<PAGE>

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                       --------------------------------
                                  FORM 10-QSB

(MARK ONE)

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

FOR THREE MONTH PERIOD ENDED AUGUST 31, 1999

OR

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

                        COMMISSION FILE NUMBER: 0-24569
                           ------------------------

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

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

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

                                (213) 745-2000
             (Registrant's telephone number, including area code)

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

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

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

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

On October  1, 1999,  there were  3,488,665  shares of common  stock,  $ .01 par
value, issued and outstanding.
<PAGE>

                            CASH TECHNOLOGIES, INC.
                                  FORM 10-QSB

                                     INDEX


<TABLE>
<CAPTION>
                                                                                                        PAGE NO.
PART I. FINANCIAL INFORMATION
<S>                                                                                                     <C>
Item 1.    Consolidated Financial Statements:

                  Consolidated Balance Sheets as of August 31, 1999, and 1998 (unaudited)................ 3

                  Consolidated Statements of Operations for the three month period ended
                  Aug 31, 1999, and 1998 (unaudited)..................................................... 4

                  Consolidated Statements of Cash Flows for the three month period ended
                  August 31, 1999, and 1998 (unaudited).................................................. 5

                  Notes to Consolidated Financial Statements for the three month period ended
                  August 31, 1999, and 1998.............................................................. 6


Item 2.    Management's Discussion and Analysis of Financial Condition and
                  Results of Operations.................................................................. 9


PART II. OTHER INFORMATION

Item 1.    Legal Proceedings............................................................................ 16

Item 2.    Changes in Securities ....................................................................... 16

Item 3.    Default Upon Senior Securities   ............................................................ 17

Item 4.    Submission of Matters to a Vote of Security Holders.......................................... 17

Item 5.    Other Information............................................................................ 17

Item 6.    Exhibits and Reports on Form 8-K............................................................. 17

SIGNATURES.............................................................................................. 18
</TABLE>

                                       2
<PAGE>

PART I.       FINANCIAL INFORMATION
ITEM 1.       FINANCIAL STATEMENTS


                            CASH TECHNOLOGIES, INC.
                     CONDENSED CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
                                                                                    AUGUST 31              MAY 31
                                                                                      1999                 1999
                                                                                 ----------------     ----------------
                                                                                   (Unaudited)           (Audited)
<S>                                                                              <C>                  <C>
ASSETS
------
CURRENT ASSETS:
Cash and cash equivalents                                                            $   258,739          $ 1,028,586
Cash Restricted                                                                                -               44,610
Accounts Receivable                                                                      233,970              136,277
Inventories                                                                              150,932              201,555
Prepaid expenses and other current assets                                                 26,681                9,256
                                                                                 ----------------     ----------------

Total Current Assets                                                                     670,323            1,420,284

COINBANK MACHINES HELD FOR SALE                                                        1,559,287            1,577,065

PROPERTY AND EQUIPMENT (net)                                                           1,310,129            1,393,689

OTHER ASSETS                                                                             252,159              56,682
                                                                                 ----------------     ----------------

TOTAL ASSETS                                                                           3,791,898            4,447,720
                                                                                 ================     ================


LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIENCY)

CURRENT LIABILITIES:
Current maturities of Notes Payable                                                    1,210,370            1,172,732
Current maturities of Capital Lease Obligations                                           30,355               42,563
Accounts Payable                                                                         726,120              208,620
Accrued expenses & other current liabilities                                             591,362              388,588
                                                                                 ----------------     ----------------

Total Current Liabilities                                                              2,558,208            1,812,503

Notes Payable less current maturities                                                  2,244,197            2,564,723
Capital lease obligations less current maturities                                              -                    -

COMMITMENTS AND CONTINGENCIES (Note 2)

STOCKHOLDERS EQUITY (DEFICIENCY):
Common Stock                                                                              34,887               34,887
Redeemable Preferred Stock                                                               269,325                    -
Additional Paid In Capital                                                            11,540,125           11,323,780
Accumulated Deficit                                                                  (12,854,844)         (11,288,173)
                                                                                 ----------------     ----------------

Total stockholders' equity (deficiency)                                               (1,010,507)              70,494
                                                                                 ----------------     ----------------

TOTAL LIABILITIES AND STOCKHOLDER EQUITY (DEFICIENCY)                               $  3,791,898          $ 4,447,720
                                                                                 ================     ================
</TABLE>

           See notes to condensed consolidated financial statements

                                       3
<PAGE>

PART I.       FINANCIAL INFORMATION
ITEM 1.       FINANCIAL STATEMENTS


                            CASH TECHNOLOGIES, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                          FOR THREE MONTHS ENDED AUGUST 31
                                                            1999                    1998
                                                     --------------------   ---------------------
                                                         (Unaudited)             (Unaudited)
<S>                                                  <C>                    <C>
GROSS REVENUES*                                           $   10,818,265          $   13,878,754
                                                     ===================    ====================

NET REVENUES                                              $      295,853                 249,431
COST OF REVENUES                                                 326,066                 166,572
                                                     -------------------    --------------------

GROSS PROFIT                                                     (30,213)                 82,859

SELLING, GENERAL, & ADMIN EXP.                                 1,389,709                 935,192
DEPRECIATION & AMORTIZATION EXP.                                  17,671                  56,949
                                                     -------------------    --------------------

OPERATING LOSS                                                (1,437,593)               (909,282)
INTEREST EXPENSE                                                 100,294                 210,974
                                                     -------------------    --------------------

LOSS BEFORE INCOME TAXES                                      (1,537,887)             (1,120,256)
INCOME TAXES                                                       2,614                       -
                                                     -------------------    --------------------

NET LOSS                                                      (1,540,501)             (1,120,256)
                                                     ===================    ====================

Deemed Dividends to preferred Shareholders                        80,569                       -

Net income (loss) Allocable to common
shareholders                                                  (1,621,070)             (1,120,256)

Basic and diluted net loss per share                      $        (0.46)         $        (0.43)

Basic and diluted weighted average
shares of common stock outstanding                             3,488,665               2,620,782
                                                     ===================   =====================
</TABLE>

       *Gross revenues include the value of coin and currency processed
  and does not present revenue under generally accepted accounting principles


           See notes to condensed consolidated financial statements

                                       4
<PAGE>

PART I.  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS

                            CASH TECHNOLOGIES, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                     FOR THREE MONTHS ENDED AUGUST 31
                                                                                  1999                           1998
                                                                           -------------------            -------------------
                                                                               (Unaudited)                    (Unaudited)
<S>                                                                        <C>                            <C>
OPERATING ACTIVITIES:
Net Loss                                                                    $     (1,540,501)               $    (1,120,256)
Adjustments to reconcile net loss to net cash used by
operating activities:

Depreciation and amortization                                                         53,642                         56,949
Impairment of CoinBank Machines held for Sale                                          4,697                              -
Changes in operating assets and liabilities:
              Accrued interest                                                             -                         29,325
              Account receivable                                                     (97,693)                        25,399
              Inventories Coin/Currency                                               50,623                       (101,041)
              Inventories CoinBank Machines                                           42,998                              0
              Prepaid expenses and other current assets                              (17,426)                          (929)
              Other assets                                                           129,378                        302,431
              Accounts payable                                                       517,500                       (179,821)
              Accrued expenses and other current liabilities                         172,172                         50,690
                                                                           -----------------              -----------------

Net cash provided (used) by operating activities                                    (684,610)                      (937,253)
                                                                           -----------------              -----------------

INVESTING ACTIVITIES:
              Property and Equipment                                                       -                       (111,673)
              Restricted Cash                                                         44,610                              -
                                                                           -----------------              -----------------

Net cash provided (used) by investing activities                                      44,610                       (111,673)
                                                                           -----------------              -----------------

FINANCING ACTIVITIES:
              Deferred financing cost                                               (134,000)                      (134,000)
              Payments on capital lease obligation                                   (12,208)                       (18,900)
              Repayments on long-term debt                                          (282,888)                    (1,610,866)
              Net proceeds from issuance of common stock                                   -                      9,478,603
              Net proceeds from issuance of preferred stock                          299,250                              -
                                                                           -----------------              -----------------

Net cash provided (used) by financing activities                                    (129,846)                     7,714,837
                                                                           -----------------              -----------------

CHANGE IN CASH AND CASH EQUIVALENTS
                                                                                    (769,846)                      6,665,910
              Cash, Beginning of period                                            1,028,586                         210,723
                                                                           -----------------              ------------------

              Cash, End of period                                           $        258,739                $      6,876,633
                                                                           =================              ==================


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
              Income taxes                                                  $          2,614                $              -
              Cash paid for interest                                        $        100,294                $        185,575
SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTION
              Reclasssification of depreciation from
              fixed assets-CoinBank machines                               $        357,470                $              -
</TABLE>

           See notes to condensed consolidated financial statements

                                       5
<PAGE>

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


NOTE 1:  GENERAL

PRESENTATION OF INTERIM INFORMATION:
-----------------------------------

     In the opinion of the management of Cash Technologies, Inc. (the
"Company"), the accompanying unaudited condensed consolidated financial
statements include all normal adjustments considered necessary to present fairly
the financial position as of August 31, 1999, and the results of operation and
cash flows for the three months ended August 31, 1999, and 1998. 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, 1999,
filed with the SEC. The results of operations for the three-month period ended
August 31, 1999, are not necessarily indicative of the results to be expected
for any subsequent quarter or for the entire fiscal year.


BASIS OF PRESENTATION:
---------------------

     The unaudited condensed consolidated financial statements of Cash
Technologies, Inc. and its subsidiaries National Cash Processors Inc., CoinBank
Automated Systems, Inc. and CoinBank Automation Handels GmbH, Salzburg, Austria
(collectively, the "Company") included herein, reflect all adjustments,
consisting only of normal recurring adjustments which, in the opinion of
management are necessary to present fairly the Company's financial position,
results of operations and cash flows, for the periods presented.


NOTE 2.  COMMITMENTS AND CONTINGENCIES

     As previously disclosed, in January 1997, the Company entered into a five-
year licensing and manufacturing services agreement with Geld Bearbeitungs
Systeme GES.M.B.H., an Austrian corporation ("GBS"). Pursuant to that agreement
GBS granted the Company the exclusive, perpetual right to use certain technology
incorporated in CoinBank machines in North and South America and Asia, provided
that the Company purchases a minimum quantity of coin-counting components used
in CoinBank machines over the term of the agreement.

     As previously disclosed, in August 1998, the Company entered into a three-
year distribution agreement with GBS, subject to successive one-year renewal
periods. Pursuant to that agreement GBS granted the Company the exclusive right
to distribute and sell cash processing equipment in all areas of the world not
covered by the January 1997, agreement between GBS and the Company (the
"Territory"), except to certain financial institutions in Austria, provided that
the Company purchases a minimum

                                       6
<PAGE>

number of cash processing machines from GBS over a specified period during the
initial three-year term of the April 1997, agreement.

     As previously disclosed, in March 1999, the Company entered into a letter
of intent to acquire 51% of the capital stock of the GBS (the "Acquisition").
The parties are currently completing their due diligence and financial
statements while continuing to negotiate the terms of a definitive purchase
agreement, as well as side agreements such as the terms of the employment
agreements for key employees.

     The Company and GBS have recently been in a dispute regarding the 1998
Distribution Agreement. The dispute involves primarily the quantity of machines
to be produced by GBS for the European market. The dispute does not affect the
Company's North American rights pursuant to the January 1997, Licensing
Agreement. Additionally the Company and GBS are in dispute over certain matters
related to the license and manufacturing agreement. Although the Company
believes that these matters will be resolved amicably, there can be no assurance
that the dispute can be resolved. The proposed acquisition of GBS may not occur
or may be delayed until resolution of these disputes is accomplished.

     As previously disclosed, in June, 1997, Coinstar Inc. ("Coinstar"), a
competitor of the Company, filed a complaint against CAS, a subsidiary of the
Company, in the U.S. District Court for the Northern District of California
alleging infringement of U.S. Patent No. 5,564,546 ("the 546 patent"). In June
1997, CAS filed an answer denying the claims of Coinstar and interposed a
counterclaim seeking declaratory judgment as to the invalidity and
unenforceability of Coinstar's patent and instituted a third-party complaint
against ScanCoin AB for breach of warranty.

     As previously disclosed, in January 1998, the district court granted CAS's
motion for summary judgment of noninfringement of the CBIII CoinBank models
having a solid input tray. The Court granted in part and denied in part CAS's
motion for summary judgment of noninfringement concerning the earlier CBII
model. The Court also denied CoinStar's motion for summary judgment. In October
1998 Coinstar amended its complaint to allege infringement by CAS of newly
issued U.S. Patent No. 5,799,767 ("the 767 patent"). CAS has filed a motion for
summary judgment of invalidity and non-infringement of the 767 patent.

     On October 1, 1999, the Company and Coinstar agreed to settle all
outstanding litigation between them. Under the terms of the settlement, the
Company received payment of $600,000 and 30,000 shares of common stock of
Coinstar Inc. The Company granted Coinstar a non-exclusive license to certain
technology related to bulk coin processing and certain other rights. The parties
agreed to dismiss all claims in the suit with prejudice.

     As previously disclosed, in December 1997, Vindex USA, Inc. filed a
complaint against CAS, a subsidiary of the Company, in the Superior Court of
California, Los Angeles County, seeking to recover $40,000, an unspecified
amount of commissions and interest accrued thereon allegedly due it under the
terms of a consulting agreement it alleges was breached by the Company. The
Company believes that the complaint is without merit and is defending this
lawsuit.


NOTE 3: STOCKHOLDERS EQUITY

          In order to raise funds for working capital and development of E-
Commerce Message Management Architecture (EMMA), on July 27, 1999, the Company
commenced a private offering pursuant to Section 4(2) of the Securities Act of
1933 and Regulation D. The Company is seeking to raise approximately $5,000,000
in gross proceeds. The Company has not engaged any broker dealer as placement
agent and the Company's officers and directors are directing the selling
efforts. In the event

                                       7
<PAGE>

that the Company is assisted by selling agents it intends to pay commissions of
10% to those eligible to receive them. The Company is offering up to 52,500
units, each unit comprised of (I) 10 shares of Series A 8% Cumulative
Convertible Redeemable Preferred Stock and (II) 5 Series A Common Stock Purchase
Warrants. Each share of the Series A Preferred Stock is convertible into one
share of Common Stock. The Series A Warrants are exercisable at $12.00 per
share. The securities in the private offering are being sold in reliance upon
the availability of an exemption from the registration provisions of the
Securities Act of 1933 by virtue of the Company's intended compliance with the
provisions of sections 4(2), 4(6) thereof and rule 506 adopted by the Securities
and Exchange Commission thereunder. The securities have neither been registered
with, nor approved or disapproved by, the SEC or by the securities regulatory
authority of any state, and neither the SEC nor any such state authority has
passed upon or endorsed the merits of the offering, and it is not intended that
any of them will. The securities may not be transferred or resold except
pursuant to registration under the Securities Act of 1933 or an exemption
therefrom. There are no assurances that the foregoing transaction will be
completed.

     As of September 30, 1999 the Company has received gross proceeds from this
offering of approximately $725,000. The Company has issued or will issue (I)
76,125 shares of Series A 8% Cumulative Convertible Redeemable Preferred Stock
and (II) 32,809 Series A Common Stock Purchase Warrants (at $12.00 each).

     The Company recorded Deemed Dividends of $80,569 for both the Preferred
Stock and Common Stock Purchase Warrants issued for the period.  This amount was
based on (1) the difference between the closing market price and the offering
price of the Preferred Stock plus (ii) the value of the Warrants associated with
the Preferred Stock, value using the Black Scholes model.

      The Company issued one hundred thousand (100,000) Stock Purchase Warrants
to Starr Securities at $10.375 each for services related to assisting the
Company with future capital transactions.  These options have been valued at
$190,856 using the Black Scholes model and are recorded as deferred offering
costs.

NOTE 4:  GOING CONCERN

         The Company has prepared the financial statements included herewith
assuming that the Company will continue as a going concern. Although the Company
raised additional capital in 1998 and in 1999, it has not generated sufficient
revenue-producing activity to sustain its operations. Accordingly, the Company
must realize a satisfactory level of profitability from its current and future
operation in order to remain a viable entity. The Company's auditors have
included an explanatory paragraph in their report for the year ended May 31,1999
indicating there is substantial doubt regarding the Company's ability to
continue as a going concern. The accompanying consolidated financial statements
do no include any adjustments that might result from the outcome of any
uncertainty.

                                       8
<PAGE>

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

SAFE HARBOR STATEMENT

In addition to historical information, the information included in this Form 10-
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 "believe", "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: market acceptance of the Company's products, limited marketing
experience, uncertainty of product development, dependence upon new technology,
need for qualified management personnel and competition. The success of the
Company also depends upon economic trends generally, governmental regulation,
legislation, and population changes. Readers are cautioned not to place undue
reliance on forward-looking statements, which reflect management's analysis
only. The Company assumes no obligation to update forward-looking statements.
See also the Company's reports filed from time to time with the Securities and
Exchange Commission pursuant to the Securities Act or the Exchange Act.


DESCRIPTION OF BUSINESS

     Cash Technologies, Inc., a Delaware Corporation, was incorporated in
August, 1995, however its coin processing operations were commenced by its now
wholly-owned subsidiary, National Cash Processors, Inc. ("NCP"), a Delaware
corporation which was incorporated in May, 1994. NCP became a subsidiary of the
Company in January 1996. The U.S. CoinBank operations are conducted through the
Company's wholly-owned subsidiary, CoinBank Automated Systems, Inc.("CAS"), a
Delaware corporation, incorporated in November 1995. The European CoinBank
operations are conducted through the Company's wholly-owned subsidiary CoinBank
Automation Handels GmbH, incorporated in Austria in February 1998. Unless the
context otherwise requires, references herein to the Company refer to Cash
Technologies, Inc. and its wholly-owned subsidiaries.

     The Company currently generates revenues through the purchase of loose
United States coin and currency which is acquired in bulk at a small discount
from face value and then counted, sorted, wrapped and re-sold primarily to a
variety of retail businesses at face value plus a small fee or deposited to the
Federal Reserve Bank for credit to the Company's account. The Company also
generates revenues from CoinBank machine sales and the fees from the operation
of "free placement" self-service CoinBank Machines. The Company's expenses have
exceeded net revenues since inception. For the fiscal year ended May 31, 1997,
1998, and 1999, the Company sustained net losses of $1,547,805, $2,727,145 and
$5,711,964, respectively. The Company also incurred a net loss of $1,540,501 for
the quarter ended August 31, 1999.

                                       9
<PAGE>

     The Company is primarily focused on the development of its E-Commerce
Message Management Architecture (EMMA(TM)) transaction processing software and
its ATM-X(TM) enhanced ATM. This e-commerce system will provide transaction
processing for Internet and non-Internet based transactions such as electronic
bill payment, check cashing, the issuance of money orders, the issuance of pre-
paid phone cards and the dispensing of event tickets on automated teller
machines (ATMs), CoinBank machines and other similar devices. In addition to
this added functionality, an increased level of security will be added to
commercial Internet activities generated from personal computers.

     The Company has also begun to market CoinBank machines for sale to retail
stores and is exploring distribution relationships with existing equipment
distribution leaders for the sale of the machines.

     Because of its e-commerce systems development effort and CoinBank marketing
efforts, the Company will continue to be required to make certain up-front
expenditures. The Company anticipates that losses will continue for the
foreseeable future

     The Company records as revenue the service fee charged for coin and
currency processed on behalf of a customer. The Company also records as revenue
the service fee charged to persons using CoinBank machines and revenues from the
sale of CoinBank machines. Gross revenues include the value of coin and currency
processed and do not represent revenue under generally accepted accounting
principles.

     As previously stated the Company intends to concentrate its future efforts
on marketing CoinBank machines for sale rather than "free placement". Revenues
from CoinBank machine sales have the potential to produce greater short-term
profits than revenues generated by "free placement". Revenues generated from the
sale of CoinBank machines were approximately 22% of net revenues compared to fee
income from "free placement" which accounted for approximately 15% of net
revenues, for the three months ended August 31, 1999. The Company anticipates
that the revenues generated from the sale of CoinBank machines will continue to
be an increasing source of future revenues, while transaction and licensing fees
derived from the EMMA transaction processing system will eventually become the
largest source of the Company's future revenues.

     The Company was awarded a contract to count, process and purchase currency
for the Los Angeles County Metropolitan Transportation Authority ("LACMTA") for
a fee of approximately 1% of all currency processed commencing on April 1, 1997,
and with subsequent renewals, ending on March 31, 2000. The Company expects to
purchase and process between $35 and $40 million dollars of currency on this
contract during fiscal 2000. The Company records as revenue the service fee
charged for the processing of currency. From time to time, the Company may
submit bids for additional similar contracts. There can be no assurance,
however, that it will be awarded any contract for which it submits a bid.


RESULTS OF OPERATIONS

THREE MONTHS ENDED AUGUST 31, 1999 COMPARED TO THREE MONTHS ENDED AUGUST 31,
1998

     Gross revenues include the value of the coins and currency processed as
well as CoinBank machine sales for the three months ended August 31, 1999, which
amounted to $10,818,265 compared to $13,878,754 for the comparable 1998 period.
The decrease in gross revenue was primarily attributable to the Company's
planned reduction of certain low margin commercial coin processing customers
during the second quarter of fiscal 1999 (September-November 1998). As a result
of the elimination of these commercial coin processing customers and the sale of
CoinBank machines, net revenues, for the 1999

                                       10
<PAGE>

period, increased to $295,853, or 2.7% of gross revenues, compared to $249,431,
or 1.8% of gross revenues for 1998 period.

     Cost of revenues for the three months ended August 31, 1999, was $326,066
compared to $166,572 during the comparable 1998 period. The increase in direct
costs was primarily the result of the reclassification of direct labor,
telephone and depreciation expenses into the Cost of Revenues from Selling,
General and Administrative Expenses; increased servicing costs associated with
the operation of CoinBank Automated Systems and the cost of CoinBank machines
sold during the period.

     Gross profit (loss) for the three months ended August 31, 1999, was
$(30,213) compared to $82,859 for the three months ended August 31, 1998. Gross
profit was negatively impacted by the reclassification of SG&A expenses and
increased cost of CoinBank operations referred to in Cost of Revenues. This
decrease was partially offset by a positive contribution from CoinBank machine
sales as well as reductions in direct labor and supply costs associated with the
elimination of low margin commercial coin processing customers referred to in
Gross Revenues.

     Selling, General and Administrative expenses for the three months ended
August 31, 1999, increased to $1,389,709 compared to $950,795 for the three
months ended August 31, 1998. These expenses consist primarily of wages (and
wage related costs), outside contractor expenses, travel/promotional expenses,
professional services and facilities/office related expenses. The increase in
selling, general and administrative expenses during the period were primarily
attributable to approximately $250,000 increased systems development costs
associated with development of the EMMA transaction processing system and
increased spending for professional services and indirect labor.

     Depreciation and amortization expenses for the three months ended August
31, 1999, and 1998, were $17,671 and $56,85. The decrease in depreciation was
the result of reclassifying depreciation into Cost of Revenues. Interest expense
for the three months ended August 31, 1999, and 1998, were $100,294 and
$195,140. The decrease in interest expense was due to reduced debt early in
fiscal 1999.

     As a result of the foregoing, net losses for the three months ended August
31, 1999, and 1998, were $1,540,501 and $1,120,25.


THREE MONTHS ENDED AUGUST 31, 1998 COMPARED TO THREE MONTHS ENDED AUGUST 31,
1997

     The gross revenues include the value of the coins and currency processed
for the three months ended August 31, 1998, amounted to $13,878,754, compared to
$14,550,545, for the comparable 1997 period. The decrease in coin and currency
processed was primarily attributable to the Company's reduction in low profit
transactions for certain vending companies and normal periodic fluctuations in
the value of currency processed for the LACMTA during the three month period. As
a result of the foregoing, net revenues for the three months ended August 31,
1998, decreased to $249,431 compared to $251,785, for the comparable 1997
period.

     Cost of revenues for the three months ended August 31, 1998, was $166,572,
compared to $185,223, in the comparable 1997 period, reflecting primarily an
increase in margins on currency processing

     Gross profit for the three months ended August 31, 1998, was $ 82,859
compared to the gross profit of $66,562 in the comparable 1996 period. The
increase in gross profit was due to increases in profit margin on currency
processing.

                                       11
<PAGE>

     Selling, general and administrative expenses for the three months ended
August 31, 1998, increased to $950,795, compared to expenses of $442,668, for
the three months ended August 31, 1997. Such expenses consisted of facility
costs, salaries of executive officers and administrative personnel and other
administrative expenses. The increase in selling, general and administrative
expenses is attributable to the increase in administrative, marketing, personnel
and promotion as the Company expanded its operations and customer base.

     Depreciation and amortization expenses for the three months ended August
31, 1998, and 1997, were $56,852 and $67,163. Interest expense, net, for the
three months ended August 31, 1998, and 1997, were $195,140 and $103,044,
respectively. The increase in interest expense was due to a higher level of
outstanding indebtedness associated with equipment acquired during the 1998
period.

     As a result of the foregoing, net losses for the three months ended August
31, 1998, and 1997, were $1,120,256 and $546,312, respectively.

                                       12
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

     The Company's capital requirements have been and will continue to be
significant and its cash requirements have been exceeding its cash flow from
operations. At August 31, 1999, the Company had a working capital deficit of
$1,887,885 and unrestricted cash and cash equivalents of $258,739 compared to
working capital of $5,248,148 and unrestricted cash and cash equivalents of
$6,876,633 at August 31, 1998. Since inception, the Company has satisfied its
working capital requirements through limited cash flow generated from
operations, the issuance of equity and debt securities, borrowing under a line
of credit, and loans from stockholders and an affiliate of a previous executive
officer of the Company.

     Net cash used in operating activities was $684,610 for the quarter ended
August 31, 1999, as compared to net cash used in operating activities of
$937,253 for the quarter ended August 31, 1998. The decrease in net cash used in
operating activities during the 1999 period was primarily the result of
increases in: accounts receivable $97,693, accounts payable $517,500 and accrued
expenses and other current Liabilities $172,172.

     Net cash provided by investing activities was $44,610 for the quarter ended
August 31, 1999, as compared to net cash used by investing activities of
$111,673 for the quarter ended August 31, 1998. The increase in net cash
provided in investing activities was attributable to no additional purchases of
equipment and release of restricted cash.

     Net cash used in financing activities for the quarter ended August 31,
1999, was $129,846, as compared to net cash provided by financing activities of
$7,714,737 for the quarter ended August 31, 1998. The $129,846 was primarily a
result of financing cost and debt repayment offset by proceeds from the private
offering outlined below. The increase in net cash provided by financing
activities for the 1998 period was primarily attributable to the Company's
Initial Public Offering plus the exercise of the over allotment option, which
netted approximately $9.5 million.

     In order to raise funds for working capital and development of EMMA, on
July 27, 1999, the Company commenced a private offering pursuant to Section 4(2)
of the Securities Act of 1933 and Regulation D. The Company is seeking to raise
approximately $5,000,000 in gross proceeds. The Company has not engaged a broker
dealer as placement agent and the Company's officers and directors are directing
the selling efforts. In the event that the Company is assisted by selling agents
it intends to pay commissions of 10% to those eligible to receive them. The
Company is offering up to 52,500 units, each unit comprised of (I) 10 shares of
Series A 8% Cumulative Convertible Redeemable Preferred Stock and (II) 5 Series
A Common Stock Purchase Warrants. Each share of the Series A Preferred Stock is
convertible into one share of Common Stock. The Series A Warrants are
exercisable at $12.00 per share. The securities in the private offering are
being sold in reliance upon the availability of an exemption from the
registration provisions of the Securities Act of 1933 by virtue of the Company's
intended compliance with the provisions of sections 4(2), 4(6) thereof and rule
506 adopted by the Securities and Exchange Commission thereunder. The securities
have neither been registered with, nor approved or disapproved by, the SEC or by
the securities regulatory authority of any state, and neither the SEC nor any
such state authority has passed upon or endorsed the merits of the offering, and
it is not intended that any of them will. The securities may not be transferred
or resold except pursuant to registration under the Securities Act or an
exemption therefrom. There are no assurances that the foregoing transaction will
be completed.

     Based on the Company's current proposed plans and assumptions, the Company
anticipates that the net proceeds of its private offering, if successful, will
be sufficient to satisfy its contemplated cash requirements for approximately 6
months. In the event that the Company's plans change or its assumptions prove to
be inaccurate (due to unanticipated expenses, increased competition, unfavorable
general economic conditions, decreased demand for its services or otherwise),
the Company could be

                                       13
<PAGE>

required to seek additional financing sooner than currently anticipated. The
Company has no current arrangements with respect to, or potential sources of
additional financing. Consequently, there can be no assurance that an additional
financing will become available to the Company when needed, on commercially
reasonable terms, or at all.

     As of September 30, 1999, the Company has received gross proceeds from this
offering of approximately $725,000. The Company has issued or will issue (I)
76,125 shares of Series A 8% Cumulative Convertible Redeemable Preferred Stock
and (II) 32,809 Series A Common Stock Purchased Warrants (at $12.00 each).

     On October 1, 1999, the Company and Coinstar agreed to settle all
outstanding litigation between them. Under the terms of the settlement, the
Company received payment of $600,000 and 30,000 shares of common stock of
Coinstar Inc. The Company granted Coinstar a non-exclusive license to certain
technology related to bulk coin processing and certain other rights. The parties
agreed to dismiss all claims in the suit with prejudice.

     As previously disclosed the Company continues to be engaged in discussions
with two entities regarding an acquisition of all or part of the Company
(including stock and assets transfers). The Board of Directors has not been
requested to consider any definitive transaction. No letters of intent have been
entered into by the Company. There can be no assurance that any such
transactions will be consummated, or that the terms will be favorable to the
Company or its shareholders.

     The Company continues to suffer recurring losses from operations as of
August 31, 1999, and has not generated sufficient revenue producing activity to
sustain its operations. The Company's independent certified public accountants
have included a modification to their opinion, which indicated there is
substantial doubt about the Company's ability to continue as a going concern.
The Company is attempting to raise additional capital to meet future working
capital requirement and launch new products, but may not be able to do so.
Should the Company not be able to raise additional capital, it may have to
curtail operations.

                                       14
<PAGE>

     YEAR 2000 EFFECT

     The Company, like most other companies, is faced with the "Year 2000
Issue". The Year 2000 issue has developed because some computer programs were
written using a two-digit field rather than a four-digit field to define the
applicable year. As a result, any computer program that affects the Company's
activities may recognize a date using "00" as the year 1900 rather than the year
2000. This could result in a variety of problems depending upon the system(s)
affected. Potential problems include temporary inability to process
transactions, transfer funds, or engage in similar business activities. The
potential problems associated with the Year 2000 Issue may cause widespread
disruption of business worldwide because of the interdependence on computer and
communication systems.

     The Company has completed an initial assessment of potential Year 2000 for
its own computer systems and business processes. Based upon this assessment, the
Company believes its computer software, hardware and its embedded technologies
will present limited Year 2000 Issues. Additionally, the Company does not expect
that its CoinBank machines will incur any material problems with the Year 2000
change. The Company has not been able to completely evaluate whether the
software, hardware and embedded technologies used by the third parties, with
whom it conducts business, are Year 2000 compliant. If third parties,
particularly those involved in the regulation and administration of the banking
systems fail to address such, the Company may experience business interruptions,
and in a worst case scenario, the inability to engage in the normal course of
business. The effect of such related difficulties could have a materially
adverse impact on the financial condition of the Company. The Company does not
believe that any material expenditure will be required to complete its internal
assessment regarding this issue.

     The Company does recognize the need for Year 2000 contingency plans because
of the uncertainty associated with this global issue. The Company will replace
any personal computer or network related software or hardware if this issue
impacts them. The cost of such replacements is not expected to have a material
impact. Furthermore the Company believes that it will not be able to require the
third parties or governmental agencies with which it conducts business to
resolve all Year 2000 issues. The Company has not developed comprehensive
contingency plans that will assure that it will not be adversely impacted by
such, and the Company does not intend to prepare such plans.

                                       15
<PAGE>

PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

     As previously disclosed, in June 1997, Coinstar, Inc. ("Coinstar"), a
competitor of the Company, filed a complaint against the Company's subsidiary,
CAS, in the U.S. District Court for the Northern District of California
alleging infringement of U.S. Patent No. 5,564,546. In June 1997, CAS filed an
answer denying the claims of Coinstar and interposed a counterclaim seeking
declaratory judgment as to the invalidity and un-enforceability of Coinstar's
patent and instituted a third-party complaint against ScanCoin AB for breach of
warranty.

     As previously disclosed, in January 1998, the district court granted CAS's
motion for summary judgment of noninfringement of the CBIII CoinBank models
having a solid input tray. The Court granted in part and denied in part CAS's
motion for summary judgment of noninfringement concerning the earlier CBII
model. The Court also [Adenied CoinStar's motion for summary judgment. In
October 1998, Coinstar amended its complaint to allege infringement by CAS of
newly issued U.S. Patent No. 5,799,767 ("the 767 patent"). CAS then filed a
motion for summary judgment of invalidity and non-infringement of the 767
patent.

     On October 1, 1999, the Company and Coinstar agreed to settle all
outstanding litigation between them. Under the terms of the settlement, the
Company received payment of $600,000 and 30,000 shares of common stock of
Coinstar Inc. The Company granted Coinstar a non-exclusive license to certain
technology related to bulk coin processing and certain other rights. The parties
agreed to dismiss all claims in the suit with prejudice.

     In December 1997, Vindex USA, Inc. filed a complaint against CAS, a
subsidiary of the Company, in the Superior Court of California, Los Angeles
County seeking to recover $40,000, an unspecified amount of commissions and
interest accrued thereon allegedly due it under the terms of a consulting
agreement it alleges was breached by the Company. The Company believes that the
complaint is without merit and is defending this lawsuit.


ITEM 2.  CHANGE IN SECURITIES

     In order to raise funds for working capital and development of EMMA, on
July 27, 1999, the Company commenced a private offering pursuant to Section 4(2)
of the Securities Act of 1933 and Regulation D. The Company is seeking to raise
approximately $5,000,000 in gross proceeds. The Company has not engaged a broker
dealer as placement agent and the Company's officers and directors are directing
the selling efforts. In the event that the Company is assisted by selling agents
it intends to pay commissions of 10% to those eligible to receive them. The
Company is offering up to 52,500 units, each unit comprised of (I) 10 shares of
Series A 8% Cumulative Convertible Redeemable Preferred Stock and (II) 5 Series
A Common Stock Purchase Warrants. Each share of the Series A Preferred Stock is
convertible into one share of Common Stock. The Series A Warrants are
exercisable at $12.00 per share. The securities in the private offering are
being sold in reliance upon the availability of an exemption from

                                       16
<PAGE>

the registration provisions of the Securities Act of 1933 by virtue of the
Company's intended compliance with the provisions of sections 4(2), 4(6) thereof
and rule 506 adopted by the Securities and Exchange Commission thereunder. The
securities have neither been registered with, nor approved or disapproved by,
the SEC or by the securities regulatory authority of any state, and neither the
SEC nor any such state authority has passed upon or endorsed the merits of the
offering, and it is not intended that any of them will. The securities may not
be transferred or resold except pursuant to registration under the Securities
Act or an exemption therefrom. There are no assurances that the foregoing
transaction will be completed. As of September 30, 1999, the Company has
received gross proceeds from this offering of approximately $725,000. The
Company has issued or will issue (I) 76,125 shares of Series A 8% Cumulative
Convertible Redeemable Preferred Stock and (II) 32,809 Series A Common Stock
Purchased Warrants (at $12.00 each).

ITEM 3.  DEFAULT UPON SENIOR SECURITIES

Not Applicable


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

Not Applicable


ITEM 5.  OTHER INFORMATION
Not Applicable


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits

Exhibit No.              Description
-----------              -----------

3.1 (a)                  Certificate of Designation for Series A 8% Cumulative
                         Convertible Preferred Stock.

4.3                      Form of Series A Redeemable Warrants

27                       Article 5 of Regulation S-X

(b)  Reports on Form 8-K

None

                                       17
<PAGE>

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 10QSB for the
fiscal quarter ended August 31, 1999, to be signed on its behalf by the
undersigned, thereunto duly authorized the 15th day of October 1999.


CASH TECHNOLOGIES, INC.


By: /S/ Bruce Korman
----------------------------------------
Bruce Korman
President and Chief Executive Officer


By: /S/ Robert M. Gielow
----------------------------------------
Robert M. Gielow
Chief Financial Officer

                                       18
<PAGE>

                            CASH TECHNOLOGIES, INC.

                                 EXHIBIT INDEX



Exhibit No.           Description
-----------           -----------
3.1 (a)               Certificate of Designation for Series A 8% Cumulative
                      Convertible Preferred Stock.

4.3                   Form of Series A Redeemable Warrants


27                    Article 5 of Regulation S-X