December 18, 2000
Bingo.com Announces Plan to Merge with Lottery.com
Transaction Offers Multi-Site Cross-Marketing and Co-Branding Opportunities; Creates Strong Platform for Proposed Online Lottery Ticket Sales
MARINA DEL REY, Calif., Dec. 18 /PRNewswire/ — Bingo.com, Inc. (OTC Bulletin Board: BIGR) and The Lottery Channel Inc. (LCI) jointly announced that they have entered into a letter of intent proposing the acquisition by Bingo.com of LCI. LCI is a privately held company (in which NBC owns a minority interest) that currently operates Lottery.com (lottery information & entertainment site), GameLand.com (Shockwave game developer & entertainment site), WaveGames.com (customer retention game developer) DollarBill.com (contest/sweepstakes site).
The proposed transaction structure will see LCI merged into a Bingo.com, Inc. subsidiary. As currently contemplated, at the closing, the shareholders of LCI would be issued approximately 14.5 million shares of common stock of Bingo.com so that they would own approximately 58% of Bingo.com’s outstanding shares calculated on a post-closing basis. In addition, the shareholders of LCI would receive warrants entitling them to purchase up to an additional 14.5 million shares of common stock of Bingo.com at $2.00 per share.
The companies believe the potential benefits of the transaction include:
- Opportunities for cross marketing and co-branding for their current Web sites as well as their other business operations, including Internet entertainment properties now under development.
- A $3+ million cash position at the closing of the merger.
- Enable Bingo.com to participate in Lottery.com’s proposed expansion into online lottery ticket sales through LCI’s custom designed Oracle (ORCL) software.
- Additional acquisition opportunities of complimentary firms.
- Combining of single and multi-player games, both wireless and mobile, which the companies will use to further increase traffic and therefore the combined databases of Bingo.com, Lottery.com, GameLand.com and DollarBill.com and keep them there.
Shane Murphy, CEO of Bingo.com, said, “We believe that our two companies complement one another in many respects and this proposed transaction would position us to serve the broad spectrum of Internet games, whether it be directly serving the consumer or through B2B applications. We believe that this transaction will better enable us to cross-market our Bingo.com site with LCI’s entertainment properties that share our demographic profile.”
“Our revenue streams include advertising as well as licensing games to others. We hope to package multiple company sites for advertising and co-branding, and to broaden our scope by gaining access to LCI’s valuable customer databases and development contracts. With the additional potential for generating revenues through proposed online lottery ticket sales, we believe this is an ideal strategic move to leverage and expand our business model.”
LCI’s Chairman and CEO Roger W. Ach II added, “By joining forces with Bingo.com we hope to build a business with a solid track record of generating Web traffic, leading edge proprietary technology, a world class management team and the financial resources of a publicly traded company. I believe that the combined entities will have an opportunity to build a much larger and more profitable company serving consumers, corporate enterprises, the entertainment industry, and the lottery industry.”
The companies intend that following the closing of the transaction Roger Ach would serve as Chairman and CEO of Bingo.com, Inc. and Shane Murphy would serve as President.
Bingo.com — recently ranked as the “Stickiest Site on the Web” for the month of September by Media Metrix — operates a Web site offering free casino-style games and, in addition, is an application service provider (ASP). The company’s game offerings include multiplayer bingo, video poker, concentration games, sweepstakes and slot machines. Bingo.com also offers affinity programs that provide users the opportunity to convert online winnings into cash and prizes.
Additionally, for the months July through September, Nielsen//NetRatings reported that Bingo.com’s average monthly aggregate user session was approximately nine hours — nearly twice that of the next highest ranked Web site. The average individual user session at Bingo.com was more than one hour, while the average user session on 99% of Internet sites is a matter of minutes.
The Lottery.com Web site provides winning numbers from state lotteries, streaming video of Powerball drawings, other lottery information and a variety of games. The company also operates GameLand.com, a site offering free games and contests as well as custom game development for Web companies, and WaveGames.com, a company that specializes in building games to help radio and television-broadcasting stations retain visitors to their Web sites. Lottery.com Inc. recently introduced DollarBill.com; a site offering visitors the chance to win money based on the serial numbers of the dollar bills in their wallets.
LCI recently partnered with Oracle to develop the technology for selling lottery tickets online and is currently negotiating to deliver the service for a number of lottery jurisdictions. When these services are approved, LCI believes that it is well positioned to become a leading provider of both software and direct to consumer systems under the supervision of State Lottery commissions.