Company: GAME
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001641172-25-004869
Chunk: 177

Company: GameSquare Holdings, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1B
Chunk 177
---

As described in Note 4(c) to the consolidated financial
statements, during the year ended December 31, 2024, all issued and outstanding FaZe common shares in exchange for 0.13091 of a GameSquare
common share for each FaZe common share. The identifiable assets acquired, and the liabilities assumed are measured at fair value as of
the acquisition date. Where the net of the fair value of the identified assets acquired and liabilities assumed is less than the fair
value of consideration transferred, the difference is recognized as goodwill. In assessing fair value of the acquired assets, liabilities
and consideration, management used various valuation techniques involving significant judgment and subjectivity.

We considered this to be a critical audit matter due
to the complexity involved in the valuation of the acquired intangible assets and consideration. This resulted in a high degree of auditor
judgment, subjectivity and effort in performing procedures and evaluating the audit evidence related to management’s estimates.

How the Critical Audit Matter Was Addressed in
the Audit

We responded to this matter by performing procedures
over management’s valuation techniques in determining fair value of the acquired intangible assets and consideration. Our audit
work in relation to this included, but was not restricted to, the following:

■Obtaining an understanding of
internal controls over the Company’s process for accounting of acquisitions.

■Analyzed the signed purchase
agreements to obtain an understanding of the key terms and related accounting considerations. 

■Tested the mathematical accuracy
of management’s valuation models and supporting calculations. 

■Evaluated the fair value of
the consideration transferred. 

■Evaluated the reasonableness
of key assumptions in management’s model such as projected revenue growth rates, EBITDA margins, tax rates, discount rates and testing
of historical financial results. 

■With the assistance of valuation
specialists, evaluated the reasonableness of management’s model, through assessing the appropriateness of valuations models used
and testing the significant assumptions and inputs by: 

○Comparing to externally available
industry and economic trends; 

○Evaluating budgets and forecasts
for future operations; and 

○Comparing against guideline
companies within the same industry. 

■Assessed the appropriateness
of the disclosures relating to the acquisitions in the notes to the consolidated financial statements.

F-3

Impairment
of goodwill and intangible assets

Description
of the Matter

The
Company tests goodwill for impairment annually, as of December, or