. (formerly Engine Gaming and Media, Inc.), (NASDAQ: GAME; TSXV: GAME) completed its 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.

Esports, Inc was traded on the Canadian Securities Exchange (CSE) under the symbol "GSQ" and on the OTCQB Venture Market
in the Unites States under the symbol "GMSQF" until April 11, 2023.

 GameSquare's mission is to revolutionize the way brands and game publishers connect with hard-to-reach Gen
Z, Gen Alpha, and Millennial audiences. Our next generation media, entertainment, and technology capabilities drive compelling outcomes
for creators and maximize our brand partners' return on investment. Through our purpose-built platform, we provide award winning
marketing and creative services, offer leading data and analytics solutions, and amplify awareness through FaZe Clan, one of the most
prominent and influential gaming organizations in the world. With an audience reach of 1 billion digitally native consumers across our
media network and roster of creators, we are reshaping the landscape of digital media and immersive entertainment.

 Breakdown
of Revenue Streams

 The
following table provides the breakdown for the main streams of revenue from continuing operations for the two most recently completed
financial years:

 Source of Revenue

 Twelve-month period ended

 Twelve-month period ended

 Teams

 $

 $
 9,590,166

 $
 11,520,901

 $
 18,491,843

 $
 29,782,480

 $
 -

 Industry
Overview and Principal Markets

 Video
gaming is one of the largest and fastest growing markets in the entertainment sector, with an estimated 2.6 billion gamers globally,
with esports being the major source of growth. Esports is a term that comprises a diverse offering of competitive electronic games that
gamers play against each other. One of the biggest differences between esports and video games of old is the community and spectator
nature of esports - the competitive play against another person, either one-on-one or in teams, is a central feature of esports. Since
players play against each other online, a global network of players and viewers has developed as these players compete against each other
worldwide. Additionally, game developers have greatly increased the entertainment value of games, which has made the spectator aspect
of gaming much more prevalent and further drives expansion of the gaming market.

 The
expanded reach of broadband service and the computer technology advances in the last decade have also greatly accelerated the growth
of esports. Esports has become so popular that many high schools and colleges now offer programs to support students' interest
in esports, as well as tournaments and scholarships. The best-known esports teams are receiving marquee sponsorships and are being purchased
or invested in by a range of financial and strategic partners. The highest profile esports gamers have significant online audiences as
they stream themselves playing against other players online and potentially can generate millions of dollars in sponsorship money and
affiliate fees from their online streaming channels. Most major professional esports events and a wide range of amateur esports events
are broadcast live via streaming services.

 Management
believes GameSquare is well positioned to benefit from the significant growth of the gaming and esports industry. The gaming and
esports industry is projected to have a global audience of nearly 650 million viewers by 2025, with live streaming expected to reach
more than 1.4 billion by the end of 2025 and the gaming market is expected to generate more than 225 billion of revenue by 2025.
GameSquare's revenue growth is expected to be driven by increasing marketing spend from global brands that seek exposure to
and connections with these audiences. The Company's growth strategy focuses on growing audience and reach within its digital
agencies, media network, and teams segments. GameSquare's digital agencies, teams, and SaaS and advertising services segments
serve the gaming and esports market, and more broadly sports and entertainment through content creation, audience development and
growing brand relationships.

 The
digital agency industry is highly fragmented, and these businesses are generally characterized by high revenue growth with healthy earnings
before income, taxes, depreciation and amortization ("EBITDA") margins, which management believes positions the Company well
for sustainable growth through organic efforts and presents significant opportunities to grow through accretive acquisitions.

 Outlook

 GameSquare is pursuing organic growth opportunities, as well as M&A growth opportunities. From August 2020 to
March 2024, the Company has completed five acquisitions and divested two non-core assets. GameSquare's organic growth strategy focuses
on growing audience and reach within its digital agencies, media network, and teams segments. GameSquare's digital agencies, teams,
and services segments serve the gaming and esports market, and more broadly sports and entertainment through content creation, audience
development and growing brand relationships. The digital agency industry is highly fragmented, and these businesses are generally characterized
by high revenue growth with healthy earnings before income, taxes, depreciation and amortization margins, which management believes positions
the Company well for sustainable growth through organic efforts and presents significant opportunities to grow through accretive acquisitions.

 The combination of Engine Gaming's best-in-class technology assets with GameSquare's award-winning agency
and creative capabilities, allows the Company to offer unparalleled insight into consumer behaviors. It also allows GameSquare to develop
data-driven creative strategies, and measure and optimize campaigns towards customer acquisition goals in real-time - creating impactful
marketing solutions that drive ROI for its customers.

 The Company has invested in its sales organization and continues to see significant growth in the number, and the
size, of requests for proposals within its agency businesses. The Company's financial profile compares very favorably against its
esports peers, as well as other companies seeking to engage with youth audiences.

 The Company believes enterprise growth may come as a result of synergistic approaches to combining the strengths
of its multiple SaaS companies that it can present as a unified offering to the market.

 Customers

 The
Company has different business segments which often target different customers. For example, our business-to-business SaaS and data analytics
platforms generate revenue from industry leading companies in the technology space, such as Microsoft. Additionally, our marketing, content
creator services have benefited from brand sponsorships with large customers such as Jack in the Box, Red Bull, and Kraft. Importantly,
we believe our end-to-end marketing platform creates a highly attractive opportunity for continued customer growth via cross pollination
of our services, which we believe will allow us to acquire a broad range of diversified customers.

 Foreign
Operations

 Although
the Company is headquartered in the United States, there is some business conducted outside of the United States:

 Stream
 Hatchet has operations in Spain, with an office in Terrassa, Spain

 Code Red has operations in the UK, with its registered office in London,
England

 Competition

 GameSquare competes in highly competitive and fragmented
sectors, which include digital advertising and marketing services, content creation, streaming technology, event production, and gaming
platforms. Despite intense competition, the Company believes it is well positioned to compete with its competitors by means of utilizing
its modern marketing technology platform that supports a continuous feedback loop between its various services, such as marketing services,
influencer relationship management, and real-time analytics and insights. GameSquare believes this ability to leverage its broad range
of services provides a unique and differentiated platform compared to its competitors.

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

 Intellectual
Property

 The
Company considers the creation, use, and protection of intellectual property to be crucial to its business. The Company's general
practice is to require all key employees and consultants to sign confidentiality agreements and assign all rights of inventions to the
Company. In addition to the above contractual arrangements, the Company also relies on a combination of trade secret, copyright, domain
name and other legal rights to protect its intellectual property. The Company typically owns the copyright to the software code to its
content as well as the brand or title name under which its games are marketed. The Company believes that it has provided sufficient security
for its intellectual property.

 The
Company owns the following non-patent intellectual property:

 Trade
 secrets and know-how that it uses to develop games and processes;

 Common
 law trademarks, including product names and graphics, music and other audio-visual elements
 of games;

 Software
 code relating to its products;

 Certain
 program assets; and

 Sports
 and esports-focused apps.

 Human
Capital Resources

 As
of April 1, 2024, the Company had approximately 175 employees globally. Of these employees, approximately 6 are located in Canada,
31 in Spain, 14 in United Kingdom, 9 in India, and 115 in the United States. None of the Company's employees are represented
by a collective bargaining agreement. The Company considers its relations with its employees to be strong and views its employees as
an important competitive advantage.

 Regulatory
Matters

 The
digital content and entertainment industry and the markets in which we operate are new and developing and, as such, are not heavily regulated
at this time. There are inherent risks and uncertainties associated with operating in new and developing industries and markets, especially
as the laws and regulations regarding these industries and markets are also developing and changing. Although we are not currently subject
to significant government regulation, the scope and interpretation of the laws that are or may be applicable to us in the future are
uncertain and may be conflicting in different jurisdictions in which we operate; as a result, we may come under increased regulatory
scrutiny which may restrict the digital content and entertainment industry and associated markets, including with respect to talent management,
rights of publicity, intellectual property, consumer protection electronic commerce, advertising, targeted, electronic or telephonic
marketing, competition, data protection and privacy, data localization, anti-corruption and bribery, content regulation, taxation, labor
and employment, securities regulation, financial reporting and accounting and economic or other trade prohibitions or sanctions or other
subjects. Many of these laws and regulations are still evolving and being tested in courts and could be interpreted and applied in a
manner that is inconsistent from jurisdiction to jurisdiction and inconsistent with our current policies and practices and in ways that
could harm our business. In addition, the application and interpretation of these laws and regulations may be uncertain, particularly
in the new and rapidly evolving industries in which we operate, and new laws or adverse findings of law regarding the characterization
of the type of business GameSquare operates could alter our legal and regulatory burden.

 Furthermore,
the growth and development of electronic commerce may prompt calls for more stringent consumer protection laws that may impose additional
burdens on companies such as ours that conduct business through the internet and mobile devices. The costs of complying with such laws
and regulations may be high and are likely to increase in the future, particularly as the degree of regulation increases, our business
grows and our geographic scope expands. Further, the impact of these laws and regulations may disproportionately affect our business
in comparison to our peers in the technology sector that have greater resources. Any failure on our part to comply with these laws and
regulations may subject us to significant liabilities or penalties, or otherwise adversely affect our business, financial condition or
operating results.

 Non-compliance
with any applicable laws and regulations could result in penalties or significant legal liability. We take reasonable efforts to comply
with all applicable laws and regulations, and will continue to do so as our regulatory burden changes, but there can be no assurance
that we will not be subject to regulatory action, including fines, in the event of an incident. We or our third-party service providers
could be adversely affected if legislation or regulations are expanded to require changes in our or our third party service providers'
business practices or if governing jurisdictions interpret or implement their legislation or regulations in ways that negatively affect
our or our third-party service providers' business, results of operations, or financial condition. In addition, government authorities
outside the U.S. may also seek to restrict or block access to our content, platform or website, or to application stores or the internet
generally, or require a license therefor, and to the hosting, production or streaming of certain content or impose other restrictions
that may affect the accessibility or usability of our content in that jurisdiction for a period of time or indefinitely.

 Additional
Information

 Our
website address is  We make available free of charge on or through our website our Annual Report on Form
10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports filed or furnished pursuant to
Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after such material is electronically filed with or furnished
to the SEC. However, the information found on our website is not part of this or any other report.

 Item
1B. Unresolved Staff Comments

 Not
applicable.

 Item
1C. Cybersecurity

 Risk
Management and Strategy

 The
Company has developed an information security program to address material risks from cybersecurity threats. The program includes policies
and procedures that identify how security measures and controls are developed, implemented, and maintained. A risk assessment, based
on a method and guidance from a recognized national standards organization, is conducted annually. The risk assessment along with risk-based
analysis and judgment are used to select security controls to address risks. During this process, the following factors, among others,
are considered: likelihood and severity of risk, impact on the Company and others if a risk materializes, feasibility and cost of controls,
and impact of controls on operations and others. Specific controls that are used to some extent include endpoint threat detection and
response (EDR), identity and access management (IAM), privileged access management (PAM), logging and monitoring involving the use of
security information and event management (SIEM), multi-factor authentication (MFA), firewalls and intrusion detection and prevention,
and vulnerability and patch management.

 Third-party
security firms are used in different capacities to provide or operate some of these controls and technology systems, including cloud-based
platforms and services. For example, third parties are used in selected areas to conduct assessments, such as vulnerability scans and
penetration testing. The Company uses a variety of processes to address cybersecurity threats related to the use of third-party technology
and services, including pre-acquisition diligence, imposition of contractual obligations, and performance monitoring.

 The
Company has a written incident response plan and conducts tabletop exercises to enhance incident response preparedness. Business continuity
and disaster recovery plans are used to prepare for the potential for a disruption in technology we rely on. Employees undergo security
awareness training when hired and annually.

 The
Company has a Governance, Risk, and Compliance (GRC) function to address enterprise risks, and cybersecurity is a risk category addressed
by that function. The Company has a privacy and security governance committee.

 The
Company (or third parties it relies on) may not be able to fully, continuously, and effectively implement security controls as intended.
As described above, we utilize a risk-based approach and judgment to determine the security controls to implement and it is possible
we may not implement appropriate controls if we do not recognize or underestimate a particular risk. In addition, security controls,
no matter how well designed or implemented, may only mitigate and not fully eliminate risks. And events, when detected by security tools
or third parties, may not always be immediately understood or acted upon.

 Governance

 The Chief Information Security Officer (CISO) is the management position
with primary responsibility for the development, operation, and maintenance of our information security program. The Company's CISO
should have experience in managing cybersecurity risks & protocols, data protection protocols, and managing protocols for Cloud/IT/web
security vulnerabilities. The CISO briefs the Company management team quarterly regarding general security updates or as needed when security
incidents are identified. Oversight of the information security program at the Board level sits with Audit Committee.

 Item
2. Properties

 Our
corporate headquarters is located in Frisco, Texas, where we occupy facilities under a lease that expires in 2029. We do not
own any real property or related investments. We believe that our current facilities are adequate to meet our current needs and
provides flexibility to scale in the future.

 Item
3. Legal Proceedings

 In April 2020, Engine announced its renegotiation
of the acquisition of Allinsports. The revised purchase agreement provided for the acquisition of 100% of Allinsports in exchange for
the issuance of 241,666 common shares of the Engine and other considerations, including payments of $1,200,000 as a portion of the purchase
consideration. In September 2020, Engine advised the shareholders of Allinsports that closing conditions of the transaction, including
the requirement to provide audited financial statements, had not been satisfied.

 In response, in November 2020, the shareholders of
Allinsports commenced arbitration in Alberta, Canada seeking, among other things, to compel Engine to complete the acquisition of Allinsports
without the audited financial statements, and to issue 241,666 common shares of Engine to those shareholders. As alternative relief, the
shareholders of Allinsports sought up to $20.0 million in damages. A hearing in this matter was held in May of 2021, and by a decision
dated September 30, 2021, the Arbitrator determined that the closing of the transaction had previously occurred and directed Engine to
issue 241,666 common shares. In conjunction with completion of the Arrangement (see Note 4), the Company assumed this obligation to issue
241,666 common shares. The Company is pursuing regulatory approval to issue the shares and is also pursuing relief against Allinsports
shareholders for various alleged breaches of the share purchase agreement. 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 closing date
of the Arrangement. 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.

 On January 21, 2021, eight former shareholders of
Winview filed a Complaint in Delaware Chancery Court against four Winview directors (David Lockton, et al. v. Thomas S. Rogers, et al.)
alleging that the defendants breached their fiduciary duties in connection with the sale of Winview to Engine. The relief sought includes
rescission of the sale of Winview to Engine and compensatory damages. The defendants have filed a motion to dismiss the claims. By Decision
dated March 1, 2022, the Court granted in part and denied in part, the defendants' Motion to Dismiss the Complaint. Neither Engine
nor Winview have been named as parties to this action. Under the March 9, 2020, Business Combination Agreement pursuant to which Engine
acquired Winview, Engine agreed to indemnify Winview's directors for any claims arising out of their service as directors for Winview.
This matter was settled in September 2023.

 In July of 2021, Winview Inc. filed separate patent
infringement lawsuits against DraftKings Inc. and FanDuel, Inc in the United States District Court for the District of New Jersey, alleging
that Sportsbook and Daily Fantasy Sports offerings of DraftKings and FanDuel infringe four of Winview's patents. These actions seek
the recovery of damages and other appropriate relief. Draft Kings and FanDuel have filed motions to dismiss, which are pending, and the
court's review of these motions has been suspended pending the outcome of inter partes review proceedings filed with the United
States Patent Office regarding some of the patents involved in these actions. In September of 2023, in connection with the settlement
of the Lockton action, Winview Inc. transferred patents, including the four that are subject of the District Court actions, to an independent
entity, WinView IP Holdings, LLC, which has assumed responsibility for the prosecution of these actions.

 By Order to Continue dated May 5, 2022, Engine was
substituted in as the plaintiff in a matter pending in the Ontario Superior Court of Justice, seeking recovery of $2.1 million ( 1.9
million) of principal and additional amounts of accrued interest under promissory notes acquired by Engine. The matter is in the discovery
stage.

 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.

 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.

 Item
4. Mine Safety Disclosures

 Not
applicable.

 PART
II

 Item
5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Market
Information

 Our
common stock is listed on the Nasdaq Capital Market under the symbol "GAME".

 Dividends

 The
Company has not paid any dividends since its incorporation. Any determination to pay any future dividends will remain at the discretion
of the Board and will be made based on the Company's financial condition and other factors deemed relevant by the Board. There
are currently no restrictions on the ability of the Company to pay dividends except as set out under the Company's governing documents.
Future dividend payments will depend on continued compliance with our financial covenants, as well as our earnings, financial condition,
capital expenditure requirements, surplus and other factors that our Board considers relevant.

 Holders

 As
of April 12, 2024, there were 887 holders of record of our common stock. The number of registered holders does not include holders
who are beneficial owners whose shares are held in street name by brokers and other nominees.

 Securities
Authorized for Issuance Under Equity Compensation Plans

 The
following table presents the securities authorized for issuance under our equity compensation plans as of December 31, 2023:

 (a)

 (b)

 (c)

 PLAN CATEGORY

 NUMBER
 OF SECURITIES TO BE ISSUED UPON EXERCISE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS

 WEIGHTED
 AVERAGE EXERCISE PRICE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS

 NUMBER
 OF SECURITIES REMAINING AVAILABLE FOR FUTURE ISSUANCE UNDER EQUITY COMPENSATION PLANS (EXCLUDING SECURITIES REFLECTED IN COLUMN (a))

 Equity Compensation Plans Not Approved by Shareholders

 -

 N/A

 N/A

 Equity Compensation Plans Approved by Shareholders

 Stock Options (1)

 416,621

 249,819

 CAD$19.34

 USD$5.26

 632,473

 RSUs (2)

 664,597

 N/A

 402,550

 Total

 1,331,037

 1,035,023

 Note:

 (1)
 The stock option plan is considered a "rolling" or "evergreen"
stock option plan since the Corporation will be authorized to grant stock options of up to 10% of its issued and outstanding Common Shares
at the time of the stock option grant, from time to time, with no vesting provisions and after taking into account any stock options or
RSUs outstanding. The number of options available to grant increases as the number of issued and outstanding Common Shares increases.
As of December 31, 2023, the number of options available to grant amounted to 1,298,913 Common Shares, being 10% of the outstanding Common
Shares as of December 31, 2023.

 (2)
 Subject to the adjustment provisions provided for in the RSU plan and applicable
rules and regulations of all regulatory authorities to which the Corporation is subject (including any stock exchange), the total number
of Common Shares that may be reserved for issue in connection with the RSUs granted pursuant to the RSU plan shall not exceed 1,067,147
Common Shares, being 10% of the total number of issued and outstanding Common Shares on the date the RSU plan was adopted by the Board.

 As of December 31, 2023,
the number of stock options and RSUs outstanding that were issued under the Stock Option plan and RSU plan, respectively, represents approximately
5.13% and 5.12% of the 12,989,128 of the outstanding Common Shares as of December 31, 2023.

 Purchases
of Equity Securities by the Issuer and Affiliated Purchasers

 None.

 Item
6. [Reserved]

 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 Unless
the context otherwise requires, all references in this section to the "Company," "GameSquare," "we,"
"us," or "our" refer to GameSquare Holdings, Inc. and its subsidiaries and/or the management and employees of
the Company.

 The
following discussion and analysis provide information which our management believes is relevant to an assessment and understanding of
our results of operations and financial condition. This discussion and analysis should be read together with our audited consolidated
financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K. This discussion and analysis should also
be read together with our financial information for the year ended and as of December 31, 2023. In addition to historical financial information,
this discussion and analysis contains forward-looking statements that reflect our plans, estimates, and beliefs that involve risks, uncertainties
and assumptions. As a result of many factors, such as those set forth under the "Cautionary
Statement Regarding Forward-Looking Statements" elsewhere in this Annual Report on Form 10-K, our actual results may differ materially
from those anticipated in these forward-looking statements.

 Overview

is a vertically integrated, digital media, entertainment and technology company that connects global brands with gaming and youth culture
audiences. Our end-to-end platform includes GCN, a digital media company focused on gaming and esports audiences, Swingman LLC dba as
Cut+Sew, a gaming and lifestyle marketing agency, Code Red Esports Ltd. ("Code Red"), a UK based esports talent agency, NextGen
Tech, LLC, dba as Complexity Gaming ("Complexity"), a leading esports organization, GameSquare Esports Inc. dba as Fourth
Frame Studios, a creative production studio, Mission Supply, a merchandise and consumer products business, Frankly Media, programmatic
advertising, Stream Hatchet, live streaming analytics, and Sideqik a social influencer marketing platform.

Holdings, Inc. (formerly Engine Gaming and Media, Inc.), (NASDAQ: GAME; TSXV: GAME) completed its 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.

Esports, Inc was traded on the Canadian Securities Exchange (CSE) under the symbol "GSQ" and on the OTCQB Venture Market
in the Unites States under the symbol "GMSQF" until April 11, 2023.

 Outlook

 GameSquare is pursuing organic growth opportunities,
as well as M&A growth opportunities. From August 2020 to March 2024, the Company has completed five acquisitions and divested two
non-core assets. GameSquare's organic growth strategy focuses on growing audience and reach within its digital agencies, media network,
and teams segments. GameSquare's digital agencies, teams, and services segments serve the gaming and esports market, and more broadly
sports and entertainment through content creation, audience development and growing brand relationships. The digital agency industry is
highly fragmented, and these businesses are generally characterized by high revenue growth with healthy earnings before income, taxes,
depreciation and amortization margins, which management believes positions the Company well for sustainable growth through organic efforts
and presents significant opportunities to grow through accretive acquisitions.

 The combination of Engine Gaming's best-in-class
technology assets with GameSquare's award-winning agency and creative capabilities, allows the Company to offer unparalleled insight
into consumer behaviors. It also allows GameSquare to develop data-driven creative strategies, and measure and optimize campaigns towards
customer acquisition goals in real-time - creating impactful marketing solutions that drive ROI for its customers.

 The Company has invested in its sales organization
and continues to see significant growth in the number, and the size, of requests for proposals within its agency businesses. The Company's
financial profile compares very favorably against its esports peers, as well as other companies seeking to engage with youth audiences.

 The Company believes enterprise growth may come as a result of synergistic approaches to combining the strengths
of its multiple SaaS companies that it can present as a unified offering to the market.

 Brands

 Zoned

 Zoned Gaming is a marketing
agency dedicated to bridging the gap between gaming and pop-culture. They work with endemic and non-endemic brands alike, helping them
identify their lane and build equity in the constantly changing world of gaming and esports.

 Code Red

 Code Red is an authentic
esports media agency that is passionate about esports and video games. Since 2003, Code Red has produced major esports events, sourced,
and hired esports and gaming talent, developed esports related content (that has gone out to over 1 million viewers), managed major esports
teams, conducted a wide range of ongoing and ad-hoc strategic consultancy projects, and managed countless marketing campaigns.

 GCN

 GCN is a media group dedicated
to gaming and esports. GCN builds bespoke strategy solutions for reaching young gaming & esports audiences from content creation to
full-scale tournaments for any endpoint be it social, broadcast TV or live stream.

 Fourth Frame Studios

 Rooted in gaming, youth,
and popular culture, Fourth Frame Studios is a multidisciplinary creative and production studio that specializes in telling stories for
a multi-dimensional audience. Fourth Frame Studios builds meaningful and diverse content systems fueled by best-in-class creatives and
production resources, that truly get what gamers and youth audiences want.

 Mission Supply

 Mission Supply operates at
the intersection of gaming, esports, and fashion design filling a need for fans seeking high quality merchandise that represents their
favorite teams, organizations, and brands within the gaming ecosystem by providing merchandise and consumer product design, marketing,
and sales consultation to brands and esports organizations seeking to reach large and growing gaming and youth demographics.

 Complexity

 Complexity Gaming, is one
of North America's longest-standing esports organizations. Complexity's esports teams have won more than 140 championships
in nearly 30 game titles over its 20-year history. Staunchly committed to passion, professionalism, and a player-first mentality, Complexity
has been continuously recognized as a global leader in modern esports.

 Frankly

 Frankly Inc. ("Frankly"),
through its wholly-owned subsidiary Frankly Media, LLC, provides a complete suite of solutions that give publishers a unified workflow
for the creation, management, publishing and monetization of digital content to any device, while maximizing audience value and revenue.

 Frankly's products
include a ground-breaking online video platform for Live, Video-on-Demand ("VOD") and Live-to-VOD workflows, a full-featured
content management system with rich storytelling capabilities, as well as native apps for iOS, Android, Apple TV, Fire TV and Roku.

 Frankly also provides comprehensive
advertising products and services, including direct sales and programmatic ad support. With the release of its serverside ad insertion
(SSAI) platform, Frankly has been positioned to help video producers take full advantage of the growing market in addressable advertising.

 Sideqik

 Sideqik, Inc. ("Sideqik"),
is an influencer marketing platform that offers brands, direct marketers, and agencies tools to discover, connect and execute marketing
campaigns with content creators. Sideqik's end-to-end solutions offer marketers advanced capabilities to discover influencers with
demographic and content filtering; connect and message influencers; share marketing collateral such as campaign briefs, photos, logos,
videos; measure reach, sentiment, and engagement across all major social media platforms; and evaluate earned media value and return on
investment across the entire campaign.

 Stream Hatchet

 Stream Hatchet is the leading provider of data analytics
for the live streaming industry. With a suite of services, encompassing a user-friendly SaaS platform, custom reports, and strategic consulting,
Stream Hatcher is a trusted guide for those navigating the dynamic landscape of live streaming. With up to seven years of historical data
with minute-level granularity from 20 platforms, Stream Hatchet provides stakeholders in the live-streaming industry with powerful insights
to drive innovation and growth. Stream Hatchet partners with a diverse clientele - from video game publishers and marketing agencies to
esports organizers and teams - who rely on the company's cutting-edge data analytics to optimize their marketing strategies, secure
lucrative sponsorships, enhance esports performance, and build successful tournaments.

 Recent
Developments

 Merger
Agreement

 On
March 7, 2024 (the "Closing Date"), GameSquare Holdings, Inc., a Delaware corporation (and prior to the Domestication (as
defined below), a British Columbia corporation) (the "Company" or "GameSquare"), consummated the previously announced
merger (the "Closing") of FaZe Holdings Inc., a Delaware corporation ("FaZe"), pursuant to that certain Agreement
and Plan of Merger, dated October 19, 2023 (as amended, the "Merger Agreement"), by and among the Company, FaZe and GameSquare
Merger Sub I, Inc., a Delaware corporation and wholly owned subsidiary of GameSquare ("Merger Sub"), as amended by that certain
First Amendment to Agreement and Plan of Merger, dated December 19, 2023, by and among the Company, FaZe and Merger Sub (the "Amendment
to Merger Agreement"). The consummation of the Merger involved (i) prior to the Closing, the continuance of GameSquare from the
laws of the Province of British Columbia to the laws of the State of Delaware so as to become a Delaware corporation (the "Domestication")
and (ii) the merger of Merger Sub with and into FaZe, with FaZe continuing as the surviving corporation and wholly-owned subsidiary of
GameSquare (the "Merger"), as well as the other transactions contemplated in the Merger Agreement.

 Merger
Consideration

 At
the effective time of the Merger (the "Effective Time"): (i) each outstanding share of FaZe common stock, par value $0.0001
per share (the "FaZe Common Stock") issued and outstanding immediately prior to the Effective Time (other than shares held
in treasury by FaZe or held directly by GameSquare or Merger Sub (which such shares were cancelled)) was converted into the right to
receive 0.13091 (the "Exchange Ratio") of a fully paid non-assessable share of common stock, par value $0.0001 per share,
of GameSquare (the "GameSquare Common Stock") and, if applicable, cash in lieu of fraction shares of FaZe Common Stock, subject
to applicable withholding, (ii) each share of common stock, par value $0.001 per share, of Merger Sub that was issued and outstanding
immediately prior to the Effective Time was converted into one validly issued, fully paid and non-assessable share of common stock, par
value $0.001 per share, of FaZe Common Stock.

 Treatment
of Equity Awards

 In
addition, effective as of immediately prior to the Effective Time, all of the outstanding FaZe equity awards, including options to purchase
shares of FaZe Common Stock, each share of FaZe Common Stock subject to vesting, repurchase or other lapse of restrictions, and each
FaZe restricted stock unit convertible into shares of FaZe Common Stock, was assumed by GameSquare and converted into GameSquare equity
awards on substantially the same terms, except that the assumed equity awards will cover a number of shares of GameSquare Common Stock
and, if applicable, have an exercise price determined using the Exchange Ratio.

 Also
at the Effective Time, all outstanding warrants to purchase shares of FaZe Common Stock were assumed by GameSquare and converted into
warrants to purchase shares of GameSquare Common Stock on substantially the same terms, except that the assumed warrants cover a number
of shares of GameSquare Common Stock, and have an exercise price, determined using the Exchange Ratio.

 Post-Closing
Governance

 In
connection with the Merger and in accordance with the Merger Agreement, effective as of the Closing, the board of directors of the Company
(the "Board") increased the size of the Board from six to nine members and appointed Paul Hamilton and Nick Lewin (each,
a "New Director" and collectively, the "New Directors"), who were previously members of FaZe's board of
directors, to serve on the Board, in each case, to hold office until their successors are duly elected and qualified or their earlier
death, resignation or removal. Following the appointment of the New Directors, there remains one vacancy on the Board. Pursuant to the
Merger Agreement, such vacancy is to be filled at such time that the Board duly elects an individual to serve in such capacity in accordance
with the Bylaws and the terms of the Merger Agreement. It has not yet been determined on which committees of the Board Mr. Hamilton and
Mr. Lewin will serve.

 PIPE
Financing

 Substantially
concurrently with the consummation of the Merger, the Company completed its previously announced private placement in public equity financing
(the "PIPE Financing"). In connection with the PIPE Financing, the Company entered subscription agreements (the "Subscription
Agreements") with certain investors (the "PIPE Investors"), pursuant to which the Company issued to the PIPE Investors
an aggregate of 7,194,244 units at a purchase price per unit of $1.39, for aggregate gross proceeds of $10.0 million. Each unit consists
of one share of GameSquare Common Stock and a warrant to purchase 0.15 shares of GameSquare Common Stock. As a result, the Company issued
an aggregate of 7,194,224 shares of GameSquare Common Stock (the "PIPE Shares") and warrants to purchase up to 1,079,136
shares of GameSquare Common Stock (the "PIPE Warrants) pursuant to the PIPE Financing. Each whole PIPE Warrant is exercisable for
one share of GameSquare Common Stock at an exercise price of $1.55 per share for a period of five years after the Closing Date.

 The
PIPE Shares and PIPE Warrants are subject to a four month hold period under Canadian securities laws expiring four months following the
Closing Date. The PIPE Shares will not be registered under the Securities Act of 1933, as amended (the "Securities Act"),
or any U.S. state securities laws, and were issued pursuant to and in accordance with the exemption from registration under the Securities
Act, under Section 4(a)(2) and/or Regulation D promulgated under the Securities Act. The securities may not be offered or sold in the
United States absent registration or pursuant to an exemption from the registration requirements of the Securities Act and applicable
U.S. state securities laws.

 The
Company also entered into Registration Rights Agreements with the PIPE Investors (the "Registration Rights Agreements").
The Registration Rights Agreements provide, among other things, that the Company will as promptly as reasonably practicable, and in any
event no later than 150 days after the Closing Date (the "Filing Deadline"), file with the SEC (at the Company's sole
cost and expense) a registration statement registering the resale of the PIPE Shares and the shares of GameSquare Common Stock underlying
the PIPE Warrants issued to the PIPE Investors, and will use its commercially reasonable efforts to have such registration statement
declared effective as soon as practicable after the filing thereof, but no later than the earlier of (i) the 90th calendar day following
the Filing Deadline if the SEC notifies the Company that it will "review" such registration statement and (ii) the fifth
business day after the date the Company is notified (orally or in writing) by the SEC that such registration statement will not be "reviewed"
or will not be subject to further review.

 The
Company had previously entered into a backstop agreement (the "Backstop Agreement") with Goff Jones Strategic Partners, LLC
(formerly known as Goff & Jones Lending Co, LLC) ("Goff Jones"), to purchase common stock to ensure the PIPE was fully
subscribed. The Backstop Agreement was originally announced on October 20, 2023. A total of $6.0 million of securities were issued to
Goff Jones in connection with the Backstop Agreement.

 Complexity
Membership Interest Purchase Agreement

 On
March 1, 2024, Global Esports Properties, LLC, a Delaware limited liability company ("Buyer"), GameSquare Esports (USA),
Inc., a Nevada corporation ("Seller") and sole member of NextGen Tech, LLC, a Texas limited liability company doing business
as Complexity Gaming, and GameSquare Holdings, Inc., a corporation formed under the laws of the province of Ontario ("Beneficial
Owner") (together, the "Parties") entered into a Membership Interest Purchase Agreement (the "MIPA") for
the purchase of all issued and outstanding interests (the "Interests") of NextGen Tech, LLC, a Texas limited liability company
doing business as Complexity Gaming (the "Transaction").

 The
purchase price for the acquired Interests was $10.4 million, subject to final determination and adjustment pursuant to the purchase price
adjustment mechanism set forth in the MIPA (the "Purchase Price"). $0.8 million of the Purchase Price was paid in cash at
closing and the remainder was paid at closing by delivery of a secured subordinated promissory note (the "Note") in favor
of the Seller in the principal amount of $9.6 million (the "Principal Amount"). Under the Note, the Company is required pay
the Principal Amount of the Note, together with all accrued interest (accrued at a rate equal to 3% per annum), fees, premium, charges,
costs, and expenses no later than thirty-six (36) months from the date of the Note.

 The
Note is secured pursuant to a Security Agreement (the "Security Agreement"), which provides for a security interest in Buyer's
collateral (as defined in the Security Agreement) to secure any and all indebtedness, obligations, liabilities, and undertakings under
or in respect of the Note.

 The
Parties' obligation to complete the Transaction contemplated by the MIPA is subject to certain conditions, including approval by
TSXV, which is still outstanding. Accordingly, the Transaction described herein is subject to risk of completion.

 The
MIPA contains customary representations, warranties, indemnification obligations and agreements of the Parties.

 Disposition
of certain Frankly Media LLC, assets

 The
Company announced that on November 9, 2023, GameSquare and its Frankly Media LLC subsidiary ("Frankly") entered into a definitive
agreement with SoCast, Inc. ("SoCast") for SoCast's acquisition of Frankly's radio business assets. Frankly provides
an online content management platform and related content services for approximately 700+ radio stations. In exchange for the Frankly
technology platform and customer accounts, SoCast has agreed to pay Frankly $3.3 million, which includes $2.8 million upon closing of
the transaction and contingent consideration receivable, with a transaction closing date fair value of $0.5 million, based on future
revenue derived from the radio assets. The transaction closed on December 29, 2023.

 Convertible
Note Refinance

 On
December 29, 2023, the Company retired the convertible debenture in the principal amount of $5.0 million, dated February 24, 2021, issued
to EB Acquisition Company, LLC ("EB") by the Company (the "EB Debenture"), and the related Security Agreements
between Frankly Media, Frankly Co., Franky, Inc., and EB dated January 6, 2020, and between the Company and EB dated December 1, 2020;
and the Company entered into a $5.8 million convertible note (the "Convertible Note") and security agreement (the "Security
Agreement"), dated as of December 29, 2023, with EB affiliate, King Street Partners LLC ("King Street"), that bears
interest at 12.75%, has a two-year term, and is convertible at the holder's option into common shares of Company at a price of
$5.00 per share (subject to standard anti-dilution provisions).

 Completion
of the plan of Arrangement

 On
April 11, 2023, the Company announced that it completed its previously announced plan of arrangement (the "Arrangement")
with Engine Gaming and Media, Inc. ("Engine") resulting in Engine acquiring all of the issued and outstanding securities
of the Company. As a result of the completion of the Arrangement, GameSquare Esports's common shares have been halted from trading
on the Canadian Securities Exchange and will be subsequently delisted. The combined entity is now known as GameSquare Holdings, Inc.
("GameSquare Holdings") with shares traded on the Nasdaq Capital Market and TSX Venture Exchange under the ticker symbol
GAME.

 Prior
to the closing of the Arrangement, Engine closed a public offering of 7,673,000 subscription receipts (the "Subscription Receipts")
at an issue price of $1.25 per Subscription Receipt, including the partial exercise of an over-allotment option, for aggregate gross
proceeds of $9.6 million. As a result of the closing of the Arrangement, the Subscription Receipts were consolidated on the same ratio
as the Consolidation (as discussed below) and automatically exchanged on a one-to-one basis for common shares of the GameSquare Holdings
without any further action on the part of the holder and without payment of additional consideration. GameSquare Holdings enacted a reverse
stock split to consolidate (the "Consolidation") the outstanding common shares on the basis of one new common share for every
four existing common shares. As a result, GameSquare Holdings had approximately 12.9 million shares outstanding following completion
of the Consolidation, the Arrangement and the conversion of the Subscription Receipts.

 Pursuant
to the Arrangement, all the common shares of the Company were acquired in exchange for post consolidation common shares of GameSquare
Holdings based on a 1-for-0.020655 exchange ratio.

 The
management team of GameSquare Holdings includes Justin Kenna as Chief Executive Officer, Lou Schwartz as President, Mike Munoz as Chief
Financial Officer, Sean Horvath as Chief Revenue Officer, Tyler "Ninja" Blevins as Chief Innovation Officer, John Wilk as
General Counsel, and Matt Ehrens as Chief Technology Officer.

 Other
Highlights

 On
March 24, 2023 and December 29, 2023, an aggregate of 72,409 shares were issued in settlement of outstanding amounts payable of $0.2
million.

 On
April 11, 2023, 6,380,083 shares of the Company were issued for the completion of the Arrangement (see Note 4).

 On
April 3 and 10, 2023, an aggregate of 29,929 shares of the Company were issued to settle legal matters.

 On
March 10, 2023, 29,359 common shares of the Company were issued for contingent consideration on the acquisition of Cut+Sew (see Note
22(a)).

the year ended December 31, 2023, 125,148 shares were issued upon the vesting of RSUs.

 Results
of Operations:

 The
following table summarizes our results of operations for the years ended December 31, 2023 and 2022.

 2023

 2022

 Variance

 $
 51,997,642

 $
 28,082,009

 $
 23,915,633

 Cost of revenue

 38,551,874

 18,425,393

 20,126,481

 13,445,768

 9,656,616

 3,789,152

 Operating expenses:

 General and administrative

 21,553,039

 17,450,879

 4,102,160

 Selling and marketing

 6,481,027

 7,089,595

 (608,568
)

 Research and development

 2,149,529

 -

 2,149,529

 Depreciation and amortization

 3,294,015

 2,306,661

 987,354

 Restructuring charges

 545,456

 -

 545,456

 Goodwill and intangible asset impairment

 7,024,000

 701,423

 6,322,577

 Other operating expenses

 3,065,021

 355,417

 2,709,604

 Total operating expenses

 44,112,087

 27,903,975

 16,208,112

 Loss from continuing operations

 (30,666,319
)

 (18,247,359
)

 (12,418,960
)

 Other income (expense), net:

 Interest expense

 (696,028
)

 (169,570
)

 (526,458
)

 Loss on debt extinguishment

 (2,204,737
)

 -

 (2,204,737
)

 Change in fair value of convertible debt carried at fair value

 538,354

 -

 538,354

 Change in fair value of investment

 (515,277
)

 -

 (515,277
)

 Change in fair value of warrant liability

 968,757

 -

 968,757

 Arbitration settlement reserve

 1,041,129

 -

 1,041,129

 Other income (expense), net

 (103,463
)

 35,273

 (138,736
)

 Total other income (expense), net

 (971,265
)

 (134,297
)

 (836,968
)

 Loss from continuing operations before income taxes

 (31,637,584
)

 (18,381,656
)

 (13,255,928
)

 Income tax benefit

 55,096

 304,369

 (249,273
)

 Net loss from continuing operations

 (31,582,488
)

 (18,077,287
)

 (13,505,201
)

 Net income (loss) from discontinued operations

 300,061

 (29,841
)

 329,902

 (31,282,427
)

 (18,107,128
)

 (13,175,299
)

 Net income attributable to non-controlling interest

 -

 (13,718
)

 13,718

 Net loss attributable to GameSquare Holdings, Inc.

 $
 (31,282,427
)

 $
 (18,120,846
)

 $
 (13,161,581
)

 The
following table disaggregates revenue by revenue stream and geographic region for the years ended December 31, 2023, and 2022.

 Year ended December 31, 2023

 Segment

 USA

 Spain

 Total

 Teams

 $
 -

 $

 $
 -

 $

 2,853,754

 8,667,147

 -

 11,520,901

 -

 27,594,868

 2,187,612

 29,782,480

 Total Revenue

 2,853,754

 46,956,276

 2,187,612

 51,997,642

 Cost of sales

 Teams

 -

 7,350,015

 -

 7,350,015

 2,065,375

 6,012,551

 -

 8,077,926

 -

 22,879,308

 244,625

 23,123,933

 Total Cost of sales

 2,065,375

 36,241,874

 244,625

 38,551,874

 Teams

 -

 3,344,246

 -

 3,344,246

 788,379

 2,654,596

 -

 3,442,975

 -

 4,715,560

 1,942,987

 6,658,547

 Total Gross profit

 $
 788,379

 $
 10,714,402

 $
 1,942,987

 $
 13,445,768

 Year ended December 31, 2022

 Segment

 USA

 Mexico

 Total

 Teams

 $
 -

 $
 9,490,318

 $
 99,848

 $
 9,590,166

 4,976,874

 13,514,969

 -

 18,491,843

 Total Revenue

 4,976,874

 23,005,287

 99,848

 28,082,009

 Cost of sales

 Teams

 -

 5,143,592

 51,951

 5,195,543

 4,035,575

 9,194,275

 -

 13,229,850

 Total Cost of sales

 4,035,575

 14,337,867

 51,951

 18,425,393

 Teams

 -

 4,346,726

 47,897

 4,394,623

 941,299

 4,320,694

 -

 5,261,993

 Total Gross profit

 $
 941,299

 $
 8,667,420

 $
 47,897

 $
 9,656,616

 Revenues
for the year ended December 31, 2023, were $52.0 million, in comparison to $28.1 million for the year ended December 31, 2022. The increase
was primarily related to $29.8 million attributed to Engine post-acquisition which is represented in the SaaS + Advertising segment in
the above table.

 Team

 Team
revenue for the year ended December 31, 2023, was $10.7 million, in comparison to $9.6 million for the year ended December 31, 2022.
The increase was primarily related to increased sticker revenue over the prior year.

revenue for the year ended December 31, 2023, was $11.5 million, in comparison to $18.5 million for the year ended December 31, 2022.
The decrease was primarily due to a material drop off in brand and advertising spend that impacted many in the industry and led to mass
layoffs.

 Software-as-a-service
("SaaS") + Advertising revenue

 SaaS
+ Advertising revenue for the year ended December 31, 2023, was $29.8 million, in comparison to zero for the year ended December 31,
2022. The increase was due to the acquisition of Engine and revenue contribution from April 11, 2023 to December 31, 2023.

 Update
on 2023 Guidance

 The
Company had previously announced, subsequent to the closing of the Arrangement, pro-forma annual revenue guidance of $75 million. When
including Engine revenue for the period from January 1, 2023 to April 11, 2023 of $8.8 million, pro-forma 2023 revenue amounted to approximately
$61 million. The miss of $14 million was primarily driven by the decline in Agency revenue for reasons explained above.

 Cost
of Sales

 Cost
of sales for the year ended December 31, 2023, was $38.6 million, in comparison to $18.4 million for the year ended December 31, 2022.
The increase of $20.1 million was primarily due the acquisition of Engine and cost of sales from April 11, 2023 to December 31, 2023
of $23.1 million. This was partially offset by a $3.0 million reduction in cost of sales primarily driven by the reduction in Agency
revenue explained above.

 Operating
expenses

 General
and administrative

 General
and administrative expenses for the year ended December 31, 2023, were $21.6 million, in comparison to $17.5 million for the year ended
December 31, 2022. The $4.1 million increase was primarily the result of an increase in expenses
from the operations of Engine that did not impact the comparative period.

 Selling
and marketing

 Selling
and marketing expenses for the year ended December 31, 2023, were $6.5 million, in comparison to $7.1 million for the year ended December
31, 2022. The $0.6 million decrease was primarily due to our cost reduction initiatives in 2023.
In the 2022 period, significant investments were made by the Company to drive sales and align with sponsor deliverables including in
person events. The decrease is offset by an increase in expenses from the operations of Engine that did not impact the comparative
period.

 Research
and development

 Research and development expenses for the year ended
December 31, 2023, were $2.1 million, in comparison to $0 for the year ended December 31, 2022. The $2.1 million increase was the result
of an increase in expenses from the operations of Engine that did not impact the comparative period.

 Depreciation
and amortization

 Depreciation
and amortization for the year ended December 31, 2023, were $3.3 million, in comparison to $2.3 million for the year ended December 31,
2022. The $1.0 million increase was primarily the result of an increase in expenses from the operations of Engine that did not impact
the comparative period.

 Restructuring
charges

 Restructuring
charges for the year ended December 31, 2023, were $0.5 million, in comparison to zero for the year ended December 31, 2022. The $0.5
million increase was due cost reduction initiatives in 2023 and related restructuring of operations with the integration of GameSquare
and Engine.

and intangible asset impairment

and intangible asset impairment expense was $7.0 million for the year ended December 31, 2023, in comparison to $0.7 million for the
year ended December 31, 2022. After considering the impact of the sale of the Frankly radio assets on projected sales and assumptions
of future growth, as part of our 2023 annual impairment assessment, we concluded goodwill related to Frankly was impaired. We recognized
an impairment charge of $7.0 million for the year ended December 31, 2023. We impaired the remaining Code Red intangible assets by $0.7
million during the year ended December 31, 2022, to reflect continued delays in growing its gross and net margins as expected at the
time of the acquisition in March 2020.

 Other
operating expenses

 Other
operating expenses for the year ended December 31, 2023, were $3.1 million, in comparison to $0.4 million for the year ended December
31, 2022. The $2.7 million increase was primarily due to transaction costs of $3.0 million from the Engine acquisition, in-process acquisition
of FaZe Clan, and disposal of Frankly radio assets, that did not impact the comparative period.

 Other
income and expenses

 Interest
expense

 Interest
expense for the year ended December 31, 2023 was $0.7 million, in comparison to $0.2 million for the year ended December 31, 2022. The
$0.5 million increase was attributable to interest expense on convertible debt acquired in connection with the acquisition of Engine
and line of credit that was closed in September 2023. We did not have comparable debt instruments outstanding during the comparative
period.

 Loss
on debt extinguishment

 We
recognized a loss on debt extinguishment of $2.2 million during the year ended December 31, 2023, due to the extinguishment of the EB
CD as part of the Convertible Note Refinance. There were no debt extinguishments during the year ended December 31, 2022.

in fair value of convertible debt carried at fair value

in fair value of convertible debt gain for the year December 31, 2023, was $0.5 million in comparison to zero for the year ended December
31, 2022. Prior to the Engine acquisition, we did not have any convertible debt. The change represents adjusting the convertible debt
to fair value at the end of the reporting period, primarily driven by changes in our share price at the end of the period.

in fair value of investment

in fair value of investment for the year December 31, 2023, was $0.5 million in comparison to zero for the year ended December 31, 2022.
Prior to the Engine acquisition, we did not have any investments. The change represents an observable price change in our investment
accounted for under the measurement alternative of ASC 321 during the year ended December 31, 2023.

in fair value of warrant liability

in fair value of warrant liability gain was $1.0 million for the year ended December 31, 2023, versus zero in the comparative period.
Prior to the Engine acquisition, we did not have any liability measured warrants. The gain represents adjusting the liability measured
warrants to fair value at the end of the reporting period, primarily driven by changes in our share price at the end of the period.

 Arbitration
settlement reserve

 Arbitration
settlement reserve was $1.0 million gain for the year ended December 31, 2023, compared to zero in the comparative period. Prior to the
Engine acquisition, we did not have an arbitration settlement reserve. The change represents adjusting the arbitration settlement reserve
to fair value at the end of the reporting period, primarily driven by changes in our share price at the end of the period.

tax benefit

tax benefit for the year ended December 31, 2023, was $55 thousand, in comparison to $0.3 million for the year ended December 31, 2022.
The change was trivial between the two periods and relates to change in deferred tax liabilities during the year.

 Net
income (loss) from discontinued operations

 Net
income from discontinued operations for the year ended December 31, 2023, was $0.3 million, in comparison to a net loss of $30 thousand
for the year ended December 31, 2022. The net income in 2023 was primarily comprised of gains from the abandoned business operations
of Winview, a former operating entity of Engine. In the third quarter of 2023, litigation with the founder of the patent portfolio held
by Winview was settled. In connection with that settlement, promissory notes issued by Winview were forgiven. The net loss in 2022 was
related to the loss on the disposition of Biblos.

 Management's
use of Non-GAAP Measures

 This
MD&A contains certain financial performance measures, including "EBITDA" and "Adjusted EBITDA," that are
not recognized under accounting principles generally accepted in the United States of America ("GAAP") and do not have a
standardized meaning prescribed by GAAP. As a result, these measures may not be comparable to similar measures presented by other companies.
For a reconciliation of these measures to the most directly comparable financial information presented in the Financial Statements in
accordance with GAAP, see the section entitled "Reconciliation of Non-GAAP Measures" below.

 We
believe EBITDA is a useful measure to assess the performance of the Company as it provides more meaningful operating results by excluding
the effects of expenses that are not reflective of our underlying business performance and other one-time or non-recurring expenses.
We define "EBITDA" as net income (loss) before (i) depreciation and amortization; (ii) income taxes; and (iii) interest expense.

 Adjusted
EBITDA

 We
believe Adjusted EBITDA is a useful measure to assess the performance of the Company as it provides more meaningful operating results
by excluding the effects of expenses that are not reflective of our underlying business performance and other one-time or non-recurring
expenses. We define "Adjusted EBITDA" as EBITDA adjusted to exclude extraordinary items, non-recurring items and other non-cash
items, including, but not limited to (i) share based compensation expense, (ii) transaction costs related to merger and acquisition activities,
(iii) arbitration settlement reserves and other non-recurring legal settlement expenses, (iv) restructuring costs, primarily comprised
of employee severance resulting from integration of acquired businesses, (v) impairment of goodwill and intangible assets, (vi) gains
and losses on extinguishment of debt, (vii) change in fair value of assets and liabilities adjusted to fair value on a quarterly basis,
and (viii) gains and losses from discontinued operations.

 Reconciliation
of Non-GAAP Measures

 A
reconciliation of Adjusted EBITDA to the most directly comparable measure determined under US GAAP is set out below.

 2023

 2022

 $
 (31,282,427
)

 $
 (18,107,128
)

 Interest expense

 696,028

 169,570

 Income tax benefit

 (55,096
)

 (304,369
)

 Amortization and depreciation

 3,294,015

 2,306,661

 Share-based payments

 1,735,630

 1,599,909

 Change in provision for reclamation deposit

 -

 16,895

 Transaction costs

 3,019,373

 -

 Arbitration settlement reserve

 (1,041,129
)

 -

 Restructuring costs

 545,456

 -

 Legal settlement

 186,560

 -

 Gain on disposition of assets

 (40,794
)

 -

 Impairment on goodwill and intangibles

 7,024,000

 701,423

 Loss on extinguishment of debt

 2,204,737

 -

 Change in fair value of contingent consideration

 45,648

 338,522

 Change in fair value of investment

 515,277

 -

 Change in fair value of warrant liability

 (968,757
)

 -

 Change in fair value of convertible debt carried at fair value

 (538,354
)

 -

 Loss on disposition of assets available for sale

 -

 29,841

 Gain from discontinued operations

 (300,061
)

 -

 Adjusted EBITDA

 $
 (14,959,894
)

 $
 (13,248,676
)

 Liquidity
and Capital Resources

 Overview

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

 Our
approach to managing liquidity risk is to ensure that we will have sufficient liquidity to meet liabilities when due. Our liquidity and
operating results may be adversely affected if our access to the capital market is hindered, whether as a result of a downturn in stock
market conditions generally or as a result of conditions specific to the Company.

 We
regularly evaluate our cash position to ensure preservation and security of capital as well as maintenance of liquidity. As we do not
presently generate sufficient revenue to cover costs, managing liquidity risk is dependent upon the ability to reduce monthly operating
cash outflow and secure additional financing. The recoverability of the carrying value of the assets and our continued existence is dependent
upon our ability to raise financing in the near term, and ultimately the achievement of profitable operations.

 As
of December 31, 2023, we had a working deficit of $13.9 million, compared to $0.4 million as of December 31, 2022. The decrease in the
working capital resulted mostly from the liabilities related to the Engine acquisition as well as from the Company's use of cash
in operating activities as described in the cash flows section. We have not yet realized profitable operations and have incurred significant
losses to date resulting in a cumulative deficit of $73.4 million as of December 31, 2023 (December 31, 2022: $42.1 million).

 We
have plans to raise additional funds. 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.

 Our
ability to maintain sufficient liquidity could be affected by various risks and uncertainties including, but not limited to, our ability
to raise additional funds through financing, those related to consumer demand and acceptance of our products and services, our ability
to collect payments as they become due, achieving our internal forecasts and objectives, the economic conditions of the United States
and abroad.

 Sources
and Uses of Cash

 Since
inception, we have financed our operations primarily by issuing equity and debt, including the proceeds of the acquisition of Engine.
As of December 31, 2023, our principal sources of liquidity were our cash in the amount of $3.0 million, available borrowings under our
line of credit as well as new debt and/or equity issuances.

 As
discussed in recent developments above, we obtained gross proceeds of $10.0 million from the PIPE Financing on March 7, 2024.

 Operating
Activities

 The
Company used cash of $16.1 million in operating activities during the year ended December 31, 2023, compared with $11.8 million in the
comparative period. The use of funds in operating activities is described in the Results of Operations section above.

 Investing
Activities

 Net
cash provided by investing activities was $14.1 million for the year ended December 31, 2023, consisting of $11.3 million from the acquisition
of Engine coupled with proceeds of $2.8 million from the disposal of the Frankly radio assets.

 Net
cash provided by investing activities was $18 thousand for the year ended December 31, 2022.

 Financing
Activities

 Net
cash provided by financing activities was $4.0 million for the year ended December 31, 2023, which was primarily due to $4.5 million
of proceeds from the line of credit and $0.2 million of proceeds from promissory notes payable, offset by $0.8 million of payments on
the credit facility.

 Net
cash provided by financing activities was $6.8 million for the year ended December 31, 2022, which was primarily due to $6.3 million
of proceeds from private placements and $0.8 million proceeds from the credit facility, offset by $0.1 million of payments on promissory
note, and $0.1 million of share issuance costs.

 Commitments
and Contingencies

 Management
commitments

 The
Company is party to certain management contracts. These contracts require payments of approximately $0.6 million to be made upon the
occurrence of a change in control and termination without cause to certain officers of the Company. The Company is also committed to
payments upon termination without cause of approximately $1.1 million pursuant to the terms of these contracts. As a triggering event
has not taken place, these amounts have not been recorded in these consolidated financial statements.

 Former
activities

 The
Company was previously involved in oil and gas exploration activities in Canada, the United States and Colombia. The Company ceased all
direct oil and gas exploration activities in 2014. While management estimated that the exposure to additional liabilities from its former
oil and gas activities over and above the reclamation deposits held in trust for the Alberta Energy Regulator of $0.3 million to be remote,
the outcome of any such contingent matters is inherently uncertain.

 Litigation
and arbitration

 We
are subject to various claims, lawsuits and other complaints arising in the ordinary course of business. We record 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 our financial condition, operations,
or liquidity.

 Off-Balance
Sheet Arrangements

 We
do not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on the
results of operations or financial condition of the Company including, without limitation, such considerations as liquidity and capital
resources.

 Critical
Accounting Policies and Estimates

 Our
discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which
have been prepared in accordance with GAAP. The preparation of our consolidated financial statements and related disclosures requires
us to make estimates, assumptions, and judgments as of the balance sheet date that affect the reported amounts of assets, liabilities,
revenues, costs and expenses and related disclosures. Our actual results may differ from these estimates under different assumptions
and conditions.

recognition

is measured based on the consideration specified in a contract with a customer. The Company recognizes revenue when it transfers control
of its services to a customer.

 The
following provides information about the nature and timing of the satisfaction of performance obligations in contracts with customers,
including significant payment terms and related revenue recognition policies:

 Talent
representation service revenues

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

 Influencer
promotional fees

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

 Consulting
fees and other revenues

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

 Software-as-a-service

 The
Company enters into license agreements with customers for its content management system, video software, and mobile applications (Frankly),
e-sports data platform (Stream Hatchet) and an influencer marketing platform (SideQik). These license agreements, generally non-cancellable,
without paying a termination penalty, and multiyear, provide the customer with the right to use the Company's application solely
on a Company-hosted platform or, in certain instances, on purchased encoders. The license agreements also entitle the customer to technical
support.

from these license agreements is recognized ratably over the license term. Early termination fees are recognized when a customer ceases
use of agreed upon services prior to the expiration of their contract. These fees are recognized in full on the date the customer has
completed their migration of the Company's solutions and there is no continuing service obligation to the customer.

 The
Company charges its customers for the optional use of its content delivery network to stream and store videos. The revenue is recognized
as earned based on the actual usage because it has stand-alone value and delivery is in control of the customer. The Company also charges
its customers for the use of its ad serving platform to serve ads under local advertising campaigns. The Company reports revenue as earned
based on the actual usage.

 Advertising

 Under
national advertising agreements with advertisers, the Company sources, creates, and places advertising campaigns that run across the
Company's network of publisher sites. National advertising revenue, net of third-party costs, is shared with publishers based on
their respective contractual agreements. The Company invoices national advertising amounts due from advertisers and remits payments to
publishers for their share. Depending on the agreement with the publisher, the obligation to remit payment to the publisher is based
on either billing to the advertiser or the collection of cash from the advertiser.

 National
advertising revenue is recognized in the period during which the ad impressions are delivered. The Company reports revenue earned through
national advertising agreements either on a net or gross basis. The Company applies judgement in recognizing revenue earned through national
advertising agreements on a net or gross basis based on the criteria as disclosed below.

 Under
national advertising agreements wherein the Company does not bear inventory risk and only has credit risk on its portion of the revenue,
national advertising revenues are accounted for on a net basis and the publisher is identified as the customer. In select national advertising
agreements with its publishers, the Company takes on inventory risk and additional credit risk. Under these agreements, the Company either
a) provides the publisher with a guaranteed minimum gross selling price per advertising unit delivered, wherein the greater of the actual
selling price or guaranteed minimum selling price is used in determining the publisher's share or b) provides the publisher with
a fixed rate per advertising unit delivered, wherein the publisher is paid the fixed rate per advertising unit delivered irrespective
of the actual selling price. Under these national advertising agreements, national advertising revenues are accounted for on a gross
basis with the advertiser identified as the customer and the publisher identified as a supplier, with amounts billed to the advertiser
reported as revenue and amounts due to the publisher reported as a revenue sharing expense, within expenses.

 Also
included in advertising revenue is advertising revenue generated by the Company's various owned and operated properties.

 The
Company assesses its revenue arrangements against specific criteria in order to determine if it is acting as principal or agent. When
the Company acts in the capacity of an agent rather than as the principal in a transaction, the revenue recognized is the net amount
of commission made by the Company.

revenue consists of customer advances for Company services to be rendered that will be recognized as income in future periods.

taxes

tax on the profit or loss for the periods presented comprises current and deferred tax. Income tax is recognized in profit or loss except
to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity.

 Current
tax expense is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at year
end, adjusted for amendments to tax payable with regards to previous years.

tax is provided using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for the following temporary
differences: the initial recognition of goodwill; the initial recognition of assets or liabilities in a transaction that is not a business
combination and that affects neither accounting nor taxable profit; and differences relating to investments in subsidiaries, associates,
and jointly controlled entities to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax
provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates
enacted or substantively enacted at the financial position reporting date applicable to the period of expected realization or settlement.

 A
deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the
asset can be utilized.

tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities
and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and
liabilities on a net basis.

 Investments

 Investments in and advances to entities or joint ventures
in which the Company has significant influence, but less than a controlling financial interest, are accounted for using the equity method.
Significant influence is generally presumed to exist when the Company owns an interest between 20% and 50% and exercises significant influence.

 In accordance with ASC 321 " Investments—Equity
Securities " ("ASC 321"), equity securities which the Company has no significant influence (generally less than a
20% ownership interest) with readily determinable fair values are accounted for at fair value based on quoted market prices. Equity securities
without readily determinable fair values are accounted for either at fair value or using the measurement alternative which is at cost
minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a
similar investment of the same issuer. All gains and losses on investments in equity securities are recognized in the consolidated statements
of operations and comprehensive loss.

 Equity securities accounted for under the measurement alternative, the
Company assesses the securities for impairment indicators, at least annually, or more frequently if there are any indicators of impairment.
If the assessment indicates that the fair value of the investment is less than its carrying value, the investment is impaired and an impairment
charge equal to the excess of the carrying value over the related fair value of the investment will be recorded.

 Business
combinations

 The
results of businesses acquired in a business combination are included in the Company's consolidated financial statements from the
date of the acquisition. The Company uses the acquisition method of accounting and allocates the purchase price to the identifiable assets
and liabilities of the relevant acquired business at their acquisition date fair values. Any excess consideration over the fair value
of assets acquired and liabilities assumed is recognized as goodwill. The allocation of the purchase price in a business combination
requires the Company to perform valuations with significant judgment and estimates, including the selection of valuation methodologies,
estimates of future revenue, costs and cash flows, discount rates and selection of comparable companies. The Company engages the assistance
of valuation specialists in concluding on fair value measurements in connection with determining fair values of assets acquired and liabilities
assumed in a business combination. As a result, during the measurement period, which may be up to one year from the acquisition date,
the Company records adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion
of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any
subsequent adjustments are recorded to the consolidated statements of operations. Transaction costs associated with business combinations
are expensed as incurred and are included in selling, general and administrative expense in the consolidated statements of operations.

 Impairment
of long-lived assets and goodwill

 Long-lived
assets consist of property and equipment, right-of-use assets and intangible assets. The Company assesses for impairment of asset groups,
including intangible assets, at least annually, or more frequently if there are any indicators for impairment.

and indefinite life intangible assets are tested for impairment annually or when there is an indication that the asset may be impaired.

 When
a triggering event that occurred during the reporting period is identified, or when the annual impairment test is required, the Company
may first assess qualitative factors to determine whether it is more likely than not that goodwill is impaired. If the Company determines
it is more likely than not that goodwill is not impaired, an impairment test is not necessary. If an impairment test is necessary, management
estimates the fair value of the Company. If the carrying value of the Company exceeds its fair value, goodwill is determined to be impaired,
and an impairment charge equal to the excess of the carrying value over the related fair value of the Company will be recorded. If the
qualitative assessment indicates that it is more likely than not that goodwill is not impaired, further testing is unnecessary.

 Fair value option
for convertible debt

 The Company elected the Fair Value Option ("FVO") for recognition
of its convertible debt as permitted under ASC 825, Financial Instruments. Under the FVO, the Company recognizes the convertible
debt at fair value with changes in fair value recognized in earnings. The FVO may be applied instrument by instrument, but it is irrevocable.
As a result of applying the FVO, any direct costs and fees related to the convertible debt is recognized in operating expense in the consolidated
statements of operations and comprehensive loss as incurred and not deferred. Changes in fair value of the convertible debt is recognized
as a separate line in the consolidated statements of operations and comprehensive loss.

 Contingencies

 The
Company estimates loss contingencies in accordance with ASC 450-20, Loss Contingencies, which states that a loss contingency shall
be accrued by a charge to income if both of the following conditions are met: (i) information available before the consolidated financial
statements are issued or are available to be issued indicates that it is probable that a liability had been incurred at the date of the
consolidated financial statements and (ii) the amount of loss can be reasonably estimated. Management regularly evaluates current information
available to determine whether such accruals should be adjusted and whether new accruals are required.

 Recent
Accounting Pronouncements

 See
Note 2 to our consolidated financial statements included in this Annual Report on Form 10-K for a description of recently adopted accounting
pronouncements and recently issued accounting pronouncements not yet adopted, the timing of their adoptions and our assessment, to the
extent we have made one, of their potential impact on our financial condition and results of operations.

 ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 We
are exposed to a variety of market and other risks, including the effects of changes in interest rates and inflation, as well as risks
to the availability of funding sources, and specific asset risks.

 Market
risk represents the risk of loss that may impact our financial position, results of operations, or cash flows due to adverse changes
in financial market prices, including interest rate risk, foreign currency exchange rate risk, and other relevant market or price risks.
We do not use derivative instruments to mitigate this risk.

 Interest
rate risk

 Interest
rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market
interest rates. We are exposed to fair value risk with respect to debt which bears interest at fixed rates.

 Foreign
currency risk

 Our
exposure to the risk of changes in foreign exchange rates relates primarily to fluctuations of financial instruments related to cash,
accounts and other receivables, and accounts payable denominated in Euros, UK pound sterling as well as debt denominated in Canadian
dollars.

 Item
8. Financial Statements and Supplementary Data

to the Consolidated Financial Statements

 Report
 of Independent Registered Public Accounting Firm (PCA
 OB: 6644)

 Consolidated Balance Sheets

 Consolidated Statements of Operations and Comprehensive Loss

 Consolidated Statements of Changes in Shareholders' Equity

 Consolidated Statements of Cash Flows

 Notes to Consolidated Financial Statements

 F- 1

 REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 To the B oard
of Directors and Stakeholders of GameSquare Holdings, Inc.

 Opinion
on the Financial Statements

 We
have audited the accompanying consolidated balance sheets of GameSquare Holdings, Inc. (the Company or GSQ) as of December 31, 2023 and
2022, and the related consolidated statements of operations, comprehensive loss, shareholders' equity, and cash flows for each
of the years in the two-year period ended December 31, 2023, and the related notes (collectively referred to as the financial statements).
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December
31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31,
2023, in conformity with accounting principles generally accepted in the United States of America.

 Material
Uncertainty Related to Going Concern

 The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern. As discussed in Note 1(b) to the financial statements, the Company has suffered
recurring losses from operations and current liabilities exceed current assets (or had a working capital deficiency of $13.9 million)
that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also
described in Note 1(b). The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 Basis
for Opinion

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

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

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

 knowing
 you.

 Kreston
 GTA LLP is a partnership

 registered
 in Ontario, Canada.

 8953-8965
 Woodbine Avenue

 Markham,
 Ontario, L3R 0J9

 Wellington Street

 Aurora,
 Ontario, L4G 1H8

 krestongta.com

 An
 independent member of the

 Kreston
 Global network

 F- 2

 Critical
Audit Matters

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

 Reverse
acquisition of Engine Gaming and Media, Inc.

 Description
of the Matter

 As
discussed in Note 4(a) to the financial statements, on April 11, 2023, GSQ completed its plan of arrangement with Engine Gaming and Media,
Inc. ("Engine") resulting in Engine acquiring 100% of the issued and outstanding securities of GSQ. The transaction was accounted
for using the acquisition method of accounting under ASC 805, Business Combinations with GSQ being treated as the acquiring entity for
accounting and financial reporting purposes. The total purchase consideration amounted to $41.2 million and resulted in recognition of
goodwill and intangible assets in the amount of $25.6 million and $17.8 million respectively.

 A
key accounting judgment in evaluating the transaction is the determination of accounting acquirer. Given the complexity of evaluating
the applicable accounting guidance, this aspect of the accounting for the transaction required especially subjective auditor judgment
and an increased extent of effort.

 The
Company recognized and measured identifiable assets acquired and liabilities assumed in the acquiree at their fair values on the Company's
consolidated balance sheets, and the difference between the purchase consideration and the fair value of identifiable net assets acquired
is recorded as goodwill. The determination of fair value of each asset acquired and liability assumed by management requires judgment
and is based on estimated cash flow projections that utilize available market information, including discount rates. Performing audit
procedures to evaluate the reasonableness of such assumptions required a high degree of auditor judgment and an increased extent of effort,
including the need to involve valuation specialists.

 How
the Critical Audit Matter Was Addressed in the Audit

 Our
audit procedures related to our evaluation of the Company's determination of the accounting acquirer and the fair value of the
assets acquired and liabilities assumed in the transaction included the following, among others:

 We
 performed a walkthrough to understand Company's controls over the accounting for the transaction which included understanding
 of management's controls related to the conclusion on the accounting acquirer and related to the management's engagement
 and review of the fair values of the assets acquired and liabilities assumed.

 Evaluated
 management's conclusion on the determination of accounting acquirer.

 With
 the assistance of valuation specialists, we evaluated the reasonableness of the (1) valuation methodology, (2) significant inputs
 such and discount rate, (3) tested the mathematical accuracy of the Company's valuation models.

 Evaluated
 the reasonableness of management's assumptions including revenue growth rates.

 Testing
 the fair values of assets acquired and liabilities assumed as at acquisition date.

 F- 3

 Critical Audit Matters (continued)

 Impairment
of goodwill, intangible assets and other assets

 Description
of the Matter

 The Company tests goodwill for impairment annually, as of December, or
more frequently if events or circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its
carrying amount. Reporting units were tested for impairment by comparing their fair values to their carrying values. As discussed in Note
7 to the consolidated financial statements, as a result of the impairment assessment, the Company recorded an impairment loss of $7 million
related to the Frankly reporting unit. The carrying value of goodwill as of December 31, 2023 was $16.3 million, of which $8.5 million
related to the Frankly reporting unit. Auditing the Company's goodwill impairment assessment was complex and required significant
auditor judgment due to the significant estimation uncertainty in determining the fair value of the respective reporting units. Management
used a combination of income- and market-based approaches to estimate the fair value of each reporting unit. A significant emphasis is
placed on the appropriateness of the estimate considerations used by management to determine the fair value of reporting units due to
the sensitivity of the fair value to the underlying assumptions. The significant assumptions include forecasted revenues and the discount
rate used to discount future cash flows. These significant assumptions related to the fair value of these reporting units are forward-looking
and could be affected by future economic and market conditions.

 How
the Critical Audit Matter Was Addressed in the Audit

 In
testing the valuation of each reporting unit, we performed audit procedures that included, among others:

 Obtaining
 an understanding of internal controls over the Company's process for determining the fair value of reporting units used in
 the goodwill impairment assessment. This included controls over management's development of the above-described assumptions
 used in the valuation model applied.

 Evaluating
 the Company's use of the income- and market-based approaches and testing the significant assumptions used in the model, as
 described above.

 We
 evaluated the completeness and accuracy of underlying data used in supporting the assumptions and estimates.

 We
 evaluated the reasonableness of projected revenue growth used within the valuations against analyst expectations, industry trends,
 market trends, and other market information.

 We
 involved valuation specialists to assist in evaluating the Company's use of the income-and market-based approaches and selection
 of the discount rate. Our valuation specialists evaluated the discount rate by comparing it against a discount rate range that was
 independently developed using publicly available market data for comparable entities.

 /s/
 Kreston GTA LLP

 We
have served as the Company's auditor since 2020.

 Markham,
Ontario, Canada

 April

 F- 4

Balance Sheets

 Assets

 Cash

 $
 2,945,373

 $

 Restricted cash

 47,465

 -

 Accounts receivable, net

 16,459,684

 8,114,542

 Government remittances

 1,665,597

 107,660

 Contingent consideration, current

 207,673

 -

 Prepaid expenses and other current assets

 916,740

 897,145

 Total current assets

 22,242,532

 10,096,760

 Investment

 2,673,472

 -

 Contingent consideration, non-current

 293,445

 -

 Property and equipment, net

 2,464,633

 3,001,883

 16,303,989

 -

 Intangible assets, net

 18,574,144

 4,609,837

 Right-of-use assets

 2,159,693

 2,495,333

 Total assets

 $
 64,711,908

 $
 20,203,813

 Liabilities and Shareholders' Equity

 Accounts payable

 $
 23,493,472

 $
 4,848,854

 Accrued expenses and other current liabilities

 5,289,149

 3,180,208

 Consideration payable

 -

 260,000

 Players liability account

 47,465

 -

 Deferred revenue

 1,930,028

 1,092,982

 Current portion of operating lease liability

 367,487

 336,229

 Credit facility payable

 -

 802,328

 Line of credit

 4,518,571

 -

 Warrant liability

 102,284

 -

 Arbitration reserve

 428,624

 -

 Total current liabilities

 36,177,080

 10,520,601

 Convertible debt carried at fair value

 8,176,928

 -

 Operating lease liability

 1,994,961

 2,362,448

 Deferred tax liability

 -

 55,096

 Total liabilities

 46,348,969

 12,938,145

 Commitments and contingencies (Note 19)

 Preferred stock ( no par value, unlimited shares authorized, zero shares issued and outstanding as of December 31, 2023 and 2022, respectively)

 -

 -

 Common stock ( no par value, unlimited shares authorized, 12,989,128 and 6,352,270 shares issued and outstanding as of December 31, 2023 and 2022, respectively)

 -

 -

 Additional paid-in capital

 91,915,169

 49,672,443

 Accumulated other comprehensive loss

 ( 132,081
)

 ( 269,053
)

 Accumulated deficit

 ( 73,420,149
)

 ( 42,137,722
)

 Total shareholders' equity

 18,362,939

 7,265,668

 Total liabilities and shareholders' equity

 $
 64,711,908

 $
 20,203,813

 The
accompanying notes are an integral part of these consolidated financial statements.

 F- 5

Statements of Operations and Comprehensive Loss

 2023

 2022

 2023

 2022

 $
 51,997,642

 $
 28,082,009

 Cost of revenue

 38,551,874

 18,425,393

 13,445,768

 9,656,616

 Operating expenses:

 General and administrative

 21,553,039

 17,450,879

 Selling and marketing

 6,481,027

 7,089,595

 Research and development

 2,149,529

 -

 Depreciation and amortization

 3,294,015

 2,306,661

 Restructuring charges

 545,456

 -

 Goodwill and intangible asset impairment

 7,024,000

 701,423

 Other operating expenses

 3,065,021

 355,417

 Total operating expenses

 44,112,087

 27,903,975

 Loss from continuing operations

 ( 30,666,319
)

 ( 18,247,359
)

 Other income (expense), net:

 Interest expense

 ( 696,028
)

 ( 169,570
)

 Loss on debt extinguishment

 ( 2,204,737
)

 -

 Change in fair value of convertible debt carried at fair value

 538,354

 -

 Change in fair value of investment

 ( 515,277
)

 -

 Change in fair value of warrant liability

 968,757

 -

 Arbitration settlement reserve

 1,041,129

 -

 Other income (expense), net

 ( 103,463
)

 35,273

 Total other income (expense), net

 ( 971,265
)

 ( 134,297
)

 Loss from continuing operations before income taxes

 ( 31,637,584
)

 ( 18,381,656
)

 Income tax benefit

 55,096

 304,369

 Net loss from continuing operations

 ( 31,582,488
)

 ( 18,077,287
)

 Net income (loss) from discontinued operations

 300,061

 ( 29,841
)

)

 ( 18,107,128
)

 Net income attributable to non-controlling interest

 -

 ( 13,718
)

 Net loss attributable to GameSquare Holdings, Inc.

 $
)

 $
 ( 18,120,846
)

 Comprehensive loss, net of tax:

 $
)

 $
 ( 18,107,128
)

 Change in foreign currency translation adjustment

 ( 405,034
)

 Comprehensive loss

 ( 31,145,455
)

 ( 18,512,162
)

 Comprehensive income attributable to non-controlling interest

 -

 ( 13,718
)

 Comprehensive loss attributable to GameSquare Holdings, Inc.

 $
 ( 31,145,455
)

 $
 ( 18,525,880
)

 Income (loss) per common share attributable to GameSquare Holdings, Inc. - basic and assuming dilution:

 From continuing operations

 $
 ( 2.84
)

 $
 ( 3.26
)

 From discontinued operations

 0.03

 ( 0.01
)

 Loss per common share attributable to GameSquare Holdings, Inc. - basic and assuming dilution

 $
 ( 2.81
)

 $
 ( 3.26
)

 Weighted average common shares outstanding - basic and diluted

 11,119,900

 5,557,690

 The
accompanying notes are an integral part of these consolidated financial statements.

 F- 6

Statements of Changes in Shareholders' Equity

 Common stock

 Additional paid-

 Accumulated other comprehensive

 Non-controlling

 Accumulated

 Shareholders'

 Shares

 Par value

 in capital

 (loss) income

 interest

 deficit

 equity

 Balance, January 1, 2022

 5,047,709

 $
 -

 $
 41,659,276

 $
 135,981

 $
 ( 90,474
)

 $
 ( 24,016,876
)

 $
 17,687,907

 Private placements, net of issuance costs

 1,236,311

 -

 6,238,377

 -

 -

 -

 6,238,377

 Change in fair value of contingent consideration

 -

 -

 78,522

 -

 -

 -

 78,522

 Common shares issued upon vesting of RSUs

 68,250

 -

 -

 -

 -

 -

 -

 Warrants issued for credit facility

 -

 -

 96,359

 -

 -

 -

 96,359

 Non-controlling interest on sale of Biblos

 -

 -

 -

 -

 76,756

 -

 76,756

 Share-based compensation - options and RSUs

 -

 -

 1,599,909

 -

 -

 -

 1,599,909

 Other comprehensive loss

 -

 -

 -

 ( 405,034
)

 -

 -

 ( 405,034
)

 -

 -

 -

 -

 13,718

 ( 18,120,846
)

 ( 18,107,128
)

 Balance, December 31, 2022

 6,352,270

 $
 -

 $
 49,672,443

 $
 ( 269,053
)

 $
 -

 $
 ( 42,137,722
)

 $
 7,265,668

 Beginning balance

 6,352,270

 $
 -

 $
 49,672,443

 $
 ( 269,053
)

 $
 -

 $
 ( 42,137,722
)

 $
 7,265,668

 Impact of rounding down after exchange for GSQ Esports

 ( 70
)

 -

 -

 -

 -

 -

 -

 Issuance of common shares to settle contingent consideration

 29,359

 -

 -

 -

 -

 -

 -

 6,380,083

 -

 41,044,000

 -

 -

 -

 41,044,000

 Reclassification of GSQ Esports Inc. warrants to warrant liability

 -

 -

 ( 900,818
)

 -

 -

 -

 ( 900,818
)

 Shares issued for legal settlements

 29,929

 -

 183,187

 -

 -

 -

 183,187

 Common shares issued upon vesting of RSUs

 125,148

 -

 -

 -

 -

 -

 -

 Shares issued to settle outstanding amounts payable

 72,409

 -

 180,727

 -

 -

 -

 180,727

 Share-based compensation - options and RSUs

 -

 -

 1,735,630

 -

 -

 -

 1,735,630

 Other comprehensive income

 -

 -

 -

 -

 -

 Other comprehensive income (loss)

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

)

)

 Balance, December 31, 2023

 12,989,128

 $
 -

 $
 91,915,169

 $
 ( 132,081
)

 $
 -

 $
 ( 73,420,149
)

 $
 18,362,939

 Ending balance

 12,989,128

 $
 -

 $
 91,915,169

 $
 ( 132,081
)

 $
 -

 $
 ( 73,420,149
)

 $
 18,362,939

 The
accompanying notes are an integral part of these consolidated financial statements.

 F- 7

Statements of Cash Flows

 2023

 2022

 2023

 2022

 Cash flows from operating activities:

 $
)

 $
 ( 18,107,128
)

 Adjustments to reconcile net loss to net cash used in operating activities:

 Amortization and depreciation

 3,294,015

 2,306,661

 Amortization of operating lease right-of-use assets

 335,640

 309,293

 Shares issued for legal settlements

 186,560

 -

 Gain on disposition of Frankly radio assets

 ( 40,794
)

 -

 Loss on disposition of assets held for sale

 -

 29,841

 Gain on settlement of patent litigation

 ( 635,480
)

 -

 Change in fair value of contingent consideration

 45,648

 338,522

 Change in fair value of investment

 515,277

 -

 Change in fair value of warrant liability

 ( 968,757
)

 -

 Change in fair value of arbitration reserve

 ( 1,041,129
)

 -

 Change in provision for reclamation deposit

 -

 16,895

 Change in fair value of convertible debt carried at fair value

 ( 538,354
)

 -

 Loss on debt extinguishment

 2,204,737

 -

 Goodwill and intangible asset impairment

 7,024,000

 701,423

 Bad debt

 -

 171,000

 Change in deferred tax balances

)

 ( 315,548
)

 Non-cash interest expense

 -

 411,789

 Share-based compensation

 1,735,630

 1,599,909

 Changes in operating assets and liabilities:

 Accounts receivable, net

 ( 880,481
)

 ( 5,272,960
)

 Government remittances

 ( 493,834
)

 -

 Prepaid expenses and other current assets

 723,612

 ( 177,628
)

 Reclamation deposits

 -

 ( 4,897
)

 Assets held for sale

 -

 ( 48,980
)

 Accounts payable, accrued expenses and other current liabilities

 4,793,223

 5,653,078

 Consideration payable

 ( 305,648
)

 -

 Deferred revenue

 ( 358,383
)

 765,937

 Operating lease liability

 ( 336,229
)

 ( 301,355
)

 Net cash used in operating activities

 ( 16,078,270
)

 ( 11,924,148
)

 Cash flows from investing activities:

 Purchase of property and equipment

 ( 2,239
)

 ( 31,251
)

 Cash acquired in Engine acquisition

 11,326,146

 -

 Disposal of Frankly radio assets

 2,750,000

 -

 Disposal of assets held for sale

 -

 49,356

 Net cash provided by investing activities

 14,073,907

 18,105

 Cash flows from financings activities:

 Proceeds from private placements

 -

 6,303,211

 Payment of equity issuance costs

 -

 ( 64,834
)

 Proceeds from credit facility

 -

 750,000

 Repayment of borrowings on credit facility

 ( 750,000
)

 -

 Proceeds from promissory notes payable

 185,397

 -

 Repayment of borrowings on promissory notes payable

 -

 ( 149,442
)

 Proceeds (repayments) on line of credit, net

 4,518,571

 -

 Net cash provided by financing activities

 3,953,968

 6,838,935

 Effect of exchange rate changes on cash and restricted cash

 65,820

 16,289

 Net increase (decrease) in cash and restricted cash

 2,015,425

 ( 5,050,819
)

 Cash and restricted cash, beginning of period

 6,028,232

 Cash and restricted cash, end of period

 $
 2,992,838

 $

 The
accompanying notes are an integral part of these consolidated financial statements.

 F- 8

Statements of Cash Flows (Continued)

 2023

 2022

 Supplemental disclosure with respect to cash flows

 Cash paid for interest expense

 $
 561,335

 $
 11,950

 Cash paid for income taxes

 -

 -

 Operating lease payments in operating cash flows

 543,676

 535,148

 Supplemental disclosure of non-cash investing and financing activities:

 Divestiture of Frankly assets in exchange for contingent consideration
 receivable

 $
 501,118

 $
 -

 Shares, options, and warrants issued for acquisition of Engine

 41,044,000

 -

 Reclassification of GSQ Esports Inc. warrants to warrant liability

 900,818

 -

 Warrants issued for credit facility

 -

 96,359

 Shares issued to settle legal and other amounts payable

 367,287

 -

 Reconciliation
of cash and restricted cash:

 Cash

 $
 2,945,373

 $

 Restricted cash

 47,465

 -

 Cash and restricted cash shown in the consolidated statements of cash flows

 $
 2,992,838

 $

 The
accompanying notes are an integral part of these consolidated financial statements.

 F- 9

 Notes
to the Consolidated Financial Statements

 1.
 Corporate information and going concern

 (a)
 Corporate information

Holdings, Inc. (formerly Engine Gaming & Media, Inc.) ("GameSquare" or the "Company") is a corporation existing
under the Business Corporations Act (British Columbia) (and was originally incorporated under the Business Corporations Act (Ontario)
on April 8, 2011). The registered head office of the Company is 6775 Cowboys Way, Ste. 1335, Frisco, Texas, USA, 75034.

 GameSquare,
(NASDAQ: GAME; TSXV: GAME) completed its 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 (see Note 4).

 The
Arrangement constituted a reverse acquisition of the Company by GSQ with GSQ as the accounting acquirer and the Company as the accounting
acquiree, under applicable securities laws and for accounting purposes under accounting principles generally accepted in the United States
of America ("GAAP"). At completion of the Arrangement, Engine Gaming and Media, Inc. changed its name to GameSquare Holdings,
Inc. As a result, the historical financial statements of the Company were replaced with the historical financial statements of GSQ. The
number of shares prior to the reverse acquisition have been retroactively adjusted based on the equivalent number of shares received
by the accounting acquirer in the reverse acquisition.

 GSQ
was traded on the Canadian Securities Exchange (CSE) under the symbol "GSQ" and on the OTCQB Venture Market in the Unites
States under the symbol "GMSQF" until April 11, 2023.

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 Gaming Community Network ("GCN"), a digital media company focused
on gaming and esports audiences, Swingman LLC dba as Zoned, a gaming and lifestyle marketing agency, Code Red Esports Ltd. ("Code
Red"), a UK based esports talent agency, NextGen Tech, LLC, dba as Complexity Gaming ("Complexity"), a leading esports
organization, GSQ dba as Fourth Frame Studios, a creative production studio, Mission Supply, a merchandise and consumer products business,
Frankly Media, programmatic advertising, Stream Hatchet, live streaming analytics, and Sideqik a social influencer marketing platform.

 (b)
 Going concern

 These
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
$ 73.4 million as of December 31, 2023 ($ 42.1 million as of December 31, 2022). The recoverability of the carrying value of the assets
and the Company's continued existence is dependent upon the achievement of profitable operations, 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
December 31, 2023, the Company had a working capital deficiency of $ 13.9 million (as of December 31, 2022, a working capital deficiency
of $ 0.4 million) which is comprised of current assets less current liabilities.

 F- 10

 These
conditions indicate the existence of a material uncertainty that cast significant 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.

 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, 2023 and 2022.

 (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
Company's material subsidiaries as of December 31, 2023, are as follows:

 Schedule of material subsidiaries

 Name of Subsidiary

 Country of

 Incorporation

 Ownership

 Percentage

 Functional

 Currency

 Frankly Inc.

 Canada

 100 %

 Canadian Dollar

 Stream Hatchet S.L.

 Spain

 100 %

 Euro

 Code Red Esports Ltd.

 100 %

 UK Pound

 GameSquare Esports, Inc.

 Canada

 100 %

 Canadian Dollar

 GameSquare Esports (USA) Inc. (dba as Fourth Frame Studios)

 USA

 100 %

 GCN Inc.

 USA

 100 %

 NextGen Tech, LLC

 USA

 100 %

 Swingman LLC (dba Zoned)

 USA

 100 %

 Mission Supply LLC

 USA

 100 %

 SideQik, Inc.

 USA

 100 %

 Non-controlling
interests are measured initially at their proportionate share of the acquiree's identifiable net assets at the date of acquisition.
Changes in the Company's interest in a subsidiary that does not result in a loss of control are accounted for as equity transactions.
As of December 31, 2023, the Company has no subsidiaries for which a non-controlling interest exists.

 (c)
 Use of estimates

 The
preparation of 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) valuation
of warrant liabilities; (ii) valuation of convertible debt; (iii) contingent liabilities; (iv) share-based compensation; (v) assumptions
used in business combinations; and (vi) testing for impairment of long-lived assets and goodwill. Actual results may differ from the
estimates and assumptions used in the consolidated financial statements.

 F- 11

 (d)
 Foreign currencies

 The
functional currency of the Company is the US Dollar ("USD"). The functional currencies of the Company's subsidiaries
are disclosed in Note 2(b) above. Our reporting currency is USD.

 Assets
and liabilities of foreign subsidiaries are translated from local (functional) currency to reporting currency (USD) at the rate of exchange
in effect on the consolidated balance sheets date; income and expenses are translated at the average rate of exchange prevailing during
the year. The related translation gains and losses are included in other comprehensive income or loss within the consolidated statements
of operations and comprehensive loss.

 (e)
 Revenue recognition

is measured based on the consideration specified in a contract with a customer. The Company recognizes revenue when it transfers control
of its services to a customer.

 The
following provides information about the nature and timing of the satisfaction of performance obligations in contracts with customers,
including significant payment terms and related revenue recognition policies:

 Talent
representation service revenues

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

 Influencer
promotional fees

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

 Consulting
fees and other revenues

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

 Software-as-a-service

 The
Company enters into license agreements with customers for its content management system, video software, and mobile applications (Frankly),
e-sports data platform (Stream Hatchet) and an influencer marketing platform (SideQik). These license agreements, generally non-cancellable,
without paying a termination penalty, and multiyear, provide the customer with the right to use the Company's application solely
on a Company-hosted platform or, in certain instances, on purchased encoders. The license agreements also entitle the customer to technical
support.

from these license agreements is recognized ratably over the license term. Early termination fees are recognized when a customer ceases
use of agreed upon services prior to the expiration of their contract. These fees are recognized in full on the date the customer has
completed their migration of the Company's solutions and there is no continuing service obligation to the customer.

 The
Company charges its customers for the optional use of its content delivery network to stream and store videos. The revenue is recognized
as earned based on the actual usage because it has stand-alone value and delivery is in control of the customer. The Company also charges
its customers for the use of its ad serving platform to serve ads under local advertising campaigns. The Company reports revenue as earned
based on the actual usage.

 F- 12

 Advertising

 Under
national advertising agreements with advertisers, the Company sources, creates, and places advertising campaigns that run across the
Company's network of publisher sites. National advertising revenue, net of third-party costs, is shared with publishers based on
their respective contractual agreements. The Company invoices national advertising amounts due from advertisers and remits payments to
publishers for their share. Depending on the agreement with the publisher, the obligation to remit payment to the publisher is based
on either billing to the advertiser or the collection of cash from the advertiser.

 National
advertising revenue is recognized in the period during which the ad impressions are delivered. The Company reports revenue earned through
national advertising agreements either on a net or gross basis. The Company applies judgement in recognizing revenue earned through national
advertising agreements on a net or gross basis based on the criteria as disclosed below.

 Under
national advertising agreements wherein the Company does not bear inventory risk and only has credit risk on its portion of the revenue,
national advertising revenues are accounted for on a net basis and the publisher is identified as the customer.

 In
select national advertising agreements with its publishers, the Company takes on inventory risk and additional credit risk. Under these
agreements, the Company either a) provides the publisher with a guaranteed minimum gross selling price per advertising unit delivered,
wherein the greater of the actual selling price or guaranteed minimum selling price is used in determining the publisher's share
or b) provides the publisher with a fixed rate per advertising unit delivered, wherein the publisher is paid the fixed rate per advertising
unit delivered irrespective of the actual selling price. Under these national advertising agreements, national advertising revenues are
accounted for on a gross basis with the advertiser identified as the customer and the publisher identified as a supplier, with amounts
billed to the advertiser reported as revenue and amounts due to the publisher reported as a revenue sharing expense, within expenses.

 Also
included in advertising revenue is advertising revenue generated by the Company's various owned and operated properties.

 The
Company assesses its revenue arrangements against specific criteria in order to determine if it is acting as principal or agent. When
the Company acts in the capacity of an agent rather than as the principal in a transaction, the revenue recognized is the net amount
of commission made by the Company.

revenue consists of customer advances for Company services to be rendered that will be recognized as income in future periods.

 (f)
 Cash and restricted cash

 The
Company maintains cash deposits with major banks, financial institutions, and other custodians. Deposits at each financial institution
are insured in limited amounts by the Federal Deposit Insurance Corporation ("FDIC"). At times cash balances held at financial
institutions are more than FDIC insured limits. Bank overdrafts that are repayable on demand and form an integral part of the Company's
cash management are included as a component of cash for the purpose of the statement of cash flows. Restricted cash is related to the
players liability account within current liabilities and is presented as a separate category on the consolidated balance sheets.

 (g)
 Accounts receivable and allowance for credit losses

 Trade
accounts receivable are recorded at the invoiced amount and generally do not bear interest. The Company follows the allowance method
of recognizing uncollectible accounts receivable, which recognizes bad debt expense based on a review of the individual accounts outstanding
and prior history of uncollectible accounts receivable. Credit is extended based on evaluation of each of our customer's financial
condition and is generally unsecured. Accounts receivable are stated net of an allowance for doubtful accounts in the consolidated balance
sheets. An allowance for doubtful accounts is established at origination and is based on the lifetime expected credit losses of the trade
receivables in consideration of a number of factors, including the length of time trade accounts are past due, previous loss history,
the creditworthiness of individual customers, and future economic outlook. The amount of any increase in the allowance for doubtful accounts
is recognized in the consolidated statements of operations and comprehensive loss. When a trade receivable is uncollectible, it is written
off against the allowance. Subsequent recoveries of amounts previously written off are credited to the consolidated statements of operations
and comprehensive loss. The Company had an allowance for doubtful accounts of $ 1.2 million and $ 0 as of December 31, 2023 and 2022,
respectively.

 F- 13

 (h)
 Prepaid expenses and other current assets

 Prepaid
expenses and other assets consist primarily of prepaid expenses such as insurance as well as acquisition costs of players and security
deposits. Acquisition costs of players are amortized on a straight-line basis over the players' contract terms.

 (i)
 Property and equipment

 Property
and equipment are carried at historical cost less any accumulated depreciation and impairment losses. Historical cost includes the acquisition
cost or production cost as well as the costs directly attributable to bringing the asset to the location and condition necessary for
its use in operations. Property and equipment are depreciated at rates calculated to write off the cost of property and equipment, less
their estimated residual value, over the estimated useful lives, as follows:

 Schedule of estimated useful lives of property, plant and equipment

 Computer
 equipment

 to 5 years, straight-line

 Furniture
 and fixtures

 years, straight-line

 Leasehold
 improvements

 Term
 of the lease

 Expenditures
for maintenance and repairs are charged to operations in the period in which the expense is incurred. When assets are retired or otherwise
disposed of, the related costs and accumulated depreciation are removed from the balance sheet and any resulting gain or loss is reflected
in operations in the period realized.

 (j)
 Investments

 Investments
in and advances to entities or joint ventures in which the Company has significant influence, but less than a controlling financial interest,
are accounted for using the equity method. Significant influence is generally presumed to exist when the Company owns an interest between
 20 % and 50 % and exercises significant influence.

 In
accordance with ASC 321 " Investments—Equity Securities " ("ASC 321"), equity securities which the
Company has no significant influence (generally less than a 20% ownership interest) with readily determinable fair values are accounted
for at fair value based on quoted market prices. Equity securities without readily determinable fair values are accounted for either
at fair value or using the measurement alternative which is at cost minus impairment, if any, plus or minus changes resulting from observable
price changes in orderly transactions for the identical or a similar investment of the same issuer. All gains and losses on investments
in equity securities are recognized in the consolidated statements of operations and comprehensive loss.

 Equity
securities accounted for under the measurement alternative, the Company assesses the securities for impairment indicators, at least annually,
or more frequently if there are any indicators of impairment. If the assessment indicates that the fair value of the investment is less
than its carrying value, the investment is impaired and an impairment charge equal to the excess of the carrying value over the related
fair value of the investment will be recorded.

 F- 14

 (k)
 Business combinations

 The
results of businesses acquired in a business combination are included in the Company's consolidated financial statements from the
date of the acquisition. The Company uses the acquisition method of accounting and allocates the purchase price to the identifiable assets
and liabilities of the relevant acquired business at their acquisition date fair values. Any excess consideration over the fair value
of assets acquired and liabilities assumed is recognized as goodwill. The allocation of the purchase price in a business combination
requires the Company to perform valuations with significant judgment and estimates, including the selection of valuation methodologies,
estimates of future revenue, costs and cash flows, discount rates and selection of comparable companies. The Company engages the assistance
of valuation specialists in concluding on fair value measurements in connection with determining fair values of assets acquired and liabilities
assumed in a business combination. As a result, during the measurement period, which may be up to one year from the acquisition date,
the Company records adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion
of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any
subsequent adjustments are recorded to the consolidated statements of operations. Transaction costs associated with business combinations
are expensed as incurred and are included in selling, general and administrative expense in the consolidated statements of operations.

 (l)

arising on a business combination is recognized as an asset at the date that control is acquired (the "acquisition date").
Goodwill represents the excess of the purchase price over the estimated fair value of the net assets acquired in a business combination.

 (m)
 Intangible assets

 Intangible
assets are considered long-lived assets and are recorded at cost, less accumulated amortization and impairment losses, if any. The intangible
assets are amortized over their estimated useful lives, which do not exceed any contractual periods. Amortization is recorded on a straight-line
basis over their estimated useful lives. Intangible assets acquired from a foreign operation are translated from the foreign entity's
functional currency to the presentational currency based on the exchange rate at the reporting date.

 Intangible
assets include acquired software used in production or administration and brand names and customer relationships that qualify for recognition
as an intangible asset in a business combination. They are accounted for using the cost model whereby capitalized costs are amortized
on a straight-line basis over their estimated useful lives, as these assets are considered finite. Residual values and useful lives are
reviewed at each reporting date.

 The
useful lives of the intangibles are as follows:

 Schedule of useful lives of intangibles

 Software

 5 years

 Brands

 5 - 10 years

 Customer relationships

 5 - 20 years

 Acquired
computer software licenses are capitalized on the basis of the costs incurred to acquire and install the specific software. Subsequent
expenditure on brands is expensed as incurred. Costs associated with maintaining computer software (expenditure relating to patches and
other minor updates as well as their installation), are expensed as incurred.

 Other
intangible assets, such as brands, that are acquired by the Company are stated at cost less accumulated amortization and impairment losses.
Expenditures on internally generated brands, mastheads or editorial pages, publishing titles, customer lists and items similar in substance
is recognized in the consolidated statement of loss and comprehensive loss as an expense as incurred.

 (n)
 Research and development costs

 Research
costs are expensed when incurred. Development costs are capitalized when the feasibility and profitability of the project can be reasonably
considered certain. Expenditure on development activities, whereby research findings are applied to a plan or design to produce new or
substantially improved products and processes, is capitalized if the product or process is technically and commercially feasible and
the Company has sufficient resources to complete development. The expenditure capitalized includes the cost of materials, direct labor
and an appropriate proportion of overheads. Other development expenditure is recognized in the consolidated statement of loss and comprehensive
loss as an expense as incurred. Capitalized development expenditure is stated at cost less accumulated amortization and impairment losses.

 F- 15

 (o)
 Impairment of long-lived assets and goodwill

 Long-lived
assets consist of property and equipment, right-of-use assets and intangible assets. The Company assesses for impairment of asset groups,
including intangible assets, at least annually, or more frequently if there are any indicators for impairment.

and indefinite life intangible assets are tested for impairment annually or when there is an indication that the asset may be impaired.

 When
a triggering event that occurred during the reporting period is identified, or when the annual impairment test is required, the Company
may first assess qualitative factors to determine whether it is more likely than not that goodwill is impaired. If the Company determines
it is more likely than not that goodwill is not impaired, an impairment test is not necessary. If an impairment test is necessary, management
estimates the fair value of the Company. If the carrying value of the Company exceeds its fair value, goodwill is determined to be impaired,
and an impairment charge equal to the excess of the carrying value over the related fair value of the Company will be recorded. If the
qualitative assessment indicates that it is more likely than not that goodwill is not impaired, further testing is unnecessary.

 (p)
 Leases

 The
Company determines if an arrangement is a lease at its inception. Lease arrangements are comprised primarily of real estate for which
the right-of-use ("ROU") assets and the corresponding lease liabilities are presented separately on the consolidated balance
sheets.

 ROU
assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease
payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the estimated
present value of lease payments over the lease term. The lease term includes options to extend the lease when it is reasonably certain
that the option will be exercised. Leases with a term of 12 months or less are not recorded on the consolidated balance sheets.

 The
Company uses its estimated incremental borrowing rate in determining the present value of lease payments considering the term of the
lease, which is derived from information available at the lease commencement date, considering publicly available data for instruments
with similar characteristics. The Company accounts for the lease and non-lease components as a single lease component.

 (q)
 Contingencies

 The
Company estimates loss contingencies in accordance with ASC 450-20, Loss Contingencies, which states that a loss contingency shall
be accrued by a charge to income if both of the following conditions are met: (i) information available before the consolidated financial
statements are issued or are available to be issued indicates that it is probable that a liability had been incurred at the date of the
consolidated financial statements and (ii) the amount of loss can be reasonably estimated. Management regularly evaluates current information
available to determine whether such accruals should be adjusted and whether new accruals are required (see Note 19).

 (r)
 Fair value measurement

 The
Company categorizes its financial assets and liabilities measured at fair value into one of three different levels depending on the observability
of the inputs used in the measurement.

 Level
1: This level includes assets and liabilities measured at fair value based on unadjusted quoted prices for identical assets and liabilities
in active markets that are accessible at the measurement date.

 F- 16

 Level
2: This level includes valuations determined using directly or indirectly observable inputs other than quoted prices included within
Level 1.

 Level
3: This level includes valuations based on inputs which are unobservable.

 See
Note 22 for a summary of the Company's financial assets and liabilities, detailed by level.

 (s)
 Fair value option for convertible debt

 The
Company elected the Fair Value Option ("FVO") for recognition of its convertible debt as permitted under ASC 825, Financial
Instruments. (see Note 12). Under the FVO, the Company recognizes the convertible debt at fair value with changes in fair value recognized
in earnings. The FVO may be applied instrument by instrument, but it is irrevocable. As a result of applying the FVO, any direct costs
and fees related to the convertible debt is recognized in operating expense in the consolidated statements of operations and comprehensive
loss as incurred and not deferred. Changes in fair value of the convertible debt is recognized as a separate line in the consolidated
statements of operations and comprehensive loss.

 (t)
 Share capital

 Common
shares are classified as equity. Transaction costs directly attributable to the issue of common shares, share purchase options ("Options"),
and equity classified warrants are recognized as a deduction from equity, net of any tax effects. When share capital recognized as equity
is repurchased, the amount of the consideration paid, including directly attributable costs, is recognized as a deduction from total
equity.

 As
discussed in Note 1(a) above, although the historical financial statements reflect the activity of GSQ, the equity structure, including
equity interest issued, is that of GameSquare (formerly Engine Gaming and Media, Inc.), the legal parent. Accordingly, all share activity
disclosed, and strike or exercise prices where applicable, have been retroactively adjusted to Common shares of GameSquare based on the
exchange ratio of 0.020655 (see Note 4).

 (u)
 Net loss per share attributable to common shareholders

 The
Company calculates earnings per share attributable to common shareholders in accordance with ASC 260-10, Earning Per Share. Basic
net income (loss) per share attributable to common shareholders is calculated by dividing net income (loss) attributable to common shareholders
by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per common share is calculated
by dividing net income (loss) attributable to common shareholders by weighted-average common shares outstanding during the period plus
all potentially dilutive common shares outstanding during the period, such as warrant shares.

 Diluted
earnings per share is computed by dividing undistributed earnings allocated to common stockholders for the period by the weighted average
number of common shares outstanding during the period, plus the dilutive effect of outstanding preferred shares, Options and unvested
share units, and warrants outstanding pursuant to the treasury stock method.

 (v)
 Share-based payments

 The
Company's share-based payment plan allows Company employees and consultants to acquire shares of the Company. The fair value of
share-based payment awards granted is recognized within share-based payments expense with a corresponding increase in equity.

 F- 17

 Options

 Each
tranche of the Company's Options is considered a separate award with its own vesting period and grant date fair value. The fair
value is measured at grant date and each tranche is recognized on a straight-line basis over the period during which the share purchase
Options vest. The fair value of the share-based payment awards granted is measured using the Black-Scholes option pricing model taking
into account the terms and conditions upon which the awards were granted such as stock price, term, and stock volatility. At each financial
position reporting date, the amount recognized as an expense is adjusted to reflect the actual number of awards, for which the related
service and non-market vesting conditions are expected to be met. Share based payments expense is adjusted for subsequent changes in
management's estimate of the number of Options that are expected to vest.

 Restricted
share units

 For
each Restricted Share Units ("RSU") granted, the Company recognizes an expense equal to the market value of a common share
at the date of grant and for each RSU granted, the Company recognizes an expense equal to the fair value of the RSU estimated using a
Black Scholes model at grant date, based on the number of RSUs expected to vest, recognized over the term of the vesting period, with
a corresponding increase to additional paid-in capital. Share based payments expense is adjusted for subsequent changes in management's
estimate of the number of RSUs that are expected to vest. The effect of these changes are recognized in the period of the change.

 Warrants

 The
Company's warrants that have an exercise price in the functional currency of the Company are equity-classified. The grant-date
fair value of these warrants is recorded in additional paid-in capital on the consolidated balance sheets.

 For
equity-settled share-based payment transactions, including Options, RSUs granted to officers and directors of the Company and warrants
granted to advisors in a financing transaction, the fair value of the awards is established based on the value of the goods or services
received, unless that fair value cannot be estimated reliably, in which cases, the Company measures the value, and the corresponding
increase in equity, indirectly, by reference to the fair value of the equity instruments granted.

 (w)
 Derivative warrant liability

 Certain
of the Company's warrants are recorded as a derivative liability pursuant to ASC 815 due to having an exercise price in a currency
other than the Company's functional currency. The derivative warrant liability is recognized on the consolidated balance sheets
at fair value and classified based on each warrant's maturity date. Changes in the fair value of the warrant liability are recognized
in the consolidated statements of operations and comprehensive loss.

 (x)
 Income taxes

tax on the profit or loss for the periods presented comprises current and deferred tax. Income tax is recognized in profit or loss except
to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity.

 Current
tax expense is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at year
end, adjusted for amendments to tax payable with regards to previous years.

tax is provided using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for the following temporary
differences: the initial recognition of goodwill; the initial recognition of assets or liabilities in a transaction that is not a business
combination and that affects neither accounting nor taxable profit; and differences relating to investments in subsidiaries, associates,
and jointly controlled entities to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax
provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates
enacted or substantively enacted at the financial position reporting date applicable to the period of expected realization or settlement.

 A
deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the
asset can be utilized.

 F- 18

tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities
and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and
liabilities on a net basis.

 (y)
 Concentration of credit risk

 The
Company places its cash and cash equivalents, which may at times be in excess of United States' 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 one customer whose revenue accounted for approximately 43 % of total revenue. There were no customers whose revenue was 10 %
or more of the Company's total revenue for the year ended December 31, 2022.

 No
customer individually accounted for more than 10 % of the Company's accounts receivable as of December 31, 2023 and 2022.

 (z)
 Discontinued operations and assets held for sale

 The
Company classifies assets and liabilities of a business or asset group as held for sale, and the results of its operations as income
(loss) from discontinued operations, net, for all periods presented, when (i) the Company commits to a plan to divest a business or asset
group, actively begins marketing it for sale, and when it is deemed probable of occurrence within the next twelve months, and (ii) when
the business or asset group reflects a strategic shift that has, or will have, a major effect on the Company's operations and its
financial results.

 Non-current
assets or disposal groups classified as held for sale are measured at the lower of carrying amounts and fair value less costs to sell.

 In
determining whether a group of assets disposed (or to be disposed) of should be presented as a discontinued operation, the Company makes
a determination of whether the criteria for held-for-sale classification is met and whether the disposition represents a strategic shift
that has (or will have) a major effect on the entity's operations and financial results. If these determinations can be made affirmatively,
the results of operations of the group of assets being disposed of (as well as any gain or loss on the disposal transaction) are aggregated
for separate presentation apart from continuing operating results of the Company in the consolidated financial statements.

 See
Note 20 for discussion of the Company discontinued operations and assets held for sale as of, and for the years ended, December 31, 2023
and 2022.

 (aa)
 Restructuring charges, net

 Restructuring
charges primarily consist of associate severance, one-time termination benefits and ongoing benefits related to the reduction of our
workforce and other costs associated with exit activities, which may include costs related to leased facilities to be abandoned and facility
and associate relocation costs. The determination of when we accrue for involuntary termination benefits under restructuring plans depends
on whether the termination benefits are provided under an ongoing benefit arrangement or under a one-time benefit arrangement. Ongoing
benefit arrangements are recognized over the service period or when termination becomes reasonably probable, and one-time benefit arrangements
are recognized in the period the arrangement is approved and formally communicated to associates. If applicable, we record such costs
into operating expense over the terminated associate's future service period beyond any minimum retention period. Restructuring
charges that have been incurred but not yet paid are recorded in accrued expenses and other current liabilities in the consolidated balance
sheets.

 For
the years ended December 31, 2023 and 2022, restructuring charges, net totaled $ 0.5 million and zero, respectively. These charges primarily
related to employee severance costs as a result of the restructuring of GameSquare and Engine post-closing of the Arrangement.

 F- 19

 (bb)
 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 Company's results as it
reflects the Company's underlying performance for the period under evaluation to determine resource allocation. As of December 31, 2023, the Company was organized into the three operating segments, which also represent its three
reportable segments: Teams, Agency and Software-as-service (SaaS) + Advertising.

 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.

 (cc)
 Advertising costs

 The
Company expenses advertising costs as incurred. Advertising and promotion costs for the years ended December 31, 2023 and 2022, were
$ 0.9 million and $ 4.0 million, respectively, and are included in general and administrative expense in the consolidated statements of
operations and comprehensive loss.

 3.
 Recent accounting pronouncements

 (a)
 Pending adoption

 In
December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.
2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"). ASU 2023-09 requires that
public business entities must annually (1) disclose specific categories in the rate reconciliation and (2) provide additional information
for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent
of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate). This ASU is effective for fiscal
years beginning after December 15, 2024, with early adoption permitted. The ASU is to be applied prospectively. Retroactive application
is permitted. The Company has not early adopted and continues to evaluate the impact of the provisions of ASU 2023-09 on its consolidated
financial statements.

 In
November 2023, the FASB issued ASU No 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU
2023-07"). ASU 2023-07 is intended to improve reportable segment disclosure requirements primarily through enhanced disclosures
about significant segment expenses. This ASU is effective for fiscal years beginning after December 15, 2023, with early adoption permitted.
The ASU should be applied retrospectively to all prior periods presented in the financial statements. The Company has not early adopted
and continues to evaluate the impact of the provisions of ASU 2023-07 on its consolidated financial statements.

 (b)
 Adopted

 In
October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805) – Accounting for Contract Assets and Contract
Liabilities from Contracts with Customers ("ASU 2021-08"). ASU 2021-08 requires that an acquirer recognize and measure
contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, as if it had originated the
contracts. Prior to this ASU, an acquirer generally recognized contract assets acquired and contract liabilities assumed that arose from
contracts with customers at fair value on the acquisition date. The ASU is effective for fiscal years beginning after December 15, 2022,
with early adoption permitted. The ASU is to be applied prospectively to business combinations occurring on or after the effective date
of the amendment. The Company adopted ASU 2021-08 as of January 1, 2023 and began applying the provisions of the amendment to any business
combinations (see Note 4).

 F- 20

 On
April 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt- Modifications and Extinguishments (Subtopic 470-50),
Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging- Contracts in Entity's Own Equity (Subtopic 815-40): Issuer's
Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options ("ASU 2021-04").
ASU 2021-04 clarifies the accounting by issuers for modifications or exchanges of equity-classified warrants. This ASU is effective for
fiscal years beginning after December 15, 2021, with early adoption permitted. The ASU is to be applied prospectively to modifications
or exchanges occurring on or after the effective date of the amendment. The Company adopted ASU 2021-04 as of January 1, 2022 and began
applying the provisions of the amendment to any future modifications or exchanges (see Note 17).

 In
August 2020, the FASB issued ASU No. 2020-06, Debt – Debt with Conversion and Other Options ("ASU 2020-06"),
which simplifies the guidance on the issuer's accounting for convertible debt instruments by removing the separation models for
(1) convertible debt with a cash conversion feature and (2) convertible instruments with a beneficial conversion feature. As a result,
entities will not separately present in equity an embedded conversion feature in such debt and will account for a convertible debt instrument
wholly as debt, unless certain other conditions are met. The elimination of these models will reduce reported interest expense and increase
reported net income for entities that have issued a convertible instrument that is within the scope of ASU 2020-06. Also, ASU 2020-06
requires the application of the if-converted method for calculating diluted earnings per share and treasury stock method will be no longer
available. ASU 2020-06 is applicable for fiscal years beginning after December 15, 2021, with early adoption permitted no earlier than
fiscal years beginning after December 15, 2020. The Company adopted ASU 2020-06 as of January 1, 2022 and the adoption did not have a
material impact on the Company's consolidated financial statements.

 4.
 Acquisitions and divestitures

 (a)
 Reverse acquisition of Engine Gaming and Media, Inc.

 On
April 11, 2023, GSQ completed its plan of arrangement with Engine Gaming and Media, Inc. ("Engine") resulting in Engine acquiring
 100 % of the issued and outstanding securities of GSQ.

 Resulting
from the Arrangement, Engine acquired all issued and outstanding GSQ shares in exchange for 0.020655 of an Engine common share for each
GSQ share (the "Exchange Ratio"). Each outstanding option of GSQ was exchanged for an Engine option entitling the holder
to a number of Engine common shares, as adjusted on the basis of the Exchange Ratio, and be subject to exercise thereof in accordance
with the terms of the options, including payment of the exercise price, which will also be adjusted based upon the Exchange Ratio. All
other material terms of the options remained the same. Each outstanding restricted share unit of GSQ was exchanged for an Engine restricted
share unit entitling the holder to a number of Engine common shares, as adjusted on the basis of the Exchange Ratio. All other material
terms of the restricted share units remained the same. Each outstanding warrant of GSQ was adjusted pursuant to its governing contractual
instrument to entitle the holder to receive, upon due exercise, Engine common shares, adjusted on the basis of the Exchange Ratio.

 At
completion of the Arrangement, Engine Gaming and Media, Inc. changed its name to GameSquare Holdings, Inc.

 The
Arrangement was accounted for as a reverse acquisition, with GSQ being treated as the acquiring entity for accounting and financial reporting
purposes. Engine is a data-driven, gaming, media and influencer marketing platform company.
The Arrangement has expanded GSQ's content, advertiser, and influencer businesses.

 GSQ incurred transaction costs of $ 2.7 million associated with the Arrangement. All such costs were expensed as incurred. The loss attributed
to Engine's operations from the acquisition date to December 31, 2023, was $ 3.8 million, with revenue of $ 29.8 million.

 The
Arrangement was accounted for using the acquisition method of accounting under ASC 805, Business Combinations, which requires
that the Company (GameSquare Holdings, Inc.) recognize the identifiable assets acquired and the liabilities assumed at their fair values
on the date of acquisition. The estimated fair values are preliminary and based on the information that was available as of that date.

 F- 21

 The
following preliminary table summarizes the consideration for the acquisition:

of purchase consideration

 Purchase consideration

 Number of shares

 Amount

 Common shares (1)

 6,380,083

 $
 39,684,000

 Warrants - Equity and Liability (2)

 1,147,492

 183,275

 Options - Vested (2)

 237,996

 1,210,000

 RSUs - Vested (3)

 23,339

 120,000

 Total purchase price

 7,788,910

 $
 41,197,275

 (1)

 Acquisition
 date fair value of common stock determined based on $ 6.22 price per share.

 (2)

 Acquisition
 date fair value of warrants and options determined using the Black-Scholes option pricing model.

 Key
 inputs to the option pricing model are as follows:

 Expected
 term 1 – 9 years

 Volatility
 100 %

 Risk-free
 rate 3.4 % - 4.7 %

 Dividend
 yield 0 %

 (3)

 Acquisition
 date fair value of RSUs determined based on $ 6.22 price per share with discounts for lack of marketability ranging from 15 % - 20 %
 applied.

 The
preliminary purchase price allocation is as follows:

of Preliminary Purchase Price Allocation

 Purchase price allocation

 Amount

 Cash

 $
 11,278,691

 Restricted cash

 47,455

 Accounts and other receivables

 7,464,661

 Government remittances

 1,064,103

 Prepaid expenses and other current assets

 748,741

 Investment

 3,188,749

 Property and equipment

 128,823

 25,600,501

 Intangible assets

 17,750,000

 Total assets acquired

 67,271,724

 Accounts payable

 12,578,716

 Accrued expenses and other current liabilities

 3,221,680

 Players liability account

 47,455

 Deferred revenue (1)

 1,195,429

 Promissory notes payable

 450,083

 Arbitration reserve

 1,469,753

 Convertible debt carried at fair value

 7,111,333

 Total liabilities assumed

 26,074,449

 Net assets acquired

 $
 41,197,275

 (1)

 As
 discussed in Note 3, the Company adopted ASU 2021-08 as of January 1, 2022. As a result, deferred revenue is an exception to the
 measurement guidance of ASC 805 and was instead measured in accordance with ASC 606.

 As
part of the settlement of the Lockton case in September 2023 (see Note 19), the promissory notes payable in the table above have been
forgiven. As a result, the Company recognized a non-cash gain in gain from discontinued operations on the consolidated statements of
operations and comprehensive loss for the year ended December 31, 2023.

 F- 22

 The
acquisition date fair value of the arbitration reserve was determined based on a fair value of $ 6.22 per common share delivered as a
result of the arbitration. The fair value of the arbitration reserve was $ 0.4 million as of December 31, 2023, based on a fair value
of $ 1.77 per share, resulting in a gain of $ 1.0 million for the year ended December 31, 2023 as included on the consolidated statements
of operations and comprehensive loss (see Note 19)

 Significant
judgments and assumptions related to the valuation and useful lives of certain classes of assets acquired are as follows:

 i)
Intangible assets, software

 The
fair value of the software intangible asset of $ 5.0 million was determined based on the relief from royalty method under the income approach.
The software intangible asset was valued using Level 3 inputs which consisted of the following key inputs: (i) revenue projections; (ii)
royalty rates of 3.0 %, 6.0 % and 10 %; (iii) tax rates of 25.0 %, 26.0 %, and 26.5 % (iv) discount rates of 10 %, 11.5 % and 12.0 %; (v) long-term
growth rate of 3.0 %. These assets are amortized on a straight-line basis over the estimated useful life of five years.

 ii)
Intangible assets, brand

 The
fair value of the brand name intangible asset of $ 3.2 million was determined based on the relief from royalty method under the income
approach. The brand name intangible asset was valued using Level 3 inputs which consisted of the following key inputs: (i) revenue projections;
(ii) royalty rates of 1.0 %, 1.5 % and 3.0 %; (iii) tax rates of 25.0 %, 26.0 % and 26.5 % (iv) discount rates of 12.0 %, 12.5 % and 13.0 %; (v)
long-term growth rate of 3.0 %. These assets are amortized on a straight-line basis over the estimated useful life of ten years.

 iii)
Intangible assets, customer relationships

 The
fair value of the customer relationships intangible asset of $ 9.6 million was determined based on the relief from royalty method under
the income approach. The customer relationship intangible asset was valued using Level 3 inputs which consisted of the following key inputs: (i) revenue
projections; (ii) attrition rates of 5.0 %, 7.5 %, and 15 %; (iii) tax rates of 25.5 %, 26.0 %, and 27.0 % (iv) discount rates of 12.5 %, 13.0 %,
and 13.5 %. These assets are amortized on a straight-line basis over the estimated useful life of twenty years.

 iv)

 The
difference between the acquisition date fair value of the consideration transferred and the values assigned to the assets acquired and
liabilities assumed represents goodwill of $ 25.6 million.

 The
goodwill recorded represents the following:

 Cost
 savings and operating synergies expected to result from combining the operations of Engine with those of the Company.

 Intangible
 assets that do not qualify for separate recognition such as the assembled workforce.

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

 Subscription
receipt financing

 On
April 6, 2023, Engine closed a public offering of 7,673,000 subscription receipts at an issue price of $ 1.25 per subscription receipt,
including the partial exercise of an over-allotment option, for gross proceeds of $ 9.6 million, net of equity issuance costs of $ 0.2
million. Each subscription receipt entitled the holder to receive one share of the Company upon closing of the Arrangement. The proceeds
from the public offering are included in the opening balance sheet of Engine above.

 F- 23

 The
subscription receipts were consolidated into 1,918,250 subscription receipts as a result of a 4 to 1 reverse stock split of Engine's
common stock immediately prior to the closing of the Arrangement. Upon closing of the Arrangement, the subscription receipts were automatically
exchanged on a one-to-one basis for 1,918,250 common shares of the Company. These common shares are included in the measurement of common
share purchase consideration in the Arrangement shown above.

 Engine
pro-forma results of operations

 The
following unaudited pro-forma consolidated results of operations for the years ended December 31, 2023 and 2022, respectively, have been
prepared as if the Arrangement had occurred on January 1, 2022. The below does not include any pro-forma adjustments other than adding in the actual results of Engine from January
1, 2023 to April 11, 2023 for 2023 and the year ended November 30, 2022 for the 2022 year. As Engine historical reported on an August
31 fiscal year end, calendar year 2022 actual results are not available:

of business acquisition pro-forma

 2023

 2022

 2023

 2022

 $
 60,790,276

 $
 68,019,706

 Net income

 ( 33,224,344
)

 ( 36,557,433
)

 Net income attributable to GameSquare Holdings, Inc.

 ( 33,224,344
)

 ( 36,611,606
)

 (b)
 Disposition of certain Frankly Media LLC, assets

 On
December 29, 2023, the Company sold a technology platform and customer accounts making up the radio assets of Frankly Media LLC ("Frankly"),
a subsidiary of the Company, to SoCast, Inc. ("SoCast"). SoCast paid the Company aggregate consideration of $ 3.3 million
for Frankly's radio assets, including $ 2.8 million paid upon closing of the transaction and contingent consideration receivable,
with a transaction closing date fair value of $ 0.5 million, based on future revenue that SoCast will derive from the purchased radio
assets. The Company recognized a gain of $ 41 thousand after offsetting the consideration received with the carrying values of the disposed
assets and liabilities.

 There
were no changes in the fair value of the contingent consideration receivable, after initial recognition, during the year ended December
31, 2023.

 5.
 Investment

 In
conjunction with completion of the Arrangement (see Note 4), the Company acquired an 18.62 % interest in One Up Group, LLC ("One
Up"). One Up operates a mobile app which allows gamers to organize and play one-on-one matches with other gamers and compete for
money.

 The
April 11, 2023, acquisition date fair value of investment was $ 3.2 million. The Company accounts for the investment in One Up in accordance
with the provisions of ASC 321 and, because the investment in One Up does not have a readily determinable fair value, elected to use
the measurement alternative therein. The investment will be re-measured upon future observable price changes in orderly transactions
or upon impairment, if any.

 One Up completed an equity offering on December 22, 2023, representing an observable price change. As a result of
this observable price change, the Company recognized a $ 0.5 million change in fair value of the Company's investment in One Up.

 No
other observable price changes or impairments occurred during the year ended December 31, 2023.

 F- 24

 6.
 Property and equipment, net

 Property
and equipment consist of the following:

of property and equipment

 31, 2022

 Leasehold improvements

 $
 3,655,619

 $
 3,655,619

 Equipment

 397,780

 269,656

 Property and equipment, gross

 4,053,399

 3,925,275

 Less: Accumulated depreciation

 ( 1,588,766
)

 ( 923,392
)

 Property and equipment, net

 $
 2,464,633

 $
 3,001,883

 The
Company recognized depreciation expense for property and equipment of $ 0.7 million for the years ended December 31, 2023 and 2022, respectively.

 7.
 Goodwill and intangible assets

 (a)

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

of Goodwill

 Balance, December 31, 2021 and 2022

 $
 -

 25,600,501

 Impairment of Frankly

 ( 7,024,000
)

 Disposal of Frankly radio assets

 ( 2,272,512
)

 Balance, December 31, 2023

 $
 16,303,989

resulting from the acquisition of Engine was allocated to the SaaS + Advertising operating and reportable segment.

 After
considering the impact of the sale of the Frankly radio assets on projected sales and assumptions of future growth, as part of the Company's
annual impairment assessment, the Company concluded goodwill related to Frankly was impaired. The Company recognized an impairment charge
of $ 7.0 million for the year ended December 31, 2023. There were no impairment charges related to goodwill incurred during the year ended
December 31, 2022.

 F- 25

 (b)
 Intangible assets

 Intangible
assets consist of the following:

of Intangible Assets

 As of December 31, 2023

 Original cost

 Accumulated amortization

 Accumulated impairment losses

 Carrying value

 Customer relationships

 $
 11,006,154

 $
 ( 1,483,331
)

 $
 ( 472,018
)

 $
 9,050,805

 Brand name

 8,963,557

 ( 3,115,265
)

 ( 229,405
)

 5,618,887

 Software

 4,560,400

 ( 655,948
)

 -

 3,904,452

 Total intangible assets

 $
 24,530,111

 $
 ( 5,254,544
)

 $
 ( 701,423
)

 $
 18,574,144

 As of December 31, 2022

 Original cost

 Accumulated amortization

 Accumulated impairment losses

 Carrying value

 Customer relationships

 $
 2,263,335

 $
 ( 843,582
)

 $
 ( 472,018
)

 $
 947,735

 Brand name

 5,657,530

 ( 1,766,023
)

 ( 229,405
)

 3,662,102

 Total intangible assets

 $
 7,920,865

 $
 ( 2,609,605
)

 $
 ( 701,423
)

 $
 4,609,837

 The
Company recognized amortization expense for intangible assets of $ 2.6 million and $ 1.6 million for the years ended December 31, 2023
and 2022, respectively.

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

of amortization expense for intangible assets

 2024

 $
 3,133,949

 2025

 3,111,603

 2026

 2,521,555

 2027

 1,631,541

 2028

 907,911

 Thereafter

 7,267,585

 Total estimated amortization expense

 $
 18,574,144

 There
were no impairment charges related to intangible assets incurred during the year ended December 31, 2023. During the year ended
December 31, 2022, the Company recorded an impairment of intangible assets acquired on the acquisition of Code Red of $ 0.7 million.

 F- 26

 8.
 Accrued expenses and other current liabilities

 Accrued
liabilities consist of the following:

of accrued liabilities

 31, 2022

 Compensation expense

 $
 1,257,210

 $
 1,185,200

 Convertible debt principal and interest due

 762,442

 -

 Debt modification fees

 650,000

 -

 Professional fees

 983,954

 316,967

 Accounts payable accruals

 872,387

 1,540,767

 Lease abandonment

 376,959

 -

 Other

 386,197

 137,274

 Total accrued expenses and other current liabilities

 $
 5,289,149

 $
 3,180,208

 9.
 Leases

 On
June 30, 2021, the Company acquired Complexity. Complexity leases a building in Frisco, Texas. 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.

 The
components of operating lease expense are as follows:

of components operating lease expense

 2023

 2022

 Operating lease expense

 $
 543,086

 $
 543,086

 Variable lease expense

 265,070

 218,809

 Total operating lease costs

 $
 808,156

 $
 761,895

 As
of December 31, 2023, the remaining lease-term and discount rate on the Company's lease was 5.3 years and 8.3 %, respectively.

 Maturities
of the lease liability are as follows:

of maturities
of the lease liability

 2024

 $

 2025

 2026

 2027

 2028

 Thereafter

 181,936

 Total lease payments

 2,910,976

 Less: Interest

 ( 548,528
)

 Total lease liability

 $
 2,362,448

 F- 27

 10.
Credit facility payable

 On
June 30, 2022, the Company entered into an agreement for a $ 5.0 million credit facility (the "Facility") with a one -year
term with Goff & Jones Lending Co, LLC., a related party to the Company. The Facility matures on June 30, 2023 (the "Maturity
Date"). The Company may, by written notice to the lender, extend the Maturity Date by one year from the date of the then applicable
Maturity Date; provided that any such request is made no more than 90 days or less than 45 days, prior to the then applicable Maturity
Date. Interest accrues on the outstanding principal amount of the Facility from and including the date of the advance of funds, as well
as on all overdue amounts outstanding in respect of interest, costs or other fees, expenses or other amounts payable under the Facility,
at an interest rate, calculated and payable in arrears on (i) the last business day of each calendar month, (ii) the date of any prepayment
of all or any portion of the principal amount of the Facility, and (iii) the Maturity Date (each, an "Interest Payment Date"),
as well as after each of maturity, default and judgment. The Facility bears interest based on the sum of the SOFR published for the second
U.S. Government Securities Business Day prior to the end of the period ending on an Interest Payment Date. The Facility provides for
the issuance of warrants to the lender on the date of signing of the Facility and with respect to each draw down on the Facility.

 The
Company issued 92,829 warrants to Goff & Jones Lending Co, LLC. On June 30, 2022, in connection with entering into the Facility (see
Note 17(b)).

the year ended December 31, 2022, the Company drew down $ 0.8 million on the Facility and accrued a $ 50.0 thousand structuring fee and
$ 2.3 thousand in interest. In addition, the Company issued 16,177 warrants under the terms of the Facility in relation to the $ 0.8 million
drawdown (see Note 17(b)).

the year ended December 31, 2023, the Company recognized $ 23.3 thousand in interest expense on the Facility and incurred legal costs
of $ 80.1 thousand in relation to the Facility.

 As
of December 31, 2022, the principal and accrued interest of the Facility were carried at $ 0.8 million. The company paid off the principal
and accrued interest of the Facility in April 2023 and it has not been renewed.

 11.
 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.

 As
of December 31, 2023, the outstanding principal, and unpaid accrued interest, on the LOC was $ 4.5
 million. During the year ended December 31, 2023,
the Company recognized interest expense of $ 0.2
 million on the outstanding LOC principal balance.

 12.
 Convertible debt

 In
conjunction with completion of the Arrangement (see Note 4), the Company assumed two convertible debt instruments: a $ 1.3 million convertible
debenture issued to Three Curve Capital LP ("Three Curve CD") and a $ 5.0 million convertible debenture issued to EB Acquisition
Company, LLC ("EB CD"). The Company elected the FVO for recognition of the Three Curve CD and EB CD as permitted under ASC
825.

 On
December 29, 2023, the Company refinanced the EB CD. The EB CD was exchanged for a new senior secured convertible debenture in the principal
amount of $ 5.8 million with an affiliate of EB Acquisition Company, LLC, King Street Partners LLC ("King Street CD"). The
refinance transaction was accounted for as an extinguishment of the EB CD. After remeasuring the EB CD at fair value as of December 29,
2023, the Company recognized a $ 2.2 million loss on extinguishment in the consolidated statements of operations and comprehensive loss
related to the EB CD. The Company paid a fee of $ 0.7 million to King Street Partners LLC in relation to the refinance transaction which
was included in the determination of the loss on extinguishment.

 The
Company elected the FVO for the recognition of the new King Street CD.

 F- 28

 Certain
registration rights were included in the King Street CD. If the Company does not have an effective registration statement on file with
the SEC within either 110 days (if registered on a Form S-3) or 150 days (if registered on a Form S-1) of the December 29, 2023, registering
the underlying shares issuable upon conversion of the King Street CD, or fails to maintain the effectiveness of such registration statement,
then liquidated damages would accrue equal to 1 % of the outstanding principal of the King Streed CD for every 30 days that the registration
statement is not effective. The maximum penalty is equal to 9 % of the original principal amount of $ 5.8 million, or $ 0.5 million.

 The
Company accounts for such damages in accordance with ASC subtopic 825-20, Registration Payment Arrangements ("ASC 825-20").
ASC 825-20 specifies that the contingent obligation to make future payments under a registration payment arrangement, whether issued
as a separate agreement or included as a provision of a financial instrument, should be separately recognized and accounted for as a
contingency in accordance with ASC 450-20, Loss Contingencies. The registration statement is expected to be declared effective
during 2024 and no contingent liability has been recognized in relation to this registration payment arrangement.

 (a)
 King Street CD

 On
December 29, 2023, the Company issued the King Street CD. Key terms include (a) a maturity date of December 29, 2025, (b) an interest
rate of 12.75 % per annum, and (c) is convertible at the holder's option into common shares of Company at a price of $ 5.00 per share
(subject to standard anti-dilution provisions).

 On
December 29, 2023 (the EB CD exchange date), the fair value of the King Street CD was estimated using the binomial lattice model with
the below assumptions:

 Schedule of Detailed Information About Fair Value of Convertible Debentures

29, 2023

 Share price

 $
 1.78

 $
 1.78

 Conversion price

 $
 5.00

 $
 5.00

 Term, in years

 2.00

 2.00

 Interest rate

 %

 %

 110.00
 %

 110.00
 %

 4.23
 %

 4.23
 %

 %

 %

 (b)
 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.

 As
of December 31, 2023, and on April 11, 2023 (the Arrangement completion date) the fair value of the Three Curve CD was estimated using
the binomial lattice model with the below assumptions:

 Schedule of Detailed Information About Fair Value of Convertible Debentures

 April
11, 2023

 Share price

 $
 1.78

 $
 6.09

 Conversion price

 $
 4.40

 $
 4.40

 Term, in years

 1.67

 2.39

 Interest rate

 %

 %

 115.00
 %

 105.00
 %

 4.42
 %

 3.89
 %

 %

 %

 F- 29

 (c)
 EB CD

 On
February 24, 2021, Engine issued a secured convertible debenture in the principal amount of $ 5.0 million. The EB CD was convertible into
units of the Company at a conversion price of $ 41.00 per unit, with each unit comprised of one common share and one-half of a warrant,
with each whole warrant exercisable into a common share at an exercise price of $ 60.00 per share for a period of three years from the
issuance of the EB CD. The EB CD had an original term of three years, with a maturity date of February 24, 2024. The convertible debenture
was secured by Engine's assets.

 On
December 29, 2023 (the EB CD extinguishment date), and on April 11, 2023 (the Arrangement completion date), the fair value of the EB
CD was estimated using the binomial lattice model with the below assumptions:

 Schedule of Detailed Information About Fair Value of Convertible Debentures

29, 2023

 April
11, 2023

 Share price

 $
 1.78

 $
 6.09

 Conversion price

 $
 41.00

 $
 41.00

 Term, in years

 0.16

 0.87

 Interest rate

 %

 %

 95.00
 %

 135.00
 %

 5.51
 %

 4.70
 %

 %

 %

 Convertible debt fair value assumptions

 %

 %

 The
change in fair values of the Company's convertible debentures subject to recurring remeasurement at fair value were as follows:

 Schedule of Convertible Debentures Subject to Recurring Remeasurement at Fair Value

 Three Curve CD

 EB CD

 King Street CD

 Total

 Balance, December 31, 2021
and 2022

 $
 -

 $
 -

 $
 -

 $
 -

 2,082,304

 5,029,029

 -

 7,111,333

 Interest expense

 63,288

 356,872

 4,052

 424,212

 Interest payments

 -

 ( 375,000
)

 -

 ( 375,000
)

 EB CD refinance

 ( 5,110,903
)

 6,665,640

 1,554,737

 Change in fair value (1)

 ( 638,356
)

 100,002

 -

 ( 538,354
)

 Balance, December 31, 2023

 $
 1,507,236

 $
 -

 $
 6,669,692

 $
 8,176,928

 Contractual principal balances outstanding:

 As of December 31, 2022

 $
 -

 $
 -

 $
 -

 $
 -

 As of December 31, 2023

 $
 1,250,000

 $
 -

 $
 5,800,000

 $
 7,050,000

 Contractual principal balances outstanding: As of December 31

 $
 1,250,000

 $
 -

 $
 5,800,000

 $
 7,050,000

 (1)
 None of the changes
in fair value during the period were due to instrument-specific changes in credit risk.

 13.
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 Company's 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 company's
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. The Company believes that it is more likely than not that the deferred tax assets will
be unable to be realized; accordingly, a full valuation allowance has been established and no deferred tax asset is shown in the Company's
balance sheet. As of December 31, 2023 and 2022, a valuation allowance of $ 66.8 million and $ 7.3 million, respectively, was established
mainly due to the realizability of Federal, State, and Foreign NOLs that will not likely be realized.

 F- 30

 The
components of net deferred taxes are as follows:

of components of deferred taxes

 $

 $

 Deferred tax assets

 Net operating loss

 64,233,526

 8,579,227

 Accrued expenses

 3,316,254

 -

 Lease liability

 873,716

 755,187

 Unrealized

 821,893

 -

 Capital loss

 621,686

 -

 Research and development

 196,501

 -

 Organization costs

 60,735

 79,417

 Charitable contributions

 3,876

 -

 Deferred revenue

 -

 155,765

 Gross deferred tax assets

 70,128,187

 9,569,596

 Valuation allowance

 ( 66,773,972
)

 ( 7,264,764
)

 Total deferred tax assets

 3,354,215

 2,304,832

 Deferred tax liabilities

 Fixed assets

 ( 541,895
)

 ( 820,386
)

 Right of use assets

 ( 468,383
)

 ( 667,501
)

 Intangibles

 ( 2,278,174
)

 ( 815,927
)

 Other

 ( 65,763
)

 ( 56,114
)

 Total deferred tax liabilities

 ( 3,354,215
)

 ( 2,359,928
)

 Net deferred tax assets (liabilities)

 -

)

 The
provision for income taxes consisted of the following:

of provision for income taxes

 For the year ended

 Current:

 Canada

 -

 -

 US

 -

 3,200

 Other Foreign

 -

 7,979

 Total current tax expense (benefit)

 -

 11,179

 Deferred:

 Canada

 -

 -

 US

 -

 -

 Other Foreign

)

 ( 315,548
)

 Total deferred tax expense (benefit)

)

 ( 315,548
)

 Total income tax expense (benefit)

)

 ( 304,369
)

 The
reconciliation between the income tax expense (benefit) calculated by applying statutory rates to net loss before income taxes and
the income tax expense (benefit) reported in the consolidated financial statements is as follows:

of reconciliation between income tax expense (benefits)

 For the year ended

 $

 $

 Income (loss) before income taxes

 ( 31,337,523
)

 ( 18,411,497
)

 Statutory income tax rate

 26.5
 %

 26.5
 %

 Expected income tax (benefit)

 ( 8,304,444
)

 ( 4,879,047
)

 Reconciling items:

 Change in valuation allowance

 5,424,830

 4,779,977

 Non-deductible expenses

 443,320

 108,155

 Other

 50,819

 ( 313,454
)

 Foreign rate differential

 2,330,379

 -

 Total income tax expense (benefit)

)

 ( 304,369
)

 The Company believes that income tax filing positions will be sustained upon examination and does not anticipate
any adjustments that would result in a material adverse effect on the Company's financial position, results of operations or cash flows.
Accordingly, the Company has not recorded any reserves, or related accruals or uncertain income tax positions at December 31, 2023 or
2022.

 The Company recognizes interest accrued related
to unrecognized tax benefits and penalties in income tax expense. The Company has no accruals for interest and penalties as of December
31, 2023 and 2022.

 Federal and state tax laws impose significant restrictions on the utilization of net operating loss carryforwards
in the event of a change in ownership of the Company, as defined by Internal Revenue Code Section 382 (Section 382). As of December 31,
2023, the Company has not performed a formal Section 382 study; however, the Company has reviewed its temporary taxable differences in
conjunction with its temporary deductible differences as a measure against its definite lived net operating losses and anticipates any
impact to be mitigated with additional net operating losses from temporary deductible differences. The Company has net operating loss
carryforwards for federal and state income tax purposes of approximately $ 27.3 million and $ 13.7 million, respectively, as of December
31, 2023 and 2022. The federal net operating loss carryforwards, if not utilized, will carryforward indefinitely. The state net operating
loss carryforwards, if not utilized, will expire beginning in 2037. As of December 31,2023, the Company also has unused net operating
losses in Canada, Spain, India and UK of $ 66.3 M. The foreign net operating loss carryforwards begin to expire in 2037.

 F- 31

 14.
 Shareholders' equity

 (a)
 Description of the Company's securities

 The
Company is authorized to issue an unlimited number of common shares, with no par value. H olders
of common shares are entitled to one vote in respect of each common share held at shareholder meetings of the Company.

 (b)
 Activity for the periods presented

 On
March 24, 2023 and December 29, 2023, an aggregate of 72,409 shares were issued in settlement of outstanding amounts payable of $ 0.2
million.

 On
April 11, 2023, 6,380,083 shares of the Company were issued for the completion of the Arrangement (see Note 4).

 On
April 3 and 10, 2023, an aggregate of 29,929 shares of the Company were issued to settle legal matters.

 On
March 10, 2023, 29,359 common shares of the Company were issued for contingent consideration on the acquisition of Cut+Sew (see Note
22(a)).

 On
September 30, 2022, the Company closed a non-brokered private placement financing of 617,585 units at a price of Canadian Dollar ("CAD")
$ 6.78 per unit for gross proceeds of $ 3.0 million (CAD$ 4.2 million). Each unit consists of one common share of the Company and 0.20 of
one common share purchase warrant. Each whole warrant entitles the holder thereof to acquire one additional common share at an exercise
price of CAD$9.68 commencing on September 30, 2023, and expiring on September 30, 2027. The gross proceeds were prorated to common shares
and warrants based on their relative fair values.

 On
August 11, 2022, the Company closed the third tranche of a non-brokered private placement. The Company issued 185,659 common shares of
the Company at a price of CAD$ 6.78 per common share for gross proceeds of $ 1.0 million (CAD$ 1.3 million). The Company incurred legal
and other expenses totaling $ 43 thousand in connection with the private placement.

 On
July 20, 2022, the Company closed the second tranche of a non-brokered private placement. The Company issued 19,132 common shares of
the Company at a price of CAD$ 6.78 per common share for gross proceeds of $ 0.1 million (CAD$ 0.1 million).

 On
May 30, 2022, the Company closed the first tranche of a non-brokered private placement. The Company issued 413,935 common shares of the
Company at a price of CAD$ 6.78 per common share for gross proceeds of $ 2.2 million (CAD$ 2.8 million). The Company incurred legal and
other expenses totaling $ 38 thousand in connection with the private placement.

the years ended December 31, 2023 and 2022, 125,148 and 68,250 shares were issued upon the vesting of RSUs (see Note 16(b)).

 15.
 Net loss per share

 As
the Company incurred a net loss for the years ended December 31, 2023 and 2022, 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:

 Schedule of Potential Common Shares that were Excluded as their Effect is Anti-Dilutive

 2023

 2022

 2023

 2022

 Options and RSUs outstanding

 1,081,218

 586,452

 Warrants outstanding

 1,635,802

 927,228

 Shares issuable upon conversion of convertible debt

 1,444,090

 -

 Total

 4,161,110

 1,513,680

 16.
 Share-based compensation

 The
Company grants Options for the purchase of common shares to its directors, officers, employees and consultants.

 On
April 11, 2023, the Company adopted the amended and restated Omnibus equity incentive plan ("Omnibus Plan"). Under the Omnibus
plan, the total number of common shares reserved and available for grant and issuance pursuant to stock options shall not exceed 10%
of the then issued and outstanding shares.

 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 Restricted Share Unit ("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
TSXV requires the Company to fix the number of common shares to be issued in settlement of awards that are not options. The maximum number
of Shares available for issuance pursuant to the settlement of RSU shall be an aggregate of 1,067,147 Shares.

 F- 32

 (a)
 Options

 The
following is a summary of Options outstanding as of December 31, 2023 and 2022, and changes during the years then ended, by Option exercise
currency:

 Schedule of Option Outstanding

 Number of shares

 Weighted-average

 exercise
price

 (CAD)

 Weighted-average remaining contractual term

 Aggregate intrinsic value

 Outstanding at December 31, 2021

 400,318

 $
 21.78

 3.86

 $
 -

 Granted

 95,000

 13.20

 Forfeited or expired

 ( 36,675
)

 22.44

 Outstanding at December 31, 2022

 458,643

 $
 19.95

 3.17

 $
 -

 Granted

 20,655

 6.29

 Forfeited or expired

 ( 62,677
)

 19.48

 Outstanding at December 31, 2023

 416,621

 $
 19.34

 2.96

 $
 -

 Exercisable at December 31, 2023

 407,584

 $
 19.63

 2.82

 $
 -

 Number of shares

 Weighted-average

 exercise
price

 (USD)

 Weighted-average remaining contractual term

 Aggregate intrinsic value

 Outstanding at December 31,
2021 and 2022

 -

 $
 -

 Acquisition of Engine (1)

 261,929

 5.15

 Forfeited or expired

 ( 12,110
)

 2.85

 Outstanding at December 31, 2023

 249,819

 $
 5.26

 4.36

 $
 -

 Exercisable at December 31, 2023

 237,771

 $
 5.32

 4.38

 $
 -

 (1)
 Awards of Engine
outstanding prior to the Arrangement accounted for as if granted on the Arrangement closing date.

 The
fair value of each CAD denominated Option awards was estimated on the date of grant using the Black-Scholes option pricing model
using the following significant assumptions:

of Fair Value of Each Option Award was Estimated Significant Assumptions

 2023

 2022

 Expected term, in years

 10.00

 4.30 - 5.00

 66.72
 %

 44.92 %
- 65.34
 %

 3.37
 %

 1.64 % - 3.39
 %

 %

 %

 Volatility
was estimated by using the average historical volatility of the Company. The expected life in years represents the period of
time that Options 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 life of the Options.

 F- 33

 Share-based
compensation expense related to the vesting of Options was $ 0.4 million and $ 0.6 million for the years ended December 31, 2023 and 2022,
respectively, and is included in general and administrative expense on the consolidated statements of operations and comprehensive loss.

 (b)
 RSUs

 The
following is a summary of RSUs outstanding on December 31, 2023, and December 31, 2022, and changes during the periods then ended:

of RSUs Outstanding

 Number of shares

 Weighted-average grant date fair value

 Outstanding at December 31, 2021

 108,273

 $
 15.88

 Granted

 87,783

 4.47

 Released

 ( 68,247
)

 15.50

 Outstanding at December 31, 2022

 127,809

 8.25

 41,442

 5.63

 Granted

 623,071

 3.00

 Exercised

 ( 125,139
)

 5.40

 Forfeited

 ( 2,586
)

 6.12

 Outstanding at December 31, 2023

 664,597

 $
 3.71

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

 Share-based
compensation expense related to the vesting of RSUs was $ 1.4 million and $ 1.0 million for the years ended December 31, 2023 and 2022,
respectively, and is included in general and administrative expense on the consolidated statements of operations and comprehensive loss.

 17.
 Warrants

 (a)
 Liability-classified warrants having CAD exercise price

 In
conjunction with completion of the Arrangement (see Note 4), outstanding warrants of GSQ were cancelled and the Company issued replacement
warrants with identical terms. The functional currency of the Company is USD and the replacement warrants have an exercise price in CAD.
The issuance of the replacement warrants was accounted for as a modification to equity-classified instruments that resulted in reclassification
to a liability. As a result, 927,228 warrants of GSQ with a modification date fair value of $ 0.9 million, were reclassified to a derivative
warrant liability in accordance with ASC 815, Derivatives and Hedging, on April 11, 2023. Furthermore, 269,601 of Engine's
warrants, with an acquisition date fair value of $ 0.2 million, included in the Engine reverse acquisition purchase consideration (see
Note 4), have an exercise price in CAD and are similarly liability classified. No liability-classified warrants were issued or outstanding
prior to the completion of the Arrangement.

 F- 34

 The
following is a summary of changes in the value of the warrant liability during the years ended December 31, 2023 and 2022:

 Schedule of Changes in Value of Warrant Liability

 Amount

 Balance, December 31, 2022 and 2021

 $
 -

 153,275

 Reclassify GSQ Esports Inc. warrants to warrant liability

 900,818

 Change in fair value

 ( 968,757
)

 Foreign exchange

 16,948

 Balance, December 31, 2023

 $
 102,284

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

 Schedule of Assumptions Fair Value of Warrant Liability

 April
11, 2023

 Share price

 CAD$ 2.91

 CAD$ 8.20

 Term, in years

 0.39 - 4.00

 0.28 - 4.47

 Exercise price

 CAD$ 6.29 - $ 30.00

 CAD$ 6.29 - $ 30.00

 90.00
 %

 90.00
 %

 4.25 % - 5.45
 %

 3.09 % - 4.55
 %

 %

 %

 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 life of the warrants.

 The
following is a summary of liability-classified warrants outstanding as of December 31, 2023 and 2022, and changes during the periods
then ended:

 Schedule of Warrants Outstanding

 Number of warrants

 Weighted-average exercise price (CAD)

 Outstanding, December 31, 2022 and 2021

 -

 $
 -

 269,601

 30.00

 Reclassify GSQ Esports Inc. warrants to warrant liability

 927,228

 23.51

 Warrants expired

 ( 438,918
)

 29.05

 Outstanding, December 31, 2023

 757,911

 $
 22.61

 (b)
 Equity-classified warrants

 As
discussed in Note 17(a) above, all of GSQ's warrants with a CAD exercise price were modified and reclassified to a warrant liability
on April 11, 2024. Furthermore, 877,891 of Engine's warrants, with an acquisition date fair value of $ 30 thousand, included in
the Engine reverse acquisition purchase consideration (see Note 4), have an exercise price in USD and are equity-classified. No other
equity-classified warrants were issued after the completion of the Arrangement.

 F- 35

 On
December 23, 2022, 16,177 warrants were issued in connection with a drawdown on the Facility (see Note 10). Each warrant entitles the
holder to purchase one common share of the Company at a price of CAD$ 6.29 until June 30, 2024. The fair value of the warrants was estimated
using the Black-Scholes option pricing model with the following weighted average assumptions: share price of CAD$ 6.05, expected dividend
yield of 0 %, expected volatility of 78.29 %, based on the historical volatility of comparable companies, a risk-free interest rate of
 3.9 % and an expected life of 1.5 years. The estimated fair value of the warrants of $ 27 thousand is included in interest expense in the
consolidated statements of operations and comprehensive loss for the year ended December 31, 2022.

 In
connection with the private placement on September 30, 2022 (Note 14(b)), 123,930 warrants were issued. Each warrant entitles the holder
to purchase one common share of the Company at a price of CAD$ 9.68 commencing on September 30, 2023 until September 30, 2027. The fair
value of the warrants of $ 0.1 million, was estimated using the Black-Scholes option pricing model with the following weighted average
assumptions: share price of CAD$ 9.68, expected dividend yield of 0 %, expected volatility of 64.69 %, based on the historical volatility
of comparable companies, a risk-free interest rate of 3.32 % and an expected life of 5 years.

 On
June 30, 2022, 92,829 warrants were issued in connection with the Facility (see Note 10). Each warrant entitles the holder to purchase
one common share of the Company at a price of CAD$ 6.78 until June 30, 2024. The fair value of the warrants was estimated using the Black-Scholes
option pricing model with the following weighted average assumptions: share price of CAD$ 5.08, expected dividend yield of 0 %, expected
volatility of 48.06 %, based on the historical volatility of comparable companies, a risk-free interest rate of 3.1 % and an expected life
of 2 years. The estimated fair value of the warrants of $ 0.1 million is included in interest expense in the consolidated statements of
operations and comprehensive loss for the year ended December 31, 2022.

 The
following is a summary of equity-classified warrants outstanding as of December 31, 2023 and 2022, and changes during the periods then
ended:

 Schedule of Warrants Outstanding

 Number of warrants

 Weighted-average exercise price (CAD)

 Outstanding, December 31, 2021

 953,986

 $
 26.14

 Warrants issued for private placements

 123,930

 9.68

 Warrants issued for credit facility

 109,005

 6.78

 Warrants expired

 ( 259,693
)

 19.37

 Outstanding, December 31, 2022

 927,228

 23.51

 Reclassify GSQ Esports Inc. warrants to warrant liability

 ( 927,228
)

 ( 23.51
)

 Outstanding, December 31, 2023

 -

 $
 -

 Number of warrants

 Weighted-average exercise price (USD)

 Outstanding, December 31, 2022

 -

 $
 -

 877,891

 60.00

 Outstanding, December 31, 2023

 877,891

 $
 60.00

 18.
 Related party transactions

 (a)
 Credit facility payable

 On
June 30, 2022, the Company entered into an agreement for a $ 5.0 million credit facility (the "Facility") for a one-year term
with Goff & Jones Lending Co, LLC., a related party to the Company by virtue of one of its directors. The Facility matured on June
30, 2023 (the "Maturity Date"). During the year ended December 31, 2023, the Company recognized $ 23 thousand in interest
expense and $ 80 thousand in legal fees in connection with the Facility. The Facility was paid off in April 2023, and has not been renewed
(see Note 10).

 F- 36

 (b)
 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 a director of the Company (see Note
12).

 (c)
 Other related party transactions

 Included
in accounts payable on the consolidated balance sheets as of December 31, 2022, is $ 0.2 million owed to the former chairman of the board
of directors of the Company. The former chairman left the Company during the year ended December 31, 2023, and the amount in accounts
payable is no longer considered a related party transaction.

 19.
 Commitments and contingencies

 In
April 2020, Engine announced its renegotiation of the acquisition of Allinsports. The revised purchase agreement provided for the acquisition
of 100 % of Allinsports in exchange for the issuance of 241,666 common shares of the Engine and other considerations, including payments
of $ 1,200,000 as a portion of the purchase consideration. In September 2020, Engine advised the shareholders of Allinsports that closing
conditions of the transaction, including the requirement to provide audited financial statements, had not been satisfied.

 In
response, in November 2020, the shareholders of Allinsports commenced arbitration in Alberta, Canada seeking, among other things, to
compel Engine to complete the acquisition of Allinsports without the audited financial statements, and to issue 241,666 common shares
of Engine to those shareholders. As alternative relief, the shareholders of Allinsports sought up to $ 20.0 million in damages. A hearing
in this matter was held in May of 2021, and by a decision dated September 30, 2021, the Arbitrator determined that the closing of the
transaction had previously occurred and directed Engine to issue 241,666 common shares. In conjunction with completion of the Arrangement
(see Note 4), the Company assumed this obligation to issue 241,666 common shares. The Company is pursuing regulatory approval to issue
the shares and is also pursuing relief against Allinsports shareholders for various alleged breaches of the share purchase agreement.
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 closing date of the Arrangement. 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.

 On
January 21, 2021, eight former shareholders of Winview filed a Complaint in Delaware Chancery Court against four Winview directors (David
Lockton, et al. v. Thomas S. Rogers, et al.) alleging that the defendants breached their fiduciary duties in connection with the sale
of Winview to Engine. The relief sought includes rescission of the sale of Winview to Engine and compensatory damages. The defendants
have filed a motion to dismiss the claims. By Decision dated March 1, 2022, the Court granted in part and denied in part, the defendants'
Motion to Dismiss the Complaint. Neither Engine nor Winview have been named as parties to this action. Under the March 9, 2020, Business
Combination Agreement pursuant to which Engine acquired Winview, Engine agreed to indemnify Winview's directors for any claims
arising out of their service as directors for Winview. This matter was settled in September 2023.

 In
July of 2021, Winview Inc. filed separate patent infringement lawsuits against DraftKings Inc. and FanDuel, Inc in the United States
District Court for the District of New Jersey, alleging that Sportsbook and Daily Fantasy Sports offerings of DraftKings and FanDuel
infringe four of Winview's patents. These actions seek the recovery of damages and other appropriate relief. Draft Kings and FanDuel
have filed motions to dismiss, which are pending, and the court's review of these motions has been suspended pending the outcome
of inter partes review proceedings filed with the United States Patent Office regarding some of the patents involved in these actions.
In September of 2023, in connection with the settlement of the Lockton action, Winview Inc. transferred patents, including the four that
are subject of the District Court actions, to an independent entity, WinView IP Holdings, LLC, which has assumed responsibility for the
prosecution of these actions.

 F- 37

 By
Order to Continue dated May 5, 2022, Engine was substituted in as the plaintiff in a matter pending in the Ontario Superior Court of
Justice, seeking recovery of $ 2.1 million ( 1.9 million) of principal and additional amounts of accrued interest under promissory
notes acquired by Engine. The matter is in the discovery stage.

 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.

 20.
 Discontinued operations and assets held for sale

 (a)
 Winview

 Winview's
operations were discontinued during the year ended December 31, 2022. In connection with the settlement of the Lockton case in September
2023 (see Note 19), Winview Inc. transferred certain patents and other assets and had promissory notes payable forgiven (see Note 4).
As a result, the Company recognized a non-cash gain of $ 0.3 million in gain from discontinued operations on the consolidated statements
of operations and comprehensive loss for the year ended December 31, 2023.

 (b)
 Biblos

the year ended December 31, 2022, the Company entered into an agreement to sell it's 40% share of Biblos, a previously consolidated
subsidiary, for $0.1 million. At the date of disposition, the carrying amount of the non-controlling interest was $ 0.1 million and the
net carrying amount of the assets and liabilities related to Biblos was $ 0.1 million. As a result, the Company recorded a loss on the
disposition of Biblos of $ 30 thousand, included in the consolidated statements of operations and comprehensive loss for the year ended
December 31, 2022.

 (c)
 Irati Energy Corporation ("Irati")

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

 On
April 25, 2022, the Company sold its investment in Irati for $ 49 thousand (CAD$ 63 thousand) or CAD$ 0.05 per common share of Irati.

 F- 38

 21.
 Revenue and Segmented Information

 The CODM
uses gross profit, as reviewed at periodic business review meetings, as the key measure of the Company's results as it reflects
the Company's underlying performance for the period under evaluation to determine resource allocation. As of December 31, 2023,
the Company was organized into the three operating segments, which also represent its three reportable segments: Teams, Agency and Software-as-service
(SaaS) + Advertising.

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

of Disaggregated into Geographic Regions

 Year ended December 31, 2023

 Segment

 USA

 Spain

 Total

 Teams

 $
 -

 $

 $
 -

 $

 2,853,754

 8,667,147

 -

 11,520,901

 -

 27,594,868

 2,187,612

 29,782,480

 Total Revenue

 2,853,754

 46,956,276

 2,187,612

 51,997,642

 Cost of sales

 Teams

 -

 7,350,015

 -

 7,350,015

 2,065,375

 6,012,551

 -

 8,077,926

 -

 22,879,308

 244,625

 23,123,933

 Total Cost of sales

 2,065,375

 36,241,874

 244,625

 38,551,874

 Teams

 -

 3,344,246

 -

 3,344,246

 788,379

 2,654,596

 -

 3,442,975

 -

 4,715,560

 1,942,987

 6,658,547

 Total Gross profit

 $
 788,379

 $
 10,714,402

 $
 1,942,987

 $
 13,445,768

 Year ended December 31, 2022

 Segment

 USA

 Mexico

 Total

 Teams

 $
 -

 $
 9,490,318

 $
 99,848

 $
 9,590,166

 4,976,874

 13,514,969

 -

 18,491,843

 Total Revenue

 4,976,874

 23,005,287

 99,848

 28,082,009

 Cost of sales

 Teams

 -

 5,143,592

 51,951

 5,195,543

 4,035,575

 9,194,275

 -

 13,229,850

 Total Cost of sales

 4,035,575

 14,337,867

 51,951

 18,425,393

 Teams

 -

 4,346,726

 47,897

 4,394,623

 941,299

 4,320,694

 -

 5,261,993

 Total Gross profit

 $
 941,299

 $
 8,667,420

 $
 47,897

 $
 9,656,616

 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:

of Property and Equipment net by Geographic Region

31, 2022

 USA

 $
 2,456,563

 $
 2,999,448

 1,814

 2,435

 Spain

 6,256

 -

 Total

 $
 2,464,633

 $
 3,001,883

 22.
 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.

 F- 39

 The
following table summarizes financial assets and liabilities measured at fair value on a recurring basis:

of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

 Description

 Level 1

 Level 2

 Level 3

 Total

 As of December 31, 2023

 Description

 Level 1

 Level 2

 Level 3

 Total

 Assets:

 Contingent consideration

 $
 -

 $
 -

 $
 501,118

 $
 501,118

 Liabilities:

 Warrant liability

 -

 -

 102,284

 102,284

 Arbitration reserve

 428,624

 -

 -

 428,624

 Convertible debt

 -

 -

 8,176,928

 8,176,928

 The
Company did not have any assets or liabilities measured at fair value on a recurring basis as of December 31, 2022, other than the Cut+Sew
contingent consideration (see Note 22(a) discussion below).

 (a)
 Contingent consideration payable

 Contingent
consideration in relation to the Company's acquisition of Cut+Sew on July 27, 2021, provided that the Company must pay (i) up to
$1.0 million (CAD$1.3 million) paid in common shares of the Company and up to $0.1 million (CAD$0.2 million) paid in cash if Cut+Sew
generates up to $1.0 million of EBITDA in the 12 months following the closing date of July 27, 2021 of the acquisition, and (ii) up to
$1.7 million (CAD$2.2 million) paid in common shares of the Company and up to $0.2 million (CAD$0.2 million) paid in cash if Cut+Sew
generates EBITDA of up to $1.5 million in the period of 12 to 24 months following the closing date of July 27, 2021, for a maximum contingent
consideration of up to $6.1 million (CAD$7.9 million) paid in cash and common shares. The estimated fair value of the contingent consideration
at the date of acquisition was $0.1 million, expected to be paid via issuance of common shares.

the year ended December 31, 2022, the Company revised the value of the contingent consideration, based the achievement certain of the
EBITDA targets by Cut+Sew, as the Company expected to pay $ 0.3 million in cash and issue 29,359 common shares of the Company with an estimated
value of $0.1 million. The cash consideration is included in consideration payable in the consolidated balance sheets as of December
31, 2022. The change in fair value of the contingent consideration of $0.3 million is included in the consolidated statements of operations
and comprehensive loss for the year ended December 31, 2022. During the year ended December 31, 2023, the Company issued 29,359 common
shares (see Note 14(b)) and paid cash of $0.3 million to settle the Cut+Sew contingent consideration.

 (b)
 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 investment in
One Up, accounted for under the measurement alternative of ASC 321 (see Note 5), 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.

 23.
 Subsequent events

 The
Company has evaluated subsequent events from the balance sheet date through April 16, 2024, 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.

 Merger
Agreement

 On
March 7, 2024 (the "Closing Date"), GameSquare Holdings, Inc., a Delaware corporation (and prior to the Domestication (as
defined below), a British Columbia corporation) (the "Company" or "GameSquare"), consummated the previously announced
merger (the "Closing") of FaZe Holdings Inc., a Delaware corporation ("FaZe"), pursuant to that certain Agreement
and Plan of Merger, dated October 19, 2023 (as amended, the "Merger Agreement"), by and among the Company, FaZe and GameSquare
Merger Sub I, Inc., a Delaware corporation and wholly owned subsidiary of GameSquare ("Merger Sub"), as amended by that certain
First Amendment to Agreement and Plan of Merger, dated December 19, 2023, by and among the Company, FaZe and Merger Sub (the "Amendment
to Merger Agreement"). The consummation of the Merger involved (i) prior to the Closing, the continuance of GameSquare from the
laws of the Province of British Columbia to the laws of the State of Delaware so as to become a Delaware corporation (the "Domestication")
and (ii) the merger of Merger Sub with and into FaZe, with FaZe continuing as the surviving corporation and wholly-owned subsidiary of
GameSquare (the "Merger"), as well as the other transactions contemplated in the Merger Agreement.

 Merger
Consideration

 At
the effective time of the Merger (the "Effective Time"): (i) each outstanding share of FaZe common stock, par value $ 0.0001
per share (the "FaZe Common Stock") issued and outstanding immediately prior to the Effective Time (other than shares held
in treasury by FaZe or held directly by GameSquare or Merger Sub (which such shares were cancelled)) was converted into the right to
receive 0.13091 (the "Exchange Ratio") of a fully paid non-assessable share of common stock, par value $ 0.0001 per share,
of GameSquare (the "GameSquare Common Stock") and, if applicable, cash in lieu of fraction shares of FaZe Common Stock, subject
to applicable withholding, (ii) each share of common stock, par value $ 0.001 per share, of Merger Sub that was issued and outstanding
immediately prior to the Effective Time was converted into one validly issued, fully paid and non-assessable share of common stock, par
value $ 0.001 per share, of FaZe Common Stock.

 F- 40

 Treatment
of Equity Awards

 In
addition, effective as of immediately prior to the Effective Time, all of the outstanding FaZe equity awards, including options to purchase
shares of FaZe Common Stock, each share of FaZe Common Stock subject to vesting, repurchase or other lapse of restrictions, and each
FaZe restricted stock unit convertible into shares of FaZe Common Stock, was assumed by GameSquare and converted into GameSquare equity
awards on substantially the same terms, except that the assumed equity awards will cover a number of shares of GameSquare Common Stock
and, if applicable, have an exercise price determined using the Exchange Ratio.

 Also
at the Effective Time, all outstanding warrants to purchase shares of FaZe Common Stock were assumed by GameSquare and converted into
warrants to purchase shares of GameSquare Common Stock on substantially the same terms, except that the assumed warrants cover a number
of shares of GameSquare Common Stock, and have an exercise price, determined using the Exchange Ratio.

 Post-Closing
Governance

 In
connection with the Merger and in accordance with the Merger Agreement, effective as of the Closing, the board of directors of the Company
(the "Board") increased the size of the Board from six to nine members and appointed Paul Hamilton and Nick Lewin (each,
a "New Director" and collectively, the "New Directors"), who were previously members of FaZe's board of
directors, to serve on the Board, in each case, to hold office until their successors are duly elected and qualified or their earlier
death, resignation or removal. Following the appointment of the New Directors, there remains one vacancy on the Board. Pursuant to the
Merger Agreement, such vacancy is to be filled at such time that the Board duly elects an individual to serve in such capacity in accordance
with the Bylaws and the terms of the Merger Agreement. It has not yet been determined on which committees of the Board Mr. Hamilton and
Mr. Lewin will serve.

 PIPE
Financing

 Substantially
concurrently with the consummation of the Merger, the Company completed its previously announced private placement in public equity financing
(the "PIPE Financing"). In connection with the PIPE Financing, the Company entered subscription agreements (the "Subscription
Agreements") with certain investors (the "PIPE Investors"), pursuant to which the Company issued to the PIPE Investors
an aggregate of 7,194,244 units at a purchase price per unit of $ 1.39, for aggregate gross proceeds of $ 10.0 million. Each unit consists
of one share of GameSquare Common Stock and a warrant to purchase 0.15 shares of GameSquare Common Stock. As a result, the Company issued
an aggregate of 7,194,224 shares of GameSquare Common Stock (the "PIPE Shares") and warrants to purchase up to 1,079,136
shares of GameSquare Common Stock (the "PIPE Warrants) pursuant to the PIPE Financing. Each whole PIPE Warrant is exercisable for
 one share of GameSquare Common Stock at an exercise price of $ 1.55 per share for a period of five years after the Closing Date.

 The
PIPE Shares and PIPE Warrants are subject to a four month hold period under Canadian securities laws expiring four months following the
Closing Date. The PIPE Shares will not be registered under the Securities Act of 1933, as amended (the "Securities Act"),
or any U.S. state securities laws, and were issued pursuant to and in accordance with the exemption from registration under the Securities
Act, under Section 4(a)(2) and/or Regulation D promulgated under the Securities Act. The securities may not be offered or sold in the
United States absent registration or pursuant to an exemption from the registration requirements of the Securities Act and applicable
U.S. state securities laws.

 The
Company also entered into Registration Rights Agreements with the PIPE Investors (the "Registration Rights Agreements").
The Registration Rights Agreements provide, among other things, that the Company will as promptly as reasonably practicable, and in any
event no later than 150 days after the Closing Date (the "Filing Deadline"), file with the SEC (at the Company's sole
cost and expense) a registration statement registering the resale of the PIPE Shares and the shares of GameSquare Common Stock underlying
the PIPE Warrants issued to the PIPE Investors, and will use its commercially reasonable efforts to have such registration statement
declared effective as soon as practicable after the filing thereof, but no later than the earlier of (i) the 90th calendar day following
the Filing Deadline if the SEC notifies the Company that it will "review" such registration statement and (ii) the fifth
business day after the date the Company is notified (orally or in writing) by the SEC that such registration statement will not be "reviewed"
or will not be subject to further review.

 The
Company had previously entered into a backstop agreement (the "Backstop Agreement") with Goff Jones Strategic Partners, LLC
(formerly known as Goff & Jones Lending Co, LLC) ("Goff Jones"), to purchase common stock to ensure the PIPE was fully
subscribed. The Backstop Agreement was originally announced on October 20, 2023. A total of $ 6.0 million of securities were issued to
Goff Jones in connection with the Backstop Agreement.

 Complexity
Membership Interest Purchase Agreement

 On
March 1, 2024, Global Esports Properties, LLC, a Delaware limited liability company ("Buyer"), GameSquare Esports (USA),
Inc., a Nevada corporation ("Seller") and sole member of NextGen Tech, LLC, a Texas limited liability company doing business
as Complexity Gaming, and GameSquare Holdings, Inc., a corporation formed under the laws of the province of Ontario ("Beneficial
Owner") (together, the "Parties") entered into a Membership Interest Purchase Agreement (the "MIPA") for
the purchase of all issued and outstanding interests (the "Interests") of NextGen Tech, LLC, a Texas limited liability company
doing business as Complexity Gaming (the "Transaction").

 The
purchase price for the acquired Interests was $ 10.4 million, subject to final determination and adjustment pursuant to the purchase price
adjustment mechanism set forth in the MIPA (the "Purchase Price"). $ 0.8 million of the Purchase Price was paid in cash at
closing and the remainder was paid at closing by delivery of a secured subordinated promissory note (the "Note") in favor
of the Seller in the principal amount of $ 9.6 million (the "Principal Amount"). Under the Note, the Company is required pay
the Principal Amount of the Note, together with all accrued interest (accrued at a rate equal to 3 % per annum), fees, premium, charges,
costs, and expenses no later than thirty-six (36) months from the date of the Note.

 The
Note is secured pursuant to a Security Agreement (the "Security Agreement"), which provides for a security interest in Buyer's
collateral (as defined in the Security Agreement) to secure any and all indebtedness, obligations, liabilities, and undertakings under
or in respect of the Note.

 The
Parties' obligation to complete the Transaction contemplated by the MIPA is subject to certain conditions, including approval by
TSXV, which is still outstanding. Accordingly, the Transaction described herein is subject to risk of completion.

 The
MIPA contains customary representations, warranties, indemnification obligations and agreements of the Parties.

 F- 41

 Item
9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 None.

 Item
9A. Controls and Procedures

 Evaluation
of Disclosure Controls and Procedures

 Disclosure
controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our
reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in
the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated
to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

 As
required by Rules 13a-15 and 15d-15 under the Exchange Act, our management carried out an evaluation of the effectiveness of the design
and operation of our disclosure controls and procedures under the supervision of our Chief Executive Officer and our Chief Financial
Officer and concluded that our disclosure controls and procedures were not effective as of December 31, 2023. Material weaknesses relating
to the Design and Implementation of Control Activities and Monitoring Activities were identified. The Company did not have sufficient
resources with the relevant expertise to perform an effective risk assessment process, design and implement controls supported by documentation
and provide evidence that such controls designed was based on the COSO Framework.

 The
material weaknesses in risk assessment, control activities and monitoring activities contributed to the following material weaknesses:
(i) the Company did not complete a documented risk assessment, and (ii) the Company did not identify all risks and design relevant controls
related to system of internal controls. As a consequence of the aggregation of the foregoing deficiencies in the Company's DC&P
and ICFR design, the Company did not have effective control activities related to the design of process-level and management review control
activities. Aside from these deficiencies, management believes that the Company's consolidated financial statements for year ended
December 31, 2023, present fairly in all material respects, the Company's financial position, results of operations, changes in
shareholders' equity and cash flows in accordance with U.S GAAP. The Company does not believe and is not aware of any circumstance
in which the potential weaknesses have impacted the Company's financial reporting and as a result, there were no material adjustments
to the Company's consolidated financial statements for the year ended December 31, 2023. In addition, there were no changes to
previously released financial results. However, if the collective deficiencies were deemed to create a material weakness, a material
misstatement to our consolidated financial statements might not be prevented or detected on a timely basis.

 Management's
Annual Report on Internal Control over Financial Reporting

 Management
is responsible for designing, implementing and maintaining adequate internal control over financial reporting, as such term is defined
in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Internal controls, no matter how well designed, have inherent limitations. Therefore,
even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and
presentation. Further, because of changes in conditions, the effectiveness of internal control over financial reporting may vary over
time.

 Under
the supervision and with the participation of our management, including our principal executive officers and principal financial officer,
we conducted an evaluation of the effectiveness of our internal controls over financial reporting as of December 31, 2023, based on the
criteria related to internal control over financial reporting described in "Internal Control – Integrated Framework (2013)"
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on our evaluation, management concluded
that our internal control over financial reporting were not effective as of December 31, 2023, due to the material weaknesses described
above.

 Management's
Remediation Measures

 To
address the deficiencies identified, management, with oversight of the Audit Committee, has implemented, or will implement, remediation
measures to further address the deficiencies in the design of its DC&P and ICFR. The Company intends to complete such remedial measures
by December 31, 2025. Management has also performed an initial risk assessment using a top-down, risk-based approach with respect to
the risks of material misstatement of the consolidated financial statements. In addition, compensating controls have been applied to
a number of areas where the risks of material misstatement are considered moderate to high. The Company is engaging outside resources
to strengthen the business process documentation and help with management's self assessment and testing of internal controls. Although
the Company can give no assurance that these actions will remediate these deficiencies or that additional deficiencies or a material
weaknesses will not be identified in the future, management believes the foregoing efforts will, when implemented, strengthen our DC&P
and ICFR. Management will take additional remedial actions as necessary as they continue to evaluate and work to improve the Company's
control environment.

 Changes
in Internal Control over Financial Reporting

 There was no change in our internal control over financial reporting that
occurred during the year ended December 31, 2023 covered by this Annual Report on Form 10-K that has materially affected, or is reasonably
likely to materially affect, our internal control over financial reporting.

 Attestation Report of Independent Registered Public
Accounting Firm

 This Annual Report on Form 10-K does not include
an attestation report of our registered public accounting firm regarding internal control over financial reporting, as such report is
not required due to our status as an emerging growth company.

 Item
9B. Other Information

 None.

 Item
9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 None.

 PART
III

 Item
10. Directors, Executive Officers and Corporate Governance

 The
information required by this Item 10 is incorporated herein by reference to the Company's definitive proxy statement (the "Proxy
Statement"), which is expected to be filed with the SEC pursuant to Regulation 14A within 120 days following the end of the fiscal
year covered by this report.

 Item
11. Executive Compensation

 The
information required in Item 11 is incorporated by reference to the information in the Proxy Statement, which will be filed with the
SEC no later than 120 days subsequent to December 31, 2023.

 Item
12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 The
information required in Item 12 is incorporated by reference to the information in the Proxy Statement, which will be filed with the
SEC no later than 120 days subsequent to December 31, 2023.

 Item
13. Certain Relationships and Related Transactions, and Director Independence

 The
information required in Item 13 is incorporated by reference to the information in the Proxy Statement, which will be filed with the
SEC no later than 120 days subsequent to December 31, 2023.

 Item
14. Principal Accounting Fees and Services

 The
information in Item 14 has been omitted from this report, and is incorporated by reference to the information in the Proxy Statement,
which will be filed with the SEC no later than 120 days subsequent to December 31, 2023.

 PART
IV

 Item
15. Exhibits and Financial Statement Schedules

 EXHIBIT
 NUMBER

 DESCRIPTION
 OF EXHIBITS

 2.1

 Agreement
 and Plan of Merger, dated as of October 19, 2023, by and among Registrant, GameSquare Merger Sub I, Inc., and FaZe Holdings Inc.
 (incorporated by reference to Exhibit 2.1 to Registrant's Current Report on Form 6-K filed with the SEC on October 20, 2023).

 2.2

 First
 Amendment to Agreement and Plan of Merger, dated as of December 19, 2023, by and among Registrant, GameSquare Merger Sub I, Inc.,
 and FaZe Holdings Inc. (incorporated by reference to Exhibit 2.1 to Registrant's Current Report on Form 6-K, filed with the
 SEC on December 22, 2023).

 3.1

 Certificate
 of Incorporation of GameSquare Holdings, Inc. (incorporated by reference to Exhibit 3.1 to the Registrant's Current Report
 on Form 8-K, filed with the SEC on March 13, 2024).

 3.2

 Bylaws
 of GameSquare Holdings, Inc. (incorporated by reference to Exhibit 3.2 to the Registrant's Current Report on Form 8-K, filed
 with the SEC on March 13, 2024).

 4.1

 Form
 of PIPE Warrant (incorporated by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K, filed with the SEC
 on March 13, 2024).

 4.2**

 Description of Securities.

 10.1

 Form
 of Subscription Agreement (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K, filed
 with the SEC on March 13, 2024).

 10.2

 Backstop
 Agreement, dated as of October 19, 2023, by and among Registrant and Goff & Jones Lending Co, LLC (incorporated by reference
 to Exhibit 10.3 to Registrant's Current Report on Form 6-K filed with the SEC on October 20, 2023).

 10.3

 Form
 of Registration Rights Agreement (incorporated by reference to Exhibit 10.3 to the Registrant's Current Report on Form 8-K,
 filed with the SEC on March 13, 2024).

 10.4

 Membership
 Interest Purchase Agreement, dated as of March 1, 2024, by and among Global Esports Properties, LLC, GameSquare Esports (USA), Inc.,
 and GameSquare Holdings, Inc. (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K, filed
 with the SEC on March 4, 2024).

 10.5

 Secured
 Promissory Note, dated as of March 1, 2024, by and between Global Esports Properties, LLC and GameSquare Esports (USA), Inc. (incorporated
 by reference to Exhibit 10.2 to the Registrant's Current Report on Form 8-K, filed with the SEC on March 4, 2024).

 10.6

 Security
 Agreement, dated as of March 1, 2024, by and between Global Esports Properties, LLC and GameSquare Esports (USA), Inc. (incorporated
 by reference to Exhibit 10.3 to the Registrant's Current Report on Form 8-K, filed with the SEC on March 4, 2024).

 10.7

 Asset
 Purchase Agreement, dated as of November 10, 2023, by and among Frankly Media LLC, GameSquare Holdings, Inc., and SoCast Inc. (incorporated
 by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K, filed with the SEC on January 4, 2024).

 10.8

 Amendment
 No. 1 to the Asset Purchase Agreement, dated as of December 15, 2023, by and among Frankly Media LLC, GameSquare Holdings, Inc.,
 and SoCast Inc. (incorporated by reference to Exhibit 10.2 to the Registrant's Current Report on Form 8-K, filed with the SEC
 on January 4, 2024).

 10.9

 Amendment
 No. 2 to the Asset Purchase Agreement, dated as of December 22, 2023, by and among Frankly Media LLC, GameSquare Holdings, Inc.,
 and SoCast Inc. (incorporated by reference to Exhibit 10.3 to the Registrant's Current Report on Form 8-K, filed with the SEC
 on January 4, 2024).

 10.10

 Amendment
 No. 3 to the Asset Purchase Agreement, dated as of December 27, 2023, by and among Frankly Media LLC, GameSquare Holdings, Inc.,
 and SoCast Inc. (incorporated by reference to Exhibit 10.4 to the Registrant's Current Report on Form 8-K, filed with the SEC
 on January 4, 2024).

 10.11

 Convertible
 Note, dated as of December 29, 2023, by and between GameSquare Holdings, Inc. and King Street Partners LLC. (incorporated by reference
 to Exhibit 10.5 to the Registrant's Current Report on Form 8-K, filed with the SEC on January 4, 2024).

 10.12

 Security
 Agreement, dated as of December 29, 2023, by and between GameSquare Holdings, Inc. and King Street Partners LLC (incorporated by
 reference to Exhibit 10.6 to the Registrant's Current Report on Form 8-K, filed with the SEC on January 4, 2024).

 10.13

 Form
 of FaZe Support Agreement, dated as of October 19, 2023, by and between GameSquare Holdings, Inc. and certain stockholders of FaZe
 Holdings Inc. (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 6-K, filed with the SEC
 on October 20, 2023).

 10.14

 Form
 of GameSquare Support Agreement, dated as of October 19, 2023, by and between FaZe Holdings Inc. and certain stockholders of GameSquare
 Holdings, Inc. (incorporated by reference to Exhibit 10.2 to the Registrant's Current Report on Form 6-K, filed with the SEC
 on October 20, 2023).

 10.15

 Backstop
 Agreement, dates as of October 19, 2023, by and among GameSquare Holdings, Inc. and Goff & Jones Lending Co, LLC (incorporated
 by reference to Exhibit 10.3 to the Registrant's Current Report on Form 6-K, filed with the SEC on October 20, 2023).

 10.16

 Financing
 and Security Agreement dated as of September 14, 2023 (incorporated by reference to Exhibit 10.1 to the Registrant's Current
 Report on Form 6-K filed with the SEC on September 27, 2023).

 10.17

 Intercreditor
 Agreement dated as of September 14, 2023(incorporated by reference to Exhibit 10.2 to the Registrant's Current Report on Form
 6-K filed with the SEC on September 27, 2023).

 21**

 Subsidiaries of GameSquare Holdings, Inc.

 23**

 Consent of Kreston GTA LLP.

 31.1**

 Certification of Principal Executive Officer pursuant to Rule 13(a)-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of Sarbanes-Oxley Act of 2002.

 31.2**

 Certification of Principal Financial Officer pursuant to Rule 13(a)-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of Sarbanes-Oxley Act of 2002.

 32.1**

 Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 32.2**

 Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 97**

 Clawback Policy.

 101.INS

 101.SCH

 101.CAL

 101.DEF

 101.LAB

 101.PRE

 Cover

 **

 Included
 herewith.

 SIGNATURES

 Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

 Date: April 16, 2024

 GameSquare Holdings, Inc.

 By:

 /s/ Justin
 Kenna

 Justin Kenna

 Chief Executive
 Officer

 (Principal
 Executive Officer)

 Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

 Signature

 Title

 Date

 /s/
 Justin Kenna

 Chief
 Executive Officer and Director

 April

 Justin
 Kenna

 (Principal
 Executive Officer)

 /s/
 Michael Munoz

 Chief
 Financial Officer

 April

 Michael
 Munoz

 (Principal
 Financial Officer)

 /s/
 Stuart Porter

 April

 Stuart
 Porter

 /s/
 Tom Walker

 April

 Tom
 Walker

 /s/
 Travis Goff

 April

 Travis
 Goff

 /s/Jeremi
 Gorman

 April

 Jeremi
 Gorman

 /s/
 Lou Schwartz

 April

 Lou
 Schwartz