MGT Capital Investments Inc. (MGTI)

[penknee]

New 10Q out.


During the three months ended March 31, 2018, we mined 91.5 Bitcoin for total revenue of $956,000.

Net loss for the quarter was $4.549 million.

MGT’s revenue is nearly $1 million per quarter, but they spend $5.2 million to make that million!


As of May 8, 2018 cash and cash equivalents is $522,000

Crypto-currency mining machines as of 3/31/18 $10,198,000
As of 12/31/17 $3,685,00

Huge amount of shares where dumped in the quarter: “During the three months ended March 31, 2018, the ownership limitations were satisfied and the Company issued 3,381,816 shares of its common stock to this former noteholder.”

Shares were sold for just $.40 each: “On March 15, 2018, the Company issued 200,000 shares of common stock to an investor for $80,000 in gross proceeds.”

11,034,642 shares are still exercisable as of 3/31/18

On April 16, 2018, the Company issued 1,000,000 shares of its common stock in exchange for the cashless exercise of warrants.
On April 30, 2018, the Company received $313,000 in proceeds from the exercise of a warrant to purchase 625,000 shares of the Company’s common stock.
On May 2, 2018, the Company received $313,000 in proceeds from the exercise of a warrant to purchase 625,000 shares of the Company’s common stock.

During the three months ended March 31, 2018, an anti-dilution protection feature in certain of the Company’s warrants was triggered, causing a decrease in the exercise price of those warrants from $4.50 to $0.40. In accordance with ASC 260-10-25, the Company has recorded a deemed dividend equal to the change in fair value of the warrants due to the decrease in exercise price in the amount of $2,514,000

G&A Expenses has nearly doubled to $4.2 million this quarter, as compared to the same time last year. Cost of revenue has quadrupled to $881,000.

Net loss for the quarter was $4.549 million.

Between the toxic debt, warrants, stock for services, and stock based compensation over 7 million shares were added to the o/s this quarter.



“Our revenues for the three months ended March 31, 2018 increased by $644,000, or 206%, to $956,000 as compared to $312 for the three months ended March 31, 2017. Our revenue is derived from cryptocurrency mining, which commenced in September 2016. The significant increase in revenues is a result of our increased mining capacity through the acquisition of additional machines during the year ended December 31, 2017 and during the first quarter of 2018. “

“Operating expenses for the three months ended March 31, 2018 increased by $1,935,000, or 59%, to $5,192,000 as compared to $3,257,000 for the three months ended March 31, 2017. The increase in operating expenses was primarily due to a $680,000 increase in cost of revenues from the increase in cryptocurrency mining operations, of which $286,000 is depreciation expense, a $928,000 increase in stock-based compensation and an increase of $530,000 in payroll and related expenses.”

“Due to the lack of availability of adequate electric power in Washington to support the Company’s growth, the Company decided to move its principal operations to northern Sweden at the end of 2017. During the first quarter of 2018, the Company took delivery of additional Bitcoin mining machines in Sweden and moved or sold most of its Bitcoin mining machines from Washington. The Company plans to continue growing its mining capacity in Sweden during 2018.”

“As of March 31, 2018, MGT owned and operated approximately 500 miners located in a leased facility in Quincy, Washington and 4,200 miners located in a leased facility in Sweden. In addition, the Company operates about 2,100 miners in the Sweden location pursuant to management agreements. All miners owned or managed by MGT are S9 Antminers sold by Bitmain Technologies LTD. At full deployment expected in May 2018, our total Bitcoin mining capacity, as measured by computational hashing rate, will be approximately 90 petahash per second (“PH/s”). In addition to the S9 Antminers, the Company owns 50 custom designed GPU-based Ethereum mining rigs.

McAfee’s wife Janice Dyson had a consulting contract with MGT, on January 26, 2018, the Company terminated its agreement with FTS. During the three months ended March 31, 2018 and 2017, the Company recorded consulting fees of $137,000 and $200,000, respectively, to FTS for such services.


Looks like the shareholder lawsuits are all being settled or dismissed.

Most of Barry Honig’s lawsuit against MGT has been dismissed, except for one important part, the unjust enrichment claim.

https://www.sec.gov/Archives/edgar/data/1001601/000149315218006508/form10-q.htm