MGT Capital flags going-concern risk with $105K cash
MGTI reported $105,000 in cash, a $607,000 working-capital deficit and substantial doubt about its ability to continue as a going concern.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
MGT Capital Investments, Inc. (MGTI) reported no revenue for the nine months ended September 30, 2026, versus $87,000 a year earlier, after ceasing mining and hosting operations in March 2025. It recorded a $3.126 million net loss for the nine-month period, compared with $30,000 net income in 2025; third-quarter net loss was $171,000 versus $202,000.
At September 30, cash was $105,000 and the working capital deficit was $607,000; operating activities used $683,000 over nine months. Management said these conditions raise substantial doubt about the company’s ability to continue as a going concern for at least one year. MGTI also reported ineffective disclosure controls and internal control over financial reporting, citing its small employee count and insufficient segregation of duties and independent review.
On October 5, 2026, MGTI began an offering of up to $225,000 at $0.001 per share and had raised $100,000, issuing 100,000,000 shares by the report date. On June 30, 2026, it exchanged equity, including Series E preferred stock convertible into 3,250,000,000 common shares, for $1.22 million of debt; the exchange resulted in a $2.814 million loss on debt extinguishment.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- None.
Negative
- Major pointGoing-concern warning: $105,000 cash and a $607,000 working-capital deficit at September 30, 2026.
- Major pointMaterial weakness: controls were ineffective as of September 30, 2026.
- Moderate pointNine-month revenue fell 100% to $0 from $87,000.
Filing Explained
Series E’s three billion two hundred fifty million potential shares are subject to a nine point nine nine percent holder-ownership limit.
On
MGT said its review of strategic alternatives, including potential business combinations and partnerships, remained exploratory and had produced no binding agreements by the filing date.
Key Figures
Key Terms
going concern basis financial
material weakness technical
debt extinguishment financial
anti-dilutive financial
beneficial ownership limitation blocker technical
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much revenue did MGTI report for the first nine months of 2026?
What are the terms of MGTI’s October 2026 stock offering?
How many common shares could MGTI’s Series E preferred stock convert into?
Why did MGTI say there was substantial doubt about its ability to continue as a going concern?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended
| 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:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices)
(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.
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).
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 ☐ |
| Smaller
reporting company | |
| 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 November 4, 2026, there were
MGT CAPITAL INVESTMENTS, INC.
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2026
TABLE OF CONTENTS
| Page | |
| PART I. FINANCIAL INFORMATION | |
| Item 1. Financial statements | |
| Condensed Balance Sheets as of September 30, 2026 (Unaudited) and December 31, 2025 | 1 |
| Condensed Statements of Operations (Unaudited) for the three and nine months ended September 30, 2026 and 2025 | 2 |
| Condensed Statements of Changes in Stockholders’ Deficit (Unaudited) for the three and nine months ended September 30, 2026 and 2025 | 3 |
| Condensed Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2026 and 2025 | 4 |
| Notes to the Unaudited Condensed Financial Statements | 5 |
| Item 2. Management’s discussion and analysis of financial condition and results of operations | 17 |
| Item 3. Quantitative and qualitative disclosures about market risk | 24 |
| Item 4. Controls and procedures | 24 |
| PART II. OTHER INFORMATION | |
| Item 1. Legal proceedings | 26 |
| Item 1A. Risk factors | 26 |
| Item 2. Unregistered sales of equity securities and use of proceeds | 26 |
| Item 3. Defaults upon senior securities | 26 |
| Item 4. Mine safety disclosures | 26 |
| Item 5. Other information | 26 |
| Item 6. Exhibits | 26 |
| Signatures | 27 |
| I |
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
MGT CAPITAL INVESTMENTS, INC.
CONDENSED BALANCE SHEETS
(Dollars in thousands, except per-share amounts)
| September 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Other current assets | - | |||||||
| Total current assets | ||||||||
| Non-current assets | ||||||||
| Property and equipment, at cost, net | - | - | ||||||
| Total assets | $ | $ | ||||||
| Liabilities and Stockholders’ Deficit | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accounts payable - related party | - | |||||||
| Accounts payable | - | |||||||
| Accrued expenses and other payables | ||||||||
| Note payable, related party | - | |||||||
| Common stock to be issued | ||||||||
| Total current liabilities | ||||||||
| Non-current liabilities | ||||||||
| Convertible note payable, net of unamortized discount of $ | - | |||||||
| Total liabilities | ||||||||
| Commitments and Contingencies (Note 8) | - | |||||||
| Stockholders’ Deficit | ||||||||
| Series E convertible preferred stock, $ | - | |||||||
| Common stock, $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| Total Liabilities and Stockholders’ Deficit | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| 1 |
MGT CAPITAL INVESTMENTS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per-share amounts)
(Unaudited)
| For the Three Months ended September 30, | For the Nine Months ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenue | ||||||||||||||||
| Bitcoin mining | $ | - | $ | - | $ | - | $ | |||||||||
| Hosting services | - | - | - | |||||||||||||
| Total revenue | - | - | - | |||||||||||||
| Operating expenses | ||||||||||||||||
| Cost of revenue | - | - | - | |||||||||||||
| General and administrative | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Operating loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other non-operating income (expense) | ||||||||||||||||
| Interest expense | - | ( | ) | ( | ) | ( | ) | |||||||||
| Accretion of debt discount | - | - | ( | ) | - | |||||||||||
| Gain on sale of property | - | - | - | |||||||||||||
| Gain on settlement of debt | - | - | - | |||||||||||||
| Gain on settlement of payables | - | - | - | |||||||||||||
| Loss on debt extinguishment | - | ( | ) | |||||||||||||
| Other income | - | - | ||||||||||||||
| Total non-operating income (expense) | - | ( | ) | |||||||||||||
| Net income (loss) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||
| Per-share data | ||||||||||||||||
| Basic net income (loss) per share | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||
| Basic weighted average number of common shares outstanding | ||||||||||||||||
| Fully diluted net income (loss) per share | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||
| Fully diluted weighted average number of common shares outstanding | ||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| 2 |
MGT CAPITAL INVESTMENTS, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2026 AND 2025
(Dollars in thousands, except per-share amounts)
(Unaudited)
| Preferred Stock | Common Stock | Additional Paid-In | Accumulated | Total Stockholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
| Balance at January 1, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Net loss | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Net income | - | - | - | - | - | |||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Issuance of common stock to a director, officer & employee | - | - | ( | ) | - | |||||||||||||||||||||||
| Issuance of common stock in connection with note exchange agreement | - | - | ( | ) | - | |||||||||||||||||||||||
| Conversion of Series D Preferred stock into common | ( | ) | ( | ) | ( | ) | - | - | ||||||||||||||||||||
| Net loss | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance at September 30, 2025 | - | $ | - | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||
| Balance at January 1, 2026 | - | $ | - | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||
| Sale of common stock underlying equity purchase agreement for cash | - | - | - | - | ||||||||||||||||||||||||
| Net loss | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance at March 31, 2026 | - | $ | - | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||
| Sale of common stock underlying equity purchase agreement for cash | - | - | ( | ) | - | |||||||||||||||||||||||
| Issuance of common stock to settle account payable | - | - | - | - | ||||||||||||||||||||||||
| Issuance of common and Series E Preferred stock in connection with note exchange agreement | - | |||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Balance | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Sale of common stock underlying equity purchase agreement for cash | - | - | - | - | ||||||||||||||||||||||||
| Net loss | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||
| Net income (loss) | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance at September 30, 2026 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Balance | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| 3 |
MGT CAPITAL INVESTMENTS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in thousands, except per-share amounts)
(Unaudited)
| For the Nine Months Ended September 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash Flows From Operating Activities | ||||||||
| Net income (loss) | $ | ( | ) | $ | ||||
| Adjustments to reconcile net income (loss) to net cash used in operating activities | ||||||||
| Depreciation | - | |||||||
| Non-cash stock-based compensation | - | |||||||
| Accretion of debt discount | - | |||||||
| Loss on debt extinguishment | - | |||||||
| Gain on sale of property and equipment | - | ( | ) | |||||
| Gain on equity settlement of accounts payable | ( | ) | - | |||||
| Change in operating assets and liabilities | ||||||||
| Accounts receivable | - | |||||||
| Intangible digital assets | - | ( | ) | |||||
| Prepaid expenses and other current assets | - | |||||||
| Accounts payable | ( | ) | ( | ) | ||||
| Accounts payable - related party | ( | ) | - | |||||
| Accrued expenses | ( | ) | ||||||
| Security deposit | - | ( | ) | |||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash Flows From Investing Activities | ||||||||
| Proceeds from sale of property and equipment | - | |||||||
| Net cash provided by investing activities | - | |||||||
| Cash Flows From Financing Activities | ||||||||
| Proceeds from sale of stock under equity purchase agreements | - | |||||||
| Proceeds from common stock to be issued under lease agreement | - | |||||||
| Repayment of notes payable, related party | ( | ) | - | |||||
| Repayment of loan payable | - | ( | ) | |||||
| Net cash provided by (used in) financing activities | ( | ) | ||||||
| Net change in cash and cash equivalents | ||||||||
| Cash and cash equivalents, beginning of period | ||||||||
| Cash and cash equivalents, end of period | $ | $ | ||||||
| Supplemental disclosure of cash flow information | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for income tax | $ | - | $ | - | ||||
| Supplemental Schedule of Non-cash investing and financing activities | ||||||||
| Conversion of Series D Preferred stock into shares of common stock | $ | - | $ | |||||
| Issuance of common stock in connection with note exchange agreement | $ | - | ||||||
| Issuance of common stock to a director | $ | - | $ | |||||
| Exchange of Secured Convertible Promissory Note for Equity: | ||||||||
| Notes payable principal extinguished | $ | $ | - | |||||
| Less: Unamortized debt discount eliminated | ( | ) | - | |||||
| Net carrying value of note payable | $ | $ | - | |||||
| Settlement of Accounts Payable for Common Stock: | ||||||||
| Accounts payable extinguished | $ | $ | - | |||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| 4 |
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
Organization and Business
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. MGT has historically operated in the Bitcoin mining and hosting industry. During the year ended December 31, 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) a fixed-fee hosting contract with one customer 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 year, 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 September 30, 2026 and November 4, 2026, the Company continued to own 35 Antminer S19 Pro miners with the capability of providing approximately 3 Petahashes per second (“PH/s”) of hash power for self-mining. These miners were placed in storage pending evaluation of redeployment alternatives. The Company continues to monitor the economics of Bitcoin mining to evaluate the profitability of re-deploying these assets.
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.
Following the cessation of its digital-asset mining operations in March 2025 and the sale of its LaFayette, Georgia facility in May 2025, the Company currently does not have any active revenue-generating operations. Management has continued to actively manage its remaining assets, including its cryptocurrency mining equipment and corporate infrastructure, while pursuing new business opportunities and potential acquisitions. Management intends to redeploy the Company’s resources toward operating businesses or investments in sectors aligned with its historical expertise in digital assets, financial technology, and data infrastructure.
Basis of presentation
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. The condensed balance sheet as of December 31, 2025 has been derived from the Company’s audited financial statements as of that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. 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, 2025, as filed with the Securities and Exchange Commission (“SEC”) on March 17, 2026. Operating results for the three and nine months ended September 30, 2026 and 2025 are not necessarily indicative of the results that may be expected for any subsequent quarters or for the year ended December 31, 2026.
| 5 |
Disposition of Hosting Facility
The Company completed the sale of its LaFayette, Georgia facility and related infrastructure in May 2025. Management evaluated the requirements of ASC 205-20 and concluded that the sale did not meet the criteria for discontinued operations; accordingly, it is presented within continuing operations for all periods presented. Management continues to evaluate strategic alternatives, including potential mergers, acquisitions, partnerships or other business combinations, entry into alternative business lines, and alternative uses of the Company’s remaining assets. These discussions are exploratory and have not resulted in any binding agreements as of the date of this report.
Inflation
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, 2026, the Company
had a history of recurring losses from operations and continues to generate losses from operations. For the three and nine months
ended September 30, 2026, the Company had a net loss of $
Since
January 2023, the Company has secured $
Following
the cessation of its digital-asset mining operations in March 2025 and the sale of its LaFayette, Georgia facility in May 2025, the
Company currently does not have any active revenue-generating operations. In addition, there have been management changes and the
Company will require additional funding to re-establish and grow its operations. The Company has addressed this by raising $
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.
| 6 |
Note 3. Summary of Significant Accounting Policies
Use of estimates and assumptions and critical accounting estimates and assumptions
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 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 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.
Cash and cash equivalents
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 $
Crypto Assets
Effective January 1, 2025, the Company adopted ASU 2023-08, Accounting for and Disclosure of Crypto Assets (ASC 350-60), which requires eligible crypto assets to be measured at fair value with changes in fair value recognized in net income. The Company applied the new guidance prospectively and recognized no cumulative-effect adjustment to beginning retained earnings, as no crypto assets were held at December 31, 2024. The adoption did not have a material impact on any accounting or disclosure items with the adoption of ASU 2023-08.
Under this policy, crypto assets are included in current assets on the balance sheet and are measured at fair value using quoted market prices as of the balance sheet date. Changes in fair value are recorded in Other income (expense) in the statements of operations, and any realized gains or losses are recognized based on the first-in, first-out (FIFO) method. In accordance with ASC 230, as amended by ASU 2023-08, cash received from the near-immediate liquidation of crypto assets received as noncash consideration in the ordinary course of business is classified as an operating activity in the statements of cash flows.
Historically, the Company received Bitcoin as non-cash consideration from participation in third-party mining pools in exchange for providing computing power used in the mining process. Bitcoin rewards earned from mining activities were recognized as revenue under ASC 606 at fair value at the time the reward was confirmed by the mining pool operator.
For the periods ended September 30, 2026 and 2025, the Company converted all crypto assets received from mining activities to U.S. dollars shortly after receipt and did not hold any crypto assets at September 30, 2026 or December 31, 2025; therefore, adoption of ASU 2023-08 did not have a material impact on the Company’s financial statements.
The Bitcoin Blockchain and the cryptocurrency reward for solving a block is subject to periodic incremental halving. Halving is a process designed to control the overall supply and reduce the risk of inflation in cryptocurrencies using a Proof-of-Work consensus algorithm. At a predetermined block, the mining reward is cut in half, hence the term “Halving.” A Halving for bitcoin occurred in April 2024, with a revised reward payout of 3.125 Bitcoin per block. Many factors influence the price of Bitcoin and potential increases or decreases in prices in advance of or following a future halving is unknown.
The following table presents the activities of digital currencies for the year ended December 31, 2025 and the nine months ended September 30, 2026.:
Schedule of Digital Currencies
| Crypto assets at January 1, 2025 | $ | - | ||
| Additions from mining activities | ||||
| Realized gain on sale of crypto assets | - | |||
| Sales of crypto assets | ( | ) | ||
| Crypto assets at December 31, 2025 | - | |||
| Additions from mining activities | - | |||
| Realized gain on sale of crypto assets | - | |||
| Sales of crypto assets | - | |||
| Crypto assets at September 30, 2026 | $ | - |
| 7 |
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.
Leases
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 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.
Segment reporting
The Company operates as a
The Chief Operating Decision Maker (“CODM”), identified as the Company’s Interim Chief Executive Officer & Chief Financial Officer, uses operating income (loss) as the measure of segment performance. Since the cessation of operations, the CODM uses this measure, together with general and administrative expenses, to monitor operating costs and liquidity and to evaluate the allocation of resources to strategic alternatives.
The following tables present segment revenue and operating loss, including the significant expense items reviewed by the CODM, for the three and nine months ended September 30, 2026 and 2025:
Three and Nine months ended September 30, 2026
Schedule of Present Segment Revenue and Operating Loss
Three Months Ended September 30, 2026 | Nine Months Ended September 30, 2026 | |||||||
| Total Revenues | $ | - | $ | - | ||||
| Less: Cost of Revenues: | ||||||||
| Depreciation | - | - | ||||||
| Electricity and other expenses | - | - | ||||||
| Less: General and administrative | ||||||||
| Operating loss | $ | ( | ) | $ | ( | ) | ||
| 8 |
Three and Nine months ended September 30, 2025
Three Months Ended September 30, 2025 | Nine Months Ended September 30, 2025 | |||||||
| Total Revenues | $ | - | $ | |||||
| Less: Cost of Revenues: | ||||||||
| Depreciation | - | |||||||
| Electricity and other expenses | - | |||||||
| Less: General and administrative | ||||||||
| Operating loss | $ | ( | ) | $ | ( | ) | ||
The following table reconciles operating loss reviewed by the CODM to consolidated net income for the three and nine months ended September 30, 2026 and 2025:
| For
the Three Months Ended September 30, |
For
the Nine Months Ended September 30, |
|||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Operating loss reviewed by CODM | $ |
( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| Other income (expense) | - | ( |
) | |||||||||||||
| Net income (loss) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ||||||
Revenue recognition
General
The Company recognizes revenue in accordance with Accounting Standards Codification 606, Revenue from Contracts with Customers (“ASC 606”). ASC 606 establishes a principles-based framework for recognizing revenue that depicts 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. As of March 2025, the Company ceased all active revenue-generating operations related to cryptocurrency mining and hosting activities. Accordingly, the following policies primarily relate to historical and comparative periods presented in these financial statements and any limited residual activities during the fiscal year ended December 31, 2025.
Crypto asset mining (Historical and Comparative)
The Company recognizes revenue under 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).
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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 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 ceased self-mining in March 2025, and no mining revenue has been recognized since that date. The following describes the policy applied to mining revenue recognized in the comparative 2025 periods.
The Company earned Bitcoin mining revenue from operating its owned miners and third-party owned miners that it had concluded were abandoned. The Company participated in third-party operated mining pools under contracts terminable at any time by either party; its enforceable right to compensation began only when it provided computing power to the pool operator. Providing computing power was the Company’s only performance obligation and an output of its ordinary activities. In exchange, the Company received non-cash consideration in Bitcoin equal to its proportional share of the pool’s block rewards, net of pool fees, which were recorded in cost of revenues, based on its share of total computing power contributed. Settlement terms could not be disputed after thirty-five days.
Because the consideration was entirely variable, it was constrained until the pool operator successfully placed a block and the Company received confirmation of the amount, at which time revenue was recognized. Revenue was measured at the fair value of the Bitcoin received, using its quoted price at the time of receipt. There was no significant financing component.
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Hosting Revenues (Historical and Comparative)
The Company’s primary hosting agreement expired on March 15, 2025, and the Company sold its LaFayette, Georgia facility on May 13, 2025. No hosting revenue has been recognized since March 2025. The following describes the policy applied to hosting revenue recognized in the comparative 2025 periods.
The Company
provided hosting services to third parties, including electrical power, infrastructure support, monitoring and operational maintenance
for customer-owned mining equipment located at its facility, in exchange for a fixed monthly fee. Hosting services were a single performance
obligation satisfied over time, and revenue was recognized ratably as the services were provided. The Company recognized hosting revenue
of $0 and $0 for the three and nine months ended September 30, 2026, respectively, and $0 and $
Gain (Loss) on Modification/Extinguishment of Debt
In accordance with ASC 470, a modification or an exchange of debt instruments that adds or eliminates a conversion option that was substantive at the date of the modification or exchange is considered a substantive change and is measured and accounted for as extinguishment of the original instrument along with the recognition of a gain or loss. Additionally, under ASC 470, a substantive modification of a debt instrument is deemed to have been accomplished with debt instruments that are substantially different if the present value of the cash flows under the terms of the new debt instrument is at least 10 percent different from the present value of the remaining cash flows under the terms of the original instrument. A substantive modification is accounted for as an extinguishment of the original instrument along with the recognition of a gain or loss.
The
Company’s debt modifications in 2025 did not result in any gain or loss. On June 30, 2026, the Company completed a debt extinguishment
transaction resulting in the retirement of $
Income taxes
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.
Income (loss) per share
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 convertible preferred stock are not reflected in diluted net income (loss) per share when their effect would be antidilutive.
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Potentially
dilutive securities are excluded from diluted loss per share when their effect would be antidilutive. The computation of diluted
loss per share for the three months ended September 30, 2026 excludes
Fair Value Measure and Disclosures
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, 2026, and December 31, 2025, our financial instruments consisted primarily of cash and cash equivalents, other current assets, accounts payable, and accrued expenses and other payables. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments.
Management’s evaluation of subsequent events
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 financial statements.
Recent accounting pronouncements
Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying financial statements, other than those disclosed below.
In March 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which requires public companies to provide expanded annual disclosures of certain natural expense categories. The guidance is effective for annual periods beginning after December 15, 2026, with early adoption permitted. While the Company previously indicated an intent to early adopt this guidance, it has elected to defer adoption until the mandatory effective date. The Company is currently evaluating the impact that the adoption of this guidance will have on its financial statements and related disclosures.
In November 2024, the FASB issued ASU 2024-04, Induced Conversions of Convertible Debt Instruments, which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as induced conversions. The guidance is effective for fiscal years beginning after December 15, 2025. The Company adopted this guidance effective January 1, 2026. Based on the Company’s debt structure at the time of adoption, the adoption of this standard did not have any impact on the Company’s financial position, results of operations, or cash flows.
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Note 4. Property and Equipment
Property and equipment consisted of the following:
Schedule of Property and Equipment
| September 30, 2026 | December 31, 2025 | |||||||
| As of | ||||||||
| September 30, 2026 | December 31, 2025 | |||||||
| Land | $ | - | $ | - | ||||
| Computer hardware and software | - | - | ||||||
| Bitcoin mining machines | ||||||||
| Infrastructure | - | - | ||||||
| Containers | - | - | ||||||
| Property and equipment, gross | ||||||||
| Less: Accumulated depreciation | ( | ) | ( | ) | ||||
| Property and equipment, net | $ | - | $ | - | ||||
The
Company recorded depreciation expense of $
Note 5. Note Payable
September 2025 Note
On
September 22, 2025, the Company entered into a Secured Exchange Note Exchange Agreement with its existing Note holder, pursuant to which
the parties agreed to exchange the Company’s outstanding notes (the “Prior Note”). As of the exchange date, the Prior
Note had an outstanding principal balance of $
The
Company reviewed the transaction under ASC 470-50 and concluded that the revised terms do not constitute a substantial modification.
Accordingly, the transaction is accounted for as a modification of the existing note. The value of the equity in the
transaction was $
The September 2025 Note was classified as a long-term liability on the Company’s balance sheet as of December 31, 2025, as the maturity date exceeded one year from the reporting date. This note was extinguished on June 30, 2026.
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Note Exchange Agreement
On
June 30, 2026, the Company entered into an exchange agreement (the “Note Exchange Agreement”), whereby it issued
The
equity consideration issued was valued at an aggregate fair value of $
The
issuance of the
As
of September 30, 2026, there are
Note Payable – Related Party
On
August 1, 2023 a former executive loaned the Company $
Note 6. Leases
The
Company is not a party to any leases. As a result, the Company did
Note 7. Common Stock and Preferred Stock
Common stock
Common Stock Issuances
In
January 2026, the Company issued
During the three months ended September 30, 2026, the company issued
On
May 14, 2026, the company settled $
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On June 30, 2026, the Company issued
On
June 30, 2026, the Company entered into the Note Exchange Agreement, whereby, it issued
Preferred stock
On
June 30, 2026, the Company filed a Certificate of Designation of Series E Convertible Preferred Stock (the “Certificate of Designation”)
with the Secretary of State of the State of Delaware, establishing a new designated class of
Additionally
on June 30, 2026, the Company entered into an exchange agreement, whereby, it issued
As
of September 30, 2026, there are
Note 8. 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 $
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.
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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 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 $
During
the three and nine months ended September 30, 2025, the Company received $
Legal proceedings
The Company is not a party to any material legal proceedings, and to management’s knowledge, no such proceedings have been threatened. From time to time, the Company may be involved in routine litigation or claims that arise in the ordinary course of business; however, management does not believe that any such matters will have a material effect on the Company’s financial position, results of operations, or cash flows.
Note 9. Employee Benefit Plans
The
Company maintains a defined contribution retirement plan under Section 401(k) of the Internal Revenue Code covering all eligible employees
(the “401(k) Plan”). The Plan provides for employer safe harbor matching contributions of up to
Note 10. Related Party Transactions
Loans Payable – Related Party
On
August 1, 2023, a former executive loaned the Company $
For
the three months ended September 30, 2026, and 2025, respectively, the Company recorded $
Accounts Payable – Related Party
During
the year ended December 31, 2023, a former executive paid consultants reimbursable by the Company in the amount of $
Director Share Purchase
On
June 30, 2026, the Company sold
Note 11. Subsequent Events
The Company has evaluated subsequent events through the date these unaudited condensed financial statements were available to be issued and determined that the following material events occurred after September 30, 2026:
On
October 5, 2026, we initiated a common stock offering to raise up to $
On October 8, 2026, the Company entered into an engagement agreement with a law firm to serve as corporate and securities
counsel. Pursuant to the terms of the engagement agreement, the Company agreed to issue to counsel
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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, 2025 as filed with the Securities and Exchange Commission (“SEC”) on March 17, 2026, 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.
Overview
MGT historically operated in the Bitcoin mining and hosting industry. Our previous business model was dependent on the economics of digital asset mining, including the price of Bitcoin, electricity costs, and access to competitive hosting capacity. During the fiscal year ended December 31, 2025, our operations underwent a significant strategic transition resulting from the cessation of active mining operations and the sale of our primary operating facility.
Following the expiration of our primary hosting customer lease in March 2025, the Company discontinued all self-mining activities. On May 13, 2025, the Company completed the sale of its LaFayette, Georgia facility for $1.35 million. This sale included land, containers, and electrical infrastructure associated with our former hosting and mining operations. As a result of these developments, the Company currently does not have active revenue-generating operations. We continue to own approximately 35 Antminer S19 Pro miners, which have been relocated to storage pending management’s determination of their future use or redeployment.
Management is currently engaged in an on-going active strategic review process to determine the Company’s future direction. Our near-term priorities focus on the following core objectives:
| ● | Capital Formation and Liquidity: Raising appropriate capital to meet operating needs for a minimum of 12 months while actively managing remaining corporate infrastructure to minimize overhead. | |
| ● | Market Position: Evaluating opportunities to enhance our equity market position, including potential exchange listings and broker-dealer quotation status. | |
| ● | Strategic Alternatives: Identifying and executing new ventures, which may include potential mergers, acquisitions, or entry into alternative business lines that leverage our historical expertise in digital assets and technology infrastructure, as well as evaluating alternative uses of the Company’s remaining assets. |
While we continue to evaluate various strategic options, including potential partnerships, business combinations, and alternative uses of the Company’s remaining assets, these discussions are exploratory and have not resulted in any binding agreements as of the date of this report. Management does not view MGT as a passive holding or investment entity, but rather as an operating public company in a strategic transition phase.
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All dollar figures set forth in this Quarterly Report on Form 10-Q are in thousands, except per-share amounts.
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
General
The Company recognizes revenue in accordance with Accounting Standards Codification 606, Revenue from Contracts with Customers (“ASC 606”). ASC 606 establishes a principles-based framework for recognizing revenue that depicts 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. As of March 2025, the Company ceased all active revenue-generating operations related to cryptocurrency mining and hosting activities. Accordingly, the following policies primarily relate to historical and comparative periods presented in these financial statements and any limited residual activities during the fiscal year ended December 31, 2025.
Crypto asset mining (Historical and Comparative)
The Company recognizes revenue under 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.
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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 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 ceased self-mining in March 2025, and no mining revenue has been recognized since that date. The following describes the policy applied to mining revenue recognized in the comparative 2025 periods.
The Company earned Bitcoin mining revenue from operating its owned miners and third-party owned miners that it had concluded were abandoned. The Company participated in third-party operated mining pools under contracts terminable at any time by either party; its enforceable right to compensation began only when it provided computing power to the pool operator. Providing computing power was the Company’s only performance obligation and an output of its ordinary activities. In exchange, the Company received non-cash consideration in Bitcoin equal to its proportional share of the pool’s block rewards, net of pool fees, which were recorded in cost of revenues, based on its share of total computing power contributed. Settlement terms could not be disputed after thirty-five days.
Because the consideration was entirely variable, it was constrained until the pool operator successfully placed a block and the Company received confirmation of the amount, at which time revenue was recognized. Revenue was measured at the fair value of the Bitcoin received, using its quoted price at the time of receipt. There was no significant financing component.
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Hosting Revenues (Historical and Comparative)
The Company’s primary hosting agreement expired on March 15, 2025, and the Company sold its LaFayette, Georgia facility on May 13, 2025. No hosting revenue has been recognized since March 2025. The following describes the policy applied to hosting revenue recognized in the comparative 2025 periods.
The Company provided hosting services to third parties, including electrical power, infrastructure support, monitoring and operational maintenance for customer-owned mining equipment located at its facility, in exchange for a fixed monthly fee. Hosting services were a single performance obligation satisfied over time, and revenue was recognized ratably as the services were provided. The Company recognized hosting revenue of $0 and $0 for the three and nine months ended September 30, 2026, respectively, and $0 and $58 for the three and nine months ended September 30, 2025, respectively. One customer accounted for 100% of hosting revenue in the 2025 period.
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
Three months ended September 30, 2026 and 2025
Revenues
Our revenues for the three months ended September 30, 2026 were $0, which remained unchanged compared to $0 for the three months ended September 30, 2025. Our historical revenue is partly derived from cryptocurrency mining and third-party hosting activities, both of which generated $0 during the three months ended September 30, 2026 and 2025. The absence of revenue in both periods is due to the cessation of all self-mining activities and the expiration of our primary hosting agreement 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.
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
Cost of revenue for the three months ended September 30, 2026, were $0, which remained unchanged compared to $0 for the three months ended September 30, 2025. This is entirely attributable to the complete cessation of all self-mining and third-party hosting activities at our LaFayette facility, which occurred in March 2025. The Company did not incur any direct operational costs related to digital asset infrastructure during the three months ended September 30, 2026.
General and administrative expenses for the three months ended September 30, 2026, decreased by $56, or 25%, to $171, as compared to $227 for the three months ended September 30, 2025. The overall decrease primarily reflected lower legal fees of $23, employee insurance of $16, tax review fees of $3, and stock-based compensation of $20. These decreases were offset by an increase in independent directors’ fees of $6.
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Other Income and Expense
For the three months ended September 30, 2026, non–operating income (expense) was $0. During the comparable period ended September 30, 2025, non–operating income of $25 consisted of interest expense of $26 offset by other income of $51.
Nine months ended September 30, 2026 and 2025
Revenues
Our revenues for the nine months ended September 30, 2026, decreased by $87, or 100%, to $0, as compared to $87 for the nine months ended September 30, 2025. Our revenue was historically derived in part from cryptocurrency mining, which totaled $0 for the nine months ended September 30, 2026, compared to $29 during the nine months ended September 30, 2025. The decrease in revenues from mining activities for this period is due to the cessation of self-mining activities in March 2025.
We also historically received revenues from third parties renting capacity at our facility and from hosting miners owned by others. The Company recognized $0 and $58 in hosting and rental revenues during the nine months ended September 30, 2026, and 2025, respectively. The decrease in revenues for this period is due to the expiration of our lease agreement 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
Cost of revenue for the nine months ended September 30, 2026, decreased by $89, or 100%, to $0, as compared to $89 for the nine months ended September 30, 2025. This decrease is entirely due to the cessation of cryptocurrency self-mining activities and third-party hosting operations at the LaFayette facility in March 2025, which eliminated all associated direct data center utility infrastructure, electricity, and operational depreciation costs for the current period.
General and administrative expenses for the nine months ended September 30, 2026, decreased by $104, or 18%, to $472, as compared to $576 for the nine months ended September 30, 2025. The overall decrease primarily reflected lower audit fees of $19, legal fees of $20, telephone and utilities expense of $6, investor relations of $8, and a substantial reduction in external consulting services of $120. These decreases were partially offset by higher compliance-related costs, including increased insurance premiums of $48, independent directors’ fees of $6, and payroll fees of $13.
Other Income and Expense
For the nine months ended September 30, 2026, non–operating expense of $2,654 consisted of interest expense of $49, accretion of debt discount of $10 and loss on debt extinguishment of $2,814, offset by gain on the settlement of debt of $161 and gain on settlement of payables of $58. During the comparable period ended September 30, 2025, non–operating income of $608 consisted of gain on the sale of property and equipment of $676 and other income of $51, offset by interest expense of $119.
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Liquidity and capital resources
Sources of Liquidity
We have historically financed our business through the sale of debt and equity interests.
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.
On September 22, 2025, the Company entered into a note exchange transaction with our secured lender. As part of the transaction, we issued a new secured convertible promissory note in the principal amount of $1,220 with a maturity date of December 31, 2027, in exchange for the surrender and cancellation of our prior secured note that was originally scheduled to mature on December 31, 2025. We also issued 500,000,000 shares of common stock as additional consideration to the lender. The Company accounted for this transaction as a modification of the existing secured note rather than an extinguishment under ASC 470-50; no gain or loss was recognized. This transaction extended our secured debt maturity by approximately two years, providing additional time to execute our operational plans and reducing short-term liquidity pressure. No cash was used to complete the transaction.
On September 23, 2025, we issued shares of our common stock to a director, our Interim CEO & CFO, and an employee. These issuances reduced accrued liabilities and resulted in non-cash compensation expense where applicable. Because our common stock carries a par value of $0.001, the par-value requirement resulted in corresponding adjustments to additional paid-in capital. These equity issuances did not require the use of cash and increased total stockholders’ equity. These equity grants did not impact our cash position, as the obligations were satisfied through the issuance of common stock. The settlement of the director’s accrued fees reduced current liabilities, and the compensation-related grants resulted in non-cash expenses recorded during the period. We continue to evaluate the use of equity-based arrangements, where appropriate, to conserve cash while aligning compensation with Company performance and service requirements.
On December 23, 2025, we initiated a common stock offering to raise up to $1,000 at $0.001 per share from accredited investors. The offering is exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D thereunder. The offering closed on January 29, 2026 with the company raising $675 and issuing a total of 675,000,000 common shares.
On February 10, 2026, we initiated a common stock offering to raise up to $500 at $0.001 per share from accredited investors. The offering is exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D thereunder. The Company raised $275 and issued a total of 275,000,000 common shares. The offering closed on August 30, 2026. The funds are being used as general working capital for the Company.
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On May 14, 2026, the company settled $262 of outstanding payables through the issuance of 100,000,000 shares of common stock to an accredited investor. The issuance was exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.
On June 30, 2026, the Company issued 150,000,000 shares of common stock for $50 to David M. Garrity in a private placement. Mr. Garrity was appointed to the Company’s Board of Directors on July 6, 2026 (see Note 10). The issuance was exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.
On June 30, 2026, the Company entered into an exchange agreement, whereby, it issued 750,131,126 shares of common stock and 3,250,000 shares of a newly designated series of preferred stock, designated as Series E Convertible Preferred Stock, par value $0.001 per share that are convertible into 3,250,000,000 common shares in consideration for $1,220 in outstanding Secured Convertible Promissory Notes. The issuance of 3,250,000 shares of Series E Preferred Stock and 750,131,126 shares of Common Stock to Project Nickel LLC was not registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon the exemption from registration provided by Section 3(a)(9) of the Securities Act, as an exchange of securities by an issuer with an existing security holder exclusively where no commission or other remuneration was paid or given directly or indirectly for soliciting such exchange.
On October 5, 2026, subsequent to the end of the quarter, we initiated a common stock offering to raise up to $225 at $0.001 per share from accredited investors. The offering is exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D thereunder. As of the date of this report, we have raised $100 and issued 100,000,000 shares of common stock under this offering. The proceeds are being used for general working capital. There can be no assurance that the offering will be fully subscribed. (See Note 11 – Subsequent Events.)
Going Concern
The accompanying unaudited condensed financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has a history of recurring losses from operations and continues to generate losses from operations. For the nine months ended September 30, 2026, the Company had a net loss of $3,126 and cash used in operating activities of $683. As of September 30, 2026, the Company had an accumulated deficit of $429,863, cash and cash equivalents of $105, and our working capital deficit was $607. Following the cessation of digital-asset mining operations in March 2025 and the sale of the LaFayette, Georgia facility in May 2025, the Company currently does not have active revenue-generating operations. Our cash of $105 at September 30, 2026, together with the $100 raised in October 2026, is expected to fund operating cash requirements, which averaged approximately $51 per month during the third quarter, for only a limited period. Our material cash requirements over the next twelve months consist of general and administrative expenses and the settlement of accounts payable and accrued liabilities, and we expect to fund them through additional equity issuances; beyond twelve months, our funding needs will depend on the outcome of our strategic alternatives.
These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern for a period of at least one year from the date of the issuance of the unaudited condensed financial statements included in this report. Management’s plans to mitigate these conditions include continuing to raise capital through debt and equity issuances and pursuing strategic initiatives, including potential business combinations or partnerships. However, there can be no assurance that the Company will be able to raise additional capital or execute these plans on acceptable terms, if at all. Since January 2023, we have raised approximately $3,000 through 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 unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty. For further information regarding the Company’s ability to continue as a going concern and management’s plans, see Note 2, “Going Concern and Management’s Plans,” in the Notes to the Unaudited Condensed Financial Statements.
Cash Flows
| Nine months ended September 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash (used in) provided by | ||||||||
| Operating activities | $ | (683 | ) | $ | (762 | ) | ||
| Investing activities | - | 1,350 | ||||||
| Financing activities | 685 | (562 | ) | |||||
| Net increase (decrease) in cash and cash equivalents | $ | 2 | $ | 26 | ||||
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Operating activities
Net cash used in operating activities was $683 for the nine months ended September 30, 2026 as compared to $762 for the nine months ended September 30, 2025. Cash used in operating activities for the nine months ended September 30, 2026 primarily consisted of a net loss of $(3,126) offset by non-cash accretion of debt discount of $10, loss on debt extinguishment of $2,814, gain on equity settlement of accounts payable $(219) and increased by cash used by working capital of $(162).
Cash used in operating activities for the nine months ended September 30, 2025 primarily consisted of net income of $30, adjusted by a gain on sale of property and equipment of $676, $39 from depreciation, stock-based compensation of $20 and decreased by cash used for working capital of $175.
Investing activities
Net cash provided by investing activities was $0 and $1,350 for the nine months ended September 30, 2026 and 2025 respectively. The cash generated during the nine months ended September 30, 2025 consisted of the proceeds from the sale of our LaFayette, GA property.
Financing activities
During the nine months ended September 30, 2026, cash provided by financing activities was $685 which consisted of proceeds from the sale of common stock under equity purchase agreements of $700 and repayment of notes payable, related party of $15.
During the nine months ended September 30, 2025, 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.
Off–balance sheet arrangements
As of September 30, 2026, 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 Chief Executive 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 Chief Executive Officer (our principal executive officer and principal financial officer) carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2026. Based on this evaluation, our Interim Chief Executive 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, 2026 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.
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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 safeguards into the process 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 Chief Executive Officer (our principal executive officer and principal 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, 2026.
Changes in Internal Control over Financial Reporting
During the quarter ended September 30, 2026, there were no changes to internal control over financial reporting.
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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. As of the date of this Report, there were no pending or threatened legal proceedings that could reasonably be expected to have a material effect on the results of the Company’s operations. There are also no proceedings in which any of the Company’s directors, officers or affiliates is an adverse party to the Company or has a material interest adverse to the Company’s results of operations, financial condition, or cash flows. 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, 2025, as filed with the SEC on March 17, 2026.
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 March 17, 2026.
Item 2. Unregistered sales of equity securities and use of proceeds
During the three months ended September 30, 2026, the company issued 25,000,000 shares of common stock to accredited investors that participated in a private placement for an aggregate of $25. The issuance was exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D thereunder. The funds are being used as general working capital for the Company.
Item 3. Defaults upon senior securities
None.
Item 4. Mine safety disclosures
Not applicable.
Item 5. Other information
Insider Trading Arrangements and Policies
During the quarter ended September 30, 2026, no director or officer of the Company adopted or terminated any “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
Item 6. Exhibits
| 3.1 | Certificate of Designation of Series E Convertible Preferred Stock dated June 30, 2026 (incorporated by reference to Exhibit 3.1 to current report on Form 8-K, filed with the SEC on July 6, 2026) | |
| 10.1 | Secured Convertible Note Exchange Agreement, dated June 30, 2026, by and between MGT Capital Investments and Project Nickel LLC (incorporated by reference to Exhibit 10.1 to current report on Form 8-K, filed with the SEC on July 6, 2026) | |
| 10.2 | Securities Purchase and Subscription Agreement dated June 30, 2026, by and between MGT Capital Investments, Inc. and David M. Garrity (incorporated by reference to Exhibit 10.2 to current report on Form 8-K, filed with the SEC on July 6, 2026) | |
| 31 | Certification pursuant to Section 302 of the Sarbanes–Oxley Act of 2002 of Principal Executive Officer and Principal Financial Officer* | |
| 32 | Certification pursuant to Section 906 of the Sarbanes–Oxley Act of 2002 of Principal Executive Officer and Principal Financial Officer* | |
| 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 |
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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 | ||
| Date: November 4, 2026 | By: | /s/ Jonathan M. Pfohl |
| Jonathan M. Pfohl | ||
Interim Chief Executive Officer & Chief Financial Officer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) | ||
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