Registration Number 333-32634
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment #4 to
Form SB-2
Amended Form SB - 2REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
PARAGON POLARIS STRATEGIES.COM INC.
(Exact name of registrant as specified in its charter)
Nevada 0273 76-0609444
(State or jurisdiction (Primary Standard (I.R.S.
of incorporation or Industrial Classification Employer
organization) Code Number) Identification No.)
404 Scott Point Drive, Salt Spring Island, BC V8K 2R2 Canada
(Address, including zip code, and telephone number,
including area code,
of registrant's principal executive offices)
Agent for Service: With a Copy to:
Robert Foo Christopher J. Moran, Jr.
Paragon Polaris Strategies.com Inc. 4625 Clary Lakes Drive
404 Scott Point Drive Roswell, Georgia 30075
Salt Spring Island, BC V8K 2R2 Canada Tel: (770) 518-9542
(250) 537-5732 Fax: (770) 518-9640
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Approximate date of commencement of proposed sale to the public:
:As soon as practicable after the effective date of
this Registration Statement.
If any of the securities being registered on this
form are to be offered on a delayed or continuous basis
pursuant to Rule 415 under the Securities Act, check the
following box. [x]
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 for 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
Proposed Proposed
Amount Maximum Maximum Amount of
Title To be Offering Aggregate Registration
of each Registered Price Offering Fee
Class of per unit price
Securities
to be
registered
$
Common 1,000,000 $ .20 per 200,000.00 $ 56.00
stock shares share
No exchange or over-the-counter market exists for Paragon
Polaris Strategies.com Inc. common stock. The average price
paid for Paragon Polaris Strategies.com Inc. common stock
was $.0004 per share.
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 Securities and Exchange Commission, acting pursuant
to such section 8(a), may determine.
SUBJECT TO COMPLETION
Prospectus
PARAGON POLARIS STRATEGIES.COM, INC.
1,000,000 Shares of Common Stock to be sold by the
registrant as issuer.
This is the initial public offering of common stock of
Paragon Polaris Strategies.com Inc. and no public market
currently exists for these shares. There is no minimum or
escrow arrangements, no commissions will be paid and the
price of the common shares of this offering was arbitrarily
set. Paragon Polaris Strategies.com Inc. is offering for
sale up to one million shares of its common stock on a "self-
underwritten" best efforts basis at a price of $0.20 per
share for a period of one hundred and eighty days following
the effective date of the registration statement, of which
this prospectus forms a part.
This investment involves a high degree of risk. See "Risk
Factors" beginning on page 1.
Neither the SEC nor any state securities commission has
approved or disapproved of these securities or passed upon
the adequacy or accuracy of this prospectus. The SEC has not
made any recommendations that you buy or not buy the shares.
Any representation to the contrary is a criminal offense.
We will amend and complete the information in this
prospectus. Although we are permitted by US federal
securities law to offer these securities using this
prospectus, we may not sell them or accept your offer to buy
them until the documentation filed with the SEC relating to
these securities has been declared effective by the SEC.
This prospectus is not an offer to sell these securities or
our solicitation of your offer to buy these securities in
any jurisdiction where that would not be permitted or legal.
TABLE OF CONTENTS
PARAGON POLARIS STRATAGIES.COM INC.
Summary Information and Risk Factors 1
Use of Proceeds 3
Determination of Offering Price 4
Dilution 4
Plan of Distribution 5
Legal Proceedings 5
Directors, Executive Officers, Promoters and Control Persons 5
Security Ownership of Certain Beneficial Owners and
Management 6
Description of Securities 7
Disclosure of the Commission Position on the Indemnification
for Securities Act Liabilities 8
Organization Within Last Five Years 8
Description of Business 8
Management's Discussion and Analysis or Plan of Operation 21
Description of Property 22
Certain Relationships and Related Transactions 22
Market for Common Equity and Related Shareholder Matters 23
Executive Compensation 25
Financial Statements 26
Changes In and Disagreements With Accountants on Accounting
and Financial Disclosure 40
PART I - SUMMARY INFORMATION AND RISK FACTORS.
Prospectus Summary
Paragon Polaris Strategies.com Inc. is a corporation formed under
the laws of the State of Nevada on May 27, 1999 whose principal
executive offices are located on Salt Spring Island, British
Columbia, Canada.
The primary objective of the business is designed to market high-
quality, low-cost vitamins, minerals, nutritional supplements,
and other health and fitness products to medical professionals,
alternative health professionals, martial arts studios and
instructors, sports and fitness trainers, other health and
fitness professionals, school and other fund raising programs and
other similar types of customers via the Internet for sale to
their clients. Our license is for the states of Idaho and Oregon
We are a shell corporation in the development stage and have no
revenues.
Name, Address, and Telephone Number of Registrant
Paragon Polaris Strategies.com, Inc.
404 Scott Point Drive
Salt Spring Island, BC V8K 2R2, CANADA
(250) 537-5732
The Offering
- - Price per share offered $0.20
- - Common Stock offered by the company 1,000,000 shares
- - Common stock to be outstanding after the offering 3,600,000 shares
assuming all shares are sold
Common stock to be outstanding after the offering 3,100,000 shares
assuming 50% of shares offered are sold
- - use of proceeds - to fund marketing and setting up of
dealers to handle line of vitamins and mineral supplements.
Risk Factors
Risk factors affecting operating results
We have had losses since inception and expect such losses to
continue for the foreseeable future.
Paragon Polaris has never had any revenues. Costs are incurred
to set up the business plan and to get into business. While the
licensor, VitaMineralHerb.com, or '"Vita", has set up the master
web page and organized the processing of purchases, we must
provide our own accounting systems and sales planning including
finding and hiring good, reliable sales people. These efforts
will use our cash reserves. We will not have any substantial
cash reserves until this offering is complete. If this offering
is not completed, we will not be able to get into business. This
could have a serious affect on the price of our stock.
Once we get into business and sales begin, we still expect to
lose money for a considerable period. We will record losses
until our profits from sales exceed our expenses. If we do not
accomplish this, any and all funds that we have in reserve will
be used up. You should consider these facts carefully before you
invest.
We expect to need additional financing and such financing may not
be available.
Paragon Polaris does not have sufficient capital to properly get
into business, to respond to new technical developments or
competition or to take advantage of unexpected opportunities.
Such items as special marketing programs, the development of new
services or opportunities to acquire complimentary businesses
require capital. Our success, if any, of establishing the
business, creation of sales and follow-up service depends upon
new capital through this offering.
Management estimates that our minimum expenses for the first
twelve months of operation will be $150,000. That figure
represents approximately 75% of the proceeds from this offering.
If the offering is fully subscribed to and after the costs of
this offering are deducted, we would have approximately $50,000
in working capital.
Should this offering be unsuccessful we would be faced with
several options:
- - cease operations and go out of business completely;
- - begin looking for additional capital on terms that are
acceptable; or
- - bring in additional capital that involves a change of
control.
You should be aware of one fact: if this offering is unsuccessful
we will be unable to implement our business plan unless and until
a new source of acceptable financing is found.
No other source of capital has been approached and we do not have
any other sources readily available. If other sources are
available we have no idea whether capital can be obtained on
terms and conditions that are acceptable. Further, any such
financing may be upon terms that result in dilution or
considerable lessening of value of the shares currently held by
Paragon Polaris. shareholders.
We are totally dependent on one supplier and one website and any
difficulties with these could seriously affect our chances of
success.
VitaMineralHerb.com, the licensor is both the supplier of all of
our products and our customers, if any, access to those products.
If for any reason the licensor has a problem, whether it be
technical, financial or a default under their agreement with
their suppliers it will have a direct affect on our sales and
revenues, if any. Any permanent disruption of
VitaMineralHerb.com's ability to supply us with products or an
ordering method via the Internet would put us out of business and
at the very least cause a major reorganization to secure new
products and a new website. The affect on the value of our
common stock would be very negative. Some points of specific
concern are:
- we have only one supplier;
- we have only one ordering facility: the
VitaMineralHerb.com website;
- Vita mineralherb.com has only one suppler; and
- VitaMineralHerb.com is dependent on many licensees getting
into business and being successful.
If the Paragon Polaris business plan fails or proves to be
impractical we may be considered a Blank Check Company which
would restrict re-sales of our common stock.
Use of Proceeds
Table 1 - Assumes all shares offered are sold:
Legal Fees $30,000
Accounting 10,000
Electronic filing and printing 5,000
Start up costs including office equipment, telephone
system, computers and software 60,000
Recruiting and salaries 45,000
Working Capital 50,000
Total 200,000
Table 2 - Assumes 50% of shares offered are sold:
Legal Fees $30,000
Accounting 10,000
Electronic filing and printing 5,000
Start up costs including office equipment, telephone
system, computers and software 30,000
Recruiting and salaries 25,000
Total 100,000
We have estimated that we will have approximately $50,000
working capital if this offering is fully subscribed to. This
money will be used for contingency and/or additional
unanticipated expenses of getting the business started. This
money may or may not be enough to run the business until sales
revenues can take over. If it is not enough we will be forced to
look for more funding. No arrangements have been made for this
funding.
Determination of Offering Price
The offering price of this issue was set in a purely arbitrary
manner. We determined the amount of money needed to start the
business; added a contingency amount; allowed for printing, legal
and accounting costs. We also took into account the resultant
number of shares in the "float", i.e. the number of shares
available to be traded. The final consideration was the
perceived market capitalization, the theoretical total worth of
the shares of Paragon Polaris if they were all sold at a specific
price at the same time.
Dilution
Prior to this offering Paragon Polaris has 2,600,000 shares of
stock issued and outstanding. The following table illustrates
the difference between prices paid by present shareholders and
subscribers to this offering.
Percentage Percentage Percentage Percentage
of Consideration of Consideration of Shares of Shares
Price 50% Subscription 100% Subscription Held - 50% Held - 100%
Paid
Present
Shareholders 0.005 11.10 05.88 83.87 72.23
Subscribers 0.20 88.90 94.12 16.13 27.77
"Dilution" means the difference between our public offering price
($0.20 per share) and our pro forma net tangible book value per
share after giving effect to this offering. Net tangible book
value per share is determined by dividing our tangible net worth,
consisting of tangible assets less total liabilities, by the
number of shares outstanding. The following table illustrates
under the above assumptions the dilution of a new investor's
equity as of September 30, 2000.
As of September 30, 2000, we have issued 2,600,000 shares to
our current shareholders in exchange for $13,000 in cash (an
average of approximately $0.005 per share). Our net tangible
book value as of September 30, 2000 was minus ($293) or
approximately minus ($0.0001 per share. Giving effect to the
sale of all shares offered for cash, the pro forma net tangible
book value of the Company after deducting expenses of this
offering estimated at $45,000 , would be approximately $155,000
if our entire offering is sold or approximately $0.043 per share,
which represents an increase of approximately $0.043 in the net
tangible book value per share to present shareholders and an
immediate dilution of $0.157 to public investors.
Public offering price per share $0.20
Net tangible book value per share before offering ($0.0001)
Increase per share attributable to public investors $0.043
Pro forma net tangible book value per share after offering $0.043
Dilution per share to public investors $0.157
Plan of Distribution
This is a self - underwritten offering. This prospectus is part
of a registration statement that permits the officers and
directors of Paragon Polaris, pursuant Rule 3a4-1 of the
Securities Exchange Act of 1934, to sell directly to the public
with no commission or other remuneration payable.
Legal Proceedings.
We are not aware of any legal proceedings that have been or are
currently being undertaken for or against Paragon Polaris nor is
any contemplated
Directors, executive officers, promoters and control persons.
The directors and executive officers currently serving Paragon
Polaris are as follows:
Name Age Positions Held and Tenure
Robert Foo 49 President and Director since
December, 1999
Samuel Lau 32 Secretary/Treasurer and
Director since December,1999
The directors named above will serve until the first annual
meeting of the stockholders of Paragon Polaris stockholders.
Thereafter, directors will be elected for one-year terms at the
annual stockholders' meeting. Officers will hold their positions
at the pleasure of the board of directors, absent any employment
agreement, of which none currently exists or is contemplated.
There is no arrangement or understanding between the directors
and officers and any other person pursuant to which any director
or officer was to be selected as a Director or Officer.
Biographical information
Robert Foo. Robert Foo, a native of Malaysia and a Canadian
citizen, is the President and a Director of Paragon Polaris. In
1975 he graduated from Southern Alberta Institute of Technology
with a degree in Business Administration. From 1975 to 1977 Mr.
Foo was in the management program of the Denny?s Restaurant
chain. From 1977 through 1980 he was a sale agent for The
Metropolitan Life Insurance Company. From 1980 to 1986 he was a
sales representative of Seaboard Life Insurance. Mr. Foo served
as the promoter of Archer Communications, Inc. from 1986 to 1988
and currently is President and Chief Executive Officer of Trans
Asia Resources, Inc., an oil and gas exploration company,
currently engaged in drilling in Texas in conjunction with NYSE
listed Apache Petroleum, Inc.
Samuel Lau. Mr. Lau is the Secretary Treasurer and a Director of
Paragon Polaris.
Since July, 1998 he has served the corporate secretary and office
manage of Trans Asia Resources, Inc. an oil and gas
exploration company. For the two years preceding June, 1998, Mr.
Lau was a supervisor at a large Travel Agency, Happy Times
Travel. From September, 1996 to May, 1998 he was a travel
consultant with Quality Travel. From 1991 through 1993 he was a
sales representative for Key Jewelry. Mr. Lau attended York
University, Toronto Ontario.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of the date of this
Registration statement, the number of shares of Common Stock
owned of record and beneficially by executive officers, directors
and persons who hold 5.0% or more of the outstanding Common Stock
of Paragon Polaris. Also included are the shares held by all
executive officers and directors as a group.
Number of Percent of
Shares Owned
Name and Address Beneficially Class Owned
Robert Foo 250,000 9.62
4138 Staulo Crescent
Vancouver, BC V8N 3S2
Samuel Lau 250,000 9.62
#211 - 1503 West 66th Avenue
Vancouver, BC V6P 2R8
Marie M. Charles 200,000 7.70
Po Box 4456
Pasadena, TX 77503
Roy Donovan Hinton Jr. 200,000 7.70
9200 Alemeda Genoa Road
Houston, TX 77075
Darren Quan 200,000 7.70
313 Oakhaven Drive
Pleasanton, TX 78064
George R. Quan 200,000 7.70
29 King Street
Belize City, Belize
Marsha Quan 200,000 7.70
313 Oakhaven Drive
Pleasanton, TX 78064
All directors and executive
Officers as a group (2 persons) 500,000 19.23 %
The persons listed are the sole officers and directors of Paragon
Polaris
Conflicts of Interest
The officers and directors will only devote a portion of their
time to the affairs of Paragon Polaris. There will be occasions
when the time requirements of the business conflict with the
demands of their other business and investment activities. We
may need to employ additional personnel. If this happens, we
cannot be sure that good people will be available and if they are
available, we can get them at a price we can afford.
There is no procedure in place, which would allow either Mr. Foo
or Mr. Lau to resolve potential conflicts in an arms-length
fashion. We must rely on them to use their discretion to resolve
these conflicts.
Description of securities
Common Stock.
The Articles of Incorporation of Paragon Polaris authorize the
issuance of 25,000,000 shares of Common Stock. Each holder of
record of Common Stock is entitled to 1 vote for each share held
on all matters properly submitted to the stockholders for their
vote. The Articles of Incorporation do not permit cumulative
voting for the election of directors.
Holders of Common Stock are entitled to such dividends as may be
declared from time to time by the Board of Directors out of
legally available funds. In the event of liquidation,
dissolution or winding up of the affairs of the Paragon Polaris,
holders are entitled to receive, ratably, the net assets
available to stockholders after distribution is made to the
preferred shareholders, if any.
Holders of Common Stock have no preemptive, conversion or
redemptive rights. All of the issued and outstanding shares of
Common Stock are, and all unissued shares when issued will be
duly authorized, validly issued, fully paid, and non assessable.
If additional shares of Paragon Polaris Common Stock are issued,
the relative interests of then existing stockholders may be
diluted.
Transfer Agent
Paragon Polaris is currently serving as its own transfer agent,
and plans to continue to serve in that capacity until such time
as management believes it is necessary or appropriate to employ
an independent transfer agent in order to facilitate the creation
of a public trading market for its securities. Should Paragon
Polaris securities be quoted on any exchange or OTC quotation
system or application is made to have the securities quoted, an
independent transfer agent will be appointed.
Indemnification of Officers and Directors
As permitted by Nevada law, Paragon Polaris's Articles of
Incorporation provide that Paragon Polaris will indemnify its
directors and officers against expenses and liabilities they
incur to defend, settle or satisfy any civil or criminal action
brought against them on account of their being or having been
Company directors or officers, unless, in any such action, they
are adjudged to have acted with gross negligence or willful
misconduct.
Exclusion of Liabilities
Pursuant to the laws of the State of Nevada, Paragon Polaris's
Articles of Incorporation exclude personal liability for its
directors for monetary damages based upon any violation of their
fiduciary duties as directors, except as to liability for any
breach of the duty of loyalty, acts or omissions not in good
faith or which involve intentional misconduct or a knowing
violation of law, acts in violation of Section 7-106-401 of the
Nevada Business Corporation Act, or any transaction from which a
director receives an improper personal benefit. This exclusion
of liability does not limit any right, which a director may have
to be indemnified, and does not affect any director's liability
under federal or applicable state securities laws.
Disclosure of Commission position on indemnification for
Securities Act liabilities
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or
persons controlling Paragon Polaris pursuant to provisions of the
State of Nevada, Paragon Polaris has been informed that, in the
opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in that Act
and is, therefore, unenforceable.
Organization within the last five years
Paragon Polaris was incorporated in the State of Nevada on May
27, 1999 and is in the early stages of development. From
inception the only activities of Paragon Polaris have been the
development of its business plan and the preparation for this
Registration statement. It has no revenues nor does it have any
expectation of revenues until the completion of this offering and
the commencement of business.
Description of business
On July 1, 1999 Paragon Polaris received from David R. Mortenson
& Associates of Alvin, Texas, the rights to distribute and
produce, in the state of Pennsylvania, an oxygen enriched water
product for fish farming, aquaculture, mariculture, poultry
raising, and for treating animal waste from dairies, feedlots of
all kinds, and for other similar uses. These production and
distribution rights were received from Mortenson and Associates
in exchange for 2,000,000 shares of common stock. Mortenson
acquired these rights from the inventors of the product, N. W.
Technologies, Inc. under a distribution agreement. Several
months later the contract granting David R. Mortenson &
Associates rights to the technology was withdrawn. Mortenson
sued NW Technologies Inc. in Harris County Court, Houston Texas.
To compensate for the possibility that we could lose our
principal asset and the obvious delay that this dispute and court
action has caused, David R. Mortenson & Associates has agreed to
suspend all financial requirements that are due or will be due in
the future until the dispute with NW is resolved. They have also
agreed to grant an alternative license to Paragon Polaris for the
distribution of vitamin and herbal supplements for the states of
Idaho and Oregon. This license will enable us to create a
business plan and start the process of getting into business.
The License.
Paragon Polaris has a three year license to market and sell
vitamins, minerals, nutritional supplements, and other health and
fitness products to medical professionals, alternative health
professionals, martial arts studios and instructors, sports and
fitness trainers, other health and fitness professionals, school
and other fund raising programs and other similar types of
customers. All of these individuals and organizations will
order their products directly from VitaMineralHerb.com via the
Internet for sale to their clients. The license will be
automatically renewed unless Paragon Polaris or
VitaMineralHerb.com gives the other notice of its intent not to
renew.
As a licensee of VitaMineralHerb.com, Paragon Polaris eliminates
the need to develop products, store inventory, build and maintain
a website, establish credit card processing and develop a
fulfillment system. This enables us to focus strictly on
marketing and sales. Paragon Polaris plans to target health and
fitness professionals in Idaho and Oregon who wish to offer
health and fitness products to their customers.
Paragon Polaris and its customers will have access to all
products offered on the VitaMineralHerb.com website, as well as
the ability to order custom-formulated and custom-labeled
products. VitaMineralHerb.com sets the price for products based
on the manufacturer's price, plus a markup that provides a 10%
commission to VitaMineralHerb.com and a profit for Paragon
Polaris.
Three different labeling options are available to customers:
- products may be ordered with the manufacturer's standard
label with no customization.
- the fitness or health professional may customize the labels
by adding its name, address, and phone number to the standard
label. In most cases, these labels would be a standardized label
with product information and a place on the label for the wording
"Distributed by". This gives the health and fitness professionals
a competitive edge.
- labels may be completely customized for the health or
fitness professional.
When a fitness or health professional becomes a client, the
Paragon Polaris salesperson will show the client how to access
the VitaMineralHerb.com website. The client is assigned an
identification number that identifies it by territory,
salesperson, and business name, address, and other pertinent
information. The health or fitness professional may then order
the products it desires directly through the VitaMineralHerb.com
website, paying for the purchase with a credit card, electronic
check or "e-check", or debit card. All products are shipped by
the manufacturer directly to the professional or its clients.
Paragon Polaris is not obliged to purchase and maintain a large
inventory, an order desk or shipping department. This method of
doing business, which only a short time ago would be unthinkable
is now a preferred way of shopping, whether wholesale or retail,
for a large segment of the population of North America.
The website is maintained by VitaMineralHerb.com and each
licensee pays an annual website maintenance fee of $500. All
financial transactions are handled by Vita's Internet clearing
bank. The VitaMineralHerb.com webmaster downloads e-mail orders
several times a day, checks with the clearing bank for payment
and then submits the product order and electronic payment to
International Formulation and Manufacturing. VitaMineralHerb.com
then forwards the money due Paragon Polaris via electronic funds
transfer.
VitaMineralHerb.com software tracks all sales through the
customer's identification number, and at month end, e-mails to
Paragon Polaris a detailed report including sales commissions.
VitaMineralHerb.com has indicated that it will use e-commerce
advertising such as banner ads on major servers and web sites, as
well as attempting to insure that all major search engines pick
VitaMineralHerb.com first. All sales originating from the website
to customers located in Idaho and Oregon will automatically be
assigned to Paragon Polaris
Background on the Manufacturer and Distributor.
On June 9, 1999, VitaMineralHerb.com entered into a manufacturing
agreement with International Formulation and Manufacturing Inc.,
a nutraceuticals manufacturing firm, located in San Diego,
California. International Formulation and Manufacturing has been
a contract manufacturer of vitamin, mineral, nutritional
supplement, and alternative health products for various marketing
organizations for approximately six years. International
Formulation and Manufacturing does no retail marketing.
In addition to a line of standard products, International
Formulation and Manufacturing is able to manufacture custom
blended products for customers. They also have the capability to
supply privately labeled products for Paragon Polaris customers
at a minimal added cost. VitaMineralHerb.com has just begun
developing its vitamin marketing and distributorship business.
Implementation of the business plan.
The Paragon Polaris business plan is to determine the feasibility
of selling VitaMineralHerb.com products to targeted markets. We
will conduct research into the various potential target markets
during the next six to twelve months. Should Paragon Polaris
determine that its business plan is feasible, it intends to
employ salespeople to call on medical professionals, alternative
health professionals, martial arts studios and instructors,
sports and fitness trainers, other health and fitness
professionals, school and other fund raising programs and other
similar types of customers to interest these professionals in
selling to their clients high-quality, low-cost vitamins,
minerals, nutritional supplements, and other health and fitness
products. These professionals would sell the products to their
clients and order them through the Internet.
Milestones:
- - Confirmation of Market - February, 2001. Management of
Paragon Polaris has already begun to implement the first
stage of the business plan. We intend to retain Mr. Edward
Best of dealbuzz.com Inc. to do a marketing survey of the
States of Idaho and Oregon. Mr. Best recently completed a
sampling of 200 potential clients in the boroughs of
Brooklyn, Queens and the Bronx, New York City considered by
many to be one of the hardest and most competitive markets
in the world. The results were very encouraging. 38% of
the 200 potential customers contacted responded positively.
Mr. Best estimates that it will take some 30 days to
complete his sampling of our market. Our cost will be
$1,500.
- - Establishment of an office - .March, 2001 One
administration office is planned for the whole province.
Sales people would office in their own homes. The one
office that we would establish would act as a coordinating
and business office, looking after sales support, book
keeping and payroll. We estimate that office space will
cost in the neighborhood of $16 per square foot including
taxes and insurance. We estimate that we will require about
1,000 square feet initially.
- - Recruiting and training of sales people - 2nd quarter 2001.
We estimate that we will require two sales people to cover
the Province of Alberta; one headquartered in the city of
Calgary covering the south half of the province and the
other in Edmonton, the Provincial Capitol. Sales people
will be provided with a basic draw against commissions of
$1,000 per month. Our plan is have them initially cover the
two major cites, thereby keeping expenses to a minimum.
From Calgary and Edmonton, the secondary cities of Red Deer,
Lethbridge Peace River and Lloydminster will be covered.
Rural Alberta with hundreds of small towns and villages will
be pre-qualified by telephone and then paid a sales call.
Cost of recruiting is estimated at $3,000.
- - Advertising - beginning July, 2001. We envision advertising
of our products and services as a very low-keyed approach.
We believe that direct mail is the best and most cost
effective method of reaching our potential clients. Due to
the fact that we are targeting a fairly narrow segment of
the population as potential retailers, a well-designed mail
piece and cover letter with follow up by telephone should be
adequate to introduce us to our potential clients. Design
and production of a mailing piece is estimated at $7,000.
- - Generation of Revenues - July-August, 2001. Management of
Paragon Polaris believes that a planned, slow-but-steady
growth pattern will serve the organization in the best
fashion. By keeping costs low and concentrating first on
the major centers, we believe that we can generate revenues
in a fairly short time. Initial order will provide a
comparatively large purchase by the retailer. After that
the distributors will order product as they require it. We
believe that the initial surge of orders will provide enough
cash flow to keep from using our working capital too rapidly
and that we will be able to reach a break-even point or a
small profit position before our capital is used up..
If the net proceeds received from this offering are not enough to
accomplish those things we will have to obtain additional
financing through an additional offering or through capital
contributions by current shareholders. No commitments to provide
additional funds have been made by management or shareholders.
You cannot be sure that any additional funds will be available on
terms acceptable to Paragon Polaris or at all. Paragon Polaris
expects to begin earning revenues shortly after a sales force is
in place.
Growth of the Internet and electronic commerce.
The Internet has become an increasingly significant medium for
communication, information and commerce. According to NUA
Internet Surveys, as of February 2000, there were approximately
275.5 million Internet users worldwide. At the IDC Internet
Executive Forum held on September 28-29, 1999, IDC stated that in
1999 US $109 billion in purchases were impacted by the Internet.
IDC's vice president, Sean Kaldor, indicated that figure is
expected to increase more than ten-fold over the next five years
to US $1.3 trillion in 2003, with $842 million completed directly
over the Web. Paragon Polaris believes that this dramatic growth
presents very real opportunities for online retailers.
The vitamin, supplement, mineral and alternative health product
market
In recent years, a growing awareness of vitamins, herbs, and
other dietary supplements by the general public has created a
whole new segment in the field of medicine and health care
products. According to Jupiter Communications, online sales of
such products are expected to be $434 million in the year 2003,
up from $1 million in 1998. Paragon Polaris believes that several
factors are driving this growth, including a rapidly growing
segment of the population that is concerned with aging and
disease. There is also a growing interest in preventative health
care, favorable consumer attitudes toward alternative health
products and a favorable regulatory statute, the Dietary
Supplement Health and Education Act of 1994.
The electronic commerce industry is new, rapidly evolving and
intensely competitive, and Paragon Polaris expects competition to
intensify in the future. Barriers to entry are minimal and
current and new competitors can launch sites at a relatively low
cost. In addition, the vitamin supplement, mineral and
alternative health product market is very competitive and highly
fragmented, with no clear dominant leader and increasing public
and commercial attention.
Paragon Polaris's competitors can be divided into several groups
including:
- traditional vitamins, supplements, minerals and alternative
health products retailers;
- the online retail initiatives of several traditional
vitamins, supplements, minerals and alternative health products
retailers;
- online retailers of pharmaceutical and other health-related
products that also carry vitamins, supplements, minerals and
alternative health products;
- independent online retailers specializing in vitamins,
supplements, minerals and alternative health products;
- mail-order and catalog retailers of vitamins, supplements,
minerals and alternative health products, some of which have
already developed online retail outlets; and
- direct sales organizations, retail drugstore chains, health
food store merchants, mass market retail chains and various
manufacturers of alternative health products.
Many of Paragon Polaris's potential competitors have longer
operating histories, larger customer or user base, greater brand
recognition and significantly greater financial, marketing and
other resources than we have. In addition, an online retailer
may be acquired by, receive investments from, or enter into other
commercial relationships with, larger, well-established and well-
financed companies as use of the Internet and other electronic
services increases.
Competitors have and may continue to have aggressive pricing
policies and devote substantially more resources to website and
systems development than Paragon Polaris does. Increased
competition may result in reduced operating margins and loss of
market share.
Paragon Polaris believes that the principal competitive factors
in its market are:
- ability to attract and retain customers;
- variety of product selection;
- product pricing;
- ability to customize products and labeling;
- quality and responsiveness of customer service.
We believe that we can compete favorably on these points.
However, we will have no control over how successful our
competitors are in addressing these factors. In addition Paragon
Polaris online competitors can duplicate many of the products or
services offered on the VitaMineralHerb.com site.
Paragon Polaris believes that traditional retailers of vitamins,
supplements, minerals and other alternative health products face
several challenges in succeeding.
- Lack of convenience and personalized service. Traditional
retailers have limited store hours and locations. Traditional
retailers are also unable to provide consumers with product
advice tailored to their particular situation.
- Limited product assortment. The capital and real estate
intensive nature of store-based retailers limit the product
selection that can be economically offered in each store
location.
- Lack of customer loyalty. Although the larger traditional
retailers often attract customers, many of these customers are
only one-time users. People are often attracted to the name
brands, but find the products too expensive.
- the multilevel structure of some marketing organizations
mandates high prices.
As a result we believe there is significant unmet demand for a
shopping channel like that of VitaMineralHerb.com that can
provide consumers of vitamins, supplements, minerals and other
alternative health products with a broad array of products and a
convenient and private shopping experience.
Paragon Polaris hopes to attract and retain consumers through the
following key attributes of its business:
- Broad Expandable Product Assortment. Paragon Polaris
product selection is substantially larger than that offered by
store-based retailers.
- Low Product Prices. Product prices can be kept low due to
volume purchases through Paragon Polaris's affiliation with
VitaMineralHerb.com and other licensees. Having no inventory,
warehouse space and the need for limited administration will also
make our prices lower. All products are shipped from
International Formulation and Manufacturing's inventory.
- Accessibility to Customized Products. At minimal cost,
health and fitness practitioners may offer their customers
customized products.
- Access to Personalized Programs. Health or fitness
professional can tailor vitamin and dietary supplement regimes to
their clients.
Regulatory Environment
The manufacturing, processing, formulating, packaging, labeling
and advertising of the products Paragon Polaris sells will be
subject to regulation by one or more U.S. federal agencies,
including the Food and Drug Administration, the Federal Trade
Commission, the United States Department of Agriculture and the
Environmental Protection Agency. These activities also may be
regulated by various agencies of the states, localities and
foreign countries in which consumers reside.
The Food and Drug Administration, in particular, regulates the
formulation, manufacture, labeling and distribution of foods,
including dietary supplements, cosmetics and over-the- counter or
homeopathic drugs. Under the Federal Food, Drug, and Cosmetic
Act, the Food and Drug Administration may undertake enforcement
actions against companies marketing unapproved drugs, or
"adulterated" or "misbranded" products. The remedies available
to the Food and Drug Administration include: criminal
prosecution; an injunction to stop the sale of a company's
products; seizure of products; adverse publicity; and "voluntary"
recalls and labeling changes.
Food and Drug Administration regulations require that certain
informational labeling be presented in a prescribed manner on all
foods, drugs, dietary supplements and cosmetics. Specifically,
the Food, Drug, and Cosmetic Act requires that food, including
dietary supplements, drugs and cosmetics, not be "misbranded". A
product may be deemed an unapproved drug and "misbranded" if it
bears improper claims or improper labeling.
The Food and Drug Administration has indicated that promotional
statements made about dietary supplements on a company's website
may constitute "labeling" for purposes of compliance with the
provisions of the Food, Drug, and Cosmetic Act. A manufacturer or
distributor of dietary supplements must notify the Food and Drug
Administration when it markets a product with labeling claims
that the product has an affect on the structure or function of
the body. Noncompliance with the Food, Drug, and Cosmetic Act,
and recently enacted amendments to that Act discussed below,
could result in enforcement action by the Food and Drug
Administration.
The Food, Drug, and Cosmetic Act has been amended several times
with respect to dietary supplements, most recently by the
Nutrition Labeling and Education Act of 1990 and the Dietary
Supplement Health and Education Act of 1994. The Dietary
Supplement Health and Education Act created a new statutory
framework governing the definition, regulation and labeling of
dietary supplements.
With respect to definition, the Dietary Supplement Health and
Education Act created a new class of dietary supplements,
consisting of vitamins, minerals, herbs, amino acids and other
dietary substances for human use to supplement the diet, as well
as concentrates, metabolites, extracts or combinations of such
dietary ingredients.
Generally, under the Dietary Supplement Health and Education Act,
dietary ingredients that were on the market before October 15,
1994 may be sold without Food and Drug Administration pre-
approval and without notifying the Food and Drug Administration.
In contrast, a new dietary ingredient, i.e., one not on the
market before October 15, 1994, requires proof that it has been
used as an article of food without being chemically altered or
evidence of a history of use or other evidence of safety
establishing that it is reasonably expected to be safe.
Retailers, in addition to dietary supplement manufacturers, are
responsible for ensuring that the products they market for sale
comply with these regulations. Noncompliance could result in
enforcement action by the Food and Drug Administration, an
injunction prohibiting the sale of products deemed to be non-
compliant, the seizure of such products and criminal prosecution.
The Food and Drug Administration has indicated that claims or
statements made on a company's website about dietary supplements
may constitute "labeling" and thus be subject to regulation by
the Food and Drug Administration. With respect to labeling, the
Dietary Supplement Health and Education Act amends, for dietary
supplements, the Nutrition Labeling and Education Act by
providing that "statements of nutritional support" also referred
to as "structure/function claims" may be used in dietary
supplement labeling without Food and Drug Administration pre-
approval, provided certain requirements are met.
These statements may describe how particular dietary ingredients
affect the structure or function of the body, or how a dietary
ingredient may affect body structure or function, but may not
state a drug claim. Here is an example: a claim that a dietary
supplement will diagnose, mitigate, treat, cure or prevent a
disease. A company making a "statement of nutritional support"
must possess substantiating evidence for the statement, disclose
on the label that the Food and Drug Administration has not
reviewed the statement and that the product is not intended for
use for a disease and notify the Food and Drug Administration of
the statement within 30 days after its initial use.
It is possible that the statements presented in connection with
product descriptions on VitaMineralHerb.com site may be
determined by the Food and Drug Administration to be drug claims
rather than acceptable statements of nutritional support. In
addition, some of our suppliers may incorporate objectionable
statements directly in their product names or on their products'
labels, or otherwise fail to comply with applicable
manufacturing, labeling and registration requirements for over-
the-counter or homeopathic drugs or dietary supplements. As a
result, VitaMineralHerb.com may have to remove some statements or
products from its site or modify these statements, names or
labels, in order to comply with Food and Drug Administration
regulations. Such changes could interfere with Paragon Polaris
marketing of products and could cause us to incur significant
additional expenses.
In addition, the Dietary Supplement Health and Education Act
allows the dissemination of "third party literature" in
connection with the sale of dietary supplements to consumers at
retail if the publication meets statutory requirements. Under
the Dietary Supplement Health and Education Act, "third party
literature" may be distributed if, among other things, it is not
false or misleading, no particular manufacturer or brand of
dietary supplement is promoted, a balanced view of available
scientific information on the subject matter is presented and
there is physical separation from dietary supplements in stores.
The extent to which this provision may be used by online
retailers is not yet clear, and we cannot assure you that all
pieces of "third party literature" that may be put out in
connection with the products Paragon Polaris offers for sale will
be determined to be lawful by the Food and Drug Administration.
Any such failure could make that product an unapproved drug or a
"misbranded" product, and may be exposing us to enforcement
action by the Food and Drug Administration. This could require
the removal of the non-compliant literature from the
VitaMineralHerb.com website or the modification of Paragon
Polaris selling methods. This could interfere with the marketing
of that product and cause us to incur significant additional
expenses.
Given the fact that the Dietary Supplement Health and Education
Act was enacted only five years ago, the Food and Drug
Administration's regulatory policy and enforcement positions on
certain aspects of the new law are still evolving. Moreover,
ongoing and future litigation between dietary supplement
companies and the Food and Drug Administration will likely
further refine the legal interpretations of that Act. As a
result, the regulatory status of certain types of dietary
supplement products, as well as the nature and extent of
permissible claims will remain unclear for the foreseeable
future.
Two areas in particular that pose potential regulatory risks are
the limits on claims implying some benefit or relationship with a
disease or related condition and the application of the physical
separation requirement for "third party literature" as applied to
Internet sales.
In addition to the regulatory situation under the Food, Drug and
Cosmetic Act, the advertising and promotion of dietary
supplements, foods, over-the-counter drugs and cosmetics is
subject to scrutiny by the Federal Trade Commission. The Federal
Trade Commission Act prohibits "unfair or deceptive" advertising
or marketing practices, and it has pursued numerous food and
dietary supplement manufacturers and retailers for deceptive
advertising or failure to substantiate promotional claims,
including, in many instances, claims made via the Internet.
The Federal Trade Commission has the power to seek administrative
or judicial relief prohibiting a wide variety of claims, to
enjoin future advertising, to seek redress or restitution
payments and to seek a consent order and seek monetary penalties
for the violation of a consent order. In general, existing laws
and regulations apply fully to transactions and other activity on
the Internet. The Federal Trade Commission is in the process of
reviewing its policies regarding the applicability of its rules
and its consumer protection guides to the Internet and other
electronic media.
The Federal Trade Commission has already undertaken a new
monitoring and enforcement initiative, "Operation Cure-All"
targeting allegedly bogus health claims for products and
treatments offered for sale on the Internet. Many states impose
their own labeling or safety requirements that differ from or add
to existing federal requirements.
Paragon Polaris cannot predict the nature of any future laws,
regulations, interpretations or applications, nor can it say what
effect additional governmental regulations or administrative
orders would have on its business in the future. Although the
regulation of dietary supplements is less restrictive than that
of drugs and food additives, we cannot be sure that the current
laws and regulations concerning dietary supplements will remain
less restrictive.
The manufacturing, processing, formulating, packaging, labeling
and advertising of the products Paragon Polaris sells may also be
subject to regulation by one or more U.S. federal agencies,
including the Food and Drug Administration, the Federal Trade
Commission, the United States Department of Agriculture and the
Environmental Protection Agency. These activities also may be
regulated by various agencies of the states, localities and
foreign countries in which consumers reside.
Regulation of the Internet.
In general, existing laws and regulations apply to the Internet.
The exact manner in which these laws and regulations affect the
Internet is sometimes uncertain. Most of these laws were adopted
prior to the Internet and do not address the unique issues of the
Internet or electronic commerce.
Numerous federal and state government agencies have already
demonstrated significant activity in promoting consumer
protection on the Internet. Due to the increasing use of the
Internet as a medium for commerce and communication, it is
possible that new laws and regulations could be passed. These
new laws and regulations could cover issues such as user privacy,
freedom of expression, advertising, pricing, content and quality
of products and services, taxation, intellectual property rights
and information security. The adoption of such laws or
regulations and the way existing laws and regulations apply to
the Internet may slow the growth of Internet use and result in a
decline in Paragon Polaris sales.
A number of legislative proposals have been made at the federal,
state and local level, and by foreign governments, that would
impose additional taxes on the sale of goods and services over
the Internet, and some states have taken measures to tax Internet-
related activities. Although Congress recently placed a three-
year moratorium on new state and local taxes on Internet access
or on discriminatory taxes on electronic commerce, existing state
or local laws were expressly excepted from this moratorium. Once
this moratorium is lifted, some type of federal and/or state
taxes may be imposed upon Internet commerce. Such legislation or
other attempts at regulating commerce over the Internet may
substantially affect growth and have a negative affect on our
business.
Employees
Paragon Polaris is a development stage company and currently has
no employees. Paragon Polaris is currently managed by Robert Foo
and Samuel Lau, its officers and directors. We look to them for
their management and financial skills and talents. Management
plans to use consultants, attorneys and accountants as necessary
and does not plan to engage any full-time employees in the near
future other than sales people to set up accounts.
Available Information and Reports to Securities Holders
Paragon Polaris has filed with the Securities and Exchange
Commission a registration statement on Form SB-2 with respect to
the common stock offered by this prospectus. This prospectus,
which constitutes a part of the registration statement, does not
contain all of the information set forth in the registration
statement or the exhibits and schedules which are part of the
registration statement. For further information with respect to
Paragon Polaris and its common stock, see the registration
statement and the exhibits and schedules thereto. Any document
Paragon Polaris files may be read and copied at the Commission's
public reference room located at 450 Fifth Street N.W.,
Washington D.C. 20549. Please call the Commission at 1-800-SEC-
0330 for further information about the public reference rooms.
Paragon Polaris filings with the Commission are also available to
the public from the Commission's website at http://www.sec.gov.
Upon completion of this offering, Paragon Polaris will become
subject to the information and periodic reporting requirements of
the Securities Exchange Act of 1934 and, accordingly, will file
periodic reports, proxy statements and other information with the
Commission. Such periodic reports, proxy statements and other
information will be available for inspection and copying at the
Commission's public reference rooms, and the website of the
Commission referred to above.
Forward looking statements
You should not rely on forward-looking statements in this
prospectus. This prospectus contains forward-looking statements
that involve risks and uncertainties. We use words such as
anticipates", "believes", "plans", "expects", "future", "intends"
and similar expressions to identify these forward-looking
statements. Actual results could differ materially from those
anticipated in these forward-looking statements for many reasons.
Management's discussion and analysis or plan of operation.
Upon the completion of all or part of the sale of shares
contained in this offering, Paragon Polaris intends to proceed as
quickly as possible to do an in-depth feasibility study and if
and when that study proves the project to be feasible, hire one
or more sales representatives to present its service to potential
customers. Geography is an obstacle that must be dealt with.
The states of Idaho and Oregon are very large, making adequate
coverage by one salesperson virtually impossible. A minimum of
two representatives will be necessary. After opening accounts,
these representatives will be necessary to service existing
customers. Research has indicated that this servicing or
detailing of already established accounts results in better
reorders.
Estimated expenses for the next twelve months are as follows:
Amount
Feasibility study $10,000
Two sales persons, draw against commissions
@ $1000 per month $36,000
Administration $12,000
Employee benefits $16,000
Office rent $12,000
Office supplies, including furniture $10,000
Development stage costs, including recruiting
costs $ 1,000
Website maintenance $ 500
Contingency $ 8,850
Total first year expenses $ 107,250
If the proposed offering proceeds are not received, operations
would be scaled down. One sales person would be hired instead of
two; administration would be handled by an officer and director
at no cost. The same officer and director would supply office
space during the start-up process. Growth would be much slower
and Paragon Polaris would not be able to rent office space and
hire administrative help until sales volumes and gross profits
were large enough. If no funds are received from this offering,
management would be forced to decide whether or not to proceed
with the business and either delay starting or cancel the project
completely.
Description of property.
Paragon Polaris maintains a mailing address at the office of one
of its shareholders, but otherwise does not maintain an office.
We pay no rent and own no real estate.
Certain Relationships and Related Transactions
Prior to the date of this Registration statement Paragon Polaris
issued to ten individuals a total of 2,000,000 shares of Common
stock in consideration of acquiring the rights to manufacture and
market an oxygen-enhanced product for use in aquaculture, fish
and poultry farming and the bioremediation of waste ponds and
lagoons in the state of Pennsylvania. David R. Mortenson and
Associates acquired these rights from the inventors of the
product, N.W. Technologies Inc. under a distribution agreement.
In December, 1999 N.W. Technologies unilaterally canceled its
contract and distribution agreement with David R. Mortenson and
Associates. Mortenson and several of the concerns that have an
interest in the technology through distribution agreements with
Mortenson, have filed suit in Harris County court, Texas against
N.W. Technologies Inc, its officers and directors and several
other individuals and concerns involved with the cancellation and
withdrawal.
Paragon Polaris is not withdrawing from its agreement with
Mortenson for the distribution and manufacture of the oxygen-
enhanced products, nor has it any intention of doing so at the
present time. All obligations under that agreement have been
suspended until the lawsuit is resolved.
In order to avoid litigation with Paragon Polaris and to protect
our shareholders Mortenson granted a distribution license for an
Internet based vitamin and health supplement company. The
company, VitaMineralHerb.com, is located San Diego, California.
There was no charge for this distribution license for the states
of Idaho and Oregon.
Market for common equity and related stockholder matters.
Paragon Polaris is a development stage company that is still in
the beginning stages of implementing its business plan. No
market currently exists for the Common Stock. Upon completion of
all or part of the offering of common shares contained in this
prospectus, it is the intention of Paragon Polaris to apply for a
trading symbol and a listing to have its shares quoted on the OTC
Bulletin Board.
There can be no assurance that any part of this offering will be
subscribed to and if all or part of the offering is subscribed
to, that the request of Paragon Polaris to have the price of its
stock quoted on the OTC Bulletin Board will be granted. You
should take all of the above facts into consideration before
making a decision to purchase any amount of Paragon Polaris
stock.
Executive compensation
No officer or director of Paragon Polaris has received any
remuneration. Although there is no current plan in existence, it
is possible that Paragon Polaris will adopt a plan to pay or
accrue compensation to its officers and directors for services
related to the implementation of the business plan. Paragon
Polaris has no stock option, retirement, pension or profit-
sharing programs for the benefit of directors, officers or other
employees, but the Board of Directors may recommend adoption of
one or more such programs in the future.
PARAGON POLARIS STRATEGIES.COM INC.
(A DEVELOPMENT STAGE ENTERPRISE)
INTERIM FINANCIAL STATEMENTS
(PREPARED BY MANAGEMENT)
AS AT SEPTEMBER 30, 2000 AND DECEMBER 31, 1999
PARAGON POLARIS STRATEGIES.COM INC.
A DEVELOPMENT STAGE ENTERPRISE
BALANCE SHEETS
AS AT SEPTEMBER 30, 2000 AND DECEMBER 31, 1999
(PREPARED BY MANAGEMENT)
ASSETS
SEPTEMBER DECEMBER
30, 2000 31, 1999
UNAUDITED AUDITED
CURRENT ASSETS:
CASH $ 0 $0
TOTAL CURRENT ASSETS 0 0
OTHER ASSETS
LICENSE RIGHTS 0 0
TOTAL ASSETS 0 0
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
ACCOUNTS PAYABLE 293 1,200
TOTAL CURRENT LIABILITIES 293 1,200
STOCKHOLDERS' EQUITY:
Common stock, $0.001 par
Value; 100,000,000 shares
Authorized, and 2,600,000 (2,600,000)
Shares Issued and outstanding 2,600 2,500
ADDITIONAL PAID-IN CAPITAL 12,055 155
(DEFICIT ACCUMULATED DURING
THE DEVELOPMENT STAGE) (12,948) (1,855)
TOTAL STOCKHOLDERS' EQUITY 1,707 800
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 0 $ 0
PARAGON POLARIS STRATEGIES.COM INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND FOR THE PERIOD
MAY 28, 1999 (INCEPTION) TO DECEMBER, 31, 1999
(PREPARED BY MANAGEMENT)
SEPTEMBER DECEMBER
30, 2000 31,1999
UNAUDITED AUDITED
REVENUES: $ 0 $ 0
OPERATING EXPENSES:
TAXES AND LICENSES 0 320
OFFICE EXPENSES 93 130
LEGAL AND ACCOUNTING FEES 9,250 1,405
CONSULTING FEES 1,750 0
TOTAL OPERATING EXPENSES 11,093 1,855
NET (LOSS) FOR THE PERIOD (11,093) (1,855)
NET (LOSS) PER SHARE $ (0.00) $ (0.00)
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 2,600,000 2,500,000
PARAGON POLARIS STRATEGIES.COM INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDING SEPTEMBER 30, 2000 AND THE PERIOD
MAY 28, 1999 (INCEPTION) THROUGH DECEMBER 31, 2000
(PREPARED BY MANAGEMENT)
SEPTEMBER DECEMBER
Unaudited Audited
30,2000 31, 1999
UNAUDITED AUDITED
CASH FLOWS FROM (TO)
OPERATING ACTIVITIES:
NET INCOME (LOSS) $(11,093) $ (1,855)
NET INCREASE (DECREASE)
IN ACCOUNTS PAYABLE ( 907) 1,200
NET CASH (USED) BY OPERATING
ACTIVITIES (12,000) (655)
CASH FLOWS FROM (TO)
INVESTING ACTIVITIES:
PURCHASE OF LICENSE RIGHTS 0 (2,000)
CASH FLOWS FROM (TO)
FINANCING ACTIVITIES:
ISSUANCE OF COMMON STOCK 12,000 2,655
NET INCREASE (DECREASE) IN CASH 0 0
CASH, BEGINNING OF PERIOD 0 0
CASH, END OF PERIOD $ 0 $ 0
NOTES TO UNAUDITED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying financial statements have been prepared in
accordance with US Securities and Exchange Commission ("SEC")
requirements for interim financial statements. Therefore, they do
not include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements. The financial statements should be read in conjunction
with the year ended December 31, 1999 financial statements of
Paragon Polaris Stratagies.com Inc. ("Registrant") included in the
Form SB-2 filed with the SEC by the Registrant.
The results of operations for the interim period shown in this
report are not necessarily indicative of the results to be expected
for the full year. In the opinion of management, the information
contained herein reflects all adjustments necessary to make the
results of operations for the interim periods a fair statement of
such operation. All such adjustments are of a normal recurring
nature.
FINANCIAL STATEMENTS.
PARAGON POLARIS STRATEGIES.COM INC.
(A Development Stage Enterprise)
AUDIT REPORT
December 31, 1999
Janet Loss, C.P.A., P.C.
Certified Public Accountant
1777 S. Harrison Street, Suite 2100
Denver, Colorado 80210
PARAGON POLARIS STRATEGIES.COM INC.
(A Development Stage Enterprise)
FINANCIAL STATEMENTS
INDEX TO FINANCIAL STATEMENTS
TABLE OF CONTENTS
ITEM PAGE
Report of Certified Public Accountant.................. 36
Balance Sheet, December 31, 1999 ......................... 37
Statement of Operations, for the
Period April 2, 1999 (Inception)
Through December 31, 1999................................. 38
Statement of Stockholders' Equity
(Deficit), April 2, 1999 (Inception)
Through December 31, 1999................................. 39
Statement of Cash Flows for the
Period From April 2, 1999 (Inception)
Through December 31, 1999 ................................ 40
Notes to Financial Statements............................ 41& 42
Janet Loss, C.P.A., P.C.
Certified Public Accountant
1777 S. Harrison Street, Suite 2100
Denver, Colorado 80210
(303) 782-0878
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Paragon Polaris Strategies.com Inc.
404 Scott Point Drive
Salt Spring Island, British Columbia V8K 2R2
Canada
I have audited the accompanying Balance Sheet of Paragon Polaris
Strategies.com Inc. (A Development Stage Enterprise) as of December
31, 1999 and the Statements of Operations, Stockholders' Equity, and
Cash Flows for the period May 27, 1999 (Inception) through December
31, 1999. These financial statements are the responsibility of the
Company's management. My responsibility is to express an opinion on
these financial statements based on my audits.
My examination was made in accordance with generally accepted
auditing standards. Those standards require that I plan and perform
the audits to obtain reasonable assurance as to 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. I believe that my audit provides a
reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Paragon
Polaris Strategies.com Inc. as of December 31, 1999, and the results
of its operations and changes in its cash flows for the period from
May 27, 1999 (Inception) through December 31, 1999, in conformity
with generally accepted accounting principles.
Janet Loss, C.P.A., P.C.
December 2, 2000
F-1
PARAGON POLARIS STRATEGIES.COM INC.
(A Development Stage Enterprise)
BALANCE SHEET
December 31, 1999
ASSETS
CURRENT ASSETS:
License Rights $0
TOTAL ASSETS $0
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts Payable $1,200
STOCKHOLDERS' EQUITY:
Common stock, $0.001 par
Value; 25,000,000 shares
Authorized, and 2,500,000 shares
Issued and outstanding $2,500
Additional Paid-In Capital 155
Deemed Dividend re: Purchase of
License Rights (2,000)
(Deficit) 4,655)
Total Stockholders' Equity (Deficit) $(1,200)
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 0
The accompanying notes are an integral part of the financial
statements.
F-2
PARAGON POLARIS STRATEGIES.COM Inc.
(A Development Stage Enterprise)
STATEMENT OF OPERATIONS
For the Period May 27, 1999 (Inception)
Through December 31, 1999
REVENUES: $ 0
OPERATING EXPENSES:
Accounting and Legal Fees $ 1,405
Office Expenses 130
Other Fees 320
TOTAL OPERATING EXPENSES 1,855
NET (LOSS) $ (1,855)
NET (LOSS) PER SHARE $ (0.0007)
Weighted Average Number of
Common Shares Outstanding 2,500,000
The accompanying notes are an integral part of the financial
statements.
F-3
PARAGON POLARIS STRATEGIES.COM INC.
(a Development Stage Enterprise)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
For the Period May 27, 1999 through December 31, 1999
(Deficit)
Accumulated
Common Common Additional Total
Stock Stock During Stockholders'
Number of Amount Paid- in the
Shares Capital Development Equity
Stage
May 28, 1999
Issuance of $500 $155 $0 $655
Common Stock for 500000
Cash
Issuance of Common
Stock 2000000 2,000 0 0 2,000
For License Rights
Deficit for the
Period From
May 27, 1999 0 0 0 (1,855) (1,855)
(Inception)
Through December 31,
1999
Balance December 2500000 $2500 $155 $(1,855) 800
31,1999
The accompanying notes are an integral part of the financial
statements.
F-4
PARAGON POLARIS STRATEGIES.COM INC.
(A Development Stage Enterprise)
STATEMENT OF CASH FLOWS
For the Period May 28, 1999 (Inception)
Through December 31, 1999
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Income (Loss) $(1,855)
Change in Assets and Liabilities:
Increase in Accounts Payable 1,200
Net Cash (Used) by Operating Activities (655)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of License Rights (2,000)
CASH FLOWS FROM (TO) FINANCING ACTIVITIES:
Issuance of Common Stocks 2,655
INCREASE (DECREASE) IN CASH 0
CASH, BEGINNING OF PERIOD 0
CASH, END OF PERIOD $ 0
The accompanying notes are an integral part of the financial
statements.
F-5
PARAGON POLARIS STRATEGIES.COM INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
NOTE I - ORGANIZATION AND HISTORY
The Company is a Nevada Corporation and the Company has been
in the development stage since its formation on May 28,
1999.
The Company's only activities have been organizational,
directed at acquiring its principle assets, raising its
initial capital and developing its business plan.
NOTE II - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
DEVELOPMENT STAGE ACTIVITIES
The Company has been in the development stage since
inception.
ACCOUNTING METHOD
The Company records income and expenses on the accrual
method.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents includes cash on hand, cash on
deposit, and highly liquid investments with maturities
generally of three months or less. At December 31, 1999,
there were no cash equivalents.
YEAR END
The Company has elected to have a fiscal year ended December
31st.
USE OF ESTIMATES
The preparation of financial statements in accordance with
generally accepted accounting principles requires management
to make estimates and assumptions that effect the reported
amounts of assets and liabilities at the date of financial
statements, as well as revenues and expenses reported for
the periods presented. The Company regularly assesses these
estimates and, while actual results may differ management
believes that the estimates are reasonable.
NOTE III - RELATED PARTY TRANACTIONS
Dorothy Mortenson is the wife of David R. Mortenson. She is
the original incorporator of the Company and served as
Corporate Secretary until January 17, 2000 when her shares
were purchased by present management. David R. Mortenson is
a principal in both David R. Mortenson and Associates and
VitaMineralHerb.com.
The Company has entered into an agreement made effective
July 1, 1999 with David R. Mortenson & Associates (Grantor)
to receive the rights to distribute the water treatment
products developed by NW Technologies, Inc. for the State of
Pennsylvania. Minimum purchase requirements were $125,000
the first year and $175,000 the second year.
The water treatment license agreement was for a period of
three years with a provision for additional three year
renewals if the Company was in compliance with the license
agreement.
On July 6, 1999 the Company filed a Form D pursuant to
section 3(b) of the Securities Act of 1933 and Rule 504
promulgated thereunder with the Securities and Exchange
Commission registering the issuance of 200,000 shares of
common stock to each of the ten general partners of David R.
Mortenson and Associates, a Texas general Partnership. The
shares were issued at a price of $0.001 per share being the
par value per share for a total of $2,000 in exchange for
the water remediation license. The water remediation license
is recorded a cost of $0, being the original cost of the
license to David R. Mortenson and Associates. The
difference between the issue price of the shares and the
cost of the license is recorded as a deemed dividend.
The agreement with David R. Mortenson & Associates was
entered into by previous management.
NOTE IV - SUBSEQUENT EVENTS
In December, 1999 N.W. Technologies, Inc. unilaterally
cancelled its contract with David Mortenson & Associates.
Early in the year 2000 David Mortenson & Associates laid
suit against N.W. Technologies, Inc. in Harris County Court,
Texas.
In the opinion of management, the Company has no direct or
indirect interest in the Texas lawsuit
In a letter dated January 5, 2000 David Mortenson &
Associates suspended all present and future payments under
the License Agreement until their dispute with N.W.
Technologies is resolved.
Due to the dispute regarding the water remediation license,
David R. Mortenson and Associates gave an additional license
to the Company on January 20, 2000. The license is to
distribute vitamins, minerals, herbs and other health
products and supplements via the Internet in the states of
Idaho and Oregon. The license calls for a 10% add-on for
all products purchased and an annual $500 website
maintenance fee. The effective date of the License
Agreement was January 3, 2000. The license is for an
initial three years from the effective date and is
automatically renewable unless either party to the license
agreement gives ninety days written notice of non-renewal
prior to expiration date. No amounts have been recorded in
these financial statements regarding the granting of the
license.
Dorothy Mortenson is the wife of David R. Mortenson. She is
an original incorporator of the Company and served as
Corporate Secretary until January 17, 2000 when her shares
were purchased by present management. David R. Mortenson is
a principal in both David Mortenson & Associates and
VitaMineralHerb.com. Neither Mr. or Mrs. Mortenson own or
have owned any of the Company's securities since January 17,
2000. Outside of his association with VitaMineralHerb.com,
Mr. Mortenson has no connection with Paragon Polaris.
To date we have spent a total of $ 12,843, including $8,500
legal and preparation fees for the registration statement;
$2,500 in accounting fees; $1,500 in Edgar filing fees and
$ 343 miscellaneous office expenses. These costs are all
expensed as they are incurred.
Changes in and Disagreements with Accountants on Accounting
and Financial disclosure.
There have been no changes in and/or disagreements with
Janet Loss, C.P.A., P.C. on accounting and financial
disclosure matters.
PART II - Information Not Required in Prospectus
Indemnification of directors and officers.
Pursuant to Nevada law, a corporation may indemnify a person
who is a party or threatened to be made a party to an
action, suit or proceeding by reason of the fact that he or
she is an officer, director, employee or agent of the
corporation, against such person's costs and expenses
incurred in connection with such action so long as he/she
has acted in good faith and in a manner which he/she
reasonably believed to be in, or not opposed to, the best
interests of the corporation, and, in the case of criminal
actions, had no reasonable cause to believe his or her
conduct was unlawful. Nevada law requires a corporation to
indemnify any such person who is successful on the merits or
defense of such action against costs and expenses actually
and reasonably incurred in connection with the action.
The bylaws of Paragon Polaris filed as Exhibit 3.2, provide
that Paragon Polaris will indemnify its officers and
directors for costs and expenses incurred in connection with
the defense of actions, suits, or proceedings against them
on account of their being or having been directors or
officers of Paragon Polaris, absent a finding of negligence
or misconduct in office. The Bylaws also permit Paragon
Polaris to maintain insurance on behalf of its officers,
directors, employees and agents against any liability
asserted against and incurred by that person whether or not
Paragon Polaris has the power to indemnify such person
against liability for any of those acts.
Other expenses of issuance and distribution.
Expenses incurred or (expected) relating to this
Registration statement and distribution are as follows:
Legal fees $30,000.00
Accounting 10,000.00
(Edgar filing and Printing) 5,000.00
TOTAL $45,000.00
To date Paragon Polaris has spent a total of $12,843 for
office expenses and legal and accounting fees.
Recent sales of unregistered securities.
Set forth below is information regarding the issuance and
sales of Paragon Polaris securities without registration
since its formation. No such sales involved the use of an
underwriter and no commissions were paid in connection with
the sale of any securities.
On May 28, 1999, Paragon Polaris issued 500,000 shares of
common stock to J. P. Beehner and Dorothy Mortenson, our
original officers and directors, as founders' shares in
return for the time, effort and expenditures to organize and
form the corporation. These shares were issued pursuant to
Section 4(2) of the Securities Act of 1933. On June 18,
1999 Paragon Polaris issued 200,000 shares of common stock
each to ten individuals: David R. Mortenson, Roy Donovan
Hinton, Jr., Marie M. Charles, George R. Quan, Marsha Quan,
Darren Quan, C.E. Kaiser, James R. Collins, Jock R. Collins
and Laurent R. Barbadaux - for a total of 2,000,000 shares
in return for the water treatment rights for the state of
Pennsylvania and the development of the business plan.
These shares were issued pursuant to Section 4(2) of the
Securities Act of 1933. All of the shares described in this
paragraph were issued to a small number of sophisticated or
accredited investors who were active in our business and had
thorough knowledge concerning us. All issued shares bear a
restrictive legend and were sold pursuant to a letter of
intent.
On January 17, 2000 the 500,000 founders' shares of common
stock were purchased by our present officers and directors.
This purchase was made in reliance upon Section 4(1) of the
Securities Act of 1933 in that the sale was made to our
present officers and directors who are sophisticated and
accredited investors and who had complete access to all
information concerning us. All issued shares bear a
restrictive legend and were sold pursuant to a letter of
intent.
On May 15, 2000 Paragon Polaris issued 100,000 shares of
common stock for cash at a price of $0.12 per share for an
aggregate of $12,000 to Sandringham Investments Limited.
These shares were issued pursuant to Section 4(2) of the
Securities Act of 1933. All of the shares described in this
paragraph were issued to a small number of sophisticated or
accredited investors who were active in our business and had
thorough knowledge concerning us. All issued shares bear a
restrictive legend and were sold pursuant to a letter of
intent. In addition, these shares were also sold in
reliance upon the exemption in Regulation S, since the
investors are all residents of Canada who purchased their
securities subject to the restrictions of Rule 144.
Exhibits.
The following exhibits are filed as part of this
Registration statement;
Exhibit
Number Description
3.1 Articles of Incorporation*
3.2 Bylaws*
5.1 Opinion re: Legality
10.1 License Agreement*
10.2 Assignment of License Agreement*
10.3 License Agreement-Water*
23.1 Consent of Independent Auditors
23.2 Consent of Counsel (See Exhibit 5.1)
* Previously supplied.
Undertakings.
The undersigned registrant hereby undertakes:
1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this
Registration statement:
(a) To include any Prospectus required by section
10(a)(3) of the Securities Act;
(b) To reflect in the Prospectus any facts or events
arising after the effective date of the
Registration Statement (or the most recent post-
effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in
the information set forth in the Registration
Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities
offered (if the total dollar value of securities
offered would not exceed that which was registered)
and any deviation from the low or high end of the
estimated maximum offering range may be reflected
in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than
20% change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(c) To include any additional or changed material
information to the plan of distribution.
2) For determining liability under the Securities Act,
treat each post-effective amendment as a new Registration
Statement of the securities offered and the offering of
the securities at that time to be the initial bona fide
offering.
3) File a post-effective amendment to remove
from registration any of the securities being registered,
which remain unsold at the end of the offering.
4) For determining any liability under the Securities Act,
to treat the information omitted from the form of Prospectus
filed as part of this Registration Statement in reliance
upon Rule 430A and contained in a form of Prospectus filed
by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act as part of this Registration
statement as of the time the Commission declared it
effective.
5) For determining any liability under the Securities Act
to treat each post-effective amendment that contains a
form of Prospectus as a new Registration Statement for
the securities offered and the offering of the securities
at that time as the initial bona fide Offering of those
Securities.
Signatures
In accordance with the requirements of the Securities Act of
1933, (Deletion) 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, (deletion) in the City of Vancouver, Province
of British Columbia Canada.
On December 12, 2000
(Registrant) Paragon Polaris Strategies.com Inc.
By: /S/Robert Foo By: /S/ Samuel Lau
Robert Foo, President Samuel Lau, Secretary
Treasurer
Date: December 12, 2000 Date: December 12, 2000
By: /S/ Robert Foo
President and Director
December 12, 2000
By:/S/Samuel Lau
Secretary/Treasurer, CFO and Director
December 12, 2000
EXHIBIT 5.1
OPINION AS TO LEGALITY
ARTHUR J. FROST, LTD.
Arthur J. Frost, Esq.
7549 W. Heatherbrae Drive
Phoenix, Arizona 85033
(623) 849-2050
(623) 873-1799 Facsimile
December 6, 2000
Paragon Polaris Strategies.com Inc.
404 Scott Point Drive
Salt Spring Island, BC V8K 2R2
Canada
Re: Paragon Polaris Strategies.com Inc. registration
statement on Form SB2
Ladies and Gentlemen:
We have acted as counsel for Paragon Polaris
Strategies.com Inc., a Nevada corporation (the "Company"),
in connection with the preparation of the registration
statement on Form SB2 (the "registration statement") filed
with the Securities and Exchange Commission (the
"Commission") pursuant to the Securities Act of 1933 (the
"Act"), relating to the public offering (the "offering") or
up to one million (1,000,000) shares (the "Shares") of; the
Company's common stock, $0.001 par value (the "Common
Stock") by the issuer through the means of a self-
underwriting. This opinion is being furnished pursuant to
Item 601(b)(5) of Regulation S-B.
In rendering the opinions set forth below, we have
reviewed (a) the registration statement and exhibits
thereto; (b) the Company's Articles of Incorporation; (c)
the Company's Bylaws; (d) certain records of the Company's
corporate proceedings as reflected in its minute books; and
(e) such statutes, records and other documents as we have
deemed relevant. In our examination, we have assumed the
genuineness of all signatures, the authenticity of all
documents submitted to us as originals and conformity with
the originals of all documents submitted to us as copies
thereof. In addition, we have made other examinations of
law and fact as we have deemed relevant in order to form a
basis for the opinion hereinafter expressed.
Based on the foregoing, we are of the opinion that all
issued shares are validly issued, fully paid and non-
assessable pursuant to the corporate law of the State of
Nevada. (Chapter 78A of the Nevada Revised Statutes)
We are also of the opinion that if and when the
registration statement should become effective, all shares
sold to the public through the use of the registration
statement and the prospectus contained therein, will be
validly issued, fully paid and non-assessable pursuant to
the corporate law of the State of Nevada. (Chapter 78A of
the Nevada Revised Statutes)
We hereby consent to the use of this opinion as an
Exhibit to the registration statement and to all references
to this Firm under the caption "Interests of Named Experts
and Counsel" in the registration statement.
Very Truly Yours,
Arthur J. Frost Ltd.
/S/ Arthur J. Frost
Arthur J. Frost
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITOR
Janet Loss, C.P.A., P.C.
Certified Public Accountant
1780 South Bellaire
Suite 500
Denver, CO 80222
The Board of Directors
PARAGON POLARIS STRATEGIES.COM INC.
404 Scott Point Drive
Salt Spring Island, BC V8K 2R2
Canada
Dear Sirs:
This letter will authorize you to include the Audit of your
company dated December 31, 1999 and the Audit Report dated
October 20, 2000 in the Registration statement currently
under review with the Securities and Exchange Commission.
Yours Truly,
/S/ Janet Loss, C.P.A., P.C.
Janet Loss, C.P.A., P.C.
October 24, 2000