Electronic Game Card, Inc (fka EGMIQ)

[Chance To See]

Trafelet’s Holdings per the 7/18/08 13D

http://www.sec.gov/Archives/edgar/data/1083036/000092963808000396/sc13delectronicgame15jul08.htm

I think this is the correct interpretation of the 13D. I don’t know how the holdings are divided between the various entities, but I think these are the totals.

Scroll down to the end of the 13D to the tables and footnotes.

 
  
 4,517,647 shares of common stock (before the recent sales) 
   960,000 warrants, each convertible at $.50 to one share of common stock, 
           expiring 3/24/10 
 2,851,686 Series A Shares, each convertible at $1.01 per share into about 
           1.485 shares of common stock.  If these shares aren’t converted  
           prior to March 15, 2010, they are redeemable for $1.50 per 
           share + unpaid dividends. 
           (Don’t know if this means the company must redeem them.)  

Trafelet never bought EGMI stock, but bought a large percentage of the Convertible Promissory Notes issued on 3/24/05. He started with 1,920,000 of Notes and received additional Notes as penalties on 4/6/05.

The Notes apparently came with 960,000 warrants convertible into one share of stock at $1.85 per share. The conversion price of the warrants was reduced to $.50 on 11/29/06 when the Notes were converted to Series A Convertible Redeemable Preferred Shares.

The common shares were received as follows:

 
  
 COMMON SHARES 
   488,835  penalty shares on 4/13/06 
   252,240  penalty shares on 6/14/06 
 3,776,572  penalty shares issued at the time of the conversion of the Notes 
            to Series A Shares on 11/29/06 
 - - - - - - 
 4,517,647 
 = = = = = =

The EGMI 10K

http://www.sec.gov/Archives/edgar/data/1083036/000114420408022595/v110409_10ksb-a.htm

NOTE 3 - SERIES A CONVERTIBLE REDEEMABLE PREFERRED STOCK

On November 29, 2006, the Company obtained the consent of the majority in interest of the investors in the private placement of Convertible Promissory Notes and Warrants issued March 24, 2005 and April 5, 2005 to exchange their Notes for Series A Convertible Redeemable Preferred Stock. The Note Holders exchanged $8,666,000 of 6% Notes due in March and April of 2007, convertible at $1.50 per share for 5,777,333 shares of Series A Convertible Redeemable Preferred Stock. The Series A Shares were issued for $1.50 per share and are convertible at $1.01 per share into 8,580,198 shares of Common Stock. Each share of Series A Convertible Redeemable Preferred Stock is redeemable on March 15, 2010 at the original issuance price of $1.50 plus all unpaid dividends, if not converted prior to that date.

At the time of the exchange of the Convertible Promissory Notes for the Series A Convertible Redeemable Preferred Stock, the Company issued 13,593,725 shares of Common Stock as additional penalty shares pursuant to the Registration Rights Agreement. It was agreed that these penalty shares were issued in lieu of any Non-Registration Statement Penalty shares that may have accrued and any other claims.

At the time of the exchange of the Convertible Promissory Notes for the Series A Convertible Redeemable Preferred Stock, the Company reduced the exercise price of the 2,888,667 warrants originally issued with the Convertible Notes in March and April of 2005 from $1.85 to $.50. On December 8, 2006, 172,508 shares of Series A Convertible Redeemable Preferred shares were converted into 256,200 shares of Common Stock.

During the year ended December 31, 2007, $824,432 of Series A Convertible Redeemable Preferred Stock was converted to 816,269 shares of Common Stock.