Asset Purchase and Acquisition of a Business

6 Months Ended

Jun. 30, 2013

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

Note 4: Asset Purchase and Acquisition of a Business

Asset Purchase – Mobile Gaming

On May 2, 2013, the Company purchased certain mobile game application assets from Digital Angel Corporation. The purchase price consisted of a cash payment in the amount of $136 and 50,000 restricted shares of the Company’s common stock with an aggregate fair value of $203 as of the date this transaction was completed. The Company determined the acquisition constitutes a purchase of assets in accordance with guidance of ASC 805 Business combinations.

The following table summarizes the Company’s allocation of the purchase price to the separable components of the mobile applications based on their relative fair values at the date the purchase was completed.

Purchase price allocation
Computer and Software	$	28
Trademark		6
Intangible assets – Mobile Gaming application		305
Net assets acquired	$	339

Acquisition of FanTD LLC

On May 20, 2013, the Company completed the acquisition (the “Acquisition”) of 63.12% of the outstanding membership interests of FanTD in exchange for an aggregate purchase of $3,220 consisting of 600,000 shares of MGT common stock at a fair value of $5.03 per share for a total of $3,018 and a cash payment of $202. The fair value of the 36.88% non-controlling interest retained by the sellers in this transaction amounted to $1,882. The Company acquired FanTD, marking the Company’s initial venture in the online and mobile gaming and wagering space.

The Company recorded the purchase of FanTD using the acquisition method of accounting as specified in ASC 805 “Business Combinations.” This method of accounting requires the acquirer to (i) record purchase consideration issued to sellers in a business combination at fair value on the date control is obtained, (ii) determine the fair value of any non-controlling, and (iii) allocate the purchase consideration to all tangible and intangible assets acquired and liabilities assumed based on their acquisition date fair values. Further, the Company commenced reporting the results of FanTD on a consolidated basis with those of the Company effective upon the date of the acquisition. 

The following tables summarizes the preliminary estimated fair values of the net liabilities assumed and the allocation of the aggregate fair value of the purchase consideration, non-controlling interest and net liabilities assumed identifiable and unidentifiable intangible assets:

Purchase Consideration
Common stock (600,000 shares at the transaction date fair value of $5.03 per share)	$	3,018
Cash		202
Aggregate purchase consideration		3,220
Fair value of non-controlling interest		1,882
Aggregate fair value of enterprise		5,102
Purchase Price Allocation
Net current liabilities assumed		(93)
Property and equipment		4
Net liabilities assumed assets		(89)
Aggregate fair value of purchase consideration, non- controlling interest and net liabilities assumed allocated to intangible assets as follows:
Developed software		186
Customer list		33
Goodwill		4,972
Total Purchase Price Allocation	$	5,102

The following table summarizes, on an unaudited pro forma basis, the results of operations of the Company as though the acquisition had occurred as of January 1, 2012. The pro forma amounts give effect to appropriate adjustments of amortization of intangible assets and interest expense associated with the financing of the purchase. The pro forma amounts presented are not necessarily indicative of either the actual operation results had the acquisition transaction occurred as of January 1, 2012.

	For the Six Months Ended
	June 30, 2013		June 30, 2012
Revenues	$	215	$	269
Net loss		(5,871)		(2,106)
Loss per share of common stock		(1.04)		(1.00)
Basic and diluted		5,772,423		2,106,763

Fantasy Sports Live

On June 25, 2013, MGT Sports acquired Fantasy Sports Live, which is effectively a customer list associated with a specific gaming application for $30 in cash and the assumption of a $46 customer deposit liability.