Operating leases, commitments and security deposit

9 Months Ended

Sep. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments Disclosure [Text Block]

Note 5. Operating leases, commitments and security deposit

Operating leases

In September 2011, the Company entered into a 39–month lease agreement for office space located in Harrison, New York, terminating on November 30, 2014. Under the agreement our total rental payments over the 39–month lease period are $240, inclusive of three months of free rent and a refundable rental deposit of $39, held in a restricted cash account.

On August 20, 2014 the Company entered into a First Lease Modification and Extension Agreement, extending for a period of one year the current lease on the Harrison office. Under the agreement the total rental payments over the next twelve months are $71.

In May 2013, the Company assumed a 24–month lease agreement for office space located in Saratoga Springs, New York terminating on October 31, 2014. Under the agreement our total rental payments over the lease period are $2, and a security deposit of $2.

In January 2014, the Company entered into a six–month lease agreement for temporary office space due to the Avcom acquisition located in New York, NY, terminating on June 30, 2014. Under the agreement our total rental payments over the lease period are $3, and a security deposit of $3.

The following is a schedule of the future minimum payments required under operating leases in the aggregate and for each subsequent year through lease maturity:

Year ending
2014	$	21
2015		65
Total	$	86

Total lease rental expense for the three months ended September 30, 2014, and 2013, was $30 and $53, respectively. Total lease rental expense for the nine months ended September 30, 2014, and 2013, was $92 and $109, respectively.

Commitments

STATS licensing agreement

On May 1, 2014, the Company entered into a licensing agreement with STATS LLC (“STATS”) effective February 1, 2014. In exchange for the right and license to both use certain of STATS’ proprietary information for use with daily and seasonal games and to power the scoring with the Company’s fantasy sports games on the Company’s websites, the Company has agreed to pay the following monthly license fees of $11 per month for February–May 2014, $26 for June and $20 per month thereafter through December 2015. The agreement expires on December 31, 2015. The Company expensed $60 and $144 for the three and nine month periods ended September 30, 2014, respectively.

DFS agreement

On April 24, 2014, the Company, through its subsidiaries FanTD and MGT Sports, entered into a six month Amended and Restated Consulting Agreement with DFS Consultants LLC (the “Consultants”), giving effect as of March 5, 2014.

In exchange for expert promotional and site design services and subject to receipt of the applicable deliveries by the Consultant the Company agreed to provide the following compensation to the Consultant:

Each month, MGT shall issue to the Consultant 5,000 shares of MGT Restricted Common Stock, payable monthly in arrears. A total of 30,000 shares has been issued as of September 30, 2014. For the three and nine month periods ended September 30, 2014, the Company has expensed $24 and $48 respectively, for the services.

Additionally, on April 4, 2014, the Company agreed to issue to the Consultant a warrant to purchase 100,000 shares of common stock, which will vest immediately upon issuance. The warrant was valued at $80 utilizing the Black–Scholes Option pricing model based on 75% volatility rate. The Company expensed $71 relating to the warrant.