Company: GAME
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023589
Chunk: 24

Company: GameSquare Holdings, Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 24
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 date
fair value on May 31, 2024. During the second quarter of 2025, the Company recorded a full reserve on the UNIV Note of $1.5 million as
the buyer ceased making payments under the note. The reserve for credit losses was recorded within Net income (loss) from discontinued
operations on the consolidated statements of operations and comprehensive loss.

During
the third quarter of 2025, the Company executed a plan to discontinue the operations of Frankly, following a strategic decision to focus
the Company’s resources on its full-service creative agency, SaaS and newly launched digital asset treasury. Subsequent to the
Frankly asset disposal discussed above, the business of Frankly that remained was its legacy programmatic advertising operation. Given
its single digit-gross margins and operating losses, management deemed it in the best interest of the Company to discontinue operations
of Frankly. During the three and nine months ended September 30, 2025, Frankly met the requirements to be reported as discontinued operations
(see Note 19).

    12

(d)
Faze Media, Inc. asset contribution

On
May 2, 2024, the Company created FaZe Media, Inc. (“Faze Media”). On May 15, 2024, the Company entered into a business venture
with Gigamoon Media, LLC (“Gigamoon”). As part of this venture, the Company contributed certain media assets of Faze Clan,
Inc. to Faze Media and Gigamoon invested $11.0 million in Faze Media in exchange for 11,000,000 shares of Series A-2 Preferred Stock
of Faze Media, 49% of Faze Media’s voting equity interests, pursuant to a Securities Purchase Agreement (the “SPA”).
The Company was issued 11.45 million shares of Series A-1 Preferred Stock of Faze Media, 51% of Faze Media’s voting equity interests.

On
June 17, 2024, the Company entered into an agreement to sell 5,725,000 of its 11,450,000 shares of Series A-1 Preferred Stock of Faze
Media to M40A3 LLC (“M4”) in exchange for $9.5 million (the “June SPA”). The first 2,862,500 share tranche
was issued on June 17, 2024 for consideration of $4.75 million and the remaining 2,862