UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended February 28, 2001
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 000-27773
BANKENGINE TECHNOLOGIES, INC.
(Formerly known as Callmate Telecom International, Inc.)
(Exact name of registrant as specified in its charter)
Florida 59-3134518
- ------- -------------------
(State of (I.R.S. Employer
incorporation) Identification No.)
725 Port St. Lucie Blvd., Suite 201, Port St. Lucie, FL, 34984
(Address of principal executive offices, including zip code)
(888) 672-5935
(Registrant's telephone number, including area code)
Check 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, and (2) has been subject to such filing requirements for
the past 90 days. Yes |X| No |_|
The number of shares outstanding of the registrant's Common Stock,
$.001 Par Value, on May 18, 2001, was 17,115,893 shares.
BANKENGINE TECHNOLOGIES, INC.
(formerly known as Callmate Telecom International, Inc.)
FEBRUARY 28, 2001 QUARTERLY REPORT ON FORM 10-QSB/A
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Page Number
Item 1. Financial Statements...............................................................4
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.........................................................9
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.................................................................12
Item 2. Changes in Securities and Use of Proceeds.........................................12
Item 3. Defaults Upon Senior Securities...................................................12
Item 4. Submission of Matters to a Vote of Security Holders...............................12
Item 5. Other Information.................................................................12
Item 6. Exhibits and Reports on Form 8-K..................................................12
2
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-QSB/A contains forward-looking
statements as defined by the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include statements concerning plans, objectives,
goals, strategies, future events or performance and underlying assumptions and
other statements, which are other statements of historical facts. These
statements are subject to uncertainties and risks including, but not limited to,
product and service demand and acceptance, changes in technology, economic
conditions, the impact of competition and pricing, government regulation, and
other risks defined in this document and in statements filed from time to time
with the Securities and Exchange Commission. All such forward-looking statements
are expressly qualified by these cautionary statements and any other cautionary
statements that may accompany the forward-looking statements. In addition,
BankEngine Technologies, Inc. (the "Company") disclaims any obligations to
update any forward-looking statements to reflect events of circumstances after
the date hereof.
3
BANKENGINE TECHNOLOGIES, INC.
(Formerly Callmate Telecom International, Inc.)
(Successor to WebEngine Technologies Inc.)
Revised Consolidated Balance Sheet
As of February 28, 2001
(Amounts Expressed in US Dollars)
(Unaudited)
ASSETS
Current
Cash 235,830
Accounts receivable 13,834
Prepaid expenses and sundry 5,266
----------
254,930
CAPITAL, net of accumulated depreciation 9,002
----------
263,932
==========
LIABILITIES
Current
Accounts payable 1,454
Income taxes payable 50,000
Loans to stockholders 126,830
-------
178,284
-------
STOCKHOLDERS' EQUITY
Common stock; $.001 par value;
50,000,000 shares authorized;
17,115,893 shares issued and outstanding 107,076
Accumulated deficit (36,009)
Accumulated other comprehensive income 14,581
----------
85,648
----------
263,932
==========
The accompanying notes are an integral part of these consolidated financial
statements.
4
BANKENGINE TECHNOLOGIES, INC.
(Formerly Callmate Telecom International, Inc.)
(Successor to WebEngine Technologies Inc.)
Revised Consolidated Statement of Operations
For the periods ended February 28, 2001 and 2000
(Amounts Expressed in US Dollars)
(Unaudited)
Three months ended Six months ended
February 28, February 28,
2001 2000 2001 2000
Revenues 135,026 0 295,057 195,528
Cost of revenues 26,940 30,881 51,062 91,679
------ ------ ------ ------
Gross profit 108,086 (30,881) 243,995 103,849
Selling, general and administrative expenses 34,735 16,576 156,237 111,083
------ ------ ------- -------
Net income (loss) 73,351 (47,457) 87,758 (7,234)
====== ======== ====== =======
Net income (loss) per common share 0.00 (0.00) 0.00 (0.00)
---- ------ ----- -----
Weighted average number of
Common shares outstanding 15,069,536 12,000,000 13,526,289 12,000,000
---------- ---------- ---------- ----------
The accompanying notes are an integral part of these consolidated financial
statements.
5
BANKENGINE TECHNOLOGIES, INC.
(Formerly Callmate Telecom International, Inc.)
(Successor to WebEngine Technologies Inc.)
Revised Consolidated statements of changes in Stockholders Equity
For the periods ended February 28, 2001
(Amounts Expressed in US Dollars)
(Unaudited)
Accumulated
Common Stock Accumulated other
Shares Amount deficit comprehensive
income
Balance, August 31, 2000 12,000,000 130 (123,767)
Shares issued on acquisition 5,115,893 106,946
Net income for the period 87,758
Foreign currency translation
adjustment 14,581
---------- ------- -------- ------
Balance, February 28, 2001 17,115,893 107,076 (36,009) 14,581
========== ======= ======== ======
The accompanying notes are an integral part of these consolidated financial
statements.
6
BANKENGINE TECHNOLOGIES, INC.
(Formerly Callmate Telecom International, Inc.)
(Successor to WebEngine Technologies Inc.)
Revised Consolidated Statement of Cash Flows
For the periods ended February 28, 2001 and 2000
(Amounts Expressed in US Dollars)
(Unaudited)
Six months ended
February 28,
2001 2000
OPERATING ACTIVITIES
Net income (loss) 87,758 (7,234)
Adjustments to reconcile net income (loss)
to net cash used by operating activities
Depreciation 1,048 1,173
(Increase) decrease in accounts receivable 28,282 (10,769)
Increase in income taxes payable 50,000 --
-------- --------
Net cash provided by (used in) operating activities 167,088 (16,830)
-------- --------
Financing activities
Issuance of capital stock 106,946 --
Repayment of loans (89,989) --
-------- --------
16,957 --
-------- --------
Increase (decrease) in cash 184,045 (16,830)
Cash, beginning of period 51,785 94,743
-------- --------
Cash, end of period 235,830 77,913
======== ========
The accompanying notes are an integral part of these consolidated financial
statements
7
BANKENGINE TECHNOLOGIES, INC.
(Formerly Callmate Telecom International, Inc.)
(Successor to WebEngine Technologies Inc.)
Revised Notes to Consolidated Financial Statements
As of February 28, 2001 and 2000
(Amounts Expressed in US Dollars)
(Unaudited)
1. FINANCIAL STATEMENTS
On January 5, 2001, Callmate Telecom International Inc. (Callmate)
acquired all of the issued and outstanding shares of common stock of
WebEngine Technologies, Inc. in exchange for 12,000,000 common shares of
Callmate in a reverse acquisition. 9,200,000 common shares of Callmate
held by a shareholder were cancelled in exchange for all of the UK
operations of Callmate. The acquisition by the shareholders of WebEngine
of a majority of the shares of Callmate has been accounted for as a
reverse acquisition. As Callmate became substantially a shell after the
removal of the UK operations, no goodwill has been reflected on this
acquisition. Although Callmate is the legal acquirer, WebEngine is
treated as having acquired Callmate for accounting purposes. The
historical financial statements of the Company are those of WebEngine.
The shareholders equity has been restated to reflect the net asset
value in the amount of $107,076 attributable to the remaining common
stock of Callmate of 5,115,893 shares. Cash of $157,076 previously
omitted in error has been reflected in these consolidated financial
statements.
The estimated income tax costs of the divestiture of the UK operations,
in the amount of $50,000, has been treated as a reduction of the assets
acquired on the acquisition of the shell company.
The financial statements of Callmate as at November 30, 2000 reflected
the transaction as a pooling of interest on the basis of an agreement
dated November 23, 2000. The closing date of the agreement was January
5, 2001 and this has been reflected in the current financial statements.
On March 5, 2001 the company changed its name to BankEngine
Technologies Inc.
2. BASIS OF PRESENTATION
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 six-month periods ended February 28, 2001 and
2000, (b) the financial position at February 28, 2001, and (c) cash
flows for the six-month periods ended February 28, 2001 and 2000, have
been made. The results of operations for the six-month period ended
February 28, 2001 are not necessarily indicative of those to be expected
for the entire year.
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 accounting principles generally accepted in
the United States of America have been omitted.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
8
Callmate Telecom International, Inc. ("Callmate") acquired WebEngine
Technologies International, Inc. ("WebEngine") pursuant to a Share Purchase
Agreement effective as of January 5, 2001. Callmate acquired all 12,000,000
shares of common stock of WebEngine in a share exchange, which exchange was
effected on a one-for-one basis. The transaction was reported on a Form 8-K
filed with the Securities and Exchange Commission (the "SEC") on January 16,
2001. Subsequent thereto, Callmate changed its name to BankEngine Technologies,
Inc. (the "Company") as reported on Schedule 14C. The Company filed the
Definitive 14C on March 5, 2001.
The Company decided to move away from the telecom business due to the increased
competitiveness in this sector internationally and growing indebtedness. The
trend internationally in the telecom sector is for consolidation and competition
from transnational corporations continues to be fierce. Many competitors have
since ceased operations.
The strategic decision to shed the telecom business in the UK, while canceling
9.2 million shares as part of the original payment for the telecom assets, both
alleviated most of the debt burden of the company and reduced the outstanding
share capital. The Company has chosen to focus solely on the business of acting
as a solution provider for the purposes of processing online transactions for
online merchants. The Company's previous acquisition of Cyberstation Inc. and
its access to BankEngine suite of software was fortuitous and should help the
company secure sufficient market share. The software product is mature and
adaptable.
The Company will thus attempt to provide its BankEngine suite (the "BankEngine
Suite") of electronic commerce banking products for Internet merchants and
financial institutions. The Company's product will provide systems that allow
merchants to process payments and screen against fraud and banks to manage their
merchants and screen against fraud. BankEngine is able to support merchants and
merchant banks worldwide.
BankEngine has been providing online electronic transactions and fraud
prevention since 1996. The BankEngine Suite consists of a complete, turnkey
suite of secure electronic commerce banking solutions for Internet merchants and
financial institutions. The BankEngine suite includes: CertEngine(TM),
CardEngine(TM), CheqEngine(TM), ATMEngine(TM), BankEngine(TM), BankWeb(TM) and
BankAdmin(TM).
The BankEngine suite encompasses a wide range of activities including credit
card processing, electronic check processing, electronic cash & debit cards,
electronic bank transfers, bank account management, accounting, secure PKI
authentication including electronic signatures, and 2048 bit TLS encryption.
Using the Internet to bridge the gap between merchants and banks, BankEngine
currently supports merchants and merchant banks worldwide. BankEngine supports
member banks in Canada, United States, Central American, Caribbean, Western
Europe, Australia, and Asia Pacific, and supports 173 different currencies.
Merchants are issued merchant accounts from their choice of BankEngine enabled
member banks and can perform transactions with their accounts using the
Internet, regardless of where in the world they are located. Merchants can
easily integrate BankEngine client software into their automated Internet
servers and use BankEngine for their manual & batch processing.
In addition, BankEngine client software works with any type of Internet
connection, and runs on multiple operating systems including Win32
(95/98/2000/NT) and most flavors of Unix, under a variety of computer hardware.
BankEngine client software can be used with any programming language. BankEngine
is powerful enough and robust enough to allow each merchant to transact
simultaneously from multiple Internet computers, multiple manual operators, and
multiple batches. BankEngine protects the secrecy of each and every transaction
and report synchronization, using its military grade security, which includes
PKI authentication and 2048 bit TLS cryptography.
9
Results of Operations
THREE MONTHS ENDED FEBRUARY 28, 2001 COMPARED TO THREE MONTHS ENDED FEBRUARY 28,
2000
Revenues
Revenue for the three-month period ended February 28, 2001 totaled $135,026, an
increase of 100% from the comparable period in 2000. This increase is
attributable to acquisition of WebEngine Technologies Inc. and the revenues
included within its wholly-owned subsidiary Cyberstation Inc.
Cost of Revenues
For the three months ended February 28, 2001, the cost of revenues decreased to
$26,940 from $30,881 for the three months ended February 28, 2000. This decrease
is mainly due to the decision to decrease advertising and marketing activity in
the telecom area.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the three months ended February
28, 2001 were $34,735 as compared to $16,576 for the similar period in 2000. The
110% increase in selling, general and administrative expenses is principally
attributable to changes required during the acquisition of WebEngine
Technologies Inc.
Net Income
Net income for the three months ended February 28, 2001 amounted to $73,351 as
compared to a net loss of $47,457 for the three months ended February 28, 2000.
This increase in net income is principally attributable to the income inherent
in the acquisition of WebEngine Technologies Inc. and a decrease in spending in
the telecom business.
SIX MONTHS ENDED FEBRUARY 28, 2001 COMPARED TO SIX MONTHS ENDED FEBRUARY 28,
2000
Revenues
Revenue for the six-month period ended February 28, 2001 totaled $295,057, an
increase of 51% from the $195,528 in revenue for the comparable period in 2000.
This increase is attributable to aggressive pricing in the telecom area as well
as the acquisition of WebEngine Technologies Inc.
Cost of Revenues
For the six months ended February 28, 2001, the cost of revenues decreased to
$51,062 from $91,679 for the six months ended February 28, 2000. This decrease
is mainly due to a lack of spending in marketing and advertising in the telecom
business.
10
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the six months ended February
28, 2001 were $156,237 as compared to $111,083 for the similar period in 2000.
The 41% increase in selling, general and administrative expenses is principally
attributable to activities involved with the acquisition of WebEngine
Technologies Inc. and consolidation of activities.
Net Income
Net income for the six months ended February 28, 2001 amounted to $87,758 as
compared to a net loss of $7,234 for the six months ended February 28, 2000.
This increase in net income is principally attributable to the income inherent
in the acquisition of WebEngine Technologies Inc. and its subsidiary.
LIQUIDITY AND CAPITAL RESOURCES
Operating Activities
For the six months ended February 28, 2001, net cash provided by operating
activities amounted to $167,088, an increase from the net cash used by operating
activities of $16,830 for the comparable period in 2000. The increase in cash
provided by operating activities in primarily the result of the decision to
diminish spending in the areas of marketing and advertising in the telecom
business with the company decided to abandon.
Financing Activities
At February 28, 2001, 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 or 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 1. LEGAL PROCEEDINGS
Not applicable.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS IN SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) 10. Material Contracts.
Common Stock Purchase Agreement executed January 19, 2001, filed with
the Commission as an exhibit to the Form QSB on May 21, 2001, and
amended hereby, which Common Stock Purchase Agreement is hereby
incorporated by reference.
19. Reports Furnished to Security Holders
Definitive Schedule 14C filed with the Commission on March 6, 2001,
which Schedule 14C is hereby incorporated by reference.
(b) Reports on Form 8-K.
The Company filed a report on Form 8-K on January 16, 2001.
12
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
BankEngine Technologies, Inc.
Dated: July 16, 2001 By: /s/ Joseph Alves
-------------------------------------
Joseph Alves
Chairman and Chief Executive Officer
13
EXHIBIT INDEX
10. Common Stock Purchase Agreement*
19. Definitive Schedule 14C filed on March 6, 2001 filed by Callmate*
*Incorporated by reference
1