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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)........ October 12, 1999
INNOVATIVE GAMING CORPORATION OF AMERICA
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(Exact name of registrant as specified in its charter)
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<CAPTION>
MINNESOTA 22482 41-1713864
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(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification Number)
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4725 Aircenter Circle
Reno, Nevada 89502
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(Address of principal executive offices)
Registrant's telephone number, including area code ....... (775) 823-3000
4725 Aircenter Circle
Reno, Nevada 89502
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
Innovative Gaming Corporation of America announced today that it has
signed a letter of intent for acquisition of an internet mortgage company, as
set forth more fully in the press release filed as an exhibit herewith.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
99.1 Press Release
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: October 22, 1999 INNOVATIVE GAMING CORPORATION OF
AMERICA
By s/ Edward G. Stevenson
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Its Chief Executive Officer
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EXHIBIT 99.1
October 12, 1999
FOR FURTHER INFORMATION CONTACT:
Innovative Gaming Corporation of America:
Edward G. Stevenson
Chairman and CEO Gary Smolen
(775) 823-3000 Investor Relations
Equitex, Inc.: or National Financial Network
Thomas B. Olson (800) 413-3303
Corporate Secretary [email protected]
Equitex, Inc.
(303) 796-8940
INNOVATIVE GAMING AND EQUITEX SIGN LETTER OF
INTENT FOR ACQUISITION OF INTERNET MORTGAGE COMPANY
Reno, Nevada, Englewood, Colorado and Palm Beach Gardens, Florida ... Equitex,
Inc. (NASDAQ: EQTX) ("Equitex" or the "Company") and INNOVATIVE GAMING
CORPORATION OF AMERICA (NASDAQ-NM: IGCA) ("Innovative Gaming" or "IGCA") jointly
announced today they have entered into a letter of intent whereby Innovative
Gaming will acquire Equitex's wholly-owned subsidiary, First Bankers Mortgage
Services, Inc. ("First Bankers") in a tax free exchange of stock. Under the
terms of the letter of intent the stockholders of Innovative Gaming will retain
25% of the newly merged company on a post-merger basis.
Under the proposed agreement, concurrent with the merger, IGCA would divest its
gaming assets. Exploratory talks have been held with several gaming
manufacturers with the goal of selling the gaming machine business intact to a
company capable of effectively marketing IGCA's recently approved video slot
machine and its multi-player games line. IGCA's customers, distributors, and
agents will be supported throughout any transition.
"We believe this transaction is in the best interests of IGCA's shareholders in
realizing maximum value for their holdings," stated Edward G. Stevenson,
Chairman and Chief Executive Officer of IGCA. "While our new games were very
well received at the recent World Gaming Expo, the ever increasing capital
investment requirements for research and development, marketing expenses for new
products, and the high cost of capital for small companies such as ours make it
very expensive to compete in this crowded industry. We feel the growth potential
in Internet commerce offered by a business such as Mortgage and First Bankers
will provide our shareholders a much greater stock appreciation potential."
"Given the recent successful public offerings of other internet focused mortgage
companies like E- Loan, Inc. and Mortgage.com, we believe mortgage pure play
through a separate publicly traded entity will leverage our investment to create
additional value for the Equitex stockholders," said Equitex President, Henry
Fong. "First Bankers closed in excess of $850 million in mortgages last year
using conventional marketing methods and we believe the strong management team
of nMortgage can move that company to a leadership position in the Internet
mortgage business. We hope to complete this transaction by December 31, 1999.
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Closing of the proposed transaction is subject to, among other things, execution
of a mutually acceptable definitive agreement, successful completion of due
diligence, completion of certain additional documents, obtaining corporate and
any necessary regulatory approvals, approval by the IGCA stockholders, and other
customary pre-closing conditions.
First Bankers is a national direct lender headquartered in Ft. Lauderdale,
Florida. The Company operates in 25 states and offers both retail and wholesale
mortgage financing. First Bankers is an approved lender for FNMA, FHLMC, GNMA,
FHA and VA. First Bankers recently announced the debut of its new online
mortgage system, nMortgage, which now offers mortgage loans online at website
address WWW.NMORTGAGE.COM. nMortgage's Phase I system enables consumers to
access mortgage loan rates and programs, and to apply online for mortgage loans.
During the fourth quarter of 1999, nMortgage plans to release its Phase II
online mortgage system, which will enable customers to track the status of their
loans online as well as offer interactive online customer service. Upon
consummation of the transaction, IGCA would be renamed nMortgage.
Innovative Gaming Corporation of America through its wholly-owned subsidiary,
Innovative Gaming, Inc., develops, manufactures and distributes fast playing,
high entertainment gaming machines. The company distributes its products both
directly to the gaming market and through licensed distributors.
Equitex, Inc. is a holding company that currently operates through its two
wholly owned subsidiaries: First Bankers Mortgage Services Inc. of Ft.
Lauderdale, Florida; and First TeleServices Corp. of Atlanta, Georgia. First
Bankers is a leading mortgage lender operating in 25 states offering both retail
and wholesale mortgage financing including conventional, sub-prime and
commercial mortgage loans. Consumers can apply online through its web site
WWW.NMORTGAGE.COM. First TeleServices Corp. is a financial services marketing
company marketing various financial products targeted to the sub-prime consumer.
Equitex currently owns 7.5% of, and has executed a definitive agreement to merge
with, First TeleBanc Corp., a single bank holding company, which owns net First
National Bank; a 13 year-old nationally chartered bank based in Boca Raton,
Florida. In connection with that acquisition, Equitex has applied to the Federal
Reserve Bank of Atlanta for approval to become a bank holding company. First
TeleBanc Corp. is not affiliated in any way with TeleBanc Financial Corporation.
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The statements included in this press release concerning predictions of economic
performance and management's plan and objectives constitute forward-looking
statements made pursuant to the safe harbor provisions of Section 21E of the
Securities Exchange Act of 1934, as amended and Section 27A of the Securities
Act of 1933, as amended. These statements involve risks and uncertainties that
could cause actual results to differ materially from the forward-looking
statements. Factors which could cause or contribute to such differences include,
but are not limited to, factors detailed in Equitex and IGCA's Securities and
Exchange Commission filings; negotiation and execution of a definitive merger
agreement, the ability of IGCA to divest its gaming assets in a timely manner,
shareholder approval, regulatory approvals; economic downturns affecting the
operations of First TeleServices Corp., First TeleBanc Corp. net1st, nMortgage
or First Bankers Mortgage Services Corp.; the termination of previously
announced acquisitions; delays or the inability to obtain regulatory approvals
for previously announced acquisition; the inability to initiate or complete any
contemplated restructuring, offering, acquisition or other transaction; and the
unavailability of financing to complete management's plans and objectives. The
forward-looking statements contained in this press release speak only as of the
date hereof and the Company disclaims any intent or obligation to update these
forward-looking statements.
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