UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2010

[ ]	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

For the transition period from ____________ to ______________

Commission file number: 000-49724

ACIES CORPORATION

(Name of registrant in its charter)

Nevada	7389	91-2079553
(State or jurisdiction	(Primary Standard	(IRS Employer Identification
of incorporation or	Industrial Classification	No.)
organization)	Code Number)

132 West 36th Street, 3rd Floor

New York, New York 10018

(Address of principal executive offices) (Zip Code)

(786) 923-0523

(Registrant's telephone number)

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 ¨ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, and accelerated filer, a non-accelerated filer, or a smaller reporting company. See the 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 the Exchange Act. Yes ¨ No x

As of August 23, 2010, the registrant had 1,238,051 shares of common stock, $0.001 par value per share, outstanding.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ACIES CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)

	June 30, 2010			March 31, 2010

ASSETS

CURRENT ASSETS
CASH	$	10,140		$	1,160
ACCOUNTS RECEIVABLE		427,854			412,829
TOTAL CURRENT ASSETS		437,994			413,989

FIXED ASSETS, NET OF ACCUMULATED DEPRECIATION OF $49,693 AND $48,193, RESPECTIVELY		4,715			6,215

TOTAL ASSETS	$	442,709		$	420,204

LIABILITIES AND SHAREHOLDERS' DEFICIT

CURRENT LIABILITIES
ACCOUNTS PAYABLE AND ACCRUED EXPENSES	$	747,871		$	1,135,334
ACCOUNTS PAYABLE - RELATED PARTY		720,532			328,492
NOTES PAYABLE, CURRENT PORTION		36,769			37,936
TOTAL CURRENT LIABILITIES		1,505,172			1,501,762

LONG TERM PORTION OF NOTES PAYABLE		-			3,424
TOTAL LIABILITIES		1,505,172			1,505,186

COMMITMENTS AND CONTINGENCIES		-			-

SHAREHOLDERS' DEFICIT
PREFERRED STOCK, SERIES A, $0.001 PAR VALUE, 5,000,000 SHARES AUTHORIZED, 1,000 SHARES ISSUED AND OUTSTANDING, RESPECTIVELY		1			1
COMMON STOCK, $0.001 PAR VALUE, 200,000,000 SHARES AUTHORIZED, 1,238,051 AND 1,216,168 SHARES ISSUED AND OUTSTANDING, RESPECTIVELY		1,238			1,216
ADDITIONAL PAID-IN CAPITAL		6,865,641			6,863,175
ACCUMULATED DEFICIT		(7,929,343	)		(7,949,374	)
TOTAL SHAREHOLDERS' DEFICIT		(1,062,463	)		(1,084,982	)

TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT	$	442,709		$	420,204

The accompanying notes are an integral part of these unaudited consolidated financial statements.

F-1

ACIES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2010 AND 2009
(Unaudited)

	2010			2009

REVENUES	$	1,016,007		$	1,353,359
COST OF REVENUES		895,048			1,063,080
GROSS MARGAIN		120,959			290,279

OPERATING EXPENSES:
GENERAL, ADMINISTRATIVE AND SELLING		99,487			191,004
TOTAL OPERATING EXPENSES		99,487			191,004

OPERATING INCOME		21,472			99,275

INTEREST EXPENSE		(1,441	)		(21,718	)

NET INCOME	$	20,031		$	77,557

NET INCOME PER SHARE
BASIC	$	0.02		$	0.10
DILUTED	$	0.01		$	0.10

WEIGHTED AVERAGE SHARES OUTSTANDING
BASIC		1,232,761			739,841
DILUTED		1,339,972			739,841

The accompanying notes are an integral part of these unaudited consolidated financial statements.

F-2

ACIES CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JUNE 30, 2010 AND 2009
(Unaudited)

	2010			2009

CASH FROM OPERATING ACTIVITIES
NET INCOME	$	20,031		$	77,557
ADJUSTMENTS TO RECONCILE NET INCOME TO CASH PROVIDED BY OPERATING ACTIVITIES:
STOCK-BASED COMPENSATION		2,488			-
DEPRECIATION EXPENSE		1,500			1,500
CHANGES IN CURRENT ASSETS AND LIABILITIES:
ACCOUNTS RECEIVABLE		(15,025	)		(17,596	)
ACCOUNTS PAYABLE AND ACCRUED EXPENSES		(387,463	)		(25,644	)
ACCOUNTS PAYABLE - RELATED PARTY		392,040			-
CASH PROVIDED BY OPERATING ACTIVITIES		13,571			35,817

CASH FROM FINANCING ACTIVITIES
REPAYMENT OF NOTES PAYABLE		(4,591	)		(79,837	)
CASH USED IN FINANCING ACTIVITIES		(4,591	)		(79,837	)

NET CHANGE IN CASH		8,980			(44,020	)
CASH, BEGINNING OF PERIOD		1,160			44,255
CASH, END OF PERIOD	$	10,140		$	235

SUPPLEMENTAL DISCLOSURES:
CASH PAID FOR INTEREST	$	1,441		$	5,638
CASH PAID FOR INCOME TAXES	$	-		$	-

NONCASH FINANCING ACTIVITIES:
FRACTIONAL SHARES ISSUED FOR STOCK SPLIT	$	22		$	-

The accompanying notes are an integral part of these unaudited consolidated financial statements.

F-3

ACIES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited interim financial statements of Acies Corporation ("Acies" or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC"), and should be read in conjunction with the audited financial statements and notes thereto contained in Acies' Annual Report filed with the SEC on Form 10-K for the year ended March 31, 2010. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the year ended March 31, 2010 as reported in the Form 10-K have been omitted. Our fiscal year ends on March 31. References to a fiscal year refer to the calendar year in which such fiscal year ends.

Summary of Significant Accounting Policies

The accounting policies of Acies are contained in the March 31, 2010 Form 10-K. The following are the more significant policies.

Revenue recognition

Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collectibility is reasonably assured. Substantially all of Acies’ revenue is derived from providing credit and debit card processing services, and it is recognized when the services are rendered. Revenue is deferred and recorded over the required service period if all revenue criteria have not been met when the fee is received. When a merchant has a business transaction for processing (e.g., purchases of goods or services for which payments are accepted using credit or debit cards), the amount that is discounted from the transaction amount prior to the merchant receiving net proceeds is the amount that Acies recognizes as revenue. Revenue is recognized on a gross basis (i.e., prior to deducting expenses paid to third parties for outsourced processing and settlement services), with such determination based on Acies’ review and interpretation of current accounting promulgations, including but not limited to Emerging Issues Task Force Memorandum 99-19 “Reporting Revenue Gross as Principal versus Net as an Agent” (“EITF 99-19” or ASC 605-45). The indicators of gross revenue reporting which led to our determination included, but were not limited to, the extent to which Acies has latitude in establishing price, our credit risk and our discretion in supplier selection. Any revenue relating to services to be performed in the future is deferred and recognized on a straight-line basis over the period during which the services will be performed.

Use of estimates

In preparing financial statements in conformity with generally accepted accounting principles, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Subsequent Events

Acies has evaluated all transactions through the financial statement issuance date for subsequent event disclosure consideration.

F-4

New Accounting Pronouncements

There were various accounting standards and interpretations issued recently, none of which are expected to have a material impact on our consolidated financial position, operations or cash flows.

NOTE 2 – GOING CONCERN

Acies has limited capital resources and has incurred significant historical losses and negative cash flows from operations. Acies believes that funds on hand combined with funds that will be available from its operations and existing financing will not be adequate to finance its operating requirements and its financial obligations under its notes payable for the next twelve months. Acies believes that it can secure additional capital through debt and/or equity financing. We do not, however, have any commitments or identified sources of additional capital from third parties or from our officers, directors or majority shareholders. There is no assurance that additional financing will be available on favorable terms, if at all. Failure of our operations to generate sufficient future cash flow and failure to raise additional financing could have a material adverse effect on Acies' ability to continue as a going concern and to achieve its business objectives. These conditions raise substantial doubt about Acies’ ability to continue as a going concern. The accompanying financial statements do not include any adjustments relating to the recoverability of the carrying amount of recorded assets or the amount of liabilities that might result should Acies be unable to continue as a going concern.

NOTE 3 - NOTES PAYABLE

On October 31, 2006, Acies entered into a Loan and Security Agreement with RBL Capital Group, LLC (“RBL”). The Loan and Security Agreement originally provided a term loan facility with a maximum borrowing of $2,000,000. Each borrowing under this facility is to be repaid in 18 equal monthly installments, each of which includes amortization of the principal amount of the borrowing as calculated using the interest method. A tri-party agreement between Acies, RBL and Chase Alliance Partners, L.P. (“Chase”, to whom Acies outsources certain processing services for the majority of its merchant accounts) arranges for monthly installments to be paid such that Chase forwards to RBL the entire monthly amounts due to Acies and, after deducting the monthly installment, the balance is remitted to Acies within 24 hours. The Loan and Security Agreement requires that accelerated payments of 150% of the monthly installment are required to be paid if certain cash flow ratios are not maintained. Borrowings generally bear interest at a fixed rate per annum of prime plus 8.90%. Borrowings under the facility have been at interest rates ranging between 14.18% and 17.15%. Borrowings may not be drawn more than once every 30 days, and there is a limit on aggregate borrowings based on monthly residuals.

In addition, the Loan and Security Agreement contains customary affirmative and negative covenants for credit facilities of this type, including covenants with respect to liquidity, disposition of assets, liens, other indebtedness, investments, shareholder distributions, transactions with affiliates, officers’ compensation, and the transfer or sale of our merchant base, and that there are no significant changes in our business. In addition, should Acies sell more than 25% of its merchant accounts for which certain processing services are outsourced to Chase, that event would require that borrowings under the facility to be repaid in full. Also, should Acies transfer the outsourcing of certain processing services for merchant accounts for which Chase currently provides such services to a different third-party, that event would require either an agreement between Acies, RBL and the third-party similar to the agreement currently in place between Acies, RBL and Chase, or that borrowings under the facility be repaid in full.

The Loan and Security Agreement additionally provides for customary events of default with corresponding grace periods, including the failure to pay any principal or interest when due, failure to comply with covenants, material misrepresentations, certain bankruptcy, insolvency or receivership events, imposition of certain judgments and the liquidation or merger of Acies. Acies’ obligations under the Loan and Security Agreement are collateralized by substantially all of Acies’ assets, including future remittances relating to its portfolio of merchant accounts. Proceeds from loans under this facility were used to fund general working capital needs, and to repay loans from officers of the Company.

F-5

Acies’ borrowings under this agreement were $0 and $0 during the three months ended June 30, 2010 and 2009. At June 30, 2010, our aggregate remaining principal outstanding from these borrowings is $36,769. The Company does not have any remaining availability under this facility.

The principal repayment schedule for notes payable as of June 30, 2010 is as follows:

Year Ending March 31:
2011	$	36,769

NOTE 4 - STOCK OPTIONS AND WARRANTS

During the three months ended June 30, 2010 and 2009, Acies recognized share-based compensation expense related to options in the amount of $2,488 and $0, respectively.

On September 3, 2009, the Company's Board of Directors adopted, subject to the approval of our Majority Stockholders, which approval was obtained on October 30, 2009, the Company's 2009 Stock Incentive Plan (the "Plan"). The Plan is intended to secure for the Company the benefits arising from ownership of the Company's common stock by the employees, officers, directors and consultants of the Company, all of whom are and will be responsible for the Company's future growth.

The Plan provides an opportunity for any employee, officer, Director or consultant of the Company, except for instances where services are in connection with the offer or sale of securities in a capital-raising transaction, or they directly or indirectly promote or maintain a market for the Company's securities, subject to any other limitations provided by federal or state securities laws, to receive (i) incentive stock options (to eligible employees only); (ii) nonqualified stock options; (iii) restricted stock; (iv) stock awards; (v) shares in performance of services; or (vi) any combination of the foregoing. In making such determinations, the Board of Directors may take into account the nature of the services rendered by such person, his or her present and potential contribution to the Company's success, and such other factors as the Board of Directors in its discretion shall deem relevant.

The maximum aggregate number of shares of common stock which may be issued pursuant to awards under the Plan is 100,000 shares.

On November 12, 2009, the Board of Directors of the Company agreed to grant non-qualified options pursuant to the Plan to purchase 10,000 shares of the Company’s common stock, to each of the three members of the Board of Directors, Oleg Firer, Theodore Ferrara and Steven Wolberg in consideration for services rendered to the Company and to be rendered to the Company as Directors of the Company. The options have an exercise price of $1.00 per share; and are exercisable for five (5) years. Options held by each Director to purchase 3,334 shares vest immediately upon the date of the grant; options to purchase 3,333 shares vest on the first anniversary of the grant date; and options to purchase 3,333 shares vest on the second anniversary of the grant date, subject to such Directors continued service to the Board of Directors. The vesting and expiration of the options are also subject to the terms and conditions of the Plan and the option agreements which evidence such grants. The fair value of the options was determined to be $29,857 using the Black-Scholes option-pricing model. Variables used in the Black-Scholes pricing model for the options include: (1) discount rate of 2.3%, (2) expected term of 5 years, (3) expected volatility of 251% and (4) zero expected dividends. One third of the value was expensed immediately and remaining $19,905 is being amortized over two years. At June 30, 2010, the remaining unamortized amount was $10,865.

In November 2009, the Company ratified the terms and conditions of a three-month consulting agreement between the Company and Steven Wolberg a former consultant and current Director of the Company. Pursuant to the terms of the consulting agreement, Mr. Wolberg agreed to perform legal, consulting and other services for the Company for a period of three months (from July 1, 2009 to September 30, 2009), in consideration for 40,000 restricted shares of the Company’s common stock, valued at $93,333.

F-6

On or around February 18, 2010, the Board of Directors of the Company appointed Steven Wolberg as the Chief Strategy Officer of the Company. In connection with and in consideration for such appointment, as well as previous services rendered to the Company, the Company granted Mr. Wolberg stock options to purchase an aggregate of 300,000 shares of the Company’s common stock, valued at $298,580, at an exercise price of $1.00 per share (the “ Wolberg Options ”). The Wolberg Options are exercisable for five years from the date of the appointment, vested immediately, and contain a cashless exercise provision.

Acies recognizes all share-based payments to employees, including grants of employee stock options and restricted stock, in the financial statements at their fair values. The expense is being recognized on a straight-line basis over the vesting period of the amounts.

During the three months ended June 30, 2010 and 2009, Acies recognized stock-based compensation expense (related both to options and to restricted stock awards) in the amount of $2,488 and $0, respectively. Unamortized stock-based compensation expense on the non-vested portion of the options at June 30, 2010 was $10,865, which will be expensed over the remaining weighted average period of 1.25 years.

The following summarizes the stock option transactions for the three months ended June 30, 2010:

	Options		Weighted Avg. Exercise Price
Outstanding at March 31, 2010		340,000	$	1.71
Granted		-		-
Forfeited		-	$	-
Outstanding at June 30, 2010		340,000	$	1.71

Options outstanding and exercisable as of June 30, 2010:

Exercise Price		Number of Shares		Remaining Life (yrs)		Exercisable Number of Shares
$	1.00		330,000		4.6		310,000
$	25.00		10,000		0.9		10,000
			340,000				330,000

Options outstanding as of June 30, 2010 had an intrinsic value of $16,500.

There were no warrants issued or outstanding during the three months ended June 30, 2010.

NOTE 5 – EQUITY

On or around March 19, 2010, our Board of Directors voted unanimously to approve the filing of a Certificate of Amendment to our Articles of Incorporation to affect a 1:100 reverse stock split (as previously approved by our majority shareholders); and to re-authorize 200,000,000 shares of our common stock, $0.001 par value per share and 5,000,000 shares of our preferred stock, $0.001 par value per share. In connection with the reverse split, the Board of Directors also resolved that any fractional shares left after the stock split would be rounded up to the nearest whole share, provided that no shareholder would hold less than 100 shares following the stock split.

F-7

The Amendment authorizing the stock split and re-authorizations was filed with the Secretary of State of Nevada on March 22, 2010, and became effective with the Secretary of State of Nevada on March 31, 2010; provided however that the stock split did not become effective with the Financial Industry Regulatory Authority (“FINRA”) and therefore the Over-The-Counter Bulletin Board (“OTCBB”) until April 23, 2010. As a result of rounding associated with the stock split, 21,883 shares were issued on April 23, 2010 to shareholders holding less than 100 shares. Unless otherwise stated herein, the stock split has been retroactively reflected herein.

In September 2007, Acies issued a total of 3,000 shares of restricted common stock to its three independent directors, which vested on June 30, 2008. The market value on the date of issuance was $12,000, which was expensed ratably over the vesting period. During the three months ended June 30, 2010 and 2009, Acies recognized a total of $0 and $0, respectively, in share-based compensation expense in connection with the vested portion of restricted stock awards issued in the aforementioned grant.

In November 2009, the Company ratified the terms and conditions of a three-month consulting agreement between the Company and Steven Wolberg, a former consultant and current Director of the Company. Pursuant to the terms of the consulting agreement, Mr. Wolberg agreed to perform legal, consulting and other services for the Company for a period of three months (from July 1, 2009 to September 30, 2009), in consideration for 40,000 restricted shares of the Company’s common stock. Consulting expense was recognized in full over the service period and valued based on the market price per share on the last day of the respective month. Total consulting expense recognized was $93,333.

On November 19, 2009, Pinnacle and the Company entered into a 2 nd Amended and Restated Promissory Notes, to amend and restate Pinnacle’s outstanding promissory notes in the aggregate principal amount of $213,045, which amount included principal of $178,300 and accrued and unpaid interest of $34,745 (the “Amended Pinnacle Notes”). Pursuant to the Amended Pinnacle Notes, the Company agreed to reduce the conversion price of the notes from $2.00 per share to $1.00 per share in consideration for Pinnacle agreeing to immediately convert such Amended Pinnacle Notes and accrued and unpaid interest thereon in the aggregate amount of $213,045 into 213,045 shares of the Company’s restricted common stock. Immediately following the Company’s entry into the Amended Pinnacle Notes, Pinnacle converted the entire principal and accrued interest outstanding under the notes into 213,045 shares of the Company’s restricted common stock. In connection with this induced conversion, the Company recorded $106,523 of additional interest expense.

On November 19, 2009, Oleg Firer, the Company’s Chief Executive Officer and Director, and the Company entered into a 2nd Amended and Restated Promissory Note, to amend and restate Mr. Firer’s outstanding promissory note in the principal amount of $223,282, which amount included principal of $185,000 and accrued and unpaid interest of $38,282 (the “Amended Firer Note”). Pursuant to the Amended Firer Note, the Company agreed to reduce the conversion price of the note from $2.00 per share to $1.00 per share in consideration for Mr. Firer agreeing to immediately convert such Amended Firer Note and accrued and unpaid interest thereon in the aggregate amount of $223,282 into 223,282 shares of the Company’s restricted common stock. Immediately following the Company’s entry into the Amended Firer Note, Mr. Firer converted the entire principal and accrued interest outstanding under the note into 223,282 shares of the Company’s restricted common stock. In connection with this induced conversion, the Company recorded $111,641 of additional interest expense.

During the three months ended June 30, 2010 and 2009, Acies recognized a total of $2,488 and $0, respectively, in stock-based compensation expense in connection with the vested portion of restricted stock awards issued in the previous periods. At June 30, 2010, there was $10,865 of unrecognized stock-based compensation expense on the non-vested portion of stock options.

F-8

Preferred Stock

On December 15, 2008, Acies filed with the Nevada Secretary of State, a Certificate of Designations of Acies Corporation Establishing the Designations, Preferences, Limitations and Relative Rights of the Preferred Stock. The designation provides for the designation of a series of 44,340 shares of Series A Preferred Stock, par value $0.001 per share. The holders of the Preferred Stock are not to be entitled to any liquidation preference. The designation provides conversion rights whereby upon the effective date of a reverse stock split each share of preferred stock will be automatically converted into shares of Acies’ post-reverse stock split common stock at a rate of 1,000 post-reverse stock split shares of Acies’ restricted common shares for each 1 share of preferred stock, without any required action by the holder thereof.

The preferred stock is to have the same voting rights as those accruing to the common stock and vote that number of shares as are issuable upon conversion of such preferred stock that any holder as of the record date of any such vote based on the conversion rate divided by the reverse stock split (to retroactively take into account the reverse stock split). The voting rights of the preferred stock are to be applicable regardless of whether Acies has a sufficient number of authorized but unissued shares of common stock then available to effect an automatic conversion. The holders of the preferred stock are not entitled to receive dividends paid on Acies’ common stock and the preferred stock is not to accrue any dividends. Further, the shares of the Series A Preferred Stock do not have and are not subject to redemption rights.

On August 13, 2009, the Board of Directors approved an amendment to and the restatement of Acies’ previously designated Series A Preferred Stock, which became effective with the Secretary of State of Nevada on August 14, 2009. The Series A Preferred Stock, as amended, allows the Board of Directors in its sole discretion to issue up to 1,000 shares of Series A Preferred Stock, which Series A Preferred Stock has the right to vote in aggregate, on all shareholder matters equal to 51% of the total vote. The Series A Preferred Stock will be entitled to this 51% voting right no matter how many shares of common stock or other voting stock of Acies are issued or outstanding in the future (the “ Super Majority Voting Rights”). Additionally, Acies shall not adopt any amendments to Acies’ Bylaws, Articles of Incorporation, as amended, make any changes to the Certificate of Designations establishing the Series A Preferred Stock, or effect any reclassification of the Series A Preferred Stock, without the affirmative vote of at least 66-2/3% of the outstanding shares of Series A Preferred Stock. However, Acies may, by any means authorized by law and without any vote of the holders of shares of Series A Preferred Stock, make technical, corrective, administrative or similar changes to such Certificate of Designations that do not, individually or in the aggregate, adversely affect the rights or preferences of the holders of shares of Series A Preferred Stock.

In connection with the employment agreement discussed in Note 7, on August 13, 2009, Acies issued 1,000 shares of Series A Preferred Stock to Mr. Firer. The fair value on the date of issuance was $377,319 and was recognized as share-based compensation in general and administrative expense.

F-9

NOTE 6 - EARNINGS PER SHARE

The Company’s earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflects the potential dilution of securities, if any, that could share in the earnings of the Company and is calculated by dividing net income by the diluted weighted average number of common shares. The diluted weighted average number of common shares is computed using the treasury stock method for common stock that may be issued for outstanding stock options. The following is a reconciliation of basic and diluted earnings per share for the three months ended June 30, 2010 and 2009:

	For the Three Months Ended
	June 30,
	2010		2009

Numerator:
Net income available to common shareholders	$	20,031	$	77,557


Denominator:
Weighted average shares – basic		1,232,761		739,841

Net income per share – basic	$	0.02	$	0.10

Dilutive effect of common stock equivalents:
Options		107,212		-

Denominator:
Weighted average shares – diluted		1,339,972		739,841

Net income per share – diluted	$	0.01	$	0.10

Stock options and warrants in the amount of 10,000 and 85,900 for the three months ended June 30, 2010 and 2009, respectively, were not included in the computation of diluted earnings per share applicable to common stockholders, as they were anti−dilutive as a result of the options and warrants being out of the money for the three months ended

June 30, 2009.

NOTE 7 – EMPLOYMENT AGREEMENT

On or around August 13, 2009, the Company and Mr. Firer agreed to the entry into a three year employment agreement effective as of May 5, 2009 and continuing until May 4, 2012 (unless terminated previously as provided in the agreement and described below). Pursuant to the agreement, Mr. Firer agreed to serve as our Chief Executive Officer and as the Chief Executive Officer of Acies, Inc., our wholly-owned Nevada subsidiary. We agreed to pay Mr. Firer compensation of $215,000 per year, and that Mr. Firer would have the right, at the sole discretion of our board of Directors, to receive an annual incentive bonus of up to a maximum of 70% of Mr. Firer’s annual base salary and an annual discretionary bonus of up to 30% of Mr. Firer’s base salary. We also agreed to issue Mr. Firer the 1,000 shares of the Company’s shares of Series A Preferred Stock which were previously designated by the Board of Directors (as described below). Finally, the employment agreement provided that we would reimburse Mr. Firer for health insurance premiums of up to $1,350 per month and provide Mr. Firer a car allowance of up to $1,500 per month.

The employment agreement can be terminated by Mr. Firer for “ cause ” (as defined therein), by the Company for “ good reason ” as defined therein, by the mutual consent of the parties, or by any party at any time for any reason. The employment agreement is also terminated by Mr. Firer’s death or his disability (as described therein). In the event the agreement is terminated for “ cause ” by the Company, without “ good reason ” by Mr. Firer, or by mutual agreement, Mr. Firer is to be paid any earned but unpaid salary, benefits or bonuses, and reimbursement for any business expenses paid by Mr. Firer (the “ Accrued Obligations ”). In the event that Mr. Firer’s employment is terminated due to death or disability, he (or his heirs) are to receive the Accrued Obligations and up to 12 months of COBRA health coverage reimbursement (the “ COBRA Coverage ”). In the event the employment agreement is terminated without “ cause ” by the Company or for “ good reason ” by Mr. Firer, he is to receive the Accrued Obligations, the COBRA Coverage, and the greater of 12 months of salary or the remaining salary due to him under the term of the agreement.

The Company does not currently have any employment agreements in place with Mr. Ferrara, a Director.

On or around February 18, 2010, with an effective date of March 1, 2010, we entered into an employment agreement with Steven Wolberg, the Company’s Director and Chief Strategy Officer (the “ Wolberg Employment Agreement ”).

F-10

The Wolberg Employment Agreement provides for Mr. Wolberg to serve the Company as its Chief Strategy Officer as well as the Chief Strategy Officer of Acies, Inc., the Company’s wholly-owned subsidiary, for a period of three years, ending on February 28, 2013 (unless terminated previously as provided in the agreement and described below).

We agreed to pay Mr. Wolberg compensation of $200,000 per year, and that Mr. Wolberg would have the right, at the sole discretion of our Board of Directors, to receive an annual incentive bonus of up to a maximum of 70% of Mr. Wolberg’s annual base salary based on performance, and an annual discretionary bonus of up to 30% of Mr. Wolberg’s base salary. Finally, the employment agreement provided that we would reimburse Mr. Wolberg for a whole life insurance policy naming Mr. Wolberg’s designee as beneficiary of up to $1,350 per month and provide Mr. Wolberg a car allowance of up to $1,500 per month.

The employment agreement can be terminated by Mr. Wolberg for “ cause ” (as defined therein), by the Company for “ good reason ” as defined therein, by the mutual consent of the parties, or by any party at any time for any reason. The employment agreement is also terminated by Mr. Wolberg’s death or his disability (as described therein). In the event the agreement is terminated for “ cause ” by the Company, without “ good reason ” by Mr. Wolberg, or by mutual agreement, Mr. Wolberg is to be paid any earned but unpaid salary, benefits or bonuses, and reimbursement for any business expenses paid by Mr. Wolberg (the “ Accrued Obligations ”). In the event that Mr. Wolberg’s employment is terminated due to death or disability, he (or his heirs) are to receive the Accrued Obligations and up to 12 months of COBRA health coverage reimbursement (the “ COBRA Coverage ”). In the event the employment agreement is terminated without “ cause ” by the Company or for “ good reason ” by Mr. Wolberg, he is to receive the Accrued Obligations, the COBRA Coverage, and the greater of 12 months of salary or the remaining salary due to him under the term of the agreement.

NOTE 8 – RELATED PARTY TRANSACTIONS

During the three months ended June 30, 2010, the Company paid approximately $124,972 in residual commissions to CROM Merchant Services, Inc., an entity controlled by Theodore Ferrara, then an independent sales agent, and a principal of Rite Holdings, Inc., which is a significant shareholder of the Company. Mr. Ferrara is also currently a Director of the Company.

In June 2008, Acies borrowed $450,000 through the execution of a convertible promissory note with Pinnacle Three Corporation (“Pinnacle”), bearing interest at a rate of 8% per annum, with principal and all accrued interest payable in November 2010. On June 6, 2008, Acies received a conversion letter from Pinnacle requesting conversion of the principal and accrued interest into 225,150 shares of Acies common stock at a price of $2.00 per share, per the terms of the Note agreement. On July 17, 2008, Acies issued 225,150 shares to Pinnacle in exchange for the Settlement Agreement and Mutual Release between Pinnacle and Acies.

In November 2009, the Company ratified the terms and conditions of a three-month consulting agreement between the Company and Steven Wolberg, a former consultant and current Director of the Company. Consideration of 40,000 restricted shares of the Company’s common stock. Consulting expense was recognized in full over the service period and valued based on the market price per share on the last day of the respective month. Total consulting expense recognized was $93,333 (see Note 4).

On November 19, 2009, Pinnacle converted the principal debt amount of $213,045 into 213,045 shares of the Company’s restricted common stock, which amount included principal of $178,300 and accrued and unpaid interest of $34,745 (See Note 5).

On November 19, 2009, Oleg Firer, the Company’s Chief Executive Officer and Director, converted the principal debt amount of $223,282 into 223,282 shares of the Company’s restricted common stock, which amount included principal of $185,000 and accrued and unpaid interest of $38,282 (see Note 5).

Merchant Processing Services Corp (“MPS”) provides day-to-day support functions, office and servicing for Acies for a monthly payment of $20,000 to $25,000. MPS is a wholly-owned subsidiary of Merchant Capital Holding Corp, partly owned by Star Capital Holdings Corp. (“Star”). Oleg Firer, Acies’ CEO, serves as a Co-Chairman of Star. Leon Goldstein, President of Pinnacle Three Corp. is a founder of Star and also serves as a Co-Chairman. For the three months ended June 30, 2010 and 2009, Acies incurred and paid expenses to MPS in the amount of $0 and $58,000, respectively.

During the three months ended June 30, 2010, Pinnacle and Star Capital Fund, LLC paid $348,790 for certain day-to-day operating expenses on behalf of the Company. A balance of $408,282 is included in accounts payable to related parties in the consolidated balance sheets at June 30, 2010.

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FORWARD LOOKING STATEMENTS

Some of the statements contained in this Form 10-Q that are not historical facts are "forward-looking statements" which can be identified by the use of terminology such as "estimates," "projects," "plans," "believes," "expects," "anticipates," "intends," or the negative or other variations, or by discussions of strategy that involve risks and uncertainties. We urge you to be cautious of such forward-looking statements, in that such statements reflect our current beliefs with respect to future events and involve known and unknown risks, uncertainties and other factors affecting our operations, market growth, services, products and licenses. No assurances can be given regarding the achievement of future results, as actual results may differ materially as a result of the risks we face, and actual events may differ from the assumptions underlying the statements that have been made regarding anticipated events. Factors that may cause our actual results, performance or achievements, or industry results, to differ materially from those contemplated by such forward-looking statements include without limitation:

1.	Our ability to attract and retain management and to integrate and maintain technical information and management information systems;

2.	Our ability to generate customer demand for our services;

3.	Our ability to raise debt or equity financing to grow the business;

4.	The intensity of competition; and

5.	General economic conditions affecting our industry.

The foregoing is not intended to be an exhaustive list of all factors that could cause actual results to differ materially from those expressed in forward-looking statements made by Acies Corporation. Investors are encouraged to review the risk factors set forth below.

All written and oral forward-looking statements made in connection with this Form 10-Q that are attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Given the uncertainties that surround such statements, you are cautioned not to place undue reliance on such forward-looking statements.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS

REFERENCES IN THIS FORM 10-Q TO "THE COMPANY", "WE", “ACIES,” "US" OR "OUR", REFER TO ACIES CORPORATION AND ITS PRINCIPAL SUBSIDIARY, ACIES, INC. REFERENCES IN THIS FORM 10-Q, UNLESS ANOTHER DATE IS STATED, ARE TO JUNE 30, 2010.

COMPANY HISTORY

The Company was originally incorporated in the State of Nevada on October 11, 2000. On October 1, 2003, the Company changed its name to Atlantic Synergy, Inc. (“Atlantic”). Our principal subsidiary, Acies, Inc., was incorporated in the State of Nevada on April 22, 2004 as GM Merchant Solutions, Inc., and changed its name to Acies, Inc. on June 23, 2004. On June 28, 2004, Acies, Inc. purchased substantially all of the assets of GM Merchant Solutions, Inc., a New York corporation ("GM-NY") and GMS Worldwide, LLC, a New York limited liability company ("GMS-NY"), including cash, accounts receivable, office equipment, furniture, computer hardware and software, and goodwill and other intangible property (including customer lists, leases, and material contracts) in exchange for Acies, Inc. common stock (the “Acies, Inc. Stock”). Mr. Oleg Firer, our current Chief Executive Officer and Director, Mr. Yakov Shimon, our former Vice President of Technology and Data Management, and Mr. Miron Guilliadov, our former Vice President of Sales, had been engaged in the payment processing business through GM-NY and GMS-NY.

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On July 2, 2004, Atlantic acquired approximately 99.2% of the issued and outstanding common stock of Acies, Inc. in exchange for approximately 261,500 newly issued shares of Atlantic's common stock (the "Exchange"). In connection with, and subsequent to the Exchange, Atlantic transferred all of its assets held immediately prior to the Exchange, subject to all of Atlantic's then existing liabilities, to Terence Channon, Atlantic's former President and Chief Executive Officer, in consideration for Mr. Channon's cancellation of 42,850 shares of Atlantic's common stock and the cancellation of 2,000 shares of Atlantic's common stock held by a third party. The transaction was accounted for as a reverse merger. In connection with this transaction, the Acies, Inc. stock was exchanged for common stock of Atlantic.

In November 2004, Atlantic changed its name to Acies Corporation (“Acies” or the “Company”).

DESCRIPTION OF PRINCIPAL PRODUCTS AND SERVICES

The Company, through its wholly-owned subsidiary Acies, Inc., is engaged in the business of providing payment processing solutions to small and medium size merchants across the United States. Through contractual relationships with third parties to whom we outsource the providing of certain services, Acies is able to offer complete solutions for payment processing, whereby we consult with merchants to best determine their hardware and software needs; provide transaction authorization, settlement and clearing services; perform merchant acceptance and underwriting functions; program, deploy and install traditional and next-generation point-of-sale (POS) terminals; assist in the detection of fraudulent transactions; and provide customer and technical support and service on an on-going basis. We are a registered member service provider of Wells Fargo Bank, N.A. Historically we were sponsored by JPMorgan Chase Bank through a joint venture between JPMorgan Chase and First Data Corp. On May 27, 2008, JPMorgan Chase and First Data Corp announced that they had agreed to end their joint venture. On November 3, 2008, JPMorgan Chase and First Data Corp completed an ownership transition and ended their joint venture. As part of this transaction, First Data Corp assumed services to the joint venture’s customers and changed bank sponsorship to Wells Fargo Bank, N.A. The Company continues to do business under its legacy agreement, while negotiating new processing agreements with First Data Corp.

The Company’s payment processing services enable merchants to process Credit, Debit, Electronic Benefit Transfer (EBT), Check Conversion, and Gift & Loyalty transactions. Our card processing services enable merchants to accept traditional card-present transactions, including "swipe" and contactless transactions, as well as card-not-present transactions made by Internet or by mail, fax or telephone.

We outsource certain services to third parties, including the receipt and settlement of funds. In addition, we outsource for a fee certain underwriting and acceptance functions, effectively insuring against risk for entire processed transaction amounts relating to merchant fraud (while retaining the risk related to the fees representing our revenue stream and associated costs). By doing so, we intend to maintain an efficient operating structure which allows us to expand our operations without having to significantly increase fixed costs or retain certain risks associated with acceptance and underwriting of merchant accounts.

We derive the majority of our revenues from fee income related to transaction processing, which is primarily comprised of a percentage of the dollar amount of each transaction processed, as well as a flat fee per transaction. In the event that we have outsourced any of the services provided in the transaction, we remit a portion of the fee income to the third parties that have provided such outsourced services.

We market and sell our services primarily through an indirect sales channel, i.e., through independent sales agents and organizations. Our cost of revenues is comprised principally of interchange and association fees which are paid to the card-issuing bank and card association, and fees paid to third parties that have provided outsourced services. The fees paid are based upon fixed pricing schedules (certain detailed costs are fixed on a per transaction and/or event basis, while others are fixed as a percentage of the dollar volume of the transaction), which are subject to periodic revision, and are without regard to the pricing charged to the merchant. Fee structures with third parties providing outsourced services are reviewed, renegotiated and/or revised on a periodic basis, and are based on mutually agreed-to expectations relating to, for instance, minimum new business volume placed within specified periods which, if not met, would result in additional charges to be paid by the Company.

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Although the Company initiates and maintains the primary relationships with the merchants whose transaction processing results in our revenues, including generally having control over pricing and retaining risk as it relates to the fees comprising our revenue stream, merchants do not have written contracts with the Company, and instead have contractual agreements with third-party processors to whom we outsource, and rely on to perform, certain services on our behalf.

Our fiscal year ends on March 31. References to a fiscal year refer to the calendar year in which such fiscal year ends.

MARKET OVERVIEW

The payment processing industry is an integral part of today's worldwide financial structure. The industry is continually evolving, driven in large part by technological advances. The benefits of card-based payments allow merchants to access a broader universe of consumers, enjoy faster settlement times and reduce transaction errors. By using credit or debit cards, consumers are able to make purchases more conveniently, whether in person, over the Internet, or by mail, fax or telephone, while gaining the benefit of loyalty programs, such as frequent flyer miles or cash back, which are increasingly being offered by credit or debit card issuers.

Consumers are also beginning to use card-based and other electronic payment methods for purchases at an earlier age in life, and increasingly for small dollar amount purchases. Given these advantages of card-based payment systems to both merchants and consumers, favorable demographic trends, and the resulting proliferation of credit and debit card usage, we believe businesses will increasingly seek to accept card-based payment systems in order to remain competitive.

Our management believes that cash transactions are becoming progressively obsolete. The proliferation of bank cards has made the acceptance of bank card payments a virtual necessity for many businesses, regardless of size, in order to remain competitive. In addition, the advent and growth of e-commerce have marked a significant new trend in the way business is being conducted. E-commerce is dependent upon credit and debit cards, as well as other cashless payment processing methods.

The payment processing industry continues to evolve rapidly, based on the application of new technology and changing customer needs. We intend to continue to evolve with the market to provide the necessary technological advances to meet the ever-changing needs of our market place. Traditional players in the industry must quickly adapt to the changing environment or be left behind in the competitive landscape.

COMPETITIVE BUSINESS CONDITIONS

We are committed not only to servicing clients' current processing needs, but also to being amongst the first to make available new technologies that may improve our merchants’ respective competitive positions. We are committed to gaining the expertise and relationships to adopt and implement new technologies that we believe may differentiate our service offerings.

The credit, charge and debit card transaction processing services business is highly competitive. Many of our current and prospective competitors have substantially greater financial, technical and marketing resources, larger customer bases, longer operating histories, more developed infrastructures, greater name recognition and/or more established relationships in the industry than we have. Because of this our competitors may be able to adopt more aggressive pricing policies than we can, develop and expand their service offerings more rapidly, adapt to new or emerging technologies and changes in customer requirements more quickly, take advantage of acquisitions and other opportunities more readily, achieve greater economies of scale, and devote greater resources to the marketing and sale of their services. Because of the high levels of competition in the industry and the fact that other companies may have greater resources, it may be impossible for us to compete successfully. However, we seek to differentiate the Company through our consultative approach, recommending and implementing the best possible overall payment processing solutions, tailored to merchants’ specific needs.

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TARGET MARKETS

We provide services principally to small and medium-size merchants in retail, restaurant, supermarket, petroleum and hospitality sectors located across the United States. The small merchants we serve typically process on average in excess of $20,000 a month in credit card transactions and have an average transaction value of approximately $50.00 per transaction. These merchants have traditionally been underserved by larger payment processors. As a result, these merchants have historically paid higher transaction fees than larger merchants and have not been provided with tailored solutions and on-going services that larger merchants typically receive from larger processors.

We believe that we have developed significant expertise in industries that we believe present relatively low risk as customers are generally present and the products and/or services are generally delivered at the time the transaction is processed. These industries include “brick and mortar” retailers, hospitality, automotive repair shops, food stores, petroleum distributors and professional service providers. As of March 31, 2010, the end of our last fiscal year, approximately 20% of our merchants were professional service providers, 21% were hospitality merchants, 11% were food stores, 10% were gas stations and petroleum distributors, 8% were automotive sales and repair shops, 5% were apparel stores, 2% were other “brick and mortar” retailers and 4% were other industries.

DISTRIBUTION METHODS

We have adopted what we believe to be an uncomplicated sales strategy enabling us to establish additions to our sales force in a quick, inexpensive manner. We market and sell our services primarily through relationships with independent sales agents and organizations. These agents and organizations act as a non-employee, external sales force in communities throughout the United States.

Our independent sales agents and organizations are principally compensated by receiving on-going monthly residual payments based on a percentage of transaction-based revenues less expenses relating to merchant accounts they have brought to the Company. This stream of residual payments is paid to them indefinitely, assuming that the merchant is still processing through Acies, and that the agent continues to serve the merchant’s needs.

RECENT MATERIAL TRANSACTIONS:

On or around March 19, 2010, our Board of Directors voted unanimously to approve the filing of a Certificate of Amendment (the “Amendment”) to our Articles of Incorporation to affect a 1:100 reverse stock split (the “Stock Split”)(as previously approved by our majority shareholders at an Annual Meeting of Stockholders held on October 30, 2010; and to re-authorize 200,000,000 shares of our common stock, $0.001 par value per share and 5,000,000 shares of our preferred stock, $0.001 par value per share (the “Re-Authorizations”). In connection with the Reverse Split, the Board of Directors also resolved that any fractional shares left after the Stock Split would be rounded up to the nearest whole share, provided that no shareholder would hold less than 100 shares following the Stock Split (“Rounding”).

The Amendment authorizing the Stock Split and Re-Authorizations was filed with the Secretary of State of Nevada on March 22, 2010, and became effective with the Secretary of State of Nevada on March 31, 2010; provided however that the Stock Split did not become effective with the Financial Industry Regulatory Authority (“FINRA”) and therefore the Over-The-Counter Bulletin Board (“OTCBB”) until April 23, 2010. As a result of the filing of the Amendment and the Stock Split, the Company had approximately 1,216,168 post-Stock Split shares of common stock issued and outstanding (not taking into account any additional shares which will be issued due to the Rounding), and 200,000,000 shares of common stock, $0.001 par value per share and 5,000,000 shares of preferred stock, $0.001 par value per share, authorized. In connection with the Stock Split and the Rounding, the Company currently has 1,238,051 shares of common stock outstanding.

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The affect of the Stock Split has been retroactively reflected throughout this report unless otherwise stated.

PLAN OF OPERATION FOR THE NEXT TWELVE MONTHS

Moving forward, we plan to continue to engage in the business of providing payment processing solutions to small and medium size merchants across the United States, and will use our best efforts to expand our client base and/or improve the Company’s profitability.

We have incurred losses and experienced negative operating cash flow each year since we have become a public reporting company. For the year ended March 31, 2010, we had a net loss of $1,445,051, and had an accumulated deficit of $7,949,374 and negative working capital of $1,087,773 as of March 31, 2010. For the three months ended June 30, 2010, we had net income of $20,031, and had an accumulated deficit of $7,929,343 and negative working capital of $1,067,178 as of June 30, 2010.

The Company received a going concern opinion from its auditors on its audited financial statements for fiscal 2010. Due to our lack of profitability and our negative working capital, there is "substantial doubt" about our ability to continue as a going concern. This substantial doubt may limit our ability to access certain types of financing, or may prevent us from obtaining financing on acceptable terms.

We anticipate needing to raise additional capital in the short term to continue our operations. We anticipate the need for approximately $2,000,000 to $5,000,000 of additional capital to support and grow our operations for the next 12 months. We may attempt to sell debt and/or equity securities in the future to raise additional funds to continue our business operations. If we are unable to raise additional funding in the future, we may be forced to curtail our business operations, change our business focus, cease our periodic filings, sell our assets, file for bankruptcy protection or dissolve the Company.

COMPARISON OF OPERATING RESULTS

FOR THE THREE MONTHS ENDED JUNE 30, 2010, COMPARED TO THE THREE MONTHS ENDED JUNE 30, 2009

Revenues decreased $337,352 or 24.9% to $1,016,007 for the three months ended June 30, 2010, as compared to revenues of $1,353,359 for the three months ended June 30, 2009. The decrease in revenues was principally due to the decrease in processing volumes (i.e., card-based sales in dollars) and the decrease in the number of transactions. The decrease reflects the decrease in merchant processing revenues resulting from the loss of merchant accounts and loss of sales agents, and greater pricing pressure in certain industries to which we market our services.

Cost of revenues decreased $168,032 or 15.8% to $895,048 for the three months ended June 30, 2010, as compared to cost of revenues of $1,063,080 for the three months ended June 30, 2009. The decrease in cost of revenues was principally attributable to the decrease in merchant processing costs that resulted from a decrease in merchant processing revenues.

Gross margin decreased $169,320 or 58.3% to $120,959 for the three months ended June 30, 2010, as compared to gross margin of $290,279 for the three months ended June 30, 2009 due to the decreased revenues associated with higher cost of revenues.

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Cost of revenues as a percentage of revenues were 88.1% for the three months ended June 30, 2010, compared to 78.6% for the three months ended June 30, 2009, an increase in cost of revenues as a percentage of revenues of 9.5% from the prior period. The main reason for the increase in cost of revenues as a percentage of revenues was due to the fact that total cost of revenues for each period included certain fixed costs, which were distributed over a smaller amount of revenues for the three months ended June 30, 2010, compared to the three months ended June 30, 2009.

Total operating expenses decreased $91,517 or 47.9% to $99,487 for the three months ended June 30, 2010, as compared to total operating expenses of $191,004 for the three months ended June 30, 2009. The decrease in total operating expenses was principally attributable to a decrease in general, administrative and selling expenses of $91,517 or 47.9%, for the three months ended June 30, 2010, compared to the three months ended June 30, 2009 which includes non-cash stock-based compensation.

We had operating income of $21,472 for the three months ended June 30, 2010, compared to operating income of $99,275 for the three months ended June 30, 2009, a decrease in operating income of $77,803 or 78.4% from the prior period, which decrease was largely attributable to the decrease in revenues and the increase in cost of revenues.

During the three months ended June 30, 2010, we incurred interest expense of $1,441 compared to $21,718 for the three month period ended June 30, 2009, a decrease of $20,277 or 93.4% from the prior period. The decrease in interest expense was mainly due to a reduction in the amounts we owed to RBL Under the Loan Agreement, described below, as well as the conversion of certain amounts of outstanding debt in 2009, which decreased our total liabilities and therefore our total interest expense for the three months ended June 30, 2010, compared to the prior period of 2009.

We had net income of $20,031 for the three months ended June 30, 2010, as compared to net income of $77,557 for the three months ended June 30, 2009, a decrease in net income of $57,526 or 74.2% from the prior period. The decrease in net income was due to the $$337,352 or 24.9% decrease in revenues, partially offset by the $91,517 or 47.9% decrease in total operating expenses for the three months ended June 30, 2010, compared to the three months ended June 30, 2009.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2010, we had total current assets of $437,994, consisting of accounts receivable of $427,854, and $10,140 of cash. We had total assets of $442,709, consisting of total current assets of $437,994 and $4,715 of fixed assets, net of accumulated depreciation.

We had total current liabilities of $1,505,748 as of June 30, 2010, which consisted of notes payable – current portion of $36,769, accounts payable and accrued expenses of $787,871, and accounts payable to related parties of $720,532. We had total liabilities of $1,505,172, which included solely current liabilities of $1,505,172.

As of June 30, 2010, we had negative working capital of $1,067,178 and an accumulated deficit of $7,929,343. The Company believes that the existing financing and expected earnings will not meet its current working capital and debt service requirements for the next twelve months. These issues raise substantial doubt about our ability to continue as a going concern. The accompanying financial statements do not include any adjustments relating to the recoverability of the carrying amount of recorded assets or the amount of liabilities that might result should the Company be unable to continue as a going concern.

The Company secured financing on October 31, 2006, when we entered into a Loan and Security Agreement (the “Loan Agreement”) with RBL Capital Group, LLC (“RBL”). The Loan Agreement provided a term loan facility with an original maximum borrowing of $2,000,000.

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As of June 30, 2010, the aggregate amount outstanding from our RBL facility borrowings was $36,769. The amounts borrowed from RBL bear interest at 15.01% per annum. The Company has no remaining availability on the facility.

Acies is seeking to secure additional capital through debt and/or equity financing. We do not, however, have any commitments or identified sources of additional capital from third parties or from our officers, Directors or significant shareholders. There is no assurance that additional financing will be available on favorable terms, if at all. If we are unable to raise such additional financing, it would have a materially adverse effect upon our operations and our ability to fully implement our business plan, which would limit our ability to continue as an on-going business.

Cash Requirements

Our business is such that our revenues are generally recurring. Once we add a new account, which generally entails up-front expenditures, whether it be salaries for direct (i.e., Acies-employed) salespersons, or an investment in merchant terminal equipment, we typically receive revenue relating to that account for as long as the merchant is our customer. If we employ a strategy of utilizing independent sales agents and organizations who are not salaried and are paid on a performance-based basis, the up-front costs are even less; however; commissions payable to these independent sales agents are higher.

Our strategy is flexible, whereby we attempt to employ funds that are available to us to profitably grow the business as rapidly as possible, albeit in a controlled fashion, with an eye toward maintaining customer service levels and minimizing risk in order to retain merchants and have a long-term revenue stream. Funding may be necessary to grow the business significantly, especially through direct sales channels which would require the addition of salaried employees. In the absence of such funding, we believe that we can continue to grow at modest levels, relying more heavily on the indirect (i.e., independent sales agent) channel.

Most of our expenses are variable and are a function of our revenue stream, while other expenses are of a more fixed nature, but are still controllable. Moreover, our fixed expenses which reflect the on-going cost of our infrastructure would not need to be increased significantly as our revenue base increases. We estimate that over the next twelve months, to maintain a minimal rate of growth, we would have corporate operating expenses on a cash basis, excluding our cost of revenues which is variable, of approximately $1,000,000 and anticipate needing approximately $2,000,000 to $5,000,000 in additional funding to grow our operations. This would include our personnel costs, rent, professional fees, insurance, utilities and other office expenses. At our current revenue rate, assuming no improvement over historical margins, we believe that operating cash flow would not be sufficient to cover our expenditures, unless we are able to obtain additional financing.

We have no current commitment from our officers and Directors or any of our shareholders to supplement our operations or provide us with financing in the future. If we are unable to raise additional capital from conventional sources and/or additional sales of stock in the future, we may be forced to curtail or cease our operations. The failure to obtain financing could have a substantial adverse effect on our business and financial results.

In the future, we may be required to seek additional capital by selling debt or equity securities, selling assets, or otherwise be required to bring cash flows in balance when we approach a condition of cash insufficiency. The sale of additional equity or debt securities will result in dilution to our then shareholders. We provide no assurance that financing will be available in amounts or on terms acceptable to us, or at all.

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Cash Flows

The Company had $13,571 of cash provided by operating activities for the three months ended June 30, 2010, which mainly consisted of a decrease of $392,040 of accounts payable-related party, and $20,031 of net income, partially offset by an increase of $387,463 of accounts payable and accrued expenses.

The Company had $4,591 of cash used by financing activities for the three months ended June 30, 2010, which was due solely to repayment of notes payable.

OFF BALANCE SHEET ARRANGEMENTS

We do not have any off balance sheet arrangements.

CRITICAL ACCOUNTING POLICIES

Our discussion and analysis of our financial condition and results of operations is based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of any contingent assets and liabilities. On an on-going basis, we evaluate our estimates. We base our estimates on various assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We believe the following critical accounting policy affects our more significant estimates and judgments used in the preparation of our financial statements:

Revenue recognition

Use of estimates

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Subsequent Events

Acies has evaluated all transactions through the financial statement issuance date for subsequent event disclosure consideration.

EFFECT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

There were various accounting standards and interpretations issued recently, none of which are expected to have a material impact on our consolidated financial position, operations or cash flows.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Management of the Company, with the participation of the Chief Executive Officer and acting Chief Financial Officer, Oleg Firer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities and Exchange Act of 1934, as amended) as of June 30, 2010. Based upon this evaluation, the Chief Executive Officer, who is also the acting Chief Financial Officer has concluded that the Company’s disclosure controls and procedures were not effective as of June 30, 2010, because of the material weakness in internal control over financial reporting described below.

The matters involving internal controls and procedures that the Company's management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) inadequate segregation of duties consistent with control objectives; (2) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of GAAP and SEC disclosure requirements; and (3) ineffective controls over period end financial disclosure and reporting processes.

Management believes that the material weaknesses set forth above did not have an effect on the Company's financial results reported herein.

We are committed to improving our financial organization. As part of this commitment, we will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to the Company. In addition, at that time, the Company will prepare and implement sufficient written policies and checklists which will set forth procedures for accounting and financial reporting with respect to the requirements and application of GAAP and SEC disclosure requirements.

Management believes that preparing and implementing sufficient written policies and checklists will remedy the following material weaknesses (i) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of GAAP and SEC disclosure requirements; and (ii) ineffective controls over period end financial close and reporting processes. Further, management believes that the hiring of additional personnel who have the technical expertise and knowledge will result in proper segregation of duties and provide more checks and balances within the financial reporting department. Additional personnel will also provide the cross training needed to support the Company if personnel turnover issues within the financial reporting department occur.

We will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.

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Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rules13a-15 or 15d-15 under the Exchange Act that occurred during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On December 4, 2006, the Company received a complaint filed in the Supreme Court of the State of New York, County of New York, by a merchant, which named as co-defendants Acies, several of our strategic partners, and a third-party bank. The dispute relates to bank accounts used by the merchant to process credit and debit card transactions. The Company believes that the probability of any material loss is remote, especially when considering that we are contractually indemnified by a partner for the type of loss which would result from such a claim.

Other than the above mentioned dispute, we are not currently involved in legal proceedings that could reasonably be expected to have a material adverse effect on our business, prospects, financial condition or results of operations. We may become involved in material legal proceedings in the future.

ITEM 1A. RISK FACTORS

An investment in our common stock is highly speculative, and should only be made by persons who can afford to lose their entire investment in us. You should carefully consider the following risk factors and other information in this quarterly report before deciding to become a holder of our common stock. If any of the following risks actually occur, our business and financial results could be negatively affected to a significant extent.

RISKS RELATED TO OUR FINANCIAL CONDITION AND BUSINESS

WE HAVE HAD LOSSES SINCE WE HAVE BECOME A PUBLIC REPORTING COMPANY.

We have incurred losses and experienced negative operating cash flow each year since we have become a public reporting company in April 2002. For our fiscal years ended March 31, 2010 and March 31, 2009, we had a net loss of $1,445,051 and $388,691, respectively. As of June 30, 2010, we had negative working capital of $1,067,178 and an accumulated deficit of $7,929,343.

Continued losses may require us to seek additional debt or equity financing. If debt financing is available and obtained, our interest expense may increase and we may be subject to the risk of default, depending on the terms of such financing. If equity financing is available and obtained it may result in our shareholders experiencing significant dilution. If such financing is unavailable our losses and negative operating cash flow may continue and we may be required to restrict growth by decreasing future marketing expenditures and/or investment in our infrastructure.

DEPENDENCY ON ADDITIONAL FINANCING.

As mentioned above, we have experienced negative operating cash flow and there is no assurance that we will have positive operating cash flow in the future. We have relied upon borrowings under the Loan and Security Agreement described in detail in the section “Management’s Discussion and Analysis” and in Note 3 to the Unaudited Consolidated Financial Statements in order to satisfy our liquidity needs. The borrowing capacity afforded us under this agreement has been fully utilized based on the eighteen month term of the Loan and Security Agreement. The Company needs to obtain additional financing to maintain liquidity and continue its business operations over the next twelve months.

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THERE IS SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN.

Due to our lack of profitability and our negative working capital, there is "substantial doubt" about our ability to continue as a going concern. This substantial doubt may limit our ability to access certain types of financing, or may prevent us from obtaining financing on acceptable terms.

MAJORITY VOTING CONTROL OVER THE COMPANY IS IN THE HANDS OF OUR CHIEF EXECUTIVE OFFICER AND DIRECTOR, OLEG FIRER.

Our Chief Executive Officer, Oleg Firer, can vote 319,625 shares of common stock representing 26.6% of the outstanding shares of common stock and all of our outstanding shares of Series A Preferred Stock, which can vote in aggregate 51% of the voting shares on any shareholder vote, and therefore vote 1,288,584 shares as of the date of this filing. As a result, Mr. Firer can vote an aggregate of 1,608,209 voting shares or 63.7% of the aggregate of 2,526,635 voting shares currently outstanding on any shareholder vote and therefore has majority voting control over the Company. As a result, Mr. Firer will exercise majority control in determining the outcome of all corporate transactions or other matters, including the election of Directors, mergers, consolidations, the sale of all or substantially all of our assets, and also the power to prevent or cause a change in control. The interests of Mr. Firer may differ from the interests of the other stockholders and thus result in corporate decisions that are adverse to other shareholders.

THE INTERESTS OF MR. FIRER, OUR CHIEF EXECUTIVE OFFICER AND DIRECTOR AND MR. WOLBERG, OUR DIRECTOR AND CHIEF STRATEGY OFFICER, MAY DIFFER FROM THE INTERESTS OF OUR OTHER SHAREHOLDERS, AND THEY MAY ALSO COMPETE WITH THE COMPANY AND/OR ENTER INTO TRANSACTIONS SEPARATE FROM THE COMPANY.

Mr. Firer, our Chief Executive Officer and Director and Mr. Wolberg, our Director and Chief Strategy Officer, are involved in business interests separate from their involvement with the Company, including but not limited to Merchant Capital Holdings, and its affiliates, Prime Portfolios, LLC, and its affiliates, separate joint ventures between other individuals, including Mr. Firer and Mr. Wolberg, and other businesses and companies which also operate in the payment processing industry similar to and/or in competition with the Company. In February 2010, Mr. Wolberg, Mr. Firer and Leon Goldstein, who controls Pinnacle Three Corporation, a significant shareholder of the Company, formed an entity, pursuant to which each such party agreed to contribute certain interests such parties hold in various endeavors and to equally share the net profits generated by such entities. To date, the parties have not contributed any assets into a new entity which was formed in February 2010. Neither Mr. Firer nor Mr. Wolberg are under any obligation to include the Company in any transactions, businesses, operations, joint ventures or agreements which they undertake. As a result, we may not benefit from connections they make and/or agreements, ventures or understandings they enter into while employed by and/or while serving as officers or Directors of us, and they, or entities or affiliates they are associated with, including, but not limited to those disclosed above, may profit from transactions which they undertake while we do not. As a result, Mr. Firer and/or Mr. Wolberg may find it more lucrative or beneficial to cease serving as an officer or Director of the Company in the future and may resign from the Company at that time. Furthermore, while employed by us and/or while serving as officers or Directors of us, shareholders should keep in mind that they are not under any obligation to share their contacts or relationships and/or to enter into favorable contracts, agreements, ventures or understandings they may come across with the Company, and as a result may choose to enter into such contracts, agreements, ventures or understandings through entities which they own, operate or are affiliated with, which are not affiliated with us, which may in fact compete with us, and from which we will receive no benefit.

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INVESTORS FACE A RISK THAT IN THE FUTURE, THE COMPANY WILL (A) ENTER INTO A MERGER OR ACQUISITION TRANSACTION; (B) AFFECT A SALE OF ALL OR SUBSTANTIALLY ALL OF ITS ASSETS AND OPERATIONS; (C) ENTER INTO A TRANSACTION THAT RESULTS IN NEW MANAGEMENT AND A NEW OPERATING BUSINESS OF THE COMPANY, VIA A REVERSE MERGER OR OTHERWISE; AND/OR (D) NO LONGER BE SUBJECT TO THE REPORTING REQUIREMENTS OF THE SEC.

The Company’s management, which includes Oleg Firer, who beneficially owns more than 50% of the voting shares of the Company and can therefore approve any change in control, merger, acquisition, sale of the Company’s assets, change in the Company’s operations and/or a change in management, may take steps in the future to merge the Company with another entity, enter into a business combination with a separate operating company, affect the sale of all or substantially all of our assets, affect a change in our business plan, business direction, operations and/or management, affect a transaction whereby the Company is no longer subject to the reporting requirements of the Securities and Exchange Commission (the “SEC”) and/or enter into a reverse merger transaction. However, the Company has not entered into definitive agreements in connection with any of the above transactions, and there can be no assurance that any such transaction will occur in the future.

In the event that we do enter into a merger, acquisition, reverse merger, or combination transaction with a separate entity in the future, our majority shareholders will likely change and new shares of common or preferred stock could be issued resulting in substantial dilution to our then current shareholders. As a result, our new majority shareholders will likely change the composition of our Board of Directors and replace our current management. The new management, or the transaction, will likely result in a change in our business focus (which may no longer include or have any relationship to payment processing or related services) and we can make no assurances that our new management will be able to properly manage our direction or that this change in our business focus will be successful. If we do enter into a transaction and our new management fails to properly manage and direct our operations, we may be forced to scale back or abandon our operations, which will cause the value of our securities to decline or become worthless.

In the event that the Company is no longer subject to the reporting requirements of the SEC, the Company’s stock would likely trade on the Pinksheets and would likely have less liquidity on such market and may trade at a lower share price than it currently trades. In the event that the Company enters into a reverse merger transaction, new management would run the Company and would likely operate a new business which may result in a loss on your investment.

THE COMPANY PAYS A MONTHLY FEE TO A PARTY AFFILIATED WITH THE COMPANY’S MAJORITY SHAREHOLDER AND PRESIDENT, OLEG FIRER FOR DAY-TO-DAY SUPPORT OF THE COMPANY’S OPERATIONS.

Merchant Processing Services Corp (“MPS”) provides day-to-day support functions, office and servicing for the Company for a monthly payment of between $25,000 to $30,000 per month. MPS is a wholly-owned subsidiary of Merchant Capital Holding Corp, partly owned by Star Capital Holdings Corp. (“Star”). Oleg Firer, the Company’s Chief Executive Officer, serves as a Co-Chairman of Star. No compensation has been paid to Mr. Firer by Star as consideration for being a Co-Chairman. Leon Goldstein, President of Pinnacle Three Corp., a significant shareholder of the Company, is a founder of Star and also serves as a Co-Chairman. For the year ended March 31, 2010, the Company paid expenses to MPS in the amount of $315,000. Potential conflicts of interest and/or perceived conflicts of interest exist between Mr. Firer’s relationship with MPS and the Company, which could cause the value of the Company’s securities to decline in value.

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WE DEPEND ON VISA AND MASTERCARD REGISTRATION AND FINANCIAL INSTITUTION SPONSORS AND WE MUST COMPLY WITH THEIR STANDARDS TO MAINTAIN REGISTRATION. THE TERMINATION OF OUR REGISTRATION COULD REQUIRE US TO STOP PROVIDING PROCESSING SERVICES ALTOGETHER.

Our designation with Visa and MasterCard as a member service provider is dependent upon the sponsorship of member clearing banks, including Wells Fargo Bank, N.A., and our continuing adherence to the standards of the Visa and MasterCard credit card associations. In the event we fail to comply with these standards, Visa or MasterCard could suspend or terminate our designation as a member service provider. If these sponsorships are terminated and we are unable to secure another bank sponsor, we will not be able to process bankcard transactions. Because of the fact that the vast majority of the transactions we process involve Visa or MasterCard, the termination of our registration or any changes in the Visa or MasterCard rules that would impair our registration could require us to stop providing processing services altogether. This would severely impact our revenues, and with that the value of our Company.

WE DEPEND ON SALES AGENTS THAT DO NOT SERVE US EXCLUSIVELY AND HAVE THE RIGHT TO REFER MERCHANTS TO OUR COMPETITORS.

We rely primarily on the efforts of independent sales agents ("Sales Agents") to market our services to merchants seeking to establish an account with a payment processor in order to accept Credit, Debit, Electronic Benefit Transfer (EBT), Check Conversion and Gift & Loyalty transactions. Sales Agents are classified as either individuals or companies that seek to introduce both newly established and existing small, medium and large businesses including retailers, restaurants, supermarkets, petroleum stations and e-commerce retailers. Most of the Sales Agents that refer merchants to us are non-exclusive to us and therefore most of them have the right to refer merchants to other service providers. Our failure to maintain our relationships with our existing and future Sales Agents, and to recruit and establish new relationships with other Sales Agents, could adversely affect our revenues and growth, and increase our merchant attrition. This would lead to an increase in cost of revenues for us which would adversely impact net income.

INCREASES IN INTERCHANGE RATES MAY ADVERSELY AFFECT OUR PROFITABILITY.

Visa and MasterCard routinely increase their respective interchange rates each year. Interchange rates are also known as discount rates that are charged for transactions processed through Visa and MasterCard. Although we historically have reflected these increases in our pricing to merchants, there can be no assurance that merchants will continue to assume the entire impact of future increases or that transaction processing volumes will not decrease and merchant attrition increase as a result of these increases. If interchange rates increase to a point where it becomes unprofitable for us to enable merchants to accept Visa and MasterCard it would cause an increase in our cost of revenues and potentially make it unprofitable for us to continue without a change in our business plan.

INCREASES IN PROCESSING COSTS MAY ADVERSELY AFFECT OUR PROFITABILITY.

We are subject to certain contractual volume obligations that if not met, will cause our processing costs to increase and may therefore adversely affect our ability to attain and retain new and existing merchants. More information about our contractual obligations is located in the section of “Management’s Discussion and Analysis” entitled "Liquidity and Capital Resources."

HIGH LEVELS OF COMPETITION MAY HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

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MAINTAINING CURRENT REVENUE LEVELS IS DEPENDENT UPON FACTORS IMPACTING THE PETROLEUM INDUSTRY.

Over 37% of the Company’s revenue is derived from merchants in the petroleum industry. The Company therefore has a risk of revenue being adversely impacted by significant decreases in gasoline prices, increases in merchant strategies to have more consumers pay in cash, or other negative factors which adversely affect the petroleum industry.

INCREASED MERCHANT ATTRITION MAY HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

We experience attrition in our merchant base in the ordinary course of business resulting from several factors, including business closures and losses to competitors. Despite our retention efforts, increased merchant attrition may have a material adverse effect on our financial condition and results of operations. If we are unable to gain merchants to replace the ones we lose, we may be forced to change, curtail or abandon our business plan.

OUR OPERATING RESULTS ARE SUBJECT TO SEASONAL FLUCTUATIONS IN CONSUMER SPENDING PATTERNS.

We have experienced in the past, and expect to continue to experience, seasonal fluctuations in our revenues as a result of consumer spending patterns. Historically, revenues have been weaker during the first two quarters of the calendar year and stronger during the third and fourth quarters. If, for any reason, our revenues are below seasonal norms during the third or fourth quarter, our net income could be lower than expected. This could lead to a decrease in the value of our common stock.

WE MAY BECOME SUBJECT TO CERTAIN STATE TAXES FOR CERTAIN PORTIONS OF OUR FEES CHARGED TO MERCHANTS.

We, like other transaction processing companies, may be subject to state taxation of certain portions of our fees charged to merchants for our services. Application of this tax is an emerging issue in the transaction processing industry and the states have not yet adopted uniform guidelines. If in the future we are required to pay such taxes and are not able to pass this expense on to our merchant customers, our financial results could be adversely affected.

WE MAY BE SUBJECT TO LIABILITY DUE TO SECURITY RISKS BOTH TO USERS OF OUR MERCHANT SERVICES AND TO THE UNINTERRUPTED OPERATION OF OUR SYSTEMS.

Security and privacy concerns of users of electronic commerce such as our merchant services may inhibit the growth of the Internet and other online services as a means of conducting commercial transactions. We rely on secure socket layer technology, public key cryptography and digital certificate technology to provide the security and authentication necessary for secure transmission of confidential information. However, various regulatory and export restrictions may prohibit us from using the strongest and most secure cryptographic protection available and thereby expose us to a risk of data interception. While we believe that our business model minimizes our accessing, transmitting and storing consumer information, because some of our activities may involve the storage and transmission of confidential personal or proprietary information, such as credit card numbers, security breaches and fraud schemes could damage our reputation and expose us to a risk of loss and possible liability. In addition, our payment transaction services may be susceptible to credit card and other payment fraud schemes perpetrated by hackers or other criminals. If such fraudulent schemes become widespread or otherwise cause merchants to lose confidence in our services, or in Internet payment systems generally, our revenues could suffer.

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WE RELY ON THE INTERNET INFRASTRUCTURE, AND ITS CONTINUED COMMERCIAL VIABILITY, OVER WHICH WE HAVE NO CONTROL. ITS FAILURE COULD SUBSTANTIALLY UNDERMINE OUR BUSINESS STRATEGY.

Our success depends, in large part, on other companies maintaining the Internet system infrastructure, including maintaining a reliable network backbone that provides adequate speed, data capacity and security and to develop products that enable reliable Internet access and services. If the Internet continues to experience significant growth in the number of users, frequency of use and amount of data transmitted, the infrastructure of the Internet may be unable to support the demands placed on it, and as a result the Internet's performance or reliability may suffer. Because we rely heavily on the Internet, this would make our business less profitable.

WE MAY BE SUBJECT TO POTENTIAL LIABILITY FOR INFORMATION POSTED ON OUR CORPORATE WEBSITE.

The legal obligations and potential liability of companies which provide information by means of the Internet are not well defined and are evolving. Any liability of our company resulting from information posted on, or disseminated through, our corporate website could have a material adverse effect on our business, operating results and financial condition.

NEW AND POTENTIAL GOVERNMENTAL REGULATIONS DESIGNED TO PROTECT OR LIMIT ACCESS TO CONSUMER INFORMATION COULD ADVERSELY AFFECT OUR ABILITY TO PROVIDE THE SERVICES WE PROVIDE OUR MERCHANTS.

Due to the increasing public concern over consumer privacy rights, governmental bodies in the United States and abroad have adopted, and are considering adopting additional laws and regulations restricting the purchase, sale and sharing of personal information about customers. The laws governing privacy generally remain unsettled and it is difficult to determine whether and how existing and proposed privacy laws will apply to our business. Several states have proposed legislation that would limit the uses of personal information gathered using the Internet. Congress has also considered privacy legislation that could further regulate use of consumer information obtained over the Internet or in other ways. If legislation is passed by the individual states or Congress it would likely raise our cost of revenues, which would decrease our net profit.

OUR SYSTEMS AND OPERATIONS ARE VULNERABLE TO DAMAGE OR INTERRUPTION FROM FIRE, FLOOD, POWER LOSS, TELECOMMUNICATIONS FAILURE, BREAK-INS, EARTHQUAKE AND SIMILAR EVENTS OUTSIDE OF OUR CONTROL.

Our success depends, in part, on the performance, reliability and availability of our services. If our systems were to fail or become unavailable, such failure would harm our reputation, result in a loss of current and potential customers and could cause us to breach existing agreements. Our systems and operations could be damaged or interrupted by fire, flood, power loss, telecommunications failure, Internet breakdown, break-in, earthquake and similar events, and we would face significant damage as a result. In addition, our systems use sophisticated software which may in the future contain viruses that could interrupt service. For these reasons, we may be unable to develop or successfully manage the infrastructure necessary to meet current or future demands for reliability and scalability of our systems. If this happens, it is likely that we would lose customers and revenues would decrease.

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WE RELY ON KEY MANAGEMENT.

Our success depends upon the personal efforts and abilities of Oleg Firer, our President and Chief Executive Officer. Our ability to operate and implement our business plan is heavily dependent on the continued service of Mr. Firer, as well as our ability to attract, retain and motivate other qualified personnel, particularly in the areas of sales, marketing and management for our company. We face aggressive and continued competition for such personnel. We cannot be certain that we will be able to attract, retain and motivate such personnel in the future.

We have a three year employment agreement in place with Mr. Firer; however, we do not maintain key-man insurance on the life of Mr. Firer. If Mr. Firer were to resign or die, the loss could result in loss of sales, delays in new product and service development and diversion of management resources, and we could face high costs and substantial difficulty in hiring qualified successors and could experience a loss in productivity while any such successor obtains the necessary training and experience. The loss of Mr. Firer, and our inability to hire, retain and motivate qualified sales, marketing and management personnel for our company would have a material adverse effect on our business and operations.

OUR REVENUES ARE HIGHLY SENSITIVE TO OVERALL CHANGES IN THE ECONOMY AND CONSUMER SPENDING PATTERNS IN GENERAL.

As we receive a greater number of payment processing fees the more consumers spent at the locations of the merchants who are our clients, we are highly susceptible to downturns in the overall economy and changes in consumer spending. Due to the downturns in the credit markets, bankruptcies of several large employers, as well as overall layoffs in the global economy and general malaise in the global consumer economy, we expect our revenues for the near future to be highly volatile and most likely lower than for the same periods of fiscal 2010. As a result, our results of operations and the value of our securities could decline in value and/or become worthless.

RISKS RELATING TO OUR COMMON STOCK

SHAREHOLDERS MAY BE DILUTED SIGNIFICANTLY THROUGH OUR EFFORTS TO OBTAIN FINANCING AND SATISFY OBLIGATIONS THROUGH THE ISSUANCE OF ADDITIONAL SHARES OF OUR COMMON STOCK.

Wherever possible, our Board of Directors attempts to use non-cash consideration to satisfy obligations. This non-cash consideration may consist of restricted shares of our common stock. Our Board of Directors has authority, without action or vote of the shareholders, to issue all or part of the authorized but unissued shares of common stock. In addition, we may attempt to raise capital by selling shares of our common stock, possibly at a discount to market. These actions will result in dilution of the ownership interests of existing shareholders, may further dilute common stock book value, and that dilution may be material. Such issuances may also serve to enhance existing management’s ability to maintain control of the Company because the shares may be issued to parties or entities committed to supporting existing management.

OUR HISTORIC STOCK PRICE HAS BEEN VOLATILE AND THE FUTURE MARKET PRICE FOR OUR COMMON STOCK IS LIKELY TO CONTINUE TO BE VOLATILE DUE IN PART TO THE LIMITED MARKET FOR OUR SHARES, WHICH MAY MAKE IT DIFFICULT FOR YOU TO SELL OUR COMMON STOCK FOR A POSITIVE RETURN ON YOUR INVESTMENT.

The public market for our common stock has historically been very volatile. Any future market price for our shares is likely to continue to be very volatile. This price volatility may make it more difficult for you to sell shares when you want at prices you find attractive. We do not know of any one particular factor that has caused volatility in our stock price. However, the stock market in general has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies. Broad market factors, general economic and political conditions, and the investing public's negative perception of our business may reduce our stock price, regardless of our operating performance. Further, the market for our common stock is limited and we cannot assure you that a larger market will ever be developed or maintained.

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IF WE ARE LATE IN FILING OUR QUARTERLY OR ANNUAL REPORTS WITH THE SEC, WE MAY BE DE-LISTED FROM THE OVER-THE-COUNTER BULLETIN BOARD.

Pursuant to Over-The-Counter Bulletin Board ("OTCBB") rules relating to the timely filing of periodic reports with the SEC, any OTCBB issuer which fails to file a periodic report (Form 10-Q's or 10-K's) by the due date of such report (not withstanding any extension granted to the issuer by the filing of a Form 12b-25), three (3) times during any twenty-four (24) month period is automatically de-listed from the OTCBB. Such removed issuer would not be re-eligible to be listed on the OTCBB for a period of one-year, during which time any subsequent late filing would reset the one-year period of de-listing. Furthermore, any issuer delisted from the OTCBB more than one (1) time in any twenty-four (24) month period for failure to file a periodic report would be ineligible to be re-listed for a period of one-year year, during which time any subsequent late filing would reset the one-year period of de-listing. As we were late in filing our 10-K for the period ended March 31, 2010, if we are late in our filings two more times in the twenty-four (24) month period following March 31, 2010, or three times in any subsequent twenty-four (24) month period and are de-listed from the OTCBB, or if our securities are de-listed from the OTCBB two times in any twenty-four (24) month period for failure to file a periodic report, our securities may become worthless and we may be forced to curtail or abandon our business plan.

WE MAY INCUR SIGNIFICANT EXPENSES AS A RESULT OF BEING QUOTED ON THE OVER THE COUNTER BULLETIN BOARD, WHICH MAY NEGATIVELY IMPACT OUR FINANCIAL PERFORMANCE.

We incur significant legal, accounting and other expenses as a result of being listed on the Over the Counter Bulletin Board. The Sarbanes-Oxley Act of 2002, as well as related rules implemented by the Commission has required changes in corporate governance practices of public companies. We expect that compliance with these laws, rules and regulations, including compliance with Section 404 of the Sarbanes-Oxley Act of 2002 as discussed in the following risk factor, may substantially increase our expenses, including our legal and accounting costs, and make some activities more time-consuming and costly. As a result, there may be a substantial increase in legal, accounting and certain other expenses in the future, which would negatively impact our financial performance and could have a material adverse effect on our results of operations and financial condition.

OUR INTERNAL CONTROLS OVER FINANCIAL REPORTING ARE NOT CONSIDERED EFFECTIVE, WHICH COULD RESULT IN A LOSS OF INVESTOR CONFIDENCE IN OUR FINANCIAL REPORTS AND IN TURN HAVE AN ADVERSE EFFECT ON OUR STOCK PRICE.

Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, we are required to furnish a report by our management on our internal controls over financial reporting. Such report is required to contain, among other matters, an assessment of the effectiveness of our internal controls over financial reporting as of the end of the year, including a statement as to whether or not our internal controls over financial reporting are effective. This assessment must include disclosure of any material weaknesses in our internal controls over financial reporting identified by management. As we were unable to assert that our internal controls were effective as of March 31, 2010, investors could lose confidence in the accuracy and completeness of our financial reports, which in turn could cause our stock price to decline.

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OUR COMMON STOCK IS SUBJECT TO THE "PENNY STOCK" RULES OF THE SEC AND THE TRADING MARKET IN OUR SECURITIES IS LIMITED, WHICH MAKES TRANSACTIONS IN OUR STOCK CUMBERSOME AND MAY REDUCE THE VALUE OF AN INVESTMENT IN OUR STOCK.

The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a "penny stock," for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:

·	that a broker or dealer approve a person's account for transactions in penny stocks; and

·	the broker or dealer receives from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

In order to approve a person's account for transactions in penny stocks, the broker or dealer must:

·	obtain financial information and investment experience objectives of the person; and

·	make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the Commission relating to the penny stock market, which, in highlight form:

·	sets forth the basis on which the broker or dealer made the suitability determination; and

·	that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

Generally, brokers may be less willing to execute transactions in securities subject to the "penny stock" rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.

Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

WE CURRENTLY HAVE A SPORADIC, ILLIQUID, VOLATILE MARKET FOR OUR COMMON STOCK, AND THE MARKET FOR OUR COMMON STOCK MAY REMAIN SPORADIC, ILLIQUID, AND VOLATILE IN THE FUTURE.

We currently have a highly sporadic, illiquid and volatile market for our common stock, which market is anticipated to remain sporadic, illiquid and volatile in the future and will likely be subject to wide fluctuations in response to several factors, including, but not limited to:

	(1)	actual or anticipated variations in our results of operations;
	(2)	our ability or inability to generate new revenues;
	(3)	the number of shares in our public float;
	(4)	increased competition; and
	(5)	conditions and trends in the economy for consumer goods and credit card services.

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Furthermore, because our common stock is traded on the over the counter bulletin board, our stock price may be impacted by factors that are unrelated or disproportionate to our operating performance. These market fluctuations, as well as general economic, political and market conditions, such as recessions, interest rates or international currency fluctuations may adversely affect the market price of our common stock. Additionally, at present, we have a limited number of shares in our public float, and as a result, there could be extreme fluctuations in the price of our common stock. Additionally, at present, we have a limited number of shares in our public float, and as a result, there could be extreme fluctuations in the price of our common stock. Further, due to the limited volume of our shares which trade and our limited public float, we believe that our stock prices (bid, asked and closing prices) may not reflect the actual value of our common stock. Shareholders and potential investors in our common stock should exercise caution before making an investment in the Company.

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

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. (REMOVED AND RESERVED)

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibit Number Description of Exhibit

3.1	Articles of Incorporation of TerenceNet, Inc. dated October 11, 2000. (Incorporated by reference to Exhibit 3 to TerenceNet, Inc.'s Form 10-SB, as amended, filed with the Securities and Exchange Commission on April 5, 2002).

3.2	Bylaws of TerenceNet, Inc. (Incorporated by reference to Exhibit 4 to TerenceNet, Inc.'s Form 10-SB, as amended, filed with the Securities and Exchange Commission on April 5, 2002).

3.3	Certificate of Amendment of Articles of Incorporation (Incorporated by reference to Exhibit 3 to Atlantic Synergy, Inc.'s Form 8-K filed with the Securities and Exchange Commission on July 9, 2004).

3.4	Certificate of Designations of Acies Corporation Establishing the Designations, Preferences, Limitations and Relative Rights of Its Series A Preferred Stock (Incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed with the Securities and Exchange Commission on February 13, 2009).

3.5	Amended and Restated Certificate of Designation of the Company’s Series A Preferred Stock (Incorporated by reference to the Company’s Form 10-Q filed with the Securities and Exchange Commission on August 19, 2009).

3.6	Certificate of Amendment to Articles of Incorporation (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on April 22, 2010).

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4.1	Form of Series A Common Stock Purchase Warrant issued to investors pursuant to the February 3, 2005 private placement (Incorporated by reference to Exhibit 4.2 to the Company's Form 8-K filed with the Securities and Exchange Commission on February 8, 2005).

10.1	Exchange Agreement by and between Acies, Inc. and Atlantic Synergy, Inc. dated as of July 2, 2004 (Incorporated by reference to Exhibit 2 to Atlantic Synergy, Inc.'s Form 8-K/A filed with the Securities and Exchange Commission on July 12, 2004).

10.2	Year 2004 Stock Award Plan of Atlantic Synergy, Inc. (Incorporated by reference to Exhibit 4 to Atlantic Synergy, Inc.'s Form S-8 filed with the Securities and Exchange Commission on August 31, 2004).

10.3	Year 2004 Officer/Director/Employee Stock Award Plan of Atlantic Synergy, Inc. (Incorporated by reference to Exhibit 4 to Atlantic Synergy, Inc.'s Form S-8 filed with the Securities and Exchange Commission on September 13, 2004).

10.4

Form of Subscription Agreement by and between Atlantic Synergy, Inc. and the purchasers identified on the signature pages thereto dated as of September 2, 2004 (Incorporated by reference to the Company’s Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on March 4, 2005).

10.5	Investor Relations Agreement by and between Acies, Inc. and Investor Relations Network dated as of December 3, 2004 (Incorporated by reference to the Company’s Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on March 4, 2005).

10.6	Securities Purchase Agreement by and between the Company and the purchasers identified on the signature pages thereto dated as of February 3, 2005 (Incorporated by reference to Exhibit 4.1 to the Company's Form 8-K filed with the Securities and Exchange Commission on February 8, 2005).

10.7	Registration Rights Agreement by and between the Company and the purchasers identified on the signature pages thereto dated as of February 3, 2005 (Incorporated by reference to Exhibit 4.3 to the Company's Form 8-K filed with the Securities and Exchange Commission on February 8, 2005).

10.8	Employment Agreement by and between the Company and Oleg Firer dated as of May 5, 2006 (Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the Securities and Exchange Commission on May 12, 2006).

10.9	Employment Agreement by and between the Company and Yakov Shimon dated as of July 1, 2004 (Incorporated by reference to the Company’s Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on March 4, 2005).

10.10

Employment Agreement by and between the Company and Miron Guilliadov dated as of July 1, 2004 (Incorporated by reference to the Company’s Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on March 4, 2005).

10.11

Form of Subscription Agreement by and between GM Merchant Solutions, Inc. and the purchasers identified on the signature pages thereto dated as of June 2, 2004 (Incorporated by reference to the Company’s Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on March 4, 2005).

10.12

Employment Agreement by and between the Company and Jeffrey A. Tischler dated as of May 5, 2006 (Incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed with the Securities and Exchange Commission on May 12, 2006).

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10.13

Loan and Security Agreement by and between the Company and RBL Capital Group, LLC, dated October 31, 2006, providing a Term Loan Facility with a maximum borrowing of $2,000,000.00 (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on November 6, 2006).

10.14

Convertible Promissory Note with Pinnacle Three Corporation (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on July 21, 2008).

10.15

Settlement Agreement and Mutual Release Between Pinnacle Three Corporation and the Company (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on July 21, 2008).

10.16

Convertible Promissory Note with Pinnacle Three Corporation (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on September 29, 2008).

10.17

Convertible Promissory Note with Oleg Firer (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on September 29, 2008).

10.18

Lease Termination Agreement between CRP/Capstone 14 W Property Owner, L.L.C. and the Company (Incorporated by reference to the Company’s Form 10-Q filed with the Securities and Exchange Commission on November 17, 2008).

10.19

Convertible Promissory Note with Pinnacle Three Corporation. (Incorporated by reference to the Company’s Form 10-K filed with the Securities and Exchange Commission on July 14, 2009).

10.20

Employment Agreement with Oleg Firer (Incorporated by reference to the Company’s Form 10-Q filed with the Securities and Exchange Commission on August 19, 2009).

10.21

(First) 1st Amended and Restated Convertible Promissory Note with Pinnacle Three Corporation (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on September 25, 2009).

10.22

(Second) 1st Amended and Restated Convertible Promissory Note with Pinnacle Three Corporation (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on September 25, 2009).

10.23

1st Amended and Restated Convertible Promissory Note with Oleg Firer (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on September 25, 2009).

10.24

(First) 2nd Amended and Restated Convertible Promissory Note with Pinnacle Three Corporation (Incorporated by reference to the Company’s Form 10-Q filed with the Securities and Exchange Commission on November 20, 2009).

10.25

(Second) 2nd Amended and Restated Convertible Promissory Note with Pinnacle Three Corporation (Incorporated by reference to the Company’s Form 10-Q filed with the Securities and Exchange Commission on November 20, 2009).

10.26

2nd Amended and Restated Convertible Promissory Note with Oleg Firer (Incorporated by reference to the Company’s Form 10-Q filed with the Securities and Exchange Commission on November 20, 2009).

10.27

Employment Agreement with Steven Wolberg (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on March 4, 2010).

10.28

Stock Option Agreement with Steven Wolberg (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on March 4, 2010).

16.1	Letter from Amper, Politziner & Mattia, P.C. (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on July 30, 2008).

31	Certification by Chief Executive Officer and acting Chief Financial Officer pursuant to Sarbanes-Oxley Section 302 (filed herewith).

32	Certification by Chief Executive Officer and acting Chief Financial Officer pursuant to 18 U.S.C. Section 1350 (filed herewith).

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SIGNATURES

In accordance with the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	ACIES CORPORATION

Date: August 23, 2010	/s/ Oleg Firer
	Oleg Firer
	Chief Executive Officer and Chief Financial Officer

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ACIES CORP 10-Q