1160294--3/31/2008--HERBST_GAMING

related topics

{debt, indebtedness, cash}

{customer, product, revenue}

{regulation, change, law}

{stock, price, operating}

{operation, natural, condition}

{capital, credit, financial}

{personnel, key, retain}

{cost, contract, operation}

{acquisition, growth, future}

{condition, economic, financial}

{stock, price, share}

Our operations have been adversely affected by the general economic downturn in southern California and Nevada. The opinion of our independent auditor with respect to our financial statements for the fiscal year ended December 31, 2007 contains a going concern qualification, which is a default under our credit agreement. If we are unable to negotiate a forbearance with our lenders and they declare an event of default and require repayment of our credit agreement indebtedness, we may not be able to restructure or refinance our indebtedness. Our operations have been adversely affected by the adoption of certain anti-smoking regulations. The success of our route operations is dependent on our ability to renew our contracts. We may experience a loss of market share. Changes to applicable tax laws could have a material adverse effect on our financial condition. We face extensive regulation from gaming and other government authorities. We depend upon our key employees and certain members of our management. Our executive officers and members of our board of directors own 100% of the company and conflicts of interests could arise. The gaming operations and casinos owned by the Company may be adversely impacted if the economy of certain markets declines, which could lead to an adverse impact on the operations of the Company The business of the Sands Regent Casinos and the Primm Casinos may be adversely impacted by expanded Native American gaming operations in California and the Pacific Northwest, which could lead to an adverse impact on the operations of the Company. Adverse winter weather conditions in the Midwest, the Sierra Nevada Mountains and Reno-Lake Tahoe area could have a material adverse effect on the results of operations and financial condition of our casinos, which could lead to an adverse impact on the results of operation and financial condition of the Company. The business of the Primm Casinos may be adversely impacted if their use of water exceed allowances permitted by federal and local governmental agencies or if such governmental agencies impose additional requirements in connection with such use of water, which in each case could lead to an adverse impact on the operations of the Company. We may be unable to obtain slot machines or related technology from our third party supplier on a timely, cost-effective basis. Riverboats and dockside facilities are subject to risks relating to weather or mechanical failure and must comply with applicable regulations. The failure to achieve the anticipated benefits of the past or future acquisition could adversely impact our business. Risks Related to Our Outstanding Indebtedness Our substantial indebtedness could adversely affect our financial health and prevent us from fulfilling our obligations under our outstanding indebtedness. If interest rates rise, the amount of interest paid by us under our credit facility will increase. Our indebtedness imposes restrictive covenants on us.

Full 10-K form ▸

1160294--3/31/2008--HERBST_GAMING_INC