KNBA Kinbasha Gaming International Inc (CE)

Kinbasha
Gaming International, Inc. Announces Milestone
Financial Results for Fiscal Year 2013 

Company Reports Net Income of $11.6 Million and
Fully Diluted EPS of $0.95 for the Fiscal Year Ended March 31, 2013 

HITACHI, Japan ? July 2, 2013
? Kinbasha Gaming
International, Inc. (OTCQX: KNBA), owner and operator of retail pachinko gaming
centers in Japan, has filed its annual report on Form 10-K with the SEC and
released its financial results for its fiscal year ended March 31, 2013.

Summary
of Fiscal Year 2013 Financial Results

?     Net revenues increased to $93.9 million in fiscal 2013,
compared to $91.2 million in fiscal 2012.

?     Net income improved to $11.6 million in fiscal 2013, compared
to a net loss of $6.1 million in fiscal
      2012.

?     Fully diluted earnings per share (EPS) improved to $0.95
in fiscal 2013, compared to a loss of per
       share of $0.82 in fiscal 2012.

Analysis
of Fiscal Year 2013 Financial Results

For the fiscal year ended March
31, 2013, net revenues increased to $93.9 million for the year ended March 31,
2013 from $91.2 million in the year ended March 31, 2012.  Net revenues increased due to an improvement
in gaming revenues, which increased to $90.6 million in fiscal 2013 from $84.6
million in fiscal 2012.  The Company's
increase in net gaming revenues was a result of an increase in total wagers
with a moderate decrease in pay-outs, which more than offset the decrease
resulting from a 5.1% decrease in the yen/dollar exchange rate.

Net income attributable to common shareholders improved to $11.6
million for the year ended March 31, 2013 as compared to a net loss of $6.1 million
in the same period of 2012.  As a result,
fully diluted EPS improved to $0.95 in fiscal 2013, compared to a loss of per
share of $0.82 in fiscal 2012.

The improvement to net income is generally attributed to
enhanced market conditions, an increase in total wagers due to the reopening of
a pachinko parlor that had been closed due to earthquake damage, a $5.2 million
gain on forgiveness of debt, and a non-recurring $3.0 million gain resulting
from a change in the Company's policy for employment termination benefits.  Net income also increased as a result of
improved payout ratios due to a shift in the mix of pachinko machines and the
positive effects of Kinbasha?s marketing programs to promote more cost
effective prize payouts.

?We are extremely pleased to report our breakthrough financial
results for fiscal 2013,? said Masatoshi Takahama, Chief Executive Officer of
Kinbasha. ?Achieving $11.6 million in net income and an EPS of $0.95 is a
milestone achievement for Kinbasha, and a testament to our stated goals of
improving our operations and generating shareholder value.  As we execute our strategic growth
initiatives, we believe the decisions we have made will position Kinbasha to
grow in our proven markets while also reducing expenses and reducing debt.  We believe this will
be a pivotal year for Kinbasha as we continue to improve our financial metrics and
expand our presence in Japan?s gaming sector.?

During the year the Company was able to reduce its total debt
from $159.8 million at March 31, 2012 to $132.3 million as of March 31, 2013.
As of March 31, 2013, the total debt included $109.6 million of principal and
$22.7 million of accrued interest.  For
the past several years, the Company has negotiated with its lenders and in many
cases has obtained formal or informal forbearances and loan modifications that
have allowed it to effectively extend the maturity of its debt through interest
only and/or reduced principal payments. As of the date of this press release,
Kinbasha was not subject to any litigation or foreclosure proceedings with
respect to its debt.

Corporate
Highlights and Recent Events

?        On February 9, 2013, Kinbasha began
trading on the OTCQX, becoming the first SEC-reporting company with a majority
of its operations in Japan to trade on the highest platform offered through OTC
Markets.

?         On March 6, 2013, Kinbasha announced
a $6 million debt settlement agreement in connection with debt owed to Tokyo
Star Bank. As per the agreement, payments from Kinbasha totaled approximately
$737,000, resulting in a net gain on settlement of approximately $5.2 million.

?       On May 20, 2013, Kinbasha announced
that it successfully introduced lower denomination slot machines at two of its
parlors in the greater Tokyo area. Japan is the world's largest market for slot
machines with an installed base of approximately 1.4 million slot machines.

?      On June 20, 2013, Kinbasha announced that
it will introduce the latest title in the "Sea Story" pachinko game
series, which launches in July, throughout its gaming locations in Japan.  The "Sea Story" series by Sanyo is
the longest running and most popular title in the Japanese pachinko industry, generating
over $10 billion in hardware sales since it was first introduced in 1999.

Mr. Takahama concluded, ?As the only US-listed pachinko company
that is SEC-reporting, we have distinct advantages over our competition in Japan
for building awareness in the West, including the mainstream casino industry, as
well as raising capital to fund expansion. 
Going forward in fiscal 2014, Kinbasha?s growth strategy is based on
leveraging the company?s existing brand and operational expertise to build
additional gaming locations in greater metropolitan areas such as Tokyo.?

Earnings
Conference Call

Kinbasha
will host its earnings conference call on July 3, 2013, at 9:30 a.m. Eastern to
discuss its fiscal year-end March 31, 2013 financial results.  The conference call will include a Q&A
session where investors will have the opportunity to ask questions of senior
management.

The
teleconference can be accessed by dialing 877-407-0782 when calling within the
United States or 201-689-8567 when calling internationally.  Please dial in 10 minutes prior to the
beginning of the call. There will be a playback available until July 16,
2013.  To listen to the playback dial
877-660-6853 when calling within the United States or 201-612-7415 when calling
internationally and use replay ID number: 417001.

The
conference call will be simultaneously webcast and available at:
http://www.investorcalendar.com/IC/CEPage.asp?ID=171159

About Kinbasha Gaming
International, Inc.

Based
in Hitachi City, Japan, Kinbasha Gaming International, Inc. (OTCQX: KNBA) is a
retail gaming company that operates 21 pachinko parlors in the Japanese
prefectures of Ibaraki, Tokyo and Chiba. 
For more than 50 years, the company's retail gaming establishments have
offered customers the opportunity to play the games of chance known as pachinko
and pachislo.  Pachinko is played on a
device which resembles a vertical pinball machine and pachislo is played on a
machine that resembles a western style slot machine. Pachinko and pachislo are
collectively ranked as Japan?s largest leisure activity.  For more information on Kinbasha, please
visit: www.kinbashainc.com

For comprehensive investor
relations material, including fact sheets, multimedia resources, and videos
regarding Kinbasha, please follow the appropriate link: Investor Portal, Overview Video and Investor Fact Sheet

Kinbasha
shares are listed on the OTCQX. 
Investors can access free, real-time Level 2 quotes for the company at: www.otcmarkets.com/stock/KNBA/quote

Functional Currency
is Yen

Kinbasha's
functional currency is the yen, and accordingly its earnings and assets are denominated
in yen. As a result, appreciation or depreciation in the value of the yen relative
to the dollar would affect its financial results reported in dollars without
giving effect to any underlying change in its business or results of
operations. For fiscal year 2013, the yen compared to the dollar was weaker
than the yen compared to the dollar for the fiscal year 2012. Accordingly,
Kinbasha's financial position as of March 31, 2013 and the results of its
operations for fiscal year 2013 expressed in dollars were weaker than its
financial position as of March 31, 2012 and the results of operations for
fiscal year 2012.

Safe Harbor Statement

This release contains certain
"forward-looking statements" relating to the business of the Company
and its subsidiary companies. All statements, other than statements of
historical fact included herein are "forward-looking statements"
including statements regarding: the Company's business and operations; business
strategy, plans and objectives of the Company and its subsidiaries; and any
other statements of non-historical information. These forward-looking
statements are often identified by the use of forward-looking terminology such
as "believes," "expects" or similar expressions, involve
known and unknown risks and uncertainties. Although the Company believes that
the expectations reflected in these forward-looking statements are reasonable,
they do involve assumptions, risks and uncertainties, and these expectations
may prove to be incorrect. Investors should not place undue reliance on these
forward-looking statements, which speak only as of the date of this press
release. The Company's actual results could differ materially from those
anticipated in these forward-looking statements as a result of a variety of
factors, including those discussed in the Company's periodic reports that are
filed with the Securities and Exchange Commission and available on its website
(http://www.sec.gov). All forward-looking statements attributable to the
Company or persons acting on its behalf are expressly qualified in their
entirety by these factors. Other than as required under the securities laws,
the Company does not assume a duty to update these forward-looking statements.

Investor
Contact:

Trilogy Capital Partners - Asia
Darren Minton, President
212-634-6413
info@trilogy-capital.com

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