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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


Form 10-K



[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the fiscal year ended September 30, 2011


[  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934



Commission file number 000-17750


RECEIVABLE ACQUISITION & MANAGEMENT CORPORATION

(Name of Small Business Issuer in its Charter)


Delaware

 

13-3186327

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

2 Executive Drive, Suite 630

 

 

Fort Lee, New Jersey

 

07024

(Address of principal Executive Offices)

 

(Zip Code)


201-633-4715

(Registrant’s telephone number, including area code)


Securities registered pursuant to Section 12(b) of the Act:  None


Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.001 Par Value Per Share


Indicate by check mark whether the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act.  Yes [  ]     No [X]


Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes [  ]     No [X]


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 [  ]


Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  [  ]




 




Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.   (Check one):


Large accelerated filer [  ]               Accelerated filer [  ]             Non-accelerated filer [  ]


Smaller reporting company [X]


Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act) Yes [  ]     No [X]


The number of shares outstanding of each of the Registrant’s classes of common stock, as of December 30, 2011 is 17,948,896 shares, all of one class, $.001 par value per share.  Of this number, 9,231,962 shares were held by non-affiliates of the Registrant.


The Company’s common stock has been trading on the OTCBB since October 2004 and, accordingly, the aggregate “market value” of such shares is approximately $100,000.  The “value” of the 9,231,962 shares held by non-affiliates, based upon the book value as of September 30, 2011 is less than $0. 03 per share.


*Affiliates for the purpose of this item refers to the Registrant’s officers and directors and/or any persons or firms (excluding those brokerage firms and/or clearing houses and/or depository companies holding Registrant’s securities as record holders only for their respective clienteles’ beneficial interest) owning 5% or more of the Registrant’s common stock, both of record and beneficially.

 

 

DOCUMENTS INCORPORATED BY REFERENCE - None
















2





TABLE OF CONTENTS


 

Page

 

 

Statement Regarding Forward-Looking Statements

2

 

 

PART I

3

 

 

Item 1. Business

3

 

 

Item 1A. Risk Factors

4

 

 

Item 1B. Unresolved Staff Comments=7

 

 

 

Item 2. Properties

7

 

 

Item 3. Legal Proceedings

7

 

 

Item 4. Submission of Matters to a Vote of Security Holders

7

 

 

PART II

8

 

 

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and and Issuer Purchases of Equity Securities

8

 

 

Item 6. Selected Financial Data

9

 

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

10

 

 

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

12

 

 

Item 8. Financial Statements and Supplementary Data

13

 

 

Item 8A. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

27

 

 

Item 9A. Controls and Procedures

27

 

 

Item 9B. Other Information

28

 

 

PART III

29

 

 

Item 10. Directors, Officers and Corporate Governance

29

 

 

Item 11. Executive Compensation

30

 

 

Item 12. Equity Compensation Plan Inform and Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matter

31

 

 

Item 13. Certain Relationships and Related Transactions and Director independence

31

 

 

Item 14. Principal Accounting Fees and Services

31

 

 

Item 15. Exhibits and Financial Statement Schedules

33




3





STATEMENT REGARDING FORWARD-LOOKING STATEMENTS


In this annual report, references to "Receivable Acquisition & Management Corporation," "RAMC," "the Company," "we," "us," and "our" refer to Receivable Acquisition & Management Corporation and its wholly owned subsidiary.


Except for the historical information contained herein, some of the statements in this Report contain forward-looking statements that involve risks and uncertainties. These statements are found in the sections entitled "Business," "Management's Discussion and Analysis of Financial Condition and Results of Operation," and "Risk Factors." They include statements concerning: our business strategy; expectations of market and customer response; liquidity and capital expenditures; future sources of revenues; expansion of our proposed product line; and trends in industry activity generally. In some cases, you can identify forward-looking statements by words such as "may," "will," "should," "expect," "plan," "could," "anticipate," "intend," "believe," "estimate," "predict," "potential," "goal," or "continue" or similar terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including, but not limited to, the risks outlined under "Risk Factors," that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. For example, assumptions that could cause actual results to vary materially from future results include, but are not limited to: our ability to successfully develop and market our products to customers; our ability to generate customer demand for our products in our target markets; the development of our target markets and market opportunities; our ability to manufacture suitable products at competitive cost; market pricing for our products and for competing products; the extent of increasing competition; technological developments in our target markets and the development of alternate, competing technologies in them; and sales of shares by existing shareholders. Although we believe that the expectations reflected in the forward looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Unless we are required to do so under federal securities laws or other applicable laws, we do not intend to update or revise any forward-looking statements.

















4




Part I


ITEM 1.  BUSINESS


We are a Delaware corporation whose principal executive offices are located at 2 Executive Drive, Suite 630, Fort Lee, NJ 07024. Unless the context otherwise requires, the terms "we", "us" or "our" as used herein refer to Receivable Acquisition & Management Corporation and our subsidiary.


Overview


Receivable Acquisition & Management Corporation (the “Company”) was in the business of acquiring and collecting portfolios of performing, sub-performing and non-performing consumer and commercial receivables.  


We generally acquired non-performing and sub-performing consumer and commercial receivable portfolios at a significant discount to the amount actually owed by the debtors or insurers. We acquire these portfolios after a qualitative and quantitative analysis of the underlying receivables and establish a purchase price based on expected recovery and our internal rate of return hurdle. After purchasing a portfolio, we outsource collections to carefully selected collection agencies and we actively monitor its performance and review and adjust our collection and servicing strategies accordingly.

  

The recovery process is largely done by collection agencies and law firms. Recovery process is generally handed over to lawyers when it is determined the debtor has the ability to satisfy his/her obligation but normal collection activities have not resulted in resolution.

 

In the event of legal action, we seek attorneys/collection law firms that are located in the state of the debtor. The proximity of the agent to the debtor has a significant influence on the debtors’ actions.

 

We use an internally developed incentive-based fee structure to negotiate the contingency fees of the recovery partners. This is a tiered method of paying the partner an increasing percentage of collections if they meet pre-agreed to hurdles. These hurdles are recovery of our investment plus returns in defined time periods. In most cases, an underestimation of the collection process involves the extension of the collection horizon. For instance, a debtor that is not in a position to immediately settle their obligation at the moment the obligation is purchased, is most likely to be in a position of being able to clear his/her credit in the foreseeable future if they are capable of gainful employment or expects their financial lot to improve. We will not write off these types of debtors but may extend our collection horizon to include the moment in time when collection/settlement is possible. We continuously weigh the benefits of selling the obligations versus holding it in anticipation of settlement. If we can realize an acceptable return within the expected horizon by selling the loan, the Company will do so. In most cases an obligation becomes collectible at a point in time. Periodically, we will evaluate our portfolios to identify accounts with profiles that are inconsistent with our collection strategies. Such accounts can be offered for sale to a network of investors, collection agencies and law firms.

 

For the years ended September 30, 2011 and September 30, 2010, our revenues were approximately $52,572  and $158,851 and our net loss was ($81,812) and ($136,318), respectively. The Company has discontinued making new investments and is seeking to merge with or acquire another company seeking to go public via reverse merger.

 

Industry Overview


The purchasing, servicing and collection of charged-off, sub-performing and performing consumer receivables is an industry that is driven by:


 

·

levels of consumer debt;

 

 

 

 

·

defaults of the underlying receivables; and

 

 

 

 

·

utilization of third-party providers to collect such receivables.

 



5




We believe that as a result of the difficulty in collecting these past due receivables and the desire of originating institutions to focus on their core businesses and to generate revenue from these receivables, originating institutions are increasingly electing to sell these portfolios.  


Strategy


The Company ceased making new investments in charged off consumer credit portfolios since October 2007 and is currently running off existing portfolios and seeking to merge with or acquire companies in the healthcare and information technology industry. The Company entered into a letter of intents to merge with Airbak Technologies LLC and advanced $166,000 as a secured loan. However, the Company has not been able close the merger and filed suit to recover the amount lent to Airbak. The Company continues to remain engaged in the Airbak matter but there is no certainty of concluding a transaction with Airbak. The Company is aggressively looking at additional targets.  

 

Employees


As of September 30, 2011, we had 1 full-time employee.


Item 1A. Risk Factors


You should carefully consider the risks described below as well as other information provided to you in this document, including information in the section of this annual report entitled “Information Regarding Forward Looking Statements.” The risks and uncertainties described below are not the only ones facing us. Additional risks and uncertainties not presently known to us or that we currently believes are immaterial may also impair our business operations. If any of the following risks actually occur, the Company’s businesses, financial condition or results of operations could be materially adversely affected, the value of the common stock could decline, and you may lose all or part of your investment.


The Company has ceased making portfolio purchases since October 2007.


Due to inability to raise capital and deep recession, the Company decided to make new investments and has subsequently been in a run-off mode. The management is focused on merging with or acquiring another operating company that may be seeking to go public via reverse merger. There is no assurance that the management will succeed and as a result, shareholders may be adversely affected.


We may not be able to purchase consumer or commercial receivable portfolios at favorable prices or on sufficiently favorable terms or at all and our success depends upon the continued availability of consumer receivable portfolios that meet our purchasing criteria and our ability to identify and finance the purchases of such portfolios.


Our quarterly operating results may fluctuate and cause our stock price to decline.


Because of the nature of our business, our quarterly operating results may fluctuate, which may adversely affect the market price of our common stock. Our results may fluctuate as a result of any of the following:


 

·

the timing and amount of collections on our consumer receivable portfolios;

 

 

 

 

·

our inability to identify and acquire additional consumer receivable portfolios;

 

 

 

 

·

a decline in the estimated value of our consumer receivable portfolio recoveries;

 

 

 

 

·

increases in operating expenses associated with the growth of our operations; and

 

 

 

 

·

general and economic market conditions.

 

 

 

 

·

Currency fluctuations can have an impact on our recoveries from U.K. portfolios.




6




Failure of our third party recovery partners to adequately perform collection services could materially reduce our revenues and our profitability, if any.


We are dependent upon outside collection agencies to service all our consumer receivable portfolios. Any failure by our third party recovery partners to adequately perform collection services for us or remit such collections to us could materially reduce our revenues and our profitability. In addition, our revenues and profitability could be materially adversely affected if we are not able to secure replacement recovery partners and redirect payments from the debtors to our new recovery partner promptly in the event our agreements with our third-party recovery partners are terminated, our third-party recovery partners fail to adequately perform their obligations or if our relationships with such recovery partners adversely change.


Our collections may decrease if bankruptcy filings increase.

 

During times of economic recession, the amount of defaulted consumer receivables generally increases, which contributes to an increase in the amount of personal bankruptcy filings. Under certain bankruptcy filings, a debtor's assets are sold to repay credit originators, but since the defaulted consumer receivables we purchase are generally unsecured we often would not be able to collect on those receivables. We cannot assure you that our collection experience would not decline with an increase in bankruptcy filings. If our actual collection experience with respect to a defaulted consumer receivables portfolio is significantly lower than we projected when we purchased the portfolio, our earnings could be negatively affected.

 

We may not be able to continue our operations if we are unable to generate funding from third party financing sources


If we are unable to access external sources of financing, we may not be able to fund and grow our operations. The failure to obtain financing and capital as needed would limit our ability to:


 

·

purchase consumer receivable portfolios; and

 

 

 

 

·

achieve our growth plans.

 

The loss of any of our executive officers may adversely affect our operations and our ability to successfully merge with or acquire another company.


Our President and Chief Executive Officer, Max Khan, is responsible for making substantially all management decisions, including determining which portfolios to purchase, the purchase price and other material terms of such portfolio acquisitions. These decisions are instrumental to the success of our business. The loss of Max Khan could disrupt our operations and adversely affect our ability to successfully acquire and service receivable portfolios.

 

Government regulations may limit our ability to recover and enforce the collection of our receivables.


Federal, state and municipal laws, rules, regulations and ordinances may limit our ability to recover and enforce our rights with respect to the receivables acquired by us. These laws include, but are not limited to, the following federal statutes and regulations promulgated thereunder and comparable statutes in states where consumers reside and/or where creditors are located:

 

 

·

the Fair Debt Collection Practices Act;

 

 

 

 

·

the Federal Trade Commission Act;

 

 

 

 

·

the Truth-In-Lending Act;

 

 

 

 

·

the Fair Credit Billing Act;

 

 

 

 

·

the Equal Credit Opportunity Act; and

 

 

 

 

·

the Fair Credit Reporting Act.




7




Additional laws may be enacted that could impose additional restrictions on the servicing and collection of receivables. Such new laws may adversely affect the ability to collect the receivables.


Because the receivables were originated and serviced pursuant to a variety of federal and/or state laws by a variety of entities and involved consumers in all 50 states, the District of Columbia and Puerto Rico, there can be no assurance that all original servicing entities have at all times been in substantial compliance with applicable law. Additionally, there can be no assurance that we or our recovery partners have been or will continue to be at all times in Substantial compliance with applicable law. The failure to comply with applicable law could materially adversely affect our ability to collect our receivables and could subject us to increased costs and fines and penalties. In addition, our third-party recovery partners may be subject to these and other laws and their failure to comply with such laws could also materially adversely affect our revenues and earnings.

 

The Company is also subject to various debt collection and privacy regulations of countries where is operates.


Class action suits and other litigation in our industry could divert our management's attention from operating our business and increase our expenses.


Certain originators and recovery partners in the consumer credit industry have been subject to class actions and other litigation. Claims include failure to comply with applicable laws and regulations and improper or deceptive origination and servicing practices. If we become a party to such class action suits or other litigation, our results of operations and financial condition could be materially adversely affected.


If a significant portion of our shares available for resale are sold in the public market, the market value of our common stock could be adversely affected.


Sales of a substantial number of shares of our common stock in the public market could cause a decrease in the market price of our common stock. We had approximately 17,748,896 shares of common stock issued and outstanding as of the date hereof.  We may also issue additional shares in connection with our business and may grant additional stock options to our employees, officers, directors and consultants under our stock option plans or warrants to third parties.  


Our common stock will be subject to the “Penny Stock” rules of the SEC.

 

The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a "penny stock," for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:


 

·

that a broker or dealer approve a person's account for transactions in penny stocks; and

 

·

the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

  

In order to approve a person's account for transactions in penny stocks, the broker or dealer must:


 

·

obtain financial information and investment experience objectives of the person; and

 

·

make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.


The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the Commission relating to the penny stock market, which, in highlight form:


 

·

sets forth the basis on which the broker or dealer made the suitability determination; and

 

·

that the broker or dealer received a signed, written agreement from the investor prior to the transaction.


Generally, brokers may be less willing to execute transactions in securities subject to the "penny stock" rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.



8





Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.


ITEM 1B. UNRESOLVED STAFF COMMENTS


Not applicable.


ITEM 2. PROPERTIES


Our executive and administrative offices are located at 2 Executive Drive, Suite 630, Fort Lee, NJ 07024. We lease our New Jersey facility at approximately $2,000 per month and such lease expires on December 30, 2013.  


ITEM 3. LEGAL PROCEEDINGS


The Company is not a party to any pending legal proceedings or a proceeding being contemplated by a governmental authority nor is any of the Company’s property the subject of any pending legal proceedings or a proceeding being contemplated by a governmental authority except for the following:


On July 28, 2011, the Company filed a complaint with the United States District Court, District of New Jersey against Philip Troy Christ and Airbak Technologies LLC for breach of contract, false representations, and default of certain Promissory Notes issued under a Master Loan Agreement. The Company and an investor introduced by the Company had advanced $266,000 to Airbak under a Secured Master Loan Agreement with the intent of concluding a merger. However, Mr. Philip Troy Christy individually and concurrently entered into merger negotiations with another company and Airbak failed to repay the Promissory Notes that became due. The Company is seeking an amount no less than $266,000 plus accrued interest, cost of litigation and other legal costs incurred while negotiating a merger with Airbak. The outcome of this complaint cannot be determined at this point.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS


None.










9




PART II


ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES


Since October 2004, our common stock, par value $.001 per share, had been quoted on the Nasdaq Bulletin Board under the symbol “RCVA”. Prior to October 2004, there was no market for our common stock. The last reported price as of December 31, 2011 was $0.01 per share.


Quarter Ended

High ($)

Low ($)

March 31, 2010

.19

.02

June 30, 2010

.25

.03

September 30, 2010

.29

.04

December 31, 2010

.42

.02

March 31, 2011

.03

.01

June 30, 2011

.13

.02

September 30, 2011

.06

.03

December 31, 2011

.03

.03

 

Holders


As of December 31, 2011 we had approximately 270 holders of our common stock. The number of record holders was determined from the records of our transfer agent and does not include beneficial owners of common stock whose shares are held in the names of various security brokers, dealers, and registered clearing agencies.


Dividends

 

We have never declared or paid any cash dividends on our common stock. We do not anticipate paying any cash dividends to stockholders in the foreseeable future. In addition, any future determination to pay cash dividends will be at the discretion of the Board of Directors and will be dependent upon our financial condition, results of operations, capital requirements, and such other factors as the Board of Directors deem relevant.


Equity Compensation Plans


As of September 30, 2010, we had the following securities authorized for issuance under the equity compensation plans:


Plan Category

 

Number of Securities to be issued upon exercise of outstanding options, warrants and rights

 

Weighted-average exercise price of outstanding options, warrants and rights

 

Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)

 

 

 

 

 

 

 

Equity compensation plans approved by security holders

 

 

2,500,000

 

$

0.01

 

 

__

Equity compensation plans not approved by security holders

 

 

-

 

 

-

 

 

-

Total

 

 

2,500,000

 

$

0.01

 

 

__




10




ITEM 6.  SELECTED FINANCIAL DATA


The following selected consolidated financial data should be read in conjunction with our consolidated financial statements and related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. The statements of operations data for the years ended September 30, 2011 and 2010 are derived from our audited financial statements which are included elsewhere in this Form 10-K.  The historical results are not necessarily indicative of results to be expected for future periods.

  

Consolidated Statements of Operations Data:


 

For the Year Ended September 30, 2011 & 2010

 

2011

2010

 

 

 

Revenue

$ 52,572

$ 158,851

Gross profit (loss)

 

$ (75,377)

Selling, general and administrative

$ 134,582

$ 234,228

Total operating expenses

$ 134,582

$ 234,228

Income (loss) from operations

$ 82,010

$ (136,678)

Other (expense) income, net

$ 198

$  (60,941)

Net income (loss)

$ (81,812)

$ (136,318)

 

 

 

Basic  income (loss) per share

$ (0.00)

$ ( 0.01)

Diluted income (loss) per share

$ (0.00)

$ ( 0.01)

 

 

 

Shares used in calculation of loss per share

17,815,614

16,075,499


Consolidated Balance Sheet Data:



 

For the Year Ended September 30, 2011 & 2010

 

2011

2010

Cash and cash equivalents

$                178,318

$                186,401

Working Capital

$                136,673

$                163,843

Total assets

$                344,615

$                243,742

Long-term obligations

--

--

Total Stockholder’s equity

$                137,544

$                202,261






11




ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION


Introduction


The following discussion should be read in conjunction with the Financial Statements and Notes thereto. Our fiscal year ends September 30. This document contains certain forward-looking statements including, among others, anticipated trends in our financial condition and results of operations and our business strategy. (See Part I, Item 1A, "Risk Factors"). These forward-looking statements are based largely on our current expectations and are subject to a number of risks and uncertainties. Actual results could differ materially from these forward-looking statements. Important factors to consider in evaluating such forward-looking statements include (i) changes in external factors or in our internal budgeting process which might impact trends in our results of operations; (ii) unanticipated working capital or other cash requirements; (iii) changes in our business strategy or an inability to execute our strategy due to unanticipated changes in the industries in which we operate; and (iv) various competitive market factors that may prevent us from competing successfully in the marketplace.


Results of Operations

 

Year Ended September 30, 2011 Compared to Year Ended September 30, 2010.

 

Revenues

 

Total revenue for the twelve months ended September 30, 2011 declined by approximately $106,279 to $52,572 from $158,851 from $246,558 for the year ended September 30, 2010.  The Company had a net loss of ($81,812) for the year ended September 30, 2011 versus net loss of ($136,318) for the year ended September 30, 2010.   


For the twelve months ended September 30, 2011 and September 30, 2010, the Company did not invest in any portfolio. The Company has stopped purchasing portfolios after October 2007 due to the inability to raise additional capital. The face value represents the outstanding balance owed by debtors at the time of purchase and the Company expects to collect only a small percentage of the outstanding balance.    

 

During the year ended September 30, 2010, we serviced a pool of charged-off consumer accounts on behalf of Ramco Income Fund Limited and from another investment vehicle. Servicing fees received under this arrangement declined by approximately 92% to $1,060 from $13,742 in the year ended September 30, 2010. The Fund was fully redeemed on December 13, 2010 and as a result, the Company no longer receives any servicing income.

 

Total operating expenses

 

Total operating expenses in the year ended September 30, 2011 declined by approximately 42% or $99,646 to $134,582 compared to $234,228 for the year ended September 30, 2010. The Company expects the overall expenses to decline further going forward.

  

Other income and expense


For the year ended September 30, 2011, the Company had interest income of $198 compared to interest income of $360 and other losses of ($61,301) for the year ended September 30, 2010. The Company has no other contingent expense.

 

Income taxes

 

For the years ended September 30, 2011 and 2010, the Company has not recorded any income tax liability.


Net Income (loss)


Net loss for the twelve months ended September 30, 2011 was ($81,812) versus ($136,318) for the twelve months ended September 30, 2010.  



12




Liquidity and Capital Resources

 

Liquidity

 

For the year ended September 30, 2011 the Company had working capital of $136,679 versus $163,834 versus for the year ended September 30, 2010. Working capital for year ended September 30, 2011 declined by approximately 17% or $27,164 from $163,843 for the year ended September 30, 2010. The decline was largely due to declining collections. At the year ended September 30, 2011, the Company had $178,318 in cash and is not able to generate sufficient cash to fund operations for the foreseeable future.  The Company is seeking to merger with another company seeking to go public but timing and type of company cannot be ascertained at this time.

 

Cash Flows and Expenditures

 

Year ended September 30, 2011 compared to September 30, 2010

 

During the years ended September 30, 2011 and 2010, the Company had finance income of $51,512 and $145,109, respectively.

 

During the year ended September 30, 2011 we generated $1,060 in servicing income compared to $13,742 in servicing income in the year ended September 30, 2010.  

 

We currently utilize various business channels for the collection of charged off credit cards and other receivables. The Company is currently using four (4) collection agencies.

 

Cash used from operations was ($22,960) during the year ended September 30, 2011 versus cash used of ($30,292) during the year ended September 30, 2010.


Net cash (used) from financing activities was $14,877 and $20,250 during the years ended September 30, 2011 and 2010 respectively.


Capital Resources


The cash flow from portfolios currently owned would be not be adequate to meet our operating expenses for the foreseeable future.

 

Inflation


We believe that inflation has not had a material impact on our results of operations for the year ended September 30, 2011.


Critical Accounting Policies


The Company utilizes the interest method under guidance provided by the Financial Accounting Standards Board Accounting Standards Certification (“ASC”) 310-30 to determine income recognized on finance receivables.

 

In October 2003, ASC 310-30, “Accounting for Loans or Certain Securities Acquired in a Transfer” was issued. This ASC proposes guidance on accounting for differences between contractual and expected cash flows from an investor’s initial investment in loans or debt securities acquired in a transfer if those differences are attributable, at least in part, to credit quality. This ASC is effective for loans acquired in fiscal years beginning after December 15, 2004. The ASC would limit the revenue that may be accrued to the excess of the estimate of expected future cash flows over a portfolio’s initial cost of accounts receivable acquired. The ASC would require that the excess of the contractual cash flows over expected cash flows not be recognized as an adjustment of revenue, expense, or on the balance sheet. The ASC would freeze the internal rate of return, referred to as IRR, originally estimated when the accounts receivable are purchased for subsequent impairment testing. Rather than lower the estimated IRR if the original collection estimates are not received, the carrying value of a portfolio would be written down to maintain the original IRR. Increases in expected future cash flows would be recognized prospectively through adjustment of the IRR over a portfolio’s remaining life. The ASC provides that previously issued annual financial statements would not need to be restated. Management is in the process of evaluating the application of this ASC. In



13




accordance with ASC 310-30, the Company is currently is using the cost recovery method for revenue recognition for all its current portfolios.

 

Special Note on Forward-Looking Statements

 

This report contains “forward-looking statements” within the meaning of the federal securities laws. All statements, other than statements of historical facts, included or incorporated into this Form 10-K are forward-looking statements. The words “believe,” “expect,” “anticipate,” “estimate,” “project,” and similar expressions often characterize forward looking statements. These statements may include, but are not limited to, projections of collections, revenues, income or loss, estimates of capital expenditures, plans for future operations, products or services, and financing needs or plans, as well as assumptions relating to these matters. These statements include, among others, statements found under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business.”

 

Actual results could differ materially from those contained in the forward-looking statements due to a number of factors, some of which are beyond our control. Factors that could affect our results and cause them to differ from those contained in the forward-looking statements include:

 

 

·

the availability of financing;

 

·

our ability to maintain sufficient liquidity to operate our business including obtaining new capital to enable us to purchase new receivables;


 

·

our ability to purchase receivable portfolios on acceptable terms;

 

·

our continued servicing of the receivables in our securitization transactions and for the unrelated third party;


 

·

our ability to recover sufficient amounts on receivables to fund operations;

 

·

our ability to hire and retain qualified personnel to recover our receivables efficiently;


 

·

changes in, or failure to comply with, government regulations; and

 

·

the costs, uncertainties and other effects of legal and administrative proceedings.


ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


Market rate risk


We are exposed to market risk related to changes in interest rates and foreign currency exchanges rates.


Interest rate risk


We hold our assets in cash and cash equivalents.  We do not hold derivative financial instruments or equity securities.


Foreign currency exchange rate risk


Our revenue and expenses are denominated in U.S. dollars.  We currently own one portfolio in United Kingdom; we do not anticipate that foreign exchange gains or losses will be significant.  We have not engaged in foreign currency hedging to date.


 




14





ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA





RECEIVABLE ACQUISITION AND MANAGEMENT CORPORATION AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED SEPTEMBER 30, 2011 AND 2010





 

PAGE(S)

 

 

FINANCIAL STATEMENTS:

 

 

 

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

16

 

 

Consolidated Balance Sheets as of September 30, 2011 and 2010

17

 

 

Consolidated Statements of Operations for the Years Ended September 30, 2011 and 2010

18

 

 

Consolidated Statements of Stockholders’ Equity as of September 30, 2011

19

 

 

Consolidated Statements of Cash Flows for the Years Ended September 30, 2011 and 2010

20

 

 

Notes to Consolidated Financial Statements

21-26


















15





Silberstein Ungar, PLLC CPAs and Business Advisors

Phone (248) 203-0080

Fax (248) 281-0940

30600 Telegraph Road, Suite 2175

Bingham Farms, MI 48025-4586

www.sucpas.com


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors

Receivable Acquisition and Management Corporation

Fort Lee, New Jersey


We have audited the accompanying balance sheet Receivable Acquisition and Management Corporation as of September 30, 2011, and the related statements of operations, stockholders’ equity, and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.  The financial statements of Receivable Acquisition and Management Corporation as of and for the year ended September 30, 2010 were audited by other auditors whose report dated January 12, 2011.


We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.  Accordingly, we express no such opinion.  An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audit provides a reasonable basis for our opinion.


In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Receivable Acquisition and Management Corporation, as of September 30, 2011 and the results of its operations and cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States.


The accompanying financial statements have been prepared assuming that Pacific Gold Corp. will continue as a going concern.  As discussed in Note 14 to the financial statements, the Company has incurred losses from operations, has negative working capital and is in need of additional capital to grow its operations so that it can become profitable.  These factors raise substantial doubt about the Company’s ability to continue as a going concern.  Management’s plans with regard to these matters are described in Note 14. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.


/s/ Silberstein Ungar, PLLC

Silberstein Ungar, PLLC


Bingham Farms, Michigan

January 13, 2012





16





RECEIVABLE ACQUISITION AND MANAGEMENT CORPORATION AND SUBSIDIARIES

 CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 2011 AND 2010


ASSETS

 

 

 

 

 

2011

 

2010

 

 

 

 

CURRENT ASSETS

 

 

 

  Cash

$     178,318

 

$     186,401

  Notes receivable

165,000

 

-

  Finance receivables - short term

432

 

18,923

 

 

 

 

Total current assets

343,750

 

205,324

 

 

 

 

OTHER ASSETS

 

 

 

  Finance receivables - long-term

865

 

38,418

 

 

 

 

Total other assets

865

 

38,418

 

 

 

 

TOTAL ASSETS

$     344,615

 

$     243,742

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

CURRENT LIABILITIES

 

 

 

  Accrued and other expenses

$       34,289

 

$      41,481

  Officer loan

2,782

 

-

  Notes payable

170,000

 

-

 

 

 

 

Total current liabilities

207,071

 

41,481

 

 

 

 

COMMITMENT & CONTINGENCIES

 

 

 

 

 

 

 

STOCKHOLDERS'  EQUITY

 

 

 

  Preferred stock, par value $10 per share;

 

 

 

    10,000,000 shares authorized in 2010 and 2009 and 0 shares

 

 

 

    issued and outstanding at September 30, 2011 and 2010, respectively

-

 

-

  Common stock, par value $.001 per share;

 

 

 

    325,000,000 shares authorized in 2010 and 2009

 

 

 

    and 17,948,896 and 16,052,896 shares issued and 16,052,896 shares

 

 

 

    outstanding at September 30, 2011 and 2010, respectively

17,949

 

16,803

  Additional paid-in capital

667,597

 

651,648

  Accumulated deficit

(548,002)

 

(466,190)

 

 

 

 

Total stockholders' equity

137,544

 

202,261

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$     344,615

 

$     243,742


The accompanying notes are an integral part of the consolidated financial statements.



17





RECEIVABLE ACQUISITION AND MANAGEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED SEPTEMBER 30, 2011 AND 2010


 

2011

 

2010

 

 

 

 

 

 

 

 

REVENUES

 

 

 

  Financing income

$           51,512

 

$      145,109

  Service income and other

1,060

 

13,742

       Total revenues

52,572

 

158,851

 

 

 

 

COSTS AND EXPENSES

 

 

 

  Selling, general and administrative

134,582

 

234,228

  Impairment of receivables

-

 

61,301

       Total costs and expenses

134,582

 

295,529

 

 

 

 

INCOME (LOSS) FROM OPERATIONS

(82,010)

 

(136,678)

 

 

 

 

OTHER INCOME (EXPENSES)

 

 

 

  Interest income

198

 

360

       Total other income (expenses)

198

 

360

 

 

 

 

 

 

 

 

NET INCOME (LOSS) APPLICABLE TO COMMON STOCK

$          (81,812)

 

$    (136,318)

 

 

 

 

INCOME (LOSS) PER COMMON SHARE, BASIC AND DILUTED

$             (0.00)

 

$         (0.01)

 

 

 

 

WEIGHTED AVERAGE SHARES OUTSTANDING, BASIC

17,815,614

 

16,075,499






The accompanying notes are an integral part of the consolidated financial statements.




18





RECEIVABLE ACQUISITION AND MANAGEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED SEPTEMBER 30, 2011 AND 2010



 

2011

 

2010

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

  Net income (loss)

$ (81,812)

 

$ (136,318)

 

 

 

 

Adjustments to reconcile net income to net cash

 

 

 

provided by operating activities:

 

 

 

  Issuance of stock

10,000

 

17,582

  Write-down of receivables

-

 

61,301

 

 

 

 

Changes in Operating Assets and Liabilities

 

 

 

  Collections applied to principal on finance receivables

56,044

 

22,521

  Decrease in prepaid expenses

-

 

939

  Increase (decrease) accrued expenses

(7,192)

 

3,683

       Net cash provided by  operating activities

(22,960)

 

(30,292)

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

  Proceeds from exercise of stock options

7,095

 

20,250

  Proceeds (payment) on notes receivable

(165,000)

 

-

  Proceeds (payment) on notes payable

170,000

 

-

  Proceeds from officer loan

2,782

 

 

       Net cash (used in) financing activities

14,877

 

20,250

 

 

 

 

NET (DECREASE) IN CASH

(8,083)

 

(10,042)

 

 

 

 

CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR

186,401

 

196,443

 

 

 

 

CASH AND CASH EQUIVALENTS - END OF YEAR

$178,318

 

$  186,401





The accompanying notes are an integral part of the consolidated financial statements.





19





RECEIVABLE ACQUISITION AND MANAGEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

FOR THE YEARS ENDED SEPTEMBER 30, 2011 AND 2010



 

 

 

Additional

 

 

 

 

 

 

 

Common Stock

 

Paid-In

 

Treasury Stock

 

Accumulated

 

 

 

Shares

 

Amount

 

Capital

 

Shares

 

Amount

 

Deficit

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE, SEPTEMBER 30, 2009

16,052,896

 

$       16,053

 

$      614,566

 

-

 

$              -

 

$    (329,872)

 

$      300,747

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issued 750,000 options  for compensation

 

 

 

 

17,582

 

 

 

 

 

-

 

17,582

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of stock for cash

750,000

 

750

 

19,500

 

-

 

-

 

-

 

20,250

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) for the year ended September 30, 2010

 

 

 

 

 

 

 

 

 

 

(136,318)

 

(136,318)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE, SEPTEMBER 30, 2010

16,802,896

 

$       16,803

 

$      651,648

 

-

 

$              -

 

$    (466,190)

 

$      202,261

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of stock for cash

900,000

 

900

 

5,850

 

 

 

 

 

 

 

6,750

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of stock for cash

46,000

 

46

 

299

 

 

 

 

 

 

 

345

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issued 200,000 shares for board compensation

200,000

 

200

 

9,800

 

 

 

 

 

 

 

10,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) for the year ended September 30, 2011

 

 

 

 

 

 

 

 

 

 

(81,812)

 

(81,812)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE, SEPTEMBER 30, 2010

17,948,896

 

$       17,949

 

$      667,597

 

-

 

$              -

 

$    (548,002)

 

$      137,544




The accompanying notes are an integral part of the consolidated financial statements.




20





RECEIVABLE ACQUISITION AND MANAGEMENT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2011 AND 2010


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


A.

THE COMPANY AND PRESENTATION


Receivable Acquisition and Management Corporation and Subsidiaries (the “Company”) was formerly Biopharmaceutics, Inc. In June 1999, pursuant to a meeting of the Board of Directors, Biopharmaceutics Inc, adopted a resolution and filed a certificate of amendment to the certificate of incorporation and changed the name of Biopharmaceutics, Inc., to Feminique Corporation.


On November 25, 2003, the Feminique Corporation incorporated a wholly-owned subsidiary Receivable Acquisition and Management Corp of New York. The Company purchases, manages and collects defaulted consumer receivables.


On April 21, 2004, Feminique Corporation amended its certificate of incorporation to increase its authorized number of shares of common stock from 75,000,000 shares to 325,000,000 shares.  This amendment was approved by Feminique Corporation’s shareholders at its April 20, 2004 annual meeting.  The shareholders also changed the name of Feminique Corporation to Receivable Acquisition and Management Corporation.


The Company ceased investments in distressed consumer credit portfolios in September 2007 and is currently in the process of running off existing portfolios. Three agencies in the United States and one in UK are collecting the remaining portfolios. Since we outsource our collections, the Company is not required to register in each and every state the debtor resides. The collection agencies are required to register in each state they call debtors.

 

B.

FINANCE RECEIVABLES


The Company has adopted the provisions of Financial Accounting Standards Board Accounting Standards Codification (FASB ASC) 310-30 for its investment in finance receivables, “Accounting for Loans or Certain Debt Securities Acquired in a Transfer.” This SOP limits the yield that may be accreted (accretable yield) to the excess of the Company’s estimate of undiscounted expected principal, interest and other cash flows (cash flows expected at the acquisition to be collected) over the Company’s initial investment in the finance receivables.  Subsequent increases in cash flows expected to be collected are recognized prospectively through adjustment of the finance receivables yield over its remaining life. Decreases in cash flows expected to be collected are recognized as impairment to the finance receivable portfolios. The Company’s proprietary collections model is designed to track and adjust the yield and carrying value of the finance receivables based on the actual cash flows received in relation to the expected cash flows.


During the years ended September 30, 2011 and 2010, the Company neither acquired nor sold any finance receivables.


In the event that cash collections would be inadequate to amortize the carrying balance, an impairment charge would be taken with a corresponding write-off of the receivable balance. Accordingly, the Company does not maintain an allowance for credit losses.


The agreements to purchase the aforementioned receivables include general representations and warranties from the sellers covering account holder death or bankruptcy, and accounts settled or disputed prior to sale. The representation and warranty period permitting the return of these accounts from the



21




Company to the seller is typically 90 to 180 days. Any funds received from the seller of finance receivables as a return of purchase price are referred to as buybacks. Buyback funds are simply applied against the finance receivable balance received. They are not included in the Company’s cash collections from operations nor are they included in the Company’s cash collections applied to principal amount. Gains on sale of finance receivables, representing the difference between sales price and the unamortized value of the finance receivables, are recognized when finance receivables are sold.


Changes in finance receivables for the years ended September 30, 2011 and 20010 were as follows:


 

2010

2009

Balance at beginning of year

$  57,341

$  141,163

Cash collections applied to principal

(56,044)

(22,521)

Receivable writedown

-

(61,301)

Balance at end of year

$  1,297

$  57,431

Estimated Remaining Collections (“ERC”)*

 $  1,297

$  57,431


*Estimated remaining collection refers to the sum of all future projected cash collections from acquired portfolios. ERC is not a balance sheet item, however, it is provided for informational purposes. Income recognized on finance receivables was $51,512 and $145,109 for the fiscal years ended September 30, 2011 and 2010, respectively.


Under ASC 310-30 debt security impairment is recognized only if the fair market value of the debt has declined below its amortized costs. The Company took impairment charges totaling approximately $0 and $61,000 during the years ended September 30, 2011 and 2010, respectively.


C.  PRINCIPLES OF CONSOLIDATION


The consolidated financial statements include the accounts of the Company and its subsidiaries.  All significant intercompany accounts and transactions have been eliminated in consolidation.


D.  Cash and Cash Equivalents


The Company considers all highly liquid debt instruments and other short-term investments with an initial maturity of three months or less to be cash or cash equivalents. There were no cash equivalents as of September 30, 2011 and September 30, 2010.


E.  INCOME TAXES


The Company accounts for income taxes pursuant to the provisions of the ASC 740, Accounting for Income Taxes, which requires an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities.


F.  USE OF ESTIMATES


The preparation of financial statements in conformity with US generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during this reported period. Actual results could differ from those estimates.


G.  Loss per share of common stock



22





Basic net loss per common share is computed using the weighted average number of common shares outstanding. Diluted earnings per share (EPS) include additional dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock options and warrants.


H.  Recent account pronouncements


In January 2010, the FASB issued Accounting Standards Update (“ASU”) No. 2010-06, “Improving Disclosures about Fair Value Measurements” (the “Update”). The Update provides amendments to FASB Accounting Standards Codification (“ASC”) 820-10 that require entities to disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers. In addition the Update requires entities to present separately information about purchases, sales, issuances, and settlements in the reconciliation for fair value measurements using significant unobservable inputs (Level 3). The disclosures related to Level 1 and Level 2 fair value measurements are effective for the Company in 2010 and the disclosures related to Level 3 fair value measurements are effective for the Company in 2011. The Update requires new disclosures only, and has no impact on our consolidated financial position, results of operations, or cash flows.



NOTE 2 - STOCK OPTIONS


In April 2004, the Company adopted a stock option plan upon approval by the shareholders at the Annual General Meeting under which selected eligible key employees of the Company are granted the opportunity to purchase shares of the Company’s common stock. The plan provides that 37,500,000 shares of the Company’s authorized common stock be reserved for issuance under the plan as either incentive stock options or non-qualified options. Options are granted at prices not less than 100 percent of the fair market value at the end of the date of grant and are exercisable over a period of ten years or as long as that person continues to be employed or serve on the on the Board of Directors, whichever is shorter. At September 30, 2011 and September 30, 2010, the Company had no options outstanding under this plan.


The fair value of each option awarded is estimated on the date of grant using the Black-Scholes option valuation model that uses the assumptions noted in the following table. Expected volatilities are based on historical volatility of the Company’s stock, and other factors. The expected life of the options granted represents the period of time from date of grant to expiration (1 year). The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of grant. The per share weighted-average fair value of stock options granted for the years ended September 30, 2011 and 2010 was $0 and $.027, respectively, on the date of grant using the Black Scholes option-pricing model with the following assumptions:


Life

Dividend Yield

Risk-free Interest rate

Volatility

1 year

0%

0.290%

239.60%


A summary of the status of the Company’s stock option plans for the fiscal years ended September 30, 2011 and 2010 and changes during the years are presented below: (in number of options):


 

Number of Options

Average Exercise Price

Outstanding options at October 1, 2008 and 2009

-

$  -

Options granted

750,000

0.027

Options exercised

(750,000)

0.027

Outstanding options as of September 30, 2010

-

$  -


Remaining options available for grant were 36,750,000 and 36,750,000 as of September 30, 2011 and 2010, respectively.  The total intrinsic value of options exercised during the years ended September 30,



23




2011 and 2010 was $0 and $17,582, respectively. Cash received from the exercise of stock options for the years ended September 30, 2011 and 2010 was $0 and $20,250, respectively.


For the years ended September 30, 2011 and 2010, the unamortized compensation expense for stock options for both the years ended was $0. The Company has no non-vested options as of September 30, 2011. The compensation cost that has been charged against income for the Plan was $0 and $17,582 for the fiscal years ended September 30, 2011 and 2010, respectively.



NOTE 3 - WARRANTS


The Company issued warrants during the year 2004. At September 30, 2011 and September 30, 2010, respectively, the Company had 946,000 warrants outstanding each exercisable at approximately $.0075. The warrants were all exercised.



NOTE 4 - INCOME TAXES


Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due.  Deferred taxes related to differences between the basis of assets and liabilities for financial and income tax reporting will either be taxable or deductible when the assets or liabilities are recovered or settled.  The difference between the basis of assets and liabilities for financial and income tax reporting are not material therefore, the provision for income taxes from operations consist of income taxes currently payable.


There was no provision for income tax for the years ended September 30, 2011 and 2010.


Due to the uncertainty of utilizing the approximate $548,002 and $466,190 in net operating loss carryforwards for the years ended September 30, 2011 and 2010 respectively, and realizing the deferred tax assets in the future, an offsetting valuation allowance has been established for the full amount of the deferred tax assets. The losses are available to offset future taxable income through 2031.

 

September 30,

2011

September 30,

2010

Default tax assets

$  191,801

$  163,167

Less: valuation allowance

(191,801)

(163,167)

Totals

$  -

$  -



NOTE 5 - STOCK HOLDERS’ EQUITY


Common Stock


There were 325,000,000 shares of common stock authorized, with 17,948,896 and 16,802,896 shares issued and outstanding at September 30, 2011 and September 30, 2010, respectively. The par value for the common stock is $.001 per share.


During the year ended September 30, 2010 the Company issued 750,000 options for compensation valued at $17,582. The options were exercised and the Company received cash of $20,250.


The following is a list of the common stock transactions during the year ended September 30, 2011:


The Company issued 946,000 shares for cash of $7,095.



24





The Company issued 200,000 shares for services.  The value was $10,000.



NOTE 6 - RELATED PARTY


The Company receives fees from Ramco Income Fund Limited (“Fund”) a Bermuda entity. The Company is the investment manager of the Fund.  The servicing fees for the years ended September 30, 2011 and 2010 were $1,060 and $13,742 respectively. The Fund has been fully redeemed.



NOTE 7 - FAIR VALUE MEASUREMENTS


The Company has categorized its financial assets and liabilities based  upon the fair value hierarchy specified by FASB Accounting Standards Codification (“ASC “) Topic 820, Fair Value Measurement and Disclosures (“ASC 820”) This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurement, but discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost).  This standard provides for a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:


The Company issued warrants during the year 2004. At September 30, 2011, 0 warrants remained outstanding.


Level 1 - Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

 

Level 2 - Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly.  These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active

 

Level 3 - Unobservable inputs that reflect the Company’s own assumptions.


The following table represents the fair value hierarchy for those financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2011:


Assets

Level 1

Level 2

Level 3

Total

Finance receivables

-

-

$  1,297

$  1,297

Total Assets

-

-

$  1,297

$  1,297

Liabilities

-

-

-

-

Total Liabilities

-

-

-

-


The following table represents the fair value hierarchy for those financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2010:


Assets

Level 1

Level 2

Level 3

Total

Finance receivables

-

-

$  57,341

$  57,341

Total Assets

-

-

$  57,341

$  57,341

Liabilities

-

-

-

-

Total Liabilities

-

-

-

-




25




The following table is a reconciliation of changes in the net fair value of finance receivables which are classified as level 3 in the fair value hierarchy.


 

2011

2010

Finance receivables

 

 

Balance as of October 1,

57,341

141,163

Cash collected

56,044

22,521

Impairment of receivables

-

61,301

Balance as of September 30,

1,297

57,341


NOTE 8 - NOTES RECEIVABLE


On April 27, 2011 the Company has notes receivable from Airbak Technologies, LLC. The principal balances of these notes are $165,000 at June 30, 2011 and $0 at September 30, 2010. These notes bear interest at a rate of 15% or maximum of $24,000. Airbak defaulted on the Note and Company has a default judgement outstanding and highest permitted default interest rate continues to accrue. In the event a merger with Airbak is not completed then Company will enforce the judgment and pursue claims against the members of Airbak Technologies LLC.



NOTE 9 - NOTES PAYABLE


On May 4, 2011, the Company issued a convertible note payable in the amounts of $50,000 each to Brent Grady and Dr. Rizwan Chaudhry, at an annual interest rate of 5%.  The note is due on Nov 4, 2012. On August 10, 2011, the Company issued a convertible note payable in the amounts of $40,000 and $30,000 to BMS Associates and Farheen Shadab, at an annual interest rate of 5%.  The note is due on February 10, 2013. Brent Grady note of $50,000 has been paid back without interest and penalty and the company continues to accrue interest on the remaining notes.


NOTE 10 - SUBSEQUENT EVENTS


Of the $170,000 note payable outstanding as of September 30, 2012, the Company redeemed $50,000 of it by paying back $50,000 without interest and penalty.


In accordance with ASC Topic 855-10, the Company has analyzed its operations subsequent to October 31, 2011 to December 14, 2011, the date these financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these financial statements.













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ITEM 8A. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE


None.


ITEM 9A. CONTROLS AND PROCEDURES


(a) Disclosure Controls and Procedures


Our principal executive and principal financial officer has evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a - 15(e) and 15d - 15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this annual report.  He has concluded that, based on such evaluation, our disclosure controls and procedures were effective as of September 30, 2011, as further described below.


(b) Management’s Annual Report on Internal Control Over Financial Reporting


Overview


Internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) refers to the process designed by, or under the supervision of, our principal executive officer and principal financial officer, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.  Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company.


Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations.  Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures.  Internal control over financial reporting also can be circumvented by collusion or improper management override.  Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting.  However, these inherent limitations are known features of the financial reporting process.  Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.


Management has used the framework set forth in the report entitled “Internal Control - Integrated Framework” published by the Committee of Sponsoring Organizations (“COSO”) of the Treadway Commission to evaluate the effectiveness of RAMC’s internal control over financial reporting.  As a result of the material weaknesses described below, management has concluded that the Company’s internal control over financial reporting was effective as of September 30, 2011.


Management’s Assessment


Management has determined that, as of the September 30, 2011 measurement date, there were no material weaknesses in both the design and effectiveness of our internal control over financial reporting.


Human Resources: The Company has an outsourcing model whereby all collections functions are outsourced to external collection agencies and law firms. Each agency and law firm is required to send remittances along with detailed collections report at least once a month. Our collections manager handles receipt of checks and reports. She has a supervisor to review all data entered into our software system. The data is further verified by the CEO who receives independent reports from agencies and law firms.


Collections: All remittances are received as checks along with remittance report from all our collection agencies. Collections are entirely handled by our operations center in Rancho Santa Fe, California. The reports are entered into our software system “Collect”.  The checks are then deposited by our New Jersey office. The checks are posted into our accounting records upon receipt of reports from California office and independent reports from the Collection Agencies. Receipt, depositing and recording functions are completely delineated. To date we have not had an incidence of theft or leakage.



27





Internal Accounting: Our internal accounting is done by a CPA firm before financials are submitted to our auditors.


Financial Reporting: The Company does not deal with any inventories or receivables. Our reporting is based on actual collections. Receivables are rarely created. The Company pays most of its bills upon receipt.


Revenue Recognition: The Company currently uses “Recovery Method” instead of Interest Method for recognizing finance income. Finance income is only recognized when the investment cost has been fully recognized.


Portfolio Impairment and Accretion: The Company assesses each portfolio for possible impairment or accretion at the end of each fiscal year based on actual collections at the time of determination.

  

This annual report does not include an attestation report of the Company’s registered accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission


(c) Changes in Internal Control over Financial Reporting


There has been no change in our internal control over financial reporting, as defined in Rules 13a-15(f) of the Exchange Act, during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.   

 

ITEM 9B. OTHER INFORMATION


None.

















28




PART III


ITEM 10.  DIRECTORS, OFFICERS AND CORPORATE GOVERNANCE.


The following table sets forth the names, age, and position of each of our directors and executive officers.

 

Name

 

Age

 

Present Principal Employment

 

 

 

 

 

Max Khan

 

45

 

Director, President, CEO and CFO

Gobind Sahney

 

50

 

Chairman

Steven Lowe

 

51

 

Director and Secretary

 

Set forth below is biographical information for each officer and director.


GOBIND SAHNEY, age 50, 1987 to 2004, Chairman & CEO, Young Entrepreneurs Society, Inc. (YES) a credit card marketing Company.1997 to 2004, Chairman & President, Sahney & Company, a corporate finance advisory firm. Mr. Sahney is a lifetime member of the National Eagle Scout Association; member Babson College Board of Trustees; the Babson College Asian Advisory Board; Mr. Sahney is a graduate of Babson College with dual degrees in Finance and Accounting. Born in 1961, Mr. Sahney lives in San Diego and has 2 children.


MAX KHAN, age 45, has been in the financial industry since 1987. He began his career as a financial consultant in New York. Mr. Khan founded Alliance Global Finance Inc. in 1992 with focus on corporate finance and investment banking. Mr. Khan served as president of Alliance Global Finance from 1991 through October 2003. Mr. Khan is a managing member of Thor Capital LLC, a FINRA registered firm. He currently holds Series 7 & 24 licenses. Mr. Khan has a Bachelors Degree in Accounting and Economics from City University of New York and MBA from Pace University (New York). He is married with 2 children and lives in New Jersey.


Steven Lowe, age 51, is a practicing attorney. He is the founder of Lowe Law. Mr. Lowe graduated from Vanderbilt University and received his JD from University of Connecticut School of Law.


SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE


Section 16(a) of the Exchange Act requires the Company’s directors, executive officers and persons who own more than ten percent of the Company’s outstanding Common Stock to file with the SEC and the Company reports on Form 4 and Form 5 reflecting transactions affecting beneficial ownership. Based solely on a review of the copies of the reports furnished to us, or written representations that no reports were required to be filed, we believe that during the fiscal year ended September 30, 2011 all Section 16(a) filing requirements applicable to our directors, officers, and greater than 10% beneficial owners were complied with.









29




ITEM 11. EXECUTIVE COMPENSATION


Summary Compensation Table


The following table sets forth information regarding compensation paid to our principal executive officer, principal financial officer and bonus for the years ended September 30, 2010 and 2011.


SUMMARY COMPENSATION TABLE

 

 

Salary

Bonus

Stock Awards

 

Option awards

Non-equity incentive plan compensation

Change in pension value and non qualified deferred compensation

All Other Compensation

 

Total

Name and principal position

Year

($)

($)

($)

 

($), (a)

($)

($)

($)

 

($)

  

 

 

 

 

 

 

 

 

 

 

 

Max Khan, President, Chief Executive Officer, Chief Financial Officer (1)

2011

$

-0-

-0-

 

-0-

-0-

-0-

-0-

 

-0-

  

2010

$

-0-

-0-

 

-0-

-0-

-0-

-0-

 

-0-

Steven Lowe

Director and Secretary (2)

2011

-0-

-0-

-0-

 

-0-

-0-

-0-

-0-

 

-0-

  

2010

-0-

-0-

-0-

 

-0-

-0-

-0-

-0-

 

-0-

Gobind Sahney

Chairman of the Board (3)

2011

-0-

-0-

-0-

 

-0-

-0-

-0-

-0-

 

-0-

  

2010

-0-

-0-

-0-

 

-0-

-0-

-0-

-0-

 

-0-


Grants of Plan-Based Awards


There were no grants of plan-based awards to named executive officers for the year ended September 30, 2011.


Outstanding Equity Awards at Fiscal Year-End


None.


Option Exercises and Stock Vested


No executive officer identified in the Summary Compensation Table above received or exercised any option in fiscal year 2011.  There were no shares of stock awarded or vested with respect to any of those executive officers.


Pension Benefits


None.


Non-qualified Deferred Compensation


The Company does not have any defined contribution or other plan which provides for the deferral of compensation on a basis that is not tax-qualified.


Employment Agreements


The Company has no employment agreement. The previous agreement with Mr. Khan expired on April 30, 2007. Under the existing employment provided Mr. Khan was entitled to receive $180,000 in annual compensation. Mr. Khan and the Company did not enter into a separation agreement and he has been serving the company without an employment agreement.



30





Potential Payments Upon Termination or Change-in-Control


None.


Director Compensation Arrangements


None


ITEM 12. EQUITY COMPENSATION PLAN INFORM AND SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.


Equity Compensation Plan Information


Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters


The  following table sets forth the number of shares known to be owned by all persons who own at least 5% of RAMC’s outstanding common stock, the Company's directors, the executive officers, and the directors and executive officers as a group as of December 31, 2011, unless otherwise noted. Unless otherwise indicated, the stockholders listed in the table have sole voting and investment power with respect to the shares indicated.

 

NAME AND ADDRESS

 

AMOUNT AND

NATURE OF

 

 

 

BENEFICIAL OWNER

 

BENEFICAL OWNERSHIP

 

PERCENT OF CLASS

 

 

 

 

 

 

 

Gobind Sahney

 

 

870,000

 

 

4.84

%

Lisa Sahney Trust

 

 

1,740,000

 

 

9.69

%

Max Khan

 

 

2,820,000

 

 

15.71

%

Mehtab Sultana

 

 

1,300,000

 

 

7.24

%

Steven Lowe (1)

 

 

100,000

 

 

 

 

All Directors and Officers as a group (3 persons)

 

 

3,870,000

 

 

21.56

%

 

(1)

Represents fully vested options granted in 2005.


*Less than 1*% of the outstanding common stock


** Beneficial Ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of common stock subject to options, warrants, or convertible debt currently exercisable or convertible, or exercisable or convertible within 60 days of December 31, 2011 are deemed outstanding for computing the percentage of the person holding such option or warrant.  Percentages are based on a total of 17,948,896 shares of common stock outstanding on December 31, 2011, and the shares issuable upon the exercise of options, warrants exercisable, and debt convertible on or within 60 days of December 31, 2011, as described herein.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE


There has not been any related transaction during the year ended September 30, 2011. Mr. Steven Lowe remains the only independent director of the board.


ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES


Audit and Non-Audit Fees


Aggregate fees for professional services rendered for the Company by Friedman LLP and Silberstein Ungar, PLLC for the fiscal years ended September 30, 2011 and 20010 are set forth below. The aggregate fees included in the Audit category are fees billed for the fiscal years for the audit of the Company's annual financial statements and



31




review of financial statements and statutory and regulatory filings or engagements. The aggregate fees included in each of the other categories are fees billed in the fiscal years. (All references to "$" in this Proxy Statement are to United States dollars.)

 

 

 

September 30,

2011

 

September 30,

2010

 

 

 

 

 

 

 

Audit Fees

 

$

8,000

 

$

20,000

 

Audit Related Fees

 

$

5,250

 

$

 

 

Tax Fees

 

$

1,000

 

$

1,500

 

All Other Fees

 

$

0

 

$

0

 

Total

 

$

14,250

 

$

21,500

 

 

Audit Fees for the fiscal years ended September 30, 2011 and 20010 were for professional services rendered for the audits of the consolidated financial statements of the Company, quarterly review of the financial statements included in Quarterly Reports on Form 10-Q, consents, and other assistance required to complete the year-end audit of the consolidated financial statements.


Audit-Related Fees as of the fiscal years ended September, 2011 and 2010 were for assurance and related services reasonably related to the performance of the audit or review of financial statements and not reported under the caption Audit Fees.


Tax Fees as of the fiscal year ended September 30, 2011 and 2010 were for professional services related to tax compliance, tax authority audit support and tax planning.


There were no fees that were classified as All Other Fees as of the fiscal years ended September 30, 2011 and 2010.


As the Company does not have a formal audit committee, the services described above were not approved by the audit committee under the de minimus exception provided by Rule 2-01(c)(7)(i)(C) under Regulation S-X. Further, as the Company does not have a formal audit committee, the Company does not have audit committee pre-approval policies and procedures.














32




ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES


(a)  Financial Statements and Schedules


1.  Financial Statements


The following consolidated financial statements are filed as part of this report under Item 8 of Part II “Financial Statements and Supplementary Data.:


A.  Consolidated Balance Sheets at September 30, 2011 and 2010.

B.  Consolidated Statements of Operations for the Years Ended September 30, 2011 and 2010.

C.  Consolidated Statements of Changes in Shareholders’ Equity (Capital Deficit) for the Years Ended September 30, 2011 and 2010.

D.  Consolidated Statements of Cash Flows for the Years Ended September 30, 2011 and 2010.


(b)  Exhibits


The exhibits listed in the accompanying Index to Exhibits on pages 36 to 37 are filed or incorporated by reference as part of this Annual Report on Form 10-K.
















33




SIGNATURES


In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this 13 th day of January 2012.

 

RECEIVABLE ACQUISITION & MANAGEMENT CORPORATION


/s/ Max Khan

By:  Max Khan

Chief Executive Officer, Chief Financial/Accounting Officer, and Director

Date: January 13, 2012

 


In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:



/s/ Max Khan

By: Max Khan

Chief Executive/Accounting Officer, Chief Financial Officer and Director

Date: January 13, 2012

 

 

/s/ Gobind Sahney

By: Gobind Sahney

Chairman of the Board

Date: January 13, 2012

 

/s/ Steven Lowe

By: Steven Lowe

Director

Date: January 13, 2012























34