Rule 424(b)(3)
File No. 333-40790
100,000 SHARES
NEW PARADIGM PRODUCTIONS, INC.
COMMON STOCK
New Paradigm Productions, Inc., is offering, on a "best efforts
minimum/maximum" basis, up to 100,000 shares of $.001 par value common stock,
at a price of $1.00 per share, to be sold without any underwriting discounts,
commissions or other underwriting arrangements. Prior to this offering, there
has been no public market for the common stock. The common stock is not listed
on any national securities exchange or the Nasdaq Stock Market.
INVESTING IN OUR COMMON STOCK INVOLVES SUBSTANTIAL RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 4.
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 THE
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
Price to Commissions & Proceeds to New
Public(1)(3) Discounts(1)(2) Paradigm(2)(3)
Per Share $1.00 $.00 $1.00
Total Minimum $ 50,000 $.00 $ 50,000
Total Maximum $100,000 $.00 $100,000
1 We offer the securities for cash, payable when you subscribe. We will
manage the offering and sell the shares without any discounts or other
commissions.
2 Proceeds to New Paradigm are shown before deducting offering expenses
payable by us estimated at $15,000 for legal and accounting fees and
printing costs.
3 We will promptly deposit proceeds into an escrow account until we
receive subscriptions for at least 50,000 shares. If we do not receive
at least $50,000 in subscriptions within 120 days from the date of this
prospectus, or 150 days if we extend the offering period for 30
additional days, we will promptly refund all proceeds, without interest
or deduction, to subscribers. You will have no right to return or use
of your funds during the offering period, which may last up to 150 days.
The date of this prospectus is October 26, 2000
Table of contents Page
Prospectus summary . . . . . . . . . . . . . . . . . . . . . . . . . 3
Risk factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Dilution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Comparative data . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Use of proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Market information & dividend policy . . . . . . . . . . . . . . . . 9
Management's discussion and analysis . . . . . . . . . . . . . . . . 9
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Available information. . . . . . . . . . . . . . . . . . . . . . . .13
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
Principal shareholders . . . . . . . . . . . . . . . . . . . . . . .15
Certain transactions . . . . . . . . . . . . . . . . . . . . . . . .16
Description of securities. . . . . . . . . . . . . . . . . . . . . .17
Shares eligible for future sale. . . . . . . . . . . . . . . . . . .18
Plan of distribution . . . . . . . . . . . . . . . . . . . . . . . .19
Legal matters. . . . . . . . . . . . . . . . . . . . . . . . . . . .21
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
Financial statements . . . . . . . . . . . . . . . . . . . . . . . F-1
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PROSPECTUS SUMMARY
New Paradigm Productions, Inc. intends to produce and market
compact discs, cassette and video tapes, and books with a basic theme of
self improvement. The initial product will be meditation enhancing
music. Our address is 1393 Luckspring Drive, Salt Lake City, Utah
84016. The telephone number is (801) 466-9096.
THE OFFERING
Securities 100,000 shares of our common stock.
offered
Offering Prices $1.00 per share, payable in cash when
you subscribe.
Plan of DistributionWe will manage the offering and sell
the shares without any
discounts or other commissions.
Offering proceeds will be
held in escrow pending completion or
termination of the
offering. The offering will terminate
120 days from the date
of this prospectus (or 150 days if
extended by us for an
additional 30 days). Funds held in
escrow will be returned to
subscribers, usually within 10 business
days (to allow for clearance
of funds), without interest
or any deduction, unless the offering
is completed on or
before that date upon receipt of
subscriptions for at least the
minimum offering amount ($50,000).
Use of Proceeds We could receive as much as $100,000
from sale of the
common stock, if all 100,000 shares are
sold. Proceeds will
be used for advertising and marketing,
production of
compact discs and merchandise, purchase
of equipment, and
to provide additional working capital.
Escrow Agent Brighton Bank, 311 South State Street,
Salt Lake City, Utah
84111 will serve as escrow agent for
receipt of the proceeds
from this offering.
Transfer Agent Interwest Transfer Company, Inc., 1981
East 4800 South,
Suite 100, Salt Lake City, Utah 84117,
(801) 272-9294,
serves as transfer agent and registrar
for the securities.
Securities OutstandingWe are authorized to issue up to
24,000,000 shares of
common stock and presently have
1,000,000 shares of
common stock issued and outstanding.
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RISK FACTORS
You should not purchase these securities if you cannot afford to risk
the loss of your entire investment. The securities involve a high degree of
risk. You should carefully consider the following risk factors and all other
information in this prospectus before investing. You should not place undue
reliance on forward-looking statements in this prospectus. This prospectus
contains forward-looking statements that involve risks and uncertainties. In
this prospectus the words "anticipates","believes", "plans", "expects",
"future", "intends" and similar expressions are used to identify these
forward-looking statements. Our actual results could differ materially from
those anticipated in these forward-looking statements for many reasons,
including the risks we face as described in "Risk Factors" and elsewhere in
this prospectus.
WE DO NOT KNOW WHEN, IF EVER, THE BUSINESS MAY BECOME PROFITABLE. We
were only recently incorporated on October 1, 1999, and do not have any
history of operations. We have incurred net losses since inception and had an
accumulated deficit of $23,326 at June 30, 2000. We have not been successful
in establishing profitable operations. We may experience continued losses and
may not ever become profitable in the future.
YOU RISK THE LOSS OF YOUR ENTIRE INVESTMENT IF WE ARE NOT ABLE TO
CONTINUE AS A GOING CONCERN. The independent auditors have expressed
substantial doubt about our ability to continue as a going concern. Their
report includes a going concern qualification because the financial statements
do not include any adjustments that might result from the outcome of the
uncertainties which arise from the net losses and accumulated deficit.
THE AMOUNT OF CAPITAL CURRENTLY AVAILABLE TO US IS VERY LIMITED AND MAY
NOT ENABLE US TO DEVELOP AND EXPAND OUR BUSINESS AND GENERATE A PROFIT. Our
existing working capital is not sufficient to allow us to execute our business
plan. We are dependent upon receipt of the proceeds of this offering to
provide the capital necessary to develop and expand our proposed business. If
proceeds from this offering and our existing capital are not sufficient to
enable us to develop and expand our business and generate a profit, we may
need additional financing. We have no commitments or arrangements for
financing from commercial lenders or other sources.
SUBSCRIBERS RISK LOSS OF USE OF FUNDS SUBSCRIBED, WITH NO RETURN DURING
THE OFFERING PERIOD, AND NO ASSURANCE OF RECEIVING ANY INVESTMENT IN NEW
PARADIGM. You are not assured that all or any shares will be sold. Shares are
offered on a "best efforts, minimum-maximum basis". There is no underwriter
and no firm commitment from anyone, including affiliates, to purchase all or
any of the shares offered. If subscriptions for a minimum of 50,000 shares are
not received within the offering period, which could last up to 150 days,
escrow provisions require that all funds received be promptly refunded. If
refunded, subscribers will receive no interest on their funds. During the
offering period, they will not have any use or right to return of the funds.
Current shareholders may, but have made no commitment, nor indicated they
intend to, purchase shares in the offering. Any purchases by affiliates will
be made for investment purposes only and not for resale, but may be made in
order to reach the minimum offering amount.
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INVESTORS WILL NOT HAVE THE BENEFIT OF ASSURANCES THAT AN UNDERWRITER'S
INDEPENDENT DUE DILIGENCE REVIEW PROVIDES. Because we have not engaged the
services of an underwriter, the independent due diligence review ordinarily
performed by an underwriter and its legal counsel, has not been performed in
this offering. Investors will not have the assurance that an independent due
diligence review provides of the adequacy or accuracy of the information in
this prospectus about New Paradigm, its affairs and financial condition.
WE WOULD NOT BE ABLE TO CONTINUE OUR PROPOSED BUSINESS WITHOUT THE
SERVICES OF THE INDIVIDUAL WHO COMPRISES CURRENT MANAGEMENT. We are dependent
in the conduct of our proposed business upon the knowledge and experience of
this person. There are no other officers or directors. We have no employment
agreement and are not assured that the services of the officer will continue
to be available for any specified length of time.
YOU ARE NOT ASSURED YOU WILL BE ABLE TO SELL YOUR COMMON STOCK IN THE
FUTURE AT A PRICE WHICH EQUALS OR EXCEEDS THE OFFERING PRICE. The offering
price of the shares was arbitrarily determined by us and set at a level
substantially in excess of prices recently paid for securities of the same
class. The price bears no relationship to our assets, book value, net worth
or other economic or recognized criteria of value. In no event should the
offering price be regarded as an indicator of any future market price of our
securities.
YOU MAY NOT BE ABLE TO LIQUIDATE YOUR INVESTMENT READILY OR AT ALL WHEN
YOU NEED OR DESIRE TO SELL. There has been no active public trading market
for our common stock. You are not assured that an active trading market will
ever develop. If a market does develop, we cannot guarantee that it will
continue. We intend to apply to have our stock quoted on the OTC Bulletin
Board; however, we cannot guarantee that we will meet the eligibility criteria
for quotation. As a result, an investment in our common stock is and may
remain totally illiquid.
OUR COMMON STOCK IS CONSIDERED A LOW PRICED SECURITY UNDER RULES
PROMULGATED BY THE SECURITIES AND EXCHANGE COMMISSION. THE LIKELY EFFECT OF
DESIGNATION AS A LOW PRICED SECURITY IS TO DECREASE THE WILLINGNESS OF BROKER-
DEALERS TO MAKE A MARKET FOR THE STOCK, TO DECREASE THE LIQUIDITY OF THE STOCK
AND INCREASE THE TRANSACTION COST OF SALES AND PURCHASES OF THESE STOCKS
COMPARED TO OTHER SECURITIES. Under these rules, broker-dealers participating
in transactions in these securities must first deliver a risk disclosure
document which describes risks associated with these stocks, broker-dealers'
duties, customers' rights and remedies, market and other information, and make
suitability determinations approving the customers for these stock
transactions based on financial situation, investment experience and
objectives. Broker-dealers must also disclose these restrictions in writing,
provide monthly account statements to customers, and obtain specific written
consent of each customer.
INVESTORS IN THIS OFFERING WILL OWN LESS THAN 10% AND WILL HAVE NO
ABILITY TO REMOVE, CONTROL OR DIRECT MANAGEMENT. Our stock ownership is
concentrated in a small number of current stockholders. Present shareholders
will still own a majority of the outstanding securities upon completion of
this offering. The two largest shareholders, if acting together, will have
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absolute voting control.
DILUTION
You will suffer substantial dilution in the purchase price of your stock
compared to the net tangible book value per share immediately after the
purchase. The exact amount of dilution will vary depending upon the number of
shares that are sold.
Dilution is the difference between the offering price of $1.00 per
share, and the net tangible book value per share of common stock immediately
after its purchase. Net tangible book value per share is calculated by
subtracting total liabilities from total assets less intangible assets, and
then dividing by the number of shares of common stock then outstanding. Based
on the June 30, 2000, financial statements, net tangible book value was
$11,674 or about $.01 per common share. Before sale of any shares, 1,000,000
shares of common stock are outstanding.
If all shares get sold, which is not assured or likely, 1,100,000 shares
of common stock will then be outstanding. The estimated pro forma net
tangible book value, which gives effect to receipt of the net proceeds from
the offering and issuance of the additional shares of common stock, but does
not take into consideration any other changes in net tangible book value after
June 30, 2000, would then be $96,674 or about $.09 per share. This would
result in dilution to investors in this offering of $.91 per share, or 91% of
the public offering price of $1.00 per share. Net tangible book value per
share would increase to the benefit of present stockholders from $.01 before
the offering to $.09 after the offering, or an increase of $.08 per share due
to sale of the shares.
If only the minimum number of shares get sold, 1,050,000 shares of
common stock will then be outstanding. The post offering pro forma net
tangible book value will be $46,674 or approximately $.04 per share. This
would result in dilution to investors in this offering of $.96 per share, or
96% from the public offering price of $1.00 per share. Net tangible book
value per share would increase to the benefit of present stockholders from
$.01 prior to the offering to $.04 after the offering, or an increase of $.03
per share attributable to the purchase of the shares by investors in this
offering.
The following table shows the estimated net tangible book value per
share before and after sale of the shares and dilution to persons purchasing
the common stock, assuming only the minimum number of shares get sold, then
alternatively assuming all the shares get sold.
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Sale of: Minimum Maximum
Offering price/share $1.00 $1.00
Net tangible book value per share before sale $.01 $.01
Change due to investors in this offering .03 .08
Pro forma after sale .04 .09
Dilution $ .96 $ .91
Dilution will range somewhere in between these amounts if more than the
minimum but less than all shares get sold.
COMPARATIVE DATA
The following chart shows prices paid for, and proportionate ownership
in New Paradigm represented by, common stock purchased since inception by
initial shareholders and other present shareholders, compared to the price
that will be paid and proportionate ownership represented by common stock that
will be acquired by investors in this offering, under alternative minimum and
maximum offering assumptions.
MINIMUM OFFERING Shares PercentCash Paid Percent Avg
Owned Price/share
Present 1,000,000 95% $ 40,000 44% $0.04
Shareholders
New Investors 50,000 5% $ 50,000 56% $1.00
MAXIMUM OFFERING Shares PercentCash Paid Percent Avg
Owned Price/share
Present 1,000,000 91% $ 40,000 29% $0.04
Shareholders
New Investors 100,000 9% $100,000 71% $1.00
USE OF PROCEEDS
The net proceeds from the sale of the shares of common stock at the
offering price of $1.00 per share will vary depending upon the total number of
shares sold. We do not know if all or any shares will be sold. If all shares
get sold, which is not assured, we would receive gross proceeds of $100,000.
Regardless of the number of shares sold, we expect to incur offering expenses
estimated at $15,000 for legal, accounting, printing and other costs in
connection with the offering. The following table shows gross and net proceeds
under the minimum and maximum offering, and management's present estimate of
how net proceeds are expected to be used. Actual receipts and expenditures may
vary from these estimates. Until needed, we may invest the net proceeds in
investment-grade, short-term, interest bearing securities.
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Minimum Maximum
Offering Offering
Gross Proceeds $ 50,000 $100,000
Offering Expenses 15,000 15,000
NET OFFERING PROCEEDS $ 35,000 $ 85,000
Purchase of equipment (1) $ 5,000 $ 10,000
Production of compact discs (2) 5,000 15,000
Advertising and Marketing (3) 10,000 32,000
Management Compensation (4) 12,000 24,000
Initial Operating Expenses & Working Capital (5) 3,000 4,000
TOTAL $ 35,000 $ 85,000
1) New Paradigm intends to use a portion of the proceeds of this offering
to purchase computer and recording equipment that will enable it to
handle recording, editing and other production on a limited basis in
house. Larger scale reproduction requirements will still be sent to
professional production establishments on a contracted basis. The
amounts shown is our estimate of the cost of a computer system,
recording software and sound equipment.
2) New Paradigm intends to use a portion of the proceeds of this offering
for the initial production run of approximately 1000 to 3000 copies of
the first series of compact discs. The amount shown is our estimate of
production costs to produce music for sale on a retail or wholesale
basis.
3) A large portion of the proceeds will be for advertising and marketing.
In addition to the planned advertisements in the next few months, we
also intend to set up a Web site for customers to view, listen to and
purchase the various products via the internet. We plan to also market
other products which will include meditation art and compact discs with
pre-recorded music purchased from distributors at wholesale, for retail
sale on our Web site.
4) Management intends to be compensated with a salary of two thousand
dollars per month, to be paid from proceeds for a period of six to
twelve months during the start up period of operations until the
business is able to generate revenues from operations to cover expenses.
5) We plan to use a portion of the proceeds to provide general working
capital to meet other operating expenses during the start up period of
operations and the business is able to generate revenues from operations
to cover expenses. These expenses include general and administrative
expenses and all other expenses not categorized above.
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MARKET INFORMATION & DIVIDEND POLICY
Prior to this offering, there has been no public market for the common
stock. Our common stock has not been quoted and is not listed on any national
securities exchange or the Nasdaq Stock Market, and has not been traded in the
over-the-counter market. No shares are subject to outstanding options or
warrants to purchase, nor are there any outstanding securities convertible
into common equity. As of October 19, 2000, there were about 56 record holders
of our common stock.
Our common stock is considered a low priced security under rules
promulgated by the Securities and Exchange Commission. Under these rules,
broker-dealers participating in transactions in these securities must first
deliver a risk disclosure document which describes risks associated with these
stocks, broker-dealers' duties, customers' rights and remedies, market and
other information, and make suitability determinations approving the customers
for these stock transactions based on financial situation, investment
experience and objectives. Broker-dealers must also disclose these
restrictions in writing, provide monthly account statements to customers, and
obtain specific written consent of each customer. With these restrictions,
the likely effect of designation as a low priced stock is to decrease the
willingness of broker-dealers to make a market for the stock, to decrease the
liquidity of the stock and increase the transaction cost of sales and
purchases of these stocks compared to other securities.
DIVIDEND POLICY
New Paradigm has not previously paid any cash dividends on common stock
and does not anticipate or contemplate paying dividends on common stock in the
foreseeable future. Our present intention is to utilize all available funds
to develop and expand our business. The only restrictions that limit the
ability to pay dividends on common equity or that are likely to do so in the
future, are those restrictions imposed by law. Under Nevada corporate law, a
corporation may declare and pay dividends only out of its surplus, as defined,
or if there is no surplus, out of its net profits for the fiscal year in which
the dividend is declared and/or the preceding fiscal year.
MANAGEMENT'S DISCUSSION AND ANALYSIS
The following discussion and analysis should be read in conjunction with
our financial statements and the notes associated with them contained
elsewhere in this prospectus. This discussion should not be construed to
imply that the results discussed in this prospectus will necessarily continue
into the future or that any conclusion reached in this prospectus will
necessarily be indicative of actual operating results in the future. The
discussion represents only the best present assessment of management.
PLAN OF OPERATIONS.
New Paradigm was only recently incorporated on October 1, 1999, is a
small start up company that only recently commenced active business
operations, has not yet generated any revenues from operation and is
9
considered a development stage company. Management's plan of operation for
the next twelve months is first to raise funds from this offering. If the
offering is successful, management intends to use any funds generated from
sale of shares in this offering to provide initial working capital for the
operation of the proposed business. New Paradigm will use the proceeds of this
offering to purchase computer and recording equipment that will enable it to
handle recording, editing and other production on a limited basis in house;
for the initial production run of approximately 1000 to 3000 copies of the
first series of compact discs; for advertising and marketing; and to provide
general working capital to meet other operating expenses during the start up
period of operations until New Paradigm is able to generate revenues from
operations to cover expenses. We have not determined how long existing capital
can satisfy any cash requirements, but if the offering is successfully
completed and raises at least the minimum offering amount, we do not presently
anticipate that we will have to raise additional funds within the next twelve
months. Instead, if less than the entire offering amount is raised, New
Paradigm will reduce the initial production run of the first series of compact
discs, reduce the advertising and marketing budget, and reduce the amount of
computer and recording equipment purchased initially, which will limit the
extent it can handle recording, editing and other production on an in house
basis.
New Paradigm was formed to produce and market compact discs, cassette
and video tapes, and books with a basic theme of self improvement. The
initial product will be meditation enhancing music. New Paradigm is dependent
upon the successful completion of this offering and receipt of the proceeds
therefrom, of which there is no assurance, for the ability to fully commence
its intended business operations. In the event the proposed business is
unsuccessful, there is no assurance New Paradigm could successfully become
involved in any other business venture. New Paradigm presently has no plans,
commitments or arrangements with respect to any other proposed business
venture.
BUSINESS
HISTORY AND DEVELOPMENT OF NEW PARADIGM
New Paradigm Productions, Inc., a development stage company, was
incorporated under the laws of the State of Nevada on October 1, 1999. In
connection with its organization, the founders of New Paradigm contributed
$5,000 cash to initially capitalize it in exchange for 900,000 shares of
Common Stock.
On January 1, 2000, New Paradigm commenced an offering in reliance upon
Rule 506 of Regulation D, promulgated by the U.S. Securities & Exchange
Commission under the Securities Act of 1933. 100,000 shares of common stock
were offered and sold at $.35 per share. The offering closed in March, 2000,
and raised gross proceeds of $35,000. This increased the total issued and
outstanding common stock to 1,000,000 shares.
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PROPOSED BUSINESS OF NEW PARADIGM
New Paradigm Productions Incorporated is a company formed to produce and
market meditation music and supplies. New Paradigm plans to record, edit, and
reproduce music for meditation. Using voice instrumentation, synthesizer and
high-tech software, New Paradigm will attempt to create uniquely soothing
music which will encourage a tranquil, uplifting meditative experience for the
listener. Rather than a compilation of different songs, the musical experience
created by New Paradigm Productions will be continuous, without interruptions,
so the listener is allowed the fullest benefit of their meditation time,
bodywork session, etc.
Products management plans to create will include meditation enhancing
"music" or sounds using voice, drums, brass gongs and/or crystal toning bowls.
The primary intention is to produce and sell meditation music written and
recorded by management. At this time, New Paradigm does not have any licensing
agreements to purchase music from other artists nor are there any plans to do
so. Any royalties on music produced by management would be paid only to
artists involved in recording; for instance, vocal artists. In these instances
New Paradigm may agree to pay recording artists total royalties of fifteen
percent of the gross sales. If New Paradigm sells on a retail basis music
produced by others, no agreements will be needed as New Paradigm will purchase
compact discs or other recordings of the music at wholesale cost from a
distributor.
Different combinations of sounds will be recorded to create a meditative
musical experience. The first disc planned will be of the "OM". Om is the most
sacred word in the ancient Sanskrit language of India, which is used as a
symbol for the traditional sound of the meditation mantra, or sacred formula,
that is sung or chanted to still the mind. Though its origin is Eastern, where
it is believed Om is the original sound of the Universe, it has become a
universal mantra for meditation invoking inner peace and heightened awareness
to the meditator.
A combination of voices making the Om sound creates a symphonic sound
believed to be conducive to meditating. Additionally, the listener may "tone"
along with the music and find a simple, yet effective meditative experience.
The peaceful sound will also enhance any type of therapy treatment session
(massage, yoga, etc.). On successive compact discs, soothing sounds will be
created using Native American type drums, brass gongs or crystal bowls
enhanced with other musical instruments and vocals. Drums, gongs and toning
bowls have been utilized for thousands of years in ancient cultures for
meditation and healing work. Each compact disc produced will have a different
"flavor" with the same intention; creating a relaxed and rejuvenating state of
mind, body and spirit. Specific sound frequencies produce a deep meditative
state, relax the physical body, and promote a heightened state of awareness.
With the benefit of research and technology, the music created will be blended
to produce the opportune state of awareness for the listener.
The basic theme of the items produced and marketed by New Paradigm will
be personal growth through holistic health practices like meditation. In
addition to compact discs, New Paradigm will have for purchase items that will
promote compact disc sales. New Paradigm has no contractual commitments but
will purchase items for retail sale on a per piece basis. Holistic health
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practitioners, meditators and healers use pictures, statues, candles, etc. to
enhance their environment for the purpose of inducing a desired state of mind.
New Paradigm plans to acquire merchandise appropriate to this purpose for
retail sale. The holistic health/Natural healing community includes an endless
list of potential buyers of New Paradigm's music and products. Professionals
in the massage therapy industry, yoga teachers, Tai Chi instructors,
hypnotherapists, health spas, retreat centers, oriental medicine therapists,
counselors and ministers all use soothing music to benefit their clients well-
being.
The target market will primarily be the "new age" consumer market. The
term "new age" refers to a contemporary cultural movement characterized by a
concern for spiritual consciousness or awareness believed to be heightened
through meditation and holistic health practices. The market for "new age"
merchandise is becoming more widespread as the personal growth/ holistic
health community grows more and more mainstream. According to a recent study
completed by Natural Business Communications of Boulder and GAIAM Inc. of
Broomfield, CO, a new market has been defined that serves a common customer.
This market, called the Lifestyles of Health and Sustainability (LOHAS),
produces more than $230 billion in U.S. sales of products and services. These
consumers are interested in alternative health care, books, compact discs,
spirituality, personal growth, education and environmental awareness.
According to statistics gathered by New Age Journal Magazine on its readers,
96% ordered items by phone or mail and the average dollar amount spent
annually on mail order is $901. Over half of the readers purchased a product
and/or service advertised in New Age Journal. Due to popular demand, the well-
known mail order music club, Columbia House, has just recently included a
MEDITATION section in its music magazine.
To reach a particular audience, New Paradigm has planned advertising
including but not limited to the following: Advertising will be focused in
holistic health magazines, internet sites, catalogs, trade shows, book stores,
music stores, resorts, retreat centers, massage schools, etc. All these
advertising media will inform readers how to contact and place orders with New
Paradigm. Internet advertising will allow for wholesale and retail marketing
worldwide. As recorded music and books garner the most revenue from internet
sales, an efficient web site is a top priority of New Paradigm Productions
Inc. The internet site will be an on-line catalogue of products available from
New Paradigm. Besides products for sale, this site will include information
on upcoming CD's available, appropriate links to other sites and credit card
security. A secure website will ensure secure and authenticated electronic
transactions and prevent access to credit card information provided, by anyone
other than the sender and the intended recipient. The internet presents a
significant opportunity for rapid, cost effective distribution of music and
products across the globe. Future plans include downloading capability, which
allows the consumer to purchase and receive the music immediately.
Distribution of items sold will be handled on a mail order basis, using the
U.S Postal Service or other delivery services. Additional distribution will be
to New Age Retailers which will receive either by mail or at trade shows
information on the products available from New Paradigm.
There is absolutely no assurance that New Paradigm will be successful in
this venture.
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COMPETITION
The business of producing music for personal growth and meditation is
intensely competitive, with many companies and other persons who may have
greater technical expertise, financial resources and marketing capabilities
than New Paradigm. New Paradigm's competitive position within the industry is
insignificant. New Paradigm will compete through advertising in trade
publications and at trade shows to increase its name recognition, and by
attempting to produce a product line of good sound quality recordings of
music that is pleasing yet unique; intended specifically for personal
growth and meditation and marketed to that segment. Recordings will be made in
professional studios as necessary to assure professional quality recordings.
There is no assurance we will be able to overcome competitive disadvantages we
face as a small, start up company with limited capital. If we cannot compete
effectively, regardless of the success of this offering, we will not succeed.
EMPLOYEES
The only employee, Jody St Clair, will serve as full time Director of
Operations for New Paradigm.
FACILITIES
New Paradigm has no office facilities and does not presently anticipate
the need to lease commercial office space or facilities, but for the time
being uses the address of the president as the business address. New Paradigm
pays rent of $334 per month for the use of approximately 400 square feet of
space, including storage space to house equipment, in the president's
residence, which is rented on a month to month basis. We may lease commercial
office facilities at such time in the future as our operations have developed
to the point where the facilities are needed, but we have no commitments or
arrangements for any facilities, and there is no assurance regarding the
future availability of commercial office facilities or terms on which we may
be able to lease facilities in the future, nor any assurance regarding length
of time the present arrangement may continue.
AVAILABLE INFORMATION
We filed a registration statement on Form SB-2 with the United States
Securities and Exchange Commission, under the Securities Act of 1933, covering
the securities in this offering. As permitted by rules and regulations of the
Commission, this prospectus does not contain all of the information in the
registration statement. For further information regarding both New Paradigm
and the securities in this offering, we refer you to the registration
statement, including all exhibits and schedules, which may be inspected
without charge at the public reference facilities of the Commission's
Washington, D.C. office, 450 Fifth Street, N.W., Washington, D.C. 20549.
Copies may be obtained upon request and payment of prescribed fees.
As of the date of this prospectus, we became subject to the information
requirements of the Securities Exchange Act of 1934. Accordingly, we will
file reports and other information with the Commission. These materials will
be available for inspection and copying at the public reference facilities
13
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the following regional offices of the Commission: New York
Regional Office, 75 Park Place, New York, New York 10007; Chicago Regional
Office, 500 West Madison Street, Chicago, Illinois 60661. Copies of the
material may be obtained from the public reference section of the Commission
at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The
public may obtain information on the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330. The Commission maintains an Internet Web
site located at http://www.sec.gov that contains reports, proxy and
information statements and other information regarding issuers that file
reports electronically with the Commission. The site is accessible by the
public through any Internet access service provider.
Copies of our annual, quarterly and other reports filed with the
Commission, starting with the quarterly report for the first quarter ended
after the date of this prospectus, due 45 days after the end of the quarter,
will also be available upon request, without charge, by writing New Paradigm
Productions, Inc., 1393 Luckspring Drive, Salt Lake City, Utah 84016.
MANAGEMENT
EXECUTIVE OFFICERS AND DIRECTORS
The following table shows directors, executive officers and other
significant employees, their ages, and all offices and positions with New
Paradigm. Each director is elected for a period of one year and serves until
his successor is duly elected by the stockholders and qualifies. There are no
other arrangements or understandings regarding the length of time a director
is to serve in that capacity. Officers and other employees serve at the will
of the board of directors.
Term Served As Positions
Name of Director Age Director/Officer With Company
Jody St. Clair 37 Since inception President, Secretary-Treasurer
& Director
This individual serves as the sole officer and director. A brief
description of her positions, duties, background and business experience
follows:
Jody St. Clair serves as President, Secretary/Treasurer and Director of
New Paradigm. Ms. St. Clair has been an entrepreneur for 17 years. She has
conducted meditation workshops and retreats since 1991, has studied the
various forms of meditation for 15 years and has been a musician for 24 years.
Ms. St. Clair has experience in retail sales of new age products. She was sole
proprietor of Moonshadow Creations, begun in 1992 to sell new age products and
services. As President of Desert Native Designs, Inc. from 1994 to 1997, she
was involved in making and selling drums, rattles and other products made to
look similar to native artifacts or native designs of similar products, and
gained experience marketing in the new age industry. From 1997 to the present,
she has been teaching meditation in workshops and private counseling sessions.
14
She will use her knowledge of meditation practices and contacts with qualified
musicians, technicians and artists to produce meditation music, tapes and
compact discs.
EXECUTIVE COMPENSATION
New Paradigm has not paid any compensation to its executive officer and
director during its most recent fiscal year. Management is entitled to
reimbursement of any out of pocket expenses reasonably and actually incurred
on our behalf. We have no written employment agreement with nor key man life
insurance on management, but Ms. St. Clair is being compensated with a salary
of two thousand dollars per month for her service. This salary commenced March
17, 2000 and may be reviewed after six months of service. There is no
assurance regarding the length of time that this arrangement may continue, nor
any assurance that the services of the officer will continue to be available
for any specified length of time.
PRINCIPAL SHAREHOLDERS
The following table contains stock ownership information about officers
or directors, and other stockholders who we know to be beneficial owners of
more that 5% of our stock. A beneficial owner of stock is any person who has
or shares the power to decide how to vote or whether to dispose of the stock.
The amounts shown include all shares these persons may be considered to
beneficially own regardless of the form of ownership.
Title of Amount & Nature of % of
Name and Address Class Beneficial OwnershipClass
Jody St. Clair Common 150,000 shares 15%
1393 Luckspring Drive
SLC, Utah 84016
Lynn Dixon Common 482,000 shares 48.2%
311 S State, #460
SLC, UT 84111
Melissa Epperson Common 98,000 shares 9.8%
1533 S 1220 W
Woods Cross, UT 84087
Thomas G. Kimble Common 98,000 shares(1) 9.8%
311 S State, #440
SLC, UT 84111
Dorothy Bechtel Common 95,000 shares(2) 9.5%
717 Pine Creek Lane
Naples, FL 34108
15
All officers and Common 150,000 shares 15%
directors
as a group (1 person)
(1) Owned of record by Devonshire Partners, a limited liability company solely
owned by Mr. Kimble.
CERTAIN TRANSACTIONS
In connection with the organization of New Paradigm, the initial
shareholders named above contributed $5,000 cash to initially capitalize it in
exchange for 900,000 shares of Common Stock. On January 1, 2000, New Paradigm
commenced an offering in reliance upon Rule 506 of Regulation D, promulgated
by the U.S. Securities & Exchange Commission under the Securities Act of 1933.
100,000 shares of common stock were sold at $.35 per share to about 50
accredited investors, including shareholders named above. The offering closed
in March, 2000, and raised gross proceeds of $35,000. This increased the total
issued and outstanding common stock to 1,000,000 shares.
New Paradigm has entered and it is contemplated that it may enter into
certain transactions with management which, even though they may involve
conflicts of interest in that they are not arms' length transactions, are
believed to be comparable to what New Paradigm could negotiate in arms' length
transactions. These transactions include the following:
New Paradigm presently has no office facilities but uses as its
principal place of business the home office facilities of Ms. St. Clair, until
business operations may require more extensive facilities and New Paradigm has
the financial ability to rent commercial space. There is presently no formal
written agreement for the use of such facilities, and no assurance that such
facilities will be available to New Paradigm on such a basis for any specific
length of time. New Paradigm will pay rent of $334 per month for the use of
such facilities, and will pay for or reimburse Ms. St. Clair for any
additional out of pocket costs incurred.
New Paradigm has no formal written employment agreement or other
contracts with its President, but agreed to pay compensation of $2,000 per
month beginning March 17, 2000. There is no assurance that the services and
facilities to be provided by Ms. St. Clair will be available for any specific
length of time in the future. It is anticipated that the present arrangement
for compensation will continue for the foreseeable future. The terms of any
formal written employment agreement with Ms. St. Clair would be determined if
and when such arrangements are entered into.
CONFLICTS OF INTEREST
Other than as described in this prospectus we do not expect to have
significant further dealings with affiliates. However, if there are dealings
the parties will attempt to deal on terms competitive in the market and on the
16
same terms that either party would deal with a third person. Presently none
of the officers and directors have any transactions which they contemplate
entering into with New Paradigm, aside from the matters described in this
prospectus.
Management will attempt to resolve any conflicts of interest that may
arise in favor of New Paradigm. Failure to do so could result in fiduciary
liability to management.
INDEMNIFICATION AND LIMITATION OF LIABILITY OF MANAGEMENT
The General Corporation Law of Nevada permits provisions in the
articles, by-laws or resolutions approved by shareholders which limit
liability of directors and officers for breach of fiduciary duty to certain
specified circumstances, namely, acts or omissions which involve intentional
misconduct, fraud or knowing violation of law, or unlawful stock purchases,
redemptions or payment of dividends. Our articles limit liability of officers
and directors to the full extent permitted by Nevada law. With these
exceptions, this eliminates personal liability of a director or officer, to
New Paradigm or its shareholders, for monetary damages for breach of fiduciary
duty. Therefore a director or officer cannot be held liable for damages to New
Paradigm or its shareholders for gross negligence or lack of due care in
carrying out his fiduciary duties as a director or officer. Nevada law
permits indemnification if a director or officer acts in good faith in a
manner reasonably believed to be in, or not opposed to, the best interests of
the corporation. A director or officer must be indemnified as to any matter
in which he defends himself successfully. Indemnification is prohibited as to
any matter in which the director or officer is adjudged liable to the
corporation.
This will limit your ability as shareholders to hold officers and
directors liable and collect monetary damages for breaches of fiduciary duty,
and requires us to indemnify officers and directors to the full extent
permitted by law. Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers, and controlling
persons under these provisions or otherwise, we have been advised that in the
opinion of the Securities and Exchange Commission, indemnification is against
public policy as expressed in the Act and is unenforceable.
DESCRIPTION OF SECURITIES
COMMON STOCK
We are authorized to issue 24,000,000 shares of common stock.
1,000,000 shares of common stock are presently outstanding. 100,000 shares are
reserved from authorized but unissued shares for issuance of shares in this
offering. The common stock to be issued on completion of the offering will
be, when issued according to the terms of the offering, fully paid and non-
assessable.
The holders of common stock, including the shares issued in this
offering, are entitled to equal dividends and distributions, per share, on the
common stock when, as and if declared by the board of directors from funds
legally available for that. No holder of any shares of common stock has a
17
pre-emptive right to subscribe for any securities nor are any common shares
subject to redemption or convertible into other securities. Upon liquidation,
dissolution or winding up, and after payment of creditors and preferred
stockholders, if any, the assets will be divided pro-rata on a share-for-share
basis among the holders of the shares of common stock. All shares of common
stock now outstanding are fully paid, validly issued and non-assessable. Each
share of common stock is entitled to one vote on the election of any director
or any other matter upon which shareholders are required or permitted to vote.
Holders of our common stock do not have cumulative voting rights, so that the
holders of more than 50% of the combined shares voting for the election of
directors may elect all of the directors, if they choose to do so and, in that
event, the holders of the remaining shares will not be able to elect any
members to the board of directors.
Issuance of additional common stock in the future will reduce your
proportionate ownership and voting power. Directors can issue additional
common stock, without shareholder approval to the extent authorized. We are
authorized to issue 24,000,000 shares of common stock. 1,000,000 shares of
common stock are presently outstanding.
PREFERRED STOCK
We are also authorized to issue 1,000,000 shares of preferred stock .
Under our articles of incorporation, the board of directors has the power,
without further action by the holders of the common stock, to designate the
relative rights and preferences of the preferred stock, and issue the
preferred stock in one or more series as designated by the board of directors.
The designation of rights and preferences could include preferences as to
liquidation, redemption and conversion rights, voting rights, dividends or
other preferences, any of which may be dilutive of the interest of the holders
of the common stock or the preferred stock of any other series. The board of
directors effects a designation of each series of preferred stock by filing
with the Nevada Secretary of State a Certificate of Designation defining the
rights and preferences of each series. Documents so filed are matters of
public record and may be examined according to procedures of the Nevada
Secretary of State, or copies may be obtained from New Paradigm. The board of
directors has not designated any series or issued any shares of preferred
stock.
The ability of directors, without stockholder approval, to issue
additional shares of preferred stock could be used as anti-takeover measures.
Anti-takeover measures may result in you receiving less for your stock than
you otherwise might. The issuance of preferred stock creates additional
securities with dividend and liquidation preferences over common stock, and
may have the effect of delaying or preventing a change in control without
further shareholder action and may adversely effect the rights and powers,
including voting rights, of the holders of common stock. In certain
circumstances, the issuance of preferred stock could depress the market price
of the common stock.
SHARES ELIGIBLE FOR FUTURE SALE
All 1,000,000 shares of common stock currently outstanding are
"restricted securities," as defined under Rule 144 promulgated under the
Securities Act of 1933, in that the shares were issued and sold without
18
registration, in private transactions not involving a public offering, and/or
are securities held by affiliates. Although restricted and affiliate
securities are not presently tradeable in any public market which may develop
for the common stock, the securities may in the future be publicly sold into
any market that should develop, according to the provisions of Rule 144. In
addition, except for shares, if any, acquired and held by an "affiliate" of
New Paradigm, the 100,000 shares of common stock in this offering will also be
freely tradeable immediately upon issuance. Sales of substantial amounts of
this common stock in any public market could depress the market price of the
common stock. For purposes of Rule 144, an "affiliate" of an issuer is a
person that directly, or indirectly through one or more intermediaries,
controls or is controlled by, or is under common control with, the issuer.
In general, under Rule 144 as currently in effect, a person or group of
persons whose shares are aggregated, including affiliates of an issuer, can
sell within any three-month period, an amount of restricted securities that
does not exceed the greater of 1% of the total number of outstanding shares of
the same class, or if the stock becomes quoted on NASDAQ or a stock exchange,
the reported average weekly trading volume during the four calendar weeks
preceding the sale; provided, that at least one year has elapsed since the
restricted securities being sold were acquired from the issuer or any
affiliate of the issuer, and provided further that certain other conditions
are also satisfied. If at least two years have elapsed since the restricted
securities were acquired from the issuer or an affiliate of the issuer, a
person who has not been an affiliate of the issuer for at least three months
can sell restricted shares under Rule 144 without regard to any limitations on
the amount.
PLAN OF DISTRIBUTION
New Paradigm is offering up to 100,000 shares of its $.001 par value
common stock on a "best efforts, 50,000 shares minimum, 100,000 shares
maximum" basis, at an offering price of $1.00 per share. The offering will be
managed without an underwriter, and the shares offered and sold without any
discount, sales commissions or other compensation being paid to anyone in
connection with the offering. Shares will be offered and sold by the officer
of New Paradigm, who will receive no sales commissions or other compensation
in connection with the offering, except for reimbursement of expenses actually
incurred on behalf of New Paradigm in connection with such activities. We
will pay the costs of preparing, mailing and distributing this prospectus.
There is no assurance that all or any of the shares will be sold. If
New Paradigm fails to receive subscriptions for a minimum of 50,000 shares
within 120 days from the date of this prospectus (or 150 days if extended by
New Paradigm to complete the entire offering or sell at least the minimum
amount), the offering will be terminated and any subscription payments
received will be promptly refunded to subscribers, without deduction or any
interest. If subscriptions for at least the minimum amount are received
within that period, funds will not be returned to investors and New Paradigm
may continue the offering until the period expires or subscriptions for all
100,000 shares have been received, whichever occurs first. Current
shareholders may purchase shares in the offering. No limits have been imposed
in this regard, but no one, including affiliates, has made any commitment, nor
19
indicated they intend, to purchase shares in the offering. Any purchases by
affiliates will be made for investment purposes only and not for resale, and
may be made in order to reach the minimum offering amount.
All subscription payments should be made payable to Brighton Bank as
Escrow Agent for New Paradigm. We will mail or otherwise forward all
subscription payments received, by noon of the next business day following
receipt, to Brighton Bank at 311 South State Street, Salt Lake City, Utah
84111 for deposit into the escrow account being maintained by Brighton Bank as
escrow agent for New Paradigm, pending receipt of subscriptions for at least a
minimum of 50,000 shares or expiration of the offering period, whichever
occurs first. Subscription payments will only be disbursed from the escrow
account to New Paradigm if at least 50,000 shares are sold, or if not sold,
for the purpose of refunding subscription payments to the subscribers.
Subscribers will have no right to return or use of their funds during the
offering period, which may last up to 150 days. Subscribers will be notified
by mail if the offering is extended beyond 120 days.
Changes in the material terms of the offering after the date of this
prospectus would terminate the original offer. Subscribers would then be
entitled to a refund. Material changes include:
bullet extension of the offering beyond the period specified in the prospectus
bullet change in the offering price
bullet change in the minimum purchase required of investors
bullet change in the amount of proceeds needed to release funds in escrow, and
bullet change in the application of proceeds.
Because New Paradigm has not engaged the services of an Underwriter with
respect to this offering, the independent due diligence review of New
Paradigm, its affairs and financial condition, which would ordinarily be
performed by an underwriter and its legal counsel, has not been performed with
respect to New Paradigm and investors will not have the benefit of an
underwriter's independent due diligence review.
There has been no public market for the common stock prior to this
offering. The common stock will not be listed on an exchange or quoted on the
NASDAQ system upon completion of this offering and there can be no assurance
any market will develop for the securities or if a market does develop, that
it will continue. There can also be no assurance as to the depth or liquidity
of any market for common stock or the prices at which holders may be able to
sell the securities. As a result, an investment in the common stock may be
totally illiquid and investors may not be able to liquidate their investment
readily or at all when they need or desire to sell. In the event a public
market does develop for the common stock, market prices will be influenced by
many factors, and will be subject to significant fluctuation in response to
variations in operating results of New Paradigm and other factors such as
investor perceptions of New Paradigm, supply and demand, interest rates,
general economic conditions and those specific to the industry, international
political conditions, developments with regard to New Paradigm's activities,
future financial condition and management.
20
It is presently estimated that subscription payments received will be
refunded to subscribers, or certificates for the shares of common stock will
be available for delivery in Salt Lake City, Utah, at the close of business on
or before the tenth business day after the offering is terminated, if all
required documents and funds have been received. The escrow agreement
specifies 10 business days after the offering is terminated to allow for
clearance of funds deposited in escrow.
LEGAL MATTERS
Management knows of no material litigation that is pending or threatened
against New Paradigm. The validity of the issuance of the shares offered in
this offering will be passed upon by Thomas G. Kimble & Associates, Salt Lake
City, Utah.
EXPERTS
The financial statements for the year ended December 31, 1999 which are
included in this prospectus have been examined by Pritchett, Siler & Hardy,
P.C., independent certified public accountants, as indicated in their report,
and are included in this prospectus in reliance on the report given upon the
authority of that firm as experts in accounting and auditing.
21
NEW PARADIGM PRODUCTIONS, INC.
UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2000
NEW PARADIGM PRODUCTIONS, INC.
CONTENTS
PAGE
Unaudited Condensed Balance Sheets,
June 30, 2000 and December 31, 1999 1
Unaudited Condensed Statements of Operations,
For the six months ended June 30, 2000 and
from inception on October 1, 1999 through
June 30, 2000 2
Unaudited Condensed Statements of Cash Flows,
for the six months ended June 30, 2000 and
from inception on October 1, 1999 through
June 30, 2000 3
Notes to Unaudited Condensed Financial
Statements 4 - 7
NEW PARADIGM PRODUCTIONS, INC.
[A Development Stage Company]
UNAUDITED CONDENSED BALANCE SHEETS
ASSETS
June 30, December 31,
2000 1999
___________ ___________
CURRENT ASSETS:
Cash $ 8,933 $ 2,347
Prepaid expense 3,056 -
___________ ___________
Total Current Assets 11,989 2,347
EQUIPMENT, net 1,865 -
OTHER ASSETS:
Deferred stock offering costs 5,000 -
___________ ___________
$ 18,854 $ 2,347
___________ ___________
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accrued liabilities $ 870 $ -
Payroll tax payable 1,310 -
___________ ___________
Total Current Liabilities 2,180 -
___________ ___________
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value,
1,000,000 shares authorized,
no shares issued and outstanding - -
Common stock, $.001 par value,
24,000,000 shares authorized,
1,000,000 and 900,000 shares
issued and outstanding 1,000 900
Capital in excess of par value 39,000 4,100
Deficit accumulated during the
development stage (23,326) (2,653)
___________ ___________
Total Stockholders' Equity 16,674 2,347
___________ ___________
$ 18,854 $ 2,347
___________ ___________
Note: The Balance Sheet of December 31, 1999, was taken from the
audited financial statements at that date and condensed.
The accompanying notes are an integral part of these unaudited condensed
financial statements.
1
NEW PARADIGM PRODUCTIONS, INC.
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
From Inception
For the Six on October 1,
Months Ended 1999 Through
June 30, June 30,
2000 2000
____________ ___________
REVENUE $ - $ -
EXPENSES:
General and Administrative 20,673 23,326
____________ ___________
LOSS BEFORE INCOME TAXES (20,673) (23,326)
CURRENT TAX EXPENSE - -
DEFERRED TAX EXPENSE - -
____________ ___________
NET LOSS $ (20,673) $ (23,326)
____________ ___________
LOSS PER COMMON SHARE $ (.02) $ (.03)
____________ ___________
The accompanying notes are an integral part of these unaudited condensed
financial statements.
2
NEW PARADIGM PRODUCTIONS, INC.
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
From Inception
For the Six on October 1,
Months Ended 1999 Through
June 30, June 30,
2000 2000
____________ ___________
Cash Flows From Operating Activities:
Net loss $ (20,673) $ (23,326)
Adjustments to reconcile net loss to
net cash used by operating activities:
Depreciation expense 48 48
Changes is assets and liabilities:
(Increase) in prepaid expneses (3,056) (3,056)
Increase in accrued liabilities 870 870
Increase in payroll tax payable 1,310 1,310
____________ ___________
Net Cash (Used) by Operating
Activities (21,501) (24,154)
____________ ___________
Cash Flows From Investing Activities:
Purchase of equipment (1,913) (1,913)
____________ ___________
Net Cash (Used) by Investing
Activities (1,913) (1,913)
____________ ___________
Cash Flows From Financing Activities:
Proceeds from issuance of common
stock 35,000 40,000
Stock offering costs (5,000) (5,000)
____________ ___________
Net Cash Provided by Financing
Activities 30,000 35,000
____________ ___________
Net Increase in Cash 6,586 8,933
Cash at Beginning of Period 2,347 -
____________ ___________
Cash at End of Period $ 8,933 $ 8,933
____________ ___________
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ - $ -
Income taxes $ - $ -
Supplemental Schedule of Noncash Investing and Financing
Activities:
For the period ended June 30, 2000:
None
The accompanying notes are an integral part of these unaudited condensed
financial statements.
3
NEW PARADIGM PRODUCTIONS, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - New Paradigm Productions, Inc. (the Company) was
organized under the laws of the State of Nevada on October 1,
1999. The Company plans to manufacture and sell products related
to self improvement and meditation. The Company has not yet
generated revenues from its planned principal operations and is
considered a development stage company as defined in the
Statement of Financial Accounting Standards (SFAS) No. 7. The
Company has, at the present time, not paid any dividends and any
dividends that may be paid in the future will depend upon the
financial requirements of the Company and other relevant factors.
Condensed Financial Statements - The accompanying financial
statements have been prepared by the Company without audit. In
the opinion of management, all adjustments (which include only
normal recurring adjustments) necessary to present fairly the
financial position, results of operations and cash flows at June
30, 2000 and for the periods then ended have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted.
It is suggested that these condensed financial statements be read
in conjunction with the financial statements and notes thereto
included in the Company's December 31, 1999 audited financial
statements. The results of operations for the periods ended June
30, 2000 are not necessarily indicative of the operating results
for the full year.
Organization Costs - The Company expensed organization costs of
$885, which reflect amounts expended to organize the Company.
Loss Per Share - The computation of loss per share is based on
the weighted average number of shares outstanding during the
period presented in accordance with Statement of Financial
Accounting Standards No. 128, "Earning Per Share" [See Note 7].
Cash and Cash Equivalents - For purposes of the financial
statements, the Company considers all highly liquid debt
investments purchased with a maturity of three months or less to
be cash equivalents.
Accounting Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosures of
contingent assets and liabilities at the date of the financial
statements, and the reported amount of revenues and expenses
during the reported period. Actual results could differ from
those estimated.
Recently Enacted Accounting Standards - Statement of Financial
Accounting Standards (SFAS) No. 132, "Employer's Disclosure about
Pensions and Other Postretirement Benefits", SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities",
SFAS No. 134, "Accounting for Mortgage-Backed Securities.", SFAS
No. 135, "Rescission of FASB Statement No. 75 and Technical
Corrections", SFAS No. 136, "Transfers of Assets to a not for
profit organization or charitable trust that raises or holds
contributions for others", and SFAS No. 137, "Accounting for
Derivative Instruments and Hedging Activities - deferral of the
effective date of FASB statement No. 133 ( an amendment of FASB
Statement No. 133.)," were recently issued. SFAS No. 132, 133,
134, 135, 136 and 137 have no current applicability to the
Company or their effect on the financial statements would not
have been significant.
4
NEW PARADIGM PRODUCTIONS, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Continued]
Advertising Costs - The Company expensed $1,441 and $0 for the
period ended June 30, 2000 and year ended December 31, 1999,
respectively.
NOTE 2 - EQUIPMENT
The Company utilizes straight-line depreciation over a five year
period.
June 30, December 31,
2000 1999
__________ __________
Computer equipment $ 1,913 $ -
__________ __________
1,913 -
Less: Accumulated Depreciation 48 -
__________ __________
Net Equipment $ 1,865 $ -
__________ __________
Depreciation expense for the period ended June 30, 2000 and year
ended December 31, 1999 was $48 and $0, respectively.
NOTE 3 - CAPITAL STOCK
Common Stock - During October 1999, in connection with its
organization, the Company issued 900,000 shares of its previously
authorized, but unissued common stock. Total proceeds from the
sale of stock amounted to $5,000 (or $.0056 per share).
During January and February 2000, the Company raised $35,000
through the sale of 100,000 shares of its previously authorized,
but unissued common stock in a private placement ($.35 per
share).
Preferred Stock - The Company has authorized 1,000,000 shares of
preferred stock, $.001 par value, with such rights, preferences
and designations and to be issued in such series as determined by
the board of Directors. No shares are issued and outstanding at
June 30, 2000.
5
NEW PARADIGM PRODUCTIONS, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 4 - INCOME TAXES
The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109 "Accounting
for Income Taxes". SFAS No. 109 requires the Company to provide
a net deferred tax asset/liability equal to the expected future
tax benefit/expense of temporary reporting differences between
book and tax accounting methods and any available operating loss
or tax credit carryforwards. At June 30, 2000, the Company has
available unused operating loss carryforwards of approximately
$23,300, which may be applied against future taxable income and
which expire in 2019.
The amount of and ultimate realization of the benefits from the
operating loss carryforwards for income tax purposes is
dependent, in part, upon the tax laws in effect, the future
earnings of the Company, and other future events, the effects of
which cannot be determined. Because of the uncertainty
surrounding the realization of the loss carryforwards the Company
has established a valuation allowance equal to the tax effect of
the loss carryforwards and, therefore, no deferred tax asset has
been recognized for the loss carryforwards. The net deferred tax
assets are approximately $8,100 as of June 30, 2000, with an
offsetting valuation allowance at June 30, 2000 of the same
amount resulting in a change in the valuation allowance of
approximately $7,500 for the six months ended June 30, 2000.
NOTE 5 - RELATED PARTY TRANSACTIONS
Office Space - The Company has not previously had a need to rent
office space. An officer/shareholder of the Company has allowed
the Company to use her home as a mailing address, as needed, at
no expense to the Company. However, the Company has agreed to
pay rent of $334 per month, to an officer of the Company,
beginning on March 16, 2000. The Company expensed $1,170 and $0
for the period ended June 30, 2000 and year ended December 31,
1999, respectively.
Management Compensation - The Company has entered in to an
agreement with an officer to pay compensation of $2,000 per month
beginning on March 17, 2000.
NOTE 6 - GOING CONCERN
The Company was formed with a very specific business plan.
However, the possibility exists that the Company could expend
virtually all of its working capital in a relatively short time
period and may not be successful in establishing on-going
profitable operations.
The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles, which
contemplate continuation of the Company as a going concern.
However, the Company was only recently formed, has incurred
losses since its inception and has not yet been successful in
establishing profitable operations. These factors raise
substantial doubt about the ability of the Company to continue as
a going concern. In this regard, management is proposing to
raise any necessary additional funds not provided by operations
through additional sales of its common stock. There is no
assurance that the Company will be successful in raising this
additional capital or achieving profitable operations. The
financial statements do not include any adjustments that might
result from the outcome of these uncertainties.
6
NEW PARADIGM PRODUCTIONS, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 7 - LOSS PER SHARE
The following data show the amounts used in computing loss per
share for the periods ended June 30, 2000:
From Inception
For the Six on October 1,
Months Ended 1999 Through
June 30, June 30,
2000 2000
__________ __________
Loss from continuing operations
available to common shareholders
(numerator) $ (20,673) $ (23,326)
__________ __________
Weighted average number of
common shares outstanding used
in loss per share for the period
(denominator) 950,000 933,333
__________ __________
NOTE 8 - SUBSEQUENT EVENTS
Proposed Public Offering of Common Stock - The Company is
proposing to make a public offering of up to 100,000 shares of
its previously authorized but unissued common stock. The Company
plans to file a registration statement on Form SB-2 with the
United States Securities and Exchange Commission in accordance
with the Securities Act of 1933 as amended. An offering price of
$1.00 per share has arbitrarily been determined by the Company.
The offering will be managed by the Company without any
underwriter. The shares will be offered and sold by an officer
of the Company, who will receive no sales commissions or other
compensation in connection with the offering, except for
reimbursement of expenses actually incurred on behalf of the
Company in connection with the offering. The Company has
incurred stock offering costs totaling $5,000 as of June 30,
2000, but any such costs will be deferred and netted against the
proceeds of the proposed public stock offering.
7
`
NEW PARADIGM PRODUCTIONS, INC.
FINANCIAL STATEMENTS
DECEMBER 31, 1999
NEW PARADIGM PRODUCTIONS, INC.
CONTENTS
PAGE
- Independent Auditors' Report 1
- Balance Sheet, December 31, 1999 2
- Statement of Operations, from inception on
October 1, 1999 through December 31, 1999 3
- Statement of Stockholders' Equity, from
inception on October 1, 1999 through
December 31, 1999 4
- Statement of Cash Flows, from inception on
October 1, 1999 through December 31, 1999 5
- Notes to Financial Statements 6 - 8
INDEPENDENT AUDITORS' REPORT
Board of Directors
NEW PARADIGM PRODUCTIONS, INC.
Salt Lake City, Utah
We have audited the accompanying balance sheet of New Paradigm
Productions, Inc. [a development stage company] at December 31,
1999, and the related statements of operations, stockholders'
equity and cash flows from inception on October 1, 1999 through
December 31, 1999. These financial statements are the
responsibility of the Company's management. 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. 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 audited by us present
fairly, in all material respects, the financial position of New
Paradigm Productions, Inc. as of December 31, 1999, and the
results of its operations and its cash flows from inception on
October 1, 1999 through December 31, 1999, in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in
Note 5 to the financial statements, the Company was only recently
formed, has incurred losses since inception and has not yet
established profitable operations, raising substantial doubt
about its ability to continue as a going concern. Management's
plans in regards to these matters are also described in Note 5.
The financial statements do not include any adjustments that
might result from the outcome of these uncertainties.
/S/ Pritchett, Siler & Hardy, P.C.
PRITCHETT, SILER & HARDY, P.C.
February 29, 2000
Salt Lake City, Utah
1
NEW PARADIGM PRODUCTIONS, INC.
[A Development Stage Company]
BALANCE SHEET
ASSETS
December 31,
1999
___________
CURRENT ASSETS:
Cash in bank $ 2,347
___________
Total Current Assets $ 2,347
____________
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ -
___________
Total Current Liabilities -
___________
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value,
1,000,000 shares authorized,
no shares issued and outstanding -
Common stock, $.001 par value,
24,000,000 shares authorized,
900,000 shares issued and
outstanding 900
Capital in excess of par value 4,100
Deficit accumulated during the
development stage (2,653)
___________
Total Stockholders' Equity 2,347
___________
$ 2,347
____________
The accompanying notes are an integral part of this financial
statement.
2
NEW PARADIGM PRODUCTIONS, INC.
[A Development Stage Company]
STATEMENT OF OPERATIONS
From Inception
on October 1,
1999 Through
December 31,
1999
_____________
REVENUE $ -
EXPENSES:
General and Administrative 2,653
_____________
LOSS BEFORE INCOME TAXES (2,653)
CURRENT TAX EXPENSE -
DEFERRED TAX EXPENSE -
_____________
NET LOSS $ (2,653)
______________
LOSS PER COMMON SHARE $ (.00)
______________
The accompanying notes are an integral part of this financial
statement.
3
NEW PARADIGM PRODUCTIONS, INC.
[A Development Stage Company]
STATEMENT OF STOCKHOLDERS' EQUITY
FROM THE DATE OF INCEPTION ON OCTOBER 1, 1999
THROUGH DECEMBER 31, 1999
Deficit
Capital Accumulated
Preferred Stock Common Stock in Excess During
______________ ______________ of Par Development
Shares Amount Shares Amount Value Stage
______ ______ ______ ______ ______ ________
BALANCE, October 1, 1999 - $ - - $ - $ - $ -
Issuance of 900,000
shares common stock
for cash, October 1,
1999 at $.0056
per share - - 900,000 900 4,100 -
Net loss for the period
ended December 31, 1999 - - - - - (2,653)
______ ______ ______ ______ ______ ________
BALANCE,December 31, 1999 - $ - 900,000 $ 900 $4,100 $ (2,653)
______ ______ ______ ______ ______ ________
The accompanying notes are an integral part of this financial
statement.
4
NEW PARADIGM PRODUCTIONS, INC.
[A Development Stage Company]
STATEMENT OF CASH FLOWS
From Inception
on October 1,
1999 Through
December 31,
1999
____________
Cash Flows From Operating Activities:
Net loss $ (2,653)
Adjustments to reconcile net loss to
net cash used by operating activities:
Change in assets and liabilities:
Increase in accounts payable -
____________
Net Cash (Used) by Operating Activities (2,653)
____________
Cash Flows From Investing Activities -
____________
Cash Flows From Financing Activities:
Proceeds from common stock issuance 5,000
____________
Net Cash Provided by Financing Activities 5,000
____________
Net Increase in Cash 2,347
Cash at Beginning of Period -
____________
Cash at End of Period $ 2,347
____________
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ -
Income taxes $ -
Supplemental Schedule of Noncash Investing and
Financing Activities:
For the period ended December 31, 1999:
None
The accompanying notes are an integral part of this financial
statement.
5
NEW PARADIGM PRODUCTIONS, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - New Paradigm Productions, Inc. (the Company) was
organized under the laws of the State of Nevada on October 1,
1999. The Company plans to manufacture and sell products related
to self improvement and meditation. The Company has not yet
generated revenues from its planned principle operations and is
considered a development stage company as defined in the
Statement of Financial Accounting Standards (SFAS) No. 7. The
Company has, at the present time, not paid any dividends and any
dividends that may be paid in the future will depend upon the
financial requirements of the Company and other relevant factors.
Organization Costs - The Company expensed organization costs of
$(885), which reflect amounts expended to organize the Company.
Loss Per Share - The computation of loss per share is based on
the weighted average number of shares outstanding during the
period presented in accordance with Statement of Financial
Accounting Standards No. 128, "Earning Per Share" [See Note 6].
Cash and Cash Equivalents - For purposes of the financial
statements, the Company considers all highly liquid debt
investments purchased with a maturity of three months or less to
be cash equivalents.
Accounting Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosures of
contingent assets and liabilities at the date of the financial
statements, and the reported amount of revenues and expenses
during the reported period. Actual results could differ from
those estimated.
Recently Enacted Accounting Standards - Statement of Financial
Accounting Standards (SFAS) No. 132, "Employer's Disclosure about
Pensions and Other Postretirement Benefits", SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities",
SFAS No. 134, "Accounting for Mortgage-Backed Securities.", SFAS
No. 135, "Rescission of FASB Statement No. 75 and Technical
Corrections", SFAS No. 136, "Transfers of Assets to a not for
profit organization or charitable trust that raises or holds
contributions for others", and SFAS No. 137, "Accounting for
Derivative Instruments and Hedging Activities - deferral of the
effective date of FASB statement No. 133 ( an amendment of FASB
Statement No. 133.)," were recently issued. SFAS No. 132, 133,
134, 135, 136 and 137 have no current applicability to the
Company or their effect on the financial statements would not
have been significant.
NOTE 2 - CAPITAL STOCK
Common Stock - During October 1999, in connection with its
organization, the Company issued 900,000 shares of its previously
authorized, but unissued common stock. Total proceeds from the
sale of stock amounted to $5,000 (or $.0056 per share).
6
NEW PARADIGM PRODUCTIONS, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - CAPITAL STOCK [Continued]
Preferred Stock - The Company has authorized 1,000,000 shares of
preferred stock, $.001 par value, with such rights, preferences
and designations and to be issued in such series as determined by
the board of Directors. No shares are issued and outstanding at
December 31, 1999.
NOTE 3 - INCOME TAXES
The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109 "Accounting
for Income Taxes". SFAS No. 109 requires the Company to provide
a net deferred tax asset/liability equal to the expected future
tax benefit/expense of temporary reporting differences between
book and tax accounting methods and any available operating loss
or tax credit carryforwards. At December 31, 1999, the Company
has available unused operating loss carryforwards of
approximately $1,700, which may be applied against future taxable
income and which expire in 2019.
The amount of and ultimate realization of the benefits from the
operating loss carryforwards for income tax purposes is
dependent, in part, upon the tax laws in effect, the future
earnings of the Company, and other future events, the effects of
which cannot be determined. Because of the uncertainty
surrounding the realization of the loss carryforwards the Company
has established a valuation allowance equal to the tax effect of
the loss carryforwards and, therefore, no deferred tax asset has
been recognized for the loss carryforwards. The net deferred tax
assets are approximately $600 as of December 31, 1999, with an
offsetting valuation allowance at December 31, 1999 of the same
amount.
NOTE 4 - RELATED PARTY TRANSACTIONS
Office Space - The Company has not had a need to rent office
space. An officer/shareholder of the Company is allowing the
Company to use her home as a mailing address, as needed, at no
expense to the Company.
Management Compensation - The Company has not paid any
compensation to its officers and directors as the services
provided by them to date have only been nominal.
NOTE 5 - GOING CONCERN
The Company was formed with a very specific business plan.
However, the possibility exists that the Company could expend
virtually all of its working capital in a relatively short time
period and may not be successful in establishing on-going
profitable operations.
The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles, which
contemplate continuation of the Company as a going concern.
However, the Company was only recently formed, has incurred
losses since its inception and has not yet been successful in
establishing profitable operations. These factors raise
substantial doubt about the ability of the Company to continue as
a going concern. In this regard, management is proposing to
raise any necessary additional funds not provided by operations
through additional sales of its common stock. There is no
assurance that the Company will be successful in raising this
additional capital or achieving profitable operations. The
financial statements do not include any adjustments that might
result from the outcome of these uncertainties.
7
NEW PARADIGM PRODUCTIONS, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 6 - LOSS PER SHARE
The following data show the amounts used in computing loss per
share for the period from inception through December 31, 1999:
From Inception
on October 1,
1999 Through
December 31,
1999
____________
Loss from continuing operations
available to common shareholders
(numerator) $ (2,653)
____________
Weighted average number of
common shares outstanding
used in the computation loss per
share for the period (denominator) 900,000
____________
NOTE 7 - SUBSEQUENT EVENT
Private Placement of Common Stock - During January and February
2000, the Company raised $35,000 through the sale of 100,000
shares of its previously authorized, but unissued common stock in
a private placement ($.35 per share).
Proposed Public Offering of Common Stock - The Company is
proposing to make a public offering of up to 100,000 shares of
its previously authorized but unissued common stock. The Company
plans to file a registration statement on Form SB-2 with the
United States Securities and Exchange Commission in accordance
with the Securities Act of 1933 as amended. An offering price of
$1.00 per share has arbitrarily been determined by the Company.
The offering will be managed by the Company without any
underwriter. The shares will be offered and sold by an officer
of the Company, who will receive no sales commissions or other
compensation in connection with the offering, except for
reimbursement of expenses actually incurred on behalf of the
Company in connection with the offering.
8
No dealer, salesman or other person is
authorized to give any information or to
make any representations other than
those contained in this prospectus in
connection with the offer made in this
offering. If given or made, the
information or representations must not
be relied upon as having been authorized
by New Paradigm. This prospectus does
not constitute an offer to sell or a
solicitation of an offer to buy any of the
securities covered in this offering, in any
jurisdiction or to any person to whom it is
unlawful to make the offer or solicitation
in the jurisdiction. Neither the delivery of
this prospectus nor any sale made
hereunder shall, in any circumstances,
create any implication that there has been
no change in the affairs of New Paradigm
since the date of this prospectus.
Until January 24, 2001, 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 dealers' obligation to
deliver a prospectus when acting as
underwriters and with respect to their
unsold allotments or subscriptions.
New Paradigm Productions, Inc.
100,000 shares
Common stock
PROSPECTUS
October 26, 2000