<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-QSB
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[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934; For the Quarterly Period Ended: June 30, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number: 0-25496
RAM-Z ENTERPRISES, INC.
(Exact name of Registrant as specified in its charter)
Delaware 87-0400335
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
5444 Westheimer, Suite 2080
Houston, Texas 77056
(Address of principal executive offices, including zip code)
(713) 622-1893
(Registrant's telephone number, including area code)
155 East 34th Street, Apt. 10A
New York, New York 10016
(Former Address, if changed from Last Report)
Check whether the issuer (1) has filed all reports required to be filed
by section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
At October 25, 1996, 6,584,175 shares of common stock, $.01 par value,
were outstanding.
Transitional Small Business Disclosure Format (check one):
Yes [ ] No [X]
<PAGE> 2
RAM-Z ENTERPRISES, INC.
CONTENTS
PART I - FINANCIAL INFORMATION
- ------------------------------
Item 1. Financial Statements
Independent Auditor's Report
Consolidated Balance Sheet as of September 30, 1996 (Unaudited)
Consolidated Statements of Operations for the
first quarter ended September 30, 1996 (unaudited)
Consolidated Statements of Cash Flows for the
first quarter ended September 30, 1996 (unaudited)
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
PART II - OTHER INFORMATION
- ---------------------------
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
- ----------
<PAGE> 3
RAM-Z ENTERPRISES, INC.
Interim Financial Statements
September 30, 1996
November 13, 1996
<PAGE> 4
INDEPENDENT ACCOUNTANT'S REPORT
November 13, 1996
To the Board of Directors
RAM-Z Enterprises, Inc.
Houston, Texas
I have reviewed the accompanying consolidated balance sheet of RAM-Z
Enterprises, Inc. as of September 30, 1996, and the related statements of
income, stockholders' equity and cash flows for the three month periods ended
September 30, 1996 and 1995. These financial statements are the responsibility
of the Corporation's management.
I conducted my review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and of making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, I do not express such an opinion.
Based on our review, I am not aware of any material modifications that should
be made to such consolidated financial statements for them to be in conformity
with generally accepted accounting principles.
Jack Evans, CPA
November 13, 1996
<PAGE> 5
RAM-Z ENTERPRISES, INC.
Balance Sheet
September 30, 1996
<TABLE>
<S> <C>
ASSETS
CURRENT ASSETS
Cash $ 74,875
Accounts Receivable 829,076
Other Current Assets 40,142
------------
Total Current Assets 944,093
------------
EQUIPMENT
Computer equipment 303,611
Furniture and fixtures 69,289
Vehicles 126,266
Leasehold Improvements 12,872
------------
512,038
Less accumulated depreciation (281,144)
------------
230,894
OTHER ASSETS, net of amortization of $2,913 71,666
------------
TOTAL ASSETS $ 1,246,653
============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of notes payable $ 35,354
Bank credit line 149,000
Short term note payable 30,000
Note payable - related party 40,484
Accounts payable 273,664
Accrued expenses 123,841
Deferred revenue 76,373
Deferred federal income tax 50,616
------------
TOTAL CURRENT LIABILITIES 779,332
------------
LONG-TERM DEBT 135,619
STOCKHOLDERS' EQUITY
Common stock 6,324
Paid-in capital 171,622
Retained earnings 153,756
------------
TOTAL STOCKHOLDERS' EQUITY 331,702
------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,246,653
============
</TABLE>
See accountant's report and notes to financial statements.
<PAGE> 6
RAM-Z ENTERPRISES, INC.
Consolidated Income Statements
<TABLE>
<CAPTION>
3 months ended September 30
1996 1995
--------------- ----------------
<S> <C> <C>
REVENUES
Placements $ 978,825 $ 910,962
Sales of hardware/software 405,610 370,078
Graphic design and drafting services 186,585 72
--------------- ----------------
1,571,020 1,281,112
--------------- ----------------
COST OF SALES
Placements 841,512 833,882
Sales of hardware/software 354,805 45,166
Graphic design and drafting services 172,196 291,982
--------------- ----------------
1,368,513 1,171,030
GROSS MARGIN 202,507 110,082
--------------- ----------------
Selling 26,475 11,391
General and administrative 222,113 116,996
Interest 7,521 3,052
Depreciation and amortization 26,911 9,985
--------------- ----------------
TOTAL EXPENSES 283,020 141,424
Net Income (loss) (80,513) (31,342)
Other Income 550
--------------- ----------------
Net income <loss> before income taxes (79,963) (31,342)
INCOME TAXES <RECOVERY> (19,991)
--------------- ----------------
NET INCOME (LOSS) $ (59,972) $ (31,342)
=============== ================
NET LOSS PER COMMON SHARE $ (0.01) - n/a -
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 6,284,667 - n/a -
</TABLE>
See accountant's report and notes to financial statements.
<PAGE> 7
RAM-Z ENTERPRISES, INC.
Consolidated Statement of Cash Flows
<TABLE>
<CAPTION>
3 months ended September 30
1996 1995
--------------- ----------------
<S> <C> <C>
Cash Flows From Operating Activities
Net income (loss) $ (59,972) $ (31,342)
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 26,911 9,985
Common stock issued for services 29,900
Changes in:
Accounts receivable (86,211) (136,854)
Other current assets (8,060) 30,560
Accounts payable (74,743) 131,674
Accrued expenses 34,572 16,614
Deferred revenue 76,373 (34,450)
Deferred income taxes (19,991)
--------------- ----------------
Cash Provided from (Used for) Operating Activities (81,221) (13,813)
--------------- ----------------
Cash Flows From Investing Activities
Organizational costs incurred (58,251)
Increase in other assets (1,599)
Purchase of office/computer equipment (5,736) (2,421)
Purchase of vehicles (84,173) (15,000)
--------------- ----------------
Cash Provided from (Used for) Investing Activities (149,759) (17,421)
--------------- ----------------
Cash Flows From Financing Activities
Sale of common stock 38,000
Net increase under line of credit 4,000 20,000
Net increase of short-term notes payable 30,000
Net increase of short-term notes payable to related party 40,484
Net increase in long-term debt 84,173
Payments on installment debt (44,264) (7,532)
--------------- ----------------
Cash Flows from Financing Activities 152,393 12,468
--------------- ----------------
Net Increase (Decrease) in Cash (78,587) (18,766)
Cash at Beginning of Period 153,462 75,160
--------------- ----------------
Cash at end of period $ 74,875 $ 56,394
=============== ================
EXPENSES PAID IN CASH
Interest $ 7,521 $ 3,052
</TABLE>
See accountant's report and notes to financial statements.
<PAGE> 8
RAM-Z ENTERPRISES, INC.
Consolidated Statements of Stockholders' Equity
3 Months Ended September 30, 1996 and 1995
<TABLE>
<CAPTION>
-- Common Stock - - Paid-In Retained
Shares Amount Capital (Deficit) Totals
------------ ------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
AS RESTATED
Balances, June 30, 1995 9,500 $ 9,500 $ 546 $ 225,948 $ 235,994)
Net (loss) (31,342) (31,342)
----------- -------- ------------ --------- ---------
Balances, September 30, 1995 9,500 $ 9,500 $ 546 $ 194,606 $(204,652)
=========== ======== ============= ========= =========
Balances, June 30, 1996 50,000,000 50,000 $ 108,503 $(166,244) $ (7,741)
Current period expenses incurred
before reverse merger (70,000) (70,000)
Reverse merger - reverse split less
Shares retained by original "shell"
shareholders (49,520,000) (49,520) (108,983) 236,244 77,741
Issuance of stock for purchase of
Houston Creative Connections, Inc. 1,851,000 1,851 149 216,589 218,589
MicroData Systems, Inc. 604,000 604 7,442 (2,861) 5,185
Common stock issued for cash 259,000 259 137,741 138,000
Common stock issued for services 3,130,000 3,130 26,770 29,900
Net (loss) (59,972) (59,972)
----------- -------- ------------ --------- ---------
Balances, June 30, 1996 6,324,000 $ 6,324 $ 171,622 $ 153,756 $ 331,702
=========== ======== ============ ========= =========
</TABLE>
See accountant's report and notes to financial statements.
<PAGE> 9
RAM-Z ENTERPRISES, INC.
NOTES TO FINANCIAL STATEMENTS
3 Months Ended September 30, 1996
1. The unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles
for interim financial information. The financial statements contained
herein should be read in conjunction with the audited financial
statements of the 3 acquired subsidiaries and the audited pro forma
consolidated balance sheet and income statement filed with the
Company's Form 8-K in early November, 1996. Accordingly, footnote
disclosure which would substantially duplicate the disclosure in the
audited consolidated financial statements has been omitted.
2. In June, 1996, a subsidiary of the Company sold 200,000 shares of
stock at $.50 per share, netting this subsidiary $100,000. In early
August, 1996, prior to the merger, this same subsidiary of the Company
sold another 25,000 shares of stock, netting the Company $12,500. All
225,000 such shares were exchanged on August 26, 1996 for an equal
number of "post-split" shares of the Company in the reverse merger.
During the 3 months ended September 30, 1996, but subsequent to the
merger dated August 26, 1996, the Company granted 300,000 warrants to
purchase common stock as finder's fee compensation for assisting with
the acquisitions which occurred August 26, 1996, at prices ranging
from $.75 to $1.25 per share. Also during this period, warrants for
34,000 shares were exercised, netting the Company $25,500.
Options for 9,600 shares at $1.25 were issued to an officer of the
Company for services rendered during July and August, 1996.
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Required background information of the Company and its newly-acquired
subsidiaries have been included in the Form 8-K filed early November, 1996.
Background and descriptive information included therein has not been repeated
here.
LIQUIDITY. The Company had a $150,000 credit line with a local bank which has
been increased October, 1996, to $300,000.
CAPITAL RESOURCES. The Company is continuing to raise small amounts of capital
through exercise of previously-issued warrants for common stock. In addition,
the Company plans to raise substantial additional cash for more acquisitions
and an Internet equipment sales financing credit line through a public stock
offering planned in early 1997.
RESULTS OF OPERATIONS. Sales were increased $290,000 or 23% from the quarter
ended September 30, 1995 to the same quarter ending 1996, because the Houston,
Texas area economy is strong in the two main areas of current Company sales:
computer-related outsourcing and computer equipment sales. Both operating
subsidiaries are expanding similarly to their competitors in expanding
marketplaces.
$187,000 of such sales increase is due to the introduction of graphic design
and drafting services, beginning with the quarter ending September 30, 1995.
PROSPECTIVE INFORMATION. The Company plans significant additional acquisitions
to be announced soon. Such acquisitions will substantially increase operating
revenues.
<PAGE> 11
PART II
OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(b) REPORTS ON FORM 8-K
(1) On August 26, 1996, the Company filed a current report on Form
8-K regarding: changes in control of the Company; the acquisition
of HyperDynamics Corporation and its subsidiaries; changes in the
Company's certifying accountant; the resignation of directors and
executive officers and the appointment of new directors and
officers, change in fiscal year to that of the accounting
acquirer's fiscal year; and other events.
(2) On November 8, 1996, the Company filed Amendment 1 to Form 8-K.
Amendment 1 consisted of financial statements for Ram-Z
Enterprises, Inc., HyperDynamics Corporation, Houston Creative
Connections, Inc., and Micro Data Systems, Inc. as of June 30,
1996.
(3) On November 11, 1996, the Company filed Amendment 2 to Form 8-K,
which superceded Amendment 1 as filed on November 8, 1996.
Amendment 2 consisted of amended financial statements for RAM-Z
Enterprises, Inc., HyperDynamics Corporation, Houston Creative
Connections, Inc., and Micro Data Systems, Inc. as of June 30,
1996.
Exhibit 27 Financial Data Schedule
<PAGE> 12
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 hereunto duly authorized.
RAM-Z ENTERPRISES, INC.
Date: August 13, 1996 By: /s/ GREG J. MICEK
________________________________
Greg J. Micek
President
By: /S/ LEWIS E. BALL
________________________________
Lewis E. Ball
Chief Financial Officer
<PAGE> 13
INDEX TO EXHIBITS
Exhibits Description
- -------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
OF FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996 AND QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 74,875
<SECURITIES> 0
<RECEIVABLES> 829,076
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 944,093
<PP&E> 512,038
<DEPRECIATION> 291,144
<TOTAL-ASSETS> 1,246,653
<CURRENT-LIABILITIES> 779,332
<BONDS> 0
0
0
<COMMON> 6,324
<OTHER-SE> 325,478
<TOTAL-LIABILITY-AND-EQUITY> 1,246,653
<SALES> 1,571,020
<TOTAL-REVENUES> 1,571,020
<CGS> 1,368,513
<TOTAL-COSTS> 1,368,513
<OTHER-EXPENSES> 275,499
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,521
<INCOME-PRETAX> (79,963)
<INCOME-TAX> (19,991)
<INCOME-CONTINUING> (59,972)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (59,972)
<EPS-PRIMARY> 0.01
<EPS-DILUTED> 0.01
</TABLE>
