Electronic Game Card, Inc (fka EGMIQ)

[manny t]

.032 per basic share,.028 per diluted share.


Electronic Game Card Inc. Reports Third Quarter 2008 Earnings

Company's revenue increases 70 percent year-over-year and 22 percent quarter- over-quarter

NEW YORK and LONDON, Nov. 11 /PRNewswire-FirstCall/ -- Electronic Game Card, Inc. (OTC:EGMI) (BULLETIN BOARD: EGMI) ("EGC"), today reported financial results for the quarter ended September 30, 2008, marking the Company's seventh consecutive quarter of both year over year and sequential revenue and profit growth.

The Company reported revenues of $3.04 million, a 70 percent increase over the prior year third quarter level of $1.79 million and a 22 percent increase over second quarter 2008 revenues of $2.49 million. The Company reported comprehensive net income applicable to common stockholders for the third quarter of $1.69 million or $0.032 per basic share and $0.028 per diluted share versus net income of $818,000 or $0.019 per basic share and $0.015 per diluted share for the third quarter 2007 and net income of $1.34 million or $0.026 per basic share and $0.021 per diluted share for the second quarter 2008.

Operating income for the third quarter 2008 was $1.78 million compared to $912,000 for the comparable period of 2007 and $1.42 million achieved during the second quarter 2008. For the three months ended September 30, 2008, Electronic Game Card's gross profit margin was 74% of revenue. Operating expenses during third quarter 2008 totaled $525,000, an increase of approximately $142,000 over third quarter 2007 and $73,000 over second quarter 2008, primarily due to increased costs associated with new product development.

For the nine months ended September 30, 2008, Electronic Game Card revenues increased to $7.82 million, an 84 percent increase compared to revenues of $4.25 million reported during the comparable period in 2007. Comprehensive net income applicable to common shareholder significantly improved for the current nine month period to $4.32 million or $ 0.084 per basic share and $0.071 per fully diluted share, compared to net income for the previous year nine month period of $1.70 million or $0.038 per basic share and $0.032 per fully diluted share.

Cash and equivalents on September 30, 2008 were $7.93 million. Accounts receivable remained approximately flat with the prior second quarter 2008 at $2.69 million, representing a DSO (Days Sales Outstanding) of 80 days, which compares to a DSO of 91 days for the prior quarter three month period. As of September 30, 2008, the Company's current ratio was 7.3-to-1, up from the previous quarter level of 6.6-to-1 and compared to 4.2-to-1 for the previous year level. For the first time in the Company's history shareholder equity turned positive on December 31, 2007 and has consistently grown through September 30, 2008 to $7.9 million.

As of September 30, 2008, Electronic Game Card had approximately 53.2 million shares of common stock outstanding. The Company's fully diluted share count, assuming the exercise of all options, warrants and the common stock underlying the convertible redeemable preferred, would be 65.7 million, consistent with June 2008 quarter. The aggregate cash proceeds if all such options and warrants were to be exercised would total in excess of $2.8 million. The weighted average number of fully diluted common shares used in the calculation of third quarter 2008 fully diluted earnings per share was 61.3 million shares, reflecting the use of the treasury stock method and the exclusion of options, warrants and the convertible preferred, if anti- dilutive. As of September 30, 2008 the Company had net operating tax loss carry forwards in excess of $21.0 million that may be used to offset future taxable income through 2023.

"The third quarter marked the company's seventh consecutive quarter of profitable growth. Given this consistency together with our tight cost control discipline that has led to a strong and growing balance sheet, we are attracting high powered executive talent and noteworthy distribution partners. Our company has never been busier with meaningful growth opportunity," commented Lord Steinberg, executive chairman of Electronic Game Card, Inc.

"Our growth has been consistent and we anticipate delivering, another positive quarter at year end. We maintain our high degree of confidence in our $0.10 fully diluted earnings per share guidance for 2008. Next year our outlook strengthens as we not only continue to deliver the stable growth from our current business but we see new areas of additional opportunity and have already identified the management talent and distribution capability to act. We reaffirm our 2009 guidance of $0.14 per diluted share."

CONFERENCE CALL Conference Call Details:

Date/Time: Wednesday, November 12, 2008-10:00 a.m. (ET) Telephone Number: 888-713-4213 International Dial-In Number: 617-213-4865 Participant Pass code: 59995480 Internet Access: http://www.electronicgamecard.com/ or http://www.earnings.com/


It is recommended that participants phone-in at least 10 minutes before the call is scheduled to begin. Participants may pre-register for the call at - https://www.theconferencingservice.com/prereg/key.process?key=PFYGHG3KE

Pre-registrants will be issued a pin number to use when dialing into the live call which will provide quick access to the conference by bypassing the operator upon connection. A replay of the conference call in its entirety will be available approximately one hour after its completion by dialing 888-286-8010 (U.S.), 617-801-6888 (International) and entering the pass code 54363311 and on the Internet at http://www.earnings.com/.

Contact: Yvonne L. Zappulla Managing Director Grannus Financial Advisors, Inc.

212-681-4108

or

Roger Holdom Electronic Game Card, Inc.

[phone]

About Electronic Game Card. Inc.


Electronic Game Card Inc., (OTCBB: EGMI), develops, produces and markets innovative games to the promotional industry worldwide, toys and games, casinos and lottery. The Company's lead product is the EGC Electronic GameCard(TM), a unique credit card-sized pocket game combining patent-pending proprietary technology of interactive capability with "instant win" excitement. The "EGC 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, sales promotion, gaming and casinos, Indian gaming and state and national lotteries markets. EGMI develops sales and marketing relationships with agents and distributors globally and currently has agents and distributors in North America, United Kingdom, Ireland, Mexico, Italy, Sweden, Norway, Denmark, Finland, South Africa Australia, New Zealand and Japan.

For further information please visit http://www.electronicgamecard.com/

February 2008, Electronic GameCard(TM) received Gaming Laboratory International approval for security and product robustness. In July 2005, the Public Gaming Research Institute (PGRI) named the Electronic GameCard(TM) as a 2005 Lottery Product of the Year.

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.

... Financial Statements Follow ...


ELECTRONIC GAME CARD, INC.

CONSOLIDATED BALANCE SHEETS

September 30, December 31, 2008 2007 (Unaudited) ASSETS

Current assets: Cash and cash equivalents $7,926,163 $4,753,040 Accounts receivable 2,693,709 2,323,543 Deposit on inventory 70,071 70,071 Other receivables 169,078 92,100 VAT receivable 30,657 31,531 Deferred charges 76,238 190,595 Total current assets 10,965,916 7,460,880 Net property, plant and equipment 27,913 44,050 Intangible assets, net 269,377 183,034 Investments, at cost 5,134,564 2,886,427 Total assets $16,397,770 $10,574,391

LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT)

Current liabilities: Accounts payable $636,457 $659,891 Accrued liabilities 880,494 560,046 Total current liabilities 1,516,951 1,219,937 Deferred license fees 404,625 779,625 Total liabilities 1,921,576 1,999,562 Series A 6% convertible redeemable preferred stock, $.001 par value, 10,000,000 shares authorized; 6,485,071 and 7,582,806 shares issued and outstanding at of September 30, 2008 and December 31, 2007, respectively 6,549,922 7,582,806 Shareholders' equity/(deficit) Common stock, $.001 par value, 100,000,000 shares authorized; 53,205,975 and 48,011,851 and shares issued and outstanding at September 30, 2008 and December 31, 2007 respectively 53,206 48,012 Capital in excess of par value 29,876,745 27,264,272 Accumulated deficit (20,998,971) (25,463,568) Accumulated other comprehensive loss (1,004,708) (856,693) Total shareholders' equity 7,926,272 992,023 Total liabilities and shareholders' equity $16,397,770 $10,574,391


ELECTRONIC GAME CARD, INC.

Consolidated Statements of Operations (Unaudited)

For the For the Three Months Ended Nine Months Ended September 30, September 30, 2008 2007 2008 2007

Revenue $3,043,566 $1,785,330 $7,823,870 $4,250,224 Cost of sales 744,000 490,499 1,905,589 1,130,852 Gross profit 2,299,566 1,249,830 5,918,282 3,119,372

Operating expenses Sales and marketing 13,600 1,232 54,955 5,203 General and administrative 123,639 146,326 451,237 431,540 Consulting expenses 282,865 125,727 560,014 282,585 Salaries and wages 104,407 109,556 277,397 312,135 Loss from joint venture - - - 18,636 Total operating expenses 524,510 382,841 1,343,603 1,050,101

Income from operations 1,775,056 911,989 4,574,679 2,069,271

Other income (expense) Interest income 87,014 49,554 210,059 147,669 Interest expense (147,747) (153,205) (443,241) (488,866) Gain on termination of joint venture - - - 31,127 Gain on sale of investments - - 122,900 - Total other income (expense) (60,733) (103,650) (110,082) (310,069)

Net income $1,714,322 $808,339 $4,464,597 $1,759,201

Foreign currency translation loss (28,947) 9,289 (148,015) (58,520)

Comprehensive income $1,685,375 $817,628 $4,316,583 $1,700,628

Net income per common share (basic) $0.032 $0.019 $0.084 $0.038

Weighted average number of shares outstanding (basic) 52,041,416 44,168,683 51,604,503 44,168,683

Net income per common share (diluted) $0.028 $0.015 $0.071 $0.032

Weighted average number of shares outstanding (diluted) 61,326,487 53,453,754 60,889,574 53,453,754

DATASOURCE: Electronic Game Card, Inc.


CONTACT: Yvonne L. Zappulla, Managing Director, Grannus Financial

Advisors, Inc., [phone], ; or Roger Holdom,

Electronic Game Card, Inc., [phone],



Web site: http://www.electronicgamecard.com/



Manny