Motorsport Games Secures $3.0M Revolving Credit Facility from Citibank
MSGM has more than doubled off its 52-week low of $0.731.
Summary
Motorsport Games Inc. entered into a business loan agreement with Citibank, N.A. for a $3.0 million revolving line of credit, secured by substantially all company assets and subject to financial covenants.
Key Events · Financing and Capital Events · MSGM
-
Revolving Credit Facility Secured
Motorsport Games Inc. entered into a business loan agreement with Citibank, N.A. for a revolving line of credit of up to $3.0 million, effective February 20, 2026.
-
Key Terms and Covenants
The credit facility carries an interest rate of Adjusted Term SOFR plus 2.250% (with a 0.75% floor) and includes financial covenants requiring a Fixed Charge Coverage Ratio above 1.200 to 1.000 and a Cash Flow Leverage Ratio not exceeding 2.500 to 1.000.
-
Asset Lien Granted
The company granted Citibank a lien on substantially all of its assets as security for the revolving line of credit.
-
Maturity and Default Conditions
The promissory note has a stated maturity date of February 20, 2027, and includes a provision where a change in ownership of 25% or more of the common stock constitutes an event of default.
Analysis · MSGM · Technology
Motorsport Games Inc. has secured a $3.0 million revolving line of credit, a significant financing event for a company with a market capitalization of approximately $21 million. This facility provides crucial liquidity and working capital, extending the company's financial runway. However, the agreement comes with restrictive terms, including a lien on substantially all of the company's assets and financial covenants such as maintaining a Fixed Charge Coverage Ratio above 1.200 to 1.000 and a Cash Flow Leverage Ratio not exceeding 2.500 to 1.000. The inclusion of a change in ownership of 25% or more as an event of default is also a notable restriction. While the debt adds obligations, securing this financing is a positive signal for the company's near-term operational stability, especially following a recent Form 144 filing indicating an intent to sell shares by a 10% owner.
At the time of this filing, MSGM was trading at $3.64 on NASDAQ in the Technology sector, with a market capitalization of approximately $21M. The 52-week trading range was $0.73 to $5.41. This filing was assessed with neutral market sentiment and an importance score of 7 out of 10.