SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
April 17, 2000
Date of Report
(Date of Earliest Event Reported)
PARA MAS INTERNET, INC.
(Exact Name of Registrant as Specified in its Charter)
1800 Century Park East, Suite 600
Los Angeles, California 90067
(Address of principal executive offices)
310/229-5722
Registrant's telephone number
Nevada 59-3383240
(State of Incorporation) (IRS Employer Identification No.)
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
(a) Pursuant to an Agreement and Plan of Reorganization
(the "Agreement") dated as of April 17, 2000 between Lapitos
Acquisition Corporation ("Lapitos"), a Delaware corporation, and
Para Mas Internet, Inc., a Nevada corporation, all the
outstanding shares of common stock of Lapitos Acquisition
Corporation were exchanged for 1,000 shares of common stock of
Para Mas Internet, Inc. ("Para Mas" or the "Company") in a
transaction in which Para Mas was the surviving company.
The Agreement was adopted by the unanimous consent of the
Board of Directors of Lapitos and approved by the unanimous
consent of the shareholders of Lapitos on April 17, 2000. The
Agreement was adopted by the unanimous consent of the Board
of Directors of Para Mas and by the consent of a majority of the
shareholders of Para Mas on April 17, 2000.
Prior to the reorganization, Lapitos had 5,000,000 shares of common
stock outstanding which shares were exchanged for 1,000 shares of
common stock of Para Mas. By virtue of the merger, Para Mas
acquired 100% of the issued and outstanding common stock of Lapitos.
Prior to the effectiveness of the Agreement, Para Mas had
an aggregate of 44,127,570 shares of common stock issued and
outstanding, and 60,000 shares of Series B preferred stock
outstanding, $.001 par value.
Holders of the Series B Preferred Shares are entitled to
receive cumulative cash dividends at the annual rate of 7% per
annum, or $.07 per share, payable quarterly. The dividends may be
payable in cash or through a dividend of additional shares of
Preferred Shares. The Company paid a 4,200 Series B Preferred
Stock dividend to the holders of the Preferred Shares during the
year ended June 30, 1999.
The Series B Preferred Shares rank senior to the common
stock. The Preferred Shares have a liquidation preference of $1.00
per share plus any and all declared and unpaid dividends.
The Series B Preferred Shares are convertible, in whole or
in part , at the option of the holders thereof, into shares of
common stock at amount equal to the Company's average closing
bid price of the common stock for thirty days immediately
preceding the conversion divided by the liquidation preference of
$1.00 per share.
The Company may, at its option, convert the Series B
Preferred Shares into the Company's common stock by dividing
the average closing price of the Company's common stock over a
twenty (20) day period by the liquidation preference of $1.00 per
share. In order to exercise this option, the average price of the
Company's common stock must be at least $1.50 per share.
Upon effectiveness of the Agreement, Para Mas had an
aggregate of 44,127,571 shares of common stock outstanding.
The officers of Para Mas will continue as officers of the
successor issuer. See "Management" below. The officers and
directors of Para Mas will continue without change as the
officers and directors of the successor issuer.
A copy of the Agreement is filed as an exhibit to this
Form 8-K and is incorporated in its entirety herein. The
foregoing description is modified by such reference.
(b) The following table contains information regarding
the shareholdings of Para Mas's current directors and executive
officers and those persons or entities who beneficially own more
than 5% of its common stock (giving effect to the exercise of the
warrants held by each such person or entity):
Amount of Percent of
Common Stock Common Stock
Beneficially Beneficially
Name Owned (1) Owned (2)
Mike M. Mustafoglu 150 *
1800 Century park East
Suite 600
Los Angeles, CA 90067
TransGlobal Financial Corp.(3,4) 40,000,850 90.65%
1800 Century park East
Suite 600
Los Angeles, CA 90067
Diva Trust (5) 3,120,000 7.1%
1902 Vision Drive
Palm Beach Gardens, FL 33418
All directors and 40,000,000 90.65%
executive officers as
as group (1 person)
* Less than 1%.
(1) Based upon 44,127,571 outstanding shares of common stock
(subsequent to the effectiveness of the reorganization).
(2) Assumes exercise of warrants, options or other rights to
purchase securities held by the named shareholder exercisable
within six months of the date hereof.
(3) TransGlobal Financial Corporation is an affiliate of Mike M.
Mustafoglu, the sole director and officer of the Company. Mike M.
Mustafoglu is the sole shareholder of TransGlobal Financial
Corporation. Since TransGlobal Financial Corporation has fewer
than 100 shareholders and is not making and does not intend to
make a public offering of its securities, management believes
that TransGlobal Financial Corporation is not deemed to be an
investment company by virtue of an exemption provided under the
Investment Company Act of 1940, as amended.
(4) Mike M. Mustafoglu, the sole director and executive officer of the
Company is the sole shareholder of TransGlobal Financial Corporation.
(5) The beneficiaries of the Diva Trust are Mike M. Mustafoglu's wife and
children. Mr. Mustafoglu's wife acts as the trustee of The Diva Trust.
Mr. Mustafoglu disclaims any beneficial interest in the shares of the
Company held by Diva Trust.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On April 17, 2000, the Company was acquired
through a reorganization agreement with Para Mas Internet,
Inc., a Nevada company. The Board of Directors approved the
purchase of the Company by Para Mas Internet, Inc.
BUSINESS
Para Mas is a development stage company whose business
plan is to provide a method for a foreign or domestic private
company to become a reporting ("public") company whose securities
are qualified for trading in the United States secondary market.
CURRENT OPERATIONS
The Company will attempt to locate and negotiate with a business
entity for the merger of that target company into the Company.
In certain instances, a target company may wish to become a
subsidiary of the Company or may wish to contribute assets to the
Company rather than merge. No assurances can be given that the
Company will be successful in locating or successfully
negotiating a transaction with any target company.
PERCEIVED BENEFITS
There are certain perceived benefits to being a reporting
company with a class of publicly traded securities. These are
commonly thought to include the following:
* the ability to use registered securities to make
acquisitions of assets or businesses;
* increased visibility in the financial community;
* the facilitation of borrowing from financial institutions;
* improved trading efficiency;
* shareholder liquidity;
* greater ease in subsequently raising capital;
* compensation of key employees through stock options;
* enhanced corporate image;
* a presence in the United States capital markets.
POTENTIAL TARGET COMPANIES
A business entity, if any, which might be interested in a
business combination with the Company may include the following:
* a company for which a primary purpose of becoming public
is the use of its securities for the acquisition of
assets or businesses;
* a company that is unable to find an underwriter of its
securities or is unable to find an underwriter of
securities on terms acceptable to it;
* a company that wishes to become public with less
dilution of its common stock than would occur upon an
underwriting;
* a company that believes it will be able obtain
investment capital on more favorable terms after it has
become public;
* a foreign company that desires an initial entry into
the United States' securities market;
* a special situation company, such as a company seeking a
public market to satisfy redemption requirements under a
qualified Employee Stock Option Plan;
* a company that seeks one or more of the other perceived
benefits of becoming a public company.
A business combination with a target company will normally
involve the transfer to the target company of the majority of the
issued and outstanding common stock of the Company, and the
substitution by the target company of its own management and
board of directors.
No assurances can be given that the Company will be able to
enter into a business combination, that the terms of any such
business combination will be favorable to the Company, or that
the nature of the business of potential target companies will be
satisfactory to the Company's management.
PROPERTY
Para Mas is provided administrative offices at the offices of
its controlling shareholder, TransGlobal Financial Corporation,
at 1800 Century Park East, Suite 600, Los Angeles, CA 90067.
Curently, TransGlobal does not charge any rent to Para Mas but
may do so in the future.
LITIGATION
There is no litigation
MARKET FOR PARA MAS'S SECURITIES
Para Mas has been a non-reporting publicly traded company.
Para Mas's common stock is traded on the OTC Bulletin Board
operated by Nasdaq under the symbol PMII. Para Mas did not file
a registration statement with the Securities and Exchange
Commission and has not been a reporting company under the
Securities Exchange Act of 1934. The Nasdaq Stock Market has
implemented a change in its rules requiring all companies trading
securities on the OTC Bulletin Board to become reporting
companies under the Securities Exchange Act of 1934. Until such
registration is achieved the Company's trading symbol is PMIIE to
indicate its non-reporting status.
The Company was required to become a reporting company by the
close of business on April 20, 2000 or no longer be listed on the
OTC Bulletin Board. Para Mas has effected the reorganization
with Lapitos and has become a successor issuer thereto in order
to comply with the reporting company requirements implemented by
the Nasdaq Stock Market.
The following table represents the average prices for the
Company's common stock:
Opening High Low Closing
Price Bid Bid Bid Volume
Apr 1- Apr 17, 2000 2.125 2.125 2.125 2.125 0
Jan-March, 2000 1.500 2.562 0.000 2.125 14,600
October-Dec., 1999 3.000 3.000 1.500 1.500 5,700
July-September, 1999 0.125 2.000 0.000 3.000 1,500
April-June, 1999 0.125 0.125 0.125 0.125 0
Jan-March, 1999 0.125 0.125 0.125 0.125 0
October-Dec., 1998 0.25 0.25 0.00 0.125 100
July-September, 1998 0.25 0.25 0.25 0.25 0
April-June, 1998 0.25 0.25 0.25 0.25 300
Jan-March, 1998 0.25 0.25 0.25 0.25 0
MANAGEMENT
Name Age Title
Mike M. Mustafoglu 49 President, Secretary, Director
Mike M. Mustafoglu received a Bachelor of Science in Electrical
Engineering from Wichita State University in 1974 and a Master of Business
Administration in Finance from the University of Houston in 1978.
From 1974-1977, Mr. Mustafoglu was a geophysicist with Shell Oil
Company. From 1977-1984, Mr. Mustafoglu was employed by Getty Oil Company of
Los Angeles in various corporate and financial planning capacities. From 1984-
1992, Mr. Mustafoglu served in various executive management positions for
companies affiliated with a privately-held entity known as Oxbow Corporation.
Oxbow group companies were engaged in venture investing, energy
production, metals and coal trading, industrial production, publishing and
technology. During this time, Mr. Mustafoglu was vice-president of Oxbow
Resources, and President of the following companies: Oxbow Energy, Inc.,
Pacific Basin Transportation, Inc., Oxbow Hydrocarbons, Inc. and PetroPort
Terminal Corporation. From 1991 to date, Mr. Mustafoglu has been president
of TransGlobal Financial Corporation, specializing in consulting and
financial planning for emerging growth companies. Mr. Mustafoglu is a past
member of the Board of Directors of ECO2, Inc. (NASDAQ SmallCap (R); 1992-
1995), Serv-Tech, Inc. (NASDAQ NMS; 1995-1996), Corgenix Medical
Corporation (OTCBB) in 1998 and U.S. Medical Group, Inc. (OTC BB 1996-1999).
EXECUTIVE COMPENSATION
For the past three years and currently, the sole executive
officer of the company receives no compensation from the Company.
RELATED TRANSACTIONS
The Company has issued a total of 40,000,000 shares of Common
Stock to TransGlobal Financial Corporation on January 6, 2000 for
the cash advances it made to the Company since 1996, the
cancellation of indebtedness in the amount of $51,000 and
expenses incurred by TransGlobal Financial Corporation in
conjunction with identifying and screening acquisition candidates
and negotiating with such target companies on behalf of the Company.
During the year ended June 30, 1998, the Company issued
4,000,000 shares of restricted common stock to a significant
shareholder of the Company in exchange for a note payable and
accrued interest of a $188,000.
RISK FACTORS
The Company, its business plan and any offering of its
securities are subject to numerous risk factors which prospective
investors should carefully consider, including the following:
NO OPERATING HISTORY OR REVENUE AND MINIMAL ASSETS. The Company has
had no operating history nor any revenues or earnings from operations. The
Company has no significant assets or financial resources. The
Company will, in all likelihood, sustain operating expenses
without corresponding revenues, at least until the consummation
of a business combination, although there can be no assurance
that an appropriate target company will be located. This may
result in the Company incurring a net operating loss, which will
increase continuously until the Company can consummate a business
combination with such a target company. There is no assurance
that the Company can identify an appropriate target company or
consummate such a business combination with such appropriate
target company.
SPECULATIVE NATURE OF THE COMPANY'S PROPOSED OPERATIONS.
The success of the Company's proposed plan of operation will
depend to a great extent on the operations, financial condition
and management of a target company that may be identified in the
future. While management will prefer business combinations with
entities having established operating histories, there can be no
assurance that the Company will be successful in locating target
companies meeting such criteria. In the event the Company
completes a business combination, of which there can be no
assurance, the success of the Company's operations will be
dependent upon management of the target company and numerous
other factors relating to the target company beyond the Company's
control.
SCARCITY OF AND COMPETITION FOR BUSINESS OPPORTUNITIES AND
COMBINATIONS. The Company is and will continue to be an
insignificant participant in the business of seeking mergers with
and acquisitions of business entities. A large number of
established and well-financed entities, including venture capital
firms, are active in mergers and acquisitions of companies which
may be merger or acquisition target candidates for the Company.
Nearly all such entities have significantly greater financial
resources, technical expertise and managerial infrastructure than
the Company and, consequently, the Company will be at a
competitive disadvantage in identifying possible business
opportunities and successfully completing an appropriate business
combination. Moreover, the Company will compete with numerous
other small public companies in the business of seeking merger or
acquisition candidates.
NO AGREEMENT FOR BUSINESS COMBINATION OR OTHER
TRANSACTION-NO STANDARDS FOR BUSINESS COMBINATION. The Company
has no current arrangement, agreement or understanding with
respect to engaging in a merger or business combination with, or
acquisition of, a specific business entity. There can be no
assurance that the Company will be successful in identifying and
evaluating suitable business opportunities or in consummating a
business combination. Management has not identified any
particular industry or specific business within an industry for
evaluation by the Company. There is no assurance that the
Company will be able to negotiate a business combination on terms
favorable to the Company. The Company has not established any
minimum length of operating history or specified level of
earnings, assets, net worth or other criteria which a target
company must have achieved, or without which the Company would
not consider a business combination with such business entity.
Accordingly, the Company may enter into a business combination
with a business entity having no significant operating history,
and/or which has operating losses, limited or no potential for
immediate earnings, limited assets, negative net worth or other
negative characteristics.
CONTINUED MANAGEMENT CONTROL, LIMITED TIME AVAILABILITY.
While seeking a business combination, management anticipates
devoting only a limited amount of time per month to the business
of the Company. The Company's sole officer is not obligated to
devote his full time and attention exclusively to the business
and affairs of the Company. The Company has not obtained key man
life insurance on its officer and director. Notwithstanding the
combined limited experience and time commitment of management,
the loss of the services of this individual would adversely
affect achievement of the Company's business plan and its
likelihood of continuing operations.
CONFLICTS OF INTEREST--GENERAL. The Company's sole officer
and director participates in other business ventures which may
compete directly with the Company's proposed or future business.
Additional conflicts of interest and non-arms length transactions
may also arise in the future. Management has adopted a policy
that the Company will not seek a merger or other business
combination with, or acquisition of, any entity in which any
member of management serves as an officer, director or partner,
or in which they or their family members own or hold any
ownership interest.
REPORTING REQUIREMENTS MAY DELAY OR PRECLUDE ACQUISITION.
Section 13of the Securities Exchange Act of 1934 (the "Exchange
Act") requires companies subject thereto to provide certain
information about significant acquisitions including certified
financial statements for the company acquired covering one or two
years, depending on the relative size of the acquisition. The
time and additional costs that may be incurred by some target
companies to prepare such financial statements may significantly
delay or essentially preclude consummation of an otherwise
desirable business combination by the Company. Acquisition
prospects that do not have or are unable to obtain the required
audited financial statements may not be appropriate for
acquisition so long as the applicable reporting requirements of
the Exchange Act require such audited financial statements.
LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION. The
Company has neither conducted, nor have others made available to
it, market research indicating that demand exists for the
transactions contemplated by the Company. Even in the event
demand exists for a merger, business combination or acquisition
of the type contemplated by the Company, there is no assurance
the Company will be successful in negotiating satisfactory terms
and conditions and consummating any such business combination.
LACK OF DIVERSIFICATION. The Company's proposed
operations, even if successful, will in all likelihood result in
the Company engaging in a business combination with only one
business entity. Consequently, the Company's activities will be
limited to those engaged in by the business entity, which the
Company merges with or acquires. The Company's inability to
diversify its activities into a number of areas may subject the
Company to economic fluctuations within a particular business or
industry and therefore increase the risks associated with the
Company's operations.
REGULATION UNDER INVESTMENT COMPANY ACT. Although the
Company will be subject to regulation under the Exchange Act,
management believes the Company will not be subject to regulation
under the Investment Company Act of 1940, insofar, as the Company
will not be engaged in the business of investing or trading in
securities. In the event the Company engages in business
combinations which result in the Company holding passive
investment interests in a number of entities, the Company could
be subject to regulation under the Investment Company Act of
1940. In such event, the Company would be required to register
as an investment company and could be expected to incur
significant registration and compliance costs. The Company has
obtained no formal determination from the Securities and Exchange
Commission as to the status of the Company under the Investment
Company Act of 1940 and, consequently, any violation of the
Investment Company Act could subject the Company to material
adverse consequences.
PROBABLE CHANGE IN CONTROL AND MANAGEMENT. A business
combination involving the issuance of the Company's common stock
will, in all likelihood, result in shareholders of a target
company obtaining a controlling interest in the Company. Any
such business combination may require shareholders of the Company
to sell or transfer all or a portion of the Company's common
stock held by them. The resulting change in control of the
Company will likely result in removal of the present officer and
director of the Company and a corresponding reduction in or
elimination of his participation in the future affairs of the
Company.
REDUCTION OF PERCENTAGE SHARE OWNERSHIP FOLLOWING BUSINESS
COMBINATION. Currently, the Company's primary plan of operation
is to consummate a business combination with a business entity
which, in all likelihood, will result in the Company issuing
securities to shareholders of such business entity. The issuance
of previously authorized and unissued common stock of the Company
would result in reduction in percentage of shares owned by the
present shareholders of the Company and would most likely result
in a change in control or management of the Company.
TAXATION. Federal and state tax consequences will, in all
likelihood, be major considerations in any business combination
the Company may undertake. Currently, such transactions may be
structured so as to result in tax-free treatment to both
companies and/or their shareholders, in certain instances,
pursuant to various federal and state tax provisions. The Company
intends to structure any business combination so as to minimize
the federal and state tax consequences to the Company, any target
company and their respective shareholders; however, there can be
no assurance that such business combination will meet the
statutory requirements of a tax-free reorganization or that the
parties will obtain the intended tax-free treatment upon a
transfer of stock or assets. A non-qualifying reorganization
could result in the imposition of both federal and state taxes,
which might have an adverse effect on the parties to the
transaction and make more difficult the consummation of a
business combination with a target company.
REQUIREMENT OF AUDITED FINANCIAL STATEMENTS MAY DISQUALIFY BUSINESS
OPPORTUNITIES. Management anticipates that the Company will
request that any potential business opportunity provide audited
financial statements. One or more attractive business
opportunities may choose to forego the possibility of a business
combination with the Company rather than incur the expenses
associated with preparing audited financial statements. In such
case, the Company may choose to obtain certain representations as
to the target company's assets, liabilities, revenues and
expenses prior to consummating a business combination, with
further representations that an audited financial statement would
be provided after closing of such a transaction. Closing
documents relative thereto may include representations that the
audited financial statements will not materially differ from the
representations included in such closing documents, however,
there can be no assurance in such circumstances that such audited
financial statements will be provided or that the results of
operations will not so materially differ.
POSSIBLE PRICE VOLATILITY. Although it is impossible to
predict the nature of any secondary trading market for the
Company's common stock in the future, the market prices for
securities of emerging companies historically have been highly
volatile. Subsequent to consummation of a business combination
and the development of any trading market, if any, future
announcements concerning the Company or its competitors,
including the results of testing, technological innovations or
new commercial products, government regulations and developments
concerning proprietary rights or litigation may have a
significant impact on the price of the Company's securities in
any such secondary trading.
SHARES ELIGIBLE FOR FUTURE SALE. Sales of a substantial
number of shares of the Company's Common Stock in any secondary
market arising following consummation of a business combination
could adversely affect the market price of the Common Stock. The
40,000,000 shares of Common Stock issued TransGlobal Financial
Corporation, a company owned by the Company's sole director and
officer, will become eligible for sale in the public market,
subject to compliance with Rule 144 under the Act. Rule 144
generally provides that beneficial owners of shares who have held
such shares for one (1) year may sell within a three-month period
a number of shares not exceeding the greater of one percent of
the total outstanding shares or the average trading volume of the
shares during the four calendar weeks preceding such sale. There
can be no assurance that sales of these securities will not
depress the price of the Company's common stock or otherwise
adversely affect any secondary market that might arise subsequent
to consummation of any business combination.
NO DIVIDENDS ANTICIPATED. The Company has never paid any
dividends on its securities and does not anticipate the payment
of dividends in the foreseeable future.
CURRENT TRADING MARKET FOR THE COMPANY'S SECURITIES. Para
Mas's common stock is traded on the OTC Bulletin Board operated
by Nasdaq under the symbol PMII. Para Mas did not file a
registration statement with the Securities and Exchange
Commission and has not been a reporting company under the
Securities Exchange Act of 1934. The Nasdaq Stock Market has
implemented a change in its rules requiring all companies trading
securities on the OTC Bulletin Board to be registered as a
reporting company. Until such registration is achieved the
Company's trading symbol is PMIIE to indicate its non-reporting
status. The Company was required to become a
reporting company by the close of business on September 1, 1999
or no longer be listed on the OTC Bulletin Board. Para Mas has
effected the reorganization with Lapitos and has become a
successor issuer thereto in order to comply with the reporting
company requirements implemented by the Nasdaq Stock Market. No
assurance can be given that an active trading market in the
Company's securities will be sustained if it is able to retain its
listed status.
PENNY STOCK REGULATION. Upon commencement of trading in the
Company's stock, if such continues (of which there can be no
assurance) the Company's common stock may be deemed a penny
stock. Penny stocks generally are equity securities with a price
of less than $5.00 per share other than securities registered on
certain national securities exchanges or quoted on the Nasdaq
Stock Market, provided that current price and volume information
with respect to transactions in such securities is provided by
the exchange or system. The Company's securities may be subject
to "penny stock rules" that impose additional sales practice requirements on
broker-dealers who sell such securities to persons other than
established customers and accredited investors (generally those
with assets in excess of $1,000,000 or annual income exceeding
$200,000 or $300,000 together with their spouse). For
transactions covered by these rules, the broker-dealer must make
a special suitability determination for the purchase of such
securities and have received the purchaser's written consent to the
transaction prior to the purchase. Additionally, for any transaction
involving a penny stock, unless exempt, the "penny stock rules" require the
delivery, prior to the transaction, of a disclosure schedule
prescribed by the Commission relating to the penny stock market.
The broker-dealer also must disclose the commissions payable to
both the broker-dealer and the registered representative and current quotations
for the securities. Finally, monthly statements must be sent disclosing
recent price information on the limited market in penny stocks.
Consequently, the "penny stock rules" may restrict the ability of
broker-dealers to sell the Company's securities. The foregoing
required penny stock restrictions will not apply to the Company's
securities if such securities maintain a market price of $5.00 or
greater. There can be no assurance that the price of the
Company's securities will reach or maintain such a level.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 5. OTHER EVENTS
Successor Issuer Election.
Upon effectiveness of the Agreement, pursuant to Rule 12g-
3(a)of the General Rules and Regulations of the Securities and
Exchange Commission, Para Mas became the successor issuer to
Lapitos Acquisition Corporation for reporting purposes under the
Securities Exchange Act of 1934 and elects to report under the
Act effective on April 17, 2000.
ITEM 6. RESIGNATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
Not applicable.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS
(a) Financial statements of business acquired.
The required financial statements of the business acquired
are set forth below
PARA MAS INTERNET , INC.
Index to Financial Statements
Page
Audit Report of Independent Certified Public Accountants F-3
Financial Statements
Balance Sheet F-4
Statements of Losses F-5
Statements of Deficiency in Stockholders' Equity F-6
Statements of Cash Flows F-7
Notes to Financial Statements F-8 to F-13
Interim Financial Statements (Unaudited)
Balance Sheet as of December 31, 1999
and June 30, 1999 F-14
Statement of Losses for the six months ended
December 31, 1999 and 1998 F-15
Statement of Cash Flows for the six months ended
December 31, 1999 and 1998 F-16
Notes to Financial Statements at December 31, 1999 F-17
STEFANOU & COMPANY, LLP
Certified Public Accountants
1360 Beverly Road
Suite 305
McLean, VA 22101-3621
703-448-9200
703-448-3515 (fax)
Philadelphia, PA
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors
Para Mas Internet, Inc.
Los Angles, California
We have audited the accompanying balance sheet of Para Mas
Internet, Inc. as of June 30, 1999 and 1998 and the related
statements of losses, deficiency in stockholders' equity, and
cash flows for the years then ended . These financial statements
are the responsibility of the company's management. Our
responsibility is to express an opinion on these financial
statements based upon our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatements. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Para Mas Internet, Inc. of June 30, 1999 and 1998, and the
results of its operations and its cash flows for the years then
ended in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared
assuming the Company will continue as a going concern. As
discussed in Note G to the financial statements, the Company has
suffered recurring losses from operations and has no established
source of revenue. This raises substantial doubt about its
ability to continue as a going concern. Management's plans in
regard to these matters are also described in Note G. The
financial statements do not include any adjustments that might
result form the outcome of this uncertainty.
/s/ Stefanou & Company , LLP
Stefanou & Company, LLP
McLean, Virginia
April 14, 2000
<PAGE> F-3
PARA MAS INTERNET, INC.
BALANCE SHEET
JUNE 30, 1999 AND 1998
ASSETS
June 30, 1999 June 30, 1998
CURRENT ASSETS:
Cash $ - $ -
------- -------
Total current assets - -
PROPERTY AND EQUIPMENT, AT COST:
Furniture and equipment - -
Less accumulated depreciation - -
------- -------
$ - $ -
LIABILITIES AND DEFICIENCY IN STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 8,072 $ 3,673
Note payable 15,000 15,000
Notes payable-related party (Note E) 42,803 42,803
-------- --------
Total current liabilities 65,875 61,476
DEFICIENCY IN STOCKHOLDERS' EQUITY
(NOTES B and C):
Preferred stock, par value, $.001
per share; authorized 10,000,000
shares; 64,200 shares issued
at June 30, 1999 and 60,000 shares
issued at June 30, 1998 64,200 60,000
Common stock, par value, $.001 per
share; authorized, 100,000,000 shares;
4,127,569 shares issued at June
30, 1999 and June 30, 1998 4,127 4,127
Additional paid in capital 1,407,661 1,411,861
Accumulated deficit (1,541,863) (1,537,863)
----------- -----------
(65,875) (61,476)
----------- ------------
$ - $ -
See accompanying notes to financial statements
<PAGE> F-4
PARA MAS INTERNET, INC.
STATEMENT OF LOSSES
FOR THE YEARS ENDED JUNE 30, 1999 AND 1998
June 30, 1999 June 30, 1998
Cost and expenses:
General and $ - $ 76,188
administrative
Loss on disposal of assets - 9,857
------------- -------------
- 86,045
Other (income) expense:
Interest expense 4,399 3,673
Other expense 4,399 3,673
Net loss 4,399 89,718
Loss per share:
Basic and diluted $.00 $ .03
Weighted average shares
outstanding:
Basic and diluted 4,127,569 2,460,785
See accompanying notes to financial statements
<PAGE> F-5
PARA MAS INTERNET, INC.
STATEMENT OF DEFICIENCY IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED JUNE 30, 1999 AND 1998
Common Prefer Common Prefer Additio Accumula
Shares red Stock red nal ted
Shares Amount Stock Paid in Deficit Total
Amount Capital
Balance at June 30, 1997
127,569 - $ 127 $ - $1,227,861 $(1,447,746) $(219,758)
Shares issued in exchange for note
payable and accrued interest
4,000,000 - 4,000 - 184,000 - 188,000
Issuance of Series B Cumulative
Convertible Redeemable
Preferred Stock
- 60,000 60,000 60,000
Net Loss
- - - - - (89,718) (89,718)
Balance at June 30, 1998
4,127,569 60,000 4,127 60,000 $1,411,861 $1,537,464 $ (61,476)
Net income (loss)
- - - (4,399) (4,399)
Preferred Stock dividend
- 4,200 - 4,200 (4,200) - -
---------- ------- ------ ------ --------- -------- ----------
Balance at June
4,127,569 64,200 $ 4,127 $64,200 $1,407,661 (1,541,863) $ (65,875)
========= ====== ======= ======= ========== =========== ==========
See accompanying notes to financial statements
<PAGE> F-6
PARA MAS INTERNET, INC.
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 1999 AND 1998
June 30, 1999 June 30, 1998
Cash flows from operating
activities:
Net loss $ (4,399) $ (89,718)
Change in assets and liabilities:
Adjustments to reconcile net
loss to net cash provided by
operating activities:
Increase (decrease) in:
Accounts payable and
accrued expenses 4,399 (6,327)
----------- ----------
Net cash provided (used)
by operating activities 0 (96,045)
Cash flows from investing activities:
Disposal of asset, net - 9,857
Net cash provided in
investing activities - 9,857
Cash flows from financing activities:
Issuance of preferred stock - 60,000
Issuance of notes payable - 25,000
Issuance of common stock - 188,000
Repayment of notes payable
- shareholders - (188,000)
Net cash provided by
financing activities - 85,000
Net decrease in cash and
equivalents - (1,188)
Cash - beginning of period - 1,188
Cash - end of period $ - $ 0
Supplemental Disclosure of Cash
Flow Information:
Cash paid during
the year for interest $ - $ -
Cash paid during
the year for taxes - -
Common issued in exchange
for debt - 188,000
Preferred stock issued in
exchange for services - 60,000
Preferred stock dividends paid
in additional preferred shares 4,200 -
See accompanying notes to financial statements
<PAGE> F-7
PARA MAS INTERNET, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999 AND 1998
NOTE A-SUMMARY OF ACCOUNTING POLICIES
A summary of the significant accounting policies applied in the
preparation of the accompanying financial statements follows.
Business Operations
Para Mas Internet, Inc. ("Company" or "Para Mas") was
incorporated under the laws of the State of Nevada on June 6,
1994 as U.S. Medical Management, Inc., a wholly owned subsidiary
of Waterloo Wheels, Inc. Waterloo Wheels, Inc. was incorporated
on June 2, 1986 under the laws of British Columbia. In June
1995, the shareholders of Waterloo Wheels, Inc. exchanged all
their outstanding stock for shares of the Company on a share for
share basis. In June 1995, the Company completed a merger with
Ken Venturi Golf Training Center, Inc. Effective with the
merger, all previously outstanding common stock of Ken Venturi
Golf Center, Inc. was exchanged for 4,000,000 shares of the
Company's common stock. Immediately following the merger, the
Company changed its name to Ken Venturi Golf, Inc.
In November 1997, the Company changed its name to
Transcontinental Waste, Industries. In April 1999, the Company
changed its name to Financial Depot Online, Inc. In August 1999
the Company changed its name to Para Mas Internet, Inc.
The Company has generated no sales revenues, has incurred
expenses and has sustained losses. Consequently, its operations
are subject to all the risks inherent in the establishment of a
new business enterprise. For the period from inception through
June 30, 1999 the Company has an accumulated deficit of
$1,541,863.
Income Taxes
Income taxes are provided based on the liability method for
financial reporting purposes in accordance with the provisions of
Statements of Financial Standards No. 109, "Accounting for
Income Taxes". Deferred and prepaid taxes are provided for on
items which are recognized in different periods for financial and
tax reporting purposes.
Cash Equivalents
For purposes of the Statements of Cash Flows, the Company
considers all highly liquid debt instruments purchased with a
maturity date of three months or less to be cash equivalents.
Intangible Assets
Organization costs incurred after December 31, 1999 will be
expensed as incurred in accordance with AICPA Statement of
Position 98-5.
<PAGE> F-8
PARA MAS INTERNET, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999 AND 1998
NOTE A-SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
Stock Based Compensation
The Company accounts for stock transactions in accordance with
APB Opinion 25, "Accounting for Stock Issued to Employees." In
accordance with statement of Financial Accounting Standards No.
123, "Accounting for Stock Based Compensation," the Company has
adopted the proforma disclosure requirements.
Liquidity
As shown in the accompanying financial statements, the Company
incurred a net loss of $4,399 during the year ended June 30,
1999 and $ 89,718 during the year ended June 30, 1998.
Comprehensive Income
The Company does not have any items of comprehensive income in
any of the periods presented.
Net Loss Per Share
Losses per common share for the years ended June 30, 1999 and
1998 are based upon 4,127,569 and 2,460,785 shares respectively,
representing the weighted average number of shares outstanding.
Earnings Per Share
The Company has adopted Statement of Financial Accounting
Standard No. 128, "Earnings Per Share," specifying the
computation, presentation and disclosure requirements of earnings
per share information. Basic earnings per share has been
calculated based upon the weighted average number of common
shares outstanding. Stock options and warrant's have been
excluded as common stock equivalents in the diluted earnings per
share because they are either antidilutive, or their effect is
not material. There is no effect on earnings per share
information for the years ended June 30, 1999 and 1998 relating
to the adoption of this standard.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect certain reported
amounts and disclosures. Accordingly, actual results could
differ from those estimates.
<PAGE> F-9
PARA MAS INTERNET, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999 AND 1998
NOTE B-CAPITAL STOCK
In November, 1997, the Company approved, by unanimous consent of
its Board of Directors, to amend the Company's articles of
incorporation to increase the number of shares of common stock,
par value $.001 per share from 25,000,000 shares to 100,000,000
shares and to create 10,000,000 shares of preferred stock, par
value $.001 per share.
In addition, on November 18, 1997, the Company, by unanimous
consent of its Board of Directors, approved a reverse stock split
of one (1) share for one hundred (100) shares of common stock
outstanding effective for shareholders of record as of November
18, 1997. The financial statements at June 30, 1998 give effect
to the reverse split as of June 30, 1997.
Share amounts presented in the balance sheets and statements of
deficiency in stockholders' equity reflect the actual share
amounts outstanding for each period presented.
NOTE C- PREFERRED STOCK
In May 1998, the Company issued 60,000 shares of Series B 7%
Cumulative Redeemable Convertible Preferred Stock ("Preferred
Shares") in exchange for legal services rendered to the Company.
Holders of the Preferred Shares are entitled to receive
cumulative cash dividends at the annual rate of 7% per annum, or
$.07 per share, payable quarterly. The dividends may be payable
in cash or through a dividend of additional shares of Preferred
Shares. The Company paid a 4,200 Series B Preferred Stock
dividend to the holders of the Preferred Shares during the year
ended June 30, 1999.
The Preferred Shares rank senior to the common stock. The
Preferred Shares have a liquidation preference of $ 1.00 per
share plus any and all declared and unpaid dividends.
The Preferred Shares are convertible, in whole or in part , at
the option of the holders thereof, into shares of common stock at
amount equal to the Company's average closing bid price of the
common stock for thirty days immediately preceding the conversion
divided by the liquidation preference of $1.00 per share.
The Company may, at its option, convert the Preferred Shares
into the Company's common stock by dividing the average closing
price of the Company's common stock over a twenty (20) day period
by the liquidation preference of $1.00 per share. In order to
exercise this option, the average price of the Company's common
stock must be at least $1.50 per share.
<PAGE> F-10
PARA MAS INTERNET, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999 AND 1998
NOTE D-INCOME TAXES
The Company has adopted Financial Accounting Standard number
109 which requires the recognition of deferred tax liabilities
and assets for the expected future tax consequences of events
that have been included in the financial statement or tax
returns. Under this method, deferred tax liabilities and assets
are determined based on the difference between financial
statements and tax bases of assets and liabilities using enacted
tax rates in effect for the year in which the differences are
expected to reverse. Temporary differences between taxable
income reported for financial reporting purposes and income tax
purposes are insignificant.
At June 30, 1999, the Company has available for federal income
tax purposes a net operating loss carryforward of $1,541,000
expiring the year 2011 that may be used to offset future taxable
income. The future utilization of the operating loss
carryforwards or the time period in which the carryforwards could
be utilized could be limited. The deferred tax asset related to
the carryforward is approximately $ 410,000. The Company has
provided a valuation reserve against the full amount of the net
operating loss benefit, since in the opinion of management based
upon the earnings history of the Company, it is more likely than
not that the benefits will not be realized. Due to significant
changes in the Company's ownership, the Company's future use of
its existing net operating losses may be limited.
Components of deferred tax assets as of June 30, 1999 are as
follows:
Non current:
Net operating loss carryforward $ 410,000
Valuation allowance (410,000)
Net deferred tax asset $ -
NOTE E-NOTES PAYABLE-RELATED PARTY
The Company's principal shareholder has advanced funds to the
Company for the purpose of meeting various working capital
requirements. These advances are in the form of unsecured demand
notes with interest at the prime lending rate plus 3% per annum.
During the year ended June 30, 1998, the Company issued 4,000,000
shares of restricted common stock to the Company's principal
shareholder in exchange for a note payable and accrued interest
of $188,000.
<PAGE> F-11
PARA MAS INTERNET, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999 AND 1998
NOTE F-LOSSES PER COMMON SHARE
The following table presents the computation of basic and diluted
loss per share at June 30, 1999 and 1998:
1999 1998
Net loss available for common shareholders $ (4,399) $ (89,718)
Basic and fully diluted loss per share $ (.00) $ (.04)
Weighted average common shares outstanding 4,127,569 2,460,785
Net loss per share is based upon the weighted average number of
shares of common stock outstanding. In November , 1997, a one
(1) for one hundred (100) reverse stock split of the Company's
common stock was approved by the Company's Board of Directors
(See Note B). Accordingly, all historical weighted average share
and per share amounts have been restated to reflect the reverse
split.
NOTE G-GOING CONCERN MATTERS
The accompanying financial statements have been prepared on a
going concern basis, which contemplates the realization of assets
and the satisfaction of liabilities in the normal course of
business. As shown in the financial statements during the years
ended June 30, 1999 and 1998, the Company incurred losses of $
4,399 and $89,718, respectively. These factors among others may
indicate that the Company will be unable to continue as a going
concern for a reasonable period of time.
<PAGE> F-12
PARA MAS INTERNET, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999 AND 1998
NOTE G-GOING CONCERN MATTERS (continued)
The financial statements do not include any adjustments relating
to the recoverability and classification of liabilities that
might be necessary should the Company be unable to continue as a
going concern. The Company's continuation as a going concern is
dependent upon its ability to generate sufficient cash flow to
meet its obligations on a timely basis, to obtain additional
financing as may be required, and ultimately to attain
profitability.
NOTE H- SUBSEQUENT EVENT
Subsequent to the date of the financial statements, the Company
issued 40,000,000 shares of restricted common stock to the
Company's principal shareholder in exchange for the notes payable
and accrued interest of approximately $53,000.
<PAGE> F-13
PARA MAS INTERNET, INC.
BALANCE SHEET
(UNAUDITED)
ASSETS
December 31, 1999 June 30, 1999
CURRENT ASSETS:
Cash $ - $ -
Total current assets - -
PROPERTY AND EQUIPMENT, AT COST:
Furniture and equipment - -
Less accumulated deprecation - -
---------- ---------
$ - $ -
========== =========
LIABILITIES AND DEFICIENCY IN STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued
expenses $ 11,828 $ 8,072
Note payable 15,000 15,000
Notes payable- related party
(Note E) 42,803 42,803
----------- ---------
Total current 69,631 65,875
liabilities
DEFICIENCY IN STOCKHOLDERS' EQUITY
(NOTES B and C):
Preferred stock, par value, $.001
per share; authorized 10,000,000
shares; 66,300 shares issued
at December 31, 1999 and 64,200
shares issued at June 30, 1999 66,300 64,200
Common stock, par value, $.001
per share; authorized,100,000,000
shares; 4,127,569 shares issued at
December 31, 1999 and June 30, 1999 4,127 4,127
Additional paid in capital 1,405,561 1,407,661
Accumulated deficit (1,545,619) (1,541,863)
----------- -----------
(69,631) (65,875)
$ - $ -
=========== ===========
F-14
PARA MAS INTERNET, INC.
STATEMENT OF LOSSES
FOR THE SIX MONTHS ENDED DECEMBER 31, 1999 AND 1998
(UNAUDITED)
1999 1998
Cost and expenses:
General and administrative $ - $ -
Loss on disposal of assets - -
------ -------
- -
Other (income) expense:
Interest expense 3,756 2,200
Other expense 3,756 2,200
Net loss 3,756 2,200
Loss per share:
Basic and diluted $ .00 $ .00
Weighted average shares outstanding:
Basic and diluted 4,127,569 4,127,569
<PAGE> F-15
PARA MAS INTERNET, INC.
STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1999 AND 1998
(UNAUDITED)
1999 1998
Cash flows from operating activities:
Net loss $ (4,399) $ (2,200)
Change in assets and liabilities:
Adjustments to reconcile
net loss to net cash
provided by operating activities:
Increase (decrease) in:
Accounts payable and
accrued expenses 4,399 (2,200)
Net cash provided (used)
by operating activities 0 0
Cash flows from investing activities:
Net cash provided in
investing activities - -
Cash flows from financing activities:
Net cash provided by
financing activities - -
Net decrease in cash and
equivalents - -
---------- ----------
Cash - beginning of period - -
---------- ----------
Cash - end of period $ - $ 0
========== ==========
Supplemental Disclosure of Cash Flow Information:
Cash paid during
the period for interest $ - $ -
Cash paid during
the period for taxes - -
Preferred stock dividends paid in
additional preferred shares 2,100 2,100
<PAGE> F-16
PARA MAS INTERNET, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE A - SUMMARY OF ACCOUNTING POLICIES
General
The accompanying unaudited consolidated financial statements have
been prepared in accordance with the requirements of Item 310(b)
of Regulation S-B, and therefore, do not include all the
information necessary for a fair presentation of financial
position, results of operations and cash flows in conformity
with generally accepted accounting principles.
In the opinion of the Company, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the six
month period ended December 31, 1999 are not necessarily
indicative of the results that may be expected for the year ended
June 30 , 2000.
Amounts for the six months ended December 31, 1998 have been
reclassified to conform with the December 31, 1999 presentation.
Capital Stock
During the six months ended December 31, 1999, the Company paid
a 2,100 Series B Preferred Stock dividend to the holders of the
Preferred Shares.
(b) Pro-forma financial information
The required pro forma financial information is set forth below
LAPITOS ACQUISITION CORPORATION
CONSOLIDATED PRO FORMA UNAUDITED BALANCE SHEET
DECEMBER 31, 1999
ASSETS
Lapitos Para Pro Pro
Maa forma forma
Adjust- Consolidated
ments
CURRENT ASSETS:
Cash
Total current assets $ 500 $ - $ 500
PROPERTY AND EQUIPMENT, AT COST:
Furniture and equipment - - -
Less accumulated
deprecation - - -
$ 500 $ $ 500
LIABILITIES AND DEFICIENCY IN STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and
accrued expenses $ 333 $ 11,828 $ 12,161
Note payable - 15,000 15,000
Notes payable-
related party - 42,803 42,803
------- ------- -------
Total current
liabilities 333 69,631 69,964
DEFICIENCY IN STOCKHOLDERS' EQUITY :
Preferred stock - 66,300 66,300
Common stock 500 4,127 (500) (1) 4,128
1 (1)
Additional paid in capital - 1,405,561 166 (1) 1,405,727
Accumulated deficit (333) (1,545,619) 333 (1) (1,545,619)
167 (69,631) (69,464)
$ 500 $ - $ 500
See accompanying notes to pro forma financial information
<PAGE> 1
LAPITOS ACQUISITION COOPERATION
CONSOLIDATED PRO FORMA CONSOLIDATED STATEMENT OF LOSSES
DECEMBER 31, 1999
Lapitos Para Mas Pro Pro
Forma Forma
Adjustmemts Consolidated
Cost and expenses:
General and
administrative $ 333 $ - $ 333
-------- ------- ---------
333 - -
Other (income) expense:
Interest expense - 3,756 -
Other expense - 3,756 3,756
Net loss 333 3,756 4,089
Loss per share:
Basic and diluted $ .00 $ .00 $ .00
Weighted average shares outstanding:
Basic and diluted 5,000,000 4,127,569 4,128,569
See accompanying notes to pro forma financial information
<PAGE> 2
LAPITOS ACQUISITION CORPORATION
NOTES TO CONDENSED PROFORMA UNAUDITED FINANCIAL STATEMENTS
DECEMBER 31, 1999
The Proforma Unaudited Financial Statements have been
prepared in order to present consolidated financial position
and results of operations of Lapitos Acquisition Corporation
(Lapitos) and Para Mas Internet, Inc. (Para Mas)) as if the
acquisition had occurred as of July 1, 1999.
On April 17, 2000, Para Mas completed a Stock Exchange Agreement
with Lapitos in a transaction accounted for using the purchase
method of accounting. The total purchase price and carrying value
of net assets acquired of the Lapitos was $ 1. From Lapito's
inception , until the date of the exchange, Lapitos was an
inactive corporation with no assets and liabilities.
Effective with the exchange, all previously outstanding common
stock, preferred stock, options and warrants owned by Lapitos
stockholders were exchanged for an aggregate of 1,000 shares of
Para Mas's common stock. The value of the stock that was issued
was the historical cost of Lapitos's net tangible assets, which
did not differ materially from their fair value. In accordance
with Accounting Principles Opinion No. 16, Para Mas is the
acquiring entity.
The following is a description of the pro forma adjustments that
have been made to the financial statements.
(1) To record the acquisition of Lapitos for stock. The
significant components of this transaction are:
Stock issued $ 1
Excess of liabilities assumed over assets acquired -
Total consideration paid $ 1
<PAGE> 3
(c) Exhibits
1.1 Agreement and Plan of Reorganization between
Lapitos Acquisition Corporation and Para Mas Internet,Inc.
23.1 Consent of Certified Public Accountants.
27.1 Financial Data Schedule
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
PARA MAS INTERNET, INC.
By /s/ Mike M. Mustafoglu
Mike M. Mustafoglu, President
Date: July 17, 2000
EX-1.1
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") between
PARA MAS INTERNET, Inc., a Nevada corporation ("PMIIE") and the
persons listed in Exhibit A hereof (collectively the
"Shareholders"), being the owners of record of all of the issued
and outstanding stock of Lapitos Acquisition Corp., a Delaware
corporation ("LAC").
Whereas, PMIIE wishes to acquire and the Shareholders wish
to transfer all of the issued and outstanding securities of LAC
in a transaction intended to qualify as a reorganization within
the meaning of 368(a)(1)(B) of the Internal Revenue Code of 1986,
as amended.
Now, therefore, PMIIE and the Shareholders adopt this plan
of reorganization and agree as follows:
1. Exchange of Stock.
1.1. Number of Shares. The Shareholders agree to transfer
to PMIIE at the Closing (defined below) the number of shares of
common stock of LAC, $.001 par value per share, shown opposite
their names in Exhibit A, which collectively represents 100% of
the issued and outstanding equity ownership of LAC, in exchange
pro rata for an aggregate of 1,000 shares of voting common stock
of PMIIE, $.001 par value per share.
1.2. Exchange of Certificates. Each holder of an
outstanding certificate or certificates theretofore representing
shares of LAC common stock shall surrender such certificate(s)
for cancellation to PMIIE, and shall receive in exchange a
certificate or certificates representing the number of full
shares of PMIIE common stock into which the shares of LAC common
stock represented by the certificate or certificates so
surrendered shall have been converted. The transfer of LAC
shares by the Shareholders shall be effected by the delivery to
PMIIE at the Closing of certificates representing the transferred
shares endorsed in blank or accompanied by stock powers executed
in blank.
1.3. Fractional Shares. Fractional shares of PMIIE common
stock shall not be issued, but in lieu thereof PMIIE shall round
up fractional shares to the next highest whole number.
1.4. Further Assurances. At the Closing and from time to
time thereafter, the Shareholders shall execute such additional
instruments and take such other action as PMIIE may request in
order more effectively to sell, transfer, and assign the
transferred stock to PMIIE and to confirm PMIIE's title thereto.
2. Ratio of Exchange. The securities of LAC owned by the
Shareholders, and the relative securities of PMIIE for which they
will be exchanged, are set out opposite their names Exhibit A.
3. Closing.
3.1. Time and Place. The Closing contemplated herein shall
be held as soon as possible at the offices of Para Mas Internet,
Inc. at 1800 Century Park East, Suite 600, Los Angeles, CA 90067,
unless another place or time is agreed upon in writing by the
parties without requiring the meeting of the parties hereof. All
proceedings to be taken and all documents to be executed at the
Closing shall be deemed to have been taken, delivered and
executed simultaneously, and no proceeding shall be deemed taken
nor documents deemed executed or delivered until all have been
taken, delivered and executed. The date of Closing may be
accelerated or extended by agreement of the parties.
3.2. Form of Documents. Any copy, facsimile telecommunication or
other reliable reproduction of the writing or transmission
required by this Agreement or any signature required thereon may
be used in lieu of an original writing or transmission or
signature for any and all purposes for which the original could
be used, provided that such copy, facsimile telecommunication or
other reproduction shall be a complete reproduction of the entire
original writing or transmission or original signature.
4. Unexchanged Certificates. Until surrendered, each
outstanding certificate that prior to the Closing represented LAC
common stock shall be deemed for all purposes, other than the
payment of dividends or other distributions, to evidence
ownership of the number of shares of PMIIE common stock into
which it was converted. No dividend or other distribution shall
be paid to the holders of certificates of LAC common stock until
presented for exchange at which time any outstanding dividends or
other distributions shall be paid.
5. Representations and Warranties of the Shareholders
The Shareholders, individually and separately, represent and
warrant as follows:
5.1. Title to shares. The Shareholders, and each of them, are
the owners, free and clear of any liens and encumbrances, of the
number of LAC shares which are listed in the attached schedule
and which they have contracted to exchange.
5.2. Litigation. There is no litigation or proceeding pending,
or to any Shareholder's knowledge threatened, against or relating
to shares of LAC held by the Shareholders.
6. Representations and Warranties of the Parties
PMIIE represents and warrants as follows:
6.1 Corporate Status. PMIIE is a corporation duly organized,
validly existing, and in good standing under the laws of the
State of Nevada and is licensed or qualified as a foreign
corporation in all states in which the nature of its business or
the character or ownership of its properties makes such licensing
or qualification necessary.
6.2 Capitalization. The authorized capital stock of PMIIE
consists of 100,000,000 shares of common stock, $.001 par value
per share, of which 44,127,570 shares are issued and outstanding,
all fully paid and nonassessable and no shares of non-designated
preferred stock; and 20,000,000 million of preferred stock of
which 60,000 are issued and outstanding.
6.3 Subsidiaries. PMIIE has no subsidiaries.
6.4 Litigation. There is no litigation or proceeding pending,
or to the Company's knowledge threatened, against or relating to
PMIIE, its properties or business, except as set forth in a list
certified by the president of PMIIE and delivered to the
Shareholders or attached hereto.
6.5 Contracts. PMIIE is not a party to any material contract
other than those listed as an attachment hereto.
6.6 No Violation. Execution of this Agreement and performance
by PMIIE hereunder has been duly authorized by all requisite
corporate action on the part of PMIIE, and this Agreement
constitutes a valid and binding obligation of PMIIE and
performance hereunder will not violate any provision of any
charter, bylaw, indenture, mortgage, lease, or agreement, or any
order, judgement, decree, law, or regulation to which any
property of PMIIE is subject or by which PMIIE is bound.
6.7 Taxes. PMIIE has filed in correct form all federal, state,
and other tax returns of every nature required to be filed by it
and has paid all taxes as shown on such returns and all
assessments, fees and charges received by it to the extent that
such taxes, assessments, fees and charges have become due. PMIIE
has also paid all taxes which do not require the filing of
returns and which are required to be paid by it. To the extent
that tax liabilities have accrued, but have not become payable,
they have been adequately reflected as liabilities on the books
of PMIIE and are reflected in the financial statements furnished
hereto.
6.8 Title to Property. PMIIE has good and marketable title to
all properties and assets, real and personal, reflected in
PMIIE's Financial Statements, except as since sold or otherwise
disposed of in the ordinary course of business, and PMIIE's
properties and assets are subject to no mortgage, pledge, lien,
or encumbrance, except for liens shown therein, with respect to
which no default exists.
6.9 Corporate Authority. PMIIE has full corporate power and
authority to enter into this Agreement and to carry out its
obligations hereunder, and will deliver at the Closing a
certified copy of resolutions of its board of directors
authorizing execution of this Agreement by its officers and
performance thereunder.
6.10 Investment Intent. PMIIE is acquiring the LAC shares to be
transferred to it under this Agreement for investment and not
with a view to the sale or distribution thereof.
The Shareholders represent and warrant as follows:
6.11 Corporate Status. LAC is a corporation duly organized,
validly existing, and in good standing under the laws of the
State of Delaware and is licensed or qualified as a foreign
corporation in all states in which the nature of its business or
the character or ownership of its properties makes such licensing
or qualification necessary.
6.12 Capitalization. The authorized capital stock of LAC
consists of 100,000,000 shares of common stock, $.001 par value
per share, of which 5,000,000 shares are issued and outstanding,
all fully paid and nonassessable and 20,000,000 shares of non-
designated preferred stock which have not been issued.
6.13 Subsidiaries. LAC has no subsidiaries.
6.14 Litigation. There is no litigation or proceeding pending,
or to the Shareholders' knowledge threatened, against or relating
to LAC, its properties or business, except as set forth in a list
certified by the president of LAC and delivered to PMIIE or
attached hereto.
6.15 Contracts. LAC is not a party to any material contract
other than those listed as an attachment hereto.
6.16 No Violation. Execution of this Agreement and performance
by the Shareholders hereunder has, as applicable, been duly
authorized by all requisite corporate action on the part of LAC
and each Shareholder, and this Agreement constitutes a valid and
binding obligation of each Shareholder and performance hereunder
will not violate any provision of any charter, bylaw, indenture,
mortgage, lease, or agreement, or any order, judgement, decree,
law, or regulation to which any property of LAC or any
Shareholder is subject or by which LAC or any Shareholder is
bound.
6.17 Taxes; Reporting Status. LAC has filed in correct form all
federal, state, and other tax returns of every nature required to
be filed by it and has paid all taxes as shown on such returns
and all assessments, fees and charges received by it to the
extent that such taxes, assessments, fees and charges have become
due. LAC has also paid all taxes which do not require the filing
of returns and which are required to be paid by it. To the
extent that tax liabilities have accrued, but have not become
payable, they have been adequately reflected as liabilities on
the books of LAC and are reflected in the financial statements
furnished hereto. LAC is subject to the reporting requirements of
the Securities Exchange Act of 1934, as amended, pursuant to
Section 12(g) thereof, and is current in all required filings,
and has been current in all required filings since at least the
earlier of (x) the date which was one year prior to the due date
of its last required filing, or (y) the date on which LAC became
a "reporting issuer."
6.18 Title to Property. LAC has good and marketable title to all
properties and assets, real and personal, reflected in LAC's
Financial Statements (if any), except as since sold or otherwise
disposed of in the ordinary course of business, and LAC's
properties and assets (if any) are subject to no mortgage,
pledge, lien, or encumbrance, except for liens shown therein,
with respect to which no default exists.
7. Conduct Pending the Closing
PMIIE and the Shareholders covenant that between the date of
this Agreement and the Closing as to each of them:
7.1. No change will be made in the charter documents, by-laws, or
other corporate documents of PMIIE or of LAC.
7.2. PMIIE and LAC will use its best efforts to maintain and
preserve its business organization, employee relationships and
goodwill intact, and will not enter into any material commitment
except in the ordinary course of business.
7.3. None of the Shareholders will sell, transfer, assign,
hypothecate, lien, or otherwise dispose or encumber the LAC
shares of common stock owned by them.
8. Conditions Precedent to Obligation of the Shareholders
The Shareholder's obligation to consummate this exchange
shall be subject to fulfillment on or before the Closing of each
of the following conditions, unless waived in writing by the
Shareholders as appropriate:
8.1. PMIIE Representations and Warranties. The
representations and warranties of PMIIE set forth herein shall be
true and correct at the Closing as though made at and as of that
date, except as affected by transactions contemplated hereby.
8.2. PMIIE Covenants. PMIIE shall have performed all
covenants required by this Agreement to be performed by it on or
before the Closing.
8.3. Board of Director Approval. The Board of Directors of
PMIIE shall have approved this Agreement.
8.4. Supporting Documents of PMIIE. PMIIE shall have
delivered to the Shareholders supporting documents in form and
substance reasonably satisfactory to the Shareholders, to the
effect that:
(a) PMIIE is a corporation duly organized, validly existing, and
in good standing;
(b) PMIIE's authorized capital stock is as set forth herein;
(c) Certified copies of the resolutions of the board of
directors of PMIIE authorizing the execution of this Agreement
and consummation hereof;
(d) Secretary's certificate of incumbency of the officers and
directors of PMIIE;
(e) Any document as may be specified herein or required to
satisfy the conditions, representations and warranties enumerated
elsewhere herein.
9. Conditions Precedent to Obligation of PMIIE
PMIIE obligation to consummate this merger shall be subject
to fulfillment on or before the Closing of each of the following
conditions, unless waived in writing by PMIIE:
9.1. Shareholder's Representations and Warranties. The
representations and warranties of the Shareholders set forth
herein shall be true and correct at the Closing as though made at
and as of that date, except as affected by transactions
contemplated hereby.
9.2. Shareholder's Covenants. The Shareholders shall have
performed all covenants required by this Agreement to be
performed by them on or before the Closing.
9.3. Supporting Documents of LAC. The Shareholders
shall have caused LAC to deliver to PMIIE supporting documents in
form and substance reasonably satisfactory to PMIIE, to the
effect that:
(a) LAC is a corporation duly organized, validly existing, and
in good standing;
(b) LAC's authorized capital stock is as set forth herein; and
(c) Any document as may be specified herein or required to
satisfy the conditions, representations and warranties enumerated
elsewhere herein.
10. Termination. This Agreement may be terminated (1) by
mutual consent in writing; (2) by either the Shareholders or
PMIIE if there has been a material misrepresentation or material
breach of any warranty or covenant by any other party; or (3) by
either Shareholders or PMIIE if the Closing shall not have taken
place within 15 days following execution of this Agreement,
unless adjourned to a later date by mutual consent in writing.
11. Survival of Representations and Warranties. The
representation and warranties of the Shareholders and PMIIE set
out herein shall survive the Closing.
12. Arbitration
12.1. Scope. The parties hereby agree that any and all
claims (except only for requests for injunctive or other
equitable relief) whether existing now, in the past or in the
future as to which the parties or any affiliates may be adverse
parties, and whether arising out of this agreement or from any
other cause, will be resolved by arbitration before the American
Arbitration Association within the State of Nevada
12.2. Consent to Jurisdiction, Situs and Judgement. The
parties hereby irrevocably consent to the jurisdiction of the
American Arbitration Association and the situs of the arbitration
(and any requests for injunctive or other equitable relief)
within the State of Nevada. Any award in arbitration may be
entered in any domestic or foreign court having jurisdiction over
enforcement of such awards.
12.3 Applicable Law. The law applicable to the arbitration
and this agreement shall be that of the State of Nevada,
determined without regard to its provisions which would otherwise
apply to a question of conflict of laws.
12.4. Disclosure and Discovery. The arbitrator may in
its discretion, allow the parties to make reasonable disclosure
and discovery in regard to any matters which are the subject of
the arbitration and to compel compliance with such disclosure and
discovery order. The arbitrator may order the parties to comply
with all or any of the disclosure and discovery provisions of the
Federal Rules of Civil Procedure, as they then exist, as may be
modified by the arbitrator consistent with the desire to simplify
the conduct and minimize the expense of the arbitration.
12.5. Rules of Law. Regardless of any practices of
arbitration to the contrary, the arbitrator will apply the rules
of contract and other law of the jurisdiction whose law applies
to the arbitration so that the decision of the arbitrator will
be, as much a possible, the same as if the dispute had been
determined by a court of competent jurisdiction.
12.6. Finality and Fees. Any award or decision by the
American Arbitration Association shall be final, binding and non-
appealable except as to errors of law or the failure of the
arbitrator to adhere to the arbitration provisions contained in
this agreement. Each party to the arbitration shall pay its own
costs and counsel fees except as specifically provided otherwise
in this agreement.
12.7. Measure of Damages. In any adverse action, the
parties shall restrict themselves to claims for compensatory
damages and/or securities issued or to be issued and no claims
shall be made by any party or affiliate for lost profits,
punitive or multiple damages.
12.8. Covenant Not to Sue. The parties covenant that
under no conditions will any party or any affiliate file any
action against the other (except only requests for injunctive or
other equitable relief) in any forum other than before the
American Arbitration Association, and the parties agree that any
such action, if filed, shall be dismissed upon application and
shall be referred for arbitration hereunder with costs and
attorney's fees to the prevailing party.
12.9. Intention. It is the intention of the parties and
their affiliates that all disputes of any nature between them
whenever arising, whether in regard to this agreement or any
other matter, from whatever the cause based on whatever law, rule
or regulation, whether statutory or common law, and however
characterized, be decided by arbitration as provided herein and
that no party or affiliate be required to litigate in any other
forum any disputes or other matters except for requests for
injunctive or equitable relief. This agreement shall be
interpreted in conformance with this stated intent of the parties
and their affiliates.
12.10. Survival. The provisions for arbitration
contained herein shall survive the termination of this agreement
for any reason.
13. General Provisions
13.1. Further Assurances. From time to time, each party
will execute such additional instruments and take such actions as
may be reasonably required to carry out the intent and purposes
of this agreement.
13.2. Waiver. Any failure on the part of either party
hereto to comply with any of its obligation, agreements, or
conditions hereunder may be waived in writing by the party to
whom such compliance is owed.
13.3. Brokers. Each party agrees to indemnify and hold
harmless the other party against any fee, loss, or expense
arising out of claims by brokers or finders employed or alleged
to have been employed by the indemnifying party.
13.4. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been
given if delivered in person or sent by prepaid first-class
certified mail, return receipt requested or recognized commercial
courier service as follows:
If to PMIIE, to:
Mike Mustafoglu
1800 Century Park East, Suite 600
Los Angeles, CA 90067
If to the Shareholders, to:
Mike Mustafoglu
1800 Century Park East, Suite 600
Los Angeles, CA 90067
13.5. Governing Law. This agreement shall be governed
by and construed and enforced in accordance with the laws of the
State of Nevada.
13.6. Assignment. This agreement shall inure to the
benefit of, and be binding upon, the parties hereto and their
successors and assigns; provided, however, that any assignment by
either party of its rights under this agreement without the
written consent of the other party shall be void.
13.7. Counterparts. This agreement may be executed
simultaneously in two or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute
one and the same instrument. Signatures sent by facsimile
transmission shall be deemed to be evidence of the original
execution thereof.
13.8. Exchange Agent and Closing Date. The Exchange
Agent shall be the law firm of Chapman and Flanagan, Las Vegas,
Nevada. The Closing shall take place upon the fulfillment by
each party of all the conditions of Closing required herein, but
not later than 15 days following execution of this agreement
unless extended by mutual consent of the parties.
13.9. Review of the Agreement. Each party acknowledges
that it has had time to review this agreement and, as desired,
consult with counsel. In the interpretation of this agreement,
no adverse presumption shall be made against any party on the
basis that it has prepared, or participated in the preparation
of, this agreement.
13.10. Schedules. All schedules attached hereto, if any shall
be acknowledged by each party by signature or initials thereon
and shall be dated.
13.11. Effective date. This effective date of this agreement
shall be upon its execution.
Signature Page to Agreement and Plan of Reorganization between
PARA MAS INTERNET, Inc. and the Shareholders of
Lapitos Acquisition Corp.
IN WITNESS WHEREOF, the parties have executed this
agreement.
PARA MAS INTERNET, INC.
By________________________________
/s/ Mike M. Mustafoglu
THE SHAREHOLDERS OF
LAPITOS ACQUISITION CORP.
By________________________________
/s/ Mike M. Mustafoglu
By________________________________
/s/ Mike M. Mustafoglu on behalf of
Transglobal Financial Corp.
Exhibit A
Number of Number of
LAC Shares PMIIE Shares Name of
To be To be Shareholder Address
Exchanged Received
750,000 150 Mike M. Mustafoglu 1800 Century Park East
Suite 600
Los Angeles, CA 90067
4,250,000 850 Transglobal Financial 1800 Century Park East
Corporation Suite 600
Los Angeles, CA 90067
TYPE: EX-23.1
SEQUENCE: 2
DESCRIPTION: CONSENT OF STEFANOU & COMPANY, LLP
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
TO: Lapitos Acquisition Corporation
As independent certified public accountants, we hereby
consent to inclusion of our report dated February 16, 2000
appearing in the Annual Report on Form 10-KSB of Lapitos
Acquisition Corporation for the year ended December 31, 1999.
/s/ Stefanou & Company,LLP
Stefanou & Company, LLP
McLean, Virginia
April 18, 2000
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
TO: Para Mas Internet, Inc.
As independent certified public accountants, we hereby
consent to inclusion of our report dated April 14, 2000 on our
audit of the financial statements of Para Mas Internet, Inc. for
the year ended June 30, 1999 and 1998.
/s/ Stefanou & Company, LLP
Stefanou & Company, LLP
McLean, Virginia
April 18, 2000
TYPE: EX-27.1 SEQUENCE: 3
DESCRIPTION: FINANCIAL DATA SCHEDULE
ARTICLE: 5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM AQUA VIE BEVERAGE CORPORATION AUDITED STATEMENTS
AS OF JULY 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS. PERIOD TYPE:
YEAR FISCAL YEAR END: JUN-30-1999
PERIOD START: JUL-01-1998
PERIOD END: JUN-30-1999
CASH: 0
SECURITIES: 0
RECEIVABLES: 0
ALLOWANCES: 0
INVENTORY: 0
CURRENT ASSETS: 0
PP&E: 0
DEPRECIATION: 0
TOTAL ASSETS: 0
CURRENT LIABILITIES: 65,875
BONDS: 0
PREFERRED MANDATORY: 0
PREFERRED: 64,200
COMMON: 4,127
OTHER SE: (65,875)
TOTAL LIABILITY AND EQUITY: 0
SALES: 0
TOTAL REVENUES: 0
CGS: 0
TOTAL COSTS: 0
OTHER EXPENSES: 0
LOSS PROVISION: 0
INTEREST EXPENSE: 4,399
INCOME PRETAX: (4,399)
INCOME TAX: 0
INCOME CONTINUING: (4,399)
DISCONTINUED: 0
EXTRAORDINARY: 0
CHANGES: 0
NET INCOME: (4,399)
EPS BASIC: (0.00)
EPS DILUTED: (0.00)
