Current Report Filing (8-k)
May 15 2019 - 6:03AM
Edgar (US Regulatory)
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): May 10, 2019
MGT
Capital Investments, Inc.
Delaware
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001-32698
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13-4148725
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(State or other jurisdiction
of incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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512
S. Mangum Street, Suite 408
Durham,
NC
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27701
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(914)
630-7430
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(Address
of principal executive offices)
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(Zip
Code)
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(Registrant’s
telephone number, including area code)
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(Former
name or former address, if changed since last report.)
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:
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[ ]
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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[ ]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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[ ]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company [ ]
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act [ ]
Securities
registered pursuant to Section 12(b) of the Act:
Title
of Each Class
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Trading
Symbols
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Name
of Each Exchange on Which Registered
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Common
Stock, par value $0.001 per share
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MGTI
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OTCQB
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Item
1.01.
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Entry
into a Material Definitive Agreement.
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On
May 10, 2019, MGT Capital Investments, Inc. (the “Company”), N 4
th
Street LLC (the “Service Provider”),
and Bit5ive LLC (the “Operator”) entered into a profit sharing agreement, effective as of May 10, 2019, relating to
the generation of Bitcoin mining revenues at a facility located in Coshocton, Ohio (the “Facility”) for a term that
is the earlier of (i) two years, or (ii) when the parties determine that the Bitcoin mining business at the Facility is uneconomic
(the “Agreement”).
Under
the terms of the Agreement, the Company agreed to provide the necessary hardware to conduct Bitcoin mining at the Facility. In
addition, the Company is required to deliver a security deposit in the amount of $240,000 to the Service Provider (the “Security
Deposit”). The Service Provider agreed, among other things, to provide necessary hosting capacity, equipment, infrastructure
and electricity to operate the mining hardware at the Facility. The Operator agreed, among other things, to and maintain the Facility
in accordance with prudent industry standards (as defined in the Agreement) and to maintain the hardware.
The
Service Provider is required to disburse on a monthly basis: (i) the total electricity costs to the utility provider; (ii) 10%
of Gross Profits (as defined in the Agreement) to the Operator; (iii) the Net Profits (as defined in the Agreement) such that
10% of all Gross Profits shall be paid to the Company, 40% of all Gross Profits shall be paid to Service Provider, and 40% of
all Gross Profits will be paid into the Security Deposit account until such time as the Security Deposit is paid in full; and
(iv) subsequent to the satisfaction of the Security Deposit, Net Profits equally between the Company and the Service Provider.
The
foregoing description of the Agreement is not complete and is qualified in its entirety by reference to the full text of the Agreement,
a copy of which is filed herewith as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item
5.02.
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Departure
of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
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On
May 13, 2019, Stephen Schaeffer, our Chief Operating Officer, resigned from office effective as of May 10, 2019.
In
connection with his resignation, Mr. Schaeffer and the Company entered into a resignation and release agreement dated May 13,
2019 (the “Resignation Agreement”), pursuant to which Mr. Schaeffer’s Executive Employment Agreement, dated
August 15, 2017 was terminated. The Resignation Agreement provides that Mr. Schaeffer will be paid a lump sum of $100,000, net
of appropriate payroll and withholding deductions. In addition, the Resignation Agreement provides for the immediate vesting of
440,000 shares of common stock previously granted to Mr. Schaeffer under the Company’s 2016 Stock Equity Plan and for Company-paid
COBRA health insurance coverage.
The
foregoing description of the Resignation Agreement is not complete and is qualified in its entirety by reference to the full text
of the Resignation Agreement, a copy of which is filed herewith as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated
herein by reference.
On
May 14, 2019, the Company issued a letter to its shareholders providing an update with respect to the Company’s operations.
A copy of the press release is attached to this report as Exhibit 99.1.
The
information contained in this Item 8.01 of this Current Report on Form 8-K shall not be deemed “filed” for purposes
of Section 18 of the Exchange Act, or incorporated by reference in any filing under the Securities Act of 1933, as amended 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 Item 8.01 of this Current Report on Form 8-K constitutes material investor
information that is not otherwise publicly available.
This
Item 8.01 of this Current Report on Form 8-K and exhibits may contain 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.
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Financial
Statements and Exhibits.
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Exhibit
Number
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Description
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10.1
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Agreement, effective as of May 1, 2019, by and among MGT Capital Investments, Inc., N 4
th
Street LLC, and Bit5ive LLC.
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10.2
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Resignation and Release Agreement, dated May 13, 2019, by and between Stephen Schaeffer and MGT Capital Investments, Inc.
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99.1.
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Press Release, dated May 14, 2019
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Signature
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 hereunto duly authorized.
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MGT Capital Investments, Inc.
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Date:
May 14, 2019
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By:
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/s/
Robert S. Lowrey
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Name:
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Robert
S. Lowrey
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Title:
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Chief
Financial Officer
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