Motorsport Games Inc.
For the period ended Dec 31, 2025. Filed Mar 10, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 10, 2026
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 31,2025
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 |
|---|---|
| State or other jurisdiction of incorporation or organization | I.R.S. Employer Identification No. |
| 3350 SW 148th Avenue, Suite 207 Miramar, FL | 33027 |
| Address of principal executive offices | Zip Code |
Registrant’s telephone number, including area code:(305) 413-0812
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Class A common stock, $0.0001 par value per share | MSGM | The Nasdaq Stock Market LLC (The Nasdaq Capital Market) |
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ |
|---|---|
| Non-accelerated filer ☒ | Smaller reporting company ☒ |
| Emerging growth company ☒ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No☒
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant, based upon the closing price of the registrant’s Class A common stock as reported on The Nasdaq Capital Market on June 30, 2025, the last business day of the registrant’s most recently completed second fiscal quarter, was approximately $10,362,427.
As of March 10, 2026, the registrant had 5,078,450 shares of Class A common stock, with 1 vote per share, and 700,000 shares of Class B common stock, with 10 votes per share, issued and outstanding. At such date, Driven Lifestyle Group LLC (“Driven Lifestyle”) owned (i)1,480,385 shares of the registrant’s issued and outstanding Class A common stock and (ii) all 700,000 shares of the registrant’s issued and outstanding Class B common stock.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive proxy statement relating to its 2026 annual meeting of stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. Such proxy statement will be filed with the U.S. Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates.
Motorsport Games Inc.
Form 10-K
For the Fiscal Year Ended December 31, 2025
TABLE OF CONTENTS
| Page | ||
|---|---|---|
| PART I | ||
| Item 1 | Business | 10 |
| Item 1A | Risk Factors | 16 |
| Item 1B | Unresolved Staff Comments | 42 |
| Item 1C | Cybersecurity | 42 |
| Item 2 | Properties | 43 |
| Item 3 | Legal Proceedings | 43 |
| Item 4 | Mine Safety Disclosures | 43 |
| PART II | ||
| Item 5 | Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 44 |
| Item 6 | [Reserved] | 44 |
| Item 7 | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 44 |
| Item 7A | Quantitative and Qualitative Disclosures About Market Risk | 57 |
| Item 8 | Financial Statements and Supplementary Data | 58 |
| Item 9 | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 59 |
| Item 9A | Controls and Procedures | 59 |
| Item 9B | Other Information | 60 |
| Item 9C | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. | 60 |
| PART III | ||
| Item 10 | Directors, Executive Officers and Corporate Governance | 61 |
| Item 11 | Executive Compensation | 61 |
| Item 12 | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 61 |
| Item 13 | Certain Relationships and Related Transactions, and Director Independence | 61 |
| Item 14 | Principal Accountant Fees and Services | 61 |
| PART IV | ||
| Item 15 | Exhibits and Financial Statement Schedules | 62 |
| Signatures | 69 | |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K (this “Report”) of Motorsport Games Inc. (the “Company,” “Motorsport Games,” “we,” “us” or “our”) contains certain statements, which are not historical facts and are “forward-looking statements” within the meaning of federal securities laws. These forward-looking statements are subject to certain risks, trends and uncertainties. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, strategies, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. We use words, such as “could,” “would,” “may,” “might,” “will,” “expect,” “likely,” “believe,” “continue,” “anticipate,” “estimate,” “intend,” “plan,” “project” and other similar expressions to identify some forward-looking statements, but not all forward-looking statements include these words. For example, forward-looking statements include, but are not limited to, statements we make relating to:
| ● | 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 2026/27 Le Mans Virtual Series to commence this year; |
| ● | 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 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, potential acquisitions, mergers 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; 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. |
The forward-looking statements contained in this Report are based on assumptions that we have made in light of our industry experience and our perceptions of historical trends, current conditions, expected future developments and other factors that we believe are appropriate under the circumstances. As you read and consider this Report, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties (many of which are beyond our control) and assumptions that are difficult to predict. Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual operating and financial performance and cause our performance to differ materially from the performance anticipated in the forward-looking statements. Important factors that could cause our actual results to differ materially from those projected in any forward-looking statements are discussed in “Risk Factors” in Part I, Item 1A of this Report, as updated in our subsequent filings with the Securities and Exchange Commission (the “SEC”). In addition to factors that may be described in our filings with the SEC, including this Report, the following factors, among others, could cause our actual results to differ materially from those expressed in any forward-looking statements made by us:
| (i) | difficulties and/or delays in accessing available liquidity, and other unanticipated difficulties in obtaining 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; 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 a pandemic, 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; and/or (E) 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, due to less than anticipated customer acceptance of our new game titles, us 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, 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 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; and |
| (xvii) | difficulties and/or delays 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. |
Additionally, there are other risks and uncertainties described from time to time in the reports that we file with the SEC. Should one or more of these risks or uncertainties materialize or should any of these assumptions prove to be incorrect, our actual operating and financial performance may vary in material respects from the performance projected in these forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made, and except as required by law, we undertake no obligation to update any forward-looking statement contained in this Report to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances, except as otherwise required by law. New factors that could cause our business not to develop as we expect emerge from time to time, and it is not possible for us to predict all of them. Further, we cannot assess the impact of each currently known or new factor on our results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
RISK FACTORS SUMMARY
We are subject to a variety of risks and uncertainties, including risks related to our financial condition and liquidity; risks related to our business and industry; risks related to our relationship with Driven Lifestyle Group LLC (“Driven Lifestyle”), formerly known as Motorsport Network, LLC, which controls more than a majority of our issued and outstanding voting shares; risks related to our Company; risks related to the ownership of our Class A common stock; and certain general risks, which could have a material adverse effect on our business, financial condition, liquidity, results of operations and cash flows. These risks include, but are not limited to, the following principal risks:
Risks Related to Our Financial Condition and Liquidity
| ● | We may require additional capital to meet our financial obligations, and this capital might not be available on acceptable terms or at all. |
| ● | Restrictions under the Credit Agreement with Citibank may affect our ability to finance our operations. |
Risks Related to Our Business and Industry
| ● | If we do not consistently deliver popular products our business will be negatively impacted. |
| ● | Our business and products are highly concentrated in the racing game genre, and our operating results may suffer if consumer preferences shift away from this genre. |
| ● | If we do not provide high-quality products in a timely manner, our business operations, financial performance, liquidity, cash flows and/or results of operations may be negatively impacted. |
| ● | Declines in consumer spending and other adverse changes in economic, market and geopolitical conditions could have a material adverse effect on our business, financial condition and operating results. |
| ● | We depend on a small number of franchises for a significant portion of our revenues and profits. |
| ● | Our ability to acquire and maintain licenses to intellectual property affects our revenue and profitability. |
| ● | Our business is partly dependent on our ability to enter into software development arrangements. |
| ● | Our business depends in part on the success and availability of platforms and mass media channels developed by third parties. |
| ● | Third-party platform providers may be able to influence our products and costs. |
| ● | The increasing importance of free-to-play games to our business exposes us to the risks of that business model. |
| ● | We are subject to risks of operating in a rapidly developing industry and a relatively new market. |
| ● | If we fail to attract more advertisers and sponsors to our gaming platform, tournaments or competitions, our revenues will be adversely affected. |
| ● | We are reliant on the retention of certain key personnel and the hiring of strategically valuable personnel,. |
| ● | Competition in the interactive entertainment industry is intense, and our existing and potential users may be attracted to competing products or other forms of entertainment. |
| ● | Our revenue may be harmed by the proliferation of “cheating” programs and scam offers that seek to exploit our games and players. |
| ● | Some of our players may make sales or purchases of virtual items used in our games through unauthorized or fraudulent third-party websites, which may reduce our revenue. |
| ● | The success of our business relies on our marketing and branding efforts, and these efforts may not be accepted by consumers to the extent we planned. |
| ● | If we fail to receive our target ratings for certain titles, or if our retailers refuse to sell such titles due to what they perceive to be objectionable content, it could have a negative impact on our business. |
| ● | Government regulations applicable to us may negatively impact our business. |
| ● | We are exposed to seasonality in the sale of our retail products. |
| ● | Our retail products, online gaming platform and games offered through our platform may contain defects. |
| ● | We may be held liable for content displayed on, retrieved from or linked to our platform. |
| ● | We may experience security breaches and cyber threats. |
| ● | Our business could be adversely affected if our data privacy and security practices are inadequate. |
| ● | If we were to lose server capacity or lack sufficient Internet bandwidth for any reason, our business could suffer. |
| ● | A disruption in service on our website or platforms could damage our reputation and result in a loss of traffic and visitors, which could harm our business, brand, operating results and financial condition. |
| ● | Our business partners may be unable to honor their obligations to us, or their actions may put us at risk. |
| ● | Our efforts to expand into new products and services may subject us to additional risks. |
| ● | Failure to adequately protect our intellectual property, technology and confidential information could harm our business and operating results. |
| ● | The costs involved in enforcement of our intellectual property rights could harm our business, financial condition and results of operations. |
| ● | We may be subject to claims of infringement of third-party intellectual property rights. |
| ● | Our technology, content, and brands are subject to intellectual property infringement. |
| ● | We use open source software in connection with certain of our games and services, which may pose particular risks to our proprietary software, products, and services. |
| ● | If technology we rely upon becomes unavailable or fails to adequately serve our needs and we cannot find alternatives, it may negatively impact our operating results. |
| ● | Our international operations are subject to increased challenges and risks. |
| ● | Catastrophic events may disrupt our business. |
Risks Related to Our Relationship with Driven Lifestyle
| ● | Driven Lifestyle controls a significant portion of our Class A common stock and all of our Class B common stock and therefore has the ability to exert significant control over the direction of our business. |
| ● | We are a “controlled company” within the meaning of the NASDAQ rules and, as a result, qualify for and may rely on exemptions from certain corporate governance requirements of NASDAQ. |
| ● | Driven Lifestyle’s competitive position in certain markets may constrain our ability to build and maintain certain partnerships or relationships in the motorsport industry. |
| ● | Our inability to resolve in a manner favorable to us any potential conflicts or disputes that arise between us and Driven Lifestyle or its subsidiaries may adversely affect our business and prospects. |
Risks Related to Our Company
| ● | Our limited operating history makes it difficult to evaluate our current business and future prospects. |
| ● | Impairment of our intangible assets could have a material adverse impact on our results of operations. |
| ● | We have identified material weaknesses in our internal control over financial reporting which could result in us not being able to accurately or timely report our financial condition or results of operations, which may adversely affect our business and the trading price of our Class A common stock. |
| ● | We are an emerging growth company and a smaller reporting company, and we cannot be certain if the reduced disclosure requirements applicable to us will make our common stock less attractive to investors. |
| ● | We may acquire other companies, technologies, or assets, which could divert our management’s attention. |
| ● | We may be subject to various legal proceedings, claims, litigation, governmental investigations or inquiries and other disputes from time to time. |
| ● | Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our operating results and financial condition. |
Risks Related to Ownership of Our Class A Common Stock
| ● | We cannot guarantee our Class A common stock will continue to be listed from Nasdaq. |
| ● | Substantial future sales of our Class A common stock, or the perception that such sales may occur, could depress the price of our Class A common stock. |
| ● | Our certificate of incorporation has limitations on the liability of our directors, and we may have to indemnify our officers and directors in certain instances. |
| ● | Certain provisions in our charter documents and Delaware law could limit attempts by our stockholders to replace or remove our board of directors or current management. |
| ● | Our certificate of incorporation and bylaws provide that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders. |
| ● | We expect that the price of our Class A common stock will fluctuate substantially. |
| ● | We have only a minimal number of shares of Class A Common Stock available for equity award grants under the Motorsport Games Inc. 2021 Equity Incentive Plan. |
| ● | If securities industry analysts cease to publish research reports, or publish unfavorable reports, on us, the market price and market trading volume of our Class A common stock could be negatively affected. |
| ● | The dual class structure of our common stock may adversely affect the trading market for our Class A common stock. |
| ● | We do not intend to pay dividends for the foreseeable future. |
General Risk Factors
| ● | Our results of operations and financial condition are subject to management’s accounting judgments and estimates, as well as changes in accounting policies. |
| ● | The requirements of being a public company may require significant resources. |
| ● | If we fail to maintain proper and effective internal control over financial reporting, our ability to produce accurate and timely financial statements could be impaired. |
| ● | We are subject to risks related to corporate and social responsibility and reputation. |
| ● | A future shutdown of the U.S. federal government may adversely affect our business. |
For a more complete discussion of the material risk factors applicable to us, see “Risk Factors” in Part I, Item 1A of this Report.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.