SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 18, 2000
ON-POINT TECHNOLOGY SYSTEMS, INC.
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(Exact name of registrant as specified in its charter)
Nevada 0-21738 33-0423037
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(State of (Commission File (IRS Employer
incorporation) Number) Identification No.)
1370 W. San Marcos Blvd, Ste 100, San Marcos, California 92069
(Address of principal executive offices) (Zip code)
Registrant's telephone no., including area code: (760)510-4900
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(Not applicable)
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(Former name or former address, if changed since last report)
Item 5. Other Events
The Company is in the process of restating its financial
Statements for periods beginning 1997 to reflect its determination
that a long-term lease of vending machines to Solutioneering, Inc.
should have been carried as an operating lease, rather than a
sales-type lease.
In 1997, the Company and Solutioneering entered into a long-
term lease arrangement with Solutioneering, originally recorded as
a sales-type lease, pursuant to which, during 1997 and 1998, the
Company furnished Solutioneering with approximately 2,000
refurbished vending machines. Based on its existing business
relationship with Solutioneering and the value of the locations of the
leased machines, the Company recorded the lease as a sales-type
lease. However, the Company now believes that based on the
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financial condition of Solutioneering and other factors, the lease
should have been accounted for as an operating lease, as the
collectibility of the lease payments was not reasonably predictable at
the inception of the lease.
Additionally, the Company has determined that certain options and
warrants granted to a Company employee and a corporation wholly
owned by him should have resulted in expense for service in 1997
and 1998.
As a result, the Company's 1997, 1998 and 1999 financial
statements will be restated to account for the lease as an operating
lease and to recognize expense for options and warrants for services
during 1997 and 1998. The Company's previously issued 1997,
1998 and 1999 financial statements and the independent auditor's
reports on the Company's financial statements for the years ended
December 31, 1997 and 1998 should no longer be relied upon.
The Company will disclose the effects of the restatements in
amendments to forms 10-KSB and 10-QSB.
As previously disclosed, Solutioneering, in 1998 defaulted on lease
payments due the Company, and in 1999, the Company commenced
legal proceedings to collect the amounts owed. Nevertheless,
management continued to believe that the underlying value of
Solutioneering's assets, primarily the vending machines under the
lease, exceeded the amounts owed to the Company. Management
believes that the underlying value of the assets has decreased
substantially and that the Company may not receive the amounts it is
owed under the lease. In January 2000, the Company assigned its
rights in the lease receivable, related contract rights, and the vending
machines underlying the lease to a wholly owned subsidiary, which
is attempting to obtain value for the underlying assets.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
ON-POINT TECHNOLOGY SYSTEMS, INC.
Date: February 18, 2000 By: /s/ Sam W. Stearman
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Sam W. Stearman
Chief Financial Officer
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