MGT Capital Investments Announces First Quarter 2013 Results and Outlook
Company Closes First Two Acquisitions in the Internet and Mobile Gaming Space
HARRISON, N.Y., May 21, 2013 /PRNewswire/ -- MGT Capital Investments, Inc. (NYSE MKT: MGT), announced today financial results for the first quarter of 2013. The Company reported basic earnings per share of $0.33 ($0.24 per share, fully diluted), versus a net loss of $0.22 per share in the corresponding quarter of 2012. The Company cautions investors that the current quarter's results are not necessarily indicative of near term future earnings power. For full information, please refer to the Company's Quarterly Report on Form 10-Q for the period ending March 31, 2013 filed with the Securities and Exchange Commission on May 20, 2013.
As previously disclosed in a Current Report on Form 8-K filed on May 17, 2013, after consulting with the Company's Audit Committee and Independent Registered Public Accountant, Marcum LLP, management concluded that certain of the Company's warrants and its Series A Convertible Preferred Stock received improper accounting treatment. The Company will file amendments to its 2012 Annual Report and 2012 Quarterly Reports as quickly as possible. Specifically, the change in treatment of the warrants and the Preferred Stock resulted in a reduction to the equity portion of the balance sheet, compared to the previous presentation; this accounting change also produced a gain on the fair market carrying value of the warrants and Preferred Stock which positively impacted net income by $2.1 million in the quarter ending March 31, 2013.
The reclassifications, however, do not impact cash flow or cash balances. In addition, as of today's date, substantially all of the Preferred Stock has converted into Common Stock pursuant to its terms. Also, approximately 755,000 warrants have been exercised after March 31, 2013 with cash proceeds of $2.9 million received by the Company, bringing the current cash balance to over $7.0 million. Lastly, as a result of recently obtained Waiver Agreements from warrant holders, the affected warrants that remain outstanding will be treated as equity in the current quarter ending June 30, 2013.
Based on the Company's calculation, if the events in the preceding paragraph had occurred on or before March 31, 2013, Stockholders Equity would have totaled $8.5 million, rather than the $0.4 million reported. The Company also currently estimates that recent acquisitions will add approximately $2.8 million to the $8.5 million figure, for a current total of over $11 million in adjusted Stockholders Equity.
Robert Traversa, MGT's Chief Financial Officer concluded, "We are very pleased by the strengthening of the Company's balance sheet that resulted from transactions in the second quarter. We appreciate the support of our investors and shareholders as we position our Company for growth in this exciting strategy."
The Company recently closed its previously announced acquisitions of mobile gaming assets from Digital Angel as well as the majority interest of FanTD LLC. We will continue to update investors as MGT grows its footprint in the skill-based online and mobile gaming and wagering space.
About MGT Capital Investments, Inc.
MGT Capital Investments and its subsidiaries are engaged in the business of acquiring, developing and monetizing assets in the online and mobile gaming space.
MGT Sports, Inc., a wholly owned subsidiary, owns a majority interest in FanTD LLC, an online daily fantasy sports wagering business. FanTD LLC owns and operates FanThrowdown.com, one of the leading daily fantasy sports websites. Launched in 2012, FanThrowdown.com offers daily fantasy gameplay for the NFL, MLB, NCAA (basketball & football), NHL, NBA and professional golf, with near-term plans to add NASCAR. Its goal is to offer fantasy sports fans the absolute best play environment and the most popular gameplay styles with a perfect balance between user-friendliness and in-depth statistical analysis.
MGT Gaming, Inc., a majority owned subsidiary, owns U.S. Patent No. 7,892,088 relating to casino gaming systems. In November 2012, MGT Gaming filed a patent infringement suit against Caesars Entertainment Corporation, MGM Resorts International, Inc., WMS Gaming - a subsidiary of WMS Industries, Inc., Penn National Gaming, Inc., and Aruze Gaming America, Inc.
In addition, the Company owns Medicsight, Inc., a medical technology company with intellectual property and operations in imaging software and hardware devices. Medicsight's computer-aided detection software assists radiologists with detection of colorectal polyps, and has received regulatory approvals, including CE Mark and U.S. FDA clearance. Medicsight's assets are presently for sale.
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.
SOURCE MGT Capital Investments, Inc.
More by this Source
MGT Announces Launch of Online Skilled Gaming Platform, MGTPlay.com
Dec 05, 2013, 09:00 ET
MGT Announces Acquisition of Social Gaming Business and Creative Team
Nov 13, 2013, 15:36 ET
Browse our custom packages or build your own to meet your unique communications needs.
Learn about PR Newswire services
Request more information about PR Newswire products and services or call us at (888) 776-0942.