v3.26.1
INTANGIBLE ASSETS
 6 Months Ended
Jun. 30, 2026
Intangible Asset, Goodwill and Other [Abstract]  
INTANGIBLE ASSETS

NOTE 3 – INTANGIBLE ASSETS

 

Licensing Agreements

 

In March 2019, the Company entered into an agreement to facilitate the Le Mans Esports Series as part of a joint venture with Automobile Club de l’Ouest (“ACO”), the organizer of the 24 Hours of Le Mans endurance race. Through the Company’s ownership interest in this joint venture, which was increased to 51% from 45% in January 2021, the Company secured the rights to be the exclusive video game developer and publisher for the 24 Hours of Le Mans race and the FIA World Endurance Championship (the “WEC”), which the 24 Hours of Le Mans race is a part of, for a ten-year period, and is automatically renewable for an additional ten years. The Company consolidates its interest in the joint venture with the ACO. In addition, through this joint venture with ACO, the Company has the right to create and organize esports leagues and events for the Le Mans Esports Series. The Company acquired a video gaming license (the “Le Mans Gaming License”) and an esports license related to its ownership interest in this joint venture with the ACO.

 

Intangible Assets

 

The following is a summary of intangible assets as of June 30, 2026:

  

  

Licensing Agreements

 (Finite)

  

Software

(Finite)

  

Trade Names

(Indefinite)

  

Accumulated

Amortization

   Total 
Balance as of January 1, 2026  $1,663,507   $7,449,032   $219,516   $(5,560,512)  $3,771,543 
Amortization expense   -    -    -    (399,271)   (399,271)
Additions   -    1,010,149    -    -    1,010,149 
Impairment (1)   -    -    (27,928)   -    (27,928)
Foreign currency translation adjustments   (48,451)   (187,542)   83    153,399    (82,511)
Balance as of June 30, 2026  $1,615,056   $8,271,639   $191,671   $(5,806,384)  $4,271,982 
                          
Weighted average remaining amortization period at June 30, 2026   14.7    3.4                

 

  (1) The impairment relates to a web domain no longer used.

 

Accumulated amortization of intangible assets consists of the following:

 

  

Licensing

Agreements

(Finite)

  

Software

(Finite)

  

Accumulated

 Amortization

 
Balance as of January 1, 2026  $415,879   $5,144,633   $5,560,512 
Amortization expense   41,264    358,007    399,271 
Foreign currency translation adjustment   (11,129)   (142,270)   (153,399)
Balance as of June 30, 2026  $446,014   $5,360,370   $5,806,384 

 

Estimated aggregate amortization expense of intangible assets for the next five years and thereafter is as follows:

 

For the Years Ending December 31,  Total 
2026 (remaining period)  $408,659 
2027   938,525 
2028   927,404 
2029   512,319 
2030   388,074 
Thereafter   905,330 
Estimated aggregate amortization expense  $4,080,311 

 

The Company has updated the useful life estimate for its software technology prospectively effective January 1, 2026, which will be amortized over a period of five years to account for its continued use. The effect of this change was a reduction in amortization expense of approximately $0.2 million and $0.4 million during the three and six months ended June 30, 2026, respectively, and is expected to reduce amortization expense for 2026 by approximately $0.6 million.

 

Amortization expense related to intangible assets was approximately $0.2 million for each of the three months ended June 30, 2026 and 2025, and approximately $0.4 million and $0.5 million for the six months ended June 30, 2026 and 2025, respectively.

 

 

Motorsport Games Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements