UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION




Washington,
D.C. 20549




FORM
10-Q




x  QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE


SECURITIES
EXCHANGE ACT OF 1934





For the
quarterly period ended September 30, 2010





 ̈  TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE


SECURITIES
EXCHANGE ACT OF 1934





For the
transition period from 
to





Commission
file number    0-19657





ACCESS
TO MONEY,
INC.


(Exact
name of registrant as specified in its charter)





Delaware
              
              93-0809419(State
      or other jurisdiction of incorporation or organization)
              
              (I.R.S.
      Employer Identification No.)





1101
Kings Highway N, Suite G100


Cherry
Hill, New
Jersey


(Address
of principal executive offices) (Zip Code)





(856)
414-9100


(Registrant’s
telephone number, including area code)





Indicate by check mark whether the
registrant: (1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days).   YES x NO  ̈





Indicate by check mark whether the
registrant has submitted electronically and posted on its corporate Web site, if
any, every Interactive Data File required to be submitted and posted pursuant to
Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12
months (or for such shorter period that the registrant was required to submit
and post such files).     YES  ̈ NO  ̈





Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company.  See the definitions of "large
accelerated filer," "accelerated filer" and "smaller reporting company" in Rule
12b-2 of the Exchange Act.





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





Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).


YES  ̈ NO x




Indicate the number of shares
outstanding of each of the issuer’s classes of common stock, as of the latest
practicable date:  32,995,375 shares of common stock outstanding at
November 10, 2010.





TABLE
      OF CONTENTS
                    
                    Page
      No.PART
      I
                    FINANCIAL
      INFORMATIONITEM
      1.
                    Financial
      Statements
                    
                    2ITEM
      2.
                    Management's
      Discussion and Analysis of Financial Condition and Results of
      Operations
                    
                    12ITEM
      4.
                    Controls
      and Procedures
                    
                    22PART
      II
                    OTHER
      INFORMATIONITEM
      6.
                    Exhibits
                    
                    24





i


PART
I - FINANCIAL INFORMATION





ITEM
      1.
            FINANCIAL
      STATEMENTS.





ACCESS
TO MONEY, INC.


CONDENSED
CONSOLIDATED BALANCE SHEETS


(In
thousands, excluding share and per share amounts)


(Unaudited)





September 30, 2010
                        
                        
                        December 31, 2009ASSETSCurrent
      assets:Cash
                        
                        $
                        3,220
                        
                        
                        $
                        5,770Restricted
      cash
                        
                        
                        800
                        
                        
                        
                        800Accounts
      receivable, net
                        
                        
                        2,033
                        
                        
                        
                        2,494Leases
      receivable, net
                        
                        
                        100
                        
                        
                        
                        109Inventories
                        
                        
                        1,130
                        
                        
                        
                        767Prepaid
      expenses and other
                        
                        
                        457
                        
                        
                        
                        289Deferred
      financing costs
                        
                        
                        35
                        
                        
                        
                        259Total
      current assets
                        
                        
                        7,775
                        
                        
                        
                        10,488Property
      and equipment, net
                        
                        
                        3,156
                        
                        
                        
                        3,220Intangible
      assets, net
                        
                        
                        1,569
                        
                        
                        
                        1,711Goodwill
                        
                        
                        10,559
                        
                        
                        
                        10,559Deferred
      financing costs, long term
                        
                        
                        142
                        
                        
                        
                        78Other
      assets
                        
                        
                        307
                        
                        
                        
                        319Total
      assets
                        
                        $
                        23,508
                        
                        
                        $
                        26,375LIABILITIES
      AND SHAREHOLDERS' DEFICITCurrent
      liabilities:Accounts
      payable
                        
                        $
                        5,660
                        
                        
                        $
                        5,639Accrued
      expenses
                        
                        
                        6,041
                        
                        
                        
                        5,691Term
      loans
                        
                        
                        1,195
                        
                        
                        
                        1,092Total
      current liabilities
                        
                        
                        12,896
                        
                        
                        
                        12,422Long-term
      liabilities:Term
      loans and other debt
                        
                        
                        17,844
                        
                        
                        
                        18,406Warrant
      liability
                        
                        
                        637
                        
                        
                        
                        6,747Total
      liabilities
                        
                        
                        31,377
                        
                        
                        
                        37,575Shareholders’
      deficit:Preferred
      stock, $0.001 par value5,000,000
      shares authorized; none issued and outstanding
                        
                        
                        -
                        
                        
                        
                        -Common
      stock, $0.001 par value -70,000,000
      shares authorized; 32,946,988 and 22,086,624 shares issued as of
      September 30, 2010 and December 31, 2009, respectively, and
      32,915,375 and 22,073,225 shares outstanding at September 30, 2010
      and December 31, 2009, respectively
                        
                        
                        33
                        
                        
                        
                        22Additional
      paid-in capital
                        
                        
                        138,664
                        
                        
                        
                        135,935Treasury
      stock, 31,613 and 12,399 shares at cost as of September 30, 2010 and
      December 31, 2009, respectively
                        
                        
                        (15
                        )
                        
                        
                        (3
                        )Accumulated
      deficit
                        
                        
                        (146,551
                        )
                        
                        
                        (147,154
                        )Total
      shareholders’ deficit
                        
                        
                        (7,869
                        )
                        
                        
                        (11,200
                        )Total
      liabilities and shareholders’ deficit
                        
                        $
                        23,508
                        
                        
                        $
                        26,375





See
accompanying notes to condensed consolidated financial
statements.


2


ACCESS
TO MONEY, INC.


CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS


(In
thousands, except per share amounts)


(Unaudited)





Three
      months ended
                  September
      30,
                
                
                Nine
      months ended
                  September
      30,2010
                
                
                2009
                
                
                2010
                
                
                2009Sales
                
                $
                21,153
                
                
                $
                23,319
                
                
                $
                65,343
                
                
                $
                68,694Commissions
                
                
                14,208
                
                
                
                15,291
                
                
                
                43,679
                
                
                
                46,109Net
      sales
                
                
                6,945
                
                
                
                8,028
                
                
                
                21,664
                
                
                
                22,585Cost
      of sales
                
                
                3,962
                
                
                
                4,117
                
                
                
                11,676
                
                
                
                11,439Gross
      profit
                
                
                2,983
                
                
                
                3,911
                
                
                
                9,988
                
                
                
                11,146Selling,
      general and administrative
                
                
                2,336
                
                
                
                2,799
                
                
                
                7,737
                
                
                
                8,316Operating
      income
                
                
                647
                
                
                
                1,112
                
                
                
                2,251
                
                
                
                2,830Interest
      expense
                
                
                695
                
                
                
                731
                
                
                
                2,211
                
                
                
                2,200Amortization
      of debt issuance costs
                
                
                376
                
                
                
                559
                
                
                
                1,495
                
                
                
                1,673Other
      expense (income)
                
                
                (12
                )
                
                
                (13
                )
                
                
                (42
                )
                
                
                (107
                )Loss
      on asset disposal
                
                
                9
                
                
                
                13
                
                
                
                17
                
                
                
                77Loss
      on debt extinguishment
                
                
                995
                
                
                
                -
                
                
                
                995
                
                
                
                -Change
      in fair value of warrants (income) expense
                
                
                (687
                )
                
                
                2,450
                
                
                
                (3,029
                )
                
                
                5,445Net
      income (loss) before income taxes
                
                
                (729
                )
                
                
                (2,628
                )
                
                
                604
                
                
                
                (6,458
                )Provision
      (benefit) for income taxes
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -Net
      income (loss)
                
                $
                (729
                )
                
                $
                (2,628
                )
                
                $
                604
                
                
                $
                (6,458
                )Net
      income (loss) per common share - basic
                
                $
                (.03
                )
                
                $
                (.12
                )
                
                $
                .03
                
                
                $
                (.30
                )Net
      income (loss) per common share – diluted
                
                $
                (.03
                )
                
                $
                (.12
                )
                
                $
                .03
                
                
                $
                (.30
                )Weighted
      average common shares outstanding:Basic
                
                
                25,401
                
                
                
                21,786
                
                
                
                23,254
                
                
                
                21,667Diluted
                
                
                25,401
                
                
                
                21,786
                
                
                
                24,451
                
                
                
                21,667





See
accompanying notes to condensed consolidated financial
statements.


3


ACCESS
TO MONEY, INC.


CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS


(In
thousands)


(Unaudited)





Nine months ended
                  September 30, 2010
                
                
                Nine months ended
                  September 30, 2009Cash
      flows from operating activities:Net
      income (loss)
                
                $
                604
                
                
                $
                (6,458
                )Adjustments
      to reconcile net income (loss) to net cash provided by operating
      activities:Depreciation
      and amortization
                
                
                2,979
                
                
                
                3,061Non-cash
      share-based compensation
                
                
                68
                
                
                
                95Loss
      on disposal or retirement of equipment
                
                
                17
                
                
                
                77Provision
      for doubtful accounts
                
                
                113
                
                
                
                129Loss
      on debt extinguishment
                
                
                995
                
                
                
                -Change
      in warrant value
                
                
                (3,029
                )
                
                
                5,445Changes
      in assets and liabilities, net of acquisitions:Restricted
      cash
                
                
                -
                
                
                
                1,212Accounts
      receivable
                
                
                348
                
                
                
                -Lease
      receivable
                
                
                10
                
                
                
                962Inventories
                
                
                (364
                )
                
                
                (73
                )Prepaid
      expenses and other
                
                
                (168
                )
                
                
                (19
                )Accounts
      payable
                
                
                22
                
                
                
                (645
                )Accrued
      expenses
                
                
                350
                
                
                
                419Cash
      provided by operating activities
                
                
                1,945
                
                
                
                4,205Cash
      flows from investing activities:Capital
      expenditures
                
                
                (893
                )
                
                
                (1,276
                )Proceeds
      from sale of equipment
                
                
                -
                
                
                
                32Acquisition
      of intangible and other assets
                
                
                (390
                )
                
                
                24Cash
      (used in) investing activities
                
                
                (1,283
                )
                
                
                (1,220
                )Cash
      flows from financing activities:Proceeds
      from term loans
                
                
                5,500
                
                
                
                57Payment
      on term loans
                
                
                (8,531
                )
                
                
                (949
                )Debt
      financing costs
                
                
                (181
                )
                
                
                -Cash
      (used in) financing activities
                
                
                (3,212
                )
                
                
                (892
                )Net
      (decrease) increase in cash and cash equivalents
                
                
                (2,550
                )
                
                
                2,093Beginning
      cash and cash equivalents
                
                
                5,770
                
                
                
                4,535Ending
      cash and cash equivalents
                
                $
                3,220
                
                
                $
                6,628Supplemental
      cash flow information:Cash
      paid for interest
                
                $
                1,350
                
                
                $
                870





See
accompanying notes to condensed consolidated financial
statements.


4


ACCESS
TO MONEY, INC.


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)





1.
            BASIS OF
      PRESENTATION





The accompanying unaudited condensed
consolidated financial statements of Access to Money, Inc. and its subsidiaries
(collectively, the "Company," "we" or "us") have been prepared pursuant to the
rules and regulations of the Securities and Exchange Commission (the "SEC") for
interim financial statements, and reflect all adjustments, consisting only of
normal recurring adjustments, which, in the opinion of management, are necessary
for a fair statement of the results of the interim periods.  These
condensed consolidated financial statements should be read in conjunction with
our annual report on Form 10-K for the year ended December 31,
2009.  Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles in the United States of America have been condensed or
omitted pursuant to such rules and regulations. The results of operations for
the periods presented are not necessarily indicative of the results to be
expected for any subsequent interim period or for the year ending
December 31, 2010.





Financial
Statement Reclassifications





Certain financial statement
reclassifications have been made to prior period amounts to conform to the
current period presentation.  These changes had no impact on
shareholders' deficit or previously reported net income or
loss.  Based on the Company maintaining treasury stock we have made a
reclassification to identify the value of the treasury stock on the balance
sheet and have adjusted common stock and additional paid-in capital to reflect
their appropriate balances.





2.
            DESCRIPTION OF BUSINESS AND
      SUMMARY OF SIGNIFICANT ACCOUNTING
  POLICIES





Description
of Business





We are an independent sales
organization, or ISO, servicing businesses in the operation of automated teller
machines, or ATMs.  We entered the ATM business in 1999 and expanded
operations through both internal growth and acquisitions.  In June
2009, we merged TRM Corporation into Access to Money, Inc., a Delaware
corporation and a wholly-owned subsidiary of the Company, for purposes of
changing our state of incorporation and our name to Access to Money,
Inc.  At September 30, 2010, we had approximately 11,000 ATMs
under contract.





Principles
of Consolidation





The condensed consolidated financial
statements include the accounts of Access to Money, Inc. and its
subsidiaries.  Our subsidiaries at September 30, 2010 consisted
of TRM Copy Centers (USA) Corporation, TRM ATM Corporation, TRM ATM Acquisition
Corporation, Access to Money ATM Corporation, Access Cash International LLC,
Access to Money-SL, Inc., LJR Consulting Corp., and FPC France
Ltd.  All material intercompany accounts and transactions have been
eliminated in consolidation.





Use
of Estimates





The preparation of our financial
statements requires us to make estimates and judgments that affect the reported
amounts of our assets, liabilities, sales, costs and expenses, and the
disclosure of contingent assets and liabilities.  On an on-going
basis, we evaluate our estimates and judgments, including those related to
impairments, depreciation, intangible assets, accounts receivable, inventories,
and income taxes.  We base our estimates and judgments on historical
experience and on various assumptions that we believe are reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities that are not readily apparent from
other sources.  Actual results may differ from these estimates under
different assumptions or conditions.


5


Fair
Value Measurements





We measure and disclose the estimated
fair value of financial assets and liabilities using the fair value hierarchy
prescribed by U.S. GAAP.  The fair value hierarchy has three levels
which are based on reliable available inputs of observable data.  The
hierarchy requires the use of observable market data when
available.  The levels are defined as follows:





·
            Level 1- quoted prices
      for identicalinstruments in active
markets;


·
            Level2 - quoted prices
      for similarinstruments in active markets; quoted prices for identical or
      similar instruments in markets that are not active; and model-derived
      valuations in which significant inputs and significant value drivers are
      observable in active markets; and


·
            Level3 - fair value
      measurements derived from valuation techniques in which one or more
      significant inputs or significant value drivers are unobservable.





If quoted market prices or inputs are
not available, fair value measurements are based upon valuation models that
utilize current market or independently sourced market inputs, such as interest
rates, option volatilities, credit spreads, market capitalization rates,
etc.  The primary valuation model we use is the Black-Scholes
model.





Financial instruments, including cash
equivalents, accounts receivable and accounts payable approximate fair market
value because of the short maturity of these instruments.  Fair value
approximates the carrying value of our borrowings under our variable-rate
long-term debt, based upon interest rates available for the same or similar
instruments.  In 2010, the majority of our debt had fixed interest
rates and the fair value is estimated at $22.5 million.





Restricted
Cash





At September 30, 2010 and
December 31, 2009 we had $800,000 of cash held by a bank which is
classified as restricted cash on our balance sheet.  The restricted
cash pertains to a term under an agreement with our vault cash
supplier.





Revenue
Recognition and Presentation





We record and report revenue pertaining
to the use and operation of ATMs including, transaction based sales, service
sales, equipment/hardware sales and branch build-out sales.  A portion
of or all of the convenience fee assessed on ATM transactions is paid to the
owner/merchant of the ATM based upon negotiated contract terms as
commissions.  We receive daily electronic reports from processing
companies for transactions that occur on ATMs we own and operate in addition to
machines owned and operated by merchants who contract with us.  On a
monthly basis, we accumulate daily transaction data and calculate each
merchant's commission.  The amount of commission is generally
dependent upon transaction volumes, and we remit commission payments directly to
the merchant's bank account through electronic funds transfer or via a paper
check.  We recognize ATM transaction-based sales upon receipt of
transaction data reported by the processing companies.  We have
recently entered into a sales arrangement with a customer that contains multiple
elements or deliverables as defined in revenue recognition
guidance.  Under a multiple deliverable arrangement, we evaluate and
separate each deliverable to determine whether it represents a separate unit of
accounting.  In these situations, we allocate the total arrangement
consideration to each unit of accounting based on the deliverable’s relative
fair value.





We have contracts with regional and
national merchants and numerous independent store operators.  As of
the three and nine month periods ending September 30, 2010, we had one
customer which accounted for approximately 32.4% and 31.0% of our net sales,
respectively.





Accounts
Receivable and Allowance for Doubtful Accounts





The Company reviews the accounts
receivable on a regular basis to determine the collectability of each
account.  The Company maintains allowances for doubtful accounts for
estimated losses which may result from the failure of its clients to make
required payments.  During each reporting period, the Company
evaluates the adequacy of the allowance for doubtful accounts and calculates
appropriate changes based on historical experience, credit evaluations, specific
client collection issues and the length of time a receivable has been past
due.  When the Company deems the receivable to be uncollectible, the
Company charges the receivable against the allowance.  Accounts
receivable are shown net of the allowance of $132,000 and $272,000 at
September 30, 2010 and December 31, 2009,
respectively.


6


Inventory





Inventory is stated at the lower of
cost (first-in, first-out method) or market.  Inventory consists
primarily of ATMs and related parts and equipment.  ATMs and parts
available for sale are classified as inventory until such time they are sold or
installed.  Once an ATM or part is sold, it is relieved to cost of
sales.





The following table summarizes
inventories (in thousands):





September
      30, 2010
                  
                  
                  December
      31, 2009Machines
                  
                  $
                  812
                  
                  
                  $
                  439Parts
                  
                  
                  318
                  
                  
                  
                  328$
                  1,130
                  
                  
                  $
                  767





Fixed
Assets





Fixed assets are recorded at cost plus
amounts required to place equipment in service.  Depreciation and
amortization begins when the asset is placed in service.  ATMs,
furniture and fixtures and computer equipment are generally depreciated using
the straight-line method over the estimated remaining useful lives of the
related assets.  Estimated useful lives are as follows:





ATMs
                
                3-10
      yearsComputer
      equipment
                
                2-5
      yearsFurniture
      and fixtures
                
                5-7
      years





Upon the sale or other disposition of
an asset, cost and accumulated depreciation are removed from the accounts and
any gain or loss is reflected in gain (loss) on sale of assets.





Goodwill
and Intangible Assets





As of September 30, 2010 and
December 31, 2009, our assets included goodwill of $10.6 million and
intangible assets with net carrying amounts of $1.6 million and
$1.7 million, respectively.  Goodwill is tested for impairment
annually or whenever a triggering event is identified that may indicate an
impairment has occurred.  Potential impairment indicators include a
significant decline in revenues or a decline in our capitalization below
carrying value.  Goodwill is tested by comparing the estimated fair
value of a reporting unit containing goodwill to its carrying
value.  Since December 31, 2009, there have been no indicators of
impairment.


7


The following table summarizes
intangible assets (in thousands):





September 30, 2010
                
                
                December 31, 2009Gross
                  carrying
                  amount
                
                
                Accumulated
                  amortization
                
                
                Net
                  carrying
                  amount
                
                
                Gross
                  carrying
                  amount
                
                
                Accumulated
                  amortization
                
                
                Net
                  carrying
                  amountSubject
      to amortizationNon-compete
      agreement
                
                $
                175
                
                
                $
                (143
                )
                
                $
                32
                
                
                $
                175
                
                
                $
                (99
                )
                
                $
                76Customer
      contracts
                
                
                1,382
                
                
                
                (711
                )
                
                
                671
                
                
                
                1,200
                
                
                
                (480
                )
                
                
                720Distributor
      agreements
                
                
                225
                
                
                
                (92
                )
                
                
                133
                
                
                
                225
                
                
                
                (63
                )
                
                
                162Non-contractual
      customer base
                
                
                250
                
                
                
                (102
                )
                
                
                148
                
                
                
                250
                
                
                
                (71
                )
                
                
                179$
                2,032
                
                
                $
                (1,048
                )
                
                $
                984
                
                
                $
                1,850
                
                
                $
                (713
                )
                
                $
                1,137Trademarks
      not subject toamortization
                
                
                585
                
                
                
                -
                
                
                
                585
                
                
                
                574
                
                
                
                -
                
                
                
                574$
                2,617
                
                
                $
                (1,048
                )
                
                $
                1,569
                
                
                $
                2,424
                
                
                $
                (713
                )
                
                $
                1,711





Amortization of, which is included in
selling, general and administrative expense was approximately $194,000 and
$170,000 for the three months ended September 30, 2010 and 2009,
respectively, and $545,000 and $509,000 for the nine months ended
September 30, 2010 and 2009, respectively.





Income
Taxes





We recognize deferred tax assets and
liabilities for future tax consequences attributable to differences between the
financial statement reporting balances of assets and liabilities and their
respective tax basis.  Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which those differences are expected to be recovered or
reversed.  There were no uncertain tax positions at September 30,
2010 or December 31, 2009, as the Company's tax positions for open years
meet the recognition thresholds of more likely than not to be sustained upon
examination.





Share-Based
Compensation





Share-based compensation is measured as
the fair value of the award at its grant date based on the estimated number of
awards that are expected to vest and is recorded over a defined service
period.  In the absence of an observable market price for a
share-based award, the fair value is based upon a valuation methodology that
takes into consideration various factors, including the exercise price of the
award, the term of the award, the current price of the underlying shares, the
expected volatility of the underlying share price, the expected dividends on the
underlying shares, and a risk-free interest rate.  Compensation
expense is recognized based on the estimated grant date fair value method using
a Black-Scholes valuation model.





Warrants





Effective January 1, 2009, we
adopted new accounting guidance that can affect the accounting for warrants and
many convertible instruments with provisions that protect holders from a change
in our stock price.  Protection provisions reduce the exercise price
of a warrant or convertible instrument if an issuer either issues equity shares
for a price that is lower than the exercise price of those instruments or issues
new warrants or convertible instruments that have a lower exercise
price.  We evaluated and determined that our outstanding warrants to
acquire stock of the Company contain provisions that protect the holders from
changes in the stock price.  As a result of this determination we
recognize these warrants as a liability at their respective fair values on each
reporting date.


8


Net
Income (Loss) Per Share





The Company reports its earnings per
share under both the basic and diluted methods.  When calculating
basic income / (loss) per share, net income / (loss) is divided by the weighted
average number of common shares outstanding for the period.  Diluted
income per share reflects the assumed exercise or conversion of all dilutive
securities, such as options, restricted shares and warrants.  No such
exercise or conversion is assumed where the effect is anti-dilutive, such as
when there is a net loss from operations or when the exercise price of the
potentially dilutive securities is greater than the market price of the
Company’s stock.  For the three and nine month periods ended
September 30, 2009 the Company incurred net losses and the exercise price
for outstanding warrants and options was greater than the average market price
during the nine month period ending September 30,
2009.  Accordingly, no additional shares related to options,
restricted shares or warrants were included in the calculation of diluted
earning per share as their impact on the net loss available to common
stockholders was anti-dilutive.  For the three-month period ended
September 30, 2010 the Company incurred a net loss and the exercise price
for outstanding warrants and options was greater than the average market price
during the period.  Accordingly, no additional shares related to
options, restricted shares or warrants were included for a diluted share
calculation as their impact on the three-month period ended September 30,
2010 net loss was anti-dilutive.  For the nine-month period ended
September 30, 2010 securities consisting of 747,261 shares related to
warrants, 342,474 shares of restricted stock, and 107,432 stock option shares
were included in the calculation of diluted average shares outstanding and
diluted income per share.





3.
            ACCRUED
      AND OTHER EXPENSES





The following table summarizes accounts
payable and accrued liabilities (in thousands):





September 30, 2010
                  
                  
                  December 31, 2009Accrued
      payroll expenses
                  
                  $
                  135
                  
                  
                  $
                  339Accrued
      interest expense
                  
                  
                  3,536
                  
                  
                  
                  2,675Accrued
      ATM maintenance and other expenses
                  
                  
                  186
                  
                  
                  
                  438Other
      accrued expenses
                  
                  
                  2,184
                  
                  
                  
                  2,239$
                  6,041
                  
                  
                  $
                  5,691





4.
            TERM
      LOANS AND OTHER DEBT:





The following table summarizes term
loans and other debt (in thousands):





September 30, 2010
                  
                  
                  December 31, 2009Sovereign
      Bank
                  
                  $
                  5,500
                  
                  
                  $
                  -Lampe
      Loan Facility
                  
                  
                  3,150
                  
                  
                  
                  9,900Cadence
      Special Holdings II, LLC
                  
                  
                  350
                  
                  
                  
                  1,100Note
      payable to former owner of LJR Consulting
                  
                  
                  9,755
                  
                  
                  
                  9,755Notemachine
                  
                  
                  -
                  
                  
                  
                  324Other
      debt
                  
                  
                  284
                  
                  
                  
                  991Debt
      discount
                  
                  
                  -
                  
                  
                  
                  (2,572
                  )Total
                  
                  $
                  19,039
                  
                  
                  $
                  19,498Less:  current
      portion
                  
                  
                  1,195
                  
                  
                  
                  1,092Total
      long-term debt, excluding current portion
                  
                  $
                  17,844
                  
                  
                  $
                  18,406





On September 3, 2010 we obtained $5.5
million via a senior secured loan, (the "Senior Loan"),
pursuant to a Loan and Security Agreement, (the "Senior Loan and Security
Agreement"), by and among us, our subsidiaries, and Sovereign
Bank.  The Senior Loan is due September 3, 2015, accrues interest
at the rate of 6.81% per annum, requires monthly payments of principal and
interest amortizing over a five year period, and is secured by substantially all
of our assets.  We have the right to prepay the then outstanding
balance, in whole or in part, at anytime.  If we prepay 50.0% or more
of the then outstanding balance, we are required to pay a fee initially equal to
5.0% of the amount prepaid which reduces ratably on an annual basis to 1% of the
amount prepaid four years after funding.  On October 21, 2010 we
entered into a First Amendment to the Senior Loan and Security
Agreement.  The Senior Loan and Security Agreement, as amended,
contains standard and customary covenants including, prohibitions on incurring
additional indebtedness, making loans or investments, granting security
interests in any of our property, or acquiring any business or assets without
the consent of Sovereign Bank.  Financial covenants require that we
maintain minimum liquidity of $2.0 million on deposit with Sovereign Bank, a
fixed charge coverage ratio of 1.25 to 1 as of the end of each fiscal quarter, a
funded debt to EBITDA ratio of not more than 2 to 1 as of the end of each fiscal
quarter and requires a minimum cash balance of $3.25 million on deposit
with the Bank after making any payment on subordinated
indebtedness.


9


The proceeds of the Senior Loan,
together with $2.0 million of cash on hand, were used to repay $7.5 million of
principal due on our existing $11.0 million Senior Secured Notes payable
to  LC Capital Master Fund, Ltd. ("LC Capital") and
Cadence Special Holdings II, LLC ("Cadence"), (the
"2008
Notes").  The 2008 Notes accrued interest at the rate of 13.0%
per annum, were secured by substantially all of our assets, and were due and
payable in full on April 18, 2011.  In connection with the closing of
the Senior Loan,we
entered into an Amended and Restated Loan and Security Agreement, dated
September 3, 2010, with LC Capital, Cadence and Lampe Conway & Co., LLC
as administrative agent and collateral agent (the "Amended and Restated Lampe
Loan and Security Agreement"), pursuant to which the 2008 Notes were
amended and restated (the "2010 Secured
Notes").  The 2010 Secured Notes have an aggregate principal
amount of $3.5 million, are due October 3, 2015, are subordinated to the Senior
Loan, accrue interest at the rate of 7.0% per annum if paid currently, or 10.0%
if accrued, payable on March 3rd and September 3rd of each year, with each
interest rate increasing .25% on the first anniversary of the closing, 1.0% on
the second anniversary of the closing, 2.5% on the third anniversary of the
closing, and 5.0% on the fourth anniversary of the closing, may be prepaid in
whole or in part at anytime at our option, and are secured by substantially all
of our assets, subject to the lien in favor of Sovereign
Bank.  Pursuant to the Amended and Restated Lampe Loan and Security
Agreement and an Amendment, (the "Lampe Amendment"),
entered into October 21, 2010, we are prohibited from paying interest on
the 2010 Secured Notes unless we have a cash balance of $3.25 million after
such payment.  The Lampe facility, as amended, also contains financial
covenants which require a minimum liquidity of $1.45 million on deposit with
Sovereign Bank, a fixed charge coverage ratio of not less than 1.25 to 1 as of
the end of each fiscal quarter, and a funded debt to EBITDA ratio of not more
than 2.2 to 1 as of the end of each fiscal quarter.





Our existing note payable to Douglas S.
Falcone, our Chief Operating Officer, in the principal amount of $9.75 million
was also restructured.  The initial note accrued interest at the rate
of 13.0% per annum payable quarterly with the principal balance due April 18,
2015, was unsecured, and subordinated to the payment in full of the 2008
Notes.  In connection with the foregoing transactions, we issued an
Amended and Restated Subordinated Promissory Note to Mr. Falcone (the "Subordinated
Note").  The Subordinated Note is due and payable in full
October 3, 2015, is unsecured, and is subordinated in all respects to the Senior
Loan and the 2010 Secured Notes.  The Subordinated Note accrues
interest and contains payment terms substantially similar to the 2010 Secured
Notes. On October 21, 2010, we executed a First Allonge to the Subordinated Note
(the "Allonge").  The
Allonge amends the dates in which interest shall be paid from April 18 and
October 18 of each year to March 3 and September 3 of each year.





We had $284,000 and $991,000 of other
debt as of September 30, 2010 and December 31, 2009,
respectively.  The debt at December 31, 2009, included notes
payable balances due to Douglas Falcone for vault cash in connection with his
ownership of LJR Consulting, and to a bank for a lease related to a customer
project.  The balance due Douglas Falcone has been
repaid.  The balance of other debt as of September 30, 2010
consists of the bank note related to the customer project which is paid monthly
with an interest rate of 7.5% through August 2011, and an auto
loan.





In connection with the payment of the
2008 Notes, the Company recognized a loss on debt extinguishment of
$995,000.  The $995,000 consists of $164,000 pertaining to the write
off of deferred financing costs related to $7.5 million in payments made on
the 2008 Notes which released the lenders as the primary debtor thus
extinguishing the liability.  The second component of loss on debt
extinguishment was approximately $1.2 million which represented remaining
unamortized debt discount.  The third component was $422,000
representing the gain in value between warrants exchanged and shares
issued.  The loss on debt extinguishment has been included under Other
income/expense in the accompanying statements of operations for the three and
nine months periods ended September 30, 2010.








Twelve
      months ended September 30,2011
                          
                          $
                          1,1952012
                          
                          
                          1,0522013
                          
                          
                          1,0172014
                          
                          
                          1,1792015
      and beyond
                          
                          
                          14,596$
                          19,039





5.
            WARRANTS





Common Stock Warrants





In
connection with the Amended and Restated Lampe Loan and Security Agreement, we
entered into an Exchange Agreement with LC Capital (the "LC Capital Exchange
Agreement") and an Exchange Agreement with Cadence (the "Cadence Exchange
Agreement"), and together with the LC Capital Exchange Agreement (the
"Exchange Agreements").  Pursuant to the Exchange Agreements, warrants
to purchase an aggregate of 15.0 million shares of common stock were
exchanged for an aggregate of 10,636,364 shares of common
stock.


10


We have a warrant outstanding which
provides the holder to purchase up to an aggregate of 3.1 million
shares of common stock upon exercise.  The warrant expires
November 2013 and has an exercise price of $0.28.  The
outstanding warrant is exercisable at any time and we have agreed to register
the shares issuable upon the exercise of the warrants.  We use a
Black-Scholes valuation model to estimate the fair value of the outstanding
warrants.





The table below provides a
reconciliation of the beginning and ending balances of our warrant liability and
the change in fair value using a Black-Scholes model as of September 30,
2010.





Balance
      as of January 1, 2010
                  
                  $
                  6,747Exchange
      of warrants
                  
                  
                  (3,081
                  )Change
      in fair value of warrants
                  
                  
                  (3,029
                  )Balance
      as of September 30, 2010
                  
                  $
                  637





We determined the fair value of our
warrants using a Black-Scholes model.  The significant assumptions
considered by the model were the amount of outstanding warrants, the remaining
term of each warrant, the per share stock price of $0.25, a risk free rate of
0.82%, and a historical volatility of 155.6%.





6.
            VAULT
      CASH





In general, we rent vault cash under a
bailment arrangement from financial institutions and pay negotiated fees for the
use of that money when it is placed in ATMs we operate.  Vault cash is
controlled by employees of the financial institutions and armored car carriers
who we contract to deliver the cash to our ATMs.  As cash withdrawals
are made at the ATMs, processing companies settle the transactions and send the
cash back to the financial institutions from which it was rented.  We
have contracts with financial institutions and armored car carriers stating that
the vault cash belongs to the bank and that neither we nor the armored car
carrier has any legal rights to the funds.





During the three and nine months ending
September 30, 2010, our rental fee for the use of funds was calculated
using an interest rate of 2.75%.  During the three and nine months
ending September 30, 2010, the average monthly amount of cash used to vault
our ATMs was $34.5 million and $40.8 million,
respectively.  The cost associated with our vault cash for the three
and nine months ending September 30, 2010 was $452,000 and
$1.5 million, respectively, which is included in cost of sales in the
accompanying statements of operations.





7.
            SHARE-BASED
      COMPENSATION





The Company calculates the fair value
of stock-based instruments awarded to employees on the date of grant and
recognizes the calculated fair value, net of estimated forfeitures, as
compensation expense over the requisite service periods of the related
awards.  The following table reflects the total share-based
compensation expense included in selling, general and administrative expense of
the Company’s Condensed Consolidated Statements of Operations for the three and
nine month periods ended September 30, 2010 and 2009 (in
thousands):





Three
      months ended
                
                
                Nine
      months ended2010
                
                
                2009
                
                
                2010
                
                
                2009Options
                
                $
                -
                
                
                $
                3
                
                
                $
                14
                
                
                $
                16Restricted
      shares
                
                
                11
                
                
                
                26
                
                
                
                66
                
                
                
                79Total
      share-based compensation expense
                
                $
                11
                
                
                $
                29
                
                
                $
                80
                
                
                $
                95


11





Options.The following table
summarizes stock option activity during the nine months ended September 30,
2010, as follows:





Number of Shares
                    
                    
                    Weighted Average Exercise
    PriceOptions
      Outstanding January 1, 2010
                    
                    
                    322,500
                    
                    
                    $
                    1.13Granted
                    
                    
                    -
                    
                    
                    
                    -Exercised
                    
                    
                    -
                    
                    
                    
                    -Cancelled
                    
                    
                    -
                    
                    
                    
                    -Options
      Outstanding September 30, 2010
                    
                    
                    322,500
                    
                    
                    $
                    1.13





As of September 30, 2010, options
to purchase 322,500 shares of common stock at a weighted average exercise price
of $1.13 per share were vested and exercisable.





Restricted
Stock.  The following
table summarizes restricted stock activity during the nine months ended
September 30, 2010, as follows:





SharesRestricted
      shares January 1, 2010
                  
                  
                  834,995Granted
                  
                  
                  25,000Vested
                  
                  
                  225,000Forfeited
                  
                  
                  103,332Restricted
      shares September 30, 2010
                  
                  
                  531,663





8.
            PROVISION
      FOR INCOME TAXES





We have not recorded an income tax
benefit for the three and nine month periods ending September 30, 2009 or
2010 because we are uncertain that we will be able to realize the benefit of our
net operating loss carryforwards and future deductible amounts.  As of
September 30, 2010, we have net operating losses of approximately
$58.6 million available to offset future taxable income for United States
federal and state income tax purposes which expire in the years 2020 through
2028.  We have established a valuation allowance for all of our net
deferred tax assets based on our review for expected utilization using the "more
likely than not" approach in assessing the available positive and negative
evidence surrounding their realization.





9.
            CHANGES
      IN SHAREHOLDERS' DEFICIT





The following table provides the
transactions for the three-month period ended September 30, 2010 concerning
shareholders deficit (in thousands):





Common
                    
                    
                    Treasury
                    
                    
                    Additional
                      Paid-in
                    
                    
                    Accumulated
                    
                    
                    Total
                      ShareholdersShares
                    
                    
                    Amounts
                    
                    
                    Shares
                    
                    
                    Amounts
                    
                    
                    Capital
                    
                    
                    Deficit
                    
                    
                    DeficitBalances,
      June 30, 2010
                    
                    
                    22,279
                    
                    
                    $
                    22
                    
                    
                    
                    32
                    
                    
                    $
                    (15
                    )
                    
                    $
                    136,005
                    
                    
                    $
                    (145,822
                    )
                    
                    $
                    (9,810
                    )Net
      income
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (729
                    )
                    
                    
                    (729
                    )Share-based
      compensation
                    
                    
                    -
                    
                    
                    
                    11
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    11Shares
      issued
                    
                    
                    10,636
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    2,659
                    
                    
                    
                    -
                    
                    
                    
                    2,659Balances
      September 30, 2010
                    
                    
                    32,915
                    
                    
                    $
                    33
                    
                    
                    
                    32
                    
                    
                    $
                    (15
                    )
                    
                    $
                    138,664
                    
                    
                    $
                    (146,551
                    )
                    
                    $
                    (7,869
                    )





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





Cautionary
Statements Regarding Forward-Looking Statements





This
report contains "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").  All statements other than statements of historical facts
included or incorporated by reference in this quarterly report on Form 10-Q,
including without limitation, statements regarding our future financial
position, business strategy, budgets, projected revenues, projected costs and
plans and objective of management for future operations, are forward-looking
statements.  In addition, forward-looking statements generally can be
identified by the use of forward-looking terminology such as "may," "will,"
"expects," "intends," "plans," "projects," "estimates," "anticipates," or
"believes" or the negative thereof or any variation there on or similar
terminology or expressions.


12


These
forward-looking statements are subject to risks and uncertainties that could
cause actual results to differ materially from results proposed in such
statements.  Although we believe that the expectations reflected in
such forward-looking statements are reasonable, we can give no assurance that
such expectations will prove to have been correct.  Important factors
that could cause actual results to differ materially from our expectations
include, but are not limited to: a decline in ATM transaction volume or fees,
changes in technology standards, a failure by third parties to service our ATMs,
regulatory changes, increases in interest rates, the inability to obtain cash
for our ATMs, reduction in the number of transacting ATMs, market acceptance of
our student loan processing services, demand for student loans, availability of
credit, changes in regulations regarding student loans and financial
institutions, and statements of assumption underlying any of the foregoing, as
well as other factors set forth under the caption "Risk Factors" in our Annual
Report on Form 10-K for the year ended December 31, 2009 filed with the
Securities and Exchange Commission.





All
subsequent written and oral forward-looking statements attributable to us, or
persons acting on our behalf, are expressly qualified in their entirety by the
foregoing.  Except as required by law, we assume no duty to update or
revise our forward-looking statements based on changes in internal estimates,
expectations, or otherwise.





Overview





We are an independent sales
organization which acts as the source for businesses to purchase and operate
automated teller machines, or ATMs.  From 1999 to the present we have
expanded our ATM sales, service and operations through internal growth and
acquisitions.





We currently manage, own and operate
approximately 11,000 ATMs across the United States (typically under multi-year
contracts) for independent store owners, larger retail chains, hotels, stadiums,
universities, banks, credit unions, and other financial
institutions.  We also offer our financial institution clients a
one-stop solution for new branch construction and fit outs.  In
addition to providing our merchant customers with supplemental revenues from
transaction fees, we believe that the presence of ATMs in a merchant’s store
helps to promote higher foot traffic, increase impulse purchases, and allow
longer shopping times since they often make the retail site a destination for
cash.  We attempt to maximize the usefulness of our ATMs to our
customers by participating in as many Electronic Funds Transfer Networks
("EFTNs") as practical, including NYCE, Visa, MasterCard, Cirrus, Plus, American
Express, Discover/Novus, STAR, Allpoint and Moneypass.





Operational
Metrics





We derive most of our revenue from
transaction-based sales.  We also generate revenue from the sale of
ATM equipment and service calls.  A description of these revenue
sources is provided below.





Transaction-based
sales — sales we derive from withdrawal fees and interchange
fees.





·
            Withdrawal fees — fees
      we receive from a processor derived from a customer making an ATM
      withdrawal.  Withdrawal fees are sometimes referred to as
      surcharge or convenience fees in the industry.  We collect those
      fees on a daily basis via deposits from processing companies with whom we
      have contracts.


·
            Interchange fees — fees
      that an EFTN charges the customer’s financial institution for routing a
      withdrawal transaction or an account balance inquiry.  The
      interchange fee is shared based on an agreement between us and the
      EFTN.  Interchange fees are typically earned on all
      transactions, in addition to withdrawal transactions, on ATMs owned by
      both us and our merchants.





Service and other
sales — fees we charge for providing repair, maintenance, other services,
parts and supplies to merchants who purchase or rent ATMs from
us.


13


Sales of ATM
equipment — sales of ATM equipment to an independent operator or
merchant.





The principal cost related to the
operation of an ATM is the commission we pay to a merchant or the ATM
owner.  The amount of the commission is dependent on a number of
factors the most important of which is whether we provide cash for the
machine.  Under our merchant-owned model, the merchant retains the
majority or all of the surcharge which is the primary component of
commission.  ATMs we deploy under a full placement model for which we
pay the costs to operate the unit have a lower commission rate than those owned
and operated by a merchant.  Full placement machines incur lower sales
commissions and typically generate more income.





Branding





During the past two years, we have
strengthened our business by focusing specifically on the sales, service and
management of ATMs within the United States.  We have completed a
restructuring effort by selling underperforming operations and assets,
renegotiating vendor relationships and contracts, and identifying complementary
business partners.





One of the key changes we have made to
help expand the recognition of our identity and service offerings to the public
was to change our corporate name to "Access to Money, Inc."  We
believe this name and brand uniquely identify the products and services we offer
and provides a simple, yet powerful, vision and connection to our clients,
industry and consumers.





Strategic
Outlook





While changes in consumer practices
have impacted the number of ATM transactions, we have continued to leverage our
partnership with Select-A-Branch to deploy Select-A-Branch enabled ATMs which
provide surcharge free transactions to customers of participating financial
institutions.  We have experienced significant increases in
transaction volume at surcharge free machines installed at specific locations of
our largest customers.





We have also been successful in placing
ATMs under our "Bank at Work" program which is a unique arrangement for placing
units in professional office and business environments and
locations.  Under this program, we supply an ATM and provide a fully
outsourced solution to the customer.  The business model provides
customers with the benefits of an accessible ATM in their work environment, no
capital outlay, and a revenue sharing stream based on transaction
volume.





We continue to pursue agreements with
national and regional retailers, franchisors, and associations to deploy our
ATMs.





We continue to move our student loan
services business forward under our new partnership with People
Capital.  By combining our services along with People Capital's
turnkey solution for the selection, origination and servicing of private student
loans, we look to bring People Capital's loan lending technology to credit
unions and community banks across the country.  This partnership
provides us with the ability to offer both origination and servicing support to
our customers.  Total revenues from this business have been immaterial
to date.


14
  Results of
Operations





The following table sets forth our
Consolidated Statements of Operations information as percentages of
sales.  The percentages for commission are calculated as a percentage
of gross transaction-based sales.  The percentages for net sales are
calculated as a percentage of total gross sales.  All other
percentages are calculated as a percentage of net sales.  Percentages
may not add due to rounding.





Three
      Months Ended
                  September 30,
                
                
                Nine
      Months Ended
                  September 30,2010
                
                
                2009
                
                
                2010
                
                
                2009Gross
      sales
                
                
                100.0
                %
                
                
                100.0
                %
                
                
                100.0
                %
                
                
                100.0
                %Commission
                
                
                72.3
                
                
                
                70.0
                
                
                
                71.7
                
                
                
                71.5Net
      sales
                
                
                32.8
                
                
                
                34.4
                
                
                
                33.2
                
                
                
                32.9Cost
      of sales
                
                
                57.0
                
                
                
                51.3
                
                
                
                53.9
                
                
                
                50.6Gross
      profit
                
                
                43.0
                
                
                
                48.7
                
                
                
                46.1
                
                
                
                49.4Sales,
      general and administrative expenses
                
                
                33.6
                
                
                
                34.9
                
                
                
                35.7
                
                
                
                36.8Operating
      income
                
                
                9.3
                
                
                
                13.9
                
                
                
                10.4
                
                
                
                12.5Interest
      expenseInterest
      expense
                
                
                10.0
                
                
                
                9.1
                
                
                
                10.2
                
                
                
                9.7Amortization
      - debt issuance
                
                
                5.4
                
                
                
                7.0
                
                
                
                6.9
                
                
                
                7.4Total
      Interest Expense
                
                
                15.4
                
                
                
                16.1
                
                
                
                17.1
                
                
                
                17.1Loss/(gain)
      on warrant value
                
                
                (9.9
                )
                
                
                30.5
                
                
                
                (14.0
                )
                
                
                24.1Net
      income (loss)
                
                
                (10.5
                )%
                
                
                (32.7
                )%
                
                
                2.8
                %
                
                
                (28.6
                )%





Key
Operating Metrics





We rely on certain key measures to
monitor our operating performance, including total transactions, total
withdrawal transactions, number of transacting ATMs, withdrawals per ATM per
month, gross sales per withdrawal transaction, commission per withdrawal, and
net transaction based sales per withdrawal per month.





The following table sets forth
information regarding these key measures for the three and nine month periods
ended September 30, 2010 and 2009:





Three
      Months Ended
                  September 30,
                
                
                Nine
      Months Ended
                  September 30,2010
                
                
                2009
                
                
                2010
                
                
                2009Total
      transactions
                
                
                10,030,974
                
                
                
                11,061,782
                
                
                
                30,851,758
                
                
                
                33,209,920Withdrawal
      transactions
                
                
                8,039,168
                
                
                
                8,860,220
                
                
                
                24,785,532
                
                
                
                26,553,565Average
      number of transacting ATMs
                
                
                10,747
                
                
                
                11,233
                
                
                
                10,915
                
                
                
                11,329Average
      withdrawals per ATM per month
                
                
                249
                
                
                
                263
                
                
                
                252
                
                
                
                260Average
      gross transaction-based sales per withdrawal transaction
                
                $
                2.44
                
                
                $
                2.47
                
                
                $
                2.46
                
                
                $
                2.43Average
      commission per withdrawal transaction
                
                $
                1.77
                
                
                $
                1.73
                
                
                $
                1.76
                
                
                $
                1.74Average
      net transaction-based sales per withdrawal transaction
                
                $
                0.67
                
                
                $
                0.74
                
                
                $
                0.70
                
                
                $
                0.69




15


The average number of transacting ATMs
in our network during the third quarter of 2010 decreased by 486 from 11,233 in
the third quarter of 2009 compared to 10,747 in 2010.  This decrease
was primarily due to normal attrition and the removal of 364 Cumberland Farms
ATMs during the quarter due to the non-renewal of their contract.  The
decrease in the number of transacting machines contributed to a 821,000, or
9.3%, decrease in the number of withdrawal transactions during the three months
ended September 30, 2010 compared to the three months ended
September 30, 2009.





During the first nine months of 2010
the average number of transacting machines decreased by 414 to 10,915 compared
to 11,329 in 2009.  The decrease was due to regular attrition, closure
of locations by merchants, and more recently the impact of the Cumberland Farms
machines coming out of service.





The number of transacting ATMs in our
network at September 30, 2010 was 10,603 compared to 11,161 at
September 30, 2009.





We experienced a decrease in the
average net transaction-based sales per withdrawal of $0.07 to $0.67 in the
third quarter of 2010 from $0.74 in the third quarter of 2009.  This
decrease was primarily due to the removal of units that contributed larger per
unit margins and new contracts that were installed with higher commission
structures.  Net transaction-based sales were also impacted during the
third quarter of 2010 due to lower interchange revenue as a result of networks
increasing their fees per transaction.  While a majority of these fees
are being fully passed through to the ATM merchant/operator, the fee reduction
directly reduces revenue on our full placement units.  Our average net
transaction-based sales per withdrawal increased $0.01 from $0.69 to $0.70
during the nine month periods ended September 30, 2009 and 2010,
respectively.  The network fees had less of an impact over the nine
month period of 2010 because they were not implemented by the networks until the
second quarter of 2010.  We expect however, the most recent fee
increases and any future network fee increases will impact margins on units on
which the fees cannot be passed forward to the ATM
merchant/operator.





Comparison
of Results of Operations for the Three and Nine Month Periods Ended
September 30, 2010 to the Three and Nine Month Periods Ended
September 30, 2009.





Sales





The following table sets forth selected
information from our Condensed Consolidated Statements of
Operations.  The results are in thousands, except for
percentages.





Three
      Months Ended September 30,
                      
                      
                      Nine
      Months Ended September 30,2010
                      
                      
                      2009
                      
                      
                      % Change
                      
                      
                      2010
                      
                      
                      2009
                      
                      
                      % ChangeGross
      transaction-based sales
                      
                      $
                      19,653
                      
                      
                      $
                      21,838
                      
                      
                      
                      (10.0
                      )
                      
                      $
                      60,893
                      
                      
                      $
                      64,447
                      
                      
                      
                      (5.5
                      )Commissions
                      
                      
                      14,208
                      
                      
                      
                      15,291
                      
                      
                      
                      (7.1
                      )
                      
                      
                      43,679
                      
                      
                      
                      46,109
                      
                      
                      
                      (5.3
                      )Net
      transaction-based sales
                      
                      
                      5,445
                      
                      
                      
                      6,547
                      
                      
                      
                      (16.8
                      )
                      
                      
                      17,214
                      
                      
                      
                      18,338
                      
                      
                      
                      (6.1
                      )Service
      and other sales
                      
                      
                      651
                      
                      
                      
                      612
                      
                      
                      
                      6.4
                      
                      
                      
                      1,883
                      
                      
                      
                      2,408
                      
                      
                      
                      (21.8
                      )ATM
      equipment sales
                      
                      
                      814
                      
                      
                      
                      696
                      
                      
                      
                      17.0
                      
                      
                      
                      2,392
                      
                      
                      
                      1,605
                      
                      
                      
                      49.1Branch
      build out
                      
                      
                      35
                      
                      
                      
                      173
                      
                      
                      
                      (79.8
                      )
                      
                      
                      175
                      
                      
                      
                      234
                      
                      
                      
                      (25.2
                      )Net
      sales
                      
                      $
                      6,945
                      
                      
                      $
                      8,028
                      
                      
                      
                      (13.5
                      )
                      
                      $
                      21,664
                      
                      
                      $
                      22,585
                      
                      
                      
                      (4.1
                      )





Gross transaction-based sales were
approximately $19.7 million during the three months ended
September 30, 2010 compared to $21.8 million for the corresponding
period of 2009.  This $2.1 million, or 10.0%, decrease was
primarily attributable to fewer transacting units between the
periods.





Gross transaction-based sales were
approximately $60.9 million during the first nine months of 2010 compared
to approximately $64.4 million for the corresponding period of
2009.  This $3.5 million, or 5.5%, decrease was primarily
attributable to fewer transacting ATMs.





Service and other sales increased
$39,000 to $651,000, or 6.4%, during the three-month period ended
September 30, 2010 as compared to the corresponding period in
2009.  The increase was primarily due to the pass through of higher
network fees being assessed on transactions in 2010 which were not assessed in
2009.


16


Service and other sales decreased by
$525,000, or 21.8%, to $1.9 million during the nine month periods ended
September 30, 2010 as compared to the corresponding period in
2009.  The decrease was primarily due to fewer billable service calls
as a result of the replacement of older ATMs with newer equipment.





Sales of ATM machines increased by
$118,000, or 17.1%, to $814,000 in the third quarter of 2010 from $696,000 in
the third quarter 2009.  This increase was the result of hardware
sales to several large customers in 2010 compared to 2009 when many customers
waited for the economy to improve before spending capital on new
equipment.





Sale of ATM machines increased by
$787,000, or 49.1%, to $2.4 million in the first nine months of 2010 from
$1.6 million in the first nine months of 2009.  This increase was
the result of hardware sales to several large customers in 2010 compared to 2009
when many customers waited for the economy to improve before spending capital on
new equipment.





Commissions decreased from
$15.3 million in the three–month period ended September 30, 2009 to
$14.2 million in the period ended September 30, 2010.  This
decrease of approximately $1.1 million, or 7.1%, resulted primarily from
fewer transactions.  As a percentage of gross transaction-based sales,
commissions increased to 72.3% in the third quarter of 2010 from 70.0% in the
third quarter of 2009.  The average commission per withdrawal
transaction increased to $1.77 for the third quarter of 2010 as compared to
$1.73 for the third quarter of 2009.  The higher commission per
withdrawal is the result of new commission structures on recent ATM contracts
compared to those for machines with lower commission structures that were taken
out of service during 2009.





Commissions decreased from
$46.1 million in the first nine months of 2009 to approximately
$43.7 million in the first nine months of 2010.  This decrease of
$2.4 million, or 5.3%, was the result of fewer units and
transactions.  As a percentage of gross transaction-based sales,
commissions increased to 71.7% in the first nine months of 2010 from 71.5% in
the first nine months of 2009.  The average commission per withdrawal
transaction increased to $1.76 for the first nine months of 2010 as compared to
$1.74 for the first nine months of 2009.





Cost
of Sales





The following table sets forth selected
costs of sales data from our Condensed Consolidated Statements of
Operations.  The results are in thousands, except for
percentages.





Three
      Months Ended September 30,
                
                
                Nine
      Months Ended September 30,2010
                
                
                2009
                
                
                % Change
                
                
                2010
                
                
                2009
                
                
                % ChangeProcessing
      costs
                
                $
                696
                
                
                $
                617
                
                
                
                12.9
                
                
                $
                1,792
                
                
                $
                1,955
                
                
                
                (8.3
                )Armored
      car service
                
                
                526
                
                
                
                646
                
                
                
                (18.6
                )
                
                
                1,729
                
                
                
                2,003
                
                
                
                (13.7
                )Cost
      of cash
                
                
                452
                
                
                
                490
                
                
                
                (7.6
                )
                
                
                1,483
                
                
                
                1,461
                
                
                
                1.5Service
      costs
                
                
                762
                
                
                
                961
                
                
                
                (20.6
                )
                
                
                2,425
                
                
                
                2,668
                
                
                
                (9.1
                )Cost
      of machine sales
                
                
                784
                
                
                
                749
                
                
                
                4.7
                
                
                
                2,306
                
                
                
                1,532
                
                
                
                50.6Machine
      depreciation
                
                
                220
                
                
                
                235
                
                
                
                (6.5
                )
                
                
                670
                
                
                
                626
                
                
                
                7.1Communication
      costs
                
                
                233
                
                
                
                247
                
                
                
                (5.6
                )
                
                
                629
                
                
                
                736
                
                
                
                (14.5
                )Other
      costs
                
                
                289
                
                
                
                172
                
                
                
                68.0
                
                
                
                642
                
                
                
                458
                
                
                
                40.2Total
      cost of sales
                
                $
                3,962
                
                
                $
                4,117
                
                
                
                (3.8
                )
                
                $
                11,676
                
                
                $
                11,439
                
                
                
                2.1





Cost of sales from operations consist
primarily of cost of vault cash, service costs, processing costs, and armored
car service costs.  Costs of sales decreased approximately $156,000,
or 3.8%, to $4.0 million during the three months ended September 30,
2010 compared to $4.1 million in the same period in 2009.  Costs
of sales increased approximately $238,000, or 2.1%, to $11.7 million during
the first nine months of 2010 as compared to $11.4 million in the first
nine months of 2009.  The reasons for the changes between the three
and nine month periods ended September 30, 2010 and September 30, 2009
are described below.





Processing fees increased $79,000, or
12.9%, to $696,000, in the three months ended September 30, 2010 compared
to $617,000 in the same period of 2009.  The increase is due to a
change in fees being assessed by the MasterCard and Pulse
networks.  Processing fees decreased by $163,000, or 8.3%, in the nine
month period ending September 30, 2010 compared to $2.0 million in the
same period in 2009.  This decrease is the result of a credit from a
processor for overcharges and lower fees due to lower transaction
volume.


17


Armored car costs decreased $38,000, or
18.6%, to $526,000 in the three months ended September 30, 2010 from
$646,000 in the same period of 2009.  This decrease is attributable to
a decrease in the number of ATMs for which we supply the cash.





Armored car costs decreased $274,000,
or 13.7%, to $1.7 million in the nine months ended September 30, 2010 from
$2.0 million in the same period of 2009.  This decrease is
attributable to a reduction in the number of ATMs for which we supply the cash.





Our cost of vault cash decreased by
$38,000, or 7.6%, to $452,000 during the three months ended September 30,
2010 from $490,000 in the same period of 2009.  This decrease was the
result of the following factors.  First, the number of ATMs which we
provided cash to decreased by 368, or 17.1% from 2,148 in the third quarter of
2009 to 1,780 in the third quarter of 2010.  Second, the average
amount of vault cash used in the third quarter of 2010 decreased by 17.7%, to
$34.5 million from $41.9 million during the third quarter of
2009.  The interest rate on ourvault cash facility
remained constant at 2.75% between September 30, 2009 and
September 30, 2010.





Our cost of vault cash increased by
$22,000, or 1.5%, to approximately $1.48 million during the first nine
months of 2010 from $1.46 million in the first nine months of
2009.  The average amount of vault cash we utilized to supply cash to
ATMs decreased $526,000, or 1.3%, to $40.8 million for the first nine
months of 2010 from $41.3 million for the first nine months of
2009.  The increase is attributable to deductibles paid for machines
that incurred a loss due to theft, administrative fees for transaction claims by
cardholders, and an increase in the insurance premium paid per machine per month
assessed by our vault cash provider.





Maintenance and third party service
costs decreased $199,000, or 20.6%, to $762,000 in the three months ended
September 30, 2010 compared to $961,000 in the same period of
2009.





Maintenance and third party service
costs decreased $243,000, or 9.1%, to approximately $2.4 million in the
first nine months of 2010 compared to $2.7 million in the first nine months
of 2009.  This reduction is the result of improvements in coordination
with our third party service vendors combined with improved communication
directly with our clients by our customer and technical services
teams.  We restructured our process to determine the cause of
mechanical and/or operating issues remotely via telephone and internet which has
reduced repeated service visits to machines.





The cost of machine sales increased
$35,000, or 4.7%, to $784,000 in the three months ended September 30, 2010
compared to $749,000 in the same period of 2009.  This increase is due
to higher sales between the third quarter of 2009 and the third quarter of
2010.





Machine sale cost increased $774,000,
or 50.6%, to $2.3 million in the first nine months of 2010 from
$1.5 million in the first nine months of 2009 due to hardware sales to
several large customers in 2010 compared to the same period in 2009 during which
customers were hesitant to make large capital outlays.





Gross Profit(in thousands, except for
percentages)





Three
      Months Ended September 30,
                
                
                Nine
      Months Ended September 30,2010
                
                
                2009
                
                
                % Change
                
                
                2010
                
                
                2009
                
                
                % ChangeGross
      profit
                
                $
                2,983
                
                
                $
                3,911
                
                
                
                (23.7
                )
                
                $
                9,988
                
                
                $
                11,146
                
                
                
                (10.4
                )





During the three months ended
September 30, 2010, gross profit was $3.0 million compared to
$3.9 million in the same period of 2009.  During the first nine
months of 2010, we generated $10.0 million of gross profit compared to
$11.1 million in the first nine months of 2009.  The reasons for
the decreases have been discussed above in sales and costs.


18


Selling, General, and Administrative
Expenses(in thousands,
except for percentages)





Three
      Months Ended September 30,
                
                
                Nine
      Months Ended September 30,2010
                
                
                2009
                
                
                % Change
                
                
                2010
                
                
                2009
                
                
                % ChangeSelling,
      general and administrative
                
                $
                2,336
                
                
                $
                2,799
                
                
                
                (16.5
                )
                
                $
                7,737
                
                
                $
                8,316
                
                
                
                (7.0
                )





Selling, general and administrative
expense decreased by $463,000, or 16.5%, to $2.3 million in the three
months ended September 30, 2010 from $2.8 million in the corresponding
period of 2009.  Selling, general and administrative expense as a
percent of net sales decreased to 33.2% in the third quarter of 2010 from 34.9%
in the third quarter of 2009.





Selling, general and administrative
expense decreased by $579,000, or 7.0%, to approximately $7.7 million in
the first nine months of 2010 from approximately $8.3 million in the first
nine months of 2009.  Selling, general and administrative expense as a
percent of net sales decreased to 35.7% in the first nine months of 2010 from
36.8% in the first nine months of 2009.





Payroll related costs decreased by
$225,000, or 17.0%, to $1.1 million for the three months ended
September 30, 2010 compared to $1.3 million in the same period in
2009.  This decrease is primarily attributable to reductions in bonus,
commission, temporary labor costs, and headcount.





Payroll related costs decreased by
$496,000, or 12.0%, to $3.6 million in the first nine months of 2010 from
$4.1 million in the first nine months of 2009.  This decrease is
primarily attributable to reductions in bonus, commission, temporary labor
costs, and headcount.





While we have seen increases in
marketing and professional fees of approximately $44,000 between the three month
periods ended September 30, 2010 and 2009, these increases have been offset
by decreases in telephone, legal and accounting of approximately
$156,000.





We also experienced decreases in
repairs and maintenance, telephone, insurance, office related, bank fees, legal
and outsourced services of approximately $418,000 in the first nine months of
2010 compared to the corresponding period of 2009.  These reductions
have been offset by a combined increase of approximately $251,000 of costs
related to rent, licenses and fees, travel and entertainment and marketing in
the first nine months of 2010 compared to the corresponding period of
2009.





In connection with the loss of income
related to the non-renewal of a major customer contract, we have made staff
reductions, reduced general and administrative cost and instituted company-wide
salary reductions.  The costs associated with severance payments are
included in a restructuring account within selling, general and administrative
expense.





Operating Income(in thousands, except for
percentages)





Three
      Months Ended September 30,
                
                
                Nine
      Months Ended September 30,2010
                
                
                2009
                
                
                % Change
                
                
                2010
                
                
                2009
                
                
                % ChangeOperating
      income
                
                $
                647
                
                
                $
                1,112
                
                
                
                (41.8
                )
                
                $
                2,251
                
                
                $
                2,830
                
                
                
                (20.5
                )





During the three months ended
September 30, 2010, operating income was $647,000, compared to
$1.1 million earned in the corresponding period of 2009.  During
the first nine months of 2010, we generated $2.3 million of operating
income compared to $2.8 million in the first nine months of
2009.  The reasons for the decreases have been discussed above in
sales and costs.


19


Depreciation and Amortization(in thousands, except for
percentages)





Three
      Months Ended September 30,
                
                
                Nine
      Months Ended September 30,2010
                
                
                2009
                
                
                % Change
                
                
                2010
                
                
                2009
                
                
                % ChangeDepreciation
      expense
                
                $
                305
                
                
                $
                384
                
                
                
                (20.6
                )
                
                $
                939
                
                
                $
                877
                
                
                
                7.1Amortization
      expense
                
                $
                193
                
                
                $
                170
                
                
                
                (13.5
                )
                
                $
                545
                
                
                $
                509
                
                
                
                7.1





Depreciation is accounted for in both
cost of sales and selling, general and administrative
expense.  Machine depreciation for ATMs that we own is included in
cost of sales while all other depreciation related to furniture fixtures and
equipment, computer related assets and automobiles is included in selling,
general and administrative expense.  Amortization listed above is for
intangible assets.  We also have amortization related to debt issuance
costs, which is accounted for below operating income and included in interest
expense.





The increases in the depreciation
between the three and nine month periods of 2009 and 2010 are primarily due to
the addition of full placement ATMs that we acquired and placed into
service.





Interest Expense(in thousands except for
percentages)





Three
      Months Ended September 30,
                
                
                Nine
      Months Ended September 30,2010
                
                
                2009
                
                
                % Change
                
                
                2010
                
                
                2009
                
                
                % ChangeInterest
      expense
                
                $
                695
                
                
                $
                731
                
                
                
                (4.9
                )
                
                $
                2,211
                
                
                $
                2,200
                
                
                
                0.5Amortization
      – debt issuance
                
                
                376
                
                
                
                559
                
                
                
                (32.8
                )
                
                
                1,495
                
                
                
                1,673
                
                
                
                (10.7
                )Total
      interest related expense
                
                $
                1,071
                
                
                $
                1,290
                
                
                
                (17.0
                )
                
                $
                3,706
                
                
                $
                3,873
                
                
                
                (4.3
                )





Total interest related expense for the
three months ended September 30, 2010 decreased by $219,000, or
17.0%, to $1.1 million from $1.3 million in the corresponding
period of 2009. These decreases were based on accruals related to the terms
of our new and amended loan agreements.





Total interest expense for the first
nine months of 2010 decreased by $167,000, or 4.3%, to $3.7 million
compared to $3.9 million in the corresponding period in
2009.  These decreases were based on accruals related to the terms of
our new and amended loan agreements.





Loss on Debt Extinguishment
(in thousands except for percentages)





Three
      Months Ended September 30,
                
                
                Nine
      Months Ended September 30,2010
                
                
                2009
                
                
                % Change
                
                
                2010
                
                
                2009
                
                
                % ChangeLoss
      on debt extinguishment
                
                $
                995
                
                
                $
                -
                
                
                
                -
                
                
                $
                995
                
                
                $
                -
                
                
                
                -





The loss on debt extinguishment is the
result of three components derived from the refinancing of our debt which
included an exchange of warrants.  The $995,000 consists of $164,000
pertaining to the write off of deferred financing costs related to
$7.5 million in payments made on the 2008 Notes which released the lenders
as the primary debtor thus extinguishing the liability.  The second
component of loss on debt extinguishment was approximately $1.2 million
which was the remaining unamortized debt discount associated with warrants that
were exchanged when the 2008 Notes were paid.  The third component was
$422,000 representing the gain in value between shares exchanged and shares
issued.





Gain/Loss
on Warrant Value





Effective January 1, 2009, we
adopted new accounting guidance that can affect the accounting for warrants and
many convertible instruments with provisions that protect holders from a decline
in the stock price.  Protection provisions reduce the exercise price
of a warrant or convertible instrument if the issuer either issues equity shares
for a price that is lower than the exercise price of those instruments or issues
new warrants or convertible instruments that have a lower exercise
price.  We evaluated and determined that outstanding warrants to
acquire our stock contain provisions that protect holders from declines in the
stock price and as a result, recognized these warrants as liabilities at their
respective fair values on each reporting date.  For a complete
description of the loss on warrant value, see our consolidated financial
statements contained elsewhere in this report.


20


The table below provides a
reconciliation of the beginning and ending balances for our warrant liability
and increase in fair value using significant unobservable inputs (Level 3) as of
September 30, 2010 (in thousands).





Balance
      as of January 1, 2010
                  
                  $
                  6,747Exchange
      of warrants
                  
                  
                  (3,081
                  )Decrease
      in fair value of warrants
                  
                  
                  (3,029
                  )Balance
      as of September 30, 2010
                  
                  $
                  637





Net
Income (loss)(in thousands,
except for percentages)





Three
      Months Ended September 30,
                
                
                Nine
      Months Ended September 30,2010
                
                
                2009
                
                
                % Change
                
                
                2010
                
                
                2009
                
                
                % ChangeNet
      income (loss)
                
                $
                (729
                )
                
                $
                (2,628
                )
                
                
                72.2
                
                
                $
                604
                
                
                $
                (6,458
                )
                
                
                109.3





We recognized net income of
approximately $729,000 for the three months ended September 30, 2010
compared to a net loss of $2.6 million for the same period of
2009.  This $1.9 million, or 72.2%, change was impacted by a
$3.1 million change in the gain/loss in warrant value between the
periods.





We recognized net income of
approximately $604,000 for the first nine months of 2010 compared to a net loss
of $6.5 million for the first nine months of 2009.  This
$7.1 million, or 109.3%, improvement was impacted by a $8.5 million
change in the gain/loss in warrant value between the first nine months of 2010
compared to the same period in 2009.





Provision
for Income Taxes





We have recorded no benefit from our
losses for the third quarters of 2010 and 2009 because we are uncertain that we
will be able to realize the benefit of our net operating loss carryforwards and
future deductible amounts.





Liquidity
and Capital Resources





Our principal ongoing funding
requirements are for working capital to finance operations, make debt payments,
and fund capital expenditures.  We believe that our cash resources are
adequate for our currently anticipated needs over the next twelve
months.





Net cash provided by operating
activities during the nine months ended September 30, 2010 was
$1.9 million compared to $4.2 million during the nine months ended
September 30, 2009.  The principal factors contributing to the
difference between the periods were the release of restricted cash in 2009 in
the amount of $1.2 million without a comparable event in 2010, and the
payment of leases of approximately $950,000 which occurred in 2009 without a
comparable event in 2010.  Due to the loss of Cumberland Farms, our
cash flow will be lower until we backfill these units with new operating
ATMs.





Net cash used in investing activities
during the nine months ended September 30, 2010 was $1.3 million
compared to $1.2 million in the nine months ended September 30,
2009.  Both are primarily related to capital expenditures for ATMs and
equipment.





Net cash used for financing activities
was $3.2 million during the nine months ended September 30, 2010 and
consisted of the repayment of term loans.  Net cash used for financing
activities during the nine months ended September 30, 2009 was $892,000 and
was also primarily for the repayment of term loans.





We had cash and cash equivalents of
approximately $3.2 million at September 30, 2010 compared to
$5.8 million at December 31, 2009.


21


At September 30, 2010 and 2009, we
had net working capital deficits of $5.1 and $2.2 million,
respectively.





On September 3, 2010, we obtained $5.5
million via the Senior Loan with Sovereign Bank to restructure the
$11.0 million principal amount senior secured notes issued in 2008 (the
"2008 Notes").  The Senior Loan, as amended, is due September 3,
2015, accrues interest at the rate of 6.81% per annum, requires monthly payments
of principal and interest amortizing over a five year period, and is secured by
substantially all of our assets.





The proceeds of the Senior Loan,
together with $2.0 million of cash on hand, were used to repay $7.5 million of
principal due on the 2008 Notes.  In connection with the closing of
the Senior Loan,we
entered into the Amended and Restated Lampe Loan and Security Agreement and new
secured promissory notes (the "2010 Secured Notes").  The 2010 Secured
Notes have a principal amount of $3.5 million, are due October 3, 2015, are
subordinated to the Senior Loan, accrue interest at the rate of 7.0% per annum
if paid currently, or 10.0% if accrued, are payable on September 3and
March 3 of each year, with each interest rate increasing .25% on the first
anniversary of the closing, 1.0% on the second anniversary of the closing, 2.5%
on the third anniversary of the closing, and 5.0% on the fourth anniversary of
the closing, may be prepaid in whole or in part at anytime at our option, and
are secured by substantially all of our assets, subject to the lien in favor of
Sovereign Bank.





Our existing note payable to Douglas S.
Falcone, our Chief Operating Officer, in the principal amount of $9.75 million
was also restructured.  The initial note accrued interest at the rate
of 13.0% per annum payable quarterly with the principal balance due April 18,
2015, was unsecured, and was subordinated to the payment in full of the 2008
Notes.  In connection with the foregoing transactions, we issued, the
Subordinated Note to Mr. Falcone.  The Subordinated Note, as
amended, is due and payable in full October 3, 2015, is unsecured, and is
subordinated in all respects to the Senior Loan and the 2010 Secured
Notes.  The Subordinated Note accrues interest and contains payment
terms substantially similar to the 2010 Secured Notes.  For a more
complete description of the Senior Loan, 2010 Secured Notes and note payable to
Mr. Falcone, please see Note 4 of our Notes to Condensed Consolidated
Financial Statements included in Part I, Item 1 of this report.




Twelve
      months ended September 30,2011
                            
                            $
                            1,1952012
                            
                            
                            1,0522013
                            
                            
                            1,0172014
                            
                            
                            1,1792015
      and beyond
                            
                            
                            14,596$
                            19,039





Off-Balance
Sheet Arrangements





As of
September 30, 2010, we did not have any relationships with unconsolidated
entities or financial partners, such as entities often referred to as structured
finance or special purpose entities, established for the purpose of facilitating
off-balance sheet arrangements or other contractually narrow or limited
purposes.  As such, we are not materially exposed to any financing,
liquidity, market or credit risk that could arise if we had engaged in such
relationships.





Critical
Accounting Policies and Estimates





Our critical accounting policies and
estimates as of September 30, 2010 are consistent with those discussed in
our Annual Report on Form 10-K for the year ended December 31,
2009.





ITEM
      4.
            CONTROLS
      AND PROCEDURES





As of September 30, 2010, we
carried out the evaluation of the effectiveness of our disclosure controls and
procedures required by Rule 13a-15(e) under the Exchange Act under the
supervision and with the participation of our management, including our Chief
Executive Officer and Chief Financial Officer.  Based upon that
evaluation, our Chief Executive Officer and Chief Financial Officer concluded
that, as of September 30, 2010, our disclosure controls and procedures were
effective to provide reasonable assurance that information we are required to
disclose in reports that we file or submit under the Exchange Act is: (i)
recorded, processed, summarized and reported within the time periods specified
in the SEC’s rules and forms, and (ii) accumulated and communicated to our
management, including our Chief Executive Officer and Chief Financial Officer,
as appropriate to allow timely decisions regarding required
disclosure.


22


There has
been no change in our internal control over financial reporting identified in
connection with this evaluation that occurred during our fiscal quarter ended
September 30, 2010 that has materially affected, or is reasonably likely to
materially affect, our internal control over financial
reporting.


23


PART
II – OTHER INFORMATION





ITEM
      6.
            EXHIBITS





10.1
            First
      Amendment to Loan and Security Agreement, dated as of October 21, 2010 and
      effective as of September 3, 2010, by and among the Company, certain of
      the Company’s subsidiaries, and Sovereign Bank (incorporated herein by
      reference to Exhibit 10.1 of Form 8-K filed on October 26,
      2010).





10.2
            First
      Amendment to Amended and Restated Loan and Security Agreement, dated as of
      October 21, 2010 and effective as of September 3, 2010, by and among the
      Company, certain of the Company’s subsidiaries, LC Capital Master Fund,
      LP, Cadence Special Holdings II, LLC, and Lampe Conway & Co., LLC, as
      administrative and collateral agent (incorporated herein by reference to
      Exhibit 10.2 of Form 8-K filed on October 26,
    2010).





10.3
            First
      Allonge to Amended and Restated Subordinated Promissory Note, dated
      October 21, 2010 and effective as of September 3, 2010, executed by the
      Company in favor of Douglas Falcone (incorporated herein by reference to
      Exhibit 10.3 of Form 8-K filed on October 26,
    2010).





10.4
            Loan
      and Security Agreement, dated September 3, 2010, by and among the Company,
      Sovereign Bank and the other signatories thereof (incorporated herein by
      reference to Exhibit 10.1 of Form 8-K filed on September 10,
      2010).





10.5
            $5,500,000
      Note, dated September 3, 2010, executed by the Company in favor of
      Sovereign Bank (incorporated herein by reference to Exhibit 10.2 of
      Form 8-K filed on September 10,
2010).





10.6
            Amended
      and Restated Loan and Security Agreement, dated September 3, 2010, by and
      among the Company, LC Capital Master Fund, LP, Cadence Special Holdings
      II, LLC, Lampe Conway & Co., LLC, as administrative and collateral
      agent, and the other signatories thereto (incorporated herein by reference
      to Exhibit 10.3 of Form 8-K filed on September 10,
      2010).





10.7
            $3,150,000
      Note, dated September 3, 2010, executed by the Company in favor of LC
      Capital Master Fund, Ltd. (incorporated herein by reference to Exhibit
      10.4 of Form 8-K filed on September 10,
  2010).





10.8
            $350,000
      Note, dated September 3, 2010, executed by the Company in favor of Cadence
      Special Holdings II, LLC (incorporated herein by reference to Exhibit 10.5
      of Form 8-K filed on September 10,
  2010).





10.9
            Exchange
      Agreement, dated September 3, 2010, by and between the Company and LC
      Capital Master Fund, Ltd. (incorporated herein by reference to Exhibit
      10.6 of Form 8-K filed on September 10,
  2010).





10.10
            Exchange
      Agreement, dated September 3, 2010, by and between the Company and Cadence
      Special Holdings II, LLC (incorporated herein by reference to Exhibit 10.7
      of Form 8-K filed on September 10,
  2010).





10.11
            $9,754,465
      Amended and Restated Subordinated Promissory Note, executed by the Company
      in favor of Douglas Falcone (incorporated herein by reference to Exhibit
      10.8 of Form 8-K filed on September 10,
  2010).





31.1
            Certification
      of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the
      Securities Exchange Act of 1934, as amended, as adopted pursuant to
      Section 302 of the Sarbanes-Oxley Act of
2002.


24


31.2
            Certification
      of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the
      Securities Exchange Act of 1934, as amended, as adopted pursuant to
      Section 302 of the Sarbanes-Oxley Act of
2002.





32.1
            Certification
      of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002.





32.2
            Certification
      of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002.


25





SIGNATURE





Pursuant
to the requirements 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.





ACCESS
      TO MONEY, INC.Date:  November
      12, 2010
              By:
              /s/ Michael J. DolanMichael
      J. DolanChief
      Financial Officer


26