Series A Convertible Preferred Stock

9 Months Ended

Sep. 30, 2014

Note 6. Series A Convertible Preferred Stock

On November 2, 2012, the Company closed a private placement sale of 1,380,362 shares of Series A Convertible Preferred Stock (“Preferred Stock”), (including 2,760,724 warrants to purchase MGT Common Stock) for an aggregate of $4.5 million. This transaction was approved by the NYSE MKT on October 26, 2012. The Preferred Stock is convertible into the Company's Common Stock at a fixed price of $3.26 per share and carries a 6% dividend. The warrants have a five–year life and are exercisable at $3.85 per share. Total issuance cost for this private placement for the year ended December 31, 2012, was $88.

For the three months ended September 30, 2014, and 2013, respectively, the Company issued 146 and 236 of Dividend Shares to the Preferred Stock holders. For the nine months ended September 30, 2014, and 2013, respectively, the Company issued 432 and 21,169 of Dividend Shares to the Preferred Stock holders. For the three and nine months ended September 30, 2014 the deemed dividend is considered immaterial.