UNITED STATES
                       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,  2004
                                       OR
/ /  TRANSITION  REPORT  PURSUANT  TO  SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE  ACT  OF  1934
     For  the  transition  period  from ___________ to ___________

                                     0-17874
                            (Commission file number)

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

                               GLOBAL AXCESS CORP.
                 (Name of Small Business Issuer in Its Charter)

                        NEVADA                             88-0199674
          (State or other jurisdiction of               (I.R.S. Employer
           incorporation or organization)               Identification No.)

               224 PONTE VEDRA PARK DRIVE
              PONTE VEDRA BEACH, FLORIDA                     32082
        (Address of principal executive offices)           (Zip Code)

                                 (904)-280-3950
                (Issuer's Telephone Number, Including Area Code)

Securities  registered  pursuant  to  Section  12(b)  of  the  Act:  None
Securities  registered  pursuant  to  Section  12(g)  of  the  Act: Common Stock

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

     Check whether the Issuer: (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the Issuer 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 pursuant to Item 405
of Regulation S-B is not contained herein, and will not be contained, to the
best of the Issuer's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB. [X]

Issuer's Revenues for the fiscal year 2004 were: $13,907,950.

The aggregate market value of the Common Stock held by non-affiliates of the
Issuer as of March 15, 2005 was $29,884,887.

As of March 15, 2005, the Issuer had 88,485,469 shares outstanding of the Common
Stock ($0.001 par value) and no shares outstanding of the Preferred Stock
($0.001 par value).


<PAGE>

<TABLE>
<CAPTION>

                                 TABLE OF CONTENTS                                 Page No.

PART  I
<S>     <C>                                                                             <C>
  Item  1.   Description of Business                                                   3
  Item  2.   Description of Properties                                                12
  Item  3.   Legal Proceedings                                                        13
  Item  4.   Submission of Matters to a Vote of Security Holders                      13

PART  II

  Item  5.   Market for Common Equity and Related Stockholder Matters                 14
  Item  6.   Management's Discussion and Analysis or Plan of Operation                16
  Item  7.   Financial Statements                                                     32
  Item  8.   Changes in and Disagreements With Accountants on Accounting
             and Financial Disclosure                                                 32

PART  III

  Item  9.   Directors  and  Executive Officers, Promoters and Control
             Persons; Compliance With Section 16(a) of the Exchange Act               33
  Item 10.   Executive Compensation                                                   37
  Item 11    Security Ownership of Certain Beneficial Owners and Management
                   and Related Stockholder Matters                                    40
  Item 12.   Certain  Relationships and Related Transactions                          41
  Item 13.   Exhibits and Reports on Form 8-K                                         42
  Item 14.   Principal Accountants Fees and Services                                  43

SIGNATURES                                                                            44

FINANCIAL  STATEMENTS                                                                F-1

FINANCIAL  STATEMENT  SCHEDULE

EXHIBITS
</TABLE>


Forward-Looking Statements

In addition to historical information, this Annual Report on Form 10-KSB
contains forward-looking statements that involve risks and uncertainties that
could cause actual results to differ materially. Factors that might cause or
contribute to such differences include, but are not limited to, those discussed
in the section entitled "Management's Discussion and Analysis of Financial
Condition and Results of Operations-Factors That May Affect Future Results of
Operations." You should carefully review the risks described in other documents
we file from time to time with the Securities and Exchange Commission, including
the Quarterly Reports on Form 10-QSB to be filed in 2004. When used in this
report, the words "expects," "anticipates," "intends," "plans," "believes,"
"seeks," "targets," "estimates," and similar expressions are generally intended
to identify forward-looking statements. You should not place undue reliance on
the forward-looking statements, which speak only as of the date of this Annual
Report on Form 10-KSB. We undertake no obligation to publicly release any
revisions to the forward-looking statements or reflect events or circumstances
after the date of this document.

Estimates of future financial results are inherently unreliable.

From time to time, representatives of Global Axcess Corp (the "Company") may
make public predictions or forecasts regarding the Company's future results,
including estimates regarding future revenues, expense levels, earnings or
earnings from operations. Any forecast regarding the Company's future

                                       2
<PAGE>
performance reflects various assumptions. These assumptions are subject to
significant uncertainties, and, as a matter of course, many of them will prove
to be incorrect. Further, the achievement of any forecast depends on numerous
factors (including those described in this discussion), many of which are beyond
the Company's control. As a result, there can be no assurance that the Company's
performance will be consistent with any management forecasts or that the
variation from such forecasts will not be material and adverse. Investors are
cautioned not to base their entire analysis of the Company's business and
prospects upon isolated predictions, but instead are encouraged to utilize the
entire available mix of historical and forward-looking information made
available by the Company, and other information affecting the Company and its
products, when evaluating the Company's prospective results of operations.

In addition, representatives of the Company may occasionally comment publicly on
the perceived reasonableness of published reports by independent analysts
regarding the Company's projected future performance. Such comments should not
be interpreted as an endorsement or adoption of any given estimate or range of
estimates or the assumptions and methodologies upon which such estimates are
based. Undue reliance should not be placed on any comments regarding the
conformity, or lack thereof, of any independent estimates with the Company's own
present expectations regarding its future results of operations. The
methodologies employed by the Company in arriving at its own internal
projections and the approaches taken by independent analysts in making their
estimates are likely different in many significant respects. Although the
Company may presently perceive a given estimate to be reasonable, changes in the
Company's business, market conditions or the general economic climate may have
varying effects on the results obtained through the use of differing analyses
and assumptions. The Company expressly disclaims any continuing responsibility
to advise analysts or the public markets of its view regarding the current
accuracy of the published estimates of outside analysts. Persons relying on such
estimates should pursue their own independent investigation and analysis of
their accuracy and the reasonableness of the assumptions on which they are
based.


                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

History

Headquartered in Ponte Vedra Beach, Florida, Global Axcess Corp was
re-engineered in 2001 by principals with extensive and strong backgrounds in
network-based electronic commerce and financial transaction processing, with a
mission to emerge as one of the nation's leading network-based electronic
commerce and financial transaction processing companies. Global Axcess Corp.
(formerly known as Netholdings.com, Inc.), through its wholly owned subsidiaries
(Global Axcess Corp. and its subsidiaries are hereinafter collectively referred
to as the "Company"), provides services through its automated teller machine
("ATM") network and also provides financial transaction processing. The Company
plans to expand through the strategic acquisition of profitable ATM portfolios
and other related businesses, internal growth and deployment of enhanced
non-banking ATM consumer products worldwide. The Company presently does not have
definitive acquisition plans.

  The Company was initially incorporated in Nevada on May 2, 1984 under the name
of Supermarket Video, Inc. The Company underwent several name changes until
1999, when it changed its name to Netholdings.com, Inc. In June 2001, the
Company changed its name to Global Axcess Corp.


Recent Developments

On October 12, 2003, the Company commenced operations of Axcess Technology
Corporation, a wholly-owned subsidiary of the Company, to develop software
products to be sold for ATM management and transaction processing. In addition,

                                       3
<PAGE>
the Company added an office in South Africa to help with the development of the
software products.

On October 24, 2003, the Company started Electronic Payment & Transfer, Corp. to
continue the development of card based products initiated under the Company's
subsidiaries. These products include payroll cards, debit cards and management
of these cards for third parties. On October 8, 2003 the Company purchased a
contract to manage various aspects of a national community program assisting
housing authorities and their residents with registration, technology and other
benefits.

On February 6, 2004, the Company acquired ATM processing merchant agreements to
service 900 automated teller machines from Progressive Ventures,
Inc.("Progressive"), a Texas corporation. The Company also acquired
Progressive's trademark.

In September 2004, the Company completed its second acquisition of the year. In
the purchase the Company received the rights to 111 ATM contract locations
through out the northeast region.

Also in September 2004, the third acquisition was completed and the Company
acquired all of the assets of the ATM Networks, Inc., which brought the Company
an additional 745 ATM contract locations.


Business Description

As of December 31, 2004, the Company currently owns, manages and operates over
3,500 ATMs in its national network spanning 39 states and provides proprietary
ATM branding and processing for 66 financial institutions with 583 branded sites
nationwide. Under its processing subsidiary the Company performs over 850,000
financial transactions per month.

Nationwide Money Services, Inc.

Nationwide Money Services, Inc. is a wholly owned subsidiary of the Company and
is engaged in the business of operating a network of ATMs. The ATMs provide
holders of debit and credit cards access to cash, account information and other
services at convenient locations and times chosen by the cardholder. Debit and
credit cards are principally issued by banks and credit card companies.

To promote usage of ATMs in our network, we have relationships with national and
regional card organizations (also referred to as networks) which enable the
holder of a card issued by one member of the organization to use an ATM operated
by another member of the organization to process a transaction. These
relationships are provided through EFT Integration, a wholly owned subsidiary of
The Company. EFT Integration has a relationship with the following
card organizations or networks:

     o    EFT Integration (EFTI) has a direct relationship with STAR, a major
          regional network;
     o    EFTI also processes through CU24 a national credit union network;
     o    through third parties EFT Integration has relationships with Cirrus
          and Pulse, the two principal national card organizations; and
     o    other card organizations, all of whose members are banks and ATM
          network operators and or sponsored by member banks.

We also have relationships with major credit card issuers such as Visa,
MasterCard and Discover, which enable the holder of a credit card to use ATMs in
our network to process a transaction.

EFT Integration

EFT Integration (EFTI)operates a central processing center located in its
headquarters in Ponte Vedra Beach, Florida. The processing center is connected
to each ATM in its network through dedicated, dial-up communications circuits.
The operation of our processing center is critical to the successful operation
of the ATM network.

At the processing center, EFT Integration maintains a "switch" which links in a
compatible manner ATMs in our network, the processing center and similar

                                       4
<PAGE>
processing or transaction authorization centers operated by card issuers and
card organizations. The switch makes possible the electronic exchange of
information necessary to conduct transactions at ATMs in our network. The switch
consists of a Dell computer system, telecommunications equipment, and Postilion
software(purchased from Mosaic Software) and proprietary software developed by
its subsidiary Axcess Technology Corp., for the operation of our network. The
system has undergone rigorous testing by VISA and MasterCard and has
successfully passed a VISA CISP audit and is currently VISA CISP, VISA Canada
AIS, MasterCard SDP, American Express DSOP and Discover DISC compliant for
secured transaction processing. EFT Integration has also passed an audit of
Phase I of the SAS 70 Controls and Procedures.

Management believes the computer system has sufficient capacity to meet any
growth in transaction volume achieved over the next three years and to permit
the development of new services being considered by us.

Although the switch translates between computers and makes routing decisions, it
does not execute the transactions. Transactions originated at ATMs in our
network are routed by the switch operated in our processing center to the card
organization and card issuer that processes the account records for the
particular cardholder's financial institution. In turn, the switch relays reply
information and messages from the computer center to the originating terminal.

To protect against power fluctuations or short-term interruptions, the
processing center has uninterruptible power supply systems with battery and
generator back-up. The processing center's data back-up systems would prevent
loss of transaction records due to power failure and permit the orderly shutdown
of the switch in an emergency. To provide continued operation in the event of a
catastrophic failure, all incoming ATM messages would be re-routed to a third
party processor. EFT Integration has an extensive disaster recovery plan for
immediate handling of our ATM transactions, in the case of a disaster scenario.
The plan entails processing, by secured third parties, and use of data
facilities in two offsite locations. The plan has been successfully tested.

Revenue Sources

Transaction Fees. Our revenues are principally derived from two types of fees,
which we charge for processing transactions on our ATM network. We receive an
interchange fee from the issuer of the credit or debit card for processing a
transaction when a cardholder uses an ATM in our network. In addition, in most
cases, we receive a surcharge fee from the cardholder when the cardholder makes
a cash withdrawal from an ATM in our network. See Item 6, "MANAGEMENT'S
DISCUSSION AND ANALYSIS OR PLAN OF OPERATION - Overview."

ATM Network Management Services. In addition to revenues derived from
interchange and surcharge fees, we also derive revenues from providing ATM
network management services to banks and other third party owners of ATMs
included in our ATM network. These services include 24 hour transaction
processing, monitoring and notification of ATM status and cash condition,
notification of ATM service interruptions, in some cases, dispatch of field
service personnel for necessary service calls and cash settlement and reporting
services. Banks may choose whether to limit transactions on their ATMs to cards
issued by the bank or to permit acceptance of all cards accepted on our network.
See Item 6, "MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION -
Overview."


Surcharge Fees. In April 1996, national debt and credit card organizations
changed the rules applicable to their members, including us, to permit the
imposition of surcharge fees on cash withdrawals from ATMs. Our business is

                                       5
<PAGE>
substantially dependent upon our ability to impose surcharge fees. Any changes
in laws or card association rules materially limiting our ability to impose
surcharge fees would have a material adverse effect on us. See "--Regulatory
Matters - Surcharge Regulation." Since April 1996, we have expanded the number
of ATMs in our network and have expanded our practice of imposing surcharge fees
on cash withdrawals on ATMs.

Recent Developments in Our Business

The Company has increased its Branded Cash program through financial institution
partners. As of December 2004, the number of Branded partners was 66. The
Company's "Branded Cash" program helps its financial partners by promoting the
partner's brand in its region. This is a program where Nationwide Money Services
has placed equipment it owns into a merchant location. We allow a financial
institution (a bank or credit union) to brand the ATM with their name. There
name also is shown on the welcome screen on the ATM. The customers of the
financial institution that use the ATM receive a free (called "on-us" in the
industry) transaction when they withdraw money. However, the financial
institution still pays the interchange on the cash withdrawal. For this
privilege the financial institution supplies the cash, the cash replenishment
and first line maintenance to that ATM at a cost to Nationwide Money that is
lower than if Nationwide Money pays the financial institution for the rental of
money and pays independent third parties for the cash replenishment and first
line maintenance.

The Company has also continued to upgrade their ATMs with the newest technology,
allowing them to be Triple DES compliant and to increase their revenues through
the latest deployment technology for onscreen advertising.

The Company is also in discussions with various financial institutions in
regards to providing turnkey ATM solutions for their customers. Under this
scenario, the financial institution would purchase the ATM from the Company and
the Company would provide various services, which would include installation,
processing and management of vault cash, maintenance and accounting functions.

Two new programs the Company initiated in 2004 are:

     o    the "ATM's Made Easy" program, whereby the Company sells an ATM and
          obtains an automatically renewable seven year merchant and processing
          contract.
     o    secondly, in 2004 added another program called "Outsourcing", whereby
          Nationwide Money Services provides ATM management services, for small
          and medium sized financial institutions, for their ATMs.

On February 24, 2003 the Company's subsidiary, EFT Integration, received
notification from MPS Gateway terminating its processing agreement and
sponsorship of EFT Integration upon 180 days notification. In April 2003 EFT
Integration switched all processing to STAR Systems network. EFT Integration
processes 88% of the transactions generated from the Company owned ATMs. In
light of this, EFT Integration and Nationwide Money have signed contracts for
processing and sponsorship with STAR and Concord EFS National Bank. In February
2004 the Company has switched its settlement bank from Fifth Third Bank to
Wachovia Bank.

Our ATM Network

General. ATM locations in our network are concentrated on the East coast. The
following lists the 10 states that the Company currently does a majority of its
business and the number of ATMs located in those states that are on the
Company's network.

STATE       QUANTITY
-----       --------
GA          831
--          ---
TX          675
--          ---
VA          363
--          ---
FL          314
--          ---

                                       6
<PAGE>

NC          235
--          ---
NM          209
--          ---
SC          204
--          ---
MD          157
--          ---
LA          79
--          --
TN          65
--          --

The operation of the network involves the performance of many complementary
tasks and services, including principally:

     o    acquiring ATMs for us or our customers,
     o    selecting locations for ATMs and entering into leases for access to
          those locations,
     o    in the case of third party merchants, establishing relationships with
          them for processing transactions on their ATMs,
     o    the sale of our Branded Cash services to local and regional banks or
          credit unions(see section above "Branded Cash"),
     o    establishing relationships with national and regional card
          organizations and credit card issuers to promote usage of ATMs in the
          network,
     o    operating and maintaining the computer system and related software
          necessary to process transactions conducted on ATMs,
     o    processing transactions conducted on ATMs,
     o    supplying ATMs with cash and monitoring cash levels for re-supply, and
     o    managing the collection of fees generated from the operation of the
          network.

ATM Locations. We believe that the profitable operation of an ATM is largely
dependent upon its location. We devote significant effort to the selection of
locations that will generate high cardholder utilization. One of the principal
factors affecting our further penetration of existing markets is the
availability of attractive sites. We attempt to identify locations in areas with
high pedestrian counts where people need access to cash and where use of the ATM
is convenient and secure. Management believes the identification of locations is
supported by the desire of retailers of all types to offer their customers
access to cash as an alternative to cashing checks, which avoids the financial
exposure and added overhead of cashing checks. Key target locations for our ATMs
include the following

     o    grocery stores,
     o    convenience stores and combination convenience stores and gas
          stations,
     o    major regional and national retailers,
     o    hotels,
     o    shopping malls,
     o    airports,
     o    colleges,
     o    amusement parks,
     o    sports arenas,
     o    theaters, and
     o    bowling alleys.


We believe that once a cardholder establishes a habitual pattern of using a
particular ATM, the cardholder will generally continue to use that ATM unless
there are significant problems with the location, such as a machine frequently
being out of service. It is our goal to secure key locations before our
competitors can do so, and become the habitual ATM location of card users in our
markets.

We enter into leases for our ATM locations. The leases generally provide for the
payment to the lessor of either a portion of the fees generated by use of the
ATM or a fixed monthly rent. Most of our leases have a term of approximately
five years with various renewable time periods (typically the site owner renews

                                       7
<PAGE>
under the lease). We generally have the right to terminate a lease if the ATM
does not meet certain performance standards. The ATM site owner generally has
the right to terminate a lease before the end of the lease term if we breach the
lease agreement or become the debtor in a bankruptcy proceeding.

Typical ATM Transaction. In a typical ATM transaction processed by us, a debit
or credit cardholder inserts a credit or debit card into an ATM to withdraw
funds or obtain a balance inquiry. The transaction is routed from the ATM to our
processing center at EFT Integration or another third party processing company
by dedicated, dial-up communication links. The processing center computers
identify the card issuer by the bank identification number contained within the
card's magnetic strip. The transaction is then switched to the local issuing
bank or card organization (or its designated processor) for authorization. Once
the authorization is received, the authorization message is routed back to the
ATM and the transaction is completed.

Authorization of ATM transactions. Transactions processed on ATMs in our network
is the responsibility of the card issuer. We are not liable for dispensing cash
in error if we receive a proper authorization message from a card issuer.

Transaction Volumes. We monitor the number of transactions that are made by
cardholders on ATMs in our network. The transaction volumes processed on any
given ATM are affected by a number of factors, including location of the ATM,
the amount of time the ATM has been installed at that location, and market
demographics. Our experience is that the number of transactions on a newly
installed ATM is initially very low and increases for a period of three to six
months after installation as consumers become familiar with the location of the
machine. We processed a total of 7,309,045 transactions in fiscal 2004 and
6,565,344 transactions on our network in fiscal 2003. We are currently running
at an approximate 10,500,000 transaction run rate at the end of the fiscal year.

Axcess Technology Corporation

The Company commenced operation of Axcess Technology Corporation, a wholly-owned
corporation, initiated to increase the Company's development of propriety
software products for the ATM and banking industries, for example all of the NMS
Mystro products. Axcess Technology Corp., has an office at the Company's
headquarters in Ponte Vedra Beach, FL and an office near Cape Town, South
Africa.

Electronic Payment & Transfer, Corp.

A new start-up subsidiary for the Company, Electronic Payment & Transfer,
Corporation (EP&T) has been established to offer prepaid debit card products
directly through employers and through financial service sales channels. EP&T's
E-Payroll card product, the "Easy Green Cash" card, offers solutions to
employers that:

     o    wish to lower payroll costs; and/or

     o    need to pay employees without bank accounts or need to pay employees
          that travel or employees at different locations.

EP&T's card products can also be bundled with other products and services
tailored to meet the segment of the public that are not, or not fully, served by
traditional financial services companies. The debit cards can be used to access
cash at ATMs, transfer funds or carryout transactions at POS devices. Subsequent
product offerings are expected to include cards tied to consumer debt type
products, a bill payment network, card management and processing solutions and a
wider range of debit card based products. EP&T has the initial card products
available and are currently building a sales and marketing network to ramp up
revenue.


Acquisition Strategy

                                       8
<PAGE>
The Company believes there may be opportunities to purchase or merge with other
ATM deployers. These acquisition targets include many small-to-medium size ATM
deployers located in the U.S. By absorbing the operations of these company(s)
into one central operation and eliminating the duplication of overhead, the
economies-of-scale realized may increase the profit margins of the Company. Its
first of three acquisitions was completed in February, 2004 with an
approximately 900 ATM Merchant contracts added.

The second acquisition was completed at the end of September, 2004 with 111 ATM
locations added. While the third, also completed at the end of September, 2004,
added over 770 ATM locations to the Company's network.

Business Continuity

Global Axcess' business continuity plan includes the following two main
components:

     o    a plan to ensure the continuous operation of Global Axcess' core
          transaction processing systems; and

     o    a plan to minimize disruption of the remainder of its business
          functions.

Transaction Processing Systems.

The Company maintains Universal Power Systems and diesel generators for back-up
power during temporary power outages. In the event of a longer-term business
interruption, the Company has a Business Continuity Plan that allows all
incoming ATM messages to be re-routed to the Company's back up site at SunGard
Availability Services. SunGard is an international leader in business continuity
services. The Company's back up site is located in Carlstadt, New Jersey.

Other Business Functions.

The Company has a Business Continuity Plan for the remainder of its business
functions that can be broken down into 4 elements: Prevention, Event Management,
Event Mitigation, and Event Recovery. The plan addresses events such as vendor
service interruption, natural disasters, and internal systems problems. In the
event of a catastrophic event, the Company also maintains alternate SunGard
sites in Lake Mary, Florida and Atlanta, Georgia for office operations. These
alternate sites provide immediate access to the technical and office facilities
required for failover. Copies of all software and critical business information
are maintained off-site.


Competition

Competitive factors in our business include network availability and response
time, price to both the card issuer and to our customers, ATM location and
access to the networks. The market for the transaction processing and payment
services industry and specifically ATM services is highly competitive. Our
principal competitors are national ATM companies that have a dominant share of
the market. These companies have greater sales, financial, production,
distribution and marketing resources than us.

We have identified the following additional categories of ATM network operators:

     o    Financial Institutions. Banks have been traditional deployers of ATMs
          at their banking facilities. However, many banks are starting to place
          ATMs in retail environments where the bank has an existing
          relationship with the retailer. This may limit the availability of
          locations for our ATMs.

     o    Credit Card Processors. Several of the credit card processors have
          diversified their business by taking advantage of existing
          relationships with merchants to place ATMs at sites with those
          merchants.

                                       9
<PAGE>
     o    Third Party Operators. This category includes data processing
          companies that have historically provided ATM services to financial
          institutions, but also includes small and regional network operators
          such as us.

     o    Companies that have the capability to provide both back office
          services and ATM management services.

     o    Consolidators networks in the business, such as TRM/E-Funds and
          Cardtronics/E-Trade, consist of approximately 21,868 ATMs and 25,000
          ATMs respectively.

Management believes that many of the above providers, with the exception of
Cardtronics, deploy ATMs to diversify their operations and that the operation of
the ATM network provides a secondary income source to a primary business.

Since April 1996, when national debt and credit card organizations changed rules
applicable to their members to permit the imposition of surcharge fees, we have
experienced increased competition, both from existing ATM network operators and
from new companies entering the industry. There can be no assurance that we will
continue to be able to compete successfully with national ATM companies. A
continued increase in competition could adversely affect our margins and may
have a material adverse effect on our financial condition and results of
operations.


ATM Network Technology

Most of the ATMs in our network are manufactured by Fujitsu, Triton and Tranax,
but we own several other brands of ATMs such as Greenlink, Tidel, and others.
EFT Integration can process transactions generated by these brands of ATMs as
well as most other manufacturers such as IBM/Diebold, NCR, and Seimens/Nixdorf.
The wide range of advanced technology available for new ATMs provides our
customers with state-of-the-art electronics features and reliability through
sophisticated diagnostics and self-testing routines. The different machine types
can perform basic functions, such as dispensing cash and displaying account
information, as well as providing revenue opportunities for advertising and
selling products through the use of monochrome or color monitor graphics,
receipt message printing and stamp and coupon dispensing. Many of our ATMs are
modular and upgradeable so we may adapt them to provide additional services in
response to changing technology and consumer demand. Our field services staff
tests each ATM prior to placing it into the network.

Vault Cash.

An inventory of cash ("vault cash") is maintained in each ATM that is
replenished periodically based upon cash withdrawals. We rent vault cash for
1,126 of our ATMs from banks located in the U.S. Through our Branded Cash
program our branded cash partners provide cash for 417 ATM. For the remaining
1,295 ATM's in our network, we do not supply the vault cash. These would include
merchant owned ATM's where they supply their own cash, ATM's owned by other
third party owners and ATM's that are only processed through EFTI. "See
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS - Liquidity and Capital Resources."


Significant Relationships.

We have agreements with Food Lion and Kash n Karry Stores for whom approximately
629 and 67 ATMs, respectively, have been installed at their locations as of
December 31, 2004. The agreement for both of these grocery store chains was
originally for a five year period and set to automatically renew on November 28,
2007, however the contract was extended in September, 2003 to run through April,
2011 and set to automatically renew, unless terminated 60 days prior. In

                                       10
<PAGE>
addition, the site owner has the right to terminate the lease before the end of
the lease term under certain circumstances. Currently, there is no such breach
or circumstance. The aggregate revenues from Food Lion and Kash n Karry Stores
accounted for approximately 47.9% and 2.4% of our revenues in fiscal year 2004,
respectively. Kash n Karry stores closed 28 locations during 2004. The impact on
our revenues of these closed stores is expected to be a decrease of
approximately $235,000.


Trademarks.

In 2002, we applied to the United States Patent and Trademark Office to register
the trademarks: "NMS Mystro" We received a registration for the trademark "NMS
Mystro" from the U.S. Patent and Trademark Office on January 28, 2003. The
serial number is 78/111025. This trademark is used on various software that the
Company may sell in the future. This trademark will apply to NMS Mystro Cash
Manager, NMS Mystro Commission Manager, NMS Mystro Work Order Manager and NMS
Mystro Database Manager.

All of the products listed above are used to manage our day to day business.
Cash Manager is used to predict, order and track the cash dispensed from our
ATMs. Commission Manager calculates all commissions due to merchants,
distributors and partners. Work Order Manager is used to open a work order,
determine the problem and authorize the appropriate party to repair the ATM. The
Database Manager stores and gives us the ability to retrieve, sort and filter a
variety of information on our ATMs.


Regulatory Matters

Surcharge Regulation. The imposition of surcharges is not currently subject to
federal regulation, but has been banned by several states in which we currently
have no operations. Legislation to ban surcharges has been introduced but not
enacted in many other states as a result of activities of consumer advocacy
groups that believe that surcharges are unfair to consumers. Voters in San
Francisco and Santa Monica, California voted in 1999 to bar banks from charging
fees to non-customers who use their ATMs. Similar restrictions have been
proposed by other cities. The banking industry has resisted these efforts to
impose restrictions. We are not aware of the introduction of such legislation or
the submission to voters of such referendums applicable to us in any of the
states or cities in which we currently do business. Nevertheless, there can be
no assurance that surcharges will not be banned in the states where we operate,
and such a ban would have a material adverse effect on us.

Network Regulations. National and regional networks have adopted extensive
regulations that are applicable to various aspects of our operations and the
operations of other ATM network operators. We believe that we are in material
compliance with these regulations and, if any deficiencies were discovered, that
we would be able to correct them before they had a material adverse impact on
our business.

Triple Data Encryption Standard Compliance (Triple DES)- MasterCard and Star
Systems as well as other network providers for ATM transactions have issued a
security mandate that all ATMs be upgraded from DES to Triple DES technology (a
higher level of encryption). Triple DES uses an enhanced encryption key pad
residing in ATMs and point-of-sale terminals that makes it far more difficult
for even the fastest computers to determine all the possible algorithmic
combinations used to scramble PINs keyed in by consumers. The use of Single DES
keys, while effective for decades without any known security breaches by
computer hackers, is now thought to be vulnerable to today's faster computer
processors.

The nation's largest PIN-based debit network, Star, owned by Omaha, NE based
First Data Corp., is mandating that after June 30, 2003, all new and replacement
ATMs be capable of supporting Triple DES transactions, and that processors like
EFT Integration be Triple DES ready by July 1, 2004. As of December 31, 2003 EFT
Integration has been made ready to process transactions based on Triple DES
requirements. MasterCard requires that every new or replaced ATM to be Triple

                                       11
<PAGE>
DES compliant by April 1, 2002 (MasterCard), and all ATMs that are installed or
to be installed must be Triple DES compliant by March 31, 2005. VISA has given
the networks until December 31, 2005 to be Triple DES compliant. The industry is
trying to move for all networks and Mastercard to allow the industry to be ready
at the latest December 31, 2005, however that has not fully occurred as of
today.

The Company, however, has been granted an extension by MasterCard, VISA and STAR
for Triple DES compliance of December 31, 2006. Processing only customers of EFT
Integration have been granted a similar extension to December 31, 2005.

All new ATMs that we purchase are Triple DES compliant. A number of solutions
have been developed for legacy ATMs such as those in our network to upgrade them
from DES to Triple DES. The Company has approximately 650 legacy ATMs deployed.
All of these ATM's have an upgrade path. The current capital budget for upgrades
to these ATMs is approximately $1,800,000.

Although the Company believes that there will be solutions available for the
upgrading of its current network of ATMs and that it has planned financially for
the upgrade cost, there is no guarantee that these solutions will work or that
the financing will be available at the time of upgrading the ATMs. In the event
that these solutions do not work, or they are not affordable or the Company
cannot arrange for financing of the upgrades, the Company may have to cease
operation of those non-compliant ATMs, which would have a material adverse
effect on the Company.


During the past two fiscal years ending December 31, 2004 and 2003, the amount
of research and development costs amounted to $351,271 and $270,596,
respectively. The amount of these activities borne directly by customers was $0.


Employees

At December 31, 2004, the Company had 62 full time employees working in the
following subsidiaries:

Global Axcess Corp                5
Nationwide Money Services        39
EFT Integration                   3
Axcess Technology Corp           14
Electronic Payment & Transfer     1

None of our employees are represented by a labor union or covered by a
collective bargaining agreement. We have not experienced work stoppages and
consider our employee relations to be good. Our business is highly automated and
we outsource specialized, repetitive functions such as cash delivery and
security. As a result, our labor requirements for operation of the network are
relatively modest and are centered on monitoring activities to ensure service
quality and cash reconciliation and control.


ITEM 2. DESCRIPTION OF PROPERTIES

                                Approximate
                                Square
Location                        Footage                      Use
-----------------------------  --------------  --------------------------------
Ponte Vedra, Florida           10,000 sq. ft.   General office use;
                                                operations,
                                                accounting, software
                                                development
                                                and related
                                                administrative

                                       12
<PAGE>

-----------------------------  --------------  --------------------------------
West Columbia, South Carolina   3,600 sq. ft.   General warehouse use,
                                                equipment
                                                storage, and maintenance
                                                operations.
-----------------------------  --------------  --------------------------------
Cape Town, South Africa         1,800 sq. ft.   General Office use, software
                                                Development
-----------------------------  --------------  --------------------------------
Jacksonville, Texas            5,000 sq. ft.    Office, general warehouse use,
                                                equipment
                                                storage, and maintenance
                                                operations.



In general, all facilities are in good condition and are operating at capacities
that range from 85% to 100%. All facilities are leased under operating leases.
In comparison to similar facilities in the area, we believe the terms of the
lease are fair, and the monthly lease rate is at or below the cost for
comparable space.

ITEM 3. LEGAL PROCEEDINGS


During the fourth quarter of 2002, the Business Software Alliance ("BSA")
conducted an audit of software in use by Global Axcess' subsidiary Nationwide
Money Services, Inc. ("NMS"). BSA alleges that NMS infringed on software
copyrights for Microsoft and Symantec. On December 5, 2002, BSA sent NMS a
letter requesting payment of $237,842 plus attorney fees for purportedly
misappropriated software that was installed on NMS computers. While
acknowledging that some software was inappropriately installed on NMS computers,
NMS disagrees with the facts presented in the BSA letter. NMS has settled with
the BSA subsequent to December 31, 2004. The Company has reserved the amounts
fully as of December 31, 2004.


In March 2004, the Company received a claim filed by James Collins, a previous
employee of Global Axcess Corp. The claim was filed in Superior court of
California, County of San Diego on March 2, 2004. The claim alleges the
following are owed in connection with the employment agreement:
o compensation, bonuses and other benefits of approximately $316,915; and o
450,000 restricted shares and 1,798,500 stock options exercisable at $0.75 per
share.

The Company believes that this claim is unfounded. The Company's management
believes that this claim will not have a material adverse effect on the
Company's consolidated results of operations, cash flows or financial position.


The Company's officers and directors are aware of no other threatened or pending
Litigation or government proceeding, which would have a material, adverse effect
on the Company. From time to time the Company may be a defendant (actual or
threatened) in certain lawsuits encountered in the ordinary course of its
business, the resolution of which, in the opinion of management, should not have
a material adverse effect on the Company's financial position, results of
operations, or cash flows.


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

           None.


                                       13
<PAGE>
                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

We are authorized to issue a total of 225,000,000 shares of Common Stock, and
25,000,000 shares of Preferred Stock ($0.001 par value). The Company does not
currently have any shares of its Preferred Stock outstanding.

Our common stock is traded on the Over-the-Counter Bulletin Board ("OTCBB")
under the symbol "GLXS". As of March 10, 2005, there were 87,896,727 shares of
the Company's Common Stock ($0.001 par value) issued and outstanding.

On March 15, 2005, there were 649 registered holders of record of our common
stock. Because many of such shares are held by brokers and other institutions on
behalf of stockholders, we are unable to estimate the total number of
stockholders represented by these record holders. The following table sets forth
the high and low sales price per share of our common stock.

                                                      Price Range
                                                      ------------
                                                      High    Low
                                                      ------  ----
                  Fiscal 2004:
                    First Quarter                     $ 1.21   .45
                    Second Quarter                       .68   .51
                    Third Quarter                        .55   .28
                    Fourth Quarter                       .37   .26
                    Fiscal Year                         1.21   .26

                  Fiscal 2003:
                    First Quarter                     $  .15   .06
                    Second Quarter                       .29   .06
                    Third Quarter                        .36   .17
                    Fourth Quarter                       .36   .30
                    Fiscal Year                          .36   .06


We have paid no dividends on our common stock during the fiscal year ended
December 31, 2004, or during any period of the Company's existence.

The declaration of future dividends, whether in cash or in-kind, is within the
discretion of the Board of Directors and will depend upon business conditions,
our results of operations, our financial condition, and other factors.

Securities authorized for issuance under equity compensation plans:

As of December 31, 2004, we had the following securities authorized for issuance
under the equity compensation plans:
<TABLE>
<CAPTION>
<S>                                                                    <C>                <C>                    <C>

                                                                  Number of           Weighted-average   Number of securities
Plan Category                                                     Securities to be    exercise price of  remaining available
                                                                  issued upon         outstanding        for future issuance
                                                                  exercise of         options, warrants  under equity
                                                                  outstanding         and rights         compensation plans
                                                                  options, warrants                      (excluding
                                                                  and rights                             securities reflected
                                                                                                         in column (a)

Equity compensation plans approved by security holders
     Stock Options                                                12,223,500          $ 0.28                   5,276,500
     Warrants                                                     54,079,342          $ 0.55                          --
Equity compensation plans not approved by security holders                --              --                          --
Total                                                             64,109,951           $ 0.82                  4,435,500

</TABLE>

                                       14
<PAGE>
Recent Sales of Unregistered Securities

January 15, 2004, the Company closed its Regulation S private offering whereby
it raised $1,039,500 during the three months ended March 31, 2004 in connection
with the sale of 2,204,063 units for $.50 per unit to accredited and
institutional investors. Each unit consists of two shares of common stock of the
Company and received four common stock purchase warrants,(F Warrants, G
Warrants, H Warrants and I Warrants), which are exercisable for a period of five
years or for 18 months after the effective date of a registration statement
covering the shares of common stock underlying the warrants, whichever is
longer. The terms of the warrants are set forth below.



January 19, 2004, the Company closed its 2nd private offering whereby it raised
$490,000 during the three months ended March 31, 2004 in connection with the
sale of 1,070,000 units for $.50 per unit to accredited and institutional
investors. Each unit consists of two shares of common stock of the Company and
received four common stock purchase warrants,(F Warrants, G Warrants, H Warrants
and I Warrants), which are exercisable for a period of five years or for 18
months after the effective date of a registration statement covering the shares
of common stock underlying the warrants, whichever is longer. The terms of the
warrants are set forth below.

..

January 29, 2004, the Company raised $3,500,000 in connection with the sale of
14,000,000 shares of common stock for $.25 per share to two institutional
investors. The investors, upon the purchase of every two shares of common stock,
also received four common stock purchase warrants, which resulted in the
issuance of 28,000,000 common stock purchase warrants. The Company issued four
types of warrants (F Warrants, G Warrants, H Warrants and I Warrants), which are
exercisable for a period of five years or for 18 months after the effective date
of a registration statement covering the shares of common stock underlying the
warrants, whichever is longer. The four warrants terms are as follows:

o    The F Warrants are exercisable at $.35 per share and are not callable by
     the Company.

o    The G Warrants are exercisable at $.35 per share and are callable by the
     Company if the market price of the Company's common stock is equal to or in
     excess of $0.70 for a period of twenty consecutive days and there is an
     effective Registration Statement covering the shares common stock
     underlying the G Warrant.

o    The H Warrants are exercisable at $.50 per share and are callable by the
     Company if the market price of the Company's common stock is equal to or in
     excess of $1.00 for a period of twenty consecutive days and there is an
     effective Registration Statement covering the shares common stock
     underlying the H Warrant.

o    The I Warrants are exercisable at $1.00 per share and are callable by the
     Company if the market price of the Company's common stock is equal to or in
     excess of $1.25 for a period of twenty consecutive days and there is an
     effective Registration Statement covering the shares common stock
     underlying the I Warrant.

                                       15
<PAGE>

All common shares associated with the above private placement are restricted
securities in accordance with Rule 144 as promulgated under the of the
Securities Act of 1933. However, the Company filed a registration statement
covering the shares of common stock and the shares underlying the common stock
purchase warrants, which has been declared effective.

During January 2004, shareholders exercised stock purchase warrants for 234,963
shares of common stock. These stock purchase warrants were exercised at several
prices per share for an amount of $15,155.

During the three months ending March 31, 2004 shareholders exercised stock
purchase warrants for an aggregate of 12,853,485 shares of common stock. These
stock purchase warrants were exercised on a cashless provision.

During February 2004, shareholders exercised stock purchase warrants for 429,550
shares of common stock. These stock purchase warrants were exercised at $0.10
per share for an amount of $42,955.

Also during February 2004, shareholders exercised stock options for 166,666
shares of common stock. These stock options were exercised at $0.50 per share
for an amount of $83,333.

In March 2004, shareholders exercised stock purchase warrants at $0.35 per share
and received $1,966,489. The Company issued 5,618,571 shares on April 1, 2004.

During 2004, after entering into a settlement agreement, 380,000 common shares
were returned to the Company. Initially these shares were issued in 2001 for
consulting fees and charged against income. At the time the settlement occurred
these shares had a market value of $0.80 per share for a total value of $304,000
returned to Treasury of the company.

During September 2004, the Company issued debt with stock purchase warrants
attached at an exercise price of $0.35 per share. A total of 675,000 shares
underlying the stock purchase warrants for a fair value of $68,549 were issued.

During the fourth quarter of the year, 20,000 shares were issued for consulting
services at a fair value of $5,800.

During December 2004 the Company issued 1,200,000 stock options at an exercise
price of $0.30, for a fair value of $9,094.

During December 2004, the Company prepaid $12,500 of consulting costs for
capital raising activities.

Refer to the "Statement of Stockholder's Equity" in the Financial Statements and
related Footnote Disclosures, attached.

 The use of proceeds from each of the above offerings were for working capital
and acquisitions of assets (as described in Item 1, "Recent Developments".


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


The following discussion (presented in millions, except per share amounts)
should be read in conjunction with the consolidated financial statements and
notes thereto.

                                       16
<PAGE>
In addition to historical information, this Annual Report on Form 10-KSB
contains forward-looking statements that involve risks and uncertainties that
could cause actual results to differ materially. Factors that might cause or
contribute to such differences include, but are not limited to, those discussed
in the section entitled "Management's Discussion and Analysis of Financial
Condition and Results of Operations-Factors That May Affect Future Results of
Operations." You should carefully review the risks described in other documents
we file from time to time with the Securities and Exchange Commission, including
the Quarterly Reports on Form 10-QSB to be filed in 2005. When used in this
report, the words "expects," "anticipates," "intends," "plans," "believes,"
"seeks," "targets," "estimates," "looks for," "looks to," and similar
expressions are generally intended to identify forward-looking statements. You
should not place undue reliance on these forward-looking statements, which speak
only as of the date of this Annual Report on Form 10-KSB. We undertake no
obligation to publicly release any revisions to the forward-looking statements
or reflect events or circumstances after the date of this document.

Overview

The Company, through its wholly owned subsidiaries, owns and operates Automatic
Teller Machines ("ATM") with locations throughout the United States. Our
revenues are principally derived from two types of fees, which we charge for
processing transactions on our ATM network. We receive an interchange fee from
the issuer of the credit or debit card for processing a transaction when a
cardholder uses an ATM in our network. In addition, in most cases we receive a
surcharge fee from the cardholder when the cardholder makes cash withdrawals
from an ATM in our network.

Interchange fees are processing fees that are paid by the issuer of the credit
or debit card used in a transaction. Interchange fees vary for cash withdrawals,
balance inquiries, account transfers or uncompleted transactions, the primary
types of transactions that are currently processed on ATMs in our network. The
maximum amount of the interchange fees is established by the national and
regional card organizations and credit card issuers with whom we have a
relationship. We receive interchange fee for transactions on ATMs that we own,
but sometimes we rebate a portion of the fee to the owner of the ATM location
under the applicable lease for the ATM site. We also receive the interchange fee
for transactions on ATMs owned by third party vendors included within our
network, but we rebate all or a portion of each fee to the third party vendor
based upon negotiations between us. The interchange fees received by us vary
from network to network and to some extent from issuer to issuer, but generally
range from $0.15 to $0.55 per cash withdrawal. Interchange fees for balance
inquiries, account transfers and denied transactions are generally substantially
less than fees for cash withdrawals. The interchange fees received by us from
the card issuer are independent of the service fees charged by the card issuer
to the cardholder in connection with ATM transactions. Service fees charged by
card issuers to cardholders in connection with transactions through our network
range from zero to as much as $2.50 per transaction. We do not receive any
portion of these service fees.

In most markets we impose a surcharge fee for cash withdrawals. Surcharge fees
are a substantial additional source of revenue for us and other ATM network
operators. The surcharge fee for ATMs in our network ranges between $1.50 and
$2.50 per withdrawal. The surcharge fee for other ATMs in our network ranges
between $0.50 and $7.50 per withdrawal. We receive the full surcharge fee for
cash withdrawal transactions on ATMs that we own, but often we rebate a portion
of the fee to the owner of the ATM location under the applicable lease for the
ATM site. We also receive the full surcharge fee for cash withdrawal
transactions on ATMs owned by third party vendors included within our network,
but we rebate a all or a portion of each fee to the third party vendor based
upon a variety of factors, including transaction volume and the party
responsible for supplying vault cash to the ATM.

In addition to revenues derived from interchange and surcharge fees, we also
derive revenues from providing network management services to third parties
owning ATMs included in our ATM network. These services include 24 hour
transaction processing, monitoring and notification of ATM status and cash

                                       17
<PAGE>
condition, notification of ATM service interruptions, in some cases, dispatch of
field service personnel for necessary service calls and cash settlement and
reporting services. The fees for these services are paid by the owners of the
ATMs.

Interchange fees are credited to us by networks and credit card issuers on a
monthly basis and are paid to us in the following month by the 10th business
day. Surcharge fees are charged to the cardholder and credited to us by networks
and credit card issuers on a daily basis. We periodically rebate the portion of
these fees owed to ATM owners and owners of ATM locations. Fees for network
management services are generally paid to us on a monthly basis.

The Company's mission is to become a leading global ATM network and services
provider through network acquisition and internal development of value-added
turnkey, consumer and business-to-business transaction solutions and products.
The Company is positioning itself to leverage its advanced technology, internal
processing, economies of scale and industry knowledge to capture a larger
portion of the non-bank ATM market. Importantly, having both project management
and transaction processing allows the Company to successfully compete in its
industry. Most competitors do not have this vertical capability. When coupled
with third-party products, the Company will be in a position to increase the
financial services offered by the ATM. These future financial and digital-based
products will be targeted towards the traditional ATM customer (domestically,
15% of the working population do not use traditional bank services/checking
accounts), as well as potential new ATM customers. These products are intended
to give the Company a competitive edge in both product offerings and higher
margin revenues, and to draw ATM companies to its acquisition strategy. Although
the Company has historically focused its operations mainly in the Eastern region
of the United States, the Company has commenced expansion of its operations
throughout the U.S.


Comparison of Results of Operations for the Fiscal Years Ended December 31,
2004 and 2003

Revenues. Our total revenues increased 36% to $13,907,950 for the fiscal year
ended December 31, 2004 ("fiscal 2004") from $10,201,765 for the fiscal year
ended December 31, 2003 ("fiscal 2003"). This increase is due to a number of
factors, but is mainly due to two main factors:

     o    added revenue generated from the three acquisitions during fiscal
          2004;
     o    and from internal growth with increased locations.

Cost of Revenues. Our total cost of revenues increased by 29% from $6,377,846 or
62.5% of revenue to $8,204,890 or 59% of revenue in fiscal years ending December
31, 2003 and 2004, respectively. The principal components of cost of revenues
are cost of cash and cash replenishment, maintenance, producing salaries,
telecommunication services and transaction processing charges, interchange and
surcharge rebates and ATM site rentals. The decrease in cost of revenues is
mainly attributable to three factors: the reduction of unprofitable site
locations; the increase in branded cash locations under the Branded Cash
Program; and the addition of higher margin ATM merchant locations

The branded cash program saw an increase in the umber of financial institutions
to 66, an increase in fiscal 2004 of 32, from 34 at the end of fiscal 2003. The
number of sites increased from 352 branded ATM sites in fiscal 2003, to over 583
Branded Cash sites in fiscal 2004.

The acquisition of over 900 ATM merchant locations early in fiscal year 2004
added gross margins from that acquisition of approximately 70%, thus reducing
the weighted average of cost of revenues from fiscal year 2003.

                                       18
<PAGE>
Gross Margin. Gross profit as a percentage of revenues was 37.5% in 2003 and 41%
in 2004. The increase in fiscal 2004 was caused by a number of factors,
including the factors listed above in Cost of Revenue.

Operating Expenses. Our total operating expenses increased to $5,162,056 or
37.1% of revenue in fiscal 2004 from $3,665,794 or 35.9% of revenue in fiscal
2003. The principal components of operating expenses are general and
administrative expenses such as professional fees, administrative salaries and
benefits, consulting fees, occupancy costs, sales and marketing expenses and
administrative expenses. Operating expenses also includes depreciation and
amortization.

The increase in operating expenses is mainly attributable to increases in
selling, general and administrative expenses as a result of increases in
development costs for Electronic Payment & Transfer Corp., acquisition overhead
costs, and increases in investment relations, security systems costs, audit and
professional fees, salaries and wages, employee taxes and benefits during the
fiscal period 2004. In addition, there was a significant increase in
amortization of intangible merchant contracts from the acquisitions during the
year in the amount of $368,766 as compared to 2003.

Depreciation and Amortization. Depreciation and amortization has increased in
fiscal year 2004 to $1,159,561 from $790,795 in fiscal year 2003. This increase
in depreciation and amortization expense was due to several factors:

     o    the first is an increase in ATM equipment and developed software,
          purchased and acquired during fiscal year 2004, whereby fixed assets,
          net, have grown from $1,840,792 in fiscal year 2003 to $4,945,588 in
          fiscal year 2004; and
     o    secondly, there was an increase in amortization of merchant contracts
          purchased during the fiscal year 2004, with merchant contract assets
          increasing from $1,170,017 in fiscal year 2003, to $8,632,895 in
          fiscal year 2004.

See Financial Statement Footnotes #1 Significant Account Policies and #5
Intangible Assets, regarding the amortization of intangible merchant contracts.

Interest Expense. Interest expense has increased to $188,411 or 1.35% of revenue
in fiscal 2004 from $108,082 or 1.06% or revenue in fiscal 2003. This was mainly
due to the increased bank loans and notes of $4,121,346 in fiscal year 2004 from
$363,091 in fiscal year 2003, as well as increased capital leases from $306,700
during the fiscal year 2003 to $1,168,437 in fiscal year 2004.

Other Income/Expense. Other income decreased to $249,000 in fiscal year 2004 as
compared to other income of $259,823 in fiscal year 2003. The income in fiscal
year 2003 was attributable to debt cancellation by note holders. In fiscal year
2004 the income we had was a one time settlement income in connection with the
receipt of approximately $304,000 worth of stock returned and cancelled by the
Company to settle a claim by the Company. This was offset by increased
contingent reserves of $55,000 in fiscal year 2004.

Income before Taxes. We had income before taxes of $601,594 during the fiscal
year ended December 31, 2004 compared to income of $309,866 during the fiscal
year ended December 31, 2003 as a result of the factors discussed above.

Income Taxes. We paid no income taxes for fiscal 2003 or fiscal year 2004, as a
result of a loss in 2001 and a carryforward from 2001 of approximately
$7,500,000. We have unused operating loss carry forwards which will expire in
various periods through 2016. Due to accelerated depreciation and amortization
tax laws the Company realized a tax loss for 2004. The Company is expecting to
record a book income but another tax loss in 2005, and therefore is required to
use a valuation allowance and record a deferred tax benefit during fiscal year
2004 in the amount of $538,295. Due to the unforeseen nature of the business it
is unknown what valuation allowance will be needed in 2005, and therefore the
remaining unused operating loss carryforward will be available to offset future
income when known.

                                       19
<PAGE>
IMPAIRMENT OF GOODWILL

Management has reviewed the remaining value of goodwill and merchant contracts
of $4,023,034 and $8,632,895, respectively, which is attributable to the
acquisition of Nationwide Money Services, Inc. and its wholly owned subsidiary,
EFT Integration; the acquisition of the Clearinghouse Services Agreement; and
the three asset acquisitions, during fiscal year 2004, and has determined that
there is no impairment of these assets based upon future expectations of cash
flow.

RELATED PARTY TRANSACTIONS

During fiscal year 2004 there were several related party transactions as noted
below:

In February 2004, we issued 912,435 shares of common stock to Michael Dodak, a
stockholder, officer, and director of the Company, as a result of the cashless
exercise of 1,000,000 warrants at $0.10 per share that were initially purchased
from the Company.

In February 2004, we issued 912,435 shares of common stock to David Fann, a
stockholder, officer, and director of the Company, through exercise of 1,000,000
Private Placement Offering Warrants (offsetting an equal amount of debt
currently owed by our company) at $0.10 per share and exercised as cashless.

In February 2004, we issued 364,974 shares of common stock to Bob Colabrese, a
stockholder, and officer of the Company, through cashless exercise of 400,000
Warrants at $0.10 per share that were initially purchased from the Company.

In February 2004, we issued 91,244 shares of common stock to David Surette, a
stockholder, and officer of the Company, through cashless exercise of 100,000
Warrants at $0.10 per share that were initially purchased from the Company.

In February 2004, we issued 365,035 shares of common stock to Lock Ireland, a
stockholder and director of the Company, through cashless exercise of 400,000
Warrants at $0.10 per share that were initially purchased from the Company.

In March 2004, we issued 10,000 shares of common stock to Lock Ireland, a
stockholder and director of the Company, through exercise of 10,000 Warrants at
$0.35 per share that were initially purchased from the Company.

In March 2004, we issued 700,000 shares of common stock to BFS US Special
Opportunities Trust PLC, a stockholder and beneficial owner of the Company,
through the exercise of Warrants at $0.35 per share that were initially
purchased from the Company.

In March 2004, we issued 700,000 shares of common stock to Renaissance Capital
Growth & Income Fund III, Inc., a stockholder and beneficial owner of the
Company, through the exercise of Warrants at $0.35 per share that were initially
purchased from the Company.

In March 2004, we issued 700,000 shares of common stock to Renaissance US Growth
Investment Trust PLC, a stockholder and beneficial owner of the Company, through
the exercise of Warrants at $0.35 per share that were initially purchased from
the Company.


In February 2004, we issued 2,666,667 shares of common stock to BFS US Special
Opportunities Trust PLC, a stockholder and beneficial owner of the Company,
through a Private Placement Offering for $666,666.75 and we issued 5,333,334
Warrants exercisable from $0.35 to $1.00.

                                       20
<PAGE>
In February 2004, we issued 2,666,667 shares of common stock to Renaissance
Capital Growth & Income Fund III, Inc., a stockholder and beneficial owner of
the Company, through a Private Placement Offering for $666,666.75 and we issued
5,333,334 Warrants exercisable from $0.35 to $1.00.

In February 2004, we issued 2,666,667 shares of common stock to Renaissance US
Growth Investment Trust PLC, a stockholder and beneficial owner of the Company,
through a Private Placement Offering for $666,666.75 and we issued 5,333,334
Warrants exercisable from $0.35 to $1.00.

In February 2004, we issued 6,000,000 shares of common stock to Baron Partners,
LP, a stockholder and beneficial owner of the Company, through a Private
Placement Offering for $1,500,000 and we issued 12,000,000 Warrants exercisable
from $0.35 to $1.00.

In September 2004, we issued 15,000 warrants to Lock Ireland, a stockholder and
director of the Company, as part of a debenture with an exercise price of $0.35
per share.

In September 2004, we issued 330,000 warrants to BFS US Special Opportunities
Trust PLC, a stockholder and beneficial owner of the Company, as part of a
debenture with an exercise price of $0.35 per share.

As of December 31, 2004, we had an unsecured promissory note in the amount of
$192,966 outstanding payable to Robert Mehlman, a stockholder of the Company.
The note bears interest in the amount of 11% and is due in June 2013


During the fiscal years 2004 and 2003 there were payments on notes payable -
related parties of $57,814 and $262,447, respectively.

Also during fiscal year 2004 there were new proceeds from notes payable -
related parties in the amount of $2,250,000. These funds were used to provide
acquisition financing.

During June 2003, several of the Company's management acquired stock of the
Company, see Item 12 below under "CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS".

During October 2003, the management of the Company was granted an incentive
stock option plan for performance goals effective during fiscal year 2004.

During December 2004 the management of the Company was granted an incentive
stock option plan for performance goals effective during fiscal year 2005. See
Item 10, "EXECUTIVE COMPENSATION" for more detail.

LIQUIDITY AND CAPITAL RESOURCES

Working Capital. As of December 31, 2004, the Company had current assets of
$2,750,511 and current liabilities of $3,849,745 which results in a working
capital deficit of $1,099,234, as compared to current assets of $2,698,552 and
current liabilities of $1,275,462 resulting in a working capital of $1,423,090
as of December 31,2003. The ratio of current assets to current liabilities
decreased to 0.71 at December 31, 2004 from 2.11 at December 31, 2003. Due to
the accounting of purchased acquisitions, whereby the assets purchased are
considered long-term, and the debt used to acquire the acquisitions has a
current portion (principal due within 12 months of the balance sheet date), the
effect is that the current liabilities are more heavily weighted. We are not
able to include future earnings in the current asset side of the calculation.
The effect is that the majority of the current liabilities increased from
acquisition debt by $1,125,000, thereby accounting for substantially all of the
working capital deficit. It is expected that cash provided from operations will
be sufficient for the next 12 months.


Additional Funding Sources

We have funded our operations and capital expenditures from cash flow generated
by operations, capital leases, from the settlement of various issues with third
parties and from private placement offerings. Net cash provided by operating
activities was $1,795,851 and $187,768 in fiscal 2004 and fiscal 2003,
respectively. Net cash provided by operating activities in fiscal 2004 consisted
primarily of a income of $1,139,889, an increase in depreciation and
amortization to $1,159,561 by 368,766, an increase in deferred tax asset of

                                       21
<PAGE>
$538,296, an increase in accounts receivable and notes receivable of $794,134,
an increase in inventory of $25,979, increases in prepaid and other assets of
$94,159, an increase on other non-current assets of $138,886, and an increase of
accounts payable and accrued liabilities of $1,087,855. The Company was able to
obtain $4,177,807 in bank loans, related party notes and capital lease lines.
The Company also sold common stock less fees netting $6,956,156 in proceeds, and
allowed us to make the acquisitions for $10,719,398 (plus fees less
amortization)for merchant and ATM contracts, also the Company purchased fixed
assets in the form of ATMs, computer hardware and upgraded software and new ATMs
totaling $2,845,167,. The  Company's  sources of cash are adequate for the next
12 month's of operations.


In order to fulfill its business plan and expand its business, the Company must
have access to funding sources that are prepared to make equity or debt
investments in the Company's securities.

In order to address this potential for growth, the Company has taken steps to
raise additional funds to finance its operations, including the potential for
making strategic acquisitions, which could better position the Company for
growth. Historically, the Company has relied primarily upon institutional
investors for this purpose. Of the approximately $9,100,000 total raise in
equity financing during the years ended December 31, 2004 and 2003, the majority
was funded by institutions. There can be no guarantee that institutional funding
will be available to the Company.

The Company has been successful in raising funds in fiscal year 2004. From the
three (3) Private Placements Offerings additional funds may become available
from the callable sections of warrants attached to the common stock sold in
these offerings although we cannot guarantee that this will happen. In the first
quarter of fiscal year 2004, the Company has been able to make one call on the
warrants from the 2nd Offering. The Company has received over $2,000,000 under a
call to exercise during this time period.

The Company's ability to attract investors depends upon a number of factors,
some of which are beyond the Company's control. The key factors in this regard
include general economic conditions, the condition of ATM markets, the
availability of alternative investment opportunities, the Company's past
financial performance affecting the Company's current reputation in the
financial community.

The Company is continuing its efforts to raise additional capital through equity
and/or debt financings. The Company estimates to continue its current business
plan and acquisition strategy, it will require approximately $3,000,000 in
additional working capital to meet its needs for the next 12 months for such
items as new and updated ATMs, software development and card development. These
needs are currently being met by Lease Credit facilities with several leasing
companies, one being Wachovia Leasing Corp. Ongoing acquisition funding will
require the raising of funds specifically for those acquisitions.

The Company will require significant additional financing in the future in order
to satisfy its acquisition plan. The Company intends to raise additional capital
through debt and equity financings to fund its continued growth. The need for
additional capital to finance operations and growth will be greater should,
among other things, revenue or expense estimates prove to be incorrect,
particularly if additional sources of capital are not raised in sufficient
amounts or on acceptable terms when needed. Consequently, the Company may be
required to reduce the scope of its business activities until other financing
can be obtained.

The Company does not use its own funds for vault cash, but rather relies upon
third party sources. The Company in general rents the vault cash from financial
institutions and pays a negotiated interest rate for the use of the money. The
vault cash is never in the possession of, controlled or directed by the Company
but rather cycles from the bank, to the armored car carrier, and to the ATM.
Each day's withdrawals are settled back to the owner of the vault cash on the
next business day. Both Nationwide Money and its customers (the merchants) sign

                                       22
<PAGE>
a document stating that the vault cash belongs to the financial institution and
that neither party has any legal rights to the funds. The required vault cash is
obtained under the following arrangements.

     o    Palm Desert Bank. Nationwide Money Services has been using Palm Desert
          National Bank as a vault cash provider since April of 2001. This
          relationship was limited to the funding of a specific portfolio of
          ATMs and as a result limited the growth potential of the relationship.
          During the third quarter of 2002, Nationwide Money and Palm Desert
          initiated discussions to expand the relationship and for Palm Desert
          to provide vault cash for additional ATMs. As of 12/31/2004,
          Nationwide Money had 98 ATMs funded by Palm Desert with a vault cash
          outstanding balance of about $2,500,000. In January 2003, we entered
          into an arrangement with Palm Desert allowing us to obtain up to
          $10,000,000 in vault cash. The Palm Desert Bank arrangement has a term
          of two years and may be terminated by Palm Desert Bank upon breach by
          us and upon the occurrence of certain other events. Under this
          arrangement, we are required to pay a monthly service fee on the
          outstanding amount equal to the prime rate of interest, plus a
          specified percentage, and must pay monthly "bank" fees. Additionally
          the Company is required to make a deposit with Palm Desert Bank in
          amount determined by the outstanding balance. We are also required to
          maintain insurance on the vault cash.

     o    WSFS. On May 15, 2000, we entered into an arrangement with Wilmington
          Savings Fund Society ("WSFS") allowing us to obtain up to $2,000,000
          in vault cash. In May 2002, we renewed the agreement with WSFS and
          increased the vault cash limit to $5,000,000 and the new contract has
          a month-to-month term. In September, 2004 the Company renegotiated a
          higher level of vault cash limit to $20,00,000. As of December 31,
          2004, approximately $14,300,000 was outstanding. The WSFS contract may
          be terminated by WSFS at any time upon breach by us and upon the
          occurrence of certain other events. Under this arrangement, we are
          required to pay a monthly service fee on the outstanding amount equal
          to the prime rate of interest, plus a specified percentage, and must
          pay monthly "bank" and insurance fees. We are also required to
          maintain insurance on the vault cash.

     o    During October 2004, the Company signed and agreement with First
          Charter Bank to provide vault cash with limits up to $3,000,000. The
          agreement arranges for First Charter to brand ATM's while providing
          the vault cash for reduced rates compared to other providers of vault
          cash. They currently provide approximately $2,500,000 of vault cash at
          the end of the fiscal year.

     o    Various Branded Cash Partners. Nationwide Money has partnered with
          numerous banks and credit unions to market specific Nationwide ATMs to
          the cardholders of these institutions. We add signage and marketing
          material to the ATM so that the ATM is easily identified as being
          associated with the bank or credit union, and the cardholders of these
          institutions receive surcharge free transactions at the designated
          ATMs. This provides the bank or credit union additional marketing
          power and another point of access to funds for their cardholders. In
          return for this benefit, the bank or credit union, provide and manage
          the vault cash in the specified ATM(s), as well as provide and pay for
          cash replenishment and first line maintenance. The advantage to
          Nationwide Money is that this reduces the costs associated with vault
          cash, cash replenishment and first line by approximately 50%. Another
          advantage is that with a branded ATM, transactions volumes
          traditionally increase more than at a non-branded ATM. As of 12/31/04,
          Nationwide Money had 66 branded financial partners, which funded 583
          ATMs, with about $13.0 million in outstanding vault cash.



As a result of certain factors, our working capital has decreased from the same
period a year ago. We had negative working capital change of $2,522,325 on
December 31, 2004 and this has changed from a positive working capital of
$1,423,090 at December 31, 2003. This decrease in working capital is mainly due
to asset and acquisition purchases totaling $14,607,361 during fiscal year 2004.

                                       23
<PAGE>
These investing activities were mainly funded by cash provided by financing
activities of $10,533,353. Private Placement offerings in fiscal year 2004
provided the remaining cash and was also used to payoff lease obligations, notes
due to related parties and notes payable. In addition, we have incurred
additional demands on our available capital in connection with the start-up
expenses associated with our two new subsidiaries Axcess Technologies Corp. and
Electronic Payment & Transfer, Corp.

During February 2004, the Company acquired approximately 900 ATM Merchant
processing agreements for $3.9 million. These funds were mainly funded through
institutional investors through two additional Private Placement Offerings
totaling approximately $4.5 million during fiscal years 2003 and 2004. During
September 2004, the Company acquired approximately 111 and 745 ATM Merchant
location contracts for $918,000 and 7,000,000, respectively. These latest
acquisitions were partly funded through the Private Placement Offerings and
through debt raised of $4,000,000, for a total acquisition cost of $7,918,000.

The acquisitions during fiscal 2004 for merchant and ownership contracts have
added approximately $250,000 per month of EBITDA cash flow. Along with these
contracts, as any newly-placed ATMs mature, such ATMs generally experience
increased activity and generate increased revenues. We believe that future cash
flow from operations will be sufficient to fund operations and to allow us to
continue to explore and pursue expansion opportunities. If cash flow from
operations is not sufficient to fund our operations, we may be required to seek
additional sources of financing. If any of our existing financing arrangements
are terminated, or if we seek additional funding to expand our ATM network,
additional financing may not be available when needed or may not be available on
acceptable terms. In that event, our ability to maintain and expand our ATM
network may be adversely affected. The loss of one or more sources of vault cash
funding or the loss of additional customers could have a material adverse effect
on our business, results of operations and financial condition. As always, we
continue to look for new and alternative vault cash sources.

Contractual Obligations. Our ability to fund our capital needs is also impacted
by our overall capacity to acquire favorable financing terms in our acquisition
of ATMs. Our contractual obligations, including commitments for future payments
under non-cancelable lease arrangements and short and long-term debt
arrangements, are summarized below and are fully disclosed in Notes 6,7 and 8 to
our Consolidated Financial Statements. We do not participate in, nor secure
financings for, any unconsolidated, limited or special purpose entities. We
anticipate that our capital expenditures for fiscal 2004 will total
approximately $1,800,000, primarily for the acquisition and/or upgrade of ATMs
and related ATM installation costs. We lease our ATMs under capital lease
agreements that expire by 2009 and provide for lease payments at interest rates
up to 16.9% per annum. In 2004 we acquired approximately $1,200,000 of new lease
financing for ATMs which are expiring in fiscal year 2007. See Note 8 to the
Consolidated Financial Statements. We have the following payment obligations
under current financing and leasing arrangements:
<TABLE>
<CAPTION>



                                                          Payments due by period

                                              Total        Less than 1 year       1 Year         2-9 Years
<S>                                             <C>                    <C>             <C>           <C>
Notes payable- related parties                $ 2,698,875            $ 36,000        $ 36,000      $ 2,626,875
Notes payable                                     162,179              56,179          53,000           53,000
Bank notes                                      1,672,500           1,175,625         496,875                -
Capital lease obligations                       1,057,360             354,077         304,837          398,446
Operating leases                                1,207,117             217,008         213,973          776,136

                                         ----------------------------------------------------------------------
Total contractual cash obligations            $ 6,798,031         $ 1,838,889     $ 1,104,685      $ 3,854,457
                                         ======================================================================
</TABLE>

                                       24
<PAGE>
Inflation

Impact of Inflation and Changing Prices. While subject to inflation, we were not
impacted by inflation during the past two fiscal years in any material respect.


Critical Accounting Policies

The fundamental objective of financial reporting is to provide useful
information that allows a reader to comprehend our business activities. To aid
in that understanding, management has identified our "critical accounting
policies". When more than one accounting principle, or the method of its
application, is generally accepted, management selects the principle or method
that is appropriate in the specific circumstances. Application of these
accounting principles requires our management to make estimates about the future
resolution of existing uncertainties. As a result, actual results could differ
from these estimates. Accordingly, these policies have the potential to have a
significant impact on our financial statements, either because of the
significance of the financial statement item to which they relate, or because
they require judgment and estimation due to the uncertainty involved in
measuring, at a specific point in time, events which are continuous in nature.
In preparing these financial statements, management has made its best estimates
and judgments of the amounts and disclosures included in the financial
statements, giving due regard to materiality. Except as separately discussed, we
do not believe there is a great likelihood that materially different amounts
would be reported under different conditions or by using different assumptions
pertaining to the accounting policies described below.

Revenue Recognition Policies. We recognize revenues as ATM card holders use ATMs
or as services are rendered to customers. In connection with recording revenue,
estimates and assumptions are required in determining the expected conversion of
the revenue streams to cash collected. The reserve estimation process requires
that management make assumptions based on historical results, future
expectations, the industry's economic and competitive environment, changes in
the creditworthiness of our customers, and other relevant factors. Revenues are
also adjusted with positive and negative processing accruals occurring in the
operation of the Company's ATM network in the ordinary course of business. It is
the policy of the Company to book as revenue all surcharge and interchange it

                                      25
<PAGE>
receives, whether for its owned ATMs or for those it manages. In the case of
managed ATMs, the Company then books as a commission all monies paid to the
owners of the ATMs. Where the Company provided only processing services through
it's wholly owned subsidiary, EFT Integration, the Company only records the fees
it charges to its customers as revenue. During consolidation of the financial
statements the Company eliminates the revenue earned by EFT Integration for the
processing of Company owned or managed ATMs. Surcharge fees are fees assessed
directly to the consumer utilizing the ATM terminals owned by the Company. The
surcharge fees assessed range from $1.50 to $2.50 based upon a cash withdrawal
transaction from the ATM terminals.

Interchange fees are fees assessed directly to the card issuer of the consumer.
The interchange fees are comprised of two fees: (1) an interchange fee ranging
from approximately $0.40 to $0.55 based upon each cash withdrawal transaction;
and (2) an interchange fee ranging from approximately $0.15 to $0.25 based upon
an account inquiry by the consumer.

Processing fees are earned by EFT Integration, a wholly owned subsidiary of
Nationwide Money Services, for the switching of transactions between the ATMs
and the cardholders bank(s). The processing fees earned by EFTI for the
switching of transactions for Nationwide Money Services, Inc.'s ATMs are
eliminated at time of consolidation. However, EFTI switches transactions for
companies other than Nationwide Money Services.

Management fees are charged to various companies or individuals that use the
services of Nationwide Money Services to operate their ATMs. These fees are for
services such as cash management, project management and account management.

Revenue from the sale of products developed by Axcess Technology Corporation is
recognized when the products are delivered and invoiced. Revenue and expenses
for software produced by Axcess Technology Corporation and sold to the Company's
subsidiaries is eliminated during consolidation of the Company's financial
statements.

Allowance of Uncollectible Accounts Receivable. Accounts receivable have been
reduced by an allowance for amounts that may become uncollectible in the future.
This estimated allowance is based primarily on management's evaluation of the
financial condition of the customer and historical experience.

Equipment. ATM equipment comprises a significant portion of our total assets.
Changes in technology or changes in our intended use of these assets may cause
the estimated period of use or the value of these assets to change. We perform
annual internal studies to confirm the appropriateness of estimated economic
useful lives for each category of current equipment. Estimates and assumptions
used in setting depreciable lives require both judgment and estimates.

Stock-based compensation - The Company applies Accounting Principles Board
("APB") Opinion No. 25, Accounting for Stock Issued to Employees, and Related
Interpretations, in accounting for stock options issued to employees. Under APB
No. 25, employee compensation cost is recognized when estimated fair value of
the underlying stock on date of the grant exceeds exercise price of the stock
option. For stock options and warrants issued to non-employees, the Company
applies SFAS No. 123, Accounting for Stock-Based Compensation, which requires
the recognition of compensation cost based upon the fair value of stock options
at the grant date using the Black-Scholes option pricing model.

In December 2004, the FASB issued SFAS No. 123 (R), "Share-Based Payment". SFAS
No. 123 (R) revises SFAS No. 123, "Accounting for Stock-Based Compensation" and
supersedes APB Opinion No. 25, "Accounting for Stock Issued to Employees". SFAS
No. 123 (R) focuses primarily on the accounting for transactions in which an
entity obtains employee services in share-based payment transactions. SFAS No.
123 (R) requires companies to recognize in the statement of operations the cost
of employee services received in exchange for awards of equity instruments based
on the grant-date fair value of those awards (with limited exceptions). SFAS No.
123 (R) is effective as of the first interim or annual reporting period that
begins after June 15, 2005 for non-small business issuers and after December 15,
2005 for small business issuers. Accordingly, the Company will adopt SFAS No.
123 (R) in its quarter ending March 31, 2006. The Company is currently
evaluating the provisions of SFAS No. 123 (R) and has not yet determined the
impact, if any, that SFAS No. 123 (R) will have on its financial statement
presentation or disclosures.

                                       26
<PAGE>

Impairment of Long-Lived Assets - The Company reviews long-lived assets a for
impairment under SFAS No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets." Long-lived assets to be held and used are reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. The carrying amount of a
long-lived asset is no recoverable if it exceeds the sum of the undiscounted
cash flows expected to result from the use and eventual disposition of the
asset. Long-lived assets to be disposed of are reported at the lower carrying
amount or fair value less cost to sell.


Recent Accounting Pronouncements

In January 2003, (as revised in December 2003) The Financial Accounting
Standards Board ("FASB") issued Interpretation No. 46, "Consolidation of
Variable Interest Entities", an interpretation of Accounting Research Bulletin
("ARB") No. 51, "Consolidated Financial Statements". Interpretation No. 46
addresses consolidation by business enterprises of variable interest entities,
which have one or both of the following characteristics: (i) the equity
investment at risk is not sufficient to permit the entity to finance its
activities without additional subordinated support from other parties, which is
provided through other interest that will absorb some or all of the expected
losses of the entity; (ii) the equity investors lack one or more of the
following essential characteristics of a controlling financial interest: the
direct or indirect ability to make decisions about the entities activities
through voting rights or similar rights; or the obligation to absorb the
expected losses of the entity if they occur, which makes it possible for the
entity to finance its activities; the right to receive the expected residual
returns of the entity if they occur, which is the compensation for the risk of
absorbing the expected losses.

Interpretation No. 46, as revised, also requires expanded disclosures by the
primary beneficiary (as defined) of a variable interest entity and by an
enterprise that holds a significant variable interest in a variable interest
entity but is not the primary beneficiary.

Interpretation No. 46, as revised, applies to small business issuers no later
than the end of the first reporting period that ends after December 15, 2004.
This effective date includes those entities to which Interpretation 46 had
previously been applied. However, prior to the required application of
Interpretation No. 46, a public entity that is a small business issuer shall
apply Interpretation 46 or this Interpretation to those entities that are
considered to be special-purpose entities no later than as of the end of the
first reporting period that ends after December 15, 2003

Interpretation No. 46 may be applied prospectively with a cumulative-effect
adjustment as of the date on which it is first applied or by restating
previously issued financial statements for one or more years with a
cumulative-effect adjustment as of the beginning of the first year restated.

The implementation of the provisions of Interpretation No. 46 is not expected to
have a significant effect on the Company's consolidated financial statement
presentation or disclosure.

In May 2003, the FASB issued SFAS No. 150, "Accounting For Certain Financial
Instruments with Characteristics of both Liabilities and Equity". SFAS No. 150
changes the accounting for certain financial instruments with characteristics of
both liabilities and equity that, under previous pronouncements, issuers could
account for as equity. The new accounting guidance contained in SFAS No. 150
requires that those instruments be classified as liabilities in the balance
sheet.

SFAS No. 150 affects the issuer's accounting for three types of freestanding
financial instruments. One type is mandatory redeemable shares, which the
issuing company is obligated to buy back in exchange for cash or other assets. A
second type includes put options and forward purchase contracts, which involve
instruments that do or may require the issuer to buy back some of its shares in
exchange for cash or other assets. The third type of instruments that are

                                       27
<PAGE>
liabilities under this Statement is obligations that can be settled with shares,
the monetary value of which is fixed, tied solely or predominantly to a variable
such as a market index, or varies inversely with the value of the issuers'
shares. SFAS No. 150 does not apply to features embedded in a financial
instrument that is not a derivative in its entirety.

Most of the provisions of SFAS No. 150 are consistent with the existing
definition of liabilities in FASB Concepts Statement No. 6, "Elements of
Financial Statements". The remaining provisions of this Statement are consistent
with the FASB's proposal to revise that definition to encompass certain
obligations that a reporting entity can or must settle by issuing its own
shares. This Statement shall be effective for financial instruments entered into
or modified after May 31, 2003 and otherwise shall be effective at the beginning
of the first interim period beginning after June 15, 2003, except for mandatory
redeemable financial instruments of a non-public entity, as to which the
effective date is for fiscal periods beginning after December 15, 2003.

In March 2004, the U.S. Securities and Exchange Commission's Office of the Chief
Accountant and the Division of Corporate Finance released Staff Accounting
bulletin ("SAB") No. 105, "Loan Commitments Accounted for as Derivative
Instruments". This bulletin contains specific guidance on the inputs to a
valuation-recognition model to measure loan commitments accounted for at fair
value, and requires that fair-value measurement include only differences between
the guaranteed interest rate in the loan commitment and market interest rate,
excluding any expected future cash flows related to the customer relationship or
loan servicing. In addition, SAB105 requires the disclosure of the accounting
policy for loan commitments, including methods and assumptions used to estimate
the fair value of loan commitments, and any associated hedging strategies. SAB
105 is effective for derivative instruments entered into subsequent to March 31,
2004 and should also be applied to existing instruments as appropriate. The
Company has not yet completed its evaluation of SAB 105, but does not anticipate
a material impact.

In December 2004, the FASB issued SFAS No. 123 (R), "Share-Based Payment". SFAS
No. 123 (R) revises SFAS No. 123, "Accounting for Stock-Based Compensation" and
supersedes APB Opinion No. 25, "Accounting for Stock Issued to Employees". SFAS
No. 123 (R) focuses primarily on the accounting for transactions in which an
entity obtains employee services in share-based payment transactions. SFAS No.
123 (R) requires companies to recognize in the statement of operations the cost
of employee services received in exchange for awards of equity instruments based
on the grant-date fair value of those awards (with limited exceptions). SFAS No.
123 (R) is effective as of the first interim or annual reporting period that
begins after June 15, 2005 for non-small business issuers and after December 15,
2005 for small business issuers. Accordingly, the Company will adopt SFAS No.
123 (R) in its quarter ending March 31, 2006. The Company is currently
evaluating the provisions of SFAS No. 123 (R) and has not yet determined the
impact, if any, that SFAS No. 123 (R) will have on its financial statement
presentation or disclosures.

In December 2004, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 153, " Exchanges of
Non-Monetary Assets, an Amendment of APB No. 29". This Statement amends APB
Opinion No. 29, "Accounting for Nonmonetary Transactions". Earlier guidance had
been based on the principle that exchanges of nonmonetary assets should be based
on the fair value of the assets exchanged and APB No. 29 included certain
exceptions to this principle. However, FASB 153 eliminated the specific
exceptions for nonmonetary exchanges with a general exception for all exchanges
of nonmonetary assets that do not have commercial and economic substance. A
nonmonetary exchange has commercial substance only if the future cash flows of
the entity are expected to change significantly as a result of the exchange.
This Statement is effective for nonmonetary exchanges occurring in fiscal
periods beginning after June 15, 2005. The implementation of this SFAS No. 153
is not expected to have a material impact on the Company's financial statement
presentation or its disclosures.

Management does not believe the adoption of these statements will have a
material effect on the Company's consolidated financial position or results of
operations.


Risk Factors

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

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

                                       28
<PAGE>

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

      o   Our ability to expand our ATM base and transaction processing
          business;

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

      o   Our ability to maintain our existing relationships with Food Lion and
          Kash and Karry;

      o   Our ability to keep our ATMs at other existing locations at reasonable
          rental rates and to place additional ATMs in preferred locations at
          reasonable rental rates;

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

      o   Our ability to maintain our ATMs and information systems technology
          without significant system failures or breakdowns;

      o   Our ability to develop new products and enhance existing products to
          be offered through ATMs, and our ability to successfully market these
          products;

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

      o   Our ability to retain senior management and other key personnel;

      o   Our ability to comply with mandated Triple DES configuration; and

      o   Changes in general economic conditions.


If any of these risk factors occur adversely to the Company they may have a
negative impact to our actual future results.

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


FACTORS AFFECTING THE COMPANY'S OPERATING RESULTS

The Company's business is subject to numerous factors affecting its operating
results. In addition to the risk factors discussed above, the Company's
operating results may be affected by:

We have a limited operating history which may not be an indicator of our future
results

As a result of our limited operating history, our plan for rapid growth, and the
increasingly competitive nature of the markets in which we operate, the
historical financial data is of limited value in evaluating its future revenue
and operating expenses. Our planned expense levels will be based in part on
expectations concerning future revenue, which is difficult to forecast

                                       29
<PAGE>
accurately based on current plans of expansion and growth. We may be unable to
adjust spending in a timely manner to compensate for any unexpected shortfall in
revenue. Further, general and administrative expenses may increase significantly
as we expand operations. To the extent that these expenses precede, or are not
rapidly followed by, a corresponding increase in revenue, our business,
operating results, and financial condition will suffer.


We are dependent upon a few key personnel and their loss may negatively impact
our results from operations

Our success depends upon the continued contributions of certain key personnel,
including, among others, Michael Dodak, our Chief Executive Officer, David Fann,
our President and David Surette, our Chief Financial Officer who may be
difficult to replace because of their extensive experience in their fields,
extensive market contacts and familiarity with our activities. While we believe
we have sufficient cross expertise, if any key management employee were to cease
employment, our operating results may suffer. Our future success also depends in
large part upon its ability to hire and retain additional highly skilled
managerial, operational and marketing personnel. Should we be unable to attract
and retain skilled personnel, our performance may suffer.

The termination of our contract with our major customer could negatively impact
our results of operations and may result in a significant impact to revenues

Our contract with a major customer (Food Lion) expired in September 2001. We
signed new contracts with Food Lion, and an affiliated company, Kash n Karry, in
November 2001. The new contracts included the sites then operating of
approximately 550, and included an additional 400 sites. The new contracts were
for a five-year period for both the existing sites and the new sites. During
fiscal year 2003, we renegotiated these contracts to extend the lives until
April 2011 and have in service approximately 696 ATM sites. The sites maintained
by Food Lion and Kash n Karry constitute approximately 22% of our total sites
and 33% of our total ongoing revenues. Historically, these sites have generated
average revenue per site in excess of other sites. If we were to lose the Food
Lion and Kash n Karry accounts, our revenues would be substantially affected.

The continued growth and acceptance of debit cards as a means of payment could
negatively impact our results of operations

The use of debit cards by consumers has been growing. Consumers use debit cards
to make purchases from merchants, with the amount of the purchase automatically
deducted from the consumers' checking accounts. An increasing number of
merchants are accepting debit cards as a method of payment, and are also
permitting consumers to use the debit cards to obtain cash. The increasing use
of debit cards to obtain cash may reduce the number of cash withdrawals from our
ATMs, and may adversely affect our revenues from surcharge fees. A continued
increased in the use and acceptance of debit cards could have a material adverse
effect on our business, results of operations and financial condition.

Other Factors

Any regulation or elimination of surcharge or interchange fees could have a
materially adverse impact on our results of operations

There have been various efforts by both consumer groups and various legislators
to eliminate surcharge fees, which comprise a large portion of our revenue. In
the event that surcharges are terminated, the revenue generated from cash
withdrawal transactions would be significantly reduced and would cause
irreparable harm to our results of operations. There have also been efforts by
various legislators to eliminate interchange fees. Although this would have a
negative immediate impact, we believe, although we cannot guarantee, that the
industry will respond by increasing surcharge fees to make up the loss in
interchange fees. In the event that the loss of interchange fees could not be
passed through via an increase in surcharge fees, the elimination of interchange
would severally impact our company.


                                       30
<PAGE>

Mergers, acquisitions and personnel changes at financial institutions and
electronic funds transfer networks and independent sales organizations may
adversely affect our business, financial condition and results of operations

Currently, the banking industry is consolidating, causing the number of
financial institutions and ATM networks to decline. This consolidation could
cause us to lose:

     o    current and potential customers;

     o    market share if the combined entity determines that it is more
          efficient to develop in-house products and services similar to ours or
          use our competitors' product and services; and

     o    revenue if the combined institution is able to negotiate a greater
          volume discount for, or discontinue the use of, our products and
          services.

For example, one of the larger customers of our electronic transaction
processing business, the STAR Network, has been purchased by one of our
competitors, Concord EFS. Although we have a multi-year processing contract with
STAR, we cannot presently predict the possible long-term impact of this
acquisition on our business with certainty. The loss of STAR as a processing
customer would have an adverse effect on our business

The ATM and electronic transaction processing industries are increasingly
competitive, which could adversely impact our results from operations and
financial condition.

The ATM business is and can be expected to remain highly competitive. While our
principal competition comes from national and regional banks, we also compete
with independent ATM companies. All of these competitors offer services similar
to or substantially the same as those offered by our company. Most of these
competitors are larger, more established and have greater financial and other
resources than our company. Such competition could prevent us from obtaining or
maintaining desirable locations for our machines or could cause us to reduce our
user fees generated by our ATMs or could cause our profits to decline.

The independent ATM business has become increasingly competitive since entities
other than banks have entered the market and relatively few barriers exist to
entry. We face intense competition from a number of companies. Further, we
expect that competition will intensify as the movement towards increasing
consolidation within the financial services industry continues. Many of our
competitors have significantly greater financial, technical and marketing
resources, greater name recognition and a larger installed customer base than we
do.

In the market for electronic transaction processing, the principal factors on
which we compete are price and service levels. The future growth of our revenues
in this market is dependent upon securing an increasing volume of transactions.
If we cannot control our transaction processing expenses, we may not remain
price competitive and our revenues will be adversely affected.

In addition to our current competitors, we expect substantial competition from
established and new companies. We cannot assure you that we will be able to
compete effectively against current and future competitors. Increased
competition could result in price reductions, reduced gross margins or loss of
market share.


If our computer network and data centers were to suffer a significant
interruption, our business and customer reputation could be adversely impacted
and result in a loss of customers

Our ability to provide reliable service largely depends on the efficient and
uninterrupted operations of our computer network systems and data centers. Any
significant interruptions could severely harm our business and reputation and
result in a loss of customers. Our systems and operations could be exposed to
damage or interruption from fire, natural disaster, power loss,

                                       31
<PAGE>
telecommunications failure, unauthorized entry and computer viruses. Although we
have taken steps to prevent a system failure, we cannot be certain that our
measures will be successful and that we will not experience system failures.
Further, our property and business interruption insurance may not be adequate to
compensate us for all losses or failures that may occur.

We may be unable to protect our intellectual property rights, which could have a
negative impact on our results of operations

Despite our efforts to protect our intellectual property rights, third parties
may infringe or misappropriate our intellectual property rights, or otherwise
independently develop substantially equivalent products and services. The loss
of intellectual property protection or the inability to secure or enforce
intellectual property protection could harm our business and ability to compete.
We rely on a combination of trademark and copyright laws, trade secret
protection and confidentiality and license agreements to protect our trademarks,
software and know-how. We have also applied for patent protection on some of the
features of our newer products. We may be required to spend significant
resources to protect our trade secrets and monitor and police our intellectual
property rights.

Third parties may assert infringement claims against us in the future. In
particular, there has been a substantial increase in the issuance of business
process patents for Internet-related business processes, which may have broad
implications for all participants in Internet commerce. Claims for infringement
of these patents are becoming an increasing source of litigation. If we become
subject to an infringement claim, we may be required to modify our products,
services and technologies or obtain a license to permit our continued use of
those rights. We may not be able to do either of these things in a timely manner
or upon reasonable terms and conditions. Failure to do so could seriously harm
our business and operating results. In addition, future litigation relating to
infringement claims could result in substantial costs to us and a diversion of
management resources. Adverse determinations in any litigation or proceeding
could also subject us to significant liabilities and could prevent us from using
some of our products, services or technologies.



ITEM 7. FINANCIAL STATEMENTS

Our financial statements required by this item are submitted as a separate
section of this Form 10-KSB, see the attached "Report of Independent Registered
Public Accounting Firm for the years ending December 31, 2004 and 2003".



ITEM 8.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE

On June 27, 2003, the Company, notified L.L. Bradford & Company, LLC
("Bradford"), its independent public accountants, that the Company was
terminating its services, effective as of that date. On June 27, 2003, the
Company engaged Weinberg & Company, P.A. as its principal independent
accountant. This decision to dismiss Bradford and engage Weinberg & Company,
P.A. was taken upon the unanimous approval of the Board of Directors of the
Registrant.

During the last two fiscal years ended December 31, 2002 and December 31, 2001
and through June 27, 2003, there were no disagreements between the Company and
Bradford on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure which, if not resolved to
the satisfaction of Bradford would have caused Bradford to make reference to the
matter in its reports on the Company's financial statements, and Bradford's
report on the Company's financial statements did not contain any other adverse

                                       32
<PAGE>
opinion, disclaimer of opinion, or modification or qualification of opinion.
During the last two most recent fiscal years ended December 31, 2002 and
December 31, 2001 and through June 27, 2003, there were no reportable events as
the term described in Item 304(a)(1)(iv) of Regulation S-B.

     During the two most recent fiscal years and through June 27, 2003, the
Company has not consulted with Weinberg & Company, P.A. regarding either:

     o    the application of accounting principles to any specified transaction,
          either completed or proposed, or the type of audit opinion that might
          be rendered on the Company's financial statements, and neither a
          written report was provided to the Company nor oral advice was
          provided that Weinberg & Company, P.A. concluded was an important
          factor considered by the Registrant in reaching a decision as to the
          accounting, auditing or financial reporting issue; or

     o    any matter that was either subject of disagreement or event, as
          defined in Item 304(a)(1)(iv)(A) of Regulation S-B and the related
          instruction to Item 304 of Regulation S-B, or a reportable event, as
          that term is explained in Item 304(a)(1)(iv)(A) of Regulation S-B.

     The Company has requested that Bradford furnish it with a letter addressed
to the Securities and Exchange Commission stating whether it agrees with the
above statements. A copy of such letter, dated June 30, 2003, was filed as
Exhibit 16.1 to the Company Form 8-K filed July 1, 2003.


Item 8A. CONTROLS AND PROCEDURES.

As of December 31, 2004, an evaluation was performed under the supervision and
with the participation of the Company's management, including the Chief
Executive Officer and the Chief Financial Officer, of the effectiveness of the
design and operation of the Company's disclosure controls and procedures. Based
on that evaluation, the Company's management, including the Chief Executive
Officer and the Chief Financial Officer, concluded that the Company's disclosure
controls and procedures were effective as of December 31, 2004. There have been
no significant changes in the Company's internal controls or in other factors
that could significantly affect internal controls subsequent to December 31,
2004.


Item 8B. OTHER INFORMATION.

None.


                                    PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE ISSUER


     The Company's executive officers, directors and key employees and their
ages and positions as of December 31, 2004 are as follows:

Name                   Age                 Positions
-------------          ---  -------------------------------------------
Michael Dodak           58        C.E.O. and Chairman
-------------          ---  -------------------------------------------
David Fann              50        President and Director
-------------          ---  -------------------------------------------
David Surette           45        C.F.O.

                                       33
<PAGE>
-------------          ---  -------------------------------------------
Robert Colabrese        49        Executive Vice-President of Sales
------------           ---  -------------------------------------------
George McQuain          49        CEO and COO of Nationwide Money
                                  Services, Inc.
------------           ---  -------------------------------------------
Donald Headlund         71        Director
------------           ---  -------------------------------------------
Lock Ireland            61        Director
------------           ---  -------------------------------------------
Robert Landis           45        Director
------------           ---  -------------------------------------------
Georg Hochwimmer        36        Director
------------           ---  -------------------------------------------
Robert Jansen           68        Director
------------           ---  -------------------------------------------


The following is a brief description of each officer and director listed above:

Michael J. Dodak, Chairman of the Board and Chief Executive Officer

Prior to joining the Company, Mr. Dodak was Chief Executive Officer of
Nationwide Money, an independent ATM network operator and services provider that
was sold by First Data Corporation in June 2001. Mr. Dodak joined NMS as a
controller in early 1996. He assumed the various duties of a controller
including the production of financial statements, budgets, and the development
of the NMS database. In June 1997 he was promoted to C.E.O. and assumed full P&L
responsibilities. Prior to joining Nationwide, Mr. Dodak founded and served as
chief financial officer to several companies including an alternative energy
company, a medical supply company, and a for profit chain of schools. Earlier,
he was a senior financial analyst for Litton Industries and served as regional
controller for Damon Corporation, a large provider of clinical lab services. He
has Bachelor of Arts and MBA degrees from the University of California Los
Angeles. Mr. Dodak is responsible for the day-to-day operations of the Company.

David A. Fann, President and Director

Prior to joining the Company in March 2002, Mr. Fann was the Chief Executive
Officer and Chairman of the Board of TeraGlobal, Inc., a publicly traded
company, from September 1998 through September 2000. He was president of
TechnoVision Communications, Inc., a subsidiary of TeraGlobal from November of
1995 to September 2000. Mr. Fann has also served as Vice President of Sales and
Marketing for Quadraplex, Inc., a video network company. He co-founded Totally
Automated Systems Communications, a Unix-based communications company, and acted
as Vice President of that company from January 1993 through January 1995. From
January 1987 through December 1992 he served as Operations Officer for Networks,
Inc. Mr. 'Fann's main area of responsibility will be the raising of additional
capital to fund both the internal growth and acquisition strategy.

David J. Surette, Chief Financial Officer

Prior to joining the Company, Mr. Surette was the Chief Financial Officer of
National Service Direct, Inc. (NSDI), a majority owned subsidiary of SR
Teleperformance, a French publicly traded corporation in the telemarketing
industry. He was the CFO for NSDI from September 1999 until he joined the
Company in March 2003. Mr. Surette also served as an interim CFO for North
American Telephone Network, LLC, a related company to NSDI, during this same
period. NSDI has filed for bankruptcy in mid 2004. Prior to working with NSDI,
he was a Controller for ILD Telecommunications, Inc., in the pre-paid calling
card division, from June 1998 to August 1999. From 1996 to 1998 Mr. Surette was
the CFO and Director of Publishing for High Mountain Press, Inc., a book and
magazine publisher in the CAD and high tech markets. He was CFO and General
Manager, from 1991 to 1996, for a magazine publisher called CommTek
Communications Corp., a company in the satellite dish industry. Mr. Surette was

                                       34
<PAGE>
a Supervising Senior Accountant with KPMG Peat Marwick from 1987 to 1991. He has
a Bachelor of Science degree in Accounting from the University of Massachusetts,
and an MBA degree from Babson College. Mr. Surette also has his CPA from the
State of Virginia. Mr. Surette is married and has two children. Mr. Surette is
responsible for: financing the operations of the Company and its subsidiaries;
financing the acquisitions and internal growth of the Company; strategic, legal
and risk analysis for the Company; SEC filings of the Company; as well as the
day-to-day accounting and financial reporting.

Robert Colabrese, Executive Vice President of Sales

Mr. Colabrese, with more than 20 years of industry experience, joined NMS in
1996 as Vice President of Operations and was instrumental in building the cost
effective ATM installation, management, and customer service process NMS
operates under today. In 1999 he founded and was named President of EFT
Integration, Inc. where he created an innovative, forward thinking, state of the
art processing platform from the ground up. Prior to joining NMS, Mr. Colabrese
served in various management positions supporting and developing ATM software
and technical services for Mellon Bank NA. Mr. Colabrese received his Associates
degree in Specialized Electronics Technology form Penn Technical Institute in
Pittsburgh, Pennsylvania. Mr. Colabrese is married and has three children.

George McQuain, CEO and COO of Nationwide Money Services, Inc. and EFT
Integration, Inc.


George A. McQuain is Chief Executive Officer for Nationwide Money Services, Inc
("NMS") and EFT Integration, Inc. At NMS and EFTI, George is responsible for
strategic planning, business plan execution and day-to-day operations. Prior to
his association with NMS, George served as President and Chief Executive Officer
of Ntercept Communications, where he decisively improved sales, marketing and
product implementation. Prior to Ntercept, George led First Union National
Bank's national lockbox operations. Prior to First Union, George was Chief
Operating Officer of QuestPoint, a subsidiary of CoreStates Financial
Corporation. CoreStates was acquired by First Union in May 1998. George also
played a key leadership role at Nationwide Remittance Centers ("NRC"). NRC was
an entrepreneurial start-up which grew to revenues of $20 million and was
purchased by CoreStates. During his career at NRC, George was head of sales,
head of client service and quality, and head of operations. While at NRC, George
is credited with successfully turning around operational productivity and
quality. George's career also includes time at Marriott Corporation, the United
States Treasury Department, and the Office of the President of the United
States. George received his MBA in Finance and Management from George Mason
University in Fairfax, Virginia.

Donald Headlund, Director

Don Headlund is the President of Cardservice International where he leads all
aspects of the company's finance, sales and marketing, technology and operations
activities. He also serves on the Company's board of directors. Headlund joined
Cardservice International in July 1991 as an internal management consultant.
Within a few months, he was appointed chief financial officer, a position he
held until May 2000, when Cardservice International Chairman and Chief Executive
Officer, Chuck Burtzloff, named Headlund president of the company. Prior to
joining Cardservice International, Headlund served as president, chief executive
officer and director of Malibu Savings Bank from 1988 until 1991. Before joining
Malibu Savings Bank, Headlund was president, director and chief executive
officer at Valley Federal Savings and Loan Association for 20 years. Headlund is
a former captain in the United States Air Force. He received a Bachelor of Arts
degree in finance from Occidental College in Los Angeles, California.

Lock Ireland, Director

Currently a consultant and Director with Resource Corporate Management, Inc.,
Mr. Ireland has over 30 years experience in the Banking industry. Prior to this
he was the President and CEO for Resource Corporate Management, Inc. (RCMI) from
1994 to 2002., RCMI is a company that promotes new products and services with

                                       35
<PAGE>
community banks via the Bankers' Banks across the United States. Mr. Ireland has
held numerous positions from Vice-President to CEO with the following banks:
Bankers Trust of South Carolina, 1st Performance Bank, Republic National Bank
and Resource Bancshares. His current affiliations include being a Board Member
of the Jacksonville Economic Company and previous Board Governor for the
Jacksonville Chamber of Commerce. Mr. Ireland brings many affiliations and much
experience in the banking and financial industries to the Company.

Robert Landis, Director

Robert Landis is currently the Chairman, Chief Financial Officer and Treasurer
of Comprehensive Care Corporation, a publicly traded company located in Tampa,
Florida. He has been with Comprehensive Care for over 5 years, working directly
with all operations, financial and SEC filings for the company. Prior to this
Mr. Landis was with Maxicare Health Plans, Inc., as its Treasurer from
1983-1998. Mr. Landis was with two Accounting firms from 1981-1983, the first
was Price Waterhouse and the second was Irwin Shapiro Accountancy Corp. Robert
brings strong financial, operational and SEC experience to the Company, and will
be part of the Audit Review Committee for the Company.

Georg Hochwimmer, Director

Dr. Hochwimmer is a business consultant and academic responsible for aiding in
the development of several companies throughout Europe. Since 1994, Dr.
Hochwimmer has been a senior consultant on several engineering and
organizational and development projects; such as the development of a machinery
equipment distribution company (Rothlehner Arbeitsbuehnen GmbH). As the managing
director of General Research GmbH, a global business consulting firm, Dr.
Hochwimmer also serves on the board of directors of Lokando AG, an e-learning
company; Prevero AG, a business intelligence company; and egomedical, a medical
technology company. In addition, Dr. Hochwimmer serves as CEO of supraMAT
technologies AG, a investment company with activities in nanotechnology and
microsystems technology. Widely published in international scientific
publications; Dr. Hochwimmer has earned advanced degrees in chemistry, machinery
engineering, computer sciences and polymer chemistry.

Robert Jansen, Director

Most recently, Mr. Jansen was President and CEO of LeDagio, Ltd., where he was
responsible for the growth and management of the corporation. From 1996-1998, he
was President and CEO of Cirrus information Management where his
responsibilities included developing individual consulting practice (Marketing,
Sales and Document Management). Mr. Jansen was the Regional V.P. of Oracle
Corporation where he managed the Southwestern Region Sales and Support effort
from 1992-1996. From 1986-1992, he was President and CEO of Omron Financial
Systems where he established and managed a new subsidiary of billion dollar
Japanese Electronics company (Kyoto, Japan). From 1981-1986, as President and
COO of Affiliated Computer Services, he managed 5 data centers. One of his
accomplishments in this time was a $60 million revenue growth. From 1977-1981,
he was V.P. of Sales for Diebold Corporation and from 1971-1977 he was Regional
Manager of Docutel Corporation. Mr. Jansen is also a Big Brother volunteer,
Board Member of the Visiting Nurse Association Foundation, Education is Freedom
Volunteer and a Member of the Northwood Club.

The Board of Directors has established an Audit Committee and a Compensation
Committee.

The Compensation Committee has met once in June 25, 2004. The function of the
Committee is to approve stock plans and option grants and review and make
recommendations to the Board of Directors regarding executive compensation and
benefits.

As of December 31, 2004, the Audit Committee consists of the following members:
Lock Ireland, Donald Headlund, Georg Hochwimmer and Robert Landis. Mr. Headlund
and Mr. Landis have been appointed to sit on the Audit Committee to serve as its

                                       36
<PAGE>
audit committee financial experts. Mr. Ireland has been appointed to sit on the
audit committee to serve as its chairman. The Audit Committee has met four times
in fiscal year 2004, and once on March 31, 2005, prior to filing this Annual
10KSB report. Mr. Headlund is not considered independent. Mr. Landis and Mr.
Ireland are considered independent and Mr. Landis is considered to be a
sophisticated financial expert. In March of 2004 Mr. Hochwimmer was appointed to
the Audit Committee and is considered independent. Responsibilities of the
Committee include (1) reviewing financial statements and consulting with the
independent auditors concerning the Company's financial statements, accounting
and financial policies, and internal controls, (2) reviewing the scope of the
independent auditors' activities and the fees of the independent auditors, and
(3) reviewing the independence of the auditors. All of the members of the Audit
Committee shall meet the independence standards established by the National
Association of Securities Dealers.

The total number of meetings of the Board of Directors during the fiscal year
ended December 31, 2004 was none. The number of unanimous consents for approvals
on Board matters was thirteen (13). Each of the incumbent directors attended
100% of the aggregate of (i) the meetings of the Board during the year and (ii)
the total number of meetings of all committees of the Board on which the
incumbent directors served.

During 2004, there were four non-employee directors and three employee
directors. No Directors were compensated in the fiscal year 2004. Each director
for year 2004 who is not an employee of the Company is entitled to receive a
director's fee of 100,000 options exercisable to purchase shares of Common Stock
under the Stock Option Plan disbursed incrementally at 50,000 Options upon
acceptance to the Board and an additional 50,000 after 6 months of service to
the Board as a Director and 50,000 additional Options for every year of service
thereafter. All non-employee directors are reimbursed for expenses incurred in
attending meetings of the Board of Directors and any committees thereof.
Directors serving on committees of the Board receive no additional compensation
for attending any committee meeting held in connection with a meeting of the
Board except where there are extraordinary expenses approved prior to the
meeting by the CEO or President.

Code of Ethics

The Company has adopted its Code of Ethics and Business Conduct for Officers,
Directors and Employees that applies to all of the officers, directors and
employees of the Company.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires the Company's executive officers and
directors and persons who own more than 10% of a registered class of the
Company's equity securities to file reports of their ownership thereof and
changes in that ownership with the Securities and Exchange Commission ("SEC")
and the National Association of Securities Dealers, Inc. Executive officers,
directors and greater than 10% stockholders are required by SEC regulations to
furnish the Company with copies of all such reports they file.

Based solely upon a review of Forms 3, 4 and 5, and amendments thereto,
furnished to the Company during fiscal year 2003, the Company is not aware of
any director, officer or beneficial owner of more than ten percent of the
Company's Common Stock that, during fiscal year 2003, failed to file on a timely
basis reports required by Section 16(a) of the Securities Exchange Act of 1934.

ITEM 10. EXECUTIVE COMPENSATION

The following table summarizes all compensation paid by us with respect to the
fiscal year ended December 31, 2004 for the Chief Executive Officer and all
other executive officers whose total cash compensation exceeds $100,000 in the
fiscal year ended December 31, 2004.


                                       37
<PAGE>
<TABLE>
c
                                            Annual Compensation         Long?Term Awards
Name and Principal Position        Year     Salary ($)      Bonus ($)   Securities Underlying Options

<S>                                  <C>        <C>           <C>           <C>     <C>
Michael Dodak                        2004       $275,000      $15,000       600,000 (1)
CEO and Chairman                     2003       $220,000      $50,000       750,000 (2)
                                     2002       $220,002                    350,000
                                     2001       $109,283                  2,822,250 (3)

David Fann                           2004       $200,000       $6,700       600,000 (1)
President and Secretary              2003       $200,000           --       750,000 (2)
                                     2002        $80,000           --       350,000

David Surette                        2004       $125,000      $13,500       300,000 (1)
CFO                                  2003       $120,000           --       477,500 (2) (4)
                                     2002             --           --            --

Robert Colabrese                     2004       $200,000 (5)   $7,000        300,000 (1)
Executive Vice President Sales       2003       $135,000           --        270,000 (2)
                                     2002       $120,478           --        200,000
                                     2001        $67,522                      25,000

George McQuain                       2004       $140,000      $14,500        300,000 (1)
CEO & COO of NMS                     2003       $130,000           --        270,000 (2)
                                     2002        $60,000           --        200,000 (4)

</TABLE>


     1) In 2004, the executive management was granted options based on certain
goals that would have to be met for fiscal year 2005 before they could be
vested.
     (2) In 2003, the executive management was granted options based on certain
goals that would have to be met for fiscal year 2004 before they could be
vested.
     (3) In 2001, Mr. Dodak was granted 1,500,000 stock options, which were
subsequently cancelled in 2002.
     (4) Includes 200,000 options granted at date of hire which vests over 3
years.
     (5) Combines commission payments of $65,000 during the year with salary of
$135,000.

Options/SARs Grants During Last Fiscal Year

     The following table provides information related to options granted to our
named executive officers during the fiscal year ended December 31, 2004.
<TABLE>
<CAPTION>


Name                      Number of Securities    % of Total            Exercise Price   Expiration
                          Underlying              Options Granted       Per Share        Date (3)
                          Options Granted         in Fiscal 2004 (2)

<S>       <C>                     <C>                    <C>                  <C>            <C>
Mike Dodak(1)                     600,000                11.06%              $0.26          12/1/2009
David Fann(1)                     600,000                11.06%              $0.26          12/1/2009
Robert Colabrese(1)               300,000                 5.53%              $0.26          12/1/2009
George McQuain(1)                 300,000                 5.53%              $0.26          12/1/2009
David Surette(1)                  300,000                 5.53%              $0.26          12/1/2009

</TABLE>
(1) The options granted will not vest until after certain fiscal 2005 goals have
been met.
(2) Based on a total of 5,423,000 options granted during the fiscal year ended
December 31, 2004.

(3) Options may terminate before their expiration date upon death, disability,
or termination of employment.

Aggregate Option Exercises in Last Fiscal Year and Fiscal Year End Option Values

                                       38
<PAGE>

         The following table sets forth, for each of the named executive
officers, information concerning the number of shares received during fiscal
2004 upon exercise of options and the aggregate dollar amount received from such
exercise, as well as the number and value of securities underlying unexercised
options held on December 31, 2004.

<TABLE>
<CAPTION>

                      Shares Acquired    Value                  Number of Securities               Value of In?The?Money
                      on Exercise (#)    Realized ($)(1)        Underlying Options                 Options at Year?End ($)(2)
                                                                at Year End (#)
                                                                Exercisable       Unexercisable       Exercisable      Unexercisable
<S>                                <C>              <C>            <C>                   <C>                 <C>                <C>
Name
Mike Dodak                       912,435         $ 328,477        1,012,500           687,500            $62,250             $75,750
David Fann                       912,434         $ 328,476        1,012,500           687,500            $62,250             $75,750
David Surette                     91,244          $ 32,848          427,500           350,000            $52,550             $44,500
Robert Colabrese                 364,974         $ 131,391          445,000           350,000            $38,025             $39,000
George McQuain                        --                --          420,000           350,000            $32,400             $39,000

</TABLE>
(1)  Based on the difference between the option exercise price and the fair
     market value of our common stock on the exercise date.

(2)  Based on the difference between the option exercise price and the closing
     sale price of $0.36 of our common stock as reported on the OTC Bulletin
     Board on December 31, 2004, the last trading day of our 2004 fiscal year.

Employment Agreements

The Company has the following employment contracts with the named executive
officers:

Michael Dodak has a new five year employment contract from June 30, 2004 to June
30, 2009, under Board and Mr. Dodak's approval. The agreement provides Mr. Dodak
with the following compensation: an annual salary of $250,000; which has been
increased to $275,000 once certain milestones were achieved, and can be raised
to $350,000 when other milestones are achieved; an annual bonus to be determined
and awarded by the Compensation Committee; and an 18 month severance agreement.
These amounts have been reported in the financial statements during the quarters
ended June 30, 2004 and September 30, 2004.

David Fann has a two year employment contract from April 29, 2002 to April 29,
2004, which has been extended for two additional years until April 29, 2006
under Board and Mr. Fann's approval. For performance as a director and officer,
the Company will compensate Mr. Fann with the following: a monthly salary of
$7,500 per month, which has been increased to $200,000 once certain milestones
were achieved and an annual bonus and stock options to be determined and awarded
by the Compensation Committee.

Robert Colabrese has a two year employment contract from July 1, 2003 to
December 31, 2005. For performance as an executive vice-president, the Company
will compensate Mr. Colabrese with the following: an annual salary of $135,000
and a commission plan based on certain goals of the Company.

                                       39
<PAGE>
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.


     The following table sets forth certain information regarding beneficial
ownership of our common stock as of March 15, 2005.

     o    by each person who is known by us to beneficially own more than 5% of
          our common stock;
     o    by each of our officers and directors; and
     o    by all of our officers and directors as a group.

<TABLE>
<CAPTION>

Name                                                                        Number          Percent(1)
                                                                  ------------------------------------
<S>                                                                   <C>                  <C>    <C>
Mike Dodak                                                            5,190,935            5.87%  (3)
David Fann                                                            4,776,384            5.40%  (4)
David Surette                                                           618,744            0.70%  (5)
Robert Colabrese                                                      1,260,774            1.42%  (6)
George McQuain                                                          420,000            0.47%  (7)
Don Headlund(2)                                                          40,000            0.05%  (8)
Lock Ireland                                                          1,025,035            1.16%  (9)
Robert Landis                                                           350,000            0.40%  (10)
Georg Hochwimmer                                                        150,000            0.17%  (11)
Robert Jansen                                                           100,000            0.11%  (12)

                                                                  ------------------------------------
All executive officers and directors as a group (10 persons)         13,931,872           15.74%
                                                                  ------------------------------------


Other 5% owners:
Barron Partners, LP                                                  16,641,400           18.81%  (13)
Rennaissance Capital Growth & Income Fund III, Inc.                  12,200,001           13.79%  (14)
Rennaissance U.S. Growth Investment Trust PLC                        12,200,001           13.79%  (15)
BFS U.S. Special Opportunities Trust PLC                             12,530,001           14.16%  (16)
Cardservice International, Inc.                                       7,056,461            7.97%  (17)

                                                                  ------------------------------------
                                                                     60,627,864           68.52%
                                                                  ------------------------------------
</TABLE>


(1)Based on 88,485,469 shares of common stock outstanding as of March 15, 2005.
(2)Does not include shares of common stock owned by Cardeservices International.
Donald Headlund is the President and an officer of Cardservices International.
Mr. Headlund owns 600 shares of First Data Corporation, which is 100% owner of
Cardservice International. Mr. Headlund owns approximately .0001% of the
outstanding shares of common stock of First Data Corporation.
Of the number of shares shown above the following lists the nature and rights to
acquire common stock with in sixty days of March 10, 2005:
(3)included are 4,178,435 common shares, 262,500 stock purchase options
exercisable at $0.18 per share and 750,000 exercisable at $0.34 per share
(4) included are 3,763,884 common shares, 262,500 stock purchase options
exercisable at $0.18 per share and 750,000 exercisable at $0.34 per share
(5) included are 191,244 common shares, 150,000 stock purchase options
exercisable at $0.07 per share and 277,500 stock purchase options exercisable at
$0.34 per share
(6) included are 815,774 common shares, 25,000 stock purchase options
exercisable at $0.135, 150,000 stock options exercisable at $0.18 and 270,000
stock options exercisable at $0.34
(7) included are 150,000 stock options exercisable at $0.18 and 270,000 stock
purchase options exercisable at $0.34
(8) included are 40,000 common shares
(9)included are 765,035 common shares, 100,000 stock options exercisable at
$0.22; 50,000 stock options exercisable at $0.50 and 45,000 stock purchase
warrants exercisable at $0.35; 30,000 stock purchase warrants exercisable at
$0.50; 30,000 stock purchase warrants exercisable at $1.00
(10) included are 100,000 common shares, 100,000 stock options exercisable at
$0.22; 50,000 stock options exercisable at $0.50 and 100,000 stock purchase
warrants exercisable at $0.10
(11) included are 100,000 stock options exercisable at $0.33; 50,000 stock
options exercisable at $0.50
(12) included are 100,000 stock options exercisable at $0.63

                                       40
<PAGE>
(13)included are 4,641,400 common shares and 12,000,000 stock purchase warrants
exercisable at prices ranging from $0.35 to $1.00
(14)included are 4,766,667 common shares and 7,433,334 stock purchase warrants
exercisable at prices ranging from $0.35 to $1.00
(15)included are 4,766,667 common shares and 7,5433,334 stock purchase warrants
exercisable at prices ranging from $0.35 to $1.00
(16)included are 4,766,667 common shares and 7,763,334 stock purchase warrants
exercisable at prices ranging from $0.35 to $1.00
(17) included are 7,056,461 common shares


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

In May 2003, the Company issued 600,000 shares of its common stock to Michael
Dodak, a stockholder, officer, and director of the Company, through a Private
Placement Offering in an amount of $30,000.

In June 2003, the Company issued 1,000,000 shares of its common stock to David
Fann, a stockholder, officer, and director of the Company, through a Private
Placement Offering in an amount of $50,000 offsetting an equal amount of debt
currently owed to the Company.
In June 2003, the Company issued 400,000 shares of its common stock to Robert
Colabrese, a stockholder, and officer of the Company, through a Private
Placement Offering in an amount of $20,000.

In June 2003, the Company issued 100,000 shares of its common stock to David
Surette, a stockholder, and officer of the Company, through a Private Placement
Offering in an amount of $5,000.

In June 2003, the Company issued 100,000 shares of its common stock to Robert
Landis, a stockholder and director of the Company, through a Private Placement
Offering in an amount of $5,000.

In June 2003, the Company issued 400,000 shares of its common stock to Lock
Ireland, a stockholder and director of the Company, through a Private Placement
Offering in an amount of $20,000.

In July 2003, the Company issued 400,000 shares of its common stock to Michael
Dodak, a stockholder, officer, and director of the Company, through a Private
Placement Offering in an amount of $20,000.

In February 2004, we issued 912,435 shares of common stock to Michael Dodak, a
stockholder, officer, and director of the Company, through exercise of 1,000,000
Private Placement Offering Warrants at $0.10 per share and exercised as
cashless.

In February 2004, we issued 912,435 shares of common stock to David Fann, a
stockholder, officer, and director of the Company, through exercise of 1,000,000
Private Placement Offering Warrants (offsetting an equal amount of debt
currently owed by our company) at $0.10 per share and exercised as cashless..

In February 2004, we issued 364,974 shares of common stock to Robert Colabrese,
a stockholder, and officer of the Company, through exercise of 400,000 Private
Placement Offering Warrants at $0.10 per share and exercised as cashless.

In February 2004, we issued 91,244 shares of common stock to David Surette, a
stockholder, and officer of the Company, through exercise of 100,000 Private
Placement Offering Warrants at $0.10 per share and exercised as cashless.

In February 2004, we issued 365,035 shares of common stock to Lock Ireland, a
stockholder and director of the Company, through exercise of 400,000 Private
Placement Offering Warrants at $0.10 per share and exercised as cashless.

                                       41
<PAGE>
In March 2004, we issued 10,000 shares of common stock to Lock Ireland, a
stockholder and director of the Company, through exercise of 10,000 Private
Placement Offering Warrants at $0.35 per share.

In March 2004, we issued 700,000 shares of common stock to BFS US Special
Opportunities Trust PLC, a stockholder and beneficial owner of the Company,
through exercise of Private Placement Offering Warrants at $0.35 per share

In March 2004, we issued 700,000 shares of common stock to Renaissance Capital
Growth & Income Fund III, a stockholder and beneficial owner of the Company,
through exercise of Private Placement Offering Warrants at $0.35 per share

In March 2004, we issued 700,000 shares of common stock to Renaissance US Growth
Investment Trust PLC, a stockholder and beneficial owner of the Company, through
exercise of Private Placement Offering Warrants at $0.35 per share

In February 2004, we issued 2,666,667 shares of common stock to BFS US Special
Opportunities Trust PLC, a stockholder and beneficial owner of the Company,
through a Private Placement Offering for $666,666.75 and we issued 5,333,334
Warrants exercisable from $0.35 to $1.00.

In February 2004, we issued 2,666,667 shares of common stock to Renaissance
Capital Growth & Income Fund III, a stockholder and beneficial owner of the
Company, through a Private Placement Offering for $666,666.75 and we issued
5,333,334 Warrants exercisable from $0.35 to $1.00.

In February 2004, we issued 2,666,667 shares of common stock to Renaissance US
Growth Investment Trust PLC, a stockholder and beneficial owner of the Company,
through a Private Placement Offering for $666,666.75 and we issued 5,333,334
Warrants exercisable from $0.35 to $1.00.

In February 2004, we issued 6,000,000 shares of common stock to Baron Partners,
LP, a stockholder and beneficial owner of the Company, through a Private
Placement Offering for $1,500,000 and we issued 12,000,000 Warrants exercisable
from $0.35 to $1.00.

In September 2004, we issued 15,000 warrants to Lock Ireland, a stockholder and
director of the Company, as part of a debenture with an exercise price of $0.35
per share.

In September 2004, we issued 330,000 warrants to BFS US Special Opportunities
Trust PLC, a stockholder and beneficial owner of the Company, as part of a
debenture with an exercise price of $0.35 per share.

As of December 31, 2004, we had an unsecured promissory note in the amount of
$192,966 outstanding payable to Robert Mehlman, a stockholder of our company.
The note bears interest in the amount of 11% and is due in June 2013


ITEM 13. EXHIBITS

(a) INDEX TO EXHIBITS

                                       42
<PAGE>


Exhibit
Number      Exhibit Description             Herewith
------   -----------------------------------------------------------------------

3.1       Articles of Incorporation - Restated and Amended May 30,
          2001(Incorporated by reference to form 10KSB filed with the SEC on
          March 31, 2003)

3.2       ByLaws of Global Axcess Corp. - As Amended(Incorporated by reference
          to form 10KSB filed with the SEC on March 31, 2003)


10.1      Agreement entered into with Food Lion, LLC and Nationwide Money
          Services, Inc dated October 5, 2001 (Incorporated by reference to form
          10KSB filed with the SEC on April 16, 2002)

16.1      Letter from Brown Armstrong Randall Raeyes Paulding & McCown
          Accountancy Corporation, to the SEC noting agreement with the
          disclosures in Item 4 (incorporated by reference form 8-K current
          report filed with the SEC on August 6, 2001)

21.1      List of Subsidiaries:

              Nationwide Money Services Inc., a Nevada corporation
              EFT Integration Corporation, a Florida corporation
              Axcess Technology Corporation, a Nevada corporation
              Axcess Technology Corporation, Pty Ltd a South African corporation
              Electronic Payment & Transfer Corp, a Nevada corporation



31.1      Certification of the Chief Executive Officer of Global Axcess Corp.
          pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2      Certification of the Chief Financial Officer of Global Axcess Corp.
          pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.


32.1      Certification of the Chief Executive Officer of Global Axcess, Inc.
          Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906
          of the Sarbanes-Oxley Act of 2002.

32.2      Certification of the Chief Financial Officer of Global Axcess, Inc.,
          Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906
          of the Sarbanes-Oxley Act of 2002.

99.3      Code of Ethics and Business Conduct of Officers, Directors and
          Employees of Global Axcess Corp. (Incorporated by reference to form
          10KSB filed with the SEC on March 31, 2003)


ITEM 14. PRINCIPAL ACCOUNTANT'S FEES AND SERVICES

During the fiscal years ended December 31, 2004, and 2003, Weinberg and Co.
served as our auditors.

Audit Fees. The aggregate fees billed by our auditors, for professional services
rendered for the audit of the Company's annual financial statements for the
years ended December 31, 2004 and 2003, and for the reviews of the financial
statements included in the Company's Quarterly Reports on Form 10-QSB during the
fiscal years were $111,882 and $87,149, respectively.

Audit Related Fees. For the years ended December 31, 2004 and 2003, the Company
incurred fees to auditors of $0 and $0 for audit related fees, respectively.

All Other Fees. The aggregate fees billed by auditors for services rendered to
the Company, other than the services covered in "Audit Fees" and for the fiscal
years ended December 31, 2004 and 2003 were $7,234 and $2,500, which fees
primarily related to the Company's tax returns.

The Board of Directors has considered whether the provision of non-audit
services is compatible with maintaining the principal accountant's independence.


                                       43
<PAGE>



                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Issuer has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                              GLOBAL AXCESS CORP.

                              By: /s/ MICHAEL DODAK
                                 --------------------
                              Michael Dodak
                              Chief Executive Officer

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the Issuer
and in the capacities indicated on the 30th day of March, 2005.

Signature                  Title
------------------------   ---------------------------
/s/Michael Dodak
----------------
Michael Dodak              CEO, Chairman

/s/David Fann
-------------
David Fann                 President,Secretary and Director

/S/ Don Headlund
----------------
Don Headlund               Director

/S/ Lock Ireland
----------------
Lock Ireland               Director

/S/ Robert Landis
-----------------
Robert Landis              Director

/S/ Georg Hochwimmer
---------------------
Georg Hochwimmer           Director


-----------------
Robert Jansen              Director

/S/ David J. Surette
--------------------
David J. Surette           Chief Financial Officer


                                       44
<PAGE>
                       GLOBAL AXCESS CORP.AND SUBSIDIARIES
                        CONSOLIDATED FINANCIAL STATEMENTS

                                TABLE OF CONTENTS


                                                                        PAGE NO.

Report of Independent Registered Public Accounting Firm                        1

Financial statements

     Consolidated balance sheet as of December 31, 2004                        2

     Consolidated statements of income for the years ended
              December 31, 2004 and 2003                                       3

     Consolidated statements of stockholders' equity
              for the years ended December 31, 2004 and 2003                   4

     Consolidated statements of cash flows for the years ended
              December 31, 2004 and 2003                                       7

     Notes to consolidated financial statements
                as of December 31, 2004                                        9







<PAGE>
             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Board of Directors
Global Axcess Corp and Subsidiaries
Ponte Vedra Beach, Florida

We have audited the  accompanying  consolidated  balance  sheet of Global Axcess
Corp and  Subsidiaries  (the  "Company") as of December 31, 2004 and the related
consolidated statements of income,  stockholders' equity, and cash flows for the
years ended December 31, 2004 and 2003. 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 the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and  perform  the  audits to  obtain  reasonable  assurance  about  whether  the
consolidated  financial statements are free of material  misstatement.  An audit
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures in the  consolidated  financial  statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall consolidated  financial statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

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

March 10, 2005

/s/ Weinberg & Company, P.A.
    ------------------------
    Weinberg & Company, P.A.

                                      F-2

<PAGE>
                       GLOBAL AXCESS CORP AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 2004
<TABLE>
<CAPTION>
Current assets
<S>                                                                                           <C>
        Cash                                                                           $        496,823
        Automated teller machine vault cash                                                     455,736
        Accounts receivable, net                                                              1,244,810
        Note receivable                                                                          99,895
        Inventory                                                                                25,979
        Deferred tax asset - current                                                            216,017
        Prepaid expense and other current assets                                                211,251
                                                                                       -----------------
                Total current assets                                                          2,750,511

Fixed assets, net                                                                             4,945,588

Other assets
        Merchant contracts                                                                    8,632,896
        Intangible assets, net                                                                4,023,034
        Deferred tax asset - long term                                                          322,279
        Other assets                                                                            160,867

                                                                                       -----------------
Total assets                                                                           $     20,835,175
                                                                                       =================

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
        Accounts payable and accrued liabilities                                              1,871,181
        Automated teller machine vault cash payable                                             455,736
        Notes payable-related parties  - curent portion                                          16,487
        Notes payable - current portion                                                          53,179
        Bank notes - current portion                                                          1,125,000
        Capital lease obligations - current portion                                             328,162
                                                                                       -----------------
                Total current liabilities                                                     3,849,745

Long-term liabilities
        Notes payable-related parties - long-term portion                                     2,357,931
        Notes payable - long-term portion                                                       100,000
        Bank notes - long-term portion                                                          468,750
        Capital lease obligations - long-term portion                                           840,274

                                                                                       -----------------
Total liabilities                                                                             7,616,700
                                                                                       -----------------

Commitments and contingencies                                                                         -

Stockholders' equity
        Preferred stock; $0.001 par value; 25,000,000 shares
           authorized, no shares issued and outstanding                                               -
        Common stock; $0.001 par value; 225,000,000 shares
           authorized, 87,896,727 shares issued and
           shares outstanding                                                                    87,897
        Additional paid-in capital                                                           18,204,203
        Accumulated deficit                                                                  (5,073,625)
                                                                                       -----------------
                Total stockholders' equity                                                   13,218,475

                                                                                       -----------------
Total liabilities and stockholders' equity                                             $     20,835,175
                                                                                       =================
</TABLE>
          See Accompanying Notes to Consolidated Financial Statements

                                      F-3
<PAGE>
                       GLOBAL AXCESS CORP AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                        For the year ended                For the year ended
                                                         December 31, 2004                 December 31, 2003

<S>                                                           <C>                               <C>
Revenues                                             $          13,907,950             $          10,201,765

Cost of revenues                                                 8,204,890                         6,377,846

                                                     ----------------------            ----------------------
          Gross profit                                           5,703,060                         3,823,919
                                                     ----------------------            ----------------------

Operating expenses
          Depreciation and amortization                          1,159,561                           790,795
          Selling, general and administrative                    4,002,494                         2,874,999
                                                     ----------------------            ----------------------
                    Total operating expenses                     5,162,055                         3,665,794
                                                     ----------------------            ----------------------

          Income from operations                                   541,005                           158,125
                                                     ----------------------            ----------------------

Other income (expense)
          Settlement income                                        304,000                                 -
          Foregiveness of debt                                           -                           261,023
          Other expenses                                           (55,000)                           (1,200)
          Interest expense                                        (188,411)                         (108,082)
                                                     ----------------------            ----------------------
                    Total other income                              60,589                           151,741
                                                     ----------------------            ----------------------

Income before provision for income taxes                           601,594                           309,866

Federal income tax expense                                               -                                 -

Provision for income tax benefit                                   538,295                                 -

                                                     ----------------------            ----------------------
Net income                                           $           1,139,889             $             309,866
                                                     ======================            ======================

Basic income per common share                        $               0.015             $               0.009

Diluted income per common share                      $               0.014             $               0.004
Basic weighted average
          common shares outstanding                             78,116,293                        35,163,217
Fully diluted weighted average
          common shares outstanding                             82,445,916                        72,572,835
</TABLE>
           See Accompanying Notes to Consolidated Financial Statements


                                      F-4
<PAGE>
                       GLOBAL AXCESS CORP AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
<TABLE>
<CAPTION>
                                                                                           Prepaid
                                                                                           Consulting                       Total
                                       Common Stock           Additional      Common Stock Services Paid in Accumulated Stockholders
                                       Shares         Amount  Paid-in Capital Payable      Common Stock     Deficit       Equity
                                       ------------ --------  --------------- ------------ ---------------- ----------- ------------
<S>               <C> <C>              <C>          <C>       <C>             <C>          <C>             <C>           <C>
Balance, December 31, 2002             23,528,148   $ 23,527  $ 8,305,223     $      -     $  (17,500)     $(6,523,611)  $ 1,787,639
Cancellation of shares in March 2003,
previously issued for an aqcuisition     (655,000)      (655)         655            -              -                -             -

Shares on administrative hold and
outstanding                             1,000,000      1,000       (1,000)           -              -                -             -

Cancellation of related party debt
May 2003                                                           45,000            -              -                -        45,000

Issuance of common stock in June
2003 in exchange of related party
debt cancellation                       1,000,000      1,000       49,000                                                     50,000

Issuance of common stock in June
2003 related to Private Placement
1 at $0.05 per share                    8,110,000      8,110      385,734            -              -                -       393,844

Issuance of common stock in July
2003 related to Private Placement
1 at $0.05 per share                    4,100,000      4,100      185,011            -              -                -       189,111

Issuance of common stock in July
2003 for finders fee relating to
Private Placement 1                       385,000        385         (385)           -              -                -             -

Cacellation of related party debt
September 2003                                                      6,295                                                      6,295

Issuance of common stock in
September 2003 for finders fee
relating to Private Placement 1            70,000         70          (70)           -              -                -             -

Purchase of Docutel contract
in October, 2003                          750,000        750      424,734            -              -                -       425,484

Issuance of common stock in
November 2003 related to Private
Placement 2 at $0.25 per share          1,430,000      1,430      341,070            -              -                -       342,500

Issuance of common stock in
December 2003 related to Private
Placement 2 at $0.25 per share          6,550,000      6,550    1,500,802            -              -                -     1,507,352

Issuance of common stock in
December 2003 on exercise of employee
stock options, $0.135 per share             4,500          5          628            -              -                -           633

Issuance of common stock in
December 2003 on exercise of employee
stock options, $0.18 per share             10,000         10        1,790            -              -                -         1,800

Current year reclassificaiton of
prepaid consulting services into
accounts receivable                             -          -            -            -         17,500                -        17,500

Issuance of Stock Options in
December 2003 based upon fair
value model                                                        12,675                                                     12,675

Funds received on December 31, 2003
shares have not been issued                     -          -            -       32,500              -                -        32,500

Net income                                      -          -            -            -              -          309,866       309,866
                                      ----------------------------------------------------------------------------------------------
Balance, December 31, 2003             46,282,648     46,283   11,257,161       32,500              -       (6,213,514)    5,122,430
</TABLE>
           See Accompanying Notes to Consolidated Financial Statements

                                      F-5
<PAGE>
                       GLOBAL AXCESS CORP AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY- CONTINUED
                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
<TABLE>
<CAPTION>
Issuance of common stock in
January 2004 related to Private
<S>       <C>  <C>                      <C>            <C>        <C>          <C>                           <C>
Placement 2 at $0.25 per share          2,140,000      2,140      520,360      (32,500)             -        490,000

Issuance of common stock in
January 2004 related to Private
Placement 3 at $0.25 per share         14,000,000     14,000    3,486,000            -              -      3,500,000

Issuance of common stock in
January 2004 related to Reg S
Offering at $0.25 per share             4,408,126      4,408    1,035,092            -              -      1,039,500

Stock Warrants from PPM 1 offered
in 2003 excercised on cashless
provision in February 2004             11,941,051     11,941      (11,941)           -              -              -

Stock Warrants from debt cancellation
in 2003 excercised on cashless
provision in February 2004                912,434        912         (912)           -              -              -

Stock Warrants excercised from reset
excercised at $0.10 in February 2004      429,550        430       42,525            -              -         42,955

Stock Warrants from prior years
issuances excercised at $0.50 per
share in February 2004                    166,666        167       83,166            -              -         83,333

Issuance of common stock in
January 2004 related to warrant
exercise and other issuance per share     234,963        235       14,920            -              -         15,155

Issuance of common stock in April 2004
related to warrant exercise at $0.35
per common share                        7,526,789      7,526    1,989,598                                  1,997,124

Shares returned and cancelled from
settlement                               (380,000)      (380)    (303,620)                                  (304,000)

Warrants issued with debt                                          68,549                                     68,549

Issuance of common stock in October
2004 on exercise of employee stock
options, $0.07 per share                   12,500         13          862            -              -            875

Issuance of common stock in December
2004 for consulting services               20,000         20        5,780            -              -          5,800

Issuance of common stock in October
2004 on exercise of employee stock
options, $0.07 per share                  200,000        200       19,800            -              -         20,000

Issuance of common stock in December
2004 on exercise of employee stock
options, $0.135 per share                   2,000          2          268            -              -            270

Warrants issued for consulting services                             9,094                                      9,094

Prepaid consulting services for
capital raise                                                     (12,500)                                   (12,500)

Net Income for the year ended 12/31/04                                                      1,139,889      1,139,889

                                       -----------------------------------------------------------------------------
Balance, December 31, 2004             87,896,727   $ 87,897  $18,204,203         $  -    $(5,073,625)  $ 13,218,475
                                       =============================================================================
</TABLE>

           See Accompanying Notes to Consolidated Financial Statements

                                      F-6
<PAGE>
                       GLOBAL AXCESS CORP AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                For the year ended               For the year ended
                                                                 December 31, 2004                December 31, 2003

Cash flows from operating activities:
<S>                                                                       <C>                                <C>
     Net income                                               $             1,139,889          $               309,866
     Adjustments to reconcile net income to net
      cash provided by operating activities:
       Stock based compensation                                                     -                           12,675
       Depreciation and amortization                                        1,159,561                          790,795
       Deferred tax asset                                                    (538,296)                               -
       Settlement income/Cancellation of debt                                       -                         (261,023)
     Changes in operating assets and liabilities:
       Change in automated teller machine vault cash                         (157,031)                         (35,002)
       Change in accounts receivable                                         (794,134)                        (169,082)
       Change in inventory                                                    (25,979)                               -
       Change in prepaid expenses and other current assets                    (94,159)                         (29,251)
       Change in other assets                                                (138,886)                          20,204
       Change in accounts payable and accrued liabilities                   1,087,855                         (325,264)
       Change in automated teller machine vault cash payable                  157,031                           35,002
       Change in due to related parties                                             -                         (161,152)
                                                              ------------------------         ------------------------
          Net cash provided by operating activities                         1,795,851                          187,768
                                                              ------------------------         ------------------------

Cash flows from investing activities:
     Loans to others                                                          (99,895)                               -
     Purchase of fixed assets                                              (2,845,167)                        (537,904)
     Payment for business acquisition                                     (10,719,398)                               -
                                                              ------------------------         ------------------------
          Net cash used in investing activities                           (13,664,460)                        (537,904)
                                                              ------------------------         ------------------------

Cash flows from financing activities:
     Proceeds from issuance of common stock                                 6,956,156                        2,467,971
     Proceeds from the issuance of bank loans                               1,750,000                                -
     Proceeds form borrowing on notes payable - related parties             2,250,000                                -
     Proceeds from notes payable                                              177,807                                -
     Principal repayments on bank loans                                      (156,250)                               -
     Principal payments on notes payable                                      (24,628)                         (31,583)
     Principal payments on notes payable - related parties                   (238,673)                        (130,019)
     Principal payments on capital lease obligations                         (181,059)                        (240,722)
                                                              ------------------------         ------------------------
          Net cash provided by financing activities                        10,533,353                        2,065,647
                                                              ------------------------         ------------------------

(Decrease)/increase in cash                                                (1,335,256)                       1,715,511

Cash, beginning of year                                                     1,832,079                          116,568

                                                              ------------------------         ------------------------
Cash, end of year                                             $               496,823          $             1,832,079
                                                              ========================         ========================

Supplemental disclosure of cash flow information:
     Cash paid for income taxes                               $                     -          $                     -
                                                              ------------------------         ------------------------
     Cash paid for interest                                   $               188,411          $                98,082
                                                              ========================         ========================
</TABLE>
           See Accompanying Notes to Consolidated Financial Statements

                                      F-7
<PAGE>
                       GLOBAL AXCESS CORP AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                             For the year ended       For the year ended
                                                                             December 31, 2004        December 31, 2003

Cancellation of 655,000 shares of common stock
<S>                                                                             <C>                        <C>
     previously issued                                                          $      -                   $    655

Debt cancellation of notes payable related parties                              $      -                   $243,981

Debt cancellation of notes payable                                              $      -                   $ 17,042

Issuance of 750,000 shares of common stock for the purchase of
     Docutel contract for clearinghouse services                                $      -                   $425,484

Issuance of 1,000,000 shares of common stock related to
     exchange of related party debt                                             $      -                   $ 50,000

Cancellation of related party debt with a grant of
     1,000,000 warrants exercisable at $0.10                                    $      -                   $ 45,000

Issuance of 455,000 shares of common stock related to finder's
     fee for acquisition of common stock                                        $      -                   $ 22,750

Debt cancellation of related party debt of principal shareholder                $      -                   $  6,295

Stock Warrants from PPM 1 offered in 2003
     excercised on cashless provision in February 2004                          $(11,941)                  $      -

Stock Warrants from debt cancellation in 2003
     excercised on cashless provision in February 2004                          $   (912)                  $      -

Stock Warrants from reset offered in 2003
     excercised on cashless provision in February 2004                          $ 42,955                   $      -

Warrants issued with debt during September 2004, recorded as a discount         $ 68,549                   $      -
</TABLE>
          See Accompanying Notes to Consolidated Financial Statements

                                      F-8
<PAGE>
                       GLOBAL AXCESS CORP AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2004

1.   DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT POLICIES

     Description  of business - Global  Axcess  Corp.,  through its wholly owned
     subsidiaries, is an automated teller machine ("ATM") network and processing
     consolidator  that plans to expand  through the  strategic  acquisition  of
     profitable  ATM  businesses,  internal  growth and,  deployment of enhanced
     non-banking ATM consumer products worldwide.

     Global  Axcess Corp  (referred to as the  "Company")  was  incorporated  in
     Nevada on May 2, 1984 under the name of Supermarket Video, Inc. The Company
     underwent several name changes until June 2001, when it changed its name to
     Global Axcess Corp.  Global Axcess Corp is a holding company which conducts
     all  of  its  operations  through  its  wholly  owned   subsidiaries.   The
     subsidiaries  are Nationwide Money Services,  Inc., EFT Integration,  Inc.,
     Axcess Technology Corp., and Electronic Payment & transfer Corp.

     On October 12, 2003,  the Company  started  Axcess  Technology  Corporation
     ("ATC") to develop  software  products  to be sold for ATM  management  and
     transaction  processing.  They added an office in South Africa to help with
     the development ("ATCSA").

     On October 24, 2003,  the Company  started  Electronic  Payment & Transfer,
     Corp. to continue the  development of card based products  initiated  under
     the Company's  subsidiaries.  These products  include payroll cards,  debit
     cards and management of a purchased  contract for the Community  Technology
     Network  Program  (CTNP).  The CTNP  program  was  developed  by  Worldwide
     Communications   Group,  Inc.  to  assist  housing  authorities  and  their
     residents with registration, technology and other benefits. The CTNP's main
     focus is assisting the U.S. Housing and Urban  Development  Department with
     communications and registration of the housing residents.  The contract was
     purchased on October 8, 2003 from Docutel,  Corp. for 750,000 shares of the
     Company's  common stock and 500,000 stock options  exercisable  at the then
     current market price of $0.35 per share.

     During  December  2004 the Company has  initiated  registration  of another
     subsidiary in South Africa,  called Cash Axcess Corp.  The Company  started
     this operation to provide ATM services in South Africa.

     Principles of consolidation - The consolidated financial statements include
     the  accounts  of  the  Company  and  its  subsidiaries.   All  significant
     intercompany balances and transactions have been eliminated.

     Cash  concentration  - The  Company  holds  most of its  bank  accounts  in
     Wachovia Bank, and therefore exceeds the FDIC's limit of $100,000 federally
     insured funds.  The Company believes there is little or no risk in that the
     funds are held in such a prominent and credible bank.

     Merchant  contract  concentration - The Company contracts the locations for
     its machines with various  merchants.  As of December 31, 2004, the Company
     has  approximately  1,438  active  machines,  of  which  approximately  696
     machines  are  contracted  through a single  merchant.  Revenues  from this
     merchant represent approximately 50% of total transaction fees.

     Definition of fiscal year - The Company's fiscal year end is December 31.

     Use of estimates - The preparation of consolidated  financial statements in
     conformity  with  accounting  principles  generally  accepted in the United
     States of America  requires  management to make  estimates and  assumptions
     that affect the reported  amounts of assets and  liabilities and disclosure
     of  contingent  assets  and  liabilities  at the  date of the  consolidated
     financial  statements  and the  reported  amounts of revenue  and  expenses
     during  the  reporting  period.  Actual  results  could  differ  from those
     estimates.

     Revenue   recognition  -  Transaction   service  and  processing  fees  are
     recognized  in the  period  that the  service  is  performed.  The  Company
     receives  service  fees paid by consumers  utilizing  certain ATMs owned or
     managed  by the  Company  and  interchange  fees paid by their  banks.  The
     Company  records all fees for the entire amount of fees to be received from
     the  transaction  for both the  ATMs  owned  and  managed  by the  Company.
     Processing fees are generally charged on a per transaction basis, depending
     on the  contractual  arrangement  with the  customer.  Software  sales  and
     services are recorded when  complete,  shipped and invoiced.  ATM sales are
     recorded when the ATM is shipped and installed.

     Accounts  Receivable  - The Company  reviews the accounts  receivable  on a
     regular basis to determine the collectibility of the accounts.  The Company
     reserves  for  accounts  that  have  aged over 90 days and are no longer an
     active account.

                                      F-9
<PAGE>
     Translation  adjustments - The financial position and results of operations
     of the ATCSA  operations  are  measured  using the  local  currency  as the
     functional  currency.  Assets  and  liabilities  of  these  operations  are
     translated at the exchange rate in effect at the balance sheet date. Income
     statement  accounts are translated at the average  exchange rate during the
     year.  Translation  adjustments  arising from the use of differing exchange
     rates from period to period are included in accumulated other comprehensive
     gain or loss in the invested  equity section of the balance  sheets.  Gains
     and losses that result from foreign  currency  transactions are included in
     the calculation of net income (loss).

     Fixed  assets  -  Fixed   assets  are  stated  at  cost  less   accumulated
     depreciation and amortization.  Depreciation is provided principally on the
     straight-line  method over the estimated useful lives of the assets,  which
     are  generally 3 to 10 years.  Leasehold  improvements  are  amortized on a
     straight-line  basis  over the term of the lease or the life of the  asset,
     whichever  is shorter.  The cost of repairs and  maintenance  is charged to
     expense as incurred. Expenditures for property betterments and renewals are
     capitalized.  Upon sale or other  disposition of a depreciable  asset, cost
     and accumulated  depreciation are removed from the accounts and any gain or
     loss is reflected in other income (expense).

     The Company  periodically  evaluates whether events and circumstances  have
     occurred that may warrant  revision of the  estimated  useful life of fixed
     assets or whether the remaining balance of fixed assets should be evaluated
     for  possible  impairment.  The  Company  uses an  estimate  of the related
     undiscounted  cash flows  over the  remaining  life of the fixed  assets in
     measuring their recoverability.

     Intangibles  Assets  -Goodwill and Merchant  Contracts - In July 2001,  the
     FASB issued SFAS No. 142, 'Goodwill and Other Intangible Assets,' which was
     required to be adopted for fiscal 2002. SFAS No. 142 established accounting
     and reporting  standards for goodwill and intangible  assets resulting from
     business combinations.  SFAS No. 142 included provisions  discontinuing the
     periodic  amortization  of, and requiring  the  assessment of the potential
     impairments of,  goodwill (and intangible  assets deemed to have indefinite
     lives).  As SFAS No. 142 replaced the  measurement  guidelines for goodwill
     impairment,  goodwill not considered  impaired  under  previous  accounting
     literature may be considered impaired under SFAS No. 142. SFAS No. 142 also
     required that the Company complete a two-step goodwill impairment test. The
     first step compared the fair value of each  reporting  unit to its carrying
     amount,  including goodwill. If the fair value of a reporting unit exceeded
     its  carrying  amount,  goodwill is not  considered  to be impaired and the
     second step was not  required.  SFAS 142 required  completion of this first
     step  within  the  first  six  months  of  initial  adoption  and  annually
     thereafter.  If the carrying  amount of a reporting  unit exceeded its fair
     value,  the second step is  performed  to measure the amount of  impairment
     loss.  The second step  compared  the implied fair value of goodwill to the
     carrying value of a reporting  unit's  goodwill.  The implied fair value of
     goodwill is  determined in a manner  similar to  accounting  for a business
     combination  with the  allocation of the assessed fair value  determined in
     the first step to the assets and  liabilities  of the reporting  unit.  The
     excess of the fair value of the reporting unit over the amounts assigned to
     the assets and  liabilities  is the implied  fair value of  goodwill.  This
     allocation  process is only  performed for purposes of evaluating  goodwill
     impairment  and does not  result  in an entry to  adjust  the  value of any
     assets or  liabilities.  An impairment loss is recognized for any excess in
     the carrying value of goodwill over the implied fair value of goodwill.

     Intangible  assets with finite lives are stated at cost, net of accumulated
     amortization,   and  are  subject  to  impairment   testing  under  certain
     circumstances  in  accordance  with  SFAS  No.  144  and  other  applicable
     pronouncements.  These  assets  are  amortized  on  the  straight-line  and
     accelerated  methods, as appropriate,  over their estimated useful lives or
     period of expected  benefit.  Intangible  assets with indefinite  lives are
     subject to periodic impairment testing in accordance with SFAS No. 142.

     The  Company's  intangible  assets are made up of merchant  contracts  with
     automatic  renewable lives. The Company has determined after careful review
     of its  contracts  that the economic  life of the contracts is extended and
     estimated  over 21  years  (or 3 times  renewal)  as most of the  contracts
     auto-renew,  and some have  auto-renewed  more than once.  The Company will
     amortize the merchant  contracts  over their  estimated  useful lives of 21
     years. The Company will also be adopting SFAS 142 to reflect the fair value
     of the merchant  contracts,  and will use a two step  valuation  process to
     determine  if there has been any  impairment  on the value of the  merchant
     contract  assets.  The first step will be to determine  at each  contract's
     renewable  period,  whether they will actually renew and if not to amortize
     the cost over the remaining  life of the contract.  The second step will be
     to compare the fair value of each reporting unit to its carrying  amount of
     the merchant  contracts,  thus testing the  impairment  of the value of the
     contracts.  An impairment loss is recognized for any excess in the carrying
     value  of  merchant  contracts  over the  implied  fair  value of  merchant
     contracts.

                                      F-10
<PAGE>
     Impairment of Long-Lived Assets - The Company reviews long-lived assets for
     impairment  under SFAS No. 144,  "Accounting for the Impairment or Disposal
     of Long-Lived  Assets."  Long-lived assets to be held and used are reviewed
     for impairment  whenever events or changes in  circumstances  indicate that
     the carrying amount of an asset may not be recoverable. The carrying amount
     of a  long-lived  asset is not  recoverable  if it  exceeds  the sum of the
     undiscounted  cash  flows  expected  to  result  from the use and  eventual
     disposition of the asset.  Long-lived assets to be disposed of are reported
     at the lower  carrying  amount or fair value less cost to sell.  During the
     year ended  December 31, 2004,  the Company  determined  that there were no
     long-lived assets that were impaired.

     Fair value of financial instruments - The carrying amounts of the Company's
     long-term liabilities approximate the estimated fair values at December 31,
     2004,  based upon the Company's  ability to acquire similar debt at similar
     maturities.   The  carrying  values  of  all  other  financial  instruments
     approximate their fair value, because of the short-term maturities of these
     instruments.

     Earnings per share - Basic earnings per share exclude any dilutive  effects
     of options,  warrants and convertible securities.  Basic earnings per share
     is computed using the weighted-average  number of outstanding common stocks
     during the applicable period.  Diluted earnings per share is computed using
     the weighted  average number of common and common stock  equivalent  shares
     outstanding during the period.  Common stock equivalent shares are excluded
     from the computation if their effect is antidilutive.

     Common stock equivalents are calculated using options and warrants that can
     be  excercised,  when the  exercise  price is at or above the market  price
     based on the previous quarter average price.

     Income taxes - The Company accounts for its income taxes in accordance with
     SFAS No.  109,  which  requires  recognition  of  deferred  tax  assets and
     liabilities for future tax consequences attributable to differences between
     the financial statement carrying amounts of existing assets and liabilities
     and their respective tax basis and tax credit  carryforwards.  Deferred tax
     assets and  liabilities  are measured  using enacted tax rates  expected to
     apply to taxable income in the years in which those  temporary  differences
     are expected to be recovered or settled.  The effect on deferred tax assets
     and  liabilities  of a change in tax rates is  recognized  in income in the
     period that includes the enactment date.

     Comprehensive income - The Company has no components of other comprehensive
     income.  Accordingly,  net  income  equals  comprehensive  income  for  all
     periods.

     Segment   information  -  The  Company  discloses  segment  information  in
     accordance with SFAS No. 131,  "Disclosures about Segments of an Enterprise
     and Related Information." The Company operates under one segment.

     Advertising  costs -  Advertising  costs  incurred in the normal  course of
     operations  are  expensed  as  incurred.  No  advertising  costs  have been
     incurred for the years ended December 31, 2004 and 2003.

     Research and development costs - Research and development costs are charged
     to expense when incurred.  Costs incurred to internally  develop  software,
     including costs incurred  during all phases of development,  are charged to
     expense as incurred.

     Externally  Developed  Software  -  Costs  incurred  to  purchase  external
     software  and  internally  develop,  so  as to  put  into  production,  are
     capitalized  over the life of the  software  for an  average  life of three
     years.

     Expenses of offering - The Company accounts for specific  incremental costs
     directly to a proposed or actual  offering of securities as a direct charge
     against the gross proceeds of the offering.

     Stock-based  compensation - The Company applies Accounting Principles Board
     ("APB")  Opinion No. 25,  Accounting  for Stock  Issued to  Employees,  and
     Related  Interpretations,   in  accounting  for  stock  options  issued  to
     employees.  Under APB No. 25, employee compensation cost is recognized when
     estimated  fair  value of the  underlying  stock  on the date of the  grant
     exceeds exercise price of the stock option.  For stock options and warrants
     issued to non-employees,  the Company applies SFAS No. 123,  Accounting for
     Stock-Based  Compensation,  which requires the  recognition of compensation
     cost based upon the fair value of stock options at the grant date using the
     Black-Scholes option pricing model.

     The following  table  represents  the effect on net income and earnings per
     share  if  the  Company  had  applied  the  fair  value  based  method  and
     recognition  provisions  of  Statement of  Financial  Accounting  Standards
     (SFAS) No. 123, "Accounting for Stock-Based  Compensation",  to stock-based
     employee compensation:

                                      F-11
<PAGE>
<TABLE>
<CAPTION>
                                                                  2004            2003
                                                                  ----            ----
<S>                                                           <C>              <C>
         Net income, as reported                              $  1,139,889     $ 309,866
         Add: Stock-based employee compensation
          expense included in reported income (loss),
          net of related tax effects                                    --            --
         Deduct: Total stock-based employee
          compensation expense determined under
          fair value based methods for all awards,
          net of related tax effects                              (587,372)     (673,752)
                                                                  --------     ----------
         Pro forma net income (loss)                          $    552,517     $(363,886)
                                                              ============     ==========

         Net income/(loss) per common share
          Basic income, as reported                           $       0.01     $    0.01
                                                              ============     ==========
          Basic income/ (loss), pro forma                     $       0.01     $   (0.01)
                                                              ============     ==========
</TABLE>

     In December 2002, the Financial  Accounting  Standards  Board (FASB) issued
     SFAS No.  148,  "Accounting  for  Stock-Based  Compensation-Transition  and
     Disclosure".  SFAS No. 148 amends the transition and disclosure  provisions
     of SFAS No.  123.  The  Company  is  currently  evaluating  SFAS No. 148 to
     determine  if it will  adopt SFAS No. 123 to  account  for  employee  stock
     options using the fair value method and, if so, when to begin transition to
     that method.  In December  2004, the FASB issued a revision to SFAS No. 123
     called SFAS No.  123R,  which  revises the adoption  period and  transition
     periods  for all  entities  using the fair  value  method  and  applying  a
     modified  prospective method for accounting for employee stock options. The
     Company will be adopting SFAS 123R as  recommended  for Small Business (SB)
     filers,  as of  December  15,  2005 for  periods  subsequent  to that date.
     Currently,  the Company is applying SFAS 123R and the modified  prospective
     method for valuing the disclosures.

     Recent accounting pronouncements -

     In January 2003,  (as revised in December  2003) The  Financial  Accounting
     Standards Board ("FASB") issued  Interpretation  No. 46,  "Consolidation of
     Variable  Interest  Entities",  an  interpretation  of Accounting  Research
     Bulletin   ("ARB")   No.   51,   "Consolidated    Financial    Statements".
     Interpretation  No. 46 addresses  consolidation by business  enterprises of
     variable  interest  entities,  which  have  one or  both  of the  following
     characteristics:  (i) the equity  investment  at risk is not  sufficient to
     permit the entity to finance its activities without additional subordinated
     support from other parties,  which is provided  through other interest that
     will absorb  some or all of the  expected  losses of the  entity;  (ii) the
     equity   investors   lack   one  or   more  of  the   following   essential
     characteristics of a controlling financial interest: the direct or indirect
     ability to make  decisions  about the entities  activities  through  voting
     rights or similar  rights;  or the obligation to absorb the expected losses
     of the entity if they  occur,  which  makes it  possible  for the entity to
     finance its activities;  the right to receive the expected residual returns
     of the  entity if they  occur,  which is the  compensation  for the risk of
     absorbing the expected losses.

     Interpretation  No. 46, as revised,  also requires expanded  disclosures by
     the primary  beneficiary (as defined) of a variable  interest entity and by
     an  enterprise  that holds a  significant  variable  interest in a variable
     interest entity but is not the primary beneficiary.

     Interpretation  No. 46, as revised,  applies to small  business  issuers no
     later than the end of the first  reporting  period that ends after December
     15,  2004.   This   effective   date  includes   those  entities  to  which
     Interpretation  46 had  previously  been  applied.  However,  prior  to the
     required  application of  Interpretation  No. 46, a public entity that is a
     small business issuer shall apply  Interpretation 46 or this Interpretation
     to those  entities that are  considered to be  special-purpose  entities no
     later  than as of the end of the first  reporting  period  that ends  after
     December 15, 2003

     Interpretation No. 46 may be applied prospectively with a cumulative-effect
     adjustment  as of the date on which it is  first  applied  or by  restating
     previously  issued  financial  statements  for  one or  more  years  with a
     cumulative-effect  adjustment  as  of  the  beginning  of  the  first  year
     restated.

                                      F-12
<PAGE>
     The  implementation of the provisions of  Interpretation  No. 46 may have a
     significant  effect  on  the  Company's  consolidated  financial  statement
     presentation or disclosure.

     In May  2003,  the  FASB  issued  SFAS No.  150,  "Accounting  For  Certain
     Financial Instruments with Characteristics of both Liabilities and Equity".
     SFAS No. 150 changes the accounting for certain financial  instruments with
     characteristics  of  both  liabilities  and  equity  that,  under  previous
     pronouncements,  issuers  could account for as equity.  The new  accounting
     guidance  contained  in SFAS No. 150  requires  that those  instruments  be
     classified as liabilities in the balance sheet.

     SFAS  No.  150  affects  the  issuer's   accounting   for  three  types  of
     freestanding  financial  instruments.  One  type  is  mandatory  redeemable
     shares,  which the issuing company is obligated to buy back in exchange for
     cash or other  assets.  A second  type  includes  put  options  and forward
     purchase  contracts,  which involve  instruments that do or may require the
     issuer to buy back some of its shares in exchange for cash or other assets.
     The third type of instruments that are liabilities  under this Statement is
     obligations that can be settled with shares, the monetary value of which is
     fixed,  tied solely or  predominantly to a variable such as a market index,
     or varies  inversely  with the value of the issuers'  shares.  SFAS No. 150
     does not apply to features embedded in a financial instrument that is not a
     derivative in its entirety.

     Most of the  provisions  of SFAS No. 150 are  consistent  with the existing
     definition of  liabilities  in FASB Concepts  Statement No. 6, "Elements of
     Financial  Statements".  The  remaining  provisions  of this  Statement are
     consistent  with the FASB's proposal to revise that definition to encompass
     certain  obligations  that a reporting entity can or must settle by issuing
     its own shares. This Statement shall be effective for financial instruments
     entered  into or  modified  after  May 31,  2003  and  otherwise  shall  be
     effective at the beginning of the first interim period beginning after June
     15,  2003,  except for  mandatory  redeemable  financial  instruments  of a
     non-public  entity,  as to which the effective  date is for fiscal  periods
     beginning after December 15, 2003.

     In March 2004, the U.S. Securities and Exchange  Commission's Office of the
     Chief  Accountant  and the Division of  Corporate  Finance  released  Staff
     Accounting  bulletin  ("SAB") No. 105, "Loan  Commitments  Accounted for as
     Derivative  Instruments".  This bulletin  contains specific guidance on the
     inputs  to  a  valuation-recognition  model  to  measure  loan  commitments
     accounted  for at fair value,  and  requires  that  fair-value  measurement
     include only differences  between the guaranteed  interest rate in the loan
     commitment  and market  interest rate,  excluding any expected  future cash
     flows related to the customer relationship or loan servicing.  In addition,
     SAB105   requires  the  disclosure  of  the  accounting   policy  for  loan
     commitments,  including  methods and assumptions  used to estimate the fair
     value of loan commitments,  and any associated hedging strategies.  SAB 105
     is effective for derivative  instruments  entered into  subsequent to March
     31, 2004 and should also be applied to existing instruments as appropriate.
     The Company has not yet completed  its  evaluation of SAB 105, but does not
     anticipate a material impact on the financial statements.

     In December 2004, the FASB issued SFAS No. 123 (R), "Share-Based  Payment".
     SFAS  No.  123 (R)  revises  SFAS  No.  123,  "Accounting  for  Stock-Based
     Compensation"  and  supersedes  APB Opinion No. 25,  "Accounting  for Stock
     Issued to Employees".  SFAS No. 123 (R) focuses primarily on the accounting
     for  transactions  in  which  an  entity  obtains   employee   services  in
     share-based  payment  transactions.  SFAS No. 123 (R) requires companies to
     recognize in the  statement  of  operations  the cost of employee  services
     received  in  exchange  for  awards  of  equity  instruments  based  on the
     grant-date fair value of those awards (with limited  exceptions).  SFAS No.
     123 (R) is effective  as of the first  interim or annual  reporting  period
     that begins after June 15, 2005 for  non-small  business  issuers and after
     December 15, 2005 for small business issuers. Accordingly, the Company will
     adopt SFAS No. 123 (R) in its quarter ending March 31, 2006. The Company is
     currently  evaluating  the  provisions  of SFAS No. 123 (R) and has not yet
     determined  the  impact,  if any,  that  SFAS No.  123 (R) will have on its
     financial statement presentation or disclosures.

     In December 2004, the Financial  Accounting Standards Board ("FASB") issued
     Statement of Financial  Accounting  Standards ("SFAS") No. 153, " Exchanges
     of Non-Monetary  Assets, an Amendment of APB No. 29". This Statement amends
     APB Opinion No. 29,  "Accounting  for  Nonmonetary  Transactions".  Earlier
     guidance had been based on the  principle  that  exchanges  of  nonmonetary
     assets  should be based on the fair value of the assets  exchanged  and APB
     No. 29 included  certain  exceptions to this principle.  However,  FASB 153
     eliminated the specific exceptions for nonmonetary exchanges with a general
     exception  for  all  exchanges  of  nonmonetary  assets  that  do not  have
     commercial and economic  substance.  A nonmonetary  exchange has commercial
     substance  only if the future  cash flows of the  entity  are  expected  to
     change  significantly  as a  result  of the  exchange.  This  Statement  is
     effective for nonmonetary  exchanges  occurring in fiscal periods beginning
     after  June 15,  2005.  The  implementation  of this  SFAS  No.  153 is not
     expected to have a material  impact on the  Company's  financial  statement
     presentation or its disclosures.

                                      F-13
<PAGE>
     Management  does not believe the adoption of these  statements  will have a
     material effect on the Company's consolidated financial position or results
     of operations.

2.   ACQUISITIONS OF ASSETS

     On October 8, 2003 the Company  purchased all rights and  obligations  of a
     clearinghouse  services  contract.  The Company  issued  750,000  shares of
     common  stock and 500,000  common  stock  options at an  exercise  price of
     $0.35,  the then current market value as of the close of the signing of the
     purchase,  from Docutel Services Corp. The total book value of the contract
     purchase was $425,484.  Docutel  Services  Corp. is not eligible to receive
     additional stock options based upon certain  performance  goals outlined in
     the asset purchase  agreement.  Certain volumes have not been met, thus the
     Company is eligible to receive all shares and options back. The Company has
     currently  requested  all shares and options be  returned.  The Company has
     stopped  amortizing  the  value  of  this  asset  and has  reviewed  it for
     collectibility.

     The Company  purchased  900 Merchant ATM  contracts in February  2004.  The
     purchase  price was  $3,900,000  and is  reflected  in Merchant  Contracts.
     During  September 2004, the Company made two  acquisitions  one for 111 ATM
     contracts,  and  another  for 745  ATM  contracts.  The  prices  for  those
     acquisitions were $918,000 and $7,000,000,  respectively. In the latest two
     acquisitions  the Company also acquired ATM machines with the fair value of
     $166,500 and $1,200,000, respectively.

     When the Company acquires another companies assets,  accounting  principles
     generally  accepted in the United States of America  require the Company to
     estimate  the  fair  value  of the  other  company's  tangible  assets  and
     liabilities and identifiable intangible assets. Based upon these estimates,
     the  purchase  price is  allocated  to the  assets and  liabilities  of the
     acquired  company for the purpose of recording these items in the Company's
     financial records.  Any unallocated purchase price is recorded as goodwill.
     The distinction  between the amount of the purchase price allocated  either
     to tangible assets and liabilities or  identifiable  intangible  assets and
     goodwill is significant  because goodwill is not amortized to the Company's
     statements of operations  but is instead  subject to the annual  impairment
     test discussed earlier in Note 1. Estimates inherent in the process of this
     purchase  price  allocation  include  assumptions  regarding the timing and
     amounts of future cash inflows and outflows, the salability of inventories,
     selection of discount  rates,  contract  renewal  rates and general  market
     conditions.

     Based on an allocation of fair values to fixed assets acquired and merchant
     contracts  acquired,  the  remaining  value is allocated  to goodwill.  The
     Company will be applying FAS 142 to review for impairment to the intangible
     goodwill and merchant  contracts as noted above.  As of September  30, 2004
     the Company had relied on the reported  values of the assets  acquired from
     the seller to estimate  fair value.  In reviewing  the  seller's  balances,
     current  fair values in the market,  discounted  cash flow  analysis of the
     merchant   contracts;   and  after  considering  the  outlay  of  cash  for
     maintenance  and  capital  costs along with the  projected  income from the
     future   income   stream  from  the   contracts,   the  Company   allocated
     approximately  $2,800,000 of the ATM Network's  asset purchase to goodwill,
     as of December  31,  2004,  all other  acquisitions  assets had fair values
     equal or greater than the acquisition price.

     The Proforma  statements of the  acquisitions  for 2004 are disclosed below
     with combined seller information:

                                      F-14
<PAGE>
                         PROFORMA FINANCIAL INFORMATION
                      CONSOLIDATED CONDENSED BALANCE SHEET
<TABLE>
<CAPTION>
                                                        Global Axcess Corp           Combined Seller's
ASSETS                                                  Balance Sheet                Balance Sheet         Proforma
                                                        As of December 31, 2003                            Balance Sheet
                                                        Audited
Current assets
<S>                                                            <C>                         <C>             <C>
      Cash                                                  $    1,832,079           $      (119,431)    $   1,712,648
      Automated teller machine vault cash                          298,705                                     298,705
      Accounts receivable, net                                     450,676                   320,000           770,676
      Prepaid expense and other current assets                     117,092                                     117,092
                                                            -----------------------------------------------------------
                            Total current assets                 2,698,552                   200,569         2,899,121

Fixed assets, net                                                1,840,792                 1,366,500         3,207,292

Other assets
      Intangible assets, net                                     2,312,926                10,441,500        12,754,426
      Other assets                                                  21,981                                      21,981

                                                            -----------------------------------------------------------
Total assets                                                $    6,874,251           $    12,008,569     $  18,882,820
                                                            ===========================================================

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
      Accounts payable and accrued liabilities              $      783,326           $                   $     783,326
      Automated teller machine vault cash payable                  298,705                                     298,705
      Notes payable-related parties  - curent portion               48,320                                      48,320
      Notes payable - current portion                               40,000                 1,125,000         1,165,000
      Capital lease obligations - current portion                  105,111                                     105,111
                                                            -----------------------------------------------------------
                            Total current liabilities            1,275,462                 1,125,000         2,400,462
                                                            -----------------------------------------------------------
Long-term liabilities
      Notes payable-related parties - long-term portion            274,771                                     274,771
      Notes payable - long-term portion                                  -                 2,750,000         2,750,000
      Capital lease obligations - long-term portion                201,588                                     201,588
                                                            -----------------------------------------------------------
Total liabilities                                                1,751,821                 3,875,000         5,626,821
                                                            -----------------------------------------------------------

Commitments and contingencies                                            -

Stockholders' equity
      Preferred stock; $0.001 par value; 25,000,000 shares
         authorized, no shares issued and outstanding                    -                         -                -
      Common stock; $0.001 par value; 125,000,000 shares
         authorized, 46,282,648 shares issued and
         shares outstanding                                         46,283                    38,116           84,399
      Additional paid-in capital                                11,257,161                 6,823,054       18,080,215
      Common Stock Payable                                          32,500                                     32,500
      Accumulated deficit                                       (6,213,514)                1,272,398       (4,941,116)
                                                            ----------------------------------------------------------
                            Total stockholders' equity           5,122,430                 8,133,569       13,255,999
                                                                                                                    -
                                                            ----------------------------------------------------------
Total liabilities and stockholders' equity                  $    6,874,251           $    12,008,569     $ 18,882,820
                                                            ==========================================================
</TABLE>

                                      F-15
<PAGE>
                         PROFORMA FINANCIAL INFORMATION
                   CONSOLIDATED CONDENSED STATEMENT OF INCOME
<TABLE>
<CAPTION>
                                          Global Axcess Corp      Combined Seller's
                                          For the year ended      For the year ended         Proforma
                                                31-Dec-03
                                                 Audited
<S>                                                <C>                 <C>                <C>
Revenues                                      $ 10,201,765        $    8,310,906         $  18,512,671

Cost of revenues                                 6,377,846             4,094,055            10,471,901

                                              ---------------------------------------------------------
         Gross profit                            3,823,919             4,216,851             8,040,770

Operating expenses
         Depreciation and amortization             790,795               928,171             1,718,966
         Selling, general and administrative     2,874,999             1,946,282             4,821,281
                                              ---------------------------------------------------------
                 Total operating expenses        3,665,794             2,874,453             6,540,247

                                              ---------------------------------------------------------
         Income from operations                    158,125             1,342,398             1,500,523
                                              ---------------------------------------------------------

Other income (expense)
         Settlement income                               -                                           -
         Foregiveness of debt                      261,022                                     261,023
         Other (expense)/income                     (1,200)                    -                (1,200)
         Gain on sale of equipment                       -                     -                     -
         Interest expense                         (108,082)              (70,000)             (178,082)
                                              ---------------------------------------------------------
                 Total other income                151,740               (70,000)               81,741
                                              ---------------------------------------------------------
Income before provision for income taxes           309,866             1,272,398             1,582,264

Provision for income taxes                               -                     -                     -

                                              ---------------------------------------------------------
Net income                                    $    309,866        $    1,272,398         $   1,582,264
                                              =========================================================

Basic income per common share                 $       0.01        $         0.03         $        0.02

Diluted income per common share               $       0.00        $         0.03         $        0.02
Basic weighted average
         common shares outstanding              35,163,217            38,117,617            73,280,834
Diluted weighted average
         common shares outstanding              72,572,835            44,235,233            78,690,452
</TABLE>

3.   NOTE RECEIVABLE

     The Company issued a note  receivable in the amount of $190,000 in February
     2004.  The note is due within 1 year with an annual  interest  rate of 10%.
     Principal and interest  payments are to be made monthly.  The note has been
     amended to extend the term for 1 additional  year. The amount  remaining on
     the note as of December 31, 2004 is $99,895.


                                      F-16
<PAGE>
4.   FIXED ASSETS

<TABLE>
<CAPTION>
     Fixed assets consist of the following as of December 31, 2004:

<S>                                                                                     <C>
         Automated teller machines (A)                                                  $      5,491,244
         Furniture and fixtures                                                                  432,673
         Computers, equipment and software (A)                                                 2,185,757
         Automobiles                                                                              30,152
         Leasehold equipment                                                                      19,628
                                                                                        ----------------
                                                                                               8,159,454
         Less: accumulated depreciation and amortization (B)                                   3,213,866
                                                                                        ----------------
         Fixed assets, net                                                              $      4,945,588
                                                                                        ================
(A)  See Note 9 for ATM's and computer's held under capital leases.

(B)  Depreciation  expense for the years ended  December 31, 2004 and 2003 were;
     $783,971 and $630,886, respectively.

5. INTANGIBLE ASSETS

     Intangible assets consist of the following as of December 31, 2004:

         Goodwill & trademarks                                                          $      4,289,296
         Merchant contracts                                                                    9,256,531
                                                                                        ----------------
                                                                                              13,545,827
         Less: accumulated amortization                                                         (889,897)
                                                                                        ----------------
         Intangible assets, net                                                         $     12,655,930
                                                                                        ================
</TABLE>
     The Company recorded  amortization expense of $375,590 and $159,908,  as of
     December 31, 2004 and 2003,  respectively.  Aggregate amortization over the
     next five years,  assuming a useful life of 21 years for merchant contracts
     and intangible assets is expected to be as follows:

                                                         For the years ending
                                                         December 31,

         2005                                             $472,830
         2006                                              472,830
         2007                                              464,749
         2008                                              440,505
         2009                                              440,505

6.   AUTOMATED TELLER MACHINE VAULT CASH PAYABLE

     Automated  teller  machine vault cash payable  consists of funds  collected
     through  providing network and switching  services for ATMs.  Additionally,
     these  funds have been  reported as  automated  teller  machine  vault cash
     payable on the balance sheet with offsetting automated teller machine vault
     cash at December  31,  2004.  As of December  31,  2004,  automated  teller
     machine vault cash payable of $455,736  consists of cash collected  through
     network and switching services, payable to various third-parties.  The cash
     is secured with a proportionate share of the automated teller machine vault
     cash,  due on demand and the  Company  rents the vault cash from  financial
     institutions and pays a negotiated interest rate for the use of the funds.

                                      F-17
<PAGE>
7.   NOTES PAYABLE - RELATED PARTIES

     As of December 31, 2004,  notes  payable - related  parties  consist of the
     following:
<TABLE>
<CAPTION>
<S>                                       <C>                                                <C>
      Promissory note in the amount of $218,981 to a stockholder,
      unsecured, payable in monthly principal and interest installments of $3,000,
      bearing an annual interest rate of 11%, and due June 2013                      $          192,966
      Subordinated unsecured debenture of $2,250,000 provided by stockholders
      of record with interest only payments made quarterly at a rate of 9%,
      with balloon payments due September 15, 2007, net of discounts and fees                 2,181,452
                                                                                     ------------------
                                                                                              2,374,418
      Less: amounts due within one year                                                          16,487
                                                                                     ------------------
      Long-term portion of note payable                                              $        2,357,931
                                                                                     ==================

     As of December 31,  2004,  principal  payments on the notes  payable are as
     follows:

      2005                                                                           $           16,487
      2006                                                                                       14,715
      2007                                                                                    2,226,487
      2008                                                                                       18,471
      Thereafter                                                                                 98,258
                                                                                     ------------------
                                                                                     $        2,374,418
                                                                                     ==================

8.   NOTES PAYABLE

     As of December 31, 2004, notes payable consist of the following:

      In April 2004, the Company entered into a financing agreement with an
      insurance company for $36,500 with interest payable at 8% that matures
      in January 2005                                                                $            3,179

      In September 2004, the Company entered into a subordinated promissory note
      for $150,000 for consulting services associated with the acquisition assets
      from ATM Networks, Inc..  The note is secured by the acquisition assets.
      Interest is payable quarterly, at an annual interest rate of 6%, and the note
      is discounted for warrants in the amount of $68,549.  The note requires
      annual payments in the amount of $50,000 for three years                       $          150,000
                                                                                     ------------------
                                                                                                153,179
      Less: amounts due within one year                                                          53,179
                                                                                     ------------------
      Long-term portion of notes payable                                             $          100,000
                                                                                     ==================

                                      F-18
<PAGE>
</TABLE>
9.   BANK LOAN PAYABLE

     In September  2004,  the company  entered into a senior secured loan with a
     bank in the amount of $1,250,000,  and a working  capital line of credit in
     the amount of  $500,000.  The loan and credit  line are  secured by all the
     assets of the Company.  Principal  and interest is due monthly on the loan,
     and the loan matures at the end of 2 years. The line of credit is due to be
     paid off within one year. Interest, on both the loan and line of credit, is
     at an annual rate of Bank Prime plus .25 basis  points.  The balance of the
     loan as of December 31, 2004 was $1,593,750.

10.  CAPITAL LEASE OBLIGATIONS

     The Company is obligated under various capital leases for automated  teller
     machines and computer equipment. For financial reporting purposes,  minimum
     lease  payments  relating to the equipment have been  capitalized.  Capital
     lease  obligations   totaling  $1,168,437  require  minimum  monthly  lease
     payments  ranging from $34 to $7,387 with interest  rates  ranging  between
     6.00% and 18.00%.  The future minimum lease payments required under capital
     lease obligations as of December 31, 2004, are as follows:

      2005                                                    $          417,935
      2006                                                               368,694
      2007                                                               247,487
      2008                                                               196,957
      2009                                                               145,575
                                                              ------------------
                                                                       1,376,648
      Less: amount representing interest                                 208,212
                                                              ------------------
      Present value of minimum lease payments                          1,168,436
      Less: current portion of capital lease obligations                 328,162
                                                              ------------------
                                                              $          840,274
                                                              ==================

     Equipment  leased under  capital  leases as of December  31,  2004,  totals
     $1,406,196, which is net of accumulated depreciation of $74,804.

11.  OTHER INCOME

     During fiscal year 2004 the Company had settled a claim whereby the Company
     was  returned  380,000  shares  of  common  stock  with a  market  value of
     $304,000. The shares were subsequently cancelled.

12.  COMMITMENTS AND CONTINGENCIES

     Leased  facilities  -  During  September  2004,  the  Company  renewed  the
     operating lease for its facilities under a non-cancelable  operating lease.
     The agreement calls for an annual base rent of approximately  $180,326 with
     an annual  cost of living  increase of 3%.  Rent  expense  during the years
     ending December 31, 2004 and 2003 was $159,125 and $119,613, respectively.


                                      F-19
<PAGE>
     Future minimum rental  payments  required under the operating lease for the
     office facilities as of December 31, 2004, are as follows:

      2005                                                    $          189,915
      2006                                                               195,612
      2007                                                               201,480
      2008                                                               207,525
      2009                                                                52,262
                                                              ------------------
     Total                                                    $          846,794
                                                              ==================

     Legal proceedings

     During the fourth quarter of 2002, the Business  Software  Alliance ("BSA")
     conducted  an  audit  of  software  in use  by  Global  Axcess'  subsidiary
     Nationwide Money Services,  Inc. ("NMS"). BSA alleges that NMS infringed on
     software  copyrights  for Microsoft and Symantec.  On December 5, 2002, BSA
     sent NMS a letter  requesting  payment of $237,842  plus  attorney fees for
     purportedly  misappropriated  software that was installed on NMS computers.
     While acknowledging that some software was inappropriately installed on NMS
     computers,  NMS disagrees with the facts  presented in the BSA letter.  NMS
     has settled with the BSA  subsequent to December 31, 2004.  The Company has
     reserved the amounts fully as of December 31, 2004.

     In March 2004,  the  Company  received a claim  filed by James  Collins,  a
     previous  employee of Global  Axcess Corp.  The claim was filed in Superior
     court of  California,  County  of San  Diego on March 2,  2004.  The  claim
     alleges the following are owed in connection with the employment agreement:
     compensation,  bonuses and other benefits of  approximately  $316,915;  and
     450,000 restricted shares and 1,798,500 stock options  exercisable at $0.75
     per share.

     The Company believes that this claim is unfounded. The Company's management
     believes  that this claim will not have a  material  adverse  effect on the
     Company's  consolidated  results of  operations,  cash  flows or  financial
     position.

     The Company's  officers and  directors are aware of no other  threatened or
     pending Litigation or government  proceeding,  which would have a material,
     adverse  effect  on the  Company.  From time to time the  Company  may be a
     defendant  (actual or  threatened) in certain  lawsuits  encountered in the
     ordinary course of its business, the resolution of which, in the opinion of
     management,  should not have a  material  adverse  effect on the  Company's
     financial position, results of operations, or cash flows.

13.  CONSULTING AND EMPLOYMENT AGREEMENTS

     The Company has the following  employment  contracts with several executive
     officers and consultants:

     The Chairman and CEO has a new five year employment  contract from June 30,
     2004 to June  30,  2009,  under  Board  and the  Chairman's  approval.  The
     agreement provides the Chairman with the following compensation:  an annual
     salary of  $250,000;  which has been  increased  to $275,000  once  certain
     milestones  were  achieved,  and  can be  raised  to  $350,000  when  other
     milestones  are achieved;  an annual bonus to be determined  and awarded by
     the  Compensation  Committee;  and an 18  month  severance  agreement.  The
     compensation under this agreement through December 31, 2004 was $137,500.


                                      F-20
<PAGE>
     The  President  has a two year  employment  contract from April 29, 2002 to
     April 29,  2004,  which has been  extended for two  additional  years until
     April 29, 2006 under Board and the President's approval. For performance as
     a director and officer,  the Company will compensate the President with the
     following:  a monthly  salary of  $7,500,  which has been  increased  to an
     annual  amount of $200,000  once certain  milestones  were  achieved and an
     annual  bonus  and  stock  options  to be  determined  and  awarded  by the
     Compensation  Committee.  The compensation under this agreement in 2004 and
     2003 was, $200,000 and $125,000, respectively.

     The Executive  Vice-President has a two year employment  contract from July
     1,  2003  to  December  31,   2005.   For   performance   as  an  executive
     vice-president,  the Company will  compensate the Executive  Vice-President
     with the  following:  an annual  salary of $135,000 and a  commission  plan
     based  on  certain  goals  of the  Company.  The  compensation  under  this
     agreement in 2004 and 2003 was, $200,000 and $135,000, respectively.

     A Vice  President of the Company has a two year  contract  from October 24,
     2003 to October 24, 2005. For performance as a vice-president,  the Company
     will  compensate the Vice President with a salary of $120,000 per year, and
     has given  400,000  options at an exercise  price of $0.34,  as well as set
     other   performance   goals  with  the  possibility  of  obtaining  600,000
     additional  options at varying prices based on grant date. The compensation
     under  this  agreement  in  2004  and  2003  was,   $120,000  and  $25,000,
     respectively.

14.  COMMON STOCK

     During  the  first  quarter  ending  March  31,  2003,  under a  settlement
     agreement, 655,000 shares of the Company's stock previously issued under an
     acquisition with two individuals,  were transferred back to the Company and
     subsequently cancelled during the second quarter ended June 30, 2003.

     During the second  quarter  ending June 30, 2003,  the Company had issued a
     Private Placement Offering, whereby the Company offered units at a price of
     $.05 per unit with each unit  consisting  of one share of common  stock and
     one common stock purchase  warrant.  The offering  closed in July 2003. The
     amount of shares  subscribed  to totaled  12,210,000,  as of September  30,
     2003, of which  $610,500 was received in cash, of which $21,251 and 455,000
     shares of stock were issued as payment of fees.

     Also during the second  quarter,  1,000,000  shares of stock  previously on
     hold with the transfer agent, pending a legal claim, were released.

     Also during the second quarter,  $50,000 of debt due to a related party was
     exchanged for 1,000,000 shares of the Company's common stock, valued at the
     fair market value on the date of the exchange.

     During the third and fourth  quarter  fiscal  year 2003,  the  Company  had
     issued a second Private  Placement  Offering,  whereby the Company  offered
     units at a price of $.50 per unit with each unit  consisting  of two shares
     of common stock and one common stock purchase warrant.  The offering closed
     subsequent to December 31, 2003. The amount of shares subscribed to totaled
     7,980,000,  as of December 31, 2003,  of which  $1,995,000  was received in
     cash, of which $145,147 was paid in fees.

     Purchase  of  Contract  -- In  October  2003,  the  Company  purchased  the
     Clearinghouse  Services  Agreement  from  Docutel  Corporation  for 750,000
     shares of the  Companies  common stock and 500,000 stock  purchase  options
     exercisable at $0.35.  Under this Agreement the Company will be responsible
     to collect  data from  various  vendors  that are  providing  product for a
     prepaid  debit  card  that  will be  issued  to  members  of the  Community
     Technology  Network  Program  (CTNP).  Additionally  the  Company  will  be
     responsible  to collect the fees charged by the vendors to the  cardholders
     and to disburse  the funds once  collected  to the  vendors.  The CTNP is a
     program that is  marketing  various  services as well as the prepaid  debit
     card  to  people  who  reside  in  the  Department  of  Housing  and  Urban
     Development  sponsored  housing.  The  Company  earns a monthly fee on each
     active  card as well as  additional  fees based on the usage of the card by
     the resident.


                                      F-21
<PAGE>
     During the fourth  quarter of fiscal  year 2003,  two  employees  exercised
     stock options totaling 14,500 shares for a total cash payment of $2,408.

     January 15, 2004,  the Company  closed its  Regulation  S private  offering
     whereby it raised  $1,039,500  during the three months ended March 31, 2004
     in connection with the sale of 2,204,063  (4,408,126 shares) units for $.50
     per unit to  accredited  and issued four types of warrants (F  Warrants,  G
     Warrants, H Warrants and I Warrants), which are exercisable for a period of
     five  years or for 18 months  after the  effective  date of a  registration
     statement  covering the shares of common  stock  underlying  the  warrants,
     whichever is longer. The four warrants terms are as below: .

     January 19, 2004,  the Company closed its 2nd private  offering  whereby it
     raised  $490,000 during the three months ended March 31, 2004 in connection
     with the sale of 1,070,000  (2,140,000  shares)  units for $.50 per unit to
     accredited and institutional investors. Each unit consists of two shares of
     common  stock of the Company and issued four types of warrants (F Warrants,
     G Warrants, H Warrants and I Warrants),  which are exercisable for a period
     of five years or for 18 months after the effective  date of a  registration
     statement  covering the shares of common  stock  underlying  the  warrants,
     whichever is longer. The four warrants terms are as below: . .

     January 29, 2004, the Company raised $3,500,000 in connection with the sale
     of   14,000,000   shares  of  common  stock  for  $.25  per  share  to  two
     institutional  investors.  The  investors,  upon the  purchase of every two
     shares of common stock, also received four common stock purchase  warrants,
     which  resulted  in  the  issuance  of  28,000,000  common  stock  purchase
     warrants.  The  Company  issued  four  types of  warrants  (F  Warrants,  G
     Warrants, H Warrants and I Warrants), which are exercisable for a period of
     five  years or for 18 months  after the  effective  date of a  registration
     statement  covering the shares of common  stock  underlying  the  warrants,
     whichever is longer. The four warrants terms are as follows:

     o The F Warrants are  exercisable at $.35 per share and are not callable by
     the Company.

     o The G Warrants are  exercisable at $.35 per share and are callable by the
     Company if the market price of the Company's common stock is equal to or in
     excess of $0.70 for a period  of  twenty  consecutive  days and there is an
     effective   Registration   Statement   covering  the  shares  common  stock
     underlying the G Warrant.

     o The H Warrants are  exercisable at $.50 per share and are callable by the
     Company if the market price of the Company's common stock is equal to or in
     excess of $1.00 for a period  of  twenty  consecutive  days and there is an
     effective   Registration   Statement   covering  the  shares  common  stock
     underlying the H Warrant.

                                      F-22
<PAGE>
     o The I Warrants are exercisable at $1.00 per share and are callable by the
     Company if the market price of the Company's common stock is equal to or in
     excess of $1.25 for a period  of  twenty  consecutive  days and there is an
     effective   Registration   Statement   covering  the  shares  common  stock
     underlying the I Warrant.

     All common shares  associated  with this private  placement are  restricted
     securities in accordance with Rule 144 as promulgated under the Laws of the
     Securities  Act of  1933.  However,  the  Company  is  required  to  file a
     registration  statement  covering the shares of common stock and the shares
     underlying  the common stock  purchase  warrants no later then May 30, 2004
     and it is  required  to go  effective  by July 29,  2004.  The  Company has
     registered the above shares of common stock and underlying shares for stock
     purchase warrants. .

     During January 2004,  shareholders  exercised  stock purchase  warrants for
     234,963  shares  of  common  stock.  These  stock  purchase  warrants  were
     exercised at several prices per share for an amount of $15,155.

     During the three months ending March 31, 2004 shareholders  exercised stock
     purchase  warrants for an aggregate of  12,853,485  shares of common stock.
     These stock purchase warrants were exercised on a cashless provision.

     During February 2004,  shareholders  exercised stock purchase  warrants for
     429,550  shares  of  common  stock.  These  stock  purchase  warrants  were
     exercised at $0.10 per share for an amount of $42,955.

     Also during February 2004, shareholders exercised stock options for 166,666
     shares of common  stock.  These stock  options were  exercised at $0.50 per
     share for an amount of $83,333.

     In March 2004,  shareholders exercised stock purchase warrants at $0.35 per
     share and received $1,997,124. The Company issued 7,526,789 shares on April
     1, 2004.

     During April,  2004 after a settlement  with on 380,000  common shares were
     returned to the  Company.  Initially  these  shares were issued in 2001 for
     consulting  fees and charged  against  income.  At the time the  settlement
     occurred  these  shares  had a market  value of $0.80 per share for a total
     value of $304,000  returned to Treasury of the company and is  reflected in
     other income.

     During September 2004, the Company issued Debt with stock purchase warrants
     attached at an exercise price of $0.35 per share. A total of 675,000 shares
     underlying  the stock  purchase  warrants  for a fair value of $68,549 were
     issued.

                                      F-23
<PAGE>
     In October 2004 12,500  options were  exercised by an employee at $0.07 per
     share for $875

     During  the fourth  quarter  of the year,  20,000  shares  were  issued for
     consulting services at a fair value of $5,800.

     During  October  2004,  there was an  exercise  of 200,000  stock  purchase
     warrants at an exercise price of $0.10 per share.

     In December 2004, an employee  exercised 2,000 options at an exercise price
     of $0.135 per share.

     During  December  2004 the  Company  issued  1,200,000  stock  options  for
     consulting  services  at an  exercise  price of $0.30,  for a fair value of
     $9,094.

     During December 2004, the Company  prepaid $12,500 of consulting  costs for
     capital raising activities.

15.  INCOME TAXES

     The components of the provision for income taxes were as follows:

Income tax benefit for the years ended  December 31, 2004 and 2003 is summarized
as follows:

                                           2004                     2003
Current:
  Federal                            $               -        $              -
  State                                              -                       -

Deferred:
  Federal                                     (453,212)                      -
  State                                        (85,084)                      -

                                     ------------------       -----------------
  Income tax expense (benefit):      $        (538,296)       $              -
                                     ==================       =================

     Deferred  income taxes arise from the  temporary  differences  in reporting
     assets and  liabilities  for income tax and financial  reporting  purposes.
     These temporary  differences  primarily  resulted from net operating losses
     and different  amortization and depreciation methods used for financial and
     tax purposes.

                                      F-24
<PAGE>
     The components of the deferred tax assets and the deferred tax  liabilities
     are shown below.
<TABLE>
<CAPTION>
                                                                                   2004                   2003

Deferred tax assets:
<S>                                                                                <C>                     <C>
   Arising from operating loss and credit carryforwards                     $        2,854,197       $       180,250
   Valuation allowance                                                              (1,582,908)             (180,250)

                                                                            -------------------      ----------------
Deferred tax assets                                                                  1,271,289                     -
                                                                            -------------------      ----------------
Deferred tax liability:
     Arising from accumulated depreciation and amortization                            732,993                     -
                                                                            -------------------      ----------------
Deferred tax liability                                                                 732,993                     -
                                                                            -------------------      ----------------
Net deferred tax asset                                                                 538,296                     -
                                                                            ===================      ================

Current portion                                                                        216,017                     -
Non-current portion                                                                    322,279                     -

                                                                            -------------------      ----------------
Net deferred tax asset                                                      $          538,296       $             -
                                                                            ===================      ================
</TABLE>
     In assessing the realizable ability of the deferred tax assets,  management
     considers  whether it is more likely than not,  that some portion or all of
     the deferred tax assets will not be realized.  The  valuation  allowance at
     December  31,  2004 is related to  deferred  tax  assets  arising  from net
     operating  loss  carryforwards.  Management  believes  that  based upon its
     projection of future taxable income for the forseeable  future,  it is more
     likely  than not  that the  Company  will not be able to  realize  the full
     benefit of the net operating loss carryforwards  before they expire, due to
     the accelerated  amortization  and  depreciation  losses from the projected
     acquisition assets.

     At December  31, 2004,  the Company has net  operating  loss  carryforwards
     totaling approximately $7,500,000 that may be offset against future taxable
     income through 2016.

16.  NET INCOME PER COMMON SHARE

     Basic net income per share is computed based on the weighted average number
     of common  shares  outstanding  during the  period.  Diluted net income per
     common  share is computed  based on the weighted  average  number of common
     shares  outstanding  during the period  increased by the effect of dilutive
     stock options and stock purchase  warrants using the treasury stock method.
     The calculation of basic net income per common share and diluted net income
     per common share is presented below:

                                      F-25
<PAGE>
     The  computations for basic and diluted weighted average earnings per share
     are as follows:
<TABLE>
<CAPTION>
                                                Net Income        Weighted Average Shares       Earnings Per
                                                (Numerator)           (Denominator)                 Share

Year ended December 31, 2004
Basic weighted average earnings per share:
<S>                                             <C>                     <C>                        <C>
        Net income                              $ 1,139,889             78,116,293                 $ 0.015
                                                -----------             ----------                 -------
Diluted earnings per share:
Dilutive stock options & warrants                                        4,329,623
                                                                        ----------
Net income plus assumed conversions             $ 1,139,889             82,445,916                 $ 0.014
                                                -----------             ----------                 -------
Year ended December 31, 2003
Basic earnings per share:
        Net Income                              $   309,866             35,163,217                 $ 0.009
                                                -----------             ----------                 -------
Diluted earnings per share:
Dilutive stock options & warrants                                       37,409,618
                                                                        ----------
Net Income plus assumed converstions            $   309,866             72,572,835                 $ 0.004
                                                -----------             ----------                 -------
</TABLE>

17.  STOCK OPTIONS AND WARRANTS

     Stock  options - During the years ended  December  31,  2004 and 2003,  the
     Company granted stock options  totaling  6,623,000 and 6,197,000  shares of
     its common stock,  with a weighted  average strike price of $0.32 and $0.32
     per share, respectively.  Certain stock options were exercisable upon grant
     and have a life  ranging  from 4 months  to 5 years.  The  following  table
     summarizes the Company's stock options activity under compensation plans:
<TABLE>
<CAPTION>
                                                                           Number           Weighted
                                                                             Of              Average
                                                                           Options       Exercise Price
                                                                         -----------     ------------
<S>                        <C> <C>                                        <C>            <C>
         Balance, December 31, 2002                                       4,266,500      $      0.77
              Options granted                                             6,197,000             0.32
              Options canceled                                                   --               --
              Options expired                                              (614,000)            0.18
                Options exercised                                           (14,500)            0.17
                                                                         -----------     -------------
         Balance, December 31, 2003                                       9,835,000      $      0.52
              Options granted                                             6,198,000             0.29
              Options cancelled                                            (500,000)            0.35
              Options expired                                            (2,688,334)            0.80
              Options exercised                                            (179,166)            0.07
                                                                         -----------     -------------
         Balance, December 31, 2004                                      12,665,500      $      0.38
                                                                         ===========     =============
</TABLE>

     Pro forma disclosure - Pro forma  information  regarding net income and net
     earnings per share,  as disclosed in Note 1, has been  determined as if the
     Company had accounted for its employee  stock-based  compensation plans and
     other  stock  options  under the fair value  method of SFAS 123R.  The fair
     value of each  option  grant is  estimated  on the date of grant  using the
     Black-Scholes  option  pricing  model with the  following  weighted-average
     assumptions used for grants under the fixed option plans:

                                      F-26
<PAGE>
<TABLE>
<CAPTION>
                                                                         2004              2003
<S>                                                                      <C>               <C>
         Weighted-average risk free interest rate                       3.75%             1.42%
         Expected life of option (years)                                 2.0               2.0
         Expected stock volatility                                      70.5%             57.2%
         Expected dividend yield                                        0.00%             0.00%
</TABLE>
     The following table summarizes  information  about options  outstanding and
     exercisable at December 31, 2004:
<TABLE>
<CAPTION>
       Shares Underlying Options Outstanding              Shares Underlying Options Excercisable

                    Shares        Weighted              Weighted        Shares          Weighted
                    Underlying    Average               Average         Underlying      Average
                    Options       Remaining             Excerise        Options         Exercise
Exercise Price      Outstanding   Contractual Life      Price           Exercisable     Exercise Price
--------------      -----------   ----------------      --------        -----------     --------------
<C>   <C>             <C>            <C>                 <C>             <C>                <C>
$0.05-$0.25           2,400,500      2 years             $ 0.16          1,819,250          $ 0.15
$0.26-$4.00          10,163,000      3 years             $ 0.44          4,218,250          $ 0.35
                    -----------                         --------        -----------     --------------
                     12,563,500                          $ 0.38          6,037,500          $ 0.49
                    -----------                         --------        -----------     --------------
</TABLE>
<TABLE>
<CAPTION>
                          Exercise Price
                         Equals, Exceeds or
        Number of        is Less Than Mkt.     Weighted                             Weighted
     Remaining Options    Price of Stock        Average          Range of           Average
          Granted          on Grant Date     Exercise Price    Exercise Price      Fair Value
     -----------------   ------------------  --------------    --------------    ------------
<S>                                          <C>               <C>               <C>
                  --       Equals            $          --     $          --     $        --
           4,330,000       Exceeds                    0.66              4.00       2,837,450
           8,233,500      Less Than                   0.24              0.30       1,969,335
     -----------------   ------------------  --------------    --------------    ------------
          12,563,500                         $        0.38     $          --     $ 4,806,783
     =================   ==================  ==============    ==============    ============
</TABLE>
                                      F-27
<PAGE>
     Stock warrants.  The following table summarizes the Company's stock warrant
     activity:
                                                 Number           Weighted
                                                   Of              Average
                                                Warrants       Exercise Price
                                              -----------      --------------
         Balance, December 31, 2002            1,333,316       $        9.17
                                              -----------      --------------
              Warrants granted                34,225,000                0.39
              Warrants canceled                       --                  --
              Warrants expired                        --                  --
              Warrants exercised                      --                  --
                                              -----------      --------------
         Balance, December 31, 2003           35,558,316       $        0.72
              Warrants granted                43,192,998                0.74
              Warrants canceled                       --                  --
              Warrants expired                 1,713,316                7.20
              Warrants exercised              22,458,656                0.18
                                              -----------      --------------
         Balance, December 31, 2004           54,579,342       $        0.54
                                              ===========      ==============

     Pro forma disclosure - SFAS No. 123 requires  companies that follow APB No.
     25 to provide a pro forma  disclosure  of the impact of  applying  the fair
     value  method of SFAS No.  123.  Accordingly,  no pro forma  disclosure  is
     required as stock  warrants were issued for cash not as part of stock based
     consideration.

     The following table summarizes  information about warrants  outstanding and
     exercisable at December 31, 2004:

<TABLE>
<CAPTION>
       Shares Underlying Options Outstanding              Shares Underlying Options Excercisable
                    Shares        Weighted              Weighted        Shares          Weighted
                    Underlying    Average               Average         Underlying      Average
                    Options       Remaining             Excerise        Options         Exercise
Exercise Price      Outstanding   Contractual Life      Price           Exercisable     Exercise Price
--------------      -----------   ----------------      --------        -----------     --------------
<C>                   <C>               <C>               <C>            <C>               <C>
$ 0.10                2,600,000         1.5 years         $ 0.10         2,600,000         $ 0.10
$ 0.30                2,200,000         0.5 years         $ 0.30         2,200,000         $ 0.30
$ 0.35               21,682,004         2.1 years         $ 0.35        21,682,004         $ 0.35
$ 0.50               14,090,336         2.1 years         $ 0.50        14,090,336         $ 0.50
$ 1.00               14,007,002         2.1 years         $ 1.00        14,007,002         $ 1.00
------------------------------------------------------------------------------------------------------
$ 0.54               54,579,342                           $ 0.54        54,579,342         $ 0.54
=======================================================================================================
</TABLE>
                                      F-28
<PAGE>
18.  RELATED PARTY TRANSACTIONS

     In May 2003, the Company issued  1,000,000  shares of its common stock to a
     stockholder,  officer,  and  director  of the  Company,  through  a Private
     Placement Offering in an amount of $50,000.

     In June 2003, the Company issued  1,000,000 shares of its common stock to a
     stockholder,  officer,  and  director  of the  Company,  through  a Private
     Placement  Offering in an amount of $50,000  offsetting  an equal amount of
     debt  currently  owed to the  Company.

     In June 2003,  the Company  issued  400,000 shares of its common stock to a
     stockholder,  and  officer  of the  Company,  through a  Private  Placement
     Offering in an amount of $20,000.

     In June 2003,  the Company  issued  100,000 shares of its common stock to a
     stockholder,  and  officer  of the  Company,  through a  Private  Placement
     Offering in an amount of $5,000.

     In June 2003,  the Company  issued  100,000 shares of its common stock to a
     stockholder  and  director  of the  Company,  through a  Private  Placement
     Offering in an amount of $5,000.

     In June 2003,  the Company  issued  400,000 shares of its common stock to a
     stockholder  and  director  of the  Company,  through a  Private  Placement
     Offering in an amount of $20,000.

     In July 2003,  the Company  issued  400,000 shares of its common stock to a
     stockholder,  officer,  and  director  of the  Company,  through  a Private
     Placement Offering in an amount of $20,000.

     In  February   2004,  we  issued  912,435  shares  of  common  stock  to  a
     stockholder,  officer,  and  director of the Company,  through  exercise of
     1,000,000  Private  Placement  Offering  Warrants  at $0.10  per  share and
     exercised as cashless.

     In  February   2004,  we  issued  912,435  shares  of  common  stock  to  a
     stockholder,  officer,  and  director of the Company,  through  exercise of
     1,000,000 Private Placement  Offering Warrants  (offsetting an equal amount
     of debt  currently owed by the Company) at $0.10 per share and exercised as
     cashless..

     In  February   2004,  we  issued  364,974  shares  of  common  stock  to  a
     stockholder,  and  officer  of the  Company,  through  exercise  of 400,000
     Private  Placement  Offering  Warrants at $0.10 per share and  exercised as
     cashless.

     In February 2004, we issued 91,244 shares of common stock to a stockholder,
     and officer of the Company,  through exercise of 100,000 Private  Placement
     Offering Warrants at $0.10 per share and exercised as cashless.

     In February 2004, we issued 365,035 shares of common stock to a stockholder
     and director of the Company,  through exercise of 400,000 Private Placement
     Offering Warrants at $0.10 per share and exercised as cashless.

                                      F-29
<PAGE>
     In March 2004, we issued 10,000 shares of common stock to a stockholder and
     director  of the  Company,  through  exercise of 10,000  Private  Placement
     Offering Warrants at $0.35 per share.

     In March 2004,  we issued  700,000  shares of common stock to a stockholder
     and beneficial owner of the Company,  through exercise of Private Placement
     Offering Warrants at $0.35 per share

     In March 2004,  we issued  700,000  shares of common stock to a stockholder
     and beneficial owner of the Company,  through exercise of Private Placement
     Offering Warrants at $0.35 per share

     In March 2004,  we issued  700,000  shares of common stock to a stockholder
     and beneficial owner of the Company,  through exercise of Private Placement
     Offering Warrants at $0.35 per share

     In  February  2004,  we  issued  2,666,667  shares  of  common  stock  to a
     stockholder  and  beneficial  owner  of  the  Company,  through  a  Private
     Placement  Offering  for  $666,666.75  and  we  issued  5,333,334  Warrants
     exercisable from $0.35 to $1.00.

     In February  2004,  we issued  2,666,667  shares of common stock to another
     stockholder  and  beneficial  owner  of  the  Company,  through  a  Private
     Placement  Offering  for  $666,666.75  and  we  issued  5,333,334  Warrants
     exercisable from $0.35 to $1.00.

     In February  2004,  we issued  2,666,667  shares of common stock to another
     stockholder  and  beneficial  owner  of  the  Company,  through  a  Private
     Placement  Offering  for  $666,666.75  and  we  issued  5,333,334  Warrants
     exercisable from $0.35 to $1.00.

     In  February  2004,  we  issued  6,000,000  shares  of  common  stock  to a
     stockholder  and  beneficial  owner  of  the  Company,  through  a  Private
     Placement  Offering  for  $1,500,000  and  we  issued  12,000,000  Warrants
     exercisable from $0.35 to $1.00.

     In September  2004, we issued 15,000 warrants to a stockholder and director
     of the Company,  as part of a debenture with an exercise price of $0.35 per
     share.

     In  September  2004,  we  issued  330,000  warrants  to a  stockholder  and
     beneficial  owner of the Company,  as part of a debenture  with an exercise
     price of $0.35 per share.

     As of December 31, 2004,  the Company had an unsecured  promissory  note in
     the amount of $192,966 outstanding payable to a stockholder of the Company.
     The note bears interest in the amount of 11% and is due in June 2013.

     During the fiscal years 2004 and 2003 there were payments on notes payable
     - related parties of $57,814 and $262,447, respectively.

     Also during fiscal year 2004 there were new proceeds from notes payable -
     related parties in the amount of $2,250,000. These funds were used to
     provide acquisition financing.

     During June 2003, several of the Company's management acquired stock of the
     Company, see Item 12 below under "CERTAIN RELATIONSHIPS AND RELATED
     TRANSACTIONS".

     During October 2003, the management of the Company was granted an incentive
     stock option plan for performance goals effective during fiscal year 2004.

     During December 2004 the management of the Company was granted an incentive
     stock option plan for performance goals effective during fiscal year 2005.
     See Item 10, "EXECUTIVE COMPENSATION" for more detail.

19.  SUBSEQUENT EVENTS

     In March 2005, the Company initiated Private Placement Memorandum #5. Units
     offered  consisted  of four  shares of common  stock and two  common  stock
     purchase warrants  exercisable at $.35 per share for three years. The price
     per unit is $1.12. The Company has closed the offering as of March 30, 2005
     with an approximate capital raise of $634,000.

                                      F-30