Motorsport Games (MSGM) 10-Q 18 Nov 22 2022 Q3 Quarterly report Financial data

Cover

Cover - shares	9 Months Ended
	Sep. 30, 2022	Nov. 18, 2022
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2022
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2022
Current Fiscal Year End Date	--12-31
Entity File Number	001-39868
Entity Registrant Name	Motorsport Games Inc.
Entity Central Index Key	0001821175
Entity Tax Identification Number	86-1791356
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	5972 NE 4th Avenue
Entity Address, City or Town	Miami
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33137
City Area Code	(305)
Local Phone Number	507-8799
Title of 12(b) Security	Class A common stock, $0.0001 par value
Trading Symbol	MSGM
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false
Entity Shell Company	false
Entity Information, Former Legal or Registered Name	Not Applicable
Common Class A [Member]
Entity Common Stock, Shares Outstanding		1,167,359
Common Class B [Member]
Entity Common Stock, Shares Outstanding		700,000

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 3,217,342	$ 17,819,640
Accounts receivable, net of allowances of $3,596,634 and $4,563,884 at September 30, 2022 and December 31, 2021, respectively	595,292	5,490,272
Due from related parties	116,270	137,574
Prepaid expenses and other current assets	2,257,708	1,175,354
Total Current Assets	6,186,612	24,622,840
Property and equipment, net	670,795	727,089
Operating lease right of use assets	469,640
Goodwill		4,867,465
Intangible assets, net	13,428,305	20,485,809
Total Assets	20,755,352	50,703,203
Current liabilities:
Accounts payable	1,013,442	1,784,645
Accrued expenses and other liabilities	3,548,934	3,524,271
Due to related parties	3,122,571	119,015
Purchase commitments	2,508,220	3,170,319
Operating lease liabilities (current)	196,077
Total Current Liabilities	10,389,244	8,598,250
Operating lease liabilities (non-current)	269,154
Other non-current liabilities	3,148,097	4,122,950
Total Liabilities	13,806,495	12,721,200
Commitments and contingencies (Note 11)
Stockholders’ Equity:
Preferred stock, $0.0001 par value per share; authorized 1,000,000 shares; none issued and outstanding as of September 30, 2022 and December 31, 2021, respectively
Additional paid-in capital	76,473,168	75,652,853
Accumulated deficit	(69,046,523)	(37,988,326)
Accumulated other comprehensive loss	(709,414)	(945,375)
Total Stockholders’ Equity Attributable to Motorsport Games Inc.	6,717,417	36,719,338
Non-controlling interest	231,440	1,262,665
Total Stockholders’ Equity	6,948,857	37,982,003
Total Liabilities and Stockholders’ Equity	20,755,352	50,703,203
Common Class A [Member]
Stockholders’ Equity:
Common stock value	116	116
Common Class B [Member]
Stockholders’ Equity:
Common stock value	$ 70	$ 70

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Allowances for doubtful accounts receivable	$ 3,596,634	$ 4,563,884
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock shares issued	0	0
Preferred stock shares outstanding	0	0
Common Class A [Member]
Common Stock, Par or Stated Value Per Share	$ 0.0001	$ 0.0001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares outstanding	1,167,359	1,163,590
Common stock, shares issued	1,167,359	1,163,590
Common Class B [Member]
Common Stock, Par or Stated Value Per Share	$ 0.0001	$ 0.0001
Common stock, shares authorized	7,000,000	7,000,000
Common stock, shares outstanding	700,000	700,000
Common stock, shares issued	700,000	700,000

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)		3 Months Ended		9 Months Ended
		Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Statement [Abstract]
Revenues		$ 1,223,142	$ 2,138,466	$ 6,553,918	$ 6,851,525
Cost of revenues	[1]	602,856	949,139	3,472,819	2,637,250
Gross profit		620,286	1,189,327	3,081,099	4,214,275
Operating expenses:
Sales and marketing	[2]	1,440,659	1,348,773	4,669,328	3,077,213
Development	[3]	2,631,066	3,015,233	7,717,046	6,083,773
General and administrative	[4]	4,008,335	3,130,944	10,781,098	22,612,162
Impairment of goodwill				4,788,268
Impairment of intangible assets				4,640,102
Depreciation and amortization		92,703	81,874	326,499	179,097
Total operating expenses		8,172,763	7,576,824	32,922,341	31,952,245
Loss from operations		(7,552,477)	(6,387,497)	(29,841,242)	(27,737,970)
Interest expense	[5]	(244,953)	(160,310)	(638,211)	(311,748)
Gain attributable to equity method investment					1,370,837
Other expense, net		(739,285)	(110,822)	(1,511,978)	(26,115)
Net loss		(8,536,715)	(6,658,629)	(31,991,431)	(26,704,996)
Less: Net loss attributable to non-controlling interest		(21,431)	(99,114)	(933,234)	(553,413)
Net loss attributable to Motorsport Games Inc.		$ (8,515,284)	$ (6,559,515)	$ (31,058,197)	$ (26,151,583)
Net loss attributable to Class A common stock per share:
Basic and diluted		$ (7.29)	$ (5.64)	$ (26.61)	$ (23.17)
Weighted-average shares of Class A common stock outstanding:
Basic and diluted		1,167,359	1,163,590	1,167,178	1,128,576
[1]Includes related party costs of $ 0 0 6,228 0 0 71,865 0 71,865 21,512 3,132 44,942 14,591 122,714 22,853 221,051 1,593,371 0 0 0 105,845

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Related party costs	$ 0	$ 0	$ 6,228	$ 0
Sales And Marketing [Member]
Related party expenses	0	71,865	0	71,865
Development [Member]
Related party expenses	21,512	3,132	44,942	14,591
General and Administrative Expense [Member]
Related party expenses	122,714	22,853	221,051	1,593,371
Interest Expense [Member]
Related party expenses	$ 0	$ 0	$ 0	$ 105,845

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Statement [Abstract]
Net loss	$ (8,536,715)	$ (6,658,629)	$ (31,991,431)	$ (26,704,996)
Other comprehensive income (loss):
Foreign currency translation adjustments	224,230	(537,581)	235,961	(641,304)
Comprehensive loss	(8,312,485)	(7,196,210)	(31,755,470)	(27,346,300)
Comprehensive loss attributable to non-controlling interests	(2,280)	(99,114)	(1,031,225)	(553,413)
Comprehensive loss attributable to Motorsport Games Inc.	$ (8,310,205)	$ (7,097,096)	$ (30,724,245)	$ (26,792,887)

Condensed Consolidated Statem_4

Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)	Common Stock [Member] Common Class A [Member]	Common Stock [Member] Common Class B [Member]	Members Equity [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Parent [Member]	Noncontrolling Interest [Member]	Total
Beginning balance, value at Dec. 31, 2020			$ 3,791,674		$ (4,826,335)	$ 4,928	$ (1,029,733)	$ 2,645,559	$ 1,615,826
Beginning balance, shares at Dec. 31, 2020
Stock-based compensation	$ 3			9,076,913			9,076,916		9,076,916
Stock-based compensation, shares	33,063
Other comprehensive loss						(32,914)	(32,914)		(32,914)
Net loss					(13,811,974)		(13,811,974)	(273,450)	(14,085,424)
Conversion of membership interests into shares of common stock	$ 70	$ 70	(3,791,674)	3,791,534
Conversion of membership interests into shares of common stock, shares	700,000	700,000
Issuance of common stock in initial public offering, net [1]	$ 34			63,074,094			63,074,128		63,074,128
Issuance of common stock in initial public offering, net, shares	345,000
Purchase of additional interest in Le Mans Esports Series Ltd.								1,584,892	1,584,892
Ending balance, value at Mar. 31, 2021	$ 107	$ 70		75,942,541	(18,638,309)	(27,986)	57,276,423	3,957,001	61,233,424
Ending balance, shares at Mar. 31, 2021	1,078,063	700,000
Beginning balance, value at Dec. 31, 2020			3,791,674		(4,826,335)	4,928	(1,029,733)	2,645,559	1,615,826
Beginning balance, shares at Dec. 31, 2020
Net loss									(26,704,996)
Ending balance, value at Sep. 30, 2021	$ 116	$ 70		75,411,554	(30,977,918)	(636,376)	43,797,446	1,252,006	45,049,452
Ending balance, shares at Sep. 30, 2021	1,163,590	700,000
Beginning balance, value at Mar. 31, 2021	$ 107	$ 70		75,942,541	(18,638,309)	(27,986)	57,276,423	3,957,001	61,233,424
Beginning balance, shares at Mar. 31, 2021	1,078,063	700,000
Stock-based compensation				116,274			116,274		116,274
Other comprehensive loss						(70,809)	(70,809)		(70,809)
Net loss					(5,780,094)		(5,780,094)	(180,849)	(5,960,943)
Issuance of common stock to 704Games former minority shareholders	$ 9						9		9
Issuance of common stock to Gaming Nation and Playfast, shares	85,527
Purchase of 704Games minority interest				(939,434)			(939,434)	(2,659,786)	(3,599,220)
ACO Investment in Le Mans Esports Series Ltd.								234,754	234,754
Ending balance, value at Jun. 30, 2021	$ 116	$ 70		75,119,381	(24,418,403)	(98,795)	50,602,369	1,351,120	51,953,489
Ending balance, shares at Jun. 30, 2021	1,163,590	700,000
Stock-based compensation				292,173			292,173		292,173
Other comprehensive loss						(537,581)	(537,581)		(537,581)
Net loss					(6,559,515)		(6,559,515)	(99,114)	(6,658,629)
Ending balance, value at Sep. 30, 2021	$ 116	$ 70		75,411,554	(30,977,918)	(636,376)	43,797,446	1,252,006	45,049,452
Ending balance, shares at Sep. 30, 2021	1,163,590	700,000
Beginning balance, value at Dec. 31, 2021	$ 116	$ 70		75,652,853	(37,988,326)	(945,375)	36,719,338	1,262,665	37,982,003
Beginning balance, shares at Dec. 31, 2021	1,163,590	700,000
Stock-based compensation				353,030			353,030		353,030
Stock-based compensation, shares	3,769
Other comprehensive loss						(125,245)	(125,245)	(59,293)	(184,538)
Net loss					(15,137,617)		(15,137,617)	(829,428)	(15,967,045)
Ending balance, value at Mar. 31, 2022	$ 116	$ 70		76,005,883	(53,125,943)	(1,070,620)	21,809,506	373,944	22,183,450
Ending balance, shares at Mar. 31, 2022	1,167,359	700,000
Beginning balance, value at Dec. 31, 2021	$ 116	$ 70		75,652,853	(37,988,326)	(945,375)	36,719,338	1,262,665	37,982,003
Beginning balance, shares at Dec. 31, 2021	1,163,590	700,000
Net loss									(31,991,431)
Ending balance, value at Sep. 30, 2022	$ 116	$ 70		76,473,168	(69,046,523)	(709,414)	6,717,417	231,440	6,948,857
Ending balance, shares at Sep. 30, 2022	1,167,359	700,000
Beginning balance, value at Mar. 31, 2022	$ 116	$ 70		76,005,883	(53,125,943)	(1,070,620)	21,809,506	373,944	22,183,450
Beginning balance, shares at Mar. 31, 2022	1,167,359	700,000
Stock-based compensation				238,573			238,573		238,573
Other comprehensive loss						136,976	136,976	(57,849)	79,127
Net loss					(7,405,296)		(7,405,296)	(82,375)	(7,487,671)
Ending balance, value at Jun. 30, 2022	$ 116	$ 70		76,244,456	(60,531,239)	(933,644)	14,779,759	233,720	15,013,479
Ending balance, shares at Jun. 30, 2022	1,167,359	700,000
Stock-based compensation				228,712			228,712		228,712
Other comprehensive loss						224,230	224,230	19,151	243,381
Net loss					(8,515,284)		(8,515,284)	(21,431)	(8,536,715)
Ending balance, value at Sep. 30, 2022	$ 116	$ 70		$ 76,473,168	$ (69,046,523)	$ (709,414)	$ 6,717,417	$ 231,440	$ 6,948,857
Ending balance, shares at Sep. 30, 2022	1,167,359	700,000

Condensed Consolidated Statem_5

Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (Parenthetical)	9 Months Ended
	Sep. 30, 2022 USD ($)
Common Stock [Member]
Proceeds from issuance initial public offering	$ 69,000,000
Payment for offering cost	$ 5,925,872

Condensed Consolidated Statem_6

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Cash flows from operating activities:
Net loss	$ (31,991,431)	$ (26,704,996)
Adjustments to reconcile net loss to net cash used in operating activities:
Loss on impairment of intangible assets	4,640,102
Loss on impairment of goodwill	4,788,268
Depreciation and amortization	1,576,003	1,217,234
Purchase commitment and license liability interest accretion	620,541	188,220
Non-cash lease expense	321,882
Stock-based compensation	820,315	9,485,363
Gain on equity method investment		(1,370,837)
Sales return and price protection reserves	1,098,397	257,060
Changes in assets and liabilities, net of acquisitions and the effect of consolidation of equity affiliates:
Accounts receivable	3,709,280	2,914,584
Operating lease liabilities	(327,337)
Prepaid expenses and other assets	(1,141,174)	(2,277,279)
Other assets		25,000
Accounts payable	(728,322)	(338,895)
Other non-current liabilities		443,700
Accrued expenses and other liabilities	(310,622)	(562,253)
Net cash used in operating activities	(16,924,098)	(16,723,099)
Cash flows from investing activities:
Acquisition of Le Mans, net of cash acquired		153,250
Acquisition of KartKraft		(1,000,000)
Acquisition of Studio 397		(12,785,463)
Purchase of property and equipment	(266,948)	(665,190)
Net cash used in investing activities	(266,948)	(14,297,403)
Cash flows from financing activities:
Advances from related parties	3,012,885	2,073,312
Repayments on advances from related parties	(119,002)	(12,935,519)
Repayments of purchase commitment liabilities	(1,530,000)
Purchase of non-controlling interest		(3,599,211)
Contributed capital from non-controlling shareholders		234,754
Payment of license liabilities	(275,000)	(227,928)
Issuance of common stock in initial public offering, net		63,661,128
Net cash provided by financing activities	1,088,883	49,206,536
Effect of exchange rate changes on cash and cash equivalents	1,499,865	(13,873)
Net (decrease) increase in cash and cash equivalents	(14,602,298)	18,172,161
Total cash and cash equivalents at beginning of the period	17,819,640	3,990,532
Total cash and cash equivalents at the end of the period	3,217,342	22,162,693
Cash paid during the year for:
Interest	17,670	804,674
Non-cash investing and financing activities:
Shares issued to 704Games former minority shareholders		86
Purchase commitment liability		3,148,240
Reduction of additional paid-in capital for purchased 704Games minority shares		939,511
Reduction of additional paid-in capital for initial public offering issuance costs that were previously paid		587,000
Purchase of additional interest in Le Mans Esports Series Ltd.		$ 1,584,892

BUSINESS ORGANIZATION, NATURE O

BUSINESS ORGANIZATION, NATURE OF OPERATIONS, RISKS AND UNCERTAINTIES AND BASIS OF PRESENTATION	9 Months Ended
	Sep. 30, 2022
Accounting Policies [Abstract]
BUSINESS ORGANIZATION, NATURE OF OPERATIONS, RISKS AND UNCERTAINTIES AND BASIS OF PRESENTATION	NOTE 1 - BUSINESS ORGANIZATION, NATURE OF OPERATIONS, RISKS AND UNCERTAINTIES AND BASIS OF PRESENTATION Organization and Operations Motorsport Gaming US LLC (“Motorsport Gaming”) was established as a limited liability company on August 2, 2018 under the laws of the State of Florida. On January 8, 2021, Motorsport Gaming converted into a Delaware corporation pursuant to a statutory conversion and changed its name to Motorsport Games Inc. (“Motorsport Games” or the “Company”). Upon effecting the corporate conversion on January 8, 2021, Motorsport Games now holds all the property and assets of Motorsport Gaming, and all of the debts and obligations of Motorsport Gaming were assumed by Motorsport Games by operation of law upon such corporate conversion. Risks and Uncertainties COVID-19 Pandemic The lingering impact of COVID-19 has continued to create significant volatility throughout the global economy, such as supply chain disruptions, limited labor supplies, higher inflation, and recession, which in turn has caused constraints on consumer spending. More recently, new variants of COVID-19, such as the Omicron variant and its subvariants, that are significantly more contagious than previous strains, have emerged. Further, the effectiveness of approved vaccines on these new strains remains uncertain. The spread of these new strains initially caused many government authorities and businesses to reimplement prior restrictions in an effort to lessen the spread of COVID-19 and its variants. However, while many of these restrictions have been lifted, uncertainty remains as to whether additional restrictions may be initiated or again reimplemented in response to surges in COVID-19 cases. Although the Company does not currently expect the COVID-19 pandemic to have a material impact on its future business and operations, the Company continues to monitor the evolving situation caused by the COVID-19 pandemic, and the Company may take further actions required by governmental authorities or that the Company determines are prudent to support the well-being of the Company’s employees, suppliers, business partners and others. The degree to which the ongoing and prolonged COVID-19 pandemic impacts the Company’s operations, business, financial results, liquidity, and financial condition will depend on future developments, which are highly uncertain, continuously evolving and cannot be predicted. This includes, but is not limited to, the duration and spread of the pandemic; its severity; the emergence and severity of its variants; the actions to contain the virus or treat its impact, such as the availability and efficacy of vaccines (particularly with respect to emerging strains of the virus) and potential hesitancy to utilize them; the effect on discretionary spending by consumers; and how quickly and to what extent normal economic and operating conditions can resume. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In management’s opinion, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the Company’s unaudited condensed consolidated financial statements as of September 30, 2022 and for the three and nine months ended September 30, 2022. The Company’s results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the operating results for the full year ending December 31, 2022 or any other period. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related disclosures as of December 31, 2021 and 2020 and for the years then ended which are included in the 2021 Form 10-K. Effective on November 10, 2022, the Company amended its certificate of incorporation to effectuate a reverse split of the issued and outstanding shares of Class A common stock and Class B common stock at a ratio of 1-for-10. Fractional shares of common stock resulting from the reverse stock split were settled in cash. All shares of common stock, stock options, restricted stock awards, and per share information presented in the condensed consolidated financial statements have been adjusted to reflect the reverse stock split on a retroactive basis for all periods presented. Motorsport Games Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements Liquidity and Going Concern On January 15, 2021, the Company completed its initial public offering which resulted in net proceeds to the Company of approximately $ 63.1 For the nine months ended September 30, 2022, the Company had a net loss of approximately $ 32 million, negative cash flows from operations of approximately $ 16.9 million and an accumulated deficit of $ 69 million. It is expected that the Company will continue to incur operating expenses and, as a result, the Company will need to grow revenues to reach profitability and positive cash flows. We expect to continue to incur losses for the foreseeable future as we continue to develop our product portfolio and invest in developing new video game titles. In accordance with Accounting Standards Codification (“ASC”) 205-40, Going Concern Our future liquidity and capital requirements include funds to support the planned costs to operate our business, including amounts required to fund working capital, support the development and introduction of new products, maintain existing titles, and certain capital expenditures. The adequacy of our available funds generally depends on many factors, including our ability to successfully develop consumer-preferred new products or enhancements to our existing products, continued development and expansion of our esports platform and our ability to enter into collaborations with other companies and/or acquire other companies or technologies to enhance or complement our product and service offerings. The Company continues to explore additional funding in the form of potential equity and/or debt financing arrangements or similar transactions and consider these to be viable options to support future liquidity needs, provided that such opportunities can be obtained on terms that are commercially competitive and on terms acceptable to the Company. The Company is also seeking to improve its liquidity by achieving cost reductions by maintaining and enhancing cost control initiatives, such as those that it expects to achieve through its previously announced organizational restructuring (the “2022 Restructuring Program”). As the Company continues to evaluate incremental funding solutions, it has reevaluated its product roadmap in the first quarter of 2022 and modified the expected timing and scope of certain new product releases. These changes have been made not only to maintain the development of high-quality video game titles, but also to improve the timing of certain working capital requirements and reduce expenditures, thereby decreasing our expected future cash-burn and improve our short-term liquidity needs. If needed, further adjustments could be made that would decrease short-term working capital requirements, while pushing out the timing of expected revenues. The Company expects to generate additional liquidity through consummating one or more potential equity and/or debt financings or similar transactions, achieving cost reductions by maintaining and enhancing cost control initiatives, such as those that it expects to achieve through the 2022 Restructuring Program, and/or further adjusting its product roadmap to reduce near term need for working capital. If the Company is unable to generate adequate revenue and profit growth, there can be no assurances that such actions will provide the Company with sufficient liquidity to meet its cash requirements as, among other things, its liquidity position can be impacted by a number of factors, including the level of sales, costs and expenditures, economic conditions in the capital markets, especially for technology companies, as well as accounts receivable and sales allowances. There can be no assurance that the Company will be able to obtain funds on commercially acceptable terms, if at all, to satisfy its future needed liquidity and capital resources. If the Company is unable to obtain adequate funds on acceptable terms, it may be required to, among other things, significantly curtail or discontinue operations or obtain funds by entering into financing agreements on unattractive terms. If the Company is unable to satisfy its cash requirements from the sources identified above, it could be required to adopt one or more of the following alternatives: ● selling assets or operations; ● seeking additional capital contributions and/or loans from Motorsport Network, the Company’s other affiliates and/or third parties; and/or ● reducing other discretionary spending. Motorsport Games Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements There can be no assurance that the Company would be able to take any of the actions referred to above because of a variety of commercial or market factors, including, without limitation, market conditions being unfavorable for an equity or debt issuance or similar transactions, additional capital contributions and/or loans not being available from Motorsport Network or affiliates and/or third parties, or that the transactions may not be permitted under the terms of the Company’s various debt instruments then in effect, such as due to restrictions on the incurrence of debt, incurrence of liens, asset dispositions and related party transactions. In addition, such actions, if taken, may not enable the Company to satisfy its cash requirements if the actions that the Company is able to consummate do not generate a sufficient amount of additional capital. Even if the Company does secure additional financing, if the anticipated level of revenues are not achieved because of, for example, less than anticipated consumer acceptance of the Company’s offering of products and events; less than effective marketing and promotion campaigns, decreased consumer spending in response to weak economic conditions or weakness in the overall electronic games category; adverse changes in foreign currency exchange rates; decreased sales of the Company’s products and events as a result of increased competitive activities by the Company’s competitors; changes in consumer purchasing habits, such as the impact of higher energy prices on consumer purchasing behavior; retailer inventory management or reductions in retailer display space; less than anticipated results from the Company’s existing or new products or from its advertising and/or marketing plans; or if the Company’s expenses, including, without limitation, for marketing, advertising and promotions, product returns or price protection expenditures, exceed the anticipated level of expenses, the Company’s liquidity position may continue to be insufficient to satisfy its future capital requirements. The factors described above, in particular the available cash on hand to fund operations over the next year, have raised substantial doubt about the Company’s ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Accordingly, the condensed consolidated financial statements have been prepared on a basis that assumes the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business. However, substantial doubt about the Company’s ability to continue as a going concern exists. Out-of-Period Adjustment During the three months ended September 30, 2022, the Company recorded an out-of-period adjustment of approximately $0.3 million in revenues in our condensed consolidated statements of operations. The adjustment, which reduced revenues and accounts receivable, was made to correct an overstatement of revenue as reported in our Form 10-Q for the period ended June 30, 2022. The Company determined the adjustment did not have a material impact to our current or prior period condensed consolidated financial statements. In addition, the correction did not have any impact on the cumulative year to date position in either the statement of operations, balance sheet, or statement of cash flow for the nine months ended September 30, 2022. Recently Issued Accounting Standards As an emerging growth company (“EGC”), the Jumpstart Our Business Startups Act (“JOBS Act”) allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are applicable to private companies. The Company has elected to use this extended transition period under the JOBS Act until such time as the Company is no longer considered to be an EGC. The adoption dates discussed below reflect this election. In November 2019, the Financial Accounting Standards Board issued Accounting Standard Update (“ASU”) 2019-11, “ Codification Improvements to Topic 326, Financial Instruments – Credit Losses Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Adoption of Accounting Pronouncements On January 1, 2022, the Company adopted ASU 2016-02, Leases (Topic 842) Motorsport Games Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements For leases with a term greater than 12 months, the new guidance requires the lease rights and obligations arising from the leasing arrangements, including operating leases, to be recognized as assets and liabilities on the balance sheet. Upon adoption of ASC 842, the Company recognized approximately $ 751,000 The adoption of ASC 842 did not have a material impact on the Company’s condensed consolidated statements of operations and comprehensive loss or condensed consolidated statements of cash flows. On January 1, 2022, the Company adopted ASU 2020-01, Investments—Equity Securities (“Topic 321”), Investments—Equity Method and Joint Ventures (“Topic 323”), and Derivatives and Hedging (“Topic 815”)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the Emerging Issues Task Force) On January 1, 2022, the Company adopted ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
	Sep. 30, 2022
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES There have been no material changes to the significant accounting policies included in the audited consolidated financial statements included in the 2021 Form 10-K, except as disclosed in this note. Revenue Recognition The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers ● Identification of a contract with a customer; ● Identification of the performance obligations in the contract; ● Determination of the transaction price; ● Allocation of the transaction price to the performance obligations in the contract; and ● Recognition of revenue when or as the performance obligations are satisfied. The Company currently derives revenue principally from sales of its games and related extra content that can be played by customers on a variety of platforms, which include game consoles, PCs, mobile phones and tablets. The Company’s product and service offerings include the following: 1) Sales of Games 2) Sales of Extra Content 3) Esports Competition Events Motorsport Games Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements Sales of Games. Sales of Extra Content. Esports. The timing of the Company’s revenue recognition may differ from the timing of payment by its customers. A receivable is recorded when revenue is recognized prior to payment and the Company has an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, the Company records deferred revenue until the Company’s performance obligations are satisfied. Identifying Performance Obligations Performance obligations promised in a contract are identified based on the goods and services that will be transferred to the customer that are both capable of being distinct (i.e., the customer can benefit from the goods or services either on its own or together with other resources that are readily available), and are distinct in the context of the contract (i.e., it is separately identifiable from other goods or services in the contract). To the extent a contract includes multiple promises, the Company must apply judgment to determine whether those promises are separate and distinct performance obligations. If these criteria are not met, the promises are accounted for as a combined performance obligation. Determining the Transaction Price The transaction price is determined based on the consideration that the Company will be entitled to receive in exchange for transferring its goods and services to the customer. Determining the transaction price often requires significant judgment based on an assessment of contractual terms and business practices. It further includes reviewing variable consideration such as discounts, sales returns, price protection, and rebates, which is estimated at the time of the transaction. See below for additional information regarding the Company’s sales returns and price protection reserves. Allocating the Transaction Price Allocating the transaction price requires the Company to determine an estimate of the relative stand-alone selling price for each distinct performance obligation. Motorsport Games Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements Principal Versus Agent Considerations The Company evaluates sales to end customers of its full games and related content via third-party storefronts, including digital storefronts such as Microsoft’s Xbox Store, Sony’s PlayStation Store, Nintendo’s eShop, Apple’s App Store, and Google’s Play Store, to determine whether the Company is acting as the principal or agent in the sale to the end customer. Key indicators that the Company evaluates in determining gross versus net treatment include but are not limited to the following: ● the underlying contract terms and conditions between the various parties to the transaction; ● which party is primarily responsible for fulfilling the promise to provide the specified good or service to the end customer; ● which party has inventory risk before the specified good or service has been transferred to the end customer; and ● which party has discretion in establishing the price for the specified good or service. Based on an evaluation of the above indicators, the Company determined that, apart from contracts with customers where revenue is generated via the Apple’s App Store or Google’s Play Store, the third party is considered the principal with the end customer and, as a result, the Company reports revenue net of the fees retained by the storefront. For contracts with customers where revenues are generated via the Apple’s App Store or Google’s Play Store, the Company has determined that it is the principal and, as a result, reports revenues on a gross basis, with mobile platform fees included within cost of revenues. Sales Returns and Price Protection Reserves Sales returns and price protection are considered variable consideration under ASC 606. The Company reduces revenue for estimated future returns and price protection which may occur with distributors and retailers (“channel partners”). See Note 2 – Summary of Significant Accounting Policies – Accounts Receivable 0 1.1 0.06 0.3 Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC 718 – Compensation – Stock Compensation. The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award. The fair value of the award is measured on the grant date, using the Black-Scholes option pricing model. The fair value amount is then recognized over the period during which services are required to be provided in exchange for the award, usually the vesting period. Upon the exercise of an award, the Company issues new shares of common stock out of its authorized shares. Stock-based compensation is adjusted for any forfeitures, which are accounted for on an as occurred basis. Net Loss Per Common Share Basic net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of common and dilutive common-equivalent shares outstanding during each period. Dilutive common-equivalent shares consist of shares of options, if not anti-dilutive. Motorsport Games Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements The following shares were excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive: SCHEDULE OF CALCULATION WEIGHTED AVERAGE DILUTIVE COMMON SHARES For the Three and Nine Months Ended September 30, 2022 2021 Stock options 57,405 57,742 57,405 57,742 Income Taxes On January 8, 2021, Motorsport Gaming, a Florida limited liability company, converted into Motorsport Games, a Delaware corporation, pursuant to a statutory conversion. The Company is subject to federal and state income taxes in the U.S. The Company files income tax returns in the jurisdictions in which nexus threshold requirements are met. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of items that have been included or excluded in the financial statements or tax returns. Deferred tax assets and liabilities are determined on the basis of the difference between the tax basis of assets and liabilities and their respective financial reporting amounts (“temporary differences”) at enacted tax rates in effect for the years in which the temporary differences are expected to reverse. ASC 740, Taxes The Company utilizes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company’s policy is to classify assessments, if any, for tax-related interest as interest expense and penalties as general and administrative expenses in its condensed consolidated statements of operations.

INTANGIBLE ASSETS

INTANGIBLE ASSETS	9 Months Ended
	Sep. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
INTANGIBLE ASSETS	NOTE 3 – INTANGIBLE ASSETS Licensing Agreements The Company has license agreements with various entities related to the development of video games and the organization and facilitation of esports events, including BARC (TOCA) Limited (“BARC”) with respect to the British Touring Car Championship (the “BTCC”) and INDYCAR LLC (“INDYCAR”) with respect to the INDYCAR SERIES. As of September 30, 2022, the Company had a remaining liability in connection with these licensing agreements of approximately $ 0.9 3.0 Impairment The Company identified triggering events as of March 31, 2022 and as of June 30, 2022 that indicated its allocated intangible and finite-lived intangible assets were at risk of impairment and as such, performed quantitative impairment assessments of all its intangible and finite-lived intangible assets. No further indicators of impairment were identified as of September 30, 2022. The primary triggers for the impairment review for the period ended March 31, 2022 were changes made to the Company’s product roadmap during the three months ended March 31, 2022, which resulted in changes to the scope and timing of certain product releases, as well as changes in the value of the Company’s market capitalization which had reduced significantly since December 31, 2021, the date of the last impairment assessment. The Company made these changes to better align its product roadmap with the Company’s ability to produce and release high quality games. The primary triggers for the impairment review for the six-month period ended June 30, 2022 were the ongoing reduction in the Company’s share price, the receipt of a deficiency letter notice from NASDAQ and the Company’s ongoing uncertain liquidity position. Motorsport Games Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements As a result of the interim impairment assessments, the Company determined the fair value of its rFactor 2 trade name and Le Mans video gaming license (the “Le Mans Gaming License”) indefinite-lived intangible assets, as well as its rFactor 2 finite-lived technology, were lower than their respective carrying values. The Company has recorded impairment losses relating to these intangible assets of approximately $ 4.6 2.2 1.1 1.3 The Company determined the fair value of the indefinite-lived intangible assets using a relief-from-royalty method for the trade name, a discounted cash flow valuation model for the Le Mans Gaming License and a cost to recreate valuation model for the finite-lived technology intangible asset. The impairment loss for indefinite- and finite-lived intangible assets was primarily driven by a reduction in expected future revenues, following changes to the Company’s product roadmap, as well as changes to the discount rates applied, royalty rates and technological obsolescence assumptions used in the valuation models. The principal assumptions used in the relief-from-royalty method analysis used to determine the fair value of the rFactor 2 trade name consisted of forecasted revenues, royalty rate and weighted average cost of capital (i.e., the discount rate), while the principal assumptions used in the discounted cash flow valuation model for the Le Mans Gaming License were forecasted revenues and weighted average cost of capital. The principal assumptions used in determining the fair value of the finite-lived technology intangible asset were number of production hours, cost per hour and technological obsolescence. The Company considers these assumptions to be judgmental and subject to risk and uncertainty, which could result in further changes in subsequent periods. The impairment loss is presented as impairment of intangible assets in the condensed consolidated statements of operations. The following is a summary of intangible assets as of September 30, 2022: SCHEDULE OF INTANGIBLE ASSETS Licensing Agreements (Finite) Licensing Agreements (Indefinite) Software Licenses (Finite) Distribution Contracts (Finite) Trade Names (Indefinite) Non-Compete Agreements (Finite) Accumulated Amortization Total Balance as of December 31, 2021 $ 7,198,363 $ 2,810,000 $ 10,364,541 $ 560,000 $ 2,672,581 $ 257,530 $ (3,377,206 ) $ 20,485,809 Amortization expense - - - - - - (1,306,997 ) (1,306,997 ) Impairment of intangible assets - (1,118,209 ) (1,320,993 ) - (2,200,900 ) - - (4,640,102 ) FX translation adjustments - (275,948 ) (872,874 ) - (124,258 ) (33,120 ) 195,795 (1,110,405 ) Balance as of September 30, 2022 $ 7,198,363 $ 1,415,843 $ 8,170,674 $ 560,000 $ 347,423 $ 224,410 $ (4,488,408 ) 13,428,305 Weighted average remaining amortization period at September 30, 2022 - - 4.6 5.4 - 4.5 - - Accumulated amortization of intangible assets consists of the following: SCHEDULE OF ACCUMULATED AMORTIZATION OF INTANGIBLE ASSETS Licensing Agreements (Finite) Software Licenses (Finite) Distribution Contracts (Finite) Non-Compete Agreements (Finite) Accumulated Amortization Balance as of December 31, 2021 $ 912,260 $ 1,843,716 $ 560,000 $ 61,230 $ 3,377,206 Amortization expense 175,312 1,072,168 - 59,517 1,306,997 Foreign currency translation adjustment - (184,538 ) - (11,257 ) (195,795 ) Balance as of September 30, 2022 $ 1,087,572 $ 2,731,346 $ 560,000 $ 109,490 $ 4,488,408 Motorsport Games Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements Estimated aggregate amortization expense of intangible assets for the next five years and thereafter is as follows: SCHEDULE OF ESTIMATED AGGREGATE AMORTIZATION EXPENSE OF INTANGIBLE ASSETS For the Years Ended December 31, Total 2022 (remaining period) $ 632,147 2023 1,892,641 2024 1,687,137 2025 1,678,365 2026 1,400,729 Thereafter 2,172,544 Estimated aggregate amortization expense $ 9,463,563 Amortization expense related to intangible assets was approximately $ 0.4 0.5 1.3 1.1 3.5

GOODWILL

GOODWILL	9 Months Ended
	Sep. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
GOODWILL	NOTE 4 – GOODWILL The carrying amount of goodwill attributable to our Gaming and Esports reporting units and the changes in such balances during the nine months ended September 30, 2022 were as follows: SCHEDULE OF GOODWILL Games Esports Total Balance as of January 1, 2022 $ 4,802,882 $ 64,583 $ 4,867,465 Impairment of Goodwill (4,723,685 ) (64,583 ) (4,788,268 ) Foreign exchange (79,197 ) - (79,197 ) Balance as of September 30, 2022 $ - $ - $ - The Company identified triggering events as of March 31, 2022 that indicated its goodwill associated with the acquisition of Studio397 B.V. (“Studio397”) was at risk of impairment and as such, performed a quantitative impairment assessment to determine whether the fair value of the associated reporting unit exceeded its fair value. The primary triggers for the impairment review were changes made to Motorsport Games’ product roadmap during the three months ended March 31, 2022, which resulted in changes to the scope and timing of certain product releases, as well as changes in the value of Motorsport Games’ market capitalization which had reduced significantly subsequent to December 31, 2021, the date of the last impairment assessment. As a result of the March 31, 2022 interim impairment assessment, the Company determined the carrying value of its Gaming reporting unit exceeded its fair value and the associated goodwill was fully impaired. Impairment losses of approximately $ 4.8 0 The Company determined the fair value of the Gaming reporting unit using a discounted cash flow valuation model. The impairment loss was primarily driven by a reduction in expected future revenues, following changes to the Company’s product roadmap, as well as a higher discount rate applied in the valuation model. The principal assumptions used in the discounted cash flow valuation model were forecasted revenues and weighted average cost of capital (i.e., the discount rate). The impairment loss is presented as impairment of goodwill in the condensed consolidated statements of operations.

LEASES

LEASES	9 Months Ended
	Sep. 30, 2022
Leases
LEASES	NOTE 5 - LEASES The Company’s operating leases primarily relate to real estate, which include office space in the U.S., the U.K., and Russia. The Company’s leases have established fixed payment terms that are typically subject to annual rent increases throughout the term of each lease agreement. The Company’s lease agreements have varying noncancelable rental periods and do not typically include options for the Company to extend the lease terms. Motorsport Games Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements The Company’s operating leases have been presented in operating lease right-of-use assets, operating lease liabilities (short-term) and operating lease liabilities (long-term), on the Company’s condensed consolidated balance sheet as of September 30, 2022. Leases with an initial term of 12 months or less are not recorded on the condensed consolidated balance sheet. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. Refer to Note 1, Business Organization, Nature of Operations, Risks and Uncertainties and Basis of Presentation Incremental borrowing rate The Company’s lease agreements do not provide an implicit rate to determine the present value of lease payments. As such, the Company uses its incremental borrowing rate to determine the present value of lease payments. The Company derives its incremental borrowing rate from information available at the lease commencement date, which represents a collateralized rate of interest the Company would have to pay to borrow over a similar term an amount equal to the lease payments in a similar economic environment. As the Company did not have external borrowings at the adoption date with comparable terms to its lease agreements, the Company estimated its borrowing rate based on prime lending rate (“Prime Rate”), adjusted for the US Treasury note rates for the same term as the associated lease and the Company’s credit risk spread. The components of lease expense were as follows: SCHEDULE OF LEASE COST Condensed Consolidated Statement of Three Months Nine Months Operations Classification September 30, 2022 September 30, 2022 Short-term operating lease expense G&A $ 45,419 $ 98,335 Operating lease expense G&A 125,545 322,483 Total lease costs $ 170,964 $ 420,818 Weighted average remaining lease terms and weighted average discount rates are as follows: SCHEDULE OF REMAINING LEASE TERMS Nine Months Ended September 30, 2022 Weighted-average remaining lease term - operating leases (years) 2.80 Weighted-average discount rate - operating leases 7.46 % Supplemental cash flow information related to leases is as follows: SCHEDULE OF CASH FLOW SUPPLEMENTAL Nine Months Ended September 30, 2022 Cash paid for amounts included in the measurement of operating lease liabilities $ 385,815 Right of use assets obtained in exchange for new lease obligations $ 1,086,668 Motorsport Games Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements As of September 30, 2022, maturities related to lease liabilities were as follows: SCHEDULE OF MATURITIES OF LEASE LIABILITIES Operating Leases 2022 (remaining period) $ 67,060 2023 234,007 2024 160,377 2025 26,749 2026 13,374 Thereafter - Total lease payments $ 501,567 Less effects of imputed interest (36,336 ) Present value of lease liabilities $ 465,231 New lease agreements On February 8, 2022, the Company entered into a new lease agreement with Lemon City Group, LLC, an entity affiliated with our majority shareholder, Motorsport Network, for office space located in Miami, Florida (the “New Lemon City Lease”). The term of this new lease was 5 years, which commenced April 1, 2022 and was scheduled to expire on March 31, 2027, terminable upon 60-days’ written notice, by either party, with no penalty. 22,000

ACCRUED EXPENSES AND OTHER LIAB

ACCRUED EXPENSES AND OTHER LIABILITIES	9 Months Ended
	Sep. 30, 2022
Payables and Accruals [Abstract]
ACCRUED EXPENSES AND OTHER LIABILITIES	NOTE 6 – ACCRUED EXPENSES AND OTHER LIABILITIES Accrued expenses and other liabilities consisted of the following: SCHEDULE OF ACCRUED EXPENSES September 30, December 31, 2022 2021 Accrued royalties $ 544,358 $ 1,694,011 Accrued professional fees 231,233 80,909 Accrued consulting fees 115,000 106,006 Accrued development costs 508,298 968,007 Esport prize money 31,250 168,959 Accrued taxes 141,376 31,491 Accrued payroll 134,119 235,224 Deferred revenue 670,293 - Loss contingency reserves 1,000,000 - Accrued other 173,007 239,664 Total $ 3,548,934 $ 3,524,271

DUE TO_FROM RELATED PARTIES

DUE TO/FROM RELATED PARTIES	9 Months Ended
	Sep. 30, 2022
Due Tofrom Related Parties
DUE TO/FROM RELATED PARTIES	NOTE 7 – DUE TO/FROM RELATED PARTIES On April 1, 2020, the Company entered into a promissory note (the “$ 12 10 10 12 12 10 12 Motorsport Games Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements The $ 12 12 On September 8, 2022, the Company entered into a support agreement with Motorsport Network (the “Support Agreement”) pursuant to which Motorsport Network issued approximately $ 3 12 (i) the Company enters into a new financing arrangement (whether debt, equity or otherwise) under which the Company is then able to draw or provides the Company with available cash in excess of amounts required in the Company’s reasonable judgment to run its operations in the ordinary course of business; (ii) the Company generates from operations available cash in excess of amounts required in the Company’s reasonable judgment to run its operations in the ordinary course of business; or (iii) the Company’s independent auditors issue an unqualified opinion on its financial statements and the Company’s repayment of the advances, in whole or in part, would not otherwise cause the independent auditor to issue a going concern qualified opinion. Upon the occurrence of any of the foregoing events, the Company shall prepay on such date principal amount of the September 2022 Cash Advance and other advances under the $12 million Line of Credit then outstanding in an amount equal to such available excess cash or, in the case of (iii) above, the amount that would not cause the Company’s independent auditor to issue a going concern qualified opinion, together with interest accrued but unpaid on the unpaid September 2022 Cash Advance and other advances, which repayment obligation shall continue until all such advances under the $12 million Line of Credit are paid in full. The entire aggregate principal amount of the September 2022 Cash Advance and the other advances under the $12 million Line of Credit, together with interest accrued but unpaid thereon, shall also become immediately and automatically due and payable, and the $12 million Line of Credit shall immediately and automatically terminate, in each case without any action required by Motorsport Network, if (i) the Company experience an event of default under any other debt instrument, agreement or arrangement; or (ii) any final judgment or final judgments for the payment of money in excess (net of amounts covered by third-party insurance with insurance carriers who have not disclaimed liability with respect to such judgment or judgments) of $500,000 or its foreign currency equivalent is entered against the Company or any subsidiary and is not discharged and either (a) an enforcement proceeding has been commenced by any creditor upon such judgment or decree or (b) there is a period of 60 days following the entry of such judgment or decree during which such judgment or decree is not discharged, waived or the execution thereof stayed and, in the case of (b), such default continues for 60 consecutive days. During the nine months ended September 30, 2022, the Company did not repay any amounts borrowed under the $ 12 12 3 Given the state of the financial markets, the Company continues to assess its exposure to any potential non-performance by Motorsport Network and believes that there is a substantial likelihood that Motorsport Network may not fulfill the Company’s future borrowing requests. In addition to the $ 12 3.1 0.1 0.1

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	9 Months Ended
	Sep. 30, 2022
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	NOTE 8 – RELATED PARTY TRANSACTIONS From time to time, Motorsport Network, and other related entities pay for Company expenses on the Company’s behalf. During the nine months ended September 30, 2022, the Company incurred expenses of approximately $ 0.1 12 Due To/From Related Parties. Motorsport Games Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements Leasing agreements On February 8, 2022, the Company entered into the New Lemon City Lease with Lemon City Group, LLC, an entity affiliated with our majority shareholder, Motorsport Network, for office space located in Miami, Florida, which was subsequently terminated on August 10, 2022, effective on October 9, 2022. See Note 5 – Leases

STOCKHOLDERS_ EQUITY

STOCKHOLDERS’ EQUITY	9 Months Ended
	Sep. 30, 2022
Equity [Abstract]
STOCKHOLDERS’ EQUITY	NOTE 9 – STOCKHOLDERS’ EQUITY Initial Public Offering On January 15, 2021, the Company completed its initial public offering of 345,000 200.00 45,000 63,073,783 Stock Warrants As of September 30, 2022 and December 31, 2021, 704Games has outstanding 10-year warrants to purchase 4,000 93.03 3

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION	9 Months Ended
	Sep. 30, 2022
Share-Based Payment Arrangement [Abstract]
SHARE-BASED COMPENSATION	NOTE 10 – SHARE-BASED COMPENSATION On January 12, 2021, in connection with initial public offering, Motorsport Games established the Motorsport Games Inc. 2021 Equity Incentive Plan (the “MSGM 2021 Stock Plan”). The MSGM 2021 Stock Plan provides for the grant of options, stock appreciation rights, restricted stock awards, performance share awards and restricted stock unit awards, and initially authorized 100,000 42,595 The majority of the options issued under the MSGM 2021 Stock Plan have time-based vesting schedules, typically vesting ratably over a 3-year period. Certain stock option awards differed from this vesting schedule, notably awards made to Motorsport Games’ Chief Executive Officer in conjunction with Motorsport Games’ initial public offering that vested immediately, as well as those made to Motorsport Games’ directors that vested on the one-year anniversary of award issuance. All stock options issued under the MSGM 2021 Stock Plan expire 10 The following is a summary of stock-based compensation award activity for the nine months ended September 30, 2022: SCHEDULE OF STOCK-BASED COMPENSATION OPTIONS ACTIVITY For the Nine Months Ended September 30, 2022 Number of Options Vesting Term Contractual Term Grant Date Fair Value Awards outstanding under the MSGM 2021 Stock Plan as of January 1, 2022 (net of forfeitures) 29,740 Stock options awarded to employees under the MSGM 2021 Stock Plan 56,935 3 10 $ 1,143,500 Stock options awarded to Board of Directors under the MSGM 2021 Stock Plan 5,711 1 10 $ 120,630 Forfeited, cancelled or expired (34,981 ) Awards outstanding under the MSGM 2021 Stock Plan as of September 30, 2022 (net of forfeitures) 57,405 Motorsport Games Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements In addition to the equity awards granted and detailed above, the Company granted 3,769 0.1 Stock-Based Compensation The following table summarizes stock-based compensation expense resulting from equity awards included in the Company’s condensed consolidated statement of operations: SCHEDULE OF STOCK BASED COMPENSATION EXPENSE For the Three Months Ended For the Nine Months Ended 2022 2021 2022 2021 G&A $ 223,953 $ 285,318 $ 682,276 $ 9,264,583 Sales & Marketing 1,371 3,793 80,210 123,139 Development 3,388 3,062 57,829 97,641 Stock-based compensation expense $ 228,712 $ 292,173 $ 820,315 $ 9,485,363 As of September 30, 2022, there was approximately $ 1.1 2.5

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	9 Months Ended
	Sep. 30, 2022
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	NOTE 11 – COMMITMENTS AND CONTINGENCIES Litigation The Company is involved in various routine legal proceedings incidental to the ordinary course of its business. The Company believes that the outcome of all pending legal proceedings in the aggregate is not reasonably likely to have a material adverse effect on the Company’s business, prospects, results of operations, financial condition and/or cash flows, except as otherwise disclosed below. 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. Litigation or other legal proceedings, with or without merit, is unpredictable and generally expensive and time consuming and, even if resolved in our favor, is likely to divert significant resources from our core business, including distracting our management personnel from their normal responsibilities. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company, or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed, unless they involve guarantees, in which case the guarantees would be disclosed. There can be no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows. Motorsport Games Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements As previously disclosed, on February 11, 2021, HC2 Holdings 2 Inc. (now known as Innovate 2) and Continental General Insurance Company, former minority stockholders of 704Games, filed a complaint in the U.S. District Court for the District of Delaware against the Company, the Company’s Chief Executive Officer and Executive Chairman, the Company’s Chief Financial Officer, and the manager of Motorsport Network. The complaint was later amended and added Leo Capital Holdings LLC as an additional plaintiff and the controller of Motorsport Network as an additional individual defendant. The complaint alleges, among other things, purported misrepresentations and omissions concerning 704Games’ financial condition made in connection with the Company’s purchase of these minority shareholders’ interest in 704Games in August and October 2021. The complaint asserts claims under Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Rule 10b-5 thereunder; Section 20(a) of the Exchange Act; Section 20A of the Exchange Act; breach of the Company’s obligations under the Stockholders’ Agreement dated August 14, 2018; fraudulent inducement; breach of fiduciary duties; and unjust enrichment. The plaintiffs seek, among other things, damages from the defendants, jointly and severally, based on the alleged difference between the fair market value of the shares of common stock of 704Games on the date of plaintiffs’ sale and the purchase price that was paid, as well as punitive damages and other relief. In May 2021, the Company, along with the other defendants, filed a motion to dismiss the plaintiffs’ complaint. On March 28, 2022, the court entered an order denying the motion to dismiss. The Company believes that this action is without merit and will continue to vigorously defend itself. As of September 30, 2022, the Company has accrued $ 1 Epic License Agreement On August 11, 2020, the Company entered into a licensing agreement with Epic Games International (“Epic”) for worldwide licensing rights to Epic’s proprietary computer program known as the Unreal Engine 4. Pursuant to the agreement, upon payment of the initial license fee described below, the Company was granted a non-exclusive, non-transferable and terminable license to develop, market and sublicense (under limited circumstances and subject to conditions of the agreement) certain products using the Unreal Engine 4 for its next generation of games. The Company will pay Epic a license fee royalty payment equal to 5 September 16,000 0.1 Minimum Royalty Guarantees The Company is required to make certain minimum royalty guarantee payments to third-party licensors, arising primarily from its NASCAR, INDYCAR and BTCC licenses, Le Mans Video Gaming License and Le Mans Esports License. These minimum royalty guarantee payments apply throughout the duration of the licensing agreements, which expire between fiscal years ending December 31, 2026 and 2031, and give rise to a commitment of approximately $ 35.5 3.55 Purchase Commitment Liabilities On April 22, 2022, the Company entered into a letter agreement (the “Amendment”) amending the terms of (i) the share purchase agreement dated March 31, 2021 (the “SPA”) with Luminis International BV, Technology In Business B.V. (“TIB”) and certain of TIB’s shareholders parties to such amendment, relating to the acquisition of Studio397 and (ii) the related deed of pledge that secured the Company’s payment of the $ 3.2 Pursuant to the Amendment, the deferred installment amount due to be paid under the SPA by the Company on the first anniversary of closing was reduced from $3.2 million to $1 million with the remaining $2.2 million further deferred and to be paid within 90 days of the date that the Company made the $ 1 1 Motorsport Games Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements On July 21, 2022, the Company entered into a letter agreement, effective as of July 19, 2022 (the “Second Amendment”), further amending the terms of the SPA. Pursuant to the Second Amendment, the deferred purchase price installment that was otherwise due to be paid by the Company within 90 days of the date of the $1 million payment was reduced from $2.2 million to $1.9 million as a result of the Company’s pay down of $0.3 million in July 2022. Under the Second Amendment, the remaining balance of $1.9 million plus interest thereon at 15% per annum, is to be paid as follows: (i) $100,000 monthly payments from August 15, 2022 through December of 2022; and (ii) $150,000 monthly payments from January 15, 2023 until the entire unpaid $1.9 million and accrued and unpaid interest thereon are paid in full. Further, pursuant to the Second Amendment, secured obligations under the deed of pledge have been correspondingly reduced from $2.2 million to $1.9 million

CONCENTRATIONS

CONCENTRATIONS	9 Months Ended
	Sep. 30, 2022
Risks and Uncertainties [Abstract]
CONCENTRATIONS	NOTE 12 – CONCENTRATIONS Customer Concentrations The following table sets forth information as to each customer that accounted for 10% or more of the Company’s revenues, with all the customers listed coming from the Gaming segment, for the following periods: SCHEDULE OF CONCENTRATIONS Three Months Ended September 30, Nine Months Ended September 30, Customer 2022 2021 2022 2021 Customer B 39.92 % 21.70 % 26.75 % 28.20 % Customer C - 22.00 % 21.87 % 18.70 % Customer D 39.66 % 41.00 % 23.00 % 38.80 % 79.58 % 84.70 % 71.62 % 85.70 % * Less than 10%. The following table sets forth information as to each customer that accounted for 10% or more of the Company’s trade accounts receivable (net), with all customers coming from the Gaming segment, as of: Customer September 30, 2022 December 31, 2021 Customer A - 51.92 % Customer B 14.14 % 19.10 % Customer C 27.38 % - Customer E 17.41 % - Customer F 21.11 % - 80.04 % 71.02 % * Less than 10%. A reduction in sales from or loss of these customers, in a significant amount, could have a material adverse effect on the Company’s results of operations and financial condition. Motorsport Games Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements Supplier Concentrations The following table sets forth information as to each supplier that accounted for 10% or more of the Company’s cost of revenues, with all suppliers relating to the Gaming segment, for the following periods: SCHEDULE OF CONCENTRATIONS Three Months Ended September 30, Nine Months Ended September 30, Customer 2022 2021 2022 2021 Supplier A - 24.30 % 16.10 % 32.20 % Supplier B - 50.20 % - 39.40 % Supplier C - - 18.89 % - 0.00 % 74.50 % 34.99 % 71.60 % * Less than 10%.

SEGMENT REPORTING

SEGMENT REPORTING	9 Months Ended
	Sep. 30, 2022
Segment Reporting [Abstract]
SEGMENT REPORTING	NOTE 13 – SEGMENT REPORTING The Company’s principal operating segments coincide with the types of products and services to be sold. The products and services from which revenues are derived are consistent with the reporting structure of the Company’s internal organization. The Company’s two Segment operating profit is determined based upon internal performance measures used by the chief operating decision-maker. The Company derives the segment results from its internal management reporting system. The accounting policies the Company uses to derive reportable segment results are the same as those used for external reporting purposes. Management measures the performance of each reportable segment based upon several metrics, including net revenues, gross profit and operating loss. Management uses these results to evaluate the performance of, and to assign resources to, each of the reportable segments. The Company manages certain operating expenses separately at the corporate level and does not allocate such expenses to the segments. Segment income from operations excludes interest income/expense and other income or expenses and income taxes according to how a particular reportable segment’s management is measured. Management does not consider impairment charges and unallocated costs in measuring the performance of the reportable segments. Motorsport Games Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements Segment information available with respect to these reportable business segments was as follows: SCHEDULE OF SEGMENT REPORTING INFORMATION For the Three Months Ended September 30, For the Nine Months Ended September 30, 2022 2021 2022 2021 Revenues: Gaming $ 1,042,852 $ 2,042,322 $ 5,943,178 $ 6,731,462 Esports 180,290 96,144 610,740 120,063 Total Revenues $ 1,223,142 $ 2,138,466 $ 6,553,918 $ 6,851,525 Cost of revenues: Gaming $ 540,519 $ 848,705 $ 2,765,263 $ 2,466,572 Esports 62,337 100,434 707,556 170,678 Total Cost of Revenues $ 602,856 $ 949,139 $ 3,472,819 $ 2,637,250 Gross Profit (Loss) Gaming $ 502,333 $ 1,193,617 $ 3,177,915 $ 4,264,890 Esports 117,953 (4,290 ) (96,816 ) (50,615 ) Total Gross Profit $ 620,286 $ 1,189,327 $ 3,081,099 $ 4,214,275 Loss From Operations Gaming $ (6,515,203 ) $ (6,035,516 ) $ (27,952,962 ) $ (26,945,662 ) Esports (1,037,274 ) (351,981 ) (1,888,280 ) (792,308 ) Total Loss From Operations $ (7,552,477 ) $ (6,387,497 ) $ (29,841,242 ) $ (27,737,970 ) Depreciation and Amortization Gaming $ 84,326 $ 79,394 $ 301,465 $ 176,617 Esports 8,377 2,480 25,034 2,480 Total Depreciation and Amortization $ 92,703 $ 81,874 $ 326,499 $ 179,097 Interest Expense, net: Gaming $ (244,953 ) $ (160,310 ) $ (638,211 ) $ (311,748 ) Esports - - - - Total Interest Expense, net $ (244,953 ) $ (160,310 ) $ (638,211 ) $ (311,748 ) Gain Attributable to Equity Method Investment: Gaming $ - $ - $ - $ 1,370,837 Esports - - - - Total Gain Attributable to Equity Method Investment $ - $ - $ - $ 1,370,837 Other (Expense) Income, Net: Gaming $ (729,158 ) $ (110,192 ) $ (1,496,763 ) $ (27,913 ) Esports (10,127 ) (630 ) (15,215 ) 1,798 Total Other (Expense) Income, net $ (739,285 ) $ (110,822 ) $ (1,511,978 ) $ (26,115 ) Net Loss: Gaming $ (7,489,314 ) $ (6,306,018 ) $ (30,087,936 ) $ (25,914,486 ) Esports (1,047,401 ) (352,611 ) (1,903,495 ) (790,510 ) Total Net Loss $ (8,536,715 ) $ (6,658,629 ) $ (31,991,431 ) $ (26,704,996 ) September 30, December 31, Total assets: Gaming $ 18,461,380 $ 47,511,471 Esports 2,293,972 3,191,732 Total assets $ 20,755,352 $ 50,703,203 Motorsport Games Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	9 Months Ended
	Sep. 30, 2022
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 14 - SUBSEQUENT EVENTS The Company evaluates subsequent events and transactions that occur after the balance sheet date up to the date that the consolidated financial statements were issued. In connection with the Company’s previously disclosed 2022 Restructuring Program, the Company reduced the base salaries of its most senior executives on October 14, 2022, including the base salary of Dmitry Kozko, the Company’s CEO, by 35 334,750 Effective on November 10, 2022, the Company amended its certificate of incorporation to effectuate a reverse split of the Company’s issued and outstanding shares of Class A common stock and Class B common stock at a ratio of 1-for-10.

SUMMARY OF SIGNIFICANT ACCOUN_2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	Sep. 30, 2022
Accounting Policies [Abstract]
Revenue Recognition	Revenue Recognition The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers ● Identification of a contract with a customer; ● Identification of the performance obligations in the contract; ● Determination of the transaction price; ● Allocation of the transaction price to the performance obligations in the contract; and ● Recognition of revenue when or as the performance obligations are satisfied. The Company currently derives revenue principally from sales of its games and related extra content that can be played by customers on a variety of platforms, which include game consoles, PCs, mobile phones and tablets. The Company’s product and service offerings include the following: 1) Sales of Games 2) Sales of Extra Content 3) Esports Competition Events Motorsport Games Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements Sales of Games. Sales of Extra Content. Esports. The timing of the Company’s revenue recognition may differ from the timing of payment by its customers. A receivable is recorded when revenue is recognized prior to payment and the Company has an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, the Company records deferred revenue until the Company’s performance obligations are satisfied. Identifying Performance Obligations Performance obligations promised in a contract are identified based on the goods and services that will be transferred to the customer that are both capable of being distinct (i.e., the customer can benefit from the goods or services either on its own or together with other resources that are readily available), and are distinct in the context of the contract (i.e., it is separately identifiable from other goods or services in the contract). To the extent a contract includes multiple promises, the Company must apply judgment to determine whether those promises are separate and distinct performance obligations. If these criteria are not met, the promises are accounted for as a combined performance obligation. Determining the Transaction Price The transaction price is determined based on the consideration that the Company will be entitled to receive in exchange for transferring its goods and services to the customer. Determining the transaction price often requires significant judgment based on an assessment of contractual terms and business practices. It further includes reviewing variable consideration such as discounts, sales returns, price protection, and rebates, which is estimated at the time of the transaction. See below for additional information regarding the Company’s sales returns and price protection reserves. Allocating the Transaction Price Allocating the transaction price requires the Company to determine an estimate of the relative stand-alone selling price for each distinct performance obligation. Motorsport Games Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements Principal Versus Agent Considerations The Company evaluates sales to end customers of its full games and related content via third-party storefronts, including digital storefronts such as Microsoft’s Xbox Store, Sony’s PlayStation Store, Nintendo’s eShop, Apple’s App Store, and Google’s Play Store, to determine whether the Company is acting as the principal or agent in the sale to the end customer. Key indicators that the Company evaluates in determining gross versus net treatment include but are not limited to the following: ● the underlying contract terms and conditions between the various parties to the transaction; ● which party is primarily responsible for fulfilling the promise to provide the specified good or service to the end customer; ● which party has inventory risk before the specified good or service has been transferred to the end customer; and ● which party has discretion in establishing the price for the specified good or service. Based on an evaluation of the above indicators, the Company determined that, apart from contracts with customers where revenue is generated via the Apple’s App Store or Google’s Play Store, the third party is considered the principal with the end customer and, as a result, the Company reports revenue net of the fees retained by the storefront. For contracts with customers where revenues are generated via the Apple’s App Store or Google’s Play Store, the Company has determined that it is the principal and, as a result, reports revenues on a gross basis, with mobile platform fees included within cost of revenues. Sales Returns and Price Protection Reserves Sales returns and price protection are considered variable consideration under ASC 606. The Company reduces revenue for estimated future returns and price protection which may occur with distributors and retailers (“channel partners”). See Note 2 – Summary of Significant Accounting Policies – Accounts Receivable 0 1.1 0.06 0.3
Stock-Based Compensation	Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC 718 – Compensation – Stock Compensation. The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award. The fair value of the award is measured on the grant date, using the Black-Scholes option pricing model. The fair value amount is then recognized over the period during which services are required to be provided in exchange for the award, usually the vesting period. Upon the exercise of an award, the Company issues new shares of common stock out of its authorized shares. Stock-based compensation is adjusted for any forfeitures, which are accounted for on an as occurred basis.
Net Loss Per Common Share	Net Loss Per Common Share Basic net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of common and dilutive common-equivalent shares outstanding during each period. Dilutive common-equivalent shares consist of shares of options, if not anti-dilutive. Motorsport Games Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements The following shares were excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive: SCHEDULE OF CALCULATION WEIGHTED AVERAGE DILUTIVE COMMON SHARES For the Three and Nine Months Ended September 30, 2022 2021 Stock options 57,405 57,742 57,405 57,742
Income Taxes	Income Taxes On January 8, 2021, Motorsport Gaming, a Florida limited liability company, converted into Motorsport Games, a Delaware corporation, pursuant to a statutory conversion. The Company is subject to federal and state income taxes in the U.S. The Company files income tax returns in the jurisdictions in which nexus threshold requirements are met. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of items that have been included or excluded in the financial statements or tax returns. Deferred tax assets and liabilities are determined on the basis of the difference between the tax basis of assets and liabilities and their respective financial reporting amounts (“temporary differences”) at enacted tax rates in effect for the years in which the temporary differences are expected to reverse. ASC 740, Taxes The Company utilizes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company’s policy is to classify assessments, if any, for tax-related interest as interest expense and penalties as general and administrative expenses in its condensed consolidated statements of operations.

SUMMARY OF SIGNIFICANT ACCOUN_3

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	9 Months Ended
	Sep. 30, 2022
Accounting Policies [Abstract]
SCHEDULE OF CALCULATION WEIGHTED AVERAGE DILUTIVE COMMON SHARES	The following shares were excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive: SCHEDULE OF CALCULATION WEIGHTED AVERAGE DILUTIVE COMMON SHARES For the Three and Nine Months Ended September 30, 2022 2021 Stock options 57,405 57,742 57,405 57,742

INTANGIBLE ASSETS (Tables)

INTANGIBLE ASSETS (Tables)	9 Months Ended
	Sep. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
SCHEDULE OF INTANGIBLE ASSETS	The following is a summary of intangible assets as of September 30, 2022: SCHEDULE OF INTANGIBLE ASSETS Licensing Agreements (Finite) Licensing Agreements (Indefinite) Software Licenses (Finite) Distribution Contracts (Finite) Trade Names (Indefinite) Non-Compete Agreements (Finite) Accumulated Amortization Total Balance as of December 31, 2021 $ 7,198,363 $ 2,810,000 $ 10,364,541 $ 560,000 $ 2,672,581 $ 257,530 $ (3,377,206 ) $ 20,485,809 Amortization expense - - - - - - (1,306,997 ) (1,306,997 ) Impairment of intangible assets - (1,118,209 ) (1,320,993 ) - (2,200,900 ) - - (4,640,102 ) FX translation adjustments - (275,948 ) (872,874 ) - (124,258 ) (33,120 ) 195,795 (1,110,405 ) Balance as of September 30, 2022 $ 7,198,363 $ 1,415,843 $ 8,170,674 $ 560,000 $ 347,423 $ 224,410 $ (4,488,408 ) 13,428,305 Weighted average remaining amortization period at September 30, 2022 - - 4.6 5.4 - 4.5 - -
SCHEDULE OF ACCUMULATED AMORTIZATION OF INTANGIBLE ASSETS	Accumulated amortization of intangible assets consists of the following: SCHEDULE OF ACCUMULATED AMORTIZATION OF INTANGIBLE ASSETS Licensing Agreements (Finite) Software Licenses (Finite) Distribution Contracts (Finite) Non-Compete Agreements (Finite) Accumulated Amortization Balance as of December 31, 2021 $ 912,260 $ 1,843,716 $ 560,000 $ 61,230 $ 3,377,206 Amortization expense 175,312 1,072,168 - 59,517 1,306,997 Foreign currency translation adjustment - (184,538 ) - (11,257 ) (195,795 ) Balance as of September 30, 2022 $ 1,087,572 $ 2,731,346 $ 560,000 $ 109,490 $ 4,488,408
SCHEDULE OF ESTIMATED AGGREGATE AMORTIZATION EXPENSE OF INTANGIBLE ASSETS	Estimated aggregate amortization expense of intangible assets for the next five years and thereafter is as follows: SCHEDULE OF ESTIMATED AGGREGATE AMORTIZATION EXPENSE OF INTANGIBLE ASSETS For the Years Ended December 31, Total 2022 (remaining period) $ 632,147 2023 1,892,641 2024 1,687,137 2025 1,678,365 2026 1,400,729 Thereafter 2,172,544 Estimated aggregate amortization expense $ 9,463,563

GOODWILL (Tables)

GOODWILL (Tables)	9 Months Ended
	Sep. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
SCHEDULE OF GOODWILL	The carrying amount of goodwill attributable to our Gaming and Esports reporting units and the changes in such balances during the nine months ended September 30, 2022 were as follows: SCHEDULE OF GOODWILL Games Esports Total Balance as of January 1, 2022 $ 4,802,882 $ 64,583 $ 4,867,465 Impairment of Goodwill (4,723,685 ) (64,583 ) (4,788,268 ) Foreign exchange (79,197 ) - (79,197 ) Balance as of September 30, 2022 $ - $ - $ -

LEASES (Tables)

LEASES (Tables)	9 Months Ended
	Sep. 30, 2022
Leases
SCHEDULE OF LEASE COST	The components of lease expense were as follows: SCHEDULE OF LEASE COST Condensed Consolidated Statement of Three Months Nine Months Operations Classification September 30, 2022 September 30, 2022 Short-term operating lease expense G&A $ 45,419 $ 98,335 Operating lease expense G&A 125,545 322,483 Total lease costs $ 170,964 $ 420,818
SCHEDULE OF REMAINING LEASE TERMS	Weighted average remaining lease terms and weighted average discount rates are as follows: SCHEDULE OF REMAINING LEASE TERMS Nine Months Ended September 30, 2022 Weighted-average remaining lease term - operating leases (years) 2.80 Weighted-average discount rate - operating leases 7.46 %
SCHEDULE OF CASH FLOW SUPPLEMENTAL	Supplemental cash flow information related to leases is as follows: SCHEDULE OF CASH FLOW SUPPLEMENTAL Nine Months Ended September 30, 2022 Cash paid for amounts included in the measurement of operating lease liabilities $ 385,815 Right of use assets obtained in exchange for new lease obligations $ 1,086,668
SCHEDULE OF MATURITIES OF LEASE LIABILITIES	As of September 30, 2022, maturities related to lease liabilities were as follows: SCHEDULE OF MATURITIES OF LEASE LIABILITIES Operating Leases 2022 (remaining period) $ 67,060 2023 234,007 2024 160,377 2025 26,749 2026 13,374 Thereafter - Total lease payments $ 501,567 Less effects of imputed interest (36,336 ) Present value of lease liabilities $ 465,231

ACCRUED EXPENSES AND OTHER LI_2

ACCRUED EXPENSES AND OTHER LIABILITIES (Tables)	9 Months Ended
	Sep. 30, 2022
Payables and Accruals [Abstract]
SCHEDULE OF ACCRUED EXPENSES	Accrued expenses and other liabilities consisted of the following: SCHEDULE OF ACCRUED EXPENSES September 30, December 31, 2022 2021 Accrued royalties $ 544,358 $ 1,694,011 Accrued professional fees 231,233 80,909 Accrued consulting fees 115,000 106,006 Accrued development costs 508,298 968,007 Esport prize money 31,250 168,959 Accrued taxes 141,376 31,491 Accrued payroll 134,119 235,224 Deferred revenue 670,293 - Loss contingency reserves 1,000,000 - Accrued other 173,007 239,664 Total $ 3,548,934 $ 3,524,271

SHARE-BASED COMPENSATION (Table

SHARE-BASED COMPENSATION (Tables)	9 Months Ended
	Sep. 30, 2022
Share-Based Payment Arrangement [Abstract]
SCHEDULE OF STOCK-BASED COMPENSATION OPTIONS ACTIVITY	The following is a summary of stock-based compensation award activity for the nine months ended September 30, 2022: SCHEDULE OF STOCK-BASED COMPENSATION OPTIONS ACTIVITY For the Nine Months Ended September 30, 2022 Number of Options Vesting Term Contractual Term Grant Date Fair Value Awards outstanding under the MSGM 2021 Stock Plan as of January 1, 2022 (net of forfeitures) 29,740 Stock options awarded to employees under the MSGM 2021 Stock Plan 56,935 3 10 $ 1,143,500 Stock options awarded to Board of Directors under the MSGM 2021 Stock Plan 5,711 1 10 $ 120,630 Forfeited, cancelled or expired (34,981 ) Awards outstanding under the MSGM 2021 Stock Plan as of September 30, 2022 (net of forfeitures) 57,405
SCHEDULE OF STOCK BASED COMPENSATION EXPENSE	The following table summarizes stock-based compensation expense resulting from equity awards included in the Company’s condensed consolidated statement of operations: SCHEDULE OF STOCK BASED COMPENSATION EXPENSE For the Three Months Ended For the Nine Months Ended 2022 2021 2022 2021 G&A $ 223,953 $ 285,318 $ 682,276 $ 9,264,583 Sales & Marketing 1,371 3,793 80,210 123,139 Development 3,388 3,062 57,829 97,641 Stock-based compensation expense $ 228,712 $ 292,173 $ 820,315 $ 9,485,363

CONCENTRATIONS (Tables)

CONCENTRATIONS (Tables)	9 Months Ended
	Sep. 30, 2022
Customer Concentration Risk [Member]
Concentration Risk [Line Items]
SCHEDULE OF CONCENTRATIONS	The following table sets forth information as to each customer that accounted for 10% or more of the Company’s revenues, with all the customers listed coming from the Gaming segment, for the following periods: SCHEDULE OF CONCENTRATIONS Three Months Ended September 30, Nine Months Ended September 30, Customer 2022 2021 2022 2021 Customer B 39.92 % 21.70 % 26.75 % 28.20 % Customer C - 22.00 % 21.87 % 18.70 % Customer D 39.66 % 41.00 % 23.00 % 38.80 % 79.58 % 84.70 % 71.62 % 85.70 % * Less than 10%. The following table sets forth information as to each customer that accounted for 10% or more of the Company’s trade accounts receivable (net), with all customers coming from the Gaming segment, as of: Customer September 30, 2022 December 31, 2021 Customer A - 51.92 % Customer B 14.14 % 19.10 % Customer C 27.38 % - Customer E 17.41 % - Customer F 21.11 % - 80.04 % 71.02 % * Less than 10%.
Supplier Concentration Risk [Member]
Concentration Risk [Line Items]
SCHEDULE OF CONCENTRATIONS	The following table sets forth information as to each supplier that accounted for 10% or more of the Company’s cost of revenues, with all suppliers relating to the Gaming segment, for the following periods: SCHEDULE OF CONCENTRATIONS Three Months Ended September 30, Nine Months Ended September 30, Customer 2022 2021 2022 2021 Supplier A - 24.30 % 16.10 % 32.20 % Supplier B - 50.20 % - 39.40 % Supplier C - - 18.89 % - 0.00 % 74.50 % 34.99 % 71.60 % * Less than 10%.

SEGMENT REPORTING (Tables)

SEGMENT REPORTING (Tables)	9 Months Ended
	Sep. 30, 2022
Segment Reporting [Abstract]
SCHEDULE OF SEGMENT REPORTING INFORMATION	Segment information available with respect to these reportable business segments was as follows: SCHEDULE OF SEGMENT REPORTING INFORMATION For the Three Months Ended September 30, For the Nine Months Ended September 30, 2022 2021 2022 2021 Revenues: Gaming $ 1,042,852 $ 2,042,322 $ 5,943,178 $ 6,731,462 Esports 180,290 96,144 610,740 120,063 Total Revenues $ 1,223,142 $ 2,138,466 $ 6,553,918 $ 6,851,525 Cost of revenues: Gaming $ 540,519 $ 848,705 $ 2,765,263 $ 2,466,572 Esports 62,337 100,434 707,556 170,678 Total Cost of Revenues $ 602,856 $ 949,139 $ 3,472,819 $ 2,637,250 Gross Profit (Loss) Gaming $ 502,333 $ 1,193,617 $ 3,177,915 $ 4,264,890 Esports 117,953 (4,290 ) (96,816 ) (50,615 ) Total Gross Profit $ 620,286 $ 1,189,327 $ 3,081,099 $ 4,214,275 Loss From Operations Gaming $ (6,515,203 ) $ (6,035,516 ) $ (27,952,962 ) $ (26,945,662 ) Esports (1,037,274 ) (351,981 ) (1,888,280 ) (792,308 ) Total Loss From Operations $ (7,552,477 ) $ (6,387,497 ) $ (29,841,242 ) $ (27,737,970 ) Depreciation and Amortization Gaming $ 84,326 $ 79,394 $ 301,465 $ 176,617 Esports 8,377 2,480 25,034 2,480 Total Depreciation and Amortization $ 92,703 $ 81,874 $ 326,499 $ 179,097 Interest Expense, net: Gaming $ (244,953 ) $ (160,310 ) $ (638,211 ) $ (311,748 ) Esports - - - - Total Interest Expense, net $ (244,953 ) $ (160,310 ) $ (638,211 ) $ (311,748 ) Gain Attributable to Equity Method Investment: Gaming $ - $ - $ - $ 1,370,837 Esports - - - - Total Gain Attributable to Equity Method Investment $ - $ - $ - $ 1,370,837 Other (Expense) Income, Net: Gaming $ (729,158 ) $ (110,192 ) $ (1,496,763 ) $ (27,913 ) Esports (10,127 ) (630 ) (15,215 ) 1,798 Total Other (Expense) Income, net $ (739,285 ) $ (110,822 ) $ (1,511,978 ) $ (26,115 ) Net Loss: Gaming $ (7,489,314 ) $ (6,306,018 ) $ (30,087,936 ) $ (25,914,486 ) Esports (1,047,401 ) (352,611 ) (1,903,495 ) (790,510 ) Total Net Loss $ (8,536,715 ) $ (6,658,629 ) $ (31,991,431 ) $ (26,704,996 ) September 30, December 31, Total assets: Gaming $ 18,461,380 $ 47,511,471 Esports 2,293,972 3,191,732 Total assets $ 20,755,352 $ 50,703,203

BUSINESS ORGANIZATION, NATURE_2

BUSINESS ORGANIZATION, NATURE OF OPERATIONS, RISKS AND UNCERTAINTIES AND BASIS OF PRESENTATION (Details Narrative) - USD ($)		3 Months Ended						9 Months Ended
	Jan. 15, 2021	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Proceeds from Issuance Initial Public Offering	$ 63,100,000
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest		$ 8,536,715	$ 7,487,671	$ 15,967,045	$ 6,658,629	$ 5,960,943	$ 14,085,424	$ 31,991,431	$ 26,704,996
Net Cash Provided by (Used in) Operating Activities								16,924,098	$ 16,723,099
Retained Earnings (Accumulated Deficit)		69,046,523						69,046,523		$ 37,988,326
Right of use assets		469,640						469,640
Leasing Arrangements [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Right of use assets		$ 751,000						$ 751,000

SCHEDULE OF CALCULATION WEIGHTE

SCHEDULE OF CALCULATION WEIGHTED AVERAGE DILUTIVE COMMON SHARES (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Stock options	57,405	57,742	57,405	57,742
Share-Based Payment Arrangement, Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Stock options	57,405	57,742	57,405	57,742

SUMMARY OF SIGNIFICANT ACCOUN_4

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Accounting Policies [Abstract]
Sales returns and price protection reserves	$ 0	$ 60	$ 1,100	$ 300

SCHEDULE OF INTANGIBLE ASSETS (

SCHEDULE OF INTANGIBLE ASSETS (Details)	9 Months Ended
	Sep. 30, 2022 USD ($) $ / shares
Finite-Lived Intangible Assets [Line Items]
Intangible assets, amortization beginning	$ (3,377,206)
Intangible assets, Beginning	20,485,809
Amortization expense	(1,306,997)
Impairment of intangible assets	(4,640,102)
FX translation adjustments	(1,110,405)
Intangible assets, amortization ending	(4,488,408)
Intangible assets, ending	$ 13,428,305
Weighted average remaining amortization | $ / shares
Licensing Agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, net beginning	$ 7,198,363
Intangible assets, amortization beginning	(912,260)
Amortization expense
Impairment of intangible assets
FX translation adjustments
Intangible assets, net ending	7,198,363
Intangible assets, amortization ending	$ (1,087,572)
Weighted average remaining amortization | $ / shares
Licensing Agreements (Indefinite) [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, net beginning	$ 2,810,000
Amortization expense
Impairment of intangible assets	(1,118,209)
FX translation adjustments	(275,948)
Intangible assets, net ending	$ 1,415,843
Weighted average remaining amortization | $ / shares
Software [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, net beginning	$ 10,364,541
Intangible assets, amortization beginning	(1,843,716)
Amortization expense
Impairment of intangible assets	(1,320,993)
FX translation adjustments	(872,874)
Intangible assets, net ending	8,170,674
Intangible assets, amortization ending	$ (2,731,346)
Weighted average remaining amortization | $ / shares	$ 4.6
Distribution Contracts [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, net beginning	$ 560,000
Intangible assets, amortization beginning	(560,000)
Amortization expense
Impairment of intangible assets
FX translation adjustments
Intangible assets, net ending	560,000
Intangible assets, amortization ending	$ (560,000)
Weighted average remaining amortization | $ / shares	$ 5.4
Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, net beginning	$ 2,672,581
Amortization expense
Impairment of intangible assets	(2,200,900)
FX translation adjustments	(124,258)
Intangible assets, net ending	$ 347,423
Weighted average remaining amortization | $ / shares
Noncompete Agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, net beginning	$ 257,530
Intangible assets, amortization beginning	(61,230)
Amortization expense
Impairment of intangible assets
FX translation adjustments	(33,120)
Intangible assets, net ending	224,410
Intangible assets, amortization ending	$ (109,490)
Weighted average remaining amortization | $ / shares	$ 4.5
Accumulated Amortization [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, amortization beginning	$ (3,377,206)
Amortization expense	(1,306,997)
Impairment of intangible assets
FX translation adjustments	195,795
Intangible assets, amortization ending	$ (4,488,408)
Weighted average remaining amortization | $ / shares

SCHEDULE OF ACCUMULATED AMORTIZ

SCHEDULE OF ACCUMULATED AMORTIZATION OF INTANGIBLE ASSETS (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Finite-Lived Intangible Assets [Line Items]
Accumulated amortization, beginning			$ 3,377,206
Amortization expense	$ 400,000	$ 500,000	1,300,000	$ 1,100,000
Accumulated amortization, ending	4,488,408		4,488,408
Licensing Agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Accumulated amortization, beginning			912,260
Amortization expense			175,312
Amortization of intangible assets foreign currency translation adjusments
Accumulated amortization, ending	1,087,572		1,087,572
Software [Member]
Finite-Lived Intangible Assets [Line Items]
Accumulated amortization, beginning			1,843,716
Amortization expense			1,072,168
Amortization of intangible assets foreign currency translation adjusments			(184,538)
Accumulated amortization, ending	2,731,346		2,731,346
Distribution Contracts [Member]
Finite-Lived Intangible Assets [Line Items]
Accumulated amortization, beginning			560,000
Amortization expense
Amortization of intangible assets foreign currency translation adjusments
Accumulated amortization, ending	560,000		560,000
Noncompete Agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Accumulated amortization, beginning			61,230
Amortization expense			59,517
Amortization of intangible assets foreign currency translation adjusments			(11,257)
Accumulated amortization, ending	109,490		109,490
Accumulated Amortization [Member]
Finite-Lived Intangible Assets [Line Items]
Accumulated amortization, beginning			3,377,206
Amortization expense			1,306,997
Amortization of intangible assets foreign currency translation adjusments			(195,795)
Accumulated amortization, ending	$ 4,488,408		$ 4,488,408

SCHEDULE OF ESTIMATED AGGREGATE

SCHEDULE OF ESTIMATED AGGREGATE AMORTIZATION EXPENSE OF INTANGIBLE ASSETS (Details)	Sep. 30, 2022 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2022 (remaining period)	$ 632,147
2023	1,892,641
2024	1,687,137
2025	1,678,365
2026	1,400,729
Thereafter	2,172,544
Estimated aggregate amortization expense	$ 9,463,563

SCHEDULE OF GOODWILL (Details)

SCHEDULE OF GOODWILL (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Goodwill, beginning balance			$ 4,867,465
Goodwill impairment loss			(4,788,268)
Foreign exchange			(79,197)
Goodwill, ending balance
Le Mans Gaming [Member]
Goodwill, beginning balance			4,802,882
Goodwill impairment loss			(4,723,685)
Foreign exchange			(79,197)
Goodwill, ending balance
Esports Licenses [Member]
Goodwill, beginning balance			64,583
Goodwill impairment loss			(64,583)
Foreign exchange
Goodwill, ending balance

INTANGIBLE ASSETS (Details Narr

INTANGIBLE ASSETS (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Indefinite-Lived Intangible Assets [Line Items]
Impairment Loss			$ 4,600,000
Amortization expense	$ 400,000	$ 500,000	1,300,000	$ 1,100,000
Intangible assets	13,428,305		13,428,305		$ 20,485,809
rFactor 2 Trade Name [Member]
Indefinite-Lived Intangible Assets [Line Items]
Impairment Loss			2,200,000
Le Mans Gaming License [Member]
Indefinite-Lived Intangible Assets [Line Items]
Impairment Loss			1,100,000
Finite lived rFactor 2 [Member]
Indefinite-Lived Intangible Assets [Line Items]
Impairment Loss			1,300,000
Non-amortizing Intangible Assets [Member]
Indefinite-Lived Intangible Assets [Line Items]
Intangible assets	$ 3,500,000		3,500,000
Licensing Agreements [Member] | Purchase Commitments [Member]
Indefinite-Lived Intangible Assets [Line Items]
Indefinite-Lived intangible assets acquired			900,000
Licensing Agreements [Member] | Other Noncurrent Liabilities [Member]
Indefinite-Lived Intangible Assets [Line Items]
Indefinite-Lived intangible assets acquired			$ 3,000,000

GOODWILL (Details Narrative)

GOODWILL (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Goodwill and Intangible Assets Disclosure [Abstract]
Impairment loss			$ 4,788,268
Carrying value of goodwill			$ 0

SCHEDULE OF LEASE COST (Details

SCHEDULE OF LEASE COST (Details) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2022
Leases
Short-term operating lease expense	$ 45,419	$ 98,335
Operating lease expense	125,545	322,483
Total lease costs	$ 170,964	$ 420,818

SCHEDULE OF REMAINING LEASE TER

SCHEDULE OF REMAINING LEASE TERMS (Details)	Sep. 30, 2022
Leases
Weighted-average remaining lease term - operating leases (years)	2 years 9 months 18 days
Weighted-average discount rate - operating leases	7.46%

SCHEDULE OF CASH FLOW SUPPLEMEN

SCHEDULE OF CASH FLOW SUPPLEMENTAL (Details)	9 Months Ended
	Sep. 30, 2022 USD ($)
Leases
Cash paid for amounts included in the measurement of operating lease liabilities	$ 385,815
Right of use assets obtained in exchange for new lease obligations	$ 1,086,668

SCHEDULE OF MATURITIES OF LEASE

SCHEDULE OF MATURITIES OF LEASE LIABILITIES (Details)	Sep. 30, 2022 USD ($)
Leases
2022 (remaining period)	$ 67,060
2023	234,007
2024	160,377
2025	26,749
2026	13,374
Thereafter
Total lease payments	501,567
Less effects of imputed interest	(36,336)
Present value of lease liabilities	$ 465,231

LEASES (Details Narrative)

LEASES (Details Narrative) - USD ($)		9 Months Ended
	Feb. 08, 2022	Sep. 30, 2022
Leases
Lease description	The term of this new lease was 5 years, which commenced April 1, 2022 and was scheduled to expire on March 31, 2027, terminable upon 60-days’ written notice, by either party, with no penalty.
Rent paid		$ 22,000

SCHEDULE OF ACCRUED EXPENSES (D

SCHEDULE OF ACCRUED EXPENSES (Details) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Payables and Accruals [Abstract]
Accrued royalties	$ 544,358	$ 1,694,011
Accrued professional fees	231,233	80,909
Accrued consulting fees	115,000	106,006
Accrued development costs	508,298	968,007
Esport prize money	31,250	168,959
Accrued taxes	141,376	31,491
Accrued payroll	134,119	235,224
Deferred revenue	670,293
Loss contingency reserves	1,000,000
Accrued other	173,007	239,664
Total	$ 3,548,934	$ 3,524,271

DUE TO_FROM RELATED PARTIES (De

DUE TO/FROM RELATED PARTIES (Details Narrative) - USD ($)		9 Months Ended
	Apr. 01, 2020	Sep. 30, 2022	Dec. 31, 2021	Nov. 23, 2020
Short-Term Debt [Line Items]
Line of credit		$ 12,000,000
Related party, description		(i) the Company enters into a new financing arrangement (whether debt, equity or otherwise) under which the Company is then able to draw or provides the Company with available cash in excess of amounts required in the Company’s reasonable judgment to run its operations in the ordinary course of business; (ii) the Company generates from operations available cash in excess of amounts required in the Company’s reasonable judgment to run its operations in the ordinary course of business; or (iii) the Company’s independent auditors issue an unqualified opinion on its financial statements and the Company’s repayment of the advances, in whole or in part, would not otherwise cause the independent auditor to issue a going concern qualified opinion. Upon the occurrence of any of the foregoing events, the Company shall prepay on such date principal amount of the September 2022 Cash Advance and other advances under the $12 million Line of Credit then outstanding in an amount equal to such available excess cash or, in the case of (iii) above, the amount that would not cause the Company’s independent auditor to issue a going concern qualified opinion, together with interest accrued but unpaid on the unpaid September 2022 Cash Advance and other advances, which repayment obligation shall continue until all such advances under the $12 million Line of Credit are paid in full. The entire aggregate principal amount of the September 2022 Cash Advance and the other advances under the $12 million Line of Credit, together with interest accrued but unpaid thereon, shall also become immediately and automatically due and payable, and the $12 million Line of Credit shall immediately and automatically terminate, in each case without any action required by Motorsport Network, if (i) the Company experience an event of default under any other debt instrument, agreement or arrangement; or (ii) any final judgment or final judgments for the payment of money in excess (net of amounts covered by third-party insurance with insurance carriers who have not disclaimed liability with respect to such judgment or judgments) of $500,000 or its foreign currency equivalent is entered against the Company or any subsidiary and is not discharged and either (a) an enforcement proceeding has been commenced by any creditor upon such judgment or decree or (b) there is a period of 60 days following the entry of such judgment or decree during which such judgment or decree is not discharged, waived or the execution thereof stayed and, in the case of (b), such default continues for 60 consecutive days.
Line of credit		$ 3,000,000
Due to related parties		3,122,571	$ 119,015
Support Agreement [Member]
Short-Term Debt [Line Items]
Line of credit		3,000,000
Promissory Note [Member]
Short-Term Debt [Line Items]
Line of credit	$ 12,000,000	12,000,000		$ 12,000,000
Line of credit, maximum borrowing capacity		12,000,000
Line of credit interest rate	10%
Due to related parties		3,100,000
Due from related parties		100,000
Payment to related parties		$ 100,000
Promissory Note [Member] | Maximum [Member]
Short-Term Debt [Line Items]
Line of credit, maximum borrowing capacity	$ 10,000,000			12,000,000
Promissory Note [Member] | Minimum [Member]
Short-Term Debt [Line Items]
Line of credit, maximum borrowing capacity				$ 10,000,000

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details Narrative) $ in Millions	9 Months Ended
	Sep. 30, 2022 USD ($)
Related Party Transaction [Line Items]
Line of credit	$ 12
Motorsport Network [Member]
Related Party Transaction [Line Items]
Incurred expenses	0.1
Line of credit	$ 12

STOCKHOLDERS_ EQUITY (Details N

STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($)		9 Months Ended
	Jan. 15, 2021	Sep. 30, 2022	Dec. 31, 2021
Class of Stock [Line Items]
Proceeds from issuance initial public offering	$ 63,100,000
704 Games Company [Member]
Class of Stock [Line Items]
Warrants outstanding		4,000	4,000
Warrants exercise price		$ 93.03	$ 93.03
704 Games Company [Member] | Warrant [Member]
Class of Stock [Line Items]
Remaining life of years		3 years
Common Class A [Member] | IPO [Member]
Class of Stock [Line Items]
Stock issued during period, shares, new issues	345,000
Shares issued, price per share	$ 200
Proceeds from issuance initial public offering	$ 63,073,783
Common Class A [Member] | IPO [Member] | Additional Shares for Underwriters [Member]
Class of Stock [Line Items]
Stock issued during period, shares, new issues	45,000

SCHEDULE OF STOCK-BASED COMPENS

SCHEDULE OF STOCK-BASED COMPENSATION OPTIONS ACTIVITY (Details)	9 Months Ended
	Sep. 30, 2022 USD ($) shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Vesting term, granted	2 years 6 months
MSGM 2021 Stock Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of options, outstanding, beginning	29,740
Number of options, forfeited, cancelled or expired	(34,981)
Number of options, outstanding, ending	57,405
MSGM 2021 Stock Plan [Member] | Employees [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of options, granted	56,935
Vesting term, granted	3 years
Contractual term, granted	10 years
Grant date fair value | $	$ 1,143,500
MSGM 2021 Stock Plan [Member] | Board of Directors [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of options, granted	5,711
Vesting term, granted	1 year
Contractual term, granted	10 years
Grant date fair value | $	$ 120,630

SCHEDULE OF STOCK BASED COMPENS

SCHEDULE OF STOCK BASED COMPENSATION EXPENSE (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	$ 228,712	$ 292,173	$ 820,315	$ 9,485,363
General and Administrative Expense [Member]
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	223,953	285,318	682,276	9,264,583
Selling and Marketing Expense [Member]
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	1,371	3,793	80,210	123,139
Research and Development Expense [Member]
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	$ 3,388	$ 3,062	$ 57,829	$ 97,641

SHARE-BASED COMPENSATION (Detai

SHARE-BASED COMPENSATION (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2022	Dec. 31, 2021	Jan. 12, 2021
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Compensation expense period	2 years 6 months
Unrecognized stock based compensation expense	$ 1,100,000
MSGM 2021 Stock Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Compensation expense period	10 years
MSGM 2021 Stock Plan [Member] | Board of Directors [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Compensation expense period	1 year
Number of options, granted	5,711
Grant date fair value	$ 120,630
MSGM 2021 Stock Plan [Member] | Board of Directors [Member] | Restricted Stock [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of options, granted	3,769
Common Class A [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Common stock, shares authorized	100,000,000	100,000,000
Shares available for issuance	42,595
Common Class A [Member] | MSGM 2021 Stock Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Common stock, shares authorized			100,000

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)					3 Months Ended	9 Months Ended
	Jul. 21, 2022	Apr. 30, 2022	Apr. 22, 2022	Aug. 11, 2020	Sep. 30, 2022	Sep. 30, 2022
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Loss on contingency						$ 1,000,000
Other commitment					$ 35,500,000	35,500,000
Payment of royalty						3,550,000
License Agreement [Member] | Epic Games International [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
License fee royalty percentage				5%
Proceeds from royalty					$ 16,000	$ 100,000
Letter Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Deferred purchase price installment			$ 3,200,000
Debt instrument, description	Pursuant to the Second Amendment, the deferred purchase price installment that was otherwise due to be paid by the Company within 90 days of the date of the $1 million payment was reduced from $2.2 million to $1.9 million as a result of the Company’s pay down of $0.3 million in July 2022. Under the Second Amendment, the remaining balance of $1.9 million plus interest thereon at 15% per annum, is to be paid as follows: (i) $100,000 monthly payments from August 15, 2022 through December of 2022; and (ii) $150,000 monthly payments from January 15, 2023 until the entire unpaid $1.9 million and accrued and unpaid interest thereon are paid in full. Further, pursuant to the Second Amendment, secured obligations under the deed of pledge have been correspondingly reduced from $2.2 million to $1.9 million		Pursuant to the Amendment, the deferred installment amount due to be paid under the SPA by the Company on the first anniversary of closing was reduced from $3.2 million to $1 million with the remaining $2.2 million further deferred and to be paid within 90 days of the date that the Company made the $1 million payment. Further, pursuant to the Amendment, secured obligations under the deed of pledge were correspondingly reduced from $3.2 million to $2.2 million following the finalization of an amendment to the deed of pledge on May 12, 2022
Repayments of debt		$ 1	$ 1,000,000

SCHEDULE OF CONCENTRATIONS (Det

SCHEDULE OF CONCENTRATIONS (Details)	3 Months Ended		9 Months Ended			12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022		Sep. 30, 2021	Dec. 31, 2021
Revenue Benchmark [Member] | Supplier Concentration Risk [Member] | Supplier A [Member]
Concentration Risk [Line Items]
Concentration risk percentage		24.30%	16.10%		32.20%
Revenue Benchmark [Member] | Supplier Concentration Risk [Member] | Supplier B [Member]
Concentration Risk [Line Items]
Concentration risk percentage		50.20%		[1]	39.40%
Revenue Benchmark [Member] | Supplier Concentration Risk [Member] | Supplier C [Member]
Concentration Risk [Line Items]
Concentration risk percentage			18.89%	[1]
Revenue Benchmark [Member] | Supplier Concentration Risk [Member] | Supplier [Member]
Concentration Risk [Line Items]
Concentration risk percentage	0%	74.50%	34.99%		71.60%
Customer B [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration risk percentage	39.92%	21.70%	26.75%		28.20%
Customer B [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration risk percentage			14.14%			19.10%
Customer C [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration risk percentage		22%	21.87%		18.70%
Customer C [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration risk percentage			27.38%
Customer D [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration risk percentage	39.66%	41%	23%		38.80%
Customer [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration risk percentage	79.58%	84.70%	71.62%		85.70%
Customer [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration risk percentage			80.04%			71.02%
Customer A [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration risk percentage						51.92%
Customer E [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration risk percentage			17.41%
Customer F [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration risk percentage			21.11%
[1]Less than 10%.

SCHEDULE OF SEGMENT REPORTING I

SCHEDULE OF SEGMENT REPORTING INFORMATION (Details) - USD ($)		3 Months Ended						9 Months Ended
		Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Revenue from External Customer [Line Items]
Total Revenues		$ 1,223,142			$ 2,138,466			$ 6,553,918	$ 6,851,525
Total Cost of Revenues	[1]	602,856			949,139			3,472,819	2,637,250
Total Gross Profit		620,286			1,189,327			3,081,099	4,214,275
Total Loss From Operations		(7,552,477)			(6,387,497)			(29,841,242)	(27,737,970)
Total Depreciation and Amortization		92,703			81,874			326,499	179,097
Total Interest Expense, net		(244,953)			(160,310)			(638,211)	(311,748)
Total Gain Attributable to Equity Method Investment									1,370,837
Total Other (Expense) Income, net		(739,285)			(110,822)			(1,511,978)	(26,115)
Total Net Loss		(8,536,715)	$ (7,487,671)	$ (15,967,045)	(6,658,629)	$ (5,960,943)	$ (14,085,424)	(31,991,431)	(26,704,996)
Total assets		20,755,352						20,755,352		$ 50,703,203
Gaming [Member]
Revenue from External Customer [Line Items]
Total Revenues		1,042,852			2,042,322			5,943,178	6,731,462
Total Cost of Revenues		540,519			848,705			2,765,263	2,466,572
Total Gross Profit		502,333			1,193,617			3,177,915	4,264,890
Total Loss From Operations		(6,515,203)			(6,035,516)			(27,952,962)	(26,945,662)
Total Depreciation and Amortization		84,326			79,394			301,465	176,617
Total Interest Expense, net		(244,953)			(160,310)			(638,211)	(311,748)
Total Gain Attributable to Equity Method Investment									1,370,837
Total Other (Expense) Income, net		(729,158)			(110,192)			(1,496,763)	(27,913)
Total Net Loss		(7,489,314)			(6,306,018)			(30,087,936)	(25,914,486)
Total assets		18,461,380						18,461,380		47,511,471
Esports [Member]
Revenue from External Customer [Line Items]
Total Revenues		180,290			96,144			610,740	120,063
Total Cost of Revenues		62,337			100,434			707,556	170,678
Total Gross Profit		117,953			(4,290)			(96,816)	(50,615)
Total Loss From Operations		(1,037,274)			(351,981)			(1,888,280)	(792,308)
Total Depreciation and Amortization		8,377			2,480			25,034	2,480
Total Interest Expense, net
Total Gain Attributable to Equity Method Investment
Total Other (Expense) Income, net		(10,127)			(630)			(15,215)	1,798
Total Net Loss		(1,047,401)			$ (352,611)			(1,903,495)	$ (790,510)
Total assets		$ 2,293,972						$ 2,293,972		$ 3,191,732
[1]Includes related party costs of $ 0 0 6,228 0

SEGMENT REPORTING (Details Narr

SEGMENT REPORTING (Details Narrative) - Segment	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Segment Reporting [Abstract]
Number of reportable segments	2	2	2	2

SUBSEQUENT EVENTS (Details Narr

SUBSEQUENT EVENTS (Details Narrative) - USD ($)		9 Months Ended
	Oct. 14, 2022	Sep. 30, 2022
November 10, 2022 [Member]
Subsequent Event [Line Items]
Stock split description		the Company amended its certificate of incorporation to effectuate a reverse split of the Company’s issued and outstanding shares of Class A common stock and Class B common stock at a ratio of 1-for-10.
Subsequent Event [Member] | Dmitry Kozko [Member]
Subsequent Event [Line Items]
Percentage of base salaries	35%
Payments to employees	$ 334,750