Bingo.com Inc (fka BIGR)

[RevDew1]

Net cash used by financing activities was $28,549 for the nine months ended September 30, 2004, and $32,247 for the year ended December 31, 2003, which compares to cash provided of $373,091 in the year ended December 31. 2002. This decrease in net cash used by financing activities in the nine months ended September 30, 2004, is due to the final repayment of capital leases in 2003. The increase in cash used by financing activities in the year ended December 31, 2003, compared to the year ended December 31, 2002, is due to the raising of $295,000 under debentures in 2002. In addition, in 2002, our President and CEO, T.M. Williams and a company owned by him lent $151,750 to the Company.

The Company used cash of $54,184 for the nine months ended September 30, 2004, compared to using cash of $7,138 in investing activities in the year ended December 31, 2003, compared to using cash of $271,449 in the year ended December 31, 2002. In the nine months ended September 30, 2004, cash of $9,184 (year ended December 31, 2003 - $7,138 and year ended December 31, 2002 - $84,263) was invested in the capital assets. For the nine months ended September 30, 2004, the Company had invested $45,000 in the acquisition of the email list in accordance with the settlement with Roger Ach and Lottery.com. During the year ended December 31, 2002, $184,772 was invested in the minimum guaranteed domain name purchase payments of the domain name rights in accordance with the agreement. There were no payments in the nine months ended September 30, 2004, nor the year ended December 31, 2003. The Company during the year ended December 31, 2002, acquired Bingo.com (UK) plc. for $61,440. The Company deemed it in the best interest of the Company to acquire a subsidiary registered in the United Kingdom for the purpose of establishing a company in the United Kingdom for future expansion.

Our future capital requirements will depend on a number of factors, including costs associated with development of our Web portal, the success and acceptance of our new games and the possible acquisition of complementary businesses, products and technologies. We may not have sufficient cash on hand to conduct our operations through 2005. Although our cash flow is improving, we may need to obtain additional financing to grow our operations for the duration of 2005.

There can be no assurances that additional capital will be available when we need it on terms that we consider acceptable. The auditors' report on the Company's December 31, 2003, consolidated financial statements contains an explanatory paragraph that states that the Company has suffered losses and negative cash flows from operations that raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Audit Committee

The Company's audit committee is the Board of Directors. The audit committee met with the independent auditors on March 25, 2004, and approved the financials statements for the year ended December 31, 2003.

Quantitative and Quantitative Disclosures About Market Risk

As of September 30, 2004, the Company had not entered into or acquired financial instruments that have material market risk. The Company has no financial instruments for trading purposes,

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or derivative or other financial instruments with off balance sheet risk. All financial liabilities are due within the next twelve months and are classified as current liabilities in the consolidated balance sheet included in this information statement/prospectus.

The Company is exposed to foreign currency exchange risk due to the fact that the Company has operations in Canada and the United Kingdom. To date, the Company has not entered into foreign currency contracts to hedge against foreign currency risks between the Canadian dollar, British Pound Sterling or other foreign currencies and our reporting currency, the United States dollar.

INFORMATION ABOUT BINGO ANGUILLA
Bingo Anguilla was incorporated under the laws of Anguilla, British West Indies on September 30, 2004. Bingo Anguilla is governed by the International Business Companies Act of Anguilla, B.W.I. Bingo Anguilla was incorporated specifically for the purpose of merging with Bingo Florida to facilitate Bingo Florida's reincorporation in Anguilla, British West Indies. To date, Bingo Anguilla has conducted no business. Bingo Florida has issued 2,000 of its common shares to Bingo Anguilla in consideration for $2,000 cash. The cash received from this initial issuance of shares constitutes the sole assets of Bingo Anguilla. Bingo Anguilla will be the surviving corporation following the merger between Bingo Florida and Bingo Anguilla. Bingo Anguilla will assume all of the assets and liabilities of Bingo Florida upon the effective date of the merger. The current management team, assets, liabilities and business of Bingo Florida will become the management team, assets, liabilities and business of Bingo Anguilla upon the effective date of the merger. The articles and bylaws of Bingo Anguilla are attached as Exhibit 3.5 and 3.6 to this prospectus/information statement.

Bingo Anguilla has only common voting shares authorized. Bingo Anguilla has only 2,000 of its common shares issued and all of these shares are owned by its parent company, Bingo Florida. Bingo Florida has signed a shareholders' resolution as the sole shareholder of Bingo Anguilla authorizing the merger between Bingo Florida and Bingo Anguilla.
C. COMPARISON OF STOCKHOLDER RIGHTS
General

Bingo Florida is a corporation organized under the laws of the State of Florida and is subject to the laws of the Florida Business Corporation Act. Bingo Anguilla is a corporation organized under the laws of Anguilla, British West Indies and is subject to the International Business Companies Act of Anguilla. There are some differences in the certificate of incorporations and bylaws of Bingo Florida and Bingo Anguilla. These differences are discussed below.

The changes that will effect our stockholders as a result of the merger are due to differences between Florida and Anguilla B.W.I. law. We believe that these differences will not result in any material modification of our stockholder's rights, as the laws respecting stockholder's rights in Florida and Anguilla B.W.I are substantially similar in most respects.

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Capitalization

Bingo Anguilla Bingo Anguilla is authorized to issue an unlimited number of shares of common stock. As of February 8, 2005, 2,000 shares of Bingo Anguilla common stock were outstanding.

Bingo Florida Bingo Florida is authorized to issue 50,000,000 shares of common stock. As of February 8, 2005, there were 24,399,086 shares of common stock outstanding.

As of February 8, 2005, there were outstanding warrants to purchase 580,000 shares of common stock at $0.25 per share. In addition, options to purchase 4,325,000 shares of common stock at prices ranging from $0.05 to $0.30 were outstanding under the Bingo Florida corporate stock option plan. Following the merger, all options and warrants of Bingo Florida will become options and warrants of Bingo Anguilla.

Voting Rights

Bingo Anguilla Under the bylaws, each holder of Bingo Anguilla common stock is entitled to one vote for each share and may not cumulate votes for the election of directors.

Bingo Florida Under the bylaws, each holder of Bingo Florida common stock is entitled to one vote for each share and may not cumulate votes for the election of directors.

The bylaws of Bingo Florida and Bingo Anguilla both provide that the holders of shares entitled to one third of the votes at a meeting of shareholders constitutes a quorum for the transaction of business at any regular or special meeting of shareholders.

The Bylaws of Bingo Anguilla require that the Company's share register be kept at its registered office on the island of Anguilla. The bylaws of Bingo Florida require that the Company's share register be kept at its principal executive office or other place within the United States as determined by the board of directors. Following the merger between Bingo Florida and Bingo Anguilla, our company will operate under the International Business Companies Act of Anguilla. The International Business Companies Act of Anguilla provides that any stockholder may in person or by attorney, during normal business hours, inspect and take copies of the Company's share register, books, records and minutes kept by the Company as its corporate records.

Number of Directors

Bingo Florida Bingo Florida's amended articles of incorporation provide that the number of directors of the Company shall not be less than one and subject to such minimum may be increased or decreased from time to time in the manner provided in the Company's bylaws.

Bingo Anguilla Bingo Anguilla's articles of incorporation state that the minimum number of directors is two and maximum number of directors may be seven.

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Election of Directors

Under Florida law, cumulative voting in the election of directors is not made mandatory by statute for any corporation. Cumulative voting may be provided for in the Articles of Incorporation.

Under Florida law, directors may be elected by certain voting groups and may be elected for staggered terms, if provided for in the Articles of Incorporation.

Under the Anguilla International Business Companies Act, cumulative voting in the election of directors is not mandatory for any corporation. Cumulative voting may be provided for in the bylaws.

Removal of Directors

The bylaws of both Bingo Florida and Bingo Anguilla provide that any or all of the directors of the Company may be removed from office at any time with or without cause by the affirmative vote of stockholders holding a majority of the shares entitled to vote at an election of directors.

Under Florida law, shareholders may remove one or more directors with or without cause unless the Articles of Incorporation provide that directors may be removed only for cause. If a director is elected by a voting group of shareholders, only the shareholders of that voting group may participate in the vote to remove him or her.

If cumulative voting is authorized, a director may not be removed if the number of votes sufficient to elect the director under cumulative voting is voted against his or her removal. If cumulate voting is not authorized, a director may be removed only if the number of votes cast to remove the director exceeds the number of votes cast not to remove him or her.

A director may be removed by the shareholders at a meeting of shareholders, provided the notice of the meeting states that the purpose, or one of the purposes, of the meeting is removal of the director.

Under the Anguilla International Business Companies Act, stockholders may remove one or more directors with or without cause unless the bylaws provide that directors may be removed only for cause. A director may be removed by the stockholders at a meeting of stockholders, by an ordinary majority, provided the notice of the meeting states that the purpose or one of the purposes of the meeting is removal of the director.

Filling Vacancies on the Board of Directors

The bylaws of Bingo Florida and Bingo Anguilla contain identical provisions with respect to the filling of vacancies on the board of directors. Vacancies on the board of directors of either Bingo Florida or Bingo Anguilla occurring by reason of death, resignation, removal or disqualification may be filled for the unexpired term by a majority of the remaining directors of the board. Each director elected to fill a casual vacancy shall be a director until such director successor is elected by the stockholders at the next regular or special meeting of stockholders.

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Amendments to Certificate of Incorporation

The bylaws of Bingo Florida and Bingo Anguilla provide that the Certificate of Incorporation of the Company may be amended by an affirmative vote of the holders of at least 50.01% of the outstanding voting shares of the Company.

Amendments to Bylaws

The bylaws of both Bingo Florida and Bingo Anguilla provide that the bylaws may be amended or altered by a vote of the majority of the board of directors at any meeting of the directors.

Under Florida law, a corporation's directors may amend or repeal the by-laws in most circumstances, except where the Articles of Incorporation reserve this power exclusively to the shareholders, or the amendment is to fix a greater quorum or voting requirement for shareholders.

Under the Anguilla International Business Companies Act, the Company's bylaws may be made, amended or repealed by the stockholders of the Company in all instances and by the directors of the Company unless the articles or bylaws provide otherwise.

Action by Written Consent

The bylaws of both Bingo Florida and Bingo Anguilla provide that any action that may be taken at a meeting of the stockholders may be taken without a meeting if done in writing and signed by all of the stockholders entitled to vote on that action.

Notice of Stockholder Actions

The bylaws of both Bingo Florida and Bingo Anguilla provide that all stockholders of the Company shown to be holders of record of voting shares are to receive a notice setting out the time and place of each regular meeting and each special meeting of stockholders by a notice which must be mailed at least 10 days but not more than 60 days prior to the meeting being called. Every notice of special meetings of stockholders must state the purpose or purposes for which the meeting has been called.

Right to Call Special Meeting of Stockholders

The bylaws of both Bingo Florida and Bingo Anguilla provide that special meetings of the stockholders may be held at any time and for any purpose and may be called by the Chief Executive Officer, the Chief Financial Officer, two or more directors or by a stockholder or stockholders holding 10% or more of the voting shares issued by the Company.

Dividends

The bylaws of Bingo Florida and Bingo Anguilla both provide that the board of directors may authorize and cause the companies to issue dividends to the Company's stockholders whenever and in such amounts or forms as in the opinion of the board of directors are deemed advisable.

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Florida law does not permit dividends to be paid if the corporation would not be able to pay its debts as they become due in the usual course of business, or the corporation's total assets would be less than the sum of its total liabilities, plus any amounts that would be needed to satisfy preferential rights that would be superior upon dissolution.

Under the Anguilla International Business Companies Act, a corporation's directors may declare and pay dividends in money, shares or other property. Dividends may only be declared and paid out of surplus. No dividend may be declared and paid unless immediately after payment of the dividend, (a) the Company will continue to satisfy its liabilities as they become due in the ordinary course of its business and (b) the realizable value of the assets of the Company will not be less than the sum of its total liabilities other than deferred taxes as shown in the books of account and its capital.

Liquidation Rights

In the event of liquidation of either Bingo Florida or Bingo Anguilla, the holders of Bingo Florida or Bingo Anguilla common stock shall receive all remaining assets of Bingo Florida or Bingo Anguilla ratably in proportion of the number of shares of common stock held by them.

Loans to Directors

Florida law provides the board of directors, without shareholder approval, to authorize loans to corporate directors and/or officers, where such loan may reasonably be expected to benefit the corporation.

The Anguilla International Business Companies Act does not prohibit loans to corporate directors and/or officers. Technically, the Company's board of directors could authorize loans to corporate directors and/or officers where such loans may be in the best interests of the corporation.

However, Securities and Exchange Commission rules and policies prohibit loans to directors and senior officers of reporting companies. As a practical matter, our company will not authorize the loan of corporate funds to any of our directors and/or officers.

Rights and Options

Florida law does not require shareholder approval of incentive stock option plans pursuant to which rights or options are to be granted to directors, officers or employees of a corporation.

Under the Anguilla International Business Companies Act, stockholder approval is not required for incentive stock option plans pursuant to which rights or options are to be granted to directors, officers and employees of the corporation.

Anguilla law provides that shares cannot be issued in an international business company until the consideration in respect of the share is fully paid and when issued, the share is for all purposes fully paid and non-assessable. Shares may be issued under the International Business Companies Act for money, services rendered, personal property, real property, a promissory note or other binding obligation.

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Florida law provides that shares of stock may be issued for consideration that includes services to be performed and that upon the board of directors determining that such consideration to be received is adequate, the stock may be validly issued, and will be deemed to be fully paid and non-assessable.

Indemnification of Officers and Directors

Generally under Florida law, indemnification is permissible when a director performs his or her duties in good faith, in a manner the director believes to be in the best interests of the corporation and its shareholders and has met the requisite standard of care.

Under the Anguilla International Business Companies Act, an international business company may indemnify any officer or director provided that the person being indemnified has acted honestly and in good faith with a view to the best interests of the Company and in the case of criminal proceedings, the person had no reasonable cause to believe that his conduct was unlawful.

Shareholders' Consent to Action

Under Florida law, unless the corporation's Articles of Incorporation provides otherwise, any action that could be taken at an annual or special meeting of shareholders may be taken without prior notice and without a vote, if a consent in writing setting forth the action to be taken is signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.

Under the Anguilla International Business Companies Act, unless the Company's articles or bylaws provide otherwise, an action that may be taken by stockholders at a meeting of stockholders may also be taken by a resolution of stockholders without prior notice and without a vote. The consent resolution in writing must be signed by the holders of outstanding voting stock having not less than the minimum number of votes that would necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.

Vote Required for Merger

Florida laws require the affirmative vote of a majority of the outstanding shares to authorize a merger. In addition, Florida law permits mergers without the approval of the shareholders of the surviving corporation if the Articles of Incorporation of the surviving corporation will not differ from its articles before the merger and each holder of shares before the merger will hold the same number of shares, with the same rights and restrictions, after the merger.

Under the Anguilla International Business Companies Act, the affirmative vote of a majority of the outstanding voting shares of the Company is required to authorize a merger.

D. VOTING AND MANAGEMENT INFORMATION
We are not asking you for a proxy and you are requested not to send us a proxy.

Under the terms of the Florida Business Corporation Law, the requisite number of stockholders of Bingo Florida has acted by written consent to approve and adopt the merger and the merger

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agreement. Stockholders representing 14,136,689 shares or 58% of our issued voting common shares voted to approve our merger. These written consent actions became effective on October 15, 2004. Accordingly, your approval of the merger and the amendment to our certificate of incorporation is not required and we are not requesting you to vote on these matters. Under applicable Securities and Exchange Commission rules, Bingo Florida may first take corporate action in accordance with the stockholder approval of the merger by written consent 20 days after this information statement/prospectus is first mailed to stockholders.

If you object to the merger, the Florida Business Corporation Act, or FBCA, permits you to seek relief as a dissenting stockholder and have the "fair value" of your shares of Bingo Florida common stock determined by a court and paid to you in cash.

If you are a Bingo Florida stockholder who did not execute the written consent resolution approving the merger and wish to dissent to the merger, you must deliver to Bingo Florida, before t, 2005, a written demand for appraisal of your shares.

As discussed under the heading "Dissent and Appraisal Rights", any stockholder who opposes the Merger may exercise dissent and appraisal rights under the Florida Business Corporation Act. The Merger contemplated hereby is proposed to be submitted to the stockholders for approval by written consent. We anticipate that the Merger will be approved by a majority of our stockholders, as noted herein. If a stockholder wishes to exercise dissent and appraisal rights, the stockholder must send to the company a written notice demanding payment, and deposit the stockholder's share certificates of the company with our attorneys at Suite 1000, 409 Granville Street, Vancouver, British Columbia, Canada V6C 1T2. The procedure for dissent and appraisal is described in Sections 607.1301 to 607.1333 of the Florida Business Corporation Act, which are attached as Exhibit 4.1 to the Information Statement. We require strict adherence to the procedures set forth therein, and failure to do so may result in the loss of all dissenters' appraisal rights. Accordingly, each stockholder who might desire to exercise dissenter's appraisal rights should carefully consider and comply with the provisions of those sections and consult his or her legal advisor.

No affiliate of Bingo Florida or Bingo Anguilla has any material interest, direct or indirect, by security holdings or otherwise in the proposed merger between Bingo Florida and Bingo Anguilla.

Principal Stockholders

The following table sets forth certain information known to us with respect to beneficial ownership of our common stock as of February 8, 2005, by:

- each person known by us to beneficially own 5% or more of our outstanding common stock;

- each of our directors;

- each of the Named Executive Officers; and

- all of our directors and Named Executive Officers as a group.

In general, a person is deemed to be a "beneficial owner" of a security if that person has or shares the power to vote or direct the voting of such security, or the power to dispose or direct the disposition of such security.

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Percentage of beneficial ownership is based upon 24,399,086 shares of common stock outstanding at February 8, 2005. Share ownership in the table includes shares which may be acquired within the next 60 days upon exercise of options, warrants or rights of conversion. To our knowledge, except as set forth in the footnotes to this table and subject to applicable community property laws, each person named in the table has sole voting and investment power with respect to the shares set forth opposite such person's name. Except as otherwise indicated, the address of each of the persons in this table is as follows: c/o Bingo.com, Inc., 1166 Alberni Street, Suite 1405, Vancouver, British Columbia, V6E 3Z3.

Name and Address of Beneficial Owner
Number of Shares Beneficially Owned

Percent of Class

T. M. Williams

203 Shakespeare Tower

The Barbican

London, England, EC2Y 8DR
2,189,858
(1)
7%






Peter Crossgrove

3769 Escarpment Road

Caledon, ON

Canada, L0N 1C0
750,000
(2)
3%






All directors and Named Executive Officers as a group (2 persons)
2,939,858

10%






Bingo, Inc.

P.O. Box 727,

Landsome Road

The Valley,

Anguilla, B.W.I.
12,896,831
(3)
43%



(1) Includes 150,000 shares of common stock that may be issued upon the exercise of 150,000 stock purchase options with an exercise price of $0.30 per share, 150,000 shares of common stock that may be issued upon the exercise of 150,000 stock purchase options with an exercise price of $0.05 per share, 150,000 shares of common stock that may be issued upon the exercise of 150,000 stock purchase options with an exercise price of $0.10 per share and 300,000 shares of common stock that may be issued upon the exercise of 300,000 stock purchase options with an exercise price of $0.15 per share. Also includes 1,439,858 shares held directly by Mr. Williams. Mr. Williams is the potential beneficiary of certain discretionary trusts that hold approximately 80% of the shares of a private holding company. If 80% of the shares of common stock beneficially owned by the private holding company are included here, Mr. William's beneficial ownership changes to 12,507,323 shares, representing 42% of the Class.



(2) Includes 150,000 shares of common stock that may be issued upon the exercise of 150,000 stock purchase options with an exercise price of $0.30 per share, 150,000 shares of common stock that may be issued upon the exercise of 150,000 stock purchase options with an exercise price of $0.05 per share, 150,000 shares of common stock that may be issued upon the exercise of 150,000 stock purchase options with an exercise price of $0.10 per share and 300,000 shares of common stock that may be issued upon the exercise of 300,000 stock purchase options with an exercise price of $0.15 per share.



(3) Includes 12,696,831 shares held directly by Bingo, Inc., a private holding company. In addition total shares beneficially owned includes the shares of our common stock. The total shares beneficially owned, also includes the shares that could be issued upon the exercise of stock purchase warrants to purchase a total of 200,000 shares of common stock of the Company.

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Certain Relationships and Related Transactions

As of September 30, 2004, the Company had an outstanding loans of $116,835 from T. M. Williams the President and Chief Executive Officer of the Company. This loan is non-interest bearing and has no fixed terms of repayment. The proceeds of this loan have been used by the Company to fund ongoing working capital requirements.

As of September 30, 2004, the Company had an outstanding loan of $45,474 from a company, Pentar Holdings Limited, owned by T.M. Williams, the President and Chief Executive Officer of the Company. The loan is secured over certain assets that the funds were used to acquire in 2002. Interest accrues on this loan at a fixed rate of 7% per annum.

As of September 30, 2004, the Company had an outstanding liability of $163,424 owing to a company, T.M. Williams (Row) Limited, owned by T.M. Williams, the President and Chief Executive Officer of the Company. This liability is for past services rendered and expenses incurred by T.M. Williams on behalf of the Company under Mr. Williams' consultancy agreement with the Company.

In addition, a company, Bingo, Inc. (T. M. Williams is the potential beneficiary of various discretionary trusts that hold approximately 80% of this company) was issued a total of 200,000 common stock purchase warrants in connection with the issuance of Debenture "B" in July 2002. These warrants are exercisable at a price of $0.25 per share for a period of three years.

Payments made to a Bingo, Inc. (T. M. Williams is the potential beneficiary of various discretionary trusts that hold approximately 80% of Bingo, Inc.) in relation to the Domain name purchase payment totaled $30,746 during the nine months ended September 30, 2004, (The year ended December 31, 2003 and 2002 $35,556 and $196,795 respectively), related to payments based on the continuing 4% of the proceeding months gross revenue as defined in the amended agreement, of which $1,260 was due at September 30, 2004 (December 31, 2003 and 2002 - $3,823 and $6,327 respectively).

Composition of our Board of Directors

We currently have two directors. All directors currently hold office until the next annual meeting of stockholders or until their successors have been elected and qualified. Our officers are appointed annually by the Board of Directors and hold office until their successors are appointed and qualified. Pursuant to the Company's by-laws, the number of directors shall be increased or decreased from time to time by resolution of the Board of Directors or the stockholders. There are no family relationships between any of the officers and directors of the Company.

Executive Compensation

The following table describes the compensation the Company paid to our Chief Executive Officer (the "Named Executive Officer").

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Summary Compensation Table



Annual Compensation
Long-term Compensation


Name and Principal Position
Year
Salary
Bonus
Other Annual

Compensation
Restricted Stock Awards
Securities Underlying Options /
All Other

Compensation



$
$
$
$
SARs (#)
$

T.M. Williams -
2004 (1)
17,939



450,000


President and CEO (1)
2003
21,169
-
-
-
150,000
-


2002
43,531
-
-
-
-
-


2001
80,000
-
-
-
150,000
-




(1) This is for a nine month period.

(2) All of the compensation paid to the Named Executive Officer is paid to T.M. Williams (Row), Ltd. for the services of Mr. T. M. Williams. See additional discussion under Employment Arrangements on page 56 of this prospectus/information statement.

Option Grants in the Last Fiscal Year

During the fiscal year ended December 31, 2003, the Company granted to Mr. Williams and Mr. Crossgrove stock options to purchase a total of 150,000 shares each of common stock of the Company at an exercise price of $0.05 per share until April 25, 2008. No stock options were exercised by any our executive officers during the fiscal year ended December 31, 2003.

During the nine months ended September 30, 2004, the Company granted Mr. Williams and Mr. Crossgrove stock options to purchase a total of 150,000 shares each of common stock of the Company at an exercise price of $0.10 per share until April 16, 2009, and stock options to purchase a total of 300,000 shares each of common stock of the Company at an exercise price of $0.15 per share until September 23, 2009. No stock options were exercised by any our executive officers during the nine months ended September 30, 2004.

Stock Option Plans

Our 1999 Stock Option Plan has a total of 1,895,000 shares of our common stock reserved for issuance upon exercises of options under the plan. As of the date of this prospectus/information statement, options to purchase a total 1,100,000 shares (December 31, 2003 -600,000 shares) remained outstanding at exercise prices ranging from $0.08 to $0.15 per share. On November 19, 2004, a consultant to the Company exercised 150,000 stock options at $0.15 per share. The market value of the share was $0.40 on November 19, 2004. Options to purchase 645,000 shares remained available for future grant under the 1999 stock option plan.

As of the date of this prospectus/information statement, our 2001 stock option plan has a total of 3,225,000 shares (December 31, 2003 - 1,400,000 shares) remaining outstanding with exercise prices ranging from $0.05 to $0.30 per share.

Our Board of Directors administers the 1999 stock option plan and the 2001 stock option plan (collectively, the "Stock Option Plans"). Our Board is authorized to construe and interpret the provisions of the Stock Option Plans, to select employees, directors and consultants to whom options will be granted, to determine the terms and conditions of options and, with the consent of the grantee, to amend the terms of any outstanding options.

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The 1999 stock option plan may be granted to employees and to such other persons who are not employees as determined by the 1999 stock option plan administrator (the "Administrator"). In determining the number of shares of the Company's Common Stock subject to each option granted under the 1999 stock option plan, consideration is given to the present and potential contribution by such person to the success of the Company. The exercise price is determined by the Administrator, provided that the exercise price for any covered employee (as that term is defined for the purposes of Section 162(m) (3) of the Internal Revenue Code of 1986 as amended (the "Code"), may not be less than the fair market value per share of the Common Stock at the date of grant by the Administrator. Each option is for a term not in excess of ten years except in the case of the death of an optionee, in which case the option is exercisable for a maximum of twelve months thereafter, or in the case of an optionee ceasing to be a participant under the 1999 stock option plan for any reason other than cause or death, in which case the option is exercisable for a maximum of 30 days thereafter. The 1999 stock option plan does not provide for the granting of financial assistance, whether by way of a loan, guarantee or otherwise, by the Company in connection with any purchase of shares of Common Stock from the Company.

The 2001 stock option plan provides for the granting to our employees of incentive stock options and the granting to our employees, directors and consultants of non-qualified stock options. Our Board determines the terms and provisions of each option granted under the Stock Option Plans, including the exercise price, vesting schedule, repurchase provisions, rights of first refusal and form of payment. In the case of incentive options, the exercise price cannot be less than 100% (or 110%, in the case of incentive options granted to any grantee who owns stock representing more than 10% of the combined voting power of the Company or any of our parent or subsidiary corporations) of the fair market value of our common stock on the date the option is granted. The exercise price of non-qualified stock options shall not be less than 85% of the fair market value of our common stock. The exercise price of options intended to qualify as performance-based compensation for purposes of Code Section 162(m) shall not be less than 100% of the fair market value of the stock. The aggregate fair market value of the common stock with respect to any incentive stock options that are exercisable for the first time by an eligible employee in any calendar year may not exceed $100,000.

The term of options under the Stock Option Plans will be determined by our Board; however, the term of an incentive stock option may not be for more than ten years (or five years in the case of incentive stock options granted to any grantee who owns stock representing more than 10% of the combined voting power of the Company or any of our parent or subsidiary corporations). Where the award agreement permits the exercise of an option for a period of time following the recipient's termination of service with us, disability or death, that option will terminate to the extent not exercised or purchased on the last day of the specified period or the last day of the original term of the option, whichever occurs first.

If a third party acquires the Company through the purchase of all or substantially all of our assets, a merger or other business combination, except as otherwise provided in an individual award agreement, all unexercised options will terminate unless assumed by the successor corporation. The stock options outstanding at the time of the merger will be assumed by Bingo Anguilla.

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