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CORRESP
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filename1.htm

March 11,
2005

Via Fax
and EDGAR

Securities
and Exchange Commission

Division
of Corporate Finance

Office of
Small Business Review

450 Fifth
Street, N.W.

Washington,
D.C. 20549

Attn: Ms.
Yolanda Crittendon

Re:
Cash
Technologies, Inc. File 000-24569

Dear Ms.
Crittendon:

By letter
dated February 15, 2005, the staff of the Securities and Exchange Commission
(the “Staff”) provided Cash Technologies, Inc., with comments to the Cash
Technologies Annual Report on Form 10-KSB for the year ended May 31, 2004 and
the Quarterly Reports on Form 10-QSB for the periods ended August 31, 2004 and
November 30, 2004. This letter contains responses to the Staff’s comments. For
convenience, we have repeated the Staff’s comments immediately above our
responses, and the numbers of the responses, correspond to the numbered comments
in the letter from the Staff.

We have
reviewed and considered each of the Staff’s comments and have provided the Staff
with an explanation for each comment. Other than as explained below or as
hereafter requested by the Staff, we do not believe that any additional
revisions to the referenced Form 10-KSB or the Form 10-QSB need to be
made.

As
requested by the Staff, we hereby acknowledge that:

    ·

      the
      company is responsible for the adequacy and accuracy of the disclosure in
      the filing;

    ·

      staff
      comments or changes to disclosure in response to staff comments do not
      foreclose the Commission from taking any action with respect to the
      filing; and

    ·

      the
      company may not assert staff comments as a defense in any proceeding
      initiated by the Commission or any person under the federal securities
      laws of the United States.

 Comment
#1 -
Explain to us how you considered paragraph 8 of Chapter 4 of ARB 43 in reporting
this loss in operating loss rather than a charge to revenues.

Securities
and Exchange Commission
March 11, 2005
Page 2 of 7

Reply
#1 - The
CoinBank machines held for sale are not classified as inventory (current assets)
but assets held for sale (noncurrent assets) because of the low turnover.
CoinBank revenue is immaterial compared to the impairment of CoinBank machines
charge. The impairment of CoinBank machines is classified as a period cost
because there is insufficient CoinBank revenue. Otherwise, the combined product
cost of capitalized software cost and cost of CoinBank machines sold will
actually result in a negative gross profit. We considered paragraph 8 of Chapter
4 of ARB 43 but we believe reporting the impairment charge of assets held for
sale is more meaningful than negative gross profit, i.e., the reader of the
statement of operations can immediately understand the meaning of the impairment
charge on the face of the statement of operations.

Comment
#2 -
Explain to us how you determined that including the amortization of capitalized
software in operating loss rather than cost of revenues is appropriate and refer
us to the accounting literature that you relied upon in your determination. Tell
us how you considered Question 17 of FASB Staff Implementation Guide, SFAS 86 in
your accounting for such costs.

Reply
#2 -
Software revenue to date has been immaterial (as noted in your comment #4)
compared to the amortization of capitalized software cost and the only other
source of revenue is from the sale of CoinBank machines. The amortization of
capitalized software is classified as a period cost until there is sufficient
software revenue. Otherwise, the combined product cost of capitalized software
cost and cost of CoinBank machines sold will actually result in a negative gross
profit. We considered Question 17 of the SFAS 86 Implementation Guide but we
believe that presenting amortization of capitalized software is more meaningful
than negative gross profit.

Comment
#3 -
Explain to us how you considered paragraph 8 of SFAS 86 which prescribes that
the amortization of software development costs should be computed using the
greater of the straight line or the ratio of gross revenues to expected total
revenues, and consider revising your disclosure accordingly.

Reply
#3 -
Software revenue to date has been immaterial (as noted in your comment #4)
compared to the amortization of software development cost. The amortization of
software development cost is greater than the ratio of software gross revenue to
expected software total revenue.

Comment
#4 - Given
that to date revenues derived from EMMA have been minimal and you have not
entertained any definitive agreement with potential customers, explain to us how
you considered these factors in concluding that the capitalized software
development costs are not impaired.

Reply
#4
- We do
not believe that the capitalized software development costs are impaired because
we have entertained and currently are in discussions regarding a number of
material opportunities for the use of EMMA. EMMA is a key component of products
being marketed by our recently formed Heuristic Technologies, Inc. subsidiary,
which products we believe can generate significant amounts of revenues and
profits. Indeed EMMA is one of the primary reasons motivating the former owners
of the Heuristic assets, (acquired by us in 2004) to enter into the transaction
with Cash Technologies. In addition, we are negotiating two other opportunities
unrelated to Heuristic for the deployment of EMMA which also have the potential
for significant profits. Revenues from the foregoing pending and contemplated
transactions are expected to be material and should begin mid-year.

Securities
and Exchange Commission
March 11, 2005
Page 3 of 7

Comment
#5 - We
note that the conversion of debt into equity securities, including notes payable
to stockholders, involved the reduction of the original conversion price and
exercise price of the warrants. Explain to us how you accounted for these
transactions and how you considered SFAS 84.

Reply
#5 - The
Company considered SFAS 84 Paragraph 3 and 4 which state that when convertible
debt is converted using a “sweetner” then an expense shall be recognized and the
conversion date shall be used as the date of record. The Company evaluated these
transactions and the repricing and then recalculated the value of the
transaction using Black-Scholes. An expense was recognized which was equal to
the fair value of the repriced securities minus the current fair value of the
original securities.

Comment
#6 -
Explain to us what “Income From Forgiveness of Debt” relates to, including but
not limited to, your relationship with the creditor and refer us to the
accounting literature that supports your treatment of this transaction.

Reply
#6 - The
$483,513 of indebtedness that was forgiven consisted of obligations owed by this
company to various creditors including two entities with which the Company was
involved in litigation in the past. During the six month period ended November
30, 2004, those debts were extinguished as a result of negotiations with
creditors as well as settlement of two lawsuits. Income
from forgiveness of debt, therefore, relates to writing off of the foregoing
liabilities after settlements with the various creditors were reached. The
Company does not have any direct relationship with these creditors. Since all
debt extinguishments are fundamentally alike and produce the same result, the
debtor is relieved of its obligations. Accounting for debt extinguishment is the
same regardless of the manner in which the extinguishment is achieved. An
extinguishment is accounted for by recognizing a gain or loss in the period the
extinguishment occurs.

Comment
#7 - With
respect to your acquisition of Tomco Auto Products, Inc. tell us how you
considered Instruction 2(iv) to Item 310(b) of Regulation S-B or revise the note
accordingly.

Reply
#7 -In
connection with the completion of the Tomco Auto Products acquisition, we filed
a Current Report on Form 8-K describing the acquisition and noting that the
required pro forma and other financial statements related to that acquisition
would be filed in January 2005 in another Form 8-K. However, we were unaware
that Instruction 2(iv) to Item 310(b) of Regulation S-B required us to provide
the pro forma data referenced by that Instruction for quarterly reports that are
filed before the Form 8-K financial statements and pro forma data become
available or are filed. If the referenced Instruction required us to include pro
forma data in the Form 10-QSB for the period ending November 30, 2004, if
requested by the Staff, we will revise the footnote in an amended Form 10-QSB.
(Unfortunately, even if we had been aware of the requirement to file pro forma
data in the November 30, 2004 10-QSB, we could not have done so since the
interim period information of the seller was not yet available. The required pro
forma and other financial statements are being finalized as of the date of this
letter.) We will comply with Instruction 2(iv) to Item 310(b) of Regulation S-B
in connection with future Forms 10-QSB, including the Form 10-QSB required to be
filed on April 14, 2005.

Securities
and Exchange Commission
March 11, 2005
Page 4 of 7

Comment
#8 - Tell
us how you considered Item 310 (c) and (d) of Regulation S-B as it relates to
providing historical financial statements and pro forma financial information
for the business acquired or provide information accordingly. We may have
further comment upon review of this information.

Reply
#8 - As
mentioned in response to Comment 7 above, we are aware that the historical
financial statements and pro forma financial information for Tomco Auto Products
(the business acquired) must be filed. Please see the Form 8-K filed on November
12, 2004. The audited financial statements of the selling entity to be filed in
the amended Form 8-K will consist of the selling entity’s most recent balance
sheet as of September 30, 2004 and statements of operations and cash flows for
the two years then ended.  The selling entity’s pro forma information will
be presented with the Company’s most recent current and prior interim periods
ended August 31, 2004. We expect to file the amended Form 8-K by the end of next
week and we are attaching a draft of the pro-forma financial statements that
will be presented in the amended Form 8-K.

Comment
#9 -
Explain to us how you applied SFAS 141 to this acquisition including, but not
limited to, the following:

    ·

      The
      extraordinary gain recognized.

    ·

      The
      fair value assigned to the assets and
liabilities.

    ·

      The
      identification of all assets acquired and liabilities assumed, including
      intangible assets that meet the criteria in paragraph
  19.

Reply
#9 - Under
SFAS 141, the acquiring entity (TAP Holdings LLC, a majority owned subsidiary of
Cash Technologies, Inc.) allocated the cost of the acquired entity (Tomco
Automotive Products) to assets acquired and liabilities assumed based on their
estimated fair values at date of acquisition (November 5, 2004). Prior to that
allocation, the acquiring entity (a) reviewed the purchase
consideration and (b)
identified all of the assets acquired and liabilities assumed, including
intangible assets that meet the recognition criteria regardless of whether or
not they had been recorded in the financial statements of the acquired entity.
The acquiring entity did not record any intangible assets.

Securities
and Exchange Commission
March 11, 2005
Page 5 of 7

The
extraordinary gain is attributable to the excess of fair value of the assets
acquired over the purchase price. The calculation of the excess of fair value
over the purchase price is provided in the last paragraph of this
Reply.

The
acquiring entity used the following guidance for assigning amounts to assets
acquired and liabilities assumed:

    a.

      Receivables
      at present values of amounts to be received determined at appropriate
      current interest rates, less allowances for uncollectibility and
      collection costs, if necessary.

    b.

      Inventories
      - consisting of finished goods, works in process and raw
      materials.

    1.

      Finished
      goods and merchandise, consisting of finished carburetors (Tomco’s primary
      product) were
      valued at their
      estimated selling prices less the sum of (a) costs of disposal and (b)
      reasonable profit allowance for the selling effort of the acquiring
      entity. The cost of disposal and profit allowance was based on the
      historical costs incurred by Tomco Auto Products.

    2.

      Work
      in process at estimated selling prices of finished goods less the sum of
      (a) costs to complete, (b) costs of disposal, and (c) reasonable profit
      allowance for the completing and selling effort of the acquiring entity
      based on profit for similar finished goods.

    3.

      Raw
      materials at current replacement costs.

As
mentioned above the cost of disposal and profit allowance was based on the
historical costs incurred by Tomco Auto Products. Since the date of the
acquisition, TAP Holdings, LLC., a majority owned subsidiary of the Company, has
recorded revenues of an estimated $3.5 million with an approximate 28 percent
profit margin.

    c.

      Plant
      and equipment at the lower book value of $328,885 instead of current
      replacement cost due to the age of the equipment and uncertainties due to
      planned plant relocation. In accordance with SFAS 141 property &
      equipment was reduced to zero thus reducing the extraordinary gain to
      $5,999,951.

    d.

      Liabilities
      assumed for accounts payable and other claims payable at recorded amounts
      which approximate the present values of amount to be paid determined at
      appropriate current interest rates.

    e.

      Liabilities
      assumed for notes payable and long term debt, at present values of amounts
      to be paid determined at appropriate current interest
  rates

    f.

      The
      parties agreed to make adjustments to the purchase price, post-closing,
      under certain circumstances. This amount can be reasonably estimated. The
      Company expects a minimum of $250,000 reduction in the purchase price. The
      Company has not disclosed this due to it being a contingent gain.

A
substantial portion of the extraordinary gain is attributable to the excess of
fair value over the purchase price.

Securities
and Exchange Commission
March 11, 2005
Page 6 of 7

      Assets
      purchased & liabilities assumed

      Nov.
      5, 2004

      Assets

          Cash

      $

      116,565

          Accounts
      receivable

      $

      1,968,276

          Accounts
      receivable other

      $

      55,815

          Inventory

      $

      9,650,225

          Less:
      inventory reserve

      $

      (1,180,000

      )

          Prepaid
      expenses

      $

      372,367

          Other
      assets

      $

      18,230

      Total
      Assets

      $

      11,001,478

      Liabilities

          Accounts
      payable

      $

      1,568,358

          Warranty
      reserve

      $

      202,490

          Accrued
      expenses

      $

      730,679

      Total
      Liabilities

      $

      2,501,527

      Net
      Assets

      $

      8,499,951

      Purchase
      price

      $

      2,500,000

      Extraordinary
      gain

      $

      5,999,951

Comment
#10 -
Explain to us how you accounted for the acquisition of Heuristic Technologies,
LLC and the various agreements disclosed in the third paragraph on page 18, cite
the specific accounting literature that supports your treatment for these
transactions and consider expanding your disclosure in future filings. Also,
tell us how you considered Item 310(c) and (d) and Instruction (2)(iv) to Item
310(b) of Regulation S-B with respect to these transactions.

Reply
#10 -A