PTS 10K/A 2009 Annual report (amended)

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

FORM 10-K/A

Amendment No. 1

(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¨ Nox

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¨ Nox

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. 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 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 ¨ Nox

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.

EXPLANATORY NOTE:

This Amendment No. 1 on Form 10-K/A amends the Registrant’s Form 10-K filed on March 31, 2010 for the period ended December 31, 2009. The sole purpose of this amendment is the result of additions to our existing contingent liability disclosure in Part 1 – 1A. Risk Factors, and the addition of footnote 13 to the financial statements to include certain disclosure with respect to a contingent liability. As a result Part I Item 1A Risk Factors and the additional financial footnote in Part II Item 8 were amended. All other Items remain unchanged.

PART I

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 t o 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.

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.

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 mat erial 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.

PART II - FINANCIAL INFORMATION

Item 8. Financial Statements.

PTS, INC AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2009 AND 2008

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 significan t 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, except for footnote 13, as to which the date is July 12, 2010

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
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.

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.

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)


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.

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


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.

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.

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 dev eloped 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.

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”).

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.

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.

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, 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 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.

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.

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.

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.

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 GAA P. 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.

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 rela ted 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.

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.

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.

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.

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.

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.

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	$	-	$	-

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.

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 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.

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 below.

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 (w orth 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	288,00

Total liabilities	393,000

Stockholders' deficit	(391,000)

Total liabilities and stockholders' deficit	$ 2,000

NOTE 13 - CONTINGENT LIABILITY

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: July 13, 2010

PTS (PTSH) Inactive 10-K/A2009 FY Annual report (amended)