SCHEDULE: MGT Capital Investors: Project Nickel Boosts Stake to 51.66%

Project Nickel LLC, along with DAXvest LLC and Grady D. Kittrell, has increased its beneficial ownership of MGT Capital Investments, Inc. common stock to over 51.66%, primarily through a series of complex debt and warrant exchanges.

Summary

• Project Nickel LLC, DAXvest LLC, and Grady D. Kittrell (collectively, the Reporting Persons) have filed an amendment to Schedule 13D, increasing their beneficial ownership of MGT Capital Investments, Inc. common stock to 51.66% (3,250,131,126 shares) and 51.67% for Mr. Kittrell individually (3,250,331,126 shares).
• This increase in ownership is a result of multiple debt and warrant exchanges with the Issuer, starting with a Securities Purchase Agreement in September 2022.
• The latest exchange, on June 30, 2026, involved exchanging the 2025 Note for Series E Convertible Preferred Stock and newly-issued shares of Common Stock.
• The Reporting Persons acquired these shares for investment purposes and reserve the right to take future actions regarding their investment based on various factors.
• The total outstanding shares of Common Stock as of August 3, 2026, were reported as 6,290,802,029.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this filing as having a negative sentiment due to the significant dilution and ongoing debt exchanges, indicating potential financial distress for the issuer and a complex, potentially unfavorable situation for existing shareholders.

Positives

• The Reporting Persons have secured a significant stake in MGT Capital Investments, Inc., potentially positioning them for greater influence.
• The company has continued to secure funding through various note and warrant exchanges, indicating ongoing operational capacity despite complex financial maneuvers.

Negatives

• The continuous exchange of debt for equity and preferred stock represents significant dilution for existing common stockholders.
• The company has engaged in multiple debt extensions and exchanges, suggesting potential difficulties in meeting original financial obligations.
• The Series E Convertible Preferred Stock is convertible into 1,000 shares of Common Stock per share, indicating substantial future dilution potential.
• The Reporting Persons hold significant voting and dispositive power, potentially leading to a shift in corporate control.

Risks

• Significant future dilution is a risk for common stockholders due to the conversion features of preferred stock and potential future acquisitions of securities by the Reporting Persons.
• The ongoing reliance on debt exchanges and the issuance of new equity may indicate financial instability or a need for continuous capital infusion.
• The concentration of over 51.66% of the voting power in the hands of the Reporting Persons could lead to a change in corporate strategy or management that may not align with all shareholder interests.

Future Outlook

The Reporting Persons intend to evaluate their investment in the Issuer on an ongoing basis and may take various actions, including acquiring additional securities, disposing of holdings, or engaging in discussions with management and the board, depending on factors such as the Issuer's financial condition, strategic direction, market conditions, and alternative investment opportunities.

Management Comments

• Each Reporting Person disclaims beneficial ownership of the securities reported herein other than for the purpose of determining their obligations under Section 13(d) of the Act, and the filing of this Schedule 13D shall not be deemed an admission that any of DAXvest or Mr. Kittrell is the beneficial owner of such securities for any other purpose.
• The beneficiaries of Project Nickel LLC ultimately receive the pecuniary benefit of dividends from, or the proceeds from the sale of, the shares held by Project Nickel LLC.

Industry Context

StockSavvy.ai notes that this filing reflects a common strategy in distressed or early-stage companies where significant equity stakes are acquired through complex debt-for-equity swaps and convertible instruments, often leading to substantial dilution for existing shareholders and a shift in control.

Related Party Transactions

• The transactions described involve Project Nickel LLC, DAXvest LLC, and Grady D. Kittrell, who are identified as Reporting Persons. DAXvest LLC is the managing member of Project Nickel LLC, and Grady D. Kittrell is the sole member and manager of DAXvest LLC, indicating a close relationship and control structure among these entities.

Stakeholder Impact

• Shareholders: Significant dilution is likely due to the conversion of preferred stock and the acquisition of a majority stake by Project Nickel, potentially altering voting control and future share value.
• Creditors: The ongoing exchange of notes suggests the company may be managing its debt obligations through equity conversion, which could impact the recovery prospects for certain creditors if not managed effectively.
• Management/Board: The increased ownership by Project Nickel may lead to changes in board composition or strategic direction.

Next Steps

• The Reporting Persons will continue to evaluate their investment in MGT Capital Investments, Inc.
• The Reporting Persons may engage in future actions such as acquiring additional securities, disposing of holdings, or discussing strategy with management and the board.

Key Dates

Recommendation

The filing indicates a significant shift in beneficial ownership, with Project Nickel LLC now holding a majority stake. While this could signal a strategic change or potential turnaround, the history of debt exchanges and the substantial dilution from preferred stock conversions present considerable risks for existing common shareholders. A 'hold' recommendation is appropriate given the uncertainty and potential for both positive and negative outcomes, pending further clarity on the company's strategic direction under new majority control.

Keywords

MGT Capital Investments, Schedule 13D, Project Nickel LLC, DAXvest LLC, Grady D. Kittrell, Beneficial Ownership, Convertible Preferred Stock, Securities Purchase Agreement