SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

(Mark One)

|X|   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934

      For the fiscal year ended May 31, 2005

                                       OR

|_|   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934

      For the transition period from _______________ to _______________

                        Commission File Number 001-15783


                             CASH TECHNOLOGIES, INC.
                 (Name of small business issuer in its charter)


                 Delaware                                   95-4558331
       (State or other jurisdiction                      (I.R.S. Employer
     of incorporation or organization)                  Identification No.)


                    1434 W. 11th Street Los Angeles, CA 90015
               (Address of principal executive offices) (Zip code)


                                 (213) 745-2000
                (Issuer's telephone number, including area code)


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

                                                      Name of Each Exchange
      Title of Each Class                             on Which Registered
      -------------------                             -------------------

           None                                              None


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

                                                      Name of Each Exchange
      Title of Each Class                             on Which Registered
      -------------------                             -------------------

 Common Stock, $ .01 Par Value                       American Stock Exchange


|X|   Check  whether  the issuer (1) filed all  reports  required to be filed by
      Section 13 or 15(d) of the  Exchange Act during the past 12 months (or for
      such  shorter  period  that  the  registrant  was  required  to file  such
      reports),  and (2) has been  subject to such filing  requirements  for the
      past 90 days. Yes |X| No |_|


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<PAGE>

|_|   Check if there is no disclosure  of delinquent  filers in response to Item
      405 of  Regulation  S-B is not  contained in this form,  and no disclosure
      will be contained,  to the best of registrant's  knowledge,  in definitive
      proxy or information  statements  incorporated by reference in Part III of
      this Form 10-K or any amendment to this Form 10-K.

      Indicate  by check mark  whether  the  registrant  is a shell  company (as
defined in Rule 12b-2 of the Exchange Act). Yes |_| No |_|

      Our revenues, for our fiscal year ended May 31, 2005, were $5,718,886.

      On May 31, 2005,  there were 18,321,490  shares of common stock, $ .01 par
value per share,  issued and  outstanding.  The  aggregate  market  value of the
Common Stock of Registrant  held by  non-affiliates  of  Registrant  computed by
reference  to the  closing  bid price  $0.95 at which the stock was sold on such
date was, approximately $13,369,469.

                    APPLICABLE ONLY TO CORPORATE REGISTRANTS

      On September 10, 2005, there were 18,321,490 shares of Common Stock, $ .01
par value, issued and outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

None


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<PAGE>

                                     PART I

Item 1. Description of Business

Introduction

      Cash Technologies, Inc., is a Delaware corporation, incorporated in August
1995. Unless the context otherwise requires, references herein to "we," "our" or
"Cash  Tech"  refers  to  Cash  Technologies,  Inc.,  and its  wholly-owned  and
majority-owned   subsidiaries   National  Cash  Processors,   Inc.,  a  Delaware
corporation;  CoinBank Automated Systems, Inc., a Delaware corporation; CoinBank
Automation  Handels GmbH,  organized  operating in Salzburg,  Austria,  Cintelia
Systems Inc., a Delaware corporation,CT  Holdings,  LLC., a Delaware corporation
of which we own 86.65%, Heuristic Technologies, Inc., a Delaware company, formed
in May,  2004, to engage in healthcare  data  processing and debit card issuance
and TAP Holdings, LLC (dba Tomco Auto Products),  of which we own 89%, formed in
November, 2004 to acquire certain assets and assume certain liabilities of Tomco
Auto  Products,  Inc.  Our  address  is 1434  West  11th  Street,  Los  Angeles,
California 90015. Our telephone number is (213) 745-2000.

Business Highlights

      Following are certain  financial  and  operational  accomplishments  of FY
2005, explained in further detail throughout this document:

      o     Moved from  negative $7 million in  stockholders  equity to positive
            $4.1million
      o     Achieved profitability for the first time in the Company's history
      o     Met the AMEX listing requirements for the first time since listing*
      o     Acquired  Tomco line of  business,  resulting in  profitability  and
            significant equity improvement
      o     Created the Heuristic  Technologies  line of business,  establishing
            two recurring  revenue  sources in the massive  healthcare and debit
            card industries
      o     Invested  in  a  startup  company  creating  a  national  discounted
            healthcare network
      o     Created a strategic marketing  relationship with Fortune 500 medical
            data processor Affiliated Computer Services (NYSE:ACS)
      o     Launched two debit card  programs - one for the check  cashers,  one
            for general use
      o     Raised approx.  $3M in equity for operations,  the Tomco acquisition
            and other uses
      o     Settled outstanding legal matters

(*continuous  compliance  to the AMEX  listing  standards is required - see Risk
Factors)

      We are currently  engaged in three  principal  lines of business,  namely,
data  processing  (including  healthcare  data  processing  and  financial  data
processing),  the  sale  of  CoinBank  machines  and the  manufacturing  of auto
products.  In 1995,  we began our  development  of  CoinBank  self-service  coin
counting machines,  distributed  through our CoinBank  Automated  Systems,  Inc.
subsidiary.  An  outgrowth  of our CoinBank  counting  machine  business was our
development,  commenced in 1996, of an enhanced  version of an automated  teller
machine that was designated  the ATM-X(TM).  The ATM-X was designed to provide a
range of  services  not  typically  offered  by ATMs,  such as  electronic  bill
payment,   instant  activated  phone  cards,  event  ticketing  and  others.  As
development  efforts  proceeded  with  the  ATM-X  machines,   we  discovered  a
significant  market  demand  for such a product  and the need to create a robust
transaction  processing  system that could link the new ATMs with the  worldwide
financial  networks in order to provide  these new services to ATMs,  kiosks and
PCs.


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<PAGE>

      As a result of our view of the need for a transaction  processing  system,
in December of 1997, we filed a patent  application  describing its  transaction
processing  and  networking  technologies,  which  resulted  in the  issuance of
patent; number 6,308,887, by the U.S. Patent and Trademark Office on October 30,
2001. The technology,  which was later named EMMA (E-commerce Message Management
Architecture),  allows for the  seamless  integration  of  conventional  ATM and
credit card networks with non-bank  networks and the Internet.  The explosion of
Internet   e-commerce  and  the  need  to  automate  manual  financial  services
transactions has created,  in management's  opinion,  a demand for EMMA's unique
capabilities to provide advanced financial services on ATMs,  point-of-sale,  or
POS, terminals and wireless devices.

      EMMA is our proprietary financial transaction software and technology. The
EMMA  platform  implements  a flexible  message  class  format  that  allows for
constructing   multiple  transactions  and  transaction  types  at  a  financial
terminal,  such as an ATM or Point-Of-Sale (POS) terminal or other client device
such as  wireless  devices,  including  cellular  phones  and  personal  digital
assistants  ("PDAs"),  and transmitting those as a single message or transaction
request to the EMMA  Host.  These  messages  can then be easily  converted  into
message structures that are widely used in the financial services industry.

      A  unique,  patented  capability  of EMMA is its  ability  to  manage  and
communicate the various  transaction  messages in parallel,  or  asynchronously,
expediting transaction processing and permitting the aggregation of transactions
for payment purposes. For example, a customer may select four different services
at an ATM,  such as the payment of a bill,  the purchase of a money  order,  the
transfer of funds and getting cash, and, once selected,  these  transactions can
be completed simultaneously and with a single payment.

      Designed  from  the  ground  up to work in the  institutional  transaction
processing environment,  EMMA is robust,  scaleable and reliable,  expandable as
needed to meet  larger  transaction  flows as market  demand  for such  advanced
financial services" increases.

      In June 2002 we formed a  subsidiary  named CT  Holdings,  LLC to develop,
market and  implement  EMMA-based  banking  applications.  CT  Holdings,  LLC is
presently  marketing  BONUS(TM),  a suite  of  self-service  electronic  banking
services,  including  automated  check cashing,  to the  marketplace.  The BONUS
software  allows  automated  check  cashing  at bank or retail  locations  using
advanced  ATMs.  Powered by our EMMA  software,  BONUS uses  third  party  owned
proprietary optical character recognition (OCR), biometric  identification and a
sophisticated  risk analysis engine to establish a user's identity and authorize
checks. CT Holdings has been  independently  financed,  receiving  $445,000 from
investors  for  13.35% of the  company.  Cash  Technologies  owns the  remaining
86.65%.

HEURISTIC TECHNOLOGIES, INC.

      In August 2004, we expanded our data processing  initiatives by hiring two
senior  executives  with extensive  experience in healthcare data processing and
debit/credit  cards to operate  our  Heuristic  Technologies,  Inc.  subsidiary.
Heuristic has recently  launched a line of products to improve the processing of
healthcare insurance claims and it has begun marketing a debit card product that
targets  the  employee  benefits,   payroll  and  underserved  market  segments.
Heuristic's products include more specifically:

      o     A  stored-value  MasterCard  debit  card  suited  for the  unbanked,
            sub-prime  or underage  markets as well as for  corporate  payments,
            loyalty  programs,  membership  clubs  and  other  applications.  In
            addition to allowing  typical  credit-card  type  purchases  and ATM
            withdrawals,  the Card acts as a virtual  bank  account,  permitting
            direct deposits and electronic  bill payments.  Unlike credit cards,
            stored-value  cards  are  prepaid;  i.e.  they can be used  only for
            purchases or withdrawals up to the amount previously loaded onto the
            card.  Since no credit  underwriting is required;  persons without a
            bank account or with poor credit can obtain one.  Companies  can use
            the Card as a way to  distribute  payroll to  temporary  or unbanked
            workers  or to  distribute  tax-exempt  medical  and  transportation
            benefits  without issuing  checks,  parents can provide the Cards to
            teenagers to  efficiently  and safely  manage a spending  allowance,
            check cashers can distribute the Card to customers and load the Card
            with check  cashing  proceeds,  etc. The card is presently  marketed
            under the name  CashTech.Card  and Papa Cash Card.  Heuristic  earns
            fees on every card transaction.  As of September 10, 2005, Heuristic
            had obtained all necessary banking and MasterCard  approvals and had
            issued the first approx. 300 cards. Contracts signed with Papa Cash,
            Inc., a check cashing company, and Nelson Burtnick Associates,  Inc.
            a gift card distributor,  as well as other pending opportunities are
            expected to result in significant card issuances over the next year.


                                       4
<PAGE>

      o     ProIdentify,  which allows  determination  of a patient's  insurance
            eligibility status in real time.

      o     ProClaimSubmit,  an "all-payer"  insurance claims clearinghouse that
            permits  health care  providers  to submit their claims to virtually
            any  insurer in the U.S.  through a single  internet  connection  to
            Heuristic.   ProIdentify  and  ProClaimSubmit  utilize  the  network
            services  of  Affiliated  Computer  Services,  Inc.,  a  major  U.S.
            healthcare  data  processor,   with  whom  Heuristic  established  a
            strategic marketing  relationship in June, 2005. As of September 10,
            2005,  contracts with Heuristic  customers for these products,  when
            installation  is  completed,  will result in  approximately  330,000
            claim transactions per month.

      o     Pro837,  a  product  that can be  implemented  by both  health  care
            providers and insurers. For providers,  Pro837 dramatically improves
            the rate of  payment  of  medical  insurance  claims by  identifying
            defects in the  claims  that would  prevent  payment.  The result is
            decreased  accounts  receivables,  receivables  days outstanding and
            overhead.  When  employed  by  insurers  and  other  payers,  Pro837
            automatically  filters  defective  claims  that would  otherwise  be
            handled manually at significantly greater expense, reducing overhead
            while improving service to the provider  community.  We believe that
            Pro837  represents a breakthrough  in medical data  processing  that
            can, over time, achieve an improvement in the healthcare industry in
            the  United  States.   When  Pro837  is  combined  with  Heuristic's
            ProIdentify  and  ProClaimSubmit  products,  the  result is a robust
            medical  insurance   processing  suite.   Pro837  includes  software
            developed by  ClaimRemedi,  Inc.,  from whom  Heuristic  obtained an
            eight year  exclusive  license in February,  2005.  The  ClaimRemedi
            platform currently processes more than one million medical insurance
            claims  per  month  (from  which  Heuristic  does  not  receive  any
            revenue).

      We believe that in addition to its other capabilities,  our EMMA software,
when  integrated  with  Heuristic's  products in the future,  will enhance those
products.  For  stored-value  cards,  EMMA can add proprietary  functionality to
differentiate  the cards from competitive  offerings.  For healthcare  products,
EMMA can  integrate  financial  functions  with health  insurance  processing to
further improve efficiency in the healthcare industry.

ATM-X(TM), POS-X(TM)

      We have  developed  EMMA-based  software  for an  enhanced  version  of an
automated teller machine, designated the ATM-X and for an enhanced POS terminal,
designated  POS-X.  The  software  permits  these  devices  to  offer a range of
financial  services not  typically  offered by ATMs and POS  terminals,  such as
check cashing,  electronic bill payment,  phone cards issuance,  event ticketing
and Internet products and services. Various field tests have been conducted with
this technology over the years. In partnership  with ATM  manufacturer  Diebold,
Inc., in March 2000, we completed installation of the first ATM-X pilot at three
stores owned by Rent Way. The machines were removed when the stores were sold in
2003. In August 31, 2001, the first pilot POS-X terminal was deployed at Popular
Cash  Express,  a division of Banco  Popular's  parent.  None of the systems are
presently  installed  however the Company has  developed a version of the system
for check  cashing  stores and has reached an  agreement  with a check casher to
begin testing the system in November, 2005.

TOMCO AUTO PRODUCTS

      Tomco  remanufactures and sells replacement fuel systems  (carburetors and
diesel  pumps)  for  domestic  and  foreign   automobiles,   trucks  and  marine


                                       5
<PAGE>

applications.  The Company distributes its products through a nationwide network
of retailers.  Three retailers,  NAPA, O'Reilly Automotive and Carquest accounts
for 77% of Tomco's sales.

Industry (Market) Overview

E-commerce Message Management Architecture (EMMA) Transaction Processing System

      In  recent  years,  the  limitations  of the aging  infrastructure  of the
financial networks are being highlighted by the rise of public  networking.  The
most notable example of public  networking,  the Internet,  depends for its high
availability and security upon advances in network hardware, new protocols,  and
high-speed digital  communications lines. In contrast, the standard in financial
networking  infrastructure  is a generation  behind the majority of business and
consumer networks.

      This disparity in infrastructure  introduces  limitations such as the need
for more  bandwidth and easier access.  But bandwidth is only one problem.  Each
existing aging financial network  transacts  independently via specific industry
protocols which by design prohibit the free flow of information from one network
to  another--e.g.,  the POS network  only  communicates  within the POS network,
ATM's  transact  exclusively  via the ATM network and neither can interface with
the  Internet.  This problem  becomes the  significant  stumbling  block for the
implementation of advances in security, network control and routing.

      EMMA potentially  offers the financial  industry a bridge  technology that
provides a remedy to the disparity within existing systems. The EMMA Platform is
meant to  provide  a  solution  that  will  work in  parallel  with the  current
financial  networks,  interacting  with each without any  requirement  for those
networks to change their current operation.  It supports the beneficial features
of those  networks and overcomes  their  limitations.  It promises to provide an
up-to-date solution that can implement the newest technologies, as well as carry
the weight of the  transaction  volume  from  older  terminals  and,  in effect,
converts these legacy systems into unaware  participants in a more sophisticated
network.

      Health Care Products

      "Cost control" in the healthcare industry has traditionally  referred only
to capping medical expenditures. Since further reducing payments to providers is
difficult and will likely  result in only small gains,  the emphasis has shifted
to reducing  administrative  costs.  Comparatively  few efforts had been made to
control  administrative  costs, which account for an estimated half of the total
cost  of  healthcare.   HIPAA  further  contributed  to  the  current  focus  on
administrative cost reduction by emphasizing  electronic data interchange in the
healthcare  industry.  In the United  States,  where $1.5  trillion  is spent on
healthcare   annually,   inefficient   healthcare   administration   is  costly.
Heuristic's software solutions target several particularly  inefficient areas of
healthcare administration:  claim submission, determination of patient insurance
eligibility and claim editing for healthcare providers, and claim and remittance
processing for payer organizations.

      Products for Healthcare Providers

      To   healthcare   providers,   HTI   offers   Pro837,    ProIdentify   and
ProClaimSubmit.  These  products,  sold as a  monthly  subscription  or on a per
transaction  basis,  greatly  reduce the cost of healthcare  administration  for
providers.  None of these  products  require any  significant  investment in new
software or  hardware  by  customers  - the  products  are  designed to be fully
compatible with all existing systems used by healthcare organizations.

      Currently,  anywhere  from  30% -  50%  of  all  health  insurance  claims
submitted  by a provider  are  rejected by the payer  organization  and returned
30-60 days later for  correction  and  resubmission.  Pro837  acts like a claims
proofreader:  Before the claims are submitted to the payer organization,  Pro837


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<PAGE>

subjects  the  claim  to  the  exact  standards  used  by the  respective  payer
organization  in adjudicating  the claim - more than 1.5 million  business rules
are contained in Pro837's  rules  engine.  It then reports  problem  claims with
precise instructions for repairing the errors and forwards payable claims to the
payer- all in a matter of seconds.  Pro837 typically  reduces a provider's claim
rejection  rate  to  less  than  3%.  Implementation  of  Pro837  results  in  a
significant reduction in receivables,  receivables days outstanding and overhead
costs of  managing  claims.  To  maintain  the  highest  performance  standards,
Pro837's rules engine is updated every week with the newest published rules from
payer organizations as well as unpublished and often unannounced rules resulting
from the continuous analysis of actual payment rejection files.

      In order for a healthcare  provider to determine the insurance coverage of
a patient,  it is often necessary to phone each patient's  insurance company and
have an  agent  locate  the  information.  ProIdentify  replaces  this  function
electronically  by interfacing with the insurance  company's patient database to
provide the same information immediately.

      ProClaimSubmit  is  an  "all-payer   clearinghouse"   solution.  Far  more
efficient  than  manual  (paper)  claim  submission,  ProClaimSubmit  allows the
provider to  electronically  submit  claims to  virtually  any payer in the U.S.
though an online connection with Heuristic, saving time and costs.

      Packaging these products together provides customers with a complete claim
proofreading and submission solution. The package greatly reduces the providers'
labor needs and results in significant savings.

      Products for Healthcare Payers

      For  healthcare  payers,  Heuristic  markets  Pro837 and ProRemit on a per
transaction basis.

      Pro837 acts like a filter for payers,  allowing  only claims that are able
to be paid to reach the  billing  staff,  and  immediately  rejecting  defective
claims (those that are incomplete, erroneous or fail the payer's business rules)
back  to  the  respective  providers  with  detailed  explanations  of  required
corrections. This process results in a dramatic reduction in claims handling and
associated costs.

      ProRemit expedites the remittance process.  Today more than a billion U.S.
health  insurance  payments  each year are  remitted  by checks  and  remittance
advices sent to providers  through the mail.  ProRemit  improves  efficiency  by
converting   these  paper   payments  into   electronic   direct   deposits  and
automatically generated e-mail or fax remittance advices.  Utilizing the payer's
check  print  file as its  source,  ProRemit  achieves  compatibility  with  all
existing  payer  systems  without new software or other  costly IT upgrades.  As
paper  payments  can cost a payer as much as $5.00 each or more to generate  and
mail, ProRemit offers substantial operating costs reductions.

      Pro837 Software

      HTI acquired an 8-year exclusive license for the major component of Pro837
from the  third-party  developer  of the  software,  which is subject to certain
minimum transaction volume targets beginning in December, 2005. A portion of the
per-transaction  revenue  received  from  customers  is paid to the  third-party
developer.

Stored Value Card

      Heuristic offers a stored-value  debit MasterCard card which has a variety
of applications,  including (i) corporate  expense and benefits  reimbursements,
(ii) corporate payroll, (iii) credit card functionality for those with bad or no
credit or no bank account,  (iv) as a loyalty or membership  card with financial
functions,  (v) virtual  bank  account,  (vi) as a means of  providing  funds to
dependents,  etc. The Card can be used at millions of merchants  and ATMs around
the world and features  MasterCard  fraud and loss  protection.  The Card can be
reloaded  and  managed  at the  CashTechCard.com  website or via toll free phone
support.


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<PAGE>

ATM-X(TM) and POS-X(TM) Terminals

      We have  developed  EMMA-based  software  for an  enhanced  version  of an
automated teller machine, designated the ATM-X and for an enhanced POS terminal,
designated  POS-X.  The  software  permits  these  devices  to  offer a range of
financial  services not  typically  offered by ATMs and POS  terminals,  such as
check cashing,  electronic bill payment,  phone cards issuance,  event ticketing
and Internet products and services.  Various field test have been conducted with
this technology over the years. In partnership  with ATM  manufacturer  Diebold,
Inc., in March 2000, we completed installation of the first ATM-X pilot at three
stores owned by Rent Way. The machines were removed when the stores were sold in
2003. In August 31, 2001, the first pilot POS-X terminal was deployed at Popular
Cash  Express,  a division of Banco  Popular's  parent.  None of the systems are
presently  installed  however the Company has  developed a version of the system
for check  cashing  stores and has reached an  agreement  with a check casher to
begin testing the system in November,  2005.  The Company is also in discussions
to install the system in retail stores where check cashing  activities  generate
continuous losses for the retailer.

      The ATM-X and POS-X  terminals  are  designed to take  advantage of EMMA's
capabilities to expand access throughout the financial network. For example, the
system will allow a customer to cash a paycheck purchase money orders,  transfer
money, pay bills,  etc. We do not intend to manufacture or distribute any ATM or
POS machines.  The  manufacturing,  distribution and support of these devices is
performed by existing large  equipment  manufacturers  such as Diebold,  NCR and
Verifone.

CoinBank Machines

      In December 1995, we commenced developing and marketing CoinBank machines,
automated  self-service coin counting and processing machines designed to accept
and count loose coins for a fee. The CoinBank machine is a freestanding  machine
that incorporates  hardware and electronic  components and certain software.  We
have developed three different CoinBank machine models,  with variations in coin
storage capacity, customer interfaces and external appearance.

      The  CoinBank  machine  calculates  the gross value of each batch of coins
placed  into it by a  customer,  deducts a  percentage  of the gross batch total
(typically  7 1/2% to 9%) and  prints  out a  receipt  for the net  amount.  The
customer can bring the receipt to a teller window in a financial institution, or
cashier in the case of a retail  location,  for deposit to a bank  account or in
exchange  for currency or goods.  The CoinBank  machine is also capable of being
linked to bank networks in order to permit  customers to directly  deposit funds
to a bank account.

      We are dependent on  third-party  manufacturers  for the production of the
components   incorporated   into  CoinBank   machines  and  currently   purchase
substantially  all  of  our  requirements  of  specially  designed  or  modified
components from single source suppliers. We purchase certain of these components
pursuant to open purchase orders placed from time to time in the ordinary course
of business.  Although we currently  believe that alternative  sources for these
components  are  readily  available,  failure  or delay by any  manufacturer  in
providing  components to us on commercially  reasonable terms, or at all, in the
absence of readily available alternative sources,  could result in interruptions
in our ability to continue its assembly and installations of CoinBank  machines.
Through contracts with Diebold,  Inc. and NCR Corporation CoinBank machines have
been sold in the U.S.  and  Europe,  however  there is no  assurance  that these
relationships will continue to be a source of sales of CoinBank machines.


                                       8
<PAGE>

Tomco Auto Products

      TAP Holdings,  LLC operates  under the brand name Tomco which has a thirty
year history as a leading provider of remanufactured fuel system components. The
Los Angeles-based  company  distributes its products through major auto products
retailers  throughout the U.S. such as NAPA, with 6,000 stores,  CARQUEST,  with
3,600  stores,  O'Reilly  Automotive,  with more than 1,399  stores and numerous
others. These customers accounted for 77% of Tomco's 2005 sales.

      The  remanufacturing  business is based on the  availability  of discarded
carburetors,  called "cores".  Adequate core inventories are key to the business
and Tomco's core  inventory as of May 31, 2005 totaled  $6,288,459  with 529,884
units on  hand.  Tomco  receives  most of its  cores  from  its  customer  base.
Consumers turn in their used  carburetors to the retailer and receive a discount
on a  remanufactured  replacement  unit. The retailers  forward the old cores to
Tomco and receive credits toward product invoices. For the fiscal year ended May
31, 2005 Tomco shipped 73,536 units.

Sales and Marketing

      E-Commerce Message Management  Architecture (EMMA) Transaction  Processing
System

      In June 2002 we formed a subsidiary  named CT  Holdings,  LLC, of which we
own 86.65%, to develop, market and implement EMMA-based banking applications. CT
Holdings, LLC will bring BONUS(TM),  a suite of self-service  electronic banking
services,  including  automated  check cashing,  to the  marketplace.  The BONUS
software  allows  automated  check cashing at bank  branches or retailers  using
advanced  ATMs.  Powered by our EMMA  software,  BONUS uses  third  party  owned
proprietary optical character recognition (OCR), biometric  identification and a
sophisticated  risk analysis engine to establish a user's identity and authorize
checks.

      Following the  successful  completion of a pilot with Popular Cash Express
("PCE"), a unit of Popular,  Inc., in June, 2003 the Company signed an agreement
with PCE to install the EMMA(TM) MFS(TM) (Mobile  Financial  Services) system on
PCE's mobile check-cashing trucks. Under the agreement,  PCE was responsible for
installation and hardware costs and a per-transaction  fee to Cash Tech for each
check  processed.  The agreement  provided for the installation of the system on
PCE's fleet of approximately  60 check cashing trucks in two phases,  however in
October  2003,  before the  rollout  had been  completed,  PCE sold the fleet to
another  check  cashing  operator  with whom we have not arranged to install the
product.

      Our  check-cashing  products  for are able to rapidly  capture and analyze
transaction data from checks, reducing losses due to fraud and automating manual
processes.  The  products  have  been  piloted  in  various  financial  services
locations,  however no major  deployment  has  occurred to date.  Our system can
recognize  and  analyze  check  data,  identify a customer  and  provide a check
approval in a few seconds,  reducing losses and improving  efficiency and record
keeping.  The EMMA risk  analysis  process  quickly  analyzes and  credit-scores
electronic  check images to determine  the  probability  of loss.  The speed and
accuracy of the EMMA  system can permit  cashiers  to  identify  fraudulent  and
counterfeit checks while the customer is still present.  This is significant for
the industry since the majority of banks and financial  services  providers have
little or no ability to detect check fraud at the point of  presentation,  which
costs the  industry  billions  of dollars per year.  The  Company  has  recently
developed  a version of the system  designed  for check  cashing  stores and has
reached an agreement  with a check casher to begin live testing of the system in
November,  2005.  The  Company is also in  discussions  to install the system in
retail stores where check cashing activities  generate continuous losses for the
retailer.

      Healthcare Products and Stored Value Card

      In  September,   2005  Heuristic   contracted   non-exclusively  with  two
independent  sales  organizations  ("ISOs")  to sell and market  its  healthcare
products, for which the ISOs receive a portion of the installation and recurring


                                       9
<PAGE>

revenue  generated  by the  products.  Heuristic  also  markets  these  products
directly to large clients and through its network  partner  Affiliated  Computer
Services, Inc. Pro837's unique capabilities make it useful to both providers and
payers.

      Heuristic's  debit  card  products  are  sold  through  several  channels.
Following a testing  period with a check  cashing  company  during which a small
number cards were  distributed,  we have  recently  agreed to roll out the cards
throughout  the  chain of  several  dozen  check  cashing  stores.  We have also
recently   completed  an  agreement  with  a  gift  card  marketer  to  use  the
CashTech.Card  platform  for their  cards.  With our ISOs,  we are  developing a
program to utilize their sales forces to distribute  the card which we expect to
begin during 2005. The new website  created for the card,  www.cashtechcard.com,
will  soon be used to  market  the card  using  internet  marketing  techniques.
Finally,  Heuristic  is  pursuing  a  number  of  private-label   opportunities,
including membership clubs and loyalty programs.

      CoinBank Machines

      Since inception,  we have conducted only limited marketing  activities and
currently have limited marketing and technical experience and limited financial,
personnel and other resources to  independently  undertake  extensive  marketing
activities. We conduct substantially all of our own marketing activities and may
hire additional marketing personnel,  including possibly independent contractors
to  assist  us in  marketing  CoinBank  machines.  To  date,  we have  conducted
marketing  of our cash  processing  services  by means  of  press  releases  and
articles in trade journals targeted at cash-intensive  industries. Our marketing
of CoinBank machines has consisted of entering into market testing  arrangements
with a limited  number of financial  institutions  and  retailers  and attending
certain  industry  shows. We intend to focus our future  coin-machine  marketing
efforts on the sale of CoinBank  machines rather than the  free-placement/shared
revenue model.

      On June 30,  2003,  CoinBank  Automations  Handels  Ges.m.b.H.  ("CoinBank
Europe"),   an  Austrian   corporation  and  wholly  owned  subsidiary  of  Cash
Technologies,    Inc.,    signed    an    agreement    with    Cash    Solutions
Geldverarbeitungssysteme  GmbH i.G. ("Cash Solutions"), an Austrian corporation,
for Cash Solutions to  exclusively  distribute  our CoinBank  self-service  coin
counting  machines in Europe.  Cash Solutions has supplied the machines in small
test quantities to NCR Corporation and others.  The agreement requires that Cash
Solutions meet certain minimum quantities to maintain its exclusivity,  which it
has thus far failed to meet,  however the European coin machine market continues
to represent a significant opportunity for the sale of CoinBank machines.

      The CoinBank machine provides superior  performance due to its proprietary
technology.  The machine  determines  a coin's  denomination  by  electronically
measuring  its metal  content  rather than by weight and size.  The  proprietary
technology,  key  aspects  of which  were  issued a U.S.  patent in 2001  (other
worldwide patents are pending),  outperforms  competitive machines by separating
out and  returning  all  foreign  debris and coins,  improving  reliability  and
accuracy.  Through a  sophisticated  communications  device,  the machines  also
permit remote management,  maintenance and software upgrades via telephone,  the
Internet or local area network (LAN). This allows a large network of machines to
be  efficiently  managed by  financial  institutions  or  retailers.  The latest
version of the CoinBank machine does an exceptional job processing euros,  which
are particularly  difficult to count accurately due to slight  variations in the
metal alloys introduced by the many countries minting the new coins.

      Remanufactured Fuel Systems

      Tomco's products are marketed primarily  throughout the continental United
States.  Tomco sells  carburetors and diesel pumps to aftermarket  retail chains
that  distribute  products  through  their  stores.  The  company  also sells to
automotive and marine  warehouse  distributors,  who then sell to jobber stores.
Three  major auto  retailers,  NAPA,  with 6,000  stores,  CARQUEST,  with 3,600
stores,  O'Reilly  Automotive,  with more than 1,399 stores accounted for 77% of
Tomco's 2005 sales.


                                       10
<PAGE>

      The Company obtains and utilizes used units,  commonly known as "cores". A
majority of the units  remanufactured  by Tomco are acquired  from  customers as
trade-ins ("core returns"). The remainder of the core requirements are filled by
purchasing  cores  in  the  open  market  or  re-configuring  cores  to  replace
difficult-to-obtain  carburetors.  With over 500,000  carburetor cores in stock,
Tomco has been able to fill more 98% of its  orders.  Tomco  generally  fills an
order within three days.

      Tomco  utilizes  outside  salesmen  and sales  representatives  around the
country to promote its product lines. In addition,  Tomco attends periodic trade
shows,  displaying its products and meeting with new and prospective  customers.
Tomco  also  publishes  a catalog  of its  products.  Tomco's  sales  people and
representatives  call on existing and prospective  customers to familiarize them
with the  Company's new and existing  products and to review vendor  agreements.
Tomco offers a ninety day limited warranty on all of its products.

      Customers  can place  orders  by phone,  fax and  direct  Electronic  Data
Interchange ("EDI").  Tomco is currently implementing an internet parts ordering
system which will be available to certain customers in fiscal 2006.

Competition

      EMMA - Electronic Message Management  Architecture  Transaction Processing
System

      There is intense growth in the development and distribution of off-premise
(non-bank)  financial  services,   particularly  on  ATMs,  Point-Of-Sale  (POS)
terminals,  specialty  kiosks and other devices,  including  cellular phones and
wireless  PDAs.  Most of this equipment has a limited user  interface,  although
recent  equipment  models have  high-powered,  graphical user  interfaces.  Many
support  peripherals  for dispensing new financial  products.  While there are a
number of companies  who have  developed  transaction  processing  solutions for
specific  applications,  such as  check  cashing,  event or  airline  ticketing,
prepaid phone cards,  etc, we are not aware of any competitor  that has our plan
to provide  "advanced  function"  transaction  processing  services  as its core
business. One company, 7-Eleven, Inc., has deployed check-cashing terminals into
its convenience stores. These terminals are also capable of issuing money orders
and transferring  money. While apparently similar in functionality to our ATM-X,
the 7-Eleven  system is not designed for banks,  the focus of our BONUS product,
nor is it useful  in mobile  applications,  as is our MFS  product,  nor does it
provide the  versatility  of the EMMA  platform.  In addition,  to our knowledge
7-Eleven is not offering transaction processing services or terminals to outside
companies or  institutions,  though there is no assurance that it will not do so
in the future. This is, nonetheless, an important factor competing for a similar
end-user base.

      Coin Machines

      While we are aware of perhaps a half dozen coin machine  manufacturers  in
the world,  we know of only two companies,  Coinstar,  Inc. and Scancoin,  Inc.,
that have  distributed  an  appreciable  number of  self-service  coin  counting
machines to the U.S. retail industry. To our knowledge,  unlike our approach, in
which  CoinBank  machines  are  sold,  Coinstar  focuses  marketing  efforts  on
installing  "free  placement"  machines.  This  competitor has installed a large
number of  machines  throughout  the  United  States,  and in some  cases,  such
installations  are near  where we have  installed  or may seek to sell  CoinBank
machines.  There can be no  assurance  that  potential  purchasers  of  CoinBank
machines will not prefer to employ this competitor's "free placement"  machines.
Moreover,  there can be no assurance that other  companies are not developing or
will not seek to develop  functionally  equivalent  products or services for the
disposal  of  large  amounts  of  coins  in  the  future.   Other  coin  machine
manufacturers may have substantially greater financial, personnel, marketing and
other  resources  than us. In  addition,  there are many  companies  in the coin
processing  industry that have the  expertise  and resources  that may encourage
them to develop and market  products  or services  that  compete  with  CoinBank
machines or that would render  CoinBank  machines  obsolete or less  marketable.
Moreover,  potential  customers may elect to establish  their own facilities for
counting and processing coins or utilize other methods, which they believe to be
less costly or possess other advantages over CoinBank machines.  There can be no
assurance that we will be able to compete successfully.


                                       11
<PAGE>

      Heuristic Products

      Heuristic's  healthcare products compete in a large and highly competitive
industry filled with products that have similar  functionality  to the Heuristic
products. Large healthcare data processors,  such as WebMD, McKesson, EDS, Perot
Systems and others offer eligibility and claims clearinghouse  capabilities that
are as capable as those offered by  Heuristic.  Several  companies  offer claims
scrubbers which have similar functionality to Heuristic's Pro837 product.  While
we believe  that  Pro837  offers  compelling  advantages  over  these  competing
products,  the competitors have significantly  greater financial,  marketing and
other  resources than  Heuristic and the successful  marketing of their products
may lessen or minimize the demand for Heuristic's products. Heuristic intends to
compete  successfully by combining  Pro837 into bundled  offerings that are well
received by  customers  and thereby  capturing  a small  percentage  of the $1.5
trillion  U.S.  healthcare  market,  however  there  can  be no  assurance  that
Heuristic will succeed in this endeavor.

      Similarly,  the debit card and  stored-value  card  products  compete in a
large  debit and  credit  card  industry  filled  with  similar  and  substitute
products.  Customers  may opt to  utilize  other  forms of  payment,  other card
products or similar products marketed by other companies,  rendering Heuristic's
cards obsolete.  Other stored-value cards have nearly identical functionality to
the Heuristic  products and may be more  effectively  marketed by companies with
greater  resources.  Heuristic  intends to compete  successfully by offering the
state-of-the-art in card functionality,  web-based and phone support, aggressive
pricing and the utilization of existing sales channels,  however there can be no
assurance  that Heuristic  will succeed in  distributing a meaningful  number of
cards.

      Remanufactured Fuel Systems

      There are numerous  small,  family-owned  remanufacturers  servicing their
local  markets,  however,  there are only two national  remanufacturers  of fuel
systems who compete  with Tomco;  Holley (a division of Coltec  Industries)  and
Champion  Parts,  Inc.  Indirect  competitors  are  the  companies  that  supply
carburetor rebuilding kits which allow the consumer to rebuild a carburetor. The
larger  carburetor kit suppliers are: Walker  Products,  Tomco Inc. (St. Louis),
Standard Motor Products, and Ace Electric. Tomco offers a 90-day warranty on all
of its  products.  As of May 31,  2005  Tomco had  accrued  $269,913  for future
warranty  claims.  The Company does not have  patents,  trademarks,  licenses or
franchises.

Intellectual Property

      Although  we have  received  U.S.  Patents  with  respect to our  CoinBank
machine and EMMA  technology,  there can be no assurance that these patents will
afford us with any meaningful  protection.  Any or all claims of a patent can be
invalidated even after its issuance through litigation and other  administrative
procedures.  If we fail to adequately  defend such  attacks,  one or more of our
claims or our entire  patent(s)  could be invalidated and of no further value to
us. We rely on a combination of trade  secrets,  technical  measures,  copyright
protection  and  nondisclosure  agreements  with its  employees to establish and
protect the ideas,  concepts and documentation of certain software  developed by
us and used primarily in its cash processing operations ("Developed  Software").
Such methods may not afford complete  protection,  and there can be no assurance
that third  parties will not  independently  develop such  technology  or obtain
access  to the  Developed  Software.  Although  we  believe  that the  Developed
Software and other  software used in its  operations  does not infringe upon the
rights of others,  there can be no assurance that the Developed Software or such
other  software does not and will not infringe upon the patents or  intellectual
property rights of others. See "Risk Factors"-Litigation.


                                       12
<PAGE>

      In the event of infringement,  we could, under certain  circumstances,  be
required to obtain a license or modify aspects of the Developed Software or such
other  software or refrain from using such  software.  There can be no assurance
that we will have the necessary  financial  resources to defend any infringement
claim made against us or to successfully  terminate any infringement in a timely
manner, upon acceptable terms and conditions or at all. Failure to do any of the
foregoing could have a material adverse effect on us. Moreover, if the Developed
Software or other  software  used in our business is deemed to infringe upon the
rights of others,  we could,  under  certain  circumstances,  become  liable for
damages, which could have a material adverse effect on us.

      We believe that product recognition is an important competitive factor and
promotes the CoinBank  name in  connection  with our  marketing  activities.  We
received  United  States  trademark  registration  for  the  "CoinBank"  name in
September 1997. Although we are not aware of any claims of infringement or other
challenges to our rights to use this  trademark,  there can be no assurance that
our marks do not or will not infringe upon the  proprietary  rights of others or
that our marks  would be  upheld  if  challenged.  We have not  applied  for the
trademark with respect to the EMMA trade name or any other trade name.

Employees

      As of May 31, 2005, we employed 218 employees and three  contractors  on a
full-time  basis,  of which 205 are employed at Tomco and the  remainder at Cash
Technologies  headquarters.  Of the Cash  Tech  staff,  three  were  engaged  in
facilities and security,  one in customer  service,  six in  administration  and
business  development,  and six in system support and development.  Of the Tomco
staff, 173 are engaged in production,  15 in shipping, 3 in outside sales and 15
in administrative  departments.  None of our employees are subject to collective
bargaining  agreements.  We believe that our  relations  with our  employees are
good. In addition, we utilize the services of two offshore technical development
groups for some of our software development activities.

                                  RISK FACTORS

      The following factors, in addition to those discussed elsewhere, should be
considered  carefully in  evaluating  our business and us. An  investment in our
shares  involves a high degree of risk and is suitable only for those  investors
who can bear the risk of loss of their entire investment.

Risks Related to Our Financial Condition

We have limited revenues and a history of incurring  losses,  which has resulted
in our independent  accountants  issuing  opinions  containing  doubts about our
ability to continue as a going concern.

      We have generated  limited  revenues  since our  inception,  and, while we
expect to generate significant revenues within the next fiscal year, there is no
assurance  that we will be  successful.  For the fiscal years ended May 31, 2004
and 2005, we had net sales of $80,616 and $5,718,886, respectively.

      Prior to the fiscal year ended May 31, 2005 we have incurred  losses since
our  inception.  For the last two fiscal years ended May 31, 2004 and 2005,  net
income  (losses)  of  $(4,382,532)  and  $3,655,760   respectively.   We  had  a
stockholders'  equity  of  $4,145,828  as  of  May  31,  2005.  In  its  reports
accompanying our audited financial statements for the fiscal years ended May 31,
2005 and 2004,  our  independent  auditors  included  an  explanatory  paragraph
wherein  they  expressed  substantial  doubt  about our ability to continue as a
going  concern.  Despite the profit  generated  during during the current fiscal
year, we have continued to generate  operating losses and will continue to incur
losses for the foreseeable future.


                                       13
<PAGE>

We are unable to pay our  current  liabilities,  and must rely on the  continued
forbearance of specific creditors to avoid bankruptcy.

      As of May 31, 2005 we had outstanding  current  liabilities of $9,316,566,
of which approximately $472,975 is not being paid as agreed. Our creditors have,
to date,  agreed not to accelerate on these  obligations and not to foreclose on
our assets.  However,  should the creditors demand immediate repayment, we would
have to  raise  the  needed  funds  to  satisfy  the  obligations,  possibly  on
unsatisfactory  terms or  failing  that,  we would have to  consider  filing for
bankruptcy protection.

We have an  immediate  need for  capital  and if we are  unable  to  obtain  the
financing we need, our business may fail.

      As of May 31,  2005,  Cash Tech had  working  capital  of  $1,867,989  and
available cash of $163,627. Our capital requirements have been and will continue
to be  significant,  and our cash  requirements  have  exceeded  cash  flow from
operations since  inception.  We are in immediate need of capital to continue to
operate.  We have been  dependent on the proceeds of private  placements  of our
debt and equity securities to satisfy our working capital requirements.  We will
be dependent  upon the proceeds of future private  placement  offerings or other
public  offerings to fund  development  of the EMMA  technology,  our short-term
working  capital  requirements,  to fund  certain  marketing  activities  and to
continue  implementing our business strategy.  There can be no assurance we will
be able to raise necessary capital.  To the extent that we incur indebtedness or
issue debt  securities,  we will be subject to all of the risks  associated with
incurring substantial indebtedness,  including the risks that interest rates may
fluctuate and cash flow may be insufficient to pay principal and interest on any
such  indebtedness.  Any inability to obtain  additional  financing  when needed
could require us to significantly  curtail,  or possibly cease  altogether,  our
operations. There can be no assurance that our lenders will not declare an event
of default and demand immediate payment or seek to attach our assets,  including
our EMMA  technology.  As of May 31,  2005,  we also owe  $3,683,045  to General
Electric Capital Corporation. In 2000, we entered into the first of several loan
modifications  with  G.E.  Capital.  The  current  modification  will  expire in
November  2005,  and we have no current plan or  arrangement  for repaying  G.E.
Capital its principal.

Our assets serve as collateral  for various loan  obligations  and therefore may
not be available for distribution to stockholders in the event of liquidation.

      We have  previously  granted  security  interests  in all of our assets to
various  lenders,  including  the  holders  of the  notes in the  principal  and
interest  amount of $472,975  issued in our  placement,  which was  completed in
January  2000,  and  equipment  liens  in  favor  of  General  Electric  Capital
Corporation  pursuant to a Master Security Agreement  originally entered into in
May  1997  and  liens in favor of BFI  Finance  pursuant  on all  assets  of TAP
Holdings, to a Loan and Security Agreement entered into in November 2004.

      The General Electric loan is secured by certain of our CoinBank  machines.
As of May 31, 2005, we were indebted to General Electric Capital  Corporation in
the amount of approximately  $3,683,045  including interest.  As a result of the
existing liens and continuing  losses, we are unable to obtain additional credit
by  securing  our  assets.  Further,  as a  result  of the  security  interests,
creditors would be entitled to collect upon the assets prior to any distribution
being available to holders of our Common Stock or Preferred Stock.

      The BFI loan is a revolving accounts receivable credit facility secured by
all of the business  assets of TAP Holdings,  LLC as well as a limited  personal
guaranty from TAP's chairman, who is not an employee of Cash Technologies. As of
May 31, 2005 we were indebted to BFI in the amount of  approximately  $1,936,318
including interest. From time to time, due to fluctuations in Tomco's cash flow,
TAP has  requested  funds from the BFI credit  facility at advance  rates higher
than BFI's  contract rate. To date BFI has funded all such requests but is under
no  obligation  to do so. In the event that BFI refuses to fund such requests in
the future,  TAP/Tomco could be adversely  affected and might not be able to pay
its  obligations  timely  causing  temporary  or  permanent  disruption  in  the
company's operations.


                                       14
<PAGE>

Any  additional  financing  that we may  obtain  may  substantially  dilute  the
interests of our stockholders.

      To the extent that we obtain additional  financing through the issuance of
additional  equity   securities  in  the  future,   such  issuance  may  involve
substantial dilution to our then-existing stockholders.

We may not fully  recover the carrying  value of our CoinBank  machines held for
sale.

      We currently  are holding for sale  approximately  241 CoinBank  machines,
which have a carrying value of  approximately  $638,283 at May 31, 2005. We have
taken an  impairment  charge  in the  fiscal  year  ended  May 31,  2004 for the
carrying  value  of our  CoinBank  machines.  Impairment  on coin  machines  was
$154,140.  The impairment  was taken due to low inventory  turnover for the coin
machines. In future periods,  additional impairment may be taken based on future
sales of coin machines.  If we conclude that such impairment exists,  this could
give rise to a substantial  expense,  which would increase our reported  losses.
For the fiscal year ended May 31, 2005,  we sold eight (8) machines for $61,662.
We continue attempting to identify parties interested in acquiring the remaining
units,  although  we cannot  guarantee  we will  continue  to have sales or will
obtain similar sales results.

Risks Related to Our Tomco Auto Products Business

Tomco is dependent on three auto supply retailers the loss of any one could harm
our business.

      We are  substantially  dependent on three customers:  NAPA,  O'Reilly Auto
Parts and CARQUEST.  Combined these customers accounted for approximately 77% of
TAP's volume.  The loss of one of these customers would have a material  adverse
affect on our financial position and our ability to operate.

Tomco is dependent on a mature product line whose volume continues to shrink.

      Approximately  98% of TAP's  volume for the 2005 fiscal year  involves the
sale of rebuilt  carburetors.  Sales have and will  continue  to decline for two
reasons.  First,  the  availability of acceptable  carburetor cores continues to
shrink  due to age or  damage  to used  carburetors.  Secondly,  the  amount  of
vehicles  using  carburetors  continues  to  decline  since  the  last  domestic
carbureted  production  vehicle was  manufactured in 1988. To compensate for the
declining sales, in 1998 Tomco began rebuilding diesel pumps which have a larger
user base.  Management will also be unveiling a new product line in fiscal 2006.
However, neither this new product line nor the diesel pump sales will offset the
continual carburetor sales erosion.

Tomco may not fully recover the carrying value of its core inventory.

      As of May 31, 2005 Tomco had  529,884  cores on hand which have a carrying
value  of  $6,288,459.  In  November  2004,  at the  time  Tomco's  assets  were
purchased,  an  obsolescence  reserve of  $1,180,000  was  established  to cover
potential  inventory  impairment due to low core inventory  turnover.  In future
periods, additional impairment may be taken based on future carburetor sales. If
Tomco  concludes  that  such  impairment  exists,  this  could  give  rise  to a
substantial expense and negatively impact Tomco's financial results.

Risks Related to Our CoinBank Businesses

If our products do not achieve market acceptance, our business will be harmed.

      The demand for and market  acceptance of our coin and currency  processing
equipment are also subject to a high level of uncertainty.  If we do not realize
market  acceptance of these  products,  our business  will be seriously  harmed.
Commercial  establishments  and  individuals  may elect to utilize other methods
which they believe to be less costly or possess other  advantages  over our cash
processing  services,   including  establishing  their  own  cash  counting  and
processing equipment.


                                       15
<PAGE>

We are dependent on third-party manufacturers.

      We  are  substantially   dependent  on  the  ability  of  the  independent
contractors we hire to build our CoinBank  machines.  We do not  manufacture our
CoinBank  machines.  As a result,  we are  dependent  upon third parties for the
manufacture  of  our  machines,  we  cannot  control  the  price  or  timing  of
availability  of machines for resale and this  reliance  upon third  parties may
affect  our  ability  to market  and sell the  machines  to our  customers  at a
competitive price or to satisfy delivery requirements demanded by our customers.

Risks Related to Our EMMA Based Technology Businesses

Our products may not perform reliably in extensive applications.

      As of May 31, 2005, we had test-marketed only four EMMA-driven ATM-X/POS-X
machines and have derived no significant  revenue from our EMMA-based  business.
To date, we have not  installed a base of  EMMA-driven  ATM-X/POS-X  machines or
PrISM systems upon which we can base reliable  predictions about the reliability
or functionality of those technologies.  Although such systems and machines have
performed  reliably  to  date  at  their  previous   installations  and  in  our
laboratory,  upon widespread commercial use they may not satisfactorily  perform
all of  their  intended  functions  or  may  not  prove  reliable  in  extensive
utilization.  Software and other  technologies  that are  incorporated  into our
products  are complex and may contain  errors,  which will only become  apparent
subsequent to widespread commercial use. Remedying such errors could require the
expenditure  of  a  substantial  amount  of  money  and  could  also  result  in
significant  delays in installing  or selling our  products,  which could have a
material  adverse  effect on us. We anticipate  that we will continue to seek to
upgrade and enhance both the hardware and software  components  of our products.
Such upgrading and  enhancement  efforts remain subject to the risks inherent in
new product development,  including  unanticipated  technical or other problems,
which  could  result  in  material  delays  in  product   commercialization   or
significantly  increased costs. Further, our EMMA systems may not satisfactorily
perform  all of its  intended  functions  or will  prove not to be  reliable  in
extensive utilization.

Competing products and services could render our technologies obsolete.

      Our EMMA  platform  will  compete  with  existing  POS  systems,  ATMs and
services offered by financial  institutions and other companies that may provide
services similar to those offered by EMMA.  Competitive  technologies may render
our products and services obsolete or less marketable.

If our EMMA Technology does not achieve market acceptance,  our business will be
harmed.

      In marketing our EMMA based  products and services,  we are  attempting to
change the  traditional  methods by which people obtain  financial  services and
access the Internet.  Accordingly, the demand for these services is subject to a
high level of  uncertainty.  If we do not  realize  market  acceptance  of these
products,  our business will be seriously harmed. The results of the use of EMMA
when  deployed  may not be well  received  and prior  results  of use may not be
indicative of future market  acceptance of our products or services.  Commercial
establishments  and individuals  may elect to utilize other methods,  which they
believe  to be less  costly or possess  other  advantages  over EMMA.  Achieving
market  acceptance for EMMA will require  substantial  marketing efforts and the
expenditure of a significant amount of funds to inform various targeted customer
groups of the perceived  benefits and cost  advantages of EMMA. To date, we have
not generated any revenue from our EMMA based technology.


                                       16
<PAGE>

Our limited marketing capabilities may hinder our growth.

      Since inception,  we have conducted only limited marketing  activities and
currently have limited marketing and technical experience and limited financial,
personnel and other resources to  independently  undertake  extensive  marketing
activities.  Accordingly,  our marketing  efforts may not result in  significant
initial or continued  market  acceptance,  may not develop a market for our EMMA
system  and  may not  succeed  in  positioning  EMMA as a  preferred  method  of
processing  "advanced  function"  transactions.  Further,  our current marketing
plans are  subject  to change  as a result  of a number  of  factors,  including
changes  in market  conditions  and the  nature of the  marketing  requested  or
provided by prospective users of EMMA.

The expansion of our EMMA-based business is uncertain.

      Our  PrISM  product  (Predictive   Identification  and  Security  Manager)
incorporates biometric and risk assessment  technologies originally developed to
secure  financial  transactions  on the EMMA  platform  to address  the need for
sophisticated personal identification at borders,  airports and other locations.
The Company has been focused on its other products and no significant  marketing
of PrISM has  occurred to date.  There can be no  assurance  that we will pursue
this emerging market, or that we will be successful if marketing efforts are the
perceived  level  of  demand  for  these  types of  products  will be as high as
anticipated.

We may not successfully compete with our competitors.

      The   financial   transaction   processing   industry   is  crowded   with
well-established  companies,  large and small.  While  financial data processing
companies such as Deluxe,  First Data,  Total Systems and others have focused on
conventional ATM and POS and related transactions, if these firms were to make a
concerted effort to develop an advanced  function system comparable to EMMA they
might prevent or reduce our ability to effectively  market EMMA. We believe that
our  development  advantage  and  proprietary  technologies  will permit EMMA to
penetrate  the market  effectively,  but there is no  assurance  that  larger or
better  established  transaction  processing  firms  will  not  offer  competing
products in the future that preempt our efforts.

      The  credit/debit  card industry and healthcare  industries are also fully
developed  markets  served by large  companies  who are better  able to finance,
develop  and  market  products  than  is  the  Company.  We  have  attempted  to
differentiate  our  products  from  those  of our  competitors  but  competitive
products  aimed at our target markets could obviate the need for our products or
severely limit our market penetration.

Changing industry trends may adversely effect our operations.

      Alternatives to the use of cash and checks,  such as credit cards and wire
transfer,  debit cards and other forms of  electronic  currency are  increasing.
Increasing use of these  alternative  forms of payment could reduce the need for
some the Company's products while increasing the need for others.


                                       17
<PAGE>

We are dependent on third-party  manufacturers  and on independent  contractors,
whose nonperformance could harm our business.

      We  are  substantially   dependent  on  the  ability  of  the  independent
contractors  we  hire  to  provide  software  engineering  and  support  for our
products.  Any contractor that we utilize or may utilize may not have sufficient
capacity to satisfy our needs during any period of sustained demand. The loss of
services of  independent  contractors  could disrupt our business.  Furthermore,
certain of our products  access  networks  which are owned and operated by third
parties.  The failure or  unavailability of these networks could have a material
adverse effect on us.

We are subject to risks relating to our international installations and sales.

      We are seeking to deploy certain products, such as debit cards, EMMA-based
systems and CoinBank  machines outside of the United States.  To the extent that
we are able to expand our operations and sales outside of the United States,  we
will be subject to the risks associated with international operations and sales,
including  economic and political  instability,  currency  fluctuations,  credit
risks,  shipping  delays,  customs  duties,  export quotas,  foreign  government
regulations and other trade restrictions,  any of which could have a significant
impact on our ability to operate  effectively outside of the United States or to
deliver such products overseas to customers on a competitive and timely basis.

Risks Related to Government Regulation and Patent and Licensing matters

Uncertainty of patent and trademark protection.

      Although  we have  been  issued  U.S.  Patents  with  respect  to our EMMA
technology,  there can be no  assurance  that these  patents  will afford us any
meaningful  protection.  We intend to rely  primarily on a combination  of trade
secrets,  technical measures,  copyright protection and nondisclosure agreements
with  our   employees  to  establish   and  protect  the  ideas,   concepts  and
documentation of software  developed by us. Such methods may not afford complete
protection,  and  there  can  be  no  assurance  that  third  parties  will  not
independently  develop such  technology or obtain access to the software we have
developed.  Although we believe that our use of the  software we  developed  and
other  software  used in our  operations  does not  infringe  upon the rights of
others, our use of the software we developed or such other software may infringe
upon the  patents or  intellectual  property  rights of others.  In the event of
infringement,  we could,  under certain  circumstances,  be required to obtain a
license or modify aspects of the software we developed or such other software or
refrain  from  using  such  software.  We may not have the  necessary  financial
resources  to  defend  any  infringement  claim  made  against  us or be able to
successfully  terminate any  infringement  in a timely manner,  upon  acceptable
terms and conditions or at all.  Failure to do any of the foregoing could have a
material  adverse  effect on us.  Moreover,  if the software we developed or any
other  software or hardware  used in our business is deemed to infringe upon the
rights of others,  we could,  under  certain  circumstances,  become  liable for
damages,  which could have a material  adverse effect on us. We received  United
States  trademark  registration  for  the  "CoinBank"  name in  September  1997.
Although we are not aware of any claims of infringement  or other  challenges to
our rights to use this  trademark,  there can be no assurance  that our marks do
not or will not infringe upon the proprietary rights of others or that our marks
would be upheld if challenged.


                                       18
<PAGE>

Risks Related to Our Management

The  success  of our  business  also  requires  that we retain  other  qualified
management personnel.

      Our  success  is also  dependent  upon  our  ability  to hire  and  retain
additional  qualified  management,  marketing,  technical,  financial  and other
personnel.  Competition for qualified personnel is intense,  and there can be no
assurance that we will be able to hire or retain additional qualified personnel.
Any inability to attract and retain  qualified  management  and other  personnel
would have a material adverse effect on us.

Our directors and officers have limited personal liability.

      Our Certificate of Incorporation includes provisions to limit, to the full
extent  permitted by Delaware  law, the personal  liability of our directors for
monetary  damages arising from a breach of their fiduciary  duties as directors.
In addition, our By-Laws require us to indemnify any of our directors, officers,
employees or agents to the full extent permitted by Delaware law. As a result of
such   provisions  in  our  Certificate  of   Incorporation   and  the  By-Laws,
securityholders  may be unable to recover  damages  against  our  directors  and
officers for actions taken by them which constitute negligence, gross negligence
or a violation of their  fiduciary  duties.  This may reduce the  likelihood  of
securityholders instituting derivative litigation against directors and officers
and may discourage or deter securityholders from suing our directors,  officers,
employees  and agents for  breaches  of their duty of care,  even though such an
action, if successful, might otherwise benefit us and our securityholders.

      The American Stock Exchange may delist our securities.

      Our common stock is listed on American  Stock  Exchange  ("AMEX")  When we
began trading on the AMEX in 2000, the exchange granted us an exemption from its
listing  requirements  in order for our common stock to be listed for trading as
we were not in compliance with the criteria for continued listing.  In November,
2003, at the request of AMEX, we submitted a plan to come into  compliance  with
the  continued  listing  requirements  by April 20,  2005.  On April 20, 2005 we
submitted  a  report  to  AMEX  stating  that  we  believed  that we had met the
requirements of the exchange and had achieved the plan's  objectives,  including
increasing  shareholder  equity to  greater  than $4  million as well as meeting
various other requirements.  AMEX subsequently confirmed our compliance with the
listing  requirements as of the date of the report,  representing the first time
since  listing on the AMEX that the Company  had  achieved  compliance  with the
continued  listing  standards.  However,  the Company must  continue to meet the
listing  requirements stated in the AMEX rules and AMEX has informed us that due
to  continuing  operating  losses it expects  us to meet the next  shareholder's
equity threshold of $6 million.  We will be providing a plan to reach the higher
equity  requirement  and while we believe  that our plan will be  acceptable  to
AMEX,  there can be no assurance  that AMEX will accept the plan or that we will
accomplish its targets. In the event that the plan is not accepted or we fail to
meet its  objectives or fail to meet future listing  requirements,  it is likely
that AMEX would initiate de-listing  procedures.  In the event that our stock is
de-listed we would be required to liquidate  certain of our Preferred  Stock. No
assurance can be given that we will be able to meet or maintain the AMEX listing
criteria or that our progress will continue to be satisfactory to the AMEX.

If our common stock is delisted from the American  Stock  Exchange,  we also are
likely to be subject to the risks relating to penny stocks.

      Our common  stock has not been traded  above $5.00 in over four years.  If
our common stock were to be delisted from trading on the American Stock Exchange
and the  trading  price of the  common  stock  remained  below  $5.00 per share,
trading in our common  stock  would be  subject to the  requirements  of certain
rules  promulgated  under the Exchange Act related to so-called penny stocks.  A
penny stock is defined generally as any non-exchange listed equity security that
has a market price of less than $5.00 per share,  subject to certain exceptions.
These rules require  additional  disclosure by broker-dealers in connection with
any trades  involving a stock defined as a penny stock and impose  various sales
practice  requirements on broker-dealers  who sell penny stocks to persons other
than established customers and accredited investors, generally institutions. The
additional  burdens  imposed  upon   broker-dealers  by  such  requirements  may
discourage broker-dealers from effecting transactions in our common stock, which
could  severely limit the market price and liquidity of our common stock and the
ability of purchasers to sell our common stock in the secondary market.


                                       19
<PAGE>

The price of our common stock has been, and may continue to be, volatile.

      The market price of our common stock has fluctuated over a wide range, and
it is likely that the price of our common  stock will  fluctuate  in the future.
Since January 1, 2004,  the sale price for our common stock,  as reported by the
American Stock  Exchange has  fluctuated  from a low of $0.60 to a high of $1.58
per share.  The market  price of our common stock could be impacted by a variety
of factors, including:

      o     announcements  of   technological   innovations  or  new  commercial
            products by us or our competitors.

      o     changes  in  government   regulation   and  policies  which  may  be
            undertaken  with respect to security  issues  related to  terrorism,
            privacy and other matters.

      o     developments  in the patents or other  proprietary  rights  owned or
            licensed by us or our competitors.

      o     matters related to our financial condition, including our ability to
            obtain necessary capital.

      o     litigation affecting us or our products.

      o     general market conditions in our industry.

      In addition,  the stock market  continues to  experience  price and volume
fluctuations.  These  fluctuations have especially  affected the market price of
many technology  companies.  Such  fluctuations have often been unrelated to the
operating  performance  of these  companies.  Nonetheless,  these  broad  market
fluctuations may negatively affect the market price of our common stock.

We have the discretion to issue additional shares of preferred stock with rights
and preferences superior to those granted to holders of our common stock.

      Our  Certificate  of  Incorporation  authorizes  our board of directors to
issue up to 1,500,000  shares of preferred  stock,  from time to time, in one or
more series.  Our board of directors is authorized,  without further approval of
the  securityholders,  to fix the dividend rights and terms,  conversion rights,
voting rights,  redemption rights and terms,  liquidation  preferences,  and any
other rights,  preferences,  privileges and restrictions  applicable to each new
series of preferred stock. The issuance of such stock could adversely affect the
voting power of the holders of common stock and,  under  certain  circumstances,
make it more difficult for a third party to gain control of us,  discourage bids
for our common  stock at a premium,  or  otherwise  adversely  affect the market
price of our common stock.

ITEM 2. DESCRIPTION OF PROPERTY

      We currently lease our Los Angeles facility from Prime Financial Partners,
Ltd, a Nevada  limited  partnership.  Our  monthly  lease  payment is $9,315 for
13,000 square feet. The lease expires in April 2010.  Bruce Korman,  our CEO, is
one of the partners of Prime Financial Partners, Ltd. Our Tomco operation leases
a 47,000  square  foot  facility  in Los  Angeles  from the owners of Tomco Auto
Products, Inc. Our monthly lease payment is $25,450. The lease expires in April,
2006.


                                       20
<PAGE>

ITEM 3. LEGAL PROCEEDINGS

      In June, 2002 we were notified that a vendor,  Kiosk Information  Systems,
Inc. ("KIS"), had obtained a judgment against us for $129,567 allegedly owed for
services  rendered in 1999,  plus interest and attorneys  fees. Upon learning of
the  judgment,  we  notified  KIS that we have never been  served with a lawsuit
related to this matter and were unaware of the  existence of the case. As of May
31, 2004, we had an accrued liability of $138,000 for this lawsuit. We had filed
a  petition  to  vacate  the  judgment,  but in  December,  2004,  KIS and  Cash
Technologies,  Inc.  agreed to a settlement  in which we paid KIS  $50,000.  The
balance of the accrued  liability of approximately  $92,752 has been written off
in the quarter ended February 28, 2005.

      In February  2003 Abraham  Mirman of Samson  Consulting  Corp.  was hired,
inter alia,  to provide  consulting  services and arrange  financing for us. The
term  of the  agreement  was 12  months  at a  monthly  cost  of  $50,000  or an
equivalent value in shares of our stock; either party had the right to terminate
after one month for any reason. Shortly thereafter,  we terminated the agreement
for Samson's failure to perform.  In July 2004, Mirman initiated  arbitration in
New York State  claiming that the agreement was  wrongfully  terminated and that
Samson was owed damages. In the arbitration Samson claimed that it was owed fees
for the entire 12 month term of the agreement  plus  attorneys  fees. We alleged
that  Samson had failed to perform  its  obligations,  had failed to provide any
promised  financing  and that Mirman had  induced us to enter into the  contract
under false and deceptive pretenses. In June 2005, an arbitrator determined that
the  agreement  had been  terminated  after two months and thus awarded  Sampson
$100,000 in unpaid fees, $21,650 in statutory interest through July 20, 2005 and
no attorney fees. We are undertaking an appeal of the  arbitrator's  decision in
New York. In addition, we have initiated a lawsuit against Mirman in California,
alleging that he failed to provide financing  promised in February,  2003. There
can be no  assurance  that our New York  appeal or  California  case will  prove
successful  and this  litigation  will  continue  to incur legal costs until its
conclusion.

      In 2001 we delivered stock certificates  representing 700,000 shares to an
escrow agent as collateral  for a loan. The loan was never  consummated,  and in
May 2001 we notified the  transfer  agent to cancel the shares.  Thereafter  the
escrow  agent,  an  attorney,  died  and we  were  never  able  to  recover  the
certificates.  In  August,  2004  it  came to our  attention  that a  party  was
attempting to transfer 450,000 of the 700,000 shares. We immediately initiated a
lawsuit in New York to prevent the transfer of the shares and have them retired.
In December, 2004, we reached a settlement in which the shares would be returned
to us without any exchange of money. We intend to similarly  pursue the recovery
of the remaining  250,000 shares,  however in the event that we cannot achieve a
satisfactory outcome in such effort, or in the event that the pending settlement
is not consummated for any reason, some or all of these shares may be treated as
outstanding and our Stockholders'  Equity line item would have to be adjusted to
reflect such additional shares.

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

      We held an annual shareholders meeting on June 20, 2005. Shareholders were
requested to vote and act upon the following several items:

1.    the election of four directors;

2.    a proposal to amend the  Certificate  of  Incorporation  to  increase  the
      authorized number of shares of common stock and preferred stock; and

3.    a proposal to amend the  Company's  1996  Employee  Stock  Option Plan and
      approve options granted thereunder; and


                                       21
<PAGE>

4.    a proposal to amend the Company's Director Option Plan; and

5.    a proposal to approve the  conversion  terms of Series C Preferred  stock;
      and

6.    a proposal to approve the  conversion  terms of Series D Preferred  stock;
      and

7.    a proposal to approve the  conversion  terms of Series F Preferred  stock;
      and

8.    a proposal to ratify the selection of Vasquez & Company, LLP.

At the annual  meeting,  shareholders  representing  an aggregate of  12,638,880
shares were present either in person or by proxy,  representing 51% of the total
outstanding.  For purpose of the  Meeting,  at the record date of May 17,  2005,
there were 17,603,031 shares issued and outstanding.


                                       22
<PAGE>

All of the  proposals  and all of the nominees for  directors  were  approved by
shareholders. The voting was as follows:

1.    Election of Directors

Name                     Votes For         Votes Against         Withheld Vote

Bruce Korman             12,595,873             --                  43,007

Richard Miller           12,601,873             --                  37,007

Robert Fagenson          12,599,873             --                  39,007

Kevin Walls              12,601,873             --                  37,007

2.    Proposal to Amend The Certificate Of Incorporation

Votes For           Votes Against      Abstentions/NonVotes     Broker-Non-Vote

8,880,143              177,345                3,600                3,577,792

3.    Proposal to Amend the Employee Option Plan

Votes For           Votes Against      Abstentions/NonVotes     Broker-Non-Vote

8,734,294              321,194                5,600                3,577,792

4.    Proposal to Amend the Director Option Plan

Votes For           Votes Against      Abstentions/NonVotes     Broker-Non-Vote

8,625,952              240,094              195,042                3,577,792

5.    Proposal to Approve Conversion Terms of Series C Preferred Stock

Votes For           Votes Against      Abstentions/NonVotes     Broker-Non-Vote

8,669,864              195,147              196,077                3,577,792

6.    Proposal to Approve Conversion Terms of Series D Preferred Stock

Votes For           Votes Against      Abstentions/NonVotes     Broker-Non-Vote

8,672,564              192,447              196,077                3,577,792

7.    Proposal to Approve Conversion Terms of Series F Preferred Stock

Votes For           Votes Against      Abstentions/NonVotes     Broker-Non-Vote

8,673,464              192,447              195,177                3,577,792

8.    Proposal to Ratify The Selection of Vasquez & Company, LLP

Votes For           Votes Against      Abstentions/NonVotes     Broker-Non-Vote

12,343,371              76,887              218,622                       --


                                       23
<PAGE>

                                     PART II

ITEM 5. MARKET OF COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

      Our  common  stock is  listed on the  American  Stock  Exchange  under the
symbol, "TQ".

The  following  is the range of closing bid prices for the common  stock for the
periods indicated below:


Year ended May 31, 2004                                   High          Low

Q1      June 1 - August 31                                1.42          0.75

Q2      September 1 - November 30                         1.15          0.88

Q3      December 1 - February 29                          0.15          0.87

Q4      March 1 - May 31                                  1.58          1.15

Year ended May 31, 2005                                   High          Low

Q1      June 1 - August 31                                1.51          1.00

Q2      September 1 - November 30                         1.50          1.11

Q3      December 1 - February 28                          1.45          1.10

Q4      March 1 - May 31                                  1.25          0.85

On  September  12,  2005  we had a high  and  low  price  of  $0.90  and  $0.88,
respectively.

Dividend Policy

      During the fiscal year ended May 31, 2005, we paid dividends in the amount
of $1,340,677 via shares of our common stock and common stock purchase warrants.
The  declaration in the future of any cash dividends on our common stock will be
at the  discretion  of our board of directors  and will depend upon a variety of
factors,  including our earnings,  if any,  capital  requirements  and financial
position,  as well as the general  economic  conditions at the time in question.
Moreover,  the payment of cash dividends on the Common stock in the future could
be limited or prohibited by the terms of financing  agreements that we may enter
into, such as a bank line of credit or an agreement  relating to the issuance of
other of our debt securities, or by the terms of any preferred stock that are or
may be issued and then outstanding.

      During  the fiscal  year  ended May 31,  2005,  we  accrued  dividends  of
$259,985 for all  Preferred  Stock  outstanding  as compared to $336,116 for the
fiscal year ended May 31, 2004. As of May 31, 2005, we have accrued dividends of
$128,589.


                                       24
<PAGE>

Recent Sales of Unregistered Securities

      In fiscal  quarter ended August 31, 2004, in a private  transaction  under
Section 4(2) of the  Securities  Act of 1933, as amended,  we sold 782 shares of
preferred  stock for gross  proceeds of $782,000.  We also issued 204,930 of our
common stock purchase warrants with an exercise price of $3.00 and an additional
286,870 with an exercise price of $5.00. All common stock purchase warrants have
an  exercise  life of five (5)  years and  there  was no  beneficial  conversion
recognized in conjunction with this transaction.

      In fiscal quarter ended November 30, 2004, in a private  transaction under
Section 4(2) of the  Securities  Act of 1933,  as amended,  we sold 50 shares of
preferred  stock for gross  proceeds  of $50,000.  We also issued  10,000 of our
common stock purchase warrants with an exercise price of $2.50 and an additional
15,000 with an exercise price of $3.50. All common stock purchase  warrants have
an exercise life of five (5) years.

      In the fiscal  quarter ended  November 30, 2004,  in private  transactions
under Section 4(2) of the Securities  Act of 1933, as amended,  the Company sold
456,206 shares of the Company's Common Stock for gross proceeds of $490,000.  In
addition the Company issued 235,263 five (5) year Common Stock purchase warrants
with exercise prices ranging from $2.00 to $3.00.

      In the fiscal  quarter ended  February 28, 2005,  in private  transactions
under Section 4(2) of the Securities  Act of 1933, as amended,  the Company sold
1,398,216 shares of the Company's Common Stock for gross proceeds of $1,506,100.
In addition  the Company  issued  816,675  five (5) year Common  Stock  purchase
warrants with exercise prices ranging from $2.00 to $5.00.

      In the fiscal  quarter ended May 31, 2005, in private  transactions  under
Section  4(2) of the  Securities  Act of 1933,  as  amended,  the  Company  sold
1,042,392 shares of the Company's Common Stock for gross proceeds of $1,095,950.
In addition  the Company  issued  621,000five  (5) year  Common  Stock  purchase
warrants with exercise prices ranging from $2.00 to $5.00.


                                       25
<PAGE>

ITEM 6. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Overview

      Cash Technologies, Inc., is a Delaware corporation, incorporated in August
1995. Unless the context otherwise requires, references herein to "we," "our" or
"Cash  Tech"  refers  to  Cash  Technologies,  Inc.,  and its  wholly-owned  and
majority-owned   subsidiaries   National  Cash  Processors,   Inc.,  a  Delaware
corporation;  CoinBank Automated Systems, Inc., a Delaware corporation; CoinBank
Automation  Handels GmbH,  organized  operating in Salzburg,  Austria,  Cintelia
Systems Inc., a Delaware corporation,CT  Holdings,  LLC., a Delaware corporation
of which we own 86.65%,Heuristic Technologies,  Inc., a Delaware company, formed
in May,  2004, to engage in healthcare  data  processing and debit card issuance
and TAP Holdings, LLC (dba Tomco Auto Products),  of which we own 89%, formed in
November, 2004 to acquire certain assets and assume certain liabilities of Tomco
Auto Products, Inc..

      Our  independent  certified  public  accountant  included  an  explanatory
paragraph  in its report  for the year ended May 31,  2005,  which  indicated  a
substantial  doubt as to the ability of us to continue as a going concern.  This
concern is primarily due to substantial  debt service  requirements  and working
capital needs. See independent certified public accountant's letter.

      Systems development expenses,  marketing expenses,  executive salaries and
general and other  administrative  costs are expected to increase as we continue
to develop our EMMA Platform.  Inasmuch as we will continue to have a high level
of operating expenses,  we will continue to be required to make certain up-front
expenditures in connection with our proposed  CoinBank  machine sales effort and
development of EMMA  transaction  processing  system.  We anticipate that losses
will  continue  for the  foreseeable  future.  Our  expenses  have  exceeded net
revenues since  inception.  For the fiscal years ended May 31, 2005 and 2004, we
sustained net income (losses) of $3.7 million and $(4.4) million, respectively.

      Gross profit for the year ended May 31, 2005, was $1,363,971,  as compared
to a $33,008 for the year ended May 31,  2004.  The increase in gross profit was
primarily attributable to the acquisition of Tomco Auto products.

      The research and development of new software  products and enhancements to
existing  software  products  were  expensed  as incurred  (and  recorded in the
consolidated  statement of operation) until  technological  feasibility has been
established.  Technological  feasibility  is  established  upon  completion of a
detailed  program  design or  working  model.  As of May 31,  2004,  capitalized
software costs amounted to $1,446,068. Technological feasibility was achieved in
September of 1999 and  commencing  October 1, 1999 all expenses  related to EMMA
software  development  had been  capitalized.  As of December 31,  2001,  we had
capitalized  $2,771,536 in development  and related costs.  The EMMA product was
available for release to the public in January 2002 thus all  development  costs
since have been  expensed  including  $155,679 for the fiscal year ended May 31,
2005.

      Amortization  of the  capitalized  software  commenced on January 1, 2002.
Amortization  had been  calculated  over a seven (7) year period for the quarter
ended  February  28,  2002  resulting  in an  amortization  expense of  $65,989.
Management changed the amortization period for capitalized software, to five (5)
years starting March 1, 2002, primarily to approximate the estimated period over
which the business brought about by the technology will expand into its expected
capacity. As of March 1, 2002, net unamortized  capitalized software amounted to
$2,705,547. The unamortized cost as of March 1, 2002 is being amortized over the
remaining revised estimated life. The change resulted in an amortization expense
of  $205,931,  an  increase  of  $40,959  ($0.01 per  share)  from the  original
estimated  amortization  period,  for the year  ended May 31,  2002.  During the
fiscal  year  ended  May 31,  2003,  we  amortized  an  additional  $559,569  of
capitalized software.


                                       26
<PAGE>

      The current EMMA asset is currently valued at $886,300, which reflects the
costs  incurred by us in  developing  the asset,  as well as the net  realizable
value  estimated in  management's  determination.  Management  believes that its
estimates reflect its ability, based upon management's internal projections,  to
obtain a recovery on the asset.  These  estimates  assume  that  recovery of the
value  of the  asset  will be  obtained  commencing  in the  early  half of 2006
calendar  year, and will be obtained fully by the end of the calendar year 2007.
These   projections  and  estimates  are  subject  to  numerous   contingencies,
including,  without limitation,  the condition of the economy and the ability of
corporate entities to purchase software such as the EMMA software.

      In its projections, management has calculated a transaction fee based upon
the use of the  technology  through  placement on mobile  trucks  operated by an
independent  third party.  The  transaction  charge for use through ATM machines
would be higher, because the services available through an ATM located in a bank
office  would be greater and the expense to us is also  greater.  The  projected
transaction fee is based upon management's discussions with potential customers,
including  bank  and  non-bank  ATM  service   providers.   Management  has  had
significant   negotiations  with  representatives  of  various  large  financial
institutions regarding the installation of EMMA based products. However, to date
we  have  not  entertained  any  definitive  agreements  with  any  institution.
According to a study  entitled  "the Use of Checks and other  Non-Cash  Payments
Instruments in the United States"  prepared by the Federal  Reserve,  there were
42.5 billion  checks  processed by financial  institutions  in the United States
during  the year 2000  about a third of which are of the type that our  products
are intended to help process.

      Much of our SG&A  costs  are  fixed in  nature,  therefore,  as  volume of
transactions and revenues increase, the SG&A does not increase proportionately.

      There can be no assurance that management's estimates will prove accurate,
and investors  should be aware that in the event these estimates are inaccurate,
a write down of all or a portion of this asset may be required.

      We record as revenue  licensing and software fees as well as coin counting
machine sales in accordance with generally accepted accounting principles.

      In 1996, we began our  development of an enhanced  version of an automated
teller machine which was  designated  the  ATM-X(TM).  The ATM-X was designed to
provide a range of  services  not  typically  offered by ATM  machines,  such as
electronic  bill payment,  instant  activated  phone cards,  event ticketing and
others.  As development  efforts  proceeded,  we discovered the need to create a
robust  transaction  processing  system  that  could  link the new ATMs with the
worldwide  financial  networks in order to provide  these new  services to ATMs,
kiosks and wireless devices.  In December of 1997, we filed a patent application
describing  the  transaction  processing  and  networking  technologies,   which
resulted in the issuance of patent,  number  6,308,887,  by the U.S.  Patent and
Trademark Office on October 30, 2001. The technology, which was later named EMMA
(E-commerce   Message   Management   Architecture),   allows  for  the  seamless
integration of conventional ATM and credit card networks with non-bank  networks
and the Internet.

      In December 1995, we commenced developing and marketing CoinBank machines,
automated  self-service coin counting and processing machines designed to accept
and count loose coins for a fee. The CoinBank machine is a freestanding  machine
that incorporates  hardware and electronic  components and certain software.  We
have developed three different CoinBank machine models,  with variations in coin
storage capacity, customer interfaces and external appearance.

      Previously our market  analysis for  self-service  coin counting  machines
indicated that retailers were demanding higher profit margins from the operation
of these  devices  than  that was being  offered  through  the  "free-placement"
business  model.  We  concluded  that  our  free-placement   program  should  be
supplanted by direct sales of these  machines to retail store chains and removed
substantially  all  of  our  free-placement  machines  from  operation.  We  are
marketing  the  machines  to  other  equipment   manufacturer   "OEM"  customers
(manufacturers of cash handling  equipment),  companies with existing  equipment
distribution  and service  channels  and  directly to  retailers  and  financial
institutions.  Although we will continue our direct sales  approach with respect
to our CoinBank  machines,  we intend to focus  substantially all of our efforts
and  operations  on  the  continued  development  and  deployment  of  the  EMMA
technology.


                                       27
<PAGE>

      Revenues  generated from CoinBank machines accounted for approximately 46%
of net  revenues  for the fiscal year ended May 31, 2004  compared to 1% for the
fiscal  year  ended  May 31,  2005,  with the  balance  involving  software  and
licensing fees from our EMMA related services and Tomco Auto Products.  Although
there can be no  assurance,  we  anticipate  that the  revenue  associated  with
processing fees derived from EMMA transaction  processing system will become the
primary source of our future revenues.

Results of Operations

Fiscal Year Ended May 31, 2005, Compared to Fiscal Year Ended May 31, 2004

      Revenues for the fiscal year ended May 31, 2005 were  $5,718,886  compared
to $80,616 for fiscal year 2004. The increase in revenue is  attributable to the
acquisition of Tomco Auto Products.

      Cost of revenues for the year ended May 31, 2005, was $4,354,915  compared
to $47,608 in fiscal year 2004.  The Increase in direct costs was  primarily the
result of the acquisition of Tomco Auto Products.

      Gross profit for the year ended May 31, 2005, was $1,363,971,  as compared
to $33,008 for the year ended May 31,  2004.  The  increase in gross  profit was
primarily attributable to the acquisition of Tomco Auto Products.

      Selling,  general and  administrative  expenses for the year ended May 31,
2005,  increased to $4,431,404 compared to expenses of $3,106,495 for the fiscal
year 2004. These expenses consisted primarily of wages (and wage related costs),
outside contractor expenses,  travel/promotional expenses, professional services
and  facilities/office  related expenses.  The increase was primarily due to the
acquisition of Tomco Auto Products.

      Research and development  expenses for the fiscal year ended May 31, 2005,
was $155,679  compared to $120,000  for the fiscal year ended May 31, 2004.  The
increase was the result of additional programmer costs incurred.

      Impairment  on  CoinBank  machines  for the fiscal  ended May 31, 2004 was
$154,140.  This inventory  impairment charge was recognized to reflect a decline
in the market value of CoinBank's CB IV machines.

      Depreciation and amortization expenses remained  approximately the same at
$563,336 during fiscal 2005 from $563,982 in fiscal 2004.

      Other  Income  for the  fiscal  year  ended  May 31,  2005 was  $2,235,059
compared  to  $40,000  for the 2004  period.  Income  from  forgiveness  of debt
compromised of  forgiveness  of certain debt and  settlement of certain  pending
lawsuits of the Company and its subsidiaries.

      Interest  expense  for the  fiscal  years 2005 and 2004 was  $380,134  and
$553,767,   respectively.   The  decrease  was  primarily  attributable  to  the
conversion of a majority of the convertible debt in the 2005 period.

      Income Taxes for the fiscal year ended May 31, 2005 was $4,800 compared to
$2,400  for the fiscal  year ended May 31,  2004.  The  increase  was due to the
formation new subsidiaries.

      Minority Interest for the fiscal year ended May 31, 2005 and May 31, 2004,
was  $657,867  and  $(45,244),  respectively.  The drastic  increase in minority
interest was directly  related to the minority  interest of $686,615  associated
with the  extraordinary  gain allocated to the minority  interest  holder of Tap
holdings, LLC.


                                       28
<PAGE>

      Extraordinary  gain for the fiscal year ended May 31, 2005 was  $6,249,951
resulting from the acquisition of Tomco Auto Products.

      As a result of the foregoing,  net income (losses) for the years ended May
31, 2005 and 2004 were $3,655,760 and $(4,382,532), respectively.


                                       29
<PAGE>

Fiscal Year Ended May 31, 2004, Compared to Fiscal Year Ended May 31, 2003

      Gross revenues  include  equipment sales and licensing fees for the fiscal
year ended 2004 and  amounted to $80,616  compared  to $267,576  for fiscal year
2003.  The  increase in revenue is  attributable  to an increase in software and
licensing fees.

      Cost of revenues for the year ended May 31, 2004, was $47,608  compared to
$193,632 in fiscal year 2003.  The  decrease in direct costs was  primarily  the
result of product sales mix.

      Gross profit for the year ended May 31, 2004, was $33,008,  as compared to
a $73,944 for the year ended May 31,  2003.  The  decrease  in gross  profit was
primarily  attributable  to a decrease in the volume of software  and  licensing
fees which carry higher margins.

      Selling,  general and  administrative  expenses for the year ended May 31,
2004,  increased to $3,106,495 compared to expenses of $2,487,714 for the fiscal
year 2003. These expenses consisted primarily of wages (and wage related costs),
outside contractor expenses,  travel/promotional expenses, professional services
and facilities/office related expenses. These expenses increase in fiscal '04 is
attributable to recognizing  $140,771 of fees due to the American Stock Exchange
as well as additional  consulting fees of $107,916.  The stock exchange fees are
now being accrued on a monthly basis.

      Depreciation and amortization expenses decreased to $563,982 during fiscal
2004 from $584,731 in fiscal 2003. The decrease was primarily  attributable to a
decrease  in  depreciation  expense  recognized  during the 2004  fiscal year of
$4,214 compared to $24,963 in 2003.

      Interest  expense  for the  fiscal  years 2004 and 2003 was  $553,767  and
$584,731,  respectively.  The decrease was primarily attributable to a reduction
in interest  recognized on the secured  investor  notes.  Several of these notes
were converted to common stock during the 2004 fiscal year.

      Minority Interest for the fiscal year ended May 31, 2004 and May 31, 2003,
was $45,244 and zero,  respectively.  The drastic increase in minority  interest
was directly related to the formation of CT Holdings, LLC.

      As a result of the foregoing,  net losses for the years ended May 31, 2004
and 2003 were $4,382,532 and $4,048,345, respectively.

Liquidity And Capital Resources

      Our capital  requirements  have been and will continue to be  significant,
and our cash  requirements  have exceeded cash flow from operations.  At May 31,
2005,  we had a working  capital of  $1,867,989  compared  to a working  capital
deficit of $9,354,394 at May 31, 2004. At May 31, 2005, we had a cash balance of
only  approximately  $163,627.  We are in immediate need of substantial  working
capital to continue our business and  operations.  To date, we have been funding
our operations through the issuance of equity in private placement  transactions
with existing stockholders or persons with whom we have relationships, including
affiliates of  stockholders.  There can be no assurance  that we will be able to
continue to raise required working capital in this or any other manner.

      Since  inception,  we have  satisfied  our  working  capital  requirements
through limited revenues  generated from operations,  the issuance of equity and
debt  securities,   borrowing  under  a  line  of  credit  and  loans  from  our
securityholders.   Our  independent  certified  public  accountant  included  an
explanatory  paragraph  in its  report for the year  ended May 31,  2005,  which
indicated a substantial  doubt as to our ability to continue as a going concern.
This concern is primarily  due to  substantial  debt  service  requirements  and
working capital needs.


                                       30
<PAGE>

      Net cash used in operating  activities  was $4,088,596 for the fiscal year
ended May 31,  2005  compared  to  $2,972,207  for the fiscal year ended May 31,
2004.  The  increase of Net cash used by operating  activities,  during the 2005
period was primarily due to the effects of the decreases in accrued  interest of
$176,801 and accrued liabilities of $957,107.

      Net cash used in  investing  activities  for the fiscal year ended May 31,
2005,  was  $2,353,217  as  compared to $5,266 for the fiscal year ended May 31,
2004.  The  increase  in used in  investing  activities  for 2005 was  primarily
attributable to increases in acquisition of subsidiary of $2,328,597.

      Net cash  provided by financing  activities  for the fiscal year ended May
31, 2005, was $6,584,589 as compared to $2,996,550 for the fiscal year ended May
31, 2004. The increase in Net cash provided by financing activities for 2005 was
primarily  attributable  to  increases  in proceeds  from the issuance of common
stock of $1,00,940 ,  $1,883,674  from the  proceeds  from  short-term  debt and
$707,000 in proceeds from the issuance of preferred stock

      In 1997, we entered into a credit agreement with G.E. Capital Corporation,
or G.E. Capital,  pursuant to which, we borrowed  $5,500,000 for the purchase of
CoinBank component  equipment,  working capital and general corporate  purposes.
Due to our inability to repay G.E.  Capital on the original  terms, on September
29, 2000 we entered into the first of several loan  modifications  with G.E. The
most recent modification requires  interest-only  payments at a rate of 9.5% and
the entire unpaid  balance is due at maturity in November,  2005. We do not have
sufficient  capital to repay this debt.  We intend to seek to enter into another
modification  with G.E.  Capital,  but there can be no assurance that we will be
able to do so.  As of May 31,  2005,  we owed  G.E.  Capital  $3,683,045,  which
includes the principal,  financing fees and unpaid interest.  As of September10,
2005, the loan was current.

      In January 2000, we completed a private placement  offering of convertible
notes  and  warrants  under  Section  4(2) of the  Securities  Act of 1933.  The
offering  consisted  of units,  each  unit  comprised  of a secured  convertible
promissory note in the principal amount of $50,000, bearing interest at the rate
of 10% per annum and Series B  Redeemable  Warrants to purchase  5,000 shares of
common stock.  GunnAllen  Financial,  Inc., one of our investment bankers and an
underwriter in our initial public  offering,  was engaged as placement agent for
this offering.  We received gross proceeds from this offering of $3,362,000 from
the sale of 67.2 Units.  As a result of this  offering,  we issued  notes in the
aggregate  principal  amount of  $3,362,000  and 336,200  Series B Common  Stock
Purchase Warrants The notes were originally convertible into our Common Stock at
the conversion  rate of $9.50 per share.  The Series B Warrants were  originally
exercisable  at a price of $13.00 per share.  The notes were  originally due and
payable on July 31, 2001. The notes were secured by a first priority lien on all
of our assets.

      Since July 31, 2001, some of the notes have been in default, and some have
been restructured.  Under the restructuring, the notes were extended for two (2)
years to July 2003, the noteholders  agreed to surrender all old warrants priced
at $13.50 per share to receive two  replacement  warrants  for every old warrant
surrendered. The new warrants were vested immediately, have a life of five years
and were  exercisable at $1.35 through  December 31, 2001, $2.20 through January
15,  2002 and $4.50  thereafter.  In August,  2003,  the  Company  proposed  the
conversion to equity of the secured  convertible  debt to the  noteholders.  The
proposed terms included  reducing the conversion price of the notes to $2.50 per
share and the exercise  price of the warrants to $0.65.  As of May 31, 2005,  we
still  owed  $389,141  in  principal   and  interest  to  the  seven   remaining
noteholders.

      In November 2005, TAP Holdings, LLC. established a line of credit with BFI
Business  Finance.  The  maximum  amount  available  under the line of credit is
$2,000,000,  limited to 60% of eligible accounts receivable plus 60% of eligible
inventory up to $1,000,000,  less any availability  reserves,  as defined in the
loan  agreement.  Interest is payable  monthly at 4.0% per annum above the prime
interest rate (10% at May 31, 2005).  Any  outstanding  balance under the credit
line is due November 5, 2006. The line of credit is collateralized by a security
interest in the TAP's accounts receivable,  inventories, property and equipment,
and  certain  other  assets.  TAP must  also  adhere  to  covenant  limitations,
conditions and restrictions as set forth in the loan and security agreement.  As
of May 31,  2005,  there  was  $1,936,318  outstanding  on this  line of  credit
approximately $63,000 available under its line of credit.


                                       31
<PAGE>

      Subsequent  to May 31, 2005,  the Company was in an  overadvance  position
with its Secured  Lender.  This is a technical  breach and/or  default under the
agreement. As of the issuance of these statements, the Company has not cured the
breach and/or default.  The Secured Lender has not issued a waiver nor exercised
any of its rights under the Loan and Security Agreement.

      In Fiscal  quarter ended August 31, 2004, in a private  transaction  under
Section 4(2) of the  Securities  Act of 1933, as amended,  we sold 782 shares of
preferred  stock for gross  proceeds of $782,000.  We also issued 204,930 of our
common stock purchase warrants with an exercise price of $3.00 and an additional
286,870 with an exercise price of $5.00. All common stock purchase warrants have
an exercise life of five years and there was no beneficial conversion recognized
in conjunction with this transaction.

      In fiscal quarter ended November 30, 2004, in a private  transaction under
Section 4(2) of the  Securities  Act of 1933,  as amended,  we sold 50 shares of
preferred  stock for gross  proceeds  of $50,000.  We also issued  10,000 of our
common stock purchase warrants with an exercise price of $2.50 and an additional
15,000 with an exercise price of $3.50. All common stock purchase  warrants have
an exercise life of five years and there was no beneficial conversion recognized
in conjunction with this transaction.

      In the fiscal  quarter ended  November 30, 2004,  in private  transactions
under Section 4(2) of the Securities  Act of 1933, as amended,  the Company sold
456,206 shares of the Company's Common Stock for gross proceeds of $490,000.  In
addition the Company  issued  235,263 five year Common Stock  purchase  warrants
with exercise prices ranging from $2.00 to $3.00.

      In the fiscal  quarter ended  February 28, 2005,  in private  transactions
under Section 4(2) of the Securities  Act of 1933, as amended,  the Company sold
1,398,216 shares of the Company's Common Stock for gross proceeds of $1,506,100.
In addition the Company issued 816,675 five year Common Stock purchase  warrants
with exercise prices ranging from $2.00 to $5.00.

      In the fiscal  quarter ended May 31, 2005, in private  transactions  under
Section  4(2) of the  Securities  Act of 1933,  as  amended,  the  Company  sold
1,042,392 shares of the Company's Common Stock for gross proceeds of $1,095,950.
In addition the Company issued 621,000 five year Common Stock purchase  warrants
with exercise prices ranging from $2.00 to $5.00.


                                       32
<PAGE>

SIGNIFICANT ACCOUNTING POLICIES

      We have designated our CoinBank machines and parts as being held for sale.
CoinBank  machines  held  for  sale  are  recorded  at the  lower of the cost or
estimated  fair  value,  which  includes  an estimate of the costs to sell these
assets. The estimated fair value is based on information  including recent sales
of CoinBank machines and estimated  present value techniques.  During the fourth
quarter of fiscal year 2004,  management  evaluated  the  estimated  fair market
value  of  these  machines  and  subsequently  recorded  an  impairment  loss of
$154,140.  As of May 31, 2005,  the carrying  value of the CoinBank  machines is
$638,283.

      Property and equipment are stated at cost less  accumulated  depreciation.
Provision for depreciation is computed using the  straight-line  method over the
estimated useful lives of the related asset,  ranging from three to seven years.
Amortization  of  leasehold  improvements  is computed  using the  straight-line
method over the shorter of the estimated life of the asset or the remaining term
of the lease.

      We evaluate long-lived assets for impairment whenever events or changes in
circumstances  indicate  that  the  carrying  value  of  an  asset  may  not  be
recoverable.  If the  estimated  future  cash flows  (un-discounted  and without
interest  charges) from the use of an asset is less than the carrying  value,  a
write-down  would be recorded to reduce the related asset to its estimated  fair
value.

      The research and development of new software  products and enhancements to
existing  software  products  were  expensed  as incurred  (and  recorded in the
consolidated  statement of operation) until  technological  feasibility has been
established.  Technological  feasibility  is  established  upon  completion of a
detailed  program  design or  working  model.  As of May 31,  2002,  capitalized
software  costs  amounted to $2,771,536 of which  $408,787 and  $1,201,535  were
capitalized  in  fiscal  years  ended  May  31,  2002  and  2001,  respectively.
Technological  feasibility was achieved in September of 1999 and from that point
forward all costs related to the EMMA software development had been capitalized.
As of December  31, 2001,  we had  capitalized  $2,771,536  in  development  and
related  costs.  The EMMA  product  was  available  for release to the public in
January 2002 thus all development costs since have been expensed.

      Amortization  commenced on January 1, 2002.  The  amortization  was over a
seven-year  period for the  quarter  ended  February  28, 2002  resulting  in an
amortization  expense  of  $65,989.  The  amortization  period  for  capitalized
software  was changed to five (5) years  starting  March 1, 2002,  primarily  to
approximate  the estimated  period over which the business  brought about by the
technology  will expand into its  expected  capacity.  As of March 1, 2002,  net
unamortized capitalized software amounted to $2,705,547. The unamortized cost as
of March 1, 2002 is being amortized over the remaining  revised  estimated life.
The change  resulted  in an  amortization  expense of  $205,931,  an increase of
$40,959 ($0.01 per share) from the original estimated  amortization  period, for
the year ended May 31, 2002.

NEW ACCOUNTING PRONOUNCEMENTS

      In December 2004, FASB issued SFAS No. 123 (revised), Accounting for Stock
Based Compensation,  which supersedes  Accounting Principles Board (APB) Opinion
No. 25, Accounting for Stock Issued to Employees, and its related implementation
guidance.  This  Statement  requires  a public  entity  to  measure  the cost of
employee services received in exchange for an award of equity  instruments based
on the grant date fair value of the award (with  limited  exceptions);  the fair
value of that award  will be  remeasured  subsequently  at each  reporting  date
through the settlement  date. This Statement is effective as of the beginning of
the first interim or annual reporting period that begins after December 15, 2005
for small business issuers.  We apply APB Opinion No. 25 in accounting for stock
based  compensation  (options).  The amended  provisions  of SFAS No. 123 had no
material effect on our consolidated  financial  position or results of operation
for the fiscal year ended May 31, 2005.


                                       33
<PAGE>

      In December  2004,  the FASB issued  SFAS No.  151,  Inventory  costs - an
amendment  of ARB  No.  43,  Chapter  4,  "Inventory  Pricing"  to  clarify  the
accounting  for abnormal  amounts of idel facility  expense,  freight,  handling
costs,  and  wasted  material  (spoilage).  Paragraph  5 of ARB 43,  Chapter  4,
previously  stated  that ". . . under  some  circumstances,  items  such as idle
facility expense,  excessive spoilage,  double freight, and rehandling costs may
be so abnormal as to require  treatment as current period  charges.  . . ." This
Statement  requires  that those items be recognized  as  current-period  charges
regardless  of whether they meet the  criterion of "so  abnormal."  In addition,
this Statement  requires that  allocation of fixed  production  overheads to the
costs  of  conversion  be  based  on  the  normal  capacity  of  the  production
facilities.

      The  provisions of this Statement  shall be effective for inventory  costs
incurred during fiscal years beginning after June 15, 2005. Earlier  application
is permitted for inventory  costs incurred  during fiscal years  beginning after
the date this Statement is issued.  The  provisions of this  Statement  shall be
applied prospectively.

      We considering the provisions of SFAS No. 151 and its  prospective  effect
on inventory costs incurred during periods beginning after the date of adoption.

      In December  2004,  FASB issued SFAS No.  153,  Exchanges  of  Nonmonetary
Assets an amendment of APB Opinion No. 29. SFAS 153 addresses the measurement of
exchanges of  nonmonetary  assets.  It eliminates  the exception from fair value
measurement for nonmonetary  exchanges of similar productive assets in paragraph
21(b) of APB  Opinion  No. 29,  Accounting  for  Nonmonetary  Transactions,  and
replaces  it  with an  exception  for  exchanges  that  do not  have  commercial
substance.  This Statement specifies that a nonmonetary  exchange has commercial
substance  if the  future  cash  flows of the  entity  are  expected  to  change
significantly as a result of the exchange. SFAS 153 is effective for nonmonetary
asset  exchanges  occurring in fiscal periods  beginning after June 15, 2005. We
are  considering  the  provisions of SFAS No. 153 and its effect on  nonmonetary
exchanges in the future.

      In May 2005,  FASB  issued  SFAS No.  154,  Accounting  Changes  and Error
Corrections,  a replacement of APB Opinion No. 20 and FASB Statement No. 3. SFAS
154  applies  to all  voluntary  accounting  principle  changes  as  well as the
accounting  for and  reporting  of  such  changes.  SFAS  154 is  effective  for
accounting  changes and  corrections  of errors made in fiscal  years  beginning
after December 15, 2005.

      SFAS  154  requires   voluntary   changes  in   accounting   principle  be
retrospectively  applied to financial  statements  from previous  periods unless
such application is  impracticable.  Changes in depreciation,  amortization,  or
depletion  for  long-lived,  non-financial  assets  accounted for as a change in
accounting estimate that is affected by a change in accounting principle,  under
the newly issued standard.

      SFAS 154 replaces APB Opinion No. 20 and SFAS 3. SFAS 154 carries  forward
many  provisions  of  Opinion  20 and  SFAS 3  without  change  including  those
provisions  related to reporting a change in  accounting  estimate,  a change in
reporting  entity,  correction of an error and reporting  accounting  changes in
interim financial statements.  The FASB decided to completely replace Opinion 20
and SFAS 3 rather than amending them in keeping to the goal of simplifying  U.S.
GAAP. The provisions of SFAS No. 154 are not expected to have a material  effect
on the Company's consolidated financial position or results of operation.


                                       34
<PAGE>

                  INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Cash Technologies, Inc.
Los Angeles, California

We  have  audited  the   accompanying   consolidated   balance  sheets  of  Cash
Technologies, Inc. and Subsidiaries (the "Company") as of May 31, 2005 and 2004,
and the related  consolidated  statements of  operations,  stockholders'  equity
(deficiency)  and cash  flows  for the  years  then  ended.  These  consolidated
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board. Those standards require that we plan and perform the
audit to obtain  reasonable  assurance about whether the consolidated  financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence supporting the amounts and disclosures in the consolidated
financial statements. An audit also includes assessing the accounting principles
used and  significant  estimates made by  management,  as well as evaluating the
overall financial statement  presentation.  We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the financial position of Cash Technologies,
Inc.  and  Subsidiaries  as of May 31,  2005 and 2004 and the  results  of their
operations  and  cash  flows  for the  years  then  ended,  in  conformity  with
accounting principles generally accepted in the United States of America.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern.  As discussed in Note 1(a) to
the  consolidated  financial  statements,  the Company has suffered  significant
recurring losses that raise substantial doubt about its ability to continue as a
going concern.  Management's plans in regard to these matters are also described
in  Note  1(a).  The  consolidated  financial  statements  do  not  include  any
adjustments that might result from the outcome of the uncertainty.


                                             /s/ VASQUEZ & Company LLP

Los Angeles, California
August 17, 2005.


                                       35
<PAGE>

                    CASH TECHNOLOGIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                MAY 31, 2005      MAY 31, 2004
                                                                               --------------    --------------
<S>                                                                            <C>               <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents                                                      $      163,627    $       20,951
Accounts receivable                                                                 1,734,616             2,383
Prepaid expenses and other current assets                                             749,954             4,000
Other receivable (net of allowance $21,000)                                            28,035            28,035
Inventory (net of allowance $1,180,000) (Note 2)                                    8,508,323                --
                                                                               --------------    --------------
Total Current Assets                                                               11,184,555            55,369

CoinBank machines held for sale (Note 1(n))                                           638,283           675,439

PROPERTY AND EQUIPMENT (net) (Note 3)                                                  51,084            30,104

CAPITALIZED SOFTWARE COSTS (Note 1(4))                                                886,300         1,446,068

CDHC PREFERRED STOCK (Note 10)                                                        900,901                --

OTHER ASSETS                                                                          449,745            93,822
                                                                               --------------    --------------

TOTAL ASSETS                                                                   $   14,110,868    $    2,300,802
                                                                               ==============    ==============


LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

CURRENT LIABILITIES:
Current maturities of Notes Payable (Note 4)                                   $    5,654,098    $    4,478,997
Due to Officers and Directors                                                           8,915             9,415
Convertible debt (Note 5)                                                             472,975           751,566
Due to Shareholders (Note 5)                                                          270,750            70,250
Accounts payable                                                                    1,767,042         1,210,382
Accrued liabilities                                                                 1,014,197         1,482,072
Bankoverdraft                                                                              --           197,800
Dividend payable                                                                      128,589         1,209,281
                                                                               --------------    --------------

Total Current Liabilities                                                           9,316,566         9,409,763

Long-Term Notes Payable (Note 6)                                                       13,807                --
                                                                               --------------    --------------

TOTAL LIABILITIES                                                                   9,330,373         9,409,763
                                                                               --------------    --------------

COMMITMENTS & CONTINGENCIES (Note 7)                                                       --                --

MINORITY INTEREST (Note 14)                                                           634,666           (23,200)

STOCKHOLDERS' EQUITY (DEFICIENCY): (Note 6)

Cumulative Redeemable Preferred Stock, 1,000,000 shares authorized,
657,093 and 646,091  shares issued and outstanding at May 31, 2005 and 2004         4,195,812         1,883,688

Common Stock, $0.01 par value, 20,000,000 shares authorized,
18,321,490 and 14,358,446 issued and outstanding at May 31, 2005 and 2004             183,300           143,669

Additional Paid-In-Capital                                                         36,652,496        30,292,720
Accumulated Deficit                                                               (36,885,779)      (39,405,838)
                                                                               --------------    --------------

Total stockholders' deficiency                                                      4,145,828        (7,085,761)
                                                                               --------------    --------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)                        $   14,110,868    $    2,300,802
                                                                               ==============    ==============
</TABLE>

                 See notes to consolidated financial statements


                                       36
<PAGE>

                    CASH TECHNOLOGIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                  FISCAL YEAR ENDED
                                                                                     ENDED MAY 31,
                                                                                 2005             2004
                                                                            --------------    --------------
<S>                                                                         <C>               <C>
NET REVENUES                                                                $    5,718,886    $       80,616
COST OF REVENUES                                                                 4,354,915            47,608
                                                                            --------------    --------------

GROSS PROFIT (LOSS)                                                              1,363,971            33,008
                                                                            --------------    --------------

SELLING, GENERAL, & ADMINISTRATIVE EXPENSE                                       4,431,404         3,106,495
RESEARCH AND DEVELOPMENT                                                           155,679           120,000
IMPAIRMENT ON COIN MACHINES                                                             --           154,140
DEPRECIATION & AMORTIZATION EXPENSE                                                563,336           563,982
                                                                            --------------    --------------

OPERATING LOSS                                                                  (3,786,449)       (3,911,609)
                                                                            --------------    --------------

OTHER INCOME (Note 14)                                                          (2,235,059)          (40,000)

INTEREST EXPENSE                                                                   380,134           553,767
                                                                            --------------    --------------

LOSS BEFORE INCOME TAXES                                                        (1,931,524)       (4,425,376)
                                                                            --------------    --------------

INCOME TAXES                                                                         4,800             2,400

MINORITY INTEREST (Note 13)                                                       (657,867)           45,244

EXTRAORDINARY GAIN (Note 15)                                                    (6,249,951)               --

NET INCOME (LOSS)                                                           $    3,655,760    $   (4,382,532)
                                                                            --------------    --------------

Dividends & deemed dividends                                                $    1,135,700    $      716,200

Net income (loss) allocable to common
shareholders                                                                $    2,520,060    $   (5,098,732)

Basic and diluted net income (loss) per share before extraordinary income   $        (0.24)   $        (0.44)

Basic and diluted net income (loss) per share extraordinary income          $    0.40/0.26    $           --

Basic and diluted net income (loss) per share                               $    0.16/0.10    $        (0.44)

Basic and diluted weighted average
shares of common stock outstanding                                   15,647,493/24,368,938        11,628,865
                                                                            ==============    ==============
</TABLE>

                 See notes to consolidated financial statements


                                       37
<PAGE>

                    CASH TECHNOLOGIES, INC. AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY
                 Fiscal Year ended May 31, 2004 and May 31, 2005

<TABLE>
<CAPTION>
                                                                                                                       Total
                                    Common Stock                Preferred Stock         Additional                  Stockholders'
                              ------------------------       ----------------------      Paid-in      Accumulated      Equity
                                 Shares         Amount        Shares       Amount        Capital        Deficit     (Deficiency)
                              --------------------------------------------------------------------------------------------------
<S>                           <C>              <C>           <C>          <C>           <C>           <C>             <C>
Balance May 31, 2003           8,511,253        85,191       645,966      1,758,688     22,753,598    (34,307,055)    (9,709,578)
                              ==================================================================================================

Common stock payments
to consultants                   646,418         6,464            --             --        634,595             --        641,059

Beneficial conversion
of warrants                           --            --            --             --        380,084       (380,084)            --

Unit purchase -
common stock                   2,979,757        29,795            --             --      2,150,697             --      2,180,492

Unit purchase -
preferred stock                       --            --           125        125,000             --             --        125,000

Conversion of notes
payable to common stock        1,510,814        15,108            --             --      3,758,941             --      3,774,049

Conversion of notes
payable to common stock
purchase warrants                     --            --            --             --        127,981             --        127,981

Conversion of warrants
to common stock                  550,440         5,504            --             --        352,981             --        358,485

Misc                                  --            --            --             --         (2,261)           (51)        (2,312)

Dividends paid with
common stock                     159,764         1,607            --             --        136,104             --        137,711

Dividends accrued on
preferred stock                       --            --            --             --             --       (336,116)      (336,116)

Net income (loss)                     --            --            --             --             --     (4,382,532)    (4,382,532)

Balance May 31, 2004          14,358,446   $   143,669       646,091    $ 1,883,688     30,292,720    (39,405,838)    (7,085,761)
                              ==================================================================================================

Common stock payments
to consultants                   353,334         3,534            --             --        379,800             --        383,334

Common stock warrant
payments to consultants               --            --            --             --         71,636             --         71,636

Unit purchase -
common stock                   2,943,077        29,430            --             --      2,922,148             --      2,951,578

Beneficial conversion
of warrants                           --            --            --             --        875,716       (875,716)            --

Unit purchase -
preferred stock                       --            --         1,007      2,324,624             --             --      2,324,624

Conversion of warrants
to common stock                  279,682         2,798            --             --        185,817             --        188,615

Conversion of preferred
stock to common stock              7,812            78            (5)       (12,500)        12,422             --             --

Conversion of notes
payable to common stock          165,461         1,654            --             --        248,373             --        250,027

Investment in subsidiary              --            --            --             --        323,433             --        323,433

Misc                               1,890            --         1,890

Dividends paid with
common stock                     213,678         2,137            --             --      1,338,541             --      1,340,678

Dividends accrued on
preferred stock                       --            --            --             --             --       (259,985)      (259,985)

Net income (loss)                     --            --            --             --             --      3,655,760      3,655,760

--------------------------------------------------------------------------------------------------------------------------------
Balanace for May 31, 2005     18,321,490   $   183,300       647,093    $ 4,195,812     36,652,496    (36,885,779)     4,145,828
================================================================================================================================
</TABLE>


                                       38
<PAGE>

                    CASH TECHNOLOGIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASHFLOWS

<TABLE>
<CAPTION>
                                                                FISCAL YEAR ENDED MAY 31
                                                                 2005              2004
                                                            --------------    --------------
<S>                                                         <C>               <C>
OPERATING ACTIVITIES:
Net loss                                                    $    3,655,760    $   (4,382,532)
Adjustments to reconcile net loss to net cash used by
operating activities:
Extraordinary Gain                                              (5,589,956)
Minority interest                                                   (2,129)          (45,244)
Amortization of capitalized software                               559,768           559,768
Noncash deemed interest expense                                         --                --
Gain on forgiveness of debt                                     (2,235,059)
Noncash compensation expense                                            --           270,663
Depreciation expense                                                66,235             4,213
Impairment of CoinBank machines held for sale                           --           154,140

Changes in operating assets and liabilities:

Account receivable                                                 (77,059)              101
CoinBank machines held for sale                                     23,942            32,511
Prepaid expenses and other current assets                          (11,071)               57
Other assets                                                        14,120           (24,635)
Accounts payable                                                   330,223           148,212
Accrued interest                                                    93,553           270,354
Accrued expenses and other current liabilities                    (916,922)           40,185
                                                            --------------    --------------

Net cash used in operating activities                           (4,088,596)       (2,972,207)
                                                            --------------    --------------

INVESTING ACTIVITIES:

Net acquisition cost of Tomco                                   (2,328,597)               --
Purchase of property and equipment                                 (24,720)           (5,266)
                                                            --------------    --------------

Net cash provided by (used in) investing activities             (2,353,317)           (5,266)
                                                            --------------    --------------

FINANCING ACTIVITIES:

Proceeds from conversion of warrants                               188,615           357,785
Proceeds from the issuance of warrants                                  --            75,000
Net proceeds from issuance of preferred stock                      832,000           125,000
Proceeds from short-term debt                                    2,069,926           186,255
Proceeds from equity holder                                        200,758                --
Repayments on short-term debt                                     (258,585)         (298,425)
Proceeds from sale of common stock                               3,551,875         2,550,935
                                                            --------------    --------------

Net cash provided by financing activities                        6,584,589         2,996,550
                                                            --------------    --------------

CHANGE IN CASH AND CASH EQUIVALENTS                                142,676            19,077

Cash and Cash Equivalents, Beginning of Year                        20,951             1,874
                                                            --------------    --------------

Cash and Cash Equivalents, End of Year                      $      163,627    $       20,951
                                                            ==============    ==============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

              Income taxes                                  $        4,800    $        2,400

SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONS

      Conversion from convertible debt to common stock      $      250,024    $    3,774,049
      Conversion of preferred stock into common stock       $       12,500    $           --
      Impairment of CoinBank machines                       $           --    $      154,140
      Issuance of common stock for services performed       $      390,000    $      641,059
      Dividends declared on preferred stock                 $      259,985    $      336,116
      Dividends paid on preferred stock with common stock   $    1,340,677    $      137,711
      Deemed dividend on warrants issued                    $      875,715    $      380,084
      Conversion of shareholder warrants                    $      620,535    $      357,781

      Total assets purchased                                $   10,798,988    $           --
      Total liabilities assumed                             $    2,299,037    $           --
                                                            --------------
      Net assets purchased                                  $    8,499,951    $           --
      Bank debt assumed                                     $   (1,600,000)   $           --
      Cash paid as investment in subsidiary                 $     (650,000)   $           --
                                                            --------------
      Extraordinary gain                                    $    6,249,951    $           --
                                                            ==============
</TABLE>

                 See notes to consolidated financial statements


                                       39
<PAGE>

                    CASH TECHNOLOGIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.    SUMMARY OF  SIGNIFICANT  ACCOUNTING  POLICIES,  ORGANIZATION  AND BASIS OF
      PRESENTATION

      (a)   "Going Concern"--The  accompanying consolidated financial statements
            have  been  prepared  assuming  that  we  will  continue  as a going
            concern.  We have  significant  losses from operations and have used
            significant  amounts  of cash for  operations  during  the last five
            years.  Although as of May 31, 2005, we have both  positive  working
            capital and net equity  operating  losses have continued  throughout
            2005.

            In view of the financial  deficiencies,  there is substantial  doubt
            about our ability to continue as a going concern. The recoverability
            of recorded assets and  satisfaction of the liabilities is dependent
            on our continued  operations,  which is in turn  dependent  upon our
            ability to meet our financing  requirements on a continuing basis as
            well  as  to  succeed  in  our  future  operations.   The  financial
            statements   do  not  include  any   adjustments   relating  to  the
            recoverability and classification of recorded assets or liabilities.

            Due to the unfavorable  results of operations and cash flows, we are
            in  the  process  of   negotiating   payment   terms  with   vendors
            representing a significant  portion of our accounts  payable and are
            managing  the  payments  of  the  remaining  accounts  payable  on a
            case-by-case  basis.  Management  is also  taking  certain  steps to
            obtain  additional equity financing to improve our operating results
            and financial position.

            We plan to  increase  revenues  and  reduce  our  costs  in order to
            generate  sufficient  positive cash flow beginning in second quarter
            of fiscal year 2006. While we believe that our financing and revenue
            generation plans will be successful, no assurances can be given that
            we will be successful and that we will continue as a going concern.

      (b)   Basis  of  Consolidation--The  accompanying  consolidated  financial
            statements  include the accounts of Cash  Technologies,  Inc. ( "CTI
            "),  a  Delaware  corporation,  and our  wholly-owned  subsidiaries,
            National  Cash  Processors,  Inc.  (  "NCP  "),  Cintelia,  Inc,  CT
            Holdings, LLC, Heuristic Technologies,  Inc., TAP Holdings, LLC. and
            CoinBank  Automated  Systems  (  "CAS  ")  together  the  "Company."
            CoinBank  Automation  Handels  GmbH,  Salzburg,  Austria  ("CoinBank
            Europe" or "CBE") was treated as a division  of  CoinBank  Automated
            Systems  during  this  period  and was  consolidated  into  CoinBank
            Automated Systems.  All significant  inter-company  transactions and
            accounts have been eliminated in consolidation. CTI was incorporated
            in August 1995. In January 1996, a few of our  affiliates  exchanged
            their stock in NCP as part of a combination of entities under common
            control.  CAS was incorporated in November 1995 Cintelia in December
            2001, CT Holdings,  LLC in June 2002, Heuristic  Technologies in May
            2004 and Tap  Holdings in November  2004.  As of May 31, 2005 we own
            86.35% of CT Holdings, LLC and 89% of TAP Holdings, LLC.

      (c)   Business--The  principal  business  activity  of each  entity  is as
            follows:  CTI is  currently  undergoing  a  development  process  of
            Electronic Message Management  Architecture  Transaction  Processing
            System  (EMMA);  NCP  is  a  full-service   cash-processing   entity
            providing sorting, counting and wrapping functions to cash-intensive
            businesses;  CAS offers  self-service  coin-counting  machines.  CBE
            functions as a European  sales office for us and Cintelia was formed
            to develop and market  software  applications in relation to airport
            and other security through the utilization of biometrics.

            On November 5, 2004 TAP  Holdings,  LLC (dba Tomco Auto  Products or
            the "Company") acquired  substantially all of the assets and assumed
            certain  liabilities  of Tomco Auto  Products,  Inc.  The Company is
            engaged  primarily  in the  remanufacture  and sale of  carburetors,
            throttle body  injection  systems and diesel  injection  pumps,  for
            domestic and foreign  automobiles  and light  trucks,  to automotive
            warehouse distributors and retailers throughout the United States.


                                       40
<PAGE>

            The Company sells units for automobiles and trucks manufactured from
            1932  through  1995.  In order to maintain its high order fill rate,
            which  exceeds  industry  averages,  the  Company  maintains a large
            carburetor  core  inventory.  Although  certain cores remain on hand
            longer than a normal  operating  cycle,  the Company  considers  the
            entire core inventory  necessary to maintain a high level of service
            to its  customers  along  with  keeping  a broad  range  of  product
            offerings available.

      (d)   Fiscal  Year--CTI's fiscal year ended May 31, 2005 but TAP Holdings,
            LLC's  fiscal  year ends on the last Sunday in May,  which  normally
            results in a 52 or 53 week year.  Since the Company began operations
            on November 5, 2004 the fiscal 2005 year consists of only 32 weeks.

      (e)   Revenue  Recognition--The Company recognizes sales when products are
            shipped.  Net sales reflect reductions for cores returned for credit
            and other returns and allowances.

      (f)   Use  of  Estimates--The   preparation  of  financial  statements  in
            conformity with generally accepted  accounting  principles  requires
            management  to  make  estimates  and  assumptions  that  affect  the
            reported  amounts  of assets  and  liabilities  and  disclosures  of
            contingent  assets  and  liabilities  at the  date of the  financial
            statements  and reported  amounts of revenue and expense  during the
            reporting period. Actual results could differ from those estimates.

      (g)   Advertising  Costs--The Company expenses  advertising costs when the
            advertising takes place.

      (h)   Warranty Policy--The Company offers a limited ninety-day warranty on
            products  sold.  Warranty  costs  relating to this limited  warranty
            policy are  estimated  and recorded as warranty  obligations  at the
            time of sale based on historical return rates.

      (i)   Shipping  and  Handling  Fees  and  Costs--In  September  2000,  the
            Emerging  Issues  Task  Force  issued  EITF  00-10,  Accounting  for
            Shipping and  Handling  Fees and Costs  ("EITF  00-10").  EITF 00-10
            requires  shipping  and  handling  fees  billed to  customers  to be
            classified  as revenue and shipping and handling  costs to be either
            classified  as  cost of  sales  or  disclosed  in the  notes  to the
            financial  statements.  The Company  includes  shipping and handling
            fees billed to customers in net sales.  Shipping and handling  costs
            associated  with outbound  freight are included in selling  expenses
            and totaled $232,199 for the year ended May 31, 2005.

      (j)   Cash  Equivalents--We  consider all  investments  purchased  with an
            original maturity of three months or less to be cash equivalents.

      (k)   Cash--The  Company  maintains  its cash in bank accounts  which,  at
            times,  may exceed  federally  insured  limits.  The Company has not
            experienced  any  losses in such  accounts  and  believes  it is not
            exposed to any significant risk on cash.

      (l)   Trade & Other  Receivables--Receivables  are recorded when billed or
            accrued and  represent  claims  against  third  parties that will be
            settled  in cash.  The  carrying  value of  receivables,  net of the
            allowance  for doubtful  accounts,  represents  their  estimated net
            realizable  value. The allowance for doubtful  accounts is estimated
            based on historical collection trends, type of customer,  the age of
            outstanding receivables and existing economic conditions.  If events
            or  changes  in  circumstances  indicate  that  specific  receivable
            balances  may be  impaired,  further  consideration  is given to the
            collectibility  of those  balances  and the  allowance  is  adjusted
            accordingly.  Past due  receivable  balances  are  written-off  when
            collection  efforts have been  unsuccessful in collecting the amount
            due. As of May 31, 2005 the Company had an  Allowance  for Bad Debts
            of $50,000.


                                       41
<PAGE>

      (m)   Inventories--The   Company's   inventory  consists  of  used  cores,
            replacement  component  parts,  and  carburetors and diesel pumps in
            process or completed.  The inventory  values are based on historical
            standards less obsolescence and acquisition reserves.  Standards are
            reviewed  and  adjusted,  if  necessary,  at fiscal  year  end.  The
            standards are valued on a lower of cost or market  basis.  As of May
            31, 2005 an obsolescence reserve of $1,180,000 has been established.
            The reserve against the standard cost, which had been established by
            the seller.

      (n)   CoinBank  Machines  Held  for  Sale--CTI  has  designated   CoinBank
            machines and parts as being held for sale.  CoinBank  machines  held
            for sale are recorded at the lower of cost or estimated  fair value,
            which  includes an estimate of the costs to sell these  assets.  The
            estimated fair value is based on information  including recent sales
            of CoinBank machines and estimated present value techniques.  During
            the fourth  quarter of fiscal year 2004,  management  evaluated  the
            estimated  fair  market  value of these  machines  and  subsequently
            recorded an  impairment  loss of $154,140.  As of May 31, 2005,  the
            carrying value of the CoinBank machines is $638,283.

      (o)   Property and  Equipment--Property  and  equipment are stated at cost
            less  accumulated  depreciation.  The provision for  depreciation is
            computed using the  straight-line  method over the estimated  useful
            lives of the  related  asset,  ranging  from  three to seven  years.
            Amortization  of  leasehold   improvements  is  computed  using  the
            straight-line  method over the shorter of the estimated  life of the
            asset or the remaining term of the lease.

      (p)   Impairment of Long-Lived Assets--We have evaluated long-lived assets
            for impairment whenever events or changes in circumstances  indicate
            that the carrying value of an asset may not be  recoverable.  If the
            estimated  future cash flows  (un-discounted  and  without  interest
            charges) from the use of an asset is less than the carrying value, a
            write-down  would be  recorded  to reduce the  related  asset to its
            estimated fair value.

      (q)   Other  Assets--Other  Assets are  carried at cost and are  amortized
            using a  straight-line  method.  The  organization  costs  are being
            amortized  over  five  years  and the  deferred  loan fees are being
            amortized over the life of the loan.

      (r)   Income Taxes--We have filed a consolidated federal income tax return
            and a combined  California  franchise  tax return.  Deferred  income
            taxes have been  recognized  for temporary  differences  between the
            financial  reporting and income tax bases of assets and liabilities,
            which are based on the  enacted  tax rates  expected to be in effect
            when  such  amounts  are  expected  to be  realized  or  settled.  A
            valuation allowance is established when necessary to reduce deferred
            income tax assets to the amount expected to be realized.  Income tax
            expense is the tax payable or refundable  for the year plus or minus
            the change during the year in deferred income taxes.

      (s)   Employee  Stock  Option--We  have  adopted  statement  of  financial
            accounting   standard   No.   123,   "Accounting   for   Stock-Based
            Compensation"(SFAS No. 123), as of June 1, 1998, which establishes a
            fair value method of accounting for stock-based  compensation plans.
            In  accordance  with SFAS No.  123,  We have  chosen to  continue to
            account for stock-based  compensation  utilizing the intrinsic value
            method  prescribed  in APB 25.  Accordingly,  compensation  cost for
            stock  option is measured as the excess,  if any, of the fair market
            price of our stock at the date of grant over the amount an  employee
            must pay to acquire the stock.

            Also,  in accordance  with SFAS No. 123, we have  provided  footnote
            disclosure with respect to stock-based  employee  compensation.  The
            cost of stock-based  employee  compensation is measured at the grant
            date on the value of the award and is  recognized  over the  service
            period.  The value of the  stock-based  award is determined  using a
            pricing model whereby  compensation cost in excess of the fair value
            of the stock as  determined  by the model at the grant date or other
            measurement date over the amount an employee must pay to acquire the
            stock.


                                       42
<PAGE>

      (t)   Basic and  Diluted  Net Income  (Loss) per Common  Share--Basic  and
            diluted net income  (loss) per common share is based on the weighted
            average  number of common shares  outstanding  during the respective
            periods.  Statement  of  Financial  Accounting  Standards  No.  128,
            "Earnings  per Share"  issued by the FASB is effective for financial
            statements  with  fiscal  years and  interim  periods  ending  after
            December 15, 1997.  SFAS 128 provides for the  calculation  of Basic
            and Diluted earnings per share. Basic earnings per share includes no
            dilution  and is  computed by dividing  income  available  to common
            stockholders  by  the  weighted  average  number  of  common  shares
            outstanding during the periods presented. Diluted earnings per share
            reflect the potential dilution of securities that could share in the
            earnings, such as stock options, warrants or convertible debentures.
            Stock options and warrants  outstanding during the periods presented
            were not  included in diluted  earnings per share since their effect
            would be anti-dilutive.

      (u)   Fair Value of Financial  Instruments--Financial  instruments consist
            of  accounts  receivable  and  payable,  which  have  a  fair  value
            approximating the book value due to their short-term  nature;  notes
            payable for which fair value approximates book value due to interest
            rates on long-term debt  approximate  current  interest  rates,  and
            amounts  due to  stockholders  have  a fair  value  that  cannot  be
            determined due to the related-party nature of the transactions.

      (v)   Concentration   of   Suppliers--We   are  dependent  on  third-party
            manufacturers for the production of the components incorporated into
            CoinBank  machines and currently  purchase  substantially all of our
            requirements  of  specially  designed  or modified  components  from
            single source  suppliers.  We purchased  certain of these components
            pursuant  to open  purchase  orders  placed from time to time in the
            ordinary  course of  business.  Although we  currently  believe that
            alternative  sources for these  components  are  readily  available,
            failure or delay by any  manufacturer in providing  components to us
            on  commercially  reasonable  terms,  or at all,  in the  absence of
            readily available alternative sources, could result in interruptions
            in our ability to continue the assembly and installation of CoinBank
            machines and have a material adverse effect on our operations.

      (w)   Capitalized Software -- The research and development of new software
            products  and  enhancements  to  existing   software  products  were
            expensed as incurred (and recorded in the consolidated  statement of
            operation)  until  technological  feasibility has been  established.
            Technological  feasibility  is  established  upon  completion  of  a
            detailed  program  design  or  working  model.  As of May 31,  2004,
            capitalized  software costs  amounted to  $1,446,068.  Technological
            feasibility was achieved in September of 1999 and commencing October
            1, 1999 all expenses  related to EMMA software  development had been
            capitalized.  As of December 31, 2001, we had capitalized $2,771,536
            in development and related costs. The EMMA product was available for
            release  to the public in January  2002 thus all  development  costs
            since have been  expensed  including  $155,679  for the fiscal  year
            ended May 31, 2005.

            Amortization  of the  capitalized  software  commenced on January 1,
            2002.  Amortization had been calculated over a seven (7) year period
            for the quarter ended February 28, 2002 resulting in an amortization
            expense of $65,989.  Management changed the amortization  period for
            capitalized  software,  to five (5) years  starting  March 1,  2002,
            primarily  to  approximate  the  estimated  period  over  which  the
            business  brought  about  by the  technology  will  expand  into its
            expected capacity. As of March 1, 2002, net unamortized  capitalized
            software amounted to $2,705,547. The unamortized cost as of March 1,
            2002 is being amortized over the remaining  revised  estimated life.
            The change  resulted  in an  amortization  expense of  $205,931,  an
            increase of $40,959  ($0.01 per share) from the  original  estimated
            amortization  period,  for the year ended May 31,  2002.  During the
            fiscal year ended May 31, 2005 we amortized an  additional  $559,768
            of capitalized software.


                                       43
<PAGE>

            As of May 31,  2005,  the current  EMMA asset is valued at $886,300,
            which reflects the costs incurred by us in developing the asset,  as
            well  as  the  net  realizable   value   estimated  in  management's
            determination.  Management  believes that our estimates  reflect our
            ability,  based upon management's internal projections,  to obtain a
            recovery on the asset.  These estimates  assume that recovery of the
            value of the asset will be obtained  commencing  in the earlier half
            of 2006 calendar  year, and will be obtained fully by the end of the
            calendar year 2007.  These  projections and estimates are subject to
            numerous contingencies, including, without limitation, the condition
            of the  economy and the  ability of  corporate  entities to purchase
            software such as the EMMA software.

            In our  projections,  management  has  calculated a transaction  fee
            based upon the use of the  technology  through  placement  on mobile
            trucks  operated by an  independent  third  party.  The  transaction
            charge for use through  ATM  machines  would be higher,  because the
            services  available through an ATM located in a bank office would be
            greater  and  the  expense  to us is  also  greater.  The  projected
            transaction  fee  is  based  upon   management's   discussions  with
            potential  customers,   including  bank  and  non-bank  ATM  service
            providers.   Management  has  had  significant   negotiations   with
            representatives  of various large financial  institutions  regarding
            the  installation of EMMA based products.  However,  to date we have
            not  entertained  any definitive  agreements  with any  institution.
            According to a study  entitled "the Use of Checks and other Non-Cash
            Payments  Instruments in the United States"  prepared by the Federal
            Reserve,  there were 42.5  billion  checks  processed  by  financial
            institutions in the United States during the year 2000 about a third
            of which  are of the type that our  products  are  intended  to help
            process.

            Much of our SG&A costs are fixed in nature,  therefore, as volume of
            transactions  and  revenues  increase,  the SG&A  does not  increase
            proportionately.

            There can be no assurance  that  management's  estimates  will prove
            accurate,  and  investors  should be aware  that in the event  these
            estimates are  inaccurate,  a write down of all or a portion of this
            asset may be required.

      (x)   Concentration of Credit Risk--Financial instruments that potentially
            subject us to a concentration  of credit risk consists  primarily of
            accounts receivable.  The receivables are unsecured,  and we perform
            ongoing credit evaluations of our customers.

      (y)   Reclassification--Certain  reclassifications  have  been made to the
            May 31,  2004  financial  statements  to conform to the May 31, 2005
            presentation.

NOTE 2 - INVENTORIES

                  As of May 31, 2005 inventories consist of the following:

                  Finished Goods                                $  1,492,422
                  Work in Process                                    700,158
                  Cores                                            6,288,459
                  Component Parts                                  1,207,284
                                                                ------------

                        Inventories at Standard Cost               9,688,323

                  Provision for Obsolescence                      (1,180,000)
                                                                ------------

                        Net Carrying Value of Inventories       $  8,508,323


                                       44
<PAGE>

NOTE 3 - PROPERTY AND EQUIPMENT

      Property and equipment consist of the following:

                                                       2005             2004
                                                    ----------       ----------
Transportation Equipment.......................     $   15,561               --
Computer equipment.............................        145,483          166,757
Office Equipment...............................          2,061               --
Other equipment ...............................         32,135           32,135
                                                    ----------       ----------
      Total Property and Equipment.............     $  195,239       $  196,892
      Less Accumulated Depreciation............        144,155          166,788
                                                    ----------       ----------
                                                    $   51,084       $   30,104
                                                    ==========       ==========

NOTE 4 - NOTES PAYABLE

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
                                                            Additions             Adjustments
              Loan                  Balance 6/1/04      6/1/04 to 5/31/05      6/1/04 to 5/31/05       Balance 5/31/05
------------------------------     ----------------    -------------------    -------------------     -----------------
<S>                                <C>                 <C>                    <C>                     <C>
GE Capital Principal               $      3,288,465    $                --    $                --     $       3,288,465

GE Capital Interest                         677,746                317,847               (601,013)              394,580

BFI Business Finance                             --              3,883,515             (1,947,197)            1,936,318

Notes Payable - TAP                              --                 34,735                     --                34,735

Notes Payable - Kiosk                        77,852                     --                (77,852)                   --

Notes Payable - CAS Europe                  434,934                     --               (434,934)                   --
                                   ----------------    -------------------    -------------------     -----------------

Totals                             $      4,478,997    $         4,236,097    $        (3,060,996)    $       5,654,098
-----------------------------------------------------------------------------------------------------------------------
</TABLE>


                                       45
<PAGE>

In 1997, we entered into a credit  agreement with G.E.
Capital  Corporation,  or G.E.  Capital,  pursuant  to
which  we  borrowed  $5,500,000  for the  purchase  of
CoinBank  component  equipment,  working  capital  and
general  corporate  purposes.  Due to our inability to
repay G.E. Capital on the original terms, on September
29,  2000 we entered  into the first of  several  loan
modifications  with G.E. The most recent  modification
requires  interest-only payments at a rate of 9.5% and
the  entire  unpaid  balance  is  due at  maturity  in
November,  2005. We do not have sufficient  capital to
repay  this  debt.  We  intend  to seek to enter  into
another  modification with G.E. Capital, but there can
be no  assurance  that we will be able to do so. As of
May 31, 2005, we owed G.E. Capital  $3,683,045,  which
includes  the  principal,  financing  fees and  unpaid
interest..............................................   $3,683,045   $3,966,211

The maximum amount  available under the line of credit
is  $2,000,000,  limited to 60% of  eligible  accounts
receivable  plus  60%  of  eligible  inventory  up  to
$1,000,000, less any availability reserves, as defined
in the loan agreement.  Interest is payable monthly at
4.0% per annum above the prime  interest  rate (10% at
May 31,  2005).  Any  outstanding  balance  under  the
credit  line is due  November  5, 2006.  As of May 31,
2005, there was $1,936,318 outstanding on this line of
credit approximately  $63,000 available under its line
of credit.............................................

The line of credit  is  collateralized  by a  security
interest  in  the   Company's   accounts   receivable,
inventories, property and equipment, and certain other
assets.  The  Company  must also  adhere  to  covenant
limitations,  conditions and restrictions as set forth
in the loan and security agreement.

Subsequent  to May 31,  2005,  the  Company  was in an
overadvance  position with its Secured Lender. This is
a technical breach and/or default under the agreement.
As of the  issuance of these  statements,  the Company
has not cured the breach and/or  default.  The Secured
Lender has not issued a waiver  nor  exercised  any of
its    rights    under    the   Loan   and    Security
Agreement.......                                          1,936,318           --

In March  2001,  the  European  division  of  CoinBank
obtained a  short-term  line of credit  which has been
used  for  working  capital  and  development  of  the
European    version   of   the   CoinBank    machines.
Furthermore,  the bank as collateral is holding 50,000
shares of our common stock ...........................           --      434,934

At May 31, 2005 TAP Holdings,  LLC. had a loan payable
outstanding  to the Seller of Tomco Auto  Products  in
the amount of $34,735.................................       34,375           --


                          46
<PAGE>

Enhancement  work done on coin  machines was converted
into a note payable with the vendor.  The loan matured
on  February  2001.  The  interest  rate is at 10% and
interest  payments  are made on a  monthly  basis.  In
June,  2002  we were  notified  that a  vendor,  Kiosk
Information  Systems,  Inc.  ("KIS"),  had  obtained a
judgment  against us for $129,567  allegedly  owed for
services rendered in 1999, plus interest and attorneys
fees.  Upon learning of the judgment,  we notified KIS
that we have never been served with a lawsuit  related
to this matter and were  unaware of the  existence  of
the case. Subsequent settlement  negotiations resulted
in a tentative  settlement  agreement with KIS on July
7,  2003  which had not been  performed  as of May 31,
2004. Also as of May 31, 2004, Cash  Technologies  has
an accrued liability of $138,000 for this lawsuit. The
Company had filed a petition  to vacate the  judgment,
but In August,  2004, KIS and Cash Technologies,  Inc.
verbally   agreed  to  a  settlement   in  which  Cash
Technologies  would pay KIS $50,000 and the balance of
the accrued liability of $88,000 has be written off in
the second quarter of 2005 ...........................           --       77,852

                                                          5,654,098    4,478,997

      Less current portion............................    5,654,098    4,478,997
                                                         -----------------------

Long term maturity....................................   $       --   $       --
                                                         ==========   ==========

NOTE 5 - CONVERTIBLE DEBT

<TABLE>
<CAPTION>
                                                    Additions     Adjustments
                                                    6-1-04 to      6-1-04 to
         Description             Bal. @ 6/01/04      5/31/05        5/31/05      Bal. @ 5/31/05
         ------------            --------------    ----------     -----------    --------------
<S>                               <C>             <C>             <C>             <C>
Convertible Debt--Principal LT    $   552,018              --     $  (217,006)    $   335,012

Convertible Debt--Interest            199,548          67,706        (129,291)        137,963

Convertible Debt--Stockholders         70,750         200,000              --         270,750
                                  -----------     -----------     -----------     -----------

         Totals                   $   822,316     $   267,706     $  (346,297)    $   743,725
</TABLE>

In January 2000, we completed a private placement  offering of convertible notes
and warrants  under  Section 4(2) of the  Securities  Act of 1933.  The offering
consisted of units, each unit comprised of a secured convertible promissory note
in the  principal  amount of  $50,000,  bearing  interest at the rate of 10% per
annum and Series B Redeemable Warrants to purchase 5,000 shares of common stock.
GunnAllen  Financial,  Inc., one of our investment bankers and an underwriter in
our initial public  offering,  was engaged as placement agent for this offering.
We received  gross  proceeds from this  offering of $3,362,000  from the sale of
67.2  Units.  As a result of this  offering,  we issued  notes in the  aggregate
principal  amount of  $3,362,000  and  336,200  Series B common  stock  Purchase
Warrants  The notes were  originally  convertible  into our common  stock at the
conversion  rate of $9.50 per  share.  The  Series B  Warrants  were  originally
exercisable  at a price of $13.00 per share.  The notes were  originally due and
payable on July 31, 2001. The notes were secured by a first priority lien on all
of our assets.

Since July 31, 2001, some of the notes have been in default,  and some have been
restructured. Under the restructuring, the notes were extended for two (2) years
to July 2003,  the  noteholders  agreed to surrender all old warrants  priced at
$13.50  per  share to  receive 2  replacement  warrants  for  every old  warrant
surrendered. The new warrants were vested immediately,  have a life of fie years
and were  exercisable at $1.35 through  December 31, 2001, $2.20 through January
15,  2002 and $4.50  thereafter.  As of February  28,  2003 we had  restructured
$2,587,000 of the notes,  representing  thirty-five (35) of the forty-eight (48)
noteholders,   or  approximately  77%  of  the  total  dollar  amount  of  notes
outstanding.  As part of the restructuring  process we reclassified  $339,722 of
interest accrued as part of the reissued notes. During the fiscal year ended May
31,  2004,  noteholders  representing  $3,774,049  of  principal  and  interest,
approximately  83% of the total value of notes,  have converted their notes into
1,510,814  shares of our common stock at $2.50 per share.  We are in discussions
with the  remaining  noteholders.  As of May 31, 2005, we still owed $389,141 in
principal and interest to the remaining  noteholders.  There can be no assurance
that the remaining  noteholders  will not declare an event of default and demand
immediate  payment or seek to attach our assets,  including our EMMA technology.
(See Risk Factors).

In  May  2003  we  completed  a  private  placement  offering  with  one  of our
stockholders  consisting of convertible notes and warrants under Section 4(2) of
the Securities Act of 1933. The offering  consisted of an unsecured  convertible
promissory note in the principal amount of $50,000, bearing interest at the rate
of 5% per annum and  redeemable  warrants to purchase  100,000  shares of common
stock.  The note is convertible  into our common stock at the conversion rate of
$0.50 per share.  The Warrants are exercisable at a price of $1.00 per share. We
also  reduced  the  exercise  price of  8,000  Series  C  warrants  owned by the
stockholder from $2.50 to $0.25 per share. The note is due and payable on May 2,
2008. A deemed  dividend  expense of $25,331 was recognized in conjunction  with
the warrants offered in this placement.


                                       47
<PAGE>

In  May  2003  we  completed  a  private  placement  offering  with  one  of our
stockholders  consisting of convertible notes and warrants under Section 4(2) of
the Securities Act of 1933. The offering  consisted of an unsecured  convertible
promissory note in the principal amount of $20,750, bearing interest at the rate
of 5% per annum and  redeemable  warrants  to purchase  30,000  shares of common
stock.  The note is convertible  into our common stock at the conversion rate of
$0.50 per share.  The Warrants are exercisable at a price of $0.65 per share. We
also  reduced  the  exercise  price of  45,000  Series B  warrants  owned by the
stockholder  from $4.50 to $0.65 per share which were converted  immediately for
gross  proceeds to us of $29,250.  The note is due and payable on May 8, 2008. A
deemed  dividend  expense of $25,901  was  recognized  in  conjunction  with the
warrants offered in this placement.

NOTE 6 - LONG TERM DEBT

      As of May 31, 2005 long term debt consists of the following:

      Note Payable - Truck (a)                                $  18,542
      Note Payable - Unsecured (b)                               30,000
                                                              ---------
                                                                 48,542
     Less: Current Maturities                                    34,735
                                                              ---------

     Total                                                    $  13,807

      (a) The note, which is  collateralized  by a security interest in a truck,
      is payable in monthly  installments of $450,  including  interest at 7.49%
      per annum.

      (b) The note,  which is unsecured,  matures in February,  2006.  The note,
      which is payable to a broker for services in connection with the Company's
      line of credit,  accrues interest at 3% per annum above the prime interest
      rate (9% as of May 31, 2005) and is subordinated to the Company's  Secured
      Lender.


                                       48
<PAGE>

NOTE 7 - MAJOR CUSTOMERS AND SUPPLIERS

During the fiscal  year  ended May 31,  2005 the TAP had sales to two  customers
that  accounted  for 67.9% of net sales.  As of May 31, 2005 the amount due from
these two customers accounted for 78% of the outstanding accounts receivable.

TAP purchased 89% of its component parts inventory from two suppliers during the
fiscal  year  ended  May 31,  2005.  These  suppliers  accounted  for 11% of the
accounts payable balance as of May 31, 2005.

NOTE 8 - INCOME TAXES

As of May  31,  2005,  we had  available  federal  net  operating  loss  ("NOL")
carry-forwards  that approximate $33.6 million and may be applied against future
taxable income through tax year 2024.  State NOL  carry-forward is approximately
$20.1  million and expire  through tax year 2011. A 100%  valuation  reserve has
been set up to entirely  offset any  deferred  tax asset since it is more likely
than not that the deffered tax asset will not be realized.

As of May  31,  2004,  we had  available  federal  net  operating  loss  ("NOL")
carry-forwards  that approximate $30.8 million and may be applied against future
taxable income through tax year 2024.  State NOL  carry-forward is approximately
$18.5  million and expire  through tax year 2010. A 100%  valuation  reserve has
been set up to entirely  offset any  deferred  tax asset since it is more likely
than not that the deffered tax asset will not be realized.

NOTE 9 - STOCKHOLDERS' EQUITY

On June 1, 2003, in a private  transaction  under Section 4(2) of the Securities
Act of 1933,  as  amended,  we sold 1 unit at an  aggregate  of  $50,000  of our
securities  to a  stockholder.  The unit  comprised of 100,000  shares of common
stock. There were no warrants awarded in conjunction with this offering.

On June 2, 2003, in a private  transaction  under Section 4(2) of the Securities
Act of 1933,  as  amended,  we sold 1 unit at an  aggregate  of  $25,000  of our
securities to a  stockholder.  The unit comprised of (i) 38,462 shares of common
stock and (ii);  15,000  common stock  purchase  warrants.  The warrants have an
exercise price of $1.00 per share and are exercisable for five years.

On June 12, 2003, in a private  transaction under Section 4(2) of the Securities
Act of 1933,  as  amended,  we sold 1 unit at an  aggregate  of  $75,000  of our
securities to a stockholder.  The unit comprised of (i) 150,000 shares of Common
stock and (ii);  75,000  common stock  purchase  warrants.  The warrants have an
exercise price of $1.00 per share and are exercisable for five years.

In July, 2003, in a private transaction under Section 4(2) of the Securities Act
of 1933,  as  amended,  we sold 26  units  at an  aggregate  of  $10,000  of our
securities  to seven  stockholders.  The unit  comprised of (i) 15,385 shares of
common stock and (ii); 5,000 common stock purchase  warrants.  The warrants have
an exercise price of $1.00 per share and are exercisable for five years.

On July 30, 2003, in a private  transaction under Section 4(2) of the Securities
Act of 1933,  as  amended,  we sold 1 unit at an  aggregate  of  $50,000  of our
securities  to a  stockholder.  The unit  comprised  of 76,924  shares of common
stock. There were no warrants awarded in conjunction with this offering.

On  September  2,  2003,  in a private  transaction  under  Section  4(2) of the
Securities  Act of 1933,  as  amended,  we sold five  units at an  aggregate  of
$25,000 of our securities to 2 European stockholders.  The unit comprised of (i)
38,462 shares of common stock and (ii);  12,821 common stock purchase  warrants.
We received gross proceeds of $125,000 in conjunction  with this placement.  The
warrants have an exercise price of $1.00 per share and are  exercisable for five
years.


                                       49
<PAGE>

In September 2003, in a private transaction under Section 4(2) of the Securities
Act of 1933,  as  amended,  we sold 1 unit at an  aggregate  of  $50,000  of our
securities. The unit comprised of 62,500 shares of common stock.

In October 2003, in a private  transaction  under Section 4(2) of the Securities
Act of 1933,  as  amended,  we sold  69,000  shares of our common  stock to four
investors for $52,440.

In October 2003, in a private  transaction  under Section 4(2) of the Securities
Act of 1933,  as  amended,  we sold 1 unit at an  aggregate  of  $25,000  of our
securities.  The unit  comprised  of (i) 31,250  shares of common stock and (ii)
10,417 common stock  purchase  warrants.  The warrants have an exercise price of
$1.00 per share and are exercisable for five years.

In October 2003, in a private  transaction  under Section 4(2) of the Securities
Act of 1933,  as  amended,  we sold  25,000  shares  of our  common  stock to an
individual for $20,000.

In October 2003, in a private  transaction  under Section 4(2) of the Securities
Act of 1933,  as  amended,  we sold  10,000  shares  of our  common  stock to an
individual for $8,000.

In November 2003, in a private  transaction under Section 4(2) of the Securities
Act of 1933,  as  amended,  we sold 1 unit at an  aggregate  of  $70,000  of our
securities.  The unit  comprised  of (i) 87,500  shares of common stock and (ii)
20,000 common stock  purchase  warrants.  The warrants have an exercise price of
$1.00 per share and are exercisable for five years.

In February 2004, we awarded 75,000 common stock purchase warrants to two of our
independent  contractors.  These  shares of our  common  stock  were  awarded as
payment for services performed in the amount of $75,000.

In February, 2004, in a private transaction under Section 4(2) of the Securities
Act of 1933, as amended,  we issued 504,475 shares of our common stock for gross
proceeds of $428,800.  The sale price was $0.85 per share and we paid $48,500 in
commissions.

In February 2004, we issued dividends on the Series E Redeemable Preferred Stock
of $9,000.  The preferred  stockholders were awarded 11,700 shares of our common
stock in-lieu of cash.

In March,  2004, in a private  transaction  under Section 4(2) of the Securities
Act of 1933,  as amended,  we sold 741,181  shares of our common stock for gross
proceeds of $650,000. The sale price was in each transaction $0.85 per share and
we paid $63,500 in commissions.

In March 2004, one noteholder  exercised  20,000 common stock purchase  warrants
from which we received gross proceeds of $13,000.

In March 2004,  noteholders  owed $167,354 of principal  and interest  converted
their notes into 66,942 shares of our common stock at $2.50 per share. The terms
of the conversion  were the same as in the past. We are in discussions  with the
remaining noteholders.

In April 2004, in a private transaction under Section 4(2) of the Securities Act
of 1933, as amended,  we sold 104,093  shares of common stock for gross proceeds
of $95,000. The sale price was in each transaction $0.85 per share.

We issued 646,418 shares of common stock for  $1.00-$1.35  per share for various
consulting services during the fiscal year ended May 31, 2004


                                       50
<PAGE>

During the fiscal year ended May 31, 2004, various individuals converted 550,440
common stock purchase warrants into shares of our common stock.

In May 2004, in a private  transaction  under Section 4(2) of the Securities Act
of 1933, as amended, we sold 125 shares of preferred stock for gross proceeds of
$125,000. The sale price for this transition was $1.35 a share.

In May 2004, we issued  dividends on the Series E Redeemable  Preferred Stock of
$110,711.  The preferred  stockholders were awarded 116,996 shares of our common
stock in-lieu of cash.

In fiscal quarter ended August 31, 2004, in a private  transaction under Section
4(2) of the Securities Act of 1933, as amended,  we sold 782 shares of preferred
stock for gross proceeds of $782,000. We also issued 204,930 of our common stock
purchase warrants with an exercise price of $3.00 and an additional 286,870 with
an exercise price of $5.00. All common stock purchase  warrants have an exercise
life  of five  years  and  there  was no  beneficial  conversion  recognized  in
conjunction with this transaction.

In fiscal quarter ended August 31, 2004, in a private  transaction under Section
4(2) of the Securities Act of 1933, as amended,  we sold 782 shares of preferred
stock for gross proceeds of $782,000. We also issued 204,930 of our common stock
purchase warrants with an exercise price of $3.00 and an additional 286,870 with
an exercise price of $5.00. All common stock purchase  warrants have an exercise
life  of five  years  and  there  was no  beneficial  conversion  recognized  in
conjunction with this transaction.

In fiscal  quarter  ended  November 30,  2004,  in a private  transaction  under
Section 4(2) of the  Securities  Act of 1933,  as amended,  we sold 50 shares of
preferred  stock for gross  proceeds  of $50,000.  We also issued  10,000 of our
common stock purchase warrants with an exercise price of $2.50 and an additional
15,000 with an exercise price of $3.50. All common stock purchase  warrants have
an exercise life of five years and there was no beneficial conversion recognized
in conjunction with this transaction.

In the fiscal  quarter ended  November 30, 2004, in private  transactions  under
Section 4(2) of the Securities Act of 1933, as amended, the Company sold 456,206
shares of the Company's Common Stock for gross proceeds of $490,000. In addition
the  Company  issued  235,263  five year Common  Stock  purchase  warrants  with
exercise prices ranging from $2.00 to $3.00.

In the fiscal  quarter ended  February 28, 2005, in private  transactions  under
Section  4(2) of the  Securities  Act of 1933,  as  amended,  the  Company  sold
1,398,216 shares of the Company's Common Stock for gross proceeds of $1,506,100.
In addition the Company issued 816,675 five year Common Stock purchase  warrants
with exercise prices ranging from $2.00 to $5.00.

In the fiscal quarter ended May 31, 2005, in private  transactions under Section
4(2) of the  Securities  Act of 1933,  as amended,  the Company  sold  1,042,392
shares of the  Company's  Common  Stock for gross  proceeds  of  $1,095,950.  In
addition the Company  issued  621,000 five year Common Stock  purchase  warrants
with exercise prices ranging from $2.00 to $5.00.

On April 18, 2005,  the Company agreed to pay 50 shares with a $500,000 value of
Series I  Preferred  Stock to  ClaimRemedi,  Inc.,  a  vendor  of the  Company's
Heuristic  Technologies,  Inc.  subsidiary,  in exchange  for a discount  not to
exceed  $1,000,000  on  future  transaction  fees  to be paid  by  Heuristic  to
ClaimRemedi under the existing license agreement between the two companies.  The
Series I Preferred Stock shall be convertible to common stock at any time at the
then current market price of the Company's  common stock,  with a floor of $1.00
per share and a ceiling of $3.00 per share,  but has agreed not to sell any such
common  stock  until  after  the  earlier  of  Heuristic   achieving   5,000,000
transactions  per  quarter  for  4  consecutive  quarters  or  an  aggregate  of
25,000,000 transactions under the license agreement. In the event that Heuristic
never  achieves  the  transaction  benchmarks  prior to the  termination  of the
license  agreement,  ClaimRemedi  shall return the  securities to the Company or
repay the value  thereof.  The Company will book this  transaction  as a prepaid
asset.


                                       51
<PAGE>

t 0 0 On April 19, 2005,  the Company  completed an  investment  transaction  in
which it issued 100 shares with a $1,000,000  value of Series H Preferred  Stock
in exchange for 15% of the common stock of CDHC Group,  Inc., a startup  company
in  the  healthcare  industry.  CDHC  Group,  led  by  industry  veterans,  is a
healthcare  marketing company targeting  consumers and providers who participate
in  consumer-driven  and high  deductible  health plans.  The Series H Preferred
Stock  shall  be  convertible  to  common  stock at any time  after  the  second
anniversary  following the close of the transaction,  at the then current market
price of the  Company's  common  stock  with a floor of $1.00  per  share  and a
ceiling of $3.00 per share.  The Company  will book this  transaction  as a long
term asset.

NOTE 10 - STOCK OPTION PLAN AND WARRANTS

We adopted a 1996 stock option plan (the "Option  Plan").  As of May 31, 2005, a
total of 3,500,887  shares of our common  stock have been  reserved for issuance
under the Option  Plan.  As of May 31,  2005,  we had  1,543,600 of such options
outstanding.  The Board of Directors administers the Option Plan, or a committee
appointed by the Board of Directors,  which determine the recipients and term of
the awards granted (Item 10. "Stock Options").

In addition to the above mentioned  stock options,  in July 1998, in conjunction
with  our  initial   public   offering   certain   debt   holders  were  granted
options/warrants in exchange for note repayments.

As for May 31, 2005 a total of  3,500,887  shares of our common  stock have been
reserved for issuance under the Option Plan of which  1,543,600 are  outstanding
and 1,957,287 were remaining (Item 10. "Stock Options").

We have granted the following  options/warrants  to purchase  common stock as of
May 31, 2005.

<TABLE>
<CAPTION>
                                                              Number of         Weighted Average
                                                          Options/Warrants         Price $/Sh
                                                          ----------------      ----------------
<S>                                                       <C>                       <C>
Options Outstanding - June 1, 2003                           6,339,503               $2.28

Employee Stock Options
----------------------
Granted                                                      1,350,000                0.65
Expired                                                        200,180                5.73
Exercised                                                           --                  --

Stockholder Warrants
--------------------
Granted                                                        451,086                1.02
Expired                                                             --                  --
Exercised                                                      530,440                0.65

                                                          --------------------------------------
Options/Warrants outstanding - May 31, 2004                  7,409,969               $2.41
                                                          --------------------------------------
</TABLE>


                                       52
<PAGE>

<TABLE>
<S>                                                       <C>                       <C>
Employee Stock Options
----------------------
Granted                                                             --                  --
Expired                                                        135,600                5.25
Exercised                                                           --                  --

Stockholder Warrants
--------------------
Granted                                                      2,780,738                2.26
Expired                                                      1,053,800                6.04
Exercised                                                      279,862                0.67
                                                          --------------------------------------
Options/Warrants outstanding - May 31, 2005                  8,721,445               $1.93
                                                          --------------------------------------
</TABLE>

Stock Based Compensation

All stock options  issued to employees  have an exercise price not less than the
fair market value of the  Company's  common  stock on the date of grant,  and in
accounting  for such options  utilizing the  intrinsic  value method there is no
related compensation expense recorded in the Company's financial statements.  If
the compensation had been determined based on the fair market value of the stock
option on their dates of grant in  accordance  with SFAS 123, the  Company's net
loss and loss per share for the years  ended May 31,  2005 and 2004,  would have
been increased to the pro forma amounts presented below:

<TABLE>
<CAPTION>
                                                                     2005           2004
                                                                 ------------   ------------
<S>                                                              <C>            <C>
      Net Income (Loss)
      -----------------
            As Reported......................................    $ 3,655,760    $ (4,382,532)
            Pro Forma........................................    $ 2,974,563    $ (5,484,302)

      Basic and Diluted Income (Loss) Per Common Share
      ------------------------------------------------
            As Reported......................................           0.15           (0.38)
            Pro Forma........................................           0.12           (0.47)
</TABLE>

For the fiscal  year  ended May 31,  2005,  the fair  value of option  grants is
estimated on the date of grant utilizing the Black-Scholes  option-pricing model
with the weighted  average  assumption  for options  granted  during  2000-2005,
expected  life of the option is 5 years,  expected  volatility of 38%, risk free
interest rate of 3.76% and a 0% dividend yield.  The weighted average fair value
at the grant date for such option is $0.73 per option.

For the fiscal  year  ended May 31,  2004,  the fair  value of option  grants is
estimated on the date of grant utilizing the Black-Scholes  option-pricing model
with the weighted  average  assumption  for options  granted  during  1999-2004,
expected  life of the option is 5 years,  expected  volatility of 42%, risk free
interest rate of 3.86% and a 0% dividend yield.  The weighted average fair value
at the grant date for such option is $0.81 per option.

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------
            Outstanding Weighted Average                         Exercisable Weighted Average
   -----------------------------------------------            ---------------------------------
   Total Shares                           Exercise            Total Shares             Exercise
     05/31/05             Life             Price                05/31/05                Price
   ------------           ----            --------            ------------             --------
<S>                       <C>             <C>                 <C>                      <C>
      117,118             3.75            $   0.01               117,118               $   0.01

      331,000             5.00            $   0.01               331,000               $   0.01

        8,000             0.25            $   0.25                 8,000               $   0.25
--------------------------------------------------------------------------------------------------
</TABLE>


                                       53
<PAGE>

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------
            Outstanding Weighted Average                         Exercisable Weighted Average
   -----------------------------------------------            ---------------------------------
   Total Shares                           Exercise            Total Shares             Exercise
     05/31/05             Life             Price                05/31/05                Price
   ------------           ----            --------            ------------             --------
<S>                       <C>             <C>                 <C>                      <C>
       25,000             0.50            $   0.50                25,000               $   0.50

    1,350,000             4.75            $   0.65             1,350,000               $   0.65

       74,250             2.75            $   0.65                74,250               $   0.65

      175,000             2.75            $   0.65               175,000               $   0.65

        5,250             2.75            $   0.65                 5,250               $   0.65

       22,500             2.75            $   0.65                22,500               $   0.65

        4,000             2.75            $   0.65                 4,000               $   0.65

    1,054,560             2.75            $   0.65             1,054,560               $   0.65

       30,000             2.75            $   0.65                30,000               $   0.65

       50,000             2.75            $   0.80                50,000               $   0.80

       97,369             2.75            $   0.95                97,369               $   0.95

      487,931             2.75            $   1.00               487,931               $   1.00

      357,856             3.50            $   1.00               357,856               $   1.00

      100,000             2.75            $   1.00               100,000               $   1.00

       25,000             4.25            $   1.00                25,000               $   1.00

       25,000             4.50            $   1.00                25,000               $   1.00

      350,000             2.75            $   1.01               350,000               $   1.01

      200,180             2.75            $   1.01               200,180               $   1.01

       10,000             2.75            $   1.20                10,000               $   1.20
--------------------------------------------------------------------------------------------------
</TABLE>


                                       54
<PAGE>

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------
            Outstanding Weighted Average                         Exercisable Weighted Average
   -----------------------------------------------            ---------------------------------
   Total Shares                           Exercise            Total Shares             Exercise
     05/31/05             Life             Price                05/31/05                Price
   ------------           ----            --------            ------------             --------
<S>                       <C>             <C>                 <C>                      <C>

        5,000             2.75            $   1.20                 5,000               $   1.20

        7,813             3.50            $   1.30                 7,813               $   1.30

       50,000             2.75            $   1.36                50,000               $   1.36

      100,000             2.75            $   1.46               100,000               $   1.46

       90,000             2.75            $   1.50                90,000               $   1.50

      150,000             2.75            $   1.50               150,000               $   1.50

       36,000             2.75            $   1.50                36,000               $   1.50

        7,500             2.75            $   1.70                 7,500               $   1.70

      240,000             2.75            $   1.75               240,000               $   1.75

      180,000             2.75            $   1.75               180,000               $   1.75

       50,000             2.75            $   1.88                50,000               $   1.88

       34,500             2.50            $   2.00                34,500               $   2.00

       50,000             2.50            $   2.00                50,000               $   2.00

       10,000             2.50            $   2.00                10,000               $   2.00

       50,400             2.50            $   2.00                50,400               $   2.00

       20,000             4.25            $   2.00                20,000               $   2.00

      215,000             4.50            $   2.00               215,000               $   2.00

      787,675             4.75            $   2.00               787,675               $   2.00

      185,000             5.00            $   2.00               185,000               $   2.00

       50,000             0.50            $   2.12                50,000               $   2.12

       10,417             2.75            $   2.50                10,417               $   2.50

       64,000             2.50            $   2.50                64,000               $   2.50

       45,000             2.50            $   2.50                45,000               $   2.50

        5,000             2.50            $   2.50                 5,000               $   2.50

       22,763             4.00            $   2.50                22,763               $   2.50

       10,000             4.25            $   2.50                10,000               $   2.50

      191,830             4.00            $   3.00               191,830               $   3.00

       13,100             4.25            $   3.00                13,100               $   3.00

       30,000             4.50            $   3.00                30,000               $   3.00
--------------------------------------------------------------------------------------------------
</TABLE>


                                       55
<PAGE>

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------
            Outstanding Weighted Average                         Exercisable Weighted Average
   -----------------------------------------------            ---------------------------------
   Total Shares                           Exercise            Total Shares             Exercise
     05/31/05             Life             Price                05/31/05                Price
   ------------           ----            --------            ------------             --------
<S>                       <C>             <C>                 <C>                      <C>

       64,500             4.75            $   3.00                64,500               $   3.00

       15,000             4.25            $   3.50                15,000               $   3.50

       66,500             4.75            $   4.00                66,500               $   4.00

        8,000               --            $   5.00                 8,000               $   5.00

      268,570             4.00            $   5.00               268,570               $   5.00

       18,300             4.25            $   5.00                18,300               $   5.00

       71,500             4.75            $   5.00                71,500               $   5.00

       40,000             2.50            $   5.88                40,000               $   5.88

      350,000             0.50            $   8.00               350,000               $   8.00

       74,250             1.75            $  11.55                74,250               $  11.55

       53,813             1.50            $  12.00                53,813               $  12.00

       25,000             1.75            $  12.94                25,000               $  12.94

       55,000             1.75            $  13.00                55,000               $  13.00

    8,721,445                             $   1.93             8,721,445               $   1.93
=============                                                ===========
--------------------------------------------------------------------------------------------------
</TABLE>

NOTE 11 - SEGMENT REPORTING

We currently operate through three business segments:  CoinBank machines,  Tomco
Auto Products and E-Commerce  Message  Management  Architecture  (EMMA). We sell
self-service  coin counting  machines  through existing  equipment  distribution
channels.  Furthermore,  we are  developing  an  E-Commerce  Message  Management
Architecture  transaction processing system, which has not yet been deployed and
the software development costs are being expensed.

Information on our business segments for the fiscal years ended May 31,

                                    2005                    2004
                                --------------         --------------
Net Revenues and Sales:
  Tomco Auto Products                5,657,224                     --
  CoinBank machines                     61,662                 55,616
  EMMA                                      --                 25,000
                                --------------         --------------

                                     5,718,886                 80,616
                                ==============         ==============


                                       56
<PAGE>

                                    2005                    2004
                                --------------         --------------
Interest expense
  CoinBank machines                         --                  9,943
  Tomco Auto Products                  226,789                     --
  Unallocated                          153,345                543,824
                                --------------         --------------

                                       380,134                553,767
                                ==============         ==============

Depreciation & Amortization
  CoinBank machines                         --                     --
  EMMA                                 559,768                559,768
  Unallocated                            3,568                  4,214
                                --------------         --------------

                                       563,336                563,982
                                ==============         ==============

Segment profit (loss)
  CoinBank machines                     96,626               (625,612)
  Tomco Auto Products                    9,659                     --
  Unallocated                        3,549,475             (3,756,920)
                                --------------         --------------

                                     3,655,760             (4,382,532)
                                ==============         ==============

Net identifiable assets:
  Tomco Auto Products               10,821,988                     --
  CoinBank machines                    753,744                790,900
  EMMA                                 886,300              1,446,068
  Unallocated                        1,648,835                 63,834
                                --------------         --------------

                                    14,110,867              2,300,802
                                ==============         ==============

NOTE 12 - RELATED PARTY TRANSACTIONS

We obtained  loans of $68,000 in the fiscal year ended May 31, 2002 and $342,700
during the fiscal  year  ended May 31,  2003 from Bruce  Korman who is our Chief
Executive  Officer  and  Chairman  of our Board of  Directors.  The  loans  were
short-term loans and as of May 31, 2005 $8,915 are outstanding to Mr. Korman.

As of May 31,  2005,  we  have  outstanding  short-term  loans  of an  aggregate
principal  amount of $8,915 from Bruce Korman (and  related  parties) who is our
Chief  Executive  Officer and Chairman of our Board of Directors.  The loans are
short-term non-interest bearing loans and are payable upon demand.  Furthermore,
as of May 31, 2005,  we were in arrears of $290,874 for the salary to Mr. Korman
and owed  $22,473  in  accrued  rent for our  offices  to a company in which Mr.
Korman has a beneficial interest.

NOTE 13 - MINORITY INTEREST

From November 2002 through March 2003, we received $443,000 in net proceeds from
members  for an  equity  share  in  our  subsidiary  of CT  Holdings,  LLC.  The
stockholders  own 13.65% while we own 86.35%.  The net  proceeds  from this have
been used to further develop the BONUS product for CT Holdings,  LLC, as well as
for working  capital for CT Holdings,  LLC and Cash  Technologies,  Inc. For the
fiscal  year ended May 31,  2005,  we have  allocated  $196,305  of losses in CT
Holdings, LLC to minority interest.

On  November  5, 2004 TAP  Holdings,  LLC (dba  Tomco  Auto  Products)  acquired
substantially  all of the assets and assumed  certain  liabilities of Tomco Auto
Products,  Inc. One  shareholder  owns 11% while we own 89%. For the fiscal year
ended May 31, 2005, we have allocated  $684,662 of losses and extraordinary gain
in TAP Holdings, LLC to minority interest.


                                       57
<PAGE>

NOTE 14 - OTHER INCOME

During  the  fiscal  year  ended May 31,  2005,  the  Company  had  income  from
forgiveness of debt of $2,235,059.  Income from  forgiveness of debt consists of
settlement  of various  lawsuits  and other  liabilities  by the Company and its
subsidiaries.

NOTE 15 - EXTRAORDINARY INCOME

On November 5, 2004 the Company's majority owned subsidiary,  TAP Holdings,  LLC
acquired  certain assets and liabilities of Tomco Auto Products,  Inc. for the a
purchase  price  of  $2,500,000,  less  certain  adjustments,  paid as  follows:
$650,000  in cash  and the  remainder  from an asset  based  bank  credit  line,
seller-carried financing and assumption of certain liabilities. The total assets
purchased had an  approximate  book value of $11,001,478 a majority of which was
inventory,  valued at $9,650,225.  The difference  between the net inventory and
the  purchase  price  resulted  in an  extraordinary  gain  to  the  Company  of
$6,249,951 as outlined below:

                                           Assets purchased &
                                           liabilities assumed
                                               Nov. 5, 2004
                                             ---------------
Assets

     Cash                                    $       116,565
     Accounts receivable                     $     1,968,276
     Accounts receivable other               $        55,815

     Inventory                               $     9,650,225
     Less: inventory reserve                 $    (1,180,000)

     Prepaid expenses                        $       372,367
     Other assets                            $        18,230
                                             ---------------

Total Assets                                 $    11,001,478
                                             ===============

Liabilities

     Accounts payable                        $     1,568,358
     Warranty reserve                        $       202,490
     Accrued expenses                        $       480,679

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

Total Liabilities                            $     2,251,527
                                             ---------------

Net Assets                                   $     8,749,951

Purchase price                               $     2,500,000

Extraordinary gain                           $     6,249,951


                                       58
<PAGE>

NOTE 16 - COMMITMENTS AND CONTINGENCIES

In June, 2002 we were notified that a vendor,  Kiosk Information  Systems,  Inc.
("KIS"),  had  obtained a judgment  against us for $129,567  allegedly  owed for
services  rendered in 1999,  plus interest and attorneys  fees. Upon learning of
the  judgment,  we  notified  KIS that we have never been  served with a lawsuit
related to this matter and were unaware of the  existence of the case. As of May
31, 2004, we had an accrued liability of $138,000 for this lawsuit. We had filed
a  petition  to  vacate  the  judgment,  but in  December,  2004,  KIS and  Cash
Technologies,  Inc.  agreed to a settlement  in which we paid KIS  $50,000.  The
balance of the accrued  liability of approximately  $92,752 has been written off
in the quarter ended February 28, 2005.

In February 2003 Abraham  Mirman of Samson  Consulting  Corp.  was hired,  inter
alia, to provide  consulting  services and arrange financing for us. The term of
the agreement was 12 months at a monthly cost of $50,000 or an equivalent  value
in shares of our stock;  either party had the right to terminate after one month
for any reason.  Shortly  thereafter,  we terminated  the agreement for Samson's
failure to perform. In July 2004, Mirman initiated arbitration in New York State
claiming that the agreement was  wrongfully  terminated and that Samson was owed
damages.  In the arbitration Samson claimed that it was owed fees for the entire
12 month term of the agreement plus  attorneys  fees. We alleged that Samson had
failed to perform its obligations,  had failed to provide any promised financing
and that  Mirman  had  induced  us to enter into the  contract  under  false and
deceptive pretenses.  In June 2005, an arbitrator  determined that the agreement
had been terminated after two months and thus awarded Sampson $100,000 in unpaid
fees,  $21,650 in statutory interest through July 20, 2005 and no attorney fees.
We are  undertaking  an  appeal of the  arbitrator's  decision  in New York.  In
addition,  we have initiated a lawsuit  against  Mirman in California,  alleging
that he failed to provide financing promised in February,  2003. There can be no
assurance that our New York appeal or California case will prove  successful and
this litigation will continue to incur legal costs until its conclusion.

In 2001 we delivered stock certificates representing 700,000 shares to an escrow
agent as collateral for a loan. The loan was never consummated,  and in May 2001
we  notified  the  transfer  agent to cancel the shares.  Thereafter  the escrow
agent,  an  attorney,  passed  away  and we  were  never  able  to  recover  the
certificates.  In  August,  2004  it  came to our  attention  that a  party  was
attempting to transfer 450,000 of the 700,000 shares. We immediately initiated a
lawsuit in New York to prevent the transfer of the shares and have them retired.
In December,  2004, we reached a tentative  settlement in which the shares would
be returned to us without any  exchange  of money,  pending  execution  of final
settlement  documentation.  We intend to  similarly  pursue the  recovery of the
remaining  250,000  shares,  however  in the  event  that we  cannot  achieve  a
satisfactory outcome in such effort, or in the event that the pending settlement
is not consummated for any reason, some or all of these shares may be treated as
outstanding and our Stockholders'  Equity line item would have to be adjusted to
reflect such additional shares.


                                       59
<PAGE>

NOTE 17 - SUBSEQUENT EVENTS

On June 30, 2005, in a private  transaction under Section 4(2) of the Securities
Act of 1933,  as  amended,  we sold  952,381  shares of  common  stock for gross
proceeds of $1,000,000 to one  individual.  We also issued 428,571 of our common
stock  purchase  warrants  with an  exercise  price of $2.50.  All common  stock
purchase  warrants  have  an  exercise  life  of 5  years  and  there  will be a
beneficial conversion recognized in conjunction with this transaction.

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

There have been no changes in our independent  accountants or disagreements with
our independent accountants in the last two fiscal years.

ITEM 8A CONTROLS AND PROCEDURES

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures:

Our management,  under the supervision and with the  participation  of our Chief
Executive  Officer and  Controller,  conducted an evaluation of our  "disclosure
controls  and  procedures"  (as defined in the  Securities  Exchange Act of 1934
Rules 13a-14(c)) within 90 days of the filing date of this Annual Report on Form
10-KSB.  Based on their  evaluation,  our chief executive officer and controller
have  concluded that as of the  Evaluation  Date,  our  disclosure  controls and
procedures are effective to ensure that all material  information required to be
filed in this Annual Report on Form 10-KSB has been made known to them.

Additionally,  in response to the passage of the Sarbanes-Oxley Act of 2002, our
Board of Directors and management have, among other actions, formed a Disclosure
Committee  comprised of various  members of our management  team. The Disclosure
Committee  will be charged with,  among other things,  reviewing and  developing
policies and  procedures to enhance our  disclosure  controls and  procedures as
well as with reviewing our periodic reports and other public disclosures.

Other than as described above, there have been no significant changes, including
corrective   actions  with  regard  to  significant   deficiencies  or  material
weaknesses in our internal controls or in other factors that could significantly
affect these controls subsequent to the Evaluation Date set forth above.

ITEM 8B OTHER INFORMATION

None


                                       60
<PAGE>

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
        WITH SECTION 16(a) OF THE EXCHANGE ACT

      The  following  table sets forth  information  regarding our directors and
executive officers:

Name                     Age        Position

Bruce R. Korman           45        President, Chief Executive Officer and
                                    Chairman of the Board

Edmund King               41        Chief Financial Officer and Secretary

Richard  Miller           52        Director(1)(2)

Robert B. Fagenson        51        Director(1)

Kevin Walls               40        Director(2)

--------------
(1)   Compensation Committee member.
(2)   Audit Committee member.

      Bruce Korman has been our President,  Chief Executive Officer and Chairman
of the  Board of  Directors  since  our  inception,  and has  served in the same
capacities at National  Cash  Processors,  Inc., or NCP, and CoinBank  Automated
Systems,  Inc., or CAS, our  wholly-owned  subsidiaries,  since their inception.
Since 1984,  Mr. Korman has been a principal and general  partner in a series of
real estate limited  partnerships  engaged in the development,  construction and
management of multi-family housing projects in Southern California.

      Edmund King has served as Chief Financial  Officer and Secretary of us and
our  subsidiaries  since  December  11, 2000.  Mr. King served as financial  and
operations consultant for numerous  manufacturing,  entertainment and e-commerce
companies from 1998-2000.  He also served as Vice-President  and Chief Financial
Officer of UStel,  Inc. between  1997-1998,  controller for ITT Fluid Technology
Corporation  between  1989-1992,  as well as a  financial  analyst  for  Trouver
Capital Partners from 1994-1997.

      Richard Miller has been a director  since our  inception.  Since 1985, Mr.
Miller has served as President and Chief Executive Officer of Union Fidelity,  a
mortgage banking firm which he founded. Mr. Miller is also the President of M.R.
International  Enterprises,  Ltd.,  which is the  general  partner  of  Lakeview
Enterprises Limited Partnership, a private real estate limited partnership.

      Robert B. Fagenson has been a director since August 4, 1998. Mr.  Fagenson
has,  for more  than the last five  years,  been a  director  and  President  of
Fagenson & Co.,  Inc., a New York Stock  Exchange  specialist  firm,  and a Vice
President and director of Starr Securities,  Inc. a registered broker-dealer and
member of the New York Stock  Exchange.  Mr. Fagenson has been director and Vice
Chairman of the New York Stock Exchange; a director of Rent-Way, Inc., a company
listed on the New York Stock Exchange;  a director of Intrenet,  Inc., a company
listed  on  the  Nasdaq  SmallCap  Market;   and  a  director  of  Hudson  Hotel
Corporation, a company listed on the Nasdaq National Market. Mr. Fagenson serves
as the  representative  of Starr  Securities,  Inc., the  co-underwriter  in the
Company's initial public offering.

      Kevin Walls has been a director since July 2001. Mr. Kevin Walls also acts
as a consultant to many companies the aviation industry. Prior to July 2001, Mr.
Walls worked for five years as Director of Sales with  Guinness Peat Aviation in
Ireland,  at that time the world's largest aircraft finance and leasing company.
From 1994 to 1997, Mr. Kevin Walls worked as Vice President - Corporate Planning
for a major  airline in  Jakarta,  Indonesia,  and headed up the  corporate  and
strategic planning department.


                                       61
<PAGE>

Compensation of Directors, Committees of the Board and Board Meetings.

      Directors  do not receive  cash  compensation  for serving on our board of
directors.  We reimburse non-employee directors for the costs of attending board
meetings.  Employee-directors are not entitled to any additional compensation as
directors.  All  non-employee  directors  are  eligible  to  participate  in the
Non-Executive  Director  Stock Option  Plan,  which was approved by our board of
directors  in August  1998 and by our  stockholders  in June  1999.  There  were
150,000 shares reserved under the Non-Executive Director Plan, each non-employee
director  received  options to purchase  30,000  shares of our common stock upon
joining our board of directors,  which  options  vested as to 10,000 shares upon
joining the board and vested as to an  additional  10,000  shares on each of the
first and second  anniversaries of joining the board. There are no annual grants
of  options  to  directors   under  the   Non-Executive   Director   Plan.   See
"Non-Executive Director Stock Option Plan".

      On March 28,  2003,  our board of  directors  approved an amendment to the
Director  Plan.  Under the  amendment  the shares  reserved  under the plan were
increased to 700,000 and each director  surrendered  all of his previously  held
options and was issued a one-time grant of 140,000  options at an exercise price
of $0.65. On January 5, 2004, the stockholders approved this increase.

      On June 20,  2005,  the  stockholders  approved  another  amendment to the
Director Plan. Under the amendment the number of shares was once again increased
to 1,000,000  and each  director  received an  additional  50,000  options at an
exercise price of $1.20....

      As of May 31, 2004,  there are 420,000 options to purchase  420,000 shares
of our common stock outstanding.

      The board of directors has established two committees. The Audit Committee
currently is comprised of Kevin Walls and Richard  Miller,  who are  independent
directors  within the meaning of the American  Stock Exchange  rules.  The Audit
Committee's duties include:

      o     reviewing with our  independent  auditors,  the scope and results of
            any audits; and

      o     reviewing  with  the  independent   auditors  and  management,   our
            accounting, financial and operating controls and staff.

      In  addition,  our  board of  directors  has  established  a  Compensation
Committee, currently comprised of Robert Fagenson and Richard Miller. All of the
members  of  the   Compensation   Committee  are  independent   directors.   The
Compensation Committee administers our Employee Stock Option Plan and negotiates
and approves employment agreements with our executive officers.

Certain Key Employees

      Willi  Muhr,  41,  has  been  our  Vice   President   since  August  1996,
establishing and managing our European Operations. From June 1993 to March 1996,
Mr. Muhr served as Chief Executive Officer of Adcon Telemetry,  an international
wireless data  communications  company.  From August 1986 to February  1993, Mr.
Muhr was a principal in a series of real estate limited  partnerships engaged in
the development, construction and management of multi-family housing projects in
Southern California.

      Darryl J. Bergman, 36, has been our Chief Technology Officer since January
1997.  From January 1991 to December  1996, Mr. Bergman served first as Software
Developer and later as Software  Project Leader at Harte-Hanks,  a leading media
and marketing firm, where he had senior responsibility for database applications
software  development for major accounts including Sony Corporation,  Prudential
Insurance, Cigna Health Care and others.


                                       62
<PAGE>

Summary of Cash and Certain Other Compensation

      The following table sets forth certain  compensation paid by us during the
fiscal years ended May 31, 2005,  May 31, 2004 and May 31, 2003 to our President
and Chief  Executive  Officer  and our other most highly  compensated  executive
officer (collectively, the "Named Executive Officers"):

                           Summary Compensation Table

<TABLE>
<CAPTION>
Name and                                                                                                All Other
Principal Position                  Annual Compensation               Long Term Compensation         Compensation(1)
------------------                  -------------------               ----------------------         ---------------
                                                                    Securities
                             Year        Salary         Bonus       Underlying      Options (#)
                             ----       ---------       -----       ----------      -----------
<S>                          <C>        <C>             <C>         <C>              <C>              <C>
Bruce Korman...............  2005       $ 250,000*                                                    $  18,000 (1)
     President and Chief     2004       $ 180,000*                                   1,350,000        $  18,000 (1)
     Executive Officer       2003       $ 180,000*                                                    $  18,000 (1)

Edmund King................  2005       $ 150,000                                                     $   9,000 (1)
     Chief Financial         2004       $ 138,000                                                     $   9,000 (1)
     Officer                 2003       $ 138,000                                                     $   9,000 (1)
</TABLE>

-------------------------
(1)   Represents paid additional benefits.

      * As of May 31,  2005 the  Company  owes Bruce  Korman  $290,874 in unpaid
        wages.

The following table discloses in

      The following table discloses information concerning stock options granted
in the year ended May 31, 2005 to our Named Executive Officers.

Option Grants in Fiscal Year Ended May 31, 2005

                      Individual Grants in Last Fiscal Year

<TABLE>
<CAPTION>
                                                      Percent of Total
                           Number of Securities      Options/Warrants to
                                Underlying           Employees in Fiscal       Exercise Price
Name                         Options/Warrants              Year (%)                ($/Sh)         Expiration Date
----------------------     ---------------------     -------------------       --------------     ---------------
<S>                                 <C>                      <C>                    <C>                <C>
Bruce Korman..........              0                        --                     --                 --

Edmund King...........              0                        --                     --                 --
</TABLE>

Aggregated Option Exercises And Fiscal Year-End Option Values

      The  following  table  sets  forth  information  concerning  the number of
options owned by the Named Executive  Officers and the value of any in-the-money
unexercised  stock options as of May 31, 2005. No options were  exercised by any
of the Named Executive Officers during the fiscal year ended May 31, 2005:


                                       63
<PAGE>

<TABLE>
<CAPTION>
                          Number of Securities Underlying Unexercised     Value of Unexercised In-the-Money Options at
                                    Options at May 31, 2005                              May 31, 2005(1)
                        ---------------------------------------------- ---------------------------------------------------

Name                         Exercisable           Un-exercisable           Exercisable             Un-exercisable
----------------------- ----------------------- ---------------------- ---------------------- ----------------------------
<S>                            <C>                        <C>                <C>                          <C>
Bruce Korman...........        1,350,000                  0                  $ 1,350,000                  $ 0

Edmund King............           50,000                  0                  $    50,000                  $ 0
</TABLE>

------------------------------
(1)   Year-end  values  for  unexercised   in-the-money  options  represent  the
      positive  spread between the exercise price of such options and the fiscal
      year-end market value of the common stock. An option is  "in-the-money" if
      the fiscal  year end fair  market  value of the common  stock  exceeds the
      option exercise price.

Employment Agreements

      We  previously  entered into a three-year  employment  agreement  with Mr.
Korman,  which has been  automatically  renewed annually  according to its terms
since July 2001. Mr. Korman also participates in other business endeavors, which
require a portion of his business time.  Although Mr. Korman has advised us that
his  participation  in outside  business  matters  should not interfere with his
performance of his duties as our President and Chief  Executive  Officer,  there
can be no assurance  that a conflict of interest  will not arise with respect to
the  allocation of Mr.  Korman's time or that such conflict would be resolved in
our favor.

Employee Stock Option Plans

      In 1996, we adopted our 1996  Employee  Stock Option Plan, or the Employee
Plan.  The  purpose  of the  Employee  Plan is to attract  and retain  qualified
personnel,  to provide  additional  incentives  to our  employees,  officers and
consultants of the Company and to promote the success of our business. A reserve
of 775,887  shares of common stock had been  established  for issuance under the
Employee Plan. The  Compensation  Committee of our board of directors  currently
administers  the Employee Plan.  Subject to the Employee Plan, the board (or its
designated  committee)  has  complete  discretion  to determine  which  eligible
individuals  are to receive option grants,  the number of shares subject to each
such grant,  the exercise price of the option,  the status of any granted option
as either an  incentive  stock  option or a  non-qualified  option,  the vesting
schedule to be in effect for the option grant and the maximum term for which any
granted option is to remain outstanding.

      Each option  granted  under the Employee  Plan will have a maximum term of
five years, subject to earlier termination following the optionee's cessation of
service  with us. All  options  granted to date have a term of five  years.  The
exercise  price of  incentive  stock  options and  non-qualified  stock  options
granted  under the Employee  Plan must be at least 100% of the fair market value
of the stock subject to the option on the date of grant,  respectively  (or 110%
with  respect to  incentive  options  granted to holders of more than 10% of our
voting  power).  Such payment may be made in cash,  or at the  discretion of our
board  of  directors,  in  outstanding  shares  of  common  stock  held  by  the
participant,  through a full recourse  promissory  note payable in  installments
over a  period  of years  or any  combination  of the  foregoing.  Our  Board is
submitting for stockholder  approval a proposal to increase the number of shares
reserved under the 1996 Plan by 200,000 shares.

      At our  Annual  Meeting  of  Stockholders  held  on  June  21,  1999,  our
stockholders  approved an  amendment to the 1996  Employee  Stock Option Plan to
increase the number of shares  available  for  issuance  from 557,887 to 775,887
shares and then again on January  5, 2004 the plan was  increased  by  2,725,000
shares to 3,500,887.

      At our  Annual  Meeting  of  Stockholders  held  on  June  20,  2005,  our
stockholders  approved an  amendment to the 1996  Employee  Stock Option Plan to
increase the number of shares available for issuance from 3,500,887 to 5,500,000
shares.  The stockholders  also approved the grant of 2,000,000 options to Bruce
Korman, the Company's  President and Chief Executive Officer and 650,000 options
to Edmund King, the Company's Chief Financial Officer.  As of May 31, 2005 there
are 1,408,000 options outstanding under the 1996 Employee Stock Option Plan.


                                       64
<PAGE>

Non-Executive Director Stock Option Plan

      In August 1998,  our board of directors  approved a Director  Stock Option
Plan,  or Director  Plan,  for  Non-Employee  Directors  who are not eligible to
participate  in the  Employee  Plan.  The  Director  Plan  was  approved  by our
stockholders at our Annual Meeting held in June 1999.

      The  Director  Plan  provides  that each  non-executive  director  will be
granted  options to purchase  30,000 shares of our common stock upon joining our
board of directors. The options vest as follows: 10,000 options upon joining the
board;  10,000 options on the first anniversary of such date; and 10,000 options
on the second anniversary of such date. There are no annual grants of options to
directors under the Director Plan. Only  non-employee  directors are eligible to
participate in the Director Plan.

      The Director  Plan is intended to attract and retain key  personnel  whose
performance is expected to have a positive effect on our business by encouraging
and  assisting  those persons to acquire our common stock equity in the Company.
Our board  believes  that by  compensating  directors  with  stock  options  the
directors will have similar  interests to our stockholders to promote growth and
enhanced stockholder value. Options may be granted under the Director Plan until
the year 2008 to non-executive  directors as defined and members of any advisory
board established by us who are not full-time employees of our Company or of any
of our subsidiaries.

      The exercise price for options  granted under the Director Plan is 100% of
the fair market value of the common stock on the date of grant.  Until otherwise
provided in the relevant stock option agreements,  the exercise price of options
granted under the Director Plan must be paid at the time of exercise,  either in
cash,  by delivery of shares of common stock or by a  combination  of each.  The
term of each option  commences on the date it is granted and, unless  terminated
sooner as provided in the  Director  Plan,  expires  five years from the date of
grant.  Options  granted  under the Director  Plan do not qualify for  incentive
stock option treatment.

      On March 28,  2003,  our board of  directors  approved an amendment to the
Director  Plan.  Under  the  amendment,  each  director  surrendered  all of his
previously held options and was issued a one-time grant of 140,000 options at an
exercise price of $.65, subject to shareholder approval. On January 5, 2004, the
stockholders approved this increase.

      On June 20,  2005,  the  stockholders  approved  another  amendment to the
Director Plan. Under the amendment the number of shares was once again increased
to 1,000,000  and each  director  received an  additional  50,000  options at an
exercise price of $1.20.

      As of May 31, 2005, there are 420,000 options to purchase 30,000 shares of
our common stock outstanding.

Limitations of Liability and Indemnification

      Our Restated  Certificate  of  Incorporation  and by-laws  provide that we
shall,  to the maximum  extent  permitted  from time to time under the  Delaware
General  Corporation Law (the "DGCL"),  indemnify and advance expenses to any of
our officers, directors,  employees or agents in connection with any threatened,
pending or completed  action,  suit or proceeding.  The Restated  Certificate of
Incorporation  also  permits us to secure  insurance on behalf of any person who
was or is a director,  officer,  employee or agent for us against any  liability
incurred by such person in such capacity,  regardless of whether indemnification
would be permitted  under the applicable  provisions of the DGCL or the Restated
Certificate of Incorporation.

      Section  102(b)(7) of the DGCL permits a provision in the  certificate  of
incorporation of each corporation organized thereunder  eliminating or limiting,
with certain exceptions, the personal liability of a director to the corporation
or its  stockholders for monetary damages for certain breaches of fiduciary duty
as a director.


                                       65
<PAGE>

      Section 145 of the DGCL ("Section  145"), in summary,  empowers a Delaware
corporation,  within certain limitations, to indemnify its officers,  directors,
employees and agents against expenses  (including  attorneys' fees),  judgments,
fines and amounts paid in settlement,  actually and reasonably  incurred by them
in connection with any nonderivative  suit or proceeding,  if they acted in good
faith and in a manner  they  reasonably  believed to be in or not opposed to the
best  interests of the  corporation,  and, with respect to a criminal  action or
proceeding, had no reasonable cause to believe their conduct was unlawful.

      With respect to derivative  actions,  Section 145 permits a corporation to
indemnify  its  officers,  directors,  employees  and  agents  against  expenses
(including  attorneys' fees) actually and reasonably incurred in connection with
the defense or settlement of such action or suit, provided such person meets the
standard  of  conduct  described  in the  preceding  paragraph,  except  that no
indemnification  is permitted in respect of any claim where such person has been
found  liable to the  corporation,  unless the Court of Chancery or the court in
which  such  action  or suit  was  brought  approves  such  indemnification  and
determines that such person is fairly and reasonably entitled to be indemnified.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

PRINCIPAL  STOCKHOLDERS  SECURITY  OWNERSHIP  OF CERTAIN  BENEFICIAL  OWNERS AND
MANAGEMENT

      The following table sets forth certain information as of May 31, 2005 with
respect to each executive officer and director,  all directors and officers as a
group and the  persons  (including  any  "group" as that term is used in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended),  known by us to be
the  beneficial  owner of more than five  percent  of our common  stock.  Unless
otherwise  indicated,  we believe that all persons  named in the table have sole
voting  and  investment  power  with  respect  to all  shares  of  common  stock
beneficially  owned by them.  A person is deemed to be the  beneficial  owner of
shares that can be acquired  by such  person  within 60 days from May 31,  2005,
upon the exercise of options,  warrants or  convertible  securities.  At May 31,
2005, there were 18,374,346 shares of common stock outstanding.

<TABLE>
<CAPTION>
      Name and Address of                     Amount and Nature               Percentage of Shares
    Beneficial Owners(1)(2)              of Beneficial Ownership (2a)          Beneficially Owned
    -----------------------              ----------------------------          ------------------
<S>                                              <C>                                <C>
Bruce Korman (3)                                 1,866,267                           9.49%

Richard Miller (4)                                 856,657                           4.85%

Robert B. Fagenson (5)(6)                          271,126                           1.72%

Kevin Walls (7)                                    336,927                           2.07%

Eric Butlein (8)                                 3,056,445                          15.55%

Edmund King (9)                                     50,000                              *

Darryl Bergman (10)                                 75,000                              *

Willi Muhr (11)                                     50,000                              *

Peter & Irene Gauld (12)                         1,755,860                           9.43%

All directors and executive officers
as a group (persons)(1)(2)(3)(4)(5)(6)
(7)(8)(9)(10)(11)(12)                            8,468,282                          37.57%
</TABLE>

*  Denotes less than 1%.


                                       66
<PAGE>

(1)   Unless otherwise indicated, the address for each named individual or group
      is in care of Cash Technologies, Inc., 1434 West 11th Street, Los Angeles,
      California 90015.

(2)   Unless otherwise indicated, we believe that all persons named in the table
      have sole voting and investment power with respect to all shares of common
      stock  beneficially owned by them. A person is deemed to be the beneficial
      owner of  securities  that can be acquired  by such person  within 60 days
      from May 31, 2004,  upon the exercise of options,  warrants or convertible
      securities.  Each beneficial owner's percentage ownership is determined by
      assuming that options, warrants or convertible securities that are held by
      such  person  (but not  those  held by any  other  person)  and  which are
      exercisable within 60 days of the date of May 31, 2004.

(3)   Includes  516,267  shares  owned by First  Bancorp  L.P.  Mr.  Korman is a
      limited  partner of First  Bancorp L.P.  and the  President of the general
      partner of First Bancorp L.P. Also includes  1,350,000  shares  subject to
      outstanding exercisable employee options.

(4)   Includes 516,477 shares owned by Lakeview Enterprises,  Ltd. Mr. Miller is
      a limited partner of Lakeview  Enterprises,  Ltd. and the President of the
      general partner of Lakeview Enterprises, Ltd. Also includes 200,180 shares
      subject to  outstanding  exercisable  warrants and an  additional  340,800
      executive options.

(5)   Includes  2,625  shares  issuable  upon the  conversion  of 2,625 Series A
      Preferred  Stock,  and 141,313 shares subject to outstanding  warrants and
      options.

(6)   On March 28,  2003,  the  Board of  Directors  approved  that  in-lieu  of
      repayment of the $75,000 loan from Mr.  Fagenson to the Company.  Includes
      117,188  shares  issuable upon the  conversion of warrants  exercisable at
      $0.01  per  share  with a term of 7  years.  Any of such  warrants  can be
      redeemed  at any time for a cash  payment  from the  Company  of $0.65 per
      warrant share.

(7)   Includes  12,000 shares  issuable upon the  conversion of 12,000  options,
      120,000  shares  issuable  upon  conversion  of Series B preferred  stock,
      64,927  shares  issuable  upon the  conversion  of  dividends  on Series B
      preferred stock and an additional 140,000 upon the conversion of executive
      options.

(8)   Includes  260,000  shares  issued upon  conversion of  convertible  notes,
      80,000 shares issued upon conversion of Series B preferred stock,  480,769
      shares issued upon conversion of Series C preferred stock,  833,723 shares
      of common  stock,  and an aggregate of 352,231  shares  issuable  upon the
      conversion  of  352,231  Series  D and  other  warrants.  Includes  shares
      beneficially  owned  through Ejada  Limited  Partnership,  his spouse Jada
      Butlein, ADA Partners, Tikkum Olam Foundation, ADA Greater Trust and Ejada
      Butlein Trust.

(9)   Includes 50,000 shares subject to options.

(10)  Includes 75,000 shares subject to options.

(11)  Includes 50,000 shares subject to options.

(12)  Includes 325,860 shares issued upon conversion of Series D preferred stock
      and 500,000  shares issued upon  conversion  of Series F preferred  stock,
      576,923  shares of common  stock,  53,077  shares of common  stock  issued
      in-lieu of interest  and an  aggregate  of 300,000  shares  issuable  upon
      exercise of 300,000 Series E, G and H warrants.


                                       67
<PAGE>

EQUITY COMPENSATION PLAN INFORMATION

      The  following  table sets forth certain  information  as of September 10,
2005,  with respect to each  employee,  officer and  director,  each nominee for
director,  all  directors and officers as a group and the persons known by us to
hold options under our Employee  Stock Option and  Non-Executive  Director Stock
Option  Plan.  As of  September  10, 2005 a reserve of  5,500,000  shares of our
common  stock had been  established  for issuance  under the  Employee  Plan and
1,000,000 under the  Non-Executive  Director Plan.  There are 4,054,000  options
outstanding under the Employee Plan and 570,000 under the Non-Executive Director
Plan.

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
     Number of securities to be issued upon exercise   Weighted average of      Weighted average      Number of securities
             of options, warrants and rights            exercise price of       exercise price of    remaining available for
                                                       outstanding options,   outstanding options,    future issuance under
                                                       warrants and rights     warrants and rights     equity compensation
                                                                                                        plans (excluding
                                                                                                     securities reflected in
                                                                                                           column (a))
----------------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>                       <C>                   <C>
     Equity Compensation plans approved by                  4,624,000                 $1.00                 1,876,000
         Security holders.............................

     Equity Compensation plans not approved by
         Security holders.............................             --                    --                        --

              Total...................................      4,624,000                 $1.00                 1,876,000
----------------------------------------------------------------------------------------------------------------------------
</TABLE>

Certain Reports

      Other than the individuals  disclosed below,  during the fiscal year ended
May 31, 2005,  based upon the information and reports received by us, other than
one of our shareholders as described  below, no Director,  officer of beneficial
owner of more than ten percent of the  Corporation's  Common Stock (which is the
only class of securities of the Corporation  registered  under Section 12 of the
Securities  Exchange Act of 1934 (the "Act"),  (a "Reporting  Person") failed to
file on a timely  basis,  reports  required  by Section 16 of the Act during the
most  recent  fiscal  year.  Two of our  directors,  Vincent  Carrino  and Robin
Richards,  failed to file Form 4 reports for the months of August 1999 and March
1999,  respectively.  In addition Mr. Butlein one of our shareholders has failed
to timely file reports on forms 3, 4, 5 commencing in January 2001.  Furthermore
Mr. Fagenson, one of our directors, failed to timely file a report on form 4 for
the month of April 4, 2001.  The  Corporation  was not subject to the  reporting
requirements under the Act prior to its initial public offering in July 1998.


                                       68
<PAGE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Certain Transactions

      In April 2001,  we obtained a short-term  loan of $75,000 from Mr.  Robert
Fagenson who serves on our board of directors. In January, 2004, we extinguished
this debt and  accrued  interest of $20,265 by issuing  117,188  warrants to Mr.
Fagenson.  The  warrants  have an  exercise  price  of $.01  per  share  and are
exercisable for a term of seven years.

      As of May 31, 2005, we had  outstanding  short-term  loans of an aggregate
principal amount of $8,915 from Bruce Korman (and related  parties),  who is our
Chief  Executive  Officer and Chairman of the Board of Directors.  The loans are
short-term non-interest bearing loans and are payable upon demand.  Furthermore,
as of May 31, 2005,  we were in arrears of $290,874 for the salary to Mr. Korman
and owed $22,475 in accrued rent for our offices to Prime Financial Partners,  a
company in which Mr. Korman has a beneficial interest.

Delaware Anti-takeover Law

      We are subject to certain  anti-takeover  provisions  under Section 203 of
the Delaware General Corporation Law. In general,  under Section 203, a Delaware
corporation  may not engage in any  business  combination  with any  "interested
stockholder"  (a person that owns,  directly or  indirectly,  15% or more of the
outstanding  voting stock of a  corporation  or is an affiliate of a corporation
and was the owner of 15% or more of the  outstanding  voting stock) for a period
of three  years  following  the  date  such  stockholder  became  an  interested
stockholder,  unless  (i)  prior to such  date the  board  of  directors  of the
corporation  approved either the business  combination or the transaction  which
resulted in the  stockholder  becoming an interested  stockholder,  or (II) upon
consummation  of the transaction  which resulted in the stockholder  becoming an
interested  stockholder,  the interested  stockholder  owned at least 85% of the
voting  stock  of the  corporation  outstanding  at  the  time  the  transaction
commenced,  or (III) on or subsequent to such date, the business  combination is
approved  by the board of  directors  and  unauthorized  at an annual or special
meeting of  stockholders  by at least 66 2/3% of the  outstanding  voting  stock
which is not owned by the interested  stockholder.  The restrictions  imposed by
Section  203  will not  apply  to a  corporation  if the  corporation's  initial
certificate of incorporation  contains a provision  expressly electing not to be
governed  by this  section  or the  corporation  by action  of its  stockholders
holding  a  majority  of  the  outstanding  stock  adopts  an  amendment  to its
certificate of incorporation or by-laws expressly electing not to be governed by
Section 203.

      We have not  elected  out of Section  203,  and upon  consummation  of our
initial  public  offering  and the  listing  of  common  stock  on  Nasdaq,  the
restrictions  imposed by Section 203 apply to us. Such provision  could have the
effect of  discouraging,  delaying or  preventing  a takeover of us, which could
otherwise  be in the best  interest  of our  stockholders,  and have an  adverse
effect on the market price for our common stock.


                                       69
<PAGE>

ITEM 13. EXHIBITS, LISTS AND REPORTS ON FORM 8-K

(a)   Exhibits

      The following Exhibits  designated by an asterisk (*) have been previously
filed with the  Securities  and  Exchange  Commission  and,  pursuant to Rule 17
C.F.R.  230.411,  are  incorporated  by reference to the document  referenced in
brackets following the descriptions of such exhibits.

*3.1     Our  Restated   Certificate  of  Incorporation   [Exhibit  3.1  to  our
         Registration Statement on Form SB-2 (File No. 333-6436)]
*3.2     Our Bylaws  [Exhibit  3.2 to our  Registration  Statement  on Form SB-2
         (File No. 333-6436)]
*3.3     Certificate  of  Designation  of  Series  A 8%  Cumulative  Convertible
         Preferred  Stock  [filed as Exhibit  3.1 (a) to our Form 10 QSB for the
         quarter ended August 31, 1999.
*3.4     Certificate of Designation of Series E Cumulative Convertible Preferred
         Stock [Exhibit 3.4 to our Registration Statement on Form SB-2 (File No.
         333-6436)]
*3.5     Certificate of Designation of Series F Cumulative Convertible Preferred
         Stock [Exhibit 3.5 to our Registration Statement on Form SB-2 (File No.
         333-6436)]
3.6      Certificate of Designation of Series H Cumulative Convertible Preferred
         Stock
3.7      Certificate of Designation of Series I Cumulative Convertible Preferred
         Stock
3.8      Certificate of Designation of Series J Cumulative Convertible Preferred
         Stock
*4.1     Our Common Stock  Certificate  form  [Exhibit  4.1 to our  Registration
         Statement on Form SB-2 (File No. 333-6436)]
*4.2     Form of the Underwriter's Warrant Agreement,  including Form of Warrant
         Certificate dated as of July 9, 1998 between us, Starr Securities, Inc.
         and GunnAllen  Financial Inc. (the  "Underwriters")[Exhibit  4.1 to our
         Registration Statement on Form SB-2 (File No. 333-6436)]
*10.1    Lease for our  Facilities at 1422 -34 West 11th Street,  Los Angeles Ca
         [Exhibit  10.1 to our  Registration  Statement  on Form SB-2  (File No.
         333-6436)]
*10.2    Agreement dated November 22, 1996 between National Cash Processors Inc.
         and First  Bancorp LP [Exhibit  10.2 to our  Registration  Statement on
         Form SB-2 (File No. 333-6436)]
*10.3    Manufacturing  and License  Agreement dated January 17, 1997 between us
         and  Geld   Bearbeitungs   Systeme   GES.M.B.H.[Exhibit   10.3  to  our
         Registration Statement on Form SB-2 (File No. 333-6436)]
*10.4    Form of Employment  Agreement between us and Bruce Korman [Exhibit 10.4
         to our Registration Statement on Form SB-2 (File No. 333-6436)]
*10.5    Employee Stock Option Plan [Exhibit 10.5 to our Registration  Statement
         on Form SB-2 (File No. 333-6436)]
*10.6    Form of Consulting  Agreement between us and the Underwriters  dated as
         of July 9, 1998  [Exhibit  10.6 to our  Registration  Statement on Form
         SB-2 (File No. 333-6436)]
*10.7    Our Stock Purchase  Agreement and Plan of Reorganization  [Exhibit 10.7
         to our Registration Statement on Form SB-2 (File No. 333-6436)]
*10.9    Promissory  Note issued to G.E.  Capital Corp,  Security  Agreement and
         related Guarantees [Exhibit 10.9 to our Registration  Statement on Form
         SB-2 (File No. 333-6436)]
*10.10   Form  of  Bridge  Notes  and  Bridge  Warrant  [Exhibit  10.10  to  our
         Registration Statement on Form SB-2 (File No. 333-6436)]
*10.11   Non-Executive  Director  Stock  Option  Plan [filed as Exhibit A to our
         Proxy Statement for its Annual Meeting held on June 21, 1999].
23.      Consent of Vasquez & Company LLP, independent auditors
31.1     Certification
31.2     Certification
32.1     Certification pursuant to 18 U.S.C. Section 1350


                                       70
<PAGE>

(b)   Reports on 8-K

      None

ITEM 14. PRINCIPAL ACCOUNTING FEES & SERVICES

Independent Accountant Fees

      The following table sets forth the aggregate fees for  professional  audit
services  rendered  by  Vasquez & Co LLP for the audit of our  annual  financial
statements  for the  fiscal  years  2005 and  2004,  and fees  billed  for other
services  provided by Vasquez & Co LLP for fiscal  years 2005 and 2004.  Certain
amounts  from  fiscal  year  2003  have  been  reclassified  to  conform  to new
presentation requirements.

                                               Fiscal Year Ended May 31,
                                             ----------------------------
                                                 2005             2004
                                             ------------    ------------
Audit Fees                                   $     57,837    $     57,837

Audit-Related Fees                                     --              --

Tax Fees                                            6,000           6,000

All other fees                                         --              --
                                             ------------    ------------

Total Fees Paid                              $     63,837    $     63,837
                                             ============    ============


                                       71
<PAGE>

                                   SIGNATURES

      Pursuant  to the  requirements  of Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its  behalf  by the  undersigned,  thereunto  duly  authorized  the  13th day of
September, 2005.

                                       CASH TECHNOLOGIES, INC.


                                       By: /s/ BRUCE KORMAN
                                           -------------------------------------
                                           Bruce Korman
                                           President and Chief Executive Officer

      Pursuant to the  requirements of the Securities  Exchange Act of 1934, the
following  persons on behalf of the  Registrant and in the capacities and on the
dates indicated have signed this report below.

<TABLE>
<CAPTION>
Signature                              Title                                            Date
---------                              -----                                            ----
<S>                                    <C>                                              <C>
/s/ BRUCE KORMAN                       President, Chief Executive Officer               September 13, 2005
----------------------------------     And Director (Principal Executive Officer)
Bruce Korman


/s/ EDMUND KING                        Chief Financial Officer
----------------------------------     (Principal Financial Officer)                    September 13, 2005
Edmund King


/s/ RICHARD MILLER                     Director                                         September 13, 2005
----------------------------------
Richard Miller


/s/ ROBERT FAGENSON                    Director                                         September 13, 2005
----------------------------------
Robert Fagenson


/s/ KEVIN WALLS                        Director                                         September 13, 2005
----------------------------------
Kevin Walls
</TABLE>


                                       72