UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended: June 30, 2003
Commission File Number: 000-33151
VOYAGER ENTERTAINMENT INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Nevada 54-2110681
(State of incorporation) (I.R.S. Employer Identification No.)
4483 West Reno Avenue, Las Vegas, NV 89118
(Address of principal executive offices)
(702) 221-8070
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed
since last report.)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past
12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
There are 41,247,500 shares of common stock issued and outstanding
as of August 14, 2003.
INDEX
Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements................................... 3
Consolidated Balance Sheet (Unaudited)....................... 3
Consolidated Statements of Operations (Unaudited)............ 4
Consolidated Statements of Stockholders' Deficit
(Unaudited).................................................. 5
Consolidated Statements of Cash Flows (Unaudited)............ 6
Notes to Consolidated Financial Statements................. 7-12
Item 2. Management's Discussion and Plan of Operation........... 13
Item 3. Controls and Procedures................................. 18
PART II - OTHER INFORMATION
Item 1. Legal Proceedings....................................... 19
Item 2. Changes in Securities................................... 19
Item 3. Defaults Upon Senior Securities......................... 20
Item 4. Submission of Matters to a Vote of Security Holders..... 20
Item 5. Other Information....................................... 21
Item 6. Exhibits and Reports on Form 8-K........................ 22
Signatures.......................................................... 23
Certifications...................................................... 24
2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
VOYAGER ENTERTAINMENT INTERNATIONAL, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEET - JUNE 30, 2003
(UNAUDITED)
ASSETS
Current assets:
Cash $ 42,951
Prepaid expenses 35,000
Other current assets 4,268
-----------
Total current assets $ 82,219
Property and equipment, net of
accumulated depreciation 5,084
------------
Total assets $ 87,303
============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable and accrued expenses $ 174,900
Loans payable, including settlement fee 940,093
Notes payable 605,000
-----------
Total current liabilities $ 1,719,993
Stockholders' deficit:
Preferred stock - Series A; $.001 par
value; 1,500,000 shares authorized,
1,500,000 shares outstanding 1,500
Preferred stock - Series B; $.001 par
value; 10,000,000 shares authorized,
1,000,000 shares outstanding 1,000
Common stock; $.001 par value; 200,000,000
shares authorized, 41,253,500 shares
issued and outstanding 41,253
Additional paid-in capital 19,923,607
Deferred construction cost (18,304,135)
Deficit accumulated during development
stage (3,295,915)
------------
Total stockholders' deficit (1,632,690)
------------
Total liabilities and stockholders'
deficit $ 87,303
============
The accompanying notes form an integral part of these
consolidated financial statements.
3
VOYAGER ENTERTAINMENT INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
For the period
since inception on
Three months ended Six Months Ended March 1, 1997 to
June 30, 2003 June 30, 2002 June 30, 2003 June 30, 2002 June 30, 2003
-------------- -------------- -------------- ------------- ----------------
Net revenue $ - $ - $ - $ - $ -
-------------- -------------- -------------- ------------- ----------------
Operating expenses:
Professional and
consulting fees 35,325 282,334 86,908 533,579 1,519,452
Stock discount expense - 200,000 - 200,000 200,000
Interest 348,302 - 467,316 - 527,101
Project costs 1,832 19,413 2,460 24,567 79,584
Rent expense 6,975 - 13,950 - 46,715
Settlement expense 711,854 711,854 711,854
Other operating expenses 67,017 28,711 70,475 55,987 211,209
-------------- -------------- -------------- ------------- ----------------
1,171,305 530,458 1,352,963 814,133 3,295,915
-------------- -------------- -------------- ------------- ----------------
Loss from operations (1,171,305) (530,458) (1,352,963) (814,133) (3,295,915)
-------------- -------------- -------------- ------------- ----------------
Income taxes - - - - -
-------------- -------------- -------------- ------------- ----------------
Net loss $(1,171,305) $ (530,458) $ (1,352,963) $ (814,133) $(3,295,915)
============== ============== =============== ============= ================
Net loss per share - basic
and diluted $ (0.03) $ (0.02) $ (0.03) $ (0.03) $ (0.09)
============== ============== =============== ============= ================
Weighted average common stock
shares outstanding - basic
and diluted 38,795,357 35,211,703 38,724,323 30,593,619 34,973,308
============== ============== =============== ============= ================
The accompanying notes are an integral part of these financial statements.
4
VOYAGER ENTERTAINMENT INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT (UNAUDITED)
FOR THE PERIOD SINCE INCEPTION ON MARCH 1, 1997 TO JUNE 30, 2003
Deficit
Preferred Stock Preferred Stock accumulated
Series A Series B Common Stock Additional Deferred during Total
----------------- ------------------ -------------------- paid-in construction development stockholders'
Shares Amount Shares Amount Shares Amount capital costs stage equity
--------- ------ --------- ------- ---------- -------- ----------- ------------- ------------ -----------
For the period since
inception on March 1,
1997 to December 31,
2000 (as restated for
reorganization) - $ - - $ - 15,000,000 $ 15,000 $ 20,000 $ - $ (87,193) $ (52,193)
Net loss for the year
ended December 31,
2001 - - - - - - - - (101,432) (101,432)
--------- ----- --------- ------- ---------- -------- ----------- ------------- ------------ ------------
Balance at December 31,
2001 - - - - 15,000,000 15,000 20,000 - (188,625) (153,625)
Issuance of stock
for cash and services
(pre-merger) 2,160,000 2,160 - - - - 25,840 - - 28,000
Conversion of
preferred stock to
common stock (660,000) (660) - - 6,600,000 6,600 (5,940) - - -
Acquisition of net
assets of Dakota - - - - 11,615,000 11,615 (11,615) - - -
Issuance of common
stock for cash -
February 15, 2002 - - - - 800,000 800 399,200 - - 400,000
Issuance of common
stock for services -
April 2002 - - - - 200,000 200 399,800 - - 400,000
Issuance of common
stock for Architectural
agreement - May 2002 - - - - 2,812,500 2,813 18,138,722 (18,141,535) - -
Issuance of common
stock for cash -
June 2002 - - - - 50,000 50 149,950 - - 150,000
Issuance of common
stock for Architectural
agreement - October
2002 - - - - 600,000 600 162,000 (162,600) - -
Issuance of common stock
for financing costs -
November 2002 - - - - 650,000 650 162,500 - - 163,150
Issuance of stock
for services -
October 2002 - - - - 325,000 325 74,750 - - 75,075
Net loss for the year
ended December 31,
2002 - - - - - - - - (1,754,327) (1,754,327)
Balance at
December 31, 2002 1,500,000 1,500 - - 38,652,500 38,653 19,515,207 (18,304,135) (1,942,952) (691,727)
Issuance of preferred
stock for cash -
June 25, 2003 - - 1,000,000 1,000 - - 99,000 - - 100,000
Issuance of common
stock for financing
costs - June 2003 - - - - 2,600,000 2,600 309,400 - - 312,000
Net loss for the six
months ended June 30,
2003 - - - - - - - - (1,352,963) (1,352,963)
--------- ----- --------- ------- ---------- -------- ----------- ------------- ------------ ------------
Balance at June 30,
2003 1,500,000 $1,500 1,000,000 $ 1,000 41,252,500 $ 41,253 $19,923,607 $(18,304,135) $(3,295,915) $(1,632,690)
The accompanying notes are an integral part of these financial statements.
5
VOYAGER ENTERTAINMENT INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the period
since inception on
Six Months Ended Six Months Ended March 1, 1997 to
June 30, 2003 June 30, 2002 June 30, 2003
---------------- ---------------- ----------------
Cash flows provided by (used for)
operating activities:
Net loss $(1,352,963) $ (814,133) $(3,295,915)
------------ ------------ ------------
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation 426 115 1,104
Issuance of common stock for financing
and services 312,000 218,000 605,075
Stock discount expense - 200,000 200,000
Merger expense - - -
Interest expense from the issuance of
common stock 113,150 - 163,150
Changes in assets and liabilities:
(Increase) decrease in assets:
Prepaid expenses (35,000) 267 (35,000)
Other current assets - - (4,268)
Increase (decrease) in liabilities:
Accounts payable and accrued expenses (23,227) (84,010) 174,906
Accrued settlement obligation 711,854 - 711,854
------------ ------------ ------------
Net cash used for operating activities (273,760) (479,761) (1,479,094)
------------ ------------ ------------
Cash flows used for investing activities -
payments to acquire property and equipment (475) (6,260) (6,194)
Cash flows provided by (used for) financing
activities:
Due to related party - (44,148) -
Due from related party - (4,267) -
Proceeds from notes payable 105,000 - 833,239
Proceeds from sale of preferred stock 100,000 - 100,000
Proceeds from issuance of common stock - 560,000 595,000
------------ ------------ ------------
Net cash provided by financing
activities 205,000 511,585 1,528,239
------------ ------------ ------------
Net increase in cash (69,235) 25,564 42,951
Cash, beginning of period 112,186 256 -
------------ ------------ ------------
Cash, end of period $ 42,951 $ 25,820 $ 42,951
============ ============ ============
Cash paid during the period for:
Interest expense $ - $ - $ -
============ ============ ============
Income taxes $ - $ - $ -
============ ============ ============
Non cash financing activity:
Common stock issued for services $ - $ 418,000 $ 493,075
============ ============ ============
Common stock issued for financing
costs and services $ 312,000 $ - $ 475,150
============ ============ ============
Common stock issued for Architectural
Agreement $ - $ - $18,304,135
============ ============ ============
Conversion of preferred stock to common
stock $ - $ - $ 6,600
============ ============ ============
The accompanying notes are an integral part of these financial statements.
6
VOYAGER ENTERTAINMENT INTERNATIONAL, INC.
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(1) Summary of Significant Accounting Policies:
Business Activity:
The Company is in the entertainment development business and
is planning the development of the world's tallest Ferris
Wheel on the Las Vegas Strip.
Plan of Reorganization and Basis of Presentation:
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.
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, and not
of Ventures.
The consolidated financial statements presented include
the accounts of Outland from its inception (March 1,
1997) through the reorganization.
7
VOYAGER ENTERTAINMENT INTERNATIONAL, INC.
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(1) Summary of Significant Accounting Policies Continued:
Plan of Reorganization and Basis of Presentation, Continued:
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, of which,
1,500,000 Series A preferred shares (converted to
15,000,000 common shares) have been presented as issued
since inception. Pursuant to the terms of the merger,
Ventures merged with DSC wherein DSC ceased to exist and
Ventures became a wholly owned subsidiary of Dakota.
Concurrent with the closing of the Merger:
a) Dakota cancelled 47,000,000 shares (9,400,000 shares prior
to 5 for 1 forward split) held by certain shareholders of Dakota
in exchange for certain assets and liabilities of Dakota; and
b) The Company issued 21,600,000 shares of its common stock for
the conversion of 2,160,000 shares of the Series A convertible
preferred stock issued (1,500,000 preferred shares converted into
15,000,000 common shares were presented as issued since inception
and the remaining 660,000 preferred shares were issued for stock
and services which converted into 6,600,000 shares of common
stock).
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.
In accounting for this transaction:
i) Ventures are deemed to be the purchaser and surviving
company for accounting purposes and the transaction was treated
as a recapitalization. Accordingly, its net assets are included
in the balance sheet at their historical book values; its
financial position and results of operations have been presented
for the periods preceding the Merger.
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.
During April 2002, the Company changed its name from
Dakota Imaging, Inc. to Voyager Entertainment
International, Inc. and adopted a new fiscal year-end of
December 31.
8
VOYAGER ENTERTAINMENT INTERNATIONAL, INC.
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(1) Summary of Significant Accounting Policies Continued:
Plan of Reorganization and Basis of Presentation, Continued:
Going Concern
-------------
The Company's financial statements have been presented
on the basis that the Company will continue as a going
concern, which contemplates the realization of assets
and the satisfaction of liabilities in the normal course
of business. The Company has no established source of
revenue, has a working capital deficit of $1,637,774,
has an accumulated deficit of $3,295,915, incurred
significant net loss and has used cash for operating
activities of $273,760, all of which raise substantial
doubt about its ability to continue as a going concern.
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.
Other Comprehensive Loss:
Other comprehensive loss consisted of net loss only
and accordingly, a Statement of Comprehensive Loss has
not been presented.
Net Loss Per Share:
Net loss per share has been computed using the
weighted average number of common shares outstanding
during the six months ended June 30, 2003 and 2002. There
are no common stock equivalent shares outstanding.
9
VOYAGER ENTERTAINMENT INTERNATIONAL, INC.
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(1) Summary of Significant Accounting Policies Continued:
Recent Accounting Pronouncements:
During April 2003, the FASB issued SFAS 149 - "Amendment
of Statement 133 on Derivative Instruments and Hedging
Activities", effective for contracts entered into or
modified after June 30, 2003, except as stated below and
for hedging relationships designated after June 30,
2003. In addition, except as stated below, all
provisions of this Statement should be applied
prospectively. The provisions of this Statement that
relate to Statement 133 Implementation Issues that have
been effective for fiscal quarters that began prior to
June 15, 2003, should continue to be applied in
accordance with their respective effective dates. In
addition, paragraphs 7(a) and 23(a), which relate to
forward purchases or sales of when-issued securities or
other securities that do not yet exist, should be
applied to both existing contracts and new contracts
entered into after June 30, 2003. The Company does not
participate in such transactions, however, is evaluating
the effect of this new pronouncement, if any, and will
adopt FASB 149 within the prescribed time.
During May 2003, the FASB issued SFAS 150 - "Accounting
for Certain Financial Instruments with Characteristics
of both Liabilities and Equity", effective for financial
instruments entered into or modified after May 31, 2003,
and otherwise is effective at the beginning of the first
interim period beginning after June 15, 2003. This
Statement establishes standards for how an issuer
classifies and measures certain financial instruments
with characteristics of both liabilities and equity. It
requires that an issuer classify a freestanding
financial instrument that is within its scope as a
liability (or an asset in some circumstances). Many of
those instruments were previously classified as equity.
Some of the provisions of this Statement are consistent
with the current definition of liabilities in FASB
Concepts Statement No. 6, Elements of Financial
Statements. The Company is evaluating the effect of this
new pronouncement and will adopt FASB 150 within the
prescribed time.
(2) Loans Payable:
Loans payable had no stated interest rate, were due on demand
and unsecured. Interest of $13,500 has been accrued at an
estimated market interest rate of 8% and is included in
accounts payable and accrued expenses. The original balance
was $228,239 as of June 30, 2003 and the proceeds were used
for operating capital during the year ended December 31,
2002. In March 2003, a claim of $1.46 million was asserted
by the lender. During the three months ended March 31, 2003,
the Company did not accrue any claimed amounts in excess of
$288,239 since management believed the claims were frivolous
and they planned to vigorously defend. Due to additional
resources needed by management to defend these claims and how
it would distract management's efforts from moving forward with
the business plan, a settlement agreement was consummated with
the lender in August 2003. The Company has agreed to pay a
settlement amount of $711,854, including imputed interest
without claiming any fault or wrong doing. The total
obligation including this settlement as of August 18, 2003 is
$953,593. These amounts are payable only from proceeds of any
project funding. The first half of this balance is payable at
the closing of the first round of project funding and the
remaining balance is due at the closing of any subsequent
project funding.
10
VOYAGER ENTERTAINMENT INTERNATIONAL, INC.
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(3) Note Payable:
On November 19, 2002, the Company entered into a line of
credit financing agreement in the amount of $2,500,000.
Advances, under this line of credit, are based on
achievement of certain milestones pursuant to the agreement.
Upon the receipt of funds, the Company was required to issue
up to 1,500,000 shares of its common stock on a pro rata
basis. The Company has borrowed $605,000 against this line
of credit and issued 1,500,000 shares (300,000 shares were
issued and accounted for in 2002 and 1,200,000 common shares
were issued and accounted for in June 2003) of its common
shares as of June 30, 2003. The notes payable under this line
of credit was due on April 15, 2003, secured by all assets and
bears interest 12% per annum (effective rate of 90%). This line
of credit has expired. Interest of $30,000 has been accrued
and is included in accounts payable and accrued expenses in
the accompanying financial statements. In addition, the
Company also issued 350,000 shares of common shares as
finder's fees in 2002. Upon the receipt of additional
funds, the Company was required to issue up to 1,400,000
shares of its common stock. During the quarter ended June
30, 2003, the Company issued 1,400,000 shares of common
stock under this agreement. The fair market value of the
common stock shares issued in the quarter ended June 30,
2003 totaled $312,000 all of which has been accounted for as
interest expense in the current period. For consideration
given in 2002 valued at $163,150, $50,000 was expensed as
interest expense and the unamortized balance of $113,150 was
netted against the face amount of the debt as of December
31, 2002. During the six months ended June 30, 2003,
$113,150 was expensed as interest expense.
(4) 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.
11
VOYAGER ENTERTAINMENT INTERNATIONAL, INC.
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(4) Stock Option Plan, Continued:
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, 2003, no options have
been issued under this plan.
(5) Commitments and Contingencies:
During January 2002, the Company entered into a month-to-
month office lease totaling approximately $2,500 per month.
On August 16, 2002, the Company entered into an agreement
with Residential Resources, Inc. ("RRI") via MCI acting as
an agent, whereby RRI will sell/hypothecate the assets of
Voyager to act as collateral for a bond issuance, which will
raise up to $100 million. Voyager paid an initial due
diligence fee of $30,000 (paid to RRI) and upon completion
of the due diligence, RRI issued a securitization commitment
on September 10, 2002. Pursuant to the agreement, Voyager
paid an additional fee of $70,000 to RRI upon receipt of the
securitization commitment. Total fees incurred for this
transaction amounted to $424,000, of which, $29,000 remains
unpaid and is included in accounts payable and accrued
expenses as of June 30, 2003. All amounts incurred in
relation to RRI have been expensed in accompanying statement
of operations.
On June 18, 2003, the Company signed a joint venture
Memorandum of Understanding with Bennett Realty Group where
Bennett Realty will supply up to 15 acres of land located in
Euless, Texas, also known as the Dallas Fortworth Metroplex.
The land is located adjacent to the Dallas Fort Worth Airport.
A Voyager Wheel will be part of a 200 acre master planned
community that will feature a lake, housing and retail.
Voyager Dallas will be the featured attraction geared to draw
guests to the community.
Contingent Liability
--------------------
During the year ended December 31, 2002, an officer of the
Company who lacked appropriate authority offered
approximately 16.4 million options to investors at an
exercise price of $0.001. There were no written agreements
and Board approval was required for such transactions, and
hence, the officer did not have the authority to grant the
options. These options were contingently issuable upon the
successful completion of debt financing of amounts ranging
from $100 million to $300 million, unrelated to the above.
The Company and its Board of Directors have denied any
liability for the issuance of these options plans to
vigorously defend its position and accordingly, no amount
has been accrued for this contingency in the accompanying
consolidated financial statements.
Since the options granted above relate directly to the cost
of raising debt capital, the fair value of the options using
Black Scholes model (limited to the face amount of the debt)
will be recognized by the Company as a debt issue cost and
amortized over the estimated life of the loan using the
interest method, if the transaction is deemed to be valid.
12
ITEM 2. MANAGEMENT'S DISCUSSION AND PLAN OF OPERATION
The following discussion 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.
13
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 three of the
world's largest observation wheels, one in Las Vegas, Nevada, one
in Dallas, Texas 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 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 30 vehicles
called Sky Cruiser's, the vertical revolving vehicle will
overlook the Las Vegas Strip as it revolves higher than a 60-
story building at 600 (+/-) 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.
Site Location
-------------
The Company is currently in the process of negotiating a long-
term lease for a site located in Las Vegas, Nevada. The design of
Voyager will be integrated within the proposed site. The site
plan will detail Voyager's plans for the Wheel, including
multiple restaurants and retail. As of June 30, 2003, no
definitive agreement has been consummated.
On August 16, 2002, the Company entered into an agreement with
Residential Resources, Inc. ("RRI"), whereby RRI will
sell/hypothecate the assets of Voyager to act as collateral for a
bond issuance, which will raise up to $100 million. Voyager paid
an initial due diligence fee of $30,000 and upon completion of
the due diligence, RRI issued a securitization commitment on
September 10, 2002. Pursuant to the agreement, Voyager paid an
additional fee of $70,000 upon receipt of the securitization
commitment. As of this date Residential resources has not
provided any funding.
Organization
------------
The project will be owned by the parent company, however, will be
designed, developed, built and operated by Voyager Entertainment
Holdings, Inc. ("VEHI"), a wholly owned subsidiary of the
Company. VEHI will manage the project. All covenants,
restrictions and protocol will be detailed in its operating
agreement.
14
As the management company, VEHI 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 VEHI is anticipated to consist of:
Richard Hannigan, as President/CEO; Tracy Jones, as COO; Mimi
Hannigan, as Secretary/Treasurer; Michael Shaunessy, as CFO; and
Sig Rogich, as Director of Public Relations & Communications.
Voyager Dallas
--------------
Voyager signed a Memorandum of Understanding with Bennett Realty
Group where Bennett Realty will supply up to 15 acres of land
located in Euless, Texas also known as the Dallas Fortworth
Metroplex. The land is located adjacent to the DFW Airport.
Voyager will be part of 200 acre master planned community that
will feature a lake, housing and retail. Voyager Dallas will be
the featured attraction geared to draw guest to the community.
Shanghai, China "Star of Shanghai"
----------------------------------
Anticipated to be located on the western bank (Puxi) of the
Huangpu River, the Bund, 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.
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.
Currently, the Company is primarily focusing on the projects in
Las Vegas, Nevada and Dallas, Texas. The Company continues to
receive and evaluate opportunities throughout Asia as well as
Shanghai, China.
15
Plan of Operation
During the next 12 months, the Company plans to focus its efforts
on its development of the Observation Wheels; however actual
production will not commence until the Company has sufficient
capital for production and marketing.
As of June 30, 2003, the Company had only unpaid Officers and
Directors. The Company is dependent upon Richard Hannigan, CEO,
President and Director, Myong Hannigan, Secretary/Treasurer and
Director, and Tracy Jones, COO 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
16
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, 2003, the
Company had current assets of $82,219, and current liabilities of
$1,719,993, resulting in working capital deficit of $1,637,774.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Management's Discussion and Plan of Operations discusses the
Company's consolidated financial statements, which have been
prepared in accordance with accounting principles generally
accepted in the United States of America. The preparation of
these financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. On an on-going basis, management evaluates its estimates
and judgments, including those related to financing operations,
and contingencies and litigation.
Management bases its estimates and judgments on historical
experience and on various other factors that are believed to be
reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying value of assets and
liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates under different
assumptions or conditions. The most significant accounting
estimates inherent in the preparation of the Company's financial
statements include estimates as to the appropriate carrying value
of certain assets and liabilities which are not readily apparent
from other sources, primarily accruals for operating costs, and
the classification of net operating loss and tax credit
carryforwards.
These accounting policies are described at relevant sections in
this discussion and in the notes to the consolidated financial
statements included in our Form 8-K report filed on March 4,
2002.
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.
17
Our auditor's report filed with our Annual Report on Form 10-KSB
for the year ended December 31, 2002 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 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.
ITEM 3. CONTROLS AND PROCEDURES
As of June 30, 2003, an evaluation was performed under the
supervision and with the participation of the Company's
management, including the Chief Executive Officer and the Chief
Accounting Officer, of the effectiveness of the design and
operation of the Company's disclosure controls and procedures.
Based on that evaluation, the Company's management, including the
Chief Executive Officer and the Chief Accounting Officer,
concluded that the Company's disclosure controls and procedures
were effective as of June 30, 2003. There have been no
significant changes in the Company's internal controls or in
other factors that could significantly affect internal controls
at June 30, 2003.
18
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In the process of auditing the consolidated financial statements
of VEII for the years ended December 31, 2002 and 2001, which are
included in VEII's Annual Report on Form 10-KSB, its auditor,
Stonefield Josephson, Inc., sent out "Note Payable Confirmation
Requests" to Don and Nancy Tyner and First Nevada Development
Company (collectively "Tyner") on or about March 14, 2003 to
confirm the $210,200 Tyner loaned to VEII during the period of
September thru October of 2002. In response, Tyner sent a letter
through its attorney alleging $1,464,826.38 was immediately due
and payable including interest at the legal rate.
Tyner is alleging that several payments made by it to various
individuals and entities were actually for the benefit of VEII,
and VEII should be responsible for those debts. In addition to
the $210,200, VEII acknowledges $18,039.24 which Tyner listed as
expenses as a bona-fide debt of VEII. As such, the Company is of
the opinion that it owes Tyner the sum of $228,239.24 plus any
accrued interest.
The Company is pleased to announce that a definitive agreement has
been reached which brings to a close the assertions made by Tyner.
The Settlement and Release Agreement will be filed by the
Company on Form 8-K.
ITEM 2. CHANGES IN SECURITIES
In July 2003, in connection with the Reincorporation of the
Company into the State of Nevada, the Company filed a Certificate
of Designation of its Series A Convertible Preferred Stock with
the Nevada Secretary of State. Under Section 78.195 of the
Nevada Revised Statutes, a certificate of designation signed and
filed pursuant to this section must become effective before the
issuance of any shares of the class or series. In order to
complete the Reincorporation by exchanging the outstanding North
Dakota Series A Convertible Preferred Stock with Nevada Series A
Convertible Preferred Stock pursuant to terms of the Plan of
Merger, the Company filed its Designation in the State of Nevada
containing identical terms as designated in North Dakota.
In July 2003, the Company created a new series of preferred stock
designated as Series B Convertible Preferred stock. Of the
50,000,000 shares of preferred stock authorized to be issued by
the Company, 1,500,000 are designated Series A Convertible
Preferred Stock and 10,000,000 are designated Series B
Convertible Preferred Stock. The face value of the Series B
Convertible Preferred Stock is $0.10. Each one share of Series B
Convertible Preferred is convertible at any time into two (2)
shares of common stock. Each share of Series B Preferred Stock is
entitled to two (2) votes per share on matters properly brought
before the common stockholders of the Company.
In July, 2003, the Company commenced its offering of up to
10,000,000 Shares of Series B Convertible Preferred Stock at the
purchase price of $0.10 per share. The Series B Preferred Shares
are being offered in reliance upon the private offering
exemptions contained in Sections 3(b) and 4(2) of the Securities
Act of 1933, as amended, and Rule 506 of Regulation D promulgated
thereunder. Investment in the Series B Preferred Shares is
limited to "accredited" investors within the meaning of Rule
501(a) of Regulation D. On July 14, 2003, the Company sold
1,000,000 of the Series B Preferred Shares for the purchase price
of $100,000 to one investor who represented that he was acquiring
the Series B Preferred Shares and the common shares issuable upon
conversion for investment purposes only and not with a view to
19
distribute. He further represented that he (a) has such knowledge
and experience in financial and business matters and is capable
of evaluating the merits and risks of the investment, (b) is able
to bear the complete loss of the investment, (c) has had the
opportunity to ask questions of, and receive answers from, the
Company and its management concerning the terms and conditions of
the offering and to obtain additional information, and (d) is an
"accredited investor" as such term is defined in Rule 501(a) of
Regulation D.
On June 9, 2003, the Company issued 1,400,000 shares of
restricted common stock for services 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 recipient 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 June 9, 2003, the Company also issued 1,200,000 shares of
restricted common stock in accordance with the agreement dated
November 14, 2002 as amended on February 15, 2003 and April 25,
2003. 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 recipient 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.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The information required by this Item 4 is incorporated by
reference to the Company's definitive Information Statement as
amended filed with the Securities and Exchange Commission on
May 6, 2003, which was mailed to shareholders of record at April
23, 2003.
As set forth in the Information Statement, the Company received
written consents in lieu of Annual Meeting from shareholders
representing more than 50% of the total voting shares of the
Company, approving the following actions:
1. The removal of Veldon Simpson as a director of the Company.
2. The election of Richard L. Hannigan, Sr., Myong Hannigan and
Tracy Jones to the board of directors to serve until the next
annual meeting of shareholders or until their successors are
elected and qualified.
20
3. Ratification of the appointment of officers:
Richard L. Hannigan, Sr. CEO and President
Myong Hannigan Secretary/Treasurer
Tracy Jones COO
4. The reincorporation of the Company in the State of Nevada.
5. Increasing the authorized capital stock of the Company as a
result of the reincorporation. The Company's North Dakota
Articles of Incorporation, as currently in effect, authorizes the
Company to issue up to 100,000,000 shares of common stock, $0.001
par value, and 25,000,000 shares of preferred stock, $0.001 par
value. The Board of Directors and Majority Shareholders approved
an increase in the number of authorized shares of both the common
and preferred stock of the Company to be effected as a result of
the reincorporation. Upon completion of the reincorporation in
the State of Nevada, the Company will be authorized to issue
200,000,000 shares of common stock, $0.001 par value, and
50,000,000 shares of preferred stock, $0.001 par value per share.
6. Ratification of the selection of Stonefield Josephson, Inc.,
as independent public accountants of the Company for the 2003
fiscal year.
The reincorporation became effective in the States of North
Dakota and Nevada on June 23, 2003, the date the Certificate of
Merger was issued by the Secretary of State of North Dakota.
ITEM 5. OTHER INFORMATION
Financial Advisor
-----------------
In July 2003, the Company engaged Ladenburg Thalmann & Co. Inc.
as its Exclusive Financial Advisor, for all of the Voyager
Projects. Ladenburg Thalmann will advise and assist the Company
in connection with structuring and negotiating one or more
private placement offerings in order to fund construction of the
Voyager Project. The proceeds will be used for possible land
acquisition, and finalizing the engineering, architectural design
and construction.
Fugal Loan and Security Agreement, as amended
---------------------------------------------
On November 15, 2002, we entered into a Loan and Security
Agreement with Dan Fugal, a non-affiliate of the Company, whereby
Mr. Fugal is to provide us with a credit facility in the form of
a secured line of credit not to exceed $2.5 million. As of the
date of the filing of this report, Mr. Fugal has provided the
Company with $705,000.
On February 15, 2003, we executed Amendment No. 1 to the Loan and
Security Agreement to amend the term date from February 15, 2003
to April 15, 2003. We believe that Mr. Fugal will continue to
extend the date on the Loan Security Agreement. While Mr. Fugal
has relayed to the Company that he does not plan to activate his
option against the Company, there can be no guarantee that this
will occur.
21
On April 25, 2003, Mr. Fugal and the Company mutually agreed to
amend the November 15, 2002 agreement as follows:
Originally, Mr. Fugal was to provide an amount not to exceed $2.5
million when the Company obtained a credit enhancement. In an
effort for the Company to reduce the liability owed to Mr. Fugal
the agreement has been amended to reflect that the Company will
draw down traunches of funds in order to fund operations until
financing has been acquired. The Company may request additional
funds as needed from time to time.
The initial date of repayment has been extended from April 15,
2003 to July 31, 2003. As a result of the Company drawing down
traunches of funds all shares required to be issued under the
terms and conditions of the agreement along with the terms and
conditions of the finder fee agreements are required to be issued
at this time.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Number Description
------ -----------
3.1* Nevada Articles of Incorporation
3.2* Amended and Restated Bylaws
3.3* Plan and Agreement of Merger of Voyager
Entertainment International, Inc. (North Dakota)
into Voyager Entertainment International, Inc.
(Nevada)
3.4* Nevada Articles of Merger
3.5* North Dakota Certificate of Merger
4.1* Certificate of Designation of Series A
Convertible Preferred Stock
4.2* Certificate of Designation of Series B
Convertible Preferred Stock
10.1 Loan and Security Agreement (incorporated by
reference to Exhibit 10.1 to the Company's Current
Report on Form 8-K filed on November 22, 2002)
10.2 Amendment No. 1 to Loan and Security Agreement
(incorporated by reference to Exhibit 10(k)
to the Company's Form 10-KSB filed on April 16,
2003)
10.3 Amendment No. 2 to Loan and Security Agreement
(incorporated by reference to Exhibit 10.3
to the Company's Quarterly Report on Form 10-QSB
for the period ended March 31, 2003 filed on
May 20, 2003)
* Filed herewith.
(b) Reports on Form 8-K
None
22
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
VOYAGER ENTERTAINMENT INTERNATIONAL, INC.
(Registrant)
By:/s/
Richard L. Hannigan, Sr.
President, Chief Executive and Accounting Officer
Date: August 19, 2003
23
CERTIFICATION
I, Richard L. Hannigan, Sr., certify that:
1. I have reviewed this Quarterly Report for the period ended
June 30, 2003 of Voyager Entertainment International, Inc.;
2. Based on my knowledge, this report does not contain any
untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in
all material respects the financial condition, results of
operations and cash flows of the small business issuer as of, and
for, the periods presented in this report;
4. I am responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-
15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-
15(f)) for the small business issuer and have:
(a) Designed such disclosure controls and procedures,
or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material
information relating to the small business issuer, including
its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in
which this report is being prepared;
(b) Designed such internal control over financial
reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for
external purposes in accordance with generally accepted
accounting principles;
(c) Evaluated the effectiveness of the small business
issuer's disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
(d) Disclosed in this report any change in the small
business issuer's internal control over financial reporting
that occurred during the small business issuer's most recent
fiscal quarter (the small business issuer's fourth fiscal
quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the
small business issuer's internal control over financial
reporting; and
5. I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the small business
issuer's auditors and the audit committee of the small business
issuer's board of directors (or persons performing the equivalent
functions):
(a) All significant deficiencies and material
weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to
adversely affect the small business issuer's ability to
record, process, summarize and report financial information;
and
(b) Any fraud, whether or not material, that involves
management or other employees who have a significant role in the
small business issuer's internal control over financial
reporting.
Date: August 19, 2003
/s/ Richard L. Hannigan, Sr.
Chief Executive and Accounting Officer
24
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Richard L. Hannigan, Sr., Chief Executive and Accounting
Officer of Voyager Entertainment International, Inc. (the
"Company"), certify to the best of my knowledge, pursuant to 18
U.S.C. Section 1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:
(1) the Company's Quarterly Report on Form 10-QSB for the
quarterly period ended June 30, 2003, as filed with the
Securities and Exchange Commission on the date hereof (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
operations of the Company.
Date: August 19, 2003 By: /s/
Richard L. Hannigan, Sr.
Chief Executive and Accounting Officer
25