<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarter Report Pursuant To Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended March 31, 2000 Commission File Number: 033-12507-NY
RAMOIL MANAGEMENT, LTD.
(Exact name of registrant as specified in charter)
<TABLE>
<S> <C>
DELAWARE 13-3437739
(State or other jurisdiction of incorporation (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
<TABLE>
<S> <C>
2424 NORTH FEDERAL HIGHWAY, SUITE 350, BOCA RATON, FLORIDA 33431
(Address of principal executive offices) (Zip Code)
</TABLE>
(516) 338-5611
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
The number of shares of common stock outstanding as of March 31, 2000 was
5,571,332
1
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RAMOIL MANAGEMENT, LTD.
AND CONSOLIDATED SUBSIDIARY COMPANIES
INDEX
<TABLE>
<S> <C>
PART I - FINANCIAL INFORMATION PAGE
Item 1. Financial Statements:
Unaudited Consolidated Balance Sheet as of March 31, 2000
and December 31, 1999 3
Unaudited Consolidated Statement of Operations as of the Three
Months Ended March 31, 1999 and March 31, 2000 4
Unaudited Consolidated Statement of Cash Flows as of the Three
Months Ended March 31, 1999 and March 31, 2000 5
Unaudited Consolidated Statement of Owner's Equity for the
Period January 1, 2000 to March 31, 2000 6
Notes to the Unaudited Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 10
PART II - OTHER INFORMATION
Item 1. Legal Information 21
Item 2. Changes in Securities and use of Proceeds 22
Item 3. Defaults upon Senior Securities 22
Item 4. Submission of Matters to Vote of Security Holders 22
Item 5. Other Information 22
Item 6. Exhibits and Reports on Form 8-K 23
Signatures 23
</TABLE>
2
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RAMOIL MANAGEMENT LTD.
AND CONSOLIDATED SUBSIDIARY COMPANIES
UNAUDITED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 2000 AND DECEMBER 31, 1999
<TABLE>
<CAPTION>
03/31/00 12/31/99
<S> <C> <C>
ASSETS
Current assets:
Cash $0 $0
Trade receivables 1,204,270 974,088
Inventories 872,874 792,100
Prepaid expenses 155,299 148,411
------------ ------------
Total current assets 2,232,443 1,914,599
Other assets:
Due from affiliates 868,457 868,457
Taxes receivable 675,478 657,528
Other assets 8,378 8,263
Notes receivable 2,260,000 2,260,000
Property, plant, and equipment (net of accumulated depreciation) 6,932,088 6,791,491
Goodwill (net of accumulated amortization) 163,894 179,576
------------ ------------
Total assets $13,140,738 $12,679,914
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses 3,706,440 3,627,791
Convertible debentures payable 750,000 0
Other current liabilities 196,480 126,418
------------ ------------
Total current liabilities 4,652,920 3,754,209
Long term liabilities:
Secured loans payable 1,307,908 1,342,497
Advances payables 2,868,050 2,874,214
Common Stock, par value $.0001 per share, 300,000,000 shares authorized:
5,571,332 shares issued and outstanding at March 31, 2000 and
5,571,332 at December 31, 1999 557 557
Contributed Capital in excess of stated value 13,336,836 13,336,836
Other comprehensive income- currency translation 75,223 108,919
Accumulated deficit (9,100,756) (8,737,318)
------------ ------------
Total shareholders' equity 4,311,860 4,708,994
------------ ------------
Total Liabilities & Shareholders' Equity $13,140,738 $12,679,914
============ ============
</TABLE>
Please see accompanying notes to these financial statements.
3
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RAMOIL MANAGEMENT LTD.
AND CONSOLIDATED SUBSIDIARY COMPANIES
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
AS OF THE THREE MONTHS ENDING MARCH 31, 2000 AND MARCH 31, 1999
<TABLE>
<CAPTION>
3/31/00 3/31/99
<S> <C> <C>
Revenues:
Gross Sales $20,474 $444,723
Less cost of sales (11,510) (225,211)
------------ -----------
Gross profit on sales 8,964 219,512
Less operating expenses:
General administration (323,274) (302,351)
------------ -----------
Net loss operations (314,310) (82,839)
Other revenues and expenses:
Interest income 0 11,878
Interest expense (49,128) (51,424)
------------ -----------
Net loss before provision for income taxes (363,438) (122,385)
Provision for income taxes 0 0
------------ -----------
Net loss ($363,438) ($122,385)
============ ===========
Loss per share:
Basic ($.07) ($.02)
Weighted average of Common Shares:
Basic 5,571,332 5,643,017
</TABLE>
Please see accompanying notes to these financial statements.
4
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RAMOIL MANAGEMENT LTD.
AND CONSOLIDATED SUBSIDIARY COMPANIES
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
AS OF THE THREE MONTHS ENDING MARCH 31, 2000 AND MARCH 31, 1999
<TABLE>
<CAPTION>
3/31/00 3/31/99
<S> <C> <C>
Operating Activities:
Net income (loss) ($363,438) ($122,385)
Adjustments to reconcile net income items
not requiring the use of cash:
Depreciation and amortization 39,413 38,102
Changes in other operating assets and liabilities:
Trade accounts receivable (230,182) (17,350)
Inventories (80,774) (6,943)
Prepaid expenses (6,888) 0
Taxes receivable (17,950) 83,844
Other assets (115) 39,904
Accounts payable and accrued expenses 78,649 89,215
Pensions & benefits payable 0 (16,241)
Advances payable (6,164) 1,157,972
Other current liabilities 70,062 (35,368)
------------- -------------
Net cash provided by operations (517,387) 1,210,750
Investing Activities:
Purchase of property and equipment (164,328) (960,610)
------------- -------------
Net cash used by investing activities (164,328) (960,610)
Financing Activities:
Proceeds from issuance of common stock 0 0
Issuance of convertible debentures 750,000 0
Payments of borrowings from banks (34,589) 0
Advances from affiliates 0 (127,825)
------------- -------------
Net cash provided by used by financing activities 715,411 (127,825)
Change in foreign currency valuation (33,696) (61,837)
------------- -------------
Net increase in cash during fiscal year 0 60,478
Cash balance at beginning of fiscal year 0 5,681
------------- -------------
Cash balance at end of the period $0 $66,159
============= =============
Supplemental disclosures of cash flow information:
Interest paid during the fiscal year $39,128 $51,424
Income taxes paid during the fiscal year $0 $0
</TABLE>
Please see accompanying notes to these financial statements.
5
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RAMOIL MANAGEMENT LTD.
AND CONSOLIDATED SUBSIDIARY COMPANIES
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN OWNERS' EQUITY
FOR THE PERIOD JANUARY 1, 2000 TO MARCH 31, 2000
<TABLE>
<CAPTION>
Other
Common Stock Paid in Retained Comprehensive
Shares Amount Capital Deficit Net Income Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at January 1, 2000 5,571,332 $557 $13,336,836 ($8,737,318) $108,919 $4,708,994
Shares returned to treasury 0
Foreign currency translation (33,696) (33,696)
Net income for the period (363,438) (363,438)
---------- ---- ----------- ------------ -------- ----------
Balance at March 31, 2000 5,571,332 $557 $13,336,836 ($9,100,756) $75,223 $4,311,860
========== ==== =========== ============ ======== ==========
</TABLE>
Please see accompanying notes to these financial statements.
6
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RAMOIL MANAGEMENT LTD.
AND CONSOLIDATED SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1- BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-QSB. Accordingly, they do not include all
of the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all
adjustments considered necessary for a fair presentation have been included. The
results of operations for the three months ending March 31, 2000 are not
necessarily indicative of the results to be expected for the full year. For
further information, refer to the consolidated financial statements and
footnotes thereto included in the Annual Report of Ramoil Mgt. Ltd. and
subsidiaries (the "Company") Form 10-KSB for the year ending December 31, 1999.
The consolidated financial statements include the accounts of the Company and
its subsidiaries. Significant inter-company balances and transactions have been
eliminated in consolidation.
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make reasonable estimates
and assumptions that affect the reported amounts of the assets and liabilities
and disclosure of contingent assets and liabilities and the reported amounts of
revenues and expenses at the date of the financial statements and for the period
they include. Actual results may differ from these estimates.
NOTE 2- COMPANY NAME CHANGE
In June 1996, the Company changed its name from American Corporate Investors
Inc. to Ramoil Management Ltd. This name change did not become effective
with the SEC and NASDAQ OTC:BB until January 2000. In January 2000 the Company
also obtained a new cusip number and changed its trading symbol from "ACIZ"
to "RAMO".
NOTE 3- CONVERTIBLE DEBENTURES
7
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During the quarter, the Company issued convertible debentures to a financing
company with a face value of $750,000. The debentures carry an interest rate of
10% and are due on demand and are renewable on an annual basis. The debentures
are convertible into 250,000 shares of common stock at an exercise price of
$3.00 per share. Please see note below.
Management has concluded that the debentures do not have a favorable conversion
feature and therefore there is no amortization warranted as per Emerging Issues
Task Force (EITF) No.98-5.
NOTE 4- EARNINGS PER SHARE
The Company apples SFAS No. 128, Earnings Per Share. In accordance with SFAS No.
128, basic net loss per share has been computed based on the weighted average of
common shares outstanding during the period. The effect of the convertible
debentures on loss per share is not included because their effect would be
anti-dilutive.
NOTE 5- SEGMENT INFORMATION
The Company's business operations are divided into three segments, the
engineering activities of Ramoil Engineering SPA (RME), located in Rimini,
Italy, the construction of a concrete plant in Abu Dhabi, United Arab Emirates
through CityMix, LLC. (CMIX), and the transactions of the corporate office,
Ramoil Management Company (RMC). The corporate office, through its branch office
in Abu Dhabi, is financing the construction of an office building complex in Abu
Dhabi, United Arab Emirates.
The Company's business segments are based upon business units or entities that
offer different products or services or are involved in different capital
projects.
The following is a summary of the Company's segment information for the three
months ending March 31, 2000 and March 31, 1999:
8
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<TABLE>
<CAPTION>
3/31/00 3/31/99
<S> <C> <C>
Gross sales:
RME $20,474 $444,723
CMIX 0 0
RMC 0 0
----------- -----------
Total $20,474 $444,723
=========== ===========
Gross profits
RME $8,964 $219,512
CMIX 0 0
RMC 0 0
----------- -----------
Total $8,964 $219,512
=========== ===========
Loss from operations
RME ($13,634) $142,168
CMIX (45,449) (23,432)
RMC (255,227) (201,575)
----------- -----------
Total ($314,310) ($82,839)
=========== ===========
Depreciation & amortization
RME $22,598 $21,331
CMIX 5,249 2,083
RMC 11,566 14,688
----------- -----------
Total $39,413 $38,102
=========== ===========
Interest expense
RME $11,265 $51,424
CMIX 27,860 0
RMC 10,003 0
----------- -----------
Total $49,128 $51,424
=========== ===========
Assets
RME $4,463,554 $3,149,857
CMIX 5,947,714 4,551,531
RMC 2,729,470 3,010,652
----------- -----------
Total $13,140,738 $10,712,040
=========== ===========
</TABLE>
NOTE 6- SUBSEQUENT EVENTS
In April 2000, the Company executed a 5 for 1 forward split of its common stock.
As a result, issued and outstanding shares increased from 5,571,332 to
27,856,660. Par value per share decreased from $.0001 to $.00002.
The convertible debentures exercise price decreased from $3 per share to $.60
per share and the amount of shares convertible increased from 250,000 shares to
1,250,000 shares.
9
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995
With the exception of historical information, the matters discussed in
Management's Discussion and Analysis of Financial Condition and Results of
Operations contain forward looking statements under the 1995 Private Securities
Litigation Reform Act that involve various risks and uncertainties. Typically,
these statements are indicated by words such as "anticipates", "expects",
"believes", "plans", "could", and similar words and phrases. Factors that could
cause the company's actual consolidated results to differ materially from
management's projections, forecasts, estimates and expectations include but are
not limited to the following:
Inability of the company to secure additional financing
Unexpected economic changes in the United States, Europe, and the
Middle East
The imposition of new restrictions or regulations by government
agencies in Italy and the United Arab Emirates that could affect the
Company's business activities
Whether acquired businesses perform at pro forma levels used by
management in the valuation process and whether, and the rate at
which, management is able to increase the profitability of acquired
businesses.
The ability of the Company to manage its growth in terms of
implementing internal controls and information gathering systems, and
retaining or attracting key personnel, among other things.
The amount and rate of growth in the Company's corporate general and
administrative expenses.
Changes in interest rates, which can increase or decrease the amount
the Company pays on borrowings.
10
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Changes in accounting policies and practices adopted voluntarily or
required to be adopted by generally accepted accounting principles.
The Company cautions readers that it assumes no obligation to update or publicly
release any revisions to forward-looking statements made herein or any other
forward-looking statements made by, or on behalf of, the Company.
SEGMENT REPORTING DISCLOSURES
The Company's business segments are based upon business units or entities that
offer different products or services or are involved in particular construction
projects. Below is a description of each segment.
Ramoil Engineering S.P.A. (RME) was established in 1993 under Italian law and
provides office furniture and engineering services. Initially, its principal
line of business consisted of the manufacture and sale of commercial furniture
and aluminum frames for windows, doors, and other uses. During these initial
years of business, the majority of RME's customer base was Eastern European
countries and the former Soviet Union. As a result of the economic downturn
experienced in these regions in the mid-nineteen nineties, RME lost most of its
customer base and the demand for its furniture products could not be replaced.
Consequently, RME began providing engineering services for various construction
projects in Italy and the United Arab Emirates.
City Mix LLC, (CMIX) was established in 1998 in Abu Dhabi, United Arab Emirates
and is in the process of building a concrete plant which it will own and manage
at the plant's completion. CMIX is owned by Ramoil Management Co., (RMC),
through a consulting agreement with its majority shareholder and chairman of the
board, Roduljob Rodulovic.
Ramoil Management Company, (RMC) was incorporated in 1992 in Boca Raton, Florida
and is in the business of providing consulting and managerial services to its
subsidiary companies. In late 1996, RMC opened a branch office in Abu Dhabi,
United Arab Emirates in order to manage and finance the construction project of
an office complex in Abu Dhabi, United Arab Emirates and manage various other
projects.
RESULTS OF OPERATIONS
Please note that the Company's auditors have expressed significant doubt as to
the Company's ability to continue to operate as a going concern (see Annual
Report 10-KSB as of December 31, 1999) due to the significant operating losses
incurred in fiscal 1999 and in prior fiscal years. The ability of the Company to
complete various construction projects currently underway is dependent upon its
ability to secure substantial amounts of additional funding. The eventual
success of management's plans cannot be assured nor
11
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can it be assured that the Company will achieve future profitability even in the
event that such additional funding is secured and the projects are completed.
The Company continues to incur substantial operating losses through March 31,
2000.
FIRST QUARTER ENDED MARCH 31, 2000 COMPARED TO FIRST QUARTER ENDED MARCH 31,
1999:
Consolidated sales, gross profit, and net income:
During the first three months of fiscal year 2000, the Company had combined
gross sales of $20,474, compared to $444,723 with first quarter of fiscal year
1999, a decrease of 95%. Consequently, gross profits fell to $8,964 for the
three months ending March 31, 2000 as compared to $219,512 for the three months
ending March 31, 1999, or a decrease of 96%. Gross profits as a percent of gross
sales decreased to 44% for the period as compared to 49% for the prior year's
first quarter. The Company's gross sales and gross profits are generated solely
by RME's engineering activities. CMIX and RMC are in the development stage and
are not expected to generate any profits until their respective capital projects
are completed.
Consolidated general and administrative expenses for the quarter ending March
31, 2000 increased to $323,274 as compared to $302,351 for the quarter ending
March 31, 1999, an increase of 7%.
After deducting interest cost of $49,128, net loss for Q1 2000 increased to
$363,438, or 197%, from the loss of $122,385 recognized in Q1 1999. On a per
share basis, basic loss per share increased to $.07 in Q1 2000 from $.02 in Q1
1999.
Ramoil Engineering SPA (RME):
Gross sales from RME decreased to $20,474 in Q1 2000 from $444,723 in Q1 1999,
or 95%. Consequently gross profits decreased to $8,964 from $219,512, or 96%.
Gross profits as a percentage of gross sales decreased to 44% in Q1 2000 from
49% in Q1 1999. Typically, RME's engineering revenues are generated by projects
subcontracted to it by other engineering firms in Italy and the United Arab
Emirates. The segment employs five engineers who are generally involved on one
project at a time and consequently the generation of engineering revenues is
sporadic. RME was not involved in a large engineering project during this first
quarter, as was the case in the first quarter of fiscal 1999, hence the dramatic
decrease in gross sales. Gross sales for the first quarter of fiscal 2000 are
the result of minor engineering projects and consulting. The decrease in the
gross profit percentage is a result of significant price competition that RME
faces and its efforts to meet that competition.
12
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Although RME's overhead costs decreased 71% from $77,344 in Q1 1999 to $22,598
in Q1 2000, loss from operations of RME was $13,634 in Q1 2000 compared to a
gain of $142,168 in Q1 1999. The significant decrease in overhead costs resulted
from the reduction of the number of employees and the attendant decrease in
payroll and benefits costs.
CitMix Ltd (CMIX):
Operating expenses for CMIX increased to $45,449 in Q1 2000 as compared to
$23,432 in Q1 1999, or 94%. The cost increase is attributable to the hiring of
another engineer in late fiscal 1999 and higher insurance and office
administrative expenses. The following is an approximate detail of the material
operating costs of CMIX:
<TABLE>
<S> <C>
Salary costs $18,000
Office and administration $15,000
Depreciation: $ 5,000
Travel expenses $ 5,000
</TABLE>
The increase in interest costs in Q1 2000 from Q1 1999 is a result of a $1
million bank loan executed in November 1999. The loan is secured by the
Company's sixteen cement mixers and is due in November 2002. The loan carries an
interest rate of 10.50%.
Ramoil Management Co. (RMC):
Operating costs for the corporate offices in Boca Raton, Florida and its branch
office in Abu Dhabi increased 27% to $255,227 for Q1 2000 from $201,575 in Q1
1999. The following is an approximate detail of the material operating costs
incurred:
<TABLE>
<S> <C>
Salaries and benefits $19,000
Travel costs $57,000
Depreciation $12,000
Office rent $52,000
Office administration $11,000
Professional fees $19,000
Abu Dhabi branch office salaries $66,000
Abu Dhabi branch office administration $ 8,000
</TABLE>
13
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Travel costs include the expenses incurred by management for travelling between
the United States, Italy, and Abu Dhabi.
The increase in interest costs in Q1 2000 from Q1 1999 is a result of the
$750,000 convertible debentures issued to a financing company in the first
quarter of fiscal 2000. The loan is unsecured and carries an interest rate of
10% and is due on demand.
II. DISCUSSION OF FINANCIAL CONDITION- LIQUIDITY AND CAPITAL RESOURCES
At March 31, 2000, the company had a working capital deficit of $2,420,477 as
compared to a working capital deficit of $1,839,610 at December 31, 1999. The
decrease is mainly attributable to the convertible debentures issued this
quarter that are classified as a current liability in the consolidated balance
sheet. On a consolidated basis at March 31, 2000, cash on hand was in deficit
$35,368 as compared to a deficit of $69,903 at December 31, 1999. The overdraft
bank balances are included in accounts payable in the consolidated balance
sheet. The major source of cash during the quarter was a $750,000 convertible
debenture issued to a financing company. Proceeds of the loan were used to fund
operations and to pay $164,328 for engineering services associated with the
construction of the office building complex in Abu Dhabi.
The increases in accounts receivable and accounts payable are mainly
attributable to the activities of Ramoil Engineering SPA in the normal course of
its engineering and furniture production activities and are not indicative of
any future trend of the financial position of the Company.
Receivables from affiliates represent advances to Ramoil Holdings Co., an entity
affiliated by the common ownership of the chairman of the board and majority
stockholder.
Taxes receivable are the result of the activities of RME. They represent value
added taxes (VAT taxes) receivable from the Italian government for taxes paid on
goods sold overseas over the past fiscal years. The taxes are used to secure a
$205,000 bank loan with interest of 14% taken out by RME in 1998 to fund its
operations.
Notes receivable represent funds paid to finance the construction of an
apartment complex in Abu Dhabi, United Arab Emirates. The Company originally was
the major financial support for this project that began in late 1997. In March
1999, the Company decided to amicably withdraw from the project and received a
note for the funds that it had advanced towards the project to date. The notes
are unsecured and non-interest bearing and are receivable from an Abu Dhabi
national due upon the completion of the project.
14
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The increase in property, plant, and equipment is mainly the result of
engineering services capitalized during the quarter attributable to RMC's office
building project in Abu Dhabi, United Arab Emirates.
Advances payable represents funds received from two foreign individuals with the
original intention of converting these advances to shares. However at the date
of this report, no agreement to this effect has been finalized. The loans are
unsecured and non-interest bearing.
Total assets at March 31, 2000 increased to $13,140,738 from $12,679,914 at
December 31, 1999.
The Company's total stockholders' equity decreased to $4,311,860 at March 31,
2000 from $4,708,994 at December 31, 1999. This decrease is solely the result of
the operating losses incurred during the first quarter of fiscal 2000.
During the balance of fiscal year 2000, the Company projects significant
additional capital expenditures will be needed to complete the various
construction projects in Abu Dhabi, United Arab Emirates. Management continues
to seek financing through debt and equity issuance but the success of achieving
additional financing cannot be reasonable assured.
The following is a description of the Company's capital projects that it is
currently involved in and their progress to date.
A. HOTEL AND OFFICE COMPLEX:
Ramoil has entered into a contract to serve as developer for the construction of
a hotel and office complex in the UAE. To date, initial architectural plans have
been completed and approved, a construction permit has been obtained and
construction started, and management is reviewing bids for the general
contractor. Ramoil has entered into an agreement with Ritz-Carlton, Ltd. whereby
Ritz Carlton would operate the hotel portion of the project upon its completion.
Pursuant to the agreement, Ramoil will develop a 50 story twin tower, one tower
will be a luxury hotel and the other tower will be prime office space. Ramoil
will participate in the Initial Technical Service Conferences, Preliminary
Information Phase, Preliminary Design Phase, Design Development Phase, Final
Design Phase, Bidding or Negotiating Phases with potential outside contractors,
Construction Period, Equipment Start-Up, Scheduling, Projects Visits,
Inspection, and the Post-Completion Period. Additionally, Ramoil will be
compensated as Operator with both "base" and "incentive" fees. Cash flow
projections from Ritz-Carlton, Ltd., and feasibility studies indicate a return
of the investment is expected within five years.
15
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In 1998, the Company entered into an agreement with the owner of the land site
whereby Ramoil has received a concession to the land site to be developed for a
twenty-year period. The concession right includes the right to mortgage the
land, which has an estimated value of $37 million, but not the right to sell the
land. The agreement provides that Ramoil will retain title to the assets
developed on this land site during the concession period. At the end of the
twenty-year concession period, Ramoil has agreed to pass the title of all assets
and improvements on the land developed to the original owner.
All net profits from this project will be divided 80% to Ramoil and 20% to the
original landowner. Current estimates indicate that this project will require
approximately $85 million to complete. As of the date of this report,
construction has not begun on this project. Engineering and pre-development
costs of $531,000 have been capitalized as of March 31, 2000.
B. AL AIN APARTMENT PROJECT. This project is for the construction of a
residential housing complex including 83 apartments and villa units in Al Ain
City in the UAE. Under the original contract signed by Ramoil, the Company will
be required to provide financing for a total of approximately $ 11.5 Million,
that was to be returned to it with interest from the operating revenues of the
project. Recently, at the request of the Company, the contract for this project
was terminated and the Company was released from its obligations thereunder. To
date, Ramoil, through loans from Mr. Radulovic, its CEO and shareholder, had
provided funding of approximately $2.2 Million. As part of the termination of
the Company's participation in this project, the amount previously funded by the
Company will be repaid upon completion of the project, or, alternatively, prior
to December 31, 2001. However, no specific repayment schedule has been committed
to.
C. CITY MIX CONCRETE. City Mix Concrete Inc.(CMIX) is a UAE corporation
registered for the purpose of constructing and operating a concrete plant in the
UAE. CMIX, a subsidiary of RMC, has been granted a license that will permit it
to construct and operate a concrete plant for a twenty-year period in the UAE.
All equipment, including the plant itself, will remain the property of the
Company at the conclusion of the license period. The license is transferable to
third parties at the Company's discretion.
Under this agreement, CMIX will be obligated to pay a 12% royalty on net profits
generated from this operation for the use of this license to the licensor. At
the end of the license period all interest in any existing contract to supply
concrete will revert to CMIX and Ramoil will have no further interest.
Management has begun negotiations for an extension of this twenty year term.
However, as of the date hereof, no agreement has been reached and no assurances
can be given that any extension will be granted.
Following the grant of this license in 1997, Ramoil purchased a modular concrete
plant that was shipped to the UAE for assembly. As of the date of this report
Ramoil, through RME, purchased the required mixers and trucks that currently
await shipment to the UAE. Assembly of the plant has been ongoing and management
projects that the plant
16
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will be fully operational by summer 2000. Management has been negotiating
agreements to obtain the final $1.5 Million necessary to make the plant
operational. Management is currently projecting production to commence in the
summer of 2000, if the necessary financing is obtained.
As of March 31, 2000, the Company has invested $7,544,977 towards the
construction and assembly of this plant detailed as follows:
<TABLE>
<S> <C>
Local Construction Works $1,813,396
Purchase, Handling, and Erection of Capital Equipment 5,017,707
Pre-production Costs (design, licensing, supervision) 637,717
----------
Total project investment $7,544,977
==========
</TABLE>
Management estimates the needed purchases, equipping, and assembly to complete
the plant is $1,500,000. The date of completion of the plant is subject to
funding and therefore cannot be reasonably predicted at this time.
Assembly of the plant has been ongoing and when completed, the plant will have
the capacity to produce 3,000 cubic meters of concrete per day. Through the
efforts of the Company's sponsor, CMIX has received preliminary approval as the
exclusive concrete supplier for the new port and free trade zone development
project in the UAE (see Saadyat Free Trade Zone below). Of course, finalizing
this contract must await completion of the plant to be certain that CMIX will be
able to fulfill its obligations thereunder.
$3,088,397 of the amount invested in this project is from loans to Ramoil by
Trinal, Inc., a privately held corporation principally owned and operated by Mr.
Taflevich, the Company's President, and by Crystal Ball, Inc., and affiliated
company of Mr. Taflevich. Said loans have been satisfied by shares of Ramoil
Management, Ltd.
D. SAADIYAT FREE TRADE ZONE. The UAE is currently completing plans for the
construction of a new port facility and free trade zone. This project, known as
the Saadiyat Free Trade Zone Authority (SFTZA) is scheduled to be constructed on
Saadiyat Island in Abu Dhabi and is estimated to require approximately $3.3
billion to complete. Final approval for the project was given by the UAE
Executive Council in early 1999. This constituted the final consent in the
approval process for this project and the Saadiyat Development Company will now
proceed with plans to raise the capital required for construction, which is
planned to be completed through a combination of a public and
17
<PAGE>
institutional offering in the UAE and a global offering of shares to
institutional and corporate investors. Through the efforts of its sponsor, the
Company has been offered an opportunity to purchase shares of SFTZA as a
"founder" along with six other major corporations. As a "founder," the Company
is required to invest $50 Million. In furtherance of its responsibility as a
"founder," the Company has signed a letter of intent to purchase 45% of a Swiss
Finance Company valued at over $150 Million. The Swiss Company, whose name is
withheld pursuant to the letter of intent, has been established for over twenty
years. The Swiss Company has diversified trading operations in foreign exchange,
precious metals, and energy. The Company's strong revenue producing ability lies
primarily in its strategic position in the precious metals market in Middle
Eastern and African Countries.
ACQUISITION OF YORK RESOURCES, INC. AND INYC.COM
The Registrant has entered into letters of intent to acquire York Resources,
Inc., a subsidiary of York Energy Limited and iNYC.com. York Resources, Inc. is
a producer of natural gas in the Gulf of Mexico, offshore Texas, Louisiana.
iNYC.com is a provider of DSL, other internet services, as well as providing
one-stop, turn-key, solutions for all business and residential internet
requirements. iNYC.com recently revolutionized web access wth the recent launch
of free DSL. The proprietary program creates a level playing field for internet
users. Management believes that these acquisitions represent outstanding value
and provide excellent opportunity for synergistic partnerships with Ramoil
operations. The specific terms of the acquisition agreements are currently being
negotiated.
The foregoing summarizes the business opportunities that Ramoil has been able to
secure though the efforts of its sponsor in the UAE. However, it must be
remembered that the foregoing projects each require a significant capital
commitment by the Company. Further, in some cases, Ramoil will need to provide
specific funds within restrictive time periods or suffer a loss of any previous
investment made in such project. At present, it seems highly unlikely that
Ramoil will be able to meet all of its obligations, particularly for providing
funding, in connection with all of the foregoing projects. In such event the
Company will lose the related opportunity. Further, it is possible that
Rarnoil's failure to meet its commitments under the foregoing projects will
cause its Sponsor to either terminate the sponsorship agreement or to cease
providing available business opportunities to Registrant in the future. In such
event, it is likely that Registrant will lose all or a significant portion of
its investment in the foregoing projects due to the unavailability of needed
financing.
In evaluating the Company's ability to establish viable commercial operations,
it must be remembered that, at present, the only revenue-generating segment of
the Company is that of RME. However, in terms of the future growth of the
Company's operations, great emphasis has been placed on the future success of
the Company's projects in the UAE. Should the Company not be able to meet its
obligations with respect to the projects, as
18
<PAGE>
discussed above, and lose the support of its sponsor, it is likely that RME
would also lose any expected participation in business forthcoming in the UAE.
In September, 1998, Registrant and Mr. Radulovic reach an agreement whereby Mr.
Radulovic agreed to convert certain of his loans to Registrant in the principal
amount of $2,198,000, into shares of common stock at the rate of $3.00 per Share
and received 732,667 Shares. In December 1998, Mr. Radulovic agreed to convert
an additional $815,000 in loans made to support the Company's operations in Abu
Dhabi also at the rate of $3.00 per Share and received an additional 271,666
Shares. The price per share was negotiated based upon 80% of the average closing
price for Registrant's shares during September 1998, when the original agreement
to convert his loans to equity was reached. All of the Shares received by Mr.
Radulovic were "restricted securities" as defined under the Securities Act of
1933, as amended (the "Act").
Also in September 1998, both Trinal and Cristal Ball agreed to convert their
outstanding loans in the principal amount of $3,088,397 to shares of common
stock at the rate of $3.00 per Share. Consequently, these companies received, in
the aggregate, 1,029,466 Shares of Registrant's common stock all of which Shares
were also "restricted securities" as that term is defined under the Act.
III. TRENDS AFFECTING LIQUIDITY, CAPITAL RESOURCES AND OPERATIONS
Over the past decade, economic conditions worldwide have favored the development
of business oriented projects designed to meet the needs of developing business
and financial interests in many developing areas. Among the fastest growing
areas in the world is the Middle East. Combining the great wealth that come from
extensive oil-related interests with diminished threats of war and terrorist
activities, the UAE has emerged as a leader in this region. Management believes
this trend, coupled with the support of the Company's sponsor, who himself is a
recognized leader in the region, has situated the Company in a position to
participate in the growth of the UAE. Provided the Company can meet its
financial obligations under the various projects discussed above, management
believes it can be an integral part of the growth being experienced in the UAE
and that the beriefits to the Company will be a major factor in its growth over
the foreseeable future.
With the collapse of traditional political and ideological barriers, the demand
for products from all parts of the world has increased perceptibly with many
developing and third world nations now looking for products from many different
countries. This has been particularly true of countries with "soft" currencies
(i.e. currencies not readily exchangeable into established currencies such as
British pounds, US dollars, etc.), which at present are unable to pay for their
purchases in US dollars. Management believes that the greatest demand for all
kinds of foreign products will come from these new developing third world
countries over the foreseeable future. This is but one factor that favors the
development of a free trade zone in the Middle East, such as the Saadiyat Free
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<PAGE>
Trade Zone proposed by the UAE. Management knows of no other trends reasonably
expected to have a material impact upon the Company's operations or liquidity in
the foreseeable future.
IV. INFLATION.
During the past few years inflation worldwide has been relatively stable which,
coupled with the relative strength of the economic conditions in the Middle
East, including the UAE, discussed above, is expected to have a beneficial
effect upon the Company's planned operations in the UAE. In recent days we have
seen the Federal Reserve Board of the United States make substantial moves to
curb inflation. It is management's belief, that inflation will continue to be
controlled and favorable conditions are expected to continue for the foreseeable
future and management does not anticipate that inflation will have an adverse
impact upon its operations in the foreseeable future.
V. YEAR 2000 COMPLIANCE.
The Year 2000 issue is the result of computer programs being written using two
digits, rather than four to define the applicable year. Any of the Company's
computer programs that have data-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. This could result in a system
failure or miscalculations causing disruptions of operations, including, among
other things, a temporary inability to process transactions, send invoices, or
engage in similar normal business activities.
Based upon an assessment made during fiscal 1998, the Company has updated all
versions of operations and financial software so that all of its systems are
utilizing dates beyond December 31, 1999. In addition, the Company has evaluated
its auxiliary computer application systems for Year 2000 compliance. The Company
has mitigated the Year 2000 issue and is functioning trouble free in 2000.
The Company initiated formal communications with all of its significant
suppliers, financial institutions and major customers to determine the extent to
which the Company may have been vulnerable to any third parties' failure to
remediate their own Year 2000 issues. The financial impact to the Company of
bringing its equipment and systems into Year 2000 compliance did not materially
effect its financial position or results of operations.
20
<PAGE>
RAMOIL MANAGEMENT, LTD.
AND CONSOLIDATED SUBSIDIARY COMPANIES
PART II. OTHER INFORMATION
ITEM 1. LEGAL INFORMATION
There are several currently pending actions against Registrant. These include
the following matters:
A. In May 1996, a legal action was filed against the Company and its principal
shareholder. In this suit, a Russian oil company, Lukoil, alleges that it is
owed $12.5 Million from a formerly affiliated entity of the Company resulting
from a failure to comply with the terms of an oil-trading contract. Although the
original state court action was voluntarily dismissed, the suit was later
instituted in Federal District court. The Company intends to vigorously defend
against the claims being made. Currently, the Company has filed a motion to
dismiss this action. There has been no decision on this motion.
B. Also in May 1998, Lukoil also filed a suit in Federal District Court for the
purpose of enforcement of a prior arbitration award obtained against an
affiliated company of Registrant. This award, in the amount of approximately
$12,162,000 was obtained from the International Commercial Arbitration Court of
the Chamber of Commerce and Industry of the Russian Federation in Moscow. The US
suit seeks to confirm the award against the affiliated company and to recover
the amount awarded from that company as well as Registrant and Mr. Radulovic
personally. The two Lukoil cases have now been consolidated in the Federal Court
action. As of the date of this Report, Registrant has not entered into any
settlement discussions and counsel for the Registrant defending these suits
cannot provide an evaluation of the likelihood of success by the Company in this
matter. The Company has also filed a motion to dismiss this action. No decision
has yet been received.
C. In August 1996, suit was filed against Registrant and Mr. Radulovic claiming
damages of approximately $3.3 Million arising out of contract it had with
another affiliated company of Mr. Radulovic. The Company is vigorously defending
this suit. At present, Registrant has entered into settlement discussions and
counsel for the Registrant defending these suits cannot provide an evaluation of
the discussions.
D. There are two matters, both involving claim against affiliated companies of
Mr. Radulovic which, in the aggregate, involve less than $200,000. Settlement
has been reached in these matters and the settlement, in management's opinion,
will not adversely impact upon Registrant or its operations.
E. In April 2000, Ramoil settled a potential dispute between American Pastime
Holdings, Inc. and Ramoil subsidiaries and affiliates.
21
<PAGE>
The Registrant knows of no other litigation pending, threatened or contemplated,
or unsatisfied judgements against it. The Registrant knows of no legal action
pending or threatened or judgements entered against any officers or directors of
the Company in their capacity as such.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
On February 29, 2000 the Registrant declared a dividend in the form of common
stock. The Board of Directors approved a 5 for 1 forward split of the
Registrant's outstanding shares of common stock. The stock dividend was
authorized to provide greater liquidity for the Registrant's shareholders and to
help attract additional retail and institutional investors. The record date for
the dividend was March 24, 2000 and the date payable was April 13, 2000. This
greatly increased the Registrant's issued and outstanding. The par value for
each share decreased from $.0001 to $.00002 per share.
On April 4, 2000 the Registrant issued 1,080,000 shares of pre-split common
stock registered on Form S-8 to four (4) consulting firms pursuant to consulting
agreements. The shares were earned prior to the dividend record date, therefore
the companies were issued 4,320,000 dividend shares. Thus the total issued to
the consulting firms was 5,400,000 shares.
On April 20, 2000, the Registrant issued 2,821,500 restricted shares of common
stock to satisfy a subscription agreement entered into by management on October
15, 1999. The subscription agreement was for 564,300 pre-split shares. Since the
shares were earned prior to the record date for the dividend, their owner was
issued dividend shares.
On April 14 and April 20, 2000 the Registrant issued 1,350,000 post-split shares
to American Pastime Holdings, Inc. pursuant to a settlement agreement between
the Registrant, its subsidiaries, and other affiliated companies.
The total post-split common shares issued and outstanding as of May 18, 2000
was 37,428,160.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
Market for Registrant's Common Equity and Related Stockholder Matters.
The principal market on which the Registrant's securities are traded is the
over-the-counter market. Since July, 1996 the Registrant's securities have been
trading on the "Bulletin Board" electronic quotation system under the symbol
"ACIZ." Since January 2000, the Registrant's securities have been trading on the
"Bulletin Board" electronic quotation system under the symbol "RAMO". Prior to
that time there had been only sporadic trading in the Registrant's securities.
22
<PAGE>
On May 18, 2000 the reported bid price (and most recent sale price), adjusted
for the 5 to 1 forward split, for the Registrant's Common Stock was $0.94 per
share and there were approximately 10 market makers for the Company's
securities. In February 2000 there were 249 record holders of the Company's
Shares.
DIVIDEND POLICY
The Registrant has not paid any cash dividends and there are presently no plans
to pay any such dividends in the foreseeable future. The declaration and payment
of dividends in the future will be determined by the Board of Directors in light
of conditions then existing, including earning, financial condition, capital
requirements and other factors. There are no contractual restrictions on the
Registrant's present or future ability to pay dividends. Further, there are no
restrictions on any of the Registrant's subsidiaries which would, in the future,
adversely affect the Registrant's ability to pay dividends to its shareholders.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
The following exhibits are filed as part of this report.
23.1 Consent of Brian Donahue, CPA
27.1 Financial Data Schedule
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, in Boca Raton, State of Florida, on May
18, 2000.
RAMOIL MANAGEMENT, LTD.
By /s/ Raduljob Radulovic
------------------------------------------
Raduljob Radulovic, Chief Executive Officer,
Chief Financial Officer, Secretary
By /s/ Alexander Taflevich
------------------------------------------
Alexander Taflevich, President
23
<PAGE>
BRIAN DONAHUE, CPA
354 MAIN STREET
CHATHAM, N.J. 07928
Phone (973) 635-2111 Fax (973) 635-2119
Ramoil Management Ltd.
Management:
I hereby give my consent to release to the public the Form 10-QSB dated
March 31, 2000. I attest that I have compiled the financial statements
and financial statement notes contained therein as per generally accepted
accounting principles and based upon the information provided to me
by management.
/s/ Brian Donahue
- ----------------------
Brian Donahue
May 19, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-30-2000
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 1,204,270
<ALLOWANCES> 0
<INVENTORY> 872,874
<CURRENT-ASSETS> 2,232,443
<PP&E> 8,089,543
<DEPRECIATION> 1,157,455
<TOTAL-ASSETS> 13,140,738
<CURRENT-LIABILITIES> 4,652,920
<BONDS> 0
0
0
<COMMON> 557
<OTHER-SE> 4,311,303
<TOTAL-LIABILITY-AND-EQUITY> 13,140,738
<SALES> 20,474
<TOTAL-REVENUES> 20,474
<CGS> (11,510)
<TOTAL-COSTS> (323,274)
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (49,128)
<INCOME-PRETAX> (363,438)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (363,438)
<EPS-BASIC> (0.07)
<EPS-DILUTED> 0
</TABLE>
