U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
AMENDMENT NO. 2
TO
(MARK ONE)
[X] QUARTERLY REPORT PUSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the QUARTERLY PERIOD ended MARCH 31, 2002
OR
[ ] TRANSITION REPORT PUSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM __________________ TO ________________________
Commission File Number: 000-29217
ACCESSPOINT CORPORATION
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(Name of Small Business Issuer in its Charter)
Nevada 95-4721385
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(State or Other Jurisdiction of Incorporation or (I.R.S. Employer
Organization) Identification No.)
21031 Ventura Boulevard, Suite 200
Woodland Hills, California 91364
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(Address of Principle Executive Offices) (Zip Code)
(818) 737-3232
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(Issuer's Telephone Number, Including Area Code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE EXCHANGE ACT:
None
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE EXCHANGE ACT:
Common Stock, $0.001 Par Value
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The number of the Company's shares of Common Stock outstanding as of March 31,
2002 was 23,533,271.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [ X ]
EXPLANATORY NOTE
This Quarterly Report on Form 10-QSB/A ("Form 10-QSB/A") is being filed as
Amendment No. 2 to the Registrant's Quarterly Report on Form 10-QSB filed with
the Securities and Exchange Commission on May 20, 2002 ("Form 10-QSB") for the
purpose of amending Part I, Item 1 and Part II, Item 6 of Registrant's Form
10-QSB. Specifically, we have made the following three changes: 1) on the
Balance Sheet, the asset (merchant portfolio purchased from Northwest Systems,
LLC) previously referred to as "Goodwill" has been renamed "Intangible Asset";
2) on the Notes to Consolidated Financial Statements, Notes I and J have been
updated; and 3) as an Exhibit, we have attached the Northwest Systems Merchant
Portfolio Purchase Agreement. We have no further changes to the previously filed
Form 10-QSB. All information in this Form 10-QSB/A is as of March 31, 2002, and
does not reflect, unless otherwise noted, any subsequent information or events
other than the changes mentioned above.
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Our reviewed consolidated financial statements for the periods ended March
31, 2002 and March 31, 2001 are filed herewith.
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INDEPENDENT ACCOUNTANT'S REPORT
To the Board of Directors
Accesspoint Corporation
Los Angeles, California
Members of the Board:
We have reviewed the accompanying consolidated balance sheet of Accesspoint
Corporation and its subsidiaries ("the Company") as of March 31, 2002 and the
related consolidated statements of operations, changes in stockholders' equity,
and cash flows for the three month periods ended March 31, 2002 and 2001. These
financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of inquiries of persons responsible for
financial and accounting matters and analytical procedures applied to financial
data. It is substantially less in scope than an audit in accordance with
generally accepted auditing standards generally accepted in the United States of
America, the objective of which is the expression of an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such an
opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying consolidated financial statements in order for them
to be in conformity with generally accepted accounting principles in the United
States of America.
We previously audited in accordance with auditing standards generally accepted
in the United States of America, the consolidated balance sheet as of December
31, 2001, and the related consolidated statements of operations, changes in
stockholders' equity and cash flows for the year then ended (not presented
herein), and in our report dated April 4, 2002 we expressed an unqualified
opinion on those consolidated financial statements. In our opinion, the
information set forth in the accompanying consolidated balance sheet as of
December 31, 2001 is fairly stated in all material respects in relation to the
consolidated balance sheet from which it has been derived.
As discussed in Note I to the financial statements the Company has corrected for
various errors discovered on its March 31, 2002 financial statements. As
discussed in Note K to the financial statements, the Company's Deferred
Financing Costs should have been reported as $6,326,381 with related
amortization of $316,319. These discoveries were made subsequent to the issuance
of the financial statements. The financial statements have been restated to
reflect these corrections. Note J discusses a subsequent event that occurred
subsequent to May 16, 2002.
May 16, 2002, except for Notes I and K, as to which the date is July 29, 2002.
Los Angeles, California
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ACCESSPOINT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2002 AND 2001
NOTE I - CORRECTIONS TO FINANCIAL STATEMENTS
On February 25, 2002, the Company purchased a portfolio of residual
compensation identified as a merchant base held by Chase Merchant
Services from another corporation. The purchase price was $500,000,
payable in installments starting February 27, 2002 and ending November
25, 2002. This transaction was not originally reported in the Company's
financial statements. The merchant base is now recorded as an
intangible asset at a cost of $500,000 with a related remaining
liability of $300,000 added to the current portion of notes payable. An
initial $200,000 down payment was made through an advance on the
company's line of credit, which resulted in an equal increase to the
amount originally reported for the line of credit. Subsequent to March
31, 2002 this purchase was rescinded (see Note J).
The Company corrected an amount owed from a customer for clearing costs
which resulted in an increase in accounts receivable and an equal
decrease in cost of sales of $57,734.
The Company corrected its residual payment accruals for an error on a
vendor account which resulted in a reduction in the accrual and in cost
of sales of $48,653.
The Company corrected its cash balances for checks it voided that
resulted in an increase in the cash balance and a decrease to general
and administrative expenses of $31,059.
The Company made additional immaterial corrections to various accounts
as of March 31, 2002 that included interest, general and
administrative, selling, and bad debt expenses and line of credit,
cash, accounts receivable and accounts payable.
NOTE J - SUBSEQUENT EVENTS
MERCHANTWAREHOUSE.COM - In April 2002, a former agent of the Company
filed suit against the Company. The firm is claiming improper
termination of agency agreement and has requested $1,000,000. The
Company has not had time to respond to the demand, however, it does not
believe that the allegations have any merit. The claim asks for binding
arbitration. It is not possible at this time to determine the outcome
of the case or the possible loss. No amounts have been accrued in this
matter.
PORTFOLIO PURCHASE - In July 2002, the Company rescinded its purchase
agreement related to the purchase of a portfolio of residual
compensation identified as a merchant base held by Chase Merchant
Services from another corporation (see Note I). Accordingly the Company
will book a receivable for its initial $200,000 payment under the terms
of the agreement and reverse its original entry to record the purchase
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PART II
OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibits
The following Exhibits are incorporated herein by reference or are filed
with this report as indicated below.
Exhibit No. Description
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9.0 **Form of Irrevocable Voting Proxy in favor of Net Integrated
Systems, Ltd.
10.37 **Form of Stock Transfer Letter between shareholder and Net
Integrated Systems, Ltd.
10.38 **Form of Stock Option Agreement between shareholder and Net
Integrated Systems, Ltd.
10.39 **Form of First Amendment to Stock Option Agreement between
shareholder and Net Integrated Systems, Ltd.
10.40 **Form of Stock Pledge Agreement between shareholder and Net
Integrated Systems, Ltd.
10.41 **Management Agreement between Accesspoint Corporation,
Processing Source International, Inc. and Net Integrated
Systems, Ltd.
10.42 **Revolving Line of Credit Agreement
10.43 **Secured Loan Agreement
10.44 Merchant Portfolio Purchase Agreement between Processing
Source International, Inc. and Northwest Systems, LLC
21.00 *List of Subsidiaries
* Incorporated by reference from the exhibit to the Annual Report on Form
10-KSB filed by us on April 16, 2001
** Incorporated by reference from the exhibit to the Current Report on
Form 8-K filed by us on January 14, 2002
B. REPORTS ON FORM 8-K
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Los Angeles, State
of California, on the 31st day of July, 2002.
Dated: July 31, 2002 ACCESSPOINT ORPORATION
By: /s/ Marcia Allen
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Marcia Allen,
President and Director
By: /s/ Christine Crocker
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Christine Crocker,
Secretary and Director
Pursuant to the requirements of the Securities Act of 1934, this report has
been signed by the following persons in the capacities and on the dates
indicated:
Signature Title Date
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/s/ Marcia Allen President & Director July 31, 2002
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Marcia Allen
/s/ Christine Crocker Secretary & Director July 31, 2002
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Christine Crocker
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