Company: GAME
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001641172-25-004869
Chunk: 865

Company: GameSquare Holdings, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 5
Chunk 865
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907) 
     (31,337,523)
  
    Statutory income tax rate 
     21.0% 
     26.5%
  
    Expected income tax (benefit) 
     (10,237,690) 
     (8,304,444)

    Reconciling items: 

    Change in valuation allowance 
     51,434,409  
     5,424,830 
  
    State taxes 
     -  
     - 
  
    Permanent differences 
     3,093,876  
     443,320 
  
    Return to provision 
     4,306,483  
     50,819 
  
    Purchase accounting adjustments 
     (47,300,799) 
     - 
  
    Disposal of business units 
     (966,704) 
     - 
  
    Other 
     (329,575) 
     2,330,379 
  
    Total income tax expense (benefit) 
     -  
     (55,096)

The
Company believes that income tax filing positions will be sustained upon examination and does not anticipate any adjustments that would
result in a material adverse effect on the Company’s financial position, results of operations or cash flows. Accordingly, the
Company has not recorded any reserves, or related accruals or uncertain income tax positions at December 31, 2024 or 2023.

The
Company recognizes interest accrued related to unrecognized tax benefits and penalties in income tax expense. The Company has no accruals
for interest and penalties as of December 31, 2024 and 2023.

Federal
and state tax laws impose significant restrictions on the utilization of net operating loss carryforwards in the event of a change in
ownership of the Company, as defined by Internal Revenue Code Section 382 (Section 382). As of December 31, 2024, the Company has not
performed a formal Section 382 study; however, the Company has reviewed its temporary taxable differences in conjunction with its temporary
deductible differences as a measure against its definite lived net operating losses and anticipates any impact to be mitigated with additional
net operating losses from temporary deductible differences. The Company has net operating loss carryforwards for federal and state income
tax purposes of approximately $325 million and $230 million, respectively, as of December 31, 2024. Most