UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549 FORM 10-K (Mark One)x ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2008  ̈         TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 000-25485 PTS, INC.(Exact name of registrant as specified in its charter)Nevada88-0380544(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)3355 Spring Mountain Road, Suite 66
Las Vegas, Nevada89102(Address of principal executive offices)(Zip Code)Issuers telephone number, including area code: (702) 327-7266Securities registered under Section 12(b) of the Exchange Act:NoneSecurities registered under Section 12(g) of the Exchange Act:Common stock, par value $0.00001 per share(Title of Class) Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  ̈ No x  Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes  ̈ No x  Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the last 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x
      No  ̈  Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x  Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  Large accelerated filer
           ̈Accelerated filer                     ̈Non-accelerated filer            ̈Smaller reporting company   x
   Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes   ̈   No x  The aggregate market value of the voting stock held by non-affiliates of the registrant as of April 13, 2009 was approximately $720,861 based upon the closing price of $0.0006 reported for such date on The OTC Bulletin Board.  As of April 13, 2009 the registrant had 1,204,085,295 outstanding shares of Common Stock. Documents incorporated by reference:  None.        2    TABLE OF CONTENTS PART IPageItem 1.Business4Item 1A.Risk Factors12Item 2.Properties15Item 3.Legal Proceedings15Item 4.Submission of Matter to a Vote of Security Matters15PART IIItem 5.Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities15Item 6.Selected Financial Data17Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations17Item 7A.Quantitative and Qualitative Disclosures About Market Risk22Item 8.Financial Statements and Supplementary Data22Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure22Item 9AControls and Procedures22Item 9B.Other Information23PART IIIItem 10.Directors, Executive Officers and Corporate Governance23Item 11.Executive Compensation24Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters25Item 13.Certain Relationships and Related Transactions and Director Independence26Item 14.Principal Accountant Fees and Services27PART IVItem 15.Exhibits, Financial Statement Schedules27Signatures28 3  PART I.  Forward-Looking Information  Much of the discussion in this Item is forward looking as that term is used in Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934.  Actual operations and results may materially differ from present plans and projections due to changes in economic conditions, new business opportunities, changed business conditions, and other developments.  Other factors that could cause results to differ materially are described in our filings with the Securities and Exchange Commission.  There are several factors that could cause actual results or events to differ materially from those anticipated, and include, but are not limited to, general economic, financial and business conditions, changes in and compliance with governmental laws and regulations, including various state and federal environmental regulations, our ability to obtain additional financing from outside investors and/or bank and mezzanine lenders, and our ability to generate sufficient revenues to cover operating losses and position us to achieve positive cash flow.  Readers are cautioned not to place undue reliance on the forward-looking statements contained herein, which speak only as of the date hereof.  We believe the information contained in this Form 10-K to be accurate as of the date hereof.  Changes may occur after that date.   We will not update that information except as required by law in the normal course of its public disclosure practices.  ITEM 1. BUSINESS. Company Overview PTS, Inc. (our, us, we, PTS or the Company) was a company in the development stage since its formation on June 12, 1996 until the second quarter of 2004. At that time, the Company commenced planned operations and began generating revenue. We were originally incorporated in the State of Nevada under the name Med Mark, Inc on November 5, 1996.  On June 29, 1998, we filed articles of amendment changing our name to Elast Technologies, Inc.  Pursuant to a merger agreement entered into on June 11, 2001, PTS, Inc. (PTS), a Nevada corporation, merged with Elast Technologies, Inc.  PTS was the surviving company and changed its name to PTS, Inc.  On November 15, 2005, we acquired 100% of the outstanding common stock of Disability Access Consultants, Inc., (DAC) a California corporation pursuant to a securities exchange agreement.  DAC is a corporation with an extensive history of accessibility compliance consulting. DAC provides consultation to numerous state and local governmental entities and businesses.  DAC has assisted city and county governments, the Federal government, school districts, and other public entities and municipalities. DAC has also assisted retail, commercial, recreational and corporate clients to comply with state and federal accessibility standards.  DAC has developed transition/barrier removal plans, provided consultation and expert witness services.  DAC offers both pro-active services as well as support and assistance for companies that are facing penalties and litigation for being out of compliance. DAC has assisted in litigation and has performed compliance audits for public entities and other businesses. To help companies and public entities meet the requirements of the Americans with Disabilities Act and other accessibility standards, DAC has developed  proprietary software that is a management tool to simplify and streamline the accessibility compliance process. DAC has offices in Nevada, Northern California and Florida.  On October 17, 2006 DAC entered into an Agreement and Plan of Merger (the Agreement of Merger) with Disability Access Corporation f/k/a Power-Save Energy Corp. ("Power-Save") a Delaware corporation. Disability Access Corporation was acquired as a subsidiary of PTS.  The Power-Save acquisition was completed during October, 2006.  The purchase price for Power-Save of $150,000 was paid in September 2006. Since Power-Save had no assets or operations at the date of acquisition, the entire purchase price has been charged to expense during the fourth quarter of 2006. 4  We originally acquired 150,000,000 shares of Disability Access Corporation. We then effected a forward stock split of Disability Access Corporation. There are now 2,437,676,200 common shares outstanding. During December 2006, we distributed 126,189,788 shares of Disability Access Corporation to our stockholders on a pro rata basis. We now own approximately 48% of Disability Access Corporation common stock, but control a majority of voting power.  Under the terms of the Agreement of Merger, DAC was to be merged with and into Disability Access Corporation, with DAC continuing as the surviving corporation.  Upon further consideration, our Board of Directors reconsidered the structure and decided, for various business optimization purposes that, instead of merging DAC with Disability Access Corporation, DAC became a wholly-owned subsidiary of Disability Access Corporation.  On January 11, 2007, DAC executed a Consulting Agreement with a quick service restaurant group (Client).  The Client's name can not be disclosed due to the confidentiality clause in the agreement.  Under the terms of the Consulting Agreement, DAC provides services to the Client including (i) comprehensive and accurate accessibility compliance survey consulting services for selected restaurant locations (ii) consulting and advising Client as an expert witness (iii) report DACs facts, conclusions and findings to Client (iv) inspection services (v) a license to use the DAC Software in accordance with the terms and conditions of the software license agreement(s) which include database relation services.  In consideration of DACs services performed, the Client is expected to generate fees in excess of $5,000,000.  During the quarter ended June 30, 2008, the Company formed a new subsidiary, PTS Group Limited, a Hong Kong, China Company in preparations to acquire or to enter into a joint venture with a Chinese company.  Managements focus is to identify and enter into an agreement with the best possible acquisition candidate for the company and its shareholders.  Current Business Plan  Disability Access Consultants, Inc. (DAC), out of an effort to create a system to facilitate and expedite the processes related to inspections based on the regulatory standards for the American with Disabilities Act (ADA), has developed a proprietary web-centric process which can be used for such purpose.  In addition to its original purpose, the process can also be adapted for other areas of regulatory inspection and requirements.  Though DACs original business is founded on performing ADA inspections, its efforts to automate the inspection process have resulted in an interactive system which can be readily adapted to a wide range of other regulatory required inspection areas such as but not limited to: Building Inspections, Health Inspections, Mine Safety, OSHA, Fire Inspections, etc.   DAC offers a full continuum of accessibility compliance services, software and automated solutions to comply with the requirements for mandated and recommended services for individuals with disabilities in accordance with federal, state and local laws and regulations.  Services are provided to a broad spectrum and growing number of clients as the concept of ADA is Everyones Business integrates into a large network of businesses and public entities.  Included in DACs automated solution for data collection, processing and reporting is compliance with state and federal accessibility regulations and codes.  DAC currently uses DACTrak by our staff to inspect sites and process a compliance report.  DACTrak provides a web based solution for the client to view, interact and manage their compliance data. AcTrak was originally intended to be the intake portion of the software that utilized the labtop tablet.  DACTrak was the automatically generated report and the report management features that utilized the web. Over time, AcTrak has blended into DACTrak and the terms are being used  in a similar capacity and reference. The use of AcTrak was originally designed as a term for using the software on the pc tablet for the actual inspection process.  DACTrak was designed as the data management portion of the software for the clients to update and manage their report.  To avoid confusion, the terms AcTrak and DACTrak were blended or combined to refer to the same software, regardless of their use. The software is now named DACTrak. The term DACTrak will be utilized in this document, as applicable.  5   Business Strategy  Long range business opportunities include potential expansion of current DAC accessibility and ADA compliance products and services into a large market arena that includes other regulatory areas in addition to the ADA.  The business strategy includes regulatory products in addition to the ADA. Our software expansion will be targeted for specific industry standards that may include, but are not limited to: building officials, code enforcement, insurance industry, risk managers, OSHA, insurance carriers, nuclear industry, FEMA, federal government, title insurance, banking and accounting.  The list of potential clients and markets represents a large market potential.  Revenue generation from the various areas of our current and new products will come from: Software licensing, Software training, Online and Telephone support, Data Storage and Client device utilization.DAC currently has insurance carriers, building officials, code enforcement, risk managers, city and county governments, federal government as clients for ADA and state accessibility regulations, the software expansion will target content areas and other needs beyond accessibility for each industry.  We are currently working on products for Fair Housing, of which we estimate we are roughly thirty-five (35%) complete towards a similar product service and system comparable in nature and method to our existing ADA software and services, along with other federal markets.  We expect to complete the software and development of the Fair Housing product in 2009 and further expect release for commercial utilization in the fourth quarter of 2009.  Our Products and Services  Currently our services include onsite facility surveys by our inspectors utilizing DACTrak, review of client policies and procedures for discriminatory practices, consultation, plan reviews, expert witness services and providing training and staff development sessions. Our current principal income is obtained from the use of our services and proprietary software related to accessibility compliance with State and Federal standards.  The new version of DACTrak software has automated the entire inspection process and embraces a new business model, which significantly reduces the inspection and report generation time period, improving productivity by factors in excess of 800%, by using the tools and methodologies as generally outline and described below. Disability Access Corporation has created and is currently testing a do-it-yourself self service, subscription based, fully automated process to be used both internally and marketed to the public. We are currently completing the training manual and training materials for the do-it-yourself self service product.  The product is expected to be ready for customers by summer 2009.  These tools enable end-to-end do-it-yourself subscription based compliance solutions that are focused on large enterprise clients, specifically the federal government and other large corporate and public entities.  In addition, the product is designed to incorporate partnerships with existing competition by enabling them use of the product while safeguarding our knowledgebase and maintaining complete control.  In short, we have automated the entire process from a time-consuming, labor intensive and highly specialized procedure to a simple and fast method requiring minimal training.  DACTrak has improved worker productivity, created faster production delivery and provides enterprise management while drastically reducing labor costs and turn around times. Client access to information is managed and readily available through a web browser.  Inspections and field data are automatically processed and delivered to the client in real time.  The products will be available for large volume jobs such as the US Government.  Program updates will be accomplished through an auto feature and will work globally for all clients.  DACTrak is currently working and producing revenue in the current market. Fees vary due to the type, size, location, and quantity of the inspections to be completed and the timeline requested for completion. The potential market of clients that needs not only data collection, but automated processing of complex data and web based interaction and management is large and represents a significant revenue potential.  Reports were previously distributed by hard copy or on cd.  Reports are now accessed by the client via the web browser.  In selected cases, hard copies of the reports can be mailed or sent via PDF.  6   Competition  There is currently no do-it-yourself automated model electronic processing system available.  Based on our surveys and studies, our competition uses manual processes and rudimentary database lists are the only types of processes used at this time by competitors.  As a result, the surveys are laborious, require extensive training and not comprehensive.  Competitive Advantages  Most of DACs current competitors are architectural firms that perform design work in addition to ADA inspections and services, generally at higher prices than DAC. DAC is aware of some pricing by bid results and phone calls from clients.  What sets DAC apart from the competition is that DAC has developed the software, methodology and experience that exceed the competitions data collection and delivery methods.  DAC has also developed a method to process complex information and has developed a methodology for data management. Most of our competitors use simple database reporting.  Some competitors do not use any databases. DAC is not aware of competitors that have a self service or automated model that processes complex information using an automated process. DAC has provided a technology based delivery of our inspection reports, which is not done by the majority of our competitors. DAC has researched the delivery methods of our competitors. DAC does not provide design services.  DAC also has the competitive advantages of lower cost of services that generates competitive pricing, as well as efficient and speedy report generation.  Our market speed and recognition will continue to develop and provide for a large increase in volume.  DAC has an established diverse client base.  The target market for future DAC clients expands beyond the market for accessibility products and services.  Expanding our currently working and revenue generating software into other markets is now a reality.  There is currently no do-it-yourself automated model electronic processing system available from the competition.  Based on our surveys and studies, manual processes and rudimentary database lists are the only types of processes used at this time by competitors.  As a result, the surveys are laborious, require extensive training and not comprehensive.  · We Are the Developers of Our Technology. For the last 7 years we have been at the forefront in the innovation and design of automating the ADA inspection process.  · We are the Creators of Our Own Technology.  We offer a superior technological solution at a far superior price.  Based upon research and analysis of our competitors, management believes we are the leading company in technology currently providing ADA inspections.  · We Offer a Turn-Key Solution.  DAC offers a complete inspection, evaluation, reporting and data retention process for our ADA customers.  DAC further expects to extend this solution basis to other areas of required regulatory compliance.  Customers  Our new customers are mainly derived from word of mouth from current and previous customers. Particularly as the litigation community as well as the construction contractor community is fairly small, need by these patrons stimulate peer query and we have enjoyed the resulting positive referrals.  Additionally, we obtain new patrons through customer initiated Website searches and from responding to various public Request For Proposals.  A very important component of the Market Strategy is customer retention.  The Companys product is Web based not client based, and as such the customer is compelled to continue with the Companys services for both software updates and data storage, the absence of which renders the customers final reports as static and of limited use in the changing reporting environment, thus effectively once a customer always a customer.  7   Though the product utilization opportunities are vast the larger potential core users are much defined and easily targeted for presentation.  The following sales methodologies will be utilized; 1) direct sales solicitations; 2) target specific industry trade magazines; 3) web based marketing; 4) seminars and trade shows.  Additionally, as the Companys solutions provide for a timely report turnaround at efficient pricing there will be a natural viral consumer marketing solution as various professionals share their solutions (most of the existing customers for DAC have been obtained in this manner); 5) Future Government Contracts.  The federal government is moving its facility requirements to match the current ADA standards, as such both systems and inspections services are expected to be routinely put out for government bid.  From January 1, 2008 through December 31, 2008, the Company has benefited, and continues to benefit from a contract with a large international fast food chain.  During the aforementioned period the Company enjoyed approximately 53% of its gross revenue from this client.  While confidentiality provisions limit reference to the clients name the client is contractually committed to retain DACs services related to approximately 4,000 locations.  The agreement is not exclusive and does not carry a calendar term; however, it is on an as-available basis and, as such, tends to flow seasonally in parallel with construction seasons. DAC charges client an original inspection fee for each client restaurant and a lesser fee for each re-inspection (re-inspections are typical for facilities with significant exceptions noted in previous inspections). In addition to the inspection fee, the client also reimburses for DACs staff travel and expenses.  While this client represented a significant part of DACs revenues in 2008, DAC expects to continue to diversify its client base and as such DAC does not believe it is overly dependent on this client, particularly in light of the continued growing need for ADA inspections, and the expected inclusion of ADA compliance in the current economic stimulus legislation.  As evidence to the absence of dependency, the company has had quarters where the activity from the client was nominal, and the Company filled in the open times with other client work, typically in the areas of public facilities such as schools and universities.  Additionally, there are no material fixed costs associated with the inspections of food chain facilities. Therefore, the absence of work from said client represents opportunity loss rather than the incursion of hard dollar costs or unrecoverable incremental costs.  The recently enacted economic stimulus legislation includes provisions for the construction and/or renovation of a number of government facilities, with collective construction budgets well into the billions.  By existing law these new and/or renovated facilities will be required to follow ADA compliance and accordingly provide additional business opportunities for our company.  Intellectual Property  We regard the protection of copyrights, service marks, trademarks, trade dress and trade secrets as critical to our future success and will rely on a combination of copyright, trademark, service mark and trade secret laws and contractual restrictions to establish and protect our proprietary rights in products and services. Due to the high cost of filing, we have not filed trademark applications for our brand and logos; however as we increase our capital resources, we intend to submit our most recently developed technology applications for various categories of intellectual property protection.  Government Regulation  Compliance with the Americans with Disabilities Act (ADA), federal accessibility standards and state disability laws and regulations applies to business and public entities.  The market is unique in that it is driven by accessibility requirements that are mandated.  Buildings, facilities, venues and programs that are open to the public are required to be accessible for individuals with disabilities. Properties and services that are not accessible may be discriminatory and present a potential liability for property owners.  Purchasing properties that do not meet the required federal and state standards increase exposure to lawsuits and present additional liability for property owners and managers.  ● More than 54 million people (20% of the population) in the United States have a disability 1.  ● The Americans With Disabilities Act (ADA) passed in 1990 2, requires all organizational entities, public or private, with more than 15 employees, to provide equal access for individuals with disabilities.  8   ● There are more than 6.9 million firms in the United States which have more than 20 employees; these businesses have more than 7 million sites at risk 3.  With the adoption of contemporary state and local building codes and with an increasing aging population demanding safe access, the need for accessibility risk management, compliant buildings and accessible programs will continue to intensify. 1 U.S. Census Bureau, December 18, 2008 press release 2 http://www.usdoj.gov/crt/ada/pubs/ada.txt 3 U.S. Census Bureau, 2002 Economic Census  Research and Development  The Company recognized that in order to maximize productivity, expand opportunities, and to grow beyond a specialty inspection business that developing unique information technology solutions was and is key to the long term dynamic growth of the Company.  Accordingly, the Company has committed significant resources to the development of various information processing solutions, with the goal to provide, in addition to professional inspection services, certain technology solutions as licensable products and services.  Though the clients of the company will benefit from the efficiencies gained through our Research and Development, the company will be able to expand and diversify its client base as well as afford an opportunity for business expansion by licensing the resultant developed software. The Company has enjoyed certain successes in this effort and has realized certain anticipated benefits accordingly.  The Company remains committed to continuing its Research and Development efforts with the following business goals and targets:  · Expand service areas, markets and applications beyond our current target market of compliance with accessibility regulations for state and local governments and businesses. · Provide an option for our clients to utilize DACTrak to collect data themselves by licensing DACTrak on our customized pc tablet. · Develop the infrastructure to support growth to other markets and applications. · Provide regulatory agencies and businesses with an automated tool that can be used directly by the agency or business to provide consistent and reliable data collection and analysis of field information and the methodology to manage and update data. · Provide training seminars. · Develop training materials and publications for purchase. · Provide licensing or subscription based use of  DACTrak and the DAC pc tablet.   Employees  Disability Access Corporation currently has three employees and three independent consultants.  Through our subsidiary, Disability Access Consultants, Inc., we have an additional seven full time employees and three independent consultants who serve in administrative positions. Management intends to hire additional employees only as needed and as funds are available.  Barbara Thorpe has extensive experience in accessibility solutions and assisting individuals with disabilities.  She serves as President, and along with her management responsibilities provides the vision to our IT Department to develop and expand the automated inspections systems.  Acquisition Objectives  In addition the DAC business, we also continue to seek, investigate and, if such investigation warrants, acquire an interest in business opportunities presented to us by persons or firms who or which desire to seek the perceived advantages of a corporation which is registered under the Securities Exchange Act of 1934, as amended. We do not restrict our search to any specific business, industry or geographical location and we may participate in a business venture of virtually any kind or nature.  9  We may seek a business opportunity with entities which have recently commenced operations, or which wish to utilize the public marketplace in order to raise additional capital in order to expand into new products or markets, to develop a new product or service or for other corporate purposes.  We may acquire assets and establish wholly owned subsidiaries in various businesses or acquire existing businesses as subsidiaries.  As part of our investigation of potential merger candidates, our officers and directors will meet personally with management and key personnel, may visit and inspect material facilities, obtain independent analysis or verification of certain information provided, check references of management and key personnel and take other reasonable investigative measures, to the extent of our financial resources and management expertise.  The manner in which we participate in an opportunity will depend on the nature of the opportunity, the respective needs and desires of us and other parties, the management of the opportunity, our relative negotiation strength and that of the other management.  We intend to concentrate on identifying preliminary prospective business opportunities that may be brought to our attention through present associations of our officers and directors, or by our shareholders.  In analyzing prospective business opportunities, we will consider such matters as the available technical, financial and managerial resources; Sarbanes-Oxley Act of 2002 compliance; working capital and other financial requirements; history of operations, if any; prospects for the future; nature of present and expected competition; the quality and experience of management services which may be available and the depth of that management; the potential for further research, development or exploration; specific risk factors not now foreseeable but which then may be anticipated to impact our proposed activities; the potential for growth or expansion; the potential for profit; the perceived public recognition or acceptance of products, services or trades; name identification; and other relevant factors.  Our officer and director will meet personally with management and key personnel of the business opportunity as part of our investigation.  We will not acquire or merge with any company for which audited financial statements cannot be obtained within a reasonable period of time after closing of the proposed transaction, as required by the Exchange Act.  We will not restrict our search to any specific kind of firms, but may acquire a venture which is in its preliminary or development stage, which is already in operation, or which is in essentially any stage of its corporate life.  It is impossible to predict at this time the status of any business in which we may become engaged, in that such business may need to seek additional capital, may desire to have its shares publicly traded or may seek other perceived advantages which we may offer.  Other Business Developments  Effective November 8, 2004 we entered into a stock exchange agreement to acquire all of the outstanding stock of Glove BoxTM, Inc. from two parties. In January, 2005 we issued 2,500,000 shares of Series B preferred stock and 7,500,000 shares of Series C preferred stock for all of the outstanding stock of The Glove Box, Inc. The preferred shares have been valued at an aggregate of $100,000. We also assumed net liabilities of $14,739. The Glove Box had no significant assets or operations, but owns the underlying technology to which we hold marketing licenses. As previously disclosed, we intend to continue to develop the technology.  As a result of this acquisition, we now own the underlying Glove Box technology. The Glove BoxTM solves a long standing contamination problem in hospitals and medical offices caused by the normal retrieval and donning of the gloves from a standard glove box. With its patented, free-standing dispenser (looking much like a filing cabinet), users select from three glove sizes, slip their hands through sealed openings into air-filled gloves, then hit a foot switch to release the gloves onto their hands. A significant benefit of the Glove BoxTM is its unique design feature that permits the dispensing of un-powdered gloves that, without the use of the Glove BoxTM, are increasingly the cause of both contamination and communicable health problems. The first prototype was finished during the first quarter of 2004 and the test was successful. On March 10, 2006, Glove BoxTM, Inc., was granted U.S. Patent number 6,953,130 for the Glove BoxTM product.  During the quarter ended June 30, 2008, the Company formed a new subsidiary, PTS Group Limited, a Hong Kong, China Company in preparations to acquire or to enter into a joint venture with a Chinese company.  Managements focus is to identify and enter into an agreement with the best possible acquisition candidate for the company and its shareholders.  10   On June 9, 2008, the Company entered into a Letter of Intent to acquire 51% of ChengDu PuJian Medical Equipment Manufacturing Co, Ltd. (PuJian).  The Company intended to bring in technical support to upgrade PuJian’s current products as well to bring in more range of medical products including GloveBoxTM technologies to PuJian and sell through the well established sales network that PuJian has established in the last several decades. Further, the Company intended to bring addition capital to increase the overall revenue and financial positions of PuJian.  On October 15, 2008, the Company announced its decision to rescind 51% stake proposal in PuJian.  After extensive research, the Companys management consulted with various parties which included legal opinions, accountants and especially a local audit firm. The opinions conclusion was, that due to the nature of PuJians business model, which is to manufacture OEM products specializing in X-ray systems, which generally have low profit margins due to the Chinese government imposing a limit of profit that the manufacturer can make, and the cost to acquire the 51% controlling shares of PuJian, it would not be economically feasible for the Company to pursue this course.  The Company’s new intent is to form a joint venture between Glove Box Inc.TM and PuJian. The purpose of this joint venture is to develop the third generation of the Glove BoxTM. A preliminary research opinion regarding the third generation Glove BoxTM showed that the unit needs to be more compact, for efficiency, and to serve as an “eco-friendly” unit. The Company believes that the joint venture for development of the third generation Glove BoxTM is in the best interest of the shareholders of both companies, and this course will have the additional benefit of eliminating the highly expensive and time-consuming audit requirement of PuJian.  DAC presently is devoting resources to developing alternative commercial uses for its proprietary technology and product development software. Towards this end, the Board of Directors has elected to expand its software customer market base into Asia where certain parties have shown great interest in the Companys proprietary technology. Accordingly, the Company has sent representatives to China to establish the basis for introducing our products and services and has continued discussions with interested parties, to which efforts the Company believes will be productive post the global economic crisis. The Companys Board feels this future expansion opportunity will help maximize growth opportunities as well as yielding enhanced shareholder value for the long term. DAC has certain long term client contract relations, which provides an excellent baseline of annual revenue and continues to expand its client base among public and private entities. DAC has several contracts in the final stage of negotiations, for the current fiscal year, and will inform shareholders when finalized.  In addition, pending Federal government funding and allocation, DAC is a candidate for a very significant services contract to the Federal Government. Further, the Company continues to receive solicitations from both private and state government sectors to make its proprietary software available for licensed use. Management feels strongly that it will be the same within Asia. The potential licensing of the software has been a key long-term business goal of DAC and the demand has been deemed to be large enough to warrant continued and further development of that business opportunity.  The ability of DAC to continue operations is dependent upon its ability to successfully appoint key management and secure additional financing.  Key Personnel Our future financial success depends to a large degree upon the efforts of Mr. Peter Chin, our sole officer and director.  Mr. Chin has played a major role in developing and executing our business strategy.  The loss of Mr. Chin could have an adverse effect on our business and our chances for profitable operations.  While we intend to employ additional management and marketing personnel in order to minimize the critical dependency upon any one person, there can be no assurance that we will be successful in attracting and retaining the persons needed.  If we do not succeed in retaining and motivating our current employees and attracting new high quality employees, our business could be adversely affected.  We do not maintain key man life insurance on the life of Mr. Chin. Our Financial Results May Be Affected by Factors Outside of Our Control Our future operating results may vary significantly from quarter to quarter due to a variety of factors, many of which are outside our control.  Our anticipated expense levels are based, in part, on our estimates of future revenues and may vary from our projections.  We may be unable to adjust spending rapidly enough to compensate for any unexpected revenues shortfall.  Accordingly, any significant shortfall in revenues in relation to our planned expenditures would materially adversely affect our business, operating results, and financial condition. 11   We cannot predict with certainty our revenues and operating results.  Further, we believe that period-to-period comparisons of our operating results are not necessarily a meaningful indication of future performance. Corporate Offices Our executive office is located at 3355 Spring Mountain Road, Suite 66, Las Vegas, Nevada 89102.  For corporate information email investorrelations@ptspi.com.  Employees  During the fiscal year ended December 31, 2008, PTS had three employees and three consultants.  Through our subsidiaries, we have an additional three full time employees who serve in administrative positions and seven full time employees serving in staff positions. Management intends to hire additional employees only as needed and as funds are available. In such cases, compensation to management and employees will be considered with prevailing wages for services rendered.   ITEM 1A. RISK FACTORS. An investment in our common stock involves a high degree of risk. Investors should carefully consider the risks described below before deciding to purchase shares of our common stock. If any of the events, contingencies, circumstances or conditions described in the risks below actually occurs, our business, financial condition or results of operations could be seriously harmed. Need for ongoing financing. We will need additional capital to continue our operations and will endeavor to raise funds through the sale of equity shares and revenues from operations. There can be no assurance that we will continue to generate revenues from operations or obtain sufficient capital on acceptable terms, if at all.  Failure to obtain such capital or generate such operating revenues would have an adverse impact on our financial position and results of operations and ability to continue as a going concern.  Our operating and capital requirements during the next fiscal year and thereafter will vary based on a number of factors, including the level of sales and marketing activities for our services and products.  There can be no assurance that additional private or public finances, including debt or equity financing, will be available as needed or, if available, on terms favorable to us.  Any additional equity financing may be dilutive to stockholders and such additional equity securities may have rights, preferences or privileges that are senior to those of our existing common stock. Furthermore, debt financing, if available, will require payment of interest and may involve restrictive covenants that could impose limitations on our operating flexibility.  Our failure to successfully obtain additional future funding may jeopardize our ability to continue our business and operations. If we raise additional funds by issuing equity securities, existing stockholders may experience a dilution in their ownership.  In addition, as a condition to giving additional funds to us, future investors may demand, and may be granted, rights superior to those of existing stockholders. 12   Business concentrations. Credit risk:  Financial instruments, which potentially subject us to concentrations of credit risk, consist of cash and accounts receivable. We place our cash with high quality financial institutions and, at times, balances may exceed the FDIC $250,000 insurance limit. We extend credit based on an evaluation of a customer's financial condition, generally without collateral. Exposure to losses on accounts receivable is principally dependent on each customer's financial condition. We monitor our exposure for credit losses and maintain allowances for anticipated losses, if required.  Customers:  During 2008, one customer accounted for 53% of our revenue. During 2007, one customer accounted for a total of 44% of our revenue. No other customer accounted for more than 10% of revenue during 2008 and 2007.  At December 31, 2008, three customers accounted for a total of 89% of our accounts receivable. No other customer accounted for more than 10% of our accounts receivable at December 31, 2008.  Inflation. In our opinion, inflation has not had a material effect on our financial condition or results of our operations. Trends, risks and uncertainties. We have sought to identify what we believe to be the most significant risks to our business, but we cannot predict whether, or to what extent, any of such risks may be realized nor can we guarantee that we have identified all possible risks that might arise.  Investors should carefully consider all of such risk factors before making an investment decision with respect to our common stock. Cautionary factors that may affect future results. We provide the following cautionary discussion of risks, uncertainties and possible inaccurate assumptions relevant to our business and our products.  These are factors that we think could cause our actual results to differ materially from expected results.  Other factors besides those listed here could adversely affect us. Potential fluctuations in annual operating results. Our annual operating results may fluctuate significantly in the future as a result of a variety of factors, most of which are outside our control, including the demand for our services, seasonal trends in purchasing, the amount and timing of capital expenditures; price competition or pricing changes in the industry; technical difficulties or system downtime; general economic conditions, and economic conditions specific to our industry.  Our annual results may also be significantly impacted by the impact of the accounting treatment of acquisitions, financing transactions or other matters.  Due to the foregoing factors, among others, it is likely that our operating results will fall below our expectations or those of investors in some future years. Lack of independent directors. We cannot guarantee that our board of directors will have a majority of independent directors in the future.  In the absence of a majority of independent directors, our executive officers, could establish policies and enter into transactions without independent review and approval thereof.  This could present the potential for a conflict of interest between us and our stockholders generally and the controlling officers, stockholders or directors. 13   Limitation of liability and indemnification of officers and directors. Our officer and directors are required to exercise good faith and high integrity in our management affairs.  Our articles of incorporation provide, however, that our officer and directors shall have no liability to our stockholders for losses sustained or liabilities incurred which arise from any transaction in their respective managerial capacities unless they violated their duty of loyalty, did not act in good faith, engaged in intentional misconduct or knowingly violated the law, approved an improper dividend or stock repurchase, or derived an improper benefit from the transaction.  Our articles and bylaws also provide for the indemnification by us of the officer and directors against any losses or liabilities they may incur as a result of the manner in which they operate our business or conduct the internal affairs, provided that in connection with these activities they act in good faith and in a manner that they reasonably believe to be in, or not opposed to, our best interests, and their conduct does not constitute gross negligence, misconduct or breach of fiduciary obligations. Management of potential growth. We may experience rapid growth which will place a significant strain on our managerial, operational, and financial systems resources.  To accommodate our current size and manage growth, we must continue to implement and improve our financial strength and our operational systems, and expand, train and manage our sales and distribution base.  There is no guarantee that we will be able to effectively manage the expansion of our operations, or that our facilities, systems, procedures or controls will be adequate to support our expanded operations.  Our inability to effectively manage our future growth would have a material adverse effect on us. We pay no cash dividends. We have never declared nor paid cash dividends on our capital stock.  We currently intend to retain any earnings for funding growth; however, these plans may change depending upon capital raising requirements. We believe that we do not have any material exposure to interest or commodity risks.  Our financial results are quantified in U.S. dollars and our obligations and expenditures with respect to our operations are incurred in U.S. dollars.  Although we do not believe we currently have any materially significant market risks relating to our operations resulting from foreign exchange rates, if we enter into financing or other business arrangements denominated in currency other than the U.S. dollars, variations in the exchange rate may give rise to foreign exchange gains or losses that may be significant. We do not use financial instruments for trading purposes and we are not a party to any leveraged derivatives. Risks Relating to Our Business We are subject to the requirements of section 404 of the Sarbanes-Oxley Act. If we are unable to timely comply with section 404 or if the costs related to compliance are significant, our profitability, stock price and result of operations and financial condition could be materially adversely affected. We are required to comply with the provisions of Section 404 of the Sarbanes-Oxley Act of 2002, which require us to maintain an ongoing evaluation and integration of the internal controls of our business. We were required to document and test our internal controls and certify that we are responsible for maintaining an adequate system of internal control procedures for the year ended December 31, 2008. In subsequent years, our independent registered public accounting firm will be required to opine on those internal controls and managements assessment of those controls. In the process, we may identify areas requiring improvement, and we may have to design enhanced processes and controls to address issues identified through this review. 14  We cannot be certain that we will be able to successfully complete the procedures, certification and attestation requirements of Section 404 or that our auditors will not have to report a material weakness in connection with the presentation of our financial statements. If we fail to comply with the requirements of Section 404 or if our auditors report such material weakness, the accuracy and timeliness of the filing of our annual report may be materially adversely affected and could cause investors to lose confidence in our reported financial information, which could have a negative affect on the trading price of our common stock. In addition, a material weakness in the effectiveness of our internal controls over financial reporting could result in an increased chance of fraud and the loss of customers, reduce our ability to obtain financing and require additional expenditures to comply with these requirements, each of which could have a material adverse effect on our business, results of operations and financial condition. Furthermore, we believe that the out-of-pocket costs, the diversion of managements attention from running the day-to-day operations and operational changes caused by the need to comply with the requirements of Section 404 of the Sarbanes-Oxley Act could be significant. If the time and costs associated with such compliance exceed our current expectations, our results of operations could be adversely affected. We are not likely to succeed unless we can overcome the many obstacles we face. Investors should be aware of the difficulties, delays and expenses we encounter, many of which are beyond our control, including unanticipated market trends, employment costs, and administrative expenses.  We cannot assure our investors that our proposed business plans as described in this report will materialize or prove successful, or that we will ever be able to finalize development of our products or services or operate profitably.  If we cannot operate profitably, you could lose your entire investment.  As a result of the nature of our business, initially we expect to sustain substantial operating expenses without generating significant revenues. Our acquisition strategy involves a number of risks. We intend to pursue growth through the opportunistic acquisition of companies or assets that will enable us to expand our service lines to provide more cost-effective customer solutions.  We routinely review potential acquisitions.  This strategy involves certain risks, including difficulties in the integration of operations and systems, the diversion of our managements attention from other business concerns, and the potential loss of key employees of acquired companies.  We may not be able to successfully acquire, and/or integrate acquired businesses into our operations. ITEM 2. PROPERTIES.  The Company owns no real property.  We lease office space at 3355 Spring Mountain Road, Suite 66, Las Vegas, Nevada 89102, on a month-to-month basis at a rate of US $375.00 per month. Management believes that its facilities are adequate for its present business.  ITEM 3. LEGAL PROCEEDINGS. None.  ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. None PART II.  ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. The Companys Common Stock is traded on the OTCBB (Over-The-Counter Bulletin Board) under the symbol PTSH. The following table sets forth the trading history of the Common Stock on the Bulletin Board for each quarter of the years ended December 31, 2008 and 2007, as reported by Dow Jones Interactive. The quotations reflect inter-dealer prices without retail mark-up, markdown or commission and may not represent actual transactions.  15   Calendar Year 2007HighLowFirst Quarter
Second Quarter
Third Quarter
Fourth Quarter0.005
0.003
0.001
0.0010.005
0.002
0.001
0.001Calendar Year 2008HighLowFirst Quarter
Second Quarter
Third Quarter
Fourth Quarter0.002
0.002
0.001
0.00090.002
0.002
0.001
0.0007  As of April 13, 2009, we had 1,204,085,295 shares of our common stock outstanding.  Our shares of common stock are held by approximately 284 stockholders of record.  The number of record holders was determined from the records of our transfer agent and does not include beneficial owners of common stock whose shares are held in the names of various security brokers, dealers, and registered clearing agencies. Section 15(g) of the Exchange Act The shares of our common stock are covered by Section 15(g) of the Exchange Act, and Rules 15g-1 through 15g-6 promulgated thereunder, which impose additional sales practice requirements on broker-dealers who sell our securities to persons other than established customers and accredited investors. Rule 15g-2 declares unlawful any broker-dealer transactions in penny stocks unless the broker-dealer has first provided to the customer a standardized disclosure document. Rule 15g-3 provides that it is unlawful for a broker-dealer to engage in a penny stock transaction unless the broker-dealer first discloses and subsequently confirms to the customer the current quotation prices or similar market information concerning the penny stock in question. Rule 15g-4 prohibits broker-dealers from completing penny stock transactions for a customer unless the broker-dealer first discloses to the customer the amount of compensation or other remuneration received as a result of the penny stock transaction. Rule 15g-5 requires that a broker-dealer executing a penny stock transaction, other than one exempt under Rule 15g-1, disclose to its customer, at the time of or prior to the transaction, information about the sales persons compensation. Our common stock may be subject to the foregoing rules.  The application of the penny stock rules may affect our stockholders ability to sell their shares because some broker-dealers may not be willing to make a market in our common stock because of the burdens imposed upon them by the penny stock rules. The following table provides information about purchases by us and our affiliated purchasers during the year ended December 31, 2008 of equity securities that are registered by us pursuant to Section 12 of the Securities Exchange Act of 1934: 16   Small Business Issuer Purchases of Equity Securities(a)(b)(c)(d)PeriodTotal number of shares (or units) purchasedAverage price
paid per
share (or unit)Total number of shares (or units) purchased as part of publicly announced plans or programsMaximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programsJanuary 1, 2008  December 31, 2008-0--0--0--0-Total-0--0--0--0-  ITEM 6. SELECTED FINANCIAL DATA. Not Applicable.   ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The following discussion should be read in conjunction with other sections of this Form 10-K including Part 1, Item 1: Business and Part II, Item 8: Financial Statements and Supplementary Data.  Various sections of managements discussion and analysis (MD&A) contains statements that are forward-looking. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially due to factors discussed in this report, as well as factors not within our control. We undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in our expectations. Our MD&A is provided as a supplement to our audited financial statements to help provide an understanding of our financial condition, changes in financial condition and results of operations. The MD&A section is organized as follows: · Overview. This section provides a general description of the Company's business, as well as recent developments that we believe are important in understanding our results of operations as well as anticipating future trends in our operations. · Critical Accounting Policies. This section provides an analysis of the significant estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosure of contingent assets and liabilities. · Results of Operations. This section provides an analysis of our results of operations for the year ended December 31, 2008 compared to the year ended December 31, 2007.  A brief description of certain aspects, transactions and events is provided. · Liquidity and Capital Resources. This section provides an analysis of our financial condition and cash flows as of and for the year ended December 31, 2008. Overview  PTS, Inc. (our, us, we, PTS or the Company) was a company in the development stage since its formation on June 12, 1996 until the second quarter of 2004. At that time the Company commenced planned operations and began generating revenue. We were originally incorporated in the State of Nevada under the name Med Mark, Inc on November 5, 1996.  On June 29, 1998, we filed articles of amendment changing our name to Elast Technologies, Inc.  Pursuant to a merger agreement entered into on June 11, 2001, PTS, Inc. (PTS), a Nevada corporation, merged with Elast Technologies, Inc.  PTS was the surviving company and changed its name to PTS, Inc. 17  On November 15, 2005, we acquired 100% of the outstanding common stock of Disability Access Consultants, Inc., (DAC) a California corporation pursuant to a securities exchange agreement. Disability Access Consultants, Inc. (DAC), out of an effort to create a system to facilitate and expedite the processes related to inspections based on the regulatory standards for the American with Disabilities Act (ADA), has developed a proprietary web-centric process which can be used for such purpose.  In addition to its original purpose, the process can also be adapted for other areas of regulatory inspection and requirements.  Though DACs original business is founded on performing ADA inspections, its efforts to automate the inspection process have resulted in an interactive system which can be readily adapted to a wide range of other regulatory required inspection areas such as but not limited to: Building Inspections, Health Inspections, Mine Safety, OSHA, Fire Inspections, etc.  DAC offers a full continuum of accessibility compliance services, software and automated solutions to comply with the requirements for mandated and recommended services for individuals with disabilities in accordance with federal, state and local laws and regulations.  Services are provided to a broad spectrum and growing number of clients as the concept of ADA is Everyones Business integrates into a large network of businesses and public entities.  Included in DACs automated solution for data collection, processing and reporting is compliance with state and federal accessibility regulations and codes.  DAC currently uses DACTrak by our staff to inspect sites and process a compliance report.  DACTrak provides a web based solution for the client to view, interact and manage their compliance data. AcTrak was originally intended to be the intake portion of the software that utilized the labtop tablet.  DACTrak was the automatically generated report and the report management features that utilized the web. Over time, AcTrak has blended into DACTrak and the terms are being used  in a similar capacity and reference. The use of AcTrak was originally designed as a term for using the software on the pc tablet for the actual inspection process.  DACTrak was designed as the data management portion of the software for the clients to update and manage their report.  To avoid confusion, the terms AcTrak and DACTrak were blended or combined to refer to the same software, regardless of their use. The software is now named DACTrak. The term DACTrak will be utilized in this document, as applicable.  Critical Accounting Policies.  The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect our reported assets, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities.  We base our estimates and judgments on historical experience and on various other assumptions we believe to be reasonable under the circumstances.  Future events, however, may differ markedly from our current expectations and assumptions.  While there are a number of significant accounting policies affecting our consolidated financial statements, we believe the following critical accounting policies involve the most complex, difficult and subjective estimates and judgments.  Revenue Recognition  DAC generates revenue from services regarding compliance with state, federal and local accessibility codes.  Services include inspections of facilities, production of accessibility reports, consultation, expert witness services, and review of policies and procedures of the client. In all cases, revenue is recognized as earned by the Company.  Though contracts may vary between a progress-basis and completed project basis, as the client becomes liable to the Company for services provided, as defined in the agreement, the client is then invoiced and revenue is accordingly recognized and recorded.  The Company does not recognize or record any revenues for which it does not have a legal basis for invoicing or legally collecting. For progress-basis contracts, the Company invoices the client when it has completed the specified portion of the agreement, there by, ensuring the client is legally liable to the Company for payment of the invoice. On progress-basis contracts, revenue is not recognized until this criteria is met. Approximately 20% of the revenue generated in 2008 came from progress-based agreements.  The Company generally seeks progress-based agreements when the length of engagement will exceed two months and the size of contract exceeds $25,000.  18  Software Development Costs Costs incurred internally in creating a computer software product are charged to expense when incurred as research and development until technological feasibility has been established for the product. Technological feasibility is established upon completion of a detail program design or, in its absence, completion of a working model. Thereafter, all software production costs are capitalized and subsequently reported at the lower of unamortized cost or net realizable value. Capitalized costs are amortized based on current and future revenue for each product with an annual minimum equal to the straight-line amortization over the remaining estimated economic life of the product. Stock-Based Compensation  On January 1, 2006, we adopted the fair value recognition provisions of SFAS No. 123(R), Accounting for Stock-Based Compensation, to account for compensation costs under our stock option plans.  We use the fair value method for equity instruments granted to non-employees and will use the Black Scholes model for measuring the fair value of options, if issued.  The stock based fair value compensation is determined as of the date of the grant or the date at which the performance of the services is completed (measurement date) and is recognized over the vesting periods. We did not grant any option awards during 2008 or 2007.  Research and Development  We expense software development costs up until the attainment of technological feasibility of our software products. During the year ended December 31, 2008, we have capitalized $236,135 of costs related to the development of software products which have achieved technological feasibility. No costs were capitalized during 2007. In 2006, DAC expended funds on their tablet software, reaching technical feasibility in January 2007. In 2007, DAC internally utilized the software on its existing clients testing software. In 2008, DAC decided to expand the initial product to be marketed to external users. During 2007 while the staff was using the new software various new solutions, logic pathways, end user functionalities were identified, as these were identified through the course of other normal recurring work specific charges were not recorded as Research and Development and would have been immaterial if those costs had been separately tracked.  The aforementioned solutions and functionalities became the foundation for the product development capitalized in 2008.  Potential Derivative Instruments  We periodically assess our financial and equity instruments to determine if they require derivative accounting. Instruments which may potentially require derivative accounting are conversion features of debt and common stock equivalents in excess of available authorized common shares.  We have determined that the conversion features of our debt instruments are not derivative instruments because they are not readily convertible to cash based on our historical trading volume.  We have determined that common stock equivalents in excess of available authorized common shares are not derivative instruments due to the fact that an increase in authorized shares is within our control because our chief executive officer, Peter Chin, and his spouse control over 50% of our voting power.  Intangible and Long-Lived Assets  We follow SFAS No. 144, Accounting for Impairment of Disposal of Long-Lived Assets , which established a primary asset approach to determine the cash flow estimation period for a group of assets and liabilities that represents the unit of accounting for a long lived asset to be held and used.  Long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset.  Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell.  19    Goodwill is accounted for in accordance with SFAS No. 142,"Goodwill and Other Intangible Assets".We assess the impairment of long-lived assets, including goodwill and intangibles on an annual basis or whenever events or changes in circumstances indicate that the fair value is less than its carrying value. Factors that we consider important which could trigger an impairment review include poor economic performance relative to historical or projected future operating results, significant negative industry, economic or company specific trends, changes in the manner of our use of the assets or the plans for our business, market price of our common stock, and loss of key personnel.  We have determined that there was no impairment of goodwill during 2008 or 2007.  Results of Operations.   Year Ended December 31, 2008 compared to the Year Ended December 31, 2007. Revenue Total revenue was $1,417,724 for the year ended December 31, 2008 compared to $1,452,879 during the year ended December 31, 2007, a decrease of $35,155, or 2%. The decrease in revenues was due to a reduction in completed inspections that occurred during the fourth quarter of 2008. Additionally, the Company had initiated a fairly large project which consumed staff time in the fourth quarter, but due to the revenue recognition policies of the Company, the revenue was not recorded until after completion, which was in the first quarter of 2009. As ADA litigation continues to increase across the United States, and the Federal Government continues to tie Federal funding to requiring ADA compliance the Company expects to see both continued growth and demand for its range of products and services.  Cost of Revenue Cost of revenue for the year ended December 31, 2008 increased by $41,048, or 27%, to $609,476 for the year ended December 31, 2008 from $568,428 for the year ended December 31, 2007. The components of cost of revenue are compensation costs of inspection staff and travel expense. Compensation costs of inspection staff increased by $33,044 and travel expense increased by $8,004 during 2008. The increased compensation results from fixed payroll costs which are not significantly affected by short term increases or decreases in inspections. Selling Expenses Selling expenses for the year ended December 31, 2008 increased by $16,135, or 27%, to $84,501 for the year ended December 31, 2008 from $68,366 for the year ended December 31, 2007. Selling expenses consist primarily of compensation costs. The increase results from additional personnel assigned to the sales function. General and Administrative Expenses Total general and administrative expenses for the year ended December 31, 2008 decreased by $590,437, or 36%, to $1,050,554 for the year ended December 31, 2008 from $1,640,991 for the year ended December 31, 2007. The primary components of our general and administrative expenses are compensation costs not associated with cost of revenues or the sales process, consulting fees, professional fees, travel and entertainment, rent and depreciation. The decrease in general and administrative expenses resulted primarily from decreases in compensation costs of approximately $392,000 (including a decrease of $356,000 in stock based compensation) consulting fees of approximately $106,000, rent expense of approximately $38,000 and bad debt expense of approximately $46,000. We do not expect G&A expenses to increase substantially in the coming 12 months.  We intend to focus on operating efficiencies, increasing revenues, and attaining profitability during this period. As our core support infrastructure is now in place we expect that increases in revenue will enjoy significant high margin profitability, particularly as our staff expansions will be in revenue generation and not support staff, (for example should the Company need to significantly expand the inspection staff, there will not be a need to expand administrative support nor management for that staffing, accordingly higher margins will be obtained).  20  Interest Expense, Income Allocated to Minority Interest, Finance Costs, Loss on Extinguishment of Debt and Fair Value of Derivative Liability (Other income/expense)  Other income/expense and finance cost for the year ended December 31, 2008 was a net expense of $494,667 as compared to $374,574 for the year ended December 31, 2007. The increase results primarily from a noncash loss on extinguishment of debt of $224,109, compared to a gain in 2007 of $58,921, and an increase in income allocated to minority interest of $42,402, partially offset by a decrease in the noncash charge for the change in fair value of our derivative liability of $144,619 and a decrease in the noncash charge for finance cost of $49,904. Total noncash expense was $412,170 and $280,451 for 2008 and 2007, respectively.  Net Loss  We reported net loss of $821,474 during the year ended December 31, 2008 as compared with a loss of $1,199,480 for the year ended December 31, 2007. The decrease results from the various increases and decreases described above.  Liquidity and Capital Resources.  As of December 31, 2008, we had a deficiency in working capital of $1,319,378. Cash provided by operations was $167,594 during the year ended December 31, 2008. A loss of $821,474 was offset by a decrease in accounts receivable of $140,709, an increase in accounts payable of $306,300, and by non-cash charges of $56,703 of depreciation and amortization, $100,700 in stock based expense, $32,646 in financing expense, $224,109 of loss attributable to extinguishment of debt and a charge of $108,572 related to the change in fair value of our derivative liability.  Net cash used in investing activities totaled $278,650 for the year ended December 31, 2008, primarily expended on software development. Cash provided by financing activities for the year ended December 31, 2008 was $85,180. Cash proceeds from stock sold were $57,547. The Company expects to incur substantial additional costs related to ongoing development activities. Our future cash requirements will depend on many factors, including continued progress in our sales and development program, and the cost of product commercialization. Accordingly, we may require external financing to sustain our operations if we cannot continue to achieve a positive cash flow. Success in our future operations are subject to a number of technical and business risks, including our continued ability to obtain future funding and market acceptance for our services as further described above under Item 1 Risk Factors.  In order to execute our business plan, we will need to acquire additional capital from debt or equity financing. Our independent certified public accountants have stated in their report, included in our Form 10-K, that due to our net losses and negative cash flows from operations that there is a substantial doubt about our ability to continue as a going concern. In the absence of significant revenue and profits, we will be completely dependent on additional debt and equity financing arrangements. There is no assurance that any financing will be sufficient to fund our capital expenditures, working capital and other cash requirements for the fiscal year ending December 31, 2009. No assurance can be given that any such additional funding will be available or that, if available, can be obtained on terms favorable to us. If we are unable to raise needed funds on acceptable terms, we will not be able to execute our business plan, develop or enhance existing services, take advantage of future opportunities or respond to competitive pressures or unanticipated requirements. A material shortage of capital will require us to take drastic steps such as further reducing our level of operations, disposing of selected assets or seeking an acquisition partner. If cash is insufficient, we will not be able to continue operations. Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements. 21    ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Not applicable.  ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. The financial statements and related notes are included as part of this report as indexed in the appendix on page F-1 through F-19.  ITEM 9. CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None.  ITEM 9A. CONTROLS AND PROCEDURES. Evaluation of Disclosure Controls and Procedures  We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act) that are designed to be effective in providing reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (the SEC), and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure.  In designing and evaluating disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute assurance of achieving the desired objectives. Also, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. The design of any system of controls is based, in part, upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.  As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of management, including our chief executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, management concluded that our disclosure controls and procedures are effective as of December 31, 2007 to cause the information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods prescribed by SEC, and that such information is accumulated and communicated to management, including our chief executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.  Evaluation of and Report on Internal Control over Financial Reporting The management of PTS, Inc. is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the companys principal executive and principal financial officers and effected by the companys board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that: 22   −Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;−Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and−Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Management assessed the effectiveness of the Companys internal control over financial reporting as of December 31, 2008. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework. Based on its assessment, management concluded that, as of December 31, 2008, the Companys internal control over financial reporting is effective based on those criteria. This annual report does not include an attestation report of the Companys registered accounting firm regarding internal control over financial reporting.  Managements report is not subject to attestation by the Companys registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission. Changes in Internal Control over Financial Reporting  There was no change in our internal controls over financial reporting identified in connection with the requisite evaluation that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.  ITEM 9B. OTHER INFORMATION. None. PART III  ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Our directors and executive officers are as follows: NameAgePositionPosition Held SincePeter Chin61Chief Executive Officer and Chairman of the Board of Directors2002 23   The business experience of the person listed above is as follows:  Peter Chin, Chief Executive Officer, President and Chairman of the Board of Directors Mr. Chin has over 20 years of experience in the financial markets with a focus on corporate finance, advising companies in the United States and China. From 1993 to 2007, Mr. Chin has served on the board of directors of Golden Arrow Group of Companies, USA, a hotel and land management company in China.  In 2001, Mr. Chin served as a consultant for PTS, Inc., a publicly traded holding company and since 2002, he has served as PTS, Inc.s chief executive officer and chairman of the board of directors.PTS' subsidiary, Glove Box Inc. (www.ptspi.com), owns the rights to patented, revolutionary Glove BoxTM, the only product that offers contamination reduction through automated glove dispensing. The Glove BoxTM system is a free-standing dispenser of disposable latex gloves. In addition, Mr. Chin currently serves as corporate secretary and a member of the board of directors of International Building Technologies Group, Inc.International Building Technologies Group, Inc. engages in the manufacture and sale of light weight building panels used in construction worldwide. It also provides customers with architectural design, panel supply, installation supervision, engineering, training, and technical support  Mr. Chin has served on the board of director and as Chief Executive Officer of Disability Access Corporation since 2006 Code of Ethics  We have adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.  The code of ethics is designed to deter wrongdoing and to promote: · Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; · Full, fair, accurate, timely, and understandable disclosure in reports and documents that we file with, or submits to, the SEC and in other public communications made by us; · Compliance with applicable governmental laws, rules and regulations; · The 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. A copy of our code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions was filed as an exhibit to the Companys Annual Report on Form 10-KSB for the Year Ended December 31, 2005 filed on April 20, 2006. We will provide to any person without charge, upon request, a copy of our code of ethics.  Any such request should be directed to our corporate secretary at 3355 Spring Mountain Road, Suite 66, Las Vegas, Nevada 89102.  ITEM 11. EXECUTIVE COMPENSATION. Summary of Cash and Certain Other Compensation Summary Compensation Table 24  The following table provides certain summary information concerning the compensation earned by the named executive officers for the years ended December 31, 2008, December 31, 2007 and December 31, 2006 for services rendered in all capacities to PTS, Inc.: Name & Principal PositionYearSalary ($)Bonus ($)Stock Awards ($)Option Awards ($)Non-Equity Incentive Plan Compensation ($)Nonqualified Deferred Compensation Earnings ($)All Other Compensation ($)Total ($)Peter Chin
Chief Executive Officer2008177,500------177,5002007187,500-120,000(1)----307,5002006228,500------228,500 (1)Mr. Chin received 8,000,000 shares of Disability Access Corporations convertible preferred stock. Employment Agreements   None. Director Compensation DIRECTOR COMPENSATIONNameFees Earned or Paid in CashStock AwardsOption AwardsNon-Equity Incentive Plan CompensationNon-Qualified Deferred Compensation EarningsAll Other CompensationTotalPeter Chin(1)------- (1)Our sole director, Peter Chin, does not receive any compensation for his service on the Board of Directors. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED MATTERS. Security Ownership of Certain Beneficial Owners and Management The following table sets forth, as of March 20, 2009 the beneficial ownership of any class of the Companys outstanding stock; (i) by any person or group known by the Company to beneficially own more than 5% of the outstanding Common Stock, (ii) by each Director and executive officer and (iii) by all Directors and executive officers as a group.  Unless otherwise indicated, the address for each of these stockholders is c/o PTS, Inc., 3355 Spring Mountain Road, Suite 66, Las Vegas, Nevada 89102.  Also, unless otherwise indicated, each person named in the table above has the sole voting and investment power with respect to the shares of our common and preferred stock which he beneficially owns. 25    Name and AddressNumber of Shares Beneficially OwnedClassPercentage of Class(1)Peter Chin
Chief Executive Officer
and Chairman of the
Board of Directors100,001

6,583,333

15,000,000Common Stock

Series A Preferred Stock

Series D Preferred Stock*

56%


100%All directors and executive officers (one person)100,001

6,583,333


15,000,000Common Stock

Series A Preferred Stock

Series D Preferred Stock*

56%


100%Sandy Chin (2)2,550,043
855,600Common Stock
Series A Preferred Stock*
8%Majestic Safe-T-Products, LTD5,250,000Series C Preferred Stock100%AWI, Inc.1,937,500Series A Preferred Stock16%Asmac Financial, Inc.1,950,000Series A Preferred Stock16%Barbara Thorpe(3)1,000,000Series E Preferred Stock98%*Denotes less than 1% (1) The above percentages are based on 1,204,085,295 shares of common stock, 11,828,933 shares of Series A Preferred Stock, 5,250,000 shares of Series C Preferred Stock, 15,000,000 shares of Series D Preferred Stock and 1,025,225 million shares of Series E Preferred Stock outstanding as of March 20, 2009. (2) Peter Chin may be considered the beneficial owner of shares owned by his wife, Sandy Chin. (3) Barbara Thorpe currently serves as President and member of the Board of Directors of Disability Access Corporation. There are no arrangements, known to us, including any pledge by any person of our securities, the operation of which may at a subsequent date result in a change in control of PTS, Inc. There are no arrangements or understandings among members of both the former and the new control groups and their associates with respect to election of directors or other matters.  ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE.  On July 1, 2008 we issued 1,083,333 shares of Series A preferred stock to Peter Chin as payment of $97,500 of accrued salaries.  Net advances payable to Peter Chin, our sole officer and director, of $10,720 were satisfied during 2007 through the issuance of 355,600 shares of our Series A convertible preferred stock.  During the year ended December 31, 2007 we received an aggregate of $80,000 pursuant to demand promissory notes issued to Peter Chin. All notes bear interest at 16% per year and incur an initial loan fee of 6% of principal advanced. During the year, we repaid principal of $20,000, plus interest of $1,446. At December 31, 2007, the outstanding principal and accrued interest are $60,000 and $12,249, respectively.  26  ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Audit Fees The aggregate fees billed by the Company's auditors for the professional services rendered in connection with the audit of the Company's annual financial statements and reviews of the financial statements included in the Company's Forms 10-Qs for fiscal 2008 and 2007 were approximately$35,000 and  $35,000, respectively. Audit-Related Fees None. Tax Fees None. All Other Fees Fees billed in connection with subsidiary stand alone audits in fiscal 2008 and 2007 were approximately $11,000 and $0, respectively. PART IV. ITEM 15. EXHIBITS. Exhibit No.Identification of ExhibitLocation3.1Articles of Incorporation, dated November 5, 1996.Incorporated by reference from PTS, Inc.s Registration Statement on Form 10-SB filed on March 3, 1999.3.2Certificate of Amendment to Articles of Incorporation, dated June 29, 1998.Incorporated by reference from PTS, Inc.s Registration Statement on Form 10-SB filed on March 3, 1999.3.3Articles of Exchange between the Company and Elast Technologies, Inc. dated June 11, 2001.Incorporated by reference from PTS, Inc.s Current Report on Form 8-K filed on June 26, 2001.3.4Certificate of Amendment to Articles of Incorporation, dated June 26, 2001.Incorporated by reference from PTS, Inc.s Current Report on Form 8-K filed on June 26, 2001.3.5Certificate of Amendment to Articles of Incorporation, dated March 16, 2004.Incorporated by reference from PTS, Inc.s Definitive Information Statement filed on March 16, 2004.3.6Certificate of Designation establishing our Series A Preferred Stock, filed effective July 15, 2004.Incorporated by reference from PTS, Inc.s Annual Report on Form 10-KSB for the year ending December 31, 2004 filed on May 20, 2005.3.7Certificate of Designation establishing our Series B Preferred Stock, filed effective September 13, 2004.Incorporated by reference from PTS, Inc.s Annual Report on Form 10-KSB for the year ending December 31, 2004 filed on May 20, 2005.3.8Certificate of Designation establishing our Series C Preferred Stock, filed effective November 8, 2004.Incorporated by reference from PTS, Inc.s Annual Report on Form 10-KSB for the year ending December 31, 2004 filed on May 20, 2005.3.9Certificate of Designation establishing our Series D Preferred Stock, filed effective January 6, 2005.Incorporated by reference from PTS, Inc.s Annual Report on Form 10-KSB for the year ending December 31, 2004 filed on May 20, 2005.3.10Certificate of Amendment to the Certificate of Designation establishing our Series C preferred stock, filed effective April 5, 2005.Incorporated by reference from PTS, Inc.s Annual Report on Form 10-KSB for the year ending December 31, 2004 filed on May 20, 2005.3.11Certificate of Amendment to the Certificate of Designation establishing our Series D preferred stock, filed  effective April 5, 2005Incorporated by reference from PTS, Inc.s Annual Report on Form 10-KSB for the year ending December 31, 2004 filed on May 20, 2005.3.13Certificate of Amendment to the Certificate of Designation establishing our Series C preferred stock, filed effective November 10, 2005.Incorporated by reference from PTS, Inc.s Annual Report on Form 10-KSB for the year ending December 31, 2005 filed on April 20, 2006.3.14Certificate of Designation establishing our Series E Preferred Stock, filed effective November 15, 2005.Incorporated by reference from PTS, Inc.s Annual Report on Form 10-KSB for the year ending December 31, 2005 filed on April 20, 2006.3.15Certificate of Designation establishing our Series F Preferred Stock, filed effective November 15, 2005.Incorporated by reference from PTS, Inc.s Annual Report on Form 10-KSB for the year ending December 31, 2005 filed on April 20, 2006.3.16Certificate of Amendment to the Certificate of Designation of the Companys Series A, Series B and Series C preferred stock, filed effective December 29, 2006.Incorporated by reference from PTS, Inc.s Annual Report on Form 10-KSB for the year ending December 31, 2006 filed on April 2, 2007.3.17Certificate of Amendment to Articles of Incorporation, dated October 9, 2007.Incorporated by reference from PTS, Inc.s Annual Report on Form 10-KSB for the year ending December 31, 2007 filed on March 31, 2008.3.12Bylaws.Incorporated by reference from PTS, Inc.s Registration Statement on Form 10-SB filed on March 3, 1999.10.1Stock exchange agreement with American Fire Retardant Corp., a Nevada corporation, dated November 29, 2004.Incorporated by reference from PTS, Inc.s Annual Report on Form 10-KSB for the year ending December 31, 2004 filed on May 20, 2005.10.2Stock exchange agreement with Stephen F. Owens, dated November 29, 2004.Incorporated by reference from PTS, Inc.s Annual Report on Form 10-KSB for the year ending December 31, 2004 filed on May 20, 2005.10.3Stock purchase agreement with Global Links Corp., a Nevada corporation, dated December 24, 2004.Incorporated by reference from PTS, Inc.s Annual Report on Form 10-KSB for the year ending December 31, 2004 filed on May 20, 2005.10.4Stock exchange agreement with Disability Access Consultants, Inc., a California corporation, dated November 15, 2005.Incorporated by reference from PTS, Inc.s Current Report on Form 8-K filed on November 22, 2005.10.5Stock purchase agreement and convertible note with James Brewer and PTS Card Solutions, Inc. dated October 10, 2006Incorporated by reference from PTS, Inc.s Current Report on Form 8-K filed October 19, 2006.14Code of EthicsIncorporated by reference from PTS, Inc.s Annual Report on Form 10-KSB for the year ending December 31, 2004 filed on May 20, 2005.21SubsidiariesFiled herewith.31.1Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002Filed herewith.31.2Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002Filed herewith.32.1Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002Filed herewith.32.2Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002Filed herewith.  27   SIGNATURES In accordance with Section 13 or 15 (d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.  PTS, Inc.

By: /s/ Peter Chin
Peter Chin
Chief Executive Officer, Chief Financial Officer and 
      Chairman of the Board of Directors
     Dated: April 15, 2009       28     PTS, INC AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2008 AND 2007          Report of Independent Registered Public Accounting Firm  To the Board of Directors of :  We have audited the accompanying consolidated balance sheets of PTS, Inc as of December 31, 2008 and 2007, and the related consolidated statements of operations, stockholders deficit, and cash flows for the two years ended December 31, 2008 and 2007.  These financial statements are the responsibility of the Companys management.  Our responsibility is to express an opinion on these financial statements based on our audits.  We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting.  Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluation the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.  In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of PTS, Inc. as of December 31, 2008 and 2007, and the results of its operations and its cash flows for the two years ended December 31, 2008 and 2007, in conformity with generally accepted accounting principles in the United States.  The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 1 to the financial statements, the Company has limited operations and continued net losses.  This raises substantial doubt about its ability to continue as a going concern.  Managements plan in regard to these matters is also described in Note 1.   The financial statements do not include any adjustments that might result from the outcome of this uncertainty.   /s/ Lynda R. Keeton CPA, LLC Lynda R. Keeton CPA, LLC Las Vegas, NV  April 13, 2009  F-2    PTS, INC.
CONSOLIDATED BALANCE SHEETS December 31,December 31,20082007ASSETSCurrent assetsCash$          116,987$          142,863Accounts receivable, net of allowance of $1,448 and $32,885240,457352,678Other current assets6,7104,221Total current assets364,154499,762Property and equipment, net of accumulateddepreciation of $178,265 and $152,409367,825169,676Goodwill908,712908,712Deposits5,26010,513TOTAL ASSETS$        1,645,951$        1,588,663LIABILITIES AND STOCKHOLDERS' DEFICITCurrent liabilitiesAccounts payable$          181,776$          159,694Accrued expenses412,817314,425Advances payable4,7326,522Convertible notes payable, current portion, net of unamortizeddiscount of 15,318 and $14,002408,269335,587Convertible notes payable - related party342,537220,000Notes payable36,93559,609Notes payable, related party179,202-Lease payable, current portion2,4836,195Total current liabilities1,568,7511,102,032Note payable, related party-229,738Convertible notes payable, current portion, net of unamortizeddiscount of 8,753114,781-Lease payable, long term portion-2,244Derivative liability-194,146Total liabilities1,683,5321,528,160Minority interest208,522150,608Stockholders' deficitPreferred stock, Series A, $0.001 par value; 20,000,000 shares  authorized,  12,303,933 and 13,243,100 shares issued and outstanding12,30413,243Preferred stock, Series B, $0.001 par value; 20,000,000 shares authorized, no shares and 2,250,000 shares issued and outstanding-2,250Preferred stock, Series C, $0.001 par value; 7,500,000 shares authorized,5,250,000 and 7,500,000 shares issued and outstanding5,2507,500Preferred stock, Series D, $0.001 par value; 20,000,000 shares authorized,    15,000,000 shares issued and outstanding15,00015,000Preferred stock, Series E, $0.001 par value; 5,000,000 shares authorized,    1,000,000 shares issued and outstanding1,0001,000Preferred stock, Series F, $0.001 par value; 5,000,000 shares authorized,no shares issued and outstanding--Preferred stock, Series G, $0.001 par value; 3,000,000 shares authorized,    no shares issued and outstanding--Preferred stock, undesignated, $0.001 par value; 119,500,000 shares authorized,no shares issued and outstanding--Common stock, $0.00001 par value; 2,800,000,000 sharesauthorized, 1,175,960,295 and 730,057,136 shares issued and outstanding11,7607,301Additional paid-in capital19,674,86019,008,404Accumulated deficit(19,966,277)(19,144,803)Total stockholders' deficit(246,103)(90,105)TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT$        1,645,951$        1,588,663The accompanying notes are an integral part of these consolidated financial statements.  F-3    PTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 20082007Sales$      1,417,724$      1,452,879Cost of sales609,476568,428Gross profit808,248884,451Selling expense84,50168,366General and administrative expense1,050,5541,640,991Total operating expense1,135,0551,709,357Loss from operations beforeinterest and other expense(326,807)(824,906)Interest income1804,070Income allocated to minority interest(46,843)(4,441)Finance cost(32,646)(81,740)Interest expense(82,677)(98,193)(Loss) gain on extinguishment of debt(224,109)58,921Change in fair value of derivative liability(108,572)(253,191)Net loss$        (821,474)$     (1,199,480)Net loss per basic and diluted share$             (0.00)$             (0.00)Weighted average shares outstanding,basic and diluted986,604,672565,128,914The accompanying notes are an integral part of these consolidated financial statements. F-4


PTS, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007AdditionalPreferred StockCommon StockPaid-InAccumulatedSharesPar ValueSharesPar ValueCapitalDeficitTotalBalance, January 1, 200729,500,000$      29,500375,619,324$        3,756$18,242,461$ (17,945,323)$     330,394Shares sold for cash--179,250,0001,793334,596-336,389Common shares issued for services--50,500,312505137,845-138,350Preferred shares issued for services11,000,00011,000--164,000-175,000Preferred shares issued to repayrelated party debt355,600355--10,365-10,720Conversion of preferred to common(1,862,500)(1,862)124,687,5001,247615--Employee stock compensation----59,477-59,477Reclassify derivative liability----59,045-59,045Net loss-----(1,199,480)(1,199,480)Balance, December 31, 200738,993,10038,993730,057,1367,30119,008,404(19,144,803)(90,105)Shares sold for cash--71,945,58771956,828-57,547Common shares cancelled--(750,000)(8)8-Common shares issued for services--58,000,00058097,120-97,700Preferred shares issued for accruedcompensation1,083,3331,083--96,417-97,500Conversion of debt--97,520,07297663,320-64,296Beneficial conversion feature ofconvertible debt----42,715-42,715Conversion of preferred to common(6,522,500)(6,522)219,187,5002,1924,330--Employee stock compensation----3,000-3,000Reclassify derivative liability----302,718-302,718Net loss-----(821,474)(821,474)Balance, December 31, 200833,553,933$      33,5541,175,960,295$      11,760$19,674,860$ (19,966,277)$    (246,103)  The accompanying notes are an integral part of these consolidated financial statements.  F-5


PTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 20082007Cash flows from operating activities:Net loss$       (821,474)$    (1,199,480)Adjustments to reconcile net loss to netcash provided by (used in) operating activities:Depreciation and amortization56,70357,589Bad debts(28,488)18,178Issuance of shares for services97,700433,350Compensation from stock awards3,00059,477Amortization of beneficial conversion feature (finance costs)32,64681,740Loss on extinguishment of debt224,109(58,921)Security deposit applied to rent-8,676Income attributable to minority interest46,8434,441Change in fair value of derivative liability108,572253,191Decrease (increase) in assets:Accounts receivable140,709(199,544)Other current assets(2,489)11,643Deposits5,253(14,129)Increase (decrease) in liabilities:Accounts payable and accrued expenses306,300182,204Advances payable(1,790)-Cash provided by (used in) operating activities167,594(361,585)Cash flows from investing activities:Cash paid for fixed assets and capitalized software development(278,650)(22,338)Cash used in investing activities(278,650)(22,338)Cash flows from financing activities:Proceeds from sale of common stock to employees9,000336,389Proceeds from sale of common stock48,547-Payments on notes and leases(33,629)(14,642)Notes payable - related parties13,50080,000Payments on related party notes(40,238)(40,262)Notes payable - other48,000150,000Advances payable40,000-Advances from (repayments to) related parties-(23,042)Cash provided by financing activities85,180488,443Net (decrease) increase in cash(25,876)104,520Cash, beginning of period142,86338,343Cash, end of period$        116,987$        142,863Supplemental Schedule of Cash Flow Information:Cash paid for interest$          23,303$          52,715Supplemental Schedule of Non-Cash Investing and Financing Activities:Debenture principal converted to common stock$          55,594$                 -Debenture principal converted to subsidiary common stock11,07126,167Note principal and interest converted to common stock8,404-Derivative liability reclassified to equity upon conversion of debt77,73959,045Derivative liability reclassified to equity upon reassessment ofderivative status224,979-Related party payable settled through issuance of preferredstock10,720Increase in carrying value of notes payable upon extinguishmentof debt224,109-Accrued interest expense added to principal amount of debt87,624-Equity based discount on debt42,715-Distribution of fixed asset to related party as repayment of debt23,798-Preferred stock issued as payment of accrued salaries97,500-Convertible notes issued for advances payable40,000- The accompanying notes are an integral part of these consolidated financial statements.  F-6   PTS, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2008 AND 2007   NOTE 1- ORGANIZATION AND NATURE OF OPERATIONS AND BASIS OF PRESENTATION  PTS, Inc. (our, us, we, PTS or the Company) was incorporated in the state of Nevada on November 5, 1996. Our subsidiaries include Disability Access Consultants, Inc. (DAC), Disability Access Corporation (DBYC), PTS Card Solutions, Inc., Glove Box, Inc., PTS Global Capital, Inc., PTS Technologies, Inc. and PTS Group Limited, an inactive Hong Kong corporation formed on April 17, 2008.  PTS Card Solutions, Inc., Glove Box, Inc., PTS Global Capital, Inc., PTS Technologies, Inc. and PTS Group Limited are all inactive subsidiaries.  DAC is a corporation with an extensive history of accessibility compliance consulting. DAC provides consultation to state and local governmental entities and to commercial businesses.  DAC has assisted city and county governments, the Federal government, school districts, and other public entities and municipalities. DAC has also assisted retail, commercial, recreational and corporate clients to comply with state and federal accessibility standards.  DAC has developed transition/barrier removal plans, provided consultation and expert witness services.  DAC offers both pro-active services as well as support and assistance for companies that are facing penalties and litigation for being out of compliance. DAC has assisted in litigation and has performed compliance audits for public entities and other businesses. To help companies and public entities meet the requirements of the Americans with Disabilities Act and other accessibility standards, DAC has developed  proprietary software that is a management tool to simplify and streamline the accessibility compliance process. DAC has offices in Nevada, Northern California and Florida.  GOING CONCERN  The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern.  However, we have experienced recurring net operating losses, had a net loss of $821,474 for the year ended December 31, 2008, and have a working capital deficiency of $1,319,378 as of December 31, 2008. These factors raise substantial doubt about our ability to continue as a going concern.  Without realization of additional capital, it would be unlikely for us to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.  We will need additional capital to continue our operations and will endeavor to raise funds through the sale of equity shares and revenues from operations. There can be no assurance that we will continue to generate revenues from operations or obtain sufficient capital on acceptable terms, if at all.  Failure to obtain such capital or generate such operating revenues would have an adverse impact on our financial position and results of operations and ability to continue as a going concern.  Our operating and capital requirements during the next fiscal year and thereafter will vary based on a number of factors, including the level of sales and marketing activities for our services and products.  There can be no assurance that additional private or public finances, including debt or equity financing, will be available as needed or, if available, on terms favorable to us.  Any additional equity financing may be dilutive to stockholders and such additional equity securities may have rights, preferences or privileges that are senior to those of our existing common stock. Furthermore, debt financing, if available, will require payment of interest and may involve restrictive covenants that could impose limitations on our operating flexibility.  Our failure to successfully obtain additional future funding may jeopardize our ability to continue our business and operations. If we raise additional funds by issuing equity securities, existing stockholders may experience a dilution in their ownership.  In addition, as a condition to giving additional funds to us, future investors may demand, and may be granted, rights superior to those of existing stockholders. F-7  NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  Principles of Consolidation  The accompanying consolidated financial statements include the accounts of PTS and its subsidiaries. All significant intercompany transactions have been eliminated.    Use of Estimates  The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Equivalents  Cash equivalents are comprised of certain highly liquid investments with maturities of three months or less when purchased.  We maintain our cash in bank deposit accounts which, at times, may exceed federally insured limits. We have not experienced any losses in such accounts and no bank account balance exceeds the federally insured limit at December 31, 2008. We do not have any cash equivalents at December 31, 2008 or 2007.  Accounts Receivable  Trade receivables are carried at their estimated collectible amounts. Trade credit is generally extended on a short-term basis; thus trade receivables do not bear interest. Trade accounts receivable are periodically evaluated for collectability based on past credit history with customers and their current financial condition. Revenue Recognition  DAC generates revenue from services regarding compliance with state, federal and local accessibility codes.  Services include inspections of facilities, production of accessibility reports, consultation, expert witness services, and review of policies and procedures of the client. In all cases, revenue is recognized as earned by the Company.  Though contracts may vary between a progress-basis and completed project basis, as the client becomes liable to the Company for services provided, as defined in the agreement, the client is then invoiced and revenue is accordingly recognized and recorded.  The Company does not recognize or record any revenues for which it does not have a legal basis for invoicing or legally collecting. For progress-basis contracts, the Company invoices the client when it has completed the specified portion of the agreement, there by, ensuring the client is legally liable to the Company for payment of the invoice. On progress-basis contracts, revenue is not recognized until this criteria is met. Approximately 20% of the revenue generated in 2008 came from progress-based agreements.  The Company generally seeks progress-based agreements when the length of engagement will exceed two months and the size of contract exceeds $25,000.  Concentrations  Credit risk:  Financial instruments, which potentially subject us to concentrations of credit risk, consist of cash and accounts receivable. We place our cash with high quality financial institutions and, at times, balances may exceed the current FDIC $250,000 insurance limit. We extend credit based on an evaluation of a customer's financial condition, generally without collateral. Exposure to losses on accounts receivable is principally dependent on each customer's financial condition. We monitor our exposure for credit losses and maintain allowances for anticipated losses, if required.  F-8   Customers:  During 2008, one customer accounted for 53% of our revenue. During 2007, one customer accounted for 44% of our revenue. No other customer accounted for more than 10% of revenue during 2008 and 2007. The loss of this customer could have a material adverse effect on our financial position and results of operations.  At December 31, 2008, three customers accounted for a total of 89% of our accounts receivable. No other customer accounted for more than 10% of our accounts receivable at December 31, 2008.   Fair Value of Financial Instruments  For certain of our financial instruments, including accounts receivable, advances receivable, advances payable and notes payable, the carrying amounts approximate fair value due to their relatively short maturities.  Property and Equipment  Property and equipment are stated at cost less accumulated depreciation. Expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of three to seven years.  Intangible and Long-Lived Assets  We follow SFAS No. 144, Accounting for Impairment of Disposal of Long-Lived Assets, which established a primary asset approach to determine the cash flow estimation period for a group of assets and liabilities that represents the unit of accounting for a long lived asset to be held and used.  Long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset.  Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell.  Goodwill is accounted for in accordance with SFAS No. 142, "Goodwill and Other Intangible Assets". We assess the impairment of long-lived assets, including goodwill and intangibles on an annual basis or whenever events or changes in circumstances indicate that the fair value is less than its carrying value. Factors that we consider important which could trigger an impairment review include poor economic performance relative to historical or projected future operating results, significant negative industry, economic or company specific trends, changes in the manner of our use of the assets or the plans for our business, market price of our common stock, and loss of key personnel. We have determined that there was no impairment of goodwill during 2008 or 2007.  Loss Per Share  Basic and diluted loss per common share for all periods presented is computed based on the weighted average number of common shares outstanding during the year as defined by SFAS No. 128, "Earnings Per Share. The assumed exercise of common stock equivalents was not utilized for the years ended December 31, 2008 and 2007 since the effect would be anti-dilutive. There were 4,385,811,081 and 4,157,002,500 common stock equivalents outstanding at December 31, 2008 and 2007, respectively (see Note 6).  F-9   Software Development Costs Costs incurred internally in creating a computer software product are charged to expense when incurred as research and development until technological feasibility has been established for the product. Technological feasibility is established upon completion of a detail program design or, in its absence, completion of a working model. Thereafter, all software production costs are capitalized and subsequently reported at the lower of unamortized cost or net realizable value. Capitalized costs are amortized based on current and future revenue for each product with an annual minimum equal to the straight-line amortization over the remaining estimated economic life of the product.  During the year ended December 31, 2008, we have capitalized $236,135 of costs related to the development of software products for which technological feasibility was achieved in January of 2007. No costs were capitalized during 2007. The costs are being amortized over their five year estimated economic life.  Income Taxes  We have adopted the provisions of SFAS No. 109 "Accounting for Income Taxes" ("SFAS 109"). SFAS 109 requires recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company has incurred losses that can be carried forward to offset future earnings if conditions of the Internal Revenue Codes are met. A valuation allowance is recorded to reduce a deferred tax asset to that portion that is expected to more likely than not be realized.  In July 2006, the FASB issued FIN 48, "Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109" ("FIN 48"). FIN 48 clarifies the recognition threshold and measurement of a tax position taken on a tax return. FIN 48 is effective for fiscal years beginning after December 15, 2006. FIN 48 also requires expanded disclosure with respect to the uncertainty in income taxes.  Stock Based Compensation  On January 1, 2006, we adopted the fair value recognition provisions of SFAS No. 123(R), Accounting for Stock-Based Compensation, to account for compensation costs under our stock option plans.  We use the fair value method for equity instruments granted to non-employees and will use the Black Scholes model for measuring the fair value of options, if issued.  The stock based fair value compensation is determined as of the date of the grant or the date at which the performance of the services is completed (measurement date) and is recognized over the vesting periods. We did not grant any option awards during 2008 or 2007.  Potential Derivative Instruments  We periodically assess our financial and equity instruments to determine if they require derivative accounting. Instruments which may potentially require derivative accounting are conversion features of debt and common stock equivalents in excess of available authorized common shares.  We have determined that the conversion features of our debt instruments are not derivative instruments because they are not readily convertible to cash based on our historical trading volume.  We have determined that common stock equivalents in excess of available authorized common shares are not derivative instruments due to the fact that an increase in authorized shares is within our control because our chief executive officer, Peter Chin, and his spouse control over 50% of our voting power.  F-10   Fair Value Accounting  In September 2006, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 157, Fair Value Measurements (FAS 157). FAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. The provisions of FAS 157 were adopted January 1, 2008. In February 2008, the FASB staff issued Staff Position No. 157-2 Effective Date of FASB Statement No. 157 (FSP FAS 157-2). FSP FAS 157-2 delayed the effective date of FAS 157 for nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The provisions of FSP FAS 157-2 are effective for the Companys fiscal year beginning January 1, 2009.  FAS 157 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under FAS 157 are described below: Level 1Unadjusted quoted prices in active markets that are accessible at the measurement date for      identical, unrestricted assets or liabilities;  Level 2Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability;  Level 3Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).  The following table sets forth the Companys financial liabilities measured at fair value by level within the fair value hierarchy. As required by FAS 157, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company designates cash equivalents as Level 1. As of December 31, 2008 and 2007, the Company did not have any cash equivalents, therefore there were no assets measured at fair value.  Fair Value at December 31, 2008TotalLevel 1Level 2Level 3Liabilities:Conversion option liability$-$-$-$- F-11  The Companys conversion option liability is valued using pricing models and the Company generally uses similar models to value similar instruments. Where possible, the Company verifies the values produced by its pricing models to market prices. Valuation models require a variety of inputs, including contractual terms, market prices, yield curves, credit spreads, measures of volatility, and correlations of such inputs. These financial liabilities do not trade in liquid markets, and as such, model inputs cannot generally be verified and do involve significant management judgment. Such instruments are typically classified within Level 3 of the fair value hierarchy.  The table below sets forth a summary of changes in the fair value of the Companys Level 3 financial liabilities (detachable warrants and conversion option liabilities) for the year ended December 31, 2008.  Balance at beginning of period$194,146Change in fair value of conversion option108,572Reclassification to equity upon conversion(77,739)Reclassification to equity upon reassessment(224,979)Balance at end of period$-  The total amount of the changes in fair value for the period was included in net loss as a result of changes in the Companys stock price from December 31, 2008.  In February 2007, the FASB issued FASB Statement No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (FAS 159). FAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value, with the objective of improving financial reporting by mitigating volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. The provisions of FAS 159 were adopted January 1, 2008. The Company did not elect the Fair Value Option for any of its financial assets or liabilities, and therefore, the adoption of FAS 159 had no impact on the Companys consolidated financial position, results of operations or cash flows. Recent Accounting Pronouncements  In March 2008, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 161, Disclosures About Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133.  This new standard enhances the disclosure requirements related to derivative instruments and hedging activities required by FASB Statement No. 133.  This standard is effective for fiscal years and interim periods beginning after November 15, 2008, with early adoption encouraged. The Company adopted the required provisions of SFAS 161 on January 1, 2008 and the adoption did not have a significant impact on its consolidated financial position and results of operations.  In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles.  This Statement identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (GAAP) in the United States (the GAAP hierarchy).  This Statement will not have an impact on the Companys financial statements.  In June 2008, the FASB issued Emerging Issues Task Force No. 07-5 (EITF 07-5), Determining Whether an Instrument (or Embedded Feature) is Indexed to an Entitys Own Stock. EITF 07-5 requires entities to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock by assessing the instruments contingent exercise provisions and settlement provisions. Instruments not indexed to their own stock fail to meet the scope exception of Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities, paragraph 11(a), and should be classified as a liability and marked-to-market. The statement is effective for fiscal years beginning after December 15, 2008 and is to be applied to outstanding instruments upon adoption with the cumulative effect of the change in accounting principle recognized as an adjustment to the opening balance of retained earnings. The Company has assessed its outstanding equity-linked financial instruments and has concluded that the adoption of EITF 07-05 will not have a material impact on its consolidated financial statements.  NOTE 3 - RELATED PARTY TRANSACTIONS  Due to Related Parties  On January 1, 2008, notes and related accrued interest payable to Peter Chin, our sole officer and director, were combined into a single convertible note in the amount of $72,253. The note bears interest at 8%, is due on December 31, 2008 and is convertible into our common stock, at the option of the holder, at a 30% discount to the current market price of our stock at the date of conversion. We have recorded a loss on extinguishment of debt in the amount of $75,084, which represents the fair value on the conversion feature on January 1, 2008. This amount has been added to the carrying value of the debt.  On January 1, 2008, a debenture and related accrued interest payable to Peter Chin were combined into a single convertible debenture in the amount of $195,200. The debenture bears interest at 8%, is due on December 31, 2008 and is convertible into our common stock, at the option of the holder, at a 50% discount to the current market price of our stock at the date of conversion.  F-12   All of the notes described above that were due on December 31, 2008 were extended to December 31, 2009 on January 1, 2009.  During 2008 Peter Chins spouse advanced to us an aggregate of $13,500 pursuant to five individual 12% demand promissory notes, for working capital purposes. Four notes aggregating $10,500 were repaid. As of December 31, 2008 the remaining principal balance of the notes was $3,000 and accrued interest on the notes payable is $343.  During 2008 Peter Chins spouse advanced to us $3,000 for working capital purposes. The advance bore no interest and was repaid.  On July 1, 2008 we issued 1,083,333 shares of Series A preferred stock to Peter Chin as payment of $97,500 of accrued salaries.  During 2008, we paid $53,536 of principal and $8,548 of accrued interest to an officer of DAC. The payments made included the non-cash distribution of a vehicle valued at $23,798. As of December 31, 2008 the principal balance of this note was $176,202 and accrued interest on the note payable is $5,026.  During the year ended December 31, 2007 we received an aggregate of $80,000 pursuant to demand promissory notes issued to Peter Chin. All notes bear interest at 16% per year and incur an initial loan fee of 6% of principal advanced. During the year, we repaid principal of $20,000, plus interest of $1,446. At December 31, 2007, the outstanding principal and accrued interest was $60,000 and $12,249, respectively. These amounts were combined into a single note at January 1, 2008.  NOTE 4 - STOCK TRANSACTIONS We are authorized to issue a total of 3,000,000,000 shares of stock, 2,800,000,000 shares of common stock and 200,000,000 shares of preferred stock. On October 9, 2007, the Company filed an amendment to the articles of incorporation with the state of Nevada to increase the authorized number of shares of the Companys common stock from 1,800,000,000 to 2,800,000,000 shares.  In addition, the par value of the common stock was reduced from $0.001 to $0.00001 per share. We have designated 20,000,000 shares of Series A preferred stock, $0.001 par value, each share convertible to 75 shares of common stock. Each share of Series A preferred stock has voting rights equal to 75 shares of common stock. We have designated 20,000,000 shares of Series B preferred stock, $0.001 par value, each share convertible to 15 shares of common stock. Each share of Series B preferred stock has no voting rights. We have designated 7,500,000 shares of Series C preferred stock, $0.001 par value, each share convertible to 15 shares of common stock. Each share of Series C preferred stock has no voting rights. We have designated 20,000,000 shares of our preferred stock as Series D preferred stock, $0.001 par value. Each share of the Series D preferred stock is not convertible to common stock. We have designated 5,000,000 shares our preferred stock as Series E preferred stock, $0.001 par value. Each share of the Series E Preferred Stock is convertible into one dollar ($1.00) worth of common stock. We have designated 5,000,000 shares of our preferred stock as Series F preferred stock, $0.001 par value.  The Series F Preferred Stock has redeemable rights. We have designated 5,000,000 shares of our preferred stock as Series G preferred stock, $0.001 par value. F-13  During the year ended December 31, 2008: We issued 20,000,000 shares of common stock for cash proceeds of $9,000. These shares were issued pursuant to the Company's Bonus Plan. The shares were sold below fair value; an expense for the intrinsic value of $3,000 has been recorded in the statement of operations.  We sold 51,945,587 shares of common stock for net cash proceeds of $48,547.  We issued 58,000,000 shares of common stock, valued at $97,700, for services.  We issued 97,520,072 shares of common stock upon conversion of $64,296 of debt and accrued interest.  We issued 151,687,500 shares of common stock pursuant to the conversion of 2,022,500 shares of Series A preferred stock.  We issued 33,750,000 shares of common stock pursuant to the conversion of 2,250,000 shares of Series B preferred stock.  We issued 33,750,000 shares of common stock pursuant to the conversion of 2,250,000 shares of Series C preferred stock.  We issued 1,083,333 shares of Series A preferred stock as payment of $97,500 of accrued salaries.  During 2008 we granted stock awards to employees for an aggregate of 20,000,000 shares of common stock. The awards had a weighted average fair value of $0.0006 per share. We have recorded compensation expense of $3,000 related to these awards. We also granted 51,000,000 shares, with a weighted average fair value of $0.002, to consultants and have recorded a compensation cost of $91,600 related to these grants.  During the year ended December 31, 2007:  We issued 179,250,000 shares of common stock for cash proceeds of $336,389. These shares were issued pursuant to the Company's Bonus Plan. The shares were sold below fair value; an expense for the intrinsic value of $59,477 has been recorded in the statement of operations.  We issued 50,500,312 shares of common stock, valued at $138,350, for services.  We issued 10,000,000 shares of Series D preferred stock, valued at $10,000, for services.  We issued 1,000,000 shares of Series A preferred stock, valued at $165,000, for services.  We issued 355,600 shares of Series A preferred stock as repayment of related party of $10,720.  A subsidiary issued 8,000,000 shares of preferred stock, valued at $120,000, for services. The value of these shares has been classified as a minority interest in the financial statements at December 31, 2007.  We issued 124,687,500 shares of common stock pursuant to the conversion of 1,612,500 shares of Series A preferred stock and 250,000 shares of Series B preferred stock.  During 2007, we granted stock awards to employees and consultants for an aggregate of 179,250,000 shares of common stock. The awards had a weighted average fair value of $0.002 per share. We have recorded compensation expense of $59,477 related to these awards. We also granted 50,500,312 shares, with a weighted average fair value of $0.003, to consultants and have recorded a compensation cost of $138,350 related to these grants. On December 7, 2007 the Company amended the Employee Stock Incentive Plan to incorporate that consultants will also be eligible for stock awards.  F-14   NOTE 5 - CONVERTIBLE DEBENTURES AND NOTES PAYABLE  During the quarter ended March 31, 2007, our subsidiary, Disability Access Corporation, issued a convertible debenture in the amount of $150,000. The note bears interest at the rate of 8% per year and matures on June 30, 2009. The note is convertible into DBYC common stock (ticker symbol DBYC) at a 50% discount to market and due to this variability the embedded conversion option is accounted for under EITF issue No. 00-19 "Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company's Own Stock" . We have accounted for the embedded conversion option as a derivative liability until November 15, 2008 at which time we determined that the conversion option was no longer a derivative instrument since it was not readily convertible to cash. Accordingly, the embedded conversion option was marked to market through earnings at the end of each reporting period and through November 15, 2008 at which time the liability of $224,979 was reclassified to additional paid-in capital. The conversion option was valued using the Black-Scholes valuation model. For the years ended December 31, 2008 and 2007, the Company recorded an expense of $108,572 and $253,191, respectively, representing the change in the value of the embedded conversion option. During the year ended December 31, 2008 the holder of the debenture converted $11,071 of principal into 221,405,400 shares of the subsidiarys common stock. This amount has been classified as a minority interest in the financial statements at June 30, 2008. As a result of the conversions, we have reclassified an aggregate of $77,739 of our derivative liability to additional paid in capital. This amount represents the fair value of the derivative liability related to the conversions on the dates of the conversions.  On January 1, 2008, notes and related accrued interest payable to Peter Chin were combined into a single convertible note in the amount of $72,253. The note bears interest at 8%, is due on December 31, 2008 and is convertible into our common stock, at the option of the holder, at a 30% discount to the current market price of our stock at the date of conversion. We have recorded a loss on extinguishment of debt in the amount of $75,084, which represents the fair value on the conversion feature on January 1, 2008. This amount has been added to the carrying value of the debt.  On January 1, 2008, a note and related accrued interest were combined into a single convertible note in the amount of $54,591. The note bears interest at 8%, is due on December 31, 2008 and is convertible into our common stock, at the option of the holder, at a 30% discount to the current market price of our stock at the date of conversion.  On January 1, 2008, a debenture and related accrued interest payable to Peter Chin were combined into a single convertible debenture in the amount of $195,200. The debenture bears interest at 8%, is due on December 31, 2008 and is convertible into our common stock, at the option of the holder, at a 50% discount to the current market price of our stock at the date of conversion.  On January 1, 2008, a note and related accrued interest were combined into a single convertible note in the amount of $23,133. The note bears interest at 8%, is due on December 31, 2008 and is convertible into our common stock, at the option of the holder, at a 30% discount to the current market price of our stock at the date of conversion.  On January 1, 2008, debentures and related accrued interest issued by DAC were combined into new convertible debentures in the aggregate amount of $104,821. The debentures bear interest at 8%, are due on December 31, 2008 and are convertible into our common stock, at the option of the holder, at a 30% discount to the current market price of our stock at the date of conversion. During the year ended December 31, 2008 $35,233 of principal was converted into 35,000,000 shares of our common stock.  On January 1, 2008, the debenture and related accrued interest issued by a subsidiary, Glove Box, Inc., were combined into a single convertible debenture in the amount of $20,361. The debenture bears interest at 8%, is due on December 31, 2008 and is convertible into our common stock, at the option of the holder, at a 30% discount to the current market price of our stock at the date of conversion. During the year ended December 31, 2008 $20,361 of principal and $298 of accrued interest was converted into 38,507,930 shares of our common stock and the note was retired.  F-15   On January 1, 2008, a debenture and related accrued interest were combined into a single convertible debenture in the amount of $63,022. The debenture bears interest at 8%, is due on December 31, 2008 and is convertible into our common stock, at the option of the holder, at a 30% discount to the current market price of our stock at the date of conversion. Prior to January 1, 2008, the conversion rate was 80%. We have recorded a loss on extinguishment of debt in the amount of $65,491, which represents the fair value on the conversion feature on January 1, 2008. This amount has been added to the carrying value of the debt.  On January 7, 2008 we executed a convertible promissory note in the amount of $10,000. The note bears interest at 8%, is due on January 7, 2009 and is convertible into our common stock, at the option of the holder, at a 50% discount to the current market price of our stock at the date of conversion. We have recognized a beneficial conversion feature of $10,000 attributable to this note which is being amortized over the term on the note.  On March 25, 2008 we executed a convertible promissory note in the amount of $8,000. The note bore interest at 8%, was due on March 24, 2009 and is convertible into our common stock, at the option of the holder, at a 30% discount to the current market price of our stock at the date of conversion. On November 11, 2008 principal and accrued interest aggregating $8,404 was converted into 24,012,142 shares of common stock. We have recognized a beneficial conversion feature of $3,429 attributable to this note which has been fully amortized to the date of conversion.  On July 1, 2008 we executed a convertible promissory note in the amount of $10,000. The note bears interest at 8%, is due on June 30, 2009 and is convertible into our common stock, at the option of the holder, at a 30% discount to the current market price of our stock at the date of conversion. We have recognized a beneficial conversion feature of $4,286 attributable to this note which is being amortized over the term of the note.  On November 10, 2008 we executed a convertible promissory note in the amount of $5,000. The note bears interest at 8%, is due on December 31, 2009 and is convertible into our common stock, at the option of the holder, at a 30% discount to the current market price of our stock at the date of conversion. We have recognized a beneficial conversion feature of $5,000 attributable to this note which is being amortized over the term of the note.  On November 13, 2008 we executed a convertible promissory note in the amount of $10,000. The note bears interest at 8%, is due on December 31, 2009 and is convertible into our common stock, at the option of the holder, at a 30% discount to the current market price of our stock at the date of conversion. We have recognized a beneficial conversion feature of $10,000 attributable to this note which is being amortized over the term of the note.  On November 18, 2008 we executed a convertible promissory note in the amount of $10,000. The note bears interest at 8%, is due on December 31, 2011 and is convertible into our common stock, at the option of the holder, at a 30% discount to the current market price of our stock at the date of conversion. We have recognized a beneficial conversion feature of $10,000 attributable to this note which is being amortized over the term of the note.   On November 18, 2008, noninterest bearing working capital advances aggregating $30,000 were combined into three convertible notes in the amount of $10,000 each. The notes bear interest at 8%, are due on December 31, 2011 and are convertible into our common stock, at the option of the holder, at a 30% discount to the current market price of our stock at the date of conversion. Prior to November 18, there was no conversion feature. We have recorded a loss on extinguishment of debt in the amount of $83,534, which represents the fair value on the conversion feature on November 18, 2008. This amount has been added to the carrying value of the debt.  During 2008 Peter Chins spouse advanced to us an aggregate of $13,500 pursuant to five individual 12% demand promissory notes, for working capital purposes. Four notes aggregating $10,500 were repaid.  During 2008 we executed a 12% demand promissory note in the amount of $5,000. All of the notes described above that were due on December 31, 2008 were extended to December 31, 2009 on January 1, 2009.  F-16  We have received advances aggregating $250,000 from an officer of DAC during the six months ended June 30, 2006. On June 30, 2006 these advances were converted to notes payable bearing interest at 9% and due June 30, 2009. At December 31, 2008 the principal balance of this note is $176,202.  DAC has established a 2-year $100,000 line of credit with Tri Counties Bank.  Terms of the loan require interest at Prime +2% interest (6% at December 31, 2008), payable monthly. The current balance as of December 31, 2008 is $31,935 with minimum monthly interest-only payments.   The line of credit is personally guaranteed by Barbara Thorpe, the President of DAC. Since the line of credit may be called upon 60 days notice by the bank, the entire balance is classified as a current liability at December 31, 2008.  Principal amount of debt matures as follows:  2009$841,6862010-201140,000$881,686  NOTE 6 - CONVERTIBLE PREFERRED STOCK AND DEBENTURES  As of December 31, 2008, the common stock equivalents of the Company exceeded the total common stock available for issuance by approximately 2,762,000,000 shares.  The Companys Chief Executive Officer, Peter Chin and his spouse, hold 7,538,933 shares of Series A Preferred Stock that are convertible into 565,419,975 common shares of the Company.  Peter Chin also holds debt convertible into 937,716,359 shares of common stock at December 31, 2008. Unless and until there is enough authorized common stock available to cover all common stock equivalents, Mr. Chin and his spouse will not convert any of their preferred shares or the debt.  After giving consideration to the convertible preferred stock and convertible debt held by Mr. Chin and his spouse, our remaining common stock equivalents exceed our common shares available for issuance by approximately 1,259,000,000. Although we are required to obtain shareholder approval to increase our authorized shares, Mr. Chin and his spouse have control of shareholder votes in excess of 50%. Therefore, the ability to increase our authorized shares is considered to be within the Companys control and we have not accounted for these common stock equivalents as derivative instruments at December 31, 2008.  NOTE 7 - INCOME TAXES  During the year ended December 31, 2007, the Company adopted Financial Accounting Standards Board (FASB) Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" (FIN 48), which supplements SFAS No. 109, "Accounting for Income Taxes", by defining the confidence level that a tax position must meet in order to be recognized in the financial statements. The Interpretation requires that the tax effects of a position be recognized only if it is "more-likely-than-not" to be sustained based solely on its technical merits as of the reporting date. The more-likely-than-not threshold represents a positive assertion by management that a company is entitled to the economic benefits of a tax position. If a tax position is not considered more-likely- than-not to be sustained based solely on its technical merits no benefits of the tax position are to be recognized. Moreover, the more-likely-than-not threshold must continue to be met in each reporting period to support continued recognition of a benefit. With the adoption of FIN 48, companies are required to adjust their financial statements to reflect only those tax positions that are more-likely-than-not to be sustained. Any necessary adjustment would be recorded directly to retained earnings and reported as a change in accounting principle.  As of December 31, 2008 we have fully allowed for any deferred tax assets as management has determined that it is more-likely-than-not that we will no sustain the use of our net operating loss carryforwards and have established a valuation allowance for them. The valuation allowance increased by $89,000 and $255,000 during the years ended December 31, 2008 and 2007, respectively.  F-17   Significant components of the Company's deferred income tax assets at December 31, 2008 and 2007 are as follows:  20082007Deferred income tax asset:Net operating loss carryforward$2,127,000$2,038,000Valuation allowance(2,127,000)(2,038,000)Net deferred tax asset$-$-  Reconciliation of the effective income tax rate to the U. S. statutory rate is as follows:  20082007Tax expense at the U.S. statutoryincome tax rate(34%)(34%)Increase in valuation allowance34%34%Effective income tax rate--  Upon adoption of FIN 48 as of January 1, 2007, the Company had no gross unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate in future periods. At December 31, 2008 the amount of gross unrecognized tax benefits before valuation allowances and the amount that would favorably affect the effective income tax rate in future periods after valuation allowances were $0. These amounts consider the guidance in FIN 48-1, "Definition of Settlement in FASB Interpretation No. 48". The Company has not accrued any additional interest or penalties as a result of the adoption of FIN 48.  The Company has not filed income tax returns in the United States federal jurisdiction and certain states in the United States. The Company is in the process of preparing and filing its US federal returns. These U. S. federal returns are considered open tax years as of the date of these consolidated financial statements. No tax returns are currently under examination by any tax authorities.  NOTE 8  PROPERTY AND EQUIPMENT  Fixed assets and accumulated depreciation at December 31, 2008 and 2007 consists of the following:  20082007Furniture and fixtures$11,631$11,631Equipment202,737214,867Software331,72295,587546,090322,085Accumulated depreciation(178,265)(152,409)Net book value$367,825$169,676  Depreciation expense was $56,703 and $57,589 for the years ended December 31, 2008 and 2007, respectively.  During 2006, we acquired property and equipment in the amount of $17,261, pursuant to a capital lease. The depreciation on this equipment is included in the expense reported above.  Our capital lease obligation matures in 2009.  Approximate amortization of software costs for the next five years is as follows: 2009, $66,000; 2010, $64,000; 2011, $47,000; 2012, $47,000; and 2013, $24,000.  F-18   NOTE 9 - COMMITMENTS AND CONTINGENCIES  Operating Leases  All of our operating leases are either on a month to month basis or expire during 2009.  Future minimum lease payments are $120,842.  Rent expense for the years ended December 31, 2008 and 2007 was $91,501 and $131,144, respectively.  NOTE 10 - STOCK-BASED COMPENSATION  During March 2005, we adopted the Employee Stock Incentive Plan for the Year 2005. Pursuant to the Plan, we may grant stock options and common stock awards to employees. The purchase price (the "Exercise Price") of shares of the common stock subject to an incentive stock option (the "Option Shares") or of stock awards shall not be less than 85 percent of the fair market value of the common stock on the date of exercise. The stock option period (the "Term") shall commence on the date of grant of the option and shall not exceed ten years. Payment may be made (a) in cash, (b) by cashier's or certified check, (c) by surrender of previously owned shares of common stock (if the Company authorizes payment in stock in its discretion), (d) by withholding from the option shares which would otherwise be issuable upon the exercise of the stock option that number of option shares equal to the exercise price of the stock option, if such withholding is authorized by the Company in its discretion, or (e) in the discretion of the Company, by the delivery to the Company of the optionee's promissory note secured by the option shares. The maximum number of shares which may be issued pursuant to the Employee Stock Incentive Plan for the Year 2005 are 1,300,000,000 shares. There are 660,350,000, shares remaining as of December 31, 2008.  During the fourth quarter of 2007, the Company noted a typographical error in the Employee Stock Incentive Plan for the Year 2005 that the word consultant was not included. On December 7, 2007 the Company amended the Employee Stock Incentive Plan for the Year 2005 to correct the typographical error that consultants are eligible for stock awards and have been eligible since inception of the plan.  NOTE 11  SUBSEQUENT EVENTS During January 2009 all notes payable that were due on December 31, 2008 were extended to December 31, 2009.  During January 2009 we issued 25,225 shares of Series E preferred stock as payment for services.  During March 2009 we issued 28,125,000 shares of common stock pursuant to the conversion of 375,000 shares of Series A preferred stock.            F-19