**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**







**FORM
      10-QSB**





(MARK
      ONE)





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





FOR
      THREE
      MONTH PERIOD ENDED FEBRUARY 28, 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
      April
      15, 2007, there were 22,485,475 shares 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.
              Consolidated
                  Financial Statements:Consolidated
                  Balance Sheets as of February 28, 2007 (unaudited) andMay
                  31, 2006
              **3**Consolidated
                  Statements of Operations for the three-month and nine monthperiods
                  ended February 28, 2007 and February 28, 2006 (unaudited)
              **4**Consolidated
                  Statements of Cash Flows for the three-month and nine monthperiods
                  Ended February 28, 2007 and Februrary 28, 2006 (unaudited)
              **5**Notes
                  to Consolidated Financial Statements for the three-month and nine
                  monthperiods
                  ended February 28, 2007 and February 28, 2006 (unaudited)
              **6**Item 2.
              Management's
                  Discussion and Analysis of Financial Condition,Results
                  of Operations, and Risk Factors
              **14**Item 3.
              Controls
                  And Procedures
              **27****PART
                II. OTHER INFORMATION**Item 1.
              Legal
                  Proceedings
              **28**Item 2.
              Unregistered
                  Sales of Equity Securities and Use of Proceeds
              **28**Item 3.
              Defaults
                  Upon Senior Securities
              **28**Item 4.
              Submission
                  of Matters to a Vote of Security Holders
              **29**Item 5.
              Other
                  Information
              **29**Item 6.
              Exhibits
                  and Reports on Form 8-K
              **29**SIGNATURES
              **30**
   2


**PART
      I**





**ITEM
      1. FINANCIAL STATEMENTS**





**CASH
      TECHNOLOGIES, INC.**


**CONSOLIDATED** **BALANCE
      SHEETS**


**(UNAUDITED)**


**FEBRUARY
                  28,**
              
              **MAY
                  31,****2007**
              
              **2006****ASSETS**CURRENT
                  ASSETS:Cash
                  and cash equivalents
              
              $
              22,725
              
              $
              81,355Accounts
                  receivable
              
              
              50,292
              
              
              14,226Prepaid
                  expenses and other current assets
              
              
              194,627
              
              
              185,986Other
                  receivable (net of allowance $50,000)
              
              
              151,656
              
              
              104,684Assets
                  of discontinued operationsCash
              
              
              872
              
              
              61,636Accounts
                  receivable
              
              
              313,696
              
              
              2,095,107Prepaid
                  expenses and other current assets
              
              
              274,614
              
              
              231,422Inventory
                  (net of allowance $121,000)
              
              
              121,690
              
              
              8,436,161Property
                  and equipment, net
              
              
              
              
              
              15,261Note
                  receivable
              
              
              1,387,500
              
              
              -Other
                  assets
              
              
              18,230
              
              
              144,038Total
                  assets of discontinued operations
              
              
              **2,116,602**
              
              
              **10,983,625**Total
                  Current Assets
              
              
              **2,535,902**
              
              
              **11,369,876**CoinBank
                  machines held for sale (Note 1(n))
              
              
              609,890
              
              
              609,890PROPERTY
                  AND EQUIPMENT (net)
              
              
              27,577
              
              
              30,260NOTES
                  RECEIVABLE
              
              
              7,179,045
              
              
              -CAPITALIZED
                  SOFTWARE COSTS (Note 1(n))
              
              
              
              
              
              326,531CDHC
                  PREFERRED STOCK
              
              
              900,901
              
              
              900,901CLAIMREMEDI
                  PREFERRED STOCK
              
              
              3,500,000
              
              
              3,500,000BIPS
                  PREFERRED STOCK
              
              
              2,000,000
              
              
              2,000,000OTHER
                  ASSETS
              
              
              535,295
              
              
              535,295**TOTAL
                  ASSETS**
              
              **$**
              **17,288,610**
              
              **$**
              **19,272,753****LIABILITIES
                  AND STOCKHOLDERS' EQUITY (DEFICIENCY)**CURRENT
                  LIABILITIES:Current
                  maturities of Notes Payable (Note 5)
              
              $
              3,482,287
              
              
              3,482,287Due
                  to Officers and Directors
              
              
              8,915
              
              
              8,915Convertible
                  debt (Note 5)
              
              
              434,646
              
              
              514,176Due
                  to Shareholders (Note 4)
              
              
              532,665
              
              
              120,750Accounts
                  payable
              
              
              1,072,972
              
              
              607,945Accrued
                  liabilities
              
              
              1,599,964
              
              
              927,228Dividend
                  payable
              
              
              210,831
              
              
              50,416Liabilities
                  of discontinued operationsAccounts
                  payable
              
              
              725,459
              
              
              1,126,690Notes
                  payable
              
              
              1,504,004
              
              
              2,321,207Accrued
                  expenses and other current liabilities
              
              
              855,820
              
              
              1,658,943Total
                  liabilities of discontinued operations
              
              
              **3,085,283**
              
              
              **5,106,840**Total
                  Current Liabilities
              
              
              **10,427,563**
              
              
              **10,818,557**Long-Term
                  Notes Payable (Note 6)
              
              
              **-**
              
              
              -**TOTAL
                  LIABILITIES**
              
              
              **10,427,563**
              
              
              **10,818,557**COMMITMENTS
                  & CONTINGENCIES (Note 7)
              
              
              -
              
              
              -MINORITY
                  INTEREST
              
              
              (92,535
              )
              
              (74,517
              )MINORITY
                  INTEREST OF DISCONTINUED OPERATIONS
              
              
              -
              
              
              684,662TOTAL
                  MINORITY INTEREST
              
              
              **(92,535**
              **)**
              
              **610,145****STOCKHOLDERS'
                  EQUITY (DEFICIENCY): (Note 6)**Stockholder's
                  equity of discontinued operationsAdditional
                  paid in capital
              
              
              910,000
              
              
              910,000Accumulated
                  equity
              
              
              5,300,364
              
              
              4,966,785Total
                  stockholder's equity of discontinued operations
              
              
              **6,210,364**
              
              
              **5,876,785**Cumulative
                  Redeemable Preferred Stock, 1,500,000 shares authorized,647,715
                  and 647,515 shares issued and outstanding at November 30, 2006
                  and May 31,
                  2006
              
              
              11,188,283
              
              
              10,625,812Common
                  Stock, $0.01 par value, 35,000,000 shares authorized,23,631,164
                  and 23,035,964 issued and outstanding at November 30, 2006 and
                  May 31,
                  2006
              
              
              458,057
              
              
              346,445Additional
                  Paid-In-Capital
              
              
              39,060,773
              
              
              38,262,424Accumulated
                  Deficit
              
              
              (49,963,895
              )
              
              (47,267,415
              )**Total
                  stockholders' Equity**
              
              
              **6,953,582**
              
              
              **7,844,051****TOTAL
                  LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)**
              
              **$**
              **17,288,610**
              
              **$**
              **19,272,753**





See
      notes
      to consolidated financial statements




3




**CASH
      TECHNOLOGIES, INC.**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS**


**(UNAUDITED)**


**THREE
                  MONTH PERIOD**
              
              **NINE
                  MONTHS****ENDED
                  FEBRUARY 28,**
              
              **ENDED
                  FEBRUARY 28,****2007**
              
              **2006**
              
              **2007**
              
              **2006**NET
                  REVENUES
              
              $
              103,858
              
              $
              1,460
              
              $
              220,232
              
              $
              40,650COST
                  OF REVENUES
              
              
              63,072
              
              
              444
              
              
              99,159
              
              
              25,234GROSS
                  PROFIT (LOSS)
              
              
              40,786
              
              
              1,016
              
              
              121,073
              
              
              15,416SELLING,
                  GENERAL, & ADMINISTRATIVE EXPENSE
              
              
              813,692
              
              
              730,893
              
              
              2,376,915
              
              
              2,213,945RESEARCH
                  AND DEVELOPMENT
              
              
              18,750
              
              
              37,500
              
              
              75,000
              
              
              112,500DEPRECIATION
                  & AMORTIZATION EXPENSE
              
              
              47,818
              
              
              141,066
              
              
              330,019
              
              
              423,197**OPERATING
                  LOSS**
              
              
              (839,474
              )
              
              (908,443
              )
              
              (2,660,861
              )
              
              (2,734,226
              )INTEREST
                  EXPENSE
              
              
              123,228
              
              
              96,091
              
              
              318,422
              
              
              291,560LOSS
                  BEFORE INCOME TAXES
              
              
              (962,702
              )
              
              (1,004,534
              )
              
              (2,979,283
              )
              
              (3,025,786
              )INCOME
                  TAXES
              
              
              -
              
              
              -
              
              
              2,400
              
              
              7,000MINORITY
                  INTEREST (Note 13)
              
              
              (5,483
              )
              
              (6,282
              )
              
              (18,020
              )
              
              (18,626
              )NET
                  INCOME (LOSS) FROM CONTINUING OPERATIONS
              
              **$**
              **(957,219**
              **)**
              **$**
              **(998,252**
              **)**
              **$**
              **(2,963,663**
              **)**
              **$**
              **(3,014,160**
              **)**DISCONTINUED
                  OPERATIONSNET
                  REVENUES
              
              $
              (4,393
              )
              $
              2,213,261
              
              $
              2,781,808
              
              $
              6,025,180FORGIVENESS
                  OF DEBT
              
              
              -
              
              
              
              
              
              -
              
              
              51,169COST
                  OF REVENUES
              
              
              (8,912
              )
              
              (1,576,645
              )
              
              (2,250,226
              )
              
              (4,374,252
              )SELLING,
                  GENERAL & ADMINISTRATIVE EXPENSE
              
              
              (68,568
              )
              
              (638,238
              )
              
              (1,387,565
              )
              
              (1,907,801
              )INTEREST
                  EXPENSE
              
              
              (42,288
              )
              
              (118,196
              )
              
              (291,908
              )
              
              (323,227
              )GAIN
                  FROM DISPOSITION OF SUBSIDIARY'S ASSETS
              
              
              
              
              
              -
              
              
              1,481,468
              
              
              -INCOME
                  FROM DISCONTINUED OPERATIONS
              
              
              (124,161
              )
              
              (119,818
              )
              
              333,577
              
              
              (528,931
              )NET
                  INCOME (LOSS)
              
              $
              (1,081,380
              )
              $
              (1,118,070
              )
              $
              (2,630,086
              )
              $
              (3,543,091
              )Dividends
                  & deemed dividends
              
              $
              55,000
              
              $
              50,415
              
              $
              165,000
              
              $
              326,043Net
                  income (loss) allocable to commonshareholders
              
              $
              (1,136,380
              )
              $
              (1,168,485
              )
              $
              (2,795,086
              )
              $
              (3,869,134
              )Basic
                  and diluted net income (loss) per sharebefore
                  extraordinary income
              
              $
              (0.03
              )
              $
              (0.06
              )
              $
              (0.08
              )
              $
              (0.18
              )Basic
                  and diluted net income (loss) per sharefor
                  extraordinary income
              
              $
              (0.03
              )
              $
              (0.06
              )
              $
              (0.08
              )
              $
              (0.20
              )Basic
                  and diluted weighted averageshares
                  of common stock outstanding
              
              
              32,290,404
              
              
              19,183,870
              
              
              32,290,404
              
              
              19,183,870




See
      notes
      to consolidated financial statements.





4


**CASH
      TECHNOLOGIES, INC.**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**(UNAUDITED)**


**Nine
                  Months Ended****February
                  28,**
              
              **February
                  28,****2007**
              
              **2006****OPERATING
                  ACTIVITIES:**Net
                  loss
              
              $
              (2,963,663
              )
              $
              (2,745,374
              )Adjustments
                  to reconcile net loss to net cash used byoperating
                  activities:Minority
                  interest
              
              
              (275,082
              )
              
              (18,626
              )Amortization
                  of capitalized software
              
              
              326,531
              
              
              419,827Income
                  on forgiveness of debt
              
              
              **-**
              
              
              -Noncash
                  compensation expense
              
              
              **-**
              
              
              3,308Non-Cash
                  payment for services
              
              
              105,000
              
              
              -Depreciation
                  expense
              
              
              2,683
              
              
              5,689Changes
                  in operating assets and liabilities:Accounts
                  receivable
              
              
              (36,066
              )
              
              (89,559
              )Prepaid
                  expenses and other current assets
              
              
              (8,641
              )
              
              (132,419
              )Other
                  receivable
              
              
              (46,972
              )
              
              -Inventory
              
              
              -
              
              
              (156,111
              )CoinBank
                  machines held for sale
              
              
              -
              
              
              23,223Other
                  assets
              
              
              -
              
              
              118,250Accrued
                  interest
              
              
              (70,615
              )
              
              105,021Accounts
                  payable
              
              
              465,027
              
              
              13,128Accrued
                  expenses and other current liabilities
              
              
              672,736
              
              
              387,854Net
                  cash used in operating activities
              
              
              (1,829,062
              )
              
              (2,065,789
              )**INVESTING
                  ACTIVITIES:**Net
                  acquisition cost of TomcoPurchase
                  of property and equipment
              
              
              -
              
              
              (3,439
              )-Net
                  cash provided by (used in) investing activities
              
              
              -
              
              
              (3,439
              )**FINANCING
                  ACTIVITIES:**Proceeds
                  from conversion of warrants
              
              
              -
              
              
              340Proceeds
                  from the issuance of warrants
              
              
              -
              
              
              -Net
                  proceeds from issuance of preferred stock
              
              
              562,471
              
              
              475,000Proceeds
                  from Long-term debt
              
              
              403,000Repayments
                  on short-term debt
              
              
              -
              
              
              (321,513
              )Repayments
                  on long-term debt
              
              
              
              
              
              (3,212
              )Proceeds
                  from sale of common stock
              
              
              804,961
              
              
              1,985,000Net
                  cash provided by financing activities
              
              
              1,770,432
              
              
              2,135,615**CHANGE
                  IN CASH AND CASH EQUIVALENTS**
              
              
              (58,630
              )
              
              66,387Cash
                  and Cash Equivalents, Beginning of Period
              
              
              81,355
              
              
              102,611Cash
                  and Cash Equivalents, End of Period
              
              $
              22,725
              
              $
              168,998**SUPPLEMENTAL
                  DISCLOSURE OF CASH FLOW INFORMATION**Income
                  taxes
              
              
              2,400
              
              $
              7,000**SUPPLEMENTAL
                  DISCLOSURE OF NONCASH TRANSACTIONS**Issuance
                  of common stock for services performed
              
              $
              105,000
              
              $
              3,308Gain
                  (Loss) on operations of discontinued operations
              
              $
              333,577Dividends
                  declared on preferred stock
              
              $
              160,415
              
              $
              317,528Deemed
                  dividend on warrants issued
              
              $
              -
              
              $
              8,515
  See
        notes
        to consolidated financial statements





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, 2006, 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 February 28, 2007 and the results of operation
      and
      cash flows for the three and nine-month periods ended February 28, 2007 and
      February 28, 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, 2006, filed with the SEC.
      The results of operations for the nine-month period ended February 28, 2007,
      are
      not necessarily indicative of the results to be expected for any subsequent
      quarter or for the entire fiscal year.





In
      December of 1997, we filed a patent application describing our transaction
      processing and networking technologies, which resulted in the issuance of patent
      number 6,308,887, by the U.S. Patent and Trademark Office on October 30, 2001.
      The technology, which we refer to as EMMA (E commerce Message Management
      Architecture), can perform complex data processing that involves interactivity
      with disparate platforms and devices for financial, security and other
      applications.





Technological
      feasibility of the Company’s EMMA technology 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 for the three month period ended February 28, 2007.





Amortization
      of the capitalized software commenced on January 1, 2002. Amortization had
      been
      calculated over a seven year period for the quarter ended February 28, 2002
      resulting in an amortization expense of $65,989. Management changed the
      amortization period for capitalized software to five years starting March 1,
      2002, primarily to approximate the estimated period over which the business
      brought about by the technology will expand into its expected capacity. As
      of
      March 1, 2002, net unamortized capitalized software amounted to $2,705,547.
      The
      unamortized cost as of March 1, 2002 is being amortized over the remaining
      revised estimated life. The change resulted in an amortization expense of
      $205,931, an increase of $40,959 ($0.01 per share) from the original estimated
      amortization period, for the year ended May 31, 2002. During the nine month
      period ended February 28, 2007, we amortized an additional $326,530 of
      capitalized software.




6





In
      connection with the development of our EMMA software, during the period ended
      September 30, 1999 we utilized $278,000 in funds for coding and testing
      activities necessary to resolve all of the identified high-risk development
      issues. These costs were reflected as expenses on our financial statements.
      Commencing October 1, 1999 through December 31, 2002 we incurred approximately
      $2,771,536 over 27 months of coding, subsequent to the detail program design
      and
      establishment of feasibility, until the product became available in January
      2002
      for general release to customers. These costs were treated as capitalized
      software costs in our financial statements through December 31, 2002. We discuss
      below the manner in which we developed our EMMA software, which is intended
      to
      assist the reader in understanding the difference in our costs in the
      technological feasibility using detail program design and capitalized software
      costs during production (coding) phases.





With
      respect to the technological feasibility using the detail program design
      approach, there were two primary issues, which can be classified as “high risk
      development issues” that needed to be resolved as evidence that technological
      feasibility had been established under paragraph 4(a)(3) of SFAS 86.





The
      first
      issue involved the testing of our proprietary messaging protocol and parallel
      processing method for predicted performance and behavior. We estimate that
      we
      expended approximately $160,000 for this activity. The messaging protocol and
      processing method are what we believe differentiates us from other attempts
      to
      develop similar software. Once these were developed, successfully tested using
      simulations with existing applications and deemed workable, the development
      risk
      for messaging was overcome and a patent application for the multi-transactional
      architecture was filed on July 2, 1999. This patent was granted by the U.S.
      Patent and Trademark Office in October of 2001.





The
      second high risk development issue was obtaining independent ATM certification
      for our new messaging architecture. In order to process EFT network
      transactions, the software being developed has to be certifiable by one of
      the
      major authorized EFT networks (such as Star, MAC, etc.) for interfacing with
      the
      global EFT network. We partnered with a third-party ATM software provider to
      assist in these efforts, instead of developing the software for this step
      ourselves. This significantly reduced our costs to complete this high risk
      development step because we were able to incorporate and modify the third
      party’s software, which had been previously certified, and re-certify it rather
      than develop our own similar software from scratch. A per-transaction license
      fee will be paid by us to the third party when the system starts generating
      transactions, thereby further reducing development costs. Certification was
      obtained in August of 1999 and the EMMA software was then deemed
      feasible.





**COSTS
      BEFORE VS. AFTER FEASIBILITY**





There
      are
      two primary reasons that the expensed costs prior to feasibility were far less
      than the costs subsequent to feasibility, which were capitalized.




First,
      our proprietary messaging and processing methods were proven earlier than
      expected.




7





Second,
      as stated above, instead of developing our own ATM software we used a third
      party software product, which saved time and money. This was completed on August
      19, 1999.





Partnering
      with other software providers and licensing third-party software allowed us
      to
      reduce costs below original estimates during the high-risk technological
      feasibility phase using the “detail program design” approach. In contrast to the
      initial high-risk development effort, the subsequent coding required more
      resources and time than expected. As a result, the costs to establish
      feasibility (approximately $278,000) were substantially lower than the
      subsequent cost (approximately $2,770,000) incurred to make the product
      available for general release to customers. It is also important to observe
      that
      this category of transaction software is rare in the marketplace and doesn’t
      follow the typical pattern of development of the vast majority of consumer
      and
      office software, wherein most development dollars are expended early in
      technological feasibility phase using a working model.





Our
      offered products such as ATM-X and POS-X were originally contemplated in the
      detailed program design established prior to September 1999. We have given
      trade
      names such as ATM-X and POS-X (referring to whether EMMA would be running an
      ATM
      or at a retail point of sale) to help market the uses of EMMA.





In
      addition, management has identified potential uses for EMMA not originally
      contemplated. These new uses were created after January 2002 and the costs
      associated with these new uses, as reflected in our filings, have been treated
      as general and administrative expenses and not capitalized. Any programming
      that has been done for such products (primarily for demos, creating use-specific
      screens and interfacing to third-party products) were included in General and
      Administrative expenses and were minimal. In future filings, similar costs
      will
      be charged to Research and Development Expense.





Furthermore,
      as in all of our applications where we expect to use biometrics, the biometrics
      will be purchased/licensed from a third party.





For
      the
      reasons cited, most development costs occurred after the software program design
      was completed and feasibility was achieved. These results are not typical,
      nor
      comparable to software developers who use either the detail program design
      approach, which we used, or the working model approach, under paragraph 4(b)
      of
      SFAS 86, and these factors should be considered when reviewing our financial
      statements.





**NOTE
      2. COMMITMENTS AND CONTINGENCIES**





In
      February 2003 Abraham Mirman of Samson Consulting Corp. was hired, interalia,
      to
      provide consulting services and arrange financing for us. The term of the
      agreement was 12 months at a monthly cost of $50,000 or an equivalent value
      in
      shares of our stock; either party had the right to terminate after one month
      for
      any reason. Shortly thereafter, we terminated the agreement for Samson's failure
      to perform. In July 2004, Mirman initiated an arbitration in New York State
      claiming that the agreement was wrongfully terminated and that Samson was owed
      $600,000 in damages plus costs. In June 2005, an arbitrator awarded Sampson
      $100,000 in unpaid fees, $21,650 in statutory interest through July 20, 2005
      and
      no attorney fees or costs. Subsequently, we initiated a lawsuit against Mirman
      in California, alleging that he failed to provide financing promised in
      February, 2003, causing damages in excess of $400,000. In February 2006, both
      parties agreed to settle all outstanding claims without any funds exchanged;
      i.e. we have dismissed our California lawsuit and Samson has vacated its New
      York judgment




8




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, passed away 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 tentative settlement in which the shares would be returned to us
      without any exchange of money, pending execution of final settlement
      documentation. 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**





In
      the
      fiscal quarter ended February 28, 2007, in private transactions under Section
      4(2) of the Securities Act of 1933, as amended, the Company sold 278,000 shares
      of the Company’s Common Stock for gross proceeds of $299,100. In addition, the
      Company issued 232,500 five year Common Stock purchase warrants with exercise
      prices ranging from $1.65 to $2.00.





**NOTE
      4: RELATED PARTY TRANSACTIONS**





As
      of
      February 28, 2007, we were in arrears $412,577 for salary to Mr. Korman, $73,088
      in expense reimbursements and owed $142,835 in accrued rent for our offices
      to a
      company in which Mr. Korman has a beneficial interest. In addition, Mr. King
      loaned $50,000 and Mr. Korman loaned $28,000 to the Company during the nine
      month period ended February 28, 2007.





**NOTE
      5: SHORT-TERM DEBT**


In
          1997,
          we entered into a credit agreement with G.E. Capital Corporation (“G.E.”)
          pursuant to which we borrowed $5,500,000 for the purchase of CoinBank component
          equipment, working capital and general corporate purposes. The G.E. loan
          is
          secured by certain of our CoinBank machines. In 2000, we entered into the
          first
          of several loan renewals with G.E., the most recent of which was executed
          in
          December, 2006 and will expire in February, 2008. Payments are interest
          only and
          we have no present plan or capability to repay G.E. its principal. As of
          February 28, 2007 we owed $3,654,096 including principal and financing
          fees.


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., 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 to 48 investors. 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.




9





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. The remaining 6 notes are in default of their
      original or restructured terms. As of February 28, 2007 we owed $434,646 in
      principal and interest to the 6 remaining noteholders.





In
      May
      2003 we
      completed a private placement offering with
      a
      stockholder consisting of an unsecured convertible promissory note in the principal amount
      of $50,000, bearing interest at the rate of 5% per annum and redeemable Warrants
      to purchase 100,000 shares of common stock. The note is convertible into common
      stock at the conversion rate of $0.50 per share. The Warrants are exercisable
      at
      $1.00 per share. At that time we also reduced the exercise price of 8,000 Series
      C warrants owned by the stockholder from $2.50 to $0.25 per share. The note
      is
      due and payable on May 2, 2008. This note was converted on September 11,
      2006 and was reclassified into equity.


For
        a
        period of approximately two years, the Company’s subsidiary, TAP Holdings, LLC,
        operated Tomco Auto Products, until the sale of most of the Tomco assets
        on
        October 31, 2006. During such period, TAP maintained as asset-based line
        of
        credit for the benefit or Tomco on which a partial repayment of $1,300,000
        was
        made as part of the Tomco sale transaction. As of February 28, 2007, the
        line of
        credit had an outstanding balance of approximately $882,701 including interest.
        The line of credit is secured by all of the business assets of TAP Holdings,
        LLC
        as well as a limited personal guaranty from TAP’s chairman (who is not an
        employee of Cash Technologies). The outstanding balance of the line of credit
        is
        expected to be fully paid by approximately August, 2007 from remaining Tomco
        receivables (which were not sold by TAP in the Tomco sale transaction) and
        monthly note payments from the acquirer of the Tomco assets.




**NOTE
      6: 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.





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.




10





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 the 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.





If
      the
      fair value based method under FAS 123 had been applied in measuring stock-based
      compensation expense for the three-month and nine-month periods ended February
      28, 2007 and February28, 2006, the pro forma on net income (loss) and net income
      (loss) per share would have been as follows:





**FOR
                  THREE MONTHS**
                **ENDED
                  FEBRUARY 28,**
            
            
            
            **FOR
                NINE MONTHS**
              **ENDED
                FEBRUARY 28,****2007**
            
            **2006**
            
            **2007**
            
            **2006**Net
                Income (Loss)As
                Reported
            
            
            (1,081,380
            )
            
            (1,118,070
            )
            
            (2,630,086
            )
            
            (3,543,091
            )Pro
                Forma
            
            
            (1,116,354
            )
            
            (1,515,190
            )
            
            (2,665,090
            )
            
            (4,215,839
            )Basic
                and Diluted Income (loss) Per Common ShareAs
                Reported
            
            $
            (0.03
            )
            $
            (0.06
            )
            $
            (0.08
            )
            $
            (0.18
            )Pro
                Forma
            
            $
            (0.03
            )
            $
            (0.08
            )
            $
            (0.08
            )
            $
            (0.22
            )




For
      the
      three month period ended February 28, 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 2001-2006,
      expected life of the option is 5 years, expected volatility of 35%, risk free
      interest rate of 3.76% and a 0% dividend yield. The weighted average fair value
      at the grant date for such option is $1.66 per option.





For
      the
      nine month period ended February 28, 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 2000-2005,
      expected life of the option is 5 years, expected volatility of  78%, risk
      free interest rate of 3.76% and a 0% dividend yield. The weighted average fair
      value at the grant date for such option is $1.66 per option.




11


**NOTE
        7: SEGMENT REPORTING**
  We
        operate through two principal business segments: Claim-Remedi Services, Inc.,
        and CashTechCard Systems, Inc.
  **Three
                  months ended**
              
              **Nine
                  months ended****February
                  28,**
              
              **February
                  28,****2007**
              
              **2006**
              
              **2007**
              
              **2006**Net
                  revenues:Claim
                  Remedi/CashTechCard
              
              
              103,858
              
              
              1,460
              
              
              220,232
              
              
              5,433Unallocated
              
              
              -
              
              
              -
              
              
              -
              
              
              35,217103,858
              
              
              1,460
              
              
              220,232
              
              
              40,650Interest
                  expense:Claim
                  Remedi/CashTechCard
              
              
              -
              
              
              -
              
              
              -
              
              
              -Unallocated
              
              
              123,228
              
              
              96,091
              
              
              318,422
              
              
              291,560123,228
              
              
              96,091
              
              
              318,422
              
              
              291,560Depreciation
                  & Amortization:Claim
                  Remedi/CashTechCard
              
              
              -
              
              
              -
              
              
              -
              
              
              -Unallocated
              
              
              47,818
              
              
              141,066
              
              
              330,019
              
              
              423,19747,818
              
              
              141,066
              
              
              330,019
              
              
              423,197Segment
                  Income (loss):Claim
                  Remedi/CashTechCard
              
              
              (357,306
              )
              
              (303,320
              )
              
              (981,834
              )
              
              (957,046
              )Unallocated
              
              
              (599,913
              )
              
              (694,952
              )
              
              (1,981,829
              )
              
              (2,057,134
              )(957,219
              )
              
              (998,272
              )
              
              (2,963,663
              )
              
              (3,014,180
              )


12





**NOTE
      8: MINORITY INTEREST**




For
      the
      nine months ended February 28, 2007, we have allocated $18,019 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, represented by a secured promissory note, to be
      paid
      over a maximum of 11 years based on a percentage of combined carburetor sales
      by
      Champion. After
      Cash Tech's investment in TAP has been fully repaid (approximately $1.1
      million), TAP will pay approximately 37% of the proceeds from the Champion
      note
      to Tibrand Capital Ventures, LLC, Cash Tech's former partner in TAP, with the
      remainder paid to Cash Tech. TAP
      has
      closed its Los Angeles factory and terminated any remaining
      employees.





**NOTE
      9: SUBSEQUENT EVENTS**





Subsequent
      to the fiscal quarter ended February 28,2007, in private transactions under
      Section 4(2) of the Securities Act of 1933, as amended, the Company sold 196,000
      shares of the Company’s Common Stock for gross proceeds of $181,000. In
      addition, the Company issued 20,000 five year Common Stock purchase warrants
      witha n exercise price of $2.00.




13


**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 Cash Tech Card Systems, Inc. (formerly Cintelia Systems Inc.),
        a
        Delaware corporation, Claim-Remedi Service, Inc. (formerly Heuristic
        Technologies, Inc.), a Delaware company, National Cash Processors, Inc.,
        a
        Delaware corporation, CoinBank Automated Systems, Inc., a Delaware corporation;
        CoinBank Automation Handels GmbH, organized and operating in Salzburg,
        Austria,  CT Holdings, LLC., a Delaware corporation of which we own
        86.65%,  and TAP Holdings, LLC (dba Tomco Auto Products).  Our address
        is 1434 West 11th Street, Los Angeles, California 90015. Our telephone number
        is
        (213) 745-2000.


Business
        Highlights
  Following
        are certain financial and operational accomplishments during the current
        fiscal
        year, some of which are explained in further detail throughout this document:
  ·
              Completed
                  contracts between October, 2006 and February, 2007 which are expected
                  to
                  bring the Company to profitability as they roll out:
 
 o
              Claim-Remedi
                  contract with Imacs, Inc., October, 2006: Provides for integration
                  of
                  Claim-Remedi’s healthcare insurance verification product with Imacs’
                  industry leading hospital software. Estimated value of contract,
                  $4
                  million over 36 months.
 
 o
              Sale
                  of certain assets of TAP Holdings, November, 2006: Sale of the
                  Tomco
                  assets for $10.4 million, originally purchased for $2.5 million
                  two years
                  earlier.
 
 o
              Claim-Remedi
                  contract with Physician Sales and Service (“PSS”), December, 2006:
                  Distribution agreement with the largest supplier of durable medical
                  products in U.S., with a national sales force of 700 reps and client
                  base
                  of 100,000 accounts, to market Claim-Remedi’s healthcare software and
                  services.
 
 o
              CashTechCard
                  contract with Connectados.com in January, 2007: Marketing agreement
                  with
                  the largest Spanish-speaking internet community to co-brand and
                  advertise
                  our prepaid MasterCard® debit
                  cards.
 
 o
              CashTechCard
                  contract with TV Media, LLC in February, 2007: Marketing agreement
                  with TV
                  advertising group to co-brand and market our prepaid MasterCard® debit
                  card to tens of millions of U.S. households through cable and satellite
                  TV
                  networks.
 
 ·
              CashTechCard
                  went live on the Green Dot® Financial Network, allowing prepaid debit
                  cards to be loaded at more than 40,000 locations throughout the
                  U.S. at
                  retails stores including Rite Aid, CVS, Walgreens, RadioShack and
                  others.
 
 ·
              Expanded
                  Claim-Remedi’s DoD business: As the only electronic pharmacy claim
                  processor to the U.S. Dept of Defense, Claim-Remedi expanded its
                  U.S. Air
                  Force processing to include two U.S. Army
                  bases.
  ·
              Expanded
                  and improved Claim-Remedi product line:
 
 o
              Claim-Remedi’s
                  best-of-breed insurance claim editor, Pro837TM, became
                  web-enabled.
 
 o
              Added
                  “universal” interface, allowing healthcare provider’s existing patient
                  management software to import from and export to Claim-Remedi products
                  without manual data entry of most key
                  information.
 
 o
              New
                  reporting engine allows clients to create and customize data
                  presentation.


Our
      independent certified public accountant included an explanatory paragraph in
      its
      report for the year ended May 31, 2006, 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
        nine-month periods ended February 28, 2007 and 2006, we incurred net income
        (losses) before extraordinary gain of approximately $(2,630,086) and
        $(3,543,091) 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 was established.
      Technological feasibility is established upon completion of a detailed program
      design or working model. Technological feasibility of our EMMA
      technology 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 $75,000 for the
      nine-month period ended February 28, 2007.




14




Amortization
      of the capitalized software commenced on January 1, 2002. Amortization had
      been
      calculated over a seven (7) year period for the quarter ended February 28,
      2002
      resulting in an amortization expense of $65,989. Management changed the
      amortization period for capitalized software, to five (5) years starting March
      1, 2002, primarily to approximate the estimated period over which the business
      brought about by the technology will expand into its expected capacity. As
      of
      March 1, 2002, net unamortized capitalized software amounted to $2,705,547.
      The
      unamortized cost as of March 1, 2002 is being amortized over the remaining
      revised estimated life. The change resulted in an amortization expense of
      $205,931, an increase of $40,959 ($0.01 per share) from the original estimated
      amortization period, for the year ended May 31, 2002. During the nine-month
      period ended February 28, 2007, we amortized an additional $326,530 of
      capitalized software.




The
      EMMA
      asset has been amortized completely as of the February 28, 2007
      quarter.




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 lines of business, namely, data processing
      (including healthcare data processing and financial data processing)and the
      manufacturing of auto products, however in August, 2006 we agreed to sell our
      auto products business, a transaction which was sold in October, 2006.


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.




15





**RESULTS
      OF OPERATIONS** ****





**THREE
      MONTHS ENDED FEBRUARY 28, 2007 COMPARED TO THE THREE MONTHS ENDED FEBRUARY
      28,
      2007.**




*Net
      revenues* for the
      three-month period ended February 28, 2007 increased to $103,858 compared to
      $1,460 for the same 2006 period. The increase in net revenue is attributable
      to
      an increase in sales of our health care products.





*Net
      revenues* attributable to business held for sale for the three-month period ended February
      28, 2007 decreased to $(4,393) compared to $2,213,261 for the same 2006 period.
      This decrease is directly attributable to the sale of a majority of the business
      during the November 30, 2006 quarter.





*Cost
      of revenues* for the
      three-month period ended February 28, 2007 was $63,072 compared to $444. The
      increase in cost of revenues is directly related to the increase in
      sales.





*Cost
      of revenues* attributable to business held for sale the three-month period ended February
      28,
      2007 was $8,912 compared to $1,576,645 for the quarter ended February 28, 2006. This
      decrease is directly attributable to the sale of a majority of the business
      during the November 30, 2006 quarter.





*Gross
      profit* for
      the
      three months ended February 28, 2007 was $40,786 compared to $1,016 for the
      same
      period a year ago.





*Gross
      profit* attributable
      to business held for sale for the three months ended February 28, 2007 was
      $(13,305) compared to $636,616 for the same period a year ago. The decrease
      in
      gross profit was attributable the reduced operations because of the sale of
      the
      business during the November 30, 2006 quarter.





Se *lling,
      General and Administrative* expenses
      for the three months ended February 28, 2007, increased to $813,692 compared
      to
      $730,893 for the three months ended February 28, 2006. These expenses consist
      primarily of wages (and wage related costs), outside contractor expenses,
      travel/promotional expenses, professional services and facilities/office related
      expenses.





Se *lling,
      General and Administrative* expenses
      attributable to business held for sale for the three months ended February
      28,
      2007, decreased to $68,568 compared to $638,238 for the three months ended
      February 28, 2006. The decrease is related to the sale of a majority of the
      business.





*Research
      and development* expenses
      for the three months ended February 28, 2007, was $18,750 compared to $37,500
      for the three months ended February 28, 2006.





*Depreciation
      and amortization* expenses
      for the three months ended February 28, 2007, and February 28, 2006, were
      $47,818 and $141,066, respectively.





*Interest
      expense* for the
      three months ended February 28, 2007 and February 28, 2006, was $123,228 and
      $96,091, respectively the increase was due to additional interest paid to retire
      a secured note.





*Interest
      expense* attributable to the business held for sale for the three months ended February
      28, 2007 and February 28, 2006, was $42,288 and $118,196, respectively. The
      decrease was due to a lower loan carrying amount at TAP Holdings
      LLC.




16





*Minority
      Interest* for the
      three months ended February 28, 2007 and February 28, 2006, is $5,483 and
      $6,282, respectively





*Income
      Taxes* for the
      three months ended February 28, 2007 and February 28, 2006, is 0 and $0,
      respectively





As
      a
      result of the foregoing, net income (losses) for the three months ended February
      28, 2007 and
      February 28, 2006 ,
      are
      $(957,219) and $(998,252), respectively.





As
      a
      result of the foregoing, net income (losses) attributable to business held
      for
      sale for the three months ended February 28, 2007 and
      February 28, 2006 ,
      are
      $(124,161) and $(119,818), respectively.





**NINE
      MONTHS ENDED FEBRUARY 28, 2007 COMPARED TO THE NINE MONTHS ENDED FEBRUARY 28,
      2006.**




*Net
      revenues* for the
      nine-month period ended February 28, 2007 increased to $220,232 compared to
      $40,650 for the same 2006 period. The increase in net revenue is attributable
      to
      an increase in sales of our health care products.





*Net
      revenues* attributable to business held for sale for the nine-month period ended February
      28, 2007 decreased to $2,781,808 compared to $6,025,180 for the same 2006
      period. This decrease is directly attributable to the sale of a majority of
      the
      business during the November 30, 2006 quarter.





*Cost
      of revenues* for the
      nine-month period ended February 28, 2007 was $99,159 compared to $25,234 for
      the same 2006 period. The increase in cost of revenues is directly related
      to
      the increase in sales.





*Cost
      of revenues* attributable to business held for sale the nine-month period ended February
      28,
      2007 was $2,250,226 compared to $4,374,252 for the quarter ended February 28,
      2006. The decrease in cost of revenues was attributable the reduced operations
      because of the sale of the business during the November 30,2006 quarter.





*Gross
      profit* for
      the
      nine months ended February 28, 2007 was $121,073 compared to $15,416 for the
      same period a year ago.





*Gross
      profit* attributable
      to business held for sale for the nine-months ended February 28, 2007 was
      $531,582 compared to $1,650,928 for the same period a year ago. The
      decrease in gross profit was attributable the reduced operations because of
      the
      sale of the business at the beginning of the November 30, 2006 quarter.





Se *lling,
      General and Administrative* expenses
      for the nine-months ended February 28, 2007, increased to $2,376,915 compared
      to
      $2,213,945 for the nine-months ended February 28, 2006. These expenses consist
      primarily of wages (and wage related costs), outside contractor expenses,
      travel/promotional expenses, professional services and facilities/office related
      expenses.





Se *lling,
      General and Administrative* expenses
      attributable to business held for sale for the nine-months ended February 28,
      2007, decreased to $1,387,565 compared to $1,907,801 for the nine-months ended
      February 28, 2006. The decrease is related to costs incurred in closing down
      the
      business.




17





*Research
      and development* expenses
      for the nine-months ended February 28, 2007, was $75,000 compared to $112,500
      for the nine-months ended February 28, 2006.





*Depreciation
      and amortization* expenses
      for the nine-months ended February 28, 2007, and February 28, 2006, were
      $330,019 and $423,197, respectively.





*Interest
      expense* for the
      nine-months ended February 28, 2007 and February 28, 2007, was $318,422 and
      $291,560, respectively.





*Interest
      expense* attributable to the business held for sale for the nine-months ended February
      28, 2007 and February 28, 2006, was $291,908 and $323,227, respectively. The
      decrease was due to a lower loan carrying amount at TAP Holdings
      LLC.





*Minority
      Interest* for the
      nine-months ended February 28, 2007 and February 28, 2006, is $18,020 and
      $18,626, respectively





*Income
      Taxes* for the
      nine-months ended February 28, 2007 and February 28, 2006, is 2,400 and $7,000,
      respectively





As
      a
      result of the foregoing, net income (losses) for the nine-months ended February
      28, 2007 and
      February 28, 2006 ,
      are
      $(2,963,663) and $(3,014,160), respectively.





As
      a
      result of the foregoing, net income (losses) attributable to business held
      for
      sale for the nine-months ended February 28, 2007 and
      February 28, 2006 ,
      are
      $333,577 and $(528,931), respectively.




**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 February 28, 2007,
      we
      had a working capital deficit of $(7,891,661) compared to working capital of
      $551,319 at May 31, 2006. The large change is a direct result of the sale of
      most of the current assets of TAP Holdings, LLC which resulted in a long term
      note. At February 28, 2007, we had a cash balance of approximately $22,725.
      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 securityholders. Our
      independent certified public accountant included an explanatory paragraph in
      its
      report for the year ended May 31, 2006, 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
      $(1,829,062) for the nine-months ended February 28, 2007  compared
      to $(2,065,789) for the nine-months ended February 28, 2006. The decrease was
      primarily due to an increase in accrued expenses.




18





*Net
      cash used in investing activities* for the
      nine-months ended February 28, 2007, was $0 as compared to $(3,439) for the
      nine-months ended February 28, 2006.





*Net
      cash provided by financing activities* for the
      nine-months ended February 28, 2007, was $1,770,432 as compared to $2,135,615
      for the nine-months ended February 28, 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 (“G.E.”)
          pursuant to which we borrowed $5,500,000 for the purchase of CoinBank component
          equipment, working capital and general corporate purposes. The G.E. loan
          is
          secured by certain of our CoinBank machines. In 2000, we entered inot the
          firest
          of several loan renewals with G.E.,the most recent of which was executed
          in
          December, 2006 and will expire in February, 2008. Payments are interest
          only and
          we have no present plan or capability to repay G.E. its principal. As of
          February 28, we owed $3,654,096 including principal and financing
          fees.





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., 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 to 48 investors. 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. The remaining 6 notes are in default of their
      original or restructured terms. As of February 28, 2007 we owed $434,646 in
      principal interest to the 6 remaining noteholders.




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 February 28, 2007, there was $882,701 outstanding including
      interest.


The
        outstanding balance is expected to be fully paid by approximately August,
        2007
        from the collection of remaining Tomco receivables (which were not sold by
        TAP
        in the Tomco sale transaction) and monthly note payments from the acquirer
        of
        the Tomco assets.




19


**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, 2006 and 2005, we had
      net
      sales of $8,208,226 and $5,718,886, respectively. Virtually all of our revenues
      for the fiscal year ended May 31, 2005 until
      the
      quarter ending November 30, 2006 werederived from our TAP
      subsidiary; however TAP operations substantially ceased in October, 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, 2006 we have incurred losses since our inception.
      For the last two fiscal years ended May 31, 2006 and 2005, net income (losses)
      of ($5,038,393) and $3,655,760 respectively. Net income for the fiscal year
      ended May 31, 2005, was derived principally from our purchase of the Tomco
      assets. While management believes that it will generate operating profits
      in the future, no assurance can be given. In its reports accompanying our
      audited financial statements for the fiscal years ended May 31, 2006 and 2005,
      our independent auditors included an explanatory paragraph wherein they
      expressed substantial doubt about our ability to continue as a going concern.
      For the nine month period ended February 28, 2007 we have incurred additional
      (losses) of (2,630,086).





**We
      are unable to pay our current liabilities, and must rely on the continued
      forbearance of specific creditors to avoid bankruptcy.**





As
      of
      February 28, 2007 we had outstanding current liabilities of $10,427,563, of
      which approximately $434,646 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 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
      February 28, 2007, Cash Tech had working capital deficit of $7,891,661 and
      available cash of $22,725. 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 February 28, 2007, we also owe $3,654,096
      to
      General Electric Capital Corporation. In 2000, we entered into the first of
      several loan renewals with G.E., the most recent of which was executed in
      December 2006 and will expire on February 1, 2008. We have no current
      arrangement or capability to repay G.E. its principal.




20





**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 holders of the notes in the principal and interest amount of
      $434,646 issued in a placement which was completed in January 2000, equipment
      liens in favor of 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.




The
      G.E.
      loan is secured by certain of our CoinBank machines. As of May 31,2006, we
      were
      indebted to G.E. in the amount of approximately $3,654,096 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 chairman (who is not an employee of Cash Technologies). As of February
      28,
      2007 we owed BFI approximately $882,701 including interest. The
      outstanding balance owed to BFI is expected to be fully paid by approximately
      August, 2007 from the collection of remaining Tomco receivables (which were
      not
      sold by TAP in the Tomco sale transaction) and monthly note payments from the
      acquire of the Tomco assets.





**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 our TAP Holdings, LLC**





**TAP’s cash
      flow is 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 to allow TAP’s assets to be transferred to Champion. The
      remainder of the purchase price is in the form of a $9.1 million promissory
      note
      with a term of 11 years, monthly payments for which are calculated based on
      a
      percentage of the total carburetor sales by Champion. While Champion’s projected
      revenues are expected to result in the note being paid in full during its term,
      poor performance by Champion, its customers or the carburetor industry, or
      a
      default or bankruptcy by Champion could result in a disruption in monthly
      payments and the note amount not being fully paid. Further, Champion’s payment
      obligations under the note shall cease at the end of the 11-year term even
      if
      the note amount has not been paid in full if through no act of default by
      Champion. Under
      the
      terms of the Champion note, the initial six payments beginning February, 2007
      are $100,000 per month. Thereafter, payments will vary based on the terms of
      the
      note. In any event, however, such payments shall, for the foresccable future,
      constitute a material contribution to the Company’s cash flow and the loss of
      such payments for any reason could have a material adverse
      affect.**




21





**Risks
      Related to Our Healthcare software 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.





**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.





**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 Business**




**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 May 31, 2006.
        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 based. 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, 2006, we
        sold
        eight (8) machines for $31,620. 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.




22





We
      may
      not fully recover the carrying value of our CoinBank machines held for sale.




**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.




23




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 EMMA technology, 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.




**Risks
      Related to Our Management**




24




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,
      securityholders 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
      securityholders instituting derivative litigation against directors and officers
      and may discourage or deter securityholders 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 securityholders.




**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 five 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.





**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. Since
      June 1, 2005, the sale price for our common stock, as reported by the American
      Stock Exchange has fluctuated from a low of $0.55 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 commercialproducts
                by us or our competitors.






25






·
            changes
                in government regulation and policies which may beundertaken
                with respect to security issues related to terrorism,privacy
                and other matters.




·
            developments
                in the patents or other proprietary rights owned orlicensed
                by us or our competitors.




·
            matters
                related to our financial condition, including our ability toobtain
                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
      securityholders, 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.




26




**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.




27


**PART
      II. OTHER INFORMATION**





**ITEM
      1. LEGAL PROCEEDINGS**





In
      February 2003 Abraham Mirman of Samson Consulting Corp. was hired, interalia,
      to
      provide consulting services and arrange financing for us. The term of the
      agreement was 12 months at a monthly cost of $50,000 or an equivalent value
      in
      shares of our stock; either party had the right to terminate after one month
      for
      any reason. Shortly thereafter, we terminated the agreement for Samson's failure
      to perform. In July 2004, Mirman initiated an arbitration in New York State
      claiming that the agreement was wrongfully terminated and that Samson was owed
      $600,000 in damages plus costs. In June 2005, an arbitrator awarded Sampson
      $100,000 in unpaid fees, $21,650 in statutory interest through July 20, 2005
      and
      no attorney fees or costs. Subsequently, we initiated a lawsuit against Mirman
      in California, alleging that he failed to provide financing promised in
      February, 2003, causing damages in excess of $400,000. In February 2006, both
      parties agreed to settle all outstanding claims without any funds exchanged;
      i.e. we have dismissed our California lawsuit and Samson has vacated its New
      York judgment




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, passed away 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 tentative settlement in which the shares would be returned to us
      without any exchange of money, pending execution of final settlement
      documentation. 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**





In
      the
      fiscal quarter ended February 28, 2007, in private transactions under Section
      4(2) of the Securities Act of 1933, as amended, the Company sold 278,000 shares
      of the Company’s Common Stock for gross proceeds of $299,100. In addition, the
      Company issued 232,500 five year Common Stock purchase warrants with exercise
      prices ranging from $1.65 to $2.00.





The
      proceeds from these transactions will be used primarily for the day to day
      operations of the Company.





**ITEM
      3. DEFAULT UPON SENIOR SECURITIES**




28





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 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 original warrant previously
      held. An additional noteholder has converted $120,876 of his note for 151,095
      common shares. The remaining 6 notes are in default of their original or
      restructured terms. As of February 28, 2007 we owed $434,646 in principal
      interest to the 6 remaining noteholders.




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





During
      this nine-month period ended February 28, 2007, there have not been any matters
      submitted for a vote from the security holders.




**ITEM
      5. OTHER INFORMATION**





**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 November 4, 2005 under Item 3.01.Report
                  on Form 8-K/A filed on November 9, 2005 under Item
                  3.01.
   29


**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 February 28, 2007, to be signed on its behalf by the undersigned,
      thereunto duly authorized the 19th day of April 2007.





CASH
              TECHNOLOGIES,
              INC.By: /S/ Bruce KormanBruce KormanPresident and Chief Executive
              Officer


By: /S/Edmund
                KingEdmund KingChief Financial Officer
 30