MGT Capital Investments, Inc. (NYSE-MKT: MGT.BC), announced today that it has entered into an agreement with a leading institutional investor providing $3.5 million of capital in support of the Company’s strategy to monetize intellectual property. The capital raise is comprised of the sale of $3.5 million of Senior Secured Convertible Notes plus Warrants to purchase MGT common stock.
Subject to customary closing conditions, the Notes will be convertible into the Company’s common stock at a fixed price of $3.00 per share; in certain instances the company can force conversion or redeem the Notes. The Notes carry an 8% interest rate and mature in 18 months. The Warrants have a five-year life and are exercisable at $3.00 per MGT share; the Company has the right to force exercise in certain instances.
Robert Traversa, the Company’s Chief Financial Officer, stated, “As CFO as well as a large stockholder of MGT, I am very mindful of enhancing long term shareholder value. This deal brings us a strategic investor with proven success in the intellectual property space, and sets a strong foundation for our expansion and development.” Added Robert Ladd, the Company’s President and Chief Executive Officer, “We are pleased with this investment as it further validates our strategy at this stage of MGT’s growth plan.”
The offering is being made in reliance upon the exemption from securities registration afforded by Section 4(2) of the Securities Act of 1933, as amended, and Rule 506 of Regulation D, as promulgated by the United States Securities and Exchange Commission under the 1933 Act. Chardan Capital Markets LLC acted as sole placement agent in this transaction.About MGT Capital Investments, Inc. MGT and its subsidiaries are engaged in the business of monetizing intellectual property. The Company’s majority-owned subsidiary, Medicsight, Ltd is a medical technology company with operations in imaging software and hardware devices, including computer-aided detection software used to assist radiologists with detection of colorectal polyps. The company's software has regulatory approvals including CE Mark and U. S. FDA clearance.
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