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 the quarter ended January 31, 2002 Commission file number 000-33151
DAKOTA IMAGING, INC.
(Exact name of registrant as specified in its charter)
North Dakota 45-0420093
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4483 West Reno Avenue
Las Vegas, Nevada 89118
(Address of principal executive offices) (Zip Code)
(702) 221-8070
Registrant's telephone number, including area code
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
As of March 1, 2002 there were 34,015,000 shares of common stock outstanding.
Transitional Small Business Disclosure Format (check one)
Yes No X_
DAKOTA IMAGING, INC.
JANUARY 31, 2002
INDEX
PART I - FINANCIAL INFORMATION Page No.
Item 1. Financial Statements
Condensed Consolidated Balance Sheet
as of January 31, 2002 and October 31, 2001 3
Condensed Consolidated Statement of
Operations three months ended January 31,
2002 and 2001 4
Condensed Consolidated Statement of Cash
Flows ended January 31, 2002 and 2001 5
Notes to Condensed Consolidated Financial
Statements 6-8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operation 9
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matter to a Vote of
Security Holders 12
Item 5. Other Information 13
Item 6. Exhibits and Reports of Form 8-K 13
SIGNATURES 14
DAKOTA IMAGING, INC.
BALANCE SHEET
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
January 31, October 31,
2002 2001
Assets (Unaudited)
Current assets
Cash $ 1,443 $ 42,298
Accounts Receivables 51,196 52,779
---------- ----------
Total current assets 52,639 95,077
---------- ----------
Investments 62,739 58,070
Fixed Assets
Property and Equipment 130,288 130,288
Les: Accum Depreciation (75,063) (71,179)
---------- ----------
Total Fixed Assets 55,225 59,109
Other Assets
Deferred Tax Benefit 84,698 36,470
---------- ----------
Total Other Assets 84,698 36,470
Total Assets $ 255,300 $ 248,726
========== ==========
Liabilities and stockholders' equity
Current liabilities
Accrued Expenses $ 7,640 $ 9,920
Accrued Payroll Liabilities 718 236
Notes Payable 10,474 8,814
---------- ----------
Total current liabilities 18,832 18,970
Long-Term Liabilities
Notes Payable 44,906 45,996
---------- ----------
Total Liabilities 63,738 64,996
Stockholders' equity
Preferred Stock
50,000,000 authorized shares, par value $.001
no shares issued and outstanding - -
Common Stock
100,000,000 authorized shares, par value $.001
11,723,000 and 11,723,000 shares issued and
outstanding respectively. 11,723 11,723
Deferred Consultants Contract (108,281) (201,094)
Additional Paid-in-Capital 429,027 429,027
Accumulated other comprehensive income (loss) 1,582 (3,945)
Accumulated Deficit (142,489) (51,951)
---------- ----------
Total Stockholders' Equity 191,562 183,760
---------- ----------
Total Liabilities and Stockholders' Equity $ 255,300 $ 248,726
========== ==========
See notes to unaudited financial statements.
DAKOTA IMAGING, INC.
THREE MONTHS STATEMENT OF OPERATIONS
UNAUDITED
Three Months Ended
January 31,
2002 2001
Revenues
Revenues $ 99,587 $ 75,880
---------- -----------
Cost of Revenues
Salaries 55,001 67,492
Equipment Leasing 13,715 18462
---------- -----------
Gross profit 30,871 (10,074)
Expenses
Auto Expense 3,926 4,752
Advertising 140 400
Depreciation Expense 3,884 3,884
Telephone 808 1,057
Consulting 92,813 6,187
Professional Fees 5,210 62,850
Rent 2,100 3,354
Employee Benefits 24,083 23,599
Payroll Taxes 3,848 3,514
Supplies 2,627 2,777
Other Expenses 23,768 13,240
---------- -----------
Total Expenses 163,207 125,614
Net Income (Loss) from Operation $ (132,336) $ (135,688)
Other Income
Interest Income - 99
Capital Gains (loss) on Investments - (20,152)
Interest Expenses (4,843) (598)
---------- -----------
Total Other Income (4,843) (20,651)
Net Income (Loss) Before Tax (137,179) (156,339)
Income Tax Benefit (Expense) 46,641 53,155
---------- -----------
Net Income (Loss) $ (90,538) $ (103,184)
=========== ===========
Basic and diluted loss per common share $ (0.008) $ (0.009)
=========== ===========
Weighted Average number of Common Shares
used in per share calculations 11,723,000 11,069,333
=========== ===========
See notes to unaudited financial statements.
DAKOTA IMAGING, INC.
STATEMENT OF CASH FLOWS
UNAUDITED
Three Months Ended
January 31,
2002 2001
Cash Flows from Operation Activities
Net Loss $ (90,538) $ (103,184)
Adjustments to reconcile net loss to net cash
provided (used) to operating activities:
Depreciation 3,884 3,884
Deferred Tax Benefit (46,228) (52,270)
Capital Gains (Losses) on Investments - 20,152
Deferred Valuation of Stock issued for 92,813 6,187
Consulting Services
Changes in operating assets and liabilities:
Accounts receivable 1,583 (7,078)
Accrued Payroll Liabilities (1,798) (718)
---------- -----------
Total Adjustments 50,254 (29,843)
---------- -----------
Net Cash (used) in operating activities (40,284) (133,027)
Cash Flows from Investing Activities
Proceeds from Sale of Investments - 80,000
Purchase of Investments - -
Capital Expenditures - -
---------- -----------
Net Cash (used) by investing activities - 80,000
Cash Flows from Financing Activities
Payment on Long-Term Debt (571) (5,945)
Long-Term Debt - -
Proceeds from issuance of common stock - 59,500
---------- -----------
Net Cash provided by financing activities (571) 53,555
---------- -----------
Net Increase (Decrease) in Cash (40,855) 528
Cash, beginning of period 42,298 3,468
---------- -----------
Cash, end of period $ 1,443 $ 3,997
========== ===========
Supplemental cash flow information
Cash Paid for interest $ 598 $ 598
========== ===========
Cash Paid for income taxes $ - $ -
========== ===========
Stock Issued for services $ - $ 148,500
========== ===========
See notes to unaudited financial statements.
Dakota Imaging, Inc.
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2002 AND 2001
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The unaudited financial statements included herein have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Item
301(b) of Regulation S-B. 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 (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for
the three months ended January 31, 2002 and 2001 are not necessarily
indicative of the results that may be expected for the fiscal year ending
October 31, 2002. For further information, the statements should be read in
conjunction with the financial statements and notes thereto included in the
Company's annual report on Form 10-KSB.
Shares of common stock issued by the Company for other than cash have
been assigned amount equivalent to the fair value of the service or assets
received in exchange.
NOTE 2 - OPERATING EXPENSES
In November 2000, a total of $60,000 was paid for legal and consulting
fees associated with the registration statement and Form SB-2. These start-up
and organization costs are recorded in accordance with the provisions of
Statement of Position 98-5, "Reporting Costs of Start-up Activities" ("SOP 98-
5"). SOP 98-5 requires that the costs of start-up activities, including
organization costs, be expensed as operating expenses, as incurred.
NOTE 3 - COMMON STOCK
In 1991, a total of 1,000 shares of stock were issued for assets and
founder services to the founders of the Company. On November 20, 2000, the
Company approved a 1000:1 forward split of the common shares making a total
number of shares outstanding 10,000,000.
On November 22, 2000, the Company approved the issuance of 1,485,000
shares to five individuals pursuant to a two-year consulting agreement. The
Company has valued the shares at $.05 per share and the expense will be
recognized over the term of the consulting agreements.
In December of 2000 the Company completed a Private Placement Memorandum
(dated December 4, 2000) with 35 Investors. The issue was priced at $.25 per
share for a total of 238,000 shares making the total outstanding shares of
11,723,000.
Dakota Imaging, Inc.
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2002 AND 2001
(Unaudited)
NOTE 4 - COMMITMENTS AND CONTINGENCIES
The Company, from time to time, may be subject to legal proceedings and
claims that arise in the ordinary course of its business. Currently, the
Company is not subject to any legal proceedings or other claims.
NOTE 5 - SUBSEQUENT EVENTS
Stock Split
On February 8, 2002, the Company effectuated a 5 for 1 forward split of
its 11,723,000 then issued and outstanding shares of common stock resulting
in the Company having 58,615,000 shares of issued and outstanding common
stock.
Merger Agreement
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 ("Voyager"),
whereby the Company issued 3,660,000 shares of its Series A preferred stock
in exchange for 100% of Voyager's outstanding common stock. Pursuant to the
terms of the merger, Voyager merged with DSC wherein DSC ceased to exist and
Voyager became a wholly owned subsidiary of the Company.
The Series A preferred stock carries the following rights and
preferences:
* 10 to 1 voting rights per share;
* Each share has 10 for 1 conversion rights to shares of common stock
(every 1 share of Series A preferred stock has the right to convert into 10
shares of common stock)
* No redemption rights
* No face value
Concurrent with the closing of the Merger, 2,160,000 shares of the
Series A preferred stock were immediately converted into 21,600,000 shares of
common stock.
Dakota Imaging, Inc.
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2002 AND 2001
(Unaudited)
In addition, the Company executed a Property Transfer Agreement with
certain of its shareholders wherein certain assets of the Company were
transferred to Lawrence Nieters, and Joell Nieters, in exchange for Forty-
Seven Million (47,000,000) shares of common stock held by Lawrence Nieters,
and Joell Nieters.
Concurrent with the consummation of the Merger, the Company transferred
its principal executive office to 4483 West Reno Avenue, Las Vegas, NV 89118.
Pursuant to the terms of the Merger Agreement, the board of directors of
the Company, consisting of Lawrence Nieters, JoEll Nieters and Frances
Hedman, appointed Gregg Giuffria, Veldon Simpson, and Richard Hannigan as new
directors of the Company to serve until the next annual meeting of
shareholders, or until their successors have been elected. Following their
appointment of new directors, Lawrence Nieters, JoEll Nieters and Frances
Hedman resigned as directors of the Company.
NOTE 6 - GOING CONCERN
The accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The ability of
the Company to continue as a going concern is dependant upon obtaining future
profitable operations. The financial statements do not include any
adjustments relating to the recoverability and classification of liabilities
that might be necessary should the Company be unable to continue as a going
concern.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The following discussion and analysis should be read in conjunction with
the Company's unaudited financial statements and the notes thereto contained
elsewhere in this filing.
Overview
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 ("Voyager"),
whereby the Company issued 3,660,000 shares of its Series A preferred stock
in exchange for 100% of Voyager's outstanding common stock. Pursuant to the
terms of the merger, Voyager merged with DSC wherein DSC ceased to exist and
Voyager became a wholly owned subsidiary of the Company.
The Series A preferred stock carries the following rights and
preferences:
* 10 to 1 voting rights per share;
* Each share has 10 for 1 conversion rights to shares of common stock
(every 1 share of Series A preferred stock has the right to convert into 10
shares of common stock)
* No redemption rights
* No face value
Concurrent with the closing of the Merger, 2,160,000 shares of the
Series A preferred stock were immediately converted into 21,600,000 shares of
common stock.
Pursuant to current North Dakota law the Company did not need the
approval of its shareholders to consummate the Merger as the constituent
corporations in the merger were Dakota Subsidiary Corp. and Voyager Ventures,
Inc. The Company was not a constituent corporation in the merger.
Further, pursuant to the terms of the Merger Agreement, the board of
directors of the Company, consisting of Lawrence Nieters, Joell Nieters and
Frances Hedman, appointed Gregg Giuffria, Veldon Simpson, and Richard
Hannigan as new directors of the Company to serve until the next annual
meeting of shareholders, or until their successors have been elected.
Following their appointment of new directors, Lawrence Nieters, Joell Nieters
resigned as directors.
In addition, the Company executed a Property Transfer Agreement with
certain of its shareholders wherein certain assets of the Company were
transferred to Lawrence Nieters, and Joell Nieters, in exchange for Forty-
Seven Million (47,000,000) shares of common stock held by Lawrence Nieters,
and Joell Nieters.
ABOUT VOYAGER VENTURES, INC.
Voyager Ventures, Inc., ("Voyager"), was formed on January 15, 2002, as
a Nevada corporation, to design, finance, develop and manage a unique new
attraction to be located on the Las Vegas Strip (the "Project").
It is the intention of Voyager to build the world's largest Ferris wheel
with 33 vehicles called Sky Cruiser's. The vertical revolving vehicle will
overlook the Las Vegas Strip as it revolves higher than a 50-story building
at 518 feet. One slow rotation in a vehicle will last 24 minutes and each
vehicle will travel at 0.652 MPH.
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 needs. Voyager continues to have a working
capital deficiency that raises substantial concern regarding its ability to
continue as a going concern, as referenced in its audited financial
statements attached to this Current Report.
Voyager will require substantial additional funds to fulfill its
business plan and successfully commercialize its technology. Voyager intends
to raise these needed funds from private placements of its securities, debt
financing or internally generated funds from the licensing of its technology
or the sale of products.
Agreement and Plan of Reorganization
On January 30, 2002 Voyager entered into an Agreement with the
exchanging members of Outland Development, LLC, ("OD"), a Nevada limited
liability company (hereinafter referred to as "OD Members"). Voyager obtained
the Membership Interests in exchange (the "Exchange") for 15 million shares
of its Common Stock, par value $.001 per share. Prior to the completion of
the Exchange, there were 21.6 million shares of Common Stock issued and
outstanding of Voyager, of which 3.6 million shares were held by the Rainbird
Trust, 6 million shares were held by Gregg R. Giuffria, 6 million shares were
held by Richard L. Hannigan, Sr., and 6 million shares were held by Veldon
Simpson. After the completion of the Exchange, there existed 36.6 million
shares of Common Stock of Voyager, of which the OD Members possessed 33
million shares.
Pursuant to the terms and conditions of the Agreement, Voyager took
control of the interests of OD. All operations are the sole responsibility
and under the sole control of Voyager.
Technology Introduction
Voyager intends to plan, finance, construct, develop, operate and own
the Project consisting of, among other things, a first-class "Ferris Wheel"
along with retail space and a parking garage to be located on the "Las Vegas
Strip," located in Las Vegas, Nevada. The Project will include (i) the
"Ferris Wheel" and its related amenities, (ii) a retail mall with
approximately 50,000 square feet of leaseable space, (iii) a parking garage,
(iv) all real property interests at the site, and (v) such other developments
as Owner and Operator mutually agree to include in the Project.
Results of Operations for the three months ended January 31, 2002 as compared
to the three months ended January 31, 2001.
The Company's net loss was $90,538 or $.008 per share for the three
months ended January 31, 2002 as compared to a net loss of $103,184 for the
three months ended January 31, 2001. This represents a 12% or $12,646
decrease over the same period last year. This net loss decrease was primarily
the result of a decrease in professional fees. Revenues for the three months
ended January 31, 2002 were $99,587 as compared to $75,880 for the three
months ended January 31, 2001.
The Company's total operating expenses were $163,207 for the three
months ended January 31, 2002 as compared to $125,614 for the three months
ended January 31, 2001. This represents a 30% or $37,593 increase over the
same period last year. This increase in expenses was primarily the result of
a increase in consulting fees and employee benefits.
Liquidity and Capital Reserves
As of January 31, 2002 (Unaudited)
As of January 31, 2002, the Company's assets were $255,300 and its
current liabilities were $63,738.
Subsequent Plan of Operation
The preceding discussions on the Results of Operations and Liquidity and
Capital Reserves were for Dakota Imaging, Inc. as they related to Dakota's
business prior to the February 8, 2002 reverse triangular merger with Voyager
Ventures, Inc.
Investors are cautioned that future results of operations will be of the
newly contemplated business of Voyager Ventures, Inc., which is to design,
finance, develop and manage a unique new attraction to be located on the Las
Vegas Strip.
Investors should be reminded that Voyager will require substantial
additional funds to accomplish its business objectives and that Voyager has
yet to generate revenues from any source. Accordingly, 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.
The Company plans continued to fund its deficit cash flow from private
placements of the Company's common stock. It is anticipated that loans and
the sale of the Company's stock will continue until such time as the Company
generates sufficient revenues from its operations to cover operating
expenses. In the event the Company is unable to generate capital from loans,
the sale of stock, or revenues, the Company will be forced to cease
operations until additional capital is available.
Forward-Looking Statements and Associated Risks
This Quarterly Report on Form 10-QSB contains forward-looking
statements. These forward looking statements are based largely on the
Company's expectations and are subject to a number of risks and
uncertainties, many of which are beyond the Company's control, including, but
not limited to, economic, competitive and other factors affecting the
Company's operations, markets, products and services, expansion strategies
and other factors discussed elsewhere in this report and the documents filed
by the Company with the Securities and Exchange Commission. Actual results
could differ materially from these forward-looking statements. In light of
these risks and uncertainties, there can be no assurance that the forward-
looking information contained in this report will in fact prove accurate.
The Company does not undertake any obligation to revise these forward-looking
statements to reflect future events or circumstances.
PART II--OTHER INFORMATION
Item 1. Legal Proceedings.
None
Item 2. Changes in Securities.
On February 8, 2002, the Company effectuated a 5 for 1 forward split of
its 11,723,000 then issued and outstanding shares of common stock resulting
in the Company having 58,615,000 post split common shares.
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 ("Voyager"),
whereby the Company issued 3,660,000 shares of its Series A preferred stock
in exchange for 100% of Voyager's outstanding common stock. Concurrent with
the closing of the Merger and the execution of the Property Transfer
Agreement, 47,000,000 shares of the Registrant's common stock were cancelled.
Additionally, simultaneously upon closing of the Merger 2,160,000 shares of
the Series A preferred stock immediately converted into 21,600,000 shares of
common stock, resulting in 33,215,000 shares of common stock issued and
outstanding as of the date of closing of the Merger.
On February 15, 2002 the Company sold 800,000 restricted shares of
common stock at a price of $.50 per share for $400,000 in a transaction
pursuant to an exemption provided by Regulation D 506. The investor as
provided under the terms of the subscription agreement is an accredited
investor as defined in Section 501 of Regulation D.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matter to a Vote of Security Holders.
On March 6, 2002 the Company filed a Preliminary 14A Proxy announcing a
stockholders meet to be held on April 4, 2002, at 10:00 a.m., local time, at
The Conference Room, Suite 115 - 1850 E. Flamingo Road, Las Vegas, Nevada
89119. At the Annual meeting, the stockholders will be asked to consider and
vote on the following proposals;
1. To elect a new Board of Directors for Dakota to serve through the next
year, (current nominations are for Gregg Giuffria, Veldon Simpson, and
Richard Hannigan);
2. To change the Company's fiscal year end to December 31;
3. To change the Company's name from Dakota Imaging, Inc. to Voyager
Entertainment International, Inc.;
4. To amend the Company's Certificate of Incorporation;
5. To amend and restate the Company's Bylaws;
6. To Ratify the appointment of MERDINGER, FRUCHTER, ROSEN & CORSO, P.C. to
serve as the Company's auditor;
7. To adopt a stock option plan providing for options on up to 5 million
shares of common stock; and
8. To transact such other business as may properly come before the Annual
meeting or any adjournment or postponement.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
DAKOTA IMAGING, INC.
By:/s/ Richard Hannigan
Richard Hannigan
President
Date: March 18, 2002