SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2001
--------------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to ____________
Commission File No. 000-27233
---------
RRUN VENTURES NETWORK, INC.
---------------------------
(Exact name of Registrant as specified in its charter)
NEVADA 98-0204736
---------------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
62 W. 8th Avenue, 4th Floor
Vancouver, British Columbia, Canada V5Y 1M7
-------------------------------------- --------
(Address of principal executive (Zip Code)
offices)
Issuer's telephone number, including (604) 682-6541
area code: ---------------
Check whether the issuer
(1) filed all reports required to be filed by Section 13 or 15(d) of the
Exchange Act during the past 12 months (or for such shorter period that the
registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
Yes ( X ) No ( ).
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the last practicable date.
Class Outstanding as of September 30, 2001
----- -----------------------------------------
$0.0001 par value Common Stock 14,614,724
Transitional Small Business Disclosure Format (check one): Yes [ ] No [ X ]
1
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
The accompanying unaudited financial statements have been prepared in accordance
with the instructions to Form 10-QSB and Item 310 (b) of Regulation S-B, and,
therefore, do not include all information and footnotes necessary for a complete
presentation of financial position, results of operations, cash flows, and
stockholders' equity in conformity with generally accepted accounting
principles. In the opinion of management, all adjustments considered necessary
for a fair presentation of the results of operations and financial position have
been included and all such adjustments are of a normal recurring nature.
Operating results for the nine months ended September 30, 2001 are not
necessarily indicative of the results that can be expected for the year ending
December 31, 2001.
2
RRUN VENTURES NETWORK INC.
(Formerly United Management, Inc.)
(A Development Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2001
(Unaudited)
(Stated in U.S. Dollars)
RRUN VENTURES NETWORK INC.
(Formerly United Management, Inc.)
(A Development Stage Company)
CONSOLIDATED BALANCE SHEET
(Unaudited)
(Stated in U.S. Dollars)
-------------------------------------------------------------------------------
SEPTEMBER 30 DECEMBER 31
2001 2000
-------------------------------------------------------------------------------
ASSETS
Current
Cash $ 22,591 $ 10,794
Goods and Services Tax recoverable 358 -
Prepaid expense 8,306 500
-------------------------------
31,255 11,294
Capital Assets 10,010 -
Investment (Note 4) 6,750 6,750
-------------------------------
$ 48,015 $ 18,044
===============================================================================
LIABILITIES
Current
Accounts payable . . . . . . . . . . . . . . $ 495,374 $ 32,114
Loans and advances payable (Note 6) 331,434 66,803
-------------------------------
826,808 98,917
-------------------------------
STOCKHOLDERS' DEFICIENCY
Share Capital
Authorized:
100,000,000 common shares,
par value $0.0001 per share
Issued and outstanding:
14,614,724 common shares 1,461 6,109
Additional paid-in capital 109,744 4,622
Deficit (889,999) (91,604)
-------------------------------
(778,793) (80,873)
-------------------------------
$ 48,015 $ 18,044
===============================================================================
RRUN VENTURES NETWORK INC.
(Formerly United Management, Inc.)
(A Development Stage Company)
CONSOLIDATED STATEMENT OF OPERATIONS AND DEFICIT
(Unaudited)
(Stated in U.S. Dollars)
--------------------------------------------------------------------------
THREE NINE INCEPTION
MONTHS MONTHS OCTOBER 12
ENDED ENDED 2000 TO
SEPTEMBER 30 SEPTEMBER 30 SEPTEMBER 30
2001 2001 2001
--------------------------------------------------------------------------
Revenue $ 4,000 $ 4,000 $ 4,000
---------------------------------------
Expenses
Administrative services 35,629 105,273 135,437
Amortization 906 1,375 1,375
Consulting 163,371 577,403 590,012
Office and Sundry 14,877 39,266 49,236
Professional Fees 38,548 49,049 70,830
Travel 17,306 30,029 34,973
---------------------------------------
270,637 802,395 881,863
Minority interest in loss
Of subsidiary - - (219)
---------------------------------------
270,637 802,395 881,644
---------------------------------------
Net Loss For The Period 266,637 798,395 877,644
==========================================================================
Net Loss Per Share $ 0.03 $ 0.12
=============================================================
Weighted Average Number Of
Common Shares Outstanding 9,166,075 6,913,402
=============================================================
RRUN VENTURES NETWORK INC.
(Formerly United Management, Inc.)
(A Development Stage Company)
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(Stated in U.S. Dollars)
------------------------------------------------------------------------------------
THREE NINE INCEPTION
MONTHS MONTHS OCTOBER 12
ENDED ENDED 2000 TO
SEPTEMBER 30 SEPTEMBER 30 SEPTEMBER 30
2001 2001 2001
------------------------------------------------------------------------------------
Cash Flows From Operating Activities
Net loss for the period $ (266,637) $ (798,395) $ (877,644)
Adjustments To Reconcile Net Loss To Net
Cash Used By Operating Activities
Amortization 906 1,375 1,375
Issue of common stock for expenses 4,000 4,000 8,200
Minority interest in loss of subsidiary - - (219)
Goods and Services Tax recoverable (358) (358) (358)
Prepaid expense (8,306) (7,806) (8,306)
Accounts payable 78,652 387,456 419,570
Loans and advances payable 79,789 305,969 372,772
---------------------------------------
(111,954) (107,759) (84,610)
---------------------------------------
Cash Flows From Investing Activities
Net asset deficiency of legal parent at
date of reverse take-over transaction - - (12,355)
Purchase of capital assets (5,127) (11,385) (11,385)
---------------------------------------
(5,127) (11,385) (23,740)
---------------------------------------
Cash Flows From Financing Activity
Shares issued for cash 13,400 13,400 13,400
---------------------------------------
Increase (Decrease) In Cash (103,681) (105,744) (94,950)
Cash Acquired On Acquisition Of Subsidiary 117,541 117,541 117,541
Cash, Beginning Of Period 8,731 10,794 -
Cash, End Of Period $ 22,591 $ 22,591 $ 22,591
====================================================================================
RRUN VENTURES NETWORK INC.
(Formerly United Management, Inc.)
(A Development Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIENCY
SEPTEMBER 30, 2001
(Unaudited)
(Stated in U.S. Dollars)
ADDITIONAL
PAID-IN
SHARES AMOUNT CAPITAL DEFICIT TOTAL
--------------------------------------------------------
Shares issued for cash and services 4,200,000 $ 4,200 $ - $ - $ 4,200
Adjustment to number of shares
issued and outstanding as a result
of the acquisition of RAHX, Inc.
RAHX, Inc. (4,200,000) (4,200) - - (4,200)
RRUN Ventures Inc. 5,708,780 5,709 (1,509) 4,200
Adjustment to stated value of
stockholders' equity to reflect
minority interest in the net
assets of RAHX, Inc. at the
acquisition date - - (219) - (219)
Net asset deficiency of legal parent
at date of reverse take-over
transaction - - - (12,355) (12,355)
Shares issued to acquire investment
in Kaph Data Engineering Inc. 400,000 400 6,350 - 6,750
Loss for the period - - - (79,249) (79,249)
--------------------------------------------------------
Balance, December 31, 2000 6,108,780 6,109 4,622 (91,604) (80,873)
Adjustment to number of shares
issued and outstanding as a result
of the acquisition of RRUN
Ventures, Inc.
RRUN Ventures, Inc. (6,108,780) (6,109) (4,622) - (10,731)
RRUN Ventures Network Inc. 288,420 288 10,443 - 10,731
Ascribed value of shares issued in
connection with the acquisition of
RRUN Ventures, Inc. 305,439 306 28,325 - 28,631
---------------------------------------------------------
Increase in issued shares due to 20
for 1 stock split 11,283,321 594 (594) - -
Shares issued for debt 1,867,544 187 54,257 - 54,444
Shares issued for cash 670,000 67 13,333 - 13,400
Shares issued for services 200,000 20 3,980 - 4,000
Loss for the period - - - (798,395) (798,395)
---------------------------------------------------------
Balance, September 30, 2001 14,614,724 $ 1,462 $109,744 $(889,999) $(778,793)
=========================================================
RRUN VENTURES NETWORK INC.
(Formerly United Management, Inc.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2001
(Unaudited)
(Stated in U.S. Dollars)
1. NATURE OF OPERATIONS
a) Organization
The Company was incorporated in the State of Nevada, U.S.A., on October 12,
2000.
b) Development Stage Activities
The Company was organized to develop innovative technology based ventures with a
current emphasis on building new technologies for the entertainment and content
industry. The Company's initial venture is RAHX, a business concept focused on
the growing Peer-To-Peer (P2P) file exchange industry. The first branded RAHX
product is Rahxware, a platform that uses P2P technologies to enable and enhance
the distribution of digital media over the internet.
The Company is in the development stage, therefore, recovery of assets is
dependent upon future events, the outcome of which is indeterminable. In
addition, successful completion of the Company's development program and its
transition, ultimately to the attainment of profitable operations, is dependent
upon obtaining adequate financing to fulfill its development activities and
achieve a level of sales to support its cost structure.
Management is of the opinion that sufficient short term funding will be obtained
and that current negotiations with potential users of its products will be
successful.
2. SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in the United States.
Because a precise determination of many assets and liabilities is dependent upon
future events, the preparation of consolidated financial statements for a period
necessarily involves the use of estimates which have been made using careful
judgment.
The consolidated financial statements have, in management's opinion, been
properly prepared within reasonable limits of materiality and within the
framework of the significant accounting policies summarized below:
a) Consolidation
These consolidated financial statements include the accounts of the Company, its
100% owned subsidiary, RRUN Ventures, Inc., and its 67% owned subsidiary, RAHX,
Inc.
RRUN VENTURES NETWORK INC.
(Formerly United Management, Inc.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2001
(Unaudited)
(Stated in U.S. Dollars)
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
b) Development Stage Company
The Company is a development stage company as defined in the Statements of
Financial Accounting Standards No. 7. The Company is devoting substantially all
of its present efforts to establish a new business and none of its planned
principal operations have commenced. All losses accumulated since inception
have been considered as part of the Company's development stage activities.
c) Investments
Investments in companies owned less than 20% are recorded at the lower of cost
or fair market value.
d) Software Development Costs
The costs to develop new software products and enhancements to existing software
products will be expensed as incurred until technological feasibility has been
established. Once technological feasibility has been established, any
additional costs will be capitalized.
e) Income Taxes
The Company has adopted Statement of Financial Accounting Standards No. 109 -
"Accounting for Income Taxes" (SFAS 109). This standard requires the use of an
asset and liability approach for financial accounting and reporting on income
taxes. If it is more likely than not that some portion or all if a deferred tax
asset will not be realized, a valuation allowance is recognized.
f) Amortization
Capital assets are being amortized on the declining balance basis at the
following rates:
Computer equipment 30%
Computer software 100%
Office furniture and equipment 20%
RRUN VENTURES NETWORK INC.
(Formerly United Management, Inc.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2001
(Unaudited)
(Stated in U.S. Dollars)
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
g) Financial Instruments
The Company's financial instruments consist of cash, GST recoverable, prepaid
expenses and accounts payable.
Unless otherwise noted, it is management's opinion that this Company is not
exposed to significant interest or credit risks arising from these financial
instruments. The fair value of these financial instruments approximate their
carrying values, unless otherwise noted.
h) Net Loss Per Share
Net loss per share is calculated using the weighted average number of common
shares outstanding during the period. Fully diluted loss per share is not
presented as the impact of the exercise of options is anti-dilutive.
3. ACQUISITION OF SUBSIDIARY
a) Effective November 13, 2000, RRUN Ventures, Inc. acquired 67% of the
issued and outstanding shares of RAHX, Inc. by issuing 2,814,000 common shares.
Since the transaction resulted in the former shareholders of RAHX, Inc. owning
the majority of the issued shares of RRUN Ventures, Inc., the transaction, which
is referred to as a "reverse take-over", has been treated for accounting
purposes as an acquisition by RAHX, Inc. of the net assets and liabilities of
RRUN Ventures, Inc. Under this purchase method of accounting, the results of
operations of RRUN Ventures, Inc. are included in these consolidated financial
statements from November 13, 2000.
RRUN Ventures Inc. had a net asset deficiency at the acquisition date,
therefore, the 2,814,000 common shares issued on acquisition were issued at an
ascribed value of $Nil with the net asset deficiency of $12,355 charged to
deficit. RAHX, Inc. is deemed to be the purchaser for accounting purposes.
Accordingly, its net assets are included in the consolidated balance sheet at
their previously recorded amounts.
The acquisition is summarized as follows:
Current Assets $ 11,357
Current Liabilities 23,712
-------------
Net Asset Deficiency $ (12,355)
=============
RRUN VENTURES NETWORK INC.
(Formerly United Management, Inc.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2001
(Unaudited)
(Stated in U.S. Dollars)
3. ACQUISITION OF SUBSIDIARY (Continued)
b) Effective August 17, 2001, RRUN Ventures Network Inc. acquired 100% of
the issued and outstanding shares of RRUN Ventures, Inc. by issuing 305,439
common shares. Since the transaction resulted in the former shareholders of
RRUN Ventures, Inc. owning the majority of the issued shares of RRUN Ventures
Network Inc., the transaction, which is referred to as a "reverse take-over",
has been treated for accounting purposes as an acquisition by RRUN Ventures,
Inc. of the net assets and liabilities of RRUN Ventures Network Inc. Under this
purchase method of accounting, the results of operations of RRUN Ventures
Network Inc. are included in these consolidated financial statements from August
17, 2001.
Control of the net assets of RRUN Ventures Network Inc. was acquired for
consideration of $28,631 representing the fair value of the assets of RRUN
Ventures Network Inc. RRUN Ventures, Inc. is deemed to be the purchaser for
accounting purposes. Accordingly, its net assets are included in the balance
sheet at their previously recorded values.
The acquisition is summarized as follows:
Current Assets (cash) $117,541
Current Liabilities (88,910)
-----------
$ 28,631
===========
4. INVESTMENT
Kaph Data Engineering Inc. - 159
common shares representing 15%
of the Company's issued and
outstanding common share capital $ 6,750
===========
5. STOCK OPTION PLAN
The Company has granted stock options for the purchase of up to 600,000 common
shares at $0.10 per share, and up to 518,000 common shares at $0.25 per share.
All expiring on December 1, 2003.
RRUN VENTURES NETWORK INC.
(Formerly United Management, Inc.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2001
(Unaudited)
(Stated in U.S. Dollars)
6. RELATED PARTY TRANSACTION
Loans and advances payable are due to related parties, are interest free, and
have no specific terms of repayment.
Item 2. Management's Discussion and Analysis or Plan of Operations
FORWARD LOOKING STATEMENTS
This report on Form 10-QSB contains certain forward-looking statements within
the meaning of section 21(e) of the Securities Exchange Act of 1934, as amended,
and other applicable securities laws. All statements other than statements of
historical fact are "forward-looking statements" for purposes of these
provisions, including any projections of earnings, revenues, or other financial
items; any statements of the plans, strategies, and objectives of management for
future operation; any statements concerning proposed new products, services, or
developments, any statements regarding future economic conditions or
performance, statements of belief, and any statement of assumptions underlying
any of the foregoing. Such forward-looking statements are subject to inherent
risks and uncertainties, and actual results could differ materially from those
anticipated by the forward-looking statements.
Corporate History
In August 2001, RRUN Ventures, Inc. merged with United Management, Inc. In the
process we changed our name to RRUN Ventures Network, Inc. Also acquired in the
merger was a majority shareholder position in RAHX, Inc., a Nevada Corporation,
which was incorporated in 2000. In September 2001, we co-founded AXXUS
Corporation and subsequently acquired a majority interest in AXXUS Corporation
and RRUN founded RRUN Labs Incorporated and subsequently acquired 100% of the
common stock of RRUN Labs Incorporated, a Delaware Corporation, which was
incorporated in September 2001. At the end of September 2001, there was no
activity in AXXUS Corporation and RRUN Labs Incorporated.
General Overview
Our mission is to seek out and build a network of ventures specializing in
various products and services in the digital technology industry. We will
develop these new businesses through the use of our existing relationships with
content owners, technology firms and our own staff knowledgeable in the areas of
software development, technology, marketing and project management.
Our venture network currently consists of two technology-based business enabling
networks and organizations, RAHX and AXXUS. These two companies combine to
implement our initiatives: 1) the building of an advanced digital media network;
and 2) the building of a new global marketplace that, interconnects consumers
and businesses. The RAHX and AXXUS networks will be built on proprietary
technology that utilizes Peer-2-Peer Distributed Architecture and
4
contain Digital Rights Management Systems and Advanced Integration and
Personalization Software.
Until the Company raises additional capital, the Company's vision for RRUN Labs
Incorporated cannot be fully realized. At the end of October, we were unable
to raise additional capital for the operation of RRUN Labs. We decided to
suspend the operations of RRUN Labs Incorporated until further notice. All RRUN
Labs Incorporated employees have been given a temporary leave of absence. We
incurred significant obligations with regard to our Virginia operations and
certain debts remain outstanding. The Company cannot make any assurances that
the personnel currently contracted by RRUN Labs will continue their contract in
the future should the Company obtain funds necessary to continue the vision of
RRUN Labs Incorporated.
Marketing Plan
Key Objectives
Our marketing strategy will be a key factor in achieving success in its overall
strategic plan. Effectively executing the marketing strategy will help the
Company realize the following objectives:
1. Develop a RAHX.net brand awareness;
2. Build a strong RAHX customer base;
3. Develop RAHX awareness in the file exchange industry; and
4. Complete licensing agreements with P2P media services.
We will execute our marketing strategy for RAHX over three periods. The
marketing strategy covers elements of distribution, promotion, and pricing. The
marketing strategy spans across two years in accordance with the aforementioned
implementation plan. (i.e. our initial implementation is planned over a period
of two phases totaling twenty-four (24) months). During each phase and
subsequent stages the marketing strategy evolves in accordance with development
and distribution of RAHX.
Distribution Strategy
The objectives of the distribution strategy are:
1) To most efficiently execute a rapid and widespread deployment of:
- The RAHX digital file exchange executable software for consumers
- The RAHX platform for licensees
2) To produce and launch the RAHX.com and RAHX.net websites to serve as the
distribution location for the RAHXWARE software product
5
3) To achieve a significant distribution reach through RAHX licensee
customers that would integrate the RAHX plug-in with their browser, and
distribute RAHX to their users through system wide dynamic upgrades.
- Launch of RAHX.com
- Launch of beta version of direct to consumer RAHXWARE software
- Launch of RAHXWARE licensing product
- Continued distribution effort through sales of RAHXWARE licensing
program
Promotion Strategy
The objective of the promotion strategy is to effectively invest promotion and
advertising dollars to attain a critical mass of RAHX users and RAHX enabled
licensees. Within the first year we hope to:
- Develop RAHX brand awareness
- Build a base of loyal RAHX users
- Develop relationships with digital music companies and P2P media
services
- Develop relationships with leading companies in the content
industries, i.e., music, movies, publishing, etc.
The Promotion Strategy is as follows:
- Launch of marketing promotional strategy for RAHX.com
- Launch of marketing promotional strategy for RAHXWARE
- Continued marketing promotional strategy for RAHXWARE and
RAHX.com
- Launch of marketing promotional strategy for RAHXWARE
licensing sales program
- Continued marketing promotional strategy for RAHXWARE and
RAHX.com
- Continued marketing promotional strategy for RAHXWARE licensing
program
RESULTS OF OPERATIONS
We did not earn any revenues during the period ending September 30, 2001. We do
not anticipate earning revenues until such time as the development of our web
site is completed and we commence sales of advertising and RAHXWARE software
subscription fees or per unit music charges. We are presently in the
development stage and we can provide no assurance that we will be successful in
completing development of our software or earning revenues from our software,
web site and related products once development is complete.
6
We incurred operating expenses in the amount of $270,637 for the three months
ended September 30, 2001. These operating expenses were comprised primarily of
professional and consulting fees in the amount of $201,919. We also incurred
office and related expenses in the amount of $14,877 during this period.
We incurred a loss of $266,637 for the three months ended September 30,
2001. Our net loss was attributable entirely to our operating expenses.
FINANCIAL CONDITION
Liquidity and Financial Condition
We had cash of $22,591 as of September 30, 2001.
Management is of the opinion that sufficient short term funding will be
obtained and that current negotiations with potential users of its products
will be successful. If the short term funding is not realized, the company
will be required to scale back its operating activities.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
Recent Sales of Unregistered Securities
-------------------------------------------
In August 2001, we acquired all of RRUN Ventures, Inc. issued and outstanding
shares in exchange for 305,439 common shares of our common stock. Also in August
2001, our former President, Christine Cerisse, acting as an agent on behalf of
various shareholders of our Company, executed a cancellation agreement in which
500,000 common shares which had been previously issued to these shareholders
were cancelled.
During September of 2001, we issued 1,845,000 shares of its previously
authorized, but unissued common stock. The shares were issued to officers and
directors in exchange for the cancellation of debt. The transactions were
valued at $0.02 per share. The transactions were isolated transactions with
persons having a close affiliation with us and were exempt from registration
under the Securities Act of 1933 pursuant to Section 4(2) of the Act.
During September of 2001, we issued 670,000 shares of its previously authorized,
but unissued common stock. The shares were issued to three persons in exchange
for cash. The transactions were valued at $0.02 per share. The transactions
were isolated transactions with persons having a close affiliation with us and
were exempt from registration under the Securities Act of 1933 pursuant to
Section 4(2) of the Act because of not being part of a public
7
offering. The offering was for a limited purpose and did not use the
machinery of public
distribution.
During September of 2001, we issued 200,000 shares of its previously authorized,
but unissued common stock. The shares were issued to one unrelated company in
exchange for consulting services. The transaction was valued at $0.02
per share. The transaction was an isolated transaction with a person having a
close affiliation with us and was exempt from registration under the Securities
Act of 1933 pursuant to Section 4(2) of the Act because of not being part of a
public offering. The offering was for a limited purpose and did not use the
machinery of public distribution.
During September of 2001, we issued 2,544 shares of its previously authorized,
but unissued common stock. The shares were issued to one person in exchange for
the cancellation of debt. The transaction was valued at $1.00 per share. The
transaction was an isolated transaction with a person having a close affiliation
with us and was exempt from registration under the Securities Act of 1933
pursuant to Section 4(2) of the Act because of not being part of a public
offering. The offering was for a limited purpose and did not use the machinery
of public distribution.
During September of 2001, we issued 20,000 shares of its previously authorized,
but unissued common stock. The shares were issued to one person in exchange for
the cancellation of debt. The transactions were valued at $0.75 per share. The
transaction was an isolated transaction with a person having a close affiliation
with us and was exempt from registration under the Securities Act of 1933
pursuant to Section 4(2) of the Act because of not being part of a public
offering. The offering was for a limited purpose and did not use the machinery
of public distribution.
We also issued incentive stock options to the following officers, directors and
consultants.
Optionee Options Granted
-------- ---------------
Ray Hawkins 100,000
Pavel Bains 100,000
Edwin Kwong 100,000
Saya Kyvrikosaios 100,000
Emanuel Koseos 100,000
Other Consultants and employees 781,500
------------
Total # of Options Granted 1,281,500
None of these options has been exercised as of September 30, 2001.
8
These options were issued at various exercise prices between $0.10/share and
$0.75/share.
Seven Hundred and Eighty One Thousand, Five Hundred (781,500) of these options
were awarded to 21 employees and consultants working for RRUN, and Five Hundred
Thousand (500,000) options were awarded to 5 Officers and Directors of RRUN.
We also issued warrants to purchase common stock to consultants and advisors.
The warrants issued as of September 30, 2001 allowed the holders to purchase
1,719,650 shares of our common stock at exercise prices ranging from $0.10 to
$3.00 per share. None of these warrants have been exercised as of September 30,
2001. No warrants were issued to our directors or officers. No warrant holder
received an issuance of warrants to make such warrant holder a 5% or greater
stockholder of the Company.
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
The Board of Directors of United called a special meeting of United Management,
Inc. shareholders on August 17, 2001 to vote to approve the merger and the
merger agreement between United and RRUN Ventures, Inc. There were 788,420
shares outstanding and entitled to vote at the meeting. 464,920 votes were cast
in favor of adoption of the merger and zero votes were cast against adoption.
During such meeting, the Company resolved to change its name from United
Management, Inc. to RRUN Ventures Network, Inc. 415,420 shares were cast in
favor of the adoption of this resolution and zero votes were cast against
adoption. The Company resolved to increase the number of its Directors.
Previously, the Company's Bylaws provided that the Board of Directors shall
consist of between one and five members. The Company resolved that the Board may
consist of a number from one to twelve Directors, as determined, from time to
time by then existing Board of Directors. 415,420 votes were cast in favor of
adoption of this resolution and zero votes were cast against adoption.
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
----------
9
10.1 Cancellation Agreement
21. Subsidiaries of the Registrant
99.1 Risk Factors
(b) Reports on Form 8-K
----------------------
On August 20, 2001 RRUN filed Form 8-K to report the following events occurring
on August 17, 2001: Acquisition of Assets in relation to the merger between
United Management and RRUN, Resignation of Director, Change in Certifying
Accountants, Change in Fiscal Year to December 31 and Change in Corporate Name.
Financial Statements of Business Acquired and Pro forma financial information
were filed with this report.
On September 17, 2001 RRUN filed Form 8-K/A to amend its earlier report to
describe in Item 4 the changes in RRUN's certifying accountant and to attach to
this report a copy of the response from its predecessor accountant.
10
SIGNATURES
In accordance with the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorised.
RRUN Ventures Network, Inc.
Date: November 16, 2001
By: /s/ Ray Hawkins
---------------------------
Ray Hawkins, President
11