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| MYRA.PK > SEC Filings for MYRA.PK > Form 10-K on 2-Jul-2009 | All Recent SEC Filings |
2-Jul-2009
Annual Report
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
This discussion contains forward-looking information that involves risks and uncertainties. Our actual results could differ materially from those anticipated by this forward-looking information. This discussion should be read in conjunction with our financial statements and the related notes thereto set forth elsewhere in this registration statement. All statements other than statements of historical fact should be considered "forward-looking statements" for purposes of these provisions, including statements that include projections of, or expectations about, earnings, revenues or other financial items, statements about our plans and objectives for future operations, statements concerning proposed new products or services, statements regarding future economic conditions or performance, statements concerning our expectations regarding the attraction and retention of members and guests, statements about market risk and statements underlying any of the foregoing. In some cases, forward-looking statements can be identified by the use of terminology such as "may," "will," "expects," "plans," "anticipates," "intends," "believes," "estimates," "potential" or "continue," or the negative thereof or other similar words. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we can give no assurance that such expectations or any of our forward-looking statements will prove to be correct. Actual results and developments are likely to be different from, and may be materially different from, those expressed or implied by our forward-looking statements. The Company undertakes no obligation to update the information contained herein. Forward-looking statements are subject to inherent risks and uncertainties, some of which are summarized in "Risk Factors" section of this Form 10-K.
GENERAL
We are a holding company incorporated under the laws of the State of Delaware that, through our subsidiaries, intends to own, operate and/or manage destination resort properties. Our primary operations are intended to be focused on destination experience resorts such as the anticipated Myriad-Tunica project. We may seek opportunities in other areas including casinos, resort amenities and facilities, real estate operations and corporate services; however, we have no current plans to begin implementing these operations and do not have adequate financing available at this time. Further we do not anticipate investing in other companies.
The Company now owns 99% of Myriad-Tunica. We are focused on building the following resort in Tunica, Mississippi:
Six (6) planned casinos;
·
Casino Hotels planned 3,000 rooms;
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Convention Hotel with 1,200 rooms;
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Convention Center (600,000 sq. ft.);
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18-hole signature Golf Course;
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Water/Snow Park;
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Mississippi Eye (observatory);
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Health/Wellness Luxury Spa;
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Gardens;
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5,000 seat performance venue;
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Private labeled restaurants; and
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Retail Mega Mall with attractions tied to the Casinos and Convention Hotel.
THE TUNICA DESTINATION
The Tunica area has recently added Interstate Highway 69 which cuts the drive time from the Memphis International Airport to Tunica down to 30 minutes. This fact, coupled with the upgrading of the Tunica regional airport for charters and daily flights and by increasing the length of the runway, building a new airport terminal, and seeking funding for additional improvements will be very beneficial to us.
Tunica has nine casino properties, is the one of the top five gaming environments and has several of the nationally famous and successful Casino companies such as Harrah's, MGM, Boyd, Penn National. These properties are upwards of 10 to 12 years old. Our expectations are that this will prompt these companies to invest additional funds into the Tunica properties making the overall Tunica destination even better.
STRATEGIC PLANS
We are in the process of implementing a Sports Branding plan that is expected to further increase the market appeal of our overall Resort both for overnight stays and day visits. The objective of maximizing the market appeal, blending conventions, social guests, sports enthusiasts and casino player appeals to cross selling opportunities and greater potential gross sales per occupied room. This strategy is part of our business plan.
We are seeking the help of several signature golf course architects and builders to implement our golf course. We anticipate working with an Attraction Mall company to tie Retail, Attractions, Restaurants, Casinos, Conventions and Hotels into a smooth synergistic model using Paul Ma's design protocol.
RESULTS OF OPERATIONS
Statement of Operations for the Twelve Months Ended December 31, 2008 to December 31, 2007
The Company generated no revenues during the twelve months ended December 31, 2008 and December 31, 2007. We focused on implementing our future plan of operations as described in this Annual Report.
The Company's operating expenses for the twelve months ended December 31, 2008 were $2,518,618 compared to $6,107,568 during the comparable period for 2007. This decrease in operating expenses was primarily attributable to decreased salaries, professional fees, and stock issued for services to consultants. In addition, the Company had salary expense of $1,001,687 in 2008 and $1,448,379 in 2007. This decrease is due to a reduction in the number of employees. The Company also incurred interest expense of $345,804 in 2008 and $164,637 in 2007. The Company had a net loss of $2,864,422, or $(.06) per share, for the year ended December 31, 2008, and a net loss of $6,272,205, or $(.15) per share for the year ended December 31, 2007.
The Company's revenues during 2009 and beyond are dependent upon its ability to implement its business plan and to secure the requisite financings in connection therewith. Except as otherwise set forth in this discussion, we are not aware of any trend that will adversely affect our Company's prospects in 2009.
December 31, 2008
Our primary goal as it relates to liquidity and capital resources is to attain and retain the right level of debt and cash to implement our business plan. We will require substantial additional capital financing to implement our business plan, but there can be no assurance that the requisite financings can be secured and on terms reasonably satisfactory to management. We anticipate that new credit facilities, coupled with cash to be raised from private placements and public offerings, assuming they will be successful, will be sufficient to satisfy our operating expenses and capital until such time as revenues are sufficient to meet operating requirements.
The Company's working capital was a negative $10,042,160 as of December 31, 2008 compared to a negative $7,285,994 as of December 31, 2007. This deficit was attributable to an increase in accrued liabilities, accrued legal fees, and including interest. At December 31, 2008, the Company had cash of $2,310.
The Company has historically derived its cash from the sale of shares. In December 2002, we obtained a $40,000 unsecured line-of-credit originally from Textron Financial Corporation, payable on demand, to be used as needed for operating purposes. As of December 31, 2008, the Company had $17,105 outstanding on this credit facility, bearing interest at a rate of 13.99%.
Net cash used by operating activities was $16,530 for the twelve months ended December 31, 2008, as compared to net cash used by operating activities of $692,918 for the comparable period during 2007. This change was a result of a change in the level of activities in implementing our business plan of developing the Myriad-Tunica resort. Net cash provided by financing activities during the twelve months ended December 31, 2008 was $0, compared to $865,554 in 2007 which consisted of amounts derived from the sale of stock and warrants. We will require significant additional capital to implement the Tunica-Myriad business plan and to finance the implementation of our plan of operations as described in this registration statement. We expect to fund our contemplated operations through a series of equity and debt financings raised from private placements and/or public offerings. We assume that such financing activities, if successful, will be sufficient to satisfy our operating expenses and capital requirements until such time as revenues are sufficient to meet operating requirements. Our working capital and the estimated range of funding needed for our day-to-day operations and to service our debt obligations for the next twelve months is approximately $70 million.
During the fourth quarter of 2006, we entered into an agreement with a related party, and shareholder, whereby $1,050,000 of amounts owed to this individual were converted into the principal face amount of a convertible debenture. This debenture accrues interest at 8 percent (8%) annually and was due in full on September 12, 2007. Further, during 2006, the former Chief Executive Officer, Scott Hawrelechko, contributed 8,963,131 shares of common stock back to the Company which were subsequently cancelled.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The process of preparing financial statements in conformity with accounting principles generally accepted in the U.S. requires us to use estimates and assumptions to determine certain of our assets, liabilities, revenues and expenses. We base these estimates and assumptions upon the best information available to us at the time the estimates or assumptions are made. Our estimates and assumptions could change materially as conditions both within and beyond our control change. Accordingly, our actual results could differ materially from our estimates. A full description of all of our significant accounting policies is included in Note 1 to our Consolidated Financial Statements.
LEGAL FEES, INCLUDING ACCRUED INTEREST
We had approximately $1,070,731 due at December 31, 2008 for legal fees for services rendered by our previous attorney. The amount owed accrues interest at ten percent (10%) per year, or approximately $305,087 through December 31, 2008. We consider these fees to be a bill payable and no formal arrangement has been made to service this repayment. We also owed approximately $214,000 to our current attorneys at December 31, 2008.
The financial statements included in this filing have been prepared in conformity with generally accepted accounting principles that contemplate the continuance of the Company as a going concern. The Company's cash position is inadequate to pay all of the costs associated with the implementation of our business plan. Management intends to use borrowings and security sales to mitigate the effects of its cash position, however no assurance can be given that debt or equity financing, if and when required will be available. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and classification of liabilities that might be necessary should the Company be unable to continue existence.
INCOME TAXES
At December 31, 2008, the Company has net operating loss carryforwards estimated
to be approximately $13,029,000 for income tax purposes which are set to expire
from 2019 to 2024. Upon completion of the Company's income tax returns for the
year ended December 31, 2008, there may be adjustments to this estimate of the
carryforwards. Under limitations imposed by the Internal Revenue Code
Section 382, certain potential changes in ownership of the Company may restrict
future utilization of net operating loss carryforwards. However, a valuation
allowance has been established for the entire net deferred tax asset balance
until such time as it is more likely than not that the deferred tax assets will
be realized.
Recently Issued Accounting Pronouncements
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS No. 157 enhances existing guidance for measuring assets and liabilities using fair value. Prior to the issuance of SFAS No. 157, guidance for applying fair value was incorporated in several accounting pronouncements. SFAS No. 157 provides a single definition of fair value, together with a framework for measuring it, and requires additional disclosure about the use of fair value to measure assets and liabilities. SFAS No. 157 also emphasizes that fair value is a market-based measurement, not an entity-specific measurement, and sets out a fair value hierarchy with the highest priority being quoted prices in active markets. Under SFAS No. 157, fair value measurements are disclosed by level within that hierarchy. While SFAS No. 157 does not add any new fair value measurements, it does change current practice. Changes to practice include: (1) a requirement for an entity to include its own credit standing in the measurement of its liabilities; (2) a modification of the transaction price presumption; (3) a prohibition on the use of block discounts when valuing large blocks of securities for broker-dealers and investment companies; and (4) a requirement to adjust the value of restricted stock for the effect of the restriction even if the restriction lapses within one year. The Company adopted the provisions of SFAS No. 157 on January 1, 2008. There was no impact on these financial statements as a result of the adoption of the standard.
In February 2007, the FASB issued SFAS No. 159, Establishing the Fair Value Option for Financial Assets and Liabilities. The FASB has issued SFAS No. 159 to permit all entities to choose to elect, at specified election dates, to measure eligible financial instruments at fair value. An entity shall report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date, and recognize upfront costs and fees related to those items in earnings as incurred and not deferred. SFAS No. 159 applies to fiscal years beginning after November 15, 2007, with early adoption permitted for an entity that has also elected to apply the provisions of SFAS No. 157, Fair Value Measurements. An entity is prohibited from retrospectively applying SFAS No. 159, unless it chooses early adoption SFAS No. 159 also applies to eligible items existing at November 15, 2007 (or early adoption date). The Company adopted the provisions of SFAS No. 159 on January 1, 2008. There was no impact on these financial statements as a result of the adoption of the standard.
In December 2007, the FASB issued SFAS 141R (revised 2007), Business Combinations. SFAS 141R establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, including goodwill, the liabilities assumed and any non-controlling interest in the acquiree. The Statement also establishes disclosure requirements to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS 141R is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The impact of adopting SFAS 141R will be dependent on the future business combinations that the Company may pursue after its effective date.
OFF-BALANCE SHEET ARRANGEMENTS
We are not aware of any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
ITEM 7A.
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