Chartwell Technology Inc.
INTERIM REPORT AND CORPORATE UPDATE
                                                 
Calgary, AB … 
October 2, 2000, 

    Chartwell Technology Inc. (CWH.V) a leading developer of games and entertainment content for the Internet, today announced its financial results for the nine months ended July 31, 2000.

    “Although we are a relative newcomer to this industry we have developed a premier product and unique business model aimed at positioning our technology in front of what we believe will be a tremendous growth phase for both Internet gaming and pure entertainment content”, states Darold H. Parken, President and CEO of Chartwell.  “We expect consolidations in some market segments and significant expansion in others such as Europe and Asia.  We intend to capitalize on both trends through our dedication to leading-edge technology development and the powerful relationships we are establishing.”  
 

Corporate Highlights 
    During the third quarter ended July 31, 2000 Chartwell has focused on the expansion of our technical, marketing and customer support teams and the development of our new software products.  Version 1.0 of our Java Bingo is scheduled for a fourth quarter release and a powerful Version 2.0 of our Java Casino software has been completed.  While we continue our dedication to new software development, the completion of these new version releases will allow us to focus on the development of new markets in which we have made significant inroads.  We expect to announce several important strategic relationships and software licensing agreements during our fourth quarter.

    During the first quarter of fiscal 2000 Chartwell developed a unique business model and plan for the Internet gaming and entertainment software business which we originally entered in fiscal 1999.  Our successful equity financings, completed in the second quarter, have permitted the planned expansion phase of our business during the third quarter which in turn has produced the product base and strong team of people required to achieve our sales and strategic alliance objectives for the fourth quarter. 

 

Financial Highlights
    Revenues for the nine month period were $689,230, an increase of 369% over the corresponding period of the previous year.  The majority of revenues were generated by GamingTech through software licensing and royalty fees.  Expenses for the period were
$2,298,275, an increase of 150% over the prior year.  The increase in expenses is attributed to a significant ramp up in operations with a large majority of these expenses related to research and development.  

    Chartwell posted a loss of $1,609,045 for the period compared with a loss of $1,334,091 in the corresponding period of the prior year.  A significant portion of our loss for the period represents an investment in software development which expenses are not
capitalized.  Working capital at the end of the period was $9,280,683.

 

Business Expansion
During the third quarter we initiated a substantial expansion of the company including new software development and Internet delivery infrastructure together with highly qualified additions to our dedicated team which now numbers 35.  In June we announced
the appointment of Don Harold as our new Vice President of Software Development and we are very pleased to announce the appointment of Mr. Andrew Smith as Chartwell’s Technical Director.

    Andrew brings a wealth of technical and software development expertise to the Chartwell team. From his extensive background as a System Architect, Technical Lead and Project Manager in numerous Internet based projects and products, Andrew has developed an acknowledged leadership in many of the key technologies employed by Chartwell including Java, communications, security, and object oriented software development techniques. In his role as Technical Director, Andrew will lead Chartwell's technical direction and will play a significant role in building on Chartwell's leadership position in gaming and entertainment software.

 

Software Product Development
    Our most significant development efforts during the quarter were focused on the completion of our Version 2.0 casino software.  This latest release of the Chartwell Online Casino games features significant enhancements to all aspects of our industry leading
software.  As well, European Roulette and integrated Chat are new additions to our extensive gaming solutions.

     Game play has been greatly enhanced through the addition of dealer callouts, detailed game tips, online help and audio features. Players will also enjoy a richer graphic experience on all games along with superior game animation.

    We have also made advances in our systems architecture resulting improved system security, reliability and performance. Chartwell games and casino sites are fully customizable and can be seamlessly integrated with existing corporate systems and web sites.  These are key elements to our marketing strategy.

    We are nearing the commercial release of our Java Bingo product which includes such features as; multi-play chat, progressive jackpots, bingo caller, up to 100 cards per player and more.  The first two licenses of this new product have been completed and a
full marketing launch is scheduled for the fourth quarter.  

    Chartwell plans to license its Java Bingo as a stand alone product which will provide additional revenue from licensing and royalties. The online bingo market is currently experiencing exponential growth. We plan to capture a significant portion of this tremendous market with our premier bingo product.  

    Chartwell has also developed an online version of Lotteria,  a very popular Latin American pictorial version of bingo.  The beta release of this new product has been completed and a master licensing agreement has been concluded to facilitate the Version 1.0 release of Lotteria during the fourth quarter.
 

Marketing
    Chartwell will be exhibiting at the gaming industry’s premier event, The World Gaming Congress & Expo 2000 in Las Vegas on Oct 18-20, 2000. Last year’s show attracted a record breaking 25,000 gaming, hospitality and entertainment executives and will provide
an excellent forum in which to showcase our new products.

    Chartwell will also be attending the Virtual Gaming and Wagering Forum on October 2-3, 2000 and the European Interactive Gaming 2000 conference on November 29-30, both  in London, England.  These exhibitions are part of our strategy to expand our
international presence and market penetration.

 
Outlook
    We are nearing the completion of arrangements for the licensing of our software in two new market segments, online information portals and the online presence of the traditional entertainment industry.  We expect to be in a position to announce these agreements before our fiscal year end of October 31.  These are very significant steps in penetrating two market segments which we believe will represent tremendous growth opportunities going forward.  These relationships, together with the previously announced Victor Chandler Group alliance, will complete the initial targets of our business plan and leave us well positioned to begin an aggressive expansion in new large market areas which is underway.

    We are confident that the fourth quarter will see the completion of several other important contracts for Chartwell resulting in relationships and key market penetration which will provide a strong base for our planned expansion.

 

About Chartwell
    Chartwell Technology Inc. specializes in the development of leading edge games and entertainment content for Internet and Intranet deployment by operators of interactive websites and virtual communities. Chartwell’s software products and games are designed for deployment in gaming, entertainment, advertising and promotional applications.

Chartwell invites you to preview and play our games at: www.chartwelltechnology.com.

For further information, please contact:

Chartwell Technology Inc.
Darold H. Parken, President
(877) 261-6619 or (403) 261-6619
dhp@chartwelltechnology.com

David Bajwa, Investor Relations
(877) 669-4180 or (604) 669-4180
info@chartwelltechnology.com

The Canadian Venture Exchange has neither approved nor disapproved the information contained herein. This press release contains “forward-looking statements” including management’s beliefs, expectations or projections related to the Company’s business prospects, capital raising and secondary markets for the Company’s securities.  Actual results could differ materially from those set forth in forward-looking statements.  You are
cautioned against placing undue reliance on the forward-looking statements.


 

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