-----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, GynNaRWZ1h+877pkz7+g3/bqYld7LNjyKsSCRN8Ivc3wWQwvM5jDOf3iwcqOqZm4 7rBE8HMQTT0XApi4+Armkw== /in/edgar/work/20000724/0001021408-00-002313/0001021408-00-002313.txt : 20000921 0001021408-00-002313.hdr.sgml : 20000921 ACCESSION NUMBER: 0001021408-00-002313 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000531 FILED AS OF DATE: 20000724 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CALLMATE TELECOM INTERNATIONAL INC/WY CENTRAL INDEX KEY: 0001096857 STANDARD INDUSTRIAL CLASSIFICATION: [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: 677809 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 0001.txt 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 - May 31, 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 principalc 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 July 24, 2000: 14,200,000 ordinary shares, $ .001 par value. Transitional Small Business Disclosure Format (check one) Yes ____ No X --- Consolidated Financial Statements CALLMATE TELECOM INTERNATIONAL, INC. Nine Months Ended May 31, 2000 and 1999 (Unaudited) FORM 10-QSB CALLMATE TELECOM INTERNATIONAL, INC. TABLE OF CONTENTS
Page ---- PART I. Financial Information Item 1. Consolidated Financial Statements: Consolidated Balance Sheet........................................... 1 Consolidated Statements of Operations................................ 2 Consolidated Statement of Changes in Stockholders' Deficit........... 3 Consolidated Statements of Cash Flows................................ 4 Notes to Consolidated Financial Statements........................... 5-6 Item 2 Management's Discussion and Analysis or Plan of Operation....... 7-12 PART II. Other Information Item 1. Legal Proceedings............................................... 13 Item 6. Exhibits and Reports on Form 8-K Signatures................................................................ 14
Callmate Telecom International, Inc. Consolidated Balance Sheet May 31, 2000 (Unaudited)
Assets Current assets: Cash and cash equivalents $ 1,988,804 Cash held in trust accounts 944,743 Restricted cash and cash equivalents 149,680 Accounts receivable, trade 637,447 Prepaid expenses and other current assets 872,170 ----------- Total current assets 4,592,844 ----------- Property and equipment, net of accumulated depreciation 1,408,123 ----------- Other assets: Investments 195,000 Other 350,733 ----------- Total other assets 545,733 ----------- $ 6,546,700 =========== Liabilities and Stockholders' Deficit Current liabilities: Accounts payable $ 5,537,746 Accounts payable, related party 367,478 Advances from stockholders 803,610 Accrued expenses 418,732 Deferred revenue 535,002 ----------- Total current liabilities 7,662,568 ----------- 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 (2,139,210) Accumulated other comprehensive income 162,342 ----------- Total stockholders' deficit (1,115,868) ----------- $ 6,546,700 ===========
The accompanying notes are an integral part of the consolidated financial statements -1- Callmate Telecom International, Inc. Consolidated Statements of Operations
Three Months Ended Nine Months Ended ------------------------- ------------------------- May 31, May 31, May 31, May 31, 2000 1999 2000 1999 ----------------------------------------------------- (Unaudited) (Unaudited) (Unaudited) Unaudited) Revenues $ 5,245,830 $ 8,236,387 $11,780,822 $16,591,720 Cost of revenues 5,081,736 7,924,001 10,609,379 14,759,519 ----------------------------------------------------- 164,094 312,386 1,171,443 1,832,201 Selling, general and administrative expense 729,077 532,650 2,040,683 1,814,376 ----------------------------------------------------- (Loss) income from operations (564,983) (220,264) (869,240) 17,825 Other income 990 24,157 ----------------------------------------------------- Net (loss) income $ (563,993) $ (220,264) $ (845,083) $ 17,825 ===================================================== Basic and diluted (loss) earnings per share $ (.04) $ (.02) $ (.06) $ .00 ===================================================== Weighted average number of common shares used in basic and diluted (loss) earnings per share computation 14,200,000 13,740,043 14,200,000 12,524,931 =====================================================
The accompanying notes are an integral part of the consolidated financial statements -2- Callmate Telecom International, Inc. Consolidated Statements of Changes in Stockholders' Deficit Nine Months Ended May 31, 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 ($1,294,127) $ 30,960 Foreign currency translation adjustment (unaudited) 131,382 Net loss for the period (unaudited) (845,083) -------------------------------------------------------------- Balance, May 31, 2000 (unaudited) 14,200,000 $14,200 $ 846,800 ($2,139,210) $162,342 ==============================================================
The accompanying notes are an integral part of the consolidated financial statements -3- Callmate Telecom International, Inc. Consolidated Statements of Cash Flows
Nine Months Ended ------------------------- May 31, May 31, 2000 1999 ------------------------- (Unaudited) (Unaudited) Operating activities Net (loss) income $ (845,083) $ 17,825 ------------------------- Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation 204,350 160,815 Foreign currency translation adjustment 131,382 23,266 (Increase) decrease in: Cash held in trust 938,143 (1,095,225) Accounts receivable 297,247 39,140 Other receivables, related parties 64,052 (654,797) Other assets 161,061 105,298 Increase (decrease) in: Accounts payable (349,716) 2,799,628 Accounts payable, related party 367,478 (23,706) Accrued expenses 344,302 32,540 Deferred income (220,272) (375,277) ------------------------- Total adjustments 1,938,027 1,011,682 ------------------------- Net cash provided by operating activities 1,092,944 1,029,507 ------------------------- Investing activities Changes in restricted cash 11,186 3,290 Deposit on stock purchase and exchange agreement (500,000) Acquisition of property and equipment (335,193) (749,824) Purchase of investments (195,000) ------------------------- Net cash used by investing activities (1,019,007) (746,534) ------------------------- Financing activities Proceeds from stockholder advances 1,249,875 249,985 Repayments on stockholder advances (1,500,000) Proceeds from issuance of stock 850,000 ------------------------- Net cash (used) provided by financing activities (250,125) 1,099,985 ------------------------- Net (decrease) increase in cash and cash equivalents (176,188) 1,382,958 Cash and cash equivalents, beginning of period 2,164,992 1,013,506 ------------------------- Cash and cash equivalents, end of period $ 1,988,804 $ 2,396,464 =========================
Supplemental disclosure of noncash 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. The accompanying notes are an integral part of the consolidated financial statements -4- Callmate Telecom International, Inc. Notes to Consolidated Financial Statements Nine Months Ended May 31, 2000 and 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 nine-month periods ended May 31, 2000 and 1999, (b) the financial position at May 31, 2000, and (c) cash flows for the nine- month periods ended May 31, 2000 and 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 nine- month periods ended May 31, 2000 are not necessarily indicative of those to be expected for the entire year. 2. Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. However, the Company has sustained substantial losses for the nine months ended May 31, 2000 and the year ended August 31, 1999. In addition, the Company has negative working capital of approximately $3,070,000 at May 31, 2000 and its liabilities exceed its assets by approximately $1,116,000 at May 31, 2000. These factors raise substantial doubt about the Company's ability to continue as a going concern. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence. Management of the Company is currently seeking additional revenue sources and expanding their customer base to mitigate the above factors. 3. Acquisition of Investments During the three-month period ended May 31, 2000, the Company purchased a 25 percent investment in Infonet Financials. The Company also acquired a 50 percent investment in Telenet Communications Limited. These investments are being accounted for under the equity method of accounting. -5- Callmate Telecom International, Inc. Notes to Consolidated Financial Statements Nine Months Ended May 31, 2000 and 1999 (Unaudited) 4. 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 June 1999. The original trial date was scheduled for May 22, 2000, but has been postponed to an unspecified date. The outcome of the lawsuit still remains uncertain. 5. Subsequent Event On October 30, 1999, the Company entered into an exchange and stock purchase agreement with American Multicredit, Inc. (AMC), a Florida corporation, and Diaspora Finance Limited (Diaspora), a Nevis, West Indies corporation. The terms of the agreement called for the Company to purchase two shares of common stock of AMC at a cost of $250,000 per share. In addition, the Company was required to issue 3,500,000 shares of Class B common stock to the stockholders of AMC and Diaspora in exchange for 500 and 501 shares of common stock of AMC and Diaspora, respectively. As a result of the purchase and exchange, the Company would own a 50.1 percent interest in both AMC and Diaspora. The $500,000 paid by the Company to AMC as of May 31, 2000 has been reflected as a deposit and has been included in prepaid expenses and other current assets in the accompanying May 31, 2000 consolidated balance sheet. Subsequent to May 31, 2000, the agreement with AMC and Diaspora was cancelled and the Company received the full $500,000 back from AMC. -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. THIS FILING CONTAINS FORWARD-LOOKING STATEMENTS. THE WORDS "ANTICIPATED," "BELIEVE," "EXPECT," "PLAN," "INTEND," "SEEK," "ESTIMATE," "PROJECT," "WILL," "COULD," "MAY," AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. THESE STATEMENTS INCLUDE, AMONG OTHERS, INFORMATION REGARDING FUTURE OPERATIONS, FUTURE CAPITAL EXPENDITURES, AND FUTURE NET CASH FLOW. SUCH STATEMENTS REFLECT THE COMPANY'S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND FINANCIAL PERFORMANCE AND INVOLVE RISKS AND UNCERTAINTIES, INCLUDING, WITHOUT LIMITATION, GENERAL ECONOMIC AND BUSINESS CONDITIONS, CHANGES IN FOREIGN, POLITICAL, SOCIAL, AND ECONOMIC CONDITIONS, REGULATORY INITIATIVES AND COMPLIANCE WITH GOVERNMENTAL REGULATIONS, THE ABILITY TO ACHIEVE FURTHER MARKET PENETRATION AND ADDITIONAL CUSTOMERS, AND VARIOUS OTHER MATTERS, MANY OF WHICH ARE BEYOND THE COMPANY'S CONTROL, INCLUDING, WITHOUT LIMITATION, THE RISKS DESCRIBED UNDER THE CAPTION "BUSINESS." SHOULD ONE OR MORE OF THESE RISKS OR UNCERTAINTIES OCCUR, OR SHOULD UNDERLYING ASSUMPTIONS PROVE TO BE INCORRECT, ACTUAL RESULTS MAY VARY MATERIALLY AND ADVERSELY FROM THOSE ANTICIPATED, BELIEVED, ESTIMATED, OR OTHERWISE INDICATED. CONSEQUENTLY, ALL OF THE FORWARD- LOOKING STATEMENTS MADE IN THIS FILING ARE QUALIFIED BY THESE CAUTIONARY STATEMENTS AND THERE CAN BE NO ASSURANCE OF THE ACTUAL RESULTS OR DEVELOPMENTS. 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. INCOME STATEMENT DATA
Three Months Ended Nine Months Ended ------------------------- ------------------------- May 31, May 31, May 31, May 31, 2000 1999 2000 1999 ----------------------------------------------------- Total revenue $ 5,245,830 $ 8,236,387 $11,780,822 $16,591,720 ===================================================== Net (loss) income $ (563,993) $ (220,264) $ (845,083) $ 17,825 ===================================================== Loss per common share - basic and diluted $ (.04) $ (.02) $ (.06) $ .00 ===================================================== Shares used in per share computation 14,200,000 13,740,043 14,200,000 12,524,931 =====================================================
-7- BALANCE SHEET DATA
May 31, 2000 ----------- Total assets $ 6,546,700 =========== Working capital $(3,069,724) =========== Long-term debt $ 0 =========== Stockholders' deficit $(1,115,868) ===========
-8- RESULTS OF OPERATIONS REVENUES Revenues for the three-month period ended May 31, 2000 totaled $5,245,830, a decrease of 36 percent from the $8,236,387 of revenues for the comparable period in 1999. This decrease is attributable to the expansion into the European telephone card market that occurred during the three-month period ended May 31, 1999 was not repeated during the three-month period ended May 31, 2000. Revenues for the nine-month period ended May 31, 2000 totaled $11,780,822, a 29 percent decrease over the $16,591,720 of revenues for the comparable period in 1999. Much of this decrease is attributable to the expansion into the European telephone card market that occurred during the three-month period ended May 31, 1999 was not repeated during the current period, which significantly influenced revenues for the current nine-month period. COST OF REVENUES For the three months ended May 31, 2000, the cost of revenues decreased to $5,081,736 from the $7,924,001 of costs for the three months ended May 31, 1999. This decrease is mainly due to the expansion into the European market that only occurred during the three-month period ended May 31, 1999. Gross profit margin decreased one percent for the three months ended May 31, 2000 to a gross profit margin of three percent from an overall gross profit margin of four percent for the three months ended May 31, 1999. This is principally attributable to increasing competition in the telecommunications market, which has squeezed margins over the past year. For the nine months ended May 31, 2000, the cost of revenues decreased to $10,609,379 from the $14,759,519 of costs for the nine months ended May 31, 1999. This decrease is mainly due to the brief expansion into the European telephone card market that occurred during the three-month period ended May 31, 1999, as noted above. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Selling, general and administrative expenses for the three months ended May 31, 2000 were $729,077 as compared to $532,650 for the similar period last year. This 37 percent increase of selling, general and administrative expenses is principally attributable to an increase in rents paid during the three-month period ended May 31, 2000 that were not payable in the previous period, as well as increased administration costs due to the expansion of the company into Pakistan. -9- Selling, general and administrative expenses for the nine months ended May 31, 2000 were $2,040,683, or 17 percent of net revenues. For the comparable period in 1999, selling, general and administrative expenses amounted to $1,814,376, or 11 percent of net revenues. The six percent increase is due to a reduction in revenues during the three-month period ended May 31, 2000, in comparison to the prior period, without a comparable reduction in overhead costs. Overhead costs have increased despite the reduced revenues due to the company's expansion into Pakistan. -10- 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. NET INCOME Net loss for the three months ended May 31, 2000 amounted to $563,993 as compared to a net loss of $220,264 for the three months ended May 31, 1999. This increase in net loss is principally attributable to a reduction in revenues due to the company no longer operating in the European telecommunications card market, and the card market in general. This significantly reduced revenues during the current period. Net loss for the nine months ended May 31, 2000 amounted to $845,083 as compared to net income of $17,825 for the comparable period in 1999. The decrease in income is primarily the result of a reduction in revenues for the nine-month period ended May 31, 2000, largely due to the expansion into the European card market during the three-month period ended May 31, 1999, which was not repeated. In addition, there has been a reduction in gross profit margins in the market over the last year due to increased competition. EARNINGS PER SHARE For the three months ended May 31, 2000, basic and diluted loss per share amounted to $.04. For the comparable period in 1999, basic and diluted loss per share amounted to $.02. The increase in loss per share is due principally to the increase in net loss of $343,729. For the nine months ended May 31, 2000, basic and diluted loss per share amounted to $.06. For the comparable period in 1999, basic and diluted earnings per share amounted to $.00. This decrease is due to the decrease in income to a loss of $845,083 for the nine months ended May 31, 2000 from income of $17,825 for the nine months ended May 31, 1999. LIQUIDITY AND CAPITAL RESOURCES OPERATING ACTIVITIES For the nine months ended May 31, 2000, net cash provided by operating activities amounted to approximately $1,092,944, an increase from the net cash provided by operating activities of $1,029,507 for the comparable period in 1999. The increase in cash provided is primarily the result of a reduction in accounts receivable over the current period as card sales have been reduced to a smaller percentage of revenues. -11- INVESTMENT ACTIVITIES The Company's investment activities include equipment purchases, deposits for stock purchases, investments, and net changes in restricted cash. Net cash used by investing activities for the nine months ended May 31, 2000 was approximately $1,019,007 as compared to net cash used by investing activities of approximately $746,534 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, which has been refunded subsequent to May 31, 2000. FINANCING ACTIVITIES The Company's financing activities include proceeds from stockholder advances. Net cash of $250,125 was used by financing activities for the nine months ended May 31, 2000 as compared to net cash provided of $1,099,985 by financing activities for the nine months ended May 31, 1999. The decrease in cash provided by financing activities results from repayments on stockholder advances in the current period. CAPITAL RESOURCES At May 31, 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, combined with management seeking additional revenue sources and expanding their customer base, will be sufficient to satisfy its currently anticipated cash requirements for the next 12 months; however, no assurances can be given. 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. -12- 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 March 1999 through June 1999. The original trial date was scheduled for May 22, 2000 but has been postponed to an unspecified date. The outcome of the lawsuit still remains uncertain. Item 6. Exhibits and Reports on Form 8-K A. Exhibits Exhibit Description ------- ----------- 27 Financial Data Schedule B. Reports on Form 8-K None. -13- 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 -14- EX-27 2 0002.txt FINANCIAL DATA SCHEDULE
5 9-MOS AUG-31-1999 MAY-31-2000 1,988,804 0 637,447 0 0 4,592,844 1,821,126 413,003 6,546,700 7,662,568 0 0 0 14,200 (1,130,068) 6,546,700 11,780,822 11,780,822 10,609,379 10,609,379 2,040,683 0 0 (845,083) 0 (845,083) 0 0 0 (845,083) (.06) (.06)
-----END PRIVACY-ENHANCED MESSAGE-----