861050--3/16/2006--CASH_SYSTEMS

related topics

{regulation, government, change}

{customer, product, revenue}

{operation, international, foreign}

{product, market, service}

{personnel, key, retain}

{cost, operation, labor}

{property, intellectual, protect}

{debt, indebtedness, cash}

{system, service, information}

{product, candidate, development}

{control, financial, internal}

{regulation, change, law}

The cash access industry is subject to change, and we must keep pace with the changes to successfully compete. The loss of our sponsorship into the Visa U.S.A., Visa International and MasterCard card associations could have a material adverse effect on our business. Because of our dependence on certain customers, the loss of a top customer could have a material adverse effect on our revenues and profitability. If we are unable to maintain our current customers on terms that are favorable to us, our business, financial condition and operating results may suffer a material adverse effect. We are not in compliance with certain financial performance covenants under our line of credit with Bank of America, N.A. and do expect to be in compliance with the covenants as of March 31, 2006. An unexpectedly high level of chargebacks could adversely affect our business. If we are unable to protect our intellectual property, we may lose a valuable competitive advantage or be forced to incur costly litigation to protect our rights. Our products and services are complex, depend on a myriad of complex networks and technologies and may be subject to software or hardware errors or failures that could lead to an increase in our costs, reduce our revenues or damage our reputation. We may not realize all of the expected benefits, and we may incur additional costs related to, our acquisition of Indian Gaming Services. Changes in interchange rates may affect our costs of revenues. We are subject to extensive rules and regulations of MasterCard International and Visa U.S.A., which may harm our business. We are subject to regulatory and political risk associated with the majority of our customers being Native American, Sovereign Nations, which may harm our business. We are subject to the performance of third-parties whom we contract through as vendors to some Tribal casinos. Our joint development activities may result in products that are not commercially successful or that are not available in a timely fashion. We depend on our key personnel. Effective internal and disclosure controls are necessary for us to provide reliable financial reports and effectively prevent fraud and to operate successfully as a public company. If we cannot provide reliable financial reports or prevent fraud, our reputation and operating results would be harmed. Risks Related to the Industry Economic downturns, a decline in the popularity of gaming or changes in the demographic profile of gaming patrons could reduce the number of gaming patrons that use our services or the amounts of cash that they access using our services. We are subject to extensive governmental gaming regulation, which may harm our business. Many of the financial services that we provide are subject to extensive rules and regulations, which may harm our business.

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861050--3/16/2006--CASH_SYSTEMS_INC