SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[XX] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended June 30, 2002
-------------
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
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 Number)
3040 East Commercial Boulevard, Ft. Lauderdale, FL. 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)
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 [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a
plan confirmed by a court. YES [ ] NO [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the Issuer's classes
of common stock, as of the latest practicable date.
12,833,500 SHARES OF COMMON STOCK, OF $.0001 PAR VALUE WERE ISSUED AT JUNE
30, 2002. OF THAT TOTAL, 12,808,500 SHARES ARE OUTSTANDING. THE COMPANY
HAS 25,000 SHARES IN TREASURY.
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - June 30, 2002 (Unaudited)
and December 31, 2001 (Audited).
Consolidated Statement of Operations - Three months and
six months ended June 30, 2002 and 2001 (Unaudited).
Consolidated Statement of Cash Flows - Six months ended
June 30, 2002 and 2001 (Unaudited).
Notes to Consolidated Financial Statements.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Change in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Securityholders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
-2-
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
PART I - FINANCIAL INFORMATION
---------------------
Item 1. Financial Statements
-3-
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
ASSETS
------
June 30, December 31,
2002 2001
----------- ------------
(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 37,632 $ 89,254
Marketable securities 680,245 590,390
Dividends receivable 1,119 5,240
Accrued interest receivable 12,951 -
Notes receivable - related party - 112,500
Other 2,104 5,522
---------- ----------
TOTAL CURRENT ASSETS 734,051 802,906
PROPERTY AND EQUIPMENT, net of
depreciation 1,412 1,717
OTHER ASSETS:
Security deposits 1,000 1,567
Accounts receivable - related party 12,500 12,500
Securities available for sale 321,300 360,000
Notes receivable - related parties 210,000 624,666
---------- ----------
TOTAL ASSETS $1,280,263 $1,803,356
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 9,941 $ 11,150
Loans payable - 134,664
Deferred gain - 119,637
---------- ----------
TOTAL CURRENT LIABILITIES 9,941 265,451
---------- ----------
STOCKHOLDERS' EQUITY
Common stock $.0001 par value;
authorized 25,000,000 shares in
2002 and 2001; 12,833,500 shares
issued in 2002 and 15,000,000
shares issued in 2001; 12,808,500
shares outstanding in 2002 and
14,975,000 shares outstanding
in 2001 1,283 1,500
Additional paid-in capital 2,625,079 2,721,891
Accumulated other comprehensive
income 105,690 -
Accumulated deficit (1,437,752) (1,161,508)
---------- ----------
1,294,300 1,561,883
Less treasury stock, 25,000 shares
in 2002 and 2001 at cost (23,978) (23,978)
TOTAL STOCKHOLDERS' EQUITY 1,270,322 1,537,905
---------- ----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $1,280,263 $1,803,356
========== ==========
See accompanying notes to consolidated financial statements.
-4-
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2002 2001 2002 2001
----------- ----------- ----------- -----------
REVENUES:
Dividends and interest $ 14,178 $ 13,767 $ 28,503 $ 29,712
Realized and unrealized gain
(loss) on marketable securities (211,443) 20,351 (213,976) 88,321
Consulting fees income - related party - 300,000 - 300,000
----------- ----------- ----------- -----------
(197,265) 334,118 (185,473) 418,033
COST AND EXPENSES:
General and administrative 50,716 36,100 90,771 59,547
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ (247,981) $ 298,018 $ (276,244) $ 358,486
=========== =========== =========== ===========
BASIC AND DILUTED NET INCOME
(LOSS) PER COMMON SHARE $ (.02) $ .02 $ (.02) $ .02
=========== =========== =========== ===========
BASIC AND DILUTED WEIGHTED AVERAGE
NUMBER OF COMMON SHARES OUTSTANDING 12,744,385 15,000,000 13,218,171 15,000,000
=========== =========== =========== ===========
See accompanying notes to consolidated financial statements
-5-
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Six Months Ended
June 30, June 30,
2002 2001
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (276,244) $ 358,486
---------- ----------
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating activities:
Depreciation 343 -
(Gain) loss on sale of marketable
securities 63,753 (72,866)
Allowance for market decline
of securities 128,684 (15,455)
Changes in operating assets
and liabilities:
(Increase) decrease in dividends
receivable 4,121 3,845
Increase in accrued interest receivable (12,951) -
Decrease in other assets 3,985 2,397
Increase (decrease) in accounts
payable and accrued expenses (1,209) 861
Purchase of marketable securities (306,795) (327,329)
Proceeds from sale of marketable
securities 168,855 478,258
---------- ----------
Total adjustments 48,786 69,711
---------- ----------
Net cash provided by (used in)
operating activities (227,458) 428,197
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Advances on notes receivable - affiliate - (63,000)
Principal collections of notes
receivable 407,529 -
Investment in unconsolidated
subsidiary - at cost - (550,000)
---------- ----------
Net cash provided by (used in)
investing activities 407,529 (613,000)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock 283,334 -
Repayment of borrowing (134,664) -
Cancellation of common stock (380,363) -
---------- ----------
Net cash provided by (used in)
financing activities (231,693) -
========== ==========
-6-
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Six Months Ended
June 30, June 30,
2002 2001
----------- -----------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS $ (51,622) $ (184,803)
CASH AND CASH EQUIVALENTS -
Beginning of period 89,254 361,481
---------- ----------
End of period $ 37,632 $ 176,678
========== ==========
See accompanying notes to consolidated financial statements.
-7-
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2002
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
---------------------
The accompanying unaudited financial statements have been
prepared in accordance with generally accepted accounting
principles for interim financial information and with the
instructions to Form 10-Q and Regulation S-X of the
Securities and Exchange Commission. Accordingly, they do
not include all of the information and footnotes required
by generally accepted accounting principles for complete
financial statements and should be read in conjunction
with Notes to Financial Statements contained in the
Company's Annual Report on Form 10-K for the year ended
December 31, 2001. In the opinion of management, all
adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been
included. Operating results for the six months ended
June 30, 2002 are not necessarily indicative of the
results that may be expected for the year ended December
31, 2002.
The accompanying financial statements include accounts of
the Company and its wholly-owned subsidiary, Corrections
Systems International, Inc. All significant intercompany
accounts and transactions have been eliminated in
consolidation.
The preparation of financial statements in accordance
with generally accepted accounting principles requires
management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the
date of the financial statements and revenues and
expenses during the reporting period. Actual results
could differ from those estimates.
NOTE 2 - NOTES RECEIVABLE - RELATED PARTY
--------------------------------
In October 2001, the Company loaned Tremor Entertainment,
Inc. $250,000 at 12% interest in exchange for 250,000
Warrants to purchase Tremor common stock at $.30 per
share. The note was repaid with interest by February
2002. The Company continues to hold 250,000 Warrants.
In addition, at December 31, 2001, the Company, together
-8-
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2002
(Unaudited)
with KM Financial, Inc., had a note receivable of
$500,000 from Tremor Entertainment, Inc. This note was
collateralized by 5,000,000 shares of the Company's
common stock. The Company's share of the note was
$416,666. The note was in default and the Company took
possession of the collateral, cancelled the 5,000,000
shares and issued 833,500 shares of its common stock to
KM Financial, Inc. on April 17, 2002, in settlement of
the Company's obligation to KM Financial, Inc. in the
amount of $83,334.
NOTE 3 - INVESTMENT IN MARKETABLE SECURITIES - LONG TERM
-----------------------------------------------
Included in this caption is 630,000 shares of Creative
Beauty Supply, Inc.
On January 15, 2002, the Company 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.
-9-
ITEM 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
-------------------------------------------------
The analysis of the Company's financial condition, liquidity,
capital resources and results of operations should be viewed in
conjunction with the accompanying financial statements, including
the notes thereto.
Financial Condition. At June 30, 2002, the Company had
current assets of $734,051 as compared to $802,906 at December 31,
2001, total assets of $1,280,263 as compared to $1,803,356 at
December 31, 2001, and stockholders' equity of $1,270,322 as
compared to $1,537,905 as of December 31, 2001. The decrease in
assets was primarily the result of the Company's collection of
notes receivable - related parties. The decrease in stockholders'
equity was primarily the result of the Company's loss for the
period.
Liquidity. The Company had a net decrease in cash and cash
equivalents for the six months ended June 30, 2002 of $51,622,
cash and cash equivalents at June 30, 2002 of $37,632, and cash and
cash equivalents of $89,254 at December 31, 2001.
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 loan commitments in place and has no
immediate need for additional financial credit.
Results of Operations. The Company continues to have no
commercial operations except for consulting for a related party.
Revenues for the six months ended June 30, 2002, were also derived
from investment activities.
The Company's revenues for the six months ended June 30, 2002
were $(185,473), as compared to $418,033 for the six months ended
June 30, 2001. The principal reasons for decreased revenue was a
reduction in related party consulting fee income and a decrease in
realized and unrealized gain (loss) on marketable securities.
The Company's revenues for the three months ended June 30,
2002 were $(197,265), as compared to $334,118 for the three months
ended June 30, 2001. The principal reason for decreased revenue
was a decrease in related party consulting fee income and a
decrease in realized and unrealized gain (loss) on marketable
securities.
Costs and expenses for the six months ended June 30, 2002 were
$90,771, as compared to $59,547 for the six months ended June 30,
2001. The increase was due to an increase in general and
administrative expenses.
-10-
Costs and expenses for the three months ended June 30, 2002
were $50,716, as compared to $36,100 for the three months ended
June 30, 2001. The increase was due to an increase in general and
administrative expenses.
The Company realized a net loss of $276,244 for the six months
ended June 30, 2002, as compared to net income of $358,486 for
the three months ended June 30, 2001. The decrease in net income
was primarily due to a decrease in related party consulting fee
income and a decrease in realized and unrealized gain (loss) on
marketable securities.
The Company realized a net loss of $247,981 for the three
months ended June 30, 2002, as compared to net income of $298,018
for the three months ended June 30, 2001. The decrease in net
income was primarily due to a decrease in related party consulting
fee income and a decrease in realized and unrealized gain (loss) on
marketable securities.
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 three months ended June 30, 2002.
-11-
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
PART II
Item 1. LEGAL PROCEEDINGS
-----------------
Not applicable.
Item 2. CHANGE IN SECURITIES
--------------------
Not Applicable
Item 3. DEFAULTS UPON SENIOR SECURITIES
-------------------------------
Not Applicable
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
---------------------------------------------------
Not Applicable
Item 5. OTHER INFORMATION
-----------------
Not Applicable
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) There are no exhibits filed with this Quarterly
Report.
(b) A current report on Form 8-K was filed in this
Quarter as follows:
Form 8-K dated June 12, 2002 reporting changes in the
Registrant's certifying accountant was filed on June 19,
2002.
Form 8-K/A dated June 12, 2002 in response to comments
from the SEC on its Form 8-K filed on June 19, 2002 was
filed on July 8, 2002.
Form 8-K/A-2 dated June 12, 2002 in response to
additional comments from the SEC on its Form 8-K/A filed
on July 8, 2002 was filed on July 22, 2002.
-12-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
RAM VENTURE HOLDINGS CORP.
Date: August 13, 2002 By: /s/Norman H. Becker
-----------------------------------
Norman H. Becker, President, Chief
Executive Officer and Chief
Financial Officer
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350
In connection with the accompanying Quarterly Report on Form
10-Q of RAM Venture Holdings Corp. for the quarter June 30, 2002,
I, Norman H. Becker, President, Chief Executive Officer and Chief
Financial Officer of RAM Venture Holdings Corp., hereby certify
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge
and belief, that:
(1) such Quarterly Report on Form 10-Q for the quarter ended June
30, 2002, fully complies with the requirements of section
13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) the information contained in such Quarterly Report on Form 10-
Q for the quarter ended June 30, 2002, fairly presents, in all
material respects, the financial condition and results of
operations of RAM Venture Holdings Corp.
RAM VENTURE HOLDINGS CORP.
Date: August 13, 2002 By: /s/Norman H. Becker
-----------------------------------
Norman H. Becker, President, Chief
Executive Officer and Chief
Financial Officer
-13-