MGT Capital Investments, Inc. BUILDING VALUE WITH GAMING TECHNOLOGY

Transcription

1 MGT Capital Investments, Inc.

2 Safe Harbor Statement Ma.ers discussed in this Presenta6on contain forward- looking statements within the meaning of the Private Securi6es Li6ga6on Reform Act of When used in this document, the words "an6cipate," "believe," "es6mate," "may," "intend," "expect" and similar expressions iden6fy such forward- looking statements. These forward- looking statements are subject to risks, uncertain6es, assump6ons, and other factors that may cause the actual results, performance or achievements to differ materially from those contemplated, expressed or implied by such forward- looking statements. These factors include, but are not limited to, risks and uncertain6es associated with the impact of economic, compe66ve and other factors affec6ng the Company and its opera6ons, markets, product, and distributor performance, the impact on the na6onal and local economies resul6ng from terrorist ac6ons, and U.S. ac6ons subsequently; and other factors detailed in reports filed by the Company.

3 Corporate Profile NYSE MKT:MGT Market Cap:$24.5M (1) 500 Mamaroneck Ave. Suite 204 Harrison, NY Phone:(914) Insider Ownership: 30% R. Ladd (CEO) 10% R. Traversa (CFO) 4% Other Insiders 16% Financial Informa4on (2) Shares o/s 8.1M Cash: $5.0M Total Assets: $12.8M Total Debt: $0.1M MGT Capital Investments and its subsidiaries are engaged in the business of acquiring, developing and mone6zing assets in the online and mobile gaming space. MGT s acquisi6on strategy is designed to obtain control of assets with a focus on risk mi6ga6on coupled with large poten6al upside. FanThrowdown.com: Daily fantasy sports wagering. MGT Studios: Social mobile gaming. M2P: Online videogames of skill. Real Deal Poker: Ensure fairness and transparency in online card dealing. 088 and 054 Patents: Video slot machine IP; mone6za6on via legal enforcement. In June 2013, MGT sold its IP pormolio focused on medical imaging technology to Samsung Electronics for $1.5 million. Large insider ownership aligns interest of management and stockholders. Strong balance sheet and access to addi6onal capital has MGT well- posi6oned for further acquisi6ons. (1) As of December 4, 2013 (2) As of September 30,

4 Execu6ve Team & Board Robert Ladd Chief Execu4ve Officer 30 years experience as Wall Street money manager, including as Managing Director at Neuberger Berman. Also served as Managing Partner of Laddcap Value Advisors, an investment fund with a pormolio strategy of taking ac6vist posi6ons in undervalued small cap companies. Former Director of Delcath Systems, Inc. (NASDAQ:DCTH), a specialty pharmaceu6cal and medical device company focused on the field of oncology, and InFocus Systems, Inc. (NASDAQ:INFS), marketer of video projectors. B.S. in Economics University of Pennsylvania; M.B.A. Northwestern University; and CFA Cer6fica6on. Robert Traversa Chief Financial Officer Former Senior Vice President at Neuberger Berman and former Financial Analyst at Bankers Trust in the Investment Management Division. CPA Designa6on; Served as an auditor at Price Waterhouse Robert Holmes Independent Chairman Co- founder of Gilford Securi6es, financial services firm focused on wealth management and advisory services for emerging growth and mid- sized companies. Former Director of Dejour Energy Inc. (TSX:DEJ), a Canadian oil and gas explora6on and produc6on company. Michael Onghai Independent Director CEO of LookSmart, Inc. (NASDAQ:LOOK). Founder of AppAddic6ve, Inc. Over 18 years of Internet technology startup experience, including third employee at GeoCi6es. 4

5 Corporate Strategy MGT seeks to build out its gaming porjolio by enac4ng a four- part strategy ü ü ü ü Assess: Seek out large gaming opportuni6es via extensive research and analysis. Acquire: Secure controlling interests for modest cash/stock outlays. Invest: Fund opera6ng costs to develop business opera6ons and mo6vate sellers with equity upside. Mone4ze: Buy to sell or operate for free cash flow. Objec4ve: Increase asset value per MGT share and reduce dependence on further equity capital. [insert )me] [insert )me] 5

6 MGT s Recent Ac6vity MGT Capital has been ac6ve over the past year enforcing its patent pormolio, mone6zing its IP, and execu6ng mul6ple, key acquisi6ons in the gaming space. April 2013 Acquired Fanthrowdown.com (Enter online fantasy sports wagering industry) May 2013 Legacy medical imaging technology IP sold to Samsung Electronic for $1.5M Aug 2013 Sept 2013 U.S. Patent #8,500,554 granted (Amend casino gaming complaint filed) Joint venture with M2P to introduce skilled gaming plamorm in US Q Q Nov 2012 June 2013 July2013 Aug 2013 Filed patent infringement lawsuit ( 088) against major casino and slot machine manufacturers (1) Markman Hearing date set for June 5, 2014 regarding patent infringement Applied for New Jersey Casino Services License (internet gambling) Acquire assets of RealDealPoker: 7 U.S. Patents & Internet URLs (1) Defendants include Caesars Entertainment (NASDAQ:CZR), MGM Resorts Interna6onal (NYSE:MGM), WMS Gaming Inc. subsidiary of Scien6fic Games Corpora6on (NASDAQ:SGMS), Penn Na6onal Gaming, Inc. (NASDAQ:PENN) and Aruze Gaming America 6

7 MGT Play.com MGT is crea6ng an online plamorm for wagering on skill- based games. Beta launch expected 4Q Full launch 1Q Wagering on skilled- based games is legal in 36 states. Joint venture partner M2P Entertainment GmbH has considerable installed base and technical exper6se. 12 million facebook app downloads $200,000 per week in wagers on European site Retained Tony Cabot of Lewis & Roca LLP, the leading internet gaming legal expert. 7

8 MGT Play.com 8

9 MGT Studios MGT is crea6ng a mobile plamorm for social casino games, a $2.0 billion market. Novel slot machine launch expected 1Q Proprietary sowware plamorm for secure gaming, mobile development, and sophis6cated analy6cs. Team comprised of technical and crea6ve talent, with special exper6se in lead genera6on and player acquisi6on. 9

10 FanThrowdown.com In April 2013, MGT acquired a majority stake in FanThrowdown.com FanThrowdown.com offers daily fantasy game play for the NFL, MLB, NCAA (basketball & football), NHL, NBA and professional golf. FanThrowdown.com offers players the opportunity to par6cipate in real money daily fantasy game play via online wagering. Users select a roster of athletes across the most popular sports and winnings are determined by the same- day performance of the selected roster. 10

11 Fantasy Sports Market Opportunity Fantasy Sports is a lucra6ve business opportunity with over 35 million Fantasy Sports players in North America, up from 9 million in (1) In 2012, daily fantasy sports racked in about $465 million in contestant fees. (1) Daily fantasy sports financial a.rac6veness has caught the a.rac6on of notable investors including: CBS Sports launched its Four Week Player Challenge, a pay- to- enter fantasy football contest that lasts for just four slates of NFL games. (2) Cantor Ventures (venture capital arm of Cantor Fitzgerald) invested $25.0 million into TopLine Game Labs. (3) Comcast Ventures (venture capital arm of Comcast Corpora6on) along with other investors invested $11 million into FanDuel. (3) IAC/InterAc4veCorp (NASDAQ:IACI) invested an undisclosed amount in DrawStreet Fantasy sports wagering is currently legal in 45 states (1) Fantasy Sports Trade AssociaDon (2) Forbes CBS Sports ConDnues to Inch Closer Toward Daily Fantasy Football September 10, 2013 (3) S&P CapitalIQ 11

12 RealDealPoker.com In September 2013, MGT acquired assets from Gioia Systems LLC, the inventor and owner of a proprietary method of card shuffling for the online poker market. Assets include 7 U.S. patents and several Internet URL addresses Technology: Uses patented shuffling machines, along with permuta6on re- sequencing, that allow for the crea6on of up to 16,000 decks per minute in real 6me. Marke4ng: Exhibited the system at the G2E Conven6on, the world s largest casino gaming event, in Las Vegas in late Sept 13. Online poker wagering is currently legal in Nevada and New Jersey Future opportuni6es as other states liberalize restric6ons MGT has filed an applica6on for a New Jersey Casino Service Industry Enterprise License as required to offer internet gambling services Real Deal offers online poker sites fairness and full transparency with a full audit trail for regulatory authori)es 12

13 MGT Gaming Patents & Infringement Patent Infringement lawsuit filed in November 2012 for patent ( 088) against casino and gaming operators: Caesars Entertainment (NASDAQ:CZR) / MGM Resorts Interna6onal (NYSE:MGM) / WMS Gaming Inc. sub. of WMS Industries, Inc. (NYSE:WMS) / Penn Na6onal Gaming, Inc. (NASDAQ:PENN) / Aruze Gaming America Latest updates: Markman Hearing set for June 4, 2014 In Sept 2013, MGT filed an Amended Complaint seeking to add allega6ons of infringement on patent ( 554) Nixon & Vanderhye P.C., a na6onally ranked IP li6ga6on law firm, has been retained on con6ngency basis to direct the process of enforcing the Company s ownership rights. MGT Gaming Patent Overview & Infringement Patent Title Issued Descrip6on U.S. #7,892,088 Gaming Device Having a Second Separate Bonusing Event Feb 2011 Patent relates to gaming systems linked to an interac6ve sign and includes all filed con6nua6on patents. U.S. #8,500,554 Gaming Device Having a Second Bonusing Event Aug 2013 Patent relates to a gaming system in which a bonus game is played on an interac6ve display 13

14 Patent Infringement Opportunity Es6mated Present Value of Royal6es over Life of Patent: $330 MILLION - $4.5 BILLION LOW END ,000 $3,000 $3.3B 1.0% $33M Number of Infringing Machines Revenue per Machine per Day Annual Infringing Revenue Reasonable Royalty Rate Annual Revenue Poten6al to MGT Gaming HIGH END SOURCE: COMPANY AND INDUSTRY ESTIMATES 14

15 Summary MGT is poised to become a leading player in Internet and mobile gaming and wagering. Strong balance sheet; well- posi6oned for addi6onal acquisi6ons. Forward- thinking, experienced management team aligned with stockholders interests. Ini6al acquisi6ons focused on high payoff poten6al and limited risk. Pipeline of similar value- crea6ng deals.

16 MGT Capital Investments, Inc.