iltsform10ksbafy2008.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-KSB/A

AMENDMENT NO. 1

FORM 10-KSB

(Mark One)

x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended April 30, 2008

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________to ___________

Commission file number 0-10294

INTERNATIONAL LOTTERY & TOTALIZATOR SYSTEMS, INC.

(Name of small business issuer in its charter)

California	95-3276269
(State or other jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

2310 Cousteau Court

Vista, California

(Address of Principal Executive Offices)

92081-8346

(Zip Code)

(760) 598-1655

(Issuer’s Telephone Number)

Securities registered pursuant to Section 12(g) of the Exchange Act:

Common Shares, no par value

(Title of Class)

Check whether the issuer is not required to file reports pursuant to Section 13 or 15 (d) of the Exchange Act. o

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes o No x

Revenues for the year ended April 30, 2008 were $13,025,375.

Aggregate market value of voting stock held by non-affiliates of the Registrant as of August 4, 2008 was approximately $2,007,548.

Number of common shares outstanding at August 4, 2008 was 12,962,999.

DOCUMENTS INCORPORATED BY REFERENCE

None.

Transitional Small Business Disclosure Format Yes o No x

TABLE OF CONTENTS PART III

ITEMS 9 AND 11.	DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERNANCE AND SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	4
ITEM 10.	EXECUTIVE COMPENSATION	7
ITEM 12.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE	9
ITEM 13.	EXHIBITS	10
ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	11
	SIGNATURES EXHIBIT 31 EXHIBIT 32

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PART III

The terms “ILTS,” “the Company,” “we,” “our,” and “us” refer to International Lottery & Totalizator Systems, Inc. and its consolidated subsidiaries, unless otherwise specified.

Pursuant to General Instruction E(3) of Form 10-KSB, the information required in Part III, which is not contained in the Company’s Form 10-KSB filed on July 14, 2008, is herein provided in this Amendment No. 1 as follows:

ITEM 9 AND ITEM 11	DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERNANCE AND SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The Board presently consists of the following six directors: Theodore A. Johnson, Chan Kien Sing, Martin J. O’Meara, Jr., Alain K. Lee, Ooi Lee Meng and Rayvin Yeong Sheik Tan. There is one vacant board seat. The current directors will serve until the next Annual Meeting of Shareholders and until their respective successors have been duly elected and qualified.

The following table sets forth certain information regarding the beneficial ownership of the Company’s common shares as of July 31, 2008 by:

(i)	each director of the Company;

(ii)	each executive officer;

(iii)

the executive officers and directors of the Company as a group; and

(iv)	each person or entity who is a beneficial owner of more than 5% of the Company’s outstanding common shares.

With respect to each director of the Company, the table also sets forth his age, the year he was first elected as a director, employment history for the past five years, and other directorships. With respect to the executive officers who are not directors, the table sets forth their age, position with the Company, and employment history for the past five years. Beneficial ownership of securities is defined in accordance with the rules of the Securities and Exchange Commission and means generally the power to vote or exercise investment discretion with respect to securities, regardless of any economic interests therein. Except as otherwise indicated, the Company believes that the beneficial owners of the securities listed below have sole investment and voting power with respect to such shares, subject to community property laws where applicable.

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Title of Class

Name of Directors, Executive Officers and Beneficial Owners

Shares of Common Stock

Number

Percent of Class

Common Stock

Theodore A. Johnson, 68, has been Chairman of the Board since 1994. He served as Director from 1979 to 1993. He has been President and Chief Executive Officer of TJ Ventures, Inc., a venture capital company since 1992. Mr. Johnson also holds directorships in other private corporations, including a venture capital company.

18,606

Chan Kien Sing, 52, has been Director since 1993. He also serves as Executive Director of Berjaya Group Berhad, a Malaysian holding company since July 1993. He is also an Executive Director of Berjaya Corporation Berhad and Berjaya Sports Toto Berhad, a Director of Berjaya Lottery Management H.K. Limited (“BLM”) and holds directorships in several other subsidiaries in the Berjaya Corporation group of companies.

(b)

Common Stock

Martin J. O’Meara, Jr., 79, has been Director since 1979. He has been serving as President of The Budget Plan, Inc., a privately owned company engaged in the consumer loan business for over five years.

111,442

Alain K. Lee, 52, has been Director since 1999. Presently, Mr. Lee serves as consultant. He served as Executive Vice President and Director of Roadhouse Grill, Inc. from 1998 to 2007.

(b)

Ooi Lee Meng, 47, has been Director since January 2006. He has been serving as Executive Director of Ascot Sports Sdn Bhd and Senior General Manager (Business Development) of Sports Toto Malaysia Sdn Bhd, a related company of ILTS since October 2005. He holds directorships in several other subsidiaries in the Berjaya group of companies. Previously, Mr. Ooi served as Executive Vice President of ILTS from September 2002 to April 2005.

(b)

Mr. Rayvin Yeong Sheik Tan, 29, was appointed as Director on July 15, 2008. He serves as an Executive Director of the Board of Berjaya Corporation Berhad, a diversified business entity based in Kuala Lumpur, Malaysia, since September 2005. Mr. Tan joined the Berjaya Group of Companies in May 2001 as Senior Manager (Corporate Affairs) of Kota Raya Development Sdn Bhd and Noble Circle Management Sdn Bhd. Presently, he is also a Director of Berjaya Lottery Management (HK) Limited and an Executive Director of Berjaya Sports Toto Berhad. In addition, Mr. Tan holds directorships in several other subsidiaries in the Berjaya Corporation group of companies.

(b)

Common Stock

Jeffrey M. Johnson, 47, was appointed President effective January 2007. Prior to that, he served as Director of Technical Operations and held various other positions in the Technical Operations capacity at ILTS for over 20 years.

22,316

(a)

T. Linh Nguyen, 39, was appointed Chief Financial Officer since January 2007 and Corporate Secretary since July 2006. She served as Director of Finance and held various finance and accounting positions at ILTS since November 1999.

All directors and executive officers as a group (8 persons)

152,364

(a)

1.18

Berjaya Lottery Management H.K. Limited, a subsidiary of Berjaya Sports Toto Berhad.

9,245,317

(b)

71.32

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(a)	Includes 20,666 common shares issuable upon exercise of outstanding stock options. All outstanding options are immediately exercisable by Mr. Jeffrey M. Johnson.

(b)	Employees of affiliates of BLM. All four individuals disclaim beneficial ownership of such shares.

BLM’s correspondence address is:

Level 12 (East Wing)

Berjaya Times Square

No.1, Jalan Imbi

55100 Kuala Lumpur, Malaysia.

*Less than one percent of the outstanding common shares.

Audit Committee Financial Expert

The Board of Directors has an Audit Committee consisting of Messrs. Johnson, O’Meara, Jr. and Lee. The Audit Committee held four meetings during the year. Mr. Lee, an employee of an affiliate of BLM, may not be considered to be an independent member of the Audit Committee under the Securities and Exchange Commission applicable rules relating to audit committees.

The responsibilities of the Audit Committee include the appointment, compensation, retention and oversight of any independent registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services. The Committee reviews with such auditors the periodic SEC filings, the scope and result of their audit and the result of the auditors’ evaluation of internal controls.

The Board of Directors has determined that the Audit Committee does not have an “audit committee financial expert” as defined by the strict definition contained in Item 401(e) of Regulation S-B. Although all of the committee members are financially literate and are highly qualified to assess the performance of companies, their expertise was not gained in the manner specified by the Securities and Exchange Commission in Item 401. Nonetheless, the Board of Directors is confident the Committee members are qualified by virtue of their experience as directors, advisors, and executive officers in other organizations to perform the oversight role required by their positions at ILTS.

Code of Ethics

The Company has adopted a Code of Ethics for Officers and Senior Financial Staff which was filed as an Exhibit to the Company’s 10-KSB for the year ended April 30, 2004. This policy meets the requirements of a “code of ethics” as defined by Item 406 of Regulation S-B. Shareholders may obtain a copy by writing to the Company: Attention: Corporate Secretary, 2310 Cousteau Court, Vista, CA 92081.

Shareholder Communications

The Company has a procedure by which shareholders can communicate with Board members. Shareholders may communicate with the Board by writing to the Chairman of the Board or individual Board members as follows: International Lottery & Totalizator Systems, Inc., Attention: Corporate Secretary, 2310 Cousteau Court, Vista, CA 92081. The Corporate Secretary will forward any shareholder communications as requested by the shareholder.

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Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our officers and directors, and persons who own more than 10% of a registered class of our equity securities, to file reports of ownership and changes in ownership of our equity securities with the Securities and Exchange Commission. Officers, directors and greater than 10% shareholders are required by the Securities and Exchange Commission regulations to furnish us with copies of all Section 16(a) filings. For the period covered by this Annual Report, we were in compliance with Section 16(a) of the Securities Exchange Act of 1934.

During the fiscal year ended April 30, 2008, the following individuals filed late reports on Form 3 for the respective prior fiscal years:

Name and Office		Fiscal Year in Which Form 3 Filings Were Applicable to

Ooi Lee Meng		April 30, 2006
Director
Jeffrey M. Johnson		April 30, 2007
President

T. Linh Nguyen		April 30, 2007
Chief Financial Officer
and Corporate Secretary

Securities Authorized for Issuance Under Equity Compensation Plans

See item 5 of the Company’s Form 10-KSB for the fiscal year ended April 30, 2008.

ITEM 10

EXECUTIVE COMPENSATION

The following table sets forth, for the fiscal years ended April 30, 2008, April 30, 2007 and April 30, 2006, the compensation earned by the Chief Executive Officer and the only executive officer of the Company earning in excess of $100,000 during such years (the “Named Executive Officers”).

Summary Compensation Table

														Non-Equity			Non-Qualified
														Incentive			Deferred
								Stock Awards			Option Awards			Plan			Compensation			All Other
Name And		Salary			Bonus			Stock Awards			Option Awards			Compensation			Earnings			Compensation					Total
Principal Position	Year	($)			($)			($)			($)			($)			($)			($)					($)

Jeffrey M. Johnson	2008		$	130,000		$	-		$	-		$	-		$	-		$	-		$	8,405	(1	)		$	138,405
President	2007			118,332			12,000			-			-			-			-			2,800	(1	)			133,132
	2006			100,405			-			-			-			-			-			-					100,405

T. Linh Nguyen	2008		$	110,000		$	-		$	-		$	-		$	-		$	-		$	-				$	110,000
Chief Financial Officer	2007			96,665			10,000			-			-			-			-			-					106,665
and Corporate Secretary	2006			81,667			-			-			-			-			-			-					81,667

_____________________________

There have been no Company matching contributions to the employee 401(k) plan or other Long Term Compensation Awards since 1998.

There have been no stock options or stock appreciation rights granted to executive officers since 1999.

(1) Other compensations of $8,405 and $2,800 represent car allowance perquisites which did not exceed the lesser of $50,000 or 10% of the total annual salary and bonus for any such officer.

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Options Exercise During Fiscal Year Ended April 30, 2008

	Option Awards

Name	Number of Shares Acquired on Exercise	Value Realized on Exercise		Number of securities underlying unexercised options exercisable	Number of securities underlying unexercised options unexercisable

	(#)	($)		(#)		(#)
Jeffrey M. Johnson	-		-	-		-
T. Linh Nguyen	-		-	-		-

Outstanding Equity Awards as of April 30, 2008

	Option awards									Stock awards
Name	Number of securities underlying unexercised options exercisable		Number of securities underlying unexercised options unexercisable		Equity incentive plan awards: Number of securities underlying unexercised unearned options		Option exercise price		Option expiration date	Number of shares or units of stock that have not vested		Market value of shares of units of stock that have not vested		Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested		Equity incentive plan awards: Market or payout value of unearned shares, units or others rights that have not vested



		(#)		(#)		(#)	($)				(#)	($)		(#)		($)
Jeffrey M. Johnson		20,666		-		-	$	1.00	10/22/2009		-		-		-		-
T. Linh Nguyen		-		-		-		-	n/a		-		-		-		-

The Company does not have any employment agreements or change in control arrangements with its executive officers.

Compensation of Directors

The following table summarizes the compensation earned by directors for the year ended April 30, 2008.

													Change in
													Pension Value
													and
	Fees									Non-Equity			Nonqualified
	Earned									Incentive			Deferred
	or Paid			Stock			Option			Plan			Compensation			All Other
	in Cash			Awards			Awards			Compensation			Earnings			Compensation
Name	($)			($)			($)			($)			($)			($)

Theodore A. Johnson		$	7,000		$	—		$	—		$	—		$	—		$	—
Chan Kien Sing		$	—		$	—		$	—		$	—		$	—		$	—
Martin J. O'Meara, Jr.		$	6,000		$	—		$	—		$	—		$	—		$	—
Alain K. Lee		$	—		$	—		$	—		$	—		$	—		$	—
Ooi Lee Meng		$	—		$	—		$	—		$	—		$	—		$	—
Rayvin Yeong Sheik Tan		$	—		$	—		$	—		$	—		$	—		$	—

During the fiscal year ended April 30, 2008, each Director who is not an employee of the Company or its Parent company, BLM, received an annual retainer fee of $4,000 and a fee of $500 for each Board meeting attended. In addition, each committee’s Chairman, who is not an employee of the Company or its Parent company, BLM, received an annual retainer of $1,000 for services as Chairman of such committee. All Directors are reimbursed for reasonable out-of-pocket expenses incurred for travel and attendance for Board meetings.

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ITEM 12

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

See Footnote 5 to the Company’s Financial Statements contained in Item 7 of the Company’s Form 10-KSB for the fiscal year ended April 30, 2008.

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ITEM 13		EXHIBITS
A.	Exhibits

(3) (a) Articles of Incorporation, as amended September 13, 1994, reflecting corporate name change, and as amended January 7, 1998, reflecting authorization for 20 million shares of preferred stock and By-laws (incorporated by reference to Form 10-KSB for the year ended December 31, 1994, File No. 0-10294).

(b) Articles of Incorporation as amended June 2, 1998, reflecting the three-for-one reverse stock split (incorporated by reference to Form 10-KSB for the year ended December 31, 1998, File No. 0-10294).

(c) Articles of Incorporation as amended June 2, 1998, reflecting maximum indemnification for directors permitted by California law (incorporated by reference to Form 10-KSB for the year ended December 31, 1998, File No. 0-10294).

(d) A By-law effective June 2, 1998, amendment relating to officers and directors indemnification and number of directors (incorporated by reference to Form 10-KSB for the year ended December 31, 1998, File No. 0-10294).

(10) (a) Fourth Amendment to Lease for the Registrant's facility in Carlsbad, California dated August 11, 1999 (incorporated by reference to Form 10-KSB for the year ended December 31, 2000, File No. 0-10294.)

(b) The Registrant's 1990 Stock Incentive Plan (incorporated by reference to Form 10-KSB for the year ended December 31, 1990, File No. 0-10294 and File No. 33-79938).

(c) The Registrant's 1997 Directors' Stock Option Plan (incorporated by reference to Form 10-KSB for the year ended December 31, 1998, File No. 0-10294).

(d) Stock Purchase Agreement dated as of September 8, 1999 between ILTS and BLM which increased Berjaya's stock ownership from 38.5% to 71.4% (incorporated by reference from ILTS's Form 8-K filed on October 18, 1999).

(e) ILTS's Equity Participation Plan, approved by the shareholders on June 22, 2000 (incorporated by reference to Form 10-KSB for the year ended December 31, 2000, File No. 0-10294).

(14) Code Of Ethics for Officers and Senior Financial Staff (incorporated by reference to Form10-KSB for the year ended April 30, 2004, File No. 0-10294)

(21) Subsidiaries of the Registrant. *

(23.1) Consent of J.H. Cohn LLP, Independent Registered Public Accounting Firm. *

(31) Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

(32) Certification Pursuant to 18 United States Code Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

* Filed as exhibit to International Lottery & Totalizator Systems, Inc.’s Annual Report on Form 10-KSB for the year ended April 30, 2008, filed July 14, 2008.

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ITEM 14

PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table sets forth the approximate aggregate fees billed for each of the last two fiscal years for professional services rendered by our principal accountant. J.H. Cohn LLP was the principal accountant for the years ended April 30, 2008 and 2007.

	Fiscal Year		Fiscal Year
	Ended		Ended
	April 30, 2008		April 30, 2007

Audit Fees	$	123,000	$	125,000
Audit Related Fees (a)		14,000		10,000
Tax Fees (b)		18,000		9,000
All Other fees		-		-
	$	155,000	$	144,000

(a) Fees in the amount of $14,000 and $10,000 in fiscal 2008 and 2007, respectively, primarily related to the review of the financial information requested by the Parent company’s principal accountant.

(b) Fees in the amount of $18,000 and $9,000 in fiscal 2008 and 2007, respectively, related to professional services rendered for tax compliance.

The responsibilities of the Audit Committee include the appointment, compensation, retention and oversight of any registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services. The Committee reviews with such auditors the periodic SEC filings, the scope and result of their audit and the result of the auditors’ evaluation of internal controls. During fiscal 2008 and 2007, all services were pre-approved by the Audit Committee. The Chairman of the Audit Committee reviews and approves all engagement services provided by the Company’s principal accountant.

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

August 5, 2008

By:

International Lottery & Totalizator Systems, Inc.

/s/ Jeffrey M. Johnson

Jeffrey M. Johnson

President

/s/ T. Linh Nguyen

T. Linh Nguyen

Chief Financial Officer and Corporate Secretary

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date

/s/ Theodore A. Johnson	Chairman of the Board	August 5, 2008
Theodore A. Johnson


/s/ Martin J. O’Meara, Jr.	Director	August 5, 2008
Martin J. O’Meara, Jr.


/s/ Chan Kien Sing	Director	August 5, 2008
Chan Kien Sing


/s/ Alain K. Lee	Director	August 5, 2008
Alain K. Lee


/s/ Ooi Lee Meng	Director	August 5, 2008
Ooi Lee Meng
/s/ Rayvin Yeong Sheik Tan Rayvin Yeong Sheik Tan	Director	August 5, 2008