Merchandise 1.01 Entry right into a Materials Definitive Settlement.
On March 16, 2023 MGT Capital Investments, Inc (the “Firm” or “MGT”) entered
right into a Partnership Settlement (the “Partnership Settlement”) and a Property Lease
Settlement (the “Lease Settlement, and along with the Partnership Settlement,
collectively, the “Settlement”) with one other cryptocurrency mining firm
(“Tenant”). The phrases of the Settlement are summarized as follows.
Pursuant to the Lease Settlement, the Firm agreed to lease to Tenant parts
of the Firm’s six acre mining facility in Lafayette, GA in increments of up
to 10 areas which might be 40 ft in size and eight ft in top every
(“Areas”), along with associated utilities entry together with electrical energy of up
to 1 megawatt (“MW”) per House, for deploying mining tools, in change
for rental funds of $5,000 per House monthly (supplied the Areas are
powered) and fee of the electrical energy prices and deposit necessities arising
from the Areas. In reference to the Lease Settlement, Tenant agreed to make
an preliminary deposit of $228,913 for the preliminary electrical energy deployment for 5
MW. Within the occasion of electrical energy fee escalations in extra of an enumerated
threshold, rental obligations will likely be suspended for as much as a 30-day interval
whereby Tenant could decide whether or not to proceed leasing the House(s). Below the
Lease Settlement, Tenant can be required to take care of insurance coverage for the House(s).
The Lease Settlement offers sure different provisions which might be customary or
widespread of agreements of its sort, together with representations and warranties,
limitations on legal responsibility, and indemnification, and drive majeure, amongst others.
Pursuant to the Partnership Settlement, the Firm agreed to concern Tenant
500,000 shares its widespread inventory monthly for every rented House (the “Month-to-month
Issuances”), and to additionally concern an extra variety of shares of widespread inventory
yearly equal to 100% of the Month-to-month Issuances for the relevant 12 months (the
“Annual Issuances,” and along with the Month-to-month Issuances, collectively, the
“Issuances”). Additional, pursuant to the Partnership Settlement, the Firm
supplied Tenant with the choice (the “Choice”) to lend MGT as much as $1 million
evidenced by a convertible promissory observe that’s convertible into 25% of the
Firm’s excellent widespread inventory, assuming all $1 million is lent, on a
pro-forma, post-issuance foundation (the “Word”), along with an accompanying
warrant to buy 60% of the shares of widespread inventory underlying the Word (the
“Warrant”). The phrases of the Word and Warrant could be considerably much like
the Unique Problem Low cost Secured Convertible Promissory Word and accompanying
Warrant that had been issued by the Firm on or about September 12, 2022, as are
disclosed in and filed as reveals to the Firm’s Present Report on Type 8-Ok
filed on September 14, 2022. If the Choice is exercised, the events could elect
to substitute the $1 million buy worth, in complete or partially, with tools
and infrastructure enhancements to allow the Firm to have entry to as much as an
further 10 MWs of electrical energy to the power’s at the moment obtainable
electrical energy capability. The Firm’s facility at the moment has electrical
capability of as much as 10 MW. The Settlement has a time period of 24 months.
The foregoing description of the Lease Settlement and the Partnership Settlement
doesn’t purport to be accomplished and is certified in its entirety by the complete
textual content of such agreements, types of that are filed herewith as Reveals 10.1 and
10.2, respectively.
Merchandise 3.02. Unregistered Gross sales of Fairness Securities.
The knowledge set forth in Merchandise 1.01 of this Present Report on Type 8-Ok with
respect to the Issuances and the Choices is integrated by reference into this
Merchandise 3.02 in its entirety. The execution of the Settlement and the transactions
contemplated thereby had been exempt from registration pursuant to Part 4(a)(2)
of the Securities Act of 1933 as a transaction not involving a public providing.
Merchandise 9.01 Monetary Statements and Reveals
Exhibit Quantity Description
10.1 Type of Lease Settlement
10.2 Type of Partnership Settlement
104 Cowl Web page Interactive Information File (embedded inside the Inline XBRL
doc)
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