SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
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[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended July 31, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from______________ to______________.
Commission File Number: ______________
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Paramount Services Corp.
formerly Internet International Communications Ltd.
(Exact name of small business issuer as specified in its charter)
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Delaware 98-0204758
(Jurisdiction of Incorporation) (I.R.S. Employer Identification No.)
Suite 1650, Waterfront Centre, V6C 3L6
200 Burrard Street,
Vancouver, British Columbia
Canada
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (604) 689-3355
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter period that the registrant was required to file such reports)
and (2) has been subject to such filing requirements for the past 90 days.) Yes
[ ] No [x]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 2,587,778 shares of Common Stock
<PAGE>
PART I: FINANCIAL INFORMATION
To simplify the language in this document, Paramount Services Corp. is referred
to as "We" or the "Company".
Item 1. Financial Statements
Page 2
<PAGE>
Paramount Services Corp.
(a development stage enterprise)
Financial Statements
July 31, 1999 and July 31, 1998
(Unaudited - See Accountants' Compilation Report)
Page 3
<PAGE>
ACCOUNTANTS' COMPILATION REPORT
We have compiled the accompanying balance sheet of Paramount Services Corp. as
of July 31, 1999 and the statements of operations and cash flows for the
three-month periods ended July 31, 1999 and July 31, 1998 in accordance with
Statements on Standards for Accounting and Review services issued by the
American Institute of Certified Public Accountants.
A compilation is limited to presenting in the form of financial statements
information that is the representation of management. We have not audited or
reviewed the accompanying financial statements and accordingly, do not express
an opinion or any form of assurance on them.
/s/ N.I. Cameron Inc.
VANCOUVER, B.C. CHARTERED ACCOUNTANTS
September 3, 1999
Page 4
<PAGE>
<TABLE>
<CAPTION>
Paramount Services Corp.
(a development stage enterprise)
Balance Sheet
as at July 31, 1999
(Unaudited - See Accountants' Compilation Report)
ASSETS
<S> <C>
CURRENT
Cash $ 302
==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Due to related party $ 13,790
----------
STOCKHOLDERS' DEFICIT
Share capital
Authorized:
30,000,000 common shares with a par value of $0.0001 each
5,000,000 preferred shares with a par value of $0.0001 each
Issued and outstanding:
2,587,778 common shares 259
Additional paid-in capital 4,751
Deficit accumulated in the development stage (18,498)
----------
Total stockholders' deficit (13,488)
----------
Total Liabilities and stockholders' deficit $ 302
==========
</TABLE>
The accompanying notes are an integral part of these financial statement.
Page 5
<PAGE>
<TABLE>
<CAPTION>
Paramount Services Corp.
(a development stage enterprise)
Statements of Operations
For the Three-month Periods Ended July 31, 1999 and July 31, 1998
(Unaudited - See Accountants' Compilation Report)
Three months Period from Three months Period from
Ended December 18, 1997 Ended December 18, 1997
July 31, 1999 (date of incorporation) July 31, 1998 (date of incorporation)
to July 31, 1999 to July 31, 1998
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Expenses
Professional fees $ 1,836 $ 16,656 $ - $ 6,320
Administration and 1,786 1,786 - -
filing fees
Bank charges 56 56 - -
-------------------------------------------------------------------------------------------------
Net Loss for the $ (3,678) $ (18,498) - $ (6,320)
Period
=================================================================================================
Loss per share
Basic and diluted $ (0.001) $ -
========================== ==================
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 6
<PAGE>
<TABLE>
<CAPTION>
Paramount Services Corp.
(a development stage enterprise)
Statements of Cash Flows
For the Three-month Periods Ended July 31, 1999 and July 31, 1998
(Unaudited - See Accountants' Compilation Report)
Three months Period from Three months Period from
Ended December 18, 1997 Ended December 18, 1997
July 31, 1999 (date of incorporation) July 31, 1998 (date of incorporation)
to July 31, 1999 to July 31, 1998
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cash flows used in
operating activities
Net loss $ (3,678) $ (18,498) $ - $ (6,320)
Changes in operating
assets
and liabilities
Accrued liabilities (3,500) - - -
------------------------------------------------------------------------------------------------------
Net cash used in
operating activities (7,178) (18,498) - (6,320)
------------------------------------------------------------------------------------------------------
Cash flows provided by
financing activities - 5,010 - 5,010
Proceeds from capital
contributions
Due to related party 7,480 13,790 - 1,310
------------------------------------------------------------------------------------------------------
Net cash provided by
financing activities 7,480 18,800 - 6,320
------------------------------------------------------------------------------------------------------
Net change in cash during
the period 302 302 - -
Cash at beginning of
period - - - -
------------------------------------------------------------------------------------------------------
Cash at end of period $ 302 $ 302 $ - $ -
======================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 7
<PAGE>
Paramount Services Corp.
(a development stage enterprise)
Notes to the Financial Statements
July 31, 1999
(Unaudited - See Accountants' Compilation Report)
1. FORMATION AND BUSINESS OF THE COMPANY
Paramount Services Corp. (the "Company") was incorporated in Delaware on
December 18, 1997 under the name of Internet International Communications
Ltd. pursuant to the laws of Delaware.
Prior to the merger (as defined below), Paramount Services Corp.
("Paramount") and Internetcom, Inc. ("Internetcom"), a Colorado company,
were companies under common control.
On January 8, 1998, Paramount and Internetcom merged through an exchange of
shares.
The merger has been accounted for in a manner similar to a pooling of
interests and accordingly the financial statements of the Company include
the results of Paramount and Internetcom since their inception, which in
the case of Paramount was December 18, 1997 and Internetcom was December
10, 1997. The share capital of the Company has been presented giving effect
to the exchange of shares from incorporation.
The Company is a development stage company and has had no activity other
than issuing shares and preparing an initial business plan. Its sole
purpose at this time is to locate and consummate a merger or acquisition
with an as yet unidentified private entity.
2. SHARE CAPITAL
Holders of the common stock are entitled to one vote per share and to share
equally in any dividends declared and distributions in liquidation.
On May 7, 1999, the Company consolidated its share capital by way of a
reverse stock split on the basis on one new common share for each two old
common shares. All outstanding shares in these financial statements have
been retroactively adjusted to reflect this share consolidation.
3. RELATED PARTY TRANSACTIONS
Since incorporation, a company controlled by the director of the Company
has provided administrative services and facilities to the Company for nil
consideration and pays expenses on behalf of the Company. The amount due to
this company is without interest or stated terms of repayment. It is
anticipated the Company will continue to receive non-interest bearing
advances from this company to pay for future expenses as incurred.
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<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operations
We have never had operations. In the next twelve months, we plan to
seek out business opportunity candidates. To date, we have undertaken no efforts
to seek out a business opportunity for the Company. We believe that this plan of
operations will be conducted through the efforts of our current management and
will not require any additional funds or personnel. We anticipate that business
opportunities will be available to us through the contacts of our management.
Other than through the contacts of our management, we do not have other plans to
locate business opportunity candidates. We anticipate that the investigation of
specific business opportunities and the negotiation, drafting and execution of
relevant agreements, disclosure documents and other instruments will be done by
our management or under their direction. Management will investigate, to the
extent they believe reasonable, such potential business opportunities. Due to
management's limited experience in business analysis, they may not discover or
adequately evaluate adverse facts about the business opportunity to be acquired.
Since we will have no funds available to us in our search for business
opportunities, we will not be able to expend significant funds on a complete
investigation of a business opportunity. We anticipate that we will incur
nominal expenses in the implementation of our business plan described herein.
Because we have no capital with which to pay these expenses, our present
management will pay any charges with their personal funds, as interest free
demand loans without specific repayment terms to the Company. The only
opportunity that we will have to repay these loans is from a prospective
business opportunity. Our management has agreed that the repayment of any loans
made on our behalf will not impede or be made conditional in any manner, to
consummation of a proposed transaction.
Management, however, has no commitment to loan funds to the Company.
Such loans will be made at the sole discretion of management. In the event
management ceases to provide loans to the Company, we will be unable to continue
our search for business opportunity candidates. The Company has not and does not
plan to consider alternate sources of funding.
We have no particular business opportunity in mind and have not entered
into any negotiations regarding any business opportunity. None of our
management, affiliates or any promoters have engaged in any preliminary contact
or discussions with any representative of any other company regarding the
possibility of a business opportunity between us and such other company as of
the date of this registration statement.
We will not restrict our search to any specific business, industry, or
geographical location, and we may participate in a business opportunity of
virtually any kind or nature. This discussion of the proposed business is
purposefully general and is not meant to be restrictive of our virtually
unlimited discretion to search for and enter into potential business
opportunities. We anticipate that we may be able to participate in only one
potential business opportunity because we have no assets and limited financial
resources.
Page 9
<PAGE>
To date, we have not developed any criteria for the selection of
business opportunities. We do not plan to develop specific criteria for the
selection of business opportunities as this would have the effect of limiting
the discretion of our management in selecting a business opportunity. We will be
relying on the judgment of our Board of Directors to ensure that a business
opportunity is fair, reasonable and in the best interest of the Company.
We will seek to expand through business opportunities entailing risks
which are not currently identified, and which you will not have a basis to
evaluate. We may seek to expand our operations by acquiring companies in
businesses that we believe will complement or enhance our company. We cannot
assure you that we will be able to ultimately effect any acquisition,
successfully integrate any acquired business in our operations or otherwise
successfully develop our operations. We have not established any minimum
criteria for any acquisition and our management may have complete discretion in
determining the terms of any acquisition. Consequently, there is no basis for
you to evaluate the specific merits or risks of any potential acquisition that
we may undertake. We anticipate that our management will investigate, to the
extent believed necessary, the business opportunity.
Due to general economic conditions, rapid technological advances being
made in some industries and shortages of available capital, our management
believes that there are numerous firms seeking the perceived benefits of a fully
reporting public company. Such perceived benefits may include facilitating or
improving the terms on which additional equity financing may be sought,
providing liquidity for incentive stock options or similar benefits to key
employees, providing liquidity (subject to restrictions of applicable statutes)
for all shareholders and other factors.
Potentially, available business opportunities may occur in many
different industries and at various stages of development, all of which make the
task of comparative investigation and analysis of such business opportunities
extremely difficult and complex. We do not have and will not have capital to
provide the owners of business opportunities with any significant cash or other
assets. However, we believe we can offer owners of acquisition candidates the
opportunity to acquire a controlling ownership interest in a publicly registered
company without incurring the cost and time required to become a fully reporting
company. The owners of the business opportunities will, however, incur
significant legal and accounting costs in connection with acquisition of a
business opportunity, including the costs of preparing Form 8-Ks, 10-Ks or
10-KSBs, agreements and related reports and documents. The Exchange Act
specifically requires that any merger or acquisition candidate comply with all
applicable reporting requirements, which include providing audited financial
statements to be included within the numerous filings relevant to complying with
the Exchange Act. Nevertheless, our management has not conducted market research
and is not aware of statistical data which would support the perceived benefits
for the owners of a business opportunity.
We believe that there is a demand by non-public corporations for shell
corporations that have a public distribution of securities, such as our Company.
We believe that demand for shells has increased dramatically since the
Securities and Exchange Commission imposed burdensome requirements on "blank
Page 10
<PAGE>
check" companies pursuant to Regulation 419 of the Securities Act of 1933 (the
"Act"). The foregoing regulation has substantially decreased the number of
"blank check" offerings filed with the Commission and, as a result, has
stimulated an increased demand for "shell" corporations. We have made the
foregoing assumption, but there is no assurance that the same is accurate or
correct and accordingly, no assurance can be made that we will be successful in
locating a business opportunity.
Prior to making a decision to recommend a business opportunity, we plan
to request that we be provided with written materials regarding the business
opportunity containing such items as a description of products, services and
company history; management resumes; financial information; available
projections with related assumptions upon which they are based; evidence of
existing patents, trademarks or services marks or rights thereto; present and
proposed forms of compensation to management; a description of transactions
between the prospective entity and its affiliates during relevant periods; a
description of present and required facilities; an analysis of risk and
competitive conditions; and, other information deemed relevant.
Upon the consummation of a transaction, we anticipate that our present
management and shareholders will no longer be in control of the Company. In
addition, our director may, as part of the terms of the business opportunity,
resign and be replaced by new directors without a vote of our shareholders.
We do not plan to raise any capital at the present time, by private
placement, public offerings, pursuant to Regulation S promulgated under the Act,
as amended, or by any means whatsoever. Further, we have no plans, proposals,
arrangements or understandings with respect to the sale or issuance of
additional securities prior to the location of a business opportunity.
We anticipate that any securities issued in any such business
opportunity would be issued in reliance upon exemptions from registration under
applicable federal and state securities laws. In some circumstances, however, as
a negotiated element of our transaction, we may agree to register all or a part
of such securities immediately after the transaction is consummated or at
specified times thereafter. If such registration occurs, of which there can be
no assurance, it will be undertaken by the surviving entity after we have
successfully consummated a business opportunity, and we are no longer considered
a "shell" company. Until such time as this occurs, we will not attempt to
register any additional securities. The issuance of a substantial amount of
additional securities and their potential sale into any trading market which may
develop for our securities, may have a depressive effect on the value of our
securities in the future, if such a market develops, of which there is no
assurance. The completion of any business opportunity may result in a
significant issuance of shares and substantial dilution to our present
stockholders.
We do not plan to make any changes in the number of our employees.
During the quarter ended July 31, 1999 we incurred general and
administrative expenses of $3,678, all of which were related to preparation of
our audited financial statements for the year ended April 30, 1999 and the
filing of our Form 10-SB with the Securities and Exchange Commission. Operating
capital to pay for these expenses were funded by advances from Century Capital
Management Ltd., a company controlled by our president. As at July 31, 1999 we
were indebted to Century Capital Management Ltd. For a total of $13,790.
Page 11
<PAGE>
PART II: OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
On September 3, 1999 we mailed a Notice of Special Meeting of
Stockholders in respect of a meeting to be held on September 14, 1999 at 9:00 am
to consider and act upon a proposal to reverse split our outstanding common
stock such that each twenty-three shares of our issued and outstanding common
stock will be automatically converted into one share of common stock. We will
not issue any fractional shares as a result of the reverse stock split to any
shareholders owning (prior to the reverse stock split) less than twenty-three
shares. Any stockholder owning less than one full share after the reverse stock
split will be paid in cash for his or her fractional share. The effect of the
reverse stock split would be to eliminate 262 shareholders (owning approximately
979 shares) at an estimated cost of approximately $200. We feel it would be in
the best interest of the Company to eliminate shareholders who own less than 23
shares of common stock and we do not feel that the elimination of 262
shareholders of record will have any adverse impact since the value of the
shares held by the shareholders owning less than twenty-three shares is so small
that the sale of such shares (after taking into account brokerage commissions
and stock transfer fees) would not be practical. After the adoption of the
reverse stock split described above, the Company will have approximately 112,450
issued and outstanding shares of common stock.
Following the 9:00 am meeting we will hold a second meeting at 1:00 pm
at which shareholders will be asked to consider a proposal to forward split each
outstanding share of the Company's common stock such that each issued and
outstanding share (after giving effect to the reverse stock split) would be
automatically converted into twenty shares of common stock.
Item 5. Other Information
We are aware of the issues associated with the programming code in
existing computer systems as the year 2000 approaches ("Y2K problem"). The Y2K
problem is the result of computer programs being written using two digits rather
that four to define the applicable year. As a result, computer programs that
have time sensitive software may recognize a date using "00" to designate the
year as 1900 rather than 2000. This could result in systems failure or
miscalculation causing disruption of operations. We do not currently have any
business operations and, as such, do not directly face any Y2K compliance
issues. We do not and may not know the Y2K compliance status of any potential
business opportunities, but we believe that there will be no material adverse
impact upon us if a business opportunity is not Y2K compliant. It is not
possible to be certain that all aspects of the Y2K problem affecting us,
including those related to the efforts of any future customers, suppliers, or
other third parties, will be fully resolved.
Page 12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Form 10-QSB Report for the Quarter ended July 31, 1999, has been signed
below by the following person on behalf of the Registrant and in the capacity
and on the date indicated.
September 10, 1999
Paramount Services Corp.
A DELAWARE CORPORATION
/s/Andrew Hromyk
----------------
By: Andrew Hromyk
Title: President
Date: 9/10/99
Page 13
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> Apr-30-1999
<PERIOD-END> Jul-31-1999
<CASH> $302
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> $302
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> $13,790
<BONDS> 0
0
0
<COMMON> $5,010
<OTHER-SE> ($18,498)
<TOTAL-LIABILITY-AND-EQUITY> $302
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> $3,678
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> $56
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-BASIC> (0.001)
<EPS-DILUTED> (0.001)
</TABLE>
