MGTI

This Quarterly Report on Form 10–Q (this “Report”) contains forward–looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward–looking statements. The statements contained herein that are not purely historical are forward–looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward–looking statements are often identified by the use of words such as, but not limited to, “anticipate,” “estimates,” “should,” “expect,” “guidance,” “project,” “intend,” “plan,” “believe” and similar expressions or variations intended to identify forward–looking statements. These statements are based on the beliefs and assumptions of our management based on information currently available to management. Such forward–looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward–looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” included in our Annual Report on Form 10–K for the fiscal year ended December 31, 2025 as filed with the Securities and Exchange Commission (“SEC”) on March 17, 2026, in addition to other public reports we filed with the SEC. The forward–looking statements set forth herein speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward–looking statements to reflect events or circumstances after the date of such statements. Overview MGT historically operated in the Bitcoin mining and hosting industry. Our previous business model was dependent on the economics of digital asset mining, including the price of Bitcoin, electricity costs, and access to competitive hosting capacity. During the fiscal year ended December 31, 2025, our operations underwent a significant strategic transition resulting from the cessation of active mining operations and the sale of our primary operating facility. Following the expiration of our primary hosting customer lease in March 2025, the Company discontinued all self-mining activities. On May 13, 2025, the Company completed the sale of its LaFayette, Georgia facility for $1.35 million. This sale included land, containers, and electrical infrastructure associated with our former hosting and mining operations. As a result of these developments, the Company currently does not have active revenue-generating operations. We continue to own approximately 35 Antminer S19 Pro miners, which have been relocated to storage pending management’s determination of their future use or redeployment. Management is currently engaged in an on-going active strategic review process to determine the Company’s future direction. Our near-term priorities focus on the following core objectives: ● Maintaining Compliance: Prioritizing the resolution of delays in SEC periodic reporting to regain and maintain full reporting status and corporate good standing. ● Capital Formation and Liquidity: Raising appropriate capital to meet operating needs for a minimum of 12 months while actively managing remaining corporate infrastructure to minimize overhead. ● Market Position: Evaluating opportunities to enhance our equity market position, including potential exchange listings and broker-dealer quotation status. ● Strategic Alternatives: Identifying and executing new ventures, which may include potential mergers, acquisitions, or entry into alternative business lines that leverage our historical expertise in digital assets and technology infrastructure. While we continue to evaluate various strategic options, including potential partnerships and business combinations, these discussions are exploratory and have not resulted in any binding agreements as of the date of this report. Management does not view MGT as a passive holding or investment entity, but rather as an operating public company in a strategic transition phase. All dollar figures set forth in this Quarterly Report on Form 10-Q are in thousands, except per-share amounts. Critical accounting policies and estimates Our discussion and analysis of financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The notes to the unaudited condensed financial statements contained in this Quarterly Report describe our significant accounting policies used in the preparation of the unaudited condensed financial statements. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. We continually evaluate our critical accounting policies and estimates. We believe the critical accounting policies listed below reflect significant judgments, estimates and assumptions used in the preparation of our unaudited condensed financial statements. Revenue Recognition General The Company recognizes revenue in accordance with Accounting Standards Codification 606, Revenue from Contracts with Customers (“ASC 606”). ASC 606 establishes a principles-based framework for recognizing revenue that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. As of March 2025, the Company ceased all active revenue-generating operations related to cryptocurrency mining and hosting activities. Accordingly, the following policies primarily relate to historical and comparative periods presented in these financial statements and any limited residual activities during the fiscal year ended December 31, 2025. 13 Crypto asset mining (Historical and Comparative) The Company recognizes revenue under ASC 606. The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle: ● Step 1: Identify the contract with the customer ● Step 2: Identify the performance obligations in the contract ● Step 3: Determine the transaction price ● Step 4: Allocate the transaction price to the performance obligations in the contract ● Step 5: Recognize revenue when the Company satisfies a performance obligation In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met: The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct), and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract). If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all the following: ● Variable consideration ● Constraining estimates of variable consideration ● The existence of a significant financing component in the contract ● Noncash consideration ● Consideration payable to a customer Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate. The Company earns Bitcoin mining revenue from two primary sources: the operation of its owned miners and the operation of third-party owned miners that the Company has concluded are subject to abandonment. Historically, the Company participated in third-party operated digital asset mining pools in which it contributed computing power in exchange for a proportional share of cryptocurrency rewards generated by the pool. The Company has entered into digital asset mining pools by executing contracts, as amended from time to time, with the mining pool operators to provide computing power to the mining pool. The contracts are terminable at any time by either party and the Company’s enforceable right to compensation only begins when the Company provides computing power to the mining pool operator. The Company’s performance obligation under these agreements was the continuous provision of computing power to the mining pool operator. In exchange, the Company received non-cash consideration in the form of Bitcoin representing its proportional share of the total cryptocurrency rewards earned by the mining pool during the applicable period. The Company’s share was based on the proportion of computing power the Company contributed to the mining pool relative to the total computing power contributed by all mining pool participants. In exchange for providing computing power, the Company is entitled to a fractional share of the fixed cryptocurrency award the mining pool operator receives (less digital asset transaction fees to the mining pool operator which are recorded as a component of cost of revenues), for successfully adding a block to the Blockchain. The terms of the agreement provide that neither party can dispute settlement terms after thirty-five days following settlement. The Company’s fractional share is based on the proportion of computing power the Company contributed to the mining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm. Providing computing power to solve complex cryptographic algorithms in support of the Bitcoin Blockchain (in a process known as “solving a block”) is an output of the Company’s ordinary activities. The provision of providing such computing power is the only performance obligation in the Company’s agreements with mining pool operators. The transaction consideration the Company receives, if any, is noncash consideration, which the Company measures at fair value on the date received, which is not materially different than the fair value at contract inception or the time the Company has earned the award from the pools. The consideration is all variable. Because it is not probable that a significant reversal of cumulative revenue will not occur, the consideration is constrained until the mining pool operator successfully places a block (by being the first to solve an algorithm) and the Company receives confirmation of the consideration it will receive, at which time revenue is recognized. There is no significant financing component in these transactions. Fair value of the cryptocurrency award received is determined using the quoted price of the related cryptocurrency at the time of receipt. In 2023, the FASB issued ASU 2023-08, which addresses the accounting and disclosure requirements for certain crypto assets. The new guidance requires entities to subsequently measure certain crypto assets at fair value, with changes in fair value recorded in net income in each reporting period. In addition, entities are required to provide additional disclosures about the holdings of certain crypto assets. The ASU’s amendments are effective for fiscal years beginning after December 15, 2024, including interim periods within those years. There was no specific definitive guidance under GAAP or alternative accounting framework for the accounting for cryptocurrencies recognized as revenue or held, prior to the issuance of ASU 2023-08 and management has exercised significant judgment in determining the appropriate accounting treatment for the current year. The Company evaluated the impact of ASU 2023-08 and determined that the standard did not have a material impact on its financial statements. Hosting Revenues We receive revenues from third parties renting capacity at our facility and from hosting miners owned by others. Under these agreements, the Company provided hosting services that included supplying electrical power, infrastructure support, monitoring, and operational maintenance for third-party mining equipment located within the Company’s facilities. The Company recognized $0 and $58 from these sources during the three months ended June 30, 2026 and 2025, respectively. During the six months ended June 30, 2025, one customer accounted for 100% of hosting revenue. After a hosting agreement expires, the Company no longer recognizes hosting revenue for the related miners. 14 Recent accounting pronouncements See Note 3 to our unaudited condensed financial statements appearing in Part I, Item 1 of this Report for Recent Accounting Pronouncements. Results of operations Three months ended June 30, 2026 and 2025 Revenues Our revenues for the three months ended June 30, 2026 were $0, which remained unchanged compared to $0 for the three months ended June 30, 2025. Our historical revenue is partly derived from cryptocurrency mining and third-party hosting activities, both of which generated $0 during the three months ended June 30, 2026 and 2025. The absence of revenue in both periods is due to the cessation of all self-mining activities and the expiration of our primary hosting agreement in March 2025. The Company’s historical revenues have been derived from Bitcoin mining and hosting activities. The future revenue potential of these activities is inherently uncertain and is influenced by factors outside the Company’s control, including: (i) the market price and volatility of Bitcoin; (ii) network difficulty and global hash-rate changes; (iii) the availability and cost of energy; (iv) regulatory developments affecting digital asset markets, mining activities, or the classification and custody of digital assets; and (v) general macroeconomic conditions. Following the expiration of our primary hosting agreement and the cessation of self-mining activities in March 2025, the Company has not generated revenue from digital currency operations. As of the date of this Report, the Company has not resumed mining or hosting activities, and future revenue will depend on the Company’s ability to identify, pursue, and execute new business opportunities or re-establish operations in the digital asset sector or other industries. Given these factors, management is unable to reasonably estimate future revenue trends. The Company will continue to evaluate available strategic and operational opportunities as it progresses with its regulatory compliance efforts and capital planning initiatives. Operating Expenses Cost of revenue for the three months ended June 30, 2026, decreased by $11, or 100%, to $0, as compared to $11 for the three months ended June 30, 2025. This decrease is entirely attributable to the complete cessation of all self-mining and third-party hosting activities at our LaFayette facility, which occurred in March 2025. The Company did not incur any direct operational costs related to digital asset infrastructure during the three months ended June 30, 2026. General and administrative expenses for the three months ended June 30, 2026, decreased by $27, or 15%, to $149, as compared to $176 for the three months ended June 30, 2025. The overall decrease primarily reflected lower audit fees of $23, legal fees of $3, closing-related costs of $6, telephone and utilities expense of $3, and a substantial reduction in external consulting services of $53 following the stabilization of corporate restructuring efforts. These decreases were partially offset by higher compliance-related costs, including increased insurance premiums of $35, tax review fees of $6, investor relations expense of $4, and payroll fees of $16. Other Income and Expense For the three months ended June 30, 2026, non–operating income (expense) of $2,624 consisted of interest expense of $24, accretion of debt discount of $5 and loss on debt extinguishment of $2,814, offset by gain on the settlement of debt of $161 and gain on settlement of payables of $58. During the comparable period ended June 30, 2025, non–operating income of $633 consisted of interest expense of $43 offset by gain on sale of property of $676. Six months ended June 30, 2026 and 2025 Revenues Our revenues for the six months ended June 30, 2026, decreased by $87, or 100%, to $0, as compared to $87 for the six months ended June 30, 2025. Our revenue was historically derived in part from cryptocurrency mining, which totaled $0 for the six months ended June 30, 2026, compared to $29 during the six months ended June 30, 2025. The decrease in revenues from mining activities for this period is due to the cessation of self-mining activities in March 2025. We also historically received revenues from third parties renting capacity at our facility and from hosting miners owned by others. The Company recognized $0 and $58 in hosting and rental revenues during the six months ended June 30, 2026, and 2025, respectively. The decrease in revenues for this period is due to the expiration of our lease agreement with our primary hosting customer in March 2025. The Company’s historical revenues have been derived from Bitcoin mining and hosting activities. The future revenue potential of these activities is inherently uncertain and is influenced by factors outside the Company’s control, including: (i) the market price and volatility of Bitcoin; (ii) network difficulty and global hash-rate changes; (iii) the availability and cost of energy; (iv) regulatory developments affecting digital asset markets, mining activities, or the classification and custody of digital assets; and (v) general macroeconomic conditions. In addition, following the expiration of our primary hosting agreement and the cessation of self-mining activities in March 2025, the Company has not generated revenue from digital currency operations. As of the date of this Report, the Company has not resumed mining or hosting activities, and future revenue will depend on the Company’s ability to identify, pursue, and execute new business opportunities or re-establish operations in the digital asset sector or other industries. Given these factors, management is unable to reasonably estimate future revenue trends. The Company will continue to evaluate available strategic and operational opportunities as it progresses with its regulatory compliance efforts and capital planning initiatives. 15 Operating Expenses Cost of revenue for the six months ended June 30, 2026, decreased by $89, or 100%, to $0, as compared to $89 for the six months ended June 30, 2025. This decrease is entirely due to the cessation of cryptocurrency self-mining activities and third-party hosting operations at the LaFayette facility in March 2025, which eliminated all associated direct data center utility infrastructure, electricity, and operational depreciation costs for the current period. General and administrative expenses for the six months ended June 30, 2026, decreased by $48, or 14%, to $301, as compared to $349 for the six months ended June 30, 2025. The overall decrease primarily reflected lower audit fees of $24, closing-related costs of $6, telephone and utilities expense of $6, and a substantial reduction in external consulting services of $119. These decreases were partially offset by higher compliance-related costs, including increased insurance premiums of $52, tax review fees of $6, legal fees of $4, investor relations expense of $6, administrative fees of $3, and payroll fees of $36. Other Income and Expense For the six months ended June 30, 2026, non–operating income (expense) of $2,654 consisted of interest expense of $49, accretion of debt discount of $10 and loss on debt extinguishment of $2,814, offset by gain on the settlement of debt of $161 and gain on settlement of payables of $58. During the comparable period ended June 30, 2025, non–operating income of $583 consisted of interest expense of $93, offset by gain on sale of property of $676. Liquidity and capital resources Sources of Liquidity We have historically financed our business through the sale of debt and equity interests. On March 15, 2025, the Company’s lease with its primary hosting customer expired, and the Company discontinued its own self-mining operations at the LaFayette, Georgia facility. The related lease and partnership arrangements ceased, and the Company’s remaining self-mining equipment was placed in storage pending evaluation of redeployment alternatives. On May 13, 2025, the Company completed the sale of its cryptocurrency mining and hosting facility located in LaFayette, Georgia to CSRE Properties LLC for $1,350. The sale included all structures, containers, and electrical infrastructure associated with prior hosting and mining operations. The Company used $662 of the proceeds to repay principal and accrued interest on its outstanding debt. The transaction generated a $676 gain on sale. The sale of the LaFayette facility provided critical liquidity used primarily to reduce outstanding indebtedness and stabilize the Company’s financial position. Management determined that the disposal was a liquidity-driven event and not indicative of a strategic change in business direction as contemplated by ASC 205-20. On September 22, 2025, the Company entered into a note exchange transaction with our secured lender. As part of the transaction, we issued a new secured convertible promissory note in the principal amount of $1,220 with a maturity date of December 31, 2027, in exchange for the surrender and cancellation of our prior secured note that was originally scheduled to mature on December 31, 2025. We also issued 500,000,000 shares of common stock as additional consideration to the lender. The Company accounted for this transaction as a modification of the existing secured note rather than an extinguishment under ASC 470-50; no gain or loss was recognized. This transaction extended our secured debt maturity by approximately two years, providing additional time to execute our operational plans and reducing short-term liquidity pressure. No cash was used to complete the transaction. On September 23, 2025, we issued shares of our common stock to a director, our Interim CEO & CFO, and an employee. These issuances reduced accrued liabilities and resulted in non-cash compensation expense where applicable. Because our common stock carries a par value of $0.001, the par-value requirement resulted in corresponding adjustments to additional paid-in capital. These equity issuances did not require the use of cash and increased total stockholders’ equity. These equity grants did not impact our cash position, as the obligations were satisfied through the issuance of common stock. The settlement of the director’s accrued fees reduced current liabilities, and the compensation-related grants resulted in non-cash expenses recorded during the period. We continue to evaluate the use of equity-based arrangements, where appropriate, to conserve cash while aligning compensation with Company performance and service requirements. On December 23, 2025, we initiated a common stock offering to raise up to $1,000 at $0.001 per share from accredited investors. The offering is exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D thereunder. The offering closed on January 29, 2026 with the company raising $675 and issuing a total of 675,000,000 common shares. On February 10, 2026, we initiated a common stock offering to raise up to $500 at $0.001 per share from accredited investors. The offering is exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D thereunder. Through June 30, 2026, the Company has raised $250 and issued a total of 250,000,000 common shares. The offering was ongoing at June 30,2026 and is set to expire July 31, 2026 unless extended by management 30 days. The funds are being used as general working capital for the Company. On May 14, 2026, the company settled $262 of outstanding payables through the issuance of 100,000,000 shares of common stock to an accredited investor. The issuance was exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended. On June 30, 2026, the Company issued 150,000,000 shares of common stock to an accredited investor that participated in a private placement for $50. The issuance was exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended. On June 30, 2026, the Company entered into an exchange agreement, whereby, it issued 750,131,126 shares of common stock and 3,250,000 shares of a newly designated series of preferred stock, designated as Series E Convertible Preferred Stock, par value $0.001 per share that are convertible into 3,250,000,000 common shares in consideration for $1,220 in outstanding Secured Convertible Promissory Notes. The issuance of 3,250,000 shares of Series E Preferred Stock and 750,131,126 shares of Common Stock to Project Nickel LLC was not registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon the exemption from registration provided by Section 3(a)(9) of the Securities Act, as an exchange of securities by an issuer with an existing security holder exclusively where no commission or other remuneration was paid or given directly or indirectly for soliciting such exchange. 16 Going Concern The accompanying unaudited condensed financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred operating losses since inception and continues to generate losses from operations. For the six months ended June 30, 2026, the Company had a net loss of $2,955 and cash used in operating activities of $531. As of June 30, 2026, the Company had an accumulated deficit of $429,692, cash and cash equivalents of $232, and our working capital deficit was $461. Following the cessation of digital-asset mining operations in March 2025 and the sale of the LaFayette, Georgia facility in May 2025, the Company currently does not have active revenue-generating operations. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern for a period of at least one year from the date of the issuance of the unaudited condensed financial statements included in this report. Management’s plans to mitigate these conditions include continuing to raise capital through debt and equity issuances and pursuing strategic initiatives, including potential business combinations or partnerships. However, there can be no assurance that the Company will be able to raise additional capital or execute these plans on acceptable terms, if at all. Since January 2023, we have raised approximately $2,975 through convertible notes, the sale of equity and warrants, proceeds from asset sales, and related-party financing. Management also implemented certain modifications to simplify our capital structure and extend debt maturities to provide additional near-term financial and strategic flexibility. The unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty. For further information regarding the Company’s ability to continue as a going concern and management’s plans, see Note 2, “Summary of Significant Accounting Policies – Going Concern and Management’s Plans,” in the Notes to the Unaudited Condensed