BINGO COM INC - 10-Q Quarterly Report

[
] TRANSITION
REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________________ to
___________________

Indicate
by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 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.

The
number of outstanding shares of the Registrant's Common Stock, par value
$0.001 per share, was 11,104,608 as of November 12, 2003.

PART I - FINANCIAL INFORMATION

ITEM
1.
Financial Statements.

1.
Basis of Presentation:

The accompanying unaudited financial
statements have been prepared by the Company in conformity with accounting
principles generally accepted in the United States of America applicable to
interim financial information and with the rules and regulations of the United
States Securities and Exchange Commission.
Accordingly, certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed, or omitted, pursuant to such rules
and regulations. In the opinion of
management, the unaudited interim financial statements include all adjustments
necessary for the fair presentation of the results of the interim periods
presented. All adjustments are of a
normal recurring nature, except as otherwise noted below.
These financial statements should be read in conjunction with Bingo.com,
Inc.'s (the "Company") audited consolidated financial statements and notes
thereto for the year ended December 31, 2002, included in the Company's Annual
Report on Form 10-K/A, filed May 8, 2003, with the Securities and Exchange
Commission. The results of
operations for the interim periods are not necessarily indicative of the results
of operations for any other interim period or for a full fiscal year.

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

2.
Going Concern:

These unaudited interim consolidated financial statements have been
prepared on the going concern basis, which presumes the realization of assets
and the settlement of liabilities and commitments 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, by obtaining additional
equity or financing.

The Company has reported losses in the last three fiscal years, and has
an accumulated deficit of $9,334,403 at September 30, 2003.
Management continues to review operations in order to identify strategies
designed to generate additional cash flow, improve the Company's financial
position, and enable the timely discharge of the Company's obligations.

The following adjustments were included
in our Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002,
which affected the presented prior year quarterly financial statements.

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"). On July 2, 2002, the Company issued a convertible debenture "B"
for $145,000 of which $50,000 was received from Bingo, Inc. 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 of Debenture "A"
received a total of 12,000,000 common stock purchase warrant "A", and the
Lenders of Debenture "B" received a total of 580,000 common stock purchase
warrant "B". The Warrant "A" and the Warrant "B" have an exercise
price of $0.25 per share. The common stock purchase warrants issued in
connection with the Debenture "A" and Debenture "B" are exercisable for
a period of three years from the date of the debenture. The Company did not
previously account for the value of the warrants upon issuance of the Debenture
"A" and Debenture "B" in accordance with APB 14 "Accounting for
Convertible Debt and Debt Issued with Stock Purchase Warrants".

Using the Black-Scholes option
pricing model, the Warrant "A" has 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 "A" debenture discount of $539,036, which will be
amortized to interest expense over five years.

Using the Black-Scholes model, the Warrant "B" has 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, which will be amortized to interest expense over four years.

The Company has restated the
comparative prior periods presented in the September 30, 2002, consolidated
statements of operations to reflect additional interest expense of
$82,131
for that nine month period representing amortization of the discounted value of
the Warrant "A" in the amount of $539,036 and Warrant "B" in the amount
of $20,423.

Domain
name rights have been capitalized on the balance sheet based on the present
value of the future minimum royalty payments. During 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 life assets.

The
effects of the amortization of the Warrant "A" debenture discount and
Warrant "B" debenture discount and SFAS 142, on the Company's net loss and
basic loss per share for the quarter ended September 30, 2002, were as follows:

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. 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. 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.

The Company has the option to
pay all the accrued interest in cash, common stock of the Company or a
combination of both cash and common stock. Any common stock of the Company
delivered to the Holders of Debenture "A" in payment of the Debenture
"A" will be valued at $0.25 per share.

On July 23, 2003 the Company and
the holders of Debenture "A" agreed to defer the interest due and subsequent
interest due until April 16, 2004, when the accrued interest will be paid in
common stock of the Company. The Company has agreed, subject to shareholder
approval, to lower the conversion price to $0.20 per share ("the new valuation
price").

The accrued interest on
Debenture "A" as at September 30, 2003, is $318,886
(December 31, 2002 - $206,694). This is included under "Accrued liabilities
- - related party".

Bingo, Inc. has 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". It has been agreed between Bingo, Inc. and the Company that
on April 16, 2004, Bingo, Inc. will exercise their right to convert all the
outstanding principal of Debenture "A" into shares of the Company. The
common stock that will be issued upon conversion of the Debenture "A" will
be subject to certain resale restrictions, as defined in Rule 144 promulgated
under the Securities Act of 1933, as amended (the "Securities Act"). The Debenture "A" is secured by all assets of the
Company.

Bingo, Inc. received a total of
12,000,000 common stock purchase warrants with an exercise price of $0.25 per
share, of which 7,200,000 warrants were surrendered for cancellation by the
debenture holder during the year ended December 31, 2002, in exchange for unused
advertising inventory on the bingo.com website.
The common stock purchase warrants issued in connection with the
Debenture "A" are exercisable for a period of three years from the issue
date of the Debenture "A" and therefore expire April 16, 2004.
As of the date of this report, 4,800,000 warrants remain outstanding
under this Debenture "A". The
total effect of the issuance of the warrants relating to Debenture "A" was
to increase interest expense by $80,855 for the nine months ended September 30,
2003. (December 31, 2002 - $108,807)

On July 2, 2002, the Company
issued a convertible debenture for $145,000 of which $50,000 was received from
Bingo, Inc. 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. 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 accrued interest on Debenture "B" as of
September 30, 2003, is $21,738 (December 31, 2002 - $8,724). This is included
under "Accrued liabilities - related party and Accrued liabilities".

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 promulgated under the Securities 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".

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.

We have adopted the disclosure
requirements of SFAS No. 148, "Accounting for Stock-Based Compensation -
Transition and Disclosure" ("SFAS 148") effective December 2002. SFAS 148
amends FASB Statement No. 123, "Accounting for Stock-Based Compensation"
("SFAS 123"), to provide alternative methods of transition for a voluntary
change to the fair value based method of accounting for stock-based compensation
and also amends the disclosure requirements of SFAS 123 to require prominent
disclosures in both annual and interim financial statements about the methods of
accounting for stock-based employee compensation and the effect of the method
used on reported results. As permitted by SFAS 148 and SFAS 123, we continue to
apply the accounting provisions of Accounting Principles

Board
("APB") Opinion Number 25, "Accounting for Stock Issued to Employees",
and related interpretations, with regard to the measurement of compensation cost
for options granted under the Company's Stock Option Plans. No employee
compensation expense has been recorded as all options granted had an exercise
price greater than the market value of the underlying common stock on the date
of grant. Had expense been recognized
using the fair value method described in SFAS 123, using the Black-Scholes
option-pricing model, we would have reported the following results of
operations:

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:

This block discount applied is due to the
illiquidity of shares, as discussed in Note 3.

(a)
On August 15, 2002 ("the Effective Date"), the Company, in a related
party transaction, acquired from the Company's Chief Executive Officer, 99% of
the share capital of Bingo.com (UK) plc. for $61,440. Bingo.com (UK) plc. net
assets were $58,249 at the time of acquisition.

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 was to be paid no later than six months after the Effective Date. This
was extended during the first quarter for a further six months and third quarter
for a further six months to February 15, 2004. Interest shall accrue on the
outstanding amount at a fixed rate of 5% per annum.

(b) Subsequent to the quarter ended September 30, 2003, the Company settled
a legal dispute with Mr. Roger Ach and the Lottery Channel, Inc. with an
effective date of October 17, 2003. In exchange for some cross promotion and the
monthly use of their email list, the Company agreed to pay Mr. Ach the sum of
$49,435.58. The amount will be
repaid at a rate of $5,000 per month commencing on the earlier of:

i)
Thirty days after the date when the first United States state authorizes
the sale of lottery tickets over the internet through The Lottery
Channel, Inc.; or

The email list shall contain no
fewer than one million email addresses obtained by Games, Inc. or its affliated
companies or subsidiaries within 6 months prior to the respective emailing. The
first emailing shall commence on the Effective date of the agreement and
continue for a period of 5 years unless otherwise agreed in writing by both
parties. The Company will substantiate the email addresses on the email list and
intends to capitalize the value of the list ($49,435.58) and amortize over 5
years.

In
addition the Company agreed to promote the Lottery
Channel, Inc. and if legalized, its online sale of lottery tickets with banner
and button space on the Company's website www.bingo.com, for a period of 5 years.
In the event that the Lottery Channel obtains a license to develop and operate a
charitable pay Bingo game within the next 3 years, expiring October 17, 2006,
the Company agrees to offer the Lottery Channel, Inc. a license to operate such
charitable pay bingo game through the Company's website, www.bingo.com, in
exchange for 10% of the gross revenue of the charitable pay Bingo game. The
development of the charitable pay Bingo game will be entirely at the expense of
the Lottery Channel, Inc.

For the
period ending September 30, 2003, the Company has loans outstanding for $177,201
(December 31, 2002 $154,626) from a current director and officer of the Company.
These loans are made up as follows:

(i)
$141,982 (December 31, 2002 - $121,931). This loan has no fixed repayment terms
and is non-interest bearing.

(ii)
$35,219 (December 31, 2002 - $32,695) related to half of the purchase price for
the acquisition of Bingo.com (UK) plc as discussed in Note 6.

For the period ending September 30, 2003, the Company has
an outstanding loan for $44,680 (December 31, 2002 - $42,508) from a company
owned by a current director and officer of the Company.
Interest accrues on the outstanding amount at the rate of 7% per annum.

For
the period ending September 30, 2003, the Company has a liability of $179,672
(December 31, 2002 - $151,075) 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.

A current director and officer
of the Company, is the potential beneficiary of various discretionary trusts
that hold approximately 80% of the shares of Bingo Inc. Bingo, Inc. is the
holder of Debenture "A" and $50,000 of Debenture "B" as discussed in
note 4. The Company has accrued interest payable to Bingo, Inc. of $318,886
(December 31, 2002 - $206,694) on Debenture "A" and $7,496 (December 31,
2002 - $3,008) on Debenture "B".

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

Payments
made to Bingo, Inc. in relation to the continuing 4% of the proceeding months
gross revenue as defined in the amended domain name purchase agreement totaled
$24,607 during the nine months ended September 30, 2003.

The following material
Subsequent Event occurred as of the time of filing this report:

The ratification of the amendment to the the Convertible Debenture
"A" agreement to reduce the valuation price from $0.25 per share to $0.20
per share as discussed in note 4 by the shareholders of the company at the
Annual General Meeting of the company on October 15, 2003.

ITEM
2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

The following Management's Discussion and Analysis or Plan of Operation
contains forward-looking statements that involve risks and uncertainties, as
described below. Bingo.com,
Inc.'s (the "Company", "we", or "us") actual results could differ
materially from those anticipated in these forward-looking statements.
The following discussion should be read in conjunction with
the unaudited interim consolidated financial statements and notes thereto
included in Part I - Item 1 of this Quarterly Report, and the audited
consolidated financial statements and notes thereto and the Management
Discussion and Analysis of Financial Conditions and Results of Operations
included in our Annual Report on Form 10-K/A for the fiscal year ended December
31, 2002.

All
statements contained in this Quarterly Report on Form
10-Q and the documents incorporated herein by reference,
as well as statements made in press releases and oral statements that may be
made by us or by officers, directors or employees acting on our behalf, that are
not statements of historical fact constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform
Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors that
could cause our actual results to be materially different from historical
results or from any future results expressed or implied by such forward-looking
statements. Readers should consider statements that include the terms
"believe," "belief," "expect," "plan,"
"anticipate," "intend" or the like to be uncertain and
forward-looking. In addition, all statements, trends, analyses and other
information contained in this report relative to trends in net sales, gross
margin, anticipated expense levels and liquidity and capital resources,
constitute forward-looking statements. Potential
risks and uncertainties include, among others, those set forth in this Item 2.
Particular attention should be paid to the cautionary statements involving the
Company's limited operating history, the unpredictability of its future
revenues, the Company's need for and the availability of capital resources, the
evolving nature of its business model, and the risks associated with systems
development, management of growth and business expansion.
Except as required by law, the Company undertakes no obligation to update
any forward-looking statement, whether as a result of new information, future
events or otherwise.
All cautionary statements made herein should be read as being applicable
to all forward-looking statements wherever they appear. Readers
should consider the risks more fully described in the Company's Annual Report
on Form 10-K/A for the year ended December 31, 2002, filed with the Securities
and Exchange Commission (the "SEC") and should not place undue reliance on
any forward-looking statements.

The Company is in the business of developing and operating a bingo based
Web portal designed to provide a variety of free games, and other forms of
entertainment, including an online community, chat rooms, contests, sweepstakes,
tournaments, and more. The Company
envisions becoming the preeminent bingo-based Web portal on the Internet, using
its bingo.com domain name and incorporating a variety of games and content to
attract and retain a large number of subscribers.
The Company's existing Website has attracted over 900,000 registered
users. The Company intends to
continue to build on this subscriber base to further develop its online
presence.

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

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

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

The Company has incurred significant losses
since inception, and as of September 30, 2003, had an accumulated deficit of
$9,334,403. The Company will
continue to incur losses until revenue grows sufficiently to cover ongoing
operating costs, including the costs of sales, marketing efforts, interest and
depreciation. There can be no
assurances that this will occur. The
Company has made a significant investment in the development of the Company's
website, purchase of domain name, branding, marketing, and maintaining
operations.

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

Our
discussion and analysis of our financial condition and results of operations are
based upon our financial statements, which except for lack of all disclosures,
have been prepared in accordance with accounting principles generally accepted
in the United States. The preparation of these financial statements requires us
to make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of contingent assets
and liabilities. On an on-going basis, we evaluate these estimates, including
those related to impairment or disposal of long-lived assets, contingencies and
litigation. We base our estimates on historical experience and on various other
assumptions that are believed to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying values
of assets and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates under different assumptions or
conditions.

We
consider the following accounting policies to be both those most important to
the portrayal of our financial condition and require the most subjective
judgment:

The
Company generates the majority of its revenue from the sale of advertising on
its website. Advertising revenue is
recognized as the advertising campaign or impressions and clicks are made on the
website and the sale of our email address lists. The Company manages its own sales of advertising; hosts the
Company's Website; and serves its own ads.

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". As of
September 30, 2003, 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.

Revenue increased to $236,758 for the quarter
ended September 30, 2003, an increase of 66% from revenue of $142,443 for the
same period in the prior year and a 16% increase from revenue of $203,947 in the
second quarter of 2003. The company
has increased its advertising rates by approximately 10% overall and obtained a
greater number of individual advertisers, thereby providing a more diverse and
increased revenue stream.

The Company recorded cost of revenue of
$53,697 during the quarter ended September 30, 2003, an increase of $23,004 or
75% compared to costs of $30,693 for the same period in the prior year and an 9%
increase to costs of $49,201 in the second quarter of 2003.
The gross margin decreased to 77% for the quarter ended September 30,
2003, compared to 78% gross margin in the third quarter of the prior year and
increased from 76% in the second quarter of 2003.
Cost of revenue consists primarily of commissions paid on the sale of
advertising and the cost of hosting the website.
The increase in cost of revenue, compared to the prior year, is due to
the fact that the sales team is now remunerated on a commission only basis
whereas in the third quarter of the prior year they were remunerated by a
combination of salary and commission. This resulted in higher commission
expenses in 2003. In addition, there was an increase in the cost of Web hosting
in the quarter ended September 30, 2003. The increase in cost of revenue from
the second quarter of 2003 is due to an increase in revenue and therefore an
increase in commissions.

Sales and marketing expenses decreased to
$3,766 for the quarter ended September 30, 2003, a decrease of
$23,975 (86%) over expenses of $27,741 in the third quarter of 2002 and a
decrease of 61% over expenses of $9,707 in the second quarter of 2003.
Sales and marketing expenses include principally costs for marketing,
co-brand advertising and prizes for our game site.
The balance of marketing and advertising expenses consists of payroll,
consultant, and travel costs. This
decrease for the quarter ended September 30, 2003 compared to the third quarter
of 2002 is due to the sales and marketing team now being remunerated on a
commission only basis whereas in third quarter of 2002 they were remunerated on
a combination of both salary and commission. This decrease was offset by the
increase in additional prizes especially the introduction of the daily cash
winners in the first quarter of 2003 where players can win $50. This increase in
prizes is intended to attract a greater number of players to the site. The sales
and marketing expenses decreased in the third quarter of 2003 compared to the
second quarter of 2003 due to a large discount in the settlement with a creditor
during the third quarter of 2003.

General and administrative expenses consist
primarily of payroll costs for the Company's accounting, administrative and
technical staff, premises costs for the Company's office, legal and
professional fees, and other general corporate and office expenses.
General and administrative expenses increased to $120,320 for the third
quarter of 2003, an increase of 5% over costs of $114,244 for the same period
last year and an 32% increase in costs of $90,859 in the second quarter of 2003.
The Company's management have made and continue to make greater efforts
to control operating costs in order to reduce administrative and other expenses.
General and administrative expenses have increased in comparison to the prior
year due to an increase in professional services fees such as accounting and
legal fees, an increase in payroll costs and an increase in costs due to the
weakness of the US Dollar in relation to the Canadian Dollar. These professional
fees have increased due to the additional reporting requirements required by the
Sarbanes-Oxley Act of 2002. The increase in general and
administrative expenses for the third quarter of 2003 compared to the second
quarter of 2003 is due to a large settlement with a creditor during the second
quarter of 2003.

Depreciation and amortization includes
depreciation on the Company's equipment.
Equipment is depreciated using the declining balance method over the
useful lives of the assets, ranging from three to five years.
Depreciation and amortization decreased to $7,499 during the quarter
ended September 30, 2003, a reduction of 77% over costs of $33,495 during the
same quarter in the prior year and a 3% increase over costs of $7,263 in the
second quarter of 2003. The changes in depreciation and amortization can be explained
due to the write-downs and disposals of capital assets during 2002 and in
the first quarter of 2003 and due to the average age of the Company's assets
being older in fiscal 2003, resulting in a lower depreciation base.
The increase from the second quarter
of 2003 is due to acquisitions of equipment during the third quarter of 2003.

Interest expense consists of accrued interest
on the convertible debentures and other debt instruments, such as leases and
loans. Interest expense decreased
to $71,657 for the three months ended September 30, 2003, a decrease of
11% over interest expense of $80,176 for the same period in the prior year and
an increase over interest expenses of $71,577 in the second quarter of 2003.
This decrease in the quarter ended September 30, 2003 compared to the
third quarter of 2002 is due to the reduction in interest on capital leases due
to outstanding debt on the capital leases reaching maturity.

Net loss for the three months ended September
30, 2003, amounted to $20,154, a loss of $0.002 per share, compared to a loss of
$143,898 or $0.013 per share for the same period in 2002 and a loss of $24,508
or a loss of $0.002 in the second quarter of 2003. This decrease in losses is
due to the Company's management continued efforts to control operating costs
and to increase revenue streams.

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

The Company had cash and cash equivalents of $42,131 and a working
capital deficit of $1,351,517 at September 30, 2003. This compares to cash and cash equivalents of $14,682 and a
working capital deficit of $1,299,148 at December 31, 2002.

During the nine months ended September 30, 2003, the Company generated
cash of $84,508 from operating activities compared to using cash of $85,232 in
the same period in the prior year. The
improvement in cash flow from operating activities in 2003 demonstrates the
effectiveness of the Company's efforts to implement efficiencies in operations
and reduce overall operating costs in 2003 and in 2002.

The Company has recorded substantial operating
losses and, as of September 30, 2003, has an accumulated deficit of $9,334,403.
We have not yet achieved profitable operations or secured a long-term
source of consistent and reliable revenue to expand our business.
The Company is constantly looking for new sources of revenue that will
help fund our business. There can
be no assurances that this will be achieved.

Since inception, the Company has not had
adequate revenue to support operations. Credit
card companies are placing pressure on online gaming due to rejecting online
gaming transactions. This in turn is reducing the advertising spent by online
gaming companies on our site. The Company is therefore investigating other
sources of revenue. The Company has significantly reduced ongoing operating
expenses. However, there can be no
assurance that the Company will achieve positive cash flow and operating
profitability on a consistent basis.

Future performance depends on the continued
service of key personnel, and the ability to attract, train, and retain
technical, marketing, customer support, and management personnel.
The loss of one or more key employees especially Mr. T. M. Williams, the
company's President and Chief Executive Officer could negatively impact the
Company, and there is no "key man" life insurance in force at this
time. Competition for qualified personnel is intense, and there can
be no assurance that the Company will retain key employees, or attract and
retain other needed personnel.

During the quarter ended June 30, 2003, the
House Judiciary Committee of the US Government approved HR21 "Unlawful
Internet Gambling Funding Prohibition Act". This bill creates a new crime
of accepting financial instruments, such as credit cards or electronic fund
transfers, for debts incurred in illegal Internet gambling. The bill enables
state and federal Attorneys General to request that injunctions be issued to any
party, such as financial institutions and Internet Service Providers, to assist
in the prevention or restraint of illegal Internet gambling.
This bill still needs to be ratified by the Senate before it becomes
passed as law. The Company does not offer any illegal Internet gambling and will
therefore not be directly affected by this bill, however many of our advertisers
will be affected by this bill and therefore the Company's revenue stream maybe
affected.

The stock market and especially the stock
prices of Internet related companies have been very volatile.
This volatility may not be related to the operating performance of the
companies. The broad market
volatility and industry volatility may reduce the price of the Company's stock
without regard to the Company's operating performance.
The market price of the Company's stock could significantly decrease at
any time as a result of this volatility. The
uncertainty that results from such volatility can itself depress the market
price of the Company's stock.

While management believes that acceptance and
use of the Internet will continue to increase at rapid rates and that additional
hits to the site will be made, there can be no assurances that such increase
will continue to develop, or that use of the Internet as a means of
communication and entertainment will continue or increase.
If growth in the use of the Internet does not continue, there may not be
an increase in the number of hits to the Company's Website at the rates or for
the purposes management has assumed. This
could, in turn, adversely impact the Company and the results of its business
operations. Further, even if acceptance and use of the Internet does
increase rapidly, but the technology underlying the Internet and other necessary
technology and related infrastructure does not effectively support that growth,
the Company's future would be negatively impacted.

ITEM 3.
Quantitative and Qualitative Disclosures About Market Risk.

As of September 30, 2003, Bingo.com had not entered into or acquired
financial instruments that have material market risk. The Company has no financial instruments for trading
purposes, or derivative or other financial instruments with off balance sheet
risk. The majority of financial
assets and liabilities are due within the next twelve months and are classified
as current assets or liabilities in the consolidated balance sheets included in
this report. The exception is the
convertible debentures. The fair
value of the debentures payable cannot be determined because the Company would
not likely be able to secure similar financing on similar terms at a market rate
of interest, if at all. As a
result, the financial statement carrying amount of the debentures payable at
September 30, 2003, reflects the market value to the Company for the debt.

To September 30, 2003, substantially all revenues have been realized or
incurred in United States dollars while the majority of costs are incurred in
Canadian dollars.

To date, the Company has not entered into foreign currency contracts to
hedge against foreign currency risks between the Canadian dollar, British Pound
or other foreign currencies and our reporting currency, the United States
dollar.

Management
evaluated the Company's disclosure controls and procedures within 90 days
prior to the date of this report, and found them to be operating efficiently and
effectively so as to ensure that information required to be disclosed by the
Company under the general rules and regulations promulgated under the Securities
Exchange Act of 1934, as amended, is recorded, processed, summarized and
reported, within the time periods specified by rules of the SEC. These
disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed by
Company is accumulated and communicated to the Company's management, including
its principal executive officer and principal financial officer as appropriate,
to allow timely decisions regarding required disclosure.

There
were no significant changes in the Company's internal controls or other
factors that could significantly affect the Company's internal controls
subsequent to the date of their evaluation.

PART II - OTHER INFORMATION

ITEM
1.
Legal Proceedings

Other than described below, the Company is not
currently a party to any legal proceeding, and was not a party to any other
legal proceeding during the quarter ended September 30, 2003. Management of the
Company is currently not aware of any other legal proceedings proposed to be
initiated against the Company. However, from time to time, the Company may
become subject to claims and litigation generally associated with any business
venture. Should the Company be unable to successfully negotiate a settlement
with its outstanding payables an unrecorded liability will be incurred.

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

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

Subsequent
to the quarter ended September 30, 2003 the Company settled with Mr. Ach and the
Lottery Channel, Inc., with an effective date of October 17, 2003 and agreed to
the following terms:

(a)
The Company agreed to pay Mr. Ach
the sum of $49,435.58. The amount will be repaid at a rate of $5,000 per month
commencing on the earlier of:

i)
Thirty days after the date when the first United States state authorizes
the sale of lottery tickets over

(b)
Games, Inc., a company affiliated to the Lottery Channel, Inc. will
provide Bingo.com, Inc. with one free emailing per month to the then current
email list of Games, Inc. and Games, Inc. affiliated companies and subsidiaries
to promote the Bingo.com, Inc. corporate business. This email list should
contain no fewer than one million email addresses obtained within six months
prior to the respective emailing.

(c)
Within 30 days of the Effective date of the agreement Bingo.com, Inc. and
Games, Inc. will provide the other with 468 by 60 pixels banner space for the
advertising of www.lottery.com
and www.bingo.com.

(d)
Within 30 days after the first United States state authorizes the sale of
lottery tickets over the internet through The Lottery Channel, Inc. or its
affiliate company, Games, Inc., the Company shall provide to Games, Inc., or to
a Games, Inc. designated affiliate or subsidiary, banners of 468 by 60 pixels
and/or buttons of 250 by 250 pixels space on www.bingo.com, enabling Games, Inc.
or its designated affiliate or subsidiary to promote Games, Inc. and/or The
Lottery Channel Inc.'s online sale of lottery tickets.
The total impression of the banners and buttons provided hereunder shall
not exceed five percent (5%) of the total impressions available on the
Company's website. This will be in effect for a period of 5 years from the
Effective date of the agreement, unless otherwise agreed in writing by the
parties hereto.

(e)
The Company will grant Games, Inc. an exclusive license to develop an
charitable pay Bingo game to be accessed through the Company's website www.bingo.com.
This charitable pay Bingo game must be conducted by a charitable organization
that is officially registered and recognized as a charity in the United States
and licensed by said state to provide and operate an
online charity bingo game for North American players. In addition all
operations and servers of the charitable organization,
and/or all operations and servers of any agent of the charitable organization
which has been properly and lawfully authorized by the charitable organization
to conduct the charitable pay bingo game, must be located in the United States. This
exclusive license to develop a charitable pay Bingo game will be for 3 years
from the Effective date of the agreement or for longer period as agreed to by
both parties in writing. Failure to develop and operate a charitable
pay bingo game or a government pay bingo lottery game, within 3 years, all
rights, obligations and responsibilities of this exclusive license shall be void
and all parties shall be released from further obligations from this license.

If
Games, Inc. successfully develops a charitable pay bingo game then Games, Inc.
will have exclusive right to maintain access to that
charitable pay bingo game through the www.bingo.com web-site for a period of ten
years from the date Games, Inc. first develops the charitable pay bingo game. In
exchange the Company will receive 10% of the gross revenues, as reported in
Games, Inc. quarterly reports, from the charitable bingo gaming and government
pay bingo lottery gaming for the preceding quarter, with a minimum payment of
$15,000 per quarter after the first 12 months of operating period.

At
the end of the ten year period, Games, Inc. will have the option three times to
extend the period for 5 years per extension, in exchange for the commission
increasing to 15% and a minimum payment of $22,500 per quarter.

Failure
to make the commission payments by Games, Inc. then Bingo.com, Inc. will be
released from all obligations of the exclusive license agreement.

ITEM
3.
Defaults Upon Senior Securities

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

ITEM
5.
Other Information

The Company entered the following agreements during
the quarter ended September 30, 2003 :

(a) The Company and the holder
of Debenture "A" (Bingo, Inc.) have agreed to defer the interest due on
Debenture "A" and subsequent interest due on Debenture "A" until April
16, 2004, when the accrued interest on Debenture "A" will be paid in common
stock of the Company. The Company has agreed, subject to shareholder approval,
to lower the conversion price to $0.20 per share ("the new valuation
price"). (The
details of the agreement were disclosed in the Company's Quarterly Report on
Form 10-Q for the quarterly period ended June 30, 2003 as filed with the SEC).
Subsequent to the

quarter ended September 30, 2003, the agreement was ratified
by the shareholders of the company at the Annual General Meeting of the company
on October 15, 2003.

In addition it has been agreed between Bingo,
Inc. and the Company that on April 16, 2004, Bingo, Inc. will exercise their
right to convert all the outstanding principal of Debenture "A" into shares
of the Company. The common stock that will be issued upon conversion of the
Debenture "A" will be subject to certain resale restrictions, as defined in
Rule 144 promulgated under the Securities Act of 1933, as amended (the
"Securities Act").

(b)
On August 15, 2002, the Company, in a related party transaction, acquired
from the Company's Chief Executive Officer, 99% of the share capital of
Bingo.com (UK) plc. for approximately
$61,000. Bingo.com (UK) plc. net assets were approximately
$58,000 at the time of acquisition.

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. The time period for this
payment was extended for a further six months to August 15, 2003. It has been
agreed to extend the time period for a further six months to February 15, 2004.
Interest shall accrue on the outstanding amount at a fixed rate of 5% per annum.

ITEM
6.
Exhibits and Reports on Form 8-K

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

(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.

(e) Previously filed with the Company's year end report on Form 10-K/A
for the year ended December 31, 2002, on May 8, 2003.

(f) ) Previously filed with the Company's quarterly report on Form
10-Q for the period ended June 30, 2003, on August 14, 2002.

During the quarter covered by this report, the Company filed
the following reports on Form 8-K:

Current
Report on Form 8-K filed July 31, 2003, reporting the amendment
to the restated convertible debenture originally dated April 16, 2001 and
restated as at May 21, 2002.

SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized.

EXHIBIT
31.1

a) such disclosure controls and procedures or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to Bingo.com, Inc., including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being prepared;

b) designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;

c) evaluated the effectiveness of Bingo.com, Inc. disclosure controls and
procedures and presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures, as of September 30,
2003 covered by this quarterly report based on such evaluation; and

d)
disclosed in this quarterly report any change in Bingo.com, Inc.'s
internal control over financial reporting that occurred during the Bingo.com,
Inc.'s most recent fiscal quarter that has materially affected, or is reasonably
likely to materially affect, the Bingo.com, Inc.'s internal control over
financial reporting; and

a) all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect Bingo.com, Inc.'s ability to record, process,
summarize and report financial information; and;

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

In connection
with the Quarterly Report of Bingo.com, Inc. (the "Company") on Form 10-Q
for the period ended September
30, 2003 as filed with the Securities and Exchange Commission on the date hereof
(the "Report"), I, T. M. Williams, Chief Executive Officer of the Company,
certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:

(1)
The Report fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and

(2)
The information contained in this Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.

A signed original of this written
statement required by Section 906 has been provided to Bingo.com, Inc. and will
be retained by the company and furnished to the Securities and Exchange
Commission or its staff upon request.

In connection
with the Quarterly Report of Bingo.com, Inc. (the "Company") on Form 10-Q
for the period ended September
30, 2003 as filed with the Securities and Exchange Commission on the date hereof
(the "Report"), I, H. W. Bromley, Chief Financial Officer of the Company,
certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and

(2) The information contained in this Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.

SETTLEMENT
AGREEMENT BETWEEN AND AMONG ROGER ACH, BINGO.COM, INC., THE LOTTERY CHANNEL,
INC. A/K/A GAMEBANC CORPORATION AND GAMES, INC. AND AGREEMENT FOR CROSS
PROMOTION DATED OCTOBER 17, 2003.

This Settlement Agreement and Agreement for Cross Promotion
("Agreement") is effective as of October 17, 2003 ("Effective Date"),
between and among Roger Ach ("ACH"), Bingo.com, Inc. ("BINGO.Com"), The
Lottery Channel, Inc. a/k/a Gamebanc Corporation ("LOTTERY") and Games, Inc.
("GAMES");

WHEREAS,
ACH initiated an action against BINGO.COM for payment on a promissory note in
the Hamilton County Court of Common Pleas, and BINGO.COM asserted counterclaims
against ACH and LOTTERY for payment of certain invoices for internet advertising
services, entitled Roger Ach v. Bingo.com, Inc. v. The Lottery Channel, Inc.,
Case No. A0104486 ("the Litigation");

WHEREAS,
the parties desire to settle the Litigation under the terms and conditions
hereinafter set forth; and

WHEREAS,
BINGO.COM and GAMES further desire to participate in certain cross promotions
for one another and to promote a charitable pay bingo game;

NOW,
THEREFORE, in consideration of the
mutual promises contained herein, the sufficiency of which is hereby
acknowledged, the parties agree as follows:

(1) Settlement Payment:
In
consideration of the promises and releases set forth herein, BINGO.COM shall pay
ACH the total sum of $49,435.58USD, calculated as the $45,000.00 USD face value
of the promissory note at issue in the Litigation plus interest.

(a) Schedule: The $49,435.58 USD shall
be repaid at the rate of $5,000.00 USD per month until paid, commencing on the
earlier of (i) thirty days after the date when the
first state authorizes the sale of lottery tickets over the internet through
LOTTERY, or (ii) January 1, 2004. After
the initial payment is made, subsequent payments in the amount of $5,000.00 USD
shall be due on the first day of each following
calendar month until the balance is paid. A
final payment will be due in the amount of $4,435.58 USD.

(a) Free emailing: GAMES
will provide BINGO.COM with one free emailing per month to the then current
email list of GAMES and GAMES' affiliated companies and subsidiaries ("the
Current Email List") with material provided by BINGO.COM, enabling BINGO.COM
to promote BINGO.COM's corporate business, including but not limited to the
promotion of the www.bingo.com website. The
first emailing shall commence on the Effective Date of this Agreement and
subsequent emailings shall be made thereafter on the first day of each
subsequent month.

(i)
Procedure for free emailing:
GAMES may provide the free emailing either (1) by providing BINGO.COM
with the Current Email List of GAMES and GAMES' affiliated companies and
subsidiaries, with BINGO.COM to conduct the emailings by

Page
30

use of the Current
Email List at BINGO.COM's sole expense; or (2) by conducting the emailings
to its Current Email List with content prepared by BINGO.COM, with GAMES to
conduct the emailings by use of the Current Email List at GAMES' sole
expense.

(ii) Content of Current Email List:
BINGO.COM requires, and GAMES agrees to provide, a Current Email List
that contains every email address on the combined email address lists of GAMES
and its affiliated and subsidiary companies and that contains no fewer than
one million (1,000,000) email addresses obtained by GAMES or its respective
affiliated or subsidiary companies within the six (6) months prior to the
respective emailing. For each
emailing, GAMES further agrees to identify for BINGO.COM which email addresses
were obtained by GAMES or its respective affiliated or subsidiary companies
within the six (6) months prior to the respective emailing.

(b) Mutual promotion on websites:
Within thirty (30) days of the Effective Date hereof, BINGO.COM and
GAMES further agree to provide the other with a banner on www.bingo.com and
www.lottery.com, respectively, as follows:
BINGO.COM shall provide GAMES with a banner on www.bingo.com of 468 by
60 pixels which reads "Come to www.lottery.com," or other words mutually
agreed upon by the parties in writing; and GAMES shall provide BINGO.COM with
a banner on www.lottery.com of 468 by 60 pixels which reads "Come to
www.bingo.com," or other words mutually agreed upon by the parties in
writing. No changes to the text
of the banners shall be made unless approved in writing by both parties.

(c)
Promotion after on-line lottery tickets authorized in United States:
Within thirty (30) days after the date when the first United States state
authorizes the sale of lottery tickets over the internet through GAMES or
LOTTERY, BINGO.COM shall provide to GAMES, or to GAMES' designated affiliate
or subsidiary, banners of 468 by 60 pixels and/or buttons of 250 by 250 pixels
on www.bingo.com, enabling GAMES or its designated affiliate or subsidiary to
promote GAMES' and/or LOTTERY's online sale of lottery tickets.
The total impression of the banners and buttons provided hereunder
shall not exceed five percent (5%) of the total impressions available on the
website. Each banner or button
provided by BINGO.COM shall read "Visit www.lottery.com for online lottery
ticket sales," or other words mutually agreed upon in writing by BINGO.COM
and GAMES.

(3)
Charity and Government Bingo:
In consideration of the promises and releases
set forth herein, GAMES further agrees to seek out and execute an agreement with
an appropriate charitable organization and/or governmental entity and,
thereafter to develop and launch a charitable pay bingo game or government pay
bingo lottery game, in accordance with any applicable laws and regulatory
authorities, and BINGO.COM agrees to promote said pay bingo lottery game and/or
government pay bingo lottery game, as follows:

(a)     Definitions
and restrictions: As used
herein, the term "charitable pay bingo game" shall refer to an online bingo
game conducted by an organization that is officially registered and recognized
as a charity in a United States state, excluding aboriginal reserves, and that
is duly authorized, permitted and licensed by said state to provide and operate
an online charity bingo game for North American players.   All operations and servers of the charitable
organization, and/or all operations and servers of any agent of the charitable
organization which has been properly and lawfully authorized by the charitable
organization to conduct the charitable pay bingo game, must be located in the
United States. Further, the
charitable organization in question must be the beneficiary of a reasonable
amount of the proceeds from the charitable pay bingo game and, except for those
players who are supplied through www.bingo.com in accordance with section 3(b)
of this Agreement, must be the supplier of the players for the online charitable
pay bingo game.   As used
herein, the term "government pay bingo lottery game" shall refer to a paid bingo game for or in conjunction with a
state or Provincial lottery in jurisdictions where it is a permitted activity.

(b)
Grant of Exclusive License to Develop Charitable Pay Bingo Game to Be
Accessed Through "www.bingo.com": For
a period of three (3) years from the Effective Date of this Agreement or for
such longer period as agreed to by the parties in writing ("the Development
Period"), and subject to the exceptions set forth in section 3(c), BINGO.COM
hereby grants GAMES the exclusive right to develop a charitable pay bingo game,
as defined herein, to be accessed from the "www.bingo.com" web-site.

(i)
Failure to develop charitable pay bingo game or government pay bingo
lottery game within three years of the Effective Date: If GAMES fails to develop and have in operation a charitable pay bingo
game or a government pay bingo lottery game, as defined herein, within the
Development Period, all rights, obligations and responsibilities under section 3
of this Agreement shall be void and all parties shall be released from further
obligations under section 3.

(c)
Grant of License to maintain charitable pay bingo site once
established: If GAMES
successfully develops a charitable pay bingo game, as defined herein, BINGO.COM
hereby agrees to grant GAMES the exclusive right to maintain access to that
charitable pay bingo game through the "www.bingo.com" web-site for a period
of ten (10) years from the date GAMES first develops the charitable pay bingo
game ("the Operating Period"). Nothing
herein is intended nor shall be construed to limit the authority of GAMES to
develop, market and/or operate a pay bingo game or similar games accessible
through web-sites other than www.bingo.com without the payment to BINGO.COM or
any other party of any commission, charge or other fee of any kind. Further, nothing herein is intended nor shall be construed to limit the
authority of BINGO.COM itself to develop, market and/or operate a charitable pay
bingo game or government
pay bingo lottery game, to be accessed from the
"www.bingo.com" web-site.

1.
Payment of commissions during Operating Period:
During the initial ten-year Operating Period, GAMES will pay to BINGO.COM
on a quarterly basis a commission equal to ten percent of GAMES' gross
revenues from charitable bingo gaming and government pay bingo lottery gaming
for the preceding quarter. The
commission shall be calculated on the gross revenues of the operating segment of
GAMES that conducts the charitable bingo gaming and government pay bingo lottery
gaming, as those revenues are reported in GAMES' 10-Q for the preceding
quarter

under GAAP segregated accounting. If
GAMES' 10-Q filing fails to account for the gross revenues attributable to charitable bingo gaming and government pay bingo lottery
gaming, GAMES shall provide verified
financial information to BINGO.COM sufficient for BINGO.COM to identify those
revenues attributable to charitable bingo gaming and government pay bingo
lottery gaming. In a writing accompanying each disclosure of financial information,
GAMES' chief financial officer shall attest, to the best of his knowledge,
information and belief, to the accuracy and completeness of the financial
information. Payments
for the preceding financial quarter shall be due on January 1, April 1, July 1,
and October 1 of each year of the Operating Period.

2. Minimum Payment after first twelve (12) months of Operating Period:
Following the first twelve (12) months
of the Operating Period, GAMES shall thereafter pay to BINGO.COM on the first
day of each calendar quarter a
minimum monthly payment of $15,000.00 USD per quarter, to be applied against
quarterly royalties as set forth in section 3(c)(i)(1) of this Agreement.

3. Entitlement to minimum payments:
In any quarter after the first twelve (12) months of the Operating Period
where the royalties owed under section 3(c)(i) amount to an average of less than
$5,000.00 USD per month, BINGO.COM shall nonetheless be entitled to retain the
payments of $15,000.00 USD per quarter, without any offset against or effect
upon BINGO.COM's rights to payments and royalties for past or future quarters.
In any quarter where royalties owed under section 3(c)(i) amount to an
average of more than $5,000.00 USD per month, BINGO.COM shall be entitled to the
royalties actually accrued, with an offset only for the minimum payment of
$15,000.00 USD made during the quarter in question, but without any offset or
reduction for previous or future quarters in which quarterly royalties were less
than an average of $15,000.00 USD.

(ii)
Extension of Operating Period rights to maintain charitable pay bingo
site: At any time prior to the
expiration of the initial Operating Period GAMES will have the option of
extending the Operating Period three (3) times for a period of five (5) years
per extension on the terms set forth below.

1. Payment of Commissions During Extension(s) of Operating Period:
During any extension of the Operating Period, GAMES will pay to BINGO.COM on a
quarterly basis a commission equal to fifteen percent of GAMES' gross revenues
from charitable bingo gaming and government pay bingo lottery gaming, as those
revenues are reported in GAMES' 10-Q for the preceding quarter under GAAP
segregated accounting. If GAMES'
10-Q filing fails to account for the gross revenues attributable to charitable
bingo gaming and government pay bingo lottery gaming, GAMES shall provide
verified financial information to BINGO.COM sufficient for BINGO.COM to identify
those revenues attributable to charitable bingo gaming and government pay bingo
lottery gaming. In a writing accompanying each disclosure of financial information,
GAMES' chief financial officer shall attest, to the best of his knowledge,
information and belief, to the accuracy and completeness of the financial
information.

2. Minimum Payment During Extensions of Operating Period:
During any extension of the Operating Period, GAMES shall pay to
BINGO.COM on the first day of each calendar quarter a minimum quarterly payment
of $22,500.00 USD per quarter, to be applied against quarterly royalties as set
forth in section 3(c)(ii)(1) of this Agreement.

3. Entitlement to minimum payments:
In any quarter during an extension of the Operating Period where the
royalties owed under section 3(c)(ii) amount to an average of less than
$7,500.00 USD per month, BINGO.COM shall nonetheless be entitled to retain the
payments of $22,500.00 USD per quarter, without any offset against or effect
upon BINGO.COM's rights to payments and royalties for past or future quarters.
In any quarter where royalties owed under section 3(c)(ii) amount to an
average of more than $7,500.00 USD per month, BINGO.COM shall be entitled to the
royalties actually accrued, with an offset only for the minimum payment of
$22,500.00 USD made during the quarter in question, but without any offset or
reduction for previous or future quarters in which quarterly royalties were less
than an average of $22,500.00 USD.

(i)
Grant of space and access during the Operating Period:
Space and access from the "www.bingo.com" web-site shall be mutually
agreed upon by the parties, so as to prominently feature charitable pay bingo
games and government pay bingo lottery games provided by GAMES, along with
BINGO.COM's offerings.

(ii)
Compliance of charitable pay bingo games and government pay bingo
lottery games with applicable regulations:
GAMES agrees to ensure that any such games are in full compliance with
all applicable regulatory authorities and, without limiting the generality of
the foregoing, with the primary regulatory authority in the jurisdiction of the
player.

(iii)
Cost of Development: GAMES
further agrees to bear the expense of development and operation of the
charitable pay bingo games and government pay bingo lottery games.

(e)
Failure to Pay Commissions: If
GAMES fails to make any required commission payments, BINGO.COM shall be
released from any further obligations under section 3 of this Agreement.

(a)
In consideration of ACH's, LOTTERY's and GAMES' promises,
representations and releases as set forth herein, BINGO.COM hereby releases
and forever discharges ACH, LOTTERY and GAMES, their officers, agents,
employees, successors, and assigns from any and all claims, demands, actions,
causes of action, cross-claims, counterclaims, suits, debts, liens, contracts,
agreements, promises, liabilities, judgments, orders, damages, losses, costs
and expenses existing as of the date of this Agreement, whether known or
unknown.

(b)
In consideration of BINGO.COM's promises, representations and
releases as set forth herein, ACH, LOTTERY and GAMES hereby release and
forever discharge BINGO.COM, its officers, agents, employees, successors, and
assigns from any and all claims, demands, actions, causes of action,
cross-claims, counterclaims, suits, debts, liens, contracts, agreements,
promises, liabilities, judgments, orders, damages, losses, costs and expenses
existing as of the date of this Agreement, whether known or unknown.

(5) Dismissal of Action:
Within
ten (10) days of the Effective Date of this Agreement, the parties will
dismiss with prejudice or cause to be dismissed with prejudice all claims
asserted by them in the Litigation with all parties to bear their own costs.

(6)
This Agreement shall be binding upon and inure to the benefit of the
parties and their respective

successors and assigns.

(7)
The validity, terms, performance and enforcement of this Agreement shall
be governed and construed by its provisions and in accordance with the laws of
the State of Ohio (without regard to conflicts of laws principles) as if this
Agreement were negotiated, executed, delivered and performed solely in the State
of Ohio. Any action to enforce or interpret this Agreement shall be
brought only in a court located in Hamilton County, Ohio and the parties hereto
expressly consent to personal jurisdiction in such courts.

(8)
The undersigned corporations hereby represent and warrant that they
have approved the execution of this Agreement and have authorized and directed
the signatory officers herein below to execute and deliver this Agreement and
such other documents as necessary or appropriate to implement this Agreement,
which representations and warranties shall survive the execution and
consummation of the transactions set forth herein.

(9)
The parties agree to issue at least one joint press release regarding
this Agreement, the wording of which will be mutually agreed upon.

(10)
This Agreement embodies the entire understanding between the parties
and there are no prior representations, warranties, or agreements between the
parties relating hereto, and this Agreement is executed and delivered upon the
basis of this understanding. No
change in, modification of or addition, amendment or supplement to the
agreement and releases set forth in this Agreement shall be valid unless set
forth in writing signed by all of the parties subsequent to the effective date
set forth in this Agreement.

(11) The parties acknowledge and agree that:
(a) each party and its counsel have reviewed and negotiated the terms
and provisions of this Agreement; and (b) the terms and provisions of this
Agreement shall be construed fairly as to all parties and not in favor of or
against any party, regardless of which party was generally responsible for the
Agreement's preparation.

(12)
The parties agree that if any part, term or provision of this Agreement
shall be found illegal or in conflict with any valid controlling law, the
validity of the remaining provisions shall not be affected thereby.

(13)
This Agreement is in settlement and compromise of disputed claims and
nothing contained in this Agreement (including but not limited to the payment
which is required by this Agreement) is to be construed as an admission of
liability by any party hereto.

(14)
This Agreement may be executed in multiple copies, each of which may serve
as an original.

Page
35

IN
WITNESS THEREOF, the parties hereto have caused this Settlement Agreement and
Agreement for Cross Promotion to be executed as set forth below.

THE
LOTTERY CHANNEL, INC. a/k/a

GAMEBANC
CORPORATION

Name
(printed):
            Roger
W. Ach II

Signature:
/s/ Roger W. Ach II

Title:
Chief Executive Officer

Date:
October 17, 2003

GAMES,
INC.

Name
(printed):
            Roger
W. Ach II

Signature:
/s/ Roger W. Ach II

Title:
Chief Executive Officer

Date:
October 17, 2003

ROGER
ACH

Signature:
__ /s/ Roger W. Ach II__________

Date:_______
October 17, 2003___________

BINGO.COM,
INC.

Name
(printed):
            T.
M. Williams

Signature:
/s/ T. M. Williams

Title:
Chief Executive Officer

Date:
October 17, 2003

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

		September 30, 2003		December 31, 2002
		(Unaudited)		(Audited)
Assets
Current assets:
Cash and cash equivalents	$	42,131	$	14,682
Accounts receivable		44,991		5,294
Inventory		715		2,631
Prepaid expenses		20,294		14,093
Total Current Assets		108,131		36,700

Equipment, net		73,263		127,469

Other assets		11,540		29,675

Domain name rights		1,257,241		1,257,241

Deferred tax asset, less valuation allowance of $3,377,636 (2002 - $3,346,803)		-		-

Total Assets	$	1,450,175	$	1,451,085

Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable	$	610,085	$	597,531
Accounts payable - related party		179,672		151,075
Accrued liabilities		83,268		52,370
Accrued liabilities - related party		326,382		209,702
Unearned revenue		37,850		12,500
Loan payable		221,881		197,134
Current portion of capital leases		510		115,536
Total Current Liabilities		1,459,648		1,335,848

Debenture payable (Note 4)		1,395,000		1,395,000
Less warrants - debenture discount		(288,051)		(372,736)
Net debenture payable		1,106,949		1,022,264

Total Liabilities		2,566,597		2,358,112

Commitments and contingencies (Note 6)

Stockholders' Deficit: (Note 5)
Common stock, $0.001 par value, authorized 50,000,000 shares; issued and outstanding 11,104,608		11,105		11,105
Additional paid-in capital		8,231,531		8,231,531
Accumulated deficit		(9,334,403)		(9,174,243)
Accumulated other comprehensive loss: Foreign currency translation adjustment		(24,655)		24,580
Total Stockholders' Deficit		(1,116,422)		(907,027)

Total Liabilities and Stockholders' Deficit	$	1,450,175	$	1,451,085

		Nine Months ended September 30,				Three Months ended September 30,
		2003		2002 (RESTATED)		2003		2002 (RESTATED)

Revenue	$	615,175	$	558,847	$	236,758	$	142,443

Cost of revenue		152,683		287,827		53,697		30,693

Gross profit		462,492		271,020		183,061		111,750

Operating expenses:
Depreciation and amortization		22,918		143,367		7,499		33,495
General and administrative		329,190		332,067		120,320		114,244
Selling and marketing		17,665		76,793		3,766		27,741
Total operating expenses		369,773		552,227		131,585		175,480

Income (loss) before other income (expense)		92,719		(281,207)		51,476		(63,730)

Other income (expense):
Loss on disposal of equipment		(38,397)		(237,831)		-		-
Interest expense		(214,761)		(218,980)		(71,657)		(80,176)
Interest income		279		24		27		8

Loss before income taxes		(160,160)		(737,994)		(20,154)		(143,898)

Income tax expense		-		-		-		-

Net loss	$	(160,160)	$	(737,994)	$	(20,154)	$	(143,898)

Cumulative translation adjustment		(49,235)		(7,090)		(6,228)		27,826

Comprehensive loss	$	(209,395)	$	(745,084)	$	(26,382)	$	(116,072)

Net loss per common share, basic and diluted	$	(0.01)	$	(0.07)	$	(0.00)	$	(0.01)

Weighted average common shares outstanding, basic and diluted		11,104,608		10,902,402		11,104,608		10,997,465

	Common stock				Accumulated Other Comprehensive income (loss)
	Shares	Amount	Additional paid-in capital	Accumulated (Deficit)	Foreign currency translation adjustment	Total Stockholders' Deficit
Balance, December 31, 2002	11,104,608	$ 11,105	$ 8,231,531	$ (9,174,243)	$ 24,580	$ (907,027)

Comprehensive loss:
Net loss	-	-	-	(160,160)	-	(160,160)
Cumulative translation adjustment	-	-	-	-	(49,235)	(49,235)
Balance, September 30, 2003	11,104,608	$ 11,105	$ 8,231,531	$ (9,334,403)	$ (24,655)	$ (1,116,422)

		Nine Months ended September 30,
		2003		2002 RESTATED
Cash flows from operating activities:
Net loss	$	(160,160)	$	(737,994)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		22,918		143,367
Amortization of warrants - debenture discount		84,685		82,131
Loss on disposal of equipment		38,397		237,831
Stock based compensation costs		-		(8,750)
Changes in operating assets and liabilities:
Accounts receivable		(39,697)		317,688
Prepaid expenses		(6,201)		(11,304)
Inventory		1,916		-
Other assets		18,135		(2,105)
Accounts payable and accrued liabilities		99,165		(114,596)
Unearned revenue		25,350		8,500
Net cash provided (used) by operating activities		84,508		(85,232)

Cash flows from investing activities:
Acquisition of equipment		(7,109)		(81,648)
Acquisition of Bingo.com (UK) PLC				(61,440)
Cash acquired from Subsidiary undertakings				59,026
Payments on domain name contract payable		-		(184,772)
Net cash used in investing activities		(7,109)		(268,834)

Cash flows from financing activities:
Capital lease repayments		(25,462)		(63,611)
Proceeds from loans payable		24,747		150,917
Issue of debenture payable		-		295,000
Net cash (used in) provided by financing activities		(715)		382,306

Effect of exchange rate changes on cash and cash equivalents		(49,235)		(7,090)
Net increase in cash and cash equivalents		27,449		21,150

Cash and cash equivalents, beginning of period		14,682		14,028
Cash and cash equivalents, end of period	$	42,131	$	35,178

Supplementary information:
Interest paid	$	4,869	$	26,180
Income taxes paid	$	-	$	-

Non-cash activities:
Barter Transactions	$	-	$	2,500

The acquisition of 99% of Bingo.com (UK) plc during August 2002
Cash	$	-	$	59,026
Accounts Payable		-		(777)
Premium on Acquisition		-		3,191
Net cash outflow from acquisition	$	-	$	61,440

PART I - FINANCIAL INFORMATION		2
ITEM 1.	Financial Statements.	2
CONSOLIDATED BALANCE SHEETS		2
CONSOLIDATED STATEMENTS OF OPERATIONS		3
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT		4
CONSOLIDATED STATEMENTS OF CASH FLOWS		5
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	14
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk.	20
ITEM 4.	Controls and Procedures.	20
PART II - OTHER INFORMATION		21
ITEM 1.	Legal Proceedings	21
ITEM 2.	Changes in Securities and Use of Proceeds	22
ITEM 3.	Defaults Upon Senior Securities	22
ITEM 4.	Submission of Matters to a Vote of Security Holders	22
ITEM 5.	Other Information	22
ITEM 6.	Exhibits and Reports on Form 8-K	23
SIGNATURES		25
EXHIBITS		26
CERTIFICATES		26
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley act of 2002		28
Exhibit 10.31 Settlement agreement between and among Roger Ach, Bingo.com, Inc., the Lottery Channel, Inc. a/k/a Gamebanc Corporation and Games, Inc. and agreement for cross promotion dated October 17, 2003		30

Exhibit Number	Description
4.1	$1,250,000.00 Secured Convertible Debenture between the Company, Redruth Ventures Inc, and Bingo, Inc. dated April 16, 2001. (b)
4.2	Common Stock Purchase Warrant between the Company and Redruth Ventures Inc. a British Virgin Islands corporation dated April 16, 2001. (b)
4.3	Common Stock Purchase Warrant between the Company and Bingo, Inc. dated April 16, 2001. (b)
4.4	Convertible Debenture between the Company and unrelated parties dated July 2, 2002. (d)
4.5	Common Stock Purchase Warrant 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)
10.24	Amended Consulting Agreement dated February 28, 2002, between the Company, T. M. Williams (Row), Ltd., and T. M. Williams. (c)

Exhibit Number	Description
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. (e)
10.30	Amendment to the restated convertible debenture originally dated April 16, 2001 and restated as at May 21, 2002 dated July 23, 2003. (f)
33.1	Certificate of Chief Executive Officer pursuant to the Securities Exchange Act Rules 13a - 15(e) and 15d - 15(e) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 dated November 12, 2003.
31.2	Certificate of Chief Financial Officer pursuant to the Securities Exchange Act Rules 13a - 15(e) and 15d - 15(e) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 dated November 12, 2003.
32.1	Certification from the Chief Executive Officer of Bingo.com, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 dated November 12, 2003.
32.2	Certification from the Chief Financial Officer of Bingo.com, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 dated November 12, 2003.

		BINGO.COM, INC.
		(Registrant)
Date:	November 12, 2003	/S/ T. M. Williams
		T. M. Williams, Chairman of the Board, Chief Executive Officer, President and Secretary (Principal Executive and Accounting Officer)
		/S/ H. W. Bromley
		H. W. Bromley, Chief Financial Officer (Principal Accounting Officer)

PART I - FINANCIAL INFORMATION

ITEM 1. Financial Statements.

1. Basis of Presentation:

2. Going Concern:

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.

PART II - OTHER INFORMATION

ITEM 1. Legal Proceedings

ITEM 3. Defaults Upon Senior Securities

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

ITEM 5. Other Information

ITEM 6. Exhibits and Reports on Form 8-K

SIGNATURES

EXHIBIT 31.1

ITEM
1.
Financial Statements.

1.
Basis of Presentation:

2.
Going Concern:

ITEM 3.
Quantitative and Qualitative Disclosures About Market Risk.

ITEM
1.
Legal Proceedings

ITEM
3.
Defaults Upon Senior Securities

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

ITEM
5.
Other Information

ITEM
6.
Exhibits and Reports on Form 8-K

EXHIBIT
31.1