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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 and certain shareholders have
received the necessary licenses, permits, and authorizations required to own and
distribute gaming machines in Nevada, New Jersey, Mississippi, Colorado, Iowa,
Indiana, Illinois, New Mexico, Minnesota, and Washington. Additionally, the
Company has received its slot route operator's and operator's licenses in
Nevada. Failure of the Company or any of its key personnel to obtain or maintain
the requisite licenses, permits, and authorizations would have a materially
adverse effect on the Company. Expansion of the Company's activities may be
hindered by delays in obtaining requisite state licenses or the inability to
obtain such licenses. No assurance can be given as to the term for which the
Company's licenses 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
materially 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 and
services, particularly operating leases and Casino Slot Exchange(R). 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 financing 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 or a decline in the public acceptance of gaming
could have a materially 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, and other financing sources. In
addition, the Company desires 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 under acceptable terms. Further,


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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 materially 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 gaming devices
represents a substantial portion of the Company's capital. Under the operating
leases, 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 materially adverse effect on
the Company.

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

         RISKS RELATING TO CASINO SLOT EXCHANGE(R). Casino Slot Exchange(R),
which the Company established in 1997, 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 demand and
other market conditions relating to refurbished gaming machines, the occurrence
of any of which could have a materially adverse effect on the Company.

         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 Native American tribes. Native American 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 Native American tribe defaults and successfully
asserts its right of sovereign immunity, the Company's ability to recover its
investment and originate and sell future Native American 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 materially adverse effect on the Company's financial condition.

         RISKS RELATING TO TABLE GAMES. The Table Games Division, which the
Company established during 2000, has as its core product the Digital Card
SystemTM gaming devices. The Company has a limited operating history with the
product and this new technology and is subject to various risks, including but
not limited to:

         o    The ability of the Company to acquire the regulatory approvals
              needed in certain gaming jurisdictions to market and distribute
              the product or products,
         o    The demand or market acceptance of the product or products,
         o    Other market conditions related to the technology.

         The inability of the Company to overcome any of the above risks could
have a materially adverse effect on the Company's ability to realize its future
prospects in table games.

         DEPENDENCE ON CURRENT MANAGEMENT. The Company's success is largely
dependent on the efforts of Johan P. Finley, its founder 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 materially adverse effect on the Company's
business.


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         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 the completion of brokered transactions. 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
and Chief Executive Officer, owns approximately 29% of the Company's outstanding
common stock. In addition, Mr. Finley's wife and child own approximately 7% 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-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
the 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.