AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 21, 2005
REGISTRATION STATEMENT NO. 333-116603
_______________________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2/A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
(AMENDMENT NO. 2)
PARA MAS INTERNET, INC.
------------------------------------------------------
(Name of small business issuer in its charter)
NEVADA 8600 59-3383240
- ------------------------- ---------------------- --------------------
(State or jurisdiction of (Primary Standard (I.R.S. Employer
incorporation or organization) Industrial Classification Identification No.)
Code Number)
700 North Meely Road, Suite 19, Gilbert, Arizona 85233 (866) 321-7898
---------------------------------------------------------------------
(Address and telephone number of principal executive offices)
700 North Meely Road, Suite 19, Gilbert, Arizona 85233 (866) 321-7898
---------------------------------------------------------------------
(Address of principal place of business or intended principal
place of business)
Rodney E. Sumpter, 139 Vassar St., Reno, NV 89502
-------------------------------------------------------------------------
(Name, address and telephone number of agent for service)
Approximate date of proposed sale to the public: As soon as practicable after
the effective date of this Registration Statement.
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. |__| ___________________________
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
or the same offering. |__| __________________________________________
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |__| __________________________________________
If delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box. |__|
CALCULATION OF REGISTRATION FEE
Title of each Dollar Proposed maximum Proposed maximum
class of securities amount to be offering price aggregate offering Amount of
To be registered registered per share price Registration fee
- ------------------- ------------ ----------------- ------------------- -----------------
Common Stock. . . . 11,111,111 $ 0.45 $ 5,000,000 $ 633.50
- ------------------- ------------ ----------------- ------------------- -----------------
Common Stock. . . . 10,192,105 $ 0.45 $ 4,586,447 $ 581.10
- ------------------- ------------ ----------------- ------------------- -----------------
Total . . . . . . . 21,303,216 $ 0.45 $ 9,586,447 $ 1,214,60
- ------------------- ------------ ----------------- ------------------- -----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY
DETERMINE.
COPIES OF COMMUNICATIONS TO:
Gary R. Henrie, Esq.
10616 Eagle Nest Street
Las Vegas, NV 89141
Tel: (702) 616-3093
Fax: (435) 753-1775
PROSPECTUS
PARA MAS INTERNET, INC.
21,303,216 SHARES
COMMON STOCK
----------------
Para Mas Internet, Inc. is offering to sell 11,111,111 shares of its common
stock on a self-underwritten basis at an offering price of $0.45 per share.
There is no minimum number of shares that must be sold in this offering. This
is the initial public offering of shares of its common stock and will proceed
for a period of twenty months or until all shares are sold.
The selling shareholders named in this prospectus are offering 10,192,105 shares
of common stock at an offering price of $0.45 per share. If the shares are
quoted in the future on the Over-the-Counter Bullentin Board or a National
Exchange, selling shareholders may sell shares at market price. Para Mas
Internet, Inc. will not receive any proceeds from shares sold by selling
shareholders.
Our common stock is presently not traded on any market or securities exchange.
Proceeds to Para Mas
from its self
underwritten offering Proceeds to selling
Offering Price Commissions before expenses (2) shareholders
-------------- ----------- -------------------- ------------
Per Share in Offering by
Para Mas . . . . . . . . $ 0.45 $ 0.045 (1) $ 0.405
Per Share in Offering by
Selling Shareholders. . $ 0.45 $ 0.00 $ 0.45
Totals for Offering by
Para Mas . . . . . . . . $ 5,000,000 $500,000 (1) $ 4,500,000 (2)
Totals for Offering by
Selling Shareholders . . $ 4,586,447.25 $ 0.00 $4,586,447.25
- ----------------------------------------------------------------------------------------------
(1) $The offering by Para Mas will be self-underwritten unless it is
determined at a later time to sell the offering through the use of underwriters.
The table sets forth commission amounts assuming underwriters are used.
(2) Offering expenses are estimated to be $50,000.00 which will leave Para
Mas proceeds of $4,450,000.00 if all shares offered by Para Mas are sold and
underwriters are used to sell the offering.
THE PURCHASE OF THE SECURITIES OFFERED THROUGH THIS PROSPECTUS INVOLVES A HIGH
DEGREE OF RISK. SEE SECTION ENTITLED "RISK FACTORS" ON PAGES 6 THROUGH 7.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is: _____________________
-1-
TABLE OF CONTENTS
PAGE
Summary
Risk Factors ------------------------------------------------------------
Use of Proceeds ---------------------------------------------------------
Determination of Offering Price -----------------------------------------
Dilution ----------------------------------------------------------------
Selling Shareholders ----------------------------------------------------
Plan of Distribution ----------------------------------------------------
Legal Proceedings -------------------------------------------------------
Directors, Executive Officers, Promoters and Control Persons ------------
Security Ownership of Certain Beneficial Owners and Management ----------
Description of Securities -----------------------------------------------
Interest of Named Experts and Counsel -----------------------------------
Disclosure of Commission Position of Indemnification for Securities Act -
Liabilities -------------------------------------------------------------
Description of Business -------------------------------------------------
Management's Discussion and Analysis ------------------------------------
Description of Property -------------------------------------------------
Certain Relationships and Related Transactions --------------------------
Market for Common Equity and Related Stockholder Matters ----------------
Executive Compensation --------------------------------------------------
Financial Statements ----------------------------------------------------
Changes in and Disagreements with Accountants ---------------------------
Available Information ---------------------------------------------------
-2-
SUMMARY
OUR BUSINESS
Para Mas Internet, Inc., a Nevada corporation ("Para Mas") acquired 100% of the
issued and outstanding shares of Amerigroup, Inc., also a Nevada corporation
(AGI), on April 12, 2004. In connection with the acquisition, our common shares
were reverse split on a one-for-ten basis. All references in this prospectus to
share amounts have been adjusted for the reverse split and the shares issued in
the acquisition. Our core business operations consist of the business
operations of Amerigroup our wholly owned subsidiary.
The Itzyourmall business creates customized discount loyalty-rewards cards for
individual businesses. These businesses are referred to as co-branders and as a
result of their participation in the Itzyourmall program are able to
cross-market their products to other businesses and to create a strong, loyal
customer base. Each co-brander's card carries the Itzyoumall logo in the lower
right-hand corner of the card. It is a discount, loyalty-rewards card.
Itzyourmall designs, prints, and supports the loyalty-rewards cards for our
co-branders. The co-brander hands out the loyalty-rewards card for free to its
customers. A person only needs one card with an Itzyourmall logo, since all the
other co-branders accept any card with an Itzyourmall logo.
With the Itzyourmall card, each card-holder receives discounts locally and
nationally and earns reward points to be spent by the card-holder at the
different participating businesses. Each co-brander also receives a customized
mall web-site. The mall web-site address is unique to each co-brander and is
printed on the co-brander's cards. The card-holder then visits the co-brander's
mall web-site to find out where all the discounts are to be found both locally
and nationally. Itzyourmall arranges for businesses to offer discounts on their
products and services to the Itzyourmall card-holder. Itzyourmall also sells
discount tickets to the movies, other entertainment venues, sporting events, and
amusement parks. Most of these tickets have to be sent to the card holder
through the mail. Some businesses allow us to sell those discount tickets
on-line as e-tickets meaning that the ticket holder can purchase and print the
e-ticket from his or her computer.
Because most of our tickets are not e-tickets we have created kiosks to vend our
tickets to the Itzyourmall card holders. The Itzyourmall Kiosk allows any
Itzyourmall card-holder to purchase any and all discount tickets available
through the Itzyourmall co-brander's mall web-site, conveniently and
hassle-free. These Kiosks not only allow the card-holders to purchase on-line
tickets, but they also dispense those tickets that Itzyourmall does not have
available electronically.
Even though our products are developed and have been introduced into the market,
we need the proceeds from this offering to grow our client base in a major way.
The successful completion of this offering will fund the expansion of Para Mas
and the marketing of our products
-----------------------------------
We were incorporated as a Nevada corporation on June 6, 1994. Our principal
executive offices as well as the principal office of our subsidiary are located
at 700 North Neely Road, Suite 19, Gilbert, Arizona 85233. Our toll free
telephone number is 866-321-7898.
-3-
THE OFFERING
SECURITIES OFFERED 21,303,216 shares of Para Mas common stock. 11,111,111
of the shares will be offered by Para Mas on a self-underwritten basis.
10,192,105 of the shares may also be sold from time to time by selling
shareholders.
OFFERING PRICE The offering price for all shares of common stock is $0.45
per share. In the event Para Mas either sells all 11,111,111 shares offered by
it or terminates the offering of the 11,111,111 shares, if a public market for
our common shares develops, then the actual price of the common stock to be sold
thereafter by the selling shareholders may be determined by prevailing market
prices at the time of sale. Selling shareholders may sell at the market price
only after the shares are quoted on the Over-the-Counter Bullentin Board or a
National Exchange.
MINIMUM NUMBER OF SHARES TO BE SOLD IN THIS OFFERING None.
USE OF PROCEEDS If all shares offered by Para Mas are sold, net proceeds
from this offering will be approximately $4,950,000 and will be used by Para
Mas for working capital and to market its products. If underwriters are engaged
to sell the offering, net offering proceeds will total approximately $4,450,000.
Para Mas will not receive any proceeds from the sale of common stock by the
selling shareholders.
BEST EFFORTS OFFERING The offering is being sold by our president on a
self-underwritten efforts basis. Management may enter into an underwriting
agreement for this offering at a later date.
THIS OFFERING WILL EXPIRE This offering will close whenever all of the shares
are sold or twenty months after the effective date of this prospectus, whichever
is sooner.
Summary Financial Information
Balance Sheet Data: September 30, 2004
Cash $ 1,546
Total Assets $ 992,110
Liabilities $ 1,897,571
Total Stockholders' Equity $ (905,461)
Income Statement Data:
Net Revenues for nine months ended September 30, 2004 $ 314,263
Expenses for nine months ended September 30, 2004 $ 439,904
Deficit for nine months ended September 30, 2004 $ (124,745)
BALANCE SHEET DATA: DECEMBER 31, 2003
CASH $ 85,563
TOTAL ASSETS $ 777,987
LIABILITIES $ 1,582,603
TOTAL STOCKHOLDERS' EQUITY $ (804,616)
INCOME STATEMENT DATA:
NET REVENUES FOR THE YEAR ENDED DECEMBER 31, 2003 $ 419,323
EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2003 $ 771,900
ACCUMULATED DEFICIT THROUGH DECEMBER 31, 2003 $ (2,246,860)
-4-
RISK FACTORS
An investment in our common stock involves a high degree of risk. You should
carefully consider the risks described below and the other information in this
prospectus before investing in our common stock. If any of the following risks
occur, our business, operating results and financial condition could be
seriously harmed and you could lose all or part of your investment.
WE HAVE ONLY RECENTLY BEGUN GENERATING REVENUES AT A LEVEL MATERIAL TO THE
BUSINESS OPERATIONS OF PARA MAS AND WE MUST CONTINUE TO DO SO IF PARA MAS IS TO
BE SUCCESSFUL.
During the fiscal quarter ended September 30, 2004, we generated revenues
totalling $20,565. Overall have an accumulated deficit related to our current
business operations of $2,076,324. If we are to succeed, we must continue to
generate revenues totalling a minimum of $30,000 per month or be able to raise
additional working capital through the sale of equity in Para Mas. There is a
limited history upon which to base any assumption as to the likelihood that we
will prove successful. If we are unsuccessful in addressing these risks, our
business will most likely fail.
INVESTORS WILL BE UNABLE TO SELL THEIR SECURITIES IF NO MARKET DEVELOPS FOR
THOSE SECURITIES.
No market exists at the present time for our common shares. Investors in the
offering will purchase securities that cannot be resold by those investors since
no market exists. Even though at some time in the future we intend to create a
public market for our common shares, there can be no assurance when the market
will develop or if the market will ever develop. If we are not successful in
developing a market for our common shares, investors will not be able to sell
their securities and will suffer a loss of their investment.
WE DEPEND ON GARY WHITING WHOM WE MAY NOT BE ABLE TO RETAIN, IN WHICH EVENT WE
COULD NOT CONTINUE TO DEVELOP OUR BUSINESS PLAN.
Gary Whiting is our only officer and director and who has the expertise to run
and oversee the development of our business. We would not be able to retain Mr.
Whiting if he should die, become disabled or become engaged in other business
pursuits to the extent he cannot devote sufficient time to our business. In
such event, we could not prosecute our business plan unless we can replace Mr.
Whiting. It is uncertain whether we would be able to do so. In addition, we
have no key-man life insurance on Mr. Whiting.
SINCE THERE IS NO MINIMUM OFFERING AMOUNT, THE FIRST INVESTORS IN THE OFFERING
ARE AT GREATER RISK IN THE EVENT SUFFICIENT FUNDS ARE NOT RAISED IN THE OFFERING
TO FUND OUR CONTINUED GROWTH.
Para Mas is dependant upon the proceeds of this offering to aggressively
implement its business plan. There is no minimum offering amount assigned to
this offering. Accordingly, upon acceptance of offering subscriptions, the
proceeds of such subscriptions are immediately transferred into the operating
account of Para Mas and used to conduct the business affairs of Para Mas. In
the event Para Mas is not successful in raising sufficient capital in this or
other offerings to aggressively continue its business development, it is
possible that subscribers that have invested will lose their investments.
-5-
BECAUSE GARY WHITING BENEFICIALLY OWNS 65% OF OUR OUTSTANDING COMMON STOCK, HE
WILL CONTROL AND MAKE CORPORATE DECISIONS, WHICH DECISIONS MAY DIFFER FROM THOSE
THAT WOULD HAVE BEEN MADE BY OTHER STOCKHOLDERS.
Gary Whiting owns approximately 65% of the outstanding shares of our common
stock. Accordingly, he will have a significant influence in determining the
outcome of all corporate transactions. The interests of Gary Whiting may differ
from the interests of the other stockholders and thus result in corporate
decisions that are disadvantageous to other shareholders.
IF WE DO NOT OBTAIN ADDITIONAL FINANCING, OUR BUSINESS WILL NOT HAVE SUFFICIENT
RESOURCES TO FUND ITS BUSINESS PLAN AND BUSINESS WILL FAIL.
As of September 30, 2004, we had in cash on hand. We do not have sufficient
cash to sustain our current operations. We project that we need to raise
$360,000.00 in order to execute our business plan over the next 12 months. We
currently do not have any arrangements for financing and we may not be able to
obtain financing. With limited funds we may be unable to sustain our business
operations and an already existing investor could lose 100% of their investment
in this case.
OUR INDEPENDENT AUDITOR'S BELIEVE THERE IS SUBSTANTIAL DOUBT THAT WE CAN
CONTINUE AS A GOING CONCERN WHICH, IF TRUE, RAISES SUBSTANTIAL DOUBT THAT A
PURCHASER OF OUR COMMON STOCK WILL RECEIVE A RETURN ON HIS OR HER INVESTMENT.
If we are not able to continue as a going concern it is likely any holder of our
common stock will lose his or her investment in that stock.
UNLESS WE CAN DEVELOP AND SUSTAIN A TREND OF POSITIVE REVENUES, WE WILL NOT BE
SUCCESSFUL AS A COMPANY..
Since inception, we have reported repeated net losses resulting in an
accumulative deficit of $ . There is no assurance that Para Mas will report
net income in any future year or period. Unless Para Mas becomes successful in
generating net revenues, we will not be successful financially and our
shareholders will lose their investments.
FORWARD-LOOKING STATEMENTS
- ---------------------------
This prospectus contains forward-looking statements that involve risks and
uncertainties. We use words such as anticipate, believe, plan expect, future,
intend and similar expressions to identify such
forward-looking statements. You should not place too much reliance on these
forward-looking statements. Our actual results are most likely to differ
materially from those anticipated in these forward-looking statements for many
reasons, including the risks faced by us described in the this Risk Factors
section and elsewhere in this prospectus.
USE OF PROCEEDS
The net proceeds we will receive from the sale of the shares of common stock
offered by us will be approximately $4,450,000, if the maximum numbers of shares
are sold, after deducting offering expenses of $50,000 and if commissions are
paid to underwriters. If the offering is self-underwritten, net proceeds will
total approximately $4,950,000 if all shares offered by Para Mas are sold.
-6-
The principal purpose of this offering is to increase our working capital in
order for us to proceed with the execution of our business plan in an aggressive
manner. Our management will have significant flexibility in applying the net
proceeds of the offering. Pending any use, the net proceeds of this offering
will be placed in an interest bearing bank account.
The actual expenditures of the proceeds of the offering may differ substantially
from the estimated use of proceeds. The actual expenditures of the proceeds of
this offering will be determined by our board of directors in the best interests
of advancing our business. Factors that could cause a reallocation of proceeds
include an immediate demand for our services upon our ability to provide those
services. If we need to increase our capacity to provide our services to the
market place, offering proceeds ear marked for marketing will be shifted to
working capital.
We expect to use the net proceeds from this offering as follows:
ASSUMING 50% ASSUMING 25% OF
ASSUMING ALL OF THE SHARES THE SHARES ARE
SHARES ARE SOLD ARE SOLD SOLD
----------------- ---------------- ---------------
Gross Proceeds. . . . . . $ 5,000,000 $ 2,500,000 $ 1,250,000
Offering Expenses . . . . 50,000 50,000 50,000
Net Proceeds. . . . . . . 4,950,000 2,450,000 1,200,000
Purchase of Equipment (1) 2,000,000 1,000,000 500,000
Inventory . . . . . . . . 2,000,000 1,000,000 500,000
Marketing/Sales (2) . . . 500,000 250,000 100,000
Working Capital (3) . . . 450,000 200,000 100,000
----------------- ---------------- ---------------
TOTAL . . . . . . . . . . $ 5,000,000 $ 2,500,000 $ 1,250, 000
================= ================ ===============
(1) Equipment purchases will include kiosks which house point of sale
terminals for our products by our card holders.
(2) Marketing and sales expenses will include primarily travel to and
presentations to potential clients for the sale of our products and franchises
of our business.
(3) Working capital will be used to support our business operations
including without limitation, salaries, rent, utilities and supplies.
DETERMINATION OF OFFERING PRICE
The $0.45 per share offering price of our common stock was arbitrarily
determined based on our current perceived financing needs. There is no
relationship whatsoever between this price and our assets, book value or any
other objective criteria of value.
DILUTION
An investment in this offering will undergo immediate dilution when compared
with the net tangible assets of Para Mas. The following table illustrates the
per share dilution in net tangible book value to new investors if 100% of the
11,111,111 shares offered by Para Mas are sold, if 50% of the 11,111,111 shares
-7-
are sold, and if 25% of the 11,111,111 shares are sold. Calculations are based
on 291,290,144 capital shares outstanding, and at the different levels of the
offering sold as indicated after the deduction of offering expenses and assuming
all shares of Para Mas sold are on a self-underwritten basis with no commissions
paid. The 10,192,105 shares to be sold by the selling shareholders is common
stock that is currently issued and outstanding. Accordingly, there will be no
dilution as a result of the sale of those shares.
PERCENT OF OFFERING SOLD 100% 50% 25%
Public offering price per
Share. . . . . . . . . . . . . . . . $ 0.45 $ 0.45 $ 0.45
Net tangible book value per share as
of September 30, 2004 . . . . . . . ($0.003) ($0.003) ($0.003)
Increase per share attributed to
investors in this offering. . . . . $0.017 $0.009 $0.004
Net tangible book value per share as
of September 30, 2004, after this
Offering . . . . . . . . . . . . . . $0.014 $0.006 $0.001
Net tangible book value
dilution per share
to new investors. . . . . . . . . . . $0.436 $0.444 $0.449
Net tangible book value
dilution per share to new
investors expressed as a
percentage
96.9% 98.7% 99.8%
SELLING SHAREHOLDERS
The selling shareholders named in this prospectus are offering 10,192,105 shares
of common stock. The following table provides as of January 14, 2005,
information regarding the beneficial ownership of our common stock held by each
of the selling shareholders, including:
1. the number of shares owned by each prior to this offering;
2. the total number of shares that are to be offered for each;
3. the total number of shares that will be owned by each upon completion of
the offering; and
4. the percentage owned by each following the offering.
Shares Total Number
Owned Of Shares To Total Shares To Percent
Prior To Be Offered For Be Owned Owned Upon
Name of Selling This Shareholders Completion Of Completion
Stockholder Offering Account This Offering Offering
ABBEY, Lloyd & Alice . . . . . . . . 5,000 5,000 -0- -0-
AMBERIDIS, Diane . . . . . . . . . . 5,000 5,000 -0- -0-
ANDREWS, Linda . . . . . . . . . . . 2,000 2,000 -0- -0-
-8-
APOSTOLIC Faith Church . . . . . . . 400,000 400,000 -0- -0-
ARNASON, Sheryl. . . . . . . . . . . 20,000 20,000 -0- -0-
BEATTIE, Dave. . . . . . . . . . . . 5,000 5,000 -0- -0-
BEAUCOCK, Orlin. . . . . . . . . . . 5,000 5,000 -0- -0-
BERGET, Kelly. . . . . . . . . . . . 32,433 32,433 -0- -0-
BOTTOMLEY, Geneva. . . . . . . . . . 20,000 20,000 -0- -0-
BRABANT, Denis . . . . . . . . . . . 3,417 3,417 -0- -0-
BRAJCICH, Elinor . . . . . . . . . . 10,000 10,000 -0- -0-
BRISBIN, Bonnie. . . . . . . . . . . 11,653 11,653 -0- -0-
BROWN, Christopher . . . . . . . . . 2,680 2,680 -0- -0-
BRUNDIN, Elizabeth . . . . . . . . . 102,181 102,181 -0- -0-
BRUNDIN, V . . . . . . . . . . . . . 6,670 6,670 -0- -0-
BRYANT, Peter & Ann. . . . . . . . . 40,000 40,000 -0- -0-
BURECK Investments Ltd.. . . . . . . 30,000 30,000 -0- -0-
BUSCHAU, Sandra. . . . . . . . . . . 20,000 20,000 -0- -0-
BELLEFONTAINE, Deborah and BUSH, George 10,000 10,000 -0- -0-
BUTLER, Craig. . . . . . . . . . . . 16,000 16,000 -0- -0-
CAMERON, Karen . . . . . . . . . . . 3,300 3,300 -0- -0-
CARDINAL, Sean . . . . . . . . . . . 20,000 20,000 -0- -0-
CARDINAL, Sean & Kim . . . . . . . . 7,000 7,000 -0- -0-
CASTLE, Alice. . . . . . . . . . . . 20,000 20,000 -0- -0-
CHISHOLM, Dan. . . . . . . . . . . . 60,000 60,000 -0- -0-
CHISHOLM, R.J. & J.M.. . . . . . . . 100,000 100,000 -0- -0-
CHORNOBAY, Linda . . . . . . . . . . 20,000 20,000 -0- -0-
CHORNOBAY, William . . . . . . . . . 200,000 200,000 -0- -0-
CHRISTIANSEN, Rose . . . . . . . . . 2,000 2,000 -0- -0-
CLARKSON, Laura. . . . . . . . . . . 5,000 5,000 -0- -0-
COCHRANE, Tara . . . . . . . . . . . 1,333 1,333 -0- -0-
COHOE, Lila. . . . . . . . . . . . . 10,000 10,000 -0- -0-
CURRIE, Bruce. . . . . . . . . . . . 12,000 12,000 -0- -0-
CURRIE, Elann M. . . . . . . . . . . 10,000 10,000 -0- -0-
DANCE, Gail. . . . . . . . . . . . . 1,340 1,340 -0- -0-
DOMONKOS, John . . . . . . . . . . . 6,667 6,667 -0- -0-
Dragon Descent Holdings Ltd. . . . . 400,000 400,000 -0- -0-
ENGLESON, Karen, . . . . . . . . . . 20,000 20,000 -0- -0-
ERICKSON, Beverley . . . . . . . . . 17,000 17,000 -0- -0-
ERICKSON, Christopher. . . . . . . . 7,000 7,000 -0- -0-
FAUCHER, Darryl. . . . . . . . . . . 9,340 9,340 -0- -0-
FIORELLA, Donna Jean . . . . . . . . 40,000 40,000 -0- -0-
FREEMAN, Don . . . . . . . . . . . . 30,000 30,000 -0- -0-
FREEMAN, Jonathan. . . . . . . . . . 10,000 10,000 -0- -0-
FREEMAN, Lynette . . . . . . . . . . 4,000 4,000 -0- -0-
FREEMAN, Ron . . . . . . . . . . . . 5,000 5,000 -0- -0-
FROESE, Evelyn . . . . . . . . . . . 60,000 60,000 -0- -0-
FURBER, Marjorie Lynn. . . . . . . . 2,000 2,000 -0- -0-
FURBER, Winifred . . . . . . . . . . 4,340 4,340 -0- -0-
GALANDIE, Gary . . . . . . . . . . . 13,400 13,400 -0- -0-
GEERTSEMA, Hermen. . . . . . . . . . 10,000 10,000 -0- -0-
GEMMELL, Isabel. . . . . . . . . . . 2,680 2,680 -0- -0-
GERVAIS, Ron . . . . . . . . . . . . 6,667 6,667 -0- -0-
HILL, Ann I. . . . . . . . . . . . . 6,670 6,670 -0- -0-
HOFFARD, Ron . . . . . . . . . . . . 6,670 6,670 -0- -0-
HOFFMAN, Richard . . . . . . . . . . 61,667 61,667 -0- -0-
-9-
HOGAN, Emerald . . . . . . . . . . . 1,340 1,340 -0- -0-
HORBACHEWSKY, Dorothy. . . . . . . . 222,670 222,670 -0- -0-
HORBACHEWSKY, Mary . . . . . . . . . 5,360 5,360 -0- -0-
HORBACHEWSKY, William J. . . . . . . 1,340 1,340 -0- -0-
HOVLAND, Ola . . . . . . . . . . . . 20,000 20,000 -0- -0-
HOWARD, Robert & Julie . . . . . . . 8,000 8,000 -0- -0-
HOYER, Gail. . . . . . . . . . . . . 42,200 42,200 -0- -0-
IUZ, Larry . . . . . . . . . . . . . 20,000 20,000 -0- -0-
JENSEN, Warren . . . . . . . . . . . 78,853 78,853 -0- -0-
JORDAN, Michael T. . . . . . . . . . 12,000 12,000 -0- -0-
JUDD, Barbara Ann Boyd and Peter Alan 13,340 13,340 -0- -0-
KELLER, Perry. . . . . . . . . . . . 6,700 6,700 -0- -0-
KEN Glover & Associates in
trust for Anthony Dwayne Prosk . . . 6,670 6,670 -0- -0-
KENNEDY, Linda . . . . . . . . . . . 15,000 15,000 -0- -0-
KILMARTIN, Fergus. . . . . . . . . . 6,670 6,670 -0- -0-
KING, Leigh. . . . . . . . . . . . . 1,340 1,340 -0- -0-
KLIPPENSTEIN, Maria. . . . . . . . . 6,670 6,670 -0- -0-
KORHONEN, Jennifer . . . . . . . . . 2,680 2,680 -0- -0-
KRINBILL, Dan. . . . . . . . . . . . 5,360 5,360 -0- -0-
LeCLAIR, Teresa. . . . . . . . . . . 13,000 13,000 -0- -0-
LEE, Shirley . . . . . . . . . . . . 40,000 40,000 -0- -0-
LOU, Anja C. . . . . . . . . . . . . 10,000 10,000 -0- -0-
LUKOMSKI, Donna. . . . . . . . . . . 25,671 25,671 -0- -0-
LUTWICK, Emmanuel. . . . . . . . . . 5,000 5,000 -0- -0-
MANKULICH, Gary. . . . . . . . . . . 10,700 10,700 -0- -0-
MANKULICH, Mike. . . . . . . . . . . 26,658 26,658 -0- -0-
MARZIN, Selena . . . . . . . . . . . 2,000 2,000 -0- -0-
MAYNER, Linda. . . . . . . . . . . . 2,000 2,000 -0- -0-
McCORD, Joanne . . . . . . . . . . . 8,670 8,670 -0- -0-
McFADYEN, Danielle . . . . . . . . . 253,000 253,000 -0- -0-
McFADYEN, Debra. . . . . . . . . . . 440,000 440,000 -0- -0-
McFADYEN, Garry. . . . . . . . . . . 54,000 54,000 -0- -0-
McINNIS, John. . . . . . . . . . . . 7,606 7,606 -0- -0-
MEARS, Karen . . . . . . . . . . . . 5,000 5,000 -0- -0-
MENGES, Hanelore . . . . . . . . . . 50,000 50,000 -0- -0-
MERCIER, Kevin . . . . . . . . . . . 1,000 1,000 -0- -0-
MICHALUK, Judy . . . . . . . . . . . 1,340 1,340 -0- -0-
MILLER, Ruby . . . . . . . . . . . . 6,700 6,700 -0- -0-
MINCHIN, Carolyn . . . . . . . . . . 3,300 3,300 -0- -0-
MITCHELL, Eva. . . . . . . . . . . . 1,340 1,340 -0- -0-
MOORE, Lorraine. . . . . . . . . . . 1,335 1,335 -0- -0-
MORRISON, Don. . . . . . . . . . . . 1,000 1,000 -0- -0-
OMELANIEC, Simon & Pamela. . . . . . 287,336 287,336 -0- -0-
PARKIN, Carol. . . . . . . . . . . . 4,020 4,020 -0- -0-
PAULIUK, Aaron . . . . . . . . . . . 8,000 8,000 -0- -0-
PIECHOCKI, Elizabeth . . . . . . . . 20,000 20,000 -0- -0-
PETRUNIA, Michael & Maureen. . . . . 30,000 30,000 -0- -0-
PILSON, Chris. . . . . . . . . . . . 9,380 9,380 -0- -0-
PILSON Enterprises Ltd.. . . . . . . 250,000 250,000 -0- -0-
POLLARD, Phillip . . . . . . . . . . 15,000 15,000 -0- -0-
POLOWAY, Richard . . . . . . . . . . 35,000 35,000 -0- -0-
PROCTOR, Craig . . . . . . . . . . . 120,000 120,000 -0- -0-
-10-
ROBERTSON, Linda . . . . . . . . . . 4,000 4,000 -0- -0-
ROESSLER, Michael. . . . . . . . . . 25,000 25,000 -0- -0-
ROON, Shaunna. . . . . . . . . . . . 5,000 5,000 -0- -0-
RUTLEY, Harvey and/or Iona . . . . . 100,010 100,010 -0- -0-
SABATINI, Anthony. . . . . . . . . . 10,720 10,720 -0- -0-
SANDBERG, Dale . . . . . . . . . . . 5,000 5,000 -0- -0-
SANSALONE, Janet . . . . . . . . . . 4,005 4,005 -0- -0-
SCHINDEL, Gerd Maria Katrina . . . . 6,000 6,000 -0- -0-
SCHULTZ, Grant . . . . . . . . . . . 13,333 13,333 -0- -0-
SIATECKI, Wayne. . . . . . . . . . . 11,000 11,000 -0- -0-
SICKMUELLER, Karin . . . . . . . . . 2,680 2,680 -0- -0-
SJOGREN, David . . . . . . . . . . . 10,000 10,000 -0- -0-
SJOGREN, Erik. . . . . . . . . . . . 2,000 2,000 -0- -0-
SLOAN, Mitch . . . . . . . . . . . . 5,000 5,000 -0- -0-
SMANTIOTTO, Loretta. . . . . . . . . 5,360 5,360 -0- -0-
SNELL, Barbara . . . . . . . . . . . 6,670 6,670 -0- -0-
SOMERVILLE, William G. . . . . . . . 10,000 10,000 -0- -0-
SOOBOTIN, Korby. . . . . . . . . . . 6,700 6,700 -0- -0-
SOOBOTIN, Nettie . . . . . . . . . . 25,863 25,863 -0- -0-
SOOBOTIN, Sherry . . . . . . . . . . 6,700 6,700 -0- -0-
SORGE, Mia . . . . . . . . . . . . . 7,000 7,000 -0- -0-
STONE, Kenneth . . . . . . . . . . . 20,000 20,000 -0- -0-
SUTHERLAND, Daryl. . . . . . . . . . 16,733 16,733 -0- -0-
SWANSON, Laverna . . . . . . . . . . 8,040 8,040 -0- -0-
TAYLOR, David. . . . . . . . . . . . 1,335 1,335 -0- -0-
TJOMSAAS, Eleanor. . . . . . . . . . 8,000 8,000 -0- -0-
TJOMSAAS, Judy . . . . . . . . . . . 116,670 116,670 -0- -0-
TOWNSEND, Valerie Kless. . . . . . . 2,000 2,000 -0- -0-
TRENT, Brian & Patti . . . . . . . . 142,000 142,000 -0- -0-
TRICKETT, Sharron. . . . . . . . . . 1,340 1,340 -0- -0-
VAILLANT, Shirley. . . . . . . . . . 20,000 20,000 -0- -0-
VATTOY, Barrie . . . . . . . . . . . 64,000 64,000 -0- -0-
VATTOY, Shelly . . . . . . . . . . . 4,660 4,660 -0- -0-
VENTRESS, Irene. . . . . . . . . . . 20,000 20,000 -0- -0-
VINCE McDonald Ent. Ltd. . . . . . . 160,000 160,000 -0- -0-
WAN-Lim, Sien. . . . . . . . . . . . 8,000 8,000 -0- -0-
WARTBERG, Thomas . . . . . . . . . . 50,000 50,000 -0- -0-
WIENS, Alvin & Winona. . . . . . . . 5,000 5,000 -0- -0-
WILSON, Renee. . . . . . . . . . . . 6,000 6,000 -0- -0-
WITTMEIER, Sherwood. . . . . . . . . 23,700 23,700 -0- -0-
566,000 B.C. Ltd.. . . . . . . . . . 6,000 6,000 -0- -0-
516,316 B.C. Ltd.. . . . . . . . . . 13,400 13,400 -0- -0-
391,972 B.C. Ltd.. . . . . . . . . . 27,000 27,000 -0- -0-
Laurentian Bank of Canada in trust . 6,670 6,670 -0- -0-
for Steven Pospolita SD 0201087
Yorkton Securities Inc. in trust for 10,000 10,000 -0- -0-
Gene Lukomski RRSP #63-8596-7
Investor Company in trust for. . . . 53,340 53,340 -0- -0-
Acc. #7P619ZS, TD Evergreen
HSBC Securities (Canada) Inc. in . . 13,340 13,340 -0- -0-
Trust for Dorothy Horbachewsky
Goepel McDermid Inc. in trust for. . 13,340 13,340 -0- -0-
Rick Campbell RRSP #15-E61S-5
-11-
BREDESEN, Harald . . . . . . . . . . 25,000 25,000 -0- -0-
FULLER, Brian. . . . . . . . . . . . 25,000 25,000 -0- -0-
CRAWFORD, Malcolm. . . . . . . . . . 25,000 25,000 -0- -0-
JUCHNEIWICZ, Ed. . . . . . . . . . . 25,000 25,000 -0- -0-
DIGHTON, Jeff. . . . . . . . . . . . 20,000 20,000 -0- -0-
NAQVI, Shahrukh. . . . . . . . . . . 6,000 6,000 -0- -0-
SAVOIE, Pat. . . . . . . . . . . . . 2,000 2,000 -0- -0-
TEAT, James Albert . . . . . . . . . 20,000 20,000 -0- -0-
HOYT, Dennis . . . . . . . . . . . . 6,000 6,000 -0- -0-
HUNTER, Elsie. . . . . . . . . . . . 2,743,045 2,743,045 -0- -0-
KOOP, John . . . . . . . . . . . . . 20,000 20,000 -0- -0-
KPMG . . . . . . . . . . . . . . . . 207,622 207,622 -0- -0-
Lyons Hamilton . . . . . . . . . . . 67,000 67,000 -0- -0-
TJELTA, Sven . . . . . . . . . . . . 274,000 274,000 -0- -0-
Terrence E King Law Corp.. . . . . . 12,000 12,000 -0- -0-
COCHRANE, Floyd. . . . . . . . . . . 225,000 225,000 -0- -0-
STEWART, Raymond. . . . . . . . . . 300,000 300,000 -0- -0-
GALANDIE, Cheryl . . . . . . . . . . 4,000 4,000 -0- -0-
LEE, Colin . . . . . . . . . . . . . 20,000 20,000 -0- -0-
WITTMEIER, Adam. . . . . . . . . . . 2,000 2,000 -0- -0-
MILLER, Patrick. . . . . . . . . . . 4,000 4,000 -0- -0-
STOLL, Terrance. . . . . . . . . . . 1,350 1,350 -0- -0-
HESKE, David . . . . . . . . . . . . 2,000 2,000 -0- -0-
LONGPHEE, Myles. . . . . . . . . . . 2,000 2,000 -0- -0-
GAIL, Dawn . . . . . . . . . . . . . 4,000 4,000 -0- -0-
FRASER, Marie. . . . . . . . . . . . 2,500 2,500 -0- -0-
NAHAL, Surjeet Singh . . . . . . . . 2,000 2,000 -0- -0-
HORBACHEWSKY, Sherry . . . . . . . . 15,000 15,000 -0- -0-
HOTH Ventures Inc. . . . . . . . . . 27,000 27,000 -0- -0-
METHODICAL Management Inc. . . . . . 27,000 27,000 -0- -0-
TJOMSAAS, Judy . . . . . . . . . . . 400,000 400,000 -0- -0-
TJOMSAAS, Ralph. . . . . . . . . . . 417,622 417,622 -0- -0-
The named party beneficially owns and has sole voting and investment power over
all shares or rights to these shares. The numbers in this table assume that
none of the selling shareholders sells shares of common stock not being offered
in this prospectus or purchases additional shares of common stock, and assumes
that all shares offered are sold. To our best knowledge, none of the selling
shareholders are broker-dealers or affiliates of broker-dealers.
PLAN OF DISTRIBUTION
SHARES OFFERED BY PARA MAS
The following officer and director is selling the common stock being offered by
Para Mas through this prospectus:
Name of Officer/Director Position
- -------------------------- --------
Gary Whiting President and Director
-12-
Mr. Whiting is not registered as a broker-dealer under the Securities Act of
1934 and is relying on Rule 3a4-1 under the 1934 Act to allow him to sell the
shares as an officer of Para Mas. We believe that Mr. Whiting is qualified
under this rule because:
- - he is not subject to a statutory disqualification as set forth in section
3(a)(39) of the Securities Exchange Act of 1934;
- - he will not be compensated for his participation in the offering by the
payment of commissions or other remuneration based directly or indirectly on the
sale of the offering;
- - he has never been and will not be at the time of his participation in the
offering an associated person of a broker or dealer;
- - he has never participated before in selling a registered offering for any
issuer; and
- - he will perform substantial duties for Para Mas other than in connection
with the sale of the shares.
In order to make the necessary sales, this officer and director plans to
directly contact selected individuals and entities with whom he has a prior
relationship and whom he believes will have an interest in the offering.
Management, however, may enter into an underwriting agreement for this offering
at a later date and at that time pay a commission to any participating
underwriters. If we enter into an underwriting agreement after this offering
becomes effective, we will file with the SEC a post-effective amendment
identifying the underwriter and providing material information about the
underwriting arrangements.
We are therefore offering the shares on a self-underwritten basis. There is no
minimum number of shares required to be sold in this offering.
In order to subscribe for shares, an investor must complete and execute the form
of subscription agreement attached to this prospectus and deliver the executed
subscription agreement to us together with payment of the purchase price for the
shares payable to Para Mas Incorporated.
We may reject or accept any subscription in whole or in part at our discretion.
We may close the offering without notice to subscribers. We may immediately use
the proceeds obtained from the offering.
Upon our acceptance of a subscription agreement, we will deliver to each
subscriber a copy of the fully executed agreement evidencing the number of
shares subscribed for. If we do not accept any subscription or any portion of a
subscription, the amount of the subscription not accepted will be promptly
returned by us to the subscriber.
The estimated costs of this offering are as follows:
Securities and Exchange Commission registration fee $ 950
Transfer Agent Fees $ 500
Accounting fees and expenses $ 20,000
Legal fees and expenses $ 10,000
Blue Sky fees and expenses $ 5,000
Miscellaneous $ 12,108
--------------
Total (1) $ 50,000
==========
-13-
(1) If underwriters are used to sell the offering, they will be paid
commissions of up to 10% creating additional offering expenses of $500,000 if
all shares offered by Para Mas are sold.
SHARES OFFERED BY SELLING SHAREHOLDERS
This prospectus is part of a registration statement that enables the selling
shareholders to sell their shares on a continuous or delayed basis for a period
of twenty months. We have advised the selling shareholders that they shall only
be permitted to sell their shares in jurisdictions where it is lawful to sell
such securities. Thus, the selling shareholders will be permitted to sell their
shares in foreign countries if they comply with all rules and regulations of
that particular jurisdiction. Additionally, the selling shareholders shall be
permitted to sell their shares in the United States only upon this registration
statement becoming effective. Furthermore, the selling shareholders' selling
efforts shall be limited to unsolicited brokerage transactions that comply with
the provisions of Regulation M.
The selling shareholders may sell some or all of their common stock in one or
more transactions, including block transactions:
1. On such public markets or exchanges as the common stock may from time to
time be trading;
2. In privately negotiated transactions;
3. In short sales; or
4. In any combination of these methods of distribution.
The sales price to the public is fixed at $0.45 per share until such time as the
shares of our common stock become traded on the Over-the-Counter Bullentin Board
or a National Exchange. Although we intend to build a trading market for our
common stock in the Pink Sheets or on the Over-The-Counter Bulletin Board,
public trading of our common stock may never materialize. If our common stock
becomes traded on the Over-The-Counter Bulletin Board or another exchange, then
the sales price to the public will vary according to the selling decisions of
each selling shareholder and the market for our stock at the time of resale. In
these circumstances, the sales price to the public may be:
1. The market price of our common stock prevailing at the time of sale;
2. A price related to such prevailing market price of our common stock; or
3. Such other price as the selling shareholders determine from time to time.
The selling shareholders may also sell their shares directly to market makers
acting as agents in unsolicited brokerage transactions. Any broker or dealer
participating in such transactions as agent may receive a commission from the
selling shareholders, or, if they act as agent for the purchaser of such common
stock, from such purchaser. The selling shareholders will likely pay the usual
and customary brokerage fees for such services. If applicable, the selling
shareholders may distribute shares to one or more of their partners who are
unaffiliated with us. Such partners may, in turn, distribute such shares as
described above.
The selling shareholders whose shares are being registered under this prospectus
and registration statement may choose not to sell their shares.
-14-
We are bearing all costs relating to the registration of the common stock. The
selling shareholders, however, will pay any commissions or other fees payable to
brokers or dealers in connection with any sale of the common stock.
The selling shareholders must comply with the requirements of the Securities Act
of 1933 and the Securities Exchange Act in the offer and sale of the common
stock. In particular, during such times as the selling shareholders may be
deemed to be engaged in a distribution of the common stock, and therefore be
considered to be an underwriter, they must comply with applicable law and may,
among other things:
1. Not engage in any stabilization activities in connection with our common
stock;
2. Furnish each broker or dealer through which common stock may be offered,
such copies of this prospectus, as amended from time to time, as may be required
by such broker or dealer; and
3. Not bid for or purchase any of our securities or attempt to induce any
person to purchase any of our securities other than as permitted under the
Securities Exchange Act.
LEGAL PROCEEDINGS
We are not currently a party to any legal proceedings. Our agent for service of
process in Nevada is Rodney E. Sumpter, 139 Vassar Street, Reno, Nevada 89502.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Our executive officers and directors and their respective ages as of May 31,
2004 are as follows:
DIRECTORS:
Name of Director Age
- ---------------------- -----
Gary Whiting 48
EXECUTIVE OFFICERS:
Name of Officer Age Office
- -------------------- ----- -------
Gary Whiting 48 President, Principal Executive Officer
Principal Accounting Officer
Principal Financial Officer
Secretary/treasurer
Mr. Whiting became an officer and a director of Para Mas on or about February
11, 2004. He is an entrepreneur having both a legal and a management
background. Mr. Whiting graduated from BYU Law School with a Master in Public
Administration in 1988. Mr. Whiting served as Associate Legislative Counsel to
the Utah State Legislature from 1998 to 1990. As Associate Legislative Counsel,
Mr. Whiting assisted the Utah State Legislature in legal research and in
drafting language for proposed bills during the legislative sessions. He also
served as counsel to the Administrative Rules Review Committee which met when
the Legislature was not in session. The Administrative Rules
-15-
Review Committee
was a Legislative oversight committee that oversaw the Administrative Rulemaking
process for the state of Utah. Mr. Whiting got the idea to create a CD-ROM law
disc while serving at the Utah State Legislature, which eventually led to the
creation of the Itzyourmall loyalty-rewards discount card program. Mr.
Whiting's main duties involved legal research. His research was done without
the aid of computer assisted research. When Mr. Whiting approached his employer
about subscribing to an on-line computer assisted research service, he was told
that it was too expensive. It was then that Mr. Whiting decided he would create
an affordably priced CD-ROM product. He resigned as Associate Legislative
Counsel and formed a scanning company. He had three objectives: first, he
wanted to create a low priced product; second, he wanted to create a product
with a better interface and more user friendly to the end-user; and third, he
wanted to help drive customers to the users of his product. To achieve the
third objective, he created a savings mall where he would advertise attorneys
using his CD-ROM product. All that was required was that they needed to offer
some sort of a discount on their services. This savings mall was originally
called Amerigroupmall.com, but evolved into the Itzyourmall concept after
several years of selling and analyzing the market. Mr. Whiting found that
businesses were more willing to accept or give out something to their customers
that had their name on it. So, we gave our mall (Amerigroupmall) to businesses
and it became their mall, thus the name, Itzyourmall.
The name of the scanning company Mr. Whiting formed and managed was Mobile
Scan. Mobile Scan was the predecessor to MobileScan, Inc. During the 1990's,
Mobile Scan scanned text documents for companies and processed those scanned
images into text documents. For example, Mobile Scan scanned and processed
resumes for McDonnell-Douglas over a five year period. McDonnell-Douglas would
send printed resumes they received from potential employees to Mobile Scan's
offices in Mesa. Those paper resumes were then scanned into a Tagged Image File
Format (TIFF) and stored on the computer for later processing. Each TIFF image
would be deskewed, despeckled in preparation for the Optical Character
Recognition (OCR) process. We would then run a number of proprietary processes
on the OCR'd file to clean up any errors in the newly created text file. These
processes would look for common errors made by the OCR process such as
substitution errors. Substitution errors are made when the OCR software
substitutes one word for another, such as the word oil in place of the word on.
Spell checking functions were then run on the text file. We then took the
cleaned text file and formatted it by tagging up to 20 different fields of
information. This file was then sent via a secure FTP (File Transfer Protocol)
site where McDonnell-Douglas would integrate it with their Lotus Notes
application. Mr. Whiting personally developed all these scanning systems for
Mobile Scan and oversaw all of the production of the scanning processes. These
systems were later conveyed into MobileScan, Inc., where they were used to scan
and create legal databases to be stored on CD-ROM for resale to attorneys.
TERM OF OFFICE
Our Directors are appointed for terms of one year to hold office until the next
annual general meeting of the holders of our common stock, as provided by the
Nevada Revised Statutes, or until removed from office in accordance with our
bylaws. Our officers are appointed by our board of directors and hold office
until removed by the board.
SIGNIFICANT EMPLOYEES
We have no significant employees other than the officers and directors described
above.
-16-
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table provides the names and addresses of each person known to us
to own more than 5% of our outstanding common stock as of May 31, 2004, and by
Mr. Whiting who is our sole officer and director at the present time. All
shares are owned directly.
Percentage of Common
Stock Beneficially Owned
------------------------
Name and Address Amount and Nature Prior to After
Title of Class of Beneficial Owner of Beneficial Owner Offering Offering(1)
- ------------------------------------------------------------------------------
Common Stock Gary Whiting 181,506,778 shares 62.4% 60.1%
1337 S. Gilbert Road
Mesa, Arizona 85204
Common Stock All Officers and 181,506,778 shares 62.4% 60.1%
Directors as a Group
(1 person)
(1) The percentage calculations in this column are based on 291,290,144
shares outstanding and assume that the entire offering by Para Mas of 11,111,111
shares will be sold.
DESCRIPTION OF SECURITIES
GENERAL
Our authorized capital stock consists of 500,000,000 shares of common stock at a
par value of $0.001 per share and 10,000,000 shares of preferred stock at a par
value of $0.001 per share.
COMMON STOCK
As of January 17, 2005, there were 291,290,144 shares of our common stock issued
and outstanding that were held by approximately 725 stockholders.
Holders of our common stock are entitled to one vote for each share on all
matters submitted to a stockholder vote. Holders of common stock do not have
cumulative voting rights. Therefore, holders of a majority of the shares of
common stock voting for the election of directors can elect all of the
directors. Holders of our common stock representing a majority of the voting
power of our capital stock issued and outstanding and entitled to vote,
represented in person or by proxy, are necessary to constitute a quorum at any
meeting of our stockholders. A vote by the holders of a majority of our
outstanding shares is required to effectuate certain fundamental corporate
changes such as a liquidation, merger or an amendment to our Articles of
Incorporation.
-17-
Holders of common stock are entitled to share in all dividends that the board of
directors, in its discretion, declares from legally available funds. In the
event of a liquidation, dissolution or winding up, each outstanding share
entitles its holder to participate pro rata in all assets that remain after
payment of liabilities and after providing for each class of stock, if any,
having preference over the common stock. Holders of our common stock have no
pre-emptive rights, no conversion rights and there are no redemption provisions
applicable to our common stock.
PREFERRED STOCK
As of January 17, 2005, there were no shares of our preferred stock issued and
outstanding. Holders of the preferred shares are entitled to receive cumulative
dividends at the annual rate of 7% or $.07 per share, payable quarterly. The
dividends may be payable in cash or through a dividend of additional shares of
preferred shares.
The preferred shares rank senior to the common shares. The preferred shares
have a liquidation preference of $1.00 per share plus any 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 an amount equal to the 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.
Para Mas may, at its option, convert the preferred shares into common stock by
dividing the average closing price of the common stock over a 20 day period by
the liquidation preference of $1.00 per share. In order to exercise this
option, the average price of the common stock must be at least $1.50 per share.
INTERESTS OF NAMED EXPERTS AND COUNSEL
No expert or counsel named in this prospectus as having prepared or certified
any part of this prospectus or having given an opinion upon the validity of the
securities being registered or upon other legal matters in connection with the
registration or offering of the common stock was employed on a contingency
basis, or had, or is to receive, in connection with the offering, a substantial
interest, direct or indirect, in the registrant or any of its parents or
subsidiaries. Nor was any such person connected with the registrant or any of
its parents or subsidiaries as a promoter, managing or principal underwriter,
voting trustee, director, officer, or employee.
Gary R. Henrie, our independent legal counsel, has provided an opinion on the
validity of our common stock.
CFO Advantage, Inc., independent certified accountants, audited the financial
statements and presented their report with respect to the audited financial
statements. CFO Advantage, Inc.'s report was given upon their authority as an
expert in accounting and auditing.
DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES
Our directors and officers are indemnified as provided by the Nevada Revised
Statutes and our Bylaws. We have been advised that in the opinion of the
Securities and Exchange Commission indemnification for liabilities arising under
the Securities Act is against public policy as expressed in the Securities Act,
-18-
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities is asserted by one of our directors, officers, or
controlling persons in connection with the securities being registered, we will,
unless in the opinion of our legal counsel the matter has been settled by
controlling precedent, submit the question of whether such indemnification is
against public policy to a court of appropriate jurisdiction. We will then be
governed by the court's decision.
DESCRIPTION OF BUSINESS
HISTORY
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 AmeriGroup, Inc., a Nevada corporation.
The business operations of AmeriGroup, Inc. now constitute all of the business
operations of Para Mas.
OUR BUSINESS
AGI has developed a product called Itzyourmall. Itzyourmall is a loyalty-rewards
card program designed to provide local and national discounts and benefits to
all card participants. Purchasing businesses receive a laminated, customized
discount loyalty-rewards cards to hand out to their customers. Each business
purchasing cards is called a co-brander, because their loyalty-rewards card
carries the Itzyoumall brand in the lower right-hand corner of the card. Not
all businesses have a mall web-site. Only those businesses participating as
co-branders receive a mall. Businesses who just want to advertise on the malls
receive a custom designed store-front for $800.00 a year. The store front gives
them a listing in the mall directory, a store-front web page, a coupon or
certificate web page, and map page.
Co-branding is what helps link all of the businesses and card-holders together,
since every participating business accepts any other participating business'
card. Co-branders can cross-market their products to the customers of other
participating businesses through the Itzyourmall web-mall. It also helps create
a strong, loyal customer base. The card is handed out for free to the
co-brander's customers. The co-brander pays an annual cost of $2,495.00 for a
thousand cards. This fee includes the printed, laminated card and the
customized web-mall site along with an administrative tool box that gives the
co-brander the ability to control his web-mall, generate reports on card-holder
activity, and email his customers.
-19-
Itzyourmall currently has a SSL (Secure Sight License) through Thawte. Our
administrative and back-end systems are protected by user name and password
authentication. All administrative actions are logged by users. The
administrative tools we provide each co-brander also give them access to
reporting functions unique to their business. They can track each card member's
activities. Reports can be generated that allow the co-brander to track
commissions. These reports show how many members bought according to volume and
category. The reports also show how much money is due the co-brander through
revenue sharing, which is explained in more detail below. Co-branders also have
the ability to notify all card members via email or postings on the mall of any
and all rewards and certificates earned.
THE CONCEPT
Itzyourmall allows each co-brander to be unique, while connecting them together
on a universal platform. One of the main purposes of the Itzyourmall concept
was to allow co-branders to track their card member's purchases in order to
reward them for repeat usage. This tracking also allows us to reward the
co-branders for each purchase their card holders make. We call this revenue
sharing. Revenue sharing is designed to reward co-branders. While the concept
is simple, the implementation requires extremely complicated and sophisticated
accounting software. Because every card-holder receives a unique membership
number, and that number is linked specifically to the co-brander who handed out
the card, we can track the card-holder's purchases at all participating
businesses and share the revenue from those purchases with the co-brander.
Card-holders receive instant rewards at the point-of-sale inside the merchant's
place of business, the merchant's internet mall or store-front, or at the
Itzyourmall Kiosks. Customers receive rewards from all participating
businesses. Each merchant decides what rewards to give each member. All
members are treated equally at each participating merchant or vendor. As points
are earned and accumulated, members can choose from a list of prizes made
available by the merchant. Members are able to redeem those prizes instantly at
the merchant's place-of-business or print a certificate to be used at a later
date.
We share 25% of all net revenue made from the card-holder's purchases with the
co-brander. The card-holder is unaware of this transaction. The card-holder is
also rewarded by paying less than retail on his purchases when using the
Itzyourmall branded card. A good example of how this works is the amusement
parks. Itzyourmall purchases the tickets in bulk at a price under retail.
Itzyourmall marks up the ticket approximately five percent and sells the ticket
to the card-holder. The card-holder saves 15 to 40% on his tickets. Itzyourmall
does this with movie theaters, amusement parks, restaurants, and retail stores.
Anything that a card-holder spends his money on, Itzyourmall negotiates a better
price and buys it in bulk. A co-brander, therefore, makes money every time one
of their card-holders purchases a ticket or a gift certificate through us.
Suppose, for example, that a co-brander hands out 1,000 Itzyourmall branded
cards to all of its customers and those customers attend the movies once a week.
We mark up the movie tickets usually around five to ten percent. The co-brander
receives 25% of that mark-up or 6.25 , so that every time that co-brander's
card-holder goes to the movies the co-brander makes 6.25 times 1,000 or $62.50.
If those 1,000 card-holders only go once a week for the year that's $3,250 a
year. The cost of the program is only $2,495.00. Now, let's suppose they go to
an amusement park. We mark those tickets up $2, which means the co-brander
makes 60 each time his card-holders go to an amusement park or 1,000 times 50
equals $500. The same is true of restaurants and retail shops. The co-brander
receives money every time the co-brander's card-holder buys something throughout
the year.
-20-
This revenue sharing is possible through the individualization of each
card-holder. Itzyourmall uses bar codes on the back of every card. With these
bar codes we are able to track each card-holder's purchases. We are also able
to associate the card-holder to the co-brander who gave out the card. All
payment and transactional information as well as any personal information is
protected by our SSL. Individual members have individualized accounts that they
can log into to view points and rewards earned from the participating merchants.
What this means is that an individual card member can view all of the points and
rewards available to him from every business that he has shopped at in one,
secure place. It also shows the card member a cumulative total-meaning how many
points he has earned for the year and how many he has actually spent.
The Itzyourmall web-mall is built on a universal platform but appears to the end
user as specific to the participating merchant. For example, 5 Buck Pizza in
Utah has their own Itzyourmall domain and mall web-site at
www.5buckpizzamall.com that their card-holders use to find discounts in the
local, Regional and national arenas. This domain and mall web-site is on the
universal Itzyourmall platform but totally separate and apart from the
www.byusportsmall.com that the Brigham Young University student card-holders
use. Our system integrates everything so that the card members can have access
to everything inside the mall even though the card-holder enters the mall
through their co-brander's portal. Yet, we restrict individual co-branders from
viewing other co-brander's members activity and/or business activities. This
unique twist we built into our system is how we have allowed businesses to
cross-market each other without breaching privacy concerns. Co-branders
advertise on each other's malls and they email each other's clients through
Itzyourmall filters, but they are completely separate and apart from each
other.
We have have tried to make the purchasing of discount tickets as convenient as
possible through the use of Kiosks. The Itzyourmall Kiosk allows any Itzyourmall
card-holder to purchase any and all discount tickets available through the
Itzyourmall co-brander's mall web-site at certain business locations. These
Kiosks not only allow the card-holders to purchase on-line electronic tickets,
but they also dispense those tickets that Itzyourmall does not have available
electronically. For example, some of the tickets we purchase in bulk are sold to
us pre-printed. We have to physically dispense those tickets to the
card-holder. Since most card-holders do not want to wait for mail delivery, we
dispense those tickets to the card-holder through the kiosks that will be
located throughout the country. Currently, we have placed iiosks in California,
Arizona, Nevada, Idaho, Washington, Utah and Colorado.
COMPANY STRATEGY
Our goal is to have hundreds of millions of Itzyourmall co-branded card-holders
throughout the United States and the rest of the world and to have these
card-holders purchasing discounted tickets and discounted gift certificates
through the Itzyourmall platform (i.e., through the internet or the kiosks).
AGI makes 25% of the mark-up of every discounted ticket or discounted gift
certificate sold through the Itzyourmall platform. Generally these discounted
items are marked up 5% to 10%. Each co-brander also pays an amount each year
for Itzyourmall to continue hosting them and their card holders on the program.
The balance of the sales price for these packages is retained by those
individuals who have purchased the marketing rights to Regions, Territories, and
Units in which the package was sold. These marketing rights are explained in
greater detail under the Marketing section below.
AGI launched the sale of 1,000 card co-brand packages, store front advertising
packages, and discount tickets and discount gift certificates in the Phoenix
metropolitan area. Most of the cards sold in the Phoenix area, however, were
not distributed by the businesses. We feel that the main reason for this
-21-
inaction on the part of the co-branders was because the product was new and the
businesses did not understand it and originally discount tickets and discount
gift certificates were difficult to obtain. Card-holders originally had to
order by phone or through the internet and then the tickets or certificates were
sent by mail. As a result, Mr. Whiting created the Kiosk program. Initially,
Kiosks were placed in three strategic locations near three local theaters in the
Mesa and Scottsdale areas. The kiosk in Scottsdale had little success, because
no co-brand cards had been handed out in that area. The two in Mesa had some
activity. The first was placed in a business near an AMC theater, but had to be
removed when the business it was located in closed its doors. The second one in
Mesa was located at the Godfather's Pizza store at Power Road and US 60 on July
of 2004. This one has sold hundreds of movie tickets. The original Kiosk model
would only dispense two different types of tickets. We replaced the
two-dispense model at the Godfather's Pizza store on November 5, 2004, with a
model that will dispense six different types of tickets and unlimited electronic
tickets or electronic certificates. We are now placing similar 6-dispense
models in Utah, Nevada, Idaho, Washington, California, and Colorado. AGI does
not pay the businesses that host the Kiosks, neither do we pay for the internet
connection. We do not have to pay for local technicians to maintain and support
these kiosks as that is required of the Unit owners as discussed below. The
Itzyourmall platform provides administrative tools for those technicians to
remotely view kiosk activity. The kiosks are still unprofitable.
MARKETING
In order to sell millions of Itzyourmall branded loyalty-rewards discount cards,
our business plan is to sell marketing rights for the Itzyourmall products
throughout the United States and the world. These rights are sold by contract.
We sell marketing rights in three levels. The first is known as a Region. A
Region contains 60 million population. Region owners are required to sell
marketing rights for each one million population Territory within its Region.
These Territory owners are then required to sell ten one hundred thousand
population units within their Territory. The Unit owners receive training and
support from the Territory owners. The Unit owners are required to report to
their Territory owners on a weekly basis. Unit owners are required to maintain
a minimum of 25 co-branders. (See Exhibit 10.3 .for the Unit Marketing
Agreement) Marketing rights for Units are sold at an average of $8,500.00.
Marketing rights for Territories are sold for $25,000.00. (See Exhibit 10.4.for
the Territory Marketing Agreement)
The ten-state Regions were sold on a graduated basis, beginning at $100,000.00.
(See Exhibit 10.5 for the Region Marketing rights agreement) The California Ten
State Region, for example, was sold for $100,000.00. This Region contains
approximately 60 million people. The Texas Region was also sold for $100,000.00.
However, we sold the Florida Region for $250,000.00 and the New York Region will
be sold for $300,000.00. To date, we have sold the California Ten State Region,
the Texas Ten State Region and have received deposits on the Florida Ten State,
New York Ten State, and Canadian Ten Province Regions. In the California
market, Hawaii, Washington, Oregon, Idaho, Utah, Nevada, and parts of California
have been sold. In the Texas Region only Colorado has been sold. Arizona has
also been sold. Arizona was not part of any ten state Region package.
The Region, Territory and Unit owners form their own business. The business
name must have the Itzyourmall name in it. For example, the person who bought
the California Region formed a Limited Liability Company called Itzyourmall
California Region, LLC. All co-branders and advertising businesses write out
checks to the Unit owner's LLC and the LLC writes a check to AGI-$1095.00 for
each co-brand package sold and $100.00 for each store front also known as a
lister; to the Territory owner-$200.00 for each co-brand package sold and
$100.00 for each store front; to the Region owner-$100.00 for each co-brand
package sold and $100.00 for each store front. However, all
-22-
revenue collected
from ticket and gift certificate sales are collected by AGI through the malls
and the kiosks. AGI retains 20% of the mark-up; 3.5% goes to the Region owner;
20% to the Territory owner; 20% to the Unit owner; 25% to the co-brander, 10% to
the kiosk owner, and 1.5% to TAE Technologies, the company that programmed the
Itzyourmall web-sites. These amounts are calculated by our software and will be
transmitted on a quarterly basis electronically. The person/company receiving
the transmittal will also be charged any transactional fees charged by the
banks. To date, no ticket/gift certificate revenues have been shared in this
manner.
COMPETITION
Our research shows that AGI is the only company that is selling discount tickets
and discount gift certificates through a universal, integrated platform which
maintains separate and distinct malls for individual businesses. We also have
been unable to find any other company selling those tickets through kiosks.
There are companies on the internet who are selling tickets, but our research
shows that those tickets are marked up over and above the actual retail price.
Ours are always discounted less than retail.
While we have not been able to find a business that could be considered a direct
competitor to ours, there are businesses that have components similar to ours.
These businesses include coupon books, entertainment books, loyalty cards and
coupon mailers. Many of these are locally based businesses. One national
business is The Entertainment Coupon Book. The Entertainment Coupon Book,
however, does not sell discounts directly nor does it create individualized
loyalty-rewards cards for businesses. Like other smaller coupon books, the
Entertainment company sells a package of coupons for a one-time fee through
fund-raisers. These coupons are then used by the purchaser to present at the
participating place of business. No additional revenues are derived from this
type of model for the Entertainment Book company or any other coupon book
business. There are card companies like The Starving Students Card and the
Student Discount Card. These companies only derive their income from the sale
of their card to the individual cardholder. They do not co-brand with other
businesses. They do not sell tickets and discount certificates like we do.
GOVERNMENT REGULATION
We are subject to all of the government regulations that regulate businesses
generally. We are not aware of any government regulations that are specific to
the Para Mas business. We anticipate that our products will be marketed over a
wide geographic area involving several states and eventually all of the states
in the United States. Accordingly, we will be subject to any rules regulating
interstate commerce that may apply to us. Also, as a business focused on the
Internet, there is a risk that our activities and the Internet generally may
become the subject of government regulation in the future or that governments
will interpret their laws as having jurisdiction over Internet business. Due to
the increasing popularity and use of the Internet, it is possible that a number
of laws and regulations may be adopted with respect to the Internet generally,
covering issues such as user privacy, pricing, and characteristics and quality
of products and services. Similarly, the growth and development of the market
for Internet commerce may prompt calls for more stringent consumer protection
laws that may impose additional burdens on those companies conducting business
over the Internet. The adoption of any additional laws or regulations may
decrease the growth of commerce over the Internet, increase our cost of doing
business or otherwise have a harmful effect on our business.
-23-
MANAGEMENT'S DISCUSSION AND ANALYSIS
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 is 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 connection with the acquisition, International Bible Games distributed
its shares of Para Mas common stock to the International Bible Games'
shareholders. In addition, Para Mas issued additional shares as necessary to
settle all possible claims back against Para Mas by International Bible Games'
shareholders. 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 Agreement and Release and Share Exchange Agreement discussed in Note 9 to
Amerigroup's Financial Statements is the instrument entered into to obtain the
release of claims from International Bible Games shareholders as discussed.
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 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.
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 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 20 different marketing
territories and hundreds of businesses. In order to market the Itzyourmall
product quickly and as inexpensively as possible, we felt that our best course
-24-
of action would be to sell marketing rights to territories. 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.
As explained earlier, Mr. Gagon resigned from the company to launch our
marketing plan. We needed to have a non-affiliate purchase the rights and we
needed to test the program. Mr. Gagon was very successful in his marketing
efforts so we sold him the California ten state Region for $100,000.00 up front.
Because he was successful in marketing the California Region, it was decided to
let him buy the New York and Florida ten state Regions on credit. With only
$5,000.00 down for each of these two Regions, Mr. Gagon will pay out 20% of each
Territory sale to Amerigroup until he has paid $150,000.00 for Florida and
$250,000.00 for New York. These transactions are the reason why our accounts
receivable balance exceeds the total sales for 2004. These receivables are
solid, because Mr. Gagon will be able to produce. They might be a year or more
before the total receivables are realized, but we feel that Mr. Gagon will be
able to sell territories quicker than anyone else.
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.
Our projections show that Amerigroup will gross $84 million dollars annually
when the Units have sold their 25 business quotas in the four ten state Regions.
As mentioned, this is an annual amount as the co-branders have to pay the same
amount each year. Our expectations are that we will be able to sell half of the
Territories in all four Regions over the next twelve months. We expect those
Territories to sell half of their Units during that same period. The Units
could sell all 25 businesses during that period as well. What this means is
that we could gross between $20 and $40 million by the end of 2005. These
figures are based on the assumption that we will be able to maintain our current
operations. 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. 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.
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.
-25-
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.
DESCRIPTION OF PROPERTY
The business operations of Para Mas are located at 1337 S. Gilbert Road, Suite
104, Mesa, Arizona 85204. At that location we have office space of
approximately 2,000 square feet for which we pay a monthly rent payment of
$1,471. Our lease of this space expires in September 2004. We do not expect
any difficulty in locating space upon the expiration of the lease that will be
suitable to our needs.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Fred Gagon, formerly a vice president of Amerigroup, Inc., resigned from his
position at Amerigroup, Inc. in June of 2003. The purpose of his resignation
was to help implement our marketing plan for the Itzyourmall cards Regionally
and eventually nationally. Amerigroup, Inc. first sold the marketing rights for
Utah to Mr. Gagon. Mr. Gagon was successful marketing the Itzyourmall product
in Utah. He sold approximately 50 businesses within a 90 day period.
Consequently, Amerigroup, Inc. then sold the Itzyourmall marketing rights for
the California Ten State Region to Mr. Gagon for $100,000.00. He has sold
thousands of cards and 12 different territories in that Region. Mr. Gagon has
also put down two $5,000.00 deposits for the Florida and New York Ten State
Regions.
When Mr. Whiting first launched the Itzyourmall concept he was outsourcing
the printing of the Itzyourmall co-brander cards. However, the printers he
originally contracted with were unable to meet with the demand and flexibility
needed to service the Itzyourmall product. After weeks of research and inquiry,
Mr. Whiting determined that it would be necessary to have complete control over
the printing of the Itzyourmall cards. As there were insufficient funds for
Amerigroup to set up and create a printing operation, Mr. Whiting formed an
independent printing company that now services Amerigroup. He raised the
necessary cash to buy the necessary equipment and developed the systems
necessary to produce the unique card prints. To date there have been no profits
realized by Mr. Whiting through this printing company. Mr. Whiting has been
servicing the Itzyourmall needs at cost.
In addition to the printing company, Mr. Whiting also formed an independent
kiosk manufacturing and marketing company. The kiosk development came after the
Itzyourmall concept. The idea behind the kiosks is that card holders need to be
able to receive their discounted tickets easily and conveniently. Since many of
the tickets that Itzyourmall sells are paper tickets, Mr. Whiting determined
that it would be more convenient for the Itzyourmall card holders if those
tickets were vended through a conveniently located kiosk. Since there were
insufficient funds in Amerigroup to create and form a kiosk development company
and since there were no other privately held companies that Amerigroup could
outsource to, Mr. Whiting raised the capital necessary to fund and create these
two companies himself. These kiosks are used to service the Itzyourmall card
holder. Mr. Whiting has not realized any profits from these kiosks.
-26-
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
NO PRESENT PUBLIC MARKET
There is no active public market for our common stock.
OPTION, WARRANTS AND REGISTRATION RIGHTS
We have no outstanding options or warrants to purchase, or securities
convertible into, common equity of Para Mas. Other than the shares for the
selling shareholders listed herein, there are no shares Para Mas has agreed to
register under the Securities Act. There are 21,303,216 common shares being
registered pursuant to this registration statement, 11,111,111 of which will be
offered by Para Mas and 10,192,105 of which may be offering by the selling
shareholders.
RULE 144 SHARES
A total of 281,248,039 shares of our common stock is available for resale to the
public in accordance with the volume and trading limitations of Rule 144 of the
Act.
In general, under Rule 144 as currently in effect, a person who has beneficially
owned shares of a company's common stock for at least one year is entitled to
sell within any three month period a number of shares that does not exceed the
greater of:
1. 1% of the number of shares of the company's common stock then outstanding
which, in our case equals 2,812,480 shares as of the date of this prospectus; or
2. The average weekly trading volume of the company's common stock during
the four calendar weeks preceding the filing of a notice on form 144 with
respect to the sale.
Sales under Rule 144 are also subject to manner of sale provisions and notice
requirements and to the availability of current public information about the
company.
Under Rule 144(k), a person who is not one of the company's affiliates at any
time during the three months preceding a sale, and who has beneficially owned
the shares proposed to be sold for at least 2 years, is entitled to sell shares
without complying with the manner of sale, public information, volume limitation
or notice provisions of Rule 144. There are 99,741,261 common shares of Para
Mas that may be sold at the present time under Rule 144(k).
The Division of Corporate Finance of the Securities and Exchange Commission has
taken the position that promoters or affiliates of a blank check company and
their transferees would act as underwriters under the Securities Act of 1933
when reselling the securities of the blank check company and that the securities
could only be resold through a registered offering and that Rule 144 would not
be available for those resale transactions. Accordingly, Rule 144 may not be
available for the resale of all issued and outstanding shares of Para Mas.
PENNY STOCK RULES
The Securities Exchange Commission has also adopted rules that regulate
broker-dealer practices in connection with transactions in penny stocks. Penny
stocks are generally equity securities with a price of less than $5.00 (other
than securities registered on certain national securities exchanges or quoted on
-27-
the Nasdaq system, provided that current price and volume information with
respect to transactions in such securities is provided by the exchange or
system). The penny stock rules require a broker-dealer, prior to a transaction
in a penny stock not otherwise exempt from those rules, deliver a standardized
risk disclosure document prepared by the Commission, which:
- - contains a description of the nature and level of risk in the market for
penny stocks in both public offerings and secondary trading;
- - contains a description of the broker's or dealer's duties to the customer
and of the rights and remedies available to the customer with respect to a
violation to such duties or other requirements of Securities' laws;
- - contains a brief, clear, narrative description of a dealer market,
including "bid" and "ask" prices for penny stocks and significance of the
spread between the "bid" and "ask" price;
- - contains a toll-free telephone number for inquiries on disciplinary
actions;
- - defines significant terms in the disclosure document or in the conduct of
trading in penny stocks; and
- - contains such other information and is in such form (including language,
type, size and format), as the Commission shall require by rule or regulation.
The broker-dealer also must provide, prior to effecting any transaction in a
penny stock, the customer:
- - with bid and offer quotations for the penny stock;
- - the compensation of the broker-dealer and its salesperson in the
transaction;
- - the number of shares to which such bid and ask prices apply, or other
comparable information relating to the depth and liquidity of the market for
such stock; and
- - monthly account statements showing the market value of each penny stock
held in the customer's account.
In addition, the penny stock rules require that prior to a transaction in a
penny stock not otherwise exempt from those rules; the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitability statement.
These disclosure requirements will have the effect of reducing the trading
activity in the secondary market for our stock because it will be subject to
these penny stock rules and because many broker-dealers refuse to enter into
penny stock transactions rather than comply with the rules. Therefore,
stockholders may have difficulty selling those securities.
HOLDERS OF OUR COMMON STOCK
As of the date of this registration statement, we have approximately 725
registered shareholders.
DIVIDENDS
There are no restrictions in our Articles of Incorporation or bylaws that
restrict us from declaring dividends. The Nevada Revised Statutes, however, do
prohibit us from declaring dividends where, after giving effect to the
distribution of the dividend:
1. We would not be able to pay our debts as they become due in the usual
course of business; or
-28-
2. Our total assets would be less than the sum of our total liabilities,
plus the amount that would be needed to satisfy the rights of shareholders who
have preferential rights superior to those receiving the distribution.
We have not declared any dividends. We do not plan to declare any dividends in
the foreseeable future.
EXECUTIVE COMPENSATION
COMPENSATION
The following table sets forth certain information as to our officers and
Directors.
Annual Compensation Table
Annual Compensation Long Term Compensation
------------------------- -----------------------
Other All
Annual Other
Com- Com-
pen- Restricted pen-
Fiscal sa- Stock Options/ LTIP sa-
Name Title Year Salary Bonus tion Awarded SARs(#) payouts($)tion
- ---- ----- --------- -------- ----- ------ ------- ------- --------- ----
Gary Pres. 2004 $ 0 0 0 0 0 0 0
Whiting and 2003 $15,000 0 0 0 0 0 0
Dir. 2002 $ 0 0 0 0 0 0 0
EMPLOYMENT AGREEMENTS
No officer or director has an employment agreement with Para Mas at the present
time.
FINANCIAL STATEMENTS
Index to Financial Statements:
1. Financial Statements for the three and nine months ended September 30,
2004, including:
a. Balance Sheet;
b. Statements of Income and Accumulated Deficit;
c. Statements of Cash Flows;
d. Notes to Financial Statements.
2. Independent Auditors' Report;
3. Financial Statements for the fiscal years ending December 31, 2003 and
2002, ncluding:
a. Balance Sheet;
-29-
b. Statements of Income and Accumulated Deficit;
c. Statement of Changes in Stockholders Equity
d. Statements of Cash Flows;
e. Notes to Financial Statements.
-30-
PARA MAS INTERNET, INC.
FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2004
(UNAUDITED)
F-1
PARA MAS INTERNET, INC.
-----------------------
BALANCE SHEET
-------------
AS OF SEPTEMBER 30, 2004
------------------------
(UNAUDITED)
-----------
ASSETS
As of
-----------
9/30/2004
-----------
CURRENT ASSETS
Cash. . . . . . . . . . . . . . . . . . . . $ 1,546
Inventory . . . . . . . . . . . . . . . . . 3,962
Accounts Receivable . . . . . . . . . . . . 388,976
Note Receivable - Related Party . . . . . . 68,355
-----------
Total current assets . . . . . . . . . . 462,839
-----------
FIXED ASSETS
Accumulated Depreciation . . . . . . . . . (17,504)
Vehicle. . . . . . . . . . . . . . . . . . 24,850
Office Equipment . . . . . . . . . . . . . 11,131
Computer Equipment. . . . . . . . . . . . 11,894
Land. . . . . . . . . . . . . . . . . . . 470,500
-----------
Total Fixed Assets . . . . . . . . . 500,871
-----------
OTHER ASSETS
Service Receivable . . . . . . . . . . . . 4,500
Intangible Assets. . . . . . . . . . . . . 23,900
-----------
OTHER ASSETS . . . . . . . . . . . . . . . . . 28,400
-----------
TOTAL ASSETS . . . . . . . . . . . . . . . . . $ 992,110
===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable. . . . . . . . . . . . . . 66,538
Interest payable. . . . . . . . . . . . . . 833
Salary payable. . . . . . . . . . . . . . . 1,301,330
Payroll liabilities . . . . . . . . . . . . 36,238
Note payable - Related Party . . . . . . . 406,086
-----------
Total current liabilities. . . . . . . . 1,811,025
-----------
LONG TERM LIABILITIES
Notes payable. . . . . . . . . . . . . . . 86,546
-----------
TOTAL LIABILITIES. . . . . . . . . . . . . . . 1,897,571
-----------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $0.001 par value,
100,000,000 shares
authorized, 291,290,144 shares
issued and outstanding as of
September 30, 2004 . . . . . . . . . . . . 76,237
Additional paid in capital . . . . . . . . . . 1,094,626
Accumulated deficit. . . . . . . . . . . . . . (2,076,324)
-----------
Total stockholders' equity (deficit) . . (905,461)
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY . . $ 992,110
===========
The accompanying notes to financial statements should be
Read in conjunction with this Balance Sheet
F-2
PARA MAS INTERNET, INC.
-----------------------
STATEMENTS OF INCOME AND ACCUMULATED DEFICIT
--------------------------------------------
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2004
------------------------------------------------------
(UNAUDITED)
-----------
For the three months ended For the nine months ended
September 30, 2004 September 30, 2004
--------------------------------------------------------
REVENUES . . . . . . . . . . . . . . $ 20,565 $ 351,086
COST OF REVENUES . . . . . . . . . . 17,057 36,823
--------------------------------------------------------
GROSS PROFIT (LOSS). . . . . . . . . $ 3,508 $ 314,263
--------------------------------------------------------
EXPENSES:
General and administrative. . . . 163,414 398,328
Depreciation. . . . . . . . . . . 1,547 4,641
Professional fees . . . . . . . . 3,500 36,935
--------------------------------------------------------
Total expenses . . . . . . . . 168,461 439,904
--------------------------------------------------------
Operating income (loss). . . . . . . (164,953) (125,641)
--------------------------------------------------------
OTHER INCOME (EXPENSE)
Other expenses. . . . . . . . . . - 896
--------------------------------------------------------
Total other income (expense) . - 896
--------------------------------------------------------
LOSS FROM OPERATIONS . . . . . . . . (164,953) (124,745)
--------------------------------------------------------
NET INCOME (LOSS). . . . . . . . . . (164,953) (124,745)
========================================================
ACCUMULATED DEFICIT - Beginning. . . (1,911,371) (1,951,579)
ACCUMULATED DEFICIT - End. . . . . . (2,076,324) (2,076,324)
LOSS PER SHARE BASIC AND DILUTED . . $ (0.00) $ (0.00)
========================================================
PER SHARE INFORMATION:
Basic and dilulted Weighted average
Number of Shares Outstanding . . . 291,290,144 291,290,144
========================================================
The accompanying notes to financial statement should be
read in conjunction with these Statements of Income and Accumulated Deficit
F-3
PARA MAS INTERNET, INC.
-----------------------
STATEMENTS OF CASH FLOWS
------------------------
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2004
------------------------------------------------------
(UNAUDITED)
-----------
Nine Months Three Months
Ended Ended
9/30/2004 9/30/2004
----------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income / (Loss) from Operations. . . . . . $ 124,745 $ 164,953
Adjustments to reconcile net income
to net cash provided
Depreciation Expense . . . . . . . . . . . . . 4,641 1,547
(Increase) / Decrease in Accounts Receivable . (148,975) (3,976)
(Increase) / Decrease in Inventory . . . . . . (3,962) (3,962)
(Increase) / Decrease in Note Receivable . . . (81,180) -
(Increase) / Decrease in Note Payable. . . . . 90,738 85,381
Increase / (Decrease) in Payroll Liability . . 146,520 37,500
Increase / (Decrease) in Accounts Payable. . . 38,077 21,144
----------------------------
Net cash provided by (used in) operating
activities. . . . . . . . . . . . . . . . (78,886) (27,319)
----------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
(Purchase)/Sale of Equipment . . . . . . . . . (5,131) -
----------------------------
Net cash provided by (used in) investing
activities. . . . . . . . . . . . . . . . (5,131) -
----------------------------
Net increase (decrease) in cash. . . . . . . . . (84,017) (27,319)
Balance at beginning of Period . . . . . . . . . 85,563 28,865
End of Period. . . . . . . . . . . . . . . . . . $ 1,546 $ 1,546
============================
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 independent accountants review report and the notes
to financial statement should be read in conjunction with these
Statements of Cash Flows
F-4
PARA MAS INTERNET, INC.
-----------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
FOR THE THREE MONTHS ENDED SEPTEMBER 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 September 30, 2004 the Company has an accumulated deficit of
$2,075,824.
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 $164,953
during the period ended September 30, 2004. The Company's current liabilities
exceeded its current assets by $1,348,186.
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 September 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-5
PARA MAS INTERNET, INC.
-----------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
FOR THE THREE MONTHS ENDED SEPTEMBER 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 September 30, 2004.
F-6
PARA MAS INTERNET, INC.
-----------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2004
--------------------------------------------
(UNAUDITED)
---------
NOTE 1 - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
Foreign CurrencyTranslation - 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 $2,075,824. 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 September 30, 2004.
NOTE 4 - WARRANTS AND OPTIONS
As of September 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 September 30, 2004, there is approximately $37,500 of
accrued payroll, with corresponding payroll liabilities (taxes) accrued of $0,
as the officer is deemed an independent contractor. The total accrued payroll
and payroll liabilities as of September 30, 2004 is $1,301,330 and $36,238,
respectively.
NOTE 6 - REVENUE AND ACCOUNTS RECEIVABLE
There were no sales of marketing rights during the three months ended September
30, 2004.
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) to Fred
Gagnon, who was the previous Senior Vice President of the recently acquired
Amerigroup, Inc. 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-7
AMERIGROUP, INC.
----------------
(A DEVELOPMENT STAGE COMPANY)
-----------------------------
CONSOLIDATED FINANCIAL STATEMENTS
---------------------------------
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002
----------------------------------------------
(AUDITED)
---------
F-8
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of
Amerigroup, Inc.:
We have audited the accompanying balance sheet of Amerigroup, Inc. (a Nevada
Corporation) as of December 31, 2003 and 2002, and the related statement of
income and accumulated deficit, changes in stockholders' equity, and cash flows
for the twelve months ended December 31, 2003 and 2002. All information
included in these financial statements is the representation of the management
of Amerigroup, Inc. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Amerigroup, Inc. as of December
31, 2003 and 2002, and the result of its operations and its cash flows for the
periods ended December 31, 2003 and 2002, in accordance with generally accepted
accounting principles in the United States of America.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As disclosed in Note 5 to the financial
statements, the Company has had limited operations and has not established a
long-term source of revenue. This raises substantial doubt about its ability to
continue as a going concern. Management's plan in regards to these matters is
also described in Note 5. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/S/ CFO Advantage, Inc.
June 9, 2004
Las Vegas, Nevada
F-9
AMERIGROUP, INC.
----------------
(A DEVELOPMENT STAGE COMPANY)
-----------------------------
BALANCE SHEETS
--------------
AS OF DECEMBER 31, 2003 AND 2002
--------------------------------
(AUDITED)
ASSETS
Audited Audited
12/31/2003 12/31/2002
----------- -----------
CURRENT ASSETS
Cash. . . . . . . . . . . . . . . $ 85,563 $ 1,489
----------- -----------
OTHER CURRENT ASSETS
Accounts Receivable . . . . . . . 180,000 -
Note Receivable - Related Party . 7,543 -
----------- -----------
Total Other Current Assets . . . . . 187,543 -
----------- -----------
FIXED ASSETS
Accumulated depreciation. . . . . (12,863) (6,675)
Vehicle . . . . . . . . . . . . . 24,850 24,850
Office Equipment. . . . . . . . . 6,000 -
Computer Equipment. . . . . . . . 11,894 8,894
Land. . . . . . . . . . . . . . . 470,500 115,000
----------- -----------
Total Fixed Assets . . . . . . . . . 500,382 142,069
----------- -----------
OTHER ASSETS
Service Receivable. . . . . . . . 4,500 6,500
Intangible assets . . . . . . . . 23,900 23,900
----------- -----------
Total Other Assets . . . . . . . . . 28,400 30,400
----------- -----------
Total Assets . . . . . . . . . . . . $ 801,888 $ 173,958
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
LIABILITIES
CURRENT LIABILITIES
Interest Payable. . . . . . . . . $ 833 $ 833
Accounts payable. . . . . . . . . 28,462 28,462
Salary payable. . . . . . . . . . 1,226,828 988,328
Payroll liabilities . . . . . . . 36,238 36,238
----------- -----------
Total Current Liabilities. . . . . . 1,292,361 1,053,861
OTHER CURRENT LIABILITIES
Note payable - Related Party. . . 242,252 171,488
----------- -----------
Total Other Current Liabilities. . . 242,252 171,488
LONG TERM LIABILITIES
Notes payable . . . . . . . . . . 47,991 26,875
----------- -----------
Total Liabilities. . . . . . . . . . 1,582,604 1,252,225
----------- -----------
STOCKHOLDERS' EQUITY
Common stock, $0.0001 par value,
500,000,000 shares authorized,
276,418,600, 273,479,000 and
266,066,000, shares issued
and outstanding
as of December 31, 2003,.
Common Stock. . . . . . . . . 27,642 27,348
Additional paid in capital -
common stock. . . . . . . . . . . 1,871,438 1,136,732
Subscribed Stock. . . . . . . . . (432,936) (377,655)
Accumulated Deficit . . . . . . . (2,246,860) (1,864,692)
----------- -----------
Total Stockholders' Equity . . . . . (780,716) (1,078,267)
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT). . . . . . . . . $ 801,888 $ 173,958
=========== ===========
The accompanying independent auditors report and notes to
financial statements should be read in conjunction
with this Balance Sheet
F-10
AMERIGROUP, INC.
----------------
(A Development Stage Company)
-----------------------------
STATEMENTS OF INCOME AND ACCUMULATED DEFICIT
--------------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002
----------------------------------------------
AUDITED
-------
Audited Audited
1/1/2003 1/1/2002
to to
12/31/2003 12/31/2002
------------ ------------
REVENUES. . . . . . . . . . . . . . . . . $ 419,323 $ 102,465
COST OF REVENUES. . . . . . . . . . . . . 29,591 34,230
------------ ------------
GROSS PROFIT (LOSS) . . . . . . . . . . . 389,732 68,234
------------ ------------
EXPENSES:
General and administrative . . . . . . 468,868 256,598
Consulting . . . . . . . . . . . . . . 42,950 113,500
Depreciation . . . . . . . . . . . . . 12,374 5,100
Interest Expense . . . . . . . . . . . 1,300 4,959
Payroll. . . . . . . . . . . . . . . . 243,500 556,337
Taxes. . . . . . . . . . . . . . . . . 2,908 18,654
------------ ------------
Total Expenses. . . . . . . . . . . . . . 771,900 955,149
------------ ------------
Deficit from operations
in the development stage . . . . . . . (382,168) (886,914)
ACCUMULATED DEFICIT, beginning of period. (1,864,692) (977,778)
------------ ------------
ACCUMULATED DEFICIT, end of period. . . . $ (2,246,860) $ (1,864,692)
============ ============
PER SHARE INFORMATION:
Weighted average number
of shares outstanding
(basic and diluted) . . . . . . . . . 275,438,733 272,182,984
============ ============
Earnings Per Share of common stock
(basic and diluted) . . . . . . . . . $ (0.00) $ (0.00)
============ ============
The accompanying independent auditors report and notes to financial
Statements should be read in conjunction with this Statement of Income
and Accumulated Deficit
F-11
AMERIGROUP, INC.
----------------
(A Development Stage Company)
-----------------------------
STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY
-------------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002
----------------------------------------------
AUDITED
-------
Common Common Additional
Stock Stock Paid-in Subscription Income Total
Shares Amount Capital Receivable (Deficit) Equity
----------- ------------ ----------- -------------- ---------- -----------
Balance at December
31, 2001 266,060,000 26,606 405,574 (32,080) (977,778) (577,678)
Issuance of common
stock for cash . . . . 6,794,000 679 668,683 (345,575) - 323,788
Issuance of common
stock for services . . 375,000 38 37,500 - - 37,538
Issuance of common
stock for fixed assets 250,000 25 24,975 - - 25,000
Deficit for the year
ended December 31,
2002 - - - - (886,914) (886,914)
----------- ------------ ----------- -------------- ---------- -----------
Balance at December
31, 2002 273,479,000 27,348 1,136,732 (377,655) (1,864,692) (1,078,267)
Issuance of common
stock for cash . . . . 1,517,600 152 379,348 (55,281) - 324,219
Issuance of common
stock for fixed assets 1,422,000 142 355,358 - - 355,500
Deficit for the period
ended December 31,
2003 - - - - (382,168) (382,168)
----------- ------------ ----------- -------------- ---------- -----------
Balance at December
31, 2003 276,418,600 $ 27,642 $ 1,871,438 $(432,936) $(2,246,860) $ (780,717)
=========== =========== ============= ============= ============ ============
The accompanying independent auditors report and notes to financial statements
should be read in conjunction with this Statement of Changes in Stockholders
Equity
F-12
AMERIGROUP, INC.
----------------
(A Development Stage Company)
-----------------------------
STATEMENTS OF CASH FLOWS
------------------------
FOR THE PERIOD ENDED DECEMBER 31, 2003
--------------------------------------
AUDITED
-------
Audited
Twelve months ended
12/31/2003
--------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Deficit from operations in the development stage $ (382,168)
Depreciation . . . . . . . . . . . . . . . . . 12,374
Subscribed stock . . . . . . . . . . . . . . . (55,281)
Accounts receivable. . . . . . . . . . . . . . (180,000)
Salary payable . . . . . . . . . . . . . . . . 238,500
--------------------
Net cash provided by Operating Activities. . . . (366,575)
--------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Notes payable - related party. . . . . . . . . 179,648
Additional paid in capital . . . . . . . . . . 256,744
--------------------
Net cash provided by Financing Activities. . . . 436,392
--------------------
Balance at beginning of period . . . . . . . . . . 15,746
Net increase in cash . . . . . . . . . . . . . . . 69,817
--------------------
Balance at end of period . . . . . . . . . . . . . $ 85,563
====================
SUPPLEMENTAL INFORMATION:
Interest Paid. . . . . . . . . . . . . . . . . . . $ 1,300
====================
Taxes Paid . . . . . . . . . . . . . . . . . . . . $ 2,908
====================
The accompanying independent auditors report and notes to financial
Statements should be read in conjunction with this
Statement of Cash Flows
F-13
AMERIGROUP, INC.
----------------
(A DEVELOPMENT STAGE COMPANY)
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002
----------------------------------------------
(AUDITED)
---------
NOTE 1 - ORGANIZATION AND PURPOSE
Amerigroupmall Inc. ("Amerigroup") is the parent company and head of the
respective divisions, WorldGroup Inc. ("Worldgroup") and Mobilescan Inc.
("Mobilescan"). Amerigroupmall Inc. was previously a division of Worldgroup.
When Amerigroup was incorporated, Worldgroup remained a majority shareholder in
the company. Amerigroup was subsequently merged with Worldgroup during 2002.
Given the majority percentage ownership and control of the divisions, for 2002
and 2001, the financial statements of Amerigroup include the consolidated
financial information of Worldgroup and Mobilescan as well.
Mobilescan was previously a subsidiary of Amerigroup. Upon the merger of
Worldgroup and Amerigroup, Mobilescan became a direct subsidiary of the parent
company, Amerigroup. The financial statements here within represent the
activities of Amerigroup, Mobilescan, and Worldgroup, for the periods ending
December 31, 2002 and 2001, respectively.
The purpose of Amerigroup and Worldgroup is a provider of one source, the least
of cross-markets promotionals for local and national business under the name and
style of Itzyourmall.com; a complete e-commerce solutions provider for local and
national business with benefit services for individuals, families and
organizations as evidenced by a personalized loyality rewards card with a
diverse network of other services which become available to card holders. The
network of services is offered under the co-brand name "itzyourmall" evidenced
by a logo included on the card.
Mobilescan, Inc. was incorporated under the laws of the state of Nevada on
September 27, 2002. While the transactions of the Mobilescan, Inc. were treated
as if it were a corporation, until such time of incorporation, the company was
organized as a partnership, with each of the individual owners being partners.
Upon incorporation, the partnership interests were exchanged for shares of stock
of the corporation. All income and losses derived up and until the time of
incorporation would be attributable to the individual partners themselves,
rather than the company as a whole. Given the majority ownership and control of
Worldgroup over Mobilescan, all income and expenses during the entire period are
reflected in the consolidated financial statements of Amerigroup.
Mobilescan, Inc. is a provider of a national lawyers affinity program which
utilizes an on-line, one source Internet Mall, CD Rom law libraries and custom
Legal Forms and Billing Software; a marketing program for attorneys through the
virtual offices under the name and style of mobilescaninc.com; and complete
benefits services for individuals, families and law offices as evidenced by a
service card.
No federal income tax return has been filed on behalf of the Company or any of
its subsidiaries with respect to the years ending December 31, 2003 and 2002.
F-14
AMERIGROUP, INC.
----------------
(A DEVELOPMENT STAGE COMPANY)
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002
----------------------------------------------
(AUDITED)
---------
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
- ---------------------
The Company's policy is to prepare the financial statements on the accrual basis
of accounting. The fiscal year end is December 31.
Cash and Cash Equivalents
- ----------------------------
Cash and cash equivalents consist of highly liquid investments with maturities
of three months or less when purchased.
Use of Estimates
- ------------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires that management make estimates and assumptions,
which affect the reported amounts of assets and liabilities at the date of the
financial statements and revenues and expenses for the period reported. Actual
results may differ from these estimates.
Prepaid Expenses
- -----------------
Prepaid expenses are prepayments made to secure the use of assets or the receipt
of services at a future date.
Investments and Marketable Securities
- ----------------------------------------
The Company has adopted FASB No. 115. Equity securities are classified as
available for sale and reported at fair value.
Investments are recorded at the lower of cost or market. Any reductions in
market value below cost are shown as unrealized losses in the consolidated
statement of operations.
Inventory Valuation
- --------------------
Inventories are stated at the lower of cost or market, cost being determined on
the first in, first out (FIFO) basis.
Equipment
- ---------
Fixed assets acquired will be stated at cost. Expenditures that materially
increase the life of the assets are capitalized. Ordinary maintenance and
repairs are charged to expense as incurred. When assets are sold or otherwise
disposed of, the cost and the related accumulated depreciation and amortization
are removed from the accounts and any resulting gain or loss is recognized at
that time. Depreciation is computed primarily on the straight-line method and
accelerated method for financial statement purposes over the following estimated
useful lives:
F-15
AMERIGROUP, INC.
----------------
(A DEVELOPMENT STAGE COMPANY)
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002
----------------------------------------------
(AUDITED)
---------
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Computer Equipment 5 Years
Furniture & Fixtures 7 Years
Office Equipment 5 Years
The depreciation expense for the twelve months ended December 31, 2003 was
$6,187.
Intangible Assets
- ------------------
The Company has adopted SFAS No. 142, "Goodwill and Other Intangible Assets",
which requires that goodwill and other indefinite lived intangible assets are no
longer amortized, but renewed annually, or sooner if deemed necessary, for
impairment. Under guidance from SFAS No. 142, management has no goodwill or
other intangible assets as of December 31, 2003.
Compensated Absences
- ---------------------
The Company has made no accrual for vacation or sick pay because the Company
does not provide for these benefits. Therefore, the amount of compensation is
not reasonably estimable.
Summary of Non-Cash Transactions
- -----------------------------------
There were non-cash transactions during the twelve-month period ending December
31, 2003 and the twelve-month period ending December 31, 2002 and 2001,
respectively. (See Note 4)
Consolidation Policy
- ---------------------
The accompanying consolidated financial statements include the accounts of
Amerigroup and its different business segments: Mobilescan, and Worldgroup,
All significant inter-company balances and transactions have been eliminated.
Stock Based Compensation
- --------------------------
The Company accounts for stock based compensation in accordance with SFAS 123,
"Accounting for Stock-Based Compensation." The provisions of SFAS 123 allow
companies to either expense the estimated fair value of stock options or to
continue to follow the intrinsic value method set forth in APB Opinion 25,
"Accounting for Stock Issued to Employees" (APB 25) but disclose the pro forma
effects on net income (loss) had the fair value of the options been expensed.
The Company has elected to continue to apply APB 25 in accounting for its stock
option incentive plans. The Company has issued its common stock as compensation
to non-employees. The Company measures the amount of stock-based compensation
based on the fair value of the equity instrument issued or the services or goods
provided as of the earlier of (1) the date at which an agreement is reached with
the non-employee as to the number of shares to be issued for performance, or (2)
the date at which the non-employees' performance is complete.
Dividend Policy
- ----------------
The Company has not yet adopted any policy regarding payment of dividends.
F-16
AMERIGROUP, INC.
----------------
(A DEVELOPMENT STAGE COMPANY)
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002
----------------------------------------------
(AUDITED)
---------
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income Taxes
- -------------
The Company experienced losses during the previous fiscal tax year reported.
The Company will review its need for a provision for federal income tax after
each operating quarter. The Company has adopted FASB No. 109. While the
Company has not filed tax returns for the previous years, it is subject to
failure to file penalties and interest charges by the Internal Revenue Service.
Given the losses accumulated, the Company does not anticipate a tax liability;
however, the ability to use the potential net operating loss is jeopardized by
its failure to file. The minimum penalty for a return that is over 60 days late
is the smaller of the tax due or $100.
Revenue and Cost Recognition
- -------------------------------
The company plans on recognizing revenue using the accrual basis of accounting
and will thus recognize the revenue when earned. As discussed in Staff
Accounting Bulletin, Topic 13, the revenue is recognized when (1) persuasive
evidence of an arrangement exists, (2) delivery has occurred or services have
been rendered, (3) the seller's price to the buyer is fixed or determinable, and
(4) collectibility is reasonably assured.
Research and Development
- --------------------------
The Company expenses its research and development in the periods incurred.
Comprehensive Income
- ---------------------
Statements of Financial Accounting Standards No. 130, Reporting Comprehensive
Income (SFAS 130), requires that total comprehensive income be reported in the
financial statements. The Company does not have any items considered to be
other comprehensive income for the years ended December 31, 2003 and December
31, 2002 and 2001, respectively.
Earnings Per Share Calculations
- ----------------------------------
Basic earnings per common share, ("EPS") is computed by dividing income
available to common stockholders by the weighted-average number of common shares
outstanding for the period. The weighted-average number of common shares
outstanding for computing basic EPS was 2,024,751, for the year ended December
31, 2003. Diluted EPS reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or converted
into common stock. The weighted-average number of common shares outstanding for
computing diluted EPS was equal to the basic earnings per share for the period
ended December 31, 2003.
Statement of Cash Flows
- --------------------------
The statement of cash flows classifies changes in cash and cash equivalents
according to operating, investing, or financing activities. For purposes of the
statement of cash flows, the Company considers all highly liquid investments
purchased with maturity of three months or less to be cash equivalents.
Advertising
- -----------
Advertising costs are expensed when incurred. There were no advertising
expenses for the year ended December 31, 2003.
F-17
AMERIGROUP, INC.
----------------
(A DEVELOPMENT STAGE COMPANY)
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002
----------------------------------------------
(AUDITED)
---------
NOTE 3 - RELATED PARTY
Mobile Scan's Senior Executive Vice President, Freddy H. Gagon was held liable
in a state securities litigation resulting in a judgment issued on July 19, 1996
and filed with the clerk of court on October 21, 1996. Case No. CV95-02582.
The Superior Court of the State of Arizona in the County of Maricopa found that
Mr. Gagon had not registered to sell securities, had received commissions and
partnerships in exchange for the sale of securities, and that the documents of
the respective entities that were used to sell the securities made material
misrepresentations of fact. Damages of $700,000 were awarded to the plaintiffs.
Mr. Gagon has been permanently enjoined from selling unregistered or non-exempt
securities within the state of Arizona.
The officer's of the company assisted in performing additional duties for
services above and beyond their employment contract for the company and were
paid for such services. For the period ending December 31, 2003, the officers
did not perform any additional services.
An officer of the Company, Gary Whiting has made loans to the company for
operations and expenses. On December 14, 2002, Mr. Whiting, exchanged the land,
whose value on the books was $90,000, with a third party for more loans for the
company against the loans due to him. The land was made up of 6 parcels at
$15,000 each.
The balance of the related party loans on the books of Amerigroup for the
previous periods are as follows:
12/31/2003 12/31/2002 12/31/2001
----------- ----------- -----------
Loan from Mobile Scan. . . . $ 60,342 $ - $ -
Loan from Gary Whiting . . . 79,209 61,242 26,165
Loan from Lawyours, Inc. . . 76,700 50,000 50,000
Loan from Lebarron & Carroll 20,000 20,000 -
Loan from Ticket Account . . 6,001 3,455 -
----------- ----------- -----------
$ 242,252 $ 134,696 $ 76,165
NOTE 4 - STOCKHOLDERS' EQUITY
Stock Issuances
- ----- ---------
A chronological history of Stockholders' Equity is as follows:
Amerigroup, Inc.
- -----------------
June 13, 2001 - Amerigroup, Inc. incorporated in Nevada. The Company is
authorized to issue 500,000,000 shares of its $0.0001 par value common stock.
April 24, 2001 through October 8, 2001 - Amerigroup Inc. sold $228,680 worth of
stock (264,025,000 shares) to 13 different investors with $26,403 as common
stock and $202,278 as additional paid in capital, through 504 series A stock
offering.
January 7, 2002 through November 8, 2003 - Amerigroup Inc. sold $1,670,400 worth
of stock (12,393,600 shares) to 67 different investors with $1,239 as common
stock and $1,669,161 as additional paid in capital, through two 506 series B
stock offerings.
In 2001, 261,595,000 shares of common stock were issued for cash in the amount
of $269,800. Of the total amount, $26,097 was common stock and $275,784 was
additional paid in capital.
In 2001, 6,794,000 shares of common stock were issued for services in the amount
of $130,300. Of the total amount, $510 was common stock and $129,791 was
additional paid in capital.
F-18
AMERIGROUP, INC.
----------------
(A DEVELOPMENT STAGE COMPANY)
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002
----------------------------------------------
(AUDITED)
---------
NOTE 4 - STOCKHOLDERS' EQUITY (CONTINUED)
In 2002, 261,595,000 shares of common stock were issued for cash in the amount
of $323,788. Of the total amount, $680 was common stock and $668,683 was
additional paid in capital.
In 2002, 375,000 shares of common stock were issued for services in the amount
of $37,538. Of the total amount, $38 was common stock and $37,500 was
additional paid in capital.
In 2003, 250,000 shares of common stock were issued for cash in the amount of
$269,800. Of the total amount, $25 was common stock and $24,975 was additional
paid in capital.
Worldgroup, Inc.
- ----------------
May 24, 2001 - Worldgroup, Inc. incorporated in Nevada. The Company is
authorized to issue 500,000,000 shares of its $0.0001 par value common stock.
January 17, 2001 and April 16, 2001 - Worldgroup, Inc. sold $165,021 worth of
stock (250,000,000 shares) to 39 different investors with $25,000 as common
stock and $140,021 as additional paid in capital, through 504 stock offering.
In 2001, 234,804,000 shares of common stock were issued for cash in the amount
of $127,751. Of the total amount, $23,480 was common stock and $104,271 was
additional paid in capital.
In 2001, 375,000 shares of common stock were issued for services in the amount
of $538. Of the total amount, $1,470 was common stock and $35,750 was
additional paid in capital.
In 2001, 14,696,000 shares of common stock were issued for compensation in the
amount of $50. Of the total amount, $50 was common stock and $0 was additional
paid in capital.
Mobilescan, Inc.
- -----------------
September 27, 2002 - Mobilescan, Inc. incorporated in Nevada. The Company is
authorized to issue 500,000,000 shares of its $0.0001 par value common stock.
July 1, 2001 and October 8, 2001 - Mobilescan, Inc. sold $199,000 worth of stock
(10,200,000 shares) to 15 different investors with $1,020 as common stock and
$197,980 as additional paid in capital, through 504 stock offering.
August 13, 2002 and November 12, 2002 - Mobilescan, Inc. sold $292,500 worth of
stock (2,925,000 shares) to 17 different investors with $293 as common stock and
$292,207 as additional paid in capital, through 506 stock offering.
NOTE 5 - GOING CONCERN
The company's financial statements are prepared using the generally accepted
Accounting
F-19
AMERIGROUP, INC.
----------------
(A DEVELOPMENT STAGE COMPANY)
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002
----------------------------------------------
(AUDITED)
---------
NOTE 5 - GOING CONCERN (CONTINUED)
principles applicable to a going concern, which assumes the realization of
assets and liquidation of liabilities in the normal course of business. However,
the Company has no significant source of revenue. Without realization of
additional capital, it would be unlikely for the Company to continue as a going
concern. It is management's plan to seek additional capital.
NOTE 6 - WARRANTS AND OPTIONS
As of December 31, 2003 and December 31, 2002 and 2001, respectively, 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 7 - MINORITY INTEREST IN EARNINGS
As of December 31, 2002 and 2001, respectively, Amerigroup, Inc. held a 0%
interest in Worldgroup, Inc.
As of December 31, 2002 and 2001, respectively, Amerigroup, Inc. held a 91%
interest in Mobilescan, Inc.
NOTE 8 - MERGERS AND ACQUISITIONS
During the period covered by the above financial statements, Amerigroup merged
with WorldGroup during 2002. WorldGroup had previously been the majority
shareholder of Amerigroup.
NOTE 9 - RECENT PRONOUNCEMENTS
In April 2002, the Financial Accounting Standards Board released SFAS 145 which
is to be applied starting with fiscal years beginning after SFAS 145 eliminate
SFAS 4 "Reporting Gains and Losses from Extinguishments of Debt" and thus allows
for only those gains or losses on the extinguishments of debt that meet the
criteria of extraordinary items to be treated as such in the financial
statements. SFAS No. 145 also amends SFAS 13, "Accounting for Leases" to
require sale-leaseback accounting for certain lease modifications that have
economic effects that are similar to sale-leaseback transactions. The adoption
of SFAS No. 145 had no effect on the Company's reported financial positions,
results of operations or cash flows.
In June 2002, the Financial Accounting Standards Board released SFAS 146 which
is to be applied starting with fiscal years beginning after December 31, 2002.
SFAS 146 addresses significant issues regarding the recognition, measurement and
reporting of costs that are associated with exit and disposal activities,
including restructuring activities that are currently accounted for pursuant to
the guidance set forth in EITF Issue No. 94-3, "Liability Recognition for
Certain Employee Termination Benefits and Other Costs to Exit an Activity". The
Company will adopt this standard as required on January 1, 2003. Adoption of the
standard is not expected to have a material financial statement impact on the
Company.
In October 2002, the Financial Accounting Standards Board released SFAS 147
which is to be applied starting with transactions occurring on or after October
1, 2002. SFAS 147 addresses
F-20
AMERIGROUP, INC.
----------------
(A DEVELOPMENT STAGE COMPANY)
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002
----------------------------------------------
(AUDITED)
---------
NOTE 9 - RECENT PRONOUNCEMENTS (CONTINUED)
Acquisitions of Certain Financial Institutions, along with amending previous
SFAS issuances. The provisions of this Statement that relate to the application
of the purchase method of
accounting applies to all acquisitions of financial institutions, except
transactions between two or more mutual enterprises. The provisions of this
Statement that relate to the application of Statement 144 apply to certain
long-term customer-relationship intangible assets recognized in an acquisition
of a financial institution, including those acquired in transactions between
mutual enterprises. The Company has adopted this standard as required.
Adoption of this standard is not expected to have a material financial statement
impact on the Company.
In December 2002, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 148, "Accounting for Stock-Based
Compensation, Transition and Disclosure." SFAS No. 148 provides alternative
methods of transition for a voluntary change to the fair value based method of
accounting for stock-based employee compensation. SFAS No. 148 also requires
that disclosures of the pro forma effect of using the fair value method of
accounting for stock-based employee compensation be displayed more prominently
and in a tabular format. Additionally, SFAS No. 148 requires disclosure of the
pro forma effect in interim financial statements. The transition and annual
disclosure requirements of SFAS No. 148 are effective immediately. The interim
disclosure requirements are effective for the first quarter of 2003. The
adoption of SFAS No. 148 did not have a material effect on the Company's results
of operations or financial condition.
In January 2003, the FASB issued FASB Interpretation No. 46 (FIN 46),
"Consolidation of Variable Interest Entities, an Interpretation of Accounting
Research Bulletin No. 51." FIN 46 requires certain variable interest entities to
be consolidated by the primary beneficiary of the entity if the equity investors
in the entity do not have the characteristics of a controlling financial
interest or do not have sufficient equity at risk for the entity to finance its
activities without additional subordinated financial support from other parties.
FIN 46 is effective for all new variable interest entities created or acquired
after January 31, 2003. For variable interest entities created or acquired prior
to February 1, 2003, the provisions of FIN 46 must be applied for the first
interim or annual period beginning after June 15, 2003. Adoption of this
standard is not expected to have a material financial statement impact on the
Company.
F-21
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
As of February 18, 2004, the auditor-client relationship between the Registrant
and Russell Bedford Stefanou Mirchandani LLP of McLean, Virginia ("RBSM"), had
been terminated by the Registrant. The termination was not recommended or
approved by the board of directors of the Registrant. The Registrant does not
have an audit or similar committee. RBSM had been serving as the independent
accountant for the Registrant engaged as the principal accountant to audit the
Registrant's financial statements. The report of RBSM dated August 20, 2003,
with respect to its audit of the balance sheet of the Registrant as of June 30,
2003, and the related statements of losses, deficiency in stockholders' equity
and cash flows for the two years in the period then ended, stated that certain
factors listed in the report raised substantial doubt about the Registrant's
ability to continue as a going concern. Otherwise, no report of RBSM with
respect to any financial statement of the Registrant contained an adverse
opinion or a disclaimer of opinion, or was qualified or modified as to
uncertainty, audit scope, or accounting principles. Furthermore, during the
Registrant's two most recent fiscal years and, without limitation, the interim
period from June 30, 2003, the date of the last audited financial statements, to
February 18, 2004, the date of termination, RBSM and the Registrant have not had
any disagreements on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure. Para Mas has
authorized RBSM to respond fully to the inquiries of the successor accountant
on any matter or event.
During the Registrant's two most recent fiscal years and, without limitation,
the interim period from June 30, 2003, the date of the last audited financial
statements, to February 18, 2004, the date of termination, RBSM has not:
- - Advised the Registrant that the internal controls necessary for the
Registrant to develop reliable financial statements do not exist;
- - Advised the Registrant that information has come to RBSM's attention that
has led it to no longer be able to rely on management's representations, or that
has made it unwilling to be associated with the financial statements prepared by
management;
- - Advised the Registrant of the need to expand significantly the scope of
its audit, or that information has come to RBSM's attention during the time
period to which this paragraph applies, that if further investigated may; (i)
materially impact the fairness or reliability of either: a previously issued
audit report or the underlying financial statements; or the financial statements
issued or to be issued covering the fiscal period(s) subsequent to the date of
the most recent financial statements covered by an audit report (including
information that may prevent it from rendering an unqualified audit report on
those financial statements, or (ii) cause RBSM to be unwilling to rely on
management's representations or be associated with the Registrant's financial
statements; and due to RBSM's termination (due to audit scope limitations or
otherwise) or for any other reason, expanded the scope of RBSM's audit or
conduct such further investigation; or
- - Advised the Registrant that information has come to RBSM's attention that
it has concluded materially impacts the fairness or reliability of either (i) a
previously issued audit report or the underlying financial statements, or (ii)
the financial statements issued or to be issued covering the fiscal period(s)
subsequent to the date of the most recent financial statements covered by an
audit report (including information that, unless resolved to RBSM's
satisfaction, would prevent it from rendering an unqualified audit report on
those financial statements); and due to RBSM's termination or for any other
reason, the issue has not been resolved to RBSM's satisfaction prior to its
termination.
-31-
As of February 18, 2004, the Registrant engaged CFO Advantage, Inc. of Las
Vegas, Nevada, as the independent accountant for the Registrant to audit the
Registrant's financial statements. Prior to engaging the new accountant,
neither the Registrant nor any one on the Registrant's behalf consulted with the
new accountant on any matter. The Registrant has obtained the review by the new
accountant of this disclosure.
AVAILABLE INFORMATION
We have filed a registration statement on form SB-2 under the Securities Act of
1933 with the Securities and Exchange Commission with respect to the shares of
our common stock offered through this prospectus. This prospectus is filed as a
part of that registration statement and does not contain all of the information
contained in the registration statement and exhibits. Statements made in the
registration statement are summaries of the material terms of our contracts,
agreements or documents. We refer you to our registration statement and each
exhibit attached to it for a more complete description of matters involving our
company, and the statements we have made in this prospectus are qualified in
their entirety by reference to these additional materials. You may inspect the
registration statement and exhibits and schedules and any other materials filed
by us with the Securities and Exchange Commission at the Commission's principle
office in Washington, D.C. Copies of all or any part of the registration
statement may be obtained from the Public Reference Section of the Securities
and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549.
Please call the Commission at 1-800-SEC-0330 for further information on the
operation of the public reference room. The Securities and Exchange Commission
also maintains a web site at http://www.sec.gov that contains reports, proxy
------------------
statements and information regarding registrants that file electronically with
the Commission. Our registration statement and the referenced exhibits can also
be found on this site.
Upon the effective date of this registration statement and thereafter, we will
file with the Securities and Exchange Commission annual and quarterly periodic
reports on forms 10-KSB and 10-QSB respectively and current reports on form 8-K
as needed. We are not required to deliver annual reports to our shareholders
and at this time we do not intend to do so. We encourage our shareholders,
however, to access and review all materials that we will file with the
Securities and Exchange Commission at http://www.sec.gov.
------------------
Until ______, all dealers that effect transactions in these securities whether
or not participating in this offering, may be required to deliver a prospectus.
This is in addition to the dealer' obligation to deliver a prospectus when
Acting as underwriters and with respect to their unsold allotments or
subscriptions.
-32-
PART II -- INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our officers and directors are indemnified as provided by the Nevada Revised
Statutes and our bylaws.
Under the NRS, director immunity from liability to a company or its shareholders
for monetary liabilities applies automatically unless it is specifically limited
by a company's Articles of Incorporation. This is not the case with our
Articles of Incorporation. Excepted from that immunity are: (a) a willful
failure to deal fairly with the company or its shareholders in connection with a
matter in which the director has a material conflict of interest; (b) a
violation of criminal law unless the director had reasonable cause to believe
that his or her conduct was lawful or no reasonable cause to believe that his or
her conduct was unlawful; (c) a transaction from which the director derived an
improper personal profit; and (d) willful misconduct.
Our bylaws provide that we will indemnify our directors and officers to the
fullest extent not prohibited by Nevada law; provided, however, that we may
modify the extent of such indemnification by individual contracts with our
directors and officers; and, provided, further, that we shall not be required to
indemnify any director or officer in connection with any proceeding, or part
thereof, initiated by such person unless such indemnification: (a) is expressly
required to be made by law, (b) the proceeding was authorized by our Board of
Directors, (c) is provided by us, in our sole discretion, pursuant to the powers
vested us under Nevada law or (d) is required to be made pursuant to the bylaws.
Our bylaws provide that we will advance to any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a director or officer, of our company, or
is or was serving at the request of our company as a director or executive
officer of another company, partnership, joint venture, trust or other
enterprise, prior to the final disposition of the proceeding, promptly following
request therefor, all expenses incurred by any director or officer in connection
with such proceeding upon receipt of an undertaking by or on behalf of such
person to repay said amounts if it should be determined ultimately that such
person is not entitled to be indemnified under our bylaws or otherwise.
Our bylaws provide that no advance shall be made by us to an officer of our
company in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, if a determination is reasonably and promptly
made (a) by the Board of Directors by a majority vote of a quorum consisting of
directors who were not parties to the proceeding, or (b) if such quorum is not
obtainable, or, even if obtainable, a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, that the facts known
to the decision-making party at the time such determination is made demonstrate
clearly and convincingly that such person acted in bad faith or in a manner that
such person did not believe to be in or not opposed to the best interests of
Para Mas. An exception to this prohibition against advances applies when the
officer is or was a director of our company.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated costs of this offering are as follows:
-33-
Securities and Exchange Commission registration fee $ 950
Transfer Agent Fees $ 500
Accounting fees and expenses $ 20,000
Legal fees and expenses $ 10,000
Blue Sky fees and expenses $ 5,000
Miscellaneous $ 12,108
----------
Total (1) $ 50,000
==========
(1) If underwriters are used to sell the offering, they will be paid
commissions of up to 10% creating additional offering expenses of $500,000 if
all shares offered by Para Mas are sold.
All amounts are estimates other than the Commission's registration fee.
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
During the three years preceding the filing of this registration statement,
Registrant has not sold securities without registration under the Securities Act
of 1933, except as described below:
Beginning on or about January 7, 2002 and ending on or about May 15, 2002,
Amerigroup raised $1,407,900.00 from a total of 36 investors. The common shares
issued in the offering were offered and sold in reliance upon the exemption from
registration under Section 4(2) of the Securities Act and Rule 506 promulgated
thereunder relating to sales by an issuer not involving a public offering. The
recipients of the securities in each such transaction represented their
intention to acquire the securities for investment only and not with a view to
or for sale in connection with any distribution thereof and restrictive legends
were affixed to the share certificates and other instruments issued in such
transactions. All recipients either received adequate information about
Registrant or had access, through relationships with Registrant, to information
about Registrant.
Between August 13, 2002, and November 12, 2002, MobileScan, Inc.raised
$292,500.00 from a total of 15 investors. The common shares issued in the
offering were offered and sold in reliance upon the exemption from registration
under Section 4(2) of the Securities Act and Rule 506 promulgated thereunder
relating to sales by an issuer not involving a public offering. The recipients
of the securities in each such transaction represented their intention to
acquire the securities for investment only and not with a view to or for sale in
connection with any distribution thereof and restrictive legends were affixed to
the share certificates and other instruments issued in such transactions. All
recipients either received adequate information about Registrant or had access,
through relationships with Registrant, to information about Registrant.
Beginning on or about January 24, 2003 and ending on or about November 8, 2003,
Amerigroup raised $648,826.00 from a total of 32 investors. The common shares
issued in the offering were offered and sold in reliance upon the exemption from
registration under Section 4(2) of the Securities Act and Rule 506 promulgated
thereunder relating to sales by an issuer not involving a public offering. The
recipients of the securities in each such transaction represented their
intention to acquire the securities for investment only and not with a view to
or for sale in connection with any distribution thereof and restrictive legends
were affixed to the share certificates and other instruments issued in such
transactions. All recipients either received adequate information about
Registrant or had access, through relationships with Registrant, to information
about Registrant.
-34-
On April 12, 2004, Amerigroup underwent a recapitalization of its capital stock.
The recapitalization was consummated through a share-for-share exchange with a
corporation having no assets and no liabilities. As a result Amerigroup
shareholders held the same investment after the recapitalization as before the
recapitalization. Therefore, there was no investment decision made. As a
result, the exchange was exempt from registration since there was no offer and
no sale of any security. The class of persons involved in the exchange was
comprised of the shareholders of Amerigroup. There was no money raised or paid
and there was no public offering. Accordingly, the exchange was also exempt
from registration pursuant to section 4(2) of the Securities Act of 1933.
Amerigroup shareholders received a total of 276,418,600 shares of common stock
in the exchange
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 class of persons to whom the shares were issued was all persons holding a
claim or possible claim against Para Mas. The compromise of each claim was
negotiated individually in an isolated manner. There was no money raised or
exchanged and no machinery of a public offering was used. Accordinally, the
issuance of the shares reflected isolated transactions for the purpose of
compromising claims and possible claims and did not involve any public offering.
Therefore, the issuance of the shares was exempt from registration pursuant to
section 4(2) of the Securities Act of 1933.
ITEM 27. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
- ------------ --------------------
3.1 Articles of Incorporation (1)
3.2 Amendment to Articles of Incorporation (1)
3.3 Amendment to Articles of Incorporation (1)
3.4 Amendment to Articles of Incorporation (1)
3.5 Amendment to Articles of Incorporation (1)
3.6 Amendment to Articles of Incorporation
3.7 By-Laws (1)
5.1 Opinion of Gary R. Henrie, LLC, with consent to use (2)
10.1 Agreement and Plan of Tender Offer (2)
10.2 Subscription Agreement
10.3 Marketing Rights Agreement for Unit Markerting Rights
10.4 Marketing Rights Agreement for Territory Markerting Rights
10.5 Marketing Rights Agreement for Region Markerting Rights
23.1 Consent of CFO Advantage, Inc. for use of Audited Financial
Statements
(1) Previously filed as part of the 10-KSB on September 20, 2000.
(2) Previously filed with the Form SB-2/A on September 23, 2004.
ITEM 28. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
-35-
1. To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
- - To include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933;
- - To reflect in the prospectus any facts or events arising after the
effective date of this registration statement, or most recent post-effective
amendment, which, individually or in the aggregate, represent a fundamental
change in the information set forth in this registration statement; and
- - To include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or any
material change to such information in the registration statement.
2. That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
3. To remove from registration by means of a post-effective amendment any of
the securities being registered hereby which remain unsold at the termination of
the offering.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to our directors, officers and controlling persons pursuant to the
provisions above, or otherwise, we have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act, and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities, other
than the payment by us of expenses incurred or paid by one of our directors,
officers, or controlling persons in the successful defense of any action, suit
or proceeding, is asserted by one of our directors, officers, or controlling
person sin connection with the securities being registered, we will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification is against public policy as expressed in the Securities Act, and
we will be governed by the final adjudication of such issue.
-36-
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, in the City of Mesa,
State of Arizona on January 17, 2005.
PARA MAS CORP.
By: /s/ Gary Whiting
-----------------------------------
Gary Whiting, President
In accordance with the requirements of the Securities Act of 1933, the following
persons in the capacities and on the dates stated signed this registration
statement.
SIGNATURE CAPACITY IN WHICH SIGNED DATE
Principal Executive Officer
Principal Financial Officer
Principal Accounting Officer January 17, 2005
Director
/s/ Gary Whiting
- --------------------------
Gary Whiting