Investor Relations > Old Shareholders

Shareholder Matters
Summary:
On January 1, 2003, eLot and eLottery emerged from a corporate reorganization under a plan approved by their creditors. The plan called for the issuance of 9,250,000 shares of New Common Stock in eLot to the creditors of both companies to satisfy their claims. The Companies received some post reorganization financing and continues to market it's services and intellectual property to the governmental lottery industry. The issuance of the New Common Stock brought the shareholder base down below the minimum requirement for public reporting and the Company now operates as a privately held entity.

Old eLot Stockholders:
Under the plan of reorganization, no New Common Stock was issued to the Old Common Stock holders of eLot. This New Common Stock made the Old Common Stock no longer valid, legal or tenderable causing the Old Common Stock to be effectively cancelled.

However, holders of the Old Common Stock are eligible to potentially receive Class B & Class C Warrants which will allow the Old Common Stock holders to purchase up to 750,000 shares of New Common Stock (7.5%) of eLot. The Warrants are being held by a Warrant Trustee for the pro rata benefit for Old Common Stockholders. The Class B & Class C warrants will be distributed to Old Common Stockholders only if eLOT reaches certain milestones by December 31, 2005. If eLot does not achieve any of the milestones, the Warrants will expire and not be distributed. These milestones were extended by court order two times and will now expire on December 31, 2009.

If the milestones are achieved, the Class B Warrants will entitle the Old Common Stockholders to purchase shares of the New Common Stock at $.10 per share. Each Old Common Stockholder will be entitled to purchase .00893 shares of New Common Stock for each old share they previously owned. The Class C Warrants will entitle the Old Common Stockholders to purchase shares of New Common Stock at $1.00 per share. Each Old Common Stockholder will be entitled to purchase .01429 shares of New Common Stock for each old share previously owned.

The purpose of the warrant structure was to reward Old Common Stockholders and allow them to participate in the future upside potential of the Company.

Operating Milestones:
A brief summary of the milestones that need to be achieved is noted below. Please note that only one of the milestones is required in order for the Warrants to be distributed.

1. The Company shall have $1 million of revenue, provided there is less than $100,000 of debt.
2. eLot, in one or a series of related transactions, have at least $1 million in cash or securities from the sale or license of the Intellectual Property and/or the assets of eLottery (net of transaction costs and the repayment of debt secured by the assets sold.)
3. The Company shall realize at least $1 million in cash or securities from the sale of all or a portion of the DCC Stock (net of transaction costs and the repayment of debt secured by the DCC stock.)
4. eLot shall have entered into a sale of all or a portion of shares of the common stock of eLottery which results in net proceeds of at least $1 million in cash or securities (net of transaction costs and the repayment of debt secured by the stock of eLottery.)
5. eLot or eLottery shall have entered into a merger, consolidation, or other combination with, or a sale of all or substantially all of its assets in one or more related transactions which results in an exchange of the shares of the common stock of eLot or eLottery for securities, cash or other consideration.
6. eLot shall for any reason file periodic reports under the Securities Exchange Act, as amended (the "Exchange Act")
7. Consolidated eLot shall have assets of more than $10 million. No Action is required by Old Common Stockholders at this time. You will be notified by the Company when the Class B & Class C Warrants are distributed or if they are cancelled.

If you have any further questions, please call Ed McGuinn @203-388-1808 or emcguinn@elottery.com.
Final Disclosure Statement
Warrant A
Warrant B
Warrant C

Extension of Terms
On December 21, 2005, December 20, 2007 and December 17, 2009, eLot extended the terms of the above Trust and Warrant agreements.

A - Notice of Motion
B - Motion to Re-Open
C - Amendment 1
D - Notice of Motion 2
E - Motion
F - Affidavit of Trustees
G - Order to Re-Open
Copyright© 2009 eLottery, Inc. All rights reserved