NEW YORK and LONDON, April 9, 2007 (PRIME NEWSWIRE) -- Electronic Game Card, Inc. (OTCBB:EGMI) ("EGC"), the creator of the Electronic GameCard(tm), today reported financial results for the year ending December 31, 2006. Results for 2006 reflect the company's strategy of repositioning itself for profitable growth going forward while fully utilizing the company's proprietary technology platform. During the course of the last twelve months the company has expanded its portfolio of games from 12 to 17 titles, with a further seven games in development, increased its IP portfolio to eight filed patent applications, and repositioned the company's sales strategy. The benefits of these actions are expected to become apparent during the course of the current fiscal year.
A company spokesperson commented, "2006 was a transitional year as the company increased focus on product development while reducing overhead and pursuing a partnering strategy for distribution of our proprietary products. The benefits of this will become apparent as early as first quarter 2007 as we commence meaningful penetration of our various target markets in conjunction with channel partners. This re-positioning will facilitate profitable growth going forward. During last year our operating loss decreased from ($0.15) a fully diluted share to ($0.03) a fully diluted share an improvement of 400 percent. For the current year the company is projecting earnings between $0.035 to $0.045 per fully diluted share, as the company starts to reap the benefit of its re-positioning strategy."
Revenues for the full year 2006 increased 58 percent to $998.000 as compared to $632,000 December 31, 2005. Revenues growth was affected by production problems experienced at the beginning of 2006. These production issues were resolved within the first half of 2006, resulting in a more robust production process and product, generating a significant reduction in the GameCard failure rate to less than 0.2 percent per order. With issues of the past resolved, the Company was free to concentrate on its sales strategy. During 2007, the new Electronic Game Card, Inc management team expects to deliver a significant increase in revenues offering guidance for the current fiscal year in the range of $4.5 million to $6.0 million.
The Company reported a net loss for 2006 of ($0.22), which includes a ($0.17) one time charge related to the 2005 financing, compared to a net loss of ($0.26) in 2005.
As of March 31, 2007, Electronic Game Card, Inc. had approximately 44.2 million shares of common stock outstanding, with fully diluted share count totaling approximately 56.6 million. The aggregate proceeds if all options and warrants were to be exercised would approximate $5.4 million.
Highlights and Recent Developments
The fourth quarter for EGC was marked by entries into new markets, geographical expansion and financial restructuring.
Electronic Game Card, Inc. Completed Conversion of Promissory Notes to Preferred Stock
December 4, 2006, EGC obtained investors' permission to issue Series A Convertible Preferred stock. Under this agreement, EGC's outstanding Promissory Notes were automatically converted into the Series A Convertible Preferred Shares, thereby simplifying the capital structure of the company. The conversion released EGC from the cash drain of a large balloon to the holders of the Series that would have occurred in March 2007. With this concern eliminated, management will have more time to focus on sales and marketing to global lottery and gaming markets.
Kansas Lottery's Second Order for EGC Lottery Cards Went on Sale December 1, 2006
The second order from the Kansas Lottery for EGC Lottery GameCards was received by the Kansas Lottery and was immediately being distributed to sales locations. The $20 GameCard has been such a success with customers that Kansas has had to reorder within five weeks of receiving its first shipment of 120,000.
Electronic GameCard(tm) Signed Cantor Gaming for First U.K. Online Casino Campaign
November 2006, EGC announced that Cantor Gaming, a major provider of online mobile gaming services in the U.K., has ordered EGC Game Cards for a player recruitment campaign for one of their major casinos. Cantor Gaming is an affiliate of Cantor Fitzgerald, LLC, a global financial services company. A Cantor spokesperson said," EGC GameCards are a cost-effective and highly effective promotional device for achieving campaign revenue objectives."
EGC Signed Agreement to Sell GameCards to Norwegian Charity for Fundraising Event
October 2006, EGC announced that it has signed an agreement with the Norwegian Association of the Disabled to use EGC GameCards as a part of an upcoming fund raising and promotion.
EGC's First Exhibit at North American Association Show
EGC attended its first North American Association of State and Provincial Lotteries conference and trade show on October 11 to 13th in Chicago. This conference is known to be an educational platform for the industry, offering a venue for participants to unveil new concepts and ideas.
First U.K. Casino to Run EGC GameCard Promotion
October 10, 2006 EGC announced that Aspers Newcastle casino, owned by Aspers Group Limited, signed an agreement to use EGC's Electronic GameCards for a fourth quarter promotion. Aspers Group is in the process of designing and building several more casinos in prime sites in the U.K. The Aspers Newcastle is located in the "The Gate," a large modern leisure complex which is the largest gaming venue in the north east of England.
About Electronic GameCard(tm), Inc.
Electronic GameCard(tm), Inc. (OTCBB:EGMI), develops, produces and markets the innovative Electronic GameCards(tm) to the state lottery, Indian casino, and promotional industry worldwide. The Company's lead product is the Electronic GameCard(tm), is a patent protected, credit card-sized pocket game combining proprietary technology of interactive capability with the unique "extended play" and "instant win" excitement.
The Electronic GameCard(tm) can be programmed to suit a variety of gaming and promotion applications. EGMI's client base is across the $100 billion global market of state and national lotteries, Gaming and Casinos, Indian Gaming and the expanding sales promotion and incentive markets. EGMI develops sales and marketing relationships with agents globally and has a joint venture with a major lottery focused U.S. listed corporation which owns approximately 4% of the EGMI common stock. For further information please visit www.electronicgamecard.com.
Certain statements in this news release may constitute "forward-looking" statements within the meaning of section 21E of the Securities and Exchange Act of 1934. The Company believes that its expectations, as expressed in these statements are based on reasonable assumptions regarding the risks and uncertainties inherent in achieving those expectations. These statements are not, however, guarantees of future performance and actual results may differ materially. Risk factors are listed in the most recent Annual Report on Form 10-KSB and Quarterly Report on Form 10-QSB filed with the Securities and Exchange Commission.