**UNITED
        STATES**
 **SECURITIES
        AND EXCHANGE COMMISSION**
 **WASHINGTON,
        D.C. 20549**
  
 
 **FORM
        10-QSB/A**
 
 (MARK
        ONE)
 
 x QUARTERLY
        REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT
        OF
        1934
 
 FOR
        THREE
        MONTH PERIOD ENDED NOVEMBER 30, 2007
 
 OR
 
 o TRANSITION
        REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT
        OF
        1934
 
 COMMISSION
        FILE NUMBER: 001-15783
  
 
 CASH
        TECHNOLOGIES, INC.
 (Exact
        name of registrant as specified in its charter)
 
 DELAWARE
              95-4558331(State
                  or other jurisdiction of incorporation
                organization)
              (IRS
                  Employer Identification No.)
 
 1434
                  W. 11THSTREET,
                  LOS ANGELES, CA
              90015(Address
                  of principal executive offices)
              (Zip
                  Code)
 
 (213)
        745-2000
 (Registrant's
        telephone number, including area code)
  
 
 Indicate
        by check mark whether the registrant (1) has filed all reports required to
        be
        filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
        the
        preceding 12 months (or for such shorter period that the registrant was required
        to file such reports), and (2) has been subject to such filing requirements
        for
        the past 90 days. Yes x No o .
 
 
 Indicate
        the number of shares outstanding of each of the registrant's classes of common
        stock, as of the latest practicable date.
 
 On
        January 14, 2008, there were 24,753,726shares of common stock, $ .01 par value per share, issued and
        outstanding.
 
 Indicate
        by check mark whether the registrant is a shell company (as defined in Rule
        12b-2 of the Exchange Act)
 Yes o No x
  
  **CASH
        TECHNOLOGIES, INC.**
 **FORM
        10-QSB**
 
 **INDEX**
 
 **PAGE
                  NO.****PART
                  I. FINANCIAL INFORMATION**Item
                  1.
              Condensed
                  Consolidated Financial Statements:Condensed
                  Consolidated Balance Sheets as of November 30, 2007 (unaudited)
                  andMay
                  31, 2007
              
              **3**Condensed
                  Consolidated Statements of Operations for the three and six-monthperiods
                  ended November 30, 2007 and November 30, 2006 (unaudited)
              
              **4**Condensed
                  Consolidated Statements of Cash Flows for the three and six-monthperiods
                  Ended November 30, 2007 and November 30, 2006 (unaudited)
              
              **5**Notes
                  to Condensed Consolidated Financial Statements for the three and
                  six-monthperiods
                  ended November 30, 2007 and November 30, 2006 (unaudited)
              
              **6**Item
                  2.
              Management's
                  Discussion and Analysis of Financial Condition,Results
                  of Operations, and Risk Factors
              
              **12**Item
                  3.
              Controls
                  And Procedures
              
              **25****PART
                  II. OTHER INFORMATION**Item
                  1.
              Legal
                  Proceedings
              
              **26**Item
                  2.
              Unregistered
                  Sales of Equity Securities and Use of Proceeds
              
              **26**Item
                  3.
              Defaults
                  Upon Senior Securities
              
              **26**Item
                  4.
              Submission
                  of Matters to a Vote of Security Holders
              
              **26**Item
                  5.
              Other
                  Information
              
              **26**Item
                  6.
              Exhibits
                  and Reports on Form 8-K
              
              **27**SIGNATURES
              
              **28**
  2
  **PART
        I**
 
 **ITEM
        1. FINANCIAL STATEMENTS**
  **CASH
                  TECHNOLOGIES, INC. AND SUBSIDIARIES****CONDENSED
                  CONSOLIDATED BALANCE SHEETS**
 **(UNAUDITED)**
  **NOVEMBER
                    30,**
                  **2007**
              
              **MAY
                    31,**
                  **2007****(Unaudited)****ASSETS**CURRENT
                  ASSETS:Cash
                  and cash equivalents
              
              $
              277,892
              
              $
              1,107,649Accounts
                  receivable
              
              
              40,177
              
              
              29,853Prepaid
                  expenses and other current assets
              
              
              215,627
              
              
              194,627Other
                  receivable (net of allowance $50,000)
              
              
              173,978
              
              
              163,551Assets
                  of discontinued operationsCash
              
              
              41
              
              
              41Accounts
                  receivable
              
              
              90,670
              
              
              192,360Prepaid
                  expenses and other current assets
              
              
              263,076
              
              
              263,076Inventory
                  (net of allowance $121,000)
              
              
              121,690
              
              
              121,690Property
                  and equipment, netNote
                  receivable
              
              
              
              
              
              1,387,500Other
                  assets
              
              
              18,230
              
              
              18,230Total
                  assets of discontinued operations
              
              
              **493,707**
              
              
              **1,982,897**Total
                  Current Assets
              
              
              **1,201,381**
              
              
              **3,478,577**CoinBank
                  machines held for sale (Note 1)
              
              
              609,890
              
              
              609,890PROPERTY
                  AND EQUIPMENT (net)
              
              
              29,149
              
              
              26,823NOTES
                  RECEIVABLE
              
              
              
              
              
              6,879,045CDHC
                  PREFERRED STOCK
              
              
              480,481
              
              
              900,901CLAIMREMEDI
                  PREFERRED STOCK
              
              
              3,500,000
              
              
              3,500,000BIPS
                  PREFERRED STOCK
              
              
              
              
              
              2,000,000OTHER
                  ASSETS
              
              
              535,295
              
              
              535,295**TOTAL
                  ASSETS**
              
              **$**
              **6,356,196**
              
              **$**
              **17,930,531****LIABILITIES
                  AND STOCKHOLDERS' EQUITY (DEFICIT)**CURRENT
                  LIABILITIES:Current
                  maturities of Notes Payable (Note 5)
              
              $
              3,482,286
              
              
              3,482,286Due
                  to Officers and Directors
              
              
              8,915
              
              
              8,915Convertible
                  debt (Note 5)
              
              
              178,519
              
              
              170,519Due
                  to Shareholders (Note 4)
              
              
              526,278
              
              
              602,610Accounts
                  payable
              
              
              567,439
              
              
              1,131,497Accrued
                  liabilities
              
              
              2,807,974
              
              
              2,094,333Dividend
                  payable
              
              
              361,246
              
              
              261,246Liabilities
                  of discontinued operationsAccounts
                  payable
              
              
              725,443
              
              
              725,443Notes
                  payable
              
              
              338,834
              
              
              1,172,207Accrued
                  expenses and other current liabilities
              
              
              458,026
              
              
              492,026Total
                  liabilities of discontinued operations
              
              
              **1,522,303**
              
              
              **2,389,676**Total
                  Current Liabilities
              
              
              **9,454,960**
              
              
              **10,141,082**Long-Term
                  Notes Payable (Note 6)
              
              
              **1,442,767**
              
              
              1,134,560**TOTAL
                  LIABILITIES**
              
              
              **10,897,727**
              
              
              **11,275,642**COMMITMENTS
                  & CONTINGENCIES (Note 7)
              
              
              -
              
              
              -MINORITY
                  INTEREST
              
              
              (111,479
              )
              
              (98,639
              )MINORITY
                  INTEREST OF DISCONTINUED OPERATIONS
              
              
              -TOTAL
                  MINORITY INTEREST
              
              
              **(111,479**
              **)**
              
              **(98,639**
              **)****STOCKHOLDERS'
                  EQUITY (DEFICIT): (Note 6)**Stockholder's
                  equity of discontinued operationsAdditional
                  paid in capital
              
              
              981,667
              
              
              910,000Retained
                  Earnings (Accumulated Deficit)
              
              
              (2,010,263
              )
              
              5,249,766Total
                  stockholder's equity (deficit) of discontinued operations
              
              
              **(1,028,596**
              **)**
              
              **6,159,766**Cumulative
                  Redeemable Preferred Stock, 2,500,000 shares authorized,647,715
                  and 647,515 shares issued and outstanding at November 30, 2006
                  and May 31,
                  2006
              
              
              10,875,811
              
              
              10,875,811Common
                  Stock, $0.01 par value, 65,000,000 shares authorized,23,631,164
                  and 23,035,964 issued and outstanding at November 30, 2006 and
                  May 31,
                  2006
              
              
              367,782
              
              
              366,876Additional
                  Paid-In-Capital
              
              
              40,262,951
              
              
              40,177,546Accumulated
                  Deficit
              
              
              (54,908,000
              )
              
              (50,826,471
              )**Total
                  stockholders' equity (deficit)**
              
              
              **(4,430,052**
              **)**
              
              **6,753,528****TOTAL
                  LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)**
              
              **$**
              **6,356,196**
              
              **$**
              **17,930,531**
  See
                  notes to consolidated financial
                  statements
  3
 **CASH
        TECHNOLOGIES, INC. AND SUBSIDIARIES**
 **CONDENSED
                  CONSOLIDATED STATEMENTS OF OPERATIONS**
 **(UNAUDITED)**
  **THREE
                            MONTH PERIOD**
                        
                        **SIX
                            MONTH PERIOD****ENDED
                            NOVEMBER 30,**
                        
                        **ENDED
                            NOVEMBER 30,****2007**
                        
                        **2006**
                        
                        **2007**
                        
                        **2006****(Unaudited)**NET
                            REVENUES
                        $
                        35,348
                        
                        $
                        81,782
                        
                        $
                        78,935
                        
                        $
                        116,374COST
                            OF REVENUES
                        
                        22,669
                        
                        
                        16,576
                        
                        
                        48,243
                        
                        
                        36,087GROSS
                            PROFIT (LOSS)
                        
                        12,679
                        
                        
                        65,206
                        
                        
                        30,692
                        
                        
                        80,287SELLING,
                            GENERAL, & ADMINISTRATIVE EXPENSE
                        
                        753,919
                        
                        
                        737,756
                        
                        
                        1,500,703
                        
                        
                        1,577,394IMPAIRMENT
                            OF INVESTMENT IN BIPS
                        
                        -
                        
                        
                        -
                        
                        
                        2,000,000
                        
                        
                        -GAIN
                            ON SALE OF HPS/CDHC STOCK
                        
                        (79,580
                        )
                        
                        -
                        
                        
                        (79,580
                        )
                        
                        -RESEARCH
                            AND DEVELOPMENT
                        
                        18,750
                        
                        
                        18,750
                        
                        
                        37,500
                        
                        
                        56,250DEPRECIATION
                            & AMORTIZATION EXPENSE
                        
                        406
                        
                        
                        141,135
                        
                        
                        1,160
                        
                        
                        282,201**OPERATING
                            LOSS**
                        
                        (680,816
                        )
                        
                        (832,435
                        )
                        
                        (3,429,091
                        )
                        
                        (1,835,558
                        )INTEREST
                            EXPENSE
                        
                        179,331
                        
                        
                        96,102
                        
                        
                        252,752
                        
                        
                        195,194LOSS
                            BEFORE INCOME TAXES
                        
                        (860,147
                        )
                        
                        (928,537
                        )
                        
                        (3,681,843
                        )
                        
                        (2,030,752
                        )INCOME
                            TAXES
                        
                        -
                        
                        
                        -
                        
                        
                        -
                        
                        
                        2,400MINORITY
                            INTEREST (Note 13)
                        
                        (6,291
                        )
                        
                        (6,485
                        )
                        
                        (12,840
                        )
                        
                        (12,537
                        )NET
                            INCOME (LOSS) FROM CONTINUING OPERATIONS
                        **$**
                        **(853,856**
                        **)**
                        **$**
                        **(922,052**
                        **)**
                        **$**
                        **(3,669,003**
                        **)**
                        **$**
                        **(2,020,615**
                        **)**DISCONTINUED
                            OPERATIONSNET
                            REVENUES
                        $
                        -
                        
                        $
                        954,300
                        
                        $
                        -
                        
                        $
                        2,786,201FORGIVENESS
                            OF DEBT
                        
                        -
                        
                        
                        
                        
                        
                        -COST
                            OF REVENUES
                        
                        -
                        
                        
                        (991,385
                        )
                        
                        -
                        
                        
                        (2,241,314
                        )SELLING,
                            GENERAL & ADMINISTRATIVE EXPENSE
                        
                        (18,579
                        )
                        
                        (707,057
                        )
                        
                        293,791
                        
                        
                        (1,318,997
                        )INTEREST
                            EXPENSE
                        
                        (13,403
                        )
                        
                        (127,746
                        )
                        
                        (35,702
                        )
                        
                        (249,620
                        )GAIN
                            FROM DISPOSITION OF SUBSIDIARY'S ASSETS
                        
                        -
                        
                        
                        1,481,468
                        
                        
                        -
                        
                        
                        1,481,468WRITE
                            OFF OF LONG OUTSTANDING ESTIMATED LIABILITIES
                        
                        312,500
                        
                        
                        -
                        
                        
                        -
                        
                        
                        -(GAIN)
                            LOSS FROM WRITE OFF OF LONG TERM NOTE
                        
                        420,545
                        
                        
                        -
                        
                        
                        (7,518,118
                        )
                        
                        -LOSS
                            FROM DISCONTINUED OPERATIONS
                        
                        701,063
                        
                        
                        609,580
                        
                        
                        (7,260,029
                        )
                        
                        457,738NET
                            INCOME (LOSS)
                        $
                        (152,793
                        )
                        $
                        (312,472
                        )
                        $
                        (10,929,032
                        )
                        $
                        (1,562,877
                        )Dividends
                            & deemed dividends
                        $
                        50,000
                        
                        $
                        55,000
                        
                        $
                        100,000
                        
                        $
                        110,000Net
                            income (loss) allocable to commonshareholders
                        $
                        (202,793
                        )
                        $
                        (367,472
                        )
                        $
                        (11,029,032
                        )
                        $
                        (1,672,877
                        )Basis
                            and diluted net income (loss) per share before extraordinary
                            income
                        
                        (0.00)
                        
                        
                        (0.01)
                        
                        
                        (0.32)
                        
                        
                        (0.05)Basis
                            and diluted net income (loss) per share for extraordinary
                            income
                        
                        (0.00)
                        
                        
                        (0.01)
                        
                        
                        (0.32)
                        
                        
                        (0.05)Basic
                            and diluted weighted average shares of common stock
                            outstanding
                        
                        34,671,863
                        
                        
                        31,974,661
                        
                        
                        34,671,863
                        
                        
                        31,974,661
 
 See
                            notes to consolidated financial
                            statements
  4
  **CASH
                    TECHNOLOGIES, INC. AND SUBSIDIARIES****CONDENSED
                    CONSOLIDATED STATEMENTS OF CASH FLOWS**
 **(UNAUDITED)**
  **November
                    30,**
                
                **November
                    30,****2007**
                
                **2006****OPERATING
                    ACTIVITIES:**Net
                    loss
                
                $
                (10,929,032
                )
                $
                (2,020,615
                )Adjustments
                    to reconcile net loss to net cash used byoperating
                    activities:Bad
                    Debt expense - discontinued operations
                
                
                7,938,663
                
                
                -Impairement
                    of investment in BIPS
                
                
                2,000,000
                
                
                -Gain
                    on sale of investment
                
                
                (79,580
                )
                
                -Minority
                    interest
                
                
                (12,840
                )
                
                (12,535
                )Amortization
                    of deemed interest expense
                
                
                10,907
                
                
                -Non-Cash
                    payment for services
                
                
                -
                
                
                105,000Amortization
                    of capitalized software
                
                
                -
                
                
                279,884Depreciation
                    expense
                
                
                1,160
                
                
                1,513Changes
                    in operating assets and liabilities:Accounts
                    receivable
                
                
                (10,323
                )
                
                (17,546
                )Prepaid
                    expenses and other current assets
                
                
                (21,000
                )
                
                (8,641
                )Other
                    receivable
                
                
                (10,427
                )
                
                (42,134
                )Accrued
                    interest
                
                
                47,068
                
                
                14,759Accounts
                    payable
                
                
                (564,058
                )
                
                296,281Accrued
                    expenses and other current liabilities
                
                
                713,615
                
                
                233,008Change
                    in net assets of business held for sale
                
                
                (678,634
                )
                
                -Net
                    cash used in operating activities
                
                
                (1,594,481
                )
                
                (1,171,026
                )**INVESTING
                    ACTIVITIES:**Proceeds
                    from sale of investment
                
                
                500,000
                
                
                -Purchase
                    of property and equipment
                
                
                (3,486
                )-Net
                    cash provided by (used in) investing activities
                
                
                496,514
                
                
                -**FINANCING
                    ACTIVITIES:**Net
                    proceeds from issuance of preferred stock
                
                
                -
                
                
                200,000Proceeds
                    from Long-term debt
                
                
                260,000
                
                
                323,084Repayments
                    on short-term debt
                
                
                (78,100
                )
                
                -Proceeds
                    from sale of common stock
                
                
                86,310
                
                
                584,100Net
                    cash provided by financing activities
                
                
                268,210
                
                
                1,107,184**CHANGE
                    IN CASH AND CASH EQUIVALENTS**
                
                
                (829,757
                )
                
                (63,842
                )Cash
                    and Cash Equivalents, Beginning of Period
                
                
                1,107,649
                
                
                81,355Cash
                    and Cash Equivalents, End of Period
                
                $
                277,892
                
                $
                17,513**SUPPLEMENTAL
                    DISCLOSURE OF CASH FLOW INFORMATION**Income
                    taxes
                
                $
                -
                
                $
                2,400**SUPPLEMENTAL
                    DISCLOSURE OF NONCASH TRANSACTIONS**Gain
                    (Loss) on operations of discontinued operations
                
                $
                (7,492,949
                )
                $
                457,738Dividends
                    declared on preferred stock
                
                $
                100,000
                
                $
                110,000Non-cash
                    payment for services
                
                $
                -
                
                $
                105,000
  5
 **CASH
        TECHNOLOGIES, INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
 
 **NOTE
        1:**  **GENERAL**
 
 GOING
        CONCERN:
 
 We
        have
        prepared the financial statements included in this Form 10-QSB assuming that
        we
        will continue as a going concern. Although we have raised additional capital
        since our initial public offering in July 1998, we have never generated
        sufficient revenue-producing activities to sustain our operations. Accordingly,
        we must raise significant capital to fund current operations and to repay
        existing debt. Our auditors have included an explanatory paragraph in their
        report for the year ended May 31, 2007, indicating there is substantial doubt
        regarding our ability to continue as a going concern. The accompanying
        consolidated financial statements do not include any adjustments that might
        result from the outcome of any uncertainty.
 
 PRESENTATION
        OF INTERIM INFORMATION:
 
 In
        the
        opinion of the management of Cash Technologies, Inc. (“Cash Tech” or the
        "Company"), the accompanying unaudited condensed consolidated financial
        statements include all normal adjustments considered necessary to present
        fairly
        the financial position as of November 30, 2007 and the results of operation
        and
        cash flows for the three and six-month periods ended November 30, 2007 and
        November 30, 2006. Interim results are not necessarily indicative of results
        to
        be expected for any subsequent quarter or for the entire fiscal year.
 
 The
        condensed consolidated financial statements and notes are presented as permitted
        by Form 10-QSB. These condensed financial statements have been prepared by
        the
        Company pursuant to the rules and regulations of the Securities and Exchange
        Commission (the "SEC"). Certain information and footnote disclosures, normally
        included in financial statements prepared in accordance with generally accepted
        accounting principles, have been omitted pursuant to such SEC rules and
        regulations. These financial statements should be read in conjunction with
        the
        Company's audited financial statements and the accompanying notes included
        in
        the Company's Form 10-KSB for the year ended May 31, 2007, filed with the
        SEC.
        The results of operations for the three-month period ended November 30, 2007,
        are not necessarily indicative of the results to be expected for any subsequent
        quarter or for the entire fiscal year.
 
 The
        research and development of new software products and enhancements to existing
        software products were expensed as incurred (and recorded in the consolidated
        statement of operation) until technological feasibility has been established.
        Technological feasibility is established upon completion of a detailed program
        design or working model. Amortization of the capitalized software commenced
        on
        January 1, 2002. As of May 31, 2007, capitalized software costs had been
        fully
        amortized . Technological feasibility was achieved in September of 1999 and
        commencing October 1, 1999 all expenses related to EMMA software development
        had
        been capitalized. As of December 31, 2001, we had capitalized $2,771,536
        in
        development and related costs. The EMMA product was available for release
        to the
        public in January 2002 thus all development costs since have been expensed
        including $18,750 and $37,500 for the three months ended November 30, 2007
        and
        2006, respectively, and $93,750 and $150,000 for the fiscal years ended May
        31,
        2007 and May 31, 2006 respectively.
 **Recent
          Accounting Pronouncements**
  In
          September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (“SFAS
          157”). SFAS 157 defines fair value, establishes a framework for measuring fair
          value and expands disclosure of fair value measurements. SFAS 157 applies
          under
          other accounting pronouncements that require or permit fair value measurements
          and, accordingly, does not require any new fair value measurements. SFAS
          157 is effective for financial statements issued for fiscal years beginning
          after November 15, 2007 .
          We do not believe that the adoption of SFAS 157 will have a significant
          effect
          on our consolidated financial statements.
 
 In
          February 2007, the Financial Accounting Board (FASB) issued SFAS No. 159,
“The
          Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”)
          which permits entities to choose to measure many financial instruments
          and
          certain other items at fair value that are not currently required to be
          measured
          at fair value. SFAS 159 is effective for financial statements issued for
          fiscal
          years beginning after November 15, 2007. We are currently evaluating the
          impact
          of adopting SFAS 159 may have on our financial condition or results of
          operations.
 
 In
          June 2007, the Emerging Issues Task Force of the FASB issued EITF Issue
          no.
          07-3, *Accounting forNonrefundable Advance Payments for Goods or Services to be
          Used in
          Future Research and Development Activities* , (“EITF 07-3”) which is effective for fiscal years beginning after December 15,
          2007.  EITF 07-3 requires that nonrefundable advance payments for
          future research and development activities be deferred and
          capitalized.  Such amounts will be recognized as an expense as the
          goods are delivered or the related services are performed.  The
          Company does not expect the adoption of EITF 07-3 to have an impact on
          the
          financial results of the Company.
  In
          December 2007, the FASB issued SFAS No. 141(R), *Business Combinations* (“SFAS No. 141(R)”), which requires the Company to record fair value estimates
          of contingent consideration and certain other potential liabilities during
          the
          original purchase price allocation, expense acquisition costs as incurred
          and
          does not permit certain restructuring activities previously allowed under
          Emerging Issues Task Force Issue No. 95-3 to be recorded as a component
          of
          purchase accounting. SFAS
          141(R) is effective for financial statements issued for fiscal years beginning
          after December 15, 2008 .
            The Company has not determined the effect that the adoption of SFAS
          No. 141(R) will have on its consolidated financial statements, but the
          impact
          will be limited to any future acquisitions beginning in the Company’s fiscal
          year 2010.
  In
          December 2007, the FASB issued SFAS No. 160, *Noncontrolling Interests in Consolidated Financial Statements—an amendment of
          ARB No. 51* , (“SFAS No. 160”), which causes noncontrolling interests in subsidiaries to be
          included in the equity section of the balance sheet.  SFAS 160 is
          effective for financial statements issued for fiscal years beginning after
          December 15, 2008.  The Company has not determined the effect that the
          adoption of SFAS No. 160 will have on its consolidated financial
          statements.
 IMPAIRMENT
        OF BIPS
 
 During
        the six months ended November 30, 2007, management concluded that due to
        adequate quarterly data no longer being available, that the resulting
        uncertainty requires us to take a 100% reserve on the BIPS investment. Although
        we believe that our investment in BIPS has the potential for returns previously
        indicated, we have concluded that we can no longer support the value of the
        investment under FSP 115-1.
 6
  **NOTE
        2. COMMITMENTS AND CONTINGENCIES**
 
 In
        2001
        we delivered stock certificates representing 700,000 shares to an escrow
        agent
        as collateral for a loan. The loan was never consummated, and in May 2001
        we
        notified the transfer agent to cancel the shares. Thereafter the escrow agent,
        an attorney, died and we were never able to recover the certificates. In
        August,
        2004 it came to our attention that a party was attempting to transfer 450,000
        of
        the 700,000 shares. We immediately initiated a lawsuit in New York to prevent
        the transfer of the shares and have them retired. In December, 2004, we reached
        a settlement in which the shares would be returned to us without any exchange
        of
        money. We intend to similarly pursue the recovery of the remaining 250,000
        shares, however in the event that we cannot achieve a satisfactory outcome
        in
        such effort, or in the event that the pending settlement is not consummated
        for
        any reason, some or all of these shares may be treated as outstanding and
        our
        Stockholders' Equity line item would have to be adjusted to reflect such
        additional shares.
  **NOTE
        3: STOCKHOLDERS EQUITY**
  NONE
  **NOTE
        4: RELATED PARTY TRANSACTIONS**
 
 As
        of
        November 30, 2007, we were in arrears of $412,577 for the salary to Mr. Korman,
        and owed $183,305 in accrued rent for our offices to a company in which Mr.
        Korman has a beneficial interest.
 
 During
        the month of July 2006, Edmund King, the Chief Financial Officer, loaned
        the
        company $50,000 and Bruce Korman, Chief Executive Officer, $25,000,
        respectively. As of August 31, 2007, these loans have been paid in full.
 
 **NOTE
        5: NOTE PAYABLE**
 
 In
        1997,
        we entered into a credit agreement with G.E. Capital Corporation, or G.E.
        Capital, pursuant to which we borrowed $ 5,500,000 for the purchase of CoinBank
        component equipment, working capital and general corporate purposes. Due
        to our
        inability to repay G.E. Capital on the original terms, on September 29, 2000
        we
        entered into the first of several loan modifications with G.E. The most recent
        modification requires the entire unpaid balance to be paid at
        maturity on March 1, 2008. We do not have sufficient capital to repay this
        debt. We have no current plan or   capability to repay G.E. its principal.
        We believe from discussions with GE that we can negotiate a renewal of the
        note
        on acceptable terms, however, there is no assurance that this will occur. A
        default of this obligation or failure to negotiate a renewal could result
        in the
        delisting and/or bankruptcy of the Company. As of November 30, 2007,
        we owed G.E. Capital $3,683,045, which includes the principal, financing
        fees
        and unpaid interest.
 
 **NOTE
        6: CONVERTIBLE DEBT**
 
 In
        January 2000, we completed a private placement offering of convertible notes
        and
        warrants under Section 4(2) of the Securities Act of 1933. The offering
        consisted of units, each unit comprised of a secured convertible promissory
        note
        in the principal amount of $50,000, bearing interest at the rate of 10% per
        annum and Series B Redeemable Warrants to purchase 5,000 shares of common
        stock.
        GunnAllen Financial, Inc., one of our investment bankers and an underwriter
        in
        our initial public offering, was engaged as placement agent for this offering.
        We received gross proceeds from this offering of $3,362,000 from the sale
        of
        67.2 Units. As a result of this offering, we issued notes in the aggregate
        principal amount of $3,362,000 and 336,200 Series B common stock Purchase
        Warrants The notes were originally convertible into our common stock at the
        conversion rate of $9.50 per share. The Series B Warrants were originally
        exercisable at a price of $13.00 per share. The notes were originally due
        and
        payable on July 31, 2001. The notes were secured by a first priority lien
        on all
        of our assets.
  7
  Since
        July 31, 2001, 41 out of 48 noteholders have converted their notes to equity
        at
        a conversion price of $2.50 per share. Noteholders who converted to equity
        also
        received two replacement warrants exercisable at $1.35 per share for each
        warrant previously held. An additional noteholder has converted $120,876
        of his
        note for 151,095 common shares. On March 31, 2007, another noteholder agreed
        to
        a new $62,833 note bearing interest at the rate of 10% per annum and due
        and
        payable on January 31, 2008, replacing the old note. Another 4 notes
        totaling $311,250 as of May 31, 2007, were canceled due to the expiration
        of the
        statute of limitations. The remaining outstanding note is in default of the
        original or restructured terms.
 
 As
        of
        November 30, 2007, we owed $90,680 in principal and interest to the remaining
        noteholder. There can be no assurance that we will be able to pay the remaining
        noteholder when the note is due and that the noteholder will not declare
        an
        event of default and demand immediate payment or seek to attach our assets,
        including our EMMA technology. (See Risk Factors).
 
 In
        May
        2003 we completed a private placement offering with one of our stockholders
        consisting of convertible notes and warrants under Section 4(2) of the
        Securities Act of 1933. The offering consisted of an unsecured convertible
        promissory note in the principal amount of $20,750, bearing interest at the
        rate
        of 5% per annum and redeemable warrants to purchase 30,000 shares of common
        stock. The note is convertible into our common stock at the conversion rate
        of
        $0.50 per share. The Warrants are exercisable at a price of $0.65 per share.
        We
        also reduced the exercise price of 45,000 Series B warrants owned by the
        stockholder from $4.50 to $0.65 per share which were converted immediately
        for
        gross proceeds to us of $29,250. The note is due and payable on May 8, 2008.
        A
        deemed dividend expense of $25,901 was recognized in conjunction with the
        warrants offered in this placement.
 
 On
        May
        22, 2007 we completed a private placement consisting of a convertible note,
        common stock and common stock warrants. The total placement was for $1,500,000
        and consisted of:
  ·
                a
                    6% interest 3 year convertible note for $1,200,000 with a conversion
                    price
                    of $1.05 per share,
 ·
                $300,000
                    of common stock at $0.80 per share, or 375,000 shares of common
                    stock,
  ·
                common
                    stock purchase warrants to purchase 759,000 shares of common
                    stock at
                    $1.75 per share
 
 In
        November of 2007 we completed a private placement consisting of **** a
        convertible note, common stock and common stock warrants. The total placement
        was for $260,000 and consisted of:
  ·
                a
                    6% interest 3 year convertible note for $260,000 with a conversion
                    price
                    of $0.85 per share,
 **NOTE
        7: STOCK BASED COMPENSATION**
 
 Prior
        to
        June 1, 2006, the Company accounted for employee stock-based compensation
        using
        the intrinsic value method supplemented by pro forma disclosures in accordance
        with APB 25 and SFAS 123 “Accounting for Stock-Based Compensation” (“SFAS 123”),
        as amended by SFAS No.148 “Accounting for Stock-Based Compensation—Transition
        and Disclosures.” Under the intrinsic value based method, compensation cost is
        the excess, if any, of the quoted market price of the stock at grant date
        or
        other measurement date over the amount an employee must pay to acquire the
        stock. Under the intrinsic value method, the Company has recognized stock-based
        compensation common stock on the date of grant.
  8
  Effective
        June 1, 2006 the Company adopted SFAS 123(R) using the modified prospective
        approach and accordingly prior periods have not been restated to reflect
        the
        impact of SFAS 123(R). Under SFAS 123(R), stock-based awards granted prior
        to
        its adoption will be expensed over the remaining portion of their vesting
        period. These awards will be expensed under the accelerated amortization
        method
        using the same fair value measurements which were used in calculating pro
        forma
        stock-based compensation expense under SFAS 123. For stock-based awards granted
        on or after June 1, 2006, the Company will amortize stock-based compensation
        expense on a straight-line basis over the requisite service period, which
        is
        five years.
 
 SFAS
        123(R) requires forfeitures to be estimated at the time of grant and revised,
        if
        necessary, in subsequent periods if actual forfeitures differ from initial
        estimates. Stock-based compensation expense has been recorded net of estimated
        forfeitures for such that expense was recorded only for those stock-based
        awards
        that are expected to vest. Previously under APB 25 to the extent awards were
        forfeited prior to vesting, the corresponding previously recognized expense
        was
        reversed in the period of forfeiture.
 
 SFAS
        123
        requires the Company to provide pro-forma information regarding net loss
        as if
        compensation cost for the stock options granted to the Company’s employees had
        been determined in accordance with the fair value based method prescribed
        in
        SFAS 123. Options granted to non-employees are recognized in these financial
        statements as compensation expense under SFAS 123 (See Note 11) using the
        Black-Scholes option-pricing model.
 
 For
        the
        six month period ended November 30, 2007, the fair value of option grants
        is
        estimated on the date of grant utilizing the Black-Scholes option-pricing
        model
        with the weighted average assumption for options granted during 2002-2007,
        expected life of the option is 5 years, expected volatility of 134.46%, risk
        free interest rate of 3.76% and a 0% dividend yield. No option grants occurred
        during the period.
  **NOTE
        8: SEGMENT REPORTING**
 
 We
        operate through two principal business segments: Claim-Remedi Services, Inc.,
        and CashTechCard Systems, Inc.
 
 Information
        on our business segments for the:
  **Three
                    months ended**
                
                **Six
                    months ended****November
                    30,**
                
                **November
                    30,**Net
                    revenues:
                
                **2007**
                
                **2006**
                
                **2007**
                
                **2006**ClaimRemedi/CashTechCard
                
                
                35,348
                
                
                81,782
                
                
                78,935
                
                
                116,374Unallocated
                
                
                -
                
                
                -
                
                
                -
                
                
                -35,348
                
                
                81,782
                
                
                78,935
                
                
                116,374Interest
                    expense:ClaimRemedi/CashTechCardUnallocated
                
                
                179,331
                
                
                96,102
                
                
                252,752
                
                
                195,194179,331
                
                
                96,102
                
                
                252,752
                
                
                195,194Depreciation
                    & Amortization:ClaimRemedi/CashTechCardUnallocated
                
                
                406
                
                
                141,135
                
                
                1,160
                
                
                282,201406
                
                
                141,135
                
                
                1,160
                
                
                282,201Segment
                    Income (loss):ClaimRemedi/CashTechCard
                
                
                (853,856
                )
                
                (922,052
                )
                
                (3,619,003
                )
                
                (2,020,615
                )Unallocated(853,856
                )
                
                (922,052
                )
                
                (3,619,003
                )
                
                (2,020,615
                )
  9
  **NOTE
        9: MINORITY INTEREST**
 
 For
        the
        three and six month periods ended November 30, 2007, we allocated $6,291
        and
        $12,840 of losses in CT Holdings to minority interest. For the three and
        six
        month periods ended November 30, 2006, we allocated $6,485 and $12,537 of
        losses
        in CT Holdings to minority interest.
 
 On
        November 5, 2004 TAP Holdings, LLC (dba Tomco Auto Products) acquired
        substantially all of the assets and assumed certain liabilities of TomcoAuto
        Products, Inc. On October 31, 2006 TAP Holdings, LLC sold most of its assets
        to
        Champion Parts, Inc. The sale included a transfer of all carburetor related
        inventory, trademarks, patents and sales contracts. TAP received $1.3 million
        in
        cash and up to $9.1 million in future payments, to be paid over a maximum
        of 11 years based on a percentage of combined carburetor sales by Champion,
        however, Champion has defaulted on the note as a result of its filing for
        bankruptcy protection on October 10, 2007 (see Note 10 Note
        Receivable).
  10
  **NOTE
        10: NOTE RECEIVABLE**
 
 On
        November 5, 2004 the Company's subsidiary TAP Holdings, LLC (dba Tomco Auto
        Products) acquired substantially all of the assets and assumed certain
        liabilities of TomcoAuto Products, Inc. On October 31, 2006 TAP sold most
        of its
        assets to Champion Parts, Inc. The sale included a transfer of all carburetor
        related inventory, trademarks, patents and sales contracts. TAP received
        $1.3
        million in cash and a secured promissory note for up to $9.1 million in future
        payments, to be paid over a maximum of 11 years based on a percentage of
        combined carburetor sales by Champion, however, Champion has defaulted on
        the
        note as a result of its filing for bankruptcy protection on October 10, 2007 .
 
 The
        following was submitted by Champion Parts, Inc. to the SEC on Form 8-K on
        October 10, 2007.
  “On
        Wednesday, October 10, 2007, Champion Parts, Inc., (the "Debtor"), filed
        a
        voluntary petition with the United States Bankruptcy Court for the Western
        District of Arkansas, (the "Court") under Chapter 11 of Title 11 of the United
        States Code in order that it may reorganize its financial obligations and
        capital structure (Case Nos. 4:07-bk-73253). The Debtor will file motions
        to
        continue to operate its business as "debtor-in possession" under the
        jurisdiction of the Court and in accordance with the applicable provisions
        of
        the Bankruptcy Code and orders of the Court.
  The
        Debtors have received written notice from PNC Bank, National Association,
        ("the
        Lender") its primary lender of various events of default under the loan
        covenants and agreements with the lender. Discussions with the senior lender
        resulted in its decision that the company should file for Chapter 7 liquidation
        under the applicable bankruptcy law. However the Company believes it is a
        viable
        going concern, and can succeed in the future. The lender has stated that
        it
        intends to seek an orderly liquidation of the Company. As a result, the Company
        intends to seek from the Bankruptcy Court an order allowing it to use Cash
        Collateral to remain in business and service the needs of its customers.
  There
        can
        be no assurance as to what the Bankruptcy Court will allow. If it does not
        allow
        the use of Cash Collateral, it is likely that the bank will have a Receiver
        appointed to oversee the orderly liquidation of the Company. If the Court
        allows
        the use of Cash Collateral, the Company intends to continue to sell to its
        customers and to seek to maximize the value for all its creditors and
        shareholders.
  The
        Company intends to submit its plan of reorganization subject to the approval
        of
        the Court. “
  Champion's
        bankruptcy has resulted in the default of the $9.5 million secured note owed
        by
        Champion to TAP Holdings and this required us to write-off the adjusted $7.9
        million remaining note balance. It is our intention to submit a plan to purchase
        the assets of Champion and thereby attempt to recover most or all of the
        value
        of the defaulted note.  We
        believe that the prospect of recovery is favorable, however there are
        significant challenges including negotiations with other lienholders and
        obtaining financing needed to acquire the assets.  There can be no
        assurance of success and we have therefore taken a 100% reserve against the
        remaining balance of the Champion note.
 **NOTE
        11: SUBSEQUENT EVENTS**
  As
          a
          result failing to meet the minimum continued listing standards of the AMEX,
          including the reduction in our stockholders equity below $6,000,000, we
          are
          subject to delisting in accordance with AMEX rules. We have submitted,
          and Amex
          has approved, our plan to regain compliance with the listing standards
          by March
          1, 2008, however if we do not show adequate progress on the plan, or do
          not
          complete the plan successfully, including certain events such as the
          re-acquisition of the Champion assets (see above), it is likely that Amex
          will
          move to delist our stock.
  11
  **ITEM
        2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF
        OPERATIONS**
 
 **SAFE
        HARBOR STATEMENT**
 
 *In
        addition to historical information, the information included in this Form
        10-QSB
        contains forward-looking statements within the meaning of Section 27A of
        the
        Securities Act of 1933, as amended (the ''Securities Act''), and Section
        21E of
        the Securities Exchange Act of 1934, as amended (the ''Exchange Act''), such
        as
        those pertaining to the Company's capital resources, performance and results
        of
        operations. Forward-looking statements involve numerous risks and uncertainties
        and should not be relied upon as predictions of future events. Certain such
        forward-looking statements can be identified by the use of forward-looking
        terminology such as ''believes,'' ''expects,'' ''may,'' ''will,'' ''should,''
        ''seeks,'' ''approximately”, ''intends,'' ''plans,'' ''pro forma,''
        ''estimates,'' or ''anticipates'' or the negative thereof or other variations
        thereof or comparable terminology, or by discussions of strategy, plans or
        intentions. Such forward-looking statements are necessarily dependent on
        assumptions, data or methods that may be incorrect or imprecise and may be
        incapable of being realized. The following factors, among others, could cause
        actual results and future events to differ materially from those set forth
        or
        contemplated in the forward-looking statements: significant and immediate
        need
        for capital, lack of revenue, market acceptance of the Company's products,
        technological restrictions upon development, limited marketing experience,
        uncertainty of product development, including our EMMA technology, dependence
        upon new technology, need for qualified management personnel and competition.
        The success of the Company also depends upon economic trends generally,
        governmental regulation, legislation, and population changes. Readers are
        cautioned not to place undue reliance on forward-looking statements, which
        reflect management's analysis only. The Company assumes no obligation to
        update
        forward-looking statements.*
 
 **Introduction**
 
 Cash
        Technologies, Inc., is a Delaware corporation, incorporated in August 1995.
        Unless the context otherwise requires, references herein to "we," "our" or
        "Cash
        Tech" refers to Cash Technologies, Inc., and its wholly-owned and majority-owned
        subsidiaries National Cash Processors, Inc., a Delaware corporation; CoinBank
        Automated Systems, Inc., a Delaware corporation; CoinBank Automation Handels
        GmbH, organized operating in Salzburg, Austria, Cash Tech Card Systems, Inc.
        (formerly Cintelia Systems Inc.), a Delaware corporation,CT Holdings, LLC.,
        a
        Delaware corporation of which we own 86.65%, Claim-Remedi Service, Inc.
        (formerly Heuristic Technologies, Inc.), a Delaware company and TAP Holdings,
        LLC (formerly dba Tomco Auto Products), of which we own 100%. Our address
        is
        1434 West 11th Street, Los Angeles, California 90015. Our telephone number
        is
        (213) 745-2000.
  12
  Business
        Highlights
 
 Following
        are certain financial and operational accomplishments during and subsequent
        to
        FY 2007, explained in further detail throughout this document:
 
 ·
              Completed
                  $1.75 million institutional investment for working
                  capital
 
 ·
              Established
                  strategic relationships with major distribution partners in the
                  healthcare
                  industry, including the largest supplier of medical supplies in
                  the U.S.,Physician
                  Sales and Service (NASDAQ:PSSI) andAccuro
                  Healthcare Solutions, a leading healthcare software company, TriCap
                  Health
                  Group, LLC and Health Payment Systems, Inc.
 
 ·
              Rolled
                  out the first electronic pharmacy claims processing platform to
                  the U.S.
                  Air Force
 
 ·
              Completed
                  exclusive agreements with debit card distributors including TV
                  advertising
                  companyTV
                  Media LLC,
                  online Latino communityConnectados.com,
                  Birthright Israel sponsor Mayanot Institute.
 
 Our
        independent certified public accountant included an explanatory paragraph
        in its
        report for the year ended May 31, 2007, which indicated a substantial doubt
        as
        to the ability of us to continue as a going concern. This concern is primarily
        due to substantial debt service requirements and working capital needs. See
        independent certified public accountant's letter.
 
 Systems
        development expenses, marketing expenses, executive salaries and general
        and
        other administrative costs are expected to increase as we continue to develop
        and market our products. We anticipate that losses will continue for the
        near
        future. Our expenses have exceeded net revenues since inception. For the
        three-month periods ended November 30, 2007 and 2006, we incurred net income
        (losses) of approximately $(102,793) and $(312,472). For the six-month periods
        ended November 30, 2007 and 2006, we incurred net income (losses) of
        approximately $(10,879,032) and $(1,562,877) respectively.
 
 The
        research and development of new software products and enhancements to existing
        software products were expensed as incurred (and recorded in the consolidated
        statement of operation) until technological feasibility has been established.
        Technological feasibility is established upon completion of a detailed program
        design or working model. Amortization of the capitalized software commenced
        on
        January 1, 2002. As of May 31, 2007, capitalized software costs had been
        fully
        amortized . Technological feasibility was achieved in September of 1999 and
        commencing October 1, 1999 all expenses related to EMMA software development
        had
        been capitalized. As of December 31, 2001, we had capitalized $2,771,536
        in
        development and related costs. The EMMA product was available for release
        to the
        public in January 2002 thus all development costs since have been expensed
        including $93,750 for the fiscal year ended May 31, 2007 and $150,000 for
        the
        fiscal year ended May 31, 2006 .
  13
  Much
        of
        our SG&A costs are fixed in nature, therefore, as the volume of transactions
        and revenues increase, our SG&A does not increase proportionately.
 
 We
        record
        as revenue licensing and software fees as well as coin counting machine sales
        in
        accordance with generally accepted accounting principles.
 
 We
        are
        currently engaged in two principal businesses within the data processing
        industry, namely, healthcare data processing, including the sale of related
        software, and consumer financial transactions generated from the issuance
        of
        prepaid MasterCard® debit cards.
  14
  **RESULTS
        OF OPERATIONS**
 
 **THREE
        MONTHS ENDED NOVEMBER 30, 2007 COMPARED TO THE THREE MONTHS ENDED NOVEMBER
        30,
        2006.**
  *Net
          revenues* for
          the
          three-month period ended November 30, 2007 decreased to $35,348 compared
          to
          $81,782 for the same 2006 period. The decrease in net revenue is
          attributable primarily to a decrease in sales of Air Force data
          processing by our Claim-Remedi Services, Inc. subsidiary. 
Claim-Remedi's pharmacy claims processing for the Air Force began to
          decline in July, 2007, ultimately plummeting by 86% due to the
          National Provider Identification (NPI) implementation in May, 2007, for
          which the Air Force was not adequately prepared.  This resulted in
          incorrect and unrecognized NPI numbers in insurance claims which cause
          rejected
          payments.  The Air Force therefore reverted to paper-based submission
          instead of Claim-Remedi's electronic processing as paper-based forms do not
          require an NPI  until May 2008.  In December 2007, the Air Force hired
          a company to clean up the NPI numbers for all offices so they can again
          submit
          claims electronically.  Claim-Remedi Services has been told to expect
          volumes to resume no later than the end of January 2008.
  In
          addition, the Centers for Medicare and Medicaid Services (CMS) announced
          a
          moratorium for all new applications for HIPAA Eligibility Transactions
          (HETS)
          during a three month moratorium that began in November, 2007.  New
          submitter ID numbers were not being issued by CMS nationally, creating an
          industry-wide problem and preventing sales of certain Claim-Remedi Services
          products during that time.
  *Cost
          of revenues* for
          the
          three-month period ended November 30, 2007 was $22,669 compared to $16,576
          for
          the same 2006 period. The increase in cost of revenues is directly related
          to
          lower margin healthcare product sales for the quarter.
 
 *Gross
        profit* for
        the
        three months ended November 30, 2007 was $12,679 compared to $65,206 for
        the
        same period a year ago.
 
 Se *lling,
        General and Administrative* expenses
        for the three months ended November 30, 2007, decreased to $753,919 compared
        to
        $737,756 for the same three months ended November 30, 2006. These expenses
        consist primarily of wages (and wage related costs), outside contractor
        expenses, travel/promotional expenses, professional services and
        facilities/office related expenses.
 
 *Gain
        on Sale of HPS Stock* was
        $79,580 for the three-month period ended November 30, 2007 and $0 for the
        same
        period in 2006.
 
 *Research
        and development* expenses
        for the three months ended November 30, 2007 and 2006 , were $18,750.
 
 *Depreciation
        and amortization* expenses
        for the three months ended November 30, 2007, and November 30, 2006, were
        $406
        and $141,135, respectively. The decrease is due to the Capitalized Software
        asset being completely amortized in prior periods.
 
 *Interest
        expense* for
        the
        three months ended November 30, 2007 and November 30, 2006, was $179,331
        and
        $96,102, respectively the increase was due to additional interest paid to
        retire
        a secured note.
 
 *Minority
        Interest* for
        the
        three months ended November 30, 2007 and November 30, 2006, is $6,291 and
        $6,485, respectively
 
 *Loss
        from write off of long term note* for
        the
        three months ended November 30, 2007 was $(420,545 )
        compared to zero for the 2006 period. The Company wrote off a note receivable
        from Champion following notification that Champion had filed for Chapter
        11
        bankruptcy protection in the quarter ended August 31, 2007. This adjustment
        is a
        result of offsets allowed against the note.
 
 As
        a
        result of the foregoing, net income (losses) for the three months ended November
        30, 2007 and November 30, 2006, are $(152,793) and $(312,472), respectively.
  **SIX
        MONTHS ENDED NOVEMBER 30, 2007 COMPARED TO THE SIX MONTHS ENDED NOVEMBER
        30,
        2006.**
 
 *Net
          revenues* for
          the
          six-month period ended November 30, 2007 decreased to $78,935 compared
          to
          $116,374 for the same 2006 period. The decrease in net revenue is
          attributable primarily to a decrease in sales of Air Force data
          processing by our Claim-Remedi Services, Inc. subsidiary. 
Claim-Remedi's pharmacy claims processing for the Air Force began to
          decline in July, 2007, ultimately plummeting by 86% due to the
          National Provider Identification (NPI) implementation in May, 2007, for
          which the Air Force was not adequately prepared.  This resulted in
          incorrect and unrecognized NPI numbers in insurance claims which cause
          rejected
          payments.  The Air Force therefore reverted to paper-based submission
          instead of Claim-Remedi's electronic processing as paper-based forms do not
          require an NPI  until May 2008.  In December 2007, the Air Force hired
          a company to clean up the NPI numbers for all offices so they can again
          submit
          claims electronically.  Claim-Remedi Services has been told to expect
          volumes to resume no later than the end of January 2008.
  In
          addition, the Centers for Medicare and Medicaid Services (CMS) announced
          a
          moratorium for all new applications for HIPAA Eligibility Transactions
          (HETS)
          during a three month moratorium that began in November, 2007.  New
          submitter ID numbers were not being issued by CMS nationally, creating an
          industry-wide problem and preventing sales of certain Claim-Remedi Services
          products during that time.
 15
  *Cost
        of revenues* for
        the
        six-month period ended November 30, 2007 was $48,243 compared to $36,087
        for the
        same 2006 period. The increase in cost of revenues is directly related to
        lower
        margin healthcare products sold in the quarter.
 
 *Gross
        profit* for
        the
        six months ended November 30, 2007 was $30,692 compared to $80,287 for the
        same
        period a year ago.
 
 Se *lling,
        General and Administrative* expenses
        for the six months ended November 30, 2007, decreased to $1,500,703 compared
        to
        $1,577,394 for the same six months ended November 30, 2006. These expenses
        consist primarily of wages (and wage related costs), outside contractor
        expenses, travel/promotional expenses, professional services and
        facilities/office related expenses.
 
 *Gain
        on Sale of HPS Stock* was
        $79,580 for the six-month period ended November 30, 2007 and $0 for the same
        period in 2006.
 
 *Research
        and development* expenses
        for the six months ended November 30, 2007, were $37,500 compared to $56,250
        for
        the six months ended November 30, 2006.
 
 *Depreciation
        and amortization* expenses
        for the six months ended November 30, 2007, and November 30, 2006, were $1,160
        and $282,201, respectively. The substantial decrease is due to the Capitalized
        Software asset being completely amortized in prior periods.
 
 *Interest
        expense* for
        the
        six months ended November 30, 2007 and November 30, 2006, was $252,752 and
        $195,194, respectively the increase was due to additional interest paid to
        retire a secured note.
 
 *Minority
        Interest* for
        the
        six months ended November 30, 2007 and November 30, 2006, is $12,840 and
        $12,537, respectively.
 
 *Income
        Taxes* for
        the
        six months ended November 30, 2007 and November 30, 2006, is $0 and $2,400,
        respectively.
 
 *Loss
        from write off of long term note* for
        the
        six months ended November 30, 2007 was $7,518,118 compared to zero for the
        2006
        period. The Company wrote off a note receivable from Champion Parts, Inc.
        following notification that Champion has filed for Chapter 11 bankruptcy
        protection.
 
 As
        a
        result of the foregoing, net income (losses) for the six months ended November
        30, 2007 and November 30, 2006, are $(10,929,032) and $(1,562,877),
        respectively.  *Net
          revenues* for
          the
          three-month period ended November 30, 2007 decreased to $35,348 compared
          to
          $81,782 for the same 2006 period. The decrease in net revenue is
          attributable primarily to a decrease in sales of Air Force data
          processing by our Claim-Remedi Services, Inc. subsidiary. 
Claim-Remedi's pharmacy claims processing for the Air Force began to
          decline in July, 2007, ultimately plummeting by 86% due to the
          National Provider Identification (NPI) implementation in May, 2007, for
          which the Air Force was not adequately prepared.  This resulted in
          incorrect and unrecognized NPI numbers in insurance claims which cause
          rejected
          payments.  The Air Force therefore reverted to paper-based submission
          instead of Claim-Remedi's electronic processing as paper-based forms do not
          require an NPI  until May 2008.  In December 2007, the Air Force hired
          a company to clean up the NPI numbers for all offices so they can again
          submit
          claims electronically.  Claim-Remedi Services has been told to expect
          volumes to resume no later than the end of January 2008.
  In
          addition, the Centers for Medicare and Medicaid Services (CMS) announced
          a
          moratorium for all new applications for HIPAA Eligibility Transactions
          (HETS)
          during a three month moratorium that began in November, 2007.  New
          submitter ID numbers were not being issued by CMS nationally, creating an
          industry-wide problem and preventing sales of certain Claim-Remedi Services
          products during that time.
  *Net
          revenues* for
          the
          six-month period ended November 30, 2007 decreased to $78,935 compared
          to
          $116,374 for the same 2006 period. The decrease in net revenue is
          attributable primarily to a decrease in sales of Air Force data
          processing by our Claim-Remedi Services, Inc. subsidiary. 
Claim-Remedi's pharmacy claims processing for the Air Force began to
          decline in July, 2007, ultimately plummeting by 86% due to the
          National Provider Identification (NPI) implementation in May, 2007, for
          which the Air Force was not adequately prepared.  This resulted in
          incorrect and unrecognized NPI numbers in insurance claims which cause
          rejected
          payments.  The Air Force therefore reverted to paper-based submission
          instead of Claim-Remedi's electronic processing as paper-based forms do not
          require an NPI  until May 2008.  In December 2007, the Air Force hired
          a company to clean up the NPI numbers for all offices so they can again
          submit
          claims electronically.  Claim-Remedi Services has been told to expect
          volumes to resume no later than the end of January 2008.
  In
          addition, the Centers for Medicare and Medicaid Services (CMS) announced
          a
          moratorium for all new applications for HIPAA Eligibility Transactions
          (HETS)
          during a three month moratorium that began in November, 2007.  New
          submitter ID numbers were not being issued by CMS nationally, creating an
          industry-wide problem and preventing sales of certain Claim-Remedi Services
          products during that time.
 16
  **LIQUIDITY
        AND CAPITAL RESOURCES**
 
 Our
        capital requirements have been and will continue to be significant, and our
        cash
        requirements have exceeded cash flow from operations. At November 30, 2007,
        we
        had a working capital deficit of $(8,253,579) compared
        to working capital deficit of $(6,662,505) at May
        31, 2007. The large change is a direct result of a write off of the Champion
        note receivable. At November 30, 2007, we had a cash balance of approximately
        $277,892. We are in immediate need of working capital to continue our business
        and operations. To date, we have been funding our operations primarily through
        the issuance of equity in private placement transactions with existing
        stockholders or affiliates of stockholders. There can be no assurance that
        we
        will be able to continue to raise required working capital in this or any
        other
        manner.
 
 Since
        inception, we have satisfied our working capital requirements through limited
        revenues generated from operations, the issuance of equity and debt securities,
        borrowing under a line of credit and loans from our security holders. Our
        independent certified public accountant included an explanatory paragraph
        in its
        report for the year ended May 31, 2007, which indicated a substantial doubt
        as
        to our ability to continue as a going concern. This concern is primarily
        due to
        substantial debt service requirements and working capital needs.
 
 *Net
        cash used in operating activities* was
        $(1,594,481) for the six-months ended November 30, 2007 compared to $(1,171,026)
        for the six-months ended November 30, 2006. This was primarily a result of
        a
        reduction in accounts payable offset slightly by an increase in accrued
        expenses.
 
 *Net
        cash provided by investing activities* for
        the
        six-months ended November 30, 2007, was $496,514 as compared to $0 for the
        six-months ended November 30, 2006. The change was a result of the sale of
        a
        portion of our investment in HPS which provided $500,000 in cash.
 
 *Net
        cash provided by (used in) financing activities* for
        the
        six-months ended November 30, 2007, was $268,210 as compared to $1,107,184
        for
        the six-months ended November 30, 2006. The decrease was attributable to
        the net
        result of various fund raising activities.
 
 In
        1997,
        we entered into a credit agreement with G.E. Capital Corporation, or G.E.
        Capital, pursuant to which we borrowed $ 5,500,000 for the purchase of CoinBank
        component equipment, working capital and general corporate purposes. Due
        to our
        inability to repay G.E. Capital on the original terms, on September 29, 2000
        we
        entered into the first of several loan modifications with G.E. The most recent
        modification requires the entire unpaid balance to be paid at maturity on
        March
        1, 2008. We do not have sufficient capital to repay this debt. We have no
        current plan or   capability to repay G.E. its principal. As
        of November 30, 2007, we owed
        G.E.
        Capital $3,683,045, which includes the principal, financing fees and unpaid
        interest. We
        believe from discussions with GE that we can regotiate a renewal of the note
        on
        acceptable terms, however, there is no assurance that this will occur. A
        default
        of this obligation or failure to negotiate a remewal could result in the
        delisting and/or bankruptcy of the Company.
 
 In
        January 2000, we completed a private placement offering of convertible notes
        and
        warrants under Section 4(2) of the Securities Act of 1933. The offering
        consisted of units, each unit comprised of a secured convertible promissory
        note
        in the principal amount of $50,000, bearing interest at the rate of 10% per
        annum and Series B Redeemable Warrants to purchase 5,000 shares of common
        stock.
        GunnAllen Financial, Inc., one of our investment bankers and an underwriter
        in
        our initial public offering, was engaged as placement agent for this offering.
        We received gross proceeds from this offering of $3,362,000 from the sale
        of
        67.2 Units. As a result of this offering, we issued notes in the aggregate
        principal amount of $3,362,000 and 336,200 Series B common stock Purchase
        Warrants The notes were originally convertible into our common stock at the
        conversion rate of $9.50 per share. The Series B Warrants were originally
        exercisable at a price of $13.00 per share. The notes were originally due
        and
        payable on July 31, 2001. The notes were secured by a first priority lien
        on all
        of our assets.
 
 Since
        July 31, 2001, 41 out of 48 noteholders have converted their notes to equity
        at
        a conversion price of $2.50 per share. Noteholders who converted to equity
        also
        received two replacement warrants exercisable at $1.35 per share for each
        warrant previously held. An additional noteholder has converted $120,876
        of his
        note for 151,095 common shares. On March 31, 2007, another noteholder agreed
        to
        a new $62,833 note bearing interest at the rate of 10% per annum and due
        and
        payable on January 31, 2008, replacing the old note. Another 3 notes totaling
        $271,250 as of May 31, 2007, were canceled due to the expiration of the statute
        of limitations. The 2 remaining outstanding notes are in default of their
        original or restructured terms.
  17
  As
        of
        November 30, 2007, we owed $130,680 in principal and interest to the 2 remaining
        noteholders. There can be no assurance that we will be able to pay the remaining
        noteholders when the notes are due and that the noteholders will not declare
        an
        event of default and demand immediate payment or seek to attach our assets,
        including our EMMA technology. (See Risk Factors).
 
 In
        November 2004, TAP Holdings, LLC established a line of credit with BFI Business
        Finance. The maximum amount available under the line of credit is $2,000,000,
        limited to 60% of eligible accounts receivable plus 60% of eligible inventory
        up
        to $1,000,000, less any availability reserves, as defined in the loan agreement.
        Interest is payable monthly at 4.0% per annum above the prime interest rate
        (10%
        at May 31, 2005). The line of credit is collateralized by a security
        interest in TAP's accounts receivable, inventories, property and equipment
        and
        certain other assets as well as a limited personal guaranty from TAP's chairman
        (who is not an employee of Cash Technologies). TAP must also adhere to covenant
        limitations, conditions and restrictions as set forth in the loan and security
        agreement. As of November 30, 2007, there was $217,225 outstanding including
        interest.
 
 The
        outstanding balance is expected to be paid from the sale of certain assets
        of
        TAP and refunded insurance deposits.
  18
  **RISK
        FACTORS**
 
 The
        following factors, in addition to those discussed elsewhere, should be
        considered carefully in evaluating our business and us. An investment in
        our
        shares involves a high degree of risk and is suitable only for those investors
        who can bear the risk of loss of their entire investment.
 
 Risks
        Related to Our Financial Condition
 
 **We
        have limited revenues and a history of incurring losses, which has resulted
        in
        our independent accountants issuing opinions containing doubts about our
        ability
        to continue as a going concern.**
 
 We
        have
        generated limited revenues since our inception, and, while we expect to generate
        significant revenues within the next fiscal year, there is no assurance that
        we
        will be successful. For the fiscal years ended May 31, 2007 and 2006, we
        had net
        sales of $313,946 and $55,007, respectively. Virtually all of our revenues
        for
        the fiscal year ended May 31, 2005 until the quarter ending November 30,
        2006
        were derived from our TAP subsidiary; however TAP operations substantially
        ceased on October 31, 2006 with the sale of most of its assets. Our efforts
        are
        now focused on the healthcare and financial data processing products which
        are
        marketed by our Claim-Remedi Services, Inc. and CashTechCard Systems, Inc.
        subsidiaries, however revenues will be substantially lower and losses will
        continue until and unless our products are more widely sold.
 
 Prior
        to
        the fiscal year ended May 31, 2007 we have incurred losses since our inception.
        For the last two fiscal years ended May 31, 2006 and 2007, net income (losses)
        of ($5,038,392) and $(3,065,247) respectively. Net income for the fiscal
        year
        ended May 31, 2006, was derived principally from our purchase of the Tomco
        assets. In its reports accompanying our audited financial statements for
        the
        fiscal years ended May 31, 2006 and 2007, our independent auditors included
        an
        explanatory paragraph wherein they expressed substantial doubt about our
        ability
        to continue as a going concern. For the six month period ended November 30,
        2007
        we have incurred additional (losses) of $(10.929,032) which include a one
        time
        bad debt expense of $7,938,663 and a one time write off of our investment
        in
        BIPS.
 
 **We
        are unable to pay our current liabilities, and must rely on the continued
        forbearance of specific creditors to avoid bankruptcy.**
 
 As
        of
        November 30, 2007 we had outstanding current liabilities of $9,454,960, of
        which
        approximately $690,000 is not being paid as agreed. Our creditors have, to
        date,
        agreed not to accelerate on these obligations and not to foreclose on our
        assets. However, should the creditors demand immediate repayment, we would
        have
        to raise the needed funds to satisfy the obligations, possibly on unsatisfactory
        terms or failing that, we would have to consider ceasing operations
        and/or filing for bankruptcy protection.
 
 **We
        have an immediate need for capital and if we are unable to obtain the financing
        we need, our business may fail.**
 
 As
        of
        November 30, 2007, Cash Tech had working capital deficit of
        $(8,948,553 )
        and
        available cash of $277,892. Our capital requirements have been and will continue
        to be significant, and our cash requirements have exceeded cash flow from
        operations since inception. We are in immediate need of capital to continue
        to
        operate. We have been dependent on the proceeds of private placements of
        our
        debt and equity securities to satisfy our working capital requirements. We
        will
        be dependent upon the proceeds of future private placement offerings or other
        public offerings to fund our short-term working capital requirements, to
        fund
        certain marketing activities and to continue implementing our business strategy.
        There can be no assurance we will be able to raise necessary capital. To
        the
        extent that we incur indebtedness or issue debt securities, we will be subject
        to all of the risks associated with incurring indebtedness, including the
        risks
        that interest rates may fluctuate and cash flow may be insufficient to pay
        principal and interest on any such indebtedness. Any inability to obtain
        additional financing when needed could require us to significantly curtail,
        or
        possibly cease altogether, our operations. There can be no assurance that
        our
        lenders will not declare an event of default and demand immediate payment
        or
        seek to attach our assets. As of November 30, 2007, we also owe $3,683,045
        to
        General Electric Capital Corporation. In 2000, we entered into the first
        of
        several loan renewals with G.E., the most recent of which will expire on
        March
        1, 2008 at which timeall sums owing to GE are due and payable. We believe
        from
        discussions with GE that we can negotiate a renewal of the note on acceptable
        terms, however, there is no assurance that this will occur. A default
        of this obligation or failure to negotiate a renewal could result in the
        delisting and/or bankruptcy of the Company.
  19
 
 **Our
        assets serve as collateral for various loan obligations and therefore may
        not be
        available for distribution to stockholders in the event of liquidation.**
 We
          have
          previously granted security interests in all of our assets to several lenders,
          including the holder of notes in the principal and interest amount of $250,000
          issued in a placement which was completed in January 2000, General Electric
          Capital Corporation pursuant to a Master Security Agreement originally
          entered
          into in May 1997 and liens in favor of BFI Finance on all assets of TAP
          Holdings
          pursuant to
          a Loan
          and Security Agreement entered into in November, 2004.
 As
        of
        November 30, 2007, we were indebted to G.E. in the amount of approximately
        $3,683,045 including interest. As a result of the aforementioned security
        interests, creditors would be entitled to collect upon the assets prior to
        any
        distribution being available to holders of our Common Stock or Preferred
        Stock.
 
 The
        BFI
        loan is a revolving accounts receivable credit facility secured by all of
        the
        business assets of TAP Holdings, LLC as well as a limited personal guaranty
        from
        TAP's former chairman (who is not an employee of Cash Technologies). As of
        November 30, 2007 we
        owed
        BFI approximately $217,225 including interest. The outstanding balance owed
        to
        BFI is expected to be paid from the sale of certain assetes of TAP and refunded
        insurance deposits.
  **Any
        additional financing that we may obtain may substantially dilute the interests
        of our stockholders**
  To
        the
        extent that we obtain additional financing through the issuance of additional
        equity securities in the future, such issuance may involve substantial dilution
        to our then-existing stockholders.
  **Risks
        Related to TAP Holdings, LLC**
 
 **TAP’s
        revenues are entirely dependent on payments from one company**
 
 On
        October 31, 2006, TAP sold most of its assets to Champion Parts, Inc. The
        initial cash payment from Champion of $1.3 million was paid to TAP's secured
        lender. The remainder of the purchase price was in the form of a $9.1 million
        promissory note with a term of 11 years. However, on Wednesday, October 10,
        2007, Champion Parts, Inc., (the "Debtor"), filed a voluntary petition with
        the
        United States Bankruptcy Court for the Western District of Arkansas, (the
        "Court") under Chapter 11 of Title 11 of the United States Code in order
        that it
        may reorganize its financial obligations and capital structure (Case Nos.
        4:07-bk-73253). The Debtor filed motions to continue to operate its business
        as
        "debtor-in possession" under the jurisdiction of the Court and in accordance
        with the applicable provisions of the Bankruptcy Code and orders of the Court,
        however, payments on the note have ceased. We intend to acquire the assets
        of
        Champion through the bankruptcy or from parties in interest and restore the
        company, which would recover some or all of the lost value of the
        note, however there are significant challenges including negotiations
        with other lienholders and obtaining financing needed to acquire the assets
        and
        there is no assurance that we will be successful in our efforts. Failing
        to
        re-acquire these assets or other assets necessary to meet our American Stock
        Exchange listing requirements would likely cause us to be delisted from the
        Amex
        (see Amex risks below).
 
 **Risks
        Related to Our Healthcare and Prepaid Debit Card Products**
 
 **Competition
        in healthcare software and prepaid debit card products is intense.**
 
 Claim-Remedi’s
        healthcare products compete with products offered by companies that are larger,
        better known and better capitalized than Claim-Remedi. Similarly, competition
        in
        the prepaid debit card market is intense and some competitors are larger
        and
        more established than CashTechCard. Claim-Remedi and CashTechCard have taken
        steps and developed features designed to differentiate our products, however
        these steps may prove inadequate in which event the companies might have
        to
        withdraw one or more of their products which would have a material adverse
        effect on Cash Technologies.
  20
  **Claim-Remedi
        and CashTechCard are liable for the loss or misuse of personal information.**
 
 Claim-Remedi,
        CashTechCard and their affiliates have custody of, or come into contact with,
        various types of personal information about consumers, their medical records
        and
        financial transactions. The company has taken steps to safeguard such
        information and requires that its suppliers safeguard such information, however,
        in the event such safeguards fail to prevent the loss or misuse of personal
        information, the companies might be liable for any damages caused thereby.
 
 **Claim-Remedi
        and CashTechCard are substantially dependent on third parties for data
        processing and customer support.**
 
 Most
        data
        processing and customer support for Claim-Remedi’s and CashTechCard’s products
        is performed by third parties under various exclusive and non-exclusive
        contracts. This reduces infrastructure development costs and increases speed
        to
        market, however the failure of a third party to perform its duties or renew
        a
        service agreement could be materially detrimental to the companies’ operations.
 **Essential
          Agreements related to Claim-Remedi Services and CashTechCard are under
          re-negotiation**
  Claim-Remedi
          is in the process of renegotiating its licensing agreements with software
          developer Claim Remedi, Inc., which, if unsucessful, could have a material
          detrimental effect on our ability to process certain healthcare transactions
          and
          the Claim-Remedi business in general. In addition, we have been advised
          by First
          Premier Bank, the issuer of CashTechCard cards, that they are exiting the
          prepaid card business. We intend to to move our card products to a new
          bank,
          however if there is a delay or impasse in the transfer, this could prevent
          us
          from issuing prepaid debit cards.
 **Data
        processing margins generally decline as products become more mature.**
 
 Data
        processing products usually become “commoditized” as they mature, with a
        corresponding reduction in profit margins. This is caused by a number of
        factors, including: Increased competition forcing lower prices; increased
        volumes creating economies of scale which permit lower prices by competitors,
        software development costs which are eventually fully amortized also permits
        lower prices, et al. There is no assurance that Claim-Remedi can generate
        enough
        growth in its sales to outpace these market forces.
 
 **CashTechCard
        has liability for debit card losses.**
 
 Under
        CashTechCard’s agreement with its card issuing bank, CashTechCard has liability
        for losses caused by card fraud and misuse. These losses are predicted based
        on
        historical statistics and compensating reserves are maintained by the issuing
        bank, however in the event that these losses were to increase due to unexpected
        behavior of a particular card program or cardholder group, CashTechCard and
        the
        Company would be adversely affected.
 
 **Risks
        Related to Our CoinBank Machines**
 
 **Impairment
        Charge**
 
 We
        are
        currently holding for sale approximately 236 CoinBank machines which were
        manufactured when the Company was actively engaged in the sale of such
        equipment. The machines have a carrying value of approximately $609,890 at
        November 30, 2007 and May 31, 2007. We have taken an impairment charge in
        the
        fiscal year ended May 31, 2004 for the carrying value of our CoinBank machines.
        Impairment on coin machines was $154,140. The impairment was taken due to
        low
        inventory turnover for the coin machines. In future periods, while we intend
        to
        liquidate the remaining machines, additional impairment may be taken. If
        we
        conclude that such impairment exists, this could give rise to a substantial
        expense, which would increase our reported losses. For the fiscal year ended
        May
        31, 2007, we sold no machines. We have identified parties interested in
        acquiring the remaining units, although there is no assurance that such sales
        will be consummated and we may not fully recover the carrying value of our
        CoinBank machines held for sale.
  21
  **We
        may not successfully compete with our competitors.**
 
 The
        credit/debit card industry and healthcare industries are also fully developed
        markets served by large companies who are better able to finance, develop
        and
        market products than is the Company. We have attempted to differentiate our
        products from those of our competitors but competitive products aimed at
        our
        target markets could obviate the need for our products or severely limit
        our
        market penetration.
  **Changing
        industry trends may adversely effect our operations.**
  Alternatives
        to the use of cash and checks, such as credit cards and wire transfer, debit
        cards and other forms of electronic currency are increasing. Increasing use
        of
        these alternative forms of payment could reduce the need for some the Company's
        products while increasing the need for others.
  **We
        are dependent on third-party manufacturers and on independent contractors,
        whose
        nonperformance could harm our business.**
  We
        are
        substantially dependent on the ability of the independent contractors we
        hire to
        provide software engineering and support for our products. Any contractor
        that
        we utilize or may utilize may not have sufficient capacity to satisfy our
        needs
        during any period of sustained demand. The loss of services of independent
        contractors could disrupt our business. Furthermore, certain of our products
        access networks which are owned and operated by third parties. The failure
        or
        unavailability of these networks could have a material adverse effect on
        us.
 
 **We
        are subject to risks relating to our international installations and
        sales** .
  We
        are
        seeking to deploy certain products, such as debit cards, outside of the United
        States. To the extent that we are able to expand our operations and sales
        outside of the United States, we will be subject to the risks associated
        with
        international operations and sales, including economic and political
        instability, currency fluctuations, credit risks, shipping delays, customs
        duties, export quotas, foreign government regulations and other trade
        restrictions, any of which could have a significant impact on our ability
        to
        operate effectively outside of the United States or to deliver such products
        overseas to customers on a competitive and timely basis.
  **Risks
        Related to Government Regulation and Patent and Licensing matters**
  **Uncertainty
        of patent and trademark protection.**
  Although
        we have been issued U.S. Patents with respect to our CoinBank and EMMA
        technologies, there can be no assurance that these patents will afford us
        any
        meaningful protection. We intend to rely primarily on a combination of trade
        secrets, technical measures, copyright protection and nondisclosure agreements
        with our employees to establish and protect the ideas, concepts and
        documentation of software developed by us. Such methods may not afford complete
        protection, and there can be no assurance that third parties will not
        independently develop such technology or obtain access to the software we
        have
        developed. Although we believe that our use of the software we developed
        and
        other software used in our operations does not infringe upon the rights of
        others, our use of the software we developed or such other software may infringe
        upon the patents or intellectual property rights of others. In the event
        of
        infringement, we could, under certain circumstances, be required to obtain
        a
        license or modify aspects of the software we developed or such other software
        or
        refrain from using such software. We may not have the necessary financial
        resources to defend any infringement claim made against us or be able to
        successfully terminate any infringement in a timely manner, upon acceptable
        terms and conditions or at all. Failure to do any of the foregoing could
        have a
        material adverse effect on us. Moreover, if the software we developed or
        any
        other software or hardware used in our business is deemed to infringe upon
        the
        rights of others, we could, under certain circumstances, become liable for
        damages, which could have a material adverse effect on us. We received United
        States trademark registration for the "CoinBank" name in September 1997.
        Although we are not aware of any claims of infringement or other challenges
        to
        our rights to use this trademark, there can be no assurance that our marks
        do
        not or will not infringe upon the proprietary rights of others or that our
        marks
        would be upheld if challenged.
  22
  **Risks
        Related to Our Management**
  **The
        success of our business also requires that we retain other qualified management
        personnel.**
  Our
        success is also dependent upon our ability to hire and retain additional
        qualified management, marketing, technical, financial and other personnel.
        Competition for qualified personnel is intense, and there can be no assurance
        that we will be able to hire or retain additional qualified personnel. Any
        inability to attract and retain qualified management and other personnel
        would
        have a material adverse effect on us.
  **Our
        directors and officers have limited personal liability.**
  Our
        Certificate of Incorporation includes provisions to limit, to the full extent
        permitted by Delaware law, the personal liability of our directors for monetary
        damages arising from a breach of their fiduciary duties as directors. In
        addition, our By-Laws require us to indemnify any of our directors, officers,
        employees or agents to the full extent permitted by Delaware law. As a result
        of
        such provisions in our Certificate of Incorporation and the By-Laws, security
        holders may be unable to recover damages against our directors and officers
        for
        actions taken by them which constitute negligence, gross negligence or a
        violation of their fiduciary duties. This may reduce the likelihood of security
        holders instituting derivative litigation against directors and officers
        and may
        discourage or deter security holders from suing our directors, officers,
        employees and agents for breaches of their duty of care, even though such
        an
        action, if successful, might otherwise benefit us and our security holders.
  **Risks
        Related to our Common Stock**
 
 **If
        our common stock is delisted from the American Stock Exchange, we also are
        likely to be subject to the risks relating to penny stocks.**
  Our
        common stock has not been traded above $5.00 in over seven years. If our
        common
        stock were to be delisted from trading on the American Stock Exchange and
        the
        trading price of the common stock remained below $5.00 per share, trading
        in our
        common stock would be subject to the requirements of certain rules promulgated
        under the Exchange Act related to so-called penny stocks. A penny stock is
        defined generally as any non-exchange listed equity security that has a market
        price of less than $5.00 per share, subject to certain exceptions. These
        rules
        require additional disclosure by broker-dealers in connection with any trades
        involving a stock defined as a penny stock and impose various sales practice
        requirements on broker-dealers who sell penny stocks to persons other than
        established customers and accredited investors, generally institutions. The
        additional burdens imposed upon broker-dealers by such requirements may
        discourage broker-dealers from effecting transactions in our common stock,
        which
        could severely limit the market price and liquidity of our common stock and
        the
        ability of purchasers to sell our common stock in the secondary market.
 **If
          our common stock is delisted from the American Stock Exchange, we may not
          be
          able to raise essential investment capital.**
  If
          our
          common stock is delisted from the American Stock Exchange, particularly as
          a result of failing to accomplish our plan to regain compliance with the
          Amex listing standards (see below) we may find it difficult or impossible
          to
          raise additional investment capital, without which we cannot survive.
 
 **The
        price of our common stock has been, and may continue to be, volatile.**
  The
        market price of our common stock has fluctuated over a wide range, and it
        is
        likely that the price of our common stock will fluctuate in the future. The
        one
        year sale price for our common stock, as reported by the American Stock Exchange
        has fluctuated from a low of $0.60 to a high of $1.75 per share. The market
        price of our common stock could be impacted by a variety of factors, including:
  ·
              announcements
                  of technological innovations or new commercial products by us or
                  our
                  competitors.
  23
  ·
              changes
                  in government regulation and policies which may be undertaken with
                  respect
                  to security issues related to terrorism, privacy and other matters.
  ·
              developments
                  in the patents or other proprietary rights owned or licensed by
                  us or our
                  competitors.
  ·
              matters
                  related to our financial condition, including our ability to obtain
                  necessary capital.
  ·
              litigation
                  affecting us or our products.
  ·
              general
                  market conditions in our industry.
  In
        addition, the stock market continues to experience price and volume
        fluctuations. These fluctuations have especially affected the market price
        of
        many technology companies. Such fluctuations have often been unrelated to
        the
        operating performance of these companies. Nonetheless, these broad market
        fluctuations may negatively affect the market price of our common stock.
  **We
        have the discretion to issue additional shares of preferred stock with rights
        and preferences superior to those granted to holders of our common stock.**
  Our
        Certificate of Incorporation authorizes our board of directors to issue up
        to
        1,500,000 shares of preferred stock, from time to time, in one or more series.
        Our board of directors is authorized, without further approval of the security
        holders, to fix the dividend rights and terms, conversion rights, voting
        rights,
        redemption rights and terms, liquidation preferences, and any other rights,
        preferences, privileges and restrictions applicable to each new series of
        preferred stock. The issuance of such stock could adversely affect the voting
        power of the holders of common stock and, under certain circumstances, make
        it
        more difficult for a third party to gain control of us, discourage bids for
        our
        common stock at a premium, or otherwise adversely affect the market price
        of our
        common stock.
 
 **Risks
        Related to our listing on the American Stock Exchange**
 
 We
        are
        not in compliance with the continued listing standards of the American Stock
        Exchange (AMEX) and are subject to delisting.
 
 As
        a
        result failing to meet the minimum continued listing standards of the AMEX,
        including the reduction in our stockholders equity below $6,000,000, we are
        subject to delisting in accordance with AMEX rules. We have submitted, and
        Amex
        has approved, our plan to regain compliance with the listing standards by
        March
        1, 2008, however if we do not show adequate progress on the plan, or do not
        complete the plan successfully, including certain events such as the
        re-acquisition of the Champion assets (see above), it is likely that Amex
        will
        move to delist our stock.
  24
  **ITEM
        3. CONTROLS AND PROCEDURES**
 
 The
        Company maintains disclosure controls and procedures (as defined in Exchange
        Act
        Rule 13a-15(e)) that are designed to assure that information required to
        be
        disclosed in its Securities Exchange Act of 1934 reports is recorded, processed,
        summarized and reported within the time periods specified in the Securities
        and
        Exchange Commission’s rules and forms, and that such information is accumulated
        and communicated to management, including the Chief Executive Officer and
        Chief
        Financial Officer, as appropriate, to allow timely decisions regarding required
        disclosures.
 
 In
        designing and evaluating the disclosure controls and procedures, management
        recognizes that any controls and procedures, no matter how well designed
        and
        operated, can provide reasonable assurance only of achieving the desired
        control
        objectives, and management necessarily is required to apply its judgment
        in
        weighting the costs and benefits of possible new or different controls and
        procedures. Limitations are inherent in all control systems, so no evaluation
        of
        controls can provide absolute assurance that all control issues and any fraud
        within the Company have been detected.
 
 As
        required by Exchange Act Rule 13a-15(b), as of the end of the period covered
        by
        this report the Company, under the supervision and with the participation
        of our
        Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness
        of the Company’s disclosure controls and procedures. Based on this evaluation,
        our Chief Executive Officer and Chief Financial Officer concluded that the
        Company’s disclosure controls and procedures were effective as of that date.
 
 There
        was
        no change in the Company’s internal control over financial reporting during the
        Company’s most recently completed fiscal quarter that has materially affected,
        or is reasonably likely to materially affect, the Company’s internal control
        over financial reporting.
  25
  **PART
        II. OTHER INFORMATION**
 
 **ITEM
        1. LEGAL PROCEEDINGS**
 
 In
        2001
        we delivered stock certificates representing 700,000 shares to an escrow
        agent
        as collateral for a loan. The loan was never consummated, and in May 2001
        we
        notified the transfer agent to cancel the shares. Thereafter the escrow agent,
        an attorney, died and we were never able to recover the certificates. In
        August,
        2004 it came to our attention that a party was attempting to transfer 450,000
        of
        the 700,000 shares. We immediately initiated a lawsuit in New York to prevent
        the transfer of the shares and have them retired. In December, 2004, we reached
        a settlement in which the shares would be returned to us without any exchange
        of
        money. We intend to similarly pursue the recovery of the remaining 250,000
        shares, however in the event that we cannot achieve a satisfactory outcome
        in
        such effort, or in the event that the pending settlement is not consummated
        for
        any reason, some or all of these shares may be treated as outstanding and
        our
        Stockholders' Equity line item would have to be adjusted to reflect such
        additional shares.
 
 **ITEM
        2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**
  **ITEM
        3. DEFAULT UPON SENIOR SECURITIES**
 
 In
        January 2000, we completed a private placement offering of convertible notes
        and
        warrants under Section 4(2) of the Securities Act of 1933. As a result of
        this
        offering, we issued notes to 48 investors in the aggregate principal amount
        of
        $3,362,000 and 336,200 Series B Common Stock Purchase Warrants. The notes,
        secured by a first priority lien on all of our assets, were originally
        convertible into our common stock at the conversion rate of $9.50 per share
        and
        were due and payable on July 31, 2001. The Series B Warrants were originally
        exercisable at a price of $13.00 per share. Since July 31, 2001, 41 out of
        48
        noteholders have converted their notes to equity at a conversion price of
        $2.50
        per share. Noteholders who converted to equity also received two replacement
        warrants exercisable at $1.35 per share for each warrant previously held.
        An
        additional noteholder has converted $120,876 of his note for 151,095 common
        shares. On March 31, 2007, another noteholder agreed to a new $62,833 note
        bearing interest at the rate of 10% per annum and due and payable on January
        31,
        2008, replacing the old note. Another 4 notes totaling $311,250 as of May
        31, 2007, were canceled due to the expiration of the statute of limitations.
        The
        remaining outstanding note is in default of the original or restructured
        terms.
 
 As
        of
        November 30, 2007, we owed $90,680 in principal and interest to the remaining
        noteholder. There can be no assurance that we will be able to pay the remaining
        noteholder when the note is due and that the noteholder will not declare an
        event of default and demand immediate payment or seek to attach our assets,
        including our EMMA technology. (See Risk Factors).
  **ITEM
        4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**
 
 During
        this six-month period ended November 30, 2007, there have not been any matters
        submitted for a vote from the security holders.
 
 **ITEM
        5. OTHER INFORMATION**
 
 The
        following was submitted by Champion Parts, Inc., to the SEC on Form 8-K on
        October 10, 2007.
  “On
        Wednesday, October 10, 2007, Champion Parts, Inc., (the "Debtor"), filed
        a
        voluntary petition with the United States Bankruptcy Court for the Western
        District of Arkansas, (the "Court") under Chapter 11 of Title 11 of the United
        States Code in order that it may reorganize its financial obligations and
        capital structure (Case Nos. 4:07-bk-73253). The Debtor will file motions
        to
        continue to operate its business as "debtor-in possession" under the
        jurisdiction of the Court and in accordance with the applicable provisions
        of
        the Bankruptcy Code and orders of the Court.
  26
  The
        Debtors have received written notice from PNC Bank, National Association,
        ("the
        Lender") its primary lender of various events of default under the loan
        covenants and agreements with the lender. Discussions with the senior lender
        resulted in its decision that the company should file for Chapter 7 liquidation
        under the applicable bankruptcy law. However the Company believes it is a
        viable
        going concern, and can succeed in the future. The lender has stated that
        it
        intends to seek an orderly liquidation of the Company. As a result, the Company
        intends to seek from the Bankruptcy Court an order allowing it to use Cash
        Collateral to remain in business and service the needs of its customers.
  There
        can
        be no assurance as to what the Bankruptcy Court will allow. If it does not
        allow
        the use of Cash Collateral, it is likely that the bank will have a Receiver
        appointed to oversee the orderly liquidation of the Company. If the Court
        allows
        the use of Cash Collateral, the Company intends to continue to sell to its
        customers and to seek to maximize the value for all its creditors and
        shareholders.
  The
        Company intends to submit its plan of reorganization subject to the approval
        of
        the Court. “
  We
        are
        currently reviewing our options as a secured lender. At this time options
        include making an offer to buy the assets of Champion Parts, Inc or
        participating in a refinancing of the debt of Champion Parts, Inc. Because
        of
        the uncertainty of the situation, we have taken a 100% reserve against the
        remaining balance of the note.
  **ITEM
        6. EXHIBITS AND REPORTS ON FORM 8-K**
 
 (a)
              Exhibits31.1
              Certification
                  of Chief Executive Officer31.2
              Certification
                  of Chief Financial Officer32.1
              Certification
                  Pursuant to Section 906 of the Sarbanes-Oxley Act(b)
              Report
                  on Form 8-K filed on March 15, 2007 under Item 7.01.Report
                  on Form 8-K filed on June 6, 2007 under Item 1.01 and 3.02.
  27
  **SIGNATURES**
 
 Pursuant
        to the requirements of Section 13 or 15(d) of the Securities Exchange Act
        of
        1934, the Registrant has duly caused this Report on Form 10-QSB for the fiscal
        quarter ended August 31, 2007, to be signed on its behalf by the undersigned,
        thereunto duly authorized the __nd day of January 2008.
 
 CASH
                  TECHNOLOGIES, INC.By:
                  /S/ Bruce KormanBruce
                  KormanPresident
                  and Chief Executive Officer
 
 By:
                  /S/Edmund
                  KingEdmund
                  KingChief
                  Financial Officer
  28