Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

November 1, 2024

Date of Report (Date of earliest event reported)

MGT Capital Investments, Inc.

(Exact name of registrant as specified in its charter)

Delaware

001-32698

13-4148725

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(I.R.S. Employer

Identification No.)

2076 Foster Mill Drive
LaFayette, Georgia 30728

(Address of principal executive offices) (Zip code)

Registrant’s telephone number, including area code: (914) 630-7430

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act: None.

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01

Entry into a Material Definitive Agreement.

MGT Capital Investments, Inc. (the “Company”) and Project Nickel LLC (“Project Nickel”) have entered into three agreements: (i) a Convertible Note Exchange Agreement dated November 1, 2024 (the “Convertible Note Exchange Agreement”); (ii) a Warrant Exchange and Extinguishment Agreement dated November 1, 2024 (the “Warrant Exchange and Extinguishment Agreement”); and (iii) a Promissory Note Exchange Agreement dated November 1, 2024 (the “Promissory Note Exchange Agreement”) (such three agreements are collectively referred to herein as the “Transactions”).

Convertible Note Exchange Agreement and Issuance of New Secured Exchange Note

Pursuant to the Convertible Note Exchange Agreement, Project Nickel agreed to exchange the outstanding balance of an Original Issue Discount Secured Convertible Promissory Note dated December 19, 2023, issued in the principal amount of $1,578,840 with an interest rate of 6% per annum and a maturity date of December 31, 2024 (the “Original Secured Convertible Note”) (as reported in the Company’s Current Report on Form 8-K filed with the SEC on December 20, 2023), for (i) a new, nonconvertible Secured Exchange Note issued on November 1, 2024, in the principal amount of $1,620,240 with an interest rate of 8% per annum and a maturity date of December 31, 2025 (the “New Secured Exchange Note”) and (ii) 750,000,000 duly authorized, non-assessable unregistered shares of common stock of the Company. 5. In case of an event of default under the New Secured Exchange Note, interest shall accrue at the lesser of (i) a rate of 12% per annum or (ii) the maximum amount permitted by law, and once the event of default is cured, the interest rate shall revert to 8% per annum. Furthermore, under the terms of the New Secured Exchange Note, an event of default may result, at the holder’s election, in the accelerated maturity of the note, in which case 110% of the principal of and accrued and unpaid interest on the note will automatically become due and payable.

Warrant Exchange and Extinguishment Agreement and Issuance of Common Stock and Series D Preferred Stock

The Company previously issued to Project Nickel (i) a common stock purchase warrant dated September 12, 2022 (the “2022 Warrant”) and (ii) in connection with certain convertible note conversions, an aggregate of 334,800,000 common stock purchase warrants pursuant to the 2022 Warrant (the “Conversion Warrants”). In addition, Project Nickel was the holder of warrants to purchase shares of common stock of the Company dated March 5, 2021 and July 21, 2021, which Project Nickel acquired from John Fife or entities affiliated with and controlled by John Fife (the “Fife Warrants” and together with the 2022 Warrants and the Conversion Warrants, collectively, the “Warrants”). Pursuant to the terms and conditions of the Warrant Exchange and Extinguishment Agreement, Project Nickel agreed to cancel and extinguish all of the Warrants outstanding and, in exchange, the Company agreed to issue to Project Nickel 600,000,000 shares of common stock of the Company and 650,000 shares of the Company’s Series D Preferred Stock. Each share of the Company’s Series D Preferred Stock is convertible at any time into 1,000 shares of common stock of the Company.

Promissory Note Exchange Agreement and Issuance of New Promissory Note

The Company previously issued to Project Nickel on November 20, 2023, March 6, 2024 and April 30, 2024 certain promissory notes with principal amounts of $25,000, $125,000, and $50,000, respectively, and such notes, including the default principal amount and interest thereon, had an aggregate outstanding balance of $241,590 (the “Existing Promissory Notes”). Pursuant to the Promissory Note Exchange Agreement, Project Nickel agreed to consolidate and exchange the Existing Promissory Notes for a new single, consolidated Promissory Note dated November 1, 2024, in the principal amount of $241,590 (the “New Promissory Note”). The New Promissory Note bears interest at a rate of 8% per annum, payable on a monthly basis, and matures on December 31, 2025. In case of an event of default under the New Promissory Note, interest shall accrue at the lesser of (i) a rate of 12% per annum or (ii) the maximum amount permitted by law, and once the event of default is cured, the interest rate shall revert to 8% per annum. Furthermore, under the terms of the New Promissory Note, an event of default may result, at the holder’s election, in the accelerated maturity of the New Promissory Note, in which case 110% of the principal of and accrued and unpaid interest on the note will automatically become due and payable.

The foregoing descriptions of the Convertible Note Exchange Agreement, the Warrant Exchange and Extinguishment Agreement, the Promissory Note Exchange Agreement, the Original Secured Convertible Note, the New Secured Exchange Note, the Warrants, the New Promissory Note and other related documents are not complete and are qualified in their entirety by reference to the full text of the respective documents. Copies of the Convertible Note Exchange Agreement, the New Secured Exchange Note, the Warrant Exchange and Extinguishment Agreement, the Promissory Note Exchange Agreement, and the New Promissory Note are filed herewith as Exhibits 10.1, 4.1, 10.2, 10.3, 4.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.

Item 1.02

Termination of a Material Definitive Agreement.

The information set forth in Item 1.01 above is incorporated by reference into this Item 1.02.

Item 2.03

Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth in Item 1.01 above is incorporated by reference into this Item 2.03.

Item 3.02

Unregistered Sales of Equity Securities.

The information set forth in Item 1.01 above is incorporated by reference into this Item 3.02. On November 1, 2024, the Company issued to Project Nickel, an accredited investor, in private transactions not involving a public offering: the New Secured Exchange Note and 750,000,000 shares of common stock of the Company pursuant to the Convertible Note Exchange Agreement, 600,000,000 shares of common stock of the Company and 650,000 shares of Series D Preferred Stock pursuant to the Warrant Exchange and Extinguishment Agreement, and the New Promissory Note pursuant to the Promissory Note Exchange Agreement. The foregoing issuances were exempt from registration in reliance upon Section 3(a)(9) of the Securities Act of 1933 as involving an exchange by the Company exclusively with its existing security holder.

Following the issuances of common stock of the Company described in this Item 3.02, the Company has 2,490,670,903 shares of common stock outstanding.

Item 3.03

Material Modification to Rights of Security Holders.

Upon issuance of the Series D Preferred Stock (as defined in Item 5.03 below), the ability of the Company to declare or pay dividends on, or purchase, redeem or otherwise acquire, shares of its common stock may be subject to certain restrictions in the event that the Company fails to pay dividends on its Series D Preferred Stock. These restrictions are set forth in the Certificate of Designations establishing the terms of the Series D Preferred Stock, a copy of which is listed as Exhibit 3.1 to this Report on Form 8-K and is incorporated herein by reference.

Furthermore, under the terms of each of the New Secured Exchange Note and the New Promissory Note, the Company may not pay cash dividends or distributions on any equity securities of the Company without the prior written consent of the holder(s) of at least 50% of the principal amount then outstanding on such respective notes.

Item 5.01

Changes in Control of Registrant.

The information set forth in Items 1.01 and 3.02 of this Current Report on Form 8-K is incorporated by reference into this Item 5.03.

On November 1, 2024, following consummation of the Convertible Note Exchange Agreement and the Warrant Exchange and Extinguishment Agreement, Project Nickel acquired and became the beneficial owner of 2,000,000,000 shares of the Company’s common stock or common stock equivalents, including (i) 1,350,000,000 shares of common stock of the Company held directly by Project Nickel, and (ii) 650,000,000 shares of common stock of the Company issuable upon conversion of 650,000 shares of Series D Preferred Stock held directly by Project Nickel. that are exercisable within 60 days of the date of this filing. As a result of the Transactions, a change in control occurred and Project Nickel may be deemed to be the beneficial owner of 63.7% of the Company’s outstanding common stock on a fully diluted basis. Previously, Streeterville Capital LLC controlled by John M. Fife was the only shareholder of the Company holding 5% or more of the common stock of the Company. Project Nickel used its working capital to acquire the original notes and warrants that ultimately resulted in the Transactions.

Additionally, Mr. Grady Kittrell is the sole member and manager of DaxVest LLC, the managing member of Project Nickel, and as such both Mr. Kittrell and DaxVest may be deemed beneficial owners for purposes of Sections 13(d) and 16 (a) of the Exchange Act, of any securities of the Company held by Project Nickel. DaxVest LLC and Mr. Kittrell each disclaim beneficial ownership of such Common Stock, except to the extent of its or his pecuniary interest therein.

Item 5.03

Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On October 31, 2024, in connection with the Company’s issuance of 650,000 shares of Series D Preferred Stock to Project Nickel pursuant to the Warrant Exchange and Extinguishment Agreement, the board of directors of the Company (the “Board”) approved the authorization, issuance and designation (the “Designation”) of 1,000,000 shares of the Company’s preferred stock as “Series D Convertible Preferred Stock,” par value $0.001 per share (the “Series D Preferred Stock”), having the voting powers, designations, preferences, limitations, restrictions and relative rights set forth in the certificate of designation attached hereto as Exhibit 3.1 (the “Certificate of Designation”).

The material features of the Series D Preferred Stock are as follows:

	1.	Holders of Series D Preferred Stock are not entitled to vote, except as otherwise expressly provided by law;
	2.	With respect to any dividends or other distributions, the Series D Preferred Stock ranks in parity to the Common Stock, on an as-converted basis;
	3.	With respect to any assets of the Company upon a liquidation, dissolution or winding up of the Company, the Series D Preferred Stock ranks in parity to the Common Stock, on an as-converted basis;
	4.	Shares of Series D Preferred Stock are not redeemable;
	5.	Shares of Series D Preferred Stock are convertible or exchangeable by holder into shares of Common Stock, at any time such Coand 16mmon Shares are authorized but unissued, on a one-for-one thousand (1-for-1000) basis; and
	6.	Shares of Series D Preferred Stock are transferrable or assignable without the prior written consent of the Company.

The Certificate of Designation was filed with the Secretary of State of the State of Delaware on October 31, 2024.

Promptly following the filing of the Certificate of Designation, the Company will issue 650,000 shares of Series D Preferred Stock to Project Nickel as partial consideration for Project Nickel agreeing to enter into the Warrant Exchange and Extinguishment Agreement.

The above description of the terms of the Certificate of Designation is a summary and does not purport to be complete and is qualified in its entirety by reference to the copy of the Certificate of Designation attached hereto as Exhibit 3.1 and incorporated herein by reference.

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits

Exhibit Number		Description

3.1		Certificate of Designation of Series D Preferred Stock dated October 31, 2024
4.1		Secured Exchange Note dated November 1, 2024
4.2		Promissory Note dated November 1, 2024
10.1		Convertible Note Exchange Agreement, dated November 1, 2024
10.2		Warrant Exchange and Extinguishment Agreement, dated November 1, 2024
10.3		Promissory Note Exchange Agreement, dated November 1, 2024
104		Cover Page Interactive Data File (formatted as Inline XBRL)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: November 1, 2024	MGT CAPITAL INVESTMENTS, INC.

	By:	/s/ Paul R. Taylor
		Paul R. Taylor
		Interim Principal Executive Officer and Interim Principal Financial Officer

Exhibit 3.1

Exhibit 4.1

EXHIBIT A

Form of Note

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY MAY BE CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON ANY CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

$1,620,240 Principal

November 1, 2024

SECURED EXCHANGE NOTE

THIS SECURED EXCHANGE NOTE is duly authorized and validly issued by MGT Capital Investments, Inc., a Delaware corporation (the “Company”) (the “Note”).

FOR VALUE RECEIVED, the Company promises to pay to Project Nickel LLC or its permitted assigns(the “Holder”), the principal sum of $1,620,240 on December 31, 2025 (the “Maturity Date”) or such earlier date as this Note is required or permitted to be repaid as provided hereunder, and to pay interest to the Holder on the aggregate then outstanding principal amount of this Note in accordance with the provisions hereof. This Note is subject to the following additional provisions:

Section 1. Definitions. For the purposes hereof, (a) capitalized terms not otherwise defined herein shall have the meanings set forth in the Exchange Agreement and (b) the following words and phrases shall have the following meanings:

“Bankruptcy Event” means any of the following events: (a) the Company or any Subsidiary thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Company or any Subsidiary thereof, (b) there is commenced against the Company or any Subsidiary thereof any such case or proceeding that is not dismissed within 30 days after commencement, (c) the Company or any Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered, (d) the Company or any Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial part of its property that is not discharged or stayed within 30 calendar days after such appointment, (e) the Company or any Subsidiary thereof makes a general assignment for the benefit of creditors, (f) the Company or any Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts or (g) the Company or any Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.

“Change of Control Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess of 50% of the voting securities of the Company (other than by means of conversion, exercise or exchange of this Note or the Warrants issued together with this Note), (b) the Company merges into or consolidates with any other Person, or any Person merges into or consolidates with the Company and, after giving effect to such transaction, the shareholders of the Company immediately prior to such transaction own less than 50% of the aggregate voting power of the Company or the successor entity of such transaction, (c) the Company sells or transfers all or substantially all of its assets to another Person, (d) a replacement at one time or within a three year period of more than one-half of the members of the Board of Directors which is not approved by a majority of those individuals who are members of the Board of Directors on the Original Issue Date (or by those individuals who are serving as members of the Board of Directors on any date whose nomination to the Board of Directors was approved by a majority of the members of the Board of Directors who are members on the date hereof), or (e) the execution by the Company of an agreement to which the Company is a party or by which it is bound, providing for any of the events set forth in clauses (a) through (d) above.

“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

“Default Interest Rate” shall have the meaning set forth in Section 2(a).

“DWAC” means the Deposit or Withdrawal at Custodian system at The Depository Trust Company.

“Event of Default” shall have the meaning set forth in Section 5(a).

“Exchange Act” means the Securities Exchange Act of 1934, and the rules and regulations promulgated thereunder.

“Exempt Issuance” shall have the meaning set forth in the Exchange Agreement.

“Indebtedness” shall have the meaning set forth in the Exchange Agreement.

“Liens” shall have the meaning set forth in the Exchange Agreement.

“Mandatory Default Amount” means the sum of 110% of the aggregate of (i) the outstanding principal amount of this Note and the accrued and unpaid interest thereon, including default interest, and (b) all other amounts, costs, expenses and liquidated damages due in respect of this Note.

“Note Register” shall have the meaning set forth in Section 3(c).

“Original Issue Date” means the date of the first issuance of this Note, regardless of any transfers of this Note and regardless of the number of instruments which may be issued to evidence this Note.

“Permitted Indebtedness” means (a) the indebtedness evidenced by this Note and the other Secured Promissory Note issued on the date hereof, (b) capital lease obligations and purchase money indebtedness incurred in connection with the acquisition of machinery and equipment, and (c) Indebtedness incurred after the date hereof provided that the net amount of the Indebtedness incurred is used to immediately pay amounts due under the Notes.

“Permitted Lien” means the individual and collective reference to the following: (a) Liens for taxes, assessments and other governmental charges or levies not yet due or Liens for taxes, assessments and other governmental charges or levies being contested in good faith and by appropriate proceedings for which adequate reserves (in the good faith judgment of the management of the Company) have been established in accordance with GAAP, (b) Liens imposed by law which were incurred in the ordinary course of the Company’s business, such as carriers’, warehousemen’s and mechanics’ Liens, statutory landlords’ Liens, and other similar Liens arising in the ordinary course of the Company’s business, and which (x) do not individually or in the aggregate materially detract from the value of such property or assets or materially impair the use thereof in the operation of the business of the Company and its consolidated Subsidiaries or (y) are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing for the foreseeable future the forfeiture or sale of the property or asset subject to such Lien, and (c) Liens incurred in connection with Permitted Indebtedness under clauses (a) through (c) thereunder.

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

“Exchange Agreement” means the Securities Exchange Agreement, dated as of August 24, 2022, by and among the Company and the original Holders, as amended, modified or supplemented from time to time in accordance with its terms.

“SEC” means the Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, and the rules and regulations promulgated thereunder.

“Successor Entity” shall have the meaning set forth in Section 5(e).

“Trading Day” means a day on which the principal Trading Market is open for trading.

“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, the NYSE American, or any market, including the Pink Sheets, of the OTC Markets, Inc. (or any successors to any of the foregoing).

Section 2. Interest. Interest shall accrue to the Holder on the outstanding principal amount of this Note at the rate of 8% per annum, calculated on the basis of a 360-day year commencing on the Original Issue Date until payment in full of the outstanding principal, together with all accrued and unpaid interest, liquidated damages and other amounts which may become due hereunder, has been made. Interest shall be paid on a monthly basis, the first payment on October 31, 2024. During the existence of an Event of Default, interest shall accrue at the lesser of (i) the rate of 12% per annum, or (ii) the maximum amount permitted by law (the lesser of clause (i) or (ii), the “Default Interest Rate”). Once an Event of Default is cured, the interest rate shall return to 8%.

Section 3. Registration of Transfers and Exchanges.

(a) Different Denominations. This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations, as requested by the Holder surrendering the same. No service charge or other fees will be payable for such registration of transfer or exchange.

(b) Investor Representations. This Note has been issued subject to certain investment representations of the original Holder set forth in the Exchange Agreement and may be transferred or exchanged only in compliance with the Exchange Agreement and applicable federal and state securities laws and regulations.

(c) Reliance on Note Register. Prior to due presentment for transfer to the Company of this Note, the Company and any agent of the Company may treat the Person in whose name this Note is duly registered on the Note Register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the Company nor any such agent shall be affected by notice to the contrary.

Section 4. Negative Covenants. As long as any portion of this Note remains outstanding, unless the holders of at least 50% in principal amount of the then outstanding Notes shall have otherwise given prior written consent, the Company shall not, and shall not permit any of the Subsidiaries to, directly or indirectly:

(a) other than Permitted Indebtedness, enter into, create, incur, assume, guarantee or suffer to exist any indebtedness for borrowed money of any kind, including, but not limited to, a guarantee, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom, unless the net proceeds of such Indebtedness are immediately used to pay amounts due hereunder;

(b) other than Permitted Liens, enter into, create, incur, assume or suffer to exist any Liens of any kind, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom;

(c) amend its charter documents, including, without limitation, its articles of incorporation and bylaws, in any manner that materially and adversely affects any rights of the Holder. Increases in authorized shares and stock splits shall not be deemed to materially and adversely affects any rights of the Holder;

(d) purchase or otherwise acquire more than a de minimis number of shares of its Common Stock or Common Stock Equivalents;

(e) repay, or offer to repay, any Indebtedness other than the Note as provided in Section 2(b) or Permitted Indebtedness, as such terms Indebtedness and Permitted Indebtedness are in effect as of the Original Issue Date, provided that such payments other than on the Notes shall not be permitted if, at such time, or after giving effect to such payment, any Event of Default exists or occurs or the Company is not be able to satisfy obligations owing to the Noteholders;

(f) pay cash dividends or distributions on any equity securities of the Company;

(g) enter into any transaction with any Affiliate of the Company which would be required to be disclosed in any public filing with the SEC assuming that the Company is subject to the Securities Act or the Exchange Act, unless such transaction is made on an arm’s-length basis;

(h) issue any equity securities of the Company other than pursuant to or as permitted by the provisions of the Exchange Agreement, this Note or an Exempt Issuance; or

(i) enter into any agreement with respect to any of the foregoing.

Section 5. Events of Default.

(a) “Event of Default” means, wherever used herein, any of the following events (whatever the reason for such event and whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body):

(i) any default in the payment of (A) principal and interest payment under this Note or any other Indebtedness, or (B) late fees, liquidated damages and other amounts owing to the Holder of this Note, as and when the same shall become due and payable (whether on the Maturity Date, or by acceleration or otherwise), which default, solely in the case of a default under clause (B) above, is not cured within five (5) Trading Days;

(ii) the Company shall fail to observe or perform any other covenant or agreement contained in this Note or any Transaction Document which failure is not cured, if possible to cure, within the earlier to occur of ten (10) Trading Days after notice of such failure is sent by the Holder or by any other Holder to the Company and (B) the Company has become aware of such failure;

(iii) any representation or warranty made in this Note, any other Transaction Document, any written statement pursuant hereto or thereto or any other report, financial statement or certificate made or delivered to the Holder or any other Holder shall be untrue or incorrect in any material respect as of the date when made or deemed made, which failure is not cured, if possible to cure, within the earlier to occur of ten (10) Trading Days after (A) notice of such failure is sent by the Holder or (B) by any other Holder to the Company;

(iv) the Company or any Subsidiary shall be subject to a Bankruptcy Event;

(v) the Company or any Subsidiary shall: (A) apply for or consent to the appointment of a receiver, trustee, custodian or liquidator of it or any of its properties; (B) admit in writing its inability to pay its debts as they mature; (C) make a general assignment for the benefit of creditors; (D) be adjudicated as bankrupt or insolvent or be the subject of an order for relief under Title 11 of the United States Code or any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law or statute of any other jurisdiction or foreign country; or (E) file a voluntary petition in bankruptcy, or a petition or an answer seeking reorganization or an arrangement with creditors or to take advantage or any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law or statute, or an answer admitting the material allegations of a petition filed against it in any proceeding under any such law, or (F) take or permit to be taken any action in furtherance of or for the purpose of effecting any of the foregoing including a composition with creditors or similar action;

(vi) if any order, judgment or decree shall be entered, without the application, approval or consent of the Company or any Subsidiary, by any court of competent jurisdiction, approving a petition seeking liquidation or reorganization of the Company or any Subsidiary, or appointing a receiver, trustee, custodian or liquidator of the Company or any Subsidiary, or of all or any substantial part of its assets, and such order, judgment or decree shall continue unstayed and in effect for any period of 10 days;

(vii) the SEC suspends the Common Stock from trading;

(viii) the Company’s Common Stock is not listed or quoted for trading on a Trading Market which failure is not cured, if possible to cure, within the earlier to occur of ten (10)Trading Days after notice of such failure is sent by the Holder or by any other Holder to the Company;

(ix) the transfer of shares of Common Stock through the Depository Trust Company System is no longer available or is subject to a “chill” by the Depository Trust Company or any successor;

(x) after December 31, 2024, the Company fails to comply in any material respect with the reporting requirements of the Exchange Act (including but not limited to becoming delinquent in the filing of any report required to be filed under the Exchange Act including any extension permitted by Rule 12b-25 under the Exchange Act) or ceases to be subject to the reporting requirements of the Exchange Act. For avoidance of doubt, a failure to file an Exchange Act report within such time shall be deemed to be a failure to comply in a material respect.

(b) Remedies Upon Event of Default. If any Event of Default occurs, the outstanding principal amount of this Note, plus liquidated damages and other amounts owing in respect thereof through the date of acceleration, shall become, at the Holder’s election, immediately due and payable in cash at the Mandatory Default Amount. Upon the payment in full of the Mandatory Default Amount, the Holder shall promptly surrender this Note to or as directed by the Company. In connection with such acceleration described herein, the Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a holder of the Note until such time, if any, as the Holder receives full payment pursuant to this Section 5(b). No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.

(c) Interest Rate Upon Event of Default. Commencing on the occurrence of any Event of Default and until such Event of Default is cured, this Note shall accrue interest at an interest rate equal to the Default Interest Rate.

(d) Intentionally Omitted.

(e) Notice of an Event of Default. Upon learning of an Event of Default with respect to this Note, the Company shall within two Trading Days deliver written notice thereof via facsimile or electronic mail and overnight courier (with next day delivery specified) to the Holder.

Section 6. Security Interest. This Note also creates a first lien on and grants a security interest in all of the Company’s (including its subsidiaries) Accounts, Goods, Inventory, Equipment, Investment Property, General Intangibles, Instruments, Documents, and all other assets and personal property of the Company, wherever located, together with all the proceeds now or hereafter arising in connection therewith (the “Collateral”). This Note shall also constitute a security agreement under the New York Uniform Commercial Code or other law applicable to the creation of liens on personal property. Capitalized terms used in this Section 8 shall have the meanings that are given to them under the New York Uniform Commercial Code. The Company acknowledges and agrees that the Holder shall have the right to file a UCC-1 financing statement and any renewals and continuations thereof or other documents as the Holder may reasonably require with respect to this security interest. If a default occurs under this Note, the Holder shall have all rights and remedies of a secured party under the New York Uniform Commercial Code. The Company shall take all such action in order to cause the Holder to have a first lien and priority security interest in accordance with this Section 8 while this Note is outstanding.

Section 7. Miscellaneous.

(a) Notices. All notices, offers, acceptance and any other acts under this Agreement (except payment) shall be in writing, and shall be sufficiently given if delivered to the addressees in person, email, followed by FedEx or similar receipted next day delivery, as follows:

	If to the Company:	MGT Capital Investments, Inc.
		2076 Foster Mill Drive
		LaFayette, GA 30728
		Attention Paul Taylor, CEO
		Email: ptaylor@mgtci.com

If to the Purchaser:

To the address listed on the Signature Page to the Exchange Agreement.

or to such other address as any of them, by notice to the other may designate from time to time. Time shall be counted to, or from, as the case may be, the date of delivery.

(b) Absolute Obligation. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest and late fees, as applicable, on this Note at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation of the Company.

(c) Lost or Mutilated Note. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of this Note, and of the ownership hereof, reasonably satisfactory to the Company.

(d) Exclusive Jurisdiction; Governing Law; Prevailing Party Attorneys’ Fees. All questions concerning the construction, validity, enforcement and interpretation of this Note and venue shall be governed by and construed and enforced in accordance with the Exchange Agreement. If any party shall commence an Action or Proceeding to enforce or otherwise relating to this Note, then, in addition to the other obligations of the Company elsewhere in this Note, the prevailing party in such action or proceeding shall be reimbursed by the non-prevailing party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Action or Proceeding.

(e) Waiver. Any waiver by the Company or the Holder of a breach of any provision of this Note shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of the Company or the Holder to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Note on any other occasion. Any waiver by the Company or the Holder must be in writing.

(f) Severability. If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of or interest on this Note as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Note, and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Holder, but will suffer and permit the execution of every such as though no such law has been enacted.

(g) Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note and any of the other Transaction Documents at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Note. The Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach would be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to an injunction restraining any such breach or any such threatened breach, without the necessity of showing economic loss and without any bond or other security being required. The Company shall provide all information and documentation to the Holder that is requested by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions of this Note.

(h) Next Trading Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Trading Day, such payment shall be made on the next succeeding Trading Day.

(i) Headings. The headings contained herein are for convenience only, do not constitute a part of this Note and shall not be deemed to limit or affect any of the provisions hereof.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed by a duly authorized officer as of the date first above indicated.

	MGT Capital Investments, Inc.

	By:	/s/ Paul Taylor
	Name:	Paul Taylor
	Title:	Chief Executive Officer

[Signature Page to Secured Exchange Note November 1, 2024]

Exhibit 4.2

EXHIBIT A

Form of Note

$241,590 Principal

November 1, 2024

PROMISSORY NOTE

THIS PROMISSORY NOTE is duly authorized and validly issued by MGT Capital Investments, Inc., a Delaware corporation (the “Company”) (the “Note”).

FOR VALUE RECEIVED, the Company promises to pay to Project Nickel LLC or its permitted assigns (the “Holder”), the principal sum of $241,590 on December 31, 2025 (the “Maturity Date”) or such earlier date as this Note is required or permitted to be repaid as provided hereunder, and to pay interest to the Holder on the aggregate then outstanding principal amount of this Note in accordance with the provisions hereof. This Note is subject to the following additional provisions: