Motorsport Games Inc 10-Q for FY2025 Q1

Motorsport Games Inc. (MSGM)

10-Q 2025-05-09 For: 2025-03-31

Added on April 10, 2026

About this 10-Q

Motorsport Games Inc filed this 10-Q on May 9, 2025, covering the quarter ended March 31, 2025 (FY2025 Q1).

Headline figures

Quarter ended March 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.76M; down 41.9% from $3.03M a year earlier
Net income: $1.04M; compared with a net loss of $1.66M a year earlier
Diluted EPS: $0.33; compared with -$0.61 a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →

	☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		For the quarterly period ended March 31, 2025

		or

	☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		For the transition period from ___________ to ___________

Delaware		86-1791356
State or other jurisdiction of incorporation or organization		I.R.S. Employer Identification No.

5972 NE 4th Avenue Miami, FL		33137
Address of principal executive offices		Zip Code

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☒

		Page
Part I.	FINANCIAL INFORMATION	1
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024 (Unaudited)	1
	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2025 and 2024 (Unaudited)	2
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2025 and 2024 (Unaudited)	3
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2025 and 2024 (Unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024 (Unaudited)	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4.	Controls and Procedures	34

Part II.	OTHER INFORMATION	35
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 5.	Other Information	35
Item 6.	Exhibits	36
Signatures		37

	●	our liquidity and capital requirements, including, without limitation, as to our ability to continue as a going concern; our belief that we will not have sufficient cash on hand to fund our operations over the next year based on the cash and cash equivalents available and our average cash burn; our belief that additional funding will be required in order to continue operations; our expectation that we will continue to have a net cash outflow from operations for the foreseeable future as we continue to develop our product portfolio and invest in developing new video game titles; our expectation that we will continue to incur losses for the foreseeable future as we continue to incur significant expenses; our plans to address our liquidity short fall, including our exploration of several options, including, but not limited to: additional funding in the form of potential equity and/or debt financing arrangements or similar transactions, strategic alternatives for our business, including, but not limited to, the sale or licensing of our assets, and further cost reduction and restructuring initiatives; our expectation that if any strategic alternative is executed, this would help to reduce certain working capital requirements and reduce overhead expenditures, thereby reducing our expected future cash-burn, and provide some short-term liquidity relief, but that we will continue to require additional funding and/or further cost reduction measures in order to continue operations, which includes further restructuring of our business and operations; our plan to continue to seek to reduce our monthly net cash-burn by reducing our cost base through maintaining and enhancing cost control initiatives, and plans to continue to evaluate the structure of our business for additional changes in order to improve both our near-term and long-term liquidity position; statements regarding potential alternatives we may be required to adopt if we are unable to satisfy our capital requirements, and our belief that if we are ultimately unable to satisfy our capital requirements, we would likely need to dissolve and liquidate our assets under the bankruptcy laws or otherwise; our belief that there is a substantial likelihood that Driven Lifestyle Group LLC (“Driven Lifestyle”), formerly known as Motorsport Network, LLC, will not fulfill our future borrowing requests under the $12 million Line of Credit (as defined in this Report); and statements regarding our cash flows and anticipated uses of cash;

	●	our intended corporate purpose to make the thrill of motorsports accessible to everyone by creating the highest quality, most sophisticated and most innovative experiences for racers, gamers and fans of all ages;

	●	new or planned products or offerings, including the anticipated timing of any new product or offering launches, such as our current plans to organize the 2025/26 Le Mans Virtual Series to commence later this year, as well as the possibility of further adjustments to our product roadmap due to the continuing impact of our liquidity position;

	●	our plans to strive to become a leader in organizing and facilitating esports tournaments, competitions, and events for our licensed racing games as well as on behalf of third-party racing game developers and publishers;

	●	our intention to continue exploring opportunities to expand the recurring portion of our esports segment outside of Le Mans;

	●	our belief that connecting virtual racing gamers and esports fans on a digital entertainment and social platform represents the greatest opportunity to enhance the way that people learn, watch, play, and experience racing video games and racing esports;

	●	our beliefs regarding the growing importance and business viability of esports, especially within the racing and motorsport genres;

	●	our belief that our esports business has the potential to generate incremental revenues through the further sale of media rights to our esports events and competitions, as well as, among other things, merchandising, if the esports audience pattern continues to grow;

	●	our plans to drive ongoing engagement and incremental revenue from recurrent consumer spending on our titles through in-game purchases and extra content;

	●	our expectation that we will continue to derive significant revenues from sales of our products to a very limited number of distribution partners;

	●	our intention to continue to look for opportunities to expand the recurring portion of our business, including through the planned introduction of new annualized sports franchise games, such as with Le Mans;

	●	our intended use of proceeds from the sales of our equity securities;

	●	our statements and assumptions relating to the impairment of assets;

	●	our plans and intentions with respect to our remediation efforts to address the material weaknesses in our internal control over financial reporting;

	●	our belief that the outcome of all pending legal proceedings in the aggregate is not reasonably likely to have a material adverse effect on our business, prospects, results of operations, financial condition and/or cash flows, except as otherwise disclosed in this Report, and that in light of the uncertainties involved in legal proceedings generally, the ultimate outcome of a particular matter could be material to the Company’s operating results for a particular period depending on, among other things, the size of the loss or the nature of the liability imposed and the level of the Company’s income for that particular period; our beliefs regarding the merit of any plaintiff’s allegations and the impact of any claims and litigation that we are subject to; and our plans and intentions with respect to defending our position in any legal proceeding;

	●	our intention to not declare dividends in the foreseeable future;

	●	our ability to utilize net operating loss carryforwards;

	●	our expectations regarding the future impact of implementing management strategies, adopting new accounting standards, potential acquisitions and industry trends;

	●	our plans and intentions to maintain compliance with the listing requirements of The Nasdaq Stock Market LLC (“Nasdaq”), including our plan to implement equity financing transactions;

	●	our belief that we may decide in the future to avail ourselves of certain corporate governance requirements of Nasdaq as a result of being a “controlled company” within the meaning of the Nasdaq rules;

	●	our expectations relating to any cost reduction and restructuring initiatives, including expected savings and any restructuring charges to be incurred; and

	●	our expectations that our current development operations will not have significant exposure to changes in circumstances arising from the Ukraine-Russia and Middle East conflicts.

	(i)	difficulties and/or delays in accessing available liquidity, and other unanticipated difficulties in resolving our continuing financial condition and ability to obtain additional capital to meet our financial obligations, including, without limitation, difficulties in securing funding that is on commercially acceptable terms to us or at all, such as our inability to complete in whole or in part any potential debt and/or equity financing transactions or similar transactions, any inability to achieve cost reductions, including, without limitation, those which we expect to achieve through any cost reduction and restructuring initiatives, as well as any inability to consummate additional strategic alternatives for our business, including, but not limited to, the sale or licensing of our assets, and/or less than expected benefits resulting from any such strategic alternative; difficulties, delays or our inability to efficiently manage our cash and working capital; higher than expected operating expenses; adverse impacts to our liquidity position resulting from the higher interest rate and higher inflationary environment; the unavailability of funds from anticipated borrowing sources; the unavailability of funds from our inability to reduce or control costs, including, without limitation, those which we expect to achieve through any cost reduction and restructuring initiatives; lower than expected operating revenues, cash on hand and/or funds available from anticipated borrowings or funds expected to be generated from cost reductions resulting from the implementation of cost control initiatives, such as through any cost reduction and restructuring initiatives; and/or less than anticipated cash generated by our operations; and/or adverse effects on our liquidity resulting from changes in economic conditions (such as continued volatility in the financial markets, whether attributable to COVID-19, the ongoing wars between Russia and Ukraine and between Israel and Hamas or otherwise; significantly higher rates of inflation, significantly higher interest rates and higher labor costs; the impact of higher energy prices on consumer purchasing behavior, monetary conditions and foreign currency fluctuations, tariffs, foreign currency controls and/or government-mandated pricing controls, as well as in trade, monetary, fiscal and tax policies), tariffs, export controls, political conditions (such as military actions and terrorist activities) and pandemics and natural disasters; and/or the unavailability of funds from (A) delaying the implementation of or revising certain aspects of our business strategy; (B) reducing or delaying the development and launch of new products and events; (C) reducing or delaying capital spending, product development spending and marketing and promotional spending; (D) selling assets or operations; (E) seeking additional capital contributions and/or loans from Driven Lifestyle, the Company’s other affiliates and/or third parties; and/or (F) reducing other discretionary spending;

	(ii)	difficulties, delays or less than expected results in achieving our growth plans, objectives and expectations, such as due to a slower than anticipated economic recovery and/or our inability, in whole or in part, to continue to execute our business strategies and plans, such as due to less than anticipated customer acceptance of our new game titles, our experiencing difficulties or the inability to launch our games as planned, less than anticipated performance of the games impacting customer acceptance and sales and/or greater than anticipated costs and expenses to develop and launch our games, including, without limitation, higher than expected labor costs;

	(iii)	difficulties, delays in or unanticipated events that may impact the timing and scope of new product launches, such as due to difficulties and/or delays related to our transition from using development staff in Russia to using development staff in other countries and/or difficulties and/or delays arising out of any resurgence of the COVID-19 pandemic or any other pandemic;

	(iv)	less than expected benefits from implementing our management strategies and/or adverse economic, market and geopolitical conditions that negatively impact industry trends, such as significant changes in the labor markets, an extended or higher than expected inflationary environment (such as the impact on consumer discretionary spending as a result of significant increases in energy and gas prices which have been increasing since early in 2020), a higher interest rate environment, tax increases impacting consumer discretionary spending and or quantitative easing that results in higher interest rates that negatively impact consumers’ discretionary spending, or adverse developments relating to the ongoing war between Russia and Ukraine and conflicts in the Middle East;

	(v)	difficulties and/or delays adversely impacting our ability (or inability) to maintain existing, and to secure additional, licenses and other agreements with various racing series;

	(vi)	difficulties and/or delays adversely impacting our ability to successfully manage and integrate any joint ventures, acquisitions of businesses, solutions or technologies;

	(vii)	unanticipated operating costs, transaction costs and actual or contingent liabilities;

	(viii)	difficulties and/or delays adversely impacting our ability to attract and retain qualified employees and key personnel;

	(ix)	adverse effects of increased competition;

	(x)	changes in consumer behavior, including as a result of general economic factors, such as increased inflation, recessionary factors, higher energy prices and higher interest rates;

	(xi)	difficulties and/or delays adversely impacting our ability to protect our intellectual property;

	(xii)	local, industry and general business and economic conditions;

	(xiii)	unanticipated adverse effects on our business, prospects, results of operations, financial condition, cash flows and/or liquidity as a result of unexpected developments with respect to our legal proceedings;

	(xiv)	difficulties, delays or our inability to successfully complete any cost reduction and restructuring initiatives, which could reduce the benefits realized from such activities;

	(xv)	higher than anticipated restructuring charges and/or payments and/or changes in the expected timing of such charges and/or payments as a result of, among other things, legal requirements in applicable foreign jurisdictions; and/or less than anticipated annualized cost reductions from our plans and/or changes in the timing of realizing such cost reductions, such as due to less than anticipated liquidity to fund such activities and/or more than expected costs to achieve the expected cost reductions;

	(xvi)	difficulties, delays, less than expected results or our inability to successfully implement any strategic alternative or potential option for our business, including, but not limited to, the sale or licensing of certain of our assets, which could result in, among other things, less than expected financial benefits from such actions;

	(xvii)	difficulties and/or or unanticipated developments adversely impacting our ability to maintain compliance with the Nasdaq’s listing requirements, such as our inability to implement equity financing transactions; and
	(xviii)	unanticipated adverse effects arising from our inability to fully repay Luminis International B.V. and Technology In Business B.V., the sellers of Studio 397 B.V. (“Studio397”), relating to our acquisition of 100% of the share capital of Studio397 in April 2021.

	March 31, 2025			December 31, 2024

Assets

Current assets:
Cash and cash equivalents	$	1,050,402		$	859,271
Accounts receivable, net		867,892			1,446,990
Prepaid expenses and other current assets		799,449			490,221
Total Current Assets		2,717,743			2,796,482
Property and equipment, net		38,553			55,437
Operating lease right of use assets		45,093			51,004
Intangible assets, net		3,262,466			3,365,298
Total Assets	$	6,063,855		$	6,268,221

Liabilities and Stockholders’ Equity

Current liabilities:
Accounts payable	$	2,726,906		$	2,976,211
Accrued expenses and other current liabilities		1,263,944			1,070,063
Due to related parties		13,456			26,211
Purchase commitments		600,000			918,198
Operating lease liabilities (current)		32,599			31,099
Total Current Liabilities		4,636,905			5,021,782
Operating lease liabilities (non-current)		8,480			16,309
Other non-current liabilities		1,585			4,128
Total Liabilities		4,646,970			5,042,219

Commitments and contingencies (Note 9)		-			-

Stockholders’ Equity:

Preferred stock, $0.0001 par value; authorized 1,000,000 and 1,000,000 shares; and none issued and outstanding as of March 31, 2025 and December 31, 2024, respectively		-			-
Class A common stock, $0.0001 par value; authorized 100,000,000 and 100,000,000 shares; 3,183,558 and 3,183,558 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively		315			315
Class B common stock, $0.0001 par value; authorized 7,000,000 and 7,000,000 shares; 700,000 and 700,000 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively		70			70
Common stock, value		70			70

Additional paid-in capital		92,960,275			92,960,275
Accumulated deficit		(90,748,910	)		(91,789,968	)
Accumulated other comprehensive loss		(1,563,314	)		(674,434	)
Total Stockholders’ Equity Attributable to Motorsport Games Inc.		648,436			496,258
Non-controlling interest		768,449			729,744
Total Stockholders’ Equity		1,416,885			1,226,002
Total Liabilities and Stockholders’ Equity	$	6,063,855		$	6,268,221

	2025			2024
	Three Months Ended March 31,
	2025			2024
Revenues	$	1,758,453		$	3,029,036
Cost of revenues		465,386			666,627
Gross profit		1,293,067			2,362,409

Operating expenses:
Sales and marketing		97,701			250,386
Development		601,953			1,063,357
General and administrative [1]		1,168,482			2,190,266
Depreciation and amortization		18,126			73,724
Total operating expenses		1,886,262			3,577,733
Other operating income		500,000			-
Loss from operations		(93,195	)		(1,215,324	)
Interest expense		(13,010	)		(30,882	)
Other income (expense), net		1,128,818			(437,192	)
Net income (loss)		1,022,613			(1,683,398	)
Less: Net loss attributable to non-controlling interest		(18,445	)		(18,442	)
Net income (loss) attributable to Motorsport Games Inc.	$	1,041,058		$	(1,664,956	)

Net income (loss) per Class A common share attributable to Motorsport Games Inc.:
Basic and diluted	$	0.33		$	(0.61	)
Weighted-average shares of Class A common stock outstanding:
Basic and diluted		3,183,558			2,722,728

																	Stockholders’
	For the Three Months Ended March 31, 2025
																	Total
																	Stockholders’
	Class A Common Stock				Class B Common Stock				Additional Paid-In		Accumulated			Accumulated Other Comprehensive			Equity Attributable to Motorsport			Non- controlling			Total Stockholders’
	Shares		Amount		Shares		Amount		Capital		Deficit			Loss			Games Inc.			Interest			Equity
Balance – January 1, 2025		3,183,588	$	315		700,000	$	70	$	92,960,275	$	(91,789,968	)	$	(674,434	)	$	496,258		$	729,744		$	1,226,002
Other comprehensive gain (loss)		-		-		-		-		-		-			(888,880	)		(888,880	)		57,150			(831,730	)
Net income (loss)		-		-		-		-		-		1,041,058			-			1,041,058			(18,445	)		1,022,613
Balance – March 31, 2025		3,185,558	$	315		700,000	$	70	$	92,960,275	$	(90,748,910	)	$	(1,563,314	)	$	648,436		$	768,449		$	1,416,885

	2025			2024
	For the Three Months Ended March 31,
	2025			2024
Cash flows from operating activities:
Net income (loss)	$	1,022,613		$	(1,683,398	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
(Gain) loss on foreign currency exchange rates		(974,763	)		506,689
Depreciation and amortization		252,057			601,946
Gain from settlement of purchase commitment liabilities		(175,460	)		-
Purchase commitment and license liability interest accretion		7,262			22,241
Non-cash lease expense		7,442			51,445
Stock-based compensation		-			68,191
Changes in the fair value of warrants		(2,543	)		(14,922	)
Changes in assets and liabilities:
Accounts receivable		600,449			(689,807	)
Operating lease liabilities		(7,752	)		(49,648	)
Prepaid expenses and other assets		(305,147	)		(367,244	)
Accounts payable		(261,793	)		693,615
Due to related parties		(13,019	)		(30,267	)
Accrued expenses and other liabilities		155,875			517,489

Net cash provided by (used in) operating activities	$	305,221		$	(373,670	)

Cash flows from financing activities:
Repayments of purchase commitment liabilities		(150,000	)		(50,000	)

Net cash used in financing activities	$	(150,000	)	$	(50,000	)

Effect of exchange rate changes on cash and cash equivalents		35,910			1,151

Net increase (decrease) in cash and cash equivalents		191,131			(422,519	)

Total cash and cash equivalents at beginning of the period	$	859,271		$	1,675,210

Total cash and cash equivalents at the end of the period	$	1,050,402		$	1,252,691

Supplemental Disclosures of Cash Flow Information:
Cash paid during the year for:
Interest	$	5,956		$	8,641

Non-cash investing and financing activities:
Receivable from sale of NASCAR License	$	-		$	500,000

	●	delaying the implementation of or revising certain aspects of the Company’s business strategy;
	●	further reducing or delaying the development and launch of new products and events;
	●	further reducing or delaying capital spending, product development spending and marketing and promotional spending;
	● ●	selling additional assets or operations; seeking additional loans from third parties;
	●	further reducing other discretionary spending;
	●	entering into financing agreements on unattractive terms; and/or
	●	significantly curtailing or discontinuing operations.

	Licensing Agreements (Finite)		Software (Finite)		Distribution Contracts (Finite)		Trade Names (Indefinite)		Non- Compete Agreements (Finite)		Accumulated Amortization			Total
Balance as of January 1, 2025	$	2,381,743	$	7,976,068	$	560,000	$	201,969	$	170,222	$	(7,924,704	)	$	3,365,298
Amortization expense		-		-		-		-		-		(233,931	)		(233,931	)
Foreign currency translation adjustments		57,151		208,532		-		3,851		5,407		(143,842	)		131,099
Balance as of March 31, 2025	$	2,438,894	$	8,184,600	$	560,000	$	205,820	$	175,629	$	(8,302,477	)	$	3,262,466

Weighted average remaining amortization period at March 31, 2025		15.9		2.7		-				-

	Licensing Agreements (Finite)			Software Licenses (Finite)		Distribution Contracts (Finite)		Non- Compete Agreements (Finite)		Accumulated Amortization
Balance as of January 1, 2025	$	1,201,282		$	5,993,200	$	560,000	$	170,222	$	7,924,704
Amortization expense		19,952			213,979		-		-		233,931
Foreign currency translation adjustment		(1,507	)		139,942		-		5,407		143,842
Balance as of March 31, 2025	$	1,219,727		$	6,347,121	$	560,000	$	175,629	$	8,302,477

For the Years Ending December 31,	Total
2025 (remaining period)	$	671,581
2026		968,599
2027		202,291
2028		133,020
2029		133,020
Thereafter		948,135
Estimated aggregate amortization expense	$	3,056,646

	March 31,		December 31,
	2025		2024
Accrued royalties	$	184,060	$	148,006
Accrued professional and consulting fees		68,312		68,517
Accrued development costs		34,281		26,925
Accrued taxes		125,306		55,131
Accrued payroll		205,445		191,736
Deferred revenue		501,599		390,463
Loss contingency reserves (see Note 9)		-		41,764
Accrued other		144,941		147,521
Total	$	1,263,944	$	1,070,063

	Offering Date	Shares Issued		Gross Proceeds		Net Proceeds		Wainwright Warrants Issued		Warrant Strike Price		Warrant Term
Registered direct offering 1	February 1, 2023		183,020	$	3.9 million	$	3.6 million		10,981	$	26.75	5 years
Registered direct offering 2	February 2, 2023		144,366	$	3.4 million	$	3.1 million		8,662	$	29.38	5 years
Registered direct offering 3	February 3, 2023		232,188	$	4.0 million	$	3.7 million		13,931	$	21.74	5 years


	For the Three Months Ended March 31,
	2025		2024
General and Administrative	$	-	$	69,731
Sales and Marketing		-		1,347
Development		-		(2,887	)
Stock-based compensation expense	$	-	$	68,191

	2025		2024
	For the Three Months Ended
	March 31,
	2025		2024
Stock options (1)		96,828		97,953
Warrants (2)		33,574		33,574
Dilutive securities		130,402		131,527

(1)	Represents all outstanding stock options as of March 31, 2025. The weighted average exercise price for anti-dilutive options was $61.76 for the three months ended March 31, 2025.
(2)	Represents all outstanding warrants as of March 31, 2025. The exercise price for the warrants range from $21.74 to $29.38.

	Three Months Ended March 31,
Customer	2025			2024
Customer B		-*	%		19.7	%
Customer C		-*	%		20.7	%
Customer D		74.9	%		51.1	%
Customer H		10.6	%		-*	%
Total		85.5	%		91.5	%


	For the Three Months Ended March 31,
	2025			2024
Revenues:
Gaming	$	1,758,453		$	3,029,036
Esports		-			-
Total Revenues	$	1,758,453		$	3,029,036

Cost of Revenues:
Gaming	$	465,386		$	666,627
Esports		-			-
Total Cost of Revenues	$	465,386		$	666,627

Gross Profit:
Gaming	$	1,293,067		$	2,362,409
Esports		-			-
Total Gross Profit	$	1,293,067		$	2,362,409

Sales and Marketing Expenses:
Gaming	$	97,701		$	196,259
Esports		-			54,127
Total Sales and Marketing Expenses	$	97,701		$	250,386

Development Expenses:
Gaming	$	601,953		$	1,063,357
Esports		-			-
Total Development Expenses	$	601,953		$	1,063,357

General and Administrative Expenses:
Gaming	$	1,163,226		$	2,165,042
Esports		5,256			25,224
Total General and Administrative Expenses	$	1,168,482		$	2,190,266

Depreciation and Amortization:
Gaming	$	11,951		$	61,298
Esports		6,175			12,426
Total Depreciation and Amortization	$	18,126		$	73,724

Loss From Operations
Gaming	$	(71,719	)	$	(1,123,547	)
Esports		(21,476	)		(91,777	)
Total Loss From Operations	$	(93,195	)	$	(1,215,324	)

Interest Expense, net:
Gaming	$	(13,010	)	$	(30,882	)
Esports		-			-
Total Interest Expense, net	$	(13,010	)	$	(30,882	)

Other Income (Expense), net
Gaming	$	1,064,882		$	(409,164	)
Esports		63,936			(28,028	)
Total Other Income (Expense), net	$	1,128,818		$	(437,192	)

Net Income (Loss):
Gaming	$	1,044,089		$	(1,591,569	)
Esports		(21,476	)		(91,829	)
Total Net Income (Loss)	$	1,022,613		$	(1,683,398	)

	March 31, 2025		December 31, 2024
Total Assets:
Gaming	$	4,503,265	$	5,065,073
Esports		1,560,590		1,203,148
Total Assets	$	6,063,855	$	6,268,221

Title		Release Date and Platform
Le Mans Ultimate		February 20, 2024, available on PC
Le Mans Ultimate – 2024 DLC Pack 1		July 23, 2024, available on PC
Le Mans Ultimate – 2024 DLC Pack 2		September 24, 2024, available on PC
Le Mans Ultimate – 2024 DLC Pack 3		December 10, 2024, available on PC
Le Mans Ultimate – 2024 DLC Pack 4		February 25, 2025, available on PC

	●	the initial game delivered digitally or via physical disk at the time of sale, which also typically provides access to offline core game content;
	●	updates to previously released games on a when-and-if-available basis, such as software patches or updates, and/or additional content to be delivered in the future, both paid and free; and
	●	outsourced code and content development services.

	For the Three Months Ended March 31,				Change
	2025		2024		$			%
Revenues:
Gaming	$	1,758,453	$	3,029,036	$	(1,270,583	)		(41.9	)%
Esports		-		-		-			-	%
Total Revenues	$	1,758,453	$	3,029,036	$	(1,270,583	)		(41.9	)%

	March 31, 2025			December 31, 2024
Cash and cash equivalents	$	1,050,402		$	859,271
Working capital (deficiency)	$	(1,919,162	)	$	(2,225,300	)

	Three Months Ended March 31, 2025			Three Months Ended March 31, 2024
Net income (loss)	$	1,022,613		$	(1,683,398	)
Interest expense, net		13,010			30,882
Depreciation and amortization (1)		252,057			601,946
EBITDA		1,287,680			(1,050,570	)
Gain from settlement of purchase commitment liabilities		(175,460	)		-
Gain from Settlement Agreement		(500,000	)		-
Stock-based compensation		-			68,191
Adjusted EBITDA	$	612,220		$	(982,379	)

Date: May 9, 2025	MOTORSPORT GAMES INC.

	By:	/s/ Stephen Hood
		Stephen Hood
		Chief Executive Officer
		(Principal Executive Officer)

	By:	/s/ Stanley Beckley
		Stanley Beckley
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

1.	I have reviewed this Quarterly Report on Form 10-Q of Motorsport Games Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

	(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.