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EX-31.B - CERTIFICATION CFO - VIDA LIFE INTERNATIONAL, LTD.ex31b.htm
EX-31.A - CERTIFICATION CEO - VIDA LIFE INTERNATIONAL, LTD.ex31a.htm
EX-32 - CERTIFICATION CEO AND CFO - VIDA LIFE INTERNATIONAL, LTD.ex32a.htm

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q

|X|     QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2009

OR

|_|    TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______

Commission File Number 000-84290

VIDA LIFE INTERNATIONAL, LTD.
 
Corporate Logo

(Exact name of registrant as specified in its charter)


Nevada
20-5046886
 
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
 

7046 Kentfield Drive, Cameron Park, CA  95682
(Address of Principal Executive Offices)

(415) 738-2136
(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed from last report)

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 xNo o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o                                                                           Accelerated filer o
Non-accelerated filer o                                                                           Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o  No  x

As of November 10, 2009 there were 13,480,938 shares of the issuer’s common stock, $0.001 par value, outstanding.
 


VIDA LIFE INTERNATIONAL, LTD.


 




 
                 VIDA LIFE INTERNATIONAL, LTD.


 
Part I - FINANCIAL INFORMATION
    Item 1 . Financial Statements.
 
 
UNAUDITED CONDENSED BALANCE SHEETS

 
ASSETS
 
September 30, 2009
(Unaudited)
   
December 31, 2008
(Audited)
 
             
Current assets:
           
Cash and cash equivalents
  $ -     $ 32,891  
Trade accounts receivable
    1,500       -  
Inventory
    484       2,047  
Prepaid expenses
    1,000       -  
                 
Total current assets
    2,984       34,938  
                 
Property and equipment, net
    5,942       7,228  
                 
Total assets
  $ 8,926     $ 42,166  

 
The accompanying notes are an integral part of these financial statements.

 
-1-

   
VIDA LIFE INTERNATIONAL, LTD.


 
UNAUDITED CONDENSED BALANCE SHEETS (continued)

             
LIABILITIES AND SHAREHOLDERS' DEFICIT
 
September 30, 2009
(Unaudited)
   
December 31, 2008
(Audited)
 
             
Current liabilities:
           
Current portion of note payable - shareholder, net
  $ 358,698     $ -  
Trade accounts payable
    56,787       30,172  
Accrued expenses
    36,950       12,101  
Shareholder/officer advances 
    19,000       -  
Accrued directors' fees
    18,500       7,000  
Accrued officer's compensation
    402,467       218,806  
                 
Total current liabilities
    892,402       268,079  
                 
Note payable - shareholder, net
    -       296,745  
                 
Total  liabilities
    892,402       564,824  
                 
Shareholders' deficit:
               
Common stock, $.001 par value; 50,000,000 shares authorized;
         
13,480,938 and 13,380,938 shares issued and outstanding
         
    at 9/30/09 and 12/31/08, respectively
    13,480       13,380  
Additional paid-in-capital
    745,566       726,666  
Accumulated deficit
    (1,642,522 )     (1,262,704 )
                 
Total shareholders' deficit
    (883,476 )     (522,658 )
                 
Total liabilities and shareholders' deficit
  $ 8,926     $ 42,166  
                 
The accompanying notes are an integral part of these financial statements.

 
 
-2-

 




UNAUDITED CONDENSED STATEMENTS OF OPERATIONS


   
Three Months Ended
   
Nine Months Ended
 
   
September 30,
   
September 30,
 
                         
   
2009
   
2008
   
2009
   
2008
 
                         
Net sales
  $ 5,753     $ 3,575     $ 12,931     $ 121,370  
                                 
Cost of good sold
    4,613       1,598       7,587       103,070  
                                 
Gross profit
    1,140       1,977       5,344       18,300  
                                 
Operating expenses
    96,052       94,384       291,261       330,487  
                                 
Operating loss
    (94,912 )     (92,407 )     (285,917 )     (312,187 )
                                 
Other income (expense):
                               
Interest income
    -       673       52       3,419  
Gain on debt extinguishment
    -       64,430             64,430  
Interest expense
    (30,651 )     (31,441 )     (93,953 )     (95,191 )
                                 
Total other income (expense)
    (30,651 )     33,662       (93,901 )     (27,342 )
                                 
Net loss before income taxes
    (125,563 )     (58,745 )     (379,818 )     (339,529 )
                                 
Income tax provision
    -       -       -       -  
                                 
Net loss
  $ (125,563 )   $ (58,745 )   $ (379,818 )   $ (339,529 )
                                 
Basic and diluted loss per common share
  $ (0.01 )   $ (0.00 )   $ (0.03 )   $ (0.03 )
                                 
Basic and diluted weighted average common shares outstanding
    13,480,938       13,280,898       13,429,656       12,416,248  
                                 
 
The accompanying notes are an integral part of these financial statements.
-3-

 

 VIDA LIFE INTERNATIONAL, LTD.



UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS


   
Nine Months Ended
September 30,
 
             
   
2009
   
2008
 
             
Cash flows from operating activities:
           
       Net loss
  $ (379,818 )   $ (339,529 )
       Adjustments to reconcile net loss to net cash flows
               
           used in operating activities:
               
               Depreciation and amortization
    2,334       3,693  
               Amortization of debt discount
    61,953       65,191  
               Gain on extinguishment of debt
    -       (64,430 )
               Common stock issued for services
    7,000       -  
               Related party exchange of stock for interest
    12,000        
       Changes in operating assets and liabilities:
               
               Accounts receivable
    (1,500 )     6,938  
               Prepaid expenses
    (1,000 )     -  
               Inventory
    1,563       (153 )
               Accounts payable
    26,615       (1,032 )
               Accrued expenses
    24,849       (17,793 )
               Accrued directors' fees
    11,500       6,000  
               Accrued officer's compensation
    183,661       151,636  
               Deferred revenue
    -       (4,200 )
                 
                   Net cash flows used in operating activities
    (50,843 )     (193,679 )
                 
Cash flows from investing activities:
               
       Purchases of property and equipment
    (1,048 )     (1,075 )
                 
                   Net cash flows used in investing activities
    (1,048 )     (1,075 )
                 
Cash flows from financing activities:
               
       Net advances from shareholder/officer
    19,000       -  
                 
                   Net cash flows provided by financing activities
    19,000       -  
                 
Net change in cash
    (32,891 )     (194,754 )
                 
Cash and cash equivalents, beginning of year
    32,891       271,082  
                 
Cash and cash equivalents, end of year
  $ -     $ 76,328  
                 
Supplemental disclosure of cash flow information:
               
       Cash paid during the year for interest
  $ -     $ 40,000  
                 
Non-cash financing activities:
               
       Fair value of detachable stock warrants
  $ -     $ 8,000  
                 
       Issuance of common stock for services previously accrued
  $ -     $ 356,488  
 
The accompanying notes are an integral part of these financial statements.
 

 
 
-4-

 
VIDA LIFE INTERNATIONAL, LTD.


 
Notes to Financial Statements
September 30, 2009

1.           BASIS OF PRESENTATION

The accompanying unaudited condensed financial statements of Vida Life International, Ltd. (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information and with the rules and regulations of the Securities and Exchange Commission (SEC).  Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for the fiscal year as a whole or any other interim period.  In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and changes in cash flows at September 30, 2009 and for all periods presented have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.  It is suggested that these condensed financial statements be read in conjunction with the audited financial statements and notes for the years ended December 31, 2008 and 2007, which are included in the Company’s Annual Report on Form 10-K for the years ended December 31, 2008 and 2007.

The presentation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and disclosure of contingent assets and liabilities at the balance sheet date, and the reported amounts of revenues and expenses during the reporting period.  The estimates and assumptions used in the accompanying condensed financial statements are based upon management’s evaluation of the relevant facts and circumstances as of the date of the financial statements.  Actual results could differ from those estimates.

2.           LIQUIDITY/GOING CONCERN

The Company has incurred significant operating losses during its periods of operation.  At September 30, 2009, the Company reports a negative working capital position of $889,418, an accumulated deficit of $1,642,522 and a shareholders’ deficit of $883,476.  It is management’s opinion that these facts raise substantial doubt about the Company’s ability to continue as a going concern without additional debt or equity financing or the ability of the Company to increase revenues. The Company is actively seeking opportunities to obtain additional financing.  Nevertheless, the Company is uncertain such financing will be available on terms favorable or acceptable to the Company, if at all. If adequate funds are not available on acceptable terms, we may be unable to expand, develop or enhance our products or to respond to competitive pressures, or we may be required to abandon our business or our status as a public reporting company.

 
-5-

 
VIDA LIFE INTERNATIONAL, LTD.


 
3.           CONCENTRATION OF RISKS

Major Customers

The following is a schedule of significant sales to customers for the nine months ended September 30, 2009 and 2008, and significant customer accounts receivable balances as of September 30, 2009 and 2008:

   
2009
 
2008
 
Customer
 
Percent
of Sales
 
Percent
of A/R
 
Percent
of Sales
 
Percent
of A/R
                 
A
 
31%
 
100%
 
-
 
    -
B
 
24%
 
       -
 
-
 
     -
 C       -   87%   

Geographic Concentrations

Export sales as a percentage of total sales were 73% and 96% for the nine months ended September 30, 2009 and 2008, respectively.  Export sales are attributed to the country where the product is shipped.  All export sales are negotiated, invoiced and paid in US dollars.  Export sales by country are as follows:

   
2009
   
2008
 
             
United States
  $ 3,520     $ 4,687  
Mexico
    371        
Japan
    4,040       765  
Pakistan
    -       7,178  
Australia
    759       -  
Nigeria
    -       105,000  
Czech Republic
    4,140       2,540  
Other
    101       1,200  
    $ 12,931     $ 121,370  
                 

4.           NOTE PAYABLE - SHAREHOLDER

On March 19, 2007, the Company delivered a promissory note (the “Note”) in the principal amount of $400,000 to one of its shareholders for a loan in said amount.  The Note bears interest at 10% per annum, requiring quarterly interest payments only, with the entire principal balance originally due March 19, 2009.  The Note is secured by 1,000,000 shares of restricted common stock.  As further consideration for the Note, the Company issued a detachable stock warrant to the shareholder, providing the shareholder the right to purchase up to 200,000 shares of the Company’s common stock at $1.00 per share at any time during the duration of the Note.  The proceeds of the Note were allocated to the Note and stock warrant, based on their relative fair values. Accordingly, $175,000 was originally allocated to the stock warrant as a discount to the Note.

On August 4, 2008, the shareholder agreed to amend the Note to extend the maturity date to March 19, 2010.  No consideration was provided to the shareholder beyond the extension of the maturity date of the Note and the detachable warrant.  The amendment of the Note was accounted for as an extinguishment of debt. Accordingly, the Company recorded the amended Note and detachable stock warrant at their fair values and recorded a gain from the extinguishment of the original Note and detachable stock warrant of $64,430 during the fiscal quarter ended September 30, 2008. 
 
The amended Note and detachable stock warrant were recorded at their fair value at $265,201 and $8,000, respectively.  The difference of $134,799 between the fair value of the amended Note and its face value has been recorded as a discount to the amended Note and will be amortized to the amended Note and interest expense over the remaining term of the Note using the effective interest rate method. The fair value of the detachable stock warrant was estimated as of the date of the amended Note using the Black-Scholes pricing model with the following assumptions:  (i) a risk-free interest rate of 2.42%; (ii) market price of the underlying stock of $0.10 per share; (iii) an expected term of 1.5 years; and (iv) a volatility rate of 180%.

Interest expense related to the Note and the amortization of the debt discount was $30,651 and $31,441 for the three months ended September 30, 2009 and 2008, respectively.  Interest expense related to the Note and the amortization of the debt discount was $93,953 and $95,191 for the nine months ended September 30, 2009 and 2008, respectively.

The following table summarizes the Note payable - shareholder balance:

Balance December 31, 2006
  $ -  
Gross Proceeds
    400,000  
Less: Discount allocated to the warrants
    (175,000 )
Add:  Amortization of debt discount
    58,333  
         
Balance December 31, 2007
    283,333  
Add:  Amortization of debt discount
    54,298  
Less:  Extinguishment of debt
    (337,631 )
Add:  Fair value of amended Note
    265,201  
Add:  Amortization of amended Note discount
    31,544  
         
Balance December 31, 2008
    296,745  
Add:  Amortization of amended Note discount
    61,953  
         
Balance September 30, 2009 (face value of $400,000)
  $ 358,698  
         

Scheduled maturities of Note payable-shareholder are as follows for the years ended December 31:

2009
  $ -  
2010
    400,000  
    $ 400,000  
 

-6-

 
VIDA LIFE INTERNATIONAL, LTD.


 
5.           SHAREHOLDERS DEFICIT

Common Stock:

On May 21, 2009, the Company issued 100,000 shares of common stock valued at the trading market price of the Company’s common stock on the date of issuance ($0.07 per share or $7,000 in the aggregate) to an unrelated party for professional services rendered.

Stock Warrants Outstanding:

On March 19, 2007, the Company issued a detachable stock warrant for the purchase of up to 200,000 shares of common stock, at the per-share price of $1.00, in connection with a loan transaction (see Note 4).


6.           BASIC AND DILUTED EARNINGS (LOSS) PER SHARE

The Company computes earnings per share under two different methods, basic and diluted, and presents per share data for all periods in which statements of operations are presented. Basic earnings per share are computed by dividing net income by the weighted average number of shares of common stock outstanding during the applicable period. Diluted earnings per share are computed by dividing net income by the weighted average number of common stock outstanding during the period increased by potentially dilutive common shares.  Potentially dilutive common shares include stock warrants.  Dilution is determined using the treasury stock method.

The following table provides a reconciliation of the numerators and denominators used in calculating basic and diluted earnings per share for the three and nine months ended September 30, 2009 and 2008.
 

   
Three Months Ended
September 30,
   
Nine Months Ended
September 30,
 
   
2009
   
2008
   
2009
   
2008
 
Basic earnings (loss) per share calculation:
                       
Net loss to common shareholders
  $ (125,563 )   $ (58,745 )   $ (379,818 )   $ (339,529 )
                                 
Weighted average of common shares outstanding
    13,480,938       13,280,938       13,429,656       12,416,428  
                                 
Basic net loss per share
  $ (0.01 )   $ (0.00 )   $ (0.03 )   $ (0.03 )
                                 
Diluted earnings (loss) per share calculation:
                               
Net loss to common shareholders
  $ (125,563 )   $ (58,745 )   $ (379,818 )   $ (339,529 )
                                 
Weighted average of common shares outstanding
    13,480,938       13,280,938       13,429,656       12,416,428  
Warrants (1)                         
 Diluted weighted average common shares outstanding     13,480,938        13,280,938        13,429,656        12,416,428   
                                 
 Diluted net loss per share   $      (0.01)      $ (0.00)      $ (0.03)      $ (0.03)   
   
(1)  
The 200,000 common shares issuable upon exercise of outstanding warrants were anti-dilutive due to the Company’s net loss for the three and nine months ended September 30, 2009 and 2008, therefore they have been excluded from the calculation.
 
-7-


 
VIDA LIFE INTERNATIONAL, LTD.


 
7.           RELATED PARTY TRANSACTIONS

Exchange of Stock for Interest:

In connection with the Note payable - shareholder (see Note 4), on March 21, 2009, the Company’s majority shareholder transferred 100,000 shares of his personal holdings of the Company’s common stock, valued at $12,000, to the noteholder, on behalf of the Company, in lieu of the Company paying a $10,000 cash interest payment due at the time.  This transaction was recorded as an increase to additional paid-in-capital and interest expense.

Shareholder/Officer Advances:

On June 5, 2009 and August 20, 2009, the Company’s majority stockholder advanced $10,000 at each date to the Company to fund working capital requirements. On August 3, 2009 and August 24, 2009, principal repayments of $500 each were made against the balance.  The balance of $19,000 remains outstanding as of September 30, 2009.  These advances have an interest rate of 17%, with principal and interest due on demand. On October 12, 2009 the Company's majority stockholder advanced an additional $9,000 to the Company to fund working capital requirements under the same terms as the previous advances.

Accrued Officer’s Compensation:

The Chief Executive Officer of the Company has elected to forego a certain portion of his salary due to limited operating funds over the past several years. This amount does not accrue interest and is due and payable to this officer/stockholder as funds become available in the future. For the nine-month periods ended September 30, 2009 and 2008, the Company accrued related compensation expense of $180,000. For the three-month periods ended September 30, 2009 and 2008, the Company accrued related compensation expense of $60,000. Total accrued officer’s compensation as of September 30, 2009 and December 31, 2008 was $402,467 and $218,806, respectively.

Accrued Director’s Fees:

Director fees, included in operating expenses, totaled $13,500 and $15,511 for the nine months ended September 30, 2009 and 2008, respectively.  Director fees, included in operating expenses, totaled $4,500 and $6,000 for the three months ended September 30, 2009 and 2008, respectively. At September 30, 2009 and December 31, 2008, the Company has recorded accrued directors’ fees of $18,500 and $7,000, respectively.
 
 
-8-


VIDA LIFE INTERNATIONAL, LTD.


 
8.           BUSINESS SEGMENTS

The Company’s operations are conducted primarily over two operating segments.  The Company reports a measure of segment profit or loss, certain specific revenue and expense items and total segment assets. They use management’s approach in determining reportable business segments.  In particular, management identifies reportable segments on the basis of the internal organization used by management for making operating decisions and assessing performance of the businesses.  In this regard, management has identified the fishmeal and health supplement segments to be their reportable business segments. Incidental sales from non-reportable segments are reflected in corporate and other in the segment information table below.

Information regarding the Company’s segments is as follows for the three and nine months ended September 30, 2009 and 2008 respectively:

Nine Months Ended September 30, 2009
 
Fishmeal
   
Health Supplements
   
Corporate & Other
   
Total
 
Net Sales
  $ -     $ 11,431     $ 1,500     $ 12,931  
Gross Profit
  $ -     $ 4,844     $ 500     $ 5,344  
Operating Income (Loss)
  $ -     $ 4,552     $ (290,469 )   $ (285,917 )
Interest Income
  $ -     $ -     $ 52     $ 52  
Interest Expense
  $ -     $ -     $ 93,953     $ 93,953  
Depreciation & Amortization
  $ -     $ 292     $ 2,042     $ 2,334  
Assets
  $ -     $ 2,705     $ 5,921     $ 8,626  

Nine Months Ended September 30, 2008
 
Fishmeal
   
Health Supplements
   
Corporate & Other
   
Total
 
Net Sales
  $ 105,765     $ 15,605     $ -     $ 121,370  
Gross Profit
  $ 8,356     $ 9,944     $ -     $ 18,300  
Operating Income (Loss)
  $ 8,356     $ 9,006     $ (329,549 )   $ (312,187 )
Interest Income
  $ -     $ -     $ 3,419     $ 3,419  
Interest Expense
  $ -     $ -     $ 95,191     $ 95,191  
Depreciation & Amortization
  $ -     $ 938     $ 2,755     $ 3,693  
Assets
  $ -     $ 3,898     $ 84,114     $ 88,012  

Three Months Ended September 30, 2009
 
Fishmeal
   
Health Supplements
   
Corporate & Other
   
Total
 
Net Sales
  $ -     $ 5,753     $ -     $ 5,753  
Gross Profit
  $ -     $ 1,140     $ -     $ 1,140  
Operating Income (Loss)
  $ -     $ 1,049     $ (95,961 )   $ (94,912 )
Interest Income
  $ -     $ -     $ -     $ -  
Interest Expense
  $ -     $ -     $ 30,651     $ 30,651  
Depreciation & Amortization
  $ -     $ 91     $ 660     $ 751  
Assets
  $ -     $ 2,705     $ 5,921     $ 8,626  

Three Months Ended September 30, 2008
 
Fishmeal
   
Health Supplements
   
Corporate & Other
   
Total
 
Net Sales
  $ -     $ 3,575     $ -     $ 3,575  
Gross Profit
  $ -     $ 1,977     $ -     $ 1,977  
Operating Income (Loss)
  $ -     $ 3,145     $ (95,552 )   $ (92,407 )
Interest Income
  $ -     $ -     $ 673     $ 673  
Interest Expense
  $ -     $ -     $ 31,441     $ 31,441  
Depreciation & Amortization
  $ -     $ 313     $ 928     $ 1,241  
Assets
  $ -     $ 3,898     $ 84,114     $ 88,012  

Fishmeal is sold primarily as a high protein food ingredient for agricultural animal feed.  It is typically sold in large bulk shipments using outside contractors to process and package the product to the Company’s specifications.  Health supplements and related raw materials are inventoried, packaged and sold in much smaller cases and quantities. These items have typically gone through extensive design and development to achieve the desired formulation.

Management does not make any allocations of general operating expenses or research and development expenses when evaluating the performance of these segments.  These costs primarily consist of executive compensation, consulting fees and development costs which are evaluated on a company-wide basis.  Therefore, there is limited discrete segmented financial information available beyond sales and gross profit.
 
 
-9-

VIDA LIFE INTERNATIONAL, LTD.


 
9.           COMMITMENT
 
 
On October 30, 2008, the Board of Directors agreed in principle to enter into an employment agreement with the Chief Executive Officer.  On May 15, 2009, the Board of Directors further agreed to enter into an employment agreement with the Chief Executive Officer prior to seeking outside debt financing.  As of the date of this report, no employment agreement has been entered into nor have the material terms of such agreement been agreed upon.

10.           RECENT ACCOUNTING DEVELOPMENTS
 
In June 2009, the FASB issued guidance to eliminate the quantitative approach previously required for determining the primary beneficiary of a variable interest entity and requires ongoing qualitative reassessments of whether an enterprise is the primary beneficiary of a variable interest entity. This guidance is effective for fiscal years beginning after November 15, 2009. The Company does not expect the adoption of this standard to have any current impact on the Company's financial statements.
 
11.   SUBSEQUENT EVENTS
 
The Company has evaluated for disclosure subsequent events that have occurred up to November 10, 2009, the date of issuance of the financial statements.
 
 
-10-

 
 
VIDA LIFE INTERNATIONAL, LTD.


 
 
Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations set forth below should be read in conjunction with our audited financial statements, and notes thereto, contained in our Annual Report on Form 10-K for the year ended December 31, 2008 filed with the SEC on April 1, 2009.

Forward-Looking Statements

Some of the statements made in this section of our report are forward-looking statements. These forward-looking statements generally relate to and are based upon our current plans, expectations, assumptions and projections about future events.  Our management currently believes that the various plans, expectations, and assumptions reflected in or suggested by these forward-looking statements are reasonable.  Nevertheless, all forward-looking statements involve risks and uncertainties and our actual actions or future results may be materially different from the plans, objectives or expectations, or our assumptions and projections underlying our present plans, objectives and expectations, which are expressed in this report.  Examples of specific factors that might cause our actual results to differ from our current expectations include but are not limited to:

·  
Our need for additional financing to fund operations and capital expansion of our fishmeal business

·  
Our inability to successfully market and develop our heating technologies and fertilizing products

·  
Our inability to protect our intellectual property and developing technologies, or

·  
Our inability, for any reason, to retain our executive management personnel.

The foregoing list is not exhaustive.  In light of the foregoing, prospective investors are cautioned that the forward-looking statements included in this filing may ultimately prove to be inaccurate—even materially inaccurate.  Because of the significant uncertainties inherent in such forward-looking statements, the inclusion of such information should not be regarded as a representation or warranty by Vida Life International, Ltd. or any other person that our objectives, plans, expectations or projections that are contained in this filing will be achieved in any specified time frame, if ever.
 

-11-

VIDA LIFE INTERNATIONAL, LTD.


General Overview

Vida Life International, Ltd. (“we,” the “Company” or “Vida Life”) was incorporated in the State of Minnesota as Town & Country Home Furnishings, Inc. on June 26, 1969.  In November 1999, we reincorporated in the State of Nevada.  From April 2003 to April 2006, our corporate name was Environmental Impact Corporation.  In April 2006, we changed our name to Vida Life International, Ltd.

The Company was an inactive shell company until May 2006.  In May 2006, we entered into an Agreement and Plan of Merger with ACS Trading Corp., a private corporation incorporated in the State of Delaware (“ACS”), under which we issued 6,300,000 shares of our common stock to acquire all of the outstanding shares of ACS in a direct statutory merger transaction.  ACS was a corporation engaged in the business of trading fishmeal and nutritional supplements that incorporate fish oil as an ingredient.  As a result of the merger transaction, ACS merged with and into Vida Life and we have carried on the business formerly owned and operated by ACS.  Since the merger transaction resulted in the stockholders of ACS acquiring control of Vida Life, for financial statement purposes the merger has been accounted for as an additional capitalization of Vida Life (i.e., a reverse acquisition with ACS as the accounting acquirer).

We have developed a diversified array of innovative technologies and related products for personal health care, plant fertilization and animal nutrition, in addition to energy-efficient technologies and products.  Currently, our operations are divided into four strategic segments:

·  
Fishmeal – we buy and resell fishmeal for use as a high-protein ingredient in animal feed and organic fertilizer.

·  
Health Supplements – we manufacture and sell health supplements that incorporate fish oil and multiple herbs (primarily from South America) as ingredients.

·  
Heating Technology – we are developing energy-efficient products based on a novel patent-pending heating technology.

·  
Fertilizing – we have completed the development of organic fish-based plant fertilizers for commercial sale, and are presently involved in marketing our fertilizing products.

Of the four segments noted above, we presently report segment results from fishmeal and health supplements only.  We have determined that the heating technology and fertilizing segments were not reportable segments due to their insignificance to overall operations.  Our mission is to be a producer of high-quality fishmeal, animal feed, nutritional and natural health supplements and organic fish fertilizers, to be distributed on a worldwide basis.  We also generally intend to develop and commercialize innovative technologies and products that may diversify our products and services.  For example, our “Heating Technology” business is focused on exploiting (through manufacture, distribution and sale of one or more products) a novel heating technology invented in Japan, with respect to which we have obtained worldwide rights for commercialization and applied for a U.S. patent.  We obtained these rights from a sublicense grant made by our Chief Executive Officer, John C. Jordan, who had earlier obtained such rights from a third party.  Presently, we are developing for commercialization a tankless water heater and portable room heater utilizing this technology.
 

 
-12-

 
VIDA LIFE INTERNATIONAL, LTD.


 
Results of Operations

For the Nine Months Ended September 30, 2009 and 2008
Segment Results


 
Nine Months Ended September 30, 2009
 
Fishmeal
   
Health Supplements
   
Corporate & Other
   
Total
 
Net Sales
  $ -     $ 11,431     $ 1,500     $ 12,931  
Gross Profit
  $ -     $ 4,844     $ 500     $ 5,344  
Operating Income (Loss)
  $ -     $ 4,552     $ (290,469 )   $ (285,917 )
Interest Income
  $ -     $ -     $ 52     $ 52  
Interest Expense
  $ -     $ -     $ 93,953     $ 93,953  
Depreciation & Amortization
  $ -     $ 292     $ 2,042     $ 2,334  
Assets
  $ -     $ 2,705     $ 5,921     $ 8,626  

 
Nine Months Ended September 30, 2008
 
Fishmeal
   
Health Supplements
   
Corporate & Other
   
Total
 
Net Sales
  $ 105,765     $ 15,605     $ -     $ 121,370  
Gross Profit
  $ 8,356     $ 9,944     $ -     $ 18,300  
Operating Income (Loss)
  $ 8,356     $ 9,006     $ (329,549 )   $ (312,187 )
Interest Income
  $ -     $ -     $ 3,419     $ 3,419  
Interest Expense
  $ -     $ -     $ 95,191     $ 95,191  
Depreciation & Amortization
  $ -     $ 938     $ 2,755     $ 3,693  
Assets
  $ -     $ 3,898     $ 84,114     $ 88,012  
 
 
Revenues

Revenues for the nine-month period ended September 30, 2009 were $12,931, which compares to $121,370 for the nine-month period ended September 30, 2008, and represents a 89% decrease.

The decrease in total revenues was mainly attributable to a lack of fishmeal sales during the most recent nine-month period as compared to $105,765 of fishmeal sales for the nine-month period ended September 30, 2008.  This decrease primarily resulted from difficulties in procuring fishmeal to fill orders from customers and potential customers.  This difficulty has arisen mainly due to the continued global demand for fishmeal, stagnant production and higher asking prices for available fishmeal.

In addition, our operations in general and our fishmeal operations in particular continue to be negatively impacted by our lack of sufficient financing.  This lack of financing has indefinitely delayed our plans to build or participate in the building of a fishmeal processing facility, and has prohibited us from purchasing fishmeal on the spot market for resale in a manner that has been economically feasible.  For the foreseeable future we expect that, given our continuing lack of a fishmeal manufacturing facility and our inability to consistently procure fishmeal for resale, we will continue to experience difficulties attempting to purchase and sell fishmeal at profitable prices.

Revenues from health supplements were down $4,174 during the nine-month period ended September 30, 2009 in comparison to the nine-month period ended September 30, 2008, totaling $11,431 compared to $15,605, respectively. Presently, we are uncertain about the outlook for supplement sales due primarily to delays encountered by our target customers overseas in obtaining necessary permits for the import of our products into their countries.
 

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VIDA LIFE INTERNATIONAL, LTD.


 
Gross Profit

Our overall gross profit as a percentage of sales increased from approximately 15% for the period ended September 30, 2008 to approximately 41% for the nine-month period ended September 30, 2009.  This increase was attributable to a change in the product mix of our sales in the nine months ended September 30, 2009, with proportionately more revenues generated in the health supplements segment.  The resale of fishmeal is generally a lower-margin business.

Operating Expenses

Operating expenses decreased $39,226 in the nine-month period ended September 30, 2009 from $330,487 in 2008 to $291,261 in 2009.  The primary reason for the decrease was lower research and development expenses, lower legal fees related to patent-related matters and less travel expenses.

As indicated in our Annual Report on Form 10-K for the year ended December 31, 2008, we expect that compensation expense arising from share issuances to our executive management and consultants to compensate them for services rendered during 2009 will increase as compared to 2008 as we strive to conserve our cash resources for other revenue-related and operating expenses anticipated in 2009.  Furthermore, we do not anticipate hiring employees in the near future and expect instead, where necessary or appropriate, to rely on services provided by consultants through at least fiscal 2009.  In this regard, we expect that we may continue to compensate consultants with the issuance of stock.

Gain on Debt Extinguishment

A gain of $64,430 was recorded during the nine months ended September 30, 2008 for debt extinguishment.  No such transaction was completed for the nine months ended September 30, 2009. As a result, net loss increased accordingly for the nine months ended September 30, 2009.

Interest Expense

Interest expense decreased marginally to $93,953 for the nine months ended September 30, 2009 versus $95,191 for the nine-month period ended September 30, 2008.

Net Loss

As a result of the above, our net loss increased for the nine months ended September 30, 2009 to $379,818 as compared to a net loss of $339,529 for the nine months ended September 30, 2008.

For the Three Months Ended September 30, 2009 and 2008
Segment Results


 
Three Months Ended September 30, 2009
 
Fishmeal
   
Health
Supplements
   
Corporate &
Others
   
Total
 
Net Sales
  $ -     $ 5,753     $ -     $ 5,753  
Gross Profit
  $ -     $ 1,140     $ -     $ 1,140  
Operating Income (Loss)
  $ -     $ 1,049     $ (95,961 )   $ (94,912 )
Interest Income
  $ -     $ -     $ -     $ -  
Interest Expense
  $ -     $ -     $ 30,651     $ 30,651  
Depreciation & Amortization
  $ -     $ 91     $ 660     $ 751  
Identifiable Net Assets
  $ -     $ 2,705     $ 5,921     $ 8,626  
                                 
                                 
                                 
 
Three Months Ended September 30, 2008
 
Fishmeal
   
Health Supplements
   
Corporate & Others
   
Total
 
Net Sales
  $ -     $ 3,575     $ -     $ 3,575  
Gross Profit
  $ -     $ 1,977     $ -     $ 1,977  
Operating Income (Loss)
  $ -     $ 3,145     $ (95,552 )   $ (92,407 )
Interest Income
  $ -     $ -     $ 673     $ 673  
Interest Expense
  $ -     $ -     $ 31,441     $ 31,441  
Depreciation & Amortization
  $ -     $ 313     $ 928     $ 1,241  
Identifiable Net Assets
  $ -     $ 3,898     $ 84,114     $ 88,012  

Revenues

Revenues for the three-month period ended September 30, 2009 were $5,753, which compares to $3,575 for the three-month period ended September 30, 2008, and represents a 61% increase. The increase was attributable to the increase in health supplement sales during the most recent three-month period as compared to sales for the three-month period ended September 30, 2008. Presently, we are uncertain about the outlook for supplement sales due primarily to delays encountered by our target customers overseas in obtaining necessary permits for the import of our products into their countries.The increase in health supplement sales was due to some additional orders from foreign customers.

Gross Profit

Our overall gross profit as a percentage of sales decreased from approximately 55% for the period ended September 30, 2008 to approximately 20% for the period ended September 30, 2009.  This decrease was attributable to inventory adjustments in connection with the disposal of out of date products and increased freight costs in the three months ended September 30, 2009.
 

-14-

 
VIDA LIFE INTERNATIONAL, LTD.


 
Operating Expenses

Operating expenses increased $1,668 in the three-month period ended September 30, 2009 from $94,384 in 2008 to $96,052 in 2009.  The primary reason for the slight increase in expenses was the increase in travel expenses.

Gain on Debt Extinguishment

A gain of $64,430 was recorded during the three months ended September 30, 2008 for the debt extinguishment. No such transaction was completed for the three months ended September 30, 2009. As a result, net loss increased accordingly for the three months ended September 30, 2009.

Interest Expense

Interest expense decreased marginally to $30,651 for the three months ended September 30, 2009 versus $31,441 for the three-month period ended September 30, 2008.

Net Loss

As a result of the above, our net loss increased for the three months ended September 30, 2009 to $125,563 as compared to a net loss of $58,745 for the three months ended September 30, 2008.

Liquidity and Capital Resources

Summary cash flow data is as follows:
 
 
Nine Months Ended September 30,
 
 
2009
 
2008
 
         
Cash flows provided (used) by :
       
   Operating activities
  $ (50,843 )   $ (193,679 )
   Investing activities
    (1,048 )     (1,075 )
   Financing activities
    19,000       -  
Net decrease in cash
    (32,891 )     (194,754 )
Cash, beginning of period
    32,891       271,082  
Cash, end of period
  $ -     $ 76,328  
 
The Company used $50,843 of cash from operating activities in the nine months ended September 30, 2009.  Cash used for operations included a net loss of $379,818 which included $64,287 of non-cash expenses for depreciation and amortization of debt discount. Changes in operating assets and liabilities affecting cash primarily included increases in accounts payable of $26,615, increase in accrued expenses and director's fees of $36,349 and accrued officer’s compensation of $183,661.  
 
The Company used $193,679 of cash from operating activities in the nine months ended September 30, 2008.  Cash used for operations primarily included loss of $339,529, which included $4,454 of non-cash expenses for depreciation, amortization of debt discount offset by a gain on debt extinguishment.  Changes in operating assets and liabilities affecting cash primarily included decreases in accounts receivable of $6,938 and decreases in accrued expenses of $17,793, and increases in officer’s compensation of $151,636.

On June 5, 2009 and August 20, 2009, the Company’s majority stockholder loaned $10,000 at each date to the Company to fund working capital requirements. On August 3, 2009 and August 24, 2009, repayments of $500 each were made against the balance.  The balance of $19,000 remains outstanding as of September 30, 2009.  This loan has an interest rate of 17%, with principal and interest due on demand. It is the Company’s intent to pay this balance off by June 30, 2010, if possible.

As of September 30, 2009, the Company had $-0- cash on hand and current liabilities of $892,402.  In comparison, as of December 31, 2008, we had $32,891 in cash and cash equivalents and current liabilities of $268,079.  As of the date of this filing, our management believes we are in critical need of additional capital.  Our current forecast for financing needs includes $350,000 for a fertilizer product line and $3,000,000 for a fishmeal plant project. At a minimum, we expect to require at least $10,000 to maintain essential operations through the calendar year. Nevertheless, we note that our current forecasts of capital requirements are largely based on our limited prior experience and budgets proposed by our professional service providers and consultants. Additionally, if our actual expenses significantly exceed our present expectations we will likely require additional financing beyond that described above.
 

-15-

VIDA LIFE INTERNATIONAL, LTD.


 
Even though we are actively seeking financing opportunities, we cannot be certain that any required additional financing will be available on terms favorable or acceptable to us, if at all.  This is especially true in light of the current poor state of the U.S. capital markets and the general economic downturn that has occurred.  Presently, we anticipate that additional financing could be sought from a number of sources, including but not limited to additional sales of equity or debt securities, or loans from non-traditional financial institutions or affiliates of the Company.

If additional funds are raised by the issuance of our equity securities, such as through the issuance of stock, convertible securities, or the issuance and exercise of warrants, then the ownership interest of our existing shareholders will be (or could be, in the case of warrants) diluted.  If additional funds are raised by the issuance of debt or preferred equity instruments, we may become subject to certain operational limitations, and such securities would have rights senior to the rights of our common shareholders.  If adequate funds are not available on acceptable terms, we may be unable to expand, develop or enhance products or to respond to competitive pressures, or we may be required to abandon our business or our status as a public reporting company.

Our primary non-cash assets at September 30, 2009 was intellectual-property rights, consisting of proprietary product formulations, trade secrets, patents pending and trademarks, which together form the foundation for our health supplement product offerings.

Going Concern

For the nine months ended September 30, 2009, we incurred a net operating loss and negative cash flows from operations.  As of September 30, 2009, we had an accumulated deficit of $1,642,522.  These factors, among others, raise substantial doubt about our ability to continue as a going concern.  In addition, our independent registered public accounting firm included an explanatory paragraph in its report on our audited financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2008, stating that they believe substantial doubt exist as it pertains to the Company's ability to continue as a going concern. Our financial statements included in this filing do not include any adjustments related to recoverability and classification of asset carrying amounts, or the amount and classification of liabilities that might result, should we be unable to continue as a going concern.  Our ability to continue as a going concern ultimately depends on achieving profitability, producing revenues or raising additional capital to sustain operations.  Although we intend to obtain additional financing to meet our cash needs and to support the revenue-generating process, we may be unable to secure any additional financing on terms that are favorable or acceptable to us, if at all.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements, nor are we a party to any contract or other obligation not included on its balance sheet that has, or is reasonably likely to have, a current or future effect on our financial condition.

Critical Accounting Policies

For detailed information on our critical accounting policies and estimates, please see our financial statements and notes thereto included in this report and in our Annual Report on Form 10-K for the year ended December 31, 2008 that was filed with the SEC on April 1, 2009.  There have been no material changes to our critical accounting policies and estimates from those disclosed in our report Form 10-K.

Recent Accounting Developments
 
In June 2009, the FASB issued guidance effective for fiscal years beginning after November 15, 2009 to eliminate the quantitative approach previously required for determining the primary beneficiary of a variable interest entity and requires ongoing qualitative reassessments of whether an enterprise is the primary beneficiary of a variable interest entity. The Company does not expect the adoption of this standard to have any current impact on the Company's financial statements.
 

-16-

 
VIDA LIFE INTERNATIONAL, LTD.


 
Item 3.   Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

 
Item 4T.  Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in our reports filed pursuant to the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer/Principal Financial Officer as appropriate, to allow timely decisions regarding required disclosures.  A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

As of September 30, 2009, our Chief Executive Officer/Principal Financial Officer carried out an evaluation of the effectiveness of our disclosure controls and procedures as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934 (the “Exchange Act”).  Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of September 30, 2009 in reporting on a timely basis information required to be disclosed by us in the reports we file or submit under the Exchange Act because of those material weaknesses relating to internal controls that are described in Item 9A(T) of the Company’s Form 10-K for the year ended December 31, 2008.

Notwithstanding the material weaknesses that existed as of September 30, 2009, our Chief Executive Officer/Principal Financial Officer have concluded that the financial statements included in this report present fairly, in all material respects, the financial position, results of operations and cash flows of the Company in conformity with accounting principles generally accepted in the United States of America.

Changes in Internal Controls

During the fiscal quarter ended September 30, 2009, there were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.  Management has concluded that the material weaknesses in internal control, as described in Item 9A(T) of our Form 10-K for the year ended December 31, 2008, have not been fully remediated. Due to our lack of sufficient capital we expect these material weaknesses to continue until our capital needs are met.

-17-

 
VIDA LIFE INTERNATIONAL, LTD.


 
 
PART II – OTHER INFORMATION

Item 1.  Legal Proceedings.

None.

Item 1A.  Risk Factors.

There have been no material changes to our risk factors and uncertainties during or since the period covered by this report.  For a discussion of risk factors applicable to Vida Life International, Ltd. and its business, please refer to the “Risk Factors” section of our report Form 10-K filed with the SEC on April 1, 2009.

 
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

On May 20, 2009, the Company issued 100,000 shares of common stock to a consultant for services rendered.  The shares were valued at $0.07 per share, or $7,000 in the aggregate.  Neither the offer nor sale of these shares was registered under the Securities Act of 1933.  The shares were issued under the exemption from registration contained under Section 4(2) of the Securities Act of 1933 on the basis that there was only one recipient of the shares.  The Company paid no commissions or fees relating to the offer and sale of the shares.

 
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.

Exhibit No.
 
Description
31.1
 
Certification of Chief Executive Officer
31.2
 
Certification of Principal Financial Officer
32
 
Certification of Chief Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002




In accordance with the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
  Vida Life International, Ltd.  
       
Date: November 10, 2009
By:
/s/ John C. Jordan  
    John C. Jordan  
    Chief Executive Officer and Principal Financial Officer  
       
 
-18-

 

INDEX TO EXHIBITS FILED WITH THIS REPORT

Exhibit No.
 
Description
31.1
 
Certification of Chief Executive Officer
31.2
 
Certification of Principal Financial Officer
32
 
Certification of Chief Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


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