MGT Capital Investments Inc. (MGTI)

[nodummy]

The 8K is very bad.

It is very clear that the terms of the acquisition of D-Vasive and Demonsaw hasn't changed. It still requires the 43,800,000 shares

https://www.sec.gov/Archives/edgar/data/1001601/000149315216013866/form8-k.htm

The rescission of the Agreement and the Exchange Agreement were predicated on the recent communication received from NYSE MKT indicating that it would not approve the listing on the exchange of the 43.8 million shares that the Company is required to issue in order to complete the closing of the transaction with D-Vasive Inc., a Wyoming corporation

Even at the current price (around $1.90/share). That is giving D-Vasive and Demonsaw a combined value of over $83 million which is beyond laughable.

Fact is that neither MGT nor D-Vasive + Demonsaw come close to meeting the reporting requirements to be listed on the NYSE. Since MGT doesn't meet the standards the NYSE is saying that the only way they'll approve a share exchange for D-Vasive and Demonsaw to be listed on the NYSE via a reverse merger into the MGT shell is if the combined MGT + D-Vasive/DemonSaw company meets the Initial Reporting Standards to be listed on the NYSE.

http://nysemanual.nyse.com/lcm/Help/mapContent.asp?sec=lcm-sections&title=sx-ruling-nyse-policymanual_703.08&id=chp_1_8_3_11

(E) Listed Company Acquired by, Consolidated with or Merged into an Unlisted Company

The Exchange will refuse to list additional equity securities of a listed company in a transaction considered to be a "back door listing," i.e. resulting from a merger, acquisition or consolidation which has the effect of circumventing its standards for original listing. Accordingly, when an unlisted company proposes to combine with, or into, a listed company under circumstances which, in the opinion of the Exchange, constitute an acquisition of a listed company by an unlisted company, the resulting company must meet the standards for original listing. If the resulting company would not qualify for original listing, the Exchange will refuse to list additional shares of the listed company for the transaction.

In applying the above policy, consideration will be given to all factors including changes in ownership of the listed company, changes in management, whether the size of the company being "acquired" is larger than the listed company and whether the two businesses are related on a horizontal or a vertical basis. All circumstances will be considered collectively and weight may be given to compensating factors.

Here is a reference that shows the initial listing requirements that would need to be met:

https://www.nyse.com/publicdocs/nyse/listing/NYSE_Initial_Listing_Standards_Summary.pdf

It isn't going to happen. MGT reported no revenues in their last 10Q and D-Vasive + Demonsaw has nominal revenues.

There is no chance of MGT moving to another exchange either. With limited assets and no revenues they'd never get approved to list on any higher exchange.

It looks like the only way they can make the MGT + D-Vasive + Demonsaw merger work is:

1) If they make it a cash only acquisition. MGT has limited cash but since D-Vasive and Demonsaw actually have very little value on paper it shouldn't require much cash to buy them. We know this isn't going to happen. McAfee will never accept an offer in the ballpark of what those companies are actually worth on paper today.

2) If they delist from the NYSE and move to the OTC exchange where they belong. Everything about MGT is penny stock material already anyways from the balance sheet to the insider enrichment schemes to the paid stock promotions to the paid promoter contracts disguised as consulting contracts to the misleading press releases to the pump style forward looking statements that drove this stock for months. The price will take a beating if it moves down an exchange but at least they can issue tens of millions of dollars worth of stock for companies that have very little value on paper and nobody will stop them from doing it.



Personally, I don't see either of those things happening. Financiers don't back out if they believe a deal is still going to happen. Maybe they renegotiate terms because of the price drop, but they don't drop out all together. I think they are just laying the ground work now to cancel the whole proposed acquisition in the future. I'm sure some of the main insiders involved in the MGT pump&dump will want to make sure people close to them are completely out of the stock before dropping the news, but once damage control for insiders is taken care of we'll probably get the official announcement.