HARRISON, N.Y., May 18, 2015 /PRNewswire/ -- MGT Capital
Investments, Inc. (NYSE MKT: MGT) today reported financial and
operational results for the three months ended March 31, 2015.
For the first quarter ended March 31,
2015, total revenue was $217,000, as compared to $85,000 for the same period last year. Gross
margin totalled $127,000 (59% of
revenue), up 253% from the first quarter of 2014. Compared to
fourth quarter 2014, gross margin was flat, despite the impact of
seasonally lower revenues in the current quarter. Operating
expenses were also flat compared to previous quarter.
Cash and cash equivalents as of March 31,
2015 were $1.4 million. During
the quarter, net cash used in operating activities was $1.0 million, as compared to $1.4 million in the first quarter of 2014. The
company expects cash utilization to continue to trend lower for
2015, due to the positive contribution from gross margin of MGT
Sports and recent cost reductions. As stated in the Company's
March 31, 2015 Quarterly Report on
Form 10-Q filed with the Securities and Exchange Commission, the
Company anticipates it has sufficient cash on hand, combined with
the gross margin from DraftDay, to continue operations at least
through April 30, 2016.
Management commentary and outlook
As reported previously, MGT has communicated with several
parties expressing interest in a potential investment or purchase
of DraftDay. The Company continues to review multiple indications
of interest in an effort to create maximum value from DraftDay's
position as the third largest daily fantasy sports website
(measured by customer accounts, player funds, number of contests,
and other metrics). With the top two competitors valued at
$1.0 billion each, the Company
intends to monetize its investment and also retain a significant
stake in the future of this explosive market.
About MGT Capital Investments, Inc.
MGT Capital and its subsidiaries operate social and real money
gaming sites online and in the mobile space, including ownership of
the 3rd largest daily fantasy sports wagering platform,
DraftDay.com. MGT Sports also provides branded white label
solutions that share player liquidity and the company's technology
platform. In addition, MGT offers daily fantasy sports contests on
Facebook through Daily Fantasy Legend, games of skill through
MGTplay.com, and has created an online portal for fantasy sports
news and commentary, FantasySportsLive.com. Lastly, the Company
owns intellectual property relating to slot machines and has
asserted its claims via a patent infringement lawsuit.
Forward–looking statements
This press release contains forward–looking statements. The
words or phrases "would be," "will allow," "intends to," "will
likely result," "are expected to," "will continue," "is
anticipated," "estimate," "project," or similar expressions are
intended to identify "forward–looking statements." MGT's financial
and operational results reflected above should not be construed by
any means as representative of the current or future value of its
common stock. All information set forth in this news release,
except historical and factual information, represents
forward–looking statements. This includes all statements about the
Company's plans, beliefs, estimates and expectations. These
statements are based on current estimates and projections, which
involve certain risks and uncertainties that could cause actual
results to differ materially from those in the forward–looking
statements. These risks and uncertainties include issues related
to: rapidly changing technology and evolving standards in the
industries in which the Company and its subsidiaries operate; the
ability to obtain sufficient funding to continue operations,
maintain adequate cash flow, profitably exploit new business,
license and sign new agreements; the unpredictable nature of
consumer preferences; and other factors set forth in the Company's
most recently filed annual report and registration statement.
Readers are cautioned not to place undue reliance on these
forward–looking statements, which reflect management's analysis
only as of the date hereof. The Company undertakes no obligation to
publicly revise these forward–looking statements to reflect events
or circumstances that arise after the date hereof. Readers should
carefully review the risks and uncertainties described in other
documents that the Company files from time to time with the U.S.
Securities and Exchange Commission.
|
MGT CAPITAL
INVESTMENTS, INC. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands,
except share and per–share amounts)
|
|
|
Three months ended
March 31,
|
|
2015
|
|
2014
|
|
Revenues:
|
|
|
|
|
|
|
Licensing
|
$
|
–
|
|
$
|
43
|
|
Gaming
|
|
217
|
|
|
42
|
|
|
217
|
|
|
85
|
|
Cost of
revenues:
|
|
|
|
|
|
|
Gaming
|
|
90
|
|
|
49
|
|
|
90
|
|
|
49
|
|
|
|
|
|
|
|
Gross
margin
|
|
127
|
|
|
36
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
General and
administrative
|
|
1,388
|
|
|
1,264
|
|
Sales and
marketing
|
|
79
|
|
|
17
|
|
Research and
development
|
|
–
|
|
|
60
|
|
|
1,467
|
|
|
1,341
|
|
|
|
|
|
|
|
Operating
loss
|
|
(1,340)
|
|
|
(1,305)
|
|
|
|
|
|
|
|
Other
non–operating (expense) / income:
|
|
|
|
|
|
|
Interest and other
(expense) / income
|
|
(41)
|
|
|
3
|
|
|
|
|
|
|
|
Net loss before
income taxes and non–controlling interest
|
|
(1,381)
|
|
|
(1,302)
|
|
|
|
|
|
|
|
Income tax
benefit
|
|
–
|
|
|
10
|
|
|
|
|
|
|
|
Net loss before
non–controlling interest
|
|
(1,381)
|
|
|
(1,292)
|
|
|
|
|
|
|
|
Net loss attributable
to non–controlling interest
|
|
87
|
|
|
170
|
|
|
|
|
|
|
|
Net loss
attributable to MGT
|
$
|
(1,294)
|
|
$
|
(1,122)
|
|
|
|
|
|
|
|
Per–share
data:
|
|
|
|
|
|
|
Basic and diluted
loss per share
|
$
|
(0.11)
|
|
$
|
(0.13)
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding
|
|
11,260,174
|
|
|
3,075,802
|
|
MGT CAPITAL
INVESTMENTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED
BALANCE SHEETS
(In thousands, except share and per–share
amounts)
|
|
|
March
31,
|
|
December
31,
|
|
2015
|
|
|
|
(Unaudited)
|
|
2014
|
|
Assets:
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
1,380
|
|
$
|
1,455
|
|
Accounts
receivable
|
|
5
|
|
|
5
|
|
Prepaid expenses and
other current assets
|
|
155
|
|
|
172
|
|
Note
receivable
|
|
251
|
|
|
–
|
|
Total current
assets
|
|
1,791
|
|
|
1,632
|
|
|
|
|
|
|
|
Non–current
assets:
|
|
|
|
|
|
|
Restricted
cash
|
|
39
|
|
|
138
|
|
Property and
equipment, net
|
|
33
|
|
|
43
|
|
Intangible assets,
net
|
|
2,267
|
|
|
2,417
|
|
Goodwill
|
|
6,444
|
|
|
6,444
|
|
Other non–current
assets
|
|
–
|
|
|
2
|
|
Total
assets
|
$
|
10,574
|
|
$
|
10,676
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
$
|
404
|
|
$
|
245
|
|
Accrued
expenses
|
|
312
|
|
|
180
|
|
Player deposit
liability
|
|
773
|
|
|
952
|
|
Other
payables
|
|
3
|
|
|
2
|
|
Total current
liabilities
|
|
1,492
|
|
|
1,379
|
|
|
|
|
|
|
|
Total
liabilities
|
|
1,492
|
|
|
1,379
|
|
|
|
|
|
|
|
Commitments and
contingencies:
|
|
|
|
|
|
|
Redeemable
convertible preferred stock – Temporary equity
|
|
|
|
|
|
|
Preferred stock,
series A convertible preferred, $0.001 par value; 1,416,160 and
1,416,160 shares authorized at March 31, 2015 and December 31,
2014, respectively; 10,143 and 9,993 shares issued and outstanding
at March 31, 2015 and December 31, 2014, respectively
|
|
–
|
|
|
–
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
Undesignated preferred
stock, $0.001 par value; 8,583,840 and 8,583,840 shares authorized
at March 31, 2015 and December 31, 2014, respectively. No shares
issued and outstanding.
|
|
–
|
|
|
–
|
|
Common Stock, $0.001
par value; 75,000,000 shares authorized; 12,853,381 and 10,731,160
shares issued and outstanding at March 31, 2015 and December 31,
2014, respectively
|
|
13
|
|
|
11
|
|
Additional paid–in
capital
|
|
309,452
|
|
|
308,288
|
|
Accumulated other
comprehensive loss
|
|
(281)
|
|
|
(281)
|
|
Accumulated
deficit
|
|
(300,457)
|
|
|
(299,163)
|
|
Total stockholders'
equity
|
|
8,727
|
|
|
8,855
|
|
Non–controlling
interests
|
|
355
|
|
|
442
|
|
Total
equity
|
|
9,082
|
|
|
9,297
|
|
|
|
|
|
|
|
Total stockholders'
equity, liabilities and non–controlling interest
|
$
|
10,574
|
|
$
|
10,676
|
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SOURCE MGT Capital Investments, Inc.