This report contains forward-looking statements made in reliance upon the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. These statements may be identified by the use of words such as "anticipate," "estimates," "should," "expect," "guidance," "project," "intend," "plan," "believe" and other words and terms of similar meaning, in connection with any discussion of our financial statements, business, results of operations, liquidity and future operating or financial performance. Please also refer to our "Note Regarding Forward Looking Statements" at the front of this Form.

MGT is a technology holding company in the global Healthcare Information Technology market. We have two subsidiaries, Medicsight and Medicexchange:

Medicsight is a medical imaging software development company developing enterprise-wide Computer-Aided Detection (CAD) software which analyzes computer tomography (CT) scans for the early detection and measurement of colorectal polyps and lung lesions. Medicsight has focused on two of the leading causes of cancer-related death, colorectal cancer (also known as colon or bowel cancer) and lung cancer. There is increasing evidence in management's view that early detection of colon cancer or lung cancer leads to an improved life expectancy.

Medicexchange provides medical imaging professionals with a global web portal containing an online sales channel for diagnostic, treatment and surgery planning solutions. This combined with a variety of relevant news, jobs, clinical papers, training materials and content gives these professionals access to information and products that they otherwise would have difficulty accessing. Medical imaging vendors are provided with a global online channel through which they can access a large community of medical imaging professionals in order to market and sell their product solutions.

Medicsight

In February 2008, Medicsight signed a Preliminary Agreement with the System Integration (PACS) division of Toshiba Medical Systems ("Toshiba") for the resale of MedicRead Colon and ColonCAD throughout Japan. Toshiba is a leading global provider of diagnostic medical imaging systems and comprehensive medical solutions including CT. Under the Preliminary Agreement, Toshiba will

work with the Company to obtain Ministry of Health, Labor and Welfare (MHLW) regulatory approval in Japan and to jointly conduct market development initiatives.

In April 2008, Medicsight signed a Partnership Agreement with INFINITT Company Limited ("Infinitt"). Infinitt has agreed to integrate Medicsight ColonCAD into its solution for global distribution. As well as being South Korea's leading PACS supplier, Infinitt also has a growing presence in both the USA and Japan, with a global network of offices, partners and sales channel representatives in 20 countries.

In the six months ended June 30, 2008, Medicsight was granted regulatory approval for MedicRead Colon from the Chinese State Food and Drug Administration (SFDA) and the Brazilian National Health Surveillance Agency (ANVISA). In July the Company received Brazilian ANVISA regulatory approval for its ColonCAD product.

Medicsight has engaged a team of experts to prepare the Company's application to secure US Food and Drug Administration (FDA) clearance. The Company is confident that it will shortly be in a position to file a 510(k) submission for review by the FDA.

In May 2008, Medicsight signed an exclusive CAD Clinical Research Agreement with leading American CT Colonography (CTC) radiologists Dr Perry Pickhardt and Dr David Kim of the University of Wisconsin Medical School, USA. In 2004, Dr Pickhardt's Wisconsin group was the first to establish a third-party reimbursed CTC colorectal cancer screening programme. Since then they have both played an instrumental role in building the clinical evidence base that has proven the comparable effectiveness of CTC for the detection of colorectal neoplasia within an asymptomatic population in relation to optical colonoscopy. Their specialist advice and experience of CTC practice will enhance the clinical validation of Medicsight's ColonCAD products set in the context of the world's largest healthcare market.

The Medicsight product roadmap continues on track enabling 2008 launches of MedicRead Colon 3.0, MedicRead Lung 1.0 and MedicRead Liver 1.0 as well as an online CTC software solution based on MedicRead Colon. Medicsight is continuing to improve the performance of its ColonCAD product with a new version planned for 2009. In addition, the company has initiated the development of a CO2 insufflation device for CTC (MedicCO2lon) and is exploring new image processing and analysis tools for optical colonoscopy. These additions will bolster the existing CTC portfolio.

Revenues increased in the six months ended June 30, 2008 to $88 from $29 in the last quarter of Fiscal 2007 and $nil in the six months ended June 30, 2007.

Medicexchange

On April 3, 2008, through our subsidiary Medicexchange, we acquired Maydeal.com, a Chinese web business that offers an online portal for radiologists in China. The acquisition was accounted for under purchase accounting and, accordingly, the assets and liabilities acquired were recorded at their estimated fair values at the date of acquisition and the results of operations have been included in the consolidated statement of operations since the day of acquisition.

Revenues in the six months ended June 30, 2008 were $49, compared to $48 in the last quarter of Fiscal 2007 and $nil in the six months ended June 30, 2007.

MGT

In the first quarter of 2008, MGT's Board of Directors authorized the repurchase of up to 6,350,000 shares of its common stock. At June 30, 2008, the Company had repurchased 6,343,886 shares, and as of August 8, 2008, the Company had repurchased a further 5,905 shares. The Company has in total, therefore, repurchased 6,349,791 shares at an average price of $2.98 per share.

In March 2008, MGT purchased 700,000, ordinary shares and in April 2008, MGT purchased an additional 300,000 ordinary shares of its majority-owned subsidiary Medicsight at an average price of £0.63 ($1.26) per share. As of June 30, 2008, MGT holds 86,000,000 ordinary shares of Medicsight representing 55% of the issued share capital.

General

MGT was originally incorporated as a Utah corporation in 1977 and was re-incorporated in Delaware in 2000. At June 30, 2008 the Company's authorized share capital was 75,000,000 shares of common stock, par value of $0.001.

At June 30, 2008, 38,900,383 shares of common stock had been issued of which 32,556,497 are outstanding.

As of June 30, 2008, the Company and its subsidiaries had 104 employees, all of whom are full-time employees. Our employees are not part of a union. We believe that we have an excellent relationship with our employees.

Our principal executive office is located at Kensington Centre, 66 Hammersmith Road, London W14 8UD, United Kingdom, telephone 011-44-207-605-1151, facsimile 011-44-207-605-1171.

Our web address is www.mgtci.com. Information on our website is not deemed to be a part of this Quarterly Report.

Critical Accounting Policies and the Use of Estimates

We believe there have been no significant changes in our critical accounting policies during the six months ended June 30, 2008 as compared to our previous disclosures in Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2007.

The accompanying discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements and the related disclosures, which have been prepared in accordance with U.S. generally accepted accounting principles (GAAP). The preparation of these condensed consolidated financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts in our condensed consolidated financial statements and accompanying notes. These estimates form the basis for making judgments about the carrying values of assets and liabilities. We base our estimates and judgments on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ materially from these estimates.

We believe the following policies to be the most critical to an understanding of our financial condition and results of operations because they require us to make estimates, assumptions and judgments about matters that are inherently uncertain.

Revenue Recognition

We follow specific and detailed guidelines in determining the proper amount of revenue to be recorded; however, certain judgments affect the application of our revenue recognition policy. Revenue results are difficult to predict, and any delay in recognizing revenue could cause our operating results to vary significantly from period to period.

The significant judgments for revenue recognition typically involve determining the exact date when licenses are sold to end users and the date from which support and maintenance commences. In addition, our transactions often consist of multiple element arrangements, which must be analyzed to determine the fair value of each element, the amount of revenue to be recognized initially, and the period and conditions under which deferred revenue should be recognized. As a result, if facts and circumstances change that affect our current judgments, our revenue could be materially different in the future.

We recognize revenue in accordance with American Institute of Certified Public Accountants ("AICPA") Statement of Position ("SOP") 97-2, Software Revenue Recognition, as amended by SOP 98-4 and SOP 98-9, as well as Technical Practice Aids issued from time to time by the AICPA, and SEC Staff Accounting Bulletin No. 104. We recognize revenue when it is realized or realizable and earned. We consider revenue realized or realizable and earned when we have persuasive evidence of an arrangement, the product has been provided to the customer, the sales price is fixed or determinable, and collectability is probable.

Stock Based Compensation

We have granted employee stock options in MGT and both Medicsight and Medicexchange (our principal subsidiary companies). We use the Black-Scholes option pricing model to estimate the fair value of employee stock options. Calculating the fair value of these stock options requires considerable judgment, including estimating stock price volatility, the amount of options that are expected to be forfeited and the expected life of the options awards.

The value of a stock option is derived from its potential for appreciation. The more volatile the stock, the more valuable the option becomes due to the greater possibility of significant changes in stock price. The expected option term also has a significant effect on the value of the option. The longer the term, the more time the option holder has to allow the stock price to increase without a cash investment and thus, the more valuable the option. When establishing an estimate of the expected term, we consider the vesting period for the award and our estimate of employee's likely stock option exercises, the expected volatility, and a comparison to relevant peer group data.

At the time of the respective stock options being granted, the shares underlying the awarded stock options were not publicly traded shares in some instances. We review our valuation assumptions at each grant date and, as a result, we are likely to change our valuation assumptions used to value stock based awards granted in future periods. Actual results, and future changes in estimates, may differ substantially from our current estimates. As a result, if factors change and we use different assumptions, our stock-based compensation expense could be materially different in the future.

Results of Operations

Revenues

For the six months ended June 30, 2008 and June 30, 2007 our revenues from operations were $137 and $nil, resulting from the sale of Medicsight software licenses, Medicexchange advertising space and medical products in China.

Cost of sales

Cost of sales predominantly relates to the cost of medical products sold by our Medicexchange subsidiary. For the six months ended June 30, 2008 and June 30, 2007 our costs of sales were $30 and $nil.

Selling, General and Administrative Expenses



Our selling, general and administrative expenses from continuing operations
were:



                                    Three Months ended          Six Months ended
                                         June 30,                   June 30,
                                    2008          2007          2008         2007

Selling, general and
administrative expenses $ 7,965 $ 4,525 $ 13,470 $ 7,981

Our selling, general and administrative expenses have increased as we expand our international commercial operations. The significant elements being: (a) an increase in people related costs on the prior period as both Medicsight and Medicexchange have increase employees in both commercial and operations; (b) an increase in professional fees as a result of increased audit, investor relations and corporate finance fees incurred following the Sarbanes-Oxley requirements and Medicsight IPO; (c) an increase in stock option costs due to the MGT 2007 Plan grant; Plans E, F, G and H grants in Medicsight and Plan B grant in Medicexchange.

Research and Development:

Research and development $ 632 $ 590 $ 1,227 $ 1,136

Research and development costs relate to the costs of our operations department, some consultants and various associated costs.

Liquidity and Capital Resources



Working Capital Information:



                                                     June 30, 2008    December 31, 2007

Cash, cash equivalents, short-term deposits and
marketable Securities                                       61,631               94,592

Current Assets                                              63,090               95,319
Current Liabilities                                         (5,575 )             (4,420 )
Working Capital Surplus                                     57,515               90,899

Ratio of Current Assets to Current Liabilities                11.3                 21.6

As of June 30, 2008 we had $55,746 in cash compared to $92,273 at December 31, 2007 and $4,885 in marketable securities compared to $2,219 at December 31, 2007.

Net cash used in operating activities was $11,096 for the six months ended June 30, 2008 compared to $7,816 for the six month period ended June 30, 2007. This resulted primarily from:

a. our net loss of $8,915 compared with a net loss of $7,301, for the six month period ended June 30, 2007;

b. adjusted for depreciation and stock-based compensation expenses (non cash items) of $2,115 compared to $883 for the six month period ended June 30, 2007;

c. an overall reduction in current assets and liabilities (excluding cash items) of $234 in the period ended June 30, 2008 compared to $170 increase for the six-month period ended June 30, 2007; and

d. loss attributable to minority interest of $4,530 for the six-month period June 30, 2008 compared to $1,234 for the six month period ended June 30, 2007.

Net cash used in investing activities was $5,308 for the six months ended June 30, 2008 and $760 for the six months ended June 30, 2007 consisted primarily of:

e. in the six months ended June 30, 2008, we received $921 from the sale of available for sale marketable securities as compared to receiving $nil for the six-month period ended June 30, 2007;

f. in the six months ended June 30, 2008 we used $3,688 for the purchase of available for sale marketable securities as compared to $470 for the six-month period ended June 30, 2007;

g. in the six months ended June 30, 2008 we used $361 in capital expenditure and we used $290 for the six months ended June 30, 2007;

h. in the six months ended June 30, 2008 we used $960 for the purchase of XShares stock and we used $nil for the six months ended June 30, 2007;

i. in the six months ended June 30, 2008 we used $220 for the purchase of a Chinese website business and we used $nil for the six months ended June 30, 2007; and

j. in the six months ended June 30, 2008 we invested $1,000 in cash short-term deposits and we used $nil for the six months ended June 30, 2007.

Net cash flows used in financing activities of $20,150 for the six-month period ended June 30, 2008 (compared to $61,116 provided by financing activities for the six months ended June 30, 2007). This consisted of the purchase of $1,251 of Medicsight's common stock and the purchase of $18,899 of our own stock. The six months ended June 30, 2007 consisted of a cash inflow of $61,123 (net of commissions) relating to the IPO of Medicsight.

The Company considers that current cash flows are adequate to cover the business operations for the next twelve months.