Company: GAME
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-023972
Chunk: 96

Company: GameSquare Holdings, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 1
Chunk 96
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reement (the “MIPA”) to sell all of the issued and outstanding equity interest of NextGen Tech, LLC (“Complexity”)
to Global Esports Properties, LLC (the “Buyer”) (the “Transaction”).

Pursuant
to the MIPA, Buyer paid the Company aggregate purchase consideration with a Transaction closing date fair value of $7.9 million in exchange
for the equity interests of Complexity, including $0.8 million paid in cash upon closing of the transaction and issuance of a secured
subordinated promissory note (the “Note”) with a Transaction closing date fair value of $7.1 million. The Note was valued
using a discount rate of 15% (Level 3).

As
a result of the Transaction, during the three and six months ended June 30, 2025 and 2024, Complexity met the requirements to be
reported as discontinued operations (see Note 17). The Company recognized a gain of $3.0
million in net income (loss) from discontinued operations in the consolidated statements of operations and comprehensive loss after
offsetting the consideration received with
the carrying value of the disposed assets and liabilities. Complexity assets and liabilities disposed had a net carrying value of
$4.9
million and consist primarily of $2.6
million of accounts receivable, $2.2
million of property and equipment, and $1.8
million of intangible assets, partially offset by $0.8
million of accounts payable $1.4
million of accrued liabilities.

The
Note has a principal amount of $9.5 million and bears interest at 3.0% per annum. The principal amount of the Note, together with all
accrued interest, is due on February 28, 2027. The Note is secured by assets of the Buyer pursuant to a Security Agreement executed in
conjunction with the MIPA between the Company and the Buyer.

The promissory note receivable is classified as not held-for-sale and measured
at amortized cost, net of any allowance for credit losses, in accordance with ASC 310, Receivables. The promissory note receivable
was initially recorded at its transaction closing date fair value on March 1, 2024 and no allowance for credit losses had been recognized
as of June 30, 2025.

(c)
Frankly Media asset disposal

On
May 31, 2024, the Company, through its