GameSquare Holdings informed investors in April that it anticipated recovering approximately $500,000 from the $9.5 million note used by Jason Lake’s investor group to acquire Complexity, well before the announcement of the organization’s closure by Lake over five months later.
This information was disclosed in GameSquare’s annual report filed on April 8. By December 31, 2025, the company had set aside an $8.1 million reserve for the note, with the remaining $0.5 million expected to be recovered through a settlement with the buyer. The quarterly report for the period ending September 30, 2025 had previously indicated that no credit losses allowance had been recognized for the same note.
According to Lake, the decision to shut down Complexity was made in the same quarter. In a video released on X on September 23, Complexity’s founder and former CEO stated that the organization had opted to cease operations by the end of 2025. Lake explained, “We evaluated the situation, assessed the business’s status, and considered the prospects of securing capital to repay the seller-held note. We concluded that the best course of action was to close it down in a methodical and professional manner,” as reported by Dot Esports. The report mentioned that Complexity’s intellectual property had been returned to GameSquare since then.
The note constituted a significant portion of the acquisition price. As previously detailed by The Esports Advocate, Global Esports Properties LLC, led by Lake, agreed in March 2024 to purchase Complexity for $10.36 million. As outlined in GameSquare’s filing on the sale, $750,000 was paid upfront in cash, while the remainder was covered by a secured subordinated promissory note amounting to $9,607,693, bearing 3% annual interest and due within 36 months. Subsequent filings by GameSquare revised the principal to $9.5 million, with a due date of February 28, 2027.
The terms of the note directly influenced the challenges described by Lake. The buyer was obligated to remit to GameSquare 50% of any gross proceeds exceeding $500,000 from third-party debt financing or equity sales. Beyond the initial $500,000, half of any new funds raised by Lake’s group would be directed to GameSquare rather than invested in the team.
The security agreement supporting the note encompassed the buyer’s assets, explicitly including copyrights and trademarks. These assets have now been reverted to GameSquare.
Despite GameSquare’s anticipation of a settlement, no mention of it has been made in subsequent filings. The company’s quarterly report for the period ending June 30 still lists the note at $549,000, unchanged from the end of 2025. Neither of the 2026 quarterly reports from GameSquare has addressed any settlement regarding the note. Complexity was not referenced in the company’s results releases for the fourth quarter of 2025 or the first two quarters of 2026, nor in its earnings calls for the fourth quarter of 2025 and the first quarter of 2026.
The depreciation represents a full circle for GameSquare. The company acquired Complexity in 2021 in an all-stock transaction valued at $26.7 million, as reported by Sportico. Subsequently, in 2024, GameSquare sold Complexity before acquiring FaZe Clan, with CEO Justin Kenna noting in the announcement of the sale that “many leagues have regulations concerning ownership of multiple teams.” At the time of the sale, GameSquare valued the note at $7.1 million and recorded a $3.0 million gain from the transaction in its annual report.
Several questions remain unanswered, such as whether Complexity’s intellectual property was recovered through enforcement of the security agreement or the settlement mentioned by GameSquare, whether the settlement accounted for the remaining $549,000, the extent of interest payment on the note, GameSquare’s plans for the brand, and the losses incurred by Lake’s investors. GameSquare’s quarterly report for the period ending September 30, scheduled for November, will be the first to cover the period following the transfer announcement.
The broader question revolves around the value of a 23-year-old team brand to a company already owning FaZe, and whether GameSquare can derive greater value from Complexity’s brand compared to the loan recovery.