Business
Motorsport Games Announces Transformative 2022 Restructuring Program, Financing Commitment and Plans for Reverse Stock Split
2022 Restructuring Program designed to improve Profitability and Cash Flow – Expected to generate approximately $4 million in Annualized Cost Reductions by
About this update from Motorsport Games Inc.
[{"type":"text","content":"2022 Restructuring Program designed to improve Profitability and Cash Flow – Expected to generate approximately $4 million in Annualized Cost Reductions by the end of 2023 Financing Commitment will Improve Capital Structure and Deliver New Funding for the Business Planned Reverse Stock Split Expected to Allow Motorsport Games to Re-gain Compliance with NASDAQ’s Continued Listing Standards MIAMI, Sept. 08, 2022 (GLOBE NEWSWIRE) -- Motorsport Games Inc. (NASDAQ:MSGM) (“Motorsport Games” or the “Company”) today announced several important steps forward in strengthening the Company’s business, capital structure and foundation for achieving future growth. First, the Company executed a Support Agreement with its majority stockholder, Motorsport Network, LLC (“Motorsport Network”), pursuant to which Motorsport Network recently paid a $3 million cash advance to Motorsport Games under the terms of the parties’ pre-existing line of credit. Second, the Company announced a new organizational restructuring program (the “2022 Restructuring Program”) that is expected to generate material annualized cost reductions of approximately $4 million by the end of 2023. The goal of the 2022 Restructuring Program is to build a stronger global business operation, enhance the Company’s cost efficiency and improve the Company’s operating margins. In an effort to re-gain compliance with NASDAQ’s continued listing standards, the Company also announced its plans to effect a 1-for-10 reverse stock split during the fourth quarter of 2022, following stockholder approval. Motorsport Network agreed to exercise its combined 94% voting power to support the reverse stock split at a special meeting expected to be held shortly. Dmitry Kozko, the Company’s CEO, stated, \"Today’s announcement represents an important, necessary, and logical next step forward for Motorsport Games. The financing commitment and the launch of the new restructuring program represent our plans to optimize our business for the future and create a more optimal business structure that is designed to achieve success in terms of long-term profitability. The 2022 Restructuring Program, which we are implementing immediately, is expected to create a stronger global business operating model, enhance cost efficiency and improve profit margins to drive growth in operating income and Adjusted EBITDA. With ...