Company: GAME
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023589
Chunk: 244

Company: GameSquare Holdings, Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 2
Chunk 244
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 third-party distributor and accounts for this as a reduction to revenue. The Company does not
offer loyalty programs or other sales incentive programs that are material to revenue recognition. Payment is due at the time of sale.
The Company has outsourced the design, manufacturing, fulfillment, distribution, and sale of the Company’s consumer products to
a third party in exchange for royalties based on the amount of revenue generated. Management evaluated the terms of the agreement to
determine whether the Company’s consumer products revenues should be reported gross or net of royalties paid. Key indicators that
management evaluated in determining whether the Company is the principal in the sale (gross reporting) or an agent (net reporting) include,
but are not limited to:

    ●
    the Company is the party
    that is primarily responsible for fulfilling the promise to provide the specified good or service,

    ●
    the Company has inventory
    risk before the good is transferred to the customer, and

    ●
    the Company is the party
    that has discretion in establishing pricing for the specified good or service.

Based
on management’s evaluation of the above indicators, the Company reports consumer products revenues on a gross basis.

42

Esports

League
Participation: Generally, The Company has one performance obligation—to participate in the overall Esport event—because
the underlying activities do not have standalone value absent the Company’s participation in the tournament or event. Revenue from
prize winnings and profit-share agreements is variable and is highly uncertain. The Company recognizes revenue at the point in time when
the uncertainty is resolved.

Player
Transfer Fees: Player transfer agreements include a fixed fee and may include a variable fee component. The Company recognizes the
fixed portion of revenue from transfer fees upon satisfaction of the Company’s performance obligation, which coincides with the
execution of the related agreement. The variable portion of revenue is considered highly uncertain and is recognized at the point in
time when the uncertainty is resolved.

Licensing
of Intellectual Property: The Company’s licenses of intellectual property generate royalties that are recognized in accordance
with the royalty recognition constraint. That is, royalty revenue is recognized at the time when the sale occurs.

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