Note 2: Liquidity and financial condition

The Company has incurred significant operating losses since inception and continues to generate losses from operations. As a result, the Company has generated negative cash flows from operations and has an accumulated deficit of $291,803 at September 30, 2013. The Company is operating in a competitive industry based on changing technology and its primary source of funds to date has been through the issuance of securities. Moreover, going forward, there can be no assurance that the Company’s products or patent monetization strategy will be successful in generating earnings for the Company.

At September 30, 2013, MGT’s cash, cash equivalents and restricted cash totaled $5,049, which includes $18 held in MGT Gaming and $231 in FanTD.

To date, we have primarily financed our operations through private placements of equity and debt securities. To the extent that additional capital is raised through the sale of equity or equity-related securities of the Company or its subsidiaries, the issuance of such securities could result in dilution to our stockholders.

No assurance can be given, however, that we will have access to the capital markets in the future, or that financing will be available on acceptable terms, if at all, to satisfy our cash requirements to implement our business strategies.

If we are unable to access the capital markets or obtain acceptable financing, our results of operations and financial conditions could be materially and adversely affected. We may be required to raise substantial additional funds through other means.

Commercial results have been limited and we have not generated significant revenues. We cannot assure our stockholders that our revenues will be sufficient to fund our operations. If adequate funds are not available to us, we may be required to curtail operations significantly or to obtain funds through entering into arrangements with collaborative partners or others that may require us to relinquish rights to certain of our technologies or products that we would not otherwise relinquish.

Currently, the Company anticipates it has sufficient cash on hand to continue operations at least through the next twelve months.