HARRISON, N.Y., Sept. 17, 2015 /PRNewswire/ -- MGT Capital Investments, Inc. (NYSE MKT: MGT) today provided an update of its recent activities and outlook.
As announced on September 9, 2015, the Company completed the sale of its daily fantasy sports assets to a new entity formed by Viggle Inc. (NASDAQ: VGGL) and Sportech Digital, a subsidiary of Sportech PLC. The new company, called DraftDay Gaming Group, Inc (DDGG). will continue to offer the same high quality daily fantasy sports experience directly to consumers and to businesses desiring turnkey solutions to new revenue streams.
MGT received approximately $5.5 million in total consideration from the sale, including:
- $250,000 in cash received on July 22, 2015.
- $234,375 in cash to be paid by VGGL on or before September 29, 2015.
- $1,875,000 in cash to be paid by VGGL on or before March 8, 2016.
- 1,269,342 share of VGGL common stock, presently valued at $1,800,000.
- 10% equity in DDGG, valued at $1,020,000, using the initial valuation metrics on formation.
- Three-year warrants to purchase roughly 6% more equity in DDGG, at the initial valuation.
MGT currently has 14.2 million common shares outstanding and has not utilized its at-the-market financing facility since May 7, 2015. The company carries zero debt and has no dilutive securities. As a result of the asset sale, MGT has reduced its operating expenses by $125,000 monthly, and did not suffer any one-time cash charges. Further cost cutting measures are currently being analyzed.
MGT retains operating assets in intellectual property, having recently received a third patent in its family of skill based slot machines. Nevada and New Jersey have legalized wagering on games of skill, and we believe the patents will have great utility in the design of slot machines for the millennium generation. Also, in the past month, 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. Lastly, the Company is exploring publishing partnerships to launch its social slot machine mobile app called SlotChamp. The engineering and design work are largely complete, and the game is addictive and beautiful.
Given MGT's significant ongoing equity interest in the fast growing daily fantasy sports space, we suggest stockholders listen to the fiscal fourth quarter conference call of Viggle, which will feature participation from Richard Roberts, CEO of DraftDay Gaming Group. The call will take place at 4:30 PM EDT on Monday September 21, 2015, with the live webcast available at Viggle's investor relations website.
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.
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.