<PAGE>

                                 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, 2001

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                (IRS Employer Identification No.)
incorporation organization)

1434 W. 11/TH/ STREET, 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 December 31, 2001, there were 4,983,773 shares of common stock, $ .01 par
value, issued and outstanding.
<PAGE>

                            CASH TECHNOLOGIES, INC.
                                  FORM 10-QSB

                                     INDEX


<TABLE>
<CAPTION>
                                                                                                       PAGE NO.
<S>                                                                                                    <C>
PART I. FINANCIAL INFORMATION

Item 1.    Consolidated Financial Statements:

               Consolidated Balance Sheets as of November 30, 2001 (unaudited) and
               May 31, 2001..............................................................................  3

               Consolidated Statements of Operations for the three-month and six-month
               periods ended November 30, 2001 and 2000 (unaudited)......................................  4

               Consolidated Statements of Cash Flows for the six-month periods ended
               November 30, 2001 and 2000 (unaudited) ...................................................  5

               Notes to Consolidated Financial Statements for the six-month periods ended
               November 30, 2001 and 2000 (unaudited)....................................................  6


Item 2.    Management's Discussion and Analysis of Financial Condition and
               Results of Operations..................................................................... 12

PART II. OTHER INFORMATION

Item 1.    Legal Proceedings............................................................................. 19

Item 2.    Changes in Securities......................................................................... 20

Item 3.    Default Upon Senior Securities ............................................................... 20

Item 4.    Submission of Matters to a Vote of Security Holders........................................... 20

Item 5.    Other Information............................................................................. 21

Item 6.    Exhibits and Reports on Form 8-K.............................................................. 21

SIGNATURES............................................................................................... 22
</TABLE>

                                       2
<PAGE>

PART I.  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS

                            CASH TECHNOLOGIES, INC.
                     CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                  NOVEMBER 30          MAY 31
                                                                                      2001              2001
                                                                              -------------------   ------------
                                                                                   (Unaudited)
<S>                                                                           <C>                   <C>
ASSETS
------
CURRENT ASSETS:
Cash and cash equivalents                                                      $     150,730        $          -
Accounts receivable                                                                   88,373              23,714
Other receivables (net of allowance $21,000 )                                         70,167             100,666
Prepaid expenses and other current assets                                             45,000              52,500
                                                                               -------------        ------------

Total Current Assets                                                                 354,270             176,880

COINBANK MACHINES HELD FOR SALE                                                    1,136,404           1,196,783

E-COMMERCE MESSAGE MANAGEMENT ARCHITECTURE                                         2,713,870           2,362,749

OTHER:
     PROPERTY AND EQUIPMENT (net)                                                     84,586             141,797

     DEEMED INTEREST - GE CAPITAL                                                    319,444             277,778

     OTHER ASSETS                                                                     41,402               4,629
                                                                               -------------        ------------
TOTAL ASSETS                                                                       4,649,976           4,160,616
                                                                               =============        ============

LIABILITIES AND STOCKHOLDERS DEFICIENCIES

CURRENT LIABILITIES:

Accounts payable                                                                   1,087,952             969,129
Accrued expenses and other current liabilities                                     1,302,021             943,871
Dividends payable                                                                    638,490             318,309
Book overdraft                                                                       197,800             200,860
Current maturities of notes payable                                                3,856,922           3,352,922
Loans from shareholders                                                               60,000             155,000
Convertible debt                                                                   3,838,498           3,655,915
                                                                               -------------        ------------
Total Current Liabilities                                                         10,981,683           9,596,006
                                                                               -------------        ------------
Total Long-Term Liabilities                                                                -                   -
                                                                               -------------        ------------
Total Liabilities                                                                 10,981,683           9,596,006
                                                                               -------------        ------------

STOCKHOLDER'S DEFICIENCIES
Common stock                                                                          37,359              35,488
Redeemable preferred stock                                                         3,723,938           3,009,063
Additional paid In capital                                                        16,160,314          15,463,960
Accumulated deficit                                                              (26,253,318)        (23,943,901)
                                                                               -------------        ------------
Total stockholders' deficiencies                                                  (6,331,707)         (5,435,390)
                                                                               -------------        ------------
TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIENCIES                               $   4,649,976        $  4,160,616
                                                                               =============        ============
</TABLE>

           See notes to condensed consolidated financial statements

                                       3
<PAGE>

PART I.  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS


                            CASH TECHNOLOGIES, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                          FOR THREE MONTHS ENDED NOVEMBER 30   FOR SIX MONTHS ENDED NOVEMBER 30
                                                                 2001           2000                  2001             2000
                                                             ------------    ------------          -----------     -------------
                                                              (Unaudited)    (Unaudited)           (Unaudited)      (Unaudited)
<S>                                                       <C>                <C>               <C>                 <C>

REVENUES
--------

GROSS REVENUES (Note 1)                                      $  4,463,088    $  4,640,742          $ 5,437,409     $  13,821,064
                                                             ============    ============          ===========     =============

NET REVENUES                                                 $    160,466    $     83,548          $   189,319     $     313,356
COST OF REVENUES                                             $    100,437    $     48,848          $   139,511     $     210,563
                                                             ------------    ------------          -----------     -------------

GROSS PROFIT (LOSS)                                          $     60,029    $     34,700          $    49,808     $     102,793

SELLING, GENERAL, & ADMIN EXP.                                    495,847         876,631              988,460         1,755,529
DEPRECIATION EXPENSE                                               23,716          13,339               50,267            33,503
                                                             ------------    ------------          -----------     -------------

OPERATING LOSS                                                   (459,534)       (855,270)            (988,919)       (1,686,239)
INTEREST EXPENSE                                                  290,462         259,314              555,217           473,588
                                                             ------------    ------------          -----------     -------------

LOSS BEFORE INCOME TAXES                                         (749,996)     (1,114,584)          (1,544,136)       (2,159,827)
INCOME TAXES                                                            -               -                    -             2,400
                                                             ------------    ------------          -----------     -------------

NET LOSS                                                         (749,996)     (1,114,584)          (1,544,136)       (2,162,227)
                                                             ------------    ------------          -----------     -------------

Dividends & deemed dividends to Shareholders                      188,599         459,284              765,280           481,727
                                                             ------------    ------------          -----------     -------------

Net Loss Allocable to common
shareholders                                                     (938,595)     (1,573,868)          (2,309,416)       (2,643,954)
                                                             ============    ============          ===========     =============

Basic and diluted net loss per share                         $      (0.26)   $      (0.45)         $     (0.64)    $       (0.75)
                                                             ============    ============          ===========     =============

Basic and diluted weighted average
shares of common stock outstanding                              3,613,533       3,532,450            3,613,533         3,532,450
                                                             ============    ============          ===========     =============
</TABLE>

        See notes to condensed consolidated financial statements

                                       4
<PAGE>

PART I.  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS

                            CASH TECHNOLOGIES, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                              FOR SIX MONTHS ENDED NOVEMBER 30
                                                                                                  2001                 2000
                                                                                             --------------        ------------
                                                                                               (Unaudited)          (Unaudited)
<S>                                                                                          <C>                   <C>
OPERATING ACTIVITIES:
Net Loss                                                                                     $   (1,544,136)       $ (2,162,227)
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities:

Amortization of discount on convertible debt                                                         17,583             136,750
Non-cash deemed interest expense                                                                    208,334                   -
Adjustment to PPM                                                                                         -             (13,000)
Non-cash compensation                                                                                     -             105,719
Depreciation expense                                                                                 59,413              40,578
Impairment on Coinbank machines                                                                           -               4,329
Loss on disposal of equipment                                                                             -                 368

Changes in operating assets and liabilities:
              Coinbank machinery held for sale                                                       60,379              53,657
              Receivables                                                                           (34,160)            145,870
              Prepaid expenses and other current assets                                               7,500            (109,200)
              Other assets                                                                          (36,773)           (118,795)
              Accounts payable                                                                      118,823             500,605
              Accrued interest                                                                      319,000                   -
              Accrued expenses and other current liabilities                                        358,150             205,604
                                                                                             --------------        ------------

Net cash provided (used) by operating activities                                                   (465,887)         (1,209,742)
                                                                                             --------------        ------------

INVESTING ACTIVITIES:
              Purchase of equipment                                                                  (2,202)             (8,582)
              Capitalized Software                                                                 (351,121)           (657,932)
              Proceeds from sale of equipment                                                             -              40,000
                                                                                             --------------        ------------

Net cash used by investing activities                                                              (353,323)           (626,514)
                                                                                             --------------        -------------

FINANCING ACTIVITIES:
              Book overdraft                                                                         (3,060)                  -
              Payments on capital lease obligation                                                        -                (487)
              Repayments of loans from shareholders                                                 (95,000)
              Proceeds from short-term debt                                                         100,000             240,000
              Repayments on long-term debt                                                                -            (656,295)
              Net proceeds from issuance of common stock                                            217,500                   -
              Net proceeds from issuance of preferred stock                                         750,500           1,850,000
                                                                                             --------------        ------------

Net cash provided (used) by financing activities                                                    969,940           1,433,218
                                                                                             --------------        ------------

CHANGE IN CASH AND CASH EQUIVALENTS                                                                 150,730            (402,888)
              Cash, Beginning of period                                                                   -             531,527
                                                                                             --------------        ------------

              Cash, End of period                                                            $      150,730        $    128,489
                                                                                             ==============        ============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
              Income taxes                                                                   $            -        $      2,400
SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTION
              Conversion of preferred stock to common stock                                  $       35,587        $    444,125
              Deemed dividend on preferred stock                                             $      433,060        $    436,840
              Dividends on preferred stock                                                   $      320,182        $     22,444
              Finance fees added to notes payables                                           $      250,000        $    500,000
              Deemed dividend on common stock                                                $       12,038        $          -
              Issuance of common stock                                                       $       99,167        $          -
</TABLE>

           See notes to condensed consolidated financial statements

                                       5
<PAGE>

CASH TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 1: GENERAL

GOING CONCERN:

     The Company has prepared the financial statements included herewith
assuming that the Company will continue as a going concern. Although the Company
has raised additional capital since its public offering in July 1998, it has not
generated sufficient revenue-producing activity to sustain its operations.
Accordingly, the Company must realize a satisfactory level of profitability from
its current and future operation in order to remain a viable entity. In
addition, the Company must raise significant capital to fund current operations
and to repay existing debt. The Company's auditors have included an explanatory
paragraph in their report for the year ended May 31, 2001, indicating there is
substantial doubt regarding the Company's 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. (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, 2001 and the results of operation and
cash flows for the three and six month periods ended November 30, 2001 and 2000.
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, 2001,
filed with the SEC. The results of operations for the three and six month
periods ended November 30, 2001, are not necessarily indicative of the results
to be expected for any subsequent quarter or for the entire fiscal year.

     Gross revenues - includes the value of currency processed and does not
represent revenue under generally accepted accounting principles.

                                       6
<PAGE>

NOTE 2. COMMITMENTS AND CONTINGENCIES

     On September 22, 2000, Shaw's Supermarkets filed a lawsuit (Shaw's
Supermarkets, Inc. v. Cash Technologies, Inc., CoinBank Automated Systems Inc.
United States District Court, District of Massachusetts) against the Company
claiming breach of contract and damages. The Company had been placing CoinBank
machines in Shaw's locations in New England and had been negotiating a
settlement and termination agreement with Shaw's to terminate the CoinBank
machine placements in light of the Company's decision to discontinue the free
placement of CoinBank machines. Shaw's is claiming that it is owed $85,000 in
reimbursements in addition to damages for termination totaling approximately
$200,000. The Company believes that the amount owed for reimbursement is
approximately $55,000 and has accrued for the liability and that it has no
liability whatsoever under the contract for termination fees. Furthermore, the
Company has potential claims against Shaw's for damages to the machines. The
Company intends to defend itself in the suit. There can be no assurance that the
Company will be successful in the defense. Settlement negotiations are presently
underway with Shaw's.

     In December 1997, Vindex USA, Inc. filed a complaint against CAS, a
subsidiary of the Company, in the Superior Court of California, Los Angeles
County, seeking to recover $40,000, an unspecified amount of commissions and
interest accrued thereon allegedly due it under the terms of a consulting
agreement it alleged was breached by the Company. The court has entered a
judgment against CAS in favor of Vindex in the sum of $97,864. The Company's
financial statements are reflected on a condensed consolidated basis and
although this liability has been recorded, Cash Technologies, Inc. as a separate
corporate entity has no direct liability for this judgment..

     In March 2001 the Company entered into certain agreements with Hachador
Holdings Limited, an entity with offices located at 6005 Delmar Blvd, St. Louis,
Missouri pursuant to which Hachador agreed to make a loan to the Company in the
principal amount of $225,000. The loan was to be secured by 700,000 shares of
Common Stock of the Company. After delivery of the shares to Hachador, by the
Company, Hachador refused to make the loan proceeds available to the Company.
The 700,000 shares were issued with a restrictive legend and cannot be publicly
sold without the Company's consent. The Company does not believe that Hachador
validly obtained the shares. The Company intends to commence suit to obtain the
shares from Hachador Limited, and for damages.

     The Company is involved in a litigation titled Kane Corte, et al v. Cash
Technologies, Inc. et al., Case # 128256, 32/nd/ Judicial District Parish of
Terrebonne, State of Louisiana. In August 2001, the Company first became aware
that an entity to which it had sold 23 CoinBank machines in October 1999 had
filed suit against the Company in Louisiana court and obtained a default
judgment against the Company. The Louisiana judgment was issued on August 15,
2000 and rewarded the purchaser $230,000 in damages and ordered that the
machines be returned to the Company. In March 2001, the purchaser obtained a
sister-state judgment against the Company in California based on the judgment of
the Louisiana court and a writ of execution was issued.

     Upon learning of this matter, the Company immediately initiated legal
actions in Louisiana and California. At a hearing in the Louisiana court, the
Company was granted a Temporary Restraining Order staying enforcement of the
judgment. The Company contends that the Louisiana court had no jurisdiction over
it and that it was never properly served with either the original Louisiana
lawsuit, the judgment issued by the Louisiana court or the California sister-
state judgment. The Company also contends that Kane Corte's allegations are
without merit and that his desire to return the machines is a result of his
failed business practices and his untrained and unqualified service personnel
causing damage to the machines. The Company has initiated legal action in both
Louisiana and California seeking to set aside both judgments and to cause the
matter, including the issue of jurisdiction, to be heard on its

                                       7
<PAGE>

merits by the Louisiana court. The Company believes that it will be successful
in these actions to set aside the judgments. The Company further believes that
it has meritorious defenses to each of the allegations in the action and that it
will ultimately prevail on merits. The Company will incur the cost of defense,
including legal fees, in an undetermined amount in connection with these
matters, which may not be recoverable. There can be no assurance that the
Company will be successful in the defense.

NOTE 3: STOCKHOLDERS EQUITY

     In June 2001, the Company completed a financing of $250,000, comprised of
25 shares of Series D 8% Convertible Preferred Stock and 25,000 Series E
Warrants. The financing was intended to comply with Section 4(2) of the
Securities Act of 1933 as exempt from registration. The Series D Stock have an
annual dividends payable at 8% per year, payable in cash or Common Stock at the
option of the Company. The Series E Warrants have an exercise price of $1.36 per
share. During the quarter ended August 30, 2001 there was a deemed dividend
expense of $130,415 recognized in conjunction with the warrants issued in this
offering. The Company received gross proceeds of $220,000, which has been used
for operating activities.

     In July 2001 the Company, in a private transaction under Section 4(2) of
the Securities Act of 1933, as amended, and/or Regulation D thereunder, sold an
aggregate of $100,000 of its securities to 2 foreign investors Each investor
purchased a $50,000 unit, each unit comprised of (i) 41,667 shares of Common
Stock and (ii) 5,000 common stock purchase warrants. The warrants have an
exercise price of $1.20 per share and are exercisable for five years. During the
quarter ended August 30, 2001 there was a deemed dividend expense of $12,038
recognized in conjunction with the warrants issued in this offering. The
proceeds of the transactions were used to pay certain debts, including payroll
obligations, of the Company's Austrian subsidiary.

     In July 2001, the Company completed an offering of 5 shares of Series E 8%
Convertible Preferred Stock and 100,000 Series F Warrants. The financing was
intended to comply with Section 4(2) of the Securities Act of 1933 as exempt
from registration. The Series E Stock has annual dividends payable at 8% per
year, payable in cash or Common Stock at the option of the Company. The Series F
Warrants have an exercise price of $2.00 per share. Each unit consists of 1
share of Series E 8% Convertible Preferred Stock and 20,000 Series F Warrants
and was sold at $100,000. The Company sold 1.8 units for gross proceeds of
$180,000. During the quarter ended August 30, 2001 there was a deemed dividend
expense of $73,519 recognized in conjunction with the warrants issued in this
offering.

     On August 31, 2001, the Company completed a financing of $500,000 in gross
proceeds, with one of its shareholders, comprised of shares of Series F 8%
Convertible Preferred Stock and Series G Warrants. The financing was intended to
comply with Section 4(2) of the Securities Act of 1933 as exempt from
registration. The Series F Stock has annual dividends payable at 8% per year,
payable in cash or Common Stock at the option of the Company. Each Series G
Warrants is initially exercisable to purchase one Warrant Share at an initial
exercise price of 125% of the average of the closing bid prices of the Company's
Common Stock for the twenty (20) trading days immediately preceding the Closing
Date. The Company issued 5 shares of Series F Preferred Stock and 100,000 shares
of Series G warrants. A total of $57,000 in commissions was paid in relation to
this offering as well as an issuance of 50,000 shares of the Company's common
stock valued at $67,500 to Gunn Allen and associates. Furthermore, during the
quarter ended August 30, 2001, there was a deemed dividend expense of $229,126
recognized in conjunction with the warrants issued in this offering.

     During the quarter ended November 30, 2001 the Company issued 50,000 shares
of the Company's common stock valued at $50,000 to one of its EMMA developers
for payment towards services performance.

                                       8
<PAGE>

NOTE 4: RELATED PARTY TRANSACTIONS

     In the fiscal quarter ended August 31, 2001, the Company obtained short-
term loans of an aggregate principal amount of $58,000 from Bruce Korman and
Pierce Liberman. Mr. Korman and Mr. Liberman are both shareholders of the
Company; furthermore Mr. Korman also serves as Chief Executive Officer and
Chairman of the Board of Directors. Both loans were short-term loans and as of
November 30, 2001 the Company has repaid both loans in full. The Company
obtained an additional $35,800 from Mr. Korman during the quarter ended November
30, 2001, which was repaid during the same period. Furthermore, the Company
leases its principal space from Prime Financial, an entity in which Mr. Korman
is a principal. At November 30, 2001, the Company had $40,666 in arrears under
its lease obligations.

NOTE 5: SHORT-TERM DEBT

     In 1997 the Company entered into a credit agreement with GE Capital
Corporation ("GE") pursuant to which the Company borrowed $5,500,000 for the
purchase of CoinBank component equipment, working capital and general corporate
purposes. The Company and GE Capital had negotiated a waiver agreement as of
September 13, 2001 pursuant to which GE Capital agreed to a six (6) month
deferral of interest payments and a twelve (12) month deferral of principal
payments provided (i) the Company granted GE Capital a lien on all of its assets
(ii) the Company paid GE Capital 60% of all proceeds from the sale of its
CoinBank machines (iii) the Company obtained subordination agreements from all
of its noteholders prior to December 30, 2001 whereby the noteholders
subordinate their lien to that of GE Capital (See Note 6) (iv) the sum of
$250,000 is added to the outstanding principal amount of the loan, which is
being amortized over a twelve (12) month period. As of November 30, 2001 the
Company owes $3,679,070, which includes the principal, financing fees and unpaid
interest. Although the Company is currently trying to obtain an extension from
GE Capital to obtain subordination agreements from all of its noteholders, since
the Company was unable to deliver all required subordination agreements by
December 30, 2001 the Company is in default of the waiver agreement.

NOTE 6: CONVERTIBLE DEBT

     The Company completed an offering on January 5, 2000 and raised $3,362,000
in gross proceeds. The Company incurred approximately $400,000 in offering
expenses, consisting of legal costs, sales commissions and other related costs.
The Company engaged Gunn Allen Financial, Inc. as placement agent and paid
commissions of 10% and reimbursement of expenses. Pursuant to this offering 67.5
Units were sold. Each Unit consisted of (i) a Secured Convertible Promissory
Note in the principal amount of $50,000 convertible into Common Stock at a
conversion price of $9.50 per share (maturity date can be converted immediately)
and (ii) Series B Redeemable Warrants to purchase an aggregate of 5,000 Warrant
Shares at an exercise price of $13.00 per share (warrants are vested immediately
and expire five years from the date of issuance).

     The offering was comprised of both debt and equity components. The debt
offering had a beneficial conversion feature of $852,632, which was recorded as
deemed interest. The warrants issued in conjunction with the debt created
$316,500 of deferred interest expense, which has been fully amortized as of the
fiscal quarter ended November 30, 2001.

     Since July 31, 2001 the notes have been in default, however the Company has
made an offer to the noteholders to restructure the debt. Under the offer, the
notes would be extended for two (2) years to July 2003 and the noteholders will
surrender all old warrants priced at $13.50 per share and will receive 2

                                       9
<PAGE>

replacement warrants for every old warrant surrendered. The new warrants are
vested immediately and have a life of 5 years and are exercisable at $1.35 thru
December 31, 2001, $2.20 through January 15, 2002 and $4.50 thereafter. To date
the Company has received executed Acceptance Letters from thirty-two (32) of the
forty-eight (48) noteholders, which modify the terms of the original Promissory
Notes as well as oral commitments to execute such documents from ten (10)
noteholders. The Company is engaged in discussions with the remaining six (6)
noteholders to finalize modifications of their Notes.


NOTE 7:  SEGMENT REPORTING

     The Company operates through 3 business segments: Cash processing, CoinBank
machines, and the development and marketing of its EMMA transaction processing
software and related services. The Company has a firm fixed price contract with
the Los Angeles County Metropolitan Transportation Authority to count currency,
which purchased in bulk at a discount from face value and processed and
deposited at face value in the Company's account. The Company also sells self-
service coin counting (CoinBank) machines through existing equipment
distribution channels. Furthermore, the Company is developing a transaction
processing system, which has been deployed in pilot installations and the
software development costs are being capitalized.

Information on the Company's business segments for the three and six months
ended November 30,

<TABLE>
<CAPTION>
                                           Three Months Ended     Three Months Ended       Six Months Ended      Six Months Ended
                                            November 30, 2001      November 30, 2000      November 30, 2001     November 30, 2000
<S>                                        <C>                    <C>                     <C>                   <C>
Gross Revenues                             $        4,463,088      $       4,640,742      $       5,437,409     $      13,821,064

Net Revenues and Sales:
  Cash processing                                      67,839                 73,368                 82,741               240,576
  Coinbank machines                                    82,627                 10,180                 96,578                72,780
  EMMA                                                 10,000                      -                 10,000                     -
                                           -----------------------------------------      ---------------------------------------
                                                      160,466                 83,548                189,319               313,356
                                           =========================================      =======================================

Interest expense
  Cash processing                                         642                 18,267                    642                18,302
  Coinbank machines                                     2,336                  6,267                  4,672                 8,602
  EMMA                                                      -                      -                      -                     -
  Unallocated                                         287,484                234,780                549,903               446,684
                                           ------------------      -----------------      -----------------     -----------------
                                                      290,462                259,314                555,217               473,588
                                           ==================      =================      =================     =================

Depreciation
  Cash processing                                       7,244                  6,566                 20,201                19,156
  Coinbank machines                                    11,792                  4,395                 22,407                13,486
</TABLE>

                                       10
<PAGE>

<TABLE>
<S>                                        <C>                    <C>                     <C>                   <C>
  EMMA                                                      -                      -                      -                     -
  Unallocated                                           8,786                  5,515                 16,805                 7,936
                                           -----------------------------------------      ---------------------------------------
                                                       27,822                 16,476                 59,413                40,578
                                           =========================================      =======================================

Segment profit (loss)
  Cash processing                                     (25,602)               (11,745)               (84,150)               10,697
  Coinbank machines                                   (35,977)              (291,866)              (151,197)             (594,041)
  EMMA                                                      -                      -                      -                     -
  Unallocated                                        (688,417)              (810,973)            (1,308,789)           (1,578,883)
                                           -----------------------------------------      ---------------------------------------
                                                     (749,996)            (1,114,584)            (1,544,136)           (2,162,227)
                                           =========================================      =======================================

Net identifiable assets:
  Cash processing                                      36,099                 85,740                 36,099                85,740
  Coinbank machines                                 1,136,404              1,224,650              1,136,404             1,224,650
  EMMA                                              2,713,870              1,819,146              2,713,870             1,819,146
  Unallocated                                         763,603                978,482                763,603               978,482
                                           -----------------------------------------      ---------------------------------------
                                                    4,649,976              4,108,018              4,649,976             4,108,018
                                           =========================================      =======================================

Expenditure for segment assets:
  Cash processing                                           -                      -                      -                     -
  Coinbank machines                                         -                (23,967)                     -               (72,780)
  EMMA                                                170,857                338,673                351,121               657,932
  Unallocated                                           1,667                  8,582                  2,202               (31,418)
                                           -----------------------------------------      ---------------------------------------
                                           $          172,524            $   323,288      $         353,323           $   553,734
                                           =========================================      =======================================
</TABLE>

NOTE 8:  SUBSEQUENT EVENTS

     Subsequent to the quarter ended November 30 2001, the Company has raised
$425,000 in conjunction with an offering consisting of common stock and
warrants. The terms of the agreement have not yet been finalized.

     Subsequent to the quarter ended November 30, 2001, the Company paid annual
dividends on the Series B Preferred Stock which were due and payable on June
30, 2001. Each share of Series B Preferred Stock was eligible for $0.40 per
share in cash or at the discretion of the Company, in shares of common stock.
The Company issued a total of 95,239 shares of the Company's common stock.

                                       11
<PAGE>

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-KSB 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, 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. See also the Company's reports filed from
time to time with the Securities and Exchange Commission pursuant to the
Securities Act or the Exchange Act.

Introduction
------------

     Cash Technologies, Inc., is a Delaware Corporation, incorporated in August
1995. Unless the context otherwise requires, references herein to the Company
refer to Cash Technologies, Inc., and its wholly-owned subsidiaries, National
Cash Processors, Inc., a Delaware corporation, incorporated in May 1994, which
became a subsidiary of the Company in January 1996; CoinBank Automated Systems,
Inc., a Delaware corporation, incorporated in November 1995; CoinBank Automation
Handels GmbH, Salzburg, Austria incorporated in February, 1998 and Cintelia
Systems, Inc., incorporated in December, 2001.

Electronic Message Management Architecture (EMMA)(TM) Transaction Processing
System

     In 1996, the Company began its development of an enhanced version of an
automated teller machine which was designated the ATM-X(TM). The ATM-X was
designed to provide a range of services not typically offered by ATM machines,
such as electronic bill payment, instant activated phone cards, event ticketing
and others. As development efforts proceeded, the Company discovered the need to
create a robust transaction processing system that could link the new ATMs with
the worldwide financial networks in order to provide these new services to ATMs,
kiosks and wireless devices.

     In December of 1997, the Company filed a patent application describing its
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 was later named EMMA

                                       12
<PAGE>

(E-commerce Message Management Architecture), allows for the seamless
integration of conventional ATM and credit card networks with non-bank networks
and the Internet. The explosion of Internet e-commerce has created, in
management's opinion, a demand for EMMA's unique capabilities to provide
advanced financial services on ATMs, POS (point of sale) terminals and wireless
devices.

     Technological feasibility was achieved in September of 1999 and from that
point forward all expenses related to the EMMA software development have been
capitalized. As of November 30, 2001, the Company has capitalized $2,713,870 in
development and related costs. The Company estimates that the EMMA product will
be ready for release to the public by January 2002.

Commercial Cash Processing

     While the Company has, in recent years, expanded its operations into other
technologies, it began and continues to do business as a cash processor through
its National Cash Processors, Inc. subsidiary. Typically, currency is purchased
in bulk at a discount of between 1% and 2% from face value. After counting,
sorting and/or wrapping, the Company either promptly resells the processed
currency at face value plus a small fee (approximately $10.00 per $1,000 worth
of bills sorted) to a variety of customers, including armored car companies, or
deposits it at face value at the Federal Reserve Bank for credit to the
Company's account.

Coin Counting Equipment

     In 1995, the Company began its development of CoinBank(R) self-service coin
counting machines, distributed through its CoinBank Automated Systems, Inc.
subsidiary. The machines accept and count loose coin, then generate a receipt
redeemable for the amount counted less a service fee of typically 7-9%. This
receipt can then be exchanged for currency or goods. The machines provide
individuals and small businesses with a convenient method for the disposing of
their accumulated loose coin without the need for pre-sorting or wrapping. The
Company has performed extensive field tests with these machines in Southern
California, New England and Europe. The machines can be readily configured to
count coin denominations from most countries in the world. An important feature
of the machines, for which the Company filed for patent protection in 1997, is
their ability to reject extraneous materials such as foreign objects and slugs,
minimizing down time and repairs. Patent number 6,318,536, issued by the U.S.
Patent and Trademark Office on November 20, 2001, includes the foreign debris
management and other proprietary techniques.

     The Company is marketing the 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.

     During the fiscal year ended May 31, 2001, the Company's market analysis
for self-service coin counting machines indicated that retailers were demanding
higher profit margins from the operation of these devices than that was being
offered through the "free-placement" business model. The Company concluded that
its free-placement program should be supplanted by direct sales of these
machines to retail store chains and removed substantially all of its free-
placement machines from operation, including the termination of its agreement
with Shaw's Supermarkets. See "Legal Proceedings". Though the Company intends to
complete certain potential direct sales of its coin machines, it intends to
focus substantially all of its efforts and operations on the continued
development and deployment of the EMMA technology.

                                       13
<PAGE>

RESULTS OF OPERATIONS

THREE MONTHS ENDED NOVEMBER 30, 2001, COMPARED TO THREE MONTHS ENDED NOVEMBER
30, 2000.

     Gross revenues include the value of the cash processed and CoinBank machine
sales for the three months ended November 30, 2001, amounted to $4,463,088
compared to $4,640,742 for the quarter ended November 30, 2000. Gross revenues
do not represent revenues under Generally Accepted Accounting Principles. Net
revenues for the 2001 period increased to $160,466 or 3.60% of gross revenues,
compared to $83,548 or 1.80% of gross revenues for 2000 period. The increase in
net revenue was primarily attributable to the increase in the amount of coin
machines sold during the period. CoinBank machines sold in the current quarter
provided gross proceeds of $82,627 compared to $10,180 for the same period last
year.

     Cost of revenues for the three months ended November 30, 2001, was $100,437
compared to $48,848 for the quarter ended November 30, 2000. The increase in
direct costs was primarily the result of an increase in the cost of coin
machines sold. Included in cost of revenues is depreciation expense of $4,107
and $3,137 for the three months ended November 30, 2001 and 2000, respectively.

     Gross profit for the three months ended November 30, 2001, was $60,029
compared to a gross profit of $34,700 for the three months ended November 30,
2000. The increase in gross profit was directly related to the increase in
CoinBank machines sold during the current quarter.

     Selling, General and Administrative expenses for the three months ended
November 30, 2001, decreased to $495,847 compared to $876,631 for the three
months ended November 30, 2000. These expenses consist primarily of wages (and
wage related costs), outside contractor expenses, travel/promotional expenses,
professional services and facilities/office related expenses. The decrease was
primarily attributable to significant decrease in wages expense and other
administrative costs due to reduction of labor.

     Depreciation and amortization expenses for the three months ended November
30, 2001, and 2000, were $23,716 and $13,339, respectively. The increase was the
result of additions to fixed assets.

     Interest expense for the three months ended November 30, 2001 and 2000, was
$290,462 and $259,314, respectively. The increase was primarily due to the
increase in the interest expense recognized in relation to the fees amortized in
conjunction with the deferment of G.E. Capital notes payable.

     As a result of the foregoing, net losses for the three months ended
November 30, 2001 and 2000, were $749,996 and $1,114,584 respectively.

                                       14
<PAGE>

SIX MONTHS ENDED NOVEMBER 30, 2001, COMPARED TO SIX MONTHS ENDED NOVEMBER 30,
2000.

     Gross revenues include the value of the cash processed and CoinBank machine
sales for the six months ended November 30, 2001, amounted to $5,437,409
compared to $13,821,064 for the six months ended November 30, 2000. Gross
revenues do not represent revenues under Generally Accepted Accounting
Principles. Net revenues for the 2001 period decreased to $189,319 or 3.48% of
gross revenues, compared to $313,356 or 2.27% of gross revenues for 2000 period.
The decrease in net revenue was primarily attributable to the decrease in the
amount cash processed due to the Company's cash restraints.

     Cost of revenues for the six months ended November 30, 2001, was $139,511
compared to $210,563 for the period ended November 30, 2000. The decrease in
direct costs was primarily the result of a decrease in the amount of cash
processed. Included in cost of revenues is depreciation expense of $9,146 and
$7,075 for the six months ended November 30, 2001 and 2000, respectively.

     Gross profit for the six months ended November 30, 2001, was $49,808
compared to a gross profit of $102,793 for the six months ended November 30,
2000. The decrease in gross profit was directly attributable to the decrease in
cash processed from $13,384,538 for the six month period ended November 30, 2000
to $5,330,643 for the six month period ended November 30, 2001.

     Selling, General and Administrative expenses for the six months ended
November 30, 2001, decreased to $988,460 compared to $1,755,529 for the six
months ended November 30, 2000. These expenses consist primarily of wages (and
wage related costs), outside contractor expenses, travel/promotional expenses,
professional services and facilities/office related expenses. The decrease was
primarily attributable to significant decrease in wages expense and other
administrative costs due to reduction of labor.

     Depreciation and amortization expenses for the six months ended November
30, 2001, and 2000, were $50,267 and $33,503, respectively. The increase was the
result of additions to fixed assets.

     Interest expense for the six months ended November 30, 2001 and 2000, was
$555,217 and $473,588, respectively. The increase was primarily due to the
increase in the interest expense recognized in relation to the fees amortized in
conjunction with the deferment of G.E. Capital notes payable.

     As a result of the foregoing, net losses for the six months ended November
30, 2001 and 2000, were $1,544,136 and $2,162,227 respectively.

                                       15
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

     The Company continues to suffer recurring losses from operations as of
November 30, 2001, and has not generated sufficient revenue producing activity
to sustain its operations. The Company's auditors have included an explanatory
paragraph in their report for the year ended May 31, 2001, indicating there is
substantial doubt regarding the Company's ability to continue as a going
concern. The Company is attempting to raise additional capital to meet future
working capital requirement and launch new products, but may not be able to do
so. Should the Company not be able to do so, it may have to curtail operations.

     The Company's capital requirements have been and will continue to be
significant and its cash requirements have been exceeding its cash flow from
operations. As of November 30, 2001, the Company had unrestricted cash and cash
equivalents of $150,730 compared to $128,489 as of November 30, 2000. Also on
November 30, 2001, the Company had a working capital deficit of $10,627,413
compared to $1,599,200 on November 30, 2000. The increase in working capital
deficit is primarily the result of reclassifying the $3,679,070 of GE Capital
debt (See note 5) and the $3,362,000 of Secured Convertible Promissory Notes
(See note 6) to short term debt, the latter of which will be reclassified back
to long term upon successful completion of restructuring. To date, $2,162,000 of
such debt has been reclassified to long-term debt. There can be no assurance
though that the remaining convertible debt will be successfully restructured.

     Since inception, the Company has satisfied its working capital requirements
through limited cash flow generated from operations, the issuance of equity and
debt securities, and various borrowings. As a result of various cost saving
initiatives, the Company's current monthly operating costs are approximately
$150,000, not inclusive of any principal or interest payments on outstanding
debt. At January 10, 2002, the Company had cash and cash equivalents of
$159,199.

     Net cash used by operating activities was $465,887 for the six months ended
November 30, 2001, as compared to net cash used by operating activities of
$1,209,742 for the six months ended November 30, 2000. The total decrease of
$743,855 in net cash used by operating activities, during the 2001 period was
primarily due to a decrease in net loss of $618,091 as well as increases in
accrued interest of $319,000, non-cash deemed interest expense of $208,334,
accrued expenses of $152,546 and prepaid expenses of $116,700 offset by
decreases in receivables of $180,030, accounts payable of $381,782 and non cash
compensation of $105,719.

     Net cash used in investing activities was $353,323 for the six months ended
November 30, 2001, as compared to $626,514 for the six months ended November 30,
2000. The decrease in net cash used in investing activities was primarily
attributable to a decrease in capitalized software cost of $306,811.

     Net cash provided by financing activities for the six months ended November
30, 2001, was $969,940 as compared to $1,433,218 for the six months ended
November 30, 2000. The decrease in net cash provided by financing activities for
the 2001 period was primarily attributable to decreases in proceeds from the
issuance of preferred stock of $1,099,500 short term debt of $140,000 offset by
decreases in the repayment of long-term debt of $656,295 and increases in
proceeds from the sale of common stock of $217,500.

     In 1997 the Company entered into a credit agreement with GE Capital
Corporation ("GE") pursuant to which the Company borrowed $5,500,000 for the
purchase of CoinBank component equipment, working capital and general corporate
purposes. The Company and GE Capital had negotiated a waiver agreement as of
September 13, 2001 pursuant to which GE Capital agreed to a six (6) month
deferral of interest payments and a twelve (12) month deferral of principal
payments provided (i) the Company granted GE Capital a lien on all of its assets
(ii) the Company paid GE Capital 60% of all proceeds from the sale of its
CoinBank machines (iii) the Company obtained subordination agreements from all
of its noteholders prior to December 30, 2001 whereby the noteholders
subordinate their lien to that of GE Capital (See Note 6) (iv) the sum of
$250,000 is added to the outstanding principal amount of the loan, which is
being amortized over a twelve (12) month period. As of November 30, 2001 the
Company owes $3,679,070, which includes the principal, financing fees and unpaid
interest. Although the Company is currently trying to obtain an extension from
GE Capital to obtain subordination agreements from all of its noteholders, since
the Company was unable to deliver all required subordination agreements by
December 30, 2001 the Company is in default of the waiver agreement.

                                       16
<PAGE>

         The Company completed an offering on January 5, 2000 and raised
$3,362,000 in gross proceeds. The Company incurred approximately $400,000 in
offering expenses, consisting of legal costs, sales commissions and other
related costs. The Company engaged Gunn Allen Financial, Inc. as placement agent
and paid commissions of 10% and reimbursement of expenses. Pursuant to this
offering 67.5 Units were sold. Each Unit consisted of (i) a Secured Convertible
Promissory Note in the principal amount of $50,000 convertible into Common Stock
at a conversion price of $9.50 per share (maturity date can be converted
immediately) and (ii) Series B Redeemable Warrants to purchase an aggregate of
5,000 Warrant Shares at an exercise price of $13.00 per share (warrants are
vested immediately and expire five years from the date of issuance).

         The offering was comprised of both debt and equity components. The debt
offering had a beneficial conversion feature of $852,632, which was recorded as
deemed interest. The warrants issued in conjunction with the debt created
$316,500 of deferred interest expense, which has been fully amortized as of the
fiscal quarter ended November 30, 2001.

         Since July 31, 2001 the notes have been in default, however the Company
has made an offer to the noteholders to restructure the debt. Under the offer,
the notes would be extended for two (2) years to July 2003 and the noteholders
will surrender all old warrants priced at $13.50 per share and will receive 2
replacement warrants for every old warrant surrendered. The new warrants are
vested immediately and have a life of 5 years and are exercisable at $1.35 thru
December 31, 2001, $2.20 through January 15, 2002 and $4.50 thereafter. To date
the Company has received executed Acceptance Letters from thirty-two (32) of the
forty-eight (48) noteholders, which modify the terms of the original Promissory
Notes as well as oral commitments to execute such documents from ten (10)
noteholders. The Company is engaged in discussions with the remaining six (6)
noteholders to finalize modifications of their Notes.

         In June 2001, the Company completed a financing of $250,000, comprised
of 25 shares of Series D 8% Convertible Preferred Stock and 25,000 Series E
Warrants. The financing was intended to comply with Section 4(2) of the
Securities Act of 1933 as exempt from registration. The Series D Stock have an
annual dividends payable at 8% per year, payable in cash or Common Stock at the
option of the Company. The Series E Warrants have an exercise price of $1.36 per
share. During the quarter ended August 30, 2001 there was a deemed dividend
expense of $130,415 recognized in conjunction with the warrants issued in this
offering. The Company received gross proceeds of $220,000, which has been used
for operating activities.

         In July 2001 the Company, in a private transaction under Section 4(2)
of the Securities Act of 1933, as amended, and/or Regulation D thereunder, sold
an aggregate of $100,000 of its securities to 2 foreign investors Each investor
purchased a $50,000 unit, each unit comprised of (i) 41,667 shares of Common
Stock and (ii) 5,000 common stock purchase warrants. The warrants have an
exercise price of $1.20 per share and are exercisable for five years. During the
quarter ended August 30, 2001 there was a deemed dividend expense of $12,038
recognized in conjunction with the warrants issued in this offering. The
proceeds of the transactions were used to pay certain debts, including payroll
obligations, of the Company's Austrian subsidiary.

         In July 2001, the Company completed an offering of 5 shares of Series E
8% Convertible Preferred Stock and 100,000 Series F Warrants. The financing was
intended to comply with Section 4(2)

                                       17
<PAGE>

of the Securities Act of 1933 as exempt from registration. The Series E Stock
has annual dividends payable at 8% per year, payable in cash or Common Stock at
the option of the Company. The Series F Warrants have an exercise price of $2.00
per share. Each unit consists of 1 share of Series E 8% Convertible Preferred
Stock and 20,000 Series F Warrants and was sold at $100,000. The Company sold
1.8 units for gross proceeds of $180,000. During the quarter ended August 30,
2001 there was a deemed dividend expense of $73,519 recognized in conjunction
with the warrants issued in this offering.

         On August 31, 2001, the Company completed a financing of $500,000 in
gross proceeds, with one of its shareholders, comprised of shares of Series F 8%
Convertible Preferred Stock and Series G Warrants. The financing was intended to
comply with Section 4(2) of the Securities Act of 1933 as exempt from
registration. The Series F Stock has annual dividends payable at 8% per year,
payable in cash or Common Stock at the option of the Company. Each Series G
Warrants is initially exercisable to purchase one Warrant Share at an initial
exercise price of 125% of the average of the closing bid prices of the Company's
Common Stock for the twenty (20) trading days immediately preceding the Closing
Date. The Company issued 5 shares of Series F Preferred Stock and 100,000 shares
of Series G warrants. A total of $57,000 in commissions was paid in relation to
this offering as well as an issuance of 50,000 shares of the Company's common
stock valued at $67,500 to Gunn Allen and associates. Furthermore, during the
quarter ended August 30, 2001, there was a deemed dividend expense of $229,126
recognized in conjunction with the warrants issued in this offering .

         During the quarter ended November 30, 2001 the Company issued 50,000
shares of the Company's common stock valued at $50,000 to one of its EMMA
developers for payment toward services performed.

                                       18
<PAGE>

PART II.  OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

         On September 22, 2000, Shaw's Supermarkets filed a lawsuit (Shaw's
Supermarkets, Inc. v. Cash Technologies, Inc., CoinBank Automated Systems Inc.
United States District Court, District of Massachusetts) against the Company
claiming breach of contract and damages. The Company had been placing CoinBank
machines in Shaw's locations in New England and had been negotiating a
settlement and termination agreement with Shaw's to terminate the CoinBank
machine placements in light of the Company's decision to discontinue the free
placement of CoinBank machines. Shaw's is claiming that it is owed $85,000 in
reimbursements in addition to damages for termination totaling approximately
$200,000. The Company believes that the amount owed for reimbursement is
approximately $55,000 and has accrued for the liability and that it has no
liability whatsoever under the contract for termination fees. Furthermore, the
Company has potential claims against Shaw's for damages to the machines. The
Company intends to defend itself in the suit. There can be no assurance that the
Company will be successful in the defense. Settlement negotiations are presently
underway with Shaw's.

         In December 1997, Vindex USA, Inc. filed a complaint against CAS, a
subsidiary of the Company, in the Superior Court of California, Los Angeles
County, seeking to recover $40,000, an unspecified amount of commissions and
interest accrued thereon allegedly due it under the terms of a consulting
agreement it alleged was breached by the Company. The court has entered a
judgment against CAS in favor of Vindex in the sum of $97,864. The Company's
financial statements are reflected on a condensed consolidated basis and
although this liability has been recorded, Cash Technologies, Inc. as a separate
corporate entity has no direct liability for this judgment..

         In March 2001 the Company entered into certain agreements with Hachador
Holdings Limited, an entity with offices located at 6005 Delmar Blvd, St. Louis,
Missouri pursuant to which Hachador agreed to make a loan to the Company in the
principal amount of $225,000. The loan was to be secured by 700,000 shares of
Common Stock of the Company. After delivery of the shares to Hachador, by the
Company, Hachador refused to make the loan proceeds available to the Company.
The 700,000 shares were issued with a restrictive legend and cannot be publicly
sold without the Company's consent. The Company does not believe that Hachador
validly obtained the shares. The Company intends to commence suit to obtain the
shares from Hachador Limited, and for damages.

         The Company is involved in a litigation titled Kane Corte, et al v.
Cash Technologies, Inc. et al., Case # 128256, 32/nd/ Judicial District Parish
of Terrebonne, State of Louisiana. In August 2001, the Company first became
aware that an entity to which it had sold 23 CoinBank machines in October 1999
had filed suit against the Company in Louisiana court and obtained a default
judgment against the Company. The Louisiana judgment was issued on August 15,
2000 and rewarded the purchaser $230,000 in damages and ordered that the
machines be returned to the Company. In March 2001, the purchaser obtained a
sister-state judgment against the Company in California based on the judgment of
the Louisiana court and a writ of execution was issued.

         Upon learning of this matter, the Company immediately initiated legal
actions in Louisiana and California. At a hearing in the Louisiana court, the
Company was granted a Temporary Restraining Order staying enforcement of the
judgment. The Company contends that the Louisiana court had no jurisdiction over
it and that it was never properly served with either the original Louisiana
lawsuit, the judgment issued by the Louisiana court or the California sister-
state judgment. The Company also contends that Kane Corte's allegations are
without merit and that his desire to return the machines is a result of his

                                       19
<PAGE>

failed business practices and his untrained and unqualified service personnel
causing damage to the machines. The Company has initiated legal action in both
Louisiana and California seeking to set aside both judgments and to cause the
matter, including the issue of jurisdiction, to be heard on its merits by the
Louisiana court. The Company believes that it will be successful in these
actions to set aside the judgments. The Company further believes that it has
meritorious defenses to each of the allegations in the action and that it will
ultimately prevail on merits. The Company will incur the cost of defense,
including legal fees, in an undetermined amount in connection with these
matters, which may not be recoverable. There can be no assurance that the
Company will be successful in the defense.

ITEM 2.  CHANGE IN SECURITIES

         During the quarter ended November 30, 2001 the Company issued 50,000
shares of the Company's common stock valued at $50,000 to one of its EMMA
developers for payment toward services performed.

ITEM 3.  DEFAULT UPON SENIOR SECURITIES

     In 1997 the Company entered into a credit agreement with GE Capital
Corporation ("GE") pursuant to which the Company borrowed $5,500,000 for the
purchase of CoinBank component equipment, working capital and general corporate
purposes. The Company and GE Capital had negotiated a waiver agreement as of
September 13, 2001 pursuant to which GE Capital agreed to a six (6) month
deferral of interest payments and a twelve (12) month deferral of principal
payments provided (i) the Company granted GE Capital a lien on all of its assets
(ii) the Company paid GE Capital 60% of all proceeds from the sale of its
CoinBank machines (iii) the Company obtained subordination agreements from all
of its noteholders prior to December 30, 2001 whereby the noteholders
subordinate their lien to that of GE Capital (See Note 6) (iv) the sum of
$250,000 is added to the outstanding principal amount of the loan, which is
being amortized over a twelve (12) month period. As of November 30, 2001 the
Company owes $3,679,070, which includes the principal, financing fees and unpaid
interest. Although the Company is currently trying to obtain an extension from
GE Capital to obtain subordination agreements from all of its noteholders, since
the Company was unable to deliver all required subordination agreements by
December 30, 2001 the Company is in default of the waiver agreement.

         In January 2000 the Company completed an offering and raised $3,362,000
in gross proceeds. Pursuant to this offering 67.5 Units were sold in which each
Unit consisted of (i) a Secured Convertible Promissory Note in the principal
amount of $50,000 convertible into Common Stock at a conversion price of $9.50
per share (maturity date can be converted immediately) and (ii) Series B
Redeemable Warrants to purchase an aggregate of 5,000 Warrant Shares at an
exercise price of $13.00 per share (warrants are vested immediately and expire
five years from the date of issuance). As of November 30, 2001 the Company owes
$3,838,498 in principal and interests with regards to these notes.

         Since July 31, 2001 the notes have been in default, however the Company
has made an offer to the noteholders to restructure the debt. Under the offer,
the notes would be extended for two (2) years to July 2003 and the noteholders
will surrender all old warrants priced at $13.50 per share and will receive 2
replacement warrants for every old warrant surrendered. The new warrants are
vested immediately and have a life of 5 years and are exercisable at $1.35 thru
December 31, 2001, $2.20 through January 15, 2002 and $4.50 thereafter. To date
the Company has received executed Acceptance Letters from thirty-two (32) of the
forty-eight (48) noteholders, which modify the terms of the original Promissory
Notes as well as oral commitments to execute such documents from ten (10)
noteholders. The Company is engaged in discussions with the remaining six (6)
noteholders to finalize modifications of their Notes.

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

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<PAGE>

Not Applicable

ITEM 5.   OTHER INFORMATION

          On October 15, 2001 the Company appointed David Grano to its Board of
Directors. Mr. Grano was President and Chief Executive Officer of Card Capture
Services (CCS), the largest independent ATM network in the U.S, for four years.
Previously, Mr. Grano was a Vice President at Nextel, Inc. and National Indirect
Sales Manager for U.S. West.

          Effective December 25, 2001, Vincent Currino resigned from the
Company's Board of Directors.

          Subsequent to the quarter ended November 30, 2001, the Company paid
annual dividends on the Series B Preferred Stock which were due and payable on
June 30, 2001. Each share of Series B Preferred Stock was eligible for $0.40 per
share in cash or at the discretion of the Company, in shares of common stock.
The Company issued a total of 95,239 shares of the Company's common stock.


ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits

NONE

(b)  Reports on Form 8-K

NONE

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SIGNATURE

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 10QSB for the
fiscal quarter ended August 31,2001, to be signed on its behalf by the
undersigned, thereunto duly authorized the 18th day of January 2002.



CASH TECHNOLOGIES, INC.


By:  /S/ Bruce Korman

----------------------------------------
Bruce Korman
President and Chief Executive Officer


By:  /S/ Edmund King

----------------------------------------
Edmund King
Chief Financial Officer

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