**UNITED
STATES**


**SECURITIES
AND EXCHANGE COMMISSION**


**Washington,
D.C. 20549**





**FORM
10-KSB/A**





X
    ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the fiscal year ended
    December
      31, 2004TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the transition period from
    
    toCommission
      file number
    000-25855VendingData
      Corporation(Name
      of small business issuer in its charter)Nevada
    
    91-1696010(State
      or other jurisdiction of incorporation or organization)
    
    (I.R.S.
      Employer Identification No.)6830
      Spencer Street, Las Vegas, Nevada
    
    89119(Address
      of principal executive offices)
    
    (Zip
      Code)
  Issuer’s
      telephone number:
    (702)
      733-7195Securities
      registered under Section 12(b) of the Exchange
Act:
 Title
      of each class
    
    Name
      of each exchange on which registeredSecurities
      registered under Section 12(g) of the Exchange Act:Common
      Stock, $.001 par value(Title
      of each class)(Title
      of each class)Check
      whether the issuer (1) filed all reports required to be filed by Section
      13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
      months (or for such shorter period that the registrant was required to
      file such reports), and (2) has been subject to such filing requirements
      for the past 90 days. Yes xNo oCheck
      if there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B is not contained in this form, and no disclosure will be
      contained, to the best of the registrant’s knowledge, in definitive proxy
      or information statements incorporated by reference in Part III of this
      Form 10-KSB or any amendment to this Form 10-KSB. oState
      issuer’s revenues for its most recent fiscal year:
    $5,487,111State
      the aggregate market value of voting stock held by non-affiliates computed
      by reference to the average bid and asked price of such common equity, as
      of a specified date within the past 60 days. $16,881,668 ($1.86 per share
      as of April 8, 2005).State
      the number of shares outstanding of each of the issuer’s classes of common
      stock, as of the latest practicable date.Common
      Stock, $.001 par value
    
    16,751,505
      shares as of April 8, 2005**DOCUMENTS
      INCORPORATED BY REFERENCE**None.Transitional
      SmallBusiness
      Disclosure Format (check one):  Yes
      o No x





****


**EXPLANATORY
NOTE:** VendingData Corporation, a Nevada corporation, is amending its Annual Report on
Form 10-KSB, as originally filed with the Securities and Exchange Commission on
March 31, 2005, for the purposes of: (1) indicating the date of the Report
of Independent Registered Public Accounting Firm as February 18,  2005; (2)
providing the information required by Part III of Form 10-KSB, as such
information will not be incorporated by reference to a proxy statement for the
company’s 2005 Annual Meeting of Stockholders filed with the Securities and
Exchange Commission within 120 days after December 31, 2004; and (3)
updating the Exhibit Index to include additional material agreements. This
amendment does not include items from the original Form 10-KSB that are not
being hereby amended.





****


TABLE OF CONTENTS




**Page**
      ******PART
      II**
      ****
    **3**Item
      7. Financial
      Statements
    3**PART
      III**
      ****
    **4**Item
      9.       Directors, Executive Officers,
      Promoters and Control Persons; Compliance with Section 16(a) of the
      Exchange Act
    4Item
      10.     Executive Compensation
    7Item
      11.     Security Ownership of Certain Beneficial Owners and
      Management and Related Stockholder Matters
    9Item
      12.     Certain Relationships and Related
      Transactions
    11Item
      13.     Exhibits and Reports on Form
      8-K
    14Item
      14.     Principal Accountant Fees and
      Services
    15**EXHIBIT
      INDEX**
    **19**





2





**PART
II**




**ITEM 7.**
    **FINANCIAL
      STATEMENTS**




****


**REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**







Board of
Directors and Stockholders


VendingData
Corporation




We have
audited the balance sheets of VendingData Corporation as of December 31, 2004
and 2003, and the related statements of operations, changes in stockholders'
equity, and cash flows for the years then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.




We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, audits of its internal control
over financial reporting. Our audits included consideration of internal control
over financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.




In our
opinion, the financial statements referred to above, present fairly, in all
material respects, the financial position of VendingData Corporation as of
December 31, 2004 and 2003, and the results of its operations and cash flows for
the years then ended, in conformity with accounting principles generally
accepted in the United States of America.





/s/
Piercy Bowler Taylor & Kern




Piercy
Bowler Taylor & Kern




Certified
Public Accountants and Business Advisors




Las
Vegas, Nevada


February
18, 2005





3





**PART
III**




**ITEM
      9.**
    ****DIRECTORS,
      EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION
      16(A) OF THE EXCHANGE
ACT****




The
following information is furnished with respect to each member of our board of
directors, including our principal executive officer who is also a director.
Each member of our board of directors serves a one year term until his successor
is duly elected and appointed at our next annual meeting of stockholders. There
are no family relationships between or among any of our directors.




**Directors**




**Name**
    
    **Age**
    
    **Director
      Since**
    
    **Position**Mark
      R. Newburg
    
    50
    
    2005
    
    Executive
      Director (Principal Executive Officer)James
      E. Crabbe
    
    59
    
    2000
    
    Chairman
      of the Board of DirectorsRonald
      O. Keil
    
    72
    
    1998
    
    DirectorBob
      L. Smith
    
    67
    
    1998
    
    Vice-Chairman
      of the Board of Directors





***Mark
R. Newburg***joined
our board of directors as Executive Director in March 2005 and was appointed
Treasurer in April, 2005.Mr.
Newburg has also served as the president and chief executive officer and as a
member of the board of directors of VirtGame Corp. since August 2004. Although
Mr. Newburg oversees all aspects of our operations, Mr. Newburg will
maintain his role with VirtGame Corp. until the second quarter of 2005, the
expected time at which the company is to complete its acquisition by Progressive
Gaming International Corporation. From March 2003 to November 2004,
Mr. Newburg served as chief operating officer to Left Right Marketing
Technologies, an internet retailing start-up in Las Vegas. From April 2002 to
March 2003, Mr. Newburg was president and chief executive officer of
C2Consulting Inc., a firm specializing in areas such as strategic planning,
change management, organizational integration, international, and organizational
alignment. From July 2001 to March 2002, Mr. Newburg served as president of
Aristocrat Technologies Inc, an Australia based designer, builder and marketer
of proprietary software and hardware to the international gaming market.
Previously, Mr. Newburg had a 20 year career at NCR, a $5.9 billion
provider of store automation, self-service, payment, and data-warehousing
solution. Mr. Newburg earned his MBA from the University of Dayton in June 1985,
and dual undergraduate majors with a BS in both Accounting & Business
Administration from the University of Findlay in June 1976.




***James
E. Crabbe*** became a
member and Vice-Chairman of our board in May 2000 and was elected Chairman of
our board in August 2001. Mr. Crabbe is currently engaged in the active
management of his personal investment portfolio. He spent 34 years in the money
management business. In 1980, he co-founded the Crabbe-Huson Group, Inc., an
investment management company, of which he served as president, portfolio
manager and analyst until his retirement in 2000. Mr. Crabbe earned his
bachelor’s degree from the University of Oregon in 1967. He currently serves on
the board of directors of Viewpoint Corporation, a publicly traded software
company.




***Ronald
O. Keil*** has been
a member of our board since April 1999. Since March 1995, Mr. Keil has
served as Managing Partner of RJL Properties, Inc., which owned and operated
four hotels and a mini-storage facility all of which were sold between 1995 and
1997. In addition, from October 1993 to January 1998, Mr. Keil owned a
142-room Holiday Inn in Idaho Falls and since 1999 has owned and operated
Keil’s, Inc., a chain of supermarkets in California. Mr. Keil is a founder
and director of the Bank of Clark County, Oregon. He earned a bachelor’s degree
in Business Administration from Lewis and Clark College and has completed
graduate work towards a Master of Business Administration from the University of
Oregon.




4


***Bob
L. Smith*** joined
our board in May 1998 and served as Chairman of our board from April 1999 until
August 2001, when he became Vice-Chairman of our board. Mr. Smith also
serves as Chairman and Chief Executive Officer of VIP’s Industries, Inc., a
company co-founded by Mr. Smith in 1968 that oversees restaurant, hotel and
real estate development in five Western states. Mr. Smith serves on the
Boards of Directors of Flying J., Inc., an integrated oil company, and Regency
of Oregon (formerly Blue Cross and Blue Shield of Oregon), and previously served
on the Boards of Directors of the Crabbe-Huson Funds, Inc., an investment
management company, and Centennial Bank (now Umpqua Bank). Mr. Smith
received a bachelor’s degree in Business Administration from the University of
Oregon in 1962.




**Significant
Employees**




***Douglas
H. Caszatt*** has been
our Acting chief financial officer since May 2004, our secretary since November
2004 and our controller since December 2003. From 1984 to November 2003,
Mr. Caszatt was employed by Alcoa Aluminum in multiple capacities,
including plant controller, cost analyst and accounting manager, in the United
States and overseas. Mr. Caszatt received a bachelor’s degree in business
administration from Michigan State University in 1977.




5


**Board
of Directors and Committees of the Board**




Our
business affairs are conducted under the direction of our board of directors.
The role of our board of directors is to effectively govern our affairs for the
benefit of our stockholders and, to the extent appropriate under governing law,
of other constituencies, which include our employees, customers, suppliers and
creditors. Our board strives to ensure the success and continuity of our
business through the selection of a qualified management team. It is also
responsible for ensuring that our activities are conducted in a responsible
ethical manner. Our board of directors has three standing committees, an audit
committee and a nominating committee and has recently formed a compensation
committee that will replace the executive committee.




Our board
of directors met six times in 2004. All of the incumbent directors attended the
meetings during the period for which they have been a director and the meetings
held by committees of the board of directors on which they serve.




**Audit
Committee.** The audit
committee is comprised of Messrs. Keil and Smith. Mr. Keil serves as
the audit committee chair. Our audit committee generally meets quarterly, and in
2004, our audit committee held seven meetings. As stated in the audit committee
charter, our audit committee has the responsibility of selecting the firm that
will serve as our independent public accountants, approving and reviewing the
scope and results of the audit and any nonaudit services provided by the
independent public accountants and meeting with our financial staff to review
internal control, procedures and policies.




Although
we have not identified a member of our audit committee as the audit committee
financial expert, we are currently reviewing whether one of our members
qualifies as an audit committee financial expert pursuant to Item 401(b)(2) of
Regulation S-B. In addition, we are currently searching for a third member to
our audit committee who will also qualify as the audit committee financial
expert.




The
members of our audit committee are independent, as independence for audit
committee members is defined in Section 121A of the American Stock Exchange
Company Guide. In addition, Messrs Keil and Smith both meet the definition
of “financially sophisticated” as defined in Section 121B of the American Stock
Exchange Company Guide.




**Nominating
Committee.** In
January 2004, our board of directors created a nominating committee and
appointed Messrs. Keil and Smith to serve on the nominating committee.
Mr. Smith serves as the nominating committee chair. The nominating
committee is responsible for assisting our board of directors with respect to
the appropriate size and composition of our board and monitoring and making
recommendations regarding the performance of our board. In this regard, our
nominating committee evaluates the qualifications of all proposed candidates for
election to our board of directors, including capability, availability to serve,
conflicts of interest and other relevant factors.




In 2004,
our nominating committee held two meetings. The members of our nominating
committee are independent, as independence for directors is defined in Section
121A of the American Stock Exchange Company Guide.




6


**Compensation
of Directors**




Our
non-employee members of our board of directors receive an initial grant of 1,000
options and an annual grant of 10,000 options on the date of the annual or
special meeting of stockholders at which directors are elected. The exercise
price shall be the then-current market price of our common stock. Our directors
are not reimbursed for their expenses related to their services as directors or
meeting attendance. Members of our board of directors that are employees do not
receive compensation for their services as directors.




**Section
16(a) Beneficial Ownership Reporting Compliance**




Rules
adopted by the SEC under Section 16(a) of the Securities Exchange Act of 1934,
or the Exchange Act, require our officers and directors, and persons who own
more than 10% of the issued and outstanding shares of our equity securities, to
file reports of their ownership, and changes in ownership, of such securities
with the Securities and Exchange Commission on Forms 3, 4 or 5, as appropriate.
Such persons are required by the regulations of the Securities and Exchange
Commission to furnish us with copies of all forms they file pursuant to
Section 16(a).




Based
solely upon a review of Forms 3, 4 and 5 and amendments thereto furnished to us
during our most recent fiscal year, and any written representations provided to
us, we believe that all of the officers, directors, and owners of more than ten
percent of the outstanding shares of our common stock are in compliance with
Section 16(a) of the Exchange Act for the year ended December 31,
2004.




**Code
of Ethics**




We have
adopted a Code of Ethics that applies to our board of directors, chief executive
officer, chief financial officer, controller and any other individual serving in
similar capacities. The Code of Ethics is designed to serve as the foundation of
our standards of behavior and to promote honest and ethical conduct, proper
disclosure of financial information in our periodic reports, and compliance with
applicable laws, rules, and regulations by our directors and senior officers who
have operating and financial responsibilities. On April 28, 2005, our board
amended and restated our Code of Ethics so that it now applies to all directors,
officers and employees.




7





**ITEM
      10.**
    **EXECUTIVE
      COMPENSATION**




**Summary
Compensation Table**




The
following table sets forth the compensation awarded to, earned by or paid to,
our chief executive officer and our other executive officers earning in excess
of $100,000 for services rendered in all capacities during fiscal years ended
December 31, 2004, 2003 and 2002. We provide certain perquisites and other
personal benefits to some or all of our executives. The unreimbursed incremental
cost to us of providing perquisites and other personal benefits did not exceed,
as to any of the executives for any year, the lesser of $50,000 or 10% of the
total salary and bonus paid to such executive for such year.




**Annual
      Compensation**
    
    
    **Long -Term
      Compensation****Name
      and Principal Position**
    
    
    
    
    **Year**
    
    
    **Salary**
      
      
      **($)**
    
    
    **Bonus**
      **($)**
    
    
    **Securities
      Underlying Options/SARs (#)**
    
    
    **All
      Other Compen-sation**
      **($)**Mark
      R. Newburg
    
    
    
    
    2004
    
    
    —
    
    
    —
    
    
    —
    
    
    —Executive
      Director
    
    
    
    
    2003
    
    
    —
    
    
    —
    
    
    —
    
    
    —(Principal Executive
Officer)
    
    
    
    
    2002
    
    
    —
    
    
    —
    
    
    —
    
    
    —Steven
      J. Blad
    
    
    
    
    2004
    
    
    340,400
    
    
    —
    
    
    —
    
    
    —Chief
      Executive Officer,
    
    
    
    
    2003
    
    
    282,000
    
    
    7,800
    
    
    500,000
    
    
    —President and Director
    
    
    
    
    2002
    
    
    282,000
    
    
    —
    
    
    133,000
    
    
    —





On March
25, 2005, Mr. Blad resigned as our Chief Executive Officer, as our President and
as a member of our board of directors, and Mr. Newburg was appointed to our
board of directors as Executive Director. In his role as Executive Director, Mr.
Newburg oversees all aspects of our operations.




**Option
Grants In Last Fiscal Year**




During
the fiscal year ended December 31, 2004, we did not issue any stock options to
the executive officers named in the above summary compensation
table.




**Aggregated
Option/SAR Exercises In Last Fiscal Year and FY-End Option/SAR Values**




The
following table sets forth information regarding exercises of stock options and
stock appreciation rights, or SARs, during the fiscal year ended
December 31, 2004 made to the named executive officers.




**Name**
    
    **Shares
      Acquired on Exercise (#)**
    
    **Value
      Realized ($)**
    
    **Number
      of Securities Underlying Unexercised Options/SARs as of December 31, 2004
      (#)**
    
    **Value
      of Unexercised In-the-Money Options as of December 31, 2004
      ($)****Exercisable**
    
    **Unexercisable**
    
    **Exercisable**
    
    **Unexercisable**Steven
      J. Blad
    
    —
    
    —
    
    645,000
    
    400,000
    
    $180,000
    
    $
      0





8


The
values for “in-the-money” options held as of December 31, 2004 represent the
positive spread between the respective exercise/base prices of outstanding
options and the estimated fair market value of $2.20 as of December 31,
2004.




**Employment
Agreements**




On March
25, 2005, we entered into a resignation agreement with Steven J. Blad in which
we permitted Mr. Blad to resign as our Chief Executive Officer, as our President
and as a member of our board of directors. In addition to the resignation
agreement, we entered into a six-month consulting agreement with Mr. Blad for
the purposes of, among other things, transitioning the administration of our
manufacturing facilities in China and assisting with certain international sales
matters. The consulting agreement provides for six equal payments of $16,666.66
and additional payments of up to $100,000 upon the satisfaction of certain
milestones related to our manufacturing facilities in China. The consulting
agreement also provides for a commission of up to 2.5% of the revenue received
from sales by Technical Casino Supplies Ltd., an affiliate of TCSJohnHuxley,
pursuant to the Distribution Agreement dated January 21, 2005. The consulting
agreement may be terminated in advance of the six-month term upon the death,
disability or incapacity of Mr. Blad, an uncured breach of the agreement by
Mr. Blad, 30 day written notice from either party or any denial, revocation
or suspension of a license, qualification or certificate of suitability to Mr.
Blad by any gaming regulatory agency.




On
February 4, 2005, we entered into a consulting agreement with Mark R. Newburg
through which Mr. Newburg was to provide us with detailed independent analysis
of our operational matters. Pursuant to the consulting agreement, we agreed to
provide an initial payment of $20,000, provide monthly compensation of $10,000
beginning on March 1, 2005, $20,000 monthly effective April 1, 2005, and
issued options to purchase 300,000 shares of common stock at an exercise price
of $1.49 per share. Although Mr. Newburg was appointed to our board of directors
as Executive Director on March 25, 2005 and oversees all aspects of our
operations, Mr. Newburg will continue to be compensated pursuant to the terms of
this consulting agreement. We will enter into a formal employment agreement with
Mr. Newburg upon the conclusion of his employment with VirtGame Corp. On
April 28, 2005, our Board of Directors, without Mr. Newburg participating,
granted to Mr. Newburg an additional option to purchase 200,000 shares of our
common stock at an exercise price of $1.85 per share.




9





**ITEM
      11.**
    ****SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER
MATTERS****




**Equity
Compensation Plan Information**




We have
two stock options plans, the Amended and Restated 1999 Stock Option Plan and the
Amended and Restated 1999 Directors’ Stock Option Plan, through which 3,000,000
shares and 300,000 shares are authorized, respectively. Pursuant to our stock
options plans, as of December 31, 2004, there were options outstanding to
purchase 2,205,140 shares of our common stock with a weighted average exercise
price per share of $3.48 and options remaining to purchase 1,093,500 shares of
our common stock.




The
following table sets forth certain information as of December 31, 2004
about our equity compensation plans under which our equity securities are
authorized for issuance.




****
    
    
    **(a)**
    
    
    **(b)**
    
    
    **(c)**
    ******Plan
      Category**
    
    
    **Number
      of securities to be issued upon exercise of outstanding options, warrants
      and rights**
    
    
    **Weighed-average
      exercise price of outstanding options, warrants and
      rights**
    
    
    **Number
      of securities remaining available for future issuance under equity
      compensation plans (excluding securities reflected in column
      (a))**
    ****Equity
      compensation plans approved by security holders
    
    
    2,205,140
    
    $
    3.48
    
    
    1,093,500Equity
      compensation plans not approved by security holders
    
    
    —
    
    
    —
    
    
    —**Total**
    
    
    2,205,140
    
    $
    3.48
    
    
    1,093,500




The first
column reflects outstanding stock options to purchase 2,039,940 shares and
165,200 shares of common stock pursuant to our Amended and Restated 1999 Stock
Option Plan and our Amended and Restated 1999 Directors’ Stock Option Plan,
respectively, that have been approved by our stockholders.




The third
column reflects 960,060 shares and 134,800 shares remaining for issuance under
our Amended and Restated 1999 Stock Option Plan and our Amended and Restated
1999 Directors’ Stock Option Plan, respectively, that have been approved by our
stockholders.




**Beneficial
Ownership**




The table
below sets forth the beneficial ownership of our common stock, as of April 8,
2005, by:




·
    All
      of our directors and executive officers, individually;




·
    All
      of our directors and executive officers, as a group;
and




·
    All
      persons who beneficially owned more than 5% of our outstanding common
      stock.




10


The
beneficial ownership of each person was calculated based on 16,751,505 shares of
our common stock outstanding as of April 8, 2005, according to the record
ownership listings as of that date and the verifications we solicited and
received from each director and executive officer. The SEC has defined
“beneficial ownership” to mean more than ownership in the usual sense. For
example, a person has beneficial ownership of a share not only if he owns it in
the usual sense, but also if he has the power to vote, sell or otherwise dispose
of the share. Beneficial ownership also includes the number of shares that a
person has the right to acquire within 60 days of April 8, 2005 pursuant to the
exercise of options or warrants or the conversion of notes, debentures or other
indebtedness, but excludes stock appreciation rights. Two or more persons might
count as beneficial owners of the same share. Unless otherwise noted, the
address of the following persons listed below is c/o VendingData Corporation,
6830 Spencer Street, Las Vegas, Nevada 89119.




**Name
      of Director or Executive Officer**
    
    **Shares****1******
    
    **Percentage**James
      E. Crabbe
    
    
    7,085,073
    2
    
    41.97
    %Bob
      L. Smith
    
    
    525,962
    3
    
    3.13
    %Ronald
      O. Keil
    
    
    233,654
    4
    
    1.39
    %Mark
      R. Newburg
    
    
    0
    
    
    *All
      directors and executive officers as a group
    (4 persons)
    
    
    7,844,689
    5
    
    46.34
    %**Name
      and Address of 5% Holder**Leonid
      Frenkel
      c/o
      Triage Capital LF Group, LLC
      401
      City Avenue, Suite 800
      Bala
      Cynwyd, Pennsylvania 19004
    
    
    1,813,638
    6
    
    9.77
    %LC
      Capital Master Fund LP
      c/o
      Lampe Conway & Co., LLC
      680
      5th Avenue, Suite 1201
      New
      York, NY 10019
    
    
    1,557,169
    7
    
    8.60
    %





*  Denotes
less than 1%.


1  Unless
otherwise noted, the persons identified in this table have sole voting and sole
investment power with regard to the shares beneficially owned by
them.
 
 2
Includes 4,574,066 shares held directly by Mr. Crabbe, 50,600 shares
issuable upon the exercise of stock options and 2,460,407 shares held by Mr.
Crabbe, as Trustee of the James E. Crabbe Revocable Trust. Mr. Crabbe disclaims
any ownership of any shares of common stock beneficially owned by Phileo
Foundation, a charitable foundation of which Mr. Crabbe is a trustee and
president, or by Yvonne M. Huson, or her related trusts, for which
Mr. Crabbe formerly held voting power.
 
 3
Includes 164,012 shares held directly by Mr. Smith, 230,162 shares held by
VIP’s Industries, Inc., 62,288 shares held by I.C.D., 7,500 shares issuable upon
the exercise of warrants, and 62,000 shares issuable upon the exercise of stock
options.
 
 4 Includes
177,654 shares held directly by Mr. Keil, 51,000 shares issuable upon the
exercise of stock options, and 5,000 shares issuable upon the exercise of
warrants.
 
 5 Includes
7,668,589 shares issued directly, 163,600 shares issuable upon the exercise of
stock options and 12,500 shares issuable upon the exercise of
warrants.
 
 6 Based
on a Form 4 filed on April 8, 2005 and information provided, includes shares
beneficially owned by Triage Offshore Fund, Ltd. issuable upon the conversion of
notes into 1,061,368 shares and the exercise of warrants into 180,000 shares;
shares beneficially owned by Triage Capital Management B LP issuable upon the
conversion of notes into 128,029 shares and the exercise of warrants into
180,000 shares; shares beneficially owned by Triage Capital Management LP
issuable upon the conversion of notes into 98,484 shares and the exercise of
warrants into 90,000 shares; and shares beneficially owned by Periscope Partners
LP issuable upon the conversion of notes into 75,757 shares.
 
 7  Based on
information provided, includes 25,500 shares issued directly, 360,000 shares
issuable upon the exercise of warrants and 984,848 shares issuable upon the
conversion of convertible notes.


11





**ITEM
      12.**
    ****CERTAIN
      RELATIONSHIPS AND RELATED
      TRANSACTIONS****




**Transaction
Review**




We have
adopted a policy that any transactions with directors, officers or entities of
which they are also officers or directors or in which they have a financial
interest, will only be on terms consistent with industry standards and approved
by a majority of the disinterested directors of our board. Our bylaws provide
that no such transactions by us shall be either void or voidable solely because
of such relationship or interest of directors or officers or solely because such
directors are present at the meeting of our board or a committee thereof which
approves such transactions, or solely because their votes are counted for such
purpose if:




·
    The
      fact of such common directorship or financial interest is disclosed or
      known by our board or committee and noted in the minutes, and our board or
      committee authorizes, approves or ratifies the contract or transaction in
      good faith by a vote for that purpose without counting the vote or votes
      of such interested directors; or




·
    The
      fact of such common directorship or financial interest is disclosed to or
      known by the stockholders entitled to vote, and they approve or ratify the
      contract or transaction in good faith by a majority vote or written
      consent of stockholders holding a majority of the shares of common stock
      entitled to vote (the votes of the interested directors or officers shall
      be counted in any such vote of stockholders);
or




·
    The
      contract or transaction is fair and reasonable to us at the time it is
      authorized or approved.




In
addition, interested directors may be counted in determining the presence of a
quorum at a meeting of our board or a committee thereof that approves such
transactions. If there are no disinterested directors, we shall obtain a
majority vote of the stockholders approving the transaction.




**2002
Private Placement of Convertible Notes**




On
February 21, 2002, our board authorized a private placement of $4,999,995
of convertible notes. The convertible notes accrue interest at 9.5% per annum,
mature one year from the date of issuance (where the holder has the discretion
to extend maturity date for up to four one-year periods) and are convertible
into shares of our common stock one year after issuance at a rate of $1.75 per
share. In addition, for each convertible note of $49,999.95, we issued a warrant
to purchase 2,500 shares of our common stock with an exercise price of $1.75.
Through this private placement, a total of $4,799,995.20 principal amount of
convertible notes were issued for $650,000 in cash with the remaining
$4,149,995.95 representing a rollover of principal and interest. We also issued
warrants to purchase 240,000 shares of our common stock. The convertible notes
are convertible into 2,742,863 shares of our common stock. We used the proceeds
from this private placement for general corporate purposes and working capital.
We discontinued this private placement of convertible debentures as of
January 14, 2003.




With the
approval of the board, certain members of the board, or entities controlled by
these board members, participated in our private placement of convertible notes.
The convertible notes and warrants issued to these related parties are as
follows:




·
    $3,949,996.05
      convertible note and warrants to purchase 197,500 shares of our common
      stock to the James E. Crabbe Revocable
Trust;




12


·
    $99,999.90
      convertible note and warrants to purchase 5,000 shares of our common stock
      to Ronald O. Keil;




·
    $49,999.95
      convertible note and warrant to purchase 2,500 shares of our common stock
      purchased by VIP’s Industries, Inc., an entity controlled by Bob L. Smith,
      our Vice Chairman; and




·
    $99,999.90
      convertible note and warrants to purchase 5,000 shares of our common stock
      purchased by I.C.D., Inc., an entity controlled by Bob L. Smith, our Vice
      Chairman.




These
related parties either agreed to cancel prior indebtedness or tender additional
funds in exchange for their convertible notes and warrants. In conjunction with
the consummation of a public offering on December 18, 2003, all of the
outstanding convertible notes and outstanding interest were converted into
shares of our common stock and cancelled.




**Travel
and Other Advances**


Prior to
the effective date of the Sarbanes-Oxley Act on July 30, 2002, we routinely
advanced funds to management personnel for travel and other corporate expenses
related to our business. In addition, Steven J. Blad, our former president
and chief executive officer, from time to time used his personal funds and
personal credit cards to advance costs on behalf of our employees and business
needs. As a result of an internal review in 2002, we have determined that after
netting advances to Mr. Blad against amounts advanced by Mr. Blad
personally on our behalf, a receivable from Mr. Blad remains due to us
arising out of pre-July 30, 2002 advances in the amount of $31,116.
Mr. Blad believes that certain credits due to him were not fully reflected.
Our audit committee directed an internal audit and accounting of these matters
so that an amount receivable can be confirmed, and Mr. Blad will be
required to repay such receivable in a period of not less than twelve months. In
March 2005, our Audit Committee concluded that Mr. Blad should reimburse us
approximately $16,000 arising out of the foregoing. Mr. Blad continues
to disagree with this conclusion. We also determined that a net amount of
approximately $5,039 was advanced to Mr. Blad after July 30, 2002 that
was not limited to business purposes. Through the issuance of a bonus to
Mr. Blad, Mr. Blad repaid $5,039 to us.
   **Phileo
Foundation**




In 2002,
the Phileo Foundation, a charitable foundation of which Mr. Crabbe, the
chairman of our board, and his two sons, Michael Crabbe and James
Crabbe, Jr., are the trustees, made a series of short-term loans in the
aggregate principal amount of $400,000 at a 9.5% interest rate to us. In
December 2002, Mr. Crabbe informed our board that the Phileo Foundation had
desired for the loans to be converted into shares of our common stock at $1.75
per share pursuant to our 2002 convertible debt program. Because an insufficient
number of shares reserved for conversion remained at the time the Phileo
Foundation made its intent known to us, the loans in the amount of $400,000 were
not converted into shares of our common stock at that time. In July 2003, the
board members, other than Mr. Crabbe who recused himself, voted to grant
the Phileo Foundation the right to convert the loans in the amount of $400,000
and all accrued interest into shares of our common stock at $2.25 per share,
which is the most recent price at which we had granted to other investors for
the conversion of debt or exercise of warrants. On December 18, 2003, upon the
consummation of our public offering, we converted the outstanding principal and
interest owed to the Phileo Foundation into 205,875 shares of common
stock.




**Private
Placement of** **10%
Senior Secured Convertible Notes**




Through
our private placement of 10% senior secured convertible notes in February 2005
and March 2005 in the aggregate principal amount of $12,000,000, we received
subscriptions from and issued notes to LC Capital Master Fund LP and affiliates
of Leonid Frenkel. Each note provides for the one-time right to convert up to
one-half of the outstanding principal owed on the note into shares of common
stock at a rate of $1.65 per share. The following table identifies the notes
issued to LC Capital Master Fund LP and affiliates of Leonid Frenkel and the
maximum number of shares issuable under such notes.




13


**Name**
    
    
    **Amount
      of Note ($)**
    ****
    
    **Conversion
      Shares (Maximum)**
    ****LC
      Capital Master Fund LP
    
    
    1,500,000
    
    
    454,545LC
      Capital Master Fund LP
    
    
    1,750,000
    
    
    530,303Triage
      Capital Management B, LP
    
    
    422,500
    
    
    128,029Triage
      Capital Management LP
    
    
    325,000
    
    
    98,484Triage
      Offshore Fund Ltd
    
    
    3,502,500
    
    
    1,061,363Periscope
      Partners LP
    
    
    250,000
    
    
    75,757




The
rights and obligations of the subscribers of our 10% senior secured convertible
notes in February 2005 and March 2005 are governed by a collateral agent
agreement, security agreement and intercreditor agreement. For additional
information, see our Current Reports on Form 8-K filed on February 15, 2005 and
March 16, 2005.




**Transactions
Involving Leonid Frenkel and his Affiliates**




Through
the filing of a Schedule 13G on October 1, 2004, Triage Management L.P. and
Leonid Frenkel first reported their beneficial ownership of more than 5% our
outstanding shares of common stock. In addition to the subscription of 10%
senior secured convertible notes described above, we entered into a repurchase
agreement with Leonid Frenkel, Triage Capital Management B, LP, Triage Capital
Management LP, Triage Offshore Fund Ltd and Periscope Partners LP whereby we
repurchased an aggregate of 448,053 shares of common stock in exchange for
warrants to purchase an aggregate of 448,053 shares of common stock with an
exercise price of $.01 per share. The repurchased shares have been classified as
treasury shares. For additional information, see our Current Report on Form 8-K
filed on April 14, 2005.




**Securities
and Exchange Commission Position on Certain
Indemnification**




Our
articles of incorporation obligate us to indemnify our directors and officers to
the fullest extent permitted under Nevada law. Chapter 78 of the Nevada Revised
Statutes, or NRS, provides for indemnification by a corporation of costs
incurred by directors, employees, and agents in connection with an action, suit,
or proceeding brought by reason of their position as a director, employee, or
agent. The person being indemnified must have acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the corporation.




Insofar
as indemnification for liabilities arising under the Securities Act of 1933, or
the Securities Act, may be permitted to our directors, officers or persons
controlling us pursuant to the provisions contained in our amended and restated
articles of incorporation, our amended and restated bylaws, Nevada law or
otherwise, we have been informed that, in the opinion of the SEC, such
indemnification is against public policy as expressed in the Securities Act of
1933 and is therefore unenforceable. If a claim for indemnification against such
liabilities, other than the payment by us of expenses incurred or paid by one of
our directors, officers or controlling persons in the successful defense of any
action, suit, or proceeding, is asserted by such director, officer or
controlling person, we will, unless in the opinion of our counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by us is against public
policy as expressed in the Securities Act of 1933 and will be governed by the
final adjudication of this issue.




14


**Indemnification
Agreements**




In June
2003, July 2003, April 2004, and April 2005 we entered into indemnification
agreements with members of our board of directors and certain of significant and
other employees in which we agreed to hold harmless and indemnify such
directors, officers and employees to the fullest extent authorized under Nevada
law, and to pay any and all related expenses reasonably incurred by the
indemnitee. The relevant members of our board of directors are James E. Crabbe,
Ronald O. Keil, Mark R. Newburg and Bob L. Smith. The relevant significant
and other employees are: Tyson K. Adams, Senior Development Engineer;
D. Dean Barnett, Vice President of Sales; Douglas H. Caszatt, Acting Chief
Executive Officer, Secretary and Controller; Joseph D. Corradino, Director
of Sales/Table Games; Kenneth R. Dickinson, Senior Vice President of
Product Development; Lynn C. Hessing, Director of Engineering;
Robert G. Pietrosanto, Senior Vice President of Sales; William B.
Roquemore, Vice President of Manufacturing and our former executive officer and
director, Steven Blad.




**ITEM 13.**
    **EXHIBITS
      AND REPORTS ON FORM 8-K**




(a)
    Exhibits.




See
exhibits listed on the Exhibit Index following the signature page of this Annual
Report on Form 10-KSB/A, which is incorporated herein by reference.




(b)
    Reports
      on Form 8-K.




During
the twelve months ended December 31, 2004, Current Reports on Form 8-K were
filed on the following dates: February 18, 2004, February 19, 2004, March 26,
2004, May 10, 2004, May 14, 2004, May 27, 2004, August 9, 2004, September
22, 2004, September 24, 2004, October 25, 2004, October 26, 2004, November 15,
2004, December 1, 2004, December 7, 2004, December 9, 2004 and December 20,
2004.




15





**ITEM
      14.**
    **PRINCIPAL
      ACCOUNTING FEES AND SERVICES**




Piercy
Bowler Taylor & Kern, Certified Public Accountants, Las Vegas, Nevada, or
PBTK, served as our independent public accountants and auditors for fiscal years
ended December 31, 2004 and 2003.




Our board
is responsible for pre-approving all audit and permissible non-audit services
provided by our independent auditor, PBTK, with certain limited exceptions. Our
board of directors has concluded that the non-audit services provided by PBTK
are compatible with maintaining auditor independence. In 2004 and 2003, no fees
were paid to PBTK pursuant to the “de minimus” exception to the pre-approval
policy permitted under the Securities Exchange Act of 1934, as
amended.




For the
fiscal years ended December 31, 2004 and 2003, the fees for services billed by
PBTK were as follows:




**2004**
    
    
    **2003**Audit
      fees
    
    $
    98,547
    
    $
    112,058Audit-related
      fees
    
    
    4,923
    
    
    0Tax
      fees
    
    
    21,970
    
    
    0All
      other fees
    
    
    2,300
    
    
    53,197**$**
    ******127,740**
    
    **$**
    ******165,255**





Audit
fees generally included fees related to the audit of our annual financial
statements included in our Form 10-KSB’s, the review of our interim financial
statements in cluded in
our Form 10-QSB’s and the consents and assistance in connection with other
filings and public offering documents filed with the Securities and Exchange
Commission.




Audit
related fees generally included fees for
assurance and related services that are reasonably related to the performance of
the audit or review of our financial statements, such as accounting
consultations concerning financial accounting and reporting standards, internal
control reviews and other non-statutory attestation services.




Tax fees
generally included f ees for
professional services rendered with respect to tax compliance, tax advice and
tax planning, such as the preparation of tax returns, claims for refunds,
payment planning and tax law interpretation.




All other
fees generally included fees related to miscellaneous,
non-recurring engagements.  In 2003 other fees billed by PBTK
represented consulting fees for the review of our Registration Statement on Form
SB-2 (File No. 333-109115). In 2004 other fees billed by PBTK represented
research related to Generally Accepted Accounting Principles.






16





**SIGNATURES**




In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant has duly
caused this report to be signed on our behalf by the undersigned, thereunto duly


authorized.




**VENDINGDATA
      CORPORATION**Date:
      April 29, 2005
    By:
    /s/
      Mark R. NewburgMark
      R. Newburg, Executive Director(Principal
      Executive Officer)







In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.




**Signature**
    
    **Title**
    **Date**/s/
      Mark R. Newburg
    
    Executive
      Director
    April
      29, 2005Mark
      R. Newburg
    
    (Principal
      Executive Officer)/s/
      Douglas H. Caszatt
    
    Acting
      Chief Financial Officer and Controller
    April
      29, 2005Douglas
      H. Caszatt
    
    (Principal
      Financial and Accounting Officer)/s/
      James E. Crabbe
    
    Chairman
      of theBoard
      of Directors
    April
      29, 2005James
      E. Crabbe/s/
      Ronald O. Keil
    
    Director
    April
      29, 2005Ronald
      O. Keil/s/
      Bob L. Smith
    
    Director
    April
      29, 2005Bob
      L. Smith




17


**EXHIBIT
INDEX**




**Exhibit****Number**
    **Exhibit
      Description**
    **Page**3.1
    Amended
      and Restated Articles of Incorporation dated July 24, 2000, incorporated
      by reference from the registrant’s Current Report on Form 8-K filed on
      July 28, 2000.
    --3.2
    Amended
      and Restated Bylaws of the registrant dated November 13, 2002,
      incorporated by reference from the registrant’s Current Report on Form 8-K
      filed on January 8, 2003.
    --3.3
    Certificate
      of Change in Number of Authorized Shares filed on December 23, 2002 and
      effective January 3, 2003, incorporated by reference from the registrant’s
      Current Report on Form 8-K filed on January 8, 2003.
    --4.1
    Specimen
      certificate for Common Stock, incorporated by reference from the
      registrant’s Registration Statement on Form SB-2 filed on July 16,
      1997.
    --10.1
    Shareholder
      Agreement dated December 14, 1998, by and between VendingData Corporation
      and Richard Huson, Bob Smith and Ron Keil, incorporated by reference from
      the registrant’s Annual Report on Form 10-KSB filed on March 26,
      1999.
    --10.2
    Form
      of Warrant Associated with 9.5% Convertible Note Due 2004, incorporated by
      reference from the registrant’s Quarterly Report on Form 10-QSB filed on
      May 17, 1999.
    --10.3
    First
      Security Bank of Nevada Master Equipment Lease Agreement, incorporated by
      reference from the registrant’s Quarterly Report on Form 10-QSB filed on
      August 13, 1999.
    --10.4
    Lease
      Agreement dated August 19, 1999, by and between the registrant and Spencer
      Airport Center, LLC for 6830 Spencer incorporated by reference from the
      registrant’s Quarterly Report on Form 10-QSB filed on November 15,
      1999.
    --10.5
    Durable
      Power of Attorney Granting Voting Rights of the registrant’s Common Stock,
      incorporated by reference from the registrant’s Quarterly Report on Form
      10-QSB filed on November 15, 1999.
    --10.6
    Employment
      Agreement of Steven J. Blad dated August 10, 1999, incorporated by
      reference from the registrant’s Quarterly Report on Form 10-QSB filed on
      August 13, 1999.
    --10.7
    Form
      of Employment Agreement, incorporated by reference from the registrant’s
      Quarterly Report on Form 10-QSB filed on August 14, 2001.
    --10.8
    First
      Amendment to Employment Agreement by and between the registrant and Steven
      J. Blad entered into on November 20, 2001, incorporated by reference from
      the registrant’s Annual Report on Form 10-KSB filed on April 1,
      2002.
    --10.9
    Form
      of Indemnification Agreement, incorporated by reference from the
      registrant’s quarterly report on 10-QSB/A filed on August 19,
      2003.
    --10.10
    Amended
      and Restated 1999 Stock Option Plan, incorporated by reference from the
      registrant’s quarterly report on 10-QSB/A filed on August 19,
      2003.
    --10.11
    Form
      of First Amendment to Employment Agreement, incorporated by reference from
      the registrant’s quarterly report on 10-QSB/A filed on August 19,
      2003.
    --10.12
    Second
      Amendment to Employment Agreement of Steven J. Blad, incorporated by
      reference from the registrant’s quarterly report on 10-QSB/A filed on
      August 19, 2003.
    --
  18
 
  **Exhibit****Number**
    **Exhibit
      Description**
    **Page**
 10.13
    Philadelphia
      Brokerage Corporation Warrant to Purchase 25,000 Shares of Common Stock,
      incorporated by reference from the registrant’s quarterly report on
      10-QSB/A filed on August 19, 2003.
    --10.14
    Financial
      Advisor Agreement dated March 1, 2003, incorporated by reference from the
      registrant’s registration statement on Form SB-2 filed on September 25,
      2003.
    --10.15
    Triage
      Capital Management LP Warrant to Purchase 50,000 Shares of Common Stock,
      incorporated by reference from the registrant’s quarterly report on
      10-QSB/A filed on August 19, 2003.
    --10.16
    Mellon
      HBV SBV, LLC Warrant to Purchase Shares of Common Stock, incorporated by
      reference from the registrant’s quarterly report on 10-QSB/A filed on
      August 19, 2003.
    --10.17
    Letter
      Agreement with Industrial Research Limited, incorporated by reference from
      the registrant’s registration statement on Form SB-2/A filed on December
      10, 2003.
    --10.18
    Amended
      and Restated 1999 Directors’ Stock Option Plan, incorporated by reference
      from the registrant’s registration statement on Form S-8 filed on
      September 10, 2003.
    --10.19
    Form
      of Registration Rights Agreement by and between the registrant and
      Philadelphia Brokerage Corporation, incorporated by reference from the
      registrant’s registration statement on Form SB-2 filed on September 25,
      2003.
    --10.20
    Form
      of Amended Escrow Agreement by and between the registrant and Wells Fargo
      Bank, incorporated by reference from the registrant’s registration
      statement on Form SB-2/A filed on December 10, 2003.
    --10.21
    Form
      of Lock-up, incorporated by reference from the registrant’s registration
      statement on Form SB-2 filed on September 25, 2003.
    --10.22
    Acquisition
      Agreement dated June 26, 2001, by and between the registrant and
      Technology Development Center, LLC, incorporated by reference from the
      registrant’s current report on Form 8-K filed on June 29,
      2001.
    --10.23
    Form
      of Subscription Agreement, incorporated by reference from the registrant’s
      registration statement on Form SB-2/A filed on December 10,
      2003.
    --10.24
    Consulting
      Agreement dated December 31, 2002, by and between the registrant and John
      J. Gerard, incorporated by reference from the registrant’s registration
      statement on Form SB-2 filed on September 25, 2003.
    --10.25
    First
      Amendment to Consulting Agreement dated March 31, 2003 by and between
      registrant and John J. Gerard, incorporated by reference from the
      registrant’s registration statement on Form SB-2 filed on September 25,
      2003.
    --10.26
    Philadelphia
      Brokerage Corporation warrant to Purchase 75,000 Shares of Common Stock,
      incorporated by reference from the registrant’s registration statement on
      Form SB-2 filed on September 25, 2003.
    --10.27
    Distribution
      Agreement by and between the registrant and TCS Aces Pty Limited,
      incorporated by reference from the registrant’s registration statement on
      Form SB-2/A filed on December 10, 2003.
    --10.28
    First
      Amendment to Directors’ 1999 Stock Option Plan, incorporated by reference
      from the registrant’s Schedule 14A filed on September 3,
2004.
    --10.29
    First
      Amendment to the Amended and Restated 1999 Stock Option Plan, incorporated
      by reference from the registrant’s Schedule 14A filed on September 3,
      2004.
    --
  19
 
  **Exhibit****Number**
    **Exhibit
      Description**
    **Page**
 10.30
    Form
      of Placement Agent Agreement with Philadelphia Brokerage Corporation,
      incorporated by reference from the registrant’s Current Report on Form 8-K
      filed on February 15, 2005.
    --10.31
    Form
      of Subscription Agreement for 10% Senior Secured Notes due February 2008,
      incorporated by reference from the registrant’s Current Report on Form 8-K
      filed on February 15, 2005.
    --10.32
    Form
      of Promissory Note for 10% Senior Secured Notes due February 2008,
      incorporated by reference from the registrant’s Current Report on Form 8-K
      filed on February 15, 2005.
    --10.33
    Distribution
      Agreement between TCS John Huxley and VendingData Corporation dated
      January 21, 2005, incorporated by reference from the registrant’s Current
      Report on Form 8-K filed on February 15, 2005.
    --10.34
    Form
      of Subscription Agreement for 10% Senior Secured Notes due March 2008,
      incorporated by reference from the registrant’s Current Report on Form 8-K
      filed on March 16, 2005.
    --10.35
    Form
      of Promissory Note for 10% Senior Secured Notes due March 2008,
      incorporated by reference from the registrant’s Current Report on Form 8-K
      filed on March 16, 2005.
    --10.36
    Form
      of Intercreditor Agreement, incorporated by reference from the
      registrant’s Current Report on Form 8-K filed on March 16,
      2005.
    --10.37
    Form
      of Amended and Restated Security Agreement, incorporated by reference from
      the registrant’s Current Report on Form 8-K filed on March 16,
      2005.
    --10.38
    Form
      of Amended and Restated Collateral Agent Agreement, incorporated by
      reference from the registrant’s Current Report on Form 8-K filed on March
      16, 2005.
    --10.39
    Repurchase
      Agreement, incorporated by reference from the registrant’s Current Report
      on Form 8-K filed on April 14, 2005.
    --10.40
    Form
      of Warrant to Purchase Shares of Common Stock, incorporated by reference
      from the registrant’s Current Report on Form 8-K filed on April 14,
      2005.
    --14.1
    Code
      of Ethics, incorporated by reference from the registrant's annual report
      on 10-KSB filed March 30, 2004
    --14.2
    Amended
      and Restated Code of Ethics.
    2321.1
    Subsidiaries
      of Registrant, incorporated by reference from the registrant’s Annual
      Report on Form 10-KSB filed on March 31, 2005.
    --31.1
    Certification
      of Mark R. Newburg under Section 302 of the Sarbanes-Oxley Act of
      2002.
    2931.2
    Certification
      of Douglas H. Caszatt under Section 302 of the Sarbanes-Oxley Act of
      2002.
    3032.1
    Certifications
      Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C.
      Section 1350.
    31








20