SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Pursuant To Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended September 30, 2000 Commission File Number: 033-12507-NY
RAMOIL MANAGEMENT, LTD.
--------------------------------------------------
(Exact name of registrant as specified in charter)
DELAWARE 13-3437739
------------------------------- -------------------------------------
(State or other jurisdiction of (I.R.S. Employer Indentification No.)
incorporation or organization)
1877 SOUTH FEDERAL HIGHWAY, SUITE 202
BOCA RATON, FLORIDA 33432
---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(702) 316-3885
----------------------------------------------------
(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes _X_ No ___
The number of shares of common stock outstanding as of September 30, 2000 was
37,428,160
1
<PAGE>
RAMOIL MANAGEMENT, LTD.
AND CONSOLIDATED SUBSIDIARY COMPANIES
INDEX
PART I - FINANCIAL INFORMATION PAGE
------------------------------ ----
Item 1. Financial Statements:
Unaudited Consolidated Balance Sheet as of September 30, 2000
and December 31, 1999 3
Unaudited Consolidated Statement of Operations as of the Three
Months and Six Months Ended Sept. 30, 1999 and Sept. 30, 2000 4
Unaudited Consolidated Statement of Cash Flows as of the Six
Months Ended Sept. 30, 1999 and Sept. 30, 2000 5
Unaudited Consolidated Statement of Owner's Equity for the
Period January 1, 2000 to September 30, 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 19
Item 2. Changes in Securities and use of Proceeds 20
Item 3. Defaults upon Senior Securities 20
Item 4. Submission of Matters to Vote of Security Holders 21
Item 5. Other Information 21
Item 6. Exhibits and Reports on Form 8-K 21
Signatures 22
ITEM 1. Financial Statements
2
<PAGE>
RAMOIL MANAGEMENT LTD.
AND CONSOLIDATED SUBSIDIARY COMPANIES
UNAUDITED CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 2000 AND DECEMBER 31, 1999
<TABLE>
<CAPTION>
09/30/00 12/31/99
<S> <C> <C>
ASSETS
Current assets:
Cash on deposit $130,036 $0
Trade accounts receivable 496,517 974,088
Inventories 804,730 792,100
Prepaid expenses 142,915 148,411
--------------- ---------------
Total current assets 1,574,198 1,914,599
Other assets:
Due from affiliates 868,457 868,457
Taxes receivable 657,528 657,528
Other assets 4,263 8,263
Notes receivable 0 2,260,000
Property, plant, and equipment (net of accumulated depreciation) 1,051,536 6,791,491
Goodwill (net of accumulated amortization) 132,530 179,576
--------------- ---------------
Total assets $4,288,512 $12,679,914
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses 2,664,257 3,627,791
Debentures payable 1,575,000 0
Other current liabilities 148,101 126,418
--------------- ---------------
Total current liabilities 4,387,358 3,754,209
Long term liabilities:
Secured bank loans payable 363,320 1,342,497
Advances payables 0 2,874,214
Common Stock, par value $.00002 per share, 300,000,000 shares authorized:
37,428,160 shares issued and outstanding at June 30, 2000 and
27,856,660 at December 31, 1999 749 557
Contributed Capital in excess of stated value 17,386,644 13,336,836
Other comprehensive income- currency translation 163,046 108,919
Accumulated deficit (18,012,605) (8,737,318)
--------------- ---------------
Total shareholders' equity (462,166) 4,708,994
--------------- ---------------
Total Liabilities & Shareholders' Equity $4,288,512 $12,679,914
=============== ===============
</TABLE>
Please see accompanying notes to these financial statements.
3
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RAMOIL MANAGEMENT LTD.
AND UNCONSOLIDATED SUBSIDIARY COMPANIES
UNAUDITED CONSOLIDATED STATEMENT OF OPERATION
FOR OF THE NINE &THREE MONTHS ENDING SEPTEMBER 30th
<TABLE>
<CAPTION>
9 mos 9 mos 3 mos 3 mos
9/30/00 9/30/99 9/30/00 9/30/99
<S> <C> <C> <C> <C>
Revenues:
Gross Sales $146,992 $1,747,388 $0 $320,091
Less cost of sales (201,951) (1,100,443) 0 (242,627)
-------------- --------------- -------------- ---------------
Gross profit on sales (54,959) 646,945 0 77,464
Less operating expenses:
General administration (4,797,867) (1,443,077) (13,633) (736,382)
-------------- --------------- -------------- ---------------
Net loss from operations (4,852,826) (796,132) (13,633) (658,918)
Other revenues and expenses:
Loss on asset disposal (4,295,324) 0 (4,295,324) 0
Interest expense (127,137) (193,467) (31,784) (26,630)
-------------- --------------- -------------- ---------------
Net loss before provision for income taxes (9,275,287) (989,599) (4,340,741) (685,548)
Provision for income taxes 0 0 0 0
-------------- --------------- -------------- ---------------
Net loss ($9,275,287) ($989,599) ($4,340,741) ($685,548)
============== =============== ============== ===============
Earnings per share:
Basic ($0.25) ($0.04) ($0.09) ($0.02)
Weighted average of Common Shares:
Basic 37,049,185 28,215,085 46,039,676 28,215,085
</TABLE>
Please see accompanying notes to these financial statements.
4
<PAGE>
RAMOIL MANAGEMENT LTD.
AND UNCONSOLIDATED SUBSIDIARY COMPANIES
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR OF THE NINE MONTHS ENDING SEPTEMBER 30th
<TABLE>
<CAPTION>
9/30/00 9/30/99
<S> <C> <C>
Operating Activities:
Net loss ($9,275,287) ($989,599)
Adjustments to reconcile net income items
not requiring the use of cash:
Depreciation 50,030 105,992
Amortization of goodwill 47,046 47,046
Consulting expense 4,050,000 0
Loss on asset disposal 4,295,324 0
Changes in other operating assets and liabilities:
Trade accounts receivable 477,571 (1,683,857)
Inventories (12,630) (568,693)
Prepaid expenses 5,496 (132,172)
Taxes receivable 0 280,466
Other assets 4,000 89,423
Accounts payable and accrued expenses (963,534) 2,554,694
Pensions & benefits 0 (370,366)
Other current liabilities 21,683 (281,420)
--------------- ----------------
Net cash used by operations (1,300,301) (948,486)
Investing Activities:
Purchase of property and equipment (198,790) (2,208,228)
--------------- ----------------
Net cash used by investing activities (198,790) (2,208,228)
Financing Activities:
Proceeds from debentures 1,575,000 0
Borrowings from banks 0 3,041,806
Advances from affiliates 0 233,743
--------------- ----------------
Net cash provided by financing activities 1,575,000 3,275,549
--------------- ----------------
Change in foreign currency valuation 54,127 (38,255)
--------------- ----------------
Net increase in cash during the period 130,036 80,580
Cash balance at beginning of fiscal year 0 5,681
--------------- ----------------
Cash balance at end of the period $130,036 $86,261
=============== ================
Supplemental disclosures of cash flow information:
Interest paid during the fiscal year $47,819 $107,990
Income taxes paid during the fiscal year $0 $0
</TABLE>
Please see accompanying notes to these financial statements.
5
<PAGE>
RAMOIL MANAGEMENT LTD.
AND UNCONSOLIDATED SUBSIDIARY COMPANIES
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN OWNERS' EQUITY
FOR THE PERIOD JANUARY 1, 2000 TO SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
Other Total
Common Common Paid in Retained Comprehensive Comprehensive
Shares Par Capital Deficit Net Income Total Net Income
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at 1/1/00 27,856,660 $557 $13,336,836 ($8,737,318) $108,919 $4,708,994
Shares issued
per subscription 2,821,500 57 (57) 0
Shares issued
to consultants 6,750,000 135 4,049,865 4,050,000
Foreign currency
translation 54,127 54,127 54,127
Net income (9,275,287) (9,275,287) (9,275,287)
------------ --------- ------------- ------------- ---------------- ------------- -----------------
Balance at 9/30/00 37,428,160 $749 $17,386,644 ($18,012,605) $163,046 ($462,166) ($9,221,160)
============ ========= ============= ============= ================ ============= =================
</TABLE>
Please see accompanying notes to these financial statements.
6
<PAGE>
RAMOIL MANAGEMENT LTD.
AND UNCONSOLIDATED 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 nine and three months ending September 30, 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 American Corporate Investors
Inc. 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 Registrant
also obtained a new cusip number and changed its trading symbol from "ACIZ" to
"RAMO"
Note 3- Stock Split and Convertible Debentures
In January 2000, the Company executed a 5 for 1 forward split of its common
shares. Common stock outstanding increased from 5,571,332 shares to 27,856,660
shares. The par value of each share decreased from $.0001 to $.00002. All prior
year share amounts in these financial statements have been retroactively
restated to show the effects of the stock split.
7
<PAGE>
During the nine months ended September 30, 2000, the Company issued convertible
debentures to a financing company with a face value of $1,575,000. The
debentures carry an interest rate of 10%. The debentures are convertible on
demand into 2,625,000 shares of common stock at an exercise price of $.60 per
share.
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- Common Stock Transactions
During April 2000, the Company issued 6,750,000 to various consultants for
services. The resulting compensation expense is calculated by multiplying the
quoted bid price of the Company's common stock at the date of the issuance by
the number of shares issued.
The total of $4,050,000 has been booked as compensation expense.
In April 2000, the Company issued 2,821,500 shares in accordance with a
subscription agreement executed in October 1999.
Note 6- Segment Closings
During the period, the Company was forced to liquidate its operations in the
United Arab Emirates and sell off its assets in order to satisfy loans that the
Company had entered into in November 1999. As a result, the Company has
recognized a loss on the disposal of the assets of the segment of $4,295,324.
Note 7- Ramoil Engineering
The financial statements presented do not include the activities of Ramoil
Engineering in Italy, however management has concluded that the result of
Engineering's operations for the quarter is immaterial.
8
<PAGE>
ITEM 2. Management's discussion and analysis of financial condition
General Statement- Factors that may affect future results
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 results to differ materially from management's
projections, forecasts, estimates and expectations include but are not limited
to the following:
o Inability of the company to secure additional financing
o Unexpected economic changes in the United States, Europe, and
the Middle East
o 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
o 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.
o 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.
o The amount and rate of growth in the Company's corporate
general and administrative expenses.
o Changes in the interest rates which can increase or decrease
the amount the Company pays on borrowing.
9
<PAGE>
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. Management of the Registrant and
this subsidiary have begun discussions regarding the eventual separation of this
company from the Registrant within the next sixty (60) days.
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. The segment was closed during the quarter ended September 30, 2000. All
Company assets have been sold to satisfy outstanding debt to banks in Abu Dhabi
and remaining assets in the concrete plant have been forfeited to the Company's
UAE sponsor as per the sponsorship agreement. The failure of the Company to meet
its obligations under the sponsorship agreement has resulted in forfeiture. RMC
has suffered substantial losses over this situation. RMC is in discussions with
Registrant in order to reach a mutually satisfactory agreement with regard to
the financial situation created by this situation.
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. During the quarter, the
Company has closed this branch and has forfeited its interest in all of its
projects to its UAE sponsor as per the sponsorship agreement. As a direct result
of the above stated situation, RMC has begun discussions with bankruptcy counsel
regarding its ability to voluntarily seek protection under the United States
Bankruptcy Laws.
10
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I. 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 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 September
30, 2000.
Consolidated sales, gross profit, and net income: (9 and 3 months)
During the three months of Q3 2000, the Company had combined gross sales of
$0 compared to $320,091 in Q3 1999, and for the nine month period, $146,992 in
2000 as compared to $1,747,388. The Company's operations have been effectively
closed this quarter. Management intends to close the corporate offices in Boca
Raton, Florida and to sell its interest in Ramoil Engineering in Rimini, Italy.
Management cannot estimate at this time the amount it may receive for such a
sale.
Gross profits fell to a loss of $54,959 for the nine months ended 9/30/00 as
compared to $646,945 for the similar period in 1999. Q3 2000 had no gross
profits as compared to $77,464 for Q3 1999.
The Company's gross sales and gross profits are generated solely by RME's
engineering activities. RME's engineering projects are mainly sub- contracted to
RME by other engineering firms in Italy. In the prior year, RME's activities
included projects that RME was the general engineering contractor. The
significant decrease in the engineering sales resulted from a loss of project
income from these subcontracting activities. RME currently is not the general
engineering contractor for any project. Management intends to sell this segment
but cannot estimate the amount of proceeds that it expects to receive from this
sale at this time.
Consolidated general and administrative expenses for the nine months and three
months ended 9/30/00 were $4,797,867 and 13,633 respectively as compared to
$13,633 and $736,382, respectively for the similar periods in 1999. The nine
month period ended 9/30/00 includes a $4,050,000 consulting expense recorded as
a result of shares issued to consultants for services.
11
<PAGE>
After deducting interest cost of $127,137 and $31,784 for nine and three month
periods ended 9/30/00 and the loss on the disposal of assets of the Abu Dhabi of
$4,295,324, the net loss for the nine months and three months ended 9/30/00 was
$9,275,287 and $4,340,741. On a per share basis, net loss for the nine and three
month period ended 9/30/00 was $.25 per share and $.09 per share.
II. Discussion of Financial Condition- Liquidity and Capital Resources
At September 30, 2000, the company had a working capital deficit of $2,813,160
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 period
that are classified as a current liability in the consolidated balance sheet.
On a consolidated basis at September 30, 2000, cash on hand was $130,036 as
compared to a deficit of $69,903 at December 31, 1999. The major source of cash
during the period was the issuance of $1,575,000 of convertible debentures. The
proceeds of the issuance of the debentures were used mostly as follows:
Cash loss from operations $1,300,301
Payment to Middle-East Foundations (Tower project) $198,790
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.
12
<PAGE>
Total assets at September 30, 2000 decreased to $4,288,512 from $12,679,914 at
December 31, 1999. The decrease is mainly due to the liquidation of the
Company's assets in the United Arab Emirates. This liquidation occurred as a
result of the foreclosure of a bank in Abu Dhabi, U.A.E on the equipment loan
and the forfeiture of the Company's interests in the City Mix and Towers
projects as per the original agreements the Company had entered into to develop
these projects. The book value loss on this transaction is detailed as follows.
.........
Note receivable from Al Ain project $2,000,000
Other note receivable 260,000
City Mix concrete plant 2,450,266
City Mix plant equipment 2,884,385
Ramoil Towers project foundation 531,160
Other asset 2,627
Due to Abu Dhabi branch officer (121,058)
Abu Dhabi equipment loan (882,842)
City Mix investors' advances payable (2,829,214)
---------------
Loss on disposal $4,295,324
===============
The Company's total stockholders' equity decreased to a deficit of $462,166 at
September 30, 2000 from $4,708,994 at December 31, 1999. This decrease is the
result of approximately $9,275,000 of operating losses incurred during the nine
month period ending September 30, 2000, the issuance of 6,750,000 shares of
common stock for consulting services valued at $4,050,000, and the increase in
value of the holdings in Italy of approximately $54,000 as a result of currency
rate changes during the nine months ended September 30, 2000.
During the balance of fiscal year 2000, the Company projects no significant
additional capital expenditures will be needed since its obligations to complete
the various construction projects in Abu Dhabi, United Arab Emirates have
ceased. Management will continues to seek to sell the Ramoil Engineering
subsidiary in Italy and will close its corporate offices in Boca Raton, Florida
as well as seeking bankruptcy protection for RMC.
13
<PAGE>
The following is a description of the Company's capital projects and their
current status:
A. Hotel and Office Complex: Ramoil Towers:
RMC 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.
In 1998, the RMC entered into an agreement with the owner of the land site
whereby RMC 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 RMC will retain title to the assets developed
on this land site during the concession period. At the end of the twenty-year
concession period, RMC 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 RMC 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 $730,000 have been capitalized as of June 30, 2000. RMC's severe
financial and management difficulties have caused this project to be put on hold
indefinitely.
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 RMC, 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, RMC, 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.
14
<PAGE>
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 branch 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 RMC 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, RMC purchased a modular concrete
plant that was shipped to the UAE for assembly. This operations was closed
during the quarter ended September 30, 2000. All Company assets have been sold
to satisfy outstanding debt to banks in Abu Dhabi and remaining assets in the
concrete plant have been forfeited to the Company's UAE sponsor as per the
sponsorship agreement. The failure of the Company to meet its obligations under
the sponsorship agreement has resulted in forfeiture. RMC has suffered
substantial losses over this situation. RMC is in discussions with Registrant in
order to reach a mutually satisfactory agreement with regard to the financial
situation created by this situation.
As of September 30, 2000 $7,544,977 was invested towards the construction and
assembly of this plant detailed as follows:
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
========
$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.
15
<PAGE>
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 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. The status of this project is on hold indefinately until the
restructuring and reorganization of the Registrant.
New and Further Developments
In its effort to secure financing, management has secured a letter of commitment
to fund the pending projects. The letter was received on August 1, 2000. The
investing group has demanded that they remain undisclosed until the matter is
closed. The investment group has shown a high interest in the Company's projects
and are looking at its long term prospects. When and if the transaction is
closed, the investor group has suggested re-organizing the management and
creating and filling at least two new positions, that of Chief Operating Officer
and Chief Financial Officer. They have also suggested expanding and
reconstituting the Board of Directors. Current management is working diligently
to close this transaction. The investing group withdrew its offer and Management
had to deal with the subsequent losses to the Registrant.
Additionally, management was shocked and appalled at the actions of Carib
Securities, Ltd., a Turks and Caicos Corporations, and its affiliate consulting
companies D.O.C. Consulting, Ltd, Shropshire Offshore Consulting, Ltd.,
Provident Partners, Ltd., and Fairmont Consulting, Ltd., all Nevis Corporations.
By failing to perform and violating contract provisions, they have breached
agreements entered into in good faith earlier this year by the Registrant.
Management has sent letters canceling all agreements and demanding that the
shares they received in compensation be returned. Shares for the four Nevis
corporations were registered under Form S-8. Registrant is reviewing all
possible legal recourse with counsel.
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In light of the perilous situation confronting the Registrant, Alexander
Taflevich, President of the Registrant and member of the Board of Directors,
took immediate and appropriate action to restore the Registrant and protect its
shareholders.
Radoljob Radulovic resigned as a Director, Chairman and CEO during this quarter.
Zarko Radulovic and William Brown resigned in December their positions as
Directors leaving Alexander Taflevich the sole member of the Board of Directors.
After extensive discussions with, review, and suggestions from individuals who
would become the newly constituted Board of Directors and management, a plan was
implemented to restructure the Registrant and develop acquisitions that comport
with corporate name of Ramoil Management, Ltd. Acquisitions that will
immediately be acted upon are companies in oil, gas, energy, and power systems
integration and implementing technologies.
Three new Directors have been duly appointed to the Board of Directors, namely
Rita M. Lavelle, George Shaw, and Steve Cummins. All three have accepted their
appointments with Mr. Cummins' condition that the Registrant purchase Directors
and Officers Insurance (DNO) within thirty (30) days.
Rita M. Lavelle, is the President of NuTech Enterprises, Inc., Western Minerals,
Inc., and Waste Cycle, Inc. She is, among other things, the former Administrator
of Hazardous Waste for the U.S. EPA. Western Minerals, Inc. based in Oceanside,
California is currently negotiating with the Registrant in order to reach an
agreement of merger and acquisition, wherein Waste Minerals, Inc. would become a
subsidiary of the Registrant.
George Shaw, is the President of Energas Resources, Inc. (symbol EEG,V), a
company in the energy power business sector. The company owns oil and gas wells
in the Powder River Basin and has recently acquired a small public utility
called First Natural Gas, Inc. First Natural Gas, Inc. is implementing a project
to provide micro power, co-generation, electricity to the existing grid.
Registrant has commenced negotiations to acquire at least 51% of Energas
Resources, Inc.
Steve Cummins is with S.D.C. & Associates a business, finance, restructuring
firm with offices in New York, Georgia, and West Virginia. One of Mr. Cummins
projects relates to Columbus Research Technology, a research and development
business based in Columbus, Georgia dealing in the energy and power business
segment.
The newly constituted Board of Directors has elected Rita M. Lavelle, Chairwoman
and George Shaw Vice Chairman. The Board retained Alexander Taflevich as
President and appointed Rita M. Lavelle as Chief Operating Officer and Gary
Walters as Chief Executive Officer.
The Board has requested that the CEO develop and provide a restructuring plan
for the benefit of the Registrant and the shareholders. Gary Walters, as CEO,
plans to develop a MBO (management by objective) corporate and operating
structure.
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The Registrant has retained the law firm of Ronald J. Stauber of California as
general securities counsel.
The foregoing summarizes the business opportunities of the Registrant. However,
it must be remembered that the foregoing projects each require a significant
capital commitment by the Registrant. Further, in some cases, the Registrant
will need to provide specific funds within restrictive time periods or suffer a
loss of any previous investment made in any project. At present, it seems highly
unlikely that the Registrant 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 Registrant will lose the related opportunities.
Further, it is possible that Registrant's failure to meet its commitments under
the foregoing projects will cause the interested individuals and entities
terminate their relationship 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, shortly RME will no longer be affiliated
with the Registrant and therefore the Registrant must look to the future
opportunities stated above. In terms of the future growth of the Registrant's
operations, great emphasis has been placed on the future success of the
Registrant's opportunities brought by the newly constituted Board of Directors
and the remaining projects in the Middle East. Should any of the prospective
restructuring and reorganization fail the future of the Registrant is dismal.
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.
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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 RMC 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 RMC intends to vigorously defend
against the claims being made. Currently, the RMC 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. Mr. Radulovic resigned all his positions with the
Registrant during this quarter.
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. Mr. Radulovic resigned all his positions with the Registrant
during this quarter.
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D. In April 2000, Registrant was unfairly forced into settlement with American
Pastime Holdings, Inc. in regard to a illegitimate dispute between American
Pastime Holdings,Inc. and Registrant's subsidiaries and associates.
The Registrant knows of no other litigation pending, threatened or contemplated,
or unsatisfied judgements against it or its subsidiaries. The Registrant knows
of no legal action pending or threatened or judgements entered against any
officers or directors of the Registrant or its subsidiaries 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 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 consulting companies were issued 4,320,000 dividend shares. Thus the total
issued to the consulting companies was 5,400,000. The Registrant has demanded
that these shares be returned based upon the breaches by all four (4) consulting
companies. The new Board is discussing possible remedies available to the
Registrant with Securities Counsel.
In April 2000 a total of 2,821,500 restricted shares of common stock were issued
to satisfy a subscription agreement entered into by management on or about
October 15, 1999. The subscription agreement was for 564,300 pre-split shares.
Since the shares were earned and fully paid October 15, 1999, prior to the
record date for the dividend, their owner was issued 2,257,200 dividend shares.
On or about April 14, 2000 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. This issuance is being reviewed by the new Board and Securities
Counsel.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
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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.
On August 29, 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 $0.125 per
share and there were approximately 18 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
There have been no reports filed on Form 8-K from January 1, 2000 to September
30, 2000.
The following exhibits are filed as part of this report.
23.1 Consent of Brian Donahue, CPA
27.1 Financial Data Schedule
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, in Las Vegas, State of Nevada, on
December 14, 2000.
RAMOIL MANAGEMENT, LTD.
By /s/ Gary Walters
--------------------------------
Gary Walters, Chief Executive Officer
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