UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D.C. 20549





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





FORM
      10-QSB/A


Amendment
      No. 1





(MARK
      ONE)





x
            QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE
                ACT OF 1934 For the quarterly period ended June 30,
                2005




OR





o
            TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE
                ACT OF 1934 For the transition period from ___________
                to___________









0-17874


(Commission
      file number)





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





GLOBAL
      AXCESS CORP


(Name
      of
      Small Business Issuer in Its Charter)





NEVADA
            
            88-0199674(State
                or other jurisdiction of
              incorporation
                or organization)
            
            (I.R.S.
                Employer
              Identification
                No.)224
                PONTE VEDRA PARK DRIVE
              PONTE
                VEDRA BEACH, FLORIDA
            
            32082(Address
                of principal executive offices)
            
            (Zip
                Code)




(904)280-3950


(Issuer's
      Telephone Number, Including Area Code)





Securities
      registered pursuant to Section 12(b) of the Act: None


Securities
      registered pursuant to Section 12(g) of the Act: Common Stock





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





Check
      whether the Issuer: (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
      9 months (or for such shorter period that the Issuer was required to file
      such
      reports), and (2) has been subject to such filing requirements for the past
      90
      days. Yes x No
o





Check
      if
      there is no disclosure of delinquent filers pursuant to Item 405 of
      Regulation S-B is not contained herein, and will not be contained, to the best
      of
      the Issuer's knowledge, in definitive proxy or information
      statements


incorporated
      by reference in Part II of this Form 10-QSB. x


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


As
      of May
      23, 2006, the Issuer had 21,011,786 shares outstanding of the Common Stock
      ($0.001 par value) and no shares outstanding of the Preferred Stock


($0.001
      par value).








EXPLANATORY
      NOTE-Amendment to Previously Reported Quarterly Financial
      Statements





The
      purpose of this amendment of Form 10-QSB is to amend and restate the Company’s
      consolidated financial statements and related disclosures for the three and
      six
      months ended June 30, 2005 from those previously filed with the Securities
      and
      Exchange Commission (the “SEC”) on August 10, 2005.





On
      March
      30, 2006, the Company determined that the statements of operations and cash
      flows for the quarter ended June 30, 2005 contained errors, which when corrected
      would result in a material impact on the Company’s results of operations for the
      quarter then ended. The Company’s Audit Committee and senior management have
      therefore determined that the consolidated financial statements for the three
      and six months ended June 30, 2005 require amendment. The errors, which are
      more
      fully described in Note 3 to the consolidated financial statements contained
      herein, relate to the Company’s accounting for revenue under certain of our
      processing contracts; capitalization of purchased software costs; and
      depreciation of certain assets that were not in service during the three and
      six
      months ended June 30, 2005.





Generally,
      no attempt has been made in the Form 10-QSB to modify or update other
      disclosures presented in the original report on Form-10QSB except as required
      to
      reflect the effects of the restatement. Additionally, this Form 10-QSB generally
      does not reflect events occurring after the filing of the Form 10-QSB or modify
      or update those disclosures, including the exhibits to the Form 10-QSB, affected
      by subsequent events. Information not affected by the restatement is unchanged
      and reflects the disclosures made at the time of the original filing of the
      Form
      10-QSB on August 10, 2005. Accordingly, this Form 10-QSB should be read in
      conjunction with the Company’s filings made with the SEC subsequent to the
      filing of the original Form 10-QSB including any amendment to those filings.
      The
      following items have been amended as a result of the restatement:





Part
      I-Item 1. Financial Statements


Part
      I-Item 2. Management’s Discussion and Analysis of Financial Condition and
      Results of Operations


Part
      I-Item 3. Controls and Procedures


Part
      II-Item 6. Exhibits








TABLE
      OF
      CONTENTS Page No.





PART
      I
      FINANCIAL INFORMATION





Item
                  1. Financial Statements (unaudited )
              3Item
                  2. Management's Discussion and Analysis or Plan of Operation
              11Item
                  3. Controls and Procedures
              20PART
                  II OTHER INFORMATIONItem
                  1. Legal Proceedings
              21Item
                  2. Changes in Securities.
              21Item
                  3. Defaults Upon Senior Securities.
              21Item
                  4. Submission of Matters to a Vote of Security Holders.
              21Item
                  5. Other Information.
              21Item
                  6. Exhibits.
              23SIGNATURES
              26







Forward-Looking
        Statements
 
 In
        addition to historical information, this Quarterly Report on Form 10-QSB
        contains forward-looking statements that involve risks and uncertainties
        that
        could cause actual results to differ materially. Factors that might cause
        or
        contribute to such differences include, but are not limited to, those discussed
        in the section entitled "Management's Discussion and Analysis or Plan of
        Operation." You should carefully review the risks described in other documents
        we file from time to time with the Securities and Exchange Commission, including
        the Quarterly Reports on Form 10-QSB that have been or are to be filed in
        2005.
        When used in this report, the words "expects," "anticipates," "intends,"
        "plans," "believes," "seeks," "targets," "estimates," and similar expressions
        are generally intended to identify forward-looking statements. You should
        not
        place undue reliance on the forward-looking statements, which speak only
        as of
        the date of this Quarterly Report on Form 10-QSB. We undertake no obligation
        to
        publicly release any revisions to the forward-looking statements or reflect
        events or circumstances after the date of this document.
 
 Estimates
        of future financial results are inherently unreliable.
 
 From
        time
        to time, representatives of Global Axcess Corp (the Company) may make public
        predictions or forecasts regarding the Company's future results, including
        estimates regarding future revenues, expense levels, earnings or earnings
        from
        operations. Any forecast regarding the Company's future performance reflects
        various assumptions. These assumptions are subject to significant uncertainties,
        and, as a matter of course, many of them will prove to be incorrect. Further,
        the achievement of any forecast depends on numerous factors (including those
        described in this discussion), many of which are beyond the Company's control.
        As a result, there can be no assurance that the Company's performance will
        be
        consistent with any management forecasts or that the variation from such
        forecasts will not be material and adverse. Investors are cautioned not to
        base
        their entire analysis of the Company's business and prospects upon isolated
        predictions, but instead are encouraged to utilize the entire available mix
        of
        historical and forward-looking information made available by the Company,
        and
        other information affecting the Company and its products, when evaluating
        the
        Company's prospective results of operations.
  In
        addition, representatives of the Company may occasionally comment publicly
        on
        the perceived reasonableness of published reports by independent analysts
        regarding the Company's projected future performance. Such comments should
        not
        be interpreted as an endorsement or adoption of any given estimate or range
        of
        estimates or the assumptions and methodologies upon which such estimates
        are
        based. Undue reliance should not be placed on any comments regarding the
        conformity, or lack thereof, of any independent estimates with the Company's
        own
        present expectations regarding its future results of operations. The
        methodologies employed by the Company in arriving at its own internal
        projections and the approaches taken by independent analysts in making their
        estimates are likely different in many significant respects. Although the
        Company may presently perceive a given estimate to be reasonable, changes
        in the
        Company's business, market conditions or the general economic climate may
        have
        varying effects on the results obtained through the use of differing analyses
        and assumptions. The Company expressly disclaims any continuing responsibility
        to advise analysts or the public markets of its view regarding the current
        accuracy of the published estimates of outside analysts. Persons relying
        on such
        estimates should pursue their own independent investigation and analysis
        of
        their accuracy and the reasonableness of the assumptions on which they are
        based.
  2
  
 PART
        I -
        FINANCIAL INFORMATION
 
 Item
        1.
        Financial Statements
 
 GLOBAL
        AXCESS CORP AND SUBSIDIARIES
 CONDENSED
        CONSOLIDATED BALANCE SHEET
 June
        30,
        2005
 (Unaudited)
  ASSETSCurrent
                    assetsCash
                
                $
                418,693Automated
                    teller machine vault cash
                
                
                989,306Accounts
                    receivable, net
                
                
                1,346,909Note
                    receivable
                
                
                99,895Inventory
                
                
                132,315Deferred
                    tax asset - current
                
                
                216,017Prepaid
                    expense & other current assets
                
                
                512,794Total
                    current assets
                
                
                3,715,929Fixed
                    assets, net
                
                
                6,803,472Other
                    assetsMerchant
                    contracts
                
                
                8,401,347Intangible
                    assets, net
                
                
                4,089,784Deferred
                    tax asset - long term
                
                
                322,279Other
                    assetsTotal
                    assets
                
                $
                23,332,811LIABILITIES
                    AND STOCKHOLDERS' EQUITYCurrent
                    liabilitiesAccounts
                    payable and accrued liabilities
                
                $
                2,128,651Automated
                    teller machine vault cash payable
                
                
                989,306Note
                    payable-related parties - current portion
                
                
                15,576Notes
                    payable - current portion
                
                
                80,615Bank
                    loan - current portion
                
                
                975,000Capital
                    lease obligations - current portion
                
                
                620,686Total
                    current liabilities
                
                
                4,809,834Long-term
                    liabilitiesNotes
                    payable-related parties - long-term portion
                
                
                2,368,831Notes
                    payable - long-term portion
                
                
                114,373Bank
                    loan - long-term portion
                
                
                556,250Capital
                    lease obligations - long-term portion
                
                
                1,452,468Total
                    liabilities
                
                
                9,301,756Stockholders'
                    equityPreferred
                    stock $0.001 par value; 5,000,000 sharesauthorized,
                    no shares issued and outstanding
                
                
                -Common
                    stock $0.001 par value; 45,000,000 sharesauthorized,
                    18,211,986 shares issued and outstanding
                
                
                18,212Additional
                    paid-in capital
                
                
                18,949,634Accumulated
                    deficit
                
                
                (4,936,791
                )Total
                    stockholders' equity
                
                
                14,031,055Total
                    liabilities and stockholders' equity
                
                $
                23,332,811
 See
        Accompanying Notes to Condensed Consolidated Financial Statements
 
  3
  
 GLOBAL
        AXCESS CORP AND SUBSIDIARIES
 CONDENSED
        CONSOLIDATED STATEMENTS OF OPERATIONS
 (Unaudited)
  Three
                    Months ended June 30,
                
                Six
                    Months ended June 30,2005
                
                2004
                
                2005
                
                2004Revenues
                
                $
                5,012,142
                
                $
                3,112,230
                
                $
                9,729,978
                
                $
                5,912,711Cost
                    of revenues
                
                
                3,024,084
                
                
                1,727,311
                
                
                5,728,523
                
                
                3,304,979Gross
                    profit
                
                
                1,988,058
                
                
                1,384,919
                
                
                4,001,455
                
                
                2,607,732Operating
                    expenses:Depreciation
                    and amortization
                
                
                328,033
                
                
                312,732
                
                
                647,500
                
                
                613,063General
                    and administrative
                
                
                1,550,805
                
                
                912,095
                
                
                2,944,276
                
                
                1,723,267Total
                    operating expenses
                
                
                1,878,838
                
                
                1,224,827
                
                
                3,591,776
                
                
                2,336,330Income
                    from operations
                
                
                109,220
                
                
                160,092
                
                
                409,679
                
                
                271,402Other
                    income (expense)Interest
                    expense
                
                
                (153,502
                )
                
                (42,969
                )
                
                (275,044
                )
                
                (64,110
                )Settlement
                    income
                
                
                -
                
                
                304,000
                
                
                -
                
                
                304,000Contingent
                    reserve
                
                
                -
                
                
                (55,000
                )
                
                -
                
                
                (55,000
                )Other
                    income
                
                
                2,198
                
                
                -
                
                
                2,198
                
                
                -Total
                    other income (expense)
                
                
                (151,305
                )
                
                206,031
                
                
                (272,846
                )
                
                184,890Income
                    (loss) before provision for income taxes
                
                
                (42,084
                )
                
                366,123
                
                
                136,833
                
                
                456,292Provision
                    for income (tax) benefit
                
                
                -
                
                
                -
                
                
                -
                
                
                -Net
                    income (loss)
                
                $
                (42,084
                )
                $
                366,123
                
                $
                136,833
                
                $
                456,292Basic
                    income (loss) per share
                
                $
                -
                
                $
                0.02
                
                $
                0.01
                
                $
                0.03Fully
                    diluted income (loss) per weighted averagecommon
                    shares outstanding
                
                $
                -
                
                $
                0.01
                
                $
                0.01
                
                $
                0.02Basic
                    weighted average common shares outstanding
                
                
                18,211,986
                
                
                16,103,088
                
                
                18,211,986
                
                
                14,310,608Fully
                    dilutive weighted average commonshares
                    outstanding
                
                
                18,706,275
                
                
                25,181,751
                
                
                18,706,275
                
                
                23,389,271
 
 See
        Accompanying Notes to Condensed Consolidated Financial
        Statements
  4
  
 GLOBAL
        AXCESS CORP AND SUBSIDIARIES
 CONDENSED
        CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
 
 Six
                    months ended June 30,2005
                
                2004Cash
                    flows from operating activities:Net
                    income
                
                $
                136,833
                
                $
                456,292Adjustments
                    to reconcile net income to netcash
                    provided by operating activities:Contingent
                    reserves
                
                
                -
                
                
                55,000Discount
                    on loans
                
                
                9,989
                
                
                -Depreciation
                    and amortization
                
                
                853,157
                
                
                613,063Issuance
                    of stock to consultants for services provided
                
                
                
                
                
                -Shares
                    returned to treasury
                
                
                -
                
                
                (304,000
                )Changes
                    in operating assets and liabilities:Change
                    in automated teller machine vault cash
                
                
                (533,570
                )
                
                14,652Change
                    in accounts receivable
                
                
                (102,099
                )
                
                (221,545
                )Change
                    in inventory
                
                
                (106,336
                )
                
                -Change
                    in prepaid expenses and other current assets
                
                
                (301,543
                )
                
                (448,332
                )Change
                    in other assets
                
                
                160,867
                
                
                11,197Change
                    in accounts payable and accrued liabilities
                
                
                257,471
                
                
                42,582Change
                    in automated teller machine vault cash payable
                
                
                533,570
                
                
                (14,652
                )Net
                    cash provided by operating activities
                
                
                908,339
                
                
                204,258Cash
                    flows from investing activities:Purchase
                    of fixed assets
                
                
                (1,325,906
                )
                
                (772,919
                )Note
                    receivable issued for loan
                
                
                -
                
                
                (99,895
                )Purchase
                    of contracts
                
                
                (40,858
                )
                
                (3,956,370
                )Net
                    cash used in investing activities
                
                
                (1,366,764
                )
                
                (4,829,184
                )Cash
                    flows from financing activities:Proceeds
                    from issuance of common stock, net of offering costs
                
                
                675,746
                
                
                7,104,068Proceeds
                    from notes payable
                
                
                41,809
                
                
                -Borrowings
                    from bank notes
                
                
                250,000
                
                
                -Payment
                    on bank notes
                
                
                (312,500
                )
                
                -Principal
                    payments on notes payable
                
                
                -
                
                
                (15,195
                )Principal
                    payments on notes payable - related parties
                
                
                -
                
                
                (120,700
                )Principal
                    payments on capital lease obligations
                
                
                (274,760
                )
                
                (10,826
                )Net
                    cash provided by financing activities
                
                
                380,295
                
                
                6,966,347Increase/(decrease)
                    in cash
                
                
                (78,130
                )
                
                2,332,421Cash,
                    beginning of period
                
                
                496,823
                
                
                1,832,079Cash,
                    end of period
                
                $
                418,693
                
                $
                4,164,500
 
 See
        Accompanying Notes to Condensed Consolidated Financial
        Statements
  5
  
 
 
 
 
 Supplemental
        schedule of non-cash investing and financing activities:
 Six
                    months ended June 30,2005
                
                2004Issuance
                    of 86,025 shares of common stock related to finder'sfee
                    for acquisition of common stock.
                
                $
                -
                
                $
                107,532Issuance
                    of 2,570,697 shares of common stock related to exchange ofexercise
                    of cashless warrants at $0.50
                
                $
                -
                
                $
                1,285,349Transfer
                    of used ATM's, originally held for rental, from fixed
                    assetsto
                    inventory, now held for sale
                
                $
                -
                
                $
                194,584Capital
                    leases paid to vendor for ATM purchses
                
                $
                1,179,478
                
                $
                -
  See
        Accompanying Notes to Condensed Consolidated Financial
        Statements
  6
  GLOBAL
        AXCESS CORP AND SUBSIDIARIES
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 AS
        OF
        JUNE 30, 2005
 (UNAUDITED)
 
 
 1.
                BASIS
                    OF PRESENTATION
 The
        accompanying unaudited condensed consolidated financial statements have been
        prepared in accordance with Securities and Exchange Commission requirements
        for
        interim financial statements. Therefore, they do not include all of the
        information and footnotes required by accounting principles generally accepted
        in the United States of America for complete financial statements. These
        condensed consolidated financial statements should be read in conjunction
        with
        the Form 10-KSB for the year ended December 31, 2004 of Global Axcess Corp
        ("the
        Company").
 
 The
        interim condensed consolidated financial statements present the condensed
        consolidated balance sheet, statements of operations, and cash flows of Global
        Axcess Corp and its subsidiaries. The condensed consolidated financial
        statements have been prepared in accordance with accounting principles generally
        accepted in the United States of America.
 
 The
        interim condensed consolidated financial information is unaudited. In the
        opinion of management, all adjustments necessary to present fairly the financial
        position as of June 30, 2005 and the results of operations and cash flows
        presented herein have been included in the condensed consolidated financial
        statements. Interim results are not necessarily indicative of results of
        operations for the full year.
 
 2.
              DESCRIPTION
                  OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
                  POLICIES
 
 Description
        of Business Global Axcess Corp, through its wholly owned subsidiaries, is
        a
        network-based electronic commerce and transaction processing company; an
        automated teller machine ("ATM") network and processing consolidator; and
        a
        web-based solutions company to provide financial services to the un-banked
        customer, such as payroll distribution products, money transfer and pre-paid
        products/services.
 
 Use
        of
        Estimates The preparation of financial statements in conformity with accounting
        principles generally accepted in the United States of America requires
        management to make estimates and assumptions that affect the reported amounts
        of
        assets and liabilities and disclosure of contingent assets and liabilities
        at
        the date of the financial statements and the reported amounts of revenues
        and
        expenses during the reporting period. Actual results could differ from those
        estimates.
 
 1
        for 5
        Reverse Stock Split
 
 In
        April
        2005, the Board of Directors authorized a 1 for 5 reverse stock split. All
        share
        and per share amounts in the accompanying consolidated financial statements
        and
        footnotes have been restated to give effect to such reverse stock split.
  7
  Allowance
        and Amortization of Assets
 
 On
        the
        Balance Sheet as of June 30, 2005 the Company reserved $5,983 as an allowance
        for bad debt against the trade receivables of $1,352,892.
 
 As
        of
        June 30, 2005 the Company has accumulated amortization totaling $201,762
        against
        intangible assets totaling $4,291,546.
 
 Earnings
        Per Share Basic net income per share is computed based on the weighted average
        number of common shares outstanding during the period. Diluted net income
        per
        common share is computed based on the weighted average number of common shares
        outstanding during the period increased by the effect of dilutive stock options
        and stock purchase warrants using the treasury stock method. The calculation
        of
        basic net income per common share and diluted net income per common share
        is
        presented below:
 
 
 
 The
        computations for basic and diluted weighted average earnings per share are
        as
        follows:
  Net
                    Income
                
                Weighted
                    Average Shares
                
                Earnings
                    Per Share(Numerator)
                
                (Denominator)Three
                    months ended June 30, 2004Basic
                    weighted average earnings per share:Net
                    income
                
                $
                366,123
                
                
                16,103,088
                
                $
                0.02Diluted
                    earnings per share:Dilutive
                    stock options & warrants
                
                
                
                
                
                9,078,663Net
                    income plus assumed conversions
                
                $
                366,123
                
                
                25,181,751
                
                $
                0.01Three
                    months ended June 30, 2005Basic
                    weighted average earnings per share:Net
                    (loss)
                
                $
                (42,084
                )
                
                18,211,986
                
                $
                0.00Diluted
                    earnings per share:Dilutive
                    stock options & warrants
                
                
                
                
                
                494,289Net
                    (loss) plus assumed conversions
                
                $
                (42,084
                )
                
                18,706,275
                
                $
                0.00Six
                    months ended June 30, 2004Basic
                    earnings per share:Net
                    Income
                
                $
                456,292
                
                
                14,310,608
                
                $
                0.03Diluted
                    earnings per share:Dilutive
                    stock options & warrants
                
                
                
                
                
                9,078,663Net
                    (loss) plus assumed conversions
                
                $
                456,292
                
                
                23,389,271
                
                $
                0.02Six
                    months ended June 30, 2005Basic
                    earnings per share:Net
                    Income
                
                $
                136,833
                
                
                18,211,986
                
                $
                0.01Diluted
                    earnings per share:Dilutive
                    stock options & warrants
                
                
                
                
                
                494,289Net
                    Income plus assumed conversions
                
                $
                136,833
                
                
                18,706,275
                
                $
                0.01
  Stock-based
        compensation - The Company applies Accounting Principles Board ("APB") Opinion
        No. 25, Accounting for Stock Issued to Employees, and Related Interpretations,
        in accounting for stock options issued to employees. Under APB No. 25, employee
        compensation cost is recognized when estimated fair value of the underlying
        stock on the date of the grant exceeds exercise price of the stock option.
        For
        stock options and warrants issued to non-employees, the Company applies SFAS
        No.
        123, Accounting for Stock-Based Compensation, which requires the recognition
        of
        compensation cost based upon the fair value of stock options at the grant
        date
        using the Black-Scholes option pricing model.
  8
  In
        December 2002, the Financial Accounting Standards Board (FASB) issued SFAS
        No.
        148, "Accounting for Stock-Based Compensation-Transition and Disclosure".
        SFAS
        No. 148 amends the transition and disclosure provisions of SFAS No. 123.
        In
        December 2004, the FASB issued a revision to SFAS No. 123 called SFAS No.
        123R,
        which revises the adoption period and transition periods for all entities
        using
        the fair value method and applying a modified prospective method for accounting
        for employee stock options. The Company will be adopting SFAS 123R as
        recommended for Small Business (SB) filers, as of December 15, 2005 for periods
        subsequent to that date. Currently, the Company is applying SFAS 123R and
        the
        modified prospective method for valuing the disclosures.
  The
        following table represents the effect on net income and earnings per share
        if
        the Company had applied the fair value based method and recognition provisions
        of Statement of Financial Accounting Standards (SFAS) No. 123, "Accounting
        for
        Stock-Based Compensation", and the transition disclosure provisions of SFAS
        No.
        148, to stock-based employee compensation:
 
 For
                    the Six Months Ended June 30,2005
                
                2004Net
                    income, as reported
                
                $
                136,833
                
                $
                456,292Add:
                    Stock-based employee compensation expense included in reported
                    income
                    (loss),
                
                -net
                    of related tax effectsDeduct:
                    Total stock-based employee compensation expense determined
                
                $
                (41,988
                )
                $
                (564,449
                )under
                    fair value based methods for all awards, net of related tax
                    effectsPro
                    forma net income (loss)
                
                $
                94,845
                
                $
                (108,157
                )Net
                    income/(loss) per common shareBasic
                    income (loss), as reported
                
                $
                0.01
                
                $
                (0.01
                )Fully
                    diluted income/ (loss), pro forma
                
                $
                0.01
                
                $
                (0.01
                )
 
 3.  AMENDMENT
        TO PREVIOUSLY REPORTED QUARTERLY FINANCIAL STATEMENTS
  The
        Company’s previously issued consolidated financial statements for the three and
        six months ended June 30, 2005 have been restated to correct errors related
        to
        the Company’s accounting for: revenue under certain of its processing contracts;
        capitalization of purchased software costs; and depreciation of certain assets
        that were not in service during the six months ended June 30, 2005.
 
 The
        revenue correction specific to the three and six months ended June 30, 2005
        totaled $425,669. The Company determined that revenue under certain contracts
        may be recognized in future quarters as cash is collected.
 
 As
        a
        result of the error specific to purchased software costs, the Company’s general
        and administrative expenses were overstated by $33,866 during the three and
        six
        months ended June 30, 2005. The Company determined that such costs should
        have
        been capitalized during the quarter ended June 30, 2005 and expensed in future
        periods.
 
 The
        Company’s depreciation expense was overstated by $53,808 during the three and
        six months ended June 30, 2005 as a result of the error specific to depreciation
        expense, which the Company determined should be recognized in future periods.
  9
  
 As
        a
        result of these adjustments, net income for the three and six months ended
        June
        30, 2005 was reduced by $337,995 and the Company has reported a net loss
        of
        $42,084 versus the previously reported net income of $295,911 for the three
        months ended June 30, 2005. For the six months ended June 30, 2005, the Company
        has reported net income of $136,833 versus the previously reported net income
        of
        $474,828.
 
 The
        following table summarizes the effect of the restatement on the consolidated
        statement of operations for the three and six months ended June 30,
        2005:
 
 Three
                    Months ended
                
                Six
                    Months endedJune
                    30, 2005
                
                June
                    30, 2005As
                    previously
                
                Restated
                
                As
                    previously
                
                Restatedreported
                
                
                
                reportedRevenues
                
                $
                5,437,811
                
                $
                5,012,142
                
                $
                10,155,647
                
                $
                9,729,978Cost
                    of revenues
                
                
                3,024,084
                
                
                3,024,084
                
                
                5,728,523
                
                
                5,728,523Gross
                    profit
                
                
                2,413,727
                
                
                1,988,058
                
                
                4,427,124
                
                
                4,001,455Operating
                    expenses:Depreciation
                    and amortization
                
                
                381,841
                
                
                328,033
                
                
                701,308
                
                
                647,500Selling,
                    General and administrative
                
                
                1,584,671
                
                
                1,550,805
                
                
                2,978,142
                
                
                2,944,276Total
                    operating expenses
                
                
                1,966,512
                
                
                1,878,838
                
                
                3,679,450
                
                
                3,951,776Operating
                    Income
                
                
                447,215
                
                
                109,220
                
                
                747,674
                
                
                409,679Other
                    income (expense)Interest
                    expense
                
                
                (153,502
                )
                
                (153,502
                )
                
                (275,044
                )
                
                (275,044
                )Other
                    income
                
                
                2,198
                
                
                2,198
                
                
                2,198
                
                
                2,198Total
                    other income (expense)
                
                
                (151,304
                )
                
                (151,304
                )
                
                (272,846
                )
                
                (272,846
                )Net
                    income (loss)
                
                $
                295,911
                
                $
                (42,084
                )
                $
                474,828
                
                $
                136,833Income
                    (loss) per common share - basic:
                
                $
                0.02
                
                
                -
                
                $
                0.03
                
                $
                0.01Income
                    (loss) per common share - diluted:
                
                $
                0.02
                
                
                -
                
                $
                0.03
                
                $
                0.01
 
 
 4.
        COMMITMENTS AND CONTINGENCIES
 
 Leased
        facilities - During March 2004, the Company extended the operating lease
        for its
        facilities under a non-cancelable operating lease for an additional 3 years
        expiring in March 2009. The agreement calls for an annual base rent of
        approximately $180,326 with an annual cost of living increase of 3%. Rent
        Expense during the six month period ending June 30, 2005 and 2004 was $126,201
        and $104,604, respectively.
 
 Future
        minimum rental payments required under the operating lease for the office
        facilities as of June 30, 2005 are as follows:
 
 
  remaining
                  six months of 2005
              
              $
              125,9242006
              
              
              257,6742007
              
              
              258,6052008
              
              
              209,7132009
              
              
              35,476$
              887,392
  10
  
 In
        January 2005, the Company entered into a new loan agreement with ATM
        Networks
 Inc.
        at
        an interest rate of 6.25% per annum for 2 years. The balance as of June 30,
        2005
        is $41,810 and is included in notes payable current.
 
 Capital
        lease obligations - During the three month period ending June 30, 2005 the
        Company entered into capital lease obligations as follows:
 
 Capital
        leases entered into during the three month period ending June 30,
        2005
 maturing
        in 36 to 60 months with various rates from 5.99% to 12% totaling
 $556,820
        as of June 30, 2005.
 
 Future
        minimum lease payments required for under capital lease obligations
 as
        of
        June 30, 2005 are as follows:
 
 Remaining
                  six months of 2005
              
              $
              460,7322006
              
              
              871,5542007
              
              
              731,5272008
              
              
              494,6442009
              
              
              320,766Total
                  capital lease obligations
              
              $
              2,879,223
 
 
 
 Legal
        proceedings - As of June 30, 2005, the Company has accrued legal costs of
        $54,000 related to various legal proceedings.
 
 There
        are
        no new significant pending or threatened litigation or legal proceedings
        since
        December 31, 2004.
 
 The
        Company has also entered into a letter of intent to acquire approximately
        1500
        ATM merchant contracts, contingent upon due diligence and funding of the
        acquisition. Terms of the acquisition are confidential and will be disclosed
        when the transaction is completed.
 
 The
        Company is evaluating various strategic opportunities with regards to its
        wholly
        owned subsidiaries.
 
 5.
              CHANGES
                  IN STOCKHOLDERS' EQUITY
 
 In
        April
        2005, the Board of Directors authorized a 1 for 5 reverse stock split. All
        share
        and per share amounts in the accompanying consolidated financial statements
        and
        footnotes have been restated to give effect to such reverse stock
        split.
 
 Item
        2.
        Management's Discussion and Analysis or Plan of Operation
 
 The
        following discussion should be read in conjunction with the condensed
        consolidated financial statements and notes thereto.
  11
  In
        addition to historical information, this Quarterly Report on Form 10-QSB
        contains forward-looking statements that involve risks and uncertainties
        that
        could cause actual results to differ materially. Factors that might cause
        or
        contribute to such differences include, but are not limited to, those discussed
        in the section entitled "Management's Discussion and Analysis or Plan of
        Operation”. You should carefully review the risks described in other documents
        we file from time to time with the Securities and Exchange Commission, including
        the Quarterly Reports on Form 10-QSB that have been or are to be filed in
        2005.
        When used in this report, the words "expects," "anticipates," "intends,"
        "plans," "believes," "seeks," "targets," "estimates," "looks for," "looks
        to,"
        and similar expressions are generally intended to identify forward-looking
        statements. You should not place undue reliance on these forward-looking
        statements, which speak only as of the date of this Quarterly Report on Form
        10-QSB. We undertake no obligation to publicly release any revisions to the
        forward-looking statements or reflect events or circumstances after the date
        of
        this document.
 
 Summary
 
 Global
        Axcess Corp (the "Company"), through its wholly owned subsidiaries, owns
        and
        operates Automatic Teller Machines ("ATM") with locations primarily in the
        eastern United States of America. Our revenues are principally derived from
        two
        types of fees, which we charge for processing transactions on our ATM network.
        We receive an interchange fee from the issuer of the credit or debit card
        for
        processing a transaction when a cardholder uses an ATM in our network. In
        addition, in most cases we receive a surcharge fee from the cardholder when
        the
        cardholder makes a cash withdrawal from an ATM in our network.
 
 Interchange
        fees are processing fees that are paid by the issuer of the credit or debit
        card
        used in a transaction. Interchange fees vary for cash withdrawals, balance
        inquiries, account transfers or uncompleted transactions, the primary types
        of
        transactions that are currently processed on ATMs in our network. The maximum
        amount of the interchange fees is established by the national and regional
        card
        organizations and credit card issuers with whom we have a relationship. We
        receive interchange fees for transactions on ATMs that we own, but sometimes
        we
        rebate a portion of the fee to the owner of the ATM location under the
        applicable lease for the ATM site. We also receive the interchange fee for
        transactions on ATMs owned by third party vendors included within our network,
        but we rebate all or a portion of each fee to the third party vendor based
        upon
        negotiations between us. The interchange fees received by us vary from network
        to network and to some extent from issuer to issuer, but generally range
        from
        $0.15 to $0.55 per cash withdrawal. Interchange fees for balance inquiries,
        account transfers and denied transactions are generally substantially less
        than
        fees for cash withdrawals. The interchange fees received by us from the card
        issuer are independent of the service fees charged by the card issuer to
        the
        cardholder in connection with ATM transactions. Service fees charged by card
        issuers to cardholders in connection with transactions through our network
        range
        from zero to as much as $2.50 per transaction. We do not receive any portion
        of
        these service fees.
 
 In
        most
        markets we impose a surcharge fee for cash withdrawals. Surcharge fees are
        a
        substantial additional source of revenue for us and other ATM network operators.
        The surcharge fee for ATMs in our network ranges between $1.50 and $2.50
        per
        withdrawal. The surcharge fee for other ATMs in our network ranges between
        $0.50
        and $7.50 per withdrawal. We receive the full surcharge fee for cash withdrawal
        transactions on ATMs that we own, but often we rebate a portion of the fee
        to
        the owner of the ATM location under the applicable lease for the ATM site.
        We
        also receive the full surcharge fee for cash withdrawal transactions on ATMs
        owned by third party vendors included within our network, but we rebate all
        or a
        portion of each fee to the third party vendor based upon a variety of factors,
        including transaction volume and the party responsible for supplying vault
        cash
        to the ATM.
  12
  In
        addition to revenues derived from interchange and surcharge fees, we also
        derive
        revenues from providing network management services to third parties owning
        ATMs
        included in our ATM network. These services include 24 hour transaction
        processing, monitoring and notification of ATM status and cash condition,
        notification of ATM service interruptions, in some cases, dispatch of field
        service personnel for necessary service calls and cash settlement and reporting
        services. The fees for these services are paid by the owners of the
        ATMs.
 
 Interchange
        fees are credited to us by networks and credit card issuers on a monthly
        basis
        and are paid to us in the following month between the 10th and 15th business
        day. Surcharge fees are charged to the cardholder and credited to us by networks
        and credit card issuers on a daily basis. We periodically rebate the portion
        of
        these fees owed to ATM owners and owners of ATM locations. Fees for network
        management services are generally paid to us on a monthly basis.
 
 The
        Company's mission is to become a leading global ATM network and services
        provider through network acquisition and internal development of value-added
        turnkey, consumer and business-to-business transaction solutions and products.
        The Company is positioning itself to leverage its advanced technology, internal
        processing, economies of scale and industry knowledge to capture a larger
        portion of the non-bank ATM market. Importantly, having both project management
        and transaction processing allows the Company to successfully compete in
        its
        industry. Most competitors do not have this vertical capability. When coupled
        with third-party products, the Company will be in a position to increase
        the
        financial services offered by the ATM. These future financial and digital-based
        products will be targeted towards the traditional ATM customer (domestically,
        15% of the working population do not use traditional bank services/checking
        accounts), as well as potential new ATM customers. These products are intended
        to give the Company a competitive edge in both product offerings and higher
        margin revenues, and to draw ATM companies to its acquisition strategy. Although
        the Company has historically focused its operations mainly in the Eastern
        region
        of the United States of America, the Company has commenced expansion of its
        operations throughout the United States of America.
 
 Critical
        Accounting Policies
 
 The
        fundamental objective of financial reporting is to provide useful information
        that allows a reader to comprehend our business activities. To aid in that
        understanding, management has identified our "critical accounting policies".
        When more than one accounting principle, or the method of its application,
        is
        generally accepted, management selects the principle or method that is
        appropriate in the specific circumstances. Application of these accounting
        principles requires our management to make estimates about the future resolution
        of existing uncertainties. As a result, actual results could differ from
        these
        estimates. Accordingly, these policies have the potential to have a significant
        impact on our consolidated financial statements, either because of the
        significance of the consolidated financial statement item to which they relate,
        or because they require judgment and estimation due to the uncertainty involved
        in measuring, at a specific point in time, events which are continuous in
        nature.
 
 In
        preparing these consolidated financial statements, management has made its
        best
        estimates and judgments of the amounts and disclosures included in the
        consolidated financial statements. Except as separately discussed, we do
        not
        believe there is a great likelihood that materially different amounts would
        be
        reported under different conditions or by using different assumptions pertaining
        to the accounting policies described below.
  13
  Revenue
        Recognition Policies. We recognize revenues as ATM cardholders use ATMs or
        as
        services are rendered to customers. When the customer accepts the convenience
        fee, also known as surcharge fees, and performs a transaction on the ATM,
        revenue can then be recognized since that transaction is then captured by
        the
        Company's database. In connection with recording revenue, estimates and
        assumptions are required in determining the expected conversion of the revenue
        streams to cash collected. The reserve estimation process requires that
        management make assumptions based on historical results, future expectations,
        the industry's economic and competitive environment, changes in the
        creditworthiness of our customers, and other relevant factors. Revenues are
        also
        adjusted with positive and negative processing accruals occurring in the
        operation of the Company's ATM network in the ordinary course of business.
        It is
        the policy of the Company to book as revenue all surcharge and interchange
        it
        receives and earns based on the contracts, whether for its owned ATMs or
        for
        those it manages. In the case of managed ATMs, the Company then books as
        a
        commission all monies paid to the owners of the ATMs. Where the Company provided
        only processing services through it's wholly owned subsidiary, EFT Integration,
        the Company only records the fees it charges to its customers as revenue.
        During
        consolidation of the financial statements the Company eliminates the revenue
        earned by EFT Integration for the processing of Company owned or managed
        ATMs.
        Surcharge fees are fees assessed directly to the consumer utilizing the ATM
        terminals owned by the Company. The surcharge fees assessed range from $1.50
        to
        $2.50 based upon a cash withdrawal transaction from the ATM
        terminals.
 
 Interchange
        fees are fees assessed directly to the card issuer of the consumer. The
        interchange fees are comprised of two fees: (1) an interchange fee ranging
        from
        approximately $0.40 to $0.55 based upon each cash withdrawal transaction;
        and
        (2) an interchange fee ranging from approximately $0.15 to $0.25 based upon
        an
        account inquiry by the consumer.
 
 Processing
        fees are earned by EFT Integration (EFTI), a wholly owned subsidiary of the
        Company, for the switching of transactions between the ATMs and the cardholders
        bank(s). The processing fees earned by EFTI for the switching of transactions
        for Nationwide Money Services, Inc.'s ATMs are eliminated at time of
        consolidation. However, EFTI switches transactions for companies other than
        Nationwide Money Services.
 
 Management
        fees are charged to various companies or individuals that use the services
        of
        Nationwide Money Services to operate their ATMs. These fees are for services
        such as cash management, project management and account management.
 
 Software
        sales and services are recorded when complete, shipped and
        invoiced.
 
 Allowance
        of Uncollectible Accounts Receivable. Merchants and investors have been
        historically billed for reimbursable expenses of the Company as part of
        negotiated contracts. The accounts receivable, for these reimbursed expense
        invoices, have been historically reduced by an allowance for amounts that
        may
        become uncollectible in the future. The Company reviews the accounts receivable
        on a regular basis to determine the collectability of the accounts. The Company
        reserves for accounts that have aged over 90 days and are no longer an active
        account.
 
 Equipment.
        ATM equipment comprises a significant portion of our total assets. Changes
        in
        technology or changes in our intended use of these assets may cause the
        estimated period of use or the value of these assets to change. We perform
        annual internal studies to confirm the appropriateness of estimated economic
        useful lives for each category of current equipment. Estimates and assumptions
        used in setting depreciable lives require both judgment and estimates.
  14
  Goodwill.
        In July 2001, the FASB issued SFAS No. 142, 'Goodwill and Other Intangible
        Assets,' which was required to be adopted for fiscal 2002. SFAS No. 142
        established accounting and reporting standards for goodwill and intangible
        assets resulting from business combinations. SFAS No. 142 included provisions
        discontinuing the periodic amortization of, and requiring the assessment
        of the
        potential impairments of, goodwill (and intangible assets deemed to have
        indefinite lives). As SFAS No. 142 replaced the measurement guidelines for
        goodwill impairment, goodwill not considered impaired under previous accounting
        literature may be considered impaired under SFAS No. 142. SFAS No. 142 also
        required that the Company complete a two-step goodwill impairment test. The
        first step compared the fair value of each reporting unit to its carrying
        amount, including goodwill. If the fair value of a reporting unit exceeded
        its
        carrying amount, goodwill is not considered to be impaired and the second
        step
        was not required. SFAS 142 required completion of this first step within
        the
        first three months of initial adoption and annually thereafter. If the carrying
        amount of a reporting unit exceeded its fair value, the second step is performed
        to measure the amount of impairment loss. The second step compared the implied
        fair value of goodwill to the carrying value of a reporting unit's goodwill.
        The
        implied fair value of goodwill is determined in a manner similar to accounting
        for a business combination with the allocation of the assessed fair value
        determined in the first step to the assets and liabilities of the reporting
        unit. The excess of the fair value of the reporting unit over the amounts
        assigned to the assets and liabilities is the implied fair value of goodwill.
        This allocation process was only performed for purposes of evaluating goodwill
        impairment and did not result in an entry to adjust the value of any assets
        or
        liabilities. An impairment loss is recognized for any excess in the carrying
        value of goodwill over the implied fair value of goodwill.
 
 Asset
        Impairment. The Company reviews long-lived assets for impairment under SFAS
        No.
        144, "Accounting for the Impairment or Disposal of Long-Lived Assets."
        Long-lived assets to be held and used are reviewed for impairment whenever
        events or changes in circumstances indicate that the carrying amount of an
        asset
        may not be recoverable. The carrying amount of a long-lived asset is not
        recoverable if it exceeds the sum of the undiscounted cash flows expected
        to
        result from the use and eventual disposition of the asset. Long-lived assets
        to
        be disposed of are reported at the lower carrying amount or fair value less
        cost
        to sell. During the year ended December 31, 2004, the Company determined
        that
        there were no long-lived assets that were impaired.
 
 Intangible
        assets with finite lives are stated at cost, net of accumulated amortization,
        and are subject to impairment testing under certain circumstances in accordance
        with SFAS No. 144 and other applicable pronouncements. These assets are
        amortized on the straight-line and accelerated methods, as appropriate, over
        their estimated useful lives or period of expected benefit. Intangible assets
        with indefinite lives are subject to periodic impairment testing in accordance
        with SFAS No. 142.
 
 Comparison
        of Results of Operations for the Three Months Ended June 30, 2005 and
        2004
 
 Revenues.
        The Company reported total revenue of $5,012,142 for the three month period
        ended June 30, 2005 as compared to $3,112,230 for the three month period
        ended
        June 30, 2004. During the six month periods ended June 30, 2005 and 2004
        the
        revenues increase to $9,729,978 from $5,912,711, respectively. This increase
        in
        the three and six month revenues are mainly due to higher surcharge and
        interchange revenue from acquired ATM merchant locations and increased organic
        sales of ATMs.
  15
  Cost
        of
        Revenues. Our total cost of revenues increased from $1,727,311 to $3,024,084
        in
        the three month periods ended June 30, 2004 and 2005, respectively. During
        the
        six month periods ended June 30, 2005 and 2004, the cost of revenues increased
        to $5,728,523 from $3,304,979, respectively. Both the continued growth in
        our
        Branded Partners and the acquisition during fiscal year 2004 have had a
        significant impact on the level of the cost of revenues for the three and
        six
        month periods ending June 30, 2005.
 
 Gross
        Margin. Gross profit as a percentage of revenue for the three month periods
        ended June 30, 2005 and 2004 were 39.6% or $1,988,058 and 44.5% or $1,384,919,
        respectively. During the six month periods ended June 30, 2005 and 2004,
        the
        gross margins increased to $4,001,455 from $2,607,732, respectively. There
        was a
        significant increase in the three month and six month periods ending June
        30,
        2005 due to higher number of ATMs in place since December 2004, approximately
        3,500; compared to the same three and six month periods ending June 30, 2004,
        with approximately 2,400. Operating Expenses. Our total operating expenses
        for
        the three months ended June 30, 2005 and 2004, were $1,878,838 and $1,224,827,
        respectively. During the six month periods ended June 30, 2005 and 2004,
        the
        operating expenses increased to $3,591,776 from $2,336,330, respectively.
        The
        principal components of operating expenses are professional fees, administrative
        salaries and benefits, depreciation and amortization, consulting fees, occupancy
        costs, sales and marketing expenses and administrative expenses. The increase
        during the three months ended June 30, 2005 is mainly attributable to investment
        by the Company into three of its subsidiaries; Electronic Payment and Transfer,
        Corp., Cash Axcess Corp. and Axcess Technology, Corp. There were also increases
        in investment relations, security systems costs, audit and professional fees,
        salaries and wages, employee taxes and benefits during the three and six
        month
        periods ending June 30, 2005 as compared to the three and six month periods
        ended June 30, 2004. There was also an increase in depreciation and amortization
        due to the acquisitions of ATM merchant contracts during fiscal year 2004,
        and
        from other assets purchased during fiscal year 2004.
 
 Income
        from Operations. We had income from operations for the three month period
        ending
        June 30, 2005 in the amount of $109,220 as compared to income from operations
        of
        $160,092 in the three month period ending June 30, 2004. During the six month
        periods ended June 30, 2005 and 2004, the income from operations increased
        significantly to $409,679 from $271,402, respectively. The increase in income
        from operations reported was mainly due to higher revenues noted above.
 
 Other
        Income and expense. In 2004 other income was mainly from the settlement of
        a
        lawsuit, the Company was able to return 380,000 shares of common stock to
        treasury at a market value of $0.80 per share. During the three months ended
        June 30, 2005, there was $2,198 of other income compared to none for the
        three
        month period ending June 30, 2004.
 
 Interest
        Expense. Interest expense increased for the three month period ending June
        30,
        2005 to $153,502 from $42,969 for the three month period ending July 30,2004.
        During the six month periods ended June 30, 2005 and 2004, the interest expense
        increased to $275,044 from $64,110, respectively. The increase was mainly
        due to
        fees charged on loans and leases, for purchases of acquisitions and new ATMs,
        amortized during the three and six month periods ended June 30,
        2005.
 
 Income/Loss
        before Taxes. We had a net loss before taxes of $42,084 for the three months
        ended June 30, 2005 as compared to net income before taxes of $366,123 for
        the
        three month periods ending June 30, 2004. During the six month periods ended
        June 30, 2005 and 2004, income before taxes increased to $136,833 from $456,292,
        respectively.
 
 Income
        Taxes. We paid no income taxes in either of the respective periods ending
        June
        30, 2005 and 2004. This was a result of a net operating loss carry-forward
        from
        2002 of approximately $7,000,000. We have unused operating loss carry forwards
        which will expire in various periods through 2022.
  16
  LIQUIDITY
        AND CAPITAL RESOURCES
 
 Working
        Capital. As of June 30, 2005, the Company had current assets of $3,715,929
        and
        current liabilities of $4,809,834 which results in a negative working capital
        of
        $1,093,905 as compared to current assets of $2,750,511 and current liabilities
        of $3,849,746 resulting in a negative working capital of 1,099,235 as of
        December 31, 2004. The ratio of current assets to current liabilities increased
        to 0.77 at June 30, 2005 from 0.71 at December 31, 2004. It is expected that
        cash provided from operations will be sufficient for the next 12
        months.
 
 Additional
        Funding Sources
 
 We
        have
        funded our operations and investment activities from cash flow generated
        by
        operations and financing activities. Net cash provided by operating activities
        during the six month periods ending June 30, 2005 and 2004 was $908,339 and
        204,258, respectively. Net cash provided by operating activities in the six
        month period ending June 30, 2005 consisted primarily of net income of $136,833,
        depreciation and amortization of $853,157. Decreases in operating assets
        over
        liabilities amounted to $91,640. The decrease in the operating assets were
        mainly due to higher levels of accounts receivable and other assets from
        the
        acquisition by $102,099 and 222,946, respectively, and increases in accounts
        payable by $257,469.
 
 The
        Company's sources of cash are adequate for the next 12 month's of
        operations.
 
 In
        order
        to fulfill its business plan and expand its business, the Company must have
        access to funding sources that are prepared to make equity or debt investments
        in the Company's securities.
 
 In
        order
        to address this potential for growth, the Company has taken steps to raise
        additional funds to finance its operations, including the potential for making
        strategic acquisitions, which could better position the Company for growth.
        Historically, the Company has relied primarily upon institutional investors
        for
        this purpose. There can be no guarantee that institutional funding will be
        available to the Company in the near future. The Company has conducted several
        private placement offerings with accredited investors.
 
 The
        Company's ability to attract investors depends upon a number of factors,
        some of
        which are beyond the Company's control. The key factors in this regard include
        general economic conditions, the condition of ATM markets, the availability
        of
        alternative investment opportunities and the Company's past financial
        performance affecting the Company's current reputation in the financial
        community.
 
 The
        Company is continuing its efforts to raise additional capital through equity
        or
        debt financings. To continue its current business plan and acquisition strategy
        the Company estimates, it will require approximately $16,800,000 in additional
        capital to meet its needs for the next 12 months for acquisitions and such
        items
        as new ATM leases and software development.
 
 The
        Company will require significant additional financing in the future in order
        to
        satisfy its acquisition plan. To fund its continued growth the Company intends
        to raise additional capital through debt and equity financings, however,
        the
        Company cannot guarantee that it will be able to raise funding through these
        types of financings. The need for additional capital to finance operations
        and
        growth will be greater should, among other things, revenue or expense estimates
        prove to be incorrect, particularly if additional sources of capital are
        not
        raised in sufficient amounts or on acceptable terms when needed. Consequently,
        the Company may be required to reduce the scope of its business activities
        until
        other financing can be obtained.
  17
  The
        Company does not use its own funds for vault cash, but rather relies upon
        third
        party sources. The Company in general rents the vault cash from financial
        institutions and pays a negotiated interest rate for the use of the money.
        The
        vault cash is never in the possession of, controlled or directed by the Company
        but rather cycles from the bank, to the armored car carrier, and to the ATM.
        Each days withdrawals are settled back to the owner of the vault cash on
        the
        next business day. Both Nationwide Money and its customers (the merchants)
        sign
        a document stating that the vault cash belongs to the financial institution
        and
        that neither party has any legal rights to the funds. The required vault
        cash is
        obtained under the following arrangements.
 
 o
              Palm
                  Desert Bank. Nationwide Money Services has been using Palm Desert
                  National
                  Bank as a vault cash provider since April of 2001. This relationship
                  was
                  limited to the funding of a specific portfolio of ATMs and as a
                  result
                  limited the growth potential of the relationship. During the third
                  quarter
                  of 2002, Nationwide Money and Palm Desert initiated discussions
                  to expand
                  the relationship and for Palm Desert to provide vault cash for
                  additional
                  ATMs. As of June 30, 2005, Nationwide Money had 105 ATMs funded
                  by Palm
                  Desert with a vault cash outstanding balance of about $3,000,000.
                  In
                  January 2003, we entered into an arrangement with Palm Desert allowing
                  us
                  to obtain up to $10,000,000 in vault cash. The Palm Desert Bank
                  arrangement has a term of two years and may be terminated by Palm
                  Desert
                  Bank upon breach by us and upon the occurrence of certain other
                  events.
                  Under this arrangement, we are required to pay a monthly service
                  fee on
                  the outstanding amount equal to the prime rate of interest, plus
                  a
                  specified percentage, and must pay monthly "bank" fees. Additionally
                  the
                  Company is required to make a deposit with Palm Desert Bank in
                  an amount
                  determined by the outstanding balance. We are also required to
                  maintain
                  insurance on the vault cash.
 
 o
              WSFS.
                  On May 15, 2000, we entered into an arrangement with Wilmington
                  Savings
                  Fund Society ("WSFS") allowing us to obtain up to $2,000,000 in
                  vault
                  cash. In May 2002, we renewed the agreement with WSFS and increased
                  the
                  vault cash limit to $5,000,000 and the new contract has a month-to-month
                  term. Due to added locations from our acquisitions we have increased
                  the
                  WSFS line as of June 30, 2005, to approximately $20,000,000. The
                  WSFS
                  contract may be terminated by WSFS at any time upon breach by us
                  and upon
                  the occurrence of certain other events. Under this arrangement,
                  we are
                  required to pay a monthly service fee on the outstanding amount
                  equal to
                  the prime rate of interest, plus a specified percentage, and must
                  pay
                  monthly "bank" and insurance fees. We are also required to maintain
                  insurance on the vault cash.
 
 o
              Various
                  Branded Cash Partners. Nationwide Money has partnered with numerous
                  banks
                  and credit unions to market specific Nationwide ATMs to the cardholders
                  of
                  these institutions. We add signage and marketing material to the
                  ATM so
                  that the ATM is easily identified as being associated with the
                  bank or
                  credit union, and the cardholders of these institutions receive
                  surcharge
                  free transactions at the designated ATMs. This provides the bank
                  or credit
                  union additional marketing power and another point of access to
                  funds for
                  their cardholders. In return for this benefit, the bank or credit
                  union,
                  provide and manage the vault cash in the specified ATM(s), as well
                  as
                  provide and pay for cash replenishment and first line maintenance.
                  The
                  advantage to Nationwide Money is that this reduces the costs associated
                  with vault cash, cash replenishment and first line by approximately
                  50%.
                  Another advantage is that with a branded ATM, transactions volumes
                  traditionally increase more than at a non-branded ATM. As of June
                  30, 2005
                  , Nationwide Money had 72 branded partners, which funded over 600
                  ATMs in
                  8 states, with about $9.0 million in outstanding vault cash.
  18
  As
        a
        result of certain factors, our cash provided by operating activities has
        increased from the six month period ending June 30, 2005, compared to the
        six
        month period ending June 30, 2004. The Company is realizing more profit and
        a
        higher level of depreciation/amortization, thus raising the cash from operations
        by approximately $700,000. With this increase in operating cash flows we
        have
        incurred additional demands on our available capital in connection with the
        start-up expenses associated with our two new subsidiaries Axcess Technologies
        Corp. and Electronic Payment & Transfer, Corp. The majority of the funds
        remaining will be used to make acquisitions and fixed asset
        purchases.
 
 As
        any
        newly-placed ATMs mature, such ATMs generally experience increased activity
        and
        generate increased revenues. We believe that future cash flow from operations
        will be sufficient to fund operations and to allow us to continue to explore
        and
        pursue expansion opportunities.
 
 If
        cash
        flow from operations is not sufficient to fund our operations, we may be
        required to seek additional sources of financing. If any of our existing
        financing arrangements are terminated, or if we seek additional funding to
        expand our ATM network, additional financing may not be available when needed
        or
        may not be available on acceptable terms. In that event, our ability to maintain
        and expand our ATM network may be adversely affected. The loss of one or
        more
        sources of vault cash funding or the loss of additional customers could have
        a
        material adverse effect on our business, results of operations and financial
        condition. As always, we continue to look for new and alternative vault cash
        sources.
 
 Contractual
        Obligations. Our ability to fund our capital needs is also impacted by our
        overall capacity to acquire favorable financing terms in our acquisition
        of
        ATMs. Our contractual obligations, including commitments for future payments
        under non-cancelable lease arrangements and short and long-term debt
        arrangements, are summarized below. We do not participate in, nor secure
        financings for, any unconsolidated, limited or special purpose entities.
        We
        anticipate that our capital expenditures (outside of acquisitions) for fiscal
        2005 will total approximately $1,800,000, primarily for the acquisition of
        ATMs
        and related ATM installation costs. We lease ATMs under capital lease agreements
        that expire between in 2006 and 2008 and provide for lease payments at interest
        rates up to 14% per annum. See Note 8 to the Consolidated Financial Statements
        in the Form 10KSB Annual Report.
 
 Inflation
 
 Impact
        of
        Inflation and Changing Prices. While subject to inflation, we were not impacted
        by inflation during the past two fiscal years in any material
        respect.
 
   19
  Item
        3.
        Controls and Procedures.
 
 As
        of the
        end of the period covered by this report, we carried out an evaluation of
        the
        effectiveness of the design and operation of our disclosure controls and
        procedures pursuant to Exchange Act Rule 13a-15. This evaluation was done
        under
        the supervision and with the participation of our principal executive officer
        and principal financial officer. Based on their evaluation of our disclosure
        controls and procedures (as defined in the Exchange Act Rule 13a-15e), our
        principal executive officer and principal financial officer have concluded
        that
        during the period covered by this report, such disclosure controls and
        procedures were not effective to detect the inappropriate application of
        US GAAP
        rules as more fully described below. This was due to deficiencies that existed
        in the design or operation of our internal control over financial reporting
        that
        adversely affected our disclosure controls and that may be considered to
        be
        "material weaknesses." The Public Company Accounting Oversight Board has
        defined
        a material weakness as a "significant deficiency or combination of significant
        deficiencies that results in more than a remote likelihood that a material
        misstatement of the annual or interim financial statements will not be prevented
        or detected."
 
 Remediation
        of Material Weaknesses
 
 We
        have
        formulated a program to remedy the material weaknesses identified above.
        In the
        first phase of the program, already completed as of March 31, 2006, we have
        hired a Controller and a Senior Accountant to augment our accounting, financial
        reporting and financial control function in our finance department.
 
 In
        the
        second phase of the program, we expect to (i) increase our auditor’s review work
        quarterly, as well as, increase the areas reviewed and discusses with the
        audit
        committee and auditors beforehand, on any changes in accounting principles
        or
        revenue or expense recognition. Specifically, we plan to implement the following
        remediation measures relating to the identified material
        weaknesses:
 
 1.
        Ineffective controls over revenue recognition.
 
 Our
        remediation measures relating to revenue recognition includes a review by
        management of revenue items other than normal fees earned such as surcharge
        and
        interchange including a regular review of the accounts receivable aging.
 
 2.
        Ineffective controls over depreciation.
 
 Subsequent
        to the errors that resulted in audit adjustments, the Company has set up
        a
        tracking system to follow the final production periods when software is
        completed and will include a review by management of depreciable items. Also,
        the Company has ceased its software development subsidiaries as of December
        31,
        2005 and does not plan to change any software depreciation.
 
 3.
        Ineffective controls over internally developed software.
 
 The
        Company has set up a tracking system to follow the development, testing,
        implementation and final production periods when the software is completed
        and
        will include a review by management of internally developed items.
 
 We
        plan
        to complete our remediation program during the second and third quarters
        of
        fiscal 2006. The material weaknesses will not be considered remediated until
        the
        applicable remedial controls operate for a sufficient period of time and
        management has concluded, through testing, that these controls are operating
        effectively.
 
 Changes
        in Internal Controls Over Financial Reporting
 
 Except
        as
        set forth above, there have been no changes in our internal control over
        financial reporting that occurred during the three month period ended June
        30,
        2005 that have materially affected, or are reasonably likely to materially
        affect, our internal control over financial reporting.
  20
  
 
 PART
        II -
        OTHER INFORMATION
 
 
 Item
        1.
        Legal Proceedings
 
 From
        time
        to time, the Company is a party to litigation or other legal proceedings
        that it
        considers to be a part of the ordinary course of its business. The Company
        is
        not involved currently in legal proceedings that could reasonably be expected
        to
        have a material adverse effect on its business, prospects, financial condition
        or results of operations except as set forth below. We may become involved
        in
        material legal proceedings in the future.
 
 Item
        2.
        Unregistered Sale of Equity Securities and Use of Proceeds
 
 None.
 
 Item
        3.
        Defaults Upon Senior Securities.
 
 None.
 
 Item
        4.
        Submission of Matters to a Vote of Security Holders.
 
 On
        May
        12, 2005 the Company held its annual shareholders meeting. The following
        items
        were discussed and voted upon:
 
 ·
              Elected
                  six members to the Board of Directors; Messrs. Michael Dodak, David
                  Fann,
                  Georg Hochwimmer, Donald Headlund, Lock Ireland and Robert
                  Landis.
 
 ·
              Approved
                  the 2004 Stock Incentive Plan (the "2004 Incentive Plan") and authorized
                  10,500,000 shares of Common Stock for issuance,
                  thereunder.
 
 ·
              Ratified
                  the selection of Weinberg & Company, P.A. as our independent auditors
                  for the fiscal year ending December 31,
                  2004
 
 Item
        5.
        Other Information.
 
 Changes
        in Registrant's Certifying Accountant.
 
 On
        June
        20, 2005, the Company notified Weinberg & Company, P.A. ("Weinberg"), its
        independent public accountants, that it was dismissing its services, effective
        as of that date. Further, on June 23, 2005, the Company engaged Kirkland,
        Russ,
        Murphy & Tapp, P.A. ("Auditor") as its principal independent accountant.
        This decision to engage Auditor was taken upon the unanimous approval of
        the
        Board of Directors of the Company.
 
 During
        the last two fiscal years ended December 31, 2004 and December 31, 2003 and
        through June 20, 2005, (i) there were no disagreements between the Company
        and
        Weinberg on any matter of accounting principles or practices, financial
        statement disclosure or auditing scope or procedure which, if not resolved
        to
        the satisfaction of Weinberg would have caused Weinberg to make reference
        to the
        matter in its reports on the Company's financial statements, and (ii) Weinberg's
        report on the Company's financial statements did not contain any adverse
        opinion, disclaimer of opinion, or modification or qualification of opinion.
        During the last two most recent fiscal years ended December 31, 2004 and
        December 31, 2003 and through June 20, 2005, there were no reportable events
        as
        the term described in Item 304(a)(1)(iv) of Regulation S-B.
  21
  During
        the two most recent fiscal years and through June 23, 2005 the Company has
        not
        consulted with Auditor regarding either:
 
 1.
              the
                  application of accounting principles to any specified transaction,
                  either
                  completed or proposed, or the type of audit opinion that might
                  be rendered
                  on the Company's financial statements, and neither a written report
                  was
                  provided to the Company nor oral advice was provided that Auditor
                  concluded was an important factor considered by the Company in
                  reaching a
                  decision as to the accounting, auditing or financial reporting
                  issue;
                  or
 
 2.
              any
                  matter that was either subject of disagreement or event, as defined
                  in
                  Item 304(a)(1)(iv)(A) of Regulation S-B and the related instruction
                  to
                  Item 304 of Regulation S-B, or a reportable event, as that term
                  is
                  explained in Item 304(a)(1)(iv)(A) of Regulation
                  S-B.
 
 The
        Company has received from Weinberg a letter addressed to the Securities and
        Exchange Commission stating it agrees with the above statements.
 
 Appointment
        of Robert Pearson to the Board of Directors
 
 On
        May
        12, 2005, the Board of Directors of Global Axcess Corp. (the "Company") voted
        to
        appoint Robert C. Pearson as a director of the Company. There are no
        understandings or arrangements between Mr. Pearson and any other person pursuant
        to which Mr. Pearson was selected as a director. Mr. Pearson presently does
        not
        serve on any Company committee. Mr. Pearson may be appointed to serve as
        a
        member of a committee although there are no current plans to appoint Mr.
        Pearson
        to a committee as of the date hereof. Mr. Pearson does not have any family
        relationship with any director, executive officer or person nominated or
        chosen
        by the Company to become a director or executive officer. Additionally, Mr.
        Pearson has never entered into a transaction, nor is there any proposed
        transaction, between Mr. Pearson and the Company.
 
 Robert
        C.
        Pearson, age 69, joined RENN Capital Group in April 1997 and is Senior
        Vice-President - Investments. RENN Capital Group serves as investment adviser
        for Renaissance Capital Growth & Income Fund III, Inc., Renaissance U.S.
        Growth Investment Trust PLC, and BFS U.S. Special Opportunities Trust PLC,
        which
        each individually own approximately 5% of the Company's outstanding common
        stock
        of the Company as well as common stock purchase warrants.
 
 Amendment
        to Articles of Incorporation
 
 The
        Company filed a Certificate of Amendment to its Certificate of Incorporation
        ("Amendment") with the Secretary of State of the State of Nevada that was
        effective April 28, 2005. The Amendment was filed to effect a reverse split
        of
        the issued and outstanding common shares of the Company whereby every five
        shares of common stock held were exchanged for one share of common stock.
        Any
        shareholder that holds a fractional shares as a result of the reverse split
        will
        receive a cash payment in lieu of a fractional share. As a result, the issued
        and outstanding shares of common stock were reduced from 90,999,755 prior
        to the
        reverse split to 18,199,951 following the reverse stock split.
 
 In
        addition, the authorized capital of the Company was also reduced as a result
        of
        the Amendment whereby the Company currently has 45,000,000 shares of common
        stock and 5,000,000 shares of preferred stock authorized.
 
  22
  Item
        6.
        Exhibits.
 
 Exhibit
        Description
 
 3.1
              Amendment
                  to the Certificate of Incorporation (incorporated by reference
                  to the Form
                  8-K Current Report filed with the SEC on May 3,
                  2005)
 
 31.1
              Certification
                  of the Chief Executive Officer of Global Axcess Corp pursuant to
                  Section
                  302 of the Sarbanes-Oxley Act of
                  2002.
 
 31.2
              Certification
                  of the Chief Financial Officer of Global Axcess Corp pursuant to
                  Section
                  302 of the Sarbanes-Oxley Act of
                  2002.
 
 32.1
              Certification
                  of the Chief Executive Officer of Global Axcess Corp pursuant to
                  Section
                  906 of the Sarbanes-Oxley Act of
                  2002.
 
 32.2
              Certification
                  of the Chief Financial Officer of Global Axcess Corp pursuant to
                  Section
                  906 of the Sarbanes-Oxley Act of
                  2002.
 
  23
  SIGNATURES
 
 Pursuant
        to the requirements of the Securities Exchange Act of 1934, as of May 24,
        2006
        the Issuer has duly caused this report to be signed on its behalf by the
        undersigned, thereunto duly authorized.
 
  GLOBAL
                AXCESS
                CORP.By:
              /s/ MICHAEL
                DODAKMichael
                DodakChief
                Executive Officer
 
 Pursuant
        to the requirements of the Securities Exchange Act of 1934, this report has
        been
        signed below by the following persons on behalf of the Issuer and in the
        capacities indicated on the 24th day of May, 2006.
  Signature
                
                Title/s/Michael
                  DodakMichael
                    Dodak
                
                CEO,
                    Chairman/s/David
                    FannDavid
                    Fann
                
                President,
                    Secretary and Director/S/
                    Lock IrelandLock
                    Ireland
                
                Director/S/
                    Robert LandisRobert
                    Landis
                
                Director/S/
                    Joseph LoughryJoseph
                    Loughry
                
                Director/S/
                    Al RossiterAl
                    Rossiter
                
                Director/S/
                    David J. SuretteDavid
                    J. Surette
                
                Chief
                    Financial Officer, Chief Accounting
                    Officer
 
  24