[Executive Summary & Business Update](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Update) Motorsport Games achieved significant Q2 2025 growth, driven by "Le Mans Ultimate" performance and strategic initiatives, solidifying its financial position and expanding the Le Mans franchise [Q2 2025 Highlights & CEO Commentary](index=1&type=section&id=Q2%202025%20Highlights%20%26%20CEO%20Commentary) Motorsport Games reported significant growth in Q2 2025, driven by the strong performance of 'Le Mans Ultimate' and strategic marketing, now on a more solid financial footing - Q2 2025 was an incredible period of growth, with Le Mans Ultimate achieving **record player activity** and greatly increased revenues year-over-year due to key features and strong marketing[3](index=3&type=chunk) - The company plans to continue this trend with an expansion downloadable content (DLC) for Le Mans Ultimate, including the European Le Mans Series, expected to be delivered by the end of Q3 2025[3](index=3&type=chunk) - Motorsport Games is committed to growing the Le Mans franchise and developing new titles to bolster its portfolio and diversify income streams, now operating on a more solid financial footing[3](index=3&type=chunk) [Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) The company demonstrated robust Q2 2025 financial performance with substantial year-over-year increases across key metrics including revenue, gross profit, net income, and Adjusted EBITDA [Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20and%20Subsequent%20Business%20Update) Motorsport Games reported a strong Q2 2025 with significant year-over-year increases in revenue, gross profit, net income, and Adjusted EBITDA, driven by product performance and strategic financial management [Revenue and Gross Profit](index=1&type=section&id=Select%20Financial%20Highlights%20-%20Revenue%20and%20Gross%20Profit) Q2 2025 saw a substantial year-over-year increase in revenue and gross profit, significantly improving the gross profit margin Revenue and Gross Profit (in millions USD) | Metric | Q2 2025 (approx.) | Q2 2024 (approx.) | Change ($) | Change (%) | | :----- | :---------------- | :---------------- | :--------- | :--------- | | Revenue | $2.6 million | $1.9 million | $0.7 million | 37.7% | | Gross Profit | $2.1 million | $1.1 million | $1.0 million | 90.9% | | Gross Profit Margin | 82.4% | 59.0% | 23.4 pp | | [Net Income and EPS](index=1&type=section&id=Select%20Financial%20Highlights%20-%20Net%20Income%20and%20EPS) Net income and EPS attributable to Class A common stock experienced significant year-over-year growth in Q2 2025, bolstered by revenue and other operating income Net Income and EPS (in millions USD, except per share) | Metric | Q2 2025 (approx.) | Q2 2024 (approx.) | Change ($) | Change (%) | | :----- | :---------------- | :---------------- | :--------- | :--------- | | Net Income | $4.2 million | $2.1 million | $2.1 million | 103.0% | | Net Income Attributable to Motorsport Games Inc. | $4.3 million | $2.1 million | $2.2 million | 102.2% | | Net Income Attributable to Class A Common Stock per Share | $0.82 | $0.77 | $0.05 | 6.5% | - The increase in net income was driven by a **$0.7 million increase in consolidated revenue** and **$1.1 million in other operating income**, which included $0.8 million from the Wesco Insurance Company settlement and $0.3 million from negotiated vendor invoice discounts[6](index=6&type=chunk) [Adjusted EBITDA](index=2&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA showed a significant positive turnaround in Q2 2025, primarily due to increased net income and reduced stock-based compensation Adjusted EBITDA (in USD) | Metric | Q2 2025 | Q2 2024 | Change ($) | | :----- | :------ | :------ | :--------- | | Adjusted EBITDA | $3,696,847 | $(532,953) | $4,229,800 | - The improvement in Adjusted EBITDA was primarily due to the same factors driving the change in net income, as well as a decrease in stock-based compensation compared to the prior year period[8](index=8&type=chunk) [Cash Flow, Liquidity, and Capital Management](index=2&type=section&id=Cash%20Flow%2C%20Liquidity%2C%20and%20Capital%20Management) The company maintained a stable cash position, generated positive operational cash flow in H1 2025, and secured additional funding for working capital and strategic investments [Cash Flow and Liquidity](index=2&type=section&id=Cash%20Flow%20and%20Liquidity) As of June 30, 2025, the Company had $2.4 million in cash, increasing to $2.8 million by July 31, 2025, and generated $0.3 million in cash from operations during the first six months of 2025 Cash and Cash Equivalents (in millions USD) | Metric | As of June 30, 2025 | As of July 31, 2025 | | :----- | :------------------ | :------------------ | | Cash and Cash Equivalents | ~$2.4 million | ~$2.8 million | - Generated cash from operations of **$0.3 million** during the six months ended June 30, 2025, primarily due to **$0.8 million from the Wesco Insurance Company settlement** and **$0.5 million from a settlement agreement with HC2 Holdings 2 Inc**[7](index=7&type=chunk)[10](index=10&type=chunk) - The Company expects a net cash outflow from operations for the foreseeable future as it continues to develop its product portfolio and invest in new video game titles[10](index=10&type=chunk) - Completed a registered direct offering on July 29, 2024, raising approximately **$1.0 million in gross proceeds** for working capital and general corporate purposes[12](index=12&type=chunk) - Entered into a private placement on April 11, 2025, for approximately **$2.5 million in gross proceeds** (net $2.35 million) from the issuance of Class A common stock and pre-funded warrants, intended for working capital, general corporate expenses, and strategic initiatives[13](index=13&type=chunk) [Non-GAAP Financial Measures](index=3&type=section&id=Non-GAAP%20Financial%20Measures) The company utilizes Adjusted EBITDA as a non-GAAP measure to provide a clearer view of core operating performance by excluding non-recurring and non-cash items [Use of Non-GAAP Financial Measures](index=3&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) The company uses Adjusted EBITDA, a non-GAAP measure, to assess operating performance by excluding items not representative of its core business, such as interest, depreciation, amortization, and specific gains/losses from settlements and stock-based compensation - Adjusted EBITDA is defined as EBITDA (net income plus interest expense, depreciation, and amortization, less income tax benefit) adjusted to exclude gain from settlement of license liabilities and other agreements, impairment of intangible assets, loss contingency expense, and stock-based compensation expenses[15](index=15&type=chunk) - Management uses Adjusted EBITDA to manage the business and evaluate financial performance, as it eliminates items affecting comparability between periods that are not considered representative of core ongoing operating business[16](index=16&type=chunk) - Adjusted EBITDA is not a recognized term under U.S. GAAP and should not be considered an alternative to GAAP measures like revenue, net income, or cash flows from operations, nor a measure of liquidity or free cash flows[17](index=17&type=chunk) [Company Information & Disclosures](index=3&type=section&id=Company%20Information%20%26%20Disclosures) This section provides an overview of Motorsport Games' business, outlines communication practices, details forward-looking statements, and lists contact information [About Motorsport Games](index=3&type=section&id=About%20Motorsport%20Games) Motorsport Games is a racing game developer, publisher, and esports ecosystem provider for official motorsport racing series, holding licenses for iconic events and owning simulation platforms - Motorsport Games is a racing game developer, publisher, and esports ecosystem provider for official motorsport racing series, aiming to create authentically realistic racing games[18](index=18&type=chunk) - The company is the officially licensed video game developer and publisher for iconic series including the 24 Hours of Le Mans and FIA World Endurance Championship, recently releasing Le Mans Ultimate Version 1.0[18](index=18&type=chunk) - Motorsport Games also owns the industry-leading rFactor 2 and KartKraft simulation platforms and is an award-winning esports partner for the 24 Hours of Le Mans, creating the renowned Le Mans Virtual Series[18](index=18&type=chunk) [Conference Call and Webcast Details](index=3&type=section&id=Conference%20Call%20and%20Webcast%20Details) The company will host a conference call and webcast on August 13, 2025, at 5:00 p.m. ET to discuss its financial results, accessible via phone or the investor relations website - A conference call and webcast will be held on August 13, 2025, at 5:00 p.m. ET to discuss financial results, accessible by dialing 1-800-579-2543 or 1-785-424-1789 (Conference ID 'MOTOR') or via the Motorsport Games Investor Relations website[18](index=18&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) The report contains forward-looking statements regarding the company's future plans, including growth of the Le Mans franchise, new titles, and financial stability, which are subject to significant risks and uncertainties - Forward-looking statements include confidence in solid financial footing, efforts to grow the Le Mans franchise and new titles, planned updates for Le Mans Ultimate, and the need for additional funding to continue operations[20](index=20&type=chunk) - Significant risks and uncertainties include difficulties in achieving growth plans, delays in new game features or DLC, failure to improve long-term funding, decreased sales due to asset disposition, and inability to execute business strategies[21](index=21&type=chunk) - Other risks include unanticipated events impacting product timing, less than expected benefits from management strategies, negative operating cash flows, difficulties in resolving liquidity issues, and challenges in completing cost reduction initiatives[21](index=21&type=chunk) [Website and Social Media Disclosure](index=5&type=section&id=Website%20and%20Social%20Media%20Disclosure) Motorsport Games communicates material financial information to investors via its investor relations website, SEC filings, press releases, conference calls, webcasts, and social media - The company announces material financial information through its investor relations website (ir.motorsportgames.com), SEC filings, press releases, public conference calls, webcasts, social media, and blogs[24](index=24&type=chunk) Company Websites and Social Media Channels | Websites | Social Media | | :------------------ | :-------------------- | | motorsportgames.com | Twitter: @msportgames | | | Instagram: msportgames | | | Facebook: Motorsport Games | | | LinkedIn: Motorsport Games | [Contacts](index=5&type=section&id=Contacts) Contact information for investor relations and media inquiries is provided - Investors can contact Investors@motorsportgames.com[25](index=25&type=chunk) - Media can contact PR@motorsportgames.com[25](index=25&type=chunk) [Appendix: Financial Statements](index=6&type=section&id=Appendix%3A%20Financial%20Statements) The appendix presents the unaudited condensed consolidated statements of operations, detailing financial results for the three and six months ended June 30, 2025 and 2024 [Condensed Consolidated Statements of Operations](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) The unaudited condensed consolidated statements of operations provide a detailed breakdown of the company's financial performance for the three and six months ended June 30, 2025, and 2024, covering revenues, cost of revenues, operating expenses, and net income Condensed Consolidated Statements of Operations (in USD) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues | $2,591,840 | $1,881,653 | $4,350,293 | $4,910,689 | | Cost of revenues | $454,887 | $771,647 | $920,273 | $1,438,274 | | Gross profit | $2,136,953 | $1,110,006 | $3,430,020 | $3,472,415 | | Sales and marketing | $126,307 | $205,549 | $224,008 | $455,935 | | Development | $270,343 | $868,745 | $872,296 | $1,932,102 | | General and administrative | $865,040 | $1,411,826 | $2,033,522 | $3,602,092 | | Depreciation and amortization | $11,697 | $63,138 | $29,823 | $136,862 | | Total operating expenses | $1,273,387 | $2,549,258 | $3,159,649 | $6,126,991 | | Gain from settlement of license liabilities | $- | $3,248,000 | $- | $3,248,000 | | Other operating income | $1,104,497 | $250,000 | $1,604,497 | $250,000 | | Income from operations | $1,968,063 | $2,058,748 | $1,874,868 | $843,424 | | Interest expense | $(4,740) | $(29,746) | $(17,750) | $(60,628) |\ | Other income (loss), net | $2,274,849 | $58,481 | $3,403,667 | $(378,711) | | Net income | $4,238,172 | $2,087,483 | $5,260,785 | $404,085 | | Net income attributable to Motorsport Games Inc. | $4,258,400 | $2,105,928 | $5,299,458 | $440,972 | | Net income attributable to Class A common stock per share: Basic and diluted | $0.82 | $0.77 | $1.26 | $0.16 | | Weighted-average shares of Class A common stock outstanding: Basic and diluted | $5,206,536 | $2,722,728 | $4,195,047 | $2,722,728 |

Core Viewpoint - Motorsport Games Inc. will report its financial results for the second quarter of 2025 on August 13, 2025, after market close, followed by a conference call to discuss the results [1][6]. Company Overview - Motorsport Games is a racing game developer, publisher, and esports ecosystem provider, focusing on official motorsport racing series [3]. - The company is the officially licensed developer and publisher for notable racing series such as the 24 Hours of Le Mans and the FIA World Endurance Championship [3]. - Recently, Motorsport Games released Le Mans Ultimate Version 1.0, which includes new cars, updated 2025 content, and additional improvements [3]. - The company owns leading simulation platforms, rFactor 2 and KartKraft, and powers F1® Arcade through a partnership with Kindred Concepts [3]. - Motorsport Games is recognized as an award-winning esports partner for the 24 Hours of Le Mans, creating the Le Mans Virtual Series [3]. Financial Communication - Participants can access the financial results webcast on the company's investor relations website and it will remain available for 12 months [2]. - The conference call can be accessed live via phone with specific dial-in numbers and a Conference ID [2].

Core Viewpoint - Motorsport Games Inc. has officially released Le Mans Ultimate Version 1.0, marking the end of its Early Access phase and initiating a new phase of development and expansion for the game [1][6][10] New Features and Additions - The 1.0 release includes two new cars, the Aston Martin Valkyrie AMR LMH and the Mercedes AMG LMGT3, available at no extra cost, enhancing the gameplay experience with high-performance vehicles [2][10] - The update also features the BMW M4 Evo LMGT3, updated to 2025 specifications, available for free to previous owners of the M4 [2][10] Gameplay Enhancements - Version 1.0 introduces significant gameplay refinements, including a revised LMGT3 tyre model to improve grip loss and thermal operating windows, aiming for a smoother experience for players [3][10] - Usability improvements include a reworked car setup interface that consolidates critical elements into a single screen and an extended Race Weekend calendar for the full 2025 season [3][10] Purchasing Experience - The game's Steam store configuration has been updated, integrating previously free DLCs into the core game and introducing a new 2024 WEC Bundle for easier access to post-launch content [4][10] Future Development Plans - The company is actively developing the European Le Mans Series and plans to showcase a hands-on build during the Silverstone ELMS weekend in September [6][10] - A full-featured single-player career mode is in the works, with a planned release for early 2026 [6][10] Company Overview - Motorsport Games is a developer and publisher of racing games, focusing on creating authentic racing experiences and building a virtual racing ecosystem that includes esports competitions [7][10]

Core Insights - Motorsport Games Inc. has achieved significant operational milestones for its game Le Mans Ultimate and its online racing system RaceControl, enhancing user experience and engagement [1][4][5] Group 1: Game Development and Updates - In June 2025, Motorsport Games executed major updates for Le Mans Ultimate, including support for Teams and Driver Swaps, and Custom Liveries for RaceControl Pro subscribers [3] - The game transitioned to "version 1.0" on June 13, 2025, introducing two new cars for all players and confirming the addition of the European Le Mans Series as an expansion [3][4] - The company plans to release new content on July 22, 2025, including quality of life fixes and the highly anticipated Career Mode expected in early 2026 [6] Group 2: Performance Metrics - Le Mans Ultimate reached an all-time peak concurrent player count, surpassing initial launch levels from February 2024 and more than doubling the previous month's figures [4] - The game generated revenues approximately eleven times faster than the prior title, rFactor 2, over the past eighteen months [4] - Subscriptions to the RaceControl service grew by 148% in June 2025 compared to the previous month, setting new monthly revenue records since its launch in December 2024 [4] Group 3: Company Vision and Strategy - Motorsport Games aims to create racing games that are authentically close to reality while building a comprehensive virtual racing ecosystem [6] - The company is focused on enhancing its esports offerings, including the renowned Le Mans Virtual Series, to drive excitement and engagement among racing fans [6]

Core Viewpoint - Motorsport Games Inc. announced the official 1.0 release date for Le Mans Ultimate on July 22, 2025, marking the end of the Early Access period and the start of a new development phase driven by community feedback and technical advancements [1][12]. Game Updates - The version 1.0 release will include two major vehicle additions: the Mercedes AMG LMGT3 Evo and the Aston Martin Valkyrie AMR LMH, both available for free to all players as part of the base game [2][3]. - All official 2025 team liveries from the FIA WEC grid will also be added free of charge, enhancing player immersion in the current racing season [4]. Community Engagement and Features - Since its Early Access launch in February 2024, Le Mans Ultimate has evolved rapidly, introducing features such as RaceControl-powered online events, co-operative mode, and driver swaps, alongside improvements in product stability [5][6]. - The CEO of Motorsport Games emphasized that the 1.0 release is not the end of development but the beginning of a more ambitious project, with ongoing enhancements planned for features like Teams and Driver Swaps [6][16]. Future Developments - A new single-player "career mode" is in production, expected to launch in Q1 2026, allowing players to experience a driver’s career within a racing team [6][16]. - The company teased the addition of the European Le Mans Series (ELMS), which will feature three new circuits and the LMP3 category of race cars, with more details to be announced soon [7][15]. Company Overview - Motorsport Games is a developer and publisher of racing games, focusing on creating authentic racing experiences and engaging esports competitions, and is the official developer for the 24 Hours of Le Mans and the FIA World Endurance Championship [9].

Core Insights - Motorsport Games Inc. has released a significant update for "Le Mans Ultimate," introducing features such as online driver swaps, a community Team Management system, customized liveries, and the completion of the 2024 WEC season content [1][12][14] Feature Enhancements - The update includes the debut of driver swap functionality, allowing players to transfer control of the car to teammates during live online races, enhancing the endurance racing experience [2][7] - Players can now form persistent teams, assign roles, and manage line-ups using built-in team management tools, fostering a strategic gameplay environment [3][7] - A custom livery system has been introduced, enabling players to design and share car liveries for online multiplayer events, enhancing personalization and immersion [4][7] Content Additions - The update releases Pack 4 of the 2024 Season Pass, completing the 2024 FIA WEC season content, which includes the Lusail International Circuit and two new GT3 entries: Lamborghini Huracán LMGT3 Evo2 and Lexus RC F LMGT3 [5][6] - With this update, "Le Mans Ultimate" now features a total of 11 tracks with 21 layouts and 25 cars, including 11 Hypercars, 1 LMP2, 4 GTEs, and 9 LMGT3s [6] Future Developments - The CEO of Motorsport Games emphasized that this update marks a pivotal moment for the game and reflects the community's feedback, with more features and updates expected in the future [7][12] - A special update is scheduled for June 13, 2025, to provide insights into the future of the title and upcoming features [7][12]

Financial Performance - Q1 2025 revenues were $18 million[7] - Q1 2025 net income was $10 million[7] - Q1 2025 adjusted EBITDA was $06 million[7] - Q1 2025 EPS was $033 compared to an EPS loss of $061 for Q1 2024[7] - Net income attributable to Motorsport Games Inc was $104 million in Q1 2025 compared to a net loss of $166 million in Q1 2024 an improvement of $27 million[7,8] Liquidity and Funding - As of March 31 2025 the Company had cash and cash equivalents of approximately $11 million which increased to $31 million as of April 30 2025[10] - The increase in cash was primarily due to $235 million in net proceeds from a private placement of Class A common stock and a pre-funded warrant which closed on April 11 2025[10] - The Company discloses substantial doubt about its ability to continue as a going concern and believes it needs additional funding to continue operations[10] Operational Highlights - Released an update for Le Mans Ultimate in February 2025 including new LMGT3 category cars and quality of life improvements[7]

Financial Data and Key Metrics Changes - Revenues for Q1 2025 were $1,800,000, down by $1,300,000 or 41.9% compared to the same period in the prior year [13] - Net income for the quarter was $1,000,000, an improvement of $2,700,000 from a net loss of $1,700,000 in the prior year [14] - Adjusted EBITDA was $600,000 for Q1 2025, compared to an adjusted EBITDA loss of $1,000,000 in the same period last year, marking an improvement of $1,600,000 [15][16] - Cash and cash equivalents increased from $1,100,000 as of March 31, 2025, to $3,100,000 by April 30, 2025, primarily due to $2,350,000 in net proceeds from a private placement [16][17] Business Line Data and Key Metrics Changes - Net revenues from the Le Mans Ultimate racing title were $400,000 higher in Q1 2025 compared to the same prior year period, despite Q1 2024 being the release quarter for the game [6][14] - Total revenues decreased primarily due to a $1,500,000 decrease in NASCAR-related revenues, as the company is no longer authorized to sell this title starting in 2025 [13][14] Market Data and Key Metrics Changes - The company has seen an increase in confidence in the market, with shares trading more than 2.5 times higher than the period prior to the announcement of the $2,500,000 investment [5][6] Company Strategy and Development Direction - The company is focusing on building owned infrastructure around its gaming titles, particularly through the Race Control subscription platform [7][11] - Plans to move the Le Mans Ultimate game from early access to a full release version 1.0 are underway, which will unlock new sales and marketing tactics [9] - The company is exploring opportunities to bring Le Mans Ultimate to PlayStation and Xbox, with discussions ongoing with potential publishing collaborators [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's improved state and the potential for growth following the recent investment [5][19] - The company is assessing new ways to expand the audience for Le Mans Ultimate and believes the racing game market is underserved in terms of quality and choice [11] Other Important Information - The company is exploring additional funding options, including equity and debt financing, to address liquidity shortfalls while continuing to develop its product portfolio [17] Q&A Session Summary - No specific questions or answers were documented in the provided content, indicating that the call may have concluded without a formal Q&A session.

Financial Data and Key Metrics Changes - Revenues for Q1 2025 were $1,800,000, down by $1,300,000 or 41.9% compared to the same period in the prior year [13] - Net income for the quarter was $1,000,000, an improvement of $2,700,000 from a net loss of $1,700,000 in the prior year [14] - Adjusted EBITDA was $600,000 for Q1 2025, compared to an adjusted EBITDA loss of $1,000,000 in the same period last year, reflecting an improvement of $1,600,000 [15] - Cash and cash equivalents increased from $1,100,000 as of March 31, 2025, to $3,100,000 by April 30, 2025, primarily due to $2,350,000 in net proceeds from a private placement [16] Business Line Data and Key Metrics Changes - Net revenues from the Le Mans Ultimate racing title increased by $400,000 in Q1 2025 compared to the same period in 2024, despite Q1 2024 being the release quarter for the game [6] - Total revenues decreased primarily due to a $1,500,000 drop in NASCAR-related revenues, as the company is no longer authorized to sell that title starting in 2025 [13][14] Market Data and Key Metrics Changes - The company noted that shares traded more than 2.5 times higher following the announcement of a $2,500,000 investment, indicating increased market confidence [6] Company Strategy and Development Direction - The company is focusing on building owned infrastructure around its gaming titles, particularly through the Race Control subscription platform [6] - Plans to move Le Mans Ultimate from early access to a full release version 1.0 are underway, which is expected to unlock new sales and marketing tactics [9] - The company is exploring opportunities to bring Le Mans Ultimate to PlayStation and Xbox, with discussions ongoing with potential publishing collaborators [10] - The company aims to diversify its portfolio and generate new revenue streams in the underserved racing game market [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's improved state and the potential for growth following the recent investment [5] - The company is taking measures to reduce costs and expects to have a net cash outflow from operations for the foreseeable future as it continues to develop its product portfolio [16] Other Important Information - The company is revisiting its esports event output, particularly the 24 Hours of Le Mans virtual event, which historically attracted significant attention and sponsorship revenue [10] - The company has a live licensing agreement with Kindred Concepts, with fees growing alongside their expansion [11] Q&A Session Summary - No specific questions or answers were provided in the content regarding the Q&A session.

Financial Performance - Revenue for Q1 2025 was approximately $1.8 million, a decrease of 41.9% compared to approximately $3.0 million in Q1 2024[6] - Gross profit for Q1 2025 was $1.3 million, down from $2.4 million in the same period last year, with a gross profit margin decrease to 73.5% from 78.0%[6] - Net income for Q1 2025 was $1.0 million, an improvement of $2.7 million compared to a net loss of $1.7 million in Q1 2024[7] - Adjusted EBITDA for Q1 2025 was $0.6 million, an improvement of $1.6 million from an Adjusted EBITDA loss of $1.0 million in Q1 2024[8] - Revenues for Q1 2025 were $1,758,453, a decrease of 42% compared to $3,029,036 in Q1 2024[34] - Gross profit for Q1 2025 was $1,293,067, down from $2,362,409 in Q1 2024, reflecting a decline of 45%[34] - Total operating expenses in Q1 2025 were $1,886,262, a reduction of 47% from $3,577,733 in Q1 2024[34] - The net income attributable to Motorsport Games Inc. for Q1 2025 was $1,041,058, compared to a net loss of $1,664,956 in Q1 2024[34] - Basic and diluted net income per share for Q1 2025 was $0.33, a significant improvement from a loss of $0.61 per share in Q1 2024[34] - The company reported a loss from operations of $93,195 in Q1 2025, an improvement from a loss of $1,215,324 in Q1 2024[34] Funding and Liquidity - The company raised $2.5 million in gross proceeds from a private placement of Class A common stock, which closed on April 11, 2025[9] - Cash and cash equivalents increased from approximately $1.1 million as of March 31, 2025, to $3.1 million as of April 30, 2025[11] - The company is exploring options for additional funding, including potential equity and debt financing arrangements[13] - The company continues to seek strategic alternatives to improve liquidity, including the potential sale or licensing of certain assets[17] - The company aims to improve liquidity through cost reduction and restructuring initiatives[27] Operational Changes - The workforce reduction in October 2024 impacted approximately 38% of the company's employees, aimed at reducing year-over-year operating expenses[14] - The company anticipates challenges in achieving growth plans and objectives due to various risks and uncertainties, including market conditions and operational costs[28] Product Development - The company plans a significant update for the Le Mans Ultimate game on June 10, 2025, featuring new game features and the final 2024 season content pack[4] - The company plans to release significant updates for the Le Mans Ultimate game, including new features and the final 2024 content pack[27]