DENVER, Feb. 18, 2004 (PRIMEZONE) -- Galactic Gaming, Inc. (the "Company") (Pink Sheets:GAMX) announced that pursuant to the agreement and plan of reorganization it entered into with Aces & Eights Entertainment, LLC, a Nevada limited liability company, which was previously approved by the Company's shareholders, the Company has issued to each shareholder of record as of December 29, 2003, 5 shares of restricted common stock and 1 share of Class B preferred stock for each share of stock held as of the record date.
As of the record date, there were a total of 19,527,415 shares of common stock issued and outstanding. Therefore, the Company issued a total of 97,637,075 shares of restricted common stock and a total of 19,527,415 shares of Class B preferred stock to the shareholders of record.
The Class B shares of preferred stock have no voting rights, no conversion rights and no rights to any dividends or distributions other than the limited right to participate on a pro rata basis in any future Net Recovery, if any, from the "Black Hawk" litigation after the distributions are made to the holders of Class A preferred stock.
The Company further announced that the closing date for the Reorganization has been extended to February 23, 2004.
The Company announced that in order to implement the plan of reorganization, the Company has secured the services of several consultants who will advise and confer with the Company. The value of the services provided to the Company to date and the value of the commitment for additional services are equal to $120,824.00.
In order to pay for the services of the consultants, each of whom is an accredited investor and resides in the State of Colorado, the Company has issued to the consultants a total of 319,000,000 shares of its common stock via a Private Placement Offering of the Company's securities pursuant to SEC Regulation D, Rule 504. Although the 319,000,000 shares of common stock became free trading shares upon issuance, 168,600,000 of these shares are subject to a leak-out agreement that will restrict the sale of the 168,600,000 shares of common stock over the next 12 months. The holders of these shares may sell, on a cumulative basis during each calendar month during the 12 months following their issuance, an amount of common stock equal to the greater of 1/12th of the common stock held by the holder on the date of issuance, or, 1/25th of the average weekly reported volume of trading in the common stock of the Company for the preceding two week period; subject however to the additional proviso that no shares will be released for sale for a period of 45 days from the issuance thereof.
The Company further announced that pursuant to the terms of the agreement and plan of reorganization, 301,000,000 shares of restricted common stock and 5,000,000 shares of Class C preferred stock has been issued in trust for the benefit of the members of Aces & Eights Entertainment, LLC. The Class C shares of preferred stock have no conversion rights and no rights to any dividends or distributions. The only right the holders of Class C preferred stock will have is the right, following the merger, to vote 50 votes for each share of Class C preferred stock held of record on all matters submitted for shareholder approval. The shares held in trust will be released from trust and issued pro rata to the members of Aces & Eights Entertainment, LLC upon approval of a minimum of 90% of Company's creditors to exchange the principal amount of the debt due them for Class A preferred stock, and upon Aces & Eights' current management raising a minimum of $75,000.00 within 60 days of Closing and a maximum of $350,000.00 within 90 days of Closing for the reorganized company.
If approval of 90% of the creditors is received, but less than $350,000.00 is raised, then a proportionate amount of the shares will be issued to the members of Aces & Eights Entertainment, LLC, and the balance will be returned to the Company as treasury stock.
If less than 90% of the creditors approve the plan of reorganization, or if Aces & Eights fails to raise the minimum of $75,000.00 within 60 days of Closing, then the plan of reorganization will terminate and the shares held in trust will be returned to the Company as treasury stock.
Aces & Eights Entertainment, LLC was recently formed to produce, distribute and license cable television programming that combines the current trends of tournament poker with reality television. Upon completion of the reorganization, Aces and Eights current management will replace Galactic's current management, and they will shift the focus of the reorganized company to the development and licensing of reality based television programming for distribution on cable TV.
For further information, contact Richard M. Greene, Secretary, Galactic Gaming, Inc. at 336-274-3200, or Christopher C. Seminatore, Managing Partner, Aces & Eights, LLC, at 949-400-4174.
"Forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 may be included in this news release. These statements relate to future events or our future financial performance. These statements are only predictions and may differ materially from actual future events or results. Galactic Gaming, Inc. disclaims any intention or obligation to revise any forward-looking statements whether as a result of new information, future developments or otherwise. Some of the important risk factors that could cause actual results to differ from those contained in forward-looking statements, include, but are not limited to, risks associated with our ability to (i) conclude the terms of the merger agreement, (ii) obtain necessary approvals from our creditors, (iii) changes in general economic and business conditions (including reality cable TV, tournament poker programs and cable TV industry), (iv) actions of our competitors, (v) the extent to which we are able to develop new cable TV programs and markets for our programs, (vi) risks in connection with acquisitions, (vii) the time and expense involved in such development activities, (viii) the level of demand and market acceptance of our programs and (ix) changes in our business strategies.
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