VendingData Corporation Closes Dolphin Products Acquisition

LAS VEGAS NAVADA - VendingData Corp announced on Thursday that it has completed the acquisition of Melbourne, Australia based Dolphin Advanced Technologies Pty Ltd. (Dolphin), including its manufacturing operations and all remaining intellectual property (IP).

According to a press release by the company, the acquisition is in exchange for firstly, a total of $1,350,000, of which $750,000 was paid as a non-refundable deposit in April 2006 upon the execution of the letter of intent between the parties; secondly, 2,462,238 shares of VendingData common stock, of which 1,000,000 shares were issued in April 2006 as part of the non-refundable deposit; and thirdly, secure convertible promissory notes in the aggregate principal amount of $5,782,168.

The notes will be non-interest bearing and all principal under the notes will be due and payable on January 7, 2007.

The definitive agreement was signed on July 5, 2006 and the closing took place on July 12, 2006. In addition, Dolphin Product's founder, CEO and inventor of several of VendingData's products, William Purton was appointed to VendingData's Board of Directors.

"The closing of the Dolphin transaction is another important strategic step in accomplishing our objective of building valuable intellectual property and a growing preferred product line. We will soon be announcing the further expansion of our product offering through the use of Dolphin's RFID casino chip technology and manufacturing capability," commented Mark Newburg, chief executive officer of VendingData Corporation.

As further confirmation of the current and future value of Dolphin, Gordon Yuen, CEO of Elixir, Vendingdata's RFID casino chip distribution partner, stated recently, "After extensive testing of VendingData's Dolphin RFID enabled casino chips, we have determined that this chip will be the dominant RFID chip used throughout Asia."

Newburg added, "This acquisition enhances our competitive edge as we gain a number of key assets, including the intellectual advantage of the inventor of a number of our products, Bill Purton, through his commitment to join our Board, and Dolphin's two acre state of the art manufacturing facility in Melbourne. This business is cash flow positive and will have a favorable impact on our monthly cash flow position."

Purton commented, "I am very pleased with the acquisition of Dolphin by VendingData as it results in an organization which is stronger than the two individual parts. The incorporation of the Dolphin technological and manufacturing capabilities combined with the VendingData direct distribution channel and the RFID enabled casino chip distribution agreement with Elixir is a winning combination. I look forward to serving on the Board as we move the company forward through increased manufacturing capability and new product innovations to be announced very soon."

Dolphin has designed a number of key products for VendingData, including DeckChecker, ChipWasher, DeckSetter, planned for 2007 release and most significantly, the Dolphin High Frequency RFID casino chip, considered the most promising product the company has initiated to date.

Dolphin has developed an expertise in designing and manufacturing casino chips and has become one of the largest international suppliers of chips to casinos. Current industry estimates project that there will be approximately 10,000 gaming tables using RFID over the next five years, resulting in an estimated market potential for RFID enabled casino chips of approximately $125 million over a five-year time period.