<PAGE>
Dear Shareholder,
During the quarter, our continued focus on the development of business to
business (B2B) relationships resulted in several new key strategic alliances and
business to business transactions. We believe that our "powered by Bid.Com" e-
commerce solutions and services, which include our patented "Dutch" auction
process, multiple dynamic pricing formats and Application Service Provider
capabilities both in North America and Ireland, position us to continue to build
our growing business to business activities.
Financial Highlights*
---------------------
The first quarter results reflect the consolidated results of Bid.Com
International Inc. and all subsidiaries for the 3 months ending March 31, 2000.
Revenue in the first quarter of 2000 increased 31.7% to $6.6 million compared to
$5.0 million in the first quarter of 1999. Revenue decreased from $11.4 million
in the seasonally strong fourth quarter of 1999. Revenues are derived from
merchandise sales and shipping revenue from products sold on www.bid.com and
from the provision of Bid.Com's auction enabling technology, consulting and
related services.
Advertising and promotion expenses in the quarter were $3.1 million, or 47.6% of
revenue, compared to $1.4 million, or 28.2% of revenue, for the first quarter of
1999 and $5.2 million, or 45.5% of revenue, in the quarter ending December 31,
1999. Almost all advertising and promotion expenditures during the quarter
related to B2C activities, which continue to be curtailed in favour of a more
significant B2B focus. Promotion of B2B activities will not typically involve
the level of ongoing advertising expenses which has characterized the consumer
sector.
General and administrative expenses were $3.8 million, or 58.2% of revenue, in
the first quarter compared to $2.4 million, or 48.2% of revenue, in the first
quarter of 1999 and $3.9 million, or 34.4% of revenue, in the quarter ending
December 31, 1999. General and administrative expenses included a non-recurring
charge of $1.0 million, increased B2B software development, and additional
expenses associated with opening offices in Ireland and Australia. The
Company's B2B sales and marketing staff increased 60% in the first quarter. This
increase and our R&D expenses were consistent with our B2B initiatives.
The net loss for the first quarter of 2000 was $7.8 million, or $0.15 per basic
share, compared to a net loss of $3.5 million, or $0.09 per basic share, in the
comparable period of 1999 and a net loss of $8.7 million, or $0.17 per basic
share, in the fourth quarter of 1999.
The Company has a working capital position of $15.7 million with $12.9 million
available in cash and marketable securities. The Company also has approximately
$8.9 million of other non-current assets, a significant portion of which are
strategic investments recorded at cost.
* All figures are in Canadian dollars. As of March 31, 2000 the exchange rate
was Cdn$1.4538 to US$1.0000
<PAGE>
Notable Activities
------------------
The Company continued to expand its business to business e-commerce strategy
throughout the quarter. During the quarter, the Company announced the following
key initiatives to enhance acceptance of "powered by Bid.Com" e-commerce
enabling solutions:
. Formed a strategic marketing alliance with General Electric Capital
Corporation, a global diversified financial services company. An integral
part of the alliance is GE Capital's agreement to market "powered by Bid.com"
e-commerce enabling solutions to other divisions of GE and its partners. In
addition, GE Capital's Commercial Equipment Financing division will remarket
assets to its global customer base using the full suite of "powered by
Bid.Com " dynamic pricing solutions.
. Leveraged the strength of its heavy equipment business to business subsidiary
Point2 Internet Systems Inc., into achieving a strategic partnership with GE
Capital. Point2 will integrate GE financing solutions on its website to
provide its customers, dealers, and manufacturers of heavy equipment with
flexible financing products and structures.
. Announced plans to enter into a strategic alliance with a world leader in the
mobile communications market, Research in Motion Limited, to develop and
market products and services that allow secure wireless interaction and
e-commerce transactions using Bid.Com's on-line auction products and services
and RIM's wireless products and services. The two companies will also engage
in joint business development to foster solutions based on RIM's Blackberry
Internet Edition and "powered by Bid.Com" proprietary auction technologies.
. Entered into an agreement with The Art Vault International Limited, to
provide online auction technology and related services to enable the
implementation of The Art Vault's online auction of art and antiques
The relationships entered into this quarter enhanced the Company's transition
into the business to business e-commerce sector. By continuing to align
ourselves with quality organizations such as GE Capital, Research in Motion, and
others, we believe that we are positioning ourselves well to compete in this
space.
Management Changes
------------------
. On April 6, 2000, Paul Godin, Co-Founder and Chairman of the Board announced
that he will step down effective June 14, 2000 at Bid.Com's Annual General
Meeting. Mr. Godin will continue to remain active as a board member, but has
elected to pursue interests in the art world and other areas. He is
currently, and will continue to be, Chairman of The Board for The Art Vault
International Limited.
We feel our exceptional strengths include our technology platform and a growing
nucleus of extremely talented people. As we continue along our chosen path, we
look forward to exciting accomplishments and increased shareholder value.
Yours truly,
Jeff Lymburner, President and CEO May 24, 2000
<PAGE>
Full copies of Bid.Com's Press Releases are available on the Investor
Information Section of its website www.bid.com.
-----------
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,
cash flows, and cash requirements. 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)
<PAGE>
BID.COM International Inc.
Statement of Operations
(expressed in thousands of Canadian dollars, except per share amounts)
(Canadian GAAP, Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31
2000 2000 1999
-------- -------- --------
(translated into
US$ at $US =
Cdn$1.4538 for
Convenience)
Revenue $ 6,604 $ 4,543 $ 5,015
---------------------------------------------------
<S> <C> <C> <C>
Direct expenses 6,943 4,776 4,526
General and administrative 3,841 2,642 2,416
Advertising and promotion 3,141 2,161 1,413
Software development and expense 434 299 186
Depreciation and amortization 256 176 85
---------------------------------------------------
$ 14,615 $ 10,054 $ 8,626
Interest income 248 171 101
---------------------------------------------------
Net loss ($7,763) ($5,340) ($3,510)
===================================================
Loss per basic share ($0.15) ($0.10) ($0.09)
===================================================
Weighted average common
shares outstanding 52,879 52,879 38,529
===================================================
March 31, March 31, Dec. 31,
Balance Sheet Data: 2000 2000 1999
---------------------------------------------------
(unaudited) (unaudited) (unaudited)
(in US$)
Cash $ 12,678 $ 8,720 $ 5,019
Marketable securities 191 132 16,478
Other current assets 5,980 4,113 6,495
Other assets 8,921 6,136 8,751
-------- -------- --------
Total assets $ 27,770 $ 19,101 $ 36,743
======== ======== ========
Total current liabilities 2,520 1,733 5,504
Total short & long-term deferred revenue
3,178 2,186 2,254
Total stockholders' equity See Note (A) 22,072 15,182 28,985
-------- -------- --------
Total liabilities and shareholders' $ 27,770 $ 19,101 $ 36,743
equity ======== ======== ========
</TABLE>
<PAGE>
BID.COM International Inc.
Consolidated Statement of Cash Flows
(expressed in thousands of Canadian dollars, except per share amounts)
(Canadian GAAP, Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31
2000 2000 1999
-------- -------- --------
(translated into
US$ at $US =
NET INFLOW (OUTFLOW) OF CASH RELATED TO Cdn$1.4538 for
THE FOLLOWING ACTIVITIES Convenience)
<S> <C> <C> <C>
OPERATING
Net Loss for the period ($7,763) ($5,340) ($3,510)
Items not affecting cash:
Depreciation and amortization 256 176 85
Other 171 118 -
------------------------------------------------------
(7, 336) (5,046) (3,425)
Change in long term deferred revenue 731 502 -
Change in non-cash operating working
capital items (2,276) (1,565) (3,147)
------------------------------------------------------
($8,881) ($6,109) (6,572)
------------------------------------------------------
INVESTING
Purchase of capital assets (160) (110) (42)
Purchase of trademarks and intellectual
property - - (46)
Marketable securities and investments 16,021 11,020 (7,642)
------------------------------------------------------
15,861 10,910 (7,730)
------------------------------------------------------
FINANCING
Issuance of common shares (net of
expenses) 679 467 9,870
Issuance of special warrants (net of
expenses) - - 2,311
679 467 12,181
------------------------------------------------------
Net cash inflow (outflow) during the
period $ 7,659 $ 5,268 ($2,121)
Cash, beginning of period 5,019 3,452 9,792
------------------------------------------------------
Cash, end of period $ 12,678 $ 8,720 $ 7,671
======================================================
</TABLE>
(A) As of April 28, 2000 stockholders equity included (i) 53,028,854 common
shares (ii) 2,918,150 options to Directors, Officers, and Employees
convertible into 2,918,150 common shares, (iii) 3,594,646 share purchase
warrants exercisable into 3,594,646 common shares and (iv) an additional
warrant convertible into $1,000,000 of common shares at the then prevailing
market price subject to the achievement of certain thresholds.
(B) Certain prior period amounts have been reclassified to conform to the
current period presentation.
<PAGE>
<TABLE>
<CAPTION>
CORPORATE DIRECTORY
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Directors Officers Offices of Bid.Com
6725 Airport Road, Suite 201
Paul Godin Jeffrey Lymburner Mississauga, Ontario
Director and Chairman CEO and President Canada L4V 1V2
Chairman, The Art Vault 905-672-SHOP (7467)
Mark Wallace
Jeffrey Lymburner Chief Operating Officer 2701 North Rocky Point Drive,
Director, CEO and President Suite 930
Jim Moskos Tampa, Florida 33607
T. Christopher Bulger(1) (2) President, USA 813-636-8205
Director Bid.Com Technologies
CEO and President eLab Technology 125 Lower Baggot Street
Ventures Paul Hart Dublin 2, Ireland
Chief Financial Officer 353-1-639-1135
Duncan Copeland (1) (2) (3)
Director Peter Sprukulis Level 50, 101 Collins Street
President, Copeland and Company Senior Vice President, Sales, Melbourne, Australia 3000
Marketing and Business Development 61 (03) 9653-9181
Jim Moskos
Director Rob Joynt Registrar & Transfer Agent
President, Bid.Com Technologies Vice President, Consumer Sales and CIBC Mellon Trust Company
Marketing PO Box 70390
David Pamenter (3) Toronto Station A
Director John Mackie Toronto, Ontario,
Partner, Gowlings Vice President, General Counsel and Canada M5W 2X5
Corporate Secretary
Charles Walker (1) (2) Auditors
Director David Kirkconnell Deloitte & Touche LLP
CEO and President, Vice-President, Human Resources Chartered Accountants
Walker Group Inc. Toronto, Ontario, Canada
Greg Bewsh
Azim Fancy Vice President, Investor Relations Lawyers
Director Gowlings
David Pamenter Toronto, Ontario, Canada
(1) Member of Audit Committee Assistant Secretary
(2) Member of the Management Resources Baer Marks & Upham LLP
and Compensation Committee Aidan Rowsome, New York, New York USA
(3) Member of the Corporate Governance Managing Director, Europe
Committee Stock Exchange Listings
Hamish Sutherland Toronto Stock Exchange
Managing Director, Australia and Symbol BII
Asia Pacific
Nasdaq
Symbol BIDS
Web Sites
www.bid.com
-----------------------------------
www.internetliquidators.com
-----------------------------------
www.dutchauction.com
-----------------------------------
Shares Outstanding
(March 31,2000)
Issued 53,026,854
Fully Diluted 58,521,651
</TABLE>
