NOTE 6 – RELATED PARTY TRANSACTIONS

In addition to the $12 million Line of Credit, which is discussed in Note 5 – Related Party Loans, from time to time, Motorsport Network, and other related entities pay for Company expenses on the Company’s behalf. During the six months ended June 30, 2023 and 2022, the Company incurred expenses of approximately $0.2 million and $0.1 million, respectively, that were paid by Motorsport Network on its behalf and are reimbursable by the Company to Motorsport Network. During the six months ended June 30, 2023 and 2022, approximately $1 million and $0.1 million, respectively, was paid to related parties in settlement of related party payables.

The Company has regular related party receivables and payables outstanding as of June 30, 2023 and December 31, 2022. Specifically, the Company owed approximately $30,000 to its related parties as a related party payable and was due approximately $0.1 million from its related parties as a related party receivable as of June 30, 2023. As of December 31, 2022, the Company owed approximately $0.8 million to its related parties as a related party payable and was due approximately $0.2 million from its related parties as a related party receivable.

Backoffice Services Agreement

On March 23, 2023 (but effective as of January 1, 2023), the Company entered into a new Backoffice Services Agreement with Motorsport Network (the “Backoffice Services Agreement”), following the expiration of the Company’s prior services agreement with Motorsport Network. Pursuant to the Backoffice Services Agreement, Motorsport Network will provide accounting, payroll and benefits, human resources and other back-office services on a full-time basis to support the Company’s business functions. The term of the Backoffice Services Agreement is 12 months from the effective date. The term will automatically renew for successive 12-month terms unless either party provides written notice of nonrenewal at least 30 days prior to the end of the then current term. The Backoffice Services Agreement may be terminated by either party at any time with 60 days prior notice. Pursuant to the Backoffice Services Agreement, the Company is required to pay a monthly fee to Motorsport Network of $17,500. For the six months ended June 30, 2023, the Company incurred $105,000 in fees in connection with the Backoffice Services Agreement, and $52,500 for the three months ended June 30, 2023, presented in general and administrative expenses with the condensed consolidated statements of operations.