SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 26, 2018
3PEA INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Nevada | 000-54123 | 95-4550154 |
(State or other jurisdiction of incorporation) | (Commission file number) | (I.R.S. Employer Identification Number) |
1700 W Horizon Ridge Parkway, Suite 102,
Henderson, Nevada 89012
(Address of principal executive offices) (Zip Code)
(702) 453-2221
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Section 2 - Financial Information
Item 2.02 Results of Operations and Financial Condition.
On March 26, 2018, 3PEA International Inc. issued a press release regarding its financial results for the year ended December 31, 2017. A copy of the press release is filed herewith as Exhibit 99.1 to this Current Report and is incorporated herein by reference.
As provided in General Instruction B.2 of SEC Form 8-K, such information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and it shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or under the Exchange Act, whether made before or after the date hereof, except as expressly set forth by specific reference in such filing to this Current Report on Form 8-K.Section 9 – Financial Statements and Exhibits.
Item 9.01 Financial Statements and Exhibits.
(a) | Financial Statements of businesses acquired: Not applicable. |
(b) | Pro forma financial information: Not applicable. |
(c) | Shell company transactions: Not applicable. |
(d) | Exhibits: |
Exhibit No. | Description |
99.1 | Press release dated March 26, 2018 |
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.
3PEA INTERNATIONAL, INC. | |
Date: March 28, 2018 | /s/ Mark Newcomer |
By: Mark Newcomer, Chief Executive Officer |
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Exhibit 99.1
3PEA Reports Full Year 2017 Financial Results
2017 Revenue up 46% to a Record $15.2M; Drives Net Income of $1.8M and Diluted EPS of $0.04
HENDERSON, Nev.--(BUSINESS WIRE)-- 3PEA International, Inc. (OTCQB:TPNL), a vertically integrated provider of innovative prepaid card programs and processing services for corporate, consumer and government applications, reported financial results for the fourth quarter and full year ended December 31, 2017.
Management Commentary
“We are very pleased with our 2017 results. We recorded record revenue, increased our cardholder base significantly, and increased our net profits,” said Mark Newcomer, Chief Executive Officer, 3PEA International. “We are executing on our strategy focused on expanding both the PaySign brand and our cardholder base in existing markets as we continue to build our sales team. In 2017, there were over 1,550,000 PaySign cardholders nationwide. We are extremely optimistic as we continue to experience a robust sales pipeline in both new and existing markets.”
“2017 was a breakthrough year for 3PEA,” said Brian Polan, Chief Financial Officer, 3PEA International. “The Company successfully grew revenues and net profit, maintained gross margins, increased its cash flow from operations, and continued to operate debt free.”
2017 Financial Results
Revenues for the year ended December 31, 2017 were $15,234,091, an increase of $4,817,419 compared to the year ended December 31, 2016, when revenues were $10,416,672. The increase in revenue approximating 46% was primarily due to an increase in the number of new corporate incentive prepaid card products and growth within our existing card products.
Gross profit in 2017 increased to $6.7 million, or 44.0% of total revenues, compared to $4.5 million, or 43.6% of total revenues in 2016. The Company expects gross profit margins will improve in 2018.
Total operating expenses in 2017 were $4.9 million compared to $3.2 million in 2016. The increase was due to increases in selling, general and administrative expenses and depreciation and amortization as we continued to add administrative staff, invest in infrastructure, and build out our Sales, Marketing and Business Development departments.
Net income in 2017 was $1.8 million, or $0.04 per diluted share, compared to net income of $1.4 million, or $0.03 per share in 2016.
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Company Update
In 2018, the Company’s revenue focus will be to increase our footprint in our existing markets, expand our product and services offerings to existing cardholders, while aggressively targeting new, high margin business in new markets and geographies. Recent investments in sales and marketing have resulted in the most robust sales pipeline in the company’s history. For 2018, the Company believes it will experience growth rates comparable to, or better than, those experienced in 2017 as a result of growth in our existing card products and the expected addition of new card products in various market verticals. The Company expects gross profit margins to see improvement in 2018. As of December 31, 2017, the Company had over 1,550,000 PaySign Cardholders participating in 205 card products and continues to increase the number of card products in its portfolio.
In the first quarter of 2018, The Company has begun taking the necessary steps to meet the various requirements to apply for uplisting to a national exchange.
About 3PEA International
3PEA International (OTCQB:TPNL) is an experienced and trusted prepaid debit card payment solutions provider as well as an integrated payment processor. Through its PaySign brand, 3PEA designs and develops payment solutions, prepaid card programs, and customized payment services. 3PEA’s corporate incentive prepaid cards are changing the way corporations reward, motivate, and engage their current and potential customers, employees, and agents. 3PEA’s customizable prepaid solutions offer significant cost savings while improving brand recognition and customer loyalty. 3PEA’s customers include healthcare companies, major pharmaceutical companies, large multinationals, prestigious universities, and social media companies. PaySign is a registered trademark of 3PEA Technologies, Inc. in the United States and other countries. For more information visit us at www.3pea.com or follow us on LinkedIn, Twitter and Facebook.
Forward-Looking Statements
Certain statements in this news release may contain forward-looking information within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the safe harbor created by those rules. All statements, other than statements of fact, included in this release, including, without limitation, statements regarding potential future plans and objectives of the companies, are forward-looking statements that involve risks and uncertainties. There is no assurance that such statements will prove to be accurate, and actual results and future events could differ materially. 3PEA undertakes no obligation to publicly update or revise any statements in this release, whether as a result of new information, future events, or otherwise.
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3PEA INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE TWELVE MONTHS ENDED DECEMBER 30, 2017 AND 2016
(AUDITED)
For the year ended | For the year ended | |||||||
December 31, 2017 | December 31, 2016 | |||||||
Revenues | $ | 15,234,091 | $ | 10,416,672 | ||||
Cost of revenues | 8,534,272 | 5,879,238 | ||||||
Gross profit | 6,699,819 | 4,537,434 | ||||||
Operating expenses | ||||||||
Depreciation and amortization | 876,191 | 572,320 | ||||||
Selling, general and administrative | 4,055,836 | 2,606,505 | ||||||
Total operating expenses | 4,932,027 | 3,178,825 | ||||||
Income from operations | 1,767,792 | 1,358,609 | ||||||
Other income (expense) | ||||||||
Other income | 55,541 | 16,149 | ||||||
Interest expense | (31,623 | ) | (77,107 | ) | ||||
Total other income (expense) | 23,918 | (60,958 | ) | |||||
Income before noncontrolling interest | 1,791,710 | 1,297,651 | ||||||
Provision for income taxes | 6,000 | – | ||||||
Net income before noncontrolling interest | 1,785,710 | 1,297,651 | ||||||
Net loss attributable to the noncontrolling interest | 5,431 | 103,148 | ||||||
Net income attributable to 3PEA International, Inc. | $ | 1,791,141 | $ | 1,400,799 | ||||
Net income per common share - basic | $ | 0.04 | $ | 0.03 | ||||
Net income per common share - fully diluted | $ | 0.04 | $ | 0.03 | ||||
Weighted average common shares outstanding - basic | 43,397,477 | 42,875,519 | ||||||
Weighted average common shares outstanding - fully diluted | 44,934,977 | 43,867,228 | ||||||
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3PEA INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2017 AND 2016
(AUDITED)
December 31, | December 31, | |||||||
2017 | 2016 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash | $ | 2,748,313 | $ | 1,631,943 | ||||
Restricted Cash | 14,416,444 | 10,002,505 | ||||||
Accounts Receivable | 165,523 | 110,269 | ||||||
Prepaid Expenses and other current assets | 572,789 | 270,634 | ||||||
Total current assets | 17,903,069 | 12,015,351 | ||||||
Fixed assets, net | 854,402 | 300,761 | ||||||
Intangible and other assets | ||||||||
Deposits | 5,551 | 5,551 | ||||||
Intangible assets, net | 1,639,557 | 1,550,044 | ||||||
Total assets | $ | 20,402,579 | $ | 13,871,707 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable and accrued liabilities | $ | 1,145,083 | $ | 765,596 | ||||
Customer card funding | 14,416,444 | 10,002,505 | ||||||
Legal settlement payable - current portion | – | 254,900 | ||||||
Notes payable | – | 124,168 | ||||||
Total current liabilities | 15,561,527 | 11,147,169 | ||||||
Long-term liabilities | ||||||||
Notes Payable | – | 27,892 | ||||||
Total long-term liabilities | – | 27,892 | ||||||
Total liabilities | 15,561,527 | 11,175,061 | ||||||
Stockholders' equity | ||||||||
Common stock: $0.001 par value; 150,000,000 shares authorized, 43,670,765 and 43,185,765 issued and outstanding at December 31, 2017 and December 31, 2016, respectively | 43,671 | 43,186 | ||||||
Additional paid-in capital | 7,155,970 | 6,797,759 | ||||||
Treasury stock at cost, 303,450 shares and 303,450 shares, December 31, 2017 and December 31, 2016, respectively | (150,000 | ) | (150,000 | ) | ||||
Accumulated deficit | (2,008,472 | ) | (3,799,613 | ) | ||||
Total 3PEA International, Inc.'s stockholders' equity | 5,041,169 | 2,891,332 | ||||||
Non-controlling interest | (200,117 | ) | (194,686 | ) | ||||
Total stockholders' equity | 4,841,052 | 2,696,646 | ||||||
Total liabilities and stockholders' equity | $ | 20,402,579 | $ | 13,871,707 |
Contacts
3PEA International, Inc.
Brian Polan, 1-702-749-7234
Chief Financial Officer
bpolan@3pea.com
www.3pea.com
Source: 3PEA International, Inc.
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