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Innovative Gaming Announces Q1 Results15 May 2000RENO, Nev., May 15 (Press Release) -- Innovative Gaming Corporation of America (Nasdaq: IGCA - news) today announced first quarter 2000 financial results. For the three months ended March 31, 2000, the Company recorded a pretax loss attributable to Common Stock shareholders of $444,000, or $.05 per share. The accompanying statements of operations were prepared in accordance with Generally Accepted Accounting Principles, and accordingly include only adjustments for preferred stock accretion and preferred stock dividends for the quarter ended March 31, 2000. Actual sales have continued with first quarter Fiscal 2000 revenues totaling $1,388,000 compared to $825,000 during the prior year quarter. Sales during first quarter 2000 included three multi-player games, 16 Bonus Streak and 26 of the Company's new video slots. The prior year quarter sales included seven multi-player games and 15 Bonus Streak. Due to the anticipated merger between IGCA and nMortgage and divestiture of the gaming manufacturing assets to Xertain, Inc., all existing operations of the Company are reported as ``Discontinued Operations.'' As a result of the commitment to the merger plan and related disposition of the gaming assets at the beginning of October 1999, estimated operating revenue and expenses expected to occur during the phase-out period were included in the loss on disposal of gaming manufacturing equipment recorded during the fourth quarter of 1999. For the three months ended March 31, 1999, the Company recorded a net loss of $1,677,000, or $.22 per share. Results of operations for the fiscal 1999 period included the operating results for the period and adjustments for preferred stock accretion and dividends. During the first quarter 2000, the Company recorded cash receipts of approximately $2.5 million, which was attributable to collection of previously existing accounts and notes receivable, payments for current quarter sales and deposits toward future deliveries of the Company's products. BV Johnson, President/COO of IGCA stated, ``These cash receipts have provided for continuation of operations without the requirement of additional funding from outside sources. We believe that our projected cash receipts from fulfillment of existing signed sales orders and anticipated additional orders for the Company's products will provide sufficient cash to fund operations until the completion of our merger with nMortgage and disposal of our gaming assets to Xertain, Inc., which is now anticipated for July 2000.'' However, if current sales forecasts are not met, or if accounts receivables for such sales are not collected as anticipated, or if the closing of the Merger is significantly delayed beyond July 2000, the Company may not have enough cash to fund operations and the Company would have to consider a number of strategic alternatives, including sales of additional capital stock at discounted prices or discontinuing operations. Innovative Gaming Corporation of America, through its wholly-owned operating subsidiary, Innovative Gaming, Inc. develops, manufacturers and distributes fast playing, high-entertainment gaming machines. The Company distributes its products both directly to the gaming market and through licensed distributors. Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Except for historical information, the forward looking matters discussed in this news release are subject to certain risks and uncertainties including but not limited to, timely completion of the merger with nMortgage, regulatory/technical game approvals, the financing of operations and financing and development of new products, enacted legislation and market acceptance of new gaming products as well as other risks indicated from time to time in the Company's filings with the Securities and Exchange Commission, such as the Company's Form 10K for the fiscal year ended December 31, 1999. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events. A registration statement relating to certain securities of the Company has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may or may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state. INNOVATIVE GAMING CORPORATION OF AMERICA AND SUBSIDIARY
CONSOLIDATED CONDENSED BALANCE SHEETS
(In Thousands)
ASSETS March 31, December 31,
2000 1999
Current assets:
Cash $412 $140
Trade accounts and
notes receivable 456 947
Inventories 4,324 4,576
Other current assets 525 655
Accrued revenue estimate
for phase-out period 4,495 5,883
Total current assets 10,212 12,201
Notes receivable, net
of current portion 269 268
Property and equipment, net 558 707
Intangible assets, net 683 765
$11,722 $13,941
LIABILITIES AND STOCKHOLDERS' EQUITY
General current liabilities $2,127 $1,738
Accrued expense estimate
for phase-out period 4,041 6,432
Notes payable, less
current portion 2,917 3,131
Total liabilities 9,085 11,301
Stockholders' equity:
Preferred Stock -- --
Common stock and additional
paid-in-capital 35,056 34,615
Accumulated deficit (32,419) (31,975)
Total stockholders' equity 2,637 2,640
$11,722 $13,941
INNOVATIVE GAMING CORPORATION OF AMERICA AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In Thousands , Except Per Share Data
Three Months
Ended March 31,
2000 1999
Discontinued operations:
Sales $-- $825
Cost of sales -- 1,029
Gross profit -- (204)
Selling, general and
administrative -- 1,459.00
Operating loss -- (1,663)
Interest income/(expense), net -- 15
Loss from operations of
discontinued gaming
equipment manufacturing
(net of applicable
income taxes of $0) -- (1,648)
Preferred stock accretion
adjustment 408 0
Preferred stock dividends 36 29
Net loss attributable to
common shareholders $(444) $(1,677)
Basic - Loss per share
of common stock:
Loss from operations
of discontinued gaming
equipment manufacturing
(net of applicable
income taxes of $0) $(0.05) $(0.22)
Weighted average common
shares outstanding 8,977 7,505
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