U.S. SECURITIES AND EXCHANGE COMISSION Washington, D.C. 20549FORM 10QSB QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE For the period ended December 31, 2000 Commission File Number 000-30645 PARA MAS INTERNET, INC. (Exact name of small business issuer as specified in its charter) NEVADA 59-3383240 (State of Incorporation) IRS Employer Identification No.)7 East Redwood Street 5th Floor, Baltimore, Maryland 21202 (Address of Principal Executive Offices) Registrant's telephone number, including area codes: (410) 779-1006 Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No - ----- ----- As of December 31, 2000, the registrant had outstanding 44,127,570 shares of its Common Stock, $.001 par value.PARA MAS INTERNET, INC. FORM 10-QSB REPORT INDEX PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS (UNAUDITED) Consolidated Balance Sheet as of December 31, 2000 Consolidated Statements of Losses for the Three Months And Six Months Ended December 31, 2000 and 1999 Consolidated Statements of Cash Flows for the Six Months Ended December 31, 2000 and 1999 Notes to Unaudited Consolidated Financial Statements December 31, 2000 ITEM 2. MANAGEMENT'S PLAN OF OPERATION PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS ITEM 5. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)PARA MAS INTERNET, INC. (A DEVELOPMENT STAGE COMPANY) CONSOLIDATED BALANCE SHEET DECEMBER 31, 2000 (UNAUDITED) CURRENT ASSETS: Cash and cash equivalents $ 15,578 Accounts receivable, net 15,145 Inventories, net 44,419 Total current assets 75,142 Property and equipment, net 4,720 $79,862 ======= LIABILITIES AND DEFICIENCY IN STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable and accrued expenses $ 175,533 Note payable- current portion 578,075 Total current liabilities 753,608 Convertible debentures, long term 304,358 Capitalized lease obligations, long term 1,128 DEFICIENCY IN STOCKHOLDERS' EQUITY (Note B): Preferred stock, par value, $.001 per share; authorized 10,000,000 shares; 70,500 shares issued at December 31, 2000 70,500 Common stock, par value, $ .001 per share; authorized, 100,000,000 shares; 44,127,570 shares issued at December 31, 2000 44,128 Additional paid in capital 774,164 Deficit accumulated during development stage (1,868,023) Deficiency in stockholders' equity (979,231) $ 79,863 The accompanying notes are an integral part of these statements.PARA MAS INTERNET, INC. (A DEVELOPMENT STAGE COMPANY) CONSOLIDATED STATEMENT OF LOSSES (UNAUDITED) For the For the For the Period Three Three For the For the from Inception Months Months Six Months Six Months (April 11, Ended Ended Ended Ended 1997) t0 December December December December December 31, 31, 2000 31, 2000 31, 2000 31, 2000 2000 Revenues: $ - $ - $- $ - $ 13,126 Costs and expenses: General and Administrative 482,866 34,711 626,850 59,476 826,019 Research and Development - - 70,575 2,036 1,051,374 Interest 946 2,656 1,209 3,756 3,756 483,812 37,367 698,634 65,268 1,881,149 Net loss ( 483,812) (37,367) (698,634) (65,268) (1,868,023) Preferred stock Dividends 1,050 - 2,100 - 1,050 Net loss available to common shareholders (484,862) $(37,367) $(700,734) $(65,268)$ (1,869,073) Loss per share: Basic and Diluted $ (.01) $ (.00) $ (.02) $ (.00) $ (.04) Basic and diluted* 44,127,695 44,127,695 44,127,695 44,127,569 4,127,569 *Restated to reflect recapitalization in November 2000 The accompanying notes are an integral part of these statements.PARA MAS INTERNET, INC. (A DEVELOPMENT STAGE COMPANY) CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) For the Period For the For the from Inception Six Months Six Months (April 11, Ended Ended 1997) t0 December December December 31, 31,2000 31, 2000 2000 Cash flows from operating activities: Net loss $(700,734) $ (65,268) $(1,868,023) Adjustments to reconcile net loss to net cash provided by operating activities: Acquisition costs and other non-cash adjustments - - 319,735 Increase (decrease) in: Changes in non-cash working capital 14,409 (2,405) 115,969 Net cash provided (used) by operating activities (686,325) (67,673) (1,432,319) Cash flows (used in) from investing activities: - - Purchase of equipment, net (2,338) (1,470) (6,974) Net cash used in investing Activities (2,338) (1,470) (6,974) Cash flows from financing activities: Proceeds from the sale of common stock, net of costs 268,481 66,193 595,095 Proceeds from loans ,net 430,000 - 859,776 Net cash flows from financing Activates 698,481 66,193 1,454,871 Net decrease in cash and Equivalents 9,818 (2,950) 15,578 Cash - beginning of period 5,760 4,544 - Cash - end of period $ 15,578 $ 1,594 $ 15,578 Supplemental Disclosure of Cash Flow Information: Cash paid during the period for interest $ - $ - $ - Cash paid during the period for taxes - - - Preferred stock dividends paid in additional preferred shares 2,100 - 2,100 Common stock issued in exchange for services - - 27,782 Common stock issued in connection with acquisition - - 121,270 The accompanying notes are an integral part of these statements.PARA MAS INTERNET, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2000 (UNAUDITED) NOTE A - SUMMARY OF ACCOUNTING POLICIES General The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-QSB, and therefore, do not include all the information necessary for a fair presentation of financial position, results of operations and cash flows in conformity with generally accepted accounting principles. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results from developmental stage operations for the six-month period ended December 31, 2000 are not necessarily indicative of the results that may be expected for the year ended June 30, 2001. The unaudited condensed consolidated financial statements should be read in conjunction with the International Bible Games, Inc. October 31, 2000 financial statements and footnotes thereto included in the Company's SEC Form 8-K dated November 6, 2000. NOTE B-BUSINESS COMBINATION On November 1, 2000, International Bible Games, Inc. ("IBG") completed an Agreement of Plan and Reorganization ("Agreement") with the Registrant's principal shareholder, Transglobal Financial Corporation ("TGF")in a transaction accounted for using the purchase method of accounting. Effective with the Agreement, IBG acquired for $ 430,000, 30,000,000 of the 44,127,650 shares of the Registrant's common stock outstanding from TGF and exchanged those shares for all of the issued and outstanding shares of IBG's common stock. IBG recoded the carryover historical basis of the net tangible assets acquired, which did not differ materially from their fair value. From the Registrant's inception, until the date of the merger, the Registrant was an inactive corporation with no significant assets and liabilities. As a result of the acquisition, there was a change in control of the public entity. Subsequent to the date of the merger, IBG became a wholly owned subsidiary of the Registrant. The results of operations subsequent to the date of acquisition are included in the Company's consolidated statement of losses. Such a business combination has been accounted for as a recapitalization of IBG. In accordance with Accounting Principles Opinion No. 16, IBG is the acquiring entity. As a result, historical financial information for periods prior to the date of the transaction is that of IBG. However, the capital structure for all periods presented has been restated to reflect the capital structure of Para Mas Internet, Inc. as the legal acquirer.PARA MAS INTERNET, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2000 (UNAUDITED) NOTE B-BUSINESS COMBINATION (Continued) The total purchase price and carrying value of net assets acquired of Para Mas Internet was $ 1. The net assets acquired were as follows: Net assets $ 1 Accumulated deficit 17,169 Issuance of preferred stock 68,400 Issuance of common stock 44,128 Cash paid for stock 430,000 $ 559,698 In accordance with Statement of Position No. 98-5, the Company expensed, as organization costs, in the three months ended December 31, 2000, $ 430,000, which represents the purchase of the 30,000,000 shares of the Company's stock from TGF. NOTE C- BASIS OF PRESENTATION International Bible Games, Inc., a wholly-owned subsidiary of Para Mas Internet, Inc., was formed on April 11, 1997 under the laws of the Province of British Columbia. International Bible Games, Inc. is a development stage enterprise, as defined by Statement of Financial Accounting Standards No. 7 ("SFAS No. 7") and is seeking to develop, produce and market family-oriented and educational Christian Bible based products and services. From its inception through the date of these financial statements International Bible Games, Inc. has not recognized significant revenues and has incurred significant operating expenses. The consolidated financial statements include the accounts of the Company, and its wholly owned subsidiary, International Bible Games, Inc. Significant intercompany transactions have been eliminated in consolidation. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS The following discussion should be read in conjunction with the Company's Consolidated Financial Statements and Notes thereto, included elsewhere within this Report. Description of the Company On November 1, 2000, the Company's principal shareholder sold its controlling interest in the Company to International Bible Games, Inc., a corporation formed under the laws of the Province of British Columbia. The Company is seeking to develop, source and distribute Christian and family oriented products and services. The transaction is more fully described in a Current Report filed on November 6, 2000 on Form 8-K dated November 1, 2000. Forward Looking Statements This Form 10-QSB contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements included herein that address activities, events or developments that the Company expects, believes, estimates, plans, intends, projects or anticipates will or may occur in the future, are forward-looking statements. Actual events may differ materially from those anticipated in the forward-looking statements. Important risks that may cause such a difference include: general domestic and international economic business conditions, increased competition in the Company's markets and products. Other factors may include, availability and terms of capital, and/or increases in operating and supply costs. Market acceptance of existing and new products, rapid technological changes, availability of qualified personnel also could be factors. Changes in the Corporation's business strategies and development plans and changes in government regulation could adversely affect the Company. Although the Company believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate. There can be no assurance that the forward-looking statements included in this filing will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Corporation that the objectives and expectations of the Company would be achieved. Revenues The Company generated no significant revenues from operations form its inception. The Company believes it will begin earning revenues from operations within the next twelve months as it transitions from a development stage company to that of an active growth and acquisition stage company. Costs and expenses The Company's costs and expenses increased from $ 37,367 during the quarter ended December 31, 1999 to $ 483,812 during the second quarter of fiscal 2001. Selling, general and administrative expenses increased $ 448,155. In addition to incurring costs associated with implementing the Company's business plan (e.g., travel, transportation, professional fees, and consulting fees) during the three months ended December 31, 2000, the Company incurred a cost of $ 430,000 in connection with the recapitalization of the Company through its merger and acquisition with Para Mas Internet, Inc. in November 2000. Six Months Ended December 31, 2000 and 1999 Revenues The Company generated no significant revenues from operations form its inception. The Company believes it will begin earning revenues from operations within the next twelve months as it transitions from a development stage company to that of an active growth and acquisition stage company. Costs and Expenses The Company's costs and expenses increased from $ 65,268 during the six months ended December 31, 1999 to $ 698,634 during the first six months of fiscal 2001. Selling, general and administrative expenses increased $ 567,374. In addition to incurring costs associated with implementing the Company's business plan (e.g., travel, transportation, professional fees, and consulting fees) during the six months ended December 31, 2000, the Company incurred a cost of $ 430,000 in connection with the recapitalization of the Company through its merger and acquisition with Para Mas Internet, Inc. in November 2000. LIQUIDITY AND CAPITAL RESOURCES As of December 31, 2000, the Company had a deficit in working capital of $ 678,466.The deficit in working capital was substantially due to the increase in obligations to vendors at December 31, 2000. As a result of the Company's operating loss of $ 700,734 during the six months ended December 31, 2000, the Company generated a cash flow deficit of $ 686,325 from operating activities, adjusted principally for an increase in accounts payable, accrued expenses and other current liabilities of $ 14,409. The Company invested $ 2,338 in furniture, equipment and, software. The Company met its cash requirements during the first six months of 2001 through the proceeds of a $ 430,000 loan and the sale of $ 268,481 of the Company's stock, net of costs. While the Company has raised capital to meet its working capital requirements, additional financing is required in order to complete the acquisition of related businesses. The Company is seeking financing in the form of equity and debt in order to provide for these acquisitions and for working capital. There are no assurances the Company will be successful in raising the funds required. In prior periods, the Company has borrowed funds from significant shareholders of the Company in the past to satisfy certain obligations. As the Company continues to expand, the Company will incur additional costs for personnel. In order for the Company to attract and retain quality personnel, the Company anticipates it will continue to offer competitive salaries, issue common stock to consultants and employees, and grant Company stock options to current and future employees. The effect of inflation on the Company's revenue and operating results was not significant The Company's operations are located primarily in North America and there are no seasonal aspects that would have a material effect on the Company's financial condition or results of operations. Trends, Risks and Uncertainties The Company has sought to identify what it believes to be the most significant risks to its business, but cannot predict whether or to what extent any of such risks may be realized nor can there be any assurances that the Company has identified all possible risks that might arise. Investors should carefully consider all of such risk factors before making an investment decision with respect to the Company's stock. Limited operating history; Anticipated Losses; Uncertainly of Future Results. Para Mas, Inc. has only a limited operating history upon which an evaluation of the Company and its prospects can be based. The Company's prospects must be evaluated particularly in light of the uncertainties relating to the new and evolving distribution methods with which the Company intends to operate and the acceptance of the Company's business model. The Company will be incurring costs to develop, introduce and enhance its interactive website, to establish marketing relationships, to acquire and develop products that will compliment each other and to build an administrative organization. To the extent that such expenses are not subsequently followed by commensurate revenues, the Company's business, results of operations and financial condition will be materially adversely affected. There can be no assurance that the Company will be able to generate sufficient revenues from the sale of their services and products. If cash generated by operations is insufficient to satisfy the Company's liquidity requirements, the Company may be required to sell additional equity or debt securities. The sale of additional equity or convertible debt securities would result in additional dilution to the Company's stockholders. Potential fluctuations in quarterly operating results The Company's quarterly operating results may fluctuate significantly in the future as a result of a variety of factors, most of which are outside the Company's control, including: the level of use of the Internet; the demand for Christian-based products and services; seasonal trends in both Internet use, the amount and timing of capital expenditures and other costs relating to the expansion of the Company's Internet operations; price competition or pricing changes in the industry; technical difficulties or system downtime; general economic conditions, and economic conditions specific to the Internet and Christian-based Industry. The Company's quarterly results may also be significantly impacted by the impact of the accounting treatment of acquisitions, financing transactions or other matters. Particularly at the Company's early stage of development, such accounting treatment can have a material impact on the results for any quarter. Due to the foregoing factors, among others, it is likely that the Company's operating results will fall below the expectations of the Company or investors in some future quarter. Limited public market, possible volatility of share price The Company's Common Stock is currently quoted on the NASD OTC Bulletin Board under the ticker symbol PMII.OB. As of December 31, 2000, there were approximately 44,127,570 shares of Common Stock outstanding. There can be no assurance that a trading market will be sustained in the future. Factors such as, but not limited to, technological innovations, new products, acquisitions or strategic alliances entered into by the Company or its competitors, failure to meet security analysts' expectations, government regulatory action, patent or proprietary rights developments, and market conditions for technology stocks in general could have a material effect on the volatility of the Company's stock price. PART II. OTHER INFORMATION. ITEM 1. LEGAL PROCEEDINGS. None. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS (a) None. (b) None. (c) None. 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) Furnish the exhibits required by Item 601 of Regulation S-B. 27.1 Financial Data Schedule (b) Reports on Form 8-K. On November 6, 2000, the Company filed a Current Report on Form 8-K dated November 1, 2000, reporting under Item 1, a change in control of the Registrant; Item 2,the acquisition of the Company by International Bible Games, Inc. and the appointment of new officers and Directors; Item 6, the resignation of the Registrant's Directors and Officer; and Item 7, financial statements of the International Bible Games, Inc. SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Para Mas Internet, Inc. By:/s/ Montel R. Hill ------------------------ Title: President Date: February 20, 2001
