GameSquare Holdings, Inc. Leases Disclosure
11. Leases
On June 30, 2021, the Company acquired Complexity. Complexity leased a building in Frisco, Texas. Upon the sale of Complexity (see Note 4), the lease was assigned to GameSquare Esports (USA), Inc. and the Company entered into an agreement to sublease the building to Complexity for a 12-month period. The lease has an original lease period expiring in April 2029. The lease agreement does not contain any material residual value guarantees or material restrictive covenants.
On April 1, 2024, GameSquare Holdings, Inc. leased a building in Culver City, CA, which it later assigned to Faze Media Inc. on May 15, 2024. The lease has an original lease period expiring in March 2027. The lease agreement does not contain any material residual value guarantees or material restrictive covenants. The Company disposed of Faze Media Inc. on April 1, 2025, including the lease right-of-use assets and lease liabilities (see Note 4).
The components of operating lease expense, recognized in general and administrative expenses on the consolidated statements of operations and comprehensive loss, are as follows:
| Year ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Operating lease expense | 636,823 | 730,561 | ||||||
| Variable lease expense | 274,094 | 315,011 | ||||||
| Total operating lease costs | 910,917 | 1,045,572 | ||||||
As of December 31, 2025, the remaining lease-term and discount rate on the Frisco, TX lease was 3.3 years and 8.3%, respectively.
Maturities of the lease liability are as follows:
| 2026 | 545,808 | |||
| 2027 | 545,808 | |||
| 2028 | 545,808 | |||
| 2029 | 181,936 | |||
| 2030 | ||||
| Thereafter | ||||
| Total lease payments | 1,819,360 | |||
| Less: Interest | (223,534 | ) | ||
| Total lease liability | $ | 1,595,826 |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Apr 8, 2026 | Showing above |
| 2024 | Apr 15, 2025 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.