SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended December
31, 2001.
[ ] Transition report under Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from
to .
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Commission file number: 0-31417
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BOTTOMLINE HOME LOAN, INC.
(Exact name of small business issuer as specified in its charter)
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Nevada 88-0356064
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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200 South Los Robles Avenue, Suite 230, Pasadena California 91101
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(Address of principal executive office) (Zip Code)
(626) 432-1500
(Issuer's telephone number)
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 XX No
The number of outstanding shares of the issuer's common stock, $0.001 par value
(the only class of voting stock), as of February 13, 2002 was 16,039,000.
3
TABLE OF CONTENTS
PART I
ITEM 1. FINANCIAL STATEMENTS.................................................3
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION............4
PART II
ITEM 2. RECENT SALES OF UNREGISTERED SECURITIES..............................5
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.....................................5
SIGNATURES....................................................................6
INDEX TO EXHIBITS.............................................................7
[THIS SPACE HAS BEEN INTENTIONALLY LEFT BLANK]
PART I
ITEM 1...FINANCIAL STATEMENTS
As used herein, the term "Company" refers to Bottomline Home Loan, Inc., a
Nevada corporation, unless otherwise indicated. Unaudited, condensed interim
financial statements including a balance sheet for the Company as of the quarter
ended December 31, 2001 and statements of operations, and statements of cash
flows for the interim period up to the date of such balance sheet and the
comparable period of the preceding year and cumulative amounts are attached
hereto as Pages F-1 through F-8 and are incorporated herein by this reference.
[THIS SPACE HAS BEEN LEFT BLANK INTENTIONALLY]
F-2
BOTTOMLINE HOME LOAN, INC.
FINANCIAL STATEMENTS
DECEMBER 31, 2001
INDEX TO FINANCIAL STATEMENTS
Unaudited Balance Sheet as of December 31, 2001............................F-3-4
Unaudited Statement of Operations for the three and six
months ended December 31, 2001 and 2000......................................F-5
Unaudited Statement of Cash Flows for the three and six
months ended December 31, 2001 and 2000......................................F-6
Notes to Condensed Financial Statements....................................F-7-8
F-8
BOTTOMLINE HOME LOAN, INC.
(formerly known as CYBERENERGY, INC.)
Unaudited consolidated Balance Sheet
December 31, 2001
ASSETS
Current Assets
Cash $180,013
Marketable securities - trading 59,253
Mortgage loans held for sale, net 2,912,337
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Total Current Assets 3,151,603
Long-term Assets
Furniture and equipment, net 33,505
Note receivable 187,250
Deposits 5,172
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TOTAL ASSETS $3,377,530
See accompanying notes to financial statements
BOTTOMLINE HOME LOAN, INC.
Unaudited consolidated Balance Sheet
(continued)
December 31, 2001
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Current Liabilities
Accounts payable and accrued expenses $48,583
Payable to related party 8,154
Warehouse line of credit 2,782,275
Notes payable - current portion 20,443
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Total Current Liabilities 2,859,455
Long-Term Liabilities
Notes payable - net of current portion 196,210
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TOTAL LIABILITIES 3,055,665
MINORITY INTEREST 79,322
STOCKHOLDERS' EQUITY
Preferred stock - 5,000,000 shares
authorized at $0.001 par, none issued and 0
outstanding
Common stock - 100,000,000 shares
authorized at $0.001 par;
16,039,000 shares issued and outstanding 16,039
Paid in capital 719,759
Retained earnings (deficit) (493,255)
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TOTAL STOCKHOLDERS' EQUITY 242,543
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $3,377,530
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See accompanying notes to financial statements
BOTTOMLINE HOME LOAN, INC.
Unaudited consolidated Statements of
Operations for the three months and six months
ended December 31, 2001 and 2000
Quarter ended Quarter ended Six months ended Six months ended
December 31, December 31, Dec. 31, 2001 Dec. 31, 2000
2001 2000
--------------------- -------------------- ------------------- -------------------
Revenues $667,209 $458,247 $1,143,843 $717,609
Expenses
Salaries and direct loan costs 305,373 178,150 547,187 339,271
General and administrative costs 248,377 213,549 486,765 400,703
Total expenses 553,750 391,699 1,033,952 739,974
Net income (loss) from operations 113,459 66,548 109,891 (22,365)
Other income (expense)
Interest income - - 3,094 -
Interest expense (21,997) (14,904) (55,448) (32,358)
Unrealized gain (loss) on securities 25,425 - (7,290) (5,300)
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Total other income (expense) 3,428 (14,904) (59,644) (37,658)
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Income (loss) before minority
interest and tax provision 116,887 51,644 50,247 (60,023)
Minority share of (income) loss (28,587) - (17,071) -
Provision for income taxes - - - -
--------------------- -------------------- ------------------- -------------------
Net income (loss) $88,300 $51,644 $33,176 $ (60,023)
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Net income (loss) per common share $ 0.01 $ $ 0.00
Weighted average shares outstanding 16,039,000 16,039,000
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See accompanying notes to financial statements
BOTTOMLINE HOME LOAN, INC.
Unaudited consolidated Statements of Cash Flows
for the six months ended December 31, 2001 and 2000
Six months ended Six months ended
December 31, December 31,
Cash Flows from Operating Activities: 2001 2000
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Net Income (loss) $33,176 $(60,023)
Adjustments to reconcile net income (loss)
to net cash used for operating activities:
Loss on disposal of property - 15,612
Decrease (increase) in advances receivable 0 -
Decrease (increase) in mortgage loans held for sale (1,194,487) (219,752)
Increase (decrease) in accrued expenses (421) (7,872)
Increase (decrease) in minority interest 17,071 -
Increase (decrease) in warehouse line payable 1,130,331 246,810
Net Cash Provided by/(Used for) in Operating Activities (8,844) (12,624)
Cash Flows from Investing Activities:
Decrease (increase) in notes receivable (81,100) 4,804
Decrease (increase) in other investments 12,500 0
Net decrease (increase) in marketable securities 7,947 (70,551)
Net Cash Provided by/(Used for) Investing Activities (60,653) (65,747)
Cash Flows from Financing Activities:
Increase (decrease) in related party payables 8,154 -
Proceeds from long term debt 188,530 -
Principal payments on long term debt (8,846) (25,723)
Issuance of common stock for cash - 291,000
Issuance of subsidiary stock for cash 20,000 -
Receipt of dividends - 26,960
Net Cash Provided by/(Used for) Financing Activities 207,838 292,237
Net Increase(decrease) in Cash 138,341 213,866
Beginning Cash Balance 41,672 26,932
Ending Cash Balance $180,013 $240,798
================== ===================
See accompanying notes to financial statements
BOTTOMLINE HOME LOAN, INC.
Notes to Consolidated Financial Statements
December 31, 2001
NOTE 1 Summary of Significant Accounting Policies
Nature of Operations
The Company incorporated under the laws of the State of Nevada on
February 15, 1996 as CyberEnergy, Inc. The name of the Company was
changed to Bottomline Home Loan, Inc. on May 4, 2001. The Company was a
development stage company until June 26, 2001, when it acquired 76% of
the outstanding common stock of Bottomline Mortgage, Inc. The
transaction was accounted for as a reverse acquisition using the
purchase method of accounting. The Company assists individuals, brokers
and others in obtaining long term trust deed (mortgage) financing. The
Company processes loan applications, effects loan underwriting and
receives purchase commitments from investor groups for mortgage backed
loans prior to funding the loans, primarily at its corporate office in
Pasadena, California. Loan applications are also solicited and received
at office locations in Salt Lake City, Utah and San Marcos, Texas. The
Company is a non-supervised mortgagee, as defined by the U.S.
Department of Housing and Urban Development (HUD), and is therefore
required to conform to certain net worth, liquid assets and other
conditions and requirements and to follow certain specific regulations
issued from time to time by HUD.
Accounting Method
The accompanying financial statements have been prepared in accordance
with accounting principles generally accepted in the United States,
applicable to a going concern, which contemplates the realization of
assets and the liquidation of liabilities in the normal course of
business.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts
of Bottomline Home Loan, Inc. (formerly known as CyberEnergy, Inc.) and
its 76% subsidiary, Bottomline Mortgage, Inc. Minority interest
represents minority shareholders' proportionate share of the equity in
Bottomline Mortgage, Inc. All significant intercompany balances and
transactions are eliminated.
Net Income Per Common Share
Net income per common share is based on the weighted average number of
shares outstanding during the period. Weighted average number of shares
outstanding during the period was calculated as the number of common
shares of parent stock received in exchange for the then outstanding
common shares of Bottomline Mortgage, Inc.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted 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 disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Fiscal Year
The Company in 2001 adopted June 30 as its fiscal year end. Previous
financial statements of the Company have been issued based on a
December 31 fiscal year end.
Note 2 Unaudited Consolidated Financial Statements
The unaudited consolidated financial statements include the accounts of
the Company and include all adjustments (consisting of normal recurring
items), which are, in the opinion of management, necessary to present
fairly the financial position as of December 31, 2001 and the results
of operations and cash flows for the three months and six months ended
December 31, 2001. The results of operations for the three months and
six months ended December 31, 2001, are not necessarily indicative of
the results to be expected for the entire year.
Note 3 Basis of Presentation
The accompanying unaudited condensed financial statements have been
prepared by management in accordance with the instructions in Form
10-QSB and, therefore, do not include all information and footnotes
required by generally accepted accounting principles generally accepted
in the United States of America and should, therefore, be read in
conjunction with the Company's Form 10-KSB, filed with the Securities
and Exchange Commission. These statements do include all normal
recurring adjustments which the Company believes necessary for a fair
presentation of the statements. The interim operations results are not
necessarily indicative of the results for the full year ended June 30,
2002.
8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
Plan of Operations
Bottomline Home Loan, Inc. (fka Cyberenergy, Inc. named change filed in Nevada
on July 20, 2001) was formed under Nevada law on February 15, 1996. On June 26,
2001, Bottomline Home Loan, Inc. signed an agreement to acquire a 76% interest
in Bottomline Mortgage, Inc. in exchange for 10,000,000 of the common shares of
the Company or a 62% interest of the issued and outstanding shares of its common
stock. Bottomline Mortgage, Inc. then became an operating subsidiary of the
Company effective as of July 1, 2001. The executive office is located at 200
South Los Robles Avenue, Suite 230, Pasadena, California 91101, and our
telephone number is (800) 520-5626. The registered statutory office in Nevada is
located at 711 S. Carson Street, Suite 1, Carson City, Nevada 89701. We use the
terms "Company" and "we" in this report to refer to Bottomline Home Loan, Inc.,
unless the context indicates otherwise.
Bottomline's operations are conducted primarily through its subsidiary
Bottomline Mortgage, Inc. Bottomline is an independent retail mortgage banking
company engaged in the business of originating and selling residential mortgage
loans. Bottomline offers a broad array of residential mortgage products targeted
at high-credit-quality borrowers over the Internet, as well as through 8
commission-compensated loan originators. Bottomline operates from a principal
office in Pasadena, California and a call center in San Marcos, Texas to service
the 20 states in which it is currently approved to originate mortgages.
Bottomline operates primarily as a mortgage banker, underwriting, funding and
selling its loan products to various buyers. In the year 2000, Bottomline
Mortgage, Inc. originated approximately $17.3 million in loans, of which 48.8%
were first mortgages and 51.2% were second mortgages made to owners seeking to
refinance property they already owned. Bottomline Mortgage, Inc. originated and
closed approximately $33.2 million in loans during 2001, of those 85% were first
mortgages and the balance of 15% were second mortgages made to owners seeking to
refinance property they already owned. Our revenues increased significantly
during the past six months due to the opening of the San Marcos, Texas call
center in June of 2001 and recent interest rate cuts. Revenues for the six
months ended December 31, 2001 were 59% higher than they were for the six months
ended December 31, 2000. Total revenues for the six months ended December
31,200l were $1,143,843 verus $717,609 for the same period during 2000. Our net
income/(loss) for the six months ended December 31, 2001 and December 31, 2000
was $33,176 and ($60,023) respectively. The number of actual mortgages funded
during this six months period was up 28.7%, from 129 loans in 2000 to 166 during
the same six-month period in 2001.
Bottomline Mortgage, Inc. was founded in 1989. Bottomline has focused on growing
its origination volume through the construction of a retail origination network
as a result of internal growth and through operation of an Internet mortgage web
site, www.bottomlinemortgage.com. -
The operations of the Company are more fully set forth in the 10-KSB filed on
September 21, 2001.
Results Of Operations
The Company's results of operations for the periods described below are not
necessarily indicative of results of operations for future periods, which depend
upon numerous factors including the Company's ability in the future to enter new
markets and introduce additional and new products into its markets.
Three months ending December 31, 2000 and 2001
Revenues for the three months ended December 31, 2001 increased 46%to $667,209,
as compared to revenue of $458,247 for the three months ended December 31, 2000
due to growth in the number of loans written during the quarter.
General, and administrative expenses were $248,377 for the three months ended on
December 31, 2001 and $213,549 for the comparable period in 2000, an increase of
$34,828 or approximately 16%. The increase was primarily a result of the
expansion of loan activity.
Net income for the quarters ended December 31, 2001 and 2000 was $88,300 and
$51,644 respectively; an increase of 71%. As a percentage of revenue, net income
for the three month period ended December 31, 2001, as compared to the same
period in 2000 increased approximately 2% from 11% in 2000 to 13% in 2001. The
increase in revenues over the comparable period can be attributed to an increase
in loan activity.
Liquidity and Capital Resources
The Company had ending cash balance of $180,013 at December 31, 2001, as
compared to $41,672 at June 30, 2001 (year-end).
Total stockholders' equity in the Company was $242,543 as of December 31, 2001,
compared to a stockholder's equity of $194,167 as of June 30, 2001 (year-end).
Cash flows used by operations was $8,844 for the six months ended December 31,
2001 as compared to cash flows used by operations of $12,624 for the comparable
period in 2000.
Cash flows used in investing activities was $60,653 for the six months ended
December 31, 2001 as compared to cash flows used in investing activities of
$65,747 for the comparable period in 2000.
PART II
ITEM 1 LEGAL PROCEEDINGS
There have been no material changes in the status of legal proceedings as
reported in the Company's 10-KSB as filed on September 21, 2001.
ITEM 2 RECENT SALES OF UNREGISTERED SECURITIES
There have been no sales of unregistered securities since the filing of the
Company's 10-KSB as filed on September 21, 2001.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits Exhibits required to be attached by Item 601 of
Regulation S-B are listed in the Index to Exhibits on page 6 of
this Form 10-QSB, and are incorporated herein by this reference.
(b) Reports on Form 8-K. No reports on Form 8-K were filed during the
quarter.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, hereunto duly
authorized, this 14 day of February, 2002.
BOTTOMLINE HOME LOAN, INC.
/s/ Buster Williams, Jr.
---------------------------
Buster Williams. Jr.
CEO and Director
INDEX TO EXHIBITS
EXHIBIT PAGE
NO. NO. DESCRIPTION
3(i) * Articles of Incorporation of the Company (incorporated
herein by reference from Exhibit No. 3(i) of the Company's
Form 10-SB as filed with the Securities and Exchange
Commission on August 30, 2000).
3(ii) * Bylaws of the Company, as amended (incorporated herein by
reference from Exhibit 3(ii) of the Company's Form 10-SB as
filed with the Securities and Exchange Commission on August
30, 2000).
* Incorporated herein by reference from the referenced filings previously made
by the Company.