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Motorsport Games Inc. (MSGM-2.68%) has submitted its 10-Q filing for the quarterly period ended September 30, 2024.
The filing includes financial statements for the quarter, showing an increase in revenues to $1,802,946 from $1,693,871 in the same quarter the previous year. This increase is attributed to higher digital game sales from the release of Le Mans Ultimate.
Cost of revenues for the quarter was $716,723, representing 40% of sales, compared to 49% in the same quarter of the previous year. This decrease in cost ratio is due to reduced royalty payments.
The company reported a gross profit of $1,086,223 for the quarter, compared to $862,392 in the previous year, with the increase attributed to higher gaming revenues.
Operating expenses decreased to $3,018,108 from $3,527,187, primarily due to reductions in sales and marketing and development expenses.
Net loss for the quarter was $573,025, compared to $3,534,132 in the previous year, reflecting improved operating results and foreign currency gains.
Cash used in operating activities was $697,479, while cash used in investing activities was $25,145.
Motorsport Games had a working capital deficiency of $2,413,591 as of September 30, 2024. The company is exploring additional funding options to address its liquidity shortfall.
The filing also details the sale of the NASCAR License and the termination of the INDYCAR and BTCC licenses, impacting the company's long-term product release schedule.
The company continues to focus on cost reduction and restructuring initiatives to improve its financial position and liquidity.
Motorsport Games identified material weaknesses in its internal controls over financial reporting and is working on remediation efforts.
This content was summarized by generative artificial intelligence using public filings retrieved from SEC.gov. The original data was derived from the Motorsport Games Inc. quarterly 10-Q report dated November 14, 2024. To report an error, please email earnings@qz.com.