Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)

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, 2024 as filed with the Securities and Exchange Commission ("SEC") on November 10, 2025, 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.

Executive summary

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

MGT Capital Investments, Inc. ("MGT" or the "Company") has historically operated in the Bitcoin mining and hosting industry. During the six months ended June 30, 2025, the Company's operations consisted of both hosting services for third-party miners and self-mining activities at its facility in LaFayette, Georgia. Revenue was generated from (i) fixed-fee hosting contracts with customers and (ii) the mining of Bitcoin using Company-owned machines, the proceeds of which were converted to U.S. dollars shortly after receipt.

During the period, the Company's mining activity also included the use of approximately 115 third party-owned miners that management considered abandoned. The Company offered third-party owners of miners a hosting service whereby MGT operated and maintained miners for a fixed monthly fee. All miners, both Company-owned and hosted, were housed in a modified shipping container on property owned by the Company in Georgia. On March 15, 2025, the company's lease with its primary hosting customer expired and the company discontinued its own self-mining activities. As of June 30, 2025, and December 5, 2025, the Company continued to own 35 Antminer S19 Pro miners providing approximately 3 PH/s of hash power for self-mining. These miners were placed in storage pending evaluation of redeployment alternatives.

The Company's business model has historically been dependent on the economics of digital asset mining, including the price of Bitcoin, network difficulty, electricity costs, and access to competitively priced power. Following the cessation of mining operations, management's focus has shifted to preserving liquidity and evaluating strategic alternatives to monetize or repurpose its existing assets and to identify new business opportunities. The Company remains an active corporate entity, continues to oversee its existing assets and obligations, and is evaluating strategic initiatives intended to establish new operating activities in related technology and financial sectors.

In March 2025, the Company began evaluating alternatives for its LaFayette, Georgia hosting facility following the expiration of its primary hosting agreement. A plan to dispose of the facility was not approved until April 1, 2025, and the disposal occurred in May 2025. As such, the Company's analysis and presentation as of June 30, 2025 reflect continued operations.

Critical accounting policies and estimates

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.

Revenue recognition

Crypto asset 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 earns Bitcoin mining revenue from two primary sources: the operation of its owned miners and the operation of third-party owned miners that the Company has concluded are subject to abandonment. The Company has entered into digital asset mining pools by executing contracts, as 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, 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 thirty-five 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 providing 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, 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 all 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.

Hosting Revenues

We received revenues from third parties renting capacity at our facility and from hosting miners owned by others. The Company recognized $0 and $58 from these sources during the three and six months ended June 30, 2025, respectively. The Company recognized $64 and $149 from these sources during the three and six months ended June 30, 2024, respectively. During the six months ended June 30, 2025, one customer accounted for 100% of hosting revenue, respectively. During the three and six months ended June 30, 2024, three customers accounted for 100% and 100%, respectively, of hosting revenue. After a hosting agreement expires, the Company no longer recognizes hosting revenue for the related miners.

Property and Equipment

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.

Recent accounting pronouncements

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

Results of operations

During the three and six months ended June 30, 2025, the Company recorded a gain or loss on the sale of its LaFayette, Georgia facility. Consistent with ASC 360, this transaction is presented within continuing operations. Management concluded the disposal does not represent a strategic shift under ASC 205-20 and therefore the Company has not reclassified historical results as discontinued operations.

Three months ended June 30, 2025 and 2024

Revenues

Our revenues for the three months ended June 30, 2025 decreased by $88, or 100%, to $0, compared to $88 for the three months ended June 30, 2024. Our revenue is partly derived from cryptocurrency mining, which totaled $0 for the three months ended June 30, 2025 and $24 for the three months ended June 30, 2024. The decrease in revenues from our hosting and renting activities for this period is due to the cessation of self-mining activities in March 2025.

We also receive revenues from third parties renting capacity at our facility and from hosting miners owned by others. The Company recognized $0 and $64 during the three months ended June 30, 2025 and 2024, respectively. The decrease in revenues for this period is due to expiration of our lease with our primary hosting customer in March 2025.

The Company's historical revenues have been derived from Bitcoin mining and hosting activities. The future revenue potential of these activities is inherently uncertain and is influenced by factors outside the Company's control, including: (i) the market price and volatility of Bitcoin; (ii) network difficulty and global hash-rate changes; (iii) the availability and cost of energy; (iv) regulatory developments affecting digital asset markets, mining activities, or the classification and custody of digital assets; and (v) general macroeconomic conditions.

In addition, following the expiration of our primary hosting agreement and the cessation of self-mining activities in March 2025, the Company has not generated revenue from digital currency operations. As of the date of this Report, the Company has not resumed mining or hosting activities, and future revenue will depend on the Company's ability to identify, pursue, and execute new business opportunities or re-establish operations in the digital asset sector or other industries. Given these factors, management is unable to reasonably estimate future revenue trends. The Company will continue to evaluate available strategic and operational opportunities as it progresses with its regulatory compliance efforts and capital planning initiatives.

Operating Expenses

Operating expenses for the three months ended June 30, 2025 decreased by $236 or 56%, to $187, as compared to $423 for the three months ended June 30, 2024. The decrease in operating expenses was primarily due to the Company ceasing hosting and self-mining activities in March 2025 resulting in a decrease in cost of revenue of $93 and a decrease in general and administrative expenses of $143.

The decrease in cost of revenue of $93 or 89% to $11 for the three months ended June 30, 2025, as compared to $104 for the three months ended June 30, 2024 was primarily due to decreased electricity costs. The decrease in general and administrative expenses of $143 or 45%, to $176 for the three months ended June 30, 2025, as compared to $319 for the three months ended June 30, 2024, was primarily due to decreases in legal and professional fees of $25, consulting services of $24, payroll fees of $67, audit fees of $12, equipment rental $3, insurance premium refund of $18, offset by an increase in taxes of $5.

Other Income and Expense

For the three months ended June 30, 2025, non-operating income of $663 consisted of interest expense of $43 and gain on sale of property and equipment of $676. During the comparable period ended June 30, 2024, non-operating income of $5,607 consisted primarily of gain on the change in fair value of warrant derivative liabilities of $3,420, gain on the change in fair value of derivative liability of $2,281, gain on settlement of debt of $41 offset by accretion of debt discount of $108, and interest expense of $27.

Six months ended June 30, 2025 and 2024

Revenues

Our revenues for the six months June 30, 2025 decreased by $103, or 54%, to $87, as compared to $190 for the six months ended June 30, 2024. Our revenue is partly derived from cryptocurrency mining, which totaled $29 for the six months ended June 30, 2025 and $41 during the six months ended June 30, 2024. The decrease in revenues from our hosting and renting activities for this period is due to the cessation of hosting and self-mining activities in March 2025.

We also receive revenues from third parties renting capacity at our facility and from hosting miners owned by others. The Company recognized $58 and $149 during the six months ended June 30, 2025 and 2024, respectively. The decrease in revenues for this period is due to expiration of our lease with our primary hosting customer in March 2025.

The Company's historical revenues have been derived from Bitcoin mining and hosting activities. The future revenue potential of these activities is inherently uncertain and is influenced by factors outside the Company's control, including: (i) the market price and volatility of Bitcoin; (ii) network difficulty and global hash-rate changes; (iii) the availability and cost of energy; (iv) regulatory developments affecting digital asset markets, mining activities, or the classification and custody of digital assets; and (v) general macroeconomic conditions.

In addition, following the expiration of our primary hosting agreement and the cessation of self-mining activities in March 2025, the Company has not generated revenue from digital currency operations. As of the date of this Report, the Company has not resumed mining or hosting activities, and future revenue will depend on the Company's ability to identify, pursue, and execute new business opportunities or re-establish operations in the digital asset sector or other industries. Given these factors, management is unable to reasonably estimate future revenue trends. The Company will continue to evaluate available strategic and operational opportunities as it progresses with its regulatory compliance efforts and capital planning initiatives.

Operating Expenses

Operating expenses for the six months ended June 30, 2025 decreased by $314 or 42%, to $438, as compared to $752 for the six months ended June 30, 2024. The decrease in operating expenses was primarily due to a decrease in cost of revenue of $110 and a decrease in general and administrative expenses of $204.

The decrease in cost of revenue of $110 or 55% to $89 for the six months ended June 30, 2025, as compared to $199 for the six months ended June 30, 2024 was primarily due to decreased electricity and depreciation costs. The decrease in general and administrative expenses of $204 or 37%, to $349 for the six months ended June 30, 2025, as compared to $553 for the six months ended June 30, 2024, was primarily due to decreases in legal and professional fees of $32, consulting services of $5, payroll fees of $135, audit fees of $12, repairs and maintenance of $2 and an insurance premium refund of $18.

Other Income and Expense

For the six months ended June 30, 2025, non-operating income of $583, consisted primarily of gain on the sale of property and equipment of $676, offset by interest expense of $93. For the six months ended June 30, 2024, non-operating income of $6,130, consisted primarily of gain on the change in fair value of warrant derivative liabilities of $3,526, gain on the change in fair value of derivative liability of $2,665, gain on settlement of debt of $147, other income of $5 offset by accretion of debt discount of $162, and interest expense of $51.

Liquidity and capital resources

Sources of Liquidity

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

On November 1, 2024, the Company completed a comprehensive debt restructuring (the "Project Nickel Transaction") that consolidated prior convertible instruments and short-term loans into new notes with fixed conversion terms. As part of this transaction, the Company issued (i) a new convertible promissory note with a principal balance of $1,620, bearing interest at 8% per annum and maturing December 31, 2025, and (ii) a new non-convertible promissory note with a principal balance of $242, bearing interest at 8% per annum and maturing December 31, 2025. The restructuring also eliminated all previously outstanding derivative liabilities and preferred stock, simplifying the Company's capital structure.

On March 15, 2025, the Company's lease with its primary hosting customer expired, and the Company discontinued its own self-mining operations at the LaFayette, Georgia facility. The related lease and partnership arrangements ceased, and the Company's remaining self-mining equipment was placed in storage pending evaluation of redeployment alternatives.

On May 13, 2025, the Company completed the sale of its cryptocurrency mining and hosting facility located in LaFayette, Georgia to CSRE Properties LLC for $1,350. The sale included all structures, containers, and electrical infrastructure associated with prior hosting and mining operations. The Company used $662 of the proceeds to repay principal and accrued interest on its outstanding debt. The transaction generated a $676 gain on sale. The sale of the LaFayette facility provided critical liquidity used primarily to reduce outstanding indebtedness and stabilize the Company's financial position. Management determined that the disposal was a liquidity-driven event and not indicative of a strategic change in business direction as contemplated by ASC 205-20.

As of June 30, 2025, the Company had cash and cash equivalents of $254, an accumulated deficit of $426,286, and a working capital deficit of $2,256. The Company has incurred operating losses since inception and continues to generate losses from operations. Since January 2023, we have raised over $2,000 through issuances of convertible notes, the sale of equity and warrants, proceeds from asset sales, and related-party financing. Management also implemented certain modifications to simplify our capital structure and extend debt maturities to provide additional near-term financial and strategic flexibility.

The Company will need to raise additional capital to fund operating losses, satisfy obligations under its outstanding convertible note, and support its plans to re-establish and grow operations. New leadership is overseeing financing and strategic initiatives; however, there can be no assurance that the Company will be able to obtain additional capital when required, or on terms deemed acceptable, if at all. If the Company is unable to raise the necessary capital, it may need to further reduce expenditures, delay or scale back strategic initiatives, or pursue other alternatives.

These factors collectively raise significant uncertainty regarding our ability to meet our obligations as they become due over the next twelve months. The accompanying unaudited condensed financial statements do not include any adjustments that may result from these uncertainties.

Impact of Inflation

Beginning in 2023, there has been a sharp rise in inflation in the U.S. and globally. The impact on Bitcoin mining in an increase in electricity and mining equipment costs.

Strategic Outlook

Following the sale of its mining facility and cessation of mining operations, the Company is focused on restructuring its balance sheet, evaluating new business opportunities that leverage its public-company platform, and SEC reporting compliance. Potential areas under evaluation include financial technology, blockchain infrastructure services, and digital-asset management. Management expects to announce a defined strategic direction in future filings.

Cash Flows

		Six Months ended June 30,
		2025				2024
Cash provided by (used in):
Operating activities		$	(540	)		$	(350	)
Investing activities			1,350			-
Financing activities			(562	)			(345	)
Net increase (decrease) in cash and cash equivalents		$	248			$	(5	)

Operating activities

Net cash used by operating activities was $540 for the six months ended June 30, 2025 as compared to net cash used in operating activities of $350 for the six months ended June 30, 2024. Cash provided by operating activities for the six months ended June 30, 2025, primarily consisted of a net income of $232, increased by a cash net gain of $39 from depreciation, reduced by gain on sale of property and equipment of $676 and cash used by working capital of $135.

Net cash used in operating activities for the six months ended June 30, 2024, primarily consisted of a net income of $5,568 offset by non-cash net gain of $6,072 which includes depreciation of $104, gain on the change in fair value of derivative liability of $2,665, gain on the change in fair value of warrant derivative liability of $3,526, gain on settlement of debt of $147, amortization of note discount of $162 and cash provided by working capital of $154.

Investing activities

Net cash provided by investing activities during the six months ended June 30, 2025 was $676 resulting from the net proceeds from the sale of our LaFayette, GA property. Net cash provided by investing activities was $0 for the six months ended June 30, 2024.

Financing activities

During the six months ended June 30, 2025, net cash used by financing activities was $562 which consisted of proceeds from common stock to be issued under lease agreement and repayment of loans payable.

During the six months ended June 30, 2024, net cash used in financing activities was $345 which consisted of proceeds from issuance of stock under lease agreement and proceeds from loans payable.

Off-balance sheet arrangements

As of June 30, 2025, 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.