18. Warrants

(a) Liability-classified warrants having CAD exercise price

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

The following is a summary of changes in the value of the warrant liability (CAD exercise price) during the years ended December 31, 2025 and 2024:

 Schedule of changes in value of warrant liability

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

 Schedule of assumptions fair value of warrant liability

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

The following is a summary of liability-classified warrants outstanding (CAD exercise price) as of December 31, 2025 and 2024, and changes during the years then ended:

 Schedule of warrants outstanding

(b) Liability-classified warrants having USD exercise price

Beginning July 18, 2025, after closing of the offering of its common shares, the Company no longer had sufficient unissued authorized common shares to cover its outstanding equity-classified warrants. As a result, beginning on July 18, 2025 and through December 31, 2025, these warrants were reclassified to warrant liability. The Company reclassed all equity-classified warrants to warrant liability, in the amount of $9.1 million, the fair value of all outstanding equity-classified warrants as of that date. These warrants will be reclassed back to equity-classified warrants after the Company successfully increases its common share authorization.

The following is a summary of changes in the value of the warrant liability (USD exercise price) during the years ended December 31, 2025 and 2024:

Summary of changes in value of warrant liability

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

Schedule of assumptions to determine fair value of warrant liability

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

The following is a summary of liability-classified warrants outstanding (USD exercise price) as of December 31, 2025 and 2024, and changes during the years then ended:

Summary of liability-classified warrants outstanding

(c) Equity-classified warrants

As discussed in Note 15, in connection with the registered offerings that closed on July 9, 2025 and July 18, 2025, the Company issued underwriter warrants as additional consideration to the underwriter.

On July 9, 2025, 968,421 warrants were issued to the underwriter, representing 10% of the common shares issued in the offering. The warrants have a strike price of $1.14 per warrant and are exercisable for a period of five years. The total fair value of the underwriter warrants issued was $1.8 million, and included within additional paid-in capital on the consolidated balance sheet.

On July 18, 2025, 5,016,666 warrants were issued to the underwriter, representing 10% of the common shares issued in the offering. The warrants have a strike price of $1.80 per warrant and are exercisable for a period of five years. The total fair value of the underwriter warrants issued was $5.9 million, and included within additional paid-in capital on the consolidated balance sheet.

On July 1, 2025, 600,000 warrants were issued to Dialectic for services. The warrants have an exercise price of $1.00 and are exercisable for a period of three years. The total fair value of the warrants issued was $0.3 million, and included within General and administrative expense on the consolidated statement of operations and comprehensive loss.

As discussed in Note 4 above in conjunction with the acquisition of FaZe, the Company issued 775,415 warrants with an acquisition fair value of $26 thousand, included in the FaZe acquisition purchase price consideration.

As discussed in Note 15, in conjunction with the PIPE Financing on March 7, 2024, 1,079,136 warrants were issued with an exercise price of $1.55 and a contractual term of 5 years. The relative fair value of the warrants of $1.1 million was estimated using the Black-Scholes option pricing model with the following assumptions: share price of $1.56, expected dividend yield of 0%, expected volatility rate of 120.00%, based on the historical volatility of comparable companies, a risk free rate of 3.36% and an expected life of 5 years. The warrants have an exercise price in USD and are equity-classified.

Beginning July 18, 2025, after closing of the offering of its common shares, the Company no longer had sufficient unissued authorized common shares to cover its outstanding equity-classified warrants. As a result, beginning on July 18, 2025 and through December 31, 2025, these warrants were reclassified to warrant liability. The Company reclassed all equity-classified warrants to warrant liability, in the amount of $9.1 million, the fair value of all outstanding equity-classified warrants as of that date. These warrants will be reclassed back to equity-classified warrants after the Company successfully increases its common share authorization.

The following is a summary of equity-classified warrants outstanding as of December 31, 2025 and 2024, and changes during the years then ended:

 Schedule of warrants outstanding