SECURITIES AND EXCHANGE COMMISSION
WASHINGTON DC 20549
______________
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) December 18, 2000
-----------------
ACCESSTEL, INC.
- - --------------------------------------------------------------------------------
(Exact name of Registrant as Specified in Charter)
Utah 592159271
- - --------------------------------------------------------------------------------
(State of Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
5201 Great America Parkway, Suite 320/3102, Santa Clara, CA 95054
- - --------------------------------------------------------------------------------
(Address of Principal Executive Offices)
Registrant's telephone number, including area code (408) 216-4756
-----------------------------
SHOPSS.COM, INC.
- - --------------------------------------------------------------------------------
(Former name or Former Address, if Changed Since Last Report)
Item 7. Financial Statement, Pro Forma Financial Information and Exhibits.
a) Financial Statements of Businesses Acquired.
The financial statements are for the acquisition of AccessTel, Inc. by the
Registrant pursuant to the Share Exchange Agreement, dated as of December
18, 2000.
INDEPENDENT AUDITOR'S REPORT
----------------------------
February 28, 2001
Shareholders and Directors
Accesstel, Inc.
We have audited the accompanying balance sheets of Accesstel, Inc. (A
Development Stage Enterprise) as of December 31, 1999 and December 15, 2000, and
the related statements of operations, shareholders' equity and cash flows for
the period March 5, 1999 (inception) to December 31, 1999 and the period January
1, 2000 to December 15, 2000. 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 auditing standards generally accepted
in the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Accesstel, Inc. as of December
31, 1999 and December 15, 2000 and the results of its operations and its cash
flows for the period March 5, 1999 (inception) to December 31, 1999 and the
period January 1, 2000 to December 15, 2000 in conformity with accounting
principles generally accepted in the United States.
/s/ Radin, Glass & Co., LLP
Certified Public Accountants
New York, New York
ACCESSTEL, INC.
(A Development Stage Enterprise)
BALANCE SHEETS
December 15, December 31,
2000 1999
------------ -----------
ASSETS
------
CURRENT ASSETS
Cash and cash equivalents $ 542,952 $ -
Other receivable 1,320 440
---------- ----------
Total Current Assets 544,272 440
LEASEHOLD IMPROVEMENTS AND EQUIPMENT, net of
accumulated depreciation of $3,326 34,897 -
OTHER ASSETS 3,994 -
---------- ----------
$ 583,163 $ 440
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
Accounts payable $ 32,000 $ 88,000
Payroll taxes payable 116,719 -
Notes payable - 470,000
---------- ----------
Total Current Liabilities 148,719 558,000
---------- ----------
STOCKHOLDERS' EQUITY
Preferred stock, $1.00 par value; 10,000,000 shares authorized,
0 issued and outstanding - -
Common stock, $.001 par value; 10,000,000 shares authorized,
5,930,392 and 3,720,000 issued and outstanding, respectively 5,930 3,720
Paid in capital 2,658,590 16,720
Accumulated deficit - during development stage (1,355,076) (578,000)
Unearned compensation (875,000)
---------- ----------
Total Stockholders Equity 434,444 (557,560)
---------- ----------
$ 583,163 $ 440
========== ==========
See notes to financial statements.
ACCESSTEL, INC.
(A Development Stage Enterprise)
STATEMENTS OF OPERATIONS
For the Period For the Period
For the Period March 5, 1999 March 5, 1999
January 1, 2000 to (Inception) to (Inception) to
December 15, 2000 December 31, 1999 December 15, 2000
------------------ ----------------- -----------------
REVENUE $ - $ - $ 0
Cost of revenues - - 0
----------------- ----------------- ----------------
GROSS PROFIT - - 0
GENERAL AND ADMINISTRATIVE EXPENSES 719,368 - 719,368
WRITEOFF OF START UP COSTS AND RESEARCH
AND DEVELOPMENT COSTS 66,800 108,000 174,800
----------------- ----------------- ----------------
LOSS FROM OPERATIONS (786,168) (108,000) (894,168)
OTHER INCOME
Miscellaneous income 9,092 - 9,092
----------------- ----------------- ----------------
LOSS BEFORE PROVISION FOR TAXES (777,076) (108,000) (885,076)
----------------- ----------------- ----------------
INCOME TAX PROVISION - - -
NET LOSS $ (777,076) $ (108,000) $ (885,076)
================= ================= ================
NET LOSS PER SHARE $ (0.16) $ (0.03)
================= =================
Weighted Average Shares Outstanding 4,825,196 3,520,000
================= =================
See notes to financial statements.
ACCESSTEL, INC.
(A Development Stage Enterprise)
STATEMENTS OF CASH FLOW
For the Period For the Period
For the Period March 5, 1999 March 5, 1999
January 1, 2000 to (Inception) to (Inception) to
December 15, 2000 December 31, 1999 December 15, 2000
------------------- -------------------- --------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (777,076) $ (108,000) $ (885,076)
-------------- ----------- ------------
Adjustments to reconcile net loss to net cash used in
operating activities:
Amortization of stock based compensation 125,000 125,000
Depreciation 3,326 - 3,326
Other receivables (880) (440) (1,320)
Other assets (3,994) - (3,994)
Accounts payable (56,000) 88,000 32,000
Taxes payable 116,719 - 116,719
-------------- ----------- ------------
Total Adjustments 184,171 88,000 271,731
-------------- ----------- ------------
NET CASH USED IN OPERATIONS (592,905) (20,000) (613,345)
-------------- ----------- ------------
CASH FLOWS USED BY INVESTING ACTIVITIES:
Leasehold improvements and equipment purchases (38,223) - (38,223)
-------------- ----------- ------------
NET CASH USED BY INVESTING ACTIVITIES (38,223) - (38,223)
-------------- ----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Notes payable - 470,000 470,000
Sale of preferred stock 907,000 - 907,000
Debt converted to preferred stock 267,080 - 267,080
Sale of common stock - 3,720 3,720
Dividend to founder shareholders (470,000) (470,000)
Capital contributions - 16,280 16,280
-------------- ----------- ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 1,174,080 20,000 1,194,080
-------------- ----------- ------------
NET INCREASE IN CASH 542,952 - 542,512
CASH, beginning of the period - - -
-------------- ----------- ------------
CASH, end of the period $ 542,952 $ - $ 542,952
============== =========== ============
Supplemental disclosures of cash flow information:
Interest paid $ - $ -
Taxes paid $ - $ -
Non cash financing activities:
Purchased research and development costs with debt $ - $ 470,000
Conversion of debt to preferred stock $ 736,200 $ -
Conversion of preferred stock to common stock $ 1,643,200 $ -
Unqualified options issued for services $ 1,000,000 $ -
See notes to financial statements.
ACCESSTEL, INC.
(A Development Stage Enterprise)
STATEMENT OF STOCKHOLDERS' EQUITY
Accumulated
Deficit
Preferred Stock Common Stock Additional During
------------------------- --------------------------- Paid in Development
Shares Amount Shares Amount Capital Stage
----------- ---------- ----------- ---------- ------------ -------------
Balance as of March 5, 1999
(Inception) - $ - 3,320,000 $ 3,320 $ 16,280 $ -
Exercise of stock options for
common stock 400,000 400 40
Dividend to founder shareholders (470,000)
Net loss (108,000)
----------- ----------- ----------- --------- ----------- --------------
Balance as of December 31, 1999 - - 3,720,000 3,720 16,320 (578,000)
----------- ----------- ----------- --------- ----------- --------------
Exercise of stock options for
common stock 800,000 800 80
Issuance of unqualified stock
options 1,000,000
Conversion of debt to preferred
stock 561,060 736,200
Sale of preferred stock 453,500 907,000
Conversion of preferred stock to
common stock (1,014,560) (1,643,200) 1,410,392 1,410 1,641,790
Net loss (777,076)
----------- ----------- ----------- --------- ----------- --------------
Balance as of December 15, 2000 - $ - 5,930,392 $ 5,930 $ 2,658,190 $ (1,355,076)
=========== =========== =========== ========= =========== ==============
Total
Unearned Stockholders'
Compensation Equity
-------------- --------------
Balance as of March 5, 1999
(Inception) $ - $ 19,600
Exercise of stock options for
common stock 440
Dividend to founder shareholders (470,000)
Net loss (108,000)
----------- -----------
Balance as of December 31, 1999 - (557,960)
----------- -----------
Exercise of stock options for
common stock (875,000) 880
Issuance of unqualified stock
options 125,000
Conversion of debt to preferred
stock 736,200
Sale of preferred stock 907,000
Conversion of preferred stock to
common stock -
Net loss (777,076)
----------- -----------
Balance as of December 15, 2000 $ (875,000) $ 434,044
=========== ===========
See notes to financial statements.
ACCESSTEL, INC.
---------------
(A DEVELOPMENT STAGE ENTERPRISE)
--------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
Note 1. Business
Accesstel, Inc. (the "Company") is a Delaware corporation formed on March 5,
1999. The Company was organized to engage in the business of electronic
telephony, electronic communication, and electronic data processing.
Note 2. Summary of Significant Accounting Principles
Cash and cash equivalents
The Company classifies highly liquid temporary investments with an original
maturity of three months or less when purchased as a cash equivalents. The
Company has cash held in excess of $100,000 which exceeds the FDIC insurance
limits and is therefore uninsured.
Development Stage Enterprise
Due to the start-up nature of the business, the financial statements are being
presented as a development stage enterprise pursuant to Statement of Financial
Accounting Standards No. 7.
Leasehold Improvements and Equipment
Leasehold improvements and equipment are stated at cost. Maintenance and
repairs are charged to expenses as incurred. Depreciation is provided for over
the estimated useful lives of the individual assets using straight-line methods.
Fair value of financial instruments
The carrying amounts reported in the balance sheet for cash, receivables, and
accrued expenses approximate fair value based on the short-term maturity of
these instruments.
Stock based compensation
The Company accounts for employee stock options in accordance with APB Opinion
No. 25, "Accounting For Stock Issued To Employees" and has adopted the
disclosure-only option under SFAS No. 123.
Comprehensive income
The Company adopted SFAS No. 130 "Reporting Comprehensive Income". This
statement establishes rules for the reporting of comprehensive income and its
components. Comprehensive income consists of net income and other comprehensive
income and is presented in the Statements of Operations.
Income Taxes
The Company utilizes the liability method of accounting for income taxes as set
forth in SFAS 109, "Accounting for Income Taxes." Under the liability method,
deferred taxes are determined based on the difference between the financial
statement and tax bases of assets and liabilities using enacted tax rates in
effect in the years in which the differences are expected to reverse. The
Company has a net operating loss carryforward of approximately $800,000, which
expire beginning in the year 2019. A reserve of $280,000 has been applied to
offset the related deferred tax asset due to the lack of established earnings to
utilize such net operating loss carryforwards.
Loss Per Share
The Company has adopted SFAS 128, "Earnings per Share." Loss per common share
are computed by dividing income available to common shareholders by the weighted
average number of common shares outstanding during the period. The loss per
common share does not include the conversion of outstanding options and warrants
since all of the stock options and warrants outstanding are anti-dilutive.
Accounting for Long-Lived Assets
The Company reviews long-lived assets, certain identifiable assets and any
goodwill related to those assets for impairment whenever circumstances and
situations change such that there is an indication that the carrying amounts may
not be recoverable. At December 15, 2000 the Company believes that there has
been no impairment of long-lived assets.
Accounting estimates and assumptions
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Note 3. Leasehold Improvements and Equipment
At December 15, 2000, leasehold improvements and equipment consist of the
following:
Leasehold improvements $ 30,002
Furniture & fixtures 8,221
------------
38,223
Less: accumulated depreciation 3,326
-------------
$ 34,897
=============
Leasehold improvements are depreciated over two years. Furniture and fixtures
are depreciated over 3 to 7 years.
Note 4. Other Assets
Included in other assets are security deposits of $3,994.
Note 5. Notes Payable
In December 1999, the Company acquired certain technology and research and
development from the founders of the Company for two notes payable one at
$225,000 and one at $245,000 bearing interest at 8% per annum, convertible into
shares of the Company at $1.00 per share. In early 2000, the note holders
converted such debt into preferred stock. Pursuant to Staff Accounting Bulletin
Topic 5G, transfers of non monetary assets by promoters and shareholders are to
be recorded at their historical carryover basis. The shareholders basis in such
assets were not auditible and therefore treated as having zero carryover basis.
As a result, the assets acquired were recorded as a dividend to the shareholders
contributing such assets.
Note 6. Equity Transactions
a. In 1999, the founders of the Company issued 3,720,000 shares of common stock
to themselves for $20,000.
b. In 2000 the Company sold 453,500 shares of preferred stock pursuant to a
private placement memorandum at $2.00 per unit. Each unit consisted of one
share of preferred stock and one warrant to purchase one share of common
stock at an exercise price of $5.00 for a term of six months and include
various redemption terms by the Company.
c. The terms of the Preferred Stock are cumulative at 8% per annum, payable
semi-annually, with a $2.00 per share liquidation preference. It is
convertible into common stock of the Company on a one for one basis.
Note 7. Stock Option Plan
The Company has an incentive stock option plan, which is authorized to issue up
to 5,000,000 shares of common stock.
For disclosure purposes in accordance with SFAS No. 123, the fair value of each
stock option grant is estimated on the date of grant using the Black-Scholes
option-pricing model with the following weighted-average assumptions used for
stock options granted during the period ended December 15, 2000: annual
dividends of $0.00, expected volatility of 100% at December 15, 2000, risk-free
interest rate of 5.7% and expected life of ten years for all grants. The
weighted-average fair value of the non-qualified stock options granted during
the period ended December 15, 2000 was $1,000,000, which $125,000 was recorded
as compensation expense in 2000 and the remaining balance $ 875,000 to be
amortized over 45 months.
The following tables summarize the changes in options outstanding and the
related price ranges for shares of the Company's common stock:
Stock Option Plan:
Weighted
Average
Shares Exercise Price
--------------- -----------------
Outstanding at March 5, 1999 (Inception) - -
Granted 1,600,000 $.0011
Exercised (400,000) .0011
Expired or cancelled - -
--------------- -----------------
Outstanding at December 31, 1999 1,200,000 $.0011
=============== =================
Granted 2,000,000 $.0011
Exercised (800,000) .0011
Expired or cancelled - -
--------------- -----------------
Outstanding at December 15, 2000 2,400,000 $.0011
=============== =================
The stock option plan stock options are exercisable for ten years from the grant
date and vest over four years. As of December 15, 2000, none of these stock
options outstanding were vested.
Note 8. Commitments and Contingencies
The Company leases office space pursuant to a lease agreement on a month to
month basis in the United States. The Company also leases space in China, which
expires in 2002. Rent expense for the period ended December 15, 2000 was
$24,325.
Note 9. Subsequent Event
On December 18, 2000, the Company merged with an inactive public company,
whereby the shareholders of the Company owned 80% of the common stock of the
successor entity. The transaction has been accounted for as a reverse merger for
accounting purposes.
ACCESSTEL, INC.
UNAUDITED - PRO-FORMA BALANCE SHEET
pro-forma
Accesstel Shopss pro-forma December 15,
December 15, 2000 September 30, 2000 adjustments 2000
----------------- ------------------ ----------- ------------
ASSETS
------
CURRENT ASSETS
Cash and cash equivalents $ 542,952 3,117 2 (3,117) $ 542,954
Other receivable 1,320 1,320
------------ ---------- -----------
Total Current Assets 544,272 3,117 547,389
LEASEHOLD IMPROVEMENTS AND EQUIPMENT, net of
accumulated depreciation of $3,326 34,897 34,897
OTHER ASSETS 3,994 3,994
------------ ---------- -----------
$ 583,163 3,117 $ 586,280
============ ========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
Accounts payable $ 32,000 2,310,648 2 (2,310,648) $ 32,002
Taxes payable 116,719 48,104 2 (48,104) 116,721
-
------------ ----------- -----------
Total Current Liabilities 148,719 2,358,752 2,507,471
------------ ----------- -----------
STOCKHOLDERS' EQUITY
Common stock 5,930 8,997 1 (5,930) 32,309
2 4,653
3 18,658
Paid in capital 2,658,590 1 (2,358,702) 868,144
2 586,913
3 (18,658)
Accumulated deficit - during development stage (1,355,076) (2,364,632) 1 2,364,632 415,228
2 1,770,303
Unearned compensation (875,000) (875,000)
------------ ----------- -----------
Total Stockholders Equity 434,444 (2,355,635) (1,921,191)
------------ ----------- -----------
$ 583,163 3,117 $ 586,280
============ =========== ===========
See notes to pro-forma financial statements.
ACCESSTEL, INC.
UNAUDITED - PRO-FORMA STATEMENT OF OPERATIONS
Accesstel Shopss Pro-forma
For the Period For the Period For the Period
January 1, 2000 to January 1, 2000 to January 1, 2000 to
December 15, 2000 September 30, 2000 December 15, 2000
------------------- ------------------- -------------------
REVENUE $ - 1,699,232 $ 1,699,232
Cost of revenues - 1,616,078 1,616,078
------------------- ------------------ -----------------
GROSS PROFIT - 83,154 83,154
GENERAL AND ADMINISTRATIVE EXPENSES 719,368 638,014 1,357,382
WRITEOFF OF START UP COSTS AND RESEARCH
AND DEVELOPMENT COSTS 66,800 66,800
------------------ ------------------- ------------------
LOSS FROM OPERATIONS (786,168) (554,860) (1,341,028)
OTHER INCOME
Miscellaneous income (expense) 9,092 (614,510) (605,418)
------------------ ------------------- ------------------
LOSS BEFORE PROVISION FOR TAXES (777,076) (1,169,370) (1,946,446)
------------------ ------------------- ------------------
INCOME TAX PROVISION - - -
NET LOSS $ (777,076) (1,169,370) $ (1,946,446)
================== =================== ==================
NET LOSS PER SHARE (0.06)
==================
Weighted Average Shares Outstanding 32,308,496
==================
See notes to financial statements.
ACCESSTEL, INC.
UNAUDITED - PRO-FORMA STATEMENT OF OPERATIONS
Accesstel Shopps Pro-forma
For the Period For the Period For the Period
March 5, 1999 to January 1, 1999 to January 1, 1999 to
December 31, 1999 December 31, 1999 December 31, 1999
----------------- ------------------ ------------------
REVENUE $ - 2,939,472 $ 2,939,472
Cost of revenues - 2,436,440 2,436,440
----------------- ----------------- ------------------
GROSS PROFIT - 503,032 503,032
GENERAL AND ADMINISTRATIVE EXPENSES 1,342,231 1,342,231
WRITEOFF OF START UP COSTS AND RESEARCH
AND DEVELOPMENT COSTS 108,000 108,000
----------------- ----------------- -----------------
LOSS FROM OPERATIONS (108,000) (839,199) (947,199)
OTHER INCOME
Miscellaneous income (expense) 40,572 40,572
----------------- ----------------- ------------------
LOSS BEFORE PROVISION FOR TAXES (108,000) (798,627) (906,627)
----------------- ----------------- -------------------
INCOME TAX PROVISION - - -
NET LOSS $ (108,000) (798,627) $ (906,627)
================= ================= =================
NET LOSS PER SHARE (0.03)
=================
Weighted Average Shares Outstanding 32,308,496
=================
See notes to financial statements.
ACCESSTEL,INC.
--------------
NOTES TO PRO-FROMA
-------------------
FINANCIAL STATEMENTS
--------------------
Note 1. Business transaction
On December 18, 2000, Accesstel, Inc. "the Company" merged with Shopss.com, Inc.
a publicly traded entity, whereby Accesstel was the surviving entity, since more
than 50% of the outstanding shares of Shopss.com, Inc. was issued in connection
with the transaction. As a result the transaction is being accounted for as a
reverse merger for accounting purposes, which is a recapitalization of the
Company.
Note 2. Accounting adjustments to pro-forma balance sheet
Description to accounting adjustments are as follows:
1) Recapitalization of public entity to be the equity of Accesstel.
2) Issuance of additional shares pursuant to an equity raise and conversion
of debt to settle Shopss.com liabilities as part of the planned merger.
3) Issuance of additional shares for the reverse merger.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ACCESSTEL, INC.
Date March 5th, 2001
-------------------------
By/s/ Lawrence Liang
______________________
Name: Lawrence Liang
Title: President and Chief Executive Officer