UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

Washington,
D.C. 20549

FORM
10-K

(Mark
One)

|X|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT

OF
1934

For the
fiscal year ended: December 31, 2002

Or

|_|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE

# ACT OF 1934

For
the transition period from to

Commission
file number:000-26319



Bingo.com,
  Inc.


(Exact
name of registrant as specified in its charter)



|Florida                                                              |  | 98-0206369                                
|-------------------------------------------------------------------- |  | ------------------------------------------
|(State
      or other jurisdiction of incorporation or organization) |  | (I.R.S.
      Employer Identification No.)



1166
Alberni Street, Suite 1405

Vancouver,
BC, Canada, V6E 3Z3

(604)
694-0300

| | (Address
      of principal executive offices,
      zip
      code, and phone number) | 
| | -------------------------------------------------------------------------------------- | 

Securities registered pursuant to Section
12(b) of the Act:

None

Securities
registered pursuant to section 12(g) of the Act:

COMMON
  STOCK, PAR VALUE $0.001 PER SHARE


(Title
of class)







Indicate by check mark
whether the registrant (1) has filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. |X| Yes |_| No

Indicate by check mark
if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not
contained herein, and will not be contained, to the best of registrant's
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K []



DOCUMENTS
INCORPORATED BY REFERENCE

None

































###### TABLE OF CONTENTS

PART
  I..............................................................................................................................................
  3

ITEM
1. 
BUSINESS....................................................................................................................
3

ITEM
2.
  PROPERTIES...............................................................................................................
  17

ITEM
3. LEGAL
  PROCEEDINGS..............................................................................................
  18

ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS................... 18

PART
  II........................................................................................................................................... 
  20

ITEM
5. MARKET FOR REGISTRANT'S COMMON EQUITY  AND

RELATED STOCKHOLDER
  MATTERS.................................................................................. 
  20

ITEM
6. SELECTED FINANCIAL
  DATA................................................................................ 
  22

ITEM
7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF

FINANCIAL
  CONDITION AND RESULTS OF
  OPERATION..............................................  23

ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET
  RISK...........................................................................................................
  30

ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.............................. 
31

ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

ON ACCOUNTING AND FINANCIAL
DISCLOSURE........................................................  
58

PART
III........................................................................................................................................  
60

ITEM
10.  DIRECTORS AND EXECUTIVE
OFFICERS OF THE REGISTRANT................   60

ITEM
11.  EXECUTIVE
COMPENSATION...........................................................................  
61

ITEM
12.  SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS

AND MANAGEMENT ............................................................................................................ 
  63

ITEM
13.  CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS.......................  65

ITEM
14.  CONTROLS AND
PROCEDURES.......................................................................  
66

PART
IV.......................................................................................................................................  
67

ITEMS
15.  EXHIBITS, FINANCIAL STATEMENT
SCHEDULES AND

REPORTS ON FORM
  8-K...................................................................................................... 
  67

SIGNATURES.........................................................................................................................  
68

CERTIFICATIONS.................................................................................................................   
69

EXHIBIT
LIST.........................................................................................................................  
71

EXHIBIT 10.29
Amendment of Asset Purchase Agreement dated July 1, 2002.............................72









# PART I

This
Annual Report on Form 10-K contains forward-looking statements that involve
risks and uncertainties.  All
statements contained herein that are not statements of historical fact
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Discussions containing forward-looking
statements may be found in the material set forth under "Business,"
"Business - Risks Related to Our Business," and "Management's Discussion
and Analysis of Financial Condition and Results of Operations," as well as in
this Annual Report generally.  We
generally use words such as "believes," "intends," "expects,"
"anticipates," "plans," and similar expressions to identify
forward-looking statements.  You
should not place undue reliance on these forward-looking statements. Our actual
results could differ materially from those expressed or implied in the
forward-looking statements for many reasons, including the risks described under
"Business - Risks Related to Our Business" and elsewhere in this Annual
Report.

## ITEM 1. BUSINESS

**Introduction**

Bingo.com,
Inc. (the "Company") is in the business of developing and operating a
bingo based web portal designed to provide a variety of free games and other
forms of entertainment, including an online community, chat rooms, contests,
sweepstakes, tournaments, and more. The Company envisions becoming the preminent bingo-based web portal on the Internet, using its bingo.com domain
name and incorporating a variety of games and content to attract and retain a
large number of subscribers. The Company's existing website has attracted over
900,000 registered users and served over 1,500,000,000 bingo cards since its
inception; the Company intends to continue to build on this subscriber base to
further develop its online presence.

The
Company generates revenue principally from the free website, which is supported
by advertising revenue obtained by displaying advertisements on our web site and
delivering advertisements to our players by email.

The
free site provides content to our players in the form of free-to-play,
multiplayer theme bingo games, such as Astrology Bingo, Cupid Bingo, and the
like, as well as online video poker, sweepstakes and slot machines. We also
offer our registered players other forms of entertainment such as fortune
telling, chat rooms, and member profiles.

We
intend to continue to build on the success of the existing free site by offering
a greater depth and variety of content that we expect will hold subscribers and
allow us to generate more revenue through advertising. We also intend to add
enhanced content available to users for a monthly subscription charge in order
to further grow our revenue base. We intend to provide non-North American
players with the opportunity to play traditional bingo for cash.

References
in this document to "the Company," "we," "us," and "our" refer
to Bingo.com, Inc. and its subsidiaries, which are described below.

Our
executive offices are located at 1166 Alberni Street, Suite 1405, Vancouver,
British Columbia, Canada, V6E 3Z3.  Our
telephone number is (604) 694-0300.

**History and
Corporate Structure**

The
Company was originally incorporated in the State of Florida on January 12, 1987,
under the name Progressive General Lumber Corp. ("PGLC') with an authorized
share capital of 7,500 shares of common stock with a $1.00 par value per share. 
PGLC was for the most part inactive until January 1999.

On
July 17, 1998, PGLC filed Articles of Amendment and increased its authorized
share capital to 50,000,000 common shares with a $0.001 par value per share. The
shares were also subject to a forward stock split by way of a stock dividend to
increase the number of then issued and outstanding shares on a 200 shares for 1
share basis.

In
January 1999, management of PGLC changed and the new management filed Articles
of Amendment to the Articles of Incorporation of PGLC to amend the Articles of
Incorporation and change the name of PGLC
to Bingo.com, Inc. effective January 22, 1999. Concurrent with the name
change the Company acquired the use of the second level domain name bingo.com
and embarked on its business strategy to become a leading online provider of
bingo based games and entertainment.

The
Company conducts its business through the Florida incorporated entity and
through its wholly owned subsidiary Bingo.com (Canada) Enterprises Inc.
("Bingo Canada"). Bingo Canada was incorporated under the laws of British
Columbia, Canada, on February 10, 1998 as 559262 B.C. Ltd. and changed its name
to Bingo.com (Canada) Enterprises Inc. on February 11, 1999.

On
August 15, 2002, the Company acquired 99% of the share capital of Bingo.com (UK)
plc ("Bingo UK"). Bingo UK was incorporated under the laws of England and
Wales on August 18, 2000 as CellStop plc. and changed its name to Bingo.com (UK)
plc. on August 5, 2002.

The
Company also maintains a number of inactive wholly owned subsidiaries. 
These include

- Bingo.com (Antigua), Inc., ("Bingo.com
(Antigua") incorporated as an Antigua International Business Corporation on
April 7, 1999 as Star Communications Ltd. and changed its name to Bingo.com.
(Antigua), Inc. on April 21, 1999;
- Bingo.com (Wyoming), Inc., incorporated in the
State of Wyoming on July 14, 1999;
- Bingo.com Acquisition Corp., incorporated in
the State of Delaware on January 9, 2001.

All
three of the inactive subsidiaries were incorporated to facilitate the
implementation of business plans that the Company has since modified and
refocused and consequently, there is no activity in these entities.

The
Company's common shares are currently quoted on the National Association of
Securities Dealers' Over-The-Counter Bulletin Board ("OTCBB") under
the symbol "BIGR". We have not been subject to any bankruptcy, receivership
or other similar proceedings.

**Development
of the Business**

The
current business strategy of the Company is to manage and grow the business with
minimal overhead focusing on its major asset, the bingo.com domain name, which
was acquired in 1999.

**Bingo.com
Domain Name**

On
January 18, 1999, the Company purchased the exclusive right to use the domain
name bingo.com from a then
unrelated company Bingo, Inc., an Anguilla corporation, for (i) a
$200,000 cash payment, (ii) 500,000 shares of our common stock (at a deemed
value of $2.00 per share) and (iii) an agreement to pay, on an ongoing basis,
the Domain Name Purchase price amounting to 4% of our annual gross revenues,
with a total minimum guaranteed Domain Name Purchase payment of $1,100,000 in
the first three years of the 99 year period ended December 31, 2098. During the
year ended December 31, 2002 the agreement was amended so that the remaining
Domain Name Purchase payments to the vendor are made monthly, based on 4% of the
preceding months gross revenue. The value of the bingo.com domain name was based
on factors such as the relationship of the name to our business, the ability for
us to create a brand for our Website and portal based on the name, the ease of
internet browser search ability of the domain name and the ability of visitors
to our website to remember and associate the name with our website and portal.
We negotiated the terms of the domain name acquisition at arms' length, and we
believe the consideration we paid for the name was reasonable.

During
the year ended December 31, 2002, the Company made payments totalling $197,000
including interest (2001 - $362,000) under the terms of this agreement. $185,000
of this payment related to the final payments made in accordance with the
minimum guaranteed Domain Name Purchase payment of $1,100,000. The remaining
$12,000 related to payments based on 4% of the preceding months gross revenue as
defined in the amended agreement. T. M. Williams, the President and Chief
Executive Officer of the Company is the potential beneficiary of several
discretionary trusts that hold approximately 80% of the shares of Bingo, Inc.

**Business
Overview**

The
Company aims to become the leading online provider of bingo based games and
entertainment. The Company intends to leverage the worldwide popularity of bingo
with the growth of the Internet to become the premier bingo portal.

We are
in the business of developing and operating an entertainment and service based
website designed to provide a variety of free bingo games, and other forms of
entertainment, initially focused on the game bingo and including chat rooms,
sweepstakes, communities, and other forms of enhanced content. We are attempting
to create a value-based website, complete with online services and an extensive
database of registered players.

The
entertainment and other content provided on the bingo.com portal do not include
adult content or gambling for cash. The Company, however, intends to offer
traditional bingo for cash to non-North American players.

Free Bingo
Business

Our
free bingo Website is built around a variety of free bingo games, offered to
registered players who compete against other users for the chance to win prizes.
Our primary objective is to provide Internet users a website offering a variety
of free bingo based games and entertainment, as well as free online video poker
and free slot machines. The Company intends to continue to provide prize-based,
play-for-free games emphasizing entertainment.

The
Company uses the appeal of the bingo.com domain name to sell advertising on the
free site, which is currently the Company's primary revenue source.
Advertising revenue from the bingo.com website accounted for approximately 99%
of our revenue for the year ended December 31, 2002. During the year ended
December 31, 2002, over 175 million player sessions were offered to the
Company's registered players. The average visitor session length was 55 minutes
per user. The Company's website continues to be one of the stickiest sites on
the Internet. As a result of this appeal to web users, the Company was able to
serve approximately one billion ads on the bingo.com website during the year
ended December 31, 2002

Although
the games are free to play, players are required to register to receive prizes
and to access certain features on the site. All registration information is
stored in online databases. We intend to continue to build awareness of, and
drive traffic to, bingo.com through a marketing program consisting of various
elements such as strategic alliances and online and off-line advertising. The
Company will continue to pursue a co-branding strategy as part of its overall
plans. In addition, the Company will continue to establish promotional
agreements with prominent websites and media content providers that have
reciprocal links to bingo.com, or to display advertising.

The
Company has built multiple revenue streams and believes that there is value in
the ability to direct the traffic of our membership base and their buying power,
and intend to pursue affinity arrangements with merchant partners. The Company
will continue to sell advertising space on the bingo.com website. The Company
believes that its growing user base and stickiness will provide advertisers with
an attractive platform to reach their target audience.

**The Niche**

The
Company is continuing to position itself to become a leading entertainment
portal through the incorporation of bingo and technology, to create a fun and
exciting daily user experience centered around bingo and bingo-based games. We
believe the size of the worldwide community familiar with bingo, the domain name
bingo.com, and the attractive nature of the Company's product offering provides
an opportunity to build a large loyal base of daily visitors.

The
game of bingo is reported to be the most socially acceptable form of gaming in
the world played by over 500 million people worldwide. The online casino market
is well developed on the Internet whereas the online bingo market is still in
its infancy. Industry experts have indicated that the online bingo market could,
over time, be larger than the online casino market and grow at a faster rate.

The
Company's website bingo.com has broader appeal in the marketplace, is less
regulated, and is typically classed as a minor form of gambling. We believe that
a significant percentage of American bingo players are between the ages of 18
and 44, and that Baby Boomers are playing bingo more than ever. The Baby Boomer
generation is considered to have the most disposable income and the highest
ability to access the Internet. We believe that bingo is well suited for online
entertainment content, and that online games are a compelling entertainment
medium for a mass user audience. There is appeal in providing players with an
opportunity to win prizes and cash while allowing them to access entertaining
content according to their own schedule from their own location. We intend to
lead the way using the popularity of bingo games, the accessibility of the
Internet and the rate of growth for entertainment based game sites.

The
Company believes that its future success will be dependent on a number of
factors. These include focus on online bingo games, and online entertainment,
and the development of a personalized community atmosphere, which will encourage
lengthy site visits by users. We believe the nature of the Company's website
content and our player base will allow the Company to establish a large detailed
database of registered players, which is a distinguishing factor to attracting
online advertisers.

The
Company intends to promote the bingo.com brand name by building a network of
affiliations with prominent companies, both online and off.





**Business
Strategy**

Our
objective is to become the premier online destination for web-based bingo
entertainment and a leading entertainment destination on the Internet. The
Company is pursuing this objective through the following strategies:

Continue
to enhance content

Registered
players are provided with a variety of free games, and other forms of
entertainment such as chat, sweepstakes, fortune telling, and more. The free
bingo games can be played for points, which are redeemable for prizes. We are
able to create low-cost content through creative face-changes of the standard
bingo games. These 'skins' can reflect themes, corporate interests or other
targeted messages.

Build
multiple revenue streams

We
currently generate revenue from selling advertising on the free bingo site, and
through other initiatives such as co-branding and affiliates. An example of this
is the online store Walter Drake, where bingo.com users can receive discounts on
purchases made at the Walter Drake site. The Company receives a commission for
all purchases made on the Walter Drake site by our users. We expect to continue
to offer similar sorts of arrangements with the goal of building a diversified
revenue base. There are also other methods of broadening our revenue base that
we intend to pursue. Some of these include offering a premium service, via
subscription, on our free site; traditional bingo for cash to non-North American
players; and the licensing of our games to Websites which complement our growth
strategies. The Company currently earns revenues from its portal through a
variety of ways, such as the following:

- Banner and button advertisements on our
bingo.com site;
- Pop-ups, which are interstitial ads that appear
as a separate window on top of content;
- Superstitials; which are interstitial
commercials that seamlessly load while a visitor is surfing the site;
- Sponsorships of email newsletters or parts of
our site;
- Commissions on purchases made on Partner sites.
e.g. Walter Drake;
- Third-Party referral arrangements such as that
with lavalife, where the Company receives a fee whenever a bingo.com player
becomes a registered user of their online personals service.

Advertising
revenue calculations are based on click-throughs, percentage of sales
transactions, or other methods depending on the details of the agreements. The
majority of the Company's current revenue is calculated on a 
Cost Per Thousand ("CPM") basis.

Expand
registered user database

We
have demonstrated the ability to attract and keep a large subscriber base. It is
our intention to continue the growth of our database through expansion of our
co-branding strategy and through strategic partnerships with affinity groups and
penetration of traditional bingo venues by use of targeted promotions with
suppliers of goods and services to such venues.

Entertainment
and game sites have become increasingly popular and are showing strong growth
rates. The Company's Website traffic reports indicate that between 800 to 1200
new players a day are registering with www.bingo.com. There has been in excess
of 35,000 unique visitors per day, with an average visitor session length of
more than 55 minutes. The Company is becoming the premier online destination for
Web-based bingo entertainment and a leading entertainment destination on the
Internet.

Leverage
licensed users and alliances

We are
confident that the variety of games and entertainment available on our website
will encourage many visitors to come, stay, play and revisit often. In the
process of providing a one-stop entertainment arena for bingo lovers, we are
creating a value based website which is backed by an extensive database of
registered players and their buying preferences. We believe the value of this
demographic data has enabled the Company to generate premium CPM and Cost Per
Click ("CPC") rates for the sale of its advertising inventory.

Extend
and enhance the value of the brand name

We
believe that establishing a readily recognizable brand name is critical to
attracting a larger player base and deriving additional revenue. We believe that
bingo.com website has inherent value as a brand name and we intend to
aggressively expand our player base by promoting that name. We intend to pursue
online and offline marketing strategies, promotional opportunities, and
strategic alliances to make bingo.com website the leading entertainment
destination for bingo on the Internet.



**Marketing
Strategy**

Our
goal is for the bingo.com website to become the most recognized bingo and
entertainment destination site on the Internet. We intend to build an Internet
community consisting of a dedicated and loyal user base that we believe will
support our ability to generate advertising revenues, and e-commerce sales for
the Company.

Advertising
focused on promoting the bingo.com website within North America and in targeted
international markets through strategic partnerships, co-branding and other
promotional activities with a variety of companies is contemplated. This
strategy is intended to further develop the growing database of registered
players.

We
also use our database of registered users to send targeted emails and other
advertisements in order to encourage our subscribers to play. We offer special
promotions and other offerings that bring additional users to our site such as
the use of our email list to promote special
events.

**Employees**

As of
December 31, 2002, the Company had six full-time employees, not including
temporary personnel, consultants, and independent contractors. The Company
retains consultants to provide special expertise in developing strategy,
marketing, software and technologies and outsources its development resources.
None of our employees is represented by a labor union, and we believe that our
relationship with our employees is good.

We are
substantially dependent upon the continued services and performance of T. M.
Williams, our President, Chief Executive Officer and Chairman of our Board. The
loss of the services of this key individual would have a material adverse effect
on our business, financial condition and results of operations.

FINANCIAL INFORMATION ABOUT GEOGRAPHIC AREAS

We are
in the business of developing and operating a bingo based web portal designed to
provide a variety of free games and intend to provide traditional bingo for cash
games for residents outside of North America, and other forms of entertainment
on the Internet. At the end of fiscal 2002, the majority of the Company's
fixed assets were located in Canada.

Seasonality

The
Company does not believe that seasonality has an effect on its traffic volumes
or its revenue realization.

**Competition**

The
Company faces competition primarily from other companies that target the
entertainment segment of the market. Lycos, Inc., through its site Gamesville,
Electronic Arts Inc., though its site Pogo, and Vivendi Universal, though
 its site Flipside, are large
online entertainment destinations, offering games, game shows and other
interactive experiences to users. We will continue to compete with these large
sites as well as many other smaller offerings, and there can be no assurances
that we will be successful in attracting users from these sites.

**Trademarks
and Intellectual Property Protection**

The
Company will continue to consider the need to apply for trademark registration
and protection for its games, logo and various phrases in Canada and the United
States. The Company has not submitted any other applications for trademark
registration. In the event that we determine that we have created an asset whose
value can be protected, we will attempt to protect our proprietary asset by
applying for patents, copyrights or trademarks. In addition, we intend to rely
on trade secret laws and non-disclosure and confidentiality agreements with our
employees and consultants, who have access to its proprietary technology, to
protect our technologies.

**RISK
FACTORS**

Our
business is subject to a number of risks due to the nature and the present state
of development of our business. An investment in our securities is speculative
in nature and involves a high degree of risk. You should read carefully and
consider the following risk factors.

**Risks
Related to Our Business**

We have a
limited operating history and a history of lossesand expect future losses, and there can be no assurances that we will achieve
profitability, which makes our ability to continue as a going concern questionable.

We
have incurred significant net losses and negative cash flow from operations
since our inception. We incurred net losses of approximately $3,335,000 in fiscal 2000,
$1,955,000 in fiscal 2001, and $969,000 in fiscal 2002. 
As of December 31, 2002, we had an accumulated deficit ofapproximately$9,174,000, and
during the year ended December 31, 2002 we used cash ofapproximately$83,000 in operating
activities (2001 - $647,000) Although we reduced our operating costs and our
cash utilization rate significantly during the 2002 fiscal year, we expect to
continue to incur sales and marketing and general and administrative expenses in
the future. As a result, we expect to incur losses for the foreseeable future
and will need to generate significantly higher revenues in order to achieve
profitability. If we achieve profitability, we may not be able to sustain it.

Our
financial statements have been prepared on a going concern basis, which presumes
the realization of assets and the settlement of liabilities in the normal course
of operations. The application of the going concern principle is dependent upon
the Company achieving profitable operations to generate sufficient cash flows to
fund continued operations, or, in the absence of adequate cash flows from
operations, obtaining additional financing. If the Company is unable to achieve
profitable operations or obtain additional financing, we may be required to
reduce or to limit operations, or cease operations altogether. The auditors'
report on the December 31, 2002 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.

We
may not be able to generate sufficient revenue to entirely support our
operations in fiscal 2003 due to a number of factors including, among others:

- the cost of promoting and marketing our bingo
portal;
- the general demand for online advertising has
decreased, as have advertising rates, which will impact
our advertising revenue;
- the costs associated with developing our
software and technologies, installing equipment and
expanding our facilities;
- the costs associated with hiring and retaining
experienced management and staff for our operations.

We are
subject to risks and challenges frequently encountered by early stage companies
engaged in early stage enterprises and Internet commerce.

We
face risks, uncertainties, expenses and difficulties frequently encountered by
companies in their early stages of development that may be using new and
unproven business models, particularly companies engaged in Internet commerce.
These risks include, but are not limited to:

- our revenue forecasts may be incorrect because
of our limited experience selling our products and
services;
- our ability to generate revenues will depend on
selling advertising on a website focused on bingo entertainment, a newly
developed business concept currently with only limited market acceptance;
- as our business grows and the expectations of
our customers increase, we must develop and
upgrade our infrastructure,
including internal controls, transaction processing capacity, data storage
and
retrieval systems and website to remain competitive. We may not have the capital
resources to
do so;
- we compete with a number of larger competitors
with greater financial, capital, technical, marketing and human resources and
experience than us;
- we may not be able to continue to offer new and
exciting content that is attractive and compelling to
existing users;
- our business is dependent upon the Internet for
commerce and growth. The Internet is still a relatively
unproven business medium
and has received negative publicity in recent years;
- general economic conditions could change and
adversely affect our business;
- we intend to rely upon strategic relationships
to build market awareness and to bring visitors to our
portal and players to the
online bingo games. These relationships may not be successful;
- our business is subject to regulatory risks,
which may increase the cost of operating our businesses
or prohibit us from
conducting our business altogether;
- we depend upon key personnel and management to
fully develop our businesses.

Due to
our brief operating history, we have not generated sufficient data to permit
meaningful period-to-period comparisons of our operating results.
Our quarterly operating results have varied significantly in the past and will
likely vary significantly in the future. As a result, we believe that
period-to-period comparisons of our operating results to date are
not meaningful and should not be relied upon as indicators of our future
performance. In addition, it is difficult to fully evaluate our business and our
prospects. We cannot assure you that we will attract users, advertisers,
consumers or network affiliates, or generate significant revenues or operating
margins in the future.

We are
substantially dependent on third parties for most aspects of our business.

We
have chosen to pursue a strategy whereby we have outsourced many of our
mission-critical business functions, including website hosting, and serving, and
web server collocation. Most of these functions are performed by a limited
number of small companies. As a result, we face increased risk that our business
could be interrupted by the failure of any one of our key vendors or suppliers,
and such an interruption could have a material impact on our financial position
and results of operations.

We will need
additional capital to continue to operate our business.

We
have not yet achieved profitable operations or secured a long-term source of
consistent and reliable revenue. As of December 31, 2002 we had approximately
$15,000 in cash and cash equivalents. We may not have sufficient cash and cash
equivalents on hand to conduct our operations throughout 2003, and are
substantially dependent, if the Company fails to generate sufficient funding, on
continued funding from our President and Chief Executive Officer to continue
operations. Although our cash flow is improving, we may need to obtain
additional financing to grow our operations for the duration of 2003.

If we
successfully raise additional funds through the issuance of debt, we will be
required to service that debt and are likely to become subject to restrictive
covenants and other restrictions contained in the instruments governing that
debt, which may limit our operational flexibility. If we raise additional funds
through the issuance of equity securities, then those securities may have
rights, preferences or privileges senior to the rights of holders of our common
stock, and holders of our common stock will experience dilution.

We
cannot be certain that such additional debt or equity financing will be
available to us on favorable terms when required, or at all. If we cannot raise
funds in a timely manner, or on acceptable terms, we may not be able to promote
our brand, develop or enhance our products and services, take advantage of
future opportunities or respond to competitive pressures or unexpected
requirements, and we may be required to reduce or limit operations.

If our key
personnel leave the Company, our ability to succeed will be adversely affected

The
future success of the Company will depend on certain key management, marketing,
sales and technical personnel. We are currently dependent on our President and
Chief Executive Officer, T. M. Williams, for the success of the business. We
also rely upon consultants and advisors who are not employees. The loss of key
personnel could have a material adverse effect on our operations. We do not
maintain key-man life insurance on any of our key personnel. The inability to
attract, retain and motivate highly skilled personnel required for expansion of
operations and development of technologies could adversely affect our business,
financial condition and results of operations. We cannot assure you that we will
be able to retain our existing personnel or attract additional, qualified
persons when required and on acceptable terms.

We have
capacity constraints and system development risks that could damage our customer
relations or inhibit our possible growth, and we may need to expand our
management systems and controls quickly, which may increase our cost of
operations

Our
success and our ability to provide high quality customer service largely depends
on the efficient and uninterrupted operation of our computer and communications
systems and the computers and communication systems of our third party vendors
in order to accommodate any significant numbers or increases in the numbers of
consumers and advertisers using our service. Our success also depends upon our
and our vendors' abilities to rapidly expand transaction-processing systems and
network infrastructure without any systems interruptions in order to accommodate
any significant increases in use of our service.

We and
our service providers may experience periodic systems interruptions and
infrastructure failures, which we believe will cause customer dissatisfaction
and may adversely affect our results of operations. Limitations of technology
infrastructure may prevent us from maximizing our business opportunities.

We
cannot assure you that our and our vendors' data repositories, financial systems
and other technology resources will be secure from security breaches or
sabotage, especially as technology changes and becomes more sophisticated. In
addition, many of our and our vendors' software systems are custom-developed and
we and our vendors rely on employees and certain third-party contractors to
develop and maintain these systems. If certain of these employees or contractors
become unavailable, we and our vendors may experience difficulty in improving
and maintaining these systems. Furthermore, we expect that we and our vendors
may continue to be required to manage multiple relationships with various
software and equipment vendors whose technologies may not be compatible, as well
as relationships with other third parties to maintain and enhance their
technology infrastructures. Failure to achieve or maintain high capacity data
transmission and security without system downtime and to achieve improvements in
their transaction processing systems and network infrastructure could have a
materially adverse effect on our business and results of operations.

Increased
security risks of online commerce may deter future use of our website, which may
adversely affect our ability to generate revenue

Concerns
over the security of transactions conducted on the Internet and the privacy of
consumers may also inhibit the growth of the Internet and other online services
generally, and online commerce in particular. Failure to prevent security
breaches could significantly harm our business and results of operations. We
cannot be certain that advances in computer capabilities, new discoveries in the
field of cryptography, or other developments will not result in a compromise or
breach of the algorithms used to protect our transaction data. Anyone who is
able to circumvent our or our vendors' security measures could misappropriate
proprietary information, cause interruptions in our operations or damage our
brand and reputation. We may be required to incur significant costs to protect
against security breaches or to alleviate problems caused by breaches. Any
well-publicized compromise of security could deter people from using the
Internet to conduct transactions that involve transmitting confidential
information or downloading sensitive materials, which would have a material
adverse effect on our business.

**We face
the risk of system failures, which would disrupt our operations**

A
disaster could severely damage our business and results of operations because
our services could be interrupted for an indeterminate length of time. Our
operations depend upon our ability to maintain and protect our computer systems.

Our
systems and operations are vulnerable to damage or interruption from fire,
floods, earthquakes, hurricanes, power loss, telecommunications failures,
break-ins, sabotage and similar events. The occurrence of a natural disaster or
unanticipated problems at our principal business headquarters or at a
third-party facility could cause interruptions or delays in our business, loss
of data or render us unable to provide our services. In addition, failure of a
third-party facility to provide the data communications capacity required by us,
as a result of human error, natural disaster or other operational disruptions,
could cause interruptions in our service. The occurrence of any or all of these
events could adversely affect our reputation, brand and business.

We face risks
of claims from third parties for intellectual property infringement that could
adversely affect our business

Our
services operate in part by making Internet services and content available to
our users. This creates the potential for claims to be made against us, either
directly or through contractual indemnification provisions with third parties.
These claims might, for example, be made for defamation, negligence, copyright,
trademark or patent infringement, personal injury, invasion of privacy or other
legal theories. Any claims could result in costly litigation and be time
consuming to defend, divert management's attention and resources, cause delays
in releasing new or upgrading existing services or require us to enter into
royalty or licensing agreements.

Litigation
regarding intellectual property rights is common in the Internet and software
industries. We expect that Internet technologies and software products and
services may be increasingly subject to third-party infringement claims as the
number of competitors in our industry segment grows and the functionality of
products in different industry segments overlaps. There can be no assurance that
our services do not or will not in the future infringe the intellectual property
rights of third parties. Royalty or licensing agreements, if required, may not
be available on acceptable terms, if at all. A successful claim of infringement
against us and our failure or inability to license the infringed or similar
technology could adversely affect our business.

Our
success and ability to compete are substantially dependent upon our technology
and data resources, which we intend to protect through a combination of patent,
copyright, trade secret and/or trademark law. We currently have no patents or
trademarks issued to date on our technology and there can be no assurances that
we will be successful in securing them when necessary.

We
may not be able to protect our Internet domain name, which is important to our
branding strategy

Our
Internet domain name, www.bingo.com, is an extremely important part of our
business. Governmental agencies and their designees generally regulate the
acquisition and maintenance of domain names. The regulation of domain names in
the United States and in foreign countries may be subject to change. Governing
bodies may establish additional top-level domains, appoint additional domain
name registrars or modify the requirements for holding domain names. As a
result, we may be unable to acquire or maintain relevant domain names in all
countries in which we conduct business. Furthermore, the relationship between
regulations governing domain names and laws protecting trademarks and similar
proprietary rights is unclear. Therefore, we may be unable to prevent third
parties from acquiring domain names that are similar to, infringe upon or
otherwise decrease the value of our trademarks and other proprietary rights.
Third parties have acquired domain names that include "bingo" or
variations thereof both in the United States and elsewhere, which may result in
an erosion of our user base.

If we are
unable to develop relationships with a network of affiliates, our Web portal may
never achieve market acceptance or generate sufficient advertising revenues

We
believe that our future success in penetrating our target markets depends in
part on our ability to further develop and maintain relationships with
affiliates. These affiliates provide their users with the bingo.com links on
their sites or direct their traffic to the bingo.com web portal. We believe
these relationships are important in order to facilitate broad market acceptance
of our service and enhance our sales. Our future ability to attract consumers to
our bingo site may be dependent upon the growth of our network of affiliates,
which is in the early stages of development. If we are unable to obtain
agreements or arrangements for traffic on commercially acceptable terms or to
establish a relationship with a network of affiliates, our business may not be
successful.

Our financial
position and results of operations will vary depending on a number of factors,
most of which are out of our control

We
anticipate that our operating results will vary widely depending on a number of
factors, some of which are beyond our control. These factors are likely to
include, but not be limited to:

- demand for our online
services by registered users, advertisers and consumers, including the number
of
searches performed by registered users, consumers and the rate at which they
click-through to
paid search listing advertisements;
- prices paid by advertisers
using our service, which fluctuate with the changing market;
- costs of attracting
consumers to our website, including costs of receiving exposure on third-party
websites
and advertising costs;
- costs related to forming
strategic relationships;
- loss of strategic
relationships;
- our ability to
significantly increase our distribution channels;
- competition from companies
offering same or similar products and services and from companies with
much
deeper financial, technical, marketing and human resources;
- the amount and timing of
operating costs and capital expenditures relating to expansion of our
operations;
- costs and delays in
introducing new services and improvements to existing services;
- changes in the growth rate
of Internet usage and acceptance by consumers of electronic commerce;
- technical difficulties,
system failures or Internet downtime;
- government regulations
related to our business, and to the Internet;
- our ability to upgrade and
develop our information technology systems and infrastructure;
- general economic
conditions, as well as those specific to the Internet and related industries.

Because
we have a limited operating history, it is difficult to accurately forecast the
revenues that will be generated from our current and proposed future product
offerings.

Risks Related to
Our Industry

If we are
unable to meet the changing needs of our industry, our ability to compete will
be adversely affected

We
operate in an intensely competitive industry. To remain competitive, we must be
capable of enhancing and improving the functionality and features of our online
services. The Internet portal, the online advertising industry and the Internet
gaming industry are rapidly changing. If competitors introduce new products and
services embodying new technologies, or if new industry standards and practices
emerge, our existing services, technology and systems may become obsolete. There
can be no assurances that we will be successful in responding quickly, cost
effectively and adequately to new developments or that funds will be available
to respond at all. Any failure by us to respond effectively would significantly
harm our business, operating results and financial condition.



Our
future success will depend on our ability to accomplish the following:

- license and develop leading technologies useful
in our business;
- develop and enhance our existing products and
services;
- develop new services and technologies that
address the increasingly sophisticated and varied needs
of prospective
consumers; and
- respond to technological advances and emerging
industry standards and practices on a cost-effective
and timely basis.

Developing
Internet services and other proprietary technology entails significant technical
and business risks, as well as substantial costs. We may use new technologies
ineffectively, or we may fail to adapt our services, transaction processing
systems and network infrastructure to user requirements or emerging industry
standards. If our operations face material delays in introducing new services,
products and enhancements, our users may forego the use of our services and use
those of our competitors. These factors could have a material adverse effect on
our financial position and results of operations.

**Risks
Associated with the Internet and Internet Games**

Consumer
use of the Internet as a medium for commerce is a recent phenomenon and is
subject to a high level of uncertainty. While the number of Internet users has
been rising, the Internet infrastructure may not expand fast enough to meet the
increased levels of demand. If use of the Internet as a medium for commerce does
not continue to grow or grows at a slower rate than we anticipate, the number of
registered users of our site would be lower than expected and our business would
be harmed.

If our web
portal is unable to achieve and maintain a critical mass of registered users,
advertisers and consumers, we may be unable to sell advertising or to generate
revenue

The
success of our web portal is dependent upon achieving significant market
acceptance of our site by registered users, advertisers and consumers. Internet
advertising in general is at an early stage of development and most potential
advertisers have only limited experience advertising on the Internet and have
not devoted a significant portion of their advertising expenditures to Internet
advertising. Our competitors and potential competitors may offer more
cost-effective advertising solutions, which could damage our business. In
addition, our website may not achieve significant acceptance by registered users
and consumers. Failure to achieve and maintain a critical mass of registered
users; advertisers and consumers would seriously harm our business.

Our business
may be subject to government regulation and legal uncertainties that may
increase the costs of operating our web portal, limit our ability to sell
advertising, or interfere with future operations of the Company

There
are currently few laws or regulations directly applicable to access to, or
commerce on, the Internet. Due to the increasing popularity and use of the
Internet, it is possible that laws and regulations may be adopted, covering
issues such as user privacy, defamation, pricing, taxation, content regulation,
quality of products and services, and intellectual property ownership and
infringement. Such legislation could expose the Company to substantial liability
as well as dampen the growth in use of the Internet, decrease the acceptance of
the Internet as a communications and commercial medium, or require the Company
to incur significant expenses in complying with any new regulations. The
European Union has adopted privacy and copyright directives that may impose
additional burdens and costs on international operations.

Because
the growing popularity and use of the Internet has burdened the existing
telecommunications infrastructure and many areas with high Internet usage have
begun to experience interruptions in phone services, some local telephone
carriers have petitioned the FCC to regulate the Internet and to impose access
fees. Increased regulation or the imposition of access fees could substantially
increase the costs of communicating on the web, potentially decreasing the
demand for our service.

A
number of proposals have been made at the federal, state and local level that
would impose additional taxes on the sale of goods and services through the
Internet. Such proposals, if adopted, could substantially impair the growth of
electronic commerce and could adversely affect us.

We are
also subject to new laws such as the Digital Millennium Copyright Act, which is
intended to reduce the liability of online service providers for listing or
linking to third-party websites that include materials that infringe copyrights.
Also, the Children's Online Protection Act and the Children's Online Privacy Act
will restrict the distribution of certain materials deemed harmful to children
and impose additional restrictions on the ability of online services to collect
user information from minors. Furthermore, the Protection of Children from
Sexual Predators Act mandates that electronic communication service providers
report facts or circumstances from which a violation of child pornography laws
is apparent. Although this will not have a direct impact on our business, we may
incur additional costs to service our existing customers or to work with our
affiliates.

In
addition, because legislation and other regulations relating to online games
vary by jurisdiction, from state to state and from country to country, it is
difficult for us to ensure that our players are accessing our portal from a
jurisdiction where it is legal to play our games.  Although we believe we have adequate controls in place, we
cannot ensure that we will not be subject to enforcement actions as a result of
this uncertainty and difficulty in controlling access.

We are
constantly reviewing various pieces of legislation, and cannot currently predict
the effect, if any, that this legislation will have on our business. There can
be no assurances that this legislation will not impose significant additional
costs on our business or subject the Company to additional liabilities.
Moreover, the applicability to the Internet of existing laws governing issues
such as gambling, property ownership, copyright, defamation, obscenity and
personal privacy is uncertain. The Company may be subject to claims that our
services violate such laws. Any new legislation or regulation in Canada, the
United States or abroad or the application of existing laws and regulations to
the Internet could damage our business.

Due to
the global nature of the Internet, it is possible that the governments of other
states and foreign countries might attempt to regulate its transmissions or
prosecute the Company for violations of their laws. The Company might
unintentionally violate such laws. Such laws may be modified, or new laws may be
enacted, in the future. Any such development could damage our business in a
material way.

We
cannot predict what new laws will be enacted or how courts will interpret both
existing and new laws.  As a result,
we are uncertain about how new laws or the application of existing laws may
affect our business. In addition, our business may be indirectly affected by our
suppliers or customers who may be subject to such legislation. Increased
regulation of the Internet may decrease the growth in the use of the Internet or
hamper the development of Internet commerce and online entertainment, which
could decrease the demand for our services, increase our cost of doing business
or otherwise have a material adverse effect on our business, results of
operations and financial condition.

**Risks
Associated With our Common Stock**

We are indebted
to lenders, which may limit your ability to influence the outcome of key
transactions, including changes of control

During
2001, we issued a $1,250,000 12% secured convertible Debenture "A", due
April 16, 2006. Bingo, Inc. holds this Debenture "A" in its entirety. During
2002, we issued $145,000 12% convertible Debenture "B" due July 2, 2006.
Bingo, Inc. acquired $50,000 of this Debenture "B". The remaining holders of
Debenture "B" are several unrelated parties. Our President
and Chief Executive Officer is a potential beneficiary of several discretionary
trusts that hold approximately 80% of the shares of Bingo Inc.

In
addition, the Debenture "A" holders were granted warrants entitling them to
purchase, for a period of three years from the issuance date of the Debenture
"A", up to 12,000,000 shares of common stock of the Company at an exercise
price of $0.25 per share. 7,200,000 "A" Warrants were cancelled during May
2002, in exchange for unused advertising inventory on
the bingo.com website. The Debenture "B" holders were granted warrants
entitling them to purchase, for a period of three years from the issuance date
of the Debenture "B", up to 580,000 shares of common stock of the Company at
an exercise price of $0.25 per share.

As
secured debt holders of Debenture "A" and Debenture "B", these
lenders' interests may differ from the interests of our Company or our
stockholders. Our current operations do not generate cash from which the
debentures can be repaid. If we are unable to repay the Debenture "A" when
it becomes due, the holder of the Debenture "A" may be able to sell
or otherwise realize against our assets in preference to other creditors and to
our stockholders or negotiate terms to extend the due date of the Debenture
"A" that are unfavorable to us.

The
holder of Debenture "A" may also convert the Debenture "A" at its option
into shares of common stock at a conversion price of $0.125 per share. The
accrued interest may also be paid in shares of common stock, valued at $0.25 per
share, at the option of the Company when the interest becomes payable, in April
2003. The Company is in negotiations with the holder of Debenture "A" in
regards to repayment of this interest. The conversion of the balance of the
debentures Debenture "A" & Debenture "B" (the "Debentures")
outstanding at December 31, 2002 into shares of common stock would have resulted
in Bingo, Inc. owning an aggregate of approximately 43% of our common stock. The
conversion of the Debentures would provide the lenders with a certain level of
control over matters requiring approval of our stockholders and may result in
dilution to our stockholders. In addition, the holders of the Debentures may
exercise their warrants, which would increase each of the foregoing risks.



Our shares
are considered Penny Stock and are subject to the Penny Stock rules, which may
adversely affect your ability to sell your shares

Rules
15g-1 through 15g-9 promulgated under the Exchange Act impose sales practice and
disclosure requirements on certain brokers-dealers who engage in certain
transactions involving Penny Stock.  Subject
to certain exceptions, a Penny Stock generally includes any non-NASDAQ equity
security that has a market price of less than $5.00 per share. We anticipate
that our shares are deemed to be Penny Stock for the purposes of the Exchange
Act. The additional sales practice and disclosure requirements imposed upon
brokers-dealers may discourage broker-dealers from effecting transactions in our
shares, which could severely limit the market liquidity of our shares and impede
the sale of our shares in the secondary market.

Under
the Penny Stock regulations, a broker-dealer selling Penny Stock to anyone other
than an established customer or Accredited Investor (generally, an individual
with net worth in excess of $1,000,000 or an annual income exceeding $200,000,
or $300,000 together with his or her spouse) must make a special suitability
determination for the purchaser and must receive the purchaser's written consent
to the transaction prior to sale, unless the broker-dealer or the transaction is
otherwise exempt. In addition, the Penny Stock regulations require the
broker-dealer to deliver, prior to any transaction involving a Penny Stock, a
disclosure schedule prepared by the Commission relating to the Penny Stock
market, unless the broker-dealer or the transaction is otherwise exempt. A
broker-dealer is also required to disclose commissions payable to the
broker-dealer and the registered representative and current quotations for the
securities. Finally, a broker-dealer is required to send monthly statements
disclosing recent price information with respect to the Penny Stock held in a
customer's account and information with respect to the limited market in Penny
Stocks.

Substantial
sales of our common stock could cause our stock price to fall.

If
our stockholders sell substantial amounts of our common stock, including shares
issued upon the exercise of outstanding options and warrants, the market price
of our common stock could decline. As of the date of this report, we have
outstanding 11,104,608shares of common stock, a Debenture
"A" payable convertible at the option of the holder into a total of
10,000,000 shares of common stock and a Debenture "B" payable convertible at
the option of the holders into a total of 967,000 shares of common stock, stock
purchase Warrant "A" to purchase a total of 4,800,0000 shares of common
stock and stock purchase Warrant "B" to purchase a total of 580,0000 shares
of common stock, and stock purchase options to acquire an aggregate of 2,700,000
shares of common stock, of which 2,058,000 were vested and exercisable as at
December 31, 2002.

Holders
of such warrants and options are likely to exercise them when, in all
likelihood, we could obtain additional capital on terms more favorable than
those provided by the options and warrants. Further, while our warrants and
options are outstanding, our ability to obtain additional financing on favorable
terms may be adversely affected.

**We
have not declared dividends and may never declare dividends, which may affect
the value of your shares**

We
have never declared or paid any dividends on our common stock and do not expect
to pay any dividends in the near future.

ITEM 2. PROPERTIES.

Our
primary administrative, sales and marketing facility is located in leased space
in Vancouver, British Columbia.  This
facility occupies approximately 2,000 square feet.  We entered into a sublease arrangement on March 1, 2002 with
a term of 43 months and ending September 29, 2005. The monthly rental is
approximately $2,400 per month. We believe that these facilities will be
adequate to meet our requirements for the foreseeable future and that suitable
additional space will be available if needed. Other than described above,
neither we, nor any of our subsidiaries presently own or lease any other
property or real estate.

ITEM 3. LEGAL PROCEEDINGS.

Other
than described below, the Company is not currently a party to any legal
proceeding, and was not a party to any other legal proceeding during the fiscal
year ended December 31, 2002. Management of the Company is currently not aware
of any other legal proceedings proposed to be initiated against the Company.
However, from time to time, the Company may become subject to claims and
litigation generally associated with any business venture. The Company has
included in the accounts an amount of $23,000 net from the cancellation of
capital leases and the settlement of outstanding debts. Should the Company be
unable to successfully negotiate a settlement with its outstanding payables an
unrecorded liability will be incurred.

On
July 6, 2001, Roger W. Ach, II, filed a complaint in the Court of Common Pleas,
Hamilton County, Ohio against the Company in connection with a promissory note
issued by the Company.  Mr. Ach
alleges that on or about March 16, 2001 the
Company borrowed the sum of $45,000 and executed and delivered to him a
promissory note and that the Company owes him the amount of the Note together
with interest from March 16, 2001 at the rate of prime plus 1%.  Mr. Ach demands judgment against the Company in the sum of
$45,000, plus interest and costs.

On
October 5, 2001, the Company filed an Answer, Counterclaim and third party
complaint in defense of the proceedings commenced, among other things, denying
the allegation that any moneys are due to Mr. Ach and counterclaiming against
him and bringing a third party complaint against the Lottery Channel, Inc. for
payment of outstanding invoices of $39,168 plus interest, costs and attorney
fees.

The
Company believes that Mr. Ach's complaint is without merit and intends to
vigorously defend these proceedings and believes it is not likely to produce an
outcome which would have a material adverse effect on the Company's consolidated
financial position or results of operations.

Subsequent
to the year ended December 31, 2002 the Company and Mr. Ach agreed to defer the
complaint and counterclaim, for 90 days in an attempt to effect settlement.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
  HOLDERS.

We
held our Annual Meeting of Stockholders on October 8, 2002 for the purposes of
electing our directors, to ratify the appointment of Davidson & Company as
our independent auditors for the 2002 fiscal year, to ratify and approve the
amendment of the Company's Articles of Incorporation, subject to the
discretion of the Board of Directors, to effect a Reverse split of the
Company's common stock at a ratio of up to one for five, to ratify and approve
the amendment of the Company's Articles of Incorporation, increasing the
number of authorized shares of the Company's common stock to 100,000,000
shares of common stock with a $0.001 par value should the reverse split option
occur, and to ratify the actions of the Company's Officers and Directors for
the last year and for the period from the 2001 Fiscal year end through to the
date of the shareholder meeting.

All nominees for
directors were elected, the appointment of auditors was ratified, the proposal
to amend the Company's Articles of Incorporation to effect a Reverse split of
the Company's common stock at a ratio of up to one for five was ratified, the
proposal to amend the Company's Articles of Incorporation, increasing the
number of authorized shares of the Company's common stock to 100,000,000
shares of common stock with a $0.001 par value should the reverse split occur
was ratified, and the actions of the Company's Officers and Directors for the
last year and for the period from the 2001 Fiscal year end through to the date
of the shareholder meeting were ratified. The voting on each matter is set forth
below:

Election
of the Directors of the Company.

**Nominee                    
For                 
Against            
Abstain**

T.
M. Williams            7,387,518           
64,178              
17,779

P.
A. Crossgrove        7,384,652         
    65,778              
  19,045

Proposal to ratify the
appointment of Davidson & Company as our independent auditors for the 2002
fiscal year.

**For                         
Against                        
Abstain**

7,397,208                      
57,363                 
           
14,904

Proposal to amend the
Company's Articles of Incorporation, subject to the discretion of the Board of
Directors, to effect a reverse split of the Company's common stock at a ratio
of up to one for five.

**For                         
Against                        
Abstain**

7,261,506                   
 
169,666                         
 
38,303

Proposal to amend the
Company's Articles of Incorporation to increase the number of authorized
shares of the Company's common stock to 100,000,000 shares of common stock
with a $0.001 par value should a reverse split occur.

**For                         
Against                        
Abstain**

7,267,161                  
   
173,750               
         
28,564

Proposal
to ratify the actions of the Company's Officers and Directors for the last
year and for the period from the 2001 Fiscal year end through to the date of the
shareholder meeting (October 8, 2002).

**For                         
Against                        
Abstain**

7,296,544                    
 
129,198                   
      43,733





PART
II

## ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND
  RELATED STOCKHOLDER MATTERS.

Our Common Stock is
currently quoted on the National Association of Securities Dealers OTC Bulletin
Board (the "OTCBB") under the symbol BIGR.

On
March 19, 1997, the Company's common stock was approved for trading on the OTCBB
under the symbol "PGLB".  In
January 1999, when we changed our name to Bingo.com, Inc., our OTCBB symbol was
changed to "BIGG".  On July 26,
1999, we changed our trading symbol from "BIGG" to "BIGR". 
There were no trades of our securities on the OTCBB prior to the first
quarter 1999.  The bid quotations
set forth below, reflect inter-dealer prices, without retail mark-up, mark-down
or commission and may not reflect actual transactions.

|Quarter
      Ended      | High  | Low   
|------------------------ | ----- | ------
|December
      31, 2002  | $0.05 | $0.025
|September
      30, 2002 | $0.08 | $0.04 
|June
      30, 2002      | $0.13 | $0.04 
|March
      31, 2002     | $0.15 | $0.07 
|December
      31, 2001  | $0.29 | $0.11 
|September
      30, 2001 | $0.52 | $0.22 
|June
      30, 2001      | $0.72 | $0.08 
|March
      31, 2001     | $0.47 | $0.13 

On
April 11, 2003, the last reported sale price of our common stock, as reported by
the OTCBB, was $0.025 per share.

As of
April 9, 2003, the Company believes there are approximately 3,825 shareholders
(including nominees and brokers holding street accounts) of the Company's shares
of common stock.

Other
than described above, the Company's shares of common stock are not and have not
been listed or quoted on any other exchange or quotation system.

Dividend Policy

We have not declared or
paid any cash dividends on our common stock since our inception, and our Board
of Directors currently intends to retain all earnings for use in the business
for the foreseeable future. Any future payment of dividends will depend upon our
results of operations, financial condition, cash requirements and other factors
deemed relevant by our Board of Directors.

Recent Sales of
Unregistered Securities

On
July 2, 2002, the Company received a loan from and issued a convertible
Debenture "B for $145,000. Bingo, Inc., an Anguilla corporation holds $50,000
of this Debenture "B". Our President and
Chief Executive Officer is a potential beneficiary of several discretionary
trusts that hold approximately 80% of the shares of Bingo Inc. The remaining
holders of the Debenture "B" are several unrelated parties.

Under
the terms of the Debenture "B" interest shall accrue on the outstanding
principal amount of the Debenture "B" at a fixed
rate of 12% per annum. The interest will become payable on July 2, 2004.
("Accrued Interest Payment Date") Thereafter, interest shall accrue and be
payable on the first business day of each succeeding quarter through and
including July 2, 2006. All principal, accrued but unpaid interest and any other
amounts owing are due and payable at maturity
on July 2, 2006.

The
Company has the option to pay all accrued interest on
the Accrued Interest Payment Date, and shall pay all other interest thereafter
accrued, in cash, common stock of the Company, or a combination
of both cash and common stock. Any amounts remaining unpaid on the Debenture
"B" on the maturity date, whether principal, interest or other amounts due,
shall be paid in full in cash on such date. Any common stock of the Company
delivered to the holders of Debenture "B" in payment of the Debenture
"B" will be valued at $0.25 per share.

The holders of the
Debenture "B" received a total of 580,000 common stock purchase warrants
with an exercise price of $0.25 per share. The common stock purchase warrants
issued in connection with the Debenture "B" are exercisable for a period of
three years from the date of the Debenture "B". The holders of the Debenture
"B" have the right, but not the obligation, to elect to convert any or all
of the outstanding principal amount of the Debenture "B" into shares of the
Company's common stock at a conversion price of $0.15 per share until the
third anniversary date of the Debenture "B".

The
Debenture "B" transaction was private in nature, and the Debenture "B"
and the common stock purchase warrants issued in connection with the Debenture
"B" were issued in reliance upon Regulation S promulgated under the
Securities Act of 1933, as amended (the "Securities Act").

During
the year ended December 31, 2002 the Company issued 250,000 shares of common
stock to the former Chief Executive of the Company under the terms of a revised
employment agreement. The agreed value of $42,500 for these shares was recorded
in accrued liabilities at December 31, 2001. These shares were issued pursuant
to exemptions from the registration requirements of the Securities Act, and are
subject to certain resale restrictions.

Securities
authorized for issuance under equity compensation plans.

The Company has reserved
a total of 1,895,000 common shares for issuance under its 1999 stock option
plan.  The Company has granted a
total of 1,800,000 (2001 - 1,600,000) stock purchase options under this plan,
1,700,000 (2001 - 1,575,000) of which remain outstanding at December 31, 2002.

The Company has reserved
a total of 2,000,000 common shares for issuance pursuant to grants under the
2001 stock option plan.  The Company
has granted a total of 1,400,000 (2001 - 865,000) stock options under the 2001
plan, 1,000,000 (2001 - 865,000) of which remain outstanding as at December 31,
2002.  750,000 of the stock options
outstanding at December 31, 2002 were granted with vesting provisions as to 10%
vesting at the grant date, an additional 15% vesting one year following the date
of grant and an additional 2% vesting per month thereafter.

Both plans were approved
in 2001 by the Company's shareholders.

Equity
Compensation Plan Information

|Plan category                                                    | Number
      of securities to be issued upon exercise of outstanding options, warrants
      and rights | Weighted
      average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance
|---------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------- | ------------------------------------------------------------
|                                                                 | (a)                                                                                                     | (b)                                                                               | (c)                                                         
|Equity
      compensation plans approved by security holders     | 2,700,000                                                                                               | $0.59                                                                             | 1,195,000                                                   
|Equity
      compensation plans not approved by security holders | 0                                                                                                       | 0                                                                                 | 0                                                           
|Total                                                            | 2,700,000                                                                                               | $0.59                                                                             | 1,195,000                                                   

ITEM
6. SELECTED FINANCIAL DATA

The
following selected consolidated financial data should be read in conjunction
with the audited Consolidated Financial Statements and Notes thereto included in
Item 8, with "Item 7.  Management's
Discussion and Analysis of Financial Condition and Results of Operations"
and with other financial data included elsewhere in this Form 10-K. The
consolidated statement of operations data for the year ended December 31, 2002,
and the consolidated balance sheet data as of December 31, 2002 are derived from
our audited consolidated financial statements included in Item 8 of this report,
which have been audited by Dohan & Company, CPA.'s, P.A., independent
auditors. The consolidated statement of operations data for the year ended
December 31, 2001, and the consolidated balance sheet data as of December 31,
2001 are derived from our audited consolidated financial statements included in
Item 8 of this report, which have been audited by Davidson and Company,
independent auditors. The consolidated statement of operations data for the year
ended December 31, 2000, are derived from our audited consolidated financial
statements included in Item 8 of this report, which have been audited by Grant
Thornton, independent auditors.

The
independent auditors' reports appearing elsewhere in this document contain
explanatory paragraphs that state that the Company's losses and negative cash
flows from operations raise substantial doubt about our ability to continue as a
going concern. The consolidated financial statements and the selected financial
data do not include any adjustments that might result from the outcome of that
uncertainty.

The
consolidated statement of operations data for the years ended December 31, 1999,
and the consolidated balance sheet data as of December 31, 2000, and 1999 are
derived from audited consolidated financial statements not included in this
report. The historical results are not necessarily indicative of results to be
expected in any future period.

|                                                 |   |            |   | Year
      Ended December 31, |   |             |  
|------------------------------------------------ | - | ---------- | - | ----------------------------- | - | ----------- | -
|                                                 |   | 2002       |   | 2001                          |   | 2000        |  
|Consolidated
      Statement of Operations Data: |   |            |   |                               |   |             |  
|Revenue                                          | $ | 717,192    | $ | 1,734,322                     | $ | 1,119,864   | $
|Cost
      of revenue                            |   | 351,207    |   | 1,093,963                     |   | 861,200     |  
|Gross
      profit (loss)                        |   | 365,985    |   | 640,360                       |   | 258,664     |  
|Operating
      expenses including interest      |   | 1,334,728  |   | 2,597,380                     |   | 3,584,536   |  
|Interest
      and other income                  |   | 35         |   | 1,821                         |   | 36,880      |  
|Loss
      from continuing operations            |   | (968,708)  |   | (1,955,200)                   |   | (3,288,992) |  
|Loss
      from discontinued operations          |   | --         |   | --                            |   | (45,899)    |  
|Net
      Loss                                   | $ | (968,708)  | $ | (1,955,200)                   | $ | (3,334,891) | $
|                                                 |   |            |   |                               |   |             |  
|Basic
      and diluted loss per share           | $ | (0.09)     | $ | (0.19)                        | $ | (0.33)      | $
|Weighted
      average common shares Outstanding |   | 10,953,238 |   | 10,447,200                    |   | 10,065,054  |  



|                                           |   |             |   | Year
      Ended December 31, |   |           |  
|------------------------------------------ | - | ----------- | - | ----------------------------- | - | --------- | -
|                                           |   | 2002        |   | 2001                          |   | 2000      |  
|Consolidated
      Balance Sheet Data:     |   |             |   |                               |   |           |  
|Cash
      and cash equivalents            | $ | 14,682      | $ | 14,028                        | $ | 174,463   | $
|Working
      capital (deficit)            |   | (1,299,148) |   | (1,054,578)                   |   | (428,256) |  
|Total
      assets                         |   | 1,823,821   |   | 2,599,563                     |   | 2,715,258 |  
|Total
      liabilities                    |   | 2,730,848   |   | 2,555,088                     |   | 1,331,237 |  
|Long
      term obligations                |   | 1,395,000   |   | 1,125,974                     |   | 377,136   |  
|Total
      stockholders' equity (deficit) |   | (907,027)   |   | 44,475                        |   | 1,384,021 |  

## ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
  FINANCIAL CONDITION AND RESULTS OF OPERATION.

The
information contained in this Management's Discussion and Analysis of Financial
Condition and Results of Operation contains "forward looking
statements." Actual results may materially differ from those projected in
the forward looking statements as a result of certain risks and uncertainties
set forth in this report. Although management believes that the assumptions made
and expectations reflected in the forward looking statements are reasonable,
there is no assurance that the underlying assumptions will, in fact, prove to be
correct or that actual future results will not be materially different from the
expectations expressed in this Annual Report. The following discussion should be
read in conjunction with the audited Consolidated Financial Statements and
related Notes thereto included in Item 8, with "Item 6. 
Selected Financial Data," with the Risk Factors section of Item 1, and
with the Special Note regarding forward-looking statements included elsewhere in
this report.

#### 

#### OVERVIEW

Since
1999, the Company has been focused on the development of prize-based, play for
free Internet games, with an emphasis on entertainment. The Company began to
experience revenue growth from these games in fiscal 2000.

The
majority of the Company's revenue in 2002 was derived from the sale of
Internet advertising. The Company expects that such sales will continue to
contribute a significant portion of the revenue for the foreseeable future. 
The Company intends to continue to diversify its revenue sources so that
it less dependent on a single revenue stream. 
However, until other sources of reliable revenue can be achieved, the
Company continues to be subject to the Internet advertising market. Sales of
advertising remain the dominant source of revenue for the Company. There can be
no assurances that the Company will be successful in diversifying its revenue
base.

The
Company has incurred significant losses since inception, and as of December 31,
2002 had an accumulated deficit of approximately $9,174,000. The Company will continue to
incur losses until revenue grows sufficiently to cover ongoing operating costs,
including the costs of sales and marketing efforts. There can be no assurances
that this will occur. The Company has made a significant investment in the
development of the Company's website, purchase of domain name, branding,
marketing, and maintaining operations. The Company expects to continue to incur
costs in order to build the business. There can be no assurances that the costs
invested in building the business will result in profitable operations.

Moving
forward, the Company will continue to control operating costs and look for ways
to operate efficiently. The Company is working to settle old, outstanding
accounts payable, so that it can move forward with a more stable financial
footing.

As
of the date of this report, the Company has utilized substantially all of its
available funding. The Company's continuation as a going concern will depend
on its ability to generate sufficient cash flow from operations to cover
operating costs, or to raise additional capital. No assurance can be given that
the Company will be able to generate adequate cash flow to fund ongoing
operating costs or to raise additional funds. In the absence of sufficient cash
flow, the Company may be required to limit operations.

### CRITICAL ACCOUNTING
POLICIES

The
following discussion of critical accounting policies is intended to supplement
the Summary of Significant Accounting Policies presented as Note 2 to our 2002
audited consolidated financial statements presented elsewhere in this report. 
Note 2 summarize the accounting policies and
methods used in the preparation of our consolidated financial statements.
The policies discussed below were selected because they require the more
significant judgments and estimates in the preparation and presentation of our
financial statements. On an ongoing basis, the Company evaluates these judgments
and estimates, including whether there are any uncertainties as to compliance
with the revenue recognition criteria described below, and recoverability of
long-lived assets, as well as the assessment as to whether there are contingent
assets and liabilities that should be recognized or disclosed for the
consolidated financial statements to fairly present the information required to
be set forth therein. The Company bases its estimates on historical experience,
as well as other events and assumptions that are believed to be reasonable at
the time. Actual results could differ from these estimates under different
conditions.

#### Revenue Recognition

Revenue
from the sale of advertising is recognized as the service is delivered on the
website, as the advertising campaign or the impressions and clicks are made on
the website. Revenue from advertising campaigns that span a number of months is
recognized equally over the term of the campaign.

#### Impairment of
Long-lived Assets

Management
evaluates long-lived assets for impairment in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 144 "Accounting for the Impairment or Disposal of Long-Lived Assets" and
SFAS No. 142 "Accounting for Goodwill and Other Intangible Assets".
These assets comprise mainly property and equipment, and the bingo.com domain
name. The impairment review is performed by the Company, whenever events and
circumstances indicate that the assets may be impaired. In performing this
review, we estimate the future net cash flows from the assets and compare this
amount to the carrying value. If this review indicates the carrying value may
not be recoverable, impairment losses are measured and recognized based on the
difference between the estimated discounted cash flows over the remaining life
of the assets and the assets' carrying value. Changes in our future net cash
flow estimates may impact our assessment as to whether a particular long-lived
asset has been impaired.



##### SOURCES OF REVENUE AND
REVENUE RECOGNITION

The
Company generates the majority of its revenue from the sale of advertising on
its website. We recognize as revenues the amount paid to us upon the delivery
and fulfillment of advertising in the form of banner and button ads, email, rich
media and newsletters, provided that the collection of the resulting receivable
is probable.

In
fiscal 2000, the Company adopted EITF No. 99-17 "Accounting for Advertising
Barter Transactions". EITF 99-17 provides that the Company recognize revenue
and advertising expenses from barter transactions at the fair value only when it
has a historical practice of receiving or paying cash for similar transactions.
The Company barters portions of the unsold advertising impressions generated by
its website in exchange for advertising in media properties owned by third
parties. The Company records revenues and costs for such barter transactions at
the market value of the advertising exchanged, with no net income or loss
recognized. Barter revenue totaled $4,000 for the year ended December 31, 2002
and $372,000 for the year ended December 31, 2001.

NEW
ACCOUNTINGPRONOUNCEMENTS

In
July 2002, the Financial Accounting Standards Board (FASB) issued SFAS No. 146,
"Accounting for Costs Associated with Exit or Disposal Activities " (SFAS
146), which addresses financial accounting and reporting associated with certain
exit or disposal activities. Under SFAS 146, costs associated with certain exit
or disposal activities shall be recognized and measured at their fair value in
the period in which the liability is incurred rather than at the date of a
commitment to an exit or disposal plan.  The
Company is required to adopt SFAS 146 for all exit and disposal activities
initiated after December 31, 2002.  The
adoption of this interpretation is not anticipated to have a material effect on
our financial position or results of operations.

In
November 2002, the FASB issued Interpretation No. 45, " Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others" (FIN 45). Fin 45 provides guidance on
the disclosure to be made by a guarantor in its interim and annual financial
statements about its obligations under certain guarantees that it has issued and
also clarifies that a guarantor is required to recognize, at the inception of a
guarantee, a liability for the fair value of the obligation undertaken in
issuing the guarantee. The disclosure requirements of FIN 45 are effective for
financial statements of interim or annual periods ending after December 15, 2002
and its recognition requirements are applicable for guarantees. The adoption of
this interpretation is not anticipated to have a material effect on our
financial position or results of operations.

In
December 2002, the FASB issued SFAS No. 148 "Accounting for Stock-Based
Compensation". This statement amends SFAS 123, "Accounting for
Stock-Based Compensation". SFAS 148 provides alternative methods of
transition for companies that voluntarily change to the fair value-based method
of accounting for stock-based employee compensation. In addition, this statement
amends the disclosure requirements of SFAS 123 to require prominent disclosures
in both annual and interim financial statements about the method of accounting
for stock-based compensation and the effect of the method used on reported
results. The disclosure requirements of this statement are effective for
financial statements of interim or annual periods ending after December 15,
2002.

In
January 2003, the FASB issued FASB Interpretation No. 146, "Consolidation of
Variable Interest Entities" (FIN 46). Fin 46 requires a company to consolidate
any variable interest entities for which that company has a controlling
financial interest. Fin 46 also requires disclosures about variable interest
entities that the company is not required to consolidate, but which it has a
significant variable interest. The Company is required to adopt the
consolidation requirements of FIN 46 for variable interest entities created
after January 2003. The adoption of this interpretation is not anticipated to
have a material effect on our financial position or results of operations.

PRIOR
YEAR ADJUSTMENT

Debenture
"A"

On
April 16, 2001, the Company received a loan from and issued a secured
convertible Debenture "A" to Redruth Ventures Inc., a British Virgin Islands
corporation, for $750,000, and to Bingo, Inc., an Anguilla corporation, for
$500,000 (collectively, "the Lenders"). T.M. Williams, The President and
Chief Executive Officer of the Company, is the potential beneficiary of various
discretionary trusts that hold approximately 80% of the shares of Bingo Inc.

The
Lenders received a total of 12,000,000 common stock purchase warrants with an
exercise price of $0.25 per share. The common stock purchase warrants issued in
connection with the Debenture "A" are exercisable for a period of three
years from the date of the Debenture "A". The Company did not account for
the value of the warrants upon issuance of the Debenture "A" in accordance
with APB 14 "Accounting for Convertible Debt and Debt Issued with Stock
Purchase Warrants". Using the Black-Scholes option pricing model, the
warrants have an estimated value of $898,394, using the following assumptions:
no annual dividend, volatility of 137%, risk-free interest rate of 5.17% and a
term of three years. Due to the illiquidity of the Company's shares, a block
discount of 40% ($359,357) was applied to this value providing a warrant
debenture discount of $539,036.

The
Company has restated the comparative prior periods presented in the December 31,
2002 consolidated statements of operations to reflect additional interest
expense for the full discounted value of the warrants in the amount of $539,036,
which will be amortized to interest expense over the next five years.

The
total effect of the restatement was to increase interest expense by $76,363,
increase debenture discount by $462,673and additional paid-in capital by
$539,036 for the year ended December 31, 2001, increasing the net loss for the
year from $1,878,837 to $1,955,200 and accumulated net deficit from $8,129,172
to $8,205,535. The interest expense and additional paid-in capital accounts in
the comparative prior periods balance sheet, statement of operations, statement
of changes in stockholders' equity and statement of cash flows have been
restated for the effects of the adjustments.

##### RESULTS OF OPERATIONS

##### Years
Ended December **31, 2002 and 200****1**

Revenue

Revenue
decreased to $717,000 for the year ended December 31, 2002, a decrease of 55%
over revenue of $1,734,000 for the same period in the prior year. This decrease can be explained generally by the downturn in the North
American economy and the erosion of the market for Internet advertising. More
specifically, the Company had fewer people focused on selling advertising, largely because of the restructuring of the business of
the Company that took place during the previous year and the cancellation of the
outside parties sales contracts effected during the second quarter of 2002. In
addition there has been a downturn in Internet advertising by online gaming
companies due to certain credit card companies no longer accepting online gaming
transactions. Therefore many of these companies have reduced their online
advertising expenditures at the bingo.com website.

Cost of revenue

The
Company recorded cost of revenue of $351,000 during the year ended December 31,
2002, a decrease of $743,000 or 68% compared to costs of $1,094,000 for the same
period in the prior year. The gross margin improved to 51% in 2002 from 37% in
2001.

Cost
of revenue consists primarily of commissions paid on the sale of advertising,
the cost of hosting the website and the market value of advertising exchanged in
barter transactions (see above). This decrease in cost of revenue in 2002 is due
to fewer people focused on selling advertising therefore less commissions and
fewer barter transactions than in the prior year.

Sales and marketing expenses

Sales
and marketing expenses dropped to $81,000 for the year ended December 31, 2002,
a 59% decrease of $120,000 over 2001 expenses of $201,000. Sales and marketing
expenses include principally costs for marketing, co-brand advertising and
keyword buys for our game site. The balance of marketing and advertising
expenses consists of payroll, consultant, and travel costs. All of these amounts
decreased significantly in 2002 as a result of changes to the business,
particularly as a result of fewer employees being focused on selling. Subsequent
to May 2002 the Company has taken over the advertising, website hosting and ad
serving itself.

We
expect to continue to incur sales and marketing expenses to further our efforts
to increase traffic to our web portal. These costs will include commissions,
salaries, advertising, and other promotional expenses intended to increase our
subscriber base and improve revenue. There can be no assurances that these
expenditures will result in increased traffic or significant new revenue
sources.

General and administrative expenses

General
and administrative expenses consist primarily of payroll costs for the Company's
executive staff, accounting and administrative personnel, premises costs for the
Company's office, legal and professional fees, insurance and other general
corporate and office expenses. General and administrative expenses decreased to
$515,000 for the year ended December 31, 2002, a reduction of 67% over costs of
$1,559,000 for the previous year. General and administrative expenses declined
from the prior year as a result of Company management making great efforts to
control operating costs in order to reduce administrative and other expenses. The Company did,
however incur a one time penalty of $23,000 net from the cancellation of capital
leases and settlement of outstanding debts.

We
expect to continue to incur general and administrative expenses to support the
business, and there can be no assurances that the Company will be able to
generate sufficient revenue to cover these expenses.

Depreciation
and amortization

Depreciation
and amortization includes depreciation of the Company's fixed assets, as well
as amortization of the bingo.com domain name. The Company capitalized the cost of the purchase of the domain name and
was amortizing the cost over five years from the date of commencement of
operations. In 2002 the Company suspended the amortization of the domain name in
accordance with SFAS No. 142
"Accounting for Goodwill and Other Intangible Assets", where companies are
no longer permitted to amortize indefinite assets. Fixed assets are depreciated over the useful lives of the assets, ranging
from three to five years. Depreciation decreased to $177,000 during the year
ended December 31, 2002, a reduction over costs of 71% over costs of $611,000
during the prior year. 50% of this decrease related to the cancellation of the
amortization of the domain name. The remaining 21% decrease in depreciation can
be explained by the fact that the average age of the Company's assets being
older in fiscal 2002, resulting in a lower depreciation base. Finally the
decrease is additionally due to the write-down of capital assets during 2002.

Other
income and expenses

Interest
expense consists of accrued interest on the convertible debentures and other
debt instruments, such as leases and the amortization of the Debenture discount
issued with Debenture "A" and Debenture "B". Interest expense increased
to $292,000 for 2002, an increase of $84,000 (29%) over the prior year's
expense of $201,000. The increase is attributable to interest on the debenture
and the interest expense on the amortization of the debenture discount on the
issue of the Debenture "A" and Debenture "B". The Company began drawing
down the convertible debenture in April 2001, and interest began accruing on the
drawdown amounts at the rate of 12% per annum, commencing on the drawdown date.
The interest is payable on Debenture "A" in 2003 and on Debenture "B" in
2004.

**Income
taxes**

No
income taxes were payable in 2002 or in 2001, as a result of the operating loss
recorded during those years. Based on a number of factors, including the lack of
a history of profits, management believes that there is sufficient uncertainty
regarding the realization of deferred tax assets, and, accordingly, has not booked
an income tax benefit at December 31, 2002 or at 2001. All losses incurred can
be carried forward for seven years for Canadian income tax purposes and twenty
years for United States income tax purposes.

Loss per share and net loss

The
Company ended the year with a net loss of $969,000, a loss per share of $0.09,
which is a 50% improvement over the prior year's net loss and loss per share
of $1,955,000 and $0.19, respectively. 12% of the decrease is due the
cancellation of the amortization of the Domain Name. The 38% reduction for the year ended December 31, 2002, is a result of the
Company's efforts to cut spending and improve the overall financial
performance.

**Years
Ended December 31, 2001 and 2000**

The
year ended December 31, 2000 was our first year of generating revenue.

Total
assets decreased to $2,308,384 as of December 31, 2001 compared to $2,715,258 at
in 2000. The primary reason for this decrease was that cash resources were
invested in the development of the operations during the year. No funds were
raised through the issuance of common stock in 2001. However the Company did
receive a debenture for $1,100,000. In 2001, we invested $191,072 in the
development of Skill-Bingo, which was subsequently written off, and in acquiring
office and computer equipment, compared to $544,593 in 2000. Our cash position
decreased by $160,435 to $14,028 and our working capital position decreased to a
deficit of $1,054,578 from working capital deficit of $428,256.

Of the
$1,907,142 of total expenses for continuing operations for the year ended
December 31, 2001, $1,558,677 was for general and administrative expenses
associated with the operations of the Company. General and administrative
expenses consist primarily of payroll and consultant costs for the Company's
executive staff, accounting and administrative personnel, premises costs, legal
and professional fees for preparation and review of our registration statement,
insurance and other general corporate and office expenses. The balance of
expenses included $85,000 for stock based compensation costs for our executive
and corporate staff, and $224,063 for amortization of capital assets.

Sales
and marketing expenses were $200,607 for the year ended December 31, 2001 and
were $735,659 for the year ended December 31,2000. We incurred costs in 2000 for
initial awareness advertising and for banner advertising for the Website. In
2001 the balance of marketing and advertising expenses consists of payroll and
public relations.

We
expect to continue to incur losses as we continue to build our operations. A
loss of $45,899 was recorded for discontinued operations of the Antigua
operation in 2000.

We had
a net loss of $1,907,142 or $0.18 per share for the year ended December 31,
2001, compared to $3,334,891 or $0.33 per share for the year ended December 31,
2000. 2001 included net interest income of $1,821 and 2000 included net interest
income of $29,101 on our surplus cash balances.

**LIQUIDITY
AND CAPITAL RESOURCES**

The
Company does not yet have an adequate source of reliable, long-term revenue to
fund operations.  As a result, the
Company is reliant on outside sources of capital funding. There can be no
assurances that the Company will in the future achieve a consistent and reliable
revenue stream adequate to support continued operations. In addition, there are
no assurances that the Company will be able to secure adequate sources of new
capital funding, whether it is in the form of share capital, debt, or other
financing sources.

The
Company had cash and cash equivalents of $15,000 and a working capital
deficiency of $1,299,000 at December 31, 2002. This compares to cash and cash
equivalents of $14,000 and working capital deficiency of $1,055,000 at December
31, 2001. The deficiency has increased in fiscal 2002 because the Company has
been unable to settle current liabilities as they come due. In addition the
Company has received loans from T. M. Williams, the President and Chief
Executive Officer of the Company to fund its working capital.

During
the year ended December 31, 2002, the Company used cash of $83,000 in operating
activities compared to using $647,000 in the prior year. The significant
decrease in cash used for operations can be explained mainly by a large
reduction in our operating loss in 2002 as the Company attempted to cut
operating costs and reduce spending.

Net
cash provided by financing activities was $373,000 in 2002, which compares to
cash used of $1,067,000 in 2001. During the year ended December 31, 2001, the
Company issued a secured convertible Debenture "A" in the amount of
$1,250,000, of which $1,100,000 was advanced to the Company at December 31,
2001. During the year ended December 31, 2002 the remaining $150,000 of
Debenture "A" was advanced to the Company. In addition the Company issued a
convertible Debenture "B" for $145,000. The proceeds from the convertible
debentures were used to fund working capital
requirements and pay amounts due under the domain name contract payable. The
outstanding principal advanced on the convertible Debenture "A" and
convertible Debenture "B" bears interest at a rate of 12% per year, and the
Debenture "A" is due on April 16, 2006, whilst Debenture "B" is due on
July 2, 2006. The Debenture "A" is convertible
into common stock of the Company at a conversion rate of $0.125 per share,
whilst Debenture "B" is convertible into common stock of the Company at a
conversion rate of $0.15 per share.

The
Company used cash of $283,000 in investing activities in 2002, compared to using
cash of $573,000 in the prior year. Cash was invested in the domain name rights,
as payments of $197,000 (2001 - $362,000) were made. $185,000 final payment was
made in accordance with the agreement for the minimum guaranteed Domain Name
Purchase payments of the domain name rights and the remaining $12,000 related to
payments based on the continuing 4% of the proceeding months gross revenue as
defined in the amended agreement. (see Item 1 for details of agreement). The
Company during the year ended December 31, 2002 acquired Bingo.com (UK) plc. for
$61,000. The Company deems 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. The Company additionally
acquired fixed assets valued at $85,000 (2001 - $23,000) During the year ended
December 31, 2001 the Company acquired the BiG'r Bingo (Skill Bingo) game for
a cost of $188,000. This cost was written off in 2002.

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 and cash equivalents on hand to conduct our operations through
2003, and are substantially dependent, if the Company fails to generate
sufficient funds, on continued funding from T. M. Williams, our President and
Chief Executive Officer to continue operations. Although our cash flow is
improving, we may need to obtain additional financing to grow our operations for
the duration of 2003.

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, 2002 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 April 2, 2003 and approved the financials
statements for the year ended December 31, 2002.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES
  ABOUT MARKET RISK

As of
December 31, 2002, the Company had not entered into or acquired financial
instruments that have material market risk. The Company has no financial
instruments for trading purposes, 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 report, except for the Debenture "A", which
are due April 2006 and Debenture "B" which are due July 2006. The fair value
of all financial instruments at December 31, 2002 is not materially different
from their carrying value.

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.

### ITEM 8. FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA.

### Supplementary
Financial Information

Quarterly Results of
  Operations

The
following tables present the Company's unaudited consolidated quarterly
results of operations for each of our last eight quarters.  This data has been derived from unaudited consolidated financial
statements that have been prepared on the same basis as the annual audited
consolidated financial statements and, in our opinion, include all normal
recurring adjustments necessary for the fair presentation of such information.
These unaudited quarterly results should be read in conjunction with our audited
consolidated financial statements for the year ended December 31, 2002 included
in Item 8 of this report.

|                                                     |   |                           |   | Three
      Months Ended |  
|---------------------------------------------------- | - | ------------------------- | - | ------------------------ | -
|                                                     |   | March
      31
      2002 |   | June
      30
      2002 |  
|Revenue                                              | $ | 236,955                   | $ | 179,449                  | $
|Cost
      of revenue                                |   | 157,027                   |   | 100,107                  |  
|Gross
      profit                                   |   | 79,928                    |   | 79,342                   |  
|Operating
      expenses and other income / expenses |   | 278,405                   |   | 483,876                  |  
|Net
      loss from continuing Operations            | $ | (198,477)                 | $ | (404,534)                | $
|Basic
      and diluted loss per share               | $ | (0.02)                    | $ | (0.04)                   | $
|Weighted
      average common shares                 |   | 10,854,608                |   | 10,854,608               |  













|                                                     |   |                           |   | Three
      Months Ended |  
|---------------------------------------------------- | - | ------------------------- | - | ------------------------ | -
|                                                     |   | March
      31
      2002 |   | June
      30
      2002 |  
|Revenue                                              | $ | 582,803                   | $ | 475,064                  | $
|Cost
      of revenue                                |   | 463,890                   |   | 243,960                  |  
|Gross
      profit                                   |   | 118,913                   |   | 231,104                  |  
|Operating
      expenses and other income / expenses |   | 880,896                   |   | 676,549                  |  
|Net
      loss from continuing Operations            | $ | (761,983)                 | $ | (445,445)                | $
|Basic
      and diluted loss per share               | $ | (0.08)                    | $ | (0.04)                   | $
|Weighted
      average common shares                 |   | 10,104,608                |   | 10,104,608               |  



The
financial statements of the Company and related schedules described under
"Item 15. Financial Statements and Financial Statement Schedules," are
included following this page.

































BINGO.COM, Inc.



Consolidated
Financial Statements

Years
ended December 31, 2002, 2001 and 2000













Independent Auditors'
Report                                                                                                  
           33



Consolidated
Financial Statements

Balance
Sheets                                                                                                                          
  34

Statements of
Operations                                                                                                             
35

Statements of
Stockholders' Equity (Deficiency)                                                                           
36

Statements of
Cash Flows                                                                                                            
37

Notes to Consolidated Financial Statements                                                                                 
38































INDEPENDENT AUDITORS' REPORT



The Board of Directors and Stockholders

Bingo.com, Inc.



We have
audited the accompanying consolidated balance sheet of Bingo.com, Inc. and
Subsidiaries as of December 31, 2002, and the related consolidated statements of
operations, stockholders equity (deficiency) and cash flows for the year then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit. The consolidated financial statements of
Bingo.com, Inc. and Subsidiaries as of December 31, 2001 and 2000, were audited
by other auditors whose reports dated March 15, 2002 and May 3, 2001,
respectively, expressed an unqualified opinion on those statements. We also
audited the adjustment described in Note 3 that was applied to restate the 2001
consolidated financial statements. In our opinion, such adjustments are
appropriate and have been properly applied.

We
conducted our audit in accordance with auditing standards generally accepted in
the United States of America. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our
opinion, the 2002 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Bingo.com, Inc. and
Subsidiaries as of December 31, 2002 and the results of their operations and
their cash flows for the year then ended in conformity with generally accepted
accounting principles in the United States of America.

The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 1, the Company has
continued to incur operating losses, has used, rather than provided, cash from
operations and has an accumulated deficit of $9,174,243. These factors, and
others, raise substantial doubt about the Company's ability to continue as a
going concern. The ability of the Company to continue operations is subject to
its ability to secure additional capital to meet its obligations and to fund
operations. Management's plans in regard to these matters are also described in
Note 1. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.



/s/ "
Dohan & Company, CPA.'s"



Miami, Florida

April 10, 2003



BINGO.COM,
INC.

Consolidated
Balance Sheets



December
31, 2002 and 2001 (Restated)



|                                                                                                                                       |  |   | 2002        |  |   | RESTATED
      2001
|-------------------------------------------------------------------------------------------------------------------------------------- |  | - | ----------- |  | - | -------------------
|Assets                                                                                                                                 |  |   |             |  |   |                    
|Current
      assets:                                                                                                                  |  |   |             |  |   |                    
|Cash and cash equivalents                                                                                                              |  | $ | 14,682      |  | $ | 14,028             
|Accounts receivable,
      less allowance for
      doubtful accounts of $nil (2001 - $46,185)                                         |  |   | 5,294       |  |   | 351,330            
|Inventory                                                                                                                              |  |   | 2,631       |  |   | -                  
|Prepaid expenses                                                                                                                       |  |   | 14,093      |  |   | 9,178              
|Total
      Current Assets                                                                                                             |  |   | 36,700      |  |   | 374,536            
|                                                                                                                                       |  |   |             |  |   |                    
|Equipment
      (Note 4)                                                                                                               |  |   | 127,469     |  |   | 477,554            
|                                                                                                                                       |  |   |             |  |   |                    
|Other
      assets                                                                                                                     |  |   | 29,675      |  |   | 27,559             
|                                                                                                                                       |  |   |             |  |   |                    
|Domain
      name rights (Note 5)                                                                                                      |  |   | 1,257,241   |  |   | 1,257,241          
|                                                                                                                                       |  |   |             |  |   |                    
|Deferred
      tax asset, less valuation allowance of $3,116,929 (2001 - $2,787,568)
      (Note 10)                                   |  |   | -           |  |   | -                  
|                                                                                                                                       |  |   |             |  |   |                    
|Warrants
      -Debenture discount                                                                                                     |  |   | 372,736     |  |   | 462,673            
|Total
      Assets                                                                                                                     |  | $ | 1,823,821   |  | $ | 2,599,563          
|                                                                                                                                       |  |   |             |  |  
|Liabilities
      and Stockholders' Equity (Deficiency)                                                                                |  |   |             | 
|Current
      liabilities:                                                                                                             |  |   |             |  |   |                    
|Accounts payable                                                                                                                       |  | $ | 597,531     |  | $ | 785,817            
|Accounts payable - related party (Note 12)                                                                                             |  |   | 151,075     |  |   | 84,843             
|Accrued liabilities                                                                                                                    |  |   | 262,072     |  |   | 165,076            
|Unearned Revenue                                                                                                                       |  |   | 12,500      |  |   | -                  
|Loan payable (Note 12)                                                                                                                 |  |   | 197,134     |  |   | 45,385             
|Current portion of contract payable (Note 5)                                                                                           |  |   | -           |  |   | 184,772            
|Current portion of capital leases (Note 6)                                                                                             |  |   | 115,536     |  |   | 163,221            
|Total
      Current Liabilities                                                                                                        |  |   | 1,335,848   |  |   | 1,429,114          
|                                                                                                                                       |  |   |             |  |   |                    
|Capital
      leases payable, net of current portion (Note 6)                                                                          |  |   | -           |  |   | 25,974             
|                                                                                                                                       |  |   |             |  |   |                    
|Debenture
      payable (Note 7)                                                                                                       |  |   | 1,395,000   |  |   | 1,100,000          
|Total
      Liabilities                                                                                                                |  |   | 2,730,848   |  |   | 2,555,088          
|                                                                                                                                       |  |   |             |  |   |                    
|Commitments and contingencies
(Note 6 and 9)                                                                                           |  |   |             |  |   |                    
|                                                                                                                                       |  |   |             |  |   |                    
|Stockholders'
      equity (deficiency) (Note 8):                                                                                      |  |   |             |  |   |                    
|Common stock, $0.001 par value, authorized 50,000,000
      shares; issued and outstanding 11,104,608 shares
      (2001 - 10,854,608) |  |   | 11,105      |  |   | 10,855             
|Additional paid in capital                                                                                                             |  |   | 8,231,531   |  |   | 8,208,862          
|Accumulated deficit                                                                                                                    |  |   | (9,174,243) |  |   | (8,205,535)        
|Accumulated other comprehensive loss:
      Foreign currency translation adjustment                                                    |  |   | 24,580      |  |   | 30,293             
|Total
      (Deficiency) Stockholders' Equity                                                                                          |  |   | (907,027)   |  |   | 44,475             
|                                                                                                                                       |  |   |             |  |   |                    
|Total
      Liabilities and Stockholders ' Equity (Deficiency)                                                                         |  | $ | 1,823,821   |  | $ | 2,599,563          



See
accompanying notes to consolidated financial statements.







BINGO.COM, INC.

Consolidated Statements of Operations



Years ended December 31, 2002, 2001
  (Restated) and 2000



|                                                                             |  |       | 2002       |  |   | RESTATED
      2001 |  |         | 2000       
|---------------------------------------------------------------------------- |  | ----- | ---------- |  | - | ------------------- |  | ------- | -----------
|                                                                             |  |       |            |  |   |                     |  |         |            
|Revenue                                                                      |  | $     | 713,192    |  | $ | 1,362,756           |  | $       | 820,384    
|Barter
      revenue (note 2)                                                |  |       | 4,000      |  |   | 371,566             |  |         | 299,480    
|                                                                             |  |       |            |  |   |                     |  |         |            
|Cost
      of revenue                                                        |  |       | 351,207    |  |   | 1,093,963           |  |         | 861,200    
|                                                                             |  |       |            |  |   |                     |  |         |            
|Gross
      profit                                                           |  |       | 365,985    |  |   | 640,359             |  |         | 258,664    
|                                                                             |  |       |            |  |   |                     |  |         |            
|Operating
      expenses:                                                    |  |       |            |  |   |                     |  |         |            
|Depreciation and amortization                                                |  |       | 177,006    |  |   | 611,147             |  |         | 536,419    
|General
      and administrative                                             |  |       | 514,806    |  |   | 1,558,677           |  |         | 1,988,666  
|Loss
      on disposal of equipment                                          |  |       | 260,531    |  |   | 16,716              |  |         | 154        
|Selling
      and marketing                                                  |  |       | 81,320     |  |   | 200,607             |  |         | 735,659    
|Software
      and website development (Note 2)                              |  | 8,916 |            |  | - |                     |  | 268,296
|Total
      operating expenses                                               |  |       | 1,042,579  |  |   | 2,387,147           |  |         | 3,529,194  
|                                                                             |  |       |            |  |   |                     |  |         |            
|Loss from continuing
      operations                                        |  |       | (676,594)  |  |   | (1,746,788)         |  |         | (3,270,530)
|                                                                             |  |       |            |  |   |                     |  |         |            
|Other
      income (expense):                                                |  |       |            |  |   |                     |  |         |            
|Interest
      expense                                                       |  |       | (292,149)  |  |   | (210,233)           |  |         | (47,563)   
|Interest
      income                                                        |  |       | 35         |  |   | 1,821               |  |         | 29,101     
|                                                                             |  |       |            |  |   |                     |  |         |            
|Loss
      before discontinued operations and income taxes                   |  |       | (968,708)  |  |   | (1,955,200)         |  |         | (3,288,992)
|                                                                             |  |       |            |  |   |                     |  |         |            
|Loss
      from discontinued operations,
      net
      of tax (Note 11)    |  |       | -          |  |   | -                   |  |         | (45,899)   
|                                                                             |  |       |            |  |   |                     |  |         |            
|Loss
      before income taxes                                               |  |       | (968,708)  |  |   | (1,
      955,200)  |  |         | (3,334,891)
|                                                                             |  |       |            |  |   |                     |  |         |            
|Income
      tax expense                                                     |  |       | -          |  |   | -                   |  |         | -          
|                                                                             |  |       |            |  |   |                     |  |         |            
|Net Loss                                                                     |  | $     | (968,708)  |  | $ | (1,
      955,200)  |  | $       | (3,334,891)
|                                                                             |  |       |            |  |   |                     |  |         |            
|Cumulative
      translation adjustment                                      |  |       | (5,713)    |  |   | 35,942              |  |         | (1,538)    
|                                                                             |  |       |            |  |   |                     |  |         |            
|Comprehensive
      Loss                                                     |  | $     | (974,421)  |  | $ | (1,
      919,258)  |  | $       | (3,336,429)
|                                                                             |  |       |            |  |   |                     |  |         |            
|Net
      loss per common share,
      basic
      and diluted (Note 2)      |  | $     | (0.09)     |  | $ | (0.19)              |  | $       | (0.33)     
|                                                                             |  |       |            |  |   |                     |  |         |            
|Weighted
      average common shares outstanding, basic and diluted (Note 2) |  |       | 10,953,238 |  |   | 10,447,200          |  |         | 10,065,054 



See accompanying notes to consolidated
  financial statements.







BINGO.COM,
  INC.

Consolidated
  Statements of Stockholders' Equity (Deficiency)



Years ended December 31, 2002,
  2001(Restated) and 2000



|                                               | Common stock |                |                            |                           | Accumulated
      Other Comprehensive income (loss) |                                              
|---------------------------------------------- | ------------ | -------------- | -------------------------- | ------------------------- | --------------------------------------------------- | ---------------------------------------------
|                                               | Shares       | Amount         | Additional paid-in capital | Shares allotted for issue | Accumulated  (Deficit)                              | Foreign
      currency translation adjustment
|Balance,
      December 31, 1999               | 9,916,668    | $
      9,917  | $
      7,347,803          | $
      226,563           | $
      (2,915,444)                                 | $
      (4,111)                              
|                                               |              |                |                            |                           |                                                     |                                              
|Issuance
      of common stock, for services   | 189,000      | 189            | 290,874                    | (226,563)                 | -                                                   | -                                            
|                                               |              |                |                            |                           |                                                     |                                              
|Repurchase
      of common stock               | (1,060)      | (1)            | (8,777)                    | -                         | -                                                   | -                                            
|                                               |              |                |                            |                           |                                                     |                                              
|Comprehensive
      loss:                      |              |                |                            |                           |                                                     |                                              
|Net loss                                       | -            | -              | -                          | -                         | (3,334,891)                                         | -                                            
|Cumulative translation
      adjustment        | -            | -              | -                          | -                         | -                                                   | (1,538)                                      
|Balance,
      December 31, 2000               | 10,104,608   | 10,105         | 7,629,900                  | -                         | (6,250,335)                                         | (5,649)                                      
|                                               |              |                |                            |                           |                                                     |                                              
|Stock
      based compensation                 | 750,000      | 750            | 39,926                     | -                         | -                                                   | -                                            
|                                               |              |                |                            |                           |                                                     |                                              
|Issuance
      of Warrant "A"                  | -            | -              | 539,036                    | -                         | -                                                   | -                                            
|                                               |              |                |                            |                           |                                                     |                                              
|Comprehensive
      loss:                      |              |                |                            |                           |                                                     |                                              
|Net loss  (Restated,
      Note 3)             | -            | -              | -                          | -                         | (1,955,200)                                         | -                                            
|Cumulative translation
      adjustment        | -            | -              | -                          | -                         | -                                                   | 35,942                                       
|Balance,
      December 31, 2001 (Restated)    | 10,854,608   | 10,855         | 8,208,862                  | -                         | (8,205,535)                                         | 30,293                                       
|                                               |              |                |                            |                           |                                                     |                                              
|Stock
      based compensation                 | 250,000      | 250            | 10,000                     | -                         | -                                                   | -                                            
|                                               |              |                |                            |                           |                                                     |                                              
|Mark
      to market of variable stock options | -            | -              | (21,000)                   | -                         | -                                                   | -                                            
|                                               |              |                |                            |                           |                                                     |                                              
|Issuance
      of Warrants "B"                 | -            | -              | 20,423                     | -                         | -                                                   | -                                            
|                                               |              |                |                            |                           |                                                     |                                              
|Issuance
      of officer stock option         | -            | -              | 13,246                     | -                         | -                                                   | -                                            
|                                               |              |                |                            |                           |                                                     |                                              
|Comprehensive
      loss:                      |              |                |                            |                           |                                                     |                                              
|Net loss                                       | -            | -              | -                          | -                         | (968,708)                                           | -                                            
|Cumulative translation
      adjustment        | -            | -              | -                          | -                         | -                                                   | (5,713)                                      
|Balance,
      December 31, 2002               | 11,104,608   | $
      11,105 | $ 8,231,531                | $ 
      -                | $ (9,174,243)                                       | $
      24,580                               

See accompanying notes to consolidated
  financial statements.







BINGO.COM, INC.

Consolidated
  Statements of Cash Flows



Years ended December 31, 2002, 2001
  (Restated) and 2000

|                                                                         |  |   | 2002      |   | RESTATED
      2001 |   | 2000       
|------------------------------------------------------------------------ |  | - | --------- | - | ------------------- | - | -----------
|Cash
      flows from operating activities:                              |  |   |           |   |                     |   |            
|Net loss                                                                 |  | $ | (968,708) | $ | (1,955,200)         | $ | (3,334,891)
|Items not involving cash:                                                |  |   |           |   |                     |   |            
|Stock based compensation                                                 |  |   | 2,496     |   | 85,000              |   | 64,500     
|Depreciation and amortization                                            |  |   | 177,006   |   | 611,147             |   | 536,419    
|Domain name purchase payments                                            |  |   | 12,023    |   | -                   |   | -          
|Loss on disposal of discontinued
      operations                        |  |   | -         |   | -                   |   | 45,899     
|Amortization of Warrants -
      Debenture discount                      |  |   | 110,360   |   | 76,363              |   | -          
|Loss on disposal of equipment                                            |  |   | 260,531   |   | 16,716              |   | 154        
|Changes in operating assets and liabilities:                             |  |   |           |   |                     |   |            
|Accounts receivable                                                      |  |   | 346,037   |   | (82,481)            |   | (200,946)  
|Prepaid expenses                                                         |  |   | (4,915)   |   | 41,950              |   | (5,384)    
|Note receivable                                                          |  |   | -         |   | 31,405              |   | 2,931      
|Inventory                                                                |  |   | (2,631)   |   | -                   |   | -          
|Other assets                                                             |  |   | (2,116)   |   | 9,727               |   | -          
|Accounts payable and accrued
      liabilities                           |  |   | (25,835)  |   | 518,656             |   | 236,268    
|Unearned Revenue                                                         |  |   | 12,500    |   | -                   |   | -          
|Net cash used in operating activities                                    |  |   | (83,252)  |   | (646,717)           |   | (2,655,050)
|                                                                         |  |   |           |   |                     |   |            
|Cash
      flows from investing activities:                              |  |   |           |   |                     |   |            
|Acquisition of Equipment                                                 |  |   | (84,263)  |   | (23,088)            |   | (119,629)  
|Acquisition of Skill- Bingo game                                         |  |   | -         |   | (188,348)           |   | -          
|Acquisition of Bingo.com (UK) plc. (Note 14)                             |  |   | (61,440)  |   | -                   |   | -          
|Cash acquired from subsidiary undertakings                               |  |   | 59,026    |   | -                   |   | -          
|Payments on domain name contract payable                                 |  |   | (196,795) |   | (361,869)           |   | (187,859)  
|Net cash used in investing activities                                    |  |   | (283,472) |   | (573,305)           |   | (307,488)  
|                                                                         |  |   |           |   |                     |   |            
|Cash
      flows from financing activities:                              |  |   |           |   |                     |   |            
|Issue of debenture payable                                               |  |   | 295,000   |   | 1,100,000           |   | -          
|Capital lease repayments                                                 |  |   | (73,659)  |   | (78,320)            |   | (181,300)  
|Proceeds from loans and notes payable                                    |  |   | 151,750   |   | 168,385             |   | -          
|Repayment of loans and notes payable                                     |  |   | -         |   | (123,000)           |   | (53,912)   
|Repurchase of common stock                                               |  |   | -         |   | -                   |   | (8,778)    
|Net cash provided by (used in) financing activities                      |  |   | 373,091   |   | 1,067,065           |   | (243,990)  
|                                                                         |  |   |           |   |                     |   |            
|Effect
      of exchange rate changes on
      cash and cash equivalents |  |   | (5,713)   |   | (7,478)             |   | (1,538)    
|Net
      increase (decrease) in cash and cash equivalents               |  |   | 654       |   | (160,435)           |   | (3,208,066)
|                                                                         |  |   |           |   |                     |   |            
|Cash
      and cash equivalents, beginning of year                       |  |   | 14,028    |   | 174,463             |   | 3,382,529  
|Cash
      and cash equivalents, end of year                             |  | $ | 14,682    | $ | 14,028              | $ | 174,463    
|                                                                         |  |   |           |   |                     |   |            
|Supplementary
      information:                                         |  |   |           |   |                     |   |            
|Interest paid                                                            |  | $ | 28,916    | $ | 71,291              | $ | 47,563     
|Income taxes paid                                                        |  | $ | -         | $ | -                   | $ | -          
|Non-cash
      transactions:                                             |  |   |           |   |                     |   |            
|Barter transactions                                                      |  | $ | 4,000     | $ | 371,566             | $ | 299,480    
|Acquisition of domain name                                               |  | $ | -         | $ | -                   | $ | 734,500    
|Non-cash
      financing activities:                                     |  |   |           |   |                     |   |            
|Value assigned on issuance of stock options                              |  | $ | (2,000)   | $ | (40,000)            | $ | 64,500     
|Equipment acquired through capital lease                                 |  | $ | -         | $ | -                   | $ | 424,998    
|Issuance of common stock for services                                    |  | $ | 10,250    | $ | 125,000             | $ | 226,563    

Seeaccompanying notes to consolidated financial statements.



BINGO.COM, INC.

Notes to Consolidated Financial Statements



Years ended December 31, 2002, 2001
  (Restated) and 2000






1.     
Introduction:

Nature
of business

Bingo.com, Inc. (the "Company") was
incorporated on January 12, 1987, under the laws of the State of Florida as
Progressive General Lumber Corp. On January 22, 1999, the Company changed its
name to Bingo.com, Inc.  The Company
is in the business of providing games and entertainment
based on the game of bingo through its Internet portal, www.bingo.com.

Continuing operations

These consolidated financial statements have
been prepared on the going concern basis, which presumes the realization of
assets and the settlement of liabilities in the normal course of operations. 
The application of the going concern basis is dependent upon the Company
achieving profitable operations to generate sufficient cash flows to fund
continued operations, or, in the absence of adequate cash flows from operations,
obtaining additional financing.  The
Company has reported losses and incurred negative cash flow from operations in
the last three years, and has an accumulated deficit of $9,174,243 at December 31,
2002.  As of the date of these financial statements, the Company has utilized
substantially all of its available funding.

In view of the
matters described in the preceding paragraph, recoverability of a major portion
of the recorded asset amounts and settlement of the liability amounts shown in
the accompanying balance sheet is dependent upon continued operations of the
Company, which in turn is dependent upon the Company's ability to meet its
financing requirements on a continuing basis and to succeed in its future
operations. The financial statements do not include any adjustments relating to
the recoverability and classification of recorded asset amounts or amounts and
classification of liabilities that might be necessary should the Company be
unable to continue in existence.

Management continues
to review operations in order to identify additional strategies designed
to generate cash flow, improve the Company's financial position, and enable
the timely discharge of the Company's obligations. 
If management is unable to identify sources of additional cash flow in
the short term, it may be required to further reduce or limit operations.

2.
        Summary of significant
  accounting policies:

(a)
     Basis
  of presentation:

These consolidated
  financial statements have been prepared in accordance with accounting
  principles generally accepted in the United States of America. 
  The financial statements include the accounts of the Company's
  wholly-owned subsidiaries, Bingo.com
  (Canada) Enterprises Inc., Bingo.com (Antigua) Inc., Bingo.com (Wyoming) Inc.,
  Bingo Acquisition Corp and the 99% owned subsidiary, of Bingo.com (UK) plc. 
  All material intercompany balances and transactions have been
  eliminated in the consolidated financial statements.

(b)
   Use of
estimates:

The preparation of
consolidated financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial statements and
recognized revenues and expenses for the reporting periods. 
Significant areas requiring the use of estimates include the valuation of
long-lived assets, the collectibility of accounts receivable and the valuation
of future deferred tax assets.  Actual
results may differ significantly from these estimates.



(c)   
  Revenue recognition:

(i)  Advertising revenue:

During the year
ended December 31, 2001, revenue related to advertising sold by the Company's
sales force has been recognized as the advertising campaign or impressions and
clicks are made on the website, when the service is delivered.



BINGO.COM, INC.

Notes to Consolidated Financial Statements



Years ended December 31, 2002, 2001
  (Restated) and 2000






2.      Summary of significant accounting policies (Continued):

(c)   
Revenue recognition: (Continued)

Effective
September 1, 2001, the Company contracted with an Internet marketing company to
sell advertising on its website directly to corporate customers or through
advertising agencies.  The Company
received a minimum monthly fee of $112,000 in connection with this contract and
the minimum fee was recognized as revenue on a monthly basis.

This agreement was cancelled effective January
31, 2002.  Between the end of
January 2002 and May 21, 2002, the Company and Internet marketing company
operated under the terms of a verbal arrangement. This verbal arrangement was
terminated effective May 21, 2002. Under the terms of the verbal arrangement,
the Internet marketing company provided website management, marketing and
Internet advertising services for the Company in exchange for a commission equal
to 50% of the revenue generated by the Company's www.bingo.com
web portal.  Advertising
revenues have been recognized as the advertising campaign or impressions
and clicks that were made on the website.

Since May 21, 2002 the Company has managed its
own sales of advertising, website hosting and ad serving. Advertising
revenues have been recognized as the advertising campaign or impressions and
clicks are made on the website and when collection of the amounts are reasonably
assured.

(ii)   
Barter revenue:

In
2000, the Company adopted EITF No. 99-17 "Accounting for Advertising Barter
Transactions".  EITF 99-17
provides that the Company recognize revenue and advertising expenses from barter
transactions at the fair value only when it has a historical practice of
receiving or paying cash for similar transactions.

The Company bartered portions of the unsold advertising impressions
generated by its website for advertising in media properties owned by third
parties. The Company recorded revenues and costs for such barter transactions,
with no net income or loss recognized. Barter revenue was $4,000 for the year
ended December 31, 2002 (2001 - $371,566, 2000 - $299,480).

(d)   
Foreign currency:

The consolidated
financial statements are presented in United States dollars, the functional
currency of the Company. The Company accounts for foreign currency transactions
and translation of foreign currency financial statements under Statement of
Financial Accounting Standards ("SFAS") No. 52, "Foreign Currency
Translation" ("SFAS 52"). Transaction amounts denominated in foreign
currencies are translated at exchange rates prevailing at the transaction dates.
Carrying values of monetary assets and liabilities are adjusted at each balance
sheet date to reflect the exchange rate at that date. Nonmonetary assets and
liabilities are translated at the exchange rate on the original transaction
date. Gains and losses from restatement of foreign currency monetary and
non-monetary assets and liabilities are included in income. Revenues and
expenses are translated at the rates of exchange prevailing on the dates such
items are recognized in earnings.

The functional
currency of the Company's wholly-owned
Canadian and United Kingdom subsidiaries is the Canadian dollar and British
Pound Sterling respectively. These financial statements are translated into US
dollars using the exchange rate at the balance sheet date for assets and
liabilities. Exchange gains and losses arising on this translation are
excluded from the determination of income and are reported as the foreign
currency translation adjustment in stockholders' equity
and included in other comprehensive loss.

(e)   
Cash and cash equivalents:

The Company considers all short-term
investments with a term to maturity at the date of purchase of three months or
less to be cash equivalents.



BINGO.COM, INC.

Notes to Consolidated Financial Statements



Years ended December 31, 2002, 2001
  (Restated) and 2000






2.      Summary of
  significant accounting policies (Continued):

(f)     
Inventory



Inventory is stated at the lower of cost or
market value. It consists of products, such as t-shirts, to sell from our
online store.



(g)   
  Equipment:

Equipment is
recorded at cost less accumulated depreciation and amortization. Depreciation
and amortization are provided for annually over the following periods :

Equipment
and computers                  
         
3 years

Website
and software development             3
years

Furniture
and fixtures                                     
5 years

The Company has
adopted Statement of Position 98-1 "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use" ("SOP 98-1"). Under SOP
98-1, computer software costs incurred in the preliminary development stage are
expensed as incurred. Computer software costs incurred during the application
development stage are capitalized and amortized over the software's estimated
useful life.  The Company did not
capitalize any software development costs during the year ended December 31,
2002 (2001 - $188,348).

The Company has
adopted EITF 00-2 "Accounting for Web Site Development Costs". EITF 00-2
provides guidance on how an entity should account for costs involved in such
areas as planning, developing software to operate the website, graphics,
content, and operating expenses. EITF 00-2 is effective for website development
costs incurred for fiscal quarters beginning after June 30, 2000. The Company
adopted EITF 00-2 in 2000, and all website development costs for periods
subsequent to June 30, 2000, have been expensed as operating costs. No website
development costs were capitalized for the periods ending December 31, 2002 or
2001.

(h)   
Advertising:

The Company
expenses the cost of advertising in the period in which the advertising space or
airtime is used. Advertising costs charged to selling
and marketing expenses in 2002 totaled $2,000 (2001 - $6,258, 2000 - $44,558).

(i)     
Stock-based compensation:

The Company accounts for its stock-based
compensation arrangements with employees in accordance with APB Opinion No. 25,
"Accounting for Stock Issued to Employees" and related interpretations. 
This practice is allowed under the provisions of SFAS No. 123. 
As such, compensation expense under fixed term option plans is recorded
at the date of grant only to the extent that the market value of the underlying
stock at the date of grant exceeds the exercise price. 
In accordance with SFAS 123, since the Company has continued to apply the
principles of APB 25 to employee stock compensation, pro forma loss and pro
forma loss per share information has been presented as if the options had been
valued at their fair values.  The
Company recognizes compensation expense for stock options, common stock and
other equity instruments issued to non-employees for services received based
upon the fair value of the services or equity instruments issued, whichever is
more reliably determined.  Stock
compensation expense is recognized as the stock option is earned, which is
generally over the vesting period of the underlying option.

In March
2000, the FASB issued FASB Interpretation No. 44, "Accounting for Certain
Transactions Involving Stock Compensation."
  The Company adopted FIN 44, effective July 1, 2000, with
respect to certain provisions applicable to new awards, options repricings, and
changes in grantee status.  FIN 44
addresses practice issues related to the application of APB 25.
  The Company accounts for
stock-based compensation issued to non-employees and consultants in accordance
with the provisions of SFAS 123 and EITF No. 96-18, "Accounting for Equity
Instruments that are Issued to Other Than Employees for Acquiring or in
Conjunction with Selling, Goods or Services". The measurement date used is
the earlier of either the performance commitment date or the date at which the
equity instrument holder's performance is complete.



BINGO.COM, INC.

Notes to Consolidated Financial Statements



Years ended December 31, 2002, 2001
  (Restated) and 2000






2.      Significant accounting policies (Continued):

(i)     
Stock-based compensation: (Continued)

Had compensation cost for the Company's
stock option plans been determined based on the fair value at the grant date for
awards under those plans, consistent with the measurement provisions of SFAS
123, the Company's net loss and basic loss per share would have been adjusted
as follows:

|                                                                       |   | 2002      |   | RESTATED
      2001 |   | 2000       
|---------------------------------------------------------------------- | - | --------- | - | ------------------- | - | -----------
|Loss
      for the period - as reported                                | $ | (968,708) | $ | (1,955,200)         | $ | (3,334,891)
|Loss
      for the period - pro forma                                  |   | (966,148) |   | (2,115,073)         |   | (3,922,847)
|Basic
      loss per share - as reported                               |   | (0.09)    |   | (0.19)              |   | (0.33)     
|Basic
      loss per share - pro forma                                 |   | (0.09)    |   | (0.20)              |   | (0.39)     
|Weighted
      average fair value of
      options granted during year |   | 0.00      |   | 0.18                |   | 0.45       
|                                                                       |   |           |   |                     |   |            

The fair value of each option grant has been
estimated on the date of the grant using the Black-Scholes option-pricing model
with the following assumptions:

|                                      |  | 2002       |  | 2001       |  | 2000   
|------------------------------------- |  | ---------- |  | ---------- |  | -------
|Expected
      dividend yield         |  | -          |  | -          |  | -      
|Expected
      stock price volatility |  | 163 - 188% |  | 184 - 188% |  | 117%   
|Risk-free
      interest rate         |  | 1.7 - 1.8% |  | 2.5 - 3.7% |  | 5.0%   
|Expected
      life of options        |  | 5 years    |  | 5 years    |  | 5 years
|                                      |  |            |  |            |  |        

(j)   
Impairment of long-lived assets and long-lived assets to be disposed of:

The Company accounts for long-lived assets in
accordance with the provisions of SFAS No. 144 "Accounting for the Impairment or Disposal of Long-Lived Assets" and
SFAS No. 142 "Accounting for Goodwill and Other Intangible Assets".
At December 31, 2002, the only long-lived assets reported on the Company's
consolidated balance sheet are equipment and domain name rights. 
These provisions require that long-lived assets and certain identifiable
recorded intangibles be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable.  Recoverability of
assets to be held and used is measured by a comparison of the carrying amount of
an asset to future net cash flows expected to be generated by the asset. 
If such assets are considered to be impaired, the impairment to be
recognized is measured by the amount by which the carrying amount of the assets
exceed the fair value of the assets.  Assets
to be disposed of are reported at the lower of the carrying amount and the fair
value less costs to sell.

(k)   
Comprehensive income:

Comprehensive income consists of net loss and
foreign currency translation adjustments that are separately presented in the
consolidated statements of stockholders' equity (deficiency).

(l)     
Income taxes:

The Company follows the asset and liability
method of accounting for income taxes.  Under
this method, current income taxes are recognized for the estimated income taxes payable
for the current period.  Deferred
income taxes are provided based on the estimated future tax effects of temporary
differences between financial statement carrying amounts of assets and
liabilities and their respective tax bases, as well as the benefit of losses
available to be carried forward to future years for tax purposes.



BINGO.COM, INC.

Notes to Consolidated Financial Statements



Years ended December 31, 2002, 2001
  (Restated) and 2000






2.      Significant accounting policies (Continued):

(l)     
  Income taxes: (Continued)

Deferred tax assets and liabilities are measured
using the enacted tax rates that are expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered and
settled.  The effect on future tax
assets and liabilities of a change in tax rates is recognized in operations in
the period that includes the enactment date.  A valuation allowance is recorded for future tax assets when it is not
more likely than not that such future tax assets will be realized.

(m)   
Net loss per share:

Basic loss per share is computed using the
weighted average number of common shares outstanding during the periods. 
Diluted loss per share is computed using the weighted average number of
common shares and potentially dilutive common stock equivalents, including stock
options and warrants and convertible debt, outstanding during the period. 
As the Company has a net loss in each of the periods presented, basic and
diluted net loss per share is the same, as any exercise of the share purchase
options or conversion of the convertible debenture outstanding would be anti-dilutive.

(n)     
Domain name:

The Company has
capitalized the cost of the purchase of the domain name Bingo.com and was
amortizing the cost over five years from the date of commencement of operations.
In 2002, the Company
suspended the amortization of the domain name cost in accordance with SFAS
No. 142 "Accounting for Goodwill and Other Intangible Assets", where
companies are no longer required to amortize indefinite assets
but instead test the indefinite intangible asset for impairment at least
annually.  The
capitalized amount is based on the net present value of the minimum payments
permitted under the terms of the purchase agreement. The domain name was
tested for impairment by comparing the future cash flows of the domain name with
its carrying value. The Company determined that no impairment existed.

(o)   
Business Combinations:

In June, 2001, the Financial Accounting
Standards Board approved the issuance of SFAS No. 141, "Business
Combinations" and SFAS No. 142, "Goodwill and Other Intangible
Assets".  SFAS No. 141 states
that all business combinations should be accounted for using the purchase method
of accounting.  SFAS No. 141 is
effective for business combinations completed after June 30, 2001.

(p)     
  New Accounting Pronouncements

In July 2002, the Financial Accounting
Standards Board (FASB) issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities " (SFAS 146), which addresses financial
accounting and reporting associated with certain exit or disposal activities.
Under SFAS 146, costs associated with certain exit or disposal activities shall
be recognized and measured at their fair value in the period in which the
liability is incurred rather than at the date of a commitment to an exit or
disposal plan.  The Company is
required to adopt SFAS 146 for all exit and disposal activities initiated after
December 31, 2002.  The adoption of
this interpretation is not anticipated to have a material effect on our
financial position or results of operations.

In November 2002, the FASB issued
Interpretation No. 45, " Guarantor's Accounting and Disclosure Requirements
for Guarantees, Including Indirect Guarantees of Indebtness of Others" (FIN
45). Fin 45 provides guidance on the disclosure to be made by a guarantor in its
interim and annual financial statements about its obligations under certain
guarantees that it has issued and also clarifies that a guarantor is required to
recognize, at the inception of a guarantee, a liability for the fair value of
the obligation undertaken in issuing the guarantee. The disclosure requirements
of FIN 45 are effective for financial statements of interim or annual periods
ending after December 15, 2002, and its recognition requirements are applicable
for guarantees. The adoption of this interpretation is not anticipated to have a
material effect on our financial position or results of operations.





BINGO.COM, INC.

Notes to Consolidated Financial Statements



Years ended December 31, 2002, 2001
  (Restated) and 2000






2.      Significant accounting policies (Continued):

(p)     
  New Accounting Pronouncements (Continued)

In December 2002, the FASB issued SFAS No. 148
"Accounting for Stock-Based Compensation". This statement amends SFAS 123,
"Accounting for Stock-Based Compensation". SFAS 148 provides
alternative methods of transition for companies that voluntarily change to the
fair value-based method of accounting for stock-based employee compensation. In
addition, this statement amends the disclosure requirements of SFAS 123 to
require prominent disclosures in both annual and interim financial statements
about the method of accounting for stock-based compensation and the effect of
the method used on reported results. The disclosure requirements of this
statement are effective for financial statements of interim or annual periods
ending after December 15, 2002.

In January 2003, the FASB issued FASB
Interpretation No. 146, "Consolidation of Variable Interest Entities" (FIN
46). Fin 46 requires a company to consolidate any variable interest entities for
which that company has a controlling financial interest. Fin 46 also requires
disclosures about variable interest entities that the company is not required to
consolidate, but which it has a significant variable interest. The Company is
required to adopt the consolidation requirements of FIN 46 for variable interest
entities created after January 2003. The adoption of this interpretation is not
anticipated to have a material effect on our financial position or results of
operations.

(q)    
Financial Instruments



(i) Fair values:

The fair value of cash and cash equivalents,
trade accounts receivable, accounts payable and accrued liabilities approximates
their financial statement carrying amounts due to the short-term maturities of
these instruments.

The financial statement carrying amount of the
debentures payable at December 31, 2002, reflects the market value to the
Company for the debt.

(ii) Foreign Currency
risk:

The Company operates internationally, which
gives rise to the risk that cash flows may be adversely impacted by exchange
rate fluctuations.  The Company has
not entered into any forward exchange contracts or other derivative instrument
to hedge against foreign exchange risk.

(r)    
Reclassification

Certain
comparative figures have been reclassified to conform to the presentation
adopted in the current year.

3.
  Prior Period Adjustment:

Debenture "A"

On April 16, 2001, the Company received a loan
from, and issued a secured convertible Debenture "A" to, Redruth Ventures
Inc., a British Virgin Islands corporation, for $750,000, and to Bingo, Inc., an
Anguilla corporation, for $500,000 (collectively, "the Lenders"). A current
director and officer of the Company, is the potential beneficiary of various
discretionary trusts that hold approximately 80% of the shares of Bingo, Inc.







BINGO.COM, INC.

Notes to Consolidated Financial Statements



Years ended December 31, 2002, 2001
  (Restated) and 2000






3.
  Prior Period Adjustment: (Continued)

The Lenders received a total of 12,000,000
common stock purchase warrants, with an exercise price of $0.25 per share. The
common stock purchase warrants issued in connection with the Debenture "A"
are exercisable for a period of three years from the date of the Debenture
"A". The Company did not account for the value of the warrants upon issuance
of the Debenture "A" in accordance with APB 14 "Accounting for
Convertible Debt and Debt Issued with Stock Purchase Warrants". Using the
Black-Scholes option pricing model, the warrants have an estimated value of
$898,394, using the following assumptions: no annual dividend, volatility of
137%, risk-free interest rate of 5.17% and a term of three years. Due to the
illiquidity of the Company's shares, a block discount of 40% ($359,357) was
applied to this value providing a warrant debenture discount of $539,036.

The Company has restated the comparative prior
periods presented in the December 31, 2002 consolidated statements of operations
to reflect additional interest expense for the full discounted value of the
warrants in the amount of $539,036, which will be amortized to interest expense
over the next five years.

The total effect of the restatement was to
increase interest expense by $76,363, increase debenture discount by $462,673
and
additional paid-in capital by $539,036 for the year ended December 31, 2001,
increasing the net loss for the year from $1,878,837 to $1,955,200 and
accumulated net deficit from $8,129,172 to $8,205,535. The interest expense and
additional paid-in capital accounts in the comparative prior periods balance
sheet, statement of operations, statement of changes in stockholders' equity and
statement of cash flows have been restated for the effects of the adjustments.

The effects on the
Income statement for the year ending December 31, 2001 were as follows:

|                                                         |   | As
      Reported |   | Adjustment |   | As
      Restated
|-------------------------------------------------------- | - | ----------------- | - | ---------- | - | -----------------
|Revenue                                                  | $ | 1,362,756         | $ | -          | $ | 1,362,756        
|Barter
      revenue                                     |   | 371,566           |   | -          |   | 371,566          
|Cost
      of revenue                                    |   | 1,093,963         |   | -          |   | 1,093,963        
|Gross
      profit                                       |   | 640,359           |   | -          |   | 640,359          
|Operating
      expenses:                                |   |                   |   |            |   |                  
|Depreciation and amortization                            |   | 611,147           |   | -          |   | 611,147          
|General and administrative                               |   | 1,558,677         |   | -          |   | 1,558,677        
|Loss on disposal of equipment                            |   | 16,716            |   | -          |   | 16,716           
|Selling and marketing                                    |   | 200,607           |   | -          |   | 200,607          
|Total
      operating expenses                           |   | 2,387,147         |   | -          |   | 2,387,147        
|Loss
      before interest and income taxes              |   | (1,746,788)       |   | -          |   | (1,746,788)      
|Other
      income (expense):                            |   |                   |   |            |   |                  
|Interest expense                                         |   | (133,870)         |   | (76,363)   |   | (210,233)        
|Interest income                                          |   | 1,821             |   | -          |   | 1,821            
|Loss
      before income taxes                           |   | (1,878,837)       |   | (76,363)   |   | (1,955,200)      
|Income
      tax expense                                 |   | -                 |   | -          |   | -                
|Loss
      for the year                                  | $ | (1,878,837)       | $ | (76,363)   | $ | (1,955,200)      
|Net
      loss per common share,
      Basic and diluted | $ | (0.18)            | $ | (0.01)     | $ | (0.19)           
|                                                         |   |                   |   |            |   |                  





















BINGO.COM, INC.

Notes to Consolidated Financial Statements



Years ended December 31, 2002, 2001
  (Restated) and 2000






3.
  Prior Period Adjustment: (Continued)

The
effects on the balance sheet as of December 31, 2001 were as follows:

|                                                                                    |        | As
      Reported |   | Adjustment |        | As
      Restated
|----------------------------------------------------------------------------------- | ------ | ----------------- | - | ---------- | ------ | -----------------
|ASSETS                                                                              |        |                   |   |            |        |                  
|Total current assets                                                                | $      | 374,536           | $ |            | $      | 374,536          
|Fixed assets                                                                        |        | 477,554           |   | -          |        | 477,554          
|Other assets                                                                        |        | 27,559            |   | -          |        | 27,559           
|Domain name rights                                                                  |        | 1,257,241         |   | -          |        | 1,257,241        
|Warrants - Debenture discount                                                       |        | -                 |   | 462,673    |        | 462,673          
|Total
      Assets                                                                  | $      | 2,136,890         | $ | 462,673    | $      | 2,599,563        
|                                                                                    |        |                   |   |            |        |                  
|LIABILITIES
      AND STOCKHOLDER'S EQUITY (DEFICIENCY)                             |        |                   |  
|Total current liabilities                                                           | $      | 1,429,114         | $ | -          | $      | 1,429,114        
|Capital leases payable, net of current
      portion                                |        | 25,974            |   | -          |        | 25,974           
|Debenture payable                                                                   |        | 1,100,000         |   | -          |        | 1,100,000        
|Total
      Liabilities                                                             |        | 2,555,088         |   | -          |        | 2,555,088        
|                                                                                    |        |                   |   |            |        |                  
|Stockholders'
      equity (deficiency)                                             |        |                   |   |            |        |                  
|Common stock $0.01 par value                                                        |        | 10,855            |   | -          |        | 10,855           
|Additional paid in capital                                                          |        | 7,669,826         |   | 539,036    |        | 8,208,862        
|Accumulated deficit                                                                 |        | (8,129,172)       |   | (76,363)   |        | (8,205,535)      
|Accumulated other comprehensive loss:
      Foreign currency translation adjustment | 30,293 |                   | - |            | 30,293
|Total
      Stockholders' equity (deficiency)                                       |        | (418,198)         |   | 462,673    |        | 44,475           
|Total
      Liabilities and Stockholders'
      equity (deficiency)                 | $      | 2,136,890         | $ | 462,673    | $      | 2,599,563        

4. 
Equipment:

|2002                                   |   | Cost    |   | Accumulated depreciation |   | Net book
      value
|-------------------------------------- | - | ------- | - | ------------------------ | - | --------------------
|                                       |   |         |   |                          |   |                     
|Equipment
      and computers          | $ | 600,160 | $ | 479,562                  | $ | 120,598             
|Website
      and software development |   | 1,073   |   | -                        |   | 1,073               
|Furniture
      and fixtures           |   | 6,103   |   | 305                      |   | 5,798               
|                                       | $ | 607,336 | $ | 479,867                  | $ | 127,469             



|2001                                   |   | Cost    |   | Accumulated depreciation |   | Net book
      value
|-------------------------------------- | - | ------- | - | ------------------------ | - | --------------------
|                                       |   |         |   |                          |   |                     
|Equipment
      and computers          | $ | 736,508 | $ | 452,552                  | $ | 283,956             
|Website
      and software development |   | 194,421 |   | 15,696                   |   | 178,725             
|Furniture
      and fixtures           |   | 32,372  |   | 17,499                   |   | 14,873              
|                                       | $ | 963,301 | $ | 485,747                  | $ | 477,554             

5. 
Domain name rights and contract payable:

The rights to
use the domain name bingo.com were acquired in January of 1999 for a cash
payment of $200,000 and the issuance of 500,000 shares of common stock of the
Company at a deemed value of $2.00 per share. Under the terms of the agreement,
the Company is required to make quarterly domain name purchase payments to the
vendor based on 4% of annual gross revenue (as defined in the agreement), with
total minimum payments of $1,100,000 in the first three years, including the
initial cash payment, required over the 99 year period
ended December 31, 2098. These minimum payments commitments were completed on
June 30, 2002.





BINGO.COM, INC.

Notes to Consolidated Financial Statements



Years ended December 31, 2002, 2001
  (Restated) and 2000






5. 
Domain name rights and contract payable: (Continued)

During
the year ended December 31, 2002, the agreement was amended so that the remaining
domain name purchase payments to the vendor
are made monthly, based on 4% of the preceding month's gross revenue.

Domain name
rights have been capitalized on the balance sheet based on the present value of
the future minimum royalty payments. In 2002 the Company suspended the amortization of the domain name in
accordance with SFAS
No. 142 "Accounting for Goodwill and Other Intangible Assets", where
companies are no longer permitted to amortize indefinite assets.

Capitalized
domain name rights are $1,257,241 at December 31, 2002 (2001 - $1,257,241). As
per SFAS 142 there is no accumulated amortization for the year ended December
31, 2002.  (2001 - $677,259).
Payments made relating to this contract totaled $196,795 during the year ended
December 31, 2002 (2001 - $361,869), of which $185,000 related to the final
payment made in accordance with the agreement for the minimum guaranteed domain
name purchase payments of the domain name rights and the remaining $12,023
related to payments based on the continuing 4% of the proceeding months gross
revenue as defined in the amended agreement.

6.   Capital lease obligations:

Future minimum
lease payments under capital leases for software and website equipment are as
follows:

|                                                |   | 2002      |   | 2001     
|----------------------------------------------- | - | --------- | - | ---------
|Year
      ending December 31,                  |   |           |   |          
|2002                                            | $ | -         | $ | 170,765  
|2003                                            |   | 117,042   |   | 27,480   
|Future
      minimum lease payments             |   | 117,042   |   | 198,245  
|Less:
      amount representing interest        |   | (1,506)   |   | (9,050)  
|Balance
      of obligation                     |   | 115,536   |   | 189,195  
|Less:
      due within one year                 |   | (115,536) |   | (163,221)
|Long-term
      obligation under capital leases | $ | -         | $ | 25,974   



The timing of the minimum lease payments
detailed above is based on the provisions of the original lease agreements.

7.  
Debenture payable:

Debenture "A"

On April
16, 2001, the Company received a loan and issued a secured convertible Debenture
"A" for $1,250,000. Bingo, Inc has subsequently acquired Debenture "A"
in its entirety. Under the terms of the Debenture "A" interest shall accrue
on the outstanding principal amount of Debenture
"A" at the rate of 12% per annum from the issuance date through April
16, 2003, at which time the interest will become payable.  Thereafter, interest shall accrue and be payable on the first
business day of each succeeding quarter through and including April 16, 2006. 
All principal, accrued but unpaid interest, and any other amounts are
payable at maturity on April 16, 2006.

The
Company has the option to pay all accrued interest in cash, common stock of the
Company, or a combination of both cash and common stock. 
Any amounts remaining unpaid on the Debenture "A" on the maturity
date, whether principal, interest or other amounts due, shall be paid in full in
cash on such date.  Any common stock
of the Company delivered to the Holders in payment of the Debenture "A" will
be valued at $0.25 per share.







BINGO.COM, INC.

Notes to Consolidated Financial Statements



Years ended December 31, 2002, 2001
  (Restated) and 2000






7.  
Debenture payable: (Continued)

The
Holders of the Debenture "A" have the right, but not the obligation, to elect to
convert any or all of the outstanding principal amount of the Debenture "A"
into shares of the Company's common stock at a conversion price of $0.125 per
share until the third anniversary date of the Debenture "A". The common
stock that would be issued upon conversion of the Debenture "A" will be
subject to certain resale restrictions, as defined in Rule 144 of the Securities
and Exchange Act of 1933 (the "Exchange Act"). 
The Debenture "A" is secured by all assets of the Company.

The Holders of the Debenture "A" received a total of 12,000,000
common stock purchase warrants with an exercise price of $0.25 per share.
The common stock purchase warrants issued in connection with the Debenture
"A" are
exercisable for a period of three years from the date of the Debenture "A".

The discounted value of the warrants will be amortized
to interest expense over the next five years. The total effect of the issuance
of the warrants relating to Debenture "A" was to increase interest expense
by $107,807 for the year ended December 31, 2002. (2001 - $76,363)

Effective
as at the end of business on May 21, 2002, a debenture holder agreed to surrender
for cancellation all of the 7,200,000 Warrants issued to them in connection with
Debenture "A", in exchange for unused advertising inventory on the bingo.com
website.

As of the
date of this report, none of the Warrants have been exercised, and with the
surrender for cancellation of all of the 7,200,000 warrants issued to a
debenture holder, there remains 4,800,000 warrants outstanding under this
Debenture "A".

Debenture
"B"

On July 2, 2002
the Company issued a convertible debenture for $145,000 of which $50,000 was
received from Bingo, Inc.

Under the terms of Debenture "B",
interest accrues on the outstanding principal amount of Debenture "B"
at the rate of 12% per annum through July 2, 2004, at which time the
interest will become payable. Thereafter, interest shall accrue and be payable
on the first business day of each succeeding quarter through and including July
2, 2006. All principal, accrued but unpaid interest and any other amounts due,
are due and payable at maturity on July 2, 2006.

The Company has the option to pay all accrued
interest in cash, common stock of the Company, or a combination of both cash and
common stock. Any amounts remaining unpaid on the Debenture "B" at the
maturity date, whether principal, interest or other amounts due, shall be paid
in full in cash on such date. Any common stock of the Company delivered to the
holders of Debenture "B" in payment of Debenture "B" will be valued at
$0.25 per share.

The
Holders of the Debenture "B" have the right, but not the obligation, to elect to
convert all, or part, of the outstanding principal amount of Debenture "B"
into shares of the Company's common stock at a conversion price of $0.15 per
share until the third anniversary date of the Debenture "B". The common
stock that would be issued upon conversion of Debenture "B" will be subject
to certain resale restrictions, as defined in Rule 144 of the Securities and
Exchange Act of 1933 ("The Exchange Act").

The holders of the Debenture "B" received a
total of 580,000 common stock purchase warrants with an exercise price of $0.25
per share. The common stock purchase warrants issued in connection with the
Debenture "B" are exercisable for a period of three years from the date of
Debenture "B". Using the Black-Scholes model, the warrants have an estimated
value of $34,038, using the following assumptions: no annual dividend,
volatility of 161%, risk-free interest rate of 1.72% and a term of three years.
.. Due to the illiquidity of the Company's shares, a block discount of 40%
($13,615) was applied to this value providing a warrant debenture discount of
$20,423.





BINGO.COM, INC.

Notes to Consolidated Financial Statements



Years ended December 31, 2002, 2001
  (Restated) and 2000






7.  
Debenture payable: (Continued)

The estimated discount value of the warrants will be
amortized to interest expense over the next four years. Bingo,
Inc. has the potential to become the largest single shareholder and a majority
shareholder in the Company should Bingo, Inc. elect to convert any or all of the
principal amount of Debenture "A" and its share of Debenture "B" into
shares of the Company's common stock, or if the Company elects to repay the
principal amount outstanding, and any accrued interest, in shares of the
Company's common stock pursuant to the terms of Debenture "A" and
Debenture "B".

8.     
Stockholders' equity:

(a)
Common stock issuances:

During the year ended December 31, 2002 the
Company issued 250,000 shares of common stock to the former Chief Executive of
the Company under the terms of a revised employment agreement. The agreed value
of $42,500 for these shares was recorded in accrued liabilities at December 31,
2001.

(b)
Stock option plans:

(i)  1999
stock option plan:

The Company has reserved a total of 1,895,000
common shares for issuance under its 1999 stock option plan. 
The plan provides for the granting of non-qualified stock options to
directors, officers, eligible employees and contractors of the Company. The
Board of Directors determines the terms of the options granted, including the
number of options granted, the exercise price and their vesting schedule.

The Company has granted a total of 1,800,000
(2001 - 1,600,000) stock purchase options under this plan, 1,700,000 (2001 -
1,575,000) of which remain outstanding at December 31, 2002.

(ii) 2001 stock option plan:

During the year ended December 31, 2001, the
Company's Board of Directors adopted the 2001 stock option plan. The Company has
reserved a total of 2,000,000 common shares for issuance under the 2001 stock
option plan.  The plan provides for the granting of incentive and
non-qualified stock options to directors, officers, eligible employees and
contractors of the Company. The Board of Directors determines the terms of the
options granted, including the number of options granted, the exercise price and
their vesting schedule.

The Company has granted a total of 1,400,000 (2001
- 865,000) stock purchase options under the 2001 plan, 1,000,000 (2001 -
865,000) of which remain outstanding as at December 31, 2002.  Of the
options outstanding at December 31, 2002, a total of 750,000 were issued where
10% vests at the grant date, 15% one year following the grant date and 2% per
month starting 13 months after the grant date.  A
total of 108,000 (2001 - 26,500) of these common stock purchase options had
vested at December 31, 2002.

Subsequent to the year ended December 31,
2002, the Company issued an additional 125,000 stock purchase options under the
2001 plan at $0.05.   The
options vest 10% at grant date, 15% one year following the grant date and 2% per
month starting thirteen months after the grant date. In addition after the year ended
December 31, 2002, 25,000 stock purchase options were cancelled.







BINGO.COM, INC.

Notes to Consolidated Financial Statements



Years ended December 31, 2002, 2001
  (Restated) and 2000






8.     
Stockholders' equity: (Continued)

|                                             |  | Number of
      shares |   | Weighted
      average exercise price
|-------------------------------------------- |  | ---------------------- | - | -------------------------------------
|Options
      outstanding, December 31, 1999 |  | 1,000,000              | $ | 3.74                                 
|                                             |  |                        |   |                                      
|Granted
      (including repriced options)   |  | 1,310,000              |   | 0.63                                 
|Exercised                                    |  | -                      |   | -                                    
|Cancelled/forfeited
      or repriced        |  | (800,000)              |   | 3.93                                 
|Outstanding,
      December 31, 2000         |  | 1,510,000              |   | 0.95                                 
|                                             |  |                        |   |                                      
|Granted
      (including repriced options)   |  | 940,000                |   | 0.30                                 
|Exercised                                    |  | -                      |   | -                                    
|Cancelled/forfeited
      or repriced        |  | (10,000)               |   | 0.88                                 
|Outstanding,
      December 31, 2001         |  | 2,440,000              |   | 0.70                                 
|                                             |  |                        |   |                                      
|Granted
      (including repriced options)   |  | 735,000                |   | 0.05                                 
|Exercised                                    |  | -                      |   | -                                    
|Cancelled/forfeited
      or repriced        |  | (475,000)              |   | 0.30                                 
|Outstanding,
      December 31, 2002         |  | 2,700,000              | $ | 0.59                                 



The following table
summarizes information concerning outstanding and exercisable stock options at
December 31, 2002:



|Range of exercise prices per share | Number outstanding | Number exercisable | Expiry date
|---------------------------------- | ------------------ | ------------------ | -----------
|$                                  | 0.05               | 585,000            | 58,500     
|                                   | 0.15               | 150,000            | 150,000    
|                                   | 0.30               | 300,000            | 300,000    
|                                   | 0.30               | 165,000            | 49,500     
|                                   | 0.44 to 0.75       | 1,100,000          | 1,100,000  
|                                   | 0.76 to 3.00       | 400,000            | 400,000    
|                                   |                    | 2,700,000          | 2,058,000  

During
the year ended December 31, 2002, the Company recorded non-cash compensation
expense of $13,245 (2001 - $nil, 2000 - $64,500) relating to the issuance of
common stock purchase options to certain employees, officers, and directors of
the Company, in accordance with FASB 123, Accounting for Stock-based
Compensation.

During
the year ended December 31, 2002 the Company recorded a non-cash reduction of
compensation expense totaling $21,000 (2001 - $40,000) in connection with common
stock purchase options that were repriced in 2001.  The Company is
accounting for the repriced options in accordance with FIN 44.

(c)      Warrants:

Warrant
"A"

During
2001, the Company issued a total of 12,000,000 stock purchase warrants in
connection with the Debenture "A" financing described in note 8.  Each
warrant allows the holder to purchase 1 common share at a price of $0.25 per
share for a three year period from the date of issuance.  The warrants
expire on April 16, 2004. Using the Black-Scholes model, the warrants have an
estimated value of $539,036, using the following assumptions: no annual
dividend, volatility of 137%, risk-free interest rate of 5.17% and a term of
three years. Due to the illiquidity of the Company's shares, a block discount
of 40% ($359,357) was applied to this value providing a warrant debenture
discount of $539,036.

As of the date of this report, none of the Warrants have been exercised,
and with the surrender for cancellation of all of the 7,200,000 warrants issued
to Redruth Ventures Inc., there remains 4,800,000 Warrants outstanding under
this debenture.





BINGO.COM, INC.

Notes to Consolidated Financial Statements



Years ended December 31, 2002, 2001
  (Restated) and 2000






8.     
Stockholders' equity: (Continued)

Warrant "B"

During the year
ended December 31, 2002, the Company issued a total of 580,000 stock purchase
warrants in connection with the Debenture "B" financing described in note 8. 
Each warrant allows the holder to purchase 1 common share at a price of
$0.25 per share for a three year period from the date of issuance. 
The warrants expire on July 2, 2005. Using
the Black-Scholes model, the warrants have an estimated value of $34,038, using
the following assumptions: no annual dividend, volatility of 161%, risk-free
interest rate of 1.72% and a term of three years. . Due to the illiquidity of
the Company's shares, a block discount of 40% ($13,615) was applied to this
value providing a warrant debenture discount of $20,423.

9. 
Operating leases:

The Company leases office facilities in
Vancouver, British Columbia, Canada under an operating lease agreement that
expires on September 29, 2005.  Minimum
lease payments under this operating lease are approximately as follows:

|     |   |       
|---- | - | ------
|2003 | $ | 29,000
|2004 |   | 29,000
|2005 |   | 21,750
|     |   |       



The Company paid rent
expense totaling $22,683 for the year ended December 31, 2002 (2001 -$67,437,
2000 - $113,369).



10. 
Income taxes:

Income tax benefit attributable to losses
from United States of America operations was $nil for the years ended December 31, 2002, 2001 and
2000, and differed from the amounts computed by applying the United States of
America federal income tax rate of 34 percent to pretax losses from operations as a
result of the following:

|                                                                                                          |   | 2002      |   | RESTATED
      2001 |   | 2000     
|--------------------------------------------------------------------------------------------------------- | - | --------- | - | ------------------- | - | ---------
|Computed
      "expected" tax benefit                                                                     | $ | 329,360   | $ | 664,768             | $ | 1,133,864
|Increase
      (reduction) in income taxes resulting from Income taxes in a higher tax
      jurisdiction |   | (193,834) |   | (264,185)           |   | (349,112)
|Other                                                                                                     |   | (2,775)   |   | (4,035)             |   | (6,079)  
|Change
      in valuation allowance                                                                       |   | (132,751) |   | (396,548)           |   | (778,673)
|                                                                                                          | $ | -         | $ | -                   | $ | -  -     

The tax effects of temporary differences that
give rise to significant portions of the future tax assets and future tax
liabilities at December 31, 2002 and 2001 are presented below:

|                                  |   | 2002      |   | 2001     
|--------------------------------- | - | --------- | - | ---------
|Deferred
      tax assets:        |   |           |   |          
|Net operating loss carry forwards | $ | 3,346,803 | $ | 2,993,179
|                                  |   |           |   |          
|Total gross deferred tax assets   | $ | 3,346,803 | $ | 2,993,179
|                                  |   |           |   |          











BINGO.COM, INC.

Notes to Consolidated Financial Statements



Years ended December 31, 2002, 2001
  (Restated) and 2000






10. 
Income taxes: (Continued)

The valuation allowance for deferred tax
assets as of December 31, 2002 and 2001, was $3,346,803 and $2,993,179,
respectively.  The net change in the
total valuation allowance for the years ended December 31, 2002 and 2001, was an
increase of $329,360 and $664,768, respectively.  In assessing the realizability of deferred tax assets,
management considers whether it is more likely than not that some portion or all
of the deferred tax assets will not be realized. 
The ultimate realization of deferred tax assets is dependent upon the
generation of future taxable income during the periods in which those temporary
differences become deductible.

Management considers the scheduled reversal
of deferred tax liabilities, projected future taxable income, and tax planning
strategies in assessing the realizability of deferred tax assets. 
In order to fully realize the deferred tax asset attributable to net
operating loss carryforwards, the Company will need to generate future taxable
income of approximately $9,500,000 prior to the expiration of the net operating
loss carryforwards, which begin expiring in 2014.

11.     
Discontinued operations:

In January
2000, the Company announced that it had discontinued and wound-up its Antigua
based Internet gaming operations. The financial statements for the year ended
December 31, 2000, were adjusted to include the effects of reclassification of
the discontinued operation. In addition, the Company recorded a provision of
$60,000 for on-going costs associated with the wind-up. The provision was
applied to the 2000 operating expenses for the Antigua operations.

The balance sheet as
of December 31, 2000, included the following amounts
applicable to the Antigua operations:

|Current
      assets                                  | $ | 3,710 
|----------------------------------------------------- | - | ------
|Capital
      assets, net of accumulated depreciation |   | 40,395
|Other
      assets                                    |   | 905   
|Current
      liabilities                             |   | 16,344
|Non-current
      liabilities                         |   | -     

12. 
Related party transactions:

The Company has received total loans of $154,626 (2001 - $45,385) from a
current director and officer during the year ended December 31, 2002. This loan
is made up as follows:

(i)
$121,931 (2001 - $45,385). This loan has no fixed repayment terms and is
non-interest bearing.



(ii)
$32,695 related to half of the purchase price for the acquisition of Bingo.com
(UK) plc. The balance of the purchase price plus
interest was to be paid no later than six months after the Effective Date. After
December 31, 2002, this was extended for an additional six months. Interest
accrues on the outstanding amount at the rate of 5% per annum.



During
the year ended December 31, 2002, the Company received a loan for $42,508 (2001
- $nil) from a company owned by a current director and officer of the Company
during the year ended December 31, 2002. Interest
accrues on the outstanding amount at the rate of 7% per annum.



In
addition the Company has a liability for $151,075 (2001 $84,843) to a company
owned by a current director and officer of the Company for payment of services
rendered and expenses incurred by the current director and officer of the
Company.

On April 16,
2001, the Company issued a $500,000 face amount of secured convertible Debenture
"A" to Bingo Inc. (note 8), an Anguilla corporation.  Effective May 21, 2002 Bingo Inc. acquired $750,000 of the
Debenture "A" from an unrelated party. On July 2, 2002 Bingo Inc. acquired a
$50,000 convertible Debenture "B".  A
current director and officer of the Company, is the potential beneficiary of
various discretionary trusts that hold approximately 80% of the shares of Bingo
Inc. However the director did not hold an office in the Company at the time
Debenture "A" agreement was entered into by the Company in 2001. The Company
has accrued interest payable to Bingo, Inc. of $206,694 (2001 - $25,032) on
Debenture "A" and $3,008 on Debenture "B".



BINGO.COM, INC.

Notes to Consolidated Financial Statements



Years ended December 31, 2002, 2001
  (Restated) and 2000






In addition Bingo, Inc. was issued a total of 4,800,000 common stock
purchase warrants in connection with the Debenture "A" and 200,000 common
stock purchase warrants in connection with the Debenture "B". 
These warrants are exercisable at a price of $0.25 per share for a period
of three years from the dates of issuance of each of the Debenture "A" and
Debenture "B".

Payments made to Bingo, Inc. in relation to the Domain name purchase
payment totaled $196,795 during the year ended December 31, 2002 (2001 -
$361,869), of which $185,000 related to the final payment made in accordance
with the agreement for the minimum guaranteed domain name purchase payments of
the domain name rights and the remaining $12,023 related to payments based on
the continuing 4% of the proceeding months gross revenue as defined in the
amended agreement, of which $6,327 was due at December 31, 2002.

A former director of
the Company, who resigned during the year ended December 31, 2002, was a
director of two companies with which the Company conducted  business
during the recently completed financial year. Sales of $121,000 and expenses of
$84,000, relating to web hosting, advertising and license fee for "Skill
Bingo", were incurred during the period the director held office in the
Company.

13.     
Segmented information:

The
Company operates in one business segment, the business of providing games and
entertainment
based on the game of bingo through its Internet portal, bingo.com, supported
mainly by selling advertising on the website. 
The revenue for the three years ended December 31, 2002, has been derived
primarily from business in the United States of America.

14. Business
Acquisitions

All business
acquisitions have been accounted for using the purchase method. The Company's
consolidated results of operations include the operating results of the acquired
company (Bingo.com (UK) plc.) from its acquisition date of August 15, 2002.
Acquired assets and liabilities were recorded at their estimated fair market
value at the acquisition date and the aggregate purchase price plus the cost
directly attributable to the acquisitions has been allocated to the assets and
liability acquired.

On August 15, 2002
(note 12) ("the Effective Date"), the Company, in a related party
transaction, acquired from a director and officer of the Company, 99% of the
share capital of Bingo.com (UK) plc. for $61,440.

Under the terms of
the Purchase agreement the Company paid half the purchase price on the Effective
Date. The balance of the purchase price plus interest will be paid no later than
six months after the Effective Date. This was extended after year end for a
further six months. Interest shall accrue on the outstanding amount at a fixed
rate of 5% per annum.

The
balance sheet of Bingo.com (UK) plc. as at August 15, 2002 included the
following amounts:

|                          |   |       
|------------------------- | - | ------
|Current
      assets      | $ | 59,026
|Current
      liabilities |   | (777) 
|                          |   |       









ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
  FINANCIAL DISCLOSURE.

On
March 26, 2003, the Board of Directors of Bingo.com, Inc. (the "Company")
approved the appointment of Dohan & Company, CPA's, P.A., . ("Dohan") of
Miami, Florida, as our new independent auditors effective March 27, 2003 and
the termination of Davidson & Company ("Davidson") as the principal
accountant engaged to audit the Company's financial statements. 
The change in the Company's certifying accountant was due to the
Company requiring a United States registered accountant is needed to audit our financial statements. 
During the year ended December 31, 2001 and from the date of appointment
of Davidson as the Company's independent accountant on August 7, 2001 and
through the date of this report, (i) there were no "reportable events," as
defined in Item 304(a)(1)(v) of Regulation S-K, and (ii) we did not and nobody
on our behalf has consulted Dohan regarding any of the accounting and auditing
matters or events set forth in Item 304(a)(2)(i) or (ii) of Regulation S-K.

The
report of Davidson on our financial statements for the year ended December 31,
2001 did not contain an adverse opinion or disclaimer of opinion nor was it
qualified or modified as to uncertainty, audit scope or accounting principles,
except that the report contained an explanatory paragraph regarding our ability
to continue as a going concern. The change of Davidson was effective as of March
27, 2003, was approved by our directors, and was not due to any disagreement
between us and Davidson.

During
the year ended December 31, 2001, and from the date of appointment of Davidson as
the Company's independent accountant on August 7, 2001, and the subsequent
interim periods preceding Davidson's dismissal, there were no disagreements
with Davidson on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure which disagreements, if not
resolved to the satisfaction of Davidson's, would have caused Davidson to make
reference to the subject matter of the disagreement in connection with its
report.  We have authorized Davidson
to respond fully to any subject matter with respect to our financial statements.

We
have not been advised by Davidson of any of the following:

a)        
lack of internal controls necessary for us to develop reliable financial
statements;

b)        
any information that has come to the attention of our independent
accountants that has lead them to no longer rely on management's
representations or that has made them unwilling to be associated with the
financial statements prepared by management;

c)        
any need to expand significantly the scope of their audit or information
that has come to their attention during the fiscal years prior to and preceding
the change in independent accountants that, if further investigated, would:

(i)        
materially impact the fairness or reliability of the previously issued
independent accountants' report or the financial statements issued or covering
such period; or

(ii)       
cause Davidson to become unwilling to rely on management's
representations or that has made them unwilling to be associated with our
financial statements, or due to the dismissal of Davidson or any other reason,
Davidson did not so expand the scope of the audit or conduct such further
investigation; or

d)        
any information that has come to the attention of Davidson that has lead
them to conclude that such information materially impacts the fairness or
reliability of the audit reports or the financial statements issued covering the
two fiscal years prior to and preceding the change in the independent
accountants (including information that, unless resolved, to the satisfaction of
such independent accountant, would prevent it from rendering an unqualified
audit report on those financial statements ) and due to the dismissal of
Davidson or any other reason, any issue has not been resolved to such
independent accountants satisfaction prior to the dismissal of Davidson.

The
Company provided Davidson with a copy of the letter addressed to the Securities
and Exchange Commission ("Commission"). prior to filing it with the
Commission. The Company requested that Davidson furnish the Company with a
letter to the Commission stating whether Davidson agrees with the foregoing
disclosure. On August 7, 2001, Grant Thornton LLP, ("Grant Thornton") the
Company's former principal accountants previously engaged to audit the Company's
financial statements were dismissed, which lead to the appointment of Davidson
as principal accountants to replace Grant Thornton.  This change was made in connection with the relocation of the
Company's executive offices to Vancouver, British Columbia. 
The Company's board of directors approved the engagement of Davidson.

The
audit report of Grant Thornton on the Company's financial statements for the
fiscal year ending December 31, 2000, did not contain any adverse opinion or
disclaimer of opinion, nor was it qualified or modified as to uncertainty, audit
scope, or accounting principles, except such report was modified to include an
explanatory paragraph for a going concern uncertainty. The change of Grant
Thornton was effective as of August 7, 2001, was approved by our directors, and
was not due to any disagreement between Grant Thornton and us.

In
connection with the audit of the fiscal year ending December 31, 2000, including
the subsequent interim periods prior to August 7, 2001, the date of Grant
Thornton's termination, there were no disagreements with Grant Thornton on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure which disagreements, if not resolved to the
satisfaction of Davidson's, would have caused Grant Thornton to make reference
to the subject matter of the disagreement in connection with its report.

During
the fiscal year ending December 31, 2000, and from the date of appointment of
Grant Thornton as the Company's independent accountant on July 24, 2000, and
the subsequent interim periods preceding Grant Thornton's dismissal, the Company
(or anyone on its behalf) did not consult with Davidson regarding any of the
accounting or auditing concerns stated in Item 304(a)(2) of Regulation S-B.
Since there were no disagreements or reportable events (as defined in Item
304(a)(2) of Regulation S-B), the Company did not consult Davidson in respect to
these matters during the time periods detailed.

PART
  III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE
  REGISTRANT

DIRECTORS AND EXECUTIVE OFFICERS

Our directors and executive officers as
of the date of this Report are as follows:

|Name                 | Age | Position                                                                          
|-------------------- | --- | ----------------------------------------------------------------------------------
|T.
      M. Williams | 63  | President and Chief Executive Officer and Chairman
      of our Board of Directors
|P. A. Crossgrove     | 65  | Director                                                                          
|H. W. Bromley        | 33  | Chief Financial Officer                                                           

T.
M. Williams has served as our President and Chief
Executive Officer and Chairman since August 20, 2001.  Since 1984, Mr. Williams has served as a principal of Tarpen
Research Corporation, a private consulting firm, and since 1993, he has been an
Adjunct Professor, Faculty of Commerce and Business Administration at the
University of British Columbia.  From
1988 to 1991, he was President and Chief Executive Officer of Distinctive
Software, Inc. in Vancouver, BC, and, upon the acquisition of that company by
Electronic Arts Inc., North America's largest developer of entertainment
software, he became President and Chief Executive Officer of Electronic Arts
(Canada) Inc., where he continued until 1993. Since 1993, Mr. Williams has also
been the Managing Partner of CEG, AVC and PEG Partnerships, created to invest in
entertainment software worldwide.  Mr.
Williams is a director of YM Biosciences, Inc. (a biotechnology company) and CellStop International Limited (a security
manufacturing company).

P.
A. Crossgrove has served as one of our Directors
since September 2001. Mr.
Crossgrove is currently the Chairman of Premdor Inc. (a door manufacturing
company), a position he has held since June 1997. From 1994 to 1997, he was the
President and Chief Executive Officer of Southern Africa Minerals (an investment
holding company). Mr. Crossgrove was also the President and Chief Executive
Officer of Itco Properties Ltd. (a real estate development and management
company) from 1982 to 1992 and Vice-Chairman of Placer Dome Inc. (a mining
company) in 1993 and 1994. Mr. Crossgrove is a director of a number of other
Canadian and U.S. public companies, including: QLT Inc. (a biotechnology and
pharmaceutical company), American Barrick Gold Corp. (a mining company), United
Dominion Industries Ltd. (an industrial equipment company), Dundee Realty
Corporation (a real estate company) and Philex Gold Inc. (a gold mining
company).

H. W. Bromley,
has served as our Chief Financial Officer since July 2002. From 2000 to 2001,
Mr. Bromley was a Director and the Group Financial Officer for Agroceres &
Co. Ltd. From 1995 to 1999 he was an employee of Ernst & Young working in
South Africa and in the United States of America. Mr. Bromley has in addition
worked for CitiBank, Unilever PLC and Gerrard. Mr. Bromley is a Chartered
Accountant.





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 shareholders. There are no family
relationships between any of the officers and directors of the Company.

Committees of our Board of Directors

We currently do not have any committees
of our Board of Directors. The full Board of Directors fulfills the role of the
Audit Committee.

Board of Directors Meetings

The
Company's Board of Directors met in person once during the last fiscal year on
August 5, 2002, and it regularly approves all actions required by consent
resolutions.

DIRECTOR COMPENSATION

Directors currently do not receive cash
compensation for their services as members of the Board of Directors,
although members are reimbursed for expenses in connection with
attendance at Board of Directors meetings and specific Company business
meetings.  Directors are eligible to
participate in our stock option plans. Option grants to directors are at the
discretion of the Board of Directors.

SECTION 16(a) BENEFICIAL
OWNERSHIP REPORTING COMPLIANCE

Section
16(a) of the Securities Exchange Act of 1934 requires the Company's directors
and executive officers, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission (the "SEC") initial reports of ownership and reports
of changes in ownership of common stock and other equity securities of the
Company. Officers, directors and greater than ten percent stockholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.

The
Company's officers, directors and greater than ten percent beneficial owners
filed in a timely manner in accordance with Section 16(a) filing requirements,
except for S. Murphy (a greater than ten percent stockholder) who failed to
comply with Section 16(a) filing requirements.

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

SUMMARY COMPENSATION TABLE

|                                             |      | Annual
      Compensation | Long-term
      Compensation |                                
|-------------------------------------------- | ---- | ------------------------- | ---------------------------- | -------------------------------
|Name
      and Principal Position            | Year | Salary                    | Bonus                        | Other Annual
      Compensation
|                                             |      | $                         | $                            | $                              
|T. M.
      Williams - President and CEO (1) | 2002 | 43,500                    | -                            | -                              
|                                             | 2001 | 80,000                    | -                            | -                              
|                                             | 2000 | -                         | -                            | -                              



(1)    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 in Employment Arrangements section of Item 11
of this report.



OPTION GRANTS IN THE LAST FISCAL YEAR

There were no stock options granted to
the executive officers during the fiscal year ended December 31, 2002. No stock
options were exercised by any our executive officers during the fiscal year
ended December 31, 2002.

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 December 31, 2002, options to purchase a total
1,700,000 shares remained outstanding at exercise prices ranging from $0.15 to
$1.45 per share. Options to purchase 195,000 shares remained available for
future grant under the 1999 Stock Option Plan.

Our 2001 Stock Option Plan has a total
of 2,000,000 shares of our common stock reserved for issuance upon exercises of
options under the plan. As of December 31, 2002, options to purchase a total
1,000,000 shares remained outstanding with exercise prices ranging from $0.05 to
$0.30 per share. Options to purchase 1,000,000 shares remained available for
future grant under the 2001 Stock Option Plan as at December 31, 2002.
Subsequent to year ended December 31, 2002, the Company granted 125,000 stock
options at $0.05 a share and cancelled 25,000 stock options.

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.

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.



EMPLOYMENT ARRANGEMENTS

The Company entered into a management
consulting agreement with T.M. Williams (Row), Ltd., an Anguilla incorporated
company and Mr. Williams dated August 20, 2001 (the "Williams
Agreement"), amended February 28, 2002, in connection with the provision of
services by Mr. Williams as President and Chief Executive Officer of the
Company.

The term of the amended Williams
Agreement is for a period of one year, unless terminated sooner by any of the
parties under the terms and conditions contained in the amended Williams
Agreement. If the amended Williams Agreement is not terminated by any of the
parties, the term may be renewed for a further one year period at the option of
T.M. Williams (Row), Ltd., on substantially the same terms and conditions, by
giving three months notice in writing to the Company. The agreement was renewed
for a further one year period on February 28, 2003 on substantially the same
terms and conditions. The Company will pay to T.M. Williams (Row), Ltd., 10% of
the operating profit of the Company, as defined in the amendment, to a maximum
of $25,000 per month, in arrears, during the duration of the amended Williams
Agreement, as consideration for the provision of the services of Mr. Williams as
President and Chief Executive Officer of the Company.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
  OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

PRINCIPAL
STOCKHOLDERS

The
following table sets forth certain information known to us with respect to
beneficial ownership of our common stock as of April 11, 2003 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. In computing the number of shares beneficially
owned by a person and the percentage ownership of that person, shares of common
stock subject to options or debentures held by that person that are currently
exercisable or convertible or exercisable or convertible within 60 days of April
11, 2003 are deemed outstanding.

Percentage of beneficial ownership is
based upon 11,104,608shares of common stock outstanding at April 11,
2003. 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 | 1,090,000                                 | (1) | 10%                   
|                                                                                                                      |                                           |     |                       
|Peter
      Crossgrove
      3769
      Escarpment Road
      Caledon,
      ON
      Canada,
      L0N 1C0           | 150,000                                   | (2) | 1%                    
|                                                                                                                      |                                           |     |                       
|All
      directors and Named Executive Officers as a group (2 persons)                                               | 1,240,000                                 |     | 11%                   
|                                                                                                                      |                                           |     |                       
|Bingo
      Inc. P.O. Box 727, Landsome Road
      The
      Valley,
      Anguilla,
      B.W.I.                     | 15,633,333                                | (3) | 52%                   
|                                                                                                                      |                                           |     |                       
|Shane
      Murphy
      San
      Jose
      Costa
      Rica                                                        | 2,100,000                                 | (4) | 15.21%                



(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.  Also includes 939,858 shares
held directly by Mr. Williams.  Mr.
Williams is the potential beneficiary of certain discretionary trusts that hold
approximately 80% of the shares of Bingo Inc. 
If 80% of the shares of common stock beneficially owned by Bingo Inc. are
included here, Mr. William's beneficial ownership changes to 13,596,525
shares, representing 45% 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.

(3)    
Includes 300,000 shares held directly by Bingo, Inc. In addition Total
Shares beneficially owned   includes
the shares of our common stock, which could be issued upon the conversion of the
Debenture "A" (10,000,000 shares) and Debenture "B" (333,333 shares)
outstanding at April 11, 2003.  Total
shares beneficially owned also includes the shares that could be issued upon the
exercise of stock purchase warrants to purchase a total of 4,800,000 shares of
common stock of the Company.

(4)    
Includes 1,100,000 shares of common stock that may be issued upon the
exercise of 1,100,000 stock purchase options with exercise prices ranging from
$0.44 to $0.75 per share.  Also
includes 1,000,000 shares of common stock issued to Mr. Murphy in accordance
with the Murphy Agreement These shares are subject to certain resale
restrictions.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The
Company has received total loans of $154,626 (2001 - $45,385) from T. M.
Williams the President and Chief Executive Officer during the year ended
December 31, 2002.

$32,695
related to half of the purchase price for the acquisition of Bingo.com (UK) plc.
Pursuant to the purchase agreement in connection with the acquisition by the
Company of Bingo.com (UK) plc., the balance of this loan plus interest is to be paid no later than six
months after August 15, 2002. Subsequent to the year ended December 31, 2002 the
loan was extended for a further six months to August 15, 2003. Interest shall
accrue on the outstanding amount at a fixed rate of 5% per annum.

$121,931
of the loan from T. M. Williams, the President and Chief Executive Officer of
the Company was used to fund working capital requirements. This loan is
non-interest bearing and has no fixed terms of repayment.

During the year ended December 31, 2002,
the Company received a loan for $42,508 (2001 - $nil) from a company owned by T.
M. Williams, the President and Chief Executive Officer of the Company
during the year ended December 31, 2002. The
loan is secured over certain assets that the funds were used to acquire.
Interest shall accrue on the outstanding amount at a fixed rate of 7% per annum.

In addition
the Company has a liability for $151,075 (2001 $84,843) to a company owned by T.
M. Williams, the President and Chief Executive Officer of the Company for
payment of services rendered and expenses incurred by T. M. Williams on behalf
of the Company.

On April 16,
2001, the Company issued $500,000 face amount of a secured convertible Debenture
"A" to Bingo Inc., an Anguilla corporation. Effective May 21, 2002 Bingo
Inc. acquired $750,000 of the Debenture "A" from an unrelated party. On July
2, 2002 Bingo Inc. acquired a $50,000 convertible Debenture "B". T.M.
Williams, our President and  Chief
Executive Officer, is the potential beneficiary of various discretionary trusts
that hold approximately 80% of the shares of Bingo Inc. However T. M. Williams
was not a director or officer of the Company at the time the Debenture "A"
was entered into by the Company in 2001. The Company has accrued interest
payable to Bingo, Inc. of $206,694 (2001 - $25,032) on Debenture "A" and
$3,008 on Debenture "B".

In addition
Bingo, Inc. was issued a total of 4,800,000 common stock purchase warrants in
connection with the Debenture "A" and 200,000 common stock purchase warrants
in connection with the Debenture "B".  These
warrants are exercisable at a price of $0.25 per share for a period of three
years from the dates of issuance of each of the Debenture "A" and Debenture
"B".

Payments
made to Bingo, Inc. in relation to the Domain name purchase payment totaled
$196,795 during the year ended December 31, 2002 (2001 - $361,869), of which
$185,000 related to the final payment made in accordance with the agreement for
the minimum guaranteed domain name purchase payments of the domain name rights
and the remaining $12,023 related to payments based on the continuing 4% of the
proceeding months gross revenue as defined in the amended agreement, of which
$6,327 was due at December 31, 2002. The agreement was amended during the year
ended December 31, 2002.

A former
director of the Company, who resigned during the year ended December 31, 2002,
was a director of two companies with which the Company conducted business during
the recently completed financial year. Sales of $121,000 and expenses of
$84,000, relating to web hosting, advertising and License fee for Skill bingo,
were incurred during the period the director held office in the Company.

ITEM 14. 
CONTROLS AND PROCEDURES

(a)       
Evaluation of disclosure controls and procedures.

The
management of the Company evaluated the disclosure controls and procedures of
the Company as at February 18, 2003 and found them to be operating efficiently
and effectively to ensure that information required to be disclosed by the
Company under the general rules and regulations promulgated under the Securities
Exchange Act of 1934, is recorded, processed, summarized and reported, within
the time periods specified by rules of the SEC. These disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed by the Company is accumulated
and communicated to the management of the Company, including its principal
executive officer and principal financial officer as appropriate to allow timely
decisions regarding required disclosure.

(b)       
Changes in internal controls.

There
were no significant changes in the internal controls of the Company or other
factors that could significantly affect the Company's internal controls during
the year ended December 31, 2002 and to the date of filing this annual report.

















PART IV

ITEM
  14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

The following documents are filed as part of this Form
10-K:

(1) FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

The following audited financial statements of the Company
are included in Item 8, together with notes thereto:

Consolidated Financial Statements:

Balance Sheets

Statements of Operations

Statements of Stockholders' Equity

Statements of Cash Flows



All financial statement schedules are
omitted because they are not required, they are not applicable or information
appears included in the financial statements or notes thereto.

(2) EXHIBITS

The exhibits required by Item 601 of Regulation S-K are
listed in the accompanying Exhibit Index.  Each
management contract or compensatory plan or arrangement required to be filed as
an exhibit to this Form 10-K has been identified.

(3) REPORTS ON FORM 8-K

Current Report on Form 8-K filed November 14, 2002, filing
as an exhibit Statements Under Oath of Principal Executive Officer and Principal
Financial Officer Regarding Facts and Circumstances Relating to Exchange Act
Filings pursuant to 18 U.S.C. Sec. 1350, as created by Section 906 of the
Sarbanes-Oxley Act of 2002.

Form 8-K filed on November 20, 2002, reporting on the
events and outcome of the business conducted at the Company's Annual General
Meeting held October 8, 2002.

Form 8-K filed on March 31, 2003, reporting the change of
independent accountants from Davidson & Company, Chartered Accountants to
Dohan & Company, CPA's, P.A..









SIGNATURES

Pursuant to the requirements of Section
13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on behalf of the undersigned, thereunto duly
authorized.

BINGO.COM,
INC.



By:      
/s/  T. M. Williams

T.
M. Williams

President
and Chief Executive Officer



Date:   
April 15, 2003

Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the following persons on
behalf of the Company and in the capacities and on the dates indicated:

|Signature | Title | Date
|--------- | ----- | ----

By:      
/s/  T. M. Williams            President and Chief                  
April 15, 2003

T. M. Williams                         
Executive Officer and

Director
(Principal

Executive Officer)





By:      
/s/  P. A. CrossgroveDirector                                   
April 15, 2003

P.
A. Crossgrove





By:      
/s/  H. W. BromleyChief Financial Officer               
April 15, 2003

H. W. Bromley                        
(Principal Financial and

Principal
Accounting Officer)









































CERTIFICATIONS

I,
T. M. Williams, certify that:

2.     
Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3.     
Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
Bingo.com, Inc. as of, and for the periods presented in this annual report;

4.     
The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a)     
designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;

b)     
evaluated the effectiveness of Bingo.com, Inc. disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

c)     
presented in this annual report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as the
Effective Date;

5.     
The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors, audit committee
of the registrant's board of directors (or persons performing the equivalent
function):

a)     
all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

b)     
any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls;
and

6.     
The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.



Signed:  /S/ T. M. 
Williams                                                   
Date :April 15, 2003

T. M.
Williams, Chairman of the Board,

Chief
Executive Officer, President and Secretary

(Principal
Executive Officer)















CERTIFICATIONS

I, H. W.
Bromley, certify that:

1.  
I have reviewed this annual report on Form 10-K of Bingo.com, Inc.;

2.  
Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3.  
Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
Bingo.com, Inc. as of, and for the periods presented in this annual report;

4.  
The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a)     
designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;

b)     
evaluated the effectiveness of Bingo.com, Inc. disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

c)     
presented in this annual report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as the
Effective Date;

5.  
The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors, audit committee
of the registrant's board of directors (or persons performing the equivalent
function):

a)  
all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

b)  
any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls;
and

6.  
The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.



Signed:  /S/ H. W. Bromley                                                   
Date :April 15, 2003

H.W.
Bromley,

Chief
Financial Officer

(Principal
Accounting Officer)

































EXHIBIT
LIST

The following instruments are included as exhibits
to this Report.  Exhibits
incorporated by reference are so indicated.

Exhibit

Number
      Description

4.1              $1,250,000.00 Secured Convertible Debenture "A" between the Company,
Redruth Ventures Inc, and Bingo, Inc. dated April 16, 2001. (b)

4.2              Common Stock Purchase Warrant "A" between the Company and Redruth
Ventures Inc. a British Virgin Islands corporation dated April 16, 2001. (b)

4.3              Common Stock Purchase Warrant "A" between the Company and Bingo, Inc.
dated April 16, 2001. (b)

4.4             
  Convertible Debenture "B" between the Company and unrelated parties
dated July 2, 2002. (d)

4.5              Common Stock Purchase Warrant "B" between the Company and unrelated
parties dated July 2, 2002. (d)

10.2         
  Asset
Purchase Agreement by and between Bingo, Inc. and Progressive Lumber, Corp.
dated January 18, 1999. (a)

10.25          The restructuring of the existing relationship between CYOP Systems Inc.,
CYOP Systems International Incorporated, Bingo.com Inc. and Bingo.com (Canada)
Enterprises Inc. dated May 21, 2002. (c)

10.26          The Purchase and Sale Agreement Between Redruth Ventures Inc. and
Bingo.com, Inc. dated May 21, 2002. (c)

10.27          Consulting agreement dated July 2, 2002, between the Company, Bromley
Accounting Services Ltd and Mr. H. W. Bromley. (c)

10.28          Share Purchase agreement between
  T.M. Williams and Bingo.com, Inc. for
the purchase of shares in Bingo.com (UK) Plc. dated August 15, 2002. (d)

10.29          Amendment of Asset Purchase Agreement dated July 1, 2002.



(a) Previously filed with the
Registrant's registration statement on Form 10 on June 9, 1999.

(b) Previously filed with the
Company's quarterly report on Form 10-Q for the period ended June 30, 2001, on
June 25, 2001.

(c) Previously filed with the
Company's quarterly report on Form 10-Q for the period ended June 30, 2002, on
August 14, 2002.

(d) Previously filed with the
Company's quarterly report on Form 10-Q for the period ended September 30,
2002, on November 14, 2002.





















Exhibit
10.29

AMENDMENT OF ASSET PURCHASE AGREEMENT



THIS AGREEMENT
made effective as of the 1st day of July, 2002.

BETWEEN:

BINGO, INC.,
a corporation incorporated pursuant to the laws of Anguilla, having an address
for notice at P.O. Box 1127, The Hansa Bank Building, Landsome Road, The Valley,
Anguilla, B.W.I.

(the
"Vendor")

AND:

BINGO.COM, INC.,
a corporation incorporated pursuant to the laws of the state of Florida, having
an address for notice at P.O. Box 1078, Suite 1500, 885 West Georgia Street,
Vancouver, British Columbia, Canada V6C 3E8

(the
"Purchaser")

BACKGROUND:

A.        Under an asset purchase
agreement (the "Asset Purchase Agreement") dated 18 January 1999 made between
the Vendor and the Purchaser, the Vendor agreed to sell and the Purchaser agreed
to purchase all of the Vendor's right, title, and interest in and to the
second-level domain name "bingo.com."

B.        The Vendor and the
Purchaser acknowledge and confirm that, as of the date of this Agreement, the
Purchaser has paid $1 100 000 as the minimum Purchase Price set out in the Asset
Purchase Agreement.

C.        The Vendor and the
Purchaser have agreed to amend the Asset Purchase Agreement on the terms and
conditions set out in this Agreement.

AGREEMENTS:

In
consideration of the mutual covenants and agreements contained in this
Agreement, the parties covenant and agree as follows:

1.         Definitions.
The definition in section 1.1 (e) of the Asset Purchase Agreement is deleted and
replaced with the following:

(e)        
"Escrow Agent" means .

2.         Default.
Article 4 of the Asset Purchase Agreement is amended by adding the following as
new section 4.1A:

4.1A    Unless
waived by the Vendor, it will be a default under this Agreement and the security
constituted by section 4.2 of this Agreement will immediately become due and
enforceable in the same manner as if the Default Period had expired and the
Purchaser has not made the outstanding payment specified therein if:

(a)       
a receiver or receiver-manager is appointed over the assets or
undertaking of the Purchaser;

(b)        
distress, execution, or seizure of any of the Purchaser's assets
occurs; or

(c)        
the Purchaser is in default of, or terminates without the consent of the
Vendor, the Escrow Agreement made between the Purchaser and the Escrow Agent.

3.         Schedule
A. The parties agree that, in consideration of the Vendor accepting a
debenture (and associated Warrant) issued by the Purchaser in the form attached
as Exhibit 1 to this Agreement on account of $50 000 of the payment owing by the
Purchaser pursuant to section 4 of Schedule A to the Asset Purchase Agreement,
sections 5 and 6 of Schedule A to the Asset Purchase Agreement are deleted, and
the following text is added as new section 5 of Schedule A to the Asset Purchase
Agreement:

5.        
for each month from 1 July 2002 to 31 December 2098, four percent of the
Gross Revenue of the Purchaser for the month will become due and payable to the
Vendor at the following times:

(a)       
for the months of July 2002, August 2002, and September 2002, on 15
October 2002; and

(b)       
for each month from 1 October 2002 to 31 December 2098, on the fifteenth
day of the immediately following month.

4.         Ratification.
Except as expressly amended by this Agreement, the parties ratify and confirm
the Asset Purchase Agreement. The Asset Purchase Agreement and this Agreement
will be read and construed as one document.

5.         Time.
Time is of the essence of this Agreement and remains of the essence of the Asset
Purchase Agreement.

6.         Counterparts.
This Agreement may be executed in any number of counterparts and by different
parties on separate counterparts, each of which when so executed and delivered
is deemed an original, but all of which together constitute a single instrument.
Delivery of an executed counterpart of a signature page of this Agreement by
facsimile transmission is as effective as delivery of a manually executed
counterpart of this Agreement.

TO EVIDENCE THEIR
AGREEMENT the parties
have executed this Agreement with effect as of the date written on page one,
above.

Bingo,
Inc.                                                              
Bingo.com, Inc.



by:    
_/s/D. Curtis________                                     
by:       /s/
T. M. Williams___

Authorized Signatory
Authorized Signatory