<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) April 5, 2000
------------------------------
Callmate Telecom International, Inc.
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(Exact name of Registrant as Specified in its Charter Post-merger)
Zee, Inc.
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(Prior name of Corporation pre-merger)
Wyoming 000-27773 830-319-519
---------------------------- ----------- -------------
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation pre-merger) File Number) Identification No. pre-merger)
Florida 59-3134518
---------------------------- ------------
(State or Other Jurisdiction (IRS Employer
of Incorporation post-merger) Identification No. post-merger)
1 Wilton Street, Bradford, BD5 OAX, United Kingdom
--------------------------------------------------------------------------------
(New Address)
Registrant's telephone number, including area code 011 44 1274 301 500
-------------------
<PAGE>
Item 2. Acquisition or Disposition of Assets.
(a) On March 31, 2000, Callmate Telecom International, Inc. ("Callmate")
completed a merger with Zee, Inc., it's wholly-owned subsidiary, with Callmate
being the surviving entity.
A copy of the Articles of Merger and Plan of Merger are filed as
exhibits to this Form 8-K and are incorporated in their entirety herein.
(b) Callmate is an international, facilities-based provider of
telecommunications and Internet services. Callmate was formed in 1997 by
Mohammad Saff Gohir to exploit the potential provided by the deregulation of the
United Kingdom telecommunications market and has developed its business by
operating from a low overhead base and identifying several niche markets.
Callmate has identified a market need for telecommunications services for the
Asian community throughout the United Kingdom and this has formed the core of
its business. In addition, through owning its own switching gear, Callmate has
been able to "trade" in wholesale airtime and take advantage of both its own
excess capacity and that of other carriers. Callmate's primary focus is the
market for retail and wholesale services within the United Kingdom and Europe.
Callmate also provides Internet credit card processing and settlement services
to institutions, merchants and consumers.
Callmate is a holding company that conducts business through the following
operating subsidiaries:
. Callmate Telecom Communications Ltd., our wholly-owned subsidiary in
the United Kingdom and primary operating subsidiary which owns our
state-of-the art switching and international gateway facilities.
. Calltel (PVT) Ltd., a Pakistanian company, in which we hold a 65%
interest and through which we provide pre-paid calling card services.
. We have also reached an agreement to acquire a majority interest in
American Multi Credit Inc., a Florida corporation, through which we
will provide real time credit card processing over the Internet.
A. Callmate Telecom Communication Ltd. - Product, Services and
------------------------------------------------------------
Technology
----------
Callmate Telecom has installed state-of-the-art switching and
International Gateway facilities. As a facilities-based international service
provider, Callmate Telecom offers carriers and international companies seamless
end-to-end connectivity through the existing global network of digital fiber
optic and satellite communications links. Additionally, Callmate's rapidly-
growing switching capacity holds the key to providing international
communications services to destinations in Europe, Africa and Asia, without
multiple or
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<PAGE>
"double- hop" satellite transmissions or through non-US carriers.
These services throughout the European continent will enable Callmate Telecom to
provide cost-efficient transport that non-facilities and facilities-based
carriers alike can take advantage of to connect to Callmate Telecom's network
and realize significant savings and network efficiency.
Callmate Telecom also offers users a full range of enhanced services,
including customized billing, Internet access, global virtual private networks,
calling card services and international freephone and private lines in
conjunction with approved operators. Users also have the option to offer
Callmate Telecom's extensive array or services and features to their own
customers.
Callmate Telecom is licensed by the Department of Trade and Industry
under Section 7 of the UK Telecommunications Act. This license gives Callmate
Telecom the freedom to operate as a true `Free Trader' in the telecommunications
market, allowing the company to build its own networks where and when necessary,
or to utilize networks of other quality carriers. Callmate Telecom's current
products and services includes:
(i) Calling Card Services
---------------------
Whether customers are travelling in their own country or abroad, we
provide a hassle-free calling card service, one that can be used from
any phone, at any time, and that provides customers with a reliable
connection at the low Callmate Telecom rates, no matter where our
customers are calling from or to.
(ii) Resident Prepaid Accounts
-------------------------
The Callmate Telecom residential pre-paid account allows our customers
to make calls from their home phone in the UK to any country in the
world. Callmate Telecom's residential pre-paid account saves our
customers up to 95% on international calls and 50% on national calls.
With the Callmate Telecom residential pre-paid account there are no
access or minimum charges.
Easy to use
Whether our customers want to make national or international calls,
they can call direct with the Callmate Telecom residential pre-paid
account. Using a tone phone they simply:
. Dial the Callmate Telecom Toll free access number or
designated 1XXX number.
. Our central exchange will automatically recognize your
account from your Calling Line Identity (CLI) or will ask
you for your unique 10 digit PIN access code.
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<PAGE>
. Dial the number you wish to reach in the same way you would
using your original service provider.
Voice instructions given by our systems will guide you throughout.
Furthermore, when customers access the Callmate Telecom service, our
central exchange automatically calculates the balance remaining and
tells you this on pressing the * key.
Each pre-paid account has a value set by our customers when they
contract for the service and for which they receive a fixed amount of
talk time.
At any time customers can re-charge the credit levels on their
Callmate Telecom residential pre-paid account, simply by phoning our
customer service number on 0800 376 3000, quoting their account
number, and then charge the value they require to their credit card.
They can also re-credit their account using our automated top-up
system, which will provide them with the top-up option whenever their
credit card goes below a certain level. To proceed in the automated
top-up, they just follow the computer voice instructions to perform
the re-charge on-line. The Callmate Telecom residential pre-paid
account need never expire, provided customers re-charge its value as
they use it. Moreover, on request every month, customers will receive
a fully itemized bill, detailing the cost of every call made with the
Callmate Telecom residential pre-paid account.
The following summarizes Callmate Telecom residential pre-paid account
benefits which make long distance calling convenient and less costly:
. No Access Fees
. No first minute surcharge
. Per Minute billing
. Standard call tariffs. Our customers pay the same Callmate
Telecom low cost per-minute rate, giving savings of up to 80%
against BT's charges
. They can dial anywhere in the world via Callmate Telecom's Global
Network
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<PAGE>
. No need to worry about receiving large monthly or quarterly
bills, all calls made via the Callmate Telecom residential pre-
paid account are already paid for
. Callmate Telecom residential pre-paid account can be constantly
re-charged by making a quick phone call to our customer service
center, or using our automated recharge system, so our customers
need never run out of telephone talk-time.
. A fully itemized monthly record of all your calls (available on
request)
Callmate Pre-paid Residential Account Advanced Features
(a) Quality Service Callmate's efficient digital switching systems
and advanced fiber network ensures a high standard of
communication quality 24 hours a day, 365 days a year.
(b) Global Coverage
Designed specifically for global travelers, the Callmate's
Residential Account can be used directly from many countries
using Callmate's Global Network and indirectly from virtually any
country in the world using the Callmate International Call-back
Service.
(d) Follow-on Calls
This feature enables our customers to make several calls without
the need to re-dial the access, Card or PIN numbers. To use this
feature do not hang up at the end of the call, but instead press
the * button.
(e) Calling Line Identity (CLI)
Using this feature allows you to access your account with
Callmate and place calls without the need to dial any PIN number.
To take advantage of this feature, contact our customer service
line and nominate a telephone number to be registered with the
Callmate switching system.
(f) Call Forwarding
This feature lets you receive important calls on telephone
numbers that you nominate including overseas numbers.
(g) Voice Mail
This feature allows you to receive and retrieve messages from
your Callmate Voice Mail Service from anywhere in the world.
(h) Speed Dial
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<PAGE>
You can program your card with the most frequent dialed numbers
by creating your own list of telephone numbers and assigning
special short speed dial codes to them.
(i) Customer Service and Operator Assistance
Friendly, professional and multilingual Customer Service and
Operator Assistance teams support all these features. Our
customer service representatives are efficiently trained to
understand our customers' needs and provide the right answers to
all their queries. Wherever they are, our operators will guide
them through to ensure that they are successfully using the best
service, which they deserve.
(iii) Corporate Accounts
------------------
For businesses, Callmate Telecom can provide modestly priced
international calls. Callmate Telecom will also provide freephone
numbers (Callmate Telecom already has its own 0800 code - 0800 059
XXXX), local call numbers and national call numbers.
(iv) International Call-back Service
-------------------------------
For customers who travel outside the UK, Callmate Telecom provides a
cost-effective communications service for international long distance
telephony and facsimile services.
Regardless of the caller's country location, a call can be made to any
other country at savings of more than 60% as compared to placing the
call through their traditional local telecommunications service
provider.
How does the call-back Service Work?
Callmate Telecom uses a computer call re-origination system that lets
you call to or from anywhere in the world as if you were calling from
the United Kingdom. Our customers will have access to a telephone line
that is based and tariffed within the UK, and this can charge highly
competitive UK-based rates to anywhere in the world with savings over
local carriers of up to 60% and more.
Easy to Subscribe
There are no membership or subscription fees and no rental or
subscription billing charges. Customers pay only for the calls they
make at the low rates quoted in the Callmate Telecom tariff. All
charges are paid conveniently through a private or company credit
card. Each month, Callmate Telecom sends our customers an itemized
account of all their calls for each of their PIN numbers. We also can
provide business clients with an analysis of their combined monthly
traffic.
For Business Travelers on the Move
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<PAGE>
If our customers are travelling to a number of different places and,
for example, staying in different hotels, they can change the call
back number so that the Callmate Telecom system calls them at their
new location. This is done simply by dialing into a special "Admin"
number and following a menu of voice prompts, which will tell them how
to change the call back number. Instructions on how to use this
valuable service is given when a new account is opened.
Security
The combination of the customer's access number and PIN number which
is unique to the customer provides a high level of protection against
fraud or unauthorized use of an account because the customer is the
only person who knows both numbers. A customer can change the PIN as
often as they like and for any reason.
Freedom
As a Callmate Telecom subscriber, customers can use our Call-back
service to make international calls from any touch tone phone and only
pay our "free market" prices, not the inflated rates of state-owned
monopolies. And if customers use Call-back from their mobile phone,
they pay our low cost rates, not other supplier's inflated rates.
Call-Back Rates & Charges
Since calls with the Call-Back service are always originated in the
UK, charges are calculated by adding the rate from the switching
system to their location and the rate from the switching system to
their destination number. As an example, if a customer were in
Australia and wanted to place a call to the USA, the following charges
will apply:
UK to Australia: 12pence per minute, UK to USA: 8pence per minute,
total:20pence per minute.
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<PAGE>
[MAP APPEARS HERE]
(Representation of process and charges of using Call-Back to connect from
Australia to the USA)
For Calls made to final-destination numbers in the UK from outside the
country, 5pence per minute must be added to the rate of the country
our customers are in.
(v) Wholesale Products
------------------
If a company is a reseller or service provider of international
telecommunications services of any kind, Callmate Telecom can provide
a wide range of wholesale services, tailored to their individual needs
and significantly reducing their costs. We provide a service package
to meet their individual needs. There are no hidden costs and we can
give even bigger discounts if traffic volumes are high. The service(s)
they choose will depend on their international traffic levels and the
types of services they provide to their customers.
(vi) Services For Telecom Service Providers
--------------------------------------
Switched Services:
------------------
Domestic Telephony (origination & termination) Transit Telephony Calls
(national and international) International Telephony Calls
(origination & termination) Re-file (to overseas destinations via
Europe & USA) Free-phone numbers Local Charge Call (Lo-Call numbers)
Premium Rate Numbers (with exceptional revenue share deals)
Ancillary Switched Services:
----------------------------
Pre-paid cards (bespoke private label service) Video Conferencing
Access Links:
------------
International Leased Circuits for Voice Data Multimedia High Bit Rate
Applications
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<PAGE>
Managed Services:
----------------
(a) ATM, Frame Relay, X.25 Facilities Management, Equipment Housing,
Equipment Co-location Switch (telcoms grade) Partitions Calling Card
Services Platforms (e.g. affinity schemes, charities, airlines, etc)
Dial-in (bulk PSTN access) Intelligent Network Services Billing Bureau
Services Best Practice Engineering
(b) Switched voice, data and fax traffic is carried from your network
to our international gateway exchange by digital private line(s), then
conveyed across our fibre links and routed on by our overseas
switching partners through their own networks to the destination.
(c) Our Access Link products also offer similar advantages for point-
to-point Data Links over which applications such as LAN-LAN
connection, file transfer, multimedia and video conferencing can be
provided.
(d) Our international gateway switch, based in London can connect to
any type of switching system via dedicated access links. Dependent
upon traffic volumes, this may be multiple 2 Megabit PDH links or STM1
or STM4 SDH links.
B. CallTell (PVT) Ltd.
-------------------
In July 1998 Callmate announced that it has subscribed for 65% of the
issued capital of CallTell (PVT) Ltd. ("CallTell"). CallTell has been awarded
one of only 3 pre-paid calling card licenses by the Pakistan Telecommunication
Company Ltd. CallTell will operate and maintain a non exclusive pre-paid
calling card service solely for outgoing international calls DTMF (tone) phones
in Pakistan. CallTell also has signed a contract with the Pakistan State Oil
Company to supply it with prepaid Telephone Calling Cards.
C. American Multi Credit Inc.
--------------------------
AMC is contractually connected to two banks, South Bank and Trust
Company Ltd (SBT) and MultiCredit SA (MSA). AMC contracts hold exclusive
settlement processing rights with regard to Internet credit card clearing
transactions for both SBT and MSA.
SBT has a primary membership status with MasterCard to conduct both
issuing and acquiring business. SBT has a contract with MasterCard to issue
MasterCard credit cards as well as acquiring and settling MasterCard charges for
its participating merchants. The MIPS or communication lines to MasterCard are
held at the AMC offices in Fort Lauderdale.
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<PAGE>
MSA has a primary membership status with Visa International which
allows both issuing and acquiring business. The VAPS or communication lines to
Visa International are held in Guatemala City.
AMC is an international sales office under its exclusive contract with
SBT and MSA. The contract with MasterCard allows SBT, through its credit card
processing facility, to acquire as well as issue business international and
domestically which offers a unique business opportunity. AMC is responsible for
marketing these services for both banks. The banks have control over their own
MIPS or VAPS as opposed to using a settlement processor like FDC, FTC, GPS or
Nabanco. Most domestic banks and a high percentage of off-shore banks use one
of these secondary processors and pay transaction fees to them based on a
percentage of each transaction. Since both SBT and MSA have their own MIPS and
VAPS and a contract with AMC for their use, AMC can therefore conduct business
as a settlement processor offering payments services to other international
and/or off-shore banks.
AMC and the banks are leaders in the Internet credit card processing
business as one of the first off-shore financial institutions offering secured
credit card processing to merchants selling products and services over the
Internet.
AMC focuses on three primary member components of the e-commerce
industry: banks; merchants; and Internet consumers. AMC provides software and
positive and negative databases for financial institutions that offer real time
settlement through existing credit card networks. The integration of our
software, network and databases minimizes fraud and reduces chargebacks and
credits. Merchants use our back office accounting software for real-time access
to all of their account and transaction data. Demographics on their customer
base are also stored and can be manipulated to support marketing and sales
programs to target broad or specific market sectors of consumers. The consumer
has access to the merchant via secured servers on the Internet where information
can be freely submitted without security worries.
(c) Callmate also provides telecommunication and Internet based services
through the following entities:
Telenet Communications Limited: In November 1999, Callmate purchased a
50% equity interest in Telenet Communications Limited.
. INFONET: In January 2000, Callmate entered into an agreement to
purchased a 25% equity interest in INFONET, the second largest
Internet service provider (ISP) in Karachi, Pakistan.
Upon completion of the acquisition of INFONET, Callmate will
enhanced the number of access ports by 120% and bandwidth by 400%. This
will make INFONET's service much more efficient, leading to a projected
doubling of subscribers in the near term. Prior to the agreement, the
existing ports were utilized with 95% capacity during peak hours.
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Callmate intends to open a chain of Cybercafes which will be developed
and managed by Callmate. If proven successful, the Callmate will initiate
20 facilities in year 2000 and franchise additional cafes nationwide to
over 300 potential investors. The investors will be fully trained and
qualified by Callmate, and if accepted, offered a turnkey operation.
INFONET, under Callmate's management, will be selling these Cybercafes
Internet and bandwidth. While enabling Callmate to earn royalties on the
usage of the Company's Internet service, the Cybercafes will enhance the
Company's customer base as these customers purchase their own hardware.
This arrangement will also create an opportunity for greater Internet
awareness in Pakistan. Callmate is not interested in becoming involved in
or deriving royalties from the sales of coffee and/or food from Cybercafe
operations.
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<PAGE>
Item 7. Financial Statements, Pro Form Financial Information and Exhibits.
(a) Financial Statements
The audited financial statements of Callmate for the fiscal years
ended August 31, 1999 and 1998 and the unaudited interim period ended November
30, 1999 and 1998 are included herein. In addition, pro forma financial
statements reflecting the combined financial statements of Callmate and Zee at
November 30, 1999 are included herein.
(b) Exhibits
Exhibit No. Description
----------- -----------
10.1 Articles of Merger
10.2 Plan of Merger
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<PAGE>
Consolidated Financial Statements
Callmate Telecom International, Inc.
Three Months Ended November 30, 1999 and 1998 (Unaudited)
and Years Ended August 31, 1999 and 1998
Independent Auditors' Report
<PAGE>
Callmate Telecom International, Inc.
Consolidated Financial Statements
Three Months Ended November 30, 1999 and 1998 (Unaudited)
and Years Ended August 31, 1999 and 1998
Contents
<TABLE>
<S> <C>
Independent Auditors' Report on Consolidated Financial Statements...... F-1
Consolidated Financial Statements:
Consolidated Balance Sheets.......................................... F-2
Consolidated Statements of Operations................................ F-3
Consolidated Statements of Changes in Stockholders' Deficit.......... F-4
Consolidated Statements of Cash Flows................................ F-6
Notes to Consolidated Financial Statements........................... F-7-F-13
Pro Forma Condensed Balance Sheet (unaudited)........................ F-14
Pro Forma Condensed Combined Statement of Operations................. F-15
Notes to Pro Forma Condensed Financial Statement (unaudited)......... F-17
</TABLE>
<PAGE>
[LOGO APPEARS HERE] PNCCPAs
================================================================================
Independent Auditors' Report
----------------------------
Board of Directors
Callmate Telecom International, Inc.
Bradford, United Kingdom
We have audited the accompanying consolidated balance sheet of Callmate Telecom
International, Inc. as of August 31, 1999 and the related consolidated
statements of operations, changes in stockholders' deficit, and cash flows for
the years ended August 31, 1999 and 1998. These consolidated financial
statements are the responsibility of the management of Callmate Telecom
International, Inc. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. These standards require that we plan
and perform the audits 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, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Callmate Telecom
International, Inc. as of August 31, 1999 and the results of its operations and
its cash flows for the years ended August 31, 1999 and 1998 in conformity with
accounting principles generally accepted in the United States of America.
As discussed in Note 3 to the consolidated financial statements, certain errors
resulting in understatements of previously reported cash, stockholder advances,
minority interest, and net loss as of August 31, 1999 were discovered by
management of the Company during the quarter ended May 31, 2000. Accordingly,
the 1999 consolidated financial statements have been restated to correct those
errors.
Certified Public Accountants
Tampa, Florida
March 31, 2000, except for Note 3, as to which the date is May 31, 2000.
Pender Newkirk & Company . Certified Public Accountants
--------------------------------------------------------------------------------
100 South Ashley Drive . Suite 1650 . Tampa, Florida 33602 .
(813) 229-2321 . Fax (813) 229-2359
Web Site: www.pncocpa.com
--------------------------------------------------------------------------------
Member of Private Companies Practice Section and SEC Practice
Section of American Institute of Certified Public Accountants
================================================================================
<PAGE>
[CAPTION]
Callmate Telecom International, Inc.
Consolidated Balance Sheets
<TABLE>
<CAPTION>
November 30, August 31,
1999 1999
---------------------------
(Unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 1,800,796 $ 2,164,992
Cash held in trust accounts 2,235,993 1,882,886
Restricted cash and cash equivalents 164,013 160,866
Accounts receivable, trade 1,116,873 934,694
Accounts receivable, related parties 131,198 64,052
Prepaid expenses and other current assets 549,352 314,965
-------------------------
Total current assets 5,998,225 5,522,455
Property and equipment, net of accumulated depreciation 1,264,587 1,277,280
-------------------------
Other Assets
Investments 135,000
Other 981,262 568,999
-------------------------
Total other assets 1,116,262 568,999
-------------------------
$ 8,226,074 $ 6,968,734
=========================
Liabilities and Stockholders' (Deficit)
Current liabilities:
Accounts payable $ 5,804,144 $ 5,887,462
Advances from stockholders 2,034,860 1,053,735
Accrued expenses 57,734 74,430
Deferred revenue 750,535 755,274
-------------------------
Total current liabilities 8,647,273 7,770,901
-------------------------
Stockholders' (deficit):
Common stock; $.001 par value; 50,000,000 shares
authorized; 14,200,000 shares issued
and outstanding as of November 30, 1999 and
August 31, 1999, respectively 14,200 14,200
Additional paid-in capital 846,800 846,800
Accumulated deficit (1,146,700) (1,294,127)
Accumulated other comprehensive income 17,501 30,960
-------------------------
Total stockholders' (deficit) (268,199) (402,167)
-------------------------
$ 8,379,074 $ 7,368,734
=========================
</TABLE>
Read independent auditors' report. The accompanying notes
are integral part of the consolidated financial statements. F-2
<PAGE>
Callmate Telecom International, Inc.
Consolidated Statements of Operations
<TABLE>
<CAPTION>
Three Months
Ended
November 30, Year Ended August 31,
------------------------------------------------------
1999 1998 1999 1998
-----------------------------------------------------
(Unaudited) (unaudited)
<S> <C> <C> <C> <C>
Revenues $ 2,502,010 $4,425,456 $19,361,837 $11,161,196
Cost of revenues 1,677,299 3,669,861 16,483,683 9,595,119
----------------------------------------------------
824,711 755,595 2,878,154 1,566,077
Selling, general and administrative
expense 694,509 511,843 3,238,920 2,819,153
----------------------------------------------------
Income (loss) from operations 130,202 243,752 (360,766) (1,253,076)
----------------------------------------------------
Other income:
Interest 44,946 18,618
Other 17,225 257,376
----------------------------------------------------
17,225 302,322 18,618
----------------------------------------------------
Minority interest in loss of
consolidated subsidiary 675
----------------------------------------------------
Income (loss) before taxes 147,427 243,752 (57,769) (1,234,458)
Income taxes
----------------------------------------------------
Net income (loss) $ 147,427 $ 243,752 $ (57,769) $(1,234,458)
====================================================
Basic and diluted earnings (loss) per share $ .01 $ .02 $ (.00) $ (.11)
====================================================
Weighted average number of common
shares used in basic and diluted earnings
(loss) per share computation 14,200,000 11,247,253 12,929,333 11,000,000
====================================================
</TABLE>
Read independent auditors' report. The accompanying notes
are integral part of the consolidated financial statements F-3
<PAGE>
Callmate Telecom International, Inc.
Consolidated Statements of Changes in Stockholders' Equity (Deficit)
Three Months Ended November 30, 1999 (Unaudited)
and Years Ended August 31, 1999 and 1998
<TABLE>
<CAPTION>
Accumulated
Common Stock Additional Other
----------------------------- Paid-In Accumulated Comprehensive
Shares Amount Capital Deficit Income
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Stock issuance 1 $ 2
Foreign currency
translation adjustment $ 7,760
Net loss for year $ (1,234,458)
------------------------------------------------------------------------------------------
Balance, August 31, 1998 1 2 (1,234,458) 7,760
Issuance of stock 9,999 15,998
Acquisition of company 11,000,000 11,000 (11,900)
Recapitalization of company (10,000) (16,000) 10,000
Issuance of common stock, net
of offering costs of $150,000 1,700,000 1,700 $ 698,900
Common stock issued for
offering costs 1,500,000 1,500 148,500
Foreign currency
translation adjustment 23,200
Net loss for the year (57,769)
------------------------------------------------------------------------------------------
Balance, August 31, 1999 14,200,000 14,200 846,800 (1,294,127) 30,960
</TABLE>
Read independent auditors' report. The accompanying notes
are integral part of the consolidated financial statements.
F-4
<PAGE>
Callmate Telecom International, Inc.
Consolidated Statements of Changes in Stockholders' Equity (Deficit)
Three Months Ended November 30, 1999 (Unaudited)
and Years Ended August 31, 1999 and 1998
<TABLE>
<CAPTION>
Accumulated
Common Stock Additional Other
----------------------------- Paid-In Accumulated Comprehensive
Shares Amount Capital Deficit Income
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Foreign currency
translation adjustment
(unaudited) (13,459)
Net income for the period
(unaudited) 147,427
------------------------------------------------------------------------------------------
Balance, November 30,
1999 (unaudited) 14,200,000 $ 14,200 $ 846,800 $(1,146,700) $ 17,501
==========================================================================================
</TABLE>
Read independent auditors' report. The accompanying notes
are integral part of the consolidated financial statements.
F-5
<PAGE>
Callmate Telecom International, Inc.
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Three Months
Ended
November 30, Year Ended August 31,
-------------------------------------------------------
1999 1998 1999 1998
-------------------------------------------------------
(Unaudited) (unaudited)
<S> <C> <C> <C> <C>
Operating activities
Net income (loss) $ 147,427 $ 310,705 $ (57,769) $(1,234,458)
-------------------------------------------------------
Adjustments to reconcile net income (loss) to
net cash (used) provided by operating activities:
Depreciation 65,965 66,853 205,291 41,776
Bad debt expense 414,525 1,707,030
Foreign currency translation adjustment (13,459) (14,795) 23,200 7,760
Loss on disposal of property and equipment 33,551
(Increase) in:
Cash held in trust (353,107) (1,882,886)
Accounts receivable (182,179) (1,839,141) (240,417) (2,815,832)
Other receivables, related parties (67,146) 38,420 (25,632) (38,420)
Other assets (146,650) (131,072) (778,666) (95,298)
Increase (decrease) in:
Accounts payable (83,318) 1,786,416 3,213,858 2,672,704
Accounts payable, related parties (23,706) (23,706) 23,706
Accrued expenses (16,696) (22,618) (135,967) 210,397
Deferred income (4,739) (80,705) (477,073) 1,232,347
-------------------------------------------------------
Total adjustments (801,329) (409,848) 326,078 2,946,170
-------------------------------------------------------
Net cash (used) provided by operating activities (653,902) (166,096) 268,309 1,711,712
-------------------------------------------------------
Investing activities
Change in restricted cash (3,147) (1,360) 2,624 (163,490)
Deposit on stock purchase and exchange agreement (500,000)
Acquisition of Investment (135,000)
Acquisition of property and equipment (53,272) (185,358) (1,023,182) (534,716)
-------------------------------------------------------
Net cash used by investing activities (691,419) (186,718) (1,020,558) (698,206)
-------------------------------------------------------
Financing activities
Proceeds from stockholder advances 981,125 1,053,735
Proceeds from issuance of stock - - 850,000 -
-------------------------------------------------------
Net cash provided by financing activities 981,125 1,903,735 -
-------------------------------------------------------
Net (decrease) increase in cash (364,196) (352,814) 1,151,486 1,013,506
Cash, beginning of period 2,164,992 1,013,506 1,013,506
-------------------------------------------------------
Cash, end of period $1,800,796 $ 660,692 $ 2,164,992 $ 1,013,506
=======================================================
</TABLE>
Supplemental disclosure of non-cash financing activities:
In November 1998, the Company issued 1,500,00 shares of common stock
valued at $150,000 for offering costs in connection with a private placement
offering.
Read independent auditors' report. The accompanying notes
are integral part of the consolidated financial statements. F-6
<PAGE>
Callmate Telecom International, Inc.
Notes to Consolidated Financial Statements
Three Months Ended November 30, 1999 (Unaudited)
and Years Ended August 31, 1999 and 1998
1. Background Information, Acquisitions, and Subsequent Event
Callmate Telecom International, Inc. (formerly known as Skin Tight, Inc.) was
incorporated in July 1992 and merged effectively December 2, 1998 with Callmate
Telecom (UK) Limited, a private limited company incorporated in Leeds, England
in 1996. Prior to this acquisition, Callmate Telecom International, Inc. was a
development stage enterprise.
Pursuant to this merger, Callmate Telecom International, Inc. issued 10,000,000
shares of its stock for all of the stock of Callmate Telecom (UK) Limited. As a
result of this acquisition, the stockholders of Callmate Telecom (UK) Limited
effectively acquired Callmate Telecom International, Inc. and control thereof.
Accordingly, this acquisition has been accounted for as a reverse acquisition
for financial statement purposes.
The number of authorized, issued, and outstanding shares of common stock has
been restated in the accompanying consolidated financial statements to reflect
the subsequent change in the common stock as if the acquisition had occurred
August 1, 1997.
Calltel PVT Limited, a private limited company, was incorporated in Karachi,
Pakistan in May 1999. Callmate Telecom (UK) Limited owns 65 percent of Calltel
PVT Limited.
The aforementioned companies will hereinafter be referred to as the "Company."
The Company's principal line of business is the sale of prepaid calling cards
throughout the United Kingdom, Sweden, Germany, and Pakistan. In addition, the
Company provides to customers in the United Kingdom residential prepaid account
services, business account services, and international call-back services. The
Company's headquarters is located in Bradford, United Kingdom.
On October 30, 1999, the Company entered into an exchange and stock purchase
agreement with American Multicredit, Inc. (AMC), a Florida corporation, and
Diaspora Finance Limited (Diaspora), a Nevis, West Indies corporation. The terms
of the agreement call for the Company to purchase two shares of common stock of
AMC at a cost of $250,000 per share. In addition, the Company will issue
3,500,000 shares of Class B common stock to the stockholders of AMC and Diaspora
in exchange for 500 and 501 shares of common stock of AMC and Diaspora,
respectively. As a result of the purchase and exchange, the Company will own a
50.1 percent interest in both AMC and Diaspora. As of March 31, 2000, the
Company has not issued or received any of the aforementioned stock as the
agreement has not yet closed. The $500,000 paid by the Company to AMC has been
reflected as a deposit in other long-term assets in the accompanying November
30, 1999 consolidated balance sheet.
Effective March 31, 2000, the Company entered into a share purchase agreement
with Zee, Inc. (Zee), a Wyoming corporation, and the stockholders of Zee. The
Company agreed to purchase all 660,000 shares of the outstanding common stock of
Zee at a cost of $.02 per share. As a result of this transaction, Zee will
become a wholly owned subsidiary of the Company. This transaction will be
accounted for as a purchase of Zee by the Company.
Read independent auditors' report. F-7
<PAGE>
Callmate Telecom International, Inc.
Notes to Consolidated Financial Statements
Three Months Ended November 30, 1999 (Unaudited)
and Years Ended August 31, 1999 and 1998
1. Background Information
2. Significant Accounting Policies
The significant accounting policies followed are:
The consolidated financial statements as of November 30, 1999 and August
31, 1999 and the period and year then ended present the accounts of
Callmate Telecom International, Inc. and its wholly owned subsidiary,
Callmate Telecom (UK) Limited, which includes a 65 percent interest in
Calltel PVT Limited. The consolidated financial statements for the year
ended August 31, 1998 present the accounts of Callmate Telecom (UK)
Limited. All significant intercompany accounts and transactions have been
eliminated.
The consolidated financial statements as of November 30, 1999 and 1998 and
for the three months then ended are unaudited. In the opinion of management
of the Company, the unaudited consolidated financial statements have been
prepared on the same basis as the audited consolidated financial statements
and include all adjustments necessary for a fair presentation of the
financial position and results of operations of the Company as of November
30, 1999 and 1998 and the three months then ended. Results of the three
months ended November 30, 1999 and 1998 are not necessarily indicative of
the results to be expected for the entire fiscal year.
Effective August 31, 1999, Callmate Telecom (UK) Limited changed its fiscal
year-end from July 31st to August 31st. The consolidated financial
statements for the year ended August 31, 1998 include the financial
information of Callmate Telecom (UK) Limited for the 11-month period August
1, 1997 through July 1998. The consolidated financial statements for the
year ended August 31, 1999 include the financial information of Callmate
Telecom (UK) Limited for the 13-month period August 1, 1998 through August
31, 1999. As there was minimal financial activity for the month of August
1997, this presentation does not have a material impact on the August 31,
1999 and 1998 consolidated financial statements.
The preparation of consolidated 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 consolidated financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could
differ from those estimates.
Read independent auditors' report. F-8
<PAGE>
Callmate Telecom International, Inc.
Notes to Consolidated Financial Statements
Three Months Ended November 30, 1999 (Unaudited)
and Years Ended August 31, 1999 and 1998
2. Significant Accounting Policies (continued)
Cash and cash equivalents consist of cash deposits in operating and short-
term investment accounts. At November 30, 1999 and August 31, 1999,
$2,235,993 and $1,882,886, respectively, of the Company's cash and cash
equivalents is held in trust by the Company's attorney. This cash was
raised from the sale of the Company's common stock and advances from the
certain stockholders. At November 30, 1999 and August 31, 1999, $164,013
and $160,866, respectively, of the Company's cash and cash equivalents is
held as a restricted deposit for transaction processing.
Investments with ownership interest of greater than 20 percent for which
the Company does not exercise control are recorded at cost and are adjusted
for the Company's proportionate share of its undistributed earnings or
losses and any adjustments due to permanent declines in value.
A portion of the Company's sales are made on credit to various customers
based on each customer's ability to pay. Based on management's review of
accounts receivable, no allowance for doubtful accounts is needed at
November 30, 1999 or at August 31, 1999 to cover losses arising from
accounts receivable.
Property and equipment are recorded at cost. Depreciation is calculated by
the straight-line method over the estimated useful lives of the assets,
generally ranging from three to five years. Maintenance and repairs are
charged to operations when incurred. Betterments and renewals are
capitalized. When property and equipment are sold or otherwise disposed of,
the asset account and related accumulated depreciation account are
relieved, and any gain or loss is included in income.
Deferred tax assets and liabilities are recognized for the estimated future
tax consequences attributable to differences between the consolidated
financial statements carrying amounts of existing assets and liabilities
and their respective income tax bases. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable income in
the years in which those temporary differences are expected to be recovered
or settled. The effect on deferred tax assets and liabilities of a change
in tax rates is recognized as income in the period that included the
enactment date.
Read independent auditors' report. F-9
<PAGE>
Callmate Telecom International, Inc.
Notes to Consolidated Financial Statements
Three Months Ended November 30, 1999 (Unaudited)
and Years Ended August 31, 1999 and 1998
2. Significant Accounting Policies (continued)
The Company follows Statement of Financial Accounting Standards Board No.
130, "Reporting Comprehensive Income" (FASB No. 130). FASB No. 130
established standards for the reporting and display of comprehensive income
(net income and other comprehensive income) and its components in
consolidated financial statements. Other comprehensive income includes all
non-stockholder changes in equity and is reflected in the stockholders'
deficit section of the consolidated balance sheets.
Other comprehensive income consists of foreign currency translation
adjustments associated with the translation of the functional currencies of
Callmate Telecom (UK) Limited (pounds) and Calltel PVT Limited (rupees)
into the reporting currency of Callmate Telecom International, Inc. (U.S.
dollars).
The Company recognizes revenue from the sale of prepaid calling cards at
the time the cards are used. Any sales for which cards have not been used
are reported as deferred revenue. The Company recognizes revenues from all
other telecommunications services at the time the services are provided.
Provisions for discounts, returns, and other adjustments are provided for
in the same period the related revenues are recorded.
Advertising costs are charged to operations when incurred. Advertising
expense for the three months ended November 30, 1999 and 1998 and the years
ended August 31, 1999 and 1998 were $164,484, $104,886, $476,330, and
$237,138, respectively.
Basic earnings (loss) per common share is calculated by dividing net
earnings (loss) by the average number of common shares outstanding during
the year. Diluted loss per common share is calculated by adjusting
outstanding shares, assuming conversion of all potentially dilutive stock
options. There are no potentially dilutive stock options outstanding for
the periods presented.
3. Correction of Errors
Certain errors resulting in understatements of previously reported cash and
stockholder advances of $153,000 and $400,000 as of November 30, 1999 and
August 31, 1999, respectively, were discovered by management of the Company
during the quarter ended May 31, 2000. The $153,000 and $400,000 increase
to cash and stockholder advances have been properly reflected in the
accompanying consolidated financial statements. In addition, minority
interest was stated at $5,424 and $56,811 as of November 30, 1999 and
August 31, 1999, respectively. A correction to reduce minority interest to
zero and $675 at November 30, 1999 and August 31, 1999, respectively,
effectively decreased net income and increased net loss to $147,427 and
$57,769 for the periods then ended, respectively. Investments at November
30, 1999 were understated by $135,000 for the 50 percent investment in
Telenet Communications Limited(Telenet). The effect to increase investments
and reduce cash is properly reflected. There was no impact to the earnings
per share numbers previously reported. Accordingly, the 1999 consolidated
financial statements have been restated to correct the errors.
Read independent auditors' report. F-10
<PAGE>
Callmate Telecom International, Inc.
Notes to Consolidated Financial Statements
Three Months Ended November 30, 1999 (Unaudited)
and Years Ended August 31, 1999 and 1998
4. Property and Equipment
Property and equipment consist of:
<TABLE>
<CAPTION>
November 30, August 31,
1999 1999
-------------------------
(Unaudited)
<S> <C> <C>
Furniture and equipment $ 40,757 $ 37,489
Office equipment 125,196 99,531
Machinery and equipment 1,422,855 1,381,016
---------- ----------
1,588,808 1,518,036
Less accumulated depreciation 324,221 240,756
---------- ----------
$1,264,587 $1,277,280
========== ==========
</TABLE>
5. Lease Commitments and Related Party Transactions
The Company leases certain vehicles, equipment, and operating facilities under
operating leases with various terms. The following is a schedule by year of the
future minimum lease payments required under those leases with an initial or
remaining non-cancelable lease term in excess of one year as of November 30,
1999:
<TABLE>
<CAPTION>
Period Ending
November 30,
-------------
<S> <C>
2000 $ 157,395
2001 157,395
2002 156,257
2003 143,743
2004 143,743
Thereafter 2,024,380
----------
$2,782,913
==========
</TABLE>
Read independent auditors' report. F-11
<PAGE>
Callmate Telecom International, Inc.
Notes to Consolidated Financial Statements
Three Months Ended November 30, 1999 (Unaudited)
and Years Ended August 31, 1999 and 1998
5. Lease Commitments and Related Party Transactions (continued)
Total rent expense under operating leases amounted to $15,306, $8,126, $20,095,
and $27,817 for the three months ended November 30, 1999 and 1998 and the years
ended August 31, 1999 and 1998, respectively.
Not included in the above amounts are $35,936 and $95,829 for the three months
ended November 30, 1999 and the year ended August 31, 1999, respectively, of
rent expense relating to two operating facilities leased from a related party.
All amounts due under the lease agreements were waived for the aforementioned
periods. The leases are effective from January 1, 1999 through December 31,
2019 and call for annual rentals aggregating $139,743.
Accounts receivable, related parties at November 30, 1999 and August 31, 1999
consist of $131,198 and $64,052, respectively, due from a director of the
Company. The amounts are due on demand, are non-interest bearing, and are
unsecured.
Advances from stockholders at November 30, 1999 and August 31, 1999 consist of
$2,034,860 and $1,053,735, respectively. The amounts are due on demand, are
non-interest bearing, and are unsecured.
The above related party transactions are not necessarily indicative of the
amounts that would have been incurred had comparable transactions been entered
into with independent parties.
6. Acquisition of Investment
During the three month period ended November 30, 1999, the Company acquired a 50
percent Investment in Telenet. This Investment is being accounted for under the
equity method of accounting since the Company does not control Telenet.
7. Income Taxes
The Company has incurred operating losses since its inception that have been
carried forward and, therefore, no tax liabilities have been incurred for the
periods presented. These operating losses give rise to a deferred tax asset and
are as follows:
<TABLE>
<CAPTION>
November 30, August 31,
1999 1999
------------- -----------
(Unaudited)
<S> <C> <C>
Deferred tax asset $ 457,900 $ 516,900
Allowance (457,900) (516,900)
--------------------------
$ 0 $ 0
==========================
</TABLE>
The Company has available at August 31, 1999 approximately $1,292,200 of unused
operating loss carryforwards that may be applied against future taxable income,
which would reduce taxes payable by approximately $516,900 in the future. These
operating loss carryforwards expire beginning in 2019. Income tax benefits
resulting from the utilization of these carryforwards will be recognized in the
year in which they are realized for federal and state tax purposes. During the
period ended November 30, 1999 the Company utilized approximately $147,000 of
these operating losses; therefore, no provision for income taxes has been
recorded in the November 1999 consolidated financial statements.
Read independent auditors' report. F-12
<PAGE>
Callmate Telecom International, Inc.
Notes to Consolidated Financial Statements
Three Months Ended November 30, 1999 (Unaudited)
and Years Ended August 31, 1999 and 1998
8. Segment Information
The Company's operations are classified into two principal reportable segments
that provide services to different geographic regions. Revenues and long-lived
assets of these reportable segments are as follows:
<TABLE>
<CAPTION>
Three Months
Ended
November 30, Year Ended August 31,
------------------------------------------------------------
1999 1998 1999 1998
------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues:
Europe $2,226,136 $4,425,456 $ 19,356,60 $11,161,196
Pakistan 275,874 5,230
------------------------------------------------------------
$2,502,010 $4,923,456 $19,361,837 $11,161,196
============================================================
Operating income (loss):
Europe $ 221,286 $ 243,752 $ (582,528) $(1,253,076)
Pakistan (32,723) (163,507)
------------------------------------------------------------
188,563 243,752 (746,035) (1,253,076)
Elimination entries (58,361) 385,269
------------------------------------------------------------
$ 130,202 $ 243,752 $ (360,766) $(1,253,076)
============================================================
Depreciation Expenses:
Europe $ 65,711 $ 66,853 $ 204,798 $ 41,776
Pexistan 254 493 --
------------------------------------------------------------
$ 65,965 $ 66,853 $ 205,291 $ 41,776
============================================================
Three Months
Ended Year Ended
November 30, August 31,
1999 1999
----------- -----------
Identifiable Assets:
United Kingdom $ 7,814,747 $ 7,122,876
Pakistan 943,680 925,560
-------------------------
8,758,427 8,048,436
Elimination entries (379,353) (679,702)
-------------------------
$ 8,379,074 $ 7,368,734
=========================
</TABLE>
Read independent auditors' report. F-13
<PAGE>
<TABLE>
<CAPTION>
CALLMATE TELECOM INTERNATIONAL, INC.
PRO FORMA CONDENSED BALANCE SHEET (UNAUDITED)
NOVEMBER 30, 1999
Pro Forma
Adjustments Pro Forma
Callmate Zee, Inc. Increase (Decrease) Combined
----------------------------------------------------------------------
Assets:
<S> <C> <C> <C> <C>
Current Assets
Cash and cash equivalents $1,800,796 $ 404 $ (13,200) $ 1,788,000
Cash held in trust accounts 2,235,993 2,235,993
Restricted cash and cash equivalents 164,013 164,013
Accounts receivable, trade 1,116,873 1,116,873
Accounts receivable, related parties 131,198 131,198
Prepaid expenses and other current assets 549,352 549,352
------------- ----------- ------------------- ---------------
Total current Assets 5,998,225 404 (13,200) 5,985,429
Property and Equipment, net of a/d 1,264,587 1,264,587
------------- ---------------
Other Assets
Investments 135,000 135,000
Other 981,262 750 12,540 994,552
------------- ----------- ------------------- ---------------
Total other assets 1,116,262 750 12,540 1,129,552
------------- ----------- ------------------- ---------------
$8,379,074 $ 1,154 $ (660) $ 8,379,568
============= =========== =================== ===============
Liabilities & S/E:
Current Liabilities
Accounts Payable $5,804,144 $ 5,804,144
Advances from stockholders 2,034,860 2,034,860
Accrued Expenses 57,734 57,734
Deferred Revenue 750,535 750,535
------------- ----------- ------------------- ---------------
Total Current Liabilities 8,647,273 8,647,273
Stockholders Equity
Common Stock 14,200 660 (660) 14,200
Additional Paid in Capital 846,800 840 (840) 846,800
Retained Earnings (1,146,700) (346) 840 (1,146,206)
Accumulated other comprehensive income 17,501 17,501
------------- ----------- ------------------- ---------------
Total stockholders' deficit (268,199) 1,154 (660) (267,705)
------------- ----------- ------------------- ---------------
$8,379,074 $ 1,154 $ (660) $ 8,379,568
============= =========== =================== ===============
</TABLE>
See notes to unaudited pro forma condensed combined financial statements.
F-14
<PAGE>
CALLMATE TELECOM INTERNATIONAL, INC.
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
Three months ended November 30, 1999
<TABLE>
<CAPTION>
Pro Forma
Adjustments Pro Forma
Callmate Zee, Inc. Increase (Decrease) Combined
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales $ 2,502,010 $ 2,502,010
Cost of Sales 1,677,299 1,677,299
------------------- -------------- ----------------------- ------------------
Gross Profit 824,711 824,711
Selling, G&A 694,509 161 660 695,330
------------------- -------------- ----------------------- ------------------
Income from Operations 130,202 (161) (660) 129,381
Other Income 17,225 17,225
------------------- -------------- ----------------------- ------------------
Income (loss) before taxes $ 147,427 $ (161) $ (660) $ 146,606
=====================================================================================
Basic and diluted earnings (loss) per share $ 0.01
==================
</TABLE>
See notes to unaudited pro forma condensed combined financial statements.
F-15
<PAGE>
<TABLE>
<CAPTION>
CALLMATE TELECOM INTERNATIONAL, INC.
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
For the year ended August 31, 1999
Pro Forma
Adjustments Pro Forma
Callmate Zee, Inc. Increase (Decrease) Combined
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales $19,361,837 $19,361,837
Cost of Sales 16,483,683 16,483,683
------------------- -------------- ------------------------ ------------------
Gross Profit 2,878,154 2,878,154
Selling, G&A 3,238,920 161 660 3,239,741
------------------- -------------- ------------------------ ------------------
Income from Operations (360,766) (161) (660) (361,587)
Other Income 302,997 302,997
------------------- -------------- ------------------------ ------------------
Net loss $ (57,769) $ (161) $ (660) $ (58,590)
=====================================================================================
Basic and diluted earnings (loss) per share $ (0.00)
==================
</TABLE>
See notes to unaudited pro forma condensed combined financial statements.
F-16
<PAGE>
CALLMATE TELECOM INTERNATIONAL, INC.
NOTES TO PRO FORMA CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
(A) The following pro forma adjustments reflect Callmate's purchase of Zee, Inc.
Pro forma adjustments include the estimated direct costs of acquisition
($13,200) which has been allocated to goodwill and is being amortized over 20
years on the straight line basis.
(B) Operations of the Zee, Inc. for the period January 1, 1999, through December
31, 1999, are included in both the pro forma statements of operations for the
year ended August 31, 1999 and the three months ended November 30, 1999. These
amounts do not materially affect the results of operations for either periods
presented. The balance sheet of Zee, Inc. as of December 31, 1999 is presented
for November 30, 1999, since these amounts are not materially different.
F-17
<PAGE>
Signature
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 hereunto duly authorized.
CALLMATE TELECOM INTERNATIONAL, INC.
By: /s/ Mahmoud Hashmi
---------------------------------
Mahmoud Hashmi
Chief Executive Officer
