HARRISON, N.Y., Feb. 27, 2015 /PRNewswire/ -- MGT Capital
Investments, Inc. (NYSE MKT: MGT) announced today that it has
entered into a Letter of Intent ("LOI") with Tera Group, Inc.,
("Tera") owner of TeraExchange, LLC, a Swap Execution Facility
regulated by the Commodity Futures Trading Commission
("CFTC"). Pursuant to the LOI, both companies will work
diligently to finalize and execute a definitive agreement by
March 16, 2015.
MGT will then file a combination S-4 Prospectus and Proxy
Statement with the Securities and Exchange Commission. Under
the contemplated terms of the agreement, and subject to stockholder
approval, MGT will issue shares of its common stock to the current
owners of Tera, representing 70% of the pro forma equity of the
combined companies at closing.
Tera has played a leading role in the development of bitcoin
derivatives. In September 2014, Tera
launched on TeraExchange the first regulated Bitcoin derivative
products, and a spot Bitcoin price index. Trading of
USD/Bitcoin derivatives is subject to the rules and regulations of
TeraExchange and the CFTC. The Tera Bitcoin Price Index
("TeraBit") employs a dynamic algorithm that compiles and filters
data on a real-time basis from a number of widely utilized global
Bitcoin spot exchanges. The TeraBit Index will be used as the
settlement rate for USD/Bitcoin derivatives
transactions.
"Growing consumer and merchant adoption of bitcoin is driving
demand for regulated capital markets solutions. By combining with
MGT, Tera will create a unique public offering to support the
essential infrastructure needed for a vibrant global bitcoin
ecosystem," said Christian D.
Martin, Chairman, Chief Executive Officer and Co-Founder of
Tera.
"The proposed merger with Tera gives immediate and future value
to our stockholders, while creating a robust platform for the
growth of the industry's first publicly listed bitcoin derivatives
exchange," said H. Robert Holmes,
Chairman of MGT's board of directors, "The Bitcoin industry
attracted over $400 million of
investment capital from some of the world's most prominent
investors over the past 12 months; we see our move today as further
progress in the broader adoption of the industry."
Tera is led by a talented management team with a combined 47
years of experience in capital markets and derivative products, 43
years in legal and regulatory, and 46 years in technology
development and engineering.
Mr. Martin spent more than 20 years in senior trading and
management positions at Merrill Lynch and Bank of America, where he
was responsible for global trading desks of interest rates, credit,
and financing - securities lending transactions.
President, COO and Co-Founder Leonard T.
Nuara was formerly a shareholder in the international law
firm of Greenberg Traurig LLP. Prior to that, he was Chair of
the Technology and Intellectual Property Group at Thacher Proffitt
& Wood LLP. He is a nationally recognized leader in the
technology and intellectual property fields.
Chief Commercial Officer John
Maguire spent 18 years at Goldman Sachs, where he held
various roles, including interest rate and cross asset derivative
sales, marketing, and business development. Mr. Maguire is also the
former Global Head of Trading at Bridgewater Associates, the
largest hedge fund in the world.
Source Capital Group, Inc. acted as sole financial advisor to
Tera Group.
About MGT Capital Investments, Inc.
MGT Capital and
its subsidiaries operate social and real money gaming sites online
and in the mobile space, including ownership of the 3rd largest
daily fantasy sports wagering platform,www.DraftDay.com. The
Company also offers games of skill through www.MGTplay.com and
social casino games with SlotChamp™, and also operates an
online portal for fantasy sports news and commentary,
www.FantasySportsLive.com. MGT also launched Daily Fantasy
Legend in partnership with Facebook to become the First Daily
Fantasy Platform on Social Media. In addition, the Company
owns intellectual property relating to slot machines and has
asserted its claims via patent infringement lawsuits.
About Tera Group, Inc.
Tera Group owns TeraExchange
LLC, a Swap Execution Facility (SEF) regulated by the Commodity
Futures Trading Commission and provides market participants with
access to Bitcoin derivatives, interest rate swaps, credit default
swaps and non-deliverable forwards. TeraExchange is a global
pioneer in the derivatives marketplace and provides a multi-asset
class platform for trading of an array of financial
instruments.
Tera and TeraExchange are registered servicemarks and TeraBit
is a servicemark of Tera.
Forward-looking Statements
This press release contains
forward-looking statements. The words or phrases "would be," "will
allow," "intends to," "will likely result," "are expected to,"
"will continue," "is anticipated," "estimate," "project," or
similar expressions are intended to identify "forward-looking
statements." MGT's financial and operational results reflected
above should not be construed by any means as representative of the
current or future value of its common stock. All information set
forth in this news release, except historical and factual
information, represents forward-looking statements. This includes
all statements about the Company's plans, beliefs, estimates and
expectations. These statements are based on current estimates and
projections, which involve certain risks and uncertainties that
could cause actual results to differ materially from those in the
forward-looking statements. These risks and uncertainties include
issues related to: rapidly changing technology and evolving
standards in the industries in which the Company and its
subsidiaries operate; the ability to obtain sufficient funding to
continue operations, maintain adequate cash flow, profitably
exploit new business, license and sign new agreements; the
unpredictable nature of consumer preferences; and other factors set
forth in the Company's most recently filed annual report and
registration statement. Readers are cautioned not to place undue
reliance on these forward-looking statements, which reflect
management's analysis only as of the date hereof. The Company
undertakes no obligation to publicly revise these forward-looking
statements to reflect events or circumstances that arise after the
date hereof. Readers should carefully review the risks and
uncertainties described in other documents that the Company files
from time to time with the U.S. Securities and Exchange
Commission.
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SOURCE MGT Capital Investments, Inc.