Quarterly Report 21-Aug-2007
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS
The following discussion and analysis should be read in conjunction with Invicta Group's consolidated financial statements included in this report.
Results of Operations
New Revenue Stream
The company acquired an escorted tour operator March 1, 2007. The company will provide marketing services via their Email database of 40 Million travel enthusiasts, promoting the tours and offering a discount for early bookings. The acquisition, Maupintour, is a leader in the travel industry known for its upscale escorted tours to over 50 Countries.
Revenues
Revenues for the 2nd Quarter were generated from Internet Media sold by Travel Hot Link and Consumer travel packages sold by Maupintour. Internet Media Advertising revenues are flat fees charged to travel suppliers (hotels, airlines, tour operators) for media purchase on website www.travelhotlink.com
. Revenues for Consumer travel are escorted tours for groups ranging in size from 12-25 people. Revenues are recognized when a traveler is paid in full and their trip departs. Revenues for the 2nd Quarter ended June 30, 2007 were $718,364 compared to revenues of $51,700 for the 2nd Quarter ended June 30, 2006. The revenues in 2007 were generated from Internet Media Advertising and Consumer travel packages vs. 2006 revenues were from airline commissions. Revenues for 6 months 2007 were $913,576 versus same period 2006 revenues were $76,761.
Expenses
The major components of expenses are general and administrative expenses. The 2nd Quarter June 30, 2007 major expenses were: Payroll $238,714; Internet design $25,332; Professional fees $66,325; Interest Expense $49,627; the total G&A expenses for the quarter were $689,537
Acquisition of Tour Operator
March 1, 2007 Invicta acquired a Tour Operator that offers escorted tours to 50 Countries. The acquisition's revenues in 2006 were $7.1 million. The company was acquired for $1 cash and acceptance of $1,085,818 debt.. The audit has not been completed as of 8/20/2007, the audit started 8/14/07 ; estimating a completed audit in 30-45 days.
Impairment Charge Acquisition
The Company's 2007 quarterly consolidated results include the operations of
Maupintour, LLC. from the date of acquisition.
Liabilities assumed exceeded assets acquired by $1,085,818. The resulting
intangible asset was written off as an Asset impairment charge allocated as
follows:
Customer list $200,000
Goodwill $885,818
14
Fair values were determined by management's estimates without independent appraisal.
The Company will amortize the customer list beginning April 1, 2007 over a 5- year period. All goodwill acquired has been written off during the quarter ending March 31, 2007 as an impairment loss.
Net Profit/Net Losses
Net profit from Operations for the Quarter ended June 30, 2007 was $(546,988); income per share: $(0.008) compared to a net loss of $(125,460); loss per share $(0.025) for the Quarter ended June 30, 2006. The losses for the past 6 months 2007 totaled $(1,684,852) versus $(288,951) losses for the first 6 months 2006; $885,818 Goodwill was expensed for the acquisition of Maupintour.
Funding
Invicta has received equity funding advances from an Institutional Investor totaling $162,708 for the June 30, 2007 Quarter, and Invicta paid off $73,179 of debt in the Quarter. The debenture balance due as of June 30, 2007 totaled $338,292 Payments are made with conversions of free trading stock based on the formula: a 25% discount of the average of the three lowest days Bids, for the 20 days before conversion notice is delivered.
Liquidity
June 30, 2007 and 2006, Invicta Group's current liquidity ratios were (.22%) and (.043%) respectively. Invicta Group has not generated sufficient revenue in any period, to carry its costs of operations. Invicta has derived its liquidity principally from the sale of stock.
Common Stock Issued 2nd Quarter 2007
Invicta issued 130,433,000 common shares in the 2nd Quarter of 2007; 12,825,000 shares were issued for $37,625 consulting, 2,500,000 were issued for professionals fees of $15,000. 112,000,000 shares were issued to raise $162,708 equity funds and pay off debentures of $43,096 owed to Institutional Investor; and 3,108,000 shares were used to pay individual debentures that matured. Total shares issued 6/30/2007 were 167,401,488.
Capital Resources
Additional capital needs to be invested in the company. Invicta will need a minimum of $500,000 cash to assure the working capital is available to the company to implement its business plan.
