<PAGE>
This press release contains statements of a forward-looking nature relating to
future events or future financial results of Uproar Inc. and iwin. Investors are
cautioned that such statements are only predictions and that actual events or
results may differ materially. In evaluating such statements, investors should
specifically consider various factors which could cause actual events or results
to differ materially from those indicated in such forward-looking statements,
including the risk that Uproar will not be successful in consummating the
transaction, implementing and integrating iwin's business into Uproar's
operations, and achieving the operating efficiencies necessary to obtain the
desired results of this transaction. Investors are directed to Uproar's reports
and documents filed from time to time with the Securities and Exchange
Commission and with EASDAQ for additional factors that should be considered
before investing in Uproar's securities.
*******************
THE FOLLOWING IS THE PRESS RELEASE FILED BY UPROAR INC. ON AUGUST 4, 2000, ON
FORM 8-K WITH THE SEC.
Contacts: (Media) (Investors)
Tara Blanco Dawn Berrie
Uproar Inc. Uproar Inc.
917/351-2891 917/351-2889
[email protected] [email protected]
-OR-
Todd Beck
iwin.com
310/415-2715
[email protected]
FOR IMMEDIATE RELEASE
---------------------
Note to editors: Digital photos of Uproar and iwin executives available.
UPROAR INC. AGREES TO ACQUIRE IWIN.COM, INC.
Merged Business Would Rank as 20th Most Visited Web Property
Moves Profitability Goal Forward to Q4 2001
NEW YORK, July 26, 2000 - Strengthening its position in the online entertainment
space, Uproar Inc. (Nasdaq: UPRO), producer of uproar.com, a leading online
entertainment destination, today announced that it has signed a definitive
agreement to acquire iwin.com, Inc., a leading games-for-prizes and Internet
lottery site.
According to Media Metrix, Uproar ranked as the 38th most visited Web property
with 5.8 million unique users, and iwin.com ranked 59th with 4.7 million unique
users in June 2000. This transaction will increase Uproar's unduplicated unique
user audience to approximately 9.2 million, which would place it as the 20th
most visited Web site on the Internet according to Media Metrix, May 2000.
<PAGE>
Under the terms of the definitive agreement, Uproar will acquire all outstanding
shares of iwin.com in a stock-for-stock transaction in which iwin.com
stockholders will receive an aggregate of approximately 14.7 million shares of
Uproar common stock.
"With access to one of the world's largest online entertainment audiences, an
extensive array of Internet marketing options and a large inventory of both
performance-based and impression-based advertising opportunities, Uproar is
poised to become an even more attractive platform for advertisers," said Kenneth
Cron, Chairman and Chief Executive Officer of Uproar. "Combining the two
companies broadens our content which we believe will dramatically increase our
unique user base and audience reach. We anticipate that this will greatly
enhance our ability to attract premier advertisers and significantly accelerate
our path to profitability."
"iwin and Uproar have very similar target audiences, but offer users
significantly different and extremely complementary content," said Fred Krueger,
Founder and CEO if iwin.com. "Uproar's strong multi-player games category blends
perfectly with iwin's games-for-prizes and Internet lottery content. Together,
we are going to deliver a full spectrum of online entertainment to a much
broader combined audience. This is truly a win-win proposition for our users,
advertisers, and stockholders."
Strong Management Team
Under the terms of the definitive agreement, Kenneth Cron will continue as
Chairman and CEO of Uproar, with Christopher Hasset as President and COO. Fred
Krueger, iwin's Founder and CEO, will be named Vice Chairman of Uproar and Scott
Kaufman, iwin's Vice President of Product Management will be appointed to
Executive Vice President of Product Development of Uproar. In addition, iwin.com
will be represented by three seats on Uproar's Board of Directors.
About Uproar
Uproar Inc. produces uproar.com, a leading online entertainment destination
offering games and game shows such as Family Feud, Puzzle A-Go-Go, Trivia Blitz
and Blowout Bingo, with chances to win prizes. With approximately 8.3 million
registered users and 5.8 million unique users per month, Uproar ranks among the
top 50 Web properties and reaches 7.6 percent of the online audience. The
uproar.com network has consistently ranked among the five stickiest networks on
the Internet. More than 39,000 sites are Uproar syndicate members and Uproar
sites are available in 14 languages worldwide. Headquartered in New York with
offices in San Francisco, London, Hamburg and Budapest, Uproar is publicly
traded on both the Nasdaq National Market system and the European Association of
Securities Dealers' Automated Quotation system.
About iwin.com
iwin.com is a leading games-for-prizes and Internet lottery site, offering free
games and prizes, as well as eXtremelotto, iwin's daily $1 million online
lottery drawing. iwin players accumulate points, called iCoins, to enter
drawings for major prizes such as exotic vacations, cash, electronics,
computers, gift certificates, luxury goods, jewelry, toys, and Hollywood-themed
prizes. iwin also operates lottoeXtremo.com, a Spanish-language version of
eXtremelotto. Headquartered in Los Angeles, iwin is completely advertiser
supported and specializes in the creation and execution of custom online
promotions for marketers across all product and service categories. iwin's
pure-play entertainment environment enables marketers to reach a massive
audience of entertainment seeking Internet users with compelling advertainment
content.
<PAGE>
This press release contains statements of a forward-looking nature relating to
future events or future financial results of Uproar Inc. and iwin. Investors are
cautioned that such statements are only predictions and that actual events or
results may differ materially. In evaluating such statements, investors should
specifically consider various factors which could cause actual events or results
to differ materially from those indicated in such forward-looking statements,
including the risk that Uproar will not be successful in consummating the
transaction, implementing and integrating iwin's business into Uproar's
operations, and achieving the operating efficiencies necessary to obtain the
desired results of this transaction. Investors are directed to Uproar's reports
and documents filed from time to time with the Securities and Exchange
Commission and with EASDAQ for additional factors that should be considered
before investing in Uproar's securities.
<PAGE>
This press release contains statements of a forward-looking nature relating to
future events or future financial results of Uproar Inc. and iwin. Investors are
cautioned that such statements are only predictions and that actual events or
results may differ materially. In evaluating such statements, investors should
specifically consider various factors which could cause actual events or results
to differ materially from those indicated in such forward-looking statements,
including the risk that Uproar will not be successful in consummating the
transaction, implementing and integrating iwin's business into Uproar's
operations, and achieving the operating efficiencies necessary to obtain the
desired results of this transaction. Investors are directed to Uproar's reports
and documents filed from time to time with the Securities and Exchange
Commission and with EASDAQ for additional factors that should be considered
before investing in Uproar's securities.
*******************
Contacts: (Media) (Investors)
Tara Blanco Dawn Berrie
Uproar Inc. Uproar Inc.
917/351-2891 917/351-2889
[email protected] [email protected]
FOR IMMEDIATE RELEASE
---------------------
UPROAR REPORTS SECOND QUARTER RESULTS
Company Beats Analyst Operating Results Expectations by $.10 per share
NEW YORK, July 27, 2000 - Uproar Inc. (Nasdaq/EASDAQ: UPRO/UPROrs) today
reported its financial results for the second quarter ended June 30, 2000.
Revenues for the quarter were $6.9 million, a 354 percent increase over the
second quarter of 1999. Pro forma net loss, excluding depreciation and
amortization, was $7.5 million or ($.27) per share compared with $5.5 million or
($.26) per share for the quarters ended June 30, 2000 and 1999 respectively.
On a GAAP basis the company reported a net loss of $10.5 million or ($.38) per
basic and diluted share for the quarter ended June 30, 2000 compared with a net
loss of $7.1 million or ($.34) per share for the quarter ended June 30, 1999.
Included in the $10.5 million net loss for the quarter ended June 30, 2000 was
$3.1 million of amortization and depreciation including $2.5 million relating to
the company's agreement with Pearson Television.
"User time on Uproar grew by 47% during the quarter, while at the same time we
took steps to streamline our operations and improve our margins. As a result, we
exceeded earnings expectations," said Kenneth Cron, Chairman and Chief Executive
Officer of Uproar. "As we move forward, we will strive to develop our leadership
position in the online entertainment space while increasing profitability."
Audience Growth and Usage
o Uproar delivered 1.3 billion ad impressions during the second quarter, an
increase of 31% over the first quarter.
<PAGE>
o Uproar attracted an average of 5.5 million unique users per month during
the second quarter of 2000, according to Media Metrix. This represents a
13.4% increase over the company's average monthly unique user audience in
the first quarter.
o Users spent an average of 36.5 minutes each on Uproar sites in June,
according to Media Metrix. This places the Uproar network among the top 10
stickiest networks on the Internet, a position it has held since January
1999.
o Uproar grew its registered user database to approximately 8.3 million
cumulative registered users as of June 30, 2000.
Strategic Corporate Developments
o On April 13, 2000, Uproar entered into an exclusive multi-platform
licensing agreement with Pasetta Productions obtaining Internet, broadband,
mobile and interactive television rights to Catchphrase, a popular game
show property, for www.uproar.co.uk in the United Kingdom.
o On June 27, 2000, Uproar announced a strategic partnership and launched a
co-branded site with Zing.
o On April 12, 2000, Uproar entered into an e-mail permission marketing
agreement with LifeMinders.com.
o On May 10, 2000, Uproar entered into a licensing agreement with BigBallot
to offer themed polls, ballots and sweepstakes.
o On May 18, 2000, Uproar announced key management changes. Joel Wilhite was
appointed Chief Financial Officer, Founder Michael Simon became President
of International and Timothy Ewing was named Executive Vice President of
Programming and Product Development.
o In June 2000, Uproar made a strategic decision to focus on its core
strength of online entertainment and exit the e-commerce business. As a
direct result, the Uproar Store was closed.
o On July 26, 2000, Uproar announced it has agreed to acquire iwin.com, Inc.
in a stock-for-stock transaction in which Uproar will issue an aggregate of
approximately 14.7 million shares of common stock for all the stock of
iwin.com. The merged companies will have an unduplicated audience of 9.2
million unique users, which according to the latest Media Metrix data,
would make it a Top 20 web property.
"Our agreement to purchase iwin.com will move Uproar to the forefront of the
online entertainment industry," continued Ken Cron. "The merger will allow us to
deliver a full spectrum of online entertainment to an expanded audience, and
moves forward our target for profitability by one year to the fourth quarter of
2001."
<PAGE>
About Uproar
Uproar Inc. produces uproar.com, the leading online entertainment destination
offering games and game shows such as Family Feud, Puzzle A-Go-Go, Trivia Blitz
and Blowout Bingo, with chances to win prizes. With more than 8.3 million
registered users and 5.8 million unique users per month, Uproar ranks among the
top 50 Web properties and reaches 7.6 percent of the online audience. The
uproar.com network has consistently ranked among the five stickiest networks on
the Internet. More than 40,000 sites are Uproar syndicate members and Uproar
sites are available in 14 languages worldwide. Headquartered in New York with
offices in San Francisco, London, Hamburg and Budapest, Uproar is publicly
traded on both the Nasdaq National Market system and the European Association of
Securities Dealers' Automated Quotation system.
This press release contains statements of a forward-looking nature relating to
future events or future financial results of Uproar. Investors are cautioned
that such statements are only predictions and that actual events or results may
differ materially. In evaluating such statements, investors should specifically
consider various factors which could cause actual events or results to differ
materially from those indicated in such forward-looking statements, including
the risk that Uproar will not be successful in seeking opportunities to grow and
matters set forth in Uproar's reports and documents filed from time to time with
the Securities and Exchange Commission.
(TABLES FOLLOW)
<PAGE>
Uproar Inc. and Subsidiaries
(Formerly Uproar Ltd.)
Consolidated Statements of Operations
Three and Six Months Ended June 30, 1999 and 2000
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
----------------------------------------------------------------------------
1999 2000 1999 2000
----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues $ 1,511,927 $ 6,864,281 $ 2,509,008 $ 12,768,854
Cost of revenues (531,249) (2,096,640) (848,302) (4,264,375)
----------------------------------------------------------------------------
Gross profit 980,678 4,767,641 1,660,706 8,504,479
----------------------------------------------------------------------------
Sales and marketing 3,431,155 9,358,526 5,813,158 18,130,410
Product and technology
development 826,888 2,204,646 1,527,279 3,970,172
General and administrative 2,198,179 3,765,909 3,610,173 7,538,794
Amortization of intangible assets 1,519,807 1,514,711 3,035,613 3,037,300
----------------------------------------------------------------------------
Total operating expenses 7,976,029 16,843,792 13,986,223 32,676,676
----------------------------------------------------------------------------
Loss from operations (6,995,351) (12,076,151) (12,325,517) (24,172,197)
Other income (expenses):
Litigation settlement -- -- -- (350,000)
Foreign exchange gain (150,558) (9,068) (149,606) (77,965)
(loss)
Interest income 90,681 1,583,673 194,307 2,091,477
Interest expense (2,974) (28,806) (4,000) (29,906)
Other income (expense) (47,000) 4,193 (47,000) 3,566
----------------------------------------------------------------------------
Loss before income taxes (7,105,202) (10,526,159) (12,331,816) (22,535,025)
Provision for income taxes 40,205 9,565 45,004 21,605
----------------------------------------------------------------------------
Net loss $ (7,145,407) $(10,535,724) $(12,376,820) $(22,556,630)
============================================================================
Basic and diluted net loss per
common share $ (0.34) $ (0.38) $ (0.61) $ (0.85)
Weighted average number of
common shares
outstanding 20,803,266 28,009,733 20,346,202 26,622,856
============================================================================
SUPPLEMENTAL INFORMATION (a):
Pro forma net loss
excluding depreciation and
amortization (5,465,721) (7,457,471) (9,067,359) (16,508,394)
============================================================================
Pro forma basic and diluted net loss
per share excluding
depreciation and amortization (0.26) (0.27) (0.45) (0.62)
============================================================================
</TABLE>
(a) The above pro forma calculation uses principles different from generally
accepted accounting principles. Pro forma net loss excludes non-cash charges of
$3.1 million and $6 million for the three and six months ended June 30, 2000,
respectively, of which $2.5 million and 5 million relate to the Company's
relationship with Pearson Television. Pro forma net loss excluded non-cash
charges of $1.7 million and $3.3 million for the three and six months ended June
30, 1999, respectively, of which $1.5 million and $3 million relate to the
Company's relationship with Pearson Television.
<PAGE>
Uproar Inc. And Subsidiaries
(Formerly Uproar LTD.)
Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
December 31, June 30,
------------- -------------
1999 2000
------------- -------------
Assets (Unaudited)
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 15,135,742 $ 9,253,122
Short term investments -- 85,376,894
Restricted cash 604,275 603,408
Accounts receivable - net of allowance for doubtful
accounts of $271,000 and $396,000, respectively 3,767,769 6,233,329
Prepaid advertising 3,861,996 3,796,004
Other current assets 744,612 1,273,902
------------- -------------
Total current assets 24,114,394 106,536,659
------------- -------------
Property and equipment, net 5,031,429 9,205,069
Intangible assets, net 10,649,387 7,625,666
Other long term assets 173,426 412,025
Prepaid advertising, long term portion 2,847,005 948,999
------------- -------------
Total assets $ 42,815,641 $ 124,728,418
============= =============
Liabilities and stockholders' equity
Current liabilities:
Current portion of capital lease obligation $ 102,777 $ 194,745
Trade accounts payable 1,390,908 2,250,536
Accrued expenses and other current liabilities 4,065,969 4,574,382
------------- -------------
Total current liabilities 5,559,654 7,019,663
------------- -------------
Long term portion of capital lease obligation 51,681 183,753
Stockholders' equity:
Preferred stock, $.01 par value, 48,000,000
shares authorized, none issued -- --
Common stock, $.01 par value, 112,000,000
shares authorized; 23,971,948 and
28,020,609 shares issued and outstanding at
December 31, 1999 and June 30, 2000,
respectively 1,198,597 280,206
Additional paid-in capital 85,193,156 189,009,215
Accumulated deficit (49,149,339) (71,705,969)
Accumulated other comprehensive (loss) (38,108) (58,450)
------------- -------------
Total stockholders' equity 37,204,306 117,525,002
------------- -------------
Total liabilities and stockholders' equity $ 42,815,641 $ 124,728,418
============= =============
</TABLE>
