UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission file number: 001-39868 Motorsport Games Inc. (Exact Name of Registrant as Specified in Its Charter) | Delaware | 86-17913 ...

Motorsport Games Inc. (NASDAQ:MSGM) Q1 2023 Earnings Conference Call May 11, 2023 6:00 PM ET Company Participants Ken Godskind - Director, Operations Stephen Hood - Chief Executive Officer Jason Potter - Chief Financial Officer Conference Call Participants Jason Tilchen - Canaccord Genuity Michael Kupinski - Noble Capital Markets Operator Thank you for standing by, and welcome to Motorsport Games Inc.???s First Quarter 2023 Earnings Call. All participants will be in listen-only mode. [Operator Instructions] ...

Financial Performance - Q1 2023 revenues were $1.7 million, compared to $3.3 million in Q1 2022[31] - Q1 2023 net loss was $5.3 million, significantly lower than the $16 million net loss in Q1 2022[31] - Q1 2023 adjusted EBITDA loss was $4.3 million, an improvement compared to the $5.6 million loss in Q1 2022[31] - The company raised approximately $11.3 million of gross proceeds through 3 registered direct offerings in February 2023[6, 30] Cost Reduction and Liquidity - The company's restructuring program is expected to generate annualized cost reductions of approximately $4 million by the end of 2023[10, 12] - As of March 31, 2023, the company had approximately $5.8 million in available cash on hand[17] - As of April 30, 2023, the company had approximately $4.9 million in available cash on hand[17] - The company achieved annualized savings of approximately $3.9 million through March 31, 2023, as part of its restructuring program[10] Operational Highlights - The company regained full compliance with the Nasdaq Listing Rules on January 30, 2023[14, 30] - The finale of the Le Mans Virtual Series, the 24 Hours of Le Mans Virtual, was held on January 14-15, 2023, attracting approximately 8.8 million video views and 27 million minutes watched[4, 45]

Part I: Financial Information [Condensed Consolidated Financial Statements (Unaudited)](index=8&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) The unaudited condensed consolidated financial statements for the three months ended March 31, 2023, show a significant decrease in revenue and a net loss of $5.3 million, with an accumulated deficit of $79.1 million, raising substantial doubt about the company's ability to continue as a going concern [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2023, total assets increased to $22.1 million from $18.9 million at year-end 2022, primarily due to a rise in cash and cash equivalents following financing activities, while total liabilities decreased, improving stockholders' equity Condensed Consolidated Balance Sheet Highlights (Unaudited) | Balance Sheet Item | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $5,794,556 | $979,306 | | Total Current Assets | $8,040,544 | $4,043,340 | | Total Assets | $22,097,812 | $18,897,792 | | **Liabilities & Equity** | | | | Total Current Liabilities | $6,932,062 | $13,321,608 | | Total Liabilities | $10,799,179 | $16,994,394 | | Accumulated deficit | $(79,080,078) | $(73,979,131) | | Total Stockholders' Equity | $11,298,633 | $1,903,398 | [Condensed Consolidated Statements of Operations](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended March 31, 2023, revenues decreased by 47.9% to $1.7 million, resulting in a net loss of $5.3 million, a significant improvement from the prior-year period primarily due to the absence of goodwill and intangible asset impairment charges Condensed Consolidated Statements of Operations (Unaudited) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Revenues | $1,729,355 | $3,321,789 | | Gross profit | $480,619 | $1,307,983 | | Loss from operations | $(5,411,389) | $(15,603,350) | | Net loss | $(5,259,192) | $(15,967,045) | | Net loss attributable to Motorsport Games Inc. | $(5,100,947) | $(15,137,617) | | Basic and diluted EPS | $(2.33) | $(12.97) | [Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the three months ended March 31, 2023, net cash used in operating activities was $5.7 million, while net cash provided by financing activities was $10.7 million, primarily from common stock issuance, leading to a net increase in cash of $4.8 million Cash Flow Summary (Unaudited) | Cash Flow Activity | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(5,683,701) | $(5,589,106) | | Net cash used in investing activities | $(15,057) | $(101,004) | | Net cash provided by financing activities | $10,712,034 | $148,152 | | Net increase (decrease) in cash | $4,815,250 | $(5,452,405) | | Cash and cash equivalents at end of period | $5,794,556 | $12,367,235 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes detail significant accounting policies and critical issues, including substantial doubt about the company's going concern ability, the extinguishment of a $12 million related party loan, ongoing litigation, and continued losses in both Gaming and Esports segments - The company has substantial doubt about its ability to continue as a going concern within one year, citing a net loss of **$5.3 million**, negative operating cash flow of **$5.7 million**, and an accumulated deficit of **$79.1 million** for the quarter[34](index=34&type=chunk)[43](index=43&type=chunk) - In January and February 2023, the company extinguished its entire outstanding debt under the **$12 million** Line of Credit with its majority stockholder, Motorsport Network, by issuing **780,385 shares** of Class A common stock[80](index=80&type=chunk)[207](index=207&type=chunk) - The company settled a portion of the HC2 and Continental Complaint for **$1.1 million**. As of March 31, 2023, an accrual of **$0.9 million** remains, and the company continues to defend its position against the remaining plaintiffs[113](index=113&type=chunk) Segment Performance (Q1 2023 vs Q1 2022) | Segment | Revenues (2023) | Revenues (2022) | Gross Profit/(Loss) (2023) | Gross Profit/(Loss) (2022) | | :--- | :--- | :--- | :--- | :--- | | Gaming | $1,439,217 | $2,958,388 | $564,378 | $1,554,381 | | Esports | $290,138 | $363,401 | $(83,759) | $(246,398) | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a 47.9% year-over-year revenue decline for Q1 2023, driven by lower sales in the Gaming segment, highlighting liquidity challenges and strategies to secure additional funding, implement cost reductions, and adjust its product roadmap [Results of Operations](index=35&type=section&id=Results%20of%20Operations) Total revenues for Q1 2023 fell to $1.7 million, a 47.9% decrease, primarily due to lower digital and retail sales in the Gaming segment and reduced sponsorship in Esports, while operating expenses significantly decreased due to the absence of prior-year impairment charges Revenue by Segment (Q1 2023 vs Q1 2022) | Segment | Q1 2023 Revenue | Q1 2022 Revenue | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Gaming | $1,439,217 | $2,958,388 | $(1,519,171) | (51.4)% | | Esports | $290,138 | $363,401 | $(73,263) | (20.2)% | | **Total** | **$1,729,355** | **$3,321,789** | **$(1,592,434)** | **(47.9)%** | - The decrease in Gaming segment revenue was driven by **$0.6 million** in lower digital game sales and **$0.8 million** in lower retail sales, primarily from the NASCAR portfolio[162](index=162&type=chunk) - Total operating expenses decreased by **$11.0 million** (65.2%), largely because the prior-year period included **$4.8 million** in goodwill impairment and **$4.5 million** in intangible asset impairment charges, which were absent in Q1 2023[172](index=172&type=chunk)[176](index=176&type=chunk)[178](index=178&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) The company faces significant liquidity challenges, with insufficient cash to fund operations for the remainder of 2023, despite raising approximately $11.0 million in Q1 2023 and eliminating debt, necessitating additional financing and cost-cutting measures - Management states that based on the company's cash position and average cash burn, they do not believe they have sufficient cash on hand to fund operations for the remainder of 2023 and that additional funding will be required[189](index=189&type=chunk) - In February 2023, the company completed three registered direct offerings, raising gross proceeds of approximately **$11.3 million**[91](index=91&type=chunk)[211](index=211&type=chunk)[212](index=212&type=chunk) - The 2022 Restructuring Program is expected to deliver approximately **$4 million** of total annualized cost reductions by the end of 2023, with **$3.9 million** of this target achieved as of March 31, 2023[141](index=141&type=chunk) - The company has modified its product roadmap to manage cash burn, including delaying the release of its upcoming INDYCAR game from 2023 to 2024[143](index=143&type=chunk)[192](index=192&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that this item is not applicable - The company, as a smaller reporting company, is not required to provide the information under this item[222](index=222&type=chunk) [Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that as of March 31, 2023, the company's disclosure controls and procedures were not effective due to a remaining material weakness in monitoring procedures, despite remediating two previously identified material weaknesses - Management concluded that disclosure controls and procedures were not effective as of March 31, 2023, due to a continuing material weakness in internal control over financial reporting[224](index=224&type=chunk) - During Q1 2023, the company remediated two material weaknesses related to (1) documentation of significant accounting positions and (2) segregation of duties[226](index=226&type=chunk) - A material weakness relating to the failure to design and maintain effective monitoring procedures and controls to evaluate the effectiveness of individual control activities has not yet been remediated[227](index=227&type=chunk) Part II: Other Information [Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine legal proceedings, with specific details on ongoing litigation disclosed in Note 9 of the financial statements, and believes the outcome of pending proceedings is not reasonably likely to have a material adverse effect on its business - The company refers to Note 9 – Commitments and Contingencies for additional information on legal proceedings[232](index=232&type=chunk) [Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) The company highlights a new risk factor concerning the management of executive transitions, following recent changes in CEO and CFO roles, warning that inadequate leadership transitions could cause disruption and adversely impact financial performance and strategic plans - A new risk factor was added regarding the potential for unsuccessful management of executive transitions, following the recent appointments of a new CEO (Stephen Hood, effective April 19, 2023) and CFO (Jason Potter, effective March 20, 2023)[234](index=234&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities during the quarter ended March 31, 2023, other than those already reported on Form 8-K, and the company did not repurchase any of its Class A common stock - No unregistered sales of equity securities occurred during the quarter, other than what was previously reported on Form 8-K[236](index=236&type=chunk) - The company did not purchase any of its equity securities during the quarter[237](index=237&type=chunk) [Exhibits](index=49&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications by the CEO and CFO, and various agreements related to recent financing activities

Financial Performance - Q4 2022 revenues were $3.8 million[3] - Q4 2022 net loss was $4.8 million[3] - Q4 2022 adjusted EBITDA loss was $3.5 million[3] - Year Ended December 31, 2022 Net Loss was $36.84 million[19] - The company expects to generate annualized cost reductions of approximately $4 million by the end of 2023[26] Key Initiatives and Releases - Released rFactor 2 Q4 update and content on November 7, 2022[3] - Released NASCAR Rivals on Nintendo Switch on October 14, 2022[3] - Released 2022 Season Expansion Update for NASCAR 21: Ignition on October 6, 2022[3] - Delivered the first 4 of 5 Rounds of the 2022-23 Le Mans Virtual Series[3] Liquidity and Going Concern - As of December 31, 2022, the Company had approximately $1 million of available cash on hand[21] - As of March 22, 2023, the Company had approximately $6.5 million of available cash on hand[21]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission file number: 001-39868 Motorsport Games Inc. (Exact Name of Registrant as Specified in Its Charter) | Delaware | 86-1791356 | | ...

Motorsport Games Inc. (NASDAQ:MSGM) Q3 2022 Results Conference Call November 18, 2022 5:00 PM ET Company Participants Ken Godskind - Director, Operations Dmitry Kozko - Executive Chairman, CEO and Interim CFO Conference Call Participants Jason Tilchen - Canaccord Michael Kupinski - Noble Capital Markets Mike Hickey - Benchmark Operator Greetings, and welcome to Motorsport Games Inc. Third Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer sessio ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission file number: 001-39868 Motorsport Games Inc. (Exact Name of Registrant as Specified in Its Charter) | Delaware | 86- ...

Motorsport Games Inc. (NASDAQ:MSGM) Q2 2022 Earnings Conference Call August 10, 2022 5:00 PM ET Company Participants Ken Godskind - Director of Operations Dmitry Kozko - Executive Chairman and CEO Jonathan New - Chief Financial Officer Conference Call Participants Jason Tilchen - Canaccord Genuity Michael Kupinski - NOBLE Capital Markets Operator Thank you for standing by, and welcome to Motorsport Games Incorporated Second Quarter 2022 Earnings Call. [Operator Instructions] As a reminder, today's conferenc ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission file number: 001-39868 Motorsport Games Inc. (Exact Name of Registrant as Specified in Its Charter) | Delaware | 86-1791356 | | --- | --- | | ...