**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 NOVEMBER 30, 2005





OR





[_]
      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 [_].








Indicate
      the number of shares outstanding of each of the registrant's classes of common
      stock, as of the latest practicable date.





On
      January 20, 2006, there were 20,022,057 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 [ ] No [X]









**CASH
      TECHNOLOGIES, INC.**


**FORM
      10-QSB**





**INDEX**











**PART
      I. FINANCIAL INFORMATION**





**PAGE
                  NO.**Item
                  1.
              Consolidated
                  Financial Statements:Consolidated
                  Balance Sheets as of November 30, 2005 (unaudited) and May 31,
                  2005
              3Consolidated
                  Statements of Operations for the three and six-month periods ended
                  November 30, 2005 and November 30, 2004 (unaudited)
              4Consolidated
                  Statements of Cash Flows for the six-month periods Ended November
                  30, 2005
                  and November 30, 2004 (unaudited)
              5Notes
                  to Consolidated Financial Statements for the three and six-month
                  periods
                  ended November 30, 2005 and November 30, 2004 (unaudited)
              6Item
                  2.
              Management's
                  Discussion and Analysis of Financial Condition, Results of Operations,
                  and
                  Risk Factors
              15Item
                  3.
              Controls
                  And Procedures
              27PART
                  II. OTHER INFORMATIONItem
                  1.
              Legal
                  Proceedings
              28Item
                  2.
              Unregistered
                  Sales of Equity Securities and Use of Proceeds
              28Item
                  3.
              Defaults
                  Upon Senior Securities
              28Item
                  4.
              Submission
                  of Matters to a Vote of Security Holders
              29Item
                  5.
              Other
                  Information
              29Item
                  6.
              Exhibits
                  and Reports on Form 8-K
              29SIGNATURES
              
              30







2


**PART
      I**





**ITEM
      1. FINANCIAL STATEMENTS**





**CASH
      TECHNOLOGIES, INC.**


**CONSOLIDATED
      BALANCE SHEETS**


**(UNAUDITED)**




**NOVEMBER
                      30,**
                  
                  **MAY
                      31,****2005**
                  
                  **2005****ASSETS**CURRENT
                      ASSETS:Cash
                      and cash equivalents
                  
                  $
                  144,222
                  
                  $
                  163,627Accounts
                      receivable
                  
                  
                  1,617,407
                  
                  
                  1,734,616Prepaid
                      expenses and other current assets
                  
                  
                  831,459
                  
                  
                  749,954Other
                      receivable
                  
                  
                  28,035
                  
                  
                  28,035Inventory
                      (net of allowance $1,180,000)
                  
                  
                  8,964,398
                  
                  
                  8,508,323Total
                      Current Assets
                  
                  
                  11,585,521
                  
                  
                  11,184,555CoinBank
                      machines held for sale
                  
                  
                  615,060
                  
                  
                  638,283PROPERTY
                      AND EQUIPMENT (net)
                  
                  
                  50,054
                  
                  
                  51,084CAPITALIZED
                      SOFTWARE COSTS
                  
                  
                  606,415
                  
                  
                  886,300CDHC
                      PREFERRED STOCK
                  
                  
                  900,901
                  
                  
                  900,901OTHER
                      ASSETS
                  
                  
                  305,427
                  
                  
                  449,745**TOTAL**
                  
                  **$**
                  **14,063,378**
                  
                  **$**
                  **14,110,868****LIABILITIES
                      AND STOCKHOLDERS' EQUITY**CURRENT
                      LIABILITIES:Current
                      maturities of Notes Payable (Note 5)
                  
                  $
                  5,688,153
                  
                  $
                  5,654,098Due
                      to Officers and Directors
                  
                  
                  8,915
                  
                  
                  8,915Convertible
                      debt (Note 5)
                  
                  
                  486,517
                  
                  
                  472,975Due
                      to Shareholders (Note 5)
                  
                  
                  170,750
                  
                  
                  270,750Accounts
                      payable
                  
                  
                  1,774,034
                  
                  
                  1,967,800Accrued
                      liabilities
                  
                  
                  1,737,904
                  
                  
                  813,439Dividend
                      payable
                  
                  
                  395,701
                  
                  
                  128,589Total
                      Current Liabilities
                  
                  
                  10,261,974
                  
                  
                  9,316,566Long-Term
                      Notes Payable (Note 6)
                  
                  
                  11,767
                  
                  
                  13,807**TOTAL
                      LIABILITIES**
                  
                  
                  10,273,741
                  
                  
                  9,330,373COMMITMENTS
                      & CONTINGENCIES (Note 2)
                  
                  
                  -
                  
                  
                  -MINORITY
                      INTEREST (Note 9)
                  
                  
                  622,323
                  
                  
                  634,666STOCKHOLDERS'
                      EQUITY: (Note 3)Cumulative
                      Redeemable Preferred Stock, 1,000,000 shares authorized,
                  
                  
                  4,195,812
                  
                  
                  4,195,812Common
                      Stock, $0.01 par value, 20,000,000 shares authorized,
                  
                  
                  200,307
                  
                  
                  183,300Additional
                      Paid-In-Capital
                  
                  
                  38,357,621
                  
                  
                  36,652,496Accumulated
                      Deficit
                  
                  
                  (39,586,426
                  )
                  
                  (36,885,779
                  )Total
                      stockholders' equity
                  
                  
                  3,167,314
                  
                  
                  4,145,829**TOTAL
                      LIABILITIES AND STOCKHOLDERS' EQUITY**
                  
                  **$**
                  **14,063,378**
                  
                  **$**
                  **14,110,868**









See
      notes
      to consolidated financial statements





3





**CASH
      TECHNOLOGIES, INC.**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS**


**(UNAUDITED)**




**THREE
                MONTH PERIOD**
            
            **FOR
                SIX MONTHS****ENDED
                NOVEMBER
                30,**
            
            **ENDED
                NOVEMBER 30,****2005**
            
            **2004**
            
            **2005**
            
            **2004****(Unaudited)**NET
                REVENUES
            
            $
            2,024,112
            
            $
            549,466
            
            $
            3,851,109
            
            $
            564,230COST
                OF REVENUES
            
            
            1,475,634
            
            
            397,799
            
            
            2,822,397
            
            
            410,924**GROSS
                PROFIT (LOSS)**
            
            
            548,478
            
            
            151,667
            
            
            1,028,712
            
            
            153,306SELLING,
                GENERAL, & ADMINISTRATIVE EXPENSE
            
            
            1,309,056
            
            
            930,237
            
            
            2,752,784
            
            
            1,605,502RESEARCH
                AND DEVELOPMENT
            
            
            37,500
            
            
            45,000
            
            
            75,000
            
            
            90,000IMPAIRMENT
                ON COIN MACHINES
            
            
            -
            
            
            -
            
            
            -
            
            
            -DEPRECIATION
                & AMORTIZATION EXPENSE
            
            
            141,066
            
            
            140,861
            
            
            281,961
            
            
            281,504**OPERATING
                LOSS**
            
            
            (939,144
            )
            
            (964,431
            )
            
            (2,081,033
            )
            
            (1,823,700
            )INCOME
                FROM FORGIVENESS OF DEBT
            
            
            (664
            )
            
            (438,513
            )
            
            (51,169
            )
            
            (438,513
            )INTEREST
                EXPENSE
            
            
            203,833
            
            
            124,476
            
            
            400,499
            
            
            221,621LOSS
                BEFORE INCOME TAXES
            
            
            (1,142,313
            )
            
            (650,394
            )
            
            (2,430,363
            )
            
            (1,606,808
            )INCOME
                TAXES
            
            
            2,200
            
            
            -
            
            
            7,000
            
            
            -MINORITY
                INTEREST (Note 9)
            
            
            (6,082
            )
            
            (18,550
            )
            
            (12,343
            )
            
            (31,899
            )Net
                Income (Loss) Before Extraordinary Gain
            
            **$**
            **(1,138,431**
            **)**
            **$**
            **(631,844**
            **)**
            **$**
            **(2,425,020**
            **)**
            **$**
            **(1,574,909**
            **)****Extraordinary
                Gain**
            
            $
            -
            
            $
            5,999,951
            
            $
            -
            
            $
            5,999,951**Minrity
                Interest - Extraordinary Gain**
            
            $
            -
            
            $
            659,995
            
            $
            -
            
            $
            659,995**NET
                INCOME (LOSS)**
            
            $
            (1,138,431
            )
            $
            4,708,112
            
            $
            (2,425,020
            )
            $
            3,765,047Dividends
                & deemed dividends
            
            $
            225,212
            
            $
            240,554
            
            $
            275,627
            
            $
            324,583Net
                income (loss) allocable to commonshareholders
            
            $
            (1,363,643
            )
            $
            4,467,558
            
            $
            (2,700,647
            )
            $
            3,440,464Basic
                and diluted net income (loss) per share beforeextraordinary
                income
            
            $
            (0.08
            )
            $
            (0.06
            )
            $
            (0.15
            )
            $
            (0.13
            )Basic
                and diluted net income (loss) per share forextraordinary
                income
            
            $
            -
            
            $
            0.35
            
            $
            -
            
            $
            0.35Basic
                and diluted net income (loss) per share
            
            $
            (0.08
            )
            $
            0.29
            
            $
            (0.15
            )
            $
            0.22Basic
                and diluted weighted averageshares
                of common stock outstanding
            
            
            18,011,905
            
            
            15,114,187
            
            
            18,011,905
            
            
            15,114,187





See
      notes
      to consolidated financial statements.





4


**CASH
      TECHNOLOGIES, INC.**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**(UNAUDITED)**




**FOR
                  THE SIX MONTHS ENDED NOVEMBER 30,****2005**
              
              **2004****OPERATING
                  ACTIVITIES:**Net
                  loss
              
              $
              (2,425,020
              )
              $
              3,765,047Adjustments
                  to reconcile net loss to net cash used byoperating
                  activities:Extraordinary
                  Gain
              
              
              -
              
              
              (5,999,951
              )Minority
                  interest
              
              
              (12,343
              )
              
              628,097Amortization
                  of capitalized software
              
              
              279,885
              
              
              279,885Noncash
                  compensation expense
              
              
              3,308
              
              
              -Income
                  on forgiveness of debt
              
              
              (51,169
              )
              
              (438,513
              )Depreciation
                  expense
              
              
              2,076
              
              
              1,620Changes
                  in operating assets and liabilities:Inventory
              
              
              (456,075
              )
              
              (135,841
              )Account
                  receivable
              
              
              117,209
              
              
              (22,913
              )CoinBank
                  machines held for sale
              
              
              23,223
              
              
              13,934Prepaid
                  expenses and other current assets
              
              
              (81,505
              )
              
              5,655Other
                  assets
              
              
              144,318
              
              
              -Accounts
                  payable
              
              
              (142,597
              )
              
              (43,785
              )Accrued
                  interest
              
              
              47,599
              
              
              221,621Accrued
                  expenses and other current liabilities
              
              
              924,432
              
              
              80,386Net
                  cash used in operating activities
              
              
              (1,626,659
              )
              
              (1,644,758
              )**INVESTING
                  ACTIVITIES:**Investment
                  in subsidiary
              
              
              -
              
              
              (650,000
              )Purchase
                  of property and equipment
              
              
              (1,046
              )
              
              (5,746
              )Net
                  cash provided by (used in) investing activities
              
              
              (1,046
              )
              
              (655,746
              )**FINANCING
                  ACTIVITIES:**Proceeds
                  from conversion of warrants
              
              
              340
              
              
              188,615Proceeds
                  from short-term debt
              
              
              -
              
              
              889,916Repayments
                  on short-term debt
              
              
              (100,000
              )
              
              (228,694
              )Repayments
                  on long-term debt
              
              
              (2,040
              )
              
              -Proceeds
                  on sale of preferred stock
              
              
              -
              
              
              832,000Proceeds
                  from sale of common stock
              
              
              1,710,000
              
              
              490,000Net
                  cash provided by financing activities
              
              
              1,608,300
              
              
              2,171,837**CHANGE
                  IN CASH AND CASH EQUIVALENTS**
              
              
              (19,405
              )
              
              (128,667
              )Cash
                  and Cash Equivalents, Beginning of Period
              
              
              163,627
              
              
              137,516Cash
                  and Cash Equivalents, End of Period
              
              $
              144,222
              
              $
              8,849**SUPPLEMENTAL
                  DISCLOSURE OF CASH FLOW INFORMATION**Income
                  taxes
              
              $
              7,100
              
              $
              -**SUPPLEMENTAL
                  DISCLOSURE OF NONCASH TRANSACTIONS**Conversion
                  of preferred stock into common stock
              
              $
              -
              
              $
              12,500Issuance
                  of common stock purchase warrants for services performed
              
              $
              3,308
              
              $
              -Dividends
                  declared on preferred stock
              
              $
              267,112
              
              $
              168,058Deemed
                  dividend on warrants issued
              
              $
              8,515
              
              $
              156,525Total
                  assets purchased
              
              $
              -
              
              $
              10,798,988Total
                  liabilities assumed
              
              $
              -
              
              $
              2,299,037Net
                  assets purchased
              
              $
              -
              
              $
              8,499,951Bank
                  debt assumed
              
              $
              -
              
              $
              (1,600,000
              )Loan
                  assumed
              
              $
              -
              
              $
              (250,000
              )Cash
                  paid as investment in subsidiary
              
              $
              -
              
              $
              (650,000
              )Extrodinary
                  gain
              
              $
              -
              
              $
              5,999,951





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 activity 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, 2005, indicating there is substantial doubt regarding
      our
      ability to continue as a going concern. The accompanying consolidated financial
      statements do not include any adjustments that might result from the outcome
      of
      any uncertainty.





PRESENTATION
      OF INTERIM INFORMATION:





In
      the
      opinion of the management of Cash Technologies, Inc. (“Cash Tech” or the
      "Company"), the accompanying unaudited condensed consolidated financial
      statements include all normal adjustments considered necessary to present fairly
      the financial position as of November 30, 2005 and the results of operation
      and
      cash flows for the three and six-month periods ended November 30, 2005 and
      November 30, 2004. 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, 2005, filed with the SEC.
      The results of operations for the three and six-month periods ended November
      30,
      2005, 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 $37,500 for the three month period ended November 30, 2005.





6


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 quarter ended
      November 30, 2005, we amortized an additional $139,942 of capitalized
      software.





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. Certain of these
      potential uses have been given trade names such as PrISM (PrISM uses EMMA’s
      fraud detection to control access to a physical location). 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, inter alia,
      to provide consulting services and to 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 arbitration in New York State
      claiming that the agreement was wrongfully terminated and that Samson was owed
      damages. In the arbitration Samson claimed that it was owed fees for the entire
      12 month term of the agreement, plus attorneys’ fees. We alleged that Samson had
      failed to perform its obligations, had failed to provide any promised financing
      and that Mirman had induced us to enter into the contract under false and
      deceptive pretenses. In June 2005, an arbitrator determined that Mirman was
      owed
      2 months fees and thus awarded Sampson $100,000 in unpaid fees, $21,650 in
      statutory interest through July 20, 2005 and no attorney fees. As of August
      31,
      2005, we have fully accrued for this liability. We are undertaking an appeal
      of
      the arbitrator's decision in New York.





8


In
      addition, we have 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. There can be no assurance that our New York appeal or
      California case will prove successful. This litigation will continue to incur
      legal costs until its conclusion.




In
      2001
      we delivered stock certificates representing 700,000 shares to an escrow agent
      as collateral for a loan. The loan was never consummated, and in May 2001 we
      notified the transfer agent to cancel the shares. Thereafter the escrow agent,
      an attorney, died and we were never able to recover the certificates. In August,
      2004 it came to our attention that a party was improperly attempting to transfer
      450,000 of the 700,000 shares. We immediately initiated a lawsuit in New York
      to
      prevent the transfer of the shares and have them retired. In December, 2004,
      we
      reached a settlement in which the shares would be returned to us without any
      exchange of money. We intend to similarly pursue the recovery of the remaining
      250,000 shares, however in the event that we cannot achieve a satisfactory
      outcome in such effort, or in the event that the pending settlement is not
      consummated for any reason, some or all of these shares may be treated as
      outstanding and our Stockholders' Equity line item would have to be adjusted
      to
      reflect such additional shares.








**NOTE
      3: STOCKHOLDERS EQUITY**





During
      the fiscal quarter ended November 30, 2005, in a private transaction under
      Section 4(2) of the Securities Act of 1933, as amended, we sold 600,000 shares
      of common stock and 600,000 of our common stock purchase warrants for gross
      proceeds of $600,000 to four previous shareholders. The common stock purchase
      warrants have an exercise price of $2.50 and an exercise life of 5
      years.





During
      the fiscal quarter ended November 30, 2005, in a private transaction under
      Section 4(2) of the Securities Act of 1933, as amended, we sold 66,667 shares
      of
      common stock for gross proceeds of $60,000 to one previous shareholder. We
      also
      issued to that same investor 30,000 of our common stock purchase warrants with
      an exercise price of $1.75. All common stock purchase warrants have an exercise
      life of 5 years.





During
      the fiscal quarter ended November 30, 2005, in a private transaction under
      Section 4(2) of the Securities Act of 1933, as amended, we sold 47,619 shares
      of
      common stock for gross proceeds of $50,000 to one previous European shareholder.
      We also issued to that same investor 23,809 of our common stock purchase
      warrants with an exercise price of $2.50. All common stock purchase warrants
      have an exercise life of 5 years.





During
      the fiscal quarter ended November 30, 2005, we issued 10,000 of our common
      stock
      purchase warrants with an exercise price of $0.90 in lieu of cash for consulting
      services. Based on the Black-Scholes option-pricing model we recognized an
      expense of $3,308.





Subsequent
      to the fiscal quarter ended November 30, 2005, in a private transaction under
      Section 4(2) of the Securities Act of 1933, as amended, we sold 175,000 shares
      of common stock for gross proceeds of $175,000 to three previous shareholders
      and one new accredited investor. We also issued to that same investors 175,000
      of our common stock purchase warrants with an exercise price of $2.00. All
      common stock purchase warrants have an exercise life of 5 years.





9


**NOTE
      4: RELATED PARTY TRANSACTIONS**





We
      obtained loans of $68,000 in the fiscal year ended May 31, 2002 and $342,700
      during the fiscal year ended May 31, 2003 from Bruce Korman (and related
      parties) who is our Chief Executive Officer and Chairman of our Board of
      Directors. The loans were short-term loans and as of November 30, 2005, $8,915
      is outstanding to Mr. Korman. The loans are short-term non-interest bearing
      loans and are payable upon demand. Furthermore, as of November 30, 2005, we
      were
      in arrears of $290,874 for salary to Mr. Korman, $39,478 in expense
      reimbursements and owe $41,105 in accrued rent for our offices to a company
      in
      which Mr. Korman has a beneficial interest.








**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 General Electric
      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 expired
      in November 2005. We believe based on discussions with G.E. that another renewal
      will soon be executed; however we have no current arrangement or capability
      to
      repay G.E. its principal. As of November 30, 2005, we owed $3,654,096, which
      includes 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., one of our investment bankers and an underwriter
      in
      our initial public offering, was engaged as placement agent for this offering.
      We received gross proceeds from this offering of $3,362,000 from the sale of
      67.2 Units. As a result of this offering, we issued notes in the aggregate
      principal amount of $3,362,000 and 336,200 Series B Common Stock Purchase
      Warrants The notes were originally convertible into our Common Stock at the
      conversion rate of $9.50 per share. The Series B Warrants were originally
      exercisable at a price of $13.00 per share. The notes were originally due and
      payable on July 31, 2001. The notes were secured by a first priority lien on
      all
      of our assets.





Since
      July 31, 2001, some of the notes have been in default and some have been
      restructured. Under the restructuring, the notes were extended for two (2)
      years
      to July 2003, the noteholders agreed to surrender all old warrants priced at
      $13.50 per share to receive 2 replacement warrants for every old warrant
      surrendered. The new warrants were vested immediately, have a life of 5 years
      and were exercisable at $1.35 through December 31, 2001, $2.20 through January
      15, 2002 and $4.50 thereafter. In August, 2003, the Company proposed the
      conversion to equity of the secured convertible debt to the noteholders. The
      proposed terms included reducing the conversion price of the notes to $2.50
      per
      share and the exercise price of the warrants to $0.65. As of November 30, 2005,
      we still owed $486,517 in principal and interest to the seven remaining
      noteholders.





In
      May
      2003 we
      completed a private placement offering with
      one
      of our stockholders consisting of convertible notes and warrants.  The
      offering consisted 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 our common stock at the conversion rate of $0.50 per share. The Warrants
      are exercisable at a price of $1.00 per share. 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.





10


In
      May
      2003 we
      completed a private placement offering with
      one
      of our stockholders consisting of convertible notes and warrants.  The
      offering consisted of an unsecured convertible promissory note in the principal
      amount of $20,750, bearing interest at the rate of 5% per annum and redeemable
      warrants to purchase 30,000 shares of common stock. The note is convertible
      into
      our common stock at the conversion rate of $0.50 per share. The Warrants are
      exercisable at $0.65 per share. We also reduced the exercise price of 45,000
      Series B warrants owned by the stockholder from $4.50 to $0.65 per share which
      were converted immediately for gross proceeds to us of $29,250. The note is
      due
      and payable on May 8, 2008.





We
      obtained loans of $68,000 in the fiscal year ended May 31, 2002 and $342,700
      during the fiscal year ended May 31, 2003 from Bruce Korman, our Chief Executive
      Officer and Chairman of our Board of Directors. The loans were short-term loans
      and as of November 30, 2005, $8,915 is outstanding to Mr. Korman.





The
      Company’s subsidiary TAP Holdings, LLC which owns and operates Tomco auto
      products has an asset based equity line with a revolving credit line which
      was
      partially used for the acquisition of Tomco Auto Products and for operating
      cashflow. On November 30, 2005 the balance for the above mentioned equity line
      was approximately $1,999,325, including interest. 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. From time to time, due to fluctuations
      in
      Tomco's cash flow, TAP has requested funds from the BFI credit facility at
      advance rates higher than BFI's contract rate. To date BFI has funded all such
      requests but is under no obligation to do so. In the event that BFI refuses
      to
      fund such requests in the future, TAP could be adversely affected and might
      not
      be able to pay its obligations timely causing temporary or permanent disruption
      in the company's operations.





11


**NOTE
      6: LONG-TERM DEBT**




As
      of
      November 30, 2005 long term debt consists of the following:




Note
                Payable - Truck (a)
            
            $
            16,502Less:
                Current Maturities
            
            
            4,735Total
            
            $
            11,767





(a)
      The
      note, which is collateralized by a security interest in a truck, is payable
      in
      monthly installments of $450, including interest at 7.49% per annum.







**NOTE
      7: STOCK BASED COMPENSATION**





All
      stock
      options issued to employees have an exercise price not less than the fair market
      value of our common stock on the date of grant, and in accounting for such
      options utilizing the intrinsic value method there is no related compensation
      expense recorded in our financial statements. If the compensation had been
      determined based on the fair market value of the stock option on their dates
      of
      grant in accordance with SFAS 123 and SFAS 148, our net loss and loss per share
      for the three and six-month periods ended November 30, 2005 and November 30,
      2004, would have been increased to the pro forma amounts presented
      below:




**FOR
                THREE MONTHS**
            
            **FOR
                SIX MONTHS****ENDED
                NOVEMBER 30,**
            
            **ENDED
                NOVEMBER 30,****2005**
            
            **2004**
            
            **2005**
            
            **2004**Net
                Income (Loss)As
                Reported
            
            
            (1,138,431
            )
            
            4,708,112
            
            
            (2,425,020
            )
            
            3,765,047Pro
                Forma
            
            
            (1,590,119
            )
            
            3,459,014
            
            
            (2,876,708
            )
            
            2,515,949Basic
                and Diluted Income (loss) Per Common ShareAs
                Reported
            
            
            (0.06
            )
            
            0.31
            
            
            (0.13
            )
            
            0.25Pro
                Forma
            
            
            (0.09
            )
            
            0.23
            
            
            (0.16
            )
            
            0.17








For
      the
      three month period ended November 30, 2005, 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 21.44%, risk
      free
      interest rate of 4.42% and a 0% dividend yield. The weighted average fair value
      at the grant date for such option is $0.71 per option.





12


For
      the
      three month period ended November 30, 2004, 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 1999-2004,
      expected life of the option is 5 years, expected volatility of 52.53%, risk
      free
      interest rate of 3.72% and a 0% dividend yield. The weighted average fair value
      at the grant date for such option is $0.73 per option.





**NOTE
      8: SEGMENT REPORTING**





We
      operate through four business segments: Heuristic Technologies, Inc., TAP
      Holdings, LLC (aka “Tomco”), CoinBank machine-related activities and
      EMMA-related activities. We sell CoinBank self-service coin counting machines
      through existing equipment distribution channels. Our EMMA transaction
      processing system has not yet been deployed and all current software development
      costs are being expensed.





Information
      on our business segments for the:




**Three
                  months
                  ended**
              
              **Six
                  months ended****November
                  30,**
              
              **November
                  30,****2005**
              
              **2004**
              
              **2005**
              
              **2004**Net
                revenues:CoinBank
                  machines
              
              
              21,138
              
              
              9,058
              
              
              35,216
              
              
              23,822EMMA
              
              
              -
              
              
              -
              
              
              -Heuristic
              
              
              2,387
              
              
              -
              
              
              3,973
              
              
              -TAP
              
              
              2,000,587
              
              
              540,408
              
              
              3,811,920
              
              
              540,408Unallocated
              
              
              -
              
              
              -
              
              
              -
              
              
              -2,024,112
              
              
              549,466
              
              
              3,851,109
              
              
              564,230Interest
                  expense:CoinBank
                    machines
              
              
              -
              
              
              2,336
              
              
              -
              
              
              4,671EMMA
              
              
              -
              
              
              -
              
              
              -
              
              
              -Heuristic
              
              
              -
              
              
              -
              
              
              -
              
              
              -TAP
              
              
              106,279
              
              
              24,228
              
              
              205,047
              
              
              24,228Unallocated
              
              
              97,554
              
              
              97,912
              
              
              195,452
              
              
              192,722203,833
              
              
              124,476
              
              
              400,499
              
              
              221,621Depreciation
                  & Amortization:CoinBank
                    machines
              
              
              -
              
              
              -
              
              
              -
              
              
              -EMMA
              
              
              139,942
              
              
              139,942
              
              
              279,885
              
              
              279,885Heuristic
              
              
              -
              
              
              -
              
              
              -
              
              
              -TAP
              
              
              -
              
              
              -
              
              
              -
              
              
              -Unallocated
              
              
              1,124
              
              
              919
              
              
              2,076
              
              
              1,619141,066
              
              
              140,861
              
              
              281,961
              
              
              281,504Segment
                  Income (loss):CoinBank
                    machines
              
              
              (57,954
              )
              
              50,186
              
              
              (120,052
              )
              
              (32,068
              )EMMA
              
              
              -
              
              
              -
              
              
              -
              
              
              -Heuristic
              
              
              (261,281
              )
              
              (64,303
              )
              
              (653,726
              )
              
              (174,219
              )TAP
              
              
              (210,951
              )
              
              (106,765
              )
              
              (409,129
              )
              
              (106,765
              )Unallocated
              
              
              (608,245
              )
              
              4,828,994
              
              
              (1,242,113
              )
              
              4,078,099(1,138,431
              )
              
              4,708,112
              
              
              (2,425,020
              )
              
              3,765,047















13


**NOTE
      9: MINORITY INTEREST**





From
      November 2002 through March 2003, we received $443,000 in net proceeds from
      members for an equity share in our subsidiary CT Holdings, LLC. The minority
      members own 13.65% while we own 86.35%. The net proceeds from this have been
      used to further develop the BONUS product as well as for working capital for
      CT
      Holdings and Cash Technologies, Inc. For the three months ended November 30,
      2005, we have allocated $6,082 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 Tomco Auto
      Products, Inc. One member of TAP owns 11% while we own 89%.








**NOTE
      10: SUBSEQUENT EVENTS**





Subsequent
      to the fiscal quarter ended November 30, 2005, in a private transaction under
      Section 4(2) of the Securities Act of 1933, as amended, we sold 175,000 shares
      of common stock for gross proceeds of $175,000 to three previous shareholders
      and one new accredited investor. We also issued to that same investors 175,000
      of our common stock purchase warrants with an exercise price of $2.00. All
      common stock purchase warrants have an exercise life of 5 years.

















14





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





**SAFE
      HARBOR STATEMENT**





*In
      addition to historical information, the information included in this Form 10-QSB
      contains forward-looking statements within the meaning of Section 27A of the
      Securities Act of 1933, as amended (the ''Securities Act''), and Section 21E
      of
      the Securities Exchange Act of 1934, as amended (the ''Exchange Act''), such
      as
      those pertaining to the Company's capital resources, performance and results
      of
      operations. Forward-looking statements involve numerous risks and uncertainties
      and should not be relied upon as predictions of future events. Certain such
      forward-looking statements can be identified by the use of forward-looking
      terminology such as ''believes,'' ''expects,'' ''may,'' ''will,'' ''should,''
      ''seeks,'' ''approximately”, ''intends,'' ''plans,'' ''pro forma,''
      ''estimates,'' or ''anticipates'' or the negative thereof or other variations
      thereof or comparable terminology, or by discussions of strategy, plans or
      intentions. Such forward-looking statements are necessarily dependent on
      assumptions, data or methods that may be incorrect or imprecise and may be
      incapable of being realized. The following factors, among others, could cause
      actual results and future events to differ materially from those set forth
      or
      contemplated in the forward-looking statements: significant and immediate need
      for capital, lack of revenue, market acceptance of the Company's products,
      technological restrictions upon development, limited marketing experience,
      uncertainty of product development, including our EMMA technology, dependence
      upon new technology, need for qualified management personnel and competition.
      The success of the Company also depends upon economic trends generally,
      governmental regulation, legislation, and population changes. Readers are
      cautioned not to place undue reliance on forward-looking statements, which
      reflect management's analysis only. The Company assumes no obligation to update
      forward-looking statements.*





**Introduction**








Cash
      Technologies, Inc., is a Delaware corporation, incorporated in August 1995.
      Unless the context otherwise requires, references herein to "we," "our" or
      "Cash
      Tech" refers to Cash Technologies, Inc., and its wholly-owned and majority-owned
      subsidiaries National Cash Processors, Inc., a Delaware corporation; CoinBank
      Automated Systems, Inc., a Delaware corporation; CoinBank Automation Handels
      GmbH, organized operating in Salzburg, Austria: Cintelia Systems Inc., a
      Delaware corporation: CT Holdings, LLC., a Delaware corporation of which we
      own
      86.65%: Heuristic Technologies, Inc., a Delaware company, formed in May, 2004,
      to engage in healthcare data processing and debit card issuance: and TAP
      Holdings, LLC (dba Tomco Auto Products), of which we own 89%, formed in
      November, 2004 to acquire certain assets and assume certain liabilities of
      Tomco
      Auto Products, Inc. Our address is 1434 West 11th Street, Los Angeles,
      California 90015. Our telephone number is (213) 745-2000.





Our
      independent certified public accountant included an explanatory paragraph in
      its
      report for the year ended May 31, 2005, 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
      our EMMA Platform. Inasmuch as we will continue to develop and improve our
      various products, we will have a high level of operating expenses. We anticipate
      that losses will continue for the near future. Our expenses have exceeded net
      revenues since inception. For the three-month period ended November 30, 2005
      and
      2004, we incurred net losses before extraordinary gain of $1.13 million and
      $0.63 million, respectively.




15


Gross
      profit for the three-month period ended November 30, 2005, was $548,748, as
      compared to $151,667 for the three-month period ended November 30, 2004. The
      increase in gross profit was primarily attributable to the operations of our
      TAP
      subsidiary.




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 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 $37,500 for the three-month period ended November 30, 2005.




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 three-month
      period ended November 30, 2005, we amortized an additional $139,942 of
      capitalized software.




The
      current EMMA asset is currently valued at $606,415, which reflects the costs
      incurred by us in developing the asset, as well as the net realizable value
      estimated in management's determination. Management believes that its estimates
      reflect its ability, based upon management's internal projections, to obtain
      a
      recovery on the asset. These estimates assume that recovery of the value of
      the
      asset will be obtained commencing in the early half of 2006 calendar year,
      and
      will be obtained fully by the end of the calendar year 2007. These projections
      and estimates are subject to numerous contingencies, including, without
      limitation, the condition of the economy and the ability of corporate entities
      to purchase software such as the EMMA software.




In
      its
      projections, management has calculated transaction fees based upon the use
      of
      the technology through placement in various environments. The projected
      transaction fees are based upon management's discussions with potential
      customers, including bank and non-bank service providers. Management has had
      significant negotiations with representatives of various financial institutions
      and other commercial customers regarding the installation of EMMA based
      products. However, to date we have not consummated any definitive agreements
      with such customers.




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.





There
      can
      be no assurance that management's estimates will prove accurate and investors
      should be aware that in the event these estimates are inaccurate, a write down
      of all or a portion of this asset may be required.




We
      record
      as revenue licensing and software fees as well as coin counting machine sales
      in
      accordance with generally accepted accounting principles.




We
      are
      marketing CoinBank machines to other equipment manufacturer "OEM" customers
      (manufacturers of cash handling equipment), companies with existing equipment
      distribution and service channels and directly to retailers and financial
      institutions. Although we will continue to sell our CoinBank machines, we intend
      to focus substantially all of our efforts and operations on the continued
      development and deployment of the Heuristic products and EMMA technology and
      the
      operation of our TAP Holdings, LLC subsidiary.





16


**RESULTS
      OF OPERATIONS**





**THREE
      MONTHS ENDED NOVEMBER 30, 2005 COMPARED TO THE THREE MONTHS ENDED NOVEMBER
      30,
      2004.**




*Net
      revenues* for the
      three-month period ended November 30, 2005 increased to $2,024,112 compared
      to
      $549,466 for the same 2004 period. The increase in net revenue is attributable
      to the revenues derived from TAP Holdings, the Company’s new majority-owned
      subsidiary that operates the business of Tomco Auto Products.  During the
      three-month period ended November 30, 2005, TAP Holdings generated 99.89% of
      the
      Company’s net revenues. Since the Company purchased its majority interest in TAP
      Holdings in November 2004, net revenues during the last year’s fiscal quarter
      reflected only a few weeks of operations.





*Cost
      of revenues* for the
      three-month period ended November
      30 ,
      2005 is
      $1,475,634 compared to $397,799 for the quarter ended November
      30 ,
      2004.
      The increase in direct costs was attributable to the operations of the Company’s
      new TAP subsidiary.





*Gross
      profit* for
      the
      three months ended November
      30 ,
      2005 is
      $548,478 compared to $151,667 for the same period a year ago. The increase
      in
      gross profit was attributable to the operations of the Company’s new TAP
      subsidiary.





Se *lling,
      General and Administrative* expenses
      for the three months ended November
      30 ,
      2005,
      increased to $1,309,056 compared to $930,237 for the three months ended November
      30 ,
      2004.
      These expenses consist primarily of wages (and wage related costs), outside
      contractor expenses, travel/promotional expenses, professional services and
      facilities/office related expenses. The increase is primarily attributable
      to
      the operations of the Company’s new TAP subsidiary.





*Research
      and development* expenses
      for the three months ended November
      30 ,
      2005,
      is $37,500 compared to $45,000 for the three months ended November
      30 ,
      2004.





*Depreciation
      and amortization* expenses
      for the three months ended November
      30 ,
      2005,
      and November
      30 ,
      2004,
      were $141,066 and $140,861, respectively.





*Income
      from forgiveness of debt* for the
      three months ended November
      30 ,
      2005
      and November
      30 ,
      2004,
      is $(664) and $(438,513), respectively. The difference was due to settlement
      of
      certain liabilities by the Company in the 2004 period.





*Interest
      expense* for the
      three months ended November
      30 ,
      2005
      and November
      30 ,
      2004,
      is $203,833 and $124,476, respectively. The difference was due to the operations
      of the Company’s new TAP subsidiary.





*Minority
      Interest* for the
      three months ended November
      30 ,
      2005
      and November
      30 ,
      2004,
      is $6,082 and $18,550, respectively





*Income
      Taxes* for the
      three months ended November
      30 ,
      2005
      and November
      30 ,
      2004,
      is $2,200 and zero, respectively





*Extraordinary
      Income* for the
      three months ended November 30, 2005, was zero compared to $5,999,951 for the
      same period in 2004. The decrease was due to the extraordinary gain recognized
      in the purchase of certain assets and liabilities of Tomco Auto Products, Inc.
      in 2004.




17


*Minority
      Interest from extraordinary income* for the
      three months ended November 30, 2005 and November 30, 2004, was zero and
      $659,995, respectively





As
      a
      result of the foregoing, net income (losses) for the three months ended November
      30 ,
      2005
      and November
      30 , 2004,
      are
      $(1,138,431) and $4,708,112, respectively.







**SIX
      MONTHS ENDED NOVEMBER 30, 2005 COMPARED TO THE SIX MONTHS ENDED NOVEMBER 30,
      2004.**




*Net
      revenues* for the
      six-month period ended November 30, 2005 increased to $3,851,109 compared to
      $564,230 for the same 2004 period. The increase in net revenue is attributable
      to the operations of TAP Holdings that was acquired in November 2004.





*Cost
      of revenues* for the
      six-month period ended November
      30 ,
      2005 is
      $2,822,397 compared to $410,924 for the six months ended November
      30 ,
      2004.
      The increase in direct costs was attributable to the operations of the Company’s
      new TAP subsidiary.





*Gross
      profit* for
      the
      six-months ended November
      30 ,
      2005 is
      $1,028,712 compared to $153,306 for the same period a year ago. The increase
      in
      gross profit was attributable to the operations of the Company’s new TAP
      subsidiary.





Se *lling,
      General and Administrative* expenses
      for the six months ended November
      30 ,
      2005,
      increased to $2,752,784 compared to $1,605,502 for the six months ended November
      30 ,
      2004.
      These expenses consist primarily of wages (and wage related costs), outside
      contractor expenses, travel/promotional expenses, professional services and
      facilities/office related expenses. The increase is primarily attributable
      to
      the operations of the Company’s new TAP subsidiary.





*Research
      and development* expenses
      for the six months ended November
      30 ,
      2005,
      is $75,000 compared to $90,000 for the six months ended November
      30 ,
      2004.





*Depreciation
      and amortization* expenses
      for the six months ended November
      30 ,
      2005,
      and November
      30 ,
      2004,
      were $281,961 and $281,504, respectively.





*Income
      from forgiveness of debt* for the
      six months ended November
      30 ,
      2005
      and November
      30 ,
      2004,
      is $(51,169) and $(438,513), respectively. The difference was due to settlement
      of certain liabilities by the Company in the 2004 period.





*Interest
      expense* for the
      six months ended November
      30 ,
      2005
      and November
      30 ,
      2004,
      is $400,499 and $221,621, respectively. The difference was due to the operations
      of the Company’s new TAP subsidiary.





*Minority
      Interest* for the
      six months ended November
      30 ,
      2005
      and November
      30 ,
      2004,
      is $12,343 and $31,899, respectively





*Income
      Taxes* for the
      six months ended November
      30 ,
      2005
      and November
      30 ,
      2004,
      is $7,000 and zero, respectively





*Extraordinary
      Income* for the
      six months ended November 30, 2005, was zero compared to $5,999,951 for the
      same
      period in 2004. The decrease was due to the extraordinary gain recognized in
      the
      purchase of certain assets and liabilities of Tomco Auto Products, Inc. in
      2004.





18


*Minority
      Interest from extraordinary income* for the
      six months ended November 30, 2005 and November 30, 2004, was zero and $659,995,
      respectively





As
      a
      result of the foregoing, net income (losses) for the six months ended November
      30 ,
      2005
      and November
      30 , 2004,
      are
      $(2,425,020) and $3,765,047, 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 November 30, 2005,
      we
      have a working capital of $1,323,547 compared to a working capital deficit
      of
      $(3,329,000) at November 30, 2004. At November 30, 2005, we have a cash balance
      of approximately $144,222. 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, 2005, 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
      $1,626,659 for the six months ended November 30, 2005 compared to $1,644,758
      for
      the six months ended November 30, 2004. The
      decrease was due to an increase in accrued expenses offset by an increase
      in income from forgivenss of debt and purchase of inventory.





*Net
      cash used in investing activities* for the
      six months ended November 30, 2005, was $1,046 as compared to $655,746 for
      the
      six months ended November 30, 2004. The decrease was due to a decrease in
      investment in subsidiary.





*Net
      cash provided by financing activities* for the
      six months ended November 30, 2005, was $1,608,300 as compared to $2,171,837
      for
      the six months ended November 30, 2004. 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 General Electric
      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 expired
      in November 2005. We believe based on discussions with G.E. that another renewal
      will soon be executed, however we have no current arrangement or capability
      to
      repay G.E. its principal. As of November 30, 2005, we owed $3,654,096, which
      includes 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., one of our investment bankers and an underwriter
      in
      our initial public offering, was engaged as placement agent for this offering.
      We received gross proceeds from this offering of $3,362,000 from the sale of
      67.2 Units. As a result of this offering, we issued notes in the aggregate
      principal amount of $3,362,000 and 336,200 Series B Common Stock Purchase
      Warrants The notes were originally convertible into our Common Stock at the
      conversion rate of $9.50 per share. The Series B Warrants were originally
      exercisable at a price of $13.00 per share. The notes were originally due and
      payable on July 31, 2001. The notes were secured by a first priority lien on
      all
      of our assets.




19


Since
      July 31, 2001, some of the notes have been in default and some have been
      restructured. Under the restructuring, the notes were extended for two (2)
      years
      to July 2003, the noteholders agreed to surrender all old warrants priced at
      $13.50 per share to receive two replacement warrants for every old warrant
      surrendered. The new warrants were vested immediately, have a life of five
      years
      and were exercisable at $1.35 through December 31, 2001, $2.20 through January
      15, 2002 and $4.50 thereafter. In August, 2003, the Company proposed the
      conversion to equity of the secured convertible debt to the noteholders. The
      proposed terms included reducing the conversion price of the notes to $2.50
      per
      share and the exercise price of the warrants to $0.65. As of November 30, 2005,
      we still owed $486,517 in principal and interest to the seven remaining
      noteholders.




In
      November 2005, 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). Any outstanding balance under the credit line is due November
      5, 2006. The line of credit is collateralized by a security interest in TAP's
      accounts receivable, inventories, property and equipment and certain other
      assets as well as a limited personal guaranty from TAP's chairman, who is not
      an
      employee of Cash Technologies. TAP must also adhere to covenant limitations,
      conditions and restrictions as set forth in the loan and security agreement.
      As
      of November 30, 2005, there was $1,999,325 outstanding including interest.




From
      time
      to time, due to fluctuations in Tomco's cash flow, TAP has requested funds
      from
      the BFI credit facility at advance rates higher than BFI's contract rate. To
      date BFI has funded all such requests but is under no obligation to do so.
      In
      the event that BFI refuses to fund such requests in the future, TAP could be
      adversely affected and might not be able to pay its obligations timely causing
      temporary or permanent disruption in the company's operations.





During
      the fiscal quarter ended November 30, 2005, in a private transaction under
      Section 4(2) of the Securities Act of 1933, as amended, we sold 600,000 shares
      of common stock and 600,000 of our common stock purchase warrants for gross
      proceeds of $600,000 to four previous shareholders. The common stock purchase
      warrants have an exercise price of $2.50 and an exercise life of 5
      years.





During
      the fiscal quarter ended November 30, 2005, in a private transaction under
      Section 4(2) of the Securities Act of 1933, as amended, we sold 66,667 shares
      of
      common stock for gross proceeds of $60,000 to one previous shareholder. We
      also
      issued to that same investor 30,000 of our common stock purchase warrants with
      an exercise price of $1.75. All common stock purchase warrants have an exercise
      life of 5 years.





During
      the fiscal quarter ended November 30, 2005, in a private transaction under
      Section 4(2) of the Securities Act of 1933, as amended, we sold 47,619 shares
      of
      common stock for gross proceeds of $50,000 to one previous European shareholder.
      We also issued to that same investor 23,809 of our common stock purchase
      warrants with an exercise price of $2.50. All common stock purchase warrants
      have an exercise life of 5 years.





Subsequent
      to the fiscal quarter ended November 30, 2005, in a private transaction under
      Section 4(2) of the Securities Act of 1933, as amended, we sold 175,000 shares
      of common stock for gross proceeds of $175,000 to three previous shareholders
      and one new accredited investor. We also issued to that same investors 175,000
      of our common stock purchase warrants with an exercise price of $2.00. All
      common stock purchase warrants have an exercise life of 5 years.











20




**RISK
      FACTORS**




Investors
      should carefully consider the risks described below and in our Annual Report
      on
      Form 10-KSB. The risks and uncertainties described below and in the Annual
      Report are not the only ones facing us. If any of the following risks actually
      occur, our business, financial condition or results of operations could be
      materially adversely affected.




**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, 2004 and 2005, we had
      net
      sales of $80,616 and $5,718,886, respectively. For the six month period ended
      November 30, 2005, we had net sales of $3,851,109. Virtually all of our revenues
      for the fiscal year ended May 31, 2005 and onwards have been derived from our
      TAP subsidiary; however TAP operations do not constitute the principal
      operations that we intend to conduct in the future. We intend to focus on the
      healthcare and financial data processing products which are marketed by our
      Heuristics Technologies subsidiary, which business has recently begun marketing
      its products.




Prior
      to
      the fiscal year ended May 31, 2005 we have incurred losses since our inception.
      For the last two fiscal years ended May 31, 2004 and 2005, net income (losses)
      of $(4,382,532) 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. Despite the profit generated during the last fiscal year, we have
      continued to generate operating losses and while management believes that it
      will generated 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, 2005 and 2004, our independent auditors included an explanatory
      paragraph wherein they expressed substantial doubt about our ability to continue
      as a going concern. For the six month period ended November 30, 2005 we have
      incurred additional (losses) of $(2,425,020).





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





As
      of
      November 30, 2005 we had outstanding current liabilities of $10,261,974, of
      which approximately $486,517 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
      November 30, 2005, Cash Tech had working capital of $1,323,547 and available
      cash of $144,222. 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 development of the EMMA technology, 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, including our EMMA technology.
      As of November 30, 2005, 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 expired in November 2005. We believe based on
      discussions with G.E. that another renewal will soon be executed; however we
      have no current arrangement or capability to repay G.E. its principal.





21


**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
      $486,517 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
      General Electric loan is secured by certain of our CoinBank machines. As of
      November 30, 2005, we were indebted to General Electric Capital Corporation
      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 November
      30,
      2005 we owed BFI approximately $1,999,325 including interest. From time to
      time,
      due to fluctuations in Tomco's cash flow, TAP has requested funds from the
      BFI
      credit facility at advance rates higher than BFI's contract rate. To date BFI
      has funded all such requests but is under no obligation to do so. In the event
      that BFI refuses to fund such requests in the future, TAP could be adversely
      affected and might not be able to pay its obligations timely causing temporary
      or permanent disruption in the company's operations.





**TAP
      receives most of its sales from three customers.**




TAP
      is
      substantially dependent on just three customers: NAPA, O'Reilly Auto Parts
      and
      CARQUEST. These customers combined account for approximately 77% of TAP’s
      revenue. The loss of any of these customers would have a material adverse affect
      on TAP’s viability.




**The
      market for TAP’s products is shrinking.**




Approximately
      98% of TAP's revenue for the six month period end November 30, 2005, was from
      the sale of rebuilt carburetors. Sales of carburetors have and may continue
      to
      fluctuate or decline for two reasons. First, the availability of acceptable
      carburetor cores continues to shrink due to age or damage to used carburetors.
      TAP can manufacture new cores but has thus far not made the necessary
      investment. Secondly, the amount of vehicles using carburetors continues to
      decline since the last domestic carbureted production vehicle was manufactured
      in 1988. TAP may be able to compensate for this decline by increasing its market
      share but there is no assurance that it can succeed in this effort. In 1998
      Tomco began rebuilding diesel pumps which have a larger user base than does
      carburetors. The company also has plans to unveil new products in fiscal 2006
      and has explored certain offshore markets for its products that may be
      lucrative. However, there is no assurance that any of these measures can offset
      the continual erosion in the size of the company’s primary market. .




22


**TAP
      may not fully recover the carrying value of its core inventory.**




As
      of
      November 30, 2005 TAP had had a carrying value of for its core inventory of
      $6,360,829. In November 2004, at the time TAP's assets were purchased, an
      obsolescence reserve of $1,180,000 was established to cover potential inventory
      impairment due to low core inventory turnover. In future periods, additional
      impairment may be taken based on future carburetor sales. If TAP concludes
      that
      such impairment exists, this could give rise to a substantial expense and
      negatively impact Tomco's financial results.




**Competition
      in healthcare revenue management and prepaid debit card products is
      intense.**





Heuristic’s
      healthcare products compete with products offered by companies that are larger,
      better known and better capitalized than Heuristic. Similarly, competition
      in
      the prepaid debit card market is intense and some competitors are larger and
      more established than Heuristic. Heuristic may not be able to successfully
      compete with these companies in which event Heuristic might have to withdraw
      one
      or more of its products which would have a material adverse effect on Heuristic
      and Cash Technologies.





**Heuristic
      is liable for the loss or misuse of personal
      information.**





Heuristic
      and its 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,
      Heuristic might be liable for any damages caused thereby.





**Heuristic
      is substantially dependent on third parties for data processing and customer
      support.**





Most
      data
      processing and customer support for Heuristic’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 Heuristic’s 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 forces lower prices; increased volumes
      create economies of scale which permit lower prices, software development costs
      are eventually fully amortized, etc. The result is that There is no assurance
      that Heuristic can generate enough growth in its sales to outpace these market
      forces.





**Heuristic
      has liability for debit card losses.**





Under
      Heuristic’s agreement with its card issuing bank, Heuristic 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, Heuristic would
      be
      adversely affected.




23


**We
      are dependent on third-party marketers In our CoinBank
      business.**




The
      demand for our coin processing equipment is also subject to a high level of
      uncertainty. We do not intend to focus significant marketing efforts on the
      sale
      of our CoinBank machines but instead rely on third-party marketing organizations
      to sell the machines. The failure of our marketers to sell our machines would
      result in impairment costs for slow moving machine inventory.




**We
      are dependent on third-party manufacturers.**




We
      are
      substantially dependent on the ability of the independent contractors we hire
      to
      build our CoinBank machines. We do not manufacture our CoinBank machines. The
      failure of our independent contractors to produce machines or machine components
      on a timely basis or at all would harm sales of CoinBank machines.




**Our** **EMMA-Based
      Technology** **may not perform reliably.**




To
      date
      our deployment of EMMA-based products, such as the ATM-X and POS-X machines,
      has
      been extremely limited and we have derived no significant revenue from our
      EMMA-based applications. Thus we have insufficient information upon which we
      can
      base reliable predictions about the reliability of the technology. Although
      such
      systems and machines have performed reliably to date at their previous
      installations and in our laboratory, upon widespread commercial use they may
      not
      satisfactorily perform all of their intended functions or may not prove reliable
      in extensive utilization. Software and other technologies that are incorporated
      into our products are complex and may contain errors, which will only become
      apparent subsequent to widespread commercial use. Remedying such errors could
      require the expenditure of a substantial amount of money and could also result
      in significant delays in installing or selling our products, which could have
      a
      material adverse effect on us. We anticipate that we will continue to seek
      to
      upgrade and enhance both the hardware and software components of our products.
      Such upgrading and enhancement efforts remain subject to the risks inherent
      in
      new product development, including unanticipated technical or other problems,
      which could result in material delays in product commercialization or
      significantly increased costs.




**Effective
      marketing of our EMMA technology requires a capital investment beyond the
      Company’s current resources.**




In
      marketing our EMMA-based products and services, we are attempting to change
      the
      traditional methods by which people obtain certain financial services.
      Accordingly, the cost to effectively market such technology is significant
      and
      beyond the Company’s current resources, limiting the exposure of EMMA-based
      applications to the marketplace at the present time. Achieving market acceptance
      for EMMA will require substantial marketing efforts and the expenditure of
      a
      significant amount of funds to inform various targeted customer groups of the
      perceived benefits and advantages of EMMA. If and when the Company can expend
      the needed resources to properly market its EMMA technology, the potential
      marketplace for such products may have diminished or been satisfied with
      competing products that obviate the need for EMMA. To date, we have not
      generated any revenue from our EMMA based technology.




**If
      our EMMA Technology does not achieve market acceptance, its value will be
      severely dimished.**




The
      demand for EMMA-based services and our ability to deliver the technology is
      subject to a high level of uncertainty. If we do not realize market acceptance
      of these products, the technology will not be valuable to the Company and our
      investment in EMMA will be impaired.





24


**Our
      limited marketing capabilities may hinder our growth.**




Since
      inception, we have conducted only limited marketing activities for our
      EMMA-based products and, in addition to limited capital resources, we currently
      have limited marketing and technical experience and limited financial, personnel
      and other resources to independently undertake extensive marketing activities.
      Accordingly, our marketing efforts may not result in significant initial or
      continued market acceptance of such products and may not succeed in positioning
      EMMA as a preferred method of processing complex transactions.




**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 stockholders.





**We
      have been notified by the American Stock Exchange that our common stock may
      be
      delisted from AMEX.**




Our
      common stock is listed on American Stock Exchange ("AMEX"). When we began
      trading on the AMEX in 2000, the exchange granted us an exemption from its
      listing requirements in order for our common stock to be listed for trading
      as
      we were not in compliance with the criteria for continued listing. In November,
      2003, at the request of AMEX, we submitted a plan to come into compliance with
      the continued listing requirements by April 20, 2005. On April 20, 2005 we
      submitted a report to AMEX stating that we believed that we had met the
      requirements of the exchange and had achieved the plan's objectives, including
      increasing shareholder equity to greater than $4 million as well as meeting
      various other requirements. AMEX subsequently confirmed our compliance with
      the
      listing requirements as of the date of the report, representing the first time
      since listing on the AMEX that the Company had achieved compliance with the
      continued listing standards. However, on October 31, 2005, we again received
      a
      notice from the AMEX that we were out of compliance with the continued listing
      standards of the AMEX. Specifically, as previously disclosed in our Form 10KSB
      filed September 9, 2005 and our Form 10QSB filed October 17, 2005, the Company
      does not currently meet the requirements of Section 1003(a)(iii) of the Company
      Guide (having shareholders’ equity of less than $6 million following losses from
      continuing operations in its five most recent fiscal years). The Company had
      also disclosed its intent to submit a plan to Amex to meet these requirements.
      The October 31, 2005 notice from Amex established the dates for submission
      of
      the plan and for compliance. Amex also informed the Company that the Company
      was
      not in compliance with Section 1003(ii) of the Company Guide (having
      shareholders’ equity of less than $4 million following losses from continuing
      operations in three out of its four most recent fiscal years), Section 921
      of
      the Company Guide (failing to notify Amex in writing of the appointment of
      a new
      director that was publicly announced in the Company’s October 18, 2005 press
      release) and Section 301 (issuing $600,000 of securities in an October 2005
      private placement prior to applying for the listing of such securities and
      receiving notification from the Amex that the securities had been approved
      for
      listing). At this date, the Section 921 and Section 301 violations have been
      cured and the compliance plan to meet the required shareholder’s equity has been
      submitted. Although we believe that our plan will satisfy AMEX, no assurance
      can
      be given that AMEX will find our plan acceptable or that if the plan is found
      to
      be acceptable, that we will be able to satisfactorily and timely carry out
      that
      plan. If our plan is not deemed satisfactory or we do not meet that plan, we
      could be delisted from AMEX. In the event that our stock is de-listed we would
      be required to liquidate certain of our Preferred Stock. No assurance can be
      given that we will be able to meet or maintain the AMEX listing criteria in
      the
      future or that our progress will continue to be satisfactory to the AMEX.




25


**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.





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**





NONE




**ITEM
      2.** **UNREGISTERED
      SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**





During
      the fiscal quarter ended November 30, 2005, in a private transaction under
      Section 4(2) of the Securities Act of 1933, as amended, we sold 600,000 shares
      of common stock and 600,000 of our common stock purchase warrants for gross
      proceeds of $600,000 to four previous shareholders. The common stock purchase
      warrants have an exercise price of $2.50 and an exercise life of 5
      years.





During
      the fiscal quarter ended November 30, 2005, in a private transaction under
      Section 4(2) of the Securities Act of 1933, as amended, we sold 66,667 shares
      of
      common stock for gross proceeds of $60,000 to one previous shareholder. We
      also
      issued to that same investor 30,000 of our common stock purchase warrants with
      an exercise price of $1.75. All common stock purchase warrants have an exercise
      life of 5 years.





During
      the fiscal quarter ended November 30, 2005, in a private transaction under
      Section 4(2) of the Securities Act of 1933, as amended, we sold 47,619 shares
      of
      common stock for gross proceeds of $50,000 to one previous European shareholder.
      We also issued to that same investor 23,809 of our common stock purchase
      warrants with an exercise price of $2.50. All common stock purchase warrants
      have an exercise life of 5 years.





Subsequent
      to the fiscal quarter ended November 30, 2005, in a private transaction under
      Section 4(2) of the Securities Act of 1933, as amended, we sold 175,000 shares
      of common stock for gross proceeds of $175,000 to three previous shareholders
      and one new accredited investor. We also issued to that same investors 175,000
      of our common stock purchase warrants with an exercise price of $2.00. All
      common stock purchase warrants have an exercise life of 5 years.





**ITEM
      3. DEFAULT UPON SENIOR SECURITIES**





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 General Electric
      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 expired
      in November 2005. We believe based on discussions with G.E. that another renewal
      will soon be executed, however we have no current arrangement or capability
      to
      repay G.E. its principal. As of November 30, 2005, we owed $3,654,096, which
      includes 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. 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 are
      secured by a first priority lien on all of our assets. As of November 30, 2005,
      we still owed $486,517 in principal and interest to the noteholders.








28


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





During
      this six month period ended November 30, 2005, there have not been any matters
      submitted for a vote from the security holders.





**ITEM
      5. OTHER INFORMATION**





Subsequent
      to the fiscal quarter ended November 30, 2005, in a private transaction under
      Section 4(2) of the Securities Act of 1933, as amended, we sold 175,000 shares
      of common stock for gross proceeds of $175,000 to three previous shareholders
      and one accredited investor. We also issued 175,000 of our common stock purchase
      warrants with an exercise price of $2.00. All common stock purchase warrants
      have an exercise life of 5 years.







On
      October 14, 2005, Mr. Robin
      Richards rejoined our Board of Directors. Mr. Richards is currently Chairman
      and
      CEO of Notification Technologies, Inc., a privately held company that provides
      school-to-parent communication services throughout the U.S. Previously, he
      was
      CEO of Vivendi Universal Net USA ("VUNet USA"), a subsidiary of Vivendi
      Universal. VUNet USA operated MP3.com, Inc., Flipside Network, Moviso, a leading
      wireless service provider and VUNet USA Technologies, a leading internet
      distribution infrastructure provider. Prior to his position at VUNet USA, Mr.
      Richards was the founding president, chief operating officer and a director
      of
      MP3.com, Inc., involved in all aspects of that company’s historic impact on the
      internet and the music industry, its IPO and ultimate sale to Vivendi Universal.
      Additionally, Mr. Richards served as managing director of Tickets.com, Inc.
      and
      was founder and CEO of Lexi International, a tele-services and database
      management company. Mr. Richards served on the Board of Cash Technologies
      previously from 1999 through 2001.







**ITEM
      6. EXHIBITS AND REPORTS ON FORM 8-K**




(a)
            Exhibits
              31.1Certification
                  of Chief Executive Officer
                31.2Certification
                  of Chief Financial Officer
                32.1Certification
                  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 November 30, 2005, to be signed on its behalf by the undersigned,
      thereunto duly authorized the 23rd day of January, 2006.







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


By:
                /S/ Edmund
                  KingEdmund
                    King
                  Chief
                    Financial Officer




30