UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the Quarterly Period Ended March 31, 2005
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _________ to _________
Commission File Number: 0-24459
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ACCESSTEL, INC.
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(Exact name of small business issuer as specified in its charter)
Utah 59-2159271
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
66 Clinton Road, Fairfield, NJ 07004
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(Address of principal executive offices)
Issuer's telephone number: (973) 882-8861
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N/A
(Former name, former address and former fiscal year,
if changed since last report.)
Check whether the Company (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the Company was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
N/A --- Check whether the Company filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes [ ] No [ ]
As of June 30, 2005, the Company had 35,907,831 shares of common stock issued
and outstanding.
Transitional Small Business Disclosure Format: Yes [ ] No [X]
ACCESSTEL, INC.
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets: March 31, 2005 (Unaudited) and December 31, 2004 2
Statements of Operations (Unaudited): Three Months Ended
March 31, 2005 and 2004 3
Statements of Cash Flows (Unaudited): Three Months Ended
March 31, 2005 and 2004 4
Notes to Financial Statements (Unaudited): Three Months Ended
March 31, 2005 5
Item 2. Management's Discussion and Analysis or Plan of Operation 6
Item 3. Controls and Procedures
PART II. OTHER INFORMATION
Item 6. Exhibits
SIGNATURES
CERTIFICATIONS
ACCESSTEL, INC.
FINANCIAL STATEMENTS
MARCH 31, 2005
ACCESSTEL, INC.
BALANCE SHEETS
ASSETS
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March 31, December 31,
2005 2004
(Unaudited) (Audited)
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Current Assets:
Cash $ 23,190 $ 13,902
Accounts receivable, net of allowance
for doubtful accounts 3,372,897 2,947,210
Inventories 317,762 1,087,415
Miscellaneous receivables 960,534 57,168
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Total current assets 4,674,383 4,105,695
Other Assets:
Advance 40,000 50,000
Advance to stockholder 104,000 104,000
Security deposits 5,640 5,640
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Total other assets 149,640 159,640
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TOTAL ASSETS $4,824,023 $4,265,335
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 218,593 $1,042,303
Accrued expenses 825 4,127
Payroll taxes payable 2,167 2,428
Notes payable under bank lines of credit 371,483 276,916
Notes payable - stockholders 80,183 229,824
Note payable - Factor 2,823,020 2,302,501
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Total current liabilities 3,496,271 3,858,099
Stockholders' Equity:
Preferred stock - authorized, 20,000,000 shares
of $1 par value; none issued and outstanding -- --
Common stock - authorized, 100,000,000 shares
of $.001 par value; 35,997,831 and 25,352,810,
respectively, issued and outstanding 35,997 32,191
Capital excess of par value 915,477 39,282
Retained earnings 376,278 335,763
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Total stockholders' equity 1,327,752 407,236
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TOTAL LIABILITIES AND
PARTNERS' CAPITAL $4,824,023 $4,265,335
========== ==========
See accompanying notes
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ACCESSTEL, INC.
STATEMENTS OF OPERATIONS
FOR THE QUARTERS ENDED MARCH 31, 2005 AND 2004
3/31/05 3/31/04
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NET SALES $ 1,766,672 $ 1,105,455
COST OF GOODS SOLD 1,519,167 1,191,847
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GROSS PROFIT (LOSS) ON SALES 247,505 (86,392)
OPERATING EXPENSES: 146,658 364,076
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OPERATING INCOME (LOSS) 100,847 (450,468)
OTHER INCOME (EXPENSE):
Interest expense (60,329) (23,707)
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NET PROFIT (LOSS) FOR PERIOD $ 40,518 $ (474,175)
============ ============
NET LOSS PER SHARE - BASIC AND DILUTED $ -- $ .02
WEIGHTED AVERAGE SHARES OUTSTANDING 32,978,923 25,349,603
See accompanying notes.
- 3 -
ACCESSTEL, INC.
STATEMENTS OF CASH FLOWS
FOR THE QUARTERS ENDED MARCH 31, 2005 AND 2004
2005 2004
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ (40,518) $ (474,175)
Charges not requiring cash outlay:
Common stock issued as compensation 255,000
Partial write off of advance 10,000 --
Changes in assets and liabilities:
Decrease in inventories 769,653 32,935
Increase (decrease) in accounts receivable (425,687) 91,212
Increase (decrease) in payroll taxes payable
(261) 275
Decrease in accounts payable (823,710) (22,011)
Increase (decrease) in accrued expenses (3,302) 15,000
Increase in miscellaneous receivables (903,366) (7,784)
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Net cash consumed by operating activities (1,336,155) (109,548)
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CASH FLOWS FROM INVESTING ACTIVITIES -- --
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in borrowings under lines of credit 94,565 14,582
Increase in borrowing from shareholders -- 90,149
Repayments of stockholder loans (149,641) --
Distributions -- (17,765)
Borrowing from Factor 520,519 --
Sales of capital stock 880,000 --
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Net cash provided by financing activities 1,345,443 86,966
Increase (decrease) in cash and cash equivalents 9,288 (22,582)
Cash balance, beginning of period 13,902 38,152
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Cash balance, end of period $ 23,190 $ 15,570
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See accompanying notes.
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ACCESSTEL, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2005
1. BASIS OF PRESENTATION
The unaudited interim financial statements of Accesstel, Inc. ("the Company") as
of March 31, 2005 and for the three month periods ended March 31, 2005 and 2004,
have been prepared in accordance with accounting principles generally accepted
in the United State of America. In the opinion of management, such information
contains all adjustments, consisting only of normal recurring adjustments,
necessary for a fair presentation of the results for such periods. The results
of operations for the quarter ended March 31, 2005 are not necessarily
indicative of the results to be expected for the full fiscal year ending
December 31, 2005.
Certain information and disclosures normally included in the notes to financial
statements have been condensed or omitted as permitted by the rules and
regulations of the Securities and Exchange Commission, although the Company
believes the disclosure is adequate to make the information presented not
misleading. The accompanying unaudited financial statements should be read in
conjunction with the financial statements of the Company for the year ended
December 31, 2004.
2. CAPITAL STOCK
Shares of common stock totaling 3,300,000 shares were sold in a private
transaction during the quarter, yielding proceeds of $880,000. In addition,
506,091 shares were issued in satisfaction of previously existing debts.
-5-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Cautionary Statement Pursuant to Safe Harbor Provisions of the Private
Securities Litigation Reform Act of 1995:
This Quarterly Report on Form 10-QSB for the quarterly period ended March 31,
2005, contains "forward-looking" statements within the meaning of Section 27A of
the Securities Act of 1933, as amended, including statements that include the
words "believes", "expects", "anticipates", or similar expressions. These
forward-looking statements may include, among others, statements of
expectations, beliefs, future plans and strategies, anticipated events or
trends, and similar expressions concerning matters that are not historical
facts. The forward-looking statements in this Report involve known and unknown
risks, uncertainties and other factors that could the cause actual results,
performance or achievements of the Company to differ materially from those
expressed in or implied by the forward-looking statements contained herein.
Overview:
Results of Operations:
Three Month Periods Ended March 31, 2005 and 2004 -
During the three months ended March 31, 2005, the Company incurred operating
expenses of $146,658, as compared with $364,076 for the comparable period in
2004. Additionally, the Company incurred interest expense of $60,329 related to
outstanding debt due to a factor, as compared with interest expense of $23,707
for the comparable period in 2004.
During the three months ended March 31, 2005, the Company had net profit of
$40,518, as compared with a net loss of $474,175 or $.02 per share for the
comparable period in 2004.
Liquidity and Capital Resources March 31, 2005:
Operating Activities -
At March 31, 2005, the Company had cash of $21,190 and a working capital surplus
of $1,178,112.
Financing Activities -
During the period ended March 31, 2005, the Company received proceeds from the
sale of common stock of $880,000, and repaid $149,641 of stockholder loans.
Results of Operations:
During the three month periods ended March 31, 2005 and 2004, the Company
incurred operating expenses of $146,658 and $364,076, respectively which
consisted mainly of management salaries and legal and accounting expenses, and
in these periods incurred interest expense of $60,329 and $23,707, respectively,
related to advances by a shareholder to or on behalf of the Company, and
borrowings from a factor.
Liquidity and Capital Resources - March 31, 2005:
Operating Activities -
At March 31, 2005, the Company had cash resources of $23,190 and a working
capital surplus of $1,178,112.
ITEM 3. CONTROLS AND PROCEDURES
As of the end of the period covered by this Quarterly Report, we carried out an
evaluation, under the supervision and with the participation of our Chief
Executive and Principal Financial Officer, of the effectiveness of our
disclosure controls and procedures. Based on this evaluation, our Chief
Executive and Principal Financial Officer concluded that our disclosure controls
and procedures are effective in timely alerting him to material information
required to be included in our periodic Securities and Exchange Commission
reports. It should be noted that the design of any system of controls is based
in part upon certain assumptions about the likelihood of future events, and
there can be no assurance that any design will succeed in achieving its stated
goals under al potential future conditions, regardless of how remote. In
addition, we reviewed our internal controls over financial reporting, and there
have been no changes in our internal controls or in other factors in the last
fiscal quarter that has materially affected or is reasonably likely to
materially affect our internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS
Exhibit
Number Description of Document
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31 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
32 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
AccessTel, Inc.
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(Registrant)
Date: July 1, 2005 By: /s/ Ralph Sayad
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Ralph Sayad
President and CFO