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September 8, 2006 Stock Pick: FortuNet, Inc. (FNET)

Stock Price: $7.99

FortuNet, Inc. is a Las Vegas-based and Nevada-licensed manufacturer of multi-game server- based gaming platforms. FortuNet's gaming platforms include networks of both wireless and stationary player terminals, cashier-based point-of-sale terminals, self-service kiosks and central game file servers.

FortuNet has sustained themselves to this point through the rental and sale of equipment to play bingo. Revenue from this activity totaled $4.0 million for the second quarter, up from $3.6 million during the same period last year.

The company has designed mobile gaming platforms to play traditional casino games, such as keno, poker and slots. However, to profit from this venture, the company must obtain the necessary regulatory approvals within Nevada. Step one, FortuNet has won approval from the Nevada State Gaming Control Board to be a mobile gambling operator.

Step two, the company now faces a vote in the next few weeks at the Nevada Gaming Commission. This commission tends to follow the control board's recommendation. If approval is given, FortuNet will be able to launch wireless gambling gadgets for use in public areas of the state's casino resorts.

There are only 2.93 million FNET shares outstanding due to heavy insider ownership of 74.21%. FNET is down significantly from its 52-week high of $25.95, but with the approval catalyst in the pipeline.

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