Revenues for the third quarter of 2008 were $44.5 million which was a 64% increase over the third quarter of 2007 due primarily to the full consolidation of the Panama operation and increases generated by both existing and new operations. The net loss for the third quarter 2008 increased to a loss of $9.0 million from a net loss of $0.5 million for the same period in 2007. This was due primarily to non-cash unrealized foreign exchange losses, onetime costs associated with the NYSE Euronext listing application process, higher financing costs, project development costs, property pre-opening costs for the new Peru flagship casino and non-cash costs such as stock based compensation and non-controlling interests.

In light of the current world economic environment, which in some cases has negatively impacted the Company’s ability to secure project financing; the Company is taking a conservative approach regarding new project development. As a result, the Company has recently downsized its development organization. This may negatively impact the continuing growth of the Company. Nevertheless, during these difficult economic times, the Company will seek high-return projects with lower capital requirements, such as slot parlors, until such time that longer term financing is available.

In Panama, the Hotel Washington casino expansion in Colon was completed ahead of schedule on 17 May 2008 with 60 new slot machines. The expansion added 750 square meters of gaming space. Additionally, 73 slot machines were added at the Hotel Nacional in David, Chiriqui, along with a new Pirates Bar and Grill as part of an 883 square meter expansion that opened in August of 2008. The company has also installed 60 other slot machines in various other Panama locations, 40 of which were originally planned for Colon and 20 of which were originally planed for David. In the Hotel Soloy in May 2008 permission was obtained from the government to expand the casino by 150 machines and 400 square meters. The expansion has an estimated cost of $5.3 million and is scheduled to be completed during the first quarter 2009.

Thunderbird commenced its expansion project in Rizal, on the eastern side of Manila, and expects to complete in the first quarter of 2009. It will include an event center, additional food and beverage areas and gaming areas, including 163 new slot positions and 49 new table positions. The total investment is projected to be $13.2 million. In April 2008, the 36-room hotel and nine-hole golf course at Poro Point opened and there are plans to expand the existing casino at Poro Point to create an additional 1,000 square meters of gaming space that will offer 75 new slot machines and 42 new table positions along with expanded food and beverage operations. The estimated cost of this expansion is $7.4 million and is projected to open in the first quarter of 2009.

The company’s 22 acre “Tres Rios” resort project in the suburbs of eastern San Jose has received all required permits (environmental and construction) and has been under construction since early 2007. The Company and its affiliate, King Lion Network S.A., have invested approximately $14.5 million as of October 31, 2008 in the Tres Rios project including land acquisition costs, complete infrastructure development including roads around and through the property, bridges, a highway off-ramp and major entrance bridge, and the eight commercial lots comprising the entire Tres Rios property. Based upon the worldwide liquidity crisis and lack of available local bank financing, the Company has decided to suspend work on the 5-star hotel originally planned and has modified the project master plan to add a new, separate 4-star hotel at a significantly lower cost per hotel room.

Additionally, as previously disclosed, the Costa Rica executive branch has issued a decree scheduled to go into effect in December 2008 (barring legal or legislative action) which will limit new casinos to one slot machine per hotel room and one table game per ten hotel rooms at the associated hotel. As a result, future development in Costa Rica will be planned to maximize the number of hotel rooms in each project. This will directly affect the number of new gaming positions the Company can deploy in the Costa Rica market. Until there is a further change in the availability of bank financing in Costa Rica, or an equity partner is contracted, the Company will not pursue further development of the Escazu property.

The Company closed on a stock purchase agreement in September 2008 to acquire a controlling interest in its flagship property in Costa Rica. The stock purchase was made from the group of investors that had originally invested in this property in 2004 and had comprised a minority interest in the affiliate that operates this property. The Company previously owned a 42% interest in the affiliate and now owns 54% of this property, “Fiesta Casino - Holiday Inn Express” (formerly the Garden Court Hotel).

On July 1st, the company started operations in a new line of business in Guatemala called “Juego Novedoso” in two locations, Gran Plaza (43 positions) and Intercontinental (21 positions). This adds to the variety of the entertainment options that Thunderbird offers. With the increasing demand and success in the Intercontinental property, the company began in September 2008 the expansion of this existing location which is scheduled to open in December 2008. This expansion will increase the number of video lottery positions from 142 to 240 positions. Also Juego Novedoso will expand from 21 to 49 gaming positions and will include a small restaurant and entertainment area.

In Nicaragua the Bello Horizonte (Zona Pharaoh’s) project, previously announced, opened in late June 2008 and offers 826 square meters, 112 slot machines, 21 table positions and a 65 seat sports-themed restaurant called Ringside Restaurant and a sports book. The company is assessing the development of similar projects like the Zona Pharaoh’s operation. In addition, Thunderbird added 750 square meters of parking at Pharaoh’s Carretera Masaya. Due to the worldwide economic environment, the decision was taken to indefinitely put on hold the approximately $9 million Masaya casino project.

The company flagship Fiesta Casino in the Thunderbird Hotel Las Americas Suites property in Peru opened on September 19, 2008. The 5,176 square meter entertainment venue opened with 414 slot machines and 188 table positions, including the country’s largest Texas Hold’em room and luxurious VIP lounges. Thunderbird’s trademark “Salsas” bar, restaurant and floor show features local and international artists on a daily basis. Due to the worldwide economic environment, the two additional full entertainment casinos planned in two of our properties (Las Americas Pardo and El Pueblo) which were scheduled to start construction in the fourth quarter of 2008 will be delayed until more certainty exists regarding its financing. Management is currently evaluating the initial results of the flagship Fiesta Casino in the Thunderbird Hotel Las Americas Suites property in Miraflores prior to making any further investment in the Miraflores area.

The company took over operations of a small casino and a slot parlor in Lodz, Poland via its acquisition of the company Casino Centrum Sp. z o.o. A recent remodeling was completed at the end of the third quarter at these locations and expansion plans are being finalized for both properties and initiating the permitting process to be able to complete those expansions. The properties currently have 71 slot machines and 37 table positions and with the expansion anticipated for a second quarter 2009 completion will add approximately 41 slot positions.

In March 2008, Thunderbird entered into a series of agreements with a local Indian group to construct and jointly own a luxury resort in Daman, India, that will include a 177-room five-star hotel, 5,700 square meter casino, a 2,700 person event center and several restaurants and bars. The company will operate the event center, restaurant, bars, and hotel under a long-term management contract and will lease space to a third-party casino operator. Thunderbird holds 50% equity in Daman Hospitality Private Limited (DHPL), a company incorporated under the laws of India that will also build and lease, on a long term basis, facilities to an Indian owned and operated company that is eligible to operate the area’s first gaming license under the 1976 Gambling Act of Goa, Daman & Diu. (E-11.25.08)

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