Electronic Game Card, Inc. Files 10-Q for Period Ending September 30, 2009
Press Release
Source: Electronic Game Card, Inc.
On 6:09 pm EST, Friday November 20, 2009
Buzz up! 0 Print.Companies:Electronic Game Card Inc.
IRVINE, Calif. and LONDON, Nov. 20 /PRNewswire-FirstCall/ -- Electronic Game Card, Inc. ("EGC") (OTC Bulletin Board: EGMI - News), filed its SEC Form 10-Q for the three-month and nine month periods ended September 30, 2009 after the close of the market today.
Related Quotes
Symbol Price Change
EGMI.OB 1.63 -0.01
{"s" : "egmi.ob","k" : "c10,l10,p20,t10","o" : "","j" : ""} As previously reported in a press release issued on November 12, 2009, the Company reported revenues for its third quarter of $4.2 million, a 39 percent increase over the comparable prior year period. In filing Form 10-Q, the Company revised its estimate of U.S. tax loss carry-forwards based upon having recently filed its 2008 US income tax return. Revenues reported in Form 10-Q for the periods ended September 30, 2009, and the amounts reported in the November 12 press release are unchanged, with expenses substantially unchanged. Both items are outlined in the table shown below.
As a result of including the tax provision, the Company reported third quarter 2009 net income applicable to common stockholders on its Form 10-Q of $1.7 million or $0.03 per fully diluted share as compared to its previously reported $2.9 million or $0.04 per fully diluted share. Included in the revised third quarter results is a provision for income taxes of $1.1 million, or 35 percent of pre-tax income.
The preparation of financial statements for any period requires management to make estimates based upon the best information available at the time. With the filing of the Company's U.S. tax return, management revised estimates of available tax loss carry-forwards available to offset estimated year-to-date income taxable in the U.S.
Similarly, for the nine months ended September 30, 2009, Electronic Game Card's comprehensive net income applicable to common shareholders was $5.5 million or $0.09 per fully diluted share as compared to its previously reported $6.6 million or $0.10 per fully diluted share.
Periods ended September 30, 2009 Three Month Period Nine Month Period
-------------------------------- ------------------ -----------------
Previously Previously
Reported Revised Reported Revised
---------- ------- ---------- -------
Revenue $4,238 $4,238 $10,246 $10,246
Income from Operations $2,515 $2,465 $6,114 $6,064
Pre-tax Income $2,857 $2,807 $6,596 $6,647
Provision for Income Taxes 0 $1,073 0 $1,073
Comprehensive Net Income $2,857 $1,734 $6,596 $5,473
EPS $0.04 $0.03 $0.10 $0.09
Kevin Donovan, Interim Joint Chairman and CEO commented, "As we continue to improve upon our organization from all fronts, we also intend to institute the most conservative of procedures. We are instituting our first provision for income taxes for this quarter. This figure is an estimate based on U.S. taxation on the entire worldwide income and, therefore, may be lower once we file our year-end tax statements in other jurisdictions where the company may apply its tax loss carry-forwards. We maintain our guidance for the full year of $0.14 which is based upon pretax figures."
Contact:
Yvonne L. Zappulla
Managing Director
Grannus Financial Advisors, Inc.
(212) 681-4108
yvonne@grannusfinancial.com
or
Kevin Donovan
Chief Executive Officer
Electronic Game Card, Inc.
(888) 341-3421
investor.relations@electronicgamecard.com
About Electronic Game Card, Inc.
Electronic Game Card, Inc., (OTCBB: EGMI - News), 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 and patent-pending proprietary technology of interactive capability with "instant win" excitement. The EGC Electronic GameCard(TM), Know-it-All QuizCard(TM), iQuizCard(TM), and ePLAYCards for Education are completely customizable and can be programmed to suit a variety of gaming, promotions, and education applications including skinned to popular licensed intellectual property brands in a variety of popular cultures in sports, music, movies, entertainment, fashion, history, geography, and many other genres.
EGMI's client base is across the $100 billion global market of, sales promotion, education, 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 www.electronicgamecard.com
This news release contains disclosures that are forward-looking statements. Forward-looking statements include statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as "continue," "efforts," "expects," "anticipates," "intends," "plans," "believes," "estimates," "projects," "forecasts," "strategy," "will," "goal," "target," "prospects," "potential," "optimistic," "confident," "likely," "probable" or similar expressions. These forward-looking statements are based on current expectations or beliefs and include, but are not limited to, statements about maximizing gross profit dollars, the Company's potential to achieve top and bottom line growth. Statements of historical fact also may be deemed to be forward-looking statements. We caution that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others: the company's ability to meet its obligations under existing and anticipated contractual obligations; the company's ability to develop, market, sell and distribute desirable applications, products and services and to protect its intellectual property; the ability and willingness of third-party manufacturers to timely and cost-effectively fulfill orders from the company; the ability of the company's customers to pay and the timeliness of such payments, particularly during recessionary periods; the company' ability to obtain financing as and when needed; changes in consumer demands and preferences; the company's ability to attract and retain management and employees with appropriate skills and expertise; the impact of changes in market, legal and regulatory conditions and in the applicable business environment, including actions of competitors; and other factors as may be discussed in the documents filed by the company with regulatory authorities, including without limitation, EGC's annual report on Form 10-K for December 31, 2008 filed with the Securities and Exchange Commission and any other filings that identify important risk factors that could cause actual results to differ from those contained in forward-looking statements. The company undertakes no obligation to review or confirm analysts' expectations or estimates or to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Financial Statements Follow
ELECTRONIC GAME CARD, INC.
CONSOLIDATED BALANCE SHEETS
September 30, December 31,
2009 2008
------------- ------------
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $12,696,691 $8,281,899
Marketable securities - 876,186
Accounts receivable 3,668,448 2,757,685
Deposit on inventory 1,214,333 51,833
Other receivables 162,757 120,109
VAT receivable 14,658 25,916
Common stock receivable 628,761 -
Deferred charges - 38,119
--------- ----------
Total current assets 18,385,648 12,151,747
---------- ----------
Machinery and equipment 70,794 68,900
Office equipment 60,425 58,078
Furniture and fixtures 1,118 1,017
Less accumulated depreciation (125,088) (106,398)
-------- --------
Net property, plant and equipment 7,249 21,597
-------- --------
OTHER ASSETS
Patents, net 593,111 258,321
Investments 8,087,470 6,497,470
----------- -----------
Total assets $27,073,478 $18,929,135
=========== ===========
LIABILITIES SHAREHOLDERS' EQUITY/(DEFICIT)
CURRENT LIABILITIES:
Accounts payable $769,578 $749,118
Accrued liabilities 1,358,264 268,748
--------- ---------
Total current liabilities 2,127,842 1,017,866
Deferred license fees - 279,625
--------- ---------
Total liabilities 2,127,842 1,297,491
--------- ---------
Series A 6% convertible preferred stock,
$.001 par value, 10,000,000 shares
authorized; 2,840,163 and 4,464,628 shares
issued and outstanding at September 30,
2009 and December 31, 2008, respectively 2,840,163 4,464,628
SHAREHOLDERS' EQUITY/(DEFICIT)
Common stock, $.001 par value, 100,000,000
shares authorized; 68,353,451 and
57,137,661 shares issued and outstanding
at September 30, 2009 and December 31,
2008, respectively 68,353 57,137
Additional paid in capital 36,772,260 33,318,440
Accumulated deficit (13,618,404) (19,192,706)
Accumulated other comprehensive loss (1,116,736) (1,015,855)
---------- ----------
Total shareholders' equity 22,105,473 13,167,016
---------- ----------
Total liabilities and shareholders'
equity $27,073,478 $18,929,135
=========== ===========
ELECTRONIC GAME CARD, INC.
Consolidated Statements of Operations
(Unaudited)
For the Three Months Ended For the Nine Months Ended
September September September September
30, 2009 30, 2008 30, 2009 30, 2008
--------- --------- --------- ---------
Revenue $4,238,061 $3,043,566 $10,245,698 $7,823,870
Cost of revenue 924,799 744,000 2,163,741 1,905,589
------- ------- --------- ---------
Gross margin 3,313,262 2,299,566 8,081,957 5,918,281
--------- --------- --------- ---------
Operating expenses:
Sales and
marketing 94,550 13,600 165,696 54,954
General and
administrative 256,276 123,639 619,751 451,237
Professional fees 408,219 282,865 986,868 560,014
Salaries and wages 89,047 104,407 245,728 277,397
------ ------- ------- -------
Total operating
expenses 848,092 524,511 2,018,043 1,343,602
Income from
operations 2,465,170 1,775,055 6,063,914 4,574,679
Other income
(expense):
Interest income 80,799 87,014 232,932 210,059
Interest expense (50,228) (147,747) (219,313) (443,241)
Gain on sale of
investments &
marketable
securities 542,704 - 569,769 122,900
------- --- ------- -------
Total other income
(expense) 573,275 (60,733) 583,388 (110,282)
Net income before
provision for
income taxes 3,038,445 1,714,322 6,647,302 4,464,597
Provision for
income taxes 1,073,000 - 1,073,000 -
--------- --- --------- ---
Net income $1,965,445 $1,714,322 $5,574,302 $4,464,597
Other comprehensive
(loss) gain:
Foreign currency
translation loss (231,331) (28,947) (100,881) (148,015)
Unrealized profit
on marketable
securities - - - -
--- --- --- ---
Comprehensive
income $1,734,114 $1,685,375 $5,473,421 $4,316,382
========== ========== ========== ==========
Net income per
common share
(basic) $0.03 $0.03 $0.09 $0.08
===== ===== ===== =====
Weighted average
number of common
shares outstanding
(basic) 65,109,353 52,041,416 63,046,824 51,604,503
========== ========== ========== ==========
Net income per
common share
(diluted) $0.03 $0.03 $0.08 $0.07
===== ===== ===== =====
Weighted average number
of common shares
outstanding
(diluted) 72,151,865 65,707,416 69,286,884 64,674,490
========== ========== ========== ==========
