SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2003
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to ____________
Commission File No. 000-30645
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PARA MAS INTERNET, INC.
-----------------------
(Exact name of Registrant as specified in its charter)
NEVADA 59-3383240
- ---------------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1337 S. Gilbert Road, Suite 104, Mesa, Arizona 85204
-----------------------------------------------------
(Address of principal executive offices)
(480) 892-2189
-----------------------------
(Issuer's telephone number)
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 ( ) No ( X ).
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the last practicable date.
Class Outstanding as of September 17, 2004
----- -----------------------------------------
$0.001 par value Common Stock 281,248,039
Transitional Small Business Disclosure Format (check one): Yes [ ] No [ X ]
-1-
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The accompanying unaudited financial statements have been prepared in accordance
with the instructions to Form 10-QSB and Item 310 (b) of Regulation S-B, and,
therefore, do not include all information and footnotes necessary for a complete
presentation of financial position, results of operations, cash flows, and
stockholders' equity in conformity with generally accepted accounting
principles. In the opinion of management, all adjustments considered necessary
for a fair presentation of the results of operations and financial position have
been included and all such adjustments are of a normal recurring nature.
Operating results for the three months ended September 30, 2003 are not
necessarily indicative of the results that can be expected for the year ending
June 30, 2004.
-2-
PARA MAS INTERNET, INC.
BALANCE SHEET
AS OF SEPTEMBER 30, 2003
(UNAUDITED)
ASSETS
(Unaudited) (Audited)
9/30/2003 6/30/2003
------------ ------------
CURRENT ASSETS
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . $ - $ -
----------- -----------
Total current assets . . . . . . . . . . . . . . . . . . - -
----------- -----------
PROPERTY AND EQUIPMENT, net of accumulated depreciation. . . . - -
OTHER ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . - -
----------- -----------
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . $ - $ -
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable. . . . . . . . . . . . . . . . . . . . . . $ - $ -
Due to related parties. . . . . . . . . . . . . . . . . . . - -
Notes payable . . . . . . . . . . . . . . . . . . . . . . . 15,000 15,000
Notes payable - related party . . . . . . . . . . . . . . . - -
Payroll liability . . . . . . . . . . . . . . . . . . . . . - -
Accrued expenses (Notes C and H) . . . . . . . . . . . . . . 5,319 5,319
Preferred stock dividends payable (Notes B and H). . . . . . 21,000 21,000
Other current liabilities . . . . . . . . . . . . . . . . . - -
----------- -----------
Total current liabilities. . . . . . . . . . . . . . . . 41,319 41,319
------------ ------------
TOTAL LIABILITIES. . . . . . . . . . . . . . . . . . . . . . . 41,319 41,319
----------- -----------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $0.001 par value, 100,000,000 shares
authorized, 48,294,395 shares issued and outstanding as of
September 30, 2003 . . . . . . . . . . . . . . . . . . . . . 48,295 48,295
Additional paid in capital . . . . . . . . . . . . . . . . . . 1,817,932 1,817,932
Preferred stock,authorized 10,000,000 shares,
60,000 shares issued (Notes B and H) . . . . . . . . . . . . 60,000 60,000
no shares issued and outstanding as of December 31, 2001 . . - -
Additional paid in capital - preferred stock . . . . . . . . . - -
Subscription receivable. . . . . . . . . . . . . . . . . . . . - -
Accumulated deficit. . . . . . . . . . . . . . . . . . . . . . (1,967,546) (1,967,546)
----------- -----------
Total stockholders' equity (deficit) . . . . . . . . . . (41,319) (41,319)
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY . . . . . . . . . . $ - -
=========== ===========
The accompanying notes to financial statements should be read in
conjunction with these Balance Sheets.
-3-
PARA MAS INTERNET, INC.
STATEMENTS OF INCOME AND ACCUMULATED DEFICIT
FOR THREE MONTHS ENDED
SEPTEMBER 30, 2003
(UNAUDITED)
(Unaudited) (Audited)
------------------- ---------------
July 1, 2003 July 1, 2002
to to
September 30, 2003 June 30, 2003
------------------- ---------------
REVENUES . . . . . . . . . . . . . . . . . . . - $ -
COST OF REVENUES . . . . . . . . . . . . . . . - -
------------------- ---------------
GROSS PROFIT (LOSS). . . . . . . . . . . . . . - -
------------------- ---------------
EXPENSES:
General and administrative. . . . . . . . . - -
Depreciation. . . . . . . . . . . . . . . . - -
Professional fees . . . . . . . . . . . . . - -
Non-cash stock compensation . . . . . . . . - -
------------------- ---------------
Total expenses . . . . . . . . . . . . . - -
------------------- ---------------
Operating income (loss). . . . . . . . . . . . - -
------------------- ---------------
OTHER INCOME (EXPENSE)
Other income. . . . . . . . . . . . . . . . - -
Equity-based compensation. . . . . . . . . . - 293,750
Consulting fees. . . . . . . . . . . . . . . - 125,000
Other expenses. . . . . . . . . . . . . . .
------------------- ---------------
Total other income (expense) . . . . . . - 419,800
------------------- ---------------
LOSS FROM OPERATIONS BEFORE AND
PREFERRED STOCK DIVIDENDS. . . . . . . . . . . - (419,800)
PROVISION FOR INCOME (TAX) BENEFIT . . . . . . - -
------------------- ---------------
NET INCOME (LOSS). . . . . . . . . . . . . . . - 419,800
PREFERRED STOCK DIVIDENDS (NOTES B
AND H) . . . . . . . . . . . . . . . . . . . . - 4,200
------------------- ---------------
NET LOSS AVAILABALE TO COMMON
SHAREHOLDERS . . . . . . . . . . . . . . . . . - (424,000)
=================== ===============
LOSS PER SHARE BASIC AND DILUTED . . . . . . . - (.01)
=================== ===============
ACCUMULATED DEFICIT, beginning of period . . . - -
------------------- ---------------
ACCUMULATED DEFICIT, end of period . . . . . . - 424,000
=================== ===============
PER SHARE INFORMATION:
Basic and dilulted Weighted average Number of
Shares Outstanding . . . . . . . . . . . . . . - 48,120,782
=================== ===============
The accompanying notes to financial statements should be read in
conjunction with these Statements of Income and Accumulated Deficit.
-4-
PARA MAS INTERNET, INC.
STATEMENTS OF CASH FLOWS
FOR THREE MONTHS ENDED
SEPTEMBER 30, 2003
(UNAUDITED)
Three Months Twelve Months
Ended Ended
9/30/2003 6/30/2003
------------- ---------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income / (Loss) from Operations . . . . . . . . . $ - $ (1,050)
Adjustments to reconcile net income
to net cash provided
Common stock options issued in exchange for services
rendered . . . . . . . . . . . . . . . . . . . . . . - -
Change in assets and liabilities:
Increase (decrease) in accounts payable and accured
liabilities. . . . . . . . . . . . . . . . . . . . . - 1,050
Depreciation Expense. . . . . . . . . . . . . . . . . - -
------------- ---------------
Net cash provided by (used in) operating activities - -
------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES: . . . . . . . . . $ - -
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds of sale of common stock, net . . . . . . . . $ - $ -
------------- ---------------
Net Cash provided by (used in) financing activities . - -
------------- ---------------
Net increase (decrease) in cash . . . . . . . . . . . . - -
Balance at beginning of Period . . . . . . . . . . . . - -
------------- ---------------
End of Period . . . . . . . . . . . . . . . . . . . . . $ - $ -
============= ===============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
Cash paid during the year for interest. . . . . . . . $ - $ -
============= ===============
Cash paid during the year for taxes . . . . . . . . . $ - $ -
============= ===============
Preferred stock dividends payable . . . . . . . . . . $ - $ 4,200
============= ===============
Stock options issued in exchnage for services . . . . $ - $ -
============= ===============
The accompanying notes to financial statements should be read in
conjunction with these Statements of Cash Flows.
-5-
PARA MAS INTERNET, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
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 Internet, Inc. ("Company" or "Para
Mas") was incorporated under the laws of the State of Nevada on June 6, 1994 as
U.S. Medical Management, Inc., a wholly owned subsidiary of Waterloo Wheels,
Inc. The Company is inactive with no significant operations and is seeking to
merge or acquire an interest in business opportunities. Waterloo Wheels, Inc.
was incorporated on June 2, 1986 under the laws of British Columbia. In June
1995, the shareholders of Waterloo Wheels, Inc. exchanged all their outstanding
stock for shares of the Company on a share for share basis. In June 1995, the
Company completed a merger with Ken Venturi Golf Training Center, Inc.
Effective with the merger, all previously outstanding common stock of Ken
Venturi Golf Center, Inc. was exchanged for 4,000,000 shares of the Company's
common stock. Immediately following the merger, the Company changed its name to
Ken Venturi Golf, Inc.
In November 1997, the Company changed its name to Transcontinental Waste,
Industries. In April 1999, the Company changed its name to Financial Depot
Online, Inc. In August 1999 the Company changed its name to Para Mas Internet,
Inc.
The Company has generated no sales revenues, has incurred 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 September 30, 2003 the Company has an accumulated deficit of
$1,967,546.
Liquidity - The Company is inactive with no significant operations and is
seeking to merge or acquire an interest in business opportunities. To date, the
Company has incurred expenses and has sustained losses. As shown in the
accompanying financial statements, the Company incurred a net loss of $ 0
during the period ended September 30, 2003. The Company's current liabilities
exceeded its current assets by $41,319.
Advertising - The Company will recognize advertising expenses in accordance with
SOP 93-7 "Reporting on Advertising Costs." The Company did not incur advertising
costs during the period ending September 30, 2003.
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.
Cash Equivalents - For purposes of the Statements of Cash Flows, the Company
considers all highly liquid debt instruments purchased with a maturity date of
three months or less to be cash equivalents.
Property and Equipment - For financial statement purposes, property and
equipment will be depreciated using straight-line method over their estimated
useful lives (five years for furniture, fixtures and equipment). The
straight-line method of depreciation is also used for tax purposes.
Concentrations of Credit Risk - Financial instruments and related items, which
potentially subject the Company to concentrations of credit risk, consist
primarily of cash, cash equivalents and trade receivables. The Company places
its cash and temporary cash investments with high credit quality institutions.
At times, such investments may be in excess of the FDIC insurance limit.
-6-
PARA MAS INTERNET, INC.
A DEVELOPMENT STAGE COMPANY
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
Use of Estimates-The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect certain reported amount and disclosures.
Accordingly actual results could differ from those estimates.
Long-Lived Assets - The Company has adopted Statement of Financial Accounting
Standards No. 144 (SFAS 144). The Statement requires that long-lived assets and
certain identifiable intangibles held and used by the Company be reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Events relating to
recoverability may include significant unfavorable changes in business
conditions, recurring losses, or a forecasted inability to achieve break-even
operating results over an extended period. The Company evaluates the
recoverability of long-lived assets based upon forecasted undercounted cash
flows. Should an impairment in value be indicated, the carrying value of
intangible assets will be adjusted, based on estimates of future discounted cash
flows resulting from the use and ultimate disposition of the asset. SFAS No.
144 also requires assets to be disposed of be reported at the lower of the
carrying amount or the fair value less costs to sell.
ComprehensiveIncome - The Company does not have any items of comprehensive
income in any of the periods presented.
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.
Fair Value of Financial Instruments - The carrying values of cash and cash
equivalents, accounts receivable, accounts payable and accrued expenses
approximate fair value due to the relatively short maturity of these instruments
Segment Information - The Company adopted Statement of Financial Accounting
Standards No. 131, Disclosures about Segments of an Enterprise and Related
Information ("SFAS 131") in the year ended December 31, 1998. SAFAS establishes
standards for reporting information regarding operating segments in annual
financial statements and requires selected information for those segments to
be presented in interim financial reports issued to stockholders. SFAS 131
also establishes standards for related disclosures about products and
services and geographic areas. Operating segments are identified as components
of an enterprise about which separate discrete financial information is
available for evaluation by the chief operating decision maker, or decision
making group, in making decisions how to allocate resources and assess
performance. The information disclosed herein, materially represents all of the
financial information related to the Company's principal operating segment.
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
-7-
PARA MAS INTERNET, INC.
A DEVELOPMENT STAGE COMPANY
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
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 June 30, 2003 and will adopt the interim disclosure provisions for its
financial reports for the quarter ended September 30, 2003.
Foreign Currency Translation - The Company translates the foreign currency
financial statements of its Canadian subsidiary in accordance with the
requirements of Statement of Financial Accounting Standards No. 52, "Foreign
Currency Translation." Assets and liabilities are translated at current
exchange rates, and related revenue and expenses are translated at average
exchange rates in effect during the period. Resulting translation adjustments
are recorded as a separate component in stockholders' equity. Foreign currency
transaction gains and losses are included in the statement of income.
New Accounting Pronouncements - In July 2001, the Financial Accounting Standards
Board (FASB) issued Statement of Financial Accounting Standards No.141, Business
Combinations" (SFAS No. 141), and Statement of Financial Accounting Standards
No. 142, "Goodwill and Other Intangible Assets" (SFAS No. 142). The FASB also
issued Statement of Financial Accounting Standards No. 143, "Accounting for
Obligations Associated with the Retirement of Long-Lived Assets" (SFAS No.143),
and Statement of Financial Accounting Standards No. 144, "Accounting for
the Impairment or Disposal of Long-Lived Assets"(SFAS No. 144) in August and
October 2001, respectively.
SFAS No. 141 requires the purchase method of accounting for business
combinations initiated after June 30, 2001 and eliminates the
pooling-of-interest method. The adoption of SFAS No. 141 had no material impact
on the Company's consolidated financial statements.
Effective January 1, 2002, the Company adopted SFAS No. 142. Under the new
rules, the Company will no longer amortize goodwill and other intangible assets
with indefinite lives, but such assets will be subject to periodic testing for
impairment. On an annual basis, and when there is reason to suspect that their
values have been diminished or impaired, these assets must be tested for
impairment, and write-downs to be included in results from operations may be
necessary. SFAS No.142 also requires the Company to complete a transitional
goodwill impairment test six months from the date of adoption.
2. CAPITAL STOCK
In November, 1997, the Company approved, by unanimous consent of its Board of
Directors, to amend the Company's articles of incorporation to increase the
number of shares of common stock, par value $.001 per share from 25,000,000
shares to 100,000,000 shares and to create 10,000,000 shares of preferred stock,
par value $.001 per share.
In May 1998, the Company issued 60,000 shares of Series B 7% Cumulative
Redeemable Convertible Preferred Stock ("Preferred Shares") in exchange for
legal services rendered to the Company. Holders of the Preferred Shares are
entitled to receive cumulative cash dividends at the annual rate of 7% per
annum, or $.07 per share, payable quarterly. The dividends may be payable in
cash or through a dividend of additional shares of Preferred Shares. The Company
has accrued the unpaid $ 4,200 Series B Preferred Stock dividend to the
holders of the Preferred Shares during the period ended September 30, 2003.
The aggregate unpaid Series B Preferred Stock dividends at September 30, 2003
is $21,000 (see Note 9).
-8-
PARA MAS INTERNET, INC.
A DEVELOPMENT STAGE COMPANY
NOTES TO FINANCIAL STATEMENTS
2. CAPITAL STOCK (CONTINUED)
The Preferred Shares rank senior to the common stock. The Preferred Shares have
a liquidation preference of $1.00 per share plus any and all declared and unpaid
dividends.
The Preferred Shares are convertible, in whole or in part, at the option of the
holders thereof, into shares of common stock at amount equal to the Company's
average closing bid price of the common stock for thirty days immediately
preceding the conversion divided by the liquidation preference of $1.00 per
share.
The Company may, at its option, convert the Preferred Shares into the Company's
common stock by dividing the average closing price of the Company's common stock
over a twenty (20) day period by the liquidation preference of $1.00 per share.
In order to exercise this option, the average price of the Company's common
stock must be at least $1.50 per share.
In July 2001, the Company issued a total of 4,166,667 shares of common stock in
exchange for exercised options with an exercise price of $.03 per share (see
Note 3).
3. STOCK OPTIONS
The following table summarizes the changes in options outstanding and the
related prices for the shares of the Company's common stock issued to the
Company consultants. These options were granted in lieu of cash compensation for
services performed.
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
------------------- -------------------
Weighted Weighted
Weighted Average Average Average
Exercise Number Remaining Contractual Exercise Number Exercise
- ----------------- ------------ ---------------------- -------- ----------- --------
Prices. . . . . . Outstanding Life (Years) Price Exercisable Price
- ----------------- ------------ ---------------------- -------- ----------- --------
$ $
Transactions involving options issued to non-employees are summarized as
follows:
Weighted Average
Number of Shares Price Per Share
----------------- ----------------
Outstanding at July 1, 2001. 0 $ 0.00
Granted . . . . . . . . . 4,166,667 0.03
Exercised . . . . . . . . (4,166,667) 0.03
Canceled or expired . . . 0 0.00
- ---------------------------- ----------------- ----------------
Outstanding June 30, 2002. . 0 0.00
Granted. . . . . . . . . 0 0.00
Exercised. . . . . . . . 0 0.00
Canceled or expired. . . 0 0.00
- ---------------------------- ----------------- ----------------
Outstanding at June 30, 2003 0 0.00
- ---------------------------- ----------------- ----------------
The estimated value of the options granted to consultants was determined using
the Black-Scholes option pricing model and the following assumptions:
contractual term of 3.3 months, a risk free interest rate of 4.0 %, a dividend
yield of 0% and volatility of 50%. The amount of the expense charged to
operations in connection with granting the options was $ 293,750 during 2002.
-9-
PARA MAS INTERNET, INC.
A DEVELOPMENT STAGE COMPANY
NOTES TO FINANCIAL STATEMENTS
4. NOTES PAYABLE
Notes payable consist of the following as of September 30, 2003:
7% Note payable; unsecured and in default $ 15,000
=========
Accrued and unpaid interest in connection with the note payable is $5,319 at
September 30, 2003 (see Note 9).
5. INCOME TAXES
The Company has adopted Financial Accounting Standard number 109, which requires
the recognition of deferred tax liabilities and assets for the expected future
tax consequences of events that have been included in the financial statement or
tax returns. Under this method, deferred tax liabilities and assets are
determined based on the difference between financial statements and tax basis of
assets and liabilities using enacted tax rates in effect for the year in which
the differences are expected to reverse. Temporary differences between taxable
income reported for financial reporting purposes and income tax purposes are
insignificant.
For income tax reporting purposes, the Company's aggregate unused net operating
losses approximate $1,900,000, expiring in the year 2021 that may be used to
offset future taxable income. The Company has provided a valuation reserve
against the full amount of the net operating loss benefit, since in the opinion
of management based upon the earnings history of the Company, it is more likely
than not that the benefits will not be realized. Due to significant changes in
the Company's ownership, the Company's future use of its existing net operating
losses may be limited.
Components of deferred tax assets as of September 30, 2003 are as follows:
Non-Current:
Net operating loss carry forward $ 660,000
Valuation allowance . . . . . . . (660,000)
----------
Net deferred tax asset . . . . . $ 0
6. LOSSES PER COMMON SHARE
The following table presents the computation of basic and diluted loss per
share:
2003 2002
------------ ------------
Net loss available for common shareholders $ (5,250) $ (424,000)
- ------------------------------------------ ------------ ------------
Basic and fully diluted loss per share . . $ (.00) $ (.00)
- ------------------------------------------ ------------ ------------
Weighted average common shares outstanding $44,127,695 $48,120,782
- ------------------------------------------ ------------ ------------
Net loss per share is based upon the weighted average of shares of common stock
outstanding.
7. RELATED PARTY TRANSACTIONS
The Company's majority shareholder is International Bible Games, Inc. ("IBG"), a
company formed under the laws of British Columbia, Canada. IBG has paid certain
nominal costs of maintaining the Company's corporate status. The amount of the
costs incurred are not material to the Company's financial statements taken as
a whole.
-10-
PARA MAS INTERNET, INC.
A DEVELOPMENT STAGE COMPANY
NOTES TO FINANCIAL STATEMENTS
8. 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 loses of $1,967,546. 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. If cash flows continue to
improve through these efforts, management believes that the Company can continue
to operate. However, no assurance can be given that management's actions will
result in the resolution of its liquidity problems.
9. SUBSEQUENT EVENT
Subsequent to the date of the financial statements, the Company entered into an
Agreement of Plan and Tender Offer ("Agreement")which provides for a tender
offer of 100% of the issued and outstanding shares of Amerigroup, Inc., a
company formed under the laws of the state of Nevada, in which the Company will
issue one share of its common stock for each share of Amerigroup, Inc. common
stock tendered. The Company will also issue approximately 10,042,105 shares of
its common stock to IBG shareholders and IBG creditors (see Note 7) in exchange
for releases of claims against IBG.
Subsequent to the date of the financial statements, the Company entered into an
Agreement and Release ("Release")with the holder of the Company's $15,000 note
payable, together with accrued and unpaid interest (see Note 4) in exchange for
60,000 shares of the Company's restricted common stock.
Subsequent to the date of the financial statements, the Company entered into a
Share Exchange Agreement ("Exchange") with the holder of 60,000 shares of the
Company's preferred stock (see Note 2) in exchange for 240,000 shares of the
Company's restricted common stock.
-11-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
The Company entered into an Agreement of Plan and Tender Offer ("Agreement")
providing for a tender offer of 100% of the issued and outstanding shares
of Amerigroup, Inc., (Amerigroup) a company formed under the laws of the
state of Nevada, in which the Company issued one share of its common stock
for each share of Amerigroup, Inc. common stock tendered. The Company
also issued approximately 10,042,105 shares of its common stock in exchange for
a release of certain rights in which the Company has an interest. The tender
offer closed on April 12, 2004. The Company was successful at closing in
acquiring 100% of the issued and outstanding stock of Amerigroup. Amerigroup
is an issuer of retail discount cards to entertainment venues and for other
retail purposes. Amerigroup also is engaged in other related business
enterprises.
Since the acquisition of Amerigroup, the business operations of Amerigroup
constitute 100% of the business operations of the Company. It will require
$360,000 in working capital to sustain the business operations of the Company
for the next 12 months. Management believes that this working capital will be
available to the Company from operating revenues of the Company during the
next twelve months.
To actively grow the business pursuant its current business plan however, the
Company needs $5,000,000 in operating capital for the next 12 months. The
Company plans on raising this capital through a registered sale of its common
stock. The Company plans on filing its registration statement with the SEC
within the next several days and to then sell the offering commencing on the
effective date of the registration statement. However, it cannot be certain
as to whether the Company will be successful in selling the offering.
The independent auditors report on the Company's June 30, 2003 financial
statements states that the Company's inability to generate sufficient cash
flows from operations raise substantial doubts about the Company's ability to
continue as a going concern.
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.
-12-
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
During the three month period covered by this report, the Company had no
legal proceedings filed against it.
ITEM 2. CHANGES IN SECURITIES
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) EXHIBITS
----------
31.1 Certification of CEO and CFO pursuant to Securities Exchange Act rules
13a-15 and 15d-15(c) as adopted pursuant to section 302 of the
Sarbanes-Oxley act of 2002.
32.1 Certification of CEO and CFO 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
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
PARA MAS INTERNET, INC.
Date: September 17, 2004
By: /s/ Gary Whiting
-------------------------------
Gary Whiting
Principal Executive Officer
Principal Financial Officer
Chief Accounting Officer