Letter from Netwinner Prez (No one else is going to get their cards)

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I got this from another group I am in. To our loyal Players: As President & COO, I want to take this opportunity to communicate candidly about the current status of our site and our plans for moving forward in 2008 and beyond. Since the launch of NetWinner in June of 2006, we have had the pleasure of giving away over $1.5 million in cash and prizes to over 20,000 lucky winners. Over that time, we have worked hard to provide new features, new ways to win, and improve our Players' experience. Unfortunately, we have also spent much of our last two years attempting to improve how we police fraudulent users who not only defraud us, but also defraud all of our honest Players. Our most recent statistics show that over 40% of Players redeeming for prizes have violated our Terms of Service sometime before redemption. We are truly saddened that such a significant number of fraudulent users have impacted our legitimate Player's winnings and our business at these levels. During the last six months, we have also experienced ongoing technical and business issues with our outsourced fulfillment provider of debit cards. These two major issues have become virtually insurmountable in ensuring the prompt fulfillment of prizes. As a result, we have been forced to temporarily suspend our debit card redemption option as we pursue new options for points and prize redemptions. But more importantly, like many other businesses and households, we have also been experiencing the challenges of the recent economic downturn. Together with the tightening of credit markets, this has significantly affected our revenue and our ability to take on additional debt required to continue to grow our business. These realities forced our management team and investors to make difficult choices. We had two options: shut the company down, or make adjustments to our business model that would allow us to move forward in new ways – with new games, new prizes, and new ways to win. The second option would allow Players to continue to have opportunities to win cash and prizes, and for us to remain a destination site for casual gamers on the Web. We have chosen to make necessary changes and move forward in new ways. But this choice is not without consequences – both to our Players and to our company. We are acutely aware that these changes may be unpopular with our Players and may even cause some Players to stop playing our games. For that I apologize personally. But for thousands and thousands of others, we will remain one of the most lucrative casual game sites on the Internet, continuing to give away over $50,000 in prizes every month. Our new model will no longer be a "rewards" based model, as many have come to perceive it. That is, time spent on our site is not directly correlated with an amount of money "earned". As a casual game site, our model will be more in line with other popular casual game sites. Players can earn instant cash wins as always and points may be redeemed for cash and prize drawings on a daily, weekly, and monthly basis. This levels the playing field for all our Players and substantially limits the ability of fraudulent users to convert points into cash. To best address the current fraud and operational challenges I've outlined, all existing redemption points for debit cards that have not been fulfilled will be doubled and refunded into each Player's account. For example, if an individual redeemed 25,000 points toward a debit card, 50,000 points will be deposited back into their account. These can now be redeemed for entries into any of our growing list of cash and prize drawings. By mitigating the amount of fraud we experience, we have revisited our policies that were designed and deployed to reduce that fraud. We are now able to dramatically increase and vary the number of daily plays allowed on our games and provide more frequent multipliers and other new promotions with even more new ways to win. We have also modified our fulfillment policy moving forward. All cash daily drawings will be fulfilled in 30 days or less, and all other prizes, including prize drawings and instant cash wins, will be fulfilled within 60 days. We recognize that the delays that occurred in the past were a major source of frustration for our Players. As we have been making strategic decisions and directions changes at our headquarters, we have not broadly disseminated them with all of our staff and volunteer moderators for confidential business reasons. Please understand that our support staff performed as best they could with the information provided them. Realizing that we have not performed as best we could in supporting our Players' requests, we have put new customer support processes and staff in place to improve our relationships with our Players. Our staff can be reached during normal business hours in the Eastern Time Zone at support@netwinner.com. We have made these decisions for the benefit of all our Players as well as the employees and partners of our company. Companies must constantly adapt and evolve as operating conditions change. It was necessary for us to do the same. It is our hope that these changes will create a more fair and exciting casual game environment for our existing and future Players who come to our site. I speak for our entire staff when I send my thanks to all our loyal Players for their commitment and support. Best regards, S. Allen Dean President & COO