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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 and Minnesota and have license applications pending in
Washington and a route operator's licenses pending 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 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 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
and services, particularly SlotLease and PDS Slot Source, and its new product
Digital 21. 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 could
have a material adverse effect on the Company's business, financial condition
and results of operations.

         CONTINUED AVAILABILITY OF ADEQUATE FINANCING. The Company has
entered into a letter of intent to acquire the stock of Four Queens, Inc.,
which is contingent upon the Company securing financing in amounts and on
terms acceptable to finance the purchase price. In addition, 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 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 finance the
Four Queens, Inc. acquisition, 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 Four Queens,
Inc. acquisition or 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 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

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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.

         Through its PDS Slot Source division, 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 division,
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 gaming
machines, the occurrence of any of which could have a material 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 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 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,
President, and Chief Executive Officer, owns approximately 29% of the Company's
outstanding Common Stock. In addition, Mr. Finley's wife and children 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-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

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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.