MGT Capital (MGTI) Reports Wider Q3 Loss; Updates on Recent Operations
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MGT Capital Investments, Inc. (OTC: MGTI) yesterday provided an update on its business and pending acquisitions, as well as its financial results for the three–month period ended September 30, 2016.
"We are excited by the trajectory of our businesses over the past month, which proves that perseverance and unwavering dedication to our set goals will overcome the efforts of others to slow our progress. There are several near–term milestones that will further position us as an innovator in the cybersecurity market and building shareholder value," commented John McAfee, the Company's Executive Chairman and incoming Chief Executive Officer.
"Our Bitcoin mining operations are ramping up quickly, with revenue reaching over $100,000 per month as processing power more than doubled to approximately 5.2 PetaHash in just the past week. As previously disclosed, we are ahead of schedule in building out our Bitcoin mining operations, and we expect to reach our short-term goal of 10 PetaHash at this facility by year end 2016. As one of the leading Bitcoin mining operations in the U.S., we are seeing exciting new partnership opportunities develop, including our recent Letter of Intent to launch a McAfee-branded Bitcoin mining pool with Bitmain Technologies Ltd. of China, the world's leading Bitcoin machine producer," continued McAfee.
"The launch of our initial commercial product, Sentinel was announced in October and we expect to ship product to our initial customers in the coming weeks. Market feedback for Sentinel has been positive and we have begun to build out marketing support with the recent hire of an experienced industry professional. We expect to grow this function over the coming quarters."
"The stockholder-approved acquisitions of D–Vasive and Demonsaw remain pending, as we hope to reach a revised deal structure to benefit existing shareholders. These technologies will immediately bolster our stable of innovative cybersecurity technologies to support the development of new applications and create new product opportunities," concluded McAfee.
Financial Highlights for the third quarter of 2016
Cash used in operations was $1.3 million in the third quarter of 2016, a decrease of $0.8 million, as compared to the quarter ended June 30, 2016. The decrease was primarily driven by lower legal and professional fees as the Company exercises discipline with respect to discretionary spending. This expense control coupled with revenues produced from bitcoin mining operations should result in similar results for the final quarter of 2016.
Cash and cash equivalents were $2.1 million as of September 30, 2016, compared with $0.3 million as of December 31, 2015. In addition, the Company presently has approximately $500,000 of marketable securities available for sale.
The Company's operating loss for the third quarter of 2016 was $10.8 million, an increase of $9.5 million, as compared to the previous quarter. This larger reported loss is wholly attributable to certain non–recurring, non–cash accounting charges, such as warrant modification and stock–based compensation expenses.
Financial results follow; per GAAP requirements, the operations of DraftDay.com are treated as discontinued operations. For further information, please refer to MGT's Form 10–Q filed yesterday with the SEC, and available at the Company's corporate website,www.mgtci.com, or at www.sec.gov.
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