Zone 4 Play Reports Financial Results for Q2 2007

WILMINGTON, Delaware, August 14 /PRNewswire-FirstCall/ -- Zone 4 Play, Inc. ('Zone4Play' or the 'Company') (OTCBB: ZFPI), a leading developer of interactive gaming technology, today announced its financial results for the second quarter of fiscal year 2007 ended June 30, 2007:

Second Quarter 2007 Highlights

- Total revenues for the second quarter of 2007 were $251,132, an increase of 22% from $205,598 in the same period of 2006.

- Revenues for the first six months of 2007 were $541,965, an increase of 39% from $389,959 in the same period of 2006.

- Operating loss was $778,052, a decrease of 73%, compared to $2,719,436 in the second quarter of 2006.

- Non GAAP net loss was $560,348, a decrease of 56%, compared to $1,271,538 in the second quarter of 2006.

'We believe that strength of a company is tested primarily by its ability to cope with changes in the market conditions. Our focus during the second quarter has been to significantly reduce operating expenses in order to reduce our cash burn rate, and we are attempt to keep this trend in the next quarter as well, said Uri Levy, Zone4Play's Acting CEO and CFO." We've decreased the monthly operating expenses to approximately $150,000 per month and downsized our workforce to 16 employees. We are attempting to complete these changes without jeopardizing the company set goals which are to strength our partnership with Two Way Media in our cross platform fully legalized gambling operation in the UK as well as to maximize our multiplayer casino tournaments engine solution and our mobile gambling offering. We believe that the decrease in our operating expenses will continue in the next quarter as well.

Use of Non-GAAP Measures

In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Zone4Play uses non-GAAP measures of net income, which are adjustments from results based on GAAP to exclude non-cash stock-based compensation expenses in accordance with SFAS 123(R) and amortization of intangible assets.. Zone4Play's management believes that these non-GAAP financial measures provide meaningful supplemental information regarding the Company's performance that enhances management's and investors' ability to evaluate the Company's revenue and net income and to compare it with historical revenue and net income.

The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Management uses both GAAP and non-GAAP measures when evaluating the business internally and therefore felt it important to make these non-GAAP adjustments available to investors.

About Zone4Play:

Zone4Play, a leading developer of interactive software and technology for the betting and gaming industry, delivers cross-platform solutions that are built for mass participation gaming. Zone 4 Play is a software and technology provider to UK bookmakers, online gaming operators, betting exchanges and to US cable, satellite and hospitality service providers, delivering online solutions, mobile solutions, interactive TV solutions and participating SMS-TV solutions. For more information visit http://www.zone4play.com/ , the content of which is not part of this press release.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the 'safe harbor' provisions of the Private Securities Litigation Reform Act of 1995 and federal securities laws. These forward-looking statements are based on the current expectations of the management of Zone4Play only, and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. For example, when we say that we are attempting to keep the trend of reducing our operating expenses and cash burn rate in the next quarter , or that we are attempting to complete these changes without jeopardizing the Company's set goals, we are using forward looking statements. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: changes in technology and market requirements; decline in demand for Zone4Play's products; inability to timely develop and introduce new technologies, products and applications; loss of market share and pressure on pricing resulting from competition, which could cause the actual results or performance of Zone4Play to differ materially from those contemplated in such forward-looking statements. Except as otherwise required by law, Zone4Play undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. For a more detailed description of the risk and uncertainties affecting Zone4Play, reference is made to Zone4Play's reports filed from time to time with the Securities and Exchange Commission.

ZONE 4 PLAY, INC. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS U.S. dollars (except share data) Six months ended Three months ended June 30, June 30, 2007 2006 2007 2006 Unaudited Revenues from software applications $ 541,965 $ 389,959 $ 251,132 $ 205,598 Cost of revenues 253,875 197,639 120,709 100,023 Gross profit 288,090 192,320 130,423 105,575 Operating expenses: Research and development 1,277,248 1,534,437 538,212 860,983 Selling and marketing 645,390 1,370,394 17,518 1,200,599 General and administrative 627,266 1,013,451 352,745 763,429 Total operating expenses 2,549,904 3,918,282 908,475 2,825,011 Operating loss (2,261,814) (3,725,962) (778,052) (2,719,436) Financial income (expenses), net (22,395) 6,188 (17,567) 3,519 Other income 38,042 - 14,032 - Minority interests in losses of subsidiaries 102,184 - 45,813 - Taxes on income - - - - Net loss $ (2,143,983)$(3,719,774) $(735,774)$(2,715,917) Basic and diluted net loss per share $ (0.07) $ (0.13) $ (0.02) $ (0.08) Weighted average number of shares of Common stock used in computing basic and diluted net loss per share 32,319,031 28,449,574 32,319,031 32,312,448 ZONE 4 PLAY, INC. AND ITS SUBSIDIARIES RECONCILIATION OF SUPPLEMENTAL FINANCIAL INFORMATION Six months ended Three months ended June 30, June 30, 2007 2006 2007 2006 Unaudited GAAP net Loss $(2,143,983) $ (3,719,774) $ (735,774) $ (2,715,917) stock-based compensation expenses in accordance with SFAS 123(R) 242,851 1,540,689 92,093 1,361,046 amortization of intangible assets 166,666 166,666 83,333 83,333 Non GAAP net Loss $(1,734,466) $(2,012,419) $(560,348) $(1,271,538) ZONE 4 PLAY, INC. AND ITS SUBSIDIARIES CONSOLIDATED BALANCE SHEETS U.S. dollars June 30, December 31 2007 2006 Unaudited audited ASSETS CURRENT ASSETS: Cash and cash equivalents $ 1,070,656 $ 3,019,282 Trade receivables 525,793 1,005,161 Other accounts receivable, prepaid expenses , and related parties 200,524 164,648 Total current assets 1,796,973 4,189,091 SEVERANCE PAY FUND 130,053 104,729 PROPERTY AND EQUIPMENT, NET 510,396 699,040 ACQUIRED TECHNOLOGY, NET 273,975 440,641 Total assets $ 2,711,397 $ 5,433,501 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Short-term bank credit $ - $ 16,750 Trade payables 158,637 436,342 Employees and payroll accruals 286,049 427,106 Accrued expenses and other liabilities 288,290 552,113 Total current liabilities 732,976 1,432,311 Call option 114,850 114,850 Accrued Severance pay 270,398 281,834 Total Long term liabilities 385,248 396,684 MINORITY INTEREST 36,190 138,374 COMMITMENTS AND CONTINGENT LIABILITIES STOCKHOLDERS' EQUITY : Common stock of $ 0.001 par value: Authorized: 75,000,000 shares at June 30, 2007 and December 31, 2006; Issued and outstanding: 32,319,031 shares at June 30, 2007 and December 31,2006, respectively 32,318 32,318 Additional paid-in capital 17,036,380 16,800,396 Accumulated other comprehensive loss (19,738) (18,588) Accumulated deficit (15,491,977) (13,347,994) Total stockholders' equity 1,556,983 3,466,132 Total liabilities and stockholders' equity $ 2,711,397 $ 5,433,501 Contact: Uri Levy +972-3-647-1884 Ext 105 investor@zone4play.com