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
June 30, 2002 000-33151
For the quarterly Commission file number
period ended
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 August 29, 2002, there were 37,077,500 shares of common stock
outstanding.
As of August 21, 2002, there were 37,072,500 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'
Equity (Deficiency) 3-5
Consolidated Statements of Cash Flows (Unaudited) 6
Notes to Consolidated Financial Statements 7-13
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 14
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 17
Item 2. Changes in Securities 18
Item 3. Defaults by the Company upon its
Senior Securities 18
Item 4. Submission of Matter to a Vote of
Security Holders 18
Item 5. Other Information 19
Item 6. Exhibits and Reports on Form 8-K 20
SIGNATURES 21
VOYAGER ENTERTAINMENT INTERNATIONAL, INC.
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
June 30, December
2002 31, 2001
---------- -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 25,820 $ 256
Due from related party 4,267
Prepaid expenses and other current assets 267
----------- -----------
Total current assets 30,087 523
Property and equipment, net of accumulated
depreciation of $115 6,145
----------- -----------
$36,232 $523
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current liabilities:
Accounts payable and accrued expenses $ 25,990 $ 110,000
Due to related parties 44,148
----------- -----------
Total liabilities 25,990 154,148
----------- -----------
Stockholders' equity (deficiency)
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 (1,002,758) (188,625)
----------- -----------
Total stockholders' equity (deficiency) 10,242 (153,625)
----------- -----------
Total liabilities and stockholders' equity
(deficiency) $ 36,232 $ 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
period from
inception
For the For the (March 1,
Three Months Ended Six Months Ended 1997) to
June 30, June 30, June 30,
2002 2001 2002 2001 2002
Net revenue $ - $ - $ - $ - $ -
---------- ---------- ---------- ---------- ------------
Operating
expenses:
Project costs 19,413 24,567 72,303
Professional
and consulting
fees 282,334 533,579 657,968
Other
operating
expenses 28,711 155 55,987 200 72,487
Stock discount
expense 200,000 200,000 200,000
---------- ---------- ---------- ---------- ------------
Total
operating
expenses 530,458 155 814,133 200 1,002,758
---------- ---------- ---------- ---------- ------------
Net loss $(530,458) $ (155) $(814,133) $ (200) $(1,002,758)
========== ========== ========== ========== ============
Basic and
diluted loss
per common
share $ (0.00) $ (0.00) $ (0.00) $ (0.00)
========== ========== ========== ==========
Basic and
diluted
weighted
average shares
of common
stock 35,211,703 15,000,000 30,593,619 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' EQUITY (DEFICIENCY) (UNAUDITED)
FOR THE PERIOD FROM INCEPTION (MARCH 1, 1997) TO JUNE 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 - - - -
------------ ------- ---------- -------
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' EQUITY (DEFICIENCY) (UNAUDITED)
FOR THE PERIOD FROM INCEPTION (MARCH 1, 1997) TO JUNE 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' EQUITY (DEFICIENCY) (UNAUDITED)
(CONTINUED)
FOR THE PERIOD FROM INCEPTION (MARCH 1, 1997) TO JUNE 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 (660,000) (660) 6,600,000 6,600
common stock
Acquisition of net assets of - - 11,615,000 11,615
Dakota
Issuance of common stock for cash
- February 15, 2002 - - 800,000 800
Issuance of common stock for
services - April 2002 - - 200,000 200
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' EQUITY (DEFICIENCY) (UNAUDITED)
(CONTINUED)
FOR THE PERIOD FROM INCEPTION (MARCH 1, 1997) TO JUNE 30, 2002
Deficit
Accumulated Total
Additional Deferred During the Stockholders'
Paid-in construction Development 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 0,000 - (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' EQUITY (DEFICIENCY) (UNAUDITED)
(CONTINUED)
FOR THE PERIOD FROM INCEPTION (MARCH 1, 1997) TO JUNE 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 six months
ended
June 30, 2002 - - - -
---------- -------- ----------- ---------
Balance at June 30, 2002 1,500,000 $ 1,500 37,077,500 $ 37,077
========== ======== =========== =========
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' EQUITY (DEFICIENCY) (UNAUDITED)
(CONTINUED)
FOR THE PERIOD FROM INCEPTION (MARCH 1, 1997) TO JUNE 30, 2002
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
six months ended
June 30, 2002 - - (814,133) (814,133)
------------ -------------- ------------- -------------
Balance at June
30, 2002 $ 19,115,956 $ (18,141,533) $ (1,002,758) $ 10,242
============ ============== ============= =============
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
Six Months Inception
Ended June 30, (March 1,
1997) to June
30,
----------- -------- -------------
2002 2001 2002
----------- -------- -------------
Cash flows provided by (used for)
operating activities:
Net loss $ (814,133) $ (200) $ (1,002,758)
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation 115 - 115
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 (84,010) - 25,990
----------- -------- -------------
Net cash used for operating
activities (479,761) (200) (558,653)
----------- -------- -------------
Cash flows used for investing
activities -
payments to acquire property and
equipment (6,260) (6,260)
----------- -------- -------------
Cash flows provided by (used for)
financing activities:
Proceeds from sale of common stock 560,000 - 595,000
Decrease in due to related party (44,148) - -
Increase in due from related party (4,267) - (4,267)
----------- -------- -------------
Net cash provided by financing
activities 511,585 - 590,733
----------- -------- -------------
Net increase (decrease) in cash and
cash equivalents 25,564 (200) 25,820
Cash and cash equivalents, beginning
of period 256 369 -
----------- -------- -------------
Cash and cash equivalents, end of
period $ 25,820 $ 169 $ 25,820
=========== ======== =============
Cash paid during the year for:
Interest expense $ - $ - $-
=========== ======== =============
Income taxes $ - $ - $-
=========== ======== =============
Non-cash financing activity:
For the six months ending June 30, 2002, the Company issued shares of
common and preferred stock for services, totaling $218,000 (see Note 3).
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 JUNE 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 six months ending June 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.
VOYAGER ENTERTAINMENT INTERNATIONAL, INC.
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
FOR THE PERIOD FROM INCEPTION (MARCH 1, 1997) TO JUNE 30, 2002
(1) Summary of Significant Accounting Policies:
Basis of Presentation, Continued:
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.
VOYAGER ENTERTAINMENT INTERNATIONAL, INC.
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
FOR THE PERIOD FROM INCEPTION (MARCH 1, 1997) TO JUNE 30, 2002
(1) Summary of Significant Accounting Policies (Continued):
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.
VOYAGER ENTERTAINMENT INTERNATIONAL, INC.
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
FOR THE PERIOD FROM INCEPTION (MARCH 1, 1997) TO JUNE 30, 2002
(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.
VOYAGER ENTERTAINMENT INTERNATIONAL, INC.
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
FOR THE PERIOD FROM INCEPTION (MARCH 1, 1997) TO JUNE 30, 2002
(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 June 30, 2002, the
Company has a deferred tax asset consisting of net operating losses,
which is 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, 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.
On May 20, 2002, the Company executed an agreement with NH Media, Inc.
("NHM") where NHM will 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, will 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.
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. 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.
VOYAGER ENTERTAINMENT INTERNATIONAL, INC.
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
FOR THE PERIOD FROM INCEPTION (MARCH 1, 1997) TO JUNE 30, 2002
(5) Stockholders' Equity:
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 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 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.
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.
VOYAGER ENTERTAINMENT INTERNATIONAL, INC.
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
FOR THE PERIOD FROM INCEPTION (MARCH 1, 1997) TO JUNE 30, 2002
(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 June 30, 2002, no
options have been issued under this plan.
(7) Subsequent Events:
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.
Effective August 6, 2002, the Company replaced Merdinger, Fruchter,
Rosen & Company, P.C. as its independent auditors with Stonefield
Josephson, Inc., who will act as the Company's independent certified
public accountants for the year ending December 31, 2002.
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, of which $30,000 has been paid, 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.
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 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.
Organization
The project will be owned by the parent company, but, 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 is anticipated to have a bright future and grow in all dimensions,
this 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,ctual production will not commence
until the Company has sufficient capital for production and marketing.
As of June 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 June 30, 2002, the Company had current assets of $30,087, and
current liabilities of $25,990, resulting in working capital of $4,097.
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.
We will require substantial additional financing in order to fully implement
our business plan. Without any additional funding, we could remain as a start-
up company with no material operations, revenues, or profits.
Due to our start-up nature and lack of current capital, in order to
fully implement our business plan we will require substantial additional
funding. Our business plan will require us to incur the costs of development
of our projects, which is anticipated to exceed several hundred million
dollars. Our current fundraising efforts have only enabled us to maintain
minimum operations and supplement our working capital requirements. We
anticipate raising additional funds through a private placement, registered
offering, debt financing or other sources to implement our business plan.
Adequate funds for this purpose on terms favorable to us may not be available
when needed, if ever. Without new funding, we cannot implement our business
plan, and our shareholders may lose part or all of their investment.
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.
On April 5, 2002,the Company issued 200,000 restricted shares of common
stock to Norman and Barbara Karp for services performed totaling $200,000,
which represents the fair market value of the common stock on the date of
issuance, as a finder and assisting the Company in furthering its business
plan. The Company believes that the issuance of the shares was exempt from
the registration and prospectus delivery requirements of the Securities Act
of 1933 by virtue of Section 4(2). The shares were issued directly by the
Company and did not involve a public offering or general solicitation. The
recipients of the shares had a preexisting relationship with our management,
had performed services for the Company and had full and complete access to
the Company and had the opportunity to speak with management with regards to
their investment decision.
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 issued 2,812,500 shares of restricted common
stock to Western Architectural Services, LLC in exchange for $18,141,533 of
architectural services.
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.
Subsequent Event
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 not exercised prior to its termination. 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.
Item 3. Defaults by the Company upon its Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
On April 2, 2002, the Company held its annual stockholders' meeting and
the stockholders voted on and approved the following;
1. The election of a new Board of Directors (Veldon Simpson, and Richard
Hannigan) to serve through the next year;
2. Changing the Company's fiscal year end to December 31;
3. Changing the Company's name from Dakota Imaging, Inc. to Voyager
Entertainment International, Inc.;
4. Amend the Company's Certificate of Incorporation;
5. Amend and restate the Company's Bylaws;
6. The appointment of MERDINGER, FRUCHTER, ROSEN & CORSO, P.C. to serve as
the Company's auditor; and
7. The adoption of a stock option plan providing for options on up to 5
million shares of common stock.
Item 5. Other Information.
Voyager Entertainment Holdings, Inc.
On May 2, 2002, the Company incorporated Voyager Entertainment Holdings,
Inc., a Nevada corporation ("Holdings"), as a wholly owned subsidiary for the
purpose of purchasing 6 acres of real property located on the Las Vegas
Strip.
On May 1, 2002, prior to its incorporation, Holdings entered into a
Purchase and Sale Agreement with F.G. 7-11, L.L.C., a Nevada limited
liability company, for the purchase of plus or minus six (6) acres of real
property commonly located at 3700 Las Vegas Boulevard South, Clark County,
Las Vegas, Nevada. The Agreement was cancelled on May 30, 2002.
Third-Party Agreements Executed During the Quarter
On May 9, 2002, the Company entered into a Fee and Placement Agreement
with Security Funding Corporation, 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.
On May 20, 2002, the Company executed an agreement with NH Media, Inc.
("NHM") where NHM will act as the exclusive financial advisor in connection
with obtaining financing of up to $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, will 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.
Concurrent with the execution of the NH Media agreement, the Company
appointed General Wong of the PRC as Vice President and Director of China
Relations along with Weina Zhang as Director of Marketing for Shanghai.
General Wong is a builder, a contract negotiator, and a quality control
expert in China.
On May 30, 2002,the Company executed a Contractor Agreement with Western
Architectural Services, LLC,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.
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. 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.
Subsequent Events
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, Stone Harbor.Upon
funding the transaction, 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 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, for an investment of five million dollars ($5,000,000) in exchange
for five percent (5%) of the common stock of Voyager Entertainment Holdings,
Inc. 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.
Effective August 6, 2002,the Company replaced Merdinger, Fruchter, Rosen
& Company, P.C., which audited the Company's financial statements for the
fiscal year ended December 31, 2001, with Stonefield Josephson, Inc. to act
as the Company's independent certified public accountants. The reports of
Merdinger, Fruchter, Rosen & Company, P.C. for the fiscal year did not
contain an adverse opinion, or disclaimer of opinion and were not qualified
or modified as to audit scope or accounting principles. However, the report
of Merdinger, Fruchter, Rosen & Company, P.C. for the fiscal year was
qualified with respect to uncertainty as to the Company's ability to continue
as a going concern.
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, of which $30,000 has been paid, 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.
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
(b) Form 8-K
8-K filed on April 15, 2002 - Annual Meeting Results
8-K filed on June 24, 2002 - NH Media Agreement; Western
Architectural Agreement
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
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
Date: August 29, 2002 Date: August 29, 2002
In connection with the Quarterly Report of Voyager Entertainment
International, Inc. (the "Company") on Form 10-QSB for the period ending June
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 Section 906 of the Sarbanes-
Oxley Act of 2002, that to the best of our knowledge:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of the Company.
Date: August 29, 2002
/S/ Veldon Simpson
Veldon Simpson
Chief Executive Officer
/S/ Richard Hannigan
Richard Hannigan
Chief Accounting Officer