UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                              ---------------------

                                   FORM 10-QSB

(Mark one)

|X|   QUARTERLY Report purSUANT TO Section 13 or 15(d)of the Securities Exchange
      Act of 1934

      For the quarterly period ended July 31, 1999

|_|   Transition Report Pursuant to Section 13 or 15(d)of the Securities
      Exchange Act of 1934

      For the transition period from                   to
                                     ------------------   ----------------------

      Commission file number 1-8460


                          UNIVERSAL MONEY CENTERS, INC.
        (Exact name of small business issuer as specified in its charter)


              Missouri                              43-1242819
     (State or other jurisdiction of    (I.R.S. Employer Identification No.)
     incorporation or organization)


                     6800 Squibb Road, Mission, Kansas 66202
                    (Address of principal executive offices)


                                 (913) 831-2055
                           (Issuer's telephone number)


     Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities and Exchange Act 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 X No __

     Number of shares outstanding of each of the issuer's classes of common
equity as of September 17, 1999: 39,293,069 shares of Common Stock, $.01 par
value per share.

      Transitional Small Business Disclosure Format:   Yes __    No  X


                                    Page - 1
<PAGE>


NOTE CONCERNING FORWARD-LOOKING STATEMENTS

     The Company believes that certain statements contained in this Quarterly
Report on Form 10-QSB that are not statements of historical fact may constitute
forward-looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). These statements involve
risks and uncertainties that may cause actual results to differ materially from
those in such statements. See Part I, Item 2 "Management's Discussion and
Analysis or Plan of Operation - Cautionary Statement Concerning Forward-Looking
Statements" for additional information and factors to be considered with respect
to forward-looking statements.


                                    Page - 2
<PAGE>


                         PART I - FINANCIAL INFORMATION

Item 1.           Financial Statements

                          UNIVERSAL MONEY CENTERS, INC.
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                     ASSETS

<S>                                                                        <C>                 <C>

                                                                           July 31, 1999       January 31, 1999
                                                                            (unaudited)
                                                                           -------------       ----------------

CURRENT ASSETS
  Cash                                                                       $   42,632          $  601,922
  Notes receivable - affiliate                                                  650,300               --
  Accounts receivable - trade, less allowance for doubtful accounts:
      July 31, 1999 - $21,370; January 31, 1999 - $21,370                        38,903              39,012
   Accounts receivable - affiliate                                               19,553              35,064
   Inventories                                                                      300                 300
   Prepaid expenses and other                                                    13,012              12,894
   Interest receivable - affiliate                                                6,628               3,636
                                                                             -----------         -----------
                        Total Current Assets                                    771,328             692,828
                                                                             -----------         -----------

PROPERTY AND EQUIPMENT, At cost
   Equipment                                                                  3,716,990           3,453,071
   Leasehold improvements                                                       117,803             117,803
   Vehicles                                                                      21,156               9,722
                                                                             -----------         -----------
                                                                              3,855,949           3,580,596
        Less accumulated depreciation                                        (1,922,147)         (1,873,919)
                                                                             -----------         -----------
                                                                              1,933,802           1,706,677
Total Property and Equipment
                                                                             -----------         -----------

OTHER ASSETS
   Deferred income taxes                                                        375,000             375,000
   Other                                                                         58,531              30,531
                                                                             -----------         -----------
                        Total Other Assets                                      433,531             405,531
                                                                             ===========         ===========

                        Total Assets                                         $3,138,661          $2,805,036
                                                                             ===========         ===========

</TABLE>


See Notes to Consolidated Financial Statements (Unaudited)


                                    Page - 3
<PAGE>


                          UNIVERSAL MONEY CENTERS, INC.

                           CONSOLIDATED BALANCE SHEETS


                      LIABILITIES AND STOCKHOLDERS' EQUITY




                                                     July 31,       January 31,
                                                       1999             1999
                                                   (unaudited)
                                                   -------------    ------------

CURRENT LIABILITIES
   Current maturities of long-term debt and       $   180,527      $   314,606
   capital lease obligations
   Accounts payable                                   385,996          313,319
   Accounts payable - affiliate                            --               --
   Accrued expenses                                   227,422          210,817
                                                   -------------    ------------
                   Total Current Liabilities          793,945          838,742
                                                   -------------    ------------

LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS
                                                      978,655          714,087
                                                   -------------    ------------

STOCKHOLDERS' EQUITY
   Common stock; no par value; $.01 stated value;
      40,000,000 shares authorized; 39,851,380
   issued as of 07/31/99 and 01/31/99                 398,514          398,514
   Additional paid-in capital                      18,593,430       18,593,430
   Retained earnings (deficit)                    (15,963,575)     (16,077,429)
                                                   -------------    ------------
                                                    3,028,369        2,914,515

   Less treasury stock, at cost; common stock
        558,311 shares as of 07/31/99 and 01/31/99 (1,662,308)      (1,662,308)
                                                   -------------    ------------
                   Total Stockholders' Equity       1,366,061        1,252,207
                                                   -------------    ------------

                   Total Liabilities and          $ 3,138,661      $ 2,805,036
                   Stockholders' Equity
                                                  =============    =============






See Notes to Consolidated Financial Statements (Unaudited)

                                    Page - 4

<PAGE>


                          UNIVERSAL MONEY CENTERS, INC.

                  CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

<TABLE>
<CAPTION>

                                          Three Months Ended         Six Months Ended July
                                             July 31,                       31,
                                       1999          1998           1999           1998
                                       ----          ----           ----           ----

<S>                                 <C>              <C>         <C>            <C>

NET REVENUES                        $ 1,564,529   $ 1,240,536    $ 2,955,649     2,395,956

COSTS OF REVENUES                     1,084,932       846,974      2,078,543     1,622,179
                                      ----------    ----------     ---------     ----------

GROSS PROFIT                            479,597       393,562        877,106       773,777

OPERATING EXPENSES                      357,295       289,481        714,342       597,112
                                      ----------    ----------     ---------     ----------

INCOME FROM OPERATIONS                  122,302       104,081        162,764       176,665
                                      ----------    ----------     ---------     ----------

OTHER INCOME (EXPENSE)
               Interest income           19,802         6,353         33,046        12,360
               Interest expense         (48,596)      (47,063)       (82,038)      (79,863)
               Other                         82          --               82          --
                                      ----------    ----------     ---------     ----------
                                        (28,712)      (40,710)       (48,910)      (67,503)
                                      ----------    ----------     ---------     ----------

INCOME BEFORE INCOME TAXES               93,590        63,371        113,854       109,162

INCOME TAX PROVISION (CREDIT)              --            --            --             --

NET INCOME                            $  93,590     $  63,371    $   113,854       109,162
                                      ==========    ==========     =========     ==========

BASIC & DILUTED EARNINGS PER SHARE    $  0.0023     $  0.0016    $    0.0029        0.0028
                                      ==========    ==========     =========     ==========

</TABLE>







See Notes to Consolidated Financial Statements (Unaudited)


                                    Page - 5



<PAGE>


                          UNIVERSAL MONEY CENTERS, INC.

                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


                                                       Six Months     Six Months
                                                           Ended          Ended
                                                         July 31,       July 31,
                                                           1999           1998
                                                        ----------    ----------


CASH FLOWS FROM OPERATING ACTIVITIES
    Net income                                         $  113,854       109,162
    Items not requiring (providing) cash:
          Depreciation                                    249,284       202,730
          Loss on disposal of property and                   --            --
          equipment
          Deferred income taxes                              --            --
    Changes in:
          Accounts receivable                              12,628        45,067
          Inventories                                        --            --
          Prepaid expenses and other                      (28,118)      (19,089)
          Accounts payable and accrued expenses            89,282       (22,514)
                                                       -----------    ----------
             Net cash provided by (used in)               436,930       315,356
             operating activities                      ===========    ==========


CASH FLOWS FROM INVESTING ACTIVITIES
    Purchase of property and equipment                   (190,200)     (234,865)
    Increase from notes receivable - affiliate           (650,300)     (210,000)
    Proceeds from sale of property and equipment             --            --
                                                       -----------    ----------

          Net cash provided by (used in)                 (840,500)     (444,865)
          investing activities                         -----------    ----------

CASH FLOWS FROM FINANCING ACTIVITIES
    Principal payments under long-term debt and          (167,154)     (122,764)
    capital lease obligations
    Proceeds from issuance of long-term debt               11,434       149,480
    Proceeds from issuance of common stock                   --            --
    Purchase of treasury stock                               --            --
                                                       -----------    ----------
          Net cash provided by (used in)                 (155,720)       26,716
          financing activities                         -----------    ----------

INCREASE (DECREASE) IN CASH                              (559,290)     (102,793)

CASH, BEGINNING OF PERIOD                                 601,922       374,675
                                                       -----------   -----------

CASH, END OF PERIOD                                    $   42,632    $  271,882
                                                       ===========   ===========



See Notes to Consolidated Financial Statements (Unaudited)


                                    Page - 6
<PAGE>


                          UNIVERSAL MONEY CENTERS, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.  General

     The consolidated financial statements include the accounts of Universal
Money Centers, Inc. (the "Company"), and its wholly-owned subsidiaries,
Electronic Funds Transfer, Inc., Corporate Payments Systems, Inc. (inactive) and
A.M. Corporation (inactive). All significant intercompany accounts and
transactions have been eliminated in consolidation.

     The unaudited consolidated financial statements included herein have been
prepared by the Company pursuant to the rules and regulations of the Securities
and Exchange Commission. Accordingly, they reflect all adjustments that are, in
the opinion of management, necessary for a fair presentation of the financial
results for the interim periods. Certain information and notes normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. The Company believes, however, that the disclosures are adequate to
make the information presented not misleading. These consolidated financial
statements should be read in conjunction with the consolidated financial
statements and the notes thereto included in the Company's Annual Report on Form
10-KSB for the fiscal year ended January 31, 1999.

2.  Future Changes in Accounting Principles

       In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This Statement establishes the accounting
for derivative instruments, including certain derivative instruments imbedded in
other contracts and hedging activities. This Statement is effective for all
fiscal quarters of fiscal years beginning after June 15, 1999. Management has
not yet determined the impact of adopting this pronouncement on the Company's
results of operations or financial position.

       In March 1998, the AICPA issued SOP 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use." This SOP provides
guidance on accounting for the costs of computer software developed or obtained
for internal use. This SOP is effective for fiscal years beginning after
December 15, 1998. Management has not yet determined the impact of adopting this
pronouncement on the Company's results of operations or financial position.

3.  Earnings Per Share

      The computation of earnings per share is based upon the weighted average
number of common shares outstanding during the respective period. For all
periods reflected in the Consolidated Financial Statements, the weighted average
number of common shares outstanding was 39,293,069 shares.


                                    Page - 7
<PAGE>


Item 2.   Management's Discussion and Analysis or Plan of Operation

Overview

      Universal Money Centers, Inc. (the "Company") operates a network of
automated teller machines ("ATMs"). The ATMs provide holders of debit and credit
cards access to cash, account information and other services at convenient
locations and times. At July 31, 1999, the network consisted of approximately
310 ATMs owned by the Company and its affiliate, Universal Funding Corporation
("Funding"), 75 ATMs owned by banks and 43 ATMs owned by third party merchants.
ATMs in the Company's network are principally installed in convenience stores
and banks with locations concentrated in the Kansas City and St. Louis, Missouri
and El Paso, Texas metropolitan areas, and the state of Kansas. The Company also
provides ATM network management services to banks and third parties owning ATMs
in the Company's ATM network. The Company is currently engaged in discussions
with a retailer regarding the placement and/or management of approximately 140
ATMs in certain of the retailer's stores. There can be no assurance that the
Company will reach an agreement with the retailer on satisfactory terms.

      The Company's revenues are principally derived from two types of fees,
which the Company charges for processing transactions on its ATM network. The
Company receives an interchange fee from the issuer of the credit or debit card
for processing a transaction when a cardholder uses an ATM in the Company's
network. In addition, in most cases the Company receives a surcharge fee from
the cardholder when the cardholder makes a cash withdrawal from an ATM in the
Company's network.

      Interchange fees are processing fees that are paid by the issuer of the
credit or debit card used in a transaction. Interchange fees vary for cash
withdrawals, balance inquiries, account transfers or uncompleted transactions,
the primary types of transactions that are currently processed on ATMs in the
Company's network. The maximum amount of the interchange fees is established by
the national and regional card organizations and credit card issuers with which
the Company has a relationship. The Company (or its affiliate, Funding) receives
the full interchange fee for transactions on Company owned ATMs, but sometimes
rebates a portion of the fee to the owner of the ATM location under the
applicable lease for the ATM site. The Company also receives the full
interchange fee for transactions on ATMs owned by banks or third party vendors
included within the Company's network, but rebates a portion of each fee to the
bank or third party vendor based upon negotiations between the parties. The
interchange fees received by the Company vary from network to network and to
some extent from issuer to issuer, but generally range from $0.35 to $0.75 per
cash withdrawal. Interchange fees for balance inquiries, account transfers and
denied transactions are generally substantially less than fees for cash
withdrawals. The interchange fees received by the Company from the card issuer
are independent of the service fees charged by the card issuer to the cardholder
in connection with ATM transactions. Service fees charged by card issuers to
cardholders in connection with transactions through the Company's network range
from zero to as much as $2.50 per transaction. The Company does not receive any
portion of the service fees charged by the card issuer to the cardholder.

      In most markets the Company imposes a surcharge fee for cash withdrawals.
The Company expanded its practice of imposing surcharge fees in April 1996 when
national debt and credit card organizations changed rules applicable to their
members to permit these fees. Subsequently, surcharge fees have been a
substantial additional source of revenue for the Company and other ATM network
operators. The surcharge fee for ATMs in the Company's network owned by or
located in banks ranges between $0.50 and $1.50 per withdrawal. The surcharge

                                    Page - 8

<PAGE>

fee for other ATMs in the Company's network ranges between $0.50 and $2.50 per
withdrawal. The Company receives the full surcharge fee for transactions on
Company owned ATMs, but sometimes rebates a portion of the fees to the owner of
the ATM location under the applicable lease for the ATM site. The Company also
receives the full surcharge fee for transactions on ATMs owned by banks and
third party vendors included within the Company's network, but rebates a portion
of each fee to the bank or third party vendor based upon a variety of factors,
including transaction volume and the party responsible for supplying vault cash
to the ATM.

      The Company's profitability is substantially dependent upon the imposition
of surcharge fees. Any changes in laws or card association rules materially
limiting the Company's ability to impose surcharge fees would have a material
adverse effect on the Company.

      In addition to revenues derived from interchange and surcharge fees, the
Company also derives revenues from providing network management services to
banks and third parties owning ATMs included in the Company's ATM network. These
services include 24 hour transaction processing, monitoring and notification of
ATM status and cash condition, notification of ATM service interruptions, in
some cases, dispatch of field service personnel for necessary service calls and
cash settlement and reporting services. The fees for these services are paid by
the owners of the ATMs.

      Interchange fees are credited to the Company by networks and credit card
issuers on a periodic basis which is generally either daily or monthly depending
upon the party. Surcharge fees are charged to the cardholder and credited to the
Company by networks and credit card issuers on a daily basis. The Company
periodically rebates the portion of these fees owed to ATM owners and owners of
ATM locations. Fees for network management services are generally paid to the
Company on a monthly basis.

Comparison of Results of Operations for the Three Months and Six Months Ended
July 31, 1999 and July 31, 1998.

      Revenues. The Company's total revenues increased to $1,564,529 for the
three months ended July 31, 1999 from $1,240,536 for the three months ended July
31, 1998 and increased to $2,955,649 for the six months ended July 31, 1999
("second quarter 2000") from $2,395,956 for the six months ended July 31, 1998
("second quarter 1999"). This increase is primarily attributable to an increase
in the number of ATMs in the Company's network on which the Company imposed
surcharge fees for cash withdrawals. The number of such ATMs increased to 419 in
second quarter 2000 from 320 in second quarter 1999. Surcharge fees increased to
$1,111,016 or 71.0% of total revenues for the three months ended July 31, 1999
from $728,019 or 58.7% of total revenues for the three months ended July 31,
1998. Surcharge fees increased to $2,087,640 or 70.6% of total revenues for the
six months ended July 31, 1999 from $1,397,976 or 58.3% of total revenues for
the six months ended July 31, 1998. The increase in total revenues is also
partially due to an increase in the number of ATMs in the Company's network,
from 343 in second quarter 1999 to 428 in second quarter 2000. The increase in
the number of ATMs resulted in an increase in the number of transactions
processed on ATMs in the Company's network. Revenues do not initially grow as
fast as the number of ATMs because new ATM sites are not fully utilized for
several months after installation. Therefore, revenues may not increase at the
same percentage rate as increases in the number of ATMs. Revenues derived from
interchange fees increased to $289,524 for the three months ended July 31, 1999
from $258,361 for the three months ended July 31, 1998, and increased to
$519,414 for the six months ended July 31, 1999 from $466,208 for the six months
ended July 31, 1998. Revenues derived from interchange fees did not increase at
the same rate as other revenues primarily because the Company imposed surcharge
fees on a greater number of ATMs. The imposition of surcharge fees on cash
withdrawals from an ATM generally causes a

                                    Page - 9

<PAGE>

decrease in use of the ATM for transactions for which interchange fees are
charged. Revenues received from Funding under a Management Agreement between the
Company and Funding decreased to $32,027 and $103,357 for the three and six
months ended July 31, 1999, respectively, from $143,955 and $313,025 for the
three months and six months ended July 31, 1998, respectively. See "--Revenues
from Funding" below. The Company's revenues from providing network management
services to banks and third parties increased to $131,962 and $245,238 for the
three months and six months ended July 31, 1999, respectively from $110,201 and
$218,747 for the three months and six months ended July 31, 1998, respectively.

      Revenues from Funding. The Company has maintained a business relationship
with Funding since August 1989. The relationship began in 1989 as a result of
the Company's severe financial problems. The operation of the Company's ATM
network generally requires that the Company supply vault cash to ATMs owned by
the Company to fund cash withdrawals. As a result of the Company's financial
problems, lenders were generally unwilling to extend loans, partly because of
the concern that the Company's creditors would assert claims against cash
physically located in ATM's owned by the Company. The Company has not had
sufficient cash to supply the vault cash for these ATMs. In order to resolve
this problem and to permit the Company to continue to operate certain ATMs,
Funding was formed in 1989 by David S. Bonsal, the Chairman of the Company's
Board of Directors, John L. Settles, the President of the Company since June 3,
1999 and from April 1989 through October 1990, and William Smithson, a
shareholder of the Company. Each of these individuals has a one-third ownership
interest in Funding.

      Under a Management Agreement between the Company and Funding, Funding
provides vault cash for certain ATMs in the Company's network that are owned by
the Company or Funding, and receives all interchange fees for transactions
processed on these ATMs. At July 31, 1999 and 1998, Funding had vault cash
located in approximately 244 and 206 ATMs, respectively, owned by Funding or the
Company. The Company receives a management fee from Funding under the Management
Agreement for providing services to Funding. The management fee paid to the
Company under the Management Agreement equals Funding's "net income." Funding's
"net income" is defined in the Management Agreement as revenues from interchange
fees, less armored security charges, interest expense on funds borrowed to
provide vault cash, ATM location expenses, debt service related to the purchase
of the ATMs, taxes and insurance on ATMs, and a monthly payment to each of
Funding's shareholders representing a return on their equity investment in
Funding.

      The revenues received by the Company from Funding under the Management
Agreement were $32,027 and $103,357 for the three months and six months ended
July 31, 1999, equal to Funding's "net income" under the Management Agreement
for the same period. Funding's "net income" of $32,027 for the three months
ended July 31, 1999 consisted of $334,247 in revenues from interchange fees
earned by Funding, less Funding's expenses in the amount of $295,945 and
Funding's return on equity payment to shareholders of Funding in the amount of
$6,275. Funding's "net income" of $103,357 for the six months ended July 31,
1999 consisted of $667,023 in revenues from interchange fees earned by Funding,
less Funding's expenses in the amount of $551,321 and Funding's return on equity
payment to shareholders of Funding in the amount of $12,345. Pursuant to the
Management Agreement, Funding's expenses for purposes

                                   Page - 10
<PAGE>



of computing its "net income" did not include Funding's depreciation,
amortization and bad debt expenses, which were $0 and $977 for the respective
periods. The revenues received by the Company from Funding under the Management
Agreement were $143,955 and $313,025 for the three months and six months ended
July 31, 1998, equal to Funding's "net income" under the Management Agreement
for the same period. Funding's "net income" of $143,955 for the three months
ended July 31, 1998 consisted of $314,918 in revenues from interchange fees
earned by Funding, less Funding's expenses in the amount of $164,688 and
Funding's return on equity payment to shareholders of Funding in the amount of
$6,275. Funding's "net income" of $313,025 for the six months ended July 31,
1998 consisted of $651,564 in revenues from interchange fees earned by Funding,
less Funding's expenses in the amount of $326,194 and Funding's return on equity
payment to shareholders of Funding in the amount of $12,345. Pursuant to the
Management Agreement, Funding's expenses for purposes of computing its "net
income" did not include Funding's depreciation, amortization and bad debt
expenses, which were $0 and $977 for the respective periods.

      While revenues earned by Funding from interchange fees increased for the
three months and six months ended July 31, 1999 from the same periods in 1998,
they declined per ATM as a result of fewer interchange transactions per ATM on
ATMs for which Funding provided vault cash. The number of transactions per ATM
decreased principally because a greater number of the Company's ATMs charged
surcharge fees for the three months and six months ended July 31, 1999. The
imposition of surcharge fees on cash withdrawals from an ATM generally causes a
decrease in use of the ATM for transactions for which interchange fees are
charged. The increase in Funding's expenses for the three months and six months
ended July 31, 1999 from the same period in 1998 was caused principally by
higher outstanding balances on borrowings by Funding and higher armored security
charges. For additional information concerning Funding, see the Company's Annual
Report on Form 10-KSB for the fiscal year ended January 31, 1999, Item 1,
"DESCRIPTION OF BUSINESS - Relationship with Universal Funding Corporation."

      Cost of Revenues. The Company's cost of revenues increased to $1,084,932
and $2,078,543 for the three months and six months ended July 31, 1999,
respectively, from $846,974 and $1,622,179 for the three months and six months
ended July 31, 1998, respectively. The principal components of cost of revenues
are salaries, telecommunication services and transaction processing charges,
interchange and surcharge rebates, ATM site rentals, maintenance and repairs,
and depreciation and amortization. This increase is principally due to an
increase in interchange and surcharge rebates paid to third party owners of ATMs
included in the Company's ATM network and to ATM site owners. Rebates generally
increase approximately in proportion to increases in total revenues from
interchange and surcharge fees. The increase is also attributable to increased
depreciation associated with the larger number of ATMs owned by the Company, and
increased telecommunications expenses associated with the larger number of ATMs
in the Company's network.

     Gross Margin. Gross profit as a percentage of revenues for the three months
and six months ended July 31, 1999 was 30.7% and 29.7%, respectively, and for
the three months and six months ended July 31, 1998 was 31.7% and 32.3%,
respectively. The decrease for the three

                                   Page - 11
<PAGE>


months and six months ended July 31, 1999 was caused by a number of factors,
including increased interchange and surcharge rebates, increased depreciation
expense resulting from the purchase of new ATMs and increased personnel expense
and telecommunications charges resulting from growth in the ATM network.

      Operating Expenses. The Company's total operating expenses increased to
$357,295 and $714,342 for the three months and six months ended July 31, 1999,
respectively, from $289,481 and $597,112 for the three months and six months
ended July 31, 1998, respectively. The principal components of operating
expenses are administrative salaries and benefits, professional fees, occupancy
costs, sales and marketing expenses and administrative expenses. This increase
is principally attributable to increased professional fees incurred in
connection with the Company's efforts to resume filing periodic reports with the
Securities and Exchange Commission, the preparation and mailing of the proxy
statement for the 1999 annual meeting of shareholders and the preparation and
holding of the annual meeting.

      Interest Expense. Interest expense increased to $48,596 and $82,038 for
the three months and six months ended July 31, 1999, respectively, from $47,063
and $79,863 for the three months and six months ended July 31, 1998,
respectively. This increase was attributable to increased capital lease
obligations and notes payable related to the acquisition of additional ATMs.

      Interest Income (Expense). The Company extends short-term loans to
Funding, which uses the proceeds as vault cash in the ATMs owned by Funding.
These loans generally have a term of one month and bear interest at 12% per
annum. Interest income primarily represents the interest paid by Funding to the
Company on the outstanding balance of these loans. Interest income increased to
$19,802 and $32,986 for the three months and six months ended July 31, 1999,
respectively, from $6,353 and $12,360 for the three months and six months ended
July 31, 1998, respectively, as a result of higher average outstanding balances.

      Income Taxes. The Company paid no income taxes for the three months and
six months ended July 31, 1999 or the three months and six months ended July 31,
1998, utilizing operating loss carryforwards to reduce taxable income to zero.
In addition, the Company has recorded a deferred tax credit of $375,000 at
January 31, 1999, which is primarily a result of operating loss carryforwards
which management believes are more likely than not to be realized prior to their
expiration between 2005 and 2012. Realization is dependent on generating
sufficient future taxable income to absorb the carryforwards. The amount of the
deferred tax credit considered realizable could be increased or reduced in the
near term if estimates of future taxable income during the carryforward period
change. As of July 31, 1999, the Company had approximately $195,000 of tax
credits available to offset future federal income taxes. These credits expire
between 1999 and 2002. The Company also has unused operating loss carryforwards
of approximately $1,500,000, which expire between 2005 and 2012.

      Net Income. The Company had net income of $93,590, or $0.0023 per share,
for the three months ended 1999, compared to net income of $63,371, or $0.0016
per share, for the three months ended 1998. The Company had net income of
$113,854, or $0.0029 per share, for the six months ended 1999, compared to net
income of $109,162, or $0.0028 per share, for the six months ended 1998. Net
income was higher in second quarter 2000 principally as a result of increased
revenues from surcharge fees because of the increased number of ATMs in the
Company's network and the location of certain ATMs.

                                   Page - 12
<PAGE>


Liquidity and Capital Resources

      At July 31, 1999, the Company had a working capital deficit of $22,617,
compared to a working capital deficit of $145,914 at January 31, 1999. The ratio
of current assets to current liabilities increased to .97 at July 31, 1999 from
 .83 at January 31, 1999.

      The Company has funded its operations and capital expenditures from cash
flow generated by operations, capital leases and borrowings from lenders.
Operating activities provided net cash of $436,930 for the six months ended July
31, 1999 and $315,356 for the six months ended July 31, 1998. Net cash provided
by operating activities for the six months ended July 31, 1999 consisted
primarily of net income of $113,854, depreciation of $249,284, a decrease in
accounts receivable of $12,628 and an increase in accounts payable of $89,282,
partially offset by a decrease in prepaid expenses of $28,118. Net cash used in
investing activities was $840,500 for the six months ended July 31, 1999,
compared to $444,865 for the six months ended July 31, 1998. The net cash used
in investing activities resulted primarily from loans to Funding to provide
vault cash and from purchases of plant and equipment (principally ATMs) in
second quarter 2000. Net cash used in financing activities was $155,720 for the
six months ended July 31, 1999, compared to net cash provided by financing
activities of $26,716 for the six months ended July 31, 1998. The Company had
cash and cash equivalents of $42,632 at July 31, 1999, compared to cash and cash
equivalents of $601,922 at January 31, 1999.

      Much of the Company's cash requirements relate to the need for vault cash
for ATMs owned by the Company and Funding. Funding currently provides vault cash
for a majority of these ATMs. See "Comparison of Results of Operations for the
Three Months and Six Months Ended July 31, 1999 and July 31, 1998 - Revenues
from Funding" and the Company's Annual Report on Form 10-KSB for the fiscal year
ended January 31, 1999, Item 1, "DESCRIPTION OF BUSINESS - Relationship with
Universal Funding Corporation." At July 31, 1999 and 1998, Funding had vault
cash of approximately $3.5 million and $2.0 million, respectively, located in
approximately 244 and 206 ATMs, respectively, owned by Funding and the Company.
The Company, through its subsidiary Electronic Funds Transfer, Inc. ("EFT"),
lends funds to Funding for vault cash to the extent that Funding cannot obtain
financing on reasonable terms from other sources and to the extent that the
Company has cash available to lend to Funding. The outstanding balance of the
loans made by EFT to Funding at July 31, 1999 was $650,300 and at July 31, 1998
was $210,000. Certain of the ATMs owned by the Company are sponsored by banks.
Vault cash for these ATMs is supplied by the sponsoring bank. Vault cash for
ATMs in the Company's ATM network that are owned by banks and third party
vendors is provided by the ATM owner. In June 1999, the Company entered into an
arrangement with Tehama Bank to obtain a vault cash facility allowing the
Company to obtain up to $3,000,000 in vault cash. The Company is also engaged in
discussions with two other banks regarding their willingness to directly provide
vault cash for certain ATMs owned by the Company.

      Management believes that the anticipated cash flow from operations will
provide the capital resources necessary to meet the Company's current working
capital needs and existing capital expenditure obligations. The Company expects
that its capital expenditures will increase in the future to the extent that the
Company is able to pursue its strategy of expanding its network and increasing
the number of installed ATMs. These increased expenditures are expected to be
funded from cash flow from operations, capital leases and additional borrowings,
to the extent financing is available. There can be no assurance that the Company
will be able to obtain financing under a credit facility on terms that are
acceptable to the Company or at all.

                                   Page - 14
<PAGE>


The Company's expansion plans will be limited if the Company is unsuccessful in
obtaining a credit facility or other financing.

Impact of Inflation and Changing Prices

      While subject to inflation, the Company was not impacted by inflation
during the past two fiscal years in any material respect.

Year 2000 Compliance

      General Discussion. The Year 2000 issue is the result of computer code
being written using two digits to represent years rather than four digits, which
include the century designation. Without corrective action, it is possible that
computer programs could recognize a date using "00" as the year 1900 rather than
the year 2000. Additionally, certain equipment may contain embedded chips that
include date functions that may be affected by the transition to the Year 2000.
In some systems, Year 2000 problems could result in a system failure or
miscalculations causing disruptions of operations and an inability to process
transactions.

      As the operator of an ATM network, the Company relies upon computers and
related telecommunications equipment for the operation of its business. The
Company acts as an intermediary for the transfer of data between its clients and
third parties, and in doing so supplies the operating and technical resources
necessary to cause electronic data to be transmitted. The Company also owns and
operates ATMs, which utilize computer hardware and software to operate.

      The Company has initiated a Year 2000 Project ("Project2000") to locate
and address possible Year 2000 problems. The Company has assigned a project
coordinator for Project2000 who generally manages Project2000, ensures that
Project2000 meets or exceeds requirements set forth by banking regulatory
agencies including the Federal Deposit Insurance Corporation, the Federal
Reserve Bank, and the Office of the Comptroller of the Currency, and assists in
identifying points of concern and providing solutions.

      Status of Year 2000 Readiness.  The Company's Project2000 consists of the
following five phases: awareness, assessment, corrective action, validation and
implementation.

      The awareness phase consists of defining the scope of the Year 2000
problem and establishing a corporate infrastructure and overall strategy to
perform compliance work. In the assessment phase, the Company attempts to
identify all hardware, software, networks, ATMs, other various processing
platforms and customer and vendor interdependencies affected by the Year 2000
problem. This assessment goes beyond information systems and includes equipment
and support systems that may be dependent on embedded microchips. The corrective
action phase involves code enhancements, hardware and software upgrades, system
replacements, vendor certification and other associated changes. The validation
phase involves the testing of incremental changes to hardware and software
components. In the implementation phase, systems are to be certified as Year
2000 compliant. For any systems that are not determined to be compliant, the
consequences must be assessed, and corrective actions or contingency plans put
into effect.

     Awareness Phase. The Company's Project2000 encompasses an overall strategy
to address Year 2000 problems. The Company's Project2000 focuses chiefly upon
the in-house,

                                   Page - 15



<PAGE>


real-time, on-line systems, but also includes assessing and assuring year 2000
compliance from third parties. Because of the seriousness of the year 2000
issues, the Company appointed a Project2000 Coordinator and established a
Project2000 team consisting of the Coordinator, all officers of the Company and
the Accounting Manager.

      To determine the size of the compliance project relating to internal
systems, the Company searched all of its production computer programs for
references to, and actions taken by reference to, the date (year in particular),
and compiled a list of those programs for evaluation for Project2000 issues. The
Company searched for date references that related to performing calculations or
that provided application program logic affecting the decision path of the
application, and date-driven calculations using "00" as an operand.

      The Company also identified all third parties whose ability to comply with
Year 2000 problems might affect the Company's operations, which include product
and service vendors and suppliers, including card issuers and other real-time
connections, and clients.

      The Company has completed the awareness phase.

      Assessment Phase. The assessment phase involves three components: (1)
determining Year 2000 compliance of the Company's internal systems used to
process data and to transfer data between its clients and third parties,
including the Company's computer switch, (2) determining Year 2000 compliance of
its individual ATMs and (3) determining Year 2000 compliance of third party
vendors and clients.

      Internal Systems. With respect to the Company's internal data processing
and transfer systems, in January 1985, as a result of incorrect year-end date
processing, the Company implemented a policy requiring all production programs
making date-related processing decisions to do so using Julian dates. This form
of date processing should not be sensitive to the century rollover.
Consequently, the Company's computer switch was developed using a year 2000
compliant philosophy. The principal piece of equipment comprising the computer
switch is a Tandem computer. In 1997, the Company entered into a lease for a new
Tandem computer that the Company believes is Year 2000 compliant. The Company
also believes that the operating software for the new system is Year 2000
compliant. To assess its internal systems, the Company evaluated all references
to, and actions taken by reference to, the date (year in particular), in its
internal systems. The Company also examined systems and equipment that may be
dependent upon embedded microprocessors. The Company concluded from the
evaluation that its internal systems were Year 2000 compliant. In order to
verify this conclusion, a comprehensive test was completed on September 30, 1997
of all of the Company's critical applications. Prior to cutting over from its
old production system to its new production system on that date, the Company had
the opportunity to set the clock forward in a controlled environment to test all
internal systems and program functionality with regard to the year 2000
rollover.  The test revealed no Year 2000 problems.

      The Company believes its conclusion is supported by the fact that the
Company's system is not highly date-dependent. The Company processes
transactions in segments from 2:00 p.m. one day through 2:00 p.m. the next day.
Consequently, the Company believes that the window of risk for the Company's
internal systems from the year 2000 rollover should be limited to a maximum of
24 hours. Furthermore, the Company processes dates and makes all programmatic
date decisions based on a Julian representation of the date which should not be
vulnerable to the year 2000 rollover. The Company believes that its conclusion
is further supported by the fact


                                   Page - 16
<PAGE>


that all of the application code was developed in-house, all source code is
intact and available, and the Company has the in-house expertise to revise and
maintain the software as needed for the year 2000 rollover.

      Individual ATMs. The Company has assessed whether its individual ATMs are
Year 2000 compliant and determined that as of February 28, 1999 approximately
70% of the Company's individual ATMs are Year 2000 compliant or can be made Year
2000 compliant with the purchase of software upgrades from the manufacturer.

      Third Party Compliance. The Company has attempted to obtain initial
certification from its "higher risk" vendors as to Year 2000 Compliance. The
Company has mailed questionnaires to these vendors to identify and, to the
extent possible, to resolve issues involving Year 2000 issues. Responses to
these questionnaires have been verified against information included with
current releases of vendors' products and services and on vendor web sites and
are shared with the Company's clients upon request. In addition, the Company has
engaged in joint testing with most of these vendors and service providers,
testing each party's system and the interface between the systems. The Company
believes that all mission critical vendors and service providers have completed
their internal Year 2000 corrective actions. Service providers, vendors and
suppliers whom the Company deems "no risk" will not be contacted. The Company is
also coordinating with its clients regarding their activities related to the
Year 2000 problem. Most of the Company's clients maintain their own application
programs, although they utilize the Company's computer and network resources.
The Company conducted its own testing on the systems of its largest clients, and
did not discover any Year 2000 problems.

      The assessment phase is complete.

      Corrective Action Phase.  The corrective action phase involves addressing
compliance problems identified during the assessment phase.

      Internal Systems. Because the assessment phase revealed no material Year
2000 problems, the Company does not plan any system replacements, code
enhancements or hardware or software upgrades. However, the Company does plan to
upgrade its Solomon software to bring it into compliance by August 31, 1999 and
to implement "mature" releases of the Tandem operating system and to monitor
Tandem Year 2000 Compliance statements regarding such releases.

      Individual ATMs. With respect to those ATMs that can be made Year 2000
compliant with the purchase of software upgrades from the manufacturer, the
Company expects to obtain software upgrades at no charge because of the recent
date of purchase of these ATMs. However, in the event the Company must purchase
ATM software upgrades, management estimates that the cost should not exceed
$50,000. The Company expects to complete all software upgrades by October 31,
1999.

      The Company expects to replace approximately half of these ATMs prior to
the Year 2000 as part of an ongoing program of replacing ATMs and other
equipment for technology and maintenance reasons. Some of these ATMs may be
replaced with used Year 2000 compliant ATMs to minimize cost. The balance of the
ATMs that are not Year 2000 compliant are located in marginally profitable
locations, will not be replaced and will be phased out.

                                   Page - 17

<PAGE>


      Third Party Compliance. Because no material Year 2000 problems have been
discovered to date, the Company does not currently plan any corrective action
with respect to service providers, vendors, suppliers and clients. However, the
Company continues to test these connections to the Company.

      The corrective action phase has been completed as to the Company's
internal systems and third party vendors, although as described below, the
Company intends to continue testing in these areas. The corrective action phase
with respect to individual ATMs will be completed prior to the Year 2000 when
all replacement or upgraded ATMs are expected to be in operation.

      Validation Phase. During the validation phase, the Company will continue
to test its internal systems, test its new and upgraded ATMs for Year 2000
compliance and engage in further testing with certain third parties.

      Internal Systems. The Company will continue to test and validate all
incremental changes to hardware, software, and connections with other systems as
those changes (or additions) occur in the ordinary course of business prior to
Year 2000. All users of the Company's products and services have been asked to
validate the Company's Year 2000 compliance. The majority of such testing was
completed in June 1999. The remainder of the service provider testing should be
complete by November 15, 1999.

      Individual ATMs. Year 2000 compliance of all replacement and upgraded ATMs
will be tested prior to or at the time such ATMs are brought on line.

      Third Party Compliance. The Company has reviewed the Year 2000 compliance
of its outside service providers, vendors, and suppliers and obtained written
"re-validated" certifications from all but four vendors. These four vendors have
provided the Company with oral verification of their compliance and will provide
written verification of such compliance prior to the end of 1999. The Company
continues to request each outside service provider, vendor, and supplier to
provide quarterly statements of compliance through the end of 1999.

      The validation phase will be completed at the times described above.

      Implementation Phase. The Company performed a final full internal system
test in June 1999. The test was performed using several dates in the year 2000.
There were no internal component or critical application failures. In addition,
the Company also tested transactions utilizing future dates on all ATM models
currently in use. Results of the testing indicated that transactions to all but
one ATM model processed successfully. The NCR ATM Model 1773 did not process
year 2000 transactions and the Company is currently on schedule for replacement
of these ATMs by November 30, 1999.

      Regulatory and Independent Assessment. In addition to developing an
internal risk assessment methodology with respect to Year 2000 issues, the
Company is subject to external examinations and project reviews by regulatory
agencies and governmental bodies of the federal government. To date, these
examinations have not identified any material issues regarding the Company's
Year 2000 compliance efforts.

      The Company has hired an independent third party to act as an external
compliance "witness" to review and implement the Company's overall Year 2000
compliance, as well as verifying and validating the Company's Year 2000 risk.
The external compliance "witness" is

                                   Page - 18

<PAGE>


responsible for the following activities: (i) facilitating maintenance of the
vendor lists; (ii) assisting in Year 2000 budgetary activities; (iii) reviewing,
finalizing and facilitating rehearsal of contingency plans; (iv) ensuring
government and regulatory recommendations are completed; (v) maintaining current
Year 2000 status on the Company's website; (vi) preparing readiness disclosure
for the Company's affiliated banks; and (vii) preparing project status for the
Board of Directors.

      The Company's Project2000 team also continues to review the Company's
readiness for the Year 2000.

      Year 2000 Compliance of Support Systems. In addition to computers and
related systems, the operation of office and facilities equipment, such as fax
machines, photocopiers, security systems, air conditioning, fire systems and
other common devices may be affected by Year 2000 problems. The Company does not
expect to devote substantial resources or time to evaluating potential Year 2000
problems with respect to these systems, other than contacting the manufacturer
or provider of these systems to determine Year 2000 compliance and taking or
arranging for appropriate corrective action.

      Costs of Year 2000 Compliance. The principal cost incurred by the Company
in connection with Project2000 will be the cost of replacing obsolete ATM
equipment as part of the Company's ongoing process of upgrading and modernizing
its ATMs. As of July 31, 1999, approximately 60 NCR model 1773 ATMs currently in
operation are not Year 2000 compliant. While these ATMs are predominately in low
volume sites, they will be replaced by December 1, 1999. The expected remaining
cost of this project is approximately $275,000. The Company has previously
incurred approximately $185,000 in expenses related to this project.

      The Company has not identified any other significant costs directly
relating to the Year 2000 problem. The cost of compliance testing of external
client systems is billed to the Company clients. Testing and repair, and the
day-to-day burden of Project2000 has consumed incremental overhead of managers
and executive officers of the Company. Such overhead has been effectively
absorbed with no material effect on budgets and operations.

      Possible Consequences of Year 2000 Problems. It is not possible to predict
with any certainty the extent and nature of Year 2000 problems that the Company
may encounter. Management believes that the following are possible consequences
of Year 2000 problems that could arise:

o        operational inconveniences and inefficiencies for the Company and its
         clients which will divert management's time and attention and financial
         and human resources from ordinary business activities;

o        serious system failures that will cause material business disruptions
         or require significant efforts by the Company or its clients to prevent
         or alleviate material business disruptions;

o        routine business disputes and claims for pricing adjustments or
         penalties due to Year 2000 Problems incurred by clients, which would be
         resolved in the ordinary course of business; and


                                   Page - 19
<PAGE>




o        serious business disputes alleging that the Company failed to comply
         with the terms of contracts or industry standards of performance, some
         of which could result in litigation or contract termination.

      Contingency Plans. The Company has developed department-by-department
contingency plans to be implemented if its efforts to identify and correct Year
2000 Problems affecting its internal systems are not effective. Depending upon
the systems affected, these plans include accelerated replacement of affected
equipment or software; short- to medium-term use of backup sites, equipment, and
software, increased work hours for Company personnel; and similar approaches.

      Disclaimer. Management of the Company believes that it is not possible to
determine with complete certainty that all Year 2000 problems affecting the
Company or its clients have been or will be identified or corrected. The number
of devices that could be affected and the interactions among these devices are
simply too numerous. In addition, no one can accurately predict how many Year
2000-related failures will occur or the severity, duration, or financial
consequences of any such failure.

      The Company's policy is not to acquire hardware, software or other
technology that is not contractually represented by the vendor as Year 2000
compliant. However, the Company cannot be sure that all of these products are in
fact Year 2000 compliant. In addition, although the Company does not have any
contractual responsibility to ensure that its clients' application programs are
compliant, if its clients experience Year 2000 problems with such applications,
such clients may reduce or cease use of the Company's products and computing
resources. The successful operation of the Company's data processing and
transfer systems is dependent upon the proper functioning of the systems of
third parties that utilize the Company's services. Any failure of third parties
to resolve Year 2000 problems in a timely manner could materially adversely
affect the Company's operations.

      There can be no assurance that the Company will identify and resolve all
Year 2000 issues in a timely manner. Any failure by the Company to adequately
resolve all Year 2000 issues could have a material adverse effect on the
Company's business, financial condition, and results of operation.

      Forward-Looking Statements. The Company believes that many of the
statements contained in this discussion of Year 2000 issues may constitute
"forward-looking statements." These statements are not guarantees of future
performance or results. They involve risks, uncertainties and assumptions.
Consequently, actual results may differ materially from those discussed in these
forward-looking statements. See "Cautionary Statement Concerning Forward-Looking
Statements" for additional information and factors to be considered with respect
to forward-looking statements.

Future Changes in Accounting Principles

      In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This Statement establishes the accounting
for derivative instruments, including certain derivative instruments imbedded in
other contracts and hedging activities. This Statement is effective for all
fiscal quarters of fiscal years beginning after June 15, 1999. Management has
not yet determined the impact of adopting this pronouncement on the Company's
results of operations or financial position.

                                   Page - 20
<PAGE>


      In March 1998, the AICPA issued SOP 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use." This SOP provides
guidance on accounting for the costs of computer software developed or obtained
for internal use. This SOP is effective for fiscal years beginning after
December 15, 1998. Management has not yet determined the impact of adopting this
pronouncement on the Company's results of operations or financial position.

Cautionary Statement Concerning Forward-Looking Statements

      The Company believes that certain statements contained in this Quarterly
Report on Form 10-QSB that are not statements of historical fact may constitute
"forward-looking statements" within the meaning of Section 21E of the Exchange
Act. These statements are subject to risks and uncertainties, as described
below.

      Examples of forward-looking statements include, but are not limited to:
(i) projections of revenues, income or loss, earnings or loss per share, capital
expenditures, the payment or non-payment of dividends, capital structure and
other financial items, (ii) statements of plans and objectives of the Company or
its management or Board of Directors, including plans or objectives relating to
the products or services of the Company, (iii) statements of future economic
performance, and (iv) statements of assumptions underlying the statements
described in (i), (ii) and (iii). Forward-looking statements can often be
identified by the use of forward-looking terminology, such as "believes,"
"expects," "may," "will," "should," "could," "intends," "plans," "estimates" or
"anticipates," variations thereof or similar expressions.

      Forward-looking statements are not guarantees of future performance or
results. They involve risks, uncertainties and assumptions. The Company's future
results of operations, financial condition and business operations may differ
materially from those expressed in these forward-looking statements. Investors
are cautioned not to put undue reliance on any forward-looking statement.

      There are a number of factors that could cause actual results to differ
materially from those discussed in the forward-looking statements, including
those factors described below. Other factors not identified herein could also
have such an effect. Among the factors that could cause actual results to differ
materially from those discussed in the forward-looking statements are the
following:

o        Changes in laws or card association rules affecting the Company's
         ability to impose surcharge fees, and continued customer willingness to
         pay surcharge fees;

o        The ability of the Company to form new strategic relationships and
         maintain existing relationships with issuers of credit cards and
         national and regional card organizations;

o        The ability of the Company to expand its ATM base and transaction
         processing business;

o        The availability of financing at reasonable rates for vault cash and
         for other corporate purposes, including funding the Company's expansion
         plans;


                                   Page - 21

<PAGE>


o        The ability of the Company to maintain its existing relationships with
         two operators of combination convenience stores and gas stations at
         which the Company maintains 44 and 43 ATMs, respectively, as of
         July 31, 1999;

o        The ability of the Company to keep its ATMs at other existing locations
         at reasonable rental rates and to place additional ATMs in preferred
         locations at reasonable rental rates;

o        The extent and nature of competition from financial institutions,
         credit card processors and third party operators, many of whom have
         substantially greater resources than the Company;

o        The ability of the Company to maintain its ATMs and information
         systems technology without significant system failures or breakdowns;

o        The ability of the Company to cause its ATMs and information systems to
         be Year 2000 compliant and the extent to which the systems of card
         issuers, card organizations, banks and other companies on which the
         Company's systems rely are Year 2000 compliant;

o        The extent of losses from errors and omissions, employee dishonesty and
         vault cash losses, for which the Company does not maintain insurance;

o        The ability of the Company to develop new products and enhance existing
         products to be offered through ATMs, and the ability of the Company to
         successfully market these products;

o        The ability of the Company to identify suitable acquisition candidates,
         to finance and complete acquisitions and to successfully integrate
         acquired assets and businesses into existing operations;

o        The ability of the Company to retain senior management and other key
         personnel;

o        Changes in general economic conditions.

Any forward-looking statement contained herein is made as of the date of this
document. The Company does not undertake to publicly update or correct any of
these forward-looking statements in the future.


                           PART II - OTHER INFORMATION

Item - 4    Submission to a Vote of Security

      The Company held its annual meeting of shareholders on July 15, 1999.

      The first order of business for action by the shareholders was the
election of three directors. The nominees for election as set forth in the
Company's June 7, 1999 proxy statement were David S. Bonsal, Arthur M. Moglowsky
and Jeffrey M. Sperry, all incumbent directors. The Company did not receive any
other nominations prior to the deadline specified in its By-

                                   Page - 22
<PAGE>


laws. Of the 25,204,513 shares of common stock, $.01 par value, of the Company
("Common Stock") represented at the meeting by proxy, 22,832,887 shares,
constituting 58.11% of the outstanding shares of Common Stock, were voted in
favor of the election of each of Messrs. David S. Bonsal, Arthur M. Moglowsky
and Jeffrey M. Sperry and 2,371,626 shares, constituting 6.04% of the
outstanding shares of Common Stock, were withheld. Therefore, Messrs. Bonsal,
Moglowsky and Sperry were elected for another term as directors of the Company.

      The next order of business for action by the shareholders was to consider
the ratification of the appointment of Baird, Kurtz and Dobson, independent
public accountants, to examine the accounts of the Company for the 2000 fiscal
year. Of the 25,204,513 shares of Common Stock represented at the meeting by
proxy, 23,864,326 shares, constituting 60.73% of the outstanding shares of
Common Stock, were voted for ratification of the appointment of Baird, Kurtz and
Dobson, 1,333,887 shares were voted against and 6,300 shares abstained.
Therefore, the appointment of Baird, Kurtz and Dobson to examine the accounts of
the Company for the 2000 fiscal year was ratified.

      No other matters were submitted to a vote of security holders during the
period covered by this Quarterly Report on Form 10-QSB

Item - 6    Exhibits and Reports on Form 8-K.

      (a)   Exhibits
            --------

            The exhibits required by this item are listed in the Index to
Exhibits set forth at the end of this Form 10-QSB.

      (b)   Reports on Form 8-K
            -------------------

            Current Report on Form 8-K (Item 5) dated May 27, 1999.


                                   Page - 23
<PAGE>


                                   SIGNATURES


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


                                    UNIVERSAL MONEY CENTERS, INC.
                                    (Registrant)


Date: September 20, 1999            By: /s/ David S. Bonsal
                                        --------------------------------------
                                        David S. Bonsal
                                        Chairman of the Board
                                        and Chief Executive Officer



Date: September 20, 1999            By: /s/ John L. Settles
                                        --------------------------------------
                                        John L. Settles
                                        President
                                        (Principal Financial and Accounting
                                             Officer)


                                   Page - 24
<PAGE>



                                  INDEX TO EXHIBITS

Exhibit
Number      Description

3.1*        Articles of Incorporation of the Company, as amended

3.2*        Amended and Restated Bylaws of the Company

4.1*        Promissory Note dated June 3, 1996 issued by the Company to Bank 21
            (formerly The Farmers Bank)

4.2*        Business Loan Agreement dated June 3, 1996 between the Company and
            Bank 21 (formerly The Farmers State Bank)

4.3*        Promissory Note dated August 26, 1996 issued by the Company to Bank
            21 (formerly The Farmers State Bank)

4.4*        Business Loan Agreement dated August 26, 1996 between the Company
            and Bank 21 (formerly The Farmers State Bank)

4.5*        Commercial Security Agreement dated August 26, 1996 between the
            Company and Bank 21 (formerly The Farmers State Bank)

4.6**       Promissory Note dated April 9, 1998 issued by the Company to Bank 21
            (formerly The Farmers Bank)

4.7**       Negative Pledge Agreement dated April 9, 1998 between the Company
            and Bank 21 (formerly The Farmers State Bank)

4.8**       Commercial Security Agreement dated April 9, 1998 between the
            Company and Bank 21 (formerly The Farmers State Bank)

10.1        Lease Schedule No. 2 dated May 11, 1999 to the Master Lease
            Agreement dated January 18, 1999 between the Company and Dana
            Commercial Credit.

10.2        Lease Schedule No. 3 dated June 2, 1999 to the Master Lease
            Agreement dated January 18, 1999 between the Company and Dana
            Commercial Credit.

27          Financial Data Schedule

* Incorporated by reference from the exhibit to the registrant's Annual Report
on Form 10-KSB for the fiscal year ended January 31, 1998 which bears the same
exhibit number.

**Incorporated by reference from the exhibit to the registrant's Quarterly
Report on Form 10-QSB for the quarter ended April 30, 1998 which bears the same
exhibit number.


                                    Page - 25