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On-Point Technology Systems Inc. Reports On Results for Q3

Revenues for the third quarter of 2000 were $2,212,000, a 7% increase over the 1999 third quarter revenues of $2,062,000. For the 2000 third quarter, On-Point generated net income of $243,000, or $.07 per share, versus a net loss of $700,000, or $(.21) per share, for the 1999 third quarter. The 2000 third quarter results were positively affected by $855,000 of income relating to the terminated merger agreement with GTECH Corp. and negatively affected by $150,000 of increased research and development costs.

Revenues for the nine months ended Sept. 30, 2000 were $8,896,000, versus revenues of $13,162,000 for the comparable prior year nine months. For the 2000 nine months, On-Point incurred a net loss of $472,000, versus a net loss of $147,000 for the prior year comparable period.

During the third quarter, On-Point renegotiated all of its short-term debt obligations and increased its working capital to approximately $7,200,000 at Sept. 30, 2000, from $5,700,000 at Dec. 31, 1999.

Subsequent to Sept. 30, 2000, On-Point also completed a $1 million equity raise and is in the process of raising an additional $5 million. As previously reported, during the nine month period, the company extended its line of credit from July 2000 to July 2003 and increased the maximum borrowings under the line from $6 million to $10 million.

Commenting on the third quarter results, Frederick Sandvick, the chairman and chief executive officer of On-Point, stated: ``The third quarter revenues and results were in line with our expectations. The third quarter was the continuation of a transition phase for On-Point. The transition included a renewed focus on our strategic goals, many of which were discontinued while we were in acquisition discussions with GTECH Corp.

``We are pleased with the progress we have made in our renewed focus. In just three months since the termination of the GTECH acquisition discussions in July, we have restructured our debt, raised additional equity capital, entered into an international strategic alliance, announced an exclusive contract to supply ITVMs to the Argentina National Lottery, and entered into definitive discussions on developing an on-line and internet lottery in South America.

"In addition to those activities, we have progressed towards introducing our next generation lottery technology to the lottery industry and transitioning into new market opportunities.

``Clearly, all of the activities and developments are positioning On-Point for the future. Although continue to have many challenges and transitional issues over the coming months that may negatively impact earnings, we believe the future potential to be extremely exciting.''

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