DEQ releases its 2007 financial statements

Financial highlights of 2007 were: a 27% increase in recurring revenue to us$ 2.3 million, compared to previous fiscal year, a us$ 2 million increase in cash flow related to operating activities from a negative us$ 1.3 million last year to us$ 0.7 million. It had a 77% gross margin compared to 55% in 2006, us$ 11.4 million in cash position with no debt compared to us$ 3.6 million in 2006 and stable annual operating costs at us$ 3.2 million compared to us$ 2.8 million in 2006.

The 2007 Financial Year saw historic strategic alliances with former competitors such as Shuffle Master and Paltronics as well as prestigious casino chains such as Station Casinos and Harrah's in Nevada as well as StarWorld in Macau and Barona and Pechanga in California.

Important milestones in the commercial development of the company were achieved by the commencement of the Nevada field trial as this was the result of a three year process as well as the Macao field trial which also was the result of a long certification process.

2007 results do not include any significant commercialization revenue from the agreements concluded in the USA and Macau in 2007 as field trials were ongoing at fiscal year-end. Improved financial results are attributable to the migration from their historical manufacturing business model to a recurring revenue model. 2008 will see financial results from this new business model in our key strategic markets: Nevada, the USA and Macau, due to our distribution channels established in 2007.

“In 2006, DEQ undertook the difficult task of converting its business model from a technology sale based company to a long-term recurring revenue company,” stated Earle G. Hall, DEQ's CEO. “DEQ's cash position is very solid as in 2007, the company had a cash inflow of 9 million dollars from the exercising of warrants. With DEQ's stable cost base, our 2007 priority was the gross margin to clearly demonstrate DEQ's future potential.”

The Consolidated Financial Statements are available on SEDAR (www.sedar.com) and DEQ's website.