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.