**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: March 31, 2007**





**o
      TRANSITION REPORT UNDER
      SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT**


**OF
      1934**





*Commission
      file number 000-25853*





**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.
                EmployerIncorporation
                or organization)
            Identification
                No.)





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 xNo o





Indicate
      by check mark whether the registrant is a shell company (as defined by Rule
      12b-2 of the Exchange Act. Yes o  No x





State
      the
      number of shares outstanding of each of the issuer's classes of common equity,
      as of the latest practical date : As of May 14, 2007 there were 44,168,683
      shares of the issuer’s $0.001 par value common stock issued and
      outstanding.





Traditional
      small business disclosure format Yes oNo x










**PART
      I** **:
      FINANCIAL INFORMATION**





**Item
      1. Financial Statements**





**ELECTRONIC
      GAME CARD, INC**


**CONSOLIDATED
      BALANCE SHEET**





March
                31,
              2007
              (Unaudited)
            
            December
                31,
              2006**ASSETS**CURRENT
                ASSETSCash
                and cash equivalents
            
            $
            2,833,280
            
            $
            3,052,733Accounts
                receivable
            
            
            981,268
            
            
            415,067Deposit
                on inventory
            
            
            97,571
            
            
            97,571VAT
                receivable
            
            
            16,330
            
            
            19,604Deferred
                charges
            
            
            304,952
            
            
            343,071Related
                party receivable
            
            
            -
            
            
            79,275Total
                current assets
            
            
            4,233,401
            
            
            4,007,321PROPERTY
                AND EQUIPMENTPlant
                and machinery
            
            
            75,628
            
            
            75,586Office
                equipment
            
            
            63,900
            
            
            63,852Furniture
                and fixtures
            
            
            1,378
            
            
            1,375Less
                : accumulated depreciation
            
            
            (81,712
            )
            
            (78,627
            )Property
                and equipment, net
            
            
            59,194
            
            
            62,186OTHER
                ASSETSPatents
            
            
            29,234
            
            
            29,234Investments,
                at cost
            
            
            1,182,893
            
            
            1,018,269**TOTAL
                ASSETS**
            
            **$**
            **5,504,722**
            ****
            **$**
            **5,117,010****LIABILITIES
                AND STOCKHOLDERS' EQUITY/(DEFICIT)**CURRENT
                LIABILITIESAccounts
                payable
            
            $
            1,165,252
            
            $
            1,140,291Interest
                payable
            
            
            129,000
            
            
            -Total
                current liabilities
            
            
            1,294,252
            
            
            1,140,291Deficit
                in joint venture
            
            
            31,127
            
            
            12,489Series
                A 6% convertible redeemable preferred stock, par value
                $0.001,
              10,000,000
                shares authorized, 5,777,333 and 5,604,825 shares issued
              and
                outstanding as of March 31, 2007
            
            
            8,407,238
            
            
            8,407,238STOCKHOLDERS'
                EQUITY/(DEFICIT)Common
                stock, par value $0.001, 100,000,000 shares authorized,
              44,168,683
                and 44,168,683 shares issued and outstanding as of
              March
                31, 2007 and December 31, 2006, respectively
            
            
            44,169
            
            
            44,169Additional
                paid-in capital
            
            
            25,188,340
            
            
            25,188,340Accumulated
                deficit
            
            
            (28,642,796
            )
            
            (28,920,957
            )Accumulated
                other comprehensive loss
            
            
            (817,608
            )
            
            (754,560
            )Total
                Stockholders’ Deficit
            
            
            (4,227,895
            )
            
            (4,443,008
            )**TOTAL
                LIABILITIES AND STOCKHOLDERS’ EQUITY/(DEFICIT)**
            
            **$**
            **5,504,722**
            ****
            **$**
            **5,117,010**




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




2




**ELECTRONIC
      GAME CARD, INC**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS**




**(UNAUDITED)**




**For
                the Three Months Ended****March
                31,****2007**
            
            **2006**Revenue
            
            $
            990,538
            
            $
            152,145Cost
                of sales
            
            
            255,345
            
            
            82,486**Gross
                profit**
            
            
            **735,193**
            
            
            **69,659**Operating
                expensesSales
                and marketing
            
            
            1,172
            
            
            19,399General
                and administrative
            
            
            104,617
            
            
            167,354Consulting
                expenses
            
            
            95,005
            
            
            188,348Salaries
                and wages
            
            
            112,245
            
            
            174,309Loss
                from joint venture
            
            
            18,638
            
            
            174,309**Total
                operating expenses**
            
            
            **331,677**
            
            
            **549,410****Income
                (loss) from operations**
            
            
            403,516
            
            
            (479,751
            )Other
                income (expense)Interest
                income
            
            
            42,701
            
            
            -Interest
                expense
            
            
            (168,056
            )
            
            (1,458,995
            )**Total
                other income (expense)**
            
            
            **(125,355**
            **)**
            
            **(1,458,995**
            **)****Net
                income (loss)**
            
            **$**
            **278,161**
            ****
            **$**
            **(1,938,746**
            **)**Foreign
                currency translation loss
            
            
            (63,048
            )
            
            (635
            )**Comprehensive
                income / (loss)**
            
            **$**
            **215,113**
            ****
            **$**
            **(1,939,381**
            **)**Net
                income / (loss) per common share - basic and diluted
            
            $
            0.01
            
            $
            (0.08
            )Weighted
                average number of shares outstanding
            
            
            44,168,683
            
            
            25,765,765




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




3


**ELECTRONIC
      GAME CAR, INC**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**




**(UNAUDITED)**





**For
                the Three Months Ended****March
                31,**
            
            **March
                31,****2007**
            
            **2006**CASH
                FLOWS FROM OPERATING ACTIVITIES :Net
                income (loss)
            
            $
            278,161
            
            $
            (1,938,746
            )Adjustments
                to reconcile net income (loss) to net cash used inoperating
                activities:Depreciation
            
            
            3,085
            
            
            2,969Amortization
                of interest expense
            
            
            -
            
            
            882,975Amortization
                of deferred charges
            
            
            38,119
            
            
            347,283Loss
                from joint venture
            
            
            18,638
            
            
            347,283Change
                in operating assets and liabilities:(Increase)
                in accounts receivable
            
            
            (566,201
            )
            
            -Decrease
                in VAT receivable
            
            
            3,274
            
            
            7,091Increase
                (decrease) in accounts payable
            
            
            24,961
            
            
            (41,560
            )(Decrease)
                in related party payable
            
            
            -
            
            
            (96,300
            )Increase
                in accrued liabilities
            
            
            -
            
            
            259,980Increase
                in interest payable
            
            
            129,000
            
            
            129,989**Net
                cash used in operating activities**
            
            
            (70,963
            )
            
            (446,319
            )CASH
                FLOWS FROM INVESTING ACTIVITIES :Purchase
                of property and equipment
            
            
            (93
            )
            
            (542
            )Investments
            
            
            (164,624
            )
            
            -**Net
                cash used in investing activities**
            
            
            (164,717
            )
            
            (542
            )CASH
                FLOWS FROM FINANCING ACTIVITIES:Receipts
                on related party receivable
            
            
            79,275
            
            
            -**Net
                cash provided by financing activities**
            
            
            79,275
            
            
            -Foreign
                currency exchange effect on cash
            
            
            (63,048
            )
            
            (635
            )**Net
                decrease in Cash**
            
            
            (219,453
            )
            
            (447,496
            )Cash
                at beginning of period
            
            
            3,052,733
            
            
            5,544,331Cash
                at end of period
            
            $
            2,833,280
            
            $
            5,096,835**Supplemental
                disclosure of cash flow information**Cash
                paid during the period for :Interest
            
            $
            -
            
            $
            -Income
                Taxes
            
            $
            -
            
            $
            -




The
      accompanying notes are an integral part of these unaudited consolidated
      financial statements




4


**ELECTRONIC
      GAME CARD, INC.**


**NOTES
      TO FINANCIAL STATEMENTS**


**March
      31, 2007**


**(Unaudited)**




**NOTE
      1**   **ORGANIZATION
      AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**





**Organization**





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 until August 8 2002. 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.





The
      Company is engaged in the development, marketing, sale and distribution of
      recreational electronic software which is primarily targeted towards lottery
      and
      sales promotion markets through its UK subsidiary.





**Basis
      of Presentation**





The
      unaudited consolidated financial statements included herein have been prepared
      with accounting principles generally accepted in the United States for interim
      financial information and with the instructions to Form 10-QSB and Item 310(b)
      of Regulation S-B. They do not include all information and notes required by
      generally accepted accounting principles for complete financial statements.
      However, except as disclosed herein, there has been no material changes in
      the
      information disclosed in the notes to the consolidated financial statements
      included in the Annual Report on Form 10-KSB of Electronic Game Card, Inc.
      for
      the year ended December 31, 2006. In the opinion of management, all adjustments
      (including normal recurring accruals) considered necessary for a fair
      presentation have been included. Operating results for the three months ended
      March 31, 2007 are not necessarily indicative of the results that may be
      expected for any other interim period or the entire year. For further
      information, these unaudited consolidated financial statements and the related
      notes should be read in conjunction with the Company’s audited consolidated
      financial statements for the year ended December 31, 2006 included in the
      Company’s Annual Report on Form 10-KSB.





**Principles
      of Consolidation**





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





·
            Electronic
                Game Card, Inc. (Nevada
                Corporation)


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


·
            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 inter-company accounts and
      transactions have been eliminated.





Certain
      amounts in the prior periods consolidated financial statements and notes have
      been reclassified to conform to the current period’s presentation.





**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.




5


**ELECTRONIC
      GAME CARD, INC.**


**NOTES
      TO FINANCIAL STATEMENTS**


**(Continued)**


**(Unaudited)**





**NOTE
      1**   **ORGANIZATION
      AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**


(Continued)




**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**





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





Asset
            
            RatePlant
                and Machinery Equipment
            
            
            3
                yearsOffice
                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
      is eliminated from the property and related accumulated depreciation accounts,
      and any resulting gain or loss is credited or charged to income.





**Advertising
      Costs**





Advertising
      costs are expensed as incurred. For the three months ended March 31, 2007 and
      2006, advertising costs were $-0- and $19,399, respectively.





**Revenue
      recognition**





Revenue
      is recognized from sales of product when persuasive evidence of an arrangement
      exits; product has been shipped to customers; fee is fixed or determinable;
      and,
      collectibility is reasonably assured.





**Foreign
      Currency Translation**





The
      Company's functional currency for its foreign subsidiary, Electronic Game Card
      Ltd., is the British (UK) Pound 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 as other comprehensive income or loss. Gain
      and losses resulting from foreign currency transactions are included in net
      income or loss from operations.




6


**ELECTRONIC
      GAME CARD, INC.**


**NOTES
      TO FINANCIAL STATEMENTS**


**(Continued)**


**(Unaudited)**





**NOTE
      1**   **ORGANIZATION
      AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**


(Continued)




**Pervasiveness
      of Estimates**





The
      preparation of the consolidated financial statements in conformity with
      generally accepted accounting principles in the United States requires
      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 consolidated financial statements and the reported amounts
      of
      revenues and expenses during the reporting period. Actual results could differ
      from those estimates.





The
      Company’s consolidated financial statements are based on a number of estimates,
      including accruals for accounts payable and interest expense, amortization
      of
      deferred charges, allowance for doubtful accounts, estimated useful lives of
      property and equipment, and fair value of investments.





**Income
      (Loss) per Share**





Basic
      income (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 March 31, 2007, 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 March 31, 2007 and 2006 and are thus not
      considered.





**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**   **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
      $29,000,000 for the period from August 8, 2000 (inception) to March 31, 2007.
      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. As such, the Company may require additional debt or equity financing
      to
      support its operations until such time as it achieves positive cash flows from
      operations.




7


**ELECTRONIC
      GAME CARD, INC.**


**NOTES
      TO FINANCIAL STATEMENTS**


**(Continued)**


**(Unaudited)**





**NOTE
      2**   **GOING
      CONCERN**


(Continued)





These
      consolidated 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.





**NOTE
      3**   **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 March 31, 2007, the Company had a
      net
      operating loss carry forward for income tax reporting purposes of approximately
      $21,711,106 in the United States and $6,913,052 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. Accordingly, the potential tax
      benefits of the loss carry-forwards are offset by a valuation allowance of
      the
      same amount.





For
      the
      years ending March 31, 2007 and 2006 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
      4**   **RELATED
      PARTY TRANSACTIONS**





As
      at
      March 31, 2007 and December 31, 2006 the Company was owed $0 and $79,275 by
      related parties incurred in the ordinary course of business.





During
      the quarter ended March 31, 2007 and the year ended December 31, 2006 the
      Company incurred rent expense of $27,000 and $108,000 for rent for the New
      York
      office and $20,000 and $80,000 for the London office.




**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


8


**ELECTRONIC
      GAME CARD, INC.**


**NOTES
      TO FINANCIAL STATEMENTS**


**(Continued)**


**(Unaudited)**




**NOTE
      5**   **STOCK
      OPTIONS /WARRANTS**


(Continued)





(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 March 31, 2007,
      1,190,000 of a total possible of 1,200,000 options have been distributed. During
      2004 the Company recorded $110,700 in compensation expense in connection with
      options granted pursuant to this plan. In February 2007 the company adopted
      an
      equity compensation scheme entitled The 2007 Equity Compensation Plan. The
      2007
      Equity Compensation Plan provides for options equivalent up to 10% of the issued
      share capital of the company to be offered. On February 6, 2007 the company
      issued 2,000,000 options to management and staff at an exercise price of 17.5c
      per share and 2,000,000 at an exercise price of 25c per share.





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. In connection with a private placement on March 31, 2005, the Company
      issued 3,426,875 warrants. Each warrant is exercisable for a period of five
      years at a price of $0.50 for one share of common stock. The warrants were
      determined to have no value at the time of their issuance.





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.





**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.


9


**ELECTRONIC
      GAME CARD, INC.**


**NOTES
      TO FINANCIAL STATEMENTS**


**(Continued)**


**(Unaudited)**





**NOTE
      6**   **JOINT
      VENTURE**


(Continued)





During
      the three months ended March 31, 2007, the Company had a loss from the joint
      venture in the amount of $18,638 which represented the Company’s allocable 50%
      interest. Subsequent to March 31, 2007, the Company and SciGames mutually agree
      to terminate their joint venture.





**NOTE
      7**   **SERIES
      A PREFERRED STOCK**





On
      March
      24, and April 6 th ,
      2005
      the Registrant sold a total of $8,666,000 Convertible Promissory Notes to
      accredited investors in a private placement of securities. This note was payable
      upon written demand which may be made on or after March 31, 2007, and was
      converted into Series A Preferred stock at the company’s election on November
      29, 2006. Each share of Series A Preferred Stock is convertible into one share
      of Common Stock at no cost by stockholder and is redeemable by the company
      not
      later than March 15, 2010. Series A Preferred Stock pays interest at 6% per
      annum. 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
      stock. 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 at
      $0.50 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).





**NOTE
      8**   **SUBSEQUENT
      EVENT**





On
      April
      27, 2007 (the “Effective Date”), Electronic Game Card, Inc. (the "Company" or
“EGC”) entered into a license agreement (the “License Agreement”) with
      Scientific Games International, Inc. ("SGI").





The
      parties agreed to terminate their joint venture agreement dated October 12,
      2004
      (the “Joint Venture Agreement”), settling outstanding amounts due to each party
      and owed by each party to the joint venture or to each other. The
      parties agreed to wind down the business of the joint venture for a reasonable
      period of time to complete written orders existing at March 31, 2007 without
      incurring further liabilities.





Pursuant
      to the License Agreement, SGI shall have the exclusive right, for a period
      of
      three years (subject to extension as discussed below), to produce, market,
      sell
      and distribute the Electronic GamecardTM in
      compliance with all applicable laws, to all public lotteries operated by
      national, state or provincial governmental entities or private entities
      operating such public lotteries on behalf of such governmental entities (the
      “Public Lotteries”) in the U.S., Canada, Mexico and Italy. SGI also shall have a
      non-exclusive license to produce, market, sell and distribute the Electronic
      GamecardTM worldwide during the ten year term of the License Agreement and any
      extensions thereof. For
      purposes of the License Agreement, the term “Public Lotteries” does not include
      lotteries conducted by charitable entities or lotteries conducted by other
      persons, entities or bodies that are not operated on behalf of national, state
      or provincial governmental entities. SGI agreed to package and label Electronic
      Gamecards as requested by the Company at a reasonable rate of compensation
      to be
      mutually agreed by the parties. EGC retained
      all other rights with respect to the intellectual property which is the subject
      of the License Agreement. In connection with the sale, marketing, production
      and
      distribution of the Electronic GamecardTM, EGC shall provide SGI full access to
      EGC’s producers, manufacturers and suppliers of all components for and assembly
      of the Electronic GamecardTM.


10




**ELECTRONIC
      GAME CARD, INC.**


**NOTES
      TO FINANCIAL STATEMENTS**


**(Continued)**


**(Unaudited)**





**NOTE
      8**   **SUBSEQUENT
      EVENT**


(Continued





SGI
      may
      extend its exclusive rights with respect to “Public Lotteries” in the U.S.,
      Canada, Mexico and Italy during the term of the License Agreement on a yearly
      basis beyond the first three years of the License Agreement. To effect such
      an
      extension of exclusivity, SGI must pay to EGC in cash, , the sum of at least
      $500,000 in license fees for the year preceding the extension (including any
      topping off payment by SGI if license fees paid to EGC for such year otherwise
      would be less than $500,000).





During
      the term of the License Agreement, SGI
      has
      agreed to pay to the Company as a royalty fee (“Royalty Fee”) on a quarterly
      basis the greater of $.05 per Electronic Gamecard TM and five
      percent (5%) of the gross selling price without deduction of taxes, expenses
      or
      promotions, for Electronic Gamecards sold by SGI or its affiliates. SGI
      may
      not assign, sublicense or otherwise transfer the License Agreement to a third
      party without the prior written consent of EGC .




11




**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.





**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.





**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
      selling price to consumers 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.




12


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 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 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
      order the next 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 undertook a marketing
      campaign in early August to generate interest including activities at the Iowa
      State Fair. The lottery has now ordered another game for delivery in the first
      quarter of 2007.





The
      company has also received an order from a further State lottery for 180,000
      units to be delivered in early 2007 for public sale in quarter two.





**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.




On
      October 10 th ,
      2006
      EGC announced a contract to work with the Aspers Casino, in Newcastle, England
      on a promotional mailing for the Fourth Quarter of 2006. This order has now
      been
      delivered. This is the first delivery to a UK casino operator.





On
      October 27 th ,
      2006
      EGC also announce a delivery consignment to The Norwegian Association of the
      Disabled **** for
      a Q4
      promotion. This is the first delivery to the Nordic region





On
      November 6 th EGC also
      announced a sale to confirm that Cantor Gaming, a provider of online and mobile
      gaming services and an affiliate of global financial services company, Cantor
      Fitzgerald, has placed an order to use Electronic GameCards for a major casino
      player recruitment campaign. This is the first sales to a UK based on-line
      gaming operation. Cantor Gaming operations do not accept American client and
      therefore are not affected by the recent change in United States legislation.
      These 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 2007.




13





**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 produce the results of the game and are therefore classified as Class II
      products.





The
      Company has received a legal opinion from the National Indian Gaming Commission
      (“NIGC”) that the EGC GameCard is a Class II device 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.




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.




14





**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 the suite of games currently
      on
      offer to clients.  Game design is divided into four stages; concept
      development, software, testing and finally manufacturing. Product development
      and 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. Performance is constantly being
      reviewed to improve the GameCard still further. In addition to improved circuit
      design we are currently upgrading the MCU Body (chip) on a number of our games.
      This will further improve reliability.





We
      continue to develop and improve our Tic Tac Toe and Florida Dice games. The
      development of Florida Dice was a result of our flexible approach to game design
      and product innovation. While this game had not been considered until recently
      however the concept was developed and has been well received and the game has
      been added to those already in development. Work has continued on games
      previously mentioned, Lucky 8’s is now in the testing stage, this is a game
      designed specifically to appeal to the Asian market. Development work continues
      on the two variations of a Deal or No Deal themed game as well as a Match 3/
      Number grid game and the Hole In One golf themed game. We have a total of 17
      games in our portfolio.





Research
      and Development continues on a range of additional games and concepts for
      possible inclusion in our portfolio :





·
            Blackjack
                - a version of the enormously popular casino game where the player
                attempts to beat the house - software in
                development


·
            “Goal
                King” single player - a variation on our existing two player Goal King
                game - software in development


·
            Monopoly
                - a slot style game using icons from the timeless board game MonopolyTM as
                a theme - concepts in development


·
            Texas
                Hold’em - currently the most popular version of poker amongst internet
                poker and traditional style players - concepts in
                development


·
            Soccer
                Collection - a non-gaming product aimed at the collectible market
                for
                sports and trading cards - concepts in
                development.




15


**RESULTS
      OF OPERATIONS**





The
      company has recorded $990,538 of revenues this quarter compared with $152,145
      in
      the same period in 2006. Sales
      and
      Marketing costs were $1,172 compared with $19,399 in the same period for 2006.
      This reflects a reduction in attendance at trade shows and events during the
      period. General and Administration expenses were $104,617 compared with $167,354
      for the same period in 2006. This expense was lower than the comparable period
      as we continued to make economies during the period .
      Consultancy costs were lower at $95,005 compared with $188,348 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
      $112,245 compared with $174,309 in 2006 as there were less employees in the
      period. Operating profit excluding the interest charges was $422,154 compared
      to
      a loss of ($479,751) in the comparable period of 2006. Total comprehensive
      income was $271,870 compared with a comprehensive loss of ($1,939,381) for
      the
      comparable period.





**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") and
      subsequently converted to Series A Preferred Stock on November 29, 2006.





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 $1.01 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 stock. 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 $0.50 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 March
      31,
      2007, 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.





**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 .




16




**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:




ExhibitNumber
              
              Title
                  of Document31.1
              
              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.





17




**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
                : 14 May , 2007
            By: 
                /s/ Lee ColeLee
                Cole
              Acting
                President and
              Acting
                ChiefExecutive
                Officer




Date
                : 14 May, 2007
            By: 
                /s/ Linden BoyneLinden
                Boyne
              Secretary
                / Treasurer
              (Principal
                Financial Officer)





18