1 Document is copied. UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB/A QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended November 30, 2000 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ________________ Commission file number 0-21679 RETURN ASSURED INCORPORATED (Exact name of registrant as specified in its charter) Delaware 13-3896069 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1901 Avenue of the Stars Suite 1710 Los Angeles, California 90067 (Address of principal executive offices) (Zip Code) 887-807-4664 (Registrant's telephone number, including area code) Check 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, and (2) has been subject to such filing requirements for the past 90 days. Yes |X | No | | As of January 18, 2001, there were 9,163,265 shares of the registrant's common stock, par value $0.001 issued and outstanding. 2 RETURN ASSURED INCORPORATED NOVEMBER 30, 2000 QUARTERLY REPORT ON FORM 10-QSB TABLE OF CONTENTS Page Number Special Note Regarding Forward Looking Information ............................................ 2 PART I - FINANCIAL INFORMATION Item 1. Financial Statements .......................................................................... 3 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations....................................................................... 12 Item 3. Quantitative and Qualitative Disclosures About Market Risk..................................... 14 PART II - OTHER INFORMATION Item 1. Legal Proceedings.............................................................................. 15 Item 2. Changes in Securities and Use of Proceeds...................................................... 15 Item 3. Defaults Upon Senior Securities................................................................ 15 Item 4. Submission of Matters to a Vote of Security Holders............................................ 15 Item 5. Other Information.............................................................................. 15 Item 6. Exhibits and Reports on Form 8-K............................................................... 15 References in this report to "we", "us", "our" and similar terms means Return Assured Incorporated, a Delaware corporation, formerly Hertz Technology Group, Inc. 1 3 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS To the extent that the information presented in this Quarterly Report on Form 10-QSB/A for the quarter ended November 30, 2000 discusses financial projections, information or expectations about our products or markets, or otherwise makes statements about future events, such statements are forward-looking. We are making these forward-looking statements in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. These risks and uncertainties are described, among other places in this Quarterly Report, in "Management's Discussion and Analysis of Financial Condition and Results of Operations". In addition, we disclaim any obligations to update any forward-looking statements to reflect events or circumstances after the date of this Quarterly Report. When considering such forward-looking statements, you should keep in mind the risks referenced above and the other cautionary statements in this Quarterly Report. 2 4 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Independent Accountant's Report................................................................. 4 Consolidated Balance Sheet as of November 30, 2000 and August 31, 2000.......................... 5 Consolidated Statements of Operations for the three months ended November 30, 2000 and 1999 ....................................... 6 Consolidated Statement of Shareholders' Equity.................................................. 7 Consolidated Statements of Cash Flows for the three months ended November 30, 2000 and 1999 ....................................... 8 Notes to Consolidated Financial Statements..................................................... 9-11 3 5 INDEPENDENT ACCOUNTANT'S REPORT To the Board of Directors and Shareholders of Return Assured Incorporated We have reviewed the accompanying consolidated balance sheet of Return Assured Incorporated and Subsidiaries as of November 30, 2000, and the related consolidated statements of operations, shareholders' equity, and cash flows for the three-month period then ended. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying consolidated financial statements for them to be in conformity with generally accepted accounting principles. GOLDSTEIN GOLUB KESSLER LLP New York, New York January 8, 2001 4 6 RETURN ASSURED INCORPORATED AND SUBSIDIARIES (formerly A Sure eCommerce, Inc.) CONSOLIDATED BALANCE SHEET ------------------------------------------------------------------------------------------------------------------------------------ November 30, August 31, 2000 2000 ------------------------------------------------------------------------------------------------------------------------------------ (unaudited) ASSETS Current: Cash $ 337,493 $ 132,107 Cash in Escrow 3,750,000 Accounts receivable (net of allowance for doubtful accounts of $54,525 as of November 30, 2000) 980,793 37,759 Inventory (Note 2) 472,686 Prepaid expenses 547,933 270,599 ------------------------------------------------------------------------------------------------------------------------------------ Total current assets 6,088,905 440,465 Goodwill (net of accumulated amortization of $25,090) 2,985,651 Property and Equipment (net of accumulated depreciation of $880,966 and $16,817, respectively) 1,104,922 97,036 Debt Discount 354,800 ------------------------------------------------------------------------------------------------------------------------------------ Total Assets $10,179,478 $ 892,301 ==================================================================================================================================== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable and accrued liabilities $ 867,498 $ 346,166 Current portion of capital lease obligations 64,403 ------------------------------------------------------------------------------------------------------------------------------------ Total current liabilities 931,901 346,166 Capital Lease Obligation, net of current portion 180,939 Notes Payable 290,000 200,000 ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 1,402,840 546,166 ------------------------------------------------------------------------------------------------------------------------------------ Redeemable preferred stock Series A, stated value $1,000, authorized 6,000 Shares, issued and outstanding 4950 shares 4,950,000 -- ------------------------------------------------------------------------------------------------------------------------------------ Common Shareholders' Equity: Common stock - $0.001 par value; authorized 100,000,000 shares, issued and outstanding 7,183,604 and 4,695,685, respectively 7,184 4,696 Additional paid-in capital 9,100,016 3,507,316 Deferred offering costs -- (843,361) Accumulated other comprehensive income 503 503 Accumulated deficit (5,281,065) (2,323,019) ------------------------------------------------------------------------------------------------------------------------------------ Total Common Shareholders' Equity 3,826,638 346,135 ------------------------------------------------------------------------------------------------------------------------------------ Total Liabilities and Shareholders' Equity $10,179,478 $ 892,301 ==================================================================================================================================== See Notes to Consolidated Financial Statements 5 7 RETURN ASSURED INCORPORATED AND SUBSIDIARIES (formerly A Sure eCommerce, Inc.) CONSOLIDATED STATEMENT OF OPERATIONS ------------------------------------------------------------------------------------------------------------------------------------ Three months ended November 30, 2000 1999 ------------------------------------------------------------------------------------------------------------------------------------ (unaudited) Sales $ 778,299 Cost of sales 458,803 ------------------------------------------------------------------------------------------------------------------------------------ Margin 319,496 ------------------------------------------------------------------------------------------------------------------------------------ General and administrative expenses: Wages and salaries 1,053,692 $ 35,103 Professional fees 100,922 10,133 Development costs Insurance 18,483 Financing fees 506,000 Travel and promotion 73,047 Consulting fees 187,217 Rent 17,529 4,493 Office and miscellaneous 302,138 11,363 Internet service and web design 40,251 2,943 Telephone 25,422 774 Loan receivable write-off Interest and finance charges 85,430 (1,128) Depreciation and amortization 173,061 2,905 ------------------------------------------------------------------------------------------------------------------------------------ Net loss (2,263,696) (66,586) Value of warrants issued in connection with preferred stock (669,350) Preferred stock issuance costs (25,000) ------------------------------------------------------------------------------------------------------------------------------------ Net loss attributable to common shareholders $(2,958,046) $(66,586) ==================================================================================================================================== Net loss per share - basic and diluted $ (0.50) N/A ==================================================================================================================================== Weighted average number of shares 5,927,638 90 ==================================================================================================================================== See Notes to Consolidated Financial Statements 6 8 RETURN ASSURED INCORPORATED AND SUBSIDIARIES (formerly A Sure eCommerce, Inc.) CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY ----------------------------------------------------------------------------------------------------------------------------------- Common Shares and Paid in Capital in Additional Excess of $0.001 Par Value Paid-in Accumulated Number Amount Capital Deficit ----------------------------------------------------------------------------------------------------------------------------------- Issuance of common stock: For cash: Initial shares 90 $ 1 Subscriptions received Exchange loss Net loss $ (61,713) ----------------------------------------------------------------------------------------------------------------------------------- Balance at August 31, 1999 90 1 (61,713) Common Stock: Private placement 1,445,685 1,446 $ 1,054,864 Shares issued for offering costs: For going public 340,000 340 485,860 For private placement 200,000 200 285,800 For bridge financing 200,000 200 285,800 Value of warrants issued in connection with bridge financing 68,800 Value of warrants issued in connection with going public 233,726 Shares issued to founders' and other employees and consultants and recapitalization 2,095,000 2,095 885,381 Cancellation of original shares (90) (1) Financing fees 415,000 415 207,085 Exchange gain Net loss 3,507,316 (2,261,306) ----------------------------------------------------------------------------------------------------------------------------------- Balance at August 31, 2000 4,695,685 4,696 3,507,316 (2,323,019) Unaudited: Exercise warrants for cash 100,000 100 199,900 Issuance of warrants for financing fee 100,000 100 199,900 Issued as consequence of merger 2,353,304 2,353 4,704,225 Classification of stock, warrants and professional fees as costs of merger 843,361 Repurchase of common stock (115,385) (115) (230,655) Issued on conversion of preferred stock 50,000 50 49,950 Value of warrants attached to preferred stock 669,350 (669,350) Preferred stock issuance costs (25,000) Net loss (2,263,696) ----------------------------------------------------------------------------------------------------------------------------------- Balance November 30, 2000 7,183,604 $7,184 $ 9,100,016 $(5,281,065) =================================================================================================================================== ---------------------------------------------------------------------------------------------------------------------------- Total Comprehensive Deferred Shareholders' Income Offering Subscriptions Equity (Loss) Costs Received (Deficiency) --------------------------------------------------------------------------------------------------------------------------- Issuance of common stock: For cash: Initial shares $ 1 Subscriptions received $ 35,426 35,426 Exchange loss $(33) (33) Net loss (61,713) -------------------------------------------------------------------------------------------------------------------------- Balance at August 31, 1999 (33) 35,426 (26,319) Common Stock: Private placement 1,056,310 Shares issued for offering costs: For going public (486,200) For private placement 286,000 For bridge financing 286,000 Value of warrants issued in connection with going public (233,726) Value of warrants issued in connection with bridge financing 68,800 Shares issued to founders' and other employees and consultants and recapitalization (35,426) 852,050 Cancellation of original shares (1) Legal fees incurred in connection with placement (123,435) (123,435) Financing fees 207,500 Exchange gain 536 536 Net loss (2,261,306) ---------------------------------------------------------------------------------------------------------------------------- Balance at August 31, 2000 503 (843,361) 346,135 Unaudited: Exercise warrants for cash 200,000 Issuance of warrants for financing fee 200,000 Issued as consequence of merger 4,706,608 Classification of stock, warrants and professional fees as costs of merger 843,361 843,361 Repurchase of common stock (230,770) Issued on conversion of preferred stock 50,000 Value of warrants attached to preferred stock Preferred stock issuance costs (25,000) Net loss (2,263,606) -------------------------------------------------------------------------------------------------------------------------- Balance November 30, 2000 $503 $ - 0 - $ - 0 - $ 3,826,638 ========================================================================================================================== See Notes to Consolidated Financial Statements 7 9 RETURN ASSURED INCORPORATED (formerly A Sure eCommerce, Inc.) CONSOLIDATED STATEMENT OF CASH FLOWS ------------------------------------------------------------------------------------------------------------------------------------ Three months ended November 30, 2000 1999 ------------------------------------------------------------------------------------------------------------------------------------ (unaudited) Operating activities: Net loss $(2,263,696) $ (66,586) Items not involving cash: Depreciation and amortization 206,161 2,905 Compensation charge for excess of fair value given in share re-purchase 494,230 Services rendered in exchange for shares and subscriptions 486,000 Loss on abandonment of assets 82,429 Non cash interest expense 68,800 Changes in operating assets and liabilities: Accounts receivable (247,309) (23,388) Inventory (38,591) Prepaid expenses 40,989 (9,605) Accounts payable and accrued liabilities 381,189 (502) ------------------------------------------------------------------------------------------------------------------------------------ Net cash (used by) operating activities (789,798) (116,793) ------------------------------------------------------------------------------------------------------------------------------------ Investing activities: Acquisition of property and equipment (16,652) (69,894) Net cash received on merger 249,492 ------------------------------------------------------------------------------------------------------------------------------------ Net cash used in investing activities 232,840 (69,894) ------------------------------------------------------------------------------------------------------------------------------------ Financing activities: Capital lease payments (52,656) 198,427 Deferred offering costs Payment of notes payable (200,000) Issuance of common stock (cash) 200,000 Repurchase of common stock (435,000) Issuance of preferred stock 5,000,000 ------------------------------------------------------------------------------------------------------------------------------------ Net cash provided by financing activities 4,512,344 198,427 ------------------------------------------------------------------------------------------------------------------------------------ Inflow of cash 3,955,386 11,740 Cash, beginning of period 132,107 2,674 ------------------------------------------------------------------------------------------------------------------------------------ Cash, end of period $ 4,087,493 $ 14,414 ==================================================================================================================================== See Notes to Consolidated Financial Statements 8 10 RETURN ASSURED INCORPORATED AND SUBSIDIARIES (Formerly A Sure eCommerce, Inc.) NOTES TO FINANCIAL STATEMENTS 1. BASIS OF PRESENTATION, ORGANIZATION AND NATURE OF OPERATIONS The accompanying consolidated financial statements are unaudited and in the opinion of management reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation in accordance with generally accepted accounting principles and with the instructions to Form 10-QSB. Operating results for the three month period ended November 30, 2000 are not necessarily indicative of the results that may be expected for the fiscal year ended August 31, 2001. For further information refer to the annual financial statements of Return Assured Incorporated and Hertz Technology Group Inc. included in the 10-KSB/A report previously filed. Return Assured Incorporated (the "Company") was incorporated under the laws of the State of Nevada on June 10, 1999. The Company was deemed to be in the development stage as more fully defined in Statement No. 7 of the Financial Accounting Standards Board Through the period ended August 31, 2000. The Company intends to provide a service that will guarantee customers who order products through the web sites of merchant members will get the product and that the merchant member will honour its stated return policies. On October 13, 2000 the Company, through a reverse triangular merger, became the accounting parent company and the legal subsidiary of Hertz Technology Group Inc. ("Hertz") Hertz subsequently was renamed Return Assured Incorporated , a Delaware corporation. As a result the former subsidiaries of Hertz have become wholly owned subsidiaries. The Consolidated Financial Statements now include the following Companies, Return Assured Incorporated (Delaware), Return Assured Incorporated (Nevada), Hertz Computer Corporation, Hergo Ergonomic Support Systems Inc., Remote IT.com, Inc. and Edutec Computer Education Institute, Inc. The merger has been accounted for as a purchase with resulting goodwill amounting to approximately $3,011,000. The consolidated Statements of Operations include the operations of Hertz and it's subsidiaries since the date of the merger. 9 11 RETURN ASSURED INCORPORATED AND SUBSIDIARIES (Formerly A Sure eCommerce, Inc.) NOTES TO FINANCIAL STATEMENTS The following pro forma information assumes the acquisition had occurred at the beginning of the periods presented: Three Months Ended November 30, November 30, 2000 1999 ----- ---- Sales $1,390,707 $1,579,448 Net Loss (2,549,191) (407,979) Loss per share - basic and diluted $ 0.37 $ 0.19 Weighted average number of shares outstanding 6,914,373 2,129,173 The operations have ceased in Hertz Computer Corporation during the previous fiscal year and in Edutec subsequent to the end of the current quarter. The Company records revenue on its web seal of approval products when websites that use the web seal of approval generate sales. The Company records the appropriate percentage, based on the customer contract, of the customer-based retail sale as revenue. 2. INVENTORY As at November 30, 2000 inventory consists of: Raw materials $ 55,787 Work in progress 154,975 Finished goods 261,924 ------------------- $472,686 =================== 3. SEGMENT INFORMATION Financial Technology Services Hergo Group Corporate Consolidated Assets $ 496,826 $2,600,015 $ 361,244 $ 6,721,393 $10,179,478 Sales (unaffiliated) 778,299 778,299 Loss Before Tax (955,166) (53,032) (245,992) (1,703,856) (2,958,046) 10 12 RETURN ASSURED INCORPORATED AND SUBSIDIARIES (Formerly A Sure eCommerce, Inc.) NOTES TO FINANCIAL STATEMENTS 4. CAPITAL TRANSACTIONS The Company completed a financing of Series A Convertible Preferred Stock at the same time as the merger. The preferred shares carry a dividend of 1% and are convertible at the lesser of the average three lowest Per Share Market Value Prices for the previous 45 day period preceding the conversion date or $3.00. Per Share Market Price is defined as the closing bid prices of the company's common shares. Based on the market value of the Company's common stock on the date the preferred stock was issued, there was no beneficial conversion feature on the Series A Preferred Stock. The Company has placed in Escrow 8,267,195 common shares to facilitate conversion of the preference shares as at November 30, 2000 the holder of the preferred shares had converted $50,000 of preference shares into 50,000 common shares. This transaction occurred effective November 28, 2000. 5. CASH IN ESCROW "Cash in escrow" denotes cash being held by non-bank third parties (i.e. with an attorney). These amounts are not considered restricted because these funds are subject to withdrawal by the Company at the Company's option. 11 13 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis should be read in conjunction with the Financial Statements and Notes thereto appearing elsewhere in this Quarterly Report. Certain statements in this Quarterly Report, which are not statements of historical fact, are forward-looking statements. See "Special Note Regarding Forward-Looking Information" on Page 3. General The Merger We recently closed the business combination of our Return Assured business and Hertz Technology Group business. On October 13, 2000 Asure Acquisition Corp., a wholly-owned subsidiary of Hertz Technology Group, Inc., a Delaware Corporation, was merged into Return Assured Incorporated, a Nevada Corporation. At the same Hertz Technology Group changed its name to Return Assured Incorporated. As a result of this merger Return Assured Incorporated (Nevada) became the predecessor for accounting purposes. The Consolidated Financial Statements now include the following companies, Return Assured Incorporated (Delaware), Hergo Ergonomic Support Systems Inc., Return Assured Incorporated (Nevada), Hertz Computer Corporation, Remote IT.com, Inc. and Edutec Computer Education Institute, Inc. Subsequent to the merger we operate in three areas, our financial services area comprising the Return Assured Business of its "Web Seal of Approval" and related services, the Hergo Group which is comprised of Hergo Ergonomic Support Systems Inc. and the Technology Group comprised of Remote IT Inc. and Hertz Computer Corporation and Edutec Computer Education Institute Inc. Hertz Computer Corporation ceased manufacturing in the later part of Fiscal (August 31, 2000) 2000 and Edutec ceased active operations in December with the surrender of the Varick Street Lease. The financial statements only include the Hertz operations from October 13, 2000, the date of the merger, to November 30, 2000. 12 14 Plan of Operations At the completion of the merger we also completed a financing in the amount of $5,000,000 through the issuance of 5,000 convertible preferred shares. As a result of the financing we expects that we will have sufficient cash resources to fund all of our proposed operations for the next 12 months. We have recently commenced our Return Assured operations and have not generated any revenues since inception in June 1999 through August 31, 2000. Our Return Assured operations have consisted of: - determining the feasibility and potential market acceptance of our web seal service; - developing the infrastructure to deliver and monitor our web seal service; - structuring our cyber insurance policy with Lloyd's of London; - pursuing our marketing strategy by forming strategic relationships with web portals; - raising capital to finance our business plan; and - assembling our management team. Most of our expenses through November 30, 2000 have been: - $ 2,156,663 wages and salaries; - $ 685,022 in professional and consulting fees; and - $ 717,919 financing fees. Of the approximately $ 5.2 million in aggregate net losses since inception, these wages and consulting fees are approximately $2.8 million. Of this $2.8 million, approximately $1.5 million is attributed to wages and fees paid in our common stock. The results of our acquired businesses "The Hertz Companies" are essentially divided into two operating Segments: Technology and Hergo. The Company is commencing operations in our financial services segment with the Return Assured Seal of Approval discussed in more detail elsewhere in this Form 10-QSB. Discussions which follow as they relate to Technology and Hergo segments relate to the period prior to acquisition and the financial statements included herein include only the results from October 13, 2000, the merger date, through November 30, 2000. The Hergo division is impacted generally by the expansion and re-equipping of offices; its lines of business encompass office furniture and computer racking. The business has been favourably impacted by the general level of economic activity and especially in the IT business which utilise our products. We anticipate a general softening in the Technology division. The cause is a reduction in internet expansion which we expect may also affect the launch of the Seal of Approval by the Financial Services segment. Liquidity And Capital Resources - In October 2000, we raised $5,000,000 from the sale of our Series A convertible preferred stock. After giving effect to the merger, the sale of our Series A preferred stock and the redemption of Eli Hertz' common stock, we had, as of November 30, 2000, approximately: - $ 4,087,493 in cash; and - $ 5,157,004 in working capital. A significant portion of our working capital will be used to launch our web seal operations which we anticipate will start to generate cash flow. If cash flow from operations is not sufficient to meet our operating expenses, we may require additional funding over the next twelve months. Should this not materialize on favorable terms, we may be forced to curtail our plans and spending. We expect our capital expenditures will increase significantly in the future as we make technological improvements to our system and technical infrastructure. We anticipate that we will spend at least $250,000 on developing automated business processes and tools to carry out our business plan and streamline systems that have already been developed. Additionally, we will continue to evaluate possible investments in complementary businesses, products and technologies, and plan to conduct aggressive brand promotions. We believe that our current cash will be sufficient to meet our anticipated cash needs for working capital and capital expenditures for at least the next twelve months. If cash generated from operations is insufficient to satisfy our liquidity requirements, we may seek to sell additional equity or debt securities or to obtain a credit facility. The sale of additional equity or convertible debt securities could result in additional dilution to our stockholders. If we issue debt securities, our fixed obligations will increase and we may become subject to covenants that would restrict our operations. Such financing may not be available in amounts or on terms acceptable to us, if at all. Our current expenditures amount to $150,000 to $200,000 per month in the financial services division without considering major purchases or significant expenditures. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not Applicable. 13 15 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS None. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS On December 15, 2000, we entered into a Program Promotion Agreement with Plasma Net Inc., the provider of FreeLotto.com. a free online sweepstakes. Under the Agreement, PlasmaNet and Return Assured will create promotional programs enhanced by FreeLotto's relationship with its approximate 12,000,000 registered users. Under the programs, FreeLotto members that opt in , will have their contact information forwarded to us in real time for the purpose of new membership / database relationship management. In exchange for the above-mentioned membership generation, we will at the end of each calendar week, issue $6.00 worth of our common stock to PlasmaNet for each new member referred by us for that week. We have delivered into escrow 1,400,000 shares of common stock. Of the 1,400,000 shares in escrow, 542,066 shares have been delivered to PlasmaNet for the first 200,000 registrations, which shares will be returned to us if the program fails to result in 200,000 registrations. These securities were sold under the exemptions from registration provided by Section 4(2) of the Securities Act. Neither we nor any person acting on our behalf offered or sold the securities by means of any form of general solicitation or general advertising. PlasmaNet, Inc. represented in writing that it acquired the securities for its own account. A legend was placed on the certificates stating that the securities have not been registered under the Securities Act and cannot be sold or otherwise transferred without an effective registration or an applicable exemption. The holder of our outstanding Series A Preferred Stock converted a portion of such preferred stock. On November 11, 2000, it converted $50,000 worth of the preferred stock for 50,000 shares of common stock. On January 17, 2001, it converted $125,000 worth of the preferred stock for 529,661 shares of common stock. These shares of common stock were delivered from escrow to the holder upon conversion under the exemption from registration provided by Section 4(2) of the Securities Act. Of the $175,000 worth of preferred stock converted by the holder, $13,252 was accrued dividends and the difference reduced the amount of preferred stock by $161,748. ITEM 3. DEFAULTS IN SENIOR SECURITIES None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. ITEM 5. OTHER INFORMATION None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits. (b) Reports on Form 8-K. We have filed a Current Report on Form 8-K on January 12, 2001 disclosing the agreement with PlasmaNet Inc. 14 16 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. RETURN ASSURED INCORPORATED Dated: October 2, 2001 By: /s/ Matthew Sebal ------------------------------- Matthew Sebal President and Chief Executive Officer Dated: October 2, 2001 By: /s/ Barry Goldsammler ------------------------------- Barry Goldsammler Chief Financial Officer Dated: October 2, 2001 By: /s/ Michael Sweatman ------------------------------- Michael Sweatman Chief Accounting Officer