UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB


  |X| QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
                                     OF 1934

                  FOR THE QUARTERLY PERIOD ENDED: JUNE 30, 2006

 |_| TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
                                     OF 1934

                         Commission file number000-25853

                           ELECTRONIC GAME CARD, INC.


        (Exact name of small business issuer as specified in its charter)


            Nevada                                         87-0570975
--------------------------------------------------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 Incorporation or organization)

                 19th Floor, 712 5th Avenue, New York, NY 10019
                    (Address of Principal Executive Offices)

                            (646) 723-8946 (Issuer's
                                telephone number)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [  ]

Traditional small business disclosure format    Yes [X]    No [  ]


         State the number of shares outstanding of each of the issuer's
              classes of common equity, as of the latest practical
                         date : July 31, 2006  26,845,799



<PAGE>


PART I


                            ELECTRONIC GAME CARD, INC

                          (A DEVELOPMENT STAGE COMPANY)
                           CONSOLIDATED BALANCE SHEET
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                     June 30,           December 31,
                                                                                       2006                2005
                                                                                   ------------         ------------
<S>                                                                                      <C>                    <C>

                                        ASSETS

CURRENT ASSETS

   Cash and cash equivalents ...................................................   $  4,224,173         $  5,544,331
   Accounts receivable .........................................................        201,172              100,250
   Deposit on inventory ........................................................        167,189               66,939
   Value Added Tax receivable ..................................................         22,234               33,715
   Deferred charges ............................................................      1,037,637            1,732,203
                                                                                   ------------         ------------

Total Current Assets ...........................................................      5,652,405            7,477,438
                                                                                   ------------         ------------

PROPERTY AND EQUIPMENT

   Plant and machinery .........................................................         73,721               22,474
   Office equipment ............................................................         61,725               60,302
   Furniture and fixtures ......................................................          1,275                1,166
   Less Accumulated depreciation ...............................................        (52,954)             (45,883)
                                                                                   ------------         ------------

Total Property and Equipment, Net ..............................................         83,767               38,059
                                                                                    ------------         ------------

OTHER ASSETS

   Investment in joint venture .................................................        148,786              148,786
   Investments .................................................................        188,754               88,754
                                                                                   ------------         ------------

TOTAL ASSETS ...................................................................   $  6,073,712         $  7,753,037
                                                                                   ============         ============



              LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT)

CURRENT LIABILITIES

   Accounts payable ............................................................   $    288,772         $    560,604
   Accrued liabilities .........................................................        950,370              430,411
                                                                                   ------------         ------------

Total Current Liabilities ......................................................      1,239,142            1,097,959
                                                                                   ------------         ------------

NON-CURRENT LIABILITIES

   Convertible note payable ....................................................      6,075,940            4,309,990
   Interest payable ............................................................        658,616              398,636
                                                                                   ------------         ------------
Total Non-Current Liabilities ..................................................      6,734,556            4,708,626
                                                                                   ------------         ------------
Total Liabilities ..............................................................      7,973,698            5,806,585
                                                                                   ------------         ------------


STOCKHOLDERS' EQUITY/(DEFICIT)
   Common stock, par value $0.001, 100,000,000 shares authorized, 26,845,799
   shares issued and outstanding as of June 30, 2006,
   26,131,513 shares issued and outstanding as of December 31, 2005 ............         26,847               26,132
   Additional paid-in capital ..................................................     21,639,809           21,640,514
   Accumulated deficit during development stage ................................    (22,895,969)         (19,049,521)
   Retained deficit ............................................................       (157,495)            (157,495)
   Currency translation adjustment .............................................       (513,178)            (513,178)
                                                                                   ------------         ------------

Total Stockholders' Equity/(Deficit) ...........................................     (1,954,986)           1,946,452
                                                                                   ------------         ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT) ...........................   $  6,073,712         $  7,753,037
                                                                                   ============         ============
</TABLE>

The accompanying notes are an integral part of these financial statements


<PAGE>


                            ELECTRONIC GAME CARD, INC

                          (A DEVELOPMENT STAGE COMPANY)
                      Consolidated Statements of Operations
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                            Three Months Ended              Six months Ended        From Inception
                                                         June 30,        June 30,         June 30,      June 30,    August 8, 2002
                                                          2006            2005            2006           2005      to June 30, 2006
                                                      -----------------------------------------------------------------------------
<S>                                                     <C>               <C>               <C>             <C>             <C>

Revenue ..........................................   $     201,172    $         --    $    353,317    $    136,620    $  1,072,459
Cost of sales ....................................         144,170             --         226,656         114,048         912,665
                                                      ------------    ------------    ------------    ------------    ------------
Gross Profit .....................................          57,002              --         126,661          22,572         159,794
                                                      ------------    ------------    ------------    ------------    ------------



Operating expenses

    Sales and marketing ..........................         30,642          96,609          50,041         150,045       1,680,404
    General and administrative ...................        246,880         258,578         414,234         646,782       3,379,370
    Consulting expenses ..........................        128,375         208,000         316,723         300,682       3,417,638
Salaries and wages ...............................         91,325         155,264         265,634         369,406       2,344,667
    Joint venture loss ...........................           --              --              --              --           851,214
    Compensation for issuance of warrants ........           --              --              --              --         4,099,852
                                                      ------------    ------------    ------------    ------------    ------------
Total Operating Expenses .........................        497,222         718,451       1,046,632       1,466,915      15,773,145
                                                      ------------    ------------    ------------    ------------    ------------

Net operating (loss) from operations .............       (440,220)       (718,451)       (919,971)     (1,444,343)    (15,613,351)


Other income (expenses)


    Foreign currency translation .................          62,274           7,192          61,639          (2,596)         (5,604)
    Late registration fee ........................              --              --              --              --        (430,411)
    Interest and finance charges .................      (1,529,121)       (112,799)     (2,988,116)       (197,160)     (6,801,683)
                                                      ------------    ------------    ------------    ------------    ------------
Net loss for continuing operations before taxes ..      (1,907,067)       (824,058)     (3,846,448)     (1,644,099)    (22,851,049)
                                                      ------------    ------------    ------------    ------------    ------------


Income Taxes .....................................              --              --              --              --            (455)
                                                      ------------    ------------    ------------    ------------    ------------
    Net Loss From Continuing Operations ..........      (1,907,067)       (824,058)     (3,846,448)     (1,644,099)    (22,851,504)
                                                      ------------    ------------    ------------    ------------    ------------
Discontinued operations
    Net loss from discontinued
    operations net of tax effects of $0 ..........              --              --              --              --          (8,138)

     Loss on disposal of discontinued
     operations net of tax effects of $0 .........              --              --              --              --         (36,327)
                                                      ------------    ------------    ------------    ------------    ------------
Total Loss From Discontinued Operations ..........              --              --              --              --         (44,465)
                                                      ------------    ------------    ------------    ------------    ------------
NET LOSS ........................................    $  (1,907,067)  $    (824,058)  $   (3,846,448)  $ (1,644,099)   $(22,895,969)
                                                     -------------   -------------   --------------   ------------    ------------

Per Share Information Basic and Diluted...........
        Continuing operations ....................   $      (0.07)   $      (0.03)   $      (0.15)    $     (0.07)
        Discontinued operations ..................             --              --              --               --
                                                     ------------    ------------    ------------     ------------
     Net (Loss) Per Common Share Basic and Diluted   $      (0.07)   $      (0.03)   $      (0.15)    $      (0.07)
                                                     ------------    ------------    ------------     ------------
Weighted Average Number of Shares Outstanding ....     26,488,656      25,007,781      26,127,211       25,007,781
                                                     ------------    ------------    ------------     ------------
</TABLE>


The accompanying notes are an integral part of these financial statements.


                                       2
<PAGE>


                            ELECTRONIC GAME CARD INC
                          (A DEVELOPMENT STAGE COMPANY)
                             CONSOLIDATED CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                     Cumulative
                                                                                       Since
                                                                                    April 6 2002
                                                        For the Six Months Ended    Inception of
                                                       June 30,        June 30,      Development
                                                        2006            2005           Stage
                                                     -----------    -----------    -----------
<S>                                                     <C>             <C>             <C>

CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss ........................................    (3,846,448)    (1,644,099)   (22,895,965)

Adjustments to Reconcile Net Loss to Net
Cash Used in Operating Activities:
Depreciation ....................................         7,071          9,930         52,953
Stock Issued for Expenses .......................            --             --        114,856
Compensation for Options/Warrants ...............            --             --      3,953,778
Joint Venture Equity Losses .....................            --             --        851,214
Interest Expense on options & warrants issued ...            --             --      3,753,843
Cashless exercise of Warrants ...................            --             --        148,060
Net Loss from Discontinued Operations ...........            --             --          8,036
Amortization of interest expense ................    17,659,950       154,225      17,659,950
Amortization of Deferred Charges ................       749,586             --        749,586
Loss on Disposal of Operations ..................            --             --         36,345
Change in operating assets and liabilities:
(Increase) Decrease in Accounts Receivable ......      (100,922)       (74,250)      (197,832)
(Increase) Decrease in Deposit on Inventory .....      (100,250)      (260,553)      (208,002)
(Increase) Decrease in Prepaid Expenses .........           765
(Increase) Decrease in Value Added Tax Receivable        11,481         18,794        (19,126)
Increase (Decrease) in Accounts Payable .........      (271,832)      (197,484)       209,967
Increase (Decrease) in Related Party Payable ....      (106,944)            --             --
Increase (Decrease) in Accrued Liabilities ......       519,969        (44,087)       937,250
Increase (Decrease) in Interest Payable .........       259,980        139,220        537,396
Increase (Decrease) in Unearned Revenue .........            --        193,220         (2,713)
                                                    -----------    -----------    -----------
  Net Cash Used in continuing activities ........    (1,167,359)    (1,705,029)   (10,337,368)
  Net Cash Used in discontinued activities ......            --             --          7,124
                                                    -----------    -----------    -----------
  Net Cash Used in operating activities .........    (1,167,359)    (1,705,029)   (10,130,244)
                                                    -----------    -----------    -----------
</TABLE>


                                       3
<PAGE>


                            ELECTRONIC GAME CARD INC
                          (A DEVELOPMENT STAGE COMPANY)
                             CONSOLIDATED CASH FLOWS
                                   (Unaudited)
(Continued)

<TABLE>
<CAPTION>
                                                                                     Cumulative
                                                                                       Since
                                                                                    April 6 2002
                                                        For the Six Months Ended    Inception of
                                                       June 30,        June 30,      Development
                                                        2006            2005           Stage
                                                     -----------    -----------    -----------
<S>                                                     <C>             <C>             <C>

CASH FLOWS FROM INVESTING ACTIVITIES:
Cash Acquired in Merger .........................            --             --          3,512
Purchase of Plant and Machinery Equipment .......       (51,247)           462        (72,552)
Purchase of Office Equipment ....................        (1,423)        (2,387)       (57,982)
Purchase of Furniture & Fixture .................          (109)            24         (1,259)


Investment in Probability Games .................      (100,000)            --       (188,754)
Investment in Joint Venture .....................            --          5,940       (956,499)
                                                    -----------    -----------    -----------
Net cash provided by investing activities .......      (152,799)         4,039     (1,273,534)
                                                    -----------    -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Common Stock ......................            --        424,616      7,839,511
Related party receivable ........................            --         23,153             --
Amount Loaned on Related Party Receivable .......            --             --        (58,882)
Payment on Related Party Payable ................            --             --         61,560
Amount Loaned on Note Receivable ................            --             --       (132,522)
Payment on Note Receivable ......................            --        142,116        143,568
Proceeds from Related Party Payable .............            --         97,500             --
Payment on Long-Term Note Payable ...............            --             --       (973,068)
Proceeds from Long-Term Note Payable ............            --             --        756,134
Proceeds from Convertible Notes Payable .........            --      7,911,400      7,947,200
                                                    -----------    -----------    -----------
  Net Cash Provided by Financing Activities                  --      8,598,785     15,583,401

Foreign Exchange Effect on Cash .................            --            541         44,575
                                                    -----------    -----------    -----------
 Net (Decrease) Increase in Cash .................   (1,320,158)     6,898,336      4,224,173

Cash at Beginning of Period .....................     5,544,331      1,082,558             --
                                                    -----------    -----------    -----------
Cash at End of Period ...........................     4,224,173      7,980,894      4,224,173
                                                    ===========    ===========    ===========
</TABLE>


The accompanying notes are an integral part of these financial
statements


                                       4
<PAGE>


                           ELECTRONIC GAME CARD, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      This summary of accounting policies for Electronic Game, Inc. (a
development stage company) is presented to assist in understanding the Company's
financial statements. The accounting policies conform to generally accepted
accounting principles and have been consistently applied in the preparation of
the financial statements.

Interim Reporting

      The unaudited financial statements as of June 30, 2006, for the three
month period, in the opinion of management, all adjustments (which include only
normal recurring adjustments) necessary to fairly state the financial position
and results of operations for the three months. Operating results for interim
periods are not necessarily indicative of the results which can be expected for
full years.

Nature of Operations and Going Concern

      The accompanying financial statements have been prepared on the basis of
accounting principles applicable to a "going concern", which assume that the
Company will continue in operation for at least one year and will be able to
realize its assets and discharge its liabilities in the normal course of
operations.

      Several conditions and events cast doubt about the Company's ability to
continue as a "going concern". The Company has incurred net losses of
approximately $22,950,969 for the period from April 6, 2000 (inception) to June
30,2006. The Company's future capital requirements will depend on numerous
factors including, but not limited to, continued progress in developing its
products, market penetration and profitable operations from sale of its
electronic game cards.

      These financial statements do not reflect adjustments that would be
necessary if the Company were unable to continue as a "going concern". While
management believes that the actions already taken or planned, will mitigate the
adverse conditions and events which raise doubt about the validity of the "going
concern" assumption used in preparing these financial statements, there can be
no assurance that these actions will be successful.

      If the Company were unable to continue as a "going concern", then
substantial adjustments would be necessary to the carrying values of assets, the
reported amounts of its liabilities, the reported expenses, and the balance
sheet classifications used.

Organization and Basis of Presentation

      The Company was incorporated under the laws of the United Kingdom on April
6, 2000, under the name of Electronic Game Card, Ltd. Until 2002, the Company
remained dormant and had no operations. On May 5, 2003, the Company entered into
an agreement whereby it acquired 100% of the outstanding stock of Electronic
Game Card Marketing, a Delaware Company.

      On December 5, 2003, the Company acquired 100% of the outstanding stock of
the Electronic Game Card, Inc. (Nevada) in a reverse acquisition. At this time,
a new reporting entity was created and the name of the Company was changed to
Electronic Game Card, Inc


                                       5
<PAGE>


                           ELECTRONIC GAME CARD, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                   (Continued)
                                   (Unaudited)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

As of June 30, 2006, the Company is in the development stage but has begun
planned principal operations.

Principals of Consolidation

      The consolidated financial statements include the accounts of the
following companies:

o     Electronic Game Card, Inc. ( Nevada Corporation)

o     Electronic Game Card, Ltd. (United Kingdom Corporation)

o     Electronic Game Card Marketing (A Delaware Corporation)

      The results of subsidiaries acquired during the year are consolidated from
their effective dates of acquisition. All significant intercompany accounts and
transactions have been eliminated.

Nature of Business

      The Company plans to engage in the development, marketing, sale and
distribution of recreational electronic software which primarily targeted
towards lottery and sales promotion markets through its Great Britain
subsidiary.

Concentration of Credit Risk

      The Company has no significant off-balance-sheet concentrations of credit
risk such as foreign exchange contracts, options contracts or other foreign
hedging arrangements.

Cash and Cash Equivalents

      For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months or less
to be cash equivalents to the extent the funds are not being held for investment
purposes.

Depreciation

      Fixed assets are stated at cost. Depreciation is calculated on a
straight-line basis over the estimated useful lives of the assets as follows:

                    Asset                           Rate
     ---------------------------------       -------------------
     Plant and Machinery Equipment                3 years
     Office Equipment                             3 years

      Maintenance and repairs are charged to operations; betterments are
capitalized. The cost of property sold or otherwise disposed of and the
accumulated depreciation thereon are eliminated from the property and related
accumulated depreciation accounts


                                       6
<PAGE>


                           ELECTRONIC GAME CARD, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                   (Continued)
                                   (Unaudited)


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

, and any resulting gain or loss is credited or charged to income.

      Depreciation Expenses for the three months ending June 30, 2006 and 2005
were $5,545 and $5,806 respectively

Advertising Costs

      Advertising costs are expensed as incurred. For the six months to June 30
2006 and 2005 were $19,398 and $53,436 respectively.

Revenue recognition

      Revenue is recognized from sales of product at the time of shipment to
customers.

Foreign Currency Translation

      The Company's functional currency is the U.S. Dollar and the reporting
currency is the U.S. Dollar. All elements of financial statements are translated
using a current exchange rate. For assets and liabilities, the exchange rate at
the balance sheet date is used. Stockholders' Equity is translated using the
historical rate. For revenues, expenses, gains and losses the weighted average
exchange rate for the period is used. Translation gains and losses are included
as a separate component of stockholders' equity. Gain and losses resulting from
foreign currency transactions are included in net income.

Pervasiveness of Estimates

      The preparation of financial statements in conformity with generally
accepted accounting principles required management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Loss per Share

      Basic loss per share has been computed by dividing the loss for the year
applicable to the common stockholders by the weighted average number of common
shares outstanding during the years. As of June 30, 2006, the Company had
options and warrants outstanding to purchase up to shares of common stock.
However, the effect of the Company's common stock equivalents would be
anti-dilutive for June 30, 2006 and 2005 and are thus not considered.


                                       7
<PAGE>


                           ELECTRONIC GAME CARD, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                   (Continued)

                                   (Unaudited)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued).

Stock Compensation for Non-Employees

      The Company accounts for the fair value of its stock compensation grants
for non-employees in accordance with FASB Statement 123. The fair value of each
grant is equal to the market price of the Company's stock on the date of grant
if an active market exists or at a value determined in an arms length
negotiation between the Company and the non-employee.

NOTE 2 - INCOME TAXES

      The Company is subject to income taxes in the United States of America,
United Kingdom, and the state of New York. As of December 31, 2005, the Company
had a net operating loss carry forward for income tax reporting purposes of
approximately $17,444,213 in the United States and $5,714,249 in the United
Kingdom that may be offset against future taxable income through 2023. Current
tax laws limit the amount of loss available to be offset against future taxable
income when a substantial change in ownership occurs. Therefore, the amount
available to offset future taxable income may be limited. No tax benefit has
been reported in the financial statements, because the Company believes there is
a 50% or greater chance the carry-forwards will expire unused. Accordingly, the
potential tax benefits of the loss carry-forwards are offset by a valuation
allowance of the same amount.

For the years ending December 31, 2005 and 2004 income tax expense was $0 and $0

SFAS No.109 requires recognition of deferred income tax assets and liabilities
for the expected future income tax consequences, based on enacted tax laws, of
temporary differences between the financial reporting and tax bases of assets
and liabilities

NOTE 3 - DEVELOPMENT STAGE COMPANY

      The Company has not begun principal operations and as is common with a
development stage company, the Company has had recurring losses during its
development stage. The Company's financial statements are prepared using
generally accepted accounting principles applicable to a going concern which
contemplates the realization of assets and liquidation of liabilities in the
normal course of business. As of March 31, 2006, the Company had cash and cash
equivalents of $.


                                       8
<PAGE>


                           ELECTRONIC GAME CARD, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                   (Continued)
                                   (Unaudited)


NOTE 4 - RELATED PARTY TRANSACTIONS

None

NOTE 5 - STOCK OPTIONS /WARRANTS

      The Company has adopted a stock compensation plan entitled the 2002 Equity
Compensation Plan. Pursuant to this 2002 Equity Compensation Plan, grants of
shares can be made to (i) designated employees of Electronic Game Card Inc. (the
"Company") and its subsidiaries including Electronic Game Card Ltd, (ii) certain
advisors who perform services for the Company or its subsidiaries and (iii)
non-employee members of the Board of Directors of the Company (the "Board") with
the opportunity to receive grants of incentive stock options, nonqualified
options, share appreciation rights, restricted shares, dividend equivalent
rights and cash awards. The Company believes that the Plan will encourage the
participants to contribute materially to the growth of the Company, thereby
benefiting the Company's shareholders, and will align the economic interests of
the participants with those of the shareholders.

      The 2002 Equity Compensation Plan provides for options equivalent up to
10% of the issued share capital of the company to be offered. The original
exercise price of the options was equal to one half the price at which the
Common Stock is issued at the first public offering, however, subsequent to the
adoption of the 2002 Equity Compensation Plan the board determined that the
exercise price would be issued from a range of $0.50 to $2.00 per option. Those
eligible to participate in this plan are entitled to vest 25% of the stock
offered in this option for each six months of service with the Company. After
vesting the exercise of these options must be done within ten years of the
option date. As of December 31, 2004, 1,190,000 of a total possible of 1,200,000
options have been distributed. No further stock option plans have been
instituted. During 2004 the Company recorded $110,700 in compensation expense in
connection with options granted pursuant to this plan. In connection with a
private placement on February 20, 2004, the Company issued 3,426,875 warrants.
Each warrant is exercisable for a period of five years at a price of $1.00 for
one share of common stock. The warrants were determined to have no value at the
time of their issuance.

      In addition, on February 20, 2004, the Company issued additional warrants
as consideration for assistance in placing the common stock pursuant to the
private placement. The warrants were issued as follows: 1) Warrants to purchase
up to 353,750 shares of common stock at an exercise price of $1.00 per share
were granted to Middlebury Capital LLC. These were granted as compensation for
placement agents for the private placement. These are exercisable through
February 20, 2009. 2) Warrants to purchase up to 32,000 shares of common stock
at an exercise price of $1.00 per share were granted to National Securities,
Inc. These were granted as compensation for placement agents for the common
stock. These are exercisable through February 20, 2009. 3) Warrants to purchase
up to 200,000 shares of common stock at an exercise price of $1.00 per share
were granted to First Securities USA, Inc. These were granted as compensation
for placement agents for the common stock. These are exercisable through
February 20, 2009. 4) Warrants to purchase up to 86,250 shares of common stock
at an exercise price of $1.00 per share were granted to IQ Ventures. These were
granted as compensation for placement agents for the common stock. These are
exercisable through February 20, 2009.

      The company has agreed that warrant holders could elect to convert their
warrants by a cashless exercise. This provision permits the warrant holder to
cancel sufficient warrants at the then current share price to receive the
balance of the warrants in Common Stock without payment to the company. In 2004
the Company has recorded $3,961,072 in compensation expense in connection with
the granting and cashless provision of the warrants detailed above.


                                       9
<PAGE>


NOTE 6 - JOINT VENTURE

      On October 12, 2004, the Company entered into a joint venture agreement
with Scientific Games International, Inc. ("SciGames:), to exclusively market
and promote the Company's Electronic Game Card product worldwide to national and
state lotteries. SciGames purchased Two Million One Hundred Seventy-One Thousand
Five Hundred Ninety-Four (2,171,594) shares of newly-issued common stock, par
value $0.001 per share of the Company for an aggregate purchase price of
$1,085,797.50 pursuant to a subscription agreement dated October 12, 2004. At
the closing, the Company contributed One Million Dollars ($1,000,000) to the
joint venture. The closing was completed on November 12, 2004 when the funds
cleared into the joint venture's account.

NOTE 7- CONVERTIBLE PROMISSORY NOTE

      On March 24, and April 6th, 2005 the Registrant sold a total of $8,418,000
Convertible Promissory Notes to accredited investors in a private placement of
securities. This note is payable upon written demand which may be made on or
after March 31, 2007, unless this note has been converted into shares of the
Company's "Series A Preferred Stock" or "Common Stock". The Interest rate of
this note is 6%. In connection with the convertible debt issuance on March 24,
2005 the company incurred charges in the amount of $718,800. These costs are
being amortized over the two year life on the note and as of March 31, 2006
amortization amount that has been booked to interest expense is $1,458,995

      Each $48,000 principal amount of a Convertible Promissory Note will
automatically convert into 32,000 shares of the Registrant's Series A
Convertible Preferred Stock, par value $0.001 per share (the "Series A Preferred
Stock"), upon the effectiveness of actions by the Registrant's shareholders to
authorize the Series A Preferred Stock. Each share of the Series A Preferred
Stock is initially convertible into one (1) share of the Registrant's common
stock, par value $0.001 per share (the "Common Stock"), which equates to an
initial conversion price of $1.50 per share of Common Stock. The Convertible
Promissory Notes may be converted, at the purchaser's discretion, directly into
Common Stock on an as-converted-into-Series-A-Preferred-Stock basis, whether or
not the Series A Preferred Stock is authorized and issued, and are immediately
convertible for such purpose. Consequently, each Convertible Promissory Note is
convertible ultimately into an aggregate of 32,000 shares of Common Stock. Also,
the Registrant issued one (1) warrant (a "Warrant") to acquire one (1) share of
Series A Preferred Stock for every two shares of Series A Preferred into which
the Convertible Promissory Notes are initially convertible. The Warrants shall
be exercisable to acquire shares of Series A Preferred Stock upon the
effectiveness of actions by the Registrant's shareholders to authorize the
Series A Preferred Stock. The Warrants shall be exercisable initially at $1.85
per share of Series A Preferred Stock, subject to adjustment, and shall be
exercisable for a period of 5 years. In addition, at the option of the holder,
each Warrant is also immediately exercisable directly to acquire, instead of
shares of Series A Preferred Stock, shares of Common Stock on an
as-converted-from-Series-A-Preferred-Stock basis, whether or not the Series A
Preferred Stock is ever authorized or issued. Unexercised Warrants shall expire
earlier upon notice by the Company to the holders of the Warrants following any
consecutive 30-day trading period during which the Common Stock trades on its
principal market at a price at or above three (3) times the then applicable
exercise price with average daily volume of at least 100,000 shares (subject to
adjustment of such trading volume threshold in the event of stock splits,
reverse stock splits, stock dividends, recapitalizations or similar events).

ITEM 2, MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

      The following information should be read in conjunction with the
consolidated financial statements and notes thereto appearing elsewhere in this
Form 10-QSB.


                                       10
<PAGE>


GENERAL

      Electronic Game Card, Inc., is a supplier of innovative games to the
lottery, casino, and promotional industry worldwide. Our lead product is the EGC
GameCard, a unique credit card-sized pocket game combining interactive
capability with "instant win" excitement. We have had revenues of $from sales of
the GameCards since inception. The company has made losses in the development
stage since August, 8th 2002 of $22,895,969.

THE COMPANY

      Electronic Game Card, Inc. (referred to as "EGC", "us", "we" or "Company")
is a supplier of innovative games to the lottery and promotional industry
worldwide. Our lead product is the EGC GameCard, a proprietary credit card-sized
pocket game combining interactive capability with "instant win" excitement.

      The EGC GameCard was designed by us to be rich in functionality,
customizable, portable, and cost efficient. Each EGC GameCard is equipped with a
microprocessor, random number generator, LCD, and power source, and security
features protecting both the consumer and the promoter. The EGC GameCard weighs
in at just less than one half ounce and is approx. 3mm thick. We have three
distinct markets for our GameCard product: the Lotteries; Indian Gaming, and the
Sales Promotions.

LOTTERY MARKET

      Lottery operators currently make use of paper scratch cards to give
players an "instant" win or lose reward experience. Over the last several years,
scratch cards have become increasingly large and complex to accommodate consumer
demand for multiple plays and multiple chances to win. The EGC GameCard offers
the potential to simplify the scratch card while giving the opportunity to raise
the unit price and increase sales. Our product has been seen by some leaders in
the lottery industry as potentially providing the next contemporary digital
evolution of the scratch card, offering multiple plays and multiple chances to
win in an entertaining and secure manner while using existing methods of
distribution as with scratch cards.

      EGC's Joint Venture agreement with Scientific Games resulted from the
first consumer launch of the EGC GameCards to the Iowa State lottery. The Iowa
Lottery Quarter Play GameCard was launched on t October 4, 2004 and the Iowa
lottery and Scientific Games publicly stated that the results exceeded their
expectations of sales level and consumer reaction. The Iowa lottery placed a
re-order for a further 189,000 Quarter Play GameCards for delivery in April 2005
and agreed to place orders for over 500,000 GameCards in total to be delivered
during 2005. This order and an order to the Kansas States Lottery for 120,000
GameCards were delayed until 2006 due to further product development.

      The delayed order for 120,000 the Kansas State Lottery Lucky 7s went on
sale on the June 1, 2006. The market demand for the Lucky 7s Electronic GameCard
was high "Our EGC is flying off the shelves, which is a strong indication this
is the kind of added entertainment value our lottery players are looking for in
their lottery games," said Lottery Executive Director Ed Van Petten. "We
anticipated a positive response to the game, but the sales and positive feedback
from our players have gone beyond our expectations. We are thrilled to be among
the first lotteries in the world to offer these types of innovative, extended
play lottery games to Kansas Lottery players."

      This success has prompted Kansas to announce on July 25 , 2006 an
immediate and complete repeat of the order for 120,000 Lucky 7s Electronic
GameCard and to consider the next version of Electronic GameCard to introduce to
Kansas Lottery players in early 2007

      The delay to the Iowa lottery product was also eliminated when the latest
Electronic GameCard game "Pocket Poker" went on state-wide sale on the July 31.
With the Electronic GameCard distribution complete Iowa Lottery will undertake a
marketing campaign in early August to generate interest including activities at
the Iowa State Fair.


                                       11
<PAGE>


SALES PROMOTION MARKET

      The sales promotion prize and competition market is one in which the
promoter (usually a well known brand) must not be seen to obtain money for entry
and where no purchase of the brand's goods is necessary in order not to fall
under the laws by which lotteries are regulated our EGC GameCards can be applied
to a broad range of potential promotional opportunities.

      The early pricing and delivery strategy of the GameCards have caused
potential customers to reconsider their purchase of our products, our new
product strategy is designed to address this concern. Introducing a new product
into the sales and promotion marketing arena, despite its demand for novelty
products and innovative ideas, takes time and adaptability to market needs.
Targeting the Electronic GameCard at the Gaming sales promotion market has
produce results. On the May 11, 2006 Ward Media, a direct marketing agency
representing leading online casino Golden Palace.com, announced that it is to
use the "Codebreaker GameCard TM " in a new promotion for Goldenplace.com the
on-line casino.

      Then on July 8 , EGC announce that the MGM Grand Casino in Detroit had
order a promotion using Electronic GameCards. The announcement state that the
promotion would start in Q3 2006 and be aimed at the Michigan Area.

      On the July 25, 2006 Electronic GameCard, confirmed that the Santa Ana
Star Casino has signed an agreement to use Electronic GameCards in a promotion
for its gaming property in the Pueblo of Santa Ana, New Mexico. The Santa Ana
Star Casino is the first U.S. Native American gaming casino to purchase
Electronic GameCards for use in a commercial promotion.

      These three sales promotion sector orders demonstrate the commercial
promotions opportunities for the Electronic GameCard and the basis for continued
marketing activity. EGC is confident that the interest shown in this sector will
continue to increase in 2006.

INDIAN GAMING MARKET

      The Indian Gaming on Native American Tribal Lands covers parts of 28
States within the United States of America and represents a significant portion
of the total gaming industry.

      The Indian Tribes often look to Gaming Laboratories, Inc. for
certification and classification of gaming devices. However, with respect to the
GameCards, as with instant scratch games, the GameCards do not rely on an
electronic mechanism to produces the result of the game and are therefore
classified as Class ll products.

      The Company has received a legal opinion from the National Indian Gaming
Commission ("NIGC") that the EGC GameCard is a Class II devise under IGRA
(Indian Gaming Regulatory Act). The Class II designation is significant because
it exempts the Company from becoming subject to the state license procedures and
requirements.

      The NIGC opinion letter refers to Version 1 of the Electronic GameCard and
then Version 2. The General Counsel then places these product versions in
different gaming classifications of NIGC regulations, namely Class III and Class
II respectively. The difference in the NIGC classifications is as follows:

      NIGC Class II gaming regulations refer to bingo, when played in the same
      location as bingo, pull tabs, lotto, punch boards, tip jars, instant
      bingo, and other games similar to bingo, and non-house banked card games
      authorized by or not explicitly prohibited by the state in which the
      tribal operation is located. NIGC Class III gaming regulations refer to,
      but are not limited to the following; baccarat, chemin de fer, blackjack,
      slot machines, and electronic or electromechanical facsimiles of any game.


                                       12
<PAGE>


      The broad difference is that Class II classified products are physical
played games like the checking of a bingo card or the pulling of the pull-tab.
Whereas Class III products are electronic or electromechanical facsimiles of any
game of chance.

      Version 1 of the GameCard submitted to NIGC was purely an electronic
GameCard that could only be played by activating the electronic circuit.
Therefore, the Electronic GameCard was classified as a Class III gaming product.

      EGC was advised that the application of a scratch panel to the electronic
GameCard, which would allow the physical playing of the game card, could change
the NIGC classification. The application of a scratch panel would then define
the electronic display as an alternative means of play that is just a
technological aid.

      A scratch panel was applied to the GameCard for Version 2 of the
electronic GameCard that was then sent to the NIGC General Counsel. NIGC then
classified the scratch panel electronic GameCard as an NIGC Class II gaming
product. Class II is the appropriate classification because the electronic
GameCard with a scratch panel is now physically played like a pull tab with no
need to activate the electronic circuit or to play the electronic version of the
game while being able to reach the end of the game and rewards payout, if any.

      Throughout this classification discussion EGC worked closely with NIGC's
General Counsel on the GameCards classification. The General Council, under NIGC
regulations, provides advisory opinions to gaming product developers as to
whether any product would be likely to be classified in Class II or Class III.

      The success in the sales promotion in the Gaming sector and in particular
the sale to the Santa Ana Star Casino, New Mexico demonstrate the interest in
the Electronic GameCard in this sector. Therefore EGC continues the sales and
marketing activity to generate sales around Class II gaming

BUSINESS STRATEGY

      The Company is currently marketing the EGC GameCard to lottery promoters
in the US through its joint venture with Scientific Games International, Inc. A
further opportunity has now opened to the company following approval of our
product for sale to consumers on Tribal Lands by the NIGC (see above) which
opens up a substantial market place.

      The Electronic GameCard is supported by the EGC Sales and Marketing and
the design of Games Concepts and software. The company strategy is to develop
generic games which do not require specific customization and consequently avoid
lengthy software processes. This allows for sales of EGC product in smaller
quantities and at greatly improved delivery times, the lack of which the Company
believes was a previous impediment to sales. We are also working closely with
strategic partners to distribute our products globally. We typically enter into
exclusive contracts with strategic partners for a specific market and geography
and several such negotiations have been completed recently in Portugal, India,
and Mexico

PRODUCT DEVELOPMENT

      The company has a continuous programme of product development comprising
improvement of existing designs and additions to our suite of 11 games currently
on offer to clients. Game design is divided into four stages, concept
development, software, testing and finally manufacturing. Product improvement is
generated by in house review and response to specific customer recommendations.

      The physical design of the GameCard has been enhanced through
modifications to circuit design, leading to a more robust product. Independent
Quality Assurance testing from our most recent manufacturing runs indicates that
we are now producing our most reliable product to date. Further enhancements are
being considered to improve the Gamecard still further. In addition to improved
circuit design we are currently upgrading the MCU Body (chip). This will further
reduce likelihood of resets.


                                       13
<PAGE>


      To maintain the flow of orders from existing and new customers the company
has already introduced new games and is further expanding the range. Games
currently under development are:

o     Lucky 8's - A variation on our most popular game Lucky 7s but themed for
      the Asian market where 8 is a lucky number and 4 is unlucky - software
      developed, ready for manufacture

o     "Hole in One" - a golf themed game - software in development

o     Deal or No Deal - two variations using the popular TV show "Deal or No
      Deal" as inspiration - concepts in development

o     Tic Tac Toe - a game where players win points for getting 3 X's in a line
      on a 3x3 grid. This game involves a larger and more complex LCD than those
      developed by EGC to date - concept in development/ feasibility being
      investigated

o     Match 3/ Number Grid - a replication of a traditional scratch card with
      the EGC version offering a number of plays - concept in development

RESULTS OF OPERATIONS

      The company has recorded $ 201,172 of revenues this quarter and $353,317
for the year to date. Sales and Marketing costs were $30,642 compared with
$96,609 in the comparable period for 2005. This reflects a reduction in
attendance at trade shows and events during the period. General and
Administration expenses were $246,880 compared with $258,578 for the same period
in 2005. This expense was lower than the comparable period as we continued to
make economies during the period. Consultancy costs were lower at $128,375
compared with $208,000 in the previous year due to expenditure incurred in the
prior period to resolve some quality control problems in the production process.
Salaries and payroll costs were $ 91,325 compared with $155,264 in 2005 there
were less employees in the period. Operating loss increased to $1,907,067
compared with $824,058 for the comparable period due to interest and finance
charges related to the fund raising in April 2005 which were $1,416,322 higher
than the comparable period. Operating losses excluding the interest charges were
$495,220 compared to $718,451 in the comparable period of 2005.

FINANCIAL RESOURCES

      Through April 6, 2005 the company sold $8,666,000 gross, $7,911,200 net,
of its convertible promissory notes (the "Convertible Promissory Notes") to
accredited investors in a private placement of securities (the "Private
Placement"). Each $48,000 principal amount of a Convertible Promissory Note will
automatically convert into 32,000 shares of the Registrant's Series A
Convertible Preferred Stock, par value $0.001 per share (the "Series A Preferred
Stock"). Each share of the Series A Preferred Stock is initially convertible
into one (1) share of the Registrant's common stock, par value $0.001 per share
(the "Common Stock"), which equates to an initial conversion price of $1.50 per
share of Common Stock. Also, the Company issued one (1) warrant (a "Warrant") to
acquire one (1) share of Series A Preferred Stock for every two shares of Series
A Preferred into which the Convertible Promissory Notes are initially
convertible. The Warrants shall be exercisable to acquire shares of Series A
Preferred Stock upon the effectiveness of actions by the Registrant's
shareholders to authorize the Series A Preferred Stock. The Warrants shall be
exercisable initially at $1.85 per share of Series A Preferred Stock, subject to
adjustment, and shall be exercisable for a period of 5 years.

ITEM 3. CONTROLS AND PROCEDURES

      At the end of the period covered by this report the Company carried out an
evaluation under the supervision and with the participation of the Company's
management including the Company's Chief Executive Officer and the Company's
Chief Financial Officer of the effectiveness of the design and operation of the
Company's disclosure controls and procedures (as defined in Rules 13a-15e and
15d -15-e under the Securities Exchange Act of 1934 as amended). Based on this
evaluation the Company's Chief Executive Officer and the Company's Chief
Financial Officer the Company concluded that information is recorded, processed,
summarized and reported within the time period specified by the Commission's
rules and forms, and that information is accumulated and communicated to our
management, including our Chief Executive Officer (or Acting Chief Executive
Officer, as the case may be) and our Chief Financial Officer, as appropriate to
allow timely decisions regarding required disclosure. Under the supervision and
with the participation of our Chief Executive Officer (or acting Chief Executive
Officer, as the case may be) and our Chief Financial Officer, we evaluated the
effectiveness of the design and operation of our disclosure controls and
procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of 30, 2006,
the end of the period. Following the review by our Chief Executive Officer (or
acting Chief Executive Officer, as the case may be) and our Chief Financial
Officer, each of them has determined that our disclosure controls and procedures
are effective.


                                       14
<PAGE>


CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING

      There were no changes in the Company's internal controls over financial
reporting, that occurred during the period covered by this report that has
materially affected, or are reasonably likely to materially effect, the
Company's internal control over financial reporting.

                           PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None

ITEM 2. CHANGES IN SECURITIES

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) The following exhibits are included as part of this report:

Exhibit
Number        Title of Document
--------      -----------------

31.1 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


                                       15
<PAGE>


                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereto duly
authorized.

                              ELECTRONIC GAME CARD



Date: August 10, 2006             By:  /s/ Lee Cole
                                   ---------------------------------
                                   Lee Cole
                                   Acting President and Acting Chief
                                   Executive Officer



Date: August 10, 2006             By:  /s/ Linden Boyne
                                   ---------------------------------
                                   Linden Boyne
                                   Secretary / Treasurer
                                   (Principal Financial Officer)