PokerTek reports Q1 results

CHARLOTTE, North Carolina -- (PRESS RELEASE) -- PokerTek(TM), Inc. (NASDAQ:PTEK) today announced financial results for the three months ended March 31, 2007. Net loss for the first quarter of fiscal 2007 was approximately $2,627,000, or ($0.28) per diluted share, compared with net loss of approximately $1,591,000, or ($0.17) per diluted share, in the first quarter of 2006.

First Quarter Financial Results

Q1 and Current Highlights

• Quarterly license fee revenue in the fourth quarter of fiscal year 2006 compared to the first quarter of 2007 increased by 160.1%, from $195,000 to $508,000.
• Entered into a multi-year agreement in April 2007 with Harrah's Operating Company, Inc., which made PokerTek the exclusive provider of live, player-banked, automated poker tables to Harrah's.
• Completed a private placement in April 2007 of 1,444,444 shares of our common stock and related warrants, which resulted in approximately $12.5 million of net proceeds to PokerTek.

"We continue to grow our customer base and look forward to announcing new installations and regulatory approvals," stated Lou White, PokerTek's Chief Executive Officer. "We are excited to be working side-by-side with the Harrah's team to bring automated poker to many of their properties. Along with concentrating on accelerating the growth of our software licensing revenue, we completed a private placement of our common stock to three highly-respected institutions and their affiliates, which provided us with additional funds that we will use to continue to grow our business."

Revenues from both license fees and equipment sales relating to the PokerPro system totaled approximately $592,000 during the three-month period ended March 31, 2006, up from approximately $473,000 in the same period in 2006. Revenues consisted of aggregate license fees for the three-month period ended March 31, 2007 and the same period in 2006 of approximately $508,000 and $360,000, respectively.

The quarterly net loss increased to approximately $2,627,000 from approximately $1,591,000 in the same period in 2006, creating a net loss per common share, basic and diluted, of ($0.28) compared to ($0.17) for the first quarter of fiscal year 2006. The increases in the following factors were the primary components affecting the increased loss for the first quarter of 2007 as compared to the first quarter of 2006: employees' salaries and benefits; share-based compensation expense; fees related to compliance with licensing and regulatory requirements; depreciation expense primarily related to the PokerPro systems in place; travel expenses, primarily related to sales opportunities and trade shows; and advertising and marketing the PokerPro system. A decrease in interest income during the first quarter of 2007 was also a component affecting the increased loss.