Company: GAME
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001641172-25-004869
Chunk: 87

Company: GameSquare Holdings, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1
Chunk 87
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 acquired during the measurement
periods.

Significant
judgments and assumptions related to the valuation and useful lives of certain classes of assets acquired are as follows:

i)
Intangible assets, talent network

The
fair value of the talent network intangible asset of $1.1 million was determined based on the replacement cost method under the cost
approach. The talent network intangible asset was valued using Level 3 inputs which consisted of the following key inputs: (i) direct
costs to reproduce; (ii) time to recreate of 2 years; (iii) developers profit margin of 3% (iv) discount rate of 13%; (v) obsolescence
rate of 25%. These assets are amortized on a straight-line basis over the estimated useful life of two years.

ii)
Intangible assets, brand

The
fair value of the brand name intangible asset of $7.2 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 rate of 2%; (iii) tax rate of 27% (iv) discount rates of 15.5%; (v) long-term growth rate of 3.5%. These assets are amortized
on a straight-line basis over the estimated useful life of twenty years.

iii)
Intangible assets, customer relationships

The
fair value of the customer relationships intangible asset of $3.7 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 rate of 15%; (iii) tax rate of 27.0% (iv) discount rate of 15.0%. These assets are amortized
on a straight-line basis over the estimated useful life of fifteen 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 $7.1 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