Company: GAME
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023589
Chunk: 22

Company: GameSquare Holdings, Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 22
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 gain of $3.0 million in net income (loss) from discontinued
operations in the consolidated statements of operations and comprehensive loss after offsetting the consideration received with the carrying
value of the disposed assets and liabilities. Complexity assets and liabilities disposed had a net carrying value of $4.9 million and
consist primarily of $2.6 million of accounts receivable, $2.2 million of property and equipment, and $1.8 million of intangible assets,
partially offset by $0.8 million of accounts payable $1.4 million of accrued liabilities.

The
Note has a principal amount of $9.5 million and bears interest at 3.0% per annum. The principal amount of the Note, together with all
accrued interest, is due on February 28, 2027. The Note is secured by assets of the Buyer pursuant to a Security Agreement executed in
conjunction with the MIPA between the Company and the Buyer.

The
promissory note receivable is classified as not held-for-sale and measured at amortized cost, net of any allowance for credit losses,
in accordance with ASC 310, Receivables. The promissory note receivable was initially recorded at its transaction closing date
fair value on March 1, 2024 and no allowance for credit losses had been recognized as of September 30, 2025.

(c)
Frankly Media asset disposal

On
May 31, 2024, the Company, through its wholly owned subsidiary Frankly Media LLC (“Frankly”), entered into an Asset Purchase
Agreement (the “UNIV APA”) to sell the producer content management software platform and associated software technology (“CMS
Assets”) of Frankly to UNIV, Ltd (“UNIV”) (the “UNIV Asset Sale”).

Pursuant
to the UNIV APA, UNIV paid the Company aggregate purchase consideration with a transaction closing date fair value of $1.2 million in
exchange for the CMS Assets, including $25 thousand paid in cash upon closing of the transaction and issuance of a secured subordinated
promissory note (the “UNIV Note”) with a transaction closing date fair value of $1.2 million. The UNIV Note was valued using
a discount rate of 13.7% (Level 3).

Additionally
on May 31, 2024, the Company, through its wholly owned subsidiary Frankly, entered into an Asset Purchase Agreement (the “XPR