It was a rough first quarter for a lot of online gaming companies based in the UK and Bingo.com was no exception.
ANGUILLA, BRITISH WEST INDIES — (MARKET WIRE) — 05/15/07 — Bingo.com, Ltd. (OTCBB: BNGOF), operator of the World’s largest online bingo hall, today announced its financial results for the first quarter ended March 31, 2007. All amounts are presented in United States dollars and in accordance with United States Generally Accepted Accounting Principles.
“It’s hard to imagine a more difficult business situation than the passing of UIGEA, which caused Bingo.com’s revenue to fall by almost 100%,” said Tarrnie Williams, CEO of Bingo.com. “However, the Company has now completed the conversion of its business from one focused on gaming in the United States, where it is no longer considered legal, to one focused in the United Kingdom, where Internet gaming is welcomed and regulated. This transition presented many challenges: new software; new banking; new payment processors; new currency support; new marketing channels; as well as additional funding to provide sufficient capital to meet unforeseen events as we work to return to profitability. All of these challenges are now behind us and we look forward to growing our business in the UK and, over time, in other legal jurisdictions.”
Bingo.com results of the first quarter of 2007 included:
- Successful completion of a private placement unit offering of $1,500,000
- A net loss of $328,967, compared to the net loss of $336,727 from the fourth quarter of 2006
- Operating cost of $368,833 compared to operating costs of $395,863 in the fourth quarter
Total revenue decreased to $6,300 for the quarter ended March 31, 2007, compared to total revenue of $103,630 for the fourth quarter of 2006, total revenue of $833,543 in the third quarter, and total revenue of $710,011 in the first quarter of 2006. These decreases are due to the passing of the United States Unlawful Internet Gambling Enforcement Act (“UIGEA”), which in response, the Company immediately sold it US based gaming business on October 12, 2006. Since that date the Company has not received any gaming revenue compared to gaming revenue of $821,893 in the third quarter of 2006 and gaming revenue of $593,965 in the first quarter of 2006. The Company earned advertising revenue of $6,300 in the quarter ended March 31, 2007, a decrease compared to advertising revenue of $116,046 in the first quarter of 2006 and advertising revenue of $8,850 in the fourth quarter of 2006. This decrease in advertising revenue is due to Management’s decision, in the first quarter of 2006, to suspend the sale of advertising available to third parties in order to increase the traffic to our own cash bingo Website.
Operating costs before interest, depreciation and amortization expenses decreased to $368,833 in the first quarter of 2007, a decrease of 7% over operating costs of $395,863 in the fourth quarter of 2006 and a decrease of 27% over operating expenses of $505,931 in the first quarter of 2006. The decrease in operating expenses is primarily due to the decrease in the sales and marketing expenses in relation to the gaming operations as a result of the sale of the US based gaming business.
Net loss for the quarter ended March 31, 2007, amounted to $328,967, a decrease of 2% in net loss compared to net loss of $336,727 for the fourth quarter of 2006, and an increase in net loss compared net income of $18,593 in the first quarter in the prior year. This increase in net loss compare to the first quarter of 2006 is due to the decrease in revenue as a result of the sale of the US gaming players.
We had cash of $1,708,159 and working capital of $1,689,192 at March 31, 2007. This compares to cash of $521,203 and working capital of $475,824 at December 31, 2006.
Bingo.com, Ltd. operates the popular web portal www.bingo.com offering online games world wide including multiplayer bingo, video poker, sweepstakes, slot machines, and more. With over 1,750,000 registered players, www.bingo.com is one of the most recognized and most visited Bingo entertainment destinations on the web.
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-KSB, filed with the SEC on April 2, 2007, and the prospectus filed under Rule 424(b) of the Securities Act on March 9, 2005, 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.
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