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new online poker entry:CYOP SYSTEMS INTERNATIONAL INC

Discussion in 'Casino Industry Discussion' started by mary, Jun 20, 2005.

    Jun 20, 2005
  1. mary

    mary Dormant account

    Form 10QSB for CYOP SYSTEMS INTERNATIONAL INC


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    12-May-2005

    Quarterly Report



    Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
    The following management's discussion and analysis of the Company should be read in conjunction with the financial statements and the related notes thereto included elsewhere in this quarterly report for the three months ended March 31, 2005. This quarterly report contains certain forward-looking statements and the Company's future operation results could differ materially from those discussed herein.

    We were incorporated on October 29, 1999 under the laws of the State of Nevada as Triple 8 Development Corporation to engage in any lawful corporate purpose. We changed our name to CYOP Systems International Incorporated on October 30, 2000.

    We have not been involved in any bankruptcy, receivership or similar proceedings.

    We have been primarily focused on developing our product for market launch. Management has financed most of our operations to date. Management will continue to fund our operations through shareholders loans until our equity financing is closed. We will satisfy cash requirements solely from funds loaned by management or family and friends or private investors until this time. However, management is not under any contractual obligation to provide continued funding. We will spend approximately $1/2 million in the next 12 months to maintain current operations at our current expenditure rate; not including any marketing initiatives or expansion plans. Additional funds in the amount of $1.5 million will be expended for a complete launch of the Crediplay system including a full marketing budget. Executive and key personnel have executed management contracts and to ensure retention of executive and key personnel the Company will be paying fees and salaries or accruing them as necessary for 2005.

    We anticipate contracting additional human resources as required during the next 12 months. We not expect to acquire physical assets or significant equipment in the next 12 months by leasing or purchasing in order to fulfill certain agreements . We will not be performing any significant research and development in the next 12 months as our pay for play software is complete and tested.

    We launched our first pay-for-play online video game, Urban Mercenary in February 2001. In March 2001, the Company secured the Canadian Imperial Bank of Commerce as the Company's merchant account processor. Merchant processors now include Banner Bank.

    In September 2002, we launched a suite of free and pay for play games including card, strategy, arcade, sports and multiplayer games, terminating our licensing contract with Bingo.com. These games are licensed from third-partys and the company continues to talk to and discuss arrangements with third party game developers to ensure leading edge games are available on the proprietary site You must register/login in order to see the link. for our members.

    In order for our Company to expand it's operations and realize profits from pay for play online video gaming we are actively signing up affiliate companys and pursuing strategic acquisitions and partnerships that bring internet traffic and more games to be integrated into our existing suite of games. Until we increase our Company's exposure and attract players to our website and/or complete strategic acquisitions and partnerships we cannot expect large volumes of players for our online pay for play video game. Revenues will be derived from licensing fees from third parties that already have an established community and significant traffic to their web sites and from ad-serving.



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    Liquidity and Capital Resources
    The Company does not yet have an adequate source of reliable, long-term revenue to fund operations. As a result, the Company is reliant on outside sources of capital funding. There can be no assurances that the Company will in the future achieve a consistent and reliable revenue stream adequate to support continued operations. The Company has secured a source of capital funding, as an equity funding with regulatory clearance of the SB-2 registration statement granted with the August 12, 2004 filing of the SB-2/A.

    The Company had cash and cash equivalents of $143,465 at March 31, 2005 and a working capital deficit of $(1,821,492) with the deficiency arising primarily from $1,502,467 in loans from directors and accrued compensation for executives, compared to a working capital deficit of ($1,370,949) at March 31, 2004 to satisfy requirements for operations for the same period ending March 31, 2004. This reflects the continued commitment by management with an increase of advancing shareholder loans to cover the cost of operations.

    During the three month period ended March 31, 2005, the Company used cash of $251,107 in operating activities compared to using $191,871 in the prior period ended March 31, 2004. This is a reflection of primarily three things; significant legal expenses and corporate finance fees incurred in connection with the equity financing being undertaken and consulting fees now being accrued if not paid.

    Net cash provided by financing activities for the three month period ending March 31, 2005 was $375,122 for the period originating from common shares purchased by Cornell Capital, LP, a further promissory note from Cornell Capital, LP and settlement of their convertible debenture which compares to $191,340 in net cash provided to the Company for the same period in 2004.

    Our future capital requirements will depend on a number of factors, including costs associated with development of our Web portal, the success and acceptance of our new games and the possible partnerships and/or acquisition of complementary businesses, products and technologies. We have sufficient cash and cash equivalents on hand to conduct our operations through the second quarter of 2005.

    As disclosed herein the Company concluded an underwriting in the first quarter of 2004 with Cornell Capital LLP and the associated SB-2 was filed on March 1, 2004 and as amended on May 6, 2004, June 22, 2004, and August 5, 11, 12 and 16, 2004 on Edgar.

    The Companys consolidated financial statements have been prepared on a continuing operation basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.

    Results of operations for the quarter ended March 31, 2005 as compared to the quarter ended March 31, 2004.

    Revenue

    For the quarter ended March 31, 2005 the Company generated revenue of $2,670, from operations. The same quarter period ending March 31, 2004 generated revenues of $11,590. Current revenues are now from a wide variety of affiliates and the companys proprietary URL.



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    Cost of Sales
    Cost of Sales for the three-month period ended March 31, 2005 was $8,075 and for the same three-month period ended March 31, 2004 $13,115 all with various third parties marketing companies. This cost of sales is primarily sales and marketing expenses for co-brand advertising and keyword buys for our site and participation in trade shows.

    We expect to continue to incur sales and marketing expenses to further our efforts to increase traffic to our Web portal and develop licensee opportunities with gaming portals. These costs will include commissions, salaries, advertising, and other promotional expenses intended to increase traffic to licensees and improve revenue and translation costs. There can be no assurances that these expenditures will result in increased traffic or significant new revenue sources.

    General and Administrative expenses

    General and administrative expenses consist primarily of, legal and audit professional fees, insurance and other general corporate and office expenses, for the three-month period ending March 31, 2005 of $70,404. General and administrative expenses decreased by $26,117 for the three-month period ended March 31, 2004 from $96,521 for the same period ended March 31, 2004. This decrease is primarily due to cost cutting measures related to overhead.

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

    Consultants Fees

    Consultant fees consist of the companys contract labour primarily hi-tech services and management. Of the total $876,732 expense in the period $783,000 is attributed to S-8 stock issuances from the 2005 stock option plan as filed on February 24, 2005 on Form S-8. The balance is made of $38,500 accrued compensation and $55,200 in actual cash expenses.

    Interest Expenses

    Interest expenses of $33,342 is a reflection of accrued interest on shareholder and related party loans and compared to 2004 of $2,838 is a materially higher expense. This is a reflection of interest expense being accrued on shareholder loans and related party loans at a market rate.

    "CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. Except for historical matters, the matters discussed in this Form 10-QSB are forward-looking statements based on current expectations and involve risks and uncertainties. Forward-looking statements include, but are not limited to, statements under the following heading: "Managements Discussion and Analysis or Plan of Operations" the timing and expected profitable results of sales and the need for additional financing.
     
  2. Jun 20, 2005
  3. mary

    mary Dormant account

    Press Release Source: CYOP Systems International Inc.


    CYOP Launches TenSeatPoker.com Internet Poker Site Ready for Cash Play
    Monday June 20, 9:20 am ET


    BEVERLY HILLS, Calif.--(BUSINESS WIRE)--June 20, 2005--CYOP Systems International Inc. (OTCBB:CYOS - News), a leading provider of online gaming software, is pleased to announce it has launched its Internet poker software for play at You must register/login in order to see the link. operated through the company's UK subsidiary Red Felt Software Inc.
    The previously announced non-downloadable Texas Hold'em poker game at TenSeatPoker.com is ready for cash play, meaning players do not have to install large files on their computers. A secure transaction system has been developed with multiple layers of security and redundancy, allowing players to use multiple forms of payment.

    As reported by the UK Register: "In the two years since online poker first tempted punters, the industry has grown from $100,000 in gross rake per day in January 2002 to between a staggering global $2m and $2.5m."

    More than 200 online poker sites collectively are generating about $3 billion a year in revenues, equal to 60% of last year's $5 billion in gambling revenues from all of the Las Vegas "Strip." An estimated 1.7 million players are active online, meaning they've played in the past six months. And about 150,000 people play on an average day, according to PokerPulse.com.

    And, online gaming company PartyGaming PLC has set an indicative price range for its initial public offering at 111 pence to 127 pence a share, implying a market capitalization of GBP 4.76bn ($8.6bn) using the mid-point of the range. This will be enough to leap the company into the UK's benchmark FTSE 100 index on its debut.

    Mitch White, CEO of CYOP, commented, "We are happy to have taken CYOP's poker out of development and into revenue. The amount gambled on poker websites around the world in 2005 is estimated to be more than USD $60 billion, and the commission revenues around USD $3 billion. CYOP intends to begin marketing its software immediately to the end user and through business partnerships with existing gaming sites and portals."

    About CYOP

    CYOP is a developer and provider of online skill-games, poker and services for the online gaming industry. CrediPlay, CYOP's licensed application, is an online transaction platform that is based on charging a fee for each game played over the Internet. CYOP's central games portal, You must register/login in order to see the link., features virtual games where people play popular skill games against other players and compete in tournaments to win real money prizes. CYOP's Poker Software may be viewed at You must register/login in order to see the link., and its play for cash site at You must register/login in order to see the link..

    For more information please visit You must register/login in order to see the link..

    This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Exchange Act of 1934 and the provisions of the Private Securities Litigation Reform Act of 1995 and is subject to safe harbor created by these sections. Actual results may differ materially due to a number of risks, including, but not limited to, technological and operational challenges, needs for additional capital, risks associated with market acceptance and technological changes, risks associated with dependence on software providers, and risks associated with competition.

    Play Games. Win Games. Make Money. (TM)



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    Contact:
    CYOP Systems International Inc.
    Patrick Smyth, 310-248-4860
    This email is not visible to you.



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    Source: CYOP Systems International Inc.
     

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