10QSB/A 1 dec04-10qsba.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB/A [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended December 31, 2004 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 33-02035-A ---------------------- (Commission File Number) RAM VENTURE HOLDINGS CORP. ------------------------------------------------------------------------ (Exact name of Small Business Registrant as specified in its charter) Florida 59-2508470 ------------------------------ ------------ (State or other jurisdiction of (IRS Employer incorporation or organization) Identification Number) 7 Clearwater Drive, Suite D, Little Rock, Arkansas 72204 ----------------------------------------------------------- (Address of Principal Executive Offices) (501) 228-5590 ----------------------------- (Registrant's Telephone Number) 5310 South Shackleford Road, Suite D, Little Rock, Arkansas 72204 --------------------------------------------------------------------- (Former Name, Former Address and former Fiscal Year, if changed since last report) Check whether the Issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [ ] APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Check whether the registrant filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act after the distribution of securities under a plan confirmed by a court. YES [ ] NO [ ] APPLICABLE ONLY TO CORPORATE ISSUERS: State the number of shares outstanding of each of the Issuer's classes of common equity, as of the latest practicable date: The number of shares of the Registrant's Common Stock outstanding as of February 3, 2005 was 18,779,692. RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY INDEX ----- Page ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheet-December 31, 2004(Unaudited)...................5 Consolidated Statements of Operations - Three months ended December 31, 2004 and 2003 (Unaudited)..................................6 Consolidated Statements of Operations - Nine months ended December 31, 2004 and 2003 (Unaudited)..................................7 Consolidated Statements of Cash Flows - Nine months ended December 31, 2004 and 2003 (Unaudited)..................................8 Consolidated Statements of Stockholders' Deficit - December 31, 2004 (Unaudited)...........................................9 Notes to Consolidated Financial Statements (Unaudited)....................10 Item 2. Management's Discussion and Analysis or Plan of Operations......11 Item 3. Controls and Procedures.........................................12 PART II. OTHER INFORMATION Item 5. Other Information...............................................13 Item 6. Exhibits and Reports on Form 8-K................................18 SIGNATURES................................................................21 CERTIFICATIONS............................................................22 PART I - FINANCIAL INFORMATION --------------------- Item 1. Financial Statements RAM Venture Holdings Corp. (f/k/a American Apparel and Accessories, Inc.) Consolidated Balance Sheet Unaudited December 31, 2004
Assets Liabilities and Stockholders' Deficit Current Assets Current Liabilities Cash $ 27,944 Borrowings under line of credit $ 816,609 Accounts receivable, net 159,598 Demand notes: Inventories, net 1,309,552 Related parties 10,032,962 Prepaid expenses 15,299 Others 250,000 -------------- Total current assets 1,512,393 Accrued interest 1,027,248 Current portion of notes payable 1,669,506 Convertible debt 150,000 Accounts payable 1,927,812 Property and Equipment Other accrued expenses 166,301 ------------- Furniture and fixtures 268,652 Total current liabilities 16,040,438 Machinery and equipment 53,104 Less accumulated depreciation (218,295) Long-Term Debt -------------- 103,461 Notes payable 2,055 Stockholders' Deficit Common stock $0.0001 par value, authorized 75,000,000 shares; issued and outstanding 18,779,662 1,878 Additional paid-in capital 6,252,422 Deficit (20,680,939) ------------- (14,426,639) ------------- Total Assets $ 1,615,854 Total Liabilities and ============== Stockholders' Deficit $ 1,615,854 =============
See notes to consolidated financial statements. RAM Venture Holdings Corp. (f/k/a American Apparel and Accessories, Inc.) Consolidated Statements of Operations Unaudited Three Months Ended December 31, 2004 and 2003
2004 2003 --------------- --------------- Revenues Net sales $ 426,197 $ 652,613 Licensing 25,238 4,704 --------------- --------------- 451,435 657,317 Cost of goods sold 184,035 577,167 --------------- --------------- Gross profit 267,400 80,150 Selling and administrative expenses 1,113,718 928,230 --------------- --------------- Operating loss (846,318) (848,080) Other Income (Expense) Interest (240,545) (233,519) Other (329,055) 19,465 --------------- --------------- Net loss $ (1,415,918) $ (1,062,134) =============== =============== Basic and diluted net loss per common share $ (0.08) $ (0.06) =============== =============== Basic and diluted weighted average number of common shares outstanding 18,680,733 17,979,662 =============== ===============
See notes to consolidated financial statements. RAM Venture Holdings Corp. (f/k/a American Apparel and Accessories, Inc.) Consolidated Statements of Operations Unaudited Nine Months Ended December 31, 2004 and 2003
2004 2003 ------------ ------------ Revenues Net sales $ 1,205,952 $ 1,463,212 Licensing 112,901 93,958 ------------ ------------ 1,318,853 1,557,170 Cost of goods sold 662,347 1,577,105 ------------ ------------ Gross profit (loss) 656,506 (19,935) Selling and administrative expenses 2,553,672 2,772,867 ------------ ------------ Operating loss (1,897,166) (2,792,802) Other Income (Expense) Interest (714,027) (655,841) Merger costs (609,131) - Other (329,055) 19,465 ------------ ------------ Net loss $ (3,549,379) $ (3,429,178) ============ ============ Basic and diluted net loss per common share $ (0.19) $ (0.19) ============ ============ Basic and diluted weighted average number of common shares outstanding 18,547,167 17,979,662 ============ ============
See notes to consolidated financial statements. RAM Venture Holdings Corp. (f/k/a American Apparel and Accessories, Inc.) Consolidated Statements of Cash Flows Unaudited Nine Months Ended December 31, 2004 and 2003
2004 2003 ------------- ------------- Operating Activities Net loss $ (3,549,379) $ (3,429,178) Adjustments to reconcile net loss to net cash used in operating activities: Services paid with common stock 320,000 - Depreciation 43,416 74,317 Provision for bad debts 12,780 3,007 Provision for write-down of inventories (28,800) 156,959 Gain on sale of assets - (38,351) Loss on forfeiture of acquisition deposits 325,000 - Changes in operating assets and liabilities: Accounts receivable 217,827 34,263 Inventories 165,477 (441,580) Prepaid expenses 58,150 (4,200) Accounts payable 560,083 987,166 Accrued interest payable 513,277 351,252 Other accrued expenses 113,697 (10,941) ------------- ------------- Net cash used in operating activities (1,248,472) (2,317,286) Investing Activities Capital expenditures (16,353) (29,012) Proceeds from sale of assets - 1,275,968 Nonrefundable deposit on Hodgeman acquisition (250,000) (76,507) ------------- ------------- Net cash provided by (used in) investing activities (266,353) 1,170,449 Financing Activities Issuance of common stock 30,000 - Borrowings on notes payable 1,334,688 4,104,509 Payments on notes payable (160,458) (2,946,986) ------------- ------------- Net cash provided by financing activities 1,204,230 1,157,523 ------------- ------------- Net increase (decrease) in cash (310,595) 10,686 Cash, beginning of period 338,539 14,585 ------------- ------------- Cash, end of period $ 27,944 $ 25,271 ============= ============= Supplemental Disclosures of Cash Flow Information Cash paid for interest $ 200,750 $ 304,589 ============= =============
See notes to consolidated financial statements. RAM Venture Holdings Corp. (f/k/a American Apparel and Accessories, Inc.) Consolidated Statements of Stockholders' Deficit Unaudited
Retained Earnings/ Common Stock Additional Accumulated Shares Amount Paid-In Capital (Deficit) __________________________________________________________________ Recapitalization as a result of merger 16,479,662 $ 1,648 $ 4,133,186 $ (7,564,987) Equity of shell in Merger 1,500,000 150 (150) - Issuance of common in debt conversion 3,500,000 35,000 1,720,406 - Net loss - - - (5,160,570) Recapitalization Adjustment (3,500,000) (35,000) 35,000 __________________________________________________________________ Balance at March 31, 2003 17,979,662 1,798 5,888,442 (12,725,557) Issuance of common stock 1,406,000 14,060 - - Net loss - - - (4,406,003) Recapitalization adjustment (1,406,000) (14,060) 14,060 - __________________________________________________________________ Balance at March 31, 2004 17,979,662 1,798 5,902,502 (17,131,560) Stock issued for services 500,000 50 319,950 - Stock issued upon exercise of options 300,000 30 29,970 - Net loss - - - (3,549,379) __________________________________________________________________ Balance at December 31, 2004 18,779,662 $ 1,878 $ 6,252,422 $ (20,680,939) ==================================================================
See notes to consolidated financial statements. __________________________________________________________________________ [1] Organization and Basis of Presentation and Nature of Operations RAM Venture Holdings Corp. (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 had no pre-reverse merger commercial operations since that time. Early in March, 2004, the Company entered into discussions and negotiations with American Apparel and Accessories, Inc. ("A3"), a privately-held Arkansas corporation, regarding the Company's acquisition of all of the capital stock of A3 in a reverse merger transaction in which the Company was to be the surviving entity 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. On April 21, 2004, the reverse merger was completed. Prior to the consummation of the merger, the Company completed a 1-for-10 reverse stock split, effective April 19, 2004, for stockholders of record on the record date, April 16, 2004, in which each ten shares of the Company's common stock were converted into one share of the Company's common stock. In exchange for the acquisition of A3, the Company issued an aggregate of 16,479,692 shares of its post-reverse split, restricted common stock and options to purchase up to 7,020,308 additional shares of post-reverse split common stock to the A3 stockholders for cancellation of their A3 common and preferred stock and unexercised A3 stock options. The pre-merger stockholders received cash in the amount of $250,000, paid by A3 as a material aspect of the reverse merger transaction. This amount was expensed. For accounting purposes, the merger was treated as a recapitalization of A3 with an issuance of shares for cash by A3, with A3 as the acquirer. Restricted Shares issued in the amount of 16,479,692 are shown as outstanding for all periods presented in these financial statements in the same manner as for a stock split. Pro forma information on this transaction was not presented as, at the date of this transaction, RAM was considered a public shell and accordingly, the transaction was not be considered a business combination. Operations prior to April 21, 2004 are those of A3. With closing of the reverse merger transaction, all of the A3 common and preferred stock was cancelled and all of its assets and liabilities became the assets and liabilities of the Company, as the surviving entity. Prior to consummation of the reverse merger, all of the assets and liabilities of the Company then in existence were transferred to a wholly-owned subsidiary, Corrections Systems International, Inc. (CSII). These net assets were distributed to pre-merger stockholders in the form of all of the restricted common stock of CSII. Upon closing of the merger, the Company's pre-merger stockholders held six percent (6%) of the issued and outstanding ownership interest in the surviving entity, and the stockholders of A3 held substantially all of the remaining ownership interests in the surviving entity. References to the "Company," "we", "our", and "us" refer to RAM Venture Holdings Corp. and our subsidiaries. ___________________________________________________________________________ [1] Organization and Basis of Presentation and Nature of Operations [Continued] A3 was incorporated in the state of Arkansas in 1999 to build a portfolio of brands specializing in outdoor sports inspired apparel and accessories, which personify the hunting and fishing lifestyle. Concurrent with its formation, A3 purchased Natgear, L.L.C., which owns the copyrights on several camouflage patterns and derives revenue from both royalty-licensing and wholesale and retail sales. In April 1999, A3 purchased McAlister Company, Inc. (McAlister), a manufacturer of upscale clothing for the sportsman lifestyle. In October 2003, A3 sold the assets of McAlister. In June 2000, A3 purchased Wildlife Quest Productions, Inc., a television production company that specializes in producing hunting shows, currently Wildlife Quest, which airs on ESPN and generates advertising revenues. Our customers are located in the United States. The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-QSB. The statements do reflect all adjustments (consisting of only normal recurring adjustments) which are, in the opinion of management, necessary to make the information not misleading. The statements should be read in conjunction with the Notes to the Consolidated Financial Statements for the year ended March 31, 2004 included in the Company's Form 10KSB. The consolidated financial statements include the accounts of Ram Venture Holdings Corp. and its wholly-owned subsidiaries, Natural Gear, LLC, Wildlife Quest, Inc. and McAlister Company, Inc. for the period it was owned. Intercompany balances and transactions have been eliminated. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. [2] Going Concern The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We have incurred losses since inception and have an accumulated deficit of approximately $20,681,000 at December 31, 2004, and negative cash flows from operating activities of approximately $1,248,000 for the nine months then ended. The expansion and development of our business may require additional capital. These conditions raise substantial doubt about our ability to continue as a going concern. Management expects cash flows from operating activities to improve in 2005, primarily as a result of an increase in sales. We also have plans to raise capital through various methods to payoff certain existing debt and to finance the planned acquisition of two businesses in the outdoors industry. There can be no assurance of the success of these plans. The accompanying consolidated financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern. If we fail to generate positive cash flows or obtain additional capital when required, we could continue to modify, delay or abandon some or all of our business and expansion plans. [3] Stock-Based Compensation We follow Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" (APB No. 25) with regard to the accounting for our employee stock options. Under APB No. 25, compensation expense is recognized only when the exercise price of options is below the market price of the underlying stock on the date of grant. We apply the provisions of SFAS No. 148, and SFAS No. 123 to non-employee stock-based compensation and the pro forma disclosure provisions of SFAS No. 148 to employee stock- based compensation. Our Chief Financial Officer received options in April 2004 to purchase 300,000 shares of our common stock at an exercise price of $0.001 per share which he exercised in June 2004. In June 2004, 200,000 shares of our common stock and warrants for the purchase of 300,000 shares of our common stock at $.01 per share were issued to a vendor for services rendered. In November 2004, 300,000 shares of our common stock were issued to a vendor for services rendered. [4] Other Acquisition of Business - We entered into a contract with Hodgman, Inc. (Hodgman), an outdoor products Illinois corporation and its stockholders for acquisition by us of all of Hodgman's assets used and useful in its sporting goods and accessories business including relative intellectual property, inventories, tangible personal property, accounts receivable, contracts, goodwill and going concern value. The purchase price in the proposed acquisition was approximately $13,795,000 subject to closing adjustments based upon a final calculation of the net purchased assets and Hodgman's final closing balance sheet. The Company made a nonrefundable deposit of $325,000 related to the acquisition, and subsequently forfeited the deposit for not completing the transaction in the agreed upon timeframe. We are still pursuing the acquisition. This acquisition cannot close without the Company obtaining additional financing. Debt Extension - We have a line of credit agreement with a bank for a maximum borrowing capacity of $2,250,000. At December 31, 2004, the total outstanding balance was $816,609. We also have a note payable to the bank in the amount of $1,600,000 at December 31, 2004. The line of credit and the note will mature on March 31, 2005. Other - The Company has a media buy contract for advertising. Included in accounts payable at December 31, 2004 is $1,619,999 due under the contract. Management's Discussion and Analysis of Financial Condition and Results of Operations Overview RAM Venture Holdings Corp is a holding company with two wholly owned subsidiaries, Natgear, LLC. and Wildlife Quest Productions, Inc. Natgear, LLC, doing business as Natural Gear Camouflage, is a camouflage hunting and outdoor apparel manufacturer in its developmental stage. Natural Gear also offers licensees the opportunity to use their trademarked camouflage patterns on a variety of hunting and outdoor goods. Wildlife Quest Productions, Inc. is a dormant television production company which produced an outdoor program shown on ESPN2 under the name "Wildlife Quest." Critical Accounting Policies and Use of Estimates Our financial statements are prepared in accordance with generally accepted accounting principles in the United States of America. In connection with the preparation of the financial statements, we are required to make assumptions, make estimates and apply judgments that affect the reported amounts of assets, liabilities, revenue, expenses and the related disclosures. We base our assumptions, estimates and judgments on historical experience, current trend and other factors that we believe to be relevant at the time the consolidated financial statements are prepared. On a regular basis, we review the accounting policies, assumptions, estimates and judgments to ensure that our financial statements are presented fairly and in accordance with generally accepted accounting principles in the United States of America. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material. Results of Operations The following table includes selected items in the Unaudited Consolidated Statements of Operations, reflected as a percentage of net sales:
Quarter Ended Nine Months Ended Dec-03 Dec-04 Dec-03 Dec-04 ------ ------ ------ ------ Sales 100% 100% 100% 100% Cost of goods sold 88% 41% 101% 50% Gross profit 12% 59% -1% 50% Selling, general and administrative 141% 247% 178% 194% Loss from operations -129% -187% -179% -144% Interest expense 36% 53% 42% 54% Other (income) and expense -3% 73% -1% 71% Loss before taxes -162% -314% -220% -269% Provision for taxes - - - - Net Loss -162% -314% -220% -269%
Sales consist of product purchases derived from wholesale and retail accounts, as well as, licensing revenue received from licensing the Natural Gear trademarked patterns to a variety of outdoor companies. Cost of goods sold includes the cost of merchandise, freight, distribution, inventory shrinkage, tariffs and duties. Selling, general and administrative expenses include warehouse expenses, sales and administrative payroll and fringe benefits, advertising and marketing expenses, information systems, legal, accounting, and all expenses associated with operating the Company's corporate headquarters. Third Quarter 2003 Compared to Third Quarter 2004 Net Income Net loss increased by $0.354 million, or 33%, to $1.416 million from $1.062 million in 2003. This represented a decrease in diluted earnings per share of $0.0167, or 28%, to ($0.0758) from ($0.0591) in 2003. Net Revenues Net revenues decreased by $0.206 million, or 31%, to $0.451 million from $0.657 million in 2003. McAlister's net revenues decreased $0.009 million, or 100%, from ($0.009) million in 2003 to $0.000 million in 2004. Natural Gear's net revenues decreased by $0.215 million, or 32%, to $0.451 million from $0.666 million in 2003. The decrease in net revenues by McAlister Company was the result of the divestiture of McAlister Company, Inc. The decrease in net revenues for Natural Gear resulted from a reduction of print media advertising by $0.065 million, or 96%, to $0.003 million from $0.068 million in 2003, as well as, the reduction of the fall catalog by 150,000 units. Gross Profit Gross profit increased by $0.187 million, or 334%, to $0.267 million from $0.080 million in 2003. McAlister's gross profit increased by $0.255 million, or 100%, from ($0.255) million in 2003 to $0.000 million in 2004. Natural Gear's gross profit decreased by $0.068 million, or 20%, to $0.267 million from $0.335 million in 2003. The increase resulted primarily from the divestiture of McAlister Company, Inc. Selling, General and Administrative Expenses Selling, general and administrative expenses increased by $0.186 million, or 17%, to $1.114 million from $0.928 million in 2003. McAlister's S, G and A expenses decreased by $.069 million, or 100%, to $0.000 million from $0.069 million in 2003. Natural Gear's S, G and A expenses increased $0.255 million, or 23%, to $1.114 million from $0.859 million in 2003. This increase resulted primarily from consulting and legal services in respect to being a public company. All other S, G and A remained relatively unchanged. Net Interest Expense Net interest expense increased by $0.007 million, or 3%, to $0.241 million from $0.234 million in 2003. Nine Months Ended Dec. 2003 Compared to Nine Months Ended Dec. 2004 Net Income Net loss increased by $0.120 million, or 3%, to $3.549 million from $3.429 million in 2003. This represented an decrease in diluted earnings per share of $0.0007, or 0.37%, to ($0.1914) from ($0.1907) in 2003. Net Revenues Net revenues decreased by $0.238 million, or 4%, to $1.319 million from $1.557 million in 2003. This decrease resulted primarily due to the divestiture of the McAlister Company, Inc. in 2003. McAlister had net revenues for the nine months ended of $0.225 million in 2003 and $0.000 million in 2004, resulting in a decrease of $0.225 million, or 100%, due to the divestiture. Natural Gear had net revenues for the nine months ended of $1.332 million in 2003 and $1.319 million in 2004, resulting in a decrease of $0.013 million, or 1%. Gross Profit Gross profit increased by $0.677 million, or 3285%, to $0.657 million from ($0.020) million in 2003. McAlister's gross profit increased $0.236 million, or 100%, to $0.000 million from ($0.236) million in 2003. Natural Gear's gross profit increased $0.441 million, or 304%, to $0.657 million from $0.216 million in 2003. The increase resulted from a combination of changing from domestic to foreign suppliers to decrease its cost of goods sold and by taking significant inventory value write downs in 2003, that did not occur in 2004. Selling, General and Administrative Expenses Selling, general and administrative expenses decreased by $0.219 million, or 8%, to $2.554 million from $2.773 million in 2003. McAlister's S, G and A expenses decreased by $0.529 million, or 100%, to $0.000 million from $0.529 million in 2003. Natural Gear's S, G and A expenses increased by $0.310 million, or 4%, to $2.554 million from $2.244 million in 2003. This decrease resulted from the divestiture of McAlister Company and Natural Gear's increased consulting and legal services over 2003. All other S, G and A remained relatively unchanged. Net Interest Expense Net interest expense increased by $0.058 million, or 8%, to $0.714 million from $0.656 million in 2003. Liquidity and Capital Resources Our primary capital requirements are for inventory and brand building expenses associated with Natural Gear. The company's main source of liquidity in 2004 and 2003 has been short term borrowings backed by an officer's personal guarantees. It is management's intention to raise necessary capital to replace most of the existing debt and restructure the Balance Sheet to accommodate future growth and the acquisition plans now in place. The change in cash and cash equivalents is as follows:
Nine Months Ended Dec-03 Dec-04 ------ ------ Net cash used in operating activities $ (2,317,286) $ (1,248,472) Net cash provided by (used in) investing activities 1,170,449 (266,353) Net cash provided by (used in) financing activities 1,157,523 1,204,230 ------------ ------------- Net increase (decrease) in cash and cash equivalents $ 10,686 $ (310,595)
Risks and Uncertainties The market for our camouflage apparel is highly fragmented and intensely competitive. Our current and prospective competitors include many large companies that have greater market presence, name recognition, and financial, marketing and other resources than we have. We compete directly with the following categories of companies: * Large Camouflage licensing companies * Large outdoor and hunting apparel manufacturers Pressure from our competitors could force us to reduce our prices or increase our spending for advertising and promotion. Increased competition in markets in which we sell goods could cause us to lose market share and could have a material adverse effect on our business, financial condition and results of operations. Our strategy includes expanding our market penetration in manufactured apparel as well as expanding our royalty revenue by increasing the number of our licensees. In addition our strategy includes acquiring "Best of Brand" companies within the hunting and fishing categories. We must successfully achieve our sales goals as well as identify and acquire other companies that meet our acquisition criteria. Our financial performance could be adversely affected if we fail to adequately execute this strategy. If we are unable to react to changing consumer demand we may lose customers and our sales may decline. We may be subject to product liability lawsuits and our insurance may not be sufficient to cover damages from those related claims. If our suppliers, distributors, or manufacturers do not supply us with sufficient quantities of product our sales and profitability will suffer. We purchase merchandise from relatively few vendors. Our dependence on our principal suppliers involves risk. If there is a disruption in supply from a principal supplier we may be unable to obtain merchandise required to meet our sales objectives. Most of the goods that we purchase are manufactured abroad. Foreign imports subject us to risks of changes in import duties, quotas, work stoppages, delays in shipment, freight cost increases, and economic uncertainty. If any of these uncertainties were to cause a disruption of trade from these countries our inventory levels may be reduced or the costs of our products may increase. To date we have not experienced any of these difficulties from our current suppliers. We intend to implement a new information system to handle our E- commerce sales efforts. The implementation of this software could disrupt our operations and negatively impact our financial results and materially adversely affect our business operations. We rely on two distribution centers. If there is a natural disaster or other serious disruption we may lose merchandise and be unable to effectively ship to our customers. Such events could negatively affect our sales and profitability. Our business is seasonal and our annual results are highly dependent on the success of our third and fourth quarter sales. Our sales depend on discretionary spending by the consumer. A deterioration of current economic conditions or an economic downturn in any of our major markets, or in general, could result in declining sales and impair our growth. Our sales may be harmed by unseasonably warm or cold weather conditions. Many of our customers are selling to hunting enthusiasts which are affected by changing weather conditions that vary the hunting activity. The terms of our existing debt impose operating and financial restrictions on us, which may impair our ability to respond to changing business and economic conditions. If we are unable to generate sufficient cash flows from operations in the future, we may have to refinance a portion or all of our debt. We are currently seeking additional capital to refinance our debt and to provide funds to acquire two acquisition candidates. We cannot assure you that refinancing, or additional financing, will be successful or that we will be able to operate at a profit. Our intent to undertake and complete strategic acquisitions could have an adverse impact on our business. We may not be able to successfully integrate companies that we acquire, including their personnel, financial systems, distribution, operations, and general operating procedures. If we fail to successfully integrate acquisitions our business could suffer. We continue to plan for two such acquisitions. Our success depends on hiring and retaining quality personnel in our operation. We plan to expand our senior level management base as well as our overall employee base. Competition for quality personnel is intense. We are dependent on the employees at all levels to execute our business plan. If we are unable to hire and retain employees capable of executing our plans our business could be adversely affected. Among the chief uncertainties facing our nation and our world, and as a result our business, is the continuing instability and conflict in the Middle East. We are unable to predict what the overall economic impact to our company will be as a result of this uncertainty. Obviously, events in the Middle East and subsequent terrorist attacks may cause disruption to our Company which could significantly impact our net sales, costs, expenses, distribution, and financial condition. The market price of our Common Stock is likely to be volatile as the stock market in general has been volatile. Factors which could cause fluctuation in the stock price may include, among other things: * Actual or anticipated variations in quarterly operating results * Changes in financial estimates by security analysts * Conditions or trends in our industry * Changes in market value of similar companies * Announcements by us or our competitors of significant acquisitions * Changing capital commitments * Additions or departures of key personnel * Sales of Common Stock * General economic conditions * Changing governmental regulations Many of these factors are beyond our control. These factors may cause the market price of our stock to decline regardless of operating performance. Item 3. Controls and Procedures -------------------------------- In meeting its responsibility for the reliability of our financial statements, the Company maintains a system of internal controls. This system is designed to provide management with reasonable assurance that assets are safeguarded and transactions are executed in accordance with the appropriate corporate authorization and recorded properly to permit the preparation of the financial statements in accordance with accounting principles generally accepted in the United States of America. The concept of reasonable assurance recognizes that the design, monitoring and revision of internal accounting and other controls involve, among other considerations, management's judgments with respect to the relative costs and expected benefits of specific control measures. An effective system of internal controls, no matter how well designed, has inherent limitations and may not prevent or detect a material misstatement in published financial statements. Nevertheless, management believes that its system of internal controls provides reasonable assurance with respect to the reliability of its consolidated financial statements. Our Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures, as such term is defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as of September 30, 2004 (the "Evaluation Date"). Based on such evaluation, such officers have concluded that, as of the Evaluation Date, the Company's disclosure controls and procedures are effective, (i) in alerting them on a timely basis to material information relating to us, including our consolidated subsidiaries, that is required to be included in our reports filed or submitted under the Exchange Act, and (ii) to ensure that information required to be disclosed in the reports that we file under the Exchange Act is recorded, processed, summarized an reported, within the time periods specified in the Commission's rules and forms and, (iii) to ensure that information required to be discussed in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, to allow timely decisions regarding required disclosure. There have not been any changes during our last fiscal quarter in our internal controls has materially affected, or is reasonably likely to materially affect, or internal control over financial reporting. RAM VENTURE HOLDINGS CORP. AND SUBSIDIARY PART II Item 5. Other Information ------------------ We anticipated, in the Quarter ended December 31, 2004, that we would be able to complete two previously reported planned acquisitions with proceeds from equity financing undertaken at mid-year. We expected to raise a substantial part of the gross proceeds from that financing effort to complete the acquisition of certain assets of Hodgman, Inc., Mack's Sports Shop, LLLP and Mack's Prairie Wings at midyear. We were, however, unsuccessful in implementing our private placement. We still require gross proceeds from an equity financing to provide us with the cash necessary for further pursuit of acquisitions. If we continue to be unsuccessful in our financing efforts and undertakings, the Company will be adversely affected and less likely to be able to continue as a going concern. Item 6. Exhibits and Reports on Form 8-K -------------------------------- Exhibit No. Description 31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 executed by Chief Executive Officer 31.2 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 executed by Chief Financial Officer 32.1 Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 executed by Chief Executive Officer 32.2 Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 executed by Chief Financial Officer (b) The Registrant filed two (2) Current Reports on Form 8-K in the three (3) month period ended December 31, 2004 as follows: Form 8-K dated filed December 1, 2004 and filed December 6, 2004 disclosing as Item 1.02 termination of the Company's Contract to acquire certain assets of Hodgman, Inc. Form 8-K filed December 16, 2004 and filed December 20, 2004 disclosing as Item 1.02 expiration of the Registration's option to purchase the assets of Mack's Sports Shops, LLLP without exercise. Form 8-K dated July 8, 2004 disclosing the Registrant's acquisition on an option to acquire Mack's; as Item 2. SIGNATURES In accordance with 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. Date: April 21, 2005 By:/s/Jeff Harris ----------------------------------- Jeff Harris, Chief Executive Officer