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 September 30, 2002
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
33-02035-A
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(Commission File Number)
RAM VENTURE HOLDINGS CORP.
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(Exact name of Registrant as specified in its charter)
Florida 59-2508470
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
3040 East Commercial Boulevard, Ft. Lauderdale, FL. 33308
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(Address of Principal Executive Offices)
(954) 772-2297
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(Registrant's Telephone Number)
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(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
SEPTEMBER 30, 2002. OF THAT TOTAL, 12,808,500 SHARES WERE 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 - September 30, 2002 (Unaudited)
and December 31, 2001 (Audited).
Consolidated Statement of Operations - Three months and nine
months ended September 30, 2002 and 2001 (Unaudited).
Consolidated Statement of Cash Flows - Nine months ended
September 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
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RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
PART I - FINANCIAL INFORMATION
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Item 1. Financial Statements
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RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
ASSETS
------
September 30, December 31,
2002 2001
------------- ------------
(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 36,607 $ 89,254
Marketable securities 576,421 590,390
Dividends receivable 1,588 5,240
Accrued interest receivable 12,388 -
Notes receivable - related party - 112,500
Other 1,527 5,522
--------- ---------
TOTAL CURRENT ASSETS 628,531 802,906
PROPERTY AND EQUIPMENT, net of
depreciation 1,241 1,717
OTHER ASSETS:
Security deposits 1,000 1,567
Accounts receivable - related party 12,500 12,500
Securities available for sale 163,800 360,000
Notes receivable - related parties
net of $175,000 allowance for 2002 33,000 624,666
--------- ---------
TOTAL ASSETS $ 840,072 $1,803,356
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 4,102 $ 11,150
Loans payable - 134,664
Deferred gain - 119,637
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TOTAL CURRENT LIABILITIES 4,102 265,451
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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 (loss) (51,810) -
Accumulated deficit (1,714,604) (1,161,508)
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859,948 1,561,883
Less treasury stock, 25,000 shares
in 2002 and 2001 at cost (23,978) (23,978)
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TOTAL STOCKHOLDERS' EQUITY 835,970 1,537,905
--------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 840,072 $ 1,803,356
========= =========
See accompanying notes to consolidated financial statements.
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RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2002 2001 2002 2001
-------- -------- ------ ------
REVENUES:
Dividends and interest $ 14,563 $ 16,918 $ 43,066 $ 46,630
Realized and unrealized gain
(loss) on marketable securities (142,289) 100,941 (356,265) 189,262
Consulting fees income - related party - - - 300,000
---------- ---------- ---------- ----------
(127,726) 117,859 (313,199) 535,892
---------- ---------- ---------- ----------
OPERATING EXPENSES:
General and administrative 25,912 38,904 116,683 98,451
Provision for uncollectible amounts 175,000 - 175,000 -
---------- ---------- ---------- ----------
TOTAL OPERATING EXPENSES 200,912 38,904 291,683 98,451
NET INCOME (LOSS) $ (328,638) $ 78,955 $ (604,882) $ 437,441
========== ========== ========== ==========
BASIC AND DILUTED NET INCOME
(LOSS) PER COMMON SHARE $ (.03) $ .01 $ (.05) $ .03
========== ========== ========== =========
BASIC AND DILUTED WEIGHTED AVERAGE
NUMBER OF COMMON SHARES OUTSTANDING 12,808,500 15,000,000 13,080,114 15,000,000
========== ========== ========== ==========
See accompanying notes to consolidated financial statements
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RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Nine Months Ended
September 30, September 30,
2002 2001
------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (604,882) $ 437,441
--------- --------
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating activities:
Depreciation 515 -
Increase in allowance for
doubtful accounts 175,000 -
(Gain) loss on sale of marketable
securities 163,556 (72,866)
Allowance for market decline
(appreciation) of securities 193,034 (115,200)
Changes in operating assets
and liabilities:
(Increase) decrease in dividends
receivable 3,652 3,824
(Increase) decrease in accrued
interest receivable (12,388) -
(Increase) decrease in other assets 4,562 (1,013)
Increase (decrease) in accounts
payable and accrued expenses (7,048) 6,654
Purchase of marketable securities (381,937) (653,240)
Proceeds from sale of marketable
securities 235,453 478,258
Increase in deferred gain - net of
amortization - 119,637
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Total adjustments 374,399 (233,946)
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Net cash provided by (used in)
operating activities (230,483) 203,495
--------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Advances on notes receivable - affiliate - (318,000)
Increase in notes receivable - affiliate - (416,666)
Purchase of property and equipment - (2,060)
Principal collections of notes
receivable 409,529 -
--------- --------
Net cash provided by (used in)
investing activities 409,529 (736,726)
--------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock 283,334 -
Proceeds from borrowings - 225,000
Repayment of borrowing (134,664) -
Cancellation of common stock (380,363) -
--------- --------
Net cash provided by (used in)
financing activities (231,693) 225,000
--------- --------
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RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Nine Months Ended
September 30, September 30,
2002 2001
------------- --------------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS $ (52,647) $ (308,231)
CASH AND CASH EQUIVALENTS -
Beginning of period 89,254 361,481
--------- --------
End of period $ 36,607 $ 53,250
========= =========
See accompanying notes to consolidated financial statements.
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RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 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
nine months ended September 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.
-8-
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2002
(Unaudited)
In addition, at December 31, 2001, the Company, together 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.
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2002
(Unaudited)
NOTE 4 - POST-BALANCE SHEET EVENT
------------------------
At a Special Meeting of the Board of Directors, the Company
was authorized to issue a total of 2,500,000 shares of its
previously unissued restricted common stock in exchange for
consideration totaling $22,000 to certain officers, directors
and related parties.
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ITEM 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
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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 September 30, 2002, the Company had current
assets of $628,531 as compared to $802,906 at December 31, 2001, total
assets of $840,072 as compared to $1,803,356 at December 31, 2001, and
shareholders' equity of $835,970 as compared to $1,537,905 as of December
31, 2001. The decrease in assets was primarily the result of the
Company's decrease in notes receivable - related party. The decrease in
shareholders' 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 nine months ended September 30, 2002 of $52,647,
cash and cash equivalents at September 30, 2002 of $36,607, 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. Revenues for the nine months ended September 30, 2002, were
derived from investment activities.
The Company's revenues for the nine months ended September 30, 2002
were $(313,199), as compared to $535,892 for the nine months ended
September 30, 2001. The principal reason 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 September 30, 2002
were $(127,726), as compared to $117,859 for the three months ended
September 30, 2001. The principal reason for decreased revenue was a
decrease in related party consulting fees income and a decrease in
realized and unrealized gain (loss) on marketable securities.
Operating expenses for the nine months ended September 30, 2002 were
$291,683, as compared to $98,451 for the nine months ended September 30,
2001. The increase was principally principal due to an increase in
general and administrative expenses and a provision for doubtful
accounts.
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Operating expenses for the three months ended September 30, 2002
were $200,912, as compared to $38,904 for the three months ended
September 30, 2001. The increase was principally due to an increase in
general and administrative expenses and a provision for doubtful
accounts.
The Company realized a net loss of $(604,882) for the nine months
ended September 30, 2002, as compared to net income of $437,441 for the
six months ended September 30, 2001. The decrease in net income was
primarily due to a decrease in related party consulting fees income, a
decrease in realized and unrealized gain (loss) on marketable securities
and a provision for doubtful accounts.
The Company realized a net loss of $(328,638) for the three months
ended September 30, 2002, as compared to net income of $78,955 for the
three months ended September 30, 2001. The decrease in net income was
primarily due to a decrease in related party consulting fees income, a
decrease in realized and unrealized gain (loss) on marketable securities
and a provisions for doubtful accounts.
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 nine months ended September 30, 2002.
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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 required to be filed for the period
covered by this Report.
(b) Current reports on Form 8-K for the period covered by
this Report were filed 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/A2 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.
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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: November 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 September 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 September
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 September 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: November 13, 2002 By:/s/Norman H. Becker
-------------------------------------
Norman H. Becker, President, Chief
Executive Officer and Chief Financial
Officer
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CERTIFICATIONS
--------------
I, Norman Becker, President, Chief Executive Officer and Chief
Financial Officer of RAM Venture Holdings Corp., hereby certify that:
3. I have reviewed this quarterly report on Form 10-QSB of RAM Venture
Holdings Corp.;
4. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect
to the period covered by this quarterly report;
5. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented
in this quarterly report;
6. I am responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14 and
15d-14) for the registrant and I have:
(g) designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to me
by others within those entities, particularly during the
period in which this quarterly report is being prepared;
(h) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the "Evaluation
Date"); and
(i) presented in this quarterly report my conclusions about the
effectiveness of the disclosure controls and procedures based
on my evaluation as of the Evaluation Date;
5. I have disclosed, based on my most recent evaluation, to the
registrant's auditors and to the audit committee of registrant's
board of directors (or persons performing the equivalent function):
(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and report
financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
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(b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
6. I have indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors that
could significantly affect internal controls subsequent to the date
of my most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: November 13, 2002 /s/Norman H. Becker
-------------------------------------
Norman H. Becker, President, Chief
Executive Officer and Chief Financial
Officer
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