UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K/A
(Amendment
No. 1)
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of The Securities Exchange Act of
1934
Date of
Report (Date of earliest event reported): May 16, 2005
Ramp
Corporation
(Exact
name of registrant as specified in its charter)
| |
|
|
|
Delaware |
0-24768 |
841123311 |
|
(State
or other jurisdiction of incorporation) |
(Commission
File Number) |
(IRS
Employer Identification No.) |
| |
|
|
|
33
Maiden Lane, New York, New York |
10038 |
|
(Address
of principal executive offices) |
(Zip
Code) |
Registrant’s
telephone number, including area code:
(212) 440-1500
Not
Applicable
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
|
o |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425) |
|
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12) |
|
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
|
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
Explanatory
Note:
This
Current Report on Form 8-K is being filed principally to reflect amended Items
4.01 and 4.02.
Item
1.01. Entry into a Material Definitive Agreement.
See Item
5.02 with respect to the terms of the consulting arrangement between Ramp
Corporation (the "Company") and Andrew Brown, the Company's former Chairman,
President and Chief Executive Officer.
Item
1.02. Termination of a Material Definitive Agreement.
See Item
5.02 with respect to the suspension of the Employment Agreement between Andrew
Brown, the Company's former Chairman, President and Chief Executive Officer, and
the Company.
Item
2.02. Results of Operations and Financial Condition.
On May
23, 2005, the Company issued a press release announcing, among other things,
that it would be unable to file its Quarterly Report on Form 10-Q for the
quarter ended March 31, 2005 (the "March 31 10-Q"), within the period required
by SEC regulations.
Item
2.04. Triggering Events that Accelerate or Increase a Direct Financial
Obligation or an Obligation Under an Off-Balance Sheet
Arrangement.
The
Company's failure to file the March 31 10-Q constitutes an event of default
under the Company's 8% Convertible Debentures in the aggregate principal amount
of $4,950,000 issued on January 12, 2005, March 31, 2005, and May 13, 2005. As a
result of such default, the holders of the debentures may declare the total
outstanding principal amount of $4,950,000 plus interest due under such
debentures to become immediately due and payable. Under the terms of the
debentures, upon acceleration of payment, the Company would have to pay 110% of
the outstanding principal balance plus interest at the rate of 18% per annum on
the outstanding balance due. The Company's payment of such outstanding principal
amount would have a material adverse effect on the Company's financial
condition.
In
addition, as a result of the Company's failure to timely file the March 31 10-Q,
the Company will be ineligible for at least one year to register its securities
with the SEC under Form S-3, as required by the terms of the securities purchase
agreements under which the debentures were issued. The securities purchase
agreements provide for a penalty equal to 1-1/2% of the outstanding principal
amount of such debentures per month from May 18, 2005 until such time as a
registration statement on Form S-3 is filed, and for the period from August 11,
2005 until such registration statement is declared effective. Based on the
current outstanding principal amount of the debentures, the monthly penalty
payment would be approximately $75,000. The Company's payment of such a penalty
would have a material adverse effect on the Company's financial
condition.
Item
3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer Of Listing.
On May
23, 2005, the Company notified the American Stock Exchange (“AMEX”) that it
would be unable to timely file the March 31 10-Q. Section 1101 of the AMEX
Company Guide requires the timely filing of all SEC periodic reports for
maintenance of the listing of a listed company's securities. The Company is
undertaking to complete and file the March 31 10-Q as soon as
possible.
Item
4.01. Changes
in Registrant's Certifying Accountant.
On May
21, 2005, BDO Seidman LLP ("BDO"), the Company's independent registered
accounting firm, notified the Company that it had resigned from its engagement
effective as of May 21, 2005.
From June
20, 2003 through May 21, 2005, (i)
there were no disagreements with BDO on any matters of accounting principles or
practices, financial statement disclosure, or auditing scope and procedures
which disagreements, if not resolved to the satisfaction of BDO, would have
caused BDO to make reference to the subject matter of the disagreements in
connection with its report and (ii) there were no "reportable events" as that
term is described in Item 304(a)(1)(v) of Regulation S-K, except with respect to
the material weaknesses in the Company’s internal controls as disclosed in Item
4.02 of this Form 8-K.
The
Company previously provided BDO with a copy of the disclosures made in this Form
8-K prior to the filing of this Form 8-K and requested that BDO furnish the
Company with a letter addressed to the Securities and Exchange Commission
stating whether it agrees with the above disclosures. See Item
4.02.
The
Company's Audit Committee is currently in the process of seeking the engagement
of a new independent registered public accounting firm.
Item
4.02. Non-Reliance
on Previously Issued Financial Statements or a Related Audit
Report or Completed Interim Review.
The
Company previously requested that BDO furnish the Company with a letter
addressed to the Securities and Exchange Commission stating whether it agrees
with the disclosures concerning its resignation contained in this Form
8-K.
On June
3, 2005, the Company received a letter from BDO (the “BDO Letter”) indicating
that BDO agrees with all disclosure contained in this Form
8-K, except
with respect to the statement by the Company that there were no "reportable
events" as that term is described in Item 304(a)(1)(v) of Regulation S-K. The
BDO Letter also set forth that BDO had notified the Company’s management and
audit committee of certain reportable events, as more particularly described
therein. The BDO Letter also indicated that investigations relating to such
reportable events could materially impact the fairness and/or reliability of the
Company’s audited financial statements for the periods ended December 31, 2004
and 2003. The BDO Letter is appended to this Current Report on Form 8-K as
Exhibit 99.1.
In 2004,
BDO advised the Company’s management and Audit Committee that, in BDO’s opinion,
there were reportable conditions during 2004 which constituted material
weaknesses in internal control. The identified material weaknesses stem from the
Company's numerous non-routine equity transactions involving complex and
judgmental accounting issues. While all of these transactions were recorded,
BDO, in connection with its audit work, noted instances where Generally Accepted
Accounting Principals were not correctly applied and adjustments to the
Company's financial statements were required.
As a
result of the material weaknesses described above, the Company’s management,
including its Chief Executive Officer and Chief Financial Officer, determined
that the Company’s disclosure controls and procedures were inadequate as of
December 31, 2004.
In 2003,
BDO advised the Company’s management and Audit Committee that, in BDO’s opinion,
there were reportable conditions during 2003 which constituted material
weaknesses in internal control. More specifically, during 2003, the Company’s
accounting staffing, records and controls were insufficient to identify and
record all accounting entries necessary to reflect the Company’s financial
position, results of operations and cash flows in accordance with generally
accepted accounting principles in the United States, and prepare financial
reports in compliance with the rules and regulations of the Securities and
Exchange Commission. In particular, there were numerous accounting errors and
misapplications of accounting principles generally accepted in the United
States, due in large measure to the absence of a chief financial officer or
other individual with the appropriate experience and background to handle
accounting and financial reporting matters arising from the complexity of a
number of the Company’s transactions during 2003. However, BDO advised the Audit
Committee that these conditions were considered in determining the nature,
timing, and extent of the procedures performed for the audit of the Company’s
financial statements for the year ended December 31, 2003, and that these
conditions did not affect its report dated April 8, 2004 with respect to these
financial statements, which includes an explanatory paragraph indicating that
the Company’s recurring losses from operations and working capital deficit raise
substantial doubt about the Company’s ability to continue as a going
concern.
Item
5.02. Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers.
(b) On May
22, 2005, Andrew Brown, the Company's Chairman, President and Chief Executive
Officer and a director of the Company, resigned as Chairman effective
immediately at the request of the Company's independent directors. In addition,
pending the conclusion of the investigation referred to in Item 8.01 below, the
Company's board of directors suspended Mr. Brown's employment as President and
Chief Executive Officer effective immediately. At the request of the Company's
independent directors, pending the conclusion of such investigation, Mr. Brown
has agreed to act as a consultant to the Company on terms that are being
negotiated.
On May
25, 2005, Steven Shorr resigned as a director of the Company.
(c) On May
22, 2005, Ron Munkittrick, the Company's Chief Financial Officer, was appointed
as the Company's Acting Chief Executive Officer. Mr. Munkittrick will continue
to serve as the Company's Chief Financial Officer, a position that he has held
since October 12, 2004. Mr. Munkittrick's background and experience prior to
joining the Company is incorporated herein by reference to the Company's
definitive proxy statement for its Annual Meeting held on November 18, 2004,
filed with the SEC on October 18, 2004.
(d) On May
22, 2005, the Company's board of directors elected Anthony Soich, a director of
the Company since June 21, 2004, to serve as the Company's
Chairman.
Item
8.01. Other Events.
On May
16, 2005, Andrew Brown, the Company's President and Chief Executive Officer,
informed its board of directors that in December 2003, he received an
unsolicited gift from an individual who has acted as an advisor to several of
the Company's investors. At that time, Mr. Brown was the Company's President,
but not its Chief Executive Officer. Mr. Brown further advised the board that at
the time of his receipt of the package containing the gift, he was unaware that
it contained an undetermined amount of cash. Mr. Brown discovered that the
package contained cash only after he opened it, outside of the presence of the
donor. Mr. Brown told the board that he was unable to return the gift, because
the donor had left the United States and resided outside of the country. Mr.
Brown stated that he knew he should not keep the money, and accordingly, he
discarded it within several days after having received it. Mr. Brown further
advised the board that the donor never asked him to do or refrain from doing
anything and that the gift did not influence any actions that he has taken in
any capacity as an officer or director of the Company.
In light
of the foregoing disclosure by Mr. Brown, the independent directors of the board
have decided to conduct an investigation into the circumstances surrounding the
gift and to determine whether Mr. Brown has violated any of the Company's
internal rules or policies or any laws. The independent directors are presently
in the process of retaining independent counsel to assist them with the conduct
of such investigation. Upon its conclusion, the directors expect to evaluate the
results of the investigation and to take appropriate action.
At a
special meeting held on May 22, 2005, the Company's board of directors voted to
explore the possibility of selling the Company or one or more of its lines of
business or seeking a merger partner. The board is currently in the process of
contacting suitable investment banking firms to assist it in exploring such
possibilities.
On May
23, 2004, the AMEX suspended trading of the Company's common stock.
Item
9.01. Financial
Statements and Exhibits.
(c) Exhibits
| |
|
|
| |
Exhibit
No. |
Description |
| |
|
|
| |
99.1 |
Letter
from BDO Seidman, LLP, dated June 3, 2005. |
| |
99.2 |
*Press
Release issued by Ramp Corporation on May 25, 2005. |
| |
99.3 |
*Letter
from BDO Seidman, LLP, dated May 21, 2005. |
| |
|
|
| * |
Incorporated
by reference to Exhibits 99.1 and 99.2, respectively, of the Current
Report on Form 8-K of the Company filed on May 26, 2005 (Date of earliest
event reported: May 16, 2005). |
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
| |
|
|
| |
RAMP
CORPORATION
(Registrant) |
|
|
|
| Date: June 7, 2005 |
By: |
/s/ Ron
Munkittrick |
| |
|
| |
Ron Munkittrick
Acting Chief Executive Officer and
Chief Financial
Officer |