Company: GAME
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001641172-25-004869
Chunk: 470

Company: GameSquare Holdings, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 2
Chunk 470
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 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.

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

    F-27

(d)
Sale of Complexity

On
March 1, 2024, the Company, through its wholly owned subsidiary GameSquare Esports (USA), Inc., entered into a Membership Interest Purchase
Agreement (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