Motorsport Games Inc. Adopts Shareholder Rights Plan (12.5% Trigger)

What Happened
Motorsport Games Inc. announced on July 22, 2026 that its Board adopted a preferred stock rights agreement (a “rights plan”) and declared a dividend of one Right for each outstanding share of Class A Common Stock to holders of record at the close of business on August 3, 2026. The Rights attach to the Company’s common shares and are intended to impose significant dilution on any person or group (other than specified Exempt Persons) that becomes the beneficial owner of 12.5% or more of the common stock. The Rights Agreement was executed with ClearTrust, LLC as rights agent and was announced by press release on July 22, 2026.

Key Details

• Record Date: Rights dividend to stockholders of record as of close of business on August 3, 2026.
• Trigger: A person or group becomes an “Acquiring Person” if they beneficially own 12.5% or more of common stock (beneficial ownership includes certain derivative arrangements).
• Exercise economics: Each Right permits purchase of one one‑thousandth (0.001) of a share of newly designated Series A Participating Preferred Stock for $25.00 per Right (subject to adjustment). The Series A Preferred is structured so 0.001 share approximates one common share in dividend, liquidation and voting rights.
• Anti-takeover mechanics: On a flip‑in trigger (Acquiring Person ≥12.5%), each non‑Acquiring holder can buy securities with market value equal to twice the Purchase Price; Rights held by the Acquiring Person become void.
• Redemption/exchange/expiration: Board may redeem Rights prior to the Distribution Time and Final Expiration Time at $0.001 per Right; Rights expire July 20, 2027 (5:00 p.m. NYC) unless earlier redeemed or exchanged.
• Distribution Time: Rights separate from common stock and become exercisable only after the later defined Distribution Time (generally the 10th business day after public disclosure of an Acquiring Person or comparable tender offer event).

Why It Matters
This is a classic “poison pill” defensive measure: it makes large, unsolicited accumulations of Motorsport Games’ stock more dilutive and costly, reducing the chance of a hostile takeover without board approval. For investors, the immediate practical effects are limited—daily trading and ownership remain unchanged unless an acquisition attempt reaches the defined thresholds—but the plan can affect takeover dynamics, potential activist campaigns, and negotiations around any future acquisition. The Rights plan is temporary (expires July 20, 2027) and contains exemptions for certain existing holders and company-related plans; the company also issued a press release on July 22, 2026 announcing the adoption.