PTS 10Q/A 2009 Q3 Quarterly report (amended)

U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q/A
AMENDMENT NO. 1

[X]

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

For the quarterly period ended September 30, 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
(State or other jurisdiction of incorporation or organization)

88-0380544
(I.R.S. Employer Identification No.)

3355 Spring Mountain Road, Suite 66
Las Vegas, Nevada
(Address of principal executive offices)

89102

(Zip Code)

(702) 997-3347
(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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. Yesx No¨

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

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


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). Yesx No¨

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: As of November 13, 2009, the issuer had 1,349,491,776 shares of its common stock issued and outstanding.

EXPLANATORY NOTE:

This Amendment No. 1 on Form 10-Q/A amends the Registrant’s Form 10-Q filed on November 13, 2009 for the period ended September 30, 2009. The sole purpose of this amendment is the result of additions to our existing contingent liability disclosure in Part II – 1A. Risk Factors, and the addition of footnote 9 to the financial statements to include certain disclosure with respect to a contingent liability. As a result Part II Item 1A Risk Factors and the additional financial footnote in Part I Item 1 were amended. In addition, Item 3. Quantitative and Qualitative Disclosures About Market Risk has been moved to Part II Item 1A Risk Factors. All other Items remain unchanged.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

PTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS


	September 30,	December 31,
	2009	2008
	(Unaudited)
ASSETS

Current assets
Cash	$ 117,133	$ 116,987
Accounts receivable, net of allowance of $1,448 and $1,448	172,126	240,457
Other current assets	500	6,710
Total current assets	289,759	364,154

Property and equipment, net of accumulated
depreciation of $259,868 and $178,265	304,966	367,825

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

TOTAL ASSETS	$ 1,508,697	$ 1,645,951

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities
Accounts payable	$ 128,967	$ 181,776
Accrued expenses	562,147	412,817
Advances payable	21,500	4,732
Convertible notes payable, current portion, net of unamortized
discount of $6,564 and $15,318	144,864	408,269
Convertible notes payable - related party	153,117	342,537
Notes payable	25,397	36,935
Notes payable, related party	142,200	179,202
Advances payable - related party	15,500	-
Lease payable, current portion	-	2,483
Total current liabilities	1,193,692	1,568,751

Convertible notes payable, long term portion, net of unamortized
discount of $7,167 and $8,753	416,188	114,781
Convertible notes payable - related party	210,816	-

Total liabilities	1,820,696	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
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, 1,019,975 and 1,000,000 shares issued and outstanding	1,020	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, 1,349,491,776 and 1,175,960,295 shares issued and outstanding	13,495	11,760
Additional paid-in capital	19,740,553	19,674,860
Accumulated deficit	(20,279,219)	(19,966,277)
Total PTS, Inc. stockholders' deficit	(494,702)	(246,103)
Noncontrolling interest	182,703	208,522

Total stockholders' deficit	(311,999)	(37,581)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$ 1,508,697	$ 1,645,951

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

PTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(Unaudited)


	Three Months Ended September 30,		Nine Months Ended September 30,
	2009	2008	2009	2008

Sales	$ 441,306	$ 324,973	$ 890,397	$ 1,104,595
Cost of sales	153,378	182,770	407,004	471,855

Gross profit	287,928	142,203	483,393	632,740

Selling expense	19,802	19,857	59,302	60,021
General and administrative expense	231,794	295,630	678,841	794,021

Total operating expense	251,596	315,487	738,143	854,042

Income (loss) from operations before
interest and other expense	36,332	(173,284)	(254,750)	(221,302)

Interest income	-	-	-	180
Finance cost	(3,510)	(1,944)	(21,054)	(16,867)
Interest expense	(17,897)	(19,653)	(54,753)	(63,957)
Loss on extinguishment of debt	-	-	(8,204)	(140,575)
Change in fair value of derivative liability	-	(93)	-	(334,577)

Net income (loss)	14,925	(194,974)	(338,761)	(777,098)

Net (income) loss attributable to the noncontrolling interest	(22,480)	9,914	25,819	10,212

	(7,555)	(185,060)	(312,942)	(766,886)

Deemed dividend on preferred stock	(1,143)	-	(11,233)	-

Net loss attributable to PTS, Inc. common stockholders	$ (8,698)	$ (185,060)	$ (324,175)	$ (766,886)

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

Weighted average shares outstanding,
basic and diluted	1,333,806,494	1,056,591,416	1,257,875,968	934,416,827

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

PTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(Unaudited)


	2009	2008

Cash flows from operating activities:
Net loss	$ (312,942)	$ (766,886)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization	81,602	45,757
Bad debts	-	(26,278)
Issuance of shares for services	27,225	91,600
Compensation from stock awards	-	3,000
Amortization of beneficial conversion feature (finance costs)	21,054	16,867
Loss on extinguishment of debt	8,204	140,575
(Loss) income attributable to minority interest	(25,819)	(10,212)
Change in fair value of derivative liability	-	334,577
Decrease (increase) in assets:
Accounts receivable	68,331	168,224
Other current assets	6,210	4,221
Deposits	-	5,253
Increase (decrease) in liabilities:
Accounts payable and accrued expenses	133,778	141,516
Advances payable	2,768	(2,022)

Cash provided by operating activities	10,411	146,192

Cash flows from investing activities:
Cash paid for fixed assets	(18,743)	(194,080)

Cash used in investing activities	(18,743)	(194,080)

Cash flows from financing activities:
Proceeds from sale of common stock to employees	-	9,000
Proceeds from sale of common stock	-	48,547
Payments on notes and leases	(9,020)	(24,492)
Notes payable - related parties	-	6,500
Payments on related party notes	(37,002)	(29,738)
Notes payable - other	25,000	23,000
Advances payable	14,000	40,000
Advances payable - related party	15,500	3,000

Cash provided by financing activities	8,478	75,817

Net increase in cash	146	27,929
Cash, beginning of period	116,987	142,863
Cash, end of period	$ 117,133	$ 170,792


Supplemental Schedule of Cash Flow Information:
Cash paid for interest	$ 9,663	$ 17,228

Non-Cash Financial Activity:

Debenture principal converted to common stock	$ -	$ 55,594
Debenture principal converted to subsidiary common stock	-	11,071
Derivative liability reclassified to equity upon conversion of debt	-	77,739
Increase in carrying value of notes payable upon extinguishment
of debt	8,204	140,575
Accrued interest expense added to principal amount of debt	35,853	87,624
Equity based discount on debt	-	7,715
Conversion of notes payable and accrued interest to
common stock	26,404	-
Beneficial conversion feature of convertible note	10,714	-
Distribution of fixed asset to related party as repayment of debt	-	23,798
Preferred stock issued as payment of accrued salaries	-	97,500

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

PTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2009

(Unaudited)

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.

DAC is a corporation with an extensive history of accessibility compliance consulting. DAC provides consultation to state and local governmental entities and to commercial 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 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 dev eloped proprietary software that is a management tool to simplify and streamline the accessibility compliance process. DAC has offices in Nevada, Northern California and Florida.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements as of September 30, 2009 and for the three and nine month periods ended September 30, 2009 and 2008 have been prepared by PTS pursuant to the rules and regulations of the Securities and Exchange Commission, including Form 10-Q and Regulation S-X. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations. The Company believes that the disclosures provided are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the au dited financial statements and explanatory notes for the year ended December 31, 2008 as disclosed in the company's 10-K for that year as filed with the SEC, as it may be amended.

The results of the nine months ended September 30, 2009 are not necessarily indicative of the results to be expected for the pending full year ending December 31, 2009.

Going Concern

The accompanying unaudited condensed 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 $312,942 for the nine months ended September 30, 2009, and have a working capital deficiency of $903,933 as of September 30, 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.

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.

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.

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, revenu e 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.

Concentrations

Customers:

During 2009 and 2008, two and one customers, respectively, accounted for 46% and 54%, 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 September 30, 2009, two customers accounted for a total of 82% of our accounts receivable. No other customer accounted for more than 10% of our accounts receivable at September 30, 2009.

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 Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 260,"Earnings Per Share”. The assumed exercise of common stock equivalents was not utilized for the three and nine month periods ended September 30, 2009 and 2008 since the effect would be anti-dilutive. There were 3,470,229,796 and 3,379,866,046 common stock equivalents outstanding at September 30, 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.

During the nine months ended September 30, 2009, we have capitalized $18,743 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.

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.

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^TM (“Codification”) 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 will not be authoritative in their own right as they will only serve to update the Codification. These changes a nd the Codification 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 December 2007 the FASB issued new accounting guidance which establishes accounting and reporting standards for the non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a non-controlling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. This guidance changes the way the consolidated income statement is presented. It requires consolidated net income to be reported at amounts that include the amounts attributable to both the parent and the non-controlling interest. It also requires disclosure, on the face of the consolidated statement of income, of the amounts of consolidated net income attributable to the parent and to the non-controlling interest. This guidance establishes disclosure requirements in the consolidated financial statements, which will enable users to clearly distinguish between the interests of the parent& #146;s owners and the interests of the non-controlling owners of a subsidiary. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008; earlier adoption is prohibited. The adoption of this guidance did not have a material impact on our consolidated financial position, results of operations or cash flows.

In March 2008, the FASB issued new accounting guidance which requires enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. This guidance is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008; earlier adoption is encouraged. The adoption of this guidance did not have a material impact on the Company’s consolidated financial position, results of operations, or cash flows.

In June 2008, the FASB issued new accounting guidance which requires that all unvested share-based payment awards that contain nonforfeitable rights to dividends should be included in the basic Earnings Per Share (EPS) calculation. The new guidance is effective for financial statements issued for fiscal years beginning after December 15, 2008. The adoption of this guidance had no impact on the Company’s consolidated financial position, results of operations, or cash flows.

In April 2009, the FASB issued new accounting 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 new accounting 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.

In April 2009, the FASB issued new accounting 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 May 2009, the FASB issued new accounting 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 new accounting 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 new accounting 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.

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.

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 $21,500 for working capital purposes of which $6,000 has been repaid. The advances bear no interest.

NOTE 4 - STOCK TRANSACTIONS

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

During the nine months ended September 30, 2009:

We issued 27,225 shares of Series E preferred stock, valued at $27,225, for services. We have recorded a deemed dividend of $11,233 upon issuance 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.

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 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 7, 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 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 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 $23,002 of principal and $8,900 of interest to an officer of DAC.

NOTE 6 - CONVERTIBLE PREFERRED STOCK AND DEBENTURES

As of September 30, 2009, the common stock equivalents of the Company exceeded the total common stock available for issuance by approximately 2,020,000,000 shares. The Company’s Chief Executive Officer, Peter Chin and his spouse, hold 6,968,933 shares of Series A Preferred Stock that are convertible into 522,669,975 common shares of the Company. Peter Chin also holds debt convertible into 706,367,857 shares of common stock at September 30, 2009. Unless and until there is enough authorized common stock available to cover all common stock equivalents, Mr. Chin and his spouse have agreed to limit the conversion of preferred shares or debt to approximately 1% of the outstanding shares per quarter.

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 1,306,000,000 shares. Although we are required to obtain shareholder approval to increase our authorized shares, Mr. Chin and his spouse have control of shareholder votes in excess of 50%. Therefore, the ability to increase our authorized shares is considered to be within the Company’s control and we have not accounted for these common stock equivalents as derivative instruments at September 30, 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 September 30, 2009. Since the gain was deferred, this impairment has no impact on the consolidated financial statements.

NOTE 8 - SUBSEQUENT EVENTS

Management evaluated all activity of the Company through November 13, 2009 (the issue date of the Financial Statements) and concluded that no subsequent events have occurred that would require recognition in the Financial Statements or disclosure in the Notes to the Financial Statements.

NOTE 9 - CONTINGENT LIABILITY

During March of 2005, PTS, Inc. adopted an Employee Stock Incentive Plan for the Year 2005, which was filed with the Commission on Form S-8. Per the terms of the Plan, PTS, Inc. granted common stock awards to employees. The purchase price of the shares of common stock was 85% of the fair market value of the common stock on the date of exercise. During the period from March 2005 until February of 2008, PTS, Inc. realized $1,182,630 in proceeds from the exercise of these stock awards. These proceeds were immediately reinvested into PTS to sustain the operating activities of the Company in its business pursuits and no one was ungainly enriched by the administration of the plan. After being made aware of a potential violation of the federal securities laws in the administration of this Plan, management of PTS, Inc. has come to the conclusion that there indeed was potentially a violation of federal securities laws in the administration of the plan. Further, this potential violation of federal securities laws creates a contingent liability for PTS, Inc., which might equal the amount of money realized by PTS, Inc. in the administration of the plan. Upon further analysis management is unable to estimate if any additional amounts would be due. Additionally, as of this date, no enforcement action has been threatened or instituted by the Securities and Exchange Commission, or any other state or federal regulatory body regarding this potential violation of the federal securities laws. Due to these uncertainties and that Management has determined this contingent liability to be remote; we have not recorded a liability in our financial statements and are providing this disclosure due to the material nature of this event.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide the information required by this item. See “Risk Factors” in Part II Item 1A. of this quarter report on Form 10-Q for the period ended September 30, 2009.

PART II - OTHER INFORMATION

Item 1A. Risk Factors

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.

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. In subsequent years, our independent registered public accounting firm will 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 of 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 mat erial adverse effect on our business, results of operations and financial condition.

Further, 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.

As an investor, you 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.

Risks Relating to Our Stock

We may need to raise additional capital. If we are unable to raise necessary additional capital, our business may fail or our operating results and our stock price may be materially adversely affected.

Due to the lack of significant revenue, we need to secure adequate funding. If we are unable to obtain adequate funding, we may not be able to successfully develop and market our products and services and our business will most likely fail. We do not have commitments for additional financing. To secure additional financing, we may need to borrow money or sell more securities, which may reduce the value of our outstanding securities. Under these circumstances, we may be unable to secure additional financing on favorable terms or at all.

Selling additional stock, either privately or publicly, would dilute the equity interests of our stockholders. If we borrow more money, we will have to pay interest and may also have to agree to restrictions that limit our operating flexibility. If we are unable to obtain adequate financing, we may have to curtail business operations which would have a material negative effect on operating results and most likely result in a lower stock price.

Our common stock has experienced in the past, and is expected to experience in the future, significant price and volume volatility, which substantially increases the risk that you may not be able to sell your shares at or above the price that you pay for the shares.

Because of the limited trading market for our common stock, and because of the possible price volatility, you may not be able to sell your shares of common stock when you desire to do so. During 2008 and 2007, our common stock was sold and purchased at prices that ranged from a high of $0.005 to a low of $0.00071 per share. The inability to sell your shares in a rapidly declining market may substantially increase your risk of loss because of such illiquidity because the price for our common stock may suffer greater declines due to its price volatility.

The price of our common stock that will prevail in the market after this offering may be higher or lower than the price you pay. Certain factors, some of which are beyond our control, that may cause our share price to fluctuate significantly include, but are not limited to, the following:

Variations in our quarterly operating results;

The development of a market in general for our products and services;

Changes in market valuations of similar companies;

Announcement by us or our competitors of significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments;

Loss of a major customer or failure to complete significant transactions;

Additions or departures of key personnel; and

Fluctuations in stock market price and volume.

Additionally, in recent years the stock market in general, and the OTC Bulletin Board and technology stocks in particular, have experienced extreme price and volume fluctuations. In some cases, these fluctuations are unrelated or disproportionate to the operating performance of the underlying company. These market and industry factors may materially and adversely affect our stock price, regardless of our operating performance.

Over the past few months, there have been periods of significant increases in trading volume of our common stock during which the price of our stock has both increased and decreased. The historical trading of our common stock is not necessarily an indicator of how it will trade in the future and our trading price as of the date of this report does not necessarily portend what the trading price of our common stock might be in the future.

Our directors have the right to authorize the issuance of preferred stock and additional shares of our common stock.

Our directors, within the limitations and restrictions contained in our articles of incorporation and without further action by our stockholders, have the authority to issue shares of preferred stock from time to time in one or more series and to fix the number of shares and the relative rights, conversion rights, voting rights, and terms of redemption, liquidation preferences and any other preferences, special rights and qualifications of any such series. Any issuance of preferred stock could adversely affect the rights of holders of our common stock.

Should we issue additional shares of our common stock at a later time, each investor’s ownership interest inPTS, Inc. would be proportionally reduced. No investor will have any preemptive right to acquire additional shares of our common stock, or any of our other securities.

If we fail to remain current on our reporting requirements, we could be removed from the OTC Bulletin Board which would limit the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market.

Companies trading on the OTC Bulletin Board, such as PTS, Inc., must be reporting issuers under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and must be current in their reports under Section 13, in order to maintain price quotation privileges on the OTC Bulletin Board. If we fail to remain current on our reporting requirements, we could be removed from the OTC Bulletin Board. As a result, the market liquidity for our securities could be severely adversely affected by limiting the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market.

Our common stock is subject to the “penny stock” rules of the SEC and the trading market in our securities is limited, which makes transactions in our stock cumbersome and may reduce the value of an investment in our stock.

The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. Inasmuch as that the current bid and ask price of common stock is less than $5.00 per share, our shares are classified as “penny stock” under the rules of the SEC. For any transaction involving a penny stock, unless exempt, the rules require:

That a broker or dealer approve a person’s account for transactions in penny stocks; and

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

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

Obtain financial information and investment experience objectives of the person; and

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

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

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

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

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

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

Investors in penny stock should be prepared for the possibility that they may lose their entire investment.

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.

SIGNATURES

In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: July 13, 2010

PTS, Inc.

By: /s/ Marc Pintar

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

PTS (PTSH) Inactive 10-Q/A2009 Q3 Quarterly report (amended)