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May 21, 2013 /PRNewswire/ -- MGT Capital Investments, Inc. (NYSE MKT: MGT), announced today financial results for the first quarter of 2013. The Company reported basic earnings per share of
$0.24 per share, fully diluted), versus a net loss of
$0.22 per share in the corresponding quarter of 2012. The Company cautions investors that the current quarter's results are not necessarily indicative of near term future earnings power. For full information, please refer to the Company's Quarterly Report on Form 10-Q for the period ending
March 31, 2013 filed with the Securities and Exchange Commission on
May 20, 2013.
As previously disclosed in a Current Report on Form 8-K filed on
May 17, 2013, after consulting with the Company's Audit Committee and Independent Registered Public Accountant, Marcum LLP, management concluded that certain of the Company's warrants and its Series A Convertible Preferred Stock received improper accounting treatment. The Company will file amendments to its 2012 Annual Report and 2012 Quarterly Reports as quickly as possible. Specifically, the change in treatment of the warrants and the Preferred Stock resulted in a reduction to the equity portion of the balance sheet, compared to the previous presentation; this accounting change also produced a gain on the fair market carrying value of the warrants and Preferred Stock which positively impacted net income by
$2.1 million in the quarter ending
March 31, 2013.
The reclassifications, however, do not impact cash flow or cash balances. In addition, as of today's date, substantially all of the Preferred Stock has converted into Common Stock pursuant to its terms. Also, approximately 755,000 warrants have been exercised after
March 31, 2013 with cash proceeds of
$2.9 million received by the Company, bringing the current cash balance to over
$7.0 million. Lastly, as a result of recently obtained Waiver Agreements from warrant holders, the affected warrants that remain outstanding will be treated as equity in the current quarter ending
June 30, 2013.
Based on the Company's calculation, if the events in the preceding paragraph had occurred on or before
March 31, 2013, Stockholders Equity would have totaled
$8.5 million, rather than the
$0.4 million reported. The Company also currently estimates that recent acquisitions will add approximately
$2.8 million to the
$8.5 million figure, for a current total of over
$11 million in adjusted Stockholders Equity.
Robert Traversa, MGT's Chief Financial Officer concluded, "We are very pleased by the strengthening of the Company's balance sheet that resulted from transactions in the second quarter. We appreciate the support of our investors and shareholders as we position our Company for growth in this exciting strategy."
The Company recently closed its previously announced acquisitions of mobile gaming assets from Digital Angel as well as the majority interest of FanTD LLC. We will continue to update investors as MGT grows its footprint in the skill-based online and mobile gaming and wagering space.