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The money side of the end of Complexity was on the record months before the end itself. GameSquare Holdings, the listed company that sold the esports organization Complexity to a group led by its founder in 2024 and also owns FaZe Clan, recorded a reserve of US$8.1 million against the US$9.5 million note the buyers still owed, as of December 31, 2025. The figure sits in the annual report it filed with the United States Securities and Exchange Commission on April 8, 2026, as The Esports Advocate reported on October 1.
In the same annual report, the company said it expected to collect the remaining US$0.5 million of the note through a settlement with the buyer, according to The Esports Advocate. Jason Lake announced in a video on September 23, 2026, more than five months after that filing, that Complexity had ceased operations.
A reserve is the part of a sum owed that a company no longer expects to receive. Setting one aside does not cancel the debt: it lowers the value the company gives the debt in its own accounts.
GameSquare annual report for 2025, as reported by The Esports Advocate on October 1, 2026; GameSquare quarterly report for the period ended June 30, 2026.
A sale paid over three years
The note dates from the sale of March 2024. Global Esports Properties, an investor group led by Lake, the founder of Complexity, agreed to buy the organization from GameSquare for US$10.36 million. GameSquare's filing at the time, as summarized by The Esports Advocate, split the price in two: US$750,000 in cash at closing, and the rest in a secured subordinated promissory note.
A promissory note is a written promise to repay a sum by a set date. Secured means it is backed by assets of the borrower, which the lender can claim if the debt is not paid. Subordinated means it ranks behind other lenders of the borrower when money is short. In this sale, the seller was in effect lending the buyer most of the price.
Related readM80 buys the Boston Breach slot and enters the Call of Duty LeagueThe note itself was filed as an exhibit to GameSquare's report on the sale. Its maker is Global Esports Properties, LLC, a Delaware company; its payee is GameSquare Esports (USA), Inc., a Nevada subsidiary of the group. Its original principal was US$9,607,693, which together with the cash at closing gives the US$10.36 million price. Later filings put the principal at US$9.5 million, due February 28, 2027, according to The Esports Advocate; the original terms allowed a post-closing adjustment.
| Term | What the note says |
|---|---|
| Principal | US$9,607,693, later stated as US$9.5 million |
| Interest | 3% a year, paid in kind: added to the principal instead of paid in cash |
| Default interest | 8% a year |
| Maturity | 36 months after issue, no principal payments before then |
| Early repayment | Allowed at any time without penalty |
| Mandatory repayment | 50% of gross proceeds above US$500,000 from outside debt or an equity sale |
| Events of default | Unpaid sums ten business days after notice, insolvency, ceasing business |
| Governing law | Delaware |
Promissory note filed by GameSquare as an exhibit to its report on the sale, March 2024.
Two of those terms explain how the debt was meant to be repaid. With no principal payments due before maturity and interest added to the principal, the buyer had no scheduled cash payment for three years. The mandatory repayment clause tied any earlier payment to new money: if the buyers raised more than US$500,000 from lenders or investors, half of the gross proceeds above that amount went to GameSquare.
The security agreement that came with the note covers the buyer's assets and names copyrights and trademarks among them, The Esports Advocate reports. Those are the rights that carry a team's name and logo.
From no allowance to a reserve
GameSquare's accounts show how the value it gave the note changed from one filing to the next.
At closing, the company valued the note at US$7.1 million, about US$2.5 million below its face value of US$9,607,693, and recognized a gain of US$3.0 million on the sale, according to The Esports Advocate's reading of the annual report.
In its quarterly report for the period ended September 30, 2025, GameSquare said it had recognized no allowance for credit losses on the note, The Esports Advocate reports. An allowance for credit losses is the accounting name for the reserve: the amount a lender sets aside for what it does not expect to collect. At that date, the company still carried the note without one.
Related readMotorsport Games adopts a poison pill as Red Oak's stake reaches 11%Three months later, at the close of the 2025 financial year, the reserve stood at US$8.1 million, The Esports Advocate reports. The annual report that disclosed it was filed on April 8, 2026, a date GameSquare's own quarterly report for June confirms.
- March 2024Complexity sold to Lake's group for US$750,000 in cash and a note of US$9,607,693.
- September 30, 2025Quarterly report: no allowance for credit losses recognized on the note.
- December 31, 2025Year-end: a reserve of US$8.1 million, with US$0.5 million expected through a settlement.
- June 30, 2026Quarterly report: the note carried at US$549,000, as at the end of 2025.
- September 23, 2026Lake announces that Complexity has ceased operations.
The quarterly report for the period ended June 30, 2026 is the most recent of the company's filings on the subject. Its balance sheet lists a non-current promissory note receivable of US$549,000 at June 30, 2026, the same amount as at December 31, 2025. Non-current means the company does not expect to collect it within twelve months. Neither of the 2026 quarterly reports describes a settlement with the buyer, according to The Esports Advocate.
What the results releases left out
Investors who followed GameSquare through its results releases would not have read about the note there. The Esports Advocate found no mention of Complexity in the company's releases for the fourth quarter of 2025 and for the first two quarters of 2026, nor on its earnings calls for the fourth quarter of 2025 and the first quarter of 2026.
The annual report did not drop the name either. Among its risk factors, it still lists Complexity beside FaZe Clan as one of the group's brands, and it describes the purchase of Complexity as the company's move into the teams business, while noting that most of its revenue continues to come from its agency work.
The same quarterly report for June carries a wider warning. In its first note, GameSquare describes a material uncertainty that raises substantial doubt about its ability to continue as a going concern, the accounting term for a business expected to keep operating over the coming year. The auditors' report on the 2025 accounts, the annual report says among its risk factors, includes an explanatory paragraph on the same question.
Related readReverse stock splits and Nasdaq's US$1 rule at listed esports companiesThe sale, the shutdown and the rights
GameSquare sold Complexity ahead of its acquisition of FaZe Clan. In the sale announcement, GameSquare's chief executive said that many leagues have rules on the ownership of several teams, The Esports Advocate recalls.
Lake has said the decision to shut the organization down was taken at the end of 2025. In his video of September 23, as quoted by Dot Esports and cited by The Esports Advocate, he said the team had weighed its business position and its prospects of raising the capital needed to pay off the seller-held note before choosing an orderly shutdown. A seller-held note is a debt the buyer still owes the seller when a sale is paid over time.
Complexity's intellectual property, the name and the rights attached to it, has since been transferred back to GameSquare, Dot Esports reported, according to The Esports Advocate. The trademarks were part of the security for the note.
The filings do not say how the rights came back
No GameSquare filing published so far says whether the rights returned through enforcement of the security or through the settlement the annual report expected. Nor does any say what the buyers' investors lost.
Esports inside GameSquare today
The quarterly report for June gives esports revenue as its own line. For the three months to June 30, 2026, it was US$824,764, against US$837,006 a year earlier. For the six months, it was US$1,914,983, against US$3,038,604 in the first half of 2025, a fall of 37%. By subtraction, the first quarter of 2026 brought US$1,090,219 against US$2,201,598 a year earlier: almost all of the decline came in the first three months of the year.
The note was never part of that revenue. It belonged to the sale side of the accounts: a sum owed to the company for an organization it no longer owned. Its value in GameSquare's books fell from US$7.1 million at closing to US$549,000 at June 30, 2026, a difference of about US$6.6 million.
The original note was due 36 months after issue, and the later filings put its maturity at February 28, 2027. Under the note, the insolvency of its maker and a halt to the maker's business are both events of default, alongside a sum left unpaid ten business days after notice.
What comes next
GameSquare's quarterly report for the period ending September 30, 2026, due in November, will be the first of its filings to cover the weeks in which Complexity's shutdown and the return of its rights were announced. The Esports Advocate lists what it should answer: how the rights came back, whether a settlement accounts for the US$549,000 still carried, and how much of the note's interest was actually paid.
The Esports Advocate also lists GameSquare's plans for the Complexity brand among the open questions. No filing published by the company so far describes them.
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