Restatement of previously issued financial statements

9 Months Ended

Sep. 30, 2012

Statement of Financial Position [Abstract]

Condensed Financial Statements [Text Block]

Note 1: Restatement of previously issued financial statements

On May 15, 2013, after consulting with the Company’s Audit Committee, management concluded that certain of the Company’s warrants (“J&S Warrants”) received improper accounting treatment. The warrants should have been reflected as liabilities on the balance sheet included in the Company’s previously filed Quarterly Report on Form 10-Q for the period ended September 30, 2012 (the “Quarterly Report”), as opposed to a component of equity.

Specifically, due to certain anti-dilution provisions contained in the J&S Warrants, they are being reclassified to liabilities and will be marked-to-market each reporting period. The change in treatment of the warrants will result in a change to the equity and liability portions of the balance sheet at the aforementioned reporting date and will result in a loss on the revaluation of the warrants which impacts results of operations and loss per share as reported in our statement of operations for the period. In addition, the Company previously determined the fair value using the Black Scholes Model; however, due to the anti-dilution provisions, the Company determined the Binomial Lattice Practice Model was more appropriate. The use of the Binomial Lattice Practice Model caused an increase in the fair value of the J&S Warrants issued as consideration for the acquisition of the Patent which increased the amount recorded for the intangible asset and non-controlling interest. Such restatements for the correction of an error, however, will not impact cash flow or cash balances. In addition, as a result of Waiver Agreements obtained on May 20, 2013 from warrant holders, which removed the anti-dilution provision, the affected warrants will be treated as equity at June 30, 2013. Investors should be aware that the classification of the warrants as a liability will revert back to the originally reported equity treatment during the quarter ending June 30, 2013.

The following tables summarize the effects of the restatements on the specific items presented in the Company’s historical condensed consolidated financial statements previously included in the Quarterly Report:

Condensed Consolidated Balance Sheets

	September 30, 2012
	As previously reported			As restated
Intangible assets, net of accumulated amortization of $68	$	1,753		$	1,845
Total assets	$	7,257		$	7,349
Derivative liability - warrants	$	–		$	935
Total liabilities	$	3,188		$	4,123
Additional paid in capital	$	290,049		$	289,249
Accumulated deficit		(282,413	)		(282,498	)
Total stockholders' equity	$	935		$	50
Non-controlling interests	$	3,134		$	3,176
Total equity	$	4,069		$	3,226
Total stockholders' equity, liabilities and non-controlling interest	$	7,257		$	7,349

Condensed Consolidated Statements of Operations

	Three months ended September 30 2012						Nine months ended September 30, 2012
	As previously reported			As restated			As previously reported			As restated
Selling, general and administrative	$	716		$	815		$	2,620		$	2,719
Operating loss		(712	)		(811	)		(2,519	)		(2,618	)
Revaluation of warrant liability		–			623			–			13
Net loss before non-controlling interest		(1,003	)		(479	)		(2,911	)		(2,998	)
Net loss attributable to non-controlling interest		113			114			525			526
Net loss attributable to MGT Capital Investments, Inc.		(890	)		(365	)		(2,386	)		(2,471	)
Comprehensive loss attributable to non-controlling interest		112			113			492			493
Comprehensive loss attributable to MGT Capital Investments, Inc.		(886	)		(361	)		(2,346	)		(2,431	)
Basic and diluted loss per share	$	(0.41	)	$	(0.17	)	$	(1.12	)	$	(1.16	)