Motorsport Games Announces Debt-for-Equity Exchange with Motorsport Network
January 30 2023 - 03:50PM
GlobeNewswire Inc.
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Motorsport Games Inc. (NASDAQ: MSGM) (“Motorsport Games” or the “Company”) today announced that the Company has entered into a debt-for-equity exchange agreement (the “Agreement”) with its majority stockholder, Motorsport Network, LLC (“Motorsport Network”), to repay $1,000,000 in debt (including principal and accrued and not yet paid interest) of the Company under its $12 million line of credit with Motorsport Network.
Under the Agreement, for a period of 60 days from the closing of the transactions contemplated under the Agreement, the Company agreed to file a registration statement with the Securities and Exchange Commission (“SEC”) upon Motorsport Network’s demand in order to register the resale of the shares acquired by Motorsport Network under the Agreement, subject to the terms and conditions of the Agreement. The Agreement also granted certain piggyback registration rights to Motorsport Network.
“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.”
The foregoing summary of the Agreement is incomplete, and further details relating to the Agreement, including additional terms and conditions, and this transaction will be contained in the Current Report on Form 8-K the Company intends to file with the SEC later today.
About Motorsport Games:
Motorsport Games, a Motorsport Network company, is a leading racing game developer, publisher and esports ecosystem provider of official motorsport racing series throughout the world. Combining innovative and engaging video games with exciting esports competitions and content for racing fans and gamers, Motorsport Games strives to make the joy of racing accessible to everyone. The Company is the officially licensed video game developer and publisher for iconic motorsport racing series across PC, PlayStation, Xbox, Nintendo Switch and mobile, including NASCAR, INDYCAR, 24 Hours of Le Mans and the British Touring Car Championship (“BTCC”), as well as the industry leading rFactor 2 and KartKraft simulations. rFactor 2 also serves as the official sim racing platform of Formula E, while also powering F1 Arcade through a partnership with Kindred Concepts. Motorsport Games is an award-winning esports partner of choice for 24 Hours of Le Mans, Formula E, BTCC, the FIA World Rallycross Championship and the eNASCAR Heat Pro League, among others. Motorsport Games is building a virtual racing ecosystem where each product drives excitement, every esports event is an adventure and every story inspires.
Forward Looking Statements:
Certain statements in this press release which are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are provided pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements in this press release that are not statements of historical fact may be deemed forward-looking statements. Words such as “continue,” “will,” “may,” “could,” “should,” “expect,” “expected,” “plans,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” and similar expressions are intended to identify such forward-looking statements. All forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, many of which are generally outside the control of Motorsport Games and are difficult to predict. Examples of such risks and uncertainties include, without limitation, issuance of shares of Class A common stock under the Agreement impacting the value of the Company’s