HARRISON, N.Y., Nov. 17, 2015 /PRNewswire/ -- MGT Capital
Investments, Inc. (NYSE MKT: MGT) reported financial results and
operational developments for the fiscal third quarter ended
September 30, 2015. Developments
during the quarter and recent weeks subsequent to quarter end are
as follows:
- MGT Sports closed the sale of its daily fantasy sports business
and received over $5.0 million of
cash and securities in total consideration.
- MGT entered into agreements with several accredited investors
(led by Barry Honig, a private
investor and specialist in corporate finance), providing
$700,000 of equity capital.
- MGT currently has 17.2 million common shares outstanding and
carries zero debt. Pro–forma for the recent equity offering, the
Company has a stated book value of $7.7
million.
- The Company expects its cash loss to be materially lower for
the remainder of 2015 and for 2016, due to the sale of DraftDay
combined with further corporate cost reductions.
- With MGT's further enhanced balance sheet and reduced cost
structure, the board is considering all methods to create value for
shareholders, including potential mergers, spin–offs, distributions
and other strategic actions.
- Other news:
- MGT Gaming and Aruze Gaming America, along with Aruze
affiliates, settled their patent infringement litigation and ended
all related proceedings in the United
States Patent and Trademark Office.
- MGT received notice from the NJ Division of Gaming Enforcement
confirming that MGT's services license application has been deemed
complete, meaning that MGT is eligible to enter into an agreement
with a casino licensee.
- The Company has scheduled its Annual Meeting of Stockholders
for December 31, 2015.
Financial Results follow; per GAAP requirements, the operations
of DraftDay are treated as discontinued operations.
About MGT Capital Investments, Inc.
MGT Capital and its subsidiaries own and operate social and real
money gaming sites online and in the mobile space, including
MGTplay.com and SlotChamp™. In addition, the
Company owns intellectual property relating to slot machines and
has asserted its claims via patent infringement lawsuits. MGT
also has ownership stakes in DraftDay.com, a top daily fantasy
sports wagering platform and Viggle Inc., operator of an online
entertainment marketing and rewards platform with 10 million
registered users.
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 BALANCE SHEETS
|
(in thousands,
except share and per–share amounts)
|
|
|
September
30,
|
|
December
31,
|
|
2015
|
|
2014
|
|
(Unaudited)
|
|
Assets:
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
428
|
|
$
|
648
|
Accounts
receivable
|
|
12
|
|
|
5
|
Prepaid expenses and
other current assets
|
|
49
|
|
|
141
|
Current assets –
Discontinued operations
|
|
–
|
|
|
838
|
Investments –
current
|
|
1,041
|
|
|
–
|
Notes
receivable
|
|
1,875
|
|
|
–
|
Total current
assets
|
|
3,405
|
|
|
1,632
|
|
|
|
|
|
|
Non–current
assets
|
|
|
|
|
|
Restricted
cash
|
|
39
|
|
|
138
|
Property and
equipment, at cost, net
|
|
5
|
|
|
11
|
Property and
equipment, at cost, net – Discontinued operations
|
|
–
|
|
|
32
|
Intangible assets,
net
|
|
1,259
|
|
|
1,608
|
Intangible assets, net
– Discontinued operations
|
|
–
|
|
|
809
|
Goodwill
|
|
1,496
|
|
|
1,496
|
Goodwill –
Discontinued operations
|
|
–
|
|
|
4,948
|
Investments – long
term
|
|
1,380
|
|
|
–
|
Other non–current
assets
|
|
–
|
|
|
2
|
Total
assets
|
$
|
7,584
|
|
$
|
10,676
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Accounts
payable
|
$
|
249
|
|
$
|
199
|
Accrued
expenses
|
|
189
|
|
|
180
|
Current liabilities –
Discontinued operations
|
|
–
|
|
|
988
|
Other
payables
|
|
13
|
|
|
12
|
Amounts due to Viggle,
Inc.
|
|
124
|
|
|
–
|
Total current
liabilities
|
|
575
|
|
|
1,379
|
|
|
|
|
|
|
Total
liabilities
|
|
575
|
|
|
1,379
|
|
|
|
|
|
|
Commitments and
contingencies:
|
|
|
|
|
|
Redeemable convertible
preferred stock – Temporary equity
|
|
|
|
|
|
Preferred
stock, series A convertible preferred, $0.001 par value, 1,500,000
shares authorized
at September 30, 2015 and December 31, 2014; 1,416,463 and
1,416,160 shares issued at
September 30, 2015 and December 31, 2014, respectively; 10,451 and
9,993 shares outstanding
at September 30, 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 September 30, 2015 and December 31, 2014,
respectively. No shares authorized, issued and
outstanding at September 30, 2015 and
December 31, 2014 respectively
|
|
–
|
|
|
–
|
Common
Stock, $0.001 par value; 75,000,000 shares authorized; 14,169,665
and 10,731,160
shares issued and outstanding at September 30, 2015 and December
31, 2014, respectively
|
|
14
|
|
|
11
|
Additional
paid–in capital
|
|
310,248
|
|
|
308,288
|
Accumulated
other comprehensive loss
|
|
(890)
|
|
|
(281)
|
Accumulated
deficit
|
|
(302,606)
|
|
|
(299,163)
|
Total
stockholders' equity
|
|
6,766
|
|
|
8,855
|
Non–controlling
interests
|
|
243
|
|
|
442
|
Total
equity
|
|
7,009
|
|
|
9,297
|
|
|
|
|
|
|
Total stockholders'
equity, liabilities and non–controlling interest
|
$
|
7,584
|
|
$
|
10,676
|
MGT CAPITAL
INVESTMENTS, INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHESIVE
LOSS
|
(In thousands,
except share and per–share amounts)
|
(Unaudited)
|
|
|
Three months ended
September 30
|
|
2015
|
|
2014
|
Revenues:
|
|
|
|
|
|
Licensing
|
$
|
90
|
|
$
|
1
|
Cost of
revenues:
|
|
|
|
|
|
Licensing
|
|
5
|
|
|
–
|
|
|
|
|
|
|
Gross
margin
|
|
85
|
|
|
1
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
General and
administrative
|
|
642
|
|
|
961
|
Sales and
marketing
|
|
–
|
|
|
–
|
Research and
development
|
|
–
|
|
|
40
|
|
|
642
|
|
|
1,001
|
|
|
|
|
|
|
Operating
loss
|
|
(557)
|
|
|
(1,000)
|
|
|
|
|
|
|
Other
non–operating (expense) / income:
|
|
|
|
|
|
Interest and other
expense
|
|
8
|
|
|
2
|
Impairment of notes
receivable
|
|
(256)
|
|
|
–
|
Disposal of
assets
|
|
(144)
|
|
|
–
|
|
|
(392)
|
|
|
2
|
|
|
|
|
|
|
Net loss before
income taxes and non–controlling interest
|
|
(949)
|
|
|
(998)
|
|
|
|
|
|
|
Income tax
expense
|
|
–
|
|
|
(10)
|
|
|
|
|
|
|
Net loss from
continuing operations before non–controlling interest
|
|
(949)
|
|
|
(1,008)
|
|
|
|
|
|
|
Discontinued
operations – DraftDay.com:
|
|
|
|
|
|
Net loss from
discontinued operations
|
|
(229)
|
|
|
(443)
|
Gain on termination of
asset purchase agreement
|
|
250
|
|
|
–
|
Loss on sale of
assets
|
|
(387)
|
|
|
–
|
|
|
(366)
|
|
|
(443)
|
|
|
|
|
|
|
Net loss before
non–controlling interest
|
|
(1,315)
|
|
|
(1,451)
|
|
|
|
|
|
|
Net loss attributable
to non–controlling interest
|
|
(6)
|
|
|
70
|
|
|
|
|
|
|
Net loss
attributable to common stockholders
|
$
|
(1,321)
|
|
$
|
(1,381)
|
|
|
|
|
|
|
Net loss
attributable to common stockholders
|
$
|
(1,321)
|
|
$
|
(1,381)
|
Other
comprehensive loss:
|
|
|
|
|
|
Unrealized loss on
investments
|
|
(609)
|
|
|
–
|
Comprehensive
loss
|
$
|
(1,930)
|
|
$
|
(1,381)
|
|
|
|
|
|
|
Per–share
data:
|
|
|
|
|
|
Basic and diluted loss
per share – continuing operations
|
$
|
(0.07)
|
|
$
|
(0.10)
|
Basic and diluted loss
per share from discontinued operations
|
|
(0.03)
|
|
|
(0.05)
|
Basic and diluted loss
per share
|
|
(0.10)
|
|
|
(0.15)
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding
|
|
14,123,208
|
|
|
9,685,023
|
MGT CAPITAL
INVESTMENTS, INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHESIVE
LOSS
|
(In thousands,
except share and per–share amounts)
|
(Unaudited)
|
|
|
Nine months ended
September 30,
|
|
2015
|
|
2014
|
Revenues:
|
|
|
|
|
|
Licensing
|
$
|
102
|
|
$
|
81
|
Gaming
|
|
2
|
|
|
7
|
|
|
104
|
|
|
88
|
Cost of
revenues:
|
|
|
|
|
|
Licensing
|
|
5
|
|
|
–
|
|
|
|
|
|
|
Gross
margin
|
|
99
|
|
|
88
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
General and
administrative
|
|
2,293
|
|
|
3,026
|
Research and
development
|
|
–
|
|
|
153
|
|
|
2,293
|
|
|
3,179
|
|
|
|
|
|
|
Operating
loss
|
|
(2,194)
|
|
|
(3,091)
|
|
|
|
|
|
|
Other
non–operating (expense) / income:
|
|
|
|
|
|
Interest and other
(expense) / income
|
|
(28)
|
|
|
7
|
Impairment of notes
receivable
|
|
(256)
|
|
|
–
|
Disposal of
assets
|
|
(144)
|
|
|
–
|
|
|
(428)
|
|
|
7
|
|
|
|
|
|
|
Net loss before
income taxes and non–controlling interest
|
|
(2,622)
|
|
|
(3,084)
|
|
|
|
|
|
|
Income tax
benefit
|
|
–
|
|
|
1
|
|
|
|
|
|
|
Net loss from
continuing operations before non–controlling interest
|
|
(2,622)
|
|
|
(3,083)
|
|
|
|
|
|
|
Discontinued
operations – DraftDay.com:
|
|
|
|
|
|
Net loss from
discontinued operations
|
|
(787)
|
|
|
(1,184)
|
Gain on termination
of asset purchase agreement
|
|
250
|
|
|
–
|
Loss on sale of
assets
|
|
(387)
|
|
|
–
|
|
|
(924)
|
|
|
(1,184)
|
|
|
|
|
|
|
Net loss before
non–controlling interest
|
|
(3,546)
|
|
|
(4,267)
|
|
|
|
|
|
|
Net loss attributable
to non–controlling interest
|
|
103
|
|
|
373
|
|
|
|
|
|
|
Net loss
attributable to common stockholders
|
$
|
(3,443)
|
|
$
|
(3,894)
|
|
|
|
|
|
|
Net loss
attributable to common stockholders
|
$
|
(3,443)
|
|
$
|
(3,894)
|
Other
comprehensive loss:
|
|
|
|
|
|
Unrealized loss on
investments
|
|
(609)
|
|
|
–
|
Comprehensive
loss
|
$
|
(4,052)
|
|
$
|
(3,894)
|
|
|
|
|
|
|
Per–share
data:
|
|
|
|
|
|
Basic and diluted loss
per share – continuing operations
|
$
|
(0.20)
|
|
$
|
(0.30)
|
Basic and diluted loss
per share from discontinued operations
|
|
(0.07)
|
|
|
(0.13)
|
Basic and diluted loss
per share
|
|
(0.27)
|
|
|
(0.43)
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding
|
|
12,911,492
|
|
|
9,175,695
|
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SOURCE MGT Capital Investments, Inc.