For those that are interested, I had emailed the company requesting more information, and got this response (from Karla<Presidents@uniserve.com). Have to admit I am not clear where the "Speculative Buy" comes from ... this appears to possibly be from a newsletter(?) But there is a lot of informative information here.
e-CASINO GAMING CORPORATION
Trading Symbol: ECGC Nasdaq OTC BB
Website Address: www.e-casinogaming.com
INVESTMENT RECOMMENDATION: Speculative Buy
Closing Price (April 5/99) - $0.93 Current Shares Outstanding: 16.1 MM
52 Week Low: $0.10 Market Capitalization: $14.9 MM
52 Week High: $1.75 S&P Cusip# 268308 10 3
Corporate Background:
e-Casino Gaming Corporation (e-Casino or the "Company") was originally incorporated in 1997, in the state of Nevada, as Clear Water Mining Inc. During the first three months of 1999, the Company completed the following developments to enter into the electronic casino and gambling business:
· Changed its name to e-Casino Gaming Corporation and changed its trading symbol from CLWM to ECGC to reflect the new corporate name;
· Acquired the technical capacity via a Software License with one of the leading JAVA based Internet gaming software companies in the world - Intersphere Communications. This license was entered into via e-Casino Gaming Corporation's subsidiary, 21st Century Software Solutions Inc.
· Established a wholly-owned subsidiary, Siglo Veintiuno Soluciones Informaticas, S.A. in Costa Rica and began implementing a plan to set up a legally licensed casino and sports book Internet site in that jurisdiction.
· Completed two private placements that have provided the company with the necessary working capital to implement the first phase of implementing its business strategy.
Business Development Strategy:
The management of e-Casino Gaming Corporation recognized that the foundation of developing a successful electronic casino and sports book Internet site is to provide the customer with the most enjoyable and entertaining experience possible. Unlike the land based casino operations in Las Vegas and other sites, the Internet gambling experience is based almost entirely on the software platform used to operate the Internet gaming site. For this reason, e-Casino searched out the most attractive and technologically advanced software available on the market.
The software is being licensed from Intersphere Communications, Ltd. (Grenada) whose client base includes Metro Goldwyn Mayer (MGM Interactive), Comcast, Chelsea House, 123 Casino and others. Intersphere is a young growing company that was established in 1995 and has quickly grown to become a leading edge Internet and software development company. It has established a high profile reputation in the sector and is featured in a section in the recently published Ziff Davis publication, "Instant HTML Web Pages".
The software licensed by e-Casino from Intersphere - LiveAction Gaming Platform is based on two stand-alone systems that when combined offers the most advanced Internet wagering system available. Now that the company has secured the core foundation of an Internet gambling site it is in the process of completing the next phase of its aggressive business development strategy. These elements include:
· Finalizing pending negotiations with an experienced operational team to establish its Cost Rican based Internet gambling site;
· Complete the building of the Internet web site that will be the revenue base for the business;
· Complete additional corporate financing that will be used to further develop the business including the potential of a top celebrity endorsement agreement;
Investment Thesis:
e-Casino's current market price (mid $0.90's) and capitalization reflects the following:
· e-Casino is an early stage development company that must surmount certain risks to become successful in the Internet gambling business;
· The company has only recently (mid March) traded any noticeable volume and this is because it has negligible profile among the Internet investing market;
· It has yet to establish its operating business and, therefore, realize any positive business revenues.
e-Casino represents substantial upside investment potential for the following reasons:
· The company has secured the right technological base from which to develop its Internet gaming site and expects to begin revenue-generating operations within the next 60 days.
· Once it begins operations and utilizes the operational and marketing expertise of its new, highly motivated management team it will be able to generate positive cash flow. (Intercapital Global Fund, Ltd. licensed the same Intersphere software from reported handling $2.1 million in wagers with a hold of 3.8% in its first 30 days of operations);
· The investing public is highly receptive to Internet based companies and especially those with positive earnings results. Some Internet gaming companies, however, seem somewhat insulated from this requirement in order to achieve high market valuations. (See Comparable Companies table below)
· Frost & Sullivan estimate that wagering via the internet was approximately $1 billion in 1998. Gaming consultants Christinansen/Cummings estimate internet wagering to reach $2.3 billion by 2001. The Financial Times has estimated that the Internet gaming market will yield annual net earnings of US $10.2 billion by the year 2002. Playboy and Harrah's are now entering the sector.
Comparable Companies:
Name Symbol Recent Price Mkt Cap. 52 Week Range Sh. Out EPS
Starnet Communications SNMM $12 3/8 $297 MM 3/8 - $17 24 MM $0.05
GLC Ltd. GLXW $9.50 $116 MM $0.47 - $38.50 12 MM ($7.50)
Youbet.com UBET $15.00 $174 MM $9.00 - $22.00 11.6 MM ($2.90)
|
