Nevada
|
95-4550154
|
(State or other jurisdiction of incorporation or organization)
|
(IRS Employer Identification No.)
|
Large accelerated filer o
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Accelerated filer o
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Non-accelerated filer o
|
Smaller reporting company x
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PART I. FINANCIAL INFORMATION
|
3
|
Item 1. Financial Statements
|
3
|
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
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12
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Item 3. Quantitative and Qualitative Disclosures about Market Risk.
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16
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Item 4. Controls and Procedures.
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16
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PART II. OTHER INFORMATION.
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16
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Item 1. Legal Proceedings.
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16
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Item 1A. Risk Factors.
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16
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
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16
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Item 3. Defaults upon Senior Securities.
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16
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Item 4. (Removed and Reserved)
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16
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Item 5. Other Information.
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16
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Item 6. Exhibits.
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17
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SIGNATURES
|
17
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September 30, 2011
|
December 31, 2010
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
ASSETS
|
||||||||
Current assets
|
||||||||
Cash
|
$ | 47,262 | $ | 42,214 | ||||
Cash Restricted
|
4,366,648 | 4,409,068 | ||||||
Accounts Receivable
|
60,660 | 1,644,887 | ||||||
Total current assets
|
4,474,570 | 6,096,169 | ||||||
Fixed assets, net
|
94,519 | 90,196 | ||||||
Intangible and other assets
|
||||||||
Deposits
|
3,551 | 3,551 | ||||||
Intangible assets, net
|
135,058 | 14,497 | ||||||
Total assets
|
$ | 4,707,698 | $ | 6,204,413 | ||||
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
||||||||
Current liabilities
|
||||||||
Accounts payable and accrued liabilities
|
$ | 871,280 | $ | 2,425,351 | ||||
Customer card funding
|
4,366,648 | 4,409,068 | ||||||
Notes payable- related parties
|
538,000 | 538,000 | ||||||
Convertible note payable
|
10,000 | 10,000 | ||||||
Notes payable
|
1,943,900 | 1,948,900 | ||||||
Total current liabilities
|
7,729,828 | 9,331,319 | ||||||
Long-term liabilities
|
||||||||
Notes payable, non-current portion
|
-- | -- | ||||||
Total long Term liabilities
|
-- | -- | ||||||
Total liabilities
|
7,729,828 | 9,331,319 | ||||||
Commitments and contingencies
|
-- | -- |
Stockholders' deficit
|
||||||||
Common stock; $0.001 par value; 150,000,000 shares authorized,
35,250,391 and 35,245,069 issued and outstanding at September 30, 2011 and December 31, 2010, respectively
|
35,250 | 35,245 | ||||||
Additional paid-in capital
|
4,975,686 | 4,974,756 | ||||||
Treasury stock at cost, 303,450 shares
|
(150,000 | ) | (150,000 | ) | ||||
Accumulated deficit
|
(7,940,452 | ) | (8,044,395 | ) | ||||
Total 3Pea International, Inc.'s stockholders' deficit
|
(3,079,516 | ) | (3,184,394 | ) | ||||
Noncontrolling interest
|
57,386 | 57,488 | ||||||
Total stockholders' deficit
|
(3,022,130 | ) | (3,126,906 | ) | ||||
Total liabilities and stockholders' deficit
|
$ | 4,707,698 | $ | 6,204,413 |
For the three month ended Sept 30,
|
||||||||
2011
|
2010
|
|||||||
Revenues
|
$ | 278,009 | $ | 1,051,612 | ||||
Cost of revenues
|
90,050 | 873,187 | ||||||
Gross profit
|
187,959 | 178,425 | ||||||
Operating expenses
|
||||||||
Depreciation and amortization
|
10,603 | 17,837 | ||||||
Selling, general and administrative
|
129,606 | 132,621 | ||||||
Total operating expenses
|
140,209 | 150,458 | ||||||
Income (loss) from operations
|
47,750 | 27,967 | ||||||
Other income (expense)
|
||||||||
Interest expense
|
(15,986 | ) | (16,555 | ) | ||||
Total other income (expense)
|
(15,986 | ) | (16,555 | ) | ||||
Income (loss) before provision for income taxes and noncontrolling interest
|
31,764 | 11,412 | ||||||
Provision for income taxes
|
-- | -- | ||||||
Net income (loss) before noncontrolling interest
|
31,764 | 11,412 | ||||||
Net income (loss) attributable to the noncontrolling interest
|
3 | 42 | ||||||
Net income (loss) attributable to 3Pea International, Inc.
|
$ | 31,767 | $ | 11,454 | ||||
Net income (loss) per common share - basic
|
$ | 0.00 | $ | 0.00 | ||||
Weighted average common shares outstanding - basic
|
35,249,122 | 35,233,639 |
For the nine months ended Sept 30,
|
||||||||
2011
|
2010
|
|||||||
Revenues
|
$ | 1,880,610 | $ | 2,535,427 | ||||
Cost of revenues
|
1,273,211 | 2,047,533 | ||||||
Gross profit
|
607,399 | 487,894 | ||||||
Operating expenses
|
||||||||
Depreciation and amortization
|
34,126 | 88,413 | ||||||
Selling, general and administrative
|
421,790 | 391,275 | ||||||
Total operating expenses
|
455,916 | 479,688 | ||||||
Income (loss) from operations
|
151,483 | 8,206 | ||||||
Other income (expense)
|
||||||||
Interest expense
|
(47,642 | ) | (50,685 | ) | ||||
Total other income (expense)
|
(47,642 | ) | (50,685 | ) | ||||
Income (loss) before provision for income taxes and noncontrolling interest
|
103,841 | (42,479 | ) | |||||
Provision for income taxes
|
-- | -- | ||||||
Net income (loss) before noncontrolling interest
|
103,841 | (42,479 | ) | |||||
Net income (loss) attributable to the noncontrolling interest
|
102 | 6,833 | ||||||
Net income (loss) attributable to 3Pea International, Inc.
|
$ | 103,943 | $ | (35,646 | ) | |||
Net income (loss) per common share - basic
|
$ | 0.00 | $ | (0.00 | ) | |||
Weighted average common shares outstanding - basic
|
35,248,299 | 34,507,621 |
Stockholders' Deficit Attributable to 3Pea International, Inc.
|
||||||||||||||||||||||||||||
|
Treasury
|
Non-
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Total
|
|||||||||||||||||||||||||
Common Stock
|
Additional
|
Stock
|
Accumulated
|
controlling
|
Stockholders'
|
|||||||||||||||||||||||
Shares
|
Amount
|
Paid-in Capital
|
Amount
|
Deficit
|
Interest
|
Deficit
|
||||||||||||||||||||||
Balance, December 30, 2010
|
35,245,069 | $ | 35,245 | $ | 4,974,756 | $ | (150,000 | ) | $ | (8,044,395 | ) | $ | 57,488 | $ | (3,126,906 | ) | ||||||||||||
Issuance of stock related to merger with Wow Technologies $0.22 per share
|
3,572 | 3 | 783 | - | - | - | 786 | |||||||||||||||||||||
Issuance of stock related to merger with Wow Technologies $0.15 per share
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322 | 1 | 48 | - | - | - | 49 | |||||||||||||||||||||
Issuance of stock related to merger with Wow Technologies $0.07 per share
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1,428 | 1 | 99 | - | - | - | 100 | |||||||||||||||||||||
Net income (loss)
|
- | - | - | - | 103,943 | (102 | ) | 103,841 | ||||||||||||||||||||
Balance, September 30, 2011
|
35,250,391 | $ | 35,250 | $ | 4,975,686 | $ | (150,000 | ) | $ | (7,940,425 | ) | $ | 57,386 | $ | (3,022,130 | ) |
For the nine months ended Sept 30,
|
||||||||
2011
|
2010
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income (loss)
|
$ | 103,943 | $ | (35,646 | ) | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
||||||||
Change in noncontrolling interest
|
(102 | ) | (6,833 | ) | ||||
Depreciation and amortization
|
34,126 | 88,413 | ||||||
Merger expense - stock based
|
935 | -- | ||||||
Changes in operating assets and liabilities:
|
||||||||
Change in restricted cash
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42,420 | 474,054 | ||||||
Change in accounts receivable
|
1,584,227 | (743 | ) | |||||
Change in accounts payable and accrued liabilities
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(1,554,071 | ) | 32,623 | |||||
Change in customer card funding
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(42,420 | ) | (474,054 | ) | ||||
Net cash provided by operating activities
|
169,058 | 77,814 | ||||||
Cash flows from investing activities:
|
||||||||
Purchase of fixed assets
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(36,130 | ) | -- | |||||
Capitalization of cost associated with intangible assets
|
(122,880 | ) | -- | |||||
Net cash used by investing activities
|
(159,010 | ) | -- | |||||
Cash flows from financing activities:
|
||||||||
Proceeds from borrowings on notes payable-related parties
|
-- | 3,576 | ||||||
Proceeds from stock sales
|
-- | 250 | ||||||
Payments on notes payable-related parties
|
-- | (8,951 | ) | |||||
Payments on notes payable
|
(5,000 | ) | (10,100 | ) | ||||
Net cash provided by financing activities
|
(5,000 | ) | (15,225 | ) | ||||
Net change in cash
|
5,048 | 62,589 | ||||||
Cash, beginning of period
|
42,214 | 2,903 | ||||||
Cash, end of period
|
$ | 47,262 | $ | 65,492 | ||||
Supplemental disclosure of cash flow information:
|
||||||||
Non cash financing transactions:
|
||||||||
Issuance of 6,100,000 shares of common stock for satisfaction of accounts payable and accrued liabilities
|
$ | -- | $ | 85,029 |
1.
|
DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES (continued)
|
|
·
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Administration and usage fees, charged to our prepaid card clients when our programs are created, distributed or reloaded. Such revenues are recognized when such services are performed.
|
|
·
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Transaction fees, paid by the applicable networks and passed through by our card issuing banks when our SVCs are used in a purchase or ATM transaction. Such revenues are recognized when such services are performed.
|
|
·
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Maintenance, administration, transaction fees, charged to an SVC and not under any multiple element arrangements. Such revenues are recognized when such services are performed.
|
|
·
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Program maintenance management fees charged to our clients. Such revenues are not under any multiple element arrangements and are recognized when such services are performed.
|
|
·
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Software development and consulting services to our clients. Such revenues are recognized in accordance with ASC 985-605.
|
As of
September 30, 2011
|
As of
December 31, 2010
|
|||||||
Equipment
|
$ | 477,796 | $ | 441,667 | ||||
Software
|
257,092 | 257,092 | ||||||
Furniture and fixtures
|
58,120 | 58.120 | ||||||
Leasehold equipment
|
14,780 | 14,780 | ||||||
807,788 | 768,659 | |||||||
Less: accumulated depreciation
|
713,269 | 681,463 | ||||||
Fixed assets, net
|
$ | 94,519 | $ | 90,196 |
As of
September 30, 2011
|
As of
December 31, 2010
|
|||||||
Patents and trademarks
|
$ | 33,465 | $ | 33,465 | ||||
Platform development
|
122,880 | -0- | ||||||
156,345 | 33,465 | |||||||
Less: accumulated amortization
|
21,287 | 18,968 | ||||||
Intangible assets, net
|
135,058 | $ | 14,497 |
•
|
Reduced time to market for card programs for 3PEA customers.
|
•
|
More flexible options for customers with the implementation of a modern and agile card management system.
|
•
|
New authorization features such as chip card and Near Field Communication “NFC” (contactless) chip card for future compliance.
|
•
|
Better support for non-prepaid programs, with integration capabilities to bank accounting systems to enhance the company’s offering as an agent processor to banks.
|
•
|
Support strategic relationships with retail merchants due to better capabilities to implement cutting edge custom card solutions under bi-lateral agreements.
|
•
|
Meet current and future compliance regimes.
|
•
|
More powerful reporting capabilities with integration to Data Warehouse and General Ledger.
|
•
|
More powerful administrative and customer support capabilities for managing card programs.
|
•
|
Transaction switching capability that can support financial and non-financial transactions, allowing 3PEA to explore opportunities for processing contracts in vertical markets.
|
•
|
Network segmentation and re-alignment of existing infrastructure.
|
•
|
Deployment of new Servers and Operating System upgrades.
|
•
|
Deployment of new security systems.
|
•
|
Deploying new internal and external network security appliances and system security applications.
|
•
|
Deployment of new Host Security Modules to handle cryptographic requirements in relation to payments interchanges to EFT networks
|
•
|
Deployment of new hardware fault-tolerant servers to run the payments platform.
|
Nine months ended September 30,
|
|||||||||
2011
|
2010
|
||||||||
Net cash provided by (used) in operating activities
|
$ | 169,058 | $ | 77,814 | |||||
Net cash provided by (used) in investing activities
|
(159,010 | ) | -- | ||||||
Net cash provided by (used) in financing activities
|
(5,000 | ) | (15,225 | ) | |||||
Net (decrease) increase in unrestricted cash and cash equivalents
|
5,048 | 62,589 |
31.1
|
Certification Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934
|
31.2
|
Certification Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934
|
32.1
|
Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
32.2
|
Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Schema Document
|
101.CAL
|
XBRL Calculation Linkbase Document
|
101.DEF
|
XBRL Definition Linkbase Document
|
101.LAB
|
XBRL Label Linkbase Document
|
101.PRE
|
XBRL Presentation Linkbase Document
|
3PEA INTERNATIONAL, INC.
|
|
Date: November 14, 2011
|
/s/ Mark Newcomer
|
By: Mark Newcomer, Chief Executive Officer
(principal executive officer)
|
|
Date: November 14, 2011
|
/s/ Arthur De Joya
|
By: Arthur De Joya, Chief Financial Officer
(principal financial and accounting officer)
|
Dated: November 14, 2011
|
/s/ Mark Newcomer
|
Mark Newcomer
Chief Executive Officer
(principal executive officer)
|
Dated: November 14, 2011
|
/s/ Arthur De Joya
|
Arthur De Joya
Chief Financial Officer
(principal financial and accounting officer)
|
Consolidated Balance Sheet (Parentheticals) (USD $) | Sep. 30, 2011 | Dec. 31, 2010 |
---|---|---|
Common stock par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock shares authorized | 150,000,000 | 150,000,000 |
Common stock shares issued | 35,250,391 | 35,245,069 |
Common stock shares outstanding | 35,250,391 | 35,245,069 |
Treasury stock shares | 303,450 | 303,450 |
Document And Entity Information (USD $) | 9 Months Ended | ||
---|---|---|---|
Sep. 30, 2011 | Oct. 10, 2011 | Jun. 30, 2011 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | 3PEA INTERNATIONAL, INC. | ||
Document Type | 10-Q | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 35,250,391 | ||
Entity Public Float | $ 1,265,168 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001496443 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | Sep. 30, 2011 | ||
Document Fiscal Year Focus | 2011 | ||
Document Fiscal Period Focus | Q3 |
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2. FIXED ASSETS | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment Disclosure [Text Block] |
2. FIXED
ASSETS
Fixed
assets consist of the following:
|
3. INTANGIBLE ASSETS | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Text Block] |
3.
INTANGIBLE
ASSETS
Intangible
assets consist of the following:
Intangible
assets are amortized over their useful lives ranging from
periods of 5 to 15 years.
|
4. COMMON STOCK | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Stockholders' Equity Note Disclosure [Text Block] |
4. COMMON
STOCK
At
September 30, 2011, the Company's authorized capital stock
was 150,000,000 shares of common stock, par value $0.001 per
share, and 10,000,000 shares of preferred stock, par value
$0.001 per share. On that date, the Company had
outstanding 35,250,391 shares of common stock, and no shares
of preferred stock.
2011
Transactions: During the nine months ended
September 30, 2011, the Company issued shares 5,322 shares of
common stock to various shareholders of Wow Technologies,
Inc. valued at $0.07 to $0.22 per share.
All
shares issued (or cancelled) for services or in exchange for
Wow common stock are valued on the market price on the date
issuance.
|
Consolidated Statement of Stockholders' Equity (USD $) | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Retained Earnings [Member] | Noncontrolling Interest [Member] | Total |
---|---|---|---|---|---|---|
Balance at Dec. 31, 2010 | $ (3,126,906) | |||||
Issuance of stock related to merger (Per share 0.22) | 3 | 783 | 786 | |||
Issuance of stock related to merger (Per share 0.15) | 1 | 48 | 49 | |||
Issuance of stock related to merger (Per share 0.07) | 1 | 99 | 100 | |||
Issuance of stock related to merger (in Shares) (Per share 0.22) | 3,572 | |||||
Issuance of stock related to merger (in Shares) (Per share 0.15) | 322 | |||||
Issuance of stock related to merger (in Shares) (Per share 0.07) | 1,428 | |||||
Net income (loss) | 103,943 | (102) | 103,841 | |||
Balance at Sep. 30, 2011 | $ 35,250 | $ 4,975,686 | $ (150,000) | $ (7,940,425) | $ 57,386 | $ (3,022,130) |
Balance (in Shares) at Sep. 30, 2011 | 35,250,391 |
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES | 9 Months Ended | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | ||||||||||||||||
Basis of Presentation and Significant Accounting Policies [Text Block] |
1. BASIS OF
PRESENTATION AND SUMMARY OF SIGNIFICANT
POLICIES
The
foregoing unaudited interim financial statements have been
prepared in accordance with generally accepted accounting
principles for interim financial information and with the
instructions for Form 10-Q and Regulation S-X as promulgated
by the Securities and Exchange Commission
(“SEC”). Accordingly, these financial statements
do not include all of the disclosures required by generally
accepted accounting principles in the United States of
America for complete financial statements. These unaudited
interim financial statements should be read in conjunction
with the audited financial statements and the notes thereto
included on Form 10-K for the year ended December 31, 2010.
In the opinion of management, the unaudited interim financial
statements furnished herein include all adjustments,
all of which are of a normal recurring nature, necessary for
a fair statement of the results for the interim period
presented.
The
preparation of financial statements in accordance with
generally accepted accounting principles in the United States
of America requires the use of estimates and assumptions that
affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities known to
exist as of the date the financial statements are published,
and the reported amounts of revenues and expenses during the
reporting period. Uncertainties with respect to such
estimates and assumption are inherent in the preparation of
the Company’s financial statements; accordingly, it is
possible that the actual results could differ from these
estimates and assumptions that could have a material effect
on the reported amounts of the Company’s financial
position and results of operations.
Operating
results for the nine month period ended September 30, 2011
are not necessarily indicative of the results that may be
expected for the year ending December 31, 2011.
About
3PEA International, Inc.
3PEA
International, Inc. is a transaction-based solutions
provider. 3PEA through its wholly owned subsidiary 3PEA
Technologies, Inc., focuses on delivering reliable and secure
payment solutions to help healthcare companies,
pharmaceutical companies and payers businesses succeed in an
increasingly complex marketplace. By serving as a
single source for payment processing and unique Healthcare
solutions, 3Pea sets new standards in convenience,
reliability and innovation.
Going
concern – The Company incurred accumulated net
losses of approximately $7,947,425 as
of September 30, 2011 and does not have sufficient
operating capital to sustain its operating activities for the
twelve months, raising substantial doubt about the
Company’s ability to continue as a going
concern. The Company will seek additional sources
of capital through the issuance of debt or equity financing,
but there can be no assurance the Company will be successful
in accomplishing its objectives. The ability of
the Company to continue as a going concern is dependent on
additional sources of capital and the success of generating
sufficient revenues to fund its operating
activities. The consolidated financial statements
do not include any adjustments that might be necessary if the
Company is unable to continue as a going concern.
Principles
of consolidation – The consolidated financial
statements include the accounts of the Company and its
subsidiaries. All significant intercompany
balances and transactions have been eliminated.
Use of
estimates - The preparation of consolidated 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 consolidated financial
statements and the reported amounts of revenue and expenses
during the reporting period. Actual results could
differ from those estimates.
Restricted
cash – restricted cash is a cash account
controlled by the Company which funds are received related to
the card programs from our customers. The Company has
recorded a corresponding customer card funding
liability.
Revenue
and expense recognition – We recognize revenue
when (1) there is persuasive evidence of an arrangement
existing, (2) delivery has occurred, (3) our price to the
buyer is fixed or determinable and (4) collectability of the
receivables is reasonably assured. We recognize the costs of
these revenues at the time revenue is
recognized. Any fees paid up front are deferred
until such time such services have been considered rendered.
As of September 30, 2011 and December 31,
2010, there are no deferred revenues recorded.
We
generate the following types of revenues:
The
Company records all revenues on gross basis in accordance
with ASC 605-45 since it is the primary obligor and
establishes the price in the revenue arrangement. The
Company is currently under no obligation for refunding any
fees or has any obligations for disputed claim
settlements.
Earnings
(loss) per share - Basic earnings (loss) per share
exclude any dilutive effects of options, warrants and
convertible securities. Basic earnings (loss) per share is
computed using the weighted-average number of outstanding
common stocks during the applicable period. Diluted earnings
per share is computed using the weighted-average number of
common and common stock equivalent shares outstanding during
the period. Common stock equivalent shares are excluded from
the computation if their effect is antidilutive.
New
accounting pronouncements - In April 2010, the FASB
reached a consensus on the Milestone Method of Revenue
Recognition which provides guidance on the criteria that
should be met for determining whether the milestone method of
revenue recognition is appropriate. A vendor can recognize
consideration that is contingent upon the achievement of a
milestone in its entirety as revenue in the period in which
the milestone is achieved only if the milestone meets all
criteria to be considered substantive. The updated guidance
is effective on a prospective basis for milestones achieved
in fiscal years, and interim periods within those years
beginning on or after June 15, 2010, with early adoption
permitted. We adopted the provisions of the guidance as of
January 1, 2011 on a prospective basis. The prospective
application had no impact on our consolidated financial
statements for the nine months ended September 30,
2011.
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