Motorsport Games has made three key financial decisions this week, as the Nasdaq has ratified a new board, the Motorsport Network reaches an agreement and more shares are available.
After the departure of the board of Motorsport Games in November 2022, the New York-based Nasdaq stock exchange selected and approved a new line.
Without a board of directors, the company would no longer meet Nasdaq’s requirements and had 45 days to submit a new plan to remain listed.
However, as of January 30, 2023, the online stock exchange notified the developer of the racing game that it had regained full compliance with the Nasdaq Listing Rules.
Three independent directors needed to be appointed, joined by John Delta, Andrew Jacobson in December and Nav Sunner in January.
Sunner is a legal representative for the video game industry and, among other positions, was the legal director of Codemasters and is currently the CEO and founder of the video game consultancy Navatron.
Meanwhile, Jacobson comes from a background in digital media sales and marketing and currently works for the global advertising business Epsilon.
In other news, on January 30, 2023, Motorsport Games’ majority shareholder, Motorsport Network, the media conglomerate behind Autosport, Motorsport.com, Motorsport Images, Motor1 and more, agreed to the terms of the debt-for-equity swap.
The game development company has a $12 million credit line with Motorsport Network. In September 2022, he received a cash advance of $3 million through this agreement.
Now, it looks like $1 million of debt will be exchanged for shares in the company instead of being paid back in cash.
“This debt swap benefits our balance sheet, allows us to pay less interest expense and will help Motorsport Games pursue opportunities for growth and product development,” said Dmitry Kozko, CEO and CEO of Motorsport Games.
“This debt exchange also indicates the continued confidence that our majority shareholder, Motorsport Network, has in Motorsport Games.”
183,020 more shares for sale
To complete Motorsport Games’ financial news, 183,020 of its Class A common shares were made available on February 1, 2023, priced at $21.40 per share.
The sale is expected to close on the 3rd, with the goal of raising $3.9 million before fees and expenses. These will be spent on multi-game development, working capital, and general corporate purposes.
Additionally, on January 11, 2023, a settlement agreement was reached between Motorsport Games and 704Games, the initial development company for NASCAR titles, fully acquired by the former in April 2021.
These announcements follow December news of potential new investments from Alumni Capital LP, starting at $2 million with an option for a total of $10 million before the end of 2023.
In its most recent earnings call covering the third quarter of 2022, the company’s net loss was $8.5 million and its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) loss was $6. .5 million.
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