Subsequent events

3 Months Ended

Mar. 31, 2014

Note 10. Subsequent events

On April 7, 2014, the Company issued an 8–K announcing that the Company entered into and closed on the Asset Purchase Agreement (the “Agreement”) by and among the Company, CardRunners Gaming, Inc. (“CRG”), and certain key shareholders of CRG. The Agreement provides for the Company’s purchase of the business assets and intellectual property related to the daily fantasy sports website draftday.com.

The purchase price under the Agreement was $600 in cash and 95,166 shares of the Company’s common stock, of which 47,583 shares were placed in escrow for six months in order to support certain indemnification obligations of CRG under the terms of the Agreement. As according to ASC 805 “Business Combinations.”, the transaction will be accounted for as an acquisition of business.

On February 10, 2014, the Company and MGT Sports entered into a Separation Agreement and Release (“Separation Agreement”) with an employee and original founder of FanTD (the “Founder”). Upon execution of the Separation Agreement, the Founder’s employment with the Company was terminated. The Company agreed to pay any unpaid compensation through the termination date and an additional lump sum payment of $15,000 and the Founder agreed to certain non-compete and non-solicit restrictions. The Company also agreed to enter into an Exchange Agreement which provided for the transfer by the Founder of all Units of FanTD to MGT Sports in exchange for 52,500 shares of the Company’s Common Stock. The exchange was subject to the NYSE MKT’s approval of the listing of the additional shares, which was obtained on April 4, 2014.