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Electronic Game Card reports results

Revenues for the first quarter of 2007 were $990,000 which approximately equaled the revenues achieved during the entire year of 2006. The company's strategic plan to fully utilize its proprietary technology platform and reposition its sales strategy started to take form during the quarter. Electronic Game Card began expanding its addressable market beyond its U.S. lottery business to include gaming card promotion. Given the company's recent successful renegotiation of its exclusive distribution partnership with Scientific Games to cover the North American and Italian lottery markets, Electronic Game Card is freed to focus on broadening the use of the GameCard and aggressively address a number of significant industry opportunities it has begun to develop within the gaming and promotional markets.

The Company achieved profitability during the quarter reporting net income of $215,113 or $0.01 per share compared to a net loss of $1.9 million or $(0.08) for the first quarter of 2006.

Electronic Game Card's gross profit on revenue for the quarter ended March 31, 2007 was $735,000. Selling, general and administrative expenses (SG&A) declined during the first quarter 2007 to $331,000 as compared to first quarter 2006 at $549,000.

Cash and equivalents on March 31, 2007 were $2.8 million, a decrease of approximately $220,000 from the period ending December 31, 2006. Accounts receivable increased from $415,000 at year end 2006 to $981,000 first quarter 2007. As of March 31, 2007, Electronic Game Card had approximately 44.1 million shares of common stock outstanding, with fully diluted share count totaling 56.6 million. The aggregate proceeds if all options and warrants were to be exercised would approximate $5.4 million. At quarter end, the Company had a net operating tax loss carry forward of approximately $29.4 million that may be offset against future taxable income through 2023.

The physical design of the GameCard has been enhanced through modifications to circuit design, leading to a more robust product. Performance is constantly being reviewed to improve the GameCard still further. In addition to improved circuit design, the company is currently upgrading the MCU Body (chip) on a number of games, further enhancing reliability. Currently Electronic Game Card has a portfolio 17 games and anticipates introducing an additional 5 games over the next four quarters.

"Electronic Game Card has completed the turn around begun in the first quarter of 2006 and is now a fully commercial entity addressing a large and expanding market opportunity," commented a company spokesperson. "Having right-sized the company, and templatized the GameCard to potentially capture maximum gross margin, we are now prepared to meaningfully penetrate various target markets in conjunction with channel partners. Our goal over the next several quarters is to achieve production economies as we increase contract volumes, introduce new GameCard capabilities that could provide pricing flexibility and continue to fine tune our balance sheet. We anticipate consistent sequential quarterly growth in both revenues and profits. Now that we have finalized a licensing/royalty agreement with Scientific Games, we are able to refine our guidance for the current year projecting revenues of approximately $6 million which are projected to generate earnings per share of 4c.

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