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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, 2003
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33-02035-A
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(Commission File Number)
RAM VENTURE HOLDINGS CORP.
(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
- --------------------- ----------------------
(Title of Each Class) (Name of Each Exchange
on which Registered)
Securities registered pursuant to Section 12(g) of the Act
None None
- --------------------- ----------------------
(Title of Each Class) (Name of Each Exchange
on which Registered)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
YES [X] NO [ ]
The aggregate market value of the voting stock held by non-affiliates of
the Registrant as of April 2, 2004, was approximately $2,294,625.
15,000,000 shares of Common Stock, $.0001 par value, were issued at April
2, 2004.
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RAM VENTURE HOLDINGS CORP.
TABLE OF CONTENTS
Page
PART I
- ------
Item 1. Business 3
Item 2. Properties 6
Item 3. Legal Proceedings 6
Item 4. Submission of Matters to a Vote of Security Holders 6
PART II
- -------
Item 5. Market for Company's Common Equity And Related
Stockholder Matters 7
Item 6. Selected Financial Data 8
Item 7. Management's Discussion and Analysis or Plan of
Operations 8
Item 8. Financial Statements and Supplementary Data 9
Item 9. Change in and Disagreements with Accountants on
Accounting and Financial Disclosure 9
Item 9(a) Controls and Procedures 9
PART III
- --------
Item 10. Directors, Executive Officers, Promoters an
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
Item 14. Principal Accountant Fees and Services 12
PART IV
- -------
Item 15. Exhibits, Financial Statement Schedules and
Reports on Form 8-K 13
SIGNATURES 16
PART I
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ITEM 1. BUSINESS
Background
- ----------
RAM Venture Holdings Corp. f/k/a Corrections Services, Inc. (the
"Company") was incorporated in the State of Florida in 1984. The Company
was organized for the purpose of developing and marketing a house arrest
program to relieve the need for incarceration in a jail or similar
facility. The Company was commercially active in that area until mid-
1998. On August 31, 1998, the Company sold its electronic monitoring
business and has had no commercial operations since then.
Reverse Merger Acquisition; Major, Material Changes
- ---------------------------------------------------
Early in March, 2004, the Company entered into discussions and
negotiations with American Apparel and Accessories, Inc., a privately-
held Arkansas corporation (hereinafter referred to as "A3") with a view
toward the Company's acquisition of all of the capital stock of A3 in a
transaction in which the Company would be the surviving entity with its
name subsequently changed to American Apparel and Accessories, Inc. and
its management and Board of Directors replaced by the management and
Board of Directors of A3. On March 31, 2004, the Company entered into
a definitive agreement and plan of reorganization with A3 pursuant to
which the Company is currently proceeding with the reverse merger and
undertaking the following consequent and related activities:
a. Effective April 16, 2004, all of the Company's Common Stock
shall be reverse-split, one-for-ten. That is to say, ten pre-
split shares of the Company's Common Stock will be converted
to one post-split share of the Company's Common Stock.
b. Upon completion of the reverse merger transaction, the
Company's name will be changed to American Apparel and
Accessories, Inc. and its management and Board of Directors
will resign in sequence and be replaced by the management and
Board of Directors of A3, the acquired privately-held
corporation.
c. Upon closing of the reverse merger transaction, American
Apparel and Accessories, Inc., the Arkansas corporation, will
terminate, all of its capital stock will be canceled and its
assets and liabilities will become the assets and liabilities
of the Registrant, the surviving, merged corporation.
d. In exchange for the acquisition of A3, the Company will issue
an aggregate of 23,500,000 shares of its post-reverse split,
restricted Common Stock and Stock Purchase Options to the A3
shareholders in replacement of their canceled A3 Common Stock
and unexercised A3 Common Stock Purchase Options.
e. With complete issuance of all of the reverse merger stock
including stock underlying the Stock Purchase Options, all of
the persons acquiring the newly issued Common Stock of the
Registrant in the reverse merger transaction will own 94% of
the Company. With 1,500,000 post-split shares continuing to
be held by the Company's pre-merger shareholders, together
they will hold 6% of the issued and outstanding ownership
interest in the surviving entity.
-3-
f. In addition to the A3 capital stock acquisition, the Company
will receive cash in the amount of $250,000 paid by A3 as a
material aspect of the consideration for the reverse merger
transaction.
g. Coincident with undertaking and completing the reverse merger
transaction, the Company will transfer and convey virtually
all of its assets, net of expenses of the reverse merger
transaction, and all of its liabilities to its wholly-owned
subsidiary, Corrections Systems International, Inc., a
privately-held Florida corporation. All of the shares of
Corrections Systems International, Inc. now owned by the
Company will be distributed to the pre-merger shareholders of
the Company on a share-for-share basis as a dividend by the
Company. That is, for each pre-merger share of the Company's
Common Stock held, the shareholder will receive a share of
Corrections Systems International, Inc.'s Common Stock which,
upon distribution of all of the capital stock of that
corporation, will be a stand-alone, privately-held Florida
corporation owned by all of the Company's pre-merger
stockholders in proportion with their pre-merger ownership
interest in the Company.
h. In addition, as a material aspect of the reverse merger
transaction, A3 will acquire Common Stock Purchase Options to
purchase up to 200,000 shares of the Company's post-split
Common Stock from the Company's control shareholders, Ronald
A. Martini and Professional Programmers, Inc. The Common
Stock Purchase Options are exercisable by A3 during the same
two year period during which the surviving entity may not
reverse-split its Common Stock and carry an exercise price of
$1.50 per post-reverse split share.
The Company anticipates that the reverse merger transaction with A3
will be completed on or about April 21, 2004 barring any unforeseen,
possibly insurmountable obstacles. In any event, however, the Company
has determined to proceed with and complete the one-for-ten reverse split
of its Common Stock whether or not the reverse merger acquisition of A3
is completed.
Coincident with the transfer of assets and liabilities from the
Company to Corrections Systems International, Inc. as set out above,
the Company's present officers and directors, Messrs. Norman H. Becker
and Frank Bauer and Ms. Diane Martini will be the interim management and
Board of Directors of Corrections Systems International, Inc. and will
continue incumbent in those positions until an annual meeting of the new
stockholders of Corrections Systems International, Inc. can be
organized, scheduled and held.
Upon completion of the Company's reverse merger acquisition of
American Apparel and Accessories, Inc. a Current Report on Form 8-K will
be filed and audited financials of the merged corporations and pro-forma
financials will be subsequently filed by the Registrant as the surviving
corporation.
As a material aspect of the definitive reverse merger agreement, the
Company may not further reverse-split its Common Stock for a two year
period expiring on April 1, 2006. In addition, any subsequent offering
of the Company's authorized but previously unissued capital stock must
be offered upon the same terms and conditions to all of the pre-merger
shareholders of the Company.
-4-
The Registrant is optimistic that the reverse merger acquisition of
American Apparel and Accessories, Inc. by the Company at this time,
following its many previous efforts to complete an acquisition or merger
for the benefit of shareholders which did not come to fruition, will be
beneficial. American Apparel and Accessories, Inc. was formed in 1999
and is engaged by and through prior acquisitions in the outdoor
activities industry with proprietary camouflage patterns for which the
Company's subsidiary, Natural Gear, holds copyrights on several unique,
open-faced patterns which the Company is informed are radically different
from the dominant patterns in the camouflage marketplace. A3, by and
through Natural Gear, holds U.S. Copyright No. RN VAU 199 985 which
protects the proprietary patterns. Natural Gear's presence in the
marketplace is currently the number three pattern and is experiencing
upward momentum. A3's primary business has been the design and sales of
goods with its Natural Gear camouflage patterns. It markets its goods
through industry shooting shows and various forms of media, the most
effective of which is the Company's ESPN2's Wildlife Quest, a hunting
show, the rights to which were acquired by A3 in 2003. A3 furnishes the
show's host and guests with Natural Gear products and occupies the
opening and closing advertising spots in the program. While sale of its
branded camouflage goods was the Company's means of establishing its
presence in the marketplace, A3 anticipates that its business model will
eventually cause most of its revenues in the camouflage area to be
derived from licensees who will compensate Natural Gear with license fees
for the right to use the Company's camouflage pattern on their products.
To date, A3 has more than 100 such licenses with well known suppliers
with wide distribution markets.
A3 plans further acquisition of outdoor life entities as its means
of growth in the outdoors industry and anticipates that completion of its
reverse merger acquisition by the Registrant will enhance and accelerate
those plans.
Creative Beauty Supply, Inc.
- ----------------------------
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.
-5-
On March 19, 2004, Creative Beauty Supply, Inc. completed a reverse
merger with Global Digital Solutions, inc. in which Creative Beauty
Supply is the surviving, publicly-held corporation whose name was changed
in the transaction to Global Digital solutions, Inc. The Registrant
continues to own 560,000 shares of the surviving corporation's Common
Stock, or approximately two (2%) percent of its total ownership interest
following completion of the reverse merger.
Employees
- ---------
Mr. Norman H. Becker and Mr. Frank R. Bauer, are officers of the
Company each of whom currently devotes approximately ten (10%) percent
of their time to its activities. Ms. Diane Martini, an officer of the
Company, currently devotes approximately eighty (80%) percent of her time
to its activities. The Company has no other full-time employees See Part
III., Item 10, Directors and Executive Officers of the Registrant. Upon
completion of the committed reverse merger acquisition of American
Apparel and Accessories, Inc., the Company's Officers and Directors will
resign their positions in preference to American Apparel and Accessories,
Inc.'s officers and directors.
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 two months of 2003 when an additional $1,600 was
paid in the aggregate and one month of 2003 when none 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 2003, through solicitation of proxies
or otherwise.
-6-
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
Period Bid Price Asked Price
- ------ --------- -----------
High Low High Low
---- --- ---- ---
First Quarter, 2002 $0.27 $0.25 $0.50 $0.40
Second Quarter, 2002 $0.25 $0.18 $0.45 $0.35
Third Quarter, 2002 $0.20 $0.15 $0.40 $0.30
Fourth Quarter, 2002 $0.20 $0.15 $0.40 $0.30
First Quarter, 2003 $0.20 $0.15 $0.30 $0.27
Second Quarter, 2003 $0.18 $0.15 $0.35 $0.30
Third Quarter, 2003 $0.20 $0.15 $0.35 $0.27
Fourth Quarter, 2003 $0.25 $0.20 $0.35 $0.30
January 1, through
March 17, 2004 $0.50 $0.20 $0.35 $0.25
- ---------------------------
(b) Holders. As of March 17, 2004, the approximate number of
recordholders of Common Stock of the Registrant was 826.
The Company is unable to determine the actual number of beneficial
holders of its Common Stock at March 17, 2004 due to Common Stock held
for stockholders "in street name", but estimates the current total to
be approximately 980.
(c) Dividends. The Company has never paid a dividend and does not now
anticipate paying cash dividends in the foreseeable future. See Item 7.(a)
Financial Condition.
-7-
ITEM 6. SELECTED FINANCIAL DATA
Summary of Statement of Operations:
- -----------------------------------
As of As of As of As of As of
12/31/03 12/31/02 12/31/01 12/31/00 12/31/99
----------- ----------- ----------- ----------- -----------
Revenue $ 111,489 $ (225,283) $ 570,263 $ 182,280 ($ 23,657)
Oper. Exp. $ 122,130 $ 332,096 $ 138,395 $ 128,840 $ 333,775
Net Income (Loss) $ (10,641) $ (557,379) $ 431,868 $ 53,440 ($ 357,432)
Weighted No. of
shs. outstanding 15,308,500 13,386,076 14,975,000 12,528,895 7,563,050
Net Income (Loss)
per sh. Common
Stk. outstanding $ (.00) $ (.04) $ .03 - ($ .05)
(See Note A-Notes
to Fin. Stmts.)
Summary Balance Sheet Information:
- ----------------------------------
As of As of As of As of As of
12/31/03 12/31/02 12/31/01 12/31/00 12/31/99
----------- ----------- ----------- ----------- -----------
Total Assets $ 900,395 $ 847,387 $1,803,356 $1,133,210 $ 666,273
Total Current
Liabilities $ 2,525 $ -0- $ 265,451 $ 3,195 $ 1,390
Tot. Current Assets $ 640,124 $ 642,318 $ 802,906 $ 974,109 $ 664,602
Stockholders' Equity $ 897,870 $ 847,387 $1,537,905 $1,130,015 $ 664,883
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, 2003, the Company had
-------------------
current assets of $640,124 compared to $642,318 at December 31, 2002, total
assets of $900,395 compared to $847,387 at December 31, 2002 and shareholders
equity of $897,870 as compared to $847,387 at December 31, 2002. The increase
in total assets and shareholders' equity was primarily the result of the
increase in fair market value of marketable securities at December 31, 2003.
Liquidity. The Company had a net decrease in cash and cash equivalents
---------
for the year ended December 31, 2003 of $(99,277), and cash and cash
equivalents at the end of the year of $43,166 as compared to an increase in
cash and cash equivalents of $53,189, and cash and cash equivalents of $142,443
for the year ended December 31, 2002. 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.
-8-
Results of Operations. The Company's revenues for the fiscal period
---------------------
ended December 31, 2003, were derived principally from investment activities.
The Company's revenues increased $336,772 to $111,489 for the fiscal year
ended December 31, 2003, as compared to $(225,283) for the same period of 2002.
The principal reason for the increase in revenues was an increase in the
realized and unrealized gain on marketable securities.
Operating expenses decreased $209,966 to $122,130 as compared to $332,096
for the same period last year, principally due to a reduction in the provision
for doubtful accounts. The Company realized a net loss of $(10,641) for the
fiscal year ended December 31, 2003, as compared to a net loss of $(557,379)
for the same period last year. The decrease in net loss was primarily due to
an increase in realized and unrealized gain on marketable securities and a
reduction in the 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,
2003.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See financial statements and supplementary data attached as Exhibit 1.
ITEM 9. CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
(a) The Registrant's former Certifying Accountant, Spicer Jeffries
LLP in the city of Greenwood Village, Colorado notified the Registrant that it
must cease its services to the Registrant since it was no longer able to
provide the services that the Company requires as a result of loss of their
professional liability insurance coverage and their inability to obtain
replacement coverage for public reporting companies work.
Work performed by Spicer Jeffries LLP for the Registrant resulted in
reviews of Quarterly Reports on Form 10-Q for the interim period from the year
ended December 31, 2002 to the date of its withdrawal from the engagement on
or about March 22, 2004, which reviews involved unqualified favorable
conclusions which were not modified as to uncertainty, audit scope or
accounting principles.
Further, in connection with the reviews performed by Spicer Jeffries LLP
for the Registrant, there were no disagreements with the Registrant on any
matter of accounting principles or practices, financial statement disclosure,
or review scope or procedure. The Registrant has provided its resigning
auditor, Spicer Jeffries LLP with a true copy of the text of this Form 8-K,
Item 4 as filed.
The Registrant has engaged Sherb & Co. LLP with offices at 2700 N.
Military Trail, in the city of Boca Raton, Florida as its successor,
independent, certified principal accountants for completion of the necessary
audit services in connection with this Annual Report on Form 10-K and as its
current Certifying Accountant for the year ended December 31, 2003. The
Registrant has authorized both the former accountant and its previous former
accountant to respond fully to the inquiries of its successor accountant, Sherb
& Co. LLP without limitation of any sort concerning any matter.
-9-
There were no disagreements between Sherb & Co., LLP and the Registrant
on any matter of accounting principles, practices, financial statement
disclosure or audits scope or procedure.
ITEM 9(a) 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.
Code of Ethics
- --------------
The Company has adopted a code of Ethics for Principal Executive Officer and
Senior Financial Officers applicable to its chief executive officer,
principal financial officer and any other persons performing similar
functions on its behalf. The Company's Code of Ethics is attached to this
Annual Report as Exhibit 14.1.
-10-
PART III
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ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
(a)(b) Identification of Directors and Executive Officers
Name Age Offices Held
---- --- ------------
Norman H. Becker 66 President/Director
Frank Bauer 59 Vice President/Director
Diane Martini 56 Secretary/Treasurer/Director
(1)(e) Business Experience.
-------------------
Norman H. Becker has been a director of the Company since July 1, 1987.
On January 15, 1993, Mr. Becker was appointed the Company's President. Since
January, 1985, Mr. Becker has also been self-employed in the practice of public
accounting in Hollywood, Florida. Mr. Becker is a graduate of City College of
New York (Bernard Baruch School of Business) and is a member of a number of
professional accounting associations including the American Institute of
Certified Public Accountants, the Florida Institute of Certified Public
Accountants and the Dade Chapter of the Florida Institute of Certified Public
Accountants.
Frank R. Bauer has been an Officer and a director of the Company since
February 15, 1988 and its Vice President since January 4, 1993. Mr. Bauer was
also President and Chief Executive Officer of Specialty Device Installers,
Inc., a privately held Florida corporation engaged in outside plant utility and
construction contracting. In September of 1996 Specialty Device Installers,
Inc. was acquired by Guardian International, Inc. and Mr. Bauer is also
presently employed as a manager at Guardian International, Inc. Mr. Bauer
holds the Bachelor of Business Administration Degree from Stetson University
in Deland, Florida.
Diane Martini has been Secretary/Treasurer and a director of the Company
since January 12, 1993. Ms. Martini is also President and Chief Executive
Officer of Financial Communications, Inc., a privately held Florida public
relations and business consulting firm. Ms. Martini is married to the
Company's principal shareholder, Ronald A. Martini. See Part IV., Item 12.
ITEM 11. EXECUTIVE COMPENSATION
Compensation
- ------------
Messrs. Norman H. Becker and Frank Bauer devote approximately 10% of
their time, respectively, to the Company's affairs. Ms. Diane Martini
currently devotes approximately 80% of her time to the Company's affairs.
There are no employment agreements in effect or presently contemplated and
there was no compensation paid to officers during the year ended December 31,
2003.
-11-
SUMMARY COMPENSATION TABLE
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 2002 $ -0- -- -- -- -- -- --
President (1) 2003 $ -0- -- -- -- -- -- --
Frank Bauer 2002 $ -0- -- -- -- -- -- --
Vice-President 2003 $ -0- -- -- -- -- -- --
President
Diane Martini 2002 $ -0- -- -- -- -- -- --
Secretary/ 2003 $ -0- -- -- -- -- -- --
Treasurer
All Executive 2002 $ -0- -- -- -- -- -- --
Officers & Former 2003 $ -0- -- -- -- -- -- --
Executive Officers
as a Group (3)
Persons (1)
(1) Mr. Becker's firm received a total of $12,750 in accounting fees from
the Company during 2003.
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. 2,000,000 Shares 13.1%
Common Stock All Officers and
Directors as a Group
(3 persons) 1,789,820 Shares 11.7%
- ---------------------
-12-
(1) Based upon 15,308,500 shares outstanding at March 14, 2004.
(2) While Ronald A. Martini disclaims beneficial ownership of the shares of
Common Stock owned by Diane Martini and Corporate Investment Associates,
they may be deemed controlled by him. When aggregated, Mr. Martini may
be deemed to be in control of 2,765,000 shares of the Company's Common
Stock, or approximately 18% of its ownership interest.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Certain Business Relationships
- ------------------------------
During the year ended December 31, 2003, the Company paid a total of
$42,000 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, 2003, the Company paid the accounting
firm of its President and director, Norman H. Becker fees of $12,750. In
addition, the Company paid the accounting firm of David A. Becker, P.A.
accounting fees of $6,650. David Becker is the son of Norman H. Becker.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
During 2003 and 2002, the Company incurred the following fees for
professional services rendered by the principal accountant:
2003 2002
------- -------
Fees for audit services $ 7,495 $ 8,310
Fees for audit - related services - -
Tax fees - -
All other fees - -
The Board of Directors pre-approves all audit and non-audit services to
be performed by the Company's independent auditors.
-13-
PART IV
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ITEM 15. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS
ON FORM 8-K
Financial Statements:
Independent Auditor's Reports
Consolidated Balance Sheets - December 31, 2003 and December 31, 2002
Consolidated Statements of Operations - Three Years Ended December
31, 2003.
Consolidated Statements of Shareholders' Equity - Three Years Ended
December 31, 2003.
Consolidated Statements of Cash Flows - Three Years Ended December
31, 2003.
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:
(3) 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.
(10) Material Contracts:
10.1 Agreement and Plan of Reorganization by and between RAM
Venture Holdings, Inc. and American Apparel and
Accessories, Inc. dated March 31, 2004. *
-14-
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,
2003.
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.
Additional Exhibits:
There were no current reports on Form 8-K filed by the
Registrant during the fourth quarter of 2003.
(14)
14.1 Code of Ethics for Principal Executive Officer and Senior
Financial Officers
(31)
31.1 Certification of Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002,
promulgated under the Securities Exchange Act of 1934,
as amended
(32)
32.1 Certification of Principal Executive Officer Pursuant to
18 U.S.C. Section 1350, as adopted Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002
-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.
April 12, 2004 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 April 12, 2004
- ----------------------- and Director
Norman Becker
/s/Frank Bauer Vice President April 12, 2004
- ----------------------- and Director
Frank Bauer
/s/Diane Martini Secretary/Treasurer April 12, 2004
- ----------------------- and Director
Diane Martini
-16-
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2003
CONTENTS
PAGE
INDEPENDENT AUDITORS' REPORTS. . . . . . . . . . . . . . . . . . . F-1 - F-2
CONSOLIDATED BALANCE SHEETS. . . . . . . . . . . . . . . . . . . . F-3
CONSOLIDATED STATEMENTS OF OPERATIONS. . . . . . . . . . . . . . . F-4
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY. . . . . . . . . . F-5
CONSOLIDATED STATEMENTS OF CASH FLOWS. . . . . . . . . . . . . . . F-6 - F-7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS . . . . . . . . . . . . F-8 - F-15
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,
2003, and the related consolidated statements of operations,
stockholders' equity and cash flows for the year then ended.
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
audit.
We conducted our audit 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 audit provides 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, 2003, and the results of its consolidated
operations and its consolidated cash flows for the year ended
December 31, 2003, in conformity with accounting principles
generally accepted in the United States of America.
/s/ Sherb & Co., LLP
Certified Public Accountants
March 25, 2004
F-1
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 the related consolidated statements of operations,
stockholders' equity and cash flows for each of the two 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 the results of its consolidated
operations and its consolidated cash flows for the years ended
December 31, 2002 and 2001, in conformity with accounting
principles generally accepted in the United States of America.
/s/ Grassano Accounting, P.A.
Boca Raton, Florida
March 3, 2003
F-2
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2003 AND 2002
ASSETS
------
2003 2002
--------- ----------
CURRENT ASSETS:
Cash and cash equivalents $ 43,166 $ 142,443
Marketable securities 585,939 494,476
Dividends receivable 4,653 1,358
Accrued interest receivable, net of
$8,393 allowance in 2003 and 2002 6,366 3,040
Other - 1,001
--------- ----------
TOTAL CURRENT ASSETS 640,124 642,318
PROPERTY AND EQUIPMENT - net of accumulated
depreciation of $15,534 in 2003 and
$14,421 in 2002 3,106 1,069
OTHER ASSETS:
Security deposits 1,000 1,000
Accounts receivable - related party 12,500 12,500
Securities available for sale 160,665 157,500
Notes receivable - related parties, net
of $168,500 in 2003 and $175,000
allowance in 2002 83,000 33,000
--------- ----------
$ 900,395 $ 847,387
========= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 2,525 $ -
--------- ----------
TOTAL CURRENT LIABILITIES 2,525 -
--------- ----------
STOCKHOLDERS' EQUITY:
Common stock $.0001 par value;
25,000,000 shares authorized in 2003 and
2002; 15,333,500 shares issued in 2003 and
2002; 15,308,500 shares outstanding in
2003 and 2002 1,533 1,533
Additional paid in capital 2,646,829 2,646,829
Accumulated deficit (1,729,528) (1,718,887)
Accumulated other comprehensive income (loss) 3,014 (58,110)
--------- ----------
921,848 871,365
Less treasury stock, 25,000 shares at cost (23,978) (23,978)
--------- ----------
TOTAL STOCKHOLDERS' EQUITY 897,870 847,387
--------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 900,395 $ 847,387
========= ==========
The accompanying notes to consolidated financial statements are an
integral part of these consolidated financial statements.
F-3
RAM VENTURE HOLDINGS CORP. & SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE YEARS ENDED DECEMBER 31, 2003
2003 2002 2001
----------- ----------- -----------
REVENUES:
Dividends and interest $ 50,963 $ 52,188 $ 66,089
Realized and unrealized gain
(loss) on marketable securities 54,001 (277,471) 204,174
Consulting fees - related party - - 300,000
Other income 6,525 - -
----------- ----------- -----------
111,489 (225,283) 570,263
----------- ----------- -----------
OPERATING EXPENSES:
General and administrative 122,078 148,185 134,799
Interest 52 518 3,596
Provision for doubtful accounts - 183,393 -
----------- ----------- -----------
122,130 332,096 138,395
----------- ----------- -----------
NET INCOME (LOSS) $ (10,641) $ (557,379) $ 431,868
=========== =========== ===========
BASIC AND DILUTED WEIGHTED
AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 15,308,500 13,386,076 14,975,000
=========== =========== ===========
BASIC AND DILUTED NET INCOME
(LOSS) PER COMMON SHARE $ (.00) $ (.04) $ .03
=========== =========== ===========
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 STOCKHOLDERS' EQUITY
THREE YEARS ENDED DECEMBER 31, 2003
Common Stock
$.0001 Par Value Accumulated
Authorized Additional Other
25,000,000 Shares Paid-In Accumulated Comprehensive Treasury
Shares Amount Capital (Deficit) (Loss) Stock Total
---------- ------- ----------- ----------- ------------- ----------- ----------
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
Unrealized gain on available
for sale securities - - - - 61,124 - 61,124
Net (loss) for the period - - - (10,641) - - (10,641)
---------- ------- ----------- ----------- ------------ ----------- ----------
Balance - December 31, 2003 15,308,500 $ 1,533 $ 2,646,829 $(1,729,528) $ 3,014 $ (23,978) $ 897,870
========== ======= =========== =========== ============ =========== ==========
The accompanying notes to consolidated financial statements are an
integral part of these consolidated financial statements.
F-5
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE YEARS ENDED DECEMBER 31, 2003
2003 2002 2001
---------- ---------- ---------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss) $ (10,641) $ (557,379) $ 431,868
---------- ---------- ---------
Adjustments to reconcile
net income (loss) to net cash
provided by (used in)
operating activities:
Depreciation 1,113 648 343
Provision (credit) for
uncollectible accounts (6,500) 183,393 -
(Gain) loss on sale of marketable
securities 88,810 158,604 (57,936)
Unrealized (gain) loss on
marketable securities (142,811) 118,867 (145,042)
Change in operating assets
and liabilities:
(Increase) decrease in dividends
receivable (3,295) 3,882 4,583
Increase in accrued interest
receivable (3,326) (11,433) -
Decrease in other assets 1,001 4,521 -
(Increase) decrease in security
deposits - 567 (529)
(Decrease) increase in accounts
payable and accrued expenses 2,525 (11,150) 12,073
Increase in deferred gain - net
of amortization - - 119,637
Purchase of marketable securities (224,090) (194,563) (691,220)
Proceeds from sale of
marketable securities 244,587 372,996 523,222
---------- ---------- ---------
Total adjustments (41,986) 626,332 (234,869)
---------- ---------- ---------
Net cash provided by (used in)
operating activities (52,627) 68,953 196,999
---------- ---------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Principal collection of
notes receivable - related parties 6,500 112,500 147,500
Advances on notes
receivable - related parties (50,000) - (323,000)
Purchase of securities available
for sale - (15,600) -
Purchase of property and equipment (3,150) - (2,060)
Increase in notes receivable
- affiliate - - (416,666)
---------- ---------- ---------
Net cash provided by (used in)
investing activities (46,650) 96,900 (594,226)
---------- ---------- ---------
F-6
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE YEARS ENDED DECEMBER 31, 2003
(Continued)
2003 2002 2001
---------- ---------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock - 22,000 -
Proceeds from borrowings - - 225,000
Repayment of borrowings - (134,664) (100,000)
---------- ---------- ---------
Net cash provided by (used in)
financing activities - (112,664) 125,000
---------- ---------- ---------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS (99,277) 53,189 (272,227)
CASH AND CASH EQUIVALENTS -
Beginning of year 142,443 89,254 361,481
---------- ---------- ---------
End of year $ 43,166 $ 142,443 $ 89,254
========== ========== =========
SUPPLEMENTAL DISCLOSURE:
Interest expense paid $ 52 $ 518 $ 3,596
========== ========== =========
TAXES PAID $ -0- $ -0- $ -0-
========== ========== =========
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS:
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-7
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
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. On December 29, 1999, the
Board of Directors of the Company authorized the Company to increase its
authorized capital stock from 10,000,000 shares of one class of common
stock to 25,000,000 of the same one class.
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.
Securities Available for Sale - The Company's securities available for
-----------------------------
sale represented its investment in Creative Beauty Supply, Inc., is
carried at market value in the accompanying balance sheets. Unrealized
gains and losses resulting from fluctuations in market price are reflected
in the balance sheets under the caption "accumulated other comprehensive
income (loss)".
F-7
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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.
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 since the Company has no outstanding options, warrants or
convertible debt.
Fair Value of Financial Instruments - The carrying amounts reported in the
-----------------------------------
balance sheet for cash, marketable securities, notes receivable and
accounts payable approximate fair value based on the short term maturity
of these instruments.
F-9
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recent Accounting Pronouncements - In June 2002, the FASB issued FAS No.
--------------------------------
146, "Accounting for Costs Associated with Exit or Disposal Activities."
This statement addresses financial accounting and reporting for costs
associated with exit or disposal activities and nullifies Emerging Issues
Task Force ("EITF") Issue No. 94-3, "Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring)." SFAS No. 146 is
effective for exit or disposal activities initiated after December 31,
2002. The Company does not expect the application of the provisions of
SFAS No. 146 to have an impact on its financial position, results of
operations or cash flows.
In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-
Based Compensation - Transition and Disclosure." This statement amends
SFAS No. 123 to provide alternative methods of transition for a voluntary
change to the fair value based method of accounting for stock based
employee compensation. In addition, this statement amends the disclosure
requirements of SFAS No. 123 to require prominent disclosures in both
annual and interim financial statements about the method of accounting for
stock based employee compensation and the effect of the method used on
reported results. The Company has adopted the disclosure provisions in
the accompanying financial statements.
In April 2003, the FASB issued SFAS Statement No. 149, "Amendment of
Statement 133 on Derivative Instruments and Hedging Activities," which
amends and clarifies financial accounting and reporting for derivative
instruments, including certain derivative instruments embedded in other
contracts (collectively referred to as derivatives) and for hedging
activities under FASB Statement No. 133, Accounting for Derivative
Instruments and Hedging Activities. This Statement is effective for
contracts entered into or modified after June 30, 2003, except for certain
hedging relationships designated after June 30, 2003. Most provisions of
this Statement should be applied prospectively. The Company does not
expect the adoption of SFAS No. 149 to have a material impact on its
financial statements.
In May 2003, the FASB issued SFAS Statement No. 150, "Accounting for
Certain Financial Instruments with Characteristics of Both Liabilities and
Equity". This Statement establishes standards for how an issuer
classifies
F-10
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
and measures certain financial instruments with characteristics of both
liabilities and equity. It requires that an issuer classify a financial
instrument that is within its scope as a liability (or an asset in some
circumstances). This statement is effective for financial instruments
entered into or modified after May 31, 2003, and otherwise is effective at
the beginning of the first interim period beginning after June 15, 2003,
except for mandatory redeemable financial instruments of non-public
entities, if applicable. It is to be implemented by reporting the
cumulative effect of a change in an accounting principle for financial
instruments created before the issuance date of the Statement and still
existing at the beginning of the interim period of adoption. The Company
does not expect the adoption of SFAS No. 150 to have a material impact on
its financial statements.
NOTE B - PROPERTY AND EQUIPMENT
Property and equipment consists of the following as of December 31:
2003 2002
-------- --------
Office furniture and equipment $ 18,640 $ 15,490
Less accumulated depreciation 15,534 14,421
-------- --------
$ 3,106 $ 1,069
======== ========
NOTE C - NOTES RECEIVABLE - RELATED PARTIES
Notes receivable related parties consists of the following as of
December 31:
2003 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 38,500 45,000
NOTE C - NOTE RECEIVABLE - RELATED PARTIES (Cont'd)
2003 2002
-------- --------
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 66,500 66,500
8% Notes Receivable. Due from
-------------------
officers and directors, secured by
900,000 shares of the Company's
common stock 13,000 13,000
8% Unsecured Note Receivable. Due
----------------------------
from a former officer and director
of the Company 50,000 50,000
8% Secured Note Receivable.
---------------------------
Due from an alarm company whose
principal shareholder is an officer
of the Company. The note is due
January 31, 2005, and is convertible
into 150,000 shares of the alarm
company at anytime prior to
January 31, 2005 at the option of
the Company. Interest is payable
quarterly 50,000 -
Other - 13,500 13,500
-------- --------
251,500 208,000
Less allowance for
doubtful accounts 168,500 175,000
-------- --------
$ 83,000 $ 33,000
======== ========
Interest earned on notes amounted to $6,307 in 2003 and $9,233 in 2002.
NOTE D - MARKETABLE SECURITIES
Trading securities consists of the following as of December 31:
2003 2002
---------- ----------
Cost of trading securities $ 754,285 $ 805,633
Less allowance for decline in
market value (168,346) (311,157)
---------- ----------
Marketable securities $ 585,939 $ 494,476
========== ==========
Securities available for sale consists of the following as of December 31:
2003 2002
---------- ----------
Cost of common shares of
Creative Beauty Supply, Inc. $ 157,651 $ 215,610
Allowance for appreciation
(decline) in market value 3,014 (58,110)
---------- ----------
Securities available for sale $ 160,665 $ 157,500
========== ==========
The unrealized gain (loss) on securities amounted to $(118,867) for 2002
and $142,811 for 2003.
NOTE E - COMMON STOCK TRANSACTIONS
As of December 31, 2001, the Company, together with KM Financial, Inc.,
had a note receivable of $500,00 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, canceled 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
F-11
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
NOTE E - COMMON STOCK TRANSACTIONS (Cont'd)
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.
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 shares represent available for sale securities
according to SFAS No. 115. The following is the comprehensive income for
the years ended December 31:
2003 2002
---------- ---------
Accumulated other comprehensive
income (loss), beginning of year $ (58,110) $ -
Unrealized gain (loss) on
available for sale securities 61,124 (58,110)
---------- ---------
Accumulated other comprehensive
income (loss), end of year $ 3,014 $ (58,110)
========== =========
Basic and diluted comprehensive
income (loss) per common share $ (.00) $ (.01)
========== =========
NOTE G - INCOME TAXES
Components of deferred tax benefits are as follows as of December 31:
Current Tax Asset
-----------------
2003 2002
---------- ---------
Allowance for market decline
of equity securities $ 65,306 $ 145,860
Net operating loss carry
forward 430,503 426,300
---------- ---------
Total Current Tax Benefit 495,809 572,160
Valuation Allowance (495,809) (572,160)
---------- ---------
Net Deferred Tax Assets $ - $ -
========== =========
F-12
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
NOTE G - INCOME TAXES (Contd.)
At December 31, 2003, management is unable to predict profitable
operations for the Company in the future. Accordingly, a 100% valuation
allowance has been provided.
At December 31, 2003, the Company had available net operating loss
carryforwards, for tax reporting purposes, of approximately $1,096,000
expiring through 2023.
NOTE H - RELATED PARTY TRANSACTIONS
Professional and Consulting Fees - the Company paid officers, directors,
--------------------------------
stockholders and affiliates professional and consulting fees amounting to
$40,848 in 2001, $17,000 in 2002 and $11,800 in 2003.
Office Expense - Office expenses were paid to stockholders and/or entities
--------------
affiliated through common officers, directors and shareholders amounting
to $10,200 in 2001, $9,600 in 2002, and $10,950 in 2003.
Accounting Fees - Accounting fees paid to a CPA firm owned by the
---------------
Company's President amounted to $23,235 in 2001, $24,672 in 2002, and
$12,750 in 2003.
Rent Expense - Rental paid to an entity having officers, directors and
------------
shareholders in common with the Company amounted to $21,000 in 2001,
$21,000 in 2002, and $19,250 in 2003.
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 - 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
------------- ------------ ------------ ------------
F-13
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
NOTE J - FINANCIAL INFORMATION BY QUARTER (UNAUDITED) (Contd.)
Quarter Quarter Quarter Quarter
Ended Ended Ended Ended
March 31, June 30, September 30, December 31,
2002 2002 2002 2002
------------- ------------ ------------ ------------
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-
============= ============ ============ ============
Quarter Quarter Quarter Quarter
Ended Ended Ended Ended
March 31, June 30, September 30, December 31,
2003 2003 2003 2003
------------- ------------ ------------ ------------
Revenues:
Dividends & interest $ 14,345 $ 9,695 $ 10,601 $ 16,322
Realized and unrealized
gain (loss) on
marketable securities 7,225 49,006 (50,999) 48,769
Other income - - - 6,525
------------- ------------ ------------ ------------
21,570 58,701 (40,398) 71,616
------------- ------------ ------------ ------------
Quarter Quarter Quarter Quarter
Ended Ended Ended Ended
March 31, June 30, September 30, December 31,
2003 2003 2003 2003
------------- ------------ ------------ ------------
Operating Expenses:
General and administrative 25,004 40,232 28,866 27,976
Interest 20 23 - 9
------------- ------------ ------------ ------------
25,024 40,255 28,866 27,985
------------- ------------ ------------ ------------
Net Income (Loss) $ (3,454) $ 18,446 $ (69,264) $ 43,631
============= ============ ============ ============
Basic and diluted net income
(loss) per common share $ (.00) $ .00 $ (.00) $ (.00)
============= ============ ============ ============
F-14
RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
NOTE K - SUBSEQUENT EVENT
On March 31, 2004, the Company entered into a definitive agreement and
plan of reorganization with American Apparel and Accessories, Inc., a
privately-held Arkansas corporation (hereinafter referred to as "A3")
pursuant to which the Company is currently proceeding with the reverse
merger. Pursuant to the agreement, the Company's common stock shall be
reverse split, one-for-ten. In exchange for the acquisition of A3, the
Company will issue an aggregate of 23,500,000 shares of its post-reverse
split, restricted Common Stock and Stock Purchase Option to the A3
shareholders in replacement of their canceled A3 Common Stock and
unexercised A3 Common Stock Purchase Warrants. The Company will also
receive cash in the amount of $250,000 paid by A3 as a material aspect of
the consideration for the reverse merger transaction.
Upon completion of the reverse merger transaction, the Company's name will
be changed to American Apparel and Accessories, Inc. Additionally, upon
closing of the reverse merger transaction, American Apparel and
Accessories, Inc., an Arkansas corporation, will terminate, all of its
capital stock will be canceled and its assets and liabilities will become
the assets and liabilities of the Registrant, the surviving, merged
corporation.
NOTE K - SUBSEQUENT EVENT (Cont'd)
In connection with the plan of reorganization, the Company will transfer
and convey virtually all of its assets, net of expenses of the reverse
merger transaction, and all of its liabilities to its wholly-owned
subsidiary, Corrections Systems International, Inc., a privately-held
Florida corporation ("CSII"). All of the shares of CSII now owned by the
Company will be distributed to the pre-merger shareholders of the Company
on a share-for-share basis as a dividend by the Company. That is, for
each pre-merger share of the Company's common stock held, the shareholder
will receive one share of CSII's common stock which will, upon
distribution of all of the capital stock of that corporation, a stand-
alone, privately held Florida corporation owned by all of the Company's
pre-merger stockholders in proportion with their pre-merger ownership
interest in the Company.
F-15