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,  2003
                                       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 2003 were: $10,201,765.

The aggregate market value of the Common Stock held by non-affiliates of the
Issuer as of March 10, 2004 was $15,502,680.

As of March 10, 2004, the Issuer had 80,348,772 shares outstanding of the Common
Stock ($0.001 par value) and no shares outstanding of the Preferred Stock
($0.001 par value).

<PAGE>
                                 TABLE OF CONTENTS                      Page No.

PART  I

  Item  1.    Description of Business                                          4
  Item  2.    Description of Properties                                       13
  Item  3.    Legal Proceedings                                               13
  Item  4.    Submission of Matters to a Vote of Security Holders             15

PART  II

  Item  5.    Market for Common Equity and Related Stockholder Matters        16
  Item  6.    Management's Discussion and Analysis or Plan of Operation       17
  Item  7.    Financial Statements                                            32
  Item  8.    Changes in and Disagreements With Accountants on Accounting
              and Financial Disclosure                                        32
  Item 8A.    Controls and Procedures                                         32

PART  III

  Item  9.    Directors  and  Executive  Officers,  Promoters  and  Control
              Persons; Compliance With Section 16(a) of the Exchange Act      34
  Item 10.    Executive Compensation                                          39
  Item 11     Security Ownership of Certain Beneficial Owners and Management
              and Related Stockholder Matters                                 41
  Item 12.    Certain  Relationships  and  Related  Transactions              42
  Item 13.    Exhibits  and  Reports  on  Form  8-K                           43
  Item 14.    Principal Accountants Fees and Services                         44


SIGNATURES                                                                    45

FINANCIAL  STATEMENTS                                                         46

FINANCIAL  STATEMENT  SCHEDULE

EXHIBITS


                                       2
<PAGE>
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 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 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.


                                       3
<PAGE>
                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

History

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 is also a processing
company. The Company plans to expand through the strategic acquisition of
profitable ATM 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. Global Axcess is a holding
company which conducts all of its operations through its wholly owned
subsidiaries. Global Axcess Corp. together with its subsidiaries shall be
collectively referred to as the "Company."

On December 18, 2002, the Company entered into a settlement agreement with
various former officers and owners of Tallent wherein Tallent agreed to return
to the Company all the shares the Company issued to purchase Tallent, cancel
various notes including the note in the amount of $257,909 payable to the
Company and a note for approximately $130,000 due to former owners of Tallent.
The former owners of Tallent also agreed to assume certain liabilities. See
footnote 2 in "Notes to Consolidated Financial Statements".

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,
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 from Docutel, Corp to manage various aspects of 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 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.

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.

Business Description

As of December 31, 2003, the Company owned, operated or provided management
services to 1,087 ATMs in its network. Additionally, the Company, through a
wholly owned subsidiary provided processing services only for an additional 351
ATMs owned by independent third parties for a total of 1,438 ATMs in service in
the Company's network.

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
Nationwide Money Services. EFT Integration has a relationship with the following
card organizations or networks:

                                       4
<PAGE>

     o    EFT Integration has a direct relationship with STAR, a major regional
          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 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
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 for
the operation of our network. The system has undergone rigorous testing by VISA
and has successfully passed a VISA CISP audit and is "officially approved" by
VISA for secured transaction processing.

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
the 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
which includes immediate handling of ATM transactions by third party processing
and use of data facilities in two offsite locations.

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."

                                       5
<PAGE>
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
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 2003, the number of Branded partners was 34. 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.


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.

                                       6
<PAGE>
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         # locations
   -----         -----------
     CA                35
     FL               150
     GA               748
     MD                58
     ME                37
     NC               196
     SC                47
     TN                60
     TX               151
     VA               234

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
             (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,

                                       7
<PAGE>
     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. 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 6,565,344 transactions in fiscal 2003 and
6,409,271 transactions on our network in fiscal 2002.

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. 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 products offer solutions to employers that: wish to lower payroll
costs; need to pay employees without bank accounts or need to pay employees that

                                       8
<PAGE>
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 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.


Community Technology Network Program and the Clearinghouse Services Agreement

Currently, the initial launch of the program has been planned for the first
quarter of 2004. The Company has been working to provide the support and
services under the rights and obligations of the Clearinghouse Services
Agreement. 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.

Acquisition Strategy

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 acquisition was completed in February, 2004 with an approximately 900 ATM
Merchant contracts added. This acquisition is expected to add approximately $1.8
million in revenue and approximately $600,000 of net income annually to the
Company.

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.

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


Other Business Functions.

Global Axcess 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, Global Axcess' 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.


                                       9
<PAGE>
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 other 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.

      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 in the business such as E-Funds, E-Trade and
           Cardtronics. Their networks consist of approximately 15,000 ATMs,
           15,000 ATMs and 12,000 ATMs respectively during the 1st calendar
           quarter of 2004

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 or Triton, but we
own several other brands of ATMs such as Greenlink, Tidel, Tranax 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.

                                       10
<PAGE>
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 671
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 348 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 and Karry Stores for whom
approximately 575 and 95 ATMs, respectively, have been installed at their
locations as of December 31, 2003. 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 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 and
Karry Stores accounted for approximately 66% and 3.4% of our revenues in fiscal
year 2003, respectively. Kash n Karry stores closed 35 stores in early 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.

                                       11
<PAGE>
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 Memphis,
Tenn.-based Concord EFS Inc., 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 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.

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.


                                       12
<PAGE>
During the past two fiscal years ending December 31, 2003 and 2002, the amount
of research and development costs amounted to $270,596 and $252,986,
respectively. The amount of these activities borne directly by customers was $0.


Employees

At December 31, 2003, the Company had 36 full time employees working in the
following subsidiaries:

Global Axcess Corp                4
Nationwide Money Services         21
EFT Integration                   2
Axcess Technology Corp            8
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
-----------------------------  --------------  --------------------------------
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

In general, all facilities are in good condition and are operating at capacities
that range from 65% to 100%. All facilities are leased under operating leases.
The monthly lease payments are based on the average number of ATMs stored at the
West Columbia facility during the preceding month. 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

On May 30, 2002, the Company filed an amended complaint in the Superior Court of
the  State  of California for the County of Orange against Fred G. Luke, Richard
Weed, and Weed & Co. In the complaint, the Company alleged that the defendants
or entities controlled by the defendants, improperly received approximately
1,400,000 shares of common stock of the Company pursuant to three Form S-8
Registration Statements as filed with the Securities and Exchange Commission on

                                       13
<PAGE>
March 30, 2000, May 30, 2001 and October 12, 2001. The Company is seeking
damages in an amount to be proven at trial, that the Agreement and Amended
Agreement entered into with Fred G. Luke be rescinded, that a temporary
restraining order, a preliminary injunction and a permanent injunction be issued
enjoining defendants from transferring 500,000 shares of common stock of the
Company and the payment of reasonable attorney's fees. A settlement has been
reached with Richard Weed and Weed & Co. during February, 2004. The settlement
arrangements are confidential and resolution of this matter will not have a
material adverse effect on the Company's operations.


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 offered to pay
$19,815 plus BSA attorney fees. The Company's management believes that potential
losses resulting from the resolution of this matter will not have a material
adverse effect on the Company's consolidated results of operations, cash flows
or financial position. There have been no changes in the status of threatened
infringement.

During April 2003, the Company received a notification from the District Court
of the State of Texas for the County of Dallas, in regards to a complaint by Mr.
Vaneet Duggal, against Nationwide Money Services, Inc., claiming the Company
(through the Tallent acquisition) owed Mr. Duggal $106,712, for vault cash. The
Company has an agreement with Mr. Jimmy Tallent indemnifying the Company,
specifically for any claims brought by Mr. Duggal. During February, 2004 the
Company, Jimmy Tallent and Mr. Duggal settled the claim. As of December 31, 2003
the Company has reserved for an amount of its settlement in the financial
statements and the settlement will not have a material impact on the Company's
consolidated results of operations, cash flows or financial position.

During June 2003, the Company received notification from the District Court of
the State of Texas for the County of Harris, in regards to the complaint filed
by Terran Reneau, Joseph Klimek, L. Micheal Howard and Charlotte Howard,
claiming ATM International, Inc., SmartATM and Randell Coleman fraudulently
transferred assets to the Company, naming the Company in the filing, the value
of which is undetermined. Although it cannot provide assurance, the Company
believes that this filing is unfounded since the acquisition of assets was
completed before any of the original filings against ATM International, Inc.
occurred. Subsequent to the year ended December 31, 2003 the Company has settled
with the plaintiffs, with no liability to the Company. 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.

Subsequent to December 31, 2003, 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.

                                       14
<PAGE>
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

On October 24, 2003, we held our annual meeting of shareholders.
At this meeting there were 25,166,213 shares represented either in person or by
proxy, which accounted for approximately 67% of the outstanding shares of our
common stock. The following percentages of shares represented voted in favor of
the following actions in the percentages shown:

     o    67% voted to approve the election of Messrs. Michael J. Dodak, David
          Fann, Steve Mortensen, Don Headlund, Lock Ireland and Robert Landis as
          members of the Board of Directors to serve until the next meeting of
          shareholders; and

     o    67% voted to change the appointment of our independent auditors to
          Weinberg & Co. from LL Bradford, LLP, and


     o    67% voted for the approval of the amendment to the Articles of
          Incorporation to increase the number of authorized shares of Common
          Stock from 75,000,000 to 125,000,000 shares of Common Stock authorized

                                       15
<PAGE>
                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

We are authorized to issue a total of 125,000,000 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, 2004, there were 80,348,772 shares of
the Company's Common Stock ($0.001 par value) issued and outstanding.

On March 10, 2004, there were 719 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 2003:
                    First Quarter                     $  .15   .06
                    Second Quarter                       .29   .06
                    Third Quarter                        .36   .17
                    Fourth Quarter                       .36   .30
                    Fiscal Year                          .36   .06

                  Fiscal 2002:
                    First Quarter                     $  .07   .04
                    Second Quarter                       .56   .06
                    Third Quarter                        .44   .17
                    Fourth Quarter                       .21   .06
                    Fiscal Year                          .56   .04

We have paid no dividends on our common stock during the fiscal year ended
December 31, 2003, 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, 2003, we had the following securities authorized for issuance
under the equity compensation plans:
<TABLE>
<CAPTION>
                                                                                                         Number of
                                                                                                         securities
                                                                  Number of                              remaining
                                                                  Securities                             available for
                                                                  to be issued                           future issuance
Plan Category                                                     upon           Weighted-               under equity
                                                                  exercise of    avererage exercise      compensation
                                                                  outstanding    price of                plans (excluding
                                                                  options,       outstanding options,    securities
                                                                  warrants and   warrants and            reflected in
                                                                  rights         rights                  column (a)



<S>                                                               <C>              <C>                   <C>
Equity compensation plans approved by security holders
     Stock Options                                                9,335,000        $ 0.53                3,165,000
     Warrants                                                     1,333,316        $ 9.17                   --
Equity compensation plans not approved by security holders             --           --                     --
Total                                                            10,668,316        $ 1.61                3,165,000
</TABLE>

Recent Sales of Unregistered Securities

In October 2003, the Company issued 750,000 shares of common stock to Docutel
Services Corp. for the purchase of a Clearinghouse Services contract in
connection with the Community Technology Network Program (CTNP). The shares were
valued at a price of $.35 per share.

In connection with the private placement conducted by the Company, the Company
issued 7,980,000 shares of common stock at a price of $0.25 per share; and
15,960,000 common stock purchase warrants at an exercise price of $0.35 per
share during the three months ending December 31, 2003 for gross proceeds in the
amount of $1,995,000.

On September 8, 2003 the Company authorized the sale of 4,000,000 units to
accredited investors at a price of $0.50 per unit, for an offering price of
$2,000,000. Each unit consisted of two shares of common stock at $0.001 par
value per share, of the Company and one stock purchase warrant exercisable at

                                       16
<PAGE>
$0.35. The Company reserved the right to increase the number of units by up to
20%, which would result in the offering of an additional 1,600,000 shares and
800,000 warrants. The period of the offering was for 90 days with the right to
extend the Offering for an additional 90 days. The Company may offer the Units
through broker-dealers who are members of the National Association of Securities
Dealers, Inc., provided however that sales made directly to investors by
officers or directors of the Company, that no commission or any other form of
remuneration will be paid. The Offering was not complete until subsequent to
December 31, 2003. The total net proceeds as of December 31, 2003 was
$1,836,873.

The use of proceeds were for an acquisition of assets (as described in Item 1,
paragraph (4))

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.

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," "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.

Critical Accounting Policies

                                       17
<PAGE>
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 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.

                                       18
<PAGE>
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.

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, The 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 also requires expanded disclosures by the primary
beneficiary (as defined) of a variable interest entity and by an enterprise that

                                       19
<PAGE>
holds a significant variable interest in a variable interest entity but is not
the primary beneficiary. Interpretation No. 46 applies immediately to variable
interest entities created after January 31, 2003, and to variable interest
entities in which an enterprise obtains an interest after that date. It applies
in the first fiscal year or interim period beginning after June 15, 2003, to
variable interest entities in which an enterprise holds a variable interest that
it acquired before February 1, 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.

In June 2003, the FASB issued an Exposure Draft for proposed SFAS entitled
"Qualifying Special Purpose Entities ("QSPE") and Isolation of transferred
Assets", an amendment of SFAS No. 140 ("The Exposure Draft"). The Exposure Draft
is a proposal that is subject to change and as such, is not yet authoritative.
If the proposal is enacted in its current form, it will amend and clarify SFAS
140. The Exposure Draft would prohibit an entity from being a QSPE if it enters
into an agreement that obliged a transferor of financial assets, its affiliates,
or its agents to deliver additional cash or other assets to fulfill the
special-purposes entity's obligation to beneficial interest holders.

In April 2003, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 149, "Amendment of
Statement 133 on Derivative Instruments and Hedging Activities". SFAS No. 149
amends and clarifies financial accounting and reporting for derivative
instruments, including certain derivative instruments embedded in other
contracts (collectively referred to as derivatives) and for hedging activities
under SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities". The changes in SFAS No. 149 improve financial reporting by
requiring that contracts with comparable characteristics be accounted for
similarly. This statement is effective for contracts entered into or modified
after June 30, 2003 and all of its provisions should be applied prospectively.

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

                                       20
<PAGE>
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.

The Company, through its wholly owned subsidiaries, owns and operates Automatic
Teller Machines ("ATM") with locations primarily in the Eastern 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 a cash withdrawal
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

                                       21
<PAGE>
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
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.

                                       22
<PAGE>
Comparison of Results of Operations for the Fiscal Years Ended December 31,
2003 and 2002

Revenues. Our total revenues decreased 6% to $10,201,765 for the fiscal year
ended December 31, 2003 ("fiscal 2003") from $10,815,396 for the fiscal year
ended December 31, 2002 ("fiscal 2002"). This decrease is due to a number of
factors, but is mainly due to the fact that the revenue generated by Nationwide
Money Services declined from the de-install of approximately 150 ATM's during
the year. This decrease in ATM sites was mainly due to reductions in
unprofitable site locations.

Cost of Revenues. Our total cost of revenues decreased by 16% from $7,424,710 or
68.6% of revenue to $6,377,846 or 62.5% of revenue in fiscal years ending
December 31, 2002 and 2003, 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 the reduction of unprofitable site locations
and the increase in branded cash locations under the Branded Cash Program.

Gross Margin. Gross profit as a percentage of revenues was 31.3% in 2002 and
37.5% in 2003. The increase in fiscal 2003 was caused by a number of factors,
including the factors listed above in Cost of Revenue.

Operating Expenses. Our total operating expenses decreased to $3,665,794 or 35.9
% of revenue in fiscal 2003 from $3,810,110 or 35.2 % of revenue in fiscal 2002.
The principal components of operating expenses are first: general and
administrative expenses such as; professional fees, administrative salaries and
benefits, consulting fees, occupancy costs, sales and marketing expenses and
administrative expenses, and second: depreciation and amortization.
The reduction in operating expenses is mainly attributable to a reduction in
depreciation and amortization.

Depreciation and Amortization. Depreciation and amortization has reduced in
fiscal year 2003 to $790,795 from $1,064,703 in fiscal year 2002. This reduction
in depreciation and amortization expense was due to several factors: the first
is that several of the assets have been fully depreciated during fiscal 2003;
and second the increased life of the Food Lion contract by 4.5 years reduced the
level of amortization of the contracts during the second half of the fiscal year
ended 2003; last the change in depreciable lives of the fixed assets in later
part of 2002 reduced the amount of depreciation for fiscal year 2003.

Interest Expense. Interest expense was increased slightly to $108,082 or 1% of
revenue in fiscal 2003 from $103,365 or 1% or revenue in fiscal 2002. This was
mainly due to the increase of various leases during the fiscal year 2003 of
about $202,884.

Other Income/Expense. Other income decreased to $261,023 in fiscal year 2003 as
compared to other income of $627,349 in fiscal year 2002. The income in fiscal
year 2003 was attributable to debt cancellation by note holders. In fiscal year
2002 the income we had was a one time income in connection with the receipt of
approximately $282,500 in cash from Humboldt Bank to settle outstanding issues
between Nationwide Money Services and Humboldt Bank. We also had a one-time
income of $377,805 from the settlement of various issues with former
shareholders of Tallent LLC see Item 1, "Description of Business - Overview."

Stock based compensation. Stock based compensation decreased to $12,675 in
fiscal year 2003 from $141,899 for fiscal year 2002.

Income before Taxes. We had income before taxes of $311,066 during the fiscal
year ended December 31, 2003 compared to income of $104,560 during the fiscal
year ended December 31, 2002 as a result of the factors discussed above.

                                       23
<PAGE>
Income Taxes. We paid $1,200 of income taxes in fiscal 2003 and no income taxes
for fiscal 2002, as a result of a loss in 2001 and a carryforward from 2001 of
$6,623,640. We have unused operating loss carry forwards which will expire in
various periods through 2022.

IMPAIRMENT OF GOODWILL

Management has reviewed the remaining value of goodwill and merchant contracts
of $2,312,926, which is attributable to the acquisition of Nationwide Money
Services, Inc. and its wholly owned subsidiary, EFT Integration; and the
acquisition of the Clearinghouse Services Agreement, and has determined that
there is no impairment of these assets based upon future expectations of cash
flow.

RELATED PARTY TRANSACTIONS

During fiscal year 2003 there were several related party transactions as noted
below:

During the fiscal year 2003 two loans payable from related parties were paid
off, one loan for $5,000 and another for $257,447.

During September 2003, a principal shareholder canceled related party debt of
$6,295.

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. See
Item 10, "EXECUTIVE COMPENSATION" for more detail.

LIQUIDITY AND CAPITAL RESOURCES

Working Capital. As of December 31, 2003, the Company had current assets of
$2,698,552 and current liabilities of $1,275,462 which results in a working
capital of $1,423,090 as compared to current assets of $732,206 and current
liabilities of $2,144,841 resulting in a working capital deficit of $1,412,635
in 2002. The ratio of current assets to current liabilities increased to 2.11 at
December 31, 2003 from .34 at December 31, 2002. Thus, the overall working
capital increased by $2,835,725. The increase in working capital resulted mainly
from two Private Placement Offerings during fiscal year 2003 for a total of
$2,467,971.

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 $187,768 and $734,699 in fiscal 2003 and fiscal 2002,
respectively. Net cash provided by operating activities in fiscal 2003 consisted
primarily of a profit of $309,866 a decrease in depreciation and amortization to
$790,795 by 273,908, an increase in accounts receivable of $169,082, a reduction
of amounts due to related parties by $161,152, a reduction of accounts payable
and accrued liabilities of $325,264 and other changes in operating assets and
liabilities of $3,628.

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

                                       24
<PAGE>
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 $2,500,000 total raise in
equity financing during the year ended December 31, 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 2003. From the
two (2) Private Placements Offerings additional funds will become available from
the callable sections of warrants attached to the common stock sold in these
Offerings. 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 is expecting
that over $2,000,000 will be called 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
or debt financings. The Company estimates to continue its current business plan
and acquisition strategy, it will require approximately $2,500,000 in additional
working capital to meet its needs for the next 12 months for such items as new
ATMs, software development, card development and 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 days 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
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 12/31/2002,
          Nationwide Money had 37 ATMs funded by Palm Desert with a vault cash
          outstanding balance of about $870,000. In January 2003, we entered
          into an arrangement with Palm Desert allowing us to obtain up to
          $10,000,000 in vault cash. As of February 28, 2004, the Company had
          108 ATMs with $1,900,000 outstanding vault cash with Palm Desert. 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,

                                       25
<PAGE>
          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. As of December 31, 2003, approximately
          $2,500,000 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    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 12/31/03,
          Nationwide Money had 35 branded partners, which funded 348 ATMs in 8
          states, with about $9.5 million in outstanding vault cash.

     o    Ocean National Bank. Nationwide Money entered into an agreement with
          Ocean National Bank on November 18, 1998 as a result of a lawsuit
          settlement. The settlement provided Nationwide Money with varying
          amounts of vault cash over the term of the agreement to manage and
          fund Nationwide Money owned and operated ATMs that were located east
          of the Mississippi. The vault cash amount designated for February 1,
          2003 to December 31, 2003 is $1,500,000.00. During the term of this
          agreement, Nationwide Money staff has managed the daily movement of
          the vault cash and has provided monthly reconciliation reports to
          Ocean National Bank. The interest rate is 15% per annum. The contract
          completed and was terminated on 12/31/2003 at which time Nationwide
          Money returned the full amount of the vault cash ($1,500,000.00) back
          to Ocean National Bank. Nationwide Money replaced these funds with
          vault cash from other cash providers such as Palm Desert and WSFS, as
          well as its branded cash partners.


As a result of certain factors, our working capital has increased from the same
period a year ago. We had negative working capital of $1,412,635 on December 31,
2002 and this has changed to a positive working capital of $1,423,090 at
December 31, 2003. This increase in working capital is mainly due the two
Private Placement Offerings. Some of the cash portion was used to payoff lease
obligations, notes due to related parties, notes payable and to purchase fixed
assets and ATM equipment. 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 &

                                       26
<PAGE>
Transfer, Corp. The majority of the funds remaining will be used to make
acquisitions.

Subsequent to December 31, 2003 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.

The 900 ATM Merchant contracts are expected to add approximately $100,000 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. For
2003, we had $804,912 non-cash items compared with $575,215 in non-cash items
for 2002. 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 182 of our ATMs under capital lease
agreements that expire by March 2004 and provide for lease payments at interest
rates up to 10.5% per annum. In 2003 we acquired approximately $203,000 of new
lease financing for ATMs which are expiring in fiscal year 2006. See Note 8 to
the Consolidated Financial Statements. We have the following payment obligations
under current financing and leasing arrangements:

                                   Payments Due by Period

                                    Less than
                             Total    1 year     1 year    2-9 Years
                           ------------------------------------------
Notes payable               $495,946   $139,501    $78,334  $278,111
Capital lease obligations    363,360    165,484    126,428    71,748
Operating leases             487,599    201,180    200,695    85,724
                            --------- ---------  ---------  ---------
Total contractual cash
 obligations              $1,347,205   $506,165   $405,457  $435,583

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.

                                       27
<PAGE>
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;

      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.


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.

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:

Limited Operating History

                                       28
<PAGE>
As a result of the Company's limited operating history, its plan for rapid
growth, and the increasingly competitive nature of the markets in which it will
operate, the historical financial data is of limited value in evaluating its
future revenue and operating expenses. The Company's planned expense levels will
be based in part on expectations concerning future revenue, which is difficult
to forecast accurately based on current plans of expansion and growth. The
Company 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 it expands operations. To the extent that
these expenses precede, or are not rapidly followed by, a corresponding increase
in revenue, the Company's business, operating results, and financial condition
will suffer.

Dependence on Key Personnel

The Company's success depends upon the continued contributions of certain key
Personnel, who may be difficult to replace because of their extensive experience
in his field, extensive market contacts and familiarity with the Company's
activities. While the Company believes it has sufficient cross expertise, if any
key management employee were to cease employment, the Company's operating
results may suffer. The Company's future success also depends in large part upon
its ability to hire and retain additional highly skilled managerial, operational
and marketing personnel. Should the Company be unable to attract and retain
skilled personnel, the Company's performance may suffer.

Major Contract

The contract with a major customer (Food Lion) expired in September 2001. The
Company 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, the Company had renegotiated these contracts to extend the
lives until April, 2011 and has in service approximately 670 ATM sites. The
sites maintained by Food Lion and Kash n Karry constitute approximately 53% of
the total sites and 69.4% of total revenues of the Company. Historically, these
sites have generated average revenue per site in excess of other sites. If the
Company were to lose the Food Lion and Kash n Karry accounts, the revenues of
the Company would be substantially affected.

Debit Cards

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.

The Company has started Electronic Payment & Transfer Corp. to continue to
develop card based products, made up of payroll cards and other card products.

Other Factors

Government Regulation. There have been various efforts by both consumer groups
and various legislators to ban surcharge. In the event that such a ban takes
place, the revenue generated from cash withdrawal transactions would be
significantly reduced and would cause irreparable harm to the Company. There
have also been efforts by various legislators to ban interchange. Although this
would have a negative immediate impact, the Company believes, although it cannot
guarantee that the industry will respond by increasing surcharge to make up the
loss in interchange. In the event that the loss of interchange could not be
passed through via an increase in surcharge, the elimination of interchange
would severally impact the Company.

                                       29
<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 and EFT industries are 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

Competition

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

                                       30
<PAGE>
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.

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,
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.

If we fail to develop and introduce new and enhanced products and services, we
will not be able to compete effectively and our ability to generate revenues
will suffer.

We may be unable to protect our intellectual property rights.

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.

                                       31
<PAGE>
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 Auditors".


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
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, 2003, an evaluation was performed under the supervision and
with the participation of the Company's management, including the Chief


                                       32
<PAGE>
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, 2003. 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,
2003.


                                       33
<PAGE>

<PAGE>
                                    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, 2003 are as follows:

Name                   Age                 Positions
-------------          ---  -------------------------------------------
Michael Dodak           57        C.E.O. and Chairman
-------------          ---  -------------------------------------------
David Fann              49        President and Director
-------------          ---  -------------------------------------------
David Surette           44        C.F.O.
-------------          ---  -------------------------------------------
Robert Colabrese        48        Executive Vice-President of Sales
------------           ---  -------------------------------------------
George McQuain          48        CEO and COO of Nationwide Money
                                  Services, Inc.
------------           ---  -------------------------------------------
Steve Mortensen         43        Secretary and Director
-------------          ---  -------------------------------------------
Donald Headlund         70        Director
------------           ---  -------------------------------------------
Lock Ireland            60        Director
------------           ---  -------------------------------------------
Robert Landis           44        Director
------------           ---  -------------------------------------------
Georg Hochwimmer        35        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

                                       34
<PAGE>
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 in March 2003, 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. 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 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 will be responsible for the
day-to-day accounting and financial reporting of the Company.

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.
and EFT Integration, Inc and joined the Company in July 2002. At Nationwide
Money Services and EFT Integration, Mr. McQuain is responsible for strategic
planning, business plan execution and day-to-day operation. Mr. McQuain came to
Nationwide Money from Fairfax Station, Virginia where he served most recently as
an independent consultant in the implementation of a new product management
department with a leading software company.

As President and Chief Executive Officer of Ntercept Communications, he
decisively improved sales, marketing and product implementation. Prior to his
association with Ntercept Communications, Mr. McQuain led First Union National


                                       35
<PAGE>
Bank's national lockbox operations. At First Union, Mr. McQuain played a
significant role in shaping business strategy and in integrating QuestPoint's
international network into First Union. Prior to First Union, Mr. McQuain was
Chief Operating Officer of QuestPoint, a subsidiary of CoreStates Financial
Corporation. CoreStates was acquired by First Union in May 1998.

Mr. McQuain 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, Mr. McQuain
was head of sales, head of client service and quality, and head of operations.
While at NRC, Mr. McQuain is credited with successfully turning around
operational productivity and quality. Mr. McQuain's career also includes time at
Marriott Corporation, the United States Treasury Department, and the Office of
the President of the United States.

Mr. McQuain received his MBA in Finance and Management from George Mason
University in Fairfax, Virginia. Mr. McQuain is married and has three children.

Steven B. Mortensen, Secretary and Director

Since 1990, Mr. Mortensen has advised both internationally and domestically
based individuals, corporations, trust and partnerships with regard to domestic
and international investments. For the last five years, Mortensen has served as
President and Chairman of the Board of Net Holdings.com, Inc., predecessor to
Global Axcess Corp. In the late 80's he served as Comptroller for Life Style
Homes, Inc., a large residential homebuilder and also served as Senior Vice
President of the "B" paper division of Trump Mortgage Group, Inc. Mr. Mortensen
is currently heading up the due diligence of mergers and acquisitions for the
Company and assisting the CEO and President as needed.

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
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

                                       36
<PAGE>
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

Renowned in international business circles, Dr. Hochwimmer is a noted business
consultant and academic responsible for aiding in the development of several
highly profitable companies throughout Europe. Since 1994 Dr. Hochwimmer has
been a senior consultant on several engineering and organizational and
development projects; such as building up of a machinery equipment distribution
company, which included development of and ERP system, ISO 9002 and financial
controlling procedures. As the managing director of the Foundation of General
Research GmbH, a global business consulting firm, Dr. Hochwimmer also serves on
the board of directors of Maxxio Technologies AG, a telecommunications equipment
company; Lokando AG, an e-learning company; and Prevero AG, a business
intelligence company. In addition, Dr. Hochwimmer serves as managing director of
Bluespectrum GmbH. Widely published in international scientific publications;
Dr. Hochwimmer has earned advanced degrees in chemistry, machinery engineering,
computer sciences and polymer chemistry.

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

The Compensation Committee has met once in October 24, 2003. 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, 2003, the Audit Committee consists of the following members:
Lock Ireland, Donald Headlund and Robert Landis. Mr. Headlund and Mr. Landis
have been appointed to sit on the Audit Committee to serve as its audit
committee financial experts. The Audit Committee has met two times in fiscal
year 2003, and once on March 10, 2004, 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, 2003 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.

                                       37
<PAGE>
During 2003, there were four non-employee directors and three employee
directors. No Directors were compensated in the fiscal year 2003. Each director
for year 2003 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.

                                       38
<PAGE>
ITEM 10. EXECUTIVE COMPENSATION

The following table summarizes all compensation paid by us with respect to the
fiscal year ended December 31, 2003 for the Chief Executive Officer and all
other executive offices whose total cash compensation exceeds $100,000 in the
fiscal year ended December 31, 2003.

<TABLE>
<CAPTION>
                                           Annual Compensation            Long Term Awards
Name and Principal Position  Year        Salary ($)       Bonus ($)   Securities Underlying Options
---------------------------  ----        ----------       ---------   -----------------------------
<S>                          <C>         <C>                <C>           <C>     <C>
Michael Dodak                2003        $220,000                         750,000 (1)
  CEO and Chairman           2002        $220,002          $50,000        350,000
                             2001        $109,283                       2,822,250 (3)
David Fann                   2003        $200,000             --          750,000 (1)
  President                  2002         $80,000             --          350,000
David Surette                2003        $120,000             --          500,000 (1) (2)
  CFO                        2002              --             --               --
Robert Colabrese             2003        $135,000             --          300,000 (1)
  Executive Vice President
  Sales                      2002        $120,478             --          200,000
                             2001         $67,522                          25,000
George McQuain               2003        $130,000             --          300,000 (1)
  CEO & COO of NMS           2002         $60,000             --          200,000
</TABLE>

     (1) 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.

     (2) Includes 200,000 options granted at date of hire which vests over 3
years.

     (3) In 2001, Mr. Dodak was granted 1,500,000 stock options, which were
subsequently cancelled in 2002.

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, 2003.
<TABLE>
<CAPTION>
                                   % of Total
                            Number of Securities   Options Granted
                                 Underlying        in Fiscal 2003   Exercise Price    Expiration
           Name                Options Granted           (3)           Per Share       Date (4)
           ----                ---------------           ---           ---------       --------
<S>          <C>                   <C>                  <C>              <C>            <C>
David Surette(1)                   200,000              3.5%             $0.07         03/02/08
Mike Dodak(2)                      750,000             13.2%             $0.34         10/23/08
David Fann(2)                      750,000             13.2%             $0.34         10/23/08
Robert Colabrese(2)                300,000              5.3%             $0.34         10/23/08
George McQuain(2)                  300,000              5.3%             $0.34         10/23/08
David Surette(2)                   300,000              5.3%             $0.34         10/23/08
</TABLE>

(1) The options were granted upon hiring and are only 25% vested during 2003
(2) The options granted will not vest until after certain fiscal 2004 goals have
    been met.
(3) Based on a total of 5,697,000 options granted during the fiscal
    year ended December 31, 2003.
(4) Options may terminate before their expiration
    date upon death, disability, or termination of employment.

                                       39
<PAGE>

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

         The following table sets forth, for each of the named executive
officers, information concerning the number of shares received during fiscal
2003 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, 2003.
<TABLE>
<CAPTION>
                                                              Number of Securities
                       Shares Acquired       Value             Underlying Options       Value of In-The-Money Options
                       on Exercise (#)  Realized ($)(1)         at Year End (#)               at Year-End ($)(2)
Name                                                       Exercisable    Unexercisable   Exercisable    Unexercisable
----                   ---------------  ---------------    -----------    -------------   -----------    --------------
<S>                          <C>               <C>          <C>              <C>             <C>          <C>
Mike Dodak                    --               --              --           750,000           $0           $18,240

David Fann                    --               --              --           750,000           $0           $18,240
David Surette                 --               --            50,000         450,000        $14,500         $49,500
Robert Colabrese              --               --              --           300,000           $0            $6,000
George McQuain                --               --              --           300,000           $0            $6,000
</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, 2003, the last trading day of our 2003 fiscal year.

Employment Agreements

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

Michael Dodak has a two year employment contract from November 1, 2001 to
December 31, 2003, which has been extended for two additional years until
December 31, 2005 under Board and Mr. Dodak's approval. The agreement provides
Mr. Dodak with the following compensation: an annual salary of $220,000; an
annual bonus to be determined and awarded by the Compensation Committee; a
signing bonus of 1,322,250 shares of restricted stock; and a 12 month severance
agreement.

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 months, which has been increased to $200,000 once certain milestones

                                       40
<PAGE>
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.

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 10, 2004.

     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                                                  4,770,935            5.90%  (3)
David Fann                                                  4,336,384            5.36%  (4)
David Surette                                                 358,744            0.45%  (5)
Robert Colabrese                                            1,205,774            1.50%  (6)
George McQuain                                                167,500            0.21%  (7)
Steve Mortensen                                             1,906,437            2.37%  (8)
Don Headlund(2)                                                40,000            0.05%  (9)
Lock Ireland                                                  985,035            1.22%  (10)
Robert Landis                                                 300,000            0.37%  (11)
Georg Hochwimmer                                              100,000            0.12%  (12)

                                                         ------------------------------------
All executive officers and directors as a group
(10 persons)                                               14,170,809           17.18%
                                                         ------------------------------------


Other 5% owners:
Barron Partners, LP                                        18,000,000           19.49%  (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                   12,200,001           13.79%  (16)
Cardservice International, Inc.                             7,056,461            8.78%  (17)

                                                         ------------------------------------
                                                           61,656,464           52.81%
                                                         ------------------------------------

</TABLE>
The securities "beneficially owned" by a person are determined in accordance
with the definition of "beneficial ownership" set forth in the rules and
regulations promulgated under the Securities Exchange Act of 1934. Beneficially
owned securities may include securities owned by and for, among others, the
spouse and/or minor children of an individual and any other relative who has the
same home as such individual. Beneficially owned securities may also include
other securities as to which the individual has or shares voting or investment
power or which such person has the right to acquire within 60 days of March 10,
2004 pursuant to the conversion of convertible equity, exercise of options, or
otherwise. Beneficial ownership may be disclaimed as to certain of the
securities


(1)Based on 80,348,772 shares of common stock outstanding as of March 10, 2004.

(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, 2004:

(3)included are 4,258,435 common shares, 175,000 stock purchase options
exercisable at $0.18 per share and 337,500 exercisable at $0.34 per share

                                       41
<PAGE>
(4) included are 3,823,884 common shares, 175,000 stock purchase options
exercisable at $0.18 per share and 337,500 exercisable at $0.34 per share

(5) included are 191,244 common shares, 100,000 stock purchase options
exercisable at $0.07 per share and 67,500 stock purchase options exercisable at
$0.34 per share

(6) included are 1,025,774 common shares, 12,500 stock purchase options
exercisable at $0.135, 100,000 stock options exercisable at $0.18 and 67,500
stock options exercisable at $0.34

(7) included are 100,000 stock options exercisable at $0.18 and 67,500 stock
purchase options exercisable at $0.34

(8) included are 1,764,937 common shares, 75,000 stock options exercisable at
$4.00, 37,500 exercisable at $0.18 and 29,000 exercisable at $0.34

(9) included are 40,000 common shares

(10)included are 825,035 common shares, 100,000 stock options exercisable at
$0.22, and 60,000 stock purchase warrants exercisable at $0.35

(11) included are 100,000 common shares, 100,000 stock options exercisable at
$0.22 and 100,000 stock purchase warrants exercisable at $0.10

(12) included are 100,000 stock options exercisable at $0.33

(13)included are 6,000,000 common shares and 12,000,000 stock purchase warrants
exercisable at prices ranging from $0.35 to $1.00

(14)included are 4,066,667 common shares and 8,133,334 stock purchase warrants
exercisable at prices ranging from $0.35 to $1.00

(15)included are 4,066,667 common shares and 8,133,334 stock purchase warrants
exercisable at prices ranging from $0.35 to $1.00

(16)included are 4,066,667 common shares and 8,133,334 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 January 2002, the Company issued 1,076,250 shares of its common stock to
Daryl Idler, a stockholder and director of the Company, for a signing bonus
payable of $139,912.

In January 2002, the Company issued 1,562,666 shares of its common stock to
Steve Mortensen, a stockholder and director of the Company, for a signing bonus
payable of $203,147.

In January 2002, the Company issued 1,322,250 shares of its common stock to
Michael Dodak, a stockholder, officer, and director of the Company, for a
signing bonus payable of $171,892.

In May 2003, the Company issued 600,000 shares of its common stock to Michael
Dodak, 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, 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, stockholder, and officer of the Company, through a Private Placement
Offering in an amount of $20,000.

In June 2003, the Company issued 200,000 shares of its common stock to Steve
Mortensen, stockholder, officer and director of the Company, through a Private
Placement Offering in an amount of $10,000.

                                       42
<PAGE>
In June 2003, the Company issued 100,000 shares of its common stock to David
Surette, 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, 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, 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, stockholder, officer, and director of the Company, through a Private
Placement Offering in an amount of $20,000.

As of December 31, 2003, the Company had an unsecured promissory note in the
amount of $210,432 outstanding payable to a stockholder of the Company. The note
bears interest in the amount of 11% and is due in June 2013. In addition, as of
December 31, 2003, the Company had a secured promissory note outstanding in the
amount of $112,659 payable to Cardservices International, Inc., the former
parent company of Nationwide Money Services, Inc., and is presently a
shareholder of the Company. The note bears interest in the amount of 8%, is
secured by the Company's assets.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a) INDEX TO EXHIBITS


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(Incorporated by reference to form 10KSB
          filed with the SEC on March 31, 2003)


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.

                                       43
<PAGE>
32.2      Certifcation 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)


(b) Reports on Form 8-K

Change in Registrant's Certifying Accountant:
On July 1, 2003, the Company filed a Form 8-K Current Report disclosing that
Weinberg & Company, P.A. of Boca Raton, FL, were engaged as the Company's
independent public accountants to replace the Company's prior auditors, L.L.
Bradford, LLP.


Item 14.    PRINCIPAL ACCOUNTANT'S FEES AND SERVICES

During the fiscal year ended December 31, 2002, L.L. Bradford served as our
auditors and during the fiscal year ended December 31, 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, 2003 and 2002, and for the reviews of the financial
statements included in the Company's Quarterly Reports on Form 10-QSB during the
fiscal years were $87,149 and $68,921, respectively.

Audit Related Fees. For the years ended December 31, 2003 and 2002, the Company
incurred fees to auditors of $84,649 and $66,421 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, 2003 and 2002 were $2,500 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.


                                       44
<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 22nd day of March, 2004.

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

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

/s/Steve Mortensen
----------------
Steve Mortensen             Secretary, 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

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


                                       45
<PAGE>
                               GLOBAL AXCESS CORP.
                        CONSOLIDATED FINANCIAL STATEMENTS



                                TABLE OF CONTENTS


                                                                      PAGE NO.

Report of Independent Certified Public Auditors
       For the year ending December 31, 2003                            F-1

Report of Independent Certified Public Accountants
       For the year ending December 31, 2002                            F-2

Financial statements

     Consolidated balance sheet as of December 31, 2003                 F-4

     Consolidated statements of income for the years ended
              December 31, 2003 and 2002                                F-5

     Consolidated statements of stockholders' equity
              for the years ended December 31, 2003 and 2002            F-6

     Consolidated statements of cash flows for the years ended          F-9
              December 31, 2003 and 2002

     Notes to consolidated financial statements                         F-11




<PAGE>
                 REPORT OF INDEPENDENT CERTIFIED PUBLIC AUDITORS




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  as of December  31,  2003 and the  related  consolidated
statements of income,  stockholders'  equity,  and cash flows for the year ended
December  31,   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 audit.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting  Oversight  Board in the United  States of America.  Those  standards
require that we plan and perform the audit 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 audit  provides 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, 2003 and the  consolidated  results of their
operations  and cash flows for the year ended  December  31, 2003 in  conformity
with accounting principles generally accepted in the United States of America.



Weinberg & Company, P.A.
February 20, 2004



                                      F-2
<PAGE>

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS




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

We have  audited  the  consolidated  balance  sheet of Global  Axcess Corp as of
December  31,  2002  and the  related  consolidated  statements  of  operations,
stockholders' equity, and cash flows for the year ended December 31, 2002. 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 audit.

We conducted our audit in accordance with auditing standards  generally accepted
in the United States. Those standards require that we plan and perform the audit
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 audit
provides 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
as of December 31, 2002 and the  consolidated  results of their  operations  and
cash flows for the year ended  December 31, 2002 in conformity  with  accounting
principles generally accepted in the United States.



L.L. Bradford & Company, LLC
January 31, 2003
Las Vegas, Nevada



                                       F-3
<PAGE>

                       GLOBAL AXCESS CORP AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 2003


                                                  ASSETS




Current assets
     Cash                                                         $   1,832,079
     Automated teller machine vault cash                                298,705
     Accounts receivable, net                                           450,676
     Prepaid expense and other current assets                           117,092
                                                                ----------------
        Total current assets                                          2,698,552

Fixed assets, net                                                     1,840,792

Other assets
     Intangible assets, net                                           2,312,926
     Other assets                                                        21,981
                                                                ----------------

Total assets                                                      $   6,874,251
                                                                ================

 LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
     Accounts payable and accrued liabilities                     $     783,326
     Automated teller machine vault cash payable                        298,705

     Notes payable-related parties  - curent portion                     48,320
     Notes payable - current portion                                     40,000
     Capital lease obligations - current portion                        105,111
                                                                ----------------
        Total current liabilities                                     1,275,462

Long-term liabilities
     Notes payable-related parties - long-term portion                  274,771

     Capital lease obligations - long-term portion                      201,558
                                                                ----------------

Total liabilities                                                     1,751,822


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
     Additional paid-in capital                                      11,257,161
     Common stock payable                                                32,500
     Accumulated deficit                                             (6,213,514)
                                                                ----------------
        Total stockholders' equity                                    5,122,430
                                                                ----------------

Total liabilities and stockholders' equity                        $   6,874,251
                                                                ================

          See Accompanying Notes to Consolidated Financial Statements

                                       F-4
<PAGE>

                       GLOBAL AXCESS CORP AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>


                                                   For the year ended                For the year ended
                                                   December 31, 2003                 December 31, 2002


<S>                                                         <C>                           <C>
Revenues                                           $     10,201,765              $      10,815,396


Cost of revenues                                          6,377,846                      7,424,710
                                                   -------------------------     ------------------------


     Gross profit                                         3,823,919                      3,390,686
                                                   -------------------------     ------------------------

Operating expenses

     Depreciation and Amortization                          790,795                      1,064,703

     Selling, general and administrative                  2,874,999                      2,745,407
                                                   -------------------------     ------------------------
        Total operating expenses
                                                          3,665,794                      3,810,110
                                                   -------------------------     ------------------------



     Income/(Loss) from Operations                          158,125                       (419,424)
                                                   -------------------------     ------------------------

Other income (expense)

     Settlement income                                           --                        377,805

     Foregiveness of Debt                                   261,023                             --

     Other (expense)/income                                  (1,200)                       282,500

     Loss on sale of fixed asset                                  -                        (32,956)

     Interest expense                                      (108,082)                      (103,365)
                                                   -------------------------     ------------------------
        Total other income
                                                            151,741                        523,984
                                                   -------------------------     ------------------------


Income before provision for income taxes                    309,866                        104,560


Provision for income taxes                                       --                             --
                                                   -------------------------     ------------------------

Net income                                         $        309,866              $         104,560
                                                   =========================     ========================


Basic income per common share                      $           0.01              $            0.00
                                                   =========================     ========================


Diluted income per common share                    $           0.00              $            0.00
                                                   =========================     ========================
Basic weighted average

     common shares outstanding                           35,163,217                     23,080,116
                                                   =========================     ========================
Diluted weighted average

     common shares outstanding                           72,572,835                     29,134,969
                                                   =========================     ========================
</TABLE>



           See Accompanying Notes to Consolidated Financial Statements

                                       F-5
<PAGE>
                       GLOBAL AXCESS CORP AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

<TABLE>
<CAPTION>
                                                                                        Prepaid
                                                                                        Consulting
                                                                                        Services
                                               Common Stock              Additional     Paid in                        Total
                                              -------------              Paid-in        Common        Accumulate       Stockholders'
                                                 Shares       Amount    Capital         Stock         Deficit          Equity
                                              -----------  -----------  -----------   -----------      -----------    -----------

<S>                                                <C>          <C>        <C>         <C>                 <C>             <C>
Balance, December 31, 2001                    18,590,172     $18,590   $ 7,592,371    $        --       $(6,628,171)    $ 982,790

Issuance of common stock in January
  2002 for due to related parties,
  $0.13 per share                              3,961,166       3,961       510,990             --                --       514,951


Issuance of common stock in February
  2002 for stock payable to Cashlink
  International, Inc., $0.48
  Per share                                       80,000          80        38,320             --                --        38,400

Cancellations of shares in April
  2002 previously issued to consultants
  in December 2001                              (300,000)       (300)          300             --                --


Issuance of common stock June
  2002 for consultant services (including
  accounts payable of $4,364),
  $0.12 per share                                 65,000          65         7,540             --                --         7,605


Issuance of common stock in June
  2002 for employee services,
  $0.05 per share                              1,264,400       1,264        67,013             --                --        68,277


Issuance of common stock in July 2002
  For consulting services                        100,000         100        14,900             --                --        15,000

Issuance of common stock in August
  2002 for exercise of stock options,
  $0.14 per share                                  5,000           5           670             --                --           675

Cancellations of shares in August
  2002 previously issued to directors
  in January 2002 for due to related
  parties                                     (1,020,000)     (1,020)        1,020             --                --            --


Issuance of common stock in September
  2002 for consulting services,
  weighted average price of $0.08                313,410         313        25,758             --                --        26,071

Issuance of common stock in October
  2002 for consulting services,
  weighted average price of $0.13                219,000         219        29,091             --                --        29,310

Issuance of common stock in December
  2002 for prepaid consulting services,
  $0.07 per share                                250,000         250        17,250        (17,500)               --            --

Net Income                                            --          --            --             --           104,560       104,560
                                             -----------   ----------   ----------     -----------      -----------   -----------
Balance, December 31, 2002                    23,528,148     $23,527    $8,305,223       $(17,500)      $(6,523,611)  $ 1,787,639
                                             ===========   ==========   ==========     ===========      ===========   ===========
</TABLE>

          See Accompanying Notes to Consolidated Financial Statements


                                       F-6
<PAGE>


                       GLOBAL AXCESS CORP AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002
<TABLE>
<CAPTION>
                                                                                      Prepaid
                                    Common Stock                                    Consulting
                              ---------------------------    Additional              Services                             Total
                                                             Paid-in    Common Stock  Paid in       Accumulated       Stockholders'
                                  Shares      Amount         Capital     Payable    Common Stock      Deficit            Equity
                             ------------   -----------   ------------ ------------ ------------- ---------------  ----------------
<S>                              <C>               <C>            <C>         <C>            <C>          <C>               <C>
Cancellation of shares
 in March 2003,
 previously issued
 for an aqcuisition              (655,000)        (655)          655          --            --             --                --

Shares on administrative
  hold andoutstanding           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)         --            --             --                --

Cancellation 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


                                       F-7
<PAGE>
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

Issuence of Stock options in
 December 2003 based upon fair
 value  black - scholes 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)    $  5,122,429
                             ============   ===========  ============  ============ ============= ===============  ================
</TABLE>

           See Accompanying Notes to Consolidated Financial Statements

                                       F-8
<PAGE>
                       GLOBAL AXCESS CORP AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                For the year ended            For the year ended
                                                                 December 31, 2003             December 31, 2002
                                                                 ----------------              ----------------
<S>                                                                   <C>                           <C>
Cash flows from operating activities:

     Net income                                                       $  309,866                    $   104,560
     Adjustments to reconcile net income to net
      cash provided by operating activities:

        Stock based compensation                                          12,675                        141,899

        Depreciation and amortization                                    790,795                      1,064,703

        Loss on sale of fixed assets                                       --                            32,956

        Settlement income/Cancellation of debt                          (261,023)                      (276,305)
     Changes in operating assets and liabilities:

        Change in automated teller machine vault cash                    (35,002)                     2,361,430

        Change in accounts receivable                                   (169,082)                       168,708

        Change in prepaid expenses and other current assets              (29,251)                       (87,830)

        Change in other assets                                            20,204                        (26,520)

        Change in accounts payable and accrued liabilities              (325,264)                      (335,472)

        Change in automated teller machine vault cash payable             35,002                     (2,361,430)

        Change in due to related parties                                (161,152)                       (52,000)
                                                                 ----------------               ----------------
           Net cash provided by operating activities
                                                                         187,768                        734,699
                                                                 ----------------               ----------------
Cash flows from investing activities:

     Purchase of fixed assets                                           (537,904)                      (105,050)

     Proceeds from sale of fixed assets                                     --                           80,300
                                                                 ----------------               ----------------
           Net cash used in investing activities                        (537,904)                       (24,750)
                                                                 ----------------               ----------------
Cash flows from financing activities:

     Proceeds from issuance of common stock                            2,467,971                            675

     Proceeds form borrowing on notes payable - related parties            --                           100,000

     Principal payments on notes payable                                 (31,583)                       (32,643)

     Principal payments on notes payable - related parties              (130,019)                       (63,584)

     Principal payments on capital lease obligations                    (240,722)                      (852,851)
                                                                  ----------------              ----------------
           Net cash provided by (used in) financing activities         2,065,647                       (848,403)
                                                                  ----------------              ----------------


Increase/(decrease) in cash                                            1,715,511                       (138,454)


Cash, beginning of year                                                  116,568                        255,022
                                                                  ----------------              ----------------


Cash, end of year                                                     $1,832,079                       $116,568
                                                                  ================              ================
Supplemental disclosure of cash flow information:

     Cash paid for income taxes                                       $    --                          $   --
                                                                  ================              ================
     Cash paid for interest

                                                                      $   98,082                       $104,923
                                                                  ================              ================
</TABLE>
           See Accompanying Notes to Consolidated Financial Statements

                                       F-9
<PAGE>
                       GLOBAL AXCESS CORP AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                         For the year ended              For the year ended
                                                         December 31, 2003                December 31, 2002
                                                         ----------------                  ---------------
<S>                                                      <C>                                <C>
Supplemental schedule of non-cash investing and financing activities:

Issuance of 3,961,166 shares of common stock in
satisfaction of due to related parties                   $       --                        $      514,951
                                                         ===============                   ===============
Issuance of 80,000 shares of common stock in
satisfaction of


     stock payable to Cashlink International             $      --                         $       38,400
                                                         ===============                   ===============
Issuance of 65,000 shares of common stock for accounts


     payable (excluding services of $3,241)              $      --                         $        4,364
                                                         ===============                   ===============
Issuance of 250,000 shares of common stock for prepaid


     consulting services                                 $      --                         $       17,500
                                                         ===============                   ===============
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                   $         --
                                                         ===============                   ===============
Cancellation of 655,000 shares of common stock


                      previously issued                  $           655                   $         --
                                                         ===============                   ===============
Debt cancellation of notes payable related parties
                                                         $       243,981                   $         --
                                                         ===============                   ===============


Debt cancellation of notes payable                       $        17,042                   $         --
                                                         ===============                   ===============

Debt cancellation of related party debt
of principal shareholder                                 $         6,925                   $         --
                                                         ===============                   ===============
</TABLE>
           See Accompanying Notes to Consolidated Financial Statements

                                      F-10

<PAGE>
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.

     On October 12, 2003, the Company started Axcess Technology Corporation 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.

     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.

     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.

     Merchant contract concentration - The Company contracts the locations for
     its machines with various merchants. As of December 31, 2003, the Company
     has approximately 1,438 active machines, of which approximately 670
     machines are contracted through a single merchant. Revenues from these
     merchants represent approximately 69.4% 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.

     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.

     Effective April 1, 2002, the Company made changes in the estimated useful
     lives of certain ATM equipment to better reflect the Company's experience
     as to the service lives and revenue collected from that equipment. This
     change decreased depreciation expense approximately $624,000 for the year
     ended December 31, 2002.


                                      F-11
<PAGE>
     Goodwill - 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 - The Company's intangible assets are made up of
     contracts with economic contract lives. The contracts are amortized over
     the economic lives of the contracts.

     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.
     During the year ended December 31, 2003, 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 of the at
     December 31, 2003. The carrying values of all other financial instruments
     approximate their fair value.

     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.

     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 (loss) - The Company has no components of other
     comprehensive income. Accordingly, net loss equals comprehensive loss 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, 2003 and 2002.

                                       F-12
<PAGE>
     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.

     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:
<TABLE>
<CAPTION>
                                                                           2003            2002
                                                                       --------------  -------------
                  <S>                                                     <C>             <C>
                  Net income, as reported                              $     309,866   $     104,560
                  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                               (673,752)       (504,617)
                                                                       --------------  --------------
                  Pro forma net (loss)                                 $    (363,886)  $    (400,057)
                                                                       ==============  ==============
                  Net income/(loss) per common share
                  Basic and diluted income, as reported                $        0.01   $        0.00
                                                                       ==============  ==============
                  Basic and diluted (loss), pro forma                  $       (0.01)  $       (0.02)
                                                                       ==============  ==============
</TABLE>
     In December 2002, the 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.

     Recent accounting pronouncements -

     In January 2003, the 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 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 applies
     immediately to variable interest entities created after January 31, 2003,
     and to variable interest entities in which an enterprise obtains an
     interest after that date. It applies in the first fiscal year or interim
     period beginning after June 15, 2003, to variable interest entities in
     which an enterprise holds a variable interest that it acquired before
     February 1, 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-13
<PAGE>
     In June 2003, the FASB issued an Exposure Draft for proposed SFAS entitled
     "Qualifying Special Purpose Entities ("QSPE") and Isolation of transferred
     Assets", an amendment of SFAS No. 140 ("The Exposure Draft"). The Exposure
     Draft is a proposal that is subject to change and as such, is not yet
     authoritative. If the proposal is enacted in its current form, it will
     amend and clarify SFAS 140. The Exposure Draft would prohibit an entity
     from being a QSPE if it enters into an agreement that obliged a transferor
     of financial assets, its affiliates, or its agents to deliver additional
     cash or other assets to fulfill the special-purposes entity's obligation to
     beneficial interest holders.

     In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
     Derivative Instruments and Hedging Activities". SFAS No. 149 amends and
     clarifies financial accounting and reporting for derivative instruments,
     including certain derivative instruments embedded in other contracts
     (collectively referred to as derivatives) and for hedging activities under
     SFAS No. 133, "Accounting for Derivative Instruments and Hedging
     Activities". The changes in SFAS No. 149 improve financial reporting by
     requiring that contracts with comparable characteristics be accounted for
     similarly. This statement is effective for contracts entered into or
     modified after June 30, 2003 and all of its provisions should be applied
     prospectively.

     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.

     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 is $425,484 and the purchase price is being amortized over the
     life of the contract or 84 months. Docutel Services Corp. is eligible to
     receive additional stock options based upon certain performance goals
     outlined in the asset purchase agreement. If certain volumes are not met,
     then the Company will be eligible to receive all shares and options back.

                                       F-14
<PAGE>
3.   Fixed assets
<TABLE>
<CAPTION>
     Fixed assets consist of the following as of December 31, 2003:

          <S>                                                                              <C>
         Automated teller machines                                                      $      3,421,080
         Furniture and fixtures                                                                    6,698
         Computers, equipment and software                                                       791,231
         Automobiles                                                                              30,152
         Leasehold equipment                                                                      13,454
                                                                                        ----------------
                                                                                               4,262,615
         Less: accumulated depreciation and amortization                                       2,421,822
                                                                                        ----------------

         Fixed assets, net                                                              $      1,840,792
                                                                                        ================
</TABLE>
                                       F-15
<PAGE>
4. INTANGIBLE assets
<TABLE>
<CAPTION>
     Intangible assets consist of the following as of December 31, 2003:

       <S>                                                                                <C>
         Goodwill                                                                       $      1,311,195
         Merchant contracts                                                                    1,503,884
                                                                                        -----------------
                                                                                               2,815,079
         Less: accumulated amortization                                                         (502,153)
                                                                                        -----------------

         Intangible assets, net                                                         $      2,312,926
                                                                                        =================
</TABLE>
5. 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, 2003. As of December 31, 2003, automated teller
     machine vault cash payable of $298,705 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, bearing no interest and due on demand.

     During 2002, the Company paid $1,900,000 of a $2,000,000 promissory loan,
     recorded as vault cash payable, provided by Cardservice International, Inc.
     (former parent company of Nationwide Money Services, Inc. now stockholder
     of Global Axcess Corp.). Two other notes were combined during 2002 leaving
     a balance as of December 31, 2002 of $209,129. $100,000 was paid on the
     balance in April 2003, and the balance of the loan with added accrued
     interest was converted to a promissory note in the amount of $117,709 at 8%
     interest. This note is included with notes payable - related parties (See
     Note 6).

6. NOTES PAYABLE - RELATED PARTIES

     As of December 31, 2003, notes payable - related parties consist of the
following:
<TABLE>

<CAPTION>
          <S>                                                                                  <C>
         Promissory note in the amount of $218,981 from a stockholder,
         unsecured, payable inmonthly principal and interest installments of $3,000,
         bearing an annual interest rate of 11%, and due June 2013                       $          210,432

         Promissory note of $117,709 provided by Cardservice International, Inc.
         (former parent company of Nationwide Money Services, Inc.
         now shareholder of Global Axcess Corp.), secured with
         the Company's assets, principal and interest payments with
         installments at $3,528 and interest at 8%, due June 2006                                   112,659
                                                                                         ------------------
                                                                                                    323,091
         Less: amounts due within one year                                                           48,320
                                                                                         ------------------

         Long-term portion of note payable                                               $          274,771
                                                                                         ==================

     As of December 31, 2003, principal payments on the notes payable are as
follows:

         2004                                                                            $          48,320
         2005                                                                                       54,878
         2006                                                                                       47,120
         2007                                                                                       18,723
         2008                                                                                       20,889
         Thereafter                                                                                133,161
                                                                                         ------------------
                                                                                         $         323,091
                                                                                         ==================
</TABLE>

                                       F-16
<PAGE>
7. NOTES PAYABLE

     As of December 31, 2003, notes payable consist of the following:
<TABLE>
<CAPTION>
             <S>                                                                                <C>
         In 2000 a promissory note of $50,000 from an individual, unsecured, payable
         in monthly installments of principal and interest installments
         of $1,982, bearing an annual interest rate of 15%, and due
         upon demand                                                                    $         40,000



         Less: amounts due within one year                                                        40,000
                                                                                        ------------------

         Long-term portion of notes payable                                             $              0
                                                                                        ==================
</TABLE>
8. 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 $316,769 require minimum monthly lease payments
     ranging from $198 to $6,732 with interest rates ranging between 9.58% and
     17.00%. The future minimum lease payments required under capital lease
     obligations as of December 31, 2003, are as follows:
<TABLE>
<CAPTION>
                 <S>                                                                           <C>
                  2004                                                                  $          165,484
                  2005                                                                             126,428
                  2006                                                                              71,747
                                                                                        ------------------
                                                                                                   363,659
                  Less: amount representing interest                                                56,960
                                                                                        ------------------
                  Present value of minimum lease payments                                          306,699
                  Less: current portion of capital lease obligations                               105,111
                                                                                        ------------------

                                                                                        $          201,588
                                                                                        ==================
</TABLE>
     Equipment leased under capital leases as of December 31, 2003, totals
     $1,000,749, which is net of accumulated depreciation of $605,813.

9. CONSULTING AND EMPLOYMENT AGREEMENTS

     During January 2002, the Company entered into consulting agreements with
     several directors, including an agreement with the Chairman as of the date
     of the agreement, and the President, which provided each person
     compensation of $7,500 a month. The agreement with the Chairman and
     President required them to raise $1,000,000 of capital for the Company by
     May 1, 2002. If the Chairman and President were unable to raise such
     amounts; one half of their monthly compensation of $7,500 was to be
     deferred until such capital is raised. On April 29, 2002 the President's
     consulting agreement was converted to a two-year employment agreement. The
     Chairman resigned from the board of directors on June 1, 2002. The Company
     entered into an agreement with the Chairman wherein he was paid $4,000 per
     month for twelve months concluding May 1, 2003, he is restricted to selling
     no more than 4,000 shares per week for the same twelve month period subject
     to Rule 144 requirements. Accordingly, the Chairman has relinquished any
     claims to prior contracts or agreements.

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

     The Chief Executive Officer(CEO) has a two year employment contract from
     November 1, 2001 to December 31, 2003, which has been extended for two
     additional years until December 31, 2005 under Board and the CEO's's
     approval. The agreement provides the CEO with the following compensation:
     an annual salary of $220,000; an annual bonus to be determined and awarded
     by the Compensation Committee; a signing bonus of 1,322,250 shares of
     restricted stock; and a 12 month severance agreement.

                                       F-17
<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: an monthly salary of $7,500 per months, 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.

     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.

10. COMMON STOCK

     As of December 31, 2002, the Company had issued 1,000,000 shares of the
     Company's common stock to an individual which have been placed on an
     administrative hold by the stock transfer agent. Currently, the Company is
     attempting to have these shares returned and cancelled.

     During the first quarter ending March 31, 2003, under a settlement
     agreement with two individuals 655,000 shares of the Company's stock 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 valued at $22,750 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.

     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.

                                       F-18
<PAGE>


11.  NET INCOME PER COMMON SHARE

     The calculation of basic net income per common share and diluted net income
     per sommon share is presented below:
<TABLE>
<CAPTION>
                                                                                   2003             2002
                                                                                   -----         -------
<S>                                                                                <C>             <C>
     Basic income per common share computation:
         Net income                                                                $309,866        $104,560

         Basic average common shares outstanding                                 35,163,217      23,080,116
                                                                                ----------------------------

         Basic income per common share                                                $0.01           $0.00
                                                                                ----------------------------

     Diluted income per common share computation:

         Net income                                                                $309,866        $104,560

         Diluted average common share outstanding                                72,572,835      29,134,969

         Diluted net income per common share                                          $0.00           $0.00
                                                                                ----------------------------
</TABLE>
12.  STOCK OPTIONS AND Warrants

     Stock options - During the years ended December 31, 2003 and 2002, the
     Company granted stock options totaling 6,197,000 and 2,370,000 shares of
     its common stock, with a weighted average strike price of $0.32 and $0.77
     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>
         Balance, December 31, 2001                                          6,978,500  $           0.55
              Options granted                                                2,370,000              0.18
              Options canceled                                             (4,500,000)              0.15
              Options expired                                                (577,000)              0.46
              Options exercised                                                (5,000)              0.14
                                                                       ---------------- ----------------

         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
                                                                       ===============  -===============
</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 123. 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:
<TABLE>
<CAPTION>
                                                                            2003              2002
                                                                     -----------------  ----------------
          <S>                                                               <C>               <C>
         Weighted-average risk free interest rate                           1.42%             3.77%
         Expected life of option (years)                                     2.0               2.0
         Expected stock volatility                                          57.2%           224.16%
         Expected dividend yield                                            0.00%             0.00%
</TABLE>
                                       F-19
<PAGE>
The following table summarizes information about options outstanding and
exercisable at December 31, 2003:
<TABLE>
<CAPTION>

                                                                                    Shares Underlying
                              Shares Underlying Options Outstanding                Options Exercisable
                                            Weighted
                           Shares            Average                            Shares
                         Underlying         Remaining        Weighted         Underlying        Weighted
         Exercise          Options         Contractual        Average           Options          Average
           Price         Outstanding          Life        Exercise Price      Exercisable    Exercise Price
     ---------------  ----------------  ---------------   ---------------  ---------------   ---------------
        <S>                 <C>            <C>              <C>               <C>                <C>
     $0.07   - $0.50      7,995,000        3.86           $    0.26             732,914      $    0.26
      0.51   -  4.00      1,840,000        1.98                1.55           1,840,000           1.55
     ---------------  ----------------  ---------------   ---------------  ---------------   ---------------
     Total                9,835,000        2.81 years     $    0.53           2,572,914      $    0.79
     =====          ==================  ===============   ===============  ===============   ===============
</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>              <C>
                  --       Equals       $            --   $            --  $            --
           1,840,000       Exceeds                 1.55              4.00             1.55
           7,995,000      Less Than                0.26              0.35             0.26
     ---------------                    ---------------   ---------------  ---------------
           9,835,000                    $          0.52   $          0.52  $          0.52
     ===============                    ===============   ===============  ===============
</TABLE>
     Stock warrants. The following table summarizes the Company's stock warrant
activity:
<TABLE>
<CAPTION>
                                                                             Number        Weighted
                                                                               Of           Average
                                                                            Warrants     Exercise Price
                                                                       ---------------  ----------------
            <S>                                                                  <C>        <C>
         Balance, December 31, 2001                                          1,783,316  $           7.49
              Warrants granted
              Warrants canceled                                                     --                --
              Warrants expired                                               (450,000)              2.50
              Warrants exercised                                                    --                --
                                                                       ---------------  ----------------

         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
                                                                       ===============  ================
</TABLE>
     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, 2003:
<TABLE>
<CAPTION>
                                                                                    Shares Underlying
                              Shares Underlying Warrants Outstanding              Warrants Exercisable
                                            Weighted
                           Shares            Average                            Shares
                         Underlying         Remaining        Weighted         Underlying        Weighted
                          Warrants         Contractual        Average          Warrants          Average
      Exercise Price     Outstanding          Life         Exercise Price    Exercisable       Exercise Price
     -----------------  --------------  ---------------   ---------------  --------------    ---------------
       <S>                  <C>                 <C>            <C>           <C>                  <C>
     $     0.72          35,558,316         4.2 years     $    0.72           35,558,316     $    0.72
     =================  ==============  ===============   ===============  ===============   ===============
</TABLE>

                                       F-20
<PAGE>
13. RELATED PARTY TRANSACTIONS

     In January 2002, the Company issued 1,076,250 shares of its commons stock
     to a stockholder and director of the Company for a signing bonus payable of
     $139,912. This issuance of common stock was recorded as a decrease in due
     to related parties.

     In January 2002, the Company issued 1,562,666 shares of its commons stock
     to a stockholder and director of the Company for a signing bonus payable of
     $203,147. This issuance of common stock was recorded as a decrease in due
     to related parties.

     In January 2002, the Company issued 1,322,250 shares of its commons stock
     to a stockholder, officer, and director of the Company for a signing bonus
     payable of $171,892. This issuance of common stock was recorded as a
     decrease in due to related parties.

     In May 2003, the Company issued 600,000 shares of its common stock to 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 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 200,000 shares of its common stock to a
     stockholder, officer and director of the Company, through a Private
     Placement Offering in an amount of $10,000.

     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.

     As of December 31, 2003, the Company had an unsecured promissory note in
     the amount of $210,432 outstanding payable to a stockholder of the Company.
     The note bears interest in the amount of 11% and is due in June 2013. In
     addition, as of December 31, 2003, the Company had a secured promissory
     note outstanding in the amount of $112,659 payable to Cardservices
     International, Inc., the former parent company of Nationwide Money
     Services, Inc., and is presently a shareholder of the Company. The note
     bears interest in the amount of 8%, is secured by the Company's assets.

                                      F-21
<PAGE>
14.  Other income

     During December 2002, the Company entered into a settlement agreement with
     the former members of Tallent & Associates, LLC. Pursuant to the settlement
     agreement, the Company agreed to forgive the note receivable - related
     party totaling $257,909 and dismiss the lawsuit filed against the former
     members. The former members agreed to pay an installment receivable
     totaling $100,000 in two equal installments during December 2002 and
     February 2003, return 655,000 shares of the Company's common stock, assume
     notes payable to unrelated parties totaling $143,305, forgive notes payable
     to the former members totaling $134,500 and dismiss the lawsuit filed
     against the Company. During 2002, the Company has recognized the settlement
     income totaling $377,805 related to the $100,000 installment receivable,
     $143,305 assumed notes payable and $134,500 forgiven notes payable to the
     former members . The Company will record the receipt and cancellation of
     the 655,000 common shares as a reduction to Common Stock and increase to
     Additional Paid-in Capital at the common stock's par value totaling $655.
     During December 2002, the Company received the first installment of $50,000
     for the installment receivable. The remaining balance of $50,000 has been
     included in Other Current Assets as of December 31, 2002.

     During April 2002, an agreement was reached with a vendor to reimburse the
     Company $282,500 relating to charges that were deemed excessive and had
     taken place over the prior four years. This one time payment was received
     in April 2002, and is reflected in the financial statements as other
     income.

15.  Commitments and contingencies

     Leased facilities - During March 2003, 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, 2003 and 2002 was $119,613 and $119,983, respectively.

     Future minimum rental payments required under the operating lease for the
     office facilities as of December 31, 2003, are as follows:


         2004                                                           184,383
         2005                                                           189,915
         2006                                                            47,827
                                                                ----------------

                                                                $       422,125
                                                                ================

     Legal proceedings - On May 30, 2002, the Company filed an amended complaint
     in the Superior Court of the State of California for the County of Orange
     against Fred G. Luke, Richard Weed, and Weed & Co. In the complaint, the
     Company alleged that the defendants or entities controlled by the
     defendants, improperly received approximately 1,400,000 shares of common
     stock of the Company pursuant to three Form S-8 Registration Statements as
     filed with the Securities and Exchange Commission on March 30, 2000, May
     30, 2001 and October 12, 2001. The Company is seeking damages in an amount
     to be proven at trial, that the Agreement and Amended Agreement entered
     into with Fred G. Luke be rescinded, that a temporary restraining order, a
     preliminary injunction and a permanent injunction be issued enjoining
     defendants from transferring 500,000 shares of common stock of the Company
     and the payment of reasonable attorney's fees. A settlement has been
     reached with Richard Weed and Weed & Co. during February, 2004. The
     settlement arrangements are confidential and resolution of this matter will
     not have a material adverse effect on the Company's consolidated results of
     operations, cash flows or financial position as of December 31, 2003.


     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 offered to pay $19,815 plus BSA attorney fees. The Company's management
     believes that potential losses resulting from the resolution of this matter


                                       F-22
<PAGE>
     will not have a material adverse effect on the Company's consolidated
     results of operations, cash flows or financial position. There have been no
     changes in the status of threatened infringement.

     During April 2003, the Company received a notification from the District
     Court of the State of Texas for the County of Dallas, in regards to a
     complaint by Mr. Vaneet Duggal, against Nationwide Money Services, Inc.,
     claiming the Company (through the Tallent acquisition) owed Mr. Duggal
     $106,712, for vault cash. The Company has an agreement with Mr. Jimmy
     Tallent indemnifying the Company, specifically for any claims brought by
     Mr. Duggal. During February, 2004, the Company, Jimmy Tallent and Mr.
     Duggal settled the claim. As of December 31, 2003, the Company has reserved
     in the financial statements, for the amount of its settlement, which will
     not have a material impact on the Company's consolidated results of
     operations, cash flows or financial position.

     During June 2003, the Company received notification from the District Court
     of the State of Texas for the County of Harris, in regards to the complaint
     filed by Terran Reneau, Joseph Klimek, L. Micheal Howard and Charlotte
     Howard, claiming ATM International, Inc., SmartATM and Randell Coleman
     fraudulently transferred assets to the Company, naming the Company in the
     filing, the value of which is undetermined. Although it cannot provide
     assurance, the Company believes that this filing is unfounded since the
     acquisition of assets was completed before any of the original filings
     against ATM International, Inc. occurred. Subsequent to the year ended
     December 31, 2003 the Company has negotiated settled the claim with no
     obligation to the Company. The settlement will not have a material adverse
     effect on the Company's consolidated results of operations, cash flows or
     financial position.

     Forgiveness of debt on note payable - related parties - During April 2003,
     the Company negotiated with a less than 5% stockholder to reduce their note
     payable owed, from $487,962 to $243,981. Pursuant to the note payable
     agreement, a payment of $30,000 was made during April 2003 with the
     remaining balance due in monthly principal and interest installments of
     $3,000 through April 2013. The note payable is unsecured and bears an
     interest rate of 11%.

     Foregiveness of debt on notes payable - During April 2003, the Company
     negotiated with an individual to reduce their note payable from $34,083 to
     $17,042. This balance was paid in April 2003.

     Negotiation for forbearance with a related party - The Company has entered
     into an agreement with Cardservice International, Inc. to change the terms
     of its note payable. During the period of renegotiation, payments on the
     note payable were in forbearance. As of December 31, 2003, the remaining
     balance owed to Cardservice International, Inc. is $112,659, which will be
     repaid over 36 months with an interest rate of 8%.

     Extension of Food Lion contract - As of September 2003, the Company has
     renegotiated its current contract with Food Lion and has extended the
     contract another 4.5 years until April 2011.

     16. INCOME TAXES

     The components of the provision for income taxes were as follows:
<TABLE>
<CAPTION>
                                                                                   2003             2002
                                                                                ------------   ------------
<S>                                                                             <C>             <C>
     Currently payable:
         Federal                                                                $  130,515      $  79,615
         State and local                                                            21,113         12,879
                                                                                ------------   ------------
                  Total Current Liability                                          151,627          2,494
                                                                                ------------   ------------
     Deferred:
         Federal                                                                    24,637          7,873
         State and local                                                             3,985          1,274
                                                                                ------------   ------------
                  Total Deferred Liability                                          28,623          9,147

     Total Tax Liability                                                        $  180,250      $ 101,641

     Valuation Allowance from NOL Carryforwards:

     Current and Deferred Tax Assets                                            $(180,250)     $ (101,641)
                                                                                ------------   ------------
     Net Deferred Tax Liability                                                 $       0      $        0
                                                                                ============   ============
</TABLE>
     As of December 31, 2003, the Company has available net operating loss
     carryforwards that will expire in various periods through 2021. The Company
     has used $456,329 and $257,320 of the NOL carryforwards during fiscal years
     2003 and 2002, respectively, to offset earnings during those years. Such
     losses may not be fully deductible due to the significant amounts of
     non-cash service costs and the change in ownership rules under Section 382
     of the Internal Revenue Code. The Company has established a valuation

                                      F-23
<PAGE>
     allowance for a partial tax benefit of the operating loss carryovers due to
     the uncertainty regarding realization.


     17.  SUBSEQUENT EVENTS

     During January 2004, the Company closed the 2nd Private Placement Offering
     for a total raise of $2,465,000 and issued 9,860,000 shares of common stock
     and 19,720,000 warrants exercisable at different prices ranging from $0.35
     to $1.25.

     Also during January, the Company closed on a 3rd Private Placement Offering
     for a total raise of $3.5 million and issued 14,000,000 shares of common
     stock and 28,000,000 warrants exercisable at different prices ranging from
     $0.35 to $1.25

     During February 2004, the Company closed on a Regulation S offering from
     European investors with a total raise of $1,078,500 and issued 4,314,000
     shares of common stock and 8,628,000 warrants exercisable at different
     prices ranging from $0.35 to $1.25.

     On February 1, 2004, the Company acquired approximately 900 ATM Merchant
     processing agreements for $3.9 million with contract lives of approximately
     40 months.

     During March 2004, the Company called warrants from the 2nd Private
     Placement Offering during 2003. The call raised approximately $2,000,000.

     On March 12, 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 that the Company owes to Mr. Collins amounts due under an
     employment agreement as follows: compensation, bonuses and other benefits
     of approximately $316,915; performance of the contract for provisions in
     regards to the Company's stock and stock options in the amount of
     approximately 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.

                                      F-24
<PAGE>