Company: GAME
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023589
Chunk: 258

Company: GameSquare Holdings, Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 2
Chunk 258
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 impact to our consolidated financial
statements as we did not have any cryptocurrency holdings at adoption. Due in particular to the volatility in the price of cryptocurrencies,
we expect the adoption of ASU 2023-08 to have a material impact on our financial results in future periods, increase the volatility of
our financial results, and affect the carrying value of our cryptocurrency on our balance sheet, and it could also have adverse tax consequences,
which in turn could have a material adverse effect on our financial results and the market price of our Common Stock. Additionally, as
a result of ASU 2023-08 requiring a cumulative-effect adjustment to our opening balance of retained earnings as of the beginning of the
annual period in which we adopt the guidance and not permitting retrospective restatement of our historical financial statements, our
future results will not be comparable to results from periods prior to our adoption of the guidance.

50

The
broader digital assets industry, including the technology associated with digital assets, the rate of adoption and development of, and
use cases for, digital assets, market perception of digital assets, and the legal, regulatory, and accounting treatment of digital assets
are constantly developing and changing, and there may be additional risks in the future that are not possible to predict.

Changes
in our ownership of cryptocurrency could have accounting, regulatory and other impacts, as well. For example, our indirect ownership
of Ethereum through ownership interests in a fund that owns such cryptocurrencies and deemed ownership via ownership of cryptocurrency
derivative assets may impact the accounting treatment for our cryptocurrencies, our ability to use our cryptocurrencies as collateral
for additional borrowings, and the regulatory requirements to which we are subject, may correspondingly change. For example, the volatile
nature of cryptocurrencies may force us to liquidate our holdings to use it as collateral, which could be negatively impacted by any
disruptions in the cryptocurrency market, and if liquidated, the value of the collateral would not reflect potential gains in market
value of our cryptocurrency.

The
U.S. federal income tax treatment of transactions in digital assets is unclear.

Due
to the new and evolving nature of digital assets and the absence of comprehensive guidance with respect to digital assets, many significant
aspects of the U.S. federal income tax treatment of digital assets are uncertain. Our operations and dealings, in or in connection with
digital assets, as well as transactions in digital assets generally, could be subject to adverse tax consequences in the United States,
including as a result of development of the legal regimes surrounding digital