<p align= justify >According to a press release dated June 4, 2007, the Complaint alleges that during the class period, Defendants, Shuffle Master Inc. and certain officers, inflated reported profits, by among other things, booking an inter-company transfer of inventory that took place on the last day of the fiscal year ended October 31, 2006, as if it were a sale to a third party.</p> <p align= justify >The complaint alleges that in particular, defendants: (1) through the October 31, 2006 transaction, along with several other transactions for which the company improperly accounted, inflated Shuffle Master’s quarterly earnings per share by 50% and year-end earnings per share by 35%; and (2) the fraudulent booking of inter-company transactions arose out of Shuffle Master’s tax avoidance scheme, whereby the Company transferred profits that were otherwise taxable in the U.S., to foreign countries where profits would be taxed at a much lower rate, if at all. On March 12, 2007, Shuffle Master admitted that it had improperly booked the October 31, 2006 transaction, and that it would have to restate reported results for the fourth quarter and fiscal year end 2006. The company further admitted that its internal controls were defective. In response, Shuffle Master’s stock fell 8%.</p>