UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

Washington,
D.C. 20549

FORM
10-K/A

(Mark
One)

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

SECURITIES EXCHANGE ACT

OF
1934

For the
fiscal year ended: December 31, 2002

Or

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

SECURITIES EXCHANGE

# ACT OF 1934

For
the transition period from to

Commission
file number:000-26319



Bingo.com,
  Inc.


(Exact
name of registrant as specified in its charter)



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



1166
Alberni Street, Suite 1405

Vancouver,
BC, Canada, V6E 3Z3

(604)
694-0300

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

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

None

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

COMMON
  STOCK, PAR VALUE $0.001 PER SHARE


(Title
of class)





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

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



DOCUMENTS
INCORPORATED BY REFERENCE

None



INTRODUCTION

This Form 10-K/A amends the registrant's
Form 10-K for the fiscal year ended December 31, 2002 by deleting the
information contained in Items 8 of Part II of such form and substituting the
following for such Items.



1





###### TABLE OF CONTENTS

PART
  II...........................................................................................................................................
  31

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

ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

ON ACCOUNTING AND
FINANCIAL
DISCLOSURE........................................................  
60

PART
IV.......................................................................................................................................   
69

ITEMS
15.  EXHIBITS, FINANCIAL STATEMENT
SCHEDULES AND

REPORTS
  ON FORM
  8-K......................................................................................................  
  69

SIGNATURES.........................................................................................................................   
70

CERTIFICATIONS.................................................................................................................   
71

EXHIBIT
LIST.........................................................................................................................   
73

EXHIBIT 10.29 Amendment of
Asset Purchase Agreement dated July 1, 2002............................. 74



2



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

### Supplementary
Financial Information

Quarterly Results of
  Operations

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

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



|                                                     |   |                           |   | Three
      Months Ended |  
|---------------------------------------------------- | - | ------------------------- | - | ------------------------ | -
|                                                     |   | March
      31
      2001 |   | June
      30
      2001 |  
|Revenue                                              | $ | 582,803                   | $ | 475,064                  | $
|Cost
      of revenue                                |   | 463,890                   |   | 243,960                  |  
|Gross
      profit                                   |   | 118,913                   |   | 231,104                  |  
|Operating
      expenses and other income / expenses |   | 880,896                   |   | 676,549                  |  
|Net
      loss from continuing Operations            | $ | (761,983)                 | $ | (445,445)                | $
|Basic
      and diluted loss per share               | $ | (0.08)                    | $ | (0.04)                   | $
|Weighted
      average common shares                 |   | 10,104,608                |   | 10,104,608               |  



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



31



BINGO.COM, Inc.



Consolidated
Financial Statements

Years
ended December 31, 2002, 2001 and 2000













Independent Auditors'
Report                                                                                                  
           33



Consolidated
Financial Statements

Balance
Sheets                                                                                                                          
  36

Statements of
Operations                                                                                                             
37

Statements of
Stockholders' Equity (Deficiency)                                                                           
38

Statements of
Cash Flows                                                                                                            
39

Notes to Consolidated Financial Statements                                                                                 
40



32



INDEPENDENT AUDITORS' REPORT



The Board of Directors and Stockholders



Bingo.com, Inc.

We have
audited the accompanying consolidated balance sheet of Bingo.com, Inc. and
Subsidiaries as of December 31, 2002, and the related consolidated statements of
operations, stockholders equity (deficiency) and cash flows for the year then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit. The consolidated financial statements of
Bingo.com, Inc. and Subsidiaries as of December 31, 2001 and 2000, were audited
by other auditors whose reports dated March 15, 2002, except for Note 3, as to
which the date is April 10, 2003, and May 3, 2001, respectively, expressed an
unqualified opinion on those statements.

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

In our
opinion, the 2002 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Bingo.com, Inc. and
Subsidiaries as of December 31, 2002 and the results of their operations and
their cash flows for the year then ended in conformity with 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 1, the Company has
continued to incur operating losses, has used, rather than provided, cash from
operations and has an accumulated deficit of $9,174,243. These factors, and
others, raise substantial doubt about the Company's ability to continue as a
going concern. The ability of the Company to continue operations is subject to
its ability to secure additional capital to meet its obligations and to fund
operations. Management's plans in regard to these matters are also described in
Note 1. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.



/s/Dohan
& Company, CPA's



Miami, Florida

April 10, 2003



33



INDEPENDENT AUDITORS' REPORT



The Board of Directors and Stockholders

Bingo.com, Inc.



We have
audited the accompanying restated consolidated balance sheet of Bingo.com, Inc.
and Subsidiaries as of December 31, 2001, and the related restated consolidated
statements of operations, stockholders equity (deficiency) and cash
flows for the year then ended. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.

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 restated consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Bingo.com,
Inc. and Subsidiaries as of December 31, 2001, and the results of their
operations and their cash flows for the year then ended in accordance with
accounting principles generally accepted in the United States of America.

As
discussed in Note 3 to the financial statements, certain errors resulting in an
overstatement of the debenture payable in the amount of $462,673, understatement
of additional paid-in-capital in the amount of $539,036, and understatement of
net loss by $76,363 as of December 31, 2001, were discovered by management of
the Company subsequent to the issuance of our report on those financial
statements dated March 15, 2002. Accordingly,
the accompanying 2001 financial statements have been restated to correct the
errors.



/s/ 
Davidson & Company

Chartered Accountants



Vancouver,
Canada

March
15, 2002, except for Note 3, as to which the date is April 10, 2003

34



INDEPENDENT
AUDITORS' REPORT



The Board of Directors and Stockholders

Bingo.com, Inc.



We have audited the consolidated balance sheet of
Bingo.com, Inc. as of December 31, 2000, and the related consolidated statements
of operations, stockholders' equity (deficiency) 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 1, 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 1. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

/s/ Grant
Thornton LLP

Certified
Public Accountants



Los Angeles, California



35





BINGO.COM,
INC.

Consolidated
Balance Sheets



December
31, 2002 and 2001 (Restated)



|                                                                                                                                       |  |   | 2002        |  |   | RESTATED
      2001
|-------------------------------------------------------------------------------------------------------------------------------------- |  | - | ----------- |  | - | -------------------
|Assets                                                                                                                                 |  |   |             |  |   |                    
|Current
      assets:                                                                                                                  |  |   |             |  |   |                    
|Cash and cash equivalents                                                                                                              |  | $ | 14,682      |  | $ | 14,028             
|Accounts receivable,
      less allowance for
      doubtful accounts of $nil (2001 - $46,185)                                         |  |   | 5,294       |  |   | 351,330            
|Inventory                                                                                                                              |  |   | 2,631       |  |   | -                  
|Prepaid expenses                                                                                                                       |  |   | 14,093      |  |   | 9,178              
|Total
      Current Assets                                                                                                             |  |   | 36,700      |  |   | 374,536            
|                                                                                                                                       |  |   |             |  |   |                    
|Equipment
      (Note 4)                                                                                                               |  |   | 127,469     |  |   | 477,554            
|                                                                                                                                       |  |   |             |  |   |                    
|Other
      assets                                                                                                                     |  |   | 29,675      |  |   | 27,559             
|                                                                                                                                       |  |   |             |  |   |                    
|Domain
      name rights (Note 5)                                                                                                      |  |   | 1,257,241   |  |   | 1,257,241          
|                                                                                                                                       |  |   |             |  |   |                    
|Deferred
      tax asset, less valuation allowance of $3,346,803 (2001 - $2,993,179)
      (Note 10)                                   |  |   | -           |  |   | -                  
|                                                                                                                                       |  |   |             |  |   |                    
|Total
      Assets                                                                                                                     |  | $ | 1,451,085   |  | $ | 2,136,890          
|                                                                                                                                       |  |   |             |  |  
|Liabilities
      and Stockholders' Equity (Deficiency)                                                                                |  |   |             | 
|Current
      liabilities:                                                                                                             |  |   |             |  |   |                    
|Accounts payable                                                                                                                       |  | $ | 597,531     |  | $ | 785,817            
|Accounts payable - related party (Note 12)                                                                                             |  |   | 151,075     |  |   | 84,843             
|Accrued liabilities                                                                                                                    |  |   | 262,072     |  |   | 165,076            
|Unearned Revenue                                                                                                                       |  |   | 12,500      |  |   | -                  
|Loan payable (Note 12)                                                                                                                 |  |   | 197,134     |  |   | 45,385             
|Current portion of contract payable (Note 5)                                                                                           |  |   | -           |  |   | 184,772            
|Current portion of capital leases (Note 6)                                                                                             |  |   | 115,536     |  |   | 163,221            
|Total
      Current Liabilities                                                                                                        |  |   | 1,335,848   |  |   | 1,429,114          
|                                                                                                                                       |  |   |             |  |   |                    
|Capital
      leases payable, net of current portion (Note 6)                                                                          |  |   | -           |  |   | 25,974             
|                                                                                                                                       |  |   |             |  |   |                    
|Debenture
      payable (Note 7)                                                                                                       |  |   | 1,395,000   |  |   | 1,100,000          
|Warrants
      -Debenture discount                                                                                                     |  |   | (372,736)   |  |   | (462,673)          
|Net
      Debenture Payable                                                                                                            |  |   | 1,022,264   |  |   | 637,327            
|                                                                                                                                       |  |   |             |  |   |                    
|Total
      Liabilities                                                                                                                |  |   | 2,358,112   |  |   | 2,092,415          
|                                                                                                                                       |  |   |             |  |   |                    
|Commitments and contingencies
(Note 6 and 9)                                                                                           |  |   |             |  |   |                    
|                                                                                                                                       |  |   |             |  |   |                    
|Stockholders'
      equity (deficiency) (Note 8):                                                                                      |  |   |             |  |   |                    
|Common stock, $0.001 par value, authorized 50,000,000
      shares; issued and outstanding 11,104,608 shares
      (2001 - 10,854,608) |  |   | 11,105      |  |   | 10,855             
|Additional paid in capital                                                                                                             |  |   | 8,231,531   |  |   | 8,208,862          
|Accumulated deficit                                                                                                                    |  |   | (9,174,243) |  |   | (8,205,535)        
|Accumulated other comprehensive loss:
      Foreign currency translation adjustment                                                    |  |   | 24,580      |  |   | 30,293             
|Total
      (Deficiency) Stockholders' Equity                                                                                          |  |   | (907,027)   |  |   | 44,475             
|                                                                                                                                       |  |   |             |  |   |                    
|Total
      Liabilities and Stockholders ' Equity (Deficiency)                                                                         |  | $ | 1,451,085   |  | $ | 2,136,890          



See
accompanying notes to consolidated financial statements.



36



BINGO.COM, INC.

Consolidated Statements of Operations



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



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



See accompanying notes to consolidated
  financial statements.

37



BINGO.COM,
  INC.

Consolidated
  Statements of Stockholders' Equity (Deficiency)



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



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

See accompanying notes to consolidated
  financial statements.



38



BINGO.COM, INC.

Consolidated
  Statements of Cash Flows



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

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

Seeaccompanying notes to consolidated financial statements.

39



BINGO.COM, INC.

Notes to Consolidated Financial Statements



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






1.     
Introduction:

Nature
of business

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

Continuing operations

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

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

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

2.
        Summary of significant
  accounting policies:

(a)
     Basis
  of presentation:

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

40



BINGO.COM, INC.

Notes to Consolidated Financial Statements



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






2.      Summary of significant accounting policies (Continued):

(b)
   Use of
estimates:

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



(c)   
  Revenue recognition:

(i)  Advertising revenue:

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

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

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

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

(ii)   
Barter revenue:

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

41





BINGO.COM, INC.

Notes to Consolidated Financial Statements



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






2.      Summary of
  significant accounting policies (Continued):

(c)   
  Revenue recognition: (Continued)

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

(d)   
Foreign currency:

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

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

(e)   
Cash and cash equivalents:

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

(f)     
Inventory



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



42



BINGO.COM, INC.

Notes to Consolidated Financial Statements



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






2.      Significant accounting policies (Continued):



(g)   
  Equipment:

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

Equipment
and computers                  
         
3 years

Website
and software development             3
years

Furniture
and fixtures                                     
5 years

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

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

(h)   
Advertising:

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

(i)     
Stock-based compensation:

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



43



BINGO.COM, INC.

Notes to Consolidated Financial Statements



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






2.      Significant accounting policies (Continued):

(i)     
Stock-based compensation: (Continued)

reliably determined.  Stock
compensation expense is recognized as the stock option is earned, which is
generally over the vesting period of the underlying option.

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

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

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

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

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



44



BINGO.COM, INC.

Notes to Consolidated Financial Statements



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






2.      Significant accounting policies (Continued):

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

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

(k)   
Comprehensive income:

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

(l)     
Income taxes:

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

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

(m)   
Net loss per share:

Basic loss per share is computed using the
weighted average number of common shares outstanding during the periods. 
Diluted loss per share is computed using the weighted average number of
common shares and potentially dilutive common stock equivalents, including stock
options and warrants and convertible debt, outstanding during the period. 
As the Company has a net loss in each of the periods presented, basic and
diluted net loss

45



BINGO.COM, INC.

Notes to Consolidated Financial Statements



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






2.      Significant accounting policies (Continued):

(m)   
Net loss per share: (Continued)

per share is the same, as any exercise of the share purchase
options or conversion of the convertible debenture outstanding would be
anti-dilutive.

(n)     
Domain name:

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

(o)   
Business Combinations:

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

(p)     
  New Accounting Pronouncements

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

In November 2002, the FASB issued
Interpretation No. 45, " Guarantor's Accounting and Disclosure Requirements
for Guarantees, Including Indirect Guarantees of Indebtness of Others" (FIN
45). Fin 45 provides guidance on the disclosure to be made by a guarantor in its
interim and annual financial statements about its obligations under certain
guarantees that it has issued and also clarifies that a guarantor is required to
recognize, at the inception of a guarantee, a liability for the fair value of
the obligation undertaken in issuing the guarantee. The disclosure requirements
of FIN 45 are effective for financial statements of

46



BINGO.COM, INC.

Notes to Consolidated Financial Statements



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






2.      Significant accounting policies (Continued):



(p)     
  New Accounting Pronouncements (Continued)

interim or annual periods
ending after December 15, 2002, and its recognition requirements are applicable
for guarantees. The adoption of this interpretation is not anticipated to have a
material effect on our financial position or results of operations.

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

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

(q)    
Financial Instruments



(i) Fair values:

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

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

(ii) Foreign Currency
risk:

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

47



BINGO.COM, INC.

Notes to Consolidated Financial Statements



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






2.      Significant accounting policies (Continued):

(r)    
Reclassification

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

3.
  Prior Period Adjustment:

Debenture "A"

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

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

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

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

48



BINGO.COM, INC.

Notes to Consolidated Financial Statements



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






3.
  Prior Period Adjustment: (Continued)

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

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

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

|                                                                                    |        | As
      Reported |   | Adjustment |        | As
      Restated
|----------------------------------------------------------------------------------- | ------ | ----------------- | - | ---------- | ------ | -----------------
|ASSETS                                                                              |        |                   |   |            |        |                  
|Total current assets                                                                | $      | 374,536           | $ |            | $      | 374,536          
|Fixed assets                                                                        |        | 477,554           |   | -          |        | 477,554          
|Other assets                                                                        |        | 27,559            |   | -          |        | 27,559           
|Domain name rights                                                                  |        | 1,257,241         |   | -          |        | 1,257,241        
|Total
      Assets                                                                  | $      | 2,136,890         | $ | -          | $      | 2,136,890        
|                                                                                    |        |                   |   |            |        |                  
|LIABILITIES
      AND STOCKHOLDER'S EQUITY (DEFICIENCY)                             |        |                   |  
|Total current liabilities                                                           | $      | 1,429,114         | $ | -          | $      | 1,429,114        
|Capital leases payable, net of current
      portion                                |        | 25,974            |   | -          |        | 25,974           
|Debenture payable                                                                   |        | 1,100,000         |   | -          |        | 1,100,000        
|Warrants - Debenture discount                                                       |        | -                 |   | (462,673)  |        | (462,673)        
|Total
      Liabilities                                                             |        | 2,555,088         |   | (462,673)  |        | 2,092,415        
|                                                                                    |        |                   |   |            |        |                  
|Stockholders'
      equity (deficiency)                                             |        |                   |   |            |        |                  
|Common stock $0.01 par value                                                        |        | 10,855            |   | -          |        | 10,855           
|Additional paid in capital                                                          |        | 7,669,826         |   | 539,036    |        | 8,208,862        
|Accumulated deficit                                                                 |        | (8,129,172)       |   | (76,363)   |        | (8,205,535)      
|Accumulated other comprehensive loss:
      Foreign currency translation adjustment | 30,293 |                   | - |            | 30,293
|Total
      Stockholders' equity (deficiency)                                       |        | (418,198)         |   | 462,673    |        | 44,475           
|Total
      Liabilities and Stockholders'
      equity (deficiency)                 | $      | 2,136,890         | $ | -          | $      | 2,136,890        

49



BINGO.COM, INC.

Notes to Consolidated Financial Statements



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






4. 
Equipment:

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



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

5. 
Domain name rights and contract payable:

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

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

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

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



50



BINGO.COM, INC.

Notes to Consolidated Financial Statements



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






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



The
effects of the SFAS 142, where
companies are no longer permitted to amortize indefinite assets, on the
Company's net loss and basic loss per share were as follows:

|                                                                             |  |   | 2002       |  |   | RESTATED
      2001 |  |   | 2000       
|---------------------------------------------------------------------------- |  | - | ---------- |  | - | ------------------- |  | - | -----------
|Net
      Loss - as reported                                                 |  | $ | (968,708)  |  | $ | (1, 955,200)        |  | $ | (3,334,891)
|Add
      back: Intangible Asset Amortization                                |  |   |            |  |   | 387,084             |  |   | 290,175    
|Adjusted Net Loss                                                            |  | $ | (968,708)  |  | $ | (1,568,116)         |  | $ | (3,044,716)
|                                                                             |  |   |            |  |   |                     |  |   |            
|Net
      loss per common share,
      basic
      and diluted - as reported |  | $ | (0.09)     |  | $ | (0.19)              |  | $ | (0.33)     
|Adjusted
      net loss per common share,
      basic
      and diluted      |  | $ | (0.09)     |  | $ | (0.15)              |  | $ | (0.30)     
|                                                                             |  |   |            |  |   |                     |  |   |            
|Weighted
      average common shares outstanding, basic and diluted          |  |   | 10,953,238 |  |   | 10,447,200          |  |   | 10,065,054 

The
amortization of the Domain Name was commenced during 2000 when the Company's
website www.bingo.com became fully operational.

6.   Capital lease obligations:

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

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



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

51



BINGO.COM, INC.

Notes to Consolidated Financial Statements



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






7.  
Debenture payable:

Debenture "A"

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

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

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

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

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

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

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

52



BINGO.COM, INC.

Notes to Consolidated Financial Statements



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






7.  
Debenture payable: (Continued)

Debenture
"B"

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

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

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

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

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

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

53



BINGO.COM, INC.

Notes to Consolidated Financial Statements



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






8.     
Stockholders' equity:

(a)
Common stock issuances:

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

(b)
Stock option plans:

(i)  1999
stock option plan:

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

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

(ii) 2001 stock option plan:

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

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

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

54



BINGO.COM, INC.

Notes to Consolidated Financial Statements



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






8.     
Stockholders' equity: (Continued)

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



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



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

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

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

55



BINGO.COM, INC.

Notes to Consolidated Financial Statements



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






8.     
Stockholders' equity: (Continued)

(c)      Warrants:

Warrant
"A"

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

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



Warrant "B"

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

9. 
Operating leases:

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

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



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



56



BINGO.COM, INC.

Notes to Consolidated Financial Statements



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






10. 
Income taxes:

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

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

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

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

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

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

11.     
Discontinued operations:

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

57



BINGO.COM, INC.

Notes to Consolidated Financial Statements



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






11.     
Discontinued operations: (Continued)

the wind-up. The provision was
applied to the 2000 operating expenses for the Antigua operations.

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

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

12. 
Related party transactions:

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

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



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



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



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

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

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

58



BINGO.COM, INC.

Notes to Consolidated Financial Statements



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






12. 
Related party transactions: (Continued)

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

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

13.     
Segmented information:

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

14. Business
Acquisitions

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

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

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

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

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



59



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

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

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

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

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

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

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

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

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

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



60



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

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

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

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

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

61



PART IV

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

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

(1) FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

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

Consolidated Financial Statements:

Balance Sheets

Statements of Operations

Statements of Stockholders' Equity

Statements of Cash Flows



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

(2) EXHIBITS

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

(3) REPORTS ON FORM 8-K

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

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

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



69



SIGNATURES

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

BINGO.COM,
INC.



By:      
/s/  T. M. Williams

T.
M. Williams

President
and Chief Executive Officer



Date:    May 8, 2003

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

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

By:      
/s/  T. M. Williams            President and Chief                  
May 8, 2003

T. M. Williams                         
Executive Officer and

Director
(Principal

Executive Officer)





By:      
/s/  P. A. CrossgroveDirector                                   
May 8, 2003

P.
A. Crossgrove





By:      
/s/  H. W. BromleyChief Financial Officer               
May 8, 2003

H. W. Bromley                        
(Principal Financial and

Principal
Accounting Officer)



70



CERTIFICATIONS

I,
T. M. Williams, certify that:

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

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

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

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

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

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

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

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

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

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



Signed:  /S/ T. M. 
Williams                                                   
Date :May 8, 2003

T. M.
Williams, Chairman of the Board,

Chief
Executive Officer, President and Secretary

(Principal
Executive Officer)

71



CERTIFICATIONS

I, H. W.
Bromley, certify that:

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

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

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

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

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

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

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

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

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

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

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



Signed:  /S/ H. W. Bromley                                                   
Date :May 8, 2003

H.W.
Bromley,

Chief
Financial Officer

(Principal
Accounting Officer)



72



EXHIBIT
LIST

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

Exhibit

Number
      Description

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

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

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

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

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

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

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

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

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

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

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



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

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

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

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



73



Exhibit
10.29

AMENDMENT OF ASSET PURCHASE AGREEMENT



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

BETWEEN:

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

(the
"Vendor")

AND:

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

(the
"Purchaser")

BACKGROUND:

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

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

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

AGREEMENTS:

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

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

(e)        
"Escrow Agent" means .

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

74



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

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

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

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

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

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

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

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

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

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

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

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

Bingo,
Inc.                                                              
Bingo.com, Inc.



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

Authorized Signatory
Authorized Signatory

75