U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
[X] Annual Report Pursuant To Section 13 Or 15(D) Of The Securities
Exchange Act Of 1934
For the fiscal year ended December 31, 2002
[ ] Transition Report Under Section 13 Or 15(D) Of The Securities
Exchange Act Of 1934
For the transition period from _____ to _____
COMMISSION FILE NUMBER 000-33163
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PARAGON POLARIS STRATEGIES.COM INC.
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(Name of small business issuer in its charter)
NEVADA 76-0609444
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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Suite 1700, 1111 West Georgia Street
Vancouver, British Columbia, Canada V6E 4M3
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(Address of principal executive offices) (Zip Code)
604-681-1754
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Issuer's telephone number
Securities registered under Section 12(b) of the Exchange Act: NONE.
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Securities registered under Section 12(g) of the Exchange Act:
COMMON STOCK, PAR VALUE $0.001 PER SHARE.
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Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]
State issuer's revenues for its most recent fiscal year $NIL
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State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 days. (See definition of affiliate in Rule
12b-2 of the Exchange Act.) $3,940,500, as of March 27, 2003.
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State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date. 12,886,398 SHARES OF COMMON STOCK,
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AS OF MARCH 24, 2003.
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Page 1 of 37
PARAGON POLARIS STRATEGIES.COM INC.
ANNUAL REPORT ON FORM 10-KSB
INDEX
PAGE
PART I
Item 1. Description Of Business. 3
Item 2. Description Of Property. 15
Item 3. Legal Proceedings. 15
Item 4. Submission Of Matters To A Vote Of Security Holders. 15
PART II
Item 5. Market For Common Equity And Related Stockholder Matters. 16
Item 6. Management's Discussion And Analysis Or Plan Of Operation. 17
Item 7. Financial Statements. 19
Item 8. Changes In And Disagreements With Accountants On
Accounting And Financial Disclosure. 27
PART III
Item 9. Directors, Executive Officers, Promoters And
Control Persons; Compliance With Section 16(A) Of
The Exchange Act. 27
Item 10. Executive Compensation. 29
Item 11. Security Ownership Of Certain Beneficial Owners
And Management. 31
Item 12. Certain Relationships And Related Transactions. 32
Item 13. Exhibits And Reports On Form 8-K. 33
Item 14. Controls And Procedures. 34
Page 2 of 37
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
CORPORATE ORGANIZATION
Paragon Polaris Strategies.com Inc. (the "Company") was incorporated in the
State of Nevada on May 27, 1999.
On July 1, 1999, the Company acquired limited rights to distribute and produce
an oxygen enriched water product for fish farming, aquaculture, mariculture,
poultry raising, and for treating animal waste from dairies, feedlots of all
kinds, and for other similar uses. The rights to use this technology were
subsequently withdrawn by agreement with the owner. Paragon Polaris
subsequently acquired a three year license to market and sell vitamins,
minerals, nutritional supplements from Vitamineralherb.com Inc. This business
has been abandoned by the Company.
The Company has entered into an agreement on November 20, 2002 to merge with
Icoworks, Inc. (www.icoworks.com), a Nevada corporation that specializes in
offering a complete array of industrial, oilfield and commercial appraisal,
liquidation and auction services. Under the terms of the merger agreement, the
Company has agreed to issue shares of its common stock to the shareholders of
Icoworks on a two-for-one basis.
The board of directors of the Company also approved a two-for-one split of the
Company's common stock concurrent with the entering into of the merger
agreement. The Company's authorized capital was increased from 25,000,000
shares to 50,000,000 shares of common stock in connection with the stock split.
The Company completed the acquisition of a 56% interest in Icoworks on February
20, 2003 through the private acquisition of 3,593,199 shares of Icoworks from
several non-U.S. shareholders. The Company issued 7,186,398 shares of its
common stock to acquire this interest. The Company plans to complete the merger
with Icoworks as contemplated by the merger agreement. The Company anticipates
issuing an aggregate of 12,886,398 shares in order to complete the acquisition
of all of the outstanding shares of Icoworks, inclusive of the 7,186,398 shares
issued by the Company on February 20, 2003 to acquire the majority 56% interest
in Icoworks. In addition, the Company will issue options and warrants to the
current optionholders and warrantholders of Icoworks on a one-for-one pre-split
basis. The completion of the merger will be subject to approval by the
shareholders of both the Company and Icoworks. The Company will be proceeding
with the filing of a registration statement with the Securities and Exchange
Commission in connection with obtaining shareholder approval of the merger.
The Company has adopted the business name of "Icoworks, Inc." pending completion
of the merger. The Company is seeking the consent of a majority of its
shareholders to the change of its corporate name to "Icoworks Inc.", the
increase to the authorized number of shares of common stock to 100,000,000
shares and the creation of a class of 10,000,000 authorized shares of preferred
stock. Each of these changes will require an amendment to the Company's
articles of incorporation. If shareholder approval is obtained, these changes
are anticipated to be effective approximately April 7, 2003, at the earliest.
The Company does not have any business or subsidiaries other than its 56%
interest in Icoworks.
Page 3 of 37
DESCRIPTION OF ICOWORKS BUSINESS
OVERVIEW OF ICOWORKS
Icoworks is engaged in the asset realization business and is a provider of a
full and comprehensive range of auction, liquidation and appraisal services to
the industrial, oilfield, commercial and office markets. Icoworks' business
operations have historically been based in Calgary, Alberta, Canada and have
recently been expanded to include a subsidiary operation in Oakville, Ontario,
Canada. Icoworks plans to expand its business, both through the expansion of
its traditional auction, liquidation and appraisal services and through the
acquisition of other businesses engaged in the asset realization business that
complement Icoworks' growth strategy. Icoworks also plans to enhance its
traditional services by the use of technology, including the use of live
internet auctions, online internet auctions and technology-assisted auctions, in
order to expand the scope of potential purchasers for its asset realization
business and to facilitate auction transactions.
CORPORATE BACKGROUND
Icoworks was incorporated as a Nevada corporation on February 27, 1998 under the
name "Miracle Living Centers, Inc." The corporate name was changed to
"TradeZap, Inc." on December 8, 2000. The corporate name was subsequently
changed to "Icoworks, Inc." on May 6, 2002 to reflect its current business
operations.
Icoworks acquired all the issued and outstanding common shares of Bill Wigley
Auction Services Ltd. effective December 1, 2001. Bill Wigley Auction Services
Ltd. was subsequently renamed Icoworks Services Ltd. ("Icoworks Services").
Icoworks Services is an Alberta corporation incorporated on January 30, 1987.
Icoworks Services has been in the business of providing auction liquidation
appraisal services to the industrial, oilfield, commercial and office markets in
Calgary, Alberta, Canada since 1987. Icoworks Services is the primary operating
subsidiary of Icoworks in Canada. Icoworks Services has specific expertise in
the oilfield exploration and production sector and is considered to be a leader
in this market. Icoworks Services also participates in all types of industrial
and commercial auctions, appraisals and liquidations. With the acquisition,
Icoworks obtained an up-to-date database of some 65,000 active clients of Bill
Wigley Auction Services with over 100 different interest classifications.
Icoworks Services entered into a three year employment agreement with Mr. Bill
Wigley, the former owner of Icoworks Services on the closing of the acquisition
effective December 1, 2001. Mr. Wigley was also appointed as the vice president
- industrial auctions for Icoworks.
Icoworks purchased DM International Appraisals and Consulting, Ltd. in April
2002 from Mr. Darrell McGrath. DM International Appraisals and Consulting, Ltd.
is an equipment appraisal company that was owned and operated by Mr. McGrath.
Mr. McGrath has in excess of 24 years of experience and has thorough knowledge
of oilfield equipment and other physical assets. The appraisal business of DM
International Appraisals and Consulting Ltd. involves offering accurate,
up-to-date evaluations of physical assets, as well as qualified advice in
determining the useful life of equipment or the cost to materially increase the
value of equipment. On the closing of this acquisition, Icoworks Services
entered into a one year employment agreement with Mr. McGrath pursuant to which
he is paid $9,000 CDN per month. Mr. McGrath is currently the manager of
oilfield services for Icoworks Services.
Icoworks incorporated Icoworks Eastern Limited to conduct its Ontario
operations. Icoworks incorporated Icoworks Services Inc., a Nevada corporation,
on March 14, 2003, to carry out its United States operations. Icoworks
incorporated Icoworks Joint Ventures Inc. to carry out its joint ventures for
bought deals.
INDUSTRY BACKGROUND
Icoworks competes in the industrial and commercial auction, liquidation and
appraisal market. According to the US National Auctioneers Association (the
"NAA"), the commercial auction market in the United States generated in excess
of $267.5 billion in gross sales in 2001. The NAA estimated that there are an
average
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of 600,000 commercial auctions held each year in the United States, by more than
12,000 licensed auctioneers. Bain and Company have estimated the market for the
disposal of corporate assets is approximately $300 billion per year.
The industrial equipment market redistributes factory processing industrial
plants, movable equipment, such as back hoes, excavators, trucks, forklifts and
other construction equipment. Used equipment is sold by equipment
manufacturers, distributors, dealers, equipment brokers, equipment rental
companies and auctioneers. These sources account for the majority of used
equipment sales; however, auctioneers provide the unique service of arranging
for groups of buyers and sellers to convene and to complete transactions. The
NAA estimates that there is approximately $1 trillion in used industrial
equipment currently in operation and that approximately $100 billion worth of
used equipment will trade hands annually. Of this market, the auction industry
currently handles approximately 5% of used industrial equipment sales annually.
Icoworks believes that more used equipment sales will occur through auctions, as
a result of increased acceptance of the auction as a method to sell products.
In addition, Icoworks believes that there has been a growing acceptance of
auctions, especially online auctions, as a low cost and efficient means for
matching buyers and sellers. Accordingly, Icoworks anticipates that the auction
channel will facilitate an increasing share of the used equipment market in the
future.
ICOWORKS' SERVICES
Icoworks provides asset realization services to its customers. These services
primarily involve auction liquidation and appraisal services. The Company's
plan is to increase the scope of its services to include bought deals and other
arrangements where Icoworks would acquire a business interest in the assets
being sold in addition to facilitating the sale of assets.
Auction Services
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Icoworks is primarily involved in the auction business. Icoworks conducts
auctions on behalf of its customers who desire or are required to sell assets.
The range of asset disposition services that Icoworks offers in connection with
its auction services includes the following:
(a) Sales of industrial and commercial assets in commercial and industrial
bankruptcies on behalf of receiver managers and trustees;
(b) Sales of assets seized by sheriffs;
(c) Sales of assets repossessed by creditors under security agreements;
(d) Managed asset removal and settlement transactions;
(e) Private treaty sales for companies;
(f) Sales of assets for consignors.
Valuations And Appraisals
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Icoworks provides valuations and appraisals in connection with its auction and
liquidation services. The appraisal and evaluation process is an important step
in attracting equipment for an auction or liquidation. Most appraisals commence
when Icoworks personnel visit the location of the prospective customer's
equipment. Appraisals tend to be directed towards entire plants and equipment
spreads available because of a bankruptcy, foreclosure, divestiture, abandonment
or relocation process. Appraisals of individual or smaller groupings of
equipment are usually performed for inclusion in a larger auction. In
completing the appraisal process, Icoworks describes each item to be appraised
in a standard format. The equipment description includes information such as
year of manufacture, manufacturer, model, serial number,
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attachments and condition, including references to refurbishing work required to
make each item ready for sale. Photographs are taken of as many of the items as
practical. Icoworks appraisers then assign values to each item of equipment.
Once this initial process is completed, Icoworks appraisers and management
consult to arrive at a final valuation for the prospective customer.
In addition to valuations and appraisals in connection with auctions, Icoworks
consults with financial institutions, public and privately held corporations,
and creditor groups to provide valuations on both a fee for services basis and
as a basis for custom proposals for prospective customers. Members of Icoworks
have consulted as expert witnesses in judicial proceedings relating to the
valuation of assets.
Liquidations
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The Company conducts retail-style liquidations for various clients on either a
fee for service or commission basis. Customers are typically receiver managers,
trustees in bankruptcy or private customers in the process of liquidating
assets.
Icoworks' Specific Industry Experience
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Icoworks' focus is on asset realization of industrial and commercial equipment.
Icoworks has developed specific industry experience in the following areas:
(a) INDUSTRIAL
(1) Plants and factories
(2) Manufacturing
(3) Warehouse and materials handling
(4) Metal stamping and forming
(5) Woodwork and millwork
(6) Food processing
(7) Architectural glass
(8) Spun glass insulation
(9) Windows and doors
(b) OILFIELD
(1) Production and facilities
(2) Drilling and well servicing
(3) Gas plants and refineries
(4) Transmission
(c) COMMERCIAL
(1) Office furnishings
(2) Computers and electronics
(3) Restaurant equipment
(4) Industrial rental
(5) Automotive
(6) Recreational vehicles
(7) Marine
(d) MINING
(1) Extraction: open pit and underground
(2) Milling and concentration
(3) Drilling equipment
Page 6 of 37
(e) FORESTRY
(1) Sawmills and wood products
(2) Shingle mills
(3) Value added processing
(f) CONSTRUCTION
(1) Road construction
(2) Pipeline construction
(3) Building construction
(4) Major project completions (dams, hydro projects, etc.)
(5) Aggregate and crushing
(g) LIQUIDATION
(1) Retail
(2) Wholesale
(3) Manufacturing
(4) Industrial
THE ICOWORKS AUCTION PROCESS
Icoworks typically conducts auctions from its own facilities. Icoworks has a
24,000 square foot facility in Calgary, Alberta, which has historically been the
center of the Company's business operations. Icoworks recently opened a 12,000
square foot office, warehouse and auction arena in Oakville, Ontario to handle
increased demand perceived by Icoworks for Ontario based auctions.
Icoworks will also carry out auctions on-site. On-site auctions are typically
carried out for liquidation of operating plant and facilities auctions where the
assets to be auctioned off are not mobile.
Icoworks' services are designed to provide for the maximum net recovery on
assets sold to its customers. Icoworks provides full services from an initial
review and evaluation through to the final disposal of assets. In completing
auctions, Icoworks prepares asset listings which provide detailed appraisals
based on the in-depth market knowledge of Icoworks staff.
Customers
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Icoworks' services typically begin with an equipment appraisal that gives the
prospective customer a reliable and credible estimate of the value of the
appraisal equipment. Icoworks generally sells equipment on a commission basis
whereby Icoworks receives a straight commission based on a percentage of the
total assets sold. Icoworks is also generally prepared to offer its customers a
choice of a straight commission, a guaranteed minimum return on assets or an
outright purchase. The amount of a minimum guaranteed return on assets or the
price of an outright purchase is based on the Icoworks appraisal of the assets
to be sold and the factoring in of a necessary return on investment for
Icoworks.
In addition to appraisal services, Icoworks coordinates the cleaning, repair and
refurbishment of the equipment to be sold and provides advice to the customer on
how to present equipment in order to maximize the customer's proceeds.
Following the auction, Icoworks collects the purchase price and disburses to the
net proceeds realized from the auction to the customer. Icoworks provides its
customers with a standardized settlement statement showing the sales prices,
commissions and any amounts deducted for refurbishment or other services
authorized by the customer.
Page 7 of 37
Bidders
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Icoworks provides an array of services to make the bidding and purchasing
process convenient for prospective purchasers. Icoworks requires that customers
provide free and clear title of any equipment to be sold in order that Icoworks
can give warranties as to free and clear title to each buyer. Equipment offered
at each auction is available for inspection by prospective buyers before each
auction. Icoworks prepares a detailed item-by-item catalogue for each auction
for customer convenience. The catalogue is delivered to each prospective buyer
upon registration at the auction sale. Other services include information
regarding travel arrangements, expedited check-in procedures, streamlined
paperwork, meeting rooms, facilitating third-party financing and leasing, access
to trucking and freight forwarding, vehicle registration and customs brokerage
services at the auction site.
High Quality Services For Consignors And Bidders
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Icoworks' operations are conducted on a standardized basis in order to provide
customers with the assurance that they will obtain the best return on their
equipment sales and to give bidders the confidence that they will be given the
opportunity to obtain equipment at a fair price. In order to achieve this
objective, Icoworks has adopted fair auction practice standards and attempts to
establish a reputation as a fair dealer. Auction practices used by auctioneers
can vary significantly and may not consider the interests of buyers and sellers
equally. In order to ensure confidence in the auction market, all Icoworks
auctions are unreserved, meaning that there are no minimum prices, and each item
is sold to the highest bidder on the day of the auction. By contract, each
customer is prohibited from bidding on its own items at the auction, or in any
way artificially affecting the result of the auction. In addition, Icoworks
adheres to policies prohibiting its staff from artificially affecting the result
of the auction by bidding on any items in an auction. Icoworks' objective is to
ensure that each bidder has confidence that if he or she makes the highest bid
for an item, it will be sold to that bidder, even if that bid is less than the
item's anticipated sales price. The objective is to ensure increased customer
attendance and an accompanying increase in value received for assets sold at
Icoworks' auctions.
INCORPORATION OF TECHNOLOGY INTO THE ICOWORKS AUCTION PROCESS
Icoworks has undertaken a program to integrate technology into its auction
operations. The objectives of this technology integration are to: (i) increase
the level of customer service that Icoworks delivers to customers; (ii) expand
the scope of bidders that participate in each auction; and (iii) increase the
efficiency of each auction.
Icoworks has developed proprietary software to assist it in managing auction
data and its auction processes. Icoworks' software includes specific electronic
commerce functionality and sophisticated marketing tools, including the
following features:
(a) Detailed item listings and descriptions with multiple pictures of each
item;
(b) Advanced search engine capabilities to lead buyers to items faster;
(c) Content management;
(d) Online e-commerce management;
(e) News and calendars;
(f) Interactive online brochures;
(g) Inventory management;
(h) Auction catalogue development software;
Page 8 of 37
(i) Sophisticated database management tools;
(j) Buyer and prospect list management;
(k) Mailing and e-mailing campaigns;
(l) Broadcast fax services;
(m) Internet traffic and sales analysis;
(n) Site usage and real-time page view analysis;
(o) Foreign languages and currencies, if required.
This software enables Icoworks to distribute auction to prospective bidders with
increased efficiency and breadth of distribution. The advantage to customers is
that Icoworks is able to achieve greater publicity and information on each
auction event.
Online Auctions
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Icoworks has introduced live auctions using BidSpotter webcasting technologies
owned by BidSpotter.com, a private company, with which Icoworks has no relation.
Icoworks uses the BidSpotter technology to broadcast traditional auctions
conducted by Icoworks to interested online bidders. The use of this live
auction internet technology enables Icoworks to broaden the scope of bidders
that are able to participate in Icoworks' auctions. Interested online bidders
who participate using the BidSpotter technology are able to receive a broadcast
of the bidding activity and live audio to their computer via the Internet.
Online bidders have the opportunity to bid against bidders situated on the
auction house floor and are able to follow the progress of each auctioned item.
The use of the live auction internet technology is an opportunity for Icoworks
to reach bidders who may not normally make it to auction sites due to time
constraints or travel limitations. The objective is to increase the potential
sales price of items that Icoworks sells through its auction services.
Icoworks Auction Management System
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Icoworks uses the Sold II Auction Management System. This computer system is a
wireless multi-user auction management system that offers portability via laptop
computers and point-to-point wireless data communication. This computer system
allows Icoworks to run up to five auction rings simultaneously. The computer
system enables Icoworks to deliver customized seller reports detailing items
sold, prices achieved and correspondingly commissions charged immediately upon
the closing of auction sales.
Icoworks Website
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Icoworks has established a website on the internet at www.icoworks.com.
Icoworks uses the website to enable users to view items to be sold at auctions
to be conducted by Icoworks. The website also provides corporate information
and is a means for Icoworks to market its services.
e-Bay Store
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Icoworks maintains a store on the e-Bay website for the conduct of time limited
auctions. Products offered for sale by Icoworks via auction on the e-Bay
website may be viewed by users of the e-Bay website.
Page 9 of 37
MARKETING STRATEGY
Icoworks' marketing strategy includes the following elements:
1. Customer Evaluations Database
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Icoworks maintains a database of more than 200,000 names that has been developed
from Icoworks' prior business activities and associations. This database
includes names of both customers and prospective bidders. The database contains
key information that can be used to market Icoworks' services, including
information relating to key personnel, industry, current issues, auction
attendance, trade association membership, buying habits, travel and accredited
information. In addition, Icoworks maintains a database of equipment
evaluations for past sales prices at auctions, as well as other sources of
information. This evaluation database allows Icoworks to identify market trends
that both facilitate accurate appraisals and allow Icoworks to target its
marketing in response to these trends.
The customer evaluations database is an important component of Icoworks'
marketing strategy. Icoworks uses its database to be able to sell its services
to customers who are interested in achieving the broadest possible publicity for
sales of their items. Once the auction process is underway, Icoworks can then
target potential bidders and purchasers from its database. Icoworks can then
correspond with these prospective bidders and provide them information regarding
items to be auctioned. The objective of this marketing strategy is again to
achieve the best possible sales market for the customers.
2. Items
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Icoworks uses a system designed by Icoworks and referred to as the "Ico Auction
Wave System" to maximize auction preparation, marketing and operation
efficiencies. The system incorporates the following strategies:
(a) Prospective users and/or groups of bidders are profiled according to
their buying or viewing habits;
(b) Based on prospective user profiles, Icoworks then implements targeted
marketing campaigns that include special catalogue views, prices, discounts,
advertising and direct mailings;
(c) Icoworks builds and populates product catalogues for prospective buyers.
These product catalogues include advanced search capabilities, business
analytics and targeting functions that integrate with data provided by outside
partners.
(d) Icoworks performs business analytics to analyze and report on product
and customer behavior in order to target prospective buyers with the objective
of maximizing revenue from auction sales.
3. Marketing of Icoworks Services
---------------------------------
Icoworks prepares professionally designed detailed brochures, catalogues and
mailers, complete with color pictures that are made available by mail and online
through the Icoworks website. Icoworks plans to identify strategic partners and
enter into strategic relationships in order to make potential customers aware of
its services and to expand the scope of prospective buyers for Icoworks'
auctions.
ICOWORKS' BUSINESS STRATEGY AND PLAN OF OPERATIONS
--------------------------------------------------------
Icoworks' business strategy is to continue to expand its asset realization
business with the objective of increasing revenues and profitability. Icoworks'
strategies to achieve this business plan are as follows:
1. Icoworks intends to target and acquire regional auction businesses that
are currently engaged in traditional industrial and commercial auction and
liquidation services. The objective of this
Page 10 of 37
strategy is to expand the geographic scope of Icoworks' business, to expand its
customer base and to expand the scope of the prospective bidders for items sold
by Icoworks. By pursuing this strategy, Icoworks plans to be able to market to a
broader base of customers on the basis that Icoworks' geographic influence and
its database of prospective bidders will result in customers achieving higher
prices for items to be sold.
2. Icoworks plans to continue to integrate technology into its traditional
auction business. Icoworks will focus its efforts on using technology to
supplement its existing traditional auction business services, rather than
attempting to shift traditional auctions into an online format. Icoworks plans
to continue the use of live internet auctions using the BidSpotter or competing
technology. Icoworks also plans to pursue online auctions through its e-Bay
store. Icoworks will also consider conducting live online auctions that are
accessible to users through its corporate website.
3. Icoworks plans to pursue creative financing strategies for financing and
selling bought deals. Bought deals involve purchase of a group of assets from
the seller at a discount to the anticipated selling price. The advantage of
this arrangement to a seller is that the seller would be able to achieve
immediate proceeds from the sale at a guaranteed amount rather than waiting for
the completion of the auction process and being at risk to lower than
anticipated sales price at the auction. The risk to Icoworks as a purchaser is
that it would not be able to sell the assets at the price paid to the seller.
In order to be able to participate in such ventures at a lower risk, Icoworks
plans to evaluate the financing transactions, including limited partnerships
whereby Icoworks and other venture partners would fund the purchase price for a
block of assets and share the risk associated with the sale of the assets on the
market. This business strategy would offer greater potential returns for
Icoworks, but at potentially greater risks than in its traditional auction and
liquidation business where assets are sold on a fixed commission basis.
Icoworks has incorporated a subsidiary, Icoworks Joint Ventures Inc., for the
purpose of financing and selling bought deals. Icoworks and Icoworks Joint
Ventures Inc. have entered into a joint venture agreement with three initial
investors. The purpose of the joint venture formed pursuant to the joint
venture agreement is to purchase and resell various types of assets being
liquidated in receiverships and bankruptcy on a "bought deal" basis. Assets
purchased will be resold using the services of Icoworks. The joint venture will
plan to generate profit by selling these assets at a higher price than the
original purchase cost plus costs of sale. Under the joint venture agreement,
Icoworks will carry out the purchase and sale of assets for each bought deal.
Icoworks Joint Ventures Inc. has agreed to pay to Icoworks 3.5% of the gross
sale price of the assets to compensate Icoworks for sale costs relating to the
marketing, promotion and resale of the purchased assets. The gross profit,
being the sale price of each completed sale, less acquisition costs, sale costs
and any additional costs, will be distributed as follows:
(1) 65% to Icoworks, and
(2) 35% to be divided proportionately to each of the joint venture
investors.
Icoworks has guaranteed a return to each joint venture investor of 15% per
annum. The term of the joint venture agreement is for a minimum of one year and
a maximum of three years. Icoworks will report quarterly to the joint venture
investors and distributions will be made on a quarterly basis of cash available
for distribution. The joint venture investors will have the option to convert
their investments in Icoworks Joint Ventures Inc. into shares of our common
stock at any time within one year of their initial investment at a price based
on the market price of our common stock for the period immediately prior to the
date of investment.
To date, a total of three joint venture investors have agreed to participate in
the joint venture and have each advanced $400,000 CDN to Icoworks Joint Ventures
Inc., for an aggregate total investment of $1,200,000 CDN (equal to
approximately $800,000 US as of March 24, 2003).
Page 11 of 37
RISK FACTORS
An investment in the common stock of the Company is highly speculative and
subject to a high degree of risk. Only those persons who can bear the risk of
the entire loss of their investment should participate. An investor should
carefully consider the risks described below, the other information in this
Annual Report on Form 10-KSB and the information with the Company's filings with
the Securities and Exchange Commission before investing. The risks described
below are not the only ones faced. Additional risks that we are aware of or
that we currently believe are immaterial may become important factors that
affect our business. If any of the following risks occur, or if others occur,
our business, operating results and financial condition could be seriously
harmed and the investor may lose all of their investment.
If we are not able to secure future financings, then we may not be able to carry
out our business plan for the expansion of Icoworks.
Our business plan calls for the increased expansion of the business of Icoworks.
We will be required to raise substantial funds in order to fund this expansion.
There is no assurance that we will be able to raise the additional funds
required. In addition, future capital financings may result in dilution to
current holders of our common stock and may require the issuance of preferred
stock that have rights and priority to our common stock. There is no assurance
that financings will be available to us on terms that are attractive to us. In
the event that we are unable to secure additional financing, then we may be
forced to scale back the business plan of Icoworks and to reduce the business
activities of Icoworks. These measures could impact on the ability of Icoworks
to achieve profitability.
As the Icoworks merger is subject to approval of the shareholders of the Company
and Icoworks, there is no assurance that this merger will proceed.
We have agreed to merge with Icoworks. Upon completion of this merger, we will
issue approximately 5,814,236 additional shares of our common stock to acquire
the additional 44% interest in Icoworks that we do not own. In addition, we
anticipate that we will grant options and share purchase warrants to the option
and warrant holders of Icoworks. The issuance of these securities will result
in dilution to the holders of our common stock. There is no assurance that our
shareholders and Icoworks will each approve these mergers. In addition, the
merger will be subject to dissent and appraisal rights in favor of both the
shareholders of the Company and Icoworks. If a substantial number of these
shareholders exercise their dissent rights, then we may be forced to abandon the
merger due to the high cost of purchasing the shares of the dissenting
shareholders.
If the expansion strategy of Icoworks is not successful, then the Company may
not achieve profitability.
Our business plan involves the expansion of the traditional markets of Icoworks,
the introduction of new technology to Icoworks' auction business and the
entering into of "bought deals", subject to our achieving the necessary
financing. In the event that these expansion strategies are not successful in
generating revenues that exceed the costs of the expansions, then Icoworks will
not generate sufficient revenues for us to achieve profitability. In this
event, our business and financial condition will be adversely impacted.
If Icoworks' customers do not accept the introduction of new technology to the
traditional auction process, then our profitability and the profitability of
Icoworks will be adversely impacted.
Icoworks plans to continue to integrate technology into its traditional auction
business. Examples include incorporating state of the art auction software,
online auction participation and online auctions into the auction business. The
objective of these strategies is to increase the efficiency of the Icoworks
auctions by expanding the number of potential bidders. If the strategy is not
successful, then Icoworks may not be able to recover its investment in these new
technologies with the result that our business and financial condition would
adversely impacted.
Page 12 of 37
If the acquisition of strategy of Icoworks is not successful, then our business
and financial condition and the business and financial condition of Icoworks
will be adversely impacted.
Icoworks' plans on acquiring traditional auction businesses in order to expand
the geographic scope of its business. This strategy is part of an overall plan
to increase the number of bidders for equipment offered for sale by Icoworks.
The acquisition of new businesses is subject to various risks, including the
ability of Icoworks to integrate these new businesses into its current business,
the presence of competitors in new markets, the ability of Icoworks to retain
personnel from businesses that are acquired and the ability of newly acquired
businesses to generate adequate revenues. If Icoworks is not able to
successfully integrate new businesses into its current business, or if these new
businesses are not successful independently, then the business and financial
condition of Icoworks, and consequently our business and financial condition,
would be adversely affected.
There is no assurance that Icoworks will be successful in expanding its market
beyond its traditional territory.
The business of Icoworks was founded and is currently based in Calgary, Alberta,
Canada. The Company's base in this market is built on its years of experience
in this market and the experience of the Company's key employees in this market.
As Icoworks expands the geographic scope of its operations, there is no
assurance that it will be able to translate its experience and the experience of
its key employees to new markets. The business formula employed by Icoworks in
its current markets may not prove to be successful in new territories due to a
variety of factors, including different business environments, different
equipment markets and the presence of competitors in new markets. If the
business strategy used by Icoworks to date is not successful in new geographic
markets, then the business and financial condition of Icoworks, and consequently
our business and financial condition, will be adversely impacted.
If Icoworks is not successful in attracting additional personnel with the
necessary experience, Icoworks may not be successful in its expansion efforts.
In order to employ its business expansion strategy, Icoworks will be required to
hire new employees that have expertise in the auction industry and that are able
to enable us to implement our business strategy for Icoworks. There is no
assurance that Icoworks will be able to hire new employees that have the
necessary experience and qualifications. In addition, management may have
difficulty in training and retaining personnel in different geographic
locations. There is no assurance that the persons hired by Icoworks will enable
us to achieve the Icoworks' expansion strategy.
If the customers and bidders of Icoworks do not accept new auction formats
introduced by Icoworks, then the business and financial condition of Icoworks,
and consequently our business and financial condition, will be adversely
impacted.
Icoworks plans on introducing new technologies to its traditional auction
process. These new technologies include online auctions, such as auctions on
Icoworks' e-Bay store, and online participation in live auctions, such as the
services offered by Icoworks in conjunction with BidSpotter.com. The objective
behind these new formats it to broaden the base of bidders that view and bid on
the equipment offered by Icoworks on behalf of its customers. If these new
formats are not accepted, then Icoworks may not be able to recover the cost of
its time and investment in these new formats, with the result that the business
and financial condition of Icoworks, and consequently our business and financial
condition, may be adversely impacted.
If Icoworks enters into bought deals, then the capital of Icoworks will be at
risk.
Icoworks plans to enter into bought deals whereby the capital of Icoworks will
be placed at risk due to the requirement that Icoworks purchase the equipment to
be auctioned. The success of this business venture will be largely based on the
ability of Icoworks to successfully appraise and value equipment offered for
sale, to be able to enter into attractive purchase agreements from customers and
to resell the purchased equipment at prices which generate a successful return
on investment for Icoworks. The inability of Icoworks to achieve any of these
objectives could result in Icoworks in losing money on "bought deal"
Page 13 of 37
auctions. In this case, the capital of Icoworks, and consequently our capital,
would be at risk. This risk is a significantly greater risk that the traditional
auction process where Icoworks earns revenues on a commission basis.
If Icoworks loses any of its key employees, then its business and financial
condition could be adversely impacted.
The success of Icoworks is largely dependent on its key employees, including Mr.
Bill Wigley, Mr. Darrell McGrath and Graham Douglas. Mr. Wigley and Mr. McGrath
joined Icoworks through business acquisitions. Mr. Douglas has been involved in
funding Icoworks since the acquisition of Icoworks Services Ltd. In the event
that either of these individuals leaves Icoworks for any reason, then the
ability of Icoworks to continue the acquired businesses, to retain the business
goodwill of Icoworks and to achieve profitable operations will be adversely
impacted.
As Icoworks implements its business strategy, then its reliance on third parties
will increase.
Various components of the business strategy of Icoworks require the outsourcing
of certain services to third parties. Examples include the integration of
computer technologies, the hosting of online auctions by e-Bay and the offering
of online auctions by BidSpotter.com. To the extent that these parties are not
able to deliver the services required by Icoworks, then the ability of Icoworks
to satisfy its customers and to operate profitably may be adversely affected.
Competition may adversely impact on the ability of Icoworks to achieve
profitability and to achieve its expansion strategy.
Icoworks is currently subject to competition in its traditional markets.
Competitors include direct competitors, such as competing auction houses and
indirect competitors, such as equipment manufacturers, rental companies,
distributors and dealers that sell new or used products. The principal factors
in the industrial equipment market are reputation, customer service, commission
amounts, transaction structure, real time information access and the ability to
attract the bidders of products that are necessary to generate the best possible
prices for products. The inability of Icoworks to compete on any of these
factors with competitors in its traditional markets will impact adversely on the
business of Icoworks. In addition, Icoworks will have to compete on these
factors in new markets in the event that it expands into new geographic markets
as it completes its business strategy.
Icoworks will compete against competitors that have greater financial resources
and greater customer recognition as it enters new markets. There is no
assurance that Icoworks will be able to acquire market share from these
competitors as it attempts to expands its geographic scope.
Icoworks will encounter competition on the online market from competitors that
are focused on Internet auctions. In addition, new companies that have focused
their traditional businesses on Internet auctions may expand their businesses to
include traditional auction processes that compete with the auctions provided by
Icoworks.
A purchase of our common stock is speculative and purchasers may lose their
entire investment.
A purchase of our common stock is significantly speculative and involves
significant risks. Our common stock should not be purchased by any person who
cannot afford the loss of his or her entire purchase price. A purchase of our
common stock would be unsuitable for a person who cannot afford to lose his or
her entire purchase price. Our business objectives must be considered
speculative and there is no assurance that we will satisfy those objectives.
For these reasons, each prospective purchaser should read our filings with the
Securities and Exchange Commission, including this Annual Report on Form 10-KSB,
in its entirety and should consult with their attorney, business advisor or
investment advisor.
Page 14 of 37
Icoworks has entered into joint venture agreements with joint venture partners
and its subsidiary, Icoworks Joint Ventures Inc.
Under the terms of the joint venture agreement, the joint venture investors have
agreed to advance an aggregate total of $1,200,000 CDN (equal to approximately
$800,000 US) to date. Additional funds may be advanced by future joint venture
investors. Icoworks has guaranteed a return of 15% per annum on the investment
of the joint venture investors. If the bought deals purchase and resale
strategy of the joint venture is not successful in generating cash necessary to
pay the minimum return, then Icoworks will have to pay any shortfall to the
joint venture investors. Failure of the joint venture to generate the
anticipated profits will cause the business and financial condition of Icoworks
to be adversely affected.
FOR ALL OF THE AFORESAID REASONS AND OTHERS SET-FORTH IN THIS ANNUAL REPORT ON
FORM 10-KSB, AN INVESTMENT IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK.
ANY PERSON CONSIDERING THE PURCHASE OF OUR COMMON STOCK SHOULD BE AWARE OF THESE
AND OTHER FACTORS SET-FORTH IN THIS ANNUAL REPORT ON FORM 10-KSB AND SHOULD
CONSULT WITH HIS/HER LEGAL, TAX AND FINANCIAL ADVISORS PRIOR TO MAKING AN
INVESTMENT IN THE COMPANY. OUR SHARES SHOULD ONLY BE PURCHASED BY PERSONS WHO
CAN AFFORD TO LOSE ALL OF THEIR TOTAL INVESTMENT.
ITEM 2. DESCRIPTION OF PROPERTY.
We do not own or lease any property. See Item 1. Description of Business.
Subsequent to December 31, 2002, we moved our operations to an office maintained
by Icoworks Inc., a Nevada Corporation with whom the Company intends to merge.
See Item 1. Description of Business. It is expected that our operations will be
integrated completely into the operations of Icoworks upon completion of the
merger.
ITEM 3. LEGAL PROCEEDINGS.
We are not a party to any material legal proceedings and to our knowledge, no
such proceedings are threatened or contemplated.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to our security holders for a vote during the fourth
quarter of our fiscal year ending December 31, 2002.
Page 15 of 37
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
Market Information
Our shares of common stock are currently trading on the OTC Bulletin Board under
the stock symbol ICOW. The high and the low bid information for our shares of
common stock for each quarter of actual trading were:
---------------------------------------------------
QUARTER HIGH ($) LOW ($)
---------------------------------------------------
Second Quarter 2002 $1.00 $0.05
---------------------------------------------------
Third Quarter 2002 $1.625 $0.70
---------------------------------------------------
Fourth Quarter 2002 $0.80 $0.50
---------------------------------------------------
*Adjusted for 2:1 stock split.
The market quotations provided reflect inter-dealer prices, without retail
mark-up, markdown or commission and may not represent actual transactions. The
source of the high and low bid information is the Canada Stockwatch.
Holders of Common Stock
As of the date of March 24, 2003, there were 36 registered shareholders of our
common stock.
Dividends
There are no restrictions in our Articles of Incorporation or bylaws that
restrict us from declaring dividends. The Nevada Revised Statutes, however,
prohibit us from declaring dividends where, after giving effect to the
distribution of the dividend:
(A) we would not be able to pay our debts as they become due in the usual
course of business; or
(B) our total assets would be less than the sum of our total liabilities,
plus the amount that would be needed to satisfy the rights of
shareholders who have preferential rights superior to those receiving
the distribution.
We have neither declared nor paid any cash dividends on our capital stock and do
not anticipate paying cash dividends in the foreseeable future. Our current
policy is to retain any earnings in order to finance the expansion of our
operations. Our board of directors will determine future declaration and payment
of dividends, if any, in light of the then-current conditions they deem relevant
and in accordance with the Nevada Revised Statutes.
Recent Sales of Unregistered Securities
We did not complete any unregistered sales of our common stock during our fiscal
year ended December 31, 2002.
Page 16 of 37
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
Plan of Operations
Our plan of operations include the following components over the next twelve
months:
1. We plan to complete the merger with Icoworks in order to acquire the
remaining 44% interest in Icoworks that we do not currently own. We anticipate
that the completion of this acquisition will take approximately six months and
will cost approximately $100,000 due to the fact that we must file a
registration statement with the United States Securities and Exchange Commission
to register the shares to be issued to the remaining shareholders of Icoworks.
2. We plan to continue the existing business of Icoworks, as its major
shareholder. We anticipate that we will be required to advance approximately
$1,000,000 to Icoworks in order to fund its existing business operations over
the next twelve months.
3. We plan to advance approximately $1,390,000 to Icoworks to fund the
participation by Icoworks in bought deals, as described in Item 1. Description
of Business - Icoworks Business Strategy and Plan of Operations.
4. We plan to advance approximately $1,000,000 to Icoworks to fund the
acquisition strategy of Icoworks, as outlined in Item 1. Description of Business
- Icoworks Business Strategy and Plan of Operations.
Based on these anticipated expenditures, we anticipate spending approximately
$3,500,000 over the next twelve months in pursuing our plan of operations. Of
this amount, we anticipate that approximately $1,750,000 will be advanced during
the next six months. Our cash position as of December 31, 2002 was $25,092 and
we had working capital of $15,783 as of December 31, 2002. Accordingly, we will
require substantial additional financing in order to proceed with our plan of
operations. We do not have any arrangements for financing currently in place.
Accordingly, there is no assurance that we will be able to obtain the financing
necessary to pursue this plan of operations. If we are successful in achieving
financing, we anticipate that any financing would be either through sales of our
common stock or sales of preferred stock that will be convertible into shares of
our common stock. Accordingly, any financing could result in dilution to our
shareholders.
If we are not able to obtain the necessary financing, then we will scale back
the plan of operations in order to reflect available funds. Our first
priorities will be to complete the merger with Icoworks and to continue the
existing business of Icoworks. The funds available to fund the participation of
Icoworks in bought deals and to fund the acquisition strategy of Icoworks will
be scaled back according to the amounts of available funds. If we are not
successful in raising the necessary financing, we will also pursue alternate
financing arrangements, such as the joint venture financing arrangement
involving Icoworks Joint Ventures Inc., as described in Item 1. Description of
Business - Icoworks Business Strategy and Plan of Operations.
FINANCIAL STATEMENTS
Our financial statements reflect the fact that we had minimal business
operations during fiscal 2002 and 2001. We determined in 2002 to abandon the
vitamineralherb.com business and to pursue the acquisition of Icoworks. Our
financial statements for the year ended December 31, 2002 do not include the
financial statements of Icoworks on a consolidated basis. We completed the
acquisition of the majority interest of Icoworks in February 2002. As indicated
in our Current Report on Form 8-K announcing this acquisition, we will file
audited, interim and pro forma financial statements for Icoworks with the United
States Securities and Exchange Commission within the time period required.
Page 17 of 37
RESULTS OF OPERATIONS
Our operating expenses were $27,441 for the year ended December 31, 2002,
compared to $7,500 for the year ended December 31, 2001. All our expenses
related to our attempts to acquire Icoworks and professional expenses incurred
in connection with our obligations as a reporting company under the Securities
Exchange Act of 1934. Our losses were $26,717 for the year ended December 31,
2002, compared to $7,500 for the year ended December 31, 2001. Our losses were
comprised entirely of our operating expenses.
LIQUIDITY AND CAPITAL RESOURCES
Cash and Working Capital
We had cash of $25,092 as of December 31, 2002, compared with cash of $NIL as of
December 31, 2001. Our working capital was $15,783 as at December 31, 2002,
compared to a working capital deficit of $7,500 as at December 31, 2001.
Liabilities
We financed our business operations with a loan from a shareholder in the amount
of $11,000. This amount is outstanding in the amount of $11,000 as of December
31, 2002. There are no repayment terms and the loan does not bear interest.
Financing Requirements
We currently have minimal cash and working capital resources. We do not have
adequate financial resources in order to enable us to complete our plan of
operations without additional financing. Our current sources of working capital
are currently insufficient to continue our operations. Accordingly, we will
require additional working capital in order to continue our plan of operations.
As discussed above, we will require substantial financing in order to pursue the
plan of operations for the merger of Icoworks and the expansion of the business
of Icoworks. Based on these factors, there is substantial doubt as to our
ability to continue as a going concern.
As discussed above under Plan of Operations, we will require additional
financing if we are to continue as a going concern and to complete our plan of
operations. In the event that we are unable to raise additional financing under
acceptable terms, then we may not be able to proceed with our plan of
operations. We also anticipate that we will continue to incur losses until such
time as we are able to generate profits from the business of Icoworks and its
expansion strategy.
In the event that we are successful in achieving financing, we anticipate
advancing funds to Icoworks to fund bought deals and the acquisition strategy of
Icoworks as a loan pending the completion of the merger of Icoworks. These
loans may be advanced as secured or unsecured loans. In the event that we
advance funds to Icoworks, there will be no assurance that these funds will be
repaid by Icoworks. If the business of Icoworks is not successful in generating
sufficient funds to repay these loans, then our financial condition will be
adversely affected. In addition, there is a risk that we will advance
substantial funds to Icoworks and the merger of Icoworks will not proceed, as
discussed in Item 1. Description of Business - Risk Factors.
Page 18 of 37
ITEM 7. FINANCIAL STATEMENTS.
Index to Financial Statements:
1. Auditors' Report;
2. Audited Financial Statements for the year ended December 31, 2002,
including:
a. Balance Sheets as at December 31, 2002 and 2001;
b. Statements of Operations for the years ended December 31, 2002
and 2001;
c. Statements of Stockholders' Deficit for the years ended December 31,
2002 and 2001;
d. Statements of Cash Flows for the years ended December 31, 2002 and
2001;
e. Notes to Financial Statements.
Page 19 of 37
Janet Loss, C.P.A., P.C.
Certified Public Accountant
1780 South Bellaire, Suite 500
Denver, Colorado 80222
(303) 782-0878
INDEPENDENT AUDITOR'S REPORT
Board of Directors and Shareholders
Paragon Polaris Strategies.Com Inc.
Suite 1700 1111 West Georgia Street
Vancouver, BC Canada
I have audited the accompanying Balance Sheet of Paragon Polaris Strategies.Com
Inc. (A development stage enterprise) as of December 31, 2002 and 2001; the
Statements of Operations and Cash Flows for the years ended December 31, 2002
and 2001. These financial statements are the responsibility of the Company's
management. My responsibility is to express an opinion on these financial
statements based on my audits.
My examination was made in accordance with generally accepted auditing standards
in the United States of America. Those standards require that I plan and
perform the audits to obtain reasonable assurance as to 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. I believe that our audit provides a
reasonable basis for our opinion.
In my opinion, The Financial Statements referred to above present fairly, in all
material respects, the financial position of Paragon Polaris Strategies.Com Inc.
(a development stage enterprise) as of December 31, 2002 and 2001; the results
of its operations and changes in its cash flows for the years ended December 31,
2002 and 2001 are in conformity with generally accepted accounting principles.
/s/ Janet Loss
Janet Loss, C.P.A., P.C.
Denver Colorado
March 28, 2003
Page 20 of 37
Paragon Polaris Strategies.Com Inc.
(A Development Stage Enterprise)
Balance Sheets
December 31, 2002 2001
----------------------------------------------------------------------
ASSETS
Current Assets
Cash and cash equivalents $ 25,092 $ -
Accounts receivable, net 2,592 -
----------------------------------------------------------------------
Total Assets $ 27,684 $ -
======================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 801 $ -
Due to related parties 100 7,500
Loan payable to related party 11,000 -
----------------------------------------------------------------------
Total Current Liabilities 11,901 7,500
Stockholders' Equity (Deficit)
Common stock, $.001 par value; 50,000,000 and
25,000,000 shares authorized, 5,700,000 and
2,600,000 issued and outstanding 2,850 2,600
Additional paid in capital 61,805 12,055
Deemed dividend re: license rights (2,000) (2,000)
Deficit accumulated (46,872) (20,155)
----------------------------------------------------------------------
Total Stockholders' Equity (Deficit) 15,783 (7,500)
----------------------------------------------------------------------
Total Liabilities and Stockholders' Equity $ 27,684 $ -
======================================================================
See accompanying notes to financial statements.
Page 21 of 37
Paragon Polaris Strategies.Com Inc.
(A Development Stage Enterprise)
Statements of Operations
For the years ended December 31, 2002 and 2001
2002 2001
--------------------------------------------------------------------------------
GENERAL AND ADMINISTRATIVE EXPENSES
Bank charges $ 71 $ -
Filing fees 21,569 -
Professional fees 4,000 -
Transfer agent 1,801 -
Office expenses - 1,200
Taxes and licenses - 6,300
--------------------------------------------------------------------------------
Total general and administrative expenses 27,441 7,500
--------------------------------------------------------------------------------
Interest revenue 724 -
--------------------------------------------------------------------------------
Net loss $ (26,717) $ (7,500)
================================================================================
Net loss per share - basic and diluted $ (0.01) $ (0.00)
================================================================================
Weighted average number of shares of
common stock outstanding 3,246,875 2,600,000
================================================================================
See accompanying notes to financial statements
Page 22 of 37
Paragon Polaris Strategies.Com Inc.
(A Development Stage Enterprise)
Statement of Stockholders' Deficit
Common Stock
-----------------------------
Deemed
Addi- Dividend
tional re: Accumu-
Paid-in Licence lated
Shares Amount Capital rights Deficit Total
--------------------------------------------------------------------------------
Paragon Polaris
Strategies Inc.
--------------------------------------------------------------------------------
Balance, December
31, 2001 and
2000 2,600,000 $ 2,600 $12,055 $(2,000) $(20,155) $ (7,500)
--------------------------------------------------------------------------------
Issuance of
common stock
for cash 250,000 250 49,750 - - 50,000
December 2
2002 common
stock issued
to reflect 2:1
split see
Note 3 2,850,000
Net loss - - - - (26,717) (26,717)
--------------------------------------------------------------------------------
Balance,
December
31, 2002 5,700,000 $ 2,850 $61,805 $(2,000) $(46,872) $ 15,783
================================================================================
See accompanying notes to financial statements.
Page 23 of 37
Paragon Polaris Strategies.Com Inc.
(A Development Stage Enterprise)
Statement of Cash Flows
For the years ended December 31, 2002 and 2001
2002 2001
------------------------------------------------------------------------
Cash Flows From Operating Activities
Net loss $(26,717) $(7,500)
Change in assets and liabilities:
Accounts receivable (2,592) -
Due from related party (7,400) (7,500)
Accounts payable 801 -
------------------------------------------------------------------------
Net Cash Provided by (Used in) Operating Activities (35,908) -
------------------------------------------------------------------------
Cash Flows From Financing Activities
Proceeds from issuing common stock 50,000 -
Proceeds from related party loan payable 11,000 -
------------------------------------------------------------------------
Net Cash Provided by Financing Activities 61,000 -
------------------------------------------------------------------------
Net Increase in Cash and Cash Equivalents 25,092 -
Cash and Cash Equivalents, beginning of period - -
------------------------------------------------------------------------
Cash and Cash Equivalents, end of period $ 25,092 $ -
========================================================================
See accompanying notes to financial statements
Page 24 of 37
Paragon Polaris Strategies.Com Inc.
(A Development Stage Enterprise)
Notes to Financial Statements
NOTE 1: Organization and History
Paragon Polaris Strategies.Com Inc. is a Nevada Corporation and the Company has
been in the development stage since its formation on May 27, 1999.
The Company's only activities have been organizational, directed at raising its
initial capital and developing its business plan.
On May 27, 1999, Paragon Polaris Strategies.Com Inc. issued 500,000 shares of
common stock to its officers and directors as founders' shares in return for the
time, effort and expenses to organize and form the corporation. On July 1, 1999
the Company issued 2,000,000 shares of common stock to ten individuals in
exchange for certain license rights. On May 15, 2000, 100,000 shares were issued
for cash. On February 22, 2002, 250,000 shares were issued for cash.
NOTE 2: Summary of Significant Accounting Policies
DEVELOPMENT STAGE ACTIVITIES - The Company has been in the development stage
since inception.
ACCOUNTING METHOD - The Company records income and expenses on the accrual
method.
CASH AND CASH EQUIVALENTS - Cash and cash equivalents includes cash on hand,
cash on deposit, and highly liquid investments with maturities generally of
three months or less. At December 31, 2002, there was $25,092 in cash
equivalents.
YEAR END - The Company has elected to have a fiscal year ended December 31.
USE OF ESTIMATES - The preparation of financial statements in accordance with
generally accepted accounting principles requires management to make estimates
and assumptions that effect the reported amounts of assets and liabilities at
the date of financial statements, as well as revenues and expenses reported for
the periods presented. The Company regularly assesses these estimates and, while
actual results may differ management believes that the estimates are reasonable.
NOTE 3: Business Acquisition
On November 20, 2002 the Company entered into an agreement to merge with
Icoworks, Inc. (www.icoworks.com), a Nevada corporation that specializes in
offering a complete array of industrial, oilfield and commercial appraisal,
liquidation and auction services. The Board of Directors of the Company also
approved a two-for-one split of the Company's common stock effective December 2,
2002 . The Company's authorized capital was increased from 25,000,000 shares to
50,000,000 shares of common stock in connection with the stock split.
Page 25 of 37
NOTE 4: Related Party Transactions
In November, a shareholder loaned the Company $11,000. There are no repayment
terms for the loan and it is non-interest bearing.
NOTE 5: Subsequent Events
On February 20, 2003, the Company completed the acquisition of an approximate
56% interest in Icoworks Inc. The Company issued an aggregate of 7,186,398
shares of its common stock in consideration of an aggregate of 3,593,199 shares
of Icoworks from the former Icoworks shareholders. The shares were issued
pursuant to Regulation S of the Securities Act of 1933. The interest of Icoworks
acquired represents an approximate 56% interest of the total outstanding shares
of Icoworks. The shares were issued to the former Icoworks shareholders on the
basis of two shares of the Company's common stock in consideration for each one
share of Icowork's common stock.
Page 26 of 37
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
THE COMPANY
The following table sets forth the names and positions of our officers and
directors as of the date hereof.
Name of Director Position
------------------ --------
Robert Foo President and Director
Samuel Lau Secretary, Treasurer and Director
Ian Brodie Director
Robert Foo. Mr. Robert Foo, a native of Malaysia and a Canadian citizen, is the
president and a director of Paragon Polaris. In 1975 he graduated from Southern
Alberta Institute of Technology with a degree in Business Administration. From
1975 to 1977 Mr. Foo was in the management program of the Denny's Restaurant
chain. From 1977 through 1980 he was a sales agent for The Metropolitan Life
Insurance Company. From 1980 to 1986 he was a sales representative of Seaboard
Life Insurance. Mr. Foo served as the promoter of Archer Communications, Inc.
from 1986 to 1988 and currently is President and Chief Executive Officer of
Trans Asia Resources, Inc., an oil and gas exploration company, currently
engaged in drilling in Texas in conjunction with NYSE listed Apache Petroleum,
Inc.
Samuel Lau. Mr. Samuel Lau is currently the secretary and treasurer and a
director of Paragon Polaris. Since July, 1998, Mr. Lau has served the corporate
secretary and office manager of Trans Asia Resources, Inc., an oil and gas
exploration company. For the two years preceding June, 1998, Mr. Lau was a
supervisor at a large travel agency, Happy Times Travel. From November, 1996 to
May, 1998, Mr. Lau was a travel consultant with Quality Travel. From 1991
through 1993 he was a sales representative for Key Jewelry. Mr. Lau attended
York University, Toronto Ontario.
Ian Brodie. Mr. Brodie was appointed as one of our directors on February 12,
2003. Mr. Brodie is currently the chief financial officer and secretary and a
member of the board of directors of Icoworks. Mr. Brodie has held these
positions with Icoworks since April 30, 2001. From 1988 to the present, Mr.
Brodie has been active as an independent consultant assisting companies prepare
for the public offering of their securities. His experience includes business
restructuring, mergers, acquisitions, and divestitures. Mr. Brodie began his
career as a registered representative with a Canadian brokerage firm before
becoming involved in corporate finance. Mr. Brodie is the president of Westin
Capital Corp., a private company involved in assisting companies prepare for the
public market.
Page 27 of 37
ICOWORKS
The following table sets forth the names and positions of the officers and
directors of Icoworks as of the date hereof.
Name Age Position
----------------- --- --------
J. Graham Douglas 55 President and Director
Ian Brodie 48 Secretary, Director and Chief Financial Officer
Bill Wigley 62 Vice President
J. Graham Douglas. Mr. Douglas is currently the president and a member of the
board of directors of Icoworks. In 1970, Mr. Douglas graduated from the
University of Manatoba with a Bachelors Degree in Commerce. Additionally, Mr.
Douglas has taken courses required to receive certificates from the Canadian
Institute of Bankers and the Mortgage Brokers Association and necessary to
receive an Alberta Real Estate license and a Canadian Securities License. From
1992 through the present, Mr. Douglas has been active as a consultant in
connection with business restructurings, mergers and acquisitions, finance and
the public and private offering of securities. In that regard, Mr. Douglas has
consulted with businesses in different industries, including the food and
beverage processing, clothing, tourism, real estate, construction,
telecommunications, mining and exploration, and heavy equipment option
industries, which industries are international.
Bill Wigley. Mr. Wigley is currently the vice-president of Icoworks. Mr. Wigley
has operated Bill Wigley Auction Services Ltd. for the past 25 years. Prior to
starting his own auction company Mr. Wigley served in various capacities in the
oil industry as a cementing engineer and a sub-sea engineer for 15 years. Prior
to that Mr. Wigley was a sales manager for Kenworth Trucks. Mr., Wigley has been
active in the regional and national auction associations as an officer and
course leader. Mr. Wigley has done extensive industrial and oilfield appraisal
work.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's executive officers and
directors, and persons who beneficially own more than ten percent of the
Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Officers, directors and
greater than ten percent shareholders are required by SEC regulation to furnish
the Company with copies of all Section 16(a) forms they file. Based on its
review of the copies of such forms received by it, the Company believes that
during the fiscal year ended December 31, 2002 all such filing requirements
applicable to its officers and directors were complied with.
Page 28 of 37
ITEM 10. EXECUTIVE COMPENSATION.
THE COMPANY
Executive Compensation
We did not pay any salary or benefits or other compensation to either Mr. Foo or
Mr. Lau, the sole executive officers of the Company, during any of the three
years ended December 31, 2002, 2001 or 2000. At the present time neither Mr.
Foo nor Mr. Lau receives any salaried compensation for their services, either as
a director or an executive officer.
Summary Compensation Table
The table below summarizes all compensation awarded to, earned by, or paid to
our executive officers by any person for all services rendered in all capacities
to us for the fiscal years ended December 31, 2002, 2001 and 2000:
Annual Compensation Long Term Compensation
---------------------------- ------------------------
Other All
Annual Other
Com- Com-
pen- Restricted pen-
sa- Stock Options/ LTIP sa-
Name Title Year Salary Bonus tion Awarded SARs*(#)payouts($)tion
---- ----- ---- ------ ----- ------ ------- ------- --------- ----
Robert President, 2002 $0 0 0 0 0 0 0
Foo CEO and 2001 $0 0 0 0 0 0 0
Director 2000 $0 0 0 0 0 0 0
--------------------------------------------------------------------------------
Samuel Secretary, 2002 $0 0 0 0 0 0 0
Lau Treasurer, 2001 $0 0 0 0 0 0 0
CFO and 2000 $0 0 0 0 0 0 0
Director
--------------------------------------------------------------------------------
Ian Director 2002 $0 0 0 0 0 0 0
Brodie
--------------------------------------------------------------------------------
Stock Option Grants
We did not grant any stock options to any of our executive officers or directors
during our most recent fiscal year ended December 31, 2002. We have also not
granted any stock options to any of our executive officers or directors since
December 31, 2002.
Exercises of Stock Options and Year-End Option Values
No stock options were exercised by our executive officers or directors during
the financial year ended December 31, 2002. No stock options have been
exercised by our executive officers or directors since December 31, 2002.
Compensation Agreement
We are not party to any compensation agreements, including any employment or
consultant agreements, with either Mr. Foo or Mr. Lau, our sole executive
officers. We do not pay any amount to Mr. Foo, Mr. Lau or Mr. Brodie in
consideration for their acting as directors.
Outstanding Stock Options
We do not have any stock options outstanding.
Page 29 of 37
ICOWORKS
The table set forth below summarizes the annual compensation for services in all
capacities to the executive officers of Icoworks during the years ending
December 30, 2002 and 2001.
Name and Principal Position Year Salary ($) Additional Compensation
--------------------------- ---- ---------- -----------------------
Ian Brodie, 2002 $ 72,000(1) 0
Director, Secretary, and
Chief Financial Officer 2001 $ 72,000 0
--------------------------------------------------------------------------------
J. Graham Douglas, 2002 $132,000 0
President and Director 2001 $ 72,000 0
--------------------------------------------------------------------------------
Bill Wigley, 2002 $ 68,000 0
Vice-President ($100,000 CDN)
2001 $68,000 0
($100,000 CDN)
--------------------------------------------------------------------------------
(1) Paid to Westin Capital, a private company in which Mr. Brodie is a
--------------------------------------------------------------------------------
principal.
----------
Compensation of Icoworks Directors
Directors who are also Icoworks employees receive no extra compensation for
their service on the Icoworks board of directors.
Icoworks Employment Contracts
Icoworks engages Mr. Douglas and Mr. Brodie as consultants under agreement with
Antares Investments, Inc., pursuant to which Antares Investments, Inc. is paid
$17,000 US per month by Icoworks.
Bill Wigley has entered into a 3 year employment agreement dated December 1,
2001, pursuant to which he is paid $8,500 CDN per month plus five percent (5%)
of the net auction revenue received by Icoworks services in excess of $1,000,000
CDN per annum during the term of his employment.
Icoworks Stock Option Plan
The board of directors of Icoworks intends to adopt a stock option plan
("Icoworks Stock Option Plan"). The Icoworks Stock Option Plan will be designed
to retain qualified and competent officers, employees, and directors of
Icoworks. The board of directors of Icoworks, or a committee thereof, shall
administer the Icoworks Stock Option Plan and will be authorized, in its sole
and absolute discretion, to grant options pursuant thereto to all of our
eligible employees, including the officers and directors of Icoworks (whether or
not employees). Options will be granted pursuant to the provisions of the
Icoworks Stock Option Plan on such terms and at such prices as determined by the
board of directors of Icoworks. Options granted pursuant to the Icoworks Stock
Option Plan will be exercisable after the period specified in the option
agreement. Options granted pursuant to the Icoworks Stock Option Plan will not
be exercisable after the expiration of ten (10) years from the date of grant.
Page 30 of 37
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth certain information concerning the number of
shares of our common stock owned beneficially as of March 24, 2003 by: (i) each
person (including any group) known to us to own more than five percent (5%) of
our common stock, (ii) each of our directors and each of our executive officers,
and (iii) officers and directors as a group. Unless otherwise indicated, the
shareholders listed possess sole voting and investment power with respect to the
shares shown.
--------------------------------------------------------------------------------
Name and Address Number of Shares Percentage of
Title of Class of Beneficial Owner of Common Stock Common Stock(1)
--------------------------------------------------------------------------------
DIRECTORS AND OFFICERS
--------------------------------------------------------------------------------
Common Stock ROBERT FOO 500,000 3.9%
President and Director
--------------------------------------------------------------------------------
Common Stock SAMUEL LAU 500,000 3.9%
Secretary, Treasurer
and Director
--------------------------------------------------------------------------------
Common Stock IAN BRODIE 3,584,398 (2) 27.8%
Director
--------------------------------------------------------------------------------
Common Stock All Officers and Directors 4,534,398 35.6%
as a Group (3 persons)
--------------------------------------------------------------------------------
5% SHAREHOLDERS
--------------------------------------------------------------------------------
Common Stock BILL WIGLEY 1,200,000 (3) 9.3%
--------------------------------------------------------------------------------
Common Stock HOLLYWOOD HOLDINGS LTD. 800,000 6.28%
--------------------------------------------------------------------------------
Common Stock SOLARA VENTURES 2,084,398 16.9%
--------------------------------------------------------------------------------
Common Stock J. GRAHAM DOUGLAS 1,602,000 (4) 12.4%
--------------------------------------------------------------------------------
(1) Under Rule 13d-3, a beneficial owner of a security includes any person who,
directly or indirectly, through any contract, arrangement, understanding,
relationship, or otherwise has or shares: (i) voting power, which includes
the power to vote, or to direct the voting of shares; and (ii) investment
power, which includes the power to dispose or direct the disposition of
shares. Certain shares may be deemed to be beneficially owned by more than
one person (if, for example, persons share the power to vote or the power
to dispose of the shares). In addition, shares are deemed to be
beneficially owned by a person if the person has the right to acquire the
shares (for example, upon exercise of an option) within 60 days of the date
as of which the information is provided. In computing the percentage
ownership of any person, the amount of shares outstanding is deemed to
include the amount of shares beneficially owned by such person (and only
such person) by reason of these acquisition rights. As a result, the
percentage of outstanding shares of any person as shown in this table does
not necessarily reflect the person's actual ownership or voting power with
respect to the number of shares of common stock actually outstanding on
February 28, 2003. As of February 28, 2003, there were 12,886,398 shares of
our common stock issued and outstanding.
Page 31 of 37
(2) Mr. Brodie is a director and officer of Solara Ventures and a minority
shareholder of Solara Ventures. Accordingly, Mr. Brodie is deemed to
beneficially own shares held by Solara Ventures for the purposes of Rule
13d-3.
(3) Includes shares held by the spouse of Mr. Wigley.
(4) The shares held by Mr. Douglas are held by a private corporation
controlled by Mr. Douglas.
================================================================================
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Except as described below, none of the following persons has any direct or
indirect material interest in any transaction to which we were or are a party
during the past two years, or in any proposed transaction to which the Company
proposes to be a party:
(A) any director or officer;
(B) any proposed nominee for election as a director;
(C) any person who beneficially owns, directly or indirectly, shares carrying
more than 5% of the voting rights attached to our common stock; or
(D) any relative or spouse of any of the foregoing persons, or any relative of
such spouse, who has the same house as such person or who is a director or
officer of any parent or subsidiary.
Acquisition of Icoworks
The Company issued shares to the following shareholders of Icoworks on
completion of the acquisition of the majority interest on February 20, 2003:
--------------------------------------------------------------------------------
Number of Shares Percentage of Company Common
Name of Beneficial Owner of Common Stock Stock Currently Held (1)
--------------------------------------------------------------------------------
Ian Brodie 3,584,398 (2) 27.8%
--------------------------------------------------------------------------------
Bill Wigley 1,200,000 (3) 9.3%
--------------------------------------------------------------------------------
Hollywood Holdings Ltd. 800,000 6.3%
--------------------------------------------------------------------------------
Solara Ventures Inc. 2,084,398 16.9%
--------------------------------------------------------------------------------
J. Graham Douglas 1,602,000 (4) 12.4%
--------------------------------------------------------------------------------
TOTAL 7,186,398 55.8%
--------------------------------------------------------------------------------
(1) Based on 12,886,398 shares of the Company's common stock issued and
outstanding as of February 28, 2003.
(2) Mr. Brodie is a director and officer of Solara Ventures and a minority
shareholder of Solara Ventures. Accordingly, Mr. Brodie is deemed to
beneficially own shares held by Solara Ventures for the purposes of Rule
13d-3. Mr. Brodie was individually issued 1,500,000 shares of the Company's
common stock. The balance of the shares deemed to be beneficially held by
Mr. Brodie are held by Solara Ventures.
(3) Includes shares held by the spouse of Mr. Wigley.
(4) The shares held by Mr. Douglas are held by a private corporation controlled
by Mr. Douglas.
The shares of the Company's common stock that were issued to the former
shareholders of Icoworks listed above were issued in consideration of the
transfer of the shares of Icoworks held by the former
Page 32 of 37
shareholders. The shares were issued to the former Icoworks shareholders on the
basis of two shares of the Company's common stock in consideration for each one
share of Icowork's common stock. These Icoworks shares were acquired by the
former shareholders using their own funds.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits and Index of Exhibits
Exhibit Number Description of Exhibit
-------------- ----------------------------------------------------------------
3.1 Articles of Incorporation(1)
3.2 Bylaws (1)
10.1 License Agreement(1)
10.2 Assignment of License Agreement(1)
10.3 License Agreement - Water(1)
10.4 Manufacturing Agreement between Viamineralherb.com and Alta(1)
10.5 Merger Agreement between Paragon Polaris Strategies.com
Inc. and Icoworks, Inc. (2)
10.6 Form of share purchase agreement entered into between the
registrant and the individual non-US shareholders of Icoworks,
Inc. to acquire the majority interest.(3)
99.1 Certification of Chief Executive Officer pursuant to pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 (4)
99.2 Certification of Chief Financial Officer pursuant to pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (4)
99.3 Risk Factors (4)
(1) Previously filed with the Securities and Exchange Commission as an exhibit
to the Registrant's Form SB-2 Registration Statement originally filed March
16, 2000, as amended.
(2) Previously filed with the Securities and Exchange Commission as an exhibit
to the Registrant's Current Report on Form 8-K on November 22, 2002.
(3) Previously filed with the Securities and Exchange Commission as an exhibit
to the Registrant's Current Report on Form 8-K on March 6, 2003.
(4) Filed as an exhibit to this Annual Report on Form 10-KSB.
(b) Reports on Form 8-K.
The following Current Reports on Form 8-K were filed during the last quarter of
our fiscal year ended December 31, 2002.
Date of Form 8-K Date of Filing with the SEC Description of the Form 8-K
---------------- --------------------------- ---------------------------
November 20, 2002 November 22, 2002 Disclosure of the execution
of the merger agreement
between the Company and
Icoworks
Page 33 of 37
The following Current Reports on Form 8-K were filed subsequent to our fiscal
year ended December 31, 2002.
Date of Form 8-K Date of Filing with the SEC Description of the Form 8-K
---------------- --------------------------- ---------------------------
March 4, 2003 March 6, 2003 Disclosure of the
acquisition by the Company
of a majority interest
of Icoworks
ITEM 14. CONTROLS AND PROCEDURES.
As required by Rule 13a-15 under the Securities Exchange Act of 1934 (the
"Exchange Act"), we carried out an evaluation of the effectiveness of the design
and operation of our disclosure controls and procedures within the 90 days prior
to the filing date of this report. This evaluation was carried out under the
supervision and with the participation of our Chief Executive Officer, Mr.
Robert Foo, and Chief Financial Officer, Mr. Samuel Lau. Based upon that
evaluation, our Chief Executive Officer and Chief Financial Officer concluded
that our disclosure controls and procedures are effective in timely alerting
management to material information relating to us required to be included in our
periodic SEC filings. There have been no significant changes in our internal
controls or in other factors that could significantly affect internal controls
subsequent to the date we carried out our evaluation.
Disclosure controls and procedures are controls and other procedures that are
designed to ensure that information required to be disclosed our reports filed
or submitted under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the Securities and Exchange
Commission's rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed in our reports filed under the Exchange Act is
accumulated and communicated to management, including our Chief Executive
Officer and Chief Financial Officer, to allow timely decisions regarding
required disclosure.
Page 34 of 37
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
PARAGON POLARIS STRATEGIES.COM INC.
By: /s/ Robert Foo
___________________________________
Robert Foo, President and Chief Executive Officer
Director
Date: March 28, 2003
In accordance with the Securities Exchange Act, this report has been signed
below by the following persons on behalf of the registrant and in the capacities
and on the dates indicated.
By: /s/ Robert Foo
___________________________________
Robert Foo, Chief Executive Officer and Director
(Principal Executive Officer)
Director
Date: March 28, 2003
By: /s/ Samuel Lau
___________________________________
Samuel Lau, Chief Financial Officer and Director
(Principal Financial Officer and Principal Accounting Officer)
Director
Date: March 28, 2003
By: /s/ Ian Brodie
___________________________________
Ian Brodie
Director
Date: March 28, 2003
CERTIFICATION
I, Robert Foo, Chief Executive Officer of Paragon Polaris Strategies.com Inc.,
certify that;
1. I have reviewed this annual report on Form 10-KSB of Paragon Polaris
Strategies.com Inc.;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls
or in other facts that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
/s/ Robert Foo
Date: March 28, 2003 ___________________________________
(Signature)
Chief Executive Officer
___________________________________
(Title)
CERTIFICATION
I, Samuel Lau, Chief Financial Officer of Paragon Polaris Strategies.com Inc.,
certify that;
1. I have reviewed this annual report on Form 10-KSB of Paragon Polaris
Strategies.com Inc.;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls
or in other facts that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
/s/ Samuel Lau
Date: March 28, 2003 ___________________________________
(Signature)
Chief Financial Officer
___________________________________
(Title)