MGT Capital Investments, Inc. (OTCMKTS:MGTI) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01 Entry into Material Definitive Agreements.

On May 18, 2017, MGT Capital Investments, Inc., a Delaware
corporation (the Company), MGT Mining One, Inc. (the Mining Sub),
a Delaware corporation and wholly-owned subsidiary of the
Company, and Iliad Research and Trading, L.P., (Iliad), a Utah
limited partnership, entered into a securities purchase agreement
(the Securities Purchase Agreement), to which the Company issued
and sold to Iliad a secured convertible note (the Note) in the
original principal amount (the Original Principal Amount) of
$1,355,000, with an original issuance discount (the OID) of
$225,000 and legal and accounting expenses of $5,000, and a
warrant (the Warrant) to purchase shares of common stock of the
Company. In accordance with the Securities Purchase Agreement,
Iliad shall fund the Company and Mining Sub (together the
Borrowers) the purchase price (the Purchase Price) in an amount
of $1,125,000, which equals to the result of deducting the OID
and legal and accounting expenses from the Original Principal
Amount. A copy of the Securities Purchase Agreement is attached
herein as Exhibit 10.1.

On May 18, 2017, in connection with the Securities Purchase
Agreement, the Company executed the secured convertible
promissory note (the Secured Convertible Promissory Note or the
Note), promising to pay Iliad the Original Principal Amount and
all amounts of accrued and unpaid interest on the outstanding
balance on the date that is twenty-four (24) months from when
Iliad transfers the funds in the amount of $1,125,000 to the
Borrowers (the Purchase Price Date). The Note is secured with all
assets of the Mining Sub, currently owned and later acquired, and
the Companys three thousand (3,000) shares of common stock of the
Mining Sub. A copy of the Security Agreement is attached herein
as Exhibit 10.4. The Note bears an interest rate of ten per cent
(10%) per annum, beginning to accrue from the Purchase Price
Date, provided that at any time on or after the occurrence of an
Event of Default, the interest rate shall be adjusted to
twenty-two per cent (22%) per annum. Subject to the terms and
conditions set forth in the Note, the Borrowers may prepay the
outstanding balance of the Note in part or in full in cash of an
amount equal to 125% multiplied by the outstanding balance of the
Note. At any time beginning on the date that is six (6) months
from the Purchase Price Date until the outstanding balance of the
Note has been paid in full, Iliad may, at its option, convert all
or any portion of the outstanding balance into shares of common
stock of the Company on a cashless basis at a price of $1.05 per
share (the Lender Conversion Price), as adjusted from time to
time depending on circumstances as defined in the Secured
Convertible Promissory Note. In addition, beginning three (3)
months after the Purchase Price Date, Iliad has the right to
redeem a portion of the outstanding balance of the Note in any
amount that is less than $90,000 per month, in cash or, in the
Event of Default by converting such Redemption Amount, in full or
in part, into shares of the Companys common stock at a per share
price that is the lower of the Lender Conversion Price and the
price that is sixty-five percent (65%) of Market Price. A copy of
the Secured Convertible Promissory Note is attached herein as
Exhibit 10.2.

In connection with the issuance of the Note, on May 18, 2017 (the
Issue Date), the Company also issued to Iliad aWarrant to
purchase up to 1,231,819 shares of Common Stock of the Company
(the Warrant Shares) in accordance with the terms of the warrant
to purchase shares of common stock (the Warrant to Purchase
Common Stock or the Warrant). The Warrant shall be exercisable at
a cash price of $1.05 per share (the Exercise Price), from the
Issue Date until the five-year anniversary, subject to adjustment
from time to time depending on circumstances as defined in the
Warrant. Iliad may only exercise the Warrant on a cashless basis
if the underlying shares of Common Stock have not been registered
with the SEC on or before the date that is six months from the
Issue Date. A copy of the Warrant to Purchase Common Stock is
attached herein as Exhibit 10.3.

On the same date as stated first above, the Company and L2
Capital, LLC (L2 Capital), a Kansas limited liability company,
entered into two amendments, which are Amendment 1 to the Equity
Purchase Agreement (the EPA) and Registration Rights Agreement
(the RRA) and Amendment 1 to the Convertible Promissory Note, to
facilitate the transactions among the Company and Iliad as
described above and avoid triggering certain covenants as set
forth in such Agreements between the Company and L2 Capital. to
Amendment 1 to the EPA and RRA, the Company may issue up to
$6,500,000 of common stock of the Company to L2 Capital, as
opposed to $5,000,000 as set forth in the EPA. In accordance with
the Amendment 1 to the Convertible Promissory Note, L2 Capital
shall waive all its rights under the Convertible Promissory Note
issued to it on March 10, 2017 with respect to any event of
default set forth therein from March 10, 2017 to May 18, 2017
that would be triggered by the Company by entering into the
Illiad financing. In consideration of such waiver, the Company
issued 200,000 shares of the Companys common stock to L2.

Unless specifically defined herein, the capitalized terms shall
have the meanings as defined in the respective documents attached
herein.

Item 2.03 Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.

The information contained in Item 1.01 is hereby incorporated by
reference.

Item 3.02 Unregistered Sales of Equity
Securities.

The information contained in Item 1.01 is hereby incorporated by
reference.

Item 7.01 Regulation FD Disclosure

On May 19, 2017, the Company issued a press release disclosing
the Iliad financing and the proposed use of proceeds to buy
Bitcoin mining computers. A copy of the press release referred to
above is attached hereto as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits.

About MGT Capital Investments, Inc. (OTCMKTS:MGTI)

MGT Capital Investments, Inc. (MGT), through its subsidiaries, is engaged in the business of acquiring, developing and monetizing assets in the online and mobile gaming space, as well as the social casino industry. The Company operates through two segments: Gaming and Intellectual Property. MGT’s gaming portfolio includes a social casino platform Slot Champ. It also includes minority stakes in the skill-based gaming platform MGT Play and fantasy sports operator DraftDay Gaming Group, Inc. (DDGG). The Company’s subsidiaries include Medicsight, Inc. (Medicsight), MGT Sports, Inc. (MGT Sports), MGT Studios, Inc. (MGT Studios) and MGT Gaming, Inc. (MGT Gaming). Medicsight owns medical imaging software and has designed an automated carbon dioxide insufflation device on which the Company receives royalties from an international distributor. The software is designed to detect colorectal polyps during a virtual colonoscopy performed using computed tomography.

MGT Capital Investments, Inc. (OTCMKTS:MGTI) Recent Trading Information

MGT Capital Investments, Inc. (OTCMKTS:MGTI) closed its last trading session down -0.030 at 0.700 with 98,733 shares trading hands.