U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934:
    For the fiscal year ended December 31, 1998

[ ] TRANSITION  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
    OF   1934:   For  the   transition   period   from   __________________
    to _________________.

                         Commission File number 0-17773

                             ATS MONEY SYSTEMS, INC.
                             -----------------------
                 (Name of small business issuer in its charter)

                Nevada                                  13-3442314
                ------                                  ----------
  (State of other jurisdiction of          (I.R.S. employer identification No.)
  incorporation or organization)

                 25 Rockwood Place, Englewood, New Jersey   07631
               -----------------------------------------------------
               (Address of principal executive offices)   (Zip code)

                    Issuer's telephone number: (201) 894-1700
                                               --------------

       Securities registered under Section 12(b) of the Exchange Act: None
                                                                      ----

         Securities registered under Section 12(g) of the Exchange Act:

                          Common Stock, $.001 par value
                          -----------------------------
                                (Title of class)

         Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the  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: 
     ---      ---

         Check if there is no  disclosure  of  delinquent  filers in response to
Item 405 of Regulation S-B not contained in this form, and no disclosure will be
contained,  to the  best of  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. [ ]

         State issuer's revenues for its most recent fiscal year: $14,447,077
                                                                  -----------

         State  the  aggregate   market  value  of  the  voting  stock  held  by
non-affiliates  computed by  reference to the price at which the stock was sold,
or the average bid and asked prices of such stock, as of a specified date within
the past 60 days:

         Approximately  $1,772,119  based on the average of the high bid price $
         25/32 and low asked price $ 27/32  published by the National  Quotation
         Bureau Inc. on March 11, 1999.

         State the number of shares  outstanding of each of the issuer's classes
         of common equity,  as of the latest  practicable  date: As of March 11,
         1999 - 5,841,547 shares of Common Stock, $.001 par value.

                       DOCUMENTS INCORPORATED BY REFERENCE

         1999  definitive,  annual meeting proxy  statement to be filed with the
         Commission - incorporated by reference into Part III.

         Transitional Small Business Disclosure Format: Yes:     No:  X 
                                                             ---     ---
<PAGE>


         THIS ANNUAL REPORT ON FORM 10-KSB  CONTAINS,  IN ADDITION TO HISTORICAL
         INFORMATION,   CERTAIN  FORWARD-LOOKING  STATEMENTS  THAT  MAY  INVOLVE
         SIGNIFICANT RISKS AND UNCERTAINTIES.  SUCH  FORWARD-LOOKING  STATEMENTS
         ARE BASED ON  MANAGEMENT'S  BELIEF AS WELL AS ASSUMPTIONS  MADE BY, AND
         INFORMATION  CURRENTLY  AVAILABLE TO, MANAGEMENT  PURSUANT TO THE "SAFE
         HARBOR" PROVISIONS OF THE PRIVATE  SECURITIES  LITIGATION REFORM ACT OF
         1995. THE COMPANY'S  ACTUAL RESULTS COULD DIFFER  MATERIALLY FROM THOSE
         EXPRESSED IN OR IMPLIED BY THE FORWARD-LOOKING  STATEMENTS CONTAINED IN
         THIS ANNUAL  REPORT.  FACTORS  THAT COULD CAUSE OR  CONTRIBUTE  TO SUCH
         DIFFERENCES  INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED IN ITEM 1
         -  "DESCRIPTION  OF  BUSINESS",  ITEM 6  "MANAGEMENT'S  DISCUSSION  AND
         ANALYSIS OR PLAN OF OPERATIONS" AND ELSEWHERE IN THIS ANNUAL REPORT, AS
         WELL  AS  GENERAL  ECONOMIC  CONDITIONS,  ECONOMIC  CONDITIONS  IN  THE
         INDUSTRIES IN WHICH THE COMPANY'S CUSTOMERS COMPETE, A DETERMINATION BY
         THE  COMPANY'S  CUSTOMERS  TO PROLONG THE TEST CYCLES OF THE  COMPANY'S
         EQUIPMENT,  SOFTWARE AND SOFTWARE  SUPPORT SERVICES AND A DETERMINATION
         BY THE  COMPANY'S  CUSTOMERS  TO  MODIFY  OR  CHANGE  THEIR  UNDERLYING
         COMPUTER  AND  CASH  REPORTING  SYSTEMS.   THE  COMPANY  UNDERTAKES  NO
         OBLIGATION  TO  RELEASE  PUBLICLY  THE RESULT OF ANY  REVISIONS  TO ITS
         FORWARD-LOOKING  STATEMENTS  THAT MAY BE MADE IN THIS ANNUAL  REPORT TO
         REFLECT EVENTS OR CIRCUMSTANCES OCCURRING AFTER THE DATE OF THIS ANNUAL
         REPORT OR TO REFLECT THE OCCURRENCE OF OTHER UNANTICIPATED EVENTS.


PART I

ITEM 1 - DESCRIPTION OF BUSINESS

GENERAL

         ATS Money Systems,  Inc.  ("ATS"),  with Innovative  Electronics,  Inc.
("IEI"), a wholly-owned subsidiary (collectively,  the "Company"), is engaged in
the development, sale and service (i) of currency counting systems and equipment
for department and chain stores' cash offices and bank  commercial  vaults,  and
(ii) of specialized  information  communications systems primarily used by chain
stores.  The Company's  customers are  businesses  that handle a large number of
cash, check and credit transactions on a daily basis, such as banks,  department
stores and chain stores.  The Company was incorporated in 1987 under the laws of
the State of Nevada  and is the  successor  to a similar  business  acquired  by
merger in 1988.

         In August  1994,  the  Company,  through IEI (which was formed for such
purpose),  acquired  the  business  and  substantially  all  of  the  assets  of
Innovative  Electronics,  Inc. Based in Miramar,  Florida, IEI is engaged in the
business of  marketing  hardware and  software  products  designed by IEI or its
predecessor  to permit the  exchange of pricing,  product and other  information
among   stores   within  a  chain  and  between  such  stores  and  the  stores'
headquarters.

PRODUCTS

         The Company is in the business of marketing  currency counting systems,
proprietary software computer systems,  computers and peripherals for automating
chain and  department  stores'  cash  offices  and bank  commercial  vaults.  In
addition,  IEI is engaged  in the  business  of  marketing  point-of-sale  (POS)
systems,  communications  hardware and software products primarily used by chain
stores to permit the internal exchange of information.

         The principal  products sold by the Company  during 1998 were its newly
developed  PowerEncode  Check  Encoding  System,   CP-4000  Retail  Cash  Office
Management  System,  ATS  CP-3000  Retail  Cash Office  Management  System,  ATS
PowerVault  Cash  Management  System,  and  the  ATS  CP-2000   Deposit/Register
Verification  System,  which  products  accounted for  approximately  78% of the
Company's 1998 equipment and systems sales and,  through IEI,  StoreComm ISP and
its related hardware.  The Company also sells various types of currency/document
counters and dispensers.




                                       2
<PAGE>


PowerEncode Check Encoding System
---------------------------------

         The ATS  PowerEncode  check encoding system was developed to reduce the
cost of handling  checks at retail  store  locations.  The system  automatically
balances  checks to  point-of-sale  ("POS")  supplied data, and  pre-encodes the
check amounts  prior to deposit.  The system  provides and maintains  continuous
hands free operation that greatly reduces store labor required to complete these
functions  versus  present  procedures.  ATS  offers the system as part of a new
Value Added Reseller Agreement with Unisys Corporation.

CP-4000 Retail Cash Office Management System
--------------------------------------------

         The CP-4000  System was developed in order to allow the Company to take
advantage  of  the  significant   marketing   effort  being  made  by  Microsoft
Corporation to promote its Windows(R) and Windows NT(R) operating  systems.  The
CP-4000 System is written in native NT code and incorporates all of the features
of the CP-3000 System with the added  advantage of dual  processing  capability.
The dual  processing  capability  allows two  applications to be run at the same
time,  with the labor  expended  being no more than  would  have been used for a
single  application.  A good example of this capability is the ATS PowerEncoding
application  being  run  simultaneously  with  the  retail  register  settlement
application with no additional labor expended.

ATS CP-3000 Retail Cash Office Management System
------------------------------------------------

         The CP-3000 System was developed for the retail industry in response to
the trend of using a UNIX(R) operating system in store  operations.  Application
software for the CP-3000 System is loaded into a central in-store  processor (an
"ISP"),  thereby  eliminating the need for  stand-alone  computers and, in their
place,  using low-cost ASCII  terminals.  The software for the CP-3000 System is
written in C  language,  which  allows it to be used in a  stand-alone  PC, a PC
emulating a terminal or an ASCII  terminal  connected  to the host ISP,  thereby
making  the system  suitable  for  retailers  using  UNIX(R) or other  operating
systems.  The CP-3000 System utilizes advanced  software screen managers.  It is
intended to offer the user greater  flexibility  and to provide the Company with
the ability to offer custom  applications  without  extensive code writing.  The
Company  believes  that  this  feature  enables  the  CP-3000  System to be more
competitive  without  eroding profit  margins.  The selling price of the CP-3000
System varies  substantially  depending  upon the specific  requirements  of the
customer for hardware, software and peripherals.

ATS PowerVault Cash Vault Management System
-------------------------------------------

         The  PowerVault  System was  developed to provide a more  comprehensive
solution for the  requirements of larger banks.  The PowerVault  System utilizes
LAN  technology  and software  such as  Microsoft(R)  Windows(R)  and  Microsoft
Access(R).  While the PowerVault  System retains all of the benefits to users of
the CP-2000 System, it is designed to provide a significant  increase in control
over, and accountability for, funds as they move within the cycle of a vault. In
addition,  the PowerVault System offers the capability of providing reports,  in
hard copy or file, to customers as soon as their  deposits have been  processed.
The  PowerVault  System uses a  combination  of  workstations  with  application
software  providing   different   functions  for  the  various  steps  in  vault
processing.  Because the  requirements of each vault differ to some degree,  the
number  of   workstations   and  the  price  of  the  total   system   fluctuate
substantially.

ATS CP-2000 Deposit/Register Verification System
------------------------------------------------

         The system is an integrated system consisting of a computer, a currency
counter,  one or more  peripherals  and a  proprietary  software  system,  which
provides an alternative to performing manual record keeping of cash receipts and
transfers, and is used primarily by banks and retail establishments. The system,
using an IBM-PC or compatible  computer,  interfaces with the Company's currency
counters to speed up counting,  tally various accounts,  maintain period-to-date
totals,  maintain records and automatically prepare and print various management
reports as a by-product  of the  counting  operation.  The system's  software is
readily  modifiable to fit the  particular  needs of a user and can be upgraded.
All  information  is  captured  on  diskette  or fixed  disk,  which  assists in
generating historical account analysis for management.

        The system is designed for operators  with little or no prior  computer
experience.  Its appeal to management is based on the significant labor savings,
which can be achieved  through the  automation  of the  counting  and  reporting
functions.  If the user does not have an IBM-PC or  compatible  computer and the
associated  currency  counting  equipment  to use the  system,  the  Company can
furnish all of the necessary  equipment.  The system  varies in price  depending
upon the hardware configuration and the specific application software used.



                                       3
<PAGE>

StoreComm2000
-------------

         The StoreComm2000  product suite,  designed for the retail environment,
is a distributed  processing system that provides transaction data processing in
the retail  stores and at the data center.  StoreComm2000  is comprised of three
subsystems: StoreComm/Host and StoreComm/ISP, which are interrelated components,
and StoreComm/POS.

         StoreComm/Host  -  The  StoreComm/Host  product  is a set  of  software
applications  that run on the retail data center host  processor,  typically IBM
mainframe,  AS/400(TM) or Tandem.  StoreComm/Host allows retailers to configure,
manage and control their store network,  from the central host site. This system
facilitates the transfer of data between  corporate  headquarters and the retail
stores within the chain, PLU (price look-up) management,  credit  authorization,
and the ability to make real-time inquiries on store level information.

         StoreComm/ISP - The  StoreComm/ISP is an in-store  processing  software
package  that  resides  in each  store in the  retail  chain,  to which  all POS
terminals  are  networked.   This  software  (and  optional  IEI  communications
hardware/printed  circuit  board) runs on an IBM compatible PC with a Pentium(R)
or higher  processor.  Several operating  environments are supported,  including
UNIX and  Windows  NT.  StoreComm/ISP  is the  in-store  control  point and each
store's  information  gateway  between  the POS and the data  center  host.  The
StoreComm/ISP  monitors  and  collects  all POS  transactions  as they occur and
processes this data into useful reports. In addition,  StoreComm/ISP can provide
the  POS   terminals   and  other   networked   devices  with  access  to  added
functionality,  such as credit verification,  price look-up, e-mail, layaway and
gift certificate tracking. During 1998, IEI provided a customized version of its
Windows NT based  StoreComm/ISP  for a major,  southeast US based retail  chain.
Implementation  of the solution enabled the customer to extend the life of their
existing POS terminals, thereby preserving a significant POS investment.

         StoreComm/POS - StoreComm/POS is the point-of-sale software transaction
set that runs on the POS terminals.  The  StoreComm/POS  is designed to run on a
variety of  terminal  types,  including  all  PC-based  POS  terminals,  such as
terminals manufactured by NCR, IBM and Fujitsu-ICL, as well as some older non-PC
based POS  terminals.  The  StoreComm/POS  software uses a CRT as its display to
provide the cashier  with a  full-screen  menu driven  interface  and utilizes a
function key oriented keyboard.  An optional feature of the StoreComm/POS is the
application  and development  test tool,  which allows the retailer to customize
the software and automate testing of modifications made.

Other Products
--------------

         In addition to the foregoing products, the Company markets several coin
and currency/document counters, all microprocessor controlled for accuracy.

         Counters are used by banks, retail establishments, transit authorities,
currency exchanges and other commercial and governmental agencies for accurately
counting large  quantities of coins,  currency,  coupons,  transit toll tickets,
checks  and other  documents.  The  Company  offers  three  different  models of
currency/document  counters, each of which can count at least 1000 documents per
minute.  Two of the models can be equipped with a counterfeit  detection aid. In
addition, the Company offers a coin counter/packager and a coin counter/sorter.

         The ATS-601,  an electronic scale for weighing currency and coins, does
the  work  of a  friction  feed  currency  counter  and a  coin  counter  at the
approximate  cost of only one of those  units.  As a result,  the user  benefits
through a reduction  in capital  expenditure,  as well as a reduction  in annual
maintenance,   since  the  ATS-601  has  no  mechanical  parts  to  wear  or  be
re-adjusted.

         The ATS-5000 Automated Telephone Cash Ordering System, like the CP-2000
System,  is an  integrated  system which  allows coin and currency  orders to be
taken  automatically  over the telephone.  With the ATS-5000 System,  the caller
placing the order enters all necessary  information  with the telephone  keypad,
thereby  eliminating  the personnel  formerly needed to answer the telephone and
write the order.  After an order is placed,  the ATS-5000 System prepares all of
the various  reports and documents  necessary for picking,  packing and shipping
the order.  The document  needed to charge the account placing the order also is
prepared.  The ATS-5000  System answers the phone in a friendly,  natural voice,
repeats  the amount of each item  ordered  and  informs  the caller of the total
amount of the order when it is completed.  Upon  completion,  the caller is also
given an order  confirmation  number.  The ATS-5000 System can service  multiple
callers  simultaneously,  process  standard orders  automatically  and prepare a
variety of management  reports.  As a result,  the ATS-5000 System utilizes less
labor and eliminates the possibility of transcribing errors.



                                       4
<PAGE>


MAINTENANCE AND SERVICE CONTRACTS

         The Company generally warrants its products for 90 days after the sale.
Warranty and after-warranty service on all hardware products is provided through
a national  third-party  service  company  under  contract to the Company.  As a
result,  a customer  usually is able to receive a response to a service  request
within four business hours and the Company does not incur the overhead  expenses
which would normally be associated with maintaining a field service  department.
Warranty and after-warranty service on all software products is handled over the
telephone by the  Company's  help-desk  personnel who are trained on the various
systems installed in customers' locations.

         Pursuant to its maintenance  contracts,  customers  purchasing complete
systems  have  access to a toll-free  "hot line"  which  allows them to call the
Company  directly  if they have a  problem.  The  Company's  support  department
determines  the nature of the problem and arranges for the dispatch of technical
service  when  necessary.  If the  problem is  operator-oriented,  it is usually
correctable  without  a visit  from a  field  technician.  Customers  purchasing
stand-alone  equipment have access to the Company's  third party service company
in the event of a problem.  Customers who purchase  StoreComm  2000 systems call
IEI  directly  if they have a problem,  where  customer  support  personnel  are
available to help resolve the problem.

         The Company's  maintenance  contracts  usually are for a maximum of one
year,  generally  commence at the beginning of the calendar year and are prepaid
in full at such time.  The Company  retains  ownership of all service  contracts
with its customers, which are priced to return a profit to the Company.

MARKETING

         The Company  believes  that the  immediate  market for its products are
those  businesses  that handle large  amounts of cash on a daily basis,  such as
retail chain stores,  department stores and banks. The Company is an established
supplier of currency  counting and control  systems and equipment and, since its
acquisition of IEI, has begun to establish  itself as a supplier of hardware and
software  systems  designed to permit the exchange of data among stores within a
chain. In the retail industry, the Company's customers include Bergdorf-Goodman,
T.J. Maxx, Target Stores, Mervyns, The Home Depot, Lowe's Companies,  Inc., Ames
Department  Stores and Carson Pirie Scott & Company.  The  Company's  users also
include  major  banks in the  United  States as well as  national  and  regional
armored car operators.

         In general,  because of the nature of the Company's  products,  a large
potential  customer will normally place a small order for the Company's products
for  testing  in one or  several  locations.  If  testing  meets the  customer's
criteria,  the customer  will  generally  order a large  quantity of product for
installation  throughout its locations and,  thereafter,  will order  decreasing
quantities to complete  installation at smaller or newly established  locations.
During 1998, sales to Target Stores and Mervyns, both divisions of Dayton-Hudson
Corporation and sales directly to Dayton-Hudson, in the aggregate, accounted for
approximately  46% of the  Company's  total  revenues.  In addition,  Home Depot
accounted  for 17% with no other  customer  accounting  for more  than 5% of the
Company's  total  revenues.  The Company's bank sales are not seasonal,  but its
sales to retailers generally occur during the first three quarters of each year.

         The Company markets its products on a national basis,  primarily by its
own  employees,  supervised by the Company's  executive  officers.  Although the
Company  expects that a high  percentage of its future sales will continue to be
made by its own employees,  the Company continues to review potential  strategic
alliances and, should any opportunity  arise,  the Company may take advantage of
the sales  potential  available  through the  formation  of  strategic  business
alliances with larger companies  engaged in the sale of  complementary  products
and services.

<PAGE>


         The Company's  sales staff is organized into a territory sales group, a
national accounts sales group for retail cash office system sales, and a POS and
communications  systems  solutions  sales group.  This  structure is designed to
assure coverage of the banking industry, which is comprised of local or regional
organizations, and the retail industry, which is essentially controlled by chain
organizations with headquarters having control over systems and purchasing.  The
territory  sales group is responsible  for direct sales to banks and independent
retail   operations   within  a   specific   geographical   area  in  which  the
representative  is  assigned.  This group also would  serve to support the sales
efforts of sales  representatives of those  organizations with which the Company
may form a strategic  business  alliance.  The national  accounts sales group is
headquartered  at the  Company's  offices in New Jersey and is  responsible  for
retail cash office systems sales to chain stores with centralized management and
purchasing.  The  POS  and  communications  systems  solutions  sales  group  is
headquartered at IEI's offices in Miramar,  Florida,  and is responsible for the
sale of POS and  communications  products to chain stores.  The Company's  sales
staff receives a base salary plus commissions.

         IEI has  established  business  alliances  with several  major  vendors
within the retail industry,  namely IBM, NCR,  Fujitsu-ICL and Epson, as well as
non-industry  specific vendors,  including  Microsoft,  Oracle,  SCO and Tandem.
Through these relationships, IEI has had access to low-cost or free hardware and
software for development  purposes,  as well as sales and marketing  programs to
strengthen market position.



                                       5
<PAGE>

         The Company  participates in industry  conferences such as the National
Retail Federation ("NRF") Annual Conference,  the NRF Retail Information Systems
Conference,   the  Retail  Systems  Conference  and  Exhibition,   the  National
Association  of  Convenience  Stores,  Food  Service  Technology  and  the  Food
Marketing  Institute's   Marketechnics  Conference.  In  addition,  the  Company
conducts a small number of private shows in selected cities.

PRODUCT DEVELOPMENT AND ENHANCEMENT

         The Company's  software systems are  proprietary.  Since its inception,
the Company has  continued  to develop  and  enhance  its  proprietary  software
systems to automate  cash  processing.  During 1998 and 1997,  the Company spent
approximately  $671,000 and $984,000,  respectively,  to enhance its proprietary
software systems.

         The  Company  relies  on the  complexity  of its  proprietary  software
systems and its licensing agreements to protect its computer software coding.

MANUFACTURING, DISTRIBUTION AND PROPRIETARY RIGHTS

         The  Company  does  not  manufacture  any of the  equipment  it  sells,
although some  equipment and  components are  manufactured  exclusively  for the
Company. Some of the equipment sold by the Company is distributed exclusively by
the  Company  in the  United  States.  Other  equipment  is  purchased  from the
manufacturer  with the Company's  label and still other equipment is distributed
with the manufacturer's label on a non-exclusive basis by the Company.

         Other than the  printed  circuit  boards used in  conjunction  with the
StoreComm ISP,  which circuit boards are  proprietary  and  manufactured  to the
Company's specifications,  substitute equipment for use in the Company's systems
is obtainable by the Company from other sources.

EMPLOYEES

         As of March 1, 1999, the Company had 55 full-time employees, 18 of whom
are at IEI. Eleven of the Company's  employees are executive and  administrative
personnel,  fifteen  are  systems  software  development  personnel,  twelve are
customer software support personnel, six are customer hardware support personnel
and  eleven are sales and  marketing  personnel.  The  Company's  employees  are
covered by a  comprehensive  medical and major  medical  plan,  and receive life
insurance and long term disability  benefits.  The Company is not a party to any
collective  bargaining  agreement  and  considers  its employee  relations to be
satisfactory.

         It is the Company's practice to require its marketing employees to sign
a non-compete  agreement which restricts the employee,  following the employee's
termination  of  employment,  from  competing  with the  Company for a six-month
period in any  territory  where the  employee  represented  the  Company or with
respect  to any of the  employee's  former  accounts.  It also is the  Company's
practice to require its technical employees to sign a confidentiality agreement.

         From time to time,  the Company  utilizes the  services of  independent
consultants  to  provide  computer  systems  analysis  and  software  design and
support.  It is the Company's  practice to retain all rights to the work product
created for the Company by such consultants.

COMPETITION

         The  Company's  business  is  highly   competitive.   There  are  other
manufacturers and distributors of systems and equipment,  similar to the systems
and  equipment  marketed  by the  Company,  who are larger  than the Company and
possess  substantially  greater resources than the Company. The Company believes
that most of its  competitors  generally  sell  products that are rigid in their
application  and not suitable  for all retail  operations.  The Company,  on the
other hand,  generally  customizes  its  products to fit a  customer's  specific
needs.  As a result,  the Company  believes that its products  currently offer a
more flexible and comprehensive solution than its competitors' products.



                                       6
<PAGE>


ITEM 2 - DESCRIPTION OF PROPERTY

         The Company  leases  approximately  10,510  square feet in a four story
brick building in Englewood, New Jersey at a current annual rental, beginning in
February  1999,  of $239,102  (subject to  increases  for real estate  taxes and
utility costs),  for a term ending February 28, 2004 which, at the option of the
Company, may be extended for an additional five years.  Approximately 50 percent
of the space is used for executive and sales offices,  approximately  10 percent
is used for  storage  and  approximately  40  percent  is used for  testing  and
development of the Company's products. The Company also leases approximately 900
square  feet of space in  Englewood,  New  Jersey,  used for  storage  and depot
service,  at a current  annual  rental of $9,000 for a term ending  November 23,
2000.

         IEI leases  approximately  11,047 square feet in a contemporary  office
park in Miramar,  Florida at a current  annual  rental of  $129,928  (subject to
increases for real estate taxes and utility costs),  for a term ending April 30,
2000.

         The Company  considers  its  facilities  suitable  and adequate for its
present use.

ITEM 3 - LEGAL PROCEEDINGS

         There are no material pending legal proceedings to which the Company is
a party or to which any of its property is subject.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         No matter was  submitted  to a vote of security  holders of the Company
during the fourth quarter of its 1998 fiscal year.

PART II

ITEM 5 - MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         (a) Market  Information.  The following  table sets forth the quarterly
             high and low bid prices, as reported in the "pink sheets" published
             by the  National  Quotation  Bureau  Inc.,  for the two years ended
             December 31, 1998. The quotations reported represent prices between
             dealers, do not include retail mark-ups,  markdowns or commissions,
             and do not necessarily represent actual transactions.

                     1998 Calendar Year         High Bid          Low Bid
                     ------------------         --------          -------
                     1st Quarter                 1-1/16             5/8
                     2nd Quarter                 1-5/32            29/32
                     3rd Quarter                 1-5/32            29/32
                     4th Quarter                 1                 29/32

                     1997 Calendar Year         High Bid          Low Bid
                     ------------------         --------          -------
                     1st Quarter                $  3/4            $15/32
                     2nd Quarter                  13/16            11/16
                     3rd Quarter                  15/16             3/4
                     4th Quarter                 1-1/8             25/32

         (b) Holders. As of March 5, 1999, the Company had 392 holders of record
             of Common Stock,  including  Cede & Company,  which held  1,694,177
             shares  of  Common  Stock as  nominee  for a number  of  securities
             brokers.  Bulletin Board Market Makers  maintaining a market in the
             Common  Stock on March  6,  1999  consisted  of  Financial  America
             Securities,  Inc; USCC Trading division of Fleet Securities,  Inc.;
             Greenwood Partners LP, GVR Co.; Herzog,  Heine,  Geduld,  Inc; Hill
             Thompson  Magid & Co.;  Knight  Securities  LP; Mayer & Schweitzer,
             Inc; M.H.  Meyerson & Co., Inc.;  Paragon  Capital Corp. and Sharpe
             Capital Inc.

         (c) Dividends.  The Company has never paid any cash  dividends and does
             not plan to pay  cash  dividends  in the  foreseeable  future.  The
             payment of  dividends  will depend upon the  Company's  outstanding
             loan  arrangements  as well as its  short-term  and long-term  cash
             availability,  working  capital and working capital needs and other
             factors, as determined by the Company's Board of Directors.



                                       7
<PAGE>


ITEM 6 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

IN REVIEWING  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS,  REFERENCE IS MADE TO THE
FINANCIAL  STATEMENTS  AND  NOTES  THERETO  INCLUDED  AS  ITEM  7  -  "FINANCIAL
STATEMENTS" IN THIS ANNUAL REPORT ON FORM 10-KSB.


WORKING CAPITAL AND LIQUIDITY

Information  with  respect to levels of working  capital and other  ratios as of
December 31, 1998, 1997 and 1996 is as follows:


<TABLE>
<CAPTION>
                                                 1998          1997          1996
                                                 ----          ----          ----
<S>                                           <C>           <C>           <C>       
WORKING CAPITAL                               $1,705,674    $1,515,609    $1,512,100
(current assets less current liabilities)   
WORKING CAPITAL RATIO                          1.68 to 1     1.83 to 1     2.78 to 1
(current assets to current liabilities)     
PERCENTAGE OF CURRENT LIABILITIES TO              72%           60%           35%
STOCKHOLDERS' EQUITY                        
PERCENTAGE OF TOTAL LIABILITIES TO                77%           66%           45%
STOCKHOLDERS' EQUITY                        
</TABLE>

         At December 31, 1998, cash (and cash equivalents) amounted to $286,368,
and the Company did not have any outstanding  borrowings.  In April 1997,  First
Union National renewed a $750,000 discretionary line of credit for the Company's
short-term  needs, at an interest rate equal to such bank's base rate plus 1/2%.
All  advances  under this line of credit are required to be secured by a lien on
substantially  all of the Company's assets. As of December 31, 1998, the Company
did not have any draw against this line of credit.

         Management  believes  that economic  conditions  within the two largest
industries from which the Company draws its customers,  retail and banking, will
continue  to improve in 1999,  which may result in  increased  revenues  for the
Company.

         The Company believes that its working capital and available cash during
1999  will be  adequate  to  maintain  its  operations  and pay its  outstanding
obligations  as they become due, and that excess cash will be used  primarily to
purchase  inventory,  to enhance its software and to repurchase its  outstanding
common  stock.  The Company  does not believe that it will be necessary to raise
additional funds during 1999,  except by temporary bank borrowings in the normal
course of business.

         The Company does not believe that inflation will have a material impact
on the Company's sales or income.

         In 1998,  the Company  commenced a program to  repurchase up to 500,000
shares of its  common  stock from time to time in the  over-the-counter  market.
During 1998,  the Company  purchased  181,500  shares of its common stock for an
aggregate  of $196,070.  The Company  anticipates  continuation  of such program
during 1999.

RESULTS OF OPERATIONS

1998 Compared with 1997
-----------------------

         Revenues for 1998 were $14,447,077, which was an increase of $4,701,661
(48.2%) from 1997 revenues of $9,745,416.  Equipment and systems sales increased
$4,667,283  (65.6%) to $11,781,789  from  $7,114,506 in 1997. This was primarily
due to sales to one major customer.

         Equipment  maintenance and service revenue for 1998 was $2,665,288,  an
increase  of $34,378  (1.3%).  The  increase in revenues  was  primarily  due to
additional systems under contract from one major retailer offset somewhat by the
loss of contracts from other customers.



                                       8
<PAGE>

         Cost of goods sold and service  expenses  increased from 45.3% of sales
in 1997 to 60.3% in 1998.  The  increase was due to a change in product mix with
more revenue being generated by lower margin hardware sales.

         Selling,  general and  administrative  expenses were $4,750,338 in 1998
compared to $4,277,352 in 1997, an increase of $472,986  (11.1%).  This increase
was  primarily  due  to  additional  commissions  of  $283,302,  resulting  from
increased sales, and increased salaries of $209,493 offset by small decreases in
other expenses.

         Net  interest  income in 1998 was $29,695  compared to $57,086 in 1997.
This was a decrease of $27,391 (48%)  primarily due to lower  interest  rates on
investments and less cash available to invest,  resulting from different payment
plans for maintenance contracts.

         The tax  provision of $437,384 was $6,422 less than the 1997  provision
of $443,806, resulting from less taxable income.

         As a result of the  foregoing,  the  Company had net income of $572,975
compared to net income of $665,705 in 1997, a decrease of $92,730 (13.9%).

1997 Compared with 1996
-----------------------

         Revenues  for 1997  increased  $1,658,942  (20.6%) to  $9,745,416  from
$8,059,474 for 1996. Equipment and systems sales increased $1,361,788 (23.7%) to
$7,114,506 from $5,752,718 in 1996, primarily due to sales to two customers.

         Equipment  maintenance  and service  revenue  during  1997  amounted to
$2,630,910,  an increase of $324,154  (14.1%)  from 1996,  primarily  due to the
increase in outstanding systems resulting from 1997 system sales.

         Cost of goods sold and service  expenses  increased from 44.4% of sales
in 1996 to 45.3% in 1997.  This  increase was primarily due to a minor change in
the mix of hardware product sold,  resulting in an overall lower margin on total
hardware product sales.

         Selling,  general and  administrative  expenses were $4,277,352 in 1997
compared to $4,004,115 in 1996,  an increase of $273,237  (6.8%).  This increase
was primarily due to additional commissions of $169,777 resulting from increased
product and systems sales, increases of $144,452 in software amortization costs,
and  increased  salary  expense  of  $255,692  resulting  from  an  increase  in
personnel.  These  increases were offset by a $307,828  decrease in nonrecurring
professional   fees  which  were  incurred  in  1996  in  connection   with  the
investigation  and  negotiation  of  a  potential   acquisition  which  did  not
materialize.

         Net interest income in 1997 was $57,086, an increase of $18,319 (47.3%)
over 1996.  This increase  resulted  from an increase in short-term  investments
arising  from  increased  cash  flow  from   maintenance   contracts  and  trade
receivables.

         The tax  provision of $443,806 was $244,546  (122.7%)  greater than the
1996 provision of $199,260, as a result of higher taxable income.

         As a result of the  foregoing,  the  Company had net income of $665,705
for 1997  compared to net income of  $317,382  in 1996,  an increase of $348,323
(109.7%).

Impact of the Year 2000 Issue
-----------------------------

Background
----------
Many currently installed computer systems and software currently record years in
a two-digit format. Such computer systems and software, if not modified, will be
unable to properly  recognize  dates  beyond the year 1999.  This  inability  to
recognize the year 2000 is commonly referred to as the "Year 2000 Issue".

Internal Systems
----------------
The Company has  reviewed all of its internal  systems and has  determined  that
substantially  all of the Company's  internal  systems are Year 2000  compliant.
Remediation is required for certain  systems.  The current cost estimate of such
remediation is approximately $50,000.

Current Products
----------------
Many of the  stand-alone  products  sold by the  Company do not contain a dating
mechanism and such systems, therefore, are deemed to be Year 2000 compliant. The
current  versions of the Company's  products  which contain  dating  mechanisms,
including the associated software, are Year 2000 compliant.



                                       9
<PAGE>

Previously Sold Hardware
------------------------
The  Company  does not  manufacture  any of the  hardware  which it sells to its
customers,  certain  of which is  standard  computer  hardware  supplied  to the
Company for resale by third party manufacturers.  The Company has identified all
hardware,  which it has sold to its  customers  during the  previous  five years
which will require  modification  to ensure Year 2000  compliance.  Although the
Company's  warranties on this older hardware have expired, the Company is in the
process of verifying  from its  third-party  manufacturers  whether the hardware
previously  supplied by such  manufacturers  is Year 2000 compliant and, if not,
whether such manufacturers intend to furnish appropriate  modifications to their
hardware in the normal  course to ensure timely Year 2000  compliance.  Although
the Company anticipates that such verification  process will be completed during
the second quarter of 1999, all of the responses  which the Company has received
to date confirm Year 2000 compliance or timely  availability of appropriate Year
2000 modifications.  However,  several manufacturers which the Company had dealt
with are no longer in  business  and  there can be no  assurance  that all other
manufacturers   will  respond  to  the  Company's   inquiries  or  will  furnish
appropriate modifications to their previously sold hardware in the normal course
to ensure timely Year 2000  compliance.  To the extent that Year 2000 compliance
requires  a  hardware  remedy  which  will not be  supplied  by the  third-party
manufacturer,  external  clock  and  dating  mechanisms  to  interface  with the
Company's  previously  sold hardware are  commercially  available at the present
time at minimal cost and can be supplied by the  Company,  in the event that the
Company is requested to do so by its customers.

Previously Furnished Third-Party Software
-----------------------------------------
Certain  of the  software  which the  Company  previously  had  supplied  to its
customers (including software  prepackaged by hardware  manufacturers with their
hardware) was developed by third-party suppliers, and the remaining software was
developed by the Company.  The Company has identified all  third-party  software
which it has supplied to its customers during the previous five years which will
require  modification  to ensure Year 2000  compliance,  and has  completed  its
verification  that  such  software  either is Year  2000  compliant  or, if not,
whether such  suppliers  intend to furnish  appropriate  modifications  to their
software in the normal course to ensure timely Year 2000 compliance. The Company
has been advised that all of such software  either is Year 2000  compliant or is
expected to be timely modified to be Year 2000 compliant,  except that Microsoft
Corporation has advised that  Microsoft(R)  Access(R)  version 1.1 and version 2
and  Microsoft  Basic  Compiler(R)  version 4.5 (and previous  versions),  which
software  previously  had been supplied by the Company with certain of its older
systems,  are not Year 2000  compliant  and will not be upgraded  by  Microsoft.
However, the Company believes that those portions of such non-compliant software
which  continue  to be  used is not  critical  to any of the  operations  of the
systems sold by the Company in which such software is used,  and that  continued
use of such  software  will not affect the  operations  of, or the results to be
obtained from, such systems.

Previously Furnished Company Developed Software
-----------------------------------------------
Several of the systems  sold by the  Company  before  1998,  such as its CP-2000
Deposit/Register  Verification  System and older  versions of its CP-3000 Retail
Cash Office Management  System,  contain software developed by the Company which
uses internal dating mechanisms that are not Year 2000 compliant.  The Company's
warranties  on these older  systems do not  require the Company to enhance  such
systems to resolve  the Year 2000 issue,  although  the  Company  believes  that
certain of its  customers  who do not desire to replace such systems  before the
Year 2000 may request that the Company supply software to make such systems Year
2000 compliant.  The Company already has designed generic software  enhancements
for all of these older  systems at a cost of  approximately  $15,000,  which has
been  charged to  expense.  However,  many of these  older  systems  have unique
features,   and  specific   modification  of  the  Company's   generic  software
enhancements  generally  would be  necessary  for  application  to any  specific
customer.  The cost to the Company of such specific software  modifications will
depend on the number of customers who request that their older Company developed
software be modified to be Year 2000  compliant.  The Company  believes  that it
will be able  to  fully  recoup  these  software  modification  costs  from  its
customers.

Key Suppliers and Customers
---------------------------
The  Company  has  commenced  a program  to assess the  possible  effects on the
Company's  operations of Year 2000 readiness by its key suppliers and customers,
and is in the process of requesting verification of such readiness.  The Company
is developing a contingency  plan in the event of  non-compliance  with the Year
2000 issue by its key  suppliers and  customers  and, as a result,  does not yet
know  whether  any  possible  noncompliance  will have a material  effect on the
Company and its future results of operations.



                                       10
<PAGE>


ITEM 7 - FINANCIAL STATEMENTS


                                 ATS MONEY SYSTEMS, INC.

<TABLE>
<CAPTION>
   Consolidated Financial Statements as of December 31, 1998 and 1997 and for each of
 the Three Years in the Period Ended December 31, 1998 and Independent Auditors' Report


                     -----------------------------------------------


                                 ATS MONEY SYSTEMS, INC.
                                    TABLE OF CONTENTS
                               --------------------------


                                                                                     Page
                                                                                     ----
<S>                                                                           <C>
INDEPENDENT AUDITORS' REPORT                                                          F-1

CONSOLIDATED FINANCIAL STATEMENTS:

         Balance Sheets                                                               F-2

         Statements of Income                                                         F-3

         Statements of Changes in Stockholders' Equity                                F-4

         Statements of Cash Flows                                                     F-5

         Notes to Financial Statements                                        F-6 to F-11
</TABLE>








                                           11
<PAGE>


INDEPENDENT AUDITORS' REPORT

ATS Money Systems, Inc.

We have  audited  the  accompanying  consolidated  balance  sheets  of ATS Money
Systems,  Inc. (the "Company") as of December 31, 1998 and 1997, and the related
consolidated  statements  of income,  changes in  stockholders'  equity and cash
flows for each of the three years in the period ended  December 31, 1998.  These
consolidated  financial  statements  are  the  responsibility  of the  Company's
management.  Our  responsibility is to express an opinion on these  consolidated
financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit 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,  such consolidated  financial  statements present fairly, in all
material  respects,  the consolidated  financial  position of ATS Money Systems,
Inc. as of December 31, 1998 and 1997,  and the results of their  operations and
their cash flows for each of the three years in the period  ended  December  31,
1998 in conformity with generally accepted accounting principles.


Parsippany, New Jersey
March 25, 1999



                                          F-1
<PAGE>


<TABLE>
<CAPTION>
ATS MONEY SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1998 AND 1997
======================================================================================================

ASSETS                                                                          1998           1997
                                                                            -----------    -----------
<S>                                                                         <C>            <C>
CURRENT ASSETS:
         Cash and cash equivalents                                          $   286,368    $   424,168
         Trade accounts receivable, less allowance for doubtful accounts
         of $140,629 in 1998, and $100,118 in 1997                            3,251,810      2,281,677
         Inventories (Note 4)                                                   598,667        562,681
         Prepaid expenses and other current assets                               63,513         83,492
                                                                            -----------    -----------
                  Total current assets                                        4,200,358      3,352,018
                                                                            -----------    -----------

PROPERTY - At cost
         Office furniture                                                        96,659         95,994
         Office machinery and equipment                                         235,158        216,267
                                                                            -----------    -----------
                  Subtotal                                                      331,817        312,261

         Less accumulated depreciation                                          199,388        148,320
                                                                            -----------    -----------

                  Property - net                                                132,429        163,941
                                                                            -----------    -----------

OTHER ASSETS:
         Software costs, less accumulated amortization of $1,039,667 in
         1998 and $788,531 in 1997 (Note 2)                                   1,685,381      1,519,991
         Deposits                                                                82,562         52,280
                                                                            -----------    -----------
                  Total other assets                                          1,767,943      1,572,271
                                                                            -----------    -----------
TOTAL                                                                       $ 6,100,730    $ 5,088,230
                                                                            ===========    ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
         Accounts payable and accrued expenses                              $ 1,629,655    $ 1,459,245
         Deferred revenue                                                       677,969        206,799
         Deferred income taxes (Note 8)                                          95,702         43,561
         Other liabilities                                                       91,358        126,804
                                                                            -----------    -----------
                  Total current liabilities                                   2,494,684      1,836,409
                                                                            -----------    -----------

LONG-TERM - Deferred credit, less accumulated amortization of $124,753
in 1998 and $96,241 in 1997 (Note 3)                                            160,414        188,926
                                                                            -----------    -----------

COMMITMENTS AND CONTINGENCIES (Note 6)
STOCKHOLDERS' EQUITY (Note 7):
         Common stock, non-cumulative, voting - $.001 par value, 25,000,000
         shares authorized, 5,941,547 and 5,922,731 shares
         issued at December 31, 1998 and 1997, respectively                       5,942          5,923
         Additional paid-in capital                                           2,192,958      2,383,033
         Accumulated earnings                                                 1,247,014        674,039
         Treasury stock - 281,500 and 100,000 shares, at par value, at
         December 31, 1998 and 1997, respectively                                  (282)          (100)
                                                                            -----------    -----------
                  Total stockholders' equity                                  3,445,632      3,062,895
                                                                            -----------    -----------

TOTAL                                                                       $ 6,100,730    $ 5,088,230
                                                                            ===========    ===========
</TABLE>

See notes to financial statements.



                                                  F-2
<PAGE>

<TABLE>
<CAPTION>
ATS MONEY SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
====================================================================================================

                                                                1998          1997          1996
                                                             -----------   -----------   -----------
<S>                                                          <C>           <C>           <C>
REVENUE:
         Equipment and systems sales                         $11,781,789   $ 7,114,506   $ 5,752,718
         Equipment maintenance and service revenue             2,665,288     2,630,910     2,306,756
                                                             -----------   -----------   -----------

              Total revenue                                   14,447,077     9,745,416     8,059,474
                                                             -----------   -----------   -----------

COSTS AND EXPENSES:
         Cost of goods sold and service expense:
              Equipment and systems                            7,610,955     3,392,435     2,633,655
              Equipment maintenance and service                1,105,120     1,023,204       943,829
              Selling, general and administrative expenses
              (Notes 5 and 12)                                 4,750,338     4,277,352     4,004,115
                                                             -----------   -----------   -----------

               Total costs and expenses                       13,466,413     8,692,991     7,581,599
                                                             -----------   -----------   -----------

INCOME FROM OPERATIONS                                           980,664     1,052,425       477,875

NET INTEREST INCOME                                               29,695        57,086        38,767
                                                             -----------   -----------   -----------

INCOME BEFORE INCOME TAX EXPENSE                               1,010,359     1,109,511       516,642

INCOME TAX EXPENSE (Note 8)                                      437,384       443,806       199,260
                                                             -----------   -----------   -----------

NET INCOME                                                   $   572,975   $   665,705   $   317,382
                                                             ===========   ===========   ===========

EARNINGS PER COMMON SHARE (Note 2):
         Basic and diluted                                   $      0.10   $      0.11   $      0.05
                                                             ===========   ===========   ===========

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING                  5,841,531     5,872,577     5,878,975
                                                             ===========   ===========   ===========
</TABLE>



See notes to financial statements.



                                                 F-3
<PAGE>



<TABLE>
<CAPTION>
ATS MONEY SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
=============================================================================================================


                                                      ADDITIONAL    ACCUMULATED                      TOTAL
                                         COMMON        PAID-IN       (DEFICIT)       TREASURY    STOCKHOLDERS'
                                          STOCK        CAPITAL       EARNINGS         STOCK         EQUITY
                                       -----------   -----------    -----------    -----------    -----------
<S>                                    <C>           <C>            <C>            <C>            <C>
BALANCE
  DECEMBER 31, 1995                    $     5,836   $ 2,319,920    $  (309,048)   $      (100)   $ 2,016,608

Issuance of common stock for stock
grants (40,000  shares) and upon the
exercise of stock options (16,117
shares)                                         56        54,477             --             --         54,533

Net income - 1996                               --            --        317,382             --        317,382
                                       -----------   -----------    -----------    -----------    -----------

BALANCE
  DECEMBER 31, 1996                          5,892     2,374,397          8,334           (100)     2,388,523

Issuance of common stock upon the
exercise of stock options (30,820
shares)                                         31         8,636             --             --          8,667

Net income - 1997                               --            --        665,705             --        665,705
                                       -----------   -----------    -----------    -----------    -----------

BALANCE
  DECEMBER 31, 1997                          5,923     2,383,033        674,039           (100)     3,062,895

Issuance of common stock upon the
exercise of stock options (18,816
shares)                                         19         5,813             --             --          5,832

Purchase of common stock (181,500
shares)                                         --      (195,888)            --           (182)      (196,070)


Net income - 1998                               --            --        572,975             --        572,975
                                       -----------   -----------    -----------    -----------    -----------

BALANCE
  DECEMBER 31, 1998                    $     5,942   $ 2,192,958    $ 1,247,014    $      (282)   $ 3,445,632
                                       ===========   ===========    ===========    ===========    ===========
</TABLE>


See notes to financial statements.



                                                      F-4
<PAGE>


<TABLE>
<CAPTION>
ATS MONEY SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
=================================================================================================================

                                                                           1998           1997           1996
                                                                        -----------    -----------    -----------
<S>                                                                     <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
         Net income                                                     $   572,975    $   665,705    $   317,382
         Adjustments to reconcile net income to net cash provided by
         operating activities:
         Depreciation and amortization                                      528,538        390,094        233,398
         Changes in current assets and liabilities:
                  Compensation expense recorded for common stock
                  issued under Director Stock Plan                               --             --         50,000
                  Trade accounts receivable - net                          (970,133)    (1,017,156)       296,105
                  Inventories                                               (35,986)         4,739        (46,424)
                  Prepaid expenses and other current assets                  19,979        136,430        (33,305)
                  Accounts payable and accrued expenses                     170,410      1,100,164       (214,786)
                  Deferred revenue                                          471,170       (115,326)        74,523
                  Deferred income taxes                                      52,141         38,829          4,732
                  Other liabilities                                         (35,446)       (35,159)         6,136
          Deposits                                                          (30,282)        (1,603)        40,192
                                                                        -----------    -----------    -----------

                  Net cash provided by operating activities                 743,366      1,166,717        727,953
                                                                        -----------    -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
         Capitalization of software development costs                      (671,372)      (984,125)      (505,296)
         Additions to property                                              (19,556)       (75,229)       (83,600)
                                                                        -----------    -----------    -----------

                  Net cash used in investing activities                    (690,928)    (1,059,354)      (588,896)
                                                                        -----------    -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
         Proceeds from the issuance of common stock                           5,832          8,667          4,533
         Purchase of common stock                                          (196,070)            --             --
                                                                        -----------    -----------    -----------

                  Net cash (used in) provided by financing activities      (190,238)         8,667          4,533
                                                                        -----------    -----------    -----------

NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS                                                                (137,800)       116,030        143,590

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                                424,168        308,138        164,548
                                                                        -----------    -----------    -----------

CASH AND CASH EQUIVALENTS, END OF YEAR                                  $   286,368    $   424,168    $   308,138
                                                                        ===========    ===========    ===========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
         Cash paid during the year for income taxes                     $   641,341    $    87,917    $   210,000
                                                                        ===========    ===========    ===========
         Interest paid                                                  $       660             --             --
                                                                        ===========    ===========    ===========
</TABLE>

See notes to financial statements.

                                                        F-5

<PAGE>
ATS MONEY SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
================================================================================

 1.   DESCRIPTION OF COMPANY OPERATIONS

      ATS  Money  Systems,  Inc.  ("ATS"),   with  a  wholly-owned   subsidiary,
      Innovative Electronics, Inc., acquired in August, 1994 (collectively,  the
      "Company"),  is engaged in the  development,  sale and service of currency
      counting  systems and  equipment  for  department  and chain  stores' cash
      offices and bank commercial vaults and of communications systems primarily
      used by chain stores.  In addition,  the Company  offers  maintenance  and
      service contracts through a national service  organization on all machines
      and equipment it sells. The Company's customers are businesses that handle
      a large number of cash,  check and credit  transactions  on a daily basis,
      such as banks, department stores and chain stores. ATS was incorporated in
      1987  under  the laws of the  State of Nevada  and is the  successor  to a
      similar business acquired by merger in 1988.

      The  principal  products  sold by the  Company  during 1998 were its newly
      developed  PowerEncode  Check Encoding System,  CP-4000 Retail Cash Office
      Management  System,  ATS CP-3000 Retail Cash Office Management System, ATS
      PowerVault Cash Management  System,  and the ATS CP-2000  Deposit/Register
      Verification System, which products accounted for approximately 78% of the
      Company's 1998 equipment and systems sales and, through IEI, StoreComm ISP
      and its  related  hardware.  The  Company  also  sells  various  types  of
      currency/document counters and dispensers.

      The  principal  market for the  Company's  products has been in the United
      States.

 2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      PRINCIPLES  OF  CONSOLIDATION  -  The  consolidated  financial  statements
      consist of the accounts of ATS Money  Systems,  Inc. and its  wholly-owned
      subsidiary. All significant intercompany transactions and account balances
      have been eliminated.

      CASH AND CASH EQUIVALENTS - Cash and cash equivalents  include investments
      with original maturities of three months or less.

      INVENTORIES - Inventories are stated at the lower of cost or market.  Cost
      is  determined  by the  first-in,  first-out  method for machine parts and
      specific identification for equipment held for sale.

      PROPERTY   AND  OTHER   ASSETS-   Depreciation   is  computed   using  the
      straight-line  method over the estimated useful lives of the assets, which
      range from five to ten years. At December 31, 1998,  there was no event or
      change in circumstance that would indicate that the carrying amount of any
      long-lived asset was not recoverable.

      CAPITALIZED  SOFTWARE COSTS - The Company  capitalizes  computer  software
      development  costs in  accordance  with the  provisions  of  Statement  of
      Financial  Accounting  Standards  No. 86. Costs  incurred to establish the
      technological  feasibility of computer  software are expensed as incurred.
      Costs  incurred  for  product  enhancements,  subsequent  to  establishing
      technological feasibility, are capitalized and stated at the lower of cost
      or net realizable  value and are  periodically  evaluated for  impairment.
      Capitalized costs are amortized using the  straight-line  method over five
      years,  which  approximates  the  estimated  remaining  useful life of the
      product.  It is possible  that the  estimate of the  economic  life of the
      products and related carrying values could be reduced in the near term due
      to competitive pressures. Amortization of computer software costs amounted
      to $505,982,  $383,470 and $305,975 for the years ended December 31, 1998,
      1997 and 1996,  respectively.  Fully amortized software costs of $254,846,
      $106,729  and  $77,700   were   written  off  in  1998,   1997  and  1996,
      respectively.

      REVENUE  RECOGNITION  -  Revenue  from  equipment  and  systems  sales  is
      recognized  upon  shipment  to  the  buyer  and  satisfaction  of  related
      obligations by the Company.  Revenue from software licensing is recognized
      on either delivery of the software if  collectibility  is probable or upon
      completion  of the  majority of the product,  which  equates to reaching a
      milestone in accordance with the contract, and any remaining insignificant
      obligations  of the  Company  are  accounted  for by  deferring a pro rata
      portion of revenue and  recognizing it either  ratably as the  obligations
      are fulfilled or on completion  of  performance  or by recording a current
      year  expense for the  remaining  costs  associated  with  completing  the
      project.

      EQUIPMENT  MAINTENANCE  AND SERVICE  REVENUE - Equipment  maintenance  and
      service  revenue is  recognized  as earned over the term of the  contract,
      which is  generally  a maximum  of one year in  length.  Deferred  revenue
      represents the unearned portion of equipment maintenance and service fees.

                                      F-6
<PAGE>

      USE OF ESTIMATES - The Company's  financial  statements include the use of
      estimates and assumptions,  which have been developed by management, based
      on available facts and information. Actual results could differ from those
      estimates.

      EARNINGS PER COMMON SHARE - Basic earnings per common share is computed by
      dividing income  available to common  stockholders by the weighted average
      number of common shares  outstanding during the period. The computation of
      diluted earnings per share is similar to the computation of basic earnings
      per share except that the  denominator  is increased to include the number
      of  additional  common  shares  that  would have been  outstanding  if the
      dilutive  potential  common  shares had been  issued.  For the years ended
      December  31,  1998,  1997 and 1996 the  dilutive  effect on earnings  per
      common share was insignificant.

      INCOME  TAXES - The  Company  files a  consolidated  Federal  tax  return.
      Deferred income taxes are provided for temporary  differences  between the
      carrying  amounts  of  assets  and  liabilities  for  financial  reporting
      purposes and the amounts used for income tax purposes.

      RECLASSIFICATIONS  - Certain prior year amounts have been  reclassified in
      order to conform with the 1998 presentation.

3.    ACQUISITION

      In 1994, the Company acquired  Innovative  Electronics,  Inc., which is in
      the business of  marketing  hardware  and  software  products  designed to
      permit the exchange of pricing, product and other data among stores within
      a chain.  The  acquisition  was  accounted  for by the purchase  method of
      accounting.  The purchase  price was allocated to the assets  acquired and
      liabilities assumed based on the fair values at the date of acquisition.

      The excess of the  estimated  fair values of the assets  acquired over the
      purchase price ($285,167) was recorded as a deferred credit,  and is being
      amortized on a straight-line basis over ten (10) years.

4.    INVENTORIES

      Inventories  consist of  equipment  held for sale and  machine  parts,  as
      follows:

                                              1998         1997
                                           ---------    ---------

                Equipment held for sale    $ 582,489    $ 529,658
                Parts and raw materials       70,135       73,652
                Reserve for obsolescence     (53,957)     (40,629)
                                           ---------    ---------

                                           $ 598,667    $ 562,681
                                           =========    =========


 5.   RELATED PARTY TRANSACTIONS

      During 1996,  the Company  engaged  three  directors as  consultants  on a
      potential acquisition,  which did not materialize. The directors were paid
      fees and  expenses  of  $326,  $1,013  and  $11,879,  respectively.  Other
      expenses  for  legal,  accounting  and  consulting  services  (not paid to
      related parties) in connection with this potential acquisition  aggregated
      $294,610.

      During 1997, the Company paid a director  consulting  fees and expenses of
      $11,400 and $3,392, respectively.

      At December 31, 1998 and 1997, all directors and executive officers,  as a
      group,  collectively  owned 40% and 41%,  respectively,  of the  Company's
      common stock.



                                      F-7
<PAGE>


 6.   COMMITMENTS AND CONTINGENCIES

      At December 31, 1998,  the Company was  committed  under  non-cancellable,
      operating  leases  for office  space,  automobiles  and office  equipment,
      expiring at various dates through February 2004,  requiring minimum annual
      rental payments as follows:


                                 1999      $  371,750
                                 2000         291,660
                                 2001         251,610
                                 2002         249,612
                                 2003         249,612
                                 2004          41,602
                                           ----------

                                           $1,445,846
                                           ==========


      Rental expense under such leases totaled $346,901,  $340,827, and $343,434
      for the years ended December 31, 1998, 1997 and 1996, respectively.

 7.   STOCKHOLDERS' EQUITY

      COMMON STOCK  INCENTIVE PLAN - In 1993, the Company adopted a common stock
      incentive plan (the "Plan"),  which, as amended,  authorizes the issuance,
      within ten years, of options covering up to 480,000 shares of common stock
      to certain  employees and other  individuals of importance to the Company.
      The Plan is intended  to provide  incentive  to  continued  employment  of
      certain  employees  and other  individuals  by enabling  them to acquire a
      proprietary interest in the Company. Options granted under the Plan may be
      either  "incentive  stock  options"  or  "non-qualified   stock  options."
      Incentive stock options, granted only to certain employees of the Company,
      expire  within ten years  (five  years for a 10%  beneficial  owner of the
      Company's  securities) from the date granted and are exercisable from time
      to time in accordance  with the terms of such options.  The exercise price
      of an  incentive  stock  option  must be at least equal to the fair market
      value of the common stock on the date of grant (110% for a 10%  beneficial
      owner of the  Company's  securities).  Non-qualified  stock options can be
      granted to certain  employees of the Company and advisors and  consultants
      to the Company. Such stock options are exercisable on or after the date of
      grant and the  exercise  price is not limited and may be below fair market
      value.

      DIRECTOR STOCK PLAN - In 1995, the Company adopted the 1995 Director Stock
      Plan pursuant to which, as amended, the Company's non-employee  directors,
      upon first being  elected to the Board,  are granted  10,000 shares of the
      Company's  common stock, and thereafter,  on each reelection,  are granted
      non-qualified  stock  options to purchase  10,000  shares of the Company's
      common stock with an exercise price equal to the then fair market value of
      such shares. In 1995, the non-employee directors were granted an aggregate
      of 40,000 shares of common stock under this plan, all of which were issued
      during  1996.   In  1997,   the   non-employee   directors   were  granted
      non-qualified  options under this plan to purchase 30,000 shares of common
      stock at an exercise price of $.8281 per share. In 1998, the  non-employee
      directors were granted  non-qualified  options under this plan to purchase
      30,000 shares of common stock at an exercise price of $.9531 per share.

      The estimated fair value of options granted during 1998, 1997 and 1996 was
      $0.27,  $0.56 and $0.08  per  share,  respectively.  The  Company  applies
      Accounting Principles Board Opinion No. 25 and related  interpretations in
      accounting for stock option plans.  Accordingly,  no compensation cost has
      been recognized for its stock option plan. Had  compensation  cost for the
      Company's stock option plan been determined based on the fair value at the
      grant dates for awards  under those  plans  consistent  with the method of
      FASB  Statement  123, the  Company's net income and earnings per share for
      the years ended  December 31, 1998,  1997 and 1996 would have been reduced
      to the pro forma amounts indicated below:

      Net income to common shareholders:


                                 1998             1997           1996

          As reported          $572,975         $665,705       $317,382

          Pro forma            $564,697         $629,725       $313,360



                                      F-8
<PAGE>

      Net income per common share:


                            1998          1997             1996
          As reported       $.10          $0.11            $0.05

          Pro forma         $.10          $0.11            $0.05


      The fair values of options  granted under the Company's  stock option plan
      during 1998,  1997 and 1996 were  estimated on the date of grant using the
      Black-Scholes  option-pricing  model with the  following  weighted-average
      assumptions  used:  No dividend  yield for 1998,  1997 and 1996,  expected
      volatility of 53%, 18% and 20% for 1998, 1997 and 1996, respectively,  and
      expected lives of 9.5 years for 1998 and 9 years for 1997 and 1996.

      A summary of the details of stock options granted and outstanding balances
      are presented below:

<TABLE>
<CAPTION>
                                                                                      OPTIONS OUTSTANDING
                                                                                          DECEMBER 31,
                                                                                -------------------------------
                              OPTION
                 GRANT         PRICE           EXERCISED        CANCELED           1998                  1997
                -------       -------          ---------        --------         ---------             --------
<S>  <C>        <C>           <C>               <C>              <C>             <C>                  <C>
     1993
     ----
                140,869        .28125            66,761            4,184           69,924(1)            69,924
                 18,816           .31                                                  --               18,816
                                                 18,816                                --                   --
                 15,315        .28125                                              15,315(1)            15,315

     1994
     ----
                 15,000         1.375                                                  --               15,000
                                                                   5,000           10,000(1)                --


     1996
     ----
                 37,626       1.03125                              7,721                                29,905
                                                                   2,658           27,247(2)                --
                  8,375        1.1344                                               8,375(2)             8,375

     1997
     ----
                 34,000           .71                              6,000               --               28,000
                                                                   2,500           25,500(3)                --
                 30,000         .8281                                              30,000(3)            30,000

     1998
     ----
                 30,000         .9531                                              30,000(4)                --
                 24,700           .92                                500           24,200(4)                --
                                              ---------       ----------        ---------             --------

                                                 85,577           28,563          240,561              215,335
                                              =========       ==========        =========             ========
</TABLE>



(1) Fully exercisable as of December 31, 1998.

(2) 19,395 of 27,247 and 5,578 of 8,375 exercisable as of December 31, 1998.

(3) 9,158 of 25,500 and 9,999 of 30,000 exercisable as of December 31, 1998.

(4) Non exercisable as of December 31, 1998.



                                      F-9
<PAGE>

      COMMON STOCK  WARRANTS - In connection  with services to be rendered by an
      investment  banker,  as of April  7,  1997,  the  Company  granted  to the
      investment  banker  warrants to  purchase  80,000  shares of common  stock
      exercisable at $.75 per share; granted to the investment banker on April 8
      1998,  warrants to purchase an  additional  80,000  shares of common stock
      exercisable  at $1.25 per share and,  unless the  agreement is canceled by
      the Company before April 8, 1999, agreed to grant to the investment banker
      on such date  warrants to purchase an  additional  80,000 shares of common
      stock  exercisable at $1.25 per share.  All of the warrants will expire on
      April 7, 2001,  unless exercised prior thereto.  Based upon the fair value
      of the warrants at the grant dates,  no expense was recognized in 1998 and
      1997.

8.    INCOME TAXES

      Deferred income taxes reflect the net tax effect of temporary  differences
      between  the  carrying  amounts of assets and  liabilities  for  financial
      reporting purposes and the amounts used for income tax purposes.

      The  significant  items  comprising the Company's net deferred taxes as of
      December 31, 1998 and 1997 are as follows:

                                                          1998         1997
                                                       ---------    ---------
         Deferred tax assets:
                  Provision for bad debts              $  56,252    $  40,047
                  Inventory write-downs                   21,582       16,252
                  Deferred credits - acquisition          64,166       75,570
                                                       ---------    ---------
         
                      Total deferred tax assets          142,000      131,869
                                                       ---------    ---------
         
         Deferred tax liabilities:
                  Depreciation                            22,421       22,055
                  Software amortization                  215,281      153,375
                                                       ---------    ---------
         
                      Total deferred tax liabilities     237,702      175,430
                                                       ---------    ---------
         
                  Net deferred tax liability           $ (95,702)   $ (43,561)
                                                       ---------    ---------

      The income tax provision for the years ended  December 31, 1998,  1997 and
      1996 consists of the following components:

                                     1998       1997       1996
                                   --------   --------   --------
         Current:
                  Federal          $244,216   $314,976   $123,850
                  State             141,027     90,001     70,678
                                   --------   --------   --------
         
                  Total current     385,243    404,977    194,528
                                   --------   --------   --------
         
         Deferred:
                  Federal            44,319     33,005      4,022
                  State               7,822      5,824        710
                                   --------   --------   --------
         
                  Total deferred     52,141     38,829      4,732
                                   --------   --------   --------
         
         Income tax expense        $437,384   $443,806   $199,260
                                   ========   ========   ========

      A  reconciliation  of  the  Company's  statutory  rate  to  the  Company's
      effective rate is as follows:

                                               1998       1997       1996
                                             -------      -----      -----
         
         Expected statutory rate                34.0%      34.0%      34.0%
         State income tax (composite rate)       9.7        5.7        4.7
         Other                                  (0.4)       0.3         --
                                             -------      -----      -----
                                                43.3%      40.0%      38.7%
                                             =======      =====      =====



                                      F-10
<PAGE>

 9.   MAJOR CUSTOMERS

      Sales to each of the Company's three major customers, which are subject to
      change annually,  as a percentage of consolidated  revenue,  for the years
      ended December 31 approximated:


                               1998         1997        1996
                               ----         ----        ----
         Major Customer 1       46%          21%         19%
         Major Customer 2       17           15          15
         Major Customer 3        5           13           9

      During  1998,  sales to Target  Stores  and  Mervyns,  both  divisions  of
      Dayton-Hudson   Corporation,   and   sales   directly   to   Dayton-Hudson
      Corporation, accounted for 46% of total sales.

      This was the  result of the  purchase  of an  enterprise  license  for the
      CP-4000  Retail Cash Office  Management  System,  a new  product,  and the
      related hardware.

      While this customer has a four year maintenance agreement, future revenues
      from software and hardware should not be as significant in 1999.

10.   RETIREMENT PLAN

      The Company has a defined contribution plan covering  substantially all of
      its employees. Company contributions to the plan, which are discretionary,
      are made from its profits.  Contributions  are based upon a percentage  of
      eligible  employees'  salaries  ranging from -0-% to a maximum of 15%. The
      contribution for 1997 was $27,495.  There were no  contributions  for 1998
      and 1996.

      Effective  January 1, 1998, the Company adopted  provisions under the plan
      to provide a 401k  feature.  Eligibility  occurs after one year of service
      (with   1,000   hours  of  service)   and   attainment   of  age  21.  The
      characteristics  of the 401k plan are that the  Company  will match 25% of
      the  participant's  contribution  up  to  6%  of  compensation.   Employee
      contributions,  which are voluntary,  can range up to 20% of compensation.
      Vesting of the  Company's  matching  contribution,  at the rate of 20% per
      annum  begins  after the second  year of  service  until year six when the
      employee  becomes  fully  vested.  Forfeitures  will  reduce  the  Company
      matching contributions. The Company's contribution for 1998 was $24,927.

11.   LINE OF CREDIT

      The  Company has a bank line of credit of  $750,000  with  interest at the
      bank's  base rate plus 0.5%.  All  advances  under this line of credit are
      required  to be secured by a lien on  substantially  all of the  Company's
      assets. The Company had no borrowings outstanding at December 31, 1998 and
      December 31, 1997.

12.   SETTLEMENT AGREEMENT

      On October 25,  1996,  the Company,  Michael M. Smith,  and counsel to Mr.
      Smith,  which law firm also had acted as securities counsel to the Company
      until its termination by the Company  effective May 31, 1996  ("Counsel"),
      entered  into an  agreement  to settle all  disputes  relating  to amounts
      claimed  by Mr.  Smith  and  Counsel  to be owed  to them by the  Company.
      Pursuant  to  such  agreements,   the  Company  paid  Counsel  $50,000  in
      satisfaction  of all  outstanding  legal bills  rendered by Counsel to the
      Company,  and  reimbursed  Mr. Smith  $13,034 for  out-of-pocket  expenses
      incurred by him in connection with his Company duties.

                                     ******



                                      F-11


<PAGE>

ITEM  8 -  CHANGE  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE

         Deloitte & Touche LLP, independent  accountants,  currently is, and for
more  than  the  Company's  last  two  fiscal  years  has  been,  the  Company's
independent  auditors.  Since the beginning of such two fiscal year period,  (i)
Deloitte & Touche LLP has not expressed  reliance,  in its audit report,  on the
audit  services  of any  other  accounting  firm,  and (ii)  there  have been no
reported  disagreements  between the  Company  and  Deloitte & Touche LLP on any
matter of accounting principles or practices,  financial statement disclosure or
auditing scope or procedure.


PART III

         Except for  information  required by Item 13  (Exhibits  and Reports on
Form 8-K), the  information  called for by Part III of Form 10-KSB (Items 9, 10,
11 and 12) is  incorporated  by reference  herein from the Company's  definitive
proxy statement to be filed with the Securities and Exchange  Commission  within
120 days after the close of its fiscal year ended December 31, 1998.

ITEM 13 - EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits.  The  following is a listing of Exhibits  required by Item 601 of
     Regulation S-B. Except for those exhibits indicated by an asterisk * (which
     exhibits  are filed  herewith),  the  remaining  exhibits  listed below are
     incorporated  by  the  reference  to an  exhibit  previously  filed  by the
     Company.

     3.  Articles of incorporation and by-laws.

     (a)  Articles of Incorporation of ATS Money Systems,  Inc.  (formerly known
          as More Creative Mergers,  Inc.), as filed with the Secretary of State
          of the State of Nevada on August  28,  1987 -  incorporated  herein by
          reference  to Exhibit 8 to  Registration  Statement  on Form S-18 (No.
          33-19657-NY).

     (b)  Agreement  of Merger of ATS Money  Systems,  Inc.  into More  Creative
          Mergers,  Inc.,  dated July 25, 1988,  as filed with the  Secretary of
          State of the  State of  Nevada on  September  6,  1988 -  incorporated
          herein by reference to Exhibit 12 to  Post-Effective  Amendment  No. 1
          dated September 26, 1988 to  Registration  Statement on Form S-18 (No.
          33-19657-NY).

     (c)  By-Laws of ATS Money Systems,  Inc. - incorporated herein by reference
          to Exhibit 9 to Registration Statement on Form S-18 (No. 33-19657-NY).

     (4)  Instruments  defining  the  rights  of  security  holders,   including
          indentures.

     (a)  Form  of  Common  Stock  certificate  of ATS  Money  Systems,  Inc.  -
          incorporated herein by reference to Exhibit 5 to Amendment No. 1 dated
          March  11,  1988  to   Registration   Statement   on  Form  S-18  (No.
          33-19657-NY).

     (10) Material contracts.

     (a) (i) Lease, dated November 30, 1989, between ATS Money Systems, Inc. and
     Rockwood  Four  Limited  Partnership  incorporated  herein by  reference to
     Exhibit  10(a) to the Annual  Report on Form  10-KSB of ATS Money  Systems,
     Inc. for the fiscal year ended December 31, 1989.

         (ii)  Amendment  of Lease,  dated as of December  1, 1992,  between ATS
               Money Systems, Inc. and Rockwood Limited Partnership incorporated
               herein by reference to Exhibit  10(a)(ii) to the Annual Report on
               Form 10-KSB of ATS Money Systems,  Inc. for the fiscal year ended
               December 31, 1992.

         (iii) Amendment of Lease,  dated as of September 15, 1995,  between ATS
               Money  Systems,   Inc.  and  Rockwood  Four  Limited  Partnership
               incorporated  herein by  reference to Exhibit  10(a)(iii)  to the
               Annual Report on Form 10-KSB of ATS Money  Systems,  Inc. for the
               fiscal year ended December 31, 1995.

         *(iv) Amendment of Lease,  dated as of, June 26, 1998 between ATS Money
               Systems, Inc. and Rockwood Property Holding, LLC.



                                       26
<PAGE>

         (b) (i) Profit Sharing Plan of ATS Money Systems,  Inc.,  dated January
1, 1987 -  incorporated  herein by  reference  to Exhibit  19 to  Post-Effective
Amendment No. 1 dated September 26, 1988 to Registration  Statement on Form S-18
(No. 33-19657-NY).

            *(ii) Amendment to Profit Sharing Plan dated January 1, 1998.

         (c) Form of  Salesman  Employment  Agreement -  incorporated  herein by
reference  to  Exhibit  10(j) to the Annual  Report on Form  10-KSB of ATS Money
Systems, Inc. for the fiscal year ended December 31, 1989.

         (d) Form of Maintenance Agreement - incorporated herein by reference to
Exhibit 10(k) to the Annual Report on Form 10-KSB of ATS Money Systems, Inc. for
the fiscal year ended December 31, 1989.

         (e) Common Stock  Incentive Plan - incorporated  herein by reference to
Exhibit 10(l) to the Annual Report on Form 10-KSB of ATS Money Systems, Inc. for
the fiscal year ended December 31, 1992.

         (f)  Purchase  Agreement,  dated  August 24,  1994,  between  ATS Money
Systems,  Inc.,  IEI  Acquisition  Corp.,  Dynatech  Corporation  and Innovative
Electronics,  Inc. -  incorporated  herein by reference to Exhibit  10(j) to the
Annual  Report on Form  10-KSB of ATS Money  Systems,  Inc.  for the fiscal year
ended December 31, 1994.

         (g) ATS Money  Systems,  Inc. 1995 Director  Stock Plan -  incorporated
herein by reference to Exhibit  10(i) to the Annual Report on Form 10-KSB of ATS
Money Systems, Inc. for the fiscal year ended December 31, 1996.

         (h) Employment Agreement,  dated May 23, 1996, between Gerard F. Murphy
and ATS Money Systems,  Inc. - incorporated herein by reference to Exhibit 10(j)
to the Annual  Report on Form 10-KSB of ATS Money  Systems,  Inc. for the fiscal
year ended December 31, 1996.

         (i)  Technical  Support  Agreement,  dated  January 30,  1996,  between
Technology Service Solutions and ATS Money Systems,  Inc. - incorporated  herein
by reference to Exhibit  10(k) to the Annual  Report on Form 10-KSB of ATS Money
Systems, Inc. for the fiscal year ended December 31, 1996.

         (j) Agreement for Software License,  dated April 15, 1997,  between ATS
Money  Systems,  Inc. and Dayton  Hudson  Corporation -  incorporated  herein by
reference to Exhibit 10(a) to the Quarterly Report on Form 10-QSB,  of ATS Money
Systems, Inc., for the quarter ended June 30, 1997.

         (k) Agreement, dated April 7, 1997, between ATS Money Systems, Inc. and
M.H. Meyerson & Co., Inc - incorporated  herein by reference to Exhibit 10(b) to
the Quarterly Report on Form 10-QSB, of ATS Money Systems, Inc., for the quarter
ended June 30, 1997.

         (l) Agreement, dated September 1, 1997, between ATS Money Systems, Inc.
and Vanstar  Corporation - incorporated  herein by reference to Exhibit 10(a) to
the Quarterly Report on Form 10-QSB, of ATS Money Systems, Inc., for the quarter
ended September 30, 1997.

         (m)  Agreement,  dated,  February 24, 1998,  between ATS Money Systems,
Inc. and Alpha Microsystems - incorporated  herein by reference to Exhibit 10(a)
to the Quarterly Report on Form 10-QSB for the quarter ended March 31, 1998.

         *(n) Agreement,  dated August 5, 1998, between ATS Money Systems,  Inc.
and Bollinger, Wells, Lett & Co. Inc.

         *(o)  Agreement,  dated as of  December  10,  1998,  between  ATS Money
Systems, Inc. and Volumatic Ltd.

         11. Statement re computation of per share earnings - Not required since
such computation can be clearly  determined from the material  contained in this
report on Form 10-KSB.

         13.  Annual report to security  holders for the last fiscal year,  Form
10-Q or 10-QSB or  quarterly  report to security  holders,  if  incorporated  by
reference in the filing - Not applicable.

         21. Subsidiaries of the small business issuer:  Innovative Electronics,
Inc. - incorporated under the laws of the State of Florida.

         *23. Consent of independent accountants.



                                       27
<PAGE>

         *27. Financial Data Schedule.

         (b) No reports on Form 8-K were  filed with the  Commission  during the
fourth quarter of the fiscal year ended December 31, 1998.











                                       28
<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.



Dated:        March 30, 1999              ATS Money Systems, Inc.
         -----------------------

                                          By: /s/ GERARD F. MURPHY
                                              -------------------------------
                                              Gerard F. Murphy, President and
                                              Chief 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:


<TABLE>
<S>          <C>                              <C>
                                              /s/ GERARD F. MURPHY
Dated:       March 30, 1999                   --------------------------------------------------- 
             -------------------------            GERARD F. MURPHY                                
                                                  Gerard F. Murphy
                                                  Director

                                              /s/ FRED DEN
Dated:       March 30, 1999                   --------------------------------------------------- 
             -------------------------            FRED DEN                                        
                                                  Fred Den
                                                  Director

                                              /s/ A. PAUL COX
Dated:       March 30, 1999                   --------------------------------------------------- 
             -------------------------            A. PAUL COX                                     
                                                  A. Paul Cox
                                                  Director

                                              /s/ THOMAS J. CAREY
Dated:       March 30, 1999                   --------------------------------------------------- 
             -------------------------            THOMAS J. CAREY                                 
                                                  Thomas J. Carey
                                                  Director

                                              /s/ JOSEPH M. BURKE
Dated:       March 30, 1999                   --------------------------------------------------- 
             -------------------------            JOSEPH M. BURKE                                 
                                                  Joseph M. Burke
                                                  Vice President - Finance
                                                 (Principal Accounting and Financial  Officer)

                                       29
</TABLE>