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Motorsport Games to Increase its Ownership Interest in 704 Games
On Per Share Basis, Not Meaningful This Year, Then Accretive MIAMI, March 12, 2021 (GLOBE NEWSWIRE) -- Motorsport Games Inc. (NASDAQ: MSGM) (“Motorsport
About this update from Motorsport Games Inc.
[{"type":"text","content":"On Per Share Basis, Not Meaningful This Year, Then Accretive\nMIAMI, March 12, 2021 (GLOBE NEWSWIRE) -- Motorsport Games Inc. (NASDAQ: MSGM) (“Motorsport Games”), a leading racing game developer, publisher and esports ecosystem provider of official motorsport racing series throughout the world, announced today that it has entered into an agreement with PlayFast Games, LLC, a minority stockholder in 704Games Company, to acquire PlayFast Games LLC’s entire ownership in 704Games Company. While expected to be accretive in future years to the net (loss) income per share of Motorsport Games on a per share basis, the transaction is not expected to have any meaningful per share impact to Motorsport Games this year. However, beginning in 2022, the transaction is expected to be accretive to the net (loss) income per share of Motorsport Games. The transaction will also completely settle and release, without admitting fault or liability by any party, all claims that PlayFast, as a minority stockholder of 704Games, could allege or assert against Motorsport Games. Details of the transaction include: Motorsport Games intends to acquire the 30,903 shares of common stock of 704Games owned by PlayFast, which represents approximately 7.6% of the outstanding common stock of 704Games, in exchange for 366,541 newly issued shares of Class A common stock of Motorsport Games (representing approximately 3.4% of the currently outstanding shares); andcash in an amount to be determined based on the share price of Motorsport Games over the last ten trading days of this month. The total transaction with PlayFast for cash and shares is valued at approximately $10.75 million, based on the closing price on Thursday, March 11, 2021.The transaction is subject to customary conditions to closing and is expected to be completed on April 1, 2021.Upon closing of the transaction, Motorsport Games would increase its ownership interest in 704Games from approximately 82.2% to 89.9%. Brian France, the former CEO and Chairman of NASCAR and one of the principal investors in PlayFast commented as following: “As an investor in 704Games prior to Motorsport Games acquiring over 50% of 704Games in 2018, it is evident to me that Motorsport Games’ involvement has substantially improved all aspects of 704Games. Without a doubt, they have added substantial strategic and financial valu...