[As adopted in Release No. 34-32231, April 28, 1993, 58 F.R. 26509]
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: January 31, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from__________to___________
Commission file number 0-21961
Voyager Group USA-Brazil, Ltd..
(Exact name of small business issuer as
specified in its charter)
Nevada 76-0487709
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
6354 Corte Del Abeto, Suite F, Carlsbad, California 92009
(Address of principal executive offices)
(760) 603-0999
Issuer's telephone number
(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
<PAGE>
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDING DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practical date: March 12, 1998 3,850,000
Transitional Small Business Disclosure Format (check one). Yes ; No X
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
VOYAGER GROUP USA-BRAZIL, LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
ASSETS January 31, 1998 July 31, 1997
- ------ ---------------- -------------
Current Assets:
Cash ................................... $ 268,982 $ 419,332
Inventory .............................. 194,212 165,212
Prepaid Expenses ....................... 29,271 56,318
Accounts Receivable .................... 16,513 16,789
--------- ---------
Total Current Assets ................ 508,978 657,651
--------- ---------
Fixed Assets, at Cost:
Furniture and Equipment ................ 138,760 138,760
Leasehold Improvements ................. 6,741 6,741
Less - Accumulated
Depreciation ....................... (58,545) (44,925)
--------- ---------
86,956 100,576
--------- ---------
Other assets:
Deferred Tax Benefit ................... 102,867 96,867
Intangible Assets, Net ................. 1,165 1,449
Deposits ............................... 10,327 5,252
--------- ---------
Total Other Assets .................. 114,359 103,568
--------- ---------
Total Assets ........................ $ 710,293 $ 861,795
========= =========
3
<PAGE>
VOYAGER GROUP USA-BRAZIL, LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS(Continued)
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY January 31,1998 July 31, 1997
- ------------------------------------ --------------- -------------
Current Liabilities:
Accounts Payable ....................... $ 39,967 $ 130,675
Accrued liabilities .................... 40,213 46,267
Accrued Commissions .................... 142,501 146,027
----------- ---------
Total Current Liabilities ............ 222,681 322,969
----------- ---------
Stockholder' Equity:
Preferred Stock; $.001 par
value; 5,000,000 shares
authorized; 431 shares
issued and outstanding ............... 1 1
Premium on Preferred Stock ............. 155,331 155,331
Common Stock to be Issued .............. -- 300
Common Stock; $.001 par
value; 50,000,000 shares
authorized; .......................... 3,350,000
and 2,950,000 shares
issued and outstanding
January 31, 1997 and
July 31, 1996, respectively .......... 3,850 3,550
Additional Paid-in Capital ............. 920,489 920,489
Retained Earnings (Deficit) ............. (592,059) (540,845)
----------- ---------
Total Stockholders' Equity ........... 487,612 538,826
----------- ---------
Total Liabilities, and
Stockholders' Equity ............... $ 710,293 $ 861,795
=========== =========
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
<TABLE>
VOYAGER GROUP USA-BRAZIL, LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<CAPTION>
(Unaudited) (Unaudited)
For the Three For the Six
Months Ended Months Ended
January 31, January 31,
------------- ------------
1998 1997 1998 1997
------ ------ ------ -----
<S> <C> <C> <C> <C>
Sales, Net ...................... $ 632,669 $ 1,063,311 $ 1,504,971 $ 2,083,951
Cost of Sales ................... 191,159 280,983 454,987 628,001
----------- ----------- ----------- -----------
Gross Margin ............... 441,510 782,328 1,049,984 1,455,950
Selling & Marketing ............. 393,632 719,871 869,011 1,598,902
Research and Development ........ 529 -- 2,947 --
General & Administrative ........ 149,448 102,312 261,900 273,709
----------- ----------- ----------- -----------
Total Expenses ............. 543,609 822,183 1,133,858 1,872,611
----------- ----------- ----------- -----------
Operating Income (Loss) .... (102,099) (39,855) (83,874) (416,661)
Other Income (Expense)
Interest, Net ................. 2,880 -- 6,299 --
----------- ----------- ----------- -----------
Income (Loss) Before Income Taxes
(99,219) (39,855) (77,575) (416,661)
Income Taxes .................... -- -- -- --
Deferred Tax (Benefit) .......... (33,000) (6,377) (26,361) (66,666)
----------- ----------- ----------- -----------
Net Income (Loss) ............... $ (66,219) $ (33,478) $ (51,214) $ (349,995)
=========== =========== =========== ===========
Earnings Per Common Share ....... $ (0.02) $ (.01) $ (0.01) $ (0.10)
Weighted Average Shares
Outstanding ..................... 3,850,000 3,350,000 3,850,000 3,350,000
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
5
<PAGE>
VOYAGER GROUP USA-BRAZIL, LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Six
Months Ended
January 31,
1998 1997
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) ............................. $ (51,214) $(349,995)
Adjustments to Reconcile Net Income (Loss) to
Net Cash Used in
Operating Activities:
Depreciation and Amortization ............ 13,904 9,089
Common Stock for Services ................ -- 150,000
Change in Deferred Tax Asset ............. (6,000) --
Changes in Assets and Liabilities-
(Increase) Decrease in Accounts Receivable 276 (14,337)
Decrease in Prepaid Expenses ............. 27,047 1,311
(Increase) Decrease in Inventory ......... (29,000) --
Increase in Other Assets ................. (5,075) (73,454)
Increase (Decrease) in Accounts Payable .. (90,708) 65,174
Decrease in Accrued Liabilities .......... (6,054) (35,120)
Increase (Decrease) in Accrued Commissions (3,526) 185,372
--------- ---------
Net Cash Used by Operating Activities ......... (150,350) (61,960)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase Furniture and Equipment .............. -- (65,126)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Issuance of Common Stock ........ -- 245,000
--------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS ..... (150,350) 117,914
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD .......................... 419,332 322,787
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF
PERIOD ....................................... $ 268,982 $ 440,701
========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid During the Year For:
Interest $ 34 $ -
Income Taxes $ - $ 33,809
On October 27, 1996 the Company issued 150,000 shares of common stock in
exchange for advertising and promotional services to be performed within a 36
month period.
The accompanying notes are an integral part of these consolidated financial
statements.
6
<PAGE>
VOYAGER GROUP USA-BRAZIL, LTD. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED JANUARY 31, 1998
(Unaudited)
1. Interim Reporting
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles and with Form 10-QSB
requirements. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments considered
necessary for a fair presentation have been included. Operating results for the
six month period ended January 31, 1998, are not necessarily indicative of the
results that may be expected for the year ended July 31, 1998. For further
information, refer to the financial statements and footnotes thereto included in
the Company's report on Form 10-KSB for the year ended July 31, 1997.
7
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
General - This discussion should be read in conjunction with Management's
Discussion and Analysis of Financial Condition and Results of Operations in the
Company's report on Form 10- KSB for the year ended July 31, 1998.
During the six month period ended January 31, 1998, the Company has
developed a new line of patented products, the "Body Lite System". The Body Lite
system includes three nutritional supplements which, when combined with eating
right and low impact exercises, will help aide in weight management. The three
components to the Body Lite system are:
1. BODYLITE VITALIZER, a patented blend of natural and organic
amino acids, herbs, and vitamins designed to give a long
lasting lift and effective appetite control throughout the
day. Vitalizer is scientifically assembled to increase the
production of neurotransmitters which signal to the brain a
feeling of satisfaction and reduces the urge to over eat as
well as the urge for sweets and fats.
2. BODYLITE STABILILIZER, a patented blend of natural and
organic ingredients designed to provide energy and blood
sugar stabilization.
3 BODYLITE 3-2-1, a patented shake that mixes with water and
combines three parts protein, two parts complex
carbohydrates and one part sugar. This balance provides a
timely and balanced conversion into glouse, which helps
prevent blood sugar spikes and inadvertent, unnecessary
excess insulin release. This also helps prevent rapid blood
sugar decrease during the metabolism process and provides
appetite control for several hours.
Customers with repeat business accounted for a majority of the
revenues generated. Although the Company has provided products for its customers
with repeat business, there is no assurance that such customers will maintain or
increase the level of volume of business of the Company.
Results of Operations - The following table set forth, for the three months and
the six months ended January 31, 1998 and 1997, certain items from the Company's
Condensed consolidated Statements of Income expressed as a percentage of net
sales.
8
<PAGE>
Three Months Ended Six Months Ended
January 31, January 31,
------------- ------------
1998 1997 1998 1997
------ ------ ------ -----
Sales, Net ...................... 100.0% 100.0% 100.0% 100.0%
Cost of Sales ................... 30.2 26.4 30.2 30.1
----- ----- ----- -----
Gross Margin .................... 69.8 73.6 69.8 69.9
Operating Expenses .............. 85.9 77.4 75.4 89.9
----- ----- ----- -----
Operating Income (Loss) ......... (16.1) (3.8) (5.6) (20.0)
Interest Income, Net ............ 0.4 0.0 0.4 0.0
----- ----- ----- -----
Income (Loss) Before Income Taxes (15.7) (3.8) (5.2) (20.0)
Income Taxes
Deferred Tax (Benefit) .......... (5.2) (0.6) (1.8) (3.2)
----- ----- ----- -----
Net Income (Loss) ............... (10.5) (3.2) (3.4) (16.8)
===== ===== ===== =====
Net Sales
Net sales for the second quarter of Fiscal 1997 were less than the
second quarter for Fiscal 1996 by $430,642 or 40.5%. Net sales for the six month
period were less than the comparable period of Fiscal 1996 by $578,980 or
27.8%. This decrease was due to a broad restructuring of the Company's sales and
compensation plan, a repricing strategy for current products and reformulation
of certain existing products, and research and development of the new Body Lite
System products. The result of which, management believes, will have a favorable
increase in sales throughout the rest of the year and fuel continual growth into
the future.
Cost of Sales
Cost of sales for the second quarter of Fiscal 1997 decreased
$$340,818 or 43.6% compared to the second quarter of Fiscal 1996. As a
percentage of sales, cost of sales increased from 26.4% to 30.2%.
On a year-to-date basis, cost of sales decreased $173,014 or 27.6%.
As a percentage of sales year-to-date, cost of sales remained relatively
constant increasing from 30.1% to 30.2%.
Operating Expenses
Operating expenses during the second quarter of Fiscal 1997 decreased
$278,574 or 33.9% compared to the second quarter of Fiscal 1996 from $822,183 to
$543,609. For the six month period, operating expenses decreased $738,753 or
39.5% from $1,872,611 to $1,133,858.
9
<PAGE>
As a percentage of sales, operating expenses for the second quarter increased
from 77.4% of sales to 85.9% of sales. For the six month period, operating
expenses as a percent of sales decreased from 89.9% to 75.4%.
The increase in the second quarter is due increased payrolls from the
addition of employees, and increases in promotional expenses, royalties,
equipment rental and postage. The decrease for the six months is primarily due
to a one time marketing expense of $150,000 during the first quarter of Fiscal
1996 which represents 13.9% of sales for the six month period.
Liquidity and Capital Resources
The Company requires working capital principally to fund its current
operations. Generally the Company has adequate funds for its activities. There
are no formal commitments from banks or other lending sources for lines of
credit or similar short-term borrowing. It is anticipated that the current
operations will expand and the funds generated will exceed the Company's working
capital requirements for the next year.
The decrease in liquidity during the quarter was primarily from cash
used by operations. The Company generates and uses cash flows through three
activities: operating, investing, and financing. During the six months ended
January 31, 1998, operating activities used cash of $150,000 as compared to net
cash used of $62,000 for the six months ended January 31, 1997.
Cash flows used in investing activities is primarily due to the
acquisition of $65,000 of computer equipment and office furniture for the six
months ended January 31, 1997.
Financing activities provided $245,000 for the six months ended
January 31, 1997. The increase in cash flow from financing activities was
primarily from the sale of preferred and common stock.
Management believes that the Company's current cash and funds
available will be sufficient to meet capital requirements and short term and
long term working capital needs in the fiscal year ending July 31, 1998 and
beyond, unless a significant acquisition or expansion is undertaken. The Company
is constantly searching for potential acquisitions and/or expansion
opportunities. However, there are no arrangements or ongoing negotiations for
any acquisition or expansion.
10
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
On May 13, 1997, James R Parker (Plaintiff) filed a Complaint for
Damages against various individuals and the Voyager Group, Inc. in Superior
Court of the State of California in and for the County of Sacramento (Case No.
97AS02458). The complaint alleges that the Voyager Group, Inc. and its
directors, officers, agents and shareholders among others, promised to pay the
Plaintiff approximately 781,250 share of the Voyager Group. The complaint seeks,
among other things, damages from the defendants in the aggregate amount of
$2,900,000, plus attorney fees and interest. During November 1997, the Company
successfully negotiated to settle all claims by issuing 300,000 shares of
restricted common stock to Mr. Parker.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
The Company did not file a report on Form 8-K during the three months
ended January 31, 1998.
11
<PAGE>
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 GROUP USA-BRAZIL, LTD. AND SUBSIDIARIES.
(Registrant)
DATE: March 17, 1998 By: /S/
--------------------------- -------------------------
William Clapham, President
(Principal financial and
Accounting Officer)
10
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
BALANCE SHEET OF VOYAGER GROUP USA-BRAZIL, LTD. AS OF JANUARY 31, 1998 AND THE
RELATED STATEMENTS OF OPERATIONS AND CASH FLOWS FOR THE SIX MONTHS THEN ENDED
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-END> JAN-31-1998
<CASH> 269
<SECURITIES> 0
<RECEIVABLES> 17
<ALLOWANCES> 0
<INVENTORY> 194
<CURRENT-ASSETS> 509
<PP&E> 146
<DEPRECIATION> 59
<TOTAL-ASSETS> 710
<CURRENT-LIABILITIES> 223
<BONDS> 0
0
0
<COMMON> 4
<OTHER-SE> 483
<TOTAL-LIABILITY-AND-EQUITY> 710
<SALES> 1505
<TOTAL-REVENUES> 1505
<CGS> 455
<TOTAL-COSTS> 455
<OTHER-EXPENSES> 1134
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (84)
<INCOME-TAX> (26)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (51)
<EPS-PRIMARY> (0.01)
<EPS-DILUTED> 0
</TABLE>
