-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CW1jXJp5TNh9rvIPiIzaS+uy/vswXFBH95cBzcrQTS5FbdhyPu5+YyNSTm5jRLfw 6euJsUnNmMiHyBEjOp8V1A== 0000950130-00-002218.txt : 20000421 0000950130-00-002218.hdr.sgml : 20000421 ACCESSION NUMBER: 0000950130-00-002218 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000229 FILED AS OF DATE: 20000420 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CALLMATE TELECOM INTERNATIONAL INC/WY CENTRAL INDEX KEY: 0001096857 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] IRS NUMBER: 593134518 STATE OF INCORPORATION: WY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-27773 FILM NUMBER: 605920 BUSINESS ADDRESS: STREET 1: 1 WILTON STREET STREET 2: BRAFORD ENGLAND BD5 OAX CITY: BRADFORD BUSINESS PHONE: 011441274301500 MAIL ADDRESS: STREET 1: 1 WILTON STREET STREET 2: BRADFORD ENGLAND BD5 0AX CITY: BRADFORD STATE: X0 FORMER COMPANY: FORMER CONFORMED NAME: ZEE INC DATE OF NAME CHANGE: 19991014 10QSB 1 QUARTERLY REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (Mark One) [x] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended - February 29, 2000 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from _______________ to _______________ Commission File Number: 000-27773 --------- CALLMATE TELECOM INTERNATIONAL, INC. ------------------------------------ (Exact name of small business issuer as specified in its charter) Florida 59-313-4518 ------- ----------- (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) 1 Wilton Street, Bradford, BD5 OAX, United Kingdom -------------------------------------------------- (Address of principal executive offices) 011 44 1274 301 500 ------------------- (Issuer's telephone number) ZEE, INC. --------- (Former name, former address and former fiscal year if changed since last report) Check whether the issuer (1) filed all reports required to be filed by Section 12, 13 or 15 (d) of the Exchange Act during the past 12 months (or 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 ____ ---- APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes ______ No ______ APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding of each of the issuer's classes of common equity, as of April 17, 2000: 14,200,000 ordinary shares, $ .001 par value. Transitional Small Business Disclosure Format (check one) Yes ____ No X -- FORM 10-QSB CALLMATE TELECOM INTERNATIONAL, INC. TABLE OF CONTENTS PAGE PART I. Financial Information Item 1. Financial Statements Consolidated Balance Sheet as of February 29, 2000 (Unaudited)...... 2 Consolidated Statements of Operations for the Three and Six Months Ended February 29, 2000 and February 28, 1999 (Unaudited)....... 3 Consolidated Statement of Changes in Stockholders' Deficit for the Six Months Ended February 29, 2000 (Unaudited).............. 4 Consolidated Statement of Cash Flows for the Six Months Ended February 29, 2000 and February 28, 1999 (Unaudited)............. 5 Notes to Consolidated Financial Statements.......................... 6 Item 2 Management's Discussion and Analysis or Plan of Operation................................................ 7 PART II. Other Information.......................................... 12 Item 1. Legal Proceedings. Item 6. Exhibits and Reports on Form 8-K Signatures........................................................... 13 -2- PART I Item 1. Financial Statements Callmate Telecom International, Inc. Consolidated Financial Statements Six Months Ended February 29, 2000 and February 28, 1999 (Unaudited) -1- Callmate Telecom International, Inc. Consolidated Balance Sheet February 29, 2000 (Unaudited) Assets Current assets: Cash and cash equivalents $ 1,468,405 Cash held in trust accounts 2,486,743 Restricted cash and cash equivalents 157,800 Accounts receivable, trade 590,752 Accounts receivable, related parties 9,694 Prepaid expenses and other current assets 961,569 ----------- Total current assets 5,674,963 Property and equipment, net of accumulated depreciation 1,497,163 Other assets 511,855 ----------- $ 7,683,981 =========== Liabilities and Stockholders' Deficit Current liabilities: Accounts payable $ 5,304,082 Accounts payable, related party 396,004 Advances from stockholders 2,150,610 Accrued expenses 28,947 Deferred revenue 505,076 ----------- Total current liabilities 8,384,719 ----------- Minority interest in consolidated subsidiary (97,137) ----------- Stockholders' deficit: Common stock; $.001 par value; 50,000,000 shares authorized; 14,200,000 shares issued and outstanding 14,200 Additional paid-in capital 846,800 Accumulated deficit (1,488,084) Accumulated other comprehensive income 23,483 ----------- Total stockholders' deficit (603,601) ----------- $ 7,683,981 =========== The accompanying notes are an integral part of the consolidated financial statements. -2- Callmate Telecom International, Inc. Consolidated Statements of Operations
Three Months Ended Six Months Ended ------------------ ---------------- February 29, February 28, February 29, February 28 --------------------------------------------------------------- 2000 1999 2000 1999 --------------------------------------------------------------- (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues $ 4,032,982 $3,931,227 $6,534,992 $8,355,333 Cost of revenues 3,850,344 3,215,271 5,527,643 6,835,518 ----------- ----------- ----------- ----------- 182,638 715,956 1,007,349 1,519,815 Selling, general and administrative expense 617,097 784,471 1,311,606 1,281,726 ----------- ----------- ----------- ----------- Loss from operations (434,459) (68,515) (304,257) 238,089 ----------- ----------- ----------- ----------- Other income: Other 5,942 23,167 ----------- ----------- ----------- ----------- Minority interest in loss of consolidated subsidiary 25,573 30,997 ----------- ----------- ----------- ----------- Loss before taxes (402,944) (68,515) (250,093) 238,089 ----------- ----------- ----------- ----------- Income taxes Net loss $ (402,944) (68,515) $ (250,093) 238,089 =========== =========== =========== =========== Basic and diluted earnings (loss) per share $(.03) $(.01) $(.02) $(.02) =========== =========== =========== =========== Weighted average number of common shares used in basic and diluted earnings (loss) per share computation 14,200,000 12,558,025 14,200,000 11,907,305 =========== =========== =========== ===========
The accompanying notes are an integral part of the consolidated financial statements. -3- Callmate Telecom International, Inc. Consolidated Statements of Changes in Stockholders' Deficit Six Months Ended February 29, 2000 (Unaudited)
Accumulated Additional Other Common Stock Paid-In Accumulated Comprehensive Shares Amount Capital Deficit Income ------ ------ ------- ------- ------ Balance, August 31, 1999 14,200,000 $ 14,200 $ 846,800 $ (1,237,991) $29,384 Foreign currency translation adjustment (unaudited) (5,901) Net loss for the period (unaudited) (250,093) --------- Balance, February 29, 2000 (unaudited) 14,200,000 $ 14,200 $ 846,800 $ (1,488,084) $ 23,483 ========== ======== ========= ============= ========
The accompanying notes are an integral part of the consolidated financial statements. -4- Callmate Telecom International, Inc. Consolidated Statements of Cash Flows
Six Months Ended ---------------------------- February 29, February 28, ------------- ------------- 2000 1999 ---------- ------------ (Unaudited) (Unaudited) Operating activities Net loss $ (250,093) $ 238,089 ---------- ------------ Adjustments to reconcile net (loss) income to net cash used by operating activities: Depreciation 137,288 47,759 Minority interest in net loss of subsidiary (30,997) Foreign currency translation adjustment (5,901) 15,591 Increase in: Accounts receivable 343,942 (1,476,835) Other receivables, related parties 54,358 38,420 Other assets (89,460) (267,255) Increase (decrease) in: Accounts payable (583,380) 2,813,344 Accounts payable, related parties 396,004 (23,706) Accrued expenses (45,483) (191,905) Deferred income (250,198) (336,438) ---------- ---------- Total adjustments (73,827) 618,975 ---------- ---------- Net cash (used) provided by operating activities (323,920) 857,064 ---------- ---------- Investing activities Change in restricted cash 3,066 3,220 Deposit on stock purchase and exchange agreement (500,000) Minority interest in equity of consolidated subsidiary (11,580) Acquisition of property and equipment (357,171) (396,283) ---------- ---------- Net cash used by investing activities (865,685) 393,063 ---------- ---------- Financing activities Proceeds from stockholder advances 493,018 ---------- ---------- Net (decrease) increase in cash (696,587) 464,001 Cash, beginning of period 2,164,992 1,013,506 ---------- ---------- Cash, end of period $1,468,405 $ 1,447,507 ========== ============
The accompanying notes are an integral part of the consolidated financial statements. Supplemental disclosure of non-cash financing activities: In November 1998, the company issued 1,500,000 shares of common stock valued at $150,000 for offering costs in connection with a private placement offering. -5- Callmate Telecom International, Inc. Notes to Consolidated Financial Statements Six Months Ended February 29, 2000 and February 28, 1999 (Unaudited) 1. Financial Statements In the opinion of management, all adjustments consisting only of normal recurring adjustments necessary for a fair statement of (a) the results of operations for the three- and six-month periods ended February 29, 2000 and February 28, 1999, (b) the financial position at February 29, 2000, and (c) cash flows for the six-month periods ended February 29, 2000 and February 28, 1999, have been made. The unaudited consolidated financial statements and notes are presented as permitted by Form 10-QSB. Accordingly, certain information and note disclosures normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles have been omitted. The accompanying consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the fiscal year ended August 31, 1999. The results of operations for the three- and six- month periods ended February 29, 2000 and February 28, 1999 are not necessarily indicative of those to be expected for the entire year. 2. Contingencies The Company is currently the plaintiff in a lawsuit filed against a former employee. The lawsuit, entitled Callmate Telecom International, Inc. vs. Selwyn Wilson, filed by the Company with the County Court Circular, alleges that the former employee embezzled an unspecified amount from the Company in March through May 1999. The trial date is scheduled for May 22, 2000. The outcome of the lawsuit is uncertain. -6- Item 2. Management's Discussion and Analysis or Plan of Operation The following discussion contains forward-looking statements and projections. Because these forward-looking statements and projections are based on a number of assumptions and are subject to significant uncertainties and contingencies, many of which are beyond the Callmate's control, there is no assurance that they will be realized, and actual results may vary significantly from those shown. Callmate Telecom International, Inc. cautions readers that in addition to important factors described elsewhere, the following important facts, among others, sometimes have affected, and in the future could affect, the Company's actual results, and could cause the Company's actual results during 2000 and beyond, to differ materially from those expressed in any forward-looking statements made by, or on behalf of, Callmate Telecom International, Inc. -7- INCOME STATEMENT DATA Three Months Ended Six Months Ended --------------------------- --------------------------- February 29, February 28, February 29, February 28, 2000 1999 2000 1999 --------------------------- --------------------------- Total revenue $ 4,032,982 $ 3,391,227 $ 6,534,992 $ 8,355,333 =========================== =========================== Net (loss) income $ (402,944) $ (68,515) $ (250,093) $ 238,089 =========================== =========================== (Loss) earnings per common share - basic and diluted $(.03) $(.01) $(.02) $.02 =========================== =========================== Shares used in per share computation 14,200,000 12,558,025 14,200,000 11,907,305 =========================== =========================== BALANCE SHEET DATA February 29, 2000 ------------ Total assets $ 7,953,859 ============ Working capital $(2,709,756) ============ Long-term debt $ 0 ============ Stockholders' deficit $ (603,601) ============ -8- RESULTS OF OPERATIONS Revenues - -------- Revenues for the three-month period ended February 29, 2000 totaled $4,032,982, an increase of three percent from the $3,931,227 of revenues for the comparable period in 1999. This increase is attributable to a reduced pricing policy on airtime sold. Revenues for the six-month period ended February 29, 2000 totaled $6,534,992, a 22 percent decrease over the $8,355,333 of revenues for the comparable period in 1999. Much of this decrease is attributable to a wider variety of products for sale in the comparable period. These included home use, cards, and wholesale. Currently, the majority of sales are home use. Cost of Sales - ------------- For the three months ended February 29, 2000, the cost of sales increased to $3,850,344 from the $3,215,271 of costs for the three months ended February 28, 1999. This increase is mainly due to the reduced pricing policy over the three-month period, which resulted in increased revenues at a lower margin. Gross profit margin decreased 13 percent for the three months ended February 29, 2000 to a gross profit margin of five percent from an overall gross profit margin of 18 percent for the three months ended February 28, 1999. This is principally attributable to the pricing policy for the three months to February 2000. The low margin policy reduced home account margins in the period. In conjunction with this effect in the previous period, cards and wholesale products were a greater proportion of the sales mix. Both cards and wholesale products operate at a higher margin. For the six months ended February 29, 2000, the costs of sales decreased to $5,527,643 from the $6,835,518 of costs for the six months ended February 28, 1999. This decrease is mainly due to the reduction in the volume of certain sale products offered. Sales have been geared toward home accounts in the period and the availability of cards and wholesale products has been restricted. This policy has reduced the related costs of sales since sales have reduced. Operating Expense - ----------------- Operating expenses for the three months ended February 29, 2000 were $617,097 as compared to $784,741 for the similar period last year. This 21 percent reduction of operating expenses is principally attributable to advertising and printing expenses in excess of $150,000 incurred in the comparable prior period when the Company undertook a large advertising campaign. Operating expenses for the six months ended February 29, 2000 were $1,311,606, or 20 percent of net sales. For the comparable period in 1999, operating costs amounted to $1,281,726, or 15 percent of net sales. The five percent increase is due to the advertising campaign undertaken during the period. Income Taxes - ------------ Due to the Company's history of operating losses, management has established a valuation allowance in the full amount of the deferred tax assets arising from these losses because management believes it is more likely than not that the Company will not generate sufficient taxable income within the appropriate period to offset these operating loss carryforwards. -9- Net Income - ---------- Net loss for the three months ended February 29, 2000 amounted to $402,944 as compared to a net loss of $68,515 for the three months ended February 28, 1999. This increase in the net loss is principally attributable to the reduced pricing policy in respect to airtime charges on home accounts during the period, which resulted in a lower margin. Net loss for the six months ended February 29, 2000 amounted to $250,093, as compared to net income of $238,089 for the comparable period in 1999. The decrease in income is primarily a result of a reduction in turnover to concentrate on the home account sales and a low margin pricing policy in the six months to February 29, 2000. Earnings Per Share - ------------------ For the three months ended February 29, 2000, basic and diluted loss per share amounted to $(.03). For the comparable period in 1999, basic and diluted loss per share amounted to $(.01). The increase in loss per share is due principally to the increase in net loss of $334,429. For the six months ended February 29, 2000, basic and diluted loss per share amounted to $(.02). For the comparable period in 1999, basic and diluted earnings per share amounted to $.02. This turnaround is due to the decrease in income to a loss of $250,093 for the six months ended February 29, 2000 from income of $238,089 for the six months ended February 28, 1999. LIQUIDITY AND CAPITAL RESOURCES Operating Activities - -------------------- For the six months ended February 29, 2000, net cash used by operating activities amounted to approximately $323,920, a decrease from the net cash provided by operating activities of $857,064 for the comparable period in 1999. The increase in cash used is primarily a result of a reduction in margins and turnover in comparison to the comparable period. Investment Activities - --------------------- The Company's investment activities include equipment purchases, deposits for stock purchases, and net changes in restricted cash. Net cash used by investing activities for the six months ended February 29, 2000 was approximately $865,685, as compared to net cash used by investing activities of approximately $393,063 for the comparable period in 1999. The increase in cash expended for investing activities is due primarily to a deposit of $500,000 for an exchange and stock purchase agreement in October 1999. -10- Financing Activities - -------------------- The Company's financing activities include proceeds from stockholder advances. Net cash of $493,018 was provided by financing activities for the six months ended February 29, 2000, as compared to no net cash provided by financing activities for the six months ended February 28, 1999. The increase in cash provided by financing activities results from proceeds received from stockholder advances. CAPITAL RESOURCES At February 29, 2000, the Company does not have any material commitments for capital expenditures other than for those expenditures incurred in the ordinary course of business. The Company believes that its current operations and cash balances will be sufficient to satisfy its currently anticipated cash requirements for the next 12 months. However, additional capital could be required in excess of the Company's liquidity, requiring it to raise additional capital through an equity offering, secured or unsecured debt financing. The availability of additional capital resources will depend on prevailing market conditions, interest rates, and the existing financial position and results of operations of the Company. -11- PART II. OTHER INFORMATION Item 2. Legal Proceedings. The Company is currently the plaintiff in a lawsuit filed against a former employee. The lawsuit, entitled Callmate Telecom International, Inc. vs. Selwyn Wilson, filed by the Company with the County Court Circular, alleges that the former employee embezzled an unspecified amount from the Company in March through June 1999. The trial date is scheduled for May 22, 2000. The outcome of the lawsuit is uncertain. Item 6. Exhibits and Reports on Form 8-K A. Exhibits Exhibit Description ------- ----------- 27 Financial Data Schedule B. Reports on Form 8-K 1. March 31, 2000, Current Report of Registrant reporting a change in control. No financial statements were filed as part of this report. 2. April 5, 2000, Current Report of Registrant reporting parent/subsidiary merger of Zee, Inc. with and into Callmate Telecom International, Inc. Audited financial statements of Callmate for the fiscal years ended August 31, 1998 and 1999 and the unaudited interim period ended November 1999 were filed as part of this report. In addition, pro forma financial statements reflecting the combined financial statements of Callmate and Zee, Inc. at November 1999 were also filed as part of this report. -12- SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CALLMATE TELECOM INTERNATIONAL. INC. By: /s/ Mahmoud Hashmi ------------------ Mahmoud Hashmi Chief Executive Officer -13- EX-27 2 FINANCIAL DATA SCHEDULE
5 6-MOS AUG-31-1999 FEB-29-2000 4,112,948 0 600,446 0 0 5,674,963 1,631,453 (134,290) 7,683,981 8,384,719 0 0 0 14,200 (617,801) 7,683,981 6,534,992 6,534,992 5,527,643 5,527,643 1,311,606 0 0 (250,093) 0 (250,093) 0 0 0 (250,093) (.02) (.02)
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