Company: GAME
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001641172-25-004869
Chunk: 466

Company: GameSquare Holdings, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 2
Chunk 466
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 million was determined based on the relief from royalty method under the income
approach. The brand name intangible asset was valued using Level 3 inputs which consisted of the following key inputs: (i) revenue projections;
(ii) royalty rates of 1.0%, 1.5% and 3.0%; (iii) tax rates of 25.0%, 26.0% and 26.5% (iv) discount rates of 12.0%, 12.5% and 13.0%; (v)
long-term growth rate of 3.0%. These assets are amortized on a straight-line basis over the estimated useful life of ten years.

iii)
Intangible assets, customer relationships

The
fair value of the customer relationships intangible asset of $9.6 million was determined based on the relief from royalty method under
the income approach. The customer relationship intangible asset was valued using Level 3 inputs which consisted of the following key
inputs: (i) revenue projections; (ii) attrition rates of 5.0%, 7.5%, and 15%; (iii) tax rates of 25.5%, 26.0%, and 27.0% (iv) discount
rates of 12.5%,13.0%, and 13.5%. These assets are amortized on a straight-line basis over the estimated useful life of twenty years.

iv)
Goodwill

The
difference between the acquisition date fair value of the consideration transferred and the values assigned to the assets acquired and
liabilities assumed represents goodwill of $25.6 million.

The
goodwill recorded represents the following:

    ●
    Cost
    savings and operating synergies expected to result from combining the operations of Engine with those of the Company.

    ●
    Intangible
    assets that do not qualify for separate recognition such as the assembled workforce.

Goodwill
arising from the Arrangement is expected to be deductible for tax purposes.

Subscription
receipt financing

On
April 6, 2023, Engine closed a public offering of 7,673,000 subscription receipts at an issue price of $1.25 per subscription receipt,
including the partial exercise of an over-allotment option, for gross proceeds of $9.6 million, net of equity issuance costs of $0.2
million. Each subscription receipt entitled the holder to receive one share of the Company upon closing of the Arrangement. The proceeds
from the