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EX-32 - CERTIFICATION - Global Vision Holdings, Inc.versant_10q-ex32.htm
EX-31 - CERTIFICATION - Global Vision Holdings, Inc.versant_10q-ex31.htm

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

 

(Mark One)

 

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934.

 

For the quarterly period ended September 30, 2012.

 

or

 

[_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT.

 

For the transition period from __________ to __________

 

 

Commission file number: 000-54050

 

 

VERSANT INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter) 

 

Nevada 27-2553082
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)

  

19200 Von Karman, 6th Floor, Irvine, CA 92612

(Address of Principal Executive Office) (Zip Code) 

 

(949) 281-6438

(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 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.

 

[X] Yes [_] No

 

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 (Section 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).

 

[X] Yes [_] No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

 

Large accelerated filer  [_] Accelerated filer  [_]
Non-accelerated filer  [_] 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     [X]  No

 

As of November 8, 2012, 100,492,855 shares of the registrant's common stock, $.001 par value, were outstanding.

 

 
 

 

 

TABLE OF CONTENTS

 

   
Part I. FINANCIAL INFORMATION  
   
Item 1.   Financial Statements    
   
               Balance Sheet as of September 30, 2012 and December 31, 2011 3
   
               Statements of Operations for the Three and Nine Months Ended September 30, 2012 and 2011 4
   
               Statements of Cash Flows for the Three and Nine Months Ended September 30, 2012 and 2011 5
   
              Notes to Condensed Consolidated Financial Statements 6
   
Item 2.   Management's Discussion and Analysis of Financial Condition and Results of Operations 11
   
Item 4.  Controls and Procedures 13
   
Part II.  Other 13
   
Item 1.   Legal 13
   
Item 2.   Recent Sales of Unregistered Securities 13
   
Item 3.   Defaults Upon Senior Securities 14
   
Item 4.   Submission of Matter to a Vote of Security Holders 14
   
Item 6.   Exhibits 14
   
Signatures 15

 

 

2
 

 

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

 

VERSANT INTERNATIONAL, INC.
(Formerly Shang Hide Consultants, Ltd.)
CONSOLIDATED BALANCE SHEETS

 

 

ASSETS 
           
   September 30, 2012   December 31, 2011 
   (unaudited)      
Current Assets          
Cash and cash equivalents  $43,116   $15,000 
Accounts receivable   959     
Inventory   5,307     
Prepaid expenses   38,891     
           
Total current assets   88,273    15,000 
           
Other Assets          
Goodwill   86,985     
           
           
Total assets  $175,258   $15,000 
           
LIABILITIES AND STOCKHOLDERS' EQUITY / (DEFICIT)          
           
Current Liabilities          
Advance from shareholder       20,000 
Accounts payable   28,217    17,097 
           
           
Total liabilities   28,217    37,097 
           
           
Commitments and Contingencies           
           
Stockholders' Equity/ (Deficit)          
Preferred stock: 25,000,000 shares authorized, $0.001 par value  none issued and outstanding            
Class A Common stock, $.001 par value, 200,000,000 shares authorized and 70,000,000 and 50,000,000 shares issued and outstanding at September 30, 2012 and December 31, 2011, respectively     70,000       50,000  
Class B Common stock, $.001 par value, 675,000,000 shares authorized 71,492,855 and 15,000,000 shares issued and outstanding at September 30, 2012 and December 31, 2011, respectively     71,493       15,000  
Additional paid in capital   3,509,420    470,027 
Accumulated deficit   (3,503,872)   (557,124)
           
           
Total stockholders' equity / (deficit)   147,041    (22,097)
           
Total liabilities and stockholders' equity / (deficit)  $175,258   $15,000 

 

 

The accompanying notes are an integral part of these financial statements

 

3
 

 

VERSANT INTERNATIONAL, INC.
(Formerly Shang Hide Consultants, Ltd.)
CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

   For the Three Months Ended   For the Nine Months Ended 
   September 30,   September 30,   September 30,   September 30, 
   2012   2011   2012   2011 
   (unaudited)   (unaudited)   (unaudited)   (unaudited) 
Revenue                    
                     
Net sales  $3,804   $    8,983   $ 
Cost of goods sold   2,912        7,046     
                     
Gross margin   892        1,937     
                     
Expenses                    
Compensation   47,419        2,678,928     
Sales and marketing   6,652        12,583     
Professional fees   35,470        193,201     
Other general and administrative   27,279    1,828    63,973    8,055 
                     
Total operating expenses   116,820    1,828    2,948,685    8,055 
                     
Loss from operations   (115,928)   (1,828)   (2,946,748)   (8,055)
                     
Net loss  $(115,928)  $(1,828)  $(2,946,748)  $(8,055)
                     
Net loss per share - basic and diluted  $(0.00)  $(0.00)  $(0.03)  $(0.00)
                     
Weighted average shares outstanding   141,042,772    15,000,000    116,646,165    15,000,000 

 

 

The accompanying notes are an integral part of these financial statements

 

4
 

 

VERSANT INTERNATIONAL, INC.
(Formerly Shang Hide Consultants, Ltd.)
CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

   For the Nine Months Ended 
   September 30,   September 30, 
   2012   2011 
   (unaudited)   (unaudited) 
Cash Flows from Operating Activities          
           
Net loss  $(2,946,748)  $(8,055)
           
Adjustments to reconcile net income to net cash provided by operating activities:                
           
Stock based compensation   2,636,197      
Increase in accounts receivable   (959)    
Increase in prepaid expenses   (1,391)    
Increase in accounts payable   15,652    3,225 
Decrease in inventories   7,944     
           
Net cash used in operating activities   (289,305)   (4,830)
           
           
Cash Flows from Investing Activities          
Cash received in subsidiary acquisition   7,821     
           
           
Cash Flows from Financing Activities          
Proceeds from issuances of common stock   309,600     
           
Net cash provided by financing activities   309,600     
           
Net decrease in cash and cash equivalents   28,116    (4,830)
           
Cash and cash equivalents at beginning of the period   15,000    7,650 
           
Cash and cash equivalents at end of the period  $43,116   $2,820 

 

 

Supplementary Disclosures of Cash Flow Information              

               

The Company did not pay any interest or taxes for the nine months ended September 30, 2012 and 2011, respectively.    

               

Non-Cash Investing and Financing Activities              

During the nine months ended September 30, 2012 the Company issued 10,000,000 shares of Class B common stock, valued at  $100,000, to acquire the identifiable assets including goodwill along with the assumed liabilities of its wholly-owned subsidiary Mamma's Best, LLC.    

 

The accompanying notes are an integral part of these financial statements

5
 

 

VERSANT INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

 

The unaudited condensed consolidated financial statements included herein were prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosure normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, disclosures made are adequate to make the information not misleading.

 

In the opinion of management, the interim data includes all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the results for the interim period. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the fiscal year.

 

Note 1 – Organization

 

Versant International, Inc. (Company) was organized under the laws of the State of Nevada in May 2010.  The Company was organized as a vehicle to investigate and, if such investigation warrants, acquire companies or businesses seeking the perceived advantages of being a publicly held corporation. One of our principal business objectives for the next 12 months and beyond will be to achieve long-term growth potential through acquisitions or combinations with other businesses.

 

In addition to the parent Company, Versant International, Inc. operates three wholly-owned subsidiaries; Mamma’s Best LLC (“MB”), Strategic Management Consultants (“SMC”), and Grocers Direct (“GD”).

 

Through Mamma’s Best, LLC we produce and sell food products. Our products are available at well-known organic and natural food retail outlets primarily in the Los Angeles and Orange County locales. To date, our food products consist of a total of four barbeque sauces and marinades.

 

Strategic Management Consultants provides skilled advice for businesses to streamline and make more efficient management and organizational decisions. SMC formulates business strategies and improved operational performance by assessing the organization's current systems and processes; evaluating and recommending appropriate solutions; and ensuring success by mitigating potential risk. SMC provides the necessary resources, at all levels, to implement these new strategies and initiatives from sales and marketing, leadership, strategic partnerships, public relations, branding, financial forecasting and accounting.

 

Grocers Direct provides consulting and representation services for emerging natural food brands in the retail market place.

 

Prior to the acquisition of Mamma’s Best we were considered to be in the development stage as defined by United States generally accepted accounting principles.

 

Note 2 – Summary of Significant Accounting Policies

 

Use of Estimates

 

Management makes estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting periods.  Actual results could vary from these estimates.

 

Principles of Consolidation

 

Our consolidated financial statements consist of our legal parent, Versant International, Inc. and our wholly-owned subsidiaries, Mamma’s Best, LLC, Strategic Management Consultants, and Grocers Direct. All inter-company balances and transactions have been eliminated upon consolidation.

6
 

 

Cash and Cash Equivalents

 

We maintain our cash at federally insured financial institutions.  Cash equivalents with maturity dates less than 90 days from the date of origination are considered to be cash equivalents for all financial reporting purposes.  We currently have no cash equivalents.

 

Fair Value

 

Cash and other current assets and liabilities are carried at cost which approximates their fair value in accordance with the fair value hierarchy as established by US GAAP.

 

Receivables

 

Accounts receivable consist of amounts due from our distributors. Accounts receivable are current in nature and we have not experienced any material collection issues. Our reserve for bad debt is based on factors including current sales amounts, historical charge-offs and specific accounts identified as high risk. Uncollectible accounts receivable are charged against the allowance for doubtful accounts when reasonable efforts to collect the amounts due have been exhausted.

 

Inventories

 

Inventories are stated at the lower of cost or market using the first-in first-out (“FIFO”) method. Inventory is produced, bottled, and packed for shipment by a third party manufacturer. We are not required to and have not entered into any firm purchase commitments with our manufacturer and we order inventory on a “just-in-time” basis.

 

Revenue Recognition

 

We recognize revenues upon delivery of goods to a customer. This is generally the point at which title and risk of loss is transferred, and when payment has either been received or collection is reasonably assured. Revenues are recorded net of applicable incentives and promotions and include all shipping and handling costs passed to customers.

 

We recognize an allowance for sales returns based upon estimated and known returns. Product returns are recorded as a reduction of net revenues and as a reduction of the accounts receivable balance. When all revenues are collected within the same period, resulting in no outstanding receivables at the balance sheet date, the allowance is reclassified to current liabilities. Since inception, we have had an immaterial amount of our products returned.

 

Cost of Goods Sold

 

Our cost of goods sold includes all production and handling costs to produce our products. We have not incurred material shipping and handling costs to date.

 

Selling, General, and Administrative Expenses

 

MarketingWe promote our products with trade promotions and other product demonstrations. These programs include in-store display incentives and volume-based incentives. We expense advertising costs either in the period the advertising first takes place or as incurred. Consumer incentive and trade promotion activities are recorded as a reduction to revenues. All marketing costs are recorded as an expense in the year incurred.

 

Goodwill

 

We test goodwill for impairment at least annually. We assess goodwill impairment risk by first performing a qualitative review of entity-specific, industry, market and general economic factors. If significant potential goodwill impairment risk exists, we apply a two-step quantitative test. The first step compares the estimated fair value with its carrying value. If the carrying value exceeds its fair value, the second step is applied to measure the difference between the carrying value and implied fair value of goodwill. If the carrying value of goodwill exceeds its implied fair value, the goodwill is considered impaired and reduced to its implied fair value.

 

Recent Accounting Pronouncements

 

There are no recently issued accounting pronouncements that the Company expects to have a material impact on the financial position, results of operations, or cash flows.

 

7
 

Note 3 – Inventory

 

Our inventory is stated at the lower of cost or market using the FIFO method. We have entered into third party production agreements on an as needed basis, correspondingly, there are no purchase commitments related to inventory. As of September 30, 2012 and December 31, 2011 we had finished goods inventory valued at $5,307 and $13,251 (pre-acquisition inventory held by our wholly-owned subsidiary Mamma’s Best LLC), respectively. Periodic reviews for obsolescence are performed and applicable reserves are recognized. We have not recognized any reserves for obsolete inventory through the period covered by this report.

 

Note 4 – Stock Issuances

 

On March 12, 2012 we issued 10,000,000 shares of Class B common stock valued at $100,000 in exchange for 100% of the 40,000,000 outstanding ownership units of Mamma’s Best, LLC. For additional detail related to this stock issuance see Note 5 – Business Acquisition.

 

On March 27, 2012 we issued an aggregate of 20,000,000 shares of Class A common stock and 40,000,000 shares of Class B common stock to Glen W. Carnes (Chairman and Chief Executive Officer) and Michael D. Young (President and Chief Operating Officer) with each receiving 10,000,000 shares of Class A common stock and 20,000,000 shares of Class B common stock for related party compensation of $2,569,697.

 

During March 2012 we issued an aggregate of 2,475,000 shares of Class B common stock for total cash consideration of $79,500.

 

On April, 5 2012 we issued 50,000 shares of Class B common stock for prior services received valued at $3,500.

 

On April 26, 2012 we issued 500,000 shares of Class B common stock in exchange for consulting services for a term of twenty months for total consideration of $50,000. As of September 30, 2012 we had a remaining pre-paid expense related to this issuance of $37,500.

 

On June 20, 2012 we issued 1,000,000 shares of Class B common stock to the founders and employees of our wholly-owned subsidiary, Mamma’s Best, for total compensation consideration of $54,000. In addition, during the three months ended September 30, 2012, the founders and employees of Mamma’s Best agreed to forgive $24,175 of previously accrued payables. We determined the forgiveness was in the nature of a capital contribution, correspondingly we did not recognize any gain or loss in the periods presented.

 

During the quarter ended June 30, 2012 we issued an aggregate of 1,645,000 shares of Class B common stock for total cash consideration of $88,500.

 

During the quarter ended September 30, 2012 we issued an aggregate of 822,855 shares of Class B common stock for total cash consideration of $141,600 at per share prices ranging from $0.10 to $0.60. In addition, we received additional capital contributions of $4,914 related to the acquisitions of Grocers Direct and Strategic Management Consultants.

 

Note 5 – Business Acquisition

 

On March 12, 2012 we acquired 100% of the 40,000,000 outstanding ownership units of Mamma’s Best, LLC in exchange for 10,000,000 shares of Class B common stock. We accounted for the transaction as a business combination by applying the acquisition method in which the fair value of the consideration given, $100,000, was allocated to the identifiable assets acquired of $16,158; the liabilities assumed of $3,143; and the goodwill acquired of $86,985. Subsequent to the completion of the acquisition, Mamma’s Best LLC became a wholly-owned operating subsidiary of Versant International, Inc.

 

Since the fair value of the consideration given exceeded the fair value of the identifiable assets acquired and liabilities assumed, we recognized goodwill in accordance with ASC 805-30-30-1. Correspondingly, we performed a preliminary impairment analysis of the goodwill acquired in accordance with the applicable US GAAP and our corresponding accounting policies. Based on the results of Step 1 of our impairment test we determined the fair value of the acquired reporting unit (Mamma’s Best) inclusive of goodwill exceeds its carrying amount, thus no impairment was recognized.

 

Subsequent to the issuance of the Class B common stock related to the acquisition of Mamma’s Best, our officers and affiliates maintained the controlling interest in our consolidated Company.

 

Prior to the acquisition of Mamma’s Best, LLC we were considered and exploration stage shell company as defined by US GAAP and the applicable Securities and Exchange Commission Rules and Regulations, therefore, we are providing the following unaudited pro forma statement of operations for the three and nine months ended September 30, 2011 for informational purposes.

8
 

 

MAMMA’S BEST, LLC – PRO FORMA STATEMENT OF OPERATIONS (Unaudited)  

 

      
  

For the
Three Months Ended

 
   September 30, 2011 
      
Net Sales  $8,911 
Cost of goods sold   6,788 
      
Gross Margin   2,123 
      
Operating Expenses:     
Sales and marketing   3,959 
Other general and administrative   2,798 
      
Total operating expenses   6,757 
      
Loss from operations / Net loss  $(4,634)

 

 

 

   For the Nine Months Ended 
   September 30, 2011 
      
Net Sales  $17,609 
Cost of goods sold   13,414 
      
Gross Margin   4,195 
      
Operating Expenses:     
Sales and marketing   10,944 
Other general and administrative   5,784 
      
Total operating expenses   16,728 
      
Loss from operations / Net loss  $(12,533)

 

For additional information related to the acquisition, including the prior two years of audited financial statements for Mamma’s Best, LLC and pro-forma financial statements as of and for the year ended December 31, 2011, see our Current Reports on Form 8-K and 8-K/A as filed on March 16, 2012 and April 26, 2012, respectively.

 

 

Note 6 – Related Party Transactions

 

During the nine months ended September 30, 2012 our officers and key employees provided operating advances totaling $51,321. As of September 30, 2012 we settled all of our related party payables including the outstanding balance at December 31, 2011 of $20,000. Of these advances we repaid $47,146 in cash and $24,175 of obligations were forgiven.

 

See Note 4 for a discussion of the stock based compensation issued to our officers and employees.

 

Note 7 – Concentrations

 

Customers

 

During the nine months ended September 30, 2012 three customers accounted for 100% of our revenue.

 

9
 

 

Vendor

 

Our product line is produced, bottled, and packaged by one vendor. The Company has alternatives for these services, and no firm purchase commitments have been entered into with this vendor.

 

 

Note 8 – Operating Lease

 

During March 2012 we entered into an operating lease for our corporate office. The lease commences on April 2, 2012 and expires on September 30, 2013. The lease calls for monthly payments of $1,391.

 

In September 2012 we expanded our office space which increased our monthly lease payments by $544 to $1,935. The expansion of our office space did not impact the initial term of the lease.

 

 

Note 9 – Subsequent Events

 

On October 30, 2012, we entered into a Separation Agreement and General Release (the “Separation Agreement”) with Mr. Michael D. Young, our prior President, Chief Operating Officer, Director and Principal Accounting Officer. Pursuant to the Separation Agreement, Mr. Young agreed to forfeit and return to the Company a total of Thirty-Five Million (35,000,000) restricted shares of Class A common stock and Six Million (6,000,000) restricted shares of Class B common stock, which were previously issued to Mr. Young and fully vested.

 

10
 

 

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

 

This Quarterly Report on Form 10-Q contains certain statements that are not historical facts, including, most importantly, information concerning possible or assumed future results of operations of Versant International, Inc. (the "Company") and statements preceded by, followed by or that include the words "may," "believes," "expects," "anticipates," or the negation thereof, or similar expressions, which constitute "forward-looking statements" within the meaning of the Section 27A of the Securities Act of 1933 and Section 21E (the "Reform Act")of the Securities Exchange Act of 1934 (the "Exchange Act"). For those statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Reform Act. These forward-looking statements are based on the Company's current expectations and are susceptible to a number of risks, uncertainties and other factors.

 

The Company will not undertake and specifically declines any obligation to publicly release the result of any revisions, which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. In addition, it is the Company's policy generally not to make any specific projections as to future earnings, and the Company does not endorse any projections regarding future performance that may be made by third parties.

 

The following discussion and analysis provides information which the Company's management believes to be relevant to an assessment and understanding of the Company's results of operations and financial condition. This discussion should be read together with the Company's financial statements and the notes to financial statements, which are included in this report, as well as the Company's Form 10-K for the period ended December 31, 2011.

 

Business Overview & Plan of Operations

 

Prior to our acquisition of Mamma’s Best, LLC on March 12, 2012, we were considered, under SEC Rule 12b-2 of the Exchange Act, a “shell company,” because we had nominal assets consisting of cash and no or nominal operations.

 

We continue to investigate and, if such investigation warrants, seek to acquire additional companies or businesses seeking the perceived advantages of being a publicly held corporation which may or may not be in the same industry as our wholly-owned subsidiary, Mamma’s Best, LLC. Our on-going principal business objective for the next 12 months and beyond will be to achieve long-term growth potential through additional business combinations and the operation and growth of Mamma’s Best, Grocers, and Strategic Management Consultants, rather than immediate, short-term earnings.

 

The analysis of new business opportunities will be undertaken by or under the supervision of Glen W. Carnes, our Chief Executive Officer and Chairman. Mr. Carnes possesses significant investment banking and acquisition experience to enhance our ability to identify acquisition targets. Mr. Carnes has over 10 years of experience and involvement with these types of transactions across a wide array of industries. Correspondingly, we believe the contacts obtained along with the experience in analyzing and accounting for these types of transactions is significantly beneficial in identifying potential acquisition targets.   

 

Through our wholly-owned subsidiary, Mamma’s Best, LLC we sell unique, all natural food products based on family recipes of the subsidiaries’ founders. Through the date of this report all of our sales were from a total of four sauces and marinades available at approximately 140 natural and organic food outlets in Southern California.

 

We are currently in the process of expanding our food line to include additional sauces and marinades, jams, soups, and salad dressings. We are also seeking to expand our geographical presence throughout the Western United States as well as increase the number of retailers carrying our products.

 

Additionally, our Grocers Direct and Strategic Management Consultants subsidiaries provide marketing, merchandising, and other brand awareness services to small to mid-sized companies in the all-natural wholesale food industry and beyond.

 

We presently have four employees that consist of our sole officer, Glen W. Carnes, two of the founders of Mamma’s Best, and one employee primarily providing services via our Grocers Direct subsidiary.

11
 

 

Results of Operations

 

Our analysis of the results of operations for the nine months ended September 30, 2012 include comparisons with the results of operations of Mamma’s Best for the corresponding period in 2011 as contained in Note 5 to our consolidated interim financial statements. Prior to the acquisition, for the nine months ended September 30, 2011, Versant International incurred approximately $8,000 in total general and administrative expenses of which all related to maintaining the Company’s ’34 Act filing requirements with the Securities and Exchange Commission (“SEC”).

 

For the nine months ended September 30, 2012 our revenues from sauce and marinade sales decreased by $8,626 to $8,983. The decrease was primarily due to the Company changing brokers and re-focusing its efforts to a longer-term strategy by introducing the current products into new markets with the assistance of additional outside food brokers. For the three months ended September 30, 2012 we increased our sales from the quarter ended June 30, 2012 as a result of resource re-focus and the addition of our food brokerage subsidiary, Grocer’s Direct.

 

We have continued, and significantly progressed, our on-going negotiations with our current and new retail outlets to expand our market reach within Southern California as well as expand our geographic offerings throughout California and beyond. While our management believes we will be successful in these endeavors, we do not have any firm commitments as of the date of this report and there is no guarantee we will achieve our expected market successes. In addition, we have substantially completed the development of six new all natural jams and six uniquely flavored soup offerings which are expected to roll-out by mid-2013.

 

Historically, we have seen a relative even mix of sales amongst our four current product offerings. We anticipate our sales to increase as we intend to devote additional time resources developing broker relationships; expand our product offerings; increase our geographical reach; and implement new promotional programs.

 

Our cost of goods sold decreased to approximately $7,000 in-line with the decreased revenue during the period ended September 30, 2012. Our gross margin and cost of goods sold, as a percentage of revenue, remained relatively flat as compared to the nine months ended September 30, 2011 since we did not increase our product price nor did our production vendor. We expect to maintain our current sales margins and we closely monitor the costs of our underlying ingredients. As our product lines increase our exposure to rapid price changes in raw materials such as fruits will also increase. We believe our relationship with our production vendor is good which provides us timely information to making corresponding price adjustments to our finished goods.

 

During the three and nine months ended September 30, 2012 we increased our sales and marketing expenditures by $2,693 and $1,639, respectively, from the comparable prior periods. These increases are the result of our increased focus on expanding the number of stores and geographical reach of our current product offerings through our wholly-owned subsidiary, Mamma’s Best.

 

During 2012 and beyond we expect our sales and marketing expenses to increase as we roll out new products and attempt to further extend our geographical reach.

 

Our officer compensation (primarily stock based) of $2,678,928; professional fees of $193,201; and other general and administrative expenses of $63,973 all increased significantly during the nine months ended September 30, 2012. Most of the increases were non-recurring items related to due diligence and increased SEC filings for the acquisition of Mamma’s Best which was completed on March 12, 2012. We expect these items to decrease throughout the remainder of 2012 unless we require additional non-recurring ’34 Act filings, acquire another operating business, or exceed our current growth expectations for Mamma’s Best.

 

Liquidity and Capital Resources

 

Our current working capital and liquidity needs are provided by the operations of Mamma’s Best; working capital advances from our officers; and private placements of our common stock. We have historically been able to meet our obligations from liquidity provided by our operations enhanced by advances from our officers. Our current obligations primarily consist of amounts due to our professional service providers related to the acquisition of Mamma’s Best.

 

Since we generally purchase inventory on a just in time basis we believe that cash provided by operations will be sufficient to meet our recurring obligations. Additionally, our officers have agreed to defer payment or forgive their outstanding obligations until such time as the Company obtains the appropriate level of operating resources or may accept equity settlements in the future.

 

Additionally, through our Grocer’s Direct subsidiary, we have been successful at increasing our Mamma’s Best market presence with our current offerings. Grocer’s Direct, which provides representation, merchandising, marketing, and other brand awareness services to all natural food offerings; is expected to increase our gross revenues and operating cash-flows. In addition to the benefits achieved by Mamma’s Best, Grocer’s Direct has entered into contracts with other all-natural food products to provide similar services. These services are provided for a monthly fee and /or a percentage of the gross sales of the products represented.

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We also intend to develop the client base of our wholly-owned subsidiary, Strategic Management Consultants which provides skilled advice for businesses to streamline and make more efficient management and organizational decisions. Working with senior management teams, SMC formulates business strategies and improved operational performance by assessing the organization's current systems and processes. Evaluating and recommending appropriate solutions, and ensuring success by mitigating potential risk. SMC is able to provide the necessary resources, at all levels, to implement these new strategies and initiatives from sales and marketing, leadership, strategic partnerships, public relations, branding, financial forecasting and accounting to name a few. We are currently unable to predict or estimate future revenues for Strategic Management Consultants, if any.

 

We do not believe our current business activities will require significant additional capital asset investment.

 

In order to execute our Mamma’s Best, and other subsidiary, growth strategy and acquire other businesses we will need to raise additional capital. We intend to raise funds via private placements of our common stock, however, there are no firm future funding commitments by stockholders, management, or other third party investors.

 

We believe that our current resources are sufficient to meet our on-going operations, at their current levels, for at least the next twelve months. Since we cannot accurately predict the timing of a new food product launch or when we will acquire additional businesses, if any, we are currently unable to estimate our liquidity needs beyond the next twelve months.

 

Off-Balance Sheet Arrangements

 

None.

 

Item 4. Controls and Procedures

 

We maintain "disclosure controls and procedures," as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed by us in reports we file or submit under the Exchange Act 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 principal executive officer to allow timely decisions regarding required disclosure.

 

Evaluation of disclosure and controls and procedures.

 

As of September 30, 2012, the Company carried out an evaluation, under the supervision and with the participation of our Principal Executive and Financial Officer of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on the evaluation, the Company's Principal Executive and Financial Officer have concluded that the Company's disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and are not operating in an effective manner.

 

Changes in internal controls over financial reporting.

 

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during our most recent quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

 

PART II. OTHER INFORMATION

 

Item 1. Legal Proceedings

 

We are unaware of any existing or pending legal proceedings or claims against the Company.

 

Item 2. Recent Sales of Unregistered Securities

 

The following is a discussion of our previously undisclosed recent sales of unregistered securities for the nine months ended September 30, 2012:

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On April, 5 2012 we issued 50,000 shares of Class B common stock for prior services received valued at $3,500.

 

On April 26, 2012 we issued 500,000 shares of Class B common stock in exchange for consulting services for a term of twenty months for total consideration of $50,000. As of September 30, 2012 we had a remaining pre-paid expense related to this issuance of $45,000.

 

On June 20, 2012 we issued 1,000,000 shares of Class B common stock to the founders and employees of our wholly-owned subsidiary, Mamma’s Best, for total compensation consideration of $54,000.

 

During the quarter ended June 30, 2012 we issued an aggregate of 1,645,000 shares of Class B common stock for total cash consideration of $88,500.

 

During the quarter ended September 30, 2012 we issued an aggregate of 822,855 shares of Class B common stock for total cash consideration of $141,600 at per share prices ranging from $0.10 to $0.60. In addition, we received additional capital contributions of $4,914 related to the acquisitions of Grocers Direct and Strategic Management Consultants.

 

These securities were issued pursuant to an exemption from registration relying on Regulation D of the Securities Act of 1933.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Submission of Matter to a Vote of Security Holders

 

None.

 

Item 5. Other Information

 

None.

 

Item 6. Exhibits

 

  31 Section 302 Certification of Principal Executive and Financial Officer
   
  32 Section 906 Certification of Principal Executive and Financial Officer

 

101.INS XBRL Instance Document
101.SCH XBRL Schema Document
101.CAL XBRL Calculation Linkbase Document
101.DEF XBRL Definition Linkbase Document
101.LAB XBRL Label Linkbase Document
101.PRE XBRL Presentation Linkbase Document

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

Date: November 19, 2012

 

 

  VERSANT INTERNATIONAL, INC.
   
   
  By: /s/ Glen W. Carnes
  Glen W. Carnes, Chairman and
  Principal Executive and Accounting Officer

 

 

 

 

 

 

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