Troubled Parlay Entertainment to sell assets

06 May 11

Online bingo platform provider Parlay Entertainment Inc. has appointed BDO Canada Limited to assist the company in a restructuring process, with MPProjects Assets S.A making an offer to purchase substantially all of the company's assets.

Parlay said that it has appointed BDO Canada to act as its proposal trustee in the filing of a notice with Ontario’s Superior Court of Justice, pursuant to Canada’s Bankruptcy and Insolvency Act.

As part of the filing, Parlay has agreed to borrow from MPProjects Assets S.A an aggregate amount of up to CAD$500,000 by way of draw down credit financing to “provide MPProjects with a second ranking charge encumbering the universality of Parlay’s property wherever located.”

As part of its services, BDO will assist Parlay in its restructuring, with the company considering a number of strategic options including the possibility of an offer for the shares of the company or an offer for the purchase of all or substantially all of the company's assets.

Parlay said that MPProjects has expressed an interest in making an offer to purchase substantially all of the company's assets and has provided a deposit with BDO in the amount of $100,000 as evidence of its intention to do so.

Yesterday the Toronto Stock Exchange issued a trading halt to Parlay’s shares after the company failed to file its audited consolidated financial statements with the Canadian securities regulators as required to do so by May 2nd.

Parlay said that it anticipated that its shares would be suspended from trading until such time that the deficiency can be remedied.

In its most recent financial statements for the third quarter of 2010, Parlay reported a 15 per cent drop in revenues to CAD$0.67m as the company continued to struggle to replace revenues following the loss of two of its largest customers including St. Minver which moved all 80 of its online bingo sites to parent company G2, while NetPlay TV also migrated all of its gaming services to Playtech.

Shares in Parlay Entertainment Inc. (Co. Profile) (TSX:PEI) are currently trading at $0.13 per share in Toronto today following the announcement.

Parlay Entertainment Announces Restructuring and Other Matters

All amounts in Canadian Dollars

OAKVILLE, CANADA— May 06, 2011

The Board of Directors of Parlay Entertainment Inc. ("Parlay" or the "Company") (TSX VENTURE:PEI - News), a developer of online gaming technologies, announced today that it has appointed BDO Canada Limited ("BDO") to assist it in a restructuring and to act as its Proposal Trustee in the filing of a Notice of Intention to make a Proposal to its creditors (the "BIA Filing") with the Superior Court of Justice, Province of Ontario, pursuant to the Bankruptcy and Insolvency Act (Canada) (the "BIA").

As part of the BIA Filing, the Company advises that it has agreed to borrow from MPProjects Assets S.A. ("MPProjects"), an aggregate amount of up to $500,000 by way of draw down credit financing (the "Credit Agreement") such financing to provide MPProjects with a second ranking charge encumbering the universality of Parlay's property wherever located.

As part of its services, BDO will assist Parlay to restructure and such restructuring will consider a number of strategic options, including the possibility of an offer for the shares of the Company or an offer for the purchase of all or substantially all of the Company's assets. The Company advises that MPProjects has expressed an interest in making an offer to purchase substantially all of the Company's assets and has provided a deposit with BDO in the amount of $100,000 as evidence of its intention to do so.

The Board of Directors also advises that Parlay has not filed its annual audited consolidated financial statements in accordance with the requirement to do so by May 2, 2011 (the "Deficiency"), with the Canadian securities regulators. As such, the Company anticipated that its shares would be suspended from trading until such time that the Deficiency can be remedied and the Cease Trade Order was issued on May 5, 2011.

The Board of Directors will update shareholders on both matters as soon as it is appropriate to do so.

About Parlay Entertainment

Parlay Entertainment Inc. is one of the pioneers and technology leaders in the online gaming industry. As the inventor and holder of Internet bingo patents, Parlay was the first company in the world to develop and deploy a commercial Internet bingo product. Parlay's head offices are located in Oakville, Canada. Parlay is licensed or certified to conduct business in Alderney, the United Kingdom and the Isle of Man.

Contact:

Scott F. White
Parlay Entertainment Inc.
+1 (905) 337-6505
swhite@parlaygroup.com

David Callander
Parlay Entertainment Inc.
+1 (905) 337-6516
dcallander@parlaygroup.com

Ken Pearl
BDO Canada Limited
Vice President
(416) 369-3063
kpearl@bdo.ca

Blair Davidson
BDO Canada Limited
President
(416) 369-3112
bdavidson@bdo.ca

For more information on Parlay solutions and services, please visit our Web site at http://www.parlaygroup.com.

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This document may contain statements about expected future events and/or financial and operating results of Parlay Entertainment Inc. that are forward-looking. By their nature, forward-looking statements require the Company to make assumptions and are subject to inherent risks and uncertainties. There is significant risk that predictions and other forward-looking statements will not prove to be accurate. Readers are cautioned not to place undue reliance on forward-looking statements as a number of factors could cause actual future results, conditions, actions or events to differ materially from the targets, expectations, estimates or intentions expressed in the forward-looking statements.

The TSX Venture Exchange does not accept any responsibility for the adequacy or accuracy of this release.


© 2011 by Parlay Entertainment Inc.