SCHEDULE: Project Nickel Boosts MGT Capital Stake to 66.9%

Project Nickel LLC, along with DAXvest LLC and Grady D. Kittrell, has increased its beneficial ownership in MGT Capital Investments, Inc. to 66.9% through a series of debt-to-equity conversions and exchanges.

Summary

• Project Nickel LLC, DAXvest LLC, and Grady D. Kittrell (collectively, the "Reporting Persons") now beneficially own 66.9% of MGT Capital Investments, Inc.'s Common Stock.
• This beneficial ownership totals 3,720,440,000 shares for Grady D. Kittrell and 3,720,240,000 shares for Project Nickel and DAXvest.
• The ownership includes 2,500,000,000 shares held directly by Project Nickel, 200,000 shares held directly by Mr. Kittrell, and 1,220,240,000 shares issuable upon conversion of a Secured Convertible Promissory Note dated September 22, 2025, at a price of $0.001 per share.
• The total outstanding Common Stock used for calculation is 5,560,910,903 shares as of September 23, 2025, which includes 4,340,670,903 shares outstanding and 1,220,240,000 shares issuable from Project Nickel's convertible securities.
• The Reporting Persons acquired these securities for investment purposes and intend to evaluate their investment on an ongoing basis, potentially acquiring or disposing of shares, or engaging with management and other stakeholders.

Sentiment

Score: 3

Explanation: The sentiment is negative due to the significant dilution for existing shareholders, the very low conversion price of $0.001 per share for the convertible note, and the repeated restructuring of debt, which collectively suggest underlying financial weakness for the Issuer. While the investor's commitment is evident, the terms are highly favorable to the investor and unfavorable to minority shareholders.

Positives

• Project Nickel and its affiliates have demonstrated a significant, long-term commitment to MGT Capital Investments, Inc. by converting substantial debt into equity and extending the maturity of a key note to December 31, 2027.
• The conversion of debt instruments into common stock reduces the Issuer's immediate debt obligations and strengthens its equity base, potentially improving its balance sheet structure.

Negatives

• The series of debt-to-equity conversions and exchanges has resulted in significant dilution for existing shareholders, with Project Nickel and its affiliates now beneficially owning 66.9% of the company.
• The conversion price of $0.001 per share for the 2025 Note indicates a very low valuation for the common stock at the time of conversion.
• MGT Capital Investments, Inc. has repeatedly restructured and extended the maturity dates of its promissory notes, suggesting ongoing financial challenges or a reliance on Project Nickel for financial flexibility.

Risks

• Significant dilution for existing minority shareholders due to the large number of shares issued and convertible to Project Nickel and its affiliates.
• Concentration of control, with Project Nickel and its affiliates holding a 66.9% beneficial ownership, potentially limiting the influence of other shareholders.
• Ongoing financial instability for the Issuer, as evidenced by the repeated need for debt restructuring and extensions.
• The Reporting Persons may, in the future, acquire additional securities, dispose of holdings, or engage in discussions that could impact the company's strategic direction or share price.

Future Outlook

The Reporting Persons intend to evaluate their investment in MGT Capital Investments, Inc. on an ongoing basis. Depending on various factors, including the Issuer's financial condition, strategic direction, market conditions, and the price of Common Stock, they may acquire additional securities, dispose of some or all of their holdings, or engage in discussions with management, the board, other shareholders, or third parties.

Industry Context

NA

Corporate Governance

Related Party Transactions

• Transactions between MGT Capital Investments, Inc. and Project Nickel LLC, where DAXvest LLC serves as the sole managing member of Project Nickel, and Grady D. Kittrell is the sole member and manager of DAXvest.
• Beneficiaries of Project Nickel LLC, who receive pecuniary benefit from the shares, include DAXvest LLC (50% membership interest), Pantera LLC (19.7% membership interest), and The Nutrition Zone LLC (13.2% membership interest), each holding more than five percent of the membership interests in Project Nickel LLC.

Stakeholder Impact

• Existing public shareholders face significant dilution due to the issuance of a large number of common shares and convertible securities to Project Nickel and its affiliates.
• The concentration of 66.9% beneficial ownership by the Reporting Persons grants them substantial control over the Issuer, potentially impacting corporate decisions and strategic direction.

Next Steps

• Reporting Persons will continue to evaluate their investment in the Issuer on an ongoing basis.
• Potential future actions by Reporting Persons include acquiring additional securities, disposing of holdings, or engaging in discussions with management, the board, other shareholders, or third parties.

Key Dates

Recommendation

The repeated debt restructuring and conversion of debt into equity at a very low price ($0.001 per share) indicate significant financial distress for MGT Capital Investments, Inc. The resulting 66.9% beneficial ownership by Project Nickel and its affiliates leads to substantial dilution for existing minority shareholders and concentrates control, which may not align with the interests of other investors. This scenario suggests a high-risk investment with potentially limited upside for non-controlling shareholders, making a 'sell' recommendation appropriate for risk-averse investors or those seeking better opportunities.

Keywords

MGT Capital Investments, Project Nickel, DAXvest, Grady Kittrell, Schedule 13D, beneficial ownership, convertible note, debt-to-equity conversion, equity stake, dilution, corporate control, investment vehicle