UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2009.
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
FOR THE TRANSITION PERIOD FROM ________ TO ________.
COMMISSION FILE NUMBER 000-33151
VOYAGER ENTERTAINMENT INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in its Charter)
Nevada 54-2110681
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4483 West Reno Avenue, Las Vegas, Nevada 89119
---------------------------------------- ----------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (702) 221-8070
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (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 [ ]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate website, if any, every Interactive Data File required to
be submitted and posted pursuant to Rule 405 of Regulation S-T during the
preceding 12 months (or for such shorter period that the registrant was required
to submit and post such files). Yes [ ] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b -2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
As of March 24, 2010, there were 149,902,287 outstanding shares of the issuer's
Common Stock, $0.001 par value.
EXPLANATORY NOTE
The purpose of this amended Form 10-Q for the quarter ended September 30, 2009
is to adjust accreted financing costs in the proper period.
The Company determined, during the preparation of the Form 10-K for the year
ended December 31, 2009, that a financing agreement dated July 11, 2007 expired
July 11, 2009. Deferred financing costs of $50,000 were paid towards this
agreement in 2007. No services have been performed in relation to the financing
agreement since its inception. These deferred financing costs should have been
fully accreted as of September 30, 2009.
The effect on the Company's previously issued September 30, 2009 financial
statements are summarized as follows:
BALANCE SHEET September 30, September 30,
2009 2009
(Amended) (As Filed)
------------- ------------
(Unaudited) (Unaudited)
ASSETS
CURRENT ASSETS
Cash $ 2,560 $ 2,560
Prepaids 441 441
Deferred financing costs -- 50,000
Advances - related party 500,000 500,000
------------ ------------
Total current assets 503,001 553,001
FIXED ASSETS, net of accumulated depreciation of
$45,966 and $43,391, respectively 3,363 3,363
Total assets $ 506,364 $ 556,364
============ ============
Accumulated deficit during the development stage (18,621,433) (18,571,433)
------------ ------------
Total stockholders' deficit (5,946,542) (5,896,542)
------------ ------------
Total liabilities and
stockholders' deficit $ 506,364 $ 556,364
============ ============
2
STATEMENT OF OPERATIONS
Three Months Ended Nine Months Ended
September 30, September 30, September 30, September, 30
2009 2009 2009 2009
(Amended) (As Filed) (Amended) (As Filed)
------------- ------------- ------------- -------------
Operating loss (272,666) (272,666) (746,108) (746,108)
Other income (expense):
Interest income -- -- -- --
Interest expense (67,553) (67,553) (197,598) (197,598)
Financing fees (50,000) -- (50,000) --
------------- ------------- ------------- -------------
(117,553) (67,553) (247,598) (197,598)
Net Loss (390,219) (340,219) (993,706) (943,706)
Preferred stock dividends -- -- -- --
------------- ------------- ------------- -------------
Net loss allocable to common stockholders $ (390,219) $ (340,219) $ (993,706) $ (943,706)
============= ============= ============= =============
Net loss per common share - basic and
diluted $ (0.00) $ (0.00) $ (0.01) $ (0.01)
============= ============= ============= =============
Weighted average number of common
shares outstanding 144,913,157 144,913,157 141,093,679 141,093,679
============= ============= ============= =============
3
STATEMENT OF CASH FLOWS
September 30, September 30,
2009 2009
(Amended) (As Filed)
Cash Flows from Operating Activities:
Net Loss $ (993,706) $ (943,706)
Adjustments to reconcile net loss to
net cash used by operating activities:
Depreciation 2,574 2,574
Issuance of common stock for services 243,250 243,250
Accretion of debt issuance costs 50,000 -
Changes in assets and liabilities:
Prepaid expenses 1,421 1,421
Accounts payable and accrued expenses 213,787 213,787
Accrued expenses - related party 234,000 234,000
Net cash used in operating activities (248,674) (248,674)
In all other respects, this amended quarterly report on Form 10-Q/A is unchanged
from the quarterly report on Form 10-Q previously filed by the Company on
November 16, 2009.
4
TABLE OF CONTENTS
Page
Item 1. Financial Statements 6
Item 4T. Controls and Procedures 18
SIGNATURES 19
5
ITEM 1. FINANCIAL STATEMENTS.
VOYAGER ENTERTAINMENT INTERNATIONAL, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
SEPTEMBER 30, 2009
6
VOYAGER ENTERTAINMENT INTERNATIONAL, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, December 31,
2009 2008
(Restated)
------------- -------------
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS
Cash $ 2,560 $ 15,234
Prepaids 441 1,862
Deferred financing costs -- 50,000
Advances - related party 500,000 500,000
------------ ------------
Total current assets 503,001 567,096
FIXED ASSETS, net of accumulated depreciation of
$45,966 and $43,391, respectively 3,363 5,937
------------ ------------
Total assets $ 506,364 $ 573,033
============ ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 1,500,167 $ 1,286,380
Accrued expenses - related party 1,704,000 1,470,000
Note payable 1,855,000 1,855,000
Due to related parties 515,500 340,000
Loans and settlement payable 878,239 878,239
------------ ------------
Total current liabilities 6,452,906 5,829,619
------------ ------------
Total liabilities 6,452,906 5,829,619
COMMITMENTS & CONTINGENCIES -- --
STOCKHOLDERS' DEFICIT
Preferred stock: $0.001 par value; authorized 50,000,000 shares
Series A - 1,500,000 designated, none outstanding -- --
Series B - 10,000,000 designated, 0 and 1,000,000 outstanding
respectively -- 1,000
Common stock: $0.001 par value; authorized 200,000,000 shares;
issued and outstanding:151,402,287 and 132,027,287 respectively 151,402 132,027
Additional paid-in capital 13,212,239 12,937,489
Deferred construction costs paid with common stock (33,750) (84,375)
Loan collateral paid with common stock (750,000) (750,000)
Common stock payable 95,000 135,000
Accumulated deficit during the development stage (18,621,433) (17,627,727)
------------ ------------
Total stockholders' deficit (5,946,542) (5,256,586)
------------ ------------
Total liabilities and stockholders' deficit $ 506,364 $ 573,033
============ ============
See accompanying notes to these condensed consolidated financial statements.
7
VOYAGER ENTERTAINMENT INTERNATIONAL, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Nine Months Ended From inception
September 30, September 30, September 30, September, 30 March 1, 1997 to
2009 2008 2009 2008 September 30, 2009
(Restated) (Restated) (Restated)
------------- ------------- ------------- ------------- ------------------
Revenues $ -- $ -- $ -- $ -- $ --
Operating Expenses:
Professional and consulting fees 237,978 33,633 501,732 512,288 13,235,295
Project costs 1,968 13,376 134,535 28,973 330,475
Depreciation 629 1,600 2,574 5,715 45,965
Settlement expense -- -- -- -- 1,025,000
Other expense 32,091 32,322 107,267 100,232 1,267,388
------------- ------------- ------------- ------------- -------------
272,666 80,931 746,108 647,208 15,904,123
Operating loss (272,666) (80,931) (746,108) (647,208) (15,904,123)
Other income (expense):
Interest income -- 1 -- 43,751 132,528
Interest expense (67,553) (74,164) (197,598) (382,483) (2,799,838)
Financing fees (50,000) -- (50,000) -- (50,000)
------------- ------------- ------------- ------------- -------------
(117,553) (74,163) (247,598) (338,732) (2,717,310)
Net Loss (390,219) (155,094) (993,706) (985,940) (18,621,433)
Preferred stock dividends -- -- -- -- (130,000)
------------- ------------- ------------- ------------- -------------
Net loss allocable to common stockholders $ (390,219) $ (155,094) $ (993,706) $ (985,940) $ (18,751,433)
============= ============= ============= ============= =============
Net loss per common share - basic and diluted $ (0.00) $ (0.00) $ (0.01) $ (0.01)
============= ============= ============= =============
Weighted average number of common
shares outstanding 144,913,157 131,777,287 141,093,679 126,267,798
============= ============= ============= =============
See accompanying notes to these condensed consolidated financial statements.
8
VOYAGER ENTERTAINMENT INTERNATIONAL, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
From inception
September 30, September 30, March 1, 1997 to
2009 2008 September 30, 2009
(Restated) (Restated)
------------- ------------- ------------------
Cash Flows from Operating Activities:
Net Loss $ (993,706) $ (985,940) $(18,621,433)
Adjustments to reconcile net loss to
net cash used by operating activities:
Depreciation 2,574 5,715 45,965
Issuance of common stock for services 243,250 208,000 6,511,565
Issuance of common stock for nullification fee -- -- 375,000
Issuance of common stock for accrued --
bonus -- -- 750,000
Interest expense from the issuance of
common stock -- 150,000 709,088
Accretion of debt issuance costs 50,000 -- 500,000
Changes in assets and liabilities:
Prepaid expenses 1,421 1,420 (441)
Accounts payable and accrued expenses 213,787 116,801 1,494,427
Accrued expenses - related party 234,000 160,000 1,704,000
Accrued settlement obligation -- -- 650,000
Net cash used in operating
------------ ------------ ------------
activities (248,674) (344,004) (5,881,829)
Cash flows from Investing Activities:
Payments to acquire fixed assets -- (2,481) (49,850)
Proceeds from Note Receivable -- -- (500,000)
------------ ------------ ------------
Net cash used in investing activities -- (2,481) (549,850)
Cash flows from Financing Activities:
Proceeds from notes payable, short term debt -- -- 2,103,239
Proceeds from notes payable, due to related parties 177,500 161,000 528,000
Payment on notes payable, short term debt -- -- (20,000)
Payment on notes payable, due to related parties (2,000) (6,000) (12,500)
Proceeds from the sale of preferred stock -- -- 150,000
Proceeds from the sale of common stock 60,500 135,000 3,725,500
Proceeds from common stock payable -- 20,000 60,000
Payments for loan fees -- -- (50,000)
Payments for deferred financing costs -- -- (50,000)
Net cash provided by financing
------------ ------------ ------------
activities 236,000 310,000 6,434,239
Net (decrease) increase in cash (12,674) (36,485) 2,560
Cash, beginning of year 15,234 42,076 --
------------ ------------ ------------
Cash, end of year $ 2,560 $ 5,591 $ 2,560
============ ============ ============
Cash paid for:
Interest $ 132 $ 56 $ 93,212
Income Taxes $ -- $ -- $ --
See accompanying notes to these condensed consolidated financial statements.
9
VOYAGER ENTERTAINMENT INTERNATIONAL, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(CONTINUED)
(UNAUDITED)
From inception
September 30, September 30, March 1, 1997 to
2009 2008 September 30, 2009
------------- ------------- ------------------
Supplemental schedule of non-cash Investing
and Financing Activities:
Common stock issued for financing costs $ -- $ -- $ 988,300
Common stock issued for loan collateral $ -- $ -- $ 750,000
Deferred construction costs, adjusted
to fair value $ 50,625 $ 70,313 $ 33,750
Conversion of preferred shares $ 2,000 $ -- $ 14,600
Common stock issued as acquisition deposit $ -- $ -- $ 750,000
Common stock cancelled due to business combination
cancellation $ -- $ 375,000 $ 375,000
Common stock payable $ (40,000) $ 75,000 $ 95,000
See accompanying notes to these condensed consolidated financial statements.
10
VOYAGER ENTERTAINMENT INTERNATIONAL, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1. Basis of Presentation and Organization and Significant Accounting
Policies
Basis of Presentation and Organization
--------------------------------------
The accompanying Condensed Consolidated Financial Statements of Voyager
Entertainment International, Inc. (the "Company") should be read in conjunction
with the Company's Annual Report on Form 10-K for the year ended December 31,
2008. Significant accounting policies disclosed therein have not changed except
as noted below.
In June 2009, the Financial Accounting Standards Board ("FASB") issued the FASB
Accounting Standards Codification(TM) and the Hierarchy of Generally Accepted
Accounting Principles (the "Codification"). The Codification became the single
official source of authoritative, nongovernmental U.S. generally accepted
accounting principles ("GAAP"). The Codification did not change GAAP but
reorganizes the literature. The Codification is effective for interim and annual
periods ending after September 15, 2009, and the Company adopted the
Codification during the three months ended September 30, 2009. The Company has
begun to use the new Codification when referring to GAAP in its quarterly and
annual reports filed on Forms 10-Q and 10-K respectively. This guidance does not
have an impact on the consolidated results of the Company.
Voyager Entertainment International, Inc., a North Dakota corporation, formerly
known as Dakota Imaging, Inc. and incorporated on January 31, 1991, is in the
entertainment development business with plans to develop the world's tallest
Observation Wheel on the Las Vegas strip area. During April 2002, the Company
changed its name from Dakota Imaging, Inc. to Voyager Entertainment
International, Inc. and adopted a new fiscal year. On June 11, 2003, the Company
became a Nevada Corporation.
As used in these Notes to the consolidated financial statements, the terms the
"Company", "we", "us", "our" and similar terms refer to Voyager Entertainment
International, Inc. and, unless the context indicates otherwise, its
consolidated subsidiaries. As of September 30, 2009, the Company's wholly-owned
subsidiary includes Voyager Entertainment Holdings, Inc. ("Holdings"), a Nevada
corporation. Outland Development, LLC has been a dormant company and was
discontinued as of June 30, 2009. Voyager Viridian LLC, a wholly-owned
subsidiary, was formed on August 3, 2009.
These condensed consolidated financial statements include the accounts of the
Company and its subsidiaries. All significant intercompany transactions and
accounts have been eliminated in consolidation.
Basis of Financial Statement Presentation
-----------------------------------------
The accompanying unaudited condensed consolidated financial statements have been
prepared by the Company pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted in accordance with such
rules and regulations. The information furnished in the interim condensed
consolidated financial statements includes normal recurring adjustments and
reflects all adjustments, which, in the opinion of management, are necessary for
a fair presentation of such financial statements. Although management believes
the disclosures and information presented are adequate to make the information
not misleading, these interim condensed consolidated financial statements should
be read in conjunction with the Company's most recent audited financial
statements and notes thereto included in its December 31, 2008 Annual Report on
Form 10-K. Operating results for the period ended September 30, 2009 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2009.
Going Concern
-------------
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplate continuation of the
Company as a going concern. However, the Company has not begun generating
revenue, is considered a development stage company, has experienced recurring
net operating losses, had a net loss of $993,706 and $985,940 for the nine
months ended September 30, 2009 and 2008, and a working capital deficiency of
$5,949,905 at September 30, 2009. These factors raise substantial doubt about
the Company's ability to continue as a going concern. These financial statements
do not include any adjustments relating to the recoverability and classification
of recorded asset amounts, or amounts and classification of liabilities that
might result from this uncertainty.
11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Fair Value Accounting
---------------------
As required by the Fair Value Measurements and Disclosures Topic of the FASB
ASC, fair value is measured based on a three-tier fair value hierarchy, which
prioritizes the inputs used in measuring fair value as follows: (Level 1)
observable inputs such as quoted prices in active markets; (Level 2) inputs,
other than the quoted prices in active markets, that are observable either
directly or indirectly; and (Level 3) unobservable inputs in which there is
little or no market data, which require the reporting entity to develop its own
assumptions.
The three levels of the fair value hierarchy are described below:
Level 1 Unadjusted quoted prices in active markets that are
accessible at the measurement date for identical,
unrestricted assets or liabilities;
Level 2 Quoted prices in markets that are not active, or inputs
that are observable, either directly or indirectly, for
substantially the full term of the asset or liability;
Level 3 Prices or valuation techniques that require inputs that are
both significant to the fair value measurement and
unobservable (supported by little or no market activity).
RECENTLY ADOPTED AND RECENTLY ISSUED ACCOUNTING GUIDANCE
Adopted
-------
On September 30, 2009, the Company adopted changes issued by the Financial
Accounting Standards Board ("FASB") to the authoritative hierarchy of GAAP.
These changes establish the FASB Accounting Standards Codification(TM)
("Codification") as the source of authoritative accounting principles recognized
by the FASB to be applied by nongovernmental entities in the preparation of
financial statements in conformity with GAAP. Rules and interpretive releases of
the Securities and Exchange Commission ("SEC") under authority of federal
securities laws are also sources of authoritative GAAP for SEC registrants. The
FASB will no longer issue new standards in the form of Statements, FASB Staff
Positions, or Emerging Issues Task Force Abstracts; instead the FASB will issue
Accounting Standards Updates. Accounting Standards Updates will not be
authoritative in their own right as they will only serve to update the
Codification. These changes and the Codification itself do not change GAAP.
Other than the manner in which new accounting guidance is referenced, the
adoption of these changes had no impact on the Financial Statements.
In April 2009, the FASB issued authoritative guidance for "Interim Disclosures
about Fair Value of Financial Instruments," which requires disclosures about
fair value of financial instruments for interim reporting periods of publicly
traded companies as well as in annual financial statements. This guidance also
requires those disclosures to be in summarized financial information at interim
reporting periods. This guidance is effective for interim reporting periods
ending after June 15, 2009. The Company adopted this guidance in the second
quarter of 2009 and it did not have a material impact on the financial
statements.
In April 2009, the FASB issued authoritative guidance for the "Recognition and
Presentation of Other-Than-Temporary Impairments" in order to make existing
guidance more operational and to improve the presentation and disclosure of
other-than-temporary impairments on debt and equity securities in the financial
statements. The Company adopted this guidance in the second quarter of 2009 and
it did not have a material impact on the financial statements.
In April 2009, the FASB issued authoritative guidance for "Determining Fair
Value When the Volume and Level of Activity for the Asset or Liability Have
Significantly Decreased and Identifying Transactions That Are Not Orderly." This
guidance provides additional direction for estimating fair value in accordance
with established guidance for "Fair Value Measurements," when the volume and
level of activity for the asset or liability have significantly decreased. This
guidance also includes direction on identifying circumstances that indicate a
transaction is not orderly. This guidance is effective for interim and annual
reporting periods ending after June 15, 2009. The Company adopted this guidance
in the second quarter of 2009 and it did not have a material impact on the
financial statements.
In June 2009, the FASB issued authoritative guidance which establishes general
standards of accounting for and disclosure of events that occur after the
balance sheet date but before financial statements are issued or are available
to be issued. This guidance applies to both interim financial statements and
annual financial statements and is effective for interim or annual financial
periods ending after June 15, 2009. This guidance does not have a material
impact on our financial statements.
12
Issued
------
In June 2009, the FASB issued authoritative guidance for "Accounting for
Transfers of Financial Assets," which eliminates the concept of a "qualifying
special-purpose entity," changes the requirements for derecognizing financial
assets, and requires additional disclosures in order to enhance information
reported to users of financial statements by providing greater transparency
about transfers of financial assets, including securitization transactions, and
an entity's continuing involvement in and exposure to the risks related to
transferred financial assets. This guidance is effective for fiscal years
beginning after November 15, 2009. The Company will adopt this guidance in
fiscal 2010 and does not expect that the adoption will have a material impact on
the consolidated financial statements.
In June 2009, the FASB issued authoritative guidance amending existing guidance.
The amendments include: (1) the elimination of the exemption for qualifying
special purpose entities, (2) a new approach for determining who should
consolidate a variable-interest entity, and (3) changes to when it is necessary
to reassess who should consolidate a variable-interest entity. This guidance is
effective for the first annual reporting period beginning after November 15,
2009 and for interim periods within that first annual reporting period. The
Company will adopt this guidance in fiscal 2010. The Company does not expect
that the adoption will have a material impact on the consolidated financial
statements.
Note 2. Stockholders' Deficit
The authorized common stock of the Company consists of 200,000,000 shares of
common stock with par value of $0.001 and 50,000,000 shares of preferred stock.
For our preferred stock, we have designated two series: 1,500,000 shares of
Series A Preferred Stock and 10,000,000 shares of Series B Preferred Stock both
with a par value of $0.001.
In February 2009, the Company issued 25,000 shares of common stock for $500 cash
or $0.02 per share.
In February 2009, the Company issued 225,000 shares of common stock for
professional services rendered for total compensation of $4,500 or $0.02 per
share.
In March 2009, the Company issued 2,000,000 shares of common stock payable or
$0.02 per share for which, $40,000 cash was received in 2008.
In March 2009, the Company issued 1,500,000 shares of common stock for
professional services rendered for total compensation of $45,000 or $0.03 per
share.
In April 2009, the Company issued 375,000 shares of common stock for
professional services rendered for total compensation of $7,500 or $0.02 per
share.
In May 2009, the Company issued 3,000,000 shares of common stock for
professional services rendered for total compensation of $75,000 or $0.03 per
share.
In August 2009, the Company issued 7,250,000 shares of common stock for
profession services rendered for total compensation of $111,250 or $0.02 per
share.
In August 2009, the Company issued 3,000,000 shares of common stock for $60,000
cash or $0.02 per share.
In September 2009, 1,000,000 shares of Series B Preferred Stock were converted
to 2,000,000 shares of common stock with a valuation of $0.01 per share.
Note 3. Related Party Transactions
Synthetic Systems
-----------------
During the quarters ended September 30, 2009 and 2008, the Company incurred
consulting fees of approximately $37,000 and $35,000 respectively per month to
Synthetic Systems, LLC for a total of $333,000 and $315,000. The Company leased
furniture and equipment from Synthetic Systems for a total of $1,150 per month
for the quarters ending September 30, 2009 and 2008. The Company also paid on
behalf of Synthetic Systems, LLC office rent expenses of $25,499 and $25,912, as
of September 30, 2009 and 2008, respectively. Synthetic Systems is jointly owned
by our Chief Executive Officer and Secretary.
13
Western Architectural
---------------------
As previously disclosed in our 2008 Form 10-K, on May 30, 2002, the Company
executed a Contractor Agreement with Western Architectural Services, LLC
("Western") where Western would provide to the Company certain architectural
services for the Las Vegas Observation Wheel Project in exchange for which the
Company issued 2,812,500 shares of restricted common stock to Western. Although
he was not an affiliate of the Company upon execution of the Contractor
Agreement, Western's Chief Executive Officer is currently an executive officer,
director and significant stockholder of the Company. We have accounted for these
shares as Deferred Construction Costs in these financial statements.
Western plans to sell the 2,812,500 shares of common stock at the time before
and during the contract to purchase supplies and to pay subcontractor fees for
the construction of a wheel. At the time the contract was issued the shares of
the Company were trading at $6.50 per share, our current stock price is trading
significantly below that amount. If at the time Western performs the services
contracted and the share price is below $6.50 per share, the Company will be
required to issue additional shares to Western in order for the contract to be
fulfilled. Western's Chief Executive Officer is currently an affiliate of the
Company which will also limit the amount of shares that can be sold based on the
trading volume and shares outstanding in accordance with Rule 144 of the
Securities Act of 1933. As of September 30, 2009, we have marked these shares to
market using the period end closing price of our stock. The change in valuation
was debited to additional-paid in capital due to the deferred construction cost
nature of these shares.
As of September 30, 2009, we have received advances in the amounts of $305,500
from Western Architectural Services, LLC. The advances are unsecured, carry no
interest and are due upon demand. As of September 30, 2009, no payments have
been made to Western.
Directors and Officers
----------------------
On occasion, our Officers and Directors will loan funds to the Company so that
operations can continue.
On September 10, 2009, our Secretary loaned the Company $2,000 with an interest
rate of 12% per annum. On September 23, 2009, the loan was paid in full with $9
interest.
As of September 30, 2009, we have received advances in the amounts of $210,000
from our Chief Operating Officer. The advances are unsecured, carry no interest
and are due upon demand.
Interest on related party loans is not imputed due to the lack of terms related
to the debt.
Note 4. Fair Value
In accordance with authoritative guidance, the table below sets forth the
Company's financial assets and liabilities measured at fair value by level
within the fair value hierarchy. Assets and liabilities are classified in their
entirety based on the lowest level of input that is significant to the fair
value measurement.
Fair Value at September 30, 2009
-------------------------------------------
Total Level 1 Level 2 Level 3
------- ------- ------- -------
Assets:
Deferred construction costs $33,750 $33,750 $ -- $ --
------- ------- ------ -------
$33,750 $33,750 $ -- $ --
======= ======= ====== =======
Liabilities:
None $ -- $ -- $ -- $ --
Note 5. Deferred Financing Costs
The Company entered into a financing agreement dated July 11, 2007 which expired
July 11, 2009. Deferred financing costs of $50,000 were paid towards this
agreement in 2007. No services have been performed or additional financing
received in relation to the agreement since its inception. These deferred
financing costs have been fully accreted as of September 30, 2009.
14
Note 6. Restatement
The Company determined, during the preparation of the Form 10-K for the year
ended December 31, 2009, that a financing agreement dated July 11, 2007 expired
July 11, 2009. Deferred financing costs of $50,000 were paid towards this
agreement in 2007. No services have been performed in relation to the financing
agreement since its inception. These deferred financing costs should have been
fully accreted as of September 30, 2009.
The effect on the Company's previously issued September 30, 2009 financial
statements are summarized as follows:
BALANCE SHEET
September 30, September 30,
2009 2009
(Amended) (As Filed)
------------ ------------
(Unaudited) (Unaudited)
ASSETS
CURRENT ASSETS
Cash $ 2,560 $ 2,560
Prepaids 441 441
Deferred financing costs -- 50,000
Advances - related party 500,000 500,000
------------ ------------
Total current assets 503,001 553,001
FIXED ASSETS, net of accumulated depreciation of
$45,966 and $43,391, respectively 3,363 3,363
Total assets $ 506,364 $ 556,364
============ ============
Accumulated deficit during the development stage (18,621,433) (18,571,433)
------------ ------------
Total stockholders' deficit (5,946,542) (5,896,542)
------------ ------------
Total liabilities and
stockholders' deficit $ 506,364 $ 556,364
============ ============
15
STATEMENT OF OPERATIONS
Three Months Ended Nine Months Ended
September 30, September 30, September 30, September, 30
2009 2009 2009 2009
(Amended) (As Filed) (Amended) (As Filed)
------------- ------------- ------------- -------------
Operating loss (272,666) (272,666) (746,108) (746,108)
Other income (expense):
Interest income -- -- -- --
Interest expense (67,553) (67,553) (197,598) (197,598)
Financing fees (50,000) -- (50,000) --
------------- ------------- ------------- -------------
(117,553) (67,553) (247,598) (197,598)
Net Loss (390,219) (340,219) (993,706) (943,706)
Preferred stock dividends -- -- -- --
------------- ------------- ------------- -------------
Net loss allocable to common stockholders $ (390,219) $ (340,219) $ (993,706) $ (943,706)
============= ============= ============= =============
Net loss per common share - basic and
diluted $ (0.00) $ (0.00) $ (0.01) $ (0.01)
============= ============= ============= =============
Weighted average number of common
shares outstanding 144,913,157 144,913,157 141,093,679 141,093,679
============= ============= ============= =============
16
STATEMENT OF CASH FLOWS
September 30, September 30,
2009 2009
(Amended) (As Filed)
Cash Flows from Operating Activities:
Net Loss $(993,706) $(943,706)
Adjustments to reconcile net loss to
net cash used by operating
activities:
Depreciation 2,574 2,574
Issuance of common stock for services 243,250 243,250
Accretion of debt issuance costs 50,000 --
Changes in assets and liabilities:
Prepaid expenses 1,421 1,421
Accounts payable and accrued expenses 213,787 213,787
Accrued expenses - related party 234,000 234,000
Accrued settlement obligation -- --
Net cash used in operating activities (248,674) (248,674)
In all other respects, this amended quarterly report on Form 10-Q/A is unchanged
from the quarterly report on Form 10-Q previously filed by the Company on
November 16, 2009.
Note 7. Subsequent Events
Management evaluated all activity of the Company through November 16, 2009 (the
issue date of the Financial Statements) and concluded that no subsequent events
have occurred that would require recognition in the Financial Statements or
disclosure in the Notes to the Financial Statements.
17
ITEM 4T. CONTROLS AND PROCEDURES.
(a) Disclosure Controls and Procedures
Based on the management's evaluation (with the participation of our President
and Principal Financial Officer), our President and Principal Financial Officer
has concluded that as of September 30, 2009, our disclosure controls and
procedures (as defined in Rules 13a - 15(e) and 15d-15(e) under the Securities
Exchange of 1934 (the "Exchange Act") are effective to provide reasonable
assurance that the information required to be disclosed in this quarterly report
on Form 10-Q is recorded, processed, summarized and reported within the time
period specified in Securities and Exchange Commission rules and forms, and that
such information is accumulated and communicated to the Company's management,
including the Chief Executive Officer and Principal Financial Officer, as
appropriate, to allow for timely decisions regarding required disclosure.
(b) Internal control over financial reporting
Management's quarterly report on internal control over financial reporting
--------------------------------------------------------------------------
Management is responsible for establishing and maintaining adequate internal
control over financial reporting as defined in Rules 13a- 15(f) and 15d-15(f)
under the Exchange Act. Our internal control over financial reporting is
intended to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in
accordance with U.S. GAAP. Our internal control over financial reporting should
include those policies and procedures that:
o pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of our
assets;
o provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance
with applicable GAAP, and that receipts and expenditures are being
made only in accordance with authorizations of management and the
Board of Directors; and
o provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use or disposition of our assets that
could have a material effect on the financial statements.
Under the supervision and with the participation of our management, our Chief
Executive Officer and Principal Financial Officer, we have evaluated the
effectiveness of our internal control over financial reporting and preparation
of our quarterly financial statements as of September 30, 2009 and believe they
are ineffective due to our oversight of the expiration of the financing
agreement described in our amended financial statements. We have assessed this
inefficiency as an isolated incident and corrective action has been taken.
Attestation report of the registered public accounting firm
-----------------------------------------------------------
This quarterly report does not include an attestation report of the Company's
registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by the Company's
registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit the Company to provide only management's
report in this quarterly report.
Changes in internal control over financial reporting
----------------------------------------------------
Based on the evaluation as of September 30, 2009, our Chief Executive Officer
and Principal Financial Officer has concluded that there were no significant
changes in our internal controls over financial reporting or in any other areas
that could significantly affect our internal controls subsequent to the date of
this most recent evaluation and there were no corrective actions during the
quarter with regard to significant deficiencies or material weaknesses.
18
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)
Dated March 24, 2010
By: /s/ Richard Hannigan
--------------------------------
Richard Hannigan,
President/Director
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Richard Hannigan, Sr.
--------------------------------
Richard Hannigan, Sr.
President/CEO/Director
March 24, 2010
By: /s/ Myong Hannigan
--------------------------------
Myong Hannigan
Secretary/Treasurer/Director
March 24, 2010
By: /s/ Tracy Jones
--------------------------------
Tracy Jones
COO/Director
March 24, 2010
19