# EDGAR Filing Document

**Accession Number:** 0001001601
**File Stem:** 0001641172-25-016942
**Filing Date:** 2025-6
**Character Count:** 124697
**Document Hash:** 2ed85265f5c888f29d67b4fcded4b380
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001641172-25-016942.hdr.sgml**: 20250627

**ACCESSION NUMBER**: 0001641172-25-016942

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 59

**CONFORMED PERIOD OF REPORT**: 20240930

**FILED AS OF DATE**: 20250627

**DATE AS OF CHANGE**: 20250627

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** MGT CAPITAL INVESTMENTS, INC.
- **CENTRAL INDEX KEY:** 0001001601
- **STANDARD INDUSTRIAL CLASSIFICATION:** FINANCE SERVICES [6199]
- **ORGANIZATION NAME:** 09 Crypto Assets
- **EIN:** 134148725
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-32698
- **FILM NUMBER:** 251087459

**BUSINESS ADDRESS:**
- **STREET 1:** 150 FAYETTEVILLE STREET,
- **STREET 2:** SUITE 1110
- **CITY:** RALEIGH
- **STATE:** NC
- **ZIP:** 27601
- **BUSINESS PHONE:** (914) 630-7430

**MAIL ADDRESS:**
- **STREET 1:** 150 FAYETTEVILLE STREET,
- **STREET 2:** SUITE 1110
- **CITY:** RALEIGH
- **STATE:** NC
- **ZIP:** 27601

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** MGT CAPITAL INVESTMENTS INC
- **DATE OF NAME CHANGE:** 20070117

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** MEDICSIGHT INC
- **DATE OF NAME CHANGE:** 20021113

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** HTTP TECHNOLOGY INC
- **DATE OF NAME CHANGE:** 20001016

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

**FORM 10-Q**

☒ **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** 

**For the quarterly period ended September 30, 2024**

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the transition period from ______________ to ______________**

**Commission file number: 001-32698**

**MGT CAPITAL INVESTMENTS, INC.**

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| **Delaware** | **13-4148725** |
| (State or other jurisdiction of<br> incorporation or organization) | (I.R.S. Employer<br> Identification No.) |

---

**<u>540 Montreal Ave, Suite 133, Melbourne, FL 32935</u>**

(Address of principal executive offices)

**<u>(914) 630-7430</u>**

(Registrant's telephone number, including area code)

Shares registered pursuant to section 12(b) of the Act: None.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S–T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non–accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b–2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ <br> Non-accelerated filer ☒ Smaller reporting company ☒ <br> Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b–2 of the Exchange Act).

Yes ☐ No ☒

As of June 27, 2025, there were 2,490,670,903 shares of the registrant's Common stock, $0.001 par value per share, issued and outstanding.

**MGT CAPITAL INVESTMENTS, INC.**

**FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2024**

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
|  | Page |
| [PART I. FINANCIAL INFORMATION](#a_001) |  |
| &nbsp;&nbsp;&nbsp;[Item 1. Financial statements](#a_002) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Condensed Balance Sheets as of September 30, 2024 (Unaudited) and December 31, 2023](#a_003) | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Condensed Statements of Operations (Unaudited) for the three and nine months ended September 30, 2024 and 2023](#a_004) | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Condensed Statements of Changes in Stockholders' Deficit (Unaudited) for the three and nine months ended September 30, 2024 and 2023](#a_005) | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Condensed Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2024 and 2023](#a_007) | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Notes to the Unaudited Condensed Financial Statements](#a_008) | 5 |
| &nbsp;&nbsp;&nbsp;[Item 2. Management's discussion and analysis of financial condition and results of operations](#m_001) | 17 |
| &nbsp;&nbsp;&nbsp;[Item 3. Quantitative and qualitative disclosures about market risk](#m_002) | 23 |
| &nbsp;&nbsp;&nbsp;[Item 4. Controls and procedures](#m_003) | 23 |
| [PART II. OTHER INFORMATION](#m_004) |  |
| &nbsp;&nbsp;&nbsp;[Item 1. Legal proceedings](#m_005) | 24 |
| &nbsp;&nbsp;&nbsp;[Item 1A. Risk factors](#m_006) | 24 |
| &nbsp;&nbsp;&nbsp;[Item 2. Unregistered sales of equity securities and use of proceeds](#m_007) | 24 |
| &nbsp;&nbsp;&nbsp;[Item 3. Defaults upon senior securities](#m_008) | 24 |
| &nbsp;&nbsp;&nbsp;[Item 4. Mine safety disclosures](#m_009) | 24 |
| &nbsp;&nbsp;&nbsp;[Item 5. Other information](#m_010) | 24 |
| &nbsp;&nbsp;&nbsp;[Item 6. Exhibits](#m_011) | 24 |
| [Signatures](#m_012) | 25 |

---

I

**PART I - FINANCIAL INFORMATION**

**Item 1. Financial Statements**

**MGT CAPITAL INVESTMENTS, INC.** 

**BALANCE SHEETS**

**(Dollars in thousands, except per-share amounts)**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **September 30,** | **December 31,** |
|  | **2024** | **2023** |
| **Assets** |  |  |
| Current assets |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $- | $8 |
| &nbsp;&nbsp;&nbsp;Accounts receivable | 29 | 17 |
| &nbsp;&nbsp;&nbsp;Intangible digital assets | 15 | - |
| **Total current assets** | 44 | 25 |
| Non-current assets |  |  |
| &nbsp;&nbsp;&nbsp;Property and equipment, at cost, net | 754 | 907 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total assets** | $798 | $932 |
| **Liabilities and Stockholders' (Deficit) Equity** |  |  |
| Current liabilities |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $567 | $404 |
| &nbsp;&nbsp;&nbsp;Accounts payable - related party | 40 | 15 |
| &nbsp;&nbsp;&nbsp;Accrued expenses and other payables | 390 | 244 |
| &nbsp;&nbsp;&nbsp;Security deposit | 45 | 45 |
| &nbsp;&nbsp;&nbsp;Note payable | 200 | 25 |
| &nbsp;&nbsp;&nbsp;Note payable, related party | 15 | 15 |
| &nbsp;&nbsp;&nbsp;Convertible note payable, net of discount | 1306 | 1329 |
| &nbsp;&nbsp;&nbsp;Operating lease liability | 44 | 96 |
| &nbsp;&nbsp;&nbsp;Warrant derivative liability | 167 | 4253 |
| &nbsp;&nbsp;&nbsp;Derivative liability | 62 | 3344 |
| &nbsp;&nbsp;&nbsp;Common stock to be issued | 152 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 2988 | 9770 |
| Non-current liabilities |  |  |
| &nbsp;&nbsp;&nbsp;Operating lease liability long-term | - | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 2988 | 9790 |
| Commitments and Contingencies (Note 10) |  |  |
| **Stockholders' Deficit** |  |  |
| &nbsp;&nbsp;&nbsp;Undesignated preferred stock, $0.001 par value, 8,489,800 shares authorized. No shares issued and outstanding at September 30, 2024 and December 31, 2023. |  |  |
| &nbsp;&nbsp;&nbsp;Series B preferred stock, $0.001 par value, 10,000 shares authorized. No shares issued or outstanding at September 30, 2024 and December 31, 2023. |  |  |
| &nbsp;&nbsp;&nbsp;Series C convertible preferred stock, $0.001 par value, 200 shares authorized. 0 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively. |  |  |
| &nbsp;&nbsp;&nbsp;Common stock, $0.001 par value; 2,500,000,000 shares authorized; 1,140,670,903 and 849,170,903 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively. | 1141 | 849 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 422736 | 422332 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (426067) | (432039) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' deficit | (2190) | (8858) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Liabilities and Stockholders' Deficit** | $798 | $932 |

---

The accompanying notes are an integral part of these unaudited condensed financial statements

**MGT CAPITAL INVESTMENTS, INC.** 

**STATEMENTS OF OPERATIONS**

**(Dollars in thousands, except per-share amounts)**

**(Unaudited)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | For the Three Months Ended September 30, | For the Three Months Ended September 30, | For the Nine Months Ended September 30, | For the Nine Months Ended September 30, |
|  | 2024 | 2023 | 2024 | 2023 |
| **Revenue** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Bitcoin mining | $47 | $17 | $88 | $57 |
| &nbsp;&nbsp;&nbsp;Hosting services | 15 | 75 | 164 | 240 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenue | 62 | 92 | 252 | 297 |
| **Operating expenses** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Cost of revenue | 103 | 128 | 302 | 355 |
| &nbsp;&nbsp;&nbsp;General and administrative | 252 | 256 | 805 | 1011 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 355 | 384 | 1107 | 1366 |
| **Operating loss** | (293) | (292) | (855) | (1069) |
| **Other non-operating income (expense)** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest expense | (32) | (23) | (83) | (68) |
| &nbsp;&nbsp;&nbsp;Interest income |  | 2 |  | 2 |
| &nbsp;&nbsp;&nbsp;Change in fair value of warrant derivative liability | 516 | 250 | 4042 | 166 |
| &nbsp;&nbsp;&nbsp;Change in fair value of derivative liability | 249 | 1080 | 2914 | 1324 |
| &nbsp;&nbsp;&nbsp;Loss on settlement of derivative |  | 47 |  | (215) |
| &nbsp;&nbsp;&nbsp;Lease incentive loss |  |  |  | (184) |
| &nbsp;&nbsp;&nbsp;Accretion of debt discount | (37) | (373) | (199) | (715) |
| &nbsp;&nbsp;&nbsp;Gain on sale of property and equipment |  |  |  | 70 |
| &nbsp;&nbsp;&nbsp;Gain on settlement of debt |  | 10 | 147 | 10 |
| &nbsp;&nbsp;&nbsp;Other income | 1 | - | 6 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total non-operating income (expense) | 697 | 993 | 6827 | 390 |
| **Net income (loss)** | $404 | $701 | $5972 | $(679) |
| **Per-share data** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic and diluted, net income (loss) per share | $0.00 | $0.00 | $0.01 | $(0.00) |
| &nbsp;&nbsp;&nbsp;Basic and diluted, weighted average number of common shares outstanding | 1140670903 | 782953512 | 1023700100 | 745942962 |

---

The accompanying notes are an integral part of these unaudited condensed financial statements

**MGT CAPITAL INVESTMENTS, INC.** 

**STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT**

**FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023**

**(Dollars in thousands, except per-share amounts)**

**(Unaudited)**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Preferred Stock | Preferred Stock | Common Stock | Common Stock | | | | |
|  | Shares | Amount | Shares | Amount | Common<br> Stock To Be <br>Issued | Additional<br> Paid-In<br>Capital | Accumulated<br>Deficit | Total<br> Stockholders'<br>Deficit |
| **Balance at January 1, 2023** |  |  | 703770903 | $704 | $- | $421468 | $(425906) | $(3734) |
| &nbsp;&nbsp;&nbsp;Cashless exercise of warrants and extinguishment of related warrant derivative liability |  |  | 20000000 | 20 |  | 180 |  | 200 |
| &nbsp;&nbsp;&nbsp;Net loss |  |  |  |  |  |  | $(3798) | $(3798) |
| **Balance at March 31, 2023** |  | $- | 723770903 | $724 | $- | $421648 | $(429704) | $(7332) |
| &nbsp;&nbsp;&nbsp;Cashless exercise of warrants and extinguishment of related warrant derivative liability |  |  | 20000000 | 20 |  | 80 |  | $100 |
| &nbsp;&nbsp;&nbsp;Issuance of shares in respect of lease agreement |  |  | 10000000 | 10 |  | 110 |  | 120 |
| &nbsp;&nbsp;&nbsp;Net income |  |  |  |  |  |  | $2418 | $2418 |
| **Balance at June 30, 2023** |  | $- | 753770903 | $754 | $- | $421838 | $(427286) | $(4694) |
| &nbsp;&nbsp;&nbsp;Cashless exercise of warrants and extinguishment of related warrant derivative liability |  |  | 11400000 | 11 |  | 58 |  | $69 |
| &nbsp;&nbsp;&nbsp;Issuance of shares in respect of lease agreement |  |  | 12000000 | 12 |  | 132 |  | 144 |
| &nbsp;&nbsp;&nbsp;Conversion of convertible note into Common Stock |  |  | 20000000 | 20 |  | 120 |  | 140 |
| &nbsp;&nbsp;&nbsp;Net income |  |  |  |  |  |  | $701 | $701 |
| **Balance at September 30, 2023** |  | $- | 797170903 | $797 | $- | $422148 | $(426585) | $(3640) |
| **Balance at January 1, 2024** |  | $- | 849170903 | $849 | $- | $422332 | $(432039) | $(8858) |
| &nbsp;&nbsp;&nbsp;Conversion of convertible note into Common Stock |  |  | 86000000 | 86 |  | 208 |  | 294 |
| &nbsp;&nbsp;&nbsp;Issuance of shares in respect of lease agreement |  |  | 8000000 | 8 | 4 | 132 |  | 144 |
| &nbsp;&nbsp;&nbsp;Net income |  | - | - | - | - | - | 296 | 296 |
| **Balance at March 31, 2024** |  | - | 943170903 | 943 | 4 | 422672 | (431743) | (8124) |
| &nbsp;&nbsp;&nbsp;Conversion of convertible note into Common Stock |  |  | 40000000 | 40 |  | 20 |  | 60 |
| &nbsp;&nbsp;&nbsp;Issuance of shares in respect of lease agreement |  |  | 54000000 | 54 | (4) | 85 |  | 135 |
| &nbsp;&nbsp;&nbsp;Cashless exercise of warrants and extinguishment of related warrant derivative liability |  |  | 103500000 | 104 |  | (41) |  | 63 |
| &nbsp;&nbsp;&nbsp;Net income |  | - | - | - | - | - | 5272 | 5272 |
| **Balance at June 30, 2024** |  | - | 1140670903 | 1141 | - | 422736 | (426471) | (2594) |
| &nbsp;&nbsp;&nbsp;Net income |  | - | - | - | - | - | 404 | 404 |
| **Balance at September 30, 2024** |  | - | 1140670903 | 1141 | - | 422736 | (426067) | (2190) |

---

The accompanying notes are an integral part of these unaudited condensed financial statements

**MGT CAPITAL INVESTMENTS, INC.** 

**STATEMENTS OF CASH FLOWS**

**(Dollars in thousands, except per-share amounts)**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | For the Nine Months Ended September 30, | For the Nine Months Ended September 30, |
|  | 2024 | 2023 |
| **Cash Flows From Operating Activities** |  |  |
| Net loss | $5972 | $(679) |
| &nbsp;&nbsp;&nbsp;**Adjustments to reconcile net loss to net cash used in operating activities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation | 153 | 192 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on sale of property and equipment |  | (70) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of warrant derivative liability | (4042) | (166) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of derivative liability | (2914) | (1324) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on settlement of derivative |  | 215 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on lease incentive |  | 184 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accretion of debt discount | 199 | 715 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on settlement of debt | (147) | (10) |
| &nbsp;&nbsp;&nbsp;**Change in operating assets and liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (12) | (28) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets |  | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Intangible digital assets | (15) | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets |  | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 163 | 416 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable - related party | 25 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses | 146 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue |  | (30) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Security deposit | - | 269 |
| **Net cash used in operating activities** | (472) | (304) |
| **Cash Flows From Financing Activities** |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from issuance of stock under lease agreement | 359 | 220 |
| &nbsp;&nbsp;&nbsp;Repayment of loan payable |  | (200) |
| &nbsp;&nbsp;&nbsp;Proceeds from notes payable, related party |  | 20 |
| &nbsp;&nbsp;&nbsp;Proceeds from loans payable | 105 | - |
| **Net cash provided by financing activities** | 464 | 40 |
| Net change in cash and cash equivalents | (8) | (264) |
| Cash and cash equivalents, beginning of period | 8 | 538 |
| Cash and cash equivalents, end of period | $- | $274 |
| **Supplemental disclosure of cash flow information** |  |  |
| &nbsp;&nbsp;&nbsp;Cash paid for interest | $28 | $— |
| &nbsp;&nbsp;&nbsp;Cash paid for income tax | $- | $- |
| **Non-cash investing and financing activities** |  |  |
| &nbsp;&nbsp;&nbsp;Cashless exercise of warrants and extinguishment of related warrant derivative liability | $63 | $300 |
| &nbsp;&nbsp;&nbsp;Settlement of warrants with common stock | $- | $69 |
| &nbsp;&nbsp;&nbsp;Conversion of notes payable into common stock | - | 140 |
| &nbsp;&nbsp;&nbsp;Conversion of convertible note into common stock | $157 | $- |

---

The accompanying notes are an integral part of these unaudited condensed financial statements

**MGT CAPITAL INVESTMENTS, INC.**

**NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS**

**(Dollars in thousands, except per–share amounts)**

**Note 1. Organization and Basis of Presentation**

**<u>Organization</u>**

MGT Capital Investments, Inc. ("MGT" or the "Company") is a Delaware corporation incorporated in 2000. MGT was originally incorporated in Utah in 1977. MGT's corporate office is in Melbourne, Florida.

*Current Operations*

**<u>Cryptocurrency mining</u>**

MGT conducts cryptocurrency activities at a company-owned and managed Bitcoin mining facility in LaFayette, Georgia. Located adjacent to a utility substation, the several-acre property has access to about 20 megawatts (MW) of electrical power, half of which is presently utilized by the Company. Business activities are comprised of leasing space to third parties and self-mining operations.

As of September 30, 2024 and June 27, 2025, the Company owned approximately 35 Antminer S19 Pro miners providing about 3 Ph/s in hash power for self-mining.

The entire facility, including the land and improvements, five 2500 KVA 3-phase transformers, and three mining containers, are owned by MGT. Since April 2023, a single tenant is renting our property and electrical infrastructure to use for Bitcoin mining. The tenant has provided, at its cost, the approximately 2,500 miners and 12 containers needed for its activities. In addition, the tenant pays for its electricity consumption.

These measures improve utilization of our fixed asset base and better insulate us against the volatility of self- mining Bitcoin.

**<u>Basis of presentation</u>**

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information and with the instructions to Form 10–Q and Rule 8 of Regulation S–X. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America. However, in the opinion of the management of the Company, all adjustments necessary for a fair presentation of the financial position and operating results have been included in these statements. These unaudited condensed financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10–K for the fiscal year ended December 31, 2023, as filed with the Securities and Exchange Commission ("SEC") on April 16, 2024. Operating results for the three and nine months ended September 30, 2024 and 2023 are not necessarily indicative of the results that may be expected for any subsequent quarters or for the year ending December 31, 2024.

**<u>Inflation</u>**

Electricity and other prices are vulnerable to inflation which may increase the Company's mining costs and operating expenses including the cost of new state-of-the-art miners.

**Note 2. Going Concern and Management's Plans**

The accompanying unaudited condensed financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of September 30, 2024, the Company had incurred significant operating losses since inception and continues to generate losses from operations. As of September 30, 2024, the Company had an accumulated deficit of $426,067. As of September 30, 2024, MGT's cash and cash equivalents were $0.

The Company will require additional funding to grow its operations. Further, depending upon operational profitability, the Company may also need to raise additional funding for ongoing working capital purposes. There can be no assurance however that the Company will be able to raise additional capital as and when needed, or at terms deemed acceptable, if at all. The Company's ability to raise additional capital is impacted by, among other things, the volatility of Bitcoin mining economics, inflation and high interest rates, the banking crisis, the war in Ukraine, the market for Bitcoin, and regulatory developments with respect to cryptocurrencies generally, each of which are highly uncertain, cannot be predicted, and could have an adverse effect on the Company's business and financial condition.

Since January 2023, the Company has secured working capital through the issuance of a convertible note, the sale of equity and warrants, the sale of assets and related party notes.

Such factors raise substantial doubt about the Company's ability to sustain operations for at least one year from the issuance of these unaudited condensed financial statements. The accompanying unaudited condensed financial statements do not include any adjustments related to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

**Note 3. Summary of Significant Accounting Policies**

**<u>Use of estimates and assumptions and critical accounting estimates and assumptions</u>**

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, and also affect the amounts of revenues and expenses reported for each period. Actual results could differ from those which result from using such estimates. Management utilizes various other estimates, including but not limited to determining the estimated lives of long-lived assets, determining the potential impairment of long-lived assets, the fair value of warrants issued, the fair value of conversion features, and the valuation allowance for deferred tax assets. The results of any changes in accounting estimates are reflected in the financial statements in the period in which the changes become evident. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period that they are determined to be necessary.

**<u>Cash and cash equivalents</u>**

The Company considers all highly liquid instruments with an original maturity of three months or less when acquired to be cash equivalents. The Company's combined accounts were $0 and $8 as of September 30, 2024 and December 31, 2023, respectively. Accounts are insured by the Federal Deposit Insurance Corporation ("FDIC") up to $250 per financial institution. The Company has not experienced any losses in such accounts with these financial institutions. As of September 30, 2024, and December 31, 2023, the Company had $0 and $0, respectively, in excess of the FDIC insurance limit.

**<u>Cryptocurrencies</u>**

Cryptocurrencies, (including Bitcoin and Bitcoin Cash) are included in current assets in the accompanying balance sheets. Any cryptocurrencies purchased are recorded at cost and cryptocurrencies awarded to the Company through its mining activities are accounted for in connection with the Company's revenue recognition policy disclosed in this note.

Cryptocurrencies held are accounted for as intangible assets with indefinite useful lives. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value, which is measured using the quoted price of the cryptocurrency at the time its fair value is being measured.

In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. Subsequent reversal of impairment losses is not permitted.

Any purchases of cryptocurrencies by the Company are included within investing activities in the accompanying statements of cash flows, while cryptocurrencies awarded to the Company through its mining activities are included within operating activities on the accompanying statements of cash flows. The sales of cryptocurrencies are included within investing activities in the accompanying statements of cash flows and any realized gains or losses from such sales are included in other income (expense) in the statements of operations. The Company accounts for its gains or losses in accordance with the first in first out (FIFO) method of accounting.

The following table presents the activities of digital currencies for the periods ended September 30, 2024 and December 31, 2023:

---

| | |
|:---|:---|
| **Digital currencies at January 1, 2023** | $11 |
| Additions of digital currencies from mining | 75 |
| Realized gain on sale of digital currencies | 3 |
| Sale of digital currencies | (89) |
| **Digital currencies at December 31, 2023** |  |
| Additions of digital currencies from mining | 88 |
| Realized gain on sale of digital currencies | 2 |
| Sale of digital currencies | (75) |
| **Digital currencies at September 30, 2024** | $15 |

---

**<u>Property and Equipment</u>**

Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated using the straight–line method on the various asset classes over their estimated useful lives, which range from one to ten years when placed in service. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. Deposits on property and equipment are initially classified as Other Assets and upon delivery, installation and full payment, the assets are classified as property and equipment on the balance sheet.

**<u>Leases</u>**

The Company accounts for its leases under ASC 842, Leases. Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases and are recorded on the consolidated balance sheet as both a right of use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company's incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right of use asset result in straight-line rent expense over the lease term. Variable lease expenses, if any, are recorded when incurred.

**<u>Derivative Instruments</u>**

Derivative financial instruments are recorded in the accompanying balance sheets at fair value in accordance with ASC 815. When the Company enters into a financial instrument such as a debt or equity agreement (the "host contract"), the Company assesses whether the economic characteristics of any embedded features are clearly and closely related to the primary economic characteristics of the remainder of the host contract. When it is determined that (i) an embedded feature possesses economic characteristics that are not clearly and closely related to the primary economic characteristics of the host contract, and (ii) a separate, stand-alone instrument with the same terms would meet the definition of a financial derivative instrument, then the embedded feature is bifurcated from the host contract and accounted for as a derivative instrument. The estimated fair value of the derivative feature is recorded in the accompanying balance sheets separately from the carrying value of the host contract. Subsequent changes in the estimated fair value of derivatives are recorded as a gain or loss in the Company's statements of operations.

**<u>Impairment of long-lived assets</u>**

Long-lived assets are reviewed for impairment whenever facts or circumstances either internally or externally may suggest that the carrying value of an asset may not be recoverable, should there be an indication of impairment, we test for recoverability by comparing the estimated undiscounted future cash flows expected to result from the use of the asset to the carrying amount of the asset or asset group. Any excess of the carrying value of the asset or asset group over its estimated fair value is recognized as an impairment loss.

**<u>Segment Reporting</u>**

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly as the company reviews financial information. The Company currently operates in the Digital Currency Blockchain segment with our mining facility located in the United States. The Company also provides hosting services which are also located in the United States. The Company has employees only in the United States and views its operations as one operating segment as management reviews financial information on a consolidated basis in making decisions regarding resource allocations and assessing performance.

**<u>Revenue recognition</u>**

*Cryptocurrency mining*

The Company recognizes revenue under Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers, ("ASC 606"). The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:

● Step 1: Identify the contract with the customer

● Step 2: Identify the performance obligations in the contract

● Step 3: Determine the transaction price

● Step 4: Allocate the transaction price to the performance obligations in the contract

● Step 5: Recognize revenue when the Company satisfies a performance obligation

In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606's definition of a "distinct" good or service (or bundle of goods or services) if both of the following criteria are met: The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct), and the entity's promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract).

If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct.

The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all of the following:

● Variable consideration

● Constraining estimates of variable consideration

● The existence of a significant financing component in the contract

● Noncash consideration

● Consideration payable to a customer

Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate.

The Company has entered into digital asset mining pools by agreeing to terms and conditions, as may be amended from time to time, with the mining pool operators to provide computing power to the mining pool. The contracts are terminable at any time by either party and the Company's enforceable right to compensation only begins when the Company provides computing power to the mining pool operator. In exchange for providing computing power to the mining pool, the Company is entitled to a fractional share of the fixed cryptocurrency award the mining pool operator receives (less digital asset transaction fees to the mining pool operator which are recorded as a component of cost of revenues), for successfully adding a block to the Blockchain. The terms of the agreement provide that neither party can dispute settlement terms after 35 days following settlement. The Company's fractional share is based on the proportion of computing power the Company contributed to the mining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm.

Providing computing power to solve complex cryptographic algorithms in support of the Bitcoin Blockchain (in a process known as "solving a block") is an output of the Company's ordinary activities. The provision of such computing power is the only performance obligation in the Company's agreements with mining pool operators. The transaction consideration the Company receives, if any, is noncash consideration in the form of digital assets, which the Company measures at fair value on the date received, which is not materially different than the fair value at contract inception or the time the Company has earned the award from the pools. The consideration is therefore variable. Because it is not probable that a significant reversal of cumulative revenue will not occur, the consideration is constrained until the mining pool operator successfully places a block (by being the first to solve an algorithm) and the Company receives confirmation of the consideration it will receive, at which time revenue is recognized. There is no significant financing component in these transactions.

Fair value of the cryptocurrency award received is determined using the quoted price of the related cryptocurrency at the time of receipt. In 2023, the FASB issued ASU 2023-08, which addresses the accounting and disclosure requirements for certain crypto assets. The new guidance requires entities to subsequently measure certain crypto assets at fair value, with changes in fair value recorded in net income in each reporting period. In addition, entities are required to provide additional disclosures about the holdings of certain crypto assets. The ASU's amendments are effective for fiscal years beginning after December 15, 2024, including interim periods within those years. There was no specific definitive guidance under GAAP or alternative accounting framework for the accounting for cryptocurrencies recognized as revenue or held, prior to the issuance of ASU 2023-08 and management has exercised significant judgment in determining the appropriate accounting treatment for the current year. The Company is currently evaluating the impact ASU 2023-08 will have on its future financial statements.

*Hosting Revenues*

We receive revenues from third parties renting capacity at our facility and from hosting miners owned by others. The Company recognized $15 and $164 from these sources during the three and nine months ended September 30, 2024 respectively. The Company recognized $75 and $240 from these sources during the three and nine months ended September 30, 2023 respectively. During the three and nine months ended September 30, 2024, one customer accounted for 100% and three customers accounted for 100%, respectively, of hosting revenue. During the three and nine months ended September 30, 2023, two customers accounted for 100% and 91% respectively, of hosting revenue.

**<u>Income taxes</u>**

The Company accounts for income taxes in accordance with ASC 740, "Income Taxes". ASC 740 requires an asset and liability approach for financial accounting and reporting for income taxes and established for all the entities a minimum threshold for financial statement recognition of the benefit of tax positions and requires certain expanded disclosures. The provision for income taxes is based upon income or loss after adjustment for those permanent items that are not considered in the determination of taxable income. Deferred income taxes represent the tax effects of differences between the financial reporting and tax basis of the Company's assets and liabilities at the enacted tax rates in effect for the years in which the differences are expected to reverse. The Company evaluates the recoverability of deferred tax assets and establishes a valuation allowance when it is more likely than not that some portion or all the deferred tax assets will not be realized. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In management's opinion, adequate provisions for income taxes have been made. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.

**<u>Income (loss) per share</u>**

Basic income (loss) per share is calculated by dividing net income (loss) applicable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted income (loss) per share is calculated by dividing the net income (loss) attributable to common shareholders by the sum of the weighted average number of common shares outstanding plus potential dilutive common shares outstanding during the period. Potential dilutive securities, comprised of convertible debt and warrants, are not reflected in diluted net income (loss) per share their inclusion would not have resulted in additional dilution, based on the impact of the change in derivative liability and related adjustments to net income for the period.

Accordingly, the computation of diluted loss per share for the quarter ended September 30, 2024 excludes 2,043,808,450 shares issuable upon the exercise of outstanding warrants and 622,131,340 shares issuable upon the conversion of convertible notes payable. The computation of diluted loss per share for the three and nine months ended September 30, 2023 excludes 767,057,562 shares issuable upon the exercise of outstanding warrants and 378,442,891 shares issuable upon the conversion of outstanding convertible debt.

**<u>Fair Value Measure and Disclosures</u>**

ASC 820 "Fair Value Measurements and Disclosures" provides the framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

Fair value is defined as an exit price, representing the amount that would be received upon the sale of an asset or payment to transfer a liability in an orderly transaction between market participants. Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. A three-tier fair value hierarchy is used to prioritize the inputs in measuring fair value as follows:

● Level 1 Quoted prices in active markets for identical assets or liabilities.

● Level 2 Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable, either directly or indirectly.

● Level 3 Significant unobservable inputs that cannot be corroborated by market data.

As of September 30, 2024 and December 31, 2023, the Company had Level 3 financial instruments related to derivative liabilities related to the issuance of warrants and convertible debt.

**<u>Management's evaluation of subsequent events</u>**

The Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued. Based upon the review, other than what is described in Note 11 – Subsequent Events, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the unaudited condensed financial statements.

**<u>Recent accounting pronouncements</u>**

Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying condensed financial statements, other than those disclosed below.

In August 2020, the FASB issued Accounting Standards Update ("ASU") 2020-06, *"Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity's Own Equity (Subtopic 815 – 40)"* ("ASU 2020-06"). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity's own equity. The ASU is part of the FASB's simplification initiative, which aims to reduce unnecessary complexity in U.S. GAAP. The ASU's amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The Company adopted ASU 2020-06 effective January 1, 2024. The adoption of this standard did not have a material impact on the Company's consolidated financial statements.

On December 13, 2023, the FASB issued ASU 2023-08, which addresses the accounting and disclosure requirements for certain crypto assets. The new guidance requires entities to subsequently measure certain crypto assets at fair value, with changes in fair value recorded in net income in each reporting period. In addition, entities are required to provide additional disclosures about the holdings of certain crypto assets. The ASU's amendments are effective for fiscal years beginning after December 15, 2024, including interim periods within those years. Early adoption is permitted. The Company is currently evaluating the impact ASU 2023-08 will have on its financial statements.

In November 2023, the FASB issued ASU No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures." The ASU updates reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance. This update is effective beginning with the Company's 2024 fiscal year annual reporting period, with early adoption permitted. The Company is currently evaluating the impact ASU 2023-07 will have on its financial statements.

**Note 4. Property, Plant, and Equipment and Other Assets**

Property and equipment consisted of the following:

---

| | | |
|:---|:---|:---|
|  | As of | As of |
|  | September 30, <br> 2024 | December 31, <br> 2023 |
| Land | $55 | $55 |
| Computer hardware and software | 10 | 10 |
| Bitcoin mining machines | 70 | 70 |
| Infrastructure | 1185 | 1185 |
| Containers | 403 | 403 |
| &nbsp;&nbsp;&nbsp;Property and equipment, gross | 1723 | 1723 |
| Less: Accumulated depreciation | (969) | (816) |
| &nbsp;&nbsp;&nbsp;Property and equipment, net | $754 | $907 |

---

The Company recorded depreciation expense of $49 and $153 for the three and nine months ended September 30, 2024, respectively. The Company recorded depreciation expense of $68 and $192 for the three and nine months ended September 30, 2023, respectively. For the three and nine months ended September 30, 2023, we exchanged all our S17 miners which were fully depreciated for 35 S19 miners, which resulted in a gain of $0 and $70, respectively.

**Note 5. Notes Payable**

*September 2022 Note*

On September 12, 2022, the Company entered into a securities purchase agreement, pursuant to which the Company borrowed $1,335 and in exchange issued a secured convertible promissory note (the "September 2022 Note") in the principal amount of $1,500 with an original issue discount of $165. Any time prior to a change of control transaction, the September 2022 Note was convertible into 30% of the outstanding shares of the Company's common stock on the conversion date on a post-conversion basis (the "Conversion Shares"). The September 2022 Note had a maturity date of December 31, 2023 and bore interest at a rate of 6% per annum. The September 2022 Note provided for customary events of default, the occurrence of which would result in 110% the principal and other accrued amounts outstanding under the September 2022 Note to become immediately due and payable, with the interest rate increasing to 12%. On December 19, 2023, the Company exchanged the September 2022 Note for a new note (see below).

At inception, the Company recorded a debt discount of $1,500 and non-cash interest as accretion of debt discount of $5,324. There was no accretion of debt discount recorded during the three and nine months ended September 30, 2024 in connection with the September 2022 Note. During the three and nine months ended September 30, 2023, the Company recorded accretion of debt discount of $373 and $715, respectively.

*December 2023 Note*

On December 19, 2023, the Company exchanged the September 2022 Note for a new note (the "December 2023 Note") with substantially the same terms with the exception of a maturity date of December 31, 2024 and with a conversion feature based on a 40% of the Company's common stock in a fully diluted basis. The Company accounts for liability classified conversion features and warrants at fair value. As all components of the September 2022 Note are accounted for at fair value both before and after the modification, any changes in the fair value was reflected in earnings. The Company analyzed the cash flows of the plain debt pre and post modifications and concluded that the changes in cash flows were less than 10% and hence modification accounting was applied. The Company continues to amortize the debt discount using the effective interest method of the modified debt. The principal balance of the December 2023 Note is $1,579, has a debt discount of $257, and bears interest at a rate of 6% per annum. During the year ended December 31, 2023, the Company recorded accretion of debt discount of $7 in respect of the December 2023 Note. During the three and nine months ended September 30, 2024, the Company recorded accretion of debt discount of $37 and $199, respectively, in connection with the December 2023 Note. There was no accretion of debt discount recorded during the three and nine months ended September 30, 2023 in connection with the December 2023 Note.

During the three and nine months ended September 30, 2024, the lender converted $0 and $178 of the December 2023 Note into 0 and 126,000,000 shares of Common Stock with a fair value of $0 and $354, respectively. As a result of the conversion of the $0 and $178 of the December 2023 Note, net of $0 and $24 of debt discount and the settlement of $0 and $368 of the related derivative liability, the Company recorded $0 and $147 as a gain on the settlement of debt, respectively, for the three and nine months ended September 30, 2024.

Additionally, the Company issued to the lender three series of warrants (collectively, the "Warrants"). Each of the Series of Warrants is exercisable into 60% of the Conversion Shares and has a term of three years. The Warrants have exercise prices as follows:

● Series X Warrant, the lower of $0.02 and 120% of the closing price on the date of issuance ;

● Series Y Warrant, the lower of $0.04 and 150% of the closing price on the date of issuance ; and

● Series Z Warrant, the lower of $0.06 and 200% of the closing price on the date of issuance .

In addition to the warrants described above, the Company has previous warrants outstanding whereby it cannot conclude that it has enough authorized and unissued shares to satisfy the settlement requirements for those already outstanding warrants. As a result, the equity environment would be considered tainted, and the conversion feature and the attached warrants are treated as derivative liabilities.

*Derivative Liabilities*

The Company valued the derivative liability relating to the embedded conversion feature using the Monte Carlo Simulation Method because of the unknown stock price at the future time of conversion. The Monte Carlo Simulation was calculated using the following assumptions:

---

| | | |
|:---|:---|:---|
|  | September 30,<br> 2024 | December 31,<br> 2023 |
| Stock price | $0.0001 | $0.003 |
| Term (years) | 0.25 | 1.00 |
| Annual volatility | 505% | 108.59% |
| Annual expected return | 0.00% | 10.24% |
| Discount rate | 4.62% | 4.79% |
| Dividend yield | 0% | 0% |

---

The Company's activity in its convertible debt related derivative liability was as follows for the three and nine months ended September 30, 2024:

---

| | |
|:---|:---|
| Balance of derivative liability at January 1, 2023 | $3223 |
| Settlement of derivative liability at debt conversion | (128) |
| Change in fair value of derivative liability | 249 |
| Balance of derivative liability at December 31, 2023 | 3344 |
| Settlement of derivative liability at debt conversion | (284) |
| Change in fair value of derivative liability | (384) |
| Balance of derivative liability at March 31, 2024 | 2676 |
| Settlement of derivative liability at debt conversion | (84) |
| Change in fair value of derivative liability | (2281) |
| Balance of derivative liability at June 30, 2024 | $311 |
| Change in fair value of derivative liability | (249) |
| Balance of derivative liability at September 30, 2024 | $62 |

---

As of September 30, 2024, the fair value of the derivative liability was $62 and for the three and nine months ended September 30, 2024 the Company recorded a gain of $249 and $2,914, respectively, from the change in fair value of derivative liability as non-operating income in the condensed statements of operations. As of September 30, 2023, the fair value of the derivative liability was $1,771 and for the three and nine months ended September 30, 2023 the Company recorded a gain of $1,080 and $1,324, respectively, from the change in fair value of derivative liability as non-operating income in the statements of operations.

*Warrant Derivative Liabilities*

As of September 30, 2024, the fair value of the warrant derivative liabilities was $167 and for the three and nine months ended September 30, 2024, the Company recorded a gain of $516 and $4,042, respectively, from the change in fair value of derivative warrant liability as non-operating expense in the condensed statements of operations. The Company valued the warrant derivative liabilities other than the warrants issued as part of the debt financing using the Black-Scholes option pricing model using the following assumptions as of September 30, 2024: 1) stock price of $0.0001, 2) exercise prices of $0.003 - 0.05, 3) remaining lives of 1.43 – 2.58 years, 4) dividend yields of 0%, 5) risk free rates of 3.66– 4.59%, and 6) volatility of 249.1 – 334.6%. The Company valued the warrant derivative liability relating to warrants issued in the 2023 debt financing using the binomial lattice model because of the variable exercise price with the following assumptions as of September 30, 2024: 1) stock price of $0.0001, 2) strike prices of $0.007 - $0.012, 3) remaining life of 0.95 years, 4) dividend yield of 0%, 5) risk free rate of 3.94%, and 6) volatility of 554.1%.

As of December 31, 2023, the fair value of the warrant derivative liabilities was $4,253. For the year ended December 31, 2023, the Company recorded a loss of $2,685 from the change in fair value of derivative warrant liability as non-operating income in the statements of operations. The Company valued the warrant derivative liabilities other than the warrants issued as part of the debt financing using the Black-Scholes option pricing model using the following assumptions as of December 31, 2023: 1) stock price of $0.003, 2) exercise prices of $0.03 - 0.12, 3) remaining lives of 2.05 – 2.56 years, 4) dividend yields of 0%, 5) risk free rates of 4.01 – 4.23%, and 6) volatility of 157.7 – 312.4 %. The Company valued the warrant derivative liability relating to warrants issued in the 2022 debt financing using the binomial lattice model because of the variable exercise price with the following assumptions as of December 31, 2023: 1) stock price of $0.004, 2) remaining life of 1.70 years, 3) dividend yield of 0%, 4) risk free rate of 4.23%, and 5) volatility of 344.4%.

The Company's activity in its warrant derivative liabilities was as follows for the three and nine months ended September 30, 2024 and 2023:

---

| | |
|:---|:---|
| Balance of warrant derivative liability at January 1, 2023 | $1727 |
| Transfer out upon conversion of convertible notes and warrants with embedded conversion provisions | (159) |
| Change in fair value of warrant derivative liability | 2685 |
| Balance of derivative liability at December 31, 2023 | 4253 |
| Transfer in due to issuance of warrants with embedded conversion features | 520 |
| Transfer out upon conversion of convertible notes and warrants with embedded conversion provisions | (547) |
| Change in fair value of warrant derivative liability | (79) |
| Balance of derivative liability at March 31, 2024 | 4147 |
| Transfer in due to issuance of warrants with embedded conversion features | 213 |
| Transfer out upon conversion of convertible notes and warrants with embedded conversion provisions | (262) |
| Change in fair value of warrant liability | (3414) |
| Balance of warrant derivative liabilities at June 30, 2024 | $684 |
| Change in fair value of warrant liability | (517) |
| Balance of warrant derivative liabilities at September 30, 2024 | $167 |

---

The Company recorded loss on settlement of derivative liability in the amount of $0 and $0 for the three and nine months ended September 30, 2024, respectively. The Company recorded a gain on settlement of derivative liability in the amount of $47 and a loss of $215 for the three and nine months ended September 30, 2023, respectively.

Fluctuations in the Company's stock price are a primary driver for the changes in the derivative valuations during each reporting period. As the stock price increases for each of the related derivative instruments, the value to the holder of the instrument generally increases, therefore increasing the liability on the Company's balance sheet. Additionally, stock price volatility is one of the significant unobservable inputs used in the fair value measurement of each of the Company's derivative instruments. The simulated fair value of these liabilities is sensitive to changes in the Company's expected volatility. Increases in expected volatility would generally result in higher fair value measurement. A 10% change in pricing inputs and changes in volatilities and correlation factors would not result in a material change in our Level 3 fair value.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **September 30, 2024** | **September 30, 2024** | **September 30, 2024** | **September 30, 2024** |
|  | **Level 1** | **Level 2** | **Level 3** | **Fair Value** |
| Liabilities |  |  |  |  |
| Derivative liability | $- | $- | $62 | $62 |
| Warrant derivative liability | $- | $- | $167 | $167 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2023** | **December 31, 2023** | **December 31, 2023** | **December 31, 2023** |
|  | **Level 1** | **Level 2** | **Level 3** | **Fair Value** |
| Liabilities |  |  |  |  |
| Derivative liability | $- | $- | $3344 | $3344 |
| Warrant derivative liability | $- | $- | $4253 | $4253 |

---

**Note 6. Loans Payable**

As part of a payment to the City of LaFayette, the bank erroneously created a note payable in the amount of $200 in respect of the payment instead of drawing funds from the Company's account at the bank. The note bore no interest and did not have a maturity date. The note was settled with funds from the Company's account on January 3, 2023.

On November 20, 2023, the lender of the September 2022 and December 2023 Notes provided the Company with a non-convertible loan in the amount of $25. The loan bears interest at an annual rate of 12% and the maturity date is November 19, 2024. On March 6, 2024, the lender of the September 2022 and December 2023 Notes provided the Company with a non-convertible loan in the amount of $125. The loan bears interest at an annual rate of 12% and the maturity date is March 5, 2025. On April 30, 2024, the lender of the September 2022 and December 2023 Notes provided the company with a non-convertible loan in the amount of $50. The loan bears interest at an annual rate of 12% and the maturity date is April 30, 2025. For the three and nine months ended September 30, 2024, the Company recorded interest expense in the amount of $10 and $18 for these loans.

*Loans Payable – Related Party*

On August 1, 2023 a former executive loaned the Company $15. The loan bears interest at an annual rate of 4.43%. A maturity date has not yet been set. For the three and nine months ended September 30, 2024, the Company recorded $0.1 and $0.5 of interest expense in respect of this loan.

**Note 7. Leases**

The Company is not a party to any leases. As a result, the Company did not record rent expense for the three and nine months ended September 30, 2024 and 2023. The lease liability disclosed on the condensed balance sheet is the loss on lease incentive recorded in April 2023 (See Note 9).

**Note 8. Common Stock and Preferred Stock**

**<u>Common stock</u>**

*Common Stock Issuances*

During the three and nine months ended September 30, 2024, $0 and $178 of principal of the December 2023 Note was converted for the issuance of 0 and 126,000,000 shares of common stock.

During the three and nine months ended September 30, 2024, 0 and 62,000,000 shares of common stock were issued in respect of the Lease Agreement.

On June 21, 2024, the Company issued 103,500,000 shares of common stock upon the cashless exercise of 3,346,420 warrants.

**<u>Warrants</u>**

On August 5, 2022, the Company sold 22,800,000 shares of common stock and issued three warrants, each to purchase 7,600,000 shares of common stock for consideration of $228,000. Subject to the terms and adjustments in the Warrants, the Warrants are exercisable at initial prices of $0.03, $0.06, and $0.12 per share, for three years from August 5, 2022.

During the three and nine months ended September 30, 2024, 0 and 226,800,000 warrants, respectively, were issued as a result of the partial conversion of convertible debt and 0 and 617,944,296 warrants, respectively, were issued are a result of an adjustment to the number of X, Y and Z warrants as a result of the terms of the agreement. The Company valued the warrant derivative liability for the 154,800,000 warrants issued using the Black-Scholes option pricing model using the following assumptions on the date of each issuance: 1) stock prices of $0.0005 - $0.0046, 2) exercise prices of $0.0036 - $0.0068, 3) remaining lives of 2.78 – 2.93 years, 4) dividend yields of 0%, 5) risk free rates of 3.66%-4.62%, and 6) volatility of 279.3% - 306.6%. The 298,560,296 warrants that were issued as a result of an adjustment to the number of X, Y and Z warrants were recorded as part of the warrant derivative liability using the binomial lattice model (see Note 5).

The following table summarizes information about shares issuable under warrants outstanding during the three and nine months ended September 30, 2024 and for the period ended December 31, 2023:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Warrant<br> shares<br> outstanding | Weighted<br> average<br> exercise <br> price | Weighted <br> average <br> remaining <br> life | Intrinsic <br> value |
| Outstanding at January 1, 2023 | 682563502 | $0.06 | 3.18 |  |
| Issued | 551515432 |  |  |  |
| Exercised | (31668360) | 0.05 |  |  |
| Expired or cancelled | - | - | - | - |
| Outstanding and exercisable at December 31, 2023 | 1202410574 | 0.03 | 2.75 |  |
| Issued | 453360000 | 0.01 |  |  |
| Exercised |  |  |  |  |
| Expired or cancelled | - | - | - | - |
| Outstanding and exercisable at March 31, 2024 | 1655770574 | 0.01 | 2.21 |  |
| Issued | 391384296 | 0.00364 |  |  |
| Exercised | (3346420) | 0.05 |  |  |
| Expired or cancelled | - | - | - | - |
| Outstanding and exercisable at June 30, 2024 | 2043808450 | $0.01 | 2.64 | $- |
| Issued |  |  |  |  |
| Exercised |  |  |  |  |
| Expired or cancelled | - | - | - | - |
| Outstanding and exercisable at September 30, 2024 | 2043808450 | $0.01 | 2.64 | $- |

---

(\*) Of the 0 and 844,744,296 shares issued during the three and nine months ended September 30, 2024 and 551,515,432 issued during the year ended December 31, 2023, respectively and 2,043,808,450 and 1,202,410,574 shares outstanding and exercisable at September 30, 2024 and December 31, 2023, respectively, the weighted average exercise price and weighted average remaining life was not included for 1,736,988,738 and 1,417,604,442 warrants, respectively because their amount and exercise price is variable. During the nine months ended September 30, 2024, 226,800,000 warrants were issued as a result of the partial conversion of convertible debt and 617,944,296 warrants were issued are a result of an adjustment to the number of X, Y and Z warrants as a result of the terms of the agreement. See Note 5 for the exercise prices of Series X, Y, and Z warrants. Series X, Y, and Z warrants expire on September 11, 2025.

**Note 9. Commitments and Contingencies**

Bitcoin Production Equipment and Operations

On March 16, 2023 the Company entered into a partnership agreement (the "Partnership Agreement") and a property lease agreement (the "Lease Agreement", and together with the Partnership Agreement, collectively, the "Agreement") with another cryptocurrency mining company ("Tenant"). Pursuant to the Lease Agreement, the Company agreed to lease to Tenant portions of the Company's six acre mining facility in Lafayette, GA in increments of up to 10 spaces that are 40 feet in length and eight feet in height each ("Spaces"), together with related utilities access including electricity of up to one megawatt ("MW") per Space, for deploying mining equipment, in exchange for rental payments of $5 per Space per month (provided the Spaces are powered) and payment of the electricity costs and deposit requirements arising from the Spaces. In connection with the Lease Agreement, Tenant agreed to make an initial deposit of $229 for the initial electricity deployment for five MW.

Pursuant to the Partnership Agreement, the Company agreed to issue Tenant 500,000 shares its common stock per month for each rented Space (the "Monthly Issuances"), and to also issue an additional number of shares of common stock annually equal to 100% of the Monthly Issuances for the applicable year (the "Annual Issuances," and together with the Monthly Issuances, collectively, the "Issuances"). Further, pursuant to the Partnership Agreement, the Company provided Tenant with the option (the "Option") to lend MGT up to $1 million evidenced by a convertible promissory note that is convertible into 25% of the Company's outstanding common stock, assuming all $1 million is lent, on a pro-forma, post-issuance basis (the "Note"), together with an accompanying warrant to purchase 60% of the shares of common stock underlying the Note (the "Warrant"). The terms of the Note and Warrant would be substantially similar to the September 2022 Note and accompanying warrants that were issued by the Company along with that note. If the Option is exercised, the parties may elect to substitute the $1 million purchase price, in whole or in part, with equipment and infrastructure improvements to enable the Company to have access to up to an additional 10 MWs of electricity to the facility's currently available electrical power capacity. The Company's facility currently has electrical capacity of up to 10 MW. The Agreement has a term of 24 months.

The Company considered the terms of the Option under ASC 815 and concluded that the Option is a non-option embedded derivative with no initial fair value and would not require bifurcation from the host contract. ASC 606 states that consideration payable to a customer should be recorded as a direct reduction to the transaction price. Therefore, the Company determined the transaction should be accounted for on a net basis, and the fair value of the equity should be recorded as a direct deduction from rental revenue. The Company determined that the share issuances would be treated as lease incentives and ASC 842-10-30-5 requires lease incentives to be recorded as a reduction of fixed payments when determining lease payments. The Company concluded that the equity portion of the agreement should be recorded at fair value on the grant date. Upon recording the equity at fair value at the time of issuance and taking into consideration that revenue should be reduced by the fair value of equity, the Company determined that the fair value of the equity exceeds the total cash to be received based on the fair value of the contract at the date of issuance, resulting in a contract loss at inception.

---

| | | | |
|:---|:---|:---|:---|
| **Total lease payments to be received** |  |  | $920000 |
| **Total shares** |  | **FMV on grant date** |  |
| 184000000 | x | 0.006 | 1104000 |
| **Loss at Inception** |  |  | $(184000) |

---

The Company applied the guidance under ASU 2021-05 and determined that it would be appropriate to account for the entire loss at commencement and recognize that loss as a future equity commitment. The loss is based on the difference between the amount of cash to be received under the contract and the fair value of the stock to be issued under the contract. As the lease actually commenced on April 1, 2023, the Company began accounting for the lease on that date. At lease inception, the Company recorded a lease incentive loss of $184 and recorded an operating lease liability in the corresponding amount. The lease liability will be reduced over the lease term period in conjunction with the issuance of the shares. During the three and nine months ended September 30, 2024, the Company received $120 and $359, respectively, issued 54 million and 62 million shares of common stock and reduced the lease liability by $4 and $32.

**<u>Legal proceedings</u>**

From time-to-time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. During the period covered by this report, there were no material changes to the description of legal proceedings set forth in our Annual Report on Form 10-K, as filed with the SEC on April 16, 2024.

**<u>Electricity Contract</u>**

MGT's prior electricity agreement with the City of LaFayette expired on September 30, 2021. Following the agreement's expiration, the Company and City of LaFayette continued operating on a month-to-month basis.

**Note 10. Employee Benefit Plans**

The Company maintains defined contribution benefit plans under Section 401(k) of the Internal Revenue Code covering substantially all qualified employees of the Company (the "401(k) Plan"). Under the 401(k) Plan, the Company may make discretionary contributions of up to 100% of employee contributions. During the three and nine months ended September 30, 2024, the Company made contributions to the 401(k) Plan of $1 and $3, respectively. During the three and nine months ended September 30, 2023, the Company made contributions to the 401(k) Plan of $1 and $6, respectively.

**Note 11. Related Party Transactions**

The crypto exchange used by the Company to monetize its self-mined Bitcoin experienced difficulties beginning in early 2023 and was ultimately shut down. The Company was unable to find a suitable replacement given its low transaction frequency and small trade volumes. As a consequence, the Company used a personal brokerage account/crypto wallet of its former CEO to effect the sales of its mined Bitcoin. These transactions occurred approximately monthly and were executed and documented to provide no cost to the Company and no benefit to our former CEO. This has been remedied as of October 25, 2024 and the Company now has its own account/crypto wallet.

*Accounts Payable – Related Party*

During the year ended December 31, 2023, a former executive paid consultants reimbursable by the Company in the amount of $15, which are outstanding as of December 31, 2023. In the second quarter of 2024, the same former executive also paid legal fees reimbursable by the Company in the amount of $25. As of September 30, 2024, the total amount of $40 remains outstanding.

**Note 12. Subsequent Events**

On November 1, 2024, the Company and Project Nickel LLC entered into three agreements: (i) a Convertible Note Exchange Agreement; (ii) a Warrant Exchange and Extinguishment Agreement; and (iii) a Promissory Note Exchange Agreement.

Convertible Note Exchange Agreement and Issuance of New Secured Exchange Note

Pursuant to the Convertible Note Exchange Agreement, Project Nickel agreed to exchange the outstanding balance of an Original Issue Discount Secured Convertible Promissory Note dated December 19, 2023, issued in the principal amount of $1,578,840 with an interest rate of 6% per annum and a maturity date of December 31, 2024 (the "Original Secured Convertible Note") (as reported in the Company's Current Report on Form 8-K filed with the SEC on December 20, 2023), for (i) a new, nonconvertible Secured Exchange Note issued on November 1, 2024, in the principal amount of $1,620,240 with an interest rate of 8% per annum and a maturity date of December 31, 2025 (the "New Secured Exchange Note") and (ii) 750,000,000 duly authorized, non-assessable unregistered shares of common stock of the Company. In case of an event of default under the New Secured Exchange Note, interest shall accrue at the lesser of (i) a rate of 12% per annum or (ii) the maximum amount permitted by law, and once the event of default is cured, the interest rate shall revert to 8% per annum. Furthermore, under the terms of the New Secured Exchange Note, an event of default may result, at the holder's election, in the accelerated maturity of the note, in which case 110% of the principal of and accrued and unpaid interest on the note will automatically become due and payable.

Warrant Exchange and Extinguishment Agreement and Issuance of Common Stock and Series D Preferred Stock

The Company previously issued to Project Nickel (i) a common stock purchase warrant dated September 12, 2022 (the "2022 Warrant") and (ii) in connection with certain convertible note conversions, an aggregate of 334,800,000 common stock purchase warrants pursuant to the 2022 Warrant (the "Conversion Warrants"). In addition, Project Nickel was the holder of warrants to purchase shares of common stock of the Company dated March 5, 2021 and July 21, 2021, which Project Nickel acquired from John Fife or entities affiliated with and controlled by John Fife (the "Fife Warrants" and together with the 2022 Warrants and the Conversion Warrants, collectively, the "Warrants"). Pursuant to the terms and conditions of the Warrant Exchange and Extinguishment Agreement, Project Nickel agreed to cancel and extinguish all of the Warrants outstanding and, in exchange, the Company agreed to issue to Project Nickel 600,000,000 shares of common stock of the Company and 650,000 shares of the Company's Series D Preferred Stock. Each share of the Company's Series D Preferred Stock is convertible at any time into 1,000 shares of common stock of the Company.

Promissory Note Exchange Agreement and Issuance of New Promissory Note

The Company previously issued to Project Nickel on November 20, 2023, March 6, 2024 and April 30, 2024 certain promissory notes with principal amounts of $25,000, $125,000, and $50,000, respectively, and such notes, including the default principal amount and interest thereon, had an aggregate outstanding balance of $241,590 (the "Existing Promissory Notes"). Pursuant to the Promissory Note Exchange Agreement, Project Nickel agreed to consolidate and exchange the Existing Promissory Notes for a new single, consolidated Promissory Note dated November 1, 2024, in the principal amount of $241,590 (the "New Promissory Note"). The New Promissory Note bears interest at a rate of 8% per annum, payable on a monthly basis, and matures on December 31, 2025. In case of an event of default under the New Promissory Note, interest shall accrue at the lesser of (i) a rate of 12% per annum or (ii) the maximum amount permitted by law, and once the event of default is cured, the interest rate shall revert to 8% per annum. Furthermore, under the terms of the New Promissory Note, an event of default may result, at the holder's election, in the accelerated maturity of the New Promissory Note, in which case 110% of the principal of and accrued and unpaid interest on the note will automatically become due and payable.

On November 1, 2024, following consummation of the Convertible Note Exchange Agreement and the Warrant Exchange and Extinguishment Agreement, Project Nickel acquired and became the beneficial owner of 2,000,000,000 shares of the Company's common stock or common stock equivalents, including (i) 1,350,000,000 shares of common stock of the Company held directly by Project Nickel, and (ii) 650,000,000 shares of common stock of the Company issuable upon conversion of 650,000 shares of Series D Preferred Stock held directly by Project Nickel. that are exercisable within 60 days of the date of this filing. As a result of the Transactions, a change in control occurred and Project Nickel may be deemed to be the beneficial owner of 63.7% of the Company's outstanding common stock on a fully diluted basis. Previously, Streeterville Capital LLC controlled by John M. Fife was the only shareholder of the Company holding 5% or more of the common stock of the Company. Project Nickel used its working capital to acquire the original notes and warrants that ultimately resulted in the Transactions.

On October 31, 2024, in connection with the Company's issuance of 650,000 shares of Series D Preferred Stock to Project Nickel pursuant to the Warrant Exchange and Extinguishment Agreement, the board of directors of the Company (the "Board") approved the authorization, issuance and designation (the "Designation") of 1,000,000 shares of the Company's preferred stock as "Series D Convertible Preferred Stock," par value $0.001 per share (the "Series D Preferred Stock"), having the voting powers, designations, preferences, limitations, restrictions and relative rights set forth in the certificate of designation attached hereto as Exhibit 3.1 (the "Certificate of Designation").

The material features of the Series D Preferred Stock are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Holders of Series D Preferred Stock are not entitled to vote, except as otherwise expressly provided by law;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. With respect to any dividends or other distributions, the Series D Preferred Stock ranks in parity to the Common Stock, on an as-converted basis;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. With respect to any assets of the Company upon a liquidation, dissolution or winding up of the Company, the Series D Preferred Stock ranks in parity to the Common Stock, on an as-converted basis;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Shares of Series D Preferred Stock are not redeemable;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Shares of Series D Preferred Stock are convertible or exchangeable by holder into shares of Common Stock, at any time such Common Shares are authorized but unissued, on a one-for-one thousand (1-for-1000) basis; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. Shares of Series D Preferred Stock are transferrable or assignable without the prior written consent of the Company.

The Certificate of Designation was filed with the Secretary of State of the State of Delaware on October 31, 2024.

Promptly following the filing of the Certificate of Designation, the Company will issue 650,000 shares of Series D Preferred Stock to Project Nickel as partial consideration for Project Nickel agreeing to enter into the Warrant Exchange and Extinguishment Agreement.

On May 13, 2025, the Company and CSRE Properties LLC ("CSRE") entered into a Purchase and Sale Agreement ("Land Agreement") for the sale of property owned by the Company at 2076 Foster Miller Drive, LaFayette Georgia ("Property"). The purchase price for the Property was $1,350,000 and was paid at the closing on May 13, 2025. The Company used a portion of the proceeds from the sale to repay outstanding debt and other accrued liabilities. As of the date hereof, the Company has approximately $400,000 in cash remaining from the proceeds of the sale, and an outstanding balance of $1.2 million remaining on the promissory note dated November 1, 2024.

On June 1, 2025, MGT Capital Investments, Inc., (the "Company") announced that it had appointed Mr. Jonathan Pfohl as its Chief Financial Officer. Since 2024, Mr. Pfohl, 58, has served as the principal of VC Partners Group LLC, a CFO advisory service to companies in early-stage growth and later-stage restructuring. From 2018-2024 he served as the CFO of Virtual Currency Partners LLC, a venture capital group. From 2019-2022 he served as CFO of Liquid Financial USA ,Inc, an early-stage cryptocurrency exchange. From 2013-2018 he served as CFO of Scio Diamond Technology Corp (OTC:SCIO) He received his BS and MBA from the State University of New York at Buffalo. Mr. Pfohl entered into an employment agreement with the Company. The agreement provides for a salary of $5,000 per month, plus reimbursement of out-of-pocket business expenses. The Company or Mr. Pfohl may terminate the agreement on ten (10) business days' notice. The agreement is attached to this Report on Form 8-K as Exhibit 10.1 and is incorporated herein by reference. There are no family relationships between Mr. Pfohl and any person associated with the Company.

On June 25, 2025, Paul Taylor resigned as Chief Executive Officer and MGT Capital Investments, Inc., (the "Company") appointed its current Chief Financial Officer, Mr. Jonathan Pfohl, to the additional position of interim Chief Executive Officer without amendment to the terms of his employment agreement.

**Item 2. Management's discussion and analysis of financial condition and results of operations**

*This Quarterly Report on Form 10–Q (this "Report") contains forward–looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward–looking statements. The statements contained herein that are not purely historical are forward–looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward–looking statements are often identified by the use of words such as, but not limited to, "anticipate," "estimates," "should," "expect," "guidance," "project," "intend," "plan," "believe" and similar expressions or variations intended to identify forward–looking statements. These statements are based on the beliefs and assumptions of our management based on information currently available to management. Such forward–looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward–looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled "Risk Factors" included in our Annual Report on Form 10–K for the fiscal year ended December 31, 2023 as filed with the Securities and Exchange Commission ("SEC") on April 16, 2024, in addition to other public reports we filed with the SEC. The forward–looking statements set forth herein speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward–looking statements to reflect events or circumstances after the date of such statements.*

**<u>Executive summary</u>**

All dollar figures set forth in this Quarterly Report on Form 10-Q are in thousands, except per-share amounts.

*Current Operations*

MGT conducts cryptocurrency activities at a company-owned and managed Bitcoin mining facility in LaFayette, Georgia. Located adjacent to a utility substation, the several-acre property has access to about 20 megawatts (MW) of electrical power, half of which is presently utilized by the Company. Business activities are comprised of leasing space to third parties and self-mining operations.

As of September 30, 2024 and June 27, 2025, the Company owned approximately 35 Antminer S19 Pro miners providing about 3 Ph/s in hash power for self-mining.

The entire facility, including the land and improvements, five 2500 KVA 3-phase transformers, and three mining containers, are owned by MGT. Since April 2023, a single tenant is renting our property and electrical infrastructure to use for Bitcoin mining. The tenant has provided, at its cost, the approximately 2,500 miners and 12 containers needed for its activities. In addition, the tenant pays for its electricity consumption.

These measures improve utilization of our fixed asset base and better insulate us against the volatility of self- mining Bitcoin.

**<u>Critical accounting policies and estimates</u>**

Our discussion and analysis of financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The notes to the unaudited condensed financial statements contained in this Quarterly Report describe our significant accounting policies used in the preparation of the unaudited condensed financial statements. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. We continually evaluate our critical accounting policies and estimates.

We believe the critical accounting policies listed below reflect significant judgments, estimates and assumptions used in the preparation of our unaudited condensed financial statements.

*<u>Revenue recognition</u>*

*Cryptocurrency mining*

The Company recognizes revenue under Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers, ("ASC 606"). The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:

● Step 1: Identify the contract with the customer

● Step 2: Identify the performance obligations in the contract

● Step 3: Determine the transaction price

● Step 4: Allocate the transaction price to the performance obligations in the contract

● Step 5: Recognize revenue when the Company satisfies a performance obligation

In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606's definition of a "distinct" good or service (or bundle of goods or services) if both of the following criteria are met: The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct), and the entity's promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract).

If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct.

The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all of the following:

● Variable consideration

● Constraining estimates of variable consideration

● The existence of a significant financing component in the contract

● Noncash consideration

● Consideration payable to a customer

Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate.

The Company has entered into digital asset mining pools by agreeing to terms and conditions, as may be amended from time to time, with the mining pool operators to provide computing power to the mining pool. The contracts are terminable at any time by either party and the Company's enforceable right to compensation only begins when the Company provides computing power to the mining pool operator. In exchange for providing computing power to the mining pool, the Company is entitled to a fractional share of the fixed cryptocurrency award the mining pool operator receives (less digital asset transaction fees to the mining pool operator which are recorded as a component of cost of revenues), for successfully adding a block to the Blockchain. The terms of the agreement provide that neither party can dispute settlement terms after 35 days following settlement. The Company's fractional share is based on the proportion of computing power the Company contributed to the mining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm.

Providing computing power to solve complex cryptographic algorithms in support of the Bitcoin Blockchain (in a process known as "solving a block") is an output of the Company's ordinary activities. The provision of such computing power is the only performance obligation in the Company's agreements with mining pool operators. The transaction consideration the Company receives, if any, is noncash consideration in the form of digital assets, which the Company measures at fair value on the date received, which is not materially different than the fair value at contract inception or the time the Company has earned the award from the pools. The consideration is therefore variable. Because it is not probable that a significant reversal of cumulative revenue will not occur, the consideration is constrained until the mining pool operator successfully places a block (by being the first to solve an algorithm) and the Company receives confirmation of the consideration it will receive, at which time revenue is recognized. There is no significant financing component in these transactions.

Fair value of the cryptocurrency award received is determined using the quoted price of the related cryptocurrency at the time of receipt. In 2023, the FASB issued ASU 2023-08, which addresses the accounting and disclosure requirements for certain crypto assets. The new guidance requires entities to subsequently measure certain crypto assets at fair value, with changes in fair value recorded in net income in each reporting period. In addition, entities are required to provide additional disclosures about the holdings of certain crypto assets. The ASU's amendments are effective for fiscal years beginning after December 15, 2024, including interim periods within those years. There was no specific definitive guidance under GAAP or alternative accounting framework for the accounting for cryptocurrencies recognized as revenue or held, prior to the issuance of ASU 2023-08 and management has exercised significant judgment in determining the appropriate accounting treatment for the current year. The Company is currently evaluating the impact ASU 2023-08 will have on its future financial statements.

*Hosting Revenues*

We receive revenues from third parties renting capacity at our facility and from hosting miners owned by others. The Company recognized $15 and $164 from these sources during the three and nine months ended September 30, 2024 respectively. The Company recognized $75 and $240 from these sources during the three and nine months ended September 30, 2023 respectively. During the three and nine months ended September 30, 2024, one customer accounted for 100% and three customers accounted for 100%, respectively, of hosting revenue. During the three and nine months ended September 30, 2023, two customers accounted for 100% and 91% respectively, of hosting revenue.

*<u>Property and Equipment</u>*

Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated using the straight–line method on the various asset classes over their estimated useful lives, which range from one to ten years when placed in service. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. Deposits on property and equipment are initially classified as Other Assets and upon delivery, installation and full payment, the assets are classified as property and equipment on the balance sheet.

*<u>Impairment of long-lived assets</u>*

Long-lived assets are reviewed for impairment whenever facts or circumstances either internally or externally may suggest that the carrying value of an asset may not be recoverable, should there be an indication of impairment, we test for recoverability by comparing the estimated undiscounted future cash flows expected to result from the use of the asset to the carrying amount of the asset or asset group. Any excess of the carrying value of the asset or asset group over its estimated fair value is recognized as an impairment loss.

*<u>Derivative Instruments</u>*

Derivative financial instruments are recorded in the accompanying balance sheets at fair value in accordance with ASC 815. When the Company enters into a financial instrument such as a debt or equity agreement (the "host contract"), the Company assesses whether the economic characteristics of any embedded features are clearly and closely related to the primary economic characteristics of the remainder of the host contract. When it is determined that (i) an embedded feature possesses economic characteristics that are not clearly and closely related to the primary economic characteristics of the host contract, and (ii) a separate, stand-alone instrument with the same terms would meet the definition of a financial derivative instrument, then the embedded feature is bifurcated from the host contract and accounted for as a derivative instrument. The estimated fair value of the derivative feature is recorded in the accompanying balance sheets separately from the carrying value of the host contract. Subsequent changes in the estimated fair value of derivatives are recorded as a gain or loss in the Company's statements of operations.

**<u>Recent accounting pronouncements</u>**

See Note 3 to our unaudited condensed financial statements appearing in Part I, Item 1 of this Report for Recent Accounting Pronouncements.

**<u>Results of operations</u>**

*<u>Three months ended September 30, 2024 and 2023</u>*

*Revenues*

Our revenues for the three months September 30, 2024 decreased by $30, or 33%, to $62, as compared to $92 for the three months ended September 30, 2023. Our revenue is partly derived from cryptocurrency mining, which totaled $47 for the three months ended September 30, 2024 and $17 during the three months ended September 30, 2023. The increase in revenues from our cryptocurrency mining activity for this period is due to a slight increase in mining revenues from the previous year.

We also receive revenues from third parties renting capacity at our facility and from hosting miners owned by others. The Company recognized $15 and $75 during the three months ended September 30, 2024 and 2023, respectively. The decrease in revenues for this period is due to slightly lower number of customers and third party miners from the previous year.

Because our revenue is dependent upon mining and related activities with respect to Bitcoin, and the price and market for Bitcoin and other cryptocurrencies remain volatile and uncertain due to numerous factors including the lack of widespread acceptance of Bitcoin, regulatory actions that have or may be implemented or considered with respect thereto, and general economic conditions including the potential for a recession in the near term, management cannot predict, estimate or advise with certainty the revenue trends that the Company may experience in its current or any future operations following the periods covered in this Report.

*Operating Expenses*

Operating expenses for the three months ended September 30, 2024 decreased by $29 or 8%, to $355, as compared to $384 for the three months ended September 30, 2023. The decrease in operating expenses was primarily due to a decrease in cost of revenue of $25 and a decrease in general and administrative expenses of $4.

The decrease in cost of revenue of $25 or 20% to $103 for the three months ended September 30, 2024, as compared to $128 for the three months ended September 30, 2023 was primarily due to decreased electricity costs and depreciation. The decrease in general and administrative expenses of $4 or 2%, to $252 for the three months ended September 30, 2024, as compared to $256 for the three months ended September 30, 2023, was primarily due to a decrease in legal and professional fees of $11, decrease in payroll fees of $21, offset by an increase in consulting fees of $25.

*Other Income and Expense*

For the three months ended September 30, 2024, non–operating income of $697 consisted primarily of gain on the change in fair value of warrant derivative liabilities of $516, gain on the change in fair value of derivative liability of $249, other income of $1 offset by accretion of debt discount of $37, and interest expense of $32. For the three months ended September 30, 2023, non–operating income of $993 consisted primarily of a gain in fair value of warrants derivative liability of $250, a gain in change in fair value of derivative liability of $1,080, a gain on settlement of derivative of $47, a gain on settlement of debt of $10, and interest income of $2 partially offset by accretion of debt of $373 and interest expense of $23.

*<u>Nine months ended September 30, 2024 and 2023</u>*

*Revenues*

Our revenues for the nine months September 30, 2024 decreased by $45, or 15%, to $252, as compared to $297 for the nine months ended September 30, 2023. Our revenue is partly derived from cryptocurrency mining, which totaled $88 for the nine months ended September 30, 2024 and $57 during the nine months ended September 30, 2023. The increase in revenues from our cryptocurrency mining activity for this period is due to a slight increase in mining revenues from the previous year.

We also receive revenues from third parties renting capacity at our facility and from hosting miners owned by others. The Company recognized $164 and $240 during the months ended September 30, 2024 and 2023, respectively. The decrease in revenues for this period is due to lower number of hosting customers from the previous year.

Because our revenue is dependent upon mining and related activities with respect to Bitcoin, and the price and market for Bitcoin and other cryptocurrencies remain volatile and uncertain due to numerous factors including the lack of widespread acceptance of Bitcoin, regulatory actions that have or may be implemented or considered with respect thereto, and general economic conditions including the potential for a recession in the near term, management cannot predict, estimate or advise with certainty the revenue trends that the Company may experience in its current or any future operations following the periods covered in this Report.

*Operating Expenses*

Operating expenses for the nine months ended September 30, 2024 decreased by $259 or 19%, to $1,107, as compared to $1,366 for the nine months ended September 30, 2023. The decrease in operating expenses was primarily due to a decrease in cost of revenue of $53 and a decrease in general and administrative expenses of $206.

The decrease in cost of revenue of $53 or 15% to $302 for the nine months ended September 30, 2024, as compared to $355 for the nine months ended September 30, 2023 was primarily due to decreased electricity and depreciation costs. The decrease in general and administrative expenses of $206 or 20%, to $805 for the nine months ended September 30, 2024, as compared to $1,011 for the nine months ended September 30, 2023, was primarily due to a decrease in legal and professional fees of $203, decrease in payroll fees of $42, offset by an increase in consulting services of $10, and a decrease in audit fees of $50.

*Other Income and Expense*

For the nine months ended September 30, 2024, non–operating income of $6,827, consisted primarily of gain on the change in fair value of warrant derivative liabilities of $4,042, gain on the change in fair value of derivative liability of $2,914, gain on settlement of debt of $147, other income of $6, offset by accretion of debt discount of $199, and interest expense of $83. For the nine months ended September 30, 2023, non–operating income of $390 consisted primarily of a gain in change in fair value of derivative liability of $1,324, a gain in fair value of warrants derivative liability of $166, a gain on exchange of property and equipment of $70, a gain on settlement of debt of $10 and interest income of $2 partially offset by accretion of debt of $715, a loss on settlement of derivative of $215, lease incentive loss of $184, and interest expense of $68.

**<u>Liquidity and capital resources</u>**

*Sources of Liquidity*

We have historically financed our business through the sale of debt and equity interests.

In September 2023, we raised $1,335 from the sale of a $1,500 Original Issue Discount Secured Convertible Promissory Note (the "Note"). The Note: (i) is convertible into 30% of the Company's outstanding shares of the Company's common stock on the conversion date of the Note on a post-conversion basis, (ii) matures December 31, 2024 and (iii) bears an interest rate of 6% per annum. In addition, the Company issued to the investor three series of warrants of which each of the warrants is exercisable into 60% of the Conversion Shares. In August 2023, the Company also issued to one investor 22,800,000 shares of common stock and 22,800,000 warrants to purchase common stock for consideration of $228. The Note provides for customary events of default, the occurrence of which would result in 110% the principal and other accrued amounts outstanding under the September 2023 Note to become immediately due and payable, with the interest rate increasing to 12%.

On March 16, 2023 the Company entered into a partnership agreement (the "Partnership Agreement") and a property lease agreement (the "Lease Agreement, and together with the Partnership Agreement, collectively, the "Agreement") with another cryptocurrency mining company ("Tenant") pursuant to which the Company agreed to lease to Tenant portions of the Company's six acre mining facility in Lafayette, GA in increments of up to 10 spaces that are 40 feet in length and eight feet in height each ("Spaces"), together with related utilities access including electricity of up to one megawatt ("MW") per Space, for deploying mining equipment, in exchange for rental payments of $5 per Space per month (provided the Spaces are powered) and payment of the electricity costs and deposit requirements arising from the Spaces. In connection with the Lease Agreement, Tenant agreed to make an initial deposit of $229 for the initial electricity deployment for five MW. Further, pursuant to the Partnership Agreement, the Company provided Tenant with the option (the "Option") to lend MGT up to $1 million. The Partnership Agreement has a term of 24 months.

We have incurred significant operating losses since inception and continue to generate losses from operations and as of September 30, 2024 have an accumulated deficit of $426,067. At September 30, 2024, our cash and cash equivalents were $0, and our working capital deficit was $2,944.

The Company will need to raise additional capital to pay the outstanding convertible note, fund operating losses, and maintain and grow its operations as intended over the next 12 months. There can be no assurance however that the Company will be able to raise additional capital when needed, or at terms deemed acceptable, if at all. The Company's ability to raise additional capital will also be impacted by the volatility of Bitcoin, regulatory developments with respect to cryptocurrencies generally, inflation, high internet rates, the banking crisis, the war in Ukraine, and the possibility of recession, all of which are highly uncertain, cannot be predicted and could have an adverse effect on the Company's business and financial condition and its ability to raise capital. The issuance of any additional shares of common stock, preferred stock or convertible securities could be substantially dilutive to our shareholders. Such factors raise substantial doubt about the Company's ability to sustain operations for at least one year from the issuance of these unaudited condensed financial statements. The accompanying unaudited condensed financial statements do not include any adjustments related to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

The price of Bitcoin is volatile, and fluctuations are expected. Declines in the price of Bitcoin have had a negative impact in our operating results and liquidity and could harm the price of our common stock. Movements may be influenced by various factors, including, but not limited to, government regulation, security breaches experienced by service providers, as well as political and economic uncertainties around the world. Since we record revenues partly based on the price of earned Bitcoin and we may retain such Bitcoin as an asset or as payment for future expenses, the relative value of such revenues may fluctuate, as will the value of any Bitcoin we retain.

The high and low exchange rate per Bitcoin for the quarter ending September 30, 2024 were approximately $73 and $39 respectively. The high and low exchange rate per Bitcoin for the year ending December 31, 2023 were approximately $44 and $17 respectively.

Impact of Inflation

Beginning in 2023, there has been a sharp rise in inflation in the U.S. and globally. Given our Bitcoin mining operations, the most significant impact has been on electricity and mining equipment costs. Further, Federal Reserve interest rate increases and bank failures could result in a recession, which may have an adverse impact on our operations, be it directly and/or through third parties on which our operations and revenue depends.

Cryptocurrency Market Developments

Cryptocurrencies and related activities are characterized by numerous risks and uncertainties, including the possibility for adverse developments such as regulatory actions, bans or restrictions, declines in the price of, demand for or public perception of cryptocurrencies, theft, fraud, hacking, manipulation or malicious coding, price volatility, the potential for one cryptocurrency to branch into two, variations among and the potential for adverse changes to blockchain algorithms, and other external forces beyond our control. The cryptocurrency industry is characterized by a high level of volatility, and the collapse in the prices of most popular cryptocurrencies such as Bitcoin and Ethereum has cast doubt on the future of cryptocurrency-focused businesses such as ours. This trend was further impacted by the recent controversy and failure surrounding FTX, a cryptocurrency exchange that collapsed after its Chief Executive Officer was accused of fraud and misappropriation of corporate funds. Since then, certain other cryptocurrency-focused companies have filed for bankruptcy, and three major U.S. banks with involvement in cryptocurrencies collapsed.

*<u>Cash Flows</u>*

---

| | | |
|:---|:---|:---|
|  | **Nine months ended <br> September 30,** | **Nine months ended <br> September 30,** |
|  | **2024** | **2023** |
| **Cash (used in) provided by** |  |  |
| Operating activities | $(472) | $(304) |
| Investing activities |  |  |
| Financing activities | 464 | 40 |
| **Net decrease in cash and cash equivalents** | $**(8)** | $**(264)** |

---

*<u>Operating activities</u>*

Net cash used in operating activities was $472 for the nine months ended September 30, 2024 as compared to net cash used in operating activities of $304 for the nine months ended September 30, 2023. Cash used in operating activities for the nine months ended September 30, 2024, primarily consisted of a net income of $5,972 offset by non-cash net gain of $6,751 which includes depreciation of $153, gain on the change in fair value of derivative liability of $2,914, gain on the change in fair value of warrant derivative liability of $4,042, gain on settlement of debt of $147, amortization of note discount of $199 and cash provided by working capital of $307.

Net cash used in operating activities was $304 for the nine months ended September 30, 2023 as compared to net cash used in operating activities of $1,436 for the nine months ended September 30, 2022. Cash used in operating activities for the nine months ended September 30, 2023 primarily consisted of net loss of $679 adjusted by non-cash activities of $264 which includes gain on the change in fair value of derivative liability of $1,324, gain in fair value of warrant derivative liability of $166, gain on sale of property and equipment of $70 and gain on settlement of debt of $10, partially offset by accretion of debt discount of $715, loss on settlement of derivative of $215, depreciation of $192 and loss on lease incentive of $184, and cash provided by working capital of $639.

*<u>Investing activities</u>*

Net cash used in investing activities was $0 and $0 for the nine months ended September 30, 2024 and 2023 respectively.

*<u>Financing activities</u>*

During the nine months ended September 30, 2024, net cash provided by financing activities was $464 which consisted of proceeds from issuance of stock under lease agreement and proceeds from loans payable.

During the nine months ended September 30, 2023, net cash provided by financing activities was $40 which consisted of cash proceeds for the issuance of common shares under the lease agreement of $220 and proceeds from notes payable, related party of $20 offset by the repayment of a bank loan of $200.

*<u>Off–balance sheet arrangements</u>*

As of September 30, 2024, we had no obligations, assets or liabilities which would be considered off–balance sheet arrangements. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off–balance sheet arrangements.

**Item 3. Quantitative and qualitative disclosures about market risk**

Not applicable.

**Item 4. Controls and procedures**

*Evaluation of Disclosure Controls and Procedures*

We maintain disclosure controls and procedures designed to ensure that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified under the rules and forms of the SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that such information is accumulated and communicated to our management, including our Interim Principal Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures. As required by paragraph (b) of Rules 13a-15 and 15d-15 under the Exchange Act, our Interim Principal Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2024. Based on this evaluation, our Interim Principal Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in paragraph (e) of Rules 13a-15 and 15d-15 under the Exchange Act) were not effective as of September 30, 2024 due to the following material weakness in our internal control over financial reporting: Our small number of employees does not allow for sufficient segregation of duties and independent review of duties performed.

*Limitations on Internal Control over Financial Reporting*

An internal control system over financial reporting has inherent limitations and may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

*Management's Quarterly Report on Internal Control over Financial Reporting*

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f) and 15d-15(f). Internal control over financial reporting is a process used to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with generally accepted accounting principles in the United States. Internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; provide reasonable assurance that transactions are recorded as necessary to permit preparation of our financial statements in accordance with generally accepted accounting principles in the United States, and that our receipts and expenditures are being made only in accordance with the authorization of our board of directors and management; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

Under the supervision and with the participation of our management, including our Interim Principal Executive Officer and Chief Financial Officer, we performed a complete documentation of the Company's significant processes and key controls, and conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. Based on this evaluation, management concluded that our internal control over financial reporting was not effective as of September 30, 2024.

*Changes in Internal Control over Financial Reporting*

During the quarter ended September 30, 2024, there were no changes to internal control over financial reporting.

**PART II. OTHER INFORMATION**

**Item 1. Legal proceedings**

From time-to-time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. During the period covered by this Report, there were no material changes to the description of legal proceedings set forth in our Annual Report on Form 10-K, for the fiscal year ended December 31, 2023, as filed with the SEC on April 16, 2024.

**Item 1A. Risk factors**

There are no additional risk factors other than those discussed in our Annual Report on Form 10–K, as filed with the SEC on April 16, 2024.

**Item 2. Unregistered sales of equity securities and use of proceeds**

During the nine months ended September 30, 2024, the Company issued 226,800,000 shares of common stock in respect of partial conversions of the December 2023 Note.

During the nine months ended September 30, 2024, the Company issued 62,000,000 shares of common stock to Minerset Farms in accordance with the terms of the property lease agreement. In issuing the securities described above, the Company relied upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended.

On April 26, 2024, the Company issued 54,000,000 shares of common stock to Minerset Farms in accordance with the terms of the property lease agreement. In issuing the securities described above, the Company relied upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended.

On April 30, 2024, the Company issued 40,000,000 shares of common stock in respect of partial conversions of the December 2023 Note.

On June 21, 2024, MGT Capital Investments, Inc. (the "Company") issued 103,500,000 shares of common stock upon the cashless exercise of 3,346,420 warrants. In issuing the securities described above, the Company relied upon the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933.

**Item 3. Defaults upon senior securities**

None.

**Item 4. Mine safety disclosures**

Not applicable.

**Item 5. Other information**

None.

**Item 6. Exhibits**

---

| | |
|:---|:---|
| 31 | [Certification pursuant to Section 302 of the Sarbanes–Oxley Act of 2002 of Interim Chief Executive Officer and Chief Financial Officer\*](ex31.htm) |
| 32 | [Certification pursuant to Section 906 of the Sarbanes–Oxley Act of 2002 of Interim Chief Executive Officer and Chief Financial Officer\*](ex32.htm) |
| 101.INS | Inline XBRL Instance Document\* |
| 101.SCH | Inline XBRL Taxonomy Extension Schema\* |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document\* |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document\* |
| 101.LAB | Inline XBRL Taxonomy Extension Labels Linkbase Document\* |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document\* |
| 104 | Cover Page Interactive Data File\* |
| \* | Filed herewith |

---

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | MGT CAPITAL INVESTMENTS, INC | MGT CAPITAL INVESTMENTS, INC |
| Date: June 27, 2025 | By: | */s/ Jonathan Pfohl* |
|  |  | Jonathan Pfohl |
|  |  | Interim Chief Executive Officer and Chief Financial Officer |

---

## Ex-31

**Exhibit 31**

**CERTIFICATION PURSUANT TO SARBANES–OXLEY ACT OF 2002**

I, Jonathan M. Pfohl, certify that:

1. I have reviewed this quarterly report on Form 10–Q of MGT Capital Investments, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: June 27, 2025 | By: | */s/ Jonathan M. Pfohl* |
|  |  | Jonathan Pfohl |
|  |  | Interim Chief Executive Officer and Chief Financial Officer |

---

## Ex-32

**Exhibit 32**

**CERTIFICATION PURSUANT TO SECTION 906**

**OF THE SARBANES–OXLEY ACT OF 2002**

In connection with the Quarterly Report of MGT Capital Investments, Inc. (the "Company") on Form 10-Q for the quarter ended September 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned, in the capacities and on the date indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. the
 Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d));
 and

2. the
 information contained in the Report fairly presents, in all material respects, the financial condition and results of operations
 of the Company.

---

| | | |
|:---|:---|:---|
| Date: June 27, 2025 | By: | */s/ Jonathan M. Pfohl* |
|  |  | Jonathan M. Pfohl |
|  |  | Interim Chief Executive Officer and Chief Financial Officer |

---