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 of 1934 Date of Report (date of earliest event reported): February 7, 2000 PARAMOUNT SERVICES CORP. (Exact name of Registrant as specified in its charter) Delaware 0-26277 98-0204758 (State or other jurisdiction (Commission File No.) (IRS Employer of incorporation) Identification No.) Suite 450, 999 West Hastings Street Vancouver, British Columbia Canada V6C 2W2 (Address of principal executive offices, including Zip Code) Registrant's telephone number, including area code: (604) 633-2556 Suite 1650 Waterfront Centre, 200 Burrard Street Vancouver, British Columbia Canada V6C 3L6 (Former name or former address if changed since last report.) Item 1. Changes in Control of Registrant On February 7, 2000 the Company acquired all of the issued and outstanding shares of Wowtown.com, Inc. in exchange for 5,000,000 shares of the Company's common stock. Wowtown was incorporated on June 9, 1999. Wowtown's principal business activities include establishing web sites and operating and maintaining computer internet web sites for certain cities in the United States and Canada. Wowtown has established its first fully operational website at www.vancouverwow.com. As of January 25, 1999 Wowtown employed three people on a full-time basis. Following the acquisition of Wowtown Andrew Hromyk resigned as the Company's president. The Company's new officers and directors are: Name Position David Packman President and a Director Stephen C. Jackson Secretary and a Director David Jackson Chief Executive Officer and a Director As a result of the acquisition of Wowtown the following persons are the principal shareholders of the Company's common stock. Shares Percentage Name Owned Ownership 595796 B.C. Ltd. 5,000,000 (1) 68% Bona Vista West Ltd. 2,035,700 28% (1 In connection with the acquisition of Wowtown the Company issued 5,000,000 shares of common stock to 595796 B. C. Ltd. The Company's present officers and directors have the following ownership in 595796 B. C., Ltd. Percentage Name Ownership David B. Jackson 25% David Packman 25% Stephen C. Jackson 25% Item 2. Acquisition or Disposition of Assets See Item 1. Item 5. Other Events Concurrent with the acquisition of Wowtown the Company sold 500 shares of its Series A Convertible Preferred stock at a price of $1,000 per share to two investors. Each Series A Preferred Share is convertible into shares of the Company's common stock on or after March 22, 2000. The number of shares of the Company's common stock which will be issued upon the conversion of each Series A Preferred share will be determined by dividing $1,000 by 75% of the average market price of the Company's common stock for the ten trading days immediately prior to the conversion date. Item 7. Financial Statements, Pro Forma Financial Information (a) Financial Statements of Business Acquired (b) Pro Forma Financial Information (c) Exhibits 2 Share Exchange Agreement 4 Certificate of Designation setting forth rights and preferences of the Series A Convertible Preferred 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. Date: February 7, 2000 PARAMOUNT SERVICES CORP. By: /s/ Stephan C. Jackson Stephen C. Jackson Secretary REPORT OF INDEPENDENT AUDITOR To the Director of Wowtown.com Inc. We have audited the accompanying balance sheet of Wowtown.com Inc. (a development stage enterprise) as of October 31, 1999 and the related statements of operations, stockholders' equity and cash flows for the initial period 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 on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provide 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 Wowtown.com Inc. at October 31, 1999, and the results of its operations and its cash flows for the initial period then ended, in conformity with accounting principles generally accepted in the United States. /s/ N.I. Cameron Inc. Vancouver, Canada, CHARTERED ACCOUNTANTS November 24, 1999 Wowtown.com Inc. (a development stage enterprise) Balance Sheet October 31, 1999 ASSETS CURRENT Cash $ 4,787 Deferred charges 3,150 $ 7,937 LIABILITIES AND STOCKHOLDERS' DEFICIT CURRENT LIABILITIES Accounts payable (Note 4) $ 15,332 Notes payable (Note 5) 21,800 Notes payable to related parties (Notes 4 and 5) 18,900 Loans from stockholders (Note 6) 2,499 ----------- 58,531 STOCKHOLDERS' DEFICIT Share capital (Note 3) Common stock - $0.001 par value 50,000,000 authorized; 100 issued and outstanding 1 Preferred stock - $0.001 par value 5,000,000 authorized Deficit accumulated in the development stage (50,595) --------- (50,594) $ 7,937 On behalf of the Board: Director The accompanying notes are an integral part of these financial statements. Wowtown.com Inc. (a development stage enterprise) Statement of Operations For the Initial Period from date of Incorporation June 9, 1999 to October 31, 1999 OPERATING EXPENSES Professional fees $ 859 Office and miscellaneous 3,512 Development expenses (Note 4) 46,224 ------------ LOSS FROM OPERATIONS $ (50,595) =========== The accompanying notes are an integral part of these financialstatements. Wowtown.com Inc. (a development stage enterprise) Statement of Stockholders' Deficit For the Initial Period from date of Incorporation June 9, 1999 to October 31, 1999 Deficit Accumulated Common Stock in the Number of development Shares Amount stage Total ------------------------------------------------- Issuance of common stock 100 $ 1 $ - $ 1 Loss for the period - - (50,595) (50,595) ================================================= Balance October 31, 1999 100 $ 1 $ (50,595) $ (50,594) ================================================= The accompanying notes are an integral part of these financial statements Wowtown.com Inc. (a development stage enterprise) Statement of Cash Flows For the Initial Period from date of Incorporation June 9, 1999 to October 31, 1999 OPERATING ACTIVITIES Loss for the period $(50,595) Add: Changes in non-cash working capital Accounts payable 15,332 ----------- Net cash used in operating activities (35,263) ----------- FINANCING ACTIVITIES Advances from stockholders 2,499 Increase in notes payable 40,700 Issuance of share capital 1 ----------- Net cash provided by financing activities 43,200 ----------- INVESTING ACTIVITIES Increase in deferred charges (3,150) ----------- Net cash used in investing activities (3,150) ----------- NET CHANGE IN CASH DURING THE PERIOD 4,787 CASH AT BEGINNING OF PERIOD - ----------- CASH AT END OF PERIOD $ 4,787 =========== The accompanying notes are an integral part of these financial statements Wowtown.com Inc. (a development stage enterprise) Notes to Financial Statements October 31, 1999 1. FORMATION AND BUSINESS OF THE COMPANY Wowtown.com Inc. (the "Company") was incorporated in Nevada, U.S.A. on June 9, 1999. The Company is a development stage company and its purpose at this time is focused on bringing the Internet from the World Wide Web to an interactive local market, develop advertising resources and community directories. The Company is developing a community of Local Market Internet Portals in major North American centres with further extension into suburbs and neighborhoods. It is a free membership concept for the internet user, creating savings and discounts for the members with the participating local business establishments. There are approximately 1,100 members at this time. 2. SIGNIFICANT ACCOUNTING POLICIES Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. Income taxes The Company uses the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between financial statement and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance in respect of amounts considered by management to be less likely than not of realization in future periods. 3. SHARE CAPITAL Holders of the common stock are entitled to one vote per share and share equally in any dividends declared and distributions on liquidation. Wowtown.com Inc. (a development stage enterprise) Notes to Financial Statements October 31, 1999 4. RELATED PARTY TRANSACTIONS (a) A company controlled by a director of the Company has provided administrative services and facilities to the Company and development expenses at cost. The Company as at October 31, 1999 was indebted in relation to these services are as follows: Notes payable $ 10,600 Accounts payable 2,254 ----------- $ 12,854 (b) A company controlled by three of the stockholders has performed development services for the Company at cost. As at October 31, 1999, the Company was indebted for these services are as follows: Note payable $ 8,300 Accounts payable 2,539 ---------- $ 10,839 The total amount of expenses incurred through services of these related parties are as follows: Administrative $ 3,500 Development expenses 23,445 --------- $ 26,945 5. NOTES PAYABLE Notes payable to unrelated parties amounting to $21,800 do not bear interest and are due and payable on December 31, 1999. Notes payable to related parties amounting to $18,900 do not bear interest and are due and payable on December 31, 1999. Wowtown.com Inc. (a development stage enterprise) Notes to Financial Statements October 31, 1999 6. LOANS FROM STOCKHOLDERS Loans from stockholders are interest-free and have no terms of repayment. 7. YEAR 2000 The Year 2000 Issue arises because many computerized systems use two digits rather than four to identify a year. Date-sensitive systems may recognize the Year 2000 as 1900 or some other date, resulting in errors when information using year 2000 dates is processed. In addition, similar problems may arise in some systems which use certain dates in 1999 to represent something other than a date. The effects of the Year 2000 Issue may be experienced before, on, or after January 1, 2000, and, if not addressed, the impact on operations and financial reporting may range from minor errors to significant systems failure which could affect the Company's ability to conduct normal business operations. It is not possible to be certain that all aspects of the Year 2000 Issue affecting the Company, including those related to the efforts of customers, suppliers, or other third parties, will be fully resolved. PARAMOUNT SERVICES CORP. PRO FORMA FINANCIAL INFORMATION The accompanying pro forma financial information reflects the purchase by Paramount Services Corp. ("Paramount") of all the issued and outstanding shares of WOWtown.com, Inc. ("WOWtown"). The transaction will be accounted for as a reverse purchase acquisition between WOWtown as the acquirer and Paramount as the acquired company. The pro forma financial information presented consists of a condensed income statement for the six-month period ended October 31, 1999 as if the transaction had occurred on May 1, 1999. A pro forma condensed income statement for the year ended April 30, 1999 is not presented as WOWtown was only incorporated on June 9, 1999, so the income statement for the year ended April 30, 1999 would be non-existent. In addition, a pro forma balance sheet as at October 31, 1999 is presented as if the transaction had occurred on October 31, 1999. Pro Forma Condensed Income Statement October 31, 1999 (Unaudited) Historical Statements Paramount WOWtown Adjustments (Note 1) Pro Forma Six Months Period from Period from to Six Month to Period From Six Months Period from Ended December 18,1999 June 9, 1999 Period End December 18, 1997 Ended December 18,1997 October 31, (date of to October 31, to October 31,1999 October 31, (date of 1999 incorporation) October 31,1999 1999 1999 incorporation) to October 31,1999 (Note 2) to October 31,1999 Development $ - $ - $ 46,224 $ - $ - $ $ 46,224 expenses 46,224 Professional fees 5,225 20,045 859 (5,225) (20,045) 859 859 Office and 4,323 4,323 3,512 (4,323) (4,323) 3,512 3,512 administration --------------------------- -------- ------------------------- ------------------------- Net Loss for the Period $(9,548) $ (24,368) $(50,595) $9,548 $ 24,368 $ (50,595) $ 50,959 ============================= ============ ====================== ============================= Loss per share, basic and diluted $ (0.007) =========== Adjusted weighted average number of common shares 7,349,000 issued ==========
Notes to the Pro Forma Condensed Income Statement for the six month period ended October 31, 1999 Note 1 The adjustments above reflect the removal of the historical accounts of Paramount due to the reverse purchase acquisition. Note 2 WOWtown was incorporated on June 9, 1999; therefore the financial figures are for the period from June 9, 1999 to October 31, 1999. Pro Forma Condensed Balance Sheet October 31, 1999 (Unaudited) Historical Statements Adjustments Pro Forma Paramount WOWtown Statement -------------------------------------------------- ASSETS CURRENT Cash $ 929 $ 4,787 $500,000 $ 505,716 Deferred charges - 3,150 - 3,150 ------------------------------------------------ $ 929 $ 7,937 $500,000 $ 508,866 ================================================ LIABILITIES CURRENT Accounts payable $ 900 $15,332 - $ 16,232 Notes payable - 21,800 - 21,800 Notes payable and amounts due to related parties 19,387 18,900 - 38,287 Loans from stockholders - 2,499 - 2,499 ------------------------------------------------ 20,287 58,531 - 78,818 ------------------------------------------------ STOCKHOLDERS' EQUITY (DEFICIT) Common Stock 225 1 (225)(Note 1) 735 500 (Note 1) 10 (Note 2) 224 (Note 3) Preferred Stock - - 1 (Note 4) 1 Additional paid-in capital 4,785 - 499,999 (Note 4) 499,775 (4,785)(Note 1) (224)(Note 3) Deficit accumulated in the (24,368) (50,595) (10)(Note 2) (70,463) development stage (19,858 (Note 1) 24,368 (Note 1) ------------------------------------------------ (19,358) (50,594) 500,000 430,048 ------------------------------------------------ $ 929 $ 7,937 $500,000 $508,866 ================================================ Note 1 This adjustment reflects the reverse purchase acquisition and the issuance of 5,000,000 shares in the transaction. Note 2 This adjustment reflects the issue of 100,000 shares of Paramount as a consulting fee. Note 3 This adjustment reflects the par value of 7,349,000 outstanding common shares of Paramount at $0.0001 per share. Note 4 This adjustment reflects the issue of 500 Paramount preferred shares for $1,000 each.