UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended March 31, 2013

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from ___________ to ___________

000-17874

(Commission file number)

 

GLOBAL AXCESS CORP

(Exact name of registrant as specified in its charter)

NEVADA	88-0199674
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No).
7800 BELFORT PARKWAY, SUITE 165
JACKSONVILLE, FLORIDA	32256
(Address of principal executive offices)	(Zip Code)

(904) 280-3950

(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 by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting Company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated Filer ¨	Accelerated Filer ¨
Non-accelerated Filer ¨	Smaller reporting company x

Indicate by check mark whether the registrant is a shell Company (as defined in Rule 12b-2 of Exchange Act). Yes ¨ No x

As of May 10, 2013, the registrant had 22,738,885 shares outstanding of its common stock, $0.001 par value.

TABLE OF CONTENTS		Page No.
PART  I	FINANCIAL INFORMATION
Item  1.	Financial Statements (unaudited)	4
Item  2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	28
Item  3.	Quantitative and Qualitative Disclosure About Market Risk	37
Item  4.	Controls and Procedures	37
PART  II	OTHER INFORMATION
Item  1.	Legal Proceedings	37
Item  1A.	Risk Factors	37
Item  2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item  3.	Defaults Upon Senior Securities	37
Item  4.	Mine Safety Disclosures	37
Item  5.	Other Information	38
Item  6.	Exhibits	38
SIGNATURES		39

2

Forward-Looking Statements

Unless the context indicates otherwise, all references in this document to “we,” “us”, “our” and the “Company” refer to Global Axcess Corp and its subsidiaries.

In addition to historical information, this Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations." You should carefully review the risks described in other documents we file from time to time with the Securities and Exchange Commission, including the Quarterly Reports on Form 10-Q that have been or are to be filed in 2013.

When used in this report, the words “outlook”, "expects," "anticipates," "intends," "plans," "believes," "seeks," "targets," "estimates," and similar expressions are generally intended to identify forward-looking statements. You should not place undue reliance on the forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this document.

Estimates of future financial results are inherently unreliable.

From time to time, representatives of the Company may make public predictions or forecasts regarding the Company's future results, including estimates regarding future revenues, expense levels, earnings or earnings from operations. Any forecast regarding the Company's future performance reflects various assumptions. These assumptions are subject to significant uncertainties and, as a matter of course, many of them will prove to be incorrect. Further, the achievement of any forecast depends on numerous factors (including those described in this discussion), many of which are beyond the Company's control. As a result, there can be no assurance that the Company's performance will be consistent with any management forecasts or that the variation from such forecasts will not be material and adverse. Investors are cautioned not to base their entire analysis of the Company's business and prospects upon isolated predictions, but instead are encouraged to utilize the entire available mix of historical and forward-looking information made available by the Company, and other information affecting the Company and its products, when evaluating the Company's prospective results of operations.

In addition, representatives of the Company may occasionally comment publicly on the perceived reasonableness of published reports by independent analysts regarding the Company's projected future performance. Such comments should not be interpreted as an endorsement or adoption of any given estimate or range of estimates or the assumptions and methodologies upon which such estimates are based. Undue reliance should not be placed on any comments regarding the conformity, or lack thereof, of any independent estimates with the Company's own present expectations regarding its future results of operations. The methodologies employed by the Company in arriving at its own internal projections and the approaches taken by independent analysts in making their estimates are likely different in many significant respects. Although the Company may presently perceive a given estimate to be reasonable, changes in the Company's business, market conditions or the general economic climate may have varying effects on the results obtained through the use of differing analyses and assumptions. The Company expressly disclaims any continuing responsibility to advise analysts or the public markets of its view regarding the current accuracy of the published estimates of outside analysts. Persons relying on such estimates should pursue their own independent investigation and analysis of their accuracy and the reasonableness of the assumptions on which they are based.

3

PART I - FINANCIAL INFORMATION

ITEM 1. Financial Statements (unaudited).

GLOBAL AXCESS CORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	(Unaudited)			(Audited)
	March 31, 2013			December 31, 2012
ASSETS
Current assets
Cash and cash equivalents	$	419,348		$	106,218
Accounts receivable, net of allowance of $62,814 in 2013 and $60,005 in 2012		954,408			770,248
Inventory, net of allowance for obsolescence of $182,572 in 2013 and 2012		707,090			1,160,475
Prepaid expenses and other current assets		47,585			99,931
Total current assets		2,128,431			2,136,872
Fixed assets, net		6,868,072			7,867,944
Other assets
Merchant contracts, net		-			10,207,610
Intangible assets, net		62,371			124,742
Other assets		110,469			110,469
Total assets	$	9,169,343		$	20,447,637
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities	$	5,036,927		$	4,803,079
Interest rate swap contract		432,557			554,577
Note payable - related party  - current portion, net		2,972			11,722
Notes payable - current portion		15,932			16,443
Senior lenders' notes payable - current portion, net		13,566,707			12,866,707
Capital lease obligations - current portion		151,918			224,511
Total current liabilities		19,207,013			18,477,039
Long-term liabilities
Notes payable - long-term portion		4,359			8,472
Capital lease obligations - long-term portion		42,665			64,603
Total liabilities		19,254,037			18,550,114
Stockholders' equity
Preferred stock; $0.001 par value; 5,000,000 shares authorized, no shares issued and outstanding		-			-
Common stock; $0.001 par value; 45,000,000 shares authorized, 23,225,358 shares issued and 22,738,885 shares outstanding at March 31, 2013 and December 31, 2012, respectively		22,789			22,789
Additional paid-in capital		23,763,938			23,739,111
Accumulated other comprehensive loss		(327,514	)		(431,081	)
Accumulated deficit		(33,297,048	)		(21,186,437	)
Treasury stock; 486,473 shares of common stock at cost at March 31, 2013 and December 31, 2012, respectively		(246,859	)		(246,859	)
Total stockholders' equity		(10,084,694	)		1,897,523
Total liabilities and stockholders' equity	$	9,169,343		$	20,447,637

See Accompanying Notes to Condensed Consolidated Financial Statements

4

GLOBAL AXCESS CORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	For the Three Months Ended
	March 31, 2013			March 31, 2012
Revenues	$	7,013,746		$	8,296,300
Cost of revenues		5,334,119			5,636,808
Gross profit		1,679,627			2,659,492
Operating expenses
Depreciation expense		518,230			615,185
Amortization of intangible merchant contracts		316,033			326,844
Impairment of long-lived assets		10,858,155			-
Selling, general and administrative		1,444,839			1,734,973
Stock compensation expense		24,827			17,195
Total operating expenses		13,162,084			2,694,197
Operating loss from operations before items shown below		(11,482,457	)		(34,705	)
Interest expense, net		(511,286	)		(254,596	)
Debt restructuring charges		(97,868	)		-
Gain on sale of assets		-			20,493
Loss from operations before income tax expense		(12,091,611	)		(268,808	)
Income tax expense		(19,000	)		(22,500	)
Net loss	$	(12,110,611	)	$	(291,308	)
Loss per common share - basic:
Net loss per common share	$	(0.53	)	$	(0.01	)
Loss per common share - diluted:
Net loss per common share	$	(0.53	)	$	(0.01	)
Weighted average common shares outstanding:
Basic		22,738,885			22,723,233
Diluted		22,738,885			22,723,233

See Accompanying Notes to Condensed Consolidated Financial Statements

5

GLOBAL AXCESS CORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

	For the Three Months Ended
	March 31, 2013			March 31, 2012
Net loss	$	(12,110,611	)	$	(291,308	)
Other comprehensive income:
Unrealized gain on cash flow hedges		103,567			18,198
Total other comprehensive income		103,567			18,198
Total comprehensive loss	$	(12,007,044	)	$	(273,110	)

See Accompanying Notes to Condensed Consolidated Financial Statements

6

GLOBAL AXCESS CORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Three Months Ended
	March 31, 2013			March 31, 2012
Cash flows from operating activities:
Net loss	$	(12,110,611	)	$	(291,308	)
Stock based compensation		24,827			17,195
Stock options issued to consultants in lieu of cash compensation		-			5,071
Depreciation expense		518,230			615,185
Amortization of intangible merchant contracts		316,033			326,844
Amortization of capitalized loan fees		62,371			47,712
Impairment of assets and long-lived assets		10,858,155			-
Allowance for doubtful accounts		(8,281	)		(6,580	)
Gain on sale of assets		-			(20,493	)
Changes in operating assets and liabilities, net of effects of acquisitions:
Change in accounts receivable, net		(175,879	)		(98,505	)
Change in inventory, net		36,046			182,083
Change in prepaid expenses and other current assets		52,346			17,156
Change in intangible assets, net		-			(5,723	)
Change in interest rate swap contract		(18,453	)		-
Change in accounts payable and accrued liabilities		233,848			472,719
Net cash (used in) provided by operating activities		(211,368	)		1,261,356
Cash flows from investing activities:
Cash paid for Kum and Go acquisition		-			(1,000,000	)
Costs of acquiring merchant contracts		31,148			(26,461	)
Purchase of fixed assets		(86,935	)		(773,486	)
Net cash used in investing activities		(55,787	)		(1,799,947	)
Cash flows from financing activities:
Proceeds from senior lenders'  notes payable		700,000			1,196,964
Principal payments on senior lenders'  notes payable		-			(767,947	)
Principal payments on notes payable		(4,624	)		(5,200	)
Principal payments on note payable - related party		(8,750	)		(7,809	)
Principal payments on capital lease obligations		(106,341	)		(113,557	)
Net cash provided by financing activities		580,285			302,451
Decrease in cash and cash equivalents		313,130			(236,140	)
Cash and cash equivalents, beginning of period		106,218			975,363
Cash and cash equivalents, end of the period	$	419,348		$	739,223
Cash paid for interest	$	232,577		$	204,255
Cash paid for income taxes	$	26,408		$	-

See Accompanying Notes to Condensed Consolidated Financial Statements

7

Supplemental schedule of non-cash investing and financing activities:

	For the Three Months Ended
SUPPLEMENTAL CASH FLOW INFORMATION	March 31, 2013			March 31, 2012
The significant non-cash activities of the Company were as follows:
Operating activities:
Net transfer of de-installed net fixed assets to (from) inventory	$	176,292		$	(83,976	)
Non-cash accrued interest expenses on swap agreement with senior lender		-			18,198
Total non-cash operating activities	$	176,292		$	(65,778	)
Investing activities:
Purchase of assets under capital lease obligations	$	11,810		$	70,118
Net transfer of de-installed net fixed assets (to) from inventory		(176,292	)		83,976
Total non-cash investing activities	$	(164,482	)	$	154,094
Financing activities:
Settlement of stock option exercises through issuance of treasury stock:
Repurchase of treasury stock, 15,342 shares of common stock at
cost for the period ended March 31, 2012	$	-		$	(10,000	)
Total non-cash financing activities	$	-		$	(10,000	)

See Accompanying Notes to Condensed Consolidated Financial Statements

8

GLOBAL AXCESS CORP AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2013

(Unaudited)

1. BASIS OF PRESENTATION

The Accompanying unaudited condensed consolidated financial statements have been prepared in accordance with Securities and Exchange Commission (the “SEC”) requirements for interim financial statements. Therefore, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the Form 10-K, filed with the SEC, for the year ended December 31, 2012 of Global Axcess Corp and its subsidiaries (the “Company”).

The condensed consolidated financial statements present the condensed consolidated balance sheets, statements of operations, and cash flows of the Company. The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for the presentation of interim financial statements.

The condensed consolidated financial information is unaudited. In the opinion of management, all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the financial position of the Company as of March 31, 2013 and the results of operations and cash flows presented herein have been included in the condensed consolidated financial statements. Interim results are not necessarily indicative of results of operations for the full year.

2. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Global Axcess Corp is a Nevada corporation organized in 1984. The Company, primarily through its wholly owned subsidiaries, Nationwide Money Services, Inc., Nationwide Ntertainment Services, Inc. and EFT Integration Inc., is an independent provider of self-service kiosk services. Nationwide Ntertainment Services, Inc. was formed during fiscal 2009. These solutions include ATM and DVD kiosk management and support services focused on serving the self-service kiosk needs of merchants, grocers, retailers and financial institutions nationwide. It is a one-stop gateway for unattended self-service kiosk management services. The Company currently owns, manages or operates a total of approximately 4,900 ATMs (4,550) and DVD kiosks (350) in its national network spanning 47 states.

During March 2013, the Company informed The Exchange, its primary customer in the DVD business that the Company intends to sell its DVD business. In response to the Company’s request that The Exchange assign its contract when the appropriate time dictates. On March 26, 2013, the Company received notification from The Exchange that they are terminating its contract with the Company effective June 24, 2013. The Exchange contract accounts for nearly all of the Company’s revenue from its DVD business services.

Going Concern Matters

The Company’s consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the consolidated financial statements within the Form 10-K, filed with the SEC, for the year ended December 31, 2012, the Company incurred net losses attributable to common shareholders of $12,110,750, $1,877,185 and $853,568, and used $869,145, $768,199 and $264,298 in cash for the fiscal years ended December 31, 2012, 2011 and 2010, respectively. Additionally, the Company has a negative working capital (current liabilities exceeded current assets) of $17,078,582, an accumulated deficit of $33,297,048 and cash and cash equivalents of $419,348 as of March 31, 2013. The net losses and net working capital deficit create an uncertainty about the Company’s ability to continue as a going concern.

9

The Company’s continued existence is dependent upon management’s ability to develop profitable operations and to obtain additional funding sources. The Company may raise additional capital through the issuance of common or preferred stock, securities convertible into common stock, or secured or unsecured debt, an investment by a strategic partner in a specific market opportunity, or by selling all or portion of the Company’s assets. These possibilities, to the extent available, may be on terms that result in significant dilution to the Company’s existing shareholders. If these efforts are unsuccessful, the Company may be forced to seek relief through a filing under the U.S. Bankruptcy Code, which could result in the total loss of shareholders’ investments in the Company.

There can be no assurance that the Company’s financing efforts will result in profitable operations or the resolution of the Company’s liquidity problems. The accompanying consolidated financial statements do not include any adjustments that might result should the Company be unable to continue as a going concern. The Company’s intent is to follow the terms and conditions stated in the Forbearance Agreement, The Second Forbearance Agreement (See Financial Footnote #4 “Senior Lenders’ Notes Payable”) and The Third Forbearance Agreement entered into with Fifth Third Bank (See Financial Footnote #14 “Subsequent Events”). .

Total Revenue and Total Cost of Revenues Presentation

The Company presents “Revenues” and “Cost of Revenues” as a single line item in the condensed consolidated statements of operations. The following tables set forth the revenue and cost of revenues sources included in the single line items presented for the three-month periods ended March 31, 2013 and 2012:

Revenues:

	For the Three Months Ended
	March 31, 2013		March 31, 2012
ATM Surcharge / Convenience Fee revenue	$	4,329,568	$	4,922,052
ATM Interchange revenue		1,466,423		1,841,779
ATM Processing revenue		36,143		42,512
ATM Sales revenue		33,197		87,883
Other ATM revenue		222,125		334,842
DVD Rental revenue		926,290		1,067,232
Total revenues	$	7,013,746	$	8,296,300

	For the Three Months Ended
	March 31, 2013		March 31, 2012
ATM Operating revenue	$	6,054,259	$	7,141,185
ATM Sales revenue		33,197		87,883
DVD Operating revenue		926,290		1,067,232
Total revenues	$	7,013,746	$	8,296,300

10

Cost of Revenues:

	For the Three Months Ended
	March 31, 2013		March 31, 2012
ATM Merchant residual / commission costs	$	2,968,362	$	3,135,457
ATM Cost of cash		684,280		797,446
ATM Processing costs		248,837		275,325
ATM Communication costs		96,392		115,095
ATM Sales costs		10,983		40,585
Other ATM cost of revenues		561,101		431,795
DVD operating costs		764,164		841,105
Total cost of revenues	$	5,334,119	$	5,636,808

	For the Three Months Ended
	March 31, 2013		March 31, 2012
Cost of ATM Operating revenue	$	4,558,972	$	4,755,118
ATM Sales costs		10,983		40,585
Cost of DVD Operating revenue		764,164		841,105
Total cost of revenues	$	5,334,119	$	5,636,808

Inventory

The components of inventory as of March 31, 2013 and December 31, 2012, respectively, are as follows:

	March 31, 2013		December 31, 2012
ATM parts and supplies	$	204,341	$	204,342
Automated teller machines		181,918		183,422
DVD rental kiosks		20,761		438,100
DVD library		482,642		517,183
		889,662		1,343,047
Less: reserve for inventory obsolescence		182,572		182,572
Inventory, net	$	707,090	$	1,160,475

11

Fixed Assets

The components of fixed assets for the periods ended March 31, 2013 and December 31, 2012, respectively, are as follows:

	March 31, 2013		December 31, 2012
Automated teller machines	$	14,589,777	$	14,522,315
DVD rental kiosks		4,611,593		4,431,048
Furniture and fixtures		455,787		455,787
Computers, equipment and software		3,694,008		3,666,978
Automobiles		473,641		473,641
Leasehold equipment		84,946		84,946
		23,909,752		23,634,715
Less: accumulated depreciation and amortization		17,041,680		15,766,771
Fixed assets, net	$	6,868,072	$	7,867,944

Intangible Assets – Merchant Contracts and Other

The following table summarizes Intangible Assets and Merchant Contracts at March 31, 2013:

	Gross Carrying Value		Accumulated Amortization		Net
Other intangible assets	$	558,255	$	495,884	$	62,371
Merchant contracts, net		18,593,787		18,593,787		-
Total intangible assets, net and merchant contracts, net	$	19,152,042	$	19,089,671	$	62,371

The following table summarizes Intangible Assets and Merchant Contracts at December 31, 2012:

	Gross Carrying Value		Accumulated Amortization		Net
Other intangible assets	$	682,997	$	558,255	$	124,742
Merchant contracts, net		18,624,935		8,417,325		10,207,610
Total intangible assets, net and merchant contracts, net	$	19,307,932	$	8,975,580	$	10,332,352

Earnings per Share

In calculating basic income per share, net income is divided by the weighted average number of common shares outstanding for the period. Diluted net income per common share is computed based on the weighted average number of common shares outstanding during the period increased by the effect of dilutive stock options and stock purchase warrants using the treasury stock method. No such conversion is assumed where the effect is anti-dilutive, such as when there is a net loss from operations or when the exercise price of the potentially dilutive securities is greater than the market value of the Company’s stock.

For the three months ended March 31, 2013 there were stock options outstanding to acquire 1,040,125 shares of the Company’s common stock, and stock warrants to purchase 30,000 shares of common stock which were excluded from the calculation of its diluted earnings per share as their effect would be anti-dilutive. For the three months ended March 31, 2012 there were stock options outstanding to acquire 1,053,570 shares of the Company’s common stock, and stock warrants to purchase 30,000 shares of common stock which were excluded from the calculation of its diluted earnings per share as their effect would be anti-dilutive.

12

	For the Three Months Ended
	March 31, 2013			March 31, 2012
Numerator
Loss from continuing operations	$	(12,110,611	)	$	(291,308	)
Numerator for diluted loss per share available to common stockholders	$	(12,110,611	)	$	(291,308	)
Denominator
Weighted average shares		22,738,885			22,723,233
Effect of dilutive securities:
Treasury method, effect of employee stock options & warrants		-			-
Denominator for diluted loss per share adjusted weighted shares after assumed exercises		22,738,885			22,723,233
Loss per common share - basic:
Net loss per common share	$	(0.53	)	$	(0.01	)
Loss per common share - diluted:
Net Loss per common share	$	(0.53	)	$	(0.01	)

Recent Accounting Pronouncements

Reclassifications out of Accumulated Other Comprehensive Income. In February 2013, the FASB issued ASU 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. This update requires entities to disclose items reclassified out of accumulated other comprehensive income and into net income in a single location within the financial statements. The Company adopted ASU 2013-02 as of January 1, 2013, and now reports this information in Financial Footnote #9 “Accumulated Other Comprehensive Loss”.

13

3. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities consisted of the following as of March 31, 2013 and December 31, 2012:

	March 31, 2013		December 31, 2012
Accounts payable	$	1,309,766	$	1,719,625
Accrued commissions/residual payments		2,394,606		1,988,603
Accrued cost of cash and cash replenishment expenses		116,085		82,710
Accrued payroll		277,309		198,388
Accrued audit fees		22,375		66,150
Accrued interest		371,587		155,249
Accrued legal fees		-		1,584
Asset retirement obligation		99,430		99,430
Accrued taxes		52,265		59,664
Accrued debt restructuring charges		250,000		250,000
Other		143,504		181,676
Accounts payable and accrued liabilities	$	5,036,927	$	4,803,079

4. SENIOR LENDERS’ NOTES PAYABLE

The components of senior lenders’ notes payable for the periods presented are as follows:

	March 31, 2013		December 31, 2012
Fifth Third Bank, term loan (1)	$	2,013,889	$	2,013,889
Fifth Third Bank, equipment finance line (2)		7,204,824		7,204,824
Fifth Third Bank, draw loan (3)		110,326		110,326
Fifth Third Bank, draw loan #2 (4)		517,043		517,043
Fifth Third Bank, $1.65 million draw loan (5)		1,015,990		1,015,990
Fifth Third Bank, $3.0 million contract facility (6)		85,880		85,880
Fifth Third Bank, $1.0 million contract facility (7)		916,219		916,219
Fifth Third Bank, $250 thousand contract facility (8)		202,536		202,536
Fifth Third Bank, $1.5 million revolving facility (9) (10)		1,500,000		800,000
		13,566,707		12,866,707
Less: current portion		13,566,707		12,866,707
Long-term portion, net of senior lenders' notes payable	$	-	$	-

On June 18, 2010, the Company, entered into a $17.0 million credit facility with Fifth Third Bank ("Fifth Third"). The credit facility consists of three components: (i) a term loan of $5.0 million, (ii) a draw loan of up to $2.0 million, and (iii) an equipment finance line of up to $10.0 million.

The term loan and the draw loan are covered by a Loan and Security Agreement, dated as of June 18, 2010 (the "Loan Agreement"), among the Company, Nationwide Money Services, Inc., Nationwide Ntertainment Services, Inc., EFT Integration, Inc. (all subsidiaries of the Company) and Fifth Third.

The Loan Agreement contains customary representations, warranties and covenants, including covenants on the following: (1) due authorization; (2) compliance with laws; (3) absence of breach; (4) collateral ownership and limitation of liens; (5) preparation of financial statements; (6) litigation and taxes; (7) events of default; (8) ERISA obligations; (9) use of loan proceeds; (10) limitations on indebtedness, liens and certain investments; (11) limitations on changes in ownership structure; (12) dividends; (13) repurchases of shares; and (14) maintenance of certain accounts with Fifth Third. The Loan Agreement, Term Promissory Note, and Draw Promissory Note also include customary default provisions, including, without limitation, payment defaults, cross-defaults to other material indebtedness, and bankruptcy and insolvency. In general, upon an event of default, Fifth Third may, among other things, declare the outstanding principal and interest immediately due and payable.

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Pursuant to the terms of the Loan Agreement and the Lease Agreement, the Company granted Fifth Third a security interest in all of its assets, and the agreements are cross-collateralized.

Effective June 1, 2012 the Company entered into a refinancing agreement on several of its credit facilities that effectively extended the amortization of principal from an average of 36 months to an average of 48 months. Additionally, this amendment called for no principal payments for June and July 2012 on select facilities; with principal payments on these facilities reset to August 1. In exchange for the extension of the amortization, the interest rate on all affected debt increased to one month LIBOR plus 750 basis points through March 2013. The affected facilities listed below are (2), (3), (5), (6), and (7). In addition to this agreement, effective September 30, 2012, the Company entered into an amendment for which certain specified draw loans were amended to forego principal payments until maturity or acceleration, or such other date that all other amounts of obligations are to be paid in full. This amendment reset interest back to rates that existed prior to the June 1, 2012 amendment.

Effective August 13, 2012 and then again on September 28, 2012, the Company entered into amendments with Fifth Third Bank. These amendments required cash flow forecast reporting and certain specified draw loans to be amended to forego principal payments ultimately until maturity or acceleration, or such other date that all other amounts of obligations are to be paid in full by December 1, 2012. Loans (1), (2), (3), (4), (5), (6), and (7) below were effected. As a result, all outstanding Fifth Third loans and related interest rate swaps have been reclassified to current liabilities.

(1). On the day of closing of the Loan Agreement, the Company issued a promissory note (the "Term Promissory Note") in the amount of $5.0 million to Fifth Third covering the amount disbursed pursuant to the term loan. The Term Promissory Note was available to the Company as a single principal advance. Principal and interest payable under the original Term Promissory Note were to be paid in the amount borrowed over 36 months, beginning July 1, 2010, with 36 monthly principal payments plus accrued interest, with the final payment to be made on May 31, 2013. On January 6, 2012, the Company entered into a modification (the “Modification”) of the Term promissory Note with Fifth Third. As part of the Modification, the Company re-amortized the principal balance of the $2.5 million on this note (as of December 31, 2011) from 17 months remaining to 36 months remaining. The original Term Promissory Note carries interest of LIBOR plus up to 400 basis points based on a ratio of the Company’s indebtedness to EBITDA or 5.5%, whichever is greater. As of March 31, 2013, the outstanding principal balance was $2,013,889 and the interest rate on this facility was 5.5%. In addition to the interest rate, Fifth Third is charging the Company 5% default rate plus a 5% late fee penalty plus 3.5% payment in kind.

(2). The equipment finance line is covered by a Master Equipment Lease Agreement, dated as of June 18, 2010 (the "Lease Agreement"), among the Company, Nationwide Money Services, Inc., Nationwide Ntertainment Services, Inc., and Fifth Third. The Lease Agreement and the corresponding equipment finance line available from Fifth Third are used to fund the purchases of up to $10.0 million of equipment (ATM and DVD kiosks), from time to time, and is available to the Company over a five year period. The line is secured by any equipment that is purchased pursuant to the line. The equipment line may also be used to support IT infrastructure. Borrowings made by the Company pursuant to this equipment line carry a term of one-year interest-only followed by an amortization of three years subsequent to each closing of a drawdown schedule. During an interim period between drawdowns and the closing of a drawdown schedule, the line carries interest-only payments. On March 31, 2011 the Company entered into a 12-month forward looking interest rate swap agreement on a $3,976,531 equipment lease schedule with Fifth Third Bank which effectively fixed its LIBOR interest rate at 2.45% as of April 1, 2012. By fixing the LIBOR rate on its equipment lease schedule at 2.45% effective April 1, 2012, interest rate paid on the $3,976,531 equipment lease schedule was 6.45% beginning April 1, 2012. The Company entered into a modification of terms with this hedge in association with the June 1, 2012 refinancing agreement. This amendment was made in order to reflect the waiver that reset principal payments originally due in June and July of 2012 to August 1, 2012. All other terms of the hedge remained as originally agreed upon. As a result of the August 13, 2012 amendment entered into with the bank, the terms of the swap were altered. This rendered the hedge ineffective. As a result, the mark to market fair value amount between the company and its counter party was booked to interest expense during the quarter. As of March 31, 2013, the Company had drawn down a total of $7,538,650 against the Lease Agreement. $3,227,385 of the total draw down is on an interim interest-only schedule at an interest rate of 5.5%. As of March 31, 2013, the outstanding principal balance was $7,204,824.

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(3). Also on the day of the closing of the Loan Agreement, the Company issued a promissory note (the "Draw Promissory Note") to Fifth Third covering any amounts which might be disbursed pursuant to the draw loan, which can be a maximum of $2.0 million. The Company can request disbursement from the draw loan in $200,000 increments at any time after the delivery of the Draw Promissory Note. The Company will repay any amounts borrowed pursuant to the Draw Promissory Note over 18 months, beginning on the first day of the month following any draw, with 18 monthly principal payments plus accrued interest. The original Draw Promissory Note carries interest of LIBOR plus up to 400 basis points based on a ratio of the Company’s indebtedness to EBITDA or 5.5%, whichever is greater. The amended promissory note carries interest of one month LIBOR plus 750 basis points. The proceeds of any amounts disbursed pursuant to the draw loan will be used to purchase DVD inventory for the Company’s DVD kiosk business line. As of March 31, 2013, the Company had drawn down a total of $1,994,678 against the Draw Promissory Note and had an outstanding principal balance of $110,326. As of March 31, 2013, the interest rate on this facility was 5.5%. In addition to the interest rate, Fifth Third is charging the Company 5% default rate plus a 5% late fee penalty plus 3.5% payment in kind.

(4). On September 28, 2011, the Company issued a promissory note (the "Draw Promissory Note # 2") to Fifth Third covering any amounts which might be disbursed pursuant to the draw loan, which can be a maximum of $960,000. The Company can request disbursement from the draw loan in $200,000 increments at any time after the delivery of the Draw Promissory Note. The Company will repay any amounts borrowed pursuant to the Draw Promissory Note over 18 months, beginning on the first day of the month following any draw, with 18 monthly principal payments plus accrued interest. The Draw Promissory Note carries interest of LIBOR plus up to 900 basis points based on a ratio of the Company’s indebtedness to EBITDA or 5.5%, whichever is greater. The proceeds of any amounts disbursed pursuant to the draw loan will be used to purchase DVD inventory for the Company’s DVD kiosk business line. As of March 31, 2013, the Company had drawn down a total of $960,000 against the Draw Promissory Note # 2 and had an outstanding principal balance of $517,043. As of March 31, 2013, the interest rate on this facility was 9.2%. In addition to the interest rate, Fifth Third is charging the Company 5% default rate plus a 5% late fee penalty plus 3.5% payment in kind.

(5). On December 17, 2010, the Company and Fifth Third entered into a First Amendment (the “Amendment”) to the Loan Agreement. Pursuant to the Amendment, the Company and Fifth Third modified the draw loan aspect of the Loan Agreement to permit for additional financing in the amount of $1,650,000 under the terms of the draw loan for the purposes of purchasing certain assets and customer contracts connected with recent acquisition agreements. The Amendment increased the maximum aggregate credit availability pursuant to the Loan Agreement from $17.0 million to $18.65 million. The draw loan maturity date is the earlier of 36 months (December 15, 2013) or the expiration or earlier termination of the customer agreements that were acquired with the proceeds of the draw loan. As security for the loan to be extended under the Amendment, in addition to that which was granted under the Loan Agreement, the Company granted security interests in the assets to be acquired pursuant to the recent acquisition agreements. The Amendment carries interest of LIBOR plus up to 400 basis points based on a ratio of the Company’s indebtedness to EBITDA or 5.5%, whichever is greater. Additionally, this draw loan was part of the refinancing amendment effective June 1, 2012. The amended promissory note as of June 1, 2012 increased interest to one month LIBOR plus 750 basis points. As of March 31, 2013, the Company had drawn down $1,520,162 against the Amendment and had an outstanding principal balance of $1,015,990. As of March 31, 2013, the interest rate on this facility was 5.5%. In addition to the interest rate, Fifth Third is charging the Company 5% default rate plus a 5% late fee penalty plus 3.5% payment in kind.

(6). On December 29, 2011, the Company, entered into a $3.0 million credit facility (“$3.0m credit facility”) with Fifth Third Bank. The credit facility consists of a draw loan of up to $3.0 million. On the day of closing of the Loan Agreement, the Company issued two promissory notes (the “Draw Loan C Promissory Notes”) in the amount of $40,800 and $51,600, respectively, to Fifth Third covering an initial disbursal pursuant to the draw loan. The Company will repay the amount borrowed on each of the Draw Loan C Promissory Notes, beginning on February 29, 2012, on the date which is the earlier of (i) 45 months following the date of the note, and (ii) the expiration date or earlier termination of the Customer Agreements; but, in any event, on either note, not later than May 31, 2015. The original Draw Loan C Promissory Notes carry interest of LIBOR plus up to 600 basis points or 6.0%, whichever is greater. The amended promissory notes carry interest of one month LIBOR plus 750 basis points. The proceeds of the Draw Loan C Promissory Notes were used to purchase certain identified customer contracts. The proceeds from any future draw loans made pursuant to the Loan Agreement shall be used for the acquisition of identified customer agreements, and purchases of ATM related equipment and inventory. As of March 31, 2013, the Company had an outstanding principal balance of $85,880 against the $3.0 m credit facility. As of March 31, 2013, the interest rate on this facility was 6.2%. In addition to the interest rate, Fifth Third is charging the Company 5% default rate plus a 5% late fee penalty plus 3.5% payment in kind. In addition to the interest rate, Fifth Third is charging the Company 5% default rate plus a 5% late fee penalty plus 3.5% payment in kind.

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(7). On November 23, 2011, the Company, entered into a $1.0 million credit facility (“$1.0m credit facility”) with Fifth Third Bank. The credit facility consists of a draw loan of up to $1.0 million. On the day of closing of the $1.0m credit facility, the Company issued a promissory note in the amount of $200,000 to fund an acquisition of customer agreements. The Company will repay the amount borrowed on the date which is the earlier of (i) 36 months following the date of the note, and (ii) the expiration date or earlier termination of the Customer Agreements; but, in any event, on either note, not later than May 31, 2015. The original promissory note carries interest of LIBOR plus up to 600 basis points or 6.0%, whichever is greater. The amended promissory note carries interest of one month LIBOR plus 750 basis points. The proceeds from any future draw loans made pursuant to the $1.0m credit facility shall be used for the acquisition of identified customer agreements. As of March 31, 2013, the Company had an outstanding principal balance of $916,219 against the $1.0m credit facility. As of March 31, 2013, the interest rate on this facility was 6.2%. In addition to the interest rate, Fifth Third is charging the Company 5% default rate plus a 5% late fee penalty plus 3.5% payment in kind.

(8). On November 21, 2011, the Company, entered into a $250,000 credit facility (“$250 thousand credit facility”) with Fifth Third Bank. The credit facility consists of a draw loan of up to $250,000. On the day of closing the $250 thousand credit facility, the Company paid $250,000 to fund an acquisition of customer ATMs. The Company will repay the amount borrowed on the date which is the earlier of (i) 36 months following the date of the note, and (ii) the expiration date or earlier termination of the Customer Agreements; but, in any event, on either note, not later than December 1, 2014. The promissory notes carry interest of LIBOR plus up to 600 basis points or 6.0%, whichever is greater. As of March 31, 2013, the Company had an outstanding principal balance of $202,536 against the $250 thousand credit facility. The interest rate on the balances under the $250 thousand credit facility at March 31, 2013 was 6.2%. In addition to the interest rate, Fifth Third is charging the Company 5% default rate plus a 5% late fee penalty plus 3.5% payment in kind.

(9). On November 13, 2012 the Company entered into a forbearance agreement and amendment with Fifth Third Bank (“The Forbearance Agreement”). The Forbearance Agreement operated as forbearance by Fifth Third of its rights against the Company with respect to several existing defaults by the Company under the Loan Agreements and the Lease Agreements. Specifically, Fifth Third agreed not to exercise certain rights in respect to the existing defaults for a period commencing on the date of the Forbearance Agreement and ending on the date which is the earliest of (i) February 15, 2013, (ii) the occurrence or existence of any event of default, other than the existing defaults, or (iii) the occurrence of any Termination Event (as defined in the Forbearance Agreement).

The Forbearance Agreement also operated as an omnibus amendment to certain terms contained in the Loan Agreements, in exchange for certain agreements and representations made by the Company. The Forbearance Agreement was subsequently superseded, as to certain terms, by The Second Forbearance Agreement (see 10 below) and by The Third Forbearance Agreement (See Financial Footnote #14 “Subsequent Events”).

Revolving Loans

Under the Forbearance Agreement, Fifth Third agreed to make certain loans available to the Company up to an aggregate principal amount of $1.0 million (which may be increased to $1.5 million at the sole discretion of Fifth Third) under the terms of a revolving note (“$1.5 million revolving facility”) attached to the Forbearance Agreement. Interest on the $1.5 million revolving facility will accrue at an annual rate of LIBOR + 12.0%. Proceeds under the revolving loans may only be used as specified in the Company’s approved budget (as discussed below) and the Company paid a $30,000 closing fee associated with the loan. As of March 31, 2012, the Company had drawn down $1,500,000 against the $1.5 million revolving facility and had an outstanding principal balance of $1,500,000. As of March 31, 2013, the interest rate on this facility was 12.2%.

Sale Covenants

The Forbearance Agreement also called for the Company to deliver evidences, at certain pre-designated times of commitments, in form and substance acceptable to Fifth Third, related to a reorganization of the Company, including: offering memoranda, letters of intent, definitive offers, and definitive purchase agreements for the sale of all or substantially all company assets and/or the businesses of the Company. The Forbearance Agreement called for the reorganization of the Company to be completed no later than February 15, 2013 (or such later date as the parties may agree). As of March 31, 2013, the reorganization had not been completed.

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Budget Covenants

The Forbearance Agreement also required the Company to comply with certain cash flow and budget forecast covenants. Specifically, the Company must deliver cash flow forecasts and reconciliations (and explanations of material variances) to Fifth Third on a weekly basis. Pursuant to these covenants (an extension of the requirement put in place by the September 28, 2012 amendment to the Loan Agreements), the Company must also (i) generate cash receipts in an amount equal to at least ninety percent (90%) of the aggregate amount set forth in the weekly budget projections (with a reference period beginning on October 15, 2012), and (ii) make aggregate cash disbursements no greater than ten percent (10%) more than the amount set in the weekly budget projections (with a reference period beginning on September 10, 2012). Furthermore, any proceeds collected by the Company based on enumerated collateral, must only be used for the purposes specified in the Company’s provided budget.

Management Structuring

The Forbearance Agreement required that, at all times when the Forbearance Agreement is active, the Company’s Chief Executive Officer shall be Kevin L. Reager (the Company’s current Chief Executive Officer), or such other person as may be agreed to by Fifth Third.

The Forbearance Agreement also required the Company to appoint a new Chief Restructuring Officer, who will be empowered to manage the day-to-day operations of the Company and facilitate the Company’s efforts to reorganize through consummation of a strategic transaction. To such end, the Chief Restructuring Officer will also be empowered to explore, negotiate, and execute, deliver and consummate (subject to approvals of the Company’s board of directors and shareholders, as required by law) any agreements related to such strategic transactions.

The Company has appointed Kevin L. Reager (its Chief Executive Officer) as its Chief Restructuring Officer pursuant to this requirement.

Outside Consultants

The Forbearance Agreement also required the Company to continue to retain a specified consulting firm, who will monitor and report to Fifth Third on several aspects of the Company’s business and financial condition (an extension and reiteration of the requirement put in place by amendments of the Loan Agreements effective August 13, 2012 and September 28, 2012). The Company must also continue its engagement of a specified investment banker, to assist the Company in connection with such strategic alternatives as the investment banker, the consultant or the Company may propose which are acceptable to Fifth Third (also an extension and reiteration of the requirements put in place by the August 13, 2012 and September 28, 2012 amendments).

Additional Commitments

The following additional commitments were also made by the Company in connection with the Amendment:

With respect to all covered obligations of the Company to Fifth Third, the Company must present term sheets (with investors or other lenders) for refinancing such obligations by October 31, 2012, binding commitments to such refinancing by November 30, 2012 and have closed such refinancing by December 31, 2012.

The Company must deliver certain waivers of its landlords related to its leased locations.

The Company must provide requested information to Fifth Third on a specified piece of pending litigation involving the Company (this pending litigation was a class action lawsuit against the Company which was subsequently settled for $6,000 in February 2013).

The Company is restricted, by the terms of the Amendment from making or paying certain distributions or dividends, advances, loans, redemptions, prepayments, management fees, or other specified payments or set-asides.

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Except as modified by the Forbearance Agreement, the terms of the Loan Agreements and the Lease Agreement (and each of the related equipment schedules), as amended, remain in full force and effect.

The foregoing description of the Forbearance Agreement, including all exhibits attached thereto, is qualified in its entirety by reference to the text of the Forbearance Agreement, a copy of which is attached as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 14, 2012.

(See Form 8-K filing “Fifth Third Forbearance Agreement” filed on November 14, 2012 for details on specific agreements and representations made by the Company relating to this agreement.)

As of December 31, 2012, the Company was in technical default under the Forbearance Agreement with Fifth Third Bank (as more particularly described above). As of the date of filing of this Form 10-Q, the Company remained in technical default under the Forbearance Agreement, as a reorganization of the Company on or before February 15, 2013, along with other specific requirements of the Forbearance Agreement, had not occurred. See details of the Forbearance Agreement described above.

(10). On April 23, 2013, the Company entered into a Second Forbearance Agreement and Amendment (the “Second Forbearance Agreement”) relating to several existing credit facilities Fifth Third (those impacted by the Forbearance Agreement). The Second Forbearance Agreement (executed and delivered April 23, 2013, dated April 18, 2013 and effective as of February 15, 2013) operates as a forbearance by Fifth Third of its rights against the Company with respect to several existing defaults by the Company under the Loan Agreements and the Lease Agreement, and supersedes the Forbearance Agreement to the extent provided therein. Specifically, Fifth Third agreed not to exercise certain rights in respect to the existing defaults for a period commencing on the date of the Second Forbearance Agreement and ending on the date which is the earliest of (i) May 7, 2013, (ii) at Fifth Third’s election, the occurrence or existence of any event of default, other than the existing defaults, or (iii) the occurrence of any Termination Event (as defined in the Forbearance Agreement) (the breadth of such time being the “Second Forbearance Period”). The Second Forbearance Agreement was subsequently superseded by The Third Forbearance Agreement (See Financial Footnote #14 “Subsequent Events”) and the May 7, 2013 was changed to May 21, 2013.

The Second Forbearance Agreement also operates as an omnibus amendment to certain terms contained in the Loan Agreements, in exchange for certain agreements and representations made by the Company.

Revolving Loans

Under the Second Forbearance Agreement, Fifth Third agrees to make certain loans available to the Company up to an aggregate principal amount of $1.5 million under the terms of an amended and restated revolving note between the parties, dated January 15, 2013. Interest on these revolving loans will accrue at an annual rate of LIBOR + 12.0%. Proceeds under the revolving loans may only be used as specified in the Company’s approved budget (as discussed below) and the Company was required to pay a $150,000 “Second Forbearance Fee” associated with the loan, which fee was due and payable, in cash, upon the effectiveness of the Second Forbearance Agreement.

Default Interest Rate

Under the Second Forbearance Agreement, effective as of January 16, 2013, the applicable loans shall bear interest at a per annum rate equal to the Default Rate (as defined in the Loan Agreements). The portion of such interest accruing at five percent (5%) in excess of the rate otherwise applicable shall be due and payable in cash on the date on which the Second Forbearance Period expires or is otherwise terminated, and thereafter on demand.

Late Payments Fees

Under the Second Forbearance Agreement, in accordance with Section 3 of the Lease Agreement, if Lessees fail to make any payment of “Rent” on the applicable “Rent Payment Date” (as each term is defined in the Lease Agreement), a late payment fee equal to five percent (5%) of the amount of any such missed payment(s), shall accrue upon the applicable Rent Payment Date on which Lessees fail to make any payment. All late payment fees accrued in accordance with this provision shall be due and payable in cash on the date on which the Second Forbearance Period expires or is otherwise terminated, and thereafter on demand.

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Budget Covenants

The Second Forbearance Agreement also requires the Company to comply with certain cash flow and budget forecast covenants. Specifically, the Company must deliver cash flow forecasts and reconciliations (and explanations of material variances) to Fifth Third on a weekly basis. Pursuant to these covenants (an extension of the requirement put in place by the September 28, 2012 amendment to the Loan Agreements, and by the Forbearance Agreement), the Company must also (i) generate cash receipts in an amount equal to at least ninety percent (90%) of the aggregate amount set forth in the weekly budget projections (with a reference period beginning on April 15, 2013), and (ii) make aggregate cash disbursements no greater than ten percent (10%) more than the amount set in the weekly budget projections (with a reference period beginning on April 15, 2013). Furthermore, any proceeds collected by the Company based on enumerated collateral (including proceeds from the equity raise described above), must only be used for the purposes specified in the Company’s provided budget.

Cash Management

The Second Forbearance Agreement also requires the Company to maintain all of their operating accounts with Fifth Third. The Company was required to establish, with Fifth Third, a “Concentration Account” into which funds in excess of $25,000 in other designated accounts would be swept on a daily basis, and out of which funds in excess of $100,000 would be applied on a daily basis to the outstanding balance on the Revolving Loan.

Outside Consultants

The Second Forbearance Agreement also requires the Company to continue to retain a specified consulting firm, who will monitor and report to Fifth Third on several aspects of the Company’s business and financial condition (an extension and reiteration of the requirement put in place by amendments of the Loan Agreements effective August 13, 2012 and September 28, 2012, and by the Forbearance Agreement).

Additional Commitments

The following additional commitments were also made by the Company in connection with the Second Forbearance Agreement:

The Company must pay (by the end of the Second Forbearance Period or its earlier termination) the full amount of $250,000 in prior amendment fees due and payable to Fifth Third, which fees were incurred and earned (but have not yet been paid) in connection with amendments to the Loan Agreements and the Lease Agreement on August 13, 2012 and September 28, 2012.

At all times when the Second Forbearance Agreement is active, the Company’s Chief Executive Officer and Chief Restructuring Officer shall be Kevin L. Reager (the Company’s current Chief Executive Officer and Chief Restructuring Officer), or such other person as may be agreed to by Fifth Third.

The Company is restricted, by the terms of the Second Forbearance Agreement from making or paying certain distributions or dividends, advances, loans, redemptions, prepayments, management fees, or other specified payments or set-asides.

Except as modified by the Second Forbearance Agreement, the terms of the Loan Agreements and the Lease Agreement (and each of the related equipment schedules), as amended, remain in full force and effect.

The foregoing description of the Second Forbearance Agreement, including all exhibits attached thereto, is qualified in its entirety by reference to the text of the Second Forbearance Agreement, a copy of which is attached as Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the SEC on April 26, 2013.

(See Form 8-K filing “Fifth Third Second Forbearance Agreement”, filed on April 26, 2013 for details on specific agreements and representations made by the Company relating to this agreement).

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Vault Cash Hedge

On May 26, 2011 the Company entered into a 12-month forward looking interest rate swap agreement on $20 million with Fifth Third Bank which swapped the interest rate on the Company’s vault cash. The effective date of the rate swap was June 1, 2012. Beginning in June, the Company began realizing the difference between its variable rate, and effectively fixed rate, a difference of 1.29%.

5. COMMITMENTS AND CONTINGENCIES

We lease ATMs and back office computer equipment under capital lease agreements that expire between 2013 and 2015. The average interest rate paid on these lease payments is approximately 9.6% per annum. As of March 31, 2013, $194,583 of capital lease obligations were included in the Company’s condensed consolidated balance sheet.

6. LITIGATION AND CLAIMS

From time to time, the Company and its subsidiaries may be parties to, and their property is subject to, ordinary, routine litigation incidental to their business. We know of no material, active or pending legal proceedings against the Company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

7. INCOME TAXES

The effective tax rates for the three months ended March 31, 2013 and 2012 were 0.16% and 8.37%, respectively.  The effective tax rates for the three months ended March 31, 2013 differs from our expected tax rate for the period then-ended primarily due to the tax effects from the change in valuation allowance established for net deferred tax assets.

In assessing the realizability of the deferred tax assets, management considers whether it is more likely than not, that some portion or all of the deferred tax assets will not be realized.  The valuation allowance at March 31, 2013 is related to deferred tax assets arising from net operating loss carryforwards.  Management believes that based upon its projection of future taxable income for the foreseeable future, it is more likely than not that the Company will not be able to realize the full benefit of the net operating loss carryforwards before they expire.

At December 31, 2012, the Company has net operating loss carryforwards remaining of approximately $23.8 million that may be offset against future taxable income through 2032.

Our continuing practice is to recognize interest and/or penalties related to uncertain income tax matters in income tax expense. However, the type of uncertain income tax matters involved would not forseeably subject the Company to interest and/or penalties.  As such, we had $0 (net of federal tax benefit) accrued for interest and $0 accrued for penalties at March 31, 2013.

There were no income tax audits during the three months ended March 31, 2013.  With limited exception, the Company’s federal and state tax returns are open for examination for the tax year ending 2010, and all subsequent years.

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8. CHANGES IN STOCKHOLDERS' EQUITY

See the table below for all the equity transactions for the three-month period ended March 31, 2013:

										Accumulated
					Additional					Other			Total						Total
	Common Stock				Paid-in		Accumulated			Comprehensive			Comprehensive			Treasury			Stockholders'
	Shares		Amount		Capital		Deficit			Loss			Loss			Stock			Equity
Balances, December 31, 2012		22,738,885	$	22,789	$	23,739,111	$	(21,186,437	)	$	(431,081	)				$	(246,859	)	$	1,897,523
Stock compensation expense		-		-		24,827		-			-			-			-			24,827
Other comprehensive income		-		-		-		-			103,567			103,567			-			103,567
Net loss		-		-		-		(12,110,611	)		-			(12,110,611	)		-			(12,110,611	)
														(12,007,044	)
Balances, March 31, 2013		22,738,885	$	22,789	$	23,763,938	$	(33,297,048	)	$	(327,514	)				$	(246,859	)	$	(10,084,694	)

9. ACCUMULATED OTHER COMPREHENSIVE LOSS

Accumulated other comprehensive loss is displayed as a separate component of Stockholders' equity in the accompanying Consolidated Balance Sheets. The following table presents the changes in the balances of each component of accumulated other comprehensive loss:

Total accumulated other comprehensive loss as of December 31, 2012	$	(431,081	)
Other comprehensive income:
Unrealized gain on cash flow hedges		103,567
Amounts reclassified from accumulated other comprehensive income		-
Total accumulated other comprehensive loss as of March 31, 2013	$	(327,514	)

10. FAIR VALUE MEASUREMENT

The Company uses the three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows:

Level 1: Observable inputs such as quoted prices in active markets;

Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

On March 31, 2011 the Company entered into a 12-month forward looking interest rate swap agreement on a $3,976,531 equipment lease schedule with Fifth Third Bank which will fix its LIBOR interest rate at 2.45% as of April 1, 2012. The Company expects that by fixing the LIBOR rate on its equipment lease schedule at 2.45% effective April 1, 2012, it will be fixing the interest rate paid on the $3,976,531 equipment lease schedule at 6.45% beginning April 1, 2012 and until then, will remain on an interest-only schedule. Our derivative financial instruments are interest rate swap agreements, which are observable at commonly quoted intervals for the full term of the derivatives and therefore considered a level 2 input.

On May 26, 2011 the Company entered into a 12-month forward looking interest rate swap agreement on $20 million with Fifth Third Bank which will swap the interest rate on the Company’s vault cash. The effective date of the rate swap is June 1, 2012 and until then, the Company will continue to pay its variable interest rate on the $20 million of vault cash. Our derivative financial instruments are interest rate swap agreements, which are observable at commonly quoted intervals for the full term of the derivatives and therefore considered a level 2 input.

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The following tables summarize the Company's assets and liabilities carried at fair value measured on a recurring basis using the fair value hierarchy prescribed by U.S. GAAP:

			Fair Value Measurements at March 31, 2013
	Total		Level 1		Level 2		Level 3
Assets:
	$	-	$	-	$	-	$	-
Liabilities:
Liabilities associated with interest rate swaps	$	432,557	$	-	$	432,557	$	-

On a recurring basis, we measure our interest rate swap agreements at fair value using an income approach and Level 2 inputs in the fair value hierarchy. The income approach consists of a discounted cash flow model that takes into account the present value of future cash flows under the terms of the contracts incorporating observable market inputs as of the reporting date such as prevailing interest rates. Both the counterparty’s credit risk and our credit risk are considered in the fair value determination.

Interest rate swaps. The fair value of the Company's interest rate swaps was a liability of $432,557 as of March 31, 2013. These financial instruments are carried at fair value, calculated as the present value of amounts estimated to be received or paid to a marketplace participant in a selling transaction.

Cash Flow Hedging Strategy

For each derivative instrument that is designated and qualifies as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows attributable to a particular risk), the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income (loss) ("OCI"). Gains and losses on the derivative instrument representing either hedge ineffectiveness or hedge components that are excluded from the assessment of effectiveness are recognized in earnings. Prior to the quarter ending September 30, 2012, the Company only utilized fixed-for-floating interest rate swaps in which the underlying pricing terms agree in all material respects, including the pricing terms of the Company's vault cash rental obligations, the amount of ineffectiveness associated with such interest rate swap contracts has historically been immaterial. Due to the August 13, 2012 amendment entered into during the third quarter, as well as the Forbearance Agreement executed with Fifth Third, the derivative instrument relating to the Company’s equipment lease have been deemed completely ineffective from a cash flow hedging standpoint. As these agreements changed terms of the underlying notional amount, the terms of the hedge was modified resulting in fair value of the Company's cash flow hedge being moved from “OCI” on the Company’s balance sheet to interest expense on the Company’s income statement in relation to the Company's consolidated financial statements. The amount of this reclassifications was $144,215 (See Financial Footnote #4 “Senior Lenders’ Notes Payable” regarding the details of the debt balances).

The interest rate swap contract entered into with respect to the Company's equipment lease schedule effectively modifies the Company's exposure to interest rate risk by converting the Company's monthly floating LIBOR rate to a fixed rate. This contract is in place through March 31, 2015 for $3,976,531 which changed with the latest forbearance agreement. The Company entered into a minor modification of terms with this hedge in association with the June 1, 2012 refinancing agreement. This amendment was made in order to reflect the waiver that reset principal payments originally due in June and July of 2012 to August 1, 2012. See Financial Footnote #4 “Senior Lender Notes’ Payable” regarding the details of this amendment.

The interest rate swap contract entered into with respect to the Company's vault cash rental obligations effectively modifies the Company's exposure to interest rate risk by converting a portion of the Company's monthly floating rate vault cash rental expense to a fixed rate. Such contracts are in place from June 1, 2012 through June 1, 2014 for $20 million of the Company's vault cash rental obligations. By converting such amounts to a fixed rate, the impact of future interest rate changes (both favorable and unfavorable) on the Company's monthly vault cash rental expense amounts have reduced. The interest rate swap contract typically involves the receipt of floating rate amounts from the Company's counterparties that match, in all material respects, the floating rate amounts required to be paid by the Company to its vault cash provider for the portions of the Company's outstanding vault cash obligations that have been hedged. In return, the Company typically pays the interest rate swap counterparties a fixed rate amount per month based on the same notional amounts outstanding.

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At no point is there an exchange of the underlying principal or notional amounts associated with the interest rate swaps. Additionally, none of the Company's existing interest rate swap contracts contain credit-risk-related contingent features.

11. BUSINESS SEGMENT INFORMATION

FASB requires that companies report separately in the financial statements certain financial and descriptive information about segment revenues, income and assets. The method for determining what information is reported is based on the way that management organizes the operating segments for making operational decisions and assessments of financial performance. In computing operating loss and net loss for the DVD services business and the ATM services business, no allocations of general corporate expenses have been made and these are included in the Corporate Support services business.

The following table summarizes our revenues, gross profit, SG&A, stock compensation expenses, depreciation and amortization, impairment of assets and long-lived assets, operating loss, net loss and Adjusted EBITDA by segment for the periods indicated below.

EBITDA (a non-GAAP measure) is defined as earnings before net interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA from operations before stock compensation expense, gain on sale of assets, and other non-operating expense.

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	For the Three Months Ended
	March 31, 2013			March 31, 2012
Revenues:
ATM Services	$	6,087,456		$	7,229,068
DVD Services - The Exchange		926,290			1,067,232
Corporate Support		-			-
Consolidated revenues	$	7,013,746		$	8,296,300
Gross profit:
ATM Services	$	1,517,501		$	2,433,364
DVD Services - The Exchange		162,126			226,128
Corporate Support		-			-
Consolidated gross profit	$	1,679,627		$	2,659,492
SG&A:
ATM Services	$	1,006,660		$	1,061,579
DVD Services - The Exchange		125,014			185,006
Corporate Support		313,165			488,388
Consolidated SG&A	$	1,444,839		$	1,734,973
Stock compensation expense:
ATM Services	$	-		$	-
DVD Services - The Exchange		-			-
Corporate Support		24,827			17,195
Consolidated stock compensation expense	$	24,827		$	17,195
Depreciation & Amortization:
ATM Services	$	580,361		$	599,678
DVD Services - The Exchange		177,581			265,764
Corporate Support		76,321			76,587
Consolidated depreciation & amortization	$	834,263		$	942,029
Impairment of assets and long-lived assets:
ATM Services	$	9,860,429		$	-
DVD Services - The Exchange		997,726			-
Corporate Support		-			-
Consolidated impairment of assets and long-lived assets	$	10,858,155		$	-
Operating loss:
ATM Services	$	(9,929,949	)	$	772,107
DVD Services - The Exchange		(1,138,195	)		(224,642	)
Corporate Support		(414,313	)		(582,170	)
Consolidated operating loss	$	(11,482,457	)	$	(34,705	)
Net loss:
ATM Services	$	(9,957,097	)	$	742,332
DVD Services - The Exchange		(1,138,195	)		(205,371	)
Corporate Support		(1,015,319	)		(828,269	)
Consolidated net loss	$	(12,110,611	)	$	(291,308	)
Adjusted EBITDA:
ATM Services	$	510,841		$	1,371,785
DVD Services - The Exchange		37,112			41,122
Corporate Support		(313,165	)		(488,388	)
Consolidated Adjusted EBITDA	$	234,788		$	924,519

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The following table summarizes total assets by segment for the periods indicated:

	March 31, 2013		December 31, 2012
Assets:
ATM Services	$	8,169,343	$	19,274,393
DVD Services		1,000,000		1,173,244
Consolidated assets	$	9,169,343	$	20,447,637

12. DEBT RESTRUCTURING CHARGES

During the three-month period ended March 31, 2013, the Company incurred debt restructuring expenses of $97,868. These expenses include legal expenses, as well as fees for consultants the Company was required to hire as a condition of the Forbearance Agreement and The Second Forbearance Agreement entered into with Fifth Third.

13. IMPAIRMENT OF LONG LIVED ASSETS

During the first quarter of fiscal 2013, the Company determined that additional sufficient indicators of potential impairment existed to require an impairment analysis for the DVD business. Based on the analyses, the Company recorded an impairment charge of $997,726 on its DVD kiosks.

Since June 30, 2012, the Company’s market capitalization had decreased significantly. According to accounting literature, a significant decline in market capitalization is a triggering event which requires impairment analysis on the assets of the business.

Additionally, since the third quarter of 2012, the Company has been operating under several forbearance agreements with its senior lender, Fifth Third Bank (See Financial Footnote #4 “Senior Lenders’ Notes Payable” regarding the details of the agreement) due to the Company’s poor financial performance and negative cash flow. As such, during the first quarter of 2013, the Company determined that sufficient additional indicators of potential impairment existed to require a further impairment analysis for the ATM business.

The Company estimated the fair value of the assets in ATM business utilizing a combination of market multiple valuation metrics used in our industry, the present value of discounted cash flows, and analysis of most recent purchase offers by third-parties. Cash flow projections are based on management's estimates of revenue growth rates and operating margins, taking into consideration industry and market conditions. The market approach estimates fair value based on market multiples of revenue and earnings derived from comparable companies with similar operating and investment characteristics as the reporting unit.

Based on the Company’s analyses, the implied fair value of the ATM assets was lower than the carrying value of the ATM assets for the ATM business unit. As a result, the Company recorded an impairment charge of $9,860,429 during the first quarter of 2013.

14. SUBSEQUENT EVENTS

On May 9, 2013, the Company, and certain affiliates of the Company, entered into a Third Forbearance Agreement and Amendment (the “Third Forbearance Agreement”) relating to several existing credit facilities with Fifth Third. The Third Forbearance Agreement (executed and delivered May 9, 2013, and effective as of May 7, 2013) relates to facilities entered into in connection with those Loan and Securities Agreements affected by the Forbearance Agreement and the Second Forbearance Agreement. (See Financial Footnote #4 “Senior Lenders’ Notes Payable” – (#9) and (#10)).

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The Third Forbearance Agreement operates as a forbearance by Fifth Third of its rights against the Company with respect to several existing defaults by the Company under the Loan Agreements and the Lease Agreement, and is an extension of the Forbearance Agreement and the Second Forbearance Agreement. Specifically, Fifth Third agreed not to exercise certain rights in respect to the existing defaults for a period commencing on the effective date of the Third Forbearance Agreement and ending on the date which is the earliest of (i) May 21, 2013, (ii) at Fifth Third’s election, the occurrence or existence of any event of default, other than the existing defaults, or (iii) the occurrence of any Termination Event (as defined in the Forbearance Agreement) (the breadth of such time being the “Third Forbearance Period”).

The Third Forbearance Agreement also operates as an omnibus amendment to certain terms contained in the Loan Agreements and the Lease Agreement, in exchange for certain agreements and representations made by the Company. The descriptions below details the amendments contained in the Third Forbearance Agreement which differ from those amendments contained in the First Forbearance Agreement and the Second Forbearance Agreement. To the extent that the amendments contained in the Third Forbearance Agreement do not specifically supersede such amendments contained in the First Forbearance Agreement and the Second Forbearance agreement, such amendments in the First Forbearance Agreement and the Second Forbearance Agreement remain in full force and effect. (See Financial Footnote #4 “Senior Lenders’ Notes Payable” – (#9) and (#10)).

The Third Forbearance Agreement effects the following additional amendments to the Loan Agreements and Lease Agreement:

Budget Covenants

The Third Forbearance Agreement requires the Company to comply with certain cash flow and budget forecast covenants. Specifically, the Company must deliver cash flow forecasts and reconciliations (and explanations of material variances) to Fifth Third on a weekly basis. Pursuant to these covenants (an extension of the requirement put in place by the September 28, 2012 amendment to the Loan Agreements, by the First Forbearance Agreement and by the Second Forbearance Agreement), the Company must also (i) generate cash receipts in an amount equal to at least ninety percent (90%) of the aggregate amount set forth in the weekly budget projections (with a reference period beginning on May 6, 2013), and (ii) make aggregate cash disbursements no greater than ten percent (10%) more than the amount set in the weekly budget projections (with a reference period beginning on May 6, 2013). Furthermore, any proceeds collected by the Company based on enumerated collateral (including proceeds from the equity raise described above), must only be used for the purposes specified in the Company’s provided budget.

Financial Plan

On or before May 10, 2013, the Company, in consultation with its consultant (as designated by prior amendments), must deliver to Fifth Third, financial projections together with a business plan through June 30, 2014, which must be in form and substance acceptable to Fifth Third and include, without limitation, cash flow projections on not less than a monthly basis. The financial projections were presented to Fifth Third on May 10, 2013.

Additional Commitments

The following additional commitments were also made by the Company in connection with the Third Forbearance Agreement:

•          The Company must pay $40,807.44 in immediately available funds on account of accrued and unpaid interest (exclusive of interest accrued at the Default Margin (as defined in the Loan Agreements)) due and payable through May 7, 2013, pursuant to the Loan Agreements;

•          The Company must pay $38,379.81 in immediately available funds on account of accrued and unpaid interest due and payable through May 7, 2013, pursuant to the Lease Agreements; and

•          The Company must pay $27,085.33 in immediately available funds to reimburse Fifth Third for accrued professional fees.

Except as modified by the Third Forbearance Agreement, the terms of the Loan Agreements and the Lease Agreement (and each of the related equipment schedules), as amended, remain in full force and effect.

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(See Form 8-K filing “Fifth Third Third Forbearance Agreement”, filed on May 10, 2013 for details on specific agreements and representations made by the Company relating to this agreement).

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

The following discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto.

Overview

Global Axcess Corp, through its wholly owned subsidiaries, owns or leases, operates or manages Automated Teller Machines ("ATM"s) and DVD kiosks with locations primarily in the eastern and southwestern United States of America.

ATM Business Services

Our revenues are principally derived from two types of fees, which we charge for processing transactions on our ATM network. We receive an interchange fee from the issuer of the credit or debit card for processing a transaction when a cardholder uses an ATM in our network. In addition, in most cases we receive a surcharge/convenience fee from the cardholder when the cardholder makes a cash withdrawal from an ATM in our network.

Interchange fees are processing fees that are paid by the issuer of the credit or debit card used in a transaction. Interchange fees vary for cash withdrawals, balance inquiries, account transfers or uncompleted transactions, which are the primary types of transactions that are currently processed on ATMs in our network. The maximum amount of the interchange fees is established by the national and regional card organizations and credit card issuers with whom we have a relationship. We receive interchange fees for transactions on ATMs that we own, but sometimes we rebate a portion of the fee to the owner of the ATM location under the applicable lease for the ATM site. We also receive the interchange fee for transactions on ATMs owned by third party vendors included within our network, but we rebate all or a portion of each fee to the third party vendor based upon negotiations between us. The interchange fees received by us vary from network to network and, to some extent, from issuer to issuer, but generally range from $0.14 to $0.70 per cash withdrawal. Interchange fees for balance inquiries, account transfers and denied transactions are generally substantially less than fees for cash withdrawals. The interchange fees received by us from the card issuer are independent of the service fees charged by the card issuer to the cardholder in connection with ATM transactions. Service fees charged by card issuers to cardholders in connection with transactions through our network range from zero to $2.50 per transaction. We do not receive any portion of these service fees.

In most markets we impose a surcharge/convenience fee for cash withdrawals. Surcharge/convenience fees are a substantial additional source of revenue for us and other ATM network operators. The surcharge/convenience fee for most of the ATMs in our network ranges between $1.50 and $2.95 per withdrawal. The surcharge/convenience fee for other ATMs in our network ranges between $0.50 and $7.50 per withdrawal. We receive the full surcharge/convenience fee for cash withdrawal transactions on ATMs that we own, but often we rebate a portion of the fee to the owner of the ATM location under the applicable lease for the ATM site. We also receive the full surcharge/convenience fee for cash withdrawal transactions on ATMs owned by third party vendors included within our network, but we rebate all or a portion of each fee to the third party vendor based upon a variety of factors, including transaction volume and the party responsible for supplying vault cash to the ATM and only record earned revenues based upon the Company’s contracts with the third party vendors.

In addition to revenues derived from interchange and surcharge/convenience fees, we also derive revenues from providing network management services to third parties owning ATMs included in our ATM network. These services include 24 hour transaction processing, monitoring and notification of ATM status and cash condition, notification of ATM service interruptions, in some cases dispatch of field service personnel for necessary service calls and cash settlement and reporting services. The fees for these services are paid by the owners of the ATMs.

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Interchange fees are credited to us by networks and credit card issuers on a monthly basis and are paid to us in the following month between the 5th and 15th business day. Surcharge/convenience fees are charged to the cardholder and credited to us by networks and credit card issuers on a daily basis. We rebate a portion of these fees to ATM owners and owners of ATM locations as commission payments as per their contractual terms. Fees for network management services are generally paid to us on a monthly basis.

We compete in a fragmented industry; in which no one firm has a significant market share and can strongly influence the industry outcome. Our industry is populated by a large number of financial institutions and ISOs which deploy ATMs. Our industry is also characterized by essentially undifferentiated services.

There are underlying economic causes as to why our industry is fragmented. For example:

· Low overall entry barriers;

· Absence of national economies of scale;

· Seasonal and geographic volume fluctuations;

· The need for local presence in some market segments; and

· The need for low overhead.

Additionally, our industry is showing increasing signs of being an industry in decline. Reasons for this market decline include:

· Emergence of debit cards, “pay pass” machines and RFID as substitutes for cash in making purchases;

· Increasing acceptance of debit cards by younger demographics; and

· Market saturation of prime ATM locations in the United States.

Should the signs of industry decline come to fruition, it could negatively impact our results of operations by decreasing revenues and placing downward pressure on earnings. It could also make the availability of capital resources more difficult to obtain and could negatively impact our ability to more aggressively pay down debt, both of which could affect our results of operations.

The demand for our ATM services is primarily a function of population growth and new business creation to serve that population growth. New opportunities may exist:

· As our competitors seek to exit the business;

· As our competitors encounter financial and regulatory difficulties; and

· As financial institutions seek to reduce their costs of managing an ATM channel during a period of decreasing ATM usage.

Opportunities may also exist to leverage our existing customer base by selling additional products and services to them.

DVD Business Services

Nationwide Ntertainment Services, Inc., a wholly owned subsidiary of the Company formed during the fiscal year ended December 31, 2009, is engaged in the business of operating a network of DVD rental kiosks. We offer self-service DVD rentals through kiosks where consumers can rent or purchase movies or games. Our current DVD kiosks are installed primarily at military bases within the United States. Our DVD kiosks, through our brand InstaFlix, serve as a mini video rental store and occupy an area of less than ten square feet. Consumers use a touch screen to select their DVD, swipe a valid credit or debit card, and rent movies or games in some kiosks. The process is designed to be fast, efficient and fully automated with no upfront or membership fees.

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During March 2013, the Company informed The Exchange, its primary customer in the DVD business that the Company intends to sell its DVD business. In response to the Company’s request that The Exchange assign its contract when the appropriate time dictates. On March 26, 2013, the Company received notification from The Exchange that they are terminating its contract with the Company effective June 24, 2013. The Exchange contract accounts for nearly all of the Company’s revenue from its DVD business services.

Results of Operations

The following tables set forth certain consolidated statement of operations data as a percentage of revenues for the periods indicated. Percentages may not add due to rounding.

	For the Three Months Ended
	March 31, 2013			March 31, 2012
Revenues		100.0	%		100.0	%
Cost of revenues		76.1	%		67.9	%
Gross profit		23.9	%		32.1	%
Operating expenses
Depreciation expense		7.4	%		7.4	%
Amortization of intangible merchant contracts		4.5	%		3.9	%
Impairment of assets and long-lived assets		154.8	%		0.0	%
Selling, general and administrative		20.6	%		20.9	%
Stock compensation expense		0.4	%		0.2	%
Total operating expenses		187.7	%		32.5	%
Operating loss from operations before items shown below		(163.7	)%		(0.4	)%
Interest expense, net		(7.3	)%		(3.1	)%
Debt restructuring charges		(1.4	)%		0.0	%
Gain on sale of assets		0.0	%		0.2	%
Other non-operating expense, net		0.0	%		0.0	%
Income tax expense		(0.3	)%		(0.3	)%
Net loss		(172.7	)%		(3.5	)%
EBITDA (1)		(153.2	)%		11.2	%

(1) See “—EBITDA” sections in: “Comparison of Results of Operations for the Three Months Ended March 31, 2013 and 2012”.

Comparison of Results of Operations for the Three Months Ended March 31, 2013 and 2012:

Revenues

The Company reported total operating revenue from operations of $7,013,746 for the three-month period ended March 31, 2013 as compared to $8,296,300 for the three-month period ended March 31, 2012, a decrease of 15.5% year over year.

Revenue from our ATM services business decreased approximately 15.8% compared to the first quarter of 2012. We ended March 31, 2013 with 342 fewer ATMs than we ended with on March 31, 2012, and processed 10.6% fewer surcharge transactions in the first quarter of 2013 as compared to the first quarter of 2012. The decrease in surcharge transactions resulted in a decrease of approximately $590,000 of surcharge revenue year over year. A decrease in total transactions along with a decrease in interchange revenue paid to us by card networks occurring subsequent the first quarter of 2012 resulted in approximately $375,000 less interchange revenue year over year.

Revenue from our DVD services business decreased approximately $140,000 from the first quarter of 2012. This decrease was due to decreased rental activity year over year.

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Cost of Revenues

Our total cost of revenues from operations decreased from $5,636,808 to $5,334,119 for the three-month period ended March 31, 2012 to the three-month period ended March 31, 2013. The decrease was the result of approximately $225,000 of decreased cost of revenues related to our ATM business, and approximately $77,000 of decreased cost of revenues related to our DVD business. Cost of revenues in our ATM services business decreased mostly due to decreased revenues, partially offset by increased commission share resulting from renewals of new customer contracts. The decrease in cost of revenues from our DVD services business was a function of decreased DVD rental revenue along with lower DVD title amortization stemming from lower trailing twelve month purchasing volumes.

The principal components of cost of revenues in the ATM services business are retailer, merchant and distributor commissions (or revenue share), cost of cash, cash replenishment, ATM vault cash insurance, field maintenance, transaction processing charges, telecommunication costs and equipment costs on related equipment sales. The $225,000 decrease was mainly due to decreased revenues partially off-set by increased commissions (or revenue share) as a result of new terms in certain customer renewal agreements.

The principal components of cost of revenues in the DVD services business are retailer and merchant commissions (or revenue share), amortization of our DVD library, DVD replenishment, field maintenance, credit card processing charges and telecommunication costs. The decrease in cost of revenues from our DVD services business was a function of decreased DVD rental revenue along with lower DVD title amortization stemming from lower trailing twelve month purchasing volumes.

Gross Profit

Gross profit from operations as a percentage of revenue for the three-month periods ended March 31, 2013 and 2012 were approximately 23.9% or $1,679,627, and approximately 32.1%, or $2,659,492, respectively. The decreased gross profit for the first quarter of 2013 versus the same period in 2012 was mainly attributable to the margin compression for the ATM services business and the decreased rental revenue from DVD services discussed above.

Gross profit percentage in the ATM services business for the first quarter of 2013 was 24.9%, which is lower than the 33.7% gross profit for the same period in 2012. The decrease in gross profit percentage for the ATM services business was attributable to the margin compression discussed above.

Gross profit percentage in the DVD services business for the first quarter of 2013 was 17.5%, which is lower than the 21.2% gross profit for the same period in 2012. The decrease in gross profit percentage for the DVD services business was mainly attributable to fixed cost of revenues absorbed by decreased revenues for the period.

Operating Expenses

Our total operating expenses for the three months ended March 31, 2013 and 2012 were $13,162,084 and $2,694,197 respectively. The principal components of operating expenses are general and administrative expenses such as professional and legal fees, administrative salaries and benefits, consulting and audit fees, occupancy costs, sales and marketing expenses and administrative expenses. Operating expenses also include depreciation, amortization of intangible merchant contracts, impairment of assets and long lived assets and stock compensation expenses.

To aid in the understanding of our discussion and analysis of our operating expenses, the following table summarizes the amount and percentage change in the amounts from the previous year for certain operating expense line items:

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	For the Three Months Ended				2013 to 2012			2013 to 2012
	March 31, 2013		March 31, 2012		$ Change			% Change
Depreciation expense	$	518,230	$	615,185	$	(96,955	)		(15.8	)%
Amortization of intangible merchant contracts		316,033		326,844		(10,811	)		(3.3	)%
Impairment of assets and long-lived assets		10,858,155		-		10,858,155			100.0	%
Selling, general and administrative		1,444,839		1,734,973		(290,134	)		(16.7	)%
Stock compensation expense		24,827		17,195		7,632			44.4	%
Total operating expenses	$	13,162,084	$	2,694,197	$	10,467,887			388.5	%

See explanation of operating expenses below:

Depreciation Expense

Depreciation expense from operations decreased for the three-month period ended March 31, 2013 to $518,230 from $615,185 for the same period in 2012. This decrease in depreciation expense was mainly due to an impairment of Company owned DVD kiosks in the fourth quarter of 2012. (See Financial Statement Footnote #23 "Impairment of Long-Lived Assets" included in our Annual Report on Form 10-K for the year ended December 31, 2012 for more on this Impairment).

Amortization of Intangible Merchant Contracts

Amortization of intangible merchant contracts from operations decreased for the three-month period ended March 31, 2013 to $316,033 from $326,844 for the same period in 2012. The decrease was attributable to previously capitalized merchant contract costs becoming fully amortized during the fourth quarter of 2012 and during the first quarter of 2013.

Impairment of Assets and Long-lived Assets

During the first quarter of fiscal 2013, the Company determined that additional sufficient indicators of potential impairment existed to require an impairment analysis for the DVD business. Based on the analyses, the Company recorded an impairment charge of $997,726 on its DVD kiosks.

Since June 30, 2012, the Company’s market capitalization had decreased significantly. According to accounting literature, a significant decline in market capitalization is a triggering event which requires impairment analysis on the assets of the business.

Additionally, since the third quarter of 2012, the Company has been operating under several forbearance agreements with its senior lender, Fifth Third Bank (See Financial Footnote #4 “Senior Lenders’ Notes Payable” regarding the details of the agreement) due to the Company’s poor financial performance and negative cash flow. As such, during the first quarter of 2013, the Company determined that sufficient additional indicators of potential impairment existed to require a further impairment analysis for the ATM business.

The Company estimated the fair value of the assets in ATM business utilizing a combination of market multiple valuation metrics used in our industry, the present value of discounted cash flows, and analysis of most recent purchase offers by third-parties. Cash flow projections are based on management's estimates of revenue growth rates and operating margins, taking into consideration industry and market conditions. The market approach estimates fair value based on market multiples of revenue and earnings derived from comparable companies with similar operating and investment characteristics as the reporting unit.

Based on the Company’s analyses, the implied fair value of the ATM assets was lower than the carrying value of the ATM assets for the ATM business unit. As a result, the Company recorded an impairment charge of $9,860,429 during the first quarter of 2013.

Selling, General and Administrative (“SG&A”) Expenses

Our total SG&A expenses from operations decreased to $1,444,839, or 20.6% of revenue for the three-month period ended March 31, 2013 from $1,734,973 or 20.9% of revenue for the three-month period ended March 31, 2012. The decrease in SG&A expenses was mainly due to approximately $210,000 of decreased headcount, salary related, and director’s fees expense, as well as another $80,000 reduction in other miscellaneous SG&A expenses

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Stock Compensation Expense

For the three months ended March 31, 2013, we recorded stock compensation expense of $24,827, mainly relating to executive and director stock option grants during fiscal years 2007 through 2012. For the three months ended March 31, 2012, we recorded stock compensation expense of $17,195.

Interest Expense, Net

Interest expense, net, increased for the three-month period ended March 31, 2013 to $511,286 from $254,596 for the three-month period ended March 31, 2012. The increase was mainly due to default interest, late payment interest and payment in kind interest accrued in the first quarter of 2013, in association with the Forbearance Agreement and the Second Forbearance Agreement entered into with Fifth Third, along with increased debt balances year over year. (See Financial Footnote #4 “Senior Lenders’ Notes Payable” regarding the details of the debt balances).

Debt Restructuring Charges

During the three-month period ended March 31, 2013, the Company incurred debt restructuring expenses of $97,868. These expenses include legal expenses, as well as fees for consultants the company was required to hire as a condition of the bank forbearance agreements.

Gain on Sale of Assets

During the three-month period ended March 31, 2012, the Company recorded a gain on the sale of assets of $20,493.

EBITDA

EBITDA (a non-GAAP measure) is defined as earnings before net interest, taxes, depreciation and amortization. EBITDA has some inherent limitations in measuring operating performance due to the exclusion of certain financial elements such as depreciation and is not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the method of calculation. Furthermore, EBITDA is not intended to be a substitute for cash flows from operating activities, as a measure of liquidity, or an alternative to net income in determining our operating performance in accordance with GAAP. Our use of EBITDA should be considered within the following context:

• We acknowledge that our depreciable assets are necessary to earn revenue based on our current business.

• Our use of EBITDA as a measure of operating performance is not based on our belief about the reasonableness of excluding depreciation when measuring financial performance.

• Our use of EBITDA is supported by the importance of EBITDA to the following key stakeholders:

• Analysts — who estimate our projected EBITDA and other EBITDA-based metrics in their independently developed financial models for investors;

• Creditors — who evaluate our operating performance based on compliance with certain EBITDA-based debt covenants;

• Investment Bankers — who use EBITDA and other EBITDA-based metrics in their written evaluations and comparisons of companies within our industry; and

• Board of Directors and Executive Management — who use EBITDA as an essential metric for evaluating management performance relative to our operating budget and bank covenant compliance, as well as our ability to service debt and raise capital for growth opportunities which are a critical component to our strategy.

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The following table sets forth a reconciliation of net loss to EBITDA from operations for the three months ended March 31, 2013 and 2012:

	For the Three Months Ended
	March 31, 2013			March 31, 2012
Net loss	$	(12,110,611	)	$	(291,308	)
Income tax expense		19,000			22,500
Interest expense, net		511,286			254,596
Depreciation expense		518,230			615,185
Amortization of intangible merchant contracts		316,033			326,844
EBITDA from operations	$	(10,746,062	)	$	927,817

Our EBITDA from operations decreased to ($10,746,062) for the first quarter of fiscal 2013 from $927,817 for the first quarter of fiscal 2012. The decrease was primarily due to margin compression in the ATM business stemming from increased commissions paid to our customers, reduction in interchange paid by card networks occurring subsequent to the first quarter of 2012 and lower machine count year over year. Additionally, we recorded impairment of assets charges of $9,860,249 relating to our ATM business and $997,726 relating to our DVD business.

The following table sets forth a reconciliation of net loss to EBITDA from operations before impairment of assets and long-lived assets, debt restructuring charges, stock compensation expense, and (gain) loss on sale of assets (“Adjusted EBITDA”) for the three months ended March 31, 2013 and 2012:

	For the Three Months Ended
	March 31, 2013			March 31, 2012
Net loss	$	(12,110,611	)	$	(291,308	)
Income tax expense		19,000			22,500
Interest expense, net		511,286			254,596
Depreciation expense		518,230			615,185
Amortization of intangible merchant contracts		316,033			326,844
Impairment of assets and long-lived assets		10,858,155			-
Debt restructuring charges		97,868			-
Stock compensation expense		24,827			17,195
Gain on sale of assets		-			(20,493	)
Adjusted EBITDA from operations	$	234,788		$	924,519

Our Adjusted EBITDA decreased to $234,788 for the first quarter of fiscal 2013 from $924,519 for the first quarter of fiscal 2012. Adjusted EBITDA as a percentage of revenues decreased to 3.3% for the first quarter of fiscal 2013 from 11.1% for the first quarter of fiscal 2012. The decrease was primarily due to margin compression in the ATM business stemming from increased commissions paid to our customers, reduction in interchange paid by card networks occurring subsequent to the first quarter of 2012 and lower machine count year over year.

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Seasonality – ATM Services

We have traditionally experienced higher transaction volumes per machine in the second and third quarters than in the first and fourth quarters. The increased volumes in the summer months coincide with increased vacation travel in the United States.

Seasonality – DVD Services

Through our limited operating history in DVD Services, we have experienced seasonality in our revenue from our DVD Services segment. The summer months have historically been high rental months for our DVD Services segment followed by lower revenue in September and October, due in part to the beginning of the school year and the introduction of the new television season. We expect our lowest quarterly revenue for the DVD services business in the first quarter and our highest quarterly revenue and earnings in the second and third quarters.

Liquidity and Capital Resources

Financial Condition

	For the Three Months Ended						2013 to 2012			2013 to 2012
	March 31, 2013			March 31, 2012			$ Change			% Change
Net cash provided by (used in) operating activities	$	(211,368	)	$	1,261,356		$	(1,472,724	)		(116.8	)%
Net cash used in investing activities		(55,787	)		(1,799,947	)		1,744,160			96.9	%
Net cash provided by (used in) financing activities		580,285			302,451			277,834			91.9	%
Increase (decrease) in cash	$	313,130		$	(236,140	)	$	549,270

Operating Activities

During the first three months of 2013 net cash used in operating activities amounted to $211,368. Net cash provided by operating activities amounted to $1,261,356 during the first three months of 2012. This decrease was primarily the result of lower margin contributed by the ATM business.

Investing Activities

Net cash used in investing activities from operations for the first three months of 2013 was $55,787. This compares to net cash used in investing activities of $1,799,947 for the three-month period ended March 31, 2012. The decrease in cash used in investing activities year over year was mainly due to a decrease of cash paid for acquisitions of $1,000,000 from the first three months of 2012 compared to the first three months of 2013.

Financing Activities

Net cash provided by financing activities was $580,285 during the first three months of 2013. This was due to $700,000 of new borrowings offset by net pay down of capital leases. See Financial Footnote #4 “Senior Lenders’ Notes Payable” for more detail on these new borrowings. This compared to funds provided by financing activities of $302,451 for the same period in fiscal 2012.

Working Capital

As of March 31, 2013, the Company had current assets of $2,128,431 and current liabilities of $19,207,013, which results in negative working capital of $17,078,582. This compares to a working capital deficit of $16,340,167 that existed at December 31, 2012.

The Company’s existence is dependent upon management’s ability to develop profitable operations and to obtain additional funding sources. There can be no assurance that the Company’s financing efforts will result in profitable operations or the resolution of the Company’s liquidity problems. If these efforts are unsuccessful, the Company may be forced to seek relief through a filing under the U.S. Bankruptcy Code, which could result in the total loss of shareholders’ investments in the Company.

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The accompanying condensed consolidated statements do not include any adjustments that might result should the Company be unable to continue as a going concern. The Company’s intent is to follow the terms and conditions stated in the Forbearance Agreement, the Second Forbearance Agreement (See Financial Footnote #4 “Senior Lenders’ Notes Payable”)) and the Third Forbearance Agreement (See Financial Footnote #14 “Subsequent Events”) entered into with Fifth Third Bank.

Significant Changes in Balance Sheet Accounts

As of March 31, 2013, cash and cash equivalents increased $313,130 to $419,348 from the December 31, 2012 balance of $106,218. The increase was primarily due to increased revolving drawdown on the $1.5 million revolving facility.

As of March 31, 2013, inventory, net decreased $453,385 to $707,090 from the December 31, 2012 balance of $1,160,475. The majority of the decrease was the result of impairment charges of $241,047 recorded on the Company’s DVD kiosks stored in the Company’s warehouse.

As of March 31, 2013, fixed assets, net decreased $999,872 to $6,868,072 from the December 31, 2012 balance of $7,867,944. The majority of the decrease was the result of impairment charges of $756,659 recorded on the Company’s DVD kiosks.

Additional Funding Sources

The Company does not use its own funds for vault cash, but rather relies upon third party sources. The Company, in general, rents the vault cash from financial institutions and pays a negotiated interest rate for the use of the money. The vault cash is never in the possession of, controlled or directed by the Company, but, rather, cycles from the bank to the armored car carrier and to the ATM. Each day’s withdrawals are settled back to the owner of the vault cash on the next business day. Both Nationwide and its customers (the merchants) sign a document stating that the vault cash belongs to the financial institution and that neither party has any legal rights to the funds. The required vault cash is obtained under the following arrangements:

· Wilmington Savings Fund Society (“WSFS”). Beginning in September 2004, the Company began an arrangement with Wilmington Savings Fund Society allowing us to obtain up to $20,000,000 in vault cash. The WSFS contract may be terminated by WSFS at any time upon breach by us and upon the occurrence of certain other events. The contract currently in place with WSFS expires on October 31, 2012, with a one year automatic renewal period unless one party gives 60 days’ notice of their intention not to renew. As of March 31, 2013, the Company had 237 ATMs funded by WSFS with a vault cash outstanding balance of approximately $10,552,000 in connection with this arrangement.

· Elan. On September 1, 2011, we entered into an amendment to our Cash Provisioning Agreement (through our sub-agreements with vault cash carriers) with Élan allowing us to obtain up to $100,000,000 in vault cash. The Élan contract may be terminated by Élan at any time upon breach by us and upon the occurrence of certain other events. As of March 31, 2013, the Company had 1,756 ATMs funded by Élan with a vault cash outstanding balance of approximately $45,124,908.

· Various Branded Cash Partners. Nationwide has partnered with numerous banks and credit unions to market specific Nationwide ATMs to the cardholders of these institutions. We add signage and marketing material to the ATM so that the ATM is easily identified as being associated with the bank or credit union, and the cardholders of these institutions receive surcharge free transactions at the designated ATMs. This provides the bank or credit union additional marketing power and another point of access to funds for their cardholders. In return for this benefit, the bank or credit union, provides and manages the vault cash in the specified ATM(s), as well as provides and pays for cash replenishment and first line maintenance. The advantage to Nationwide is that this reduces the costs associated with vault cash, cash replenishment and first line maintenance by approximately 50%. Another advantage is that with a branded ATM, transaction volumes traditionally increase more than at non-branded ATMs. As of March 31, 2013, the Company had 41 branded financial partners, which funded 310 ATMs.

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Impact of Inflation and Changing Prices

We were not impacted by inflation during the past two fiscal years in any material respect. Interest rate decreases have decreased the rental cost of our vault cash. As the interest rates increase and vault cash costs increase, this will have an unfavorable impact on the Company’s results of operations.

ITEM 3. Quantitative and Qualitative Disclosure About Market Risk.

Not applicable.

ITEM 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this report, we have carried out an evaluation of the effectiveness of the design and operation of our Company’s disclosure controls and procedures. Under the direction of our Chief Executive Officer and our Interim Chief Financial Officer, we evaluated our disclosure controls and procedures and internal control over financial reporting and concluded that our disclosure controls and procedures were effective as of March 31, 2013.

Disclosure controls and procedures and other procedures are designed to ensure that information required to be disclosed in our reports or submitted under the Exchange Act is recorded, processed, summarized and reported within the time period specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes to internal controls over financial reporting that occurred during the three months ended March 31, 2013 that have materially affected, or are reasonably likely to materially impact, our internal controls over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. Legal Proceedings.

Information regarding legal proceedings is contained in Financial Footnote #6 (“Litigation and Claims”) to the Condensed Consolidated Financial Statements contained in this report and is incorporated herein by reference.

ITEM 1A. Risk Factors.

None.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

ITEM 3. Defaults Upon Senior Securities

None.

ITEM 4. Mine Safety Disclosures

Not applicable.

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ITEM 5. Other Information

None.

ITEM 6. Exhibits

Exhibit
Number	Description
3.1	Articles of Incorporation - Restated and Amended May 30, 2001 (Incorporated by reference to Form 10KSB, filed with the SEC on March 31, 2003).
3.2	By-Laws of Global Axcess Corp - As Amended and Restated (Incorporated by reference to Form 8-K, filed with the SEC on April 6, 2010).
3.3	Amendment to the Articles of Incorporation (Incorporated by reference to Form 10-K/A, filed with the SEC on January 28, 2011).
31.1	Certification of the Chief Executive Officer of Global Axcess Corp pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2	Certification of the Interim Chief Financial Officer and Interim Chief Accounting Officer of Global Axcess Corp pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1	Certification of the Chief Executive Officer of Global Axcess Corp pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
32.2	Certification of the Interim Chief Financial Officer and Interim Chief Accounting Officer of Global Axcess Corp pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
101.INS	XBRL Instance Document.*^
101.SCH	XBRL Taxonomy Extension Schema Document.*^
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.*^
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.*^
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.*^
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.*^

*Filed herewith.

^In accordance with Regulation S-T, XBRL (Extensible Business Reporting Language) related information in Exhibit No. (101) to this Quarterly Report on Form 10-Q shall be deemed “furnished” and not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any registration statement pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific preference in such filing.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as of May 15, 2013, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

GLOBAL AXCESS CORP

By: /s/ Kevin L. Reager

Kevin L. Reager

Chief Executive Officer

(principal executive officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on the 15th day of May, 2013.

Signature	Title
/S/Kevin L. Reager	Chief Executive Officer
Kevin L. Reager	(principal executive officer)
/S/ Michael J. Loiacono	Interim Chief Financial Officer and Interim Chief Accounting Officer
Michael J. Loiacono	(interim principal financial officer and interim principal accounting officer)

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EXHIBIT INDEX

Exhibit
Number	Description
3.1	Articles of Incorporation - Restated and Amended May 30, 2001 (Incorporated by reference to Form 10KSB, filed with the SEC on March 31, 2003).
3.2	By-Laws of Global Axcess Corp - As Amended and Restated (Incorporated by reference to Form 8-K, filed with the SEC on April 6, 2010).
3.3	Amendment to the Articles of Incorporation (Incorporated by reference to Form 10-K/A, filed with the SEC on January 28, 2011).
31.1	Certification of the Chief Executive Officer of Global Axcess Corp pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2	Certification of the Interim Chief Financial Officer and Interim Chief Accounting Officer of Global Axcess Corp pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1	Certification of the Chief Executive Officer of Global Axcess Corp pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
32.2	Certification of the Interim Chief Financial Officer and Interim Chief Accounting Officer of Global Axcess Corp pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
101.INS	XBRL Instance Document.*^
101.SCH	XBRL Taxonomy Extension Schema Document.*^
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.*^
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.*^
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.*^
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.*^

*Filed herewith.

^In accordance with Regulation S-T, XBRL (Extensible Business Reporting Language) related information in Exhibit No. (101) to this Quarterly Report on Form 10-Q shall be deemed “furnished” and not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any registration statement pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific preference in such filing.

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