Motorsport Games Inc.
For the period ended Jun 30, 2026. Filed Aug 14, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 14, 2026
MSGM$4.25-0.5%Stored close · as of Nov 6, 2026
What changed in Risk Factors?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-13.
0001493152-26-022725
Item 1A. Risk FactorsUnregistered Sales of Equity Securities and Use of ProceedsOther InformationCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-14.
0001493152-26-038360
Item 1A. Risk FactorsUnregistered Sales of Equity Securities and Use of ProceedsDefaults upon Senior SecuritiesMine Safety DisclosuresOther InformationThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 24 previous paragraphs and 41 current paragraphs.
16 unchanged; 5 reworded; 20 added; 3 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 1 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (20)
Current report
Our stockholder rights plan, along with certain provisions of our Certificate of Incorporation and Amended and Restated Bylaws and Delaware law could discourage, delay, or prevent a change in control that stockholders may consider favorable, which could adversely affect the trading price of our Class A Common Stock.
Current report
On July 22, 2026, our Board of Directors approved and adopted the Rights Agreement and authorized and declared a dividend distribution of one Right for each outstanding share of the Class A Common Stock to stockholders of record as of the close of business on August 3, 2026. The complete terms of the Rights are set forth in the Rights Agreement, dated as of July 22, 2026, with ClearTrust, LLC, a Florida limited liability company, as rights agent. In general terms, subject to certain exceptions, the Rights Agreement imposes significant dilution upon any person or group (other than us and certain other Exempt Persons (as defined in the Rights Agreement)), that becomes the beneficial owner of twelve and a half percent (12.5%) or more of the Class A Common Stock following our first public announcement of the adoption of the Rights Agreement. The term “beneficial ownership” is defined in the Rights Agreement and includes, among other things, certain derivative arrangements. The significant dilution caused by the exercise of the rights makes an unsolicited acquisition of the company prohibitively expensive without approval from our Board of Directors. In connection with the Rights Agreement, on July 22, 2026 our Board also designated a new series of participating preferred stock. In addition, the Amended and Restated Bylaws adopted on July 22, 2026, among other things, enhance our advance notice procedures and disclosure requirements for stockholder nominations and proposals. We are also subject to provisions of Delaware law that may have anti-takeover effects.
Current report
These provisions, alone or in combination, could make it more difficult, or discourage, a merger, tender offer, or assumption of control by a substantial holder of our securities, or for our stockholders to change the composition of our Board, even in a transaction that some or all of our stockholders might consider to be in their best interests or in which our stockholders might receive a premium over the then-current market price of our Class A Common Stock. As a result, these provisions could limit the price that investors are willing to pay in the future for shares of our Class A Common Stock and could adversely affect the market price of our common stock and the ability of our stockholders to realize a premium for their shares.
Current report
As a result, third parties may be deterred from pursuing a merger, tender offer, or takeover attempt that stockholders might otherwise deem to be in their best financial interest.
Current report
Our Board of Directors has the authority to issue “blank check” preferred stock, which could dilute the voting power and economic rights of holders of our Class A Common Stock and delay or prevent a change in control.
Current report
Our Certificate of Incorporation authorizes our Board of Directors to issue up to 1,000,000 shares of preferred stock in one or more series and to fix the rights, preferences, privileges, and restrictions thereof—including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences, and sinking fund terms—without any further vote or action by the holders of our Class A Common Stock.
Current report
The issuance of shares of preferred stock could adversely affect the holders of our Class A Common Stock in several ways, including:
Current report
As of the date of this filing, our Board of Directors has no immediate plans or commitments to issue any shares of preferred stock other than pursuant to the Rights Agreement. However, we cannot assure you that our Board of Directors will not issue preferred stock in the future.
Current report
While we strive to maintain constructive communications with our stockholders, we may, from time to time, be subject to demands from activist stockholders. Any activist campaign against the Company that contests, conflicts with, or seeks to change, our board composition, leadership, strategic direction, or business mix could have an adverse effect on us because: (i) responding to actions by activist stockholders could disrupt our operations, be costly or time-consuming, or divert the attention of our board of directors and senior management from their regular duties, including diverting their attention from the operation of our business and the execution of our strategic plans, which could adversely affect our results of operations or financial condition; (ii) perceived uncertainties as to our future direction, including as a result of possible changes to the composition of our board, may lead to the perception of a change in the direction of the business or lack of continuity, any of which may be exploited by our competitors, cause concern to our customers, employees, and/or business partners and result in the loss of potential business opportunities, or make it more difficult to attract and retain qualified personnel and business partners, and may adversely affect our relationships with vendors, customers, business partners, and other third parties; (iii) these types of actions could cause significant fluctuations in our share price based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business; and (iv) if individuals are elected to our board of directors with a specific agenda, it may adversely affect our ability to effectively implement our business strategy and create additional value for our stockholders.
Current report
The following table sets forth information regarding repurchases of the Company’s Class A Common Stock during the quarter ended June 30, 2026:
Current report
ISSUER PURCHASES OF EQUITY SECURITIES
Current report
On August 12, 2026, the Board approved a form of indemnification agreement (the “Indemnification Agreement”) to be entered into between the Company and our directors and executive officers for the purpose of providing our directors and executive officers with, among other things, contractual rights to indemnification and expense advancement and reimbursement, to the fullest extent permitted by applicable law.
Current report
The Indemnification Agreement clarifies and supplements the indemnification coverage provided in our Certificate of Incorporation and Amended and Restated Bylaws. Among other things, the Indemnification Agreement requires us to indemnify our directors and executive officers to the fullest extent permitted by applicable law against all direct and indirect losses, liabilities, damages, expenses, judgments, awards, penalties (whether civil, criminal, or other), fines, reasonable fees and expenses of attorneys, and amounts paid in settlement actually and reasonably incurred by any such person in connection with any threatened, asserted, pending, or completed action, suit, claim, counterclaim, cross-claim, investigation (including any internal investigation), inquiry, hearing, mediation, arbitration, other alternative dispute mechanism, or other proceeding, whether civil, criminal, administrative, regulatory, arbitrative, legislative, investigative, or otherwise, and whether formal or informal, and any appeal of any kind therefrom, arising out of their service to us or to any other entity to which they provide services at our request.
Current report
Subject to certain limited exceptions, the Indemnification Agreement also provides for the mandatory advancement of expenses (including attorneys’ fees) incurred by a director or executive officer in defending any such proceeding in advance of its final disposition, upon receipt of an undertaking by or on behalf of the indemnified party to repay such advanced amounts if it is ultimately determined by a final judicial decision from which there is no further right of appeal that such person is not entitled to indemnification by us for such amounts pursuant to the Indemnification Agreement or under applicable law.
Current report
The Indemnification Agreement also establishes procedures for applying for indemnification, determines the allocation of the burden of proof, sets forth presumption standards in favor of the indemnified party, and clarifies that our obligations under the Indemnification Agreement are primary to any rights of recovery an indemnified party may have from secondary sources.
Current report
The Indemnification Agreement provides that the indemnification rights provided thereunder are not exclusive of any other rights that an indemnified person may have under any statute, provision of our Certificate of Incorporation or Amended and Restated Bylaws, any agreement, or vote of stockholders or disinterested directors, or otherwise.
Current report
The foregoing description of the Indemnification Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the form of Indemnification Agreement, a copy of which is filed as Exhibit 10.7 to this Report and is incorporated herein by reference.
Current report
Also on August 12, 2026, the Board approved a new form of award agreements (the “RSU Agreement”) to be used for the grant of restricted stock units (“RSUs”) to directors and executive officers under our Amended and Restated 2021 Equity Incentive Plan (the “Plan”). The RSU Agreement was adopted in order to facilitate our grant of RSU awards with a variety of terms and vesting criteria as permitted by the Plan. The RSU Agreement provides that, notwithstanding any contrary provision of the RSU Agreement or the Plan, an employment agreement, a change of control agreement, or other written document, upon a termination of employment or service, all RSUs which have not vested prior to or in connection with such termination shall thereupon automatically be forfeited, terminated and cancelled as of the applicable termination date without payment of any consideration by us. The RSU Agreement additionally provides that any RSUs or Shares delivered in settlement thereof are subject to potential forfeiture or recovery to the fullest extent called for by applicable law, any applicable listing standard, or any current or future clawback policy that may be adopted by us. The foregoing description of the RSU Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the form of RSU Agreement, a copy of which is filed as Exhibit 10.8 to this Report and is incorporated herein by reference.
Removed paragraphs (3)
Previous report
We did not purchase any shares of our Class A common stock during the quarter ended March 31, 2026. On April 22, 2026, we repurchased 904,395 shares of Class A common stock at a price of $4.11 per share. Such repurchase was not part of a publicly announced repurchase plan or program. For further information, see the section titled “Recent Events” in Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations above.
Previous report
On May 12, 2026, Citibank extended the maturity date of the Citibank Promissory Note by one year to February 20, 2028. For further information on the Credit Agreement with Citibank and the Citibank Promissory Note, see the section titled “Liquidity and Capital Resources—Citibank Line of Credit” in Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations above.
Reworded paragraphs (5)
Previous wording
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected and corrected on a timely basis. In connection with the audit of our consolidated financial statements for the years ended December 31, 2025 and 2024, we identified certain material weaknesses in our internal control over financial reporting that continue to exist. The material weaknesses identified relate to (i) our failure to design and maintain effective monitoring procedures and controls to evaluate the effectiveness of our individual control activities; (ii) a lack of sufficient number of personnel with an appropriate level of accounting knowledge, training and experience to appropriately analyze, record and disclose accounting matters timely; and (iii) documentation of certain complex accounting analyses and significant accounting positions that were not contemporaneously reviewed independently of the preparer. Our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective as of March 31, 2026 because of the material weaknesses in our internal control over financial) as discussed in Part II, Item 9A, “Controls and Procedures” of the 2025 Form 10-K, and that continued to exist as of March 31, 2026
Current wording
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected and corrected on a timely basis. In connection with the audit of our consolidated financial statements for the years ended December 31, 2025 and 2024, we identified certain material weaknesses in our internal control over financial reporting that continue to exist. The material weaknesses identified relate to (i) our failure to design and maintain effective monitoring procedures and controls to evaluate the effectiveness of our individual control activities; (ii) a lack of sufficient number of personnel with an appropriate level of accounting knowledge, training and experience to appropriately analyze, record and disclose accounting matters timely; and (iii) documentation of certain complex accounting analyses and significant accounting positions that were not contemporaneously reviewed independently of the preparer. Our Chief Executive Officer, Chief Financial Officer and Chief Accounting and Compliance Officer have concluded that our disclosure controls and procedures were not effective as of June 30, 2026 because of the material weaknesses in our internal control over financial reporting as discussed in Part II, Item 9A, “Controls and Procedures” of the 2025 Form 10-K, and that continue to exist as of June 30, 2026.
Previous wording
We follow a franchise model and a significant portion of our revenues has historically been derived from products based on a relatively small number of popular franchises, including ourLe Mans Ultimate franchise, which now accounts for the majority of our revenue. For the three months ended March 31, 2026 and 2025, revenues associated with ourLe Mans Ultimatefranchise accounted for approximately 76% and 82% of our total revenue, respectively. For the three months ended March 31, 2026 and 2025, our top three customers accounted for 84% and 86% of our revenues, respectively. No other distribution channel accounted for 10% or more of our revenues in those periods. Our top four customers accounted for approximately 99% and 98% of our accounts receivable as of March 31, 2026 and December 31, 2025, respectively. No other distribution channel accounted for 10% or more of our accounts receivable in those periods. A reduction in sales from or loss of these distribution channels would have a material adverse effect on our results of operations and financial condition.
Current wording
We follow a franchise model and a significant portion of our revenues has historically been derived from products based on a relatively small number of popular franchises, including ourLe Mans Ultimate franchise, which now accounts for the majority of our revenue. For the three months ended June 30, 2026 and 2025, revenues associated with ourLe Mans Ultimatefranchise accounted for approximately 75% and 76% of our total revenue, respectively. For the three months ended June 30, 2026, our top three customers accounted for 83% of our revenues. For the three months ended June 30, 2025, our top two customers accounted for 81% of our revenues. For the six months ended June 30, 2026 and 2025, revenues associated with ourLe Mans Ultimatefranchise accounted for approximately 76% and 78% of our total revenue, respectively. For the six months ended June 30, 2026 our top three customers accounted for 83% of our revenues, and for the six months ended June 30, 2025 our top two customers accounted for 84% of our revenues. No other customer accounted for 10% or more of our revenues in those periods. Our top three customers accounted for approximately 88% of our accounts receivable as of June 30, 2026 and our top four customers accounted for approximately 98% of our accounts receivable as of December 31, 2025. No other customer accounted for 10% or more of our accounts receivable in those periods. A reduction in sales from or loss of these customers would have a material adverse effect on our results of operations and financial condition.
Previous wording
Due to this dependence on a limited number of franchises, the failure to achieve anticipated results by one or more products based on these franchises, or the loss of any franchise, especially our two main distributors, could negatively impact our business. Additionally, if the popularity of a franchise declines, we may have to write off the unrecovered portion of the underlying intellectual property assets, which could negatively impact our business. In the future, we expect this trend to continue with a relatively limited number of franchises producing a disproportionately high percentage of our revenues and profits.
Current wording
Due to this dependence on a limited number of franchises, the failure to achieve anticipated results by one or more products based on these franchises, or the loss of any franchise, especially our main customers, could negatively impact our business. Additionally, if the popularity of a franchise declines, we may have to write off the unrecovered portion of the underlying intellectual property assets, which could negatively impact our business. In the future, we expect this trend to continue with a relatively limited number of franchises producing a disproportionately high percentage of our revenues and profits.
Previous wording
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 and limit the market price of our Class A common stock.
Current wording
Certain provisions in our Certificate of Incorporation, our Amended and Restated Bylaws and Delaware law could limit attempts by our stockholders to replace or remove our board of directors or current management and limit the market price of our Class A common stock.
Previous wording
Provisions in our certificate of incorporation and bylaws may have the effect of delaying or preventing changes in our board of directors or management including, but not limited to:
Current wording
Provisions in our Certificate of Incorporation and Amended and Restated Bylaws may have the effect of delaying or preventing changes in our board of directors or management including, but not limited to: