Company: GAME
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001641172-25-004869
Chunk: 41

Company: GameSquare Holdings, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1
Chunk 41
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 at live or virtual events. Revenues are recognized at a point
in time, as control is transferred to the customer upon shipment. The Company offers customer returns and discounts through a 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.

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.

25

Influencer
promotional fees

Influencer