Motorsport Games is angling to become the de-facto hub for racing esports and licensed simulators based on real-world racing series, but its efforts to grow have met considerable resistance in 2022. Months after the company’s stock price dropped so low it was in danger of being kicked off the Nasdaq stock exchange, Insider Gaming reported Monday that its entire board of directors has been ousted.
The stumbling block was reportedly disagreement over how the NASCAR, IndyCar and 24 Hours of Le Mans license holder might be able to raise funds. GamesIndustry.biz offers more insight:
An SEC filing from the studio states that on November 9, independent board members Peter Moore, Neil Anderson, and Francesco Piovanetti all tendered their resignations over disputes with Motorsport Games majority shareholder Motorsport Network about proposals for ways the company could raise funds.
Motorsports Network had asked the trio to resign over the dispute two days prior.
Motorsports Network president James Allen also resigned from his position on the board “so that, given the resignations of the above directors, a new board can be appointed.”
CEO Dmitry Kozko and CFO John Delta remain on the board, with Delta leaving his previous post to assume one of the vacant independent director spots. This, too, leaves the company out of step with Nasdaq regulations, which state that a majority of the board must be occupied by independent directors. It’ll have 45 days to set that right.
Kozko attempted to soothe concerns in an internal email seen by Insider Gaming, though at least one anonymous employee quoted by the website remained skeptical:
One employee said on the matter “Well it’s just the usual bullshit of everything is fine because he just wants money and has done these things twice before.”
In June, Motorsport Games was served a letter from the Securities and Exchange Commission ordering that it would have to lift its trading price back over $1 per share for 10 consecutive days before December 5 if it didn’t want to be booted off Nasdaq. The company was able to resolve that with a 1-for-10 reverse stock split last week, leaving it at $6.71 per share at the time of writing. However, the press release announcing the split raised another concern: Motorsport Games is no longer “in compliance with the Nasdaq Listing Rules requiring minimum of 500,000 publicly held shares.”
And that’s to say nothing of the company’s own warning in April that it didn’t have enough cash on hand to survive 12 months, and the awful state of NASCAR 21: Ignition upon its release, which has reportedly prompted NASCAR to find any way it can out of its exclusivity deal with the publisher. How all of this affects Motorsport Games’ titles in development — like its officially licensed IndyCar, British Touring Car and 24 Hours of Le Mans games — remains to be seen. The IndyCar effort had been targeting a 2023 launch, but considering everything facing the publisher, that ETA hardly seems definite now.