The full press release pertaining to the buyout of VGTI:
NORWALK, Conn.--(BUSINESS WIRE)--Feb. 25, 2000--eLOT, Inc. (NASDAQ:ELOT - news) today announced it has entered into an agreement to purchase San Diego based Virtgame.com Corp. (OTCBB:VGTI - news), a leading provider of Internet enabling technology to the lottery and gaming industries. This transaction further establishes eLOT as a leading player in the Internet lottery industry and provides entry into an important additional market through VGTI's agreement to be the web-based retailer of Internet lottery products for the State of Chaco in Argentina. In addition, VGTI brings the prospect of advanced border control technology as well as an experienced team of software developers.
Under terms of the agreement, VGTI shareholders will receive one share of eLOT common stock for every three shares of VGTI common stock held. There are approximately 10.5 million outstanding shares of VGTI, including 233,333 shares acquired by eLOT in 1996 which will be extinguished as a result of the transaction. It is anticipated that eLOT will issue approximately 3.4 million shares to complete the transaction. Pro forma, for the transaction eLOT will have approximately 66.4 million shares outstanding. The agreement is subject to certain conditions, including the discontinuation of operations of VGTI's Constellation virtual casino, completion of due diligence and VGTI shareholder approval.
VGTI is currently developing web-based instant lottery games for the Argentine lottery with sales expected to commence in the second quarter of this year. The Company has also established an Argentine Internet site for lottery games at www.juegosoficiales.com and the State of Chaco has agreed to secure licensing and distribution agreements with up to seven other Argentine state lotteries allowing Argentineans nationwide to access eLottery's web retail store from the site.
In addition to web-based lottery ticket sales, eLottery will also offer Argentine lotteries its IMARCS Internet marketing solution which leverages the power of the Internet by delivering one-to-one marketing messages that maximize ticket sales.
VGTI will also submit to the Nevada Gaming Control Board for approval a working prototype of a border control technology to be used by the Nevada gaming industry to offer Internet gaming access to Nevada residents only. The VGTI Nevada prototype offers state regulators and the licensed gaming industry a viable solution for intrastate distribution of licensed and controlled gaming products.
Commenting on the acquisition, eLottery President Mike Yacenda stated, ''eLottery's domestic lottery focus and broad range of products and services will be complimented by VGTI's international marketing and sales capabilities. We believe that Argentina will be a powerful model that other South and Central American governmental lotteries will want to emulate.''
Joseph Paravia, President and CEO of Virtgame.com stated, ''eLottery has had a long standing interest in VGTI dating back to 1996 and has served as a catalyst that has successfully guided us to the web-based government lottery business model. We believe our Latin American experience and contacts will be amplified by the eLOT purchase of VGTI and we're pleased to have this opportunity to become a part of the eLottery team.''
eLottery has already contracted to be the Internet retailer of the Jamaica Lottery. eLottery has made progress on implementing the web-based sale of Jamaica Lottery tickets with installation commencing this month and ticket sales expected to begin during the second quarter. The Company has also established an Internet marketing and promotions system for the Idaho Lottery. About eLOT, Inc.
eLOT, Inc. is committed to leading the governmental lottery industry into the e-commerce market. The Company has developed, installed and operated systems that have processed ten million e-commerce lottery ticket sales and transactions. It has operated Internet, Intranet, telephone, communications, accounting, banking, database and other applications and services that can facilitate the electronic sale of new and existing lottery products worldwide. The Company has also developed transitional e-commerce solutions for governmental lotteries, which leverage the power of the Internet, while political, legal and social issues are simultaneously addressed. eLottery's corporate web site is on the World Wide Web at elottery.com.
About eLotteryFreeWay.com (http://www.elotteryfreeway.com)
A reward-entertainment lottery portal, eLotteryFreeWay offers lottery and entertainment games (for no consideration) with registered players earning ePoints that are redeemable for cash and merchandise. eLotteryFreeWay's mission is to build an Internet community whose members are expected to be highly predisposed to purchase governmental lottery tickets over the Internet.
This news release contains forward-looking statements. Such statements are subject to certain factors, which may cause eLOT's plans to differ or results to vary from those expected including the risks associated with the development of new products and the uncertainty of product acceptance, the competitive nature of the Company's industry, rapid technological change, legal uncertainties, the Company's dependence on key personnel, and a variety of risks set forth from time to time in Company filing with the Securities and Exchange Commission.
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Contact:
eLOT, Inc., Norwalk
Stanley J. Kabala, 203/876-7600
Chairman and CEO
or
Lippert/Heilshorn & Associates, New York
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