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                                                                 EXHIBIT 99.1



            PDS FINANCIAL CORPORATION AND CONSOLIDATED SUBSIDIARIES


                             CAUTIONARY STATEMENTS


  As provided for under the Private Securities Litigation Reform Act of 1995,
the Company wishes to caution investors that the following important risk
factors, among others, in some cases have affected and in the future could
affect the Company's actual results of operations and cause such results to
differ materially from those anticipated in the forward-looking statements
made in this document and elsewhere by or on behalf of the Company.

     STRICT REGULATION BY GAMING AUTHORITIES.  Financing gaming equipment and
supplying reconditioned gaming machines to casino operators in the United
States are subject to strict regulation under various state, county and
municipal laws.  The Company and its required officers have received the
licenses, permits and authorizations required to own and distribute gaming
machines in Nevada, New Jersey, Colorado, Iowa and Minnesota and have license
applications pending in Mississippi and Indiana.  Failure of the Company or
any of its key personnel to obtain or maintain the requisite licenses would
have a material adverse effect on the Company.  Expansion of the Company's
activities may be hindered by delays in obtaining requisite state licenses.
No assurance can be given as to the term for which the Company's license will
be renewed in a particular jurisdiction or as to what license conditions, if
any, may be imposed by such jurisdiction in connection with any future
renewals.   The Company cannot predict the effects that adoption of and
changes in gaming laws, rules and regulations might have on its future
operations.

     COMPETITION.  In recent years the Company has focused solely on
providing financing to the gaming industry and, since late 1997, supplying
reconditioned gaming machines to casino operators in the United States.  In
the gaming equipment financing market, the Company competes primarily with
equipment manufacturers and to a lesser extent with leasing companies,
commercial banks and other financial institutions.  Certain of the Company's
competitors are significantly larger and have substantially greater resources
than the Company. With respect to the sales of reconditioned gaming machines,
the Company competes primarily against equipment manufacturers and smaller
distributors. It is possible that new competitors may engage in gaming
equipment financing or the distribution of reconditioned gaming machines,
some of which may have licenses to own or sell gaming equipment and have
greater financial resources than the Company.  Significant competition
encountered by the Company may have a material adverse effect on the Company.
There can be no assurance that the Company will be able to compete
successfully against current and future competitors.

     DEMAND  FOR THE COMPANY'S PRODUCTS AND SERVICES.  The Company believes
that its ability to increase revenues, cash flow and profitability will
depend, in part, upon continued market acceptance of the Company's products


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and services, particularly SlotLease and PDS Slot Source.  There can be no
assurance that the market acceptance of the Company's products and services
will continue.   Changes in market conditions in the gaming industry and in
the financial condition of casino operators, such as consolidation within the
industry or other factors, could limit or diminish market acceptance of these
products and services.  Historically, the Company has experienced significant
nonrecurring revenues in connection with its financings and sales of gaming
equipment to casino operators.  The Company has attracted new customers to
replace these nonrecurring revenues.  Insufficient market acceptance of the
Company's products and services could have a material adverse effect on the
Company's business, financial condition and results of operations.

     CONTINUED AVAILABILITY OF ADEQUATE FINANCING.  The amount and number of
financing transactions that can be originated by the Company are directly
dependent upon and limited by its ability to fund such transactions, either
through the sale of such transactions to institutional investors or through
the Company's working capital, lines of credit or other financing sources.
In addition, the Company desires to expand its lines of credit to allow it to
hold a greater volume of transactions, particularly leases, in its portfolio.
There is no assurance that the Company's present funding sources will be
willing to purchase future transactions, expand existing lines of credit or
continue to provide the Company with a source of funds.  Further, there can
be no assurance that the Company would be able to locate new funding sources,
if needed.  As a result, funding for the Company's transactions may not be
available on acceptable terms or on a timely basis if at all.  The inability
of the Company to obtain suitable and timely funding for its transactions
could have a material adverse effect on the Company's operations.

     ABILITY TO RECOVER INVESTMENT IN EQUIPMENT.  The gaming equipment leased
under operating leases by the Company and the inventory of reconditioned
gaming machines represents a substantial portion of the Company's capital.
Under the operating leases offered through the SlotLease program, the Company
retains title to the gaming equipment and assumes the risk of not recovering
its entire investment in the gaming equipment through either re-leasing or
selling the gaming equipment.  At the inception of each operating lease, the
Company estimates the residual value of the leased equipment, which is the
estimated market value of the equipment at the end of the initial lease term.
The actual residual value realized may differ from the estimated residual
value, resulting in a gain or loss when the leased equipment is sold or
re-leased at the end of the lease term.  The inability to re-lease or sell
the gaming equipment on favorable terms could have a material adverse effect
on the Company.

     The Company also engages in the purchase, reconditioning and resale of
used gaming machines.  There can be no assurances that the Company will be
able to recover its cost for such gaming machines, and the failure to do so
could have a material adverse effect on the Company.

     RISKS RELATING TO PDS SLOT SOURCE.  The PDS Slot Source program, which
the Company established in 1997, has a limited operating history and is
subject to various risks, including the inability to find adequate sources of
used gaming machines, the inability to obtain or delays in obtaining parts
necessary to refurbish used gaming machines, competitors' control over the
supply of certain parts and changes in market conditions relating to
refurbished gaming machines, the occurrence of any of which could have a
material adverse effect on the Company.

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     RISKS RELATING TO FINANCING TRANSACTIONS. The Company has funded
selected gaming equipment transactions entirely with its own working capital
or with borrowed funds rather than immediately selling the transactions to
institutional investors.  In certain situations, the Company retains a
portion of the transactions it originates.  This approach requires
substantial capital and places the Company at risk for its investment in the
transactions, which may subject the Company to greater loss in the event of a
default by the lessee or borrower, or an inability to sell the transactions
to institutional investors after a period of temporary investment by the
Company.  In connection with its financing transactions, the Company's level
of risk depends primarily on the creditworthiness of the lessee or borrower
and the underlying collateral.

     In addition, the Company has provided, and may provide in the future,
financing to Indian tribes.  Indian tribes in the United States generally
enjoy sovereign immunity from lawsuits, similar to that of the United States
government.  Although the Company generally obtains a waiver of sovereign
immunity, there can be no assurance that a tribe will not assert sovereign
immunity, even if such right has been waived.  The law regarding sovereign
immunity is unsettled.  If any Indian tribe defaults and successfully asserts
its right of sovereign immunity, the Company's ability to recover its
investment and originate and sell future Indian gaming transactions could be
materially adversely affected.

     No assurance can be given that the Company will not incur significant
losses with respect to financing transactions in the future, or that such
losses will not have a material adverse effect on the Company's financial
condition.

     DEPENDENCE ON CURRENT MANAGEMENT.  The Company's success is largely
dependent on the efforts of Johan P. Finley, its founder, President and Chief
Executive Officer.  Although the Company maintains $2 million of "key person"
life insurance and has an employment agreement with Mr. Finley, the loss of
Mr. Finley's services could have a material adverse effect on the Company's
business.

     POTENTIAL FLUCTUATIONS IN RESULTS.  The Company's quarterly results have
historically fluctuated due to the timing of completion of large financing
transactions, as well as the timing of recognition of the resulting fee
income upon subsequent sale of a transaction, which can occur several months
after the date such transaction was originated by the Company.  These
transactions can be in the negotiation and documentation stage for several
months, and recognition of the resulting fee income by the Company is
difficult to predict and may fluctuate greatly from quarter to quarter.
Thus, the results of any quarter are not necessarily indicative of the
results that may be expected for any other interim period.  See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

     CONTROL BY CURRENT MANAGEMENT.  Johan P. Finley, the Company's founder,
President, and Chief Executive Officer, owns approximately 31% of the
Company's outstanding Common Stock.  In addition, Mr. Finley's wife and child
own approximately 10% of the Company's outstanding Common Stock.  Thus, Mr.
Finley effectively controls the election of all members of the Company's
Board of Directors and determines all corporate actions.  Such ownership may
discourage acquisition of large blocks of the Company's securities and may
depress the price of the Common Stock and have an anti-


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takeover effect.

     ANTI-TAKEOVER PROVISIONS; PREFERRED STOCK. The Company's Amended and
Restated Articles of Incorporation provide that no investor may become a
holder of 5% or more of the Company's stock without first agreeing to consent
to a background investigation, provide a financial statement and respond to
questions from gaming regulators.  Such ownership limitations may discourage
acquisition of large blocks of the Company's equity securities, may depress
the price of the Company's Common Stock and have an anti-takeover effect.

     The Company's Amended and Restated Articles of Incorporation authorize
Board of Directors to issue preferred stock and establish the rights and
preferences of such shares without stockholder approval.  The voting rights
of the preferred stock may be greater than the voting rights of common stock
in certain circumstances, and thus the issuance of preferred stock may
diminish the voting power of holders of common stock and make it more
difficult for a third party to acquire the Company.

     The Company's directors are subject to investigation and review by
gaming regulators in jurisdictions in which the Company is licensed or has
applied for a license.  Such investigation and review of the Company's
directors may have an anti-takeover effect.

     As a Minnesota corporation, the Company is subject to certain
"anti-takeover" provisions of the Minnesota Business Corporation Act.  These
provisions and the power to issue additional stock and to establish separate
classes or series of stock may, in certain circumstances, deter or discourage
takeover attempts and other changes in control of the Company not approved by
the Board.