Following the exit of Motorsport Games’ board in November 2022, a new lineup has been selected and approved by the New York-based stock exchange Nasdaq.
Without a board, the company would no longer fit the Nasdaq requirements and had 45 days to submit a new plan in order to remain listed.
However, as of 30th January 2023, the online securities marketplace notified the racing game developer that it has regained full compliance with the Nasdaq Listing Rules.
Three independent directors needed to be appointed, with John Delta joined by Andrew Jacobson in December and Nav Sunner in January.
Sunner is a video games industry legal representative, who amongst other positions, was a former Head of Legal at Codemasters and is currently the CEO and founder of video game consultancy firm Navatron.
Meanwhile, Jacobson comes from a digital media sales and marketing background and currently works for the global advertising business Epsilon.
In other news, on 30th January 2023, Motorsport Games’ majority stockholder, Motorsport Network – the media conglomerate behind Autosport, Motorsport.com, Motorsport Images, Motor1 and more – has agreed on terms to debt-for-equity exchange.
The game development company has a $12 million line of credit with Motorsport Network. In September 2022, it received a $3 million cash advance through this agreement.
Now, $1 million of debt looks set to be exchanged for equity in the company instead of being paid back as cash.
“This debt exchange benefits our balance sheet, allows us to pay less interest expense and will help Motorsport Games to pursue product development and growth opportunities,” said Dmitry Kozko, CEO and Executive Chairman of Motorsport Games.
“This debt exchange also signals the ongoing confidence that our majority shareholder, Motorsport Network, has in Motorsport Games.”
183,020 more shares for sale
To round out the financial news for Motorsport Games, 183,020 of its Class A common stock – priced at $21.40 per share – have been made available on 1st February 2023.
The closing of the sale is expected to be by the 3rd, with the aim of raising $3.9 million before fees and expenses. These will be spent on the development of multiple games, working capital and general corporate purposes.
Furthermore, a settlement agreement has been reached on 11th January 2023 between Motorsport Games and 704Games, the initial development company for NASCAR titles, wholly acquired by the former in April 2021.
These announcements follow December’s news of potential fresh investment from Alumni Capital LP, starting with $2 million and with the option of a total of $10 million before the end of 2023.
In its most recent earnings call covering Q3 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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