DEQ

DEQ Systems Corp. (TSX VENTURE: DEQ) ("DEQ" or the "Company") announces today the filing of its annual financial results for the year ended November 30, 2010. The Consolidated Financial Statements are available on SEDAR (www.sedar.com) and DEQ's website. A conference call will be held on Friday, March 18, 2011 at 10am EST to present and discuss these results. Those interested in participating should dial toll free 1 (800) 909-4571 or (416) 981-9000. A PowerPoint presentation will be available on DEQ's website in the Invest/Financial Reports/PowerPoint section to support the call content.

2010 ANNUAL RESULTS HIGHLIGHTS:

Financial Metrics

--  Revenue
    --  90% increase in recurring revenue from $757,000 in 2009 to
        $1,436,000 in 2010.
    --  10% increase in total revenue $4,419,000 in 2009 to $4,854,000 in
        2010.
    --  6% increase in gross profit from $3,796,000 in 2009 to $4,031,000 in
        2010.
    --  83% gross margin in 2010 which was comparable to previous year.
    --  Loss of $210,000 of royalties explained by Station Casinos'
        bankruptcy.
    --  Termination of the Paltronics revenue recognition in 2010 that
        affected our revenue by $120,000.
    --  Settlement agreement on the Severn Project concluded on March 3,
        2011 that will affect our recurring revenue by approximately
        $200,000 starting on March 1, 2011.

--  Operating Costs
    --  Operating costs increased to $3,840,000 in 2010 compared to
        $3,263,000 in 2009. This is explained by the Asian commercialisation
        and the increased number of products installed in North America,
        mostly from G3 systems in California.

--  EBITDA
    --  EBITDA of $191,000 in 2010 compared to $533,000 in 2009. This is
        explained by the loss of $575,000 of royalties in 2010 from Station
        Casinos and Paltronics as well as the revenue recognized in 2009
        before the Russian casino closures.

--  Cash Flow
    --  In 2010, DEQ generated $423,000 of cash flow from operating
        activities before change in non-cash working capital items.
    --  During the fiscal year, our cash position decreased by $1,896,000
        explained mostly by our $698,000 payment to DEK International on our
        balance of territorial exclusivity purchase price and the change in
        non-cash working capital items for an amount of $929,000, explained
        by the late payment of Severn Enterprises for an amount of $469,000
        as well as an increase in inventory of $250,000 to meet our new
        level of projected quarterly installations.

Operational Highlights

--  Product Installations
    --  In 2010 DEQ directly installed 341 new products in North America.
    --  As of November 30, 2010, DEQ had 533 directly installed products in
        North America, 81 products installed in Asia and 389 products
        installed through distributors worldwide for a total of 1,003
        products in operation worldwide.

--  Operating Costs
    --  DEQ's operating costs have increased over the course of the past 12
        months due to:
        --  Many G3 installations in California
        --  Asia and Australia commercialization and new jurisdictional
            licenses

"DEQ's products have proven acceptance and viability in 2010", stated Earle G. Hall, President & CEO of DEQ. "With over 340 new installations this year and our first major installation in Asia we are more than confident in the potential growth of all of our product lines. 2010 was a turbulent year with the Station Casinos bankruptcy, the end of the Paltronics royalties and the Severn project. That being said when we look at the 141 installations in our first quarter of 2011, we are very encouraged by the speed at which DEQ's core business is growing and we believe that our accelerated growth will offset these lost royalty streams in the near term. As we look to the future, we are very excited with not only our geographical growth but our product penetration per casino and the new products we are launching in 2011."

Statement of Earnings
                                           Fiscal year ended November 30,
                                           2008         2009         2010
                                      (audited)    (audited)    (audited)
                                   ---------------------------------------
                                   ---------------------------------------

Direct leasing                          370,000      757,000    1,436,000
Royalties (excluding Severn
 Enterprises)(1)                      1,632,000    2,155,000    1,462,000
Royalties (Severn Enterprises)          614,000      801,000      922,000
                                   ---------------------------------------
Total recurring revenue               2,616,000    3,713,000    3,820,000
Non recurring revenue                 1,470,000      706,000    1,034,000
                                   ---------------------------------------
Total Revenue                         4,086,000    4,419,000    4,854,000

Gross Profit                          3,296,000    3,796,000    4,031,000
% Gross margin                               81%          86%          83%

Operating Costs                       3,537,000    3,263,000    3,840,000
                                   ---------------------------------------

EBITDA (2)                             (241,000)     533,000      191,000

Stock based compensation                817,000      490,000      349,000
Amortization expenses                 1,133,000    2,229,000    2,318,000
Interest (revenue) expenses            (614,000)      69,000       77,000
Foreign exchange (gain) loss            542,000     (409,000)      (8,000)
Future income taxes                     (29,000)    (276,000)     (85,000)
Other items                            (581,000)      (2,000)    (210,000)
                                   ---------------------------------------
Net Income (Loss)                    (1,509,000)  (1,568,000)  (2,249,000)
                                   ---------------------------------------
                                   ---------------------------------------
Net Income (Loss ) per share            $(0.022)     $(0.023)     $(0.032)

___________________________________________________________________________________________________

Note 1: Our royalties have decreased by $575,000 explained by the closure of Russian casino in July 2009 for which royalties of $245,000 were recognized in 2009, Station Casinos filed bankrupt which affected our 2010 royalties by $210,000 and by the termination of Paltronics five-years agreement that affected our royalties by $120,000 in 2010 compared to previous year.

Note 2: We use EBITDA (Earnings before Stock option based compensation, Interest, Taxes, Depreciation, Amortization and Foreign exchange) as performance measurements in our financial disclosure. This measure is not recognized under generally accepted accounting principles. The reconciliations above demonstrate how we calculate such measurements from our financial statements.

Balance Sheet

                               Nov. 30, 2008  Nov. 30, 2009  Nov. 30, 2010
                                   (Audited)      (Audited)      (Audited)
                             ---------------------------------------------
                             ---------------------------------------------
Cash and cash equivalents          6,593,000      5,829,000      3,933,000
Current assets (other than
 cash)                             1,920,000      1,696,000      2,001,000
Long-term assets                  17,080,000     14,433,000     12,700,000
                             ---------------------------------------------
Total Assets                     $25,593,000    $21,958,000    $18,634,000
                             ---------------------------------------------
                             ---------------------------------------------

Current liabilities                2,734,000      2,176,000      1,852,000
Long-term liabilities              2,726,000        964,000              0
Shareholders' equity              20,133,000     18,818,000     16,903,000
                             ---------------------------------------------
Total Liabilities and Equity     $25,593,000    $21,958,000    $18,634,000
                             ---------------------------------------------
                             ---------------------------------------------

Number of shares outstanding      70,416,000     69,590,000     69,302,000
                             ---------------------------------------------
                             ---------------------------------------------

ABOUT DEQ

DEQ Systems Corp. (TSX VENTURE: DEQ) is a global provider of gaming technology in over 30 countries. Protected by more than 20 patents in 50 countries, DEQ specializes in progressive and random bonusing systems for table games. DEQ's innovation and ingenuity has been to replace the single dollar coin slot and sensor with its internationally award winning G3™ technology. The G3 incorporates multiple credit betting, dealer hand betting and mystery bonusing. DEQ also commercializes technology and patents including the award winning baccarat revolution, EZ Baccarat™ and related auxiliary products such as EZ Trak™. DEQ is and will continue to lead innovation in the table game bonusing segment of the global gaming market. For further information, please visit www.deq.com.

TSX Venture does not accept any responsibility regarding the accuracy of the information contained in this press release.

Forward-looking statements contained in this Press Release involve known and unknown risks, uncertainties and other factors that may cause actual results, performance and achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the said forward-looking statements.

Contacts: DEQ Systems Corp. Earle G. Hall President & CEO 418-839-3012 earle.hall@deq.com DEQ Systems Corp. Francois Proulx Chief Financial Officer 418-839-3012 francois.proulx@deq.com