ANGUILLA, BRITISH
WEST INDIES -- (MARKET WIRE) -- 08/13/10 -- Bingo.com, Ltd. (OTCBB:
BNGOF), owner of the popular online gaming community
http://www.bingo.com, today announced its unaudited financial
results for the second quarter ended June 30, 2010. All amounts are
presented in United States dollars and in accordance with United
States Generally Accepted Accounting Principles.
Recent Bingo.com highlights included:
-- Net loss of $27,977 in the second quarter of 2010 compared to net loss
of $266,702 in the second quarter of the prior year and a net loss of
$344,806 in the first quarter of 2010.
-- Migrated our players onto the Unibet Partner Program to participate in
their network bingo and casino program.
-- Closed a $2,250,000 investment from Unibet for 25.9% of Bingo.com.
-- Sold two redundant subsidiaries for $250,000.
"The second quarter of 2010 was an eventful quarter for
Bingo.com," said Tarrnie Williams, the Company's CEO. "Bingo.com
secured an equity investment of $2,250,000 from Unibet thereby
significantly strengthening the balance sheet and ensuring
sufficient capital to meet our revised business plan for the next
few years. In addition, Bingo.com sold two subsidiaries, no longer
required for the revised business plan, for $250,000, recording a
profit of $177,832 on their sale."
"The first step in the plan, the migration of Bingo.com's gaming
operation to the Unibet partner platform, was completed on May
12th. While the transition was technically smooth, the migration of
players from one platform to another is a delicate task as players
are generally resistant to change. In particular, as we were
previously operating almost exclusively in the competitive UK
market, our players had become accustomed to a high level of
promotional bonuses and scheduled bingo jackpots, which were not
part of the new offering. These factors contributed to a far
greater loss of gaming activity as a result of the migration than
we had anticipated, and thus our current gaming revenue is
significantly down since the transition, and will most likely
remain down for at least the next two quarters. We are working
closely with Unibet to make changes and to ensure that Bingo.com is
well positioned to take advantage of both our existing traffic, as
well as to prepare for a global marketing initiative targeting new
players from the many new countries available to us."
"We are pleased that our loss is considerably reduced, however
we will continue to suffer losses for the next few quarters, until
our revised business plan is fully operational," said Mr. Williams.
"Despite the large drop in revenue, we continue to believe the
platform change to the Unibet system to be the correct decision. We
are now able to exploit the multi currency and multi language
platform strategy we have been striving to achieve for the past few
years and can now take advantage of the Bingo.com URL's ability to
register and convert players across a broad worldwide audience. In
fact, since joining the Unibet platform, over 50% of our gaming
revenues, albeit significantly reduced, have come from outside the
UK market (where previously over 95% of our activity had occurred).
Over the next few quarters, as continuing changes to increase the
competitiveness of the system are being implemented by Unibet, we
are preparing a marketing campaign and materials and are
determining our optimum initial global placement opportunities. We
expect to begin aggressively promoting the Bingo.com brand and
products over a variety of traditional media beginning early in the
new year."
"Additionally, subsequent to the end of the second quarter, we
received a professional independent valuation of $1.4 to $1.6
million for the remaining 4% Domain Name Purchase payments for the
probable repurchase of this asset by the Company."
Total revenue decreased to $368,932 for the quarter ended June
30, 2010, a decrease of 76% from revenue of $1,512,116 for second
quarter of 2009 and a decrease of 71% from revenue of $1,254,792 in
the first quarter of 2010. Gaming Revenue decreased to $348,428, a
decreased of 76% in the quarter ended June 30, 2010, compared
Gaming Revenue of $1,460,149 in the second quarter of 2009 and a
71% decrease from revenue of $1,209,269 in the first quarter of
2010. During the quarter ended June 30, 2010, we migrated our
Bingo.com players to the Unibet partner program. The decrease
compared to the second quarter of 2009 and the first quarter of
2010, is due to a decrease in cash game play, especially as a
result of a second platform change within six months. We earned
advertising revenue of $20,504 in the quarter ended June 30, 2010,
a decrease of 61% from advertising revenue of $51,967 in the second
quarter of 2009 and a decrease of 55% from advertising revenue of
$45,523 in the first quarter of 2010. During the quarter ended
March 31, 2010 the Company suspended sales of new advertising.
We recorded cost of producing revenue of $309,931 during the
quarter ended June 30, 2010, a decrease of 67% compared to costs of
$951,954 for the second quarter of 2009 and a decrease of 64% over
costs of $857,402 in the first quarter of 2010. Cost of producing
revenue consists of bonuses granted on deposits made by players,
the cost of hosting the website, payment processing fees in
relation to deposits from and withdrawals to our players, software
license fees, and the domain name purchase payments. The decrease
in cost of producing revenue for the quarter ended June 30, 2010,
compared to the second quarter of 2009 and the first quarter of
2010, is due to the migration to the Unibet partner program,
whereby the cost of most bonuses, hosting the website, payment
processing fees, software license fees and other expenses are
incurred by Unibet International Limited in exchange for a
commission on the white label revenue payment.
Operating costs before interest, depreciation and amortization
expenses, including sales and marketing and general and
administrative expenses decreased to $411,249 in the second quarter
of 2010, a decrease of 51% over operating expenses of $840,160 in
the second quarter of 2009 and a decrease of 43% over operating
costs of $719,373 in the first quarter of 2010. The decrease in
operating expenses compared to the second quarter of 2009 and the
first quarter of 2010, is due a decrease in sales and marketing
expenses, particularly marketing bonuses granted to players, as a
result of migrating to the Unibet partner program where
significantly lower bonuses are granted to players.
Sales and marketing expenses decreased by 93% to $33,630 for the
quarter ended June 30, 2010, a decrease over expenses of $455,501
in the second quarter of 2010 and a decrease of 89% from expenses
of $314,087 in the first quarter of 2010. Sales and marketing
expenses principally include costs for signup bonuses, marketing,
prizes for our players and other bonuses and incentives offered to
gaming players. The decrease in sales and marketing expenses for
the quarter ended June 30, 2010, compared to the second quarter of
2009 and the first quarter of 2010, is due to migration to the
Unibet partner program where significantly lower marketing bonus
are granted to players.
General and administrative expenses consist primarily of
premises costs for our office, legal and professional fees, and
other general corporate and office expenses. General and
administrative expenses decreased to $87,130 for the second quarter
of 2010, a decrease of 45% from costs of $157,048 for the second
quarter of 2009 and a decrease of 36% from costs of $136,806 in the
first quarter of 2010. The decrease in general and administrative
expenses for the quarter ended June 30, 2010, compared to the
second quarter of 2009 and the first quarter of 2010, is due to
migration to the Unibet partner program whereby we have reduced
many of our costs, especially the development of the bingo.com
website.
During the quarter ended June 30, 2010, we sold the subsidiaries
Bingo,com Services Limited and Bingo.com Operations Limited for
$250,000 and recorded a profit on the sale of these subsidiaries of
$177,832.
During the quarter ended June 30, 2010, we reversed a provision
of $193,051 for progressive jackpots from old jackpot games from
our previous gaming system, which was discontinued in January
2010.
Net loss for the three months ended June 30, 2010, amounted to
$27,977, a loss of $0.00 per share, a decrease in net loss of 90%
compared to a net loss of $266,702, a loss of $0.01 per share for
the same period in 2009 and a decrease in net loss of 92% compared
to a net loss of $344,806 or $0.01 per share in the first quarter
of 2010. The decrease in net loss for the quarter ended June 30,
2010, compared to the second quarter of 2009 and the first quarter
of 2010, is due to the reduction in expenses as a result of
migrating to the Unibet partner platform, the reversal of the
progressive jackpot provision and the profit from the sale of the
subsidiaries Bingo.com Services Limited and Bingo.com Operations
Limited.
We had cash of $2,227,660 and a working capital of $2,140,934 at
June 30, 2010. This compares to cash of $557,251 and a negative
working capital of $19,801 at December 31, 2009.
Subsequent to the quarter ended June 30, 2010, the Company
engaged an independent valuation company, Evans & Evans, Inc.
to value the remaining 4% Domain Name Purchase payments, for the
option of acquiring the 4% Domain Name Purchase payments. Evans
& Evans Inc. concluded the valuation of the 4% Domain Name
purchase payments is between $1.4 and $1.6 million.
For full details of the Company's operations and financial
results, please refer to the Securities and Exchange Commission
website at www.sec.gov or the Bingo.com website at
http://www.bingo.com.
About Bingo.com
Bingo.com, Ltd. (OTCBB: BNGOF) is the parent company of the
Bingo.com group of companies which own the popular online gaming
community http://www.bingo.com. The Bingo.com website offers
multiplayer bingo, slot machines, sweepstakes, and more. Players
come together from around the world to chat, share, play and win at
Bingo.com. With over 1,990,000 registered users
http://www.bingo.com is one of the most recognized and most visited
bingo entertainment destinations on the Internet.
The Private Securities Litigation Reform Act of 1995 provides a
"safe harbor" for forward-looking statements. Certain information
included in this press release (as well as information included in
oral statements or other written statements made or to be made by
the company) contains statements that are forward-looking, such as
statements relating to anticipated future success of the company.
Such forward-looking information involves important risks and
uncertainties that could significantly affect anticipated results
in the future and, accordingly, such results may differ materially
from those expressed in any forward-looking statements made by or
on behalf of the company. For a description of additional risks and
uncertainties, please refer to the company's filings with the
Securities and Exchange Commission. Specifically, readers should
read the Company's Annual Report on Form 10-K, filed with the SEC
on March 31, 2010, and the prospectus filed under Rule 424(b) of
the Securities Act on March 9, 2005 and the SB2 filed July 17,
2007, for a more thorough discussion of the Company's financial
position and results of operations, together with a detailed
discussion of the risk factors involved in an investment in
Bingo.com, Ltd.
Contacts:
Bingo.com, Ltd.
Henry Bromley
CFO
(264) 461-2646
(264) 498-3805 (FAX)
ir@bingo.com
www.bingo.com