By Joe Goldeen, The Record, Stockton, Calif. Knight Ridder/Tribune Business News
Sep. 17--For the second quarter in a row, Lodi-based PayStar Corp. said in a federal filing that "there is substantial doubt concerning the company's ability to continue as a going concern."
In its latest filing with the Securities and Exchange Commission, PayStar, facing numerous civil lawsuits and actions brought by state agencies around the nation, reported a net loss of $2.7 million for the six months ended June 30.
"Losses incurred in prior years have contributed to a stockholders' deficit of $7,279,874. Further, current liabilities exceed current assets by $9,873,575," said the report, filed Wednesday for PayStar's second quarter, which ended June 30.
"Management is currently in the process of seeking additional funding, changing its business model, reducing expenses and decreasing human resources," the provider of prepaid wireless banking services, content-based Internet kiosks and cashless automated teller machines said in the SEC filing. "However, there can be no assurances that management's efforts to restore the company to profitable operations will be successful."
A call to PayStar Chief Executive Officer William D. Yotty on Monday was not returned. Gregory Goehring, a Lodi attorney representing PayStar, declined to comment Monday about the quarterly report, citing pending litigation against Paystar.
As of June 30, PayStar reported in the SEC filing that it had $11,440 in cash and $504,584 in accounts receivable, 27 percent of which was considered doubtful accounts, also known as bad debts. It listed current assets of almost $700,000 and total assets of almost $3.8 million.
Under liabilities, the company reported a $147,391 bank overdraft and $4.6 million in accounts payable, the category representing day-to-day expenses. It listed current liabilities of $10.5 million and total liabilities of $11 million. Its current liabilities are more than 15 times its current assets.
For the second quarter, PayStar reported a gross profit of $177,000, compared with a gross profit for the same quarter of 2001 of $2 million.
Also for the latest quarter, PayStar reported an operating loss after expenses of $1.2 million compared with a $159,000 loss for the same quarter last year.
PayStar reported an accumulated stockholders' deficit of almost $20.7 million as of June 30. The deficit was reported as $17.9 million at the end of 2001. A significant jump occurred after the quarter ending Sept. 30, when PayStar's accumulated deficit was reported as $192,853.
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(c) 2002, The Record, Stockton, Calif. Distributed by Knight Ridder/Tribune Business News.
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