GameSquare Takes $8.1M Loss on Complexity Asset Ahead of Closure
GameSquare Holdings informed investors in April that it anticipated recovering only around $500,000 from the $9.5 million note used by Jason Lake’s investor group to acquire Complexity, just over five months before Lake revealed the organization’s closure.
This information is included in GameSquare’s annual report, submitted on April 8. By December 31, 2025, the company had set aside an $8.1 million reserve for the note, indicating that the remaining $0.5 million was expected to be collected through a settlement with the buyer. The quarterly report for the period ending September 30, 2025, noted that “no allowance for credit losses had been recognized” on this note.
Lake’s own statements align with this timeline. In a video shared on X on September 23, the founder and former CEO of Complexity mentioned that the decision to shut down was made at the end of 2025. “We surveyed the landscape, assessed the business’s status, and the prospects for raising capital to settle the seller-held note, and concluded that the best course of action was to shut it down in an orderly and professional manner,” Lake stated, with reports indicating that Complexity’s intellectual property has since reverted to GameSquare.
The note constituted the majority of the purchase price.
As previously detailed, an investor group led by Lake agreed in March 2024 to acquire Complexity for $10.36 million. GameSquare’s filing regarding the sale indicated that $750,000 was paid in cash at closing, with the remainder covered by a secured subordinated promissory note amounting to $9,607,693, which carried a 3% annual interest rate and was due in full within 36 months. The price was subject to post-closing adjustments, with later filings adjusting the principal to $9.5 million and the due date to February 28, 2027.
The terms of the note were directly related to the challenges Lake described. The buyer was obligated to pay GameSquare 50% of any gross proceeds exceeding $500,000 from third-party debt financing or equity sales. This meant that beyond the initial $500,000, half of any new funds raised by Lake’s group would go to GameSquare instead of supporting the team.
The security agreement backing the note included the buyer’s assets, specifically its copyrights and trademarks, which are now back with GameSquare.
Since then, there have been no updates in GameSquare’s filings regarding the anticipated settlement.
The quarterly report for the period ending June 30 still lists the note at $549,000, unchanged from the end of 2025, and neither of the 2026 quarterly reports mentions a settlement. GameSquare did not reference Complexity in its results releases for the fourth quarter of 2025 or the first two quarters of 2026, nor during its earnings calls for those periods.
This write-down marks a full cycle for GameSquare. The company acquired Complexity in 2021 through an all-stock deal valued at $26.7 million, then sold it in 2024 prior to acquiring FaZe Clan, with the CEO noting that “many leagues have rules around ownership of multiple teams.” GameSquare valued the note at $7.1 million at the time of sale and recognized a $3.0 million gain, as reported in its annual filing.
It remains unclear whether Complexity’s intellectual property returned through enforcement of the security agreement or via the settlement mentioned by GameSquare, whether that settlement covers the remaining $549,000, how much interest on the note was actually paid, what GameSquare plans to do with the brand, and what losses Lake’s investors incurred. The upcoming quarterly report for the period ending September 30, due in November, will be the first to address the timeframe in which the transfer was announced.
The broader question is the value of a 23-year-old team brand to a company that already owns FaZe, and whether GameSquare can extract more value from Complexity’s name than it did from the loan.
