v3.26.1
SHARE-BASED COMPENSATION (Tables)
6 Months Ended
Jun. 30, 2026
Share-Based Payment Arrangement [Abstract]  
SCHEDULE OF FAIR VALUE ASSUMPTION

The following table presents the weighted-average assumptions, weighted average grant date fair value, and the range of expected price volatility used in determining the fair value of the non-employee director liability-classified awards as of June 30, 2026 and December 31, 2025:

 

  

As of

June 30, 2026

   

As of

December 31, 2025

 
Risk-free interest rate   4.19%     3.73 %
Expected volatility   90 - 160%     90 - 160 %
Weighted-average volatility   112%     115 %
Expected term   4 - 5.3 years      4 - 5.48 years  
Expected dividends   None      None  
Weighted-average grant date fair value per share  $3.58    $ 2.73  
SCHEDULE OF FAIR VALUE, ASSETS AND LIABILITIES MEASURED ON RECURRING BASIS

The following table presents the Company’s liabilities measured at fair value on a recurring basis as of June 30, 2026 and December 31, 2025:

 

            Total Fair Value 
   Fair value measurements at reporting date using: 
  

Quoted prices in active markets for identical liabilities

(Level 1)

  

Significant other observable inputs

(Level 2)

  

Significant unobservable inputs

(Level 3)

   Total Fair Value 
As of June 30, 2026:                    
Non-employee director compensation awards  $        -   $         -   $1,201,995   $1,201,995 
                     
As of December 31, 2025:                    
Non-employee director compensation awards  $-   $-   $789,320   $789,320 
SCHEULE OF RECONCILIATION OF LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS

A reconciliation of liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) is as follows:

 

      
Balance at January 1, 2026  $789,320 
Non-cash director compensation (see Stock-Based Compensation below)   412,675 
Balance at June 30, 2026  $1,201,995 
SCHEDULE OF STOCK BASED COMPENSATION EXPENSE

The following table summarizes stock-based compensation expense resulting from awards included in the Company’s condensed consolidated statements of operations:

 

             
   For the Three Months Ended
June 30,
  

For the Six Months Ended

June 30,

 
   2026   2025   2026   2025 
General and Administrative  $37,644   $-   $412,675   $- 
Sales and Marketing   -    -    -    - 
Development   -    -    -    - 
Stock-based compensation expense  $37,644   $-   $412,675   $- 
SCHEDULE OF CALCULATED BASIC AND DILUTED NET INCOME PER COMMON SHARE

For the three and six months ended June 30, 2026 and 2025, respectively, the Company calculated basic and diluted net income per Class A common share as follows:

 

       
   For the Three Months Ended June 30, 
   2026   2025 
Numerator:        
Net income attributable to Motorsport Games Inc.  $401,463   $4,258,400 
           
Denominator:          
Weighted average Class A common shares outstanding – basic (1)   4,760,598    5,206,536 
           
Effects of dilutive securities:          
Assumed exercise of stock options, treasury stock method   31,668    - 
Assumed exercise of warrants, treasury stock method   462,747    - 
Weighted average dilutive potential common shares   494,415    - 
           
Weighted average Class A common shares outstanding - diluted   5,255,013    5,206,536 
           
Net income per Class A common share - basic  $0.08   $0.82 
Net income per Class A common share - diluted  $0.08   $0.82 

 

       
   For the Six Months Ended June 30, 
   2026   2025 
Numerator:        
Net income attributable to Motorsport Games Inc.  $717,290   $5,299,458 
           
Denominator:          
Weighted average Class A common shares outstanding – basic (1)   5,106,520    4,195,047 
           
Effects of dilutive securities:          
Assumed exercise of stock options, treasury stock method   29,100    - 
Assumed exercise of warrants, treasury stock method   435,333    - 
Weighted average dilutive potential common shares   464,433    - 
           
Weighted average Class A common shares outstanding - diluted   5,570,953    4,195,047 
           
Net income per Class A common share - basic  $0.14   $1.26 
Net income per Class A common share - diluted  $0.13   $1.26 

 

  (1) Includes the weighted average number of 377,836 shares issuable upon the exercise of pre-funded warrants issued on April 11, 2025.
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. 

 

             
  

For the Three Months Ended

June 30,

  

For the Six Months Ended

June 30,

 
   2026   2025   2026   2025 
Stock options (1)   40,626    96,828    40,626    96,828 
Warrants (2)   33,574    33,574    33,574    33,574 
Dilutive securities   74,200    130,402    74,200    130,402 

 

(1) Represents stock options excluded from the computation of diluted net income per share because their inclusion would have been anti-dilutive. The weighted average exercise price for anti-dilutive options was $30.89 for each of the three and six months ended June 30, 2026, respectively.
   
(2) Represents warrants excluded from the computation of diluted net income per share because their inclusion would have been anti-dilutive and excludes pre-funded warrants which are included in basic weighted average shares outstanding. The exercise price for the anti-dilutive warrants range from $21.74 to $29.38.