ITEM 2. MANAGEMENTS' DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Plan of Operation for 2007
Our operating activities have not yet generated a positive cash flow. We expect that they will generate a positive cash flow by the end of 2007 and that our recently acquired diagnostic testing business will generate a positive cash flow.
In the fourth quarter of 2006, we entered into an agreement that has to date provided $1,960,000 from the sale of convertible notes to an investment group. Early in 2006, we entered into an agreement that provided $3,000,000 from the sale of convertible notes to an investment group. The proceeds were used to acquire our diagnostic testing business and as working capital for operating expenses and accounts payable. In 2004 and 2005, we were provided $3,000,000 from the sale of convertible notes to this investment group, $1,200,000 in 2004 and $1,800,000 in 2005.
As of May 18, 2007, the investment group has converted all $1,200,000 of the notes issued in 2004 and $497,329 of the notes issued in 2005 to stock, and $781,211 of the notes issued in 2006 to stock. The aggregate outstanding principal amount of the remaining convertible notes was $5,231,460 as of May 18, 2007, including the outstanding notes issued in 2005 and thereafter. We believe without assurance that the investment group will continue to convert the rest of the notes to stock. However, the rate of conversion has slowed as a result of the decrease in our stock price, to which the rate of conversion is tied. All of the remaining debt may not be converted when the remaining convertible notes begin to come due December 31, 2008. We intend to refinance, extend or otherwise restructure this debt before it becomes due. In the event we are unable to do so, we may have to file for protection under the federal bankruptcy laws and we may be unable to continue in operation as a going concern. We were recently able to extend the due date for all of the convertible notes that would have become due in February and May 2007 to December 31, 2008.
Revenue has risen with the advent of our diagnostic testing business to supplement our franchise business. However, it is likely that additional liquidity and capital resources will be necessary to defray our ongoing expenses.
In 2005 we formed a joint venture with a diagnostic testing business and acquired the stock and customer base of another diagnostic testing business from the owners for $700,000 that we transferred to our joint venture. During the first quarter of 2006, we acquired all of the diagnostic testing business that is now operated as a wholly owned subsidiary. The acquisition has increased the number of employees by forty-three. Since then our diagnostic testing business expanded again through acquisition of the customer base of a two additional diagnostic testing businesses.
In conjunction with the acquisition of the diagnostic testing business in the first quarter of 2006, we acquired manufacturing and marketing rights to a new diagnostic testing device that has FDA pre-marketing approval. During the latter half of 2006, the first period in which we had revenue from sales of our new device, there were more than sixty sales for revenue of $353,827. During the first quarter of 2007, there were more than ten sales for revenue of $69,900. We are developing an outside sales force of medical equipment distributors.
We have fifty-five franchised locations, a decrease of forty percent from last year as a result of the conclusion or our arrangement with Team WLP and the loss of its endorsement. No new locations have been added since the end of 2006.
Effective December 31, 2004 we disposed of the former Company-owned chiropractic clinics in Louisiana. Under deferred payment terms of a note due in 2014 issued by the purchaser, we expect to receive more than $100,000 in principal and interest for 2007 and each year during the remaining term of the note. These clinics also signed franchise agreements that generate significant royalties.
Our plan of operation for the remainder of fiscal 2007 is as follows:
To develop the diagnostic testing business that has generated a positive cash flow;
To increase sales of our diagnostic testing machine;
To increase the number of franchises by direct marketing of franchises and recruiting area developers;
To increase fees and royalty income from existing and new franchises; and,
To obtain additional debt and equity financing.
To date our operations have not been self-sustaining. Our independent registered public accounting firm issued a report to the effect that certain conditions raise substantial doubt about our ability to continue as a going concern because we incurred net losses during 2006 and had a working capital deficiency at year end. We continue to have net losses. Should we be unable to implement our plan of operation, our expansion plans may be curtailed, and we may not be able to continue in operations.
Financial condition at March 31, 2006 and 2007
March 31, 2007. Stockholders' equity was $971,042 and we had working capital of $244,621. Principal sources of liquidity in 2007 included net proceeds of $800,000 equity from the sale of convertible notes and $1,383,679 in revenue from operations.
March 31, 2006. Stockholders' equity was $1,280,243 and working capital deficiency was $1,733,166. Principal sources of liquidity in 2006 included the sale of $2,150,000 in convertible notes and $1,317,967 in revenue from operations.
Results of operation - Three Months Ended March 31, 2006 and 2007
Loss from operations increased to $385,226 in 2007 from income of $37,621 in 2006.
Revenue increased to $1,436,274 in 2007 from $1,317,967 in 2006. The diagnostic testing business produced $282,319 of the increase. Revenue from franchised operations decreased to $103,691 in 2007 from $267,703 in 2006 as a result of franchise terminations, decreased collections from franchisees, and the absence of sales of new franchises.
Selling, general and administrative expenses increased to $1,815,245 in 2007 from $1,259,676 in 2006 as a result of an increase in the number of employees due to the acquisition of the diagnostic testing business and increased legal and accounting fees resulting from the acquisition. Management compensation decreased from $216,250 in 2006 to $179,957 in 2007. Stock compensation decreased from $402,180 in 2006 to $20,509 in 2007.
We also incurred interest expense of $1,034,716 mainly from the issuance of additional convertible notes and the conversion of convertible notes. Giving effect to interest expense, overall net loss decreased from $1,010,534 in 2006 to $1,634,349 in 2007.
-------------------- "There was supposed to be an earth shattering KABOOM!" -Marvin Martian Posts: 21 | From: Newark, OH | Registered: Mar 2007
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Doesn't look to promising. Forced to be extremely patient (end of 2007) to possibly see any green. Who knows where the bottom will be by then. What a huge log this is turning out to be.
Posts: 67 | Registered: Feb 2006
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update: 6/11/2007 8:00:05 AM LOS ANGELES, Jun 11, 2007 (BUSINESS WIRE) -- Banyan Corporation (BANY), franchisors of nationally branded Chiropractic USA clinics, and owner of Premier Medical Group and Virtual Medical Systems, Inc. (VMS), announced that its subsidiary, Premier Medical Group has reported a significant 11.5% increase in the number of tests comparing May 2007 with May 2006.
Michael Gelmon, Banyan CEO, speaking to analysts said that the exceptional progress reported by Premier puts the company on target to reach the projected $7.5 million in revenue.
"The progressive growth in our testing services conducted by both VMS and Premier continue a positive trend anticipated by management. Premier Medical Group continues to lead the nation in electro diagnostic testing."
About Banyan Corporation: Banyan Corporation is a publicly traded holding company focused on investing in and building a network of operating subsidiaries engaged in various innovative businesses. Currently the company's subsidiary, Chiropractic USA, Inc. is focusing on the development of branded Chiropractic clinics throughout North America by way of franchising and the use of uniform operating systems and practices. The company's other subsidiaries, Premier Medical Group LLC, and Virtual Medical Systems, Inc., provide diagnostic testing services to physicians nationwide in addition to marketing the VT3000 Electro-diagnostic testing machine.
This Press Release contains or incorporates by reference forward looking statements including certain information with respect to plans and strategies of Banyan Corporation. For this purpose, any statements contained herein or incorporated herein by references that are not statements of historical fact may be deemed forward looking statements. Without limiting the foregoing, the words "believes", "suggests", "anticipates", "plans", "expects", and similar expressions are intended to identify forward looking statements. There are a number of events or actual results of Banyan Corporation operations that could differ materially from those indicated by such forward looking statements. SOURCE: Banyan Corporation Banyan Corporation, Los AngelesInvestor Relations:Michael Gelmon, 1-800-808-0899Copyright Business Wire
-------------------- "Great Day for Up!"....Dr. Seuss Posts: 3387 | Registered: Mar 2006
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I had high hopes for this one, but now it's an official POS. I bailed on this one. An increase O/S or a R/S alone is reason to bailed, but these turkeys are doing both. 1) Increase OS from 5B to 40B. 2) R/S 1:100. If the pps is already poor with 5B O/S, imagine what 20B or 30B would do. This has now turned into one big scam.
From the DEF 14A:
Proposal 2. Approval of Second Amendment to the Restated Articles of Incorporation with Amendments to increase our authorized common stock to forty billion (40,000,000,000) shares.
Our Board of Directors approved an amendment to our articles of incorporation to increase our authorized capital to forty billion (40,000,000,000) shares of common stock and one billion (1,000,000,000) shares of preferred stock. The full text of the Second Amendment to Restated Articles of Incorporation with Amendments is attached to this proxy statement as Exhibit A.
Reasons for proposal
Our Board of Directors believes that the amendment is in the best interests of our shareholders and us. We have almost exhausted our authorized capital. On the record date we had five billion (5,000,000,000) shares of common stock issued and outstanding. We believe that after the increase is approved, we will have a sufficient number of authorized shares to meet our obligations to issue additional shares and for future contingencies.
Proposal 3. Approval of Third Amendment to Restated Articles of Incorporation with Amendments to approve a one for one hundred reverse stock split .
Our Board of Directors has unanimously adopted a resolution approving the Third Amendment to the Restated and Amended Articles of Incorporation with Amendments to effect a one-for-one hundred reverse split of our outstanding common stock without affecting the number of authorized shares of common stock. The full text of the Third Amendment to Restated Articles of Incorporation with Amendments is attached to this proxy statement as Exhibit B.
Posts: 1269 | From: Dallas, Tx | Registered: Mar 2007
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