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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, 2012


[  ]  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 31, 2012 is 17,948,896 shares, all of one class, $.001 par value per share.   

  

 

 

DOCUMENTS INCORPORATED BY REFERENCE - None














































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

6

 

 

Item 2. Properties

6

 

 

Item 3. Legal Proceedings

6

 

 

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

6

 

 

PART II

6

 

 

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

6

 

 

Item 6. Selected Financial Data

7

 

 

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

7

 

 

Item 8. Financial Statements and Supplementary Data

10

 

 

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

23

 

 

Item 9A. Controls and Procedures

23

 

 

Item 9B. Other Information

24

 

 

PART III

25

 

 

Item 10. Directors, Officers and Corporate Governance

25

 

 

Item 11. Executive Compensation

26

 

 

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

27

 

 

Item 13. Certain Relationships and Related Transactions and Director independence

27

 

 

Item 14. Principal Accounting Fees and Services

28

 

 

Item 15. Exhibits and Financial Statement Schedules

28








1





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.



























2



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.

   

For the years ended September 30, 2012 and September 30, 2011, our revenues were approximately $84,535 and $52,572 and our net loss was ($148,338) and  ($81,812),  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.


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 recovering the funds advanced or concluding a transaction with Airbak. The Company is aggressively looking at additional targets.  

 



3




Employees


As of September 30, 2012, 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;

 

·

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

 

·

general and economic market conditions.

 

·

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


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.

 

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.




4




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. The loss of Max Khan could disrupt our operations and adversely affect our ability to successfully merge with another company.

 

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.  


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 17,948,896 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.


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.



5




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 on a month-to-month basis.


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 had advanced $166,000 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 $166,000 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.


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 OTC Markets under the symbol “RCVA”. Prior to October 2004, there was no market for our common stock. The last reported price as of December 31, 2012 was $0.01 per share.


Holders


As of December 31, 2012 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.





6




Equity Compensation Plans


During the fiscal year ended September 30, 2012, we did not issue any equity compensation for the benefit of our directors, officers or future employees.   


ITEM 6.  SELECTED FINANCIAL DATA


Not required.


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, 2012 Compared to Year Ended September 30, 2011.

 

Revenues

 

Total revenue for the twelve months ended September 30, 2012 increased by approximately 62% or $32,854 to $85,426 from $52,572 for the year ended September 30, 2011.  The Company had a net loss of ($148,338) for the year ended September 30, 2011 versus net loss of ($81,812) for the year ended September 30, 2011. The net loss was largely impacted by impairment of note receivable from Airbak Technologies LLC.  

  

Total operating expenses

 

Total operating expenses in the year ended September 30, 2012 declined by approximately 32%  or $43,705 to $90,877     compared to $134,582  for the year ended September 30, 2011.

  

Other income and expense


For the year ended September 30, 2012, the Company had interest income of $88, loss of ($165,000) from impairment of notes receivable and income of $22,025 from debt relief compared to interest income of $198 for the year ended September 30, 2011. The Company has no other contingent expense.

 

Income taxes

 

For the years ended September 30, 2012 and 2011, the Company has not recorded any income tax liability.

 

Net Income (loss)


Net loss for the year ended September 30, 2012 was ($148,338) versus ($81,812) for the year ended September 30, 2011.  




7




Liquidity and Capital Resources

 

Liquidity

 

At September 30, 2012 the Company had working capital deficit of ($10,794) versus working capital of $136,679 at September 30, 2011, largely due to impairment of notes receivables. At the year ended September 30, 2012, the Company had $60,572 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, 2012 compared to September 30, 2011


During the years ended September 30, 2012 and 2011, the Company had finance income of $ 84,535 and $51,512 , respectively.


During the year ended September 30, 2012, we generated $891 compared to $1,060 in servicing income in the year ended September 30, 2011.


Cash provided from operating activities was $5,036 during the year ended September 30, 2012 versus cash used from operations of ($22,960) during the year ended September 30, 2011.


Net cash used from financing activities was ($122,782) and net cash provided of $14,877 during the years ended September 30, 2012 and 2011 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, 2012.


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



8




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 until a combination with another company;

 

·

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

 

·

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

 

·

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





































9




ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA





RECEIVABLE ACQUISITION AND MANAGEMENT CORPORATION AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED SEPTEMBER 30, 2012 AND 2011





 

PAGE(S)

 

 

FINANCIAL STATEMENTS:

 

 

 

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

11

 

 

Consolidated Balance Sheets as of September 30, 2012 and 2011

12

 

 

Consolidated Statements of Operations for the Years

 

Ended September 30, 2012 and 2011

13

 

 

Consolidated Statements of Cash Flows for the Years Ended

 

September 30, 2012 and 2011

14

 

 

Consolidated Statements of Stockholders’ Equity (Deficit) for the Years

 

Ended September 30, 2012 and 2011

15

 

 

Notes to Consolidated Financial Statements

16-22
























10




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 Receivable Acquisition and Management Corporation and Subsidiaries

2 Executive Drive, Suite 630, Fort Lee, NJ 07024



We have audited the accompanying consolidated balance sheets of Receivable Acquisition and Management Corporation and Subsidiaries (the “Company”) as of September 30, 2012 and 2011, and the related consolidated statements of operations, stockholders’ equity (deficit) and cash flows for the years ended September 30, 2012 and 2011. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.


We conducted our audits in accordance with standards of the Public Company Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company 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. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, 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 consolidated financial statements referred to above present fairly, in all material respects, the financial position of Receivable Acquisition and Management Corporation and Subsidiaries as of September 30, 2012 and 2011 and the results of its operations and its cash flows for the years ended September 30, 2012 and 2011 in conformity with accounting principles generally accepted in the United States of America.


The accompanying consolidated financial statements have been prepared assuming that Receivable Acquisition and Management Corporation will continue as a going concern.  As discussed in Note 10 to the financial statements, the Company has incurred losses from operations, has limited 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 10. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.



/s/ Silberstein Unger, PLLC


Bingham Farms, Michigan

December 28, 2012






11




RECEIVABLE ACQUISITION AND MANAGEMENT CORPORATION AND SUBSIDIARIES

 CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 2012 AND 2011

 

 

ASSETS

 

 

 

 

2012

 

2011

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

  Cash

$

60,572

 

$

178,318

  Notes receivable

 

-

 

 

165,000

  Finance receivables - short term

 

-

 

 

432

 

 

 

 

 

 

          Total current assets

 

60,572

 

 

343,750

 

 

 

 

 

 

OTHER ASSETS

 

 

 

 

 

  Finance receivables - long-term

 

-

 

 

865

 

 

 

 

 

 

          Total other assets

 

-

 

 

865

 

 

 

 

 

 

TOTAL ASSETS

$

60,572

 

$

344,615

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

   Accrued and other expenses

$

21,366

 

$

34,289

Officer loan

 

-

 

 

2,782

Notes payable

 

50,000

 

 

170,000

 

 

 

 

 

 

          Total current liabilities

 

71,366

 

 

207,071

 

 

 

 

 

 

STOCKHOLDERS'  EQUITY

 

 

 

 

 

   Preferred stock, par value $10 per share;

 

 

 

 

 

       10,000,000 shares authorized in 2011 and 2010 and 0 shares

 

 

 

 

 

       issued and outstanding at September 30, 2012 and 2011, respectively

 

-

 

 

-

   Common stock, par value $.001 per share;

 

 

 

 

 

       325,000,000 shares authorized in 2012 and 2010 and 17,948,896 shares

 

 

 

 

 

       issued outstanding at September 30, 2012 and 2011, respectively

 

17,949

 

 

17,949

   Additional paid-in capital

 

667,597

 

 

667,597

   Accumulated deficit

 

(696,340)

 

 

(548,002)

 

 

 

 

 

 

 Total stockholders' equity

 

(10,794)

 

 

137,544

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

60,572

 

$

344,615



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



12




RECEIVABLE ACQUISITION AND MANAGEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED SEPTEMBER 30, 2012 AND 2011

 

 

 

 

 

2012

 

2011

 

 

 

 

 

 

 

 

 

 

REVENUES

 

 

 

 

 

    Financing income

$

84,535

 

$

51,512

    Gain on sale of finance receivables

 

-

 

 

-

    Service income and other

 

891

 

 

1,060

 

Total revenues

 

85,426

 

 

52,572

 

 

 

 

 

 

COSTS AND EXPENSES

 

 

 

 

 

    Selling, general and administrative

 

90,877

 

 

134,582

 

Total costs and expenses

 

90,877

 

 

134,582

 

 

 

 

 

 

INCOME (LOSS) FROM OPERATIONS

 

(5,451)

 

 

(82,010)

 

 

 

 

 

 

OTHER INCOME (EXPENSES)

 

 

 

 

 

    Interest income

 

88

 

 

198

    Impairment Loss on Notes Receivable

 

(165,000)

 

 

-

    Relief of Debt

 

22,025

 

 

-

 

Total other income (expenses)

 

(142,887)

 

 

198

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS) APPLICABLE TO COMMON STOCK

$

(148,338)

 

$

(81,812)

 

 

 

 

 

 

INCOME (LOSS) PER COMMON SHARE, BASIC AND DILUTED

$

(0.01)

 

$

(0.00)

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES OUTSTANDING, BASIC AND DILUTED

 

17,948,896

 

 

17,815,614



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



13




RECEIVABLE ACQUISITION AND MANAGEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED SEPTEMBER 30, 2012 AND 2011

 

 

 

 

 

 

 

 

 

 

 

 

2012

 

2011

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

  Net income (loss)

 

$

(148,338)

 

$

(81,812)

 

 

 

 

 

 

 

Adjustments to reconcile net income to net cash

 

 

 

 

 

 

provided by operating activities:

 

 

 

 

 

 

   Issuance of stock

 

 

-

 

 

10,000

   Impairment Loss on Notes Receivable

 

 

165,000

 

 

-

   Relief of Debt

 

 

(22,025)

 

 

-

 

 

 

 

 

 

 

Changes in Operating Assets and Liabilities

 

 

 

 

 

 

   Collections applied to principal on finance receivables

 

 

1,297

 

 

56,044

   Increase (decrease) accrued expenses

 

 

9,103

 

 

(7,192)

 

 Net cash provided by (used in) operating activities

 

 

5,037

 

 

(22,960)

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

Proceeds from exercise of stock options

 

 

-

 

 

7,095

Proceeds (payment) on notes receivable

 

 

-

 

 

(165,000)

Proceeds (payment) on notes payable

 

 

(120,000)

 

 

170,000

Proceeds from officer loan

 

 

(2,782)

 

 

2,782

 

Net cash provided by (used in) financing activities

 

 

(122,782)

 

 

14,877

 

 

 

 

 

 

 

NET (DECREASE) IN CASH

 

 

(117,745)

 

 

(8,083)

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR

 

 

178,318

 

 

186,401

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS - END OF YEAR

 

$

60,573

 

$

178,318



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



14




RECEIVABLE ACQUISITION AND MANAGEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

FOR THE YEARS ENDED SEPTEMBER 30, 2012 AND 2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Common Stock

 

Paid-In

 

Accumulated

 

 

 

Shares

 

Amount

 

Capital

 

Deficit

 

Total

BALANCE, OCTOBER 1, 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, 2011

17,948,896

 

$

17,949

 

$

667,597

 

$

(548,002)

 

$

137,544

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) for the year ended September 30, 2012

 

 

 

 

 

 

 

 

 

(148,338)

 

 

(148,338)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE, SEPTEMBER 30, 2012

17,948,896

 

$

17,949

 

$

667,597

 

$

(696,340)

 

$

(10,794)



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



15




RECEIVABLE ACQUISITION AND MANAGEMENT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2012 AND 2011


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, 2012 and 2011, 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.






16




RECEIVABLE ACQUISITION AND MANAGEMENT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

SEPTEMBER 30, 2012 AND 2011


B.  FINANCE RECEIVABLES (CONTINUED)


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 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, 2012 and 2011 were as follows:

 

2012

2011

 

 

 

Balance at beginning of year October 1,

$ 1,297

$ 57,341

Cash collections applied to principal

(1,297)

(56,044)

Receivable writedown

 

 

Balance at the end of the year

$ -

$ 1.297

Estimated Remaining Collections ("ERC")*

$ -

$ 1,297


*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 $84,535 and $51,512 for the fiscal years ended September 30, 2012 and 2011, 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 during the years ended September 30, 2012 and 2011, 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, 2012 and September 30, 2011.






17




RECEIVABLE ACQUISITION AND MANAGEMENT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

SEPTEMBER 30, 2012 AND 2011


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


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 2011 and the disclosures related to Level 3 fair value measurements are effective for the Company in 2012. The Update requires new disclosures only, and has no impact on our consolidated financial position, results of operations, or cash flow.








18




RECEIVABLE ACQUISITION AND MANAGEMENT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

SEPTEMBER 30, 2012 AND 2011



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, 2012 and September 30, 2011, the Company had no options outstanding under this plan.


NOTE 3 - WARRANTS


The Company issued warrants during the year 2004 with an exercise price of $0.0075 and a 10 year term. During fiscal year 2011 all of the outstanding warrants were exercised and the company received proceeds of $7,095. At September 30, 2012 and 2011, respectively, the Company had -0- warrants outstanding.


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, 2012 and 2011.


Due to the uncertainty of utilizing the approximate $696,340 and $548,002 in net operating loss carryforwards for the years ended September 30, 2012 and 2011 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 2032.


 

September 30,

2012

September 30,

2011

 

 

 

Deferred tax assets

$ 243,719

$ 191,801

Less: valuation allowance

(243,719)

(191,801)

Totals

$ -

$ -





19




RECEIVABLE ACQUISITION AND MANAGEMENT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

SEPTEMBER 30, 2012 AND 2011



NOTE 5 - STOCKHOLDERS’ EQUITY


COMMON STOCK


There were 325,000,000 shares of common stock authorized, with 17,948,896 shares issued and outstanding at September 30, 2012 and September 30, 2011, respectively. The par value for the common stock is $.001 per share.


The following is a list of the common stock transactions during the year ended September 30, 2012:


There were no common stock transactions for the year ended September 30, 2012.


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.


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



NOTE 6 - RELATED PARTY


The Company was the investment manager of Ramco Income Fund Limited (“Fund”) a Bermuda corporation whose shares have been fully redeemed and dissolved as of December 2010. On September 30, 2012, Loan Payable to Ramco Income Fund Limited (“Fund”) was written off to Relief of Debt.


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:






20




RECEIVABLE ACQUISITION AND MANAGEMENT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

SEPTEMBER 30, 2012 AND 2011



NOTE 7 - FAIR VALUE MEASUREMENTS (CONTINUED)


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, 2012:


Assets

 

Level 1

 

Level 2

 

Level 3

 

Total

 

 

 

 

 

 

 

 

 

Finance receivables

 

-

 

-

 

$-

 

$-

 

 

 

 

 

 

 

 

 

Total Assets

 

-

 

-

 

$-

 

$-

 

 

 

 

 

 

 

 

 

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, 2012:


Assets

 

Level 1

 

Level 2

 

Level 3

 

Total

 

 

 

 

 

 

 

 

 

Finance receivables

 

-

 

-

 

$1,297

 

$1,297

 

 

 

 

 

 

 

 

 

Total Assets

 

-

 

-

 

$1,297

 

$1,297

 

 

 

 

 

 

 

 

 

Liabilities

 

-

 

-

 

-

 

-

 

 

 

 

 

 

 

 

 

Total Liabilities

 

-

 

-

 

-

 

-





21




RECEIVABLE ACQUISITION AND MANAGEMENT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

SEPTEMBER 30, 2012 AND 2011



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, 2012. The Company cannot reasonably determine the probability of collection of the notes and have been written off to Impairment Loss on Notes Receivable.


NOTE 9 - NOTES PAYABLE


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


NOTE 10 - GOING CONCERN


The Company has incurred operating losses since inception, has limited working capital, and its operating activities may require financing from outside institutions and/or related parties. The accompanying consolidated financial statements have been prepared assuming that the company will continue as a going concern. The Company will need outside financing to support its continued operations or may need to seek a merger with another company in order to survive.


NOTE 11 - SUBSEQUENT EVENTS


In accordance with ASC Topic 855-10, The Company has analyzed its operations subsequent to September 30, 2012 to the date these financial statements were issued, and has determined that it does not have material subsequent events to disclose in these financial statements.

















22




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, 2012, 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, 2012.


Management’s Assessment


Management has determined that, as of the September 30, 2012 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.


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.




23




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.





















24




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

 

46

 

Director, President, CEO and CFO

Gobind Sahney

 

51

 

Chairman

Steven Lowe

 

52

 

Director and Secretary

 

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


GOBIND SAHNEY, age 51, 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 46, 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 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 52, 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, 2012 all Section 16(a) filing requirements applicable to our directors, officers, and greater than 10% beneficial owners were complied with.












25




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, 2012 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)

2012

$

-0-

-0-

 

-0-

-0-

-0-

-0-

 

$   

  

2011

$

-0-

-0-

 

-0-

-0-

-0-

-0-

 

-0-

Steven Lowe

Director and Secretary (2)

2012

-0-

-0-

-0-

 

-0-

-0-

-0-

-0-

 

-0-

  

2011

-0-

-0-

-0-

 

-0-

-0-

-0-

-0-

 

-0-

Gobind Sahney

Chairman of the Board (3)

2012

-0-

-0-

-0-

 

-0-

-0-

-0-

-0-

 

-0-

  

2011

-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, 2012.


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 2012.  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.

 



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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, 2012, 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, 2012 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, 2012, and the shares issuable upon the exercise of options, warrants exercisable, and debt convertible on or within 60 days of December 31, 2012, 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, 2012. Mr. Steven Lowe remains the only independent director of the board.





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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, 2012 and 2011 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 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,

2012

 

September 30,

2011

 

 

 

 

 

 

 

Audit Fees

 

$

8,000

 

$

8,000

 

Audit Related Fees

 

$

5,250

 

$

5,250

 

Tax Fees

 

$

1,000

 

$

1,000

 

All Other Fees

 

$

0

 

$

0

 

Total

 

$

14,250

 

$

14,250

 

 

Audit Fees for the fiscal years ended September 30, 2012 and 2011 were for professional services rendered for the audits of the consolidated financial statements of the Company,  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, 2012 and 2011 were for assurance and related services reasonably related to the performance of the audit or quarterly review of financial statements and not reported under the caption Audit Fees.


Tax Fees as of the fiscal year ended September 30, 2012 and 2011 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, 2012 and 2011.


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.


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, 2012 and 2011.

B.  Consolidated Statements of Operations for the Years Ended September 30, 2012 and 2011.

C.  Consolidated Statements of Changes in Shareholders’ Equity (Deficit) for the Years Ended September 30, 2012 and 2011.

D.  Consolidated Statements of Cash Flows for the Years Ended September 30, 2012 and 2011.


(b)  Exhibits


The exhibits listed in the accompanying Index to Exhibits on pages 29 to 32 are filed or incorporated by reference as part of this Annual Report on Form 10-K.




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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 31st day of December 2012.

 

RECEIVABLE ACQUISITION & MANAGEMENT CORPORATION


/s/ Max Khan

By:  Max Khan

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

Date: December 31, 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: December 31, 2012


/s/ Gobind Sahney

By: Gobind Sahney

Chairman of the Board

Date: December 31, 2012


/s/ Steven Lowe

By: Steven Lowe

Director

Date: December 31, 2012

















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