**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, 2007





OR





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





COMMISSION
      FILE NUMBER: 001-15783








CASH
      TECHNOLOGIES, INC.


(Exact
      name of registrant as specified in its charter)





DELAWARE
            95-4558331(State
                or other jurisdiction of incorporation
              organization)
            (IRS
                Employer Identification No.)





1434
                W. 11THSTREET,
                LOS ANGELES, CA
            90015(Address
                of principal executive offices)
            (Zip
                Code)





(213)
      745-2000


(Registrant's
      telephone number, including area code)





Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days. Yes x No o








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





On
      October 15, 2007, there were 24,442,976 shares
      of
      common stock, $ .01 par value per share, issued and outstanding.





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act)


Yes o No x










**CASH
      TECHNOLOGIES, INC.**


**FORM
      10-QSB**





**INDEX**





**PAGE
                NO.****PART
                I. FINANCIAL INFORMATION**Item
                1.
            Consolidated
                Financial Statements:Consolidated
                Balance Sheets as of August 31, 2007 (unaudited) and May
                31, 2007
            
            **3**Consolidated
                Statements of Operations for the three-monthperiods
                ended August 31, 2007 and August 31, 2006 (unaudited)
            
            **5**Consolidated
                Statements of Cash Flows for the three-monthperiods
                Ended August 31, 2007 and August 31, 2006 (unaudited)
            
            **6**Notes
                to Consolidated Financial Statements for the three-monthperiods
                ended August 31, 2007 and August 31, 2006 (unaudited)
            
            **7**Item
                2.
            Management's
                Discussion and Analysis of Financial Condition,Results
                of Operations, and Risk Factors
            
            **13**Item
                3.
            Controls
                And Procedures
            
            **25****PART
                II. OTHER INFORMATION**Item
                1.
            Legal
                Proceedings
            
            **26**Item
                2.
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            
            **26**Item
                3.
            Defaults
                Upon Senior Securities
            
            **26**Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            
            **26**Item
                5.
            Other
                Information
            
            **26**Item
                6.
            Exhibits
                and Reports on Form 8-K
            
            **27**SIGNATURES
            
            **27**





2





**PART
      I**





**ITEM
      1. FINANCIAL STATEMENTS**





**CASH
      TECHNOLOGIES, INC.**


**CONSOLIDATED** **BALANCE
      SHEETS**


**(UNAUDITED)**




**AUGUST
                  31,**
              
              **MAY
                  31,****2007**
              
              **2007****ASSETS**CURRENT
                  ASSETS:Cash
                  and cash equivalents
              
              $
              13,763
              
              $
              1,107,649Accounts
                  receivable
              
              
              33,887
              
              
              29,853Prepaid
                  expenses and other current assets
              
              
              194,627
              
              
              194,627Other
                  receivable (net of allowance $50,000)
              
              
              181,551
              
              
              163,551Assets
                  of discontinued operationsCash
              
              
              41
              
              
              41Accounts
                  receivable
              
              
              90,670
              
              
              192,360Prepaid
                  expenses and other current assets
              
              
              263,076
              
              
              263,076Inventory
                  (net of allowance $121,000)
              
              
              121,690
              
              
              121,690Note
                  receivable
              
              
              -
              
              
              1,387,500Other
                  assets
              
              
              18,230
              
              
              18,230Total
                  assets of discontinued operations
              
              
              **493,707**
              
              
              **1,982,897**Total
                  Current Assets
              
              
              **917,535**
              
              
              **3,478,577**CoinBank
                  machines held for sale
              
              
              609,890
              
              
              609,890PROPERTY
                  AND EQUIPMENT (net)
              
              
              29,555
              
              
              26,823NOTES
                  RECEIVABLE
              
              
              -
              
              
              6,879,045CDHC
                  PREFERRED STOCK
              
              
              900,901
              
              
              900,901CLAIMREMEDI
                  PREFERRED STOCK
              
              
              3,500,000
              
              
              3,500,000BIPS
                  PREFERRED STOCK
              
              
              -
              
              
              2,000,000OTHER
                  ASSETS
              
              
              535,295
              
              
              535,295**TOTAL
                  ASSETS**
              
              **$**
              **6,493,176**
              
              **$**
              **17,930,531**





3




**LIABILITIES
                AND STOCKHOLDERS' EQUITY (DEFICIENCY)**CURRENT
                LIABILITIES:Current
                maturities of Notes Payable (Note 5)
            
            $
            3,482,286
            
            $
            3,482,287Due
                to Officers and Directors
            
            
            8,915
            
            
            8,915Convertible
                debt (Note 6)
            
            
            175,769
            
            
            170,519Due
                to Shareholders (Note 4)
            
            
            473,494
            
            
            602,610Accounts
                payable
            
            
            540,894
            
            
            1,131,497Accrued
                liabilities
            
            
            2,465,503
            
            
            2,094,333Dividend
                payable
            
            
            311,246
            
            
            261,246Liabilities
                of discontinued operationsAccounts
                payable
            
            
            725,443
            
            
            725,443Notes
                payable
            
            
            799,064
            
            
            1,172,207Accrued
                expenses and other current liabilities
            
            
            458,026
            
            
            492,026Total
                liabilities of discontinued operations
            
            
            **1,982,533**
            
            
            **2,389,676**Total
                Current Liabilities
            
            
            **9,440,640**
            
            
            **10,141,083**Long-Term
                Notes Payable (Note 6)
            
            
            **1,140,013**
            
            
            **1,134,560****TOTAL
                LIABILITIES**
            
            
            **10,580,653**
            
            
            **11,275,643**COMMITMENTS
                & CONTINGENCIES (Note 7)
            
            
            
            
            
            -MINORITY
                INTEREST
            
            
            (105,188
            )
            
            (98,639
            )MINORITY
                INTEREST OF DISCONTINUED OPERATIONS
            
            
            -
            
            
            -TOTAL
                MINORITY INTEREST
            
            
            **(105,188**
            **)**
            
            **(98,639**
            )**STOCKHOLDERS'
                EQUITY (DEFICIENCY): (Notes 3 and 7)**Stockholder's
                equity of discontinued operationsAdditional
                paid in capital
            
            
            910,000
            
            
            910,000Accumulated
                equity
            
            
            (2,398,826
            )
            
            5,562,266Total
                stockholder's equity of discontinued operations
            
            
            **(1,488,826**
            **)**
            
            **6,472,266**Cumulative
                Redeemable Preferred Stock, 3,000,000 shares authorized,647,715
                and 647,515 shares issued and outstanding at August 31, 2007 and
                May 31,
                2007
            
            
            10,875,112
            
            
            10,875,812Common
                Stock, $0.01 par value, 60,000,000 shares authorized,24,442,976
                and 23,035,964 issued and outstanding at August 31, 2007 and May
                31, 2007
            
            
            367,782
            
            
            366,876Additional
                Paid-In-Capital
            
            
            40,266,952
            
            
            40,177,546Accumulated
                Deficit
            
            
            (54,004,008
            )
            
            (51,138,973
            )**Total
                stockholders' Equity (Deficit)**
            
            
            **(3,982,289**
            **)**
            
            **6,753,527****TOTAL
                LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)**
            
            **$**
            **6,493,176**
            
            **$**
            **17,930,531**





See
      notes
      to consolidated financial statements




4


**CASH
      TECHNOLOGIES, INC.**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS**


**(UNAUDITED)**





**THREE
                MONTH PERIODS****ENDED
                AUGUST 31,****2007**
            
            **2006**NET
                REVENUES
            
            
            43,587
            
            
            34,592COST
                OF REVENUES
            
            
            25,574
            
            
            19,511GROSS
                PROFIT (LOSS)
            
            
            18,013
            
            
            15,081SELLING,
                GENERAL, & ADMINISTRATIVE EXPENSE
            
            
            746,673
            
            
            839,638IMPAIRMENT OF
                INVESTMENT IN BIPS
            
            
            2,000,000
            
            
            -RESEARCH
                AND DEVELOPMENT EXPENSE
            
            
            18,750
            
            
            37,500DEPRECIATION
                & AMORTIZATION EXPENSE
            
            
            754
            
            
            141,066**OPERATING
                LOSS**
            
            
            (2,748,164
            )
            
            (1,003,122
            )INTEREST
                EXPENSE
            
            
            73,421
            
            
            99,092LOSS
                BEFORE INCOME TAXES
            
            
            (2,821,585
            )
            
            (1,102,215
            )INCOME
                TAXES
            
            
            -
            
            
            2,400MINORITY
                INTEREST (Note 13)
            
            
            6,549
            
            
            22,754NET
                LOSS FROM CONTINUING OPERATIONS
            
            **$**
            (2,815,036
            )
            **$**
            (1,081,859
            )DISCONTINUED
                OPERATIONSNET
                REVENUES
            
            $
            -
            
            $
            1,831,901FORGIVENESS
                OF DEBT
            
            
            -COST
                OF REVENUES
            
            
            -
            
            
            (1,249,929
            )SELLLLING,
                GENERAL & ADMINISTRATIVE EXPENSE
            
            
            (130
            )
            
            (611,940
            )INTEREST
                EXPENSE
            
            
            (22,299
            )
            
            (121,874
            )BAD
                DEBT
            
            
            (7,938,663
            )
            
            -INCOME
                (LOSS) FROM DISCONTINUED OPERATIONS
            
            
            (7,961,092
            )
            
            (151,842
            )NET
                LOSS
            
            $
            (10,776,128
            )
            $
            (1,233,701
            )Dividends
                & deemed dividends
            
            $
            50,000
            
            $
            55,000Net
                loss allocable to commonshareholders
            
            $
            (10,826,128
            )
            $
            (1,288,701
            )Basic
                and diluted net loss per share
            
            $
            (0.44
            )
            $
            (0.06
            )(0.31
            )
            
            (0.06
            )Basic
                and diluted weighted average
            
            
            24,442,976
            
            
            20,887,143shares
                of common stock outstanding
            
            
            34,671,863
            
            
            31,519,950





See
      notes
      to consolidated financial statements.




5




**CASH
      TECHNOLOGIES, INC.**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**(UNAUDITED)**





**Three
                Months Ended****August
                31,**
            
            **August
                31,****2007**
            
            **2006****OPERATING
                ACTIVITIES:**Net
                loss
            
            $
            (2,815,036
            )
            $
            (1,233,701
            )Adjustments
                to reconcile net loss to net cash used byoperating
                activities:Impairment
                  of investment in BIPS
            
            
            2,000,000
            
            
            -Minority
                interest
            
            
            (6,549
            )
            
            (22,753
            )Amortization
                of capitalized software
            
            
            -
            
            
            139,942Amortization
                Deemed Interest Expense
            
            
            5,453
            
            
            -Depreciation
                expense
            
            
            (2,732
            )
            
            1,124Changes
                in operating assets and liabilities:Accounts
                receivable
            
            
            (4,033
            )
            
            (1,664
            )Prepaid
                expenses and other current assets
            
            
            -
            
            
            (6,149
            )Other
                receivable
            
            
            (18,000
            )
            
            (3,851
            )Accrued
                interest
            
            
            (6,134
            )
            
            6,384Accounts
                payable
            
            
            (590,603
            )
            
            37,585Accrued
                expenses and other current liabilities
            
            
            371,170
            
            
            528,750Net
                cash used in operating activities
            
            
            (1,054,197
            )
            
            (554,336
            )**FINANCING
                ACTIVITIES:**Proceeds
                from the issuance of warrants
            
            
            
            
            
            -Net
                proceeds from issuance of preferred stock
            
            
            -
            
            
            200,000Proceeds
                from Long-term debt
            
            
            -
            
            
            75,000Repayments
                on short-term debt
            
            
            (130,000
            )
            
            -Proceeds
                from sale of common stock
            
            
            90,311
            
            
            283,400Net
                cash provided by (used in) financing activities
            
            
            (39,689
            )
            
            558,400**CHANGE
                IN CASH AND CASH EQUIVALENTS**
            
            
            (1,093,886
            )
            
            4,064Cash
                and Cash Equivalents, Beginning of Period
            
            
            1,107,649
            
            
            81,355Cash
                and Cash Equivalents, End of Period
            
            $
            13,763
            
            $
            85,419**SUPPLEMENTAL
                DISCLOSURE OF CASH FLOW INFORMATION**Income
                taxes
            
            $
            -
            
            $
            2,400**SUPPLEMENTAL
                DISCLOSURE OF NONCASH TRANSACTIONS**Issuance
                of common stock for services performed
            
            $
            -
            
            $
            3,308Loss
                on operations of discontinued operations
            
            $
            (7,961,092
            )
            
            (151,839
            )Dividends
                declared on preferred stock
            
            $
            50,000
            
            $
            55,000





See
      notes
      to consolidated financial statements




6




**CASH
      TECHNOLOGIES, INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**(UNAUDITED)**





**NOTE
      1:**  **GENERAL**





GOING
      CONCERN:





We
      have
      prepared the financial statements included in this Form 10-QSB assuming that
      we
      will continue as a going concern. Although we have raised additional capital
      since our initial public offering in July 1998, we have never generated
      sufficient revenue-producing activities to sustain our operations. Accordingly,
      we must raise significant capital to fund current operations and to repay
      existing debt. Our auditors have included an explanatory paragraph in their
      report for the year ended May 31, 2007, indicating there is substantial doubt
      regarding our ability to continue as a going concern. The accompanying
      consolidated financial statements do not include any adjustments that might
      result from the outcome of any uncertainty.





PRESENTATION
      OF INTERIM INFORMATION:





In
      the
      opinion of the management of Cash Technologies, Inc. (“Cash Tech” or the
      "Company"), the accompanying unaudited condensed consolidated financial
      statements include all normal adjustments considered necessary to present fairly
      the financial position as of August 31, 2007 and the results of operation and
      cash flows for the three-month periods ended August 31, 2007 and August 31,
      2006. Interim results are not necessarily indicative of results to be expected
      for any subsequent quarter or for the entire fiscal year.





The
      condensed consolidated financial statements and notes are presented as permitted
      by Form 10-QSB. These condensed financial statements have been prepared by
      the
      Company pursuant to the rules and regulations of the Securities and Exchange
      Commission (the "SEC"). Certain information and footnote disclosures, normally
      included in financial statements prepared in accordance with generally accepted
      accounting principles, have been omitted pursuant to such SEC rules and
      regulations. These financial statements should be read in conjunction with
      the
      Company's audited financial statements and the accompanying notes included
      in
      the Company's Form 10-KSB for the year ended May 31, 2007, filed with the SEC.
      The results of operations for the three-month period ended August 31, 2007,
      are
      not necessarily indicative of the results to be expected for any subsequent
      quarter or for the entire fiscal year.





The
      research and development of new software products and enhancements to existing
      software products were expensed as incurred (and recorded in the consolidated
      statement of operation) until technological feasibility has been established.
      Technological feasibility is established upon completion of a detailed program
      design or working model. As of May 31, 2007, capitalized software costs had
      been
      fully amortized . Technological feasibility was achieved in September of 1999
      and commencing October 1, 1999 all expenses related to EMMA software development
      had been capitalized. As of December 31, 2001, we had capitalized $2,771,536
      in
      development and related costs. The EMMA product was available for release to
      the
      public in January 2002 thus all development costs since have been expensed
      including $18,750 and $37,500 for the three months ended August 31, 2007 and
      2006, respectively, and $93,750 and $150,000 for the fiscal years ended May
      31,
      2007 and May 31, 2006 respectively.




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




7




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




IMPAIRMENT
        OF BIPS




During
      the quarter ended August 31, 2007, management concluded that due to adequate
      quarterly data no longer being available, that the resulting uncertainty
      requires us to take a 100% reserve on the BIPS investment. Although we believe
      that our investment in BIPS has the potential for returns previously indicated,
      we have concluded that we can no longer support the value of the investment
      under FSP 115-1.





**NOTE
      2. COMMITMENTS AND CONTINGENCIES**





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




**NOTE
      3: STOCKHOLDERS EQUITY**





In
      the
      fiscal quarter ended August 31, 2007, in private transactions under Section
      4(2)
      of the Securities Act of 1933, as amended, the Company sold 152,000 shares
      of
      the Company’s Common Stock for gross proceeds of $90,311. In addition, the
      Company issued 75,000 five year Common Stock purchase warrants with exercise
      prices ranging from $0.01 to $1.50.





**NOTE
      4: RELATED PARTY TRANSACTIONS**





As
      of
      August 31, 2007, we were in arrears of $286,849 for the salary to Mr. Korman,
      and owed $130,560 in accrued rent for our offices to a company in which Mr.
      Korman has a beneficial interest.





During
      the month of July 2006, Edmund King, the Chief Financial Officer, loaned the
      company $50,000 and Bruce Korman, Chief Executive Officer, $25,000,
      respectively. As of August 31, 2007, these loans have been paid in full.





**NOTE
      5: SHORT-TERM DEBT**





In
      1997,
      we entered into a credit agreement with G.E. Capital Corporation, or G.E.
      Capital, pursuant to which we borrowed $ 5,500,000 for the purchase of CoinBank
      component equipment, working capital and general corporate purposes. Due to
      our
      inability to repay G.E. Capital on the original terms, on September 29, 2000
      we
      entered into the first of several loan modifications with G.E. The most recent
      modification requires interest-only payments at a rate of 9.5% and the entire
      unpaid balance is due at maturity in February, 2008. We do not have sufficient
      capital to repay this debt. We have no current plan or   capability to
      repay G.E. its principal. As of August 31, 2007, we owed G.E. Capital
      $$3,683,045, which includes the principal, financing fees and unpaid
      interest.





In
      January 2000, we completed a private placement offering of convertible notes
      and
      warrants under Section 4(2) of the Securities Act of 1933. The offering
      consisted of units, each unit comprised of a secured convertible promissory
      note
      in the principal amount of $50,000, bearing interest at the rate of 10% per
      annum and Series B Redeemable Warrants to purchase 5,000 shares of common stock.
      GunnAllen Financial, Inc., one of our investment bankers and an underwriter
      in
      our initial public offering, was engaged as placement agent for this offering.
      We received gross proceeds from this offering of $3,362,000 from the sale of
      67.2 Units. As a result of this offering, we issued notes in the aggregate
      principal amount of $3,362,000 and 336,200 Series B common stock Purchase
      Warrants The notes were originally convertible into our common stock at the
      conversion rate of $9.50 per share. The Series B Warrants were originally
      exercisable at a price of $13.00 per share. The notes were originally due and
      payable on July 31, 2001. The notes were secured by a first priority lien on
      all
      of our assets.




8





Since
      July 31, 2001, 41 out of 48 noteholders have converted their notes to equity
      at
      a conversion price of $2.50 per share. Noteholders who converted to equity
      also
      received two replacement warrants exercisable at $1.35 per share for each
      warrant previously held. An additional noteholder has converted $120,876 of
      his
      note for 151,095 common shares. On March 31, 2007, another noteholder agreed
      to
      a new $62,833 note bearing interest at the rate of 10% per annum and due and
      payable on January 31, 2008, replacing the old note. Another 3 notes totaling
      $271,250 as of May 31, 2007, were canceled due to the expiration of the statute
      of limitations. The 2 remaining outstanding notes are in default of their
      original or restructured terms.





As
      of
      August 31, 2007, we owed $175,769 in principal and interest to the 2 remaining
      noteholders. There can be no assurance that we will be able to pay the remaining
      noteholders when the notes are due and that the noteholders will not declare
      an
      event of default and demand immediate payment or seek to attach our assets,
      including our EMMA technology. (See Risk Factors).





In
      May
      2003 we completed a private placement offering with one of our stockholders
      consisting of convertible notes and warrants under Section 4(2) of the
      Securities Act of 1933. The offering consisted of an unsecured convertible
      promissory note in the principal amount of $20,750, bearing interest at the
      rate
      of 5% per annum and redeemable warrants to purchase 30,000 shares of common
      stock. The note is convertible into our common stock at the conversion rate
      of
      $0.50 per share. The Warrants are exercisable at a price of $0.65 per share.
      We
      also reduced the exercise price of 45,000 Series B warrants owned by the
      stockholder from $4.50 to $0.65 per share which were converted immediately
      for
      gross proceeds to us of $29,250. The note is due and payable on May 8, 2008.
      A
      deemed dividend expense of $25,901 was recognized in conjunction with the
      warrants offered in this placement.




NOTE
      6: LONG-TERM DEBT




On
      May
      22, 2007 we completed a private placement consisting of a convertible note,
      common stock and common stock warrants. The total placement was for $1,500,000
      and consisted of:




·
              a
                  6% interest 3 year convertible note for $1,200,000 with a conversion
                  price
                  of $1.05 per share,




·
                $300,000
                  of common stock at $0.80 per share, or 375,000 shares of common
                  stock,
  ·
                    common
                      stock purchase warrants to purchase 759,000 shares of common
                      stock at
                      $1.75 per share


**NOTE
      7: STOCK BASED COMPENSATION**




**(s)
        Employee Stock Option** -
        Effective March 1, 2006 the Company adopted SFAS 123(R) using the modified
        prospective approach and accordingly prior periods have not been restated
        to
        reflect the impact of SFAS 123(R). Under SFAS 123(R), stock-based awards
        granted
        prior to its adoption will be expensed over the remaining portion of their
        vesting period. These awards will be expensed under the straight-line method
        using the same fair value measurements which were used in calculating pro
        forma
        stock-based compensation expense under SFAS 123. For stock-based awards granted
        on or after January 1, 2006, the Company will amortize stock-based compensation
        expense on a straight-line basis over the requisite service period, which
        is
        three years.
 
 SFAS
        123(R) requires forfeitures to be estimated at the time of grant and revised,
        if
        necessary, in subsequent periods if actual forfeitures differ from initial
        estimates. Stock-based compensation expense has been recorded net of estimated
        forfeitures for the year ended May 31, 2007 such that expense was recorded
        only
        for those stock-based awards that are expected to vest. Previously under
        APB 25
        to the extent awards were forfeited prior to vesting, the corresponding
        previously recognized expense was reversed in the period of
        forfeiture.




9




**NOTE
      8: SEGMENT REPORTING**





We
      operate through two principal business segments: Claim-Remedi Services, Inc.,
      and CashTechCard Systems, Inc.




**Three
                months ended****August
                31,****2007**
            
            **2006**Net
                revenues:Claim
                Remedi/CashTechCard
            
            
            43,587
            
            
            34,467Unallocated
            
            
            -
            
            
            1,832,02643,587
            
            
            1,866,493Interest
                expense:Claim
                Remedi/CashTechCard
            
            
            -
            
            
            -Unallocated
            
            
            73,421
            
            
            220,96673,421
            
            
            220,966Depreciation
                & Amortization:Claim
                Remedi/CashTechCard
            
            
            -
            
            
            -Unallocated
            
            
            754
            
            
            141,066754
            
            
            141,066Segment
                Income (loss):Claim
                Remedi/CashTechCard
            
            
            (251,656
            )
            
            (276,936
            )Unallocated
            
            
            (2,563,380
            )
            
            (956,765
            )(2,815,036
            )
            
            (1,233,701
            )





**NOTE
      9: MINORITY INTEREST**





For
      the
      three months ended August 31, 2007, we have allocated $6,549 of losses in CT
      Holdings to minority interest.





On
      November 5, 2004 TAP Holdings, LLC (dba Tomco Auto Products) acquired
      substantially all of the assets and assumed certain liabilities of TomcoAuto
      Products, Inc. On October 31, 2006 TAP Holdings, LLC sold most of its assets
      to
      Champion Parts, Inc. The sale included a transfer of all carburetor related
      inventory, trademarks, patents and sales contracts. TAP received $1.3 million
      in
      cash and up to $9.1 million in future payments, represented by a secured
      promissory note, to be paid over a maximum of 11 years based on a percentage
      of
      combined carburetor sales by Champion. Under the original terms of the agreement
      after Cash Tech's investment in TAP has been fully repaid (approximately $1.1
      million), TAP would pay approximately 37% of the proceeds from the Champion
      note
      to Tibrand Capital Ventures, LLC, Cash Tech's former partner in TAP, with the
      remainder paid to Cash Tech, however, Champion has defaulted on the note as
      a
      result of its filing for bankruptcy protection on October 10, 2007 (see
      Note 10 Subsequent Events).





**NOTE
      10: SUBSEQUENT EVENTS**





The
      following was submitted by Champion Parts, Inc., a major creditor to TAP
      Holdings, LLC, Cash Technologies, Inc. subsidiary to the SEC on Form 8-K on
      October 10, 2007.




On
      Wednesday, October 10, 2007, Champion Parts, Inc., (the "Debtor"), filed a
      voluntary petition with the United States Bankruptcy Court for the Western
      District of Arkansas, (the "Court") under Chapter 11 of Title 11 of the United
      States Code in order that it may reorganize its financial obligations and
      capital structure (Case Nos. 4:07-bk-73253). The Debtor will file motions to
      continue to operate its business as "debtor-in possession" under the
      jurisdiction of the Court and in accordance with the applicable provisions
      of
      the Bankruptcy Code and orders of the Court.




10






The
      Debtors have received written notice from PNC Bank, National Association, ("the
      Lender") its primary lender of various events of default under the loan
      covenants and agreements with the lender. Discussions with the senior lender
      resulted in its decision that the company should file for Chapter 7 liquidation
      under the applicable bankruptcy law. However the Company believes it is a viable
      going concern, and can succeed in the future. The lender has stated that it
      intends to seek an orderly liquidation of the Company. As a result, the Company
      intends to seek from the Bankruptcy Court an order allowing it to use Cash
      Collateral to remain in business and service the needs of its customers.




There
      can
      be no assurance as to what the Bankruptcy Court will allow. If it does not
      allow
      the use of Cash Collateral, it is likely that the bank will have a Receiver
      appointed to oversee the orderly liquidation of the Company. If the Court allows
      the use of Cash Collateral, the Company intends to continue to sell to its
      customers and to seek to maximize the value for all its creditors and
      shareholders.




The
      Company intends to submit its plan of reorganization subject to the approval
      of
      the Court."




Champion's
      bankruptcy has resulted in the default of the $9.5 million secured note owed
      by
      Champion to TAP. It is our intention to submit a plan to purchase the assets
      of
      Champion and thereby attempt to recover most or all of the value of the
      defaulted note. We believe that the prospect of recovery is favorable, however
      there can be no assurance of success and we have therefore taken a 100% reserve
      against the remaining balance of the Champion note due to TAP Holdings,
      LLC.




11




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





**SAFE
      HARBOR STATEMENT**





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





**Introduction**





Cash
      Technologies, Inc., is a Delaware corporation, incorporated in August 1995.
      Unless the context otherwise requires, references herein to "we," "our" or
      "Cash
      Tech" refers to Cash Technologies, Inc., and its wholly-owned and majority-owned
      subsidiaries National Cash Processors, Inc., a Delaware corporation; CoinBank
      Automated Systems, Inc., a Delaware corporation; CoinBank Automation Handels
      GmbH, organized operating in Salzburg, Austria, Cash Tech Card Systems, Inc.
      (formerly Cintelia Systems Inc.), a Delaware corporation,CT Holdings, LLC.,
      a
      Delaware corporation of which we own 86.65%, Claim-Remedi Service, Inc.
      (formerly Heuristic Technologies, Inc.), a Delaware company and TAP Holdings,
      LLC (formerly dba Tomco Auto Products), of which we own 100%. Our address is
      1434 West 11th Street, Los Angeles, California 90015. Our telephone number
      is
      (213) 745-2000.





Business
      Highlights





Following
      are certain financial and operational accomplishments during and subsequent
      to
      FY 2007, explained in further detail throughout this document:





·
            Sold
                our Tomco line of business, which we purchased in November 2004 for
                $2.5
                million in cash, for up to $10.4 million in the form of a $9.1 million
                secured promissory note and $1.3 million in cash





·
            Raised
                approx. $2.2M in equity for operations





·
            Established
                strategic relationships with major distribution partners in the healthcare
                industry, including the largest supplier of medical supplies in the
                U.S.,Physician
                Sales and Service (NASDAQ:PSSI) andAccuro
                Healthcare Solutions (formerly Imacs, Inc.), a leading healthcare
                software
                company.







12




·
            Rolled
                out the first electronic pharmacy claims processing platform to the
                U.S.
                Air Force





·
            Completed
                exclusive agreements with debit card distributors including TV advertising
                companyTV
                Media LLC,
                online Latino communityConnectados.com,
                Birthright Israel sponsor Mayanot Institute.





Our
      independent registered public accountant included an explanatory paragraph
      in
      its report for the year ended May 31, 2007, which indicated a substantial doubt
      as to the ability of us to continue as a going concern. This concern is
      primarily due to substantial debt service requirements and working capital
      needs.





Systems
      development expenses, marketing expenses, executive salaries and general and
      other administrative costs are expected to increase as we continue to develop
      and market our products. We anticipate that losses will continue for the near
      future. Our expenses have exceeded net revenues since inception. For the
      three-month periods ended August 31, 2007 and 2006, we incurred net income
      (losses) of approximately $(8,776,128) and $(1,233,701) respectively.




Critical
      Accouting Policies





The
      research and development of new software products and enhancements to existing
      software products were expensed as incurred (and recorded in the consolidated
      statement of operation) until technological feasibility has been established.
      Technological feasibility is established upon completion of a detailed program
      design or working model. As of May 31, 2007, capitalized software costs had
      been
      fully amortized . Technological feasibility was achieved in September of 1999
      and commencing October 1, 1999 all expenses related to EMMA software development
      had been capitalized. As of December 31, 2001, we had capitalized $2,771,536
      in
      development and related costs. The EMMA product was available for release to
      the
      public in January 2002 thus all development costs since have been expensed
      including $93,750 for the fiscal year ended May 31, 2007 and $150,000 for the
      fiscal year ended May 31, 2006 .





Amortization
      of the capitalized software commenced on January 1, 2002. Amortization had
      been
      calculated over a seven (7) year period for the quarter ended February 28,
      2002
      resulting in an amortization expense of $65,989. Management changed the
      amortization period for capitalized software, to five (5) years starting March
      1, 2002, primarily to approximate the estimated period over which the business
      brought about by the technology will expand into its expected capacity. As
      of
      March 1, 2002, net unamortized capitalized software amounted to $2,705,547.
      The
      unamortized cost as of March 1, 2002 is being amortized over the remaining
      revised estimated life. The change resulted in an amortization expense of
      $205,931, an increase of $40,959 ($0.01 per share) from the original estimated
      amortization period, for the year ended May 31, 2002. During the fiscal year
      ended May 31, 2007, we amortized an additional $326,531 of capitalized software.





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





Much
      of
      our SG&A costs are fixed in nature, therefore, as the volume of transactions
      and revenues increase, our SG&A does not increase proportionately.





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




13




**RESULTS
      OF OPERATIONS**





**THREE
      MONTHS ENDED AUGUST 31, 2007 COMPARED TO THE THREE MONTHS ENDED AUGUST 31,
      2006.**





*Net
      revenues* for
      the
      three-month period ended August 31, 2007 increased to $43,587 compared to
      $34,592 for the same 2006 period. The increase in net revenue is attributable
      to
      an increase in sales of our health care data processing.





*Cost
      of revenues* for
      the
      three-month period ended August 31, 2007 was $25,574 compared to $19,511. The
      increase in cost of revenues is directly related to the increase in sales.





*Gross
      profit* for
      the
      three months ended August 31, 2007 was $18,013 compared to $15,081 for the
      same
      period a year ago.





Se *lling,
      General and Administrative* expenses
      for the three months ended August 31, 2007, decreased to $746,673 compared
      to
      $839,638 for the three months ended August 31, 2006. These expenses consist
      primarily of wages (and wage related costs), outside contractor expenses,
      travel/promotional expenses, professional services and facilities/office related
      expenses.





*Research
      and development* expenses
      for the three months ended August 31, 2007, were $18,750 compared to $37,500
      for
      the three months ended August 31, 2006.





*Depreciation
      and amortization* expenses
      for the three months ended August 31, 2007, and August 31, 2006, were $754
      and
      $141,066, respectively. The substantial decrease is due to the Capitalized
      Software asset being completely amortized in prior periods.





*Interest
      expense* for
      the
      three months ended August 31, 2007 and August 31, 2006, was $73,421 and $99,092,
      respectively the increase was due to additional interest paid to retire a
      secured note.





*Minority
      Interest* for
      the
      three months ended August 31, 2007 and August 31, 2006, is $6,549 and $22,754,
      respectively





*Income
      Taxes* for
      the
      three months ended August 31, 2007 and August 31, 2006, is zero and $2,400,
      respectively





*Bad
      debt expense* for
      the
      three months ended August 31, 2007 was $7,938,663 compared to zero for the
      2006
      period. The Company wrote off a note receivable from Champion Auto due to
      receiving notification that Champion has filed for Chapter 11 bankruptcy
      protection.





As
      a
      result of the foregoing, net income (losses) for the three months ended August
      31, 2007 and August 31, 2006, are $10,776,128 and $1,233,701,
      respectively.




Impairment
      of investment in BIPS for the three months ended August 31, 2007 and August
      31,
      2006, is $2,000,000 and zero respectively. The Company wrote down the investment
      in BIPS to zero (See note 1)




14


**LIQUIDITY
      AND CAPITAL RESOURCES**





Our
      capital requirements have been and will continue to be significant, and our
      cash
      requirements have exceeded cash flow from operations. At August 31, 2007, we
      had
      a working capital deficit of $8,523,105 compared to working capital of $331,640
      at May 31, 2007. The large change is a direct result of write off of the
      Champion note receivable. At August 31, 2007, we had a cash balance of
      approximately $13,763. We are in immediate need of working capital to continue
      our business and operations. To date, we have been funding our operations
      primarily through the issuance of equity in private placement transactions
      with
      existing stockholders or affiliates of stockholders. There can be no assurance
      that we will be able to continue to raise required working capital in this
      or
      any other manner.





Since
      inception, we have satisfied our working capital requirements through limited
      revenues generated from operations, the issuance of equity and debt securities,
      borrowing under a line of credit and loans from our security holders. Our
      independent certified public accountant included an explanatory paragraph in
      its
      report for the year ended May 31, 2007, which indicated a substantial doubt
      as
      to our ability to continue as a going concern. This concern is primarily due
      to
      substantial debt service requirements and working capital needs.





*Net
      cash used in operating activities* was
      $1,076,626 for the three-months ended August 31, 2007 compared to $(554,336)
      for
      the three-months ended August 31, 2006. The increase was primarily due to a
      decrease in accounts payable.





*Net
      cash used in investing activities* for
      the
      three-months ended August 31, 2007, was zero as compared to zero for the
      three-months ended August 31, 2006.





*Net
      cash provided by (used in) financing activities* for
      the
      three-months ended August 31, 2007, was $(39,689) as compared to $558,400 for
      the three-months ended August 31, 2006. The decrease was attributable to the
      net
      result of various fund raising activities plus repayment for short-term debt.





In
      1997,
      we entered into a credit agreement with G.E. Capital Corporation, or G.E.
      Capital, pursuant to which we borrowed $ 5,500,000 for the purchase of CoinBank
      component equipment, working capital and general corporate purposes. Due to
      our
      inability to repay G.E. Capital on the original terms, on September 29, 2000
      we
      entered into the first of several loan modifications with G.E. The most recent
      modification requires interest-only payments at a rate of 9.5% and the entire
      unpaid balance is due at maturity in February, 2008. We do not have sufficient
      capital to repay this debt. We have no current plan or   capability to
      repay G.E. its principal. As of August 31, 2007, we owed G.E. Capital
      $$3,683,045, which includes the principal, financing fees and unpaid
      interest.





In
      January 2000, we completed a private placement offering of convertible notes
      and
      warrants under Section 4(2) of the Securities Act of 1933. The offering
      consisted of units, each unit comprised of a secured convertible promissory
      note
      in the principal amount of $50,000, bearing interest at the rate of 10% per
      annum and Series B Redeemable Warrants to purchase 5,000 shares of common stock.
      GunnAllen Financial, Inc., one of our investment bankers and an underwriter
      in
      our initial public offering, was engaged as placement agent for this offering.
      We received gross proceeds from this offering of $3,362,000 from the sale of
      67.2 Units. As a result of this offering, we issued notes in the aggregate
      principal amount of $3,362,000 and 336,200 Series B common stock Purchase
      Warrants The notes were originally convertible into our common stock at the
      conversion rate of $9.50 per share. The Series B Warrants were originally
      exercisable at a price of $13.00 per share. The notes were originally due and
      payable on July 31, 2001. The notes were secured by a first priority lien on
      all
      of our assets.





Since
      July 31, 2001, 41 out of 48 noteholders have converted their notes to equity
      at
      a conversion price of $2.50 per share. Noteholders who converted to equity
      also
      received two replacement warrants exercisable at $1.35 per share for each
      warrant previously held. An additional noteholder has converted $120,876 of
      his
      note for 151,095 common shares. On March 31, 2007, another noteholder agreed
      to
      a new $62,833 note bearing interest at the rate of 10% per annum and due and
      payable on January 31, 2008, replacing the old note. Another 3 notes totaling
      $271,250 as of May 31, 2007, were canceled due to the expiration of the statute
      of limitations. The 2 remaining outstanding notes are in default of their
      original or restructured terms.




15




As
      of
      August 31, 2007, we owed $175,769 in principal and interest to the 2 remaining
      noteholders. There can be no assurance that we will be able to pay the remaining
      noteholders when the notes are due and that the noteholders will not declare
      an
      event of default and demand immediate payment or seek to attach our assets,
      including our EMMA technology. (See Risk Factors).





In
      November 2004, TAP Holdings, LLC established a line of credit with BFI Business
      Finance. The maximum amount available under the line of credit is $2,000,000,
      limited to 60% of eligible accounts receivable plus 60% of eligible inventory
      up
      to $1,000,000, less any availability reserves, as defined in the loan agreement.
      Interest is payable monthly at 4.0% per annum above the prime interest rate
      (10%
      at May 31, 2005). The line of credit is collateralized by a security
      interest in TAP's accounts receivable, inventories, property and equipment
      and
      certain other assets as well as a limited personal guaranty from TAP's chairman
      (who is not an employee of Cash Technologies). TAP must also adhere to covenant
      limitations, conditions and restrictions as set forth in the loan and security
      agreement. As of August 31, 2007, there was $300,910 outstanding including
      interest.




16




**RISK
      FACTORS**





The
      following factors, in addition to those discussed elsewhere, should be
      considered carefully in evaluating our business and us. An investment in our
      shares involves a high degree of risk and is suitable only for those investors
      who can bear the risk of loss of their entire investment.





Risks
      Related to Our Financial Condition





**We
      have limited revenues and a history of incurring losses, which has resulted
      in
      our independent accountants issuing opinions containing doubts about our ability
      to continue as a going concern.**





We
      have
      generated limited revenues since our inception, and, while we expect to generate
      significant revenues within the next fiscal year, there is no assurance that
      we
      will be successful. For the fiscal years ended May 31, 2007 and 2006, we had
      net
      sales of $313,946 and $55,007, respectively. Virtually all of our revenues
      for
      the fiscal year ended May 31, 2005 until the quarter ending November 30, 2006
      were derived from our TAP subsidiary; however TAP operations substantially
      ceased on October 31, 2006 with the sale of most of its assets. Our efforts
      are
      now focused on the healthcare and financial data processing products which
      are
      marketed by our Claim-Remedi Services, Inc. and CashTechCard Systems, Inc.
      subsidiaries, however revenues will be substantially lower and losses will
      continue until and unless our products are more widely sold.





Prior
      to
      the fiscal year ended May 31, 2007 we have incurred losses since our inception.
      For the last two fiscal years ended May 31, 2006 and 2007, net income (losses)
      of ($5,038,393) and $(3,733,746) respectively. Net income for the fiscal year
      ended May 31, 2006, was derived principally from our purchase of the Tomco
      assets. While management believes that it will generate operating profits in
      the
      future, no assurance can be given. In its reports accompanying our audited
      financial statements for the fiscal years ended May 31, 2006 and 2007, our
      independent auditors included an explanatory paragraph wherein they expressed
      substantial doubt about our ability to continue as a going concern. For the
      three month period ended August 31, 2007 we have incurred additional (losses)
      of
      $(8,776,128) which include a one time bad debt expense of $7,938,663.





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





As
      of
      August 31, 2007 we had outstanding current liabilities of $9,440,640, of which
      $175,769 is not being paid as agreed. Our creditors have, to date, agreed not
      to
      accelerate on these obligations and not to foreclose on our assets. However,
      should the creditors demand immediate repayment, we would have to raise the
      needed funds to satisfy the obligations, possibly on unsatisfactory terms or
      failing that, we would have to consider filing for bankruptcy protection.





**We
      have an immediate need for capital and if we are unable to obtain the financing
      we need, our business may fail.**





As
      of
      August 31, 2007, Cash Tech had working capital deficit of $8,523,105 and
      available cash of $13,763. Our capital requirements have been and will continue
      to be significant, and our cash requirements have exceeded cash flow from
      operations since inception. We are in immediate need of capital to continue
      to
      operate. We have been dependent on the proceeds of private placements of our
      debt and equity securities to satisfy our working capital requirements. We
      will
      be dependent upon the proceeds of future private placement offerings or other
      public offerings to fund our short-term working capital requirements, to fund
      certain marketing activities and to continue implementing our business strategy.
      There can be no assurance we will be able to raise necessary capital. To the
      extent that we incur indebtedness or issue debt securities, we will be subject
      to all of the risks associated with incurring indebtedness, including the risks
      that interest rates may fluctuate and cash flow may be insufficient to pay
      principal and interest on any such indebtedness. Any inability to obtain
      additional financing when needed could require us to significantly curtail,
      or
      possibly cease altogether, our operations. There can be no assurance that our
      lenders will not declare an event of default and demand immediate payment or
      seek to attach our assets. As of August 31, 2007, we also owe $3,683,045 to
      General Electric Capital Corporation. In 2000, we entered into the first of
      several loan renewals with G.E., the most recent of which was executed in
      December 2006 and will expire on February 1, 2008. We have no current
      arrangement or capability to repay G.E. its principal.




17





**Our
      assets serve as collateral for various loan obligations and therefore may not
      be
      available for distribution to stockholders in the event of liquidation.**





We
      have
      previously granted security interests in all of our assets to several lenders,
      including the holder of notes in the principal and interest amount of
      $250,000 issued in a placement which was completed in January 2000, equipment
      liens in favor of General Electric Capital Corporation pursuant to a Master
      Security Agreement originally entered into in May 1997 and liens in favor of
      BFI
      Finance on all assets of TAP Holdings pursuant to a Loan and Security Agreement
      entered into in November, 2004.





The
      G.E.
      loan is secured by certain of our CoinBank machines. As of August 31, 2007,
      we
      were indebted to G.E. in the amount of approximately $3,683,045 including
      interest. As a result of the aforementioned security interests, creditors would
      be entitled to collect upon the assets prior to any distribution being available
      to holders of our Common Stock or Preferred Stock.





The
      BFI
      loan is a revolving accounts receivable credit facility secured by all of the
      business assets of TAP Holdings, LLC as well as a limited personal guaranty
      from
      TAP's former chairman (who is not an employee of Cash Technologies). As of
      August 31 2007 we owed BFI approximately $799,064 including interest. The
      outstanding balance owed to BFI is expected to be fully paid by approximately
      October, 2007 from the collection of remaining Tomco receivables (which were
      not
      sold by TAP in the Tomco sale transaction) and monthly note payments from the
      acquirer of the Tomco assets.





**Any
      additional financing that we may obtain may substantially dilute the interests
      of our stockholders** .





To
      the
      extent that we obtain additional financing through the issuance of additional
      equity securities in the future, such issuance may involve substantial dilution
      to our then-existing stockholders.





**Risks
      Related to TAP Holdings, LLC**





**TAP’s
      revenues are entirely dependent on payments from one company**




On
        October 31, 2006, TAP sold most of its assets to Champion Parts, Inc. The
        initial cash payment from Champion of $1.3 million was paid to TAP's secured
        lender. The remainder of the purchase price was in the form of a $9.1 million
        promissory note with a term of 11 years. However, on Wednesday, October 10,
        2007, Champion Parts, Inc., (the "Debtor"), filed a voluntary petition with
        the
        United States Bankruptcy Court for the Western District of Arkansas, (the
        "Court") under Chapter 11 of Title 11 of the United States Code in order
        that it
        may reorganize its financial obligations and capital structure (Case Nos.
        4:07-bk-73253). The Debtor will file motions to continue to operate its business
        as "debtor-in possession" under the jurisdiction of the Court and in accordance
        with the applicable provisions of the Bankruptcy Code and orders of the
        Court.




18




**Risks
      Related to Our Healthcare and Prepaid Debit Card Products**





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





Claim-Remedi’s
      healthcare products compete with products offered by companies that are larger,
      better known and better capitalized than Claim-Remedi. Similarly, competition
      in
      the prepaid debit card market is intense and some competitors are larger and
      more established than CashTechCard. Claim-Remedi and CashTechCard have taken
      steps and developed features designed to differentiate our products, however
      these steps may prove inadequate in which event the companies might have to
      withdraw one or more of their products which would have a material adverse
      effect on Cash Technologies.





**Claim-Remedi
      and CashTechCard are liable for the loss or misuse of personal information.**





Claim-Remedi,
      CashTechCard and their affiliates have custody of, or come into contact with,
      various types of personal information about consumers, their medical records
      and
      financial transactions. The company has taken steps to safeguard such
      information and requires that its suppliers safeguard such information, however,
      in the event such safeguards fail to prevent the loss or misuse of personal
      information, the companies might be liable for any damages caused thereby.





**Claim-Remedi
      and CashTechCard are substantially dependent on third parties for data
      processing and customer support.**





Most
      data
      processing and customer support for Claim-Remedi’s and CashTechCard’s products
      is performed by third parties under various exclusive and non-exclusive
      contracts. This reduces infrastructure development costs and increases speed
      to
      market, however the failure of a third party to perform its duties or renew
      a
      service agreement could be materially detrimental to the companies’ operations.





**Data
      processing margins generally decline as products become more mature.**





Data
      processing products usually become “commoditized” as they mature, with a
      corresponding reduction in profit margins. This is caused by a number of
      factors, including: Increased competition forcing lower prices; increased
      volumes creating economies of scale which permit lower prices by competitors,
      software development costs which are eventually fully amortized also permits
      lower prices, et al. There is no assurance that Claim-Remedi can generate enough
      growth in its sales to outpace these market forces.




19




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





Under
      CashTechCard’s agreement with its card issuing bank, CashTechCard has liability
      for losses caused by card fraud and misuse. These losses are predicted based
      on
      historical statistics and compensating reserves are maintained by the issuing
      bank, however in the event that these losses were to increase due to unexpected
      behavior of a particular card program or cardholder group, CashTechCard and
      the
      Company would be adversely affected.





**Risks
      Related to Our CoinBank Machines**





**Impairment
      Charge**





We
      are
      currently holding for sale approximately 236 CoinBank machines which were
      manufactured when the Company was actively engaged in the sale of such
      equipment. The machines have a carrying value of approximately $609,890 at
      May
      31, 2007. We have taken an impairment charge in the fiscal year ended May 31,
      2004 for the carrying value of our CoinBank machines. Impairment on coin
      machines was $154,140. The impairment was taken due to low inventory turnover
      for the coin machines. In future periods, while we intend to liquidate the
      remaining machines, additional impairment may be taken. If we conclude that
      such
      impairment exists, this could give rise to a substantial expense, which would
      increase our reported losses. For the fiscal year ended May 31, 2007, we sold
      no machines. We have identified parties interested in acquiring the
      remaining units, although there is no assurance that such sales will be
      consummated and we may not fully recover the carrying value of our CoinBank
      machines held for sale.





**We
      may not successfully compete with our competitors.**





The
      credit/debit card industry and healthcare industries are also fully developed
      markets served by large companies who are better able to finance, develop and
      market products than is the Company. We have attempted to differentiate our
      products from those of our competitors but competitive products aimed at our
      target markets could obviate the need for our products or severely limit our
      market penetration.





**Changing
      industry trends may adversely effect our operations.**





Alternatives
      to the use of cash and checks, such as credit cards and wire transfer, debit
      cards and other forms of electronic currency are increasing. Increasing use
      of
      these alternative forms of payment could reduce the need for some the Company's
      products while increasing the need for others.





**We
      are dependent on third-party manufacturers and on independent contractors,
      whose
      nonperformance could harm our business.**





We
      are
      substantially dependent on the ability of the independent contractors we hire
      to
      provide software engineering and support for our products. Any contractor that
      we utilize or may utilize may not have sufficient capacity to satisfy our needs
      during any period of sustained demand. The loss of services of independent
      contractors could disrupt our business. Furthermore, certain of our products
      access networks which are owned and operated by third parties. The failure
      or
      unavailability of these networks could have a material adverse effect on us.





20




**We
      are subject to risks relating to our international installations and
      sales** .





We
      are
      seeking to deploy certain products, such as debit cards, outside of the United
      States. To the extent that we are able to expand our operations and sales
      outside of the United States, we will be subject to the risks associated with
      international operations and sales, including economic and political
      instability, currency fluctuations, credit risks, shipping delays, customs
      duties, export quotas, foreign government regulations and other trade
      restrictions, any of which could have a significant impact on our ability to
      operate effectively outside of the United States or to deliver such products
      overseas to customers on a competitive and timely basis.





**Risks
      Related to Government Regulation and Patent and Licensing matters**





**Uncertainty
      of patent and trademark protection.**





Although
      we have been issued U.S. Patents with respect to our CoinBank and EMMA
      technologies, there can be no assurance that these patents will afford us any
      meaningful protection. We intend to rely primarily on a combination of trade
      secrets, technical measures, copyright protection and nondisclosure agreements
      with our employees to establish and protect the ideas, concepts and
      documentation of software developed by us. Such methods may not afford complete
      protection, and there can be no assurance that third parties will not
      independently develop such technology or obtain access to the software we have
      developed. Although we believe that our use of the software we developed and
      other software used in our operations does not infringe upon the rights of
      others, our use of the software we developed or such other software may infringe
      upon the patents or intellectual property rights of others. In the event of
      infringement, we could, under certain circumstances, be required to obtain
      a
      license or modify aspects of the software we developed or such other software
      or
      refrain from using such software. We may not have the necessary financial
      resources to defend any infringement claim made against us or be able to
      successfully terminate any infringement in a timely manner, upon acceptable
      terms and conditions or at all. Failure to do any of the foregoing could have
      a
      material adverse effect on us. Moreover, if the software we developed or any
      other software or hardware used in our business is deemed to infringe upon
      the
      rights of others, we could, under certain circumstances, become liable for
      damages, which could have a material adverse effect on us. We received United
      States trademark registration for the "CoinBank" name in September 1997.
      Although we are not aware of any claims of infringement or other challenges
      to
      our rights to use this trademark, there can be no assurance that our marks
      do
      not or will not infringe upon the proprietary rights of others or that our
      marks
      would be upheld if challenged.





**Risks
      Related to Our Management**





**The
      success of our business also requires that we retain other qualified management
      personnel.**





Our
      success is also dependent upon our ability to hire and retain additional
      qualified management, marketing, technical, financial and other personnel.
      Competition for qualified personnel is intense, and there can be no assurance
      that we will be able to hire or retain additional qualified personnel. Any
      inability to attract and retain qualified management and other personnel would
      have a material adverse effect on us.





**Our
      directors and officers have limited personal liability.**





Our
      Certificate of Incorporation includes provisions to limit, to the full extent
      permitted by Delaware law, the personal liability of our directors for monetary
      damages arising from a breach of their fiduciary duties as directors. In
      addition, our By-Laws require us to indemnify any of our directors, officers,
      employees or agents to the full extent permitted by Delaware law. As a result
      of
      such provisions in our Certificate of Incorporation and the By-Laws, security
      holders may be unable to recover damages against our directors and officers
      for
      actions taken by them which constitute negligence, gross negligence or a
      violation of their fiduciary duties. This may reduce the likelihood of security
      holders instituting derivative litigation against directors and officers and
      may
      discourage or deter security holders from suing our directors, officers,
      employees and agents for breaches of their duty of care, even though such an
      action, if successful, might otherwise benefit us and our security holders.





21




**Risks
      Related to our Common Stock**




**If
      our common stock is delisted from the American Stock Exchange, we also are
      likely to be subject to the risks relating to penny stocks.**





Our
      common stock has not been traded above $5.00 in over seven years. If our common
      stock were to be delisted from trading on the American Stock Exchange and the
      trading price of the common stock remained below $5.00 per share, trading in
      our
      common stock would be subject to the requirements of certain rules promulgated
      under the Exchange Act related to so-called penny stocks. A penny stock is
      defined generally as any non-exchange listed equity security that has a market
      price of less than $5.00 per share, subject to certain exceptions. These rules
      require additional disclosure by broker-dealers in connection with any trades
      involving a stock defined as a penny stock and impose various sales practice
      requirements on broker-dealers who sell penny stocks to persons other than
      established customers and accredited investors, generally institutions. The
      additional burdens imposed upon broker-dealers by such requirements may
      discourage broker-dealers from effecting transactions in our common stock,
      which
      could severely limit the market price and liquidity of our common stock and
      the
      ability of purchasers to sell our common stock in the secondary market.





**The
      price of our common stock has been, and may continue to be, volatile.**





The
      market price of our common stock has fluctuated over a wide range, and it is
      likely that the price of our common stock will fluctuate in the future. The
      one
      year sale price for our common stock, as reported by the American Stock Exchange
      has fluctuated from a low of $0.60 to a high of $1.75 per share. The market
      price of our common stock could be impacted by a variety of factors, including:





·
            announcements
                of technological innovations or new commercial products by us or
                our
                competitors.





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





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





·
            matters
                related to our financial condition, including our ability to obtain
                necessary capital.





·
            litigation
                affecting us or our products.





·
            general
                market conditions in our industry.





In
      addition, the stock market continues to experience price and volume
      fluctuations. These fluctuations have especially affected the market price
      of
      many technology companies. Such fluctuations have often been unrelated to the
      operating performance of these companies. Nonetheless, these broad market
      fluctuations may negatively affect the market price of our common stock.





**We
      have the discretion to issue additional shares of preferred stock with rights
      and preferences superior to those granted to holders of our common stock.**





Our
      Certificate of Incorporation authorizes our board of directors to issue up
      to
      1,500,000 shares of preferred stock, from time to time, in one or more series.
      Our board of directors is authorized, without further approval of the security
      holders, to fix the dividend rights and terms, conversion rights, voting rights,
      redemption rights and terms, liquidation preferences, and any other rights,
      preferences, privileges and restrictions applicable to each new series of
      preferred stock. The issuance of such stock could adversely affect the voting
      power of the holders of common stock and, under certain circumstances, make
      it
      more difficult for a third party to gain control of us, discourage bids for
      our
      common stock at a premium, or otherwise adversely affect the market price of
      our
      common stock.




**Risks
      Related to our listing on the American
      Stock Exchange**




We
      are not in compliance with the continued listing
      standards of the American Stock Exchange (AMEX) and are subject to delisting.




As
      a result failing to meet the minimum continued
      listing standards of the AMEX, including the reduction in our stockholders
      equity below $6,000,000, we are subject to delisting in accordance with AMEX
      rules. It is likely that AMEX will require us to submit a plan for regaining
      compliance with the listing standards. If AMEX accepts the plan and we meet
      the
      plan milestones, we will continue to be listed on AMEX. If AMEX does not accept
      the plan and we do not meet the plan milestones, it is likely that AMEX will
      move to delist our stock. While we believe that the acquisition of the Champion
      assets (see above) and other investments being contemplated, if consummated,
      have the ability to return the company to good standing with AMEX, there can
      be
      no assurance that AMEX will accept any plan we propose or that we will meet
      the
      plan milestones.




22




**ITEM
      3. CONTROLS AND PROCEDURES**





The
      Company maintains disclosure controls and procedures (as defined in Exchange
      Act
      Rule 13a-15(e)) that are designed to assure that information required to be
      disclosed in its Securities Exchange Act of 1934 reports is recorded, processed,
      summarized and reported within the time periods specified in the Securities
      and
      Exchange Commission’s rules and forms, and that such information is accumulated
      and communicated to management, including the Chief Executive Officer and Chief
      Financial Officer, as appropriate, to allow timely decisions regarding required
      disclosures.





In
      designing and evaluating the disclosure controls and procedures, management
      recognizes that any controls and procedures, no matter how well designed and
      operated, can provide reasonable assurance only of achieving the desired control
      objectives, and management necessarily is required to apply its judgment in
      weighting the costs and benefits of possible new or different controls and
      procedures. Limitations are inherent in all control systems, so no evaluation
      of
      controls can provide absolute assurance that all control issues and any fraud
      within the Company have been detected.





As
      required by Exchange Act Rule 13a-15(b), as of the end of the period covered
      by
      this report the Company, under the supervision and with the participation of
      our
      Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness
      of the Company’s disclosure controls and procedures. Based on this evaluation,
      our Chief Executive Officer and Chief Financial Officer concluded that the
      Company’s disclosure controls and procedures were effective as of that date.





There
      was
      no change in the Company’s internal control over financial reporting during the
      Company’s most recently completed fiscal quarter that has materially affected,
      or is reasonably likely to materially affect, the Company’s internal control
      over financial reporting.





23




**PART
      II. OTHER INFORMATION**





**ITEM
      1. LEGAL PROCEEDINGS**





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





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





In
      the
      fiscal quarter ended August 31, 2007, in private transactions under Section
      4(2)
      of the Securities Act of 1933, as amended, the Company sold 152,000 shares
      of
      the Company’s Common Stock for gross proceeds of $90,311. In addition, the
      Company issued 75,000 five year Common Stock purchase warrants with exercise
      prices ranging from $0.01 to $1.50.





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





**ITEM
      3. DEFAULT UPON SENIOR SECURITIES**





In
      January 2000, we completed a private placement offering of convertible notes
      and
      warrants under Section 4(2) of the Securities Act of 1933. As a result of this
      offering, we issued notes to 48 investors in the aggregate principal amount
      of
      $3,362,000 and 336,200 Series B Common Stock Purchase Warrants. The notes,
      secured by a first priority lien on all of our assets, were originally
      convertible into our common stock at the conversion rate of $9.50 per share
      and
      were due and payable on July 31, 2001. The Series B Warrants were originally
      exercisable at a price of $13.00 per share. Since July 31, 2001, 41 out of
      48
      noteholders have converted their notes to equity at a conversion price of $2.50
      per share. Noteholders who converted to equity also received two replacement
      warrants exercisable at $1.35 per share for each warrant previously held. An
      additional noteholder has converted $120,876 of his note for 151,095 common
      shares. On March 31, 2007, another noteholder agreed to a new $62,833 note
      bearing interest at the rate of 10% per annum and due and payable on January
      31,
      2008, replacing the old note. Another 3 notes totaling $271,250 as of May 31,
      2007, were canceled due to the expiration of the statute of limitations. The
      2
      remaining outstanding notes are in default of their original or restructured
      terms.





As
      of
      August 31, 2007, we owed $175,769 in principal and interest to the 2 remaining
      noteholders. There can be no assurance that we will be able to pay the remaining
      noteholders when the notes are due and that the noteholders will not declare
      an
      event of default and demand immediate payment or seek to attach our assets,
      including our EMMA technology. (See Risk Factors).





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





During
      this three-month period ended August 31, 2007, there have not been any matters
      submitted for a vote from the security holders.





**ITEM
      5. OTHER INFORMATION**




The
        following was submitted by Champion Parts, Inc., a major creditor to TAP
        Holdings, LLC, Cash Technologies, Inc. subsidiary to the SEC on Form 8-K
        on
        October 10, 2007.
  On
        Wednesday, October 10, 2007, Champion Parts, Inc., (the "Debtor"), filed
        a
        voluntary petition with the United States Bankruptcy Court for the Western
        District of Arkansas, (the "Court") under Chapter 11 of Title 11 of the United
        States Code in order that it may reorganize its financial obligations and
        capital structure (Case Nos. 4:07-bk-73253). The Debtor will file motions
        to
        continue to operate its business as "debtor-in possession" under the
        jurisdiction of the Court and in accordance with the applicable provisions
        of
        the Bankruptcy Code and orders of the Court.
  24
   The
        Debtors have received written notice from PNC Bank, National Association,
        ("the
        Lender") its primary lender of various events of default under the loan
        covenants and agreements with the lender. Discussions with the senior lender
        resulted in its decision that the company should file for Chapter 7 liquidation
        under the applicable bankruptcy law. However the Company believes it is a
        viable
        going concern, and can succeed in the future. The lender has stated that
        it
        intends to seek an orderly liquidation of the Company. As a result, the Company
        intends to seek from the Bankruptcy Court an order allowing it to use Cash
        Collateral to remain in business and service the needs of its customers.
  There
        can
        be no assurance as to what the Bankruptcy Court will allow. If it does not
        allow
        the use of Cash Collateral, it is likely that the bank will have a Receiver
        appointed to oversee the orderly liquidation of the Company. If the Court
        allows
        the use of Cash Collateral, the Company intends to continue to sell to its
        customers and to seek to maximize the value for all its creditors and
        shareholders.
  The
        Company intends to submit its plan of reorganization subject to the approval
        of
        the Court."
  Champion's
        bankruptcy has resulted in the default of the $9.5 million secured note owed
        by
        Champion to TAP. It is our intention to submit a plan to purchase the assets
        of
        Champion and thereby attempt to recover most or all of the value of the
        defaulted note. We believe that the prospect of recovery is favorable, however
        there can be no assurance of success and we have therefore taken a 100% reserve
        against the remaining balance of the Champion note due to TAP Holdings,
        LLC.




25




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





(a)
            Exhibits31.1
            Certification
                of Chief Executive Officer31.2
            Certification
                of Chief Financial Officer32.1
            Certification
                Pursuant to Section 906 of the Sarbanes-Oxley Act(b)
            Report
                on Form 8-K filed on March 15, 2007 under Item 7.01.Report
                on Form 8-K filed on June 6, 2007 under Item 1.01 and 3.02.




**SIGNATURES**





Pursuant
      to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
      1934, the Registrant has duly caused this Report on Form 10-QSB for the fiscal
      quarter ended August 31, 2007, to be signed on its behalf by the undersigned,
      thereunto duly authorized the 22nd day of October 2007.





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





By:
                /S/Edmund
                KingEdmund
                KingChief
                Financial Officer




26