<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 AUGUST 31, 2001

OR

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934

                         COMMISSION FILE NUMBER: 0-24569

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

                             CASH TECHNOLOGIES, INC.
             (Exact name of registrant as specified in its charter)

                       DELAWARE                           95-4558331
(State or other jurisdiction of incorporation  (IRS Employer Identification No.)
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 September 30, 2000, there were 4,468,034 shares of common stock, $ .01 par
value, issued and outstanding.

                             CASH TECHNOLOGIES, INC.

<PAGE>

                                   FORM 10-QSB

                                      INDEX

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

Item 1. Consolidated Financial Statements:

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

              Consolidated Statements of Operations for the three-month period ended
              August 31, 2001 and 2000 (unaudited) .................................................    4

              Consolidated Statements of Cash Flows for the three-month period ended
              August 31, 2001 and 2000 (unaudited) .................................................    5

              Notes to Consolidated Financial Statements for the three-month period ended
              August 31, 2001 and 2000 (unaudited) .................................................    6


Item 2. Management's Discussion and Analysis of Financial Condition and
              Results of Operations ................................................................   10


PART II. OTHER INFORMATION

Item 1.    Legal Proceedings .......................................................................   17

Item 2.    Changes in Securities ...................................................................   18

Item 3.    Default Upon Senior Securities ..........................................................   18

Item 4.    Submission of Matters to a Vote of Security Holders .....................................   19

Item 5.    Other Information .......................................................................   19

Item 6.    Exhibits and Reports on Form 8-K ........................................................   19

SIGNATURES .........................................................................................   20
</TABLE>






<PAGE>

PART I

ITEM 1. FINANCIAL STATEMENTS

                             CASH TECHNOLOGIES, INC.
                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                AUGUST 31            MAY 31
                                                                  2001                2001
                                                            -----------------    ---------------
                                                               (Unaudited)
<S>                                                         <C>                  <C>
ASSETS
------
CURRENT ASSETS:
Cash and cash equivalents                                    $       484,049      $           -
Accounts receivable                                                   24,099             23,714
Other receivable (net of allowance $21,000)                           69,666            100,666
Prepaid expenses and other current assets                             45,000             52,500
                                                            -----------------    ---------------

Total Current Assets                                                 622,814            176,880

COINBANK MACHINE SALES & COMMISSIONS                               1,187,494          1,196,783

E-COMMERCE MESSAGE MANAGEMENT ARCHITECTURE                         2,543,013          2,362,749

OTHER:

     PROPERTY AND EQUIPMENT (net)                                    110,740            141,797

     DEEMED INTEREST - GE CAPITAL                                    194,444            277,778

     OTHER ASSETS                                                      2,000              4,629
                                                            -----------------    ---------------

TOTAL ASSETS                                                       4,660,505          4,160,616
                                                            =================    ===============


LIABILITIES AND STOCKHOLDERS DEFICIENCY

CURRENT LIABILITIES:

Accounts payable                                                     917,548            969,129
Accrued expenses & other current liabilities                       1,040,114            943,871
Dividends payable                                                    449,891            318,309
Book overdraft                                                       199,020            200,860
Current maturities of notes payable                                3,529,922          3,352,922
Loans form shareholders                                              213,000            155,000
Convertible debt                                                   3,754,123          3,655,915
                                                            -----------------    ---------------

Total Current Liabilities                                         10,103,618          9,596,006
                                                            -----------------    ---------------

Total Long-Term Liabilities                                                -                  -
                                                            -----------------    ---------------

Total Liabilities                                                 10,103,618          9,596,006

STOCKHOLDER'S DEFICIENCIES
Common stock                                                          36,359             35,488
Redeemable preferred stock                                         3,791,438          3,009,063
Additional paid In capital                                        16,043,813         15,463,960
Accumulated deficit                                              (25,314,723)       (23,943,901)
                                                            -----------------    ---------------

Total stockholders' deficiencies                                  (5,443,113)        (5,435,390)
                                                            -----------------    ---------------

TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIENCIES             $     4,660,505      $   4,160,616
                                                            =================    ===============
</TABLE>

            See notes to condensed consolidated financial statements

                                        3

<PAGE>

                             CASH TECHNOLOGIES, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                              FOR THREE MONTHS ENDED AUGUST 31
                                                                                2001                    2000
                                                                        --------------------    --------------------
                                                                             (Unaudited)             (Unaudited)
<S>                                                                       <C>                     <C>

GROSS REVENUES (Note 1)                                                   $         974,320       $       9,180,322
                                                                        ====================    ====================

REVENUES

NET REVENUES                                                              $          28,852       $         229,807
COST OF REVENUES                                                          $          39,074       $         161,714
                                                                        --------------------    --------------------

GROSS PROFIT (LOSS)                                                       $         (10,222)      $          68,093

SELLING, GENERAL, & ADMIN EXP.                                                      492,613                 878,899
DEPRECIATION EXPENSE                                                                 26,551                  20,164
                                                                        --------------------    --------------------

OPERATING LOSS                                                                     (529,386)               (830,970)
INTEREST EXPENSE                                                                    264,755                 214,274
                                                                        --------------------    --------------------

LOSS BEFORE INCOME TAXES                                                           (794,141)             (1,045,244)
INCOME TAXES                                                                              -                   2,400
                                                                        --------------------    --------------------

NET LOSS                                                                           (794,141)             (1,047,644)
                                                                        --------------------    --------------------

Dividends & deemed dividends to preferred Shareholders                              576,682                  22,444
                                                                        --------------------    --------------------

Net Loss Allocable to common
shareholders                                                                     (1,370,823)             (1,070,088)
                                                                        ====================    ====================

Basic and diluted net loss per share                                      $           (0.38)      $           (0.30)
                                                                        ====================    ====================

Basic and diluted weighted average
shares of common stock outstanding                                                3,566,120               3,522,200
                                                                        ====================    ====================
</TABLE>

            See notes to condensed consolidated financial statements

                                        4

<PAGE>

                             CASH TECHNOLOGIES, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                 FOR THREE MONTHS ENDED AUGUST 31
                                                                               2001                            2000
                                                                       -------------------             -------------------
                                                                           (Unaudited)                     (Unaudited)
<S>                                                                  <C>                               <C>
OPERATING ACTIVITIES:
Net Loss                                                                $        (794,141)              $      (1,047,644)
Adjustments to reconcile net loss to net cash provided  (used) by
operating activities:

Amortization of discount on convertible debt                                       17,583                          52,750
Non-cash deemed interest expense                                                   83,334                               -
Non-cash compensation                                                                   -                          91,384
Depreciation expense                                                               31,592                          24,102
Impairment on Coinbank machines                                                         -                           4,329
Loss on disposal of equipment                                                           -                             368

Changes in operating assets and liabilities:

              Coinbank machinery held for sale                                      9,289                          48,813
              Account receivable                                                   30,615                         154,783
              Inventories                                                               -                         176,163
              Prepaid expenses and other current assets                             7,500                             800
              Other assets                                                          2,629                         (39,834)
              Accounts payable                                                    (51,581)                        497,314
              Accrued interest                                                    157,625                          84,375
              Accrued expenses and other current liabilities                       96,243                         122,573
                                                                       -------------------             -------------------

Net cash provided (used) by operating activities                                 (409,312)                        170,276
                                                                       -------------------             -------------------

INVESTING ACTIVITIES:
              Purchase of equipment                                                  (535)                              -
              Capitalized Software                                               (180,264)                       (319,259)
              Proceeds from sale of equipment                                           -                          40,000
                                                                       -------------------             -------------------

Net cash used by investing activities                                            (180,799)                       (279,259)
                                                                       -------------------             -------------------

FINANCING ACTIVITIES:
              Book overdraft                                                       (1,840)                              -
              Payments on capital lease obligation                                      -                            (487)
              Proceeds from short-term debt                                       158,000                         240,000
              Repayments on long-term debt                                              -                        (310,948)
              Net proceeds from issuance of common stock                          100,000                               -
              Net proceeds from issuance of preferred stock                       818,000                               -
                                                                       -------------------             -------------------

Net cash provided (used) by financing activities                                1,074,160                         (71,435)
                                                                       -------------------             -------------------

CHANGE IN CASH AND CASH EQUIVALENTS                                               484,049                        (180,418)
              Cash, Beginning of period                                                 -                         355,364
                                                                       -------------------             -------------------

              Cash, End of period                                       $         484,049               $         174,946
                                                                       ===================             ===================


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
              Income taxes                                              $               -               $           2,400
              Cash paid for interest                                    $               -               $          29,450
SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTION
              Conversion of preferred stock to common stock             $          35,587               $               -
              Deemed dividend on preferred stock                        $         433,060               $               -
              Deemed dividend on common stock                           $          12,038               $               -
              Issuance of common stock                                  $          99,167               $               -
              Dividends on preferred stock                              $         131,582               $          22,444
</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
raised additional capital since its public offering, 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. Although the Company has
yet to recognize a profit, the Company feels that it will find the appropriate
funding to continue as a going concern.

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 August 31, 2001 and the results of operation and
cash flows for the three months ended August 31, 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-month period ended
August 31, 2001, are not necessarily indicative of the results to be expected
for any subsequent quarter or for the entire fiscal year.

     Gross revenues - include 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 exit the free placement
business. 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 legand and cannot be
publically sold without the Company's consent. The Company does not believe the
shares were validly obtained by Hachador. 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 whom 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 merit less and that his desire to return the machines are a result of his
failed business practices. 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.

                                        7

<PAGE>

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 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 $0.50 per share. 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. 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 up to 5 shares of Series
E 8% Convertible Preferred Stock and 100,000 Series F Warrants. 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 $0.50 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. 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, with one
of its shareholders, comprised of shares of Series F 8% Convertible Preferred
Stock and Series G Warrants. The Series F Stock has annual dividends payable at
8% per year, payable in cash or Common Stock at the option of the Company. The
Series G Warrants have an exercise price of $0.50 per share. 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 common stock. Furthermore, there was a deemed
dividend expense of $229,126 recognized in conjunction with the warrants issued
in this offering.

NOTE 4: RELATED PARTY TRANSACTION

     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 are short-term interest free
loans. As of October 21, 2001 the Company has repaid $8,000. The Company leases
its principal space from Prime Financial, an entity controlled by Mr. Korman. At
August 31, 2001, the Company has $40,666 in arrears under its lease payments.

                                        8

<PAGE>

NOTE 5: LONG-TERM DEBT


     In 1997 the Company entered into a credit agreement with GE Capital
Corporation ("GE") pursuant to which the Company has borrowed $5,500,000 for the
purchase of CoinBank component equipment, working capital and general corporate
purposes. As of May 31, 2001, there was approximately $3,275,070 of principal
and accrued interest outstanding. Although as of August 31, 2001 the Company was
in default, on September 12, 2001 the Company came to terms on an agreement and
signed an extension on this note with GE Capital. The extension provides for a
six (6) month deferral of interest and a twelve (12) month deferral of principal
on this note. As consideration for this new extension, there will be a financing
fee of $250,000 which will be added to the principal. The new principal balance
is $3,624,069 as of September 12, 2001 which includes the financing fee and
unpaid interest. The agreement is also contingent upon the successful
restructuring of the Company's convertible debt (See Note 6).



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). As of July 31, 2001 the notes
are in default.

     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 of which $17,583 and $52,750 was amortized
during the fiscal quarter ended August 31, 2001 and 2000, respectively.

     Although as of July 31, 2001 the notes are in default, the Company has sent
out final documents for execution by debt holders to extend the notes for two
(2) years. Furthermore, the Company has received oral or written consent from
noteholders of approximately $3,000,000 and is confident that the restructuring
will be completed, there can be no assurance though.



NOTE 7:  SEGMENT REPORTING



NOTE 8:  SUBSEQUENT EVENTS


     NONE

     The Company operates through 3 business segments: Cash processing, Coinbank
machines, and E-Commerce Message Management Architecture (EMMA).

     The Company has a firm fixed price contract with the Los Angeles County
Metropolitan Transportation Authority to count currency. Currency is purchased
in bulk at a discount from face value. The currency is processed and deposited
at face value in the Company's account.

     The Company sells self-service coin counting machines to existing equipment
distribution channels.

     The Company is developing an E-Commerce Message Management Architecture
transaction processing system. The system has not yet been deployed. The Company
capitalizes its software development cost.

     Information on the Company's business segments for the three months ended
August 31,

                                          2001                  2000

Net Revenues and Sales:
  Cash processing                       14,902               143,592
  Coinbank machines                     13,950                86,215
  EMMA                                       -                     -
                                    -----------          ------------
                                        28,852               229,807
                                    ===========          ============

Interest expense
  Cash processing                            -                     -
  Coinbank machines                      2,336                 2,335
  EMMA                                       -                     -
  Unallocated                          262,419               211,939
                                    -----------          ------------
                                       264,755               214,274
                                    ===========          ============

Depreciation
  Cash processing                       12,956                 9,494
  Coinbank machines                     10,616                 9,091
  EMMA                                       -                     -
  Unallocated                            8,020                 5,517
                                    -----------          ------------
                                        31,592                24,102
                                    ===========          ============

Segment profit (loss)
  Cash processing                      (58,548)               22,441
  Coinbank machines                   (115,220)             (302,175)
  EMMA                                       -                     -
  Unallocated                         (620,373)             (767,910)
                                    -----------          ------------
                                      (794,141)           (1,047,644)
                                    ===========          ============

Net identifiable assets:
  Cash processing                       51,022               142,561
  Coinbank machines                  1,278,416             1,404,951
  EMMA                               2,543,012             1,480,473
  Unallocated                          790,055               133,932
                                    -----------          ------------
                                     4,662,505             3,161,917
                                    ===========          ============

Expenditure for segment assets:
  Cash processing                            -                     -
  Coinbank machines                          -                     -
  EMMA                                 180,264               319,259
  Unallocated                              535                     -
                                    -----------          ------------
                                       180,799               319,259
                                    ===========          ============


                                        9

<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.


DESCRIPTION OF BUSINESS

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; and CoinBank
Automation Handels GmbH, Salzburg, Austria incorporated in February, 1998.

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 a
significant market demand for such a product and 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
PCs.

                                       10

<PAGE>

     In December of 1997, the Company filed a patent application describing its
transaction processing and networking technologies. The technology, which was
later named EMMA (E-commerce Message Management Architecture), allows for the
seamless integration of conventional ATM and credit card (point-of-sale)
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 e-commerce access from ATMs and Point-Of-Sale (POS)
terminals, as well as increased security for financial transactions conducted
over the public Internet.

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.

     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

                                       11

<PAGE>

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.

                                       12

<PAGE>

RESULTS OF OPERATIONS

THREE MONTHS ENDED AUGUST 31, 2001, COMPARED TO THREE MONTHS ENDED AUGUST 31,
2000.

     Gross revenues include the value of the cash processed and CoinBank machine
sales for the three months ended August 31, 2001, amounted to $974,320 compared
to $9,180,322 for the quarter ended August 31, 2000. Gross revenues do not
represent revenues under Generally Accepted Accounting Principles. Net revenues
for the 2001 period decreased to $28,852 or 2.90% of gross revenues, compared to
$229,807 or 2.50% of gross revenues for 2000 period. The decrease in net revenue
was primarily attributable to the significant decrease in the amount cash
processed due to cash restraints.

     Cost of revenues for the three months ended August 31, 2001, was $39,074
compared to $161,714 for the quarter ended August 31, 2000. The decrease in
direct costs was primarily the result of a significant decrease in labor and
other direct costs. Included in cost of revenues is depreciation expense of
$5,041 and $8,635 for the three months ended August 31, 2001 and 2000,
respectively.

     Gross loss for the three months ended August 31, 2001, was $(10,222)
compared to a gross profit of $68,093 for the three months ended August 31,
2000. The decrease in gross profit/loss was impacted by the factors stated in
revenues and cost of revenues.

     Selling, General and Administrative expenses for the three months ended
August 31, 2001, decreased to $492,613 compared to $878,899 for the three months
ended August 31, 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 the amount of cash processed,
which resulted in a reduction of labor and other administrative costs.

     Depreciation and amortization expenses for the three months ended August
31, 2001, and 2000, were $26,551 and $20,164, respectively. The increase was
the result of additions to fixed assets.

     Interest expense for the three months ended August 31, 2001, and 2000, was
$264,755 and $214,274, respectively. The increase was primarily due to the
increase in the interest expense recognized in relation to the deferment of G.E.
Capital notes payable.

     As a result of the foregoing, net losses for the three months ended August
31, 2001, and 2000, were $794,141 and $1,047,644, respectively.

                                       13

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

     The Company continues to suffer recurring losses from operations as of
August 31, 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 August 31, 2001, the Company had unrestricted cash and cash
equivalents of $484,049 compared to $174,946 as of August 31, 2000. Also on
August 31, 2001, the Company had a working capital deficit of $9,480,804
compared to $1,452,501 on August 31, 2000. The increase in working capital
deficit is primarily the result of reclassifying the $3,452,070 of GE Capital
debt and the $3,362,000 of Secured Convertible Promissory Notes to short term
debt, the latter of which will be reclassified back to long term debt if it can
be successfully restructured (see below).

     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. At September 30, 2001, the Company had
cash and cash equivalents of $105,700. 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 debt
outstanding.

     Net cash used by operating activities was $409,312 for the three months
ended August 31, 2001, as compared to net cash provided by operating activities
of $170,276 for the three months ended August 31, 2000. The total decrease of
$579,588 in net cash provided by operating activities, during the 2001 period
was primarily due to decreases in cash inventory of $176,163, accounts
receivables of $124,168 and accounts payable of 548,895 offset slightly by
increases is non-cash deemed interest expense of 83,334, accrued interest of
$73,250 and other assets of $42,463.

     Net cash used in investing activities was $180,799 for the three months
ended August 31, 2001, as compared to $279,259 for the three months ended August
31, 2000. The decrease in net cash used in investing activities was attributable
to a decrease in capitalized software cost of $138,995 offset by a decrease from
the proceeds from the sale of equipment of $40,000.

     Net cash provided by financing activities for the three months ended August
31, 2001, was $1,074,160 as compared to net cash used of $(71,435) for the three
months ended August 31, 2000. The increase in net cash provided by financing
activities for the 2001 period was primarily attributable to proceeds from the
issuance of preferred stock of $818,000 and proceeds from the sale of common
stock of $100,000.

In 1997, the Company entered into a credit agreement with GE Capital Corporation
("GE") pursuant to which the Company has borrowed $5,500,000 for the purchase of
CoinBank component equipment, working capital and general corporate purposes. As
of August 31, 2001, there was approximately $3,452,070 of principal and accrued
interest outstanding.

                                       14

<PAGE>

Although as of August 31, 2001 the Company was in default, on September 12,
2001 the Company came to terms on an agreement and signed an extension on this
note with GE Capital. The extension provides for a six (6) month deferral of
interest and a twelve (12) month deferral of principal on this note, contingent
upon the successful restructuring of the Company's convertible debt (See Note
6).

     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). Although as of July 31, 2001
the notes are in default, the Company has sent out final documents for execution
by debt holders to extend the notes for two (2) years. Furthermore, the Company
has received oral or written consent from noteholders of approximately
$3,000,000 and is confident that the restructuring will be completed, there can
be no assurance though.

     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 of which $17,583 and $52,750 was amortized
during the fiscal quarter ended August 31, 2001 and 2000, respectively.

     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 a shareholder. Mr. Korman serves as Chief Executive Officer and Chairman of
the Board of Directors. Both loans are short-term interest free loans. As of
October 21, 2001 the Company has repaid $8,000.

     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 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 $0.50 per share. 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. 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 up to 5 shares of Series
E 8% Convertible Preferred Stock and 100,000 Series F Warrants. 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 $0.50 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. There was a deemed
dividend expense of $73,519 recognized in conjunction with the warrants issued
in this offering.

                                       15

<PAGE>

     On August 31, 2001, the Company completed a financing of $500,000, with one
of its shareholders, comprised of shares of Series F 8% Convertible Preferred
Stock and Series G Warrants. The Series F Stock has annual dividends payable at
8% per year, payable in cash or Common Stock at the option of the Company. The
Series G Warrants have an exercise price of $0.50 per share. 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 common stock. Furthermore, there was a deemed
dividend expense of $229,126 recognized in conjunction with the warrants issued
in this offering.

                                       16

<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 exit the free placement
business. 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 legand and cannot be
publically sold without the Company's consent. The Company does not believe the
shares were validly obtained by Hachador. 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 whom 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 merit less and that his desire to return the machines are a result of his
failed business practices. 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.

                                       17

<PAGE>

ITEM 2.   CHANGE IN SECURITIES

     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 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 $0.50 per share. 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. 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 up to 5 shares of Series
E 8% Convertible Preferred Stock and 100,000 Series F Warrants. 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 $0.50 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. 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, with one
of its shareholders, comprised of shares of Series F 8% Convertible Preferred
Stock and Series G Warrants. The Series F Stock has annual dividends payable at
8% per year, payable in cash or Common Stock at the option of the Company. The
Series G Warrants have an exercise price of $0.50 per share. 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 common stock. Furthermore, there was a deemed
dividend expense of $229,126 recognized in conjunction with the warrants issued
in this offering.

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 has borrowed $5,500,000 for the
purchase of CoinBank component equipment, working capital and general corporate
purposes. As of August 31, 2001, there was approximately $3,452,070 of principal
and accrued interest outstanding. The Company had agreed to give GE a lien on
all of the assets of the Company subject to any pre- existing liens. Although as
of August 31, 2001 the Company was in default, on September 12, 2001 the Company
came to terms on an agreement and signed an extension on this note with GE
Capital. The extension provides for a six (6) month deferral of interest and a
twelve (12) month deferral of principal on this note, contingent upon the
successful restructuring of the Company's convertible debt (See Note 6).

     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

                                       18

<PAGE>

     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
August 31, 2001 the Company owes $3,754,123 in principal and interests with
regards to these notes.

     Although as of July 31, 2001 the notes are in default, the Company has sent
out final documents for execution by debt holders to extend the notes for two
(2) years. Furthermore, the Company has received oral or written consent from
noteholders of approximately $3,000,000 and is confident that the restructuring
will be completed, there can be no assurance though.



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

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.



ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

(a)   Exhibits

NONE

(b)   Reports on Form 8-K

NONE

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<PAGE>

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 22nd day of October 2001.



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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