SOURCE: Electric & Gas Technology, Inc.

November 10, 2006 16:01 ET

ELGT Updates Status of 10-KSB Filing

GARLAND, TX -- (MARKET WIRE) -- November 10, 2006 -- On October 30, 2006, ELGT (Electric & Gas Technology, Inc.) (OTCBB: ELGT) filed a form 12B-25 15 day extension to file its annual 10KSB for the year ended July 31, 2006. This extension was necessitated by the departure of its Corporate Controller and other significant turnover in the company's accounting department. The delay is compounded by scheduling conflicts with the company's independent auditor. As a result the company will not make the extension deadline of November 14, 2006. Instead it is expected that the company will file on or before December 1, 2006.

Daniel A. Zimmerman, CEO, said, "It is disappointing that we find ourselves in the position of filing our 10KSB late. The departure of people in important positions is never timely. In this case we found after the fact that too many internal controls were being compromised and the accounting function was in need of an overhaul. George Johnston, CFO, will act as Controller in a 'hands-on' role until all reporting issues are resolved. I too have resumed a day to day operating role as our attempt to create a GM position did not succeed."

Zimmerman continued, "This situation is as much a result of the revenue surge from the second quarter as it is a staffing issue. Many functional areas of the company were stressed by the sudden demands of such a large but short duration project. With so much of the company's resources focused on one project, managing our core business, which was expanding, suffered. We reacted slowly to rising material costs and found ourselves in a situation requiring excessive overtime for three plus months to catch up. Our processes did not stand the test and it cost us.

"As CEO I accept responsibility for last year's poor performance. We seemed to have lost the successful recipe we had established going in. This is a setback, but at the same time we believe that we will have a better understanding of what is necessary to not just grow the business but grow it profitably."

ELGT is a publicly traded company that, through its subsidiaries, operates in two main segments: Utilities Products and Contract Manufacturing.

This release contains forward-looking statements within the meaning of the Securities Exchange Act of 1934, which represents the Company's expectations or beliefs concerning, among other things, future operating results and various components thereof and the adequacy of future operations to provide sufficient liquidity. The Company cautions that such matters involve significant risks and uncertainties that could cause actual operating results and liquidity needs to differ materially from such statements, including, without limitation: (i) increased competition, (ii) price-sensitive nature of product demand, (iii) dependence upon favorable pricing from its suppliers and (iv) other risks indicated herein and in its SEC filings.

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