912241--3/31/2006--PROGRESSIVE_GAMING_INTERNATIONAL

related topics

{stock, price, share}

{property, intellectual, protect}

{debt, indebtedness, cash}

{product, candidate, development}

{stock, price, operating}

{system, service, information}

{customer, product, revenue}

{regulation, change, law}

{competitive, industry, competition}

{regulation, government, change}

{product, market, service}

{financial, litigation, operation}

{operation, international, foreign}

{acquisition, growth, future}

{provision, law, control}

{personnel, key, retain}

{cost, contract, operation}

{cost, operation, labor}

{investment, property, distribution}

If our current or proposed products or technologies do not receive regulatory approval, our revenue and business prospects will be adversely affected. If our products or technologies currently in development do not achieve commercial success, our revenue and business prospects will be adversely affected. We may not be successful in forming or maintaining strategic alliances with other companies, which could negatively affect our product offerings and sales. If any conflicts arise between us and any of our alliance partners, our reputation, revenues and cash position could be significantly harmed. If our remaining license agreements with Hasbro, Inc. and other content providers are terminated or are not renewed, or if we breach our obligations under any license agreement, our revenues could be reduced. Our failure to protect, maintain and enforce our existing intellectual property or secure, maintain and enforce such rights for new proprietary technology could adversely affect our future growth and success. If we are unable to effectively promote our trademarks, our revenues and results of operations may be materially adversely affected. Our competitors may develop non-infringing products or technologies that adversely affect our future growth and revenues. We may incur significant litigation expenses protecting our intellectual property or defending our use of intellectual property, which may have a material adverse effect on our cash flow. If we are found to be infringing on a third-party s intellectual property rights, we may be forced to discontinue certain products or technologies, pay damages or obtain a license to use the intellectual property, any of which may adversely affect our future growth and revenues. Some of our products may contain open source software which may be subject to restrictive open source licenses requiring us to make our source code available to third parties and potentially granting third parties certain rights to the software. We depend upon our ability to obtain licenses for popular intellectual properties and our failure to secure such licenses with acceptable terms could adversely affect our future growth and success. The Public Company Accounting Oversight Board, or PCAOB, is conducting an inspection of our external auditors BDO Seidman LLP and their audit of our financial statements as of and for the year ended December 31, 2004. We operate in a highly competitive market and may be unable to successfully compete which may harm our operating results. Our cash flow from operations and available credit may not be sufficient to meet our capital requirements and, as a result, we could be dependent upon future financing, which may not be available. If gaming operators cancel the placement of our games or do not agree to recurring revenue arrangements, our revenues and growth could be adversely affected. The gaming industry is highly regulated, and we must adhere to various regulations and maintain our licenses to continue our operations. Future authorizations or regulatory approvals may not be granted in a timely manner or at all which would adversely affect our results of operations. Enforcement of remedies or contracts against Native American tribes could be difficult. Our business is closely tied to the casino industry and factors that negatively impact the casino industry may also negatively affect our ability to generate revenues. The gaming industry is sensitive to declines in the public acceptance of gaming. Public opinion can negatively affect the gaming industry and our future performance. Economic, political and other risks associated with our international sales and operations could adversely affect our operating results. Holders of our common stock are subject to the requirements of the gaming laws of all jurisdictions in which we are licensed. We may not realize the benefits we expect from the acquisitions of VirtGame and EndX. Future acquisitions could prove difficult to integrate, disrupt our business, dilute stockholder value and strain our resources. Our business will be seriously jeopardized if we are unable to attract and retain key employees. If our products or technologies contain defects, our reputation could be harmed and our results of operations adversely affected. As our business is subject to quarterly fluctuation, our operating results and stock price could be volatile, particularly on a quarterly basis. We have substantial debt and debt service requirements, which could have an adverse impact on our business and the value of our common stock. We may be forced to reduce or delay growth initiatives and capital expenditures, obtain additional equity capital or restructure our debt if we are unable to generate sufficient cash flow to meet our debt service requirements. Our lenders have imposed numerous debt covenants that include financial and operating restrictions that may adversely affect how we conduct our business and potentially reduce our revenues and affect the value of our common stock. We have been named as a defendant in litigation that could result in substantial costs and divert management s attention and resources. Risks Relating to Our Securities The share price of our common stock may be volatile and could decline substantially. If our quarterly results are below the expectations of securities market analysts and investors, the price of our common stock may decline. Future sales of our common stock may depress our stock price. If a recent action of an employee of one of our underwriters is held to be gun jumping in violation of the Securities Act of 1933 or to constitute a prospectus that does not meet the requirements of the Securities Act, we could be required to repurchase the securities sold in our recent common stock offering. We have the ability to issue additional equity securities, which would lead to dilution of our issued and outstanding common stock. We do not intend to pay cash dividends. As a result, stockholders will benefit from an investment in our common stock only if it appreciates in value. Anti-takeover provisions in our organizational documents, our stockholder rights plan and Nevada law could make a third-party acquisition of us difficult and therefore could affect the price investors may be willing to pay for our common stock.

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912241--3/31/2006--PROGRESSIVE_GAMING_INTERNATIONAL_CORP