MGT Capital Reports 2015 Third Quarter Results

Board Exploring Strategic Alternatives

Nov 17, 2015, 09:05 ET from MGT Capital Investments, Inc.

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

 

Logo - http://photos.prnewswire.com/prnh/20130409/NY91046LOGO

 

SOURCE MGT Capital Investments, Inc.



RELATED LINKS

http://www.mgtci.com