MGT Capital Investments is an investment company with two direct subsidiaries that focus solely on the dynamic and consolidating HCIT sector. The first subsidiary Medicsight plc is a leading developer of computer-aided detection and computer assisted reader software solutions that are tested using one of the world's largest databases of verified CT scan data. Medicsight's CAD and CAR products help clinicians identify measure and analyze suspicious pathology such as colorectal polyps and lung lesions. MGT Capital Investments has invested in and controls a second subsidiary Medicexchange plc which operates Medicexchange.com an online multi-vendor sales channel for diagnostic treatment and surgery planning solutions for cardiac thoracic breast imaging orthopedic and gastro intestinal imaging. Medicexchange.com provides these solutions in a low-cost on-demand and downloadable format enhancing access to information and products for medical imaging professionals. MGT Capital Investments Inc has a market cap of $12.4 million; its shares were traded at around $0.38 with and P/S ratio of 35.
Highlight of Business Operations:· Net loss increased 305% to $15,330 and resulted in a loss per share of $0.47 compared to a net loss of $3,779 and net loss per share of $0.10 in 2008. The large increase was due to the impairment of goodwill relating to Medicsight.
Operating costs, excluding the goodwill impairment, have reduced by $1,954 due to a general focus on reducing costs and significantly because of a fall in the value of sterling from $1.99:£1 to $1.42:£1. On a like for like exchange rate, operating costs for the three months ended March 31, 2008 would have been approximately $4,548.
Our balance sheet remains strong with cash, cash equivalents and marketable securities of $33,726 compared to $40,178 in December, 2008. The movement is mainly attributable to cash used in operating activities ($5,173), cash used in investing activities ($14) and the effects of exchange rates ($501).
We have generated revenues of $74 and gross margin of $72 for the three months ended March 31, 2009, compared to $52 and $40 for the three months ended March 31, 2008. Medicsight increased revenues in the period and Medicexchanges fell slightly.
Interest and other income included an expense of $695 in the three months ended March 31, 2009 compared to income of $508 in the same period in the prior year. The expense related to a $739 impairment of Hipcricket and a $25 impairment of other marketable securities. This expense was included in net loss as we considered the loss to be other than temporary. In the same period in the prior year gains made on these marketable securities were included in other comprehensive income. Also included in interest and other income was interest income of $69 compared to $508 in the three months ended March 31, 2008. The fall was due to lower the lower level of cash held and lower interest rates.
In the three months ended March 31, 2009 Hipcricket was impaired by $739 and other marketable securities by $25. This impairment loss was recognised in net loss. In the same period in the prior year, $131 of gains on these securities were recognised in other comprehensive income.
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