SAN MARCOS, Calif., Feb. 26, 2001 (PRIMEZONE) -- On-Point Technology Systems, Inc. (On-Point) (Nasdaq:ONPT) today announced that it has executed an asset purchase agreement with Interlott Technologies, Inc. (Interlott) (AMEX:ILI) for the sale of those assets used in its existing lottery business, relating to the manufacture, sale, lease and service of instant lottery ticket vending machines.
The agreement provides for the sale of On-Point's lottery assets, including the assignment of its existing lottery contracts, subject to necessary approvals, to Interlott, in exchange for up to $28.5 million, including cash of $13.5 million at closing (subject to closing adjustments), a deferred amount of up to $9 million, payable, subject to adjustment, over five years, and an earn-out amount of up to $6 million tied to certain future revenues. In addition, On-Point and Interlott have entered into a separate on-line technology agreement to market a proprietary design for the world's first on-line activated instant lottery tickets. On-Point will retain its cash and all non-lottery related assets and continue to operate its existing non-lottery related businesses, as well as move forward with new market opportunities.
The closing of the sale is subject to several conditions, including review and approval by On-Point's shareholders and other necessary consents and approvals.
Frederick Sandvick, On-Point's Chairman and Chief Executive Officer, commented, "As part of our strategic plans to diversify the Company and accelerate its growth into new market opportunities, we are pleased to have reached a definitive agreement for the sale of our traditional lottery assets. Over the last six months, the Company has been aggressively re-positioning itself to better leverage its management expertise, its technological property, and its international relationships in order to enable On-Point to maximize shareholder value and develop new market opportunities. The sale of On-Point's Lottery assets is in line with our objectives of maximizing the potential returns from the new market opportunities that we are currently developing and negotiating.
"These potential new market opportunities include our strategic plans to redirect our efforts from instant ticket vending machines to on-line lottery operations, and to develop electronic solutions to high-volume, cash-oriented transactions, such as prepaid telephony, bill payments, prepaid debt processes, consumer entertainment and public access mediums. We believe our strategic international relationship with Victor Chandler International Limited, one of the world's largest independent full-service gaming companies, will assist On-Point in leveraging the full potential of these new opportunities. In addition, as previously announced, On-Point's proposed acquisition of the assets of a privately held, Web-enabled business will provide us with a Web-enabled delivery system that will serve as a foundation for the development of electronic solutions to cash-oriented transactions using the Internet.
"We believe the sale of our lottery assets and the strategic on-line technology agreement between the two companies will not only be beneficial to the shareholders of both companies, but to the entire lottery industry. We look forward to completing the transaction over the next 90 days."
About On-Point
On-Point provides effective technologies for transaction automation. On-Point is one of the world's largest providers of high-security vending products. On-Point designs, sells, leases and services high-security vending machines both domestically and internationally. On-Point has signed a definitive agreement to acquire a Web-enabled systems company and has begun the development of automated electronic solutions for high-volume, cash-oriented transactions. On-Point is also in the process of negotiating for the rights to operate on-line and Internet lotteries.
Any forward-looking statements in this release are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Act of 1995. Investors are cautioned that actual results may differ substantially from such forward-looking statements. Forward-looking statements involve risks and uncertainties including, but not limited to, the successful completion of proposed equity raises, which are necessary for the Company to implement its plans to develop new market opportunities, continued acceptance of the Company's products and services in the marketplace, competitive factors, new products and technological changes, the Company's successful entry into new markets, the Company's ability to obtain the rights to on-line and internet lotteries and its ability to generate income from such operations, the Company's successful transition to its next generation product line, dependence upon third-party vendors, a limited number of customers, political and other uncertainties related to customer purchases, the ability to generate cash flow sufficient to sustain operating activities, and other risks detailed in the Company's periodic filings with the Securities and Exchange Commission.