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 quarter ended September 30, 2005


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

               For the transition period from _________to_________


                           Commission File No. 0-12374


                                  EQUITEX, INC.
              ----------------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)


           Delaware                                              84-0905189
-------------------------------                                -------------
(State or other jurisdiction of                                (IRS Employer
incorporation or organization)                               Identification No.)


                            7315 East Peakview Avenue
                            Englewood, Colorado 80111
                -------------------------------------------------
               (Address of principal executive offices) (Zip code)


                                 (303) 796-8940
                -------------------------------------------------
               (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, and (2) has been subject to such filing requirements
for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the Registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act. Yes [ ] No [X]

Number of shares of common stock outstanding at November 18, 2005: 7,640,450


<PAGE>

                         EQUITEX, INC. AND SUBSIDIARIES

<TABLE>
<CAPTION>

PART I     FINANCIAL INFORMATION                                                             Page
                                                                                             ----
<S>                                                                                        <C>
           Item 1.    Financial statements:

                      Report of Independent Registered Public Accounting Firm                    2

                      Condensed consolidated balance sheets -
                      September 30, 2005 (unaudited) and December 31, 2004                   3 - 4

                      Condensed consolidated statements of operations -
                      three and nine months ended September 30, 2005 and 2004
                      (unaudited)                                                                5

                      Condensed consolidated statement of changes in
                      stockholders' equity - nine months ended September 30,
                      2005 (unaudited) 6

                      Condensed consolidated statements of cash flows -
                      nine months ended September 30, 2005 and 2004 (unaudited)              7 - 8

                      Notes to condensed consolidated financial statements (unaudited)      9 - 26

           Item 2.    Management's discussion and analysis of financial condition
                      and results of operations                                            27 - 39

           Item 3.    Quantitative and qualitative disclosures of market risk                   40

           Item 4.    Disclosure controls and procedures                                        41

PART II    OTHER INFORMATION

           Item 1.    Legal proceedings                                                         41

           Item 2.    Changes in securities and use of proceeds                                 41

           Item 3.    Defaults upon senior securities                                           41

           Item 4.    Submission of matters to a vote of security holders                       41

           Item 5.    Other information                                                         42

           Item 6.    Exhibits                                                                  42

                      Signatures                                                                43
</TABLE>



<PAGE>


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



Board of Directors
Equitex, Inc.

We have reviewed the accompanying condensed consolidated balance sheet of
Equitex, Inc. and subsidiaries as of September 30, 2005, the related condensed
consolidated statements of operations for the three-month and nine-month periods
ended September 30, 2005 and 2004, the related condensed consolidated statement
of changes in stockholders' equity for the nine-month period ended September 30,
2005, and the related condensed consolidated statements of cash flows for the
nine-month periods ended September 30, 2005 and 2004. These interim financial
statements are the responsibility of the Company's management.

We conducted our reviews in accordance with the standards of the Public Company
Accounting Oversight Board (United States). A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with the standards of the Public Company Accounting Oversight Board (United
States), the objective of which is the expression of an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such an
opinion.

Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying condensed consolidated financial statements referred
to above for them to be in conformity with accounting principles generally
accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public
Company Accounting Oversight Board (United States), the consolidated balance
sheet of Equitex, Inc. and subsidiaries as of December 31, 2004, and the related
consolidated statements of operations, changes in stockholders' equity, and cash
flows for the year then ended (not presented herein); and in our report dated
April 4, 2005 (which includes an explanatory paragraph relating to the adoption
of Financial Accounting Standards No. 142, GOODWILL AND OTHER INTANGIBLE ASSETS,
effective January 1, 2002), we expressed an unqualified opinion on those
consolidated financial statements. In our opinion, the information set forth in
the accompanying condensed consolidated balance sheet as of December 31, 2004,
is fairly stated, in all material respects, in relation to the consolidated
balance sheet from which it has been derived.



/s/ GHP HORWATH, P.C.

Denver, Colorado
November 18, 2005


                                                                               2
<PAGE>
                         EQUITEX, INC. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                             September 30,  December 31,
                                                  2005          2004
                                              -----------   -----------
                                              (unaudited)
                          ASSETS
Current assets:
    Cash and cash equivalents                 $ 8,528,478   $ 8,389,686
    Receivables, net                              688,142     1,338,109
    Current portion of notes and interest
      receivable, including related parties
      of $461 (2005) and $212,900 (2004)              461       472,291
    Prepaid expenses and other                    325,069       517,182
                                              -----------   -----------

        Total current assets                    9,542,150    10,717,268
                                              -----------   -----------


Notes and interest receivable, net,
    including related parties of
    $879,401 (2005) and $962,128 (2004)         4,274,401     3,399,240
Property, equipment and leaseholds, net         1,082,789     1,330,095
Intangible and other assets, net                2,574,511     3,135,103
Goodwill                                        5,636,000     5,636,000
                                              -----------   -----------

                                               13,567,701    13,500,438
                                              -----------   -----------

                                              $23,109,851   $24,217,706
                                              ===========   ===========

                                  (Continued)

                                                                               3
<PAGE>
                         EQUITEX, INC. AND SUBSIDIARIES

                CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
<TABLE>
<CAPTION>

                                                                               September 30,    December 31,
                                                                                    2005            2004
                                                                                ------------    ------------
                                                                                (unaudited)

                   LIABILITIES AND STOCKHOLDERS' EQUITY

<S>                                                                             <C>             <C>
Current liabilities:
    Accounts payable                                                            $    714,467    $    982,774
    Accrued expenses and other liabilities, including related
       party accruals of $1,062,115 (2005) and $526,000 (2004)                     3,219,070       2,541,406
    Convertible and other promissory notes and current portion of
       long-term debt, including related party notes of $568,344 (2005) and
       $93,719 (2004)                                                             15,521,493      13,181,873
    Due to credit card holders                                                       144,805         187,432
    Liabilities of discontinued operations                                                           592,911
                                                                                ------------    ------------
         Total current liabilities                                                19,599,835      17,486,396

Long-term debt, net of current portion                                             2,425,442       3,044,016
                                                                                ------------    ------------
         Total liabilities                                                        22,025,277      20,530,412
                                                                                ------------    ------------
Commitments and contingencies

Redeemable preferred stock:
       Series K, 6% stated value $1,000 per share; 3,100 shares authorized;
         3,055 (2005) shares issued and outstanding, net of discount of
         $  2,577,200                                                                477,800
                                                                                ------------
Stockholders' equity:
    Preferred stock; 2,000,000 shares authorized:
       Series D, 6%; stated value $1,000 per share; 408 shares issued
         and outstanding (2004)                                                                      408,000
       Series G, 6%; stated value $1,000 per share; 370 shares issued
         and outstanding (2004)                                                                      370,000
       Series I, 6%; stated value $1,000 per share; 1,600 shares issued
         and outstanding (2004)                                                                    1,600,000
    Common stock, $0.01 par value; 50,000,000 shares authorized
       7,473,464 (2005) and 5,893,634 (2004) shares issued;
       7,463,727 (2005) and 5,801,589 (2004) shares outstanding                       74,734          58,936
    Notes, interest and stock subscription receivable                               (682,002)       (763,002)
    Additional paid-in capital                                                    28,315,631      21,322,132
    Accumulated deficit                                                          (26,972,647)    (18,886,247)
    Less treasury stock at cost; 9,737 shares (2005) and 92,045 shares (2004)       (128,942)       (422,525)
                                                                                ------------    ------------
         Total stockholders' equity                                                  606,774       3,687,294
                                                                                ------------    ------------
                                                                                $ 23,109,851    $ 24,217,706
                                                                                ============    ============
</TABLE>
           See notes to condensed consolidated financial statements.
                                                                               4
<PAGE>
                         EQUITEX, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

       THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004 (UNAUDITED)

<TABLE>
<CAPTION>
                                                        Three months ended              Nine months ended
                                                           September 30,                   September 30,
                                                       2005            2004            2005            2004
                                                  ------------    ------------    ------------    ------------
<S>                                               <C>             <C>             <C>             <C>
Fee revenue                                       $  4,980,376    $  4,308,684    $ 13,966,925    $ 11,230,047
Credit card income, net of provision for losses         40,995          63,243         159,573         208,421
                                                  ------------    ------------    ------------    ------------
        Total revenue                                5,021,371       4,371,927      14,126,498      11,438,468
                                                  ------------    ------------    ------------    ------------

Location expenses                                    3,643,217       3,244,970      10,308,587       8,223,569
Location support expenses                            1,909,275       1,477,517       4,823,830       4,382,605
Corporate selling, general and
    administrative                                     960,487         335,471       3,985,877       1,642,318
                                                  ------------    ------------    ------------    ------------
                                                     6,512,979       5,057,958      19,118,294      14,248,492
                                                  ------------    ------------    ------------    ------------
        Loss from operations                        (1,491,608)       (686,031)     (4,991,796)     (2,810,024)
                                                  ------------    ------------    ------------    ------------
Other income (expense):
    Interest income, including related party
      interest for the three months of $5,121
      (2005) and $46,296 (2004) and $35,169
      (2005) and $111,369 (2004) for the nine
      months                                             5,284          46,318          35,528         219,862
    Interest expense, including related party
      interest for the three months of $2,474
      (2005) and $745 (2004) and $8,153
      (2005) and $1,510 (2004) for the nine
      months                                          (906,591)       (592,989)     (3,099,215)     (1,415,002)
                                                  ------------    ------------    ------------    ------------
                                                      (901,307)       (546,671)     (3,063,687)     (1,195,140)
                                                  ------------    ------------    ------------    ------------
Loss from continuing operations before
    income taxes and minority interest              (2,392,915)     (1,232,702)     (8,055,483)     (4,005,164)
Income tax expense                                      (8,000)                        (24,000)     (1,386,000)
                                                  ------------    ------------    ------------    ------------
Loss before minority interest                       (2,400,915)     (1,232,702)     (8,079,483)     (5,391,164)
Minority interest                                                      171,609                         225,349
                                                  ------------    ------------    ------------    ------------
Loss from continuing operations                     (2,400,915)     (1,061,093)     (8,079,483)     (5,165,815)
Loss from discontinued operations                       (1,549)         (2,468)         (6,917)         (8,197)
                                                  ------------    ------------    ------------    ------------

Net loss                                            (2,402,464)     (1,063,561)     (8,086,400)     (5,174,012)
Accretion of preferred stock                           (54,800)                        (54,800)         (4,640)
Deemed preferred stock dividends                      (158,566)        (56,600)       (158,566)       (168,400)
Exchange of Series G and I convertible
    preferred stock in excess of carrying value       (212,000)                       (212,000)
                                                  ------------    ------------    ------------    ------------
Net loss applicable to common stockholders        $ (2,827,830)   $ (1,120,161)   $ (8,511,766)   $ (5,347,052)
                                                  ============    ============    ============    ============
Basic and diluted net loss per common share:
    Loss from continuing operations               $      (0.39)   $      (0.20)   $      (1.31)   $      (0.95)
    Loss from discontinued operations                        *               *               *               *
                                                  ------------    ------------    ------------    ------------
Basic and diluted loss per share                  $      (0.39)   $      (0.20)   $      (1.31)   $      (0.95)
                                                  ============    ============    ============    ============
Weighted average number of common
    shares outstanding:
      Basic and diluted                              7,245,296       5,656,780       6,503,077       5,641,063
                                                  ============    ============    ============    ============
*Amount is less than $0.01 per share
</TABLE>
           See notes to condensed consolidated financial statements.
                                                                               5
<PAGE>
       CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

                NINE MONTHS ENDED SEPTEMBER 30, 2005 (UNAUDITED)
<TABLE>
<CAPTION>
                                                                     Notes,
                           Convertible                              interest
                          preferred stock       Common Stock       and stock    Additional                    Common       Total
                        -------------------   ------------------- subscription    paid-in     Accumulated    treasury  stockholders'
                        Shares    Amount       Shares     Amount   receivable     capital       deficit        stock       equity
                        ------  ----------    ---------   -------   ---------   -----------   ------------   ---------   ----------
<S>                     <C>      <C>          <C>         <C>       <C>         <C>           <C>            <C>         <C>
Balances, January 1,
 2005                    2,378   $2,378,000   5,893,634   $58,936   $(763,002)  $21,322,132   $(18,886,247)  $(422,525)  $3,687,294

Exercises of options
 and warrants for
 common stock (Note 9)                          326,608     3,266                   903,378                                 906,644

Beneficial conversion
 feature and warrants
 issued in connection
 with notes payable
 (Note 6)                                                                           742,659                                 742,659

Return of common stock
 previously issued for
 conversion of
 accounts payable                               (2,500)      (25)                   (6,425)                                 (6,450)

Return and retirement
 of subsidiary common
 stock in exchange for
 reduction of stock
 subscription
 receivable (Note 9)                                                   81,000       (81,000)                                      -

Issuance of subsidiary
 options (Note 9)                                                                     9,500                                   9,500

Conversion of Series D
 preferred stock to
 common stock (Note 9)    (408)    (408,000)    203,529     2,035                   405,965                                       -

Conversion of notes
 payable, accrued
 interest and accounts
 payable to common
 stock (Note 9)                                 190,092     1,901                   792,014                                 793,915

Exchange of Series G &
 I preferred stock for
 Series K redeemable
 preferred stock
 (Notes 8 and 9)        (1,970)  (1,970,000)                                       (957,000)                             (2,927,000)

Beneficial conversion
 feature and warrants
 attached to Series K
 preferred stock, net
 of accretion of
 $54,800 (Note 8)                                                                 2,577,200                               2,577,200

Sale of 82,308 shares
 of treasury stock for
 cash (Note 9)                                                                      (49,750)                   293,583      243,833

Issuance of common
 stock in satisfaction
 of long-term debt and
 accrued interest
 (Notes 6 and 9)                                121,617     1,216                   540,214                                 541,430

Issuance of common
 stock under private
 placement, net of
 offering costs of
 $177,000 (Note 9)                              725,332     7,253                 1,991,743                               1,998,996

Issuance of warrants
 to noteholders
 (Note 9)                                                                            30,000                                  30,000

Issuance of common
 stock in satisfaction
 of subsidiary
 liability (Note 7)                              15,152       152                    95,001                                  95,153

Net loss                                                                                        (8,086,400)              (8,086,400)
                        ------  ----------    ---------   -------   ---------   -----------   ------------   ---------   ----------
Balances, September
 30, 2005                   -    $       -    7,473,464   $74,734   $(682,002)  $28,315,631   $(26,972,647)  $(128,942)  $  606,774
                        ======   ==========   =========   =======   =========   ===========   ============   =========   ==========
</TABLE>
           See notes to condensed consolidated financial statements.
                                                                               6
<PAGE>
                         EQUITEX, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

            NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004 (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                 2005           2004
                                                                             -----------    -----------
<S>                                                                          <C>            <C>
Cash flow used in operating activities from continuing operations:
   Net loss                                                                  $(8,086,400)   $(5,174,012)
                                                                             -----------    -----------
Adjustments to reconcile net loss to net cash used in operating activities
   from continuing operations:
     Impairment of receivable                                                  1,596,111
     Loss on disposal of assets                                                  295,934
     Deferred income taxes                                                                    1,380,000
     Loss from discontinued operations                                             6,917          8,197
     Provision for losses                                                        216,171        228,025
     Depreciation and amortization                                             1,143,631        923,591
     Amortization of discounts related to warrants attached to notes
       payable                                                                   203,694         60,753
     Expense incurred upon issuance of warrants                                   30,000
     Stock-based compensation expense                                              9,500        633,720
     Amortization of discounts on convertible promissory notes payable
       related to beneficial conversion features                               1,588,729        200,000
     Minority interest                                                                         (225,349)
Changes in assets and liabilities:
   Decrease in accounts receivable                                               692,299        817,055
   (Increase) decrease in other receivables                                      (41,984)        65,690
   Decrease (increase) in interest receivable and other assets                   156,741       (414,237)
   Decrease in due to credit card holders                                        (42,627)       (53,965)
   Increase (decrease) in accounts payable and accrued liabilities               969,400       (274,352)
                                                                             -----------    -----------
Total adjustments                                                              6,824,516      3,349,128
                                                                             -----------    -----------
Net cash used in operating activities from continuing
   operations                                                                 (1,261,884)    (1,824,884)
                                                                             -----------    -----------
Cash flows from investing activites:
   Net (increase) decrease in credit card receivables                               (678)         7,460
   Purchase of furniture, fixtures and equipment                                (596,568)      (318,660)
   Advances on notes receivable                                               (3,011,073)    (2,041,773)
   Repayments of notes receivable                                                813,064         30,548
                                                                             -----------    -----------
Net cash used in investing activities from continuing operations              (2,795,255)    (2,322,425)
                                                                             -----------    -----------

Cash flows from financing activities:
   Decrease in bank overdraft                                                                (2,497,766)
   Proceeds from private placement                                             1,998,996
   Proceeds from the exercise of options and warrants                            906,644        229,178
   Purchase of Equitex shares for treasury by subsidiary                                       (113,625)
   Increase in deferred loan costs                                              (169,000)      (335,000)
   Issuances of notes payable, related parties and other                       4,078,000      7,722,210
   Repayments of notes payable, related parties and other                     (2,857,696)    (3,211,142)
   Repayment of stock subscription receivable                                                   200,000
   Proceeds from sale of treasury stock                                          243,833        519,429
                                                                             -----------    -----------
Net cash provided by financing activities from continuing operations           4,200,777      2,513,284
                                                                             -----------    -----------
Net cash used in discontinued operations                                          (4,846)       (37,874)
                                                                             -----------    -----------
</TABLE>
                                   (Continued)
                                                                               7
<PAGE>
                         EQUITEX, INC. AND SUBSIDIARIES

           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

            NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004 (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                                2005           2004
                                                                                            -----------    -----------
<S>                                                                                         <C>            <C>
Increase (decrease) in cash and cash equivalents                                                138,792     (1,671,899)
Cash and cash equivalents, beginning                                                          8,389,686      8,059,780
                                                                                            -----------    -----------
Cash and cash equivalents, ending                                                           $ 8,528,478    $ 6,387,881
                                                                                            ===========    ===========
Supplemental disclosure of cash flow information:

   Cash paid for interest                                                                   $ 1,215,172    $   790,378
                                                                                            ===========    ===========
   Cash paid for (refund of) income taxes                                                   $    23,851    $   (33,193)
                                                                                            ===========    ===========
Supplemental disclosure of non-cash investing and financing activities:

Exchange of Series G & I preferred stock for issuance of Series K preferred stock:

   Series G preferred stock (face value)                                                    $   370,000
   Series I preferred stock (face value)                                                      1,600,000
   Liquidation preferences on exchange                                                          529,500
   Accrued penalties on Series I preferred stock                                                128,000
   Deemed dividends on Series G & I preferred stock                                             427,500
                                                                                            -----------
                                                                                            $ 3,055,000
                                                                                            ===========

   Beneficial conversion feature and warrant issued in connection with Series K preferred
     stock                                                                                  $ 2,632,000
                                                                                            ===========

   Reduction of related party note receivable in consideration for asset transfer           $    17,900
                                                                                            ===========

   Beneficial conversion feature and warrants issued in connection with notes payable       $   742,659    $   625,900
                                                                                            ===========    ===========

   Issuance of common stock in satisfaction of subsidiary liability                         $    95,153
                                                                                            ===========

   (Return and retirement of) issuance of subsidiary common stock in exchange for
     stock subscription receivable                                                          $   (81,000)   $   216,000
                                                                                            ===========    ===========

   Fixed assets sold to third party in exchange for  extinguishment of accounts payable     $   152,000
                                                                                            ===========

   Conversion of Series D preferred stock to common stock                                   $   408,000
                                                                                            ===========

   Conversion of notes payable, accrued interest and accounts payable to common stock       $   793,915
                                                                                            ===========

   Return of common stock previously issued for conversion of accounts payable              $     6,450
                                                                                            ===========

   Issuance of common stock in satisfaction of long-term debt and accrued interest          $   460,132
                                                                                            ===========

   Conversion of accounts payable for common stock previously issued as contingent
     consideration                                                                                         $    25,647
                                                                                                           ===========

   Conversion of notes payable and accrued interest in exchange for exercise of warrants                   $   148,962
                                                                                                           ===========

   Return of treasury stock to subsidiary in exchange for stock subscription receivable                    $   350,000
                                                                                                           ===========

   Cancellation of portion of stock subscription receivable                                                $   250,000
                                                                                                           ===========

   Conversion of note payable in exchange for issuance of subsidiary common stock                          $   200,000
                                                                                                           ===========

</TABLE>
           See notes to condensed consolidated financial statements.
                                                                               8
<PAGE>

                         EQUITEX, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

       THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004 (UNAUDITED)

1.   INTERIM FINANCIAL STATEMENTS, ORGANIZATION AND BASIS OF PRESENTATION,
     RECENT EVENTS AND MANAGEMENT'S PLANS:

     INTERIM FINANCIAL STATEMENTS:

     The condensed consolidated interim financial statements of Equitex, Inc.
       and subsidiaries (the "Company") as of September 30, 2005, and for the
       three and nine months ended September 30, 2005 and 2004, have been
       prepared by the Company without audit by the Company's independent
       auditors. In the opinion of the Company's management, all adjustments
       necessary to present fairly the financial position, results of
       operations, and cash flows of the Company as of September 30, 2005, and
       for the periods ended September 30, 2005 and 2004, have been made. Except
       as described below, those adjustments consist only of normal and
       recurring adjustments.

     Certain information and note disclosures normally included in the Company's
       annual financial statements prepared in accordance with accounting
       principles generally accepted in the United States of America have been
       condensed or omitted. These condensed consolidated financial statements
       should be read in conjunction with a reading of the consolidated
       financial statements and notes thereto included in the Company's Form
       10-K annual report filed with the Securities and Exchange Commission
       ("SEC") on April 15, 2005. The results of operations for the three and
       nine months ended September 30, 2005, are not necessarily indicative of
       the results to be expected for the full year.

     ORGANIZATION AND BASIS OF PRESENTATION:

     ACQUISITION OF CHEX BY FFFC (FORMERLY SVI):

     Effective June 7, 2004, the Company's wholly-owned subsidiary, Chex
       Services, Inc. ("Chex") executed an Agreement and Plan of Merger (the
       "Merger Agreement") with Seven Ventures, Inc. ("SVI") and its
       wholly-owned subsidiary (the "Merger Subsidiary"), whereby Merger
       Subsidiary merged with and into Chex and the separate corporate existence
       of the Merger Subsidiary ceased. Under the terms of the Merger Agreement,
       Equitex exchanged 100% of its equity ownership in Chex for 7,700,000
       shares of SVI, representing 93% of SVI's outstanding common stock
       following the transaction (subsequently reduced to 74% and 73% at
       December 31, 2004 and September 30, 2005, respectively, through the
       issuance of 2,128,957 and 2,229,002 shares of subsidiary common stock).
       In addition, Equitex received warrants to purchase 800,000 shares of SVI
       common stock at an exercise price of $0.10 per share, expiring five years
       from the date of closing. As a result, Chex became a wholly-owned
       subsidiary of SVI, a publicly-traded shell company. On June 29, 2004, SVI
       changed its name to FastFunds Financial Corporation ("FFFC"). As of
       September 30, 2005, Equitex owns warrants to purchase 85,000 shares of
       FFFC common stock.

     BASIS OF PRESENTATION:

     On January 25, 2005, the Company effected a one-for-six reverse stock
       split. As a result of the reverse split, the number of shares outstanding
       and per share information for all prior periods have been retroactively
       restated to reflect the new capital structure.

                                                                               9
<PAGE>
                         EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

       THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004 (UNAUDITED)

1.   INTERIM FINANCIAL STATEMENTS, ORGANIZATION AND BASIS OF PRESENTATION,
     RECENT EVENTS AND MANAGEMENT'S PLANS (CONTINUED):

     BASIS OF PRESENTATION (CONTINUED):

     The interim condensed consolidated financial statements presented herein
       include the financial statements of Equitex, Inc. and its wholly-owned
       subsidiaries, Key Financial Systems, Inc. ("Key") and Nova Financial
       Systems, Inc. ("Nova"), and Equitex's majority-owned subsidiaries, FFFC
       and Denaris Corporation ("Denaris") as of September 30, 2005 and December
       31, 2004. Minority interest reflected in the Company's statements of
       operations for the three and nine months ended September 30, 2004
       represents net losses of FFFC allocated to the minority common
       stockholders for the period from June 7, 2004 through September 30, 2004.
       During the year ended December 31, 2004, the net loss incurred by FFFC
       exceeded the minority interest in the common equity (deficiency) of the
       subsidiary. The excess of the losses for the three and nine months ended
       September 30, 2005 applicable to minority interest has been charged to
       the Company, and therefore no minority interest is reflected in the
       Company's condensed consolidated balance sheets. All significant
       intercompany accounts and transactions have been eliminated in
       consolidation.

     RECENT EVENTS:

     POTENTIAL BUSINESS ACQUISITIONS:

     On November 1, 2005, Equitex filed a preliminary proxy statement with the
       SEC for its Annual Meeting of Stockholders. Among other matters presented
       in the proxy statement, Equitex is seeking stockholder approval of a
       Definitive Agreement and Plan of Merger and Reorganization dated
       September 13, 2005, as amended on October 31, 2005 and November 18, 2005
       (the "Merger Agreement") with Hydrogen Power, Inc. ("HPI"). Under the
       terms of the Merger Agreement, Equitex is obligated to commence to
       monetize its holdings of the capital stock of FFFC, whereby Equitex has
       agreed that it shall use the first $10 million (of which $5 million is to
       be used 120 days after the closing of the Merger Agreement) of the net
       proceeds from such monetization towards the exploitation and
       commercialization of HPI's intellectual property. As discussed below in
       management's plans, the Company is currently exploring various
       alternatives to monetize its holdings in the capital stock of FFFC,
       including, but not limited to, Chex selling its business assets,
       including its casino contracts.

     The Company entered into the Merger Agreement for the acquisition of HPI
       through a newly formed Equitex subsidiary (the "Merger Sub"). Upon
       shareholder approval of the transaction, HPI is to be merged with and
       into the Merger Sub. As a result of the merger, the separate legal
       existence of HPI is to cease and the Merger Sub will continue as the
       surviving corporation and will remain a wholly owned subsidiary of
       Equitex.
                                                                              10
<PAGE>
                         EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

       THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004 (UNAUDITED)

1.   INTERIM FINANCIAL STATEMENTS, ORGANIZATION AND BASIS OF PRESENTATION,
     RECENT EVENTS AND MANAGEMENT'S PLANS (CONTINUED):

     RECENT EVENTS (CONTINUED):

     POTENTIAL BUSINESS ACQUISITIONS (CONTINUED):

     HPI, a development stage company, based in Seattle, Washington, performs
       hydrogen-related testing, research and engineering, and has developed a
       patented system (HPI HYDROGEN NOW TM) that creates pure hydrogen from
       aluminum and water. The patented technology allows hydrogen gas to be
       generated on-site and on-demand, and is designed to directly power any
       fuel cell or internal combustion engine application. The HPI process can
       supply hydrogen at customized rates and pressures, and may provide
       hydrogen transportation and supply solutions from small portable
       applications to large stationary systems.

     Under the terms of the Merger Agreement, stockholders of HPI are to receive
       Equitex common shares in an aggregate amount equal to 29% of the
       outstanding common shares of the Company on the date of closing, on a
       post closing basis, and shares of a to-be designated Series L Preferred
       Stock ("Series L"). The Company additionally agreed to provide HPI cash
       in the amount of $3 million, which was paid in full subsequent to the
       execution of the Merger Agreement (Note 4).

     The Series L shall be automatically convertible into Equitex common stock
       in three installments on the 180th, 270th and 360th day, respectively,
       after closing, with each installment convertible into 40% of the Equitex
       common stock outstanding immediately prior to such conversion subject to
       the achievement of certain performance benchmarks as defined in the
       Merger Agreement, the satisfaction of which is to be determined in
       Equitex's sole discretion. Under the Merger Agreement, all existing
       warrants to purchase shares of HPI common stock are to be exchanged at
       closing for warrants to purchase an equivalent number of shares of
       Equitex common stock at an exercise price of $3.00 per share, exercisable
       for the remainder of the unexpired term of the original HPI warrants.

     Completion of this transaction is subject to the receipt of any necessary
       stockholder approval.

     In May 2005, the Company entered into an agreement to acquire 100% of
       Digitel Network Corporation ("Digitel"), and National Business
       Communications, Inc. ("NBC"). Digitel's wholly-owned subsidiaries are
       Platinum Benefit Group, Inc., Personal Voice, Inc. and Private Voice,
       Inc. Digitel, NBC and their subsidiaries (collectively the "Companies")
       all of which are based in Clearwater, Florida. The Companies design,
       develop and market stored value card programs as well as personal voice
       mail products through their call center operations. In conjunction with
       their stored value card products, the Companies offer the Platinum
       Benefit Group premium service that includes vehicle roadside assistance,
       a prescription discount program, a dental care discount program, a
       registered nurse hotline and a family legal plan. The Companies also
       offer personal voice mail services through Personal Voice, Inc. and
       Private Voice, Inc. Finalization of this transaction is subject to
       completion of the schedules, exhibits and related contracts to the
       agreement, board of director approval, negotiation of certain promissory
       notes and any applicable stockholder approvals. Currently, the purchase
       price per the terms of the to-be-finalized agreement is $9 million; $5
       million cash due at closing and two, $2 million promissory notes.

                                                                              11
<PAGE>
                         EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

       THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004 (UNAUDITED)

1.   INTERIM FINANCIAL STATEMENTS, ORGANIZATION AND BASIS OF PRESENTATION,
     RECENT EVENTS AND MANAGEMENT'S PLANS (CONTINUED):

     RECENT EVENTS (CONTINUED):

     POTENTIAL BUSINESS ACQUISITIONS (CONTINUED):

     In June 2005, Chex signed a non-binding letter of intent to acquire,
       through a partnership to be formed, 51% of Coast ATM, Inc.'s ("Coast")
       Automated Teller Machine ("ATM") Business. Coast specializes in ATM
       placements in retail markets and its principals have experience in the
       gaming industry. In September 2005, the parties agreed to cease
       continuing discussions regarding the acquisition.

     LITIGATION SETTLEMENT:

     Effective July 21, 2005, the Company, FFFC, Chex, and iGames Entertainment,
       Inc. ("iGames") entered into a Settlement Agreement and Mutual Release
       (the "Settlement Agreement"), pursuant to which the parties agreed to
       resolve all pending litigation between them and release all claims from
       litigation (Note 4). No party to the Settlement Agreement admitted any
       wrongdoing or liability related to the litigation. The litigation was
       dismissed with prejudice by the United States District Court for the
       District of Delaware on July 22, 2005.

     Under the terms of the Settlement Agreement, Chex received $500,000 in
       September 2005. Additionally, FFFC received a contingent warrant to
       purchase up to 500,000 shares of common stock of iGames at $0.50 per
       share. The warrant is not exercisable until iGames has achieved
       $1,000,000 in net income during any given fiscal year (Note 4).

     SERIES K PREFERRED STOCK:

     In July 2005, the Company filed with the Delaware Secretary of State, a
       Certificate of Designation of Rights and Preferences of a new series of
       preferred stock (the "Series K Convertible Preferred Stock"). The Company
       is authorized to issue up to 3,100 shares of the Series K Convertible
       Preferred Stock, and in August 2005 issued 3,055 shares of the Series K
       Convertible Preferred Stock to holders of the Company's outstanding
       Series G and I 6% convertible preferred stock in exchange for all of the
       outstanding shares of Series G and I (Note 8).

     MANAGEMENT'S PLANS:

     The Company has incurred significant net losses, including a net loss of
       $2,402,464 and $8,086,400 for the three and nine months ended September
       30, 2005, and $7,457,983 for the year ended December 31, 2004,
       respectively. Although the net losses included certain non-cash expenses
       of approximately $1,190,000, $5,091,000 and $4,500,000, respectively, for
       each period, the Company anticipates that its liquidity and capital
       resources needs for the next 12 months may not be satisfied solely from
       operations.
                                                                              12
<PAGE>
                         EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

       THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004 (UNAUDITED)

1.   INTERIM FINANCIAL STATEMENTS, ORGANIZATION AND BASIS OF PRESENTATION,
     RECENT EVENTS AND MANAGEMENT'S PLANS (CONTINUED):

     MANAGEMENT'S PLANS (CONTINUED):

     The Company has developed plans and strategies to address its capital and
       liquidity needs for the next twelve-month period. Management believes
       that cash flows from Chex locations will provide the Company's primary
       source of operating capital, as Chex continues to generate location cash
       flows. In order to meet Equitex's obligations to monetize its FFFC
       holdings, Equitex and FFFC have had various discussions with unaffiliated
       third parties regarding a possible transaction. These discussions have
       covered various alternatives, including the possible sale of FFFC, sale
       of certain operating assets of Chex, sale of a portion or all of
       Equitex's FFFC holdings, as well as merger transactions. The Company and
       FFFC are in ongoing discussions in this regard, although no agreements
       have been signed to date. Additionally, the Company may be required to
       issue additional debt or equity instruments in order to raise additional
       capital, necessary to support the operating costs of Equitex, as well as
       for the acquisitions of Digitel, NBC, and HPI. Accordingly, the Company,
       from June 2005 through September 30, 2005, has sold 725,332 shares of its
       common stock in private placements for net proceeds of $1,998,996.
       Additionally, in September 2005 Equitex issued an aggregate of $2,154,000
       of convertible and non convertible promissory notes payable (Note 6).
       Most of the proceeds from these initiatives were utilized to meet the $3
       million loan obligation to HPI.

     The Company also evaluates, on an ongoing basis, potential business
       acquisition/restructuring opportunities that become available from time
       to time, which management considers in relation to its corporate plans
       and strategies.

     Management believes that these plans will provide sufficient resources to
       fund its operations, debt payments, potential business acquisitions and
       working capital needs at least through September 30, 2006.

     STOCK-BASED COMPENSATION:

     Statement of Financial Accounting Standards ("SFAS") No. 123, ACCOUNTING
       FOR STOCK-BASED COMPENSATION, defines a fair-value based method of
       accounting for stock-based employee compensation plans and transactions
       in which an entity issues its equity instruments to acquire goods or
       services from non-employees, and encourages but does not require
       companies to record compensation cost for stock-based employee
       compensation plans at fair value. The Company has chosen to continue to
       account for stock-based compensation using the intrinsic value method
       prescribed in Accounting Principles Board Opinion No. 25 ("APB 25"),
       ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES, and guidance provided in SFAS
       Interpretation ("FIN") No. 44, ACCOUNTING FOR CERTAIN TRANSACTIONS
       INVOLVING STOCK COMPENSATION. Accordingly, compensation cost for employee
       stock options is measured as the excess, if any, of the quoted market
       price of the Company's common stock at the date of the grant over the
       amount an employee must pay to acquire the stock.

                                                                              13
<PAGE>
                         EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

       THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004 (UNAUDITED)

1.   INTERIM FINANCIAL STATEMENTS, ORGANIZATION AND BASIS OF PRESENTATION,
     RECENT EVENTS AND MANAGEMENT'S PLANS (CONTINUED):

     STOCK-BASED COMPENSATION (CONTINUED):

     In December 2004, the Financial Accounting Standards Board ("FASB") issued
       SFAS No. 123(R), SHARE-BASED PAYMENT, which addresses the accounting for
       share-based compensation transactions. SFAS No. 123(R) eliminates the
       ability to account for share-based compensation transactions using APB
       25, and generally requires instead that such transactions be accounted
       and recognized in the statement of operations based on their fair value.
       SFAS No. 123(R) will be effective for the Company beginning with the
       first quarter 2006. Management is currently evaluating the provisions of
       this standard. Depending on the number and terms of options that may be
       granted in future periods, the implementation of this standard could have
       a material impact on the Company's financial position and results of
       operations.

     During the nine months ended September 30, 2005, FFFC granted to its
       officers and directors 385,000 options to purchase shares of common stock
       at an exercise price of $1.10 per share (the market value of FFFC's
       common stock on the date of the grant). Equitex did not grant any options
       during the nine months ended September 30, 2005.

     Had compensation cost for stock based awards issued by FFFC to employees,
       officers and directors been determined based on the fair values at the
       grant dates for awards under the plans consistent with the fair value
       recognition provision of SFAS No. 123, the Company's results would have
       been changed to the pro forma amounts indicated below:

<TABLE>
<CAPTION>
                                                             Three months ended             Nine months ended
                                                                 September 30,                 September 30,
                                                              2005           2004           2005           2004
                                                         ------------   ------------   ------------   ------------
<S>                                                      <C>            <C>            <C>            <C>
     Net loss                                            $ (2,402,464)  $ (1,063,561)  $ (8,086,400)  $ (5,174,012)

     ADD: Stock-based  employee  compensation expense
      included in reported net loss                             9,500                         9,500        553,000

     DEDUCT:  Total  stock-based  compensation  expense
      determined  under  fair value based method for
      all awards                                             (191,500)       (27,000)      (191,500)      (587,000)
                                                         ------------   ------------   ------------   ------------
     Pro forma net loss                                  $ (2,584,464)  $ (1,090,561)  $ (8,268,400)  $ (5,208,012)
                                                         ============   ============   ============   ============
     Net loss per share:

     Basic and diluted - as reported                     $      (0.39)  $      (0.20)  $      (1.31)  $      (0.95)
                                                         ============   ============   ============   ============
     Basic and diluted - pro forma                       $      (0.42)  $      (0.20)  $      (1.34)  $      (0.95)
                                                         ============   ============   ============   ============
</TABLE>

                                                                             14
<PAGE>

                         EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

       THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004 (UNAUDITED)

2.   DISCONTINUED OPERATIONS:

     The carrying amounts of assets and liabilities of Key (presented as
       discontinued operations) at September 30, 2005 and December 31, 2004 are
       as follows:

                                                    September 30,  December 31,
                                                         2005          2004
                                                     ------------  ------------
       Cash (included in prepaid expenses and other) $        141  $        139
                                                     ============  ============
       Accounts payable                                            $    490,854
       Accrued expenses                                                  25,000
       Notes and interest payable, related party                         77,057
                                                                   ------------
           Total liabilities (all current)                         $    592,911
                                                                   ============

     Key had no revenues for the three and nine months ended September 30, 2005
       and 2004. Losses incurred by Key for the three and nine months ended
       September 30, 2005 were $1,549 and $6,917, respectively, and for the
       three and nine months ended September 30, 2004 were $2,468 and $8,197,
       respectively. In June 2005, the Company issued shares of its common stock
       valued at the market value of the common stock at the date of the
       transactions to third parties in exchange for the third parties'
       assumption of Key's liabilities (Note 9).

3.   RECEIVABLES:

     Receivables at September 30, 2005 and December 31, 2004 consist of the
       following:

                                                    September 30,  December 31,
                                                         2005          2004
                                                     ------------  ------------
         Credit  card and ATM  processors,
          net of  allowance  of  $65,000
          (2005 and 2004)                            $    303,725  $    777,723
         Amount held in trust                             224,168       182,184
         Credit  card  receivables,  net of
           allowance  of $360 (2005) and
           $705 (2004)                                    140,011       139,663
         Other receivables                                 20,238       238,539
                                                     ------------  ------------
                                                     $    688,142  $  1,338,109
                                                     ============  ============

     Amounts due from credit card and ATM processors arise primarily from fees
       from credit card and ATM advances by Chex to casino patrons. The amount
       held in a trust under an agreement is to secure payment of reservation
       fees due customers under Nova's credit card portfolio. The amount is held
       by a third party financial institution. Credit card receivables include
       refundable and earned fees, which represent the balance reported to
       customers. Credit card receivables are reduced by allowances for
       refundable fees and losses.

                                                                              15
<PAGE>
                         EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

       THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004 (UNAUDITED)

4.   NOTES AND INTEREST RECEIVABLE:

     Notes and interest receivable as of September 30, 2005 and December 31,
       2004 consist of the following:

                                                    September 30,  December 31,
                                                         2005          2004
                                                     ------------  ------------
         Note receivable, HPI [A]                    $  3,000,000
         Note receivable, iGames [B]                               $  2,000,000
         Notes receivable from the estate of a
           deceased Chex officer [C]                                  1,484,691
         Note receivable, Chex customer                   336,500       336,500
         Note receivable, Paymaster Jamaica, Ltd.         500,000       500,000
         Notes receivable, Equitex 2000, Inc.           1,190,674     1,208,574
         Notes  receivable  from various Chex
           employees  ($461 in 2005 and
           $7,900 in 2004) and a former
           Chex shareholder                                45,461        52,900
                                                     ------------  ------------
                                                        5,072,635     5,582,665

         Interest   receivable,   includes
           related  party   interest  of
           $153,727 (2005) and $118,554 (2004)            153,727       214,666
         Less current maturities                             (461)     (472,291)
                                                     ------------  ------------
         Notes and interest receivable, net
           of current portion                           5,225,901     5,325,040
         Less allowance for uncollectible
           notes receivable [D]                          (951,500)   (1,925,800)
                                                     ------------  ------------
                                                     $  4,274,401  $  3,399,240
                                                     ============  ============

     [A]   In September 2005, in connection with the Merger Agreement, Equitex
           loaned HPI $3,000,000 under a Secured Convertible Promissory Note
           (the "SCPN"). Interest accrues at a variable rate equal to the prime
           rate (6.75% per annum of the date of the SCPN) and matures on
           September 16, 2008 (the "Maturity Date"). In the event of the
           completion of the Merger Agreement with HPI prior to the Maturity
           Date, the outstanding principal balance and accrued interest shall
           become immediately due and payable. In the event of the termination
           of the Merger Agreement, the outstanding principal balance and
           accrued interest shall automatically convert into shares of common
           stock of HPI, at a conversion rate of $3.00 per share.

                                                                              16
<PAGE>

                         EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

       THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004 (UNAUDITED)

4.   NOTES AND INTEREST RECEIVABLE (CONTINUED):

     [B]   In January 2004, Chex advanced iGames $2,000,000 under a Term Loan
           Note (the "Note"). Interest accrued at 10% per annum, and the
           maturity date was scheduled to occur in January 2005, as defined in
           the Note. The Note was to be secured by a pledge of capital stock of
           the borrower pursuant to a stock pledge agreement. The stock pledge
           agreement was not executed, which resulted in an event of default
           under the terms of the Note. In March 2004, Chex commenced litigation
           relating to the collection of the Note plus a termination fee,
           accrued interest and other fees, due from iGames under the Note. In
           addition, in March 2004, Chex commenced a lawsuit in Delaware state
           court (New Castle County) relative to the termination of the Stock
           Purchase Agreement ("SPA"). iGames commenced a lawsuit in the United
           States District Court for the District of Delaware alleging the
           Company and Chex breached both the Note and the SPA. All of the
           matters were consolidated so that all of the disputes were to be
           heard before the United States District Court for the District of
           Delaware. Effective July 21, 2005, the Company, Chex, and iGames
           resolved the litigation by executing the Settlement Agreement under
           which Chex received $500,000. In conjunction with the Settlement
           Agreement, FFFC received a contingent warrant to purchase up to
           500,000 shares of iGames common stock at $0.50 per share. The warrant
           is not exercisable until iGames has achieved $1,000,000 in net income
           during any given fiscal year. Accordingly, prior to the receipt of
           the $500,000, Chex reduced the iGames receivable from $2 million to
           $500,000 and accrued interest receivable related to iGames was
           reduced by $96,111. As a result, the Company recorded an impairment
           charge of $1,596,111 during the quarter ended June 30, 2005.

     [C]   In April 2005, the Company received $295,721 from the sale of all
           shares pledged as collateral in exchange for the amount due from the
           estate of a deceased Chex officer.

     [D]   Allowances for uncollectible notes receivable are as follow:

                                                    September 30,  December 31,
                                                         2005          2004
                                                     ------------  ------------
           Notes receivable from the estate of a
            deceased Chex officer                                  $  1,279,300
           Notes receivable, Equitex 2000, Inc.      $    465,000       160,000
           Note receivable, Paymaster Jamaica, Ltd        250,000       250,000
           Note receivable, Chex customer                 236,500       236,500
                                                     ------------  ------------
                                                     $    951,500  $  1,925,800
                                                     ============  ============

                                                                              17
<PAGE>
                         EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

       THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004 (UNAUDITED)

5.   GOODWILL, INTANGIBLE AND OTHER ASSETS:

     As of September 30, 2005 and December 31, 2004, goodwill was $5,636,000,
       none of which is deductible for tax purposes. Intangible and other assets
       consist of the following at September 30, 2005 and December 31, 2004:

<TABLE>
<CAPTION>
                                         June 30, 2005                            December 31, 2004
                         --------------------------------------------  --------------------------------------------
                             Gross                           Net           Gross                           Net
                           carrying     Accumulated       carrying       carrying     Accumulated       carrying
                            amount      amortization       amount         amount      amortization       amount
                         -------------  -------------  --------------  -------------  -------------  --------------
<S>                      <C>            <C>            <C>             <C>            <C>            <C>
     Casino contracts    $   4,300,000  $  2,399,440   $   1,900,560   $   4,300,000  $   1,949,440  $    2,350,560
     Non-compete
      agreements               350,000       275,300          74,700         350,000        227,300         122,700
     Customer lists            250,000       250,000                         250,000        250,000
     Trade names               100,000                       100,000         100,000                        100,000
                         -------------  -------------  -------------   -------------  -------------  --------------
     Total intangible
      assets                 5,000,000      2,924,740      2,075,260       5,000,000      2,426,740       2,573,260
     Deferred loan costs       806,625        357,307        449,318         637,625        125,515         512,110
     Other assets               49,933                        49,933          49,733                         49,733
                         -------------  -------------  -------------   -------------  -------------  --------------
                         $   5,856,558  $   3,282,047  $   2,574,511   $   5,687,358  $   2,552,255  $    3,135,103
                         =============  =============  =============   =============  =============  ==============
</TABLE>

6.   CONVERTIBLE AND OTHER PROMISSORY NOTES AND LONG-TERM DEBT:

     Convertible and other promissory notes and long-term debt at September 30,
       2005 and December 31, 2004, consist of the following:

                                                    September 30,  December 31,
                                                         2005          2004
                                                     ------------  ------------
         Notes payable to individual  investors,
          including  related party
          of $105,105 (2004)                         $ 11,156,497  $ 11,402,602
         Notes payable to affiliates
          through common ownership                                       21,700
         Convertible  promissory  notes,
          net  of  discounts  of  $824,097
          (2005) and $1,957,612 (2004) [A]              6,576,680     4,559,781
         Note payable to officers                         114,344        72,019
         Obligations under capital leases                  99,414       169,787
                                                     ------------  ------------
                                                       17,946,935    16,225,889
         Less current maturities                      (15,521,493)  (13,181,873)
                                                     ------------  ------------
                                                     $  2,425,442  $  3,044,016
                                                     ============  ============

                                                                              18
<PAGE>

                         EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

       THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004 (UNAUDITED)

6.   CONVERTIBLE AND OTHER PROMISSORY NOTES AND LONG-TERM DEBT (CONTINUED):

     [A]   In March 2004, Equitex issued an aggregate of $5,000,000 of
           convertible promissory notes (the "Whitebox Notes") to Pandora Select
           Partners, L.P. and Whitebox Hedged High Yield Partners, L.P. (the
           "Lenders"). The Whitebox Notes bear interest at 7% per annum and have
           a 45-month term, with a monthly principal and interest amount due of
           $134,571. The Whitebox Notes are senior to all other debt of both
           Equitex and Chex. Concurrently, with the Whitebox Notes financing,
           Equitex loaned the borrowed proceeds to Chex under terms identical to
           the Whitebox Notes. The Whitebox Notes are collateralized by all of
           the assets of Chex, Equitex's stock ownership in Chex and the Equitex
           Note (the "Collateral"). Equitex has the right to make any monthly
           payment of principal and interest in shares of its common stock. The
           common stock is to be issued based on 85% of the average bid price
           for 20 trading days prior to the payment due date. For the months of
           January through April and August 2005, Chex made loan payments due to
           Equitex directly to the Lenders. As partial payments to the Lenders,
           in May, June, July and September 2005, Equitex issued a total of
           121,617 shares of its common stock issued at a value of $460,132. The
           common stock was valued at $541,430 (based on the market value of the
           Company's common stock). Therefore, the Company recorded expenses of
           $44,542 and $81,298 during the three and nine months ended September
           30, 2005 related to these transactions, which represents the 15%
           discount to the market value of the common stock issued. Chex made
           payments of $78,152 directly to the Lenders, resulting in full
           payments having been made.

           In December 2004, FFFC closed on the sale of $1,774,064 of unsecured
           convertible promissory notes (the "Convertible Notes") with various
           investors. The Convertible Notes accrue interest at a rate of 9.5%
           per annum, had a 9-month original term, and were convertible at the
           holders' option (including any unpaid interest) into shares of FFFC
           common stock at a rate of $1.00 per share for a three-year period
           commencing on the due date. In connection with the sale and issuance
           of the Convertible Notes, the note holders also received warrants to
           purchase an aggregate of 1,774,064 shares of FFFC common stock at an
           exercise price of $2.00 per share. As of September 30, 2005, all of
           these notes are past due and are due on demand. Equitex and FFFC are
           in negotiations with the holders regarding a restructuring of the
           Convertible Notes. The restructure may include the holders extending
           or extinguishing the notes in consideration of extension fees,
           additional interest and/or issuance of Equitex or FFFC common stock
           and warrants.

           In September 2005, Equitex issued an aggregate of $1,500,000 of
           additional convertible promissory notes to the Lenders. The notes
           bear interest at 10% and have a 24-month term. Interest only payments
           are due October 2005 through December 2005 and beginning in January
           2006 monthly principal and interest payments of $78,157 will be due
           over the remaining 21-month term. In addition to the Collateral
           described in the Whitebox Notes above, the Company pledged its shares
           of FFFC common stock. The principal balance of the notes, with
           accrued interest, is convertible at the option of the lender, at a
           conversion price of $5.50 (the market value of Equitex's common stock
           at the date the notes were issued was $5.66). This resulted in a
           beneficial conversion feature valued at $330,000 using the effective
           conversion price. The Company reduced the carrying value of the notes
           for this amount, with an offset to paid-in capital. Equitex has the
           right, subject to certain limitations, to make any monthly payment of
           principal and interest in shares of its common stock. The common
           stock is to be issued based on

                                                                              19
<PAGE>
                         EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

       THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004 (UNAUDITED)

6.   CONVERTIBLE AND OTHER PROMISSORY NOTES AND LONG-TERM DEBT (CONTINUED):

           85% of the average bid price for 20 trading days prior to the payment
           due date. The Lenders also received warrants to purchase up to
           125,000 shares of common stock at $6.00 per share for a five-year
           period. The proceeds from the notes have been allocated between the
           estimated fair value of the warrants ($286,000), which was based upon
           the Black-Scholes option-pricing model, and the notes based on their
           relative fair values. As a result, the Company recorded the fair
           value of the warrants as a discount to the notes. The warrants and
           beneficial conversion feature are being amortized over the 24-month
           term of the Notes and accordingly, $13,232 has been recorded as
           additional interest expense for the three and nine months ended
           September 30, 2005. In connection with the Pandora Notes, Equitex
           paid a 3% origination fee, $100,000 in finder's fees and $20,000 in
           closing costs. These costs were recorded by the Company as deferred
           loan costs and are being amortized over the 24-month term of the
           notes. Accordingly, $3,437 was expensed for the three and nine months
           ended September 30, 2005.

           In September 2005, Equitex issued an aggregate of $454,000 and
           $200,000 of promissory notes to related parties and third parties,
           respectively. The third party promissory notes bear interest at 6%
           per annum and have a 120-day term. The third party note holders also
           received warrants to purchase up to 100,000 shares of Equitex common
           stock at an exercise price of $4.71 for a three-year period. The
           proceeds from the notes have been allocated between the estimated
           fair value of the warrants ($127,000), which was based upon the
           Black-Scholes option-pricing model, and the notes based on their
           relative fair values. As a result, the Company recorded the value of
           the warrants as a discount to the notes and is amortizing the cost
           over the 120-day term of the notes. Accordingly, $14,321 has been
           included in interest expense for the three and nine months ended
           September 30, 2005. The related party notes were originally 90-day
           notes bearing interest rates ranging from 22% to 24% per annum and
           also required an origination fee of between 5 1/2% to 6% to be paid
           along with principal and accrued interest on the due date. In
           September 2005, Equitex initiated an assignment of these notes to a
           corporation that is owned by a director of the Company in exchange
           for a promissory note to this corporation that is due December 9,
           2005, and which bears annual interest at 10%. The Company and this
           note holder are negotiating certain other terms related to the
           assignment.

7.   COMMITMENTS AND CONTINGENCIES:

     BONUS TO OFFICER:

     In June 2003, the Company's Board of Directors approved a bonus arrangement
       with the Company's president. The bonus arrangement provides for an
       annual bonus to be calculated quarterly based on 5% of the increase in
       the market value of the Company's common stock, accrued quarterly,
       beginning with the closing price as reported by Nasdaq on December 31 of
       each year, and ending with the closing price on December 31 of the
       following year. Payments under the bonus arrangement are to be made at
       the discretion of the Company's management from time to time, as cash
       flow permits. Compensation expense recorded under this arrangement was
       approximately $611,000 and $696,000 for the three and nine months ended
       September 30, 2005. During the three months ended September 30, 2005
       $199,000 was paid. No expense was incurred for the three and nine months
       ended September 30, 2004. As of September 30, 2005 and December 31, 2004,
       approximately $1,023,000 and $526,000 is included in accrued liabilities,
       respectively.

                                                                              20
<PAGE>
                         EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

       THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004 (UNAUDITED)

7.   COMMITMENTS AND CONTINGENCIES (CONTINUED):

     CONTRACT BUYOUT:

     In September 2005 Chex and FFFC entered into an agreement with a third
       party, whereby the third party is to receive $200,000 consisting of
       $125,000 cash and $75,000 of Equitex common stock. In consideration of
       the payment, FFFC and Chex are relieved of any ongoing commissions that
       the third party was previously entitled to receive under certain existing
       customer contracts, along with certain other provisions or concessions.
       Equitex issued the shares of its common stock based on a 20% discount to
       the ten day average closing price preceding the agreement. The discount
       was valued at $20,153. Accordingly, Chex recorded an expense of $220,153
       in September 2005. Chex paid the $125,000 in October 2005.

     INDEPENDENT SALES AGREEMENT:

     In September 2005, FFFC and Chex entered into an Independent Sales
       Agreement ("ISA") to compensate a third party and a FFFC director to
       obtain extensions and/or assignments of certain customer contracts as
       part of its discussions with third parties regarding possible
       transactions with FFFC or Chex. In consideration for the services to be
       provided in obtaining the extensions and/or amendments, FFFC has agreed
       to pay up to $500,000. Per the ISA, the $500,000 is to be earned
       immediately upon obtaining each extension and/or assignment, should a
       transaction be consummated. Through October 2005, no expenses have been
       incurred under the ISA.

     SUBSIDIARY EXECUTIVE COMPENSATION:

     In July 2005, FFFC's Board of Directors authorized a proposal for a stock
       based compensation plan (the "Plan") for its CEO. In August 2005, the
       FFFC Board of Directors retained an independent consultant to review the
       Plan for reasonableness. As a result of that review, in September 2005,
       the FFFC Board of Directors approved the Plan, which consists of the
       following: i) a warrant to purchase up to 125,000 shares of FFFC's $.001
       par value common stock for a period of three years at an exercise price
       of $1.81 per share (the 10 day average market price of the stock from the
       date of the proposal); ii) a number of shares of common stock of FFFC
       based on 5% of the increase in the market value of FFFC's common stock on
       an annual basis, with the exception of the first payment, which shall be
       for the period from July 1, 2005 to December 31, 2005; and, iii) a grant
       of 125,000 options under FFFC's 2004 Stock Option Plan. Each option has
       an exercise price of $1.10 (the market value of the common stock on the
       date of grant) with an expiration of September 2015. No expense was
       required to be recorded for the three months ended September 30, 2005
       under the Plan.

                                                                              21
<PAGE>
                         EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

       THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004 (UNAUDITED)

7.   COMMITMENTS AND CONTINGENCIES (CONTINUED):

     SUBSIDIARY BOARD OF DIRECTOR'S COMPENSATION:

     In September 2005 FFFC's Board of Directors authorized a new compensation
       plan for its directors, which includes the grant of 30,000 options to
       purchase FFFC common stock to each director on an annual basis, as well
       as annual compensation of $25,000 to each director, to be paid monthly.
       Accordingly, in September 2005, 60,000 options to purchase FFFC common
       stock were granted with an exercise price of $1.10 (the market value of
       the common stock on the date of the grant) for services provided during
       2004 and 2005 and cash compensation of approximately $29,200 was paid to
       each FFFC director for the period of July 2004 through August 30, 2005.
       Additionally, FFFC's secretary was granted 20,000 options at $1.10 per
       share (the market value of the common stock on the date of the grant).

     LITIGATION:

     In April 2004, Equitex and Chex executed a settlement agreement with Cash
       Systems, Inc. ("Cash Systems") pursuant to which the Company paid Cash
       Systems $125,000 for expenses related to an Agreement and Plan of Merger
       ("APM"), which was terminated in December 2003. As part of the settlement
       agreement, Cash Systems paid Chex approximately $476,000 for commissions
       owed to Chex by Cash Systems. In April 2004, both Equitex and Chex and
       Cash Systems agreed to mutually release each other from further liability
       related to the APM and the Seminole Tribe termination in January 2004;
       however, Equitex and Chex retained the right to commence legal action
       against Native American Cash Systems Florida, Inc. (NACSF), Native
       American Cash Systems, Inc. (NACS) and its President, for the wrongful
       termination of the Seminole Tribe casino contracts. In February 2005,
       Equitex and Chex reached a tentative settlement agreement to litigation
       pending in Hennepin County, Minnesota with NACSF, NACS and its President
       under which all the parties have agreed to dismiss their claims against
       each other in exchange for mutual releases. It is anticipated that this
       agreement will end litigation.

     The Company is involved in various other claims and legal actions arising
       in the ordinary course of business. In the opinion of management, the
       ultimate disposition of these matters will not have a material adverse
       impact either individually or in the aggregate on consolidated results of
       operations, financial position or cash flows of the Company.

     CONSULTING AGREEMENTS:

     In July 2004, FFFC entered into a twelve-month agreement with a third party
       consultant who was to provide sales, program and business development,
       and consulting services for FFFC's International operations. Under the
       terms of the agreement, FFFC was required to pay the consultant
       approximately $15,800 per month as an advance against future commissions
       earned by the consultant. The consultant was entitled to a 10% commission
       on all sales generated. In addition, the consultant was to earn a minimum
       of 3% of the acquisition value if the Company closed on an acquisition
       introduced by the consultant. The agreement could be terminated by either
       party subject to not less than three months written notice. No revenues
       were generated under the agreement and effective April 1, 2005, the
       parties agreed to terminate the agreement.

                                                                              22
<PAGE>
                         EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

       THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004 (UNAUDITED)

7.   COMMITMENTS AND CONTINGENCIES (CONTINUED):

     CONSULTING AGREEMENTS (CONTINUED):

     In May 2004, Chex entered into a consulting agreement with a financial
       advisor. The term of the agreement is two years and requires the Company
       to pay a total of $240,000 to the financial advisor in monthly
       installments of $10,000 each month. In May 2005, Chex notified the
       financial advisor that the financial advisor was in breach of the
       consulting agreement and effective June 1, 2005 suspended making the
       $10,000 monthly payments. In October 2005, the Company paid $50,000 as
       payment in full of the consulting agreement. The $50,000 is included in
       the corporate, selling and administrative expenses for the three and nine
       months ended September 30, 2005.

8.   REDEEMABLE PREFERRED STOCK:

     SERIES K CONVERTIBLE PREFERRED STOCK:

     In August 2005, the Company issued 3,055 shares of 6% Series K convertible
       preferred stock (the "Series K Preferred Stock") along with warrants to
       purchase 175,000 shares of common stock in exchange for all outstanding
       shares of Series G and I preferred stock (Note 9). The Company reduced
       the carrying value of the Series K preferred stock by the relative fair
       value of the warrants ($355,000), which was based on the Black-Scholes
       option-pricing model, with an offset to additional paid-in capital. The
       Series K Preferred Stock is convertible at the holder's option at any
       time through June 2009 into shares of the Company's common stock at a
       conversion price equal to the lesser of (i) $2.75 per share and (ii) 65%
       of the 5 day average closing bid price of the Company's common stock as
       specified in the agreement, provided that the percentage of the 5 day
       average closing bid price shall increase to 75% upon the occurrence of
       certain events. The holder of each share of the Series K preferred stock
       is entitled to cumulative dividends at 6% per annum, payable quarterly,
       with an 18% dividend default rate. Dividends are payable in cash or
       shares (at market value) of the Company's common stock. The beneficial
       conversion feature was valued at $2,277,000 using the effective
       conversion price. As a result, the Company reduced the carrying value of
       the Series K Preferred Stock for this amount with an offset to additional
       paid-in capital. The warrants and beneficial conversion feature are being
       accreted over the four-year term of the Series K Preferred Stock, and as
       a result, loss applicable to common stockholders was increased by $54,800
       for the three and nine months ended September 30, 2005.

     In the event the common stock of the Company achieves certain benchmarks,
       the Series K Preferred Stock is redeemable by the Company at a redemption
       price of $1,350 per share plus accrued and unpaid dividends. In the event
       the holders do not elect to convert the Series K Preferred Stock during
       the conversion period, the Series K Preferred Stock is required to be
       redeemed by the Company at stated value plus accrued unpaid dividends.
       Due to the terms and conditions of the Series K Preferred Stock, which
       may require redemption which is outside the control of the Company, the
       Series K Preferred Stock is not included in stockholders' equity at
       September 30, 2005. In October 2005, 411 shares of the Series K Preferred
       Stock, plus cumulative unpaid dividends of $3,640, were converted into
       150,078 shares of common stock, at a conversion price of $2.75 for the
       411 shares of Series K Preferred Stock and $5.84 for the unpaid
       dividends.

                                                                              23
<PAGE>
                         EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

       THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004 (UNAUDITED)

9.   STOCKHOLDERS' EQUITY:

     SERIES D CONVERTIBLE PREFERRED STOCK:

     In July 2005, the remaining 408 shares of Series D preferred stock, plus
       cumulative unpaid dividends of $188,911 were converted into 203,529
       shares of common stock at a conversion price of $2.93 per share.

     SERIES G CONVERTIBLE PREFERRED STOCK:

     In August 2005, 370 shares of Series G preferred stock, at 135% of the
       stated value and cumulative unpaid dividends of $87,285 were exchanged
       for 587 shares of the Series K Preferred Stock.

     SERIES I CONVERTIBLE PREFERRED STOCK:

     In August 2005, 1,600 shares of Series I Preferred Stock, at 125% of the
       stated value, cumulative unpaid dividends of $340,215 and accrued
       penalties of $128,000 were exchanged for 2,468 shares of the Series K
       Preferred Stock.

     NOTES, INTEREST AND STOCK SUBSCRIPTION RECEIVABLE:

     In August 2004, FFFC issued 40,000 shares of its common stock to a
       convertible note holder in exchange for a stock subscription receivable
       valued at $216,000. In February 2005, 15,000 of the shares, valued at
       $81,000, were returned to and retired by FFFC, reducing the stock
       subscription receivable to $135,000.

     At September 30, 2005, notes and interest receivable from an officer of
       Chex of $547,002 are presented as a reduction in stockholders' equity
       based on management's evaluation of repayment intentions. The notes are
       due on demand and the Company is no longer accruing interest on these
       notes due to uncertainty as to collection. The notes are collateralized
       by unregistered shares of the Company's common stock.

     ISSUANCES OF COMMON STOCK:

     During the nine months ended September 30, 2005, the Company sold 725,332
       shares of common stock in a private placement for $3.00 per share and
       received proceeds of $2,175,996, from which the Company paid customary
       fees and expenses, including fees to brokers and consultants of $177,000.
       In conjunction with the private placement, the investors received
       warrants to purchase up to 362,666 shares of common stock at an exercise
       price of $5.50 per share, which expire in June 2008.

     During the nine months ended September 30, 2005, the Company issued 326,608
       shares of common stock upon the conversion of warrants for $906,644, at
       an average conversion price of approximately $2.78 per share.

                                                                              24
<PAGE>
                         EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

       THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004 (UNAUDITED)

9.   STOCKHOLDERS' EQUITY (CONTINUED):

     ISSUANCES OF COMMON STOCK (CONTINUED):

     All of the shares and warrants were offered and sold in private placements,
       and were not registered under the Securities Act of 1933. These shares
       may not be offered or sold in the United States absent registrations or
       an applicable exemption from registration requirements.

     During the nine months ended September 30, 2005, the Company issued 130,142
       shares of common stock to third parties in exchange for their assumption
       of Equitex and Key accounts payable of $553,840 at an average price of
       $4.26 per share, the market price of the common stock at the date of
       conversion. In addition, Equitex and Key converted notes and interest
       payable of $161,209 due to third parties into 43,935 shares of common
       stock at a conversion price of $3.67 per share, the market price of the
       common stock at the date of conversion. Lastly, the Company issued 16,015
       shares of common stock for legal services valued at $78,866 at an average
       conversion price of $4.92 per share, the market price of the common stock
       at the date of conversion.

     During the nine months ended September 30, 2005, the Company issued 121,617
       shares of common stock valued at $541,430 as payment on long-term debt
       and accrued interest of $460,132. The stock was issued at 85% of market
       value and accordingly, the Company recorded additional expense of $44,542
       and $81,298 during the three and nine months ended September 30, 2005.

     TREASURY STOCK TRANSACTIONS:

     During the nine months ended September 30, 2005, Chex sold 82,308 shares of
       Equitex common stock for $243,833 or $2.96 per share (the market price of
       the common stock at the date of sale). The stock was acquired at an
       average cost of approximately $3.57 per share and the cost of the shares
       sold ($293,583) has been removed from treasury stock. The difference
       between the sales price and cost of the shares sold ($49,750) has been
       classified as a reduction of additional paid-in capital.

     WARRANTS:

     During the nine months ended September 30, 2005, the Company agreed to
       lower the exercise price of 133,333 common stock purchase warrants
       outstanding to unrelated third parties. The warrants had an exercise
       price of $4.26 per share and were exercisable until March 2009. The
       Company reduced the price to $3.75 per share only if the holders
       exercised within one week to induce the exercise of the warrants in order
       to provide working capital to the Company. The 133,333 warrants were
       exercised and the Company received proceeds of $500,000. Additionally,
       the Company agreed to issue 133,333 new warrants (as inducement to the
       holders to convert their original warrants) with an exercise price of
       $5.50 and an expiration date of June 1, 2010. The warrants were valued at
       approximately $30,000 and the amount is included in interest expense for
       the nine months ended September 30, 2005.

                                                                              25
<PAGE>
                         EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

       THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004 (UNAUDITED)

9.   STOCKHOLDERS' EQUITY (CONTINUED):

     SUBSIDIARY OPTIONS ISSUED FOR SERVICES:

     In September 2005, FFFC issued options to purchase 20,000 shares of its
       common stock at $1.10 per share to a non-employee officer of FFFC for
       services. The options were valued at approximately $9,500 and the amount
       was recorded as stock based compensation expense during the quarter ended
       September 30, 2005.

10.  INCOME TAXES:

     During the quarter ended June 30, 2004, management assessed the realization
       of its deferred tax assets. Based on this assessment, it was determined
       to be more likely than not that the Company's deferred tax assets would
       not be realizable and determined that a valuation allowance was required.
       Accordingly, the Company's valuation allowance was increased by
       $1,380,000 to fully reserve for its net deferred tax assets, which
       resulted in an increase to the provision for income taxes of the same
       amount. State income taxes of $8,000 were accrued for the three months
       ended September 30, 2005 and state income taxes of $24,000 and $6,000,
       respectively, were accrued for the nine months ended September 30, 2005
       and 2004.

                                                                              26
<PAGE>

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


THIS REPORT MAY CONTAIN CERTAIN "FORWARD-LOOKING" STATEMENTS AS SUCH TERM IS
DEFINED IN THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 OR BY THE
SECURITIES AND EXCHANGE COMMISSION IN ITS RULES, REGULATIONS AND RELEASES, WHICH
REPRESENT THE COMPANY'S EXPECTATIONS OR BELIEFS, INCLUDING BUT NOT LIMITED TO,
STATEMENTS CONCERNING THE COMPANY'S OPERATIONS, ECONOMIC PERFORMANCE, FINANCIAL
CONDITION, GROWTH AND ACQUISITION STRATEGIES, INVESTMENTS, AMOUNTS RECEIVABLE
FROM NET FIRST NATIONAL BANK, AND FUTURE OPERATIONAL PLANS, FOR THIS PURPOSE,
ANY STATEMENTS CONTAINED HEREIN THAT ARE NOT STATEMENTS OF HISTORICAL FACT MAY
BE DEEMED TO BE FORWARD-LOOKING STATEMENTS. WITHOUT LIMITING THE GENERALITY OF
THE FOREGOING, WORDS SUCH AS "MAY", "WILL", "EXPECT", "BELIEVE", "ANTICIPATE",
"INTENT", "COULD", "ESTIMATE", "MIGHT", OR "CONTINUE" OR THE NEGATIVE OR OTHER
VARIATIONS THEREOF OR COMPARABLE TERMINOLOGY ARE INTENDED TO IDENTIFY
FORWARD-LOOKING STATEMENTS. THESE STATEMENTS BY THEIR NATURE INVOLVE SUBSTANTIAL
RISKS AND UNCERTAINTIES, CERTAIN OF WHICH ARE BEYOND THE COMPANY'S CONTROL, AND
ACTUAL RESULTS MAY DIFFER MATERIALLY DEPENDING ON THE VARIETY OF IMPORTANT
FACTORS, INCLUDING UNCERTAINTY RELATED TO THE COMPANY'S OPERATIONS, MERGERS OR
ACQUISITIONS, GOVERNMENTAL REGULATION, THE VALUE OF THE COMPANY'S ASSETS AND ANY
OTHER FACTORS DISCUSSED IN THIS AND OTHER COMPANY FILINGS WITH THE SECURITIES
AND EXCHANGE COMMISSION.

GENERAL

On June 7, 2004, the Company's wholly-owned subsidiary, Chex Services, Inc.
("Chex") executed an Agreement and Plan of Merger (the "Merger Agreement") with
SVI and its wholly-owned subsidiary (the "Merger Subsidiary"), whereupon Merger
Subsidiary merged with and into Chex and the separate corporate existence of the
Merger Subsidiary ceased. Under the terms of the Merger Agreement, Equitex
exchanged its 100% ownership of Chex for 7,700,000 shares of SVI, representing
93% of SVI's outstanding common stock following the transaction. On June 29,
2004, SVI changed its name to FastFunds Financial Corporation ("FFFC"). In
addition, Equitex received warrants to purchase 800,000 shares of FFFC common
stock at an exercise price of $0.10 per share, expiring five years from the date
of closing. As a result, Chex became a wholly-owned subsidiary of FFFC. In
connection with the merger, FFFC received $400,000 through the issuance of
convertible promissory notes. The promissory notes bear interest at 5% per annum
and are convertible into 4,000,000 shares of FFFC common stock upon the
occurrence of certain future events. Unless earlier converted, any outstanding
balance of principal and interest is due April 14, 2007. During the year ended
December 31, 2004, FFFC issued 2,000,000 shares of its common stock in exchange
for $200,000 of the notes, as certain events had been met. As of September 30,
2005, Equitex's ownership percentage in FFFC is approximately 73%.

                                                                              27
<PAGE>

OVERVIEW

The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with the consolidated financial
statements and notes thereto for the years ended December 31, 2004, 2003 and
2002. The financial results presented for the three and nine months ended
September 30, 2005 and 2004 are those of FastFunds Financial Corporation
("FFFC"), Key Financial Systems, Inc. ("Key"), Nova Financial Systems, Inc.
("Nova") and Denaris Corporation ("Denaris"), on a consolidated basis with those
of Equitex, Inc. Key ceased "run-off" operations in the fourth quarter of 2003,
and Key's results for both periods are presented in a one-line presentation and
are included in "loss from discontinued operations".

POTENTIAL BUSINESS ACQUISITIONS:

On September 13, 2005, the Company entered into a definitive agreement (the
"Merger Agreement") for the acquisition of Hydrogen Power, Inc. ("HPI") through
a newly formed Equitex subsidiary (the "Merger Sub"). Upon shareholder approval
of the transaction, HPI is to be merged with and into the Merger Sub. As a
result of the merger, the separate legal existence of HPI is to cease and the
Merger Sub will continue as the surviving corporation and will remain a wholly
owned subsidiary of Equitex.

HPI, a development stage company, based in Seattle, Washington, performs
hydrogen-related testing, research and engineering, and has developed a patented
system (HPI HYDROGEN NOW TM) that creates pure hydrogen from aluminum and water.
The patented technology allows hydrogen gas to be generated on-site and
on-demand, and can directly power any fuel cell or internal combustion engine
application. The HPI process can supply hydrogen at customized rates and
pressures, and may provide hydrogen transportation and supply solutions from
small portable applications to large stationary systems.

Under the terms of the Merger Agreement, stockholders of HPI are to receive
Equitex common shares in an amount equal to 29% of the outstanding common shares
of the Company on the date of closing, on a post closing basis, and shares of a
to-be designated Series L Preferred Stock ("Series L"). The Company additionally
agreed to provide HPI cash of $3 million, which was paid in full subsequent to
the execution of the Merger Agreement.

The Series L shall be automatically convertible into Equitex common stock in
three installments on the 180th, 270th and 360th day, respectively, after
closing, with each installment convertible into 40% of the Equitex common stock
outstanding immediately prior to such conversion, subject to the achievement of
certain performance benchmarks as defined in the Merger Agreement, the
satisfaction of which is to be determined in Equitex's sole discretion.
Additionally, all existing warrants to purchase shares of HPI common stock are
to be exchanged for warrants to purchase an equivalent number of shares of
Equitex common stock at an exercise price of $3.00 per share, exercisable for
the remainder of the unexpired term of the original HPI warrants.

Under the terms of the Merger Agreement, Equitex is obligated to commence to
monetize its holdings of the capital stock of FFFC, and use the first $10
million (of which $5 million is to be used 120 days after the closing) of the
net proceeds from such monetization towards the exploitation and
commercialization of HPI's intellectual property.

Additionally, Chex may sell its business assets, including its casino contracts.
The proceeds from such a sale would first be used to meet the FFFC's and Chex's
payable and debt obligations prior to any distribution to FFFC shareholders
(including to Equitex to meet its obligations under the Merger Agreement). Any
remaining amounts may be used to finance another business opportunity.

                                                                              28
<PAGE>

Completion of this transaction is subject to the receipt of any necessary
stockholder approval.

HPI has licensed a patented technology that allows hydrogen gas to be generated
on-site and on-demand without connection to the electrical grid. The HPI process
can supply hydrogen at customized rates and pressures.

The HPI Hydrogen Now TM patented system creates pure hydrogen from the chemistry
of aluminum and any type of water. Aluminum is the third most abundant element
(after oxygen and silicon) in the earth's crust and water is universally
available. In addition, waste or scrap aluminum may be used, the by-products can
be recycled, and the process is pollution free and environmentally benign. The
hydrogen produced can directly power any fuel cell or internal combustion engine
application.

It is hoped that HPI technology can provide hydrogen transportation and supply
solutions from small portable applications to large stationary systems.
Potential future applications for its hydrogen power technology could include:

o    On-board hydrogen generation for internal combustion engines in
     automobiles, boats and other applications.
o    Portable power generation - emergency power generation, recreation
     vehicles/boating and light military applications.
o    Disposable/recyclable power cells for personal electronics - laptop
     computers, PDA's and cellular telephones.
o    Fixed generators for light commercial and industrial use including
     refueling stations for fuel cell operated automobiles.

HPI has a fully functional product development laboratory equipped to carry out
hydrogen-related testing, research and engineering. HPI has also made working
arrangements with two university laboratories - the Department of Metals and
Materials Engineering at the University of British Columbia, Canada and the
Department of Metals at the University of Washington, Seattle - to make use of
the larger, more sophisticated pieces of equipment already available at those
facilities.

In May 2005, the Company entered into an agreement to acquire 100% of Digitel
Network Corporation ("Digitel"), and National Business Communications, Inc.
("NBC"). Digitel's wholly-owned subsidiaries are Platinum Benefit Group, Inc.,
Personal Voice, Inc. and Private Voice, Inc. Digitel, NBC and their subsidiaries
(collectively the "Companies"), all of which are based in Clearwater, Florida.
The Companies design, develop and market stored value card programs as well as
personal voice mail products through their call center operations. In
conjunction with their stored value card products, the Companies offer the
Platinum Benefit Group premium service that includes vehicle roadside
assistance, a prescription discount program, a dental care discount program, a
registered nurse hotline and a family legal plan. The Companies also offer
personal voice mail services through Personal Voice, Inc. and Private Voice,
Inc. Finalization of this transaction is subject to completion of the schedules,
exhibits and related contracts to the agreement, board of director approval,
negotiation of certain promissory notes and any applicable stockholder
approvals. Currently, the purchase price per the terms of the to-be-finalized
agreement is $9 million; $5 million cash due at closing and two, $2 million
promissory notes.

                                                                              29
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

The Company has incurred significant net losses, including a net loss of
$2,402,464 and $8,086,400 for the three and nine months ended September 30,
2005, and $7,457,983 for the year ended December 31, 2004, respectively.
Although the net losses included certain non-cash expenses of approximately
$1,190,000, $5,091,000 and $4,500,000, respectively, for each period, the
Company anticipates that its liquidity and capital resources needs for the next
12 months may not be satisfied solely from cash flows generated from operating
activities.

Equitex and Chex, in order to meet Equitex's obligation to monetize its FFFC
holdings, may take one of the below described actions. The proceeds from such
sale, if any, would first be used to meet the Company's liquidity needs. Any
remaining amounts may be used to finance another business opportunity. If no
transaction is consummated, the Company may also be required to issue additional
debt or equity instruments in order to raise additional capital. The Company has
had various discussions with unaffiliated third parties regarding a possible
transaction. These discussions have covered various alternatives, including the
possible sale of Chex, sale of certain operating assets of Chex, sale of a
portion or all of Equitex's FFFC holdings, as well as merger transactions. The
Company is a party to ongoing discussions in this regard, although no agreements
have been signed to date.

Chex has been developing new products during the past year. These products are
complementary to its existing products and services. These products may include:
cashless gaming smart cards, debit cards and customized funds transfer systems
for multi-jurisdictional gaming operators. Also, Chex plans on expanding its
business into non-gaming cash access products. Development and costs associated
with such products have been and will continue to be incurred. Additionally,
FFFC formed a wholly-owned London based subsidiary, FastFunds International,
Inc. ("FFI"). FFI began operations in July 2004 and opened a London and Chicago
office. In connection with the start-up of FFI and the Company's attempt to
expand its business model into new markets and products, FFFC entered into
various management advisory and consultant agreements. However, during the nine
months ended September 30, 2005, FFFC terminated certain consulting agreements,
closed its Chicago and London offices, as no revenues have been generated
sufficient to offset the operating costs being incurred.

The Company has developed plans and strategies to address its capital and
liquidity needs for the next twelve-month period. Management believes that cash
flows from Chex's operating locations will provide the Company's primary source
of operating capital, as Chex continues to generate location cash flows.
Additionally, the Company may be required to issue additional debt or equity
instruments in order to raise additional capital to continue to support the
operating costs of Equitex, as well as for the acquisitions of Digitel, NBC and
HPI. Accordingly, the Company, from June through September 2005, has sold
725,332 shares of its common stock in private placements for net proceeds of
$1,998,996, and in September 2005, Equitex issued an aggregate of $2,154,000 of
convertible and non-convertible promissory notes payable. Additionally, Equitex
had discussions with an investment banker to provide advisory services regarding
a contemplated equity offering of the 7,700,000 shares of FFFC common stock that
it owns. The proceeds from these initiatives were utilized to meet the $3
million loan obligation to HPI. Additionally, as of June 30, 2005, FFFC ceased
all expenditures associated with its international marketing efforts.

The Company also evaluates, on an ongoing basis, potential business
acquisition/restructuring opportunities that become available from time to time,
which management considers in relation to its corporate plans and strategies.

Management believes that these plans will provide sufficient resources to fund
its operations, debt payments, potential business acquisitions and working
capital needs at least through September 30, 2006.

                                                                              30
<PAGE>

In March 2004, Equitex issued an aggregate of $5,000,000 of convertible
promissory notes (the "Whitebox Notes") to Pandora Select Partners, L.P. and
Whitebox Hedged High Yield Partners, L.P. (the "Lenders"). The Whitebox Notes
bear interest at 7% per annum and have a 45-month term, with a monthly principal
and interest amount due of $134,571. The Whitebox Notes are senior to all other
debt of both Equitex and Chex. Concurrently, with the Whitebox Notes financing,
Equitex loaned the borrowed proceeds to Chex under terms identical to the
Whitebox Notes. The Whitebox Notes are collateralized by all of the assets of
Chex, Equitex's stock ownership in Chex and the Equitex Note (the "Collateral").
Equitex has the right to make any monthly payment of principal and interest in
shares of its common stock. The common stock is to be issued based on 85% of the
average bid price for 20 trading days prior to the payment due date. For the
months of January through April and August 2005, Chex made loan payments due to
Equitex directly to the Lenders. As partial payments to the Lenders, in May,
June, July and September 2005, Equitex issued a total of 121,617 shares of its
common stock issued at a value of $460,132. The common stock was valued at
$541,430 (based on the market value of the Company's common stock). Therefore,
the Company recorded expenses of $44,542 and $81,298 during the three and nine
months ended September 30, 2005 related to these transactions, which represents
the 15% discount to the market value of the stock issued. Chex made payments of
$78,152 directly to the Lenders, resulting in full payments having been made.

In December 2004, FFFC closed on the sale of $1,774,064 of unsecured convertible
promissory notes (the "Convertible Notes") with various investors. The
Convertible Notes accrue interest at a rate of 9.5% per annum, had a 9-month
original term, and were convertible at the holders' option (including any unpaid
interest) into shares of FFFC common stock at a rate of $1.00 per share for a
three-year period commencing on the due date. In connection with the sale and
issuance of the Convertible Notes, the note holders also received warrants to
purchase an aggregate of 1,774,064 shares of FFFC common stock at an exercise
price of $2.00 per share. As of September 30, 2005, all of these notes are past
due and are due on demand. Equitex and FFFC are in negotiations with the holders
regarding a restructuring of the Convertible Notes. The restructure may include
the holders extending or extinguishing the notes in consideration of extension
fees, additional interest and/or issuance of Equitex or FFFC common stock and
warrants.

In September 2005, Equitex issued an aggregate of $1,500,000 of additional
convertible promissory notes to the Lenders. The notes bear interest at 10% and
have a 24-month term. Interest only payments are due October 2005 through
December 2005 and beginning in January 2006 monthly principal and interest
payments of $78,157 will be due over the remaining 21-month term. In addition to
the Collateral described in the Whitebox Notes above, the Company pledged its
shares of FFFC common stock. The principal balance of the notes, with accrued
interest, is convertible at the option of the lender, at a conversion price of
$5.50 (the market value of Equitex's common stock at the date the notes were
issued was $5.66). This resulted in a beneficial conversion feature valued at
$330,000 using the effective conversion price. The Company reduced the carrying
value of the notes for this amount, with an offset to paid-in capital. Equitex
has the right, subject to certain limitations, to make any monthly payment of
principal and interest in shares of its common stock. The common stock is to be
issued based on 85% of the average bid price for 20 trading days prior to the
payment due date. The Lenders also received warrants to purchase up to 125,000
shares of common stock at $6.00 per share for a five-year period. The proceeds
from the notes have been allocated between the estimated fair value of the
warrants ($286,000) and the notes based on their relative fair values. As a
result, the Company recorded the value of the warrants as a discount to the
notes. The warrants and beneficial conversion features are being amortized over
the 24-month term of the Notes and accordingly, $13,232 has been recorded as
additional interest expense for the three and nine months ended September 30,
2005. In connection with the Pandora Notes, Equitex paid a 3% origination fee,
$100,000 in finder's fees and $20,000 in closing costs. These costs were
recorded by the Company as deferred loan costs and are being amortized over the
24-month term of the notes. Accordingly, $3,437 was expensed for the three and
nine months ended September 30, 2005.

                                                                              31
<PAGE>

In September 2005, Equitex issued an aggregate of $454,000 and $200,000 of
promissory notes to related parties and third parties, respectively. The third
party promissory notes bear interest at 6% per annum and have a 120-day term.
The third party note holders also received warrants to purchase up to 100,000
shares of Equitex common stock at an exercise price of $4.71 for a three-year
period. The proceeds from the notes have been allocated between the estimated
fair value of the warrants ($127,000) and the notes based on their relative fair
values. As a result, the Company recorded the value of the warrants as a
discount to the notes and is amortizing the cost over the 120-day term of the
notes. Accordingly, $14,321 has been included in interest expense for the three
and nine months ended September 30, 2005. The related party notes were
originally 90-day notes bearing interest rates ranging from 22% to 24% per annum
and also required an origination fee of between 5 1/2% to 6% to be paid along
with principal and accrued interest on the due date. In September 2005, Equitex
initiated an assignment of these notes to a corporation that is owned by a
director of the Company in exchange for a promissory note to this corporation
that is due December 9, 2005, and which bears annual interest at 10%. The
Company and this note holder are negotiating certain other terms related to the
assignment.

For the nine months ended September 30, 2005, net cash used in operating
activities from continuing operations was $1,261,884 compared to $1,824,884 for
the nine months ended September 30, 2004. The net loss for the nine months ended
September 30, 2005 increased to $8,086,400 from $5,174,012 compared to the nine
months ended September 30, 2004. The increase in net loss was primarily
attributable to increases in interest expense of approximately $1,684,000 of
which approximately $1,532,000 was related to the increase in the current period
of the beneficial conversion feature and warrants on convertible promissory
notes payable. Adjustments to the current period's results included non-cash
expenses of $5,090,687, significantly comprised of $1,596,111 related to an
impairment charge on the iGames Entertainment, Inc. ("iGames") note receivable,
$1,792,423 of expense incurred due to the amortization of the discounts recorded
in connection with the beneficial conversion features and warrants to the
convertible Notes and the Whitebox Notes described above, depreciation and
amortization of $1,143,631, a loss on disposal of assets of $295,934 related to
the Company terminating its international activity and a provision for losses on
receivables of $216,171.

Net cash used in investing activities from continuing operations for the nine
months ended September 30, 2005 was $2,795,255 compared to $2,322,425 for the
nine months ended September 30, 2004. Net cash used in 2005 investing activities
was primarily attributable to an advance of $3 million to HPI and purchases of
furniture, fixtures and equipment of $596,568. The Company also received
$813,064 on notes receivable. Net cash used in 2004 investing activities was
primarily attributable to purchases of furniture, fixtures and equipment of
$318,660 and net advances of $2,041,773 on notes receivable, of which $2 million
was issued to iGames.

Net cash provided by financing activities from continuing operations for the
nine months ended September 30, 2005 was $4,200,777 compared to the nine months
ended September 30, 2004 of $2,513,284. The significant activity for the nine
months ended September 30, 2005 included the receipt of $1,998,996 from the sale
of common stock in a private placement, $4,078,000 from the issuances of notes
payable, and $906,644 and $243,833 from the exercise of warrants and upon the
sale of 82,308 shares of treasury stock by Chex, respectively. In addition, the
Company repaid $2,857,696 of notes payable and incurred fees of $169,000 related
to the issuances of notes payable. The significant activity for the nine months
ended September 30, 2004, included the Company receiving proceeds of $7,722,210
upon the issuance of notes payable, receiving $519,429 upon the sale of 88,917
shares of treasury stock by Chex and proceeds received of $229,178 upon the
exercise of options and warrants. These proceeds were used for the repayment of
notes payable and a bank overdraft of $3,211,142 and $2,497,766, respectively,
payment of fees of $335,000 related to the issuance of notes payable and
purchase of the Equitex shares for treasury by Chex for $113,625.

                                                                              32
<PAGE>

Net cash used in discontinued operations was $4,846 for the nine months ended
September 30, 2005 compared to $37,874 for the nine months ended September 30,
2004. The decrease in cash used in discontinued operations is the result of Key
ceasing its run-off operations during the fourth quarter of 2003.

For the nine months ended September 30, 2005, net cash increased by $138,792
compared to a decrease of $1,671,899 for the nine months ended September 30,
2004. Ending cash at September 30, 2005, was $8,528,478 compared to $6,387,881
at September 30, 2004. Significantly all of the Chex's cash is required to be
utilized for its casino operations, and consequently Equitex needs to rely on
other sources for its liquidity needs.

RESULTS OF OPERATIONS

REVENUES

Consolidated revenues from continuing operations for the three and nine months
ended September 30, 2005, were $5,021,371 and $14,126,498 compared to
consolidated revenues of $4,371,927 and $11,438,468 for the three and nine
months ended September 30, 2004. The increase in the three and nine month
periods was primarily due to revenues from new casino locations of approximately
$1,029,000 and $2,496,000 for the three and nine months ended September 30, 2005
that were opened in the third and fourth quarters of 2004, and accordingly, the
Company had no revenues from these properties for the three and nine months
ended September 30, 2004. Additional increases in revenues of approximately
$300,000 and $1,212,000 for the three and nine months ended September 30, 2005,
respectively, were the result of additional placement of product and the new
proprietary cash advance platforms used to process cash advance transactions.
This software was installed beginning in July 2004.

FEE REVENUE

Chex recognizes revenue at the time certain financial services are performed.
Revenues are derived from check cashing fees, credit and debit card advance
fees, automated teller machine ("ATM") surcharge and transaction fees, and NSF
collection fees. Chex revenues for the three months ended September 30, 2005 and
2004 were comprised of the following:

<TABLE>
<CAPTION>
                                    2005                                   2004
                   ---------------------------------------   ---------------------------------------
                     Number of      Dollars       Earned       Number of      Dollars      Earned
                   Transactions     Handled      Revenues     Transactions    Handled     Revenues
                   ------------  ------------  -----------   ------------  ------------  -----------
<S>                  <C>         <C>           <C>            <C>          <C>           <C>
Personal checks         166,933  $ 32,259,324  $ 1,579,771        186,684  $ 34,335,735  $ 1,740,105
"Other" checks           84,718    26,173,638      229,768         70,087    21,964,999      202,719
Credit cards             70,750    26,145,714    1,627,439         58,344    21,003,897    1,069,665
Debit cards              11,942     3,790,340      104,887          8,812     2,643,372       43,055
ATM transactions        720,438    68,038,426    1,323,288        596,107    56,284,719    1,135,113
NSF collection
 fees                                               83,403                                   103,641
Other                                               31,820                                    14,386
                   ------------  ------------  -----------   ------------  ------------  -----------
                      1,054,781  $156,407,442  $ 4,980,376        920,034  $136,232,722  $ 4,308,684
                   ============  ============  ===========   ============  ============  ===========
</TABLE>

                                                                              33
<PAGE>

Chex revenues for the nine months ended September 30, 2005 and 2004 were
comprised as follows:

<TABLE>
<CAPTION>
                                    2005                                   2004
                   ---------------------------------------   ---------------------------------------
                     Number of      Dollars       Earned       Number of      Dollars      Earned
                   Transactions     Handled      Revenues     Transactions    Handled     Revenues
                   ------------  ------------  -----------   ------------  ------------  -----------
<S>                  <C>         <C>           <C>            <C>          <C>           <C>
Personal checks         512,854  $ 98,531,382  $ 4,850,552        509,790   $94,105,653  $ 4,835,509
"Other" checks          210,851    70,315,413      706,550        195,528    65,425,654      631,955
Credit cards            187,171    67,538,081    4,059,690        166,424    57,751,186    2,488,018
Debit cards              35,115    10,875,955      283,821         26,598     8,159,289      117,754
ATM transactions      1,991,761   182,036,559    3,698,890      1,458,393   126,422,619    2,742,180
NSF collection fees                                269,235                                   323,183
Other                                               98,187                                    91,448
                   ------------  ------------  -----------   ------------  ------------  -----------
                      2,937,752  $429,297,390  $13,966,925      2,356,733  $351,864,401  $11,230,047
                   ============  ============  ===========   ============  ============  ===========
</TABLE>

Chex cashes personal checks at its cash access locations for fees based upon a
percentage of the face amount of the check cashed per each casino contract. Chex
also cashes "other" checks, comprised of tax and insurance refunds, casino
employee payroll checks and casino jackpot winnings.

Chex credit/debit card cash advance services allow patrons to use their VISA,
MasterCard, Discover and American Express cards to obtain cash. In July 2004,
Chex began using its own proprietary credit and debit cash advance platform to
process cash advance transactions. Accordingly, for the three and nine months
ended September 30, 2005, Chex recorded additional revenues of approximately
$310,000 and $1,056,000 compared to the three and nine months ended September
30, 2004 due to the new software. During the three and nine months ended
September 30, 2004, third party vendors, at their expense, supplied, installed
and maintained the equipment to operate the cash advance system. Under vendor
agreements, the vendor charges each customer a services fee based upon the cash
advance amount and paid a portion of such service fee to Chex.

ATM surcharge and transaction fees are comprised of upfront patron transaction
fees or surcharges assessed at the time the transaction is initiated and a
percentage of interchange fees paid by the patron's issuing bank. These issuing
banks share the interchange revenue with the Company. Upfront patron transaction
fees are recognized when a transaction is initiated, and interchange revenue is
recognized on a monthly basis based on the total transactions occurring during
the month.

Chex utilizes its own in-house collections department to pursue collection of
returned checks, and generally charges an insufficient-funds fee when it
ultimately collects the check.

CREDIT CARD INCOME

Credit card income was $40,995 and $159,573 for the three and nine months ended
September 30, 2005 compared to $63,243 and $208,421 for the three and nine
months ended September 30, 2004. The decrease was due to the attrition of
customers.

OPERATING EXPENSES

Total operating expenses for the three and nine months ended September 30, 2005,
was $6,512,979 and $19,118,294 compared to $5,057,958 and $14,248,492 for the
three and nine months ended September 30, 2004.

                                                                              34
<PAGE>

LOCATION EXPENSES

Chex location expenses were $3,643,217 and $3,244,970 for the three months
ending September 30, 2005 and 2004, respectively and $10,308,587 and $8,223,569
for the nine months ended September 30, 2005 and 2004, respectively. The
location expenses are comprised as follows:

<TABLE>
<CAPTION>
                                         Three months ended              Six months ended
                                               June 30,                      June 30,
                                         2005           2004            2005          2004
                                     -----------    -----------     -----------    -----------
<S>                                  <C>            <C>             <C>            <C>
 Fees to casinos                     $ 1,770,161    $ 1,514,970     $ 4,855,390    $ 3,890,170
 Salaries and related costs              780,873        827,323       2,361,750      2,324,903
 Returned checks, net of collections      84,708        214,587         417,880        479,832
 Processing fees                         634,590        288,797       1,542,162        486,681
 Selling, general and administrative     334,590        364,243       1,013,300        940,350
 Depreciation and amortization            38,295         35,050         118,105        101,633
                                     -----------    -----------     -----------    -----------
                                     $ 3,643,217    $ 3,244,970     $10,308,587    $ 8,223,569
                                     ===========    ===========     ===========    ===========
</TABLE>

Fees to casinos are comprised of compensation paid to the casino pursuant to the
terms of each financial services agreement that the Company has entered into
with the respective establishment. At locations where Chex provides
check-cashing services, Chex pays the location operator a commission based upon
the monthly dollar amount of checks cashed or a fixed percentage of the net
income from operations at that location. Chex passes on an agreed upon
percentage of the surcharge commissions to the locations where ATM's are
utilized. At the locations at which Chex uses third party vendors to provide
credit/debit card advance services, it pays the operator a commission for each
completed transaction. For the locations where Chex's proprietary product is
used, Chex pays a fee to the casino based on the fees it receives from
processing the transaction. For these transactions, Chex also has a cost of
processing the transaction. Chex began installing their proprietary product in
July 2004 and accordingly, there was a significant increase in processing costs
for the three and nine months ended September 30, 2005 compared to September 30,
2004.

Returned checks, net of collections expense decreased by $61,952 to $417,880 for
the nine months ended September 30, 2005 and for the three months ended
September 30, 2005, returned checks decreased by $129,879 to $84,708. The
primary reason for the decrease was the result of the Company collecting a
higher amount of checks that were originally returned for non-sufficient funds.


Chex generally records a returned check expense for potential losses in the
period such checks are returned.

Selling, general and administrative expenses for locations include bank charges,
depreciation, communications, insurance licensing, collections, and travel and
entertainment. For the three and nine months ended September 30, 2005 and 2004,
these expenses were comparable.

                                                                              35
<PAGE>

LOCATION SUPPORT EXPENSES

Location support expenses for the three months ended September 30, 2005 and 2004
were $1,909,275 and $1,477,517, respectively, and $4,823,830 and $4,382,605 for
the nine months ended September 30, 2005 and 2004. The expenses were comprised
of the following:

<TABLE>
<CAPTION>
                                            Three months ended              Six months ended
                                                 June 30,                       June 30,
                                           2005            2004           2005           2004
                                        -----------    -----------     -----------    -----------
<S>                                     <C>            <C>             <C>            <C>
     Salaries and benefits              $   403,517    $   564,223     $ 1,478,318    $ 1,540,376
     Accounting, legal and consulting       195,793        190,981         652,902        451,871
     Stock based compensation                 9,500                          9,500        252,000
     Travel and entertainment                74,384        107,368         276,664        229,656
     Advertising                             47,323         17,746         136,981        110,419
     Allocated expenses from Equitex (1)                                                   91,000
     Depreciation and amortization          327,893        310,296       1,015,819        820,855
     Provision (recovery) of losses                         82,000         (89,159)       226,000
     Other                                  850,865        204,903       1,342,805        660,428
                                        -----------    -----------     -----------    -----------
                                        $ 1,909,275    $ 1,477,517     $ 4,823,830    $ 4,382,605
                                        ===========    ===========     ===========    ===========
</TABLE>

(1)  Prior to July 1, 2004, Equitex was incurring certain general and
     administrative expenses on behalf of Chex that were allocated by Equitex to
     Chex. Beginning July 1, 2004, Chex and FastFunds began incurring these
     expenses on their own behalf, and accordingly, there is no longer an
     allocation from Equitex. The expense eliminates in the consolidation of
     FFFC and Equitex, and accordingly, Equitex has reduced their selling,
     general and administrative expense by $91,000 for the nine months ended
     September 30, 2004.

Corporate operating expenses include Chex's Minneapolis administrative office,
which supports the 55 operating locations and also includes for the nine months
ended September 30, 2005, those expenses associated with FFI's London and
Chicago offices. As of June 30, 2005, the London and Chicago offices have been
closed and the Company will incur no further expenses related to these
locations.

Salaries and related costs decreased for the three and nine months ended
September 30, 2005 compared to the three and nine months ended September 30,
2004 period primarily as a result of the elimination of the corporate staffing
of FFI's London office.

Accounting, legal and consulting expenses increased for the three and nine
months ended September 30, 2005 compared to the three and nine months ended
September 30, 2004. The increase for the nine months ended September 30, 2005
was primarily as a result of an increase in consulting fees of approximately
$186,000. FFI hired marketing and sales consultants to assist the Company in
entering the stored-value card international market in the gaming and retail
industries. As a result of no revenues being generated to offset these operating
costs in June 2005, the Company terminated certain sales and marketing
consulting and advisory agreements that previously required the Company to pay
approximately $36,000 per month. In addition, FFFC has entered into various
consulting agreements with a financial advisor and individuals who provide
various consulting services to the Company. These continuing agreements require
the Company to pay approximately $15,000 per month.

The stock based compensation expense of $9,500 for the three and nine months
ended September 30, 2005 was a result of FFFC issuing 20,000 options to purchase
FFFC common stock at $1.10 per share to an officer of FFFC for services. The
stock-based compensation expense of $252,000 for the nine months ended September
30, 2004 was a result of Equitex distributing to Chex employees 280,000 of the
800,000 warrants to purchase FFFC common stock at $0.10 per share it received in
the Merger. The warrants were determined to have a fair value of $1.00 on the
distribution date.

                                                                              36
<PAGE>

Travel and entertainment expense decreased for the three months ended September
30, 2005 compared to September 30, 2004 primarily as a result of the elimination
of travel associated with the closure of the Company's London and Chicago
offices. Travel and entertainment increased for the nine months ended September
30, 2005 compared to the nine months ended September 30, 2004 primarily as a
result of the increased costs of travel associated with employees of FastFunds,
FFI and consultants during the first six months of 2005.

Prior to July 1, 2004 Equitex was incurring certain general and administrative
expenses on behalf of Chex that were allocated by Equitex to Chex. Beginning
July 1, 2004, Chex and FastFunds began incurring these expenses on their own
behalf, and accordingly, there is no longer an allocation from Equitex.

Depreciation and amortization increased for the three and nine months ended
September 30, 2005 compared to the three and nine months ended September 30,
2004 primarily as a result of increased depreciation as a result of additional
fixed assets, as well as the amortization of deferred loan costs.


The valuation allowance on the note receivable from the estate of a deceased
officer was decreased by $90,000 for the nine months ended September 30, 2005
compared to an increase of $82,000 and $226,000 for the three and nine months
ended September 30, 2004. Shares of Equitex common stock collateralized the note
and the allowance was adjusted accordingly based on the value of the underlying
collateral. This note was repaid during the nine months ended September 30,
2005.

Other costs included in corporate operating expenses increased for the three and
nine months ended September 30, 2005 compared to the three and nine months ended
September 30, 2004. The increase for the three and nine months ended September
30, 2005 was caused by the loss on disposal of approximately $296,000 of
hardware and software assets. Additional expenses were incurred related to a
contract buyout of approximately $220,000 and director's compensation of
$125,000. Additional increases for the nine months ended September 30, 2005 were
related costs of $108,000 incurred in connection with the closure of the
Company's London and Chicago offices and directors and officers insurance of
approximately $80,000.

CORPORATE SELLING, GENERAL AND ADMINISTRATIVE

Corporate expenses include those of Equitex, Denaris and Nova. Total corporate
activity expenses for the three and nine months ended September 30, 2005 and
2004 were comprised as follows:

<TABLE>
<CAPTION>
                                          Three months ended              Nine months ended
                                             September 30,                  September 30,
                                         2005            2004           2005           2004
                                      -----------    -----------     -----------    -----------
<S>                                   <C>            <C>             <C>            <C>
     Employee costs                   $   739,881    $   112,288     $ 1,048,154    $   335,886
     Accounting and legal                 141,171         74,106         661,638        270,676
     Impairment of notes receivable                                    1,901,911
     Stock based compensation                                                           374,750
     Other                                 79,435        149,077         374,174        661,006
                                      -----------    -----------     -----------    -----------
                                      $   960,487    $   335,471     $ 3,985,877    $ 1,642,318
                                      ===========    ===========     ===========    ===========
</TABLE>

                                                                              37
<PAGE>

Employee costs for the three and nine months ended September 30, 2005 increased
by $627,593 and $712,268 from the three and nine months ended September 30,
2004. The 2005 periods include $610,570 and $696,073 of officer's bonus, which
were not incurred in 2004. Accounting and legal expenses increased by $67,065
and $390,962 for the three and nine months ended September 30, 2005 compared to
September 30, 2004. The increase was primarily attributable to legal expenses
associated with the lawsuit against iGames, as well as defending claims made
against the Company by iGames. The lawsuits have been settled and the Company
anticipates no further expenses associated with the settlement.

During the three and nine months ended September 30, 2005, the Company recorded
an impairment on the iGames note receivable of $1,596,111 and increased the
valuation allowance related to notes receivable from Equitex 2000, Inc. by
$305,000.

Other expenses for the three and nine months ended September 30, 2005 and 2004
include the general operating costs of Equitex, Denaris and Nova. For the three
and nine months ended September 30, 2005, Nova general operating expenses
decreased compared to the three months ended September 30, 2004. The majority of
the decrease in other expenses for the three and nine months ended September 30,
2005 relate to $212,834 of costs associated with various merger and acquisition
costs incurred in 2004.

OTHER INCOME (EXPENSE):

Consolidated other expenses for the three and nine months ended September 30,
2005 was $901,307 and $3,063,687 compared to $546,671 and $1,195,140 for the
three and nine months ended September 30, 2004. Interest expense increased by
$313,602 and $1,684,213 for the three and nine months ended September 30, 2005
compared to September 30, 2004. The increase was primarily attributable to the
increase in non-cash interest expense of approximately $436,000 and $1,592,000,
respectively, recorded due to the amortization of the beneficial conversion
features on convertible promissory notes and warrants. Interest income decreased
by $41,034 and $184,334 for the three and nine months ended September 30, 2005
compared to September 30, 2004. The most significant portion of the decrease was
$50,000 and $96,111 of interest income recorded on the iGames $2.0 million note
in the three and nine months ended September 30, 2004, for which the Company
stopped accruing interest in June 2004.

DISCONTINUED OPERATIONS

Discontinued operations represent the operations of Key, which ceased during the
fourth quarter of 2003. The loss from discontinued operations was $1,549 and
$6,917 for the three and nine months ended September 30, 2005, compared to
$2,468 and $8,197 for the three and nine months ended September 30, 2004,
respectively.

INCOME TAX EXPENSE

During the quarter ended September 30, 2004, management assessed the realization
of its deferred tax assets. Based on this assessment, it was determined to be
more likely than not that the Company's deferred tax assets would not be
realizable and determined that a valuation allowance was required. Accordingly,
the Company's valuation allowance was increased by $1,380,000 to fully reserve
for its net deferred tax assets, which resulted in an increase to the provision
for income taxes of the same amount. State income taxes of $8,000 were accrued
for the three months ended September 3, 2005 and $24,000 and $6,000,
respectively, were accrued for the nine months ended September 30, 2005 and
2004.

                                                                              38
<PAGE>

CONTRACTUAL OBLIGATIONS

In September 2005, the Company closed on $1,500,000 of convertible promissory
notes (the "Notes") with two financial lenders (the "Lenders"). The Notes carry
a stated interest rate of 10% per annum and have a 24-month term. Interest only
payments are due October 2005 through December 2005. Beginning in January 2006
principal and interest payments will amortize over the remaining 21-month
period. The Company borrowed $5 million from the same Lenders in March 2004.

In September 2005, the Company issued $454,000 and $200,000 of promissory notes
to a related party and third parties, respectively. The third party promissory
notes carry a stated interest rate of 6% per annum and have a 120-day term. The
related party promissory notes were originally 90-day notes issued by the
Company with stated interest rates of 22% to 24% per annum. The Company issued a
promissory note that assigned these notes to a corporation that is owned by a
director of the Company. The assigned note is due in December 2005 and has a
stated interest rate of 10%.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In December 2004, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 123(R), SHARE-BASED PAYMENT, which addresses the accounting for share-based
compensation transactions. SFAS No. 123(R) eliminates the ability to account for
share-based compensation transactions using APB 25, and generally requires
instead that such transactions be accounted and recognized in the statement of
operations based on their fair value. SFAS No. 123(R) will be effective for the
Company beginning with the first quarter of 2006. Management is currently
evaluating the provisions of this standard. Depending on the number and terms of
options that may be granted in future periods, the implementation of this
standard could have a material impact on the Company's financial position and
results of operations.

                                                                              39
<PAGE>

ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES OF MARKET RISK

Market risk is the potential loss arising from adverse changes in market rates
and prices, such as interest rates and a decline in the stock market. The
Company does not enter into derivatives or other financial instruments for
trading or speculative purposes. The Company has limited exposure to market risk
related to changes in interest rates. The Company does not currently invest in
equity instruments of public or private companies for business or strategic
purposes.

The principal risks of loss arising from adverse changes in market rates and
prices to which the Company and its subsidiaries are exposed relate to interest
rates on debt. The Company has both fixed and variable rate debt, as follows:

<TABLE>
<CAPTION>
                                         September 30,    December 31,
        Contractual obligation               2005             2004          Interest rate
     ----------------------------       --------------   --------------    ---------------
<S>                                     <C>              <C>               <C>
     Notes payable (1)                  $   11,156,497   $   11,402,602    Fixed 9% - 15%

     Convertible promissory notes            3,352,713        4,358,279       Fixed 7%

     Convertible promissory notes (2)        4,162,408        1,974,064    Fixed 5% - 10%

     Operating lease obligations                99,414          169,787    Fixed 6.5% - 7%
                                        --------------   --------------
                                        $   18,771,032   $   17,904,732
                                        ==============   ==============
</TABLE>

(1)  Notes are unsecured, mature on various dates through December 2005, and are
     renewable subject to payment with 90 day notice from note holder.
(2)  Includes $360,000 assigned to a corporation that is owned by a director of
     the Company.  The original notes bear interest at rates ranging from 22%
     to 24% per annum.

Amounts above exclude discounts recorded on the face value of the related debt.
As most of the Company's average outstanding indebtedness is renewed annually
and carries a fixed rate of interest, a change in interest rates is not expected
to have a material impact on the consolidated financial position, results of
operations or cash flows of the Company during the year ending December 31,
2005.

                                                                              40
<PAGE>

ITEM 4.     DISCLOSURE CONTROLS AND PROCEDURES

A review and evaluation was performed by the Company's management, including the
Company's Chief Executive Officer (the "CEO")/Chief Financial Officer (the
"CFO"), of the effectiveness of the design and operation of the Company's
disclosure controls and procedures as of the end of the period covered by this
quarterly report. Based on that review and evaluation, the CEO/CFO has concluded
that the Company's current disclosure controls and procedures, as designed and
implemented, were effective. There have been no significant changes in the
Company's internal controls or in other factors that could significantly affect
the Company's internal controls subsequent to the date of the evaluation. There
were no material weaknesses identified in the course of such review and
evaluation and, therefore, no corrective measures were taken by the Company.

PART II.        OTHER INFORMATION

ITEM 1.         LEGAL PROCEEDINGS

Effective July 21, 2005, the Company, FastFunds Financial Corporation ("FFFC"),
Chex Services, Inc. ("Chex"), and iGames Entertainment, Inc. ("iGames") entered
into a Settlement Agreement and Mutual Release (the "Settlement Agreement"),
pursuant to which the parties agreed to resolve all pending litigation between
them and release all claims from litigation. No party to the Settlement
Agreement admitted any wrongdoing or liability related to the litigation. The
litigation was dismissed with prejudice by the United States District Court for
the District of Delaware on July 22, 2005.

Under the terms of the Settlement Agreement, Chex received $500,000 in September
2005. Additionally, FFFC received a contingent warrant to purchase up to 500,000
shares of common stock of iGames at $0.50 per share. The warrant is not
exercisable until iGames has achieved $1,000,000 in net income during any given
fiscal year.

ITEM 2.         CHANGES IN SECURITIES

         On September 2, 2005, the Company converted $25,000 in legal fees into
5,000 shares of the Company's $0.01 par value common stock at a conversion price
of $5.00 per share, the market price of the common stock at the date of
conversion.

         On September 28, 2005, the Company converted $95,153 in debts payable
by the Company's subsidiary, FastFunds Financial Corporation, into 15,152 shares
of the Company's $0.01 par value common stock at a conversion price of $6.30 per
share.

         During the quarter ended September 30, 2005, pursuant to a private
placement offering to five unaffiliated accredited investors, Equitex, Inc. (the
"Company") accepted subscriptions for 123,166 Units of its securities, each Unit
consisting of two shares of the Company's $0.01 par value common stock and one
three-year warrant to purchase a share of Common Stock at an exercise price of
$5.50 per share. The purchase price per Unit was $6.00, and resulted in
aggregate proceeds to the Company of $738,996, from which the Company may pay
customary fees and expenses, including fees to brokers and consultants.

         The Company offered and sold the common stock indicated above in
reliance on an exemption from registration for offers and sales of securities
that do not involve a public offering (i.e., Section 4(2) of the Securities Act
of 1933, as amended). The shares of common stock issued as described above were
not registered under the Securities Act of 1933, as amended, and may not be
offered or sold in the United States absent registration or an applicable
exemption from registration requirements.

                                                                              41

<PAGE>

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None.

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

None.

ITEM 5.  OTHER INFORMATION

None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

         10.1  Note Assignment agreement between Equitex, Inc. and Transporta
               LLC dated September 22, 2005.

         10.2  Second Amendment to Agreement and Plan of Merger and
               Reorganization by and among Equitex, Inc., EI Acquisition Corp.
               and Hydrogen Power, Inc. dated November 11, 2005.

         31    Certification pursuant to Section 302 of the Sarbanes-Oxley Act
               of 2002

         32    Certification pursuant to Section 906 of the Sarbanes-Oxley Act
               of 2002

(b)      Reports on Form 8-K during the quarter ended September 30, 2005

     On July 7, 2005, the Company filed a Current Report on Form 8-K reporting
Unregistered Sales of Equity Securities under Item 3.02.

     On July 12, 2005, the Company filed a Current Report on Form 8-K reporting
its Entry into a Material Definitive Agreement under Item 1.01.

     On July 27, 2005, the Company filed a Current Report on Form 8-K reporting
its Entry into a Material Definitive Agreement under Item 1.01.

     On July 28, 2005, the Company filed a Current Report on Form 8-K reporting
a Material Modification to Rights of Security Holders under Item 3.03 and an
Amendment to Articles of Incorporation or Bylaws under Item 5.03.

     On August 31, 2005, the Company filed a Current Report on Form 8-K
reporting Unregistered Sales of Equity Securities under Item 3.02.

     On September 19, 2005, the Company filed a Current Report on Form 8-K
reporting its Entry into a Material Definitive Agreement under Item 1.01 and
Unregistered Sales of Equity Securities under Item 3.02.

     On November 4, 2005, the Company filed a Current Report on Form 8-K
reporting its Entry into a Material Definitive Agreement under Item 1.01.

                                                                              42
<PAGE>


                                   SIGNATURES

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.

                                       Equitex, Inc.
                                       (Registrant)

Date: November 21, 2005            By: /s/ Henry Fong
                                       -------------------------------------
                                       Henry Fong
                                       President, Treasurer and
                                       Chief Financial Officer



                                                                              43