Document:

Exhibit 4.6

 

FORM OF LETTER TO CLIENTS OF NOMINEE HOLDERS

 

[Letterhead of Dealer, Bank, Trust Company or Nominee]

31,640,472  Shares of Common Stock

Offered Pursuant to Rights Distributed to Record Stockholders of

MGT Capital Investments, Inc.

 

[●] , 2011

 

To Our Clients:

 

Enclosed for your consideration are the Prospectus, dated [●], 2011 (the “Prospectus”), and the Instructions for Use of MGT Capital Investments, Inc. Subscription Rights Certificates relating to the offering (the “Rights Offering”) by MGT Capital Investments, Inc. (the “Company”) of shares of its common stock, par value $0.001 per share (the “Common Stock”), pursuant to non-transferable and non-tradable subscription rights (the “Rights”) distributed to all holders of record of shares of Common Stock, at the close of business on November 21, 2011 (the “Record Date”).  The Rights are described in the Company’s Prospectus.

 

In the Rights Offering, the Company is offering an aggregate of 31,640,472 shares of its Common Stock (the “Underlying Shares”) pursuant to the Prospectus.  The Rights will expire, if not exercised, by 5:00 p.m., New York City Time, on December 23, 2011, unless extended in the sole discretion of the Company (as it may be extended, the “Expiration Date”).

 

As described in the accompanying Prospectus, you will receive one (1) Right for every one (1) share of Common Stock owned of record as of the close of business on the Record Date, subject to adjustments to eliminate fractional rights.

 

Each whole Right allows the holder thereof to subscribe for 0.8 share of Common Stock (the “Basic Subscription Privilege”) at the cash price of $0.025 per share (the “Subscription Price”).  Fractional Rights or cash in lieu of fractional Rights will not be issued in the Rights Offering.  Fractional Rights will be rounded up to the nearest whole number.  As an example, if you owned 1,000 shares of Common Stock as of the Record Date, you would receive 1,000 Rights pursuant to your Basic Subscription Privilege, and you would have the right to purchase 800 shares of Common Stock in the Rights Offering pursuant to your Basic Subscription Privilege.

 

In addition, each holder of Rights who exercises his Basic Subscription Privilege in full will be eligible to subscribe (the “Oversubscription Privilege”), at the same Subscription Price of $0.025 per share, for additional shares of Common Stock unclaimed by other holders of rights of this offering on a pro rata basis as of 5:00 p.m., New York City Time, on the Expiration Date (the “Excess Shares”).  “Pro rata” means in proportion to the number of shares of Common Stock that all holders of Rights who have fully exercised their Basic Subscription Privileges on their Common Stock holdings have requested to purchase pursuant to their respective Oversubscription Privileges.  Each holder of Rights may exercise his Oversubscription Privilege only if he exercised his Rights under the Basic Subscription Privilege in full and other holders of Rights do not exercise their Rights under the Basic Subscription Privilege in full.  If there is not a sufficient number of Excess Shares to satisfy all requests for subscriptions made under the Oversubscription Privilege, the Company will allocate the remaining Excess Shares    pro rata  , after eliminating all fractional shares, among those Rights holders who exercised their Oversubscription Privileges.  For the purposes of determining their eligibility for the Oversubscription Privilege, holders will be deemed to have exercised their Basic Subscription Privilege in full if they subscribe for the maximum number of Underlying Shares available under their Basic Subscription Privilege. For example, if X shareholder subscribes for 20 shares and Y shareholder subscribes for 30 shares pursuant to their oversubscription privileges, and there are only 30 shares available for oversubscription, X would receive the right to purchase 20/50 of the 30 shares available for oversubscription and Y would receive the right to purchase 30/50 of the 30 shares available for oversubscription. See “The Rights Offering—Subscription Rights” in the Prospectus.

  

  

  

 

The Rights are evidenced by subscription rights certificates (the “Subscription Rights Certificates”).  Rights may not be sold, transferred or assigned;  provided ,  however , that Rights are transferable by operation of law (for example, a transfer of Rights to the estate of a recipient upon the recipient’s death).

 

THE MATERIALS ENCLOSED ARE BEING FORWARDED TO YOU AS THE BENEFICIAL OWNER OF COMMON STOCK CARRIED BY US IN YOUR ACCOUNT BUT NOT REGISTERED IN YOUR NAME.  EXERCISES OF RIGHTS MAY BE MADE ONLY BY US AS THE RECORD OWNER AND PURSUANT TO YOUR INSTRUCTIONS.  Accordingly, we request instructions as to whether you wish us to elect to subscribe for any shares of Common Stock to which you are entitled pursuant to the terms and subject to the conditions set forth in the enclosed Prospectus. Please complete and return the “Beneficial Owner Election” form attached hereto and return it to us.  However, we urge you to read the Prospectus and other enclosed materials carefully before instructing us to exercise your Rights.

 

Your instructions to us should be forwarded as promptly as possible in order to permit us to exercise Rights on your behalf in accordance with the provisions of the Rights Offering.  The Rights Offering will expire at 5:00 p.m., New York City Time, on the Expiration Date.  Once you have exercised your Rights under the Basic Subscription Privilege and the Oversubscription Privilege, such exercise may not be revoked or changed.

 

If you wish to have us, on your behalf, exercise the Rights for any shares of Common Stock to which you are entitled, please so instruct us by timely completing, executing and returning to us the instruction form attached to this letter.

 

With respect to any instructions to exercise (or not to exercise) Rights, the enclosed Beneficial Ownership Election must be completed and returned such that it will be actually received by us by 5:00 p.m., New York City Time, on December 22, 2011, the last business day prior to the scheduled expiration date of the Rights Offering of December 23, 2011 (which may be extended by the Company in its sole discretion).

 

ANY QUESTIONS OR REQUESTS FOR ASSISTANCE CONCERNING THE RIGHTS OFFERING SHOULD BE DIRECTED TO ALLIANCE ADVISORS, LLC at +1 877-777-8211 (U.S. AND CANADA TOLL FREE), AND +1 973-873-7779 (WORLDWIDE COLLECT).Exhibit 4.7

FORM OF

NOMINEE HOLDER CERTIFICATION

 

The undersigned, a bank, broker, trustee, depositary or other nominee of non-transferable and non-tradable rights (the “Rights”) to purchase shares of common stock, par value $0.001 per share, of MGT Capital Investments, Inc. (the “Company”) pursuant to the rights offering described and provided for in the Company’s Prospectus dated [●], 2011 (the “Prospectus”), hereby certifies to the Company and to VStock Transfer, LLC, as Subscription Agent for such rights offering, that (1) the undersigned has exercised, on behalf of the beneficial owners thereof (which may include the undersigned), the number of Rights specified below pursuant to the Basic Subscription Privilege (as defined in the Prospectus) and, on behalf of beneficial owners of Rights who have subscribed for the purchase of additional shares of common stock pursuant to the Oversubscription Privilege (as defined in the Prospectus), the number of shares specified below pursuant to the Oversubscription Privilege, listing separately below each such exercised Basic Subscription Privilege and the corresponding Oversubscription Privilege (without identifying any such beneficial owner), and (2) to the extent a beneficial owner has elected to subscribe for shares pursuant to the Oversubscription Privilege, each such beneficial owner’s Basic Subscription Privilege has been exercised in full:

	
Number of Shares Owned on

the Record Date

	  	
Number of Shares Subscribed

for Pursuant to Basic

Subscription Privilege

	  	
Number of Shares Subscribed

for Pursuant to

Oversubscription Privilege

	  	  	  	  	  
	
1.

	  	  	  	  	  
	  	  	  	  	  
	
2.

	  	  	  	  	  
	  	  	  	  	  
	
3.

	  	  	  	  	  
	  	  	  	  	  
	
4.

	  	  	  	  	  
	  	  	  	  	  
	
5.

	  	  	  	  	  
	  	  	  	  	  
	
6.

	  	  	  	  	  
	  	  	  	  	  
	
7.

	  	  	  	  	  
	  	  	  	  	  
	
8.

	  	  	  	  	  
	  	  	  	  	  
	
9.

	  	  	  	  	  

Provide the following information if applicable:

____________________________________________

Depository Trust Company (“DTC”)

Participant Number

Participant Name:  ______________________________________________

	
By: 

	
  

	  
	  	
Name:

	  
	  	
Title:

	  

________________________________________________________

DTC Basic Subscription Confirmation Number(s)Exhibit 4.8

 

FORM OF BENEFICIAL OWNER ELECTION

 

The undersigned acknowledge(s) receipt of your letter and the enclosed materials referred to therein relating to the offering of shares of Common Stock of MGT Capital Investments, Inc. (the “Company”).

 

With respect to any instructions to exercise (or not to exercise) Rights, the undersigned acknowledges that this form must be completed and returned such that it will actually be received by you by 5:00 p.m., New York City Time, on December 22, 2011, the last business day prior to the scheduled expiration date of the Rights Offering of December 23, 2011 (which may be extended by the Company in its sole discretion).

 

This will instruct you whether to exercise Rights to purchase shares of the Company’s Common Stock distributed with respect to the shares of the Company’s Common Stock held by you for the account of the undersigned, pursuant to the terms and subject to the conditions set forth in the Company’s Prospectus and the related “Instructions for Use of MGT Capital Investments, Inc. Subscription Rights Certificates.”

 

Box 1.   ̈  Please DO NOT EXERCISE RIGHTS for shares of Common Stock.

 

Box 2.   ̈  Please EXERCISE RIGHTS for shares of Common Stock as set forth below.

 

The number of Rights for which the undersigned gives instructions for exercise under the Basic Subscription Privilege should not exceed the number of Rights that the undersigned is entitled to exercise.

 

	  	  	
Number

of Shares

	  	
Per Share 

Subscription 

Price

	  	
Payment

	
Basic Subscription Privilege:

	  	
x

	  	$ 	
0.025             =

	  	
$ (Line 1)

	
Oversubscription Privilege:

	  	
x

	  	$	
0.025             =

	  	
$ (Line 2)

	  	  	
Total Payment Required

	  	 	  	  	
$ (Sum of Lines 1 and 2 must equal total of amounts in Boxes 3 and 4.)

 

Box 3.  o  Payment in the following amount is enclosed $__________________.

 

Box 4.  o  Please deduct payment from the following account maintained by you as follows:

	  	  	  	  
	
Type of Account

	  	
Account No.

	  	  	  
	
Amount to be deducted:

	  	
$  

	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	
Signature(s)

	  	  	  
	  	  	
Please type or print name(s) below:

	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  

 

Date: __________, 2011

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