Interlott Technologies

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International Guild of Hospitality & Restaurant Managers

Interlott Technologies (AMEX: ILI )

7697 Innovation Way
Mason, OH 45040

Phone: (513) 701-7000
Fax: (513) 701-7001
Employees (last reported count): 245

Interlott Technologies, Inc. is engaged primarily in the design, manufacture, sale, lease and service of instant-winner lottery ticket vending machines (ITVMs). ITVMs are used by public lotteries operated by states and international public entities to dispense instant-winner lottery tickets primarily in retail locations such as supermarkets and convenience stores. An instant lottery commonly is played by players scratching off a latex coating from a pre-printed ticket or tearing pull-tabs from a pre-printed ticket to determine the outcome of the game. The Company's ITVMs dispense instant lottery tickets directly to players, thereby permitting the retailer or agent to sell tickets without disrupting the normal duties of its employees. As of December 31, 2001 , the Company had sold or leased over 27,000 ITVMs through agreements with 29 different state lotteries and the District of Columbia and 14 international jurisdictions, or their licensees or contractors.

On June 1, 2001 , the Company acquired the lottery assets of On-Point Technology Systems, Inc., of San Marcos , California . The assets acquired included patents, technology, accounts receivable, inventory, service contracts and lease contracts for the New York , Illinois , Virginia and Missouri state lotteries.

The Company's ITVMs dispense scratch-off instant lottery tickets using a dispensing process that incorporates its patented "burster technology." To dispense pull-tab instant lottery tickets, the Company has developed an ITVM that incorporates a patented dispensing technology that is different than the burster technology. ITVMs that dispense pull-tab tickets are referred to as pull tab vending machines (PTVMs).

The Company introduced a prepaid phone card-dispensing machine (PCDM) in 1995 that enables providers of long-distance telephone service to dispense prepaid telephone calling cards in retail locations without the assistance of an employee of the retailer. The dispensing process used in the Company's PCDMs incorporate the same patented technology used in its PTVMs.

The ITVM

The Company's ITVMs automatically dispense instant lottery tickets upon payment from the user. The burster technology in the Company's ITVMs automatically separates one scratch-off instant ticket from another along the perforations between tickets to help prevent tearing of the tickets or scarring of the latex on the tickets. This technology also enables the Company's ITVMs to dispense and account for virtually any known type of scratch-off instant lottery ticket, allowing the use of a wide range of sizes, shapes, paper stocks or perforations, without the intervention of a lottery retailer or agent. This feature allows a lottery to purchase virtually all types of scratch-off instant tickets from its instant ticket manufacturer, without having to request from the manufacturer major alterations in the ticket perforations.

Since the introduction of its modular Expandable Dispensing System in 2000, the Company's ITVMs for scratch-off tickets have had the capacity to dispense tickets from one to 24 different bins. Because each bin can dispense tickets of different sizes, paper stocks and price levels, lotteries can sell scratch-off tickets for up to 24 different instant-winner games with a single ITVM. The ITVMs can accommodate up to 24,000 tickets in the 24-game unit and can dispense all tickets in the bin without manual intervention. When all of the tickets in a bin have been dispensed, tickets can be easily reloaded by an employee of the retailer or agent. The ability of the Company's ITVMs to dispense every ticket in each bin not only facilitates the ticket reloading process, but also enhances the accuracy of the inventory and accounting functions.

The PCDM

Similar to its ITVMs for scratch-off tickets, the Company's PCDMs automatically dispense prepaid telephone calling cards upon payment from the user. The dispensing technology in the Company's PCDMs automatically pull one prepaid telephone calling card from the bottom of the stack of cards without the jamming that is associated with other dispensing processes. The dispensing technology also enables the Company's PCDMs to dispense and account for virtually any known thickness of calling card, without the intervention of the retailer. In addition, the PCDMs are faster than manual sales of prepaid telephone calling cards, as the PCDM's entire dispensing process is completed in less than three seconds once the selector button has been pushed.

The Company's PCDMs have the capacity to dispense cards from two to six different bins. The PCDMs can accommodate up to 3,600 cards in the six-bin unit and can dispense all prepaid telephone calling cards in the bin without manual intervention. When all of the cards in a bin have been dispensed, cards can be easily reloaded by an employee of the retailer. The ability of the Company's PCDMs to dispense every card in each bin not only facilitates the card reloading process, but also enhances the accuracy of the inventory and accounting functions.

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The data included within the Financial section is solely for information and does not construe a recommendation and/or endorsement by IGHRM or its members to invest funds with any of the companies listed. You are strongly advised to obtain professional advice with qualified individuals or corporations for any investments of funds.

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