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, 2000
                                             -----------------

                                       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                     (I.R.S. Employer
  incorporation or organization)                      Identification No.)

       4223 Glencoe Avenue,
            Suite C200

     Marina Del Rey, California                             90292
    ----------------------------                        ------------
(Address of principal executive offices)                  (Zip Code)

       Registrant's telephone number, including area code: (310) 301-4171
       ------------------------------------------------------------------

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

         Title of each class           Name of each exchange on which registered

                None                                         None
    --------------------------                     --------------------------

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

                    COMMON STOCK, PAR VALUE $.001 PER SHARE
                    ---------------------------------------
                                (Title of class)
<PAGE>

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 |X|

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates of the registrant computed by reference to the closing price
of such stock on the National Association of Securities Dealers Over the Counter
Bulletin Board market as of March 30, 2001 being $0.13 per share: $1,311,519.

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date: The number of shares of the
Registrant's common stock outstanding on March 31, 2001 was 10,088,608. The
Registrant's common stock is traded on the National Association of Securities
Dealers Over the Counter Bulletin Board market, symbol BIGR

                      DOCUMENTS INCORPORATED BY REFERENCE

None


                                     - ii -
<PAGE>

                               TABLE OF CONTENTS

                                                                    Page No.

PART I.........................................................................1
 Item 1.  Business.............................................................1
 Item 2.  Properties..........................................................21
 Item 3.  Legal Proceedings...................................................21
 Item 4.  Submission of Matters to a Vote of Security Holders.................21

PART II.......................................................................21
 Item 5.  Market for Registrant's Common Equity and Related Stockholder
           Matters............................................................21
 Item 6.  Selected Financial Data.............................................23
 Item 7.  Management's Discussion and Analysis of Financial Condition and
           Results of Operation...............................................24
 Item 8.  Financial Statements and Supplementary Data.........................26
 Item 9.  Changes in and Disagreements With Accountants on Accounting and
           Financial Disclosure...............................................26

PART III......................................................................28
 Item 10. Directors and Executive Officers of the Registrant..................28
 Item 11. Executive Compensation..............................................30
 Item 12. Security Ownership of Certain Beneficial Owners and Management......33
 Item 13. Certain Relationships and Related Transactions......................34

PART IV.......................................................................34
 Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K....34


                                    - iii -
<PAGE>

                                     PART I

Item 1. Business.

Introduction

Bingo.com, Inc. (the "Company") is in the business of developing and operating a
Bingo based website designed to provide a variety of free games and other forms
of entertainment, including chat, sweepstakes, BingoGrams, and more. The Company
is continuing the business plan to create a value based web site, which will be
backed up by an extensive database of registered players and their buying
preferences.

The Company provides content to our players in the form of free-to-play, theme
Bingo games, such as Astrology Bingo, Cupid Bingo, etc. Our players play Bingo
and enjoy chatting with each other in a safely competitive and engaging
environment with a fun array of sound effects and graphic styles. We have
designed our games to give us the flexibility to add game themes rapidly. We
also offer our registered players other forms of entertainment including
sweepstakes, fortune telling, and more.

Corporate Structure and Background

We have three subsidiaries:

o     Bingo.com (Canada) Enterprises Inc., a British Columbia corporation;

o     Bingo.com (Antigua), Inc., an Antigua International Business Corporation
      (inactive); and

o     Bingo.com (Wyoming), Inc., a Wyoming corporation (inactive).

Our corporate structure is as follows:

<TABLE>
<S>                                                                                                                <C>
                                                  --------------------
                                                     Bingo.Com, Inc.
                                                  Florida Corporation
                                                      OTCBB (BIGR)
                                                  --------------------
                                                           |
                 ------------------------------------------|------------------------------------------
                 |                                         |                                          |
-----------------------------------     ------------------------------------------    ------------------------
Bingo.com (Canada) Enterprises Inc.              Bingo.com (Antigua), Inc.            Bingo.com (Wyoming), Inc.
  British Columbia Corporation          Antigua International Business Corporation      Wyoming Corporation
        Wholly owned                                  Wholly owned                          Wholly owned
-----------------------------------     ------------------------------------------    ------------------------
</TABLE>

(1) Bingo.com (Canada) was incorporated on February 10, 1998 as 559262 B.C. Ltd.
and changed its name to Bingo.com (Canada) Enterprises Inc. on February 11, 1999

(2) Bingo.com (Antigua) was incorporated on April 7, 1999 as Star Communications
Ltd. and changed its name to Bingo.com. (Antigua), Inc. on April 21, 1999

(3) Bingo.com (Wyoming) was incorporated in the State of Wyoming on July 14,
1999.
<PAGE>

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

On July 17, 1998, we filed our Articles of Amendment and increased our
authorized share capital to 50,000,000 common shares with a $0.001 par value per
share. We also authorized 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, our management changed, and we began to implement our strategy
to become a leading online provider of Bingo based games and entertainment. On
January 13, 1999, we filed our Articles of Amendment to amend our Articles of
Incorporation and change our name to "Bingo.com, Inc.," effective January 22,
1999.

We organized Bingo.com (Canada) in February 1999 and Bingo.com (Antigua) in
April 1999 to facilitate the implementation of our then business plan. We
organized Bingo.com (Wyoming) on July 14, 1999, to restructure our corporate
organization because Florida law would not allow us to continue to a
jurisdiction outside the United States. We have subsequently redeveloped our
business strategy into a plan that does not include continuing operations in
Antigua; therefore, we do not need to proceed with the reorganization into
Bingo.com (Wyoming).

In March, 2000, Bingo.com, Inc. relocated its principal executive offices to Los
Angeles, California to facilitate implementation of the business plan.

Bingo.com (Canada), Bingo.com (Antigua) and Bingo.com (Wyoming) remain as
subsidiaries.

Our common shares are currently quoted on the National Association of Securities
Dealers' Over-The-Counter Bulletin Board (also known as the "OTCBB") under the
symbol "BIGR." We cannot, however, assure you that we will continue to qualify
for quotation on the OTCBB. We have not been subject to any bankruptcy,
receivership or other similar proceeding.

Bingo.com Domain Name

On January 18, 1999, we purchased the exclusive right to use the domain name
"Bingo.com".

We purchased the exclusive right to use the domain name "Bingo.com" from Bingo,
Inc. for (i) $200,000, (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,
royalties in the amount of 4% of our annual gross revenues with a total minimum
guarantee of $1,100,000. 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 web-site and portal based on the name, the ease of
internet browser searchability of the domain name and the ability of visitors to
our web-site to remember and associate the name with our web-site 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.


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<PAGE>

The Business of Bingo.com

Overview

The Company intends to become the leading online provider of Bingo based games
and entertainment. The Company intends to leverage the worldwide popularity of
Bingo with the exponential growth of the Internet to become the premier online
Bingo site.

We are in the business of developing and operating an entertainment and service
based website designed to provide a variety of free games and other forms of
entertainment, initially focused on the game bingo and including chat,
sweepstakes, and more. We are attempting to create a value-based website and
on-line services, planned to include an extensive database of registered players
and their buying preferences.

Our primary objective is to provide Internet users a web-site offering a variety
of bingo based games and entertainment. In August 1999, the Board prohibited
operations in jurisdictions with laws prohibiting on-line gaming. In August
1999, the Company revised its business plan and focused on developing a
prize-based, play-for-free games emphasizing entertainment. In December 1999,
the Company launched its first play-for-free game and revamped website.

During the quarter ended September 30, 2000, 3.3 million player sessions were
offered to the Company's registered players and the average visitor session
length grew to an average of approximately 65 minutes, compared to 50 minutes in
the first quarter and to 62 minutes in the second quarter. The Company was rated
the stickiest site on the Web.

Although games are free to play, players are required to register with Bingo.com
to receive prizes and to access certain premium features on the site. All
registration information is stored in online databases and the Company will use
that data to select which advertisements are displayed to each user. This will
allow advertisers to target their messages to their selected subset of
Bingo.com's audience.

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 on-line and off-line advertising. The Company has signed several
license agreements with partners who will co-brand versions of Bingo.com games
on their sites. 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 web-sites and media content providers that
have reciprocal links to Bingo.com, or to display advertising.

We have built multiple revenue streams. We believe 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. We will continue to sell
advertising space on the Bingo.com web site.

The Company's web site has been rated one of the "stickiest" if not the
"stickiest site on the web" numerous times by some of the most reputable data
ratings services such as Media Metrix and Nielsen's Net Ratings. Our quarterly
revenues have increased and we also have a steady


                                     - 3 -
<PAGE>

increase in our website traffic and registered users. Bingo.com was voted the
number one Bingo site by Reader's Choice Polls in 2000.

We believe that our growing user base and stickiness will provide advertisers
with an attractive platform to reach their target audience. Because we can
continue to attract a large, diversified user base and can segment it based upon
information we collect, such as geography, age, gender and income levels, we
believe we will be able to further target advertisements to particular
demographic profiles specified by our advertisers.

The Company is managed by its own management team and operates principally from
Los Angeles, California. There have been no significant changes to senior
management during the most recently completed fiscal year. The Company continues
to draw upon programming and technical resources in Vancouver, B.C. through
consulting agreements with specific individuals.

The entertainment aspect of Bingo.com does not include adult content.

The Industry

The Internet:

Initially envisioned as a common information space in which we communicate by
sharing information, the World Wide Web has developed into a gateway to
multimedia experiences and has created whole new forms of entertainment,
information delivery and business opportunities. The Internet is a mass
communications and commerce medium that millions of people worldwide use to
share information, communicate and conduct business electronically.
International Data Corporation, or IDC, a market research firm, estimates that
the number of Internet users worldwide will grow from 142 million in 1998 to
more than 500 million by the end of 2003. The relatively lower costs of
publishing content on the Internet and the availability of powerful new tools
for the development and distribution of content have led to the rapid growth of
the internet.

Conducting business on the Internet:

Electronic commerce is an area of growth and opportunity as more people
recognize and utilize the Internet as a vehicle through which to buy and sell
goods and services.

The continuing use of the Internet for commercial purposes also represents a
significant opportunity to sell goods and services over the Internet. With more
than 500 million-web users expected world wide by the end of 2003, 183 million
of them are predicted to generate over $1.3 trillion in purchases on the web,
according to International Data Corporation. As electronic commerce grows,
companies are expected to increasingly use the Internet to reach their
customers.

The Internet can reduce costs and level the playing field for small and large
businesses, allowing them to extend their reach globally. As well, the
availability of sophisticated Internet and Web technology, improved security
mechanisms, and the increasing acceptance of the new communications medium are
fuelling the use of e-commerce by businesses and consumers. We believe that
consumers' trust in the Internet will increase as the number of successfully


                                     - 4 -
<PAGE>

completed transactions increases. Consumers' attitudes are rapidly changing and
they are rapidly gaining confidence with transacting business over the Internet.

We believe that the way in which products and services will be directly or
indirectly sold in the future will increasingly have a significant and growing
Internet component. Leading businesses throughout the world are developing their
Web strategies to take advantage of this shift in the way consumers will receive
product and service related information and purchase goods and services. Web
traffic can be directed based on preferences indicated and historical
transactions enacted. Revenue generation models can be built and easily measured
based on traffic sources, volumes and purchase amounts.

We believe that the Company's focus on entertainment content will attract
visitors with demographic consumer profiles that will appeal to advertisers. As
a result, we believe that the Company will be able to sell all types of
advertising and enter into promotional joint ventures with a broad spectrum of
businesses.

Advertising through the Internet:

The Internet is changing the advertising community. It is causing a change in
the way companies reach their desired customer base. On-line advertising is
creating a faster, more focused, and dynamic method of reaching customers who
have personally selected their area of interest. The global proliferation of
computers in businesses and the home and the increasing connectivity through the
Internet has presented the advertising community with a new medium through which
to communicate their client's messages. The Internet is becoming an accepted
medium for advertising and e-commerce. In order to better understand the
demographics of the site visitor, companies are asking customers to first
provide information about themselves, allowing marketers to determine customer
needs based on actual preferences. Web-sites are an effective medium to poll
customers quickly, precisely and cost-effectively. This allows the web-site to
make changes rapidly that will attract more target customers and generate
greater advertising revenue through customized advertising and promotions.

We believe that a significant percentage of businesses' advertising budgets will
be allocated to funding a comprehensive Web strategy. We believe advertisers are
and will increasingly be advertising on web-sites with a volume of users
matching the demographic profile of the advertiser's target consumer.

The key is the ability of marketers to measure the Web audience on a competitive
basis with other media such as broadcasting, cable or print. We believe that
measurement criteria focusing on players' interests, page views and duration is
roughly comparable to conventional advertising measurement criteria such as
frequency and reach. Our large and growing base of registered players, the
demonstrated stickiness of our site along with demographic segmentation and
analysis present an advantage in selling to targeted advertisers.

The unique interactive nature of the Internet allows advertisers to:

o     reach broad global audiences from anywhere in the world;


                                     - 5 -
<PAGE>

o     gather demographic information and target their messages to specific
      groups of consumers;

o     change their advertisements frequently in response to market factors,
      current events and consumer feedback; and

o     more accurately track the effectiveness of their advertising messages.

We intend to demonstrate that an integral component of the Bingo.com site will
be our ability to analyze the statistical basis of our user base profiles. We
collect certain demographic information (age, income, household size,
occupational class, etc.), which will allow advertisers to target their
marketing efforts to certain user profiles. The web site also tracks a number of
monthly, daily and hourly statistical criteria, including user type (.net -
network, .gov - government, .com - commercial, .edu - educational, etc.),
duration on line, page views, geographic location (.ca - Canada, .fr - France,
 .uk - United Kingdom, etc.) and download file size. We intend to use this
information to sell an advertising rate structure used by Bingo.com, Inc. and to
market our web-site to advertisers. We believe that advertisers evaluate portals
and web-sites in advertising buying decisions based on statistical criteria such
as number of visitors, length of visits, page views and files downloaded. We
believe that the anticipated growth in registered player base and reported
stickiness of the site will make the website very attractive to potential
advertisers.

The Niche

The Company is continuing to position itself to become a leading entertainment
site 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.

Bingo is reported to be the most socially acceptable form of gaming in the
world, with a 79% acceptability rate from the general public. Research indicates
that, in North America, on a per visit basis, Bingo is more popular than all
Hollywood movies, rock concerts, professional sports and casinos combined. A
Federal Study suggests that nearly 70% of Bingo players are between the ages of
18 and 44, and the Baby Boomers are playing Bingo more than ever. This is the
generation that 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 while allowing them to access entertaining content
according to their own schedule from their own location. Bingo.com intends 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.

We believe our 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 enable the site
to enjoy lengthy visits. We believe the nature of the Company's 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.


                                     - 6 -
<PAGE>

The Company intends to promote the Bingo.com brand name by establishing a large
syndication network and by building alliances 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:

The Company is recognized as one of the premier on-line destinations for
web-based bingo entertainment and a leading entertainment destination on the
Internet. During the third quarter of the 2000 fiscal year, 3.3 million player
sessions were offered to the Company's registered players. During the quarter
ended September 30, 2000, the average visitor session length grew to an average
of approximately 65 minutes compared to 50 minutes in the first quarter and to
62 minutes in the second quarter. The Company was rated the stickiest site on
the Web by some of the most reputable data ratings services including Media
Metrix and Nielsen's Net Ratings.

Registered players are provided with a variety of free games and other forms of
entertainment such as chat, sweepstakes, and more. The free Bingo games can be
played for points, which are redeemable for prizes. The first games on the site
included the International Bingo, "Astrology Bingo", "Groovy Bingo", and
"Hollywood Bingo". We are able to create low-cost content through creative
face-changes of the standard bingo games. These `faces' can reflect themes,
corporate interests or other targeted messages. The games are being developed to
maximize the value of the detailed data gathered from players. In addition, we
have entered into agreements with other parties to provide a combination of
entertainment and community information at a reasonable cost, and expects to
build relationships and enter into agreements with other content providers in
the future.

Build multiple revenue streams:

We have built multiple revenue streams by leveraging off the value of the
ability to direct the growing player database and their buying power to merchant
partners, we intend to pursue affinity program strategies.

We also intend to pursue a strategy to grow revenue generating opportunities
through affiliations and potential associations with national merchant websites
and other demographically similar businesses of all types.

Revenue calculations are based on click-throughs, percentage of sales
transactions, or other methods depending on the details of the agreements.

Expand registered user database:

We have demonstrated the ability to attract and keep a larger demographic
population. It is our intention to continue the growth of our database through
expansion of our co-branding strategy


                                     - 7 -
<PAGE>

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 web-site traffic reports indicate that an
average of 1500 new players a day are registering with Bingo.com. There has been
in excess of 45,000 unique visitors per day, 8 million hits per day, and an
average visitor session length of more than 65 minutes. The Company is becoming
the premier on-line destination for web-based bingo entertainment and a leading
entertainment destination on the Internet.

Leverage licensed users and alliances:

We have demonstrated that the variety of games and entertainment available on
the website will encourage many visitors to come, stay, play and revisit often.
Game winners at Bingo.com win BingoBucks, which are redeemable for prizes
through associations with other web-sites and merchants. In the process of
providing a one-stop entertainment arena for Bingo lovers, we are creating a
value based web-site which is backed by an extensive database of registered
players and their buying preferences. We believe the value of this demographic
data has enabled Bingo.com to generate premium CPM and CPC rates. We believe we
can leverage that detailed information to build relationships and alliances with
other websites and merchants, meanwhile also offering Bingo Bucks winners a wide
variety of options for spending their winnings.

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 advertising revenues. We
believe that Bingo.com 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 the leading entertainment destination on
the Internet.

Marketing Strategy

Our goal is for Bingo.com 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.
We plan to expand beyond traditional on-line and off-line media methods,
targeting advertising towards specific demographic audiences as determined by
the detailed database of registered players, as well as the Bingo community of
today.

We have entered into promotional partnerships giving Bingo.com a strategic
position on some strategic real estate on the Internet. Advertising will be
focussed on promoting Bingo.com within the North American and in targeted
international markets through strategic partnerships, co-branding and other
promotional activities with a variety of companies. This strategy is intended to
further develop the growing database of registered players.


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<PAGE>

Business Development Costs

The original business plan included Bingo.com (Canada) developing and operating
the website; however, we intend for the Company to directly incur any further
development costs and maintain operations of the web-site.

Employees

As of December 31, 2000, Bingo.com, Inc had eleven full-time employees and two
part-time employees located in our principal executive offices at 4223 Glencoe
Avenue, Suite C200, Marina del Rey, California. From time to time, the Company
retains consultants and consulting firms to provide special expertise in
developing marketing, software and telecommunications technologies.

Competition

The Company will face competition primarily from other companies that target the
entertainment segment of the market. Lycos, through Gamesville, and Flipside,
are large online entertainment destinations, offering game shows and other
interactive experiences to users. We will continue to compete with these two
large sites as well as many other smaller offerings.

The convergence of multimedia communications (voice, data, video, Internet) and
the constantly increasing capability of technologies to deliver these media will
permit increasing interactivity and allow for more media rich content to be
delivered over the Web. We intend to differentiate the Company from our
competitors by focusing primarily on Bingo related content. Our statistics
indicate that the length of time visitors spend on the web site exceeds that of
most of our competitors.

Trademarks and Intellectual Property Protection

In keeping with our strategy to build value through our registered user data
base, we filed a provisional patent application with the U.S. Patent and
Trademark Office during the second quarter of the fiscal year 2000, entitled
"Method and Apparatus for Directing Interleaved Messages in a Network Based
Interactive Application", a software application program. Subsequent to December
31, 2000 we determined that it was no longer necessary and the provisional
patent was allowed to expire.

Bingo.com, Inc. will continue to consider the need to apply for trademark
registration and protection for its logo and various phrases in Canada and the
United States. At this time Bingo.com, Inc. has not submitted any applications
for trademark registration. In the event that Bingo.com, Inc. determines that it
has created an asset whose value can be protected, it will attempt to protect
its proprietary asset by applying for patents, copyrights or trademarks. In
addition, Bingo.com, Inc. intends to rely on trade secret laws and
non-disclosure and confidentiality agreements with its employees and
consultants, who have access to its proprietary technology, to protect its
technologies.


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<PAGE>

Bingo.com (Antigua)

Overview

In the original business plan, Bingo.com (Antigua)'s primary objective was to
develop an on-line bingo game and Internet gaming business. The International
Bingo Wagering game was launched on July 28, 1999. The game accepted a wager
only from permitted jurisdictions and was the first revenue generating product
in the marketplace. Our current business plan does not include operating an
on-line wagering gamesite.

Bingo.com (Antigua) - Licensing

On April 16, 1999, Bingo.com (Antigua) was granted a license to operate an
offshore virtual casino wagering business, effective April 30, 1999. The license
was granted under the authority and jurisdiction of the Antigua and Barbuda Free
Trade and Processing Zone in accordance with Statutory Instruments 1997 No.
20-Virtual Casino Wagering and Sports Book Wagering Regulations, made by the
Minister under Section 27 of the Free Trade and Processing Zone Act No. 12 of
1994. Bingo.com (Antigua) paid a license fee of $100,000 to the Barbuda Free
Trade and Processing Zone on April 16, 1999 and began to offer a live version of
the Bingo.com bingo game on July 28, 1999. We wrote off the cost of the license
in 1999 and allowed it to expire in April of 2000.

Bingo.com (Antigua) Operations

Although the initial business plan established the viability of operating an
on-line bingo game, accepting wagers from certain jurisdiction, changes in the
marketplace indicated that it was not in the best interest of the shareholders
or Bingo.com, Inc. to continue to pursue this strategy.

Many countries are currently struggling with issues surrounding wagering and
gambling over the Internet. More specifically, they are considering the merits,
limitations and enforceability of prohibition, regulation or taxation of
wagering and gambling transactions that are transacted over the Internet. There
are significant differences of opinion and law between countries such as the
United States, Canada, Australia, Liechtenstein and Antigua.

There is little case law authority related to the interpretation of gaming
statutes as they relate to the Internet and the wording of many of the
applicable statutes is ambiguous. Consequently, it is possible that Bingo.com
(Antigua)'s planned activities may be alleged to violate an applicable statute
based on an interpretation of the statute, which differs from ours, or based on
a future change of law or interpretation or enforcement policy. Such allegations
could result in either civil or criminal proceedings brought by governmental or
private litigants. As a result of such proceedings, we or Bingo.com (Antigua)
could incur substantial litigation expense, fines, diversion of the attention of
key employees, and injunctions or other prohibitions preventing Bingo.com
(Antigua) from engaging in various anticipated business activities. Also, if it
were finally determined that Bingo.com (Antigua) did violate applicable law,
then civil damages or criminal penalties could be imposed and Bingo.com
(Antigua) might be barred from pursuing that activity. Such an outcome would
have a material adverse effect on our business and our results of operations.


                                     - 10 -
<PAGE>

Bingo.com, Inc. does not want to expose its shareholders to such risks, nor
limit opportunities for strategic partnerships or financial alliances. We
believe that discontinuing Antigua operations will better serve the interests of
the shareholders and the parent company, Bingo.com, Inc.

Bingo.com (Antigua) Business Development and Windup Costs

As of December 31, 2000, we have recorded a loss from discontinued operations of
approximately $46,000 related to discontinuing our Antigua based gaming
operation, compared to the loss of $554,000 recorded in 1999, at which time a
reserve of $60,000 was recorded.

DEVELOPMENT OF THE BUSINESS OF BINGO.COM INC., BINGO.COM (CANADA), BINGO.COM
(ANTIGUA)

Since January 2000, we have taken the following steps to implement our business
plans:

o     Launched the new Bingo.com web-site with Play-4-Free bingo games;

o     Entered into agreements and affiliate relationships to promote Bingo.com,
      generate traffic to the site, and increase the registered user database;

o     Relocated the principal executive offices to Los Angeles, California;

o     Implemented internal financial controls;

o     Built multiple revenue streams;

o     Entered into revenue generating co-brand agreements with other websites;

o     Entered into agreement with Cox Interactive Sales to manages the sale of
      advertising space on Bingo.com;

o     Terminated the agreement with Cox Interactive Sales, effective subsequent
      to December 31, 2000, in order to bring the sales process in-house;.

o     Initiated the process to bring the majority of the sales efforts in-house
      and hire our own dedicated sales force;

o     Taken steps to revise and reduce operating requirements;

o     Secured additional financing for $1,250,000.

No matters were submitted to shareholders during the fiscal quarter ended
December 31, 2000.

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.


                                     - 11 -
<PAGE>

General

We have a Limited Operating History and a History of Losses, Which Makes Our
Ability to Continue as a Going Concern Questionable

As noted in the audit report for the fiscal year ended dated December 31, 2000,
our operations and the operation of our subsidiaries are subject to all of the
risks inherent in light of the expenses, difficulties, complications and delays
frequently encountered in connection with the formation of any new business. We
have incurred net losses since our inception and anticipate that we will
continue to incur losses for the foreseeable future. Through December 31, 2000,
we incurred cumulative net losses of $6,250,335. The delays, expenses, problems
and uncertainties frequently encountered by companies developing markets for new
products and technologies should be considered when evaluating us as a company.
We do not believe that revenues generated will be sufficient to entirely support
our operations in fiscal 2001 due to a number of factors including, among
others:

o     the cost of promoting and marketing our web-site and the Bingo.com bingo
      game;

o     the demand for our banner advertising and decrease in the advertising
      rates until we can establish our brand name and verify traffic on our
      web-site;

o     the start-up cost associated with developing our software and
      technologies, installing equipment and expanding our facilities; the
      increasing but yet nominal gaming revenues from the sale of advertising
      space until we can establish our brand name and verify traffic to our
      web-site;

o     the costs associated with hiring and maintaining in our employ,
      experienced management and staff for our operations.

Consequently, in the foreseeable future, we believe that such expenses will
increase our net losses, and we may never be profitable.

You should evaluate our business in light of the factors affecting and
challenges frequently encountered by early stage companies engaged in Internet
commerce. Such factors and challenges include:

o     our ability to generate revenues will depend on selling advertising on a
      web-site focused on Bingo entertainment, a newly developed business
      concept currently with only limited market acceptance;

o     as our business grows and the expectations of our customers increases, we
      must develop and upgrade our infrastructure, including internal controls,
      transaction processing capacity, data storage and retrieval systems and
      web-site to remain competitive;

o     we compete with a number of competitors with greater resources and
      experience than us;

o     as the markets for our on-line bingo games develop, our success will
      depend on our ability to successfully manage and change operations to meet
      the demands of our customers;


                                     - 12 -
<PAGE>

o     our businesses are dependent upon the Internet for commerce and growth;

o     general economic conditions could change and adversely affect our
      business;

o     we intend to rely upon strategic relationships to build market awareness
      and to bring visitors to our portal and players to the on-line bingo game;

o     our businesses are subject to regulatory risks, which may increase the
      cost of operating our businesses or prohibit us from conducting our
      business; and

o     we depend upon and need to hire key, qualified personnel and management to
      fully develop our businesses.

Because we have only begun operations in the past year, 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.

As of December 31, 2000, we had approximately $174,000 in cash and cash
equivalents. We believe that we will have sufficient funds to conduct our
operations into the first quarter of 2001. We cannot assure you that we will be
able to obtain adequate financing to support our operations for the duration of
2001.

If Our Key Personnel Leave Bingo.com, Our Ability to Succeed will be Adversely
Affected

The future success of the Company and its subsidiaries will depend on certain
key management, marketing, sales and technical personnel. We rely upon
consultants and advisors who are not employees. The loss of key personnel could
have an adverse effect on our operations. We do not maintain key-man life
insurance on any of our key personnel, and our subsidiaries do not insure their
key personnel. We plan to hire additional key employees in 2001. Competition for
qualified employees is intense, and an inability to attract, retain and motivate
additional, highly skilled personnel required for expansion of operations and
development of technologies could adversely affect our business, financial
condition and results of operations. Our ability to retain existing personnel
and attract new personnel may also be adversely affected by their individual
financial situations. We cannot assure you that our subsidiaries will be able to
retain their existing personnel or attract additional, qualified persons when
required and on acceptable terms.

We May be Required to Sell Additional Common Stock or Parties May Exercise
Options and Warrants that May Cause Dilution of the Value of the Outstanding
Shares

The number of shares of our outstanding common stock held by non-affiliates is
large relative to the trading volume of the common stock. Any substantial sale
of our common stock or even the possibility of such sales occurring may have an
adverse effect on the market price of the common stock.

As of December 31, 2000, we had outstanding warrants to purchase an aggregate of
416,668 shares of common stock. We have also reserved up to an additional
1,895,000 shares of common stock for issuance upon exercise of options under a
stock option plan. We have agreed to grant


                                     - 13 -
<PAGE>

options to acquire a total of 1,525,000 of our common shares to certain of our
officers, directors and consultants once we have approved and adopted our plan,
and we granted Shane Murphy, our President, options to acquire 1,100,000 shares
of our common stock. Holders of such warrants and options are likely to exercise
them when, in all likelihood, we could obtain additional capital on terms more
favourable than those provided by the options and warrants. Further, while our
warrants and options are outstanding, our ability to obtain additional financing
on favourable terms may be adversely affected.

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 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, we expect that many of our and our vendors' software systems may be
custom-developed and that we and our vendors may 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 adversely affect our business and results of operations.

Increased Security Risks of On-line Commerce May Deter Future Use of Our
Website, Which May Adversely Affect Our Ability to Generate Revenues

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
on-line services generally, and on-line 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


                                     - 14 -
<PAGE>

to circumvent our subsidiaries' or vendors' security measures could
misappropriate proprietary information, cause interruptions in their 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.

We Face the Risks 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

We anticipate that our services will 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.


                                     - 15 -
<PAGE>

We May Not be Able to Protect Our Internet Domain Name, Which Is Important to
Our Branding Strategy

We anticipate that the Internet domain name, "Bingo.com," will be an extremely
important part of our business and the business of our subsidiaries.
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 in the near future. 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.

If We Are Unable to Meet the Changing Needs of Our Industry, Our Ability to
Compete Will be Adversely Affected

To remain competitive, we must be capable of enhancing and improving the
functionality and features of their on-line services. The Internet portal, the
on-line 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
subsidiaries' existing services, technology and systems may become obsolete.

Our future success will depend on our subsidiaries' abilities to accomplish the
following:

o     license and develop leading technologies useful in our business;

o     develop and enhance our planned products and services;

o     develop new services and technologies that address the increasingly
      sophisticated and varied needs of prospective consumers; and

o     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. Our
subsidiaries may use new technologies ineffectively, or they may fail to adapt
their services, transaction-processing systems and network infrastructure to
user requirements or emerging industry standards. If our subsidiaries'
operations face material delays in introducing new services, products and
enhancements, their users may forego the use of their services and use those of
their competitors.


                                     - 16 -
<PAGE>

We Do Not Intend to Declare Dividends, Which May Affect the Value of Your Shares

We have never declared or paid any dividends on our capital stock. We currently
intend to retain any future earnings for funding growth and, therefore, do not
expect to pay any dividends in the foreseeable future.

Our Shares are Considered Penny Stocks and are Subject to the Penny Stock Rules,
Which May Adversely Affect the 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 "a 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. Our shares are expected to be deemed 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 your 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.

Risks Associated with the Bingo.com, Inc. Web-Site

The Results of Operations for the Bingo.com, Inc. Web-site Will Vary Depending
on a Number of Factors, Which May Adversely Affect Our Business

We anticipate the operating results of the Company's website will vary widely
depending on a number of factors, some that are beyond our control. These
factors are likely to include:

o     demand for our on-line 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;

o     prices paid by advertisers using the Bingo.com, Inc. service, which
      fluctuate with the changing market


                                     - 17 -
<PAGE>

o     costs of attracting consumers to our website, including costs of receiving
      exposure on third-party web-sites and advertising costs;

o     costs related to forming strategic relationships;

o     loss of strategic relationships;

o     our ability to significantly increase our distribution channels;

o     competition;

o     the amount and timing of operating costs and capital expenditures relating
      to expansion of our operations;

o     costs and delays in introducing new Bingo.com, Inc. services and
      improvements to existing services;

o     changes in the growth rate of Internet usage and acceptance by consumers
      of electronic commerce;

o     technical difficulties, system failures or Internet downtime;

o     government regulations related to our business and to the Internet;

o     our ability to upgrade and develop our information technology systems and
      infrastructure;

o     costs related to acquisitions of technologies or businesses; and

o     general economic conditions, as well as those specific to the Internet and
      related industries.

Because Bingo.com, Inc. has limited operating history, it is difficult to
accurately forecast the revenues that will be generated.

We plan to significantly increase our operating expenses to expand our marketing
and sales operations related to Bingo.com, Inc., expand customer support
capabilities and continue to fund the development of the Bingo.com, Inc.
web-site. We have based our current and future expense levels on the operating
plans and estimates of future revenue for Bingo.com, Inc. We anticipate that the
expenses related to Bingo.com, Inc. may increase. The revenue and operating
results for Bingo.com, Inc. are difficult to forecast. As a result, we may be
unable to adjust our spending in a timely manner to compensate for any
unexpected revenue shortfall. We also may be unable to increase our spending and
expand our operations in a timely manner to adequately meet user demand to the
extent it exceeds our expectations.

The Internet as a Medium for Commerce Is a Recent Phenomenon

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


                                     - 18 -
<PAGE>

anticipate, the number of registered users of our site would be lower than
expected and our business would be harmed.

If Bingo.Com, Inc.'s Web-Site is Unable to Achieve and Maintain a Critical Mass
of Registered Users, Advertisers and Consumers, Bingo.Com, Inc. May Be Unable to
Sell Advertising or to Generate Revenues

The success of our web-site may be 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. Advertising through priority placement on our search service in
particular will be introduced in the future, and we cannot predict the level of
its acceptance as an advertising medium. 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.

If We Are Unable to Develop On-line Marketing Partner and Relationships with a
Network of Affiliates, Our Web-Site May Never Achieve Market Acceptance or
Generate Any Significant Advertising Revenues

We anticipate that our web-site may depend on traffic from a limited number of
third-party web-sites. We anticipate we will obtain traffic from these sources
pursuant to short-term agreements. We currently have no assurance that they will
be successful in obtaining any of these agreements on commercially acceptable
terms.

We also believe that our future success in penetrating our target markets
depends in part on our ability to further develop and maintain relationships
with network affiliates. These network affiliates provide their users with the
Bingo.com links on their sites or direct their traffic to the Bingo.com
web-site. We believe these relationships are important in order to facilitate
broad market acceptance of our service and enhance Bingo.com, Inc.'s sales. Our
future ability to attract consumers to our Bingo site may be dependent upon the
growth of our network affiliates, which has not yet been established. 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 never be successfully launched.

Our Business May be Subject to Government Regulation and Legal Uncertainties
that May Increase the Costs of Operating Our Web-Site or Limit Our Ability to
Sell Advertising

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 Bingo.com, Inc. 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
Bingo.com, Inc. to incur significant


                                     - 19 -
<PAGE>

expenses in complying with any new regulations. The European Union has recently
adopted privacy and copyright directives that may impose additional burdens and
costs on international operations. In addition, several telecommunications
carriers, including America's Carriers' Telecommunications Association, are
seeking to have telecommunications over the Internet regulated by the Federal
Communications Commission, or FCC, in the same manner as other
telecommunications services.

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, local telephone carriers,
such as Pacific Bell, 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. Also, Congress recently
passed (and the President has signed into law) the Digital Millennium Copyright
Act, which is intended to reduce the liability of on-line service providers for
listing or linking to third-party web-sites that include materials that infringe
copyrights. Congress also recently passed (and the President has signed into
law) the Children's Online Protection Act and the Children's Online Privacy Act,
which will restrict the distribution of certain materials deemed harmful to
children and impose additional restrictions on the ability of on-line services
to collect user information from minors.

Further, Congress recently passed (and the President has signed into law) the
Protection of Children from Sexual Predators Act, which mandates that electronic
communication service providers report facts or circumstances from which a
violation of child pornography laws is apparent. Bingo.com, Inc. is currently
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
assurance 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 property
ownership, copyright, defamation, obscenity and personal privacy is uncertain.
Bingo.com, Inc. may be subject to claims that our services violate such laws.
Any new legislation or regulation in 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 Bingo.com, Inc. for violations of their laws. Bingo.com, Inc. 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.


                                     - 20 -
<PAGE>

Item 2. Properties.

The Company occupies, or has lease obligations as set forth below.

We subleased our previous executive offices located at 702-543 Granville Street,
Vancouver, British Columbia effective May 1, 2000. The monthly rent payments
under the lease are approximately $2,380 and the Company's proportionate share
of operating costs and property taxes approximate $2,100 per month, both in
Canadian currency. The lease expires on April 30, 2002. The sublease runs for
the remainder of the term. Payments required under the sublease are sufficient
to satisfy the remaining obligation.

We are renting our current executive offices at 4223 Glencoe Avenue, Suite C200,
Marina del Rey, California on a month-to-month basis. Base rent payments are
$6,341 per month. We expect to make this location, or a similar leased space,
the principal offices of the company. Other than described above, neither we nor
any of our subsidiaries presently own or lease any other property or real
estate.

The Company is in the business of developing and operating an entertainment and
service based website designed to provide a variety of free games and other
forms of entertainment as described in Item 1. Accordingly, the Company has no
particular policy regarding each of the following types of investments:

1.    Investments in real estate or interests in real estate;

2.    Investments in real estate mortgages; or

3.    Securities of or interests in persons primarily engaged in real estate
      activities.

Item 3. Legal Proceedings.

The Company is not currently a party to any legal proceeding, and was not a
party to any legal proceeding during the fiscal year ended December 31, 2000.
Management of the Company is currently not aware of any 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.

Item 4. Submission of Matters to a Vote of Security Holders.

No matters were submitted to shareholders during the fiscal quarter ended
December 31, 2000.

                                    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
National Association of Securities Dealers OTC Bulletin Board (the "OTCBB")
under the symbol PGLB.


                                     - 21 -
<PAGE>

In January 1999, we changed our name from Progressive General Lumber Corporation
to Bingo.com, Inc., and 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:

OTCBB

--------------------------------------------------------------------------------

2000                  High            Low               Volume
--------------------------------------------------------------------------------

Fourth Quarter        1.438           .219              1,957,200
--------------------------------------------------------------------------------

Third quarter         1.734           .531              1,842,100
--------------------------------------------------------------------------------

Second Quarter        1.750           .688              1,708,000
--------------------------------------------------------------------------------

First quarter         2.688           1.250             2,708,200
--------------------------------------------------------------------------------

1999                  High            Low               Volume
--------------------------------------------------------------------------------

Fourth Quarter        4.250           1.000             4,035,400
--------------------------------------------------------------------------------

Third quarter         6.563           2.250             518,900
--------------------------------------------------------------------------------

Second Quarter        13.625          3.250             12,434,200
--------------------------------------------------------------------------------

First quarter         8.750           1.875             6,404,500
--------------------------------------------------------------------------------

On March 30, 2001, the last reported sales price of our common stock, as
reported by the OTCBB was $.125. 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

The price for the Company's common stock on the OTCBB on December 29, 2000 was
$0.41 (High) and $0.30 (Low), and the close price was $.33. The price for the
Company's common stock on the OTCBB on May 7, 2001, was $0.160 (High) and $0.130
(Low), and the close price was $0.130.

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.

As of December 31, 2000, the Company had approximately 118 shareholders of
record (including nominees and brokers holding street accounts) of the Company's
shares of common stock.


                                     - 22 -
<PAGE>

Dividends

To date, the Company has not paid any dividends on its outstanding shares of
common stock and does not anticipate paying dividends in the near future. The
Company expects to retain its 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. All of the shares of the Company's common
stock are entitled to an equal share in any dividends declared and paid.

Item 6. Selected Financial Data.

The following table sets forth selected financial data regarding our
consolidated operating results and financial position. The data has been derived
from our consolidated financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States
("US GAAP"). See "Management's Discussion and Analysis of Financial Condition
and Results of Operation." The following selected financial data is qualified in
its entirety by, and should be read in conjunction with, the consolidated
financial statements and notes thereto included elsewhere in this document.

Bingo.com, Inc

<TABLE>
<CAPTION>
                                     2000          1999          1998        1997         1996
                                     ----          ----          ----        ----         ----
<S>                              <C>          <C>            <C>          <C>           <C>
Revenues                         $ 1,119,864  $        --    $      --    $     --      $     --
                                                                                --            --
General and administrative                                                      --            --
 Expenses                          1,979,662    1,581,959        1,904          --            --
Marketing and advertising            735,659      490,234           --          --            --
Software development and                                                        --            --
 royalties                                --      358,241           --          --            --
Interest income                       29,101      125,901          100          --            --
Income (loss) from continuing                                                   --            --
 operations                      (3,325,872)  (2,480,434)      (1,804)          --            --
Income (loss) from discontinued                                                 --            --
 operations                           45,899    (494,107)           --          --            --
Net (loss)                       (3,334,891)  (2,908,640)       (1,804)

Net loss per share                      0.33         0.31           --          --            --

Working capital (deficiency)       (428,256)    3,251,649      (1,804)          --            --

Total assets                       2,715,258    4,990,371      157,600          --            --

Total liabilities                  1,331,237      325,643      159,404          --            --

Shareholders' equity               1,384,021    4,664,728      (1,804)          --            --

Long-term obligations                377,136         9,494          --          --            --

Cash dividends                            --           --           --          --            --
</TABLE>


                                     - 23 -
<PAGE>

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 different from the
expectations expressed in this Annual Report.

RESULTS OF OPERATIONS

Year Ended December 31, 2000 Compared to the Year Ended December 31, 1999

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

Initially, our strategy was to develop an online gaming operation with an
initial focus on bingo. Due to adverse changes in North American gaming laws, in
August, 1999 our board, in the best interests of protecting our shareholders,
decided to prohibit gaming in jurisdictions with laws that prohibit online
gaming. From August, 1999 to December 31, 1999, we revised our business plan and
focused on the alternative of developing our prize based, play for free games
with an emphasis on entertainment. In December of 1999, we launched a beta
version of our first play for free game and our revamped website. In 2000, our
board announced the discontinuance of our Antigua based gaming operation and we
applied all of its resources to our revised business plan. In 1999, we had just
begun active business operations, but as we were still in the development stage,
no revenues were yet being generated. As a result, this should be kept in mind
when making any direct comparisons to the operating results of the year ended
December 31, 2000.

Total assets decreased to $2,715,258 as of December 31, 2000 compared to
$4,990,371 at the beginning of the fiscal year. The primary reason for this
decrease was the development of the operations and launching of the website
without any additional financings during the year. No funds were raised through
the issuance of common stock in 2000. In 2000, we invested $544,593 in office
and computer equipment, including software development equipment, compared to
$281,395 in 1999. Of the 2000 amount, $424,997 of capital equipment was
purchased through long term capital leases over terms of 24 to 60 months. We
also acquired the Bingo.com domain name during 1999 for $200,000 in cash and
500,000 shares of our common stock, which was valued at $2.00 per share. Our
cash position decreased by $3,206,528 and our working capital position decreased
to a deficit of $428,256 from $3,251,649.

Of the $3,325,872 of total expenses for continuing operations for the year ended
December 31, 2000, $1,979,662 was for general and administrative expenses
associated with the start up and refinement of our operations. 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


                                     - 24 -
<PAGE>

of expenses was $64,500 for stock based compensation costs for our executive and
corporate staff, and $246,268 for amortization of capital assets and the value
of the domain name.

Sales and marketing expenses were $735,659 for the year ended December 31, 2000
and were $490,234 for the year ended December 31,1999. We spent $44,558 in 2000
and $125,265 on initial awareness advertising and for banner advertising for our
gaming site. The balance of marketing and advertising expenses consists of
payroll and consultant's costs, travel and office costs.

We expect continued losses in the near future as we continue to build our
operations. A loss of $45,899 was recorded for discontinued operations in 2000,
whereas our loss for the twelve months ended December 31, 1999 from our
discontinued operation based in Antigua was $494,107.

We had a net loss of $3,334,891, or $.33 per share for the year ended December
31, 2000, compared to $2,908,640 or $.31 per share for the year ended December
31, 1999. 2000 included net interest income of $29,101 and 1999 included net
interest income of $125,901 earned on our surplus cash balances. We expect
similar losses in the foreseeable future as we continue to expand and develop
our website and the technologies related to new games.

Revenue generation and operating income are dependent upon the utilization of
significant cash resources for advertising and promotion, new games, and our
future successes at attracting prize sponsors and advertising customers.

Year Ended December 31, 1999 Compared to December 31, 1998

During the year ended December 31, 1998 we had no active business operations. As
a result, we had no material transactions or results of operations.

LIQUIDITY AND CAPITAL RESOURCES

We raised an aggregate of $6,066,374 in capital, net of share issuance costs,
through private placements during 1999 to finance our operations. We financed a
portion of our capital equipment purchases with $424,997 of capital lease
financing and repaid $160,489 under contractual terms. In the year ended
December 31, 2000 we generated revenue of $1,119,864 from our first year of
sales operations.

As at December 31, 2000, we had cash and cash equivalents of $174,463 versus
$3,382,529 at the beginning of the year. Our working capital position at
December 31, 2000 was a deficit of $3,428,256, compared to $3,251,649 December
31, 1999. In 2000, we used $2,655,050 for continuing operating activities and
$307,488 for investing activities, compared to 1999 uses of $2,726,750 and
$414,876, respectively.

In 2000 and 1999, our investing activities included $119,629 and $213,971,
respectively, for the purchase of office, computer and software development
equipment. We also invested $187,859 in 2000 and $200,905 in 1999 for our domain
name purchase.


                                     - 25 -
<PAGE>

Subsequent to December 31, 2000, we negotiated a debt financing for $1,250,000.
The initial installment was received in April of 2001, and the second
installment in May of 2001. We expect that the proceeds received from this
financing of $500,000 to date, in conjunction with the cash flow generated from
operations, will be sufficient to maintain and grow our operations as intended.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

We currently have instruments sensitive to market risk relating to exposure in
changing interest rates and market prices. We do not enter into financial
instruments for trading or speculative purposes and do not currently utilize
derivative financial instruments. Our operations are conducted primarily in the
United States and as such are not subject to material foreign currency exchange
rate risk.

The fair value of our investment portfolio or related income would not be
significantly impacted by either a 100 basis point increase or decrease in
interest rates due mainly to the short term nature of the majority of our
investment portfolio.

Item 8. Financial Statements and Supplementary Data.

Reference is made to the financial statements listed under the heading
"Financial Statements" of Item 14 herein, which financial statements are
incorporated herein by reference in response to this Item 8

Item 9. Changes in and Disagreements With Accountants on Accounting and
        Financial Disclosure.

On August 31, 1998, Barry L. Friedman, P.C. resigned as our independent
auditors. Our financial statements for the years ended December 31, 1997 and
1996 contain no adverse opinion or disclaimer of opinion and have not been
qualified or modified as to uncertainty, audit scope, or accounting opinion.
Barry L. Friedman, P.C. has not been associated with any of our financial
statements subsequent to August 31, 1998. The change in independent chartered
accountants was effective for fiscal 1998, was approved by our board of
directors and was not due to any disagreement between us and Barry L. Friedman,
P.C.

Effective July 24, 2000, and as reported in the Company's Current Report on Form
8-K dated July 24, 2000, the board of directors approved the appointment of
Grant Thornton LLP, Los Angeles, California, as our new independent accountants.
As of July 24, 2000, the existing accountants, Davidson & Company, had not
resigned, declined to stand for re-election or been dismissed. During our two
(2) most recent fiscal years 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 Grant Thornton LLP
regarding any of the matters or events set forth in Item 304(a)(2)(i) or (ii) of
Regulation S-K.

On August 17, 2000, we dismissed Davidson & Company as our principal
accountants. Following August 17, 2000, Davidson & Company will continue to work
with us on a project-by-project basis as the audit functions are transitioned to
Grant Thornton LLP. Davidson & Company were dismissed in connection with the
relocation of the Company's executive offices


                                     - 26 -
<PAGE>

to Los Angeles, California. Davidson & Company's sole offices are located in
Vancouver, British Columbia.

The report of Davidson & Company on our financial statements for either of the
years ended December 31, 1999 or December 31, 1998 did not contain an adverse
opinion or disclaimer of opinion and were not 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 dismissal of Davidson & Company was effective as of August 17, 2000, was
approved by our sole director, and was not due to any disagreement between us
and Davidson & Company. During the two fiscal years prior to and preceding the
dismissal of Davidson & Company, there were no disagreements with Davidson &
Company on any matter of accounting principles or practices, financial statement
disclosures or auditing scope or procedure, which disagreements if not resolved
to the satisfaction of Davidson & Company would have caused them to make
reference thereto in their report on our financial statements for the period.

We have authorized Davidson & Company to respond fully to any subject matter
with respect to our financial statements. We have not been advised by Davidson &
Company 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 our independent accountants' audit or
information that has come to their attention during the two 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 our independent accountants 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 & Company or any other reason, our independent accountants
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 our independent
accountants 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 our 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 & Company or any other reason, any issue has
not been resolved to such independent accountants satisfaction prior to the
dismissal of Davidson & Company.


                                     - 27 -
<PAGE>

                                    PART III

Item 10. Directors and Executive Officers of the Registrant.

The following table lists the Company's directors and executive officers during
fiscal year 2000:

------------------------------------------------- ------------------------------

Name                 Positions with the Company   Age    Office Held Since
------------------------------------------------- ------------------------------

Shane Murphy         Chairman of the Board,       40     July, 1999
                     Chief Executive Officer,
                     President, Treasurer and
                     Secretary
------------------------------------------------- ------------------------------

David Chalk          Director                     42     October, 2000
------------------------------------------------- ------------------------------

Steven Camps         Director                     41     October, 2000
------------------------------------------------- ------------------------------

James Beau Buck(1)   Senior Vice-President        45     April, 2000
------------------------------------------------- ------------------------------

(1)   Mr. Buck ceased to be an officer of the Company on April 2, 2001.

Executive officers are elected annually by the Board of Directors and serve at
the pleasure of the Board. There is no family relationship between any of the
officers and directors. Memberships on the Boards of other public companies are
set out 3 above in the biographies of each of the nominee directors, and
memberships on the Boards of other public companies for each of the executive
officers who are not directors are set out below.

Resumes

Shane Murphy - Chairman of the Board, Chief Executive Officer, President,
Treasurer and Secretary

Mr. Murphy, age 40, has served as the Chairman of the Board, Chief Executive
Officer, President, Treasurer and Secretary of the Company since July 1, 1999.
From June 1996 to June 1999, Mr. Murphy held the positions of Chief Executive
Officer and President at Canadian Capital Management, a private company engaged
in providing consulting services to the marketing industry. From 1986 to 1996,
Mr. Murphy served as Chief Executive Officer and President of Ad Team Canada, a
private marketing communications company that was liquidated in 1996.

David Chalk- Director

Mr. Chalk, age 42, has been a director of the Company since October, 2000. Mr.
Chalk is the Chairman of Chalk Network Inc., a media production company
controlled by Mr. Chalk,


                                     - 28 -
<PAGE>

involved in the production of video vignettes to companies, video content to
airlines and a 1/2 hour television program which provides information about
computers and technology. Prior to 1996, Mr. Chalk was a principal of Doppler
Computer Superstores, a computer retailer.

Steven Camps - Director

Mr. Camps, age 41, has been a director of the Company since October, 2000. Mr.
Camps is the President of Contractors' Source. He has held prior positions as
COO of Interplay Entertainment (1992 - 1998), CFO of CYP, Inc (1991 - 1992), and
CFO of Pratt Industries (USA) (1987 - 1991).

James Beau Buck - Senior Vice-President

Mr. Buck, age 45, served as the Senior Vice-President of the Company from April
2000 to April 2001. Prior to April 2000 Mr. Buck was an executive producer for
the Company since October, 1999. From 1995 to October 1999, Mr. Buck was an
independent internet consultant providing internet, web and technical
development services to many internet based companies including GeoCities.com
(now Yahoo), PriceGrabber.Com and Jexp.com.

Mr. Buck holds a Bachelor of Arts degree from the University of Minnesota.

Appointment of Directors

The Board of Directors is elected by the shareholders at the Annual Meeting of
shareholders, and 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. The company currently has 3 directors. All
directors review significant developments affecting the Company and act on
matters requiring Board approval. Although the Board of Directors may delegate
many matters to others, it reserves certain powers and functions to itself.

During the period covered by this report, none of the present or former
directors or executive officers of the Company is or was a party to any
arrangement or understanding with any other person pursuant to which he was
elected as a director or officer.

None of the officers or directors of the Company have been involved in the past
five years in any of the following: (1) bankruptcy proceedings; (2) subject to
criminal proceedings or convicted of a criminal act; (3) subject to any order,
judgment or decree entered by any court limiting in any way his or her
involvement in any type of business, securities or banking activities; or (4)
subject to any order for violation of federal or state securities laws or
commodities laws.

Board and Committee Meetings

Board Committees

The Board of Directors does not have any committees.


                                     - 29 -
<PAGE>

Board of Directors Meetings

The Company's Board of Directors did not meet in person during the last fiscal
year, but approved all actions required by unanimous consent.

Other Associations

During the past five years, the principals of the Company and its subsidiaries
have not previously served as principals of other reporting issuers.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) ("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 "Commission") 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 Commission regulation to furnish the
Company with copies of all Section 16(a) forms they file.

To the Company's knowledge, based solely on review of the copies of such reports
furnished to the Company and written representations that no other reports were
required during the year ended December 31, 2000, and except as disclosed
elsewhere in this document, the Company's officers, directors and greater than
ten percent beneficial owners complied with all Section 16(a) filing
requirements.

Item 11. Executive Compensation.

The directors of the Company did not receive compensation for services on the
Board of Directors for the fiscal year ended December 31, 2000. Members of the
Board of Directors are reimbursed for their expenses incurred in connection with
attendance at meetings of the Board of Directors in accordance with Company
policy. Directors who are employees of the Company do not receive separate
compensation for their services as a director.

Summary of Compensation

Set out below are particulars of compensation paid to the following persons (the
"Named Executive Officers"):

(a)   the person(s) serving as the Company's chief executive officer (the "CEO")
      during the last completed fiscal year;

(b)   each of the Company's most highly compensated executive officers, other
      than the CEO, who were serving as executive officers at the end of the
      last completed fiscal year; and

(c)   up to two additional individuals for whom disclosure would have been made
      under (b) but for the fact that the individual was not serving as an
      executive officer of the Company at the end of the last completed fiscal
      year.


                                     - 30 -
<PAGE>

As at December 31, 2000, the end of the last completed quarter of the Company,
the Company had two Named Executive Officers.

                           Summary Compensation Table

The following table sets forth the aggregate cash compensation paid for services
rendered to the Company during the last three fiscal years by the Company's
Chief Executive Officer and the Company's most highly compensated executive
officers who served as such at the end of the last fiscal year (the "Named
Executive Officers"). No executive officer had an annual salary and bonus in
excess of $100,000 during such year.

--------------------------------------------------------------------------------
                                                                Long-Term
                           Annual Compensation                  Compensation
                                                                Awards
--------------------------------------------------------------------------------

                                                                Securities
                                                 Other Annual   Underlying
                                                 Compensation   Options/SARs
Name and                                         ------------   ------------
Principal Position  Year   Salary                ($)            (#) (1)
                    ----   ($)        Bonus ($)  ---            ---
--------------------------------------------------------------------------------

Shane Murphy(2)     2000   $250,099   Nil        Nil            500,000
President, Chief
Executive Officer   1999   $125,000   Nil        Nil            600,000
--------------------------------------------------------------------------------

James Beau Buck(3)  2000   $139,384   Nil        Nil            Nil

                    1999   $8,307     Nil        Nil            400,000
--------------------------------------------------------------------------------

(1)   Represents options granted pursuant to the Company's Non-Qualified Stock
      Option Plan, adopted by the Directors of the Company effective September
      1, 1999.

(2)   Mr. Murphy commenced employment with the Company on July 1, 1999 and is
      employed through the Company's Canadian subsidiary. The dollar figures
      representing amounts paid to Mr. Murphy are denominated in Canadian
      dollars.

(3)   Mr. Buck commenced employment with the Company in October 1999, and ceased
      to be an officer of the Company on April 2, 2001.

There were no stock options exercised by the Named Executive Officers during the
last completed fiscal year.

--------------------------------------------------------------------------------

                                                             Value of Options at
                    Shares              Number of Options        Year End(1)
                   Acquired                at Year End          Exercisable /
                     on        Value       Exercisable /        Unexercisable
                   Exercise  Realized     Unexercisable
    Name
--------------------------------------------------------------------------------
Shane Murphy         Nil       Nil        820,831/279,169       $Nil(2)/Nil
--------------------------------------------------------------------------------
James Beau Buck      Nil       Nil          100,000 / 0         $Nil(2)/Nil
--------------------------------------------------------------------------------

(1) On December 29, 2000, the closing price of Common Stock on the OTC Bulletin
Board was $0.33. For purposes of the foregoing table, stock options with an
exercise price less than that amount are considered to be in-the-money and are
considered to have a value equal to the difference between this amount and the
exercise price of the stock option multiplied by the number of shares covered by
the stock option.


                                     - 31 -
<PAGE>

(2) These options were not in-the-money based on the December 29, 2000 closing
price of $0.33 for the Company's Common Stock.

Long-Term Incentive Plans - Awards in Last Fiscal Year

The Company has no long-term incentive plans in place and therefore there were
no awards made under any long-term incentive plan to the Named Executive
Officers during the Company's most recently completed fiscal year. A "Long-Term
Incentive Plan" is a plan under which awards are made based on performance over
a period longer than one fiscal year, other than a plan for options, SARs (stock
appreciation rights) or restricted share compensation.

No amounts have been set aside or accrued by the Company during fiscal 2000 to
provide pension retirements or similar benefits for directors or executive
officers of the Company pursuant to any plan provided for or contributed to by
the Company.

The Company and Mr. Murphy entered into a three-year employment agreement
commencing July 1, 1999, which is subject to an additional renewal for a one
year -year period at the end of each term unless terminated by either party with
at least three months' prior written notice. The employment agreement includes a
covenant not to compete for a term of one year after termination of the
officer's employment. The agreement provides that in the event that Mr. Murphy's
employment is terminated by the Company without "cause" (as defined in the
agreement), he would be entitled to a severance payment in an amount equal to
six months' base salary. The agreement further provides that in the event that
Mr. Murphy's employment is terminated by Mr. Murphy as a result of a "change of
control" (as defined in the agreement), he would be entitled to a severance
payment in an amount equal to two times annual salary in effect at that time.

Under the terms of the agreement, the Company granted Mr. Murphy options to
acquire 600,000 shares of common stock at $4.75 per share vesting as to 300,000
shares pro rata monthly over 2 years and as to 300,000 based on the market price
of the Company's common stock. The options were repriced on November 17, 1999 to
an exercise price of $1.31 per share and the vesting was amended so that 100,000
shares were immediately vested and 25,000 shares vested on the first day of each
month beginning on December 1, 1999. During the year ended December 31, 2000,
the Company repriced the options granted to Mr. Murphy from $1.31 to $0.75.
During the year ended December 31, 2000, the Company issued an additional
500,000 options to Mr. Murphy under the 1999 plan. These are options to purchase
common stock in the Company at $0.44 per share.

Subsequent to December 31, 2000, and as reported by the Company on their Current
Report on Form 8-K as filed with the Commission on May 3, 2001, the Company
entered into a definitive financing arrangement with Redruth Ventures Inc. a
British Virgin Islands corporation ("RRV") and Bingo, Inc an Anguillia
corporation ("BI") (collectively the "Holders"). In consideration of the
financing arrangement with RRV and BI, the Company amended the employment
agreement with Mr. Murphy. The revised employment agreement provides for an
indefinite term, and provides for the issuance of shares in the Common Stock of
the Company to Mr. Murphy on the closing of the aforementioned financing
arrangement. The shares issuable to Mr. Murphy will be subject to an escrow
agreement and have not yet been issued.


                                     - 32 -
<PAGE>

Item 12. Security Ownership of Certain Beneficial Owners and Management.

         Security Ownership of Certain Beneficial Owners and Management

The following table sets forth, as of December 31, 2000, the outstanding Common
Stock of the Company owned of record or beneficially by each Named Executive
Officer and Director, and by each person who owned of record, or was known by
the Company to own beneficially, more than 5% of the Company's Common Stock and
the shareholdings of all Directors and Executive Officers as a group. A person
is deemed to be the beneficial owner of securities that can be acquired by such
person within 60 days from such date upon the exercise of options. Each
beneficial owner's percentage ownership is determined by assuming that options
that are held by such person and which are exercisable within 60 days from the
date are exercised. As of December 31, 2000, there were 10,088,608 shares of the
Company's Common Stock issued and outstanding.

--------------------------------------------------------------------------------

Name                                               Shares Owned  Percentage of
                                                                  Shares Owned
--------------------------------------------------------------------------------
Shane Murphy (1)(2), President and member of the
Board of Directors                                  1,075,000        9.63%
--------------------------------------------------------------------------------
James Beau Buck (1)(3), Senior Vice President        350,000         3.35%
--------------------------------------------------------------------------------
David Chalk (1)(4), Member of the Board of
Directors                                             5,000          0.05%
--------------------------------------------------------------------------------
Steven C. Camps (1)(5), Member of the Board of
Directors                                             5,000          0.05%
--------------------------------------------------------------------------------
Michael Townsend (6)                                 765,000         7.58%
--------------------------------------------------------------------------------
ALL OFFICERS & DIRECTORS AS A GROUP (7)
(Five Individuals)                                  1,435,000        12.45%
--------------------------------------------------------------------------------

Except as noted below, all shares are held beneficially and of record and each
record shareholder has sole voting and investment power.

(1) These individuals are the Executive Officers and Directors of the Company
and may be deemed to be "parents or founders" of the Company as that term is
defined in the Rules and Regulations promulgated under the 1933 Act.

(2) Includes 1,075,000 options with exercise prices ranging from $0.44 to $0.75
per share (which options are exercisable presently or within 60 days).

(3) Includes 350,000 options with an exercise prices ranging from $0.75 to $3.00
per share (which options are exercisable presently or within 60 days).

(4) Includes 5,000 options with an exercise price of $0.65 per share (which
options are exercisable presently or within 60 days).

(5) Includes 5,000 options with an exercise price of $0.65 per share (which
options are exercisable presently or within 60 days).

(6) Mr. Townsend is a private investor. The information contained herein with
respect to his holdings is derived from information received from the Company's
Transfer Agent.

(7) Includes 1,435,000 options that are exercisable presently or within 60 days.


                                     - 33 -
<PAGE>

Item 13. Certain Relationships and Related Transactions.

In 1999, the Company provided an interest-free loan to the Company's Sole
Officer and Director of $70,000 Canadian dollars ($48,212 US dollars), repayable
over 12 months. As of December 31, 1999, $49,583 Canadian dollars ($34,336 US
dollars) remained outstanding, in addition to $5,286 Canadian dollars ($3,640 US
dollars) of other unsecured advances. The amounts were repaid during 2000.

In 2000, the Company provided another interest-free loan to the Company's Sole
Officer and Director of $56,484 Canadian dollars ($37,686 US dollars), repayable
over 12 months. As of December 31, 2000, $47,070 Canadian dollars ($31,405 US
dollars) remained outstanding. The amount is included in the Company's accounts
receivable.

                                    PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

(a)   (1)       Financial statements

            Report of Independent Auditor, Grant Thornton LLP, dated May 3,
            2001.

            Report of Independent Auditor, Davidson & Company, dated February
            25, 2000.

            Balance sheet as of December 31, 2000 and December 31, 1999.

            Statement of Operation for the years ended December 31, 2000,
            December 31, 1999, and December 31, 1998.

            Statement of Stockholders' Equity for the years ended December 31,
            2000, and December 31, 1999.

            Statement of Cash Flows for the years ended December 31, 2000,
            December 31, 1999, and December 31, 1998.

            Notes to Financial Statements

      (2)   Financial Statement Schedules

            Financial statement schedules have been omitted because they are
            inapplicable or the required information is shown in the
            Consolidated Financial Statements or Notes thereto.

(b)   Reports on Form 8-K

            On December 18, 2000, we filed a Form 8-K with the Securities and
            Exchange Commission to report that the Company had entered into a
            letter of intent with the Lottery Channel Inc. ("LCI") proposing the
            acquisition by the Company of LCI.


                                     - 34 -
<PAGE>

            On April 6, 2001, we filed a Form 8-K with the Securities and
            Exchange Commission to report that the proposed acquisition of LCI
            and the discussions related thereto had terminated.

(c)   Exhibits

Exhibit Number    Description

3.1*        Articles of Incorporation of Progressive Lumber Corp. effective
            January 12, 1987.

3.2*        Articles of Amendment to Progressive Lumber Corp. filed on July 17,
            1998.

3.3*        Articles of Amendment to Progressive Lumber Corp. effective January
            22, 1999.

3.4*        Bylaws of Bingo.com, Inc.

10.1*       Form of Stock Subscription Agreement dated December 1998.

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

10.3*       Escrow Agreement by and among Bingo.com, Inc., Bingo, Inc. and
            Clark, Wilson dated January 27, 1999.

10.4*       Registrant Name Change Agreement by and among Network Solutions,
            Bingo, Inc. and Bingo.com, Inc. dated January 1999.

10.5**      Lease Agreement by and between Harwood Corporation and Bingo.com
            (Canada) Enterprises Inc. & 559262 B.C. Ltd. commencing February 1,
            1999.

10.6*       Development Agreement by and between Stratford Internet Technologies
            Inc. and Bingo.com, Inc. dated February 17, 1999.

10.7*       Private Placement Subscription Agreement by and between Bingo.com,
            Inc and Dotcom Fund, S.A. dated February 11, 1999.

10.8*       Share Purchase Warrant issued to Dotcom Fund, S.A. dated February
            12, 1999.

10.9**      Application and Agreement for Merchant Services by and between State
            Communications Ltd. and Global Payment Services dated April 21,
            1999.

10.10*      Subscription Agreement by and between Bingo.com, Inc and Goldberg
            Equity Fund dated April 23, 1999.

10.11*      Share Purchase Warrant issued to Goldberg Equity Fund dated April
            23, 1999.

10.12*      Declaration of Trust made by Douglas Albert Lorne McLeod dated May
            1999.


                                     - 35 -
<PAGE>

10.13**     Employment Agreement by and between Bingo.com, Inc. and Shane Murphy
            dated June 17, 1999, effective July 1, 1999.

10.14**     Agent Agreement by and between Bingo.com, Inc. and Access World,
            Inc. dated April 6, 1999,

21.1**      List of Subsidiaries of Registrant

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

**Previously filed with the Registrant's amended registration statement on Form
10 on August 31, 1999.


                                     - 36 -
<PAGE>

                                   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 its
behalf by the undersigned, thereunto duly authorized.

BINGO.COM, INC.
-------------------------------------------
(Registrant)


By: /s/ "Shane Murphy"
    ---------------------------------------
        Shane Murphy
        Chairman of the Board, Chief Executive Officer, President, Treasurer and
        Secretary

Date: May 18, 2001
     ---------------

In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.


By: /s/ "Shane Murphy"
    ---------------------------------------
        Shane Murphy
        Chairman of the Board, Chief Executive Officer, President, Treasurer and
        Secretary
        (Principal executive, financial and accounting officer)

Date: May 18, 2001
     ---------------


                                     - 37 -
<PAGE>

   Financial Statements and Report of
Independent Certified Public Accountants

            BINGO.COM, INC

        December 31, 2000 and 1999
<PAGE>

                                C O N T E N T S

                                                                            Page
                                                                            ----

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS                            3

FINANCIAL STATEMENTS

       CONSOLIDATED BALANCE SHEETS                                            4

       CONSOLIDATED STATEMENTS OF OPERATIONS                                  5

       CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY                         6

       CONSOLIDATED STATEMENTS OF CASH FLOWS                                  7

       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                             8
<PAGE>

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors
Bingo.com, Inc.

We have audited the accompanying consolidated balance sheet of Bingo.com, Inc.
as of December 31, 2000, and the related consolidated statements of operations,
stockholders' equity and cash flows for the year then ended. These consolidated
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.

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 consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Bingo.com, Inc. as of December 31, 2000, and the consolidated results of its
operations and its consolidated cash flows for the year then ended in conformity
with accounting principles generally accepted 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 2, the Company
has continued to incur operating losses, has used, rather than provided, cash
from operations and has an accumulated deficit of $6,250,335. Continued losses
are projected for at least the next 8 months. 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 2. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

Los Angeles, California
May 3, 2001

<PAGE>

                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
Bingo.com, Inc

We have audited the balance sheet of Bingo.com, Inc. as at December 31, 1999 and
the statements of operations, stockholders equity and cash flows for the years
ended December 31, 1999 and 1998. 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 audits.

We conducted our audits in accordance with generally accepted auditing standards
in the United States of America. Those standards require that we plan and
perform an 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 audits provides a
reasonable basis for our opinion.

In our opinion, these financial statements present fairly, in all material
respects, the financial position of the Company as at December 31, 1999 and the
results of its operations and its cash flows for the years ended December 31,
1999 and 1998 in accordance with generally accepted accounting principles in the
United States of America.

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 2 to the financial
statements, the Company has no established source of revenue. This raises
substantial doubt about its ability to continue as a going concern. Management's
plan in regard to these matters are also described in Note 2. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

                                                            "Davidson & Company"
Vancouver, Canada Chartered Accountants                    Chartered Accountants

February 25, 2000
<PAGE>

                                Bingo.com, Inc.

                          CONSOLIDATED BALANCE SHEETS

                                  December 31,

<TABLE>
<CAPTION>
                                                                             2000               1999
                                                                       -------------         ------------
                                     ASSETS

<S>                                                                    <C>                   <C>
Current assets
   Cash and cash equivalents                                           $     174,463         $ 3,382,529
   Accounts receivable, net of allowance for doubtful accounts
      of $36,949 and nil in 2000 and 1999, respectively                      268,849              67,903
   Note receivable from officer                                               31,405              34,336
   Prepaid expenses                                                           51,128              83,030
                                                                       -------------         -----------
   Total current assets                                                      525,845           3,567,798
                                                                       -------------         -----------

Equipment
   Office and computer equipment                                             453,921             123,506
   Software development and website equipment                                318,308             157,889
   Less: accumulated depreciation                                           (265,332)            (59,727)
                                                                       -------------         -----------
                                                                             506,897             221,668
                                                                       -------------         -----------

Other assets                                                                  37,286                  --
Domain name rights, net                                                    1,645,230           1,200,905
                                                                       -------------         -----------
   Total assets                                                        $   2,715,258         $ 4,990,371
                                                                       =============         ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
   Accounts payable and accrued liabilities                            $     517,081         $   187,914
   Loan payable                                                                   --              53,912
   Reserve for discontinued operations                                            --              60,000
   Contract payable - current portion (Note 4)                               270,165                  --
   Capital leases - current portion                                          166,855              14,323
                                                                       -------------         -----------
   Total current liabilities                                                 954,101             316,149
                                                                       -------------         -----------

Contract payable, net of current portion (Note 4)                            276,476                  --
Capital leases, net of current portion                                       100,660               9,494
                                                                       -------------         -----------
                                                                           1,331,237             325,643
Commitments and contingencies                                                     --                  --

Stockholders' equity
   Common stock - $0.001 par value; authorized 50,000,000
      shares; issued and outstanding: 10,104,608 shares at
      December 31, 2000 and 9,916,668 at December 31, 1999                    10,105               9,917
   Additional paid-in-capital                                              7,629,900           7,574,366
   Accumulated deficit                                                    (6,250,335)         (2,915,444)
   Accumulated other comprehensive loss                                       (5,649)             (4,111)
                                                                       -------------         -----------
                                                                           1,384,021           4,664,728
                                                                       -------------         -----------
   Total liabilities and stockholders' equity                          $   2,715,258         $ 4,990,371
                                                                       =============         ===========
</TABLE>

        The accompanying notes are an integral part of these statements.


                                       4
<PAGE>

                                Bingo.com, Inc.

                     CONSOLIDATED STATEMENTS OF OPERATIONS

                  Years ended December 31, 2000, 1999 and 1998

<TABLE>
<CAPTION>
                                                     2000              1999            1998
                                                -------------     -------------   -------------

<S>                                             <C>               <C>             <C>
Revenues                                        $   1,119,864     $          --   $          --

Cost of revenues                                    1,419,647                --              --
                                                -------------     -------------   -------------

Gross profit                                         (299,783)               --              --

Operating Expenses
   Sales and marketing                                735,659           490,234              --
   General and administrative                       1,979,662         1,345,613           1,904
   Software and website development                        --           358,241              --
   Stock issued for services                           64,500           286,346              --
   Depreciation and amortization                      246,268                --              --
                                                -------------     -------------   -------------
      Total operating expenses                      3,026,089         2,480,434           1,904
                                                -------------     -------------   -------------

      Loss from continuing operations              (3,325,872)       (2,480,434)         (1,904)

Other income
   Net interest income                                 29,101           125,901             100
   Other                                                7,779                --              --
                                                -------------     -------------   -------------

      Loss before discontinued operations          (3,288,992)       (2,354,533)         (1,804)

Loss from discontinued operations, net of tax         (45,899)         (494,107)             --

Loss on disposition of discontinued
   operations                                             --            (60,000)             --
                                                -------------     -------------   -------------

      Net loss                                  $  (3,334,891)    $  (2,908,640)  $      (1,804)
                                                =============     =============   =============

Loss from continuing operations                 $       (0.33)    $       (0.25)  $          --

Loss from discontinued operations                          --             (0.05)             --

Loss on disposal of discontinued operations                --             (0.01)             --
                                                -------------     -------------   -------------

Basic and diluted loss per share                $       (0.33)    $       (0.31)  $       (0.01)
                                                =============     =============   =============

Weighted average basic and diluted shares          10,065,054         9,278,084       1,000,000
                                                =============     =============   =============
</TABLE>

        The accompanying notes are an integral part of these statements.


                                       5
<PAGE>

                                Bingo.com, Inc.

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                     Years ended December 31, 2000 and 1999

<TABLE>
<CAPTION>
                                             Common Stock       Additional    Cumulative                     Shares
                                      -----------------------     Paid in     Translation  Accumulated     Allocated
                                         Shares       Amount      Capital     Adjustment     Deficit       For Issue       Total
                                      -----------   ---------   -----------   ----------   ------------    ---------   ------------

<S>              <C>                   <C>           <C>        <C>           <C>          <C>            <C>          <C>
Balance, January 1, 1998               1,000,000     $  1,000   $     4,000   $       --   $    (5,000)         --     $        --

   Net loss                                                                                     (1,804)                     (1,804)
                                      ----------    ---------   -----------   ----------   -----------     -------     -----------
Balance, December 31, 1998             1,000,000        1,000         4,000           --        (6,804)         --          (1,804)

   Sale of common stock for cash       8,416,668        8,417     6,057,957           --            --          --       6,066,374

   Acquisition of domain name rights     500,000          500       999,500           --            --          --       1,000,000

   Stock based compensation costs             --           --       286,346           --            --          --         286,346

   Shares allotted for issue                  --           --            --           --            --     226,563         226,563

   Net loss for the year                      --           --            --           --    (2,908,640)         --      (2,908,640)

   Accumulative comprehensive other
   income (loss)                              --           --            --       (4,111)           --          --          (4,111)
                                      ----------    ---------   -----------   ----------   -----------    --------     -----------
Balance, December 31, 1999             9,916,668        9,917     7,347,803       (4,111)   (2,915,444)    226,563       4,664,728

   Common Stock Issued for Services      189,000          189       290,874           --            --    (226,563)         64,500

   Repurchase of Common Stock             (1,060)          (1)       (8,777)          --            --          --          (8,778)

   Loss for the period                        --           --            --                 (3,334,891)         --      (3,334,891)

   Accumulative comprehensive other
       income (loss)                          --           --            --       (1,538)           --          --          (1,538)
                                      ----------    ---------   -----------   ----------   -----------    --------     -----------
Balance, December 31, 2000            10,104,608     $ 10,105   $ 7,629,900   $   (5,649)  $(6,250,335)   $     --     $ 1,384,021
                                      ==========    =========   ===========   ==========   ===========    ========     ===========
</TABLE>

         The accompanying notes are an integral part of this statement.


                                       6
<PAGE>

                                Bingo.com, Inc.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                            Years ended December 31,

<TABLE>
<CAPTION>
                                                                   2000               1999           1998
                                                              ------------       -------------   ------------
<S>                                                           <C>                <C>             <C>
Cash flows from operating activities:
   Net loss                                                   $ (3,334,891)      $ (2,908,640)   $    (1,804)
   Adjustments to reconcile net loss to net cash
     used in operating activities
        Loss from discontinued operations                           45,899            554,107            --
        Disposal of property and equipment                             154                 --            --
        Depreciation and amortization                              536,419             59,727            --
        Provision for doubtful accounts                             36,949                 --            --
        Stock based compensation costs                              64,500            286,346            --
   Change in operating assets and liabilities:
        Accounts receivable                                       (234,964)          (102,239)           --
        Prepaid expenses and security deposits                      (5,384)           (83,030)           --
        Accounts payable and accrued liabilities                   236,268           (533,021)       159,404
                                                              ------------       ------------    -----------
   Cash (used in) provided by operating activities              (2,655,050)        (2,726,750)       157,600

Cash flows from investing activities:
   Acquisition of property and equipment                          (119,629)          (213,971)            --
   Payments on domain name contract payable                       (187,859)          (200,905)            --
                                                              ------------       ------------    -----------
   Cash used in investing activities                              (307,488)          (414,876)            --
                                                              ------------       ------------    -----------

Cash flows from financing activities:
   Capital lease repayments                                       (181,300)            23,817             --
   Proceeds from note payable                                           --             53,912
   Repayment of loan payable                                       (53,912)                --             --
   Proceeds from issuance of common stock, net                          --          6,066,374             --
   Repurchase of common stock                                       (8,778)                --             --
   Shares allocated for issue                                           --            226,563             --
                                                              ------------       ------------    -----------
   Cash (used in) provided by financing activities                (243,990)         6,370,666             --
                                                              ------------       ------------    -----------

Net (decrease) increase in cash and cash equivalents            (3,206,528)         3,229,040        157,600

Effect of exchange rates on cash and cash equivalents               (1,538)            (4,111)            --

Cash and cash equivalents at beginning of period                 3,382,529            157,600             --
                                                              ------------       ------------    -----------
Cash and cash equivalents at end of period                    $    174,463       $  3,382,529    $   157,600
                                                              ============       ============    ===========

Supplemental disclosure of cash flow information:
   Cash paid for interest                                     $     47,563       $     12,630    $        --
                                                              ============       ============    ===========
Non Cash Transactions
   Fixed assets acquired through capital lease                $    424,998       $         --    $        --
                                                              ============       ============    ===========
   Issuance of common stock for domain name rights            $         --       $  1,000,000    $        --
                                                              ============       ============    ===========
   Issuance of common stock for services rendered             $    226,563       $         --    $        --
                                                              ============       ============    ===========
   Acquisition of domain name                                 $    734,500       $         --    $        --
                                                              ============       ============    ===========

</TABLE>

        The accompanying notes are an integral part of these statements.


                                       7
<PAGE>

BINGO.COM, INC.
(formerly Progressive General Lumber Corp.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
================================================================================

1.    HISTORY AND ORGANIZATION OF THE COMPANY

      The Company was organized 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 provides online,
      play-for-free, bingo entertainment via the Internet and operates in one
      industry segment.

      On July 17, 1998, the State of Florida approved the Company's restated
      Articles of Incorporation, which increased its authorized shares from
      7,500 common shares to 50,000,000 common shares. The par value was changed
      from $1.00 to $0.001. In addition, the Company forward split its common
      stock 200:1, thus increasing the number of outstanding common shares from
      5,000 shares to 1,000,000 shares. All common share and per share data have
      been retroactively adjusted to reflect the stock split.

2.    GOING CONCERN

      The accompanying consolidated financial statements have been prepared in
      conformity with accounting principles generally accepted in the United
      States of America, which contemplate continuation of the Company as a
      going concern. However, as shown in the accompanying financial statements,
      the Company has sustained substantial losses from operations since
      inception. In addition, the Company has used, rather than provided, cash
      in its operations. As of May 1, 2001, 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 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 of the Company has taken steps to revise and reduce its
      operating requirements, which it believes will be sufficient to assure
      continued operations and implementation of the Company's plans. These
      steps include expense reductions in the areas of staffing, marketing and
      consulting. The Company is also in the process of attempting to secure
      additional capital through debt and equity transactions, which will be
      required in order to continue operations.

3.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      PRINCIPLES OF CONSOLIDATION

      These consolidated financial statements include the accounts of the
      Company and the accounts of its wholly owned subsidiaries, Bingo.com
      (Canada) Inc., Bingo.com (Antigua) Inc. and Bingo.com (Wyoming) Inc.
      (collectively, "the Company"). All inter-company balances and transactions
      have been eliminated in consolidation.

      BASIS OF PRESENTATION

      In the previous year, the financial statements reported the Company as a
      development stage enterprise. In the current year, the Company has begun
      generating revenues related to their primary business and is no longer
      presented as a Company in the development stage.

      REVENUE RECOGNITION

      The Company has contracted with a sales agency to sell advertising on its
      website directly to corporate customers or through advertising agencies.
      The Company pays an advertising commission to the sales agency for placing
      advertisements on its web site. Advertising revenues are recognized as the
      advertising campaign or impressions and clicks are made on the website.
      Advertisements are billed on a monthly basis with terms of net 15 days.
      Accounts receivable are recorded net of advertising commissions.


                                       8
<PAGE>

BINGO.COM, INC.
(formerly Progressive General Lumber Corp.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - Continued
DECEMBER 31, 2000 AND 1999
================================================================================

      REVENUE RECOGNITION - Continued

      The Company bartered portions of the unsold advertising impressions
      generated by its web sites, 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
      approximated $334,000 and nil for the years ended December 31, 2000 and
      1999, respectively.

      The Company enters into co-branding contracts with its corporate
      customers. The contracts provide the customer with the ability to allow
      its registrants or visitors the opportunity to play Bingo for free on the
      customer's website. A monthly fee is charged per the contract and set-up
      fees are recognized as revenue when the set-up process has been completed.

      USE OF ESTIMATES AND ASSUMPTIONS

      The preparation of the Company's financial statements in conformity with
      accounting principles generally accepted in the United States of America
      requires management to make estimates and assumptions that affect the
      reported amount of assets and liabilities, disclosure of contingent assets
      and liabilities at the date of the financial statements and the reported
      amount of revenues and expenses during the year. Accordingly, actual
      results could differ from those estimates.

      CASH AND CASH EQUIVALENTS

      Cash and cash equivalents include highly liquid investments with original
      maturities of three months or less.

      SOFTWARE DEVELOPMENT

      The Company has adopted Statement of Position 98-1 ("SOP 98-1")
      "Accounting for the Costs of Computer Software Developed or Obtained for
      Internal Use", as its accounting policy for internally developed computer
      software costs. 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.

      DOMAIN NAME

      The Company has capitalized the cost of the purchase of the domain name
      Bingo.com and is amortizing the cost over five years from the date of
      commencement of operations.

      CAPITAL ASSETS

      Capital assets are recorded at cost less accumulated depreciation and
      amortization. Depreciation and amortization are provided for annually
      using accelerated methods over useful lives of three to five years.
      Carrying values are reviewed periodically for impairment whenever events
      or changes in circumstances indicate the carrying amount of assets may not
      be recoverable.

      ADVERTISING COSTS

      The Company expenses the cost of communicating advertising in the period
      in which the advertising space or airtime is used. Advertising expenses
      for the years ended December 31, 2000, 1999 and 1998 were $44,558,
      $125,265 and nil, respectively.

      GAMING LICENSE

      The Company's gaming license represents an annual cost of securing and
      maintaining a license to operate online internet bingo in the Country of
      Antigua. The annual costs of the license of $100,000 were expensed as part
      of the loss from discontinued operations in 1999 as the Company is no
      longer operating the online internet bingo game in Antigua.


                                       9
<PAGE>

BINGO.COM, INC.
(formerly Progressive General Lumber Corp.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - Continued
DECEMBER 31, 2000 AND 1999
================================================================================

      FOREIGN CURRENCY TRANSLATION

      The consolidated financial statements are presented in United States
      dollars. The Company accounts for foreign currency transactions and
      translation of foreign currency financial statements under Statement of
      Financial Accounting Standards No. 52, "Foreign Currency Translation"
      ("SFAS 52"). Transaction amounts denominated in foreign currencies are
      translated at exchange rates prevailing at transactions 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.

      Financial statements of the Company's Canadian subsidiary, Bingo.com
      (Canada) Inc. are translated into US dollars using the exchange rate at
      the balance sheet date for assets and liabilities. The functional currency
      of Bingo.com (Canada) Inc. is the local currency, the Canadian dollar.
      Translation adjustments, if necessary, are recorded as a separate
      component of Stockholders' Equity and included in other comprehensive
      loss.

      STOCK-BASED COMPENSATION

      Statement of Financial Accounting Standards No. 123, "Accounting for
      Stock-Based Compensation," encourages, but does not require, companies to
      record compensation cost for stock-based employee compensation plans at
      fair value. The Company has chosen to account for stock-based compensation
      using Accounting Principles Board Opinion No. 25, "Accounting for Stock
      Issued to Employees." Accordingly compensation cost for stock options is
      measured as the excess, if any, of the quoted market price of the
      Company's stock at the date of the grant over the amount an employee is
      required to pay for the stock.

      INCOME TAXES

      The Company accounts for income taxes under an asset and liability
      approach that requires the recognition of deferred tax assets and
      liabilities for expected future tax consequences of events that have been
      recognized in the Company's financial statements or tax returns. In
      estimating future tax consequences, the Company generally considers all
      expected future events other than enactments of changes in the tax laws or
      rates.

      NET LOSS PER COMMON SHARE

      Basic loss per share includes no dilution and is computed by dividing the
      net loss by the weighted average number of commons shares outstanding, for
      the period. Diluted loss per share reflects the potential dilution of
      securities that could share in the earnings of the Company. Convertible
      securities and stock options and warrants are not included in the
      calculation of weighted average number of shares because the effect would
      be anti-dilutive.


                                       10
<PAGE>

BINGO.COM, INC.
(formerly Progressive General Lumber Corp.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - Continued
DECEMBER 31, 2000 AND 1999
================================================================================

      WEBSITE DEVELOPMENT COSTS

      In March 2000, EITF 00-2 "Accounting for Web Site Development Costs" was
      released. EITF 00-2 provides guidance on how an entity should account for
      costs involved in such areas as planning, developing software to operate
      the web site, graphics, content, and operating expenses. EITF 00-2 is
      effective for web site development costs incurred for fiscal quarters
      beginning after June 30, 2000. The Company adopted EITF 00-2 and
      development costs incurred subsequent to June 30, 2000, associated with
      the Company's Web Site were recorded in accordance with EITF 00-2. All
      website development costs for periods subsequent to June 30, 2000 were
      expensed as operating costs. Development costs of approximately $158,000
      were capitalized for the period ending December 31, 1999 and are being
      amortized on an accelerated depreciation method over a period of three
      years. No website development costs were capitalized for the period ending
      December 31, 2000.

      IMPAIRMENT OF LONG LIVED ASSETS

      The Company evaluates its long-lived assets by measuring the carrying
      amount of the assets against the estimated undiscounted future cash flows
      associated with them. If such evaluations indicate that the future
      undiscounted cash flows of certain long-lived assets are not sufficient to
      recover the carrying value of such assets, the assets are adjusted to
      their fair values.

      COMPREHENSIVE INCOME

      The Company has adopted Statement of Financial Accounting Standards No.
      130 ("SFAS 130"), "Reporting Comprehensive Income". This statement
      establishes rules for the reporting of comprehensive income and its
      components. The Company's comprehensive income (loss) consists of net
      earnings (loss) for the current period and the net change in foreign
      currency translation.

      RECLASSIFICATIONS

      Certain amounts in the prior period financial statements have been
      reclassified to conform with the 2000 presentation.

4.    DOMAIN NAME RIGHTS AND CONTRACT PAYABLE

      The rights to use the domain name Bingo.com were acquired in January of
      1999 for $200,000 cash and 500,000 common shares at a deemed price of
      $2.00 per share.

      In addition, the Company is required to make quarterly payments with a
      minimum guarantee of $1,100,000 for the purchase of the domain name.
      Commencing July 1, 1999, a payment of $50,000 was due 60 days after the
      end of each business quarter, for four consecutive quarters. On July 1,
      2000, four more consecutive payments of $75,000 were due 60 days after the
      end of each business quarter. On July 1, 2001, four more consecutive
      payments of $100,000 are due 60 days after the end of each business
      quarter. Domain name rights have been capitalized by the Company based on
      the present value of the future minimum payments. The guarantee has been
      recorded in the financial statements as contract payable. Payments made
      relating to this contract totaled $187,859 as of December 31, 2000. As of
      December 31, 2000 and 1999, capitalized domain name rights totaled
      approximately $1,645,000 and $1,201,000, respectively, net of accumulated
      amortization of $290,000 and nil, respectively

5.    NOTE PAYABLE

      At December 31, 1999, a note payable of $50,000 was due to Lindlay Equity
      Fund, which bore interest at 12% per annum with no specific terms of
      repayment. Interest related to this note totaling $3,912 was accrued for
      the period ending December 31, 1999. This note was repaid in 2000.


                                       11
<PAGE>

BINGO.COM, INC.
(formerly Progressive General Lumber Corp.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - Continued
DECEMBER 31, 2000 AND 1999
================================================================================

6.    CAPITAL LEASE OBLIGATIONS

      Future minimum lease payments under capital leases for software and
      website equipment as of December 31, are as follows:

                                                            2000         1999
                                                         -----------  ----------
             Year ending December 31,
             2000                                           $    --   $  15,419
             2001                                           183,201      10,220
             2002                                            92,174          --
             2003                                            16,275          --
                                                         ----------   ---------
             Net minimum lease payments                     291,650      25,639
             Less: amount representing interest             (24,135)     (1,822)
                                                         ----------   ---------

             Balance of obligation                          267,515      23,817
             Less: due within one year                     (166,855)    (14,323)
                                                         ----------   ---------

             Long-term obligations under capital leases    $100,660    $  9,494
                                                         ==========   =========

7.    STOCKHOLDERS' EQUITY

      In January 1999, the Company issued 7,500,000 shares under a private
      placement for $0.01 per share for total proceeds of $75,000.

      In February 1999, the Company issued 500,000 units through a private
      placement, each unit consisting of one common share and one share purchase
      warrant for $2.00 per unit for total proceeds of $1,000,000. Each share
      purchase warrant entitles the holder to acquire one additional common
      share at $2.00 per share and expired on February 11, 2000.

      In April 1999, the Company issued 416,668 units through a private
      placement, with each unit consisting of one share of common stock and one
      share common stock purchase warrant for $12.00 per unit for total proceeds
      of $4,991,374, net of expenses of $8,644. each purchase warrant share
      entitles the holder to acquire one additional common share at $12.00 per
      share and expired on April 22, 2000 and increased to $15.00 per share,
      which expired on April 22, 2001. The warrants were not assigned a value
      due to the difference between the market value of the Company's stock and
      the exercise price of the warrants.

      1999 Non-Qualified Stock Option Plan

      The Company granted 500,000 stock options under its 1999 Non-Qualified
      Stock Option Plan (the "1999 Plan) during December 2000 to the Company's
      Director, CEO and President. On June 29, 2000, the Company re-priced
      options to purchase 800,000 shares of the Company's common stock
      previously granted to the person serving as sole Director, CEO and
      President and the person serving as the Senior Vice President of the
      Company. At December 31, 2000, outstanding employee and director stock
      options granted under the 1999 Plan, with various vesting provisions, were
      as follows:

            Number of         Exercise
             Shares             Price                Expiration Date
          --------------  -------------------     ---------------------

               600,000          $0.75               July 1, 2004
               215,000           3.00               December 1, 2004
               200,000           0.75               December 1, 2004
                10,000           1.45               December 1, 2004
               500,000           0.44               December 13, 2005
          --------------
             1,525,000
          ==============


                                       12
<PAGE>

BINGO.COM, INC.
(formerly Progressive General Lumber Corp.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - Continued
DECEMBER 31, 2000 AND 1999
================================================================================

7.    STOCKHOLDERS' EQUITY - Continued

      These re-pricings have resulted in variable accounting, which required the
      computation and recording of no stock based compensation expense for the
      year ending December 31, 2000 because the fair market value of the stock
      as of December 31, 2000 was below the option exercise price. In accordance
      with the Financial & Accounting Standards Board (FASB) FIN 44, the expense
      related to these options was based on the difference between the market
      value of the stock and the option exercise price in this reporting period.

      2000 Stock Option Plan

      On September 1, 2000, subject to Shareholder approval, the Company granted
      incentive stock options to purchase 95,000 shares of the Company's common
      stock to nine full time employees and non-qualified stock options to
      purchase 61,000 shares of the Company's common stock to certain key
      consultants under the Company's 2000 Stock Option Plan (the "2000 Plan").
      The options were granted at an exercise price of $.88 per share, which was
      equal to the fair market value of the Company's common stock on September
      1, 2000, the date of grant. The options vest over various periods. As of
      September 30, 2000, 15,000 incentive stock options and 15,000 of
      non-qualified stock options, granted under the 2000 Plan, had vested.
      Additional options were granted during the quarter ended December 31,
      2000. Vested stock options may not be exercised until the 2000 Plan is
      approved by a majority of the Company's Stockholders. The 2000 Stock
      Option Plan has not been ratified by the shareholders of the Company. In
      accordance with the provisions of FASB Interpretation 44, the measurement
      date for determining the compensation related to these options will be the
      date of ratification.

      Statement of Financial Accounting Standards No. 123, Accounting for Stock
      Based Compensation, encourages, but does not require companies to record
      compensation cost for stock-based employee compensation plans at fair
      value. The Company has chosen to continue to account for stock-based
      compensation using the intrinsic value method prescribed in the previously
      issued standards. Accordingly, compensation cost for employee stock
      options is measured as the excess, if any, of the fair market value of the
      Company's stock at the date of grant over the amount an employee must pay
      to acquire the stock. Compensation cost or deferred compensation for stock
      options issued to employees has been recognized for the year ended
      December 31, 2000 to the extent market value of the stock at the grant
      date exceeded the option price.

      As discussed above, the stock options approved by the Company's Board of
      Directors were not approved by the Company's shareholders. Therefore, for
      financial reporting purposes, there were no stock options outstanding as
      of December 31, 2000 for the 2000 Stock Option Plan. The following table
      summarizes information about stock option transactions for the year ended
      December 31, 2000 related to the 1999 Stock Option Plan.

                                                                      Weighted
                                                                      average
                                                                      exercise
                                                        Shares          price
                                                      -----------    -----------

           Options outstanding at December 31, 1998           --       $  --

           Granted                                     1,025,000        3.72
           Exercised                                          --          --
           Canceled                                           --          --
                                                      ----------       -----

           Options outstanding at December 31, 1999    1,025,000        3.72

           Granted - including repriced shares         1,300,000        0.63
           Exercised                                          --          --
           Canceled - repriced shares                   (800,000)       3.92
                                                      ----------       -----

           Options outstanding at December 31, 2000    1,525,000       $0.96
                                                      ==========       =====


                                       13
<PAGE>

BINGO.COM, INC.
(formerly Progressive General Lumber Corp.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - Continued
DECEMBER 31, 2000 AND 1999
================================================================================

7.    STOCKHOLDERS' EQUITY - Continued

      The following is a summary of the status of stock options outstanding at
      December 31, 2000:

<TABLE>
<CAPTION>
                                                           Outstanding Options                 Exercisable Options
                                                ------------------------------------------- --------------------------
                                                       Weighted
                                                       Average               Weighted                       Weighted
                                                      Remaining              Average                         Average
                 Range of                            Contractual             Exercise                       Exercise
             Exercise Prices       Number            Life (Years)             Price              Number       Price
        ---------------------  ---------------- ----------------------- ------------------- ------------  ------------
         <S>                          <C>                <C>                 <C>                 <C>         <C>
         $           0.44               500,000          4.92                $    0.44                --     $    --
                     0.75               800,000          3.04                     0.75           304,163        0.75
                     1.45                10,000          3.92                     1.45            10,000        1.45
                     3.00               215,000          3.92                     3.00           131,663        3.00
                               ----------------                                             ------------

                                      1,525,000                                                  445,826
                               ================                                             ============
</TABLE>

      The Company applies Accounting Principles Board Opinion No. 25 in
      accounting for its stock option plan. There were no compensation costs
      incurred based on options granted in 2000. Had compensation cost been
      recognized on the basis of fair value pursuant to Statement of Financial
      Accounting Standards No. 123, net income and loss per share would have
      been adjusted as follows for the periods ended December 31,:

<TABLE>
<CAPTION>
                                                2000            1999          1998
                                            -----------     -----------     --------
<S>                                       <C>               <C>              <C>
      Net loss
             As reported                    $(3,334,891)    $(2,908,640)     $(1,804)
                                            ===========     ===========      =======

             Pro forma                      $(3,922,847)    $(2,858,522)     $(1,804)
                                            ===========     ===========      =======

      Basic and diluted loss per share
             As reported                    $     (0.33)    $     (0.31)     $  (0.01)
                                            ===========     ===========      =======

             Pro forma                      $     (0.39)    $     (0.31)     $  (0.01)
                                            ===========     ===========      =======
</TABLE>

      The fair value of employee stock options at the date of grant was
      estimated using the Black-Scholes model with the following weighted
      average assumptions:

                                              2000            1999
                                          ------------    ------------
                  Risk free interest rate       5.50%          5.00%
                  Expected life               5 years        5 years
                  Expected volatility         116.53%        141.03%
                  Expected dividend                --             --


                                       14
<PAGE>

BINGO.COM, INC.
(formerly Progressive General Lumber Corp.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - Continued
DECEMBER 31, 2000 AND 1999
================================================================================

8.    DISCONTINUED OPERATIONS

      In January 2000, the Company announced that it had discontinued and
      wound-up its Antigua based internet gaming operations. These financial
      statements have been 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 includes the following amounts applicable to the Antigua
      operations:

                                                           2000        1999
                                                         --------   --------
      Current assets                                     $  3,710   $  7,792
      Capital assets, net of accumulated depreciation      40,395     67,494
      Other assets                                            905     21,175
      Current liabilities                                  16,344     51,550
      Non-current liabilities                                   -     53,912

9.    RELATED PARTY TRANSACTIONS

      In 1999, the Company provided an interest-free loan to the Company's Sole
      Officer and Director of $70,000 Canadian dollars ($48,212 US dollars),
      repayable over 12 months. As of December 31, 1999, $49,583 Canadian
      dollars ($34,336 US dollars) remained outstanding, in addition to $5,286
      Canadian dollars ($3,640 US dollars) of other unsecured advances. The
      amounts were repaid during 2000.

      In 2000, the Company provided another interest-free loan to the Company's
      Sole Officer and Director of $56,484 Canadian dollars ($37,686 US
      dollars), repayable over 12 months. As of December 31, 2000, $47,070
      Canadian dollars ($31,405 US dollars) remained outstanding.

10.   INCOME TAXES

      Income taxes are provided pursuant to SFAS No. 109, Accounting for Income
      Taxes. The statement requires the use of an asset and liability approach
      for financial reporting for income taxes. If it is more likely than not
      that some portion or all of the deferred tax asset will not be realized, a
      valuation allowance is recognized. Accordingly, as the realization and the
      use of the net operating loss carryforward is not probable at December 31,
      2000 or 1999, the tax benefit of the loss carryforward has been offset by
      a valuation allowance of the same amount.

      As of December 31, 2000, the Company had approximately $6,250,000 and
      $3,125,000 of federal and state operating loss carryforwards,
      respectively, available to reduce future federal and state tax liability
      through the year 2020 for federal purposes and 2005 for state purposes.


                                       15
<PAGE>

BINGO.COM, INC.
(formerly Progressive General Lumber Corp.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - Continued
DECEMBER 31, 2000 AND 1999
================================================================================

10.   INCOME TAXES - Continued

      The composition of deferred tax assets at December 31, are as follows:

                                                       2000          1999
                                                   -----------     ---------
      Total deferred tax assets - net operating    $ 2,125,000     $ 991,000
         loss carryforwards

      Total valuation allowance                     (2,125,000)     (991,000)
                                                   -----------     ---------

      Total deferred tax assets                    $        --     $     --
                                                   ===========     ========

      The valuation allowance will be evaluated at the end of each year,
      considering positive and negative evidence about whether the asset will be
      realized. At that time, the allowance will either be increased or reduced;
      reduction could result in the complete elimination of the allowance if
      positive evidence indicates that the value of the deferred tax asset is
      not longer impaired and the allowance is no longer required.

      At December 31, 1999, deferred taxes consisted of a net tax asset of
      $991,000 due to operating loss carryforwards of $2,915,444, which was
      fully allowed for in the valuation allowance of $991,000. The valuation
      allowance offsets the net deferred asset for which there is no assurance
      of recovery. The change in the valuation allowance for the years ended
      December 31, 1998 and 1999 were $1,700 and $989,300, respectively. Net
      operating loss carryforwards will expire in 2020.

      The difference between the expected statutory rate of 34% and the actual
      effect tax rate of zero is due to the nondeductibility of domain name
      amortization and the valuation allowance for the deferred asset related to
      the net operating loss carryforwards.

11.   FAIR VALUE OF FINANCIAL INSTRUMENTS

      The following disclosure of the estimated fair value of the financial
      instruments is made in accordance with the requirements of SFAS No. 107,
      Disclosures about Fair Value of Financial Instruments. The estimated fair
      value amounts have been determined by the Company, using available market
      information and appropriate valuation methodologies. The fair value of
      financial instruments, including cash and cash equivalents and notes and
      accounts receivable and payable, approximate carrying value due to the
      short-term maturity of the instruments.

12.   COMMITMENTS

      The Company leases office equipment under various leases, which expire at
      various times through 2004. Future minimum rental commitment amounts are
      as follows:

           Year ended December 31,
                    2001                      $ 54,388
                    2002                         4,044
                    2003                         2,910
                    2004                           750
                                              --------

                                              $ 62,892
                                              ========


                                       16
<PAGE>

BINGO.COM, INC.
(formerly Progressive General Lumber Corp.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - Continued
DECEMBER 31, 2000 AND 1999
================================================================================

12.   COMMITMENTS - Continued

      In February 2000, the Company sublet the Canadian facilities for $2,155
      per month for rent and $2,155 per month for building property taxes and
      operating expenses with an expiration date of April 29, 2002. The total
      amount of the sublease totaling $4,310 per month offsets the total
      liability of $4,500 per month, which is included in the above schedule.
      The Company's obligation under the original Canadian lease facility
      expires on April 30, 2002.

      Rent expense for the years ended December 31, 2000 and 1999 was
      approximately $114,000 and $67,000, respectively. There was no rent
      expense incurred for the year ended December 31, 1998. The company's
      facilities are leased on a month-to-month basis and therefore no future
      commitment is presented.

13.   CONCENTRATION OF CREDIT RISK

      The Company invests its cash primarily in deposits with major banks.
      Certain deposits, at times, are in excess of federally insured limits.
      Also, the Company maintained balances in foreign bank accounts totaling
      $16,000 and $11,800 at December 31, 2000 and 1999, respectively. The
      Company has not incurred losses related to its cash.

14.   UNAUDITED QUARTERLY INFORMATION

      The following unaudited information presents the Company's results of
      operations for the years ended December 31, 2000 and 1999:

<TABLE>
<CAPTION>
                                                      Quarter Ended in 2000
                                     ---------------------------------------------------------------------------
                                     March 31,      June 30,      September 30,     December 31,
                                       2000          2000             2000             2000             TOTAL
                                     ---------    -----------      -----------      ----------       -----------

<S>                                  <C>          <C>             <C>               <C>              <C>
Revenue                              $   4,280    $    57,588     $    544,416      $  513,580       $ 1,119,864

Cost of revenues                            --             --         (274,726)     (1,144,921)       (1,419,647)

Operating expense                     (515,882)    (1,204,272)      (1,353,392)         47,457        (3,026,089)

Other income (expense):
  Loss on disposition of
    discontinued operations                 --        (45,899)              --              --           (45,899)
  Interest income
   (expense), net                       21,360         24,307           (4,862)         (3,925)           36,880
                                     ---------    -----------      -----------      ----------       -----------

Net loss                             $(490,242)   $(1,168,276)     $(1,088,564)     $ (587,809)      $(3,323,891)
                                     =========    ===========      ===========      ==========       ===========

Loss per share                       $   (0.05)   $     (0.12)     $     (0.11)     $    (0.05)      $     (0.33)
                                     =========    ===========      ===========      ==========       ===========
</TABLE>


                                       17
<PAGE>

BINGO.COM, INC.
(formerly Progressive General Lumber Corp.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - Continued
DECEMBER 31, 2000 AND 1999
================================================================================

14.   UNAUDITED QUARTERLY INFORMATION - Continued

<TABLE>
<CAPTION>
                                                          Quarter Ended in 1999
                                       ------------------------------------------------------------------------
                                       March 31,      June 30,    September 30,    December 31,
                                         1999           1999           1999           1999             TOTAL
                                       --------      ---------     -----------     -----------      -----------
<S>                                    <C>           <C>           <C>             <C>              <C>
Revenue                                $     --      $      --     $        --     $        --      $        --

Operating
expense                                      --       (523,670)       (727,762)     (1,229,002)      (2,480,434)

Other income (expense), net                  --         24,558          28,550          72,793          125,901
                                       --------      ---------     -----------     -----------      -----------

Loss from continuing operations              --       (499,112)       (699,212)     (1,156,209)     $(2,354,533)
                                       --------      ---------     -----------     -----------      -----------

Loss from discontinued
operations, net of income taxes              --             --              --        (494,107)        (494,107)

Estimated loss on disposal of
discontinued operations                      --             --              --         (60,000)         (60,000)
                                       --------      ---------     -----------     -----------      -----------

Loss from discontinued operations            --             --              --        (554,107)        (554,107)
                                       --------      ---------     -----------     -----------      -----------
Net loss                               $     --      $(499,112)    $  (699,212)    $(1,710,316)     $(2,908,640)
                                       ========      =========     ===========     ===========      ===========

Basic and diluted loss per share       $     --      $   (0.05)    $     (0.07)    $     (0.19)     $     (0.31)
                                       ========      =========     ===========     ===========      ===========
</TABLE>

15.   SUBSEQUENT EVENTS

      On April 16, 2001, the Company received a loan from and issued a
      convertible debenture to Redruth Ventures Inc., a British Virgin Islands
      corporation ($750,000), and to Bingo, Inc., an Anguilla corporation
      ($500,000) ("the Holders"). The Company promises to pay to the Holders, an
      amount equal to U.S.$1,250,000, together with simple interest at the fixed
      rate per annum of twelve percent (12%), with interest accruing and payable
      on the outstanding principal amount of this Debenture. Drawdowns of
      principal under this Debenture are scheduled as follows:

                                                            U.S. Dollars
                                                          ----------------
                     April 16, 2001                            $250,000
                     May 1, 2001                                250,000
                     June 1, 2001                               250,000
                     July 1, 2001                               150,000
                     October 1, 2001                            100,000
                     January 1, 2002                            100,000
                     April 1, 2002                              100,000
                     July 1, 2002                                50,000

      Effective March 23, 2001, the agreement with Cox Interactive Sales, Inc.
      was terminated. Advertising sales are being managed directly by the staff
      of the Company.


                                       18
<PAGE>

BINGO.COM, INC.
(formerly Progressive General Lumber Corp.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - Continued
DECEMBER 31, 2000 AND 1999
================================================================================

15.   SUBSEQUENT EVENTS - Continued

      In February 2001, the Company entered into a promissory note for $45,000
      from an unrelated third party bearing interest at prime plus one percent,
      calculated annually, with a maturity date of June 15, 2001.

      In March 2001, the Company entered into a promissory note with an
      unrelated third party for $45,000 bearing interest at ten percent per
      annum with a maturity date of May 15, 2001.

      In April 2001, the original employment agreement with the President, CEO
      and Director ("President") of the Company was cancelled and a new
      agreement was entered into indicating a salary of $175,000 for the first
      year of employment with increases to $200,000 for the second year and
      $225,000 for the third year. The agreement also stipulates 750,000 shares
      of common stock will be issued to the President. The shares will be held
      in escrow for a period of one year. The shares will be released upon the
      earlier of (i) the last day of the escrow period or (ii) the date that
      employment is terminated, once the escrow period has expired. If
      termination occurs prior to the escrow period, then all shares will be
      surrendered and gifted back to the Company. The agreement acknowledges and
      honors the previous stock option grants totaling 1,100,000 common stock
      options under the 1999 Stock Option Plan and the salary advance without
      interest. The agreement also includes several covenants not to compete and
      specifically refers to assignment, intellectual property protection, and
      copyrights in working.


                                       19