Item 8.01. Other Events.
On
May 4, 2020, MGT Capital Investments, Inc. (the “Company”) issued a press release in connection with the settlement
of the Derivative Actions (as defined below) and the Federal Court Derivative Actions (as defined below). A copy of the press
release is attached hereto as Exhibit 99.1
On
April 23, 2020, the Company entered into a stipulation of settlement (the “Stipulation”) in connection with a derivative
action filed by shareholder Bob Thomas in New York state court against certain current and former directors, officers and shareholders
of the Company, and naming the Company as a nominal defendant, and a derivative action filed by shareholder Atul Ojha in New York
state court against certain current and former officers and directors of the Company, and naming the Company as a nominal defendant
(the “Derivative Actions”). The consideration for the settlement of the Derivative Actions is as follows: (i) adoption
by the Company of certain corporate governance reforms, the terms of which are fully set forth in Exhibits A and B to the Stipulation;
(ii) Robert B. Ladd, H. Robert Holmes, Michael Onghai, and Nolan Bushnell shall collectively pay or cause to be paid $75,000 to
the Company; and (iii) Barry C. Honig, John Stetson, Michael Brauser, John O’Rourke III, and Mark Groussman shall collectively
pay or cause to be paid $150,000 to the Company. Further, the Company shall, subject to court approval, pay a fee and expense
award to plaintiffs’ counsel in the Derivative Actions of $150,000 and service awards to each of the two plaintiffs in the
Derivative Actions of $1,500 each, to be paid from the fee and expense award. A copy of the Stipulation is attached hereto as
Exhibit 99.2. A copy of the notice of the proposed settlement of the Derivative Actions for current stockholders of the Company
is attached hereto as Exhibit 99.3.
In
addition to the stipulation of settlement of the Derivative Actions, the Company has agreed to cooperate to prepare and execute
a separate stipulation of settlement (the “Federal Stipulation”) in connection with a shareholder derivative action
filed by shareholder Tyler Tomczak against certain directors and officers of the Company, and naming the Company as a nominal
defendant, in the United States District Court for the Southern District of New York, and a shareholder derivative action filed
by shareholder Arthur Aviles against certain directors and officers of the Company, and naming the Company as a nominal defendant,
in the United States District Court for the District of Delaware (the “Federal Court Derivative Actions”). The consideration
for the settlement of the Federal Court Derivative Actions is as follows: (i) the Company shall adopt the revised Director &
Officer Questionnaire set out as Exhibit A to the Federal Stipulation; and (ii) defendants Robert B. Ladd, H. Robert Holmes, and
Michael Onghai shall collectively pay or cause to be paid $65,000 to the Company. Further the Company shall, subject to court
approval, pay a fee and expense award to counsel for the plaintiffs in the Federal Court Derivative Actions of $30,000 and incentive
awards of $400 to each of the two plaintiffs in the Federal Court Derivative Actions. A copy of Exhibit A to the Federal Stipulation
is attached hereto as Exhibit 99.4.
The
foregoing descriptions of the Stipulation and Federal Stipulation do not purport to be complete and are qualified in their entirety
by reference to the Stipulation and Federal Stipulation.
The
information contained in this Item 8.01 of this Current Report on Form 8-K shall not be deemed “filed” for purposes
of Section 18 of the Exchange Act, or incorporated by reference in any filing under the Securities Act of 1933, as amended or
the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. The furnishing of the information
in this Current Report on Form 8-K is not intended to, and does not, constitute a representation that such furnishing is required
by Regulation FD or that the information contained in this Item 8.01 of this Current Report on Form 8-K constitutes material investor
information that is not otherwise publicly available.
This
Item 8.01 of this Current Report on Form 8-K and exhibits may contain types of statements, which are “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act of 1995, and which involve risks, uncertainties and reflect
the Registrant’s judgment as of the date of this Current Report on Form 8-K. Forward-looking statements may relate to, among
other things, operating results and are indicated by words or phrases such as “expects,” “should,” “will,”
and similar words or phrases. These statements are subject to inherent uncertainties and risks that could cause actual results
to differ materially from those anticipated at the date of this Current Report on Form 8-K. The Company disclaims any obligation
to, and will not, update any forward-looking statements to reflect events or circumstances after the date hereof. Investors are
cautioned not to rely unduly on forward-looking statements when evaluating the information presented within.
