GLOBAL AXCESS CORP - FORM 10-Q/A

Attached files

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EXCEL - IDEA: XBRL DOCUMENT - GLOBAL AXCESS CORP	Financial_Report.xls
EX-31.2 - CERTIFICATION - GLOBAL AXCESS CORP	v241303_ex31-2.htm
EX-32.1 - CERTIFICATION - GLOBAL AXCESS CORP	v241303_ex32-1.htm
EX-32.2 - CERTIFICATION - GLOBAL AXCESS CORP	v241303_ex32-2.htm
EX-31.1 - CERTIFICATION - GLOBAL AXCESS CORP	v241303_ex31-1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

(Amendment No. 1)

(MARK ONE)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended September 30, 2011.

o 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 November 23rd, 2011, the registrant had 22,702,977 shares outstanding of the common stock ($0.001 par value).

EXPLANATORY NOTE

This Form 10-Q/A amends Global Axcess Corp.’s (the “Company”) Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2011 (the “Original 10-Q”) filed with the Securities and Exchange Commission (the “SEC”) on November 14, 2011, to clarify certain prior disclosures. This Form 10-Q/A contains changes to Part I—Item 1 (Financial Statements (unaudited)). Certain tables contained in the footnotes to the financial statements contained information that was subject to rounding and other inadvertent minor errors. The information which has been corrected is as follows (with page numbers referring to the Original 10-Q):

Page 10 – ATM Operating revenue (Nine Months) has been amended from 18,379,239 to 18,379,238.

Page 11 – Cost of ATM Operating revenue (Three Months) has been amended from 3,542,894 to 3,542,893.

Page 11 – Cost of ATM Operating revenue (Nine Months) has been amended from 10,394,854 to 10,394,853.

Page 12 – Intangible Assets – Goodwill and Merchant Contracts Table has been amended in the following manner:

Other Intangible Assets Gross Carrying Value: amended from 89,701 to 330,293.

Other Intangible Assets Accumulated Amortization: amended from 15,149 to 81,059.

Other Intangible Assets Net: amended from 74,552 to 249,234.

Merchant contracts Gross Carrying Value: amended from 14,818,294 to 17,146,252.

Merchant contracts Accumulated Amortization: amended from 4,152,681 to 5,761,995.

Merchant contracts Net: amended from 10,665,613 to 11,384,257.

Pursuant to SEC rules, the entirety of Part I—Item 1 has been reproduced below.

In accordance with SEC rules, and pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, currently dated certifications of the Company’s principal executive officer and principal financial officer are attached to this Form 10-Q/A as Exhibits 31.1, 31.2, 32.1 and 32.2.

This Form 10-Q/A also furnishes Exhibit 101 in accordance with Rule 405 of Regulation S-T. Exhibit 101 to this report provides the consolidated financial statements and related notes from the Original Form 10-Q formatted in XBRL (eXtensible Business Reporting Language). The XBRL data in Exhibit 101 has been amended to reflect the changes to the tables described above.

The exhibit list and exhibit index to the Original Form 10-Q have been reproduced below, and are updated to reflect the filing and furnishing herewith of Exhibits 31.1, 31.2, 32.1, 32.2 and 101.

Except for the foregoing amended information, the Company has not updated the disclosures contained in the Original 10-Q to reflect events that have occurred subsequent to the filing date of the Original 10-Q. Accordingly, this Form 10-Q/A should be read in conjunction with the Original 10-Q and our subsequent filings with the SEC.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

GLOBAL AXCESS CORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	(Unaudited)			(Audited)
	September 30, 2011			December 31, 2010
ASSETS
Current assets
Cash and cash equivalents	$	1,532,242		$	1,743,562
Accounts receivable, net of allowance of $2,770 in 2011 and $4,354 in 2010		884,200			410,956
Inventory, net of allowance for obsolescence of $182,572 in 2011 and 2010		1,512,936			1,389,606
Deferred tax asset - current		363,926			363,926
Prepaid expenses and other current assets		178,689			139,551
Total current assets		4,471,993			4,047,601

Fixed assets, net		9,738,021			9,581,561

Other assets
Merchant contracts, net		11,384,257			10,879,029
Intangible assets, net		4,270,593			4,219,216
Deferred tax asset - non-current		1,611,285			1,611,285
Other assets		95,134			66,807

Total assets	$	31,571,283		$	30,405,499

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities	$	4,985,473		$	4,604,837
Notes payable - related parties - current portion, net		32,226			29,740
Notes payable - current portion		23,268			21,777
Senior lenders' notes payable - current portion, net		4,302,874			2,426,915
Capital lease obligations - current portion		273,824			455,188
Total current liabilities		9,617,665			7,538,457

Long-term liabilities
Interest rate swap contract		585,743			-
Notes payable - related parties - long-term portion, net		19,692			43,694
Notes payable - long-term portion		33,924			51,476
Senior lenders' notes payable - long-term portion, net		7,446,248			6,622,539
Capital lease obligations - long-term portion		44,252			205,275
Total liabilities		17,747,524			14,461,441

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, 23,115,788 and 22,292,469 shares issued and 22,675,326 and 22,139,444 shares outstanding at September 30, 2011 and December 31, 2010, respectively		22,725			22,188
Additional paid-in capital		23,557,119			23,202,338
Accumulated other comprehensive loss		(585,743	)		-
Accumulated deficit		(8,949,831	)		(7,198,502	)
Treasury stock; 440,462 and 153,025 shares of common stock at cost at September 30, 2011 and December 31, 2010, respectively		(220,511	)		(81,966	)
Total stockholders' equity		13,823,759			15,944,058
Total liabilities and stockholders' equity	$	31,571,283		$	30,405,499

See Accompanying Notes to Condensed Consolidated Financial Statements

GLOBAL AXCESS CORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	For the Three Months Ended
	September 30, 2011			September 30, 2010

Revenues	$	8,055,922		$	5,779,313

Cost of revenues		4,952,102			3,473,994
Gross profit		3,103,820			2,305,319

Operating expenses
Depreciation expense		508,697			382,160
Amortization of intangible merchant contracts		299,872			207,665
Impairment of assets		1,085,194			-
Selling, general and administrative		1,955,074			1,619,125
Restructuring charges		421,046			-
Stock compensation expense		34,719			54,288
Total operating expenses		4,304,602			2,263,238
Operating income (loss) from operations before items shown below		(1,200,782	)		42,081

Interest expense, net		(194,052	)		(137,915	)
Gain on sale of assets		4,000			-
Net loss	$	(1,390,834	)	$	(95,834	)

Loss per common share - basic:
Net loss per common share	$	(0.06	)	$	0.00

Loss per common share - diluted:
Net loss per common share	$	(0.06	)	$	0.00

Weighted average common shares outstanding:
Basic		22,620,543			21,954,030
Diluted		22,620,543			21,954,030

See Accompanying Notes to Condensed Consolidated Financial Statements

GLOBAL AXCESS CORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	For the Nine Months Ended
	September 30, 2011			September 30, 2010

Revenues	$	24,299,736		$	16,666,296

Cost of revenues		15,060,478			9,328,022
Gross profit		9,239,258			7,338,274

Operating expenses
Depreciation expense		1,656,211			1,013,260
Amortization of intangible merchant contracts		879,530			606,329
Impairment of assets		1,085,194			-
Selling, general and administrative		5,773,587			4,747,697
Restructuring charges		933,307			-
Stock compensation expense		74,247			156,667
Total operating expenses		10,402,076			6,523,953
Operating income (loss) from operations before items shown below		(1,162,818	)		814,321

Interest expense, net		(543,552	)		(368,808	)
Gain on sale of assets		67,541			-
Other non-operating expense		(112,500	)		-
Loss on early extinguishment of debt		-			(102,146	)
Net income (loss)	$	(1,751,329	)	$	343,367

Income (loss) per common share - basic:
Net income (loss) per common share	$	(0.08	)	$	0.02

Income (loss) per common share - diluted:
Net income (loss) per common share	$	(0.08	)	$	0.01

Weighted average common shares outstanding:
Basic		22,491,025			21,930,267
Diluted		22,491,025			23,481,861

See Accompanying Notes to Condensed Consolidated Financial Statements

GLOBAL AXCESS CORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Nine Months Ended
	September 30, 2011			September 30, 2010

Cash flows from operating activities:
Income (loss) from operations	$	(1,751,329	)	$	343,367
Adjustments to reconcile net income (loss) from operations to net cash provided by operating activities:
Stock based compensation		74,247			156,667
Stock options issued to consultants in lieu of cash compensation		4,226			-
Loss on early extinguishment of debt		-			61,508
Depreciation expense		1,656,211			1,013,260
Amortization of intangible merchant contracts		879,530			606,329
Amortization of capitalized loan fees		56,355			25,250
Impairment of assets		1,085,194			-
Allowance for doubtful accounts		(20,563	)		12,824
Allowance for inventory obsolescence		-			(12,000	)
Gain on sale of assets		(67,541	)		-
Changes in operating assets and liabilities, net of effects of acquisition of Tejas:
Change in accounts receivable, net		(452,681	)		538
Change in inventory, net		(1,543,162	)		(722,804	)
Change in prepaid expenses and other current assets		(39,138	)		(70,866	)
Change in other assets		(28,327	)		(42,500	)
Change in intangible assets, net		(107,732	)		(157,587	)
Change in accounts payable and accrued liabilities		380,636			976,747
Net cash provided by operating activities		125,926			2,190,733

Cash flows from investing activities:
Cash paid for Tejas acquisition		(1,375,000	)		-
Proceeds from sale of fixed assets		122,500			-
Costs of acquiring merchant contracts		(18,074	)		(131,574	)
Purchase of fixed assets		(1,418,676	)		(4,459,354	)
Net cash used in investing activities		(2,689,250	)		(4,590,928	)

Cash flows from financing activities:
Proceeds from issuance of common stock		32,300			2,249
Proceeds from senior lenders' notes payable		4,895,280			8,083,407
Proceeds from notes payable		-			710,533
Change in restricted cash		-			800,000
Principal payments on senior lenders' notes payable		(2,195,612	)		(5,578,634	)
Principal payments on notes payable		(16,061	)		(725,102	)
Principal payments on notes payable - related parties		(21,516	)		(19,203	)
Principal payments on capital lease obligations		(342,387	)		(595,625	)
Net cash provided by financing activities		2,352,004			2,677,625
Increase (decrease) in cash and cash equivalents		(211,320	)		277,430
Cash and cash equivalents, beginning of period		1,743,562			2,007,860
Cash and cash equivalents, end of the period	$	1,532,242		$	2,285,290

Cash paid for interest	$	507,853		$	345,942

See Accompanying Notes to Condensed Consolidated Financial Statements

Supplemental schedule of non-cash investing and financing activities:

	For the Nine Months Ended
SUPPLEMENTAL CASH FLOW INFORMATION	September 30, 2011			September 30, 2010

The significant non-cash investing and financing activities of the Company were as follows:

Operating activities:
Net transfer of de-installed net fixed assets (to) from inventory	$	(423,554	)	$	(60,604	)
Fair value adjustment on swap agreement with senior lender		(585,743	)		-
Total non-cash operating activities	$	(1,009,297	)	$	(60,604	)

Investing activities:
Purchase of assets under capital lease obligations	$	-		$	260,684
Net transfer of de-installed net fixed assets to (from) inventory		423,554			60,604
Total non-cash investing activities	$	423,554		$	321,288

Acquisition of assets of Tejas:
Computer equipment	$	25,400		$	-
DVD inventory		88,916			-
Merchant contracts		1,366,684			-
Assets acquired		1,481,000			-
Common stock issued, subject to restrictions		(106,000	)		-
Cash paid for Tejas acquisition	$	1,375,000		$	-

Financing activities:
Settlement of stock option exercises through issuance of treasury stock:
Repurchase of treasury stock, 287,437 and 105,163 shares of common stock at cost for the nine month periods ended September 30, 2011 and 2010, respectively	$	(138,545	)	$	(70,000	)
Total non-cash financing activities	$	(138,545	)	$	(70,000	)

See Accompanying Notes to Condensed Consolidated Financial Statements

GLOBAL AXCESS CORP AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2011

(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, 2010 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 September 30, 2011 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 5,300 ATMs and DVD kiosks in its national network spanning 43 states.

Reclassifications

Certain amounts in the 2010 condensed consolidated financial statements have been reclassified to conform to the 2011 presentation. Such reclassifications had no effect on the net income or stockholders’ equity as previously reported.

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 and nine-month periods ended September 30, 2011 and 2010:

Revenues:

	For the Three Months Ended
	September 30, 2011		September 30, 2010

ATM Surcharge / Convenience Fee revenue	$	4,161,954	$	3,156,113
ATM Interchange revenue		1,748,940		1,717,123
ATM Processing revenue		45,615		43,644
ATM Sales revenue		95,823		139,439
Other ATM revenue		316,907		363,889
DVD Rental revenue		1,686,683		359,105
Total revenue	$	8,055,922	$	5,779,313

	For the Three Months Ended
	September 30, 2011		September 30, 2010

ATM Operating revenue	$	6,273,416	$	5,280,769
ATM Sales revenue		95,823		139,439
DVD Operating revenue		1,686,683		359,105
Total revenue	$	8,055,922	$	5,779,313

	For the Nine Months Ended
	September 30, 2011		September 30, 2010

ATM Surcharge / Convenience Fee revenue	$	12,049,106	$	9,428,929
ATM Interchange revenue		5,188,350		5,319,653
ATM Processing revenue		136,500		131,795
ATM Sales revenue		231,287		279,049
Other ATM revenue		1,005,282		1,044,950
DVD Rental revenue		5,689,211		461,920
Total revenue	$	24,299,736	$	16,666,296

	For the Nine Months Ended
	September 30, 2011		September 30, 2010

ATM Operating revenue	$	18,379,238	$	15,925,327
ATM Sales revenue		231,287		279,049
DVD Operating revenue		5,689,211		461,920
Total revenue	$	24,299,736	$	16,666,296

Cost of Revenues:

	For the Three Months Ended
	September 30, 2011		September 30, 2010

ATM Merchant residual / commission costs	$	2,062,588	$	1,609,109
ATM Cost of cash		661,208		570,377
ATM Processing costs		287,026		282,849
ATM Communication costs		101,724		130,759
ATM Sales costs		79,612		144,777
Other ATM cost of revenues		430,347		309,265
DVD operating costs		1,329,597		426,858
Total cost of revenues	$	4,952,102	$	3,473,994

	For the Three Months Ended
	September 30, 2011		September 30, 2010

Cost of ATM Operating revenue	$	3,542,893	$	2,902,359
ATM Sales costs		79,612		144,777
Cost of DVD Operating revenue		1,329,597		426,858
Total cost of revenues	$	4,952,102	$	3,473,994

	For the Nine Months Ended
	September 30, 2011		September 30, 2010

ATM Merchant residual / commission costs	$	5,984,544	$	4,701,863
ATM Cost of cash		2,016,700		1,663,471
ATM Processing costs		863,330		786,698
ATM Communication costs		304,382		429,836
ATM Sales costs		198,419		276,671
Other ATM cost of revenues		1,225,897		876,967
DVD operating costs		4,467,206		592,516
Total cost of revenues	$	15,060,478	$	9,328,022

	For the Nine Months Ended
	September 30, 2011		September 30, 2010

Cost of ATM Operating revenue	$	10,394,853	$	8,458,835
ATM Sales costs		198,419		276,671
Cost of DVD Operating revenue		4,467,206		592,516
Total cost of revenues	$	15,060,478	$	9,328,022

Inventory

The components of inventory for the periods ended September 30, 2011 and December 31, 2010, respectively, are as follows:

	September 30, 2011		December 31, 2010

ATM parts and supplies	$	180,981	$	127,495
Automated teller machines		277,862		202,482
DVD rental kiosks		566,496		222,942
DVD library		670,169		1,019,259
		1,695,508		1,572,178
Less: reserve for inventory obsolescence		182,572		182,572
Inventory, net	$	1,512,936	$	1,389,606

Intangible Assets – Goodwill and Merchant Contracts

The following table summarizes Intangible Assets and Merchant Contracts at September 30, 2011:

	Gross Carrying Value		Accumulated Amortization		Net

Goodwill	$	4,189,645	$	168,286	$	4,021,359
Other intangible assets		330,293		81,059		249,234
Merchant contracts		17,146,252		5,761,995		11,384,257
Total intangible assets, net and merchant contracts, net	$	21,666,190	$	6,011,340	$	15,654,850

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 September 30, 2011 there were stock options outstanding to acquire 1,875,876 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. Stock options to purchase 2,901,905 shares of common stock and stock warrants to purchase 165,000 shares of common stock that were outstanding at September 30, 2010 were not included in the computation of diluted earnings per share for the three months ended September 30, 2010 because the Company had a net loss from operations and the impact of the assumed exercise of the stock options and warrants is anti-dilutive.

	For the Three Months Ended
	September 30, 2011			September 30, 2010
Numerator
Loss from continuing operations	$	(1,390,834	)	$	(95,834	)

Numerator for diluted loss per share
available to common stockholders	$	(1,390,834	)	$	(95,834	)

Denominator
Weighted average shares		22,620,543			21,954,030
Effect of dilutive securities:
Treasury method, effect of employee stock options & warrants		-			-

Denominator for diluted loss per share adjusted weighted shares after assumed exercises		22,620,543			21,954,030

Loss per common share - basic:
Net loss per common share	$	(0.06	)	$	0.00

Loss per common share - diluted:
Net loss per common share	$	(0.06	)	$	0.00

	For the Nine Months Ended
	September 30, 2011			September 30, 2010
Numerator
Income (loss) from operations	$	(1,751,329	)	$	343,367

Numerator for diluted income (loss) per share available to common stockholders	$	(1,751,329	)	$	343,367

Denominator
Weighted average shares		22,491,025			21,930,267
Effect of dilutive securities:
Treasury method, effect of employee stock options & warrants		-			1,551,594

Denominator for diluted income (loss) per share adjusted weighted shares after assumed exercises		22,491,025			23,481,861

Income (loss) per common share - basic:
Net income (loss) per common share	$	(0.08	)	$	0.02

Income (loss) per common share - diluted:
Net income (loss) per common share	$	(0.08	)	$	0.01

Deferred Tax Asset

In accordance with Financial Accounting Standards Board (“FASB”) guidance, we use the liability method of accounting for income taxes. Significant management judgment is required in determining the provision for income taxes and, in particular, any valuation allowance that is recorded or released against our deferred tax assets.

We continue to evaluate quarterly the positive and negative evidence regarding the realization of net deferred tax assets. The carrying value of our net deferred tax assets is based on our belief that it is more likely than not that we will generate sufficient future taxable income to realize these deferred tax assets. A valuation allowance has been established for some of our net deferred tax asset as we do not believe it meets the “more likely than not” criteria. Our judgments regarding future taxable income may change due to changes in market conditions, changes in tax laws or other factors. If any of the assumptions and related estimates change in the future, it may increase or decrease the valuation allowance and related income tax expense in the same period.

During the fourth quarter of 2009, recurring annual profits for previous periods allowed the Company to determine that it was not in a cumulative loss position. Based on this positive evidence, we concluded that it was more likely than not that some of the Company’s net deferred tax asset would be realizable. As a result, a $1.1 million reduction in the net deferred tax valuation allowance was recorded in 2009. For purposes of assessing realizability of the deferred tax assets, a projected cumulative financial reporting loss position is considered significant negative evidence the Company will not be able to fully realize the deferred tax assets in the future. The Company reviews a rolling thirty-six month calculation of earnings to determine if the Company is in a cumulative loss position. As of September 30, 2011, the Company is not in a net cumulative loss position. Our judgments regarding future taxable income may change due to changes in market conditions, changes in tax laws, operating results or other factors.

Uncertain Income Tax Positions

In accordance with FASB guidance, we account for uncertainty in income taxes, using a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step requires us to estimate and measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. It is inherently difficult and subjective to estimate such amounts, as we have to determine the probability of various possible outcomes. We re-evaluate these uncertain tax positions on a quarterly basis. This evaluation is based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, effectively settled issues under audit, and new audit activity. Such a change in recognition and measurement would result in recognition of a tax benefit and/or an additional charge to the tax provision.

Recent Accounting Pronouncements

In September 2011, the FASB issued Accounting Standards Update (“ASU”) 2011-08, Intangibles—Goodwill and Other (Topic 350) allowing an entity the option to first perform a qualitative assessment to determine whether it is necessary to perform the traditional two-step goodwill impairment test to identify potential goodwill impairment and measure the amount of impairment loss to be recognized (if any). If, after performing the qualitative assessment, an entity concludes that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then no further impairment testing is necessary. The qualitative assessment includes assessing relevant events and circumstances such as macroeconomic conditions, industry and market conditions, cost factors, overall financial performance, relevant entity-specific events, events affecting a reporting unit or a sustained decrease in share price. The ASU is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011, with early adoption permitted.

3.	ACQUISITION OF ASSETS

Effective January 1, 2011, the Company acquired certain assets of Tejas Video Partners, LTD (“Tejas”), an owner and operator of unattended DVD rental kiosks. Under the terms of the agreement, the Company acquired the right, title, and interest in a merchant contract, DVD inventories and certain computer equipment for approximately $1,481,000. The purchase price consists of approximately $1,375,000 in cash (with $875,000 paid at closing and $500,000 paid on April 14, 2011) and $106,000 in shares of the Company’s common stock, subject to restrictions. In addition to the base purchase price, for a period of five years following the closing, the Company will pay an additional purchase price (“Earn-out”) to Tejas of $3,500 for each new DVD kiosk site that is (i) installed by the Company pursuant to an acquired customer agreement, and (ii) which site generates $2,000 or more of gross revenues for any calendar month (the “Earn-out Threshold”). The Earn-out will be paid by the Company on an annual basis, within forty-five days of each of the first five anniversaries following the closing. Each annual payment will be calculated based on newly installed kiosks that met the Earn-out Threshold during the twelve month period ending on the preceding anniversary of the closing.

The allocation of the purchase price is based upon estimates of the assets acquired in accordance with the relevant accounting guidance. The acquisition of Tejas is based on management’s consideration of past and expected future performance. The allocation of the aggregate purchase price of this acquisition is as follows:

Computer equipment	$	25,400
DVD inventory		88,916
Merchant contract		1,366,684
Assets acquired	$	1,481,000

The assets acquired in the Tejas acquisition serve as collateral for borrowings as discussed in Financial Footnote #5 “Senior Lenders’ Notes Payable.”

4.	ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities consisted of the following as of September 30, 2011 and December 31, 2010:

	September 30, 2011		December 31, 2010

Accounts payable	$	1,480,628	$	1,688,818
Accrued commissions/residual payments		1,479,596		1,216,266
Accrued cost of cash and cash replenishment expenses		442,049		303,027
Accrued payroll		294,734		204,086
Accrued severance		285,097		-
Accrued audit fees		76,625		84,500
Accrued interest		10,293		22,995
Accrued legal fees		-		54,056
Asset retirement obligation		87,902		88,074
Accrued taxes		280,869		226,336
Other		547,680		716,679
Accounts payable and accrued liabilities	$	4,985,473	$	4,604,837

5.	SENIOR LENDERS’ NOTES PAYABLE

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. As of September 30, 2011, the Company had drawn down a total of $5,646,231 against the Lease Agreement. $1,699,700 of the total draw down will be on an interim interest-only schedule.

The Company had $887,081 in new financing offset by $316,598 in principal payments on its draw loan facilities during the quarter ended September 30, 2011. Of the $887,081 in draws, $793,307 was derived from a new inventory draw facility. The company had $1,208,595 in new financing for equipment during the quarter ended September 30, 2011. The blended rate on all new financing during the quarter ended September 30, 2011, was 8.2%.

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

	September 30, 2011		December 31, 2010

Fifth Third Bank, term loan	$	2,916,668	$	4,166,668
Fifth Third Bank, equipment lease line		5,646,231		3,725,158
Fifth Third Bank, draw loan		1,067,058		824,567
Fifth Third Bank, draw loan #2		793,307		-
Fifth Third Bank, $1.65 million draw loan		1,325,858		333,061
		11,749,122		9,049,454
Less: current portion		4,302,874		2,426,915
Long-term portion, net of senior lenders' notes payable	$	7,446,248	$	6,622,539

As of September 30, 2011, the Company was not in compliance with its Debt Service Coverage covenant with Fifth Third Bank. The company obtained a waiver from Fifth Third with no attached fee. The blended interest rate on all components of senior lenders’ notes payable as of September 30, 2011 was 5.75%. As of September 30, 2011, the Company had $6,900,878 of available funds remaining on its senior lender’s notes payable.

6.	COMMITMENTS AND CONTINGENCIES

We lease ATMs and back office computer equipment under capital lease agreements that expire between 2011 and 2013. The average interest rate paid on these lease payments is 9.56% per annum. During the three-month period ended September 30, 2011, we did not enter into any new capital lease obligations. As of September 30, 2011, $318,076 of capital lease obligations were included in the Company’s condensed consolidated balance sheet.

7.	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.

8.	INCOME TAXES

The effective tax rates for the three months ended September 30, 2011 and 2010 were 0.0%. While there is no difference in the effective tax rate for the three months ended September 30, 2011 over the respective previous periods, the effective tax rates for the three months ended September 30, 2011 differs from our expected tax rates for the periods 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 September 30, 2011 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, 2010, the Company had net operating loss carryforwards remaining of approximately $23.6 million that may be offset against future taxable income through 2030.

At December 31, 2010, we had approximately $1,147,200 of total gross unrecognized tax benefits. Of this total, $1,147,200 (net of federal benefit on state tax issues) represents the amount of unrecognized tax benefits that, if recognized, would favorably affect the Company’s effective income tax rate in any future periods. There is no balance of gross unrecognized tax benefits at December 31, 2010 related to tax positions for which it is reasonably possible that the total amounts could significantly change during the next 12 months.

For the nine months ended September 30, 2011, there was no change in gross unrecognized tax benefits. Our total gross unrecognized tax benefit at September 30, 2011 was $1,147,200.

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 December 31, 2010. The total amount accrued for interest and penalties at September 30, 2011 was $0.

We are subject to the income tax jurisdiction of the U.S., as well as income tax of multiple state jurisdictions. We believe we are no longer subject to U.S. federal income tax examinations for years before 2007, to international examinations for years before 2006 and, with few exceptions, to state examinations before 2006.

9.	CHANGES IN STOCKHOLDERS' EQUITY

See the table below for all the equity transactions for the three-month period ended September 30, 2011:

										Accumulated
					Additional					Other			Total						Total
	Common Stock				Paid-in		Accumulated			Comprehensive			Comprehensive			Treasury			Stockholders'
	Shares		Amount		Capital		Deficit			Loss			Loss			Stock			Equity

Balances, June 30, 2011		22,575,326	$	22,625	$	23,493,474	$	(7,558,997	)	$	(244,515	)				$	(220,511	)	$	15,492,076

Stock compensation expense		-		-		34,719		-			-			-			-			34,719

Stock options exercised		100,000		100		24,700		-			-			-			-			24,800

Stock options issued to consultants in lieu of cash compensation		-		-		4,226					-			-			-			4,226

Other comprehensive loss		-		-		-		-			(341,228	)		(341,228	)		-			(341,228	)

Net loss		-		-		-		(1,390,834	)		-			(1,390,834	)		-			(1,390,834	)
														(1,732,062	)

Balances, September 30, 2011		22,675,326	$	22,725	$	23,557,119	$	(8,949,831	)	$	(585,743	)				$	(220,511	)	$	13,823,759

On April 12, 2011, the board of directors (the “Board”) of the Company made several determinations with respect to compensatory arrangements for certain named executive officers of the Company. Lock Ireland and Michael I. Connolly, both directors of the Company, are serving as interim co-Chief Executive Officers of the Company. In order to reward Mr. Ireland and Mr. Connolly for their service as officers of the Company, and to increase alignment to our multi-year strategic plans, the Board determined to grant certain performance-based stock options to these individuals. The performance based stock options were awarded under the terms of The Global Axcess Corp 2004 Stock Plan. Both Mr. Ireland and Mr. Connolly were each awarded 125,000 stock options as part of this grant, with an exercise price of $0.43.

The performance-based options are separated into two categories: (i) “operating performance-based options”, and (ii) “other performance based options”. The operating performance-based options represent 50% of the total award and are based on the Company’s achievement of certain specified financial targets. The other performance based options represent 50% of the total award and are based on the Company’s achievement of certain other operating goals designated by the Board.

The performance-based options vest in percentage tranches based on the following:

Operating Performance-Based Options (50% of total) – Based on the Company’s financial achievement against target plan. The achievement will be measured by the end of the most recent full quarter’s year-to-date (“YTD”) financial results in the quarter during the termination of their Co-CEO role:

Twenty percent (20%) for at or above YTD achievement of the Company’s revenue targets in the approved 2011 Business Plan.

Thirty percent (30%) for at or above YTD achievement of the Company’s earnings before interest, taxes, depreciation, and amortization (“EBITDA”) targets in the approved 2011 Business Plan.

Other Performance-Based Options (50% of total) – Based on other objectives specified by the Board (with partial achievement of each awarded as determined by the Board). Objectives must be achieved on or before December 31, 2011 or they expire.

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.

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 September 30, 2011
	Total		Level 1		Level 2		Level 3

Assets:
	$	-	$	-	$	-	$	-

Liabilities:
Liabilities associated with interest rate swaps	$	585,743	$	-	$	585,743	$	-

Interest rate swaps. The fair value of the Company's interest rate swaps was a liability of $585,743 as of September 30, 2011. 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. However, because the Company currently only utilizes 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. Accordingly, no ineffectiveness amounts associated with the Company's cash flow hedges have been recorded in the Company's consolidated financial statements. For derivative instruments not designated as hedging instruments, the gain or loss is recognized in the consolidated statements of operations.

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.

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 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 has been 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.

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 revenue, gross profit, SG&A, stock compensation expenses, depreciation and amortization, impairment of assets, restructuring charges, operating income (loss), net income (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 impairment of assets, restructuring charges, stock compensation expense, other non-operating expense, gain on sale of assets, and loss on early extinguishment of debt.

	For the Three Months Ended						For the Nine Months Ended
	September 30, 2011			September 30, 2010			September 30, 2011			September 30, 2010

Revenue:
ATM Services	$	6,369,239		$	5,420,208		$	18,610,525		$	16,204,376
DVD Services - The Exchange		1,084,734			-			3,257,209			-
DVD Services - Other		601,949			359,105			2,432,002			461,920
Corporate Support		-			-			-			-
Consolidated revenue	$	8,055,922		$	5,779,313		$	24,299,736		$	16,666,296

Gross profit:
ATM Services	$	2,746,734		$	2,373,072		$	8,017,308		$	7,468,870
DVD Services - The Exchange		324,391			-			1,329,786			-
DVD Services - Other		32,695			(67,753	)		(107,836	)		(130,596	)
Corporate Support		-			-			-			-
Consolidated gross profit	$	3,103,820		$	2,305,319		$	9,239,258		$	7,338,274

SG&A:
ATM Services	$	1,074,551		$	1,019,945		$	3,154,763		$	3,120,323
DVD Services - The Exchange		176,764			-			540,029			-
DVD Services - Other		189,316			285,953			763,490			600,972
Corporate Support		514,443			313,227			1,315,305			1,026,402
Consolidated SG&A	$	1,955,074		$	1,619,125		$	5,773,587		$	4,747,697

Stock compensation expense:
ATM Services	$	-		$	-		$	-		$	-
DVD Services - The Exchange		-			-			-			-
DVD Services - Other		-			-			-			-
Corporate Support		34,719			54,288			74,247			156,667
Consolidated stock compensation expense	$	34,719		$	54,288		$	74,247		$	156,667

Depreciation & Amortization:
ATM Services	$	484,325		$	420,378		$	1,445,432		$	1,250,510
DVD Services - The Exchange		87,581			-			173,189			-
DVD Services - Other		160,608			92,602			688,249			133,060
Corporate Support		76,055			76,845			228,871			236,019
Consolidated depreciation & amortization	$	808,569		$	589,825		$	2,535,741		$	1,619,589

Impairment of assets
ATM Services	$	-		$	-		$	-		$	-
DVD Services - The Exchange		-			-			-			-
DVD Services - Other		1,085,194			-			1,085,194			-
Corporate Support		-			-			-			-
Consolidated impairment of assets	$	1,085,194		$	-		$	1,085,194		$	-

Restructuring charges:
ATM Services	$	1,863		$	-		$	64,601		$	-
DVD Services - The Exchange		-			-			-			-
DVD Services - Other		419,183			-			419,183			-
Corporate Support		-			-			449,523			-
Consolidated restructuring charges	$	421,046		$	-		$	933,307		$	-

Operating income (loss):
ATM Services	$	1,185,995		$	932,749		$	3,352,512		$	3,098,038
DVD Services - The Exchange		60,046			-			616,568			-
DVD Services - Other		(1,821,606	)		(446,307	)		(3,063,952	)		(864,629	)
Corporate Support		(625,217	)		(444,361	)		(2,067,946	)		(1,419,088	)
Consolidated operating income (loss)	$	(1,200,782	)	$	42,081		$	(1,162,818	)	$	814,321

Net income (loss):
ATM Services	$	1,180,091		$	805,403		$	3,318,140		$	2,414,235
DVD Services - The Exchange		60,046			-			616,512			-
DVD Services - Other		(1,821,606	)		(446,308	)		(2,962,911	)		(864,628	)
Corporate Support		(809,365	)		(454,929	)		(2,723,070	)		(1,206,240	)
Consolidated net income (loss)	$	(1,390,834	)	$	(95,834	)	$	(1,751,329	)	$	343,367

Adjusted EBITDA:
ATM Services	$	1,672,183		$	1,353,127		$	4,862,600		$	4,348,547
DVD Services - The Exchange		147,627			-			789,702			-
DVD Services - Other		(156,621	)		(353,706	)		(871,326	)		(731,568	)
Corporate Support		(514,443	)		(313,227	)		(1,315,305	)		(1,026,402	)
Consolidated Adjusted EBITDA	$	1,148,746		$	686,194		$	3,465,671		$	2,590,577

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

	September 30,		December 31,
	2011		2010
Assets:
ATM Services	$	26,507,623	$	24,944,071
DVD Services		5,063,660		5,461,428
Consolidated assets	$	31,571,283	$	30,405,499

12.	IMPAIRMENT OF ASSETS

During the fiscal year 2011, the company removed DVD kiosks from store locations owned by a major customer. The largest wave of de-installs relating to these kiosks occurred during the third quarter, consisting of approximately 115 kiosks removed from store locations. Along with these idle kiosks in the warehouse, were the DVD titles associated with these machines.

In addition to these kiosk de-installations, the Company received notice from the same customer in the third quarter that it would have to remove all remaining kiosks in the fourth quarter of 2011, due to a cancellation of the Company’s contract with the customer. This cancellation was a result of the customer’s bankruptcy proceedings.

During the third quarter of 2011, the Company wrote down $1,085,194 of impaired DVD inventory. This impaired DVD inventory consisted of both DVD titles that were not being utilized due to the removal of the DVD kiosks from store locations, as well as a mark-to-market reduction in value of the DVDs located in the kiosks we anticipate will be removed during the fourth quarter of 2011, pursuant to the cancellation of the customer contract.

13.	RESTRUCTURING CHARGES

On February 28, 2011, the Company and George McQuain, the Company’s former Chief Executive Officer, agreed to a mutual separation of Mr. McQuain’s employment. As of February 28, 2011, Mr. McQuain is no longer employed as Chief Executive Officer, Director or in any other capacity, by the Company or any of its subsidiaries. The Company intends to pay Mr. McQuain the severance payments detailed in his Employment Agreement.

From February 2011 through September 2011 several other headcounts were reduced as part of a corporate restructuring. For the nine month period ended September 30, 2011, the Company recorded restructuring charges of $531,936 for severance-related expenses. As of September 30, 2011, the Company had accrued $285,097 for severance obligations included in accounts payable and accrued liabilities on the condensed consolidated balance sheet.

During the third quarter of 2011, the Company removed approximately 115 of its DVD rental kiosks from store locations of a major customer, and placed them into storage at a Company warehouse. While some of these kiosks were redeployed to other locations in the field, the majority remained in the warehouse at the end of the third quarter. The Company incurred $126,269 of costs associated with the de-installation and storage of the kiosks. Additionally, the Company received notice from the same customer in the third quarter that it would have to remove all remaining kiosks in the fourth quarter of 2011. This came as a result of cancellation of the Company’s contract with the customer pursuant to the customer’s bankruptcy proceedings. The Company accrued $100,000 total for the de-installation of these kiosks as well as the cost of redeploying other kiosks in the third quarter of 2011. The company wrote off $175,102 of un-amortized costs intangible costs relating to its contract with this customer.

The following table summarizes the restructuring charges recorded during the nine-month period ended September 30, 2011:

	For the Nine Months Ended
	September 30, 2011

Deinstallation Charges	$	226,269
Unamortized Intangible Write Off		175,102
Severance Related Charges		531,936
Total	$	933,307

14.	LOSS ON EARLY EXTINGUISHMENT OF DEBT

On June 18, 2010 the Company entered into the Loan Agreement with Fifth Third Bank. The proceeds were used to repay outstanding principal balances under loan agreements with two previous lenders.

In accordance with GAAP, the net carrying amount of the extinguished debt should be recognized currently in income of the period of extinguishment as losses or gains and identified as a separate item.

The following summarizes the amounts charged to loss on early extinguishment of debt for the nine-month period ended September 30, 2010:

	For the Nine Months Ended
Item description	September 30, 2010

Accelerated amortization of capitalized loan fees	$	61,508

Prepayment fees on debt settlement	$	40,638

Total loss on early extinguishment of debt	$	102,146

PART II – OTHER INFORMATION

ITEM 6. Exhibits

Exhibit		Description

3.1		Articles of Incorporation - Restated and Amended May 30, 2001 (Incorporated by reference to Form 10-KSB 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 Chief Financial 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 Chief Financial 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.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	GLOBAL AXCESS CORP.

Date: November 23, 2011	By:	/s/ Lock Ireland
	Lock Ireland
	Interim Co-Chief Executive Officer, Vice Chairman and Director
	(interim principal executive officer)

Date: November 23, 2011	By:	/s/ Michael J. Loiacono
	Michael J. Loiacono
	Chief Financial Officer and Chief Accounting Officer
	(principal financial officer and principal accounting officer)

EXHIBIT INDEX

Exhibit No.		Description

3.1		Articles of Incorporation - Restated and Amended May 30, 2001 (Incorporated by reference to Form 10-KSB 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 Chief Financial 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 Chief Financial 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.

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