[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: April 30, 1999
-----------------------------
[ ] 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: April 30, 1999 10,915,278
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 April 30, July 31,
1999 1998
--------- ---------
Current Assets:
Cash ..................................... $ -- $ --
Inventory ................................ 162,520 173,130
Prepaid Expenses ......................... 3,800 800
Accounts Receivable ...................... 35,030 28,872
--------- ---------
Total Current Assets .................. 201,350 202,802
--------- ---------
Fixed Assets, at Cost:
Furniture and Equipment .................. 140,135 140,135
Leasehold Improvements ................... 6,741 6,741
Less - Accumulated
Depreciation ......................... (82,897) (62,443)
--------- ---------
63,979 84,433
--------- ---------
Other assets:
Deferred Tax Benefit ..................... 247,329 172,301
Intangible Assets, Net ................... -- --
Deposits ................................. 10,327 10,327
--------- ---------
Total Other Assets .................... 257,656 182,628
--------- ---------
Total Assets .......................... $ 522,985 $ 469,863
========= =========
3
<PAGE>
VOYAGER GROUP USA-BRAZIL, LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS(Continued)
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY April 30, July 31,
1999 1998
----------- -----------
Current Liabilities:
Accounts Payable ................................. $ 19,787 $ 31,782
Accrued liabilities .............................. 158,284 204,189
Accrued Commissions .............................. 37,461 48,451
Shareholder Loans ................................ -- 4,500
----------- -----------
Total Current Liabilities ...................... 215,532 288,922
----------- -----------
Stockholder' Equity:
Preferred Stock; $.001 par
value; 5,000,000 shares
authorized; 403 shares
issued and outstanding ......................... 1 1
Premium on Preferred Stock ....................... 155,331 155,331
Common Stock; $.001 par
value; 50,000,000 shares authorized;
10,915,278 and 5,837,010 shares issued
and outstanding April 30, 1999 and July 31,
1998, respectively ............................. 10,915 5,837
Additional Paid-in Capital ....................... 1,488,442 971,902
Retained Earnings ................................ (1,347,236) (952,130)
----------- -----------
Total Stockholders' Equity ..................... 307,453 180,941
----------- -----------
Total Liabilities, and
Stockholders' Equity ......................... $ 522,985 $ 469,863
=========== ===========
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
<TABLE>
<CAPTION>
VOYAGER GROUP USA-BRAZIL, LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) (Unaudited)
For the Three For the Nine
Months Ended Months Ended
April 30, April 30,
--------------------------- ---------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Sales, Net ................. $ 358,579 $ 454,076 $ 1,031,657 $ 1,959,047
Cost of Sales .............. 103,044 135,578 295,874 590,565
------------ ------------ ------------ ------------
Gross Margin .......... 255,535 318,498 735,783 1,368,482
Selling & Marketing ........ 170,367 293,792 507,581 1,162,803
Research & Development ..... -- -- 50,000 2,947
General & Administrative ... 8,349 173,963 637,660 435,863
------------ ------------ ------------ ------------
Total Expenses ........ 178,716 467,755 1,195,241 1,601,613
------------ ------------ ------------ ------------
Operating Income (Loss) 76,819 (149,257) (459,458) (233,131)
Other Income
Interest, Net ............ (6,562) 1,345 (10,078) 7,644
------------ ------------ ------------ ------------
Income (Loss) Before Income
Taxes ...................... 70,257 (147,912) (469,536) (225,487)
Income Taxes ............... 11,441 200 600 600
Deferred Tax (Benefit) ..... (11,241) (50,438) (75,030) (77,200)
------------ ------------ ------------ ------------
Net Income (Loss) .......... $ 70,057 $ (97,674) $ (395,106) $ (148,887)
============ ============ ============ ============
Earnings Per Common Share:
Basic Earnings Per Share: .. $ 0.01 $ (0.02) $ (0.05) $ (0.04)
Diluted Earnings Per Share: $ -- $ (0.02) $ (0.05) $ (0.04)
Basic Shares Outstanding ... 10,331,194 3,912,500 7,856,030 3,912,500
Diluted Shares Outstanding . 14,361,194 3,912,500 7,856,030 3,912,500
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE>
<TABLE>
<CAPTION>
VOYAGER GROUP USA-BRAZIL, LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Nine
Months Ended
April 30,
---------------------
1999 1998
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net Income (Loss) ......................................... $(395,106) $(148,887)
Adjustments to Reconcile Net Income (Loss) to Net Cash Used
in Operating Activities:
Depreciation and Amortization ........................... 20,455 20,856
Common Stock exchanged for services ..................... 443,750 --
Changes in Assets and Liabilities-
(Increase) in Accounts Receivable ....................... (6,158) (1,289)
Decrease in Prepaid Expenses ........................... (3,000) 37,344
(Increase) Decrease in Inventory ........................ 10,610 (153,999)
(Increase) Decrease in Other Assets ..................... (75,030) (61,313)
Increase (Decrease) in Accounts Payable ................ (11,995) (65,051)
Increase (Decrease) in Accrued Liabilities ............. (45,904) (2,687)
Increase (Decrease) in Accrued Commissions ............. (10,990) (3,526)
--------- ---------
Net Cash Provided by Operating Activities ................. (73,368) (378,552)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase Furniture and Equipment .......................... -- (1,322)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Issuance of Common Stock .................... 50,000 5,000
Proceeds from Shareholder Loans ........................... 23,368 --
--------- ---------
Net Cash Provided by Financing Activities ................. 73,368 5,000
--------- ---------
Net Increase (Decrease) in Cash and Cash Equivalents ...... -- (374,874)
Cash and Cash Equivalents at Beginning of Period .......... -- 419,332
--------- ---------
Cash and Cash Equivalents at End of Period ................ $ -- $ 44,458
========= =========
Supplemental Disclosures of Cash Flow Information
Cash paid During the Year For:
Interest .............................................. $ 10,078 $ 34
Income Taxes .......................................... $ -- $ --
</TABLE>
6
<PAGE>
VOYAGER GROUP USA-BRAZIL, LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED APRIL 30, 1999
(Continued)
Supplemental Disclosure of Non-Cash Financing Activities:
During December 1997, the Company issued 434,000 shares to three employees. The
shares were offered at approximate market value.
During September 1998, the Company issued 9,000 shares to distributors for
promotional contest winnings.
During October 1998, the Company issued 900,000 shares in exchange for
consulting services.
During October 1998, the Company issued 200,000 shares in exchange for research
and development services.
During January 1999, the Company issued 1,000,000 shares pursuant to a top up
provision.
During January 1999, the Company issued 1,100,000 shares to a director for
directorship fees.
During January 1999, the Company issued 320,000 shares in exchange for
consulting services.
During March 1999, the Company issued 300,000 shares to a Director for
promotional services
During April 1999, the Company issued 15,100 shares to distributors for
promotional contest winnings and services
The accompanying notes are an integral part of these consolidated financial
statements.
7
<PAGE>
VOYAGER GROUP USA-BRAZIL, LTD. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED APRIL 30, 1999
(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
three and nine month periods ended April 30, 1999, are not necessarily
indicative of the results that may be expected for the year ended July 31, 1999.
For further information, refer to the financial statements and footnotes thereto
included in the Company's annual report on Form 10-KSB for the year ended July
31, 1998.
2. Short Term Borrowing
The company has revolving bank lines of credit. The balance due on
these lines as of April 30, 1999 is approximately $106,000. The credit lines
accrue interest at variable rates from10.5% to 12.275%.
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 nine month periods ended April 30, 1999, the Company
introduced a new line of patent applied products, the "Body Lite Tiger Diet".
The Body Lite Tiger Diet is a low glycemic diet that includes two nutritional
supplements which, when combined with eating right and low impact exercises,
will help aide in weight management. The two components to the Body Lite Tiger
Diet are:
1. BODYLITE TIGER POWER (capsules and liquid), a proprietary
blend of natural and organic amino acids, herbs, and vitamins
designed to give a long lasting lift and effective appetite
control throughout the day. Tiger Power is scientifically
assembled to help 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 LOW GLYCEMIC SHAKE, a novel shake that mixes with
water and combines three parts protein, two parts complex
carbohydrates and one part sugar.
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<PAGE>
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 and nine
months ended April 30, 1999 and 1998, certain items from the Company's Condensed
consolidated Statements of Income expressed as a percentage of net sales.
Three Months Ended Nine Months Ended
April 30, April 30,
-------------- --------------
1999 1998 1999 1998
----- ----- ----- -----
Sales, Net ................................ 100.0% 100.0% 100.0% 100.0%
Cost of Sales ............................. 28.7 29.9 28.7 30.1
----- ----- ----- -----
Gross Margin .............................. 71.3 70.1 71.3 69.9
Operating Expenses ........................ 49.8 103.0 115.9 81.8
----- ----- ----- -----
Operating Income (Loss) ................... 21.4 (32.9) (44.5) (11.9)
Interest Income, Net ...................... (1.8) 0.3 (1.0) 0.4
----- ----- ----- -----
Income (Loss) Before Income Taxes ......... 19.6 (32.6) (45.5) (11.5)
Income Taxes .............................. 3.2 -- -- --
Deferred Tax (Benefit) .................... (3.1) (11.1) (7.2) (3.9)
----- ----- ----- -----
Net Income (Loss) ......................... 19.5 (21.5) (38.3) (7.6)
===== ===== ===== =====
Net Sales
Net sales for the third quarter of Fiscal 1998 were less than the third
quarter for Fiscal 1997 by $95,497 or 21.0%. Net sales for the nine month period
were less than the comparable period of Fiscal 1997 by $927,390 or 47.3%. This
decrease was due to a broad restructuring of the Company's sales and
compensation plan, a repricing strategy that lowered prices to distributors
approximately 30%, re-formulation of certain existing products, and research and
development of the new Body Lite
9
<PAGE>
System and DoloRx 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 third quarter of Fiscal 1998 decreased $32,534 or
24.0% compared to the third quarter of Fiscal 1997. As a percentage of sales,
cost of sales decrease from 29.9% to 28.7%. This decrease is due to reductions
in certain fixed overhead costs allocated to cost of sales.
On a year-to-date basis, cost of sales decreased $294,691 or 49.9%. As
a percentage of sales year-to-date, cost decreased from 30.1% to 28.7%.
Operating Expenses
Operating expenses during the third quarter of Fiscal 1998 decreased
$289,039 or 61.8% compared to the third quarter of Fiscal 1997. As a percentage
of sales, operating expenses decreased from 103.0% of sales to 49.8% of sales
for the third quarter. This decrease is due in part to the conversion to
contributed capital of approximately $102,000 (28.4% of sales) in accrued
royalties.
For the nine month period, operating expenses decreased $406,372 or
25.4% from $1,601,613 to $1,195,241. As a percent of sales operating expenses
increased from 81.8% to 115.9%. This increase is due primarily to consulting,
directorship fees, and research and development services exchanged for stock in
the amount of $18,906 and $443,750 during the three and nine months
respectively.
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 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 nine months ended
April 30, 1999, operating activities used cash of $73,000 as compared to net
cash used of $379,000 for the nine months ended April 30, 1998.
Financing activities provided $73,000 for the nine months ended April
30, 1999. The increase in cash flow from financing activities was from the
issuance of common stock and shareholder loans.
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
10
<PAGE>
ending July 31, 1999 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.
Factors That May Affect Future Results
Management's Discussion and Analysis contains information based on
management's beliefs and forward-looking statements that involve a number of
risks, uncertainties, and assumptions. There can be no assurance that actual
results will not differ materially for the forward-looking statements as a
result of various factors, including but not limited to the following:
Year 2000 Date Conversion
In general, the Year 2000 issue relates to computers and other systems
being unable to distinguish between the years 1900 and 2000 because they use two
digits, rather than four, to define the applicable year. Systems that fail to
properly recognize such information will likely generate erroneous data or cause
a system to fail to properly recognize such information will likely generate
erroneous data or cause a system to fail possibly resulting in a disruption of
operations. The Company's products do incorporate such date coding but the
Company believes all of its product systems are Year 2000 compliant. The Company
has also undertaken efforts to address the Year 2000 issue in the following
three areas: (i) the Company's information technology ("IT") systems; (ii) the
Company's non-IT systems (i.e., machinery, equipment and devices which utilize
technology which is "built in" such as embedded microcontrollers); and (iii)
third-party suppliers.
The Company is currently working to resolve the potential impact of the
Year 2000 issue on the processing of date-sensitive data by the Company's
computerized information systems. Specifically, the Company is analyzing all of
its accounting and financial software to ensure no interruption in the Company's
financial systems. The Company is analyzing all other IT and non-IT systems to
determine if any other modification or upgrades are necessary to be Year 2000
compliant. The Company believes it will be Year 2000 compliant. The amount
charged to expense during the three months ended April 30, 1999, as well as the
amounts anticipated to be charged to expense related to the Year 2000 computer
modifications, have not been and are not expected to be material to the
Company's financial position, results of operations or cash flows.
The Company is also evaluating and taking steps to resolve Year 2000
compliance issues that may be created by suppliers and financial institutions
with whom the Company does business. The Company is examining third party
suppliers and may send out confirmation letters of Year 2000 compliance if the
Company determines such action is necessary. In the event the Company determines
that any third party presents a risk arising from failure to be Year 2000
compliant, then the Company will seek to replace such third party. The Company
cannot, however, guarantee that the systems of other entities will be converted
on a timely basis. Failure of such third party entities to be Year 2000
compliant may cause interruptions in the Company's operations.
The foregoing statements are based upon management's current assumptions.
11
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
During March 1999, the Company issued 800,000 shares to individuals for
$50,000 cash.
During March 1999, the Company issued 300,000 shares to a Director for
promotional services
During April 1999, the Company issued 15,100 shares to distributors for
promotional contest winnings and services
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information
On May 24, 1999 Ms. Thaisa Branco,Vice President, Secretary, and Director,
resigned and Mr. Michael Johnson was elected Vice President, Secretary, and
Director.
On June 14, 1999, Mr. William Clapham, President and Director, resigned and
Mr. John Southerland was elected President and Director.
On June 14, 1999 Ms. Susan Honeycutt was elected Director of Operations.
On June 14, 1999 Dr. Lonnie Honeycutt was elected Director of Research.
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
April 30, 1999.
12
<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: June 18, 1999 By: /s/
-------------------------- ------------------------------------------
Michael Johnson, Vice President, Secretary
and Director
(Principal financial and
Accounting Officer)
13
<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 APRIL 30, 1999 AND THE
RELATED STATEMENTS OF OPERATIONS AND CASH FLOWS FOR THE NINE MONTHS THEN ENDED
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUL-31-1999
<PERIOD-END> APR-30-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 35
<ALLOWANCES> 0
<INVENTORY> 162
<CURRENT-ASSETS> 201
<PP&E> 147
<DEPRECIATION> 83
<TOTAL-ASSETS> 523
<CURRENT-LIABILITIES> 216
<BONDS> 0
0
0
<COMMON> 11
<OTHER-SE> 296
<TOTAL-LIABILITY-AND-EQUITY> 523
<SALES> 1032
<TOTAL-REVENUES> 1032
<CGS> 296
<TOTAL-COSTS> 296
<OTHER-EXPENSES> 1195
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10
<INCOME-PRETAX> (470)
<INCOME-TAX> (74)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (395)
<EPS-BASIC> (0.05)
<EPS-DILUTED> (0.05)
</TABLE>
