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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Issuer
PURSUANT to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934
Filing No. 2 for the month of November, 1999
Bid.Com International Inc.
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(Exact name of Registrant)
6725 Airport Road, Suite 201, Mississauga, ON, Canada L4V 1V2
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(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F
Form 20-F X Form 40-F
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Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
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BID.COM INTERNATIONAL INC.
On or about November 30, 1999, the Company mailed to all registered
shareholders its Third Quarter 1999 Report.
Exhibit 1. Third Quarter 1999 Report.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BID.COM INTERNATIONAL INC.
Date: November 30, 1999 By: /s/ Paul Hart
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Name: Paul Hart
Title: Chief Financial Officer
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Dear Shareholder,
During the quarter, we continued to concentrate on developing our technology
licensing and business to business relationships to supplement our consumer
based business and build for the future. We expanded the reach of our "powered
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by Bid.Com" e-commerce solutions, which includes our patented "Dutch" auction
technology and multiple e-commerce platforms.
Third Quarter Results for the 3 Months Ending September 30, 1999*
Revenue in the third quarter of 1999 increased by approximately 33% to $8.3
million compared to $6.3 million in the third quarter of 1998 and the second
quarter of 1999. Revenues are derived from merchandise sales and shipping
revenue from products sold on www.bid.com and fees from the provision of
Bid.Com's licensed technology and related services.
The gross profit in the third quarter, including licensing and related services,
was $2.0 million, or 23.4% of revenue, compared to a gross profit of $195,000,
or 3.1% of revenue, in the third quarter of 1998, and $1.3 million, or 20.3% of
revenue, in the second quarter of 1999.
Advertising and promotional expenses in the current quarter were $3.4 million,
or 40.9% of revenues, compared to $3.3 million, or 53.1% of revenues, in the
third quarter of 1998. Compared to the second quarter of 1999, advertising and
promotional expenses increased by 83.2% from $1.9 million, or 29.8% of sales.
The increase is primarily attributable to a more aggressive promotional pricing
strategy to maintain site traffic during the traditionally slower summer months
and other paid advertising.
Other operating expenses in the third quarter increased by 14.7% from $3.2
million in the second quarter of 1999 to $3.7 million in the third quarter of
1999. Other operating expenses were $1.7 million in the third quarter of 1998.
The increase from the second quarter of 1999 to the third quarter of 1999
relates primarily to a one-time charge, with the balance related to an increase
in depreciation, amortization and software development and other expenses.
The net loss for the third quarter of 1999 was $5.0 million, or $0.10 per basic
share, compared to a net loss of $4.8 million, or $0.23 per basic share, in the
comparable period of 1998 and a net loss of $3.6 million, or $0.07 per basic
share, in the second quarter of 1999.
Including cash of $29.9 million, working capital at September 30, 1999 was $33.3
million.
During the quarter, Bid.Com received $16 million (net of expenses) of additional
capital through issuance of special purchase warrants through a private
placement. The special warrants, consisting of a unit of one common share and
one share purchase warrant were issued for $9.25. It was subsequently agreed
among the parties that the share purchase warrant be revised from a half warrant
at $12.00 to a full warrant at $10.00.
* All figures are in Canadian dollars. As of September 30, 1999, the exchange
rate was Cdn$1.486 to US$1.00.
Notable Activities
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We are extremely pleased with the calibre of relationships which we developed in
the
third quarter. Our company continues to move toward a multi-revenue stream
business that includes business-to-business and technology licensing
arrangements. Our various agreements generally include, among other benefits, an
ongoing revenue sharing component. Ultimately, we believe, this will yield a
more sustainable, profitable business.
. We strengthened our position in the heavy equipment sector by exercising an
option to increase our stake in Point2 Internet Systems to 51%, one of the
leading heavy equipment dealer listing services in North America.
. We entered into an exclusive three-year technology licensing and services
agreement with ValueVision Interactive Inc., an affiliate of NBC. ValueVision
is pursuing the delivery of the brand SnapTV.com as the first live,
interactive, web-based shopping experience in over 34 million households in
the U.S. Bid.Com will receive a percentage of gross transaction revenues from
the SnapTV declining price auction service in return for Bid.Com providing a
complete e-commerce solution for VVI's "Dutch Auction" component of
ValueVision Interactive's recently announced "Snap TV" brand. Bid.Com will
also be a partner in several future projects involving television and
Internet convergence.
. To establish a presence in the automotive sector, we entered into a
technology licensing and services agreement with Megawheels.com Inc.
Megawheels provides an e-commerce solution to automotive dealers for the sale
of new and used vehicles through its web-site www.megawheels.com and supports
one of Canada's largest automotive online databases. The Company has also
taken an equity position and will receive a percentage of net revenues from
sales generated from the Megawheels auction service.
. We strengthened our presence in the sports memorabilia marketplace by signing
a technology licensing and marketing agreement with Today's Communications,
Inc., which owns www.TodaysSports.com, a prominent sports portal on the
Internet. The new three-year online partnership, which includes a revenue
sharing arrangement, will link the two companies' websites and provide a
significant sports-oriented audience with access to thousands of sports
products and collectibles available for purchase.
We also improved the website design by introducing improved navigational
features, a new fixed price purchasing option, a brighter image and new
corporate logo. Visitors to www.bid.com will also find an improved customer
service section and greater product selection. The ability to offer fixed price
purchasing complements Bid.Com's patented declining price and rising price
auction formats and provides additional opportunities for the Company to enter
into co-branding relationships. Thanks to the ongoing growth of the relationship
between Bid.Com and Rogers, the Company expects its two millionth visitor to the
Canadian website by the end of November.
As we continue to build the business through partnerships, licensing agreements
and global growth, we are most optimistic about our prospects as we approach the
new millennium.
Yours truly,
Jeff Lymburner, President and CEO
The Company does not believe that it has material exposure to Year 2000
complications with respect to its own information systems since its existing
systems correctly define the Year 2000. The Year 2000 issue is the result of
computer programs being written using two digits rather than four to define the
applicable year. As a result,
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date-sensitive software may recognize a date using "00" as the year 1900 rather
than the Year 2000. This could result in system failures or financial
miscalculations causing disruptions of operations, including, among others, a
temporary inability to process transactions, send invoices or engage in similar
normal business activities. The Company has conducted an analysis to determine
the extent to which its major suppliers', service providers' and marketing and
advertising partners' systems (insofar as they relate to the Company's business)
are subject to the Year 2000 issue. However, the Company is currently unable to
predict the extent to which the Year 2000 issue will affect its suppliers,
service providers and marketing or advertising partners, or the extent to which
it would be vulnerable to such parties' failure to remedy any Year 2000 issues
on a timely basis. The failure of a major supplier, service provider or
marketing or advertising partner subject to the Year 2000 issue to convert its
systems on a timely basis, or the conversion of these systems that is
incompatible with the Company's systems, could have a material adverse effect on
the Company's business, results of operations, cash flow, financial condition
and prospects. Most of the purchases from the Company's auctions are paid for
using credit cards. If the bank systems used to process credit card transactions
for a significant portion of transactions on Bid.Com's auction site are not Year
2000 compliant, the Company's operations may be materially and adversely
affected to the extent customers are unable to use their credit cards to make
purchases.
Total costs attributable to Year 2000 compliance efforts, both for past efforts
and present and anticipated future efforts, will be approximately $270,000.
These amounts are expensed as incurred.
Full copies of Bid.Com's Press Releases are available on the Investor
Information Section of its website www.bid.com.
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This quarterly report may include comments that do not refer strictly to
historical results or actions and may be deemed to be forward-looking within the
meaning of the Safe Harbor provisions of the U.S. federal securities laws.
These include, among others, statements about expectations of future revenues
and cash flows. Forward-looking statements are subject to risks and
uncertainties that may cause the Company's results to differ materially from
expectations. These risks include the Company's ability to further develop its
business-to-business and licensing businesses, the Company's ability to develop
appropriate strategic alliances and successful development and implementation of
technology, acceptance of the Company's products and services, competitive
factors, new products and technological changes, and other such risks as the
Company may identify and discuss from time to time, including those risks
disclosed in the Company's amended Form 20-F filed with the Securities and
Exchange Commission. Accordingly, there is no certainty that the Company's
plans will be achieved.
(Financial Tables follow)
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BID.COM International Inc.
Statement of Operations
(expressed in thousands of Canadian dollars, except per share amounts)
(Canadian GAAP, unaudited - prepared by management)
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<CAPTION>
Nine Months Ended Three Months Ended
September 30 September 30
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1999 1999 1998 1999 1999 1998
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(translated into (translated into
US$ at $US = US$ at $US =
Cdn$1.486 for Cdn$1.486 for
convenience) convenience)
<S> <C> <C> <C> <C> <C> <C>
Revenue $ 19,595 $ 13,186 $ 13,676 $ 8,330 $ 5,606 $ 6,281
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Direct expenses 15,886 10,690 13,422 6,377 4,291 6,086
General and administrative 8,481 5,707 3,635 3,205 2,157 1,420
Advertising and promotion 6,681 4,496 8,902 3,408 2,293 3,334
Software development and expense 750 505 494 273 184 171
Depreciation and amortization 425 286 136 245 165 69
32,223 21,684 26,589 13,508 9,090 11,080
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Interest income 531 357 37 168 113 9
Net loss ($12,097) ($8,141) ($12,876) ($5,010) ($3,371) ($4,790)
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Loss per basic share ($0.25) ($0.17) ($0.64) ($0.10) ($0.07) ($0.23)
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Weighted average common shares
outstanding 48,066 48,066 20,768 50,111 50,111 20,826
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September 30, September 30, December 31,
Balance Sheet Data: 1999 1999 1998
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(unaudited) (unaudited) (unaudited)
(translated into
US$ at $US =
Cdn$1.486 for
convenience)
Cash and marketable securities $ 29,861 $ 20,095 $ 16,598
Other current assets 7,639 5,141 3756
Other assets 4,464 3,004 693
Total assets $ 41,964 $ 28,240 $ 21,047
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Total current liabilities 4,599 3,095 2425
Total stockholders' equity 37,365 25,145 18,622
Total liabilities and $ 41,964 $ 28,240 $ 21,047
shareholders' equity ========= ======== =========
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BID.COM INTERNATIONAL INC.
Consolidated Statements of Cash Flows
Expressed in thousands of Canadian dollars
(unaudited - prepared by Management)
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<TABLE>
<CAPTION>
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Nine Months Three Months
NET INFLOW (OUTFLOW) OF CASH RELATED Ended Ended
September 30 September 30
TO THE FOLLOWING ACTIVITIES 1999 1999 1998 1999 1999 1998
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translated into translated into
US$ = Cdn$1.486 US$ = Cdn$1.486
for convenience for convenience
<S> <C> <C> <C> <C> <C> <C>
OPERATING
Net loss for the period ($12,097) ($8,141) ($12,876) ($5,010) ($3,371) ($4,790)
Item not affecting cash
Depreciation and amortization 425 286 136 245 165 69
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(11,672) (7,855) (12,740) (4,765) (3,206) (4,721)
Change in long-term deferred revenue 361 243 - 361 243
Change in non-cash operating working capital items (3,918) (2,637) 3,163 80 54 (335)
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(15,229) (10,249) (9,577) (4,324) (2,909) (5,056)
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INVESTING
Purchase of capital assets (454) (306) (273) (100) (67) (96)
Purchase of trademarks and intellectual property (574) (386) (70) (528) (355) 0
Marketable securities and investments (3,113) (2,095) - 5,025 3,381 (25)
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(4,141) (2,787) (343) 4,397 2,958 (121)
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FINANCING
Issuance of common shares (net of expenses) 12,293 8,273 14,644 1,165 784 12,678
Issuance of special warrants (net of expenses) 16,047 10,799 - 16,047 10,799 -
Special warrants receivable 2,311 1,555 2,189 -
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30,651 20,627 16,833 17,212 11,583 12,678
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NET CASH INFLOW DURING THE PERIOD $11,281 $7,591 $6,913 $17,285 11,632 $7,501
CASH, BEGINNING OF PERIOD 9,792 $6,590 2,177 3,788 2,549 1,589
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CASH, END OF PERIOD $21,073 $14,181 $9,090 $21,073 $14,181 $9,090
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CORPORATE DIRECTORY
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Directors, Officers and Managing Directors
<S> <C> <C>
Investor Relations
Financial Relations Board
675 Third Avenue,
Paul Godin* David Pamenter New York, NY.
Chairman Assistant Secretary and Director 10017
Director Partner, Gowling, Strathy & Henderson
Member of Corporate Governance Committee
Jeffrey Lymburner* Auditors
President and Chief Executive Officer James I. Moskos Deloitte & Touche LLP
Director Executive Vice President, Technology Chartered Accountants
Director Toronto, Ontario, Canada
T. Christopher Bulger*
Executive Vice-President, Business Development Paul Hart Lawyers
Director Chief Financial Officer Gowling, Strathy & Henderson
Partner, HDL Capital Corporation Toronto, Ontario, Canada
Member of Audit Committee1 Mark Wallace,
Executive Vice President and General Baer Marks & Upham LLP
Counsel New York, New York, USA
Corporate Secretary
Charles Walker Gregory Bewsh
CEO and President, Walker Group Inc., Vice President, Investor Relations Stock Exchange Listings
Director Toronto Stock Exchange
Member of Audit Committee/1/ Robert W.A. Joynt Symbol BII
Senior Vice President, Merchandising
Michael Abramsky Nasdaq
President, Rogers New Media Aidan Rowesome, Symbol BIDS
Director Managing Director, European Operations
Member of Corporate Governance Committee
Offices of Bid.com
Dr. Duncan Copeland 6725 Airport Road, Suite 201
President, Copeland and Company Mississauga, Ontario, Web Sites
Director Canada L4V 1V2 www.bid.com
Member of Audit Committee/1/ and 905-672-SHOP(7467) www.internetliquidators.com
Corporate Governance Committee www.dutchauction.com
2701 North Rocky Point Drive, Suite 510
Hamish Sutherland, Tampa, Florida 33609-1013 Registrar & Transfer Agent
Managing Director, Australia and Asia Pacific 813-636-8205 CIBC Mellon Trust Company
PO Box 70390
125 Lower Baggot Street, Toronto Station A
Dublin 2, Toronto, Ontario, Canada
Ireland M5W 2X5
* Member of Executive Committee Shares Outstanding
/1/ The Audit Committee performs the functions of (September 30, 1999)
the Compensation and Stock Option Issued 50,605,444
Committee which are no longer separately Fully Diluted 54,873,918
constituted.
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