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IGCA Announces Financing, Eliminates Floorless Stock10 September 2002LAS VEGAS – (Press Release) -- Innovative Gaming Corporation of America (Nasdaq: IGCA) announced that it recently completed a private placement of $2,000,000 of Convertible Promissory Notes which convert into Series A-1 Convertible Preferred Stock. Under the terms of the private placement, the investors may purchase up to $3,000,000 in additional convertible notes over a five month period. Approximately $1,000,000 of the proceeds from this financing has been used to reduce exiting liabilities and the balance will be allocated to working capital. Commenting on the private placement, Laus M. Abdo, President, Chief Executive Officer and Chief Financial Officer of IGCA said, "This private placement provides much needed working capital to the Company. The initial funding will allow the Company to focus on its operations rather than on raising capital and will enable the Company to develop, manufacture and ship new products. In addition, future placements with these investors will allow the Company to complete its workout with vendors and creditors." Additionally, the Company announced that in connection with the financing the Company reached agreements with the holders of its existing convertible preferred securities establishing a floor on the conversion price for future conversions. According to Mr. Abdo, this eliminates all floorless convertible preferred stock previously issued. "With the signing of these agreements, the Company will have successfully eliminated the negative pricing pressures which related to the previously issued floorless preferred stock offerings. The conversion of the remaining preferred convertible stock will all be well above $1 per share on a split adjusted basis." Finally, the Company indicated that its previously announced 1 for 10 reverse stock split was effective as of the close of business on September 9, 2002. With regard to the reverse stock split, Mr. Abdo commented, "Coupled with our improving operations, new features on existing products that will be available in September and new product launches that are anticipated early in the 4th quarter, I believe that the reverse stock split will allow the Company to regain full compliance with the NASDAQ rules relating to the $1 minimum closing bid price requirement." |