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
November 1st, 2000
Date of Report
(Date of Earliest Event Reported)
PARA MAS INTERNET, INC.
(Exact Name of Registrant as Specified in its Charter)
7 East Redwood Street, 5th Floor, Baltimore, MD, 21202.
(Address of principal executive offices)
(410) 779-1006
Registrant's telephone number
Nevada 59-3383240
(State of Incorporation) (IRS Employer Identification No.)
This 8K/A is being filed as an amendment to an 8K filed on 11/06/2000
disclosing the acquisition of 68% of Para Mas Internet be International
Bible Games, Inc. Included in this 8K/A are the necessary financials
previously undisclosed in the initial 8K filing. The 8K filed on 11/06/2000
is hereby incorporated by reference in its entirety in this 8K/A.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Business Acquired.
Financial Statements of
INTERNATIONAL BIBLE GAMES INC.
(A Development Stage Enterprise)
(Expressed in Canadian Dollars)
Year ended October 31, 2000
Period from inception on April 11, 1997 through October 31, 2000
INDEPENDENT AUDITORS' REPORT
To the Shareholders of
International Bible Games Inc.
We have audited the balance sheets of International Bible Games Inc. as of
October 31, 2000 and 1999, and the statements of operations, stockholders'
deficiency and cash flows for the years ended October 31, 2000 and 1999 and
for the period from inception on April 11, 1997 through October 31, 2000.
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with Canadian generally accepted
auditing standards and United States generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain
reasonable assurance whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of International Bible Games
Inc. as at October 31, 2000 and 1999 and the results of its operations and
its cash flows for the year ended October 31, 2000 and 1999, and for the
period from inception on April 11, 1997 through October 31, 2000 in
accordance with United States generally accepted accounting principles.
"KPMG LLP"
KPMG LLP
Chartered Accountants
Vancouver, Canada
December 15, 2000
COMMENTS BY AUDITORS FOR U.S. READERS ON CANADA-U.S. REPORTING DIFFERENCE
United States reporting standards for auditors require the addition of an
explanatory paragraph when the financial statements are affected by
conditions and events that cast substantial doubt on the Company's ability to
continue as a going concern, such as those described in note 2 to the
financial statements. Our report to the shareholders dated December 15, 2000
is expressed in accordance with Canadian reporting standards which do not
permit a reference to such events and conditions in the auditors' report
when they are adequately disclosed in the financial statements.
"KPMG LLP"
KPMG LLP
Chartered Accountants
Vancouver, Canada
December 15, 2000
INTERNATIONAL BIBLE GAMES INC
(A Development Stage Enterprise)
Balance Sheets
(Expressed in Canadian Dollars)
October 31, 2000, with comparative figures for 1999
<TABLE>
<CAPTION>
____________________________________________________________________________
2000 1999
_____________________________________________________________________________
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 63,620 $ 179
Accounts receivable 22,728 -
Inventories 66,660 -
__________________________________________________________________________
Total current assets 153,008 179
Equipment:
Computers 5,685 2,194
Computers under capital lease 4,724 4,724
__________________________________________________________________________
10,409 6,918
Less: accumulated depreciation and amortization 3,325 1,038
__________________________________________________________________________
Net equipment 7,084 5,880
_____________________________________________________________________________
Total assets $160,092 $ 6,059
_____________________________________________________________________________
Liabilities and Stockholders' Deficiency
Current liabilities:
Trade accounts payable $121,355 $140,425
Accrued expenses 136,997 41,753
Current instalments of obligations under
capital leases (note 5) 1,581 1,346
Current instalments of long-term debt (note 6) 38,063 -
Current instalments of shareholders'
loans (note 7) 159,862 154,487
________________________________________________________________________
Total current liabilities 457,858 338,011
Convertible debenture (note 8) 456,750 441,390
Obligations under capital leases,
excluding current instalments (note 5) 1,693 3,275
_____________________________________________________________________________
Total liabilities 916,301 782,676
Stockholders' deficiency:
Common stock, without par value.
Authorized: 100,000,000 common shares (note 9)
Issued: 8,924,033 common shares (128,790-1999) 1,241,708 86,543
Share subscriptions received (note 9) - 621,096
Deficit accumulated during the development
stage (1,997,917) (1,484,256)
___________________________________________________________________________
Total stockholders' deficiency (756,209) (776,617)
Future operations (note 2)
Commitments and contingency (note 13)
Subsequent event (note 16)
_____________________________________________________________________________
Total liabilities and stockholders' deficiency $ 160,092 $ 6,059
_____________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
INTERNATIONAL BIBLE GAMES INC.
(A Development Stage Enterprise)
Statements of Stockholders' Deficiency
(Expressed in Canadian Dollars)
<TABLE>
<CAPTION>____________________________________________________________________________________________________
Deficit
Share accumulated Total
Common Stock subscription during the stockholders'
Number Amount received development stage deficiency
_____________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Net loss, period from April 11,
1997 to November 23, 1997 - $ - $ - $ (181,917) $ (181,917)
Common shares:
Issued for cash 100 25 - - 25
Fully paid share subscriptions
received (note 8) - - 191,246 - 191,246
Share issuance costs - - (500) - (500)
_____________________________________________________________________________________________________
Balance, November 23, 1997 100 25 190,746 (181,917) 8,854
Net loss - - - (588,685) (588,685)
Common shares:
Issued on
November 24, 1997
at $0.75 per share 16,670 12,503 (12,503) - -
Issued on
November 24, 1997
at $0.25 per share 20,000 5,000 (5,000) - -
Issued for cash on
March 18, 1998
at $0.75 per share 13,340 10,005 (10,005) - -
Fully paid share subscriptions
received (note 8) - - 359,382 - 359,382
Share issuance costs - - (14,875) - (14,875)
___________________________________________________________________________________________________
Balance, October 31, 1998 50,110 27,533 507,745 (770,602) (235,324)
Net loss - - - (713,654) (713,654)
Common shares:
Issued on January 20, 1999
at $0.75 per share 26,670 20,003 (20,003) - -
Issued on April 23, 1999
at $0.75 per share 12,000 9,000 (9,000) - -
Issued on August 27, 1999
at $0.75 per share 26,670 20,002 (20,002) - -
Issued on October 28, 1999
at $0.75 per share 13,340 10,005 (10,005) - -
Fully paid share subscriptions
received (note 8) - - 183,289 - 183,289
Share issuance costs - - (13,428) - (13,428)
Conversion of promissory note - - 2,500 - 2,500
____________________________________________________________________________________________________
Balance, October 31, 1999 128,790 86,543 621,096 (1,484,256) (776,617)
</TABLE>
INTERNATIONAL BIBLE GAMES INC.
(A Development Stage Enterprise)
Statements of Operations
(Expressed in Canadian Dollars)
<TABLE>
<CAPTION>
____________________________________________________________________________________________________
Period from
inception on
Year April 11
ended Year ended 1997 through
October 31, October 31, October 31,
2000 1999 2000
____________________________________________________________________________________________________
<S> <C> <C> <C>
Revenue $ 18,887 $ - $ 18,887
Cost of goods sold 12,679 - 12,679
____________________________________________________________________________________________________
Gross profit 6,208 - 6,208
Expenses (income):
Automotive 7,823 7,919 27,355
Bank charges 1,521 410 2,527
Depreciation and amortization 2,288 1,038 3,326
Financing costs (note 11) - - 158,540
Foreign exchange losses (gains) 20,735 (7,518) 13,217
Licenses, dues and fees 423 - 884
Office and general 13,048 7,569 28,059
Professional fees 45,781 13,654 86,991
Rent 3,600 3,600 15,135
Research and development 283,710 677,908 1,512,769
Settlement of lawsuit (note 9) 125,000 - 125,000
Telephone 3,394 3,195 11,897
Travel 12,546 5,879 18,425
_________________________________________________________________________________________________
519,869 713,654 2,004,125
____________________________________________________________________________________________________
Net loss $ 513,661 $ 713,654 $ 1,997,917
____________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<TABLE>
INTERNATIONAL BIBLE GAMES INC.
(A Development Stage Enterprise)
Statements of Stockholders' Deficiency
(Expressed in Canadian Dollars)
<CAPTION>
____________________________________________________________________________________________________
Deficit
Share accumulated Total
Common Stock subscriptions during the stockholders'
Number Amount received development stage deficiency
_____________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Balance, October 31, 1999 128,790 $ 86,543 $ 621,096 $ (1,484,256) $ (776,617)
Net loss - - - (513,661) (513,661)
Fully paid share subscriptions
received (note 8) - - 447,834 - 447,834
Share issuance costs - - (9,929) - (9,929)
Issued on September 27, 2000:
At $0.001 6,000,000 6,000 - - 6,000
Share subscriptions
converted (note 9) 2,572,048 1,125,036 (1,044,734) - 80,302
For services rendered at
$0.25 per share 5,863 1,466 - - 1,466
In lieu of commissions at
$0.75 per share 40,000 30,000 - - 30,000
As a bonus at $0.25 per
share 40,000 10,000 - - 10,000
Issued on October 31, 2000:
Share subscriptions
converted (note 9) 137,332 52,999 (52,999) - -
Cost incurred related to
converted share subscriptions - (38,732) 38,732 - -
Stock issued in lieu of
commissions and therefore
netted against share capital - (30,000) - - (30,000)
Share issued costs - (1,604) - - (1,604)
________________________________________________________________________________________________
Balance, October 31, 2000 8,924,033 1,241,708 - (1,997,917) (756,209)
________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
INTERNATIONAL BIBLE GAMES INC.
(A Development Stage Enterprise)
Statements of Cash Flows
(Expressed in Canadian Dollars)
<TABLE>
<CAPTION>
_______________________________________________________________________________________________
Period from
inception on
Year April 11,
ended Year ended 1997 through
October 31, October 31, October 31,
2000 2000 2000
________________________________________________________________________________________________
<S> <C> <C> <C>
Cash flows from operating activities $ (513,661) $ (713,654) $ (1,997,917)
Net loss
Items not affecting cash:
Depreciation and amortization 2,288 1,038 3,325
Foreign exchange loss (gain) 20,735 (7,518) 13,217
Financing costs - - 158,540
Acquisition of DTG Marketing Inc. (note 4) - - 181,000
Deferred development costs 11,466 - 11,466
Changes in non-cash working capital:
Due from director - 7,060 -
Accounts receivable (22,728) - (22,728)
Inventory (66,660) - (66,660)
Trade accounts payable (19,070) 105,418 121,355
Accrued expenses 95,244 (3,071) 136,997
________________________________________________________________________________________________
Net cash used in operating activities (492,386) (610,727) (1,461,405)
Cash flows from investing activities:
Purchase of property and equipment (3,492) (2,194) (5,685)
______________________________________________________________________________________________
Net cash used in investing activities (3,492) (2,194) (5,685)
Cash flows from financing activities:
Proceeds from issuance of promissory
notes payable - - 2,500
Proceeds from issuance of share subscriptions - 124,279 307,859
Share subscription costs (11,533) (13,428) (40,336)
Proceeds from issue of long-term debt 38,063 - 200,068
Principal payments under capital
lease obligations (1,347) (103) (1,450)
Proceeds from issuance of common stock 534,136 59,010 620,679
Proceeds from issuance of convertible
debenture - 441,390 441,390
_____________________________________________________________________________________________
Net cash provided by financing activities 559,319 611,148 1,530,710
_______________________________________________________________________________________________
Net increase (decrease) in cash 63,441 (1,773) 63,620
Cash and cash equivalents, beginning of period 179 1,952 -
_______________________________________________________________________________________________
Cash and cash equivalents, end of period $ 63,620 $ 179 $ 63,610
_______________________________________________________________________________________________
Supplemental informtion (note 10)
See accompanying notes to financial statements.
</TABLE>
INTERNATIONAL BIBLE GAMES INC.
(A Development Stage Enterprise)
Notes to Financial Statements
(Expressed in Canadian Dollars)
1. Description of business:
International Bible Games Inc. ("International") was originally incorporated
on April 11, 1997 under the laws of British Columbia. Effective November 24,
1997, International and D.T.G. Marketing Inc. ("DTG"), a company with common
shareholders, originally incorporated as 671939 Alberta Ltd. on October 19,
1995 under the laws of Alberta, amalgamated to form a new company, also named
International Bible Games Inc. (the "Company"). Under the amalgamation, the
shareholders of International received one common voting share of the Company
for every share held (note 4) and the shareholders of DTG received two
allotted but unissued common voting shares of the Company in exchange for
each of their shares held. After the amalgamation, the former shareholder of
International held all the Company's outstanding common shares. The
Company's primary business activity is the development, marketing and
distribution of family oriented and educational Christian Bible-based board
games and CD ROMs. The Company is considered to be in the development stage
as the Company has not generated any significant revenues and is continuing
to develop its business.
2. Continuing operations:
These financial statements have been prepared by management on a going
concern basis, which assumes the realization of assets and the discharge of
liabilities and commitments in the normal course of business. Certain
conditions, discussed below, currently exist which raise substantial doubt
upon the validity of this assumption. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
The application of the going concern concept is dependent upon the market's
acceptance of the Company's products and services and the Company's ability
to secure sufficient financing to continue development of its business and
ultimately enter into profitable third party distribution agreements. The
company has incurred losses and negative cash flows from operating activities
in each reporting period and at October 31, 2000 had a stockholders' deficit
of $756,209 and an excess of current liabilities over current assets of
$304,850. There can be no assurance that the Company's products and services
will be able to secure market acceptance or that sufficient profitable
distribution agreements will be secured. Continued financial support from
shareholders, related parties and external sources will be required to
continue operations. Management is of the opinion that sufficient working
capital will be obtained from financing and from operations to meet the
Company's liabilities and commitments. Failure to receive sufficient
financing will result in reductions in the Company's operations.
3. Significant accounting policies and practices:
The financial statements have been prepared in accordance with generally
accepted accounting principles in the United States. The significant
accounting policies are as follows;
(a) Cash and cash equivalents:
Cash and cash equivalents include short-term deposits, which are all
highly liquid investments with original maturities of three months or
less when acquired.
(b) Equipment:
Equipment is stated at cost. The cost of computers under capital leases
equals the present value of minimum lease payments. Depreciation and
amortization are calculated using the declining-balance method at the
following annual rates:
________________________________________________________________________
Asset Rate
________________________________________________________________________
Computers 30%
Computers under capital lease 30%
________________________________________________________________________
(c) Research and development costs:
Research and development costs are expensed as incurred.
(d) Income taxes:
Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective
tax bases and operating loss and tax credit carry forwards. Deferred
tax assets and liabilities are measured using enacted tax rates expected
to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on
deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment date.
Deferred tax assets are reduced by a valuation allowance when the
recoverability of the asset is not considered to be more likely than
not.
(e) Use of estimates:
The preparation of the financial statements in conformity with United
States generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the period. Actual results
could differ from those estimates.
(f) Impairment of long-lived assets:
The Company assesses the recoverability of its long-lived assets by
determining whether the carrying value of the long-lived assets can be
recovered over their remaining life through undiscounted future
operating cash flows. The amount of impairment, if any, is measured
based on projected discounted future operating cash flows using a
discount rate reflecting the Company's average cost of funds. The
assessment of the recoverability will be impacted if estimated future
operating cash flows are not achieved. Through the date of these
financial statements, no impairment charges have been recognized.
(g) Translation of foreign currencies:
The functional and reporting currency for the Company is the Canadian
dollar. Exchange gains and losses resulting from the remeasurement of
foreign denomination monetary assets and liabilities in Canadian dollars
are reflected in earnings for the period.
To the date of these financial statements, the Company has not entered
into derivative or other instruments to mitigate the risk of foreign
currency fluctuations.
(h) Stock options:
The Company has granted no stock options to employees or directors of
the Company. The terms of future options and option prices will be
fixed by the directors subject to restrictions imposed by any stock
exchange on which the common shares will be listed for trading. Stock
options granted to employees will be accounted for in accordance with
Accounting Principles Board (APB) Opinion No. 25 "Accounting for Stock
Issued to Employees" and related interpretations, whereby the excess, if
any, of the market value at the date of grant over the exercise price
will be recorded as compensation expense over the vesting period and
recognized. Fully paid share subscriptions or shares provided to non-
employees for services will be recorded at the fair value of the equity
instrument issued.
(i) Inventory:
Inventory is recorded at lower of manufacturing and shipping cost and
net realizable value.
(j) Revenue recognition:
Revenue is recognized when goods are shipped to customers from Company
warehousing facilities.
4. Acquisition of DTG Marketing Inc.:
The amalgamation of International and DTG on November 24, 1997 has been
accounted for by the purchase method with International identified as the
acquirer (see also note 1). DTG Marketing Inc. has raised share capital of
$181,000, all of which had been expended. DTG's obligation to issue shares
was assumed by International on amalgamation. The cost of the acquisition of
DTG was based upon the estimated fair value of the assets acquired of
$181,000.
The purchase price was allocated to the assets and liabilities assumed based
upon their fair values as follows:
In-process research and development $ 181,000
__________________________________________________________________________
Consideration:
Fully paid share subscriptions $ 181,000
__________________________________________________________________________
The portion of the purchase price allocated to in-process research and
development for the Destination, Thee Bible Game was charged to income upon
acquisition and has been included in the research and development expenses
presented for the period from inception on April 11, 1997 through October 31,
2000.
5. Leases:
The Company is obligated under a capital lease for a computer that expires at
August 31, 2002. At October 31, 2000, the gross amount of equipment recorded
under this capital lease was $4,724 and accumulated authorization amounts to
$1,913.
Amortization of assets held under this capital lease is included with
depreciation expense.
Future minimum capital lease payments as of October 31, 2000 are:
_____________________________________________________________________________
Year ending October 31:
2001 $ 1,996
2002 1,830
_____________________________________________________________________________
Total minimum lease payments 3,826
Less: amounts representing interest 552
_____________________________________________________________________________
Present value of net minimum capital lease payments 3,274
Less: current installments of obligations under capital leases 1,581
_____________________________________________________________________________
Obligations under capital leases, excluding current installments $ 1,693
6. Long-term debt:
_____________________________________________________________________________
2000 1999
_____________________________________________________________________________
Unsecured, non-interest bearing United States
currency loan without specific terms of repayment.
The loan outstanding at October 31, 2999 totals
U.S. $25,000 $ 38,063 -
_____________________________________________________________________________
7. Shareholders' loans:
_____________________________________________________________________________
2000 1999
_____________________________________________________________________________
Unsecured, non-interest bearing United States
currency loan due at such time as revenues from
the sale of board games are sufficient to pay such
loans provided repayment does not impair working
capital. The loan outstanding at October 31, 2000
and October 31, 1999 total U.S. $105,000 $159,862 $154,487
_____________________________________________________________________________
8. Convertible debenture:
On April 9, 1999, the Company issued a U.S. $300,000 convertible promissory
note, which was converted to a convertible debenture on April 30, 1999. The
convertible debenture carried with it the right to convert into common
shares in the captial stock of a U.S. company to be incorporated or acquired
by the Company. If the U.S. company is a public company, 300,000 common
shares having an issue price of $1.00 U.S. per share will be issued, subject
to renegotiation of the issue price should this be necessary to comply with
regulatory requirements. The convertible debenture is unsecured and repayable
on demand. If the principal of the loan is not converted to share capital,
interest will accrue on the balance of the loan at 10% per annum. As at
December 15, 2000, the loan had not been converted to common shares. The
debenture holder has expressed the intention to do so once a U.S. company is
so incroporated or acquired.
<TABLE>
9. Stockholders' deficiency:
Share subscriptions received:
All shares susbcriptions have been converted into common shares.
<CAPTION>
____________________________________________________________________________________________________
Share
subscriptions
to DTG Investors Shares at Shares at Share
at prices of subscription subscription Total subscription
$0.01-$0.25 price of $0.25 price of $0.75 shares received
____________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
# # # # #
Received in the period
from April 11, 1997
to November 23, 1997 - 220,000 181,661 401,661 191,246
Share issuance costs - - - - (500)
___________________________________________________________________________________________________
Balance, November 23, 1997 - 220,000 181,661 401,661 190,746
Subscriptions issued on
amalgamation (note 4) 1,100,000 - - 1,100,000 181,000
Received (issued) in the
year ended October 31,
1998, net (20,000) 220,000 134,499 334,499 150,874
Share issuance costs - - - - (14,875)
___________________________________________________________________________________________________
Balance, October 31, 1998 1,080,000 440,000 316,160 1,836,160 507,745
Received in the year
ended October 31, 1999, net - - 165,705 165,705 124,279
Conversion of promissory note - - 3,333 3,333 2,500
Share issuance costs - - - - (13,428)
___________________________________________________________________________________________________
Balance, October 31, 1999 1,080,000 440,000 485,198 2,005,198 621,096
Received in the period
ended July 31, 2000 - - 597,112 597,112 447,834
Share issuance costs - - - - (9,929)
Shares issued on
September 27, 2000 (1,080,000) (340,000) (1,044,978) (2,464,978) (1,044,734)
Shares issued on
October 31, 2000 - (100,000) (37,332) (137,332) (52,999)
Share subscription issued
cost transferred to
issued shares - - - - 38,732
___________________________________________________________________________________________________
Balance, October 31, 2000 - - - - -
___________________________________________________________________________________________________
</TABLE>
Under the amalgamation described in note 1, the former shareholders of DTG
received share subscriptions for 1,100,000 shares in the Company at no
additional cost. In the event the Company files a prospectus in British
Columbia, the Directors of the Company may require the shares to be subject
to pooling restrictions on terms and conditions prescribed by the Board of
Directors in the final prospectus. The subscriber have agreed to abide by
such restrictions imposed upon the shares pursuant to a pooling agreement.
The Company has settled with a former Director to pay him $125,000 over the
three months ended February 28, 2001 in exchange for renunciation of any
alloted shares, consulting fees claimed and the return of 100 common shares
that the Director holds. The shares will be held in trust until the last
payment has been made. Once the shares are returned they will be returned
to the Treasury. The settlement obligation has been expensed in the year
ended October 31, 2000.
<TABLE>
10. Supplementary Information:
<CAPTION>
__________________________________________________________________________________________
Period from
inception on
Year April 11,
ended Year ended 1997 through
October 31, October 31, October 31,
2000 1999 2000
___________________________________________________________________________________________
<S> <C> <C> <C>
Cash paid for:
Interest - - -
Income taxes - - -
Non-cash transactions:
Issuance of fully paid shares provided
in settlement of promissory note 36,269 2,500 38,769
Increase in obligations under computer
capital leaase - 4,724 4,724
Issuance of fully paid share subscriptions - - 181,000
to acquire DTG Marketing Inc.
Issuance of full paid share susbscriptions
financing costs (note 9) - - 158,540
Issuance of common shares for services
rendered 1,466 - 1,466
Issuance of common shares in lieu of
commissions 30,000 - 30,000
Issuance of common shares for bonus 10,000 - 10,000
_____________________________________________________________________________________
</TABLE>
11. Financing costs:
Following the amalgamation with DTG Marketing Inc., certain former investors
of DTG were granted a total of 420,000 share subscriptions in the Company as
consideration for the length of time before repayment of the loan described
in note 6. The value of the fully paid 420,000 shares subscription was
$105,000.
<TABLE>
12. Income taxes:
The tax effects of temporary differences that give rise to significant
deferred tax assets at October 31, 2000 and October 31, 1999 are
approximately as follows:
<CAPTION>
_____________________________________________________________________________
2000 1999
_____________________________________________________________________________
<S> <C> <C>
Deferred tax assets:
Loss carry fowards expiring:
2004 $ 87,000 $ 87,000
2005 195,000 195,000
2006 320,000 320,000
2007 225,000 -
_____________________________________________________________________________
Total gross deferred tax assets 827,000 602,000
Less: valuation allowance (827,000) (602,000)'
_____________________________________________________________________________
Net deferred tax assets $ - $ -
_____________________________________________________________________________
In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred
tax assets will not be realized. The ultimate realization of deferred tax
assets is dependent upon the generation of future taxable income during the
periods in which those temporary difference become deductible. Management
considers the scheduled reversal of deferred tax liabilities, projected
future taxable income, and tax planning strategies in making this assessment.
The amount of deferred tax assets considered realizable could change
materially in the near term based on future taxable income during the carry
forward period.
13. Commitments:
The Company has an exclusive worldwide license from Destination T.B.G.
Development and Marketing Corp. to manufacture, use, distribute, market and
and sell "Destination, Thee Bible Game" pursuant to a license agreement dated
April 11, 1997.
The Company is committed to pay the licensor a U.S. $2 royalty for the first
200,000 games sold in each of the first five years and 15% of the
manufactured cost but not less than U.S. $1 for each game sold over 200,000
per year.
14. Segmented information:
In the opinion of management, the Company operates in the Christian Bible-
based board games and CD ROMs industry. The chief operating decision-making
officer of the Company makes decisions about allocating resources based on
this single operating segment.
Substantially all of the fixed assets of the Company are located in Canada.
15, Related party transactions:
During the year, the Company was charged consulting fees by the directors of
the Company in the amount of $140,000 (October 31,1 999 - $87,600).
16. Subsequent event:
On November 1, 2000, the Company entered into an agreement with Para Mas
Internet Inc., ("Para Mas"), a US public company. Under this agreement, Para
Mas will purchase 100% of the oustanding common shares of the Company in
exchange for common shares in Para Mas on the basis of one share of Para Mas
Internet Inc. for one share of the Company. The net effect will give the
shareholders of the Company control of Para Mas. The Company purchased
30,000,000 issued and outstanding shares of Para Mas for $430,000 US cash
payment. The agreement also provided for cancellation of 10,000,000 of the
common shares on November 1, 2000. The purchase of the common shares was
financed by the issue of a promissory note dated November 1, 2000 for
$430,000 US without fixed terms of repayment and without interest until March
31, 2001. At April 1, 2001, the promissory note holder has the option to
convert to a loan with interest at Royal Bank of Canada prime rate plus 1%
with repayment due March 31, 2002 or to convert the promissory note to common
stock of Para Mas at market price.
As Para Mas is currently inactive, this transaction, if completed as
contemplated, will be accounted for as a recapitalization transaction,
effectively as if the Company had issued common shares to acquire the net
monetary assets of Para Mas.
(b) Pro Forma Financial Information.
Condensed Pro Forma Unaudited Balance Sheet as of October 31, 2000
Condensed Pro Forma Unaudited Statement of Losses as of October 31, 2000
Notes to Condensed Pro Forma Unaudited Financial Statements as of October 31,
2000
</TABLE>
<TABLE>
Para Mas Internet, Inc.
Condensed Pro Forma Unaudited Balance Sheet
(Expressed in U.S. Dollars)
<CAPTION>
<S> <C> <C> <C> <C>
Para Mas International Pro Forma Pro Forma
Bible Adjustments Consoldiated
ASSETS June 30, 2000 October 31, 2000 October 31, 2000
Cash $ - $ 43,751 $ 43,751
Accounts receivable - 15,630 15,630
Inventory - 45,842 45,862
_______ __________ ________
Total current assets - 105,223 105,223
Computers - 7,158 7,158
Less accumulated depreciation - 2,286 2,286
4,872 4,872
_______ __________ ________
$ $ 110,095 $ 110,095
======= ========== ========
LIABILITIES AND DEFICIENCY IN STOCKHOLDER'S EQUITY
LIABILITIES
Accounts payable and accrued
expenses $ 2,169 $ 178,754 $ 180,923
Current installments of long-
term debt - 26,175 26,175
Current installments of
shareholder's loans - 109,937 109,937
Notes Payable 15,000 - (4) 430,000 445,000
_______ _______ _______
Total current liabilities 17,169 314,866 762,035
Convertible deventure - 314,106 314,106
Non Current Obligations under
Capital Leases - 1,164 1,164
DEFICIENCY IN STOCKHOLDERS' EQUITY
Common stock 44,128 853,926 (2) (853,926) 44,128
Preferred stock 68,400 - 68,400
Additional paid-in
capital 1,415,949 - (1) (1,545,646)
(2) 853,926 724,229
Deficit accumulated during (1) 1,545,646
development stage (1,545,646) (1,373,967) (4) (430,000)(1,803,967)
Total deficiency in __________ ___________ __________
Total deficiency in (17,169) (520,041) (967,210)
$ - $ 110,095 $ 110,095
========== =========== ==========
See accompanying notes to pro forma financial information
</TABLE>
<TABLE>
Para Mas Internet, Inc.
CONDENSED PRO FORMA STATEMENT OF LOSSES
Year Ended October 31, 2000
(Expressed in U.S. Dollars)
<CAPTION>
<S> <C> <C> <C> <C>
Para Mas International Pro Forma Pro Forma
From inception Bible Adjustments Consolidated
Year ended Year ended
June 30, 2000 October 31, 2000 October 31, 2000
Revenue $ - $ 12,155 $ 12,155
Cost of goods sold - (8,160) (8,160)
__________ _____________ _____________
Gross profit - 3,995 3,995
Research and development - 182,595 182,595
General and administrative 248,147 151,991 400,138
Organization expenses - - (3) 430,000 430,000
__________ _____________ _____________
Loss before taxes (248,147) (330,591) (1,008,738)
Income (taxes) benefit - - -
__________ _____________ _____________
Net Loss $ (248,147) $ (330,591) $ (1,008,738)
=========== ============= =============
Loss per share: $ (0.00) $ (0.39) $ (0.02)
======== ========== ==========
Weight shares
outstanding 44,127,569 850,282
========== =======
Basic and diluted (restated
and giving effect of re-
capitalizaton) 44,127,569
==========
See accompanying notes to pro forma financial informaton
</TABLE>
Para Mas Internet, Inc.
Notes to Condensed ProForma Unaudited
Financial Statements.
October 31, 2000
The Proforma Unaudited Financial Statements have been prepared in order to
present consolidated financial position and results of operations of Para Mas
Internet, Inc. ("Para Mas") and International Bible Games, Inc.
("International Bible" or "Company") as if the acquisition had occurred as of
November 1, 1999 (date of the beginning of International Bible's fiscal
year). The accompanying Pro-Forma Unaudited Financial Statements are
presented in U.S. dollars.
On November 1, 2000 International Bible completed an Agreement and Plan of
Reorganization ("Agreement") with Para Mas, an inactive publicly-held shell
corporation with no significant assets or operations, in a transaction
accounted for using the purchase method of accounting. As a result of the
acquisition and re-capitalization, there was a change in control of the
public entity.
Effective with the Agreement, 30,000,000 shares of the 44,127,569 of the
shares sisued and outstanding of Para Mas common stock were exchanged for all
of the outstanding common stock of International Bible. The Company recorded
the carryover historical basis of net tangible assets acquired, which did not
differ materially from their fair value. In accordance with Accounting
Principles Opinion No. 16, International Bible is considered the acquiring
entity.
International Bible paid $430,000 for the Para Mas common stock in connection
with this transaction. In accordance with Statement of Position No. 98-5,
the Company expensed, as organization costs, the $430,000 which represents
the excess of the purchase price of Para Mas over the net assets acquired.
The following is a description of the pro forma adjustments that have been
made to the financial statements.
(1) To record the net effect of the acquisition of Para Mas.
The significant components of this re-capitalization transaction are:
Cash paid for stock $ 430,000
Excess of liabilities assumed over
assets acquired 17,169
Issuance of preferred stock 68,400
Issuance of common stock 44,128
_______
Total consideration paid $ 559,697
=========
(2) To record cancellation of 8,924,033 shares of International Bible
(3) To expense as organization costs $ 430,000 paid for the Para Mas
stock acquired by International Bible on November 1, 2000
(4) To record issuance of $ 430,000 promissory note on November 1, 2000
proceeds used to acquire the 30,000,000 shares of Para Mas common
stock
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.
Don McFayden Secretary/Treasurer/Director
Mary Wiens Director
/s/
_________________________________
Don McFayden, Secretary/Treasurer
Date: 01/15/01
/s/
_________________________________
Mary Wiens, Director
Date: 01/15/01
