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The following is an excerpt from a 10QSB SEC Filing, filed by VIVA INTERNATIONAL INC on 8/27/2004.
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RIVER HAWK AVIATION INC - 10QSB - 20040827 - NOTES_TO_FINANCIAL_STATEMENT

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2004

Note 1 - The accompanying consolidated financial statements contain all
adjustments necessary to present fairly the financial position of Viva International, Inc. and subsidiaries (collectively, the "Company") as of June 30, 2004 and their results of operations and their cash flows for the three month periods ended June 30, 2004 and 2003. Results of operations for the three month period ended June 30, 2004 are not necessarily indicative of the results that may be expected for the year ending December 31, 2004. All material inter-company balances and transactions have been eliminated in consolidation.

Note 2 - Basic earnings (loss) per common share ("EPS") is computed as net
earnings (loss) divided by the weighted-average number of common shares outstanding for the period. Diluted EPS representing the potential dilution that could occur from common shares issuable through stock-based compensation including stock options, restricted stock awards, warrants and other convertible securities is not presented for the three month periods ended June 30, 2004 and 2003 since there was no dilutive effect of potential common shares.

Note 3 - On January 8, 2003 the Company entered into an agreement to exchange
307,500 shares of the Company's common stock for 100% ownership of VIVA International, Inc., a Puerto Rico Corportion. In addition, the Company will issue 175 shares of common stock (valued at $4,480) and grant 825 shares of common stock at $80.00 per share to certain employees of VIVA airlines, Inc. VIVA Airlines, Inc. has no assets and holds a letter of intent to acquire 49% of Queen Air and/or Aeronaves Queen, SA (a Dominican Republic air carrier) for $600,000 U.S. Dollars.

Note 4 - Also, on January 8, 2003, the Company sold 80% of Harvey Westbury to a
former officer of the Company for $44,126.90 and the forgiveness of $110,401.29 of monies owed by the Company to this officer. The Company approved the forgiveness of $1,206,625 of loans made to Harvey Westbury Corp. The Company then approved the spin-off of the remaining 20% interest in Harvey Westbury to the Company's shareholders of record on January 9, 2003.

Note 5 - During March, 2003 the Company issued 3,750 shares of common stock for
the payment of legal fees valued at $30,000 and 43,355 and 35,564 shares of common stock, respectively for the conversion of $86,710 of principal and $71,127 of interest of convertible debt.

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VIVA INTERNATIONAL, INC.
(FORMERLY THE AUXER GROUP, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2004

Note 6 - On April 24, 2002 the Company entered into a modification and payment
restructuring agreement with one of its creditors whereby the creditor would try to sell the underlying collateral and offset the proceeds against an agreed upon amount, and any short would be paid by the Company before September 2002. The Company did not make the payment when due and is now in default.

Note 7 - During the first quarter of 2003, the Company corrected an error in
failing to issue 2,500 shares of common stock to a former officer of the Company for services in a prior year. The value of the shares of $10,000 was charged to compensation expense.

Note 8 - Through June 30, 2004, payments of $125,575 have been paid to
employees of the Company through direct payment by a Company shareholder. The note to shareholder includes a liability for these employee payments. The Company has accrued compensation expense due to the employees as earned. However, the payments to date have been considered as advances against earned compensation and accordingly, at June 30, 2004 they have been recorded as a reduction of the liability to employees for wages earned.

Note 9 - At June 23, 2004, The Company authorized the conversion of all the
outstanding preferred stock outstanding to common stock as a result of requests of the individual preferred shareholders. Shares were converted at the ratio of 1 share of preferred stock to 10 shares of common.

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

The following discussion should be read in conjunction with the consolidated financial statements and notes. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions, which could cause actual results to differ materially from Management's expectations. Factors that could cause differences include, but are not limited to, continued reliance on external sources on financing, expected market demand for the Viva International, Inc. (name changed from the Auxer Group, Inc. on June 10, 2003) and subsidiaries products and services, fluctuations in pricing for the products and services and competition, as well as general conditions of the aviation marketplace.

Viva International, Inc. is a holding company that consists of (4) four wholly owned subsidiaries: Viva Airlines, Inc., CT Industries, Inc., Hardyston Distributors, Inc. (doing business as The Mechanics Depot), and Universal Filtration Industries, Inc. A previously wholly owned subsidiary (Harvey Westbury Corp.) was spun off by the Parent Company (Viva/Auxer) during January, 2003 to a former officer and director of the Company in exchange for the assumption of debts and related liabilities. Viva Airlines, Inc. is a development stage company that will provide passenger and cargo services to various destinations from its commercial hub in Santo Domingo, Dominican Republic. CT Industries, Inc., Hardyston Distributors, Inc. and Universal Filtration Industries, Inc. are all inactive. Management does not currently plan to resume the respective operations of Hardyston Distributors, Inc., CT Industries, Inc and Universal Filtration Industries, Inc.

Results of Operations for the Three and Six Months Ended June 30, 2004 and 2003.

Viva International, Inc. had sales of $0 for the three and six months ended June 30, 2004 as compared to sales of $0 for the three and six months ended June 30, 2003. Viva Airlines, Inc., the Company's only operating subsidiary, is in a stage of its Development and has not yet commenced operations.

Viva International, Inc. had net losses of $248,434 and $578,067 for the three and six months ended June 30, 2004 as compared to net losses of $998,380 and $1,202,651 for the three and six months ended June 30. 2003. The decrease in net losses reflects managements decision to reduce its number of key employees continuing to work through the final stages of development of its aviation related business segment as well as a reduction of interest expenses due to non-recurring convertible loan interest.

Viva International, Inc. had general administrative expenses of $222,349 and $539,982 for the three and six months ended June 30, 2004 as compared to general administrative expenses of $425,861 and $592,016 for the three and six months ended June 30, 2003. The decrease in these expenses is attributable to the Company's decision to reduce the number of employees and outside consultants actively working on the final stages of development of the aviation related business segment.

Viva International, Inc. had interest expenses of $26,085 and $38,085 for the three and six months ended June 30, 2004 as compared to $545,242 and $564,862 for the three and six months ended June 30, 2003. The decrease in these expenses is primarily due to a reduction in notes payable and in the interest rates applicable to the existing debt obligations as well as the elimination of a non-recurring interest charge related to the conversion of convertible loans.

The Company did not report any revenue for the three month period ending June 30, 2004. The aviation industry subsidiary is a development stage company and is the only active subsidiary. The aviation industry subsidiary was expected to begin operations prior to the quarter ended June 30, 2004. However, Management expects to continue the development of the aviation segment and expects that it will begin operating during the quarter ended September 30, 2004.

On January 15, 2003, The Company completed a stock exchange agreement and plan of reorganization with Viva Airlines, Inc. In accordance with such agreement, we issued 307,500 of our shares of common stock to the shareholders of Viva Airlines, Inc. After the transaction was completed, the aggregate number of our shares held by the Viva Airline shareholders represented more than 50% of our issued and outstanding common stock. In addition all of our officers and directors resigned and Robert J. Scott became our sole officer and director. The Company's name was changed during 2003 from the Auxer Group, Inc., to Viva International, Inc.

The stock exchange agreement and plan of reorganization also required that our only active subsidiary, Harvey Westbury Corp., be spun off. Our former officer and director, Eugene Chiaramonte Jr., obtained control of Harvey Westbury Corp. through conversion of debt owed to him, by Harvey wetbury Corp. which has remained a private company since the spin-off.

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As of today, our other wholly owned subsidiaries are inactive or in the process of being dissolved.

On January 17, 2003, Viva Airlines appointed Juan Carlos Hernandez as its Vice President and Chief Operating Officer for Dominican Republic operations. As of April 15, 2003, Mr. Hernandez opted to reject his appointment.

On January 21, 2003, we commenced acquisition negotiations with Kick Communications Inc. of New York, an international provider of long distance telephone services. As of today. we have discontinued our discussions with Kick Communications and do not intend to enter into any agreements with them.

On January 22, 2003, we issued a letter of intent to purchase 3 Boeing 727-200 aircraft from Airframe Consultants, Inc. The equipment covered by the letter of intent is no longer available for purchase.

On February 19, 2003, Viva Dominicana S.A. was formed and signed an agreement to Acquire Aerocontinente Dominicana, S.A. Viva Dominicana, Inc. S.A. is controlled 49% by Viva International, Inc. through individual nominees whoa re also officers and/or directors of the Company. The agreement providing for the acquisition could not be completed and was accordingly, vacated.

On February 20, 2003, we entered into negotiations with Mojave Jet to purchase 2 Boeing 737-200 aircraft. To date, we have not completed any type of equipment acquisition with Mojave Jet. However, we do have deposits on file with Mojave to complete future acquisitions. The deposits were funded via the issuance of 15,000,000 shares of preferred stock convertible to common at 10 to 1. In December of 2003, by action of the Company's Board of Directors the preferred shares on deposit were reduced from 15,000,000 to 2,500,000. On June 23, 2004, the shares preferred shares were converted into common shares.

On March 10, 2003, we announced our intention to acquire a 49% interest in Queen Air, Aeronaves Queen, S.A. The acquisition of Queen Air could not be completed due to Company's inability to satisfy certain performance requirements as demanded by the seller and the agreement was set aside by the parties in January of 2004.

On March 19, 2003, The Company announced that it was considering exiting the depository trust and clearing system (DTC). The Company has not yet filed its request for removal from the system.

On March 21, 2003, The Company announced that its Viva Airlines, Inc. subsidiary had agreed to purchase its fuel requirements and supplies from World Fuel Services. As of today, Viva Airlines, Inc., has not activated this agreement. This vendor agreement is not binding on the Company and it is possible that the Company will do business with other providers when it commences operations.

On March 27, 2003, The Company announced that it had made executive appointments at its Viva Airline subsidiary. Rudy Dominguez was appointed as President and Chief Operating Officer and Oscar Hasan was appointed as Vice President of Sales & Marketing. Mr. Dominguez also serves Viva International, Inc. as the Company's Chief Operating Officer (COO). Mr. Hasan also serves Viva Air Dominicana, S.A. as that Company's President. On July 15, 2004, Mr. Hasan was appointed as President and Chief Executive Officer of Viva International, Inc.

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On April 2, 2003, The Company announced that Viva Airlines, Inc. had received an endorsement from the Department of Tourism of the Dominican Republic for the soon to be completed Queen Air, Aeronaves Queen, S.A. acquisition. In light of the failure to complete the Queen Air transaction as previously discussed, the Company expects to request and receive a similar endorsement through Viva Air Dominicana, S.A.

On April 4, 2003, The Company announced that Viva Airlines, Inc. had decided to go forward with the acquisition of Queen Air, Aeronaves Queen, S.A. and that the parties had agreed that all contractual issues and necessary agreements would be ready for signature on April 9, 2003. Formal closing was expected to be scheduled during the first full week of May, 2003. As previously discussed, the Queen Air transaction was unable to be completed and was set aside without liability in January of 2004.

On April 10, 2003, The Company announced that completion of the agreements to acquire a 49% interest in Queen Air, Aeronaves Queen S.A. had been delayed until April 11, 2003 due to some technical difficulties. As previously discussed, the Queen Air transaction was unable to be completed and was set aside without liability in January of 2004.

On April 14, 2003, we signed a letter of intent with Tristar Capital LLC to purchase one Lockheed wide-passenger aircraft. The Company was unable to satisfy certain economic criteria to convert the letter of intent into a purchase contract. Subsequently, the aircraft was relocated to Bolivia under a verbal agreement with Tristar that provided for a future payment to reimburse the costs of moving the equipment. The documentation evidencing this agreement was never completed and the aircraft was found to contain material defects rendering it unusable to Viva or capable of passing inspections that were to be conducted by the Bolivian Aeronautical Authority.

On April 21, 2003, the Company announced that it had entered into a passenger connector Agreement with Fina Air of Puerto Rico and issued a letter of intent to purchase 2 DC-9-32 aircraft. As of today, Viva has been unable to commence operations and Accordingly, Fina Air has cancelled its agreement with Viva. Further, the letter of intent for aircraft that were to be used in Fina has not been exercised and accordingly, a completed transaction did not result.

On April 29, 2003, The Company announced the appointment of Ronald S. Greene as the Chief Pilot for its Viva Airlines, Inc. subsidiary. Mr. Greene is currently active in the Company on a part-time basis. For approximately 3 months from a point near the end of 2003 through mid-March of 2004, Mr. Greene was actively piloting for other air carriers. The Company unpaid wages and expenses, of approximately $36,000, due to Mr. Greene. Accordingly, Mr. Greene is not currently working for Viva Airlines, Inc.

On May 1, 2003, The Company announced the appointment of Eric F. Paillet as Executive Vice President of its Viva Airlines, Inc. subsidiary. Mr. Paillet never assumed official duties and his appointment was rescinded.

On May 2, 2003, The Company announced that Queen Air, Aeronaves Queen S.A. on behalf of its subsidiary Viva Airlines, Inc. had received approval from the Dominican Republic Aeronautical Authority on its Dominican Flag Carrier Certificate application. As previously discussed, the Queen Air acquisition was unable to be completed. Viva Air Dominicana has received assurances that it will be recognized with similar flag carrier approval.

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On May 14, 2003, The Company announced that Viva Airlines, Inc. completed its formal closing with Queen Air, Aeronaves Queen S.A. In addition, The Company announced its plans to do a 1 for 800 reverse stock split as of May 28, 2003. The Company also announced an offer that would allow the common shareholders to convert their holdings into preferred shares. As of today, the conversion offer to convert common shares into preferred shares has not been implemented and it is unlikely that the contemplated plan will be offered due to an inadequate level of interest in participating by the Company's shareholders.

On May 20, 2003, The Company released additional information and statements discussing the reverse split and the conversion offering as announced on May 14, 2003.

On May 22, 2003, The Company announced that Viva Airlines, Inc. through Queen Air, Aeronaves Queen S.A. had obtained presidential approval on its airline operational authority certificate. Subsequent to the announcement, the Queen Air, Aeronaves Queen, S.A. agreement was mutually rescinded. As of today, the Company through Viva Air Dominicana, S.A., is pursuing its airline operational authority certificate.

On May 30, 2003, The Company announced a delay in the implementation of the reverse stock split as announced on May 14, 2003. The delay was to allow consenting shareholders additional time to reconsider the reverse stock split. The consenting shareholders, after additional review, did not seek to delay or cancel the reverse stock split and without additional announcement the reverse split subsequently (during June of 2003) became effective.

On June 3, 2003, The Company announced that Oscar Hasan had appointed a 5 member outside advisory committee of New York City area travel associations to assist in strategic market planning for the Caribbean, Central and South America. Recommendations to commence services from New York to Santo Domingo starting in July Of 2003 were unable to be implemented. Subsequently the Company has restructured its primary targeted markets for initial services and accordingly, New York is not currently a market the Company plans to develop on its own.

Further, the Company announced that it would begin providing airline passenger and cargo services from Punta Cana, Dominican Republic to Caracas, Venezuala and to Sao Paulo, Brazil on July 15, 2003 under a code share agreement with a Brazilian air Carrier. The Brazilian air carrier withdrew its code share agreement prior to the expected start of the agreement.

The Company also announced that it opened an office in the Jet Center at Fort Lauderdale, Florida for use as an operational an administrative center. As of today, the Company has vacated its office in Fort Lauderdale pursuant to the expiration of its lease and relocated its legal department and various administrative functions to a location in Miami, Florida. This change will result in approximately $30,000 in annual savings.

Also on June 3, 2003, The Company announced the issuance of a letter of intent to acquire a 49% interest in Tropical Air International of St. Kitts and Nevis. Subsequent investigations resulted in discovery that Tropical Air did not contain appropriate current licensing and the Company withdrew its interest in Tropical.

The Company also announced that it had reached an agreement to acquire a 45% interest in Notheast Bolivian Airways, Ltd. The agreement provided for the development of a 129 Category I certificate with plans to open up flight service to South America. The Company was unable to provide necessary expenses or funding to Northeast Bolivian and accordingly, Northeast Bolivian terminated the agreement.

Finally, the Company announced that it has agreed to acquire nine (9) DC-9-32's as needed from Mojave Jet under a financing facility arrangement provided by Cherokee Transportation Group. Due to the Company's inability to complete other agreements and/or airline acquisitions and/or joint venture arrangements, none of The none (9) DC-9-32's have been acquired. It is doubtful that any of the aircraft remain available to acquire.

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On July 2, 2003, The Company announced that its name had officially been changed to Viva International, Inc. and that it has commenced trading on the OTC Bulletin Board System under the symbol: VIVI. Further, the assigning of the symbol coincided with the Company's implementation of a one (1) for 800 reverse split. The Company also announced the retention of Martin E. Janis & Company to carry out an extensive public awareness program. As of today, the Janis firm is no longer engaged due to the Company's inability to make proper payment for services as rendered. There is approximately $12,000 of liability to the Janis firm on the Company's books.

On July 14, 2003, The Company announced that am L-1011-50 aircraft subject to a financial agreement with Tri-Star Capital, Ltd. was moved from Tucson, Arizona to Cochabamba, Bolivia on July 13, 2003 for airworthiness testing. Subsequently, the aircraft was discovered to have material defects and the agreements pursuant to the cost of moving the aircraft and performance thereof were disputed. No resolution was reached. The aircraft was to have been utilized in connection with the Company's agreements with Northeast Bolivian. The Northeast Bolivian agreement was abandoned due to the Company's inability to provide the underlying financial assistance necessary to support the agreement.

On August 11, 2003, The Company announced that it has entered into several agreements with Fina Air. Among the agreements are: a joint venture agreement that provided for Fina to operate various flight routes that will be part of the Viva Dominicana schedule. Viva was also to provide various technical and administrative support as well as to place two (2) aircraft (SAAB 340's) with Fina. The Company did provide various technical and administrative support to Fina for which we were not compensated. In addition, the Company arranged for some financial support for Fina as provided by a third party. However, due to the delays in Viva commencing Operations and the subsequent inability of Viva to provide working capital, deposits And finalize the acquisition of the SAAB aircraft, Fina terminated all of the agreements and understandings then existing.

On September 2, 2003, The Company announced that it had appointed Stuart Carnie as its President and Chief Executive Officer. Mr. Carnie has held significant executive positions within the airline and related industries during the past decade. In February of 2004, Mr. Carnie resigned his positions to pursue other opportunities. Company Chairman, Robert J. Scott, assumed the roles of President and Chief Executive Officer until July 15, 2004 when Oscar Hasan was Officially accepted appointment.

On September 3, 2003, The Company announced a joint venture agreement with Pride Airline Network of Humble, Texas. Under the agreement, Viva would provide infrastructure for landing rights, fly over rights, reservations, ticketing and ground handling. The joint venture agreement has not been activated and there are no assurances that it will be.

On September 4, 2003, The Company announced that it had reached agreement on a 3 aircraft acquisition and financing package with Mach Aero International. The Company has been unable to raise the funds necessary for a deposit or down payment on the aircraft. As of today, it is unknown if the agreement remains available to complete.

On September 8, 2003, The Company announced that Fina Air has obtained its FAA 135 certificate. Subsequently, Fina has terminated its agreements and its association with Viva.

On September 10, 2003, The Company announced that it had reached an agreement on behalf of Viva Air Dominicana to lease two (2) DC-9-15 from Air Transport Group, LLC and Centec Aviation, Inc. for a 3 year period. The Company further announced that Oscar Hasan has been appointed President of Viva Air Dominicana. As of today, the Company has been unable to raise the amount necessary for deposits on the DC-9-15 lease. Mr. Hasan continues to be the President of Viva Air Dominicana.

On September 12, 2003, The Company announced that it has formed an air services division and that Arnold Leonora has accepted appointment as the division's President. As of today, the air services division has not transacted business and accordingly, Mr. Leonora has not provided any services to the Company. The willingness of Mr. Leonara to accept appointment at a future date is unlikely.

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On September 23 and 24, 2003, The Company announced that it has issued a letter of commitment to acquire a 49% interest in Royal Aruban Airlines through its Hardyston Distributors, Inc. subsidiary. The Company further announced that it intended to spin-off Hardyston Distributors, Inc. under a plan that would reward its shareholders of record as of October 15, 2003 with 1 share of Hardyston for every 3 shares owned in Viva. Subsequently, the Company finalized an agreement with Royal Aruban Airlines. Additionally, an involuntary bankruptcy petition was filed against Royal Aruban by two former employees and one creditor. This forced Viva to submit plans for Reorganization and debt settlement to Royal Aruban and its attorneys. Royal Aruban and its attorneys demanded cash and/or other consideration as a prerequisite to presenting the Viva plan to the Aruban court. Viva refused the Royal Aruban demand and accordingly, submitted its own plan to the Aruban Courts. To the best of our knowledge, the Aruban Courts approved a Moratorium for Royal Aruban from its creditors. Further, Royal Aruban has not started operations. Viva believes the original agreement between the Company and Royal Aruban has been set aside and that it would have to renegotiate a new contract should it desire a working relationship with Royal Aruban. As of today, this is not likely. Also, the spin-off of Hardyston Distributors, Inc. is being delayed to a future date when a business interest or economic benefit to its shareholders can occur.

On October 15, 2003, The Company announced that ticket sales for flights from Ft. Lauderdale, FL. to Aruba will begin on October 27, 2003 and air services will begin on December 1, 2003. Due to the Royal Aruban court proceedings seeking protection from its creditors and further due to Viva's inability to raise sufficient amounts of capital to overcome the Royal Aruban credit related problems ticket sales and subsequent air service was not able to commence.

On October 23, 2003, The Company had announced that it had completed negotiations and entered into a letter of intent with Turaser of Brazil to provide flights twice a week from Punta Cana, Dominican Republic to Sao Paulo, Brazil beginning December 1, 2003. The contract has been deferred to a future date and will become activated upon the Company, through Viva Air Dominicana, S.A., being able to prove its ability to provide the services specified in the contract. As of today, the Company has been unable to prove its ability due to its lack of capital and inability to raise the funds necessary to place deposits on aviation lease contracts and pay for the costs of deploying the aircraft.

On November 6, 2003, The Company announced that it had completed its agreements with Royal Aruban Airlines on behalf of its Hardyston Distributors, Inc. subsidiary to acquire a 49% interest in Royal Aruban. See the update provided in connection with the announcements of September 23 & 24, 2003 above.

On November 19, 2003, The Company announced that the Royal Aruban Airlines (RAA) director of maintenance has accepted the first aircraft to be put into regional service for RAA. The DC-9 aircraft at Coopesa Maintenance in San Jose, Costa Rica although accepted was not ferried to Aruba due to the Company's inability to place a satisfactory lease deposit on the aircraft and other disputes with officials of Royal Aruban.

On November 19, 2003, The Company announced that E. Thomas Septembre had accepted appointment as in-house counsel. Mr. Septembre continues to serve in his appointed capacity and currently operates out of our offices in Miami, Florida.

On December 8, 2003, The Company announced the retirement of 12 1/2 million shares of its convertible preferred shares representing 125 million fully diluted common shares.

On June 8, 2004, The Company announced the association, merger, acquisition or assimilation Of Bravo Airlines S. A. of Madrid. Bravo is intended to operate as a non-scheduled seasonal chartered carrier from Madrid to various European destinations. The association will allow for access to licensing rights as well as the utilization of equipment during non peak periods. At the request of Bravo, the discussions and finalization of applicable agreements have been suspended. Talks are expected to resume in September of 2004.

On July 15, 2004, The Company announced the following executive appointments:
Oacar Hasan to the posts of President & Chief Executive Officer, Rudy Dominguez to the post of Chief Operating Officer and E. Thomas Septembre to Vice President of Administration, Compliance & Corporate Governance. In addition, Mrrs. Hasan and Dominguez accepted appointment to the Company's Board of Directors.

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On July 19, 2004, The Company announced the ratification of a flight operations agreement with Skyplan Services Limited of Alberta, Canada. The agreement calls for Skyplan to provide flight Dispatch, flight planning, flight following and flight watch services.

On July 20, 2004, The Company announced that is has selected Videcom International, Inc. of the United Kingdom to be its airline reservation system provider. Videcom will provide software and support for reservations, flight inventory, fares, ticketing, credit card authorization and other related services.

On August 13, 2004, The Company announced that it has executed a mutual letter of intent with SRX Continental, Inc. of Aventura, FL. to provide for a joint venture Air Lift Service agreement for Cargo operations.

Sources of Liquidity

At June 30, 2004, the Company had no cash. Since inception the Company has accumulated a deficit of approximately $15,113,663.

Our principal source of funding for the three and six month periods ending June 30, 2004 was from loans from shareholders that are being provided for working capital purposes during the development of the airline project through Viva Airlines, our wholly owned subsidiary. At June 30, 2004, $778,590 in working capital loans have been provided by Company shareholders.

Viva International, Inc. has previously estimated that it will require a minimum of $3,000,000 of working capital to complete Viva Airlines, Inc.'s transition from a development stage company to full operation. However, Company management has scaled back its business plan to a level that that will enable it to begin providing air services so long as it is able to raise a minimum of $500,000.

Viva International, Inc. does not currently have the funds necessary to provide working and expansion capital to Viva Airlines, Inc. Viva International, Inc. will only be able to provide the needed capital by raising additional funds. As a result of the scaling back as discussed in the above paragraph, the Company believes that it has improved its chances of raising the minimum levels of financing required.

However, an inability to raise funds or a continued lack of funds could result in the failure to complete needed acquisitions of certain aviation assets or payment of certain related expenses that would delay or prevent the commencement of the operation of Viva Airlines, Inc.

Management is optimistic that the Company will be able to borrow sufficient capital to fund Viva Airlines, Inc. Despite Management's optimism, the Company has been unable to obtain sufficient capital to begin its operations.

Any forward-looking statements included in this Form 10-QSB reflect management's best judgment based on factors currently known and involve risks and uncertainties. Actual results may vary materially.

Item 3. Controls and Procedures

(a) Evaluation of disclosure controls and procedures.

Our Principal Executive Officer and Principal Financial Officer (collectively the "Certifying Officers") maintain a system of disclosure controls and procedures that is designed to provide reasonable assurance that information, which is required to be disclosed, is accumulated and communicated to management timely. Under the supervision and with the participation of management, the Certifying Officers evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule [13a-14(c)/15d-14(c)] under the Exchange Act) within 90 days prior to the filing date of this report. Based upon that evaluation, the Certifying Officers concluded that our disclosure controls and procedures are effective in timely alerting them to material information relative to our company required to be disclosed in our periodic filings with the SEC.

(b) Changes in internal controls.

Our Certifying Officers have indicated that there were no significant changes in our internal controls or other factors that could significantly affect such controls subsequent to the date of their evaluation, and there were no such control actions with regard to significant deficiencies and material weaknesses.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

Viva International, Inc. has the following pending or threatened litigation:

(1) The Auxer Group, Auxer Telecom, Inc. and CT Industries, Inc. vs. Husni Hassan, Clifton Telecard Alliance, Kattosko Communications, Mohd Qattous and Mustafa Qattous - Superior Court of New Jersey, Law Division, Passaic County - Index No. L1120-02, filed on February 22, 2002. We are demanding a sum of $1,250,000 plus interest for default of promissory note, violation of stock purchase agreement and violation of employment contract. On April 12, 2002, Clifton Telecard Alliance, Kattosko Communications, Mohd Qattous and Mustafa Qattous filed a counterclaim for violation of stock purchase agreement. The parties have entered into settlement negotiations. The present proposal is for the parties to agree to mutual releases. In return for such consideration, plaintiffs agree to allow Mustafa Qattous' stock to be traded and sold.

(2) Trans National Communications vs. Auxer Telecom Inc. dba Auxer Group-Superior Court of New Jersey Law Division, Passaic County - Docket No. L793-02. On April 17, 2002, a judgment in the amount of $339,381.84 was obtained against the defendants. The plaintiff, Trans National Communications attached Auxer's bank account even though the responsible party was Auxer Telecom. Auxer's litigation counsel successfully separated the defendants in this case and the judgment is now only against Auxer Telecom Inc., Auxer's inactive subsidiary. Auxer does not intend to contest the judgment against Auxer Telecom Inc. since it was dissolved by proclamation on March 18, 2002.

(3) International Access dba Access International, Inc. v. CT Industries, Inc. -Los Angeles Superior Court, Central District - Case No. BC 282393, filed on September 30, 2002. International Access ("IA") claims that CT Industries, Inc., Auxer's subsidiary, entered into an agreement (Switch Port Lease and Service Agreement) with IA whereby IA would provide one year of telecommunications services to CT Industries. IA claims it provided the services and was not paid because checks from CT Industries were returned for insufficient funds. IA is requesting payment of $76,095.34 plus 10% interest per annum from March 13, 2002. Auxer does not intend to respond to this lawsuit and will allow a judgment to be entered against CT Industries, its inactive subsidiary.

(4) Mahure, LLC vs. Auxer Group, Inc. - Superior Court of New Jersey, Law Division, Passaic County; Docket No. L-4245-02. Filed August 14, 2002. Mahure, LLC, was Auxer's landlord for the premises known as 12 Andrews Drive, West Patterson, New Jersey, Auxer's former business address. It is suing Auxer for failure to pay base rent of $7,083.33 from October 2001 through August 2002, plus 50% of real estate taxes, insurance premiums and other fixed charges contained in Auxer's lease. Mahure, LLC is requesting $58,465.49 attorney's fees, cost of suit and interest. The Company did not contest this matter and accordingly, as judgment has been entered against it for approximately $98,000.

(5) Colbie Pacific Capital - On April 24, 2002, Auxer entered into a Modification and Restructuring Agreement with Colbie Pacific Capital. The agreement required Auxer to make a $350,000 payment to Colbie by September 28, 2002. Auxer failed to make such payment and the sum of $450,000 plus accrued interest is now due to Colbie. On October 8, 2002, Auxer received a settlement offer from Colbie's attorney whereby Colbie agreed to allow the Company to sell certain assets and make the required payment. Viva is trying to sell such assets, specifically telecommunications switching equipment. However, the assets have limited value and application and the likelihood of sale appears to be unlikely. Accordingly, the Company hopes to negotiate a settlement for less than the recorded amount of the liability.

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(6) Abel Estrada vs. CT Industries, Inc. - Labor Commissioner, State of California - State Case Number 06-67045 JAH - Hearing Date: November 20, 2002 in Los Angeles, California. Abel Estrada, a former employee of Auxer's subsidiary, CT Industries, Inc., filed a claim against CT in the amount of $10,376.08 with the Labor Commissioner, State of California, for the following claims: unpaid wages - $1,068; unpaid commissions - $8,000; unpaid vacation time - $861.33; unpaid expenses $43.75; and unauthorized deduction from wages - $403.00. CT Industries did not appear at the hearing and contest this matter.

(7) Environmental Materials Corporation vs. Harvey Westbury Corp., The Auxer Group, Inc., Ronald Shaver, Ryan Shaver, et al. - On March 7, 2003 Environmental Filed an action in the Superior Court of New Jersey for Ocean County, Docket No. 717-03, demanding payment for sums allegedly due to it from companies under the control of Ronald and Ryan Shaver (the "Shavers") and Harvey and the Company. Subsequent discovery revealed that Harvey owed a maximum of about $5,500 to Environmental. Harvey and the Company have cross claimed against the Shavers and the Shavers have cross claimed against the Company seeking damages with respect to their employment contracts totaling several hundreds of thousands of dollars. Recent investigation has led to a motion brought by the Company seeking to amend its Cross Claims to included charges related to a failed attempt to take over the Company and a new third-party claim against former counsel to the Company, Richard Anslow, Esq. for assisting the Shavers in these efforts while still purporting to represent the Company. The Company believes it has meritorious defenses against the claims of the Shavers and intends to vigorously defend the action. Trial is presently scheduled for June 7, 2004.

(8) Paul R. Lydiate - Labor Claim in California against Auxer Telecom Inc. for $20,192. Auxer did not appear at the hearing on May 6, 2002. Auxer Telecom Inc. was dissolved on March 18, 2002.

Other than as stated above, we are not currently aware of any other pending, past or present litigation that would be considered to have a material effect. There are no known bankruptcy or receivership issues outstanding and we have no known securities law violations. Additionally, we have no known legal proceedings in which certain corporate insiders or affiliates of us are in a position that is adverse to us.

Item 2. Changes in Securities.

On May 2, 2002, we entered into an agreement whereby 8% convertible debentures totaling $894,185 will be retired for one million dollars ($1,000,000) for principal and accrued interest. The $1,000,000 is reduced by any proceeds received by the debenture holder from the conversion of the debt into common stock and the sale of common stock. This debt has now been satisfied in full.

On June 23, 2004, preferred stock of 3,510,280 was converted to 35,102,800 shares of common stock pursuant to the request of the preferred holders and consistent with the provisions and features of the preferred shares.

Item 3. Defaults Upon Senior Securities.

Not Applicable

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

None

Item 5. Other Information.

None

Item 6. Exhibits and Reports of Form 8-K.

(a) Exhibits required by Item 601 of Regulation S-B.

None

(b) Reports of Form 8-K.

None

16

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed in its behalf by the undersigned, thereunto duly authorized, on May 24, 2004.

VIVA INTERNATIONAL, INC. 

Date:  August 27, 2004       By:  /s/   Robert Scott
                             -------------------------------------------
                                        Robert J. Scott
                                        Chief Executive Officer,
                                        Chief Financial Officer and
                                        Director

17

CERTIFICATION

OF CHIEF EXECUTIVE OFFICER
AND CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002

I, Robert J. Scott, certify that:

1. I have reviewed this Form 10-QSB of Viva International, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods present in this report;

4. The small business issuers other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the small business issuer and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principals;

(c) Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the small business issuer's internal control over financing reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting;

and

5. The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonable likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involved management or other employees who have a significant rile in the small business issuer's internal control over financial reporting. 

Date: August 27, 2004               /s/  Robert J. Scott
                                    -------------------------------------
                                    Robert J. Scott
                                    Chief Executive Officer,
                                    Chief Financial Officer and
                                    Director

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

AND CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the accompanying Quarterly Report On Form 10-QSB of Viva International, Inc. for the Quarter Ended June 30, 2004, I, Robert J. Scott, Chief Executive Officer and Chief Financial Officer of Viva International, Inc. hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge and belief, that:

1. Such Quarterly Report on Form 10-QSB for the period ended June 30, 2004, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in such Quarterly Report on Form 10-QSB for the period ended June 30, 2004, fairly presents, in all material respects, the financial condition and results of operations of Viva International, Inc.

Dated: August 27, 2004

VIVA INTERNATIONAL, INC. 

/s/    Robert J. Scott
---------------------------
Robert J. Scott
Chief Executive Officer
Chief Financial Officer

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