Bingo.com's transition from advertising to gaming revenue has begun
Anguilla, B.W.I. (PRWEB) September 15, 2005
Bingo.com, Ltd. (OTC BB: BNGOF), operator of the Internet's pre-eminent bingo portal, today announced its financial results for the second quarter ended June 30, 2005. All amounts are presented in United States dollars and in accordance with United States Generally Accepted Accounting Principles.
[Bingo.com highlights of the second quarter 2005 include:
- Bingo.com, Inc. completed a merger with its wholly-owned subsidiary Bingo.com, Ltd. with Bingo.com Ltd. being the surviving corporation.
- Completed a non-brokered private placement offering of 1,339,667 common shares at $0.75 per share which raised gross proceeds of $1,004,750.
- Launched its cash bingo games.
- Completed an asset purchase for the popular cash bingo websites http://www.winabingo.com and http://www.groovybingo.com.
- Revenue of $457,339, an increase of 85% over revenue of $247,752 in the second quarter of 2004 and a 13% increase over revenue of $403,551 in the first quarter of 2005.
- Second quarter profit of $1,522, the fourth consecutive positive quarter
"Bingo.com's transition from advertising to gaming revenue has begun", remarked Tarrnie Williams, the Company's CEO. ÂWhile only accounting for a small percentage of this quarter's revenue, we anticipate strong growth from our gaming operations moving forward as we continue to phase out the advertising portion of our business.Â
The Company had cash of $1,191,682 and working capital of $572,562 at June 30, 2005. This compares to cash of $157,337 and a working capital deficit of ($567,093) at March 31, 2005 and cash of $74,032 and a working capital deficit of ($625,376) at December 31, 2004. This increase in cash and increase in working capital is due to the proceeds from the private placement during the quarter ended June 30, 2005 and improved profitability.
Revenue increased to $457,339 for the quarter ended June 30, 2005, an increase of 85% from revenue of $247,752 for the same period in the prior year and an increase of 13% from revenue of $403,551 in the first quarter of 2005. The majority of the Company's revenue was earned from the sale of advertising on its Web portal, http://www.bingo.com, which continues to experience strong traffic. The Company earned revenue of $43,391 in the quarter from its new cash bingo operations which it launched late in the quarter.
Operating costs, before interest, depreciation and amortization expenses, increased to $334,740 in the second quarter of 2005, an increase of 172% over operating costs of $122,889 for the second quarter in the prior year, and an increase of 26% over operating costs of $265,282 in the first quarter of 2005. The increase in operating costs compared to the second quarter in the prior year is due to a variety of factors including: the costs incurred in the set up, design and operations of the new cash bingo games; an increase in salaries; an increase in legal expenses as a result of merging the Company with its subsidiary in Anguilla, British West Indies and the filing of the Form S-4, Form SB-2 and Form S-8 with the Securities Exchange Commission.
Interest, depreciation and amortization totaled $13,253 for the quarter ended June 30, 2005, compared to interest, depreciation and amortization of $239,559 for the second quarter of 2004, and compared to interest, depreciation and amortization of $8,240 for the first quarter of 2005. The 94% decrease in interest, depreciation and amortization for the second quarter of 2005 compared to the second quarter of 2004 is due to the conversion of both Debenture A and Debenture B into shares of the Company and the write off of the unamortized portion of the Warrant Â Debenture Discount during the year ended December 31, 2004. The 61% increase in interest, depreciation and amortization for the second quarter of 2005 compared to the first quarter of 2005 is due to the acquisition of equipment for the hosting of the new cash bingo games.
Net profit for the quarter ended June 30, 2005, amounted to $1,522, a significant improvement over the net loss of ($137,168) for the second quarter in the prior year and a 95% decrease in net profit compared to net profit of $32,209 for the first quarter of 2005. The increase in net profit compared to the second quarter of 2004 is due to the increase in revenue. The decrease in net profit compared to the first quarter of 2005, is due to an increase in costs including: legal expenses for merging the Company with its subsidiary in Anguilla, British West Indies; filing of the Form S-4, Form SB-2 and Form S-8 with the Securities Exchange Commission; and the costs incurred in the set up, design and operations of the new cash bingo games.
Bingo.com, Ltd. operates the popular web portal http://www.bingo.com offering free and cash games including multiplayer bingo, video poker, sweepstakes, slot machines, and more. With over 1,200,000 registered users and more than 800 new users everyday, http://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 Âsafe harborÂ 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 March 21, 2005, 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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