|  | 000-17874(Commission file number)GLOBAL AXCESS CORP(Exact name of registrant as specified in its charter) |
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| NEVADA                                                         | 88-0199674                           |
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| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
|                                                           |                                 |
| 7800 BELFORT PARKWAY, Suite 165                                |                                 |
| JACKSONVILLE, FLORIDA                                          | 32256                                |
| (Address of principal executive offices)                       | (Zip Code)                           |

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| Large accelerated Filer  ̈                                           | Accelerated Filer  ̈    |
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| Non-accelerated Filer  ̈ (Do not check if smaller reporting company) | Smaller reporting company x |

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|       |                                                                                                               | Page No. |
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|       |                                                                                                               |          |
| PART I     |                                                                                                               | 4             |
|       |                                                                                                               |          |
| Item 1.    | Business                                                                                                           | 4             |
| Item 1A.   | Risk Factors                                                                                                       | 15            |
| Item 1B.   | Unresolved Staff Comments                                                                                          | 25            |
| Item 2.    | Properties                                                                                                         | 26            |
| Item 3.    | Legal Proceedings                                                                                                  | 27            |
| Item 4.    | [Removed and Reserved]                                                                                             | 27            |
|       |                                                                                                               |          |
| PART II    |                                                                                                               | 27            |
|       |                                                                                                               |          |
| Item 5.    | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 27            |
| Item 6.    | Selected Financial Data                                                                                            | 30            |
| Item 7.    | Management's Discussion and Analysis of Financial Condition and Results of Operations                              | 31            |
| Item 7A.   | Quantitative and Qualitative Disclosures about Market Risk                                                         | 42            |
| Item 8.    | Financial Statements and Supplementary Data                                                                        | 43            |
| Item 9.    | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                               | 43            |
| Item 9A.   | Controls and Procedures                                                                                            | 43            |
| Item 9B.   | Other Information                                                                                                  | 44            |
|       |                                                                                                               |          |
| PART III   |                                                                                                               | 44            |
|       |                                                                                                               |          |
| Item 10.   | Directors, Executive Officers and Corporate Governance                                                             | 44            |
| Item 11.   | Executive Compensation                                                                                             | 49            |
| Item 12.   | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters                     | 55            |
| Item 13.   | Certain Relationships and Related Transactions, and Director Independence                                          | 56            |
| Item 14.   | Principal Accounting Fees and Services                                                                             | 56            |
|       |                                                                                                               |          |
| PART IV    |                                                                                                               | 58            |
|       |                                                                                                               |          |
| Item 15.   | Exhibits and Financial Statement Schedules                                                                         | 58            |
|       |                                                                                                               |          |
| SIGNATURES |                                                                                                               | 61            |

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|   | ITEM 1. | BUSINESS |
|--------|---------|----------|

|   | · | Full placement program.  Under a full placement arrangement, the Company owns or leases the ATM and is responsible for controlling substantially all aspects of its operation including maintenance, cash management and loading, supplies, signage and telecommunications services. The Company is generally responsible for almost all of the expenses related to the operation of the ATM with the exception of power and, on occasion, telecommunications. The Company typically uses this program for major national and regional merchants, as well as, for its Financial Institution Outsourcing service. |
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|   | · | Merchant-owned program.  Under a merchant-owned arrangement, the merchant (or, for a merchant using lease financing, its lease finance provider) typically buys the ATM from the Company and the merchant is responsible for most of the operating expenses such as maintenance, cash management and loading, supplies and telecommunication services. The Company typically provides all transaction processing services, and the merchants use the Company’s maintenance services from time to time. |
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|   | · | an initial term of at least five to seven years; |
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|   | · | ATM exclusivity at locations where we install an ATM and, in many cases, a right of first refusal for all other locations; |
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|   | · | a requirement that the merchant provide a highly visible space for the ATM and signage; |
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|   | · | protection for us against underperforming locations by permitting us to increase the withdrawal fee or remove ATMs; and |
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|   | · | provisions making the merchant’s fee variable depending on the number of ATM transactions and milestones. |
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|   | · | provisions imposing an obligation on the merchant to ensure the ATM is operational at all times its store is open to the public; and |
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|   | · | provisions that require a merchant to use its best efforts to have any purchaser of the merchant’s store assume our contract. |
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|   | · | Closed a financing agreement with Fifth Third Bank, extending a $17 million total line of credit to the Company; |
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|   | · | Closed a subsequent financing agreement with Fifth Third Bank, extending a $1.65 million total line of credit to the Company to be used for acquisition targets; |
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|   | · | Signed our first major client for DVD kiosks and deployed over 300 DVD kiosks at client locations; |
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|   | · | Acquired an ATM portfolio for 140 ATM locations; |
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|   | · | Signed a definitive agreement to acquire Tejas, a DVD kiosk company servicing Army and Air Force military bases.  Acquisition closed effective January 1, 2011; |
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|   | · | Closed new ATM placement deals for a combined 225 new ATMs. |
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| STATE |   | NUMBER OF ATMs |
|-------|--------|----------------|
| GA    |   | 868            |
| TX    |   | 688            |
| NY    |   | 668            |
| VA    |   | 586            |
| FL    |   | 466            |
| NC    |   | 248            |
| NM    |   | 228            |
| MD    |   | 128            |
| OH    |   | 127            |
| SC    |   | 113            |

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|   | · | acquiring ATMs to be utilized by us and our customers; |
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|   | · | selecting ATM locations and entering into leases for access to those locations; |
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|   | · | in the case of third party merchants, establishing relationships with these merchants for processing transactions on their ATMs; |
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|   | · | the sale of our Branded Cash services to local and regional banks or credit unions; |
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|   | · | establishing relationships with national and regional card organizations and credit card issuers to promote usage of our network ATMs; |
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|   | · | processing ATM transactions; |
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|   | · | supplying ATMs with cash and monitoring cash levels for re-supply; |
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|   | · | monitoring ATM operations and managing the service needs of ATMs; and |
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|   | · | managing the collection of fees generated by our network operations. |
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|   | · | grocery stores; |
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|   | · | convenience stores and combination convenience stores and gas stations; |
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|   | · | major regional and national retailers: |
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|   | · | hotels; |
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|   | · | shopping malls; |
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|   | · | airports; |
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|   | · | colleges; |
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|   | · | amusement parks; |
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|   | · | sports arenas; |
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|   | · | bars/clubs; |
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|   | · | theaters; and |
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|   | · | bowling alleys. |
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|   | · | a plan to ensure the continuous operation of the Company’s core information technology infrastructure; and |
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|   | · | a plan to minimize disruption of the remainder of its business functions. |
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|   | · | Financial Institutions.  Banks have been traditional deployers of ATMs, which have customarily been located at their banking facilities. In addition, the present trend is for many banks to place ATMs in retail environments when the bank has an existing relationship with the retailer. This practice presents both a threat and an opportunity.  It is a threat if the financial institution chooses to manage this program on its own, whereby it would limit the ATM locations available to the Company.  On the other hand, it may be an opportunity if the financial institution chooses to outsource the management of this type of program to companies such as us. |
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|   | · | Credit Card Processors.  Several credit card processors have diversified their business by taking advantage of existing relationships with merchants to place ATMs at sites with those merchants. |
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|   | · | Third Party Operators.  This category includes data processing companies that have historically provided ATM services to financial institutions. |
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|   | · | Companies that have the capability to provide both back-office services and ATM management services. |
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|   | · | Consolidator networks.  Consolidator networks such as Access To Money and Cardtronics, whose United States operations consist of approximately 10,000 ATMs and 35,000 ATMs, respectively. |
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|   | · | mail-delivery and online retailers, like Netflix; |
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|   | · | other DVD kiosk businesses, like Redbox and NCR; |
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|   | · | traditional video retailers; |
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|   | · | other retailers and chain stores selling DVDs; |
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|   | · | cable, satellite, and telecommunications providers; |
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|   | · | general competition from other forms of entertainment such as movie theaters, television, sporting events and video gaming. |
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| Global Axcess Corp                     |   |   | 5  |   |
|----------------------------------------|--------|--------|----|--------|
| Nationwide Ntertainment Services, Inc. |   |   | 13 |   |
| Nationwide Money Services, Inc.        |   |   | 43 |   |
|                                   |   |   | 61 |   |

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|   | ITEM 1A. | RISK FACTORS |
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|   | · | Our sales depend on transaction fees from our network of ATMs. A decline in either transaction volume or the level of transaction fees could reduce our sales and harm our operating results. |
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|   | · | Transaction fees for our network of ATMs produce substantially all of our sales. Consequently, our future operating results will depend on both transaction volume and the amount of the transaction fees we receive. Our transaction volume and fees will depend principally upon: |
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|   | · | our ability to find replacement sites in the event of merchant turnover; |
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|   | · | competition, which can result in over-served markets, pressure to reduce existing fee structures and increase sales discounts to merchants, and reduced opportunities to secure merchant or other placements of our machines; |
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|   | · | our ability to service, maintain and repair ATMs in our network promptly and efficiently; |
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|   | · | continued market acceptance of our services; and |
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|   | · | government regulation and network adjustment of our fees. |
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|   | · | Changes in payment technologies and customer preferences could reduce the use of ATMs and, as a result, reduce our sales.  New technology such as Radio Frequency Identification (“RFID”) and other contact-less payment systems that eliminate the need for ATMs may result in the existing machines in our networks becoming obsolete, requiring us, or the merchants in our networks who own their machines, to either replace or upgrade our existing machines. Any replacement or upgrade program to machines that we own or that we must upgrade or replace under contracts with merchant owners would involve substantial expense. A failure to either replace or upgrade obsolete machines could result in customers using other alternative payment methods, thereby reducing our sales and reducing or eliminating any future operating margins. |
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|   | · | We depend on third party vendors to provide many services on which we rely.  Our ATM business requires close coordination of merchant relationships, service company relationships, cash management activities and telecommunication services. In an effort to reduce costs and improve our service levels, we entered into agreements with third party vendors pursuant to which they will provide many of these services to us as well as transaction processing services. As a result, we depend on these third party vendors to provide many services that are necessary to the operations of our ATM business. At some point these third party vendors may be unable or unwilling to provide all of these services at a level that we consider necessary. In that event, if we are unable to terminate our relationship with them or are unable to obtain replacement services in a timely manner, our transaction volume could be reduced and our relationships with our merchants or financial institutions could deteriorate. |
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|   | · | Changes in laws or card association rules affecting our ability to impose surcharge/convenience fees and continued customer willingness to pay surcharge/convenience fees. Consumer activists have from time to time attempted to impose local bans or limits on surcharge fees.  Even in the few instances where these efforts have passed the local governing body (such as with an ordinance adopted by the city of Santa Monica, California), federal courts have overturned these local laws on federal preemption grounds.  However, those efforts may resurface and, should the federal courts abandon their adherence to the federal preemption doctrine in these contexts, those efforts could receive more favorable consideration than in the past.  Any successful legislation banning or limiting surcharge fees could result in a substantial loss of revenues and significantly curtail our ability to continue our operations as currently configured. |
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|   | · | Interchange fees, which comprise a substantial portion of our transaction revenues, may be lowered at the discretion of the various EFT networks through which our transactions are routed, or through potential regulatory changes, thus reducing our future revenues.  Interchange fees, which represented approximately 32% of our total ATM operating revenues for the year ended December 31, 2010, are set by the various EFT networks through which transactions conducted on our devices are routed.  Interchange fees are set by each network and typically vary from one network to the next.  Accordingly, if some or all of the networks through which our ATM transactions are routed were to reduce the interchange rates paid to us or increase their transaction fees charged to us for routing transactions across their network, or both, our future transaction revenues could decline. |
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|   | · | Our ability to form new strategic relationships and maintain existing relationships with issuers of credit cards and national and regional card organizations.  We have a significant number of customer and vendor relationships with financial institutions in all of our key markets, including relationships in which those financial institutions pay us for the right to place their brands on our devices.  Additionally, we rely on a small number of financial institution partners to provide us with the cash that we maintain in our ATMs.  Turmoil in the global credit markets in the future, such as the one recently experienced, may have a negative impact on those financial institutions and our relationships with them.  In particular, if the liquidity positions of the financial institutions with which we conduct business deteriorate significantly, these institutions may be unable to perform under their existing agreements with us.  If these defaults were to occur, we may not be successful in our efforts to identify new branding partners and cash providers, and the underlying economics of any new arrangements may not be consistent with our current arrangements.  Furthermore, if our existing bank branding partners or cash providers are acquired by other institutions with assistance from the Federal Deposit Insurance Corporation (“FDIC”), or placed into receivership by the FDIC, it is possible that our agreements may be rejected in part or in their entirety.  If these situations were to occur, and we were unsuccessful in our efforts to enter into similar agreements, our future financial results would be negatively impacted. |
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|   | · | Our ability to expand our ATM based business.  Persons seeking ATM services have numerous choices.  These choices include ATMs offered by banks or other financial institutions and ATMs offered by Independent Sales Organizations (“ISOs”) such as us.  Some of our competitors offer services directly comparable to ours while others are only indirect competitors.  We believe that there will be continued consolidation in the ATM industry in the United States.  New competitors could emerge and acquire significant market share.  This competition could prevent us from obtaining or maintaining desirable locations, reduce the transaction volume on our machines, affect the transaction fee levels we charge or require us to increase our merchants’ share of transaction fees thus lowering our profit margin. The occurrence of any of these factors could limit our growth or reduce our sales and income. |
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|   | · | The availability of financing at reasonable rates for vault cash and for other corporate purposes, including funding our ATM expansion plans.  In the future, we may need financing to obtain vault cash (which we use to fill ATMs), to fund new purchases of ATMs or for other corporate purposes.  If we are unable to obtain such financing, or are unable to obtain it at reasonable rates, operations of certain ATMs or our ability to expand our ATM network could be adversely affected and our operating results would be negatively impacted. |
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|   | · | Our ability to keep our ATMs at other existing locations and to place additional ATMs in preferred locations at reasonable rental rates.  The loss of any of our largest merchants or a decision by any one of them to reduce the number of our devices placed in their locations would result in a decline in our revenues.  Furthermore, if their financial condition were to deteriorate in the future and, as a result, one of more of these merchants was required to close a significant number of their domestic store locations, our revenues would be significantly impacted. Additionally, these merchants may elect not to renew their contracts when they expire.  Even if such contracts are renewed, the renewal terms may be less favorable to us than the current contracts. If, for these reasons, we are unable to maintain existing favorable locations for our ATMs, or if we are unable to secure preferred locations at favorable rental rates for future placement of our ATMs with existing or new customers, it could result in a decline in our revenues and gross profits. |
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|   | · | The extent and nature of competition from financial institutions, credit card processors and third party operators, many of whom have substantially greater resources.  Clients seeking ATM services have numerous choices. These choices include ATMs offered by banks or other financial institutions and ATMs offered by ISOs (independent sales organizations) such as us.  The banks and financial institutions and larger ISO’s may have more available financial resources that we do which may afford them to offer more competitive bids to acquire additional market share.  This competition could prevent us from obtaining or maintaining desirable locations, reduce the transaction volume on our machines, affect the transaction fee levels we charge or require us to increase our merchants’ share of transaction fees thus lowering our profit margin.  The occurrence of any of these factors could limit our growth or reduce our sales and income. |
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|   | · | Our ability to maintain our ATMs and information systems technology without significant system failures or breakdowns.  Our ability to provide reliable service largely depends on the efficient and uninterrupted operations of our transaction processors, Electronic Financial Transactions Networks (“EFTNs”) and other service providers.  Any significant interruptions could severely harm our business and reputation and result in a loss of sales.  If we cause any such interruption, we could lose the confidence of merchants under contract with us and or damage our relationships with them.  Our systems and operations, and those of our transaction processors, EFTNs and other service providers, could be exposed to damage or interruption from fire, natural disaster, unlawful acts, terrorist attacks, power loss, telecommunications failure, unauthorized entry and computer viruses.  We cannot be certain that any measures we and our service providers have taken to prevent system failures will be successful or that we will not experience service interruptions.  Further, our property and business interruption insurance may not be adequate to compensate us for all losses or failures that may occur. |
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|   | · | We maintain a significant amount of cash within our Company-owned ATMs, which is subject to potential loss due to theft or other events, including natural disasters..  As of December 31, 2010, there was approximately $37 million in vault cash held in our ATMs. Although legal and equitable title to such cash is held by the cash providers, any loss of such cash from our ATMs through theft or other means is typically our responsibility. We typically require that our cash service providers maintain adequate insurance coverage in the event cash losses occur as a result of misconduct or negligence on the part of such providers. However, we also maintain our own insurance policies to cover a significant portion of any losses that may occur that may ultimately not be covered by the insurance policies maintained by our service providers. In the event we incur losses that are covered by our insurance carriers, we will be required to fund a portion of those losses through the payment of any related deductible amounts under those policies. Furthermore, any increase in the frequency and/or amounts of such thefts and losses could negatively impact our operating results as a result of higher deductible payments and increased insurance premiums. |
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|   | · | Our ability to develop new products and enhance existing products to be offered through ATMs, and our ability to successfully market these products.  Should the ATM industry decline, our future success depends in part on offering new products and services to our existing client base.  Should we not be able to offer new products or additional services, our future results from operations could be materially impacted. |
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|   | · | Our entrance into the DVD services business could continue to contribute negative earnings.  Our DVD services business has a very limited operating history and faces many of the risks inherent to a new business. Redbox, the largest player in the DVD services business, incurred a net operating loss each year since it began operations in 2002 through 2007. As a result of its limited operating history, it is difficult to accurately forecast our potential revenue and operating results from our new DVD kiosk business. If we are unable to attract customers to our DVD rental kiosks, our operations and financial condition will be adversely affected. Because of our limited operating history in this business line and because the DVD rental kiosk market and our business model for DVD services is rapidly evolving, we have very limited data for predicting kiosk and market performance in future periods. As a result, we may make errors in predicting and reacting to relevant business trends which could have a material adverse effect on our business, financial condition and results of operations. During fiscal 2010, we reported a net loss of approximately $2.1 million in the DVD services business. |
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|   | · | Our entrance into the DVD services business could be cash dilutive.  We plan to expand our operations in the DVD kiosk business.  While we have had success in generating positive cash flow from our ATM business, our DVD model requires significant rental transaction volumes to make it economically feasible to purchase and deploy DVD kiosks.  Should we not be successful in achieving the rental transaction volumes to generate positive cash flow, the DVD kiosk business could materially impact the cash flows of the Company.  During fiscal 2010, we reported a net loss of approximately $2.1 million in the DVD services business. |
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|   | · | We depend upon third-party manufacturers of our DVD rental kiosks and related software.  We depend upon third-party manufacturers to manufacture our kiosks. We intend to continue expanding our installed base in the U.S. and such expansion may be limited by the manufacturing capacity of the third-party manufacturers who may not be able to meet our manufacturing needs in a satisfactory and timely manner. Furthermore, we are reliant on the third-party manufacturer for the development of its core software technology. Any failure by them to develop, produce and manufacture functional DVD rental kiosks and related software could harm our business, financial condition and results of operations. |
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|   | · | We depend upon third parties for the maintenance and servicing of our kiosks and the fulfillment of our DVD titles.   We depend upon a third-party distributors for the fulfillment of our DVD titles,  third-party providers for payment processing and third-party service providers for the maintenance and servicing of our kiosks.  Any failure by us to maintain these existing relationships or to establish new relationships on a timely basis or on acceptable terms could harm our business, financial condition and results of operations. |
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|   | · | Any significant disruption in our computer systems or equipment could result in a loss of users.   The operation of our DVD rental kiosks is dependent on their ability to connect to our back-end platform running in our datacenters. Our reputation and ability to attract, retain and serve our users are dependent upon the reliable performance of our network infrastructure and fulfillment processes. Interruptions in these systems could hinder our ability to process transactions, which could diminish the attractiveness of our service to existing and potential users. |
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|   | · | If we are unable to build our brand, our ability to attract and retain users may be adversely affected.   We are still developing our brand identity, InstaFlix, and we must build strong brand identity to compete successfully. To succeed, will have to compete for users against other brands that have greater recognition, such as Redbox and NCR/Blockbuster Express. To the extent dissatisfaction with our service is not adequately addressed, our brand may be adversely impacted. If our efforts to promote and maintain our brand are not successful, our operating results and our ability to attract and retain users of our service may be adversely affected. |
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|   | · | If we do not manage our DVD inventory effectively, our business, financial condition and results of operations could be materially and adversely affected. If we do not acquire sufficient copies of popular DVDs, we may not satisfy user demand, and our user satisfaction and results of operations could be adversely affected.  Conversely, if we attempt to mitigate this risk and acquire more copies than needed to satisfy our user demand, our inventory utilization would become less effective and our gross margins would be adversely affected.  Our ability to accurately predict user demand may impact our ability to acquire appropriate quantities of certain DVDs. |
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|   | · | Our ability to retain senior management and other key personnel.  Our future success depends in part on the performance of our executive officers and key employees.  The loss of the services of any of our executive officers or other key employees could have a material adverse effect on our business, operating results and financial condition. |
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|   | · | The current global economic downturn could adversely impact our ATM services business; |
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|   | · | Our business can be adversely affected by severe weather, natural disasters and other events beyond our control, such as earthquakes, fires, power failures, telecommunication loss and terrorist attacks. |
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|   | · | Changes in general economic conditions. |
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|   | · | fluctuations in our quarterly revenues and operating results; |
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|   | · | litigation against the Company; |
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|   | · | announcements of product releases or new services by us or our competitors; |
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|   | · | announcements of acquisitions and/or partnerships by us or our competitors. |
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|   | · | fluctuations in revenue generated by our ATM and DVD services businesses; |
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|   | · | fluctuations in direct operating expenses, such as the amortization of our DVD library, cash costs, maintenance costs, merchandising and cash replenishment costs, amongst others; |
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|   | · | our ability to establish or maintain relationships with significant retailers and suppliers; |
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|   | · | the amount of residual commission fees that we pay to our retailers; |
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|   | · | the surcharge fees we charge on our ATMs and  transaction fees we charge consumers to use our DVD services; |
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|   | · | fluctuation in consumer spending patterns and uses of cash; |
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|   | · | fluctuations in consumer rental patterns, including the number of movies rented per visit, the type of DVDs they want to rent and for how long, and the level of DVD migration between kiosks; |
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|   | · | the successful operation of our network; |
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|   | · | the level of product and price competition; |
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|   | · | fluctuations in interest rates, which affects our debt service obligations; |
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|   | · | the timing of, and our ability to develop and successfully commercialize, new or enhanced products and services; |
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|   | · | activities of and acquisitions or announcements by competitors; and |
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|   | · | the impact from any impairment of inventory, goodwill, fixed assets or intangibles related to our acquisitions. |
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|   | · | current and potential customers; |
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|   | · | 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' products and services; and |
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|   | · | revenues if the combined institution is able to negotiate a greater volume discount for, or discontinue the use of, our products and services. |
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|   | ITEM 1B. | UNRESOLVED STAFF COMMENTS |
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|   | ITEM 2. | PROPERTIES |
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| Location                      |   | ApproximateSquare Footage |   | Lease Term |   | Use                                                                                                |
|-------------------------------|--------|---------------------------|--------|-----------------|--------|----------------------------------------------------------------------------------------------------|
|                          |   |                      |   |            |   |                                                                                               |
| Jacksonville, Florida         |   | 5,841 sq. ft.             |   | July, 2012      |   | General office use; operations, accounting, sales, and related administration.                     |
|                          |   |                      |   |            |   |                                                                                               |
| West Columbia, South Carolina |   | 3,600 sq. ft.             |   | Month to Month  |   | General warehouse use, equipment storage, and maintenance operations.                              |
|                          |   |                      |   |            |   |                                                                                               |
| Jacksonville, Texas           |   | 5,000 sq. ft.             |   | Month to Month  |   | General office and warehouse use, equipment storage, customer service, and maintenance operations. |

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|   | ITEM 3. | LEGAL PROCEEDINGS |
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|   | ITEM 4. | [REMOVED AND RESERVED] |
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|                             |   | Price Range |   |
|----------------------------------|--------|-------------|--------|
|                             |   | High        |   |   | Low |   |
| Fiscal 2011:                     |   |        |   |   |   |   |
| First Quarter through March 23rd |   | $           | 0.56   |   |   |   | 0.42 |   |
|                             |   |        |   |   |   |   |   |   |
| Fiscal 2010:                     |   |        |   |   |   |   |   |   |
| First Quarter                    |   | $           | 1.06   |   |   |   | 0.85 |   |
| Second Quarter                   |   |        | 1.03   |   |   |   | 0.71 |   |
| Third Quarter                    |   |        | 0.79   |   |   |   | 0.52 |   |
| Fourth Quarter                   |   |        | 0.65   |   |   |   | 0.48 |   |
| Fiscal Year                      |   |        | 1.06   |   |   |   | 0.48 |   |
|                             |   |        |   |   |   |   |   |   |
| Fiscal 2009:                     |   |        |   |   |   |   |   |   |
| First Quarter                    |   | $           | 0.22   |   |   |   | 0.10 |   |
| Second Quarter                   |   |        | 0.44   |   |   |   | 0.20 |   |
| Third Quarter                    |   |        | 0.99   |   |   |   | 0.40 |   |
| Fourth Quarter                   |   |        | 0.90   |   |   |   | 0.58 |   |
| Fiscal Year                      |   |        | 0.99   |   |   |   | 0.10 |   |

----

| Plan Category                                         |   | Number ofsecurities tobe issueduponexercise ofoutstandingoptions,warrants andrights |      |   | Weighted-averageexerciseprice ofoutstandingoptions,warrantsand rights |   |    | Number ofsecuritiesremainingavailable forfutureissuanceunder equitycompensationplans(excludingsecuritiesreflected infirst column) |   |
|------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------|-----------|--------|---------------------------------------------------------------------------------|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                       |   |                                                                                                         |      |   |                                                                            |   |    |                                                                                                                                                       |   |
| Equity compensation plans approved by security holders     |   |                                                                                                         |      |   |                                                                            |   |    |                                                                                                                                                       |   |
| Stock Options                                              |   |                                                                                                         | 2,893,513 |   |                                                                            | $      | 0.40    |                                                                                                                                                       |   |   | 999,539 |   |
| Warrants                                                   |   |                                                                                                         | 30,000    |   |                                                                            | $      | 0.20    |                                                                                                                                                       |   |   | — |   |
| Equity compensation plans not approved by security holders |   |                                                                                                         | —   |   |                                                                            |   | — |                                                                                                                                                       |   |   | — |   |
| Total                                                      |   |                                                                                                         | 2,923,513 |   |                                                                            | $      | 0.40    |                                                                                                                                                       |   |   | 999,539 |   |

----

|                   |   | 12/31/2006 |   |   | 12/31/2007 |   |   | 12/31/2008 |   |   | 12/31/2009 |   |   | 12/31/2010 |   |
|------------------------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|
| Global Axcess Corp     |   | $          | 102.78 |   |       | $      | 94.44  |       |   | $      | 36.11      |   |   | $          | 247.22 |   |   | $ | 155.56 |   |
| Current ATM Peer Group |   | $          | 25.09  |   |       | $      | 52.64  |       |   | $      | 8.88       |   |   | $          | 73.09  |   |   | $ | 114.32 |   |
| NADSAQ                 |   | $          | 120.56 |   |       | $      | 132.39 |       |   | $      | 78.72      |   |   | $          | 113.27 |   |   | $ | 132.42 |   |

----

|   | ITEM 6. | SELECTED FINANCIAL DATA |
|--------|---------|-------------------------|

|                                               |   | For the Year Ended December 31,                                                      |       |
|----------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------|------------|
|                                               |   | 2010                                                                                                          |       |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                               |   | (In thousands except gross profit percentage and per share data) |       |
|                                               |   |                                                                                                          |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenues                                           |   | $                                                                                                             | 22,743     |   |   | $ | 21,495 |   |   | $ | 22,171 |   |   | $ | 21,751 |   |   | $ | 21,437 |   |
| Gross profit                                       |   |                                                                                                          | 9,388      |   |   |   | 10,178 |   |   |   | 9,823 |   |   |   | 9,045 |   |   |   | 9,032 |   |
| Gross profit %                                     |   |                                                                                                          | 41.3       | % |   |   | 47.4 | % |   |   | 44.3 | % |   |   | 41.6 | % |   |   | 42.1 | % |
| Operating income (loss) from continuing operations |   |                                                                                                          | (434       | ) |   |   | 2,655 |   |   |   | 2,193 |   |   |   | 1,511 |   |   |   | (3,510 | ) |
| Net income (loss) from continuing operations       |   | $                                                                                                             | (854       | ) |   | $ | 2,813 |   |   | $ | 1,170 |   |   | $ | 256 |   |   | $ | (4,588 | ) |
| Income (loss) from discontinued operations         |   | $                                                                                                             | -          |   |   | $ | - |   |   | $ | - |   |   | $ | 175 |   |   | $ | (276 | ) |
| Net Income (loss)                                  |   | $                                                                                                             | (854       | ) |   | $ | 2,813 |   |   | $ | 1,170 |   |   | $ | 431 |   |   | $ | (4,864 | ) |
|                                               |   |                                                                                                          |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income (loss) per common share - basic:            |   |                                                                                                          |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income (loss) from continuing operations           |   | $                                                                                                             | (0.04      | ) |   | $ | 0.13 |   |   | $ | 0.06 |   |   | $ | 0.01 |   |   | $ | (0.22 | ) |
| Income (loss) from discontinued operations         |   | $                                                                                                             | -          |   |   | $ | - |   |   | $ | - |   |   | $ | 0.01 |   |   | $ | (0.01 | ) |
| Net Income (loss) per common share                 |   | $                                                                                                             | (0.04      | ) |   | $ | 0.13 |   |   | $ | 0.06 |   |   | $ | 0.02 |   |   | $ | (0.23 | ) |
|                                               |   |                                                                                                          |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income (loss) per common share - diluted:          |   |                                                                                                          |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income (loss) from continuing operations           |   | $                                                                                                             | (0.04      | ) |   | $ | 0.12 |   |   | $ | 0.06 |   |   | $ | 0.01 |   |   | $ | (0.22 | ) |
| Income (loss) from discontinued operations         |   | $                                                                                                             | -          |   |   | $ | - |   |   | $ | - |   |   | $ | 0.01 |   |   | $ | (0.01 | ) |
| Net Income (loss) per common share                 |   | $                                                                                                             | (0.04      | ) |   | $ | 0.12 |   |   | $ | 0.06 |   |   | $ | 0.02 |   |   | $ | (0.23 | ) |
|                                               |   |                                                                                                          |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average common shares outstanding:        |   |                                                                                                          |       |
| Basic                                              |   |                                                                                                          | 21,980,369 |   |   |   | 21,654,554 |   |   |   | 20,973,924 |   |   |   | 20,988,348 |   |   |   | 20,996,013 |   |
| Diluted                                            |   |                                                                                                          | 21,980,369 |   |   |   | 22,845,241 |   |   |   | 20,973,924 |   |   |   | 20,988,348 |   |   |   | 20,996,013 |   |
|                                               |   |                                                                                                          |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Summary Balance Sheet Data                         |   |                                                                                                          |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                               |   |                                                                                                          |       |
|                                               |   | At December 31,                                                                                               |       |
|                                               |   | 2010                                                                                                          |       |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                               |   | (In thousands)                                                                                                |       |
|                                               |   |                                                                                                          |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total current assets                               |   | $                                                                                                             | 4,048      |   |   | $ | 4,412 |   |   | $ | 3,466 |   |   | $ | 1,842 |   |   | $ | 2,797 |   |
| Total assets                                       |   |                                                                                                          | 30,405     |   |   |   | 26,117 |   |   |   | 23,648 |   |   |   | 24,001 |   |   |   | 26,091 |   |
| Total current liabilities                          |   |                                                                                                          | 7,538      |   |   |   | 5,776 |   |   |   | 3,938 |   |   |   | 4,968 |   |   |   | 6,343 |   |
| Total liabilities                                  |   |                                                                                                          | 14,461     |   |   |   | 9,551 |   |   |   | 10,184 |   |   |   | 11,866 |   |   |   | 14,462 |   |
| Working Capital                                    |   |                                                                                                          | (3,491     | ) |   |   | (1,364 | ) |   |   | (472 | ) |   |   | (3,127 | ) |   |   | (3,546 | ) |
| Total stockholders' equity                         |   |                                                                                                          | 15,944     |   |   |   | 16,566 |   |   |   | 13,464 |   |   |   | 12,134 |   |   |   | 11,629 |   |
|                                               |   |                                                                                                          |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents                          |   | $                                                                                                             | 1,744      |   |   | $ | 2,008 |   |   | $ | 1,561 |   |   | $ | 540 |   |   | $ | 754 |   |
| Resticted cash                                     |   |                                                                                                          | -          |   |   |   | 800 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total cash, cash equivalents and restricted cash   |   | $                                                                                                             | 1,744      |   |   | $ | 2,808 |   |   | $ | 1,561 |   |   | $ | 540 |   |   | $ | 754 |   |
|                                               |   |                                                                                                          |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Short-term and long-term debt                      |   | $                                                                                                             | 9,857      |   |   | $ | 6,317 |   |   | $ | 7,381 |   |   | $ | 8,505 |   |   | $ | 10,070 |   |
| Warrant valuation discounts                        |   |                                                                                                          | -          |   |   |   | - |   |   |   | 307 |   |   |   | 473 |   |   |   | 639 |   |
| Total debt                                         |   | $                                                                                                             | 9,857      |   |   | $ | 6,317 |   |   | $ | 7,688 |   |   | $ | 8,978 |   |   | $ | 10,709 |   |

----

|   | ITEM 7.  | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
|--------|---------------|---------------------------------------------------------------------------------------|

----

|   | · | Low overall entry barriers; |
|--------|--------|-----------------------------|

|   | · | Absence of national economies of scale; |
|--------|--------|-----------------------------------------|

|   | · | Seasonal and geographic volume fluctuations; |
|--------|--------|----------------------------------------------|

|   | · | The need for local presence in some market segments; and |
|--------|--------|----------------------------------------------------------|

|   | · | The need for low overhead. |
|--------|--------|----------------------------|

|   | · | Emergence of debit cards, “pay pass” machines and RFID as substitutes for cash in making purchases; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------|

|   | · | Increasing acceptance of debit cards by younger demographics; and |
|--------|--------|-------------------------------------------------------------------|

|   | · | Market saturation of prime ATM locations in the United States. |
|--------|--------|----------------------------------------------------------------|

|   | · | As our competitors seek to exit the business; |
|--------|--------|-----------------------------------------------|

|   | · | As our competitors encounter financial and regulatory difficulties; and |
|--------|--------|-------------------------------------------------------------------------|

|   | · | As financial institutions seek to reduce their costs of managing an ATM channel during a period of decreasing ATM usage. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------|

----

|                                          |   | For the year ended |   |   | For the year ended |   |   | For the year ended |   |
|-----------------------------------------------|--------|-----------------------------------|--------|--------|-----------------------------------|--------|--------|-----------------------------------|--------|
|                                          |   | December 31, 2010       |   |   | December 31, 2009       |   |   | December 31, 2008       |   |
|                                          |   |                              |   |   |                              |   |   |                              |   |
| Revenues                                      |   |                              | 100.0  | %      |                              |   | 100.0  | %                                 |   |   | 100.0 | % |
| Cost of revenues                              |   |                              | 58.7   | %      |                              |   | 52.6   | %                                 |   |   | 55.7 | % |
| Gross profit                                  |   |                              | 41.3   | %      |                              |   | 47.4   | %                                 |   |   | 44.3 | % |
|                                          |   |                              |   |   |                              |   |   |                              |   |   |   |   |
| Depreciation expense                          |   |                              | 7.0    | %      |                              |   | 5.5    | %                                 |   |   | 6.4 | % |
| Amortization of intangible merchant contracts |   |                              | 3.8    | %      |                              |   | 3.7    | %                                 |   |   | 3.5 | % |
| Impairment of long-lived assets               |   |                              | 2.1    | %      |                              |   | 0.0    | %                                 |   |   | 0.0 | % |
| Selling, general and administrative           |   |                              | 29.3   | %      |                              |   | 25.3   | %                                 |   |   | 23.9 | % |
| Stock compensation expense                    |   |                              | 0.9    | %      |                              |   | 0.6    | %                                 |   |   | 0.7 | % |
| Total operating expenses                      |   |                              | 43.2   | %      |                              |   | 35.1   | %                                 |   |   | 34.5 | % |
| Operating income from operations              |   |                              |   |   |                              |   |   |                              |   |   |   |   |
| before items shown below                      |   |                              | (1.9   | )%     |                              |   | 12.3   | %                                 |   |   | 9.8 | % |
|                                          |   |                              |   |   |                              |   |   |                              |   |   |   |   |
| Interest expense, net                         |   |                              | (2.3   | )%     |                              |   | (3.0   | )%                                |   |   | (4.7 | )% |
| Gain on disposal of assets                    |   |                              | 0.0    | %      |                              |   | 0.0    | %                                 |   |   | 0.1 | % |
| Loss on early extinguishment of debt          |   |                              | (0.4   | )%     |                              |   | (2.2   | )%                                |   |   | 0.0 | % |
| Income tax benefit                            |   |                              | 0.9    | %      |                              |   | 5.9    | %                                 |   |   | 0.0 | % |
| Net income (loss)                             |   |                              | (3.8   | )%     |                              |   | 13.1   | %                                 |   |   | 5.3 | % |
| EBITDA (1)                                    |   |                              | 8.4    | %      |                              |   | 19.3   | %                                 |   |   | 19.8 | % |

----

----

|                                          |   | For the year ended |      |   | For the year ended |   |      | 2009 to 2010 |   |   | 2009 to 2010 |   |
|-----------------------------------------------|--------|-----------------------------------|-----------|--------|-----------------------------------|--------|-----------|------------------------|--------|--------|------------------------|--------|
|                                          |   | December 31, 2010       |      |   | December 31, 2009       |   |      | $ Change          |   |   | % Change          |   |
|                                          |   |                              |      |   |                              |   |      |                   |   |   |                   |   |
| Depreciation expense                          |   | $                                 | 1,597,333 |   |                              | $      | 1,178,927 |                   |   | $      | 418,406                |   |   |   | 35.5 | % |
| Amortization of intangible merchant contracts |   |                              | 854,685   |   |                              |   | 786,173   |                   |   |   | 68,512                 |   |   |   | 8.7 | % |
| Impairment of long-lived assets               |   |                              | 481,993   |   |                              |   | -         |                   |   |   | 481,993                |   |   |   | 100.0 | % |
| Selling, general and administrative           |   |                              | 6,671,443 |   |                              |   | 5,437,624 |                   |   |   | 1,233,819              |   |   |   | 22.7 | % |
| Stock compensation expense                    |   |                              | 215,813   |   |                              |   | 120,188   |                   |   |   | 95,625                 |   |   |   | 79.6 | % |
| Total operating expenses                      |   | $                                 | 9,821,267 |   |                              | $      | 7,522,912 |                   |   | $      | 2,298,355              |   |   |   | 30.6 | % |

----

|                                   |   | For the year ended |    |   | For the year ended |   |
|----------------------------------------|--------|-----------------------------------|---------|--------|-----------------------------------|--------|
|                                   |   | December 31, 2010       |    |   | December 31, 2009       |   |
|                                   |   |                              |    |   |                              |   |
| Interest expense, net                  |   | $                                 | 522,083 |   |                              | $      | 595,692 |   |
| Accretion of discount on notes payable |   |                              | -       |   |                              |   | 50,066 |   |
| Total interest expense, net            |   | $                                 | 522,083 |   |                              | $      | 645,758 |   |

----

|   | · | We acknowledge that our depreciable assets are necessary to earn revenue based on our current business. |
|--------|--------|---------------------------------------------------------------------------------------------------------|

|   | · | Our use of EBITDA as a measure of operating performance is not based on our belief about the reasonableness of excluding depreciation when measuring financial performance. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Our use of EBITDA is supported by the importance of EBITDA to the following key stakeholders: |
|--------|--------|-----------------------------------------------------------------------------------------------|

|   | · | Analysts — who estimate our projected EBITDA and other EBITDA-based metrics in their independently developed financial models for investors; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Creditors — who evaluate our operating performance based on compliance with certain EBITDA-based debt covenants; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------|

|   | · | Investment Bankers — who use EBITDA and other EBITDA-based metrics in their written evaluations and comparisons of companies within our industry; and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Board of Directors and Executive Management — who use EBITDA as an essential metric for evaluating management performance relative to our operating budget and bank covenant compliance, as well as our ability to service debt and raise capital for growth opportunities which are a critical component to our strategy. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                          |   | For the Twelve Months Ended |      |
|-----------------------------------------------|--------|-------------------------------------------------|-----------|
|                                          |   | December 31, 2010                     |      |   | December 31, 2009 |   |   | December 31, 2008 |   |
|                                          |   |                                            |      |   |   |   |   |   |   |
| Net income (loss) from operations             |   | $                                               | (853,568  | ) |   | $ | 2,813,206 |   |   | $ | 1,170,237 |   |
| Income tax benefit                            |   |                                            | (204,334  | ) |   |   | (1,278,888 | ) |   |   | - |   |
| Interest expense, net                         |   |                                            | 522,083   |   |   |   | 645,758 |   |   |   | 1,046,287 |   |
| Depreciation expense                          |   |                                            | 1,597,333 |   |   |   | 1,178,927 |   |   |   | 1,411,360 |   |
| Amortization of intangible merchant contracts |   |                                            | 854,685   |   |   |   | 786,173 |   |   |   | 770,270 |   |
| EBITDA from operations                        |   | $                                               | 1,916,199 |   |   | $ | 4,145,176 |   |   | $ | 4,398,154 |   |

----

|                                          |   | For the Twelve Months Ended |      |
|-----------------------------------------------|--------|-------------------------------------------------|-----------|
|                                          |   | December 31, 2010                     |      |   | December 31, 2009 |   |   | December 31, 2008 |   |
|                                          |   |                                            |      |   |   |   |   |   |   |
| Net income (loss) from operations             |   | $                                               | (853,568  | ) |   | $ | 2,813,206 |   |   | $ | 1,170,237 |   |
| Income tax benefit                            |   |                                            | (204,334  | ) |   |   | (1,278,888 | ) |   |   | - |   |
| Interest expense, net                         |   |                                            | 522,083   |   |   |   | 645,758 |   |   |   | 1,046,287 |   |
| Depreciation expense                          |   |                                            | 1,597,333 |   |   |   | 1,178,927 |   |   |   | 1,411,360 |   |
| Amortization of intangible merchant contracts |   |                                            | 854,685   |   |   |   | 786,173 |   |   |   | 770,270 |   |
| Impairment of long-lived assets               |   |                                            | 481,993   |   |   |   | - |   |   |   | - |   |
| Stock compensation expense                    |   |                                            | 215,813   |   |   |   | 120,188 |   |   |   | 159,840 |   |
| Loss on early extinguishment of debt          |   |                                            | 102,146   |   |   |   | 474,960 |   |   |   | - |   |
| Adjusted EBITDA from operations               |   | $                                               | 2,716,151 |   |   | $ | 4,740,324 |   |   | $ | 4,557,994 |   |

|                                                |   | For the year ended |       |   | For the year ended |   |       | 2009 to 2010 |   |   | 2009 to 2010 |   |
|-----------------------------------------------------|--------|-----------------------------------|------------|--------|-----------------------------------|--------|------------|------------------------|--------|--------|------------------------|--------|
|                                                |   | December 31, 2010       |       |   | December 31, 2009       |   |       | $ Change          |   |   | % Change          |   |
|                                                |   |                              |       |   |                              |   |       |                   |   |   |                   |   |
| Net cash provided by operating activities           |   | $                                 | 2,428,122  |   |                              | $      | 4,444,097  |                   |   | $      | (2,015,975             | )      |   |   | (45.4 | )% |
| Net cash used in investing activities               |   |                              | (6,612,680 | )      |                              |   | (1,172,154 | )                      |   |   | (5,440,526             | )      |   |   | 464.1 | % |
| Net cash provided by (used in) financing activities |   |                              | 3,920,260  |   |                              |   | (2,824,993 | )                      |   |   | 6,745,253              |   |   |   | (238.8 | )% |
| Increase (decrease) in cash                         |   | $                                 | (264,298   | )      |                              | $      | 446,950    |                   |   | $      | (711,248               | )      |   |   |   |   |

----

|   | · | Wilmington Savings Fund Society. Beginning in September 2004, the Company has an arrangement with Wilmington Savings Fund Society allowing us to obtain up to $20,000,000 in vault cash.   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. The contract currently in place with WSFS expires on October 31, 2011, with a one year automatic renewal period unless one party gives 60 days notice of their intention not to renew.  As of December 31, 2010, the Company had 6 ATMs funded by WSFS with a vault cash outstanding balance of approximately $138,000 in connection with this arrangement. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Elan (formerly GenPass Technologies).  On November 24, 2006, we signed a Cash Provisioning Agreement with Elan allowing us to obtain up to $30,000,000 in vault cash.  The Elan contract may be terminated by Elan 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 average terminal balance plus a load factor.  In addition, we are required to maintain insurance on the vault cash.  The contract currently in place with Elan expires on August 11, 2011, with a one year automatic renewal period unless one party gives 180 days notice of their intention not to renew.  As of December 31, 2010, the Company had 1,550 ATMs funded by Elan with a vault cash outstanding balance of about approximately $36,658,000. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Various Branded Cash Partners.  Nationwide 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 is that this reduces the costs associated with vault cash, cash replenishment and first line maintenance by approximately 50%.  Another advantage is that with a branded ATM, transactions volumes traditionally increase more than at non-branded ATMs.  As of December 31, 2010, Nationwide had 45 branded financial partners, which funded 438 ATMs. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                               |   | Total  |       |   | Less than 1 year |   |      | 1-2 Years |   |   | 2-9 Years |   |
|------------------------------------|--------|--------|------------|--------|---------------------------------|--------|-----------|----------------|--------|--------|----------------|--------|
| Notes payable- related parties (*) |   | $      | 82,750     |   |                            | $      | 36,000    |           |   | $      | 36,000         |   |   | $ | 10,750 |   |
| Notes payable (*)                  |   |   | 85,324     |   |                            |   | 27,601    |           |   |   | 27,601         |   |   |   | 30,122 |   |
| Senior lender notes (*)            |   |   | 9,977,818  |   |                            |   | 2,864,934 |           |   |   | 3,447,353      |   |   |   | 3,665,531 |   |
| Capital lease obligations (*)      |   |   | 699,568    |   |                            |   | 490,348   |           |   |   | 179,477        |   |   |   | 29,743 |   |
| Operating leases                   |   |   | 246,294    |   |                            |   | 135,314   |           |   |   | 87,105         |   |   |   | 23,875 |   |
|                               |   |   |       |   |                            |   |      |           |   |   |           |   |   |   |   |   |
| Total contractual cash obligations |   | $      | 11,091,754 |   |                            | $      | 3,554,197 |           |   | $      | 3,777,536      |   |   | $ | 3,760,021 |   |

----

----

|   | ITEM 7A.  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
|--------|----------------|------------------------------------------------------------|

----

|   | ITEM 8.  | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |
|--------|---------------|---------------------------------------------|

|   | ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
|--------|---------|--------------------------------------------------------------------------------------|

|   | ITEM 9A.  | CONTROLS AND PROCEDURES |
|--------|----------------|-------------------------|

----

|   | ITEM 9B.  | OTHER INFORMATION |
|--------|----------------|-------------------|

|   | ITEM 10.  | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
|--------|----------------|--------------------------------------------------------|

| Name                   |   | Age    |   | Positions                                         |
|------------------------|--------|--------|--------|---------------------------------------------------|
|                   |   |   |   |                                              |
| Marc Caramuta          |   | 45     |   | Chief Operating Office                            |
| William Costa          |   | 49     |   | Chief Information Office                          |
| Michael L. Connolly    |   | 54     |   | Director                                          |
| Walter A. Howell       |   | 60     |   | Director                                          |
| Lock Ireland           |   | 67     |   | Vice Chairman, Director                           |
| Sharon Jackson         |   | 53     |   | Secretary                                         |
| Robert Landis          |   | 51     |   | Director                                          |
| Michael J. Loiacono    |   | 44     |   | Chief Financial Officer, Chief Accounting Officer |
| Joseph M. Loughry, III |   | 65     |   | Chairman, Director                                |
| George A. McQuain      |   | 55     |   | President, CEO and Director                       |
| Alan Rossiter          |   | 65     |   | Director                                          |

----

----

----

----

----

|   | ITEM 11.  | EXECUTIVE COMPENSATION |
|--------|----------------|------------------------|

----

| Name & Principal Position |   | Year   |   | Salary ($) |    |   | Bonus($) |   |   | StockAwards($) |   |   | OptionAwards($) (1) |   |   |   | Non-EquityIncentive PlanCompensation($) |   |                       | Change inPension Valueand Non-QualifiedDeferredCompensationEarnings ($) |   |   | All OtherCompensation ($) |   |   | Total ($) |   |
|----------------------------------------------|--------|--------|--------|-----------------|---------|--------|----------|--------|--------|----------------|--------|--------|--------------------------|--------|--------|--------|----------------------------------------------|--------|----------------------------|---------------------------------------------------------------------------------------------|--------|--------|-------------------------------------|--------|--------|----------------|--------|
|                                         |   |   |   |            |    |   |     |   |   |           |   |   |                     |   |   |   |                                         |   |                       |                                                                                        |   |   |                                |   |   |           |   |
| Marc Caramuta - COO                          |   | 2010   |   | $               | 28,846  |   |     | $      | 0      |           |   |   | -                        |   |   | $      | 1,264                                        |   | (2)                        |                                                                                        |   | -      |                                |   |   | -              |   |   |   |   |   | $ | 30,110 |   |
|                                         |   |   |   |            |    |   |     |   |   |           |   |   |                     |   |   |   |                                         |   |                       |                                                                                        |   |   |                                |   |   |           |   |   |   |   |   |   |   |   |
| William Costa - CIO                          |   | 2010   |   | $               | 40,877  |   |     | $      | 0      |           |   |   | -                        |   |   | $      | 2,743                                        |   | (3)                        |                                                                                        |   | -      |                                |   |   | -              |   |   |   |   |   | $ | 43,620 |   |
|                                         |   |   |   |            |    |   |     |   |   |           |   |   |                     |   |   |   |                                         |   |                       |                                                                                        |   |   |                                |   |   |           |   |   |   |   |   |   |   |   |
| George A. McQuain -                          |   | 2010   |   | $               | 265,368 |   |     | $      | 34,951 |           |   |   | -                        |   |   | $      | 64,055                                       |   | (4),(5),(6),(7)            |                                                                                        |   | -      |                                |   |   | -              |   |   |   |   |   | $ | 364,374 |   |
| President and CEO                       |   | 2009   |   | $               | 271,133 |   |     | $      | 30,956 |           |   |   | -                        |   |   | $      | 49,052                                       |   | (4),(5),(6),(7)            |                                                                                        |   | -      |                                |   |   | -              |   |   |   |   |   | $ | 351,141 |   |
|                                         |   |   |   |            |    |   |     |   |   |           |   |   |                     |   |   |   |                                         |   |                       |                                                                                        |   |   |                                |   |   |           |   |   |   |   |   |   |   |   |
| Michael J. Loiacono - CFO                    |   | 2010   |   | $               | 170,368 |   |     | $      | 21,729 |           |   |   | -                        |   |   | $      | 38,608                                       |   | (4),(8),(9),(10),(11),(12) |                                                                                        |   | -      |                                |   |   | -              |   |   |   | - |   |   | $ | 230,705 |   |
| and CAO                                      |   | 2009   |   | $               | 172,475 |   |     | $      | 21,478 |           |   |   | -                        |   |   | $      | 27,288                                       |   | (4),(8),(9),(10),(11),(12) |                                                                                        |   | -      |                                |   |   | -              |   |   |   | - |   |   | $ | 221,241 |   |
|                                         |   |   |   |            |    |   |     |   |   |           |   |   |                     |   |   |   |                                         |   |                       |                                                                                        |   |   |                                |   |   |           |   |   |   |   |   |   |   |   |   |
| Heather Webb Carrouth -                      |   | 2010   |   | $               | 69,637  |   |     | $      | 0      |           |   |   | -                        |   |   | $      | 4,879                                        |   | (13),(14),(15),(16)        |                                                                                        |   | -      |                                |   |   | -              |   |   |   |   |   |   | $ | 74,516 |   |
| VP New  Business Development            |   | 2009   |   | $               | 119,699 |   |     | $      | 10,089 |           |   |   | -                        |   |   | $      | 7,304                                        |   | (13),(14),(15),(16)        |                                                                                        |   | -      |                                |   |   | -              |   |   |   |   |   |   | $ | 137,092 |   |
|                                         |   |   |   |            |    |   |     |   |   |           |   |   |                     |   |   |   |                                         |   |                       |                                                                                        |   |   |                                |   |   |           |   |   |   |   |   |   |   |   |   |

|   | (1)   | The option awards were valued using the Black-Scholes option pricing model assuming up to 5 year lives, no expected dividend payments, volatility average of approximately 131%, forfeiture rate of 0% and a risk free rate of 5%.  These option awards were computed based on such awards’ aggregate grant date fair value pursuant to FASB ASC Topic 718. |
|--------|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2)   | 11,667 shares vest under this option on October 4, 2011 and October 4, 2012 and 11,666 shares on October 4, 2013. |
|--------|-----------------|-------------------------------------------------------------------------------------------------------------------|

|   | (3)   | 11,667 shares vest under this option on August 9, 2011 and August 9, 2012 and 11,666 shares on August 9, 2013. |
|--------|-----------------|----------------------------------------------------------------------------------------------------------------|

|   | (4)   | On April 2, 2007, the Board of Directors approved Executive Stock Option grants with respect to 25% of the shares are based on a performance based vesting, 25% are based on a market condition, 12.5% vest on October 2, 2007, 12.5% vest on April 2, 2008, 12.5% vest on April 2, 2009 and 12.5% vest on April 2, 2010. |
|--------|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (5)   | 57,166 shares vest under this option on March 20, 2009 and March 20, 2010 and 57,167 shares on March 20, 2011. |
|--------|-----------------|----------------------------------------------------------------------------------------------------------------|

|   | (6)   | 66,666 shares vest under this option on March 27, 2010 and March 27, 2011 and 66,667 shares on March 27, 2012. |
|--------|-----------------|----------------------------------------------------------------------------------------------------------------|

|   | (7)   | 43,000 shares vest under this option on December 18, 2010, December 18, 2011 and December 18, 2012. |
|--------|-----------------|-----------------------------------------------------------------------------------------------------|

|   | (8)   | The option is exercisable during the term of Michael Loiacono's employment with respect to 25% of the shares six months from the option grant date and the remaining shares thereafter in three equal installments on the anniversary of the option grant date. |
|--------|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (9)   | 9,000 shares vest under this option on February 28, 2009, February 28, 2010 and February 28, 2011. |
|--------|-----------------|----------------------------------------------------------------------------------------------------|

|   | (10)  | 40,000 shares vest under this option on March 20, 2009, March 20, 2010 and March 20, 2011. |
|--------|------------|--------------------------------------------------------------------------------------------|

|   | (11)  | 50,000 shares vest under this option on March 27, 2010, March 20, 2011 and March 20, 2012. |
|--------|------------|--------------------------------------------------------------------------------------------|

|   | (12)  | 25,000 shares vest under this option on December 18, 2010, December 18, 2011 and December 18, 2012. |
|--------|------------|-----------------------------------------------------------------------------------------------------|

|   | (13)  | 4,333 shares vest under this option on February 28, 2009 and February 28, 2010 and 4,334 shares on February 28, 2011. |
|--------|------------|-----------------------------------------------------------------------------------------------------------------------|

|   | (14)  | 25,000 shares vest under this option on March 20, 2009, March 20, 2010 and March 20, 2011. |
|--------|------------|--------------------------------------------------------------------------------------------|

|   | (15)  | 8,333 shares vest under this option on March 27, 2010 and March 20, 2011 and 8,334 shares on March 20, 2012. |
|--------|------------|--------------------------------------------------------------------------------------------------------------|

|   | (16)  | 3,333 shares vest under this option on December 18, 2010, December 18, 2011 and 3,334 shares on December 18, 2012. |
|--------|------------|--------------------------------------------------------------------------------------------------------------------|

----

----

----

| Option Awards                     |   | Stock Awards |   |
|----------------------------------------|--------|-------------------|--------|
|                                   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Equity Incentive |   |
|                                   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Equity |   |   | Plan Awards: |   |
|                                   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Incentive |   |   | Market or Payout |   |
|                                   |   |              |   |   |   |   |   |   |   |   | Equity |   |   |   |   |   |   |   |   |   |   |   |   | Plan Awards: |   |   | Value |   |
|                                   |   |              |   |   |   |   |   |   |   |   | Incentive |   |   |   |   |   |   |   |   |   |   |   |   | Number |   |   | of |   |
|                                   |   |              |   |   |   |   |   |   |   |   | Plan |   |   |   |   |   |   |   |   |   | Market |   |   | of |   |   | Unearned |   |
|                                   |   |              |   | Number |   |   | Number |   |   |   | Awards: |   |   |   |   |   |   | Number |   |   | Value of |   |   | Unearned |   |   | Shares, |   |
|                                   |   |              |   | of |   |   | of |   |   |   | Number |   |   |   |   |   |   | of Shares |   |   | Shares or |   |   | Shares, |   |   | Units or |   |
|                                   |   |              |   | Securities |   |   | Securities |   |   |   | of |   |   |   |   |   |   | or Units |   |   | Units of |   |   | Units or |   |   | Other |   |
|                                   |   |              |   | Underlying |   |   | Underlying |   |   |   | SecuritiesUnderlying |   |   |   |   |   |   | of Stock |   |   | Stock |   |   | Other Rights |   |   | Rights |   |
|                                   |   |              |   | Unexercised |   |   | Unexercised |   |   |   | Unexercised |   |   | Option |   |   |   | That Have |   |   | That Have |   |   | That Have |   |   | That Have |   |
|                                   |   |              |   | Options |   |   | Options |   |   |   | Unearned |   |   | Exercise |   | Option  |   | Not |   |   | Not |   |   | Not |   |   | Not |   |
|                                   |   |              |   | (#) |   |   |  (#) |   |   |   | Options |   |   | Price |   | Expiration  |   | Vested |   |   | Vested |   |   | Vested |   |   | Vested |   |
| Name                                   |   | Year              |   | Exercisable |   |   | Unexercisable |   |   |   |  (#) |   |   | ($) |   | Date  |   |  (#) |   |   | ($) |   |   |  (#) |   |   | ($) |   |
|                                   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Marc Caramuta - COO                    |   | 2010              |   |   | - |   |   |   | - |   | (1) |   |   | 35,000 |   |   | $ | 0.525 |   | 10/4/2015 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| William Costa - CIO                    |   | 2010              |   |   | - |   |   |   | - |   | (2) |   |   | 35,000 |   |   | $ | 0.680 |   | 8/9/2015 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| George A. McQuain - President and CEO, |   | 2009              |   |   | - |   |   |   | - |   | (3) |   |   | 129,000 |   |   | $ | 0.81 |   | 12/18/2014 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| COO                                    |   | 2009              |   |   | - |   |   |   | - |   | (4) |   |   | 200,000 |   |   | $ | 0.15 |   | 3/27/2014 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                   |   | 2008              |   |   | - |   |   |   | - |   | (5) |   |   | 171,500 |   |   | $ | 0.25 |   | 3/20/2013 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                   |   | 2007              |   |   | 125,000 |   |   |   | 125,000 |   | (6) |   |   | 250,000 |   |   | $ | 0.32 |   | (6) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Michael J. Loiacono - CFO and CAO      |   | 2009              |   |   | - |   |   |   | - |   | (7) |   |   | 75,000 |   |   | $ | 0.81 |   | 12/18/2014 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                   |   | 2009              |   |   | - |   |   |   | - |   | (8) |   |   | 150,000 |   |   | $ | 0.15 |   | 3/27/2014 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                   |   | 2008              |   |   | - |   |   |   | - |   | (9) |   |   | 120,000 |   |   | $ | 0.25 |   | 3/20/2013 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                   |   | 2008              |   |   | - |   |   |   | - |   | (10) |   |   | 27,000 |   |   | $ | 0.25 |   | 2/28/2013 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                   |   | 2007              |   |   | 62,500 |   |   |   | 62,500 |   | (11) |   |   | 125,000 |   |   | $ | 0.32 |   | (11) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                   |   | 2006              |   |   | - |   |   |   | - |   | (12) |   |   | 20,000 |   |   | $ | 0.76 |   | 3/31/2011 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Heather Webb Carrouth - VP New    |   | 2009              |   |   | - |   |   |   | - |   | (13) |   |   | 10,000 |   |   | $ | 0.81 |   | 12/18/2014 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Business Development                   |   | 2009              |   |   | - |   |   |   | - |   | (14) |   |   | 25,000 |   |   | $ | 0.15 |   | 3/27/2014 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                   |   | 2008              |   |   | - |   |   |   | - |   | (15) |   |   | 75,000 |   |   | $ | 0.25 |   | 3/20/2013 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                              |   | 2008              |   |   | - |   |   |   | - |   | (16) |   |   | 13,000 |   |   | $ | 0.25 |   | 2/28/2013 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|   | (1)   | On October 4, 2010, Marc Caramuta received a stock option to purchase 35,000 shares of common stock, which vest cumulatively as follows:  33 1/3% on October 4, 2011; 33 1/3% on October 4, 2012; 33 1/3% on October 4, 2013. |
|--------|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2)   | On August 9, 2010, William Costa received a stock option to purchase 35,000 shares of common stock, which vest cumulatively as follows:  33 1/3% on August 9, 2011; 33 1/3% on August 9, 2012; 33 1/3% on August 9, 2013. |
|--------|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3)   | On December 18, 2009, George McQuain received a stock option to purchase 129,000 shares of common stock, which vest cumulatively as follows:  33 1/3% on December 18, 2010; 33 1/3% on December 18, 2011; 33 1/3% on December 18, 2012. |
|--------|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4)   | On March 27, 2009, George McQuain received a stock option to purchase 200,000 shares of common stock, which vest cumulatively as follows:  33 1/3% on March 27, 2010; 33 1/3% on March 27, 2011; 33 1/3% on March 27, 2012. |
|--------|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (5)   | On March 20, 2008, George McQuain received a stock option to purchase 171,500 shares of common stock, which vest cumulatively as follows:  33 1/3% on March 20, 2009; 33 1/3% on March 20, 2010; 33 1/3% on March 20, 2011. |
|--------|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (6)   | On April 2, 2007, George McQuain received a stock option to purchase 500,000 shares of common stock, which vest based on employment and performance criteria. On October 10, 2007, 62,500 shares of common stock vested under the stock option and expire on April 2, 2010.  The remaining 437,500 vest as follows if employment and performance criteria are met: 62,500 on April 2, 2008 and expire on April 2, 2011; 62,500 on April 2, 2009 and expire on April 2, 2012; 62,500 on April 2, 2010 and expire on April 2, 2013; 125,000 on May 15, 2008 and expire on April 2, 2011; 125,000 on April 2, 2011 and expire on April 2, 2015. |
|--------|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (7)   | On December 18, 2009, Michael J. Loiacono received a stock option to purchase 75,000 shares of common stock, which vest cumulatively as follows:  33 1/3% on December 18, 2010; 33 1/3% on December 18, 2011; 33 1/3% on December 18, 2012. |
|--------|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (8)   | On March 27, 2009, Michael J. Loiacono received a stock option to purchase 150,000 shares of common stock, which vest cumulatively as follows:  33 1/3% on March 27, 2010; 33 1/3% on March 27, 2011; 33 1/3% on March 27, 2012. |
|--------|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (9)   | On March 20, 2008, Michael J. Loiacono received a stock option to purchase 120,000 shares of common stock, which vest cumulatively as follows:  33 1/3% on March 20, 2009; 33 1/3% on March 20, 2010; 33 1/3% on March 20, 2011. |
|--------|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (10)  | On February 29, 2008, Michael J. Loiacono received a stock option to purchase 27,000 shares of common stock, which vest cumulatively as follows:  33 1/3% on February 28, 2009; 33 1/3% on February 28, 2010; 33 1/3% on February 28, 2011. |
|--------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (11)  | On April 2, 2007, Michael J. Loiacono received a stock option to purchase 250,000 shares of common stock, which vest based on employment and performance criteria. On October 10, 2007, 31,250 shares of common stock vested under the stock option and expire on April 2, 2010.  The remaining 218,750 vest as follows if employment and performance criteria are met: 31,250 on April 2, 2008 and expire on April 2, 2011; 31,250 on April 2, 2009 and expire on April 2, 2012; 31,250 on April 2, 2010 and expire on April 2, 2013; 62,500 on May 15, 2008 and expire on April 2, 2011; 62,500 on April 2, 2011 and expire on April 2, 2015. |
|--------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (12)  | On March 31, 2006, Michael J. Loiacono received a stock option to purchase 20,000 shares of common stock, which vest cumulatively as follows:  25% on March 31, 2007; 33 1/3% on March 31, 2008; 33 1/3% on March 31, 2009 and 25% on March 31, 2010. |
|--------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (13)  | On December 18, 2009, Heather Webb Carrouth received a stock option to purchase 10,000 shares of common stock, which vest cumulatively as follows:  33 1/3% on December 18, 2010; 33 1/3% on December 18, 2011; 33 1/3% on December 18, 2012. |
|--------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (14)  | On March 27, 2009, Heather Webb Carrouth received a stock option to purchase 25,000 shares of common stock, which vest cumulatively as follows:  33 1/3% on March 27, 2010; 33 1/3% on March 27, 2011; 33 1/3% on March 27, 2012. |
|--------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (15)  | On March 20, 2008, Heather Webb Carrouth received a stock option to purchase 75,000 shares of common stock, which vest cumulatively as follows:  33 1/3% on March 20, 2009; 33 1/3% on March 20, 2010; 33 1/3% on March 20, 2011. |
|--------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (16)  | On February 29, 2008, Heather Webb Carrouth received a stock option to purchase 13,000 shares of common stock, which vest cumulatively as follows:  33 1/3% on February 28, 2009; 33 1/3% on February 28, 2010; 33 1/3% on February 28, 2011. |
|--------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Name (1)            |   | Year   |   | Fees Earnedor Paid inCash ($) |   |   | Stock Awards ($) |   |   | Option Awards ($) (2) |   |   |   | Non-EquityIncentive PlanCompensation($) |                 |   | Change in Pension Valueand NonqualifiedDeferred CompensationEarnings |   |   | All OtherCompensation($) |   |   | Total($) |   |
|---------------------|--------|--------|--------|------------------------------------|--------|--------|-----------------------|--------|--------|----------------------------|--------|--------|--------|----------------------------------------------|----------------------|--------|--------------------------------------------------------------------------------|--------|--------|-------------------------------|--------|--------|----------|--------|
|                |   |   |   |                               |   |   |                  |   |   |                       |   |   |   |                                         |                 |   |                                                                           |   |   |                          |   |   |     |   |
| Michael I. Connolly |   | 2010   |   | $                                  | 0      |   |                  |   | -      |                       |   | $      | 0      |                                         |                 |   |                                                                           | -      |   |                          |   | -      |     |   |   | - |   |   | $ | 0 |   |
|                |   |   |   |                               |   |   |                  |   |   |                       |   |   |   |                                         |                 |   |                                                                           |   |   |                          |   |   |     |   |   |   |   |   |   |   |   |
| Walter A. Howell    |   | 2010   |   | $                                  | 9,500  |   |                  |   | -      |                       |   | $      | 9,084  |                                         | (3),(4),(5),(11)     |   |                                                                           | -      |   |                          |   | -      |     |   |   | - |   |   | $ | 18,584 |   |
|                |   |   |   |                               |   |   |                  |   |   |                       |   |   |   |                                         |                 |   |                                                                           |   |   |                          |   |   |     |   |   |   |   |   |   |   |   |
| Lock Ireland        |   | 2010   |   | $                                  | 37,100 |   |                  |   | -      |                       |   | $      | 11,785 |                                         | (4),(6),(7),(8),(12) |   |                                                                           | -      |   |                          |   | -      |     |   |   | - |   |   | $ | 48,885 |   |
|                |   |   |   |                               |   |   |                  |   |   |                       |   |   |   |                                         |                 |   |                                                                           |   |   |                          |   |   |     |   |   |   |   |   |   |   |   |
| Robert Landis       |   | 2010   |   | $                                  | 15,500 |   |                  |   | -      |                       |   | $      | 7,855  |                                         | (4),(6),(8),(12)     |   |                                                                           | -      |   |                          |   | -      |     |   |   | - |   |   | $ | 23,355 |   |
|                |   |   |   |                               |   |   |                  |   |   |                       |   |   |   |                                         |                 |   |                                                                           |   |   |                          |   |   |     |   |   |   |   |   |   |   |   |
| Joseph Loughry, III |   | 2010   |   | $                                  | 51,500 |   |                  |   | -      |                       |   | $      | 7,236  |                                         | (4),(9),(10),(13)    |   |                                                                           | -      |   |                          |   | -      |     |   |   | - |   |   | $ | 58,736 |   |
|                |   |   |   |                               |   |   |                  |   |   |                       |   |   |   |                                         |                 |   |                                                                           |   |   |                          |   |   |     |   |   |   |   |   |   |   |   |
| Alan Rossiter       |   | 2010   |   | $                                  | 9,500  |   |                  |   | -      |                       |   | $      | 7,236  |                                         | (4),(9),(10),(13)    |   |                                                                           | -      |   |                          |   | -      |     |   |   | - |   |   | $ | 16,736 |   |

|   | (1) | George A. McQuain, who is a member of our board of directors, has been omitted from this table since he receives no compensation for serving on our board of directors. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | The option awards were valued using the Black-Scholes option pricing model assuming up to 5 year lives, no expected dividend payments, volatility average of approximately 131%, forfeiture rate of 0% and a risk free rate of 5%.  These option awards were computed based on such awards’ aggregate grant date fair value pursuant to FASB ASC Topic 718. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | 5,000 shares vest under this option on August 30, 2009, August 30, 2010, August 30, 2011 and August 30, 2012. |
|--------|-----|---------------------------------------------------------------------------------------------------------------|

|   | (4) | 16,666 shares vest under this option on June 26, 2009 and June 26, 2010 and 16,667 shares on June 26, 2011. |
|--------|-----|-------------------------------------------------------------------------------------------------------------|

|   | (5) | 5,000 shares vest under this option on August 30, 2010, August 30, 2011, August 30, 2012 and August 30, 2013. |
|--------|-----|---------------------------------------------------------------------------------------------------------------|

|   | (6) | 5,000 shares vest under this option on July 10, 2009, July 10, 2010, July 10, 2011 and July 10, 2012. |
|--------|-----|-------------------------------------------------------------------------------------------------------|

|   | (7) | 33,333 shares vest under this option on March 27, 2010 and March 27, 2011 and 33,334 shares on March 27, 2012. |
|--------|-----|----------------------------------------------------------------------------------------------------------------|

|   | (8) | 5,000 shares vest under this option on July 10, 2009, July 10, 2010, July 10, 2011 and July 10, 2012. |
|--------|-----|-------------------------------------------------------------------------------------------------------|

|   | (9) | 5,000 shares vest under this option on December 16, 2009, December 16, 2010, December 16, 2011 and December 16, 2012. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------|

|   | (10) | 5,000 shares vest under this option on December 16, 2010, December 16, 2011, December 16, 2012 and December 16, 2013. |
|--------|------|-----------------------------------------------------------------------------------------------------------------------|

|   | (11) | 5,000 shares vest under this option on August 30, 2011, August 30, 2012, August 30, 2013 and August 30, 2014. |
|--------|------|---------------------------------------------------------------------------------------------------------------|

|   | (12) | 5,000 shares vest under this option on July 12, 2011, July 12, 2012, July 12, 2013 and July 12, 2014. |
|--------|------|-------------------------------------------------------------------------------------------------------|

|   | (13) | 5,000 shares vest under this option on December 16, 2011, December 16, 2012, December 16, 2013 and December 16, 2014. |
|--------|------|-----------------------------------------------------------------------------------------------------------------------|

| Name                 |    | Number of Options |    | Grant Date and Fair Value of Granted Options |
|----------------------|--------------|-----------------------------|--------------|---------------------------------------------------------------------------------|
|                 |         |                        |         |                                                                            |
| Connolly, Michael I. |         | 20,000                      |         |  20,000 options granted on December 27, 2010 with a fair value of $8,917   |
| Howell, Walter A.    |         | 20,000                      |         |  20,000 options granted on August 30, 2010 with a fair value of $9,149     |
| Ireland, Lock        |         | 20,000                      |         |  20,000 options granted on July 10, 2010 with a fair value of $12,604      |
| Landis, Robert       |         | 20,000                      |         |  20,000 options granted on July 10, 2010 with a fair value of $12,604      |
| Loughry, Joseph      |         | 20,000                      |         |  20,000 options granted on December 16, 2010 with a fair value of $9,908   |
| Rossiter, Alan       |         | 20,000                      |         |  20,000 options granted on December 16, 2010 with a fair value of $9,908   |

| Name                 |    | Total options outstanding |    | Total options exercisable |
|----------------------|--------------|-------------------------------------|--------------|-------------------------------------|
|                 |         |                                |         |                                |
| Connolly, Michael I. |         | 20,000                              |         | -                                   |
| Howell, Walter A.    |         | 130,000                             |         | 68,300                              |
| Ireland, Lock        |         | 230,000                             |         | 101,600                             |
| Landis, Robert       |         | 130,000                             |         | 68,300                              |
| Loughry, Joseph      |         | 130,000                             |         | 68,300                              |
| McQuain, George A.   |         | 1,000,500                           |         | 536,276                             |
| Rossiter, Alan       |         | 130,000                             |         | 71,620                              |

----

|   | ITEM 12.  | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
|--------|----------------|------------------------------------------------------------------------------------------------|

| Name of Beneficial Owner                      |   | Number of SharesBeneficially Owned (1) |      |   | Percent of SharesOutstanding (2) |   |   |
|--------------------------------------------------------------|--------|------------------------------------------------------------|-----------|--------|-------------------------------------------------|--------|--------|
|                                                         |   |                                                       |      |   |                                            |   |   |
| Marc Caramuta                                                |   |                                                       | -         |   |                                            |   | -      |   |   |
| Michael I. Connolly                                          |   |                                                       | -         |   |                                            |   | -      |   |   |
| William Costa                                                |   |                                                       | -         |   |                                            |   | -      |   |   |
| Walter A. Howell                                             |   |                                                       | 106,300   |   |                                            |   | 0.47   | % | (3) |
| Lock Ireland                                                 |   |                                                       | 315,607   |   |                                            |   | 1.40   | % | (4) |
| Sharon Jackson                                               |   |                                                       | 54,660    |   |                                            |   | 0.24   | % | (5) |
| Robert Landis                                                |   |                                                       | 108,300   |   |                                            |   | 0.48   | % | (6) |
| Michael Loiacono                                             |   |                                                       | 394,015   |   |                                            |   | 1.75   | % | (7) |
| Joseph M. Loughry, III                                       |   |                                                       | 264,440   |   |                                            |   | 1.17   | % | (8) |
| Alan Rossiter                                                |   |                                                       | 86,120    |   |                                            |   | 0.38   | % | (9) |
|                                                         |   |                                                       |      |   |                                            |   |   |   |   |
| All executive officers and directors as a group (10 persons) |   |                                                       | 1,329,442 |   |                                            |   | 5.90   | % |   |
|                                                         |   |                                                       |      |   |                                            |   |   |   |   |
| 5% owners:                                                   |   |                                                       |      |   |                                            |   |   |   |   |
|                                                         |   |                                                       |      |   |                                            |   |   |   |   |
| BFS U.S. Special Opportunities Trust PLC                     |   |                                                       | 1,353,333 |   |                                            |   | 6.00   | % | (10) |
| Rennaissance U.S. Growth Investment Trust PLC                |   |                                                       | 1,553,333 |   |                                            |   | 6.89   | % | (11) |
| Rennaissance Capital Growth & Income Fund III, Inc.      |   |                                                       | 953,333   |   |                                            |   | 4.23   | % | (12) |
| Doucet Capital, LLC                                          |   |                                                       | 1,464,606 |   |                                            |   | 6.50   | % | (13) |
| MidSouth Investor Fund LP                                    |   |                                                       | 1,556,840 |   |                                            |   | 6.91   | % | (14) |
|                                                         |   |                                                       |      |   |                                            |   |   |   |   |
| All 5% owners                                                |   |                                                       | 6,881,445 |   |                                            |   | 30.52  | % |   |
|                                                         |   |                                                       |      |   |                                            |   |   |   |   |
| Total                                                        |   |                                                       | 8,210,887 |   |                                            |   | 36.42  | % |   |

----

|   | (1) | Beneficial ownership includes shares for which an individual, directly or indirectly, has or shares voting or investment power, or both, and also includes options that are exercisable as of March 2, 2011.  Unless otherwise indicated, all of the listed persons have sole voting and investment power over the shares listed opposite their names.  Beneficial ownership as reported in the above table has been determined in accordance with Rule 13d-3 of the Securities Exchange Act of 1934, as amended, referred to in this statement as the Exchange Act. Pursuant to the rules of the Securities and Exchange Commission, referred to in this statement as the SEC, certain shares of our common stock that a beneficial owner has the right to acquire pursuant to the exercise of stock options or warrants are deemed to be outstanding for the purpose of computing the percentage ownership of such owner, but are not deemed outstanding for the purpose of computing the percentage ownership of any other person. Information contained in the table with respect to the holdings of 5% beneficial owners is taken from filings made with the SEC by the reporting beneficial owners on Schedule 13D and/or Schedule 13G, and any amendments thereto. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Based on 22,545,326 shares of common stock outstanding as of March 2, 2011. |
|--------|-----|-----------------------------------------------------------------------------|

|   | (3) | Includes 38,000 shares of common stock and 68,300 options to purchase common stock. |
|--------|-----|-------------------------------------------------------------------------------------|

|   | (4) | Includes 214,007 shares of common stock and 101,600 options to purchase common stock. |
|--------|-----|---------------------------------------------------------------------------------------|

|   | (5) | Includes 14,200 shares of common stock and 40,460 options to purchase common stock. |
|--------|-----|-------------------------------------------------------------------------------------|

|   | (6) | Includes 40,000 shares of common stock and 68,300 options to purchase common stock. |
|--------|-----|-------------------------------------------------------------------------------------|

|   | (7) | Includes 44,938 shares of common stock and 349,077 options to purchase common stock. |
|--------|-----|--------------------------------------------------------------------------------------|

|   | (8) | Includes 196,140 shares of common stock and 68,300 options to purchase common stock. |
|--------|-----|--------------------------------------------------------------------------------------|

|   | (9) | Includes 14,500 shares of common stock and 71,620 options to purchase common stock. |
|--------|-----|-------------------------------------------------------------------------------------|

|   | (10) | Includes 1,353,333 shares of common stock.  The principal business address of BFS U.S. Special Opportunities Trust PLC is 8080 North Central Expressway, Suite 210-LB, Dallas, Texas 75206-1857. Russell Cleveland, Renaissance Capital Group, Inc. - Investment Adviser |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (11) | Includes 1,553,333 shares of common stock.  The principal business address of Rennaissance U.S. Growth Investment Trust PLC is 8080 North Central Expressway, Suite 210-LB, Dallas, Texas 75206-1857. Russell Cleveland, Renaissance Capital Group, Inc. - Investment Adviser |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (12) | Includes 953,333 shares of common stock.  The principal business address of Rennaissance Capital Growth & Income Fund III, Inc. is 8080 North Central Expressway, Suite 210-LB, Dallas, Texas 75206-1857. Russell Cleveland, Renaissance Capital Group, Inc. - Investment Manager |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (13) | Includes 1,464,606 shares of common stock.  The principal business address of Doucet Capital, LLC is 2204 Lakeshore Drive, Suite 218, Birmingham, Alabama 35209. Chris Doucet, Doucet Capital, LLC - Investment Manager |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (14) | Includes 1,556,840 shares of common stock.  The principal business address of MidSouth Investor Fund LP is 201 4th Avenue, North Suite 1950, Nashville, Tennessee 37219. Lyman Heidtke, MidSouth Capital, Inc. – General Partner |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ITEM 13.  | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
|--------|----------------|---------------------------------------------------------------------------|

|   | ITEM 14.  | PRINCIPAL ACCOUNTING FEES AND SERVICES |
|--------|----------------|----------------------------------------|

----

----

|   | ITEM 15.  | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES |
|--------|----------------|--------------------------------------------|

| ExhibitNumber |   |  Exhibit Description                                                                                                                                                                                                                                                        |
|---------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|          |   |                                                                                                                                                                                                                                                                             |
| 3.1           |   | Articles of Incorporation – Restated and Amended May 30, 2001 (incorporated by reference to form 10-KSB, filed with the SEC on March 31, 2003).                                                                                                                            |
|          |   |                                                                                                                                                                                                                                                                             |
| 3.2           |   | ByLaws of Global Axcess Corp. – As Amended (incorporated by reference to Form 10-KSB, filed with the SEC on March 31, 2003).                                                                                                                                               |
|          |   |                                                                                                                                                                                                                                                                             |
| 3.3           |   | Amendment to the Articles of Incorporation (incorporated by reference to Form 10-K/A, filed with the SEC on January 28, 2011).                                                                                                                                                   |
|          |   |                                                                                                                                                                                                                                                                             |
| 4.1           |   | Securities Purchase Agreement dated October 27, 2005 entered by and between the Company and the Investor (incorporated by reference to Form 10-K/A, filed with the SEC on January 28, 2011).                                                                                     |
|          |   |                                                                                                                                                                                                                                                                             |
| 4.2           |   | Common Stock Purchase Warrant dated October 27, 2005 issued by the Company to the Investor (incorporated by reference to Form 10-K/A, filed with the SEC on January 28, 2011).                                                                                                   |
|          |   |                                                                                                                                                                                                                                                                             |
| 4.3           |   | Registration Rights Agreement dated October 27, 2005 entered by and between the Company and the Investor (incorporated by reference to Form 10-K/A, filed with the SEC on January 28, 2011).                                                                                     |
|          |   |                                                                                                                                                                                                                                                                             |
| 4.4           |   | Subsidiary Guarantee dated October 27, 2005 (incorporated by reference to Form 10-K/A, filed with the SEC on January 28, 2011).                                                                                                                                                  |
|          |   |                                                                                                                                                                                                                                                                             |
| 4.5           |   | Security Agreement dated October 27, 2005 entered by and between the Company and the Investor (incorporated by reference to Form 10-K/A, filed with the SEC on January 28, 2011).                                                                                                |
|          |   |                                                                                                                                                                                                                                                                             |
| 10.1          |   | Agreement entered into with Food Lion, LLC and Nationwide Money Services, Inc dated October 5, 2001 (incorporated by reference to Form 10-K/A, filed with the SEC on January 28, 2011).                                                                                          |
|          |   |                                                                                                                                                                                                                                                                             |
| 10.2          |   | Distributor ATM Processing Agreement between Nationwide Money Services and Genpass Technologies LLC dated December 15, 2005 (incorporated by reference to Form 8-K filed with the SEC on December 20, 2005).                                                                     |
|          |   |                                                                                                                                                                                                                                                                             |
| 10.3          |   | Cash Provisioning Agreement, dated June 1, 2009, by and between U.S. Bank, a national association doing business as Elan Financial Services, Nationwide Money Services, Inc. and Pendum, LLC (incorporated by reference to Form 10-K/A, filed with the SEC on January 28, 2011). |
|          |   |                                                                                                                                                                                                                                                                             |
| 10.4          |   | Office Lease with Surburban Owner LLC (incorporated by reference to Form 10-K/A, filed with the SEC on January 28, 2011).                                                                                                                                                        |
|          |   |                                                                                                                                                                                                                                                                             |
| 10.5          |   | Employment Agreement dated July 1, 2008 by and between the Company and George McQuain (incorporated by reference to Form 10-K/A, filed with the SEC on January 28, 2011) (Management compensation plan or arrangement).                                                          |
|          |   |                                                                                                                                                                                                                                                                             |
| 10.6          |   | Director Compensation Arrangements (incorporated by reference to Form 10-Q filed August 7, 2008) (Management compensation plan or arrangement).                                                                                                                                  |

----

| ExhibitNumber |   |  Exhibit Description                                                                                                                                                                                                                                                                                           |
|---------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.7          |   | 2002 Stock Incentive Plan (incorporated by reference to Form S-8 filed December 10, 2003).                                                                                                                                                                                                                          |
|          |   |                                                                                                                                                                                                                                                                                                                |
| 10.8          |   | First Amendment to 2002 Stock Incentive Plan (incorporated by reference to Form 10-K/A, filed with the SEC on January 28, 2011).                                                                                                                                                                                    |
|          |   |                                                                                                                                                                                                                                                                                                                |
| 10.9          |   | 2004 Stock Incentive Plan (originally filed on Form S-8 with the SEC on June 25, 2004).                                                                                                                                                                                                                             |
|          |   |                                                                                                                                                                                                                                                                                                                |
| 10.10         |   | First Amendment to 2004 Stock Incentive Plan. (incorporated by reference to Form 10-K/A, filed with the SEC on January 28, 2011).                                                                                                                                                                                   |
|          |   |                                                                                                                                                                                                                                                                                                                |
| 10.11         |   | Mediated Settlement Agreement, dated January 22, 2009, by and between the Company and Sidney Michael Cole (incorporated by reference to Form 10-K/A, filed with the SEC on January 28, 2011) (This agreement has been redacted pursuant to a confidential treatment request filed with the SEC on the date hereof). |
|          |   |                                                                                                                                                                                                                                                                                                                |
| 10.12         |   | Settlement Agreement, effective as of March 17, 2009, between Global Axcess Corp. and CAMOFI Master LDC (incorporated by reference to Form 10-K/A, filed with the SEC on January 28, 2011).                                                                                                                         |
|          |   |                                                                                                                                                                                                                                                                                                                |
| 10.13         |   | Net Enterprise Value Special Transaction Plan (incorporated by reference to Form 8-K filed with the SEC on April 6, 2010).                                                                                                                                                                                          |
|          |   |                                                                                                                                                                                                                                                                                                                |
| 10.14         |   | Loan and Security Agreement, dated as of June 18, 2010, by and among Global Axcess Corp. (and subsidiaries) and Fifth Third Bank (incorporated by reference to Form 8-K filed with the SEC on June 22, 2010).                                                                                                       |
|          |   |                                                                                                                                                                                                                                                                                                                |
| 10.15         |   | Term Promissory Note, dated June 18, 2010, issued by Global Axcess Corp. to Fifth Third Bank (incorporated by reference to Form 8-K filed with the SEC on June 22, 2010).                                                                                                                                           |
|          |   |                                                                                                                                                                                                                                                                                                                |
| 10.16         |   | Draw Promissory Note, dated June 18, 2010, issued by Global Axcess Corp. to Fifth Third Bank (incorporated by reference to Form 8-K filed with the SEC on June 22, 2010).                                                                                                                                           |
|          |   |                                                                                                                                                                                                                                                                                                                |
| 10.17         |   | Master Equipment Lease Agreement, dated June 18, 2010, by and among Global Axcess Corp. and Fifth Third Bank (incorporated by reference to Form 8-K filed with the SEC on June 22, 2010).                                                                                                                           |
|          |   |                                                                                                                                                                                                                                                                                                                |
| 10.18         |   | Amendment One to Employment Agreement, dated October 21, 2010, by and among the Company and George A. McQuain (incorporated by reference to Form 8-K filed with the SEC on October 26, 2010).                                                                                                                       |
|          |   |                                                                                                                                                                                                                                                                                                                |
| 10.19         |   | Employment Agreement, dated October 21, 2010, by and between the Company and Michael J. Loiacono (incorporated by reference to Form 8-K filed with the SEC on October 26, 2010).                                                                                                                                    |
|          |   |                                                                                                                                                                                                                                                                                                                |
| 10.20         |   | Asset Purchase Agreement by and between the Company and Tejas Video Partners, LTD, dated November 10, 2010 (incorporated by reference to Form 8-K, filed with the SEC on November 12, 2010).                                                                                                                        |
|          |   |                                                                                                                                                                                                                                                                                                                |
| 10.21         |   | Asset Purchase Agreement by and between the Company and FMiATM, Inc., dated December 1, 2010.*                                                                                                                                                                                                                      |
|          |   |                                                                                                                                                                                                                                                                                                                |
| 10.22         |   | First Amendment to Loan and Security Agreement, dated as of December 17, 2010, by and among Global Axcess Corp. (and subsidiaries) and Fifth Third Bank (incorporated by reference to Form 8-K, filed with the SEC on December 23, 2010).                                                                           |

----

| ExhibitNumber |   |  Exhibit Description                                                                                                                                                                                                           |
|---------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.23         |   | 2010 Stock Incentive Plan (originally filed as part of the Company’s Schedule 14A Proxy Statement with the SEC on April 16, 2010).                                                                                            |
|          |   |                                                                                                                                                                                                                                |
| 21.1          |   | List of Subsidiaries:   Nationwide Money Services, Inc., a Nevada corporation   Nationwide Ntertainment Services, Inc., a Nevada corporation   EFT Integration, Inc., a Florida corporation |
|          |   |                                                                                                                                                                                                                                |
| 23.1          |   | Consent of Kirkland, Russ, Murphy & Tapp, P.A.*                                                                                                                                                                                 |
|          |   |                                                                                                                                                                                                                                |
| 23.2          |   | Consent of Mayer Hoffman McCann P.C.*                                                                                                                                                                                               |
|          |   |                                                                                                                                                                                                                                |
| 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 Corp. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*                                                                                                     |
|          |   |                                                                                                                                                                                                                                |
| 32.2          |   | Certification of the Chief Financial Officer of Global Axcess Corp. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*                                                                                                     |

----

----

| Signature               |   | Title                                                          |
|-------------------------|--------|----------------------------------------------------------------|
|                    |   |                                                           |
| /S/ Michael J. Loiacono |   | Chief Financial Officer and Chief Accounting Officer           |
| Michael J. Loiacono     |   | (principal financial officer and principal accounting officer) |
|                    |   |                                                           |
| /S/ Michael I. Connolly |   | Interim President, Interim Co-CEO and Director                 |
| Michael I. Connolly     |   | (interim principal executive officer)                          |
|                    |   |                                                           |
| /S/ Walter A. Howell    |   |                                                           |
| Walter A. Howell        |   | Director                                                       |
|                    |   |                                                           |
| /S/ Lock Ireland        |   |                                                           |
| Lock Ireland            |   | Interim Co-CEO, Vice Chairman and Director                     |
|                    |   |                                                           |
| /S/ Robert Landis       |   |                                                           |
| Robert Landis           |   | Director                                                       |
|                    |   |                                                           |
| /S/ Joseph Loughry      |   |                                                           |
| Joseph Loughry          |   | Chairman and Director                                          |
|                    |   |                                                           |
| /S/ Alan Rossiter       |   |                                                           |
| Alan Rossiter           |   | Director                                                       |

----

|                                                                                                       | PAGE NO. |
|------------------------------------------------------------------------------------------------------------|---------------|
|                                                                                                       |          |
| Report of Independent Registered Public Accounting Firm - 2010                                             | 1             |
|                                                                                                       |          |
| Report of Independent Registered Public Accounting Firm - 2009                                             | 2             |
|                                                                                                       |          |
| Consolidated financial statements                                                                          |          |
|                                                                                                       |          |
| Consolidated balance sheets as of December 31, 2010 and 2009                                               | 3             |
|                                                                                                       |          |
| Consolidated statements of income for the years ended December 31, 2010, 2009 and 2008                     | 4             |
|                                                                                                       |          |
| Consolidated statements of stockholders’ equity for the years ended December 31, 2010, 2009 and 2008 | 5             |
|                                                                                                       |          |
| Consolidated statements of cash flows for the years ended December 31, 2010, 2009 and 2008                 | 6             |
|                                                                                                       |          |
| Notes to consolidated financial statements as of December 31, 2010                                         | 8             |

----

----

----

|                                                                                                                                                                                                            |   | As of December 31, |       |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|------------|
|                                                                                                                                                                                                            |   | 2010               |       |   | 2009 |   |
| ASSETS                                                                                                                                                                                                          |   |               |       |   |   |   |
| Current assets                                                                                                                                                                                                  |   |               |       |   |   |   |
| Cash and cash equivalents                                                                                                                                                                                       |   | $                  | 1,743,562  |   |   | $ | 2,007,860 |   |
| Automated teller machine vault cash                                                                                                                                                                             |   |               | -          |   |   |   | 250,000 |   |
| Accounts receivable, net of allowance of $4,354 in 2010 and $12,616 in 2009                                                                                                                                     |   |               | 410,956    |   |   |   | 845,000 |   |
| Inventory, net of allowance for obsolescence of $182,572 in 2010 and $94,572 in 2009                                                                                                                       |   |               | 1,389,606  |   |   |   | 308,031 |   |
| Deferred tax asset - current                                                                                                                                                                                    |   |               | 363,926    |   |   |   | 868,848 |   |
| Prepaid expenses and other current assets                                                                                                                                                                       |   |               | 139,551    |   |   |   | 132,100 |   |
| Total current assets                                                                                                                                                                                            |   |               | 4,047,601  |   |   |   | 4,411,839 |   |
|                                                                                                                                                                                                            |   |               |       |   |   |   |   |   |
| Fixed assets, net                                                                                                                                                                                               |   |               | 9,581,561  |   |   |   | 5,299,661 |   |
|                                                                                                                                                                                                            |   |               |       |   |   |   |   |   |
| Other assets                                                                                                                                                                                                    |   |               |       |   |   |   |   |   |
| Merchant contracts, net                                                                                                                                                                                         |   |               | 10,879,029 |   |   |   | 10,665,613 |   |
| Intangible assets, net                                                                                                                                                                                          |   |               | 4,219,216  |   |   |   | 4,095,911 |   |
| Deferred tax asset - non-current                                                                                                                                                                                |   |               | 1,611,285  |   |   |   | 813,618 |   |
| Restricted cash                                                                                                                                                                                                 |   |               | -          |   |   |   | 800,000 |   |
| Other assets                                                                                                                                                                                                    |   |               | 66,807     |   |   |   | 30,307 |   |
|                                                                                                                                                                                                            |   |               |       |   |   |   |   |   |
| Total assets                                                                                                                                                                                                    |   | $                  | 30,405,499 |   |   | $ | 26,116,949 |   |
|                                                                                                                                                                                                            |   |               |       |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                                                                            |   |               |       |   |   |   |   |   |
| Current liabilities                                                                                                                                                                                             |   |               |       |   |   |   |   |   |
| Accounts payable and accrued liabilities                                                                                                                                                                        |   | $                  | 4,604,837  |   |   | $ | 2,983,583 |   |
| Automated teller machine vault cash payable                                                                                                                                                                     |   |               | -          |   |   |   | 250,000 |   |
| Notes payable - related parties  - current portion, net                                                                                                                                               |   |               | 29,740     |   |   |   | 26,722 |   |
| Notes payable - current portion                                                                                                                                                                                 |   |               | 21,777     |   |   |   | 19,803 |   |
| Senior lenders' notes payable - current portion, net                                                                                                                                                            |   |               | 2,426,915  |   |   |   | 1,828,572 |   |
| Capital lease obligations - current portion                                                                                                                                                                     |   |               | 455,188    |   |   |   | 667,233 |   |
| Total current liabilities                                                                                                                                                                                       |   |               | 7,538,457  |   |   |   | 5,775,913 |   |
|                                                                                                                                                                                                            |   |               |       |   |   |   |   |   |
| Long-term liabilities                                                                                                                                                                                           |   |               |       |   |   |   |   |   |
| Notes payable - related parties - long-term portion, net                                                                                                                                                        |   |               | 43,694     |   |   |   | 72,690 |   |
| Notes payable - long-term portion                                                                                                                                                                               |   |               | 51,476     |   |   |   | 73,120 |   |
| Senior lenders' notes payable - long-term portion, net                                                                                                                                                          |   |               | 6,622,539  |   |   |   | 3,300,000 |   |
| Capital lease obligations - long-term portion                                                                                                                                                                   |   |               | 205,275    |   |   |   | 329,314 |   |
| Total liabilities                                                                                                                                                                                               |   |               | 14,461,441 |   |   |   | 9,551,037 |   |
|                                                                                                                                                                                                            |   |               |       |   |   |   |   |   |
| Stockholders' equity                                                                                                                                                                                            |   |               |       |   |   |   |   |   |
| Preferred stock; $0.001 par value; 5,000,000 shares authorized, no shares issued and outstanding                                                                                                                |   |               | -          |   |   |   | - |   |
| Common stock; $0.001 par value; 45,000,000 shares authorized, 22,292,469 and 21,931,786 shares issued and 22,139,444 and 21,883,924 shares outstanding at December 31, 2010 and December 31, 2009, respectively |   |               | 22,188     |   |   |   | 21,932 |   |
| Additional paid-in capital                                                                                                                                                                                      |   |               | 23,202,338 |   |   |   | 22,900,880 |   |
| Accumulated deficit                                                                                                                                                                                             |   |               | (7,198,502 | ) |   |   | (6,344,934 | ) |
| Treasury stock; 153,025 and 47,862 shares of common stock at cost at December 31, 2010 and December 31, 2009, respectively                                                                                      |   |               | (81,966    | ) |   |   | (11,966 | ) |
| Total stockholders' equity                                                                                                                                                                                      |   |               | 15,944,058 |   |   |   | 16,565,912 |   |
| Total liabilities and stockholders' equity                                                                                                                                                                      |   | $                  | 30,405,499 |   |   | $ | 26,116,949 |   |

----

|                                                             |   | For the Fiscal Years Ended December 31, |       |
|------------------------------------------------------------------|--------|-----------------------------------------|------------|
|                                                             |   | 2010                                    |       |   | 2009 |   |   | 2008 |   |
|                                                             |   |                                    |       |   |   |   |   |   |   |
| Revenues                                                         |   | $                                       | 22,743,335 |   |   | $ | 21,494,867 |   |   | $ | 22,171,072 |   |
|                                                             |   |                                    |       |   |   |   |   |   |   |   |   |   |
| Cost of revenues                                                 |   |                                    | 13,355,741 |   |   |   | 11,316,919 |   |   |   | 12,347,991 |   |
| Gross profit                                                     |   |                                    | 9,387,594  |   |   |   | 10,177,948 |   |   |   | 9,823,081 |   |
|                                                             |   |                                    |       |   |   |   |   |   |   |   |   |   |
| Operating expenses                                               |   |                                    |       |   |   |   |   |   |   |   |   |   |
| Depreciation expense                                             |   |                                    | 1,597,333  |   |   |   | 1,178,927 |   |   |   | 1,411,360 |   |
| Amortization of intangible merchant contracts                    |   |                                    | 854,685    |   |   |   | 786,173 |   |   |   | 770,270 |   |
| Impairment of long-lived assets                                  |   |                                    | 481,993    |   |   |   | - |   |   |   | - |   |
| Selling, general and administrative                              |   |                                    | 6,671,443  |   |   |   | 5,437,624 |   |   |   | 5,288,959 |   |
| Stock compensation expense                                       |   |                                    | 215,813    |   |   |   | 120,188 |   |   |   | 159,840 |   |
| Total operating expenses                                         |   |                                    | 9,821,267  |   |   |   | 7,522,912 |   |   |   | 7,630,429 |   |
| Operating income (loss) from operations before items shown below |   |                                    | (433,673   | ) |   |   | 2,655,036 |   |   |   | 2,192,652 |   |
|                                                             |   |                                    |       |   |   |   |   |   |   |   |   |   |
| Interest expense, net                                            |   |                                    | (522,083   | ) |   |   | (645,758 | ) |   |   | (1,046,287 | ) |
| Gain on sale or disposal of assets                               |   |                                    | -          |   |   |   | - |   |   |   | 23,872 |   |
| Loss on early extinguishment of debt                             |   |                                    | (102,146   | ) |   |   | (474,960 | ) |   |   | - |   |
| Income (loss) from operations before income tax benefit          |   |                                    | (1,057,902 | ) |   |   | 1,534,318 |   |   |   | 1,170,237 |   |
| Income tax benefit                                               |   |                                    | 204,334    |   |   |   | 1,278,888 |   |   |   | - |   |
| Net income (loss)                                                |   | $                                       | (853,568   | ) |   | $ | 2,813,206 |   |   | $ | 1,170,237 |   |
|                                                             |   |                                    |       |   |   |   |   |   |   |   |   |   |
| Income (loss) per common share - basic:                          |   |                                    |       |   |   |   |   |   |   |   |   |   |
| Net income (loss) per common share                               |   | $                                       | (0.04      | ) |   | $ | 0.13 |   |   | $ | 0.06 |   |
|                                                             |   |                                    |       |   |   |   |   |   |   |   |   |   |
| Income (loss) per common share - diluted:                        |   |                                    |       |   |   |   |   |   |   |   |   |   |
| Net income (loss) per common share                               |   | $                                       | (0.04      | ) |   | $ | 0.12 |   |   | $ | 0.06 |   |
|                                                             |   |                                    |       |   |   |   |   |   |   |   |   |   |
| Weighted average common shares outstanding:                      |   |                                    |       |   |   |   |   |   |   |   |   |   |
| Basic                                                            |   |                                    | 21,980,369 |   |   |   | 21,654,554 |   |   |   | 20,973,924 |   |
| Diluted                                                          |   |                                    | 21,980,369 |   |   |   | 22,845,241 |   |   |   | 20,973,924 |   |

----

|                                                             |   |         |       |   |    |   |   | Additional  |   |   |       |   |   |          |        |   | Total  |   |
|------------------------------------------------------------------|--------|--------------|------------|--------|---------|--------|--------|-------------|--------|--------|------------|--------|--------|---------------|-------------|--------|--------|--------|
|                                                             |   | Common Stock |       |   | Paid-in |   |   | Accumulated |   |   | Treasury   |   |   | Stockholders' |        |
|                                                             |   | Shares       |       |   | Amount  |   |   | Capital     |   |   | Deficit    |   |   | Stock         |        |   | Equity |   |
|                                                             |   |         |       |   |    |   |   |        |   |   |       |   |   |          |        |   |   |   |
| Balances, December 31, 2007                                      |   |         | 20,973,924 |   |    | $      | 21,022 |        |   | $      | 22,453,584 |   |   | $             | (10,328,377 | )      |   | $      | (11,966 | ) |   | $ | 12,134,263 |   |
|                                                             |   |         |       |   |    |   |   |        |   |   |       |   |   |          |        |   |   |   |   |   |   |   |   |   |
| Stock compensation expense                                       |   |         | -          |   |    |   | -      |        |   |   | 159,840    |   |   |          | -           |   |   |   | - |   |   |   | 159,840 |   |
|                                                             |   |         |       |   |    |   |   |        |   |   |       |   |   |          |        |   |   |   |   |   |   |   |   |   |
| Net income                                                       |   |         | -          |   |    |   | -      |        |   |   | -          |   |   |          | 1,170,237   |   |   |   | - |   |   |   | 1,170,237 |   |
|                                                             |   |         |       |   |    |   |   |        |   |   |       |   |   |          |        |   |   |   |   |   |   |   |   |   |
| Balances, December 31, 2008                                      |   |         | 20,973,924 |   |    | $      | 21,022 |        |   | $      | 22,613,424 |   |   | $             | (9,158,140  | )      |   | $      | (11,966 | ) |   | $ | 13,464,340 |   |
|                                                             |   |         |       |   |    |   |   |        |   |   |       |   |   |          |        |   |   |   |   |   |   |   |   |   |
| Stock compensation expense                                       |   |         | -          |   |    |   | -      |        |   |   | 120,188    |   |   |          | -           |   |   |   | - |   |   |   | 120,188 |   |
|                                                             |   |         |       |   |    |   |   |        |   |   |       |   |   |          |        |   |   |   |   |   |   |   |   |   |
| Stock options issued to consultants in lieu of cash compensation |   |         | -          |   |    |   | -      |        |   |   | 23,999     |   |   |          | -           |   |   |   | - |   |   |   | 23,999 |   |
|                                                             |   |         |       |   |    |   |   |        |   |   |       |   |   |          |        |   |   |   |   |   |   |   |   |   |
| Stock expense relating to early extinguishment of debt           |   |         | -          |   |    |   | -      |        |   |   | 135,079    |   |   |          | -           |   |   |   | - |   |   |   | 135,079 |   |
|                                                             |   |         |       |   |    |   |   |        |   |   |       |   |   |          |        |   |   |   |   |   |   |   |   |   |
| Stock warrants excercised                                        |   |         | 910,000    |   |    |   | 910    |        |   |   | 8,190      |   |   |          | -           |   |   |   | - |   |   |   | 9,100 |   |
|                                                             |   |         |       |   |    |   |   |        |   |   |       |   |   |          |        |   |   |   |   |   |   |   |   |   |
| Net income                                                       |   |         | -          |   |    |   | -      |        |   |   | -          |   |   |          | 2,813,206   |   |   |   | - |   |   |   | 2,813,206 |   |
|                                                             |   |         |       |   |    |   |   |        |   |   |       |   |   |          |        |   |   |   |   |   |   |   |   |   |
| Balances, December 31, 2009                                      |   |         | 21,883,924 |   |    | $      | 21,932 |        |   | $      | 22,900,880 |   |   | $             | (6,344,934  | )      |   | $      | (11,966 | ) |   | $ | 16,565,912 |   |
|                                                             |   |         |       |   |    |   |   |        |   |   |       |   |   |          |        |   |   |   |   |   |   |   |   |   |
| Stock compensation expense                                       |   |         | -          |   |    |   | -      |        |   |   | 215,813    |   |   |          | -           |   |   |   | - |   |   |   | 215,813 |   |
|                                                             |   |         |       |   |    |   |   |        |   |   |       |   |   |          |        |   |   |   |   |   |   |   |   |   |
| Stock warrants exercised, cashless                               |   |         | 128,571    |   |    |   | 129    |        |   |   | 39,871     |   |   |          | -           |   |   |   | (40,000 | ) |   |   | - |   |
|                                                             |   |         |       |   |    |   |   |        |   |   |       |   |   |          |        |   |   |   |   |   |   |   |   |   |
| Stock options exercised, cashless                                |   |         | 60,016     |   |    |   | 60     |        |   |   | 29,940     |   |   |          | -           |   |   |   | (30,000 | ) |   |   | - |   |
|                                                             |   |         |       |   |    |   |   |        |   |   |       |   |   |          |        |   |   |   |   |   |   |   |   |   |
| Exercise of stock options                                        |   |         | 66,933     |   |    |   | 67     |        |   |   | 15,834     |   |   |          | -           |   |   |   | - |   |   |   | 15,901 |   |
|                                                             |   |         |       |   |    |   |   |        |   |   |       |   |   |          |        |   |   |   |   |   |   |   |   |   |
| Net loss                                                         |   |         | -          |   |    |   | -      |        |   |   | -          |   |   |          | (853,568    | )      |   |   | - |   |   |   | (853,568 | ) |
|                                                             |   |         |       |   |    |   |   |        |   |   |       |   |   |          |        |   |   |   |   |   |   |   |   |   |
| Balances, December 31, 2010                                      |   |         | 22,139,444 |   |    | $      | 22,188 |        |   | $      | 23,202,338 |   |   | $             | (7,198,502  | )      |   | $      | (81,966 | ) |   | $ | 15,944,058 |   |

----

|                                                                                                     |   | For the Fiscal Years Ended December 31, |       |
|----------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|------------|
|                                                                                                     |   | 2010                                    |       |   | 2009 |   |   | 2008 |   |
|                                                                                                     |   |                                    |       |   |   |   |   |   |   |
| Cash flows from operating activities:                                                                    |   |                                    |       |   |   |   |   |   |   |
| Income (loss) from operations                                                                            |   | $                                       | (853,568   | ) |   | $ | 2,813,206 |   |   | $ | 1,170,237 |   |
| Adjustments to reconcile net income (loss) from operations to net cash provided by operating activities: |   |                                    |       |   |   |   |   |   |   |   |   |   |
| Stock based compensation                                                                                 |   |                                    | 215,813    |   |   |   | 120,188 |   |   |   | 159,840 |   |
| Stock options issued to consultants in lieu of cash compensation                                         |   |                                    | -          |   |   |   | 23,999 |   |   |   | - |   |
| Loss on early extinguishment of debt                                                                     |   |                                    | 61,508     |   |   |   | 474,960 |   |   |   | - |   |
| Depreciation expense                                                                                     |   |                                    | 1,597,333  |   |   |   | 1,178,927 |   |   |   | 1,411,360 |   |
| Amortization of intangible merchant contracts                                                            |   |                                    | 854,685    |   |   |   | 786,173 |   |   |   | 770,270 |   |
| Amortization of capitalized loan fees                                                                    |   |                                    | 43,930     |   |   |   | 26,756 |   |   |   | 46,431 |   |
| Impairment of long-lived assets                                                                          |   |                                    | 481,993    |   |   |   | - |   |   |   | - |   |
| Allowance for doubtful accounts                                                                          |   |                                    | 9,492      |   |   |   | 2,883 |   |   |   | (14,201 | ) |
| Allowance for inventory obsolescence                                                                     |   |                                    | 88,000     |   |   |   | 40,539 |   |   |   | 54,033 |   |
| Non-cash interest (income) expense on swap agreement with senior lender                             |   |                                    | -          |   |   |   | (7,921 | ) |   |   | 40,985 |   |
| Accretion of discount on notes payable                                                                   |   |                                    | -          |   |   |   | 50,066 |   |   |   | 165,988 |   |
| (Gain) loss on sale or disposal of assets                                                                |   |                                    | -          |   |   |   | - |   |   |   | (23,872 | ) |
| Changes in operating assets and liabilities, net of effects of acquisition of FMiATM:                    |   |                                    |       |   |   |   |   |   |   |   |   |   |
| Change in automated teller machine vault cash                                                            |   |                                    | 250,000    |   |   |   | (250,000 | ) |   |   | - |   |
| Change in accounts receivable                                                                            |   |                                    | 424,552    |   |   |   | 490 |   |   |   | 90,457 |   |
| Change in inventory                                                                                      |   |                                    | (1,406,431 | ) |   |   | (112,270 | ) |   |   | 116 |   |
| Change in prepaid expenses and other current assets                                                      |   |                                    | (7,451     | ) |   |   | 26,468 |   |   |   | (23,620 | ) |
| Change in other assets                                                                                   |   |                                    | (36,500    | ) |   |   | (21,075 | ) |   |   | 5,907 |   |
| Change in intangible assets, net                                                                         |   |                                    | (228,743   | ) |   |   | (80,734 | ) |   |   | 634 |   |
| Change in deferred taxes                                                                                 |   |                                    | (292,745   | ) |   |   | (1,342,666 | ) |   |   | - |   |
| Change in accounts payable and accrued liabilities                                                       |   |                                    | 1,476,254  |   |   |   | 464,108 |   |   |   | (875,224 | ) |
| Change in automated teller machine vault cash payable                                                    |   |                                    | (250,000   | ) |   |   | 250,000 |   |   |   | - |   |
| Net cash provided by operating activities                                                                |   |                                    | 2,428,122  |   |   |   | 4,444,097 |   |   |   | 2,979,341 |   |
|                                                                                                     |   |                                    |       |   |   |   |   |   |   |   |   |   |
| Cash flows from investing activities:                                                                    |   |                                    |       |   |   |   |   |   |   |   |   |   |
| Proceeds from sale of equipment                                                                          |   |                                    | 24,550     |   |   |   | - |   |   |   | - |   |
| Cash paid for FMiATM acquisition                                                                         |   |                                    | (914,571   | ) |   |   | - |   |   |   | - |   |
| Insurance proceeds on disposal of fixed assets                                                           |   |                                    | -          |   |   |   | - |   |   |   | 72,681 |   |
| Costs of acquiring merchant contracts                                                                    |   |                                    | (379,916   | ) |   |   | (120,660 | ) |   |   | (43,758 | ) |
| Purchase of property and equipment                                                                       |   |                                    | (5,342,743 | ) |   |   | (1,051,494 | ) |   |   | (290,304 | ) |
| Net cash used in investing activities                                                                    |   |                                    | (6,612,680 | ) |   |   | (1,172,154 | ) |   |   | (261,381 | ) |
|                                                                                                     |   |                                    |       |   |   |   |   |   |   |   |   |   |
| Cash flows from financing activities:                                                                    |   |                                    |       |   |   |   |   |   |   |   |   |   |
| Proceeds from issuance of common stock                                                                   |   |                                    | 15,901     |   |   |   | 9,100 |   |   |   | - |   |
| Proceeds from senior lenders'  notes payable                                                   |   |                                    | 10,039,655 |   |   |   | 6,200,000 |   |   |   | 39,028 |   |
| Proceeds from notes payable                                                                              |   |                                    | 710,532    |   |   |   | 69,905 |   |   |   | - |   |
| Change in restricted cash                                                                                |   |                                    | 800,000    |   |   |   | (800,000 | ) |   |   | - |   |
| Principal payments on senior lenders'  notes payable                                           |   |                                    | (6,118,773 | ) |   |   | (6,171,429 | ) |   |   | (704,177 | ) |
| Principal payments on notes payable                                                                      |   |                                    | (730,201   | ) |   |   | (11,833 | ) |   |   | (25,000 | ) |
| Principal payments on notes payable - related parties                                                    |   |                                    | (25,978    | ) |   |   | (1,248,186 | ) |   |   | (20,695 | ) |
| Principal payments on capital lease obligations                                                          |   |                                    | (770,876   | ) |   |   | (872,550 | ) |   |   | (986,367 | ) |
| Net cash provided by (used in) financing activities                                                      |   |                                    | 3,920,260  |   |   |   | (2,824,993 | ) |   |   | (1,697,211 | ) |
| Increase (decrease) in cash                                                                              |   |                                    | (264,298   | ) |   |   | 446,950 |   |   |   | 1,020,749 |   |
| Cash, beginning of year                                                                                  |   |                                    | 2,007,860  |   |   |   | 1,560,910 |   |   |   | 540,161 |   |
| Cash, end of the year                                                                                    |   | $                                       | 1,743,562  |   |   | $ | 2,007,860 |   |   | $ | 1,560,910 |   |
|                                                                                                     |   |                                    |       |   |   |   |   |   |   |   |   |   |
| Cash paid for interest                                                                                   |   | $                                       | 486,889    |   |   | $ | 555,969 |   |   | $ | 786,697 |   |

----

|                                                                                        |   | For the Fiscal Years Ended December 31, |      |
|---------------------------------------------------------------------------------------------|--------|-----------------------------------------|-----------|
| SUPPLEMENTAL CASH FLOW INFORMATION                                                          |   | 2010                                    |      |   | 2009 |   |   | 2008 |   |
|                                                                                        |   |                                    |      |   |   |   |   |   |   |
| The significant non-cash investing and financing activities of the Company were as follows: |   |                                    |      |   |   |   |   |   |   |
|                                                                                        |   |                                    |      |   |   |   |   |   |   |
| Operating activities:                                                                       |   |                                    |      |   |   |   |   |   |   |
| Accretion of asset retirement obligation                                                    |   | $                                       | 25,000    |   |   | $ | - |   |   | $ | - |   |
| Net transfer of de-installed net fixed assets to (from) inventory                           |   |                                    | (236,856  | ) |   |   | (40,431 | ) |   |   | 95,283 |   |
| Total non-cash operating activities                                                         |   | $                                       | (211,856  | ) |   | $ | (40,431 | ) |   | $ | 95,283 |   |
|                                                                                        |   |                                    |      |   |   |   |   |   |   |   |   |   |
| Investing activities:                                                                       |   |                                    |      |   |   |   |   |   |   |   |   |   |
| Purchase of assets under capital lease obligations                                          |   | $                                       | 434,792   |   |   | $ | 663,525 |   |   | $ | 407,404 |   |
| Net transfer of de-installed net fixed assets (to) from inventory                           |   |                                    | 236,856   |   |   |   | 40,431 |   |   |   | (95,283 | ) |
| Total non-cash investing activities                                                         |   | $                                       | 671,648   |   |   | $ | 703,956 |   |   | $ | 312,121 |   |
|                                                                                        |   |                                    |      |   |   |   |   |   |   |   |   |   |
| Acquisition of assets of FMiATM:                                                            |   |                                    |      |   |   |   |   |   |   |   |   |   |
| Automated teller machines                                                                   |   | $                                       | 346,386   |   |   | $ | - |   |   | $ | - |   |
| Merchant contracts                                                                          |   |                                    | 688,185   |   |   |   | - |   |   |   | - |   |
| Assets acquired                                                                             |   |                                    | 1,034,571 |   |   |   | - |   |   |   | - |   |
| Accounts payable and accrued liabilities                                                    |   |                                    | (120,000  | ) |   |   | - |   |   |   | - |   |
|                                                                                        |   | $                                       | 914,571   |   |   | $ | - |   |   | $ | - |   |
|                                                                                        |   |                                    |      |   |   |   |   |   |   |   |   |   |
| Financing activities:                                                                       |   |                                    |      |   |   |   |   |   |   |   |   |   |
| Settlement of stock option and warrant exercises through issuance of treasury stock:        |   |                                    |      |   |   |   |   |   |   |   |   |   |
| Repurchase of treasury stock, 105,163 shares of common stock at cost                        |   | $                                       | (70,000   | ) |   | $ | - |   |   | $ | - |   |
| Total non-cash financing activities                                                         |   | $                                       | (70,000   | ) |   | $ | - |   |   | $ | - |   |

----

|   | 1. | DESCRIPTION OF THE COMPANY’S BUSINESS AND BASIS OF PRESENTATION |
|--------|----|-----------------------------------------------------------------------|

|   | 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|--------|----|--------------------------------------------|

----

----

|                                    |   | For the year ended |       |   | For the year ended |   |       | For the year ended |   |
|-----------------------------------------|--------|--------------------|------------|--------|--------------------|--------|------------|--------------------|--------|
|                                    |   | December 31, 2010  |       |   | December 31, 2009  |   |       | December 31, 2008  |   |
|                                    |   |               |       |   |               |   |       |               |   |
| ATM Surcharge / Convenience Fee revenue |   | $                  | 12,617,673 |   |               | $      | 11,975,275 |               |   | $ | 11,782,306 |   |
| ATM Interchange revenue                 |   |               | 6,933,821  |   |               |   | 7,252,177  |               |   |   | 7,806,372 |   |
| ATM Processing revenue                  |   |               | 175,044    |   |               |   | 210,329    |               |   |   | 286,914 |   |
| ATM Sales revenue                       |   |               | 362,563    |   |               |   | 458,759    |               |   |   | 519,861 |   |
| Other ATM revenue                       |   |               | 1,402,005  |   |               |   | 1,560,258  |               |   |   | 1,775,619 |   |
| DVD Rental revenue                      |   |               | 1,252,229  |   |               |   | 38,069     |               |   |   | - |   |
| Total revenue                           |   | $                  | 22,743,335 |   |               | $      | 21,494,867 |               |   | $ | 22,171,072 |   |

|                  |   | For the year ended |       |   | For the year ended |   |       | For the year ended |   |
|-----------------------|--------|--------------------|------------|--------|--------------------|--------|------------|--------------------|--------|
|                  |   | December 31, 2010  |       |   | December 31, 2009  |   |       | December 31, 2008  |   |
|                  |   |               |       |   |               |   |       |               |   |
| ATM Operating revenue |   | $                  | 21,128,543 |   |               | $      | 20,998,039 |               |   | $ | 21,651,211 |   |
| ATM Sales revenue     |   |               | 362,563    |   |               |   | 458,759    |               |   |   | 519,861 |   |
| DVD Operating revenue |   |               | 1,252,229  |   |               |   | 38,069     |               |   |   | - |   |
| Total revenue         |   | $                  | 22,743,335 |   |               | $      | 21,494,867 |               |   | $ | 22,171,072 |   |

|                                     |   | For the year ended |       |   | For the year ended |   |       | For the year ended |   |
|------------------------------------------|--------|--------------------|------------|--------|--------------------|--------|------------|--------------------|--------|
|                                     |   | December 31, 2010  |       |   | December 31, 2009  |   |       | December 31, 2008  |   |
|                                     |   |               |       |   |               |   |       |               |   |
| ATM Merchant residual / commission costs |   | $                  | 6,392,182  |   |               | $      | 6,480,422  |               |   | $ | 7,051,263 |   |
| ATM Cost of cash                         |   |               | 2,201,353  |   |               |   | 1,738,813  |               |   |   | 2,025,680 |   |
| ATM Processing costs                     |   |               | 1,056,710  |   |               |   | 860,910    |               |   |   | 848,428 |   |
| ATM Communication costs                  |   |               | 557,940    |   |               |   | 593,642    |               |   |   | 562,030 |   |
| ATM Sales costs                          |   |               | 360,844    |   |               |   | 434,693    |               |   |   | 486,901 |   |
| Other ATM cost of revenues               |   |               | 1,212,998  |   |               |   | 1,157,529  |               |   |   | 1,373,689 |   |
| DVD operating costs                      |   |               | 1,573,714  |   |               |   | 50,910     |               |   |   | - |   |
| Total cost of revenues                   |   | $                  | 13,355,741 |   |               | $      | 11,316,919 |               |   | $ | 12,347,991 |   |

|                          |   | For the year ended |       |   | For the year ended |   |       | For the year ended |   |
|-------------------------------|--------|--------------------|------------|--------|--------------------|--------|------------|--------------------|--------|
|                          |   | December 31, 2010  |       |   | December 31, 2009  |   |       | December 31, 2008  |   |
|                          |   |               |       |   |               |   |       |               |   |
| Cost of ATM Operating revenue |   | $                  | 11,421,183 |   |               | $      | 10,831,316 |               |   | $ | 11,861,090 |   |
| ATM Sales costs               |   |               | 360,844    |   |               |   | 434,693    |               |   |   | 486,901 |   |
| Cost of DVD Operating revenue |   |               | 1,573,714  |   |               |   | 50,910     |               |   |   | - |   |
| Total cost of revenues        |   | $                  | 13,355,741 |   |               | $      | 11,316,919 |               |   | $ | 12,347,991 |   |

----

|                           | Useful Life                     |
|--------------------------------|---------------------------------|
| ATMs                           | 10 years                        |
| DVD kiosks                     | 5 years                         |
| Computers and software         | 3-5 years                       |
| Office furniture and equipment | 5 years                         |
| Vehicles                       | 5 years                         |
| Leasehold improvements         | shorter of lease term or useful |
|                           | life of improvement             |

----

----

----

----

----

|   | 3. | ACQUISITIONS OF ASSETS |
|--------|----|------------------------|

| Automated teller machines |   | $      | 346,386   |   |
|---------------------------|--------|--------|-----------|--------|
| Merchant contracts        |   |   | 688,185   |   |
| Assets acquired           |   | $      | 1,034,571 |   |

----

|   | 4. | QUARTERLY INFORMATION (IN THOUSANDS EXCEPT PER SHARE DATA): |
|--------|----|-------------------------------------------------------------|

| Fiscal 2010 (unaudited)                     |   |    |       |   |    |   |       |    |   |   |       |   |
|---------------------------------------------|--------|---------|------------|--------|---------|--------|------------|---------|--------|--------|------------|--------|
|                                        |   | First   |       |   | Second  |   |       | Third   |   |   | Fourth     |   |
|                                        |   | Quarter |       |   | Quarter |   |       | Quarter |   |   | Quarter    |   |
|                                        |   |    |       |   |    |   |       |    |   |   |       |   |
| Revenues                                    |   | $       | 5,380      |   |    | $      | 5,507      |    |   | $      | 5,779      |   |   | $ | 6,077 |   |
| Gross profit                                |   |    | 2,522      |   |    |   | 2,511      |    |   |   | 2,305      |   |   |   | 2,049 |   |
| Operating income from operations            |   |    | 440        |   |    |   | 332        |    |   |   | 42         |   |   |   | (1,248 | ) |
| Net income (loss)                           |   | $       | 319        |   |    | $      | 121        |    |   | $      | (96        | )      |   | $ | (1,197 | ) |
|                                        |   |    |       |   |    |   |       |    |   |   |       |   |   |   |   |   |
| Income (loss) per common share - basic:     |   |    |       |   |    |   |       |    |   |   |       |   |   |   |   |   |
| Net income (loss) per common share          |   | $       | 0.02       |   |    | $      | 0.01       |    |   | $      | (0.00      | )      |   | $ | (0.05 | ) |
|                                        |   |    |       |   |    |   |       |    |   |   |       |   |   |   |   |   |
| Income (loss) per common share - diluted:   |   |    |       |   |    |   |       |    |   |   |       |   |   |   |   |   |
| Net income (loss) per common share          |   | $       | 0.01       |   |    | $      | 0.01       |    |   | $      | (0.00      | )      |   | $ | (0.05 | ) |
|                                        |   |    |       |   |    |   |       |    |   |   |       |   |   |   |   |   |
| Weighted average common shares outstanding: |   |    |       |   |    |   |       |    |   |   |       |   |   |   |   |   |
| Basic                                       |   |    | 21,892,152 |   |    |   | 21,943,940 |    |   |   | 21,954,030 |   |   |   | 22,129,040 |   |
| Diluted                                     |   |    | 23,758,755 |   |    |   | 23,751,471 |    |   |   | 21,954,030 |   |   |   | 22,129,040 |   |

| Fiscal 2009 (unaudited)                     |   |    |       |   |    |   |       |    |   |   |       |   |
|---------------------------------------------|--------|---------|------------|--------|---------|--------|------------|---------|--------|--------|------------|--------|
|                                        |   | First   |       |   | Second  |   |       | Third   |   |   | Fourth     |   |
|                                        |   | Quarter |       |   | Quarter |   |       | Quarter |   |   | Quarter    |   |
|                                        |   |    |       |   |    |   |       |    |   |   |       |   |
| Revenues                                    |   | $       | 5,414      |   |    | $      | 5,369      |    |   | $      | 5,315      |   |   | $ | 5,396 |   |
| Gross profit                                |   |    | 2,559      |   |    |   | 2,555      |    |   |   | 2,527      |   |   |   | 2,537 |   |
| Operating income from operations            |   |    | 777        |   |    |   | 707        |    |   |   | 623        |   |   |   | 548 |   |
| Net income                                  |   | $       | 97         |   |    | $      | 557        |    |   | $      | 476        |   |   | $ | 1,683 |   |
|                                        |   |    |       |   |    |   |       |    |   |   |       |   |   |   |   |   |
| Income per common share - basic:            |   |    |       |   |    |   |       |    |   |   |       |   |   |   |   |   |
| Net income per common share                 |   | $       | 0.01       |   |    | $      | 0.03       |    |   | $      | 0.02       |   |   | $ | 0.08 |   |
|                                        |   |    |       |   |    |   |       |    |   |   |       |   |   |   |   |   |
| Income per common share - diluted:          |   |    |       |   |    |   |       |    |   |   |       |   |   |   |   |   |
| Net income per common share                 |   | $       | 0.01       |   |    | $      | 0.03       |    |   | $      | 0.02       |   |   | $ | 0.07 |   |
|                                        |   |    |       |   |    |   |       |    |   |   |       |   |   |   |   |   |
| Weighted average common shares outstanding: |   |    |       |   |    |   |       |    |   |   |       |   |   |   |   |   |
| Basic                                       |   |    | 20,973,924 |   |    |   | 21,873,924 |    |   |   | 21,883,924 |   |   |   | 21,883,924 |   |
| Diluted                                     |   |    | 20,973,924 |   |    |   | 22,321,389 |    |   |   | 23,471,284 |   |   |   | 23,606,552 |   |

----

|   | 5.  | ACCOUNTS RECEIVABLE |
|--------|----------|---------------------|

|                                  |   | December 31, 2010 |    |   | December 31, 2009 |   |
|---------------------------------------|--------|-----------------------------|---------|--------|-----------------------------|--------|
|                                  |   |                        |    |   |                        |   |
| Trade accounts receivable, billed     |   | $                           | 104,111 |   |                        | $      | 183,052 |   |
| Trade accounts receivable, unbilled   |   |                        | 311,199 |   |                        |   | 674,564 |   |
|                                  |   |                        | 415,310 |   |                        |   | 857,616 |   |
| Less: allowance for doubtful accounts |   |                        | 4,354   |   |                        |   | 12,616 |   |
| Accounts receivable, net              |   | $                           | 410,956 |   |                        | $      | 845,000 |   |

|   | 6.  | INVENTORY |
|--------|----------|-----------|

|                                     |   | December 31, 2010 |      |   | December 31, 2009 |   |
|------------------------------------------|--------|-----------------------------|-----------|--------|-----------------------------|--------|
|                                     |   |                        |      |   |                        |   |
| ATM Parts and supplies                   |   | $                           | 127,495   |   |                        | $      | 221,320 |   |
| Automated teller machines                |   |                        | 202,482   |   |                        |   | 120,679 |   |
| DVD rental kiosks                        |   |                        | 222,942   |   |                        |   | 60,604 |   |
| DVD library                              |   |                        | 1,019,259 |   |                        |   | - |   |
|                                     |   |                        | 1,572,178 |   |                        |   | 402,603 |   |
| Less: reserve for inventory obsolescence |   |                        | 182,572   |   |                        |   | 94,572 |   |
| Inventory, net                           |   | $                           | 1,389,606 |   |                        | $      | 308,031 |   |

|   | 7. | FIXED ASSETS |
|--------|----|--------------|

|                                                |   | December 31, 2010 |       |   | December 31, 2009 |   |
|-----------------------------------------------------|--------|-----------------------------|------------|--------|-----------------------------|--------|
|                                                |   |                        |       |   |                        |   |
| Automated teller machines (A)                       |   | $                           | 11,142,698 |   |                        | $      | 10,094,375 |   |
| DVD rental kiosks                                   |   |                        | 4,196,905  |   |                        |   | 311,925 |   |
| Furniture and fixtures                              |   |                        | 450,820    |   |                        |   | 443,922 |   |
| Computers, equipment and software (A)               |   |                        | 3,174,977  |   |                        |   | 2,356,724 |   |
| Automobiles                                         |   |                        | 456,622    |   |                        |   | 412,322 |   |
| Leasehold equipment                                 |   |                        | 72,533     |   |                        |   | 72,533 |   |
|                                                |   |                        | 19,494,555 |   |                        |   | 13,691,801 |   |
| Less: accumulated depreciation and amortization (B) |   |                        | 9,912,994  |   |                        |   | 8,392,140 |   |
| Fixed assets, net                                   |   | $                           | 9,581,561  |   |                        | $      | 5,299,661 |   |

|   | (A) | See Financial Footnote #13 “Capital Lease Obligations” for ATMs and computers held under capital leases. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------|

|   | (B) | Depreciation expense from operations for the years ended December 31, 2010, 2009 and 2008 was $1,597,333, $1,178,927 and $1,411,360, respectively. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 8. | INTANGIBLE ASSETS AND MERCHANT CONTRACTS |
|--------|----|------------------------------------------|

|                                           |   | Gross Carrying Value |       |   | AccumulatedAmortization |   |      | Net    |   |
|------------------------------------------------|--------|--------------------------------|------------|--------|-------------------------|--------|-----------|--------|--------|
|                                           |   |                           |       |   |                    |   |      |   |   |
| Goodwill                                       |   | $                              | 4,189,645  |   |                    | $      | 168,286   |   |   | $ | 4,021,359 |   |
| Other Intangible Assets                        |   |                           | 222,561    |   |                    |   | 24,704    |   |   |   | 197,857 |   |
| Merchant contracts                             |   |                           | 15,853,061 |   |                    |   | 4,974,032 |   |   |   | 10,879,029 |   |
| Total Intangible assets and merchant contracts |   | $                              | 20,265,267 |   |                    | $      | 5,167,022 |   |   | $ | 15,098,245 |   |

|                                           |   | Gross Carrying Value |       |   | AccumulatedAmortization |   |      | Net    |   |
|------------------------------------------------|--------|--------------------------------|------------|--------|-------------------------|--------|-----------|--------|--------|
|                                           |   |                           |       |   |                    |   |      |   |   |
| Goodwill                                       |   | $                              | 4,189,645  |   |                    | $      | 168,286   |   |   | $ | 4,021,359 |   |
| Other Intangible Assets                        |   |                           | 89,701     |   |                    |   | 15,149    |   |   |   | 74,552 |   |
| Merchant contracts                             |   |                           | 14,818,294 |   |                    |   | 4,152,681 |   |   |   | 10,665,613 |   |
| Total Intangible assets and merchant contracts |   | $                              | 19,097,640 |   |                    | $      | 4,336,116 |   |   | $ | 14,761,524 |   |

| 2011 |   | $ | 951,562 |   |
|------|--------|---|---------|--------|
| 2012 |   | $ | 940,346 |   |
| 2013 |   | $ | 859,021 |   |
| 2014 |   | $ | 780,182 |   |
| 2015 |   | $ | 763,642 |   |

----

|   | 9. | ACCOUNTS PAYABLE AND ACCRUED LIABILITIES |
|--------|----|------------------------------------------|

|                                                 |   | December 31, 2010 |      |   | December 31, 2009 |   |
|------------------------------------------------------|--------|-----------------------------|-----------|--------|-----------------------------|--------|
|                                                 |   |                        |      |   |                        |   |
| Accounts payable                                     |   | $                           | 1,688,818 |   |                        | $      | 624,874 |   |
| Accrued commissions/residual payments                |   |                        | 1,216,266 |   |                        |   | 1,223,734 |   |
| Accrued cost of cash and cash replenishment expenses |   |                        | 303,027   |   |                        |   | 440,043 |   |
| Accrued payroll                                      |   |                        | 204,086   |   |                        |   | 332,117 |   |
| Accrued audit fees                                   |   |                        | 84,500    |   |                        |   | 84,000 |   |
| Accrued interest                                     |   |                        | 22,995    |   |                        |   | - |   |
| Accrued legal fees                                   |   |                        | 54,056    |   |                        |   | - |   |
| Asset retirement obligation                          |   |                        | 88,074    |   |                        |   | 63,074 |   |
| Accrued taxes                                        |   |                        | 226,336   |   |                        |   | 64,500 |   |
| Other                                                |   |                        | 716,679   |   |                        |   | 151,241 |   |
| Accounts payable and accrued liabilities             |   | $                           | 4,604,837 |   |                        | $      | 2,983,583 |   |

|   | 10. | NOTES PAYABLE – RELATED PARTIES |
|--------|-----|---------------------------------------|

|                                                                                                                                                                                                        |   | December 31, 2010 |   |   | December 31, 2009 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|--------|--------|-----------------------------|--------|
|                                                                                                                                                                                                        |   |                        |   |   |                        |   |
| Promissory note in the original amount of $243,981 to a stockholder, unsecured, payable in monthly principal and interest installments of $3,000, bearing an annual interest rate of 11%, and due June 2013 |   | $                           | 73,434 |   |                        | $      | 99,412 |   |
|                                                                                                                                                                                                        |   |                        |   |   |                        |   |   |   |
|                                                                                                                                                                                                        |   |                        | 73,434 |   |                        |   | 99,412 |   |
| Less: current portion                                                                                                                                                                                       |   |                        | 29,740 |   |                        |   | 26,722 |   |
| Long-term portion, net of notes payable – related parties                                                                                                                                             |   | $                           | 43,694 |   |                        | $      | 72,690 |   |

| 2011   |   | $      | 29,740 |   |
|--------|--------|--------|--------|--------|
| 2012   |   |   | 33,100 |   |
| 2013   |   |   | 10,594 |   |
|   |   | $      | 73,434 |   |

|   | 11. | NOTES PAYABLE |
|--------|-----|---------------|

|                                          |   | December 31, 2010 |   |   | December 31, 2009 |   |
|-----------------------------------------------|--------|-----------------------------|--------|--------|-----------------------------|--------|
|                                          |   |                        |   |   |                        |   |
|  Various auto loans                      |   | $                           | 73,253 |   |                        | $      | 92,923 |   |
|                                          |   |                        |   |   |                        |   |   |   |
|                                          |   |                        | 73,253 |   |                        |   | 92,923 |   |
|  Less: current portion                   |   |                        | 21,777 |   |                        |   | 19,803 |   |
|  Long-term portion, net of notes payable |   | $                           | 51,476 |   |                        | $      | 73,120 |   |

----

| 2011  |   | $      | 21,777 |   |
|-------|--------|--------|--------|--------|
| 2012  |   |   | 23,575 |   |
| 2013  |   |   | 18,940 |   |
| 2014  |   |   | 8,961  |   |
| Total |   | $      | 73,253 |   |

|   | 12. | SENIOR LENDERS’ NOTES PAYABLE |
|--------|-----|-------------------------------------|

|                                                    |   | December 31, 2010 |      |   | December 31, 2009 |   |
|---------------------------------------------------------|--------|-----------------------------|-----------|--------|-----------------------------|--------|
|                                                    |   |                        |      |   |                        |   |
| Fifth Third Bank, term loan                             |   | $                           | 4,166,668 |   |                        | $      | - |   |
| Fifth Third Bank, equipment lease line                  |   |                        | 3,725,158 |   |                        |   | - |   |
| Fifth Third Bank, draw loan                             |   |                        | 824,567   |   |                        |   | - |   |
| Fifth Third Bank, $1.65 million draw loan               |   |                        | 333,061   |   |                        |   | - |   |
| SunTrust Bank                                           |   |                        | -         |   |                        |   | 5,128,572 |   |
|                                                    |   |                        | 9,049,454 |   |                        |   | 5,128,572 |   |
| Less: current portion                                   |   |                        | 2,426,915 |   |                        |   | 1,828,572 |   |
| Long-term portion, net of senior lenders' notes payable |   | $                           | 6,622,539 |   |                        | $      | 3,300,000 |   |

----

----

| 2011   |   | $      | 2,426,915 |   |
|--------|--------|--------|-----------|--------|
| 2012   |   |   | 3,122,109 |   |
| 2013   |   |   | 2,189,983 |   |
| 2014   |   |   | 1,310,447 |   |
|   |   | $      | 9,049,454 |   |

|   | 13. | CAPITAL LEASE OBLIGATIONS |
|--------|-----|---------------------------|

| 2011                                               |   | $      | 490,348 |   |
|----------------------------------------------------|--------|--------|---------|--------|
| 2012                                               |   |   | 179,477 |   |
| 2013                                               |   |   | 29,743  |   |
|                                               |   |   | 699,568 |   |
| Less: amount representing interest                 |   |   | 39,105  |   |
| Present value of minimum lease payments            |   |   | 660,463 |   |
| Less: current portion of capital lease obligations |   |   | 455,188 |   |
|                                               |   | $      | 205,275 |   |

|   | 14. | COMMITMENTS AND CONTINGENCIES |
|--------|-----|-------------------------------|

----

| 2011  |   | $      | 135,314 |   |
|-------|--------|--------|---------|--------|
| 2012  |   |   | 87,105  |   |
| 2013  |   |   | 17,743  |   |
| 2014  |   |   | 6,132   |   |
| Total |   | $      | 246,294 |   |

|   | 15. | LEGAL PROCEEDINGS |
|--------|-----|-------------------|

|   | 16. | EMPLOYMENT AGREEMENTS |
|--------|-----|-----------------------|

----

|   | 17. | INCOME TAXES |
|--------|-----|--------------|

----

| The components of the provision for income taxes are as follows:                                                                  |   |
|-----------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                              |   |   |   |   |   |   |   |   |   |
|                                                                                                                              |   | 2010 |   |   | 2009 |   |   | 2008 |   |
| Current:                                                                                                                          |   |   |   |   |   |   |   |   |   |
|    Federal                                                                                                         |   | $ | - |   |   | $ | - |   |   | $ | - |   |
|    State                                                                                                           |   |   | 88,411 |   |   |   | 64,500 |   |   |   | - |   |
| Federal and state deferred tax assets                                                                                             |   |   | (292,745 | ) |   |   | (253,516 | ) |   |   | 1,614,873 |   |
| Valuation allowance                                                                                                               |   |   | - |   |   |   | (1,089,150 | ) |   |   | (1,614,873 | ) |
| Provision for income taxes                                                                                                        |   | $ | (204,334 | ) |   | $ | (1,278,166 | ) |   | $ | - |   |
|                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| The provision (benefit) for income taxes shown above varies from statutory federal income tax rates for those periods as follows: |   |
|                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal Income Tax Rate                                                                                                           |   |   | -34.00 | % |   |   | -34.00 | % |   |   | -34.00 | % |
| State Income Tax Rate, net of                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| federal tax effect                                                                                                                |   |   | 4.67 | % |   |   | 3.47 | % |   |   | -3.96 | % |
| Deferred tax asset revaluation                                                                                                    |   |   | 10.72 | % |   |   |   |   |   |   |   |   |
| Permanent items                                                                                                                   |   |   | 0.51 | % |   |   | 0.24 | % |   |   | -0.69 | % |
| Change in valuation allowance                                                                                                     |   |   | 0.00 | % |   |   | -26.95 | % |   |   |   |   |
| Other, net                                                                                                                        |   |   | -1.22 | % |   |   | -25.76 | % |   |   | 38.65 | % |
|                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Effective tax rate                                                                                                                |   |   | -19.32 | % |   |   | -83.00 | % |   |   | 0.00 | % |
|                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| The components of the net deferred tax assets and the deferred tax liabilities are shown below.                                   |   |
|                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                              |   |   | 2010 |   |   |   | 2009 |   |   |   | 2008 |   |
| Deferred tax assets (liabilities)                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
|    Current portion                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
|       Arising from operating loss and credit carryforwards                                          |   | $ | 363,926 |   |   | $ | 868,848 |   |   | $ | 615,332 |   |
|          Total                                                                       |   | $ | 363,926 |   |   | $ | 868,848 |   |   | $ | 615,332 |   |
|                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
|    Long term portion                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|       Arising from operating loss and credit carryforwards                                          |   |   | 7,464,411 |   |   |   | 6,591,736 |   |   | $ | 8,298,145 |   |
|       Arising from temporary differences in fixed and intangible assets                             |   |   | (3,143,446 | ) |   |   | (3,068,438 | ) |   |   | (4,774,847 | ) |
|          Total                                                                       |   |   | 4,320,965 |   |   |   | 3,523,298 |   |   |   | 3,523,298 |   |
|             Valuation allowance                                       |   |   | (2,709,680 | ) |   |   | (2,709,680 | ) |   |   | (3,798,830 | ) |
|          Total                                                                       |   | $ | 1,611,285 |   |   | $ | 813,618 |   |   | $ | (275,532 | ) |

----

| Balance at January 1, 2008                                   |   | $      | -         |   |
|--------------------------------------------------------------|--------|--------|-----------|--------|
| Additions based on tax positions related to the current year |   |   | 1,147,200 |   |
| Additions for tax positions of prior years                   |   |   | -         |   |
| Reductions for tax positions of prior years                  |   |   | -         |   |
| Settlements                                                  |   |   | -         |   |
| Total adjustments at December 31, 2008                       |   | $      | 1,147,200 |   |
|                                                         |   |   |      |   |
| Balance at January 1, 2009                                   |   | $      | 1,147,200 |   |
| Additions based on tax positions related to the current year |   |   | -         |   |
| Additions for tax positions of prior years                   |   |   | -         |   |
| Reductions for tax positions of prior years                  |   |   | -         |   |
| Settlements                                                  |   |   | -         |   |
| Total adjustments at December 31, 2009                       |   | $      | 1,147,200 |   |
|                                                         |   |   |      |   |
| Balance at January 1, 2010                                   |   | $      | 1,147,200 |   |
| Additions based on tax positions related to the current year |   |   | -         |   |
| Additions for tax positions of prior years                   |   |   | -         |   |
| Reductions for tax positions of prior years                  |   |   | -         |   |
| Settlements                                                  |   |   | -         |   |
| Total adjustments at December 31, 2010                       |   | $      | 1,147,200 |   |

|   | 18. | NET INCOME PER COMMON SHARE |
|--------|-----|-----------------------------|

----

|                                                        |   | Fiscal Year EndedDecember 31, 2010 |       |   | Fiscal Year EndedDecember 31, 2009 |   |       | Fiscal Year EndedDecember 31, 2008 |   |
|------------------------------------------------------------------|--------|--------------------------------------------------------|------------|--------|--------------------------------------------------------|--------|------------|--------------------------------------------------------|--------|
| Numerator                                                        |   |                                                   |       |   |                                                   |   |       |                                                   |   |
| Income (loss) from operations                                    |   | $                                                      | (853,568   | )      |                                                   | $      | 2,813,206  |                                                   |   | $ | 1,170,237 |   |
|                                                             |   |                                                   |       |   |                                                   |   |       |                                                   |   |   |   |   |
| Numerator for diluted income (loss) per share                    |   |                                                   |       |   |                                                   |   |       |                                                   |   |   |   |   |
| available to common stockholders                                 |   | $                                                      | (853,568   | )      |                                                   | $      | 2,813,206  |                                                   |   | $ | 1,170,237 |   |
|                                                             |   |                                                   |       |   |                                                   |   |       |                                                   |   |   |   |   |
| Denominator                                                      |   |                                                   |       |   |                                                   |   |       |                                                   |   |   |   |   |
| Weighted average shares                                          |   |                                                   | 21,980,369 |   |                                                   |   | 21,654,554 |                                                   |   |   | 20,973,924 |   |
| Effect of dilutive securities:                                   |   |                                                   |       |   |                                                   |   |       |                                                   |   |   |   |   |
| Treasury method, effect of employee stock options & warrants |   |                                                   | -          |   |                                                   |   | 1,190,687  |                                                   |   |   | - |   |
|                                                             |   |                                                   |       |   |                                                   |   |       |                                                   |   |   |   |   |
| Denominator for diluted income (loss) per share adjusted         |   |                                                   |       |   |                                                   |   |       |                                                   |   |   |   |   |
| weighted shares after assumed exercises                          |   |                                                   | 21,980,369 |   |                                                   |   | 22,845,241 |                                                   |   |   | 20,973,924 |   |
|                                                             |   |                                                   |       |   |                                                   |   |       |                                                   |   |   |   |   |
| Income (loss) per common share - basic:                          |   |                                                   |       |   |                                                   |   |       |                                                   |   |   |   |   |
| Net Income (loss) per common share                               |   | $                                                      | (0.04      | )      |                                                   | $      | 0.13       |                                                   |   | $ | 0.06 |   |
|                                                             |   |                                                   |       |   |                                                   |   |       |                                                   |   |   |   |   |
| Income (loss) per common share - diluted:                        |   |                                                   |       |   |                                                   |   |       |                                                   |   |   |   |   |
| Net Income (loss) per common share                               |   | $                                                      | (0.04      | )      |                                                   | $      | 0.12       |                                                   |   | $ | 0.06 |   |

|   | 19. | BUSINESS SEGMENT INFORMATION |
|--------|-----|------------------------------|

----

|                                         |   | For the Twelve Months Ended |       |
|----------------------------------------------|--------|-------------------------------------------------|------------|
|                                         |   | December 31, 2010                     |       |   | December 31, 2009 |   |
|                                         |   |                                            |       |   |   |   |
| Revenue:                                     |   |                                            |       |   |   |   |
| ATM Services                                 |   | $                                               | 21,491,106 |   |   | $ | 21,456,798 |   |
| DVD Services                                 |   |                                            | 1,252,229  |   |   |   | 38,069 |   |
| Consolidated revenue                         |   | $                                               | 22,743,335 |   |   | $ | 21,494,867 |   |
|                                         |   |                                            |       |   |   |   |   |   |
| Gross profit:                                |   |                                            |       |   |   |   |   |   |
| ATM Services                                 |   | $                                               | 9,709,079  |   |   | $ | 10,190,789 |   |
| DVD Services                                 |   |                                            | (321,485   | ) |   |   | (12,841 | ) |
| Consolidated gross profit                    |   | $                                               | 9,387,594  |   |   | $ | 10,177,948 |   |
|                                         |   |                                            |       |   |   |   |   |   |
| SG&A:                                    |   |                                            |       |   |   |   |   |   |
| ATM Services                                 |   | $                                               | 5,754,183  |   |   | $ | 5,304,616 |   |
| DVD Services                                 |   |                                            | 917,260    |   |   |   | 133,008 |   |
| Consolidated SG&A                        |   | $                                               | 6,671,443  |   |   | $ | 5,437,624 |   |
|                                         |   |                                            |       |   |   |   |   |   |
| Depreciation & Amortization:             |   |                                            |       |   |   |   |   |   |
| ATM Services                                 |   | $                                               | 2,033,989  |   |   | $ | 1,944,646 |   |
| DVD Services                                 |   |                                            | 418,029    |   |   |   | 20,454 |   |
| Consolidated depreciation & amortization |   | $                                               | 2,452,018  |   |   | $ | 1,965,100 |   |
|                                         |   |                                            |       |   |   |   |   |   |
| Impairment of long-lived assets              |   |                                            |       |   |   |   |   |   |
| ATM Services                                 |   | $                                               | -          |   |   | $ | - |   |
| DVD Services                                 |   |                                            | 481,993    |   |   |   | - |   |
| Consolidated impairment of long-lived assets |   | $                                               | 481,993    |   |   | $ | - |   |
|                                         |   |                                            |       |   |   |   |   |   |
| Operating income (loss):                     |   |                                            |       |   |   |   |   |   |
| ATM Services                                 |   | $                                               | 1,705,094  |   |   | $ | 2,821,339 |   |
| DVD Services                                 |   |                                            | (2,138,767 | ) |   |   | (166,303 | ) |
| Consolidated operating income (loss)         |   | $                                               | (433,673   | ) |   | $ | 2,655,036 |   |
|                                         |   |                                            |       |   |   |   |   |   |
| Net income (loss):                           |   |                                            |       |   |   |   |   |   |
| ATM Services                                 |   | $                                               | 1,285,199  |   |   | $ | 2,979,509 |   |
| DVD Services                                 |   |                                            | (2,138,767 | ) |   |   | (166,303 | ) |
| Consolidated net income (loss)               |   | $                                               | (853,568   | ) |   | $ | 2,813,206 |   |
|                                         |   |                                            |       |   |   |   |   |   |
| EBITDA:                                      |   |                                            |       |   |   |   |   |   |
| ATM Services                                 |   | $                                               | 3,636,937  |   |   | $ | 4,291,025 |   |
| DVD Services                                 |   |                                            | (1,720,738 | ) |   |   | (145,849 | ) |
| Consolidated EBITDA                          |   | $                                               | 1,916,199  |   |   | $ | 4,145,176 |   |

----

|                |   | December 31 |       |   | December 31 |   |
|---------------------|--------|------------------|------------|--------|------------------|--------|
|                |   | 2010             |       |   | 2009             |   |
| Assets:             |   |             |       |   |             |   |
| ATM Services        |   | $                | 24,944,071 |   |             | $      | 25,627,067 |   |
| DVD Services        |   |             | 5,461,428  |   |             |   | 489,882 |   |
| Consolidated assets |   | $                | 30,405,499 |   |             | $      | 26,116,949 |   |

|   | 20. | STOCK-BASED COMPENSATION |
|--------|-----|--------------------------|

----

|                           |   | Number of |      |   | Weighted Average |   |   | Weighted Average              |   |   | Aggregate            |   |
|--------------------------------|--------|----------------|-----------|--------|-----------------------|--------|--------|------------------------------------|--------|--------|----------------------|--------|
|                           |   | Options        |      |   | Exercise Price   |   |   | Contractual Term (years) |   |   | Intrinsic Value |   |
| Balance, December 31, 2008     |   |           | 2,197,700 |   |                  | $      | 0.50   |                               |   |   |                 |   |   |   |
| Options granted                |   |           | 979,000   |   |                  |   | 0.39   |                               |   |   |                 |   |   |   |
| Options cancelled              |   |           | -         |   |                  |   | -      |                               |   |   |                 |   |   |   |
| Options expired                |   |           | (287,000  | )      |                  |   | 1.18   |                               |   |   |                 |   |   |   |
| Options exercised              |   |           | -         |   |                  |   | -      |                               |   |   |                 |   |   |   |
| Balance, December 31, 2009     |   |           | 2,889,700 |   |                  | $      | 0.40   |                               |   |   |                 |   |   |   |
| Options granted                |   |           | 422,855   |   |                  |   | 0.79   |                               |   |   |                 |   |   |   |
| Options cancelled              |   |           | -         |   |                  |   | -      |                               |   |   |                 |   |   |   |
| Options expired                |   |           | (258,359  | )      |                  |   | 1.12   |                               |   |   |                 |   |   |   |
| Options exercised*             |   |           | (160,683  | )      |                  |   | 0.29   |                               |   |   |                 |   |   |   |
| Balance, December 31, 2010     |   |           | 2,893,513 |   |                  | $      | 0.40   |                               |   |   | 2.67                 |   |   | $ | 169,895 |   |
|                           |   |           |      |   |                  |   |   |                               |   |   |                 |   |   |   |   |   |
| Options vested and exercisable |   |           |      |   |                  |   |   |                               |   |   |                 |   |   |   |   |   |
| as of December 31, 2010        |   |           | 1,429,716 |   |                  | $      | 0.32   |                               |   |   | 2.07                 |   |   | $ | 26,831 |   |

|                |   |   |                     |      |   | Weighted Average            |   |   |                  |   |   |                      |   |   |                  |      |
|---------------------|--------|--------|--------------------------|-----------|--------|----------------------------------|--------|--------|-----------------------|--------|--------|---------------------------|--------|--------|-----------------------|-----------|
|                |   |   | Shares Underlying   |      |   | Remaining                        |   |   | Weighted Average |   |   | Shares Underlying    |   |   | Weighted Average |      |
| Exercise Price |   |   | Options Outstanding |      |   | Contractual Life Years |   |   | Exercise Price   |   |   | Options Excercisible |   |   | Exercise Price   |      |
|                |   |   |                     |      |   |                             |   |   |                  |   |   |                      |   |   |                  |      |
| <$ 0.56          |   |   |                     | 2,241,750 |   |                             |   | 2.16   |                  |   | $      | 0.28                      |   |   |                  | 1,316,794 |   |   | $ | 0.28 |   |
| $0.56               |   |   |                     | -         |   |                             |   | -      |                  |   |   | -                         |   |   |                  | -         |   |   |   | - |   |
| .>$0.56-$0.92    |   |   |                     | 651,763   |   |                             |   | 4.07   |                  |   | $      | 0.82                      |   |   |                  | 112,922   |   |   | $ | 0.80 |   |
|                |   |   |                     |      |   |                             |   |   |                  |   |   |                      |   |   |                  |      |   |   |   |   |   |
| Totals              |   |   |                     | 2,893,513 |   |                             |   |   |                  |   | $      | 0.40                      |   |   |                  | 1,429,716 |   |   | $ | 0.32 |   |

|                          |      | Exercise Price Equals,                |      |                  |   |   |                |   |             |                  |   |
|-------------------------------|-----------|-------------------------------------------------|-----------|-----------------------|--------|--------|---------------------|--------|------------------|-----------------------|--------|
| Number of Remaining |      | Exceeds or is Less than     |      | Weighted Average |   |   | Range of       |   |             | Weighted Average |   |
| Options Granted          |      | Market Value as of 12/31/10 |      | Exercise Price   |   |   | Exercise Price |   |             | Fair Value       |   |
|                          |      |                                            |      |                  |   |   |                |   |             |                  |   |
|                          | 2,241,750 |                                            | Less than |                  | $      | 0.28   |                |   | <$0.56        |                  |   | $ | 0.23 |   |
|                          | -         |                                            | Equals    |                  | $      | -      |                |   | $0.56            |                  |   | $ | - |   |
|                          | 651,763   |                                            | Exceeds   |                  | $      | 0.82   |                |   | .>$0.56-$0.92 |                  |   | $ | 0.69 |   |
|                          |      |                                            |      |                  |   |   |                |   |             |                  |   |   |   |   |
|                          | 2,893,513 |                                            |      |                  |   |   |                |   |             |                  |   |   |   |   |

----

|                                                  |   |        |      |   | Weighted Average |   |
|-------------------------------------------------------|--------|-------------|-----------|--------|-----------------------|--------|
|                                                  |   | Options     |      |   | Grant-Date            |   |
|                                                  |   | Outstanding |      |   | Fair Value       |   |
|                                                  |   |        |      |   |                  |   |
| Nonvested options outstanding as of December 31, 2009 |   |        | 1,828,688 |   |                  | $      | 0.30 |   |
| Granted                                               |   |        | 422,855   |   |                  | $      | 0.66 |   |
| Vested                                                |   |        | (787,746  | )      |                  | $      | 0.27 |   |
| Forfeited                                             |   |        | -         |   |                  | $      | - |   |
| Nonvested options outstanding as of December 31, 2010 |   |        | 1,463,797 |   |                  | $      | 0.42 |   |

|                       |   | Number of |       |   | Weighted Average |   |
|----------------------------|--------|----------------|------------|--------|-----------------------|--------|
|                       |   | Warrants       |       |   | Exercise Price   |   |
| Balance, December 31, 2008 |   |           | 6,645,004  |   |                  | $      | 2.58 |   |
| Warrants granted           |   |           | 230,000    |   |                  |   | 0.20 |   |
| Warrants cancelled         |   |           | -          |   |                  |   | - |   |
| Warrants expired           |   |           | (5,600,004 | )      |                  |   | 2.87 |   |
| Warrants exercised         |   |           | (910,000   | )      |                  |   | 0.01 |   |
| Balance, December 31, 2009 |   |           | 365,000    |   |                  | $      | 0.59 |   |
| Warrants granted           |   |           | -          |   |                  |   | - |   |
| Warrants cancelled         |   |           | -          |   |                  |   | - |   |
| Warrants expired           |   |           | (135,000   | )      |                  |   | 1.25 |   |
| Warrants exercised*        |   |           | (200,000   | )      |                  |   | 0.20 |   |
| Balance, December 31, 2010 |   |           | 30,000     |   |                  | $      | 0.20 |   |

|                |   |   |                      |   |   | Weighted Average            |   |   |                  |   |   |                       |   |   |                  |   |
|---------------------|--------|--------|---------------------------|--------|--------|----------------------------------|--------|--------|-----------------------|--------|--------|----------------------------|--------|--------|-----------------------|--------|
|                |   |   | Shares Underlying    |   |   | Remaining                        |   |   | Weighted Average |   |   | Shares Underlying     |   |   | Weighted Average |   |
| Exercise Price |   |   | Warrants Outstanding |   |   | Contractual Life Years |   |   | Exercise Price   |   |   | Warrants Excercisible |   |   | Exercise Price   |   |
|                |   |   |                      |   |   |                             |   |   |                  |   |   |                       |   |   |                  |   |
| $                   | 0.20   |   |                      |   | 30,000 |                             |   |   | 3.3                   |   |   | $                          | 0.20   |   |                  |   | 30,000 |   |   | $ | 0.20 |   |
|                |   |   |                      |   | 30,000 |                             |   |   |                  |   |   | $                          | 0.20   |   |                  |   | 30,000 |   |   | $ | 0.20 |   |

|   | 21. | RELATED PARTY TRANSACTIONS |
|--------|-----|----------------------------|

----

|   | 22. | FAIR VALUE MEASUREMENT |
|--------|-----|------------------------|

|                             |   |   |   |   | Fair Value Measurements Using |   |
|----------------------------------|--------|--------|--------|--------|----------------------------------------------|--------|
|                             |   | Total  |   |   | Level 1                                      |   |   | Level 2 |   |   | Level 3 |   |
|                             |   |   |   |   |                                         |   |   |   |   |   |   |   |
| Assets                           |   | $      | -      |   |                                         | $      | - |   |   | $ | - |   |   | $ | - |   |
|                             |   |   |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities:                     |   |   |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
|                             |   |   |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Derivative financial instruments |   | $      | -      |   |                                         | $      | - |   |   | $ | - |   |   | $ | - |   |

|   | 23. | LOSS ON EARLY EXTINGUISHMENT OF DEBT |
|--------|-----|--------------------------------------|

----

|                                                                   |   | For the Twelve Months Ended |    |
|------------------------------------------------------------------------|--------|-------------------------------------------------|---------|
| Item description                                                  |   | December 31, 2010                     |    |   | December 31, 2009 |   |
|                                                                   |   |                                            |    |   |   |   |
| Accelerated accretion of discount on senior lenders' notes payable     |   | $                                               | -       |   |   | $ | 256,988 |   |
|                                                                   |   |                                            |    |   |   |   |   |   |
| Accelerated amortization of capitalized loan fees                      |   | $                                               | 61,508  |   |   | $ | 76,493 |   |
|                                                                   |   |                                            |    |   |   |   |   |   |
| Accelerated expense of prepaid loan fees                               |   | $                                               | -       |   |   | $ | 6,400 |   |
|                                                                   |   |                                            |    |   |   |   |   |   |
| Stock expense relating to repriced warrants on debt settlement         |   | $                                               | -       |   |   | $ | 107,025 |   |
|                                                                   |   |                                            |    |   |   |   |   |   |
| Stock expense relating to warrants issued to subordinated note holders |   | $                                               | -       |   |   | $ | 28,054 |   |
|                                                                   |   |                                            |    |   |   |   |   |   |
| Prepayment fees on debt settlement                                     |   | $                                               | 40,638  |   |   | $ | - |   |
|                                                                   |   |                                            |    |   |   |   |   |   |
| Total loss on early extinguishment of debt                             |   | $                                               | 102,146 |   |   | $ | 474,960 |   |

|   | 24. | IMPAIRMENT OF LONG-LIVED ASSETS |
|--------|-----|---------------------------------|

----

|                                   |   | Net Book |    |   | Estimated proceeds |   |    | Impairment |   |
|----------------------------------------|--------|---------------|---------|--------|-------------------------|--------|---------|------------|--------|
| Long-lived asset description |   | Value         |    |   | from disposition   |   |    | Charge     |   |
|                                   |   |          |    |   |                    |   |    |       |   |
| DVD rental kiosks and related software |   | $             | 604,493 |   |                    | $      | 122,500 |       |   | $ | 481,993 |   |
|                                   |   |          |    |   |                    |   |    |       |   |   |   |   |
|                                   |   |          |    |   |                    |   |    |       |   | $ | 481,993 |   |

|   | 25. | SUBSEQUENT EVENTS |
|--------|-----|-------------------|

----