##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-K/A
 (Amendment No. 1)
 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the fiscal year ended September 30, 2010
 or
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number 000-30099
 Access Plans, Inc.
  OKLAHOMA
    
    27-1846323(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 th
 
 o þ
 Yes o No þ
 þ o
 o o
 o þ
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company  þ
 o þ




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##### 



ACCESS PLANS, INC.
 FORM 10-K
 TABLE OF CONTENTS
 PART IITEM 1. BUSINESS
    
    
    3ITEM 1A. RISK FACTORS
    
    
    13ITEM 1B. UNRESOLVED STAFF COMMENTS
    
    
    20ITEM 2. PROPERTIES
    
    
    21ITEM 3. LEGAL PROCEEDINGS
    
    
    21PART IIITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
    
    
    22ITEM 6. SELECTED FINANCIAL DATA
    
    
    23ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    23ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
    
    
    36ITEM 8. FINANCIAL STATEMENTS
    
    
    36ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
    
    
    61ITEM 9A AND ITEM 9A(T). CONTROLS AND PROCEDURES
    
    
    61ITEM 9B. OTHER INFORMATION
    
    
    62PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
    
    
    62ITEM 11. EXECUTIVE COMPENSATION
    
    
    67ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
    
    
    72ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
    
    
    73ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
    
    
    75PART IVITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
    
    
    75SIGNATURES
    
    
    77Exhibit 10.12Exhibit 10.13Exhibit 10.14Exhibit 10.15Exhibit 10.16Exhibit 10.17Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
  Explanatory Note
 Access Plans, Inc. is filing this Amendment No. 1 on Form 10-K/A to our Annual Report on Form 10-K
for the year ended September 30, 2010, initially filed with the Securities and Exchange Commission
on December 22,2010.
 The following sections of this Form 10-K/A have been amended:
 
    
    Item 9A  Controls and Procedures  was revised to modify our conclusions regarding disclosure
controls and procedures as of these dates.
    
    The signature page date has been revised.
  2




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##### Table of Contents



ITEM 1.
    
    BUSINESS.
   Wholesale Plans
   Retail Plans
  Insurance Marketing
  Corporate
  INDUSTRY OVERVIEW
 Wholesale Plans
    3




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##### Table of Contents



Healthcare Industry
  The uninsured
  The insured and underinsured .
 Over-utilization, increasing regulation and legislation
    4




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##### Table of Contents



Self-employed and small businesses .
 Senior population
 HISTORY OF THE COMPANY
       BUSINESS OVERVIEW
   5




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##### Table of Contents



Wholesale Plans
   Retail Plans
  See Note 4. Mergers and
Acquisitions
   
    
    Maintaining member eligibility;
 
    
    Generate periodic reporting to contracted third party networks and other
vendors;
 
    
    Paying commissions;
 
    
    Maintaining a database of providers and provider locator services; and
 
    
    Drafting or charging member accounts and tracking cash receipts.
  6




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Insurance Marketing
  See Note 4. Mergers and Acquisitions
  
    
    e-Agent Center  provides agents with access to real-time rate quoting, on-line
licensing and contracting, insurance application submission, access to brochures
and other marketing materials.
 
    
    Lead Distribution  we utilize an electronic system to connect agents with an
on-line lead ordering and delivery system. Leads are also provided in certain
situations as incentives to sell certain policies.
 
    
    Incentive programs  to assist with agent motivation and recruitment, we
provide paid annual convention trips and periodic sales contests.
 
    
    Agent advances  with most of the major medical products we represent, agents
are entitled to from three to nine months of advance commissions either funded by
AHCP or our insurance carrier partner. Our ability to grow this segment will
depend, in part, on our continued access to working capital to fund these advances.
 
    
    Home office support  this includes agent and product training, marketing
materials and agent communication. The training programs include both on-site and
in-house schools, DVDs and webcasts covering product knowledge and sales techniques
as well as market conduct and regulatory compliance issues. In addition, our
support includes development and distribution of a wide variety of marketing
materials including flyers, brochures, email blasts and letters. We also promote
and inform our agents on important news and updates via a weekly newsletter.
  
    
    continue working with insurance carriers in the development of proprietary products
for our agents to represent;
 
    
    expand the number of carriers that we represent for more product choice for customers
and expanded geographic representation; and
 
    
    enhance our e-agent platforms in order to better serve our existing agents and improve
attraction of new agents to sell insurance products we represent.
   7




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##### Table of Contents



BUSINESS STRATEGY
  
    
    expanding and improving relationships with our membership plans provider vendors and
insurance carrier partners;
 
    
    maintaining and enhancing customer and agent satisfaction by providing high quality telephone
and web support;
 
    
    continually enhancing existing programs and developing innovative solutions and products for
our clients and agents; and
 
    
    assisting the market to understand how our offerings are different and superior.
 Increase Market Penetration
  Maintain and Enhance Customer Satisfaction
  Continually Enhance Programs
  Manage Growth Effectively
   8




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##### Table of Contents



SERVICES
  Discount Medical
    
    InsurancePhysician Network Access
    
    Major Medical/Individual Health InsuranceDental Network Access
    
    Life InsuranceVision Care & Eyewear Network Access
    
    Accidental Death & DismembermentPharmacy Network Discounts
    
    Involuntary UnemploymentMail Order Pharmacy Discounts
    
    Leased Property InsuranceChiropractor Network Access
    
    Dental InsuranceHearing Aid Discounts
    
    Limited Medical InsuranceVitamins & Nutritional Supplements
    
    Critical Illness Insurance
 Automotive Discounts
    
    Dealer Add-In BenefitsDiscounted Roadside Assistance
    
    Lease Cancellation BenefitsAutomotive Service Provider Savings
    
    Account ReinstatementCustomer Trip Routing
    
    Points Program for On Time PaymentsCar Theft RewardRental Car Savings
 Food and Entertainment
    
    Miscellaneous BenefitsGrocery Coupon Savings
    
    Kid SecureRestaurant Savings
    
    Discounted Legal ServicesTheme Park Discounts
    
    Savings at Choice HotelsMovie Theater Discounts
    
    Savings at 1-800Flowers.comProduct Service Plans
 CUSTOMERS
     9




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EMPLOYEES
  Number ofDepartment
    
    EmployeesCustomer Services and Client Support
    
    
    40Sales and Marketing
    
    
    11Executive and Administration
    
    
    10Finance and Accounting
    
    
    10Information Services
    
    
    7
 COMPETITION
 Wholesale and Retail Plans Divisions
  Insurance Marketing Division
     GOVERNMENT REGULATION
    10




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Discount Medical Regulations
   
    
    non-compliance may cause us to lose licensing status or to become the subject of a
variety of enforcement or private actions;
 
    
    compliance with changes in applicable regulations could materially increase the
associated operating costs;
 
    
    non-compliance with any rules and regulations enforced by a federal or state
consumer protection authority may subject us or our management personnel to fines or
various forms of civil or criminal prosecution; and
 
    
    non-compliance, or alleged non-compliance may result in loss of contracts, negative
publicity potentially damaging our reputation, network relationships, client relationships
and the relationship with program members, representatives and consumers in general.
 Insurance Regulations
  
    
    Similar to the insurance companies providing products and services offered by us, we
are unable to accurately predict additional government regulations, including health care
reform currently pending at the federal level, that may be enacted affecting the
insurance industry and the offered products and service or how existing or future
regulations might be interpreted.
  11




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
    
    Additional governmental regulation or future interpretation of existing regulations may
decrease the amount of commissions we can earn, eliminate some of the products we offer,
increase the cost of compliance or materially affect the insurance products and services
offered by us and our profitability.
 
    
    We must rely on the insurance companies that provide the insurance products and
financial services offered by us to carefully monitor state and federal legislative and
regulatory activity as it affects their insurance products and services. We believe that
the insurance products and financial services that we offer comply in all material
respects with all applicable federal and state regulations.
 
    
    Among the benefits afforded to the members of our association are varying forms of
insurance. Our ability to offer insurance products that we are authorized to distribute
to this association for inclusion in its benefit packages may be affected by governmental
regulation or future interpretation of existing regulations that may increase the cost of
regulatory compliance or affect the nature and scope of products that we may make
available to such associations.
 
    
    We are currently offering extended service contracts that we obtain from a service
contract provider in three states through a retailer of electronics and appliances.
Those three states regulate extended service contracts under the state insurance code.
These laws generally regulate the disclosures, service contract provisions and require
us to obtain insurance coverage for the cost of service. We contract with a third party
vendor that provides the insurance and the customer contracts.
 Healthcare Regulation and Reform
       E-Commerce Regulation
   12




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Network Marketing Regulation
   Legislative Development
   Privacy Laws
  
 ITEM 1A.
    
    RISK FACTORS.
  
    
    adversely affect the market price of our common stock,
 
    
    adversely affect our future operations,
 
    
    adversely affect our business,
 
    
    adversely affect our financial condition,
 
    
    adversely affect our results of operations,
  13




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
    
    require significant reduction or discontinuance of our operations,
 
    
    require us to seek a merger partner, or
 
    
    require us to sell additional stock on terms that are highly dilutive to our
shareholders.
 THIS REPORT CONTAINS CAUTIONARY STATEMENTS RELATING TO FORWARD LOOKING
INFORMATION.
  
    
    discuss our future expectations,
 
    
    contain projections of our future operating results or of our future financial
condition, or
 
    
    states other forward-looking information.
  A SIGNIFICANT PORTION OF OUR REVENUE IS DEPENDENT ON TWO CLIENTS.
   A PORTION OF OUR EXPENSES ARE DEPENDENT ON FACTORS THAT WE DO NOT CONTROL.
  WE DEPEND ON VARIOUS THIRD-PARTY VENDORS TO SUPPLY CERTAIN PRODUCTS AND SERVICES THAT WE
MARKET.
   14




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WE FACE COMPETITION FOR CLIENTS TO MARKET OUR PROGRAMS AS WELL AS COMPETITIVE OFFERINGS
OF BENEFIT PROGRAMS.
   WE HAVE MANY COMPETITORS AND MAY NOT BE ABLE TO COMPETE EFFECTIVELY WHICH MAY LEAD TO A LACK OF
REVENUES AND DISCONTINUANCE OF OUR OPERATIONS.
   
    
    we will be able to compete successfully;
 
    
    our competitors will not develop programs that render our programs less
marketable or even obsolete; or
 
    
    we will be able to successfully enhance our programs when necessary.
 THE COST OF COMPLIANCE WITH DISCOUNT MEDICAL PROGRAM ORGANIZATION LAWS AND REGULATIONS MAY
ADVERSELY AFFECT OUR PROFITABILITY.
  THE EFFECT OF THE HEALTH CARE REFORM ON THE INSURANCE INDUSTRY AND OUR INSURANCE MARKETING
DIVISION IS UNCERTAIN.
   15




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IN ADDITION TO THE RECENTLY ENACTED HEALTH CARE REFORM ACT, ADDITIONAL HEALTH CARE REFORM
LEGISLATION CONTINUES TO BE CONSIDERED, THE NATURE AND CONSEQUENCE OF WHICH ARE CURRENTLY
INDETERMINABLE.
  INSURANCE PRODUCTS AND THE SALE OF THOSE PRODUCTS ARE HIGHLY REGULATED AND THE COST OF
COMPLIANCE MAY INCRASE AND LIMIT THE INSURANCE PRODUCTS WE OFFER.
  OUR MEMBERSHIP ASSOCIATIONS MAY BECOME SUBJECT TO INCREASED REGULATION,
THROUGH REGULATORY LICENSING REQUIREMENTS, OR REGULATORY ENFORCEMENT,
RESULTING IN RESTRICTION OF THE MANNER OF DISTRIBUTION AND RESULTING IN
INCREASED REGULATORY COMPLIANCE COSTS AND PENALTIES.
  OUR BUSINESS PRACTICES AND COMPENSATION ARRANGEMENTS WITH INSURANCE COMPANIES AND AGENTS MAY
BE SCRUTINIZED BY GOVERNMENTAL REGULATORS AND SUBJECT TO CONSUMER LITIGATION.
  WE MAY HAVE EXPOSURE AND LIABILITY RELATING TO NON-COMPLIANCE WITH THE HEALTH INSURANCE
PORTABILITY AND ACCOUNTABILITY ACT OF 1996 AND THE COST OF COMPLIANCE
COULD BE MATERIAL.
   16




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OUR FAILURE TO COMPLY WITH FEDERAL AND STATE REGULATION COULD RESULT IN ENFORCEMENT ACTION AND
IMPOSITION OF PENALTIES, MODIFICATION OF OUR OPERATIONS, AND NEGATIVE PUBLICITY.
    
    
    result in enforcement action and imposition of penalty,
 
    
    require modification of our operations or programs,
 
    
    result in negative publicity.
  THE RECORDED GOODWILL ASSOCIATED WITH OUR ACQUISITION OF ACCESS PLANS USA AND OUR
MERGER-ACQUISITION OF BMS HOLDING COMPANY MAY BECOME IMPAIRED AND REQUIRE A SUBSTANTIAL
WRITEDOWN AND THE RECOGNITION OF AN IMPAIRMENT EXPENSE.
  OUR FAILURE TO PROTECT PRIVATE DATA COULD SUBJECT US TO PENALTIES, DAMAGE OUR REPUTATION,
CAUSE US TO BE IN BREACH OF CONTRACTS AND CAUSE US TO EXPEND CAPITAL AND OTHER RESOURCES TO
PROTECT AGAINST FUTURE SECURITY BREACHES.
  WE RELY ON OUR INSURANCE CARRIER PARTNERS AND THIRD PARTIES TO ACCURATELY AND REGULARLY
PREPARE COMMISSION REPORTS, AND IF THESE REPORTS ARE INACCURATE OR NOT SENT TO US IN A TIMELY
MANNER, OUR RESULTS OF OPERATIONS COULD SUFFER.
   17




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OUR REVENUES IN THE RETAIL PLANS DIVISION ARE LARGELY DEPENDENT ON THE INDEPENDENT MARKETING
REPRESENTATIVES, WHOSE REDUCED SALES EFFORTS OR TERMINATION MAY RESULT IN SIGNIFICANT LOSS OF
REVENUES.
   A LARGE PART OF OUR RETAIL PLANS DIVISION REVENUES ARE DEPENDENT ON KEY RELATIONSHIPS WITH A
FEW PRIVATE LABEL RESELLERS AND WE MAY BECOME MORE DEPENDENT ON SALES BY A FEW PRIVATE LABEL
RESELLERS.
  THE FAILURE OF OUR NETWORK MARKETING ORGANIZATION TO COMPLY WITH FEDERAL AND STATE REGULATION
COULD RESULT IN ENFORCEMENT ACTION AND IMPOSITION OF PENALTIES, MODIFICATION OF OUR NETWORK
MARKETING SYSTEM, AND NEGATIVE PUBLICITY.
  
    
    the evolving interpretations of existing laws and regulations, and
 
    
    the enactment of new laws and regulations pertaining in general to
network marketing organizations and product and service distribution.
  18




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
    
    result in enforcement action and imposition of penalty,
 
    
    require modification of the marketing representative network system,
 
    
    result in negative publicity, or
 
    
    have a negative effect on distributor morale and loyalty.
  THE LEGALITY OF OUR NETWORK MARKETING ORGANIZATION IS SUBJECT TO CHALLENGE BY OUR MARKETING
REPRESENTATIVES, WHICH COULD RESULT IN SIGNIFICANT DEFENSE COSTS, SETTLEMENT PAYMENTS OR
JUDGMENTS, AND COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR RESULTS OF OPERATIONS AND FINANCIAL
CONDITION.
  ADVERTISING AND PROMOTIONAL ACTIVITIES OF OUR INDEPENDENT MARKETING REPRESENTATIVES AND
PRIVATE-LABEL CUSTOMERS ARE SUBJECT TO AND MAY VIOLATE FEDERAL AND STATE REGULATION CAUSING US
TO BE SUBJECT TO THE IMPOSITION OF CIVIL PENALTIES, FINES, INJUNCTIONS AND LOSS OF STATE
LICENSES.
  DISRUPTIONS IN OUR OPERATIONS DUE TO OUR RELIANCE ON OUR MANAGEMENT INFORMATION SYSTEM MAY
OCCUR AND COULD ADVERSELY AFFECT OUR CLIENT RELATIONSHIPS.
  THE AVAILABILITY OF OUR INSURANCE PRODUCTS AND FINANCIAL SERVICES ARE DEPENDENT ON OUR
STRATEGIC RELATIONSHIPS WITH VARIOUS INSURANCE COMPANIES AND THE UNAVAILABILITY OF THOSE
PRODUCTS AND SERVICES FOR ANY REASON MAY RESULT IN SIGNIFICANT LOSS OF REVENUES.
   19




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WE ARE DEPENDENT UPON INDEPENDENT INSURANCE AGENCIES AND THEIR AGENTS TO OFFER AND SELL OUR
INSURANCE PRODUCTS AND FINANCIAL SERVICES.
   WE FACE INTENSE COMPETITION IN THE MARKETPLACE FOR OUR PRODUCTS AND SERVICES AS WELL AS
COMPETITION FOR INSURANCE AGENCIES AND THEIR AGENTS FOR THE MARKETING OF THE PRODUCTS AND
SERVICES OFFERED.
    
 ITEM 1B.
    
    UNRESOLVED STAFF COMMENTS.
   20




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ITEM 2.
    
    PROPERTIES
    
 ITEM 3.
    
    LEGAL PROCEEDINGS
  William Andrew Rivell, M.D. and Alan B. Whitehouse, M.D., individually and on behalf of all persons
similarly situated, v. Private Health Care Systems and The Capella Group, Inc.;
 ;
 Zermeno v Precis, Inc.
  21




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ITEM 4
 
 PART II.
 
 ITEM 5.
    
    MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES
  Price Per Common ShareHigh
    
    
    LowYear Ended September 30, 2010:First Quarter ended December 31, 2009
    
    $
    1.18
    
    
    $
    0.75Second Quarter ended March 31, 2010
    
    $
    1.22
    
    
    $
    1.00Third Quarter ended June 30, 2010
    
    $
    1.25
    
    
    $
    0.83Fourth Quarter ended September 30, 2010
    
    $
    0.97
    
    
    $
    0.85Year Ended September 30, 2009:First Quarter ended December 31, 2008
    
    $
    1.05
    
    
    $
    0.30Second Quarter ended March 31, 2009
    
    $
    0.95
    
    
    $
    0.55Third Quarter ended June 30, 2009
    
    $
    0.89
    
    
    $
    0.36Fourth Quarter ended September 30, 2009
    
    $
    1.00
    
    
    $
    0.40
 DIVIDEND POLICY
   ISSUANCE OF UNREGISTERED SECURITIES
   22




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SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
    Number ofSecurities to beissued upon
    
    
    
    
    
    
    Number of securitiesexercise
    
    
    Weighted-average
    
    
    remaining availableof outstanding
    
    
    exercise price of
    
    
    for future issuanceoptions, warrants
    
    
    outstanding options,
    
    
    under equityPlan category
    
    and rights
    
    
    warrants and rights
    
    
    compensation plansEquity compensation plans approved by security holders:2009 Stock Option Plan
    
    
    2,270,111
    
    
    $
    1.11
    
    
    
    279,889Equity compensation plans not approved by security holders:2000 Stock Option Plan
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    2,270,111
    
    
    
    
    
    
    
    279,889
 
 ITEM 6.
    
    SELECTED FINANCIAL DATA.
  
 ITEM 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
 Overview
    23




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
    
    Wholesale Plans Division plan offerings are customized membership marketing plans
primarily offered at rent-to-own retail stores.
 
    
    Retail Plans Division plan offerings are primarily healthcare savings plans. These
plans are not insurance, but allow members access to a variety of healthcare networks to
obtain discounts from usual and customary fees.
 
    
    Insurance Marketing Division markets individual major medical health insurance and
other insurance products through a national network of independent agents.
 
    
    Corporate includes salary and other expenses for individuals performing services for
administration of overall management and operations of the Company. These expenses are not
allocated to our other segments.
 Wholesale Plans
      24




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Retail Plans
      Insurance Marketing
    
    
    e-Agent Center  provides agents with access to real-time rate quoting, on-line
licensing and contracting, insurance application submission, access to brochures
and other marketing materials.
 
    
    Lead Distribution  we utilize an electronic system to connect agents with an
on-line lead ordering and delivery system. Leads are also provided in certain
situations as incentives to sell certain policies.
 
    
    Incentive programs  to assist with agent motivation and recruitment, we
provide paid annual convention trips and periodic sales contests.
  25




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##### Table of Contents




    
    Agent advances  with most of the major medical products we represent, agents
are entitled to from 3 to 9 months of advance commissions either funded by AHCP or
our insurance carrier partner. Our ability to grow this segment will depend, in
part, on our continued access to working capital to fund these advances.
 
    
    Home office support  this includes agent and product training, marketing
materials and agent communication. The training programs include both on-site and
in-house schools, DVDs and webcasts covering product knowledge and sales techniques
as well as market conduct and regulatory compliance issues. In addition, our
support includes development and distribution of a wide variety of marketing
materials including flyers, brochures, email blasts and letters. We also promote
and inform our agents on important news and updates via a weekly newsletter.
  
    
    Continue working with insurance carriers in the development of proprietary
products for our agents to represent;
 
    
    Expand the number of carriers that we represent for more product choice for
customers and expanded geographic representation; and
 
    
    Enhance our e-agent platforms in order to better serve our existing agents and
improve attraction to new agents to sell plans we represent.
    Critical Accounting Policies
 Use of Estimates
   26




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##### Table of Contents



Goodwill and Intangible Assets
  See Note 4 Mergers and
Acquisitions)
   
    
    a significant decrease in the market value of an asset;
 
    
    a significant adverse change in the extent or manner in which an asset is used; or
 
    
    an accumulation of costs significantly in excess of the amount originally expected for
the acquisition of an asset
  Stock Based Compensation
  Income Taxes
    27




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Revenue Recognition
  
    
    persuasive evidence of an arrangement exists;
 
    
    delivery has occurred or services have been rendered;
 
    
    the sellers price to the buyer is fixed or determinable; and
 
    
    collectability is reasonably assured.
    Commission Expense
      28




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Recent Accounting Pronouncements
 Non-controlling Interests in Consolidated Financial Statements
 Intangible- Goodwill and Other
 Subsequent Events.
 Fair Value
Measurements and Disclosures (Topic 820)  Improving Disclosures about Fair Value Measurements
 Recently Issued Accounting Pronouncements Not Yet Adopted
 Receivables
(Topic 310)  Disclosures about the Credit Quality of Financing Receivables and the Allowance for
Credit Losses
 Results of Operations
 Introduction
   29




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For the Years EndedSeptember 30,($ in thousands)
    
    2010
    
    
    2009
    
    
    % ChangeNet revenues
    
    $
    55,349
    
    
    $
    39,081
    
    
    
    42
    %Direct costs
    
    
    39,044
    
    
    
    26,469
    
    
    
    48
    %Operating expenses
    
    
    11,474
    
    
    
    8,324
    
    
    
    38
    %Operating income
    
    
    4,831
    
    
    
    4,288
    
    
    
    13
    %Net other income (expense)
    
    
    (21
    )
    
    
    200
    
    
    
    (111
    %)Income before income taxes
    
    
    4,810
    
    
    
    4,488
    
    
    
    7
    %Income taxes, net
    
    
    1,762
    
    
    
    1,049
    
    
    
    68
    %Net income
    
    $
    3,048
    
    
    $
    3,439
    
    
    
    (11
    %)
  For the Years EndedSeptember 30,($ in thousands)
    
    2010
    
    
    2009
    
    
    % ChangeNet revenues  by segmentWholesale Plans
    
    $
    22,372
    
    
    $
    19,522
    
    
    
    15
    %Retail Plans (a)
    
    
    17,458
    
    
    
    12,838
    
    
    
    36
    %Insurance Marketing
    
    
    20,641
    
    
    
    11,432
    
    
    
    81
    %Corporate
    
    
    
    
    
    
    
    
    
    
    Intercompany Eliminations
    
    
    (5,122
    )
    
    
    (4,711
    )
    
    
    9
    %Total
    
    $
    55,349
    
    
    $
    39,081
    
    
    
    42
    %Gross margin  by segmentWholesale Plans (a)
    
    $
    5,997
    
    
    $
    3,884
    
    
    
    54
    %Retail Plans (a)
    
    
    7,035
    
    
    
    6,710
    
    
    
    5
    %Insurance Marketing
    
    
    3,273
    
    
    
    2,018
    
    
    
    62
    %Corporate
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    16,305
    
    
    $
    12,612
    
    
    
    29
    %Operating income  by segmentWholesale Plans (a)
    
    $
    4,034
    
    
    $
    2,030
    
    
    
    99
    %Retail Plans (a)
    
    
    1,844
    
    
    
    2,734
    
    
    
    (33
    %)Insurance Marketing
    
    
    161
    
    
    
    482
    
    
    
    (67
    %)Corporate
    
    
    (1,208
    )
    
    
    (958
    )
    
    
    (26
    %)Total
    
    $
    4,831
    
    
    $
    4,288
    
    
    
    13
    %
 
 (a)
    
    Gross of intercompany eliminations  30




---



##### Table of Contents



Discussion of Years Ended September 30, 2010 and 2009 Net revenues
 
    
    The acquisition of Access Plans USA on April 1, 2009 which resulted in an increase of
revenue of approximately $12.9 million;
 
    
    Growth in our Wholesale Plans Division of approximately $2.9 million attributable to
additional rent to own locations offering our plans and an increase in member acceptance
rates among our clients; and
 
    
    Growth in our existing Retail Plans Division of approximately $.9 million
attributable to new business beginning in the second quarter 2010 and an existing client
whose membership acceptance rates continue to increase; and
 
    
    Other changes of $(.4) million. See the Segment Analysis below for additional
information.
 Direct costs
 
    
    The acquisition of Access Plans USA on April 1, 2009 which resulted in an increase in
cost of sales of $12.4 million;
 
    
    Our Wholesale Plans Division experienced an increase of $.8 million primarily
attributable to revenue growth due to additional rent to own locations offering our
plans and an increase in member acceptance rates among our clients; and an increase in
product service expenses attributable to increased program membership, increases in the
average number of product that members have eligible for service and a slight increase
in the average cost per incident; and
 
    
    Our existing Retail Plans Division experienced a decrease of $.2 million primarily
attributable to a decrease of compensation expense resulting from the centralization of
operations for our Retail Plans Division during the fiscal 2010 1st quarter
ended December 31, 2009; and
 
    
    Other changes of $(.4) million. See Segment Analysis below for additional
information.
 Operating expenses
 Net other income
 Provision for income taxes net
 Net income
  31




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##### Table of Contents



Wholesale Plans Division
 Selected Operating Metrics
 For the Years Ended September 30,($ in thousands except member data)
    
    2010
    
    
    2009
    
    
    % ChangeResults of operationsNet revenues
    
    $
    22,372
    
    
    $
    19,522
    
    
    
    15
    %Direct costs
    
    
    16,375
    
    
    
    15,638
    
    
    
    5
    %Operating expenses
    
    
    1,963
    
    
    
    1,854
    
    
    
    6
    %Operating income
    
    $
    4,034
    
    
    $
    2,030
    
    
    
    99
    %Percent of revenueNet revenues
    
    
    100
    %
    
    
    100
    %
    
    
    Direct costs
    
    
    73
    %
    
    
    80
    %
    
    
    (7
    %)Operating expenses
    
    
    9
    %
    
    
    9
    %
    
    
    Operating income
    
    
    18
    %
    
    
    10
    %
    
    
    8
    %Member count at September 30,
    
    
    639,034
    
    
    
    547,532
    
    
    
    17
    %
 Net revenues
 Direct costs
 Operating expenses
 Operating income
  32




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##### Table of Contents



Retail Plans Division
 Selected Operating Metrics
 For the Years Ended September 30,($ in thousands except member data)
    
    2010
    
    
    2009
    
    
    % ChangeResults of operationsNet revenues
    
    $
    17,458
    
    
    $
    12,838
    
    
    
    36
    %Direct costs
    
    
    10,423
    
    
    
    6,128
    
    
    
    70
    %Operating expenses
    
    
    5,191
    
    
    
    3,975
    
    
    
    31
    %Operating income
    
    $
    1,844
    
    
    $
    2,735
    
    
    
    (33
    %)Percent of revenueNet revenues
    
    
    100
    %
    
    
    100
    %
    
    
    Direct costs
    
    
    60
    %
    
    
    48
    %
    
    
    12
    %Operating expenses
    
    
    30
    %
    
    
    31
    %
    
    
    (1
    %)Operating income
    
    
    11
    %
    
    
    21
    %
    
    
    (10
    %)Member count at September 30,
    
    
    1,572,880
    
    
    
    1,104,669
    
    
    
    42
    %
 Net revenues
 
    
    The acquisition Access Plans USA Retail Plans operating segment on April 1, 2009
which resulted in an increase of $1.5 million;
 
    
    New contracts beginning during 2010 attributed $2.5 million; and
 
    
    Membership growth for existing contracts of $.7 million.
 Direct costs
 
    
    The acquisition Access Plans USA Retail Plans operating segment on April 1, 2009
which resulted in an increase of $.3 million;
 
    
    New contracts beginning during 2010 attributed $4.2 million; and
 
    
    Our existing Retail Plans Division experienced a decrease of $.2 million
attributable to a decrease of compensation expense resulting from the centralization of
operations during the fiscal 2010 1st quarter ended December 31, 2009.
 Operating expenses
 
    
    The acquisition Access Plans USA Retail Plans operating segment on April 1, 2009
resulting in an increase of $1.1 million;
 
    
    Operating expenses of $.6 million for a new contract beginning during 2010;
 
    
    Operating expenses for our existing Retail Plans operating segment decreased $.5
million due to the centralization of operations during the fiscal 2010 1st
quarter.
 Operating income
  33




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##### Table of Contents



Insurance Marketing Division
 Selected Operating Metrics
 For the Years Ended September 30,($ in thousands except member data)
    
    2010
    
    
    2009
    
    
    % ChangeResults of operationsNet revenues
    
    $
    20,641
    
    
    $
    11,432
    
    
    
    81
    %Direct costs
    
    
    17,368
    
    
    
    9,413
    
    
    
    85
    %Operating expenses
    
    
    3,112
    
    
    
    1,537
    
    
    
    102
    %Operating income
    
    $
    161
    
    
    $
    482
    
    
    
    (67
    %)Percent of revenueNet revenues
    
    
    100
    %
    
    
    100
    %
    
    
    Direct costs
    
    
    84
    %
    
    
    82
    %
    
    
    2
    %Operating expenses
    
    
    15
    %
    
    
    13
    %
    
    
    2
    %Operating income
    
    
    1
    %
    
    
    4
    %
    
    
    (3
    %)Number of in-force policies
    
    
    25,219
    
    
    
    24,016
    
    
    
    5
    %Number of agents at September 30,
    
    
    7,420
    
    
    
    5,872
    
    
    
    26
    %
  Corporate
 Selected Operating Metrics
 For the Years Ended September 30,($ in thousands)
    
    2010
    
    
    2009
    
    
    % ChangeResults of operationsNet revenues
    
    $
    
    
    
    $
    Direct costs
    
    
    
    
    
    
    Operating expenses
    
    
    1,208
    
    
    
    958
    
    
    
    26
    %Operating income
    
    $
    (1,208
    )
    
    $
    (958
    )
    
    
    (26
    %)
  OFF-BALANCE SHEET ARRANGEMENTS
   34




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##### Table of Contents



LIQUIDITY AND CAPITAL RESOURCES
  
    
    Cash increased $1.6 million which was partially a result of growth in net income;
 
    
    Accounts receivable increased $.6 million due to increased revenue for our
Wholesale and Retail Plans Divisions;
 
    
    Notes payable decreased $1.6 million resulting from the retirement of notes payable to
related parties;
 
    
    Other accrued liabilities decreased $.7 million attributable to payments for
legal settlements of $.3 million and other accrued liabilities of $.4 million; and
 
    
    Other increases of $.1 million.
   
    
    A decrease in net income of $.4 million;
 
    
    Receivables increased by $.7 million attributable to revenue growth;
 
    
    An increase in our deferred tax expense, net of $1.3 primarily attributable to a
decrease of the valuation allowance reserve of $.8 million for 2009;
 
    
    An increase in amortization expense of $.4 million due to the amortization of
intangible assets related to the acquisition of Access Plans;
 
    
    A decrease in advanced agent commissions of $.3 million related to the Insurance
Marketing Division;
 
    
    A decrease in unearned commissions of $.8 million also related to the Insurance
Marketing Division;
 
    
    A decrease in waiver reimbursements liabilities and other liabilities of $1.0
million consisting of $.3 million for waiver reimbursements and other accrued
liabilities of $.7 million primarily related to payments for legal settlements of $.3
million;
 
    
    Other increases of $.1 million
  
    
    Restricted cash decreased $.7 million primarily due to the settlement of the States
General legal proceedings on October 27, 2009;
 
    
    Cash received from acquisition decreased $.4 million; and
 
    
    Other decreases of $.1 million.
  35




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##### Table of Contents



Payments Due By PeriodLess than 1
    
    
    1-3
    
    
    3-5
    
    
    More thanContractual obligations
    
    Total
    
    
    year
    
    
    years
    
    
    years
    
    
    5 yearsLong-Term Debt Obligations
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Capital Lease Obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating Lease Obligations
    
    
    497,926
    
    
    
    447,863
    
    
    
    50,063Purchase Obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other Long-Term
Liabilities Reflected on
the Balance Sheet
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    497,926
    
    
    $
    447,863
    
    
    $
    50,063
    
    
    $
    
    
    
    $
    
 IMPACT OF INFLATION
  
 ITEM 7A.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.
  
 ITEM 8.
    
    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  Report of Independent Registered Public Accounting Firm
    
    
    37Consolidated Balance Sheets as of September 30, 2010 and 2009
    
    
    38Consolidated Statements of Operations for the years ended September 30, 2010 and 2009
    
    
    39Consolidated Statements of Stockholders Equity for the years ended September 30, 2010 and 2009
    
    
    40Consolidated Statements of Cash Flows for the years ended September 30, 2010 and 2009
    
    
    41Notes to Consolidated Financial Statements
    
    
    42
 
  36




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
    
  37




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##### Table of Contents



Access Plans, Inc. & Subsidiaries
 
 Consolidated Balance Sheets
 September 30,2010
    
    
    2009AssetsCurrent assets:Cash and cash equivalents
    
    $
    5,380,571
    
    
    $
    4,108,183Restricted cash, current
    
    
    786,871
    
    
    
    470,378Accounts receivable, net
    
    
    4,429,885
    
    
    
    3,789,790Advanced agent commissions, net
    
    
    4,619,814
    
    
    
    5,827,406Deferred income taxes, current
    
    
    1,010,000
    
    
    
    981,000Prepaid expenses
    
    
    69,987
    
    
    
    92,499Total current assets
    
    
    16,297,128
    
    
    
    15,269,679Furniture, fixtures and equipment, net
    
    
    327,560
    
    
    
    385,967Goodwill
    
    
    4,376,339
    
    
    
    4,376,339Intangibles, net
    
    
    3,010,823
    
    
    
    3,975,823Restricted cash, other
    
    
    
    
    
    
    500,000Deferred income taxes, long term
    
    
    736,000
    
    
    
    1,222,000Other assets
    
    
    103,722
    
    
    
    243,677Total assets
    
    $
    24,851,572
    
    
    $
    25,973,485Liabilities and stockholders equityCurrent liabilities:Accounts payable
    
    $
    907,586
    
    
    $
    766,920Accrued salaries and benefits
    
    
    167,055
    
    
    
    247,075Accrued commissions
    
    
    582,729
    
    
    
    641,550Unearned commissions
    
    
    4,571,883
    
    
    
    5,700,347Waiver reimbursements liability
    
    
    846,600
    
    
    
    1,102,900Deferred revenue
    
    
    857,942
    
    
    
    1,023,002Current portion of notes payable to related parties and other notes
    
    
    352,298
    
    
    
    1,647,201Liability for unrecognized tax benefit
    
    
    166,000
    
    
    
    166,000Other accrued liabilities
    
    
    2,185,431
    
    
    
    2,881,866Total current liabilities
    
    
    10,637,524
    
    
    
    14,176,861Long term liabilities:Notes payable to related parties and other notes, net of current portion shown above
    
    
    
    
    
    
    302,744Total liabilities
    
    
    10,637,524
    
    
    
    14,479,605CommitmentsStockholders equity:Common stock, $.001 par value; 100,000,000 shares authorized; 19,877,204 and
21,633,705 shares issued and outstanding at September 30, 2010 and 2009,
respectively
    
    
    19,877
    
    
    
    21,633Additional paid-in-capital
    
    
    11,259,020
    
    
    
    11,584,359Accumulated earnings (deficit)
    
    
    2,935,151
    
    
    
    (112,112
    )Total stockholders equity
    
    
    14,214,048
    
    
    
    11,493,880Total liabilities and stockholders equity
    
    $
    24,851,572
    
    
    $
    25,973,485
 See the accompanying notes to the financial statements.
  38




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##### Table of Contents



Access Plans, Inc. & Subsidiaries
 
 Consolidated Statements of Operations
 Year EndedSeptember 30,2010
    
    
    2009Net revenues
    
    $
    55,349,075
    
    
    $
    39,081,383Direct costs
    
    
    39,044,305
    
    
    
    26,469,014Gross profit
    
    
    16,304,770
    
    
    
    12,612,369Marketing and sales expenses
    
    
    2,249,081
    
    
    
    1,658,887General and administrative expenses
    
    
    8,064,528
    
    
    
    5,820,860Depreciation and amortization expense
    
    
    1,159,691
    
    
    
    844,960Operating income
    
    
    4,831,470
    
    
    
    4,287,662Other income (expense):Other income
    
    
    25,912
    
    
    
    346,775Other expense, net
    
    
    (47,119
    )
    
    
    (146,692
    )(21,207
    )
    
    
    200,083Net income before income taxes
    
    
    4,810,263
    
    
    
    4,487,745Provision for income taxesCurrent
    
    
    1,306,000
    
    
    
    1,879,000Deferred tax (benefit)
    
    
    457,000
    
    
    
    (830,000
    )Total provision for income taxes
    
    
    1,763,000
    
    
    
    1,049,000Net income
    
    $
    3,047,263
    
    
    $
    3,438,745Per share data:Basic income
    
    $
    0.15
    
    
    $
    0.19Diluted income
    
    $
    0.15
    
    
    $
    0.19Basic weighted average shares outstanding
    
    
    19,909,722
    
    
    
    18,242,732Diluted weighted average shares outstanding
    
    
    20,110,572
    
    
    
    18,247,606
 See the accompanying notes to the financial statements.
  39




---



##### Table of Contents



Access Plans, Inc. & Subsidiaries
 
 Consolidated Statements of Stockholders Equity
 Additional
    
    
    Accumulated
    
    
    TotalCommon Stock
    
    
    Paid in
    
    
    Earnings
    
    
    StockholdersShares
    
    
    Amount
    
    
    Capital
    
    
    (Deficit)
    
    
    EquityBalance at October 1, 2008
    
    
    14,796,763
    
    
    $
    14,796
    
    
    $
    6,808,758
    
    
    $
    (3,550,857
    )
    
    $
    3,272,697Correction of outstanding shares
    
    
    36,364
    
    
    
    36
    
    
    
    (36
    )
    
    
    
    
    
    
    Stock issued in business acquisition
    
    
    6,800,578
    
    
    
    6,801
    
    
    
    4,761,700
    
    
    
    
    
    
    
    4,768,501Stock options issued to directors
    
    
    
    
    
    
    
    
    
    
    13,937
    
    
    
    
    
    
    
    13,937Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,438,745
    
    
    
    3,438,745Balance at September 30, 2009
    
    
    21,633,705
    
    
    
    21,633
    
    
    
    11,584,359
    
    
    
    (112,112
    )
    
    
    11,493,880Treasury shares purchased and retired
    
    
    (1,856,501
    )
    
    
    (1,856
    )
    
    
    (498,144
    )
    
    
    
    
    
    
    (500,000
    )Stock options exercised
    
    
    100,000
    
    
    
    100
    
    
    
    82,900
    
    
    
    
    
    
    
    83,000Stock options issued to employees
and directors
    
    
    
    
    
    
    
    
    
    
    89,904
    
    
    
    
    
    
    
    89,904Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,047,263
    
    
    
    3,047,263Rounding
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    1Balance at September 30, 2010
    
    
    19,877,204
    
    
    $
    19,877
    
    
    $
    11,259,020
    
    
    $
    2,935,151
    
    
    $
    14,214,048
 See the accompanying notes to the financial statements.
  40




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##### Table of Contents



Access Plans, Inc. & Subsidiaries
 
 Consolidated Statements of Cash Flows
 Year EndedSeptember 30,2010
    
    
    2009Cash flows from operating activitiesNet income
    
    $
    3,047,263
    
    
    $
    3,438,745Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    1,159,691
    
    
    
    844,960Deferred tax expense (benefit)
    
    
    457,000
    
    
    
    (829,986
    )Stock option expense
    
    
    89,904
    
    
    
    13,937Reduction in related party debt
    
    
    (94,444
    )
    
    
    Amortization of loan discount to interest expense
    
    
    38,643
    
    
    
    154,569Provision for losses on receivables and advanced agent commissions
    
    
    35,310
    
    
    
    118,894Change in operating assets and liabilities, net of acquisition:Receivables
    
    
    (675,412
    )
    
    
    68,896Advanced agent commissions
    
    
    1,207,593
    
    
    
    916,232Prepaid expenses
    
    
    163,119
    
    
    
    77,816Accounts payable
    
    
    140,666
    
    
    
    (592,657
    )Accrued salaries and benefits
    
    
    (80,020
    )
    
    
    85,343Unearned commissions
    
    
    (1,187,284
    )
    
    
    (439,034
    )Deferred revenue
    
    
    (165,059
    )
    
    
    (86,419
    )Claims and other accrued liabilities
    
    
    (952,968
    )
    
    
    39,744Net cash provided by operating activities
    
    
    3,184,002
    
    
    
    3,811,041Cash flows from investing activitiesDecrease (increase) in restricted cash
    
    
    183,507
    
    
    
    (472,186
    )Cash received from acquisition
    
    
    
    
    
    
    450,213Investment in LLC
    
    
    
    
    
    
    (100,000
    )Purchase of equipment
    
    
    (136,275
    )
    
    
    (44,407
    )Net cash provided (used) by investing activities
    
    
    47,232
    
    
    
    (166,380
    )Cash flows from financing activitiesIncrease in short term debt
    
    
    196,421
    
    
    
    Payments on promissory notes  related parties
    
    
    (1,030,348
    )
    
    
    (2,289,663
    )Payment on promissory notes  other
    
    
    (707,919
    )
    
    
    (259,769
    )Purchase of treasury stock
    
    
    (500,000
    )
    
    
    Stock options exercised
    
    
    83,000
    
    
    
    Net cash (used by) financing activities
    
    
    (1,958,846
    )
    
    
    (2,549,432
    )Net increase in cash and cash equivalents
    
    
    1,272,388
    
    
    
    1,095,500Beginning of period
    
    
    4,108,183
    
    
    
    3,012,683End of period
    
    $
    5,380,571
    
    
    $
    4,108,183
 See the accompanying notes to the financial statements.
  41




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##### Table of Contents



ACCESS PLANS, INC. & SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2010 AND 2009
 NOTE 1. DESCRIPTION OF THE BUSINESS
  Mergers and Acquisitions
   NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Basis of Presentation
  Use of Estimates
   42




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##### Table of Contents



ACCESS PLANS, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 Goodwill and Intangible Assets
  See Note 4 Mergers and
Acquisitions, below).
   Stock Based Compensation
  Income Taxes
   43




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##### Table of Contents



ACCESS PLANS, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 Income Taxes
 Revenue Recognition
 Revenue
Recognition, (Corrected Copy)
 
    
    persuasive evidence of an arrangement exists;
 
    
    delivery has occurred or services have been rendered;
 
    
    the sellers price to the buyer is fixed or determinable; and
 
    
    collectability is reasonably assured.
     Accounts Receivable
    44




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##### Table of Contents



ACCESS PLANS, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 Commission Expense
     Advertising Expense
  Cash and Cash Equivalents
  Restricted Cash
  Certain Reclassifications
  Furniture, Fixtures and Equipment
   45




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##### Table of Contents



ACCESS PLANS, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
  Furniture and Fixtures
    
    7-10 yearsLeasehold Improvements
    
    Over the term of the lease, or useful life, whichever is shorterComputers and Office Equipment
    
    3-5 yearsSoftware
    
    3 years
 Earnings per Share
  Recent Accounting Pronouncements
 Non-controlling Interests in Consolidated Financial Statements
 Intangible- Goodwill and Other
 Subsequent Events. ASC 855
  46




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##### Table of Contents



ACCESS PLANS, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 Fair Value
Measurements and Disclosures (Topic 820)  Improving Disclosures about Fair Value Measurements
 Recently Issued Accounting Pronouncements Not Yet Adopted
 Receivables (Topic 310)  Disclosures about the Credit Quality of Financing Receivables and the
Allowance for Credit Losses
 NOTE 3. SUPPLEMENTAL CASH FLOWS INFORMATION
  2010
    
    
    2009Interest
    
    $
    64,571
    
    
    $
    77,025Income taxes paid
    
    $
    1,624,000
    
    
    $
    2,193,086Stock issued in relation to acquisition
    
    $
    
    
    
    $
    4,768,501
 NOTE 4. MERGERS AND ACQUISITIONS
 Access Plans USA Acquisition
    47




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##### Table of Contents



ACCESS PLANS, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 NOTE 4. MERGERS AND ACQUISITIONS (continued)
  Current assets
    
    $
    9,086,216Property and equipment
    
    
    289,000Other assets
    
    
    1,167,699Intangible assets
    
    
    3,000,000Goodwill
    
    
    1,842,186Total assets acquired
    
    
    15,385,101Current liabilities assumed
    
    
    9,887,746Long-term liabilities assumed
    
    
    728,855Total liabilities assumed
    
    
    10,616,601Net assets acquired
    
    $
    4,768,500
  Year EndedSeptember 30,2009Statement of Operations Data:
    
    (Unaudited)Total revenue
    
    $
    32,277,000Operating income (loss)
    
    $
    (547,000
    )Diluted earnings per share
    
    $
    (0.03
    )Weighted-average number of diluted common shares outstanding
    
    
    18,248,000
    48




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ACCESS PLANS, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 NOTE 4. MERGERS AND ACQUISITIONS (continued)
  Useful
    
    
    2010
    
    
    2009Life
    
    
    Gross
    
    
    Accumulated
    
    
    
    
    
    
    Accumulated(Years)
    
    
    Amount
    
    
    Amortization
    
    
    Net
    
    
    Amortization
    
    
    NetAlliance HealthCardCustomer lists
    
    
    5
    
    
    $
    2,500,000
    
    
    $
    (1,791,677
    )
    
    $
    708,323
    
    
    $
    (1,291,677
    )
    
    $
    1,208,323Access Plans USAIn-force books of
business
    
    
    5
    
    
    
    1,200,000
    
    
    
    (360,000
    )
    
    
    840,000
    
    
    
    (120,000
    )
    
    
    1,080,000Agency relationships
    
    
    8
    
    
    
    1,500,000
    
    
    
    (281,250
    )
    
    
    1,218,750
    
    
    
    (93,750
    )
    
    
    1,406,250Proprietary
programs
    
    
    8
    
    
    
    300,000
    
    
    
    (56,250
    )
    
    
    243,750
    
    
    
    (18,750
    )
    
    
    281,250Total
    
    
    
    
    
    $
    5,500,000
    
    
    $
    (2,489,177
    )
    
    $
    3,010,823
    
    
    $
    (1,524,177
    )
    
    $
    3,975,823
   2011
    
    $
    965,0002012
    
    $
    673,0002013
    
    $
    465,0002014
    
    $
    120,0002015
    
    $
    345,000
 Foresight Acquisition
  NOTE 5. NOTES PAYABLE TO RELATED PARTIES
   49




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ACCESS PLANS, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
 NOTE
5. NOTES PAYABLE TO RELATED PARTY (continued)
  NOTE 6. OTHER LONG TERM DEBT
    NOTE 7. FURNITURE AND EQUIPMENT
  2010
    
    
    2009Furniture, fixtures and equipment
    
    $
    425,162
    
    
    $
    390,950Websites
    
    
    33,595
    
    
    
    33,595Software
    
    
    249,696
    
    
    
    158,051Leasehold improvements
    
    
    118,109
    
    
    
    107,686826,562
    
    
    
    690,282Less: accumulated depreciation and amortization
    
    
    (499,002
    )
    
    
    (304,315
    )$
    327,560
    
    
    $
    385,967
   50




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ACCESS PLANS, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
 NOTE 8  ADVANCED AGENT COMMISSIONS
  2010
    
    
    2009Advances funded by:Insurance carriers
    
    $
    4,571,883
    
    
    $
    5,700,347Specialty lending corporation
    
    
    352,298
    
    
    
    863,795Self-funded
    
    
    1,168,572
    
    
    
    835,156Sub-total
    
    
    5,679,524
    
    
    
    7,399,298Allowance for doubtful recoveries
    
    
    (1,472,939
    )
    
    
    (1,571,892
    )Advanced agent commissions, net
    
    $
    4,619,814
    
    
    $
    5,827,406
  NOTE 9  INVESTMENT IN LLC
    NOTE 10  STOCK BASED COMPENSATION
    51




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ACCESS PLANS, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
 NOTE 10. STOCK BASED COMPENSATION (Continued)
 2010
    
    
    2009Estimated volatility
    
    
    81
    %
    
    
    21
    %Dividend yield
    
    
    0
    %
    
    
    0
    %Risk free interest rate
    
    
    1.0
    %
    
    
    1.0
    %Expected lives
    
    4 Years
    
    
    4 Years
  WeightedAverageExercise
    
    
    Options
    
    
    OptionsPrice
    
    
    Outstanding
    
    
    ExercisableBalance at October 1, 2008
    
    
    
    
    
    
    1,518,897
    
    
    
    1,489,730Granted
    
    $
    4.88
    
    
    
    309,536
    
    
    
    274,727Forfeited
    
    $
    1.42
    
    
    
    (226,646
    )
    
    
    (220,355
    )Exercised
    
    $
    
    
    
    
    
    
    
    
    Became exercisable
    
    $
    1.50
    
    
    
    
    
    
    
    18,333Balance at September 30, 2009
    
    
    
    
    
    
    1,601,787
    
    
    
    1,562,435Granted
    
    $
    1.07
    
    
    
    940,000
    
    
    
    Forfeited
    
    $
    4.93
    
    
    
    (171,676
    )
    
    
    (146,514
    )Exercised
    
    $
    0.83
    
    
    
    (100,000
    )
    
    
    (100,000
    )Became exercisable
    
    $
    0.62
    
    
    
    
    
    
    
    212,512Balance, September 30, 2010
    
    
    
    
    
    
    2,270,111
    
    
    
    1,528,433
    Range of exercise price
    
    $
    0.55  $6.86Number outstanding
    
    
    2,270,111Weighted average remaining contractual life
    
    5.4 YearsWeighted average exercise price
    
    $
    1.11
   52




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ACCESS PLANS, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
 NOTE 11. INCOME TAXES
  2010
    
    
    2009Current income tax expenseFederal
    
    $
    1,419,000
    
    
    $
    1,689,000State
    
    
    (113,000
    )
    
    
    190,000Total current income tax expense
    
    
    1,306,000
    
    
    
    1,879,000Deferred income tax (benefit)Federal
    
    
    447,000
    
    
    
    (557,000
    )State
    
    
    10,000
    
    
    
    (275,000
    )Total deferred income tax (benefit)
    
    
    457,000
    
    
    
    (830,000
    )Net income tax expense
    
    $
    1,763,000
    
    
    $
    1,049,000
  Fiscal Year Ended September 30,2010
    
    
    2009Computed tax at federal statutory rate of 34%
    
    $
    1,635,000
    
    
    $
    1,526,000State income taxes
    
    
    61,000
    
    
    
    190,000Tax effect of non deductible amortization of intangible assets
    
    
    178,000
    
    
    
    193,000Tax effect of utilization of NOL
    
    
    (147,000
    )
    
    
    (109,000
    )Change in valuation allowance
    
    
    
    
    
    
    (700,000
    )Non-deductible expenses
    
    
    16,000
    
    
    
    24,000Other
    
    
    20,000
    
    
    
    (75,000
    )Provision for income taxes
    
    $
    1,763,000
    
    
    $
    1,049,000Effective tax rate
    
    
    37
    %
    
    
    23
    %
  53




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ACCESS PLANS, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
 NOTE 11. INCOME TAXES
  Deferred Income Tax Assets
 2010
    
    
    2009CurrentRevenue deferred for financial reporting purposes
    
    $
    257,000
    
    
    $
    309,000Agent advance reserves for financial reporting purposes
    
    
    544,000
    
    
    
    548,000State tax credit
    
    
    100,000
    
    
    
    Other deferred tax assets, current for financial reporting purposes
    
    
    109,000
    
    
    
    124,000Total
    
    
    1,010,000
    
    
    
    981,000Long TermBook depreciation in excess of tax depreciation
    
    
    57,000
    
    
    
    101,000Intangible assets for financial reporting purposes
    
    
    (493,000
    )
    
    
    (644,000
    )Covenant not to compete for financial reporting purposes
    
    
    85,000
    
    
    
    94,000State tax credit
    
    
    
    
    
    
    200,000Other deferred tax assets for financial reporting purposes
    
    
    90,000
    
    
    
    33,000NOL carryover
    
    
    997,000
    
    
    
    1,438,000Total
    
    
    736,000
    
    
    
    1,222,000Total deferred tax assets
    
    
    1,746,000
    
    
    
    2,203,000Less Valuation allowance
    
    
    
    
    
    
    Net Deferred income tax asset at September 30,
    
    $
    1,746,000
    
    
    $
    2,203,000
  Fiscal year ended September 30,2011
    
    $
    76,0002017
    
    
    767,0002018
    
    
    226,0002021
    
    
    167,0002023
    
    
    903,0002025
    
    
    468,0002029
    
    
    326,000$
    2,933,000
  54




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ACCESS PLANS, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
 NOTE 11. INCOME TAXES (Continued)
  Unrecognized tax benefits
    
    $
    141,000Portion that, if recognized, would reduce tax expense and effective tax rate
    
    
    141,000Accrued interest and penalties on unrecognized tax benefits
    
    
    25,000Portion that, if recognized, would reduce tax expense and effective tax rate
    
    
    25,000
  2010
    
    
    2009Beginning balance
    
    $
    166,000
    
    
    $
    166,000Additions for tax positions of the current year
    
    
    
    
    
    
    Ending balance
    
    $
    166,000
    
    
    $
    166,000
     NOTE 12. EARNINGS PER SHARE
  Fiscal Year Ended September 30,2010
    
    
    2009Weighted-average common shares
    
    
    19,909,722
    
    
    
    18,242,732Effect of dilutive securitiesOptions to purchase common stock
    
    
    200,850
    
    
    
    4,874Diluted potential common shares
    
    
    20,110,572
    
    
    
    18,247,606
   55




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ACCESS PLANS, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
 NOTE 13. RELATED PARTY TRANSACTIONS
 Operating Lease
    Year Ending September 30,
    
    Amount2011
    
    $
    97,848
 NOTE 14. OPERATING LEASES
    Year Ending September 30,
    
    Amount2011
    
    $
    350,0152012
    
    
    50,063$
    400,078
 NOTE 15. WAIVER REIMBURSEMENTS LIABILITY
   56




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ACCESS PLANS, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
 NOTE 16. CONCENTRATION OF CREDIT RISK
    NOTE 17. DEFINED CONTRIBUTION PLAN
  NOTE 18  FINANCIAL INSTRUMENTS
 Fair Value
Measurements and Disclosures (Topic 820)  Improving Disclosures about Fair Value Measurements
       57




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ACCESS PLANS, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
 NOTE 19  FINANCIAL INSTRUMENTS (Continued)
  NOTE 20  TREASURY STOCK
  NOTE 21. SELECTED QUARTERLY FINANCIAL DATA (Unaudited)
 First
    
    
    Second
    
    
    Third
    
    
    FourthQuarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter2010Net revenue
    
    $
    13,302,648
    
    
    $
    13,460,566
    
    
    $
    14,370,700
    
    
    $
    14,215,161Gross profit
    
    $
    4,502,940
    
    
    $
    3,999,605
    
    
    $
    4,421,408
    
    
    $
    3,380,817Net income
    
    $
    896,495
    
    
    $
    735,309
    
    
    $
    948,350
    
    
    $
    467,109Diluted net income per share
    
    $
    0.04
    
    
    $
    0.04
    
    
    $
    0.05
    
    
    $
    0.022009Net revenue
    
    $
    5,668,541
    
    
    $
    5,885,623
    
    
    $
    13,959,723
    
    
    $
    13,567,496Gross profit
    
    $
    2,581,128
    
    
    $
    1,998,264
    
    
    $
    4,149,046
    
    
    $
    3,883,931Net income
    
    $
    955,450
    
    
    $
    329,888
    
    
    $
    862,465
    
    
    $
    1,291,578Diluted net income per share
    
    $
    0.06
    
    
    $
    0.02
    
    
    $
    0.04
    
    
    $
    0.07
 NOTE 22. SEGMENT REPORTING
    58




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ACCESS PLANS, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
 NOTE 21. SEGMENT REPORTING (Continued)
  For the Years EndedSeptember 30,($ in thousands)
    
    2010
    
    
    2009
    
    
    % ChangeNet revenues  by segmentWholesale Plans
    
    $
    22,372
    
    
    $
    19,522
    
    
    
    15
    %Retail Plans (a)
    
    
    17,458
    
    
    
    12,838
    
    
    
    36
    %Insurance Marketing
    
    
    20,641
    
    
    
    11,432
    
    
    
    81
    %Corporate
    
    
    
    
    
    
    
    
    
    
    Eliminations
    
    
    (5,122
    )
    
    
    (4,711
    )
    
    
    9
    %Total
    
    $
    55,349
    
    
    $
    39,081
    
    
    
    42
    %Gross margin  by segmentWholesale Plans (a)
    
    $
    5,997
    
    
    $
    3,884
    
    
    
    54
    %Retail Plans (a)
    
    
    7,035
    
    
    
    6,710
    
    
    
    5
    %Insurance Marketing
    
    
    3,273
    
    
    
    2,018
    
    
    
    62
    %Corporate
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    16,305
    
    
    $
    12,612
    
    
    
    29
    %Operating income  by segmentWholesale Plans (a)
    
    $
    4,034
    
    
    $
    2,030
    
    
    
    99
    %Retail Plans (a)
    
    
    1,844
    
    
    
    2,734
    
    
    
    (33
    %)Insurance Marketing
    
    
    161
    
    
    
    482
    
    
    
    (67
    %)Corporate
    
    
    (1,208
    )
    
    
    (958
    )
    
    
    (26
    %)Total
    
    $
    4,831
    
    
    $
    4,288
    
    
    
    13
    %
 For the Years EndedSeptember 30,2010
    
    
    2009Segment assetsWholesale Plans (a)
    
    $
    18,998
    
    
    $
    10,525Retail Plans (a)
    
    
    26,369
    
    
    
    18,889Insurance Marketing
    
    
    8,499
    
    
    
    11,324Corporate
    
    
    (29,014
    )
    
    
    (14,765
    )Total
    
    $
    24,852
    
    
    $
    25,973
 
 a)
    
    Gross of intercompany eliminations  59




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ACCESS PLANS, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
 NOTE 23. OTHER INCOME
  NOTE 24. LEGAL PROCEEDINGS
  William Andrew Rivell, M.D. and Alan B. Whitehouse, M.D., individually and on behalf of all persons
similarly situated, v. Private Health Care Systems and The Capella Group, Inc.;
 ;
 Zermeno v Precis, Inc.
   60




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ITEM 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A
    
    and Item 9A(T). CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures.
   Managements Annual Report on Internal Control Over Financial Reporting
     61




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ITEM 9B.
    
    OTHER INFORMATION
  
 PART III
 
 ITEM 10.
    
    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
 Our Directors and Executive Officers
  Name
    
    
    Age
    
    
    PositionDanny C. Wright
    
    
    59
    
    
    Chairman of the Board of Directors and Chief Executive OfficerBrett Wimberley
    
    
    48
    
    
    Director, President and Chief Financial OfficerRita W. McKeown
    
    
    57
    
    
    Chief Accounting Officer and TreasurerSusan Matthews
    
    
    52
    
    
    President, Wholesale Plans Division (a subsidiary)Bradley W. Denison
    
    
    50
    
    
    Executive Vice President, General Counsel, and SecretaryDavid Huguelet
    
    
    51
    
    
    President, Retail Plans DivisionCharles Harris
    
    
    56
    
    
    President, Insurance Marketing DivisionLarry G. Gerdes(1) (2)
    
    
    61
    
    
    DirectorMark Kidd (1) (2)
    
    
    44
    
    
    DirectorJohn Simonelli (1)
(2) (3)
    
    
    64
    
    
    DirectorRussell Cleveland (2)
(3)
    
    
    72
    
    
    DirectorJ. French Hill (2) (3)
    
    
    54
    
    
    Director
 
 (1)
    
    Member of the Audit Committee(2)
    
    Member of the Stock Option and Compensation Committee(3)
    
    Member of the Nominating and Governance Committee  62




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##### Table of Contents



Danny C. Wright
 Brett Wimberley
 Rita W. McKeown
 Susan Matthews
 Bradley W. Denison
 David Huguelet
 Charles Harris , Jr
  63




---



##### Table of Contents



Larry G. Gerdes
 John Simonelli
 Mark Kidd
 J. French Hill
  64




---



##### Table of Contents



Russell Cleveland
 Committees of the Board of Directors
  Audit Committee
   Members of the Audit Committee:
    
    Larry G. GerdesJohn SimonelliMark R. Kidd
 Stock Option and Compensation Committee
  Members of the Compensation Committee:
    
    Larry G. GerdesJohn SimonelliMark R. KiddJ. French HillRussell Cleveland
 Nominating and Governance Committee
   65




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Members of the Nominating and Corporate Governance Committee:
    
    John SimonelliJ. French HillRussell Cleveland
 Code of Ethics
  
    
    honest and ethical conduct,
 
    
    full, fair, accurate, timely, and understandable disclosure in reports and documents
that we file with, or submit to, the Securities and Exchange Commission and in other
public communications made by us;
 
    
    compliance with applicable governmental laws, rules and regulations;
 
    
    prompt internal reporting of violations of the Code to an appropriate person or persons
identified in the Code; and
 
    
    accountability for adherence to the Code.
 www.accessplans.com
 Compliance with Section 16(a) of the Exchange Act
   66




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ITEM 11.
    
    EXECUTIVE COMPENSATION
  SUMMARY COMPENSATION TABLE
 Option
    
    
    All OtherName and Principle Position
    
    Year
    
    
    Salary
    
    
    Bonus
    
    
    Awards(1)
    
    
    Compensation
    
    
    TotalDanny C. Wright
    
    
    2010
    
    
    $
    252,084
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    252,084Director and Chief Executive
    
    
    2009
    
    
    $
    200,000
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    200,000Officer
    
    
    2008
    
    
    $
    200,000
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    200,000Brett Wimberley
    
    
    2010
    
    
    $
    227,083
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    227,083Director, President
    
    
    2009
    
    
    $
    175,000
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    175,000And Chief Financial Officer
    
    
    2008
    
    
    $
    175,000
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    175,000Bradley W. Denison
    
    
    2010
    
    
    $
    250,000
    
    
    $
    10,400
    
    
    $
    22,135
    
    
    $
    
    
    
    $
    282,535Senior Vice President, General
    
    
    2009
    
    
    $
    250,000
    
    
    $
    10,400
    
    
    $
    
    
    
    $
    
    
    
    $
    260,400Counsel and Secretary
    
    
    2008
    
    
    $
    250,000
    
    
    $
    10,400
    
    
    $
    6,096
    
    
    $
    
    
    
    $
    266,496Rita W. McKeown
    
    
    2010
    
    
    $
    130,000
    
    
    $
    4,425
    
    
    $
    11,067
    
    
    $
    
    
    
    $
    145,492Chief Accounting Officer
    
    
    2009
    
    
    $
    100,671
    
    
    $
    9,000
    
    
    $
    
    
    
    $
    
    
    
    $
    109,671and Treasurer
    
    
    2008
    
    
    $
    94,000
    
    
    $
    5,000
    
    
    $
    
    
    
    $
    
    
    
    $
    99,000Susan Matthews
    
    
    2010
    
    
    $
    175,000
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    175,000President, Wholesale Plans
    
    
    2009
    
    
    $
    175,000
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    175,0002008
    
    
    $
    175,000
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    175,000
 (1)
    
    We used the Black Scholes option-pricing model to estimate the option fair values as
described in Note 2  Summary of Significant Accounting Policies (Stock Based Compensation)
of the financial statements appearing above in this report, to determine the value of the
amounts for Option Awards. Outstanding Equity Awards at Fiscal Year-End
 .
 Outstanding Equity Awards at September 30, 2010
 Stock Option AwardsNumber of Common Stock
    
    
    Option
    
    
    OptionUnderlying Options
    
    
    Exercise
    
    
    ExpirationName
    
    Exercisable
    
    
    Un-exercisable
    
    
    Price(1)
    
    
    DateDanny C. Wright
    
    
    -0-
    
    
    
    -0-
    
    
    $
    -0-
    
    
    N/ABrett Wimberley
    
    
    -0-
    
    
    
    -0-
    
    
    $
    -0-
    
    
    N/ABradley Denison
    
    
    7,500
    
    
    
    -0-
    
    
    $
    1.00
    
    
    May 13, 201850,000
    
    
    
    450,000
    
    
    $
    0.93
    
    
    August 2, 2020Rita McKeown
    
    
    6,000
    
    
    
    -0-
    
    
    $
    1.00
    
    
    October 1, 20104,999
    
    
    
    -0-
    
    
    $
    1.01
    
    
    May 26, 201410,000
    
    
    
    -0-
    
    
    $
    1.15
    
    
    February 15, 201725,000
    
    
    
    25,000
    
    
    $
    0.93
    
    
    August 2, 2020Susan Matthews
    
    
    -0-
    
    
    
    -0-
    
    
    
    -0-
    
    
    N/A
 
 (1)
    
    The closing sale price of our common stock as reported on the OTC Bulletin Board on
September 30, 2010 was $0.90.  67




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##### Table of Contents



Equity Compensation Plans
 Alliance HealthCard, Inc. 2009 Equity Compensation Plan
       
    
    Select the employees to participate in the 2009 Plan;
 
    
    Determine the time or times when incentive awards will be made;
 
    
    Determine the form of an incentive award (stock option, restricted stock award,
performance unit, performance bonus or stock appreciation right), the number of common
stock shares or performance units subject to the incentive award, the amount and all the
terms, conditions (including performance requirements), restrictions and limitations of an
incentive award, including the time and conditions of exercise or vesting, and the terms of
any incentive award agreement;
 
    
    Determine whether incentive awards will be granted singly or in combination;
 
    
    Accelerate the vesting, exercise or payment of an inventive award or the performance
period of an incentive award;
 
    
    Determine extent an incentive award may be deferred, either automatically or at the
election of the participant or the Committee; and
    
    Take any and all other action it deems necessary or advisable for the proper operation
or administration of the Plan.
  68




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##### Table of Contents



Grant of Restricted Stock Awards.
   Grant of Performance Bonus.
 Grant of Stock Appreciation Rights.
  69




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##### Table of Contents



Withholding Taxes.
 Change of Control.
 Employment Arrangements and Keyman Insurance
      Compensation of Directors
   70




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##### Table of Contents




    
    payment of $1,000 for the quarters ended December 31, 2009 and March 31, 2010;
 
    
    payment of $1,750 for the quarter ended June 30, 2010;
 
    
    payment of $2,500 for the quarter ended September 30, 2010;
 
    
    reimbursement for travel and out of pocket expenses in connection with their attendance at
board and committee meetings; and
 
    
    stock options to the non-employee board members, all of which remain outstanding at
September 30, 2010
 Director Name
    
    Options GrantedRussell Cleveland
    
    
    5,000Larry Gerdes
    
    
    10,000J. French Hill
    
    
    5,000Mark Kidd
    
    
    10,000John Simonelli
    
    
    10,000
  Fees Earned or
    
    
    OptionName
    
    Paid in Cash
    
    
    Awards
    
    
    TotalRussell Cleveland
    
    $
    6,250
    
    
    $
    2,213
    
    
    $
    8,463Larry Gerdes
    
    $
    6,250
    
    
    $
    4,807
    
    
    $
    11,057J. French Hill
    
    $
    6,250
    
    
    $
    2,213
    
    
    $
    8,463Mark Kidd
    
    $
    6,250
    
    
    $
    4,807
    
    
    $
    11,057John Simonelli
    
    $
    6,250
    
    
    $
    4,807
    
    
    $
    11,057
 (2)
    
    Access Plans, Inc. used the Black Scholes option-pricing model to estimate the option fair
values as described in Note 2  Summary of Significant Accounting Policies (Stock Based
Compensation) of the financial statements appearing above in this report, to determine the
value of the amounts for Option Awards. Officer and Director Liability and Indemnification
  
    
    One or more of our officers or employees whom the director reasonably believes to be
reliable and competent in the matters presented;
 
    
    Legal counsel, public accountants, investment bankers, or other persons as to matters the
director reasonably believes are within the persons professional or expert competence; or
 
    
    A committee of our Board of Directors of which he is not a member if the director reasonably
believes the committee merits confidence.
   71




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##### Table of Contents



ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
  SharesOwned
    
    
    Rights
    
    
    
    
    
    
    Percent ofName (and Address)
    
    Of
    
    
    To
    
    
    Total
    
    
    Ownershipof Beneficial Owner
    
    Record
    
    
    Acquire (1)
    
    
    Shares (1)
    
    
    (1) (2)Danny Wright (3) (9)
900 36th Avenue, NW
Norman, Oklahoma 73072
    
    
    3,946,900
    
    
    
    -0-
    
    
    
    3,946,900
    
    
    
    19.9
    %Brett Wimberley (4) (9)
900 36th Avenue, NW
Norman, Oklahoma 73072
    
    
    3,918,327
    
    
    
    -0-
    
    
    
    3,918,327
    
    
    
    19.7
    %Susan Matthews (5)
900 36th Avenue, NW
Norman, Oklahoma 73072
    
    
    1,966,000
    
    
    
    -0-
    
    
    
    1,966,000
    
    
    
    9.9
    %RENN Capital (6)
4929 W. Royal Lane, Suite 200
Irving, TX 75063
    
    
    2,254,645
    
    
    
    23,387
    
    
    
    2,278,032
    
    
    
    11.5.0
    %Russell Cleveland (6) (9)
    
    
    2,254,645
    
    
    
    23,387
    
    
    
    2,278,032
    
    
    
    11.5.0
    %Larry G. Gerdes (8)
    
    
    181,165
    
    
    
    155,000
    
    
    
    336,165
    
    
    
    1.7
    %John Simonelli (9)
    
    
    5,000
    
    
    
    95,000
    
    
    
    100,000
    
    
    
    0.5
    %J. French Hill (9)
    
    
    15,000
    
    
    
    31,774
    
    
    
    46,774
    
    
    
    0.2
    %Rita W. McKeown (7)
    
    
    -0-
    
    
    
    76,999
    
    
    
    76,999
    
    
    
    0.4
    %David Huguelet (10)
    
    
    60,920
    
    
    
    104,500
    
    
    
    165,420
    
    
    
    0.8
    %Bradley W. Denison (11)
    
    
    61,500
    
    
    
    507,500
    
    
    
    569,000
    
    
    
    2.9
    %Mark Kidd (9)
    
    
    5,000
    
    
    
    20,000
    
    
    
    25,000
    
    
    
    0.1
    %All directors and officers
as a group of 12 individuals
    
    
    12,414,457
    
    
    
    1,014,160
    
    
    
    13,428,617
    
    
    
    67.6
    %
  72




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##### Table of Contents



(1)
    
    Shares not outstanding but deemed beneficially owned by virtue of the right of a person or
members of a group to acquire them within 60 days are treated as outstanding for determining
the amount and percentage of common stock owned by such person. To our knowledge, each named
person has sole voting and sole investment power with respect to the shares shown except as
noted, subject to community property laws, where applicable.(2)
    
    Rounded to the nearest one-tenth of one percent, based upon 19,877,304 shares of
common stock outstanding at December 1, 2010.(3)
    
    Mr. Wright is our Chairman of Board of Directors and Chief Executive Officer.(4)
    
    Mr. Wimberley is one of our directors and our President and Chief Financial Officer.(5)
    
    Ms. Matthews is President of our subsidiary, Benefit Marketing Solutions, LLC.(6)
    
    The beneficial shares owned are held of record by RENN Global Entrepreneurs Fund, Inc.
(formerly Renaissance Capital Growth & Income Fund III, Inc.) (662,502 shares), Premier RENN
Entrepreneurial Fund Limited (formerly Premier RENN US Emerging Growth Fund Limited) (417,306
shares), Renaissance US Growth Investment Trust PLC (1,174,837 shares), each of which is an
investment fund managed by RENN Capital Group, Inc. Mr. Cleveland controls RENN Capital Group,
Inc. and is also deemed to be the beneficial owner of those common stock shares. Mr.
Cleveland serves as one of our directors.(7)
    
    Ms. McKeown is our Chief Accounting Officer.(8)
    
    The number of shares and the percent includes 166,666 shares held by Gerdes Huff Investments
of which Mr. Gerdes is a general partner and 9,999 shares held by Gerdes Family Partnership of
which Mr. Gerdes is a general partner. Mr. Gerdes serves as one of our directors.(9)
    
    The named individual is one of our directors.(10)
    
    Mr. Huguelet is President, Retail Division.(11)
    
    Mr. Denison is Executive Vice President, General Counsel and Secretary.  
 ITEM 13.
    
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
   73




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Merger-Acquisition of BMS Holding Company
     Director Independence
   74




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##### Table of Contents



ITEM 14.
    
    PRINCIPAL ACCOUNTANT FEES AND SERVICES.
 Audit Fees
  Tax Fees
  
 PART IV
 
 ITEM 15.
    
    EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
  3.1
    
    
    Certificate of Incorporation, incorporated by reference in the Quarterly Report on Form 10-Q filed with the commission on
February 15, 2010.3.2
    
    

Bylaws,
incorporated by reference in the Quarterly Report on Form 10-Q
filed with the commission on February 15, 2010.4.1
    
    
    Common stock certificate, incorporated by reference in the Quarterly Report on Form 10-Q filed with the commission on February 15, 2010.10.1
    
    
    Agreement and Plan of Merger amongst Alliance HealthCard, Inc., AHC-Benefit Marketing
Acquisition, Inc. and BMS Holding Company, Inc, Benefit Marketing Solutions, LLC, Susan
Matthews, Brett Wimberley, Danny C. Wright, dated December 26, 2006, incorporated by reference
to Form 8K filed with the Commission on January 3, 2007.10.2
    
    
    Employment Agreement Danny C. Wright, incorporation by reference to the Form 8K filed with
the Commission on March 6, 2007.10.3
    
    
    Employment Agreement Brett Wimberley, incorporation by reference to the Form 8K filed with
the Commission on March 6, 2007.10.4
    
    
    Employment Agreement Susan Matthews, incorporation by reference to the Form 8K filed with the
Commission on March 6, 2007.10.5
    
    
    Employment Agreement Robert Garces, incorporation by reference to the Form 8K filed with the
Commission on March 6, 2007.10.6
    
    
    Employment Agreement Thomas Kiser, incorporation by reference to the Form 8K filed with the
Commission on March 6, 2007.10.7
    
    
    $2,045,271 Promissory Note of Alliance HealthCard, Inc. dated January 10, 2008, and
issued to Danny C. Wright, incorporation by reference to the Form 8K
filed with the Commission on March 6, 2007.10.8
    
    
    $2,045,271 Promissory Note of Alliance HealthCard, Inc. dated January 10, 2008, and
issued to Brett Wimberley, incorporation by reference to the Form 8K
filed with the Commission on March 6, 2007.10.9
    
    
    $1,022,635 Promissory Note of Alliance HealthCard, Inc. dated January 10, 2008, and
issued to Susan Matthews, incorporation by reference to the Form 8K
filed with the Commission on March 6, 2007.
  75




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##### Table of Contents



10.10
    
    
    Certificate of Merger Agreement with Access Plans USA, Inc., incorporated by reference to
the Form 8K filed with the Commission on November 18, 2008.10.11
    
    
    Rent A Center Agreement between Benefit Marketing Solutions, LLC. Effective March 1, 2007,
incorporated by reference to the Form 10K/A filed with the Commission on October 14, 2009.10.12
    
    
    Amendment to the Employment Agreement Danny C. Wright, dated May 28, 2010.10.13
    
    
    Amendment to the Employment Agreement Brett Wimberley, dated May 28, 2010.10.14
    
    
    Lease Agreement for Summit Building between Onward, L.L.C. and Benefit Marketing Solutions
dated February 1, 2004 and 2010 Addendum to Lease Agreement for Summit Building dated
September 30, 2010.10.15
    
    
    Amendment to the Employment Agreement Susan Matthews, dated October 1, 2010.10.16
    
    
    Independent Brokers Contract, by and between Golden Rule Insurance Company and Americas
Health Care/Rx Plan Agency, Inc. dated January 10, 2006.10.17
    
    

Certificate
of Merger Agreement with Access Plans USA, Inc., final version.31.1
    
    
    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    
    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    
    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.
  76




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SIGNATURES
  Access Plans, Inc.May 31, 2011
    By:
    /s/ Danny WrightDanny WrightChairman and Chief Executive Officer (Principal Executive Officer)May 31, 2011
    By:
    /s/ Brett WimberleyChief Financial Officer(Principal Financial and Accounting Officer)  77