Anyone else concerned about MSG’s future?

Discussion in 'General Discussion' started by jamesleegte, Apr 4, 2022.

  1. gianluca

    gianluca Registered

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    There is people with money behind them and the shareholders have their fortune too, so the company and S397 are relatively safe. Videogames are a long term investment for the developers and the producers and the big money comes from the console market. So they will start to make cash when the console versions of their games will be released.

    As an example: pCars 1 was funded with +2 mil by the community, 1.5 mil by the SMS and then get other money when Banday Namco joined the group. Development started in 2012 and the game was released in 2015. This with a studio of +100 employees. So it started to pay back months after the console release.
    Also, it's worth to mention that Ian Bell started the funding of pCars 1 with a system that was investigated and shut down by the english IRS equivalent.
     
    Last edited: Nov 20, 2022
  2. Emery

    Emery Registered

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    And currently those titles are slated for 2024. As of Friday, per the quarterly report, the cash to fund operations will run out before 2023 begins. If only NASCAR 21: Ignition were functional, they'd probably be able to swing it, but right now the AI still are DOA and that title has such a smell that customers won't go near it until somebody proves it is fixed.

    Yes, an angel investor could rescue MSG, but that announcement has to come VERY soon and the terms will likely be very unfavorable (loan shark level).
     
  3. Bernat

    Bernat Registered

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    Is it so hard to understand that MSG already has investors that don't seem willing to pull the plug?
     
  4. Emery

    Emery Registered

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    Is it so hard to understand that those investors have yet to put up the necessary cash?
     
  5. Bernat

    Bernat Registered

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    It's a financial report. They shouldn't be hiding their results nor the fact that they would like to attract other investors. They'll put up the cash when they have to.
     
  6. trichens

    trichens Registered

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    Taken from Form 10-Q for quarter ending September 30 2022
    Page 16...
    On April 1, 2020, the Company entered into a promissory note (the “$12 million Line of Credit”) with the Company’s majority stockholder, Motorsport Network that provides the Company with a line of credit of up to $10 million at an interest rate of 10% per annum, the availability of which is dependent on Motorsport Network’s available liquidity. On November 23, 2020, the Company and Motorsport Network entered into an amendment to the $12 million Line of Credit, effective in 2020, pursuant to which the availability under the $12 million Line of Credit was increased from $10 million to $12 million, with no changes to the other terms.

    It would appear that to date MSG have taken $3 million of the available funds

    Page 17...
    In the event the Company or any of its subsidiaries consummates certain corporate events, including any capital reorganization, consolidation, joint venture, spin off, merger or any other business combination or restructuring of any nature, or if certain events of default occur, the entire principal amount and all accrued and unpaid interest will be accelerated and become payable.

    Although it seems that there is an agreement on place which means that until June 30th 2024 Motorsport Network will not demand repayment on monies until MSG has sufficient cash available to run the business.

    During the nine months ended September 30, 2022, the Company did not repay any amounts borrowed under the $12 million Line of Credit and the balance due to Motorsport Network under the $12 million Line of Credit was $3 million as of September 30, 2022.
    Given the state of the financial markets, the Company continues to assess its exposure to any potential non-performance by Motorsport Network and believes that there is a substantial likelihood that Motorsport Network may not fulfill the Company’s future borrowing requests.

    Ummm...

    The newly appointed CFO is John Delta - formerly interim CFO. He was, and maybe still is, a partner in TechCXO who basically hire out executives to firms. His business profile mentions that he has been involved in restructuring businesses, selling assets and closing poorly performing units as well as fund raising.
     
  7. mister dog

    mister dog Registered

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    Here's an idea; why don't they start up a crowdfund with added participation in the development of the next Rfactor title? We can call it... 'World of Major Development' or WMD in short. :D
     
    davehenrie likes this.
  8. Gary_S85

    Gary_S85 Registered

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    It seems like the only options are either more shareholders funds, extra credit (unlikely in the current conditions), or, they offer preference shares...but this devalues the current holders. They would also need to explore changing the business model. But it seems like an excessive amount of cash to burn through - perhaps money wasted by buying up licenses etc.
     

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