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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, 2002
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 No.)
3040 East Commercial Boulevard
Fort Lauderdale, Florida 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)
Securities registered pursuant to Section 12(b) of the Act
None None
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(Title of Each Class) (Name of Each
Exchange on which Registered)
Securities registered pursuant to Section 12(g) of the Act
None None
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(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 March 24, 2003, was approximately $575,000.
15,333,500 shares of Common Stock, $.0001 par value, were issued at March
24, 2003. Of that total, 15,308,500 shares are outstanding. The Company
has 25,000 shares in treasury.
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RAM VENTURE HOLDINGS CORP.
TABLE OF CONTENTS
Page
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PART I
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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
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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
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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
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Item 14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K 13
SIGNATURES 16
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PART I
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ITEM 1. BUSINESS
Background
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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
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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.
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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
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authorized but previously unissued shares of New Systems, Inc.'s
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
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Chairman and Chief Executive Officer of the Promissory Note maker,
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.
Creative Beauty Supply, Inc.
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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
operations and its shareholder value. The Registrant views the stock
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exchange agreement transaction as valued at approximately $400,000.
Subsequent Event
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On January 31, 2003, the Registrant entered into a note payable with
Proguard Protection Services, Inc. in the amount of $50,000. Interest
is payable quarterly beginning June 30, 2003 and the principal is due
January 31, 2005. The note is convertible into 150,000 shares of the
common stock of Proguard Protection Services, Inc. at anytime prior to
January 31, 2005 at the option of RAM Venture Holdings Corporation only.
Employees
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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), except for one month when $2,000 was paid.
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 2002, through solicitation of proxies
or otherwise.
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PART II
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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
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Period Bid Price Asked Price
High Low High Low
---- --- ---- ---
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
First Quarter, 2002 $0.25 $0.13 $0.28 $0.32
Second Quarter, 2002 $0.20 $0.13 $0.35 $0.30
Third Quarter, 2002 $0.18 $0.12 $0.30 $0.25
Fourth Quarter, 2002 $0.15 $0.10 $0.25 $0.20
January 1, through
March 17, 2003 $0.15 $0.10 $0.25 $0.20
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(b) Holders. As of March 17, 2003, the approximate number of
recordholders of Common Stock of the Registrant was 782.
The Company is unable to determine the actual number of beneficial
holders of its Common Stock at March 17, 2003 due to Common Stock held
for stockholders "in street name", but estimates the current total to be
approximately 1215.
(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.
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ITEM 6. SELECTED FINANCIAL DATA
Summary of Statement of Operations:
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As of As of As of As of As of
12/31/02 12/31/01 12/31/00 12/31/99 12/31/98
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Revenue $ (225,283) $ 570,263 $ 182,280 ($ 23,657) $ 37,838
Oper. Exp. $ 332,096 $ 138,395 $ 128,840 $ 333,775 $ 253,611
Net Income (Loss) $ (557,379) $ 431,868 $ 53,440 ($ 357,432) ($ 152,362)
Weighted No. of
shs. outstanding 13,386,076 14,975,000 12,528,895 7,563,050 6,804,336
Net Income (Loss)
per sh. Common
Stk. outstanding $ (.03) $ .03 - ($ .05) ($ .02)
(See Note A-Notes
to Fin. Stmts.)
Summary Balance Sheet Information
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As of As of As of As of As of
12/31/02 12/31/01 12/31/00 12/31/99 12/31/98
----------- ----------- ----------- ---------- ----------
Total Assets $ 847,387 $1,803,356 $1,133,210 $ 666,273 $ 945,319
Total Current
Liabilities $ -0- $ 265,451 $ 3,195 $ 1,390 $ 2,035
Tot. Current Assets $ 642,318 $ 802,906 $ 974,109 $ 664,602 $ 943,446
Stockholders' Equity $ 847,387 $1,537,905 $1,130,015 $ 664,883 $ 943,284
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, 2002, the Company had
current assets of $642,318 compared to $1,162,906 at December 31, 2001,
total assets of $847,387 compared to $1,803,356 at December 31, 2001 and
shareholders equity of $847,387 as compared to $1,537,905 at December 31,
2001. The decrease in current assets, total assets and shareholders'
equity was primarily the result of the operating losses incurred during
the year ended December 31, 2002.
Liquidity. The Company had a net increase in cash and cash
equivalents for the year ended December 31, 2002 of $53,189, and cash and
cash equivalents at the end of the year of $142,443 as compared to a
decrease in cash and cash equivalents of $272,227, and cash and cash
equivalents of $89,254 for the year ended December 31, 2001. 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, 2002, were derived principally from investment
activities.
The Company's revenues decreased $795,546 to $(225,283) for the
fiscal year ended December 31, 2002, as compared to $570,263 for the same
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period of 2001. The principal reason for decreased revenue was a
decrease in the realized and unrealized loss on marketable securities and
a decrease in related party consulting fees.
Operating expenses increased $193,701 to $332,096 as compared to
$138,395 for the same period last year, principally due to a provision
for doubtful accounts. The Company realized net loss of $(557,379) for
the fiscal year ended December 31, 2002, as compared to net income of
$431,868 for the same period last year. The decrease in net income was
primarily due to an increase in realized and unrealized (loss) on
marketable securities and a provision 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 year ended December 31, 2002.
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.
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
(a)(b) Identification of Directors and Executive Officers
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Name Age Offices Held
---- --- ------------
Norman H. Becker 65 President/Director
Frank Bauer 58 Vice President/Director
Diane Martini 55 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
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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, 2002.
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SUMMARY COMPENSATION TABLE
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Annual Compensation Long-Term Compensation
--------------------------------- ------------------------------
Awards Payouts
------------------------------
Name and Other Restricted Options/ All
Principal Annual Stock LTIP Other
Position Year Salary Bonus(2) Compensation Awards SARS Payouts Compensation
- -----------------------------------------------------------------------------------------------------------
Norman H. Becker 2001 $ -0- -- -- -- -- -- --
President (1) 2002 $ -0- -- -- -- -- -- --
Frank Bauer 2001 $ -0- -- -- -- -- -- --
Vice-President 2002 $ -0- -- -- -- -- -- --
President
Diane Martini 2001 $ -0- -- -- -- -- -- --
Secretary/ 2002 $ -0- -- -- -- -- -- --
Treasurer
All Executive 2001 $ -0- -- -- -- -- -- --
Officers & Former 2002 $ -0- -- -- -- -- -- --
Executive Officers
as a Group (3)
Persons (1)
(1) Mr. Becker's firm received a total of $24,672 in accounting fees
from the Company during 2002.
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) 525,000 Shares 3.4%
Common Stock Norman H. Becker 519,399 Shares 3.4%
Common Stock Frank R. Bauer 745,421 Shares 4.9%
Common Stock Creative Beauty Supply, Inc. 2,000,000 Shares 13.8%
Common Stock Ronald A. Martini (2) 475,000 Shares 3.1%
Common Stock Corp. Invest. Assoc.(2) 1,865,000 Shares 12.2%
Common Stock Professional Programmers,
Inc.(2) 2,000,000 Shares 13.1%
Common Stock All Officers and Directors
as a Group
(3 persons) 1,789,820 Shares 11.7%
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-11-
(1) Based upon 15,308,500 shares outstanding at March 17, 2003.
(2) While Ronald A. Martini disclaims beneficial ownership of the shares
of Common Stock owned by Diane Martini, Corporate Investment
Associates and Professional Programmers, Inc., they may be deemed
controlled by him. When aggregated, Mr. Martini may be deemed to
be in control of 4,765,000 shares of the Company's Common Stock, or
31% 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 December 31, 2002, the Company paid a total
of $52,250 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, 2002, the Company paid the
accounting firm of its President and director, Norman H. Becker fees of
$24,672. In addition, the Company paid the accounting firm of David A.
Becker, P.A. accounting fees of $2,150. David Becker is the son of
Norman H. Becker.
-12-
PART IV
ITEM 13. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS
ON FORM 8-K
Financial Statements:
--------------------
Report of Independent Certified Public Accountant.
Consolidated Balance Sheet - December 31, 2002 and December
31, 2001.
Consolidated Statement of Operations - Three Years Ended
December 31, 2002.
Consolidated Statement of Shareholders' Equity - Three Years
Ended December 31, 2002.
Consolidated Statement of Cash Flows - Three Years Ended
December 31, 2002.
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.
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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, 2002.
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 2002.
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.
ITEM 14. CONTROL AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures.
------------------------------------------------
Within the 90 days prior to the date of this report, RAM Venture
Holdings Corp.. ("the Company") carried out an evaluation, under the
supervision and with the participation of the Company's management,
including the Company's President and Secretary/Treasury, of the
effectiveness of the design and operation of the Company's disclosure
controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon
that evaluation, the President and Secretary/Treasurer concluded that the
Company's disclosure controls and procedures are effective in timely
alerting the Company to material information required to be included in
the Company's periodic SEC filings relating to the Company (including its
consolidated subsidiaries).
(b) Changes in Internal Controls
----------------------------
There were no significant changes in the Company's internal controls
or in other factors that could significantly affect these internal
controls subsequent to the date of our most recent evaluation.
-15-
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
March 26, 2003 By: /s/Norman H. Becker
-------------------------------
Norman H. Becker, President
In accordance with the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following persons on
behalf of the Company and in the capacities and on the dates indicated.
Signature Capacity Date
- --------- -------- ----
/s/Norman Becker President March 26, 2003
- ------------------------- and Director
Norman Becker
/s/Frank Bauer Vice President March 26, 2003
- ------------------------- and Director
Frank Bauer
/s/Diane Martini Secretary/Treasurer March 26, 2003
- ------------------------- and Director
Diane Martini
-16-
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350
In connection with the accompanying Annual Report on Form 10-K of
RAM Venture Holdings Corp. for the period ended December 31, 2002, Norman
H. Becker, President and Principal 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 our knowledge and belief, that:
1. Such Annual Report on Form 10-K for the period ended December
31, 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 Annual Report on Form 10-K
for the period ended December 31, 2002, fairly presents, in
all material respects, the financial condition and results of
operations of RAM Venture holdings Corp.
RAM VENTURE HOLDINGS CORP.
Dated: March 26, 2003 By: /s/Norman H. Becker
-------------------------------
Norman H. Becker, President
and Principal Financial Officer
-17-
CERTIFICATIONS
--------------
I, Norman H. Becker, President and Principal Financial Officer of
RAM Venture Holdings Corp., hereby certify that:
1. I have reviewed this Annual Report on Form 10-K of RAM Venture
Holdings Corp.;
2. Based on my knowledge, this Annual 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 Annual Report;
3. Based on my knowledge, the financial statements, and other financial
information included in this Annual 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 Annual Report;
4. 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:
(a) 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 Annual Report is being prepared;
(b) 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 Annual Report (the "Evaluation Date");
and
(c) presented in this Annual 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
(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 Annual 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.
Dated: March 26, 2003 By: /s/Norman H. Becker
--------------------------------
Norman H. Becker, President and
Principal Financial Officer
-18-
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002
CONTENTS
--------
PAGE
----
INDEPENDENT AUDITORS' REPORT . . . . . . . . . . . . . . . . . . 1
CONSOLIDATED BALANCE SHEETS. . . . . . . . . . . . . . . . . . . 2
CONSOLIDATED STATEMENTS OF OPERATIONS. . . . . . . . . . . . . . 3
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY. . . . . . . . . 4
CONSOLIDATED STATEMENTS OF CASH FLOWS. . . . . . . . . . . . . . 5 - 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS . . . . . . . . . . . 7 - 16
GRASSANO ACCOUNTING P.A.
Certified Public Accountants & Business Consultants
900 North Federal Highway, Suite 160
Boca Raton, Florida 33432-2754
Board of Directors
Ram Venture Holdings Corp.
and Subsidiary
Fort Lauderdale, Florida
INDEPENDENT AUDITORS'REPORT
We have audited the accompanying consolidated balance sheets of Ram
Venture Holdings Corp. and Subsidiary as of December 31, 2002 and 2001,
and the related consolidated statements of operations, stockholders'
equity and cash flows for each of the three years ended December 31,
2002. These consolidated financial statements are the responsibility of
the Company's management. 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. Those standards require that
we plan and perform the audit to obtain reasonable assurance about
whether the consolidated financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall consolidated financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of Ram Venture Holdings Corp. and Subsidiary as of December 31,
2002 and 2001, and the results of its consolidated operations and its
consolidated cash flows for the years ended December 31, 2002, 2001 and
2000, in conformity with accounting principles generally accepted in the
United States of America.
/s/ Grassano Accounting, P.A.
Boca Raton, Florida
March 3, 2003
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2002 AND 2001
ASSETS
------
2002 2001
--------- ----------
(Restated)
CURRENT ASSETS:
Cash and cash equivalents $ 142,443 $ 89,254
Marketable securities 494,476 950,390
Dividends receivable 1,358 5,240
Accrued interest receivable, net of
$8,393 allowance in 2002 3,040 -
Notes receivable - related parties - 112,500
Other 1,001 5,522
---------- ----------
TOTAL CURRENT ASSETS 642,318 1,162,906
PROPERTY AND EQUIPMENT - net of accumulated
depreciation of $14,421 in 2002 and $55,189
in 2001 1,069 1,717
OTHER ASSETS:
Security deposits 1,000 1,567
Accounts receivable - related party 12,500 12,500
Securities available for sale 157,500 -
Notes receivable - related parties, net
of $175,000 allowance in 2002 33,000 624,666
---------- ----------
$ 847,387 $1,803,356
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ - $ 11,150
Loans payable - 134,664
Deferred gain - 119,637
---------- ----------
TOTAL CURRENT LIABILITIES - 265,451
---------- ----------
STOCKHOLDERS' EQUITY:
Common stock $.0001 par value;
25,000,000 shares authorized in 2002 and
2001; 15,333,500 shares issued in 2002 and
15,000,000 shares issued in 2001;
15,308,500 shares outstanding in 2002 and
14,975,000 shares outstanding in 2001 1,533 1,500
Additional paid in capital 2,646,829 2,721,891
Accumulated deficit (1,718,887) (1,161,508)
Accumulated other comprehensive income (loss) (58,110) -
---------- ----------
871,365 1,561,883
Less treasury stock, 25,000 shares at cost (23,978) (23,978)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY 847,387 1,537,905
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 847,387 $1,803,356
========== ==========
The accompanying notes to consolidated financial statements are an integral
part of these consolidated financial statements.
F-2
RAM VENTURE HOLDINGS CORP. & SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE YEARS ENDED DECEMBER 31, 2002
2002 2001 2000
----------- ----------- -----------
REVENUES:
Dividends and interest $ 52,188 $ 66,089 $ 75,629
Realized and unrealized gain
(loss) on marketable securities (277,471) 204,174 106,651
Consulting fees - related party - 300,000 -
----------- ----------- -----------
(225,283) 570,263 182,280
----------- ----------- -----------
OPERATING EXPENSES:
General and administrative 148,185 134,799 128,840
Interest 518 3,596 -
Provision for doubtful accounts 183,393 - -
----------- ----------- -----------
332,096 138,395 128,840
----------- ----------- -----------
NET INCOME (LOSS) $ (557,379) $ 431,868 $ 53,440
=========== =========== ===========
BASIC AND DILUTED WEIGHTED
AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 13,386,076 14,975,000 12,528,895
=========== =========== ===========
BASIC AND DILUTED NET INCOME
(LOSS) PER COMMON SHARE $ (.04) $ .03 $ .00
=========== =========== ===========
The accompanying notes to consolidated financial statements are an
integral part of these consolidated financial statements.
F-3
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
THREE YEARS ENDED DECEMBER 31, 2002
Common Stock Accumulated
$.0001 Par Value Additional Other
Auth. 25,000,000 Shares Paid-In Accumulated Comprehensive Treasury
Shares Amount Capital (Deficit) (Loss) Stock Total
--------- ------- ----------- ----------- ------------- ---------- ----------
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
Exchange of 2,000,000 shares 2,000,000 200 199,800 - - - 200,000
Cancellation of 5,000,000
shares (5,000,000) (500) (296,529) - - - (297,029)
Issuance of 833,500 shares 833,500 83 (83) - - - -
Sale of 2,500,000 new shares 2,500,000 250 21,750 - - - 22,000
Unrealized loss on available
for sale securities - - - - (58,110) - (58,110)
Net loss for the period - - - (557,379) - - (557,379)
Balance - December 31, 2002 15,308,500 $ 1,533 $ 2,646,829 $(1,718,887) $ (58,110) $ (23,978) $ 847,387
The accompanying notes to consolidated financial statements are an
integral part of these consolidated financial statements.
F-4
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE YEARS ENDED DECEMBER 31, 2002
2002 2001 2000
---------- --------- ---------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss) $ (557,379) $ 431,868 $ 53,440
---------- --------- ---------
Adjustments to reconcile
net income (loss) to net cash
provided by (used in)
operating activities:
Depreciation 648 343 -
Provision for uncollectible accounts 183,393 - -
(Gain) loss on sale of marketable
securities 158,604 (57,936) 21,105
Unrealized (gain) loss on
marketable securities 118,867 (145,042) (127,756)
Change in operating assets
and liabilities:
(Increase) decrease in dividends
receivable 3,882 4,583 (1,348)
Increase in accrued interest
receivable (11,433) - -
Decrease in other assets 4,521 - -
(Increase) decrease in security
deposits 567 (529) (1,800)
(Decrease) increase in accounts
payable and accrued expenses (11,150) 12,073 1,805
Increase in deferred gain net
of amortization - 119,637 -
Purchase of marketable securities (194,563) (691,220) (110,041)
Proceeds from sale of
marketable securities 372,996 523,222 142,325
---------- --------- ---------
Total adjustments 626,332 (234,869) (75,710)
---------- --------- ---------
Net cash provided by (used in)
operating activities 68,953 196,999 (22,270)
---------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Principal collection of
notes receivable - related parties 112,500 147,500 -
Advances on notes
receivable - related parties - (323,000) (18,500)
Purchase of securities available
for sale (15,600) - -
Purchase of property and equipment - (2,060) -
Increase in notes receivable
- affiliate - (416,666) -
---------- --------- ---------
Net cash provided by (used in)
investing activities 96,900 (594,226) (18,500)
---------- --------- ---------
F-5
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE YEARS ENDED DECEMBER 31, 2002
(Continued)
2002 2001 2000
---------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock 22,000 - 380,192
Proceeds from borrowings - 225,000 -
Repayment of borrowings (134,664) (100,000) -
---------- --------- ---------
Net cash provided by (used in)
financing activities (112,664) 125,000 380,192
---------- --------- ---------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS 53,189 (272,227) 339,422
CASH AND CASH EQUIVALENTS -
Beginning of year 89,254 361,481 22,059
---------- --------- ---------
End of year $ 142,443 $ 89,254 $ 361,481
========== ========= =========
SUPPLEMENTAL DISCLOSURE:
Interest expense paid $ 518 $ 3,596 $ -
========== ========= =========
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS:
As of 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.
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.
The accompanying notes to consolidated financial statements are an
integral part of these consolidated financial statements.
F-6
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
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.
Marketable Securities - The Company's 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 are recorded at
----------------------
cost. Depreciation is computed using the straight-line method
three-to-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-7
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Income Taxes - The Company accounts for income taxes under the
------------
Financial Accounting Standards Board of Financial Accounting
Standard No. 109, "Accounting for Income Taxes" ("SFAS 109"). Under
SFAS 109, deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and
liabilities and their respective tax basis. 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. Under SFAS 109, the effect
on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment date.
Earnings (Loss) per Share - The Company presents "basic" earnings
-------------------------
(loss) per share and, if applicable, "diluted" earnings per share
pursuant to the provisions of Statement of Financial Accounting
Standards No. 128, Earnings per Share ("SFAS 128"). Basic earnings
(loss) per share is calculated by dividing net income or loss by the
weighted average number of shares outstanding during each period.
The calculation of diluted earnings (loss) per share is the same as
the basic earnings (loss) per share.
Recent Accounting Pronouncements - In June 2001, the Financial
--------------------------------
Accounting Standards Board ("FASB") issued Statement of Financial
Accounting Standards ("SFAS") No. 141 "Business Combinations" and
No. 142 "Goodwill and Other Intangible Assets." SFAS No. 141
requires all business combinations initiated after June 30, 2001 to
be accounted for under the purchase method. For all business
combinations for which the date of acquisition is after June 30,
2001, SFAS No. 141 also established specific criteria for the
recognition of intangible assets separately from goodwill and
requires unallocated negative goodwill to be written off immediately
as an extraordinary gain, rather than deferred and amortized. SFAS
No. 142 changes the accounting for goodwill and other intangible
assets after an acquisition. The most significant changes made by
SFAS No. 142 are: (1) goodwill and intangible assets with
indefinite lives will no longer be amortized; (2) goodwill and
intangible assets with indefinite lives must be tested for
impairment at lease annually; and (3) the amortization period for
intangible assets with finite lives will no longer be limited to
forty years. At this time, the Company does not believe that the
adoption of either of these statements will have a material effect
on its financial position, results of operations, or cash flows.
F-8
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
In June 2001, the FASB issued SFAS No. 143 "Accounting for Asset
Retirement Obligations." SFAS No. 143 establishes accounting
requirements for retirement obligations associated with tangible
long-lived assets, including (1) the timing of the liability
recognition, (2) initial measurement of the liability, (3)
allocation of asset retirement cost to expense, (4) subsequent
measurement of the liability and (5) financial statement
disclosures. SFAS No. 143 requires that an asset retirement cost
should be capitalized as part of the cost of the related long-lived
asset and subsequently allocated to expense using a systematic and
rational method. The adoption of SFAS No. 143 is not expected to
have a material effect on the Company's financial position, results
of operations, or cash flows. In August 2001, the FASB also
approved SFAS No. 144, "Accounting for the Impairment or Disposal
of Long-Lived Assets." SFAS No. 144 replaced SFAS No. 121. The new
accounting model for long-lived assets to be disposed of by sale
applies to all long-lived assets, including discontinued operations,
and replaces the provisions of Accounting Principles Board (APB)
Opinion No. 30, "Reporting Results of Operations Reporting the
Effects of Disposal of A segment of a Business," for the disposal
of segments of a business. SFAS No. 144 requires that those long-
lived assets be measured at the lower of carrying amount or fair
value less cost to sell, whether reported in continuing operations
or in discontinued operations. Therefore, discontinued operations
will no longer be measured at net realizable value or include
amounts for operating losses that have not yet occurred. SFAS No.
144 also broadens the reporting of discontinued operations to
include all components of an entity with operations that can be
distinguished from the rest of the entity and that will be
eliminated from the ongoing operations of the entity in a disposal
transaction. The provisions of SFAS No. 144 are effective for
financial statements issued for fiscal years beginning after
December 15, 2001 and, generally, are to be applied prospectively.
At this time, the Company does not believe that the adoption of SFAS
No. 144 will have a material effect on its financial position,
results of operations, or cash flows.
F-9
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
NOTE B - PROPERTY AND EQUIPMENT
Property and equipment consists of the following as of December 31:
2001 2002
-------- --------
Office furniture and equipment $ 56,906 $ 15,490
Less accumulated depreciation
and amortization 55,189 14,421
-------- --------
$ 1,717 $ 1,069
======== ========
NOTE C - NOTES RECEIVABLE - RELATED PARTIES
Notes receivable related parties consists of the following as of
December 31:
2001 2002
-------- --------
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 45,000
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 66,500
8% Notes Receivable. Due from
-------------------
officers and directors, secured by
900,000 shares of the Company's
common stock 16,500 13,000
8% Unsecured Note Receivable. Due
----------------------------
from a former officer and director
of the Company 50,000 50,000
F-10
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
NOTE C - NOTE RECEIVABLE - RELATED PARTIES (Cont'd)
2001 2002
-------- --------
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 13,500
-------- --------
737,166 208,000
Less allowance for
doubtful accounts - 175,000
-------- --------
$737,166 $ 33,000
======== ========
Interest earned on notes amounted to $20,225 in 2001 and $9,233 in
2002.
NOTE D - MARKETABLE SECURITIES
Marketable securities consists of the following as of December 31:
2001 2002
---------- ----------
Cost of trading securities $1,141,193 $ 805,633
Less allowance for decline in
market value (190,803) (311,157)
---------- ----------
Marketable securities $ 950,390 $ 494,476
========== ==========
F-11
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
NOTE D - MARKETABLE SECURITIES (Continued)
Securities available for sale consists of the following as of
December 31:
2001 2002
---------- ----------
Cost of 630,000 shares of
Creative Beauty Supply, Inc. $ - $ 215,610
Less allowance for decline in
market value - (58,110)
---------- ----------
Securities available for sale $ - $ 157,500
========== ==========
The unrealized gain (loss) on securities amounted to $127,756 for
2000, $145,042 for 2001, and $118,867 for 2002.
NOTE E - COMMON STOCK TRANSACTIONS
As of 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.
On January 30, 2002, following completion of the exchange of stock
discussions, the Company and Creative Beauty Supply, Inc. entered
into an agreement for an exchange of stock pursuant to which the
Company 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 Company's
authorized but previously unissued common stock.
On November 4, 2002, the Company sold 2,500,000 shares of common
stock to certain officers, directors, and related parties for
$22,000.
F-12
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
NOTE F - COMPREHENSIVE INCOME (LOSS)
The Company adopted SFAS No. 130, "Reporting Comprehensive Income,"
at the beginning of 1998. The adoption had no impact on net income
or total stockholders' equity. Comprehensive income consists of net
income and other comprehensive income.
In January 2002, the Company acquired 630,000 shares of Beauty
Supply, Inc. (See Note E). These stocks represent available for
sale securities according to SFAS No. 115. The following is the
comprehensive income for the years ended December 31:
2001 2002
---------- ----------
Accumulated other comprehensive
income (loss), beginning of year $ - $ -
Unrealized gain (loss) on
available for sale securities - (58,110)
---------- ----------
Accumulated other comprehensive
income (loss), end of year $ - $ (58,110)
========== ==========
Basic and diluted comprehensive
income (loss) per common share $ - $ (.01)
========== ==========
NOTE G - INCOME TAXES
Components of deferred tax benefits are as follows as of December
31:
Current Tax Asset
-----------------
2001 2002
---------- ----------
Allowance for market decline
of equity securities $ 75,367 $ 145,860
Net operating loss carry
forward 317,436 426,300
---------- ----------
Total Current Tax Benefit 392,803 572,160
Valuation Allowance (392,803) (572,160)
---------- ----------
Net Deferred Tax Assets $ - $ -
========== ==========
F-13
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
NOTE G - INCOME TAXES (Continued)
At December 31, 2002, management is unable to predict profitable
operations for the Company in the future. Accordingly, a 100%
valuation allowance has been provided.
At December 31, 2002, the Company had available net operating loss
carryforwards, for tax reporting purposes, of approximately
$1,079,000 expiring through 2017.
NOTE H - RELATED PARTY TRANSACTIONS
Professional and Consulting Fees - the Company paid officers,
--------------------------------
directors, stockholders and affiliates professional and consulting
fees amounting to $43,669 in 2000, $40,848 in 2001 and $27,270 in
2002.
Office Expense - Office expenses were paid to stockholders and/or
--------------
entities affiliated through common officers, directors and
shareholders amounting to $10,200 in 2000, $10,200 in 2001, and
$9,600 in 2002.
Accounting Fees - Accounting fees paid to a CPA firm owned by the
---------------
Company's President amounted to $17,296 in 2000, $23,235 in 2001,
and $24,672 in 2002.
Rent Expense - Rentals paid to entities having officers, directors
------------
and shareholders in common with the Company amounted to $21,000 in
2000, $21,000 in 2001 and $21,000 in 2002.
NOTE I - 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 J - 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.
F-14
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
NOTE J - FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)
Investments - The fair value of investments are based upon quoted
-----------
market prices for those investments.
NOTE K - RESTATEMENT OF ASSETS AT DECEMBER 31, 2001
On the originally filed balance sheet at December 31, 2001, the
360,000 shares of common stock of Tremor Entertainment, Inc.
("Tremor") valued at $360,000 was classified as a long term
investment. During the year ended December 31, 2002, 343,000 shares
of Tremor were sold. Consequently, the $360,000 long-term
investment in marketable securities has been reclassified to
marketable securities at December 31, 2001. This reclassification
increased the 2001 marketable securities from $590,390 to $950,390
and increased the total current assets from $802,906 to $1,162,906.
NOTE L - FINANCIAL INFORMATION BY QUARTER (UNAUDITED)
Quarter Quarter Quarter Quarter
Ended Ended Ended Ended
March 31, June 30, September 30, December 31,
2002 2002 2002 2002
---------- ----------- ------------- ------------
Revenues:
Dividends & interest $ 14,325 $ 14,178 $ 14,563 $ 9,122
Realized and unrealized
gain (loss) on
marketable securities (2,533) (211,443) (142,289) 78,794
---------- ----------- ----------- ----------
11,792 (197,265) (127,726) 87,916
---------- ----------- ----------- ----------
Operating Expenses:
General and administrative 39,549 50,716 25,912 32,008
Interest 506 - - 12
Provision for doubtful
accounts - - 175,000 8,393
---------- ----------- ----------- ----------
40,055 50,716 200,912 40,413
---------- ----------- ----------- ----------
Net Income (Loss) $ (28,263) $ (247,981) $ (328,638) $ 47,503
========== =========== =========== ==========
Basic and diluted net income
(loss) per common share $ -0- $ (.02) $ (.03) $ -0-
========== =========== =========== ==========
F-15
Quarter Quarter Quarter Quarter
Ended Ended Ended Ended
March 31, June 30, September 30, December 31,
2001 2001 2001 2001
---------- ----------- ------------- ------------
Revenues:
Dividends & interest $ 15,945 $ 13,767 $ 16,918 $ 19,459
Realized and unrealized
gain (loss) on
marketable securities 67,970 20,351 100,941 14,912
Consulting fees
- related party - 300,000 - -
---------- ----------- ----------- ----------
83,915 334,118 117,859 34,371
---------- ----------- ----------- ----------
Operating Expenses:
General and administrative 23,447 36,100 38,904 36,348
Interest - - - 3,596
---------- ----------- ----------- ----------
23,447 36,100 38,904 39,944
---------- ----------- ----------- ----------
Net Income (Loss) $ 60,468 $ 298,018 $ 78,955 $ (5,573)
========== =========== =========== ==========
Basic and diluted net income
(loss) per common share $ .00 $ .02 $ .01 $ (.00)
========== =========== =========== ==========
NOTE M - SUBSEQUENT EVENT
On January 31, 2003, the Company lent $50,000 to a corporation whose
president is the Company's Vice President. The loan is evidenced
by an unsecured promissory note with interest, payable quarterly at
a rate of eight percent (8%) per annum and due on January 31, 2005.
The note is convertible into 150,000 shares of the corporation's
common stock anytime prior to January 31, 2005 at the option of the
Company.
F-16