Company: GAME
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023589
Chunk: 248

Company: GameSquare Holdings, Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 2
Chunk 248
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of valuation specialists in concluding on fair value measurements in connection with determining fair values of assets acquired and liabilities
assumed in a business combination. As a result, during the measurement period, which may be up to one year from the acquisition date,
the Company records adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion
of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any
subsequent adjustments are recorded to the consolidated statements of operations. Transaction costs associated with business combinations
are expensed as incurred and are included in selling, general and administrative expense in the consolidated statements of operations.

Impairment
of long-lived assets and goodwill

Long-lived
assets consist of property and equipment, right-of-use assets and intangible assets. The Company assesses for impairment of asset groups,
including intangible assets, at least annually, or more frequently if there are any indicators for impairment.

Goodwill
and indefinite life intangible assets are tested for impairment annually or when there is an indication that the asset may be impaired.

When
a triggering event that occurred during the reporting period is identified, or when the annual impairment test is required, the Company
may first assess qualitative factors to determine whether it is more likely than not that goodwill is impaired. If the Company determines
it is more likely than not that goodwill is not impaired, an impairment test is not necessary. If an impairment test is necessary, management
estimates the fair value of the Company. If the carrying value of the Company exceeds its fair value, goodwill is determined to be impaired,
and an impairment charge equal to the excess of the carrying value over the related fair value of the Company will be recorded. If the
qualitative assessment indicates that it is more likely than not that goodwill is not impaired, further testing is unnecessary.

45

Fair
value option for convertible debt

The
Company elected the Fair Value Option (“FVO”) for recognition of its convertible debt as permitted under ASC 825, Financial
Instruments. Under the FVO, the Company recognizes the convertible debt at fair value with changes in fair value recognized in earnings.
The FVO may be applied instrument by instrument, but it is irrevocable. As a result of applying the FVO, any direct costs and fees related
to the convertible debt is recognized in operating expense in the consolidated statements of operations and comprehensive loss as incurred
and not deferred. Changes in fair value of the convertible debt is recognized as a separate