Elixir
Gaming Technologies to Raise $50 Million in Equity Private
Placement
Elixir
Gaming Technologies and Elixir Group Limited Agree to Modify
Terms of Warrant Agreement
LAS
VEGAS and MACAU, Oct 22, 2007 – Elixir Gaming Technologies,
Inc. "Elixir Gaming" (AMEX:EGT) announced today
that it has entered into a definitive agreement to sell 15
million shares of newly-issued common stock to institutional
investors at a price of $3.50 per share.
It
is anticipated that the net proceeds to the Company, after
issuance costs, will be approximately $50 million. The transaction
is expected to close promptly upon the Company's receipt of
funds. ThinkEquity Partners, LLC acted as placement agent
and Greenburg Traurig LLP served as securities counsel to
Elixir Gaming in connection with the offering.
The
Company expects to use the net proceeds from the financing
to repay debt, fund the purchase of electronic gaming machines
pursuant to its agreement with Elixir Group Limited ("Elixir
Group") and for general working capital purposes. To
date, Elixir Group has delivered agreements for the placement
of 3,294 electronic gaming machines to be placed on a long-term
participation basis in gaming venues in several Asian-Pacific
markets.
In
conjunction with the financing, Elixir Gaming also announced
it has entered into an exchange agreement with Elixir Group
whereby certain outstanding vested and unvested warrants issued
to Elixir Group pursuant to the "Earn-In" provision
of the June 2007 Securities Purchase and Product Participation
Agreement will be cancelled in exchange for Elixir Gaming's
issuance of its common shares. The transactions under the
exchange agreement are subject to the approval of the shareholders
of Elixir Gaming. In total, Elixir Group currently has 38
million vested warrants to purchase a total of 38 million
Elixir Gaming shares and 66 million unvested warrants which,
upon vesting, would allow Elixir Group to purchase up to an
additional 66 million Elixir Gaming shares based upon agreements
for and placements of slot machines on a participation basis.
Pursuant to the exchange agreement, Elixir Group will exchange
12 million of its 38 million vested warrants for 4.8 million
Elixir Gaming shares. Elixir Group has also agreed that it
will exchange its rights for up to an additional 66 million
unvested warrants for rights to up to 26.4 million Elixir
Gaming shares. The parties exchange of the 66 million unvested
warrants is subject to the satisfaction of the vesting and
performance conditions set forth in the warrants relating
to Elixir Gaming's agreements for and placements of slot machines
on a participation basis.
The
exchange agreement was negotiated and approved by a Special
Committee of the Board of Directors of Elixir Gaming, comprised
solely of independent directors of the company. The Special
Committee received a fairness opinion from Capstone Valuation
Services, LLC that the terms of the warrant for share exchange
are fair to the minority shareholders of Elixir Gaming, (that
is the shareholders other than Elixir Group). The transactions
under the exchange agreement are subject to the approval by
Elixir Gaming's shareholders at the company's Annual Shareholders'
Meeting to be held in December 2007.
Elixir
Gaming intends to ask that the exchange agreement be approved
by a majority of the shares in attendance at the meeting other
than those held by Elixir Group.
Gordon
Yuen, Executive Chairman and CEO of Elixir Gaming, commented,
"We believe the equity offering and warrant transaction
represent important positive developments in the growth of
Elixir Gaming. This financing provides us with financial flexibility
to purchase the electronic gaming devices necessary to fulfill
the placement commitments announced to date and to continue
pursuing our strategies for expansion. We appreciate the confidence
of the participating investors in Elixir Gaming and our long-term
plans for growth.
"With
the proposed revisions to the warrant agreements, we will
simplify our capital structure and materially reduce the fully
diluted share count. We value the support of our major shareholder
in facilitating the warrant-equity exchange."
The
shares of common stock sold in the private placement have
not been registered under the Securities Act of 1933, as amended,
or state securities laws and may not be offered or sold in
the United States absent registration with the Securities
and Exchange Commission ("SEC") or an applicable
exemption from the registration requirements.
The
shares were offered and sold only to a limited number of accredited
investors. The Company has agreed to file a registration statement
with the SEC covering the resale of the common stock issued
in the private placement. This press release does not constitute
an offer to sell or the solicitation of an offer to buy any
of these securities.
About
Elixir Gaming Technologies Inc.
Elixir
Gaming Technologies Inc. (Elixir Gaming) is a member of Elixir
Group, an innovator of gaming technology solutions and a wholly
owned subsidiary of the Melco Group.
Elixir
Gaming is focused on placing gaming machines on a revenue
share model in Asia. The company has established a strategic
presence in the Asia Pacific region with its participation
contracts in the Philippines, Cambodia, Vietnam and other
Asian markets.
Elixir
Gaming delivers cutting-edge and market-competitive technology.
Its products include table devices, such as the automated
card verification machine, computer-based card shuffling system,
and high-frequency RFID-gaming chips and plaques. Elixir Gaming
products are distributed by Elixir Group in Asia and Suzo
Happ in the Americas and Europe.
In
addition, Elixir Gaming has the capability to quickly and
efficiently respond to the stringent and specific technical
requirements of customers, in collaboration with Elixir Group's
ICT, manufacturing and research and development teams. These
services optimize the security, productivity and profitability
within the gaming establishments. For more information please
visit www.elixirgaming.com.
About
Elixir Group Limited
Elixir
Group is an important strategic component of Melco's gaming
and leisure entertainment focus. Elixir Group is a provider
of information communications technology to various gaming
concession holders in Macau and gaming venue operators throughout
Asia. Elixir Group is also designing gaming machines and local
game content for the Asian gaming markets with gaming and
research development centers in Macau, China and the Philippines.
As
a pioneer in the competitive Asian gaming market, Elixir Group
has consistently delivered exciting solutions, expert sales
advice and professional gaming support. Elixir Group has forged
alliances with leading gaming and technology companies and
by accessing its partners'
manufacturing capabilities is able to focus entirely on innovative
product design and customer service.
Reflecting
its intention to further strengthen its leading position in
Asia's gaming technology industry, Elixir Group has established
a significant ownership position in Elixir Gaming Technologies,
Inc.
Forward
Looking Statements
This
press release report contains forward-looking statements concerning
Elixir Gaming Technologies and Elixir Group within the meaning
of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as
amended. Those forward-looking statements include statements
regarding the expected closing of the private placement and
warrant exchange, the expected benefits of the private placement
and warrant exchange, expectations for the business relationship
between Elixir Gaming Technologies and Elixir Group, including
the recurring revenue that may develop from the relationship
with Elixir Group, and the Company's expectations for future
product revenue. Such statements are subject to certain risks
and uncertainties, and actual circumstances, events or results
may differ materially from those projected in such forward-looking
statements. Factors that could cause or contribute to differences
include, but are not limited to, the risk that the placement
or warrant exchange may not be completed, that Elixir Gaming
may not realize the expected benefits of the placement or
warrant exchange, risks related to Elixir Group's inability
to place gaming machines at significant levels or at all and
risks relating to Elixir Group's ability to place games that
generate the expected amount of net-win.
Elixir
Gaming Technologies cautions readers not to place undue reliance
on any forward-looking statements. Elixir Gaming Technologies
does not undertake, and specifically disclaims any obligation,
to update or revise such statements to reflect new circumstances
or unanticipated events as they occur.
Additional
Information
Elixir
Gaming Technologies, Inc. intends to file with the Securities
and Exchange Commission a proxy statement and other relevant
documents in connection with its solicitation of shareholder
approval of the proposed warrant cancellation transaction
under the exchange agreement with Elixir Group. Investors
and security holders are advised to read the proxy statement
regarding the proposed transaction when it becomes available,
because it will contain important information. Investors and
security holders may obtain a free copy of the proxy statement,
when available, and other documents filed by Elixir Gaming
Technologies at the Securities and Exchange Commission's web
site at www.sec.gov.
The
proxy statement and such other documents may also be obtained,
when available, from Elixir Gaming Technologies by directing
such request to Elixir Gaming Technologies, Inc., 1120 Town
Center Drive, Suite 260, Las Vegas, Nevada 89144, Attention:
Investor Relations.
Elixir
Gaming Technologies and its executive officers and directors
may be deemed to be participants in the solicitation of proxies
from stockholders of Elixir Gaming Technologies with respect
to the transactions contemplated by exchange agreement.
A description of any interests that Elixir Gaming Technologies'
directors and executive officers have in the proposed transaction
will be available in the proxy statement.
Information
regarding Elixir Gaming Technologies officers and directors
is included in Elixir Gaming Technologies, Inc. Form 10-KSB
filed with the Securities and Exchange Commission on April
13, 2007. These materials are available free of charge at
the Securities and Exchange Commission's web site at http://www.sec.gov and from Elixir Gaming Technologies, Inc.
CONTACT:
Jaffoni & Collins Incorporated
Richard Land and Dave Jacoby
(1) 212 835-8500
egt@jcir.com
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