SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB/A
AMENDMENT No. 1
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 2001
Commission file number: 0-26813
iCALL SYSTEMS, INC.
-------------------
(Exact Name of Registrant as Specified in Its Charter)
Nevada 91-1932068
------ ----------
(State of Incorporation) (IRS Employer ID No.)
2764 Lake Sahara Drive, Suite 115, Las Vegas, NV 89117
------------------------------------------------------
Address of Principal Executive Offices - Zip Code
(702) 851-2768
--------------
Registrant's telephone number, including area code
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 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 X No
--- ---
As of June 30, 2001, there were 5,012,000 shares of the Issuer's common
stock outstanding.
INDEX
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Balance Sheets as of June 30, 2001
(unaudited) and December 31, 2000................................ 3
Unaudited Statements of Operations for the six
months ended June 30, 2001 and 2000
and from Oct 13, 1999 (inception)................................ 4
Unaudited Statements of Cash Flows for the nine
months ended June 30, 2001 and 2000............................... 5
Notes to Unaudited Interim Financial Statements..................... 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS......................... 12
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS........................................... 15
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS................... 15
ITEM 3. DEFAULTS UPON SENIOR SECURITIES............................. 15
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS......... 15
ITEM 5. OTHER INFORMATION........................................... 15
ITEM 6. EXHIBIT AND REPORTS ON FORM 8-K............................. 15
EXHIBITS.................................................... 15
REPORTS ON FORM 8-K......................................... 16
SIGNATURES.................................................. 16
iCALL SYSTEMS, INC.
(formerly Altrex Incorporated)
(a development stage company)
BALANCE SHEETS
(UNAUDITED)
PART 1 FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BALANCE SHEETS
June 30, December 31,
2001 2000
- --------------------------------------------------------------------------
(Unaudited)
(Restated -
See Note 3)
ASSETS
CURRENT
Cash and cash equivalents $ 4,139 $ -
ADVANCES TO INTERNET CALLCENTRE PTE LTD (Note 4 $ 1 $ -
----------------------
$ 4,140 $ -
======================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
CURRENT
Accounts payable and accrued liabilities $ 24,903 -
Convertible notes payable (Note 5) 475,000 -
----------------------
499,903 -
----------------------
COMMITMENTS AND CONTINGENCIES (Notes 1 and 8)
STOCKHOLDERS' EQUITY (DEFICIENCY)
Capital Stock (Note 6)
Authorized:
75,000,000 common shares with $0.001 par value
Issued and outstanding: 5,012,000 (December 31,
2000 - 25,000,000) shares 512 2,500
Additional paid-in capital 6,988 5,000
Deficit accumulated during development stage (503,263) (7,500)
-----------------------
(495,763) -
-----------------------
$ 4,140 $ -
=======================
The accompanying notes are an integral part of these interim financial
statements.
-3-
iCALL SYSTEMS, INC.
(formerly Altrex Incorporated)
(a development stage company)
INTERIM STATEMENTS OF OPERATIONS
(Unaudited)
October 20,
1998
Three months ended Six months ended (inception)
to
June 30 June 30 June 30,
2001 2000 2001 2000 2001
- --------------------------------------------------------------------------
(Restated - see Note 3) (Note 1)
EXPENSES
Accounting and
Legal $ 13,958 $ - $ 13,958 $ - $ 13,958
Consulting 30,263 - 20,263 - 30,263
General and
Administrative 1,772 - 1,772 - 9,272
Interest 6,223 - 9,787 - 9,787
Investor relations 10,934 - 10,934 - 10,934
Travel 33,050 - 33,050 - 33,050
Write down of
advances (Note 4) 56,000 - 395,999 - 395,999
-------------------------------------------------
NET LOSS FOR THE PERIOD $(152,200) $ - $(495,763) $ - $(503,263)
===================================
BASIC NET LOSS
PER SHARE $ (0.006) $(0.00) $ (0.02) $(0.00)
=====================================
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 23,682,110 25,000,000 24,337,414 25,000,000
===========================================
The accompanying notes are an integral part of these interim financial
statements.
-4-
iCALL SYSTEMS, INC.
(formerly Altrex Incorporated)
(a development stage company)
INTERIM STATEMENTS OF CASH FLOWS
(Unaudited)
October 20,
1998
Six months ended (inception) to
June 30 June 30,
2001 2000 2001
- --------------------------------------------------------------------------
(Restated - see Note 3) (Note 1)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period $ (495,763) $ - $ (503,263)
Adjustments to reconcile net loss
to net cash used in operating
activities
- accrued interest on convertible
notes 9,787 - 9,787
- write down of advances (Note 4) 395,999 - 395,999
- accounts payable 15,116 - 15,116
---------------------------------
CASH USED IN OPERATING ACTIVITIES (74,861) - (82,361)
---------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
- advances to Internet CallCentre
Pte Ltd (396,000) - (396,000)
---------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES (396,000) - (396,000)
---------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
- proceeds from convertible notes
payable 475,000 - 475,000
- proceeds from issuance of common
shares - - 7,500
--------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES 475,000 - 482,500
--------------------------------
INCREASE IN CASH AND CASH EQUIVALENTS 4,139 - 4,139
CASH AND EQUIVALENTS, BEGINNING OF PERIOD - - -
--------------------------------
CASH AND EQUIVALENTS, END OF PERIOD $ 4,139 $ - $ 4,139
================================
The accompanying notes are an integral part of these interim financial
statements.
-5-
NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION
- -------------------------------------------------------
iCALL Systems, Inc. was incorporated as Altrex Inc. on October 20, 1998,
under the laws of the State of Nevada. The Company changed its name to
iCALL Systems, Inc. on January 22, 2001.
The Company is in its development stage and to date its activities have
been limited to capital formation and investigating business opportunities.
By agreement dated November 22, 2000 between the Company and the
shareholders of The Internet Call Centre Pte Ltd ("ICCP"), the Company
agreed to acquire all the issued and outstanding shares of ICCP in exchange
for the issuance of 6,500,000 restricted common shares, subject to certain
conditions and completion of due diligence. In conjunction with this
agreement, certain shareholders agreed to return 19,988,000 restricted
common shares to treasury for cancellation. ICCP is a private Singapore
company, which is facilitating real-time sales and customer service for
companies doing business on the Internet. During 2001, the Company advanced
a total of $396,000 to ICCP to develop its business, however, as the
Company subsequently determined not to proceed with this acquisition, the
agreement was not consummated and the share exchange did not occur. During
October 2001, the parties mutually agreed to formally rescind the November
22, 2000 acquisition agreement. As a result, the Company never legally
owned the shares of ICCP. Accordingly, the interim financial statements as
at June 30, 2001 and for the six months then ended have been restated to
reflect the rescission agreement. The previously issued financial
statements were prepared on a consolidated basis and reflected the
acquisition of ICCP as a reverse merger.
By agreement dated July 30, 2001, the Company acquired the business and
assets of 1st Call Pte Ltd., a Singapore-based call center provider. The
Company plans to engage in the strategic combining of call center providers
into a larger organization, or network, which can effectively compete with
regional and national service providers.
The interim financial statements have been prepared on the basis of a going
concern, which contemplates the realization of assets and satisfaction of
liabilities in the normal course of business. At June 30, 2001, the Company
has a working capital deficiency of $495,764 and has incurred losses since
inception, raising substantial doubt as to the Company's ability to
continue as a going concern. The Company's continued operations are
dependent on its ability to obtain additional financing, settling its
outstanding debts and ultimately to attain profitable operations.
Unaudited Interim Financial Statements
The accompanying unaudited interim financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB of
Regulation S-B. They do not include all information and footnotes required
by generally accepted accounting principles for complete financial
statements. However, except as disclosed herein, there have been no
material changes in the information disclosed in the notes to the financial
statements for the year ended December 31, 2000 included in the Company's
Annual Report on Form 10-KSB filed with the Securities and Exchange
-6-
Commission. The interim unaudited financial statements should be read in
conjunction with those financial statements included in the Form 10-KSB. In
the opinion of Management, all adjustments considered
necessary for a fair presentation, consisting solely of normal recurring
adjustments, have been made. Operating results for the six months ended
June 30, 2001 are not necessarily indicative of the results that may be
expected for the year ending December 31, 2001.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ---------------------------------------------------
Basis of presentation
The accompanying financial statements are presented in United States
dollars and are prepared in accordance with accounting principles generally
accepted in the United States.
Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles 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 revenue and expenses for
the periods that the financial statements are prepared. Actual amounts
could differ from these estimates.
Cash and cash equivalents
Cash and cash equivalents consists of cash on deposit and highly liquid
short-term interest bearing securities with maturities at the date of
purchase of three months or less.
Financial instruments
The Company's financial instruments include cash and cash equivalents,
accounts payable, accrued liabilities and convertible notes payable. The
fair values of these financial instruments approximate their carrying
values. Management believes that the fair value of the debt approximates
its carrying value.
Net Loss per Common Share
Basic earnings per share includes no dilution and is computed by dividing
income available to common stockholders by the weighted average number of
common shares outstanding for the period. Dilutive earnings per share
reflect the potential dilution of securities that could share in the
earnings of the Company. The accompanying presentation is only of basic
loss per share as the potentially dilutive factors are anti-dilutive to
basic loss per share.
Foreign currency transactions
The financial statements are presented in United States dollars. In
accordance with Statement of Financial Accounting Standards No. 52,
"Foreign Currency Translation", foreign denominated monetary assets and
liabilities are translated to their United States dollar equivalents using
foreign exchange rates that prevailed at the balance sheet date. Revenue
and expenses are translated at average rates of exchange during the year.
-7-
Related translation adjustments are reported as a separate component of
stockholders' equity, whereas gains or losses resulting from foreign
currency transactions are included in results of operations.
Income taxes
The Company follows the liability method of accounting for income taxes
whereby future tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective
tax balances. Future tax assets and liabilities are measured using enacted
or substantially enacted tax rates expected to apply to the taxable income
in the years in which those differences are expected to be recovered or
settled. The effect on future tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the date of
enactment or substantive enactment. A valuation allowance is provided for
deferred tax assets if it is more likely than not that the Company will not
realize the future benefit, or if the future deductibility is uncertain.
Stock-based compensation
The Company accounts for stock-based employee compensation arrangements in
accordance with the provisions of Accounting Principles Board Opinion No.
25, "Accounting for Stock Issued to Employees", ("APB No. 25") and complies
with the disclosure provisions of Statement of Financial Accounting
Standard No. 123 "Accounting for Stock-Based Compensation" ("SFAS No.
123"). Under APB No. 25, compensation expense is recognized based on the
difference, if any, on the date of grant between the estimated fair value
of the Company's stock and the amount an employee must pay to acquire the
stock. Compensation expense is recognized immediately for past services and
pro-rata for future services over the option-vesting period.
The Company accounts for equity instruments issued in exchange for the
receipt of goods or services from other than employees in accordance with
SFAS No. 123 and the conclusions reached by the Emerging Issues Task Force
in Issue No. 96-18, "Accounting for Equity Instruments That Are Issued to
Other Than Employees for Acquiring or in Conjunction with Selling Goods or
Services" ("EITF 96-18"). Costs are measured at the estimated fair market
value of the consideration received or the estimated fair value of the
equity instruments issued, whichever is more reliably measurable. The value
of equity instruments issued for consideration other than employee services
is determined on the earlier of a performance commitment or completion of
performance by the provider of goods or services as defined by EITF 96-18.
NOTE 3 - RESTATEMENT
- --------------------
The previously issued financial statements were prepared on a consolidated
basis and reflected the acquisition of ICCP as a reverse merger whereby the
purchase method of accounting was used with ICCP being treated as the
accounting parent (acquirer) and the Company being treated as the
accounting subsidiary (acquiree). The acquisition was never completed, as
described in Note 1, and as a result the financial statements have been
restated to eliminate the net assets and operations of ICCP. In addition,
the outstanding common shares have been modified to eliminate the 6,500,000
common shares to be issued to effect the acquisition. The following
represents the significant changes from the previously issued financial
statements:
-8-
Six months
Six months ended June
ended June 30, 2001
30, 2001 Previously
Restated Reported
---------------------------
Total Assets $ 4,140 $ 498,542
===========================
Total Liabilities $ 499,903 $ 797,497
===========================
Shareholders' Equity
Capital Stock $ 512 $ 8,848,886
Additional paid-in capital 6,988 211,803
Translation reserve - 21,204
Accumulated deficit (503,263) (9,380,848)
---------------------------
Total Shareholders' Equity $ (495,763) $ (298,955)
===========================
Number of shares issued and outstanding 5,012,000 11,627,000
===========================
Revenues and other income $ - $ 91,471
============================
Total expenses 495,763 928,095
============================
Net Loss $ (495,763) $ (836,624)
============================
Basic net loss per share $ (0.02) $ (0.07)
============================
Weighted average common shares outstanding 23,682,110 11,512,000
============================
NOTE 4 - ACQUISITION OF BUSINESS ASSETS OF 1ST CALL PTE LTD.
- ------------------------------------------------------------
On July 30, 2001, the Company acquired all of the business assets of 1st
Call Pte Ltd ("1st Call"), a Singapore-based call center provider of
outsourced customer interactive services in Asia, in exchange for 478,261
shares of restricted common stock of the Company valued at $1.50 per share
for a purchase price of $717,391.
NOTE 5 - ADVANCES TO ICCP
- -------------------------
During 2001, the Company made non-interest bearing advances to ICCP in
anticipation of an acquisition. Due to the uncertainty of recovery of these
-9-
advances, the Company has made an impairment provision resulting in a loss
of $395,999 for the six months ended June 30, 2001. Subsequent to the
period, the Company advanced a further $136,500. In accordance with the
terms of the rescission agreement, ICCP has agreed to issue 311,842 shares
of preferred "A" stock of ICCP to the Company in settlement of these
advances.
NOTE 6 - CONVERTIBLE NOTES PAYABLE
- ----------------------------------
During the period, the Company signed convertible notes in the amount of
$440,000 with Update Ltd. ("Update"). The notes bear simple annual interest
at 6%, with principal and interest due by March 29, 2002. The notes give
Update the option of converting into restricted common shares at a
conversion price equal to the lesser of 75% of the average closing price
for the five trading days prior to conversion or $1.25 per share. In the
event of a default (interest not paid or debenture not paid at maturity),
interest will continue to accrue on the total amount then due at an annual
interest rate of 12% plus a collection fee of $10,000.
Also, on June 19, 2001, the Company signed a convertible note for an
additional $35,000 with Update. This note has a ten-month term with simple
annual interest at 6%, payable monthly. The note gives Update the option of
converting into restricted common shares at a conversion price equal to the
lesser of 60% of the average closing price for the five trading days prior
to conversion or $1.25 per share. In the event of a default (interest not
paid or debenture not paid at maturity), interest will continue to accrue
on the total amount then due at an annual interest rate of 12% plus a
collection fee of $10,000.
All of the notes contain a restriction on future financings that the
Company shall not issue common stock for a price of less than $1.50 without
the written permission of Update for as long as any principal remains
outstanding. Refer to Note 9.
NOTE 7 - CAPITAL STOCK
- ----------------------
For the period from inception (October 13, 1999) to June 30, 2001, changes
in capital stock were as follows:
Additional
Paid-in
Number Amount Capital Total
---------------------------------------
Issued to founders at inception 2,000,000 $ 2,000 $ (2,000) $ -
Issued for cash at $0.015 500,000 500 7,000 7,500
---------------------------------------
Balance, December 31, 1998
and 1999 2,500,000 2,500 5,000 7,500
Forward stock split 10 for 1 22,500,000 - - -
----------------------------------------
Balance, December 31, 2000 25,000,000 $ 2,500 $ 5,000 $ 7,500
-10-
Returned to treasury and
Cancelled 19,988,000 (1,988) 1,988 -
----------------------------------------
Balance, June 30, 2001 5,012,000 $ 512 $ 6,988 $ 7,500
=========================================
On July 30, 2001, the Company acquired all of the business assets of 1st
Call Pte Ltd ("1st Call"), a Singapore-based call centre provider of
outsourced customer interactive services in Asia, in exchange for 478,261
shares of restricted common stock of the Company valued at $1.50 per share
for a purchase price of $717,391. Refer to Note 9.
NOTE 8 - RELATED PARTY TRANSACTIONS
- -----------------------------------
During the period consulting fees totalling $30,263 were paid to three
officers and directors of the Company.
NOTE 9 - COMMITMENTS AND CONTINGENCIES
- --------------------------------------
Interest rate risk exposure
The Company has limited exposure to any fluctuation in interest rates.
Foreign exchange risk
The Company is subject to foreign exchange risk for sales and purchases
denominated in foreign currencies. Foreign currency risk arises from the
fluctuation of foreign exchange rates and the degree of volatility of these
rates relative to the United States dollar. The Company does not actively
manage this risk.
NOTE 10 - SUBSEQUENT EVENTS
- ---------------------------
On July 1, 2001, the Company signed a convertible note for an additional
$50,000 with Update. This note has a ten-month term with simple annual
interest at 6%, payable monthly. The note gives Update the option of
converting into restricted common shares at a conversion price equal to the
lesser of 60% of the average closing price for the five trading days prior
to conversion or $1.25 per share. In the event of a default (interest not
paid or debenture not paid at maturity), interest will continue to accrue
on the total amount then due at an annual interest rate of 12% plus a
collection fee of $10,000.
On October 3, 2001, the Company signed a convertible note for $40,000 with
Update. The note has a ten-month term with simple annual interest at 6%,
payable monthly. The note gives Update the option of converting into
restricted common shares at a conversion price equal to the lesser of 60%
of the average closing price for the five trading days prior to conversion
or $1.25 per share. In the event of a default (interest not paid or
debenture not paid at maturity), interest will continue to accrue on the
total amount then due at an annual interest rate of 12% plus a collection
-11-
fee of $15,000. Further, the Company pledged all of the assets as
collateral for the loan. The Company also agreed to file a General
Securities Agreement ("GSA"), or GSA-equivalent, to register this security
claim.
All of the notes contain a restriction on future financings that the
Company shall not issue common stock for a price of less than $1.50 without
the written permission of the Lender for as long as any principal remains
outstanding.
On July 30, 2001, the Company acquired all of the business assets of 1st
Call. The business operations and assets of 1st Call were initially
integrated with the operations of ICCP. During the fourth quarter, the
assets and operations were relocated to separate premises as part of the
terms of the ICCP rescission. Accordingly, no revenue or expenses relating
to the operations of 1st Call will be included until the fourth quarter
financial statements.
OVERVIEW
Restatement of Financial Statements as at June 30, 2001
By agreement dated November 22, 2000 between the Company and the
shareholders of The Internet Call Centre Pte Ltd ("ICCP"), the Company
agreed to acquire all the issued and outstanding shares of ICCP in exchange
for the issuance of 6,500,000 restricted common shares, subject to certain
conditions and completion of due diligence. ICCP is a private Singapore
company, which is facilitating real-time sales and customer service for
companies doing business on the Internet. During 2001, the Company decided
not to proceed with this acquisition, the agreement was not consummated and
the share exchange did not occur. During October 2001, the parties mutually
agreed to formally rescind the November 22, 2000 acquisition agreement. As
a result, the Company never legally owned the shares of ICCP. Accordingly,
the interim financial statements as at June 30, 2001 and for the six months
then ended have been restated to reflect the rescission agreement. The
previously issued financial statements were prepared on a consolidated
basis and reflected the acquisition of ICCP as a reverse merger.
This Quarterly Report on Form 10-QSB/A is being filed with the Securities
and Exchange Commission as Amendment No. 1 to our Quarterly Report on Form
10-QSB filed on August 30, 2001 to amend and restate our June 30, 2001
interim financial statements. Financial results contained herein reflect
the fact that this acquisition did not take place as reported in the
Company's 8K filed November 6, 2001.
When our original Quarterly Report was filed on August 30, 2001, this
acquisition was accounted for as a reverse merger whereby the purchase
method of accounting was used with ICCP being treated as the accounting
parent (acquirer) and iCALL being treated as the accounting subsidiary
(acquiree). As a result of the application of the accounting treatment as
described above, the June 30, 2001 interim financial statements have been
restated to reflect only the operations of the Company.
-12-
The Company is in its development stage and to date its activities have
been limited to capital formation and investigating business opportunities.
The Company plans to engage in the strategic combining of call center
providers into a larger organization, or network, which can effectively
compete with regional and national service providers.
ICCP is a private Singapore company which is facilitating real-time sales
and customer service for companies doing business on the Internet. During
2001, the Company made non-interest bearing advances to ICCP in
anticipation of an acquisition. Due to the uncertainty of recovery of these
advances, the Company has made an impairment provision resulting in a loss
of $395,999 for the six months ended June 30, 2001.
In the three months ending March 31, 2001, the Company has financed its
operations principally through cash generated by convertible loans and the
Company raised $440,000 through such loans.
The Company maintains a cash balance that it believes will not sustain
operations into the third quarter of 2001. The Company continues to explore
all possibilities in securing financing sufficient to sustain operations,
complete the launch of its Value Added Reseller (VAR) program, and proceed
with call center acquisitions.
The Company faces considerable risk in completing each of its business plan
steps, including, but not limited to: a lack of funding or available credit
to continue development and undertake product and services rollout; a lack
of interest in its solutions in the market on the part of eCommerce
companies, resellers of the Company's VAR program or other customers;
and/or a shortfall of funding due to an inability to raise capital in the
securities market. Since further funding is required, and if none is
received, the Company would be forced to rely on its existing cash in the
bank or secure short-term loans. This may hinder the Company's ability to
complete its product and services development until such time as necessary
funds could be raised. In such a restricted cash flow scenario, the
Company would delay all cash intensive activities including certain product
development and strategic initiatives described above.
RESULTS OF OPERATIONS
The Company did not carry out any operations during 2000. Therefore,
comparisons of its second quarter 2001 and 2000 operating results are not
meaningful.
Accounting and legal expenses for the six months ended June 30, 2001 were
$13,958. These expenses consisted of costs associated with general
bookkeeping, accounting reviews, and legal assistance in evaluating
business opportunities.
Consulting consisted of compensation for officers and directors of the
company who focused on seeking suitable acquisition companies, developing
business plans, financial pro formas and fund raising activities.
Consulting expenses for the six months ended June 30, 2001 were $30,263.
-13-
General and administrative expenses consist primarily of rent, telephone
and fax and other office expenses. General and administrative expenses for
the six months ended June 30, 2001 were $1,772.
Interest for the six months ended June 30, 2001 was $9,787 consisting of
accrued interest on the Company's convertible notes.
Investor relations for the six months ended to June 30, 2001 consisted of
profiling the Company in investment papers and the professional services
of investment relations firms and personnel. During the period, expenses
for investor relations activities were $10,934.
Travel for the six months ended June 30, 2001 consisted of trips to Asia
including Singapore, Malaysia and the Philippines where the Company
evaluated multiple business opportunities. The Company also traveled to
Western Europe where the Company evaluated business opportunities and met
with potential investors. Through the six-month period, travel expenses
were $33,050.
Write down of advances for the six months ended June 30, 2001 were
$395,999 and consisted only of advances made to The Internet CallCentre
Pte Ltd, due to the uncertainty of the recovery of these advances, the
Company has made an impairment provision resulting in the write down.
Accounting and legal expenses for the three months ended June 30, 2001
were $13,958. These expenses consisted of costs associated with general
bookkeeping, accounting reviews, and legal assistance in evaluating
business opportunities.
Consulting consisted of compensation for officers and directors of the
Company who focused on seeking suitable acquisition companies, developing
business plans, financial pro formas and fund raising activities.
Consulting expenses for the three months ended June 30, 2001 were $30,263.
General and administrative expenses consist primarily of rent, phone and
fax and other office expenses. General and administrative expenses for the
three months ended June 30, 2001 were $1,772.
Interest for the three months ended June 30, 2001 was $6,223 consisting of
accrued interest on the Company's convertible notes.
Investor relations for the three months ended June 30, 2001 consisted of
profiling the Company in investment papers and the professional services
of investment relations firms and personal. During the period, expenses
for investor relations were $10,934.
Travel for the three months ended June 30, 2001 consisted of several trips
to Asia, including Singapore, Malaysia and the Philippines, where the
Company evaluated multiple business opportunities. Travel expenses were
$33,050.
Write down of advances for the three months ended June 30, 2001 were
$56,000 and consisted only of advances made to The Internet CallCentre Pte
Ltd. Due to the uncertainty of the recovery of these advances, the Company
has made an impairment provision resulting in the write down.
-14-
LIQUIDITY AND CAPITAL RESOURCES
In six months ended June 30, 2001, the Company has financed operations
principally through cash generated by convertible loans. Through June 30,
2001, the Company raised a total of $440,000 in such loans.
Net cash used in operating activities was $74,861 for the six months ended
June 30, 2001 and consisted primarily of net operating losses, increase in
accounts payable and accrued expenses.
The Company anticipates that its current cash and cash equivalents and
cash generated from operations, if any, will not be sufficient to satisfy
its liquidity requirements for at least the next 12 months. The Company
will require additional funds prior to such time and will seek to sell
additional equity or debt securities or seek alternative sources of
financing. If the Company is unable to obtain this additional financing,
it may be required to reduce the scope of its planned sales and marketing
and product development efforts, which could harm its business, financial
condition and operating results. In addition, the Company may require
additional funds in order to fund more rapid expansion, to develop new or
enhanced services or products or to invest in complementary businesses,
technologies, services or products. Additional funding may not be
available on favorable terms, if at all.
During the period, and as part of the restructuring and reorganizing of
the Company, 19,988,000 restricted common shares were returned to treasury
for cancellation without consideration.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
-15-
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a)All exhibits required to be filed herein are incorporated by reference
to Registrant's Form 10-SB, previously filed with the Commission on
August 30, 2001.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
iCALL SYSTEMS, INC.
Dated: February 15, 2002 /s/ Marc Crimeni
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Marc Crimeni
CEO
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