Company: GAME
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001641172-25-004869
Chunk: 74

Company: GameSquare Holdings, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1
Chunk 74
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 options to extend the lease when it is reasonably certain
that the option will be exercised. Leases with a term of 12 months or less are not recorded on the consolidated balance sheets.

The
Company uses its estimated incremental borrowing rate in determining the present value of lease payments considering the term of the
lease, which is derived from information available at the lease commencement date, considering publicly available data for instruments
with similar characteristics. The Company accounts for the lease and non-lease components as a single lease component.

(r)
Contingencies

The
Company estimates loss contingencies in accordance with ASC 450-20, Loss Contingencies, which states that a loss contingency shall
be accrued by a charge to income if both of the following conditions are met: (i) information available before the consolidated financial
statements are issued or are available to be issued indicates that it is probable that a liability had been incurred at the date of the
consolidated financial statements and (ii) the amount of loss can be reasonably estimated. Management regularly evaluates current information
available to determine whether such accruals should be adjusted and whether new accruals are required (see Note 18).

(s)
Fair value measurement

The
Company categorizes its financial assets and liabilities measured at fair value into one of three different levels depending on the observability
of the inputs used in the measurement.

Level
1: This level includes assets and liabilities measured at fair value based on unadjusted quoted prices for identical assets and liabilities
in active markets that are accessible at the measurement date.

    F-18

Level
2: This level includes valuations determined using directly or indirectly observable inputs other than quoted prices included within
Level 1.

Level
3: This level includes valuations based on inputs which are unobservable.

See
Note 21 for a summary of the Company’s financial assets and liabilities, detailed by level.

(t)
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. (see Note 11). 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