PTS INC/NV/ - FORM 10-K - March 31, 2010

Attached files

file	filename
EX-21 - PTS INC/NV/	exhibit21.htm
EX-32 - PTS INC/NV/	exhibit321.htm
EX-31 - PTS INC/NV/	exhibit311.htm
EX-31 - PTS INC/NV/	exhibit312.htm
EX-32 - PTS INC/NV/	exhibit322.htm

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

FORM 10-K

(Mark One)
x

ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2009

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 000-25485


PTS, INC.
(Exact name of registrant as specified in its charter)
Nevada	88-0380544
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

3355 Spring Mountain Road, Suite 66 Las Vegas, Nevada	89102
(Address of principal executive offices)	(Zip Code)
Issuer’s telephone number, including area code: (702) 997-3347
Securities registered under Section 12(b) of the Exchange Act:	None

Securities registered under Section 12(g) of the Exchange Act:	Common stock, par value $0.00001 per share
	(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the last 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See 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

The aggregate market value of the voting stock held by non-affiliates of the registrant as of March 26, 2010 was approximately $3,018,132 based upon the closing price of $0.0014 reported for such date on The OTC Bulletin Board.

As of March 26, 2010 the registrant had 2,157,808,278 outstanding shares of Common Stock.

Documents incorporated by reference: None.

TABLE OF CONTENTS


PART I		Page
Item 1.	Business	4
Item 1A.	Risk Factors	10
Item 1B.	Unresolved Staff Comments	13
Item 2.	Properties	13
Item 3.	Legal Proceedings	13
Item 4.	Submission of Matter to a Vote of Security Matters	13
PART II
Item 5.	Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	13
Item 6.	Selected Financial Data	14
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	19
Item 8.	Financial Statements and Supplementary Data	19
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	19
Item 9A.	Controls and Procedures	19
Item 9B.	Other Information	20
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	21
Item 11.	Executive Compensation	22
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	23
Item 13.	Certain Relationships and Related Transactions and Director Independence	24
Item 14.	Principal Accountant Fees and Services	24
PART IV
Item 15.	Exhibits, Financial Statement Schedules	24


	Signatures	27

PART I.

Forward-Looking Information

Much of the discussion in this Item is “forward looking” as that term is used in Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934. Actual operations and results may materially differ from present plans and projections due to changes in economic conditions, new business opportunities, changed business conditions, and other developments. Other factors that could cause results to differ materially are described in our filings with the Securities and Exchange Commission.

There are several factors that could cause actual results or events to differ materially from those anticipated, and include, but are not limited to, general economic, financial and business conditions, changes in and compliance with governmental laws and regulations, including various state and federal environmental regulations, our ability to obtain additional financing from outside investors and/or bank and mezzanine lenders, and our ability to generate sufficient revenues to cover operating losses and position us to achieve positive cash flow.

Readers are cautioned not to place undue reliance on the forward-looking statements contained herein, which speak only as of the date hereof. We believe the information contained in this Form 10-K to be accurate as of the date hereof. Changes may occur after that date. We will not update that information except as required by law in the normal course of its public disclosure practices.

ITEM 1.

BUSINESS.

RECENT DEVELOPMENT-ELIMINATE PTS, INC’S INTEREST IN DISABILITY ACCESS CORPORATION AND DISABILITY ACCESS CONSULTANTS, INC.

On February 23, 2010, PTS, Inc., entered into an Exchange and Settlement Agreement (the “Agreement”) with Mr. Peter Chin to resolve mutual obligations and liabilities. The effect of the agreement was that Mr. Peter Chin would resign from all positions and appointments in PTS, Inc. as of the close of business on February 23, 2010 and the Board would accept such resignation, and that further Peter Chin would forgive $502,699 worth of collective accumulated obligations for salary, advances and expenses from PTS, Inc. and would further exchange 4,863,333 PTS, Inc. Series A preferred shares (worth approximately $328,275 based on closing bid price at February 12, 2010) in exchange for 10,000,000 Series A preferred shares in Disability Access Corporation, held by PTS, Inc. (approximate value $1,000) plus 1,175,126,879 common shares in Disability Access Corporation (approximate value $117,513) held by PTS, Inc. plus all notes receivable (including debentures) held by PTS, Inc. in Disability Access Corporation and/or its subsidiary Disability Access Consultants, Inc. which collectively total $494,005 as of December 31, 2009. The net exchange would be an unaudited result of a non cash gain to PTS, Inc. in the approximate amount of $218,456 and eliminates PTS, Inc.’s interest in Disability Access Corporation as well as Disability Access Consultants, Inc. A copy of the Exchange and Settlement Agreement was filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on March 1, 2010.

RECENT DEVELOPMENT – ELIMINATE ONE MILLION DOLLAR PREFERRED SERIES E SHARES OBLIGATION TO BARBARA THORPE.

On February 1, 2010, Barbara Thorpe entered into an employment agreement with DAC, as a part of the agreement Ms. Thorpe was required to exchange her one million dollars worth of preferred series E shares in PTS for one million dollars worth of DBYC preferred series B shares. DBYC subsequently in settlement of its obligations to PTS, Inc for past management services, allocable fees, federal tax benefits and any other and all past present and/or future obligations of DBYC and DAC to PTS, Inc. exchanged the PTS, Inc preferred series E shares for such obligations.

Company Overview

PTS, Inc. (“our”, “us”, “we”, “PTS” or the “Company”) was a company in the development stage since its formation on June 12, 1996 until the second quarter of 2004. At that time, the Company commenced planned operations and began generating revenue. We were originally incorporated in the State of Nevada under the name “Med Mark, Inc” on November 5, 1996. On June 29, 1998, we filed articles of amendment changing our name to “Elast Technologies, Inc.” Pursuant to a merger agreement entered into on June 11, 2001, PTS, Inc. (“PTS”), a Nevada corporation, merged with Elast Technologies, Inc. PTS was the surviving company and changed its name to PTS, Inc.

On November 15, 2005, we acquired 100% of the outstanding common stock of Disability Access Consultants, Inc., (“DAC”) a California corporation pursuant to a securities exchange agreement.

DAC is a corporation with an extensive history of accessibility compliance consulting. DAC provides consultation to numerous state and local governmental entities and businesses. DAC has assisted city and county governments, the Federal government, school districts, and other public entities and municipalities. DAC has also assisted retail, commercial, recreational and corporate clients to comply with state and federal accessibility standards. DAC has developed transition/barrier removal plans, provided consultation and expert witness services. DAC offers both pro-active services as well as support and assistance for companies that are facing penalties and litigation for being out of compliance. DAC has assisted in litigation and has performed compliance audits for public entities and other businesses. To help companies and public entities meet the requirements of the Americans with Disabilities Act and other accessibility standards, DAC has developed proprietary software that is a management tool to simplify and streamline the accessibility compliance process. DAC has offices in Nevada, Northern California, Washington D.C. and Florida.

On October 17, 2006 DAC entered into an Agreement and Plan of Merger (the “Agreement of Merger”) with Disability Access Corporation f/k/a Power-Save Energy Corp. ("Power-Save") a Delaware corporation. Disability Access Corporation was acquired as a subsidiary of PTS. The Power-Save acquisition was completed during October, 2006. The purchase price for Power-Save of $150,000 was paid in September 2006. Since Power-Save had no assets or operations at the date of acquisition, the entire purchase price has been charged to expense during the fourth quarter of 2006.

We originally acquired 150,000,000 shares of Disability Access Corporation. We then effected a forward stock split of Disability Access Corporation. There are now 2,437,676,200 common shares outstanding. During December 2006, we distributed 126,189,788 shares of Disability Access Corporation to our stockholders on a then pro rata basis. We then owned approximately 48% of Disability Access Corporation common stock, but controlled a majority of voting power. Please note that this distribution was an unregistered transaction, and, as such, may have exposed PTS, Inc. to violations of the Securities Act. Therefore, there is a potential contingent liability for rescission demands by affected shareholders of PTS, Inc.

Under the terms of the Agreement of Merger, DAC was to be merged with and into Disability Access Corporation, with DAC continuing as the surviving corporation. Upon further consideration, our Board of Directors reconsidered the structure and decided, for various business optimization purposes that, instead of merging DAC with Disability Access Corporation, DAC became a wholly-owned subsidiary of Disability Access Corporation.

On January 11, 2007, DAC executed a Consulting Agreement with a quick service restaurant group (“Client”). The Client's name can not be disclosed due to the confidentiality clause in the agreement. Under the terms of the Consulting Agreement, DAC provides services to the Client including (i) comprehensive and accurate accessibility compliance survey consulting services for selected restaurant locations (ii) consulting and advising Client as an expert witness (iii) report DAC’s facts, conclusions and findings to Client (iv) inspection services (v) a license to use the DAC Software in accordance with the terms and conditions of the software license agreement(s) which include database relation services. In consideration of DAC’s services performed, the Client is expected to generate fees in excess of $5,000,000 over the life of the contract.

During the quarter ended June 30, 2008, the Company formed a new subsidiary, PTS Group Limited, a Hong Kong, China Company in preparations to acquire or to enter into a joint venture with a Chinese company. Management’s focus was to identify and enter into an agreement with the best possible acquisition candidate for the company and its shareholders. PTS Group Limited, a Hong Kong, China Company was dormant since inception and has been discontinued during the third quarter of 2009.

MATERIAL SUBSEQUENT EVENT

Subsequently in February of 2010 the Company undertook reorganization and restructuring efforts which resulted in the divestiture of the Company’s interest in Disability Access Corporation and in Disability Access Consultants Inc. through an exchange agreement with the Company’s former CEO Peter Chin. More particularly, on February 23, 2010, PTS, Inc., entered into an Exchange and Settlement Agreement (the “Agreement”) with Mr. Peter Chin to resolve mutual obligations and liabilities. The effect of the agreement was that Mr. Peter Chin would resign from all positions and appointments in PTS, Inc. as of the close of business on February 23, 2010 and the Board would accept such resignation, and that further Peter Chin would forgive $502,699 worth of collective accumulated obligations for salary, advances and expenses from PTS, Inc. and would further exchange 4,863,333 PTS, Inc. Series A preferred shares (worth approximately $328,275 based on closing bid price at February 12, 2010) in exchange for 10,000,000 Series A preferred shares in Disability Access Corporation, held by PTS, Inc. (approximate value $1,000) plus 1,175,126,879 common shares in Disability Access Corporation (approximate value $117,513) held by PTS, Inc. plus all notes receivable (including debentures) held by PTS, Inc. in Disability Access Corporation and/or its subsidiary Disability Access Consultants, Inc. which collectively total $494,005 as of December 31, 2009. The net exchange would be an unaudited result of a non cash gain to PTS, Inc. in the approximate amount of $218,456 and eliminates PTS, Inc.’s interest in Disability Access Corporation as well as Disability Access Consultants, Inc.

On February 23, 2010, the Registrant accepted the resignations of Peter Chin as the Registrant’s chief executive officer, chief financial officer and chairman of the board of directors. Mr. Chin’s resignations were in connection with the consummation of the Exchange and Settlement Agreement as set forth above and do not arise from any disagreement on any matter relating to the Registrant’s operations, policies or practices, nor regarding the general direction of the Registrant. Effective as of the same date the Registrant elected and appointed Marc Pintar as interim chief executive officer, interim chief financial officer and interim chairman of the board of directors of the Registrant.

The Company retained Mr. Chin as a consultant to ensure an easy transition. Mr. Chin received compensation of 40,000,000 shares of S-8 shares of the Company’s common stock to prepare and facilitate transition.

On February 28, 2010, the Registrant accepted the resignation from Connie Kim as the secretary and a member of the board of directors of the Registrant. Effective as of the same date, to fill the vacancy created by Ms. Kim’s resignation, Marc Pintar was appointed interim secretary. At this time, no one has been chosen to fill the vacancy on the board of directors left by Ms. Kim.

It should also be noted that the Company has discontinued all activities, past and prospective, for the following inactive subsidiaries: PTS Card Solutions, Inc., Glove Box, Inc., PTS Global Capital, Inc., PTS Technologies, Inc. and PTS Group Limited.

Biographical information for Marc Pintar

With over 15 years of business experience Marc Pintar began his career at Farmers Insurance as the youngest member of the management team in the company’s history. Marc went on to train divisions at GE in 2001-2003 and American Family Insurance in 2003-2006, resulting in a 5%-8% increase in recovery. In late 2006 Marc focused on his MBA. Marc has traveled extensively, world-wide, and lived overseas for nine months in 2007. While abroad he gained knowledge in global economics and international finance working as an independent consultant. He has proven abilities in analysis, negotiations, strategic management and leadership. After receiving his MBA in 2008 Marc worked as an independent management consultant where he decreased overall costs by $1,200,000 annually for his client. Over the years Marc has been a key member of several start-up companies including a private Arizona consulting firm in 2009 as the COO, where he increased workforce productivity, influenced growth, and reduced turnover. In 2009 Marc continued to work as an independent consultant and assisted in bringing public companies current and holds officer and director positions in several public companies including Reynaldo’s Mexican Food Company, Inc., Videolocity International, Inc., Zamage Digital Art Imaging, Inc., Eline Entertainment Group, Inc. Global MedicalProducts Holdings, Inc., and Skybridge Technology Group, Inc. Marc holds a Bachelor of Science degree in Management Systems (operation management) from Arizona State University, a MBA degree, with honors, from Regis University, and received his Six Sigma Greenbelt Certification.

Post the divestiture, Management’s focus is to identify and enter into a business combination for the best interest of the Company and its shareholders. During the initial post divestiture period the company will become a development stage company and seek, amongst its business opportunities an agreement with the best possible acquisition and/or candidate, in the opinion of Management and the Board of Directors, for the company and its shareholders.

Business Plan Post Subsequent Event and Acquisition Strategy

The following discussion and analysis provides information which our management believes to be relevant to an assessment and understanding of our results of operations and financial condition. This discussion should be read together with our financial statements and the notes to financial statements, which are included in this report. THE FOLLOWING SHOULD BE READ WITH CAUTION AS OF FEBRUARY 23, 2010. THE COMPANY EFFECTED THE DIVESTITURE OF DISABILITY ACCESS CORPORATON (DBYC) AND IT’S WHOLLY OWNED SUBSIDIARY DISABILITY ACCESS CONSULTANTS, INC. (DAC) AS DETAILED UNDER "RECENT DEVELOPMENTS-ELIMINATE PTS’S INTEREST IN DISABILITY ACCESS CORPORATION AND DISABILITY ACCESS CONSULTANTS, INC.” CONSEQUENTLY WE CURRENTLY HAVE NO OWNERSHIP INTEREST IN DBYC AND DAC. WE HAVE NO OPERATING BUSINESS AND ARE A "DEVELOPMENT" COMPANY WITH NO MATERIAL ASSETS.

Effective February 2010, our board of directors determined that the implementation of our business plan was no longer financially feasible. At such time, we discontinued the implementation of our prior business plan and are now pursuing an acquisition strategy, whereby we will seek to either acquire undervalued businesses and/or merge with businesses with a history of operating revenues in markets that provide room for growth ("Acquisition Strategy").

Our Acquisition Strategy is focused on pursuing a strategy of growth by acquiring both undervalued businesses and/or merging with businesses with a history of operating revenues. We will utilize several criteria to evaluate prospective acquisitions including whether the business to be acquired (1) is an established business with viable services or products, (2) has an experienced and qualified management team, (3) has room for growth and/or expansion into other markets, (4) is accretive to earnings, (5) offers the opportunity to achieve and/or enhance profitability, and (6) increases shareholder value.

In connection with our Acquisition Strategy, we expect to encounter intense competition from other entities having business objectives similar to ours, including: venture capital firms, blind pool companies, large industrial and financial institutions, small business investment companies and wealthy individuals. Many of these entities are well-established and have greater experience, financial resources and technical knowledge than us. Our limited financial resources may compel us to select certain less attractive acquisition prospects than those of our competitors.

We believe that our future is dependent upon the consummation of a merger, acquisition or other business combination between us and a viable operating entity. There can be no assurance that we will be able to complete any merger, acquisition or other business combination between us and a viable operating entity. Additionally, management believes that we may need to raise additional funds through equity or debt financing to complete a merger, acquisition or other business combination between us and a viable operating entity. There can be no assurance that we will be able to successfully complete an equity or debt financing to complete an acquisition, merger or other business combination between us and a viable operating entity.

Business Plan Prior to Subsequent Event

Disability Access Consultants, Inc. (“DAC”), out of an effort to create a system to facilitate and expedite the processes related to inspections based on the regulatory standards for the American with Disabilities Act (ADA), has developed a proprietary web-centric process which can be used for such purpose. In addition to its original purpose, the process can also be adapted for other areas of regulatory inspection and requirements. Though DAC’s original business is founded on performing ADA inspections, its efforts to automate the inspection process have resulted in an interactive system which can be readily adapted to a wide range of other regulatory required inspection areas such as but not limited to: Building Inspections, Health Inspections, Mine Safety, OSHA, Fire Inspections, etc.

DAC offers a full continuum of accessibility compliance services, software and automated solutions to comply with the requirements for mandated and recommended services for individuals with disabilities in accordance with federal, state and local laws and regulations. Services are provided to a broad spectrum and growing number of clients as the concept of “ADA is Everyone’s Business” integrates into a large network of businesses and public entities.

Included in DAC’s automated solution for data collection, processing and reporting is compliance with state and federal accessibility regulations and codes. DAC currently uses DACTrak by our staff to inspect sites and “process” a compliance report. DACTrak provides a web based solution for the client to view, interact and manage their compliance data. AcTrak was originally intended to be the intake portion of the software that utilized the labtop tablet. DACTrak was the automatically generated report and the report management features that utilized the web. Over time, AcTrak has blended into DACTrak and the terms are being used in a similar capacity and reference. The use of AcTrak was originally designed as a term for using the software on the pc tablet for the actual inspection process. DACTrak was designed as the data management portion of the software for the clients to update and manage their report. To avoid confusion, the terms AcTrak and DACTrak were “blended” or combined to refer to the same software, regardless of their use. The software is now named DACTrak. The term DACTrak will be utilized in this document, as applicable.

Business Strategy Prior to Subsequent Event

Long range business opportunities include potential expansion of current DAC accessibility and ADA compliance products and services into a large market arena that includes other regulatory areas in addition to the ADA. The business strategy includes regulatory products in addition to the ADA. Our software expansion will be targeted for specific industry standards that may include, but are not limited to: building officials, code enforcement, insurance industry, risk managers, OSHA, insurance carriers, nuclear industry, FEMA, federal government, title insurance, banking and accounting. The list of potential clients and markets represents a large market potential. Revenue generation from the various areas of our current and new products will come from: Software licensing, Software training, Online and Telephone support, Data Storage and Client device utilization. DAC currently has insurance carriers, building officials, code enforcement, risk managers, city and county governments, federal government as clients for ADA and state accessibility regulations, the software expansion will target content areas and other needs beyond accessibility for each industry. We have placed on hold development plans for products related to Fair Housing, which are for similar product services and systems comparable in nature and method to our existing ADA software and services. Pending resource availability, business viability and market demand the Fair Housing project will be re-evaluated and reactivated as conditions warrant.

It should be noted that the following sections are written to read as of December 31, 2009 and should be read with the understanding that as a result of the above disclosed “Material Subsequent Event” that DBYC and DAC are no longer affiliated or associated with PTS, Inc.

Employees

PTS, Inc. currently has one employee and will seek additional employees if and when necessary and the Company has utilized and will continue to utilize independent consultants on an as needed basis

Acquisition Objectives

In addition to the DAC business (which separation was reported above as a part of the Material Subsequent Event disclosure), we also continue to seek, investigate and, if such investigation warrants, acquire an interest in business opportunities presented to us by persons or firms who or which desire to seek the perceived advantages of a corporation which is registered under the Securities Exchange Act of 1934, as amended. We do not restrict our search to any specific business, industry or geographical location and we may participate in a business venture of virtually any kind or nature.

We may seek a business opportunity with entities which have recently commenced operations, or which wish to utilize the public marketplace in order to raise additional capital in order to expand into new products or markets, to develop a new product or service or for other corporate purposes. We may acquire assets and establish wholly owned subsidiaries in various businesses or acquire existing businesses as subsidiaries.

As part of our investigation of potential merger candidates, our officers and directors will meet personally with management and key personnel, may visit and inspect material facilities, obtain independent analysis or verification of certain information provided, check references of management and key personnel and take other reasonable investigative measures, to the extent of our financial resources and management expertise. The manner in which we participate in an opportunity will depend on the nature of the opportunity, the respective needs and desires of us and other parties, the management of the opportunity, our relative negotiation strength and that of the other management.

We intend to concentrate on identifying preliminary prospective business opportunities that may be brought to our attention through present associations of our officers and directors, or by our shareholders. In analyzing prospective business opportunities, we will consider such matters as the available technical, financial and managerial resources; Sarbanes-Oxley Act of 2002 compliance; working capital and other financial requirements; history of operations, if any; prospects for the future; nature of present and expected competition; the quality and experience of management services which may be available and the depth of that management; the potential for further research, development or exploration; specific risk factors not now foreseeable but which then may be anticipated to impact our proposed activities; the potential for growth or expansion; the potential for profit; the perceived public recognition or acceptance of products, services or trades; name identification; and other relevant factors.

Our officer and director will meet personally with management and key personnel of the business opportunity as part of our investigation. We will not acquire or merge with any company for which audited financial statements cannot be obtained within a reasonable period of time after closing of the proposed transaction, as required by the Exchange Act.

We will not restrict our search to any specific kind of firms, but may acquire a venture which is in its preliminary or development stage, which is already in operation, or which is in essentially any stage of its corporate life. It is impossible to predict at this time the status of any business in which we may become engaged, in that such business may need to seek additional capital, may desire to have its shares publicly traded or may seek other perceived advantages which we may offer.

Other Business Developments

Key Personnel

The Company’s future financial success depends to a large degree upon the efforts of Mr. Marc Pintar, our sole officer and director. Mr. Pintar will begin the implementation of a comprehensive restructuring plan to help improve the dynamics of the Company. Mr. Pintar brings worldwide business exposure, creative developments and a new dynamic to the future of PTSH. Mr. Pintar’s skills, experience, and connections should provide PTSH with a new vision and opportunities that should position the company for new levels of growth. Mr. Pintar will focus on improving the Company’s balance sheet by reducing/eliminating debt and streamlining the Company’s internal operations before executing any growth plan. The loss of Mr. Pintar could have an adverse effect on our business and our chances for profitable operations. While we intend to employee additional management and marketing personal, there can be no assurance that we will be successful in attracting and retaining the persons needed.

Our Financial Results May Be Affected by Factors Outside of Our Control

Our future operating results may vary significantly from quarter to quarter due to a variety of factors, many of which are outside our control. Our anticipated expense levels are based, in part, on our estimates of future revenues and may vary from our projections. We may be unable to adjust spending rapidly enough to compensate for any unexpected revenues shortfall. Accordingly, any significant shortfall in revenues in relation to our planned expenditures would materially adversely affect our business, operating results, and financial condition.

We cannot predict with certainty our revenues and operating results. Further, we believe that period-to-period comparisons of our operating results are not necessarily a meaningful indication of future performance.

Corporate Offices

Our executive office is located at 3355 Spring Mountain Road, Suite 66, Las Vegas, Nevada 89102. For corporate information via email: mpintar@cox.net

ITEM 1A. RISK FACTORS.

An investment in our common stock involves a high degree of risk. Investors should carefully consider the risks described below before deciding to purchase shares of our common stock. If any of the events, contingencies, circumstances or conditions described in the risks below actually occurs, our business, financial condition or results of operations could be seriously harmed.

Need for ongoing financing.

We will need additional capital to continue our operations and will endeavor to raise funds through the sale of equity shares and revenues from operations.

There can be no assurance that we will continue to generate revenues from operations or obtain sufficient capital on acceptable terms, if at all. Failure to obtain such capital or generate such operating revenues would have an adverse impact on our financial position and results of operations and ability to continue as a going concern. Our operating and capital requirements during the next fiscal year and thereafter will vary based on a number of factors, including the level of sales and marketing activities for our services and products. There can be no assurance that additional private or public finances, including debt or equity financing, will be available as needed or, if available, on terms favorable to us. Any additional equity financing may be dilutive to stockholders and such additional equity securities may have rights, preferences or privileges that are senior to those of our existing common stock.

Furthermore, debt financing, if available, will require payment of interest and may involve restrictive covenants that could impose limitations on our operating flexibility. Our failure to successfully obtain additional future funding may jeopardize our ability to continue our business and operations.

If we raise additional funds by issuing equity securities, existing stockholders may experience a dilution in their ownership. In addition, as a condition to giving additional funds to us, future investors may demand, and may be granted, rights superior to those of existing stockholders.

Inflation.

In our opinion, inflation has not had a material effect on our financial condition or results of our operations.

Trends, risks and uncertainties.

We have sought to identify what we believe to be the most significant risks to our business, but we cannot predict whether, or to what extent, any of such risks may be realized nor can we guarantee that we have identified all possible risks that might arise. Investors should carefully consider all of such risk factors before making an investment decision with respect to our common stock.

Cautionary factors that may affect future results.

We provide the following cautionary discussion of risks, uncertainties and possible inaccurate assumptions relevant to our business and our products. These are factors that we think could cause our actual results to differ materially from expected results. Other factors besides those listed here could adversely affect us.

Lack of independent directors.

We cannot guarantee that our board of directors will have a majority of independent directors in the future. In the absence of a majority of independent directors, our executive officers, could establish policies and enter into transactions without independent review and approval thereof. This could present the potential for a conflict of interest between us and our stockholders generally and the controlling officers, stockholders or directors.

Limitation of liability and indemnification of officers and directors.

Our officer and director is required to exercise good faith and high integrity in our management affairs. Our articles of incorporation provide, however, that our officer and directors shall have no liability to our stockholders for losses sustained or liabilities incurred which arise from any transaction in their respective managerial capacities unless they violated their duty of loyalty, did not act in good faith, engaged in intentional misconduct or knowingly violated the law, approved an improper dividend or stock repurchase, or derived an improper benefit from the transaction. Our articles and bylaws also provide for the indemnification by us of the officer and directors against any losses or liabilities they may incur as a result of the manner in which they operate our business or conduct the internal affairs, provided that in connection with these activities they act in good faith and in a manner that they reasonably believe to be in, or not opposed to, our best interests, and their conduct does not constitute gross negligence, misconduct or breach of fiduciary obligations.

Management of potential growth.

We may experience rapid growth which will place a significant strain on our managerial, operational, and financial systems resources. To accommodate our current size and manage growth, we must continue to implement and improve our financial strength and our operational systems, and expand, train and manage our sales and distribution base. There is no guarantee that we will be able to effectively manage the expansion of our operations, or that our facilities, systems, procedures or controls will be adequate to support our expanded operations. Our inability to effectively manage our future growth would have a material adverse effect on us.

We pay no cash dividends.

We have never declared nor paid cash dividends on our capital stock. We currently intend to retain any earnings for funding growth; however, these plans may change depending upon capital raising requirements.

We believe that we do not have any material exposure to interest or commodity risks. Our financial results are quantified in U.S. dollars and our obligations and expenditures with respect to our operations are incurred in U.S. dollars. Although we do not believe we currently have any materially significant market risks relating to our operations resulting from foreign exchange rates, if we enter into financing or other business arrangements denominated in currency other than the U.S. dollars, variations in the exchange rate may give rise to foreign exchange gains or losses that may be significant.

We do not use financial instruments for trading purposes and we are not a party to any leveraged derivatives.

Contingent Liability for Securities Act Violation

During December 2006, we distributed 126,189,788 shares of Disability Access Corporation to our stockholders on a pro rata basis. Please note that this distribution was an unregistered transaction, and, as such, may have exposed PTS, Inc. to violations of the Securities Act. Therefore, there is a potential contingent liability for rescission demands by affected shareholders of PTS, Inc.

Risks Relating to Our Business

We are subject to the requirements of section 404 of the Sarbanes-Oxley Act. If we are unable to timely comply with section 404 or if the costs related to compliance are significant, our profitability, stock price and result of operations and financial condition could be materially adversely affected.

We are required to comply with the provisions of Section 404 of the Sarbanes-Oxley Act of 2002, which require us to maintain an ongoing evaluation and integration of the internal controls of our business. We were required to document and test our internal controls and certify that we are responsible for maintaining an adequate system of internal control procedures for the year ended December 31, 2008 and all subsequent years. In subsequent years, our independent registered public accounting firm may be required to opine on those internal controls and management’s assessment of those controls. In the process, we may identify areas requiring improvement, and we may have to design enhanced processes and controls to address issues identified through this review.

We cannot be certain that we will be able to successfully complete the procedures, certification and attestation requirements of Section 404 or that our auditors will not have to report a material weakness in connection with the presentation of our financial statements. If we fail to comply with the requirements of Section 404 or if our auditors report such material weakness, the accuracy and timeliness of the filing of our annual report may be materially adversely affected and could cause investors to lose confidence in our reported financial information, which could have a negative affect on the trading price of our common stock. In addition, a material weakness in the effectiveness of our internal controls over financial reporting could result in an increased chance of fraud and the loss of customers, reduce our ability to obtain financing and require additional expenditures to comply with these requirements, each of which could have a material adverse effect on our business, results of operations and financial condition.

Furthermore, we believe that the out-of-pocket costs, the diversion of management’s attention from running the day-to-day operations and operational changes caused by the need to comply with the requirements of Section 404 of the Sarbanes-Oxley Act could be significant. If the time and costs associated with such compliance exceed our current expectations, our results of operations could be adversely affected.

We are not likely to succeed unless we can overcome the many obstacles we face.

Investors should be aware of the difficulties, delays and expenses we encounter, many of which are beyond our control, including unanticipated market trends, employment costs, and administrative expenses. We cannot assure our investors that our proposed business plans as described in this report will materialize or prove successful, or that we will ever be able to finalize development of our products or services or operate profitably. If we cannot operate profitably, you could lose your entire investment. As a result of the nature of our business, initially we expect to sustain substantial operating expenses without generating significant revenues.

Our acquisition strategy involves a number of risks.

We intend to pursue growth through the opportunistic acquisition of companies or assets that will enable us to expand our service lines to provide more cost-effective customer solutions. We routinely review potential acquisitions. This strategy involves certain risks, including difficulties in the integration of operations and systems, the diversion of our management’s attention from other business concerns, and the potential loss of key employees of acquired companies. We may not be able to successfully acquire, and/or integrate acquired businesses into our operations.

ITEM 1B.

UNRESOLVED STAFF COMMENTS

None.

ITEM 2.

PROPERTIES.

The Company owns no real property. We lease office space at 3355 Spring Mountain Road, Suite 66, Las Vegas, Nevada 89102, on a month-to-month basis at a rate of US $375.00 per month. Management believes that its facilities are adequate for its present business.

ITEM 3.

LEGAL PROCEEDINGS.

None.

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None

PART II.

ITEM 5.

MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

The Company’s Common Stock is traded on the OTCBB (Over-The-Counter Bulletin Board) under the symbol “PTSH”. The following table sets forth the trading history of the Common Stock on the Bulletin Board for each quarter of the years ended December 31, 2009 and 2008, as reported by Dow Jones Interactive. The quotations reflect inter-dealer prices without retail mark-up, markdown or commission and may not represent actual transactions.


Calendar Year 2008	High	Low
First Quarter Second Quarter Third Quarter Fourth Quarter	0.002 0.002 0.001 0.0009	0.002 0.002 0.001 0.0007
Calendar Year 2009	High	Low
First Quarter Second Quarter Third Quarter Fourth Quarter	0.0006 0.001 0.001 0.001	0.0006 0.0008 0.001 0.0009

As of March 26, 2010, we had 2,157,808,278 shares of our common stock outstanding. Our shares of common stock are held by approximately 311 stockholders of record. The number of record holders was determined from the records of our transfer agent and does not include beneficial owners of common stock whose shares are held in the names of various security brokers, dealers, and registered clearing agencies.

Section 15(g) of the Exchange Act

The shares of our common stock are covered by Section 15(g) of the Exchange Act, and Rules 15g-1 through 15g-6 promulgated thereunder, which impose additional sales practice requirements on broker-dealers who sell our securities to persons other than established customers and accredited investors.

Rule 15g-2 declares unlawful any broker-dealer transactions in “penny stocks” unless the broker-dealer has first provided to the customer a standardized disclosure document.

Rule 15g-3 provides that it is unlawful for a broker-dealer to engage in a “penny stock” transaction unless the broker-dealer first discloses and subsequently confirms to the customer the current quotation prices or similar market information concerning the penny stock in question.

Rule 15g-4 prohibits broker-dealers from completing “penny stock” transactions for a customer unless the broker-dealer first discloses to the customer the amount of compensation or other remuneration received as a result of the penny stock transaction.

Rule 15g-5 requires that a broker-dealer executing a “penny stock” transaction, other than one exempt under Rule 15g-1, disclose to its customer, at the time of or prior to the transaction, information about the sales person’s compensation.

Our common stock may be subject to the foregoing rules. The application of the “penny stock” rules may affect our stockholders’ ability to sell their shares because some broker-dealers may not be willing to make a market in our common stock because of the burdens imposed upon them by the “penny stock” rules.

The following table provides information about purchases by us and our affiliated purchasers during the year ended December 31, 2009 of equity securities that are registered by us pursuant to Section 12 of the Securities Exchange Act of 1934:


Small Business Issuer Purchases of Equity Securities
	(a)	(b)	(c)	(d)
Period	Total number of shares (or units) purchased	Average price paid per share (or unit)	Total number of shares (or units) purchased as part of publicly announced plans or programs	Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs
January 1, 2009 – December 31, 2009	-0-	-0-	-0-	-0-
Total	-0-	-0-	-0-	-0-

ITEM 6.

SELECTED FINANCIAL DATA.

Not Applicable.

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion and analysis provides information which our management believes to be relevant to an assessment and understanding of our results of operations and financial condition. This discussion should be read together with our financial statements and the notes to financial statements, which are included in this report. THE FOLLOWING SHOULD BE READ WITH CAUTION AS OF FEBRUARY 23, 2010. THE COMPANY EFFECTED THE DIVESTITURE OF DISABILITY ACCESS CORPORATON (DBYC) AND IT’S WHOLLY OWNED SUBSIDIARY DISABILITY ACCESS CONSULTANTS, INC. (DAC) AS DETAILED UNDER "RECENT DEVELOPMENTS-ELIMINATE PTS’ INTEREST IN DISABILITY ACCESS CORPORATION AND DISABILITY ACCESS CONSULTANTS, INC.” CONSEQUENTLY WE CURRENTLY HAVE NO OWNERSHIP INTEREST IN DBYC AND DAC. WE HAVE NO OPERATING BUSINESS AND ARE A "DEVELOPMENT" COMPANY WITH NO MATERIAL ASSETS.

Going Concern

On February 23, 2010, the Company effected the divestiture of its Disability Access Corporation (“DBYC”) and its wholly owned subsidiary Disability Access Consultants, Inc. (“DAC”) as detailed under “Recent Developments” eliminate PTS’ interest in Disability Access Corporation and Disability Access Consultants, Inc. Consequently, we currently have no operating business and no assets. At present, we have insufficient capital on hand to fund our operations through 2010. The foregoing matters raise substantial doubt about our ability to continue as a going concern.

The following discussion should be read in conjunction with other sections of this Form 10-K including Part 1, “Item 1: Business” and Part II, “Item 8: Financial Statements and Supplementary Data.” Various sections of management’s discussion and analysis (“MD&A”) contains statements that are forward-looking. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially due to factors discussed in this report, as well as factors not within our control. We undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in our expectations.

Our MD&A is provided as a supplement to our audited financial statements to help provide an understanding of our financial condition, changes in financial condition and results of operations. The MD&A section is organized as follows:

Overview. This section provides a general description of the Company's business, as well as recent developments that we believe are important in understanding our results of operations as well as anticipating future trends in our operations.

Critical Accounting Policies. This section provides an analysis of the significant estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosure of contingent assets and liabilities.

Results of Operations. This section provides an analysis of our results of operations for the year ended December 31, 2009 compared to the year ended December 31, 2008. A brief description of certain aspects, transactions and events is provided.

Liquidity and Capital Resources. This section provides an analysis of our financial condition and cash flows as of and for the year ended December 31, 2009.

Overview

PTS, Inc. (“our”, “us”, “we”, “PTS” or the “Company”) was a company in the development stage since its formation on June 12, 1996 until the second quarter of 2004. At that time the Company commenced planned operations and began generating revenue. We were originally incorporated in the State of Nevada under the name “Med Mark, Inc” on November 5, 1996. On June 29, 1998, we filed articles of amendment changing our name to “Elast Technologies, Inc.” Pursuant to a merger agreement entered into on June 11, 2001, PTS, Inc. (“PTS”), a Nevada corporation, merged with Elast Technologies, Inc. PTS was the surviving company and changed its name to PTS, Inc.

On November 15, 2005, we acquired 100% of the outstanding common stock of Disability Access Consultants, Inc., (“DAC”) a California corporation pursuant to a securities exchange agreement.

While the above discussion is relevant to disposition of the Company at December 31, 2009, subsequently the Company divested its interest in DBYC and DAC in the first quarter 2010. With the divestiture, the Company has become a development stage company and is in the process of seeking business opportunities inclusive of merger and/or acquisitions that Management believes will bring value and business opportunity to the Company.

Critical Accounting Policies.

The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect our reported assets, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities. We base our estimates and judgments on historical experience and on various other assumptions we believe to be reasonable under the circumstances. Future events, however, may differ markedly from our current expectations and assumptions. While there are a number of significant accounting policies affecting our consolidated financial statements, we believe the following critical accounting policies involve the most complex, difficult and subjective estimates and judgments.

Stock-Based Compensation

We account for our stock based compensation under ASC 718 “Compensation – Stock Compensation” using the fair value based method. Under this method, compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. This guidance establishes standards for the accounting for transactions in which an entity exchanges it equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments.

We use the fair value method for equity instruments granted to non-employees and use the Black-Scholes model for measuring the fair value of options. The stock based fair value compensation is determined as of the date of the grant or the date at which the performance of the services is completed (measurement date) and is recognized over the vesting periods.

Potential Derivative Instruments

We periodically assess our financial and equity instruments to determine if they require derivative accounting. Instruments which may potentially require derivative accounting are conversion features of debt and common stock equivalents in excess of available authorized common shares.

We have determined that the conversion features of our debt instruments are not derivative instruments because they are not readily convertible to cash based on our historical trading volume.

We have determined that common stock equivalents in excess of available authorized common shares are not derivative instruments due to the fact that an increase in authorized shares is within our control because our chief executive officer, Peter Chin, and his spouse control over 50% of our voting power.

Results of Operations.

NOTE AS A RESULT OF THE DIVESTITURE OF THE COMPANY’S INTEREST IN DAC, IN THE FIRST QUARTER OF 2010, THE OPERATING RESULTS ARE FOR PURE HISTORICAL ACCOUNTING REFERENCE AND HAVE NO MEANING OR RELEVANCE FOR CURRENT OR FUTURE CONSIDERATIONS RELATED TO THE COMPANY.

Year Ended December 31, 2009 compared to the Year Ended December 31, 2008.

Revenue

Total revenue was $1,438,580 for the year ended December 31, 2009 compared to $1,417,724 during the year ended December 31, 2008, an increase of $20,856, or 1%. Revenue recognized in 2009 on the completion of fourth quarter 2008 projects was offset by a decrease in 2009 inspections and projects, due to delays in client implementation. As ADA litigation continues to increase across the United States, and the Federal Government continues to tie Federal funding to requiring ADA compliance the Company expects to see both continued growth and demand for its range of products and services.

Cost of Revenue

Cost of revenue for the year ended December 31, 2009 increased by $13,916, or 3%, to $569,163 for the year ended December 31, 2009 from $555,247 for the year ended December 31, 2008. The components of cost of revenue are compensation costs of inspection staff and travel expense. Compensation costs of inspection staff increased by $3,057 and travel expense increased by $10,859 during 2009. The increased compensation results from fixed payroll costs which are not significantly affected by short term increases or decreases in inspections.

Selling Expenses

Selling expenses for the year ended December 31, 2009 decreased by $4,643, or 5%, to $83,929 for the year ended December 31, 2009 from $88,572 for the year ended December 31, 2008. Selling expenses consist primarily of compensation costs. The decrease results from a reduction in promotional expenses.

General and Administrative Expenses

Total general and administrative expenses for the year ended December 31, 2009 decreased by $22,285, or 2%, to $1,078,427 for the year ended December 31, 2009 from $1,100,712 for the year ended December 31, 2008. The primary components of our general and administrative expenses are compensation costs not associated with cost of revenues or the sales process, consulting fees, professional fees, travel and entertainment, rent and depreciation. The decrease in general and administrative expenses resulted primarily from decreases in compensation costs of approximately $37,000, consulting fees of approximately $99,000 (including stock based expense of approximately $61,000) and rent expense of approximately $11,000, partially offset by increases in depreciation and amortization of approximately $55,000 and professional fees of approximately $62,000.

Interest Expense, Income Allocated to Minority Interest, Finance Costs, Loss on Extinguishment of Debt and Fair Value of Derivative Liability (Other income/expense)

Other income/expense for the year ended December 31, 2009 was a net expense of $107,981 as compared to $447,824 for the year ended December 31, 2008. The decrease results primarily from a reduction in the noncash loss on extinguishment of debt of $215,905, to $8,204 in 2009, compared to $224,109 in 2008 and a decrease in the noncash charge for the change in fair value of our derivative liability of $108,572.Total noncash expense was $32,768 and $365,327 for 2009 and 2008, respectively. Interest expense decreased $7,464 or 9% to $75,213 for the year ended December 31, 2009 from $82,677 for the year ended December 31, 2008.

Net Loss

We reported net loss attributable to common stockholders of $404,781during the year ended December 31, 2009 as compared with a loss of $821,474 for the year ended December 31, 2008. The decrease results from the various increases and decreases described above.

Liquidity and Capital Resources.

As of December 31, 2009, we had a deficiency in working capital of $943,291. Cash provided by operations was $98,776 during the year ended December 31, 2009. A loss of $386,423 was offset by an increase in accounts payable of $368,366, and by non-cash charges of $111,708 of depreciation and amortization, $39,600 in stock based expense, $24,564 in financing expense, $8,204 of loss attributable to extinguishment of debt, all partially offset by an increase in accounts receivable of $71,930. Net cash used in investing activities totaled $44,225 for the year ended December 31, 2009, expended on equipment and software development. Cash used by financing activities for the year ended December 31, 2009 was $20,346. Cash proceeds from stock sold were $5,000.

Subsequently, in the first quarter of 2010 the Company divested its interest in DBYC and DAC and as such has become a development stage company. Accordingly, the above liquidity and capital resource comment has no relevance for the company on a current or go forward basis, and the reader should look to the following comment for relevant commentary.

The Company may incur additional costs related to our Acquisition Strategy. Accordingly, we will require external financing to sustain our operations.

In order to execute our business plan, we will need to acquire additional capital from debt or equity financing.

Our independent certified public accountants have stated in their report, included in our Form 10-K, that due to our net losses and negative cash flows from operations that there is a substantial doubt about our ability to continue as a going concern. In the absence of significant revenue and profits, we will be completely dependent on additional debt and equity financing arrangements. There is no assurance that any financing will be sufficient to fund our capital expenditures, working capital and other cash requirements for the fiscal year ending December 31, 2009. No assurance can be given that any such additional funding will be available or that, if available, can be obtained on terms favorable to us. If we are unable to raise needed funds on acceptable terms, we will not be able to execute our business plan, develop or enhance existing services, take advantage of future opportunities or respond to competitive pressures or unanticipated requirements. A material shortage of capital will require us to take drastic steps such as further reducing our level of operations, disposing of selected assets or seeking an acquisition partner. If cash is insufficient, we will not be able to continue operations.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The financial statements and related notes are included as part of this report as indexed in the appendix on page F-1 through F-24.

ITEM 9.

CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

ITEM 9A.

CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to be effective in providing reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (the “SEC”), and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure.

In designing and evaluating disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute assurance of achieving the desired objectives. Also, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. The design of any system of controls is based, in part, upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of management, including our chief executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, management concluded that our disclosure controls and procedures are effective as of December 31, 2009 to cause the information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods prescribed by SEC, and that such information is accumulated and communicated to management, including our chief executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Evaluation of and Report on Internal Control over Financial Reporting

The management of PTS, Inc. is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the company’s principal executive and principal financial officers and effected by the company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:


	−	Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;

	−	Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

	−	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2009. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework.

Based on its assessment, management concluded that, as of December 31, 2009, the Company’s internal control over financial reporting is effective based on those criteria.

This annual report does not include an attestation report of the Company’s registered accounting firm regarding internal control over financial reporting. Management’s report is not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission.

Changes in Internal Control over Financial Reporting

There was no change in our internal controls over financial reporting identified in connection with the requisite evaluation that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B.

OTHER INFORMATION.

None.

PART III

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Our directors and executive officers as of March 15, 2010 are as follows:


Name	Age	Position	Position Held Since
Marc Pintar	37	Interim Chief Executive Officer, Interim Chief Financial Officer and Interim Chairman of the Board of Directors	February 2010

The business experience of the person listed above is as follows:

Marc Pintar, Interim Chief Executive Officer, Interim Chief Financial Officer and Interim Chairman of the Board of Directors – With over 15 years of business experience Marc Pintar began his career at Farmers Insurance as the youngest member of the management team in the company’s history. Marc went on to train divisions at GE in 2001-2003 and American Family Insurance in 2003-2006, resulting in a 5%-8% increase in recovery. In late 2006 Marc focused on his MBA. Marc has traveled extensively, world-wide, and lived overseas for nine months in 2007. While abroad he gained knowledge in global economics and international finance working as an independent consultant. He has proven abilities in analysis, negotiations, strategic management and leadership. After receiving his MBA in 2008 Marc worked as an independent management consultant where he decreased overall costs by $1,200,000 annually for his client. Over the years Marc has been a key member of several start-up companies including a private Arizona consulting firm in 2009 as the COO, where he increased workforce productivity, influenced growth, and reduced turnover. In 2009 Marc continued to work as an independent consultant and assisted in bringing public companies current and holds officer and director positions in several public companies including Reynaldo’s Mexican Food Company, Inc., Videolocity International, Inc., Zamage Digital Art Imaging, Inc., Eline Entertainment Group, Inc. Global Medical Products Holdings, Inc., and Skybridge Technology Group, Inc. Marc holds a Bachelor of Science degree in Management Systems (operation management) from Arizona State University, a MBA degree, with honors, from Regis University, and received his Six Sigma Greenbelt Certification.

Code of Ethics

We have adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. The code of ethics is designed to deter wrongdoing and to promote:

Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

Full, fair, accurate, timely, and understandable disclosure in reports and documents that we file with, or submits to, the SEC and in other public communications made by us;

Compliance with applicable governmental laws, rules and regulations;

The prompt internal reporting of violations of the code to an appropriate person or persons identified in the code; and

Accountability for adherence to the code.

A copy of our code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions was filed as an exhibit to the Company’s Annual Report on Form 10-KSB for the Year Ended December 31, 2005 filed on April 20, 2006.

We will provide to any person without charge, upon request, a copy of our code of ethics. Any such request should be directed to our corporate secretary at 3355 Spring Mountain Road, Suite 66, Las Vegas, Nevada 89102.

ITEM 11.

EXECUTIVE COMPENSATION.

Summary of Cash and Certain Other Compensation

Summary Compensation Table

The following table provides certain summary information concerning the compensation earned by the named executive officers for the years ended December 31, 2009, December 31, 2008 and December 31, 2007 for services rendered in all capacities to PTS, Inc.:


Name & Principal Position	Year	Salary ($)	Bonus ($)	Stock Awards ($)	Option Awards ($)	Non-Equity Incentive Plan Compensation ($)	Nonqualified Deferred Compensation Earnings ($)	All Other Compensation ($)	Total ($)
Peter Chin Chief Executive Officer⁽¹⁾	2009	90,000	-	-	-	-	-	-	90,000
	2008	177,500	-	-	-	-	-	-	177,500
	2007	187,500	-	120,000	-	-	-	-	307,500
Connie Kim Secretary⁽²⁾	2009	-	-	-	-	-	-	-	-

Mr. Chin was named Chief Executive Officer, Chief Financial Officer and Chairman of the Board of Directors in 2002. On February 23, 2010, the Company accepted the resignation from Peter Chin as the Company’s Chief Executive Officer, Chief Financial Officer and Chairman of the Board of Directors. Effective on the same date to fill the vacancies created by Mr. Chin’s resignation, the Company appointed Marc Pintar as the Company’s Interim Chief Executive Officer, Interim Chief Financial Officer and Interim Chairman of the Board of Directors.

Ms. Kim was named Secretary and a member of the Board of Directors in 2009. On February 28, 2010, the Company accepted the resignation from Connie Kim as the Company’s Secretary and a member of the Board of Directors. Effective on the same date to fill the vacancies created by Ms. Kim’s resignation, the Company appointed Marc Pintar as the Company’s Interim Secretary.

Employment Agreements

None.

Director Compensation


DIRECTOR COMPENSATION
Name	Fees Earned or Paid in Cash	Stock Awards	Option Awards	Non-Equity Incentive Plan Compensation	Non-Qualified Deferred Compensation Earnings	All Other Compensation	Total
Peter Chin⁽¹⁾	-	-	-	-	-	-	-
Connie Kim	-	8,000 Preferred Series E	-	-	-	-	-

⁽¹⁾ Peter Chin did not receive any compensation for his service on the Board of Directors.

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED MATTERS.

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth, as of March 26, 2010 the beneficial ownership of any class of the Company’s outstanding stock; (i) by any person or group known by the Company to beneficially own more than 5% of the outstanding Common Stock, (ii) by each Director and executive officer and (iii) by all Directors and executive officers as a group. Unless otherwise indicated, the address for each of these stockholders is c/o PTS, Inc., 3355 Spring Mountain Road, Suite 66, Las Vegas, Nevada 89102. Also, unless otherwise indicated, each person named in the table above has the sole voting and investment power with respect to the shares of our common and preferred stock which he beneficially owns.


Name and Address ⁽¹⁾	Number of Shares Beneficially Owned	Class	Percentage Beneficially Owned⁽²⁾
Marc Pintar, Interim Chief Executive Officer, Interim Chief Financial Officer and Interim Chairman of the Board of Directors	2,000,000	Common Stock	*
Total for all directors and executive officers (1 person)	2,000,000	Common	*
AWI, Inc.	1,937,500	Series A Preferred⁽³⁾	100%
Teresa Rubio	15,000,000	Series D Preferred⁽⁴⁾	100%
*Denotes less than 1%

(1)

Unless indicated otherwise, the address for each of the above listed is c/o PTS, Inc. 3355 Spring Mountain Road, Suite 66, Las Vegas, NV, 89102.

(2)

The above percentages are based on 2,157,808,278 shares of common stock and 15,000,000 shares of Series D Preferred Stock issued and outstanding as of March 26, 2010.

(3)

The Company has twenty million (20,000,000) shares of Series A preferred stock with each share convertible to 75 shares of common stock. Each share of Series A preferred stock has voting rights equal to 75 shares of common stock. As of March 26, 2010 there were 1,937,500 shares of Series A outstanding.

(4)

The Company has twenty million (20,000,000) shares of Series D Preferred Stock designated with each share of Series D being entitled to the voting equivalent of 200 shares of common stock. As of the March 26, 2010 there were 15,000,000 shares of Series D outstanding.

There are no arrangements, known to us, including any pledge by any person of our securities, the operation of which may at a subsequent date result in a change in control of PTS, Inc.

There are no arrangements or understandings among members of both the former and the new control groups and their associates with respect to election of directors or other matters.

ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE.

On July 1, 2008 we issued 1,083,333 shares of Series A preferred stock to Peter Chin as payment of $97,500 of accrued salaries.

ITEM 14.

PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Audit Fees

The aggregate fees billed by the Company's auditors for the professional services rendered in connection with the audit of the Company's annual financial statements and reviews of the financial statements included in the Company's Forms 10-Qs for fiscal 2009 and 2008 were approximately $36,200 and $35,000, respectively.

Audit-Related Fees

None.

Tax Fees

None.

All Other Fees

Fees billed in connection with subsidiary stand alone audits in fiscal 2009 and 2008 were approximately $17,500 and $11,000, respectively.

PART IV.

ITEM 15.

EXHIBITS.


Exhibit No.	Identification of Exhibit	Location
3.1	Articles of Incorporation, dated November 5, 1996.	Incorporated by reference from PTS, Inc.’s Registration Statement on Form 10-SB filed on March 3, 1999.
3.2	Certificate of Amendment to Articles of Incorporation, dated June 29, 1998.	Incorporated by reference from PTS, Inc.’s Registration Statement on Form 10-SB filed on March 3, 1999.
3.3	Articles of Exchange between the Company and Elast Technologies, Inc. dated June 11, 2001.	Incorporated by reference from PTS, Inc.’s Current Report on Form 8-K filed on June 26, 2001.
3.4	Certificate of Amendment to Articles of Incorporation, dated June 26, 2001.	Incorporated by reference from PTS, Inc.’s Current Report on Form 8-K filed on June 26, 2001.


3.5	Certificate of Amendment to Articles of Incorporation, dated March 16, 2004.	Incorporated by reference from PTS, Inc.’s Definitive Information Statement filed on March 16, 2004.
3.6	Certificate of Designation establishing our Series A Preferred Stock, filed effective July 15, 2004.	Incorporated by reference from PTS, Inc.’s Annual Report on Form 10-KSB for the year ending December 31, 2004 filed on May 20, 2005.
3.7	Certificate of Designation establishing our Series B Preferred Stock, filed effective September 13, 2004.	Incorporated by reference from PTS, Inc.’s Annual Report on Form 10-KSB for the year ending December 31, 2004 filed on May 20, 2005.
3.8	Certificate of Designation establishing our Series C Preferred Stock, filed effective November 8, 2004.	Incorporated by reference from PTS, Inc.’s Annual Report on Form 10-KSB for the year ending December 31, 2004 filed on May 20, 2005.
3.9	Certificate of Designation establishing our Series D Preferred Stock, filed effective January 6, 2005.	Incorporated by reference from PTS, Inc.’s Annual Report on Form 10-KSB for the year ending December 31, 2004 filed on May 20, 2005.
3.10	Certificate of Amendment to the Certificate of Designation establishing our Series C preferred stock, filed effective April 5, 2005.	Incorporated by reference from PTS, Inc.’s Annual Report on Form 10-KSB for the year ending December 31, 2004 filed on May 20, 2005.
3.11	Certificate of Amendment to the Certificate of Designation establishing our Series D preferred stock, filed effective April 5, 2005	Incorporated by reference from PTS, Inc.’s Annual Report on Form 10-KSB for the year ending December 31, 2004 filed on May 20, 2005.
3.13	Certificate of Amendment to the Certificate of Designation establishing our Series C preferred stock, filed effective November 10, 2005.	Incorporated by reference from PTS, Inc.’s Annual Report on Form 10-KSB for the year ending December 31, 2005 filed on April 20, 2006.
3.14	Certificate of Designation establishing our Series E Preferred Stock, filed effective November 15, 2005.	Incorporated by reference from PTS, Inc.’s Annual Report on Form 10-KSB for the year ending December 31, 2005 filed on April 20, 2006.
3.15	Certificate of Designation establishing our Series F Preferred Stock, filed effective November 15, 2005.	Incorporated by reference from PTS, Inc.’s Annual Report on Form 10-KSB for the year ending December 31, 2005 filed on April 20, 2006.
3.16	Certificate of Amendment to the Certificate of Designation of the Company’s Series A, Series B and Series C preferred stock, filed effective December 29, 2006.	Incorporated by reference from PTS, Inc.’s Annual Report on Form 10-KSB for the year ending December 31, 2006 filed on April 2, 2007.
3.17	Certificate of Amendment to Articles of Incorporation, dated October 9, 2007.	Incorporated by reference from PTS, Inc.’s Annual Report on Form 10-KSB for the year ending December 31, 2007 filed on March 31, 2008.
3.12	Bylaws.	Incorporated by reference from PTS, Inc.’s Registration Statement on Form 10-SB filed on March 3, 1999.
10.1	Stock exchange agreement with American Fire Retardant Corp., a Nevada corporation, dated November 29, 2004.	Incorporated by reference from PTS, Inc.’s Annual Report on Form 10-KSB for the year ending December 31, 2004 filed on May 20, 2005.
10.2	Stock exchange agreement with Stephen F. Owens, dated November 29, 2004.	Incorporated by reference from PTS, Inc.’s Annual Report on Form 10-KSB for the year ending December 31, 2004 filed on May 20, 2005.
10.3	Stock purchase agreement with Global Links Corp., a Nevada corporation, dated December 24, 2004.	Incorporated by reference from PTS, Inc.’s Annual Report on Form 10-KSB for the year ending December 31, 2004 filed on May 20, 2005.
10.4	Stock exchange agreement with Disability Access Consultants, Inc., a California corporation, dated November 15, 2005.	Incorporated by reference from PTS, Inc.’s Current Report on Form 8-K filed on November 22, 2005.


10.5	Stock purchase agreement and convertible note with James Brewer and PTS Card Solutions, Inc. dated October 10, 2006	Incorporated by reference from PTS, Inc.’s Current Report on Form 8-K filed October 19, 2006.
10.6	Exchange and Settlement Agreement dated February 23, 2010 between PTS, Inc. and Peter Chin.	Incorporated by reference from PTS, Inc.’s Current Report on Form 8-K filed March 1, 2010.
14	Code of Ethics	Incorporated by reference from PTS, Inc.’s Annual Report on Form 10-KSB for the year ending December 31, 2004 filed on May 20, 2005.
21	Subsidiaries	Filed herewith.
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith.
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith.
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith.

SIGNATURES

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

PTS, Inc.

By: /s/ Marc Pintar

Marc Pintar

Interim Chief Executive Officer, Interim Chief Financial Officer and
Interim Chairman of the Board of Directors

Dated: March 31, 2010

PTS, INC AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2009 AND 2008

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors of

PTS, Inc.:

We have audited the accompanying consolidated balance sheets of PTS, Inc as of December 31, 2009 and 2008, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for the two years ended December 31, 2009 and 2008. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of PTS, Inc. as of December 31, 2009 and 2008, and the results of its operations and its cash flows for the two years ended December 31, 2009 and 2008, in conformity with generally accepted accounting principles in the United States.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has limited operations and continued net losses. This raises substantial doubt about its ability to continue as a going concern. Management’s plan in regard to these matters is also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Lynda R. Keeton CPA, LLC

Lynda R. Keeton CPA, LLC

Henderson, NV

March 31, 2010

F-2

PTS, INC.

CONSOLIDATED BALANCE SHEETS


	December 31,	December 31,
	2009	2008

ASSETS

Current assets
Cash	$ 151,192	$ 116,987
Accounts receivable, net of allowance of $1,448 and $1,448	312,387	240,457
Other current assets	5,794	6,710
Total current assets	469,373	364,154

Property and equipment, net of accumulated
depreciation of $289,973 and $178,265	300,342	367,825

Goodwill	908,712	908,712
Deposits	5,260	5,260

TOTAL ASSETS	$ 1,683,687	$ 1,645,951

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities
Accounts payable	$ 295,975	$ 181,776
Accrued expenses	647,727	412,817
Advances payable	21,500	4,732
Convertible notes payable, current portion, net of unamortized
discount of $3,856 and $15,318	147,572	408,269
Convertible notes payable – related party	153,117	342,537
Notes payable	25,073	36,935
Notes payable, related party	107,200	179,202
Advances payable – related party	14,500	-
Lease payable, current portion	-	2,483
Total current liabilities	1,412,664	1,568,751

Convertible notes payable, long term portion, net of unamortized
discount of $6,365 and $8,753	416,990	114,781
Convertible notes payable – related party	210,816	-

Total liabilities	2,040,470	1,683,532

Stockholders’ deficit
Preferred stock, Series A, $0.001 par value; 20,000,000 shares authorized,
11,448,933 and 12,303,933 shares issued and outstanding	11,449	12,304

F-3


Preferred stock, Series B, $0.001 par value; 20,000,000 shares authorized, no shares issued and outstanding	-	-
Preferred stock, Series C, $0.001 par value; 7,500,000 shares authorized,
3,000,000 and 5,250,000 shares issued and outstanding	3,000	5,250
Preferred stock, Series D, $0.001 par value; 20,000,000 shares authorized,
15,000,000 shares issued and outstanding	15,000	15,000
Preferred stock, Series E, $0.001 par value; 5,000,000 shares authorized,
1,037,350 and 1,000,000 shares issued and outstanding	1,037	1,000
Preferred stock, Series F, $0.001 par value; 5,000,000 shares authorized,
no shares issued and outstanding	-	-
Preferred stock, Series G, $0.001 par value; 3,000,000 shares authorized,
no shares issued and outstanding	-	-
Preferred stock, undesignated, $0.001 par value; 119,500,000 shares
authorized, no shares issued and outstanding
Common stock, $0.00001 par value; 2,800,000,000 shares
authorized, 1,349,491,276 and 1,175,960,295 shares issued and outstanding	13,495	11,760
Additional paid-in capital	19,757,911	19,674,860
Accumulated deficit	(20,352,700)	(19,966,277)
Total PTS, Inc. stockholders’ deficit	(550,808)	(246,103)
Noncontrolling interest	194,025	208,522

Total stockholders’ deficit	(356,783)	(37,581)

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$ 1,683,687	$ 1,645,951

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

F-4

PTS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008


	2009	2008

Sales	$ 1,438,580	$ 1,417,724
Cost of sales	569,163	555,247

Gross profit	869,417	862,477

Selling expense	83,929	88,572
General and administrative expense	1,078,427	1,100,712

Total operating expense	1,162,356	1,189,284

Loss from operations before
interest and other expense	(292,939)	(326,807)

Interest income	-	180
Finance cost	(24,564)	(32,646)
Interest expense	(75,213)	(82,677)
Loss on extinguishment of debt	(8,204)	(224,109)
Change in fair value of derivative liability	-	(108,572)

Net loss	(400,920)	(774,631)

Net (income) loss attributable to the noncontrolling interest	14,497	(46,843)

	(386,423)	(821,474)

Deemed dividend on preferred stock	(18,358)	-

Net loss attributable to PTS, Inc. common stockholders	$ (404,781)	$ (821,474)

Net loss per basic and diluted share	$ (0.00)	$ (0.00)

Weighted average shares outstanding,
basic and diluted	1,280,968,046	986,604,672

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

F-5

PTS, INC.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008


					Additional
	Preferred Stock		Common Stock		Paid-In	Accumulated	Noncontrolling
	Shares	Par Value	Shares	Par Value	Capital	Deficit	Interest	Total

Balance, December 31, 2007	38,993,100	$ 38,993	730,057,136	$ 7,301	$19,008,404	$ (19,144,803)	$ 150,608	$ 60,503

Shares sold for cash	-	-	71,945,587	719	56,828	-	-	57,547

Common shares cancelled	-	-	(750,000)	(8)	8		-	-

Common shares issued for services	-	-	58,000,000	580	97,120	-	-	97,700

Preferred shares issued for accrued compensation	1,083,333	1,083	-	-	96,417	-	-	97,500

Conversion of debt	-	-	97,520,072	976	63,320	-	-	64,296

Beneficial conversion feature of convertible debt	-	-	-	-	42,715	-	-	42,715

Conversion of preferred to common	(6,522,500)	(6,522)	219,187,500	2,192	4,330	-	-	-

Employee stock compensation	-	-	-	-	3,000	-	-	3,000

Reclassify derivative liability	-	-	-	-	302,718	-	-	302,718

Conversion of subsidiary debt into subsidiary common stock	-	-	-	-	-	-	11,071	11,071

Net loss	-	-	-	-	-	(821,474)	46,843	(774,631)

Balance, December 31, 2008	33,553,933	33,554	1,175,960,295	11,760	19,674,860	(19,966,277)	208,522	(37,581)

F-6


Conversion of preferred to common	(3,112,250)	(3,112)	106,937,500	1,069	2,043	-	-	-

Preferred shares sold for cash	5,000	5	-	-	4,995	-	-	5,000

Preferred shares issued for services	39,600	39	-	-	39,561	-	-	39,600

Conversion of debt	-	-	66,593,481	666	25,738	-	-	26,404

Beneficial conversion feature of convertible debt	-	-	-	-	10,714	-	-	10,714

Net loss	-	-	-	-	-	(386,423)	(14,497)	(400,920)

Balance, December 31, 2009	30,486,283	$ 30,486	1,349,491,276	$ 13,495	$19,757,911	$ (20,352,700)	$ 194,025	$ (356,783)

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

F-7

PTS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008


	2009	2008

Cash flows from operating activities:
Net loss	$ (386,423)	$ (821,474)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization	111,708	56,703
Bad debts	-	(28,488)
Issuance of shares for services	39,600	97,700
Compensation from stock awards	-	3,000
Amortization of beneficial conversion feature (finance costs)	24,564	32,646
Loss on extinguishment of debt	8,204	224,109
Income (loss) attributable to minority interest	(14,497)	46,843
Change in fair value of derivative liability	-	108,572
Decrease (increase) in assets:
Accounts receivable	(71,930)	140,709
Other current assets	916	(2,489)
Deposits	-	5,253
Increase (decrease) in liabilities:
Accounts payable and accrued expenses	386,366	306,300
Advances payable	268	(1,790)

Cash provided by operating activities	98,776	167,594

Cash flows from investing activities:
Cash paid for fixed assets and capitalized software development	(44,225)	(278,650)

Cash used in investing activities	(44,225)	(278,650)

Cash flows from financing activities:
Proceeds from sale of common stock to employees	-	9,000
Proceeds from sale of common stock	-	48,547
Proceeds from sale of preferred stock	5,000	-
Payments on notes and leases	(9,344)	(33,629)
Notes payable – related parties	-	13,500
Payments on related party notes	(72,002)	(40,238)
Notes payable – other	25,000	48,000
Advances payable	16,500	40,000
Advances from related parties	14,500	-

Cash (used in) provided by financing activities	(20,346)	85,180

Net increase (decrease) in cash	34,205	(25,876)
Cash, beginning of period	116,987	142,863
Cash, end of period	$ 151,192	$ 116,987

F-8


Supplemental Schedule of Cash Flow Information:
Cash paid for interest	$ 12,936	$ 23,303

Non-Cash Financial Activity:

Debenture principal converted to common stock	$ -	$ 55,594
Debenture principal converted to subsidiary common stock	-	11,071
Note principal and interest converted to common stock	26,404	8,404
Derivative liability reclassified to equity upon conversion of debt	-	77,739
Derivative liability reclassified to equity upon reassessment of
derivative status	-	224,979
Related party payable settled of preferred	-	-
stock
Increase in carrying value of notes payable upon extinguishment
of debt	8,204	224,109
Accrued interest expense added to principal amount of debt	35,853	87,624
Equity based discount on debt	10,714	42,715
Distribution of fixed asset to related party as repayment of debt	-	23,798
Preferred stock issued as payment of accrued salaries	-	97,500
Convertible notes issued for advances payable	-	40,000

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

F-9

PTS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009 AND 2008

NOTE 1- ORGANIZATION AND NATURE OF OPERATIONS AND BASIS OF PRESENTATION

PTS, Inc. (“our”, “us”, “we”, “PTS” or the “Company”) was incorporated in the state of Nevada on November 5, 1996. Our subsidiaries include Disability Access Consultants, Inc. (“DAC”), Disability Access Corporation (“DBYC”), PTS Card Solutions, Inc., Glove Box, Inc., PTS Global Capital, Inc., PTS Technologies, Inc. and PTS Group Limited, an inactive Hong Kong corporation formed on April 17, 2008.

PTS Card Solutions, Inc., Glove Box, Inc., PTS Global Capital, Inc., PTS Technologies, Inc. and PTS Group Limited are all inactive subsidiaries.

During 2010 PTS divested itself of its ownership in DBYC and DAC. Effective February 2010, our board of directors determined that the implementation of our business plan was no longer financially feasible. At such time, we discontinued the implementation of our prior business plan and are now pursuing an acquisition strategy, whereby we will seek to either acquire undervalued businesses and/or merge with businesses with a history of operating revenues in markets that provide room for growth (“Acquisition Strategy”).

Going Concern

The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. However, we have experienced recurring net operating losses, had a net loss of $386,423 for the year ended December 31, 2009, and have a working capital deficiency of $943,291 as of December 31, 2009. These factors raise substantial doubt about our ability to continue as a going concern. Without realization of additional capital, it would be unlikely for us to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

We will need additional capital to continue our operations and will endeavor to raise funds through the sale of equity shares and revenues from operations.

F-10

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of PTS and its subsidiaries. All significant intercompany transactions have been eliminated.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Equivalents

Cash equivalents are comprised of certain highly liquid investments with maturities of three months or less when purchased. We maintain our cash in bank deposit accounts which, at times, may exceed federally insured limits. We have not experienced any losses in such accounts and no bank account balance exceeds the federally insured limit at December 31, 2009. We do not have any cash equivalents at December 31, 2009 or 2008.

Accounts Receivable

Trade receivables are carried at their estimated collectible amounts. Trade credit is generally extended on a short-term basis; thus trade receivables do not bear interest. Trade accounts receivable are periodically evaluated for collectability based on past credit history with customers and their current financial condition.

Revenue Recognition

DAC generates revenue from services regarding compliance with state, federal and local accessibility codes. Services include inspections of facilities, production of accessibility reports, consultation, expert witness services, and review of policies and procedures of the client. In all cases, revenue is recognized as earned by the Company. Though contracts may vary between a progress-basis and completed project basis, as the client becomes liable to the Company for services provided, as defined in the agreement, the client is then invoiced and revenue is accordingly recognized and recorded. The Company does not recognize or record any revenues for which it does not have a legal basis for invoicing or legally collecting. For progress-basis contracts, the Company invoices the client when it has completed the specified portion of the agreement, there by, ensuring the client is legally liable to the Company for payment of the invoice. On progress-basis contracts, revenue is not recognized until this criteria is met. The Company generally seeks progress-based agreements when the length of engagement will exceed two months and the size of contract exceeds $25,000.

F-11

Concentrations

Customers:

During 2009 and 2008, two and one customers, respectively, accounted for 46% and 53%, respectively, of our revenue. No other customer accounted for more than 10% of revenue during 2009 and 2008. The loss of these customers could have a material adverse effect on our financial position and results of operations.

At December 31, 2009, four customers accounted for a total of 70% of our accounts receivable. No other customer accounted for more than 10% of our accounts receivable at December 31, 2009.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of three to seven years.

Intangible and Long-Lived Assets

We follow Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 360, “Property Plant and Equipment”, which establishes a “primary asset” approach to determine the cash flow estimation period for a group of assets and liabilities that represents the unit of accounting for a long lived asset to be held and used. Long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell.

Goodwill is accounted for in accordance with ASC Topic 350, “Intangibles – Goodwill and Other”. We assess the impairment of long-lived assets, including goodwill and intangibles on an annual basis or whenever events or changes in circumstances indicate that the fair value is less than its carrying value. Factors that we consider important which could trigger an impairment review include poor economic performance relative to historical or projected future operating results, significant negative industry, economic or company specific trends, changes in the manner of our use of the assets or the plans for our business, market price of our common stock, and loss of key personnel. We have determined that there was no impairment of goodwill during 2009 or 2008.

Loss Per Share

Basic and diluted loss per common share for all periods presented is computed based on the weighted average number of common shares outstanding during the year as defined by FASB ASC Topic 260, “Earnings Per Share”. The assumed exercise of common stock equivalents was not utilized for the years ended December 31, 2009 and 2008 since the effect would be anti-dilutive. There were 5,379,271,993 and 4,385,811,081 common stock equivalents outstanding at December 31, 2009 and 2008, respectively (see Note 6).

Software Development Costs

Costs incurred internally in creating a computer software product are charged to expense when incurred as research and development until technological feasibility has been established for the product. Technological feasibility is established upon completion of a detail program design or, in its absence, completion of a working model. Thereafter, all software production costs are capitalized and subsequently reported at the lower of unamortized cost or net realizable value. Capitalized costs are amortized based on current and future revenue for each product with an annual minimum equal to the straight-line amortization over the remaining estimated economic life of the product.

F-12

During the years ended December 31, 2009 and 2008 we have capitalized $18,743 and $236,135, respectively, of costs related to the development of software products for which technological feasibility was achieved in January of 2007. The costs are being amortized over their five year estimated economic life.

Income Taxes

We utilize ASC 740 “Income Taxes” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.

Stock Based Compensation

We account for our stock based compensation under ASC 718 “Compensation – Stock Compensation” using the fair value based method. Under this method, compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. This guidance establishes standards for the accounting for transactions in which an entity exchanges it equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments.

Potential Derivative Instruments

We have determined that the conversion features of our debt instruments are not derivative instruments because they are not readily convertible to cash based on our historical trading volume.

Fair Value of Financial Instruments

Our short-term financial instruments, including cash, accounts payable and other liabilities, consist primarily of instruments without extended maturities, the fair value of which, based on management’s estimates, reasonably approximate their book value. The fair value of short term and long term convertible notes is based on management estimates and reasonably approximates their book value after comparison to obligations with similar interest rates and maturities.

F-13

Fair Value Measurements

ASC 820 defines fair value as the amount that would be received for an asset or paid to transfer a liability (i.e., an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes the following three levels of inputs that may be used:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets and liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2: Observable prices that are based on inputs not quoted on active markets but corroborated by market data.

Level 3: Unobservable inputs when there is little or no market data available, thereby requiring an entity to develop its own assumptions. The fair value hierarchy gives the lowest priority to Level 3 inputs.

The table below summarizes the fair values of our financial liabilities as of December 31, 2009:


	Fair Value at		Fair Value Measurement Using
	December 31, 2009		Level 1		Level 2		Level 3

Convertible notes payable	$	938,716	$	—	$	—	$	938,716
	$	938,716	$	—	$	—	$	938,716

Reclassifications

Certain prior period items have been reclassified to conform to the current period presentation. The reclassifications had no impact on net loss.

Recent Accounting Pronouncements

On September 30, 2009, the Company adopted changes issued by the Financial Accounting Standards Board (“FASB”) to the authoritative hierarchy of GAAP. These changes establish the FASB Accounting Standards Codification (“ASC”) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The FASB will no longer issue new standards in the form of Statements, FASB Staff Positions, or Emerging Issues Task Force Abstracts; instead the FASB will issue Accounting Standards Updates. Accounting Standards Updates are not authoritative in their own right as they will only serve to update the ASC. These changes and the ASC itself do not change GAAP. Other than the manner in which new accounting guidance is referenced, the adoption of these changes had no impact on the Financial Statements.

In April 2009, the FASB issued authoritative guidance to be utilized in determining whether impairments in debt securities are other than temporary, and which modifies the presentation and disclosures surrounding such instruments. This guidance is effective for interim periods ending after June 15, 2009, but early adoption is permitted for interim periods ending after March 15, 2009. The adoption of this guidance during the second quarter of 2009 had no impact on the Company’s consolidated financial position, results of operations, or cash flows.

In April 2009, the FASB issued authoritative guidance which provides additional guidance in determining whether the market for a financial asset is not active and a transaction is not distressed for fair value measurement purposes. The guidance is effective for interim periods ending after June 15, 2009, but early adoption is permitted for interim periods ending after March 15, 2009. The adoption of this guidance during the second quarter of 2009 had no impact on the Company’s consolidated financial position, results of operations, or cash flows.

F-14

In April 2009, the FASB issued authoritative guidance which requires disclosures about fair value of financial instruments in interim financial statements as well as in annual financial statements. This guidance is effective for interim periods ending after June 15, 2009, but early adoption is permitted for interim periods ending after March 15, 2009. The adoption of this guidance during the second quarter of 2009 had no impact on the Company’s consolidated financial position, results of operations, or cash flows.

In June 2009, the FASB issued authoritative guidance which establishes general standards of accounting for and disclosures of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. The guidance will be effective for interim and annual financial periods ending after June 15, 2009. The Company adopted the guidance during the three months ended June 30, 2009 and has evaluated subsequent events through the issuance date of these financial statements. The adoption of this guidance had no impact on the Company’s consolidated financial position, results of operations, or cash flows.

In June 2009, the FASB issued authoritative guidance which will require more information about the transfer of financial assets where companies have continuing exposure to the risks related to transferred financial assets. This guidance is effective at the start of a company’s first fiscal year beginning after November 15, 2009, or January 1, 2010 for companies reporting earnings on a calendar-year basis.

In June 2009, the FASB issued authoritative guidance which will change how a company determines when an entity that is insufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated. Under this guidance, determining whether a company is required to consolidate an entity will be based on, among other things, an entity’s purpose and design and a company’s ability to direct the activities of the entity that most significantly impact the entity’s economic performance. This guidance is effective at the start of a company’s first fiscal year beginning after November 15, 2009, or January 1, 2010 for companies reporting earnings on a calendar-year basis.

In October 2009, the FASB issued changes to revenue recognition for multiple-deliverable arrangements. These changes require separation of consideration received in such arrangements by establishing a selling price hierarchy (not the same as fair value) for determining the selling price of a deliverable, which will be based on available information in the following order: vendor-specific objective evidence, third-party evidence, or estimated selling price; eliminate the residual method of allocation and require that the consideration be allocated at the inception of the arrangement to all deliverables using the relative selling price method, which allocates any discount in the arrangement to each deliverable on the basis of each deliverable’s selling price; require that a vendor determine its best estimate of selling price in a manner that is consistent with that used to determine the price to sell the deliverable on a standalone basis; and expand the disclosures related to multiple-deliverable revenue arrangements. These changes become effective on January 1, 2011. The Company has determined that the adoption of these changes will not have an impact on the consolidated financial statements, as the Company does not currently have any such arrangements with its customers.

In October 2009, other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC did not, or are not believed by management to, have a material impact on the Company’s present or future consolidated financial statements.

NOTE 3 – RELATED PARTY TRANSACTIONS

Due to Related Parties

On January 1, 2009, a note and related accrued interest payable to Peter Chin, our sole officer and director, were combined into a single convertible note in the amount of $78,033. The note bears interest at 8%, is due on December 31, 2009 and is convertible into our common stock, at the option of the holder, at a 30% discount to the current market price of our stock at the date of conversion.

F-15

On January 1, 2009, a debenture and related accrued interest payable to Peter Chin were combined into a single convertible debenture in the amount of $210,816. The debenture bears interest at 8%, is due on January 1, 2012 and is convertible into our common stock, at the option of the holder, at a 50% discount to the current market price of our stock at the date of conversion.

During 2009 Peter Chin’s spouse advanced to us an aggregate of $28,500 for working capital purposes of which $14,000 has been repaid. The advances bear no interest.

During 2009 we repaid $72,002 of principal and $8,900 of interest to an officer of DAC. As of December 31, 2009 the principal balance of this note was $104,200 and accrued interest on the note payable is $9,767.

On January 1, 2008, notes and related accrued interest payable to Peter Chin, our sole officer and director, were combined into a single convertible note in the amount of $72,253. The note bears interest at 8%, is due on December 31, 2008 and is convertible into our common stock, at the option of the holder, at a 30% discount to the current market price of our stock at the date of conversion. We have recorded a loss on extinguishment of debt in the amount of $75,084, which represents the fair value on the conversion feature on January 1, 2008. This amount has been added to the carrying value of the debt.

On January 1, 2008, a debenture and related accrued interest payable to Peter Chin were combined into a single convertible debenture in the amount of $195,200. The debenture bears interest at 8%, is due on December 31, 2008 and is convertible into our common stock, at the option of the holder, at a 50% discount to the current market price of our stock at the date of conversion.

All of the notes described above that were due on December 31, 2008 were extended to December 31, 2009 on January 1, 2009.

During 2008 Peter Chin’s spouse advanced to us an aggregate of $13,500 pursuant to five individual 12% demand promissory notes, for working capital purposes. Four notes aggregating $10,500 were repaid. As of December 31, 2008 the remaining principal balance of the notes was $3,000 and accrued interest on the notes payable is $343.

During 2008 Peter Chin’s spouse advanced to us $3,000 for working capital purposes. The advance bore no interest and was repaid.

On July 1, 2008 we issued 1,083,333 shares of Series A preferred stock to Peter Chin as payment of $97,500 of accrued salaries.

During 2008, we paid $53,536 of principal and $8,548 of accrued interest to an officer of DAC. The payments made included the non-cash distribution of a vehicle valued at $23,798.

NOTE 4 – STOCK TRANSACTIONS

We are authorized to issue a total of 3,000,000,000 shares of $0.00001 par value stock, 2,800,000,000 shares of common stock and 200,000,000 shares of preferred stock.

We have designated 20,000,000 shares of Series A preferred stock, $0.001 par value, each share convertible to 75 shares of common stock. Each share of Series A preferred stock has voting rights equal to 75 shares of common stock.

We have designated 20,000,000 shares of Series B preferred stock, $0.001 par value, each share convertible to 15 shares of common stock. Each share of Series B preferred stock has no voting rights.

We have designated 7,500,000 shares of Series C preferred stock, $0.001 par value, each share convertible to 15 shares of common stock. Each share of Series C preferred stock has no voting rights.

F-16

We have designated 20,000,000 shares of our preferred stock as Series D preferred stock, $0.001 par value. Each share of the Series D preferred stock is not convertible to common stock.

We have designated 5,000,000 shares our preferred stock as Series E preferred stock, $0.001 par value. Each share of the Series E Preferred Stock is convertible into one dollar ($1.00) worth of common stock.

We have designated 5,000,000 shares of our preferred stock as Series F preferred stock, $0.001 par value. The Series F Preferred Stock has redeemable rights.

We have designated 5,000,000 shares of our preferred stock as Series G preferred stock, $0.001 par value.

During the year ended December 31, 2009:

We issued 39,600 shares of Series E preferred stock, valued at $39,600, for services. We have recorded a deemed dividend of $15,858 upon issuance of these shares due to the fact that they were initially convertible at a price below that on date of issue.

We sold 5,000 shares of Series E preferred stock for cash proceeds of $5,000. We have recorded a deemed dividend of $2,500 upon sale of these shares due to the fact that they were initially convertible at a price below that on date of issue.

We issued 106,937,500 shares of common stock pursuant to the conversion of 855,000 shares of Series A preferred stock, 2,250,000 shares of Series C preferred stock and 7,250 shares of Series E preferred stock.

We issued 66,593,481 shares of common stock upon conversion of $25,000 of convertible notes plus $1,404 of accrued interest.

During the year ended December 31, 2008:

We issued 20,000,000 shares of common stock for cash proceeds of $9,000. These shares were issued pursuant to the Company’s Bonus Plan. The shares were sold below fair value; an expense for the intrinsic value of $3,000 has been recorded in the statement of operations.

We sold 51,945,587 shares of common stock for net cash proceeds of $48,547.

We issued 58,000,000 shares of common stock, valued at $97,700, for services.

We issued 97,520,072 shares of common stock upon conversion of $64,296 of debt and accrued interest.

We issued 151,687,500 shares of common stock pursuant to the conversion of 2,022,500 shares of Series A preferred stock.

We issued 33,750,000 shares of common stock pursuant to the conversion of 2,250,000 shares of Series B preferred stock.

We issued 33,750,000 shares of common stock pursuant to the conversion of 2,250,000 shares of Series C preferred stock.

We issued 1,083,333 shares of Series A preferred stock as payment of $97,500 of accrued salaries.

During 2008 we granted stock awards to employees for an aggregate of 20,000,000 shares of common stock. The awards had a weighted average fair value of $0.0006 per share. We have recorded compensation expense of $3,000 related to these awards. We also granted 51,000,000 shares, with a weighted average fair value of $0.002, to consultants and have recorded a compensation cost of $91,600 related to these grants.

F-17

NOTE 5 – CONVERTIBLE DEBENTURES AND NOTES PAYABLE

On January 1, 2009, a note and related accrued interest were combined into a single convertible note in the amount of $58,959. The note bears interest at 8%, is due on December 31, 2011 and is convertible into our common stock, at the option of the holder, at a 30% discount to the current market price of our stock at the date of conversion.

On January 1, 2009, a debenture and related accrued interest payable to Peter Chin were combined into a single convertible debenture in the amount of $210,816. The debenture bears interest at 8%, is due on December 31, 2011 and is convertible into our common stock, at the option of the holder, at a 50% discount to the current market price of our stock at the date of conversion.

On January 1, 2009, a note and related accrued interest were combined into a single convertible note in the amount of $24,984. The note bears interest at 8%, is due on December 31, 2011 and is convertible into our common stock, at the option of the holder, at a 30% discount to the current market price of our stock at the date of conversion.

On January 1, 2009, debentures and related accrued interest issued by DAC were combined into new convertible debentures in the aggregate amount of $72,324. The debentures bear interest at 8%, are due on December 31, 2011 and are convertible into our common stock, at the option of the holder, at a 30% discount to the current market price of our stock at the date of conversion.

On January 1, 2009, a debenture and related accrued interest were combined into a single convertible debenture in the amount of $68,064. The debenture bears interest at 8%, is due on December 31, 2011 and is convertible into our common stock, at the option of the holder, at a 30% discount to the current market price of our stock at the date of conversion.

On January 1, 2009, a note and related accrued interest were combined into a single convertible note in the amount of $5,461. The note bears interest at 8%, is due on December 31, 2009 and is convertible into our common stock, at the option of the holder, at a 30% discount to the current market price of our stock at the date of conversion. We have recorded a loss on extinguishment of debt in the amount of $8,204, which represents the fair value on the conversion feature on January 1, 2009. This amount has been added to the carrying value of the debt.

On January 1, 2009 we extended the due date of a convertible promissory note in the amount of $10,000 from January 7, 2009 to December 31, 2011.

On May 12, 2009 we executed a convertible promissory note in the amount of $25,000. The note bears interest at 10%, is due on May 12, 2010 and is convertible into our common stock, at the option of the holder, at a 30% discount to the current market price of our stock at the date of conversion. We have recognized a beneficial conversion feature of $10,714 attributable to this note which is being amortized over twelve months to maturity.

During 2009 we issued 66,593,481 shares of common stock upon conversion of $25,000 of convertible notes plus $1,404 of accrued interest.

During 2009 we repaid $72,002 of principal and $8,900 of interest to an officer of DAC.

During the quarter ended March 31, 2007, our subsidiary, Disability Access Corporation, issued a convertible debenture in the amount of $150,000. The note bears interest at the rate of 8% per year and matured on June 30, 2009. The principal balance of the debenture at December 31, 2009 is $112,763. The note is convertible into DBYC common stock (ticker symbol “DBYC”) at a 50% discount to market and due to this variability the embedded conversion option is accounted for under “’”ASC 815-40 “Contracts in Entity’s Own Equity”. We have accounted for the embedded conversion option as a derivative liability until November 15, 2008 at which time we determined that the conversion option was no longer a derivative instrument since it was not readily convertible to cash. Accordingly, the embedded conversion option was marked to market through earnings at the end of each reporting period and through November 15, 2008 at which time the liability of $224,979 was reclassified to additional paid-in capital. The conversion option was valued using the Black-Scholes valuation model. For the year ended December 31, 2008, the Company recorded an expense of $108,572 representing the change in the value of the embedded conversion option.

F-18

During the year ended December 31, 2008 the holder of the debenture converted $11,071 of principal into 221,405,400 shares of the subsidiary’s common stock. This amount has been classified as a minority interest in the financial statements at June 30, 2008. As a result of the conversions, we have reclassified an aggregate of $77,739 of our derivative liability to additional paid in capital. This amount represents the fair value of the derivative liability related to the conversions on the dates of the conversions.

On January 1, 2008, notes and related accrued interest payable to Peter Chin were combined into a single convertible note in the amount of $72,253. The note bears interest at 8%, is due on December 31, 2008 and is convertible into our common stock, at the option of the holder, at a 30% discount to the current market price of our stock at the date of conversion. We have recorded a loss on extinguishment of debt in the amount of $75,084, which represents the fair value on the conversion feature on January 1, 2008. This amount has been added to the carrying value of the debt.

On January 1, 2008, a note and related accrued interest were combined into a single convertible note in the amount of $54,591. The note bears interest at 8%, is due on December 31, 2008 and is convertible into our common stock, at the option of the holder, at a 30% discount to the current market price of our stock at the date of conversion.

On January 1, 2008, a note and related accrued interest were combined into a single convertible note in the amount of $23,133. The note bears interest at 8%, is due on December 31, 2008 and is convertible into our common stock, at the option of the holder, at a 30% discount to the current market price of our stock at the date of conversion.

On January 1, 2008, debentures and related accrued interest issued by DAC were combined into new convertible debentures in the aggregate amount of $104,821. The debentures bear interest at 8%, are due on December 31, 2008 and are convertible into our common stock, at the option of the holder, at a 30% discount to the current market price of our stock at the date of conversion. During the year ended December 31, 2008 $35,233 of principal was converted into 35,000,000 shares of our common stock.

On January 1, 2008, the debenture and related accrued interest issued by a subsidiary, Glove Box, Inc., were combined into a single convertible debenture in the amount of $20,361. The debenture bears interest at 8%, is due on December 31, 2008 and is convertible into our common stock, at the option of the holder, at a 30% discount to the current market price of our stock at the date of conversion. During the year ended December 31, 2008 $20,361 of principal and $298 of accrued interest was converted into 38,507,930 shares of our common stock and the note was retired.

On January 1, 2008, a debenture and related accrued interest were combined into a single convertible debenture in the amount of $63,022. The debenture bears interest at 8%, is due on December 31, 2008 and is convertible into our common stock, at the option of the holder, at a 30% discount to the current market price of our stock at the date of conversion. Prior to January 1, 2008, the conversion rate was 80%. We have recorded a loss on extinguishment of debt in the amount of $65,491, which represents the fair value on the conversion feature on January 1, 2008. This amount has been added to the carrying value of the debt.

F-19

On January 7, 2008 we executed a convertible promissory note in the amount of $10,000. The note bears interest at 8%, is due on January 7, 2009 and is convertible into our common stock, at the option of the holder, at a 30% discount to the current market price of our stock at the date of conversion. We have recognized a beneficial conversion feature of $10,000 attributable to this note which is being amortized over the term on the note.

On March 25, 2008 we executed a convertible promissory note in the amount of $8,000. The note bore interest at 8%, was due on March 24, 2009 and is convertible into our common stock, at the option of the holder, at a 30% discount to the current market price of our stock at the date of conversion. On November 11, 2008 principal and accrued interest aggregating $8,404 was converted into 24,012,142 shares of common stock. We have recognized a beneficial conversion feature of $3,429 attributable to this note which has been fully amortized to the date of conversion.

On July 1, 2008 we executed a convertible promissory note in the amount of $10,000. The note bears interest at 8%, is due on June 30, 2009 and is convertible into our common stock, at the option of the holder, at a 30% discount to the current market price of our stock at the date of conversion. We have recognized a beneficial conversion feature of $4,286 attributable to this note which is being amortized over the term of the note.

On November 10, 2008 we executed a convertible promissory note in the amount of $5,000. The note bears interest at 8%, is due on December 31, 2009 and is convertible into our common stock, at the option of the holder, at a 30% discount to the current market price of our stock at the date of conversion. We have recognized a beneficial conversion feature of $5,000 attributable to this note which is being amortized over the term of the note.

On November 13, 2008 we executed a convertible promissory note in the amount of $10,000. The note bears interest at 8%, is due on December 31, 2009 and is convertible into our common stock, at the option of the holder, at a 30% discount to the current market price of our stock at the date of conversion. We have recognized a beneficial conversion feature of $10,000 attributable to this note which is being amortized over the term of the note.

On November 18, 2008 we executed a convertible promissory note in the amount of $10,000. The note bears interest at 8%, is due on December 31, 2011 and is convertible into our common stock, at the option of the holder, at a 30% discount to the current market price of our stock at the date of conversion. We have recognized a beneficial conversion feature of $10,000 attributable to this note which is being amortized over the term of the note.

On November 18, 2008, noninterest bearing working capital advances aggregating $30,000 were combined into three convertible notes in the amount of $10,000 each. The notes bear interest at 8%, are due on December 31, 2011 and are convertible into our common stock, at the option of the holder, at a 30% discount to the current market price of our stock at the date of conversion. Prior to November 18, there was no conversion feature. We have recorded a loss on extinguishment of debt in the amount of $83,534, which represents the fair value on the conversion feature on November 18, 2008. This amount has been added to the carrying value of the debt.

During 2008 we executed a 12% demand promissory note in the amount of $5,000. All of the notes described above that were due on December 31, 2008 were extended to December 31, 2009 on January 1, 2009.

DAC has established a 2-year $100,000 line of credit with Tri Counties Bank. Terms of the loan require interest at Prime +2% interest (5.25% at December 31, 2009), payable monthly. The current balance as of December 31, 2009 is $25,073 with minimum monthly interest-only payments. The line of credit is personally guaranteed by Barbara Thorpe, the President of DAC. Since the line of credit may be called upon 60 days notice by the bank, the entire balance is classified as a current liability at December 31, 2009.

F-20

Principal amount of debt matures as follows:



2010	$	353,530
2011		485,146
	$	838,676

NOTE 6 - CONVERTIBLE PREFERRED STOCK AND DEBENTURES

As of December 31, 2009, the common stock equivalents of the Company exceeded the total common stock available for issuance by approximately 3,929,000,000 shares. Peter Chin and Sandy Chin own 7,058,933 shares of Series A Preferred Stock convertible into 529,419,975 common shares of the Company. Peter Chin also holds debt convertible into 1,232,882,839 shares of common stock at December 31, 2009.

After giving consideration to the convertible preferred stock and convertible debt held by Mr. Chin and his spouse, our remaining common stock equivalents exceed our common shares available for issuance by approximately 2,174,000,000 shares. Although we are required to obtain shareholder approval to increase our authorized shares, as of December 31, 2009 Mr. Chin and his spouse had control of shareholder votes in excess of 50%. Therefore, the ability to increase our authorized shares was considered to be within the Company’s control and we have not accounted for these common stock equivalents as derivative instruments at December 31, 2009.

NOTE 7 – NOTE RECEIVABLE ON SALE OF FORMER SUBSIDIARY

On October 10, 2006, an officer of a Company subsidiary, Global Links Card Services, Inc. (“GLCS”) exercised his option to purchase GLCS. As a result, the Company no longer owned an interest in GLCS. The sale price was $349,000, which was paid with a convertible promissory note issued by GLCS. The note was payable in cash or GLCS common stock, at the discretion of GLCS. Payments on the note were due as follows: 2007, $48,000; 2008, $60,000; 2009, $72,000; 2010, $84,000; and 2011, $85,000. Due to the uncertainty of collection of the note, we deferred the entire gain on the sale of GLCS of $349,000 and offset the deferral against the note receivable. The gain was to be recognized as cash payments on the note were received. No cash payments were received and we have fully impaired the receivable at December 31, 2009. Since the gain was deferred, this impairment has no impact on the consolidated financial statements.

NOTE 8 - INCOME TAXES

We utilize ASC 740 “Income Taxes”, which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Temporary differences between taxable income reported for financial reporting purposes and income tax purposes are insignificant.

As of December 31, 2009 and 2008 we have fully allowed for any deferred tax assets as management has determined that it is more-likely-than-not that we will not sustain the use of our net operating loss carryforwards and have established a valuation allowance for them. The valuation allowance increased by $55,000 and $89,000 during the years ended December 31, 2009 and 2008, respectively.

Significant components of the Company's deferred income tax assets at December 31, 2008 and 2007 are as follows:




		2009		2008
Deferred income tax asset:
Net operating loss carryforward	$	2,182,000	$	2,127,000
Valuation allowance		(2,182,000)		(2,127,000)

Net deferred tax asset	$	-	$	-

F-21

Reconciliation of the effective income tax rate to the U. S. statutory rate is as follows:



	2009	2008

Tax expense at the U.S. statutory income tax rate	(35%)	(35%)
Increase in valuation allowance	35%	35%

Effective income tax rate	-	-

The Company has not filed income tax returns in the United States federal jurisdiction and certain states in the United States. The Company is in the process of preparing and filing its US federal returns. These U. S. federal returns are considered open tax years as of the date of these consolidated financial statements. No tax returns are currently under examination by any tax authorities.

NOTE 9 – PROPERTY AND EQUIPMENT

Fixed assets and accumulated depreciation at December 31, 2009 and 2008 consists of the following:



		2009		2008
Furniture and fixtures	$	11,631	$	11,631
Equipment		228,219		202,737
Software		350,465		331,722
		590,315		546,090
Accumulated depreciation		(289,973)		(178,265)
Net book value	$	300,342	$	367,825

Depreciation expense was $111,708 and $56,703 for the years ended December 31, 2009 and 2008, respectively, of which $70,093 and $19,117 relate to software for 2009 and 2008. As of December 31, 2009 and 2008, unamortized software costs are $220,657 and $272,007, respectively.

During 2006, we acquired property and equipment in the amount of $17,261, pursuant to a capital lease. The depreciation on this equipment is included in the expense reported above. Our capital lease obligation matured in 2009.

Approximate amortization of software costs for the next five years were as follows prior to the divestiture disclosed in Footnote 12: 2010, $68,000; 2011, $51,000; 2012, $51,000; 2013, $51,000; and 2014, $0.

NOTE 10 - COMMITMENTS AND CONTINGENCIES

Operating Leases

All of our operating leases are either on a month to month basis or expired during 2009. Future minimum lease for 2010 payments are $15,736 (after the divestiture disclosed in Footnote 12).

Rent expense for the years ended December 31, 2009 and 2008 was $82,062 and $91,501, respectively.

F-22

NOTE 11 - STOCK-BASED COMPENSATION

During March 2005, we adopted the Employee Stock Incentive Plan for the Year 2005. Pursuant to the Plan, we may grant stock options and common stock awards to employees and consultants. The purchase price (the "Exercise Price") of shares of the common stock subject to an incentive stock option (the "Option Shares") or of stock awards shall not be less than 85 percent of the fair market value of the common stock on the date of exercise. The stock option period (the "Term") shall commence on the date of grant of the option and shall not exceed ten years. Payment may be made (a) in cash, (b) by cashier's or certified check, (c) by surrender of previously owned shares of common stock (if the Company authorizes payment in stock in its discretion), (d) by withholding from the option shares which would otherwise be issuable upon the exercise of the stock option that number of option shares equal to the exercise price of the stock option, if such withholding is authorized by the Company in its discretion, or (e) in the discretion of the Company, by the delivery to the Company of the optionee's promissory note secured by the option shares. The maximum number of shares which may be issued pursuant to the Employee Stock Incentive Plan for the Year 2005 are 1,300,000,000 shares. There are 660,350,000, shares remaining as of December 31, 2009.

NOTE 12 - SUBSEQUENT EVENTS

Subsequent to the year ended December 31, 2009, the Company issued 442,277,141 shares of common stock pursuant to the conversion of 4,648,100 shares of Series A preferred stock, 3,000,000 shares of Series C preferred stock and 37,350 shares of Series E preferred stock. The Company cancelled 62,500 Series A preferred stock as the shareholder could not locate the physical certificate to convert. All converted Series E preferred stock were converted at a negotiated conversion rate and not the rate stated in the Company’s designation for the series.

Subsequent to the year ended December 31, 2009, the Company issued 306,039,860 shares for debt and interest reduction of $170,456.

Subsequent to the year ended December 31, 2009, the Company issued Peter Chin 40,000,000 S-8 shares of common stock for consulting services after his resignation as Chief Executive Officer. These shares were valued at $0.0015 per share as of the date of contract.

Subsequent to the year ended December 31, 2009, the Company issued 20,000,000 shares of restricted common shares for an investment of $20,000.

Subsequent to the year ended December 31, 2009, the Company amended all remaining notes from December 31, 2009 that were not converted into common stock to extend maturity date of December 31, 2009 to December 31, 2011. The amended notes total approximately $287,809.

Subsequent to the year ended December 31, 2009, the Company settled four notes totaling $18,000 for a cash settlement of $2,300.

Subsequent to the year ended December 31, 2009, the Company amended all remaining notes from December 31, 2009 that were not converted into common stock during the first quarter. These notes aggregate to approximately $287,809, of which, $84,276 matures on December 31, 2010 and $203,533 mature in 2011. These notes bear an 8% interest rate per annum and are convertible into common stock at a 30% discount to the current market price of our stock at the date of conversion.

Subsequent to the year ended December 31, 2009, the Company settled four notes totaling $18,000 for a cash settlement of $2,300.

On February 1, 2010, Barbara Thorpe entered into an employment agreement with DAC, as a part of the agreement Ms. Thorpe was required to exchange her one million dollars worth of preferred series E shares in PTS for one million dollars worth of DBYC preferred series B shares. DBYC subsequently in settlement of its obligations to PTS, Inc for past management services, allocable fees, federal tax benefits and any other and all past present and/or future obligations of DBYC and DAC to PTS, Inc. exchanged the PTS, Inc preferred series E shares for such obligations.

F-23

During February of 2010 the Company undertook reorganization and restructuring efforts which resulted in the divestiture of the Company’s interest in Disability Access Corporation and in Disability Access Consultants Inc. through an exchange agreement with the Company’s former CEO Peter Chin. More particularly, on February 23, 2010, PTS, Inc., entered into an Exchange and Settlement Agreement (the “Agreement”) with Mr. Peter Chin to resolve mutual obligations and liabilities. The effect of the agreement was that Mr. Peter Chin would resign from all positions and appointments in PTS, Inc. as of the close of business on February 23, 2010 and the Board would accept such resignation, and that further Peter Chin would forgive $502,699 of collective accumulated obligations for salary, advances and expenses from PTS, Inc. and would further exchange 4,863,333 PTS, Inc. Series A preferred shares (worth approximately $328,275 based on closing bid price at February 12, 2010) in exchange for 10,000,000 Series A preferred shares in Disability Access Corporation, held by PTS, Inc. (approximate value $1,000) plus 1,175,126,879 common shares in Disability Access Corporation (approximate value $117,513) held by PTS, Inc. plus all notes receivable (including debentures) held by PTS, Inc. in Disability Access Corporation and/or its subsidiary Disability Access Consultants, Inc. which collectively total $494,005 as of December 31, 2009. The net exchange would be an unaudited result of a non cash gain to PTS, Inc. in the approximate amount of $218,456 and eliminates PTS, Inc.’s interest in Disability Access Corporation as well as Disability Access Consultants, Inc. This event was not entered into or contemplated by management, nor committed to by management until after December 31, 2009.

On February 25, 2010, the following action was taken by the Board of Directors and a majority vote of shareholders:

To amend the Company’s Articles of Incorporation to authorize Five Billion (5,000,000,000) shares of capital stock, of which Four Billion Eight Hundred Million (4,800,000,000) shares with a par value of $0.00001 par share, shall be designated, “Common Stock,” and of which Two Hundred Million (200,000,000) shares with a par value of $0.001 per share, shall be designated “Preferred Stock”.

An unaudited pro forma balance sheet for PTS at December 31, 2009 reflecting the debt settlements and divestiture described above is as follows:


Assets

Cash	$ 2,000

Total Assets	$ 2,000

Liabilities and stockholders' deficit

Liabilities

Accounts payable	$ 105,000
Notes payable and accrued interest	288,000

Total liabilities	393,000

Stockholders' deficit	(391,000)

Total liabilities and stockholders' deficit	$ 2,000

F-24

PTS INC/NV/ - FORM 10-K - March 31, 2010

Attached files

PTS INC/NV/ Reports