Para Mas Internet (PMIJ) 10QSB 2005 Q1 Quarterly report (small business)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________

FORM 10-QSB

__________________________

(Mark One)

ý QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period endedMarch 31, 2005

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from __________ to ___________

Commission file number:000-30645

PARA MAS INTERNET, INC.

(Exact name of Registrant as specified in its charter)

____________________

Nevada (State or other Jurisdiction of Incorporation or organization) 59-3383240 (IRS Employer I.D. No.)

___________________________

700 North Neely Road, Suite 19, Gilbert, Arizona 85233

(866) 321-7898

(Address, including zip code, and telephone and facsimile numbers, including area code, of

registrant’s executive offices)

___________________________

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

Indicate by check mark whether registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

[X] Yes [ ] No

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of March 31, 2005 286,077,479 shares of common stock, $.001 par value per share.

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PARA MAS INTERNET, INC.

FORM 10-QSB

INDEX

PART IFINANCIAL INFORMATION

Item 1.	Consolidated Financial Statements Periods Ended March 31, 2005 and 2004 (unaudited)
	Consolidated Balance Sheets	3
	Consolidated Statements of Operations	4
	Consolidated Statements of Cash Flows	5
	Notes to Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis or Plan of Operation	9
Item 3.	Controls and Procedures	10
PART II	OTHER INFORMATION	11
Item 1.	Legal Proceedings	11
Item 2.	Changes in Securities and Use of Proceeds	11
Item 3.	Defaults Upon Senior Securities	11
Item 4.	Submission of Matters to a Vote of Security Holders	11
Item 5.	Other Information	11
Item 6.	Exhibits and Reports on Form 8-K	11
SIGNATURE PAGE		12

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PARA MAS INTERNET, INC.

BALANCE SHEETS

AS OF MARCH 31, 2005 (UNAUDITED) AND DECEMBER 31, 2004 (AUDITED)

ASSETS	Consolidated			Consolidated
	As of			As of
	3/31/2005			12/31/2004
CURRENT ASSETS
Cash		7,593			2,577
Inventory		7,352			7,352
Accounts Receivable		12,800			12,800
Accounts Receivable - Related Party		156,000			156,000
Allowance for doubtful Accounts - short term portion of receivables		(88,880	)		(88,880	)
Note Receivable - Related Party		59,850			59,850
Total current assets		154,715			149,699
FIXED ASSETS
Land		232,000			232,000
Vehicle		24,850			24,850
Computer Equipment		11,894			11,894
Office Equipment		6,000			6,000
Accumulated Depreciation		(29,654	)		(29,267	)
Total Fixed Assets		245,090			245,477
OTHER ASSETS
Note Receivable - long term portion, net of allowance - Related Party		234,000			234,000
Note Receivable - long term portion, net of allowance		19,200			19,200
Allowance for doubtful Accounts - long term portion of receivables		(133,320	)		(133,320	)
OTHER ASSETS		119,880			119,880
TOTAL ASSETS	$	519,685		$	515,056
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Notes payable		50,936			50,936
Accounts payable		67,633			67,114
Interest payable		833			833
Salary payable		1,644,279			1,606,779
Payroll liabilities		36,238			36,238
Note payable - Related Party		295,607			231,580
Total current liabilities		2,095,526			1,993,480
LONG TERM LIABILITIES
Notes payable		-			-
TOTAL LIABILITIES		2,095,526			1,993,480
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $0.001 par value, 500,000,000 shares
authorized, 286,077,479 shares issued and outstanding as of
March 31, 2005 and December 31, 2004, respectively		281,248			281,248
Additional paid in capital		1,567,578			1,567,578
Accumulated deficit		(3,424,666	)		(3,327,249	)
Total stockholders' equity (deficit)		(1,575,841	)		(1,478,424	)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	519,685		$	515,056

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

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PARA MAS INTERNET, INC.

STATEMENTS OF LOSS AND ACCUMULATED DEFICIT

FROM THE INCEPTION TO AND THE THREE MONTHS ENDED MARCH 31, 2005 (UNAUDITED)

				From Inception
	For the three months ended			(February 13, 2001) to
	March 31, 2005			March 31, 2005
REVENUES - Marketing Rights	$	-		$	574,000
REVENUES - Cobrand Products		45,441			575,311
COST OF REVENUES		(32,288	)		(390,203	)
GROSS PROFIT (LOSS)	$	13,153		$	759,108
EXPENSES:
General and administrative		103,768			3,541,271
Bad debt expense		-			222,200
Depreciation		387			29,654
Professional fees		-			343,635
Total expenses		104,155			4,136,760
Operating income (loss)		(91,002	)		(3,377,652	)
OTHER INCOME (EXPENSE)
Interest		(6,415	)		(19,510	)
Write down of assets		-			(28,400	)
Other expenses		-			896
Total other income (expense)		(6,415	)		(47,014	)
LOSS FROM OPERATIONS		(97,417	)		(3,424,666	)
NET INCOME (LOSS)		(97,417	)		(3,424,666	)
ACCUMULATED DEFICIT - Beginning		(3,327,249	)		-
ACCUMULATED DEFICIT - End		(3,424,666	)		(3,424,666	)
LOSS PER SHARE BASIC AND DILUTED	$	(0.00	)	$	(0.01	)
PER SHARE INFORMATION:
Basic and dilulted Weighted average Number of
Shares Outstanding		286,077,479			270,634,715

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

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PARA MAS INTERNET, INC.

STATEMENTS OF CASH FLOWS

FROM THE INCEPTION TO AND THE THREE MONTHS ENDED MARCH 31, 2005 (UNAUDITED)

	Three Months			From Inception
	Ended			(February 13, 2001) to
	March 31, 2005			March 31, 2005
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income / (Loss) from Operations	$	(97,417	)	$	(3,424,666	)
Adjustments to reconcile net income
to net cash provided
Common stock options issued for services, assets and to settle debt		-			645,519
Change in assets and liabilities:
Depreciation Expense		387			29,654
(Increase) / Decrease in Accounts Receivable		-			(79,920	)
(Increase) / Decrease in Inventory		-			(7,352	)
(Increase) / Decrease in Note Receivable		-			(179,730	)
(Increase) / Decrease in Note Payable		-			87,174
Increase / (Decrease) in Payroll Liability		37,500			1,644,279
Increase / (Decrease) in Accounts Payable		519			68,466
Net cash provided by (used in) operating activities		(59,011	)		(1,216,576	)
CASH FLOWS FROM INVESTING ACTIVITIES:
(Purchase)/Sale of Fixed Assets		-			(42,744	)
Net cash provided by (used in) investing activities		-			(42,744	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of Stock		-			971,306
Increase/(Decrease) in Short Term Notes Payable - Related Party		64,028			295,608
Net cash provided by (used in) financing activities		64,028			1,266,914
Net increase (decrease) in cash		5,016			7,593
Balance at beginning of Period		2,577			-
End of Period	$	7,593		$	7,593
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
SUPPLEMENTAL INFORMATION:
Interest Paid	$	5,991		$	-
Taxes Paid	$	-		$	11,323

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

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NOTE 1 -SUMMARY OF ACCOUNTING POLICIES

A summary of the significant accounting policies applied in the preparation of the accompanying consolidated financial statements as follows.

Business and Basis of Presentation - Para Mas was incorporated on June 6, 1994 as U.S. Medical Management, Inc., a subsidiary of Waterloo Wheels, Inc., a British Columbia company. On June 27, 1994, the shareholders of Waterloo Wheels exchanged all of their shares for shares in U.S. Medical Management and Waterloo Wheels was dissolved. The activities of Waterloo Wheels and U.S. Medical Management were confined to organizational matters and identifying business opportunities. They conducted no business. In June 1995, U.S. Medical Management acquired the business of Ken Venturi Golf Centers, Inc. and changed its name to Ken Venturi Golf, Inc. ("KVGI"). KVGI was listed on the OTC Bulletin Board and was engaged in franchising indoor golf training centers under a license from Ken Venturi, a noted golf professional. The business of KVGI did not succeed and the company ceased operations in May 1997. Upon ceasing operations, Para Mas attempted to locate and negotiate the acquisition of other business opportunities. On November 1, 2000, Para Mas entered into agreements that would lead to the acquisition of the business assets of International Bible Games Inc. and Destination T.B.G. Development & Marketing Corp. Though pursued over a period of time, Para Mas was ultimately unable to acquire these assets. On April 12, 2004, Para Mas acquired 100% of the issued and outstanding shares of Amerigroupmall, Inc., a Nevada corporation via a reverse merger and recapitalization.

Even though the Company has generated sales revenues, the Company has incurred substantial expenses and has sustained losses. Consequently, its operations are subject to all the risks inherent in the establishment of a new business enterprise. For the period from inception through March 31, 2005 the Company has an accumulated deficit of $3,424,666.

Amerigroupmall, Inc. ("Amerigroupmall") was incorporated on June 13, 2001 as a Nevada corporation. The initial Amerigroupmall concept was born in 1999 as a discount card that was sold as a fund-raiser for schools, clubs and non-profit organizations. Purchasers of the card could receive discounts one of two ways. First, it could be presented at some merchants for an immediate discount upon purchase of goods or services. Second, it could be used to purchase discount tickets to entertainment venues distributed by Amerigroupmall. This concept was changed in 2003, when Amerigroupmall decided to drop the fund raising model and sell the discount card directly to businesses for redistribution to their customers.

Mobilescan Inc. ("Mobilescan") was incorporated on September 27, 2001 as a Nevada corporation. Mobilescan, Inc. was a provider of CD Rom law libraries and custom Legal Forms and Billing Software. MobileScan was acquired by Para Mas in 2004 by virtue of the Amerigroupmall acquisition. All business operations within MobileScan have ceased.

Liquidity - As shown in the accompanying financial statements, the Company incurred a net loss of $97,417 during the period ended March 31, 2005. The Company's current liabilities exceeded its current assets by $1,940,811.

Income Taxes - Income taxes are provided based on the liability method for financial reporting purposes in accordance with the provisions of Statements of Financial Standards No. 109, "Accounting for Income Taxes". Under this method deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be removed or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statement of operations in the period that includes the enactment date.

The estimated net operating loss for the company, given the current situation is:

Accumulated deficit$(3,424,666)

Valuation allowance3,424,666

$  - -

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Management feels the Company will have a net operating loss carryover to be used for future years. Such losses may not be fully deductible due to the significant amounts of non-cash service costs.

Printing Company relationship - Itzyourmall is currently contracting all of its printing through Mikey's Print Shop. The company has a contract with Mikey's that pays Mikey's a base monthly fee of $2,500 a month. This base gives the company the prints, and it also includes all of the graphic design of the cards and the web malls. The base will give the company approximately 25,000 cards a month but does not include materials. Materials run approximately $0.15 per card. Materials include ink, teslin (the specially manufactured paper the company print on, for the cards), laminate, and stock paper. The associated printing costs are reflected in the financial statements as a cost of goods sold.

Net Loss Per Share - The Company has adopted Statement of Financial Accounting Standards No. 128, "Earnings Per Share," specifying the computation, presentation and disclosure requirements of earnings per share information. Basic earnings (loss) per share has been calculated based upon the weighted average number of common shares outstanding. Stock options and warrants will be excluded as common stock equivalents in the diluted earnings per share because they are either antidilutive, or their effect is not material.

Reclassifications - Certain reclassifications have been made in prior years' financial statements to conform to classifications in the current year.

Stock Based Compensation - In December 2002, the FASB issued Statement of Financial Accounting Standards No.148 ("SFAS No.148"),"Accounting for Stock-Based Compensation-Transition and Disclosure-an amendment of SFAS 123." This statement amends SFAS No. 123, "Accounting for Stock-Based Compensation," to provide alternative methods of transition for a voluntary charge to the fair value based method of accounting for stock-based employee compensation. In addition, this statement amends the disclosure requirements of SFAS No. 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. The Company has chosen to continue to account for stock-based compensation using the intrinsic value method prescribed in APB Opinion No. 25 and related interpretations. Accordingly, compensation expense for stock options is measured as the excess, if any, of the fair market value of the Company's stock at the date of the grant over the exercise price of the related option. The Company has adopted the annual disclosure provisions of SFAS No. 148 in its financial reports for the year ended December 31, 2003 and will adopt the interim disclosure provisions for its financial reports for the quarter ended December 31, 2004 and all subsequent periods.

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NOTE 2 - GOING CONCERN MATTERS

The accompanying statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the financial statements, from its inception the Company has incurred losses of $3,424,666. This factor among others may indicate that the Company will be unable to continue as a going concern for a reasonable period of time. The Company's existence is dependent upon management's ability to develop profitable operations and resolve it's Liquidity problems. The accompanying financial statements do not include any adjustments that might result should the Company be unable to continue as a going concern.

In order to improve the Company's liquidity, the Company is actively pursing additional equity financing through discussions with investment bankers and private investors. There can be no assurance the Company will be successful in its effort to secure additional equity financing.

The company’s expected cash flow needs over the next twelve months will be a minimum of $50,000 per month and could peak at $100,000 per month as sales volumes increase, as this would means increased costs in: production, customer service, marketing, and management. As of March 31, 2005, Paramas Internet, Inc. had cash on hand totaling $7,593. The company feels this is sufficient working capital to meet the day to day operational cash needs of Amerigroupmall for approximately 21 days.

To actively grow the business pursuant to its current business plan however, the Company needs $5,000,000 in operating capital for the next 12 months. The company hopes to raise this capital through a registered sale of common stock pursuant to a Form SB-2 registration statement. However, it cannot be certain as to whether the company will be successful in selling the offering.

NOTE 3 - STOCKHOLDERS' EQUITY

Beginning on or about January 24, 2003 and ending on or about November 8, 2003, Amerigroupmall raised approximately $648,826 from a total of 32 investors.

In April 2004, ParaMas completed a 10 for 1 reverse merger to bring the total issued and outstanding shares to 4,829,440. The company then issued 271,205,934 shares for the acquisition of Amerigroupmall. Concurrent with the latter issuance, the company issued 10,042,105 to various individuals to settle potential claims against the company. The issuance of the 10,042,105 shares has been recorded as an expense of $69,102, which values the stock at $0.00688 per share, or the equivalent value per share which was allocated to the purchase of Amerigroupmall on the same date.

As of March 31, 2005, the company has 500,000,000 shares authorized and 286,077,479 shares issued and outstanding.

There were no issuances and sales of stock during the three months ended March 31, 2005.

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

Background

Para Mas acquired Amerigroup, Inc. on or about April 12, 2004. Para Mas issued 271,205,934 shares of common stock in exchange for 100% of the issued and outstanding stock of Amerigroup. Following the acquisition, Amerigroup was a wholly owned subsidiary of Para Mas. The transaction was accounted for as a reverse merger and a recapitalization of Para Mas.

Prior to the acquisition, International Bible Games, Inc. was the majority shareholder of Para Mas and the International Bible Games’ shareholders arguably had personal claims against Para Mas as a result of a business transaction in 2001. In 2001, International Bible Games acquired 30 million shares of common stock of ParaMas. The shareholders of International Bible Games had been promised that these shares would be distributed to them on a pro rata basis. However, the shares never were distributed at that time and the International Bible Games shareholders were not able to participate in an active trading market of ParaMas shares that subsequently developed. This circumstance gave rise to potential claims against International Bible Games and ParaMas. On or about April 12, 2004, Para Mas issued 10,042,105 shares of common stock in exchange for a release of those claims against Para Mas. The class of persons to whom the shares were issued was all persons holding a potential claim against Para Mas. These potential claims were comprised of rights to receive shares of Para Mas and/or the right to receive money from Para Mas or one of its affiliates. The price per share implicit in that transaction was 25¢ per share. All claimants had been affiliated with Para Mas since approximately September 2000 and had potential claims against Para Mas since that time. The claimants were known to Para Mas and had a financial relationship with Para Mas since the year 2000. Para Mas met with the claimants individually and explained the option for settlement of the particular claimant’s claim. The compromise of each claim was negotiated individually in an individual manner. Each claimant entered into a claim release form in connection with the transaction. As a result, International Bible Games, once a shareholder of Para Mas is no longer affiliated with Para Mas other than by virtue of the fact that International Bible Games’ shareholders are also shareholders of Para Mas. The International Bible Games shareholders signed an Agreement and Release and Share Exchange Agreement in connection with the transaction.

Prior to that time, the active business operations of Para Mas had been limited for some time. The business operations of Amerigroup now constitute 100% of the business operations of Para Mas. This management's discussion will therefore focus on the business operations and the financial results of Amerigroup.

Marketing

Conceptually, the Itzyourmall loyalty-rewards card program came into being on February 26, 2003. Amerigroup spent that year developing the product, the web sites, the delivery systems and testing the marketing structure. Very little marketing was done during that year as it was devoted to research and development of the Itzyourmall concept. The following year, however, Amerigroup began to implement their marketing plan. The marketing has required a great deal of travel and promotion. We have been able to sell close to 10 different marketing territories, 15 units and hundreds of businesses. In order to market the Itzyourmall product quickly and as inexpensively as possible, we felt that our best course of action would be to sell marketing rights to territories and units. This way, we expected that we could have a sales force that would not require an overhead. Also, because these marketing rights sales people are vested with their own funds, we felt that they would be more likely to succeed.

Our marketing plan is based on the idea the people who pay for something are more likely to succeed at selling than a sales person who has a guaranteed base salary. We have divided the country up into Regions and then into Territories. Each Territory is then divided up into Units of 100,000 population centers. Each Unit will also have a minimum number of 1,000 businesses. The Region owner trains and supports his Territory owners and the Territory owner trains and supports his Unit owners. Each Unit owner is only expected to sell 25 businesses a co-brand package and 25 business listings. He can then sell 25 kiosk fixed ad sales and 25 kiosk screen ad sales. These kiosk ad sales will most likely be sold to the co-branders and business listings, since they are the ones participating in the Itzyourmall program. This means that the Unit owner only has to sell 5% of the businesses in his are to be successful. This is a very small market share, which we feel means that the likelihood of success will be very high for the Unit owner. If a Unit owner is successful under this formula, he will generate between $55,000.00 and $97,000.00. The differentiation is based on whether the Unit owner allows the businesses to pay a one-time cash price or 12 monthly payments calculated at a 12% apr.

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Fiscal Quarter Ended March 31, 2005

During the fiscal quarter ended March 31, 2005, ParaMas had net revenues of $13,153. These revenues were derived from fees obtained from co-branders entering our system. During the same period we incurred expenses totaling $104,155 giving us a loss from operations of $91,002.

Liquidity

Our expected cash flow needs over the next twelve months will be a minimum of $50,000.00 monthly and could peak at $100,000.00 monthly as sales volumes increase, since this means increased costs in: production, customer service, marketing, and management. When the Units have sold their 25 business quotas in the four ten state Regions, we believe we will easily be able to cover our cost of operations. Our expectations are that we will be able to sell twenty percent of the Territories in all four Regions over the next twelve months. We expect those Territories to sell twenty percent of their Units during that same period. Even though the Units agree to sell 25 businesses during that period as well, our projection is based upon them selling only five which we believe will be realized. Assuming we meet these levels, we would have annual gross revenue of $547,000.00, which would be close to covering our expenses for the year. Part of our marketing strategy includes Itzyourmall helping to “seed” an area by telemarketing to local businesses. These businesses are usually the high profile businesses (i.e., entertainment and amusement) that Itzyourmall does not charge to be a part of the program. They are brought on to help enhance the value of the Itzyourmall card in an area. As of March 31, 2005, Amerigroup had cash on hand totaling $7,593. This is sufficient working capital to meet the day to day operational cash needs of Amerigroup for approximately 21 days.

To actively grow the business pursuant to its current business plan however, Amerigroup needs $5,000,000 in operating capital for the next 12 months. We plan on raising this capital through a registered sale of our common stock pursuant to this registration statement. However, it cannot be certain as to whether we will be successful in selling the offering.

Trends

One of the trends that we have seen in the market is the fact that businesses are all starting to consider the idea of loyalty cards. Most of the businesses we contact all state that they were already considering making a loyalty card for their business. We feel that the grocery store industry started this trend and has helped it to grow. Consequently, Itzyourmall is an unintended beneficiary of the millions of dollars the grocery store industry has spent in educating the masses on the value of loyalty-rewards cards. Another trend we see in the market is the move towards public internet access terminals, or Kiosks as we like to call them. Kiosks are showing up in airport terminals and shopping malls all across the country. This trend is again a benefit for us as we begin placing our Kiosks throughout the country.

Forward-Looking Statements

Many statements made in this report are forward-looking statements that are not based on historical facts. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. The forward-looking statements made in this report relate only to events as of the date on which the statements are made.

ITEM 3 - CONTROLS AND PROCEDURES

We have evaluated, with the participation of our Chief Executive Officer and Principal Financial Officer, the effectiveness of our disclosure controls and procedures as of March 31, 2005. Based on this evaluation, our Chief Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures are effective to ensure that we record, process, summarize, and report information required to be disclosed by us in our quarterly reports filed under the Securities Exchange Act within the time periods specified by the Securities and Exchange Commission’s rules and forms. During the quarterly period covered by this report, there were no changes in our internal controls over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

The Company is not a party to any pending legal proceedings other than in the normal course of business nor is any of its property subject to pending legal proceedings material to the fiscal well-being of the Company.

Item 2. Changes in Securities and Use of Proceeds.

During the first quarter of 2005, Registrant has not sold securities without registration under the Securities Act of 1933.

Item 3. Defaults Upon Senior Securities.

None.

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

None.

Item 5. Other Information.

None.

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

(a) Exhibits

EXHIBIT NUMBER	DESCRIPTION
31.1	Certification of Chief Executive Officer and Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended
32.1	Certification of Chief Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002.*

_______

(b) Reports on Form 8-K.

None

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SIGNATURES

In accordance with the requirements of the Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date:June 20, 2005

PARA MAS INTERNET, INC.

By: /s/ Gary Whiting 

Name:Gary Whiting

Title:Chief Executive Officer

 Principal Financial Officer

 Principal Accounting Officer

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