MGTI MGT Capital Investments Inc (PK)

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): August 17, 2015

 

 

MGT Capital Investments, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware		001-32698		13-4148725
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

500 Mamaroneck Avenue, Suite 204, Harrison, NY 10528

(Address of principal executive offices, including zip code)

 

(914) 630-7431

(Registrant’s telephone number, including area code)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Item 2.02.

Results of Operations and Financial Condition.

 

On August 17, 2015, MGT Capital Investments, Inc. (the “Company”) issued a press release relating to its financial and operational results for the fiscal quarter ended June 30, 2015. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.

 

The information contained in this Current Report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”) or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. The furnishing of the information in this Current Report on Form 8-K is not intended to, and does not, constitute a representation that such furnishing is required by Regulation FD or that the information contained in this Current Report on Form 8-K constitutes material investor information that is not otherwise publicly available.

 

The Securities and Exchange Commission encourages registrants to disclose forward-looking information so that investors can better understand the future prospects of a registrant and make informed investment decisions. This Current Report on Form 8-K and exhibits may contain these types of statements, which are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, and which involve risks, uncertainties and reflect the Registrant’s judgment as of the date of this Current Report on Form 8-K. Forward-looking statements may relate to, among other things, operating results and are indicated by words or phrases such as “expects,” “should,” “will,” and similar words or phrases. These statements are subject to inherent uncertainties and risks that could cause actual results to differ materially from those anticipated at the date of this Current Report on Form 8-K. The Company disclaims any obligation to, and will not, update any forward-looking statements to reflect events or circumstances after the date hereof. Investors are cautioned not to rely unduly on forward-looking statements when evaluating the information presented within.

 

Item 9.01.

Financial Statements and Exhibits.

 

(d)

Exhibits.

 

Exhibit No.		Description
99.1		Press Release dated August 17, 2015

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

Dated: August 17, 2015

 

	MGT Capital Investments, Inc.
	By:	/s/ Robert B. Ladd
	Name: Title:	Robert B. Ladd President and Chief Executive Officer

 

 

 

Exhibit 99.1

 

MGT Capital Reports Financial Results for the Second Quarter ending June 30, 2015

 

HARRISON, NY (August 17, 2015) MGT Capital Investments, Inc. (NYSE MKT: MGT) today reported financial and operational results for the three and six-month periods ended June 30, 2015.

 

Financial and Operational Results

 

For the three months ended June 30, 2015, revenues from our fantasy sports business were $249,000, up 15% from the $217,000 recorded in the first quarter of this year. Second quarter 2015 revenues were down 12% from the same quarter in 2014, as the Company adopted a strategy to reduce overlay in its guaranteed contests. As a result, the gross margin from gaming operations was $153,000 (61% of revenue), up 32% as compared to $116,000 (41% of revenue) for the same period last year, and up 20% sequentially from the first quarter 2015 gross margin of $127,000 (58% of revenue).

 

Total operating expenses for the second quarter 2015 were down 39% year over year, and down over 30% sequentially from the first quarter of this year. Operating loss improved to ($855,000) in the second quarter of 2015, compared to ($1.5 million) in the year ago second quarter, and ($1.3 million) in this year’s first quarter.

 

For the six months, ended June 30, 2015, gaming revenues were up 43%, and gross margin from gaming was up 157%, with the six month gross margin improving to 60% of revenue, as compared to 34% of revenue for the same period last year.

 

Management Commentary and Outlook

 

As reported on Forms 8–K, filed with the Securities and Exchange Commission on June 12, 2015, July 6, 2015 and July 20, 2015, the Company has entered into an Asset Purchase Agreement (as amended) for the sale of its fantasy sports assets to a group managed by Sportech PLC. Under the terms of the Agreement, at closing, the Company will receive over $4.3 million in cash plus a 10% residual equity ownership in the buyer. The necessary fundraising for the deal is being led by Macquarie Capital Markets Canada Ltd., although there can be no assurance that Macquarie will be successful prior to the expected closing date on or before August 31, 2015.

 

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.  The Company also offers games of skill through MGTplay.com and social casino games with SlotChamp™. MGT also launched Daily Fantasy Legend in partnership with Facebook to become the first daily fantasy sports platform on social media.  In addition, the Company owns intellectual property relating to slot machines and has asserted its claims via patent infringement lawsuits.

 

 

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.

 

 

Company Contact

 

MGT Capital Investments, Inc.

Robert Traversa, Chief Financial Officer

rtraversa@mgtci.com

914-630-7431

 

MGT CAPITAL INVESTMENTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per–share amounts)

 

 

		June 30,				December 31,
		2015				2014
		(Unaudited)
Assets
Current assets
Cash and cash equivalents		$	1,097			$	1,455
Accounts receivable			12				5
Prepaid expenses and other current assets			123				172
Note receivable			251				–
Total current assets			1,483				1,632
Non–current assets
Restricted cash			39				138
Property and equipment, at cost, net			26				43
Intangible assets, net			2,117				2,417
Goodwill			6,444				6,444
Other non–current assets			–				2
Total assets		$	10,109			$	10,676
Liabilities
Current liabilities
Accounts payable		$	324			$	245
Accrued expenses			152				180
Player deposit liability			742				952
Other payables			2				2
Total current liabilities			1,220				1,379
Total liabilities			1,220				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 June 31, 2015 and December 31, 2014, respectively; 10,296 and 9,993 shares issued and outstanding at June 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 June 31, 2015 and December 31, 2014, respectively. No shares authorized, issued and outstanding at March 31, 2015 and December 31, 2014 respectively			–				–
Common Stock, $0.001 par value; 75,000,000 shares authorized; 14,116,999 and 10,731,160 shares issued and outstanding at June 31, 2015 and December 31, 2014, respectively			14				11
Additional paid–in capital			310,108				308,288
Accumulated other comprehensive loss			(281	)			(281	)
Accumulated deficit			(301,285	)			(299,163	)
Total stockholders' equity			8,556				8,855
Non–controlling interests			333				442
Total equity			8,889				9,297
Total stockholders' equity, liabilities and non–controlling interest		$	10,109			$	10,676

 

MGT CAPITAL INVESTMENTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands, except share and per-share amounts)

(Unaudited)

 

 

		Three months ended June 30,								Six months ended June 30,
		2015				2014				2015				2014
Revenues
Licensing		$	12			$	37			$	12			$	80
Gaming			249				283				466				325
			261				320				478				405
Cost of revenues
Gaming			96				167				186				216
Gross margin			165				153				292				189
Operating expenses
General and administrative			981				1,536				2,369				2,800
Sales and marketing			39				91				118				108
Research and development			–				53				–				113
			1,020				1,680				2,487				3,021
Operating loss			(855	)			(1,527	)			(2,195	)			(2,832	)
Other non–operating (expense) / income
Interest and other income			5				2				(36	)			5
Net loss before income taxes and non–controlling interest			(850	)			(1,525	)			(2,231	)			(2,827	)
Income tax (expense) / benefit			–				1				–				11
Net loss before non–controlling interest		$	(850	)		$	(1,524	)			(2,231	)			(2,816	)
Net loss attributable to non–controlling interest			(1	)			133				109				303
Net loss attributable to MGT Capital Investments, Inc.		$	(851	)		$	(1,391	)		$	(2,122	)		$	(2,513	)
Per–share data:
Basic and diluted loss per share		$	(0.06	)		$	(0.15	)		$	(0.17	)		$	(0.28	)
Weighted average number of common shares outstanding			13,578,181				9,057,867				12,373,621				8,921,935