UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: September 30, 2002
Commission file number: 000-33151
VOYAGER ENTERTAINMENT INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
North Dakota 45-0420093
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4483 West Reno Avenue
Las Vegas, Nevada 89118
(Address of principal executive offices (zip code)
(702) 221-8070
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the last 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 ____
As of November 13, 2002, there were 37,672,500 shares of common stock
outstanding, which does not include 5,000 shares that have been paid for but
not issued.
VOYAGER ENTERTAINMENT INTERNATIONAL, INC. AND SUBSIDIARIES
CONTENTS
PART I - FINANCIAL INFORMATION
Page No.
Item 1. Consolidated Financial Statements (Unaudited):
Consolidated Balance Sheets 1
Consolidated Statements of Operations (Unaudited) 2
Consolidated Statement of Stockholders' Deficit (Unaudited) 3-5
Consolidated Statements of Cash Flows (Unaudited) 6
Notes to Consolidated Financial Statements 7-14
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 15-19
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 20
Item 2. Changes in Securities 20
Item 3. Defaults by the Company upon its
Senior Securities 21
Item 4. Submission of Matter to a Vote of
Security Holders 21
Item 5. Other Information 21
Item 6. Exhibits and Reports on Form 8-K 22
SIGNATURES 23
CERTIFICATION OF PRESIDENT AND CHIEF FINANCIAL OFFICER 24
VOYAGER ENTERTAINMENT INTERNATIONAL, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
September December
30, 31, 2001
2002
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 7,868 $ 256
Due from related party 4,162
Prepaid expenses and other current assets 267
----------- -----------
Total current assets 12,030 523
Property and equipment, net of accumulated
depreciation of $392 5,325
Deferred offering cost 100,000
----------- -----------
$ 117,355 $ 523
=========== ===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable and accrued expenses $ 404,690 $ 110,000
Due to related parties 44,148
----------- -----------
Total liabilities 404,690 154,148
----------- -----------
Stockholders' equity (deficit)
Convertible preferred stock; $.001 par value;
25,000,000 shares authorized; 1,500,000
shares of Series A
Issued and outstanding 1,500
Common stock; $.001 par value; 100,000,000
shares authorized; 37,077,500 and 15,000,000
shares issued and outstanding, respectively 37,077 15,000
Additional paid-in-capital 19,115,956 20,000
Deferred construction costs (18,141,533)
Deficit accumulated during development stage (1,300,335) (188,625)
----------- -----------
Total stockholders' deficit (287,335) (153,625)
----------- -----------
Total liabilities and stockholders'
deficit $ 117,355 $ 523
=========== ===========
The accompanying notes are an integral part of the consolidated financial
statements.
VOYAGER ENTERTAINMENT INTERNATIONAL, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
For the
For the For the period from
Three Months Ended Nine Months Ended inception
September 30, September 30, (March 1,
1997) to
September
30,
2002 2001 2002 2001 2002
Net revenue $ 0 $ 0 $ 0 $ 0 $ 0
Operating
expenses:
Project
costs 11,304 35,871 83,607
Professional
and
consulting
fees 269,752 803,331 927,720
Other
operating
expenses 16,521 282 72,508 482 89,008
Stock
discount
expense 200,000 200,000
---------- ---------- ----------- --------- -----------
Total
operating
expenses 297,577 282 1,111,710 482 1,300,335
---------- ---------- ------------ --------- -----------
Net loss $(297,577) $ (282) $(1,111,710) $ (482) $(1,300,335)
========== ========== =========== ========= ============
Basic and
diluted loss
per common
share $ (0.01) $ (0.00) $ (0.03) $ (0.00)
========== ========== =========== =========
Basic and
diluted
weighted
average
shares of
common stock 37,077,500 15,000,000 32,778,663 15,000,000
========== ========== =========== =========
The accompanying notes are an integral part of the consolidated financial
statements.
VOYAGER ENTERTAINMENT INTERNATIONAL, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT (UNAUDITED)
FOR THE PERIOD FROM INCEPTION (MARCH 1, 1997) TO SEPTEMBER 30, 2002
Preferred Stock Common Stock
Shares Amount Shares Amount
Balance at inception -
March 1,
1997
(as restated for
reorganization) 1,500,000 $ 1,500 - $ -
Conversion of preferred
stock to common stock (1,500,000) (1,500) 15,000,000 15,000
Net loss for the year
ended
December 31, 1997 - - - -
----------- ---------- ---------- ---------
Balance at December 31,
1997 - - 15,000,000 15,000
Net loss for the year
ended
December 31, 1998 - - - -
----------- ---------- ---------- ---------
Balance at December 31,
1998 - - 15,000,000 15,000
Net loss for the year
ended
December 31, 1999 - - - -
----------- ---------- ---------- ---------
Balance at December 31,
1999 - - 15,000,000 15,000
Net loss for the year
ended
December 31, 2000 - - - -
----------- ---------- ---------- ---------
VOYAGER ENTERTAINMENT INTERNATIONAL, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT (UNAUDITED)
FOR THE PERIOD FROM INCEPTION (MARCH 1, 1997) TO SEPTEMBER 30, 2002
CONTINUED
Deficit
Accumulated Total
Additional Deferred During the Stockholders'
Paid-in construction Development Equity
Capital costs Stage (Deficiency)
Balance at inception -
March 1,
1997
(as restated for
reorganization) $ 35,000 $ - $ - $ 36,500
Conversion of preferred
stock to common stock (15,000) (1,500)
Net loss for the year
ended
December 31, 1997 - - (34,361) (34,361)
--------- ---------- ---------- ---------
Balance at December 31,
1997 20,000 - (34,361) 639
Net loss for the year
ended
December 31, 1998 - - (11,121) (11,121)
--------- ---------- ---------- ---------
Balance at December 31,
1998 20,000 - (45,482) (10,482)
Net loss for the year
ended
December 31, 1999 - - (3,428) (3,428)
--------- ---------- ---------- ---------
Balance at December 31,
1999 20,000 - (48,910) (13,910)
Net loss for the year
ended
December 31, 2000 - - (38,283) (38,283)
--------- ---------- ---------- ---------
The accompanying notes are an integral part of the consolidated financial
statements.
VOYAGER ENTERTAINMENT INTERNATIONAL, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT (UNAUDITED) (CONTINUED)
FOR THE PERIOD FROM INCEPTION (MARCH 1, 1997) TO SEPTEMBER 30, 2002
Preferred Stock Common Stock
Shares Amount Shares Amount
Balance at December 31, 2000 - $ - 15,000,000 $ 15,000
Net loss for the year ended
December 31, 2001 - - - -
--------- -------- ---------- ---------
Balance at December 31, 2001 - - 15,000,000 15,000
Issuance of stock for cash and
services (pre-merger) 2,160,000 2,160 - -
Conversion of preferred stock to
common stock (660,000) (660) 6,600,000 6,600
Acquisition of net assets of
Dakota - - 11,615,000 11,615
Issuance of common stock for
cash - February 15, 2002 - - 800,000 800
Issuance of common stock for
services - April 2002 - - 200,000 200
VOYAGER ENTERTAINMENT INTERNATIONAL, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT (UNAUDITED) (CONTINUED)
FOR THE PERIOD FROM INCEPTION (MARCH 1, 1997) TO SEPTEMBER 30, 2002
CONTINUED
Deficit
Accumulated Total
Additional Deferred During the Stockholders'
Paid-in constructionDevelopment Equity
Capital costs Stage (Deficiency)
Balance at December 31,
2000 $ 20,000 $ - $ (87,193) $ (52,193)
Net loss for the year
ended
December 31, 2001 - - (101,432) (101,432)
--------- ---------- ---------- ---------
Balance at December 31,
2001 20,000 - (188,625) (153,625)
Issuance of stock for
cash and
services (pre-merger) 25,840 - - 28,000
Conversion of preferred
stock to common stock (5,940) -
Acquisition of net assets
of Dakota (11,615) - - -
Issuance of common stock
for cash - February 15,
2002 399,200 - - 400,000
Issuance of common stock
for services - April 2002 399,800 - - 400,000
The accompanying notes are an integral part of the consolidated financial
statements.
VOYAGER ENTERTAINMENT INTERNATIONAL, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT (UNAUDITED) (CONTINUED)
FOR THE PERIOD FROM INCEPTION (MARCH 1, 1997) TO SEPTEMBER 30, 2002
Preferred Stock Common Stock
Shares Amount Shares Amount
Issuance of common stock for
Architectural agreement - May
2002 - $ - 2,812,500 $ 2,812
Issuance of common stock for
cash - June 2002 - - 50,000 50
Net loss for the nine months
ended
September 30, 2002 - - - -
--------- -------- ---------- ---------
Balance at September 30, 2002 1,500,000 $1,500 37,077,500 $37,077
========= ======== ========== =========
VOYAGER ENTERTAINMENT INTERNATIONAL, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT (UNAUDITED) (CONTINUED)
FOR THE PERIOD FROM INCEPTION (MARCH 1, 1997) TO SEPTEMBER 30, 2002
CONTINUED
Deficit
Accumulated Total
Additional Deferred During the Stockholders'
Paid-in construction Development Equity
Capital costs Stage (Deficiency)
Issuance of common
stock for
Architectural
agreement - May
2002 $18,138,722 $(18,141,533) $ - $ -
Issuance of common
stock for cash -
June 2002 149,950 - - 150,000
Net loss for the
nine months ended
September 30, 2002 - - (1,111,710) (1,111,710)
----------- ------------- ------------ -----------
Balance at
September 30, 2002 $19,115,956 $(18,141,533) $(1,300,335) $(287,335)
=========== ============= ============ ===========
The accompanying notes are an integral part of the consolidated financial
statements.
VOYAGER ENTERTAINMENT INTERNATIONAL, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Period
From Inception
(March 1,
Nine Months 1997) to
Ended September 30, September 30,
2002 2001 2002
Cash flows provided by (used for)
operating activities:
Net loss $ (1,111,710) $ (482) $ (1,300,335)
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation 392 - 392
Issuance of common stock for
services 218,000 - 218,000
Stock discount expense 200,000 - 200,000
Changes in assets and liabilities:
(Increase) decrease in assets:
Prepaid expenses 267 - -
Increase (decrease) in liabilities
Accounts payable and accrued
expenses 294,690 - 404,690
------------- ------- --------------
Net cash used for operating
activities (398,361) (482) (477,253)
------------- ------- --------------
Cash flows used for investing
activities -
payments to acquire property and
equipment (5,717) (5,717)
------------- ------- --------------
Cash flows provided by (used for)
financing activities:
Proceeds from sale of common stock
560,000 - 595,000
Deferred offering cost (100,000) - (100,000)
Due to related party (44,148) - -
Due from related party (4,162) 213 (4,162)
------------- ------- --------------
Net cash provided by financing
activities 411,690 213 490,838
------------- ------- --------------
Net increase (decrease) in cash and
cash equivalents 7,612 (269) 7,868
Cash and cash equivalents, beginning
of period 256 369 -
------------- ------- --------------
Cash and cash equivalents, end of
period $ 7,868 $ 100 $ 7,868
============= ======= ==============
Cash paid during the period for:
Interest expense $ - $ - $ -
Income taxes $ - $ - $ -
Non-cash financing activity:
During the nine months ending September 30, 2002, the Company issued shares
of common and preferred stock for services, totaling $218,000 and recognized
a stock discount expense for $200,000 (see Note 4).
The accompanying notes are an integral part of the consolidated financial
statements.
VOYAGER ENTERTAINMENT INTERNATIONAL, INC.
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE PERIOD FROM INCEPTION (MARCH 1, 1997) TO SEPTEMBER 30, 2002
(1) Summary of Significant Accounting Policies:
Basis of Presentation:
The accompanying consolidated financial statements have been
prepared in accordance with accounting principles generally
accepted in the United States of America for interim financial
information and with the instructions to Form 10-QSB and Regulation
S-B. Accordingly, they do not include all of the information and
footnotes required by accounting principles generally accepted in
the United States of America for complete financial statements. In
the opinion of management, all adjustments (consisting only of
normal recurring adjustments) considered necessary for a fair
presentation have been included.
For further information, refer to the financial statements and
footnotes included in Form 10-KSB for the year ended October 31,
2001 and form 8K/A filed on March 4, 2002.
The results of operations for the nine months ending September 30,
2002 are not necessarily indicative of the results to be expected
for the year ending December 31, 2002.
The accompanying consolidated financial statements include the
accounts of Voyager Entertainment International, Inc. (the
"Company"), formerly known as Dakota Imaging, Inc., ("Dakota"),
incorporated under the laws of the state of North Dakota on January
31, 1991 and its subsidiaries:
a) Voyager Ventures, Inc. ("Ventures"), incorporated under the laws of the
State of Nevada on January 15, 2002 (owned 100% by the Company);
b) Outland Development, LLC ("Outland"), a limited liability company formed
under the laws of the State of Nevada on March 1, 1997(owned 100% by
Ventures); and
c) Voyager Entertainment Holdings, Inc. ("Holdings"), incorporated under
the laws of the State of Nevada on May 2, 2002 (owned 100% by the Company).
The Company is currently a development stage enterprise reporting
under the provisions of Statement of Financial Accounting Standards
("SFAS") No. 7.
Dakota entered into an agreement and Plan of Merger (the
"Agreement"), dated as of February 1, 2002, with Ventures and
Dakota Subsidiary Corp. ("DSC"), an inactive Nevada corporation.
The agreement became effective February 8, 2002, when Ventures (the
accounting acquirer) completed a reverse triangular merger
("Merger") between DSC and Dakota (the legal acquirer), whereby
Dakota issued 3,660,000 shares of its Series A convertible
preferred stock in exchange for 100% of Venture's outstanding
common stock. Pursuant to the terms of the merger, Ventures merged
with DSC wherein DSC ceased to exist and Ventures became a wholly
owned subsidiary of Dakota.
Concurrent with the closing of the Merger:
a) Dakota cancelled 47,000,000 shares (9,400,000 shares prior to 5 for 1
forward split) held by certain shareholders of Dakota in exchange for certain
assets and liabilities of Dakota; and
b) The Company issued 21,600,000 shares of its common stock for the
conversion of 2,160,000 shares of the Series A convertible preferred stock
issued.
As a result of the Merger, Venture's former shareholders obtained
control of Dakota through their ownership interest in the Series A
preferred stock held and converted. Therefore, this acquisition
has been treated as a recapitalization of Ventures for accounting
purposes and, accordingly, its financial position and results of
operations have been presented for the periods preceding the
Merger.
During April 2002, the Company changed its name from Dakota
Imaging, Inc. to Voyager Entertainment International, Inc. and its
fiscal year-end from October 31 to December 31.
The Company has limited operations and is still in the development
stage. The Company will need to raise a substantial amount of
capital in order to continue its business plan. This situation
raises substantial doubt about its ability to continue as a going
concern. The accompanying consolidated financial statements do not
include any adjustments relative to the recoverability and
classification of asset carrying amounts or the amount and
classification of liabilities that might result from the outcome of
this uncertainty. Management is currently initiating their
business plan and in the process raising additional capital.
Line of Business:
The Company is in the entertainment development business and is
planning the development of two of the world's tallest Ferris
Wheels, one on the Las Vegas Strip and the other in Shanghai,
China.
Use of Estimates:
The preparation of financial statements, in conformity with
accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ
from those estimates.
Deferred Offering Costs
Deferred offering costs consist of costs incurred to raise debt
to finance its Voyager project. These costs will be amortized
over the weighted term of the debt securities using the interest
method.
Recent Accounting Pronouncements:
On June 29, 2001, SFAS No. 141, "Business Combinations," was
approved by the FASB, which requires that the purchase method of
accounting be used for all business combinations initiated after
June 30, 2001. Goodwill and certain intangible assets will remain
on the balance sheet and not be amortized. On an annual basis, and
when there is reason to suspect that their values have been
diminished or impaired, these assets must be tested for impairment,
and write-downs may be necessary. The Company has implemented this
pronouncement and has concluded that the adoption has no material
impact to the financial statements.
On June 29, 2001, SFAS No. 142, "Goodwill and Other Intangible
Assets", was approved by the FASB, which changes the accounting for
goodwill from an amortization method to an impairment-only
approach. Amortization of goodwill, including goodwill recorded in
past business combinations, will cease upon adoption of this
statement. The Company has implemented this pronouncement and has
concluded that the adoption has no material impact to the financial
statements.
During August 2001, SFAS No. 143, "Accounting for Asset Retirement
Obligation" was issued. SFAS No. 143 is effective for fiscal years
beginning after June 15, 2002, and will require companies to record
a liability for asset retirement obligations in the period in which
they are incurred, which typically could be upon completion or
shortly thereafter. The FASB decided to limit the scope to legal
obligation and the liability will be recorded at fair value. The
effect of adoption of this standard on Company's results of
operations and financial positions is being evaluated.
During August 2001, SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets." was issued. SFAS No. 144 is
effective for fiscal years beginning after December 15, 2001. It
provides a single accounting model for long-lived assets to be
disposed of and replaces SFAS No. 121 "Accounting for the
Impairment of Long-Lived Assets and Long-Lived Assets to Be
Disposed Of." The Company has implemented this pronouncement and
has concluded that the adoption has no material impact to the
financial statements.
In April 2002, the FASB issued Statement No. 145, "Rescission of
FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No.
13, and Technical Corrections." This Statement rescinds FASB
Statement No. 4, "Reporting Gains and Losses from Extinguishment of
Debt", and an amendment of that Statement, FASB Statement No. 64,
"Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements"
and FASB Statement No. 44, "Accounting for Intangible Assets of
Motor Carriers". This Statement amends FASB Statement No. 13,
"Accounting for Leases", to eliminate an inconsistency between the
required accounting for sale-leaseback transactions and the
required accounting for certain lease modifications that have
economic effects that are similar to sale-leaseback transactions.
The Company does not expect the adoption to have a material impact
to the Company's financial position or results of operations.
In June 2002, the FASB issued Statement No. 146, "Accounting for
Costs Associated with Exit or Disposal Activities." This Statement
addresses financial accounting and reporting for costs associated
with exit or disposal activities and nullifies Emerging Issues Task
Force ("EITF") Issue No. 94-3, "Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring)." The
provisions of this Statement are effective for exit or disposal
activities that are initiated after December 31, 2002, with early
application encouraged. The Company does not expect the adoption to
have a material impact to the Company's financial position or
results of operations.
(2) Reorganization:
Outland
Ventures entered into an agreement and Plan of Reorganization (the
"Reorganization"), dated as of January 30, 2002 with Outland,
whereby Ventures issued 15,000,000 shares of its common stock in
exchange for 100% of Outland's membership interest.
This transaction has been accounted for in the consolidated
financial statements as a reverse acquisition. As a result of this
transaction, the former members of Outland acquired or exercised
control over a majority of the shares of the Company before and
after the reorganization. Accordingly, the transaction has been
treated for accounting purposes as a recapitalization of Outland.
Therefore, these consolidated financial statements represent a
continuation of Outland, not Ventures.
The consolidated financial statements presented include the
accounts of Outland from its inception (March 1, 1997) through the
reorganization.
Voyager Ventures
The Agreement and Merger, as discussed in Note 1, with Dakota, DSC
and Ventures has been accounted for in the consolidated financial
statements as a public shell merger. As a result of this
transaction, the former shareholders of Ventures acquired or
exercised control over a majority of the shares of Dakota.
Accordingly, the transaction has been treated for accounting
purposes as a recapitalization of Ventures and, therefore, these
consolidated financial statements represent a continuation of the
entity, Ventures, not Dakota.
In accounting for this transaction:
i) Ventures is deemed to be the purchaser and surviving
company for accounting purposes. Accordingly, its net assets
are included in the balance sheet at their historical book
values;
ii) Control of the net assets and business of Dakota was
acquired effective February 8, 2002, the effective date. This
transaction has been accounted for as a purchase of the assets
and liabilities of Dakota by Ventures at its net book value of
$0.
(3) Income Taxes:
Prior to December 31, 2001, the Company reported its income taxes as a
limited liability company and, as such, reported its income as a
partnership whereby liability or taxes was that of the individual
members rather than that of the Company. As of September 30, 2002, the
Company has a deferred tax asset consisting of net operating losses,
which are fully reserved for.
(4) Commitments and Contingencies:
On November 11, 2001, the Company entered into a fee agreement with a
Nevada corporation for a purchase option to acquire certain property.
The agreement states that if certain property was acquired, a $100,000
cash payment was due upon execution, as well as the issuance of a note
payable totaling $2,500,000. On May 1, 2002, Voyager Entertainment
Holdings, Inc. entered into a Purchase and Sale Agreement for the
purchase of plus or minus six (6) acres of real property located in Las
Vegas, Nevada. On May 30, 2002 the purchase and sale Agreement was
cancelled and all payments due under the fee Agreement were cancelled.
During January 2002, the Company entered into a month-to-month office
lease totaling approximately $2,500 per month.
On May 9, 2002, the Company entered into a Fee and Placement Agreement
with Security Funding Corporation ("Security Funding"), whereby Security
Funding was engaged to obtain financing in the amount of $180,000,000
for the development and construction of the "Voyager" project. Security
Funding was paid a $5,000 non-refundable processing fee and will be paid
a broker fee of 2% of any funds raised by them. As of September 30,
2002, no funding has been provided by Security Funding.
On May 20, 2002, the Company executed an agreement with NH Media, Inc.
("NHM") where NHM was to act as the exclusive financial advisor in
connection with obtaining financing for the "Star of Shanghai" project.
In addition to non-refundable monthly fees of $15,000, NHM, upon closing
of the financing, was to receive (i) a financial advisory fee of 2% of
the financing, (ii) a success fee equal to 4% of the gross ticket sales
relating to or arising from the Shanghai project, (iii) a success fee
equal to 5% of the outstanding shares of common stock of the Company
determined at closing of the financing, and (iv) the non-exclusive right
to sell corporate sponsorships for the Shanghai project, with NHM
retaining 10% of all revenues received in connection with NHM's sale of
such sponsorships. As of September 30, 2002, this agreement has been
cancelled without any further obligations.
On May 31, 2002, the Company entered into a binding Letter of Intent
with Sahara Las Vegas Corp. ("SLVC") setting forth the basic terms and
conditions for the negotiation of a long-term lease for the site located
adjacent to the Sahara Hotel & Casino, whereby both companies are
planning to jointly design and develop an entire master plan resort for
the 26.87 acre parcel of land. Upon reaching a definitive agreement, the
Company will become obligated to pay SLVC the sum of $2,300,000 in
consideration for the termination of the current lessee, Wet `N Wild of
Nevada, Inc. As of September 30, 2002, no definitive agreement has been
consummated.
On July 9, 2002, the Company entered into an Agreement with Stone Harbor
Financial Services LLC, whereby Stone Harbor is to provide financing to
the company in an amount of up to $172,000,000. The Company agreed to
issue a number of shares of common stock equal to 25% of its total
authorized shares (25,000,000 shares) on a non-dilutive basis to the
investor that funds the transaction. In addition, the investor and any
other participants shall receive an origination fee of 10%. A
substantial condition of the funding is based on the Company's ability
to post title collateralized start-up costs of no less than $17,200,000.
As of the date of this filing the Company has not had the ability to
raise such costs and no consideration is owed by the Company as of
September 30, 2002.
On July 9, 2002, the Company entered into an agreement with Technology
Capital & Markets, Inc. ("TCM"), whereby TCM, for a $5,000,000
investment will buy 5% ownership of Voyager Entertainment Holdings,
Inc., the Company's wholly owned operating entity, specifically
established to separate the Company's Las Vegas "Voyager" project cash
flows from other operations owned or to be developed, by the Company. In
addition, the Company granted TCM a first right of refusal to purchase
an additional twenty-five percent (25%) of the common stock of Voyager
Entertainment Holdings, Inc. and issued TCM a 30-day Warrant to purchase
one million (1,000,000) shares of the Company's common stock at $2.50
per share, which was contingent upon the $5,000,000 investment in the
Company. As of September 30, 2002, the $5,000,000 investment had not
been received by the Company.
On August 15, 2002, the Company executed an agreement with MCI Financial
Services Corporation ("MCI") whereby MCI will act as the exclusive agent
for the Company in the structuring of financial placement for the
Construction/Permanent Loan in an amount not to exceed $100,000,000 for
the Company's "Voyager" project. In addition to an application deposit
of $100,000, MCI, upon closing of the financing, shall (i) be paid a fee
of 2% of the financing, (ii) be issued 4,000,000 shares of the Company's
common stock, and (iii) be granted stock options to purchase 2,000,000
shares of the Company's common stock at $2.50 per share exercisable on
or before April 14, 2005.
On August 16, 2002, the Company entered into an agreement with
Residential Resources, Inc. ("RRI") via MCI acting as an agent, whereby
RRI will sell/hypothecate the assets of Voyager to act as collateral for
a bond issuance, which will raise up to $100 million. Voyager paid an
initial due diligence fee of $30,000 (paid to RRI) and upon completion
of the due diligence, RRI issued a securitization commitment on
September 10, 2002. Pursuant to the agreement, Voyager paid an
additional fee of $70,000 (paid to RRI and part of the application
deposit it referenced in prior paragraph above) upon receipt of the
securitization commitment. Since the amounts paid to RRI are for debt
issue costs related to the bond offering, the entire $100,000 has been
presented as a deferred offering cost on the accompanying balance sheet
and will be amortized over the lives of the various debt to be raised.
(5) Stockholders' Deficit:
Convertible Preferred Stock
The Series A convertible preferred stock carries the following rights
and preferences:
* 10 to 1 voting rights per share
* Each share has 10 for 1 conversion rights to shares of common stock
* No redemption rights
* No face value
Stock Issuances
During 2002, prior to the date of the Merger, the Company issued
2,160,000 shares of convertible preferred stock as consideration for
cash and services, of which 660,000 shares were immediately converted to
shares of common stock, resulting in the Company having 3,660,000 shares
of common stock outstanding.
Immediately preceding the Merger, Dakota, the legal acquirer, had
11,615,000 shares of common stock outstanding.
Effective February 8, 2002 the Company, as consideration for the Merger,
issued 3,660,000 shares of its Series A convertible preferred stock in
exchange for 100% of Voyager's outstanding common stock. Additionally,
simultaneously upon closing of the Merger 2,160,000 shares of the Series
A convertible preferred stock immediately converted into 21,600,000
shares of common stock, resulting in a balance of 1,500,000 shares of
convertible preferred stock remaining outstanding. These amounts have
been adjusted pursuant to reverse merger accounting in the accompanying
financial statements.
On February 15, 2002 the Company sold 800,000 restricted shares of
common stock at a price of $0.50 per share for $400,000, which
represented the fair market value of the common stock on the date of
issuance.
On April 5, 2002, the Company issued 200,000 restricted shares of common
stock in exchange for services performed totaling $200,000. The fair
market value of the common stock on the date of issuance totaled
$400,000. Therefore, the Company has recognized stock discount expense
of $200,000.
On April 5, 2002, the Company issued 125,000 restricted common shares
for Investor Relations Services. The shares were being held by the
Company in anticipation of executing a formal definitive agreement with
the service provider. On June 6, 2002 the Company cancelled the shares
due to an inability to reach an agreement with the service provider.
On May 30, 2002, the Company executed a Contractor Agreement with
Western Architectural Services, LLC ("WAL") whereby Western
Architectural will provide to be determined architectural services to
the Company for its Voyager Project to be located on the Las Vegas
Strip. The Company issued 2,812,500 shares of restricted common stock to
Western Architectural in consideration for Western Architectural's
contract sum of $18,141,533, classified as deferred construction costs,
to be expensed as earned. As of September 30, 2002, no amounts have
been earned by WAL and accordingly, no amounts have been expensed.
During June 2002, the Company sold 50,000 restricted shares of common
stock at a price of $3.00 per share solely to accredited investors for
cash consideration totaling $150,000, which represents the fair market
value of the common stock on date of issuance.
(6) Stock Option Plan:
The Company's shareholders approved the 2002 Stock Option Plan on April
2, 2002 at the Company's annual meeting. The plan authorizes the Company
to issue 5,000,000 shares of common stock for issuance upon exercise of
options.
The plan is intended to encourage directors, officers, employees and
consultants of the Company to acquire ownership of Common Stock.
Officers (including officers who are members of the Board of Directors),
directors (other than members of the Stock Option Committee (the
"Committee") to be established to administer the Stock Option Plan) and
other employees and consultants of the Company and its subsidiaries (if
established) will be eligible to receive options under the planned Stock
Option Plan. The Committee will administer the Stock Option Plan and
will determine those persons to whom options will be granted, the number
of options to be granted, the provisions applicable to each grant and
the time periods during which the options may be exercised. No options
may be granted more than ten years after the date of the adoption of the
Stock Option Plan.
Unless the Committee, in its discretion, determines otherwise, non-
qualified stock options will be granted with an option price equal to
the fair market value of the shares of Common Stock to which the non-
qualified stock option relates on the date of grant. In no event may the
option price with respect to an incentive stock option granted under the
Stock Option Plan be less than the fair market value of such Common
Stock to which the incentive stock option relates on the date the
incentive stock option is granted. Each option granted under the Stock
Option Plan will be exercisable for a term of not more than ten years
after the date of grant. Certain other restrictions will apply in
connection with this Plan when some awards may be exercised.
In the event of a change of control (as defined in the Stock Option
Plan), the date on which all options outstanding under the Stock Option
Plan may first be exercised will be accelerated. Generally, all options
terminate 90 days after a change of control. As of September 30,
2002, no options have been issued under this plan.
(7) Subsequent Events:
On October 28, 2002, the Company entered into a professional
architectural services agreement with A.C.E Architect, Inc. in exchange
for 600,000 shares of common stock. In addition, the Company is
responsible for reimbursement of expenses.
Item 2. Plan of Operations.
The following discussion and analysis should be read in conjunction with
the Company's financial statements and the notes thereto contained
elsewhere in this filing.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
With the exception of historical matters, the matters discussed herein
are forward-looking statements that involve risks and uncertainties.
Forward-looking statements include, but are not limited to, statements
concerning anticipated trends in revenues and net income, projections
concerning operations and available cash flow. The Company's actual
results could differ materially from the results discussed in such
forward-looking statements. The following discussion of the Company's
financial condition and results of operations should be read in
conjunction with the Company's financial statements and the related
notes thereto appearing elsewhere herein.
The Company wishes to caution investors that any forward-looking
statements made by or on behalf of the Company are subject to
uncertainties and other factors that could cause actual results to
differ materially from such statements. These uncertainties and other
factors include, but are not limited to the Risk Factors listed below
(many of which have been discussed in prior SEC filings by the Company).
Though the Company has attempted to list comprehensively these important
factors, the Company wishes to caution investors that other factors
could in the future prove to be important in affecting the Company's
results of operations. New factors emerge from time to time and it is
not possible for management to predict all of such factors, nor can it
assess the impact of each such factor on the business or the extent to
which any factor, or combination of factors, may cause actual results to
differ materially from those contained in any forward-looking
statements.
Readers are further cautioned not to place undue reliance on such
forward-looking statements as they speak only of the Company's views as
of the date the statement was made. The Company undertakes no obligation
to publicly update or revise any forward-looking statements, whether as
a result of new information, future events or otherwise.
Overview
Voyager Entertainment International, Inc., formerly named Dakota
Imaging, Inc., was incorporated in North Dakota on January 31, 1991.
Effective February 8, 2002 the Company completed a reverse triangular
merger between Dakota Subsidiary Corp. ("DSC"), a wholly owned
subsidiary of the Company, and Voyager Ventures, Inc., a Nevada
corporation ("Ventures"), whereby the Company issued 3,660,000 shares of
its Series A preferred stock in exchange for 100% of Ventures
outstanding common stock. Pursuant to the terms of the merger, Ventures
merged with DSC wherein DSC ceased to exist and Ventures became a wholly
owned subsidiary of the Company.
On April 2, 2002, the Company held its annual stockholders meeting and
the stockholders voted on and approved changing the Company's name from
Dakota Imaging, Inc. to Voyager Entertainment International, Inc.
Voyager has yet to generate revenues from any source and there is a
substantial going concern issue as to whether Voyager will ever be able
to commercialize its technology and generate sufficient, if any,
revenues to satisfy its working capital requirements. Since inception,
Voyager has been dependent on the sale of its equity securities and
loans from affiliates to satisfy its working capital requirements.
Voyager continues to have a working capital deficiency that raises
substantial concern regarding its ability to continue as a going
concern.
Business of the Company
The Company's current business plan is to build two of the world's
largest Ferris wheels, one on the Las Vegas Strip and the other in
Shanghai, China.
Las Vegas "Voyager" Wheel
Outland Development, a wholly-owned subsidiary of the Company, for the
past 5 years has extensively planned and/or evaluated the available
locations at both the North and South ends of the Las Vegas Strip. The
location selected for VOYAGER is the 26.87 acres owned by SLVC adjacent
to the Sahara Hotel & Casino. It is anticipated that the project will
benefit from the location on Las Vegas Blvd., both from the physical
connection to be developed and future development properties on the
north end of the strip.
"VOYAGER" is intended to be designed as a visual ICON and experience
overlooking the "Las Vegas Strip". With 33 vehicles called Sky
Cruiser's, the vertical revolving vehicle will overlook the Las Vegas
Strip as it revolves higher than a 50-story building at 560 (+/-) feet.
One slow rotation in a vehicle will last 27 minutes and each vehicle
will travel at 0.652 MPH or .9567 feet per second. The vehicle will be
controlled and enhanced by the on-board SS Navigator.part entertainer,
and part steward, an individual also skilled in life-safety and
security.
Land Acquisition
The Company is currently in the process of negotiating a long-term lease
for a site located adjacent to the Sahara Hotel & Casino, owned by SLVC,
whereby both companies are planning to jointly design and develop an
entire master plan resort for the 26.87 acre parcel. The front portion
of the site will be occupied by Voyager and will become the engine for
the mixed-use complex. A hotel and casino are planned, as well as
timeshare or other residential modules. The design of Voyager will be
integrated throughout the entire resort. The site plan will detail
Voyager's plans for the wheel, including a large lake with custom boats
utilized for hotel rooms, a new hotel tower and a time share tower. As
of September 30, 2002, no definitive agreement has been consummated.
On August 16, 2002, the Company entered into an agreement with
Residential Resources, Inc. ("RRI"), whereby RRI will sell/hypothecate
the assets of Voyager to act as collateral for a bond issuance, which
will raise up to $100 million. Voyager paid an initial due diligence
fee of $30,000 and upon completion of the due diligence, RRI issued a
securitization commitment on September 10, 2002. Pursuant to the
agreement, Voyager paid an additional fee of $70,000 upon receipt of the
securitization commitment.
Organization
The project will be owned by the parent company, however, will be
designed, developed, built and operated by Outland Management, LLC, a
wholly owned subsidiary of the Company. Outland will manage the project
via a ten-year contract with performance-based extensions. All
covenants, restrictions and protocol will be detailed in its operating
agreement.
As the management company Outland will be responsible for the design,
development, construction, and operation of VOYAGER, and provide the
following: concept development, project design, location assessment and
acquisition, strategic alliances in both entertainment and gaming,
business plans and budgets, financial oversight and management during
both construction and operation, marketing plans, insurance procurement
and risk management, senior operational management including development
of policies and procedures, and overall strategic focus for VOYAGER.
VOYAGER is fundamentally an amusement ride attraction, and its
operational and maintenance requirements are very similar to those found
in the theme park industry. In addition, Las Vegas is a unique
marketplace, and the visitor when placed in the environment is also
unique. The ability to understand the visitor, and successfully attract
customers to VOYAGER will come as a result of clearly understanding the
marketing strategies of the gaming industry. Outland Management intends
to employ highly skilled individuals from the theme park industry and
combine their specialized skills with those from the gaming industry.
The initial management team at Outland is anticipated to consist of:
Veldon Simpson, as CEO and a Director; Richard Hannigan, as President
and a Director; Michael Schaunessy, as CFO; and Sig Rogich, as Director
of Public Relations & Communications.
Shanghai, China "Star of Shanghai"
Anticipated to be located on the western bank (Puxi) of the Huangpu
River, the Bund ("muddy embankment") is the chosen location for a master
planned development with the Star of Shanghai as the dominant feature.
Star of Shanghai is to be designed as a special tribute to the legendary
figure Huang Daopo who invented the "spinning wheel" that reformed the
technique of cotton weaving, and gained fame for its production of
clothing.
China's bright future and growth in all dimensions is anticipated to
impact and attract international attention.
Voyager will require substantial additional funds to fulfill its
business plan and successfully develop its two projects. Voyager
intends to raise these needed funds from private placements of its
securities, debt financing or internally generated funds from the
licensing of its intellectual property or service fees. As of the date
of this filing the Company has not received a firm commitment for
financing of any of the projects.
Plan of Operation
During the next 12 months, the Company plans to focus its efforts on its
development of the Ferris Wheels; however actual production will not
commence until the Company has sufficient capital for production and
marketing.
As of September 30, 2002, the Company had only unpaid Officers and
Directors. The Company is dependent upon Richard Hannigan, President and
Director and Veldon Simpson, CEO and Director. The Company does not
have any employees at this time and does not anticipate the need to hire
any employees until such time as the Company has been sufficiently
capitalized.
Risks that could cause actual performance to differ from expected
performance are detailed in the remainder of this section, and under the
section titled "Factors That May Affect the Company's Future Operating
Results."
Liquidity and Capital Resources
A critical component of our operating plan impacting our continued
existence is the ability to obtain additional capital through additional
equity and/or debt financing. We do not anticipate enough positive
internal operating cash flow until such time as we can generate
substantial revenues, which may take the next few years to fully
realize. In the event we cannot obtain the necessary capital to pursue
our strategic plan, we may have to cease or significantly curtail our
operations. This would materially impact our ability to continue
operations.
Our near term cash requirements are anticipated to be offset through the
receipt of funds from private placement offerings and loans obtained
through private sources. Since inception, we have financed cash flow
requirements through debt financing and issuance of common stock for
cash and services. As we initiate operational activities, we may
continue to experience net negative cash flows from operations, pending
receipt of servicing or licensing fees, and will be required to obtain
additional financing to fund operations through stock offerings and bank
borrowings to the extent necessary to provide working capital.
Over the next twelve months, we believe that existing capital and
anticipated funds from operations will not be sufficient to sustain
operations and planned development. Consequently, we will be required
to seek additional capital in the future to fund growth and expansion
through additional equity or debt financing or credit facilities. No
assurance can be made that such financing would be available, and if
available it may take either the form of debt or equity. In either
case, the financing could have a negative impact on our financial
condition and our stockholders.
We anticipate incurring operating losses over the next twelve months.
Our lack of operating history makes predictions of future operating
results difficult to ascertain. Our prospects must be considered in
light of the risks, expenses and difficulties frequently encountered by
companies in their early stage of development, particularly companies in
new and rapidly evolving markets such as development related companies.
Such risks include, but are not limited to, an evolving and
unpredictable business model and the management of growth. To address
these risks we must, among other things, implement and successfully
execute our business and marketing strategy, continue to develop and
upgrade technology and products, respond to competitive developments,
and attract, retain and motivate qualified personnel. There can be no
assurance that we will be successful in addressing such risks, and the
failure to do so can have a material adverse effect on our business
prospects, financial condition and results of operations.
As of September 30, 2002, the Company had current assets of $12,030, and
current liabilities of $404,690, resulting in working capital deficit of
$392,660.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Management's Discussion and Analysis of Financial Condition and Results
of Operations discusses the Company's consolidated financial statements,
which have been prepared in accordance with accounting principles
generally accepted in the United States of America. The preparation of
these financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. On an on-going
basis, management evaluates its estimates and judgments, including those
related to financing operations, and contingencies and litigation.
Management bases its estimates and judgments on historical experience
and on various other factors that are believed to be reasonable under
the circumstances, the results of which form the basis for making
judgments about the carrying value of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from
these estimates under different assumptions or conditions. The most
significant accounting estimates inherent in the preparation of the
Company's financial statements include estimates as to the appropriate
carrying value of certain assets and liabilities which are not readily
apparent from other sources, primarily accruals for operating costs, and
the classification of net operating loss and tax credit carryforwards.
These accounting policies are described at relevant sections in this
discussion and analysis and in the notes to the consolidated financial
statements included in our Form 8-K report filed on March 4, 2002.
Attestation of Chief Executive Officer and Chief Financial Officer as to
our internal controls
Our Chief Executive Officer and Chief Accounting Officer have evaluated the
effectiveness of our internal controls and have found that based on these
evaluations and the current status of the Company's operations that our
internal controls are adequate at this time. Further, there have been no
significant changes in our internal controls or in other factors that could
significantly affect internal controls subsequent to the date of their
evaluations.
FACTORS THAT MAY AFFECT THE COMPANY'S FUTURE OPERATING RESULTS
We are a development stage company, recently reorganized and have
minimal operating history, which makes an evaluation of us extremely
difficult. At this stage of our business operations, even with our good
faith efforts, potential investors have a high probability of losing
their investment.
As a result of our recent reorganization we have yet to generate
revenues from operations and have been focused on organizational, start-
up, market analysis and fund raising activities. Although we have a
project to market, there is nothing at this time on which to base an
assumption that our business operations will prove to be successful or
that we will ever be able to operate profitably. Our future operating
results will depend on many factors, including our ability to raise
adequate working capital, demand and acceptance of our project, the
level of our competition and our ability to attract and maintain key
management and employees.
While Management believes its estimates of projected occurrences and
events are within the timetable of its business plan, there can be no
guarantees or assurances that the results anticipated will occur.
Our auditor's report reflects the fact that without realization of
additional capital, it would be unlikely for us to continue as a going
concern. If we are unable to continue as a going concern, it is unlikely
that we will continue in business.
As a result of our deficiency in working capital and other factors, our
auditors have included a paragraph in their report regarding substantial
doubt about our ability to continue as a going concern. Our plans in
this regard are to seek additional funding through future equity private
placements or debt facilities.
There is a limited current public market for our common stock.
Although our common stock is listed on the Over-the-Counter Bulletin
Board, there is a limited volume of sales, thus providing a limited
liquidity into the market for our shares. As a result of the foregoing,
stockholders may be unable to liquidate their shares for any reason.
PART II--OTHER INFORMATION
Item 1. Legal Proceedings.
None
Item 2. Changes in Securities.
During June 2002, the Company sold 50,000 restricted shares of common
stock at a price of $3.00 per share for cash consideration totaling
$150,000, which represents the fair market value of the common stock on
the date of issuance. As of June 30, 2002, 5,000 of the shares had not
been issued. The Shares were sold directly by the company solely to
Accredited Investors without registration based upon the exemption from
registration afforded by Regulation D Rule 506 promulgated under the
Securities Act. No commissions were paid on any funds raised.
On July 9, 2002, the Company issued a Warrant to purchase 1,000,000
shares of common stock to Technology Capital & Markets, Inc. for their
assistance with certain fundraising assistance. The term of the Warrant
was for 30 days and was terminated. The warrant was issued without
registration based upon the relationship between Technology Capital &
Markets, Inc. and the Company, in reliance upon the exemption from
registration afforded by Section 4(2) of the Securities Act.
On October 28, 2002, the Company entered into a professional
architectural services agreement with A.C.E Architect, Inc. in exchange
for 600,000 shares of common stock. In addition, the Company is
responsible for reimbursement of expenses. The shares was issued
without registration based upon the relationship between Technology
Capital & Markets, Inc. and the Company, in reliance upon the exemption
from registration afforded by Section 4(2) of the Securities Act.
Item 3. Defaults by the Company upon its Senior Securities.
None.
Item 4. Submission of Matter to a Vote of Security Holders.
None
Item 5. Other Information.
Third-Party Agreements Executed or Terminated During the Quarter
On May 20, 2002 the Company executed an agreement with NH Media, Inc.
("NHM") where NHM was to act as the exclusive financial advisor in
connection with obtaining financing of up to USD$90,000,000 for the land
acquisition or to obtain a leasehold interest in the land, engineering,
architectural design, construction and operation of the "Star of
Shanghai" project. In addition to non-refundable monthly fees of
$15,000, NHM, upon closing of the financing, was to receive (i) a
financial advisory fee of 2% of the financing, (ii) a success fee equal
to 4% of the gross ticket sales relating to or arising from the Shanghai
project, (iii) a success fee equal to 5% of the outstanding shares of
common stock of the Company determined at closing of the financing, and
(iv) the non-exclusive right to sell corporate sponsorships for the
Shanghai project, with NHM retaining 10% of all revenues received in
connection with NHM's sale of such sponsorships. As of September 30,
2002, this agreement has been cancelled without any further obligations.
On July 9, 2002, the Company entered into an Agreement with Stone Harbor
Financial Services LLC, whereby Stone Harbor was to provide financing to
the company in an amount of up to $172,000,000. The Company agreed to
issue a number of shares of common stock equal to 25% of its total
authorized shares (25,000,000 shares) on a non-dilutive basis to the
investor that funds the transaction. In addition, the investor and any
other participants shall receive an origination fee of 10%. A
substantial condition of the funding is based on the Company's ability
to post title collateralized start-up costs of no less than $17,200,000.
As of the date of this filing the Company has not had the ability to
raise such costs.
On July 9, 2002, the Company entered into an agreement with Technology
Capital & Markets, Inc. ("TCM"), whereby TCM for a $5,000,000 investment
will buy 5% ownership of Voyager Entertainment Holdings, Inc., the
Company's wholly owned operations company specifically established to
separate the Company's Las Vegas "Voyager" project cash flows from other
operations owned or to be developed by the Company. In addition, the
Company granted TCM a first right of refusal to purchase an additional
twenty-five percent (25%) of the common stock of Voyager Entertainment
Holdings, Inc. and issued TCM a 30-day Warrant to purchase one million
(1,000,000) shares of the Company's common stock at $2.50 per share,
which was contingent upon the $5,000,000 investment in the Company. As
of September 30, 2002, the $5,000,000 investment had not been received
by the Company.
On August 15, 2002, the Company executed an agreement with MCI Financial
Services Corporation ("MCI") whereby MCI will act as the exclusive agent
for the Company in the structuring of financial placement for the
Construction/Permanent Loan in an amount not to exceed USD$100,000,000
for the Company's "Voyager" project. In addition to an application
deposit of $100,000, MCI, upon closing of the financing, shall (i) be
paid a fee of 2% of the financing, (ii) be issued 4,000,000 shares of
the Company's common stock, and (iii) be granted stock options to
purchase 2,000,000 shares of the Company's common stock at $2.50 per
share exercisable on or before April 14, 2005.
On August 16, 2002, the Company entered into an agreement with
Residential Resources, Inc. ("RRI") via MCI acting as an agent, whereby
RRI will sell/hypothecate the assets of Voyager to act as collateral for
a bond issuance, which will raise up to $100 million. Voyager paid an
initial due diligence fee of $30,000 (paid to RRI) and upon completion
of the due diligence, RRI issued a securitization commitment on
September 10, 2002. Pursuant to the agreement, Voyager paid an
additional fee of $70,000 (paid to RRI and part of the application
deposit referenced in prior paragraph above) upon receipt of the
securitization commitment. Since the amounts paid to RRI are for debt
issue costs related to the bond offering, the entire $100,000 has been
presented as a deferred offering cost on the accompanying balance sheet
and will be amortized over the life of the various debt to be raised.
Subsequent Event
On October 28, 2002, the Company entered into a professional
architectural services agreement with A.C.E Architect, Inc. in exchange
for 600,000 shares of common stock. In addition, the Company is
responsible for reimbursement of expenses.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
99 Press Release Dated July 11, 2002
99.1 Press Release Dated July 26, 2002
99.2 Press Release Dated October 8, 2002
(b) Form 8-K
8-K filed on July 3, 2002- F.G. 7-11 Agreement and Termination; SLVC
Letter of Intent
8-K filed on August 23, 2002- Change of Auditor - Dismissal of
Merdinger, Fruchter, Rosen & Corso and
appointment of Stonefield Josephson, Inc.
8-K/A filed on September 6, 2002- Amendment to Change of Auditor - Dismissal
of Merdinger, Fruchter, Rosen & Corso and
appointment of Stonefield Josephson, Inc.
8-K filed on October 8, 2002 - Agreement with Residential Resources, Inc
8-K filed on October 11, 2002 - Securitization Commitment from Residential
Resources, Inc
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, thereunto duly authorized.
VOYAGER ENTERTAINMENT INTERNATIONAL, INC.
(Registrant)
By:/s/ Richard Hannigan By:/s/ Veldon Simpson
Richard Hannigan Veldon Simpson
President/Treasurer/Director CEO/Director
Chief Accounting Officer
Date: November 14, 2002 Date: November 14, 2002
CERTIFICATION PURSUANT TO
18 USC, SECTION 1350, AS ADOPTED PURSUANT TO
SECTIONS 302 AND 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Voyager Entertainment
International Inc. (the "Company") on Form 10-QSB for the period ending
September 30, 2002, as filed with the Securities and Exchange Commission on
the date hereof (the "Report"), We, Veldon Simpson, Chief Executive Officer
and Richard Hannigan, Chief Accounting Officer of the Company, certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Sections 302 and
906 of the Sarbanes-Oxley Act of 2002, that:
(1) We have reviewed the report;
(2) To the best of our knowledge, the Report does not contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements made, in light of the circumstances under which
such statements were made, not misleading:
(3) To the best of our knowledge, the financial statements, and other
financial information included in the Report, fairly present in all material
respects the financial condition and results of operations of the Company as
of, and for, the periods presented in the Report;
(4) We:
(a) are responsible for establishing internal controls;
(b) have designed such internal controls to ensure that material information
relating to the Company and its consolidated subsidiaries is made known to us
by others within the Company, particularly during the period ended September
30, 2002;
(c) have evaluated the effectiveness of the Company's internal controls as
of a date within 90 days prior to the Report; and
(d) have presented in the Report our conclusions about the effectiveness of
our internal controls based on our evaluation of that date;
(5) We have disclosed to the Company's auditors and the board of directors:
(a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the Company's ability to record,
process, summarize, and report financial data and have identified for the
Company's auditors any material weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Company's internal controls;
(6) We have indicated in the Report whether or not there were significant
changes in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses; and
(7) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934.
Date: November 14, 2002
/s/ Veldon Simpson /s/ Richard Hannigan
Veldon Simpson Richard Hannigan
Chief Executive Officer Chief Accounting Officer