UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB/A
(Mark One)
[X] Annual Report to Section 13 or 15(d) of the Securities Exchange Act of
1934
For the Fiscal Year ended August 31, 2001.
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _____________to______________
Commission File No. 000-27773
BANKENGINE TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
(Formerly known as Callmate Telecom International, Inc.)
Florida 59-313-4518
---------------------------------------------- ----------------
(State or other jurisdiction of Incorporation) (I.R.S. Employer
Identification No.)
725 Port St. Lucie Blvd., Suite 103, Port St. Lucie, FL, 34984
--------------------------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: (888) 672-5935.
Securities registered pursuant to Section 12(b) of the Act:
Title of each Class Name of each Exchange on which Registered
------------------- -----------------------------------------
Not Applicable None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.001 Par Value
------------------------------
(Title of Class)
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 prior 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 [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB.
Yes [ ] No [X]
The issuer's net sales for the most recent fiscal year were $121,423.
The aggregate market value of the voting stock held by non-affiliates
based upon the last sale price on January 10, 2001 was approximately $168,026.79
As of January 11, 2002 there were 17,115,893 shares of Common Stock,
par value $0.001 per share, outstanding.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This amendment to the annual report on Form 10-KSB/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 than 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 which may accompany the forward
looking statements. BankEngine Technologies, Inc. disclaims any obligations to
update any forward-looking statements to reflect events or circumstances after
the date hereof.
EXPLANATORY NOTE
For purposes of this Amendment No. 1 (this "Amendment") to the annual
report on Form 10-KSB, for the period ending August 31, 2001 (the "Annual
Report"), and in accordance with Rule 12b-15 under the Securities Exchange Act
of 1934, as amended, BankEngine Technologies, Inc. hereby amends and restates
Item 7 of Part II of the Annual Report. In order to preserve the nature and
character of the disclosures set forth in the Annual Report, this Amendment does
not reflect events occurring after the filing of the Annual Report, or modify or
update those disclosures in any way, except to amend and restate Item 7 of Part
II. This Amendment should be read in conjunction with the Annual Report
Item 7. Financial Statements
REPORT OF INDEPENDENT AUDITORS TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF
BANKENGINE TECHNOLOGIES, INC.
We have audited the accompanying revised consolidated balance sheets of
BankEngine Technologies, Inc. (formerly Callmate Telecom International, Inc,
successor to Webengine Technologies, Inc.), (incorporated in Florida) as of
August 31, 2001 and 2000 and the related revised consolidated statements of
operations, cash flows and changes in stockholders' equity for each of the years
ended August 31, 2001 and 2000. These revised consolidated financial statements
are the responsibility of the company's management. Our responsibility is to
express an opinion on these revised consolidated financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing standards
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall consolidated financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, these revised consolidated financial statements referred to
above present fairly, in all material respects, the revised consolidated
financial position of BankEngine Technologies, Inc. as of August 31, 2001 and
2000 and the revised consolidated results of its operations and its cash flows
for each of the years ended August 31, 2001 and 2000 in conformity with
generally accepted accounting principles in the United States of America.
Schwartz Levitsky Feldman LLP
Chartered Accountants
Toronto, Ontario
December 3, 2001, except for notes 1, 8, 10, and 13
which are as of December 27, 2001
BANKENGINE TECHNOLOGIES, INC.
(Formerly Callmate Telecom International, Inc.)
(Successor to WebEngine Technologies, Inc.)
Revised Consolidated Balance Sheet
As of August 31, 2001 and 2000
(Amounts Expressed in US Dollars)
2001 2000
$ $
ASSETS
Current
Cash and cash equivalents 256,370 63,567
Funds held on deposit 291,907 0
Accounts receivable 7,033 78,997
Prepaid expenses and sundry 5,614 571
-------- --------
560,924 143,135
CAPITAL ASSETS, net of accumulated depreciation 12,223 9,736
-------- --------
573,147 152,871
-------- --------
LIABILITIES
Current
Accounts payable 355,735 30,878
Income taxes payable 50,000 0
Loans from stockholders 123,187 116,691
-------- --------
528,922 147,569
-------- --------
STOCKHOLDERS' EQUITY
Common stock 130 130
Additional paid in capital 448,176 212,719
Accumulated deficit (391,755) (209,314)
Accumulated other comprehensive income (loss) net of tax (12,326) 1,767
-------- --------
44,225 5,302
-------- --------
573,147 152,871
-------- --------
The accompanying notes are an integral part of these consolidated financial
Statements.
Approved on behalf of the Board
BANKENGINE TECHNOLOGIES, INC.
(Formerly Callmate Telecom International, Inc.)
(Successor to WebEngine Technologies, Inc.)
Revised Consolidated Statement of Operations
For the years ended August 31, 2001 and 2000
(Amounts Expressed in US Dollars)
2001 2000
$ $
Revenue 121,423 241,496
Cost of revenues 68,596 146,427
----------- -----------
Gross profit 52,827 95,069
----------- -----------
Selling, general and administrative expenses 232,405 216,506
Depreciation 2,863 2,018
----------- -----------
235,268 218,524
----------- -----------
Net income (loss) (182,441) (123,455)
----------- -----------
Net income (loss) per common share (0.01) (0.01)
Weighted average number of
Common shares outstanding 15,410,595 12,000,000
The accompanying notes are an integral part of these consolidated financial
statements.
BANKENGINE TECHNOLOGIES, INC.
(Formerly Callmate Telecom International, Inc.)
(Successor to WebEngine Technologies, Inc.)
Revised Consolidated statements of changes in Stockholders Equity
For the years ended August 31, 2001 and 2000 (Amounts Expressed in US Dollars)
Common Stock Accumulated
-------------------- Additional Accumulated Comprehensive Other Comprehensive
Shares Amount Paid in Deficit Income (Loss) Income (Loss)
Capital
$ $ $ $ $
Balance, August 31, 1999 12,000,000 130 335,321 (85,859) --
Cancellation of shares (122,602)
Net loss for the year (123,455) (123,455)
Foreign currency translation
Adjustment 1,767 1,767
--------------------------------------------------------------------------------------
Balance, August 31, 2000 12,000,000 130 212,719 (209,314) (121,688) 1,767
Shares issued on acquisition 5,115,893 235,457
Net loss for the year (182,441) (182,441)
Foreign currency translation
Adjustment (14,093) (14,093)
--------------------------------------------------------------------------------------
Balance, August 31, 2001 17,115,893 130 448,176 (391,755) (196,534) (12,326)
--------------------------------------------------------------------------------------
The accompanying notes are an integral part of these consolidated financial
statements.
BANKENGINE TECHNOLOGIES, INC.
(Formerly Callmate Telecom International, Inc.)
(Successor to WebEngine Technologies, Inc.)
Revised Consolidated Statement of Cash Flows
For the years ended August 31, 2001 and 2000
(Amounts Expressed in US Dollars)
2001 2000
$ $
OPERATING ACTIVITIES
Net (loss) (182,441) (123,455)
-------- --------
Adjustments to reconcile net (loss)
to net cash used by operating activities
Depreciation 2,863 2,018
(Increase) decrease in accounts receivable 73,540 76,420
Decrease in funds on deposit 303,006 --
(Increase) decrease in prepaid expenses and sundry assets (5,387) 1,317
Increase (decrease) in accounts payable 10,706 21,865
-------- --------
Total adjustments 384,728 101,620
-------- --------
Net cash provided by (used in) operating activities 202,287 (21,835)
-------- --------
Investing activities
Acquisition of capital assets (5,896) (5,243)
-------- --------
Net cash (used in) investing activities (5,896) (5,243)
-------- --------
Financing activities
Advances (repayment) of loans 11,531 (4,946)
-------- --------
Net cash provided by (used in) financing activities 11,531 (4,946)
-------- --------
Effects of changes in Foreign currency rates (15,119) 848
-------- --------
Increase (decrease) in cash 192,803 (31,176)
Cash and cash equivalents, beginning of year 63,567 94,743
-------- --------
Cash and cash equivalents, end of year 256,370 63,567
-------- --------
Interest paid Nil Nil
Income taxes paid Nil Nil
The accompanying notes are an integral part of these consolidated financial
statements
BANKENGINE TECHNOLOGIES, INC.
(FORMERLY CALLMATE TELECOM INTERNATIONAL, INC.)
(SUCCESSOR TO WEBENGINE TECHNOLOGIES, INC.)
NOTES TO REVISED CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 2001 and 2000
(AMOUNTS EXPRESSED IN US DOLLARS)
1. REVISIONS TO CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements have been revised to include an
additional accounts payable in the amount of $170,000. This amount has
been claimed by the former auditors of the company and as discussed in
note 10, the company is disputing the amount outstanding. Previously,
the capital stock issued amount was reported as $405,457. This amount
has been reduced by $170,000 to $235,457.
2. BASIS OF PRESENTATION
On January 5, 2001, Callmate Telecom International, Inc. (Callmate)
acquired all of the issued and outstanding shares of common stock of
WebEngine Technologies, Inc.(WebEngine) in exchange for 12,000,000
common shares of Callmate in a reverse acquisition. 9,200,000 common
shares of Callmate held by previous shareholders of Callmate were
cancelled in exchange for all of the shares of its subsidiaries which
carry on 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. Callmate has been accounted for as the
successor to WebEngine.
WebEngine was incorporated in November 2000 in order to hold the shares
of Cyberstation Computers and Support Inc.(Cyberstation) The
shareholders of Cyberstation became the shareholders of WebEngine and
therefore WebEngine has been considered to be a successor to
Cyberstation.
The historical financial statements of BankEngine are those of
Cyberstation as the company has been accounted for as the successor to
Cyberstation.
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 and has been included
in income taxes payable.
On March 5, 2001 the company changed its name to BankEngine
Technologies, Inc.
Subsequent to the year end, WebEngine changed its name to Critical
Commerce Inc.
The acquisition of Callmate, as a reverse acquisition, was reflected as
follows;
Funds on deposit $601,457
Accounts payable (316,000)
Income taxes payable (50,000)
--------
Capital stock issued $235,457
--------
During the year, a portion of the funds on deposit have been received.
BANKENGINE TECHNOLOGIES, INC.
(FORMERLY CALLMATE TELECOM INTERNATIONAL, INC.)
(SUCCESSOR TO WEBENGINE TECHNOLOGIES, INC.)
NOTES TO REVISED CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 2001 and 2000
(AMOUNTS EXPRESSED IN US DOLLARS)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a) Principal business activities
The company carries on the business of computer consulting and
software development, through its wholly owned subsidiary
Cyberstation, a company operating in Canada.
b) Basis of consolidated financial statement presentation
The consolidated financial statements include the accounts of
the company and its wholly-owned subsidiaries. The earnings of
the subsidiaries are included from the date of acquisition for
acquisitions accounted for using the purchase method. All
significant inter-company accounts and transactions have been
eliminated.
c) Revenue
1) The company provides computer consulting services in
a number of areas including database management,
on-line transaction processing and e-mail
capabilities. Revenue is recognized as pre-determined
milestones are accomplished and consulting services
delivered.
2) The company earns fees based on transaction
processing. The revenue is recognized as the
transaction which give rise to the revenue, are
recorded.
3) In December 1999, the Securities and Exchange
Commission ("SEC") issued Staff Accounting Bulletin
No. 101 ("SAB 101"), "Revenue Recognition in
Financial Statements." SAB 101 summarizes the SEC's
view in applying generally accepted accounting
principles to selected revenue recognition issues.
The effects, if any, of applying this guidance must
be adopted by SEC registrants no later than December
31, 2000 and must be reported as a cumulative effect
adjustment as of January 1, 2000, resulting from a
change in accounting principle. Restatement of
previously reported results of the earlier quarters
of fiscal 2000, if necessary, is also required. The
adoption of SAB 101 did not have a material effect on
the Company's financial statements.
d) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, amounts to
banks, and any other highly liquid investments purchased with
a maturity of three months or less. The carrying amount
approximates fair value because of the short maturity of those
instruments.
BANKENGINE TECHNOLOGIES, INC.
(FORMERLY CALLMATE TELECOM INTERNATIONAL, INC.)
(SUCCESSOR TO WEBENGINE TECHNOLOGIES, INC.)
NOTES TO REVISED CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 2001 and 2000
(AMOUNTS EXPRESSED IN US DOLLARS)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
e) Capital Assets
Capital Assets are recorded at cost less accumulated
depreciation. Amortization is provided using the following
annual rates:
Furniture and Fixture - 20% - declining balance method
Computer Equipment - 30% - declining balance method
f) Net Income (Loss)Per Weighted Average Common Stock
Net income (Loss) per common stock is computed by dividing net
income (loss) for the year by the weighted average number of
common stock outstanding during the year.
g) Income Taxes
The company accounts for income tax under the provision of
Statement of Financial Accounting Standards No. 109, which
requires recognition of deferred tax assets and liabilities
for the expected future tax consequences of events that have
been included in the financial statement or tax returns.
Deferred income taxes are provided using the liability method.
Under the liability method, deferred income taxes are
recognized for all significant temporary differences between
the tax and financial statement bases of assets and
liabilities.
Effects of changes in enacted tax laws on deferred tax assets
and liabilities are reflected as adjustments to tax expense in
the period of enactment. Deferred tax assets may be reduced,
if deemed necessary based on a judgmental assessment of
available evidence, by a valuation allowance for the amount of
any tax benefits which are more likely, based on current
circumstances, not expected to be realized
h) Foreign Currency
Assets and liabilities recorded in foreign currencies are
translated at the exchange rate on the balance sheet date for
the convenience of the reader. Translation adjustments
resulting from this process are charged or credited to other
comprehensive income. Revenue and expenses are translated at
average rates of exchange prevailing during the year. Gains
and losses on foreign currency transactions are included in
financial expenses. No representation is made that the foreign
currency amounts could have been, or could be, converted into
United States dollars at the rates on the respective dates and
or at any other certain rates.
BANKENGINE TECHNOLOGIES, INC.
(FORMERLY CALLMATE TELECOM INTERNATIONAL, INC.)
(SUCCESSOR TO WEBENGINE TECHNOLOGIES, INC.)
NOTES TO REVISED CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 2001 and 2000
(AMOUNTS EXPRESSED IN US DOLLARS)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
i) Use of Estimates
The preparation of consolidated financial statements in
conformity with generally accepted accounting principles in
the United States of America requires management to make
estimates and assumptions that affect certain reported amounts
of assets and liabilities and disclosures of contingent assets
and liabilities at the date of the consolidated financial
statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from
those estimates. These estimates are reviewed periodically and
as adjustments become necessary, they are reported in earnings
in the period in which they become known.
j) Long-Lived Assets
On January 1, 1996, the company adopted the provisions of SFAS
No. 121, Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed of. SFAS No. 121
requires that long-lived assets be held and used by an entity
be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset
may not be recoverable. Management used its best estimate of
the undiscounted cash flows to evaluate the carrying amount
and have reflected the impairment.
k) Comprehensive Income
In 1999, the company adopted the provisions of SFAS No. 130
"Reporting Comprehensive Income". This standard requires
companies to disclose comprehensive income in their financial
statements. In addition to items included in net income,
comprehensive income includes items currently charged or
credited directly to stockholders' equity, such as the changes
in unrealised appreciation (depreciation) of securities and
foreign currency translation adjustments.
l) Long-term investments
The company accounts for investments in which the company
holds an interest of at least 20% and the company has
significant influence under the equity method.
BANKENGINE TECHNOLOGIES, INC.
(FORMERLY CALLMATE TELECOM INTERNATIONAL, INC.)
(SUCCESSOR TO WEBENGINE TECHNOLOGIES, INC.)
NOTES TO REVISED CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 2001 and 2000
(AMOUNTS EXPRESSED IN US DOLLARS)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
m) Computer software development
The company accounts for the cost of developing computer
software for sale as research and development expenses until
the technological feasibility of the product has been
established. To date all costs have been expensed. In the
future, at the end of each year the company will compare any
unamortized capital costs to the net realizable value of the
product to determine if a reduction in carrying value will be
warranted.
m) Financial instruments
The carrying amount of cash and cash equivalents, accounts
receivable, accounts payable and loans payable approximates
fair value at the period end.
4. RECENT PRONOUNCEMENTS
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in
Financial Statements". SAB 101 provides guidance on applying generally
accepted accounting principles to revenue recognition issues in
financial statements. The Company adopted SAB 101 as required by
December 31, 2000 and the adoption did not have a material impact on
the company's financial position, results of operations or cash flows.
In September 2000, the FASB issued SFAS No. 140, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities". This statement is effective for transfers and servicing
of financial assets and extinguishments of liabilities occurring after
March 31, 2001. SFAS No. 140 also includes provisions that require
additional disclosures in financial statements for fiscal years ending
after December 15, 2000. This statement is not expected to have a
material impact on the Company's financial position, results of
operations or cash flows.
Accounting Pronouncements The Financial Accounting Standards Board
("FASB") Emerging Issues Task Force ("EITF") has reached a consensus
with respect to Issue No. 00-14, "Accounting for Certain Sales
Incentives," including point of sale coupons, rebates and free
merchandise. The consensus included a conclusion that the value of such
sales incentives that results in a reduction of the price paid by the
customer should be netted against revenue and not classified as a sales
or marketing expense. The statement is not expected to have material
impact on the company's financial position, results of operations, or
cash flow.
BANKENGINE TECHNOLOGIES, INC.
(FORMERLY CALLMATE TELECOM INTERNATIONAL, INC.)
(SUCCESSOR TO WEBENGINE TECHNOLOGIES, INC.)
NOTES TO REVISED CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 2001 and 2000
(AMOUNTS EXPRESSED IN US DOLLARS)
4. RECENT PRONOUNCEMENTS (Cont'd)
The provisions of the Fast's EITF Issue No. 00-10, "Accounting For
Shipping and Handling Fees and Costs," requires the Company to report
all amounts billed to a customer in a sale transaction as revenue,
including those amounts related to shipping and handling. The Company
has historically included such amounts in sales as required by the
EITF. Prior to such adoption, however, shipping and handling costs were
included in sales, marketing and distribution expenses.
In April 2001, the EITF reached a consensus with respect to EITF Issue
No. 00-25, "Vendor Income Statement Characterization of Consideration
to a Purchaser of the Vendor's Products or Services." The consensus
included a conclusion that consideration from a vendor to a retailer is
presumed to be a reduction to the selling prices of the vendor's
products and, therefore, should be characterized as a reduction of
revenue when recognized in the vendor's income statement. That
presumption can be overcome, and the consideration may be characterized
as a cost, if certain conditions are met. Such reclassification will
reduce sales and gross margin, but will have no impact on operating
income or net earnings. The Company is currently evaluating the impact
of adoption of this EITF consensus.
Recently Issued Accounting Standards In June 2001, the Financial
Accounting Standards Board issued Statements of Financial Accounting
Standards (SFAS) No. 141, "Business Combinations" and No. 142,
"Goodwill and Other Intangible Assets." Under the new rules, goodwill
and indefinite lived intangible assets are no longer amortized but are
reviewed annually for impairment. Separable intangible assets that are
not deemed to have an indefinite life will continue to be amortized
over their useful lives. The amortization provisions of SFAS No. 142
apply to goodwill and intangible assets acquired after June 30, 2001.
With respect to goodwill and intangible assets acquired prior to July
1, 2001, the Company will apply the new accounting rules beginning
January 1, 2002. Management is currently assessing the financial impact
SFAS No. 141 and No. 142 will have on Consolidated Financial
Statements.
5. INVESTMENT IN NON-CONTROLLED INVESTEE
The company has a 50% interest in X-Tech International Solutions
Limited (X-Tech), a company operating in the UK. BankEngine has no
involvement with the management of this company and it is intended that
the company be wound up in the near future. BankEngine has no
obligation to fund any shortfalls and therefore no amount has been
reflected for our investment in X-Tech.
As at September 30, 2001, X-Tech had a total shareholders deficiency of
approximately $6,000 US and has realized net losses of approximately
$6,000 US for the period February 2000 to September 30, 2001.
BANKENGINE TECHNOLOGIES, INC.
(FORMERLY CALLMATE TELECOM INTERNATIONAL, INC.)
(SUCCESSOR TO WEBENGINE TECHNOLOGIES, INC.)
NOTES TO REVISED CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 2001 and 2000
(AMOUNTS EXPRESSED IN US DOLLARS)
6. CAPITAL ASSETS
2001 2000
Cost Accumulated Amortization Net NET
$ $ $ $
Furniture, fixtures 10,252 3,784 6,468 8,248
and equipment
Computer Equipments 8,541 2,786 5,755 1,488
---------------------------------------------- -----
Total 18,793 6,570 12,223 9,736
============================================== =====
7. LOANS FROM STOCKHOLDERS
Loans from stockholders bear interest at the rate of 4% and have no
specific terms of repayment.
8. CAPITAL STOCK
a) Authorized
50,000,000 Common stock with a $.001 par value
b) Common stock
The company had issued and outstanding 14,315,893 common stock
at the time of the reverse acquisition in January 2001. As
detailed in note 2, the company issued 12,000,000 common
shares to the shareholders of WebEngine. A total of 9,200,000
shares were cancelled in exchange for the removal of the UK
operations in January 2001. There were no other share
transactions. The current outstanding shares total 17,115,893.
BANKENGINE TECHNOLOGIES, INC.
(FORMERLY CALLMATE TELECOM INTERNATIONAL, INC.)
(SUCCESSOR TO WEBENGINE TECHNOLOGIES, INC.)
NOTES TO REVISED CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 2001 and 2000
(AMOUNTS EXPRESSED IN US DOLLARS)
8. CAPITAL STOCK (Cont'd)
b) Common stock (Cont'd)
Shares outstanding prior to the
reverse acquisition 14,315,893
Issued to shareholders of WebEngine 12,000,000
Cancelled for UK operations (9,200,000)
----------
Shares currently outstanding 17,115,893
----------
The shares of the UK companies were estimated to have a very
limited value and therefore the exchange of these shares for
9,200,000 shares of BankEngine was approved by the Board of
Directors.
All other assets held at the public company level continue to
be held for the benefit of the public company and therefore
the value attributable to the remaining previous shareholders
is reflected by these other assets. The other assets were
funds held on deposit by a bank in the UK to provide security
for credit card transactions of the UK operations. As the UK
operations have since ceased, the security deposits may be
released to BankEngine in accordance with the credit card
agreements. The capital stock reflects additions to paid in
capital for the estimated value of these funds net of
estimated liabilties payable to the credit card company,
accounts payable to the previous auditors of the company and
net of the estimated income tax liability arising on the
disposition of the UK companies for an addition to paid in
capital totaling $235,457.
The realizable amount for these funds on deposit will be
resolved in early 2002. The agreement for BankEngine to obtain
these funds on deposit was settled with the banking
institution during 4th quarter and therefore the balance of
funds to be received and the amount received in June 2001 was
reflected in the 4th quarter only.
c) Common stock transactions 2000
As at August 31, 1999, Cyberstation had 1,000 shares
outstanding for a total of $130 plus $335,321 of additional
paid in capital. A settlement was reached with the shareholder
of 400 common shares and as at August 31, 2000, these shares
were cancelled for an amount of $122,602.
BANKENGINE TECHNOLOGIES, INC.
(FORMERLY CALLMATE TELECOM INTERNATIONAL, INC.)
(SUCCESSOR TO WEBENGINE TECHNOLOGIES INC.)
NOTES TO REVISED CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 2001 and 2000
(AMOUNTS EXPRESSED IN US DOLLARS)
9. DEFERRED INCOME TAXES AND INCOME TAXES
a) Current income taxes
Current income taxes
Current income taxes consist of; 2001 2000
Amount calculated at Federal and
Provincial statutory rates 73,000 49,000
Increase resulting from
Valuation allowance (73,000) (49,000)
------- ------
Current income taxes -- --
------- -------
b) Income taxes payable
Income taxes payable represent the anticipated income taxes payable on
the disposition of the UK operations as discussed in note 2.
10. CONTINGENCIES AND COMMITMENTS
As discussed in the Capital Stock note, the company is liable for
shortfalls which may arise upon the settlement with the credit card
company. The credit card company has agreed that the limit of the
company's liability is the amount of security held on hand which at the
year end amounted to 200,000 pounds Sterling. This amount has been
reflected as Funds held on deposit. An amount of $146,000 has been
included in accounts payable which is the estimate of the liability.
The settlement will be based on the transactions to December 31, 2001
and will be settled in early 2002.
Included in accounts payable is the amount of $170,000 which represents
the amount invoiced by the former auditors of the company. The company
is disputing this amount. The company does not believe that its former
auditors, who have taken no action beyond sending invoices, will file a
claim. If a claim were to be raised, the company would vigorously
dispute the action as well as consider its own options.
The company has signed a lease commitment for its office space in
Toronto, Canada which expires August 31, 2002 and which has an annual
rent payable of $46,500.
BANKENGINE TECHNOLOGIES, INC.
(FORMERLY CALLMATE TELECOM INTERNATIONAL, INC.)
(SUCCESSOR TO WEBENGINE TECHNOLOGIES, INC.)
NOTES TO REVISED CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 2001 and 2000
(AMOUNTS EXPRESSED IN US DOLLARS)
11. COMPREHENSIVE INCOME
The Company has adopted Statement of Financial Accounting Standards No.
130 Reporting Comprehensive Income and its components in the financial
statements.
Comprehensive income (loss) for the year ended August 31, 2001:
Before Tax Tax (Expense) Net-of-Tax
Amount or Benefit Amount
----------- ----------- -----------
Foreign currency translation
adjustments (14,093) -- (14,093)
----------- ----------- -----------
Other comprehensive loss (14,093) -- (14,093)
=========== =========== ===========
Comprehensive income (loss) for the year ended August 31, 2000:
Before Tax Tax (Expense) Net-of-Tax
Amount or Benefit Amount
----------- ----------- -----------
Foreign currency translation
adjustments 1,767 -- 1,767
----------- ----------- -----------
Other comprehensive loss 1,767 -- 1,767
=========== =========== ===========
The foreign currency translation adjustments are not currently adjusted
for income taxes since the company is situated in Canada and the
adjustments relate to the translation of the financial statements from
Canadian dollars into United States dollars done only for the
convenience of the reader.
12. EARNINGS PER SHARE
The company has adopted Statement No.128, Earnings Per Share, which
requires presentation, in the consolidated statement of income, of both
basic and diluted earnings per share.
BANKENGINE TECHNOLOGIES, INC.
(FORMERLY CALLMATE TELECOM INTERNATIONAL, INC.)
(SUCCESSOR TO WEBENGINE TECHNOLOGIES, INC.)
NOTES TO REVISED CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 2001 and 2000
(AMOUNTS EXPRESSED IN US DOLLARS)
13. NON-CASH TRANSACTIONS
The following transactions have not been reflected on the consolidated
statement of cashflows.
As detailed in Note 2, in January 2001, upon the acquisition of
Callmate, the company effectively issued its shares to the predecessor
shareholders as follows;
Funds on deposit $601,457
Accounts payable (316,000)
Income taxes payable (50,000)
--------
Capital stock issued $235,457
--------
The settlement with the predecessor shareholder, as detailed in note
8 c was reflected in the accounts as follows;
Reduction in accounts receivable $ 122,602
Reduction in paid in capital ($122,602)
14. FINANCIAL INSTRUMENTS
a) Credit Risk Management
The company is exposed to credit risk on the accounts
receivable from its customers. In order to reduce its credit
risk, the company has adopted credit policies which include
the analysis of the financial position of its customers and
the regular review of their credit limits.
b) Concentration of Credit Risk
The company does not believe it is subject to any significant
concentration of credit risk. Cash and short-term investments
are in place with major financial institutions.
15. REVENUES FROM MAJOR CUSTOMERS
2001: No single customer consisted of more than 10% of revenue.
2000: One customer consisted of 29% of revenue. This customer is
related to the former shareholder referred to in note 8 c.
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act
of 1934, the Registrant has duly caused this Annual Report on Form 10-KSB to be
signed on its behalf by the undersigned, thereunto duly authorized.
BANKENGINE TECHNOLOGIES, INC.
By: /s/ Joseph J. Alves
President, CEO and Chairman of the Board
In accordance with the Exchange Act, this report has been signed
below by the following persons and in the capacities and on the dates indicated.
Signature Title Date
/s/ Joseph J. Alves President and Chairman of the Board January 14, 2002
-------------------
Joseph J. Alves
/s/ Mahmoud Hashmi Chief Operating Officer, Principal January 14, 2002
------------------- Accounting Officer and Director
Mahmoud Hashmi