U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-SB
General form for registration of securities of small business
issuers Under Section 12(b) or (g) of the Securities Exchange Act of 1934
Paramount Services Corp.
(Name of Small Business Issuer in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
98-0204758
(I.R.S. Employer Identification No.)
Suite 1650, Waterfront Centre, 200 Burrard Street,
Vancouver, British Columbia, Canada V6C 3L6
(Address of principal executive offices) (Zip Code)
(604) 689-3355
(Issuer's telephone number)
Securities to be registered under Section 12(b) of the Act: _
Securities to be registered under Section 12(g) of the Act: [X]
Title of each class to be so registered: Common Stock
Name of each exchange on which each class is to be registered:
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To simplify the language in this Registration Statement, Paramount Services
Corp. is referred to herein as "We," the "Company," or the "Corporation."
Item 1. Description of Business.
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Business Development.
We were incorporated as Internet International Communications Ltd. in the State
of Delaware on December 18, 1997. On May 7, 1999, we changed our name to
Paramount Services Corp.
On January 9, 1998, we entered into an agreement and plan of merger with
Internetcom, Inc. ("Internetcom"). Internetcom was incorporated on December 10,
1997 in the State of Colorado. Internetcom was merged into us, and we were the
surviving company (the "Plan of Merger"). All outstanding shares of Internetcom
were canceled pursuant to the Plan of Merger. We issued one share of our common
stock to each shareholder of Internetcom's common stock providing for a total
issuance of 5,175,456 shares of our common stock to Internetcom's former
shareholders.
On May 7, 1999, we did a reverse stock split of our common stock. In our reverse
stock split, each of our shareholders exchanged every two issued shares of our
common stock for one newly issued share of our common stock.
We have not been involved in any bankruptcy, receivership or similar proceeding.
We have not been involved in any material reclassification, merger
consolidation, or purchase or sale of a significant amount of assets not in the
ordinary course of business.
Business of Issuer.
Other than issuing shares to our shareholders, we have not commenced any
operational activities. Internetcom had not conducted any business prior to the
Plan of Merger other than the raising of equity capital and issuance of shares
of its common stock.
We can be defined as a "shell" company whose sole purpose at this time is to
locate and consummate a merger or acquisition with an unidentified private
entity (hereinafter referred to as the "business opportunity").
We have no obligation to file a registration statement pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). We are
registering a class of our securities on this Form 10-SB registration statement
on a voluntary basis. We believe that by filing such Form 10-SB and being
obligated to file reports subject to Section 13 of the Exchange Act, we can
attract a business opportunity candidate. We believe a business opportunity will
involve a transaction with a corporation not requiring cash or assets but which
desires to establish both a public market for their common stock and the
perceived advantages of status as an Exchange Act registered corporation. There
is no assurance that our assumption is correct.
Competition.
We will be at a competitive disadvantage in identifying possible business
opportunities and successfully completing a business opportunity. A large number
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of established and well-financed entities, including venture capital firms, are
active in mergers and acquisitions of companies which may be desirable target
candidates for us. These entities have significantly greater experience and
financial resources, technical expertise and managerial capabilities.
We have no patents, trademarks, licenses, franchises, concessions, royalty
agreements or labor contracts.
Government Regulation.
The proposed business activities described herein classify us as a "Blank Check"
company. Many states have enacted statutes, rules and regulations limiting the
sale of securities of "blank check" companies in their states. We do not intend
to undertake any offering of our securities, either debt or equity, until such
time as we have successfully implemented our business plan described herein.
Transferability of the shares of our common stock is very limited because a
significant number of states have enacted regulations or "blue sky" laws
restricting or, in many instances, prohibiting, the initial sale and subsequent
resale of securities of "blank check" companies, such as ours, within that
state. In addition, many states, while not specifically prohibiting or
restricting securities of "blank check" companies, would not register our
securities for sale or resale in their states. Because of these regulations, we
currently have no plan to register any of our securities in any state. To ensure
that state laws are not violated through the resale of our securities, we will
refuse to register the transfer of any of our securities to residents of any
state which prohibits such resale if no exemption is available for such resale.
We do not anticipate that a secondary trading market for our securities will
develop in any state until subsequent to consummation of a business opportunity,
if at all.
Although we will be subject to regulation under the Exchange Act, we believe
that we will not be subject to regulation under the Investment Company Act of
1940, as we will not be engaged in the business of investing or trading in
securities.
Federal and state tax consequences will likely be major considerations in any
business opportunity that we may undertake. Currently, such transactions may be
structured so as to result in tax-free treatment to both parties to the
transaction, pursuant to various federal and state tax provisions. We intend to
structure any business opportunity so as to minimize the federal and state tax
consequences to both ourselves and the target entity; However, there can be no
assurance that a business opportunity 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 may have
an adverse effect on both parties to the transaction.
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Sections 13 and 15(d) of the Exchange Act require companies subject thereto to
provide certain information about significant acquisitions, including certified
financial statements for the company acquired, covering one, two or three years,
depending on the relative size of the acquisition. The time and additional costs
that may be incurred by some target entities to prepare such statements may
preclude our consummation of a business opportunity. Acquisition prospects that
do not have or are unable to obtain the required audited financial statements
may not be available for a business opportunity as long as the reporting
requirements of the Exchange Act are applicable.
We have not conducted, nor have others made available to us, results of market
research indicating that market demand exists for the transactions contemplated
by us. Moreover, we do not have, and do not plan to have, and do not plan to
establish, a marketing organization. Even in the event demand is identified for
a business opportunity contemplated by us, there is no assurance that we will be
successful in completing any such business opportunity.
We currently have no full or part-time employees. We have no collective
bargaining agreements or employment agreements in existence. Andrew Hromyk is
our sole officer and director. Mr. Hromyk is involved in other full-time
business activities. Mr. Hromyk participates in the running of the Company on a
part-time basis as needed without compensation. We do not plan to make any
change in the number of our employees in order to evaluate business
opportunities. The need for employees and their availability will be addressed
in connection with the decision whether or not to pursue a business opportunity.
Item 2. Plan of Operation.
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We have never had operations. In the next twelve months, we plan to seek out
business opportunity candidates. We believe that this plan of operations will be
conducted through the efforts of our current management and will not require any
additional funds or personnel. We anticipate that business opportunities will be
available to us through the contacts of our management. We anticipate that the
investigation of specific business opportunities and the negotiation, drafting
and execution of relevant agreements, disclosure documents and other instruments
will be done by our management or under their direction. Management will
investigate, to the extent they believe reasonable, such potential business
opportunities. Due to management's limited experience in business analysis, they
may not discover or adequately evaluate adverse facts about the business
opportunity to be acquired.
Since we will have no funds available to us in our search for business
opportunities, we will not be able to expend significant funds on a complete
investigation of a business opportunity. We anticipate that we will incur
nominal expenses in the implementation of our business plan described herein.
Because we have no capital with which to pay these expenses, our present
management will pay any charges with their personal funds, as interest free
loans to the Company. However, the only opportunity that we will have to repay
these loans is from a prospective business opportunity. Our management has
agreed that the repayment of any loans made on our behalf will not impede or be
made conditional in any manner, to consummation of a proposed transaction.
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We have no particular business opportunity in mind and have not entered into any
negotiations regarding any business opportunity. None of our management,
affiliates or any promoters have engaged in any preliminary contact or
discussions with any representative of any other company regarding the
possibility of a business opportunity between us and such other company as of
the date of this registration statement.
We will not restrict our search to any specific business, industry, or
geographical location, and we may participate in a business opportunity of
virtually any kind or nature. This discussion of the proposed business is
purposefully general and is not meant to be restrictive of our virtually
unlimited discretion to search for and enter into potential business
opportunities. We anticipate that we may be able to participate in only one
potential business opportunity because we have no assets and limited financial
resources. To date, we have not developed any criteria for the selection of
business opportunities.
We will seek to expand through acquisitions entailing risks which are not
currently identified, and which you will not have a basis to evaluate. We may
seek to expand our operations by acquiring companies in businesses that we
believe will complement or enhance our company. We cannot assure you that we
will be able to ultimately effect any acquisition, successfully integrate any
acquired business in our operations or otherwise successfully develop our
operations. We have not established any minimum criteria for any acquisition and
our management may have complete discretion in determining the terms of any
acquisition. Consequently, there is no basis for you to evaluate the specific
merits or risks of any potential acquisition that we may undertake. We
anticipate that our management will investigate, to the extent believed
necessary, the business opportunity.
Due to general economic conditions, rapid technological advances being made in
some industries and shortages of available capital, our management believes that
there are numerous firms seeking the perceived benefits of a fully reporting
public company. Such perceived benefits may include facilitating or improving
the terms on which additional equity financing may be sought, providing
liquidity for incentive stock options or similar benefits to key employees,
providing liquidity (subject to restrictions of applicable statutes) for all
shareholders and other factors.
Potentially, available business opportunities may occur in many different
industries and at various stages of development, all of which make the task of
comparative investigation and analysis of such business opportunities extremely
difficult and complex. We do not have and will not have capital to provide the
owners of business opportunities with any significant cash or other assets.
However, we believe we can offer owners of acquisition candidates the
opportunity to acquire a controlling ownership interest in a publicly registered
company without incurring the cost and time required to become a fully reporting
company. The owners of the business opportunities will, however, incur
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significant legal and accounting costs in connection with acquisition of a
business opportunity, including the costs of preparing Form 8-Ks, 10-Ks or
10-KSBs, agreements and related reports and documents. The Exchange Act
specifically requires that any merger or acquisition candidate comply with all
applicable reporting requirements, which include providing audited financial
statements to be included within the numerous filings relevant to complying with
the Exchange Act. Nevertheless, our management has not conducted market research
and is not aware of statistical data which would support the perceived benefits
for the owners of a business opportunity.
We believe that there is a demand by non-public corporations for shell
corporations that have a public distribution of securities, such as our Company.
We believe that demand for shells has increased dramatically since the
Securities and Exchange Commission imposed burdensome requirements on "blank
check" companies pursuant to Regulation 419 of the Securities Act of 1933 (the
"Act"). The foregoing regulation has substantially decreased the number of
"blank check" offerings filed with the Commission and, as a result, has
stimulated an increased demand for "shell" corporations. We have made the
foregoing assumption, but there is no assurance that the same is accurate or
correct and accordingly, no assurance can be made that we will be successful in
locating a business opportunity.
Prior to making a decision to recommend a business opportunity, we plan to
request that we be provided with written materials regarding the business
opportunity containing such items as a description of products, services and
company history; management resumes; financial information; available
projections with related assumptions upon which they are based; evidence of
existing patents, trademarks or services marks or rights thereto; present and
proposed forms of compensation to management; a description of transactions
between the prospective entity and its affiliates during relevant periods; a
description of present and required facilities; an analysis of risk and
competitive conditions; and, other information deemed relevant.
Upon the consummation of a transaction, we anticipate that our present
management and shareholders will no longer be in control of the Company. In
addition, our director may, as part of the terms of the business opportunity,
resign and be replaced by new directors without a vote of our shareholders.
We do not plan to raise any capital at the present time, by private placement,
public offerings, pursuant to Regulation S promulgated under the Act, as
amended, or by any means whatsoever. Further, we have no plans, proposals,
arrangements or understandings with respect to the sale or issuance of
additional securities prior to the location of a business opportunity.
We anticipate that any securities issued in any such business opportunity would
be issued in reliance upon exemptions from registration under applicable federal
and state securities laws. In some circumstances, however, as a negotiated
element of our transaction, we may agree to register all or a part of such
securities immediately after the transaction is consummated or at specified
times thereafter. If such registration occurs, of which there can be no
assurance, it will be undertaken by the surviving entity after we have
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successfully consummated a business opportunity, and we are no longer considered
a "shell" company. Until such time as this occurs, we will not attempt to
register any additional securities. The issuance of a substantial amount of
additional securities and their potential sale into any trading market which may
develop for our securities, may have a depressive effect on the value of our
securities in the future, if such a market develops, of which there is no
assurance. The completion of any business opportunity may result in a
significant issuance of shares and substantial dilution to our present
stockholders.
We do not plan to make any changes in the number of our employees.
Item 3. Description of Property.
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We have no material assets and, as such, we neither own nor lease any real or
personal property. We currently operate out of space without charge located at
Suite 1650, Waterfront Centre, 200 Burrard Street, Vancouver, British Columbia,
Canada which is leased by a company controlled by our management. The leased
space is a total of 2900 square feet of space, of which a small portion is used
by us when needed. We believe that this space is sufficient at this time.
We have no preliminary agreements or understandings with respect to the office
facility subsequent to the completion of a business opportunity. Upon closure of
a business opportunity, we plan to relocate our office to that of the business
opportunity candidate.
We have no policy with respect to investments in real estate or interests in
real estate and no policy with respect to investments in real estate mortgages.
Further, we have no policy with respect to investments in securities of or
interests in persons primarily engaged in real estate activities.
We do not intend to have any materially important properties. We are not subject
to any competitive conditions for property and currently have no property to
insure.
Item 4. Security Ownership of Certain Beneficial Owners and Management.
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As of May 18, 1999 there were 2,587,778 shares of our common stock, $0.0001 par
value outstanding. The following tabulates holdings of shares of the Company by
each person who, as of May 18, 1999, holds of record or is known by us to own
beneficially more than 5.0% of our common shares and, in addition, by all of our
directors and officers individually and as a group. Each named beneficial owner
has sole voting and investment power with respect to the shares set forth
opposite his name.
Security Ownership of Beneficial Owners(1)(3):
Title of Class Name & Address Amount Nature Percent
- -------------- -------------- ------ ------ -------
Common Stock Bona Vista West Ltd.(2) 2,571,057 Direct 99.35%
P.O. Box 62
2001 Leeward Highway
Providenciales
Turks & Caicos Islands, BWI
Page 7
Security Ownership of Management(3): none
(1) Pursuant to Rule 13-d-3 under the Securities Exchange Act of 1934, as
amended, beneficial ownership of a security consists of sole or shared voting
power (including the power to vote or direct the voting) and/or sole or shared
investment power (including the power to dispose or direct the disposition) with
respect to a security whether through a contract, arrangement, understanding,
relationship or otherwise. Unless otherwise indicated, each person indicated
above has sole power to vote, or dispose or direct the disposition of all shares
beneficially owned, subject to applicable unity property laws.
(2) Bona Vista West Ltd. is a corporate body formed pursuant to the laws of the
British West Indies. The sole officer, director and shareholder of Bona Vista
West Ltd. is Andrew Meade.
(3) This table is based upon information obtained from our stock records. Unless
otherwise indicated in the footnotes to the above table and subject to community
property laws where applicable, we believe that each shareholder named in the
above table has sole or shared voting and investment power with respect to the
shares indicated as beneficially owned.
Change of Control.
There are currently no arrangements, which would result in a change of control
of the Company. A business opportunity involving the issuance of our common
shares will, in all likelihood, result in shareholders of a private company
obtaining a controlling interest in our Company. Any such business opportunity
may require our existing shareholders to sell or transfer all or a portion of
our common shares held by them. Members of our Board of Directors may also have
to resign.
Item 5. Directors, Executive Officers, Promoters and Control Persons.
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Andrew Hromyk, 33 years of age, is our only director. Mr. Hromyk has served in
this capacity with the Company since January 9, 1998 and his term expires at the
next annual meeting declared by our Board of Directors when successors are
elected and qualified.
Mr. Hromyk has been an officer and director of Americlean, Inc. since March
1997. Americlean, Inc. sells laundry and dry cleaning supplies and equipment to
customers in North Carolina, South Carolina, Virginia, Tennessee, Georgia, and
Florida. Since July 1995, Mr. Hromyk has been the President and a director of
American Western Canada Ltd., Americlean, Inc.'s predecessor. Since November
1993, Mr. Hromyk has been the President of Century Capital Management Ltd., a
financial and business consulting firm located in Vancouver, British Columbia.
From September 1995 through March 1996, Mr. Hromyk was the Vice President of
Canadian Solvent Recovery Ltd. In addition, Mr. Hromyk has held positions from
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time to time in various other private companies over the past five years. From
1984 through 1989, Mr. Hromyk studied Economics at the University of Hawaii and
the University of British Columbia.
We currently have no significant employees and none are anticipated. There are
no family relationships among our directors, executive officers, or nominees for
such positions. Our director and executive officer, promoters or control persons
have not been involved in any legal proceedings material to the evaluation of
the ability or integrity of any of the aforementioned persons.
Item 6. Executive Compensation.
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Name Position Year Salary Bonus Other Stock Options L/TIP All Other
- ---- -------- ---- ------ ----- ----- ----- ------- ----- ---------
Andrew Hromyk, President 1999 0 0 0 0 0 0 0
Item 7. Certain Relationships and Related Transactions.
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A company controlled by our director, Andrew Hromyk, has made loan advancements
in the amount of $6,310.00 to us. Such loans are without interest or stated
terms of repayment. Other than the aforementioned, we have not entered into and
do not intend to enter into any transactions with our management or any nominees
for such positions. We have not entered into and do not intend to enter into any
transactions with beneficial owners of the Company. We are not a subsidiary of
any parent company. Since inception, we have not entered into any transactions
with promoters.
Our management is involved in other business activities and may, in the future
become involved in other business opportunities. If a specific business
opportunity becomes available, our management may face a conflict in selecting
between the Company and their other business interests. We have not formulated a
policy for the resolution of such conflicts.
Since inception, we have not entered into and do not intend to enter into any
transactions with directors, executive officers, or any nominees for such
positions in the Company. We have not entered into and do not intend to enter
into any transactions with beneficial owners of the Company.
Item 8. Legal Proceedings.
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We are not a party to any pending legal proceeding. We are not aware of any
contemplated legal proceeding by a governmental authority involving the Company.
Item 9. Market Price of and Dividends on the Registrant's Common Equity and
- ---------------------------------------------------------------------------
Other Shareholder Matters.
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There is no established public trading market for our securities. None of the
Company's Common stock is subject to outstanding options or warrants to purchase
shares of the Company.
There are 2,571,057 restricted shares of our common stock held by Bona Vista
West Ltd. which is controlled by Andrew Meade, an affiliate, and the remaining
16,721 shares of common stock held by non-affiliates. The restricted securities
Page 9
as defined under Rule 144 of the Securities Act may only be sold under the Rule
or otherwise under an effective registration statement or an exemption from
registration, if available. Rule 144 generally provides that a person who has
satisfied a one year holding period for the restricted securities may sell,
within any three month period subject to certain manner of resale provisions, an
amount of restricted securities which does not exceed the greater of 1% of a
company's outstanding common stock or the average weekly trading volume in such
securities during the four calendar weeks prior to such sale. For all of the
outstanding restricted common stock shares, the one year holding period has
expired. A sale of shares by such security holders, whether under Rule 144 or
otherwise, may have a depressing effect upon the price of our common stock in
any market that might develop.
Under Rule 144, Directors, Executive Officers and persons or entities they
control or who control them may sell shares of common stock in any three-month
period in an amount limited to the greater of 1% of our outstanding shares of
common stock or the average of the weekly trading volume in our common stock
during the four calendar weeks preceding a sale. Sales under Rule 144 must also
be made without violating the manner-of-sale provisions, notice requirements,
and the availability of public information about us.
Blue Sky Considerations.
The laws of some states prohibit the resale of securities issued by blank check
or shell corporations. We are considered a "blank check" or "shell" corporation
for the purpose of state securities laws. Accordingly, it is possible that
current shareholders may be unable to resell their securities in other states.
Additionally, because each state has a series of exempt securities predicated
upon the particular facts of each transaction, it is not possible to determine
if a proposed transaction by an existing shareholder would violate the
securities laws of any particular state. In the event an existing shareholder or
broker/dealer resells our securities in a state where such resale is prohibited,
we believe that the seller thereof may be liable criminally, or civilly under
that particular state's laws. Existing shareholders should exercise caution in
the resale of their shares of common stock in light of the foregoing.
Penny Stock Considerations.
Broker-dealer practices in connection with transactions in penny stocks are
regulated by certain penny stock rules adopted by the Securities and Exchange
Commission. Penny stocks generally are equity securities with a price of less
than $5.00. Penny stock rules require a broker-dealer, prior to a transaction in
a penny stock not otherwise exempt from the rules, to deliver a standardized
risk disclosure document that provides information about penny stocks and the
risks in the penny stock market. The broker-dealer also must provide the
customer with current bid and offer quotations for the penny stock, the
compensation of the broker-dealer and its salesperson in the transaction, and
monthly account statements showing the market value of each penny stock held in
the customer's account. In addition, the penny stock rules generally require
that prior to a transaction in a penny stock, the broker-dealer make a special
written determination that the penny stock is a suitable investment for the
purchaser and receive the purchaser's written agreement to the transaction.
Page 10
These disclosure requirements may have the effect of reducing the level of
trading activity in the secondary market for a stock that becomes subject to the
penny stock rules. Our shares will likely be subject to such penny stock rules
and our shareholders will in all likelihood find it difficult to sell their
securities.
No market exists for our securities and there is no assurance that a regular
trading market will develop, or if developed will be sustained. A shareholder in
all likelihood, therefore, will not be able to resell the securities referred to
herein should he or she desire to do so. Furthermore, it is unlikely that a
lending institution will accept our securities as pledged collateral for loans
unless a regular trading market develops. There are no plans, proposals,
arrangements or understandings with any person with regard to the development of
a trading market in any of our securities.
As of the date of this registration, we had 293 holders of record of our Common
Stock. We currently have one class of common stock outstanding and no preferred
shares outstanding.
We have not paid any dividends since our inception. We have no restrictions that
limit our ability to pay dividends, but we do not anticipate paying dividends in
the near future.
Item 10. Recent Sales of Unregistered Securities.
- -------------------------------------------------
On December 19, 1997, we issued 100 shares of our common stock to Bona Vista
West Ltd. in exchange for $10.00. On January 9, 1998, Internetcom, Inc.
("Internetcom") was merged into the Company on the basis of one share of
Internetcom for one share of our common stock. Pursuant to this Plan of Merger,
5,175,456 shares of our common stock were issued. The aforementioned
transactions were made in reliance upon exemptions provided in Regulation D of
the Securities Act of 1933, as amended.
We have never utilized an underwriter for an offering of our securities. Other
than the securities mentioned above, we have not issued or sold any securities.
Item 11. Description of Securities.
- -----------------------------------
Qualification.
The following statements constitute brief summaries of our Articles of
Incorporation and Bylaws, as amended. Such summaries do not purport to be
complete and are qualified in their entirety by reference to the full text of
the Articles of Incorporation and Bylaws.
Common Stock.
Our Articles of Incorporation authorize it to issue up to 30,000,000 Common
Shares, $0.0001 par value per common share. There are currently 2,587,778 shares
of common stock outstanding. All outstanding common shares are legally issued,
fully paid and non-assessable.
Page 11
Preferred Stock.
Our Articles of Incorporation authorize us to issue up to 5,000,000 preferred
shares, $0.0001 par value per preferred share. There are currently no shares of
preferred stock outstanding. Our Articles of Incorporation provide that the
Board of Directors has the authority to divide the Preferred Stock into series
and, within the limitations provided by the Delaware statutes, to fix by
resolution the voting power, designations, preferences and relative
participation, special rights and the qualifications, limitations or
restrictions of the shares of any series so established.
The provisions of our Articles of Incorporation relating to preferred stock
allow our directors to issue preferred stock with multiple votes per share and
dividend rights which would have priority over any dividends paid with respect
to our common stock. The issuance of preferred stock with such rights may make
the removal of management difficult even if such removal would be considered
beneficial to shareholders generally and will have the effect of limiting
shareholder participation in certain transactions such as mergers or tender
offers if such transactions are not favored by incumbent management.
Liquidation Rights.
Upon liquidation or dissolution, each outstanding common share will be entitled
to share equally in our assets legally available for distribution to
shareholders after the payment of all debts and other liabilities.
Dividend Rights.
There are no limitations or restrictions upon the rights of our Board of
Directors to declare dividends, and we may pay dividends on our shares in cash,
property, or our own shares, except when we are insolvent or when the payment
thereof would render us insolvent subject to the provisions of the Delaware
Statutes. We have not paid dividends to date, and it is not anticipated that any
dividends will be paid in the foreseeable future.
Voting Rights.
Holders of our common shares are entitled to cast one vote for each share held
at all shareholders meetings for all purposes.
Other Rights.
Our common shares are not redeemable, have no conversion rights and carry no
preemptive or other rights to subscribe to or purchase additional common shares
in the event of a subsequent offering.
There are no other material rights of the common or preferred shareholders not
included herein. There is no provision in our charter or by-laws that would
delay, defer or prevent a change in control of the Company.
We have not issued debt securities.
Item 12. Indemnification of Directors and Officers.
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Our Articles of Incorporation provide that no director of the Corporation shall
have liability to the Corporation or our stockholders or to any other security
holders for monetary damages for breach of a fiduciary duty as a director;
Page 12
provided, however, that such provisions shall not eliminate or limit the
liability of a director to the Corporation or to our shareholders or other
security holders for monetary damages for: (i) any breach of the director's duty
of loyalty to the Corporation or to our shareholders or other security holders;
(ii) acts or omissions of the director not in good faith or which involve
intentional misconduct or a knowing violation of the law by such director; (iii)
acts by such director as specified by the Delaware Corporation Law; or (iv) any
transaction from which such director derived an improper personal benefit.
No officer or director shall be personally liable for any injury to any person
or property arising out of a tort committed by an employee of the Corporation
giving rise to the injury or unless such officer or director committed a
criminal offense. The protection afforded in the preceding sentence shall not
restrict other common law protections and rights that an officer or director may
have.
At this time, no statute or provision of the by-laws, any contract or other
arrangement provides for insurance or indemnification of a controlling person,
director or officer of the Company which would affect his or her liability in
that capacity.
Item 13. Financial Statements
- ------------------------------
See Item 15(a) below.
Item 14. Changes in and Disagreements with Accountants.
- -------------------------------------------------------
During the two most recent fiscal years, we have had no disagreement,
resignation or dismissal of the principal independent accountant for the
Company. Ernst & Young, LLP has audited our financial statements for the periods
ending April 30, 1998 and 1999.
Page 13
Signatures
- ----------
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
/s/ Andrew Hromyk
------------------
By: Andrew Hromyk
Title: Director
Date: 6/4/99
Page 14
Item 15(a) Financial Statements
-------------------------------
REPORT OF INDEPENDENT AUDITOR
To the Director of
Paramount Services Corp.
We have audited the accompanying balance sheets of Paramount Services Corp.
(formerly Internet International Communications Ltd.) (a development stage
enterprise) as of April 30, 1999 and 1998 and the related statements of
operations, stockholders' equity and cash flows for the year ended April 30,
1999 and for each of the periods from December 18, 1997 (date of incorporation)
to April 30, 1998 and 1999. 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 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 audits 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 Paramount Services Corp. at
April 30, 1999 and 1998, and the results of its operations and its cash flows
for the year ended April 30, 1999 and for each of the periods from December 18,
1997 (date of incorporation) to April 30, 1998 and 1999, in conformity with
accounting principles generally accepted in the United States.
Vancouver, Canada, /s/ Ernst & Young LLP
May 21, 1999. Chartered Accountants
F-1
Paramount Services Corp.
(A development stage enterprise)
BALANCE SHEETS
As at April 30 (expressed in U.S. dollars)
1999 1998
$ $
- ----------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
Accrued liabilities 3,500 --
Due to related party [note 4] 6,310 1,310
- ---------------------------------------------------------------------------------------------------------
Total current liabilities 9,810 1,310
- ---------------------------------------------------------------------------------------------------------
Stockholders' equity
Share capital [note 3]
Common stock - $0.0001 par value
30,000,000 authorized; 2,587,778 issued and outstanding 259 259
Preferred stock - $0.0001 par value
5,000,000 authorized -- --
Additional paid in capital 4,751 4,751
Deficit accumulated in the development stage (14,820) (6,320)
- ---------------------------------------------------------------------------------------------------------
(9,810) (1,310)
- ---------------------------------------------------------------------------------------------------------
-- --
=========================================================================================================
See accompanying notes
On behalf of the Board:
Director
F-2
Paramount Services Corp.
(A development stage enterprise)
STATEMENTS OF OPERATIONS
(expressed in U.S. dollars)
Period from Period from
December 18, December 18,
1997 (date of 1997 (date of
Year ended incorporation) to incorporation) to
April 30, April 30, April 30,
1999 1998 1999
$ $ $
- ----------------------------------------------------------------------------------------------------------
EXPENSES
Professional fees 8,500 6,320 14,820
- ----------------------------------------------------------------------------------------------------------
Loss for the period 8,500 6,320 14,820
Deficit, beginning of period 6,320 -- --
- ---------------------------------------------------------------------------------------------------------
Deficit, end of period 14,820 6,320 14,820
=========================================================================================================
See accompanying notes
F-3
Paramount Services Corp.
(A development stage enterprise)
STATEMENTS OF STOCKHOLDERS' EQUITY
(expressed in U.S. dollars)
Common stock
--------------------------- Additional Deficit accumulated
Number paid in in the development
of shares Amount capital stage Total
--------- ------ ------- ----- -----
$ $ $ $ $
- -----------------------------------------------------------------------------------------------------------------------------------
Issuance of common stock 2,587,778 259 4,751 -- 5,010
Loss for the period -- -- -- (6,320) (6,320)
- -----------------------------------------------------------------------------------------------------------------------------------
Balance, April 30, 1998 2,587,778 259 4,751 (6,320) (1,310)
Loss for the period -- -- -- (8,500) (8,500)
- -----------------------------------------------------------------------------------------------------------------------------------
Balance, April 30, 1999 2,587,778 259 4,751 (14,820) (9,810)
===================================================================================================================================
See accompanying notes
F-4
Paramount Services Corp.
(A development stage enterprise)
STATEMENTS OF CASH FLOWS
(expressed in US dollars)
Period from Period from
December 18, December 18,
1997 (date of 1997 (date of
Year ended incorporation) to incorporation) to
April 30, April 30, April 30,
1999 1998 1999
$ $ $
- ----------------------------------------------------------------------------------------------------------
OPERATING ACTIVITIES
Loss for the period (8,500) (6,320) (14,820)
Changes in operating assets and liabilities:
Accrued liabilities 3,500 -- 3,500
- ---------------------------------------------------------------------------------------------------------
Net cash used in operating activities (5,000) (6,320) (11,320)
- ---------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Proceeds from capital contributions -- 5,010 5,010
Due to related party 5,000 1,310 6,310
- ---------------------------------------------------------------------------------------------------------
Net cash provided by financing activities 5,000 6,320 11,320
- ---------------------------------------------------------------------------------------------------------
Net change in cash during the period,
and cash, end of period -- -- --
=========================================================================================================
See accompanying notes
F-5
1. FORMATION AND BUSINESS OF THE COMPANY
Paramount Services Corp. (the "Company") was incorporated in Delaware on
December 18, 1997 under the name of Internet International Communications Ltd.
pursuant to the laws of Delaware.
Prior to the merger (as defined below), Paramount Services Corp. ("Paramount")
and Internetcom, Inc. ("Internetcom"), a Colorado company, were companies under
common control.
On January 8, 1998, Paramount and Internetcom merged through an exchange of
shares.
The merger has been accounted for in a manner similar to a pooling of interests
and accordingly the financial statements of the Company include the results of
Paramount and Internetcom since their inception, which in the case of Paramount
was December 18, 1997 and Internetcom was December 10, 1997. The share capital
of the Company has been presented giving affect to the exchange of shares from
incorporation.
The Company is a development stage company and has had no activity other than
issuing shares and preparing an initial business plan. Its sole purpose at this
time is to locate and consummate a merger or acquisition with an as yet
unidentified private entity.
2. 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.
F-6
3. SHARE CAPITAL
Holders of the common stock are entitled to one vote per share and to share
equally any dividends declared and distributions in liquidation.
On May 7, 1999, the Company consolidated its share capital by way of a reverse
stock split on the basis of one new common share for each two old common shares.
All outstanding shares in these financial statements have been retroactively
adjusted to reflect this share consolidation.
4. RELATED PARTY TRANSACTIONS
Since incorporation, a company controlled by the director of the Company has
provided administrative services and facilities to the Company for nil
consideration and pays expenses on behalf of the Company. The amount due to this
company is without interest or stated terms of repayment. It is anticipated the
Company will continue to receive non interest bearing advances from this company
to pay for future expenses as incurred.
5. 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.
F-7
Item 15(b) Exhibits
-------------------
INDEX TO EXHIBITS PAGE
- ----------------- ----
Exhibit 1 Underwriting Agreement N/A
Exhibit 2 Plan of Acquisition, Reorganization, Arrangement,
Liquidation, Etc. N/A
Exhibit 3 (a) Articles of Incorporation
(b) By-laws (as amended)
Exhibit 4 Instruments Defining the Rights of Security Holders Above
Exhibit 5 Voting Trust Agreement N/A
Exhibit 6 Material Contracts N/A
Exhibit 7 Letter on Accountant Change N/A
Exhibit 8 Information on Subsidiaries N/A
Exhibit 9 Power of Attorney N/A