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 June 30, 2004
[ ] 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
---------
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 June 30, 2004 are not
necessarily indicative of the results that can be expected for the year ending
December 31, 2004.
-2-
PARA MAS INTERNET, INC.
JUNE 30, 2004
(UNAUDITED)
F-1
TABLE OF CONTENTS
Financial statements
Balance Sheet F-3
Statement of Income and Accumulated Deficit F-4
Statement of Cash Flows F-5
Notes to financial statements F-6 - F-9
F-2
PARA MAS INTERNET, INC.
-----------------------
BALANCE SHEETS
-------------------------
AS OF JUNE 30, 2004
--------------------
UNAUDITED
---------
ASSETS
As of
6/30/2004
---------
CURRENT ASSETS
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 28,865
Accounts Receivable . . . . . . . . . . . . . . . . . . . . 385,000
Note Receivable - Related Party . . . . . . . . . . . . . . 68,355
-----------
Total current assets . . . . . . . . . . . . . . . . . . 482,220
-----------
FIXED ASSETS
Accumulated Depreciation . . . . . . . . . . . . . . . . . (15,957)
Vehicle. . . . . . . . . . . . . . . . . . . . . . . . . . 24,850
Office Equipment . . . . . . . . . . . . . . . . . . . . . 11,131
Computer Equipment. . . . . . . . . . . . . . . . . . . . 11,894
Land. . . . . . . . . . . . . . . . . . . . . . . . . . . 470,500
-----------
Total Fixed Assets . . . . . . . . . . . . . . . . . 502,418
-----------
OTHER ASSETS
Service Receivable . . . . . . . . . . . . . . . . . . . . 4,500
Intangible Assets. . . . . . . . . . . . . . . . . . . . . 23,900
-----------
OTHER ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . 28,400
-----------
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,013,038
===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable. . . . . . . . . . . . . . . . . . . . . . 45,394
Interest payable. . . . . . . . . . . . . . . . . . . . . . 833
Salary payable. . . . . . . . . . . . . . . . . . . . . . . 1,263,829
Payroll liabilities . . . . . . . . . . . . . . . . . . . . 36,238
Note payable - Related Party . . . . . . . . . . . . . . . 320,706
----------
Total current liabilities. . . . . . . . . . . . . . . . 1,667,000
----------
LONG TERM LIABILITIES
Notes payable. . . . . . . . . . . . . . . . . . . . . . . 86,546
----------
TOTAL LIABILITIES. . . . . . . . . . . . . . . . . . . . . . . 1,753,547
----------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $0.001 par value, 100,000,000 shares
authorized, 48,294,395 shares issued and outstanding as of
June 30, 2004 and December 31, 2003, respectively . . . . . 76,237
Additional paid in capital . . . . . . . . . . . . . . . . . . 1,094,626
Accumulated deficit. . . . . . . . . . . . . . . . . . . . . . (1,911,371)
----------
Total stockholders' equity (deficit) . . . . . . . . . . (740,508)
----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY . . . . . . . . . . $ 1,013,038
===========
The accompanying notes to financial statements should be
read in conjunction with this Balance Sheet
F-3
PARA MAS INTERNET, INC.
STATEMENT OF INCOME AND ACCUMULATED DEFICIT
FOR THE THREE MONTHS AND SIX MONTHS ENDED
JUNE 30, 2004
--------------
For the three months ended For the six months ended
June 30, 2004 June 30, 2004
-------------------------------------------------------
REVENUES . . . . . . . . . . . . . . . . . . . $ 238,098 $ 330,521
COST OF REVENUES . . . . . . . . . . . . . . . 19,766 19,766
-------------------------------------------------------
GROSS PROFIT (LOSS). . . . . . . . . . . . . . $ 218,332 $ 310,755
-------------------------------------------------------
EXPENSES:
General and administrative. . . . . . . . . 128,071 234,914
Depreciation. . . . . . . . . . . . . . . . 1,547 3,094
Professional fees . . . . . . . . . . . . . 33,435 33,435
-------------------------------------------------------
Total expenses . . . . . . . . . . . . . 163,053 271,443
-------------------------------------------------------
Operating income (loss). . . . . . . . . . . . 55,279 39,312
-------------------------------------------------------
OTHER INCOME (EXPENSE)
Other expenses. . . . . . . . . . . . . . . 896 896
-------------------------------------------------------
Total other income (expense) . . . . . . 896 896
-------------------------------------------------------
LOSS FROM OPERATIONS . . . . . . . . . . . . . 56,175 40,208
-------------------------------------------------------
NET INCOME (LOSS). . . . . . . . . . . . . . . 56,175 40,208
=======================================================
ACCUMULATED DEFICIT - Beginning. . . . . . . . (1,967,546) (1,951,579)
ACCUMULATED DEFICIT - End. . . . . . . . . . . (1,911,371) (1,911,371)
LOSS PER SHARE BASIC AND DILUTED . . . . . . . $ (0.00) $ (0.00)
=======================================================
PER SHARE INFORMATION:
Basic and dilulted Weighted average Number of
Shares Outstanding . . . . . . . . . . . . . . 48,294,395 48,294,395
=======================================================
The accompanying notes to pro forma financial statements should be
read in conjunction with these Statements of Income and Accumulated Deficit
F-4
PARA MAS INTERNET, INC.
STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS AND SIX MONTHS
ENDED JUNE 30, 2004
-------------------
Six Three
Months Months
Ended Ended
6/30/2004 6/30/2004
-----------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income / (Loss) from Operations . . . . . . . . . $ 40,208 $ 56,175
Adjustments to reconcile net income
to net cash provided
Depreciation Expense. . . . . . . . . . . . . . . . . 3,094 1,547
(Increase) / Decrease in Accounts Receivable. . . . . (145,000) (145,000)
(Increase) / Decrease in Note Receivable. . . . . . . (81,180) (21,180)
(Increase) / Decrease in Note Payable . . . . . . . . 5,358 44,990
Increase / (Decrease) in Payroll Liability. . . . . . 72,020 -
Increase / (Decrease) in Accounts Payable . . . . . . 16,932 16,932
-----------------------
Net cash provided by (used in) operating activities (88,568) (46,536)
-----------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
(Purchase)/Sale of Equipment. . . . . . . . . . . . . (5,131) -
-----------------------
Net cash provided by (used in) investing activities (5,131) -
-----------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds of sale of common stock, net . . . . . . . . - -
Issuance of Stock . . . . . . . . . . . . . . . . . . - -
Increase/(Decrease) in Short Term Notes Payable . . . - -
Increase/(Decrease) in Short Term Notes Payable -
Related Party . . . . . . . . . . . . . . . . . . - -
-----------------------
Net cash provided by (used in) financing activities - -
-----------------------
Net increase (decrease) in cash . . . . . . . . . . . . (93,699) (46,536)
Balance at beginning of Period. . . . . . . . . . . . . 85,563 38,400
End of Period . . . . . . . . . . . . . . . . . . . . . $ (8,136) $ (8,136)
=======================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
SUPPLEMENTAL INFORMATION: -----------------------
Interest Paid . . . . . . . . . . . . . . . . . . . . . $ - $ -
-----------------------
Taxes Paid. . . . . . . . . . . . . . . . . . . . . . . $ - $ -
-----------------------
Cash paid during the year for interest. . . . . . . . $ - $ -
-----------------------
Cash paid during the year for taxes . . . . . . . . . $ - $ -
-----------------------
Preferred stock dividends payable . . . . . . . . . . $ - $ -
-----------------------
Stock options issued in exchnage for services . . . . $ - $ -
-----------------------
The accompanying notes to financial statements should be
read in conjunction with these Statements of Cash Flows
F-5
PARA MAS INTERNET, INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED JUNE 30, 2004
(UNAUDITED)
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 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 June 30, 2004 the Company has an accumulated deficit of
$1,911,371.
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 June 30, 2004. The Company's current liabilities
exceeded its current assets by $1,184,780.
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 ended June 30, 2004.
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.
F-6
PARA MAS INTERNET, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE THREE MONTHS ENDED JUNE 30, 2004
(UNAUDITED)
NOTE 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.
COMPREHENSIVE INCOME - 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
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 June 30, 2004.
F-7
PARA MAS INTERNET, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE THREE MONTHS ENDED JUNE 30, 2004
(UNAUDITED)
NOTE 1 - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
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.
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 $1,911,371. 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.
NOTE 3 - STOCKHOLDERS' EQUITY
There were no issuances of stock for either services or cash during the three
months ended June 30, 2004.
NOTE 4 - WARRANTS AND OPTIONS
As of June 30, 2004, there are no warrants or options outstanding to acquire
any additional shares of common stock that are not disclosed in the equity
section of the balance sheet.
NOTE 5 - ACCRUED EXPENSES
For the 3 months ended June 30, 2004, there is approximately $37,000 of accrued
payroll, with corresponding payroll liabilities (taxes) accrued of $0, as the
officer is deemed an independent contractor. The amount due to the company
executives is as follows:
Gary Whiting $ 37,500
---------
Total $ 37,500
NOTE 6 - REVENUE AND ACCOUNTS RECEIVABLE
During the three months ended June 30, 2004, the company sold the exclusive
rights to sell and distribute discount cards, websites, and store front listings
for the Florida Region (defined as ten U.S. States in the agreement). The
Company has received $5,000 towards the purchase of these rights and has
recognized the remaining $145,000 as accounts receivable which is to be received
in full prior to November 16, 2004.
F-8
NOTE 6 - REVENUE AND ACCOUNTS RECEIVABLE (CONTINUED)
This package was sold to the Fred Gagnon, who was the previous Senior Vice
President of the recently acquired Amerigroup, Inc.
The balance of the revenue earned during the quarter is made up of $60,000 for
similar sales of marketing rights, along with sales of consignment tickets and
revenues from the store front and co-branding packages.
NOTE 7 - RELATED PARTY TRANSACTIONS
During the three months ended June 30, 2004, the company sold the exclusive
rights to sell and distribute discount cards, websites, and store front listings
for the Florida Region (defined as ten U.S. States in the agreement). The
Company has received $5,000 towards the purchase of these rights and has
recognized the remaining $145,000 as accounts receivable which is to be received
in full prior to November 16, 2004. This package was sold to the Fred Gagnon,
who was the previous Senior Vice President of the recently acquired Amerigroup,
Inc.
F-9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
Para Mas acquired Amerigroup, Inc. on or about April 12, 2004. 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.
For the six month period ended December 31, 2003, Amerigroup had revenues of
$419,323. During the same period, expenses totaled $699,750 yielding an
operating loss for the period of $310,018. For the six month period ended
June 30, 2004, Amerigroup had revenues of $330,521. Total expenses for the same
period totaled $271,443 for operating income during the six month period of
$39,312.
As of June 30, 2004, Amerigroup had cash on hand totaling $28,865. This is
sufficient working capital to meet the day to day operational cash needs of
Amerigroup for approximately 30 days. Management estimates it will require
$360,000 in working capital to sustain the business operations of Amerigroup for
the next 12 months. Management believes that this working capital will be
available from operating revenues during the next twelve months.
To actively grow the business pursuant 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.
However, it cannot be certain as to whether we will be successful in selling
the offering.
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.
-3-
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
On or about April 12, 2004, Para Mas issued 276,418,600 shares of common stock
to the shareholders of AmeriGroup in exchange for 100% of the issued and
outstanding common shares of AmeriGroup on a share for share basis. The
transaction was a transaction by Para Mas not involving any public offering.
The shares were issued pursuant to Section 4(2) of the Securities Act of 1933.
There was no money raised and the transaction was a share exchange transaction
on a share for share basis.
On or about April 12, 2004, Para Mas issued 10,042,105 shares of common stock
in exchange for a release of certain rights in which the Company had an
interest. The transaction was a transaction by Para Mas not involving any
public offering. The shares were issued pursuant to Section 4(2) of the
Securities Act of 1933. There was no money raised.
-4-
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
----------------------
On April 22, 2004, the Company filed a Report on Form 8-K discussing the change
in its fiscal year end from June 30 to December 31.
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