<PAGE>
                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

(Mark One)
[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

         For the quarterly period ended:  March 31, 2001
                                          --------------
                                       OR

[ ]      TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

         For the transition period from:           to
                                         ---------    ---------

Commission file number:  000-25855
                         ---------

                             VendingData Corporation
--------------------------------------------------------------------------------
                     (Exact name of small business issuer as
                            specified in its charter)

            Nevada                                               91-1696010
--------------------------------                             -------------------
  (State or other jurisdiction                                (I.R.S. Employer
of incorporation or organization)                            Identification No.)

                  6830 Spencer Street, Las Vegas, Nevada 89119
--------------------------------------------------------------------------------
                    (Address of principal executive offices)

                                 (702) 733-7195
--------------------------------------------------------------------------------
                           (Issuer's telephone number)


--------------------------------------------------------------------------------
   (Former name, former address and former fiscal year, if changed since last
                                    report)

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

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

         Check whether the registrant filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by court.

        YES            NO
             --------      -------

                      APPLICABLE ONLY TO CORPORATE ISSUERS

         State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date:

    11,079,801 shares of common stock, $.001 par value, as of April 30, 2001
--------------------------------------------------------------------------------

           Transitional Small Business Disclosure Format (check one);

        YES            NO    X
            --------      --------

<PAGE>
<TABLE>

                                                            FORM 10-QSB

                                                         TABLE OF CONTENTS

<CAPTION>

                                                                                                                     PAGE
                                                                                                                    NUMBER
                                                                                                                    ------
<S>                                                                                                                   <C>
PART I.  FINANCIAL INFORMATION

     Item 1.      Financial Statements                                                                                 3

                  Balance Sheet                                                                                        3

                  Statement of Operations                                                                              4

                  Statement of Cash Flows                                                                              5

                  Notes to Financial Statements                                                                        6

     Item 2.      Management's Discussion and Analysis of Financial Condition and Results of Operations                8

PART II. OTHER INFORMATION

     Item 1.      Legal Proceedings                                                                                   16

     Item 2.      Changes in Securities and Use of Proceeds                                                           16


     Item 3.      Defaults Upon Senior Securities                                                                     17


     Item 4.      Submission of Matters to a Vote of Security Holders                                                 17


     Item 5.      Other Information                                                                                   17


     Item 6.      Exhibits and Reports on Form 8-K                                                                    17


SIGNATURE                                                                                                             18

EXHIBIT INDEX                                                                                                         19

</TABLE>

<PAGE>


PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.
<TABLE>

                             VENDINGDATA CORPORATION
                                  BALANCE SHEET
<CAPTION>

                                                                                March 31, 2001 December 31, 2000
                                                                                 -------------   -------------
                                     ASSETS                                       (UNAUDITED)
<S>                                                                              <C>             <C>
Current assets:
   Cash and cash equivalents                                                     $    121,188    $    432,070
   Accounts receivable, trade                                                         798,118         885,338
   Other receivables                                                                   33,604          45,445
   Inventories                                                                      2,116,647       1,539,005
   Prepaid expenses                                                                    34,692          55,142
                                                                                 -------------   -------------
     Total current assets                                                           3,104,249       2,957,000

Property and equipment, including revenue producing equipment, at cost, net of
   accumulated depreciation of  $1,493,648 and $1,312,591, respectively             2,357,556       2,440,508

Intangible assets, at cost, net of
   accumulated amortization of $101,463 and $93,054, respectively                     247,569         239,186
Deferred interest                                                                     614,262         631,672
Deposits                                                                              628,928         591,266
                                                                                 -------------   -------------
                                                                                 $  6,952,564    $  6,859,632
                                                                                 =============   =============

                        LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Notes and credit line payable                                                 $  1,516,000    $  2,275,358
   Current portion of leases payable                                                2,022,901       1,715,223
   Accounts payable                                                                 1,169,998         952,512
   Accrued expenses                                                                   346,921         405,722
   Accrued interest                                                                   421,578         310,152
   Customer deposits                                                                  371,543         281,253
                                                                                 -------------   -------------
     Total current liabilities                                                      5,848,941       5,940,220

Leases payable                                                                      2,733,219       3,030,572
Convertible debt                                                                    3,300,000       3,300,000
Stockholder loans                                                                   1,711,194         151,836
Deferred charges                                                                      170,461         198,769
                                                                                 -------------   -------------
     Total liabilities                                                             13,763,815      12,621,397

Stockholders' equity:
   Common stock, $.001 par value,
     40,000,000 shares authorized, 11,079,801 shares and
     10,746,144 shares issued and outstanding, respectively                            11,080          10,855
   Additional paid-in capital                                                      17,823,531      17,238,756
   Deficit accumulated during development stage                                   (24,645,862)    (23,011,376)
                                                                                 -------------   -------------
     Total stockholders' equity                                                    (6,811,251)     (5,761,765)
                                                                                 -------------   -------------
                                                                                 $  6,952,564    $  6,859,632
                                                                                 =============   =============

                             See accompanying notes to unaudited financial statements.


                                                        3
</TABLE>

<PAGE>

                             VENDINGDATA CORPORATION
                             STATEMENT OF OPERATIONS
                THREE MONTHS MONTHS ENDED MARCH 31, 2001 AND 2000
                                   (UNAUDITED)


                                                   Three Months Ended March 31,
                                                     2001               2000
                                                 -------------     -------------

Sales                                            $    612,780         1,367,961
Rental income                                         292,017           323,979
Other income                                                -            17,894
                                                 -------------     -------------
                                                      904,797         1,709,834

Cost of sales                                       1,149,693         1,265,422
                                                 -------------     -------------
Gross margin                                         (244,896)          444,412

Selling, general and administrative                   717,455           935,646
Research and development                              238,342           380,970
                                                 -------------     -------------
(Loss) from operations                             (1,200,693)         (872,201)

Interest expense, net                                 302,031           171,861
Interest expense - related parties                    131,749            42,615
                                                 -------------     -------------
      Total interest expense net                      433,780           214,476
                                                 -------------     -------------
(Loss) before income taxes                         (1,634,473)       (1,086,677)
Provision for income taxes                                 14                 -
                                                 -------------     -------------
Net income (loss)                                $ (1,634,487)     $ (1,086,677)
                                                 =============     =============

Basic earnings (loss) per share                  $      (0.15)     $      (0.10)
                                                 =============     =============

Weighted average shares outstanding                11,079,801        10,749,144
                                                 =============     =============

            See accompanying notes to unaudited financial statements.

                                       4

<PAGE>
<TABLE>
                             VENDINGDATA CORPORATION
                             STATEMENT OF CASH FLOWS
                   THREE MONTHS ENDED MARCH 31, 2001 AND 2000
                                   (UNAUDITED)
<CAPTION>
                                                            Three Months Ended
                                                        ---------------------------
                                                       March 31, 2001  March 31, 2000
                                                        ------------   ------------
<S>                                                     <C>            <C>
Net (loss)                                              $(1,634,487)   $(1,086,677)
   Adjustments to reconcile net income (loss) to net
     cash provided by operating activities:
     Depreciation and amortization                          189,466        192,493
     Amortization of deferred interest                       73,918         85,968
   Changes in assets and liabilities:
     (Increase) decrease in trade accounts receivable        87,220     (1,269,998)
     (Increase) decrease in other receivables                11,841        165,810
     (Increase) decrease in inventory                      (577,642)       (85,645)
     (Increase) decrease in prepaid expenses                 20,450        201,310
     Increase (decrease) in accounts payable                217,486        160,806
     Increase (decrease) in accrued expenses                 52,625         57,528
     Increase (decrease) in customer deposits                90,290         (2,435)
     Increase (decrease) in deferred charges                (28,309)             -
                                                        ------------   ------------
       Total adjustments                                    137,346       (494,163)
                                                        ------------   ------------

Net cash (used in) operating activities                  (1,497,141)    (1,580,839)
                                                        ------------   ------------

Cash flows from investing activities:
   Acquisition of plant and equipment                      (106,516)       (44,345)
   Equipment produced and held for rental                         2              -
   Increase in patents and trademarks                        (8,383)       (18,881)
   Deposits                                                 (37,662)       (75,754)
                                                        ------------   ------------
Net cash (used in) investing activities                    (152,559)      (138,980)
                                                        ------------   ------------

Cash flows from financing activities:
   Common stock sold for cash                               585,000              -
   Repayment of stockholder loans                         1,559,358        (25,558)
   Proceeds from leases payable                             386,346        841,465
   Repayment of leases payable                             (432,529)      (284,141)
   Proceeds from convertible debentures                           -        200,000
   Proceeds from notes payable                             (759,358)             -
                                                        ------------   ------------

Net cash provided by financing activities                 1,338,817        731,766
                                                        ------------   ------------

Increase (decrease) in cash                                (310,883)      (988,053)
Cash and cash equivalents, beginning of period              432,070      1,169,924
                                                        ------------   ------------
   Cash and cash equivalents, end of period             $   121,187    $   181,871
                                                        ============   ============

            See accompanying notes to unaudited financial statements.

                                       5
</TABLE>

<PAGE>

                             VendingData Corporation
                          Notes to Financial Statements
                                   (Unaudited)

NOTE 1 - BASIS OF PRESENTATION.

The accompanying unaudited financial statements of VendingData Corporation (the
"Company") and its wholly-owned subsidiaries (collectively with the Company, the
"Company") have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions
incorporated in Regulation S-B of the Securities and Exchange Commission.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
adjustments and accruals) considered necessary for a fair presentation have been
included.

The results of operations for the periods presented are not necessarily
indicative of the results to be expected for the full year. The accompanying
financial statements should be read in conjunction with the Company's audited
financial statements for the year ended December 31, 2000, as included in the
Company's Annual Report on Form 10-KSB as filed with the Securities and Exchange
Commission on March 31, 2001.

Certain reclassifications have been made to amounts presented in prior periods
for comparability to the current period presentation.

Basic loss per share was computed using the weighted average number of common
shares outstanding.

NOTE 2 - STATEMENT REGARDING COMPUTATION OF LOSS PER SHARE.

Fully diluted loss per share excludes any dilutive effects of options, warrants
and convertible securities. Fully diluted loss per share is not presented
because the effect would be anti-dilutive.

NOTE 3 - DEBT AND WARRANTS.

The Company has obtained and drawn the full amount of a $500,000 line of credit
in connection with an agreement with its investment-banking firm, which is
engaged in the private placement of securities for the Company. The Company has
issued a total of 250,000 warrants to purchase common stock at $2.50 in relation
to the line of credit. The Company also received $150,000 each ($300,000 total)
from two affiliates of its investment banking firm in the form of short term
notes; $150,000 of the proceeds from these notes constituted a portion of the
purchase price for the Company's acquisition of assets formerly belonging to
Spinteknology, Inc., Spintek Gaming Technologies, Inc., and Spintek Gaming
("Spintek"). The remaining proceeds from these notes were used for general
working capital purposes.

On February 1, 2001, 273,000 warrants to purchase commons stock, which were held
by holders of the Company's convertible notes due 2004, expired. In March 2001,
and as a portion of the purchase price for the acquisition of assets formerly
belonging to Spintek, the Company issued warrants to purchase 225,000 shares of
common stock, exercisable at $10 per share.

NOTE 4 - PLACEMENT OF COMMON STOCK.

In March 2001, and as a portion of the purchase price for the acquisition of
assets formerly belonging to Spintek, the Company issued 225,000 shares of
restricted common stock to a third party who purchased these assets from the
bankruptcy estate of Spintek.

                                       6
<PAGE>


NOTE 5 - EQUIPMENT FINANCING.

For the three months ending March 31, 2001, the Company received proceeds of
$386,346 from a third-party leasing company through which the Company has
financed most of its furniture, equipment, and tooling. The leases have a
mandatory buyout and terms ranging from 24 to 39 months.

NOTE 6 - TECHNOLOGY ACQUISITION

On March 26, 2001, the Company purchased the tangible and intangible assets
belonging to Spintek out of the bankruptcy proceedings involving Spintek. These
assets include equipment, supplies, inventory, and intellectual property,
including all patent rights, pending patent applications, registered trademarks,
pending trademark applications, copyrights, and other assets related to a slot
machine hopper and the technology for determining its contents and for
transmitting collection and accounting data under the registered names
AccuSystem(R), including AccuHopper(R), the AccuBoard, and the AccuDrop. The
Company plans to reintroduce these products under the trade name
SecureHopper(TM). As payment for the assets, the Company: (i) paid $150,000 in
cash; (ii) issued 225,000 shares of restricted common stock with piggyback
registration rights; (iii) issued warrants exercisable into 225,000 share of
restricted common stock at an exercise price of $10.00 per underlying share; and
(iv) agreed to pay 50% of net proceeds in excess of $175,000 from the sale of
inventory from the assets purchased.





                                       7
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

STATEMENT ON FORWARD-LOOKING INFORMATION

         Certain information included herein contains statements that may be
considered forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), such as
statements relating to plans for future expansion, capital spending, future
operations, sources of liquidity and financing sources. Such statements refer to
events that could occur in the future and may be identified by the use of words
such as "intend," "plan," "believe," correlative words, and other expressions
indicating that future events are contemplated. Such forward-looking information
involves important risks and uncertainties that could significantly affect
anticipated results in the future, and accordingly, such results may differ from
those expressed in any forward-looking statements made herein. These risks and
uncertainties include, but are not limited to, those relating to liquidity
requirements for VendingData Corporation (the "Company"), the continued growth
of the gaming industry, the success of the Company's product-development,
marketing and sales activities, vigorous competition in the gaming industry,
dependence on existing management, gaming regulations (including actions
affecting licensing and product approvals), leverage and debt service (including
sensitivity to fluctuations in interest rates), domestic or global economic
conditions, and changes in federal or state tax laws or the administration of
such laws. For a description of additional risk factors and information related
to forward-looking statements, see "Risk Factors and Forward-Looking
Information" below.

OVERVIEW

         The Company's primary business is the development, manufacturing and
marketing of various concepts and products focused primarily on products that
increase security, productivity, and profitability for the gaming industry.

         As of March 31, 2001, the Company had placed 512 of its Random Ejection
Shufflers(TM) ("Shufflers") under rental contracts. The Company maintains parts
inventories required to build additional Shufflers. On March 26, 2001, the
Louisiana State Police, Riverboat Gaming Division, approved the Company's
SecureDrop(TM) 2000 and Mobile Scale Systems.

         The following discussion summarizes the Company's results of operations
for the three months ended March 31, 2001 and 2000, and the Company's liquidity
and capital resources.

RESULTS OF OPERATIONS

     THREE MONTHS ENDED MARCH 31, 2001 AND 2000

         REVENUES. For the three months ended March 31, 2001, the Company
generated total revenues of $904,797 compared to $1,709,834 for the three months
ended March 31, 2000. The revenues for the three months ended March 31, 2001,
consisted of Shuffler rentals of $292,017, Shuffler sales of $43,450, and
SecureDrop(TM) sales of $569,330. The decrease of $802,037, or 46.9%, in
revenues from the three months ended March 31, 2000, to the three months ended
March 31, 2001, resulted primarily from the decrease of $755,181 in sales over
the same period. Despite the decrease in revenues, the Company believes revenue
will increase through additional SecureDrop(TM) sales, as the SecureDrop(TM)
modules gain additional regulatory approvals, through sales of Shufflers through
international distributors and through continued Shuffler rental.

                                       8
<PAGE>

         COST OF SALES. For the three months ended March 31, 2001, the cost of
sales was $1,149,693 compared to $1,265,422 for the three months ended March 31,
2000, a decrease of $115,729, or 9.1%. The cost of sales for the three months
ended March 31, 2001, consisted of approximately $437,552 for the Company's
SecureDrop(TM) products, $106,150 for depreciation expense associated with the
Shufflers held for rental, $250,916 for costs related to servicing the Shufflers
held for rental, $16,400 for costs related to sales of the Shuffler, and
$338,675 for labor and other manufacturing costs. Although the decrease in cost
of sales was due to the decline in SecureDrop(TM) sales, this decline was
partially offset by increased Shuffler service costs.

         GROSS MARGIN. For the three months ended March 31, 2001, the gross
margin was $(244,896) compared to $444,412 for the three months ended March 31,
2000, a decrease of $689,308. As a result, the gross margin percentage on
revenues for the three months ended March 31, 2001 was (27.0)% compared to 26.0%
for the three months ended March 31, 2000. The decrease in gross margin and in
gross margin percentage resulted primarily from the decrease in revenues, an
increase in costs related to servicing the Shufflers held for rental and an
increase in labor and other manufacturing costs.

         SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. For the three months
ended March 31, 2001, selling, general and administrative expenses decreased
approximately $218,191, or approximately 23%, to $717,455, compared to $935,646
for the three months ended March 31, 2000. For the three months ended March 31,
2001, selling, general and administrative expenses included: salaries and
related costs of $337,204; advertising and marketing services of $40,443; travel
and entertainment costs of $54,092; printing and office expenses of $17,514;
depreciation and amortization of $49,990; office rent and utilities of $111,607;
professional fees of $20,618; bad debt accrual of $60,000 and $25,987 in other
miscellaneous expenses. The decrease for the quarter is primarily due to
decreases in salaries, gaming industry show costs, printing and travel and
entertainment expenses.

         RESEARCH AND DEVELOPMENT. For the three months ended March 31, 2001,
research and development expenses decreased $142,628, or approximately 37%, to
$238,342, compared to $380,970 for the three months ended March 31, 2000. The
decrease is due to decreased expenditures on basic SecureDrop(TM) research and
development.

         INTEREST EXPENSE, NET. For the three months ended March 31, 2001, the
Company incurred interest expenses, net of interest income, of $433,780 compared
to $214,476 for the three months ended March 31, 2000, an increase of $219,304,
or 102%. This increase was attributable to the increased borrowings by the
Company.

         NET INCOME (LOSS). For the three months ended March 31, 2001, the
Company had a net loss of $1,634,487 compared to a net loss of $1,086,677 for
the three months ended March 31, 2000, an increase of $547,810. The increase in
net loss was primarily due to a decrease in SecureDrop(TM) sales while awaiting
regulatory approvals, a decrease in gross margin and an increase in total
interest expense, net. Basic loss per share was $.15, based on 11,079,801
weighted average shares outstanding, for the three months ended March 31, 2001,
compared to $.10, based on 10,746,144 weighted shares outstanding, for the three
months ended March 31, 2000.

LIQUIDITY AND CAPITAL RESOURCES

         OVERVIEW. The Company has generated cash flow deficits from operations,
including cash used in operating activities of $1,497,141 and $1,580,839 in the
three months ended March 31, 2001 and 2000, respectively. To fund development
activities, the Company used cash in investing activities of $152,559 and
$138,980 in the three months ended March 31, 2001 and 2000, respectively.
Consequently, the Company has been substantially dependent on cash from


                                       9
<PAGE>

financing activities to fund development and operating activities, receiving
cash from financing activities of $1,338,817 and $731,766 in the three months
ended March 31, 2001 and 2000, respectively. The Company will continue to
require cash from financing activities for both its current operating needs and
to fund its anticipated expansion into non-gaming sales markets until operations
begin to generate sufficient cash flow to support such cash requirements.

         CASH AND WORKING CAPITAL. At March 31, 2001, the Company had cash, cash
equivalents and investments of $121,188, compared to $432,070 at December 31,
2000. At March 31, 2001, the Company's working capital was $(2,744,692),
compared to $(2,983,220) at December 31, 2000. At March 31, 2001, the Company's
current ratio, i.e. the ratio of current assets to current liabilities, was .53
compared to .50 at December 31, 2000. Until the Company's normalized cash flows
from operations are achieved, the Company will be relying upon existing cash
balances, accounts receivable collections, placements of debt or equity and
institutional sources of debt and equity capital for working capital purposes.

         CASH FLOW. For the three months ended March 31, 2001, net cash used in
operating activities was $1,497,141, compared to $1,580,839 for the three months
ended March 31, 2000. Cash used in operating activities during the three months
ended March 31, 2001, is net of depreciation and amortization of $189,466,
compared to $192,493 for the three months ended March 31, 2000 and amortization
of deferred interest of $73,918 for the three months ended March 31, 2001,
compared to $85,968 for the three months ended March 31, 2000 and reflects
decreases in accounts receivable of $87,220, compared to an increase of
$1,269,998 for the three months ended March 31, 2000; increases in inventory of
$577,642, compared to $85,645 for the three months ended March 31, 2000; a
decrease in prepaid expenses of $20,450, compared to a decrease of $201,310 for
the three months ended March 31, 2000; decreases in other receivables of
$11,841, compared to a decrease of $165,810 for the three months ended March 31,
2000; increases in accounts payable of $217,486, compared to an increase of
$160,806 for the three months ended March 31, 2000; increases in accrued
expenses of $52,625, compared to an increase of $57,528 for the three months
ended March 31, 2000; increases in customer deposits of $90,290, compared to a
decrease of $2,435 for the three months ended March 31, 2000; and a decrease in
deferred charges of $28,309, compared to $0 for the three months ended March 31,
2000.

         For the three months ended March 31, 2001, the Company used net cash
from investing activities of $152,559 compared to $138,980 for the three months
ended March 31, 2000. Cash used in investing activities for the three months
ended March 31, 2001 was used primarily for the acquisition of equipment and
tooling in the amount of $106,516, the acquisition of patents and trademarks in
the amount of $8,383 and deposits of $37,662.

         For the three months ended March 31, 2001, net cash provided by
financing activities was $1,338,817 compared to $731,766 for the three months
ended March 31, 2000. The increase is attributable to the private placement of
several notes with private individuals for working capital. For the three months
ended March 31, 2001, cash from financing activities consisted of $585,000 from
the private placement of common stock and proceeds of $386,346 from leases
payable, reduced by the repayment of leases payable of $432,529, the repayment
of shareholder loans of $1,559,358 and $759,358 from the private placement of
notes.

         DEBT AND WARRANTS. The Company has obtained and drawn the full amount
of a $500,000 line of credit in connection with an agreement with Josephthal &
Co. Inc., its investment-banking firm ("Josephthal"), which is engaged in the
private placement of securities for the Company. The Company has issued a total
of 250,000 warrants to purchase common stock at $2.50 in relation to the line of
credit. The Company also received $150,000 ($300,000 total) from two affiliates
of Josephthal in the form of short term notes.

                                       10
<PAGE>

         On February 1, 2001, warrants to purchase 273,000 shares of common
stock, which were held by holders of the Company's convertible notes due 2004,
expired.

     EQUIPMENT FINANCING. For the three months ending March 31, 2001, the
Company received proceeds of $386,346 from a third-party leasing company through
which the Company has financed most of its furniture, equipment, and tooling.
The leases have a mandatory buyout and terms ranging from 24 to 39 months.

OUTLOOK

         Based on presently known commitments and plans, the Company believes
that it will be able to fund its operations and required expenditures for the
remainder of 2001 through cash on hand, cash flow from operations, a $500,000
bridge loan from an affiliate of Josephthal, and cash from private placements of
debt or equity or from lease financing sources, including the Company's proposed
private placement of secured senior convertible notes through Josephthal. In the
event that such sources are insufficient or unavailable, the Company will need
to seek cash from public or private placements of debt or equity, institutional
or other lending sources, sell certain assets or change operating plans to
accommodate such liquidity issues. No assurances can be given that the Company
will successfully obtain necessary liquidity sources necessary to fund the
Company's operations in the upcoming year.


                                       11
<PAGE>


RISK FACTORS AND FORWARD-LOOKING INFORMATION

         THIS REPORT CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS WITHIN THE
MEANING OF SECTION 27A OF THE SECURITIES ACT AND SECTION 21E OF THE EXCHANGE
ACT. SUCH STATEMENTS REFER TO EVENTS THAT COULD OCCUR IN THE FUTURE AND MAY BE
IDENTIFIED BY THE USE OF WORDS SUCH AS "INTEND," "PLAN," "BELIEVE," CORRELATIVE
WORDS, AND OTHER EXPRESSIONS INDICATING THAT FUTURE EVENTS ARE CONTEMPLATED.
SUCH STATEMENTS ARE SUBJECT TO INHERENT RISKS AND UNCERTAINTIES, AND ACTUAL
RESULTS COULD DIFFER MATERIALLY FROM THOSE PROJECTED IN THE FORWARD-LOOKING
STATEMENTS AS A RESULT OF CERTAIN OF THE RISK FACTORS SET FORTH BELOW AND
ELSEWHERE IN THIS QUARTERLY REPORT.

         ADDITIONAL FINANCING WILL BE REQUIRED. Based on presently known
commitments and plans, the Company believes that it will be able to fund its
operations and required expenditures for the remainder of 2001 through cash on
hand, cash flow from operations, a $500,000 bridge loan from an affiliate of
Josephthal, and cash from private placements of debt or equity or from lease
financing sources, including the Company's proposed private placement of secured
senior convertible notes through Josephthal. In the event that such sources are
insufficient or unavailable, the Company will need to seek cash from public
placements of debt or equity, institutional or other lending sources, sell
certain assets or change operating plans to accommodate such liquidity issues.
No assurances can be given that the Company will successfully obtain necessary
liquidity sources necessary to fund the Company's operations in the upcoming
year.

         LIMITED OPERATING RESULTS; NO INDEPENDENT MARKET RESEARCH OF POTENTIAL
DEMAND FOR CURRENT OPERATIONS. Until January 2000, the Company was in the
development stage and had limited sales of its products. The Company's
activities had been limited to analyzing the gaming industry, consulting with
persons in the gaming industry, negotiating interim financing arrangements,
developing products, establishing a distribution network for its products,
marketing its products to the gaming industry, manufacturing its products and
commencing product sales. Although the Company anticipates significant sales
development and revenue growth during 2001, there is no guarantee that the
Company will generate sufficient revenue to sustain its operations. No
independent organization has conducted market research providing management with
independent assurance from which to estimate potential demand for the Company's
business operations.

         COINLESS GAMING. Certain gaming operators have tested and employed as
part of their current operations certain gaming devices that have eliminated the
use of coin or tokens, or use a combination of coin and "cashless" vouchers. The
acceptance and expansion of coinless gaming devices may reduce the demand for
the SecureDrop(TM) System and may adversely affect the Company's operations in
the future.

         FOCUS ON NON-GAMING MARKETS. The Company has recently begun to explore
the shift of its focus to the non-gaming application of certain of its products
and technology. The refocus to non-gaming markets will have significant risks
for the Company, including, but not limited to, management's lack of experience
in non-gaming markets, the need to hire sales and technical persons with
expertise in non-gaming markets, additional research, development, distribution
and marketing expenses necessary to proceed into non-gaming application of the
Company's products and technology, significant competitive factors and forces
applicable to non-gaming markets and a variety of other factors. There is no
assurance that the Company will be able to successfully execute the strategy to
refocus a significant portion of its marketing and product technology strategies
to the non-gaming markets.

                                       12
<PAGE>

         REGULATION. The gaming industry is a highly regulated industry and is
subject to numerous statutes, rules and regulations administered by the gaming
commissions or similar regulatory authorities of each jurisdiction. Generally,
the Company and other entities which seek to introduce gaming products or
concepts into such jurisdictions may be required to submit applications relating
to their activities or products (including detailed background information
concerning controlling persons within their organization) which are then
reviewed for approval. The Company may incur significant expenses in seeking to
obtain licenses for its gaming products and concepts, and no assurance can be
given that its products will be approved in any particular jurisdiction. The
failure to obtain such approval in any jurisdiction in which the Company may
seek to introduce its products or concepts could have a material adverse effect
on the Company's business.

         INFLUENCE BY CONTROLLING STOCKHOLDERS. The Company's executive officers
and members of the Company's Board of Directors beneficially own 8,957,010.5
shares of common stock, or approximately 73.2% of the outstanding shares of the
Company's common stock, assuming exercise of options, warrants and convertible
debentures. These stockholders have the power to influence all matters requiring
approval by the Company's stockholders, including the election of directors and
approval of mergers and other significant corporate transactions. This
concentration of ownership also has the effect to delay, prevent or expedite, as
the case may be, a change in control of the Company.

         UNCERTAINTY OF MARKET FOR COMPANY'S PRODUCTS. The Company has only
recently completed development and begun distribution of the Shufflers and the
SecureDrop(TM) System. Although the market appears to be receptive to the
Company's products, there is no guarantee that the market will remain receptive
and that the Company's future products will be received by the market in the
same manner.

         CUSTOMER PREFERENCE FOR ONE SHUFFLER VENDOR. There is no guarantee the
Company's development of the specialty shufflers will be successfully completed.
The failure to successfully complete the development and marketing of the
specialty shuffler could negatively impact the Company's ability to distribute
its remaining shuffler products. Since the Company's customers have demonstrated
a strong preference to conduct business with only one provider of automatic
shuffler products, the Company's inability to complete its shuffler product line
may adversely affect the Company.

         CONTINUED CUSTOMER ACCEPTANCE. To the Company's knowledge, although the
Company's shufflers have not proved vulnerable to card counters or expert
players, and although the Company's casino customers have not experienced
financial loss from their use of the shufflers, there is no guaranty that the
shufflers will not become vulnerable to card counters or expert players or that
the use of the Company's shufflers will not result in financial losses for the
Company's customers. The occurrence of such events could have a material adverse
effect on the Company.

         BENEFIT TO MANAGEMENT. The Company may, in the future, compensate the
Company's management with substantial salaries and other benefits. The payment
of future larger salaries, commissions and the costs of these benefits may be a
burden on the Company and may be a factor in limiting or preventing the Company
from achieving profitable operations in the future. However, the Company would
not continue to compensate management with such substantial salaries and other
benefits under circumstances where to do so would have a material negative
effect on the Company's financial condition.

         NO DIVERSIFICATION. To date, the Company has intended to manufacture
and market certain gaming products and concepts. Therefore, the Company's
financial viability has depended almost exclusively on its ability to generate
revenues from its operations, and the Company has not had the benefit of
reducing its financial risks by relying on revenues derived from other
operations.

         ILLIQUID INVESTMENT; RISK OF LOSS. The capital stock of the Company is
at risk of complete loss if the Company's operations are unsuccessful. In
addition, there has been no trading market for the Company's common stock. There
can be no assurance that the Company's stock will ever be quoted, that an active
trading and/or a liquid market will ever develop or, if developed, that it will
be maintained. There are material risks in connection with the Company's common
stock.

                                       13
<PAGE>

         COMPETITION. There is significant competition in the gaming industry.
The Company competes with established companies and other entities (many of
which possess substantially greater resources than the Company). Almost all of
the companies with which the Company competes are substantially larger, have
more substantial histories, backgrounds, experience and records of successful
operations, greater financial, technical, marketing and other resources, more
employees and more extensive facilities than the Company now has, or will have
in the foreseeable future. It is also likely that other competitors will emerge
in the near future. There is no assurance that the Company will continue to
compete successfully with other established gaming product manufacturers. The
Company shall compete on the basis of quality and price. Inability to compete
successfully might result in increased costs, reduced yields and additional
risks to the investors herein.

         RISKS OF PROPRIETARY PRODUCTS AND GAMES. The Company places its
proprietary products, except SecureDrop(TM), in casinos under short-term lease
arrangements, making these products susceptible to replacement due to pressure
from competitors, changes in economic conditions, obsolescence, and declining
popularity. The Company intends to maintain and expand the number of installed
proprietary products through enhancement of existing products, introduction of
new products, and customer service, but there can be no assurance that these
efforts will be successful. Introduction of new proprietary products involves
significant risks, including whether the Company will be able to place its
products with casinos and non-gaming industries, the economic terms on which
these industries will accept the products, and the popularity of the products.
The Company has filed trademark and patent applications to protect its
intellectual property rights in certain of its trademarks and innovations on
certain of its proprietary products, respectively. At this time, however, the
United States Patent and Trademark Office has not acted upon all of these
applications. There can be no assurance that the pending patent or trademark
applications will actually issue as patents or trademark registrations or that
any of these rights will not be infringed by others. Certain of the Company's
products and games do or may have independent protection of the game itself, and
it is possible that competitors could produce a similar product or game without
violating any legal rights of the Company. The Company intends to promote
aggressively its trademarks to build goodwill and customer loyalty. There can be
no assurance, however, that the Company will be successful in these efforts,
that innovations will be subject to legal protection, or that the innovations
will give a competitive advantage to the Company.

         LACK OF DIVIDENDS. There can be no assurance that the operations of the
Company will become profitable. At the present time, the Company intends to use
any earnings which may be generated to finance the growth of the Company's
business.

         DEPENDENCE ON KEY INDIVIDUALS. The future success of the Company is
highly dependent upon the management skills of its key employees and the
Company's ability to attract and retain qualified key employees. The inability
to obtain and employ these individuals would have a serious effect upon the
business of the Company. The Company has entered into an employment agreement
with Steven J. Blad. There can be no assurance that the Company will be
successful in retaining its key employees or that it can attract or retain the
additional skilled personnel required.

         VULNERABILITY TO FLUCTUATIONS IN THE ECONOMY. The demand for the
Company's products is dependent on, among other things, certain economic and
business factors to which the economy is subject. These factors are beyond the
control of the Company. Such factors include, without limitation: (a) general
economic conditions, such as inflation, business cycle fluctuation, interest
rates, and the availability of financing; (b) the possibility of recession; (c)
increases in operating expenses, taxes, insurance or maintenance costs which
might not be offset by increased revenues from the Company's business; and (d)
international currency fluctuations.

                                       14
<PAGE>

         INFLUENCE BY JOSEPHTHAL. On December 14, 2000, the Company entered into
an agreement with Josephthal to act as its exclusive agent with respect to the
Company's proposed private placement of convertible debentures (the "Private
Placement"). As compensation, the Company has agreed to provide Josephthal with
a non-refundable retainer of $25,000, a 10% transaction fee for all proceeds
generated in the Private Placement from investors who are not directors or 5%
stockholders of the Company, a 5% transaction fee for all proceeds generated in
the Private Placement from investors who are directors or 5% stockholders of the
Company, warrants to purchase 133,500 shares of the Company's common stock
exercisable at $3.00 per underlying share and warrants to purchase up to an
additional 333,750 shares of the Company's common stock exercisable at $3.00 per
underlying share. In addition, the Company has agreed to grant to Josephthal a
break-up fee of $200,000 upon the closing of a control transaction, has provided
to Josephthal a one-year right of first refusal with respect to any subsequent
private placement of the Company's securities. The agreement with Josephthal has
a term of six months that is extended another twelve months upon the
consummation of the Private Placement prior to the expiration of the initial
six-month period. Additionally the Company has entered into a $500,000 secured
credit facility with an affiliate of Josephthal.

         The credit facility has a one-year term, bears an interest rate of 10%
per annum, is secured by the Company's accounts receivable, investment property,
instruments and chattel paper, equipment, inventory and all proceeds related to
the same, and is subject to mandatory prepayment upon the consummation of a
registered offering with minimum gross proceeds of $5,000,000, a change of
control of the Company or the consummation of a private placement with minimum
gross proceeds of $2,000,000. As part of the credit facility, the Company issued
a warrant to purchase 50,000 shares of the Company's common stock at an exercise
price of $2.50 and, in conjunction with a draw pursuant to the credit line, has
agreed to issue warrants to purchase shares of the Company's common stock equal
to the amount of the draw divided by $2.50. As of March 1, 2001, the Company had
drawn against the entire amount of the credit line.

         As a result of the Company's agreements and obligations with
Josephthal, Josephthal may be able to influence the Company's future operations
and restrict the Company's access to capital markets. If the Company's ability
to raise additional capital is impaired, the Company may not be able to support
its operations in the future.

              "PENNY" STOCK REGULATION OF BROKER-DEALER SALES OF COMPANY
SECURITIES. The Company does not presently meet the requirements for a NASDAQ
Small Cap Market listing. The OTC Bulletin Board has no quantitative written
standards and is not connected with the NASD. Until the Company obtains a
listing on the NASDAQ Small Cap Market, if ever, the Company's securities may be
covered by Rule 15g-9 under the Exchange Act which imposes additional sales
practice requirements on broker-dealers who sell such securities to persons
other than established customers and institutional accredited investors
(generally institutions with assets in excess of $5,000,000 or individuals with
net worth in excess of $1,000,000 or annual income exceeding $200,000 or
$300,000 jointly with their spouse). For transactions covered by the rule, the
broker-dealer must furnish to all investors in penny stocks, a risk disclosure
document required by Rule 15g-9 of the Exchange Act, make a special suitability
determination of the purchaser and have received the purchaser's written
agreement to the transaction prior to the sale. In order to approve a person's
account for transactions in penny stock, the broker or dealer must (i) obtain
information concerning the person's financial situation, investment experience
and investment objectives; (ii) reasonably determine, based on the information
required by paragraph (i) that transactions in penny stock are suitable for the


                                       15
<PAGE>

person and that the person has sufficient knowledge and experience in financial
matters that the person reasonably may be expected to be capable of evaluating
the rights of transactions in penny stock; and (iii) deliver to the person a
written statement setting forth the basis on which the broker or dealer made the
determination required by paragraph (ii) in this section, stating in a
highlighted format that it is unlawful for the broker or dealer to effect a
transaction in a designated security subject to the provisions of paragraph (ii)
of this section unless the broker or dealer has received, prior to the
transaction, a written agreement to the transaction from the person, and stating
in a highlighted format immediately preceding the customer signature line that
the broker or dealer is required to provide the person with the written
statement and the person should not sign and return the written statement to the
broker or dealer if it does not accurately reflect the person's financial
situation, investment experience and investment objectives and obtain from the
person a manually signed and dated copy of the written statement. A penny stock
means any equity security other than a security (i) registered, or approved for
registration upon notice of issuance on a national securities exchange that
makes transaction reports available pursuant to 17 CFR 11Aa3-1; (ii) authorized
or approved for authorization upon notice of issuance, for quotation in the
NASDAQ system; (iii) that has a price of five dollars or more; or (iv) whose
issuer has net tangible assets in excess of $2,000,000 demonstrated by financial
statements dated less than fifteen months previously that the broker or dealer
has reviewed and has a reasonable basis to believe are true and complete in
relation to the date of the transaction with the person. Consequently, the rule
may affect the ability of broker-dealers to sell the Company's securities.

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

         On November 22, 1999, Moll Industries, Inc. filed a complaint (Case No.
817296) against the Company in the Superior Court of the State of California for
the County of Orange, California. The parties have entered into a settlement
agreement, the fulfillment of which will lead to the dismissal of this
litigation.

         On May 18, 2000, Heath Electronics Manufacturing Corporation filed a
complaint (Case No. CV OC 00-02422D) against the Company in the District Court
of the Fourth Judicial District of the State of Idaho, Ada County. The Company
has answered the Complaint, which requests payment for goods in the amount of
$89,569 plus interest and costs, and has filed a counterclaim alleging claims
for breach of contract, breach of express warranty, breach of the implied
warranty of merchantability, and breach of the implied warranty of fitness for a
particular purpose. Trial has been set for June 18, 2001.

         On August 16, 2000, Bon Temps Roule, Inc. and other plaintiffs filed a
complaint (Case No. 00CC09840) against the Company, Joe Stapley, and Travis
Morgan Securities, Inc. in the Superior Court of the State of California, Orange
County. The complaint alleges claims for the sale and purchase of securities
based upon misrepresentations and requests rescission of certain stock purchase
transactions. The court granted the Company's demurrers to plaintiffs'
complaint, first amended complaint, and second amended complaint. Trial has been
set for September 10, 2001.

         On March 21, 2001, RNB Enterprises, Inc. and other plaintiffs filed a
complaint (Case No. A432250) against the Company in the District Court of the
State of Nevada, Clark County. The complaint alleges claims for breach of
contract, breach of the implied covenant of good faith and fair dealing, unjust
enrichment/equitable set-off, intentional interference with contractual
relations/business, and fraud and/or misrepresentation. The Company has filed an
answer, and the parties have scheduled a case conference pursuant to the Nevada
Rules of Civil Procedure.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.

         LINE OF CREDIT. The Company issued warrants to purchase 250,000 shares
of its common stock at an exercise price of $2.50 in conjunction with a $500,000
line of credit from an affiliate of Josephthal. The Company has drawn the entire
amount available under the line of credit and has applied the funds to general
working capital purposes. The issuance of these warrants was exempt from
registration in reliance on Section 4(2) of the Securities Act.

                                       16
<PAGE>


         ASSET ACQUISITION. On March 26, 2001, the Company purchased the
tangible and intangible assets belonging to Spintek out of the bankruptcy
proceedings involving Spintek. These assets include equipment, supplies,
inventory, and intellectual property, including all patent rights, pending
patent applications, registered trademarks, pending trademark applications,
copyrights, and other assets related to a slot machine hopper and the technology
for determining its contents and for transmitting collection and accounting data
under the registered names AccuSystem(R), including the AccuHopper(R), the
AccuBoard, and the AccuDrop. The Company plans to reintroduce these products
under the trade name SecureHopper(TM). As payment for the assets, the Company:
(i) paid $150,000 in cash; (ii) issued 225,000 shares of restricted common stock
with piggyback registration rights; (iii) issued warrants exercisable into
225,000 shares of restricted common stock at an exercise price of $10.00 per
underlying share; and (iv) agreed to pay 50% of net proceeds in excess of
$175,000 from the sale of inventory from the assets purchased. The issuance of
the shares of common stock and warrants exercisable into shares of common stock
was exempt from registration in reliance on Section 4(2) of the Securities Act.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

         None.

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

         None.

ITEM 5.  OTHER INFORMATION.

         ELECTION OF TREASURER. On March 19, 2001, Michael McDonald resigned as
the Company's Chief Financial Officer and Treasurer. Donald Cunningham, the
Company's Controller, is handling these functions on an interim basis subject to
the oversight of the Company's Chief Executive Officer. Effective March 19,
2001, the Company's Board of Directors elected Steven J. Blad, the President and
Chief Executive Officer of the Company, as Treasurer of the Company.

 ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

(a)      Exhibits.
         --------

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

            10.01              Stand-By Credit Agreement by and between the
                               Company and Dan Purjes dated as of February 6,
                               2001

            10.02              Security Agreement by and between the Company and
                               Dan Purjes dated as of February 6, 2001

            10.03              Agreement of Purchase and Sale by and between
                               Malcolm C. Davenport V and the Company dated as
                               of March 15, 2001

(b)      Reports on Form 8-K.
         -------------------

         During the three month period ended March 31, 2001, the Company filed
with the Securities and Exchange Commission a Form 8-K on February 7, 2001,
reporting an amendment to the Company's Bylaws that provides for, among other
things, the termination of the classification of the Company's directors into
three groups where each class of directors was elected to a three year term.

                                       17
<PAGE>



                                    SIGNATURE

         In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                                    VendingData Corporation
                                              ----------------------------------
                                                         (Registrant)


Date:      May __, 2001                  By:  /s/ Steven J. Blad
                                              ----------------------------------
                                              Steven J. Blad
                                         Its: President, Chief Executive Officer
                                              and Treasurer





                                       18
<PAGE>


                                  EXHIBIT INDEX

Exhibit Number                      Description                     Page Number
--------------                      -----------                     -----------

         10.01    Stand-By Credit Agreement by and between the Company and Dan
                  Purjes dated as of February 6, 2001

         10.02    Security Agreement by and between the Company and Dan Purjes
                  dated as of February 6, 2001

         10.03    Agreement of Purchase and Sale by and between Malcolm C.
                  Davenport V and the Company dated as of March 15, 2001





                                       19