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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 16, 2000
INNOVATIVE GAMING CORPORATION OF AMERICA.
(Exact name of registrant as specified in its charter)
MINNESOTA 22482 41-1713864
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
4725 AIRCENTER CIRCLE, RENO, NEVADA 89502
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (775) 823-3000
NOT APPLICABLE
(Former name or former address, if changed since last report)
Page 1 of 6
Exhibit Index Appears on Page 5
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ITEM 5. OTHER EVENTS.
Below is the Registrant's Pro Forma Consolidated Balance Sheet as of
September 30, 2000, and the notes thereto.
INNOVATIVE GAMING CORPORATION OF AMERICA AND SUBSIDIARY
PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
September 30, 2000 Pro Forma September 30, 2000
Historical Adjustments Pro Forma
----------------- ----------------- ------------------
<S> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 107 $ 1,000 (C) $ 1,107
Accounts receivable 536 536
Current portion of notes receivable 65 65
Inventories 4,080 4,080
Prepaid expenses and other 400 400
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Total current assets 5,188 1,000 6,188
Notes receivable, less current portion 237 237
Property and equipment, net 351 351
Investment in Xertain, Inc. - 1,740 (B) 1,740
Intangible assets (Intellectual property), net 668 668
------------------ ----------------- -----------------
TOTAL ASSETS $ 6,444 $ 2,740 $ 9,184
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LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Accounts payable $ 601 $ - $ 601
Accrued liabilities 318 318
Notes payable - current portion 240 240
Customer deposits 338 338
------------------ ----------------- -----------------
Total current liabilities 1,497 0 1,497
Notes payable - net of current portion 2,874 (1,863)(D) 1,011
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Total liabilities 4,371 (1,863) 2,508
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STOCKHOLDERS' EQUITY:
Preferred Stock - - -
Common stock 97 17 (B) 114
Additional paid-in capital 34,962 1,723 (B)
- 1,000 (C)
1,863 (D) 39,548
Accumulated deficit (32,986) 0 (32,986)
------------------ ----------------- -----------------
Total stockholders' equity 2,073 4,603 6,676
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 6,444 $ 2,740 $ 9,184
================== ================= =================
</TABLE>
See Notes to Consolidated Condensed Pro Forma Balance Sheet
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INNOVATIVE GAMING CORPORATION OF AMERICA AND SUBSIDIARY
NOTES TO UNAUDITED PRO FORMA CONDENSED BALANCE SHEET
SEPTEMBER 30, 2000
(A) HISTORICAL BALANCE SHEET FOR SEPTEMBER 30, 2000
The balance sheet amounts presented as "Historical September 30, 2000",
have been prepared by the Company. The financial statements of the
Company for the quarter ended September 30, 2000 are subject to review
by the Company's independent public accounts.
(B) INVESTMENT IN XERTAIN, INC.
This investment accounted for on the equity method, consists of the
Company's acquisition of 1,560,619 shares of Xertain, Inc.'s common
stock in exchange for 1,739,792 shares of the Company's common stock.
The terms of this acquisition were agreed upon during September 2000,
and was completed on October 12, 2000. The purchase represents 14.9% of
the total outstanding shares of Xertain, Inc.
(C) PREFERRED STOCK ISSUANCE
The Company negotiated terms to an agreement with qualified investors
during September 2000, for the issuance of Series E Convertible
Preferred Stock. Total proceeds of $1,000,000 were received from this
transaction on October 13, 2000. The Company is continuing its Series
E offering as of the date of this Form 8-K.
(D) INVENTORY, EQUIPMENT AND INTANGIBLE ASSETS
As disclosed in Note 12 of the December 31, 1999 audited financial
statements, the Company had entered into an Asset Purchase Agreement
("the Agreement") with Xertain, Inc. during February 2000. Pursuant to
the Agreement, Xertain, Inc. was to purchase substantially all of the
Company's gaming assets at a price of approximately $2.5 million below
the book carrying value. As disclosed in Note 1 of the December 31,
1999 audited financial statements, the Company allocated this $2.5
million anticipated loss pursuant to the Agreement as follows:
Inventory Write-down $1,800,000
Equipment Write-down 317,000
Intangible Write-down 385,000
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$2,502,000
During September 2000, the Company and Xertain mutually agreed to
terminate the Agreement while concurrently entering into a new
agreement (see note B above). Accordingly, the Company intends to
recover the previously recorded write-down of assets during 2000 and
future years.
(E) CONVERTIBLE NOTES
The Company received notification during September 2000 of several
convertible noteholders' intent to convert their notes into convertible
preferred stock of the Company. Total conversions of $1,862,500 have
taken place as of October 13, 2000. The Company believes that a total
of approximately $2,800,000 in convertible notes will have been
converted to convertible preferred stock of the Company by the end of
October 2000.
Item 7. Financial Statement, Pro Forma Financial Information and Exhibits
(c)
99.1 Press Release dated October 16, 2000
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SIGNATURE
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 thereunto duly authorized.
INNOVATIVE GAMING CORPORATION
OF AMERICA
(Registrant)
Date: October 16, 2000 By: s/ Roland Thomas
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Name: Roland Thomas
Title: Chief Executive Officer
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION PAGE
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99.1 Press Release................................... 6
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