SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2001
33-02035-A
(Commission File Number)
RAM VENTURE HOLDINGS CORP.
(Exact name of Registrant as specified in its charter)
Florida 59-2508470
- ------------------------------- -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
3040 East Commercial Boulevard
Fort Lauderdale, Florida 33308
----------------------------------------
(Address of Principal Executive Offices)
(954) 772-2297
-------------------------------
(Registrant's Telephone Number)
----------------------------------------------------
(Former Name, Former Address and former Fiscal Year,
if changed since last report)
Securities registered pursuant to Section 12(b) of the Act
None None
- --------------------- ----------------------
(Title of Each Class) (Name of Each Exchange
on which Registered)
Securities registered pursuant to Section 12(g) of the Act
None None
- --------------------- ----------------------
(Title of Each Class) (Name of Each Exchange
on which Registered)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. YES [X] NO [ ]
The aggregate market value of the voting stock held by non-affiliates of
the Registrant as of February 26, 2002, was approximately $1,250,000.
12,000,000 shares of Common Stock, $.0001 par value, were issued at
February 26, 2002. Of that total, 11,975,000 shares are outstanding.
The Company has 25,000 shares in treasury.
1
RAM VENTURE HOLDINGS CORP.
TABLE OF CONTENTS
Page
----
PART I
Item 1. Business 3
Item 2. Properties 6
Item 3. Legal Proceedings 6
Item 4. Submission of Matters to a Vote of Security Holders 6
PART II
Item 5. Market for Company's Common Equity And Related
Stockholder Matters 7
Item 6. Selected Financial Data 8
Item 7. Management's Discussion and Analysis or Plan
of Operations 8
Item 8. Financial Statements and Supplementary Data 9
Item 9. Change in and Disagreements with Accountants on
Accounting and Financial Disclosure 9
PART III
Item 10. Directors, Executive Officers, Promoters and
Control Persons; Compliance with Section
16(a) of the Exchange Act 10
Item 11. Executive Compensation 10
Item 12. Security Ownership of Certain Beneficial Owners
and Management 11
Item 13. Certain Relationships and Related Transactions 12
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K 13
SIGNATURES 16
2
PART I
------
ITEM 1. BUSINESS
Background
- ----------
RAM Venture Holdings Corp. f/k/a Corrections Services, Inc. (the
"Company") was incorporated in the State of Florida in 1984. The Company
was organized for the purpose of developing and marketing a house arrest
program to relieve the need for incarceration in a jail or similar
facility. The Company was commercially active in that area until mid-
1998. On August 31, 1998, the Company sold its electronic monitoring
business.
Since August 31, 1998 the Registrant has had no remaining commercial
operations, intending to conserve its assets while seeking one or more
opportunities for merger, acquisition or suitable commercial enterprise.
On July 14, 2000, the Company changed its name to RAM Venture
Holdings Corp.
RAM Capital Management
- ----------------------
On June 6, 2000, the Company reached agreement with RAM Capital
Management and its principal, Mr. Steven Oshinsky ("Oshinsky"), to render
significant management consultation to the Company, to acquire a
substantial ownership interest in the Company's Common Stock and to
potentially assume a vacant seat on the Company's Board of Directors.
RAM Capital Management purchased 5,000,000 shares of the Company's
authorized but previously unissued Common Stock for the sum of Three
Hundred Thousand ($300,000) Dollars or $.06 per share and agreed to
immediate engagement as the Company's management consultant. RAM Capital
Management informed the Company that it is a privately-held venture
capital and advisory firm focused on undervalued growth companies and
engaged in providing private financing, sales and marketing assistance
and formation of strategic alliances. Its operations are, for the most
part, carried out by Oshinsky as the firm's General Manager.
With issuance of the 5,000,000 shares purchased in the transaction,
the Company had 15,000,000 shares of its Common Stock issued and
outstanding. The result of that transaction was an increase in the
shareholders' equity of $300,000 with a corresponding increase in its
current assets.
On July 14, 2000 the Company changed its name to RAM Venture
Holdings Corp. and confirmed the prior increase in its authorized capital
stock to 25,000,000 shares of Common Stock, par value $.0001. Following
change of the Company's name, the Company's OTC trading symbol was also
changed to "RAMV".
New Systems, Inc./Tremor Entertainment, Inc.
- --------------------------------------------
Following discussions with a control shareholder of New Systems,
Inc., now known as Tremor Entertainment, Inc., a publicly held Nevada
corporation located in Rancho Mirage, California during the first quarter
of 2001, affiliates of the Registrant purchased a total of 459,984 shares
of that company's issued and outstanding common stock for cash in the
amount of $125,000, or $.27 per share. The shares purchased in the
transaction, represented approximately 29% of the ownership interest in
New Systems, Inc. In addition, the Registrant itself purchased 360,000
authorized but previously unissued shares of New Systems, Inc.'s
3
restricted common stock from that company for $125,000. Upon conclusion
of those transactions, the Registrant and its affiliates had acquired a
total of 819,984 shares, or approximately 53% of the ownership interest
in New Systems, Inc. for total consideration of $250,000, or
approximately $.30 per share.
New Systems, Inc. was an inactive reporting company which had filed
and was current with all periodic reporting to which it was subject under
relevant provisions of the Securities Exchange Act of 1934. Following
completion of the stock acquisition transactions that company's officers
and Board of Directors were replaced with the officers and directors of
the Registrant, rendering New Systems, Inc., in the process, under common
control with the Registrant.
During the first week of May, 2001, the Registrant acquired an
additional 1,500,000 shares of the authorized but previously unissued
common stock of New Systems, Inc. in exchange for professional,
administrative and managerial services rendered and to be rendered to
that company by the Registrant's officers and directors. In addition,
New Systems, Inc. issued a further 300,000 shares of its restricted
common stock from authorized but previously unissued stock to KM
Financial, Inc., an Arizona consulting firm, for management consultation
services.
Upon completion of the new issuance of those 1,800,000 shares, the
number of shares of New Systems, Inc. common stock issued and outstanding
was 3,353,000. The Registrant's ownership interest in the company
amounted to 1,860,000 shares. When aggregated with the New Systems, Inc.
stock acquired by its affiliates, the Registrant could have been deemed
to control 2,319,984 shares, or approximately 69% of that company.
The Registrant intended, as the majority shareholder of New Systems,
Inc., to guide, assist and direct that company's search for one or more
merger and/or acquisition opportunities pursuant to which it might effect
a business combination for the ultimate benefit of its shareholders,
obviously including the Registrant and its affiliates. The Company
intended to seek and identify one or more suitable candidates for
combination in an appropriate form with New Systems, Inc. and to realize
hopefully substantial benefits in the process.
In the course of its efforts, the Registrant relied on services and
assistance rendered by KM Financial, Inc. by and through the consultation
services arrangement between that company and New Systems, Inc. While
the Company was optimistic that it would be able to benefit from those
efforts, there was no assurance that any benefit would ultimately
materialize, or that its efforts would be otherwise successful.
On July 25, 2001, the Registrant and KM Financial, Inc. sold an
aggregate of 1,800,000 shares of their restricted common stock in New
Systems, Inc. ("NEWY") to Tremor Entertainment, Inc., ("Tremor") a
closely held California company engaged in interactive entertainment
software development, for consideration totaling $505,000 and comprised
of $5,000 in cash and a secured Promissory Note (the "Promissory Note")
made by Tremor in the original principal amount of $500,000. The
Registrant retained 360,000 of its NEWY shares. The Company anticipated
that New Systems, Inc. would acquire Tremor in a reverse merger or some
other suitable form of business configuration. In addition, in October,
2001, the Registrant loaned Tremor $250,000 at twelve (12%) percent
interest in exchange for 250,000 Warrants to purchase Tremor common stock
at $.30 per share. The loan was repaid with interest by February, 2002.
The Company continues to hold the 250,000 Warrants at March 10, 2002.
Payment of the Promissory Note made by Tremor was collateralized by
a possessory pledge of 5,000,000 shares of the Registrant's Common Stock
by the Registrant's shareholder, RAM Capital Management, Inc. and its
principal, Oshinsky, a control person of the Registrant who is also
Chairman and Chief Executive Officer of the Promissory Note maker,
4
Tremor. Following a courtesy extension of the maturity date of the
Promissory Note, Tremor defaulted, the Registrant notified the pledgor,
essentially Oshinsky, took title to the pledged 5,000,000 shares of the
Registrant's Common Stock and cancelled them. On or about December 12,
2001, Tremor Entertainment, Inc., merged with New Tremor Acquisition
corp., a wholly owned subsidiary of New Systems, Inc. Subsequent to the
merger New Systems, Inc. changed its name to Tremor Entertainment, Inc.
and the company that was merged into the subsidiary of New Systems, Inc.,
formerly known as Tremor Entertainment, Inc., became Tremor Games, Inc.
The Registrant continues to be optimistic that its retained NEWY, now
Tremor, shares will increase in value.
As a result of the combined sale of 1,800,000 NEWY shares by the
Registrant and KM Financial, Inc., the Registrant is at March 10, 2002,
obligated to re-issue and deliver 833,500 shares of the Company's
restricted Common Stock which, when issued, will bring the Registrant's
issued and outstanding Common Stock to 12,808,500.
Subsequent Events
- -----------------
On January 15, 2002, the Registrant secured and exercised an option
to purchase 130,000 shares of the restricted Common Stock of Creative
Beauty Supply, Inc., a publicly held New Jersey corporation with
principal offices in Totowa, New Jersey. Through exercise of its
Warrant, the Registrant acquired 130,000 shares of Creative Beauty
Supply, Inc. common stock ("CVBS") at $.12 per Share or $15,600 in cash.
The Company's Warrant was acquired during earlier discussions with
CVBS in contemplation of an exchange of stock so that the Registrant and
Creative Beauty Supply, Inc. might obtain a significant position in each
other's common stock.
On January 30, 2002, following completion of the exchange of stock
discussions, the Registrant and Creative Beauty Supply, Inc. entered into
an agreement for an exchange of stock pursuant to which the Registrant
acquired 500,000 shares of the authorized but previously unissued common
stock of Creative Beauty Supply, Inc. in exchange for issuance and
conveyance of 2,000,000 shares of the Registrant's authorized but
previously unissued Common Stock. Upon completion of the exchange of
stock, CVBS had acquired 11.8% of the Company's issued and outstanding
Common Stock. For its part, when its CVBS stock acquired through
exercise of the option was aggregated with the 500,000 shares acquired
under the exchange of stock agreement, the Company, post-closing, had
acquired an 18.2% ownership interest in Creative Beauty Supply, Inc.
Creative Beauty Supply, Inc. is a fully reporting company which was
incorporated in the State of New Jersey on or about August 28, 1995. It
operates as a cosmetic and beauty supply distributor at both the retail
and wholesale levels. The company's product line is purchased by it from
a number of unaffiliated suppliers and manufacturers and is sold on its
premises to retail customers and directly to beauty salons. In general
the company handles "national" brands carrying consumer recognition
considered by the company to be of assistance with respect to sales of
its product lines which is advanced by national brand media advertising
at no cost to the company. Creative Beauty Supply distributes its
products to more than 200 nail and beauty salons almost exclusively
located within the northern and central portion of the State of New
Jersey.
The Registrant anticipates acquiring additional ownership interest
in Creative Beauty Supply, Inc. and intends to assist that company in
seeking one or more opportunities for merger, acquisition or other form
of combination for the purpose of expanding and enhancing the company's
5
operations and its shareholder value. The Registrant views the stock
exchange agreement transaction as valued at approximately $400,000.
Employees
- ---------
Mr. Norman H. Becker and Mr. Frank R. Bauer, are officers of the
Company each of whom currently devotes approximately ten (10%) percent
of their time to its activities. Ms. Diane Martini, an officer of the
Company, currently devotes approximately eighty (80%) percent of her time
to its activities. The Company has no other full-time employees See Part
III., Item 10, Directors and Executive Officers of the Registrant.
ITEM 2. PROPERTIES
The Company occupies its principal office space on a month-to-month
basis at a rental and administrative charge of $2,600 per month ($31,200
per annum).
ITEM 3. LEGAL PROCEEDINGS
The Company is not now a party to any litigation or, to its
knowledge, threatened litigation.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of the Company's security holders
during the fourth quarter of fiscal 2001, through solicitation of proxies
or otherwise.
6
PART II
-------
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The following table sets forth the range of bid and asked prices for
the Company's Common Stock on the Over-The-Counter Market for the period
indicated, as reported by the National Quotation Bureau, Inc. The Common
Stock is traded on the electronic bulletin board under the symbol RAMV.
The figures shown represent inter-dealer quotations without retail mark-
up, mark-down or commission and may not necessarily represent actual
transactions.
COMMON STOCK
------------
Period Bid Price Asked Price
- ------ --------- -----------
High Low High Low
---- --- ---- ---
First Quarter, 2000 $0.25 $0.20 $0.45 $0.40
Second Quarter, 2000 $0.25 $0.18 $0.40 $0.35
Third Quarter, 2000 $0.25 $0.20 $0.45 $0.35
Fourth Quarter, 2000 $0.28 $0.25 $0.50 $0.40
First Quarter, 2001 $0.27 $0.25 $0.50 $0.40
Second Quarter, 2001 $0.25 $0.20 $0.50 $0.40
Third Quarter, 2001 $0.25 $0.20 $0.45 $0.35
Fourth Quarter, 2001 $0.20 $0.18 $0.30 $0.25
January 1, through
February 26, 2002 $0.18 $0.13 $0.35 $0.30
- ----------------------------
(b) Holders. As of February 26, 2002, the approximate number of
recordholders of Common Stock of the Registrant was 879.
The Company is unable to determine the actual number of beneficial
holders of its Common Stock at February 26, 2002 due to Common Stock held
for stockholders "in street name", but estimates the current total to be
approximately 1185.
(c) Dividends. The Company has never paid a dividend and does not now
anticipate paying cash dividends in the foreseeable future. See Item
7.(a) Financial Condition.
7
ITEM 6. SELECTED FINANCIAL DATA
Summary of Statement of Operations:
- ----------------------------------
As of As of As of As of As of
12/31/01 12/31/00 12/31/99 12/31/98 12/31/97
----------- ----------- ---------- ---------- ----------
Revenue $ 570,263 $ 182,280 ($ 23,657) $ 37,838 $ 960
Oper. Exp. $ 138,395 $ 128,840 $ 333,775 $ 253,611 $ 314,452
Net Income (Loss) $ 431,868 $ 53,440 ($ 357,432) ($ 152,362) ($ 137,759)
Weighted No. of
shs. outstanding 14,975,000 12,528,895 7,563,050 6,804,336 5,936,893
Net Income (Loss)
per sh. Common
Stk. outstanding $ .03 - ($ .05) ($ .02) ($ .02)
(See Note A-Notes
to Fin. Stmts.)
Summary Balance Sheet Information
- ---------------------------------
As of As of As of As of As of
12/31/01 12/31/00 12/31/99 12/31/98 12/31/97
----------- ----------- ---------- ---------- ----------
Total Assets $1,803,356 $1,133,210 $ 666,273 $ 945,319 $1,758,638
Total Current
Liabilities $ 265,451 $ 3,195 $ 1,390 $ 2,035 $ 92,298
Tot. Current Assets $ 802,906 $ 974,109 $ 664,602 $ 943,446 $1,684,941
Stockholders' Equity $1,537,905 $1,130,015 $ 664,883 $ 943,284 $1,666,340
Cash Dividends $ -0- $ -0- $ -0- $ -0- $ -0-
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
(a) Financial Condition. As of December 31, 2001, the Company had
current assets of $802,906 compared to $974,109 at December 31, 2000,
total assets of $1,803,356 compared to $1,133,210 at December 31, 2000
and shareholders equity of $1,537,905 as compared to $1,130,015 at
December 31, 2000. The increase in current assets, total assets and
shareholders' equity was primarily the result of the operating profits
incurred during the year ended December 31, 2001.
Liquidity. The Company had a net decrease in cash and cash
equivalents for the year ended December 31, 2001 of $272,227, and cash
and cash equivalents at the end of the year of $89,254 as compared to an
increase in cash and cash equivalents of $339,422, and cash and cash
equivalents of $361,481 for the year ended December 31, 2000. See Part
II, Item 8., Financial Statements and Supplementary Data.
The Company continues to have no fixed executory obligations.
Capital Resources. The Company has no present material commitments
for additional capital expenditures. The Company has no outstanding
credit lines or commitments in place and no immediate need for additional
financial credit. There can be no assurance that it will be able to
secure additional credit borrowing, if needed.
Results of Operations. The Company's revenues for the fiscal period
ended December 31, 2001, were derived principally from investment
activities.
8
The Company's revenues increased $387,983 to $570,263 for the fiscal
year ended December 31, 2001, as compared to $182,280 for the same period
of 2000. The principal reason for increased revenue was increases in the
gain on marketable securities and consulting fees income.
Operating expenses increased $9,555 to $138,395 as compared to
$128,840 for the same period last year, principally due to an increase
in legal fees. The Company realized net income of $431,868 for the
fiscal year ended December 31, 2001, as compared to net income of $53,440
for the same period last year. The increase in net income was primarily
due to an increase in realized and unrealized gain on marketable
securities and an increase in consulting fees income.
The Company knows of no unusual or infrequent events or
transactions, nor significant economic changes that have materially
affected the amount of its reported income from continuing operations for
the year ended December 31, 2001.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See financial statements and supplementary data attached as Exhibit 1.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
9
PART III
--------
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
(a)(b) Identification of Directors and Executive Officers
--------------------------------------------------
Name Age Offices Held
---- --- ------------
Norman H. Becker 64 President/Director
Frank Bauer 57 Vice President/
Director
Diane Martini 54 Secretary/Treasurer/
Director
(1)(e) Business Experience.
-------------------
Norman H. Becker has been a director of the Company since July 1,
1987. On January 15, 1993, Mr. Becker was appointed the Company's
President. Since January, 1985, Mr. Becker has also been self-employed
in the practice of public accounting in Hollywood, Florida. Mr. Becker
is a graduate of City College of New York (Bernard Baruch School of
Business) and is a member of a number of professional accounting
associations including the American Institute of Certified Public
Accountants, the Florida Institute of Certified Public Accountants and
the Dade Chapter of the Florida Institute of Certified Public
Accountants.
Frank R. Bauer has been an Officer and a director of the Company
since February 15, 1988 and its Vice President since January 4, 1993.
Mr. Bauer was also President and Chief Executive Officer of Specialty
Device Installers, Inc., a privately held Florida corporation engaged in
outside plant utility and construction contracting. In September of 1996
Specialty Device Installers, Inc. was acquired by Guardian International,
Inc. and Mr. Bauer is also presently employed as a manager at Guardian
International, Inc. Mr. Bauer holds the Bachelor of Business
Administration Degree from Stetson University in Deland, Florida.
Diane Martini has been Secretary/Treasurer and a director of the
Company since January 12, 1993. Ms. Martini is also President and Chief
Executive Officer of Financial Communications, Inc., a privately held
Florida public relations and business consulting firm. Ms. Martini is
married to the Company's principal shareholder, Ronald A. Martini. See
Part IV., Item 12.
ITEM 11. EXECUTIVE COMPENSATION
Compensation
- ------------
Messrs. Norman H. Becker and Frank Bauer devote approximately 10%
of their time, respectively, to the Company's affairs. Ms. Diane Martini
currently devotes approximately 80% of her time to the Company's affairs.
There are no employment agreements in effect or presently contemplated
and there was no compensation paid to officers during the year ended
December 31, 2001.
10
- -----------------------------------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
- -----------------------------------------------------------------------------------------------------------
Annual Compensation Long-Term Compensation
--------------------------------- ------------------------------
Awards Payouts
---------------------------
Name and Other Restricted All
Principal Annual Stock Options/LTIP Other
Position Year Salary Bonus(2) Compensation Awards SARS Payouts Compensation
- -----------------------------------------------------------------------------------------------------------
Norman H. Becker 2000 $ -0- -- -- -- -- -- --
President (1) 2001 $ -0- -- -- -- -- -- --
Frank Bauer 2000 $ -0- -- -- -- -- -- --
Vice-President 2001 $ -0- -- -- -- -- -- --
President
Diane Martini 2000 $2,200 -- -- -- -- -- $ --
Secretary/ 2001 $ -0- -- -- -- -- -- --
Treasurer
All Executive 2000 $2,200 -- -- -- -- -- $ --
Officers & Former 2001 $ -0- -- -- -- -- -- --
Executive Officers
as a Group (3)
Persons (1)
- -------------------------------------
(1) Mr. Becker received a total of $23,235 in accounting fees from
the Company during 2001.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
(b) Security of Ownership of Management
-----------------------------------
Name of Amount and Nature Percent
Title of Beneficial of Beneficial of
Class Owner Ownership Class(1)
- -------- --------------- ----------------- --------
Common Stock Diane Martini (2) 425,000 Shares 3.5%
Common Stock Norman H. Becker 419,399 Shares 3.5%
Common Stock Frank R. Bauer 645,421 Shares 5.4%
Common Stock Creative Beauty Supply, Inc. 2,000,000 Shares 16.7%
Common Stock Ronald A. Martini (2) 475,000 Shares
4.0%
Common Stock Robert B. Yeakle 1,000,000 Shares 8.4%
Common Stock Corp. Invest. Assoc.(2) 1,015,000 Shares 8.5%
Common Stock All Officers and
Directors as a Group
(3 persons) 1,489,820 Shares 12.4%
- ---------------------------
11
(1) Based upon 11,975,000 shares outstanding at February 26, 2001.
(2) While Ronald A. Martini disclaims beneficial ownership of the
shares of Common Stock owned by Diane Martini and Corporate
Investment Associates, they may be deemed controlled by him.
When aggregated, Mr. Martini may be deemed to be in control of
1,915,000 shares of the Company's Common Stock, or 16% of its
ownership interest.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions with Management and Others
- ---------------------------------------
On July 25, 2001, the Company sold 1,800,000 shares of its
restricted common stock in New Systems, Inc. ("NEWY") to Tremor
Entertainment, Inc. ("Tremor"), a closely-held California company,
whose Chairman and Chief Executive Officer, Steven Oshinsky, is
also the principal of the Company's control-person shareholder, RAM
Capital Management, for consideration totalling $505,000. The
consideration was comprised of $5,000 cash and a secured promissory
note made by Tremor in the original principal amount of $500,000.
The Note was due on February 7, 2002 and neither bore nor accrued
interest. The Note, payable to the Registrant, was guaranteed by
a certain pledge agreement by RAM Capital Management, the Company's
shareholder and a private equity fund managed by Oshinsky pledging
5,000,000 shares of the Registrant's own Common Stock against
default of the Promissory Note. Tremor defaulted on the note
payable to the Registrant resulting in RAM Capital Management
acquiring the Note. As a result, the Registrant exercised its
rights under the pledge agreement and reacquired 5,000,000 shares
of its Common Stock from RAM Capital Management in exchange for RAM
Capital Management's acquisition of the defaulted Note and the
reacquired 5,000,000 shares were cancelled by the Registrant. To
the Company's knowledge and belief, RAM Capital Management, in the
process, thereby terminated its ownership interest in the Company.
Certain Business Relationships
- ------------------------------
During the year ended 12/31/01, the Company paid a total of
$40,800 to various affiliates of the Company's shareholder, Ronald
A. Martini, in the nature of consulting fees, rentals and office
and administrative services. See "Financial Statements - Notes to
Consolidated Financial Statements, Note E".
During the year ended December 31, 2001, the Company paid its
President and director, Norman H. Becker accounting fees of
$23,235.
12
PART IV
-------
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS
ON FORM 8-K
Financial Statements:
Report of Independent Certified Public Accountant.
Consolidated Balance Sheet - December 31, 2001 and
December 31, 2000.
Consolidated Statement of Operations - Three Years Ended
December 31, 2001.
Consolidated Statement of Shareholders' Equity - Three
Years Ended December 31, 2001.
Consolidated Statement of Cash Flows - Three Years Ended
December 31, 2001.
Notes to Consolidated Financial Statements.
2. Schedules:
All other financial statements not listed have been
omitted since the required information is included in the
financial statements or the notes thereto, or is not
applicable or required.
Exhibits:
Articles of Incorporation and By-Laws:
Articles of Incorporation and By-Laws incorporated by
reference to the filing of the original registration
statement on Form S-18.
Instruments defining the rights of security holders,
including indentures:
Not applicable.
Voting Trust Agreement:
Not applicable.
Material Contracts:
Not applicable.
13
Statement Re: Computation of per share income (loss):
See Note "A"., Notes to Consolidated Financial Statements
and Statement of Operations Three Years Ended December
31, 2001.
Statements RE: Computation of Ratios:
Not applicable.
Annual Report to Security Holders, Form 10-Q or quarterly
report to security holders:
Not applicable.
Letter re: Change in accounting principles:
Not applicable.
Previously unfiled documents:
Not applicable.
Other Documents or Statements to Security Holders:
Not applicable.
Subsidiaries of the Registrant:
Corrections Services International, Inc.
Published report regarding matters submitted to vote of
Security Holders:
Not applicable.
Consents of experts and counsel:
Not applicable.
Power of Attorney:
Not applicable.
14
Additional Exhibits:
There were no current reports on Form 8-K filed by the
Registrant during the fourth quarter of 2001.
On January 30, 2002, the Registrant filed a Current
Report on Form 8-K dated January 30, 2002, reporting that
the Registrant had entered into an agreement for an
exchange of common stock with Creative Beauty Supply,
Inc.
15
SIGNATURES
----------
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Fort
Lauderdale, State of Florida, on the 19th day of March, 2002.
RAM VENTURE HOLDINGS CORP.
BY: /s/Norman H. Becker
--------------------------------
Norman H. Becker, President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the Registrant in the capacities and on the dates indicated.
Signatures Title Date
---------- ----- ----
(i) Principal Executive Officer President March 19, 2002
/s/Norman H. Becker
----------------------------
Norman H. Becker
(ii) Principal Financial and Secretary March 19, 2002
Accounting Officer
/s/Diane Martini
----------------------------
Diane Martini
(iii)A Majority of the Board of
Directors
/s/Frank Bauer Director March 19, 2002
----------------------------
Frank Bauer
/s/Norman H. Becker Director March 19, 2002
----------------------------
Norman H. Becker
16
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2001
17
CONTENTS
--------
PAGE
----
INDEPENDENT AUDITOR'S REPORT F-1
CONSOLIDATED BALANCE SHEETS F-2
CONSOLIDATED STATEMENTS OF OPERATIONS F-3
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY F-4
CONSOLIDATED STATEMENTS OF CASH FLOWS F-5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS F-6 - F-11
18
BAUM & COMPANY, P.A.
Certified Public Accountants
1515 University Drive - Suite 209
Coral Springs, Florida 33071
(954) 752-1712
Board of Directors
Ram Venture Holdings Corp.
and Subsidiary
(Formerly Corrections Services, Inc.)
Fort Lauderdale, Florida
INDEPENDENT AUDITOR'S REPORT
I have audited the accompanying consolidated balance sheets of Ram
Venture Holdings Corp. and Subsidiary (formerly Corrections Services,
Inc.) as of December 31, 2001 and 2000, and the related consolidated
statements of operations, shareholders' equity and cash flows for each
of the three years ended December 31, 2001. These consolidated financial
statements are the responsibility of the Company's management. My
responsibility is to express an opinion on these consolidated financial
statements based on my audits.
I conducted my audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that
I 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. I believe that my
audits provide a reasonable basis for my opinion.
In my opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of Ram Venture Holdings Corp. and Subsidiary (formerly
Corrections Services, Inc.) as of December 31, 2001 and 2000, and the
results of its consolidated operations and its consolidated cash flows
for the three years ended December 31, 2001, 2000 and 1999, in conformity
with accounting principles generally accepted in the United States of
America.
/s/ Baum & Company, P.A.
Coral Springs, Florida
March 13, 2002
19
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2001 AND 2000
ASSETS
2001 2000*
---------- ----------
CURRENT ASSETS:
Cash and cash equivalents $ 89,254 $ 361,481
Investment in marketable securities 590,390 597,846
Dividends receivable 5,240 9,823
Notes receivable - related party 112,500 -
Other 5,522 4,959
---------- ----------
Total Current Assets 802,906 974,109
PROPERTY AND EQUIPMENT - net of accumulated
depreciation of $343 in 2001 1,717 -
OTHER ASSETS:
Security deposits 1,567 1,601
Accounts receivable - related party 12,500 12,500
Investment in marketable securities 360,000 -
Notes receivable - related party 624,666 145,000
---------- ----------
$1,803,356 $1,133,210
========== ==========
*Reclassified for comparative purposes.
See accompanying notes to consolidated financial statements.
F-2 (a)
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2001 AND 2000
LIABILITIES AND SHAREHOLDERS' EQUITY
2001 2000*
---------- ----------
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 11,150 $ 3,195
Loans payable 134,664 -
Deferred gain 119,637 -
---------- ----------
Total Current Liabilities 265,451 3,195
---------- ----------
SHAREHOLDERS' EQUITY
Common stock $.0001 par value;
25,000,000 shares authorized in 2001 and
2000; 15,000,000 shares issued in 2001
and 2000; 14,975,000 shares outstanding
in 2001 and 15,000,000 shares outstanding
in 2000 1,500 1,500
Additional paid-in capital 2,721,891 2,721,891
Accumulated deficit (1,161,508) (1,593,376)
---------- ----------
1,561,883 1,130,015
Less treasury stock, 25,000 shares
at December 31, 2001 at cost (23,978) -
---------- ----------
Total shareholders' equity 1,537,905 1,130,015
---------- ----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $1,803,356 $1,133,210
========== ==========
F-2(b)
RAM VENTURE HOLDINGS CORP. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE YEARS ENDED DECEMBER 31, 2001
2001 2000 1999
----------- ----------- ----------
REVENUES:
Interest and dividends $ 66,089 $ 75,629 $ 58,874
Realized and unrealized gains
(losses) in marketable
securities 204,174 106,651 (95,031)
Consulting fees - related party 300,000 - 12,500
----------- ----------- ----------
570,263 182,280 (23,657)
----------- ----------- ----------
OPERATING EXPENSES:
General and administrative 134,456 128,840 333,775
Depreciation 343 - -
Interest 3,596 - -
----------- ----------- ----------
138,395 128,840 333,775
----------- ----------- ----------
NET INCOME (LOSS) $ 431,868 53,440 (357,432)
----------- ----------- ----------
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 14,975,000 12,528,895 7,563,050
=========== =========== ==========
NET INCOME (LOSS) PER
COMMON SHARE $ .03 $ - $ (.05)
=========== =========== ==========
See accompanying notes to consolidated financial statements.
F-3
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
THREE YEARS ENDED DECEMBER 31, 2001
Common Stock
$.0001 Par Value Additional
Auth. 25,000,000 Shares Paid-In Accumulated Treasury
Shares Amount Capital (Deficit) Stock Total
--------- ------- ----------- ----------- ---------- ----------
Balance - December 31, 1998 5,966,975 $ 728 $ 2,821,667 $(1,289,384) $ (589,727) $ 943,284
Issuance of 309,925 shares 309,925 31 79,000 - - 79,031
Net loss for the period - - - (357,432) - (357,432)
---------- ------- ----------- ----------- ---------- ----------
Balance - December 31, 1999 6,276,900 759 2,900,667 (1,646,816) (589,727) 664,883
Sale of 1,309,925 shares
from treasury 1,309,925 - (589,727) - 589,727 -
Sale of 7,413,167 new
shares 7,413,167 741 410,951 - - 411,692
Adjustment for fractional
shares 8 - - - - -
Net income for the period - - - 53,440 - 53,440
---------- ------- ----------- ----------- ---------- ----------
Balance - December 31, 2000 15,000,000 1,500 2,721,891 (1,593,376) - 1,130,015
Reclassification of
investment security to
treasury shares (25,000) - - - (23,978) (23,978)
Net income for the period - - - 431,868 - 431,868
---------- ------- ----------- ----------- ---------- ----------
Balance - December 31, 2001 14,975,000 $ 1,500 $ 2,721,891 $(1,161,508) $ (23,978) $1,537,905
========== ======= =========== =========== ========== ==========
See accompanying notes to consolidated financial statements.
F-4
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE YEARS ENDED DECEMBER 31, 2001
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
2001 2000 1999
--------- --------- ---------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss) $ 431,868 $ 53,440 $(357,432)
--------- --------- ---------
Adjustments to reconcile
net income (loss) to net cash
(used in) provided by
operating activities:
Depreciation 343 - -
Provision for doubtful accounts - - 155,031
(Gain) loss on sale of marketable
securities (57,936) 21,105 24,681
Allowance for market decline
of securities (145,042) (127,756) 70,350
Change in operating assets
and liabilities:
(Increase) decrease in dividends
receivable 4,583 (1,348) 7,248
(Increase) decrease in security
deposits (529) (1,800) (2,773)
(Decrease) increase in accounts
payable and accrued expenses 12,073 1,805 (645)
Increase in deferred gain net
of amortization 119,637 - -
Purchase of marketable securities (691,220) (110,041) (214,677)
Proceeds from sale of
marketable securities 523,222 142,325 367,652
--------- --------- ---------
Total adjustments (234,869) (75,710) 406,867
--------- --------- ---------
Net cash provided by (used in)
operating activities 196,999 (22,270) 49,435
--------- --------- ---------
Continued on next page
F-5(a)
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE YEARS ENDED DECEMBER 31, 2001
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(Continued)
2001 2000 1999
--------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Advances on notes
receivable - related parties $(323,000) $ (18,500) $ (30,000)
Advances on notes
receivable - other - - (150,000)
Principal collection of
notes receivable - related parties 147,500 - -
Purchase of property and equipment (2,060) - -
Increase in notes receivable
- affiliate (416,666) - -
--------- --------- ---------
Net cash (used in)
financing activities (594,226) (18,500) (180,000)
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock - 380,192 79,031
Proceeds from borrowings 225,000 - -
Repayment of borrowings (100,000) - -
--------- --------- ---------
Net cash provided by (used in)
financing activities 125,000 380,192 79,031
--------- --------- ---------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS (272,227) 339,422 (51,534)
CASH AND CASH EQUIVALENTS -
Beginning of year 361,481 22,059 73,593
--------- --------- ---------
End of year $ 89,254 $ 361,481 $ 22,059
========= ========= =========
SUPPLEMENTAL DISCLOSURE:
Interest expense paid $ 3,596 $ - $ -
========= ========= =========
See accompanying notes to consolidated financial statements.
F-5(b)
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Capitalization - RAM Venture Holdings Corp. (the
"Company") was incorporated under the laws of the State of Florida
on September 14, 1984. The Company's articles of incorporation
originally provided for the issuance of 100 shares of common stock,
with a par value of $5 per share. On November 13, 1985, the
authorized number of shares was increased to 10,000,000 shares, with
a par value of $.0001 per share. In that connection, the 100 shares
of common stock outstanding prior to that date were exchanged for
2,115,000 shares.
General - On August 31, 1998, the Company sold its interest in its
electronic monitoring business and is presently seeking merger
opportunities.
Principles of Consolidation - The consolidated financial statements
include the accounts of the Company, and its wholly-owned
subsidiary, Corrections Systems International, Inc. All significant
intercompany accounts and transactions have been eliminated.
Cash and Cash Equivalents - For purposes of the balance sheet and
statement of cash flows, the Company considers all highly liquid
debt instruments purchased with a maturity of three months or less
to be cash equivalents.
Investment in Marketable Securities - The Company's investment in
marketable securities consists of trading securities which are
carried at market value in the accompanying balance sheets.
Unrealized gains and losses resulting from fluctuations in market
price are reflected in the statement of operations.
Property and Equipment - Property and equipment is recorded at cost.
Depreciation is computed using the straight-line method over the
five year estimated useful lives of the assets.
Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statement and the reported
amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
F-6
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Earnings (Loss) per Share - In 1997, the financial accounting
standards board issued SFAS No. 128, earnings per share. Basic
earnings (loss) per share is computed by dividing income (loss)
available to common shareholders by the weighted average number of
common shares outstanding for the year.
Income Taxes - Deferred taxes are provided on the "liability" method
whereby deferred tax assets are recognized for operating loss
carryforwards. Deferred tax assets are reduced by a valuation
allowance, when, in the opinion of management, it is more likely
than not that some portion or all of the deferred tax asset will not
be realized.
NOTE B - PROPERTY AND EQUIPMENT
Property and equipment consist of the following:
2001 2000
-------- --------
Office furniture and equipment $ 56,906 $ 54,846
Less accumulated depreciation
and amortization 55,189 54,846
-------- --------
$ 1,717 $ -
======== ========
NOTE C - NOTE RECEIVABLE - AFFILIATE
Notes Receivable Affiliates consists of the following:
2001 2000
-------- --------
10% Unsecured Note. Due on
demand from a company related
by common officers and
shareholders $ 20,000 $ 20,000
10% Unsecured Note. Due on
demand from the company who
acquired the home monitoring
business of the Company. The
companies are also affiliated
by common officers and
shareholders 45,000 63,500
F-7
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
NOTE C - NOTE RECEIVABLE - AFFILIATE (Cont'd)
2001 2000
-------- --------
5% Unsecured Note. Due on demand
from the company that acquired
the home monitoring business of
the Company. The companies are
also affiliated by common officers
and shareholders $ 61,500 $ -
8% Note Receivable. Due from
officers and directors 16,500 15,000
8% Note Receivable. Due from
a former officer and director
of the Company 50,000 46,500
12%$ Unsecured Note. Due from
an affiliated company. This
note was paid in full during
February 2002 112,500 -
Secured Obligation. This
obligation is due from an
affiliated company. The
obligation is collateralized
by 4,166,500 shares of the
Company's common stock. The
debtor defaulted and accordingly
the Company informed the debtor
and the pledgor that the Company
is taking title to the pledged
securities. 416,666 -
Other - 15,000 -
-------- --------
$737,166 $145,000
======== ========
Interest earned on notes amount to $20,225 in 2001 and $10,775 in
2000.
F-8
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
NOTE D - LOAN PAYABLE
This obligation in the amount of $134,644, was paid in full
subsequent to December 31, 2001.
NOTE E - INCOME TAXES
Components of deferred tax benefits are as follows:
Current Tax Asset
-----------------
2001 2000
--------- ----------
Allowance for market decline
of equity securities $ 204,000 $ -
--------- ----------
Total Current Tax Benefit 204,000 -
--------- ----------
Non-Current Tax Asset
---------------------
Tax loss carry forward $ 260,000 $ 269,000
--------- ----------
Total Non-current Benefit 260,000 269,000
--------- ----------
Total Current and
Noncurrent Tax Benefit 464,000 290,000
Valuation Allowance (464,000) (290,000)
--------- ----------
Net Deferred Tax Assets $ - $ -
========= ==========
At December 31, 2001, management is unable to predict profitable
operations for the Company in the future. Accordingly, a 100%
valuation allowance has been provided.
At December 31, 2001, the Company had available net operating loss
carryforwards, for tax reporting purposes, of approximately
$1,000,000 expiring through 2015.
NOTE F - RELATED PARTY TRANSACTIONS
Professional and Consulting Fees - the Company paid officers,
directors, shareholders and affiliates professional and consulting
fees amounting to $40,848 in 2001, $43,669 in 2000, and $72,215 in
1999.
Office Expense - Office expenses were paid to shareholders and/or
entities affiliated through common officers, directors and
shareholders amounting to $10,200 in 2001, $10,200 in 2000, and
$22,950 in 1999.
F-9
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
NOTE F - RELATED PARTY TRANSACTIONS (Cont'd)
Rent Expense - Rentals paid to entities having officers, directors
and shareholders in common with the Company amounted to $21,000 in
2001, $21,000 in 2000 and $21,000 in 1999.
NOTE G - INVESTMENTS IN MARKETABLE SECURITIES
At December 31, 2001, the Company's investment in marketable equity
securities consisted entirely of trading securities as follows:
Market
Cost Value
---------- ----------
December 31, 2001 $1,126,977 $ 936,943
---------- ----------
December 31, 2000 $ 933,691 $ 597,847
---------- ----------
Unrealized losses on market values amounted to $190,802 at 2001,
$335,844 at 2000, and $463,601 at 1999.
NOTE H - CONCENTRATIONS OF CREDIT RISK
Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of temporary cash
investments, investments in marketable securities and accounts
receivable. The Company places its cash investments and investments
in marketable securities with high quality institutions and limits
the amount of credit exposure to any one institution or investee.
NOTE I - FAIR VALUE OF FINANCIAL INSTRUMENTS
The following summarizes the major methods and assumptions used in
estimating the fair values of financial instruments:
Cash and Cash Equivalent - The carrying amount approximates fair
value due to the liquidity of these financial instruments.
Investments - The fair value of investments are based upon quoted
market prices for those investments.
F-10
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
NOTE J - POST-BALANCE SHEET EVENT
On January 15, 2002, the Registrant secured and exercised an option
to purchase 130,000 shares of the restricted Common Stock of
Creative Beauty Supply, Inc., a publicly held New Jersey corporation
with principal offices in Totowa, New Jersey. Through exercise of
its Warrant, the Registrant acquired 130,000 shares of Creative
Beauty Supply, Inc. ("CVBS") at $.12 or $15,600 in cash.
The Company's Warrant was acquired during earlier discussions with
CVBS in contemplation of an exchange of stock so that the Registrant
and Creative Beauty Supply, Inc. might obtain a significant position
in each other's common stock.
On January 30, 2002, following completion of the exchange of stock
discussions, the Registrant and Creative Beauty Supply, Inc. entered
into an agreement for an exchange of stock pursuant to which the
Registrant acquired 500,000 shares of the authorized but previously
unissued Common Stock of Creative Beauty Supply, Inc. in exchange
for issuance and conveyance of 2,000,000 shares of the Registrant's
authorized but previously unissued Common Stock. Upon completion
of the exchange of stock, CVBS had acquired 11.8% of the Company's
issued and outstanding Common Stock. For its part, when its CVBS
stock acquired through exercise of the option is aggregated with the
500,000 shares acquired under the exchange of stock agreement, the
Company, post-closing, had acquired an 18.2% ownership interest in
Creative Beauty Supply, Inc.
F-11