The Unabridged History of Winners and Losers

[Tatari Gami]

June 18, 2001 Letter to Shareholders:
As copied from Ragingbull. http://ragingbull.lycos.com/mboard/boards.cgi?board=WINR&read=29696
I make no representations as to whether or not this is a real letter from Mr. Vogt or the company. If you are a shareholder, you should receive this letter yourself via WINR's transfer agent or your own broker. Before making any investment decisions based on the contents of this letter, one should confirm the authenticity of the contents by calling the company.

By: SavannahBoy $$$
Reply To: None Tuesday, 26 Jun 2001 at 3:43 PM EDT
Post # of 29741

Here's the letter from Mr. Vogt - thanks to Jake for emailing me the letter..

Winners Internet Network, Inc.

June 18, 2001

Dear Shareholders,

I promised to provide a written report about our efforts to assess the current situation at Winners Internet Network, Inc. ("Company") and prepare a strategic plan. Here it is.

Overall Business

Overall, the business is in a very weak but salvageable position. Sales are down for various reasons but so are costs. Management attention is being diverted from efforts to rebuild the customer base by a number of internal operational, accounting and legal issues that need to be addressed. Management is taking the following approach to correct the situation. One group is focusing on resolving the specific operational, accounting and legal issues described below. The other group is focusing on the go forward strategy. Unfortunately, for the reasons described below, I cannot report financial results at this time.

Strategic Plan

Several strategic decisions have been made. First, if the Company is to have any chance of success going forward, the specific issues described below need to be addressed. Therefore, a significant amount of time will be spent over the next several months dealing with them. Second, over the long-term, we are going to change our client focus and move away from gambling and adult websites to more traditional e-commerce businesses. This will help our financial situation by improving the quality and reliability of our customer base, which will help improve our relationship with the credit card companies. And finally, we will continue to secure additional management expertise.

Specific Issues

Liquidity

The Company has a serious liquidity problem. The Company had difficulty paying bills in May. Without the infusion of additional funds soon, it is possible that the Company will not be able to pay its bills in June.

Efforts are being made to find new investors and we have identified some possibilities. However, we do not yet have firm commitments.

SEC Investigation

In early 2000, the SEC notified the Company that it was conducting an investigation into the relationship between the Company and Stockreporter.de. a public relations firm that issued favorable research reports about the Company after being retained by the Company. On July 31, 2000 the law firm of Foley & Lardner was retained to represent the Company and certain officers in this investigation. Efforts to settle the investigation late last year were unsuccessful. On January 29, 2001 the Company received a Subpoena ordering that it produce a lengthy list of corporate records. The Subpoena was answered in part on March 5, 2001. A meeting with the SEC is scheduled to take place this month.

The SEC investigation is ongoing. We do not know when it will be concluded. It is not clear at this point that the Company has sufficient funds to continue to pay Foley & Lardner. In fact, Foley & Lardner was notified of this situation on June 6 and they no longer represent the Company. The ultimate outcome of this process is highly uncertain.

Financial Statements

Financial Statements for year ending 2000 have not been completed due to the lack of access to accounting data, the absence of accounting data, and discrepancies in records that need to be reconciled. We, along with our accountants and auditors will need to work to find and reconcile the records and complete the accounting as soon as adequate financial resources are secured to allow us to maintain these important relationships.

Until we are confident that we have financial statements that are accurate we cannot release them to you and we cannot file them with the SEC.

VisalMasterCard Contacts

In January 2001 Visa canceled its contract with the Company. Visa indicated that this action was taken due to unsatisfactory relationships with the Company. The effect of this action was to stop our processing capabilities for most of our vendors. Processing volumes fell significantly as a result. We are negotiating with Visa to find a way to sign a new contract(s) and start processing again. Additionally, we are restructuring contracts with vendors to improve our relationship with them.

In addition to Visa canceling their processing contract, both Visa and MasterCard began holding funds due us for up to 180 days due to the high volume of charge backs being created by the customers of our vendors. The effect of this action is to make our liquidity problem worse. We successfully negotiated a long-term solution to this problem with MasterCard in April when a new contract was negotiated and signed. We are trying to negotiate a solution to this problem with Visa. The ultimate solution to this problem is to move our customer base to a more reliable and credit worthy clientele and convince Visa and MasterCard to release funds earlier as a result.

SEC Reporting

No new SEC reports have been prepared. SEC reports will be filed as soon as the issues above are resolved, we make a determination that filing is appropriate, and the appropriate drafting capabilities are secured.

Relisting

No time is being spent on this issue. Management believes it is unreasonable to expect that the Company will get relisted until the issues above are resolved.

Management Team and Board of Directors

The Company is currently discussing board membership with a strong European candidate who would bring a great network of business contacts and potential customers to the Company. Additionally, negotiations are currently taking place to secure a full time Chief Financial Officer. The ultimate success of both efforts is highly dependent on securing sufficient funds to increase the likelihood that the Company can continue to operate.

Annual Meeting

A shareholders meeting will be held on July 28, 2001 in Schaan Liechtenstein at the Burotel Landstrasse 163 beginning at 16:00 CET. The meeting can be attended in person or observed via the Internet. Instructions concerning Internet access will be posted on www.winr.net.

In closing, please accept this report for what it is: an open, objective assessment of the Company's current situation. I plan to provide additional details and updated reports at the shareholders meeting in July.

Sincerely,

Stefan Vo~'
Chief Executive Officer

Ruggell, Liechtenstein