On May 21, 2018, about 1915 central daylight time, an M-Squared Sprint 1000 light-sport airplane, N138ZX, was substantially damaged when it was involved in an accident near Gurdon, Arkansas. The pilot and passenger were seriously injured. The airplane was operated as a Title 14 Code of Federal Regulations Part 91 personal flight. The pilot reported to the Federal Aviation Administration (FAA) inspector that the airplane had just departed from runway 26 at Gurdon Lowe Field. When the airplane was about 800 ft above ground level (agl), "the engine suddenly stopped." As the pilot looked for a suitable landing site, the "engine seized up", and the airplane began to descend rapidly. The pilot deployed the airplane's ballistic parachute about 200 ft agl. The airplane descended and landing hard in a residential area. The airplane's wings and fuselage were substantially damaged. The pilot recalled that during the takeoff and climb there were no unusual indications from the instruments, nor any unusual sounds from the engine. The engine was examined by the FAA inspector with technical assistance from the engine manufacturer. Examination of the engine revealed that the top of the MAG piston ring had failed resulting in damage to the MAG piston and cylinder walls. The examination also noted vertical scoring on the PTO cylinder, and significant vertical scoring on the MAG cylinder. In addition, both rubber PTO and MAG carburetor intake sockets were worn and cracked. Complete engine records were not available and there was no record that showed that the engine had been overhauled during its 23 years of operation. The manufacturer recommends an engine overhaul be performed every 300 hour or 5 years, whichever occurs first. The rubber carburetor intake sockets should be replaced every 5 years or when signatures of deterioration are detected.