SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10SB
Amendment No. 3
GENERAL FORM FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
WORLDBID CORPORATION
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(Exact name of Company as specified in its charter)
NEVADA 88-0427619
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6117 Eagle Road, Unit 122
Whistler, British Columbia, Canada V0N 1B6
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 604-932-6874
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SEC File No. 0-26729
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
None None
Securities to be registered pursuant to Section 12(g) of the Act:
100,000,000 Shares of Common Stock
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(Title of class)
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TABLE OF CONTENTS
Page
COVER PAGE .................................................... 1
TABLE OF CONTENTS ............................................. 2
PART I ........................................................ 3
DESCRIPTION OF BUSINESS ....................................... 3
DESCRIPTION OF PROPERTY ....................................... 26
DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES ....... 26
REMUNERATION OF DIRECTORS AND OFFICERS ........................ 28
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITYHOLDERS .. 28
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS ..... 30
SECURITIES BEING REGISTERED ................................... 31
PART II ....................................................... 33
MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S
COMMON EQUITY AND OTHER STOCKHOLDER MATTERS .............. 33
LEGAL PROCEEDINGS ............................................. 33
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ................. 33
RECENT SALES OF UNREGISTERED SECURITIES ....................... 34
INDEMNIFICATION OF DIRECTORS AND OFFICERS ..................... 34
PART F/S ...................................................... 36
FINANCIAL STATEMENTS .......................................... 36
PART III ...................................................... 37
INDEX TO EXHIBITS ............................................. 37
SIGNATURES .................................................... 38
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PART I
The issuer has elected to follow Form 10-SB, Disclosure Alternative 2.
Item 6. Description of Business
WorldBid Company (the "Company") is an electronic commerce company
which owns and operates an on-line business-to-business world trade
web site. The Company's web site is located on the Internet at
"www.worldbid.com" (the "Web Site"). The Web Site facilitates
business transactions on the Internet by providing an organized and
systematic tool for businesses to post notices of goods for sale and
requests for tender of goods. The Company uses e-mail notifications
in order to enable businesses to connect. The Company has focused on
the international trade market in order to provide an economical
means of enabling businesses from around the world to meet and
transact business.
The Web Site solicits businesses who have products for sale or who
are interested in procuring products for purchase. The Web Site
enables businesses to submit postings on the web site in a systematic
and organized manner. Businesses are connected using a system of
automatic e-mail notifications whereby postings are transmitted to
other businesses within specific categories of interest. Businesses
are then able to contact other businesses directly and negotiate
transactions between themselves without the involvement of the
Company.
CORPORATE ORGANIZATION
Incorporation
The Company was incorporated pursuant to the laws of the State of
Nevada on August 10, 1998 as "TetherCam Systems Corp." The Company
completed a change of name to "Worldbid Corporation" by the filing of
Articles of Amendment with the Nevada Secretary of State on January
20, 1999. From the date of Incorporation until the signing of the
Acquisition Agreement for the WorldBid Internet Business, the Company
conducted no business operations other than a general search and
negotiations for a potential business acquisition.
Subsidiaries
The Company does not have any subsidiaries.
ACQUISITION OF THE WORLDBID INTERNET BUSINESS
Acquisition Agreement
The Company acquired the "WorldBid.Com" Internet business (the
"WorldBid Business") pursuant to an agreement dated February 2, 1999
between the Company, Databoat International Limited ("Databoat") and
Scott Wurtele ("Wurtele"), the principal shareholder of Databoat (the
"Acquisition Agreement"). The Company, Databoat, On Line Design
Ltd. and Wurtele entered into an amendment
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to this Acquisition Agreement dated September 10, 1999 (the
"Acquisition Amendment Agreement") whereby the parties agreed to
terminate various agreements set forth in the Acquisition Agreement.
The terms and conditions of the Acquisition Agreement, the Acquisition
Amendment Agreement and the agreements executed pursuant to the
Acquisition Agreement and the Acquisition Amendment Agreement are
summarized below.
Original Escrow Agreement
The Company issued to Databoat a total of 3,000,000 restricted shares
of common stock of the Company (the "Databoat Shares") upon closing
of the Acquisition. The Company and Databoat agreed that the
Databoat Shares would be held in escrow for a period of four years on
the terms and conditions of an escrow agreement dated February 16,
1999 between the Company, Databoat and Cane & Company, the attorneys
for the Company (the "Escrow Agreement"). The Databoat Shares will
be released to Databoat over a period of four years in accordance
with the escrow release schedule in the Escrow Agreement. The
Escrow Agreement has been replaced and superceded by an amended
escrow agreement between the Company and Databoat, as discussed
below.
Original Management Consulting Agreement
The Company entered into a consulting agreement with Wurtele and On
Line Design Ltd. for the services of Wurtele and On Line Design Ltd.
on closing of the Acquisition Agreement (the "Original Management
Consulting Agreement"). On Line Design is a private British
Columbia company, all of the shares of which are owned by Wurtele.
The Original Management Consulting Agreement was terminated on
September 10, 1999 by the agreement of the Company, On Line Design
and Wurtele, as set forth in the Acquisition Amendment Agreement. At
that time, the Company, On Line Design Ltd. and Wurtele entered into
an amended management consulting agreement (the "Amended Management
Consulting Agreement"). The terms and conditions of the Amended
Management Consulting Agreement are discussed below under the heading
"Item 6. Business - Employees."
The services of Wurtele were provided to the Company pursuant to the
Original Management Consulting Agreement from February 16, 1999 to
September 10, 1999. The consulting services provided were agreed to
include management of the WorldBid Business as well as meeting with
and making presentations to potential investors of the Company. The
Company paid to On Line Design a management consulting fee of $5,000
US per month in consideration for On Line Design providing the
consulting services of Wurtele. The Company also paid to On Line
Design a bonus of $5,000 upon execution of the Original Management
Consulting Agreement and an additional bonus of $10,000 at the three
month anniversary of the commencement of the Original Management
Consulting Agreement. The consulting services included management and
continued development of the WorldBid Business. The term of the
Management Consulting Contract was originally for a period of one
year expiring on February 16, 2000.
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Prior to execution of the Acquisition Amendment Agreement, the
Acquisition Agreement had provided that Databoat would have the
option to cause the WorldBid Business to be returned to Databoat in
the event the Company defaulted on its obligations pursuant to the
Original Management Consulting Agreement. As discussed below, the
parties have terminated this right pursuant to the Acquisition
Amendment Agreement.
Terms and Conditions of Acquisition Agreement
The Company issued the Databoat Shares to Databoat pursuant to the
Acquisition Agreement in consideration of the transfer by Databoat to
the Company of the assets, technology, property and rights comprising
the WorldBid Business as it existed at closing on February 16, 1999.
The Acquisition Agreement provided for circumstances in which the
WorldBid Business could have been transferred back to Databoat at the
option of Databoat. These circumstances were: (i) the failure of the
Company to advance to the WorldBid Business a total of $300,000 by
February 16, 2000 in accordance with the schedule of advances
incorporated into the Acquisition Agreement; (ii) the termination of
the Original Management Consulting Agreement as a result of the
failure of the Company to perform its obligations; and (iii) the
failure of the shares of the Company to be listed or quoted for
trading on any public trading market within 18 months of the closing
of the Acquisition Agreement. In the event that the WorldBid Business
was transferred back to Databoat, the Databoat Shares would be
returned to the Company and canceled. Databoat has agreed to
terminate its right to cause the WorldBid Business to be transferred
back to Databoat by execution of the Acquisition Amendment Agreement.
The Acquisition Agreement also provided that Company could cause
Databoat to return the Databoat Shares to the Company for
cancellation in the event that the Company determined not to proceed
with the development of the WorldBid Business. The WorldBid
Business would have been transferred back to Databoat in the event
that the Company had exercised this option. The Company has agreed
to terminate its right to cause the Databoat Shares to be returned to
the Company by execution of the Acquisition Amendment Agreement.
In the event that either the Company or Databoat had exercised their
respective rights to cause the Databoat Shares to be returned to the
Company and the Business to be returned to Databoat, then the Company
would have had no business assets, but would have retained any cash
raised through equity financings and not applied to the Business. As
discussed below, the rights of both the Company and Databoat to cause
the Databoat Shares to be returned to the Company and the Business to
be returned to Databoat were terminated upon execution of the
Acquisition Amendment Agreement.
The Acquisition Agreement also provided that the directors of the
Company would consist of Logan Anderson and two representatives of
the group providing financing to the Company, as directed by Logan
Anderson, until February 15, 2000. After February 15, 2000, the
directors of the Company were agreed to consist of Scott Wurtele,
Logan Anderson or his nominee, and one representative appointed by
Databoat.
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Terms and Conditions of the Acquisition Amendment Agreement
The Company entered into the Acquisition Amendment Agreement with
Databoat, On Line Design and Wurtele on September 10, 1999 in order
to reflect the agreement of the parties that the WorldBid Business
had achieved certain milestones that justified amendment to the
original Acquisition Agreement and the agreements executed pursuant
to the Acquisition Agreement. The material terms of the Acquisition
Amendment Agreement are summarized as follows:
(1) The Company agreed to terminate its right to elect not to pursue
development and commercialization of the Business and to cause
Databoat to deliver the Company Shares back to the Company.
(2) Databoat agreed that the Company had completed the expenditures
required to be spent on the Company's business plan in the
amounts required by the Acquisition Agreement. Accordingly,
Databoat agreed to terminate its right to cause the WorldBid
Business to be returned to Databoat in the event that the
Company did not advance to the WorldBid Business sufficient
funds for the Company to complete the expenditures set forth in
the Company's business plan.
(3) Databoat agreed to terminate its right to purchase the Business
from the Company in the event that the shares of the Company
were not listed or quoted for trading on any public trading
market within the time frame specified in the Acquisition
Agreement.
(4) Wurtele agreed to provide his services to the Company pursuant
to an amended management consulting agreement dated September
10, 1999 (the "Amended Management Consulting Agreement").
Accordingly, the parties agreed to terminate the Original
Management Consulting Agreement. In addition, Databoat agreed
to terminate its right to cause the WorldBid Business to be
returned to Databoat in the event that the Company defaulted on
its obligations pursuant to the Original Management Consulting
Agreement.
(5) The Company and Databoat agreed to enter into an amended escrow
agreement with Cane & Company, as escrow agent, dated September
10, 1999 (the "Amended Escrow Agreement") in order to give
effect to the agreement of the parties to terminate the rights
of the Company and Databoat to cause the WorldBid Business to be
returned to Databoat and the Databoat Shares to be returned to
the Company.
(6) Wurtele agreed to join the board of directors of the Company.
(7) The Agreement with respect to the appointment of directors of
the Company, as set forth in the Acquisition Agreement, was
amended to provide that: (i) Scott Wurtele would be appointed a
director of the Company effective September 10, 1999; and (ii)
the board of directors of the Company would consist of five
directors as of February 16, 2000, two being appointed as
nominees of Logan Anderson and three being appointed as nominees
of Scott Wurtele. Wurtele is to be appointed Chairman and Logan
Anderson is to continue as Chief Executive Officer.
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Amended Escrow Agreement
Cane & Company, LLC continues to hold the Databoat Shares in trust
pursuant to the Amended Escrow Agreement. The Amended Escrow
Agreement provides that the Databoat Shares are to be released to
Databoat over a period expiring February 15, 2003, in accordance with
the escrow release schedule in the Amended Escrow Agreement.
Databoat will be entitled to exercise all voting rights of the
Databoat Shares held in escrow throughout the term of the Amended
Escrow Agreement.
Agreements Attached as Exhibits
A copy of the Acquisition Agreement, the Escrow Agreement, the
Original Management Consulting Agreement, the Acquisition Amendment
Agreement, the Amended Escrow Agreement and the Amended Management
Consulting Agreement are attached to this registration statement as
an exhibit. The information provided in this registration statement
with respect to each of these agreements is qualified in its entirety
by reference to the complete texts of each agreement.
DEVELOPMENT OF THE WORLDBID BUSINESS
The development of the Web Site was started by Databoat in September,
1998. While the Web Site was operational at the time of its
acquisition by the Company, the Company determined that the
functionality and presentation of the Web Site required upgrading
prior to the Company being able to market and solicit advertisements
for the Web Site.
The Company has proceeded with the development of the WorldBid
Business since completion of its acquisition from Databoat. The
Company's development of the Web Site has included a complete
restructuring of the Web Site which was comprised of the following
elements:
1. Re-design of the graphics and presentation of the Web Site;
2. Expansion of the functionality of the Web Site to include
additional features, including posting of goods offered for sale
and expanded e-mail notifications capabilities;
3. Expansion and upgrading of the Company's computer hardware and
programming in order to expand the functionality and capacity of
the Web Site;
4. Addition of search capabilities in order that users can search
for products by description or product codes;
5. Expansion of the number of categories within the Web Site from
20 to 420.
The Company incurred expenses in the amount of $30,301 in connection
with software development and development of the Web Site from
February 15, 1999 to April 30, 1999. These software and web site
development expenses included the activities described above.
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The Web Site is presently fully operational. The Company has reached
a database of over 8,000 business parties who have completed postings
on the Web Site. The Company completed over 3,800,000 e-mail trade
notifications during October, 1999.
With the restructuring of the Web Site complete, the Company is now
commencing the marketing of the advertising potential of the Web Site
in order that the Company can start to earn revenues.
FUNCTION OF THE WORLDBID WEB SITE
The Web Site is used by businesses as follows:
Buyers
Each business interested in purchasing a product is given the
opportunity to place a "Request for Tender/ Procurement/ or Offer to
Buy" on the Web Site. Each business user selects the applicable
category for their area of interest and enters in a description of
the products or services sought, together with the contact and e-mail
information. Each request for tender is automatically delivered by
e-mail to each business that has entered the Web Site and entered its
contact information with the request that they receive information
regarding specific products or services. Each business can also
enter its e-mail address in order to receive e-mail notifications
from potential sellers in their category of interest.
Sellers
Each business that is interested in completing a sale is given the
opportunity to post offers to sell on the Web Site. Each business
user selects a category of their offer for sale and then enters in a
description of the products or services to be sold, together with the
business users' contact and e-mail information. Each offer to sell
is automatically delivered by e-mail to each business that has
entered the Web Site and entered its contact information with the
request that they receive information regarding specific products or
services which are offered to sale. Each business which is
interested in completing a sale can also enter its e-mail address in
order to receive e-mail notifications from potential purchasers in
their category of interest.
Requests for E-Mail Notifications
The Web Site can also be used by businesses that do not wish to enter
requests for tender or offers for sale. Business users may select a
category of interest and view posted requests for tenders and offers
to sell. Business users may enter their e-mail contact information
in order to receive notifications of any request for tender or offer
to sell within a category of interest.
Categories
The format of the Web Site allows for a broad variety of categories
and sub-categories, thereby appealing to a wide variety of potential
business users. Businesses can request additional categories and
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sub-categories at the Web Site by e-mailing the Company via the Web
Site. The Company believes that this flexible format will enable the
Company to attract a broad range of businesses who presently do not
have any conventional means of requesting tenders or obtaining
requests for their products or services. The global nature of the
Internet and its ability to be accessed world-wide enables the Web
Site to be used by businesses to access markets outside their
geographic region. The Company's experience is that approximately
75% of the users of the Web Site who have posted requests for tender
or offers for sale on the Web Site are from countries outside of the
United States.
Development Focus
The Company has developed the format of the Web Site in order to
encourage use by businesses from around the world in the
international trade community. The Company believes that the
international focus of the Web Site offers a competitive advantage
over competing trade sites which often limit their focus to specific
geographic regions. The Company has also focused on enabling the Web
Site to facilitate trade in goods which are often the subject of
international trade, such as industrial goods and commodities.
No Auction or Transaction Completion Process
The Web Site does not conduct any auction or similar transaction
completing process. The Web Site is a means for interested parties
to make contacts and pursue negotiations between themselves. The
Company is not involved in the negotiation of the price or any terms
of any contract between potential purchasers and suppliers.
REVENUES
The Company's business plan is to use the Web Site to earn revenues
from the following sources:
1. advertising placed on e-mails which are transmitted via the Web
Site to businesses;
2. usage fees charged to businesses for posting requests for tender
and offers for sale on the Web Site;
3. referral fees earned by the referral of users of the Web Site to
web sites operated by other companies.
Advertising Revenues
The Company plans to sell advertising placed on e-mails which are
transmitted via the Web Site to businesses. The Company has started
to enter into advertising sales contracts on a trial basis. The
Company has achieved minimal revenues from advertising to date.
Advertising on e-mails is a new and emerging means of advertising
products and services using the Internet. The Company plans to use
its business format and the e-mail notifications generated by use of
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the Web Site to sell advertising on e-mail notifications. The
Company will target advertisers involved in the business of trade and
international trade and advertising agencies with clients involved in
the business of trade and international trade. The targeted
marketing group will include companies such as over-night courier
services, insurance agents and customs brokers as potential
advertisers on the Web Site. The Company anticipates advertising
revenue would be based on a fee per number of e-mails delivered.
Advertising on e-mails is a new form of advertising that has yet to
achieve broad based commercial acceptance. The Company anticipates
having to incur significant market efforts in order to persuade
advertisers of the benefits of advertising on e-mails. The Company
is pursuing negotiations with advertising agencies as a means of
concentrating its market efforts. Advertising agencies have multiple
clients to whom they may present the Company's advertising format.
The Company has determined that independent verification of use of
the Web Site and e-mail notifications is an essential element of the
Company being able to market the advertising potential of the Web
Site. Accordingly, the Company has retained an independent auditor
to verify the e-mail notifications sent by the Company via the Web
Site. Independent audit reports will be submitted to advertising
agencies and potential advertisers as support for the Company's
claimed e-mail notification rates.
Fee for Posting Requests for Tenders and Offers for Sale
The Company is considering charging fees for permitting businesses to
make postings on the Web Site. The Company has not charged any fees
to businesses using the Web Site to date in order to encourage usage
of the Web Site and to expand the base of businesses using the Web
Site and receiving e-mail notifications.
The Company is in the process of evaluating this revenue opportunity
as usage of the Web Site increases. The Company plans to charge fees
to businesses once the volume of usage on the Web Site has increased
to a level where businesses are prepared to pay a fee to post
requests for tenders and to receive e-mail information.
Referral Arrangements
The Company also proposes to pursue arrangements with other companies
whereby the Company may earn a commission or fee based on referral
made to web sites operated by other companies. The Company presently
does not have any revenue earning referral arrangements in place.
Future Revenue Streams
The Company will continually evaluate alternate revenue streams for
the Web Site and the WorldBid Business. The Internet electronic
commerce market is rapidly evolving and presenting businesses with
new revenue opportunities. This rapid evolution can also result in
existing revenue streams being reduced or eliminated due to
technological change and competition.
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BUSINESS DEVELOPMENT STRATEGY AND PLAN OF OPERATIONS
The business objective of the Company is to establish the Web Site as
the premier business-to-business Internet web site for world trade.
The Company believes that the achievement of this objective will
result in increased usage of the Web Site by businesses and increased
volumes of e-mail notifications being transmitted by the Company.
The achievement of increased use of the Web Site and transmission of
e-mail notifications are essential components of the Company being
able to achieve revenues.
The Company's plan of operations for the next twelve months involves
pursuing its business objectives using the following key business
development and marketing strategies:
Develop Advertising Sales for the Web Site
The Company plans to develop relationships and arrangements with
advertising agencies and advertisers who are prepared to advertise on
e-mail notifications transmitted via the Web Site. The Company will
attempt to enter into its first advertising contracts for the Web
Site. The Company plans to use the independent audit report of usage
of the Web Site and e-mail notification transmissions as a basis for
commencing sales to advertisers directly and through advertising
agencies.
Evaluate Implementation of Usage Fees for the Web Site
The Company will continue the evaluation of charging usage fees to
businesses using the Web Site. The Company anticipates commencing
to charge usage fees to businesses once the Company has determined
that usage of the Web Site has increased to a level where businesses
are prepared to pay to place postings on the Web Site without a
significant decrease in overall usage of the Web Site
Initiate Advertising and Promotional Campaigns for the Web Site
The Company will attempt to increase the visibility and brand
recognition of the WorldBid Business through a variety of marketing
and promotional techniques.
The Company intends to undertake an advertising program now that the
restructuring of the Web Site has been completed. The advertising
campaign may involve advertising on complementary Internet web sites
and in complementary print media. The Company has yet to finalize
any advertising campaign. There is no assurance that any advertising
campaign undertaken by the Company will be successful in increasing
usage of the Web Site.
The Company will pursue co-marketing arrangements with other web-
sites on the Internet through cross-linking. The Company may post
links to other web-sites in return for the other web-sites posting
the Company's links. The Company proposes to pursue cross-linking
only where there is the potential of a mutually beneficial
relationship with other web-sites.
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The Company will also use consistent graphics and presentation to
reinforce brand recognition with users.
The Company believes that broad based recognition of the Web Site is
essential to the success of the WorldBid Business. The business of
the Company and its financial performance will be harmed if the
Company is not successful in building strong recognition of the Web
Site.
Offer a Unique Internet World Trade Site
The Company has developed the format of the Web Site to be a unique
Internet web site for business-to-business electronic commerce by
using its system of e-mail notifications. The system of e-mail
notifications differentiates the Web Site from other web sites which
simply offer the ability to post offers for sale or requests for
tender. The Company will pursue additional features for the Web
Site in order to increase the level of service to business to users
and to further differentiate the Web Site from competing web sites.
Expand the Features of the Web Site
The Company will pursue additional features for the Web Site in order
to enhance the functionality of the Web Site. Features to be added
to the Web Site to expand its functionality may include:
1. Adding translation software to e-mail notifications in order
that businesses can communicate in their first language;
2. Addition of additional categories of products and services;
3. Hypertext links to other complementary trade sites which would
provide businesses with information which may be helpful in
completing business transactions;
4. Filtering options for users conducting searches on the Web Site;
5. Multi-lingual pages within the Web Site.
The Company recognizes that competition will demand that the design,
operation, functionality, features and capacity of the Web Site be
continually upgraded. The Company plans to evaluate upgrades to the
design, operation, functionality and capacity of the Web Site on an
ongoing basis.
Promote Repeat Visits by Users
The Company has designed its Web Site with an attractive presentation
and with functional and easy to use features with the objective of
encouraging repeat usage of the Web Site. The Company has recognized
that potential users may not have strong computer skills or may not
have English as their primary language. According, the Company will
continue its focus on making the Web Site easy to use and intuitive.
The Company believes that repeat usage will lead to a greater number
of businesses
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entering postings on the Web Site and a greater number
of e-mail notifications being transmitted through the Web Site.
Monitor Usage of the Web Site and Develop User Profiles
The Company believes that increased information regarding the
businesses using the Web Site will assist the Company in marketing
the Web Site and developing revenues and business transactions which
are completed via the Web Site. At present, the Company gathers
minimal information regarding users of the Web Site. The Company is
proposing to expand the capability of the Web Site to obtain personal
and business profile information regarding businesses using the Web
Site. This information will assist the Company in marketing the Web
Site to advertisers who may be prepared to pay to advertise on the
Web Site and on e-mail notifications. Information regarding the
location, nature of business, wealth and other marketing criteria of
users of the Web Sites will assist in developing user profiles which
will assist in marketing the advertising potential of the Web Site.
The Company will not disclose the private information of any user of
the Web Site and will not sell any e-mail addresses. Any information
used by the Company will be used exclusively for the purpose of
establishing user profiles to assist in the sale of advertising of
the Web Site. Any information presented in an aggregated format to
establish user profiles and market characteristics.
The Company Expects Operating Losses
The Company incurred a loss of $40,086 for its first fiscal year
ending April 30, 1999. The Company expects that the stated plan of
operations will result in operating losses until such time as
significant revenues are achieved. This expectation is based in part
on the following:
1. The Company will incur substantial marketing expense in order to
advertise and promote the Web Site and increase usage of the Web
Site
2. The Company expects that increase usage of the Web Site will
lead to increased operating expenses and require additional
capital expenditures on new computer equipment, software and
technology.
3. The Company expects operating expenses to continue to increase
as the Company expends the functionality and technical
capabilities of the Web Site.
4. The Company expects operating expenses to increase as the
Company solicits potential advertisers and attempts to enter
into agreements for advertising on the Web Site.
5. The Company expects operating expenses to increase as the
Company undertakes to implement programs to monitor usage of the
Web Site and develop customer profiles of Web Site users.
While the Company has received some revenues from its business
operations, the revenues received to date are minimal in comparison
to the Company's current operating expenses. In general, the Company
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expects to incur operating losses for the foreseeable future. To the
extent that increases in operating expenses are not matched by
increased revenue, the Company's business, operating results and
financial condition will be harmed.
The Company's plan of operations includes forward looking statements.
Actual results of the Company and the Company's actual plan of
operations may differ materially from the stated plan of operations.
Factors which may cause the actual results of the Company or its
actual plan of operations to vary include decisions of the board of
directors not to pursue the stated plan of operations based on re-
assessment by the board of directors of the plan which is in the best
interests of the Company, changes in the Internet business or general
economic conditions.
EMPLOYEES
As of November 23, 1999, the Company had two employees, including Mr.
Logan Anderson, President of the Company and Mr. Howard Thomson,
Secretary/ Treasurer of the Company. In addition, the Company has
ten (10) full-time equivalent contract personnel.
The services of Mr. Logan Anderson as President of the Company are
provided pursuant to an employment agreement dated August 31, 1999
between the Company and Mr. Anderson (the "Anderson Employment
Agreement"). The services provided by Mr. Anderson pursuant to the
Anderson Employment Agreement include exercising general direction
and supervision over the business and financial affairs of the
Corporation, providing overall direction to the management of the
Corporation and performing such other duties and observing such
instructions as may be reasonably assigned to his from time to time
in his capacity of President by the Board of Directors. Mr. Anderson
is required to devote approximately 15% of his business time to the
business of the Company until such time as the Company's positive
working capital equals or exceeds $750,000 at which time Mr. Anderson
has agreed to devote approximately 80% of his business time to the
Company to the business of the Company. The Company currently pays
Mr. Anderson a salary of $1,000 per month. The Anderson Employment
Agreement provides that this salary will increase to $7,500 per month
upon Mr. Anderson being required to devote 80% of his business time
to the business of the Company. The term of the Anderson Employment
Agreement is for a term of one year, provided that the Company can
terminate without cause upon the payment to Mr. Anderson of an amount
equal to the greater of $30,000 or six months salary. Mr. Anderson
may terminate the Anderson Employment Agreement upon three months
written notice to the Company. The Anderson Employment Agreement
may only be renewed for additional terms upon the written agreement
of Mr. Anderson and the Company, including agreement upon the salary
for the subsequent term. Mr. Anderson provided his services to the
Company from February 15, 1999 to August 31, 1999 without cost to the
Company. Mr. Anderson devotes approximately15% of his business time
to the business of the Company.
The services of Mr. Howard Thomson as Secretary and Treasurer of the
Company are provided pursuant to a written employment agreement dated
August 31, 1999 between the Company and Mr. Thomson (the "Thomson
Employment Agreement"). The services provided by Mr. Thomson
pursuant to the Thomson Employment Agreement include ensuring
that proper records of the Company are maintained, supervising and
advising on the conduct of the financial affairs of the Company,
ensuring
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that proper financial and administrative records are
maintained by and for the Company and coordinating all auditing
functions of the Company. Mr. Thomson is required to devote
approximately 15% of his business time to the business of the Company
until such time as the Company's positive working capital equals or
exceeds $750,000 at which time Mr. Thomson will be required to devote
approximately 80% of his business time to the Company to the business
of the Company. The Company currently pays Mr. Thomson a salary of
$750 per month. The Thomson Employment Agreement provides that this
salary will increase to $5,000 per month upon Mr. Thomson being
required to devote 80% of his business time to the business of the
Company. The term of the Thomson Employment Agreement is for a term
of one year, provided that the Company can terminate without cause
upon the payment to Mr. Thomson of an amount equal to the greater of
$22,500 or six months salary. Mr. Thomson may terminate the Thomson
Employment Agreement upon three months written notice to the Company.
The Thomson Employment Agreement may only be renewed for additional
terms upon the written agreement of Mr. Thomson and the Company,
including agreement upon the salary for the subsequent term. Mr.
Thomson provided his services to the Company from February 15, 1999
to August 31, 1999 for a monthly consulting fee of $750 per month.
Mr. Thomson devotes approximately 15% of his business time to the
business of the Company.
The services of Mr. Scott Wurtele, as operations manager of the
Company, are provided pursuant to the "Amended Management Consulting
Agreement dated September 10, 1999 between the Company, On Line
Design and Mr. Wurtele. The services provided by Mr. Wurtele
pursuant to the Amended Management Consulting Agreement include
management of the day to day operations of the WorldBid Business.
Management of the day to day operations of the WorldBid Business are
deemed to include meeting with and making presentations to potential
investors of the Company. The term of the Amended Management
Consulting Agreement is for a term expiring on February 15, 2001.
The Company currently pays On Line Design a consultant fee of $5,000
per month pursuant to the Amended Management Consulting Agreement.
The consultant fee will increase to $7,500 per month for the period
from February 15, 2000 to February 15, 2001. Mr. Wurtele provided
his services to the Company from February 15, 1999 to September 10,
1999 pursuant to the Original Management Consulting Agreement. As
discussed above, the Original Management Consulting Agreement was
terminated upon execution of the Amended Management Consulting
Agreement. Mr. Wurtele devotes all of his business time to the
business of the Company.
The names and duties of the Company's full-time equivalent contract
personnel are as follows:
Name of
Consultant Duties
---------- ------
Aaron McNeal Head Programmer; E-mail Notifications, Security
Jonathan Knopp Advertisement Management Software
Paul Wagorn Automation of Postings
Nick Sysek Sales
Gordon Merkel Marketing and Customer Relations
Ken Domries Electronic Marketing
Wendy Wurtele Administration; Accounting; Payroll;
Web Site Graphic Design
Daniel Wurtele Web Site Design and Operation
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Penny Domries Postings Review
The Company has entered into written consulting agreements with each
of the above contract personnel. Each consulting contract is
terminable by the Company at the Company's option without penalty on
not more than one month's notice. The Company provides each full
time consultant with a computer and related peripherals in order that
the consultant can perform their services to the Company. The
consultants provide their services from their personal residences
using the Internet and a corporate Intranet to access the Company's
servers and communicate with the Company's head office. The Company
retains ownership of any computer and related peripherals provided to
any full time consultant.
The Company's future performance depends upon the continued
contributions of members of senior management and other key
personnel. The Company does not have long-term employment agreements
with any of its key personnel and does not maintain key person life
insurance. Competition for attracting and retaining personnel in the
industry is intense, and the Company needs to succeed in the future.
If one or more of its key personnel leaves and/or joins or forms a
competitor, this could have a harmful effect on the Company's
business.
TECHNOLOGY
The Company uses a combination of proprietary technology and
commercially available licensed technology to operate the Web Site.
Proprietary Technology
The Company is the owner of proprietary software developed by the
Company which is incorporated into the Web-Site. This proprietary
software includes search engine software, advertising management
software and certain web site management tools. The Company
continues the development of proprietary software to enhance and
expand the capabilities of the Web-Site in circumstances where
commercial third party software is not available. The Company
believes that this continued development is essential to the
commercial success of the WorldBid Business.
Operations
The Company owns the servers that host the Web-Site. The Company
acquired its servers in May, 1999. The Company's server is located
in Vancouver, British Columbia on the premises of NetNation
Communications Inc., the Company's Internet service provider, at
2040-555 West Hastings Street, Vancouver, British Columbia.
NetNation Communications provides the Company with the following
services: Internet connection services, Internet band-with, and
storage of the Company's servers at NetNation Communications
premises. The Company does not have any agreement directly with
NetNation Communications but receives services through an Internet
service provider agreement between NetNation Communications and
Databoat. The Company pays a monthly fee to Databoat as reimbursement
to Databoat of the expenses incurred by Databoat in connection with
the services provided by NetNation. This expense is approximately
$1,000 per month and varies according to band-
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width consumed by the Company. The Company anticipates that this
expense will increase as usage of the Web Site and the volume of e-mail
notifications delivered increases. Databoat had provided these services
at no cost to the Company for a four month period following the
execution of the Acquisition Agreement. The Company currently pays
a monthly fee to the Company's system administrators who manage,
monitor and operate the Web Site via remote access.
The operation of the Company's servers that host the Web Site depends
on operating system software, database software, and server software
that has been developed, produced by and licensed from third parties.
The Company licenses commercially available technology whenever
possible instead of purchasing custom-made or internally developed
solutions. The software licensed by the Company is commercially
available software and is not software developed specifically for the
Company.
Internet Gateway
The Company does not own a gateway onto the Internet, but instead
relies on an Internet service provider to connect the Web Site to the
Internet. The Company uses Internet service providers to provide
connectivity to the Internet, Internet traffic and data routing
services and e-mail services. The Internet service provider provides
the Company with a high speed Internet access line to the World Wide
Web. The Company believes that these telecommunication and Internet
service facilities will need to be upgraded in the future as usage of
the Web Site increases.
INTELLECTUAL PROPERTY AND OTHER PROPRIETARY RIGHTS
The Company's performance and ability to compete are dependent to a
significant degree on its proprietary technology. The Company relies
on a combination of trademark, copyright and trade secret laws, as
well as confidentiality agreements and non-compete agreements
executed by employees and consultants as measures to establish and
protect its proprietary rights.
The Company has applied for registration of the "WorldBid" trademark
in the United States. The Company submitted an application to the
United States Patent and Trademark Office on June 4, 1999 for a
service mark "WORLDBID" for use in connection with the services
provided by the Company. There can be no assurance that the Company
will be able obtain a trademark for "WorldBid" or to secure
significant protection for its service marks or trademarks. If
granted, the issuance of a trademark will not be definitive of the
Company's right to use the trademark in conjunction with the
Company's services. The Company's rights would be subject to (i) the
Act of July 5, 1946 (U.S.C. 1051 et. Seq., as amended); (ii) state
and common low rights which generally confer rights based, among
other things, on having been the first person to use the trademark,
the distinctiveness of the trademark and the potential confusion with
other trademarks, whether registered or not.
The Company is the owner of the "www.worldbid.com" domain name. It
is possible that competitors of the Company or others will adopt
Internet domain names or product or service names similar to
"WorldBid", thereby impeding the Company's ability to establish
recognition and usage of the Web Site and creating confusion amongst
users and potential users of the Web Site.
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RESEARCH AND DEVELOPMENT EXPENDITURES
Since the acquisition of the WorldBid Business in February, 1999, the
following amounts have been spent by the Company on research and
development activities:
February 16, 1999
To
April 30, 1999
-----------------
Research and Development Operating Expenditures: $29,137
Development Expenditures Capitalized as Assets: $30,301
-------
Total Research and Development Expenditure $59,438
=======
Research and development activities have consisted of the development
of the Web Site and programming and software developments associated
with the Web Site.
INDUSTRY BACKGROUND
Growth of the Internet and the World Wide Web (the "Web")
The Internet and the Web are experiencing dramatic growth in terms of
the number of Web users. The growth in the number of Web users and
the amount of time users spend on the Web is being driven by the
increasing importance of the Internet as a communications medium and
an information resource and a sales and distribution channel.
Growth of Online Electronic Commerce
The Internet is dramatically affecting the methods by which consumers
and businesses are buying and selling goods and services. Electronic
commerce offers the opportunity for businesses to establish new
competitive standards by expanding distribution channels, integrating
internal and external processes and offering a cost-effective method
of providing products and services. The Internet provides online
businesses with the ability to reach a global audience and to operate
with minimal infrastructure, reduced overhead and greater economies
of scale, while providing consumers and businesses with a broad
selection, increased pricing power and unparalleled convenience. As a
result, a growing number of parties are transacting business on the
Web.
The World Trade Market on the Internet
The Company has identified a need in the international business
community for an Internet web site which can connect businesses
involved in national and international trade at an economical cost.
The traditional methods of information delivery and communications
between businesses involved in international trade, including trade
magazines, telephone and trade conferences, contain inherent
inefficiencies, including:
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A. Trade publications and print media are costly and offer limited
circulation;
B. Expansion of business beyond traditional boundaries is expensive
due to the high cost of marketing, travel and promotional
expenses;
C. Language barriers limit the ability of businesses to
communicate.
The Internet provides a medium for business throughout the world to
communicate and start the process of entering into business
transactions. The Company proceeded with the acquisition of the
WorldBid Business with the objective of capitalizing on the demand
for a world trade Internet web site.
COMPETITION
While the Company's objective is to develop a unique world trade
Internet web site, the Company currently or potentially competes with
a variety of other companies depending involved in facilitating
business transactions via the Internet. These competitors include:
(i) direct competing Internet web sites, including VerticalNet.Com,
Inc., Tradecompass.com, Chemdex.com, Plasticnet.com, commerceone.com
and the United Nations Trade Web Site businesses; (ii) traditional
business-to-business competitors that are attempting to expand their
existing businesses to electronic commerce; and (iii) traditional
business-to-business advertising and commerce competitors, including
trade magazines and trade associations
The Company's business plan anticipates that revenue will be earned
from advertising revenue. There is no assurance that potential
advertising revenues will not decrease with the growth in electronic
commerce and competition from competitors. The presence of existing
or future competition may impair the ability of the Company to charge
user fees to businesses who place postings on the Web Site and
receive e-mail notifications.
The Company anticipates that competition in the electronic commerce
market will increase in the future as electronic commerce is
characterized by low barriers to entry. Moreover, current and
potential competitors may expand the capabilities of their web sites
to compete directly with the Web Site. Accordingly, it is possible
that new competitors or alliances among competitors may emerge and
attract users and potential users from the Web Site. In addition,
potential users may elect to sell their products directly without use
of the Web Site.
Increased competition may result in the reduction in potential
advertising and usage fees, the reduction of user of the Web Site and
the inability of the Company to generate business acceptance of the
Web Site. Each of these factors would likely result in increased
operating costs and the inability to generate revenues, any one of
which could materially adversely affect the Company's business,
results of operations and financial condition. Many of the Company's
current and potential competitors have significantly greater
financial, marketing, customer support, technical and other resources
than the Company. As a result, such competitors may be able to
attract potential users away from the Web-Site,
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<PAGE>
and they may be able to respond more quickly to changes in customer
preferences or to devote greater resources to the development,
promotion and sale of their web-sites than can the Company.
GOVERNMENT REGULATION
The Company's experience is that the Web Site is used by users from
multiple state and international jurisdictions. While the Company
does not directly participate in any transaction completed between
businesses using the Web Site, the Company transmits e-mails to users
across international and state boundaries. There is a risk that
these e-mail transmittals may be the subject of government regulation
in the future or that governments will interpret their laws as having
jurisdiction over the Company and its business. Applicability of
these laws may have the result that the Company being prohibited from
transmitting e-mails to users in certain states or countries or that
the Company may have to incur increased expense in order to transmit
e-mails to users in certain states or countries.
Due to the increasing popularity and use of the Internet, it is
possible that a number of laws and regulations may be adopted with
respect to the Internet generally, covering issues such as user
privacy, pricing, and characteristics and quality of products and
services. Similarly, the growth and development of the market for
Internet commerce may prompt calls for more stringent consumer
protection laws that may impose additional burdens on those companies
conducting business over the Internet. The adoption of any
additional laws or regulations may decrease the growth of commerce
over the Internet, increase the Company's cost of doing business or
otherwise have a harmful effect on the WorldBid Business.
The Company may have to qualify to do business in other
jurisdictions. As the Company's Web Site is available over the
Internet in multiple states and foreign countries, and as the users
of the Web Site are resident in such states and foreign countries,
such jurisdictions may claim that the Company is required to qualify
to do business as a foreign Company in each such state and foreign
country. Failure to qualify as a foreign Company in a jurisdiction
where required to do so could subject the Company to taxes and
penalties.
The Company is not aware of any environmental laws which are
applicable to the operation of the WorldBid Business.
YEAR 2000 RISK
Background
Computer systems, software packages, and microprocessor dependent
equipment may cease to function or generate erroneous data when the
Year 2000 arrives. The problem affects those systems or products
that are programmed to accept a two-digit code in date code fields.
To correctly identify the Year 2000, a four-digit date code field
will be required to be what is commonly termed "Year 2000 compliant."
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Readiness
The Company has completed an assessment of all internal systems and
operations to determine Year 2000 compliance. The Company's
assessment has included an assessment of computer hardware systems
and web site operations systems. The Company has determined that its
internal computer hardware systems and web site operations systems
and operations are Year 2000 compliant. As such, the Company does not
anticipate any material adverse operational issues to arise from the
Year 2000 problem affecting internal systems and operations.
The Company has completed upgrading of all third party licensed
software to ensure Year 2000 compliance. The Company has relied upon
the written representations of each of the third parties from whom
the Company licenses third party software that the upgraded software
is Year 2000 compliant. While the Company has relied upon
representations by third parties, the Company cannot give any
assurance that all third party licensed software will be Year 2000
compliant.
The Company has investigated the Year 2000 compliance of all computer
hardware purchased by the Company since commencement of operations.
The Company has relied upon representations by hardware manufactures
that all computer hardware purchased is Year 2000 compliant. While
the Company has relied upon representations by manufacturers, the
Company cannot give any assurance that all computer hardware will be
Year 2000 compliant.
The Company has made inquires of its Internet service provider,
NetNation Communications, Inc. ("NetNation"), as to the Year 2000
compliance of the Internet service provider's systems and operations.
NetNation has given oral representations to the Company that the its
systems and operations are Year 2000 compliant. The Company has
requested written confirmation of NetNation Year 2000 compliance
representations as part of its Year 2000 compliance plan. However,
there is no assurance that the Company will not be affected by Year
2000 problems arising from problems with the Internet service
provider's systems and operations or experienced by the Internet
service provider as a result of third party problems.
Risks
The Company may realize exposure and risk if the systems for which it
is dependent upon to conduct day-to-day operations are not year 2000
compliant. The Company's worst case scenario would be the inability
of the Web Site to function due to the inability of the computer
hardware systems and web site operations systems to function properly
and disruptions to telecommunications services experienced by
Internet service providers and their users throughout the world.
Under this worst case scenario, the Company would not be able to
continue operations and the Web Site would be inoperable until such
time as the Company had replaced or upgraded computer hardware or
software components. If the Year 2000 problem affects the Company's
Internet service provider, the Web Site would remain in operable
until the Internet service provider re-commenced operations or until
a replacement Internet service provider had been found. In a worst
case scenario, the Year 2000 problem will result in increased expense
to the Company and decreased revenues being earned from the Web Site
or the delay the realization of revenues from the Web Site.
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Estimated Year 2000 Costs
The Company estimates that its total internal cost for ensuring Year
2000 compliance for all internal systems to date to be less than
$10,000. The Company anticipates incurring internal costs of less
than $10,000 in completing its Year 2000 compliance plan. The
Company has not incurred any external cost in ensuring Year 2000
compliance in view of the fact that the Company has only recently
commenced operations and has purchased computer hardware and software
on the basis of representations by manufacturers as to Year 2000
compliance.
Contingency Planning
The Company has developed a contingency plan to address situations
that may result if the Company is affected by Year 2000 problems.
The contingency plan includes multiple back-ups of all computer
databases. The Company will continue to back-up all computer bases
every second day, both before and after January 1, 2000. The Company
maintains and will continue to maintain five separate back-ups of its
databases at all times. The Company will continue to ensure that any
computer hardware or software purchased prior to January 1, 2000 is
Year 2000 compliant.
The Company is unable to make a contingency plan that will cover the
situation that may arise if any significant number of the computers
constituting the Internet fail to process dates properly for the year
2000 and there is a system-wide slowdown or breakdown. The Company's
business is dependent on the continued successful operation of the
Internet. Any interruption or significant degradation of Internet
operations due to Year 2000 problems would significantly harm the
Company's business.
RISK FACTORS
The Company faces risks in executing its business plan and achieving
revenues. The following risks are material risks which the Company
faces. If any of the following risks occur, the business of the
Company and its operating results and financial condition could be
seriously harmed:
The Company's Short Operating History makes its business difficult to
evaluate
The Company acquired the WorldBid Business in February, 1999 and the
Web Site began operations on the Internet in October, 1998.
Accordingly, the Company has a limited operating history upon which
to base an evaluation of our business and prospects. Accordingly,
the Company's business and prospects must be considered in light of
the risks, expenses and difficulties frequently encountered by
companies in their early stage of development, particularly companies
in new and rapidly evolving markets such as electronic commerce. To
address these risks, the Company must successfully implement its
business plan and marketing strategies. The Company may not
successfully implement all or any of its business strategies or
successfully address the risks and uncertainties that it encounters.
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The Company has minimal revenues
The Company's business and marketing strategy contemplates that the
Company will earn a substantial portion of its revenues from
advertising. There is no assurance that the Company will be able to
generate revenues from advertising or that the revenues generated
will exceed the operating costs of the WorldBid Business.
Advertisers may not accept advertising on e-mails as an acceptable
form of advertising. Rates for advertising on e-mails may decrease
as the growth of the Internet and electronic commerce brings
increased competition. Businesses may not be prepared to pay a fee
in order to post requests for tenders or offers for sales on the Web
Site or to receive e-mails of requests for tenders.
Operating results are difficult to predict
The Company's future financial results are uncertain due to a number
of factors, many of which are outside the Company's control. These
factors include:
1. ability to increase usage of the Web Site;
2. ability to generate revenue through the Web Site;
3. the timing, cost and availability of advertising on web sites
comparable to the Company's and over other media;
4. the amount and timing of costs relating to expansion of the
Company's operations;
5. the announcement or introduction of competing web sites and
products of competitors; and
6. general economic conditions and economic conditions specific to
the Internet and electronic commerce.
Additional Financing
The Company will require additional financing in order to complete
its business plan of operations. The Company has no agreements for
additional financing and there can be no assurance that additional
funding will be available to the Company on acceptable terms in order
to enable the Company to complete its plan of operations. The
Company will not be able to continue operations if additional
financing is not obtained.
Recognition of the Web Site is essential to growth of the WorldBid
Business
The Company believes that the successful marketing, development and
promotion of the Web Site is critical to its success in attracting
businesses and advertisers. Furthermore, the Company believes that
the importance of customer awareness will increase as low barriers to
entry encourage the proliferation of web sites. If the Company is
unsuccessful in continuing to build strong recognition of the Web
Site, then the Company may not be able to achieve revenues. The
marketing and promotion efforts
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contemplated by the Company may not be successful in increasing
business awareness of the Web Site or in enabling the Company to
achieve revenues.
The Company depends on third parties for the operation of its
business
The Company depends on several third parties in conducting its
operations, including the following:
* the Company does not own a gateway onto the Internet, but
instead relies on an Internet service provider to connect the
Web Site to the Internet; and
* the Web Site depends on operating system, database, and server
software that has been developed, produced by and licensed from
third parties.
The Company has limited control over these third parties and has no
long-term relationships with any of them. If the Company is unable to
develop and maintain satisfactory relationships with such third
parties on acceptable commercial terms, or if the quality of products
and services by such third parties falls below a satisfactory
standard, its business could be harmed. Also, the Company's loss of
or inability to maintain or obtain upgrades to certain technology
licenses could result in delays in developing its systems until
equivalent technology could be identified, licensed or developed, and
integrated.
The Company depends on its key employees
Competition for qualified personnel in the Company's industry is
intense, particularly for software development and other technical
staff. The Company believes that its future success will depend in
part on its continued ability to attract, hire and retain qualified
personnel. None of the Company's employees is represented by a labor
union, and the Company considers its employee relations to be good.
Risks of systems failure
Substantially all of the Company's communications hardware and
computer hardware is located at a leased facility in Vancouver,
British Columbia, Canada. The Company's systems are vulnerable to
damage from earthquake, fire, floods, power loss, telecommunications
failures, break-ins and similar events. The Company does not
presently have fully redundant systems and has not yet completed
implementing a formal disaster recovery plan. Despite the Company's
implementation of network security measures, its servers are also
vulnerable to computer viruses, physical or electronic break-ins,
attempts by third parties deliberately to exceed the capacity of the
Company's systems and similar disruptive problems. The Company's
coverage limits on its property and business interruption insurance
may not be adequate to compensate for all losses that may occur.
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The Company may be unable to protect its intellectual property
The Company's performance and ability to compete are dependent on a
significant degree on its ability to protect and enforce its
intellectual property rights, which include the following:
* proprietary technology;
* trade names; and
* domain names, each of which relates to the Company's brand.
The Company may not be able to protect its proprietary rights, and
its inability or failure to do so could result in loss of competitive
and commercial advantages that the Company holds. See "Business -
Intellectual Property." Additionally, the Company may choose to
litigate to protect its intellectual property rights if the Company
considers that a third party has infringed the Company's intellectual
property rights. The Company is not aware of any third party who the
Company considers has infringed upon the Company's intellectual
property rights. The Company is not currently party to any
litigation respecting its intellectual property rights and is not
currently contemplating any intellectual property litigation. Any
litigation could result in a significant cost of resources and money.
The Company cannot assure success in any such litigation that it
might undertake.
The Company may in the future receive notices from third parties
claiming infringement by the Company's software, by the use of the
name "WorldBid" or other aspects of the Company's business. The
Company is not currently subject to any such claim that would have a
material effect on the Company's business or financial condition.
However, any future claim, with or without merit, could result in
significant litigation costs and diversion of resources including the
attention of management which could have a material adverse effect on
the Company's business, results of operations and financial
condition. In the future, the Company may also need to file lawsuits
to enforce the Company's intellectual property rights, to protect the
Company's trade secrets or to determine the validity and scope of the
proprietary rights of others. Such litigation, whether successful or
unsuccessful, could result in substantial costs and diversion of
resources, which could have a material adverse effect on the
Company's business, results of operations and financial condition.
User Acceptance of the WorldBid Business Format is Unknown
The success of the WorldBid business will depend on acceptance of the
business format of the Web Site. There is no assurance that
businesses will accept the format of the Web Site as an enhancement
to completing trade transactions. Businesses have a variety of
competing means for which to procure tenders for goods and services,
both via the Internet and through traditional commercial means.
Trading of the Company's Common Stock
The Company may in the future be traded on the Nasdaq OTC Bulletin
Board. There is no assurance that the Company's common stock may be
traded on the Nasdaq OTC Bulletin Board or any other public
securities market.
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Companies traded on the OTC Bulletin Board have traditionally
experienced extreme price and volume fluctuations. The Company's
stock price may be adversely impacted by factors which are unrelated
or disproportionate to the operating performance of the Company. The
trading prices of many technology companies' stocks are at or near
historical highs and reflect price earnings ratios substantially
above historical levels. These market fluctuations, as well as
general economic, political and market conditions such as recessions,
interest rates or international currency fluctuations may adversely
affect the market price of the Company's common stock.
Item 7. Description of Property
The Company does not own any real property. The Company is currently
in the process of establishing its head office in Las Vegas, Nevada.
The Company anticipates entering into a lease agreement upon the
Company finding acceptable premises on agreeable terms.
The Company pays an amount of $680 per month to Ms. Wendy Wurtele,
the spouse of Mr. Scott Wurtele, a director of the Company, for
rental of the portion of the premises at 6117 Eagle Road, Unit 122,
Whistler, British Columbia which is used as office space by On-Line
Design Ltd. and Ms. Wendy Wurtele in providing consulting services to
the Company. The rental is on a month to month basis and is not the
subject of any written agreement.
The Company's physical property consists of its computer hardware
used in connection with the Web Site. The Company's computer
hardware consists of one Internet web server computer and eight
personal computers and related peripherals. The Internet web server
is located on the premises of NetNation Communications, the Company's
Internet service provider, in Vancouver, Canada. See Item 6.
"Description of Business - Technology". The eight personal computers
and related peripherals are located with the Company's full time
consultants at their personal residences. See Item 6. "Description
of Business - Employees".
Item 8. Directors, Executive Officers and Significant Employees
The following information sets forth the names of the officers and
directors of the Company, their present positions with the Company,
and their biographical information.
Name Age Office(s) Held
---- --- --------------
Logan Anderson 44 Director and President
Howard Thomson 52 Director, Secretary and Treasurer
Scott Wurtele 54 Director
Logan B. Anderson is a director of the Company and is the President
of the Company. Mr. Anderson was appointed a director of the Company
and its President on August 10, 1998. Mr. Anderson is a graduate of
Otago University, New Zealand, with a Bachelor's Degree of Commerce
in Accounting and
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Economics (1977). He is an Associated Chartered Accountant
(New Zealand) and was employed by Coopers & Lybrand in New
Zealand (1977-1980) and Canada (1980-1982). From 1982 to 1992, Mr.
Anderson was Comptroller of Cohart Management Group, Inc., a
management service company which was responsible for the management
of a number of private and public companies. Mr. Anderson has been
Principal and President of Amteck Financial Services Company, a
financial consulting service company since 1993. Mr. Anderson has
been an officer and director of a number of private and public
companies in the past 12 years, including PLC Systems, Inc. and 3D-
Systems Inc.
The services of Mr. Anderson are provided to the Company pursuant to
the Anderson Employment Agreement. See Item 6. "Description of
Business - Employees".
Howard Thomson is a director of the Company and is the Secretary and
Treasurer of the Company. Mr. Thomson was appointed a director of the
Company and its Secretary and Treasurer on February 12, 1999. Mr.
Thomson was employed from 1981 to 1998 in senior management positions
with the Bank of Montreal, including 5 years as Branch Manager, 4
years as Regional Marketing Manager and 5 years as Senior Private
Banker. Mr. Thomson retired from the Bank of Montreal in 1998. Mr.
Thomson resided in London, England prior to joining the Bank of
Montreal and was employed by the National Westminster Bank in England
for 13 years. Mr. Thomson is also a director of Skinvisible, Inc., a
company which has developed and is marketing an anti-bacterial skin
care product and the whose common stock is traded on the OTC Bulletin
Board.
The services of Mr. Thomson are provided to the Company pursuant to
the Thomson Employment Agreement. See Item 6. "Description of
Business - Employees".
Scott Wurtele is a director of the Company. Mr. Wurtele was
appointed a director of the Company on September 10, 1999. Mr.
Wurtele provided management services to the Company pursuant to the
Original Management Consulting Agreement from February 15, 1999 to
September 10, 1999. Mr. Wurtele is the President and controlling
shareholder of Databoat. Mr. Wurtele founded Databoat in 1992 and
has been employed as President of Databoat since 1992. Databoat is a
private company which has developed an Internet boating book web
site. Mr. Wurtele was responsible for the development of Databoat as
an electronic commerce company. Specific goals accomplished by
Databoat under the direction of Mr. Wurtele include the production of
a multi-media CD for boating book publications and the establishment
of the Databoat web site. Prior to establishing Databoat in 1992,
Mr. Wurtele was involved in construction and project management for
approximately 20 years.
The services of Mr. Wurtele are provided to the Company pursuant to
the Amended Management Consulting Agreement. See Item 6.
"Description of Business - Employees".
Terms of Office
Directors of the Company are appointed for one year terms to hold
office until the next annual general meeting of the holders of the
Company's Common Stock, as provided by Article 330 of Chapter 78
"Private Corporations" of the Nevada Revised Statutes, or until
removed from office in accordance with
27
<PAGE>
the Company's by-laws. Officers of the Company are appointed by
the Company's board of directors and hold office until removed by
the Company's board of directors.
Agreement Regarding Composition of Board of Directors
Mr. Wurtele was appointed a director of the Company upon execution of
the Acquisition Amendment Agreement between the Company, Databoat and
Mr. Wurtele on September 10, 1999. The Acquisition Amendment
Agreement provided that Mr. Wurtele would be appointed a director of
the Company upon execution of the Acquisition Amendment Agreement.
The Acquisition Amendment Agreement also provides that after February
15, 2000, the directors of the Company will consist of five
directors, two of whom will be nominees of Logan Anderson and three
of whom will be nominees of Databoat. The Company, Databoat and Mr.
Wurtele also agreed that Wurtele will be appointed chairman of the
board of directors and Logan Anderson will be appointed Chief
Executive Officer of the Company.
Item 9. Remuneration of Directors and Officers
The following table sets forth certain information as to the
Company's three highest paid officers and directors for its first
fiscal year ended April 30, 1999. The Company's first fiscal year
reflects the period from date of the incorporation of the Company on
August 10, 1998 to April 30, 1999. No other compensation was paid
or will be paid to any such officers or directors other than the cash
compensation set forth above under this Item 6 "Business -
Employees".
Summary Compensation Table
--------------------------
Name of Individual or Capacities in which Aggregate
Identity of Group Remuneration was Received Remuneration
--------------------- ------------------------- ------------
Logan Anderson Director and President NIL
Howard Thomson Director and Secretary $1,500
Treasurer
Officers and Directors Directors and Officers $1,500
of the Company as a Group
Item 10. Security Ownership of Management and Certain Security
Holders
The following table sets forth, as of November 23, 1999, the
beneficial ownership of the Company's Common Stock by each officer
and director of the Company, by each person known by the Company to
beneficially own more than 10% of the Company's Common Stock
outstanding and by the officers and directors of the Company as a
group. Except as otherwise indicated, all shares are owned directly.
28
<PAGE>
Name and address Number of Shares Percentage of
Title of class of beneficial owner of Common Stock Common Stock(1)
-------------- ------------------- ---------------- ---------------
Common Stock Databoat
International
Limited(3) 3,000,000(3) 50.0%
6117 Eagle Road,
Unit 122
Whistler,
British Columbia
Common Stock Logan Anderson 450,000 7.5%
Director, President
P.O. Box 1998G
Seven Mile Beach
Grand Cayman, BWI
Common Stock Howard Thomson 55,000 0.8%
Director, Secretary
and Treasurer
1521 Purcell Drive,
Coquitlam, BC V3E 3B6
Common Stock All Officers
and Directors 3,505,000 58.4%
as a Group
(3 persons)
------------------------------------------------------------------
(1) Based on 6,000,000 shares of Common Stock of the Company
issued and outstanding on November 23, 1999.
(2) Databoat International Limited is the owner of 3,000,000
shares of the Company. Databoat is a private company controlled
by Scott Wurtele. Scott Wurtele is the sole director of
Databoat and is the President of Databoat.
(3) Scott Wurtele is a controlling shareholder of Databoat
International Limited, the owner of 3,000,000 shares of the
Company's Common Stock
Share Purchase Warrants
The Company has not issued and does not have outstanding any warrants
to purchase shares of the Common Stock.
29
<PAGE>
Options
The Company has not issued and does not have outstanding any options
to purchase shares of the Common Stock. The Company anticipates
approving an incentive stock option plan for its directors, officers
and permitted consultants.
Convertible Securities
The Company has not issued and does not have outstanding any
securities convertible into shares of Common Stock or any rights
convertible or exchangeable into shares of Common Stock
Item 11. Interest of Management and Others in Certain Transactions
Except as disclosed below, none of the following persons has any
direct or indirect material interest in any transaction to which the
Company is a party since the incorporation of the Company in August,
1998 or in any proposed transaction to which the Company is proposed
to be a party:
(A) any director or officer of the Company;
(B) any proposed nominee for election as a director of the
Company;
(C) any person who beneficially owns, directly or indirectly,
shares carrying more than 10% of the voting rights attached
to the Company's 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 of the Company.
The Company has acquired the WorldBid Business from Databoat pursuant
to the Acquisition Agreement. The Company has issued to Databoat a
total of 3,000,000 restricted shares of common stock of the Company
pursuant to the Acquisition Agreement. The Company also entered into
the Original Management Consulting Agreement with Mr. Scott Wurtele,
a director of the Company, and On Line Design Ltd., a private
Company controlled by Mr. Wurtele, whereby the services of Wurtele
were agreed to be provided to the Company for a one year term. The
Company paid to On Line Design a management consulting fee of $5,000
US per month in consideration for On Line Design providing the
consulting services of Wurtele until September 10, 1999, the date of
termination of the Original Management Consulting Agreement. The
Company also paid to On Line Design a bonus of $5,000 on execution of
the Original Management Consulting Agreement and an additional bonus
of $10,000 on the three month anniversary of the commencement of the
Original Management Consulting Agreement. (See Item 6. - "Description
of Business - Acquisition of WorldBid Internet Business - Management
Consulting Agreement"). Both Databoat, the principal shareholder of
the Company, and On Line Design are controlled by Scott Wurtele.
30
<PAGE>
Databoat is a private company incorporated pursuant to the laws of
the Province of British Columbia, Canada and is controlled by Mr.
Scott Wurtele, a director of the Company. Scott Wurtele is the
sole director of Databoat and is the President of Databoat. Scott
Wurtele is the registered owner of 70.5% of the voting common shares
of Databoat. Wendy Wurtele, the spouse of Scott Wurtele, is the
owner of 13.1% of the voting common shares of Databoat. Daniel
Wurtele, the son of Scott Wurtele and Wendy Wurtele, is the owner of
2.6% of the voting common shares of Databoat.
The Company entered into the Amended Management Consulting Agreement
with Mr. Scott Wurtele, director of the Company, on September 10,
1999. See Item 6. - "Description of Business - Employees".
The Company entered into the Anderson Employment Agreement with Mr.
Logan Anderson, President and a director of the Company, on August
31, 1999. See Item 6. - "Description of Business - Employees".
The Company entered into the Thomson Employment Agreement with Mr.
Howard Thomson, Secretary/ Treasurer and a director of the Company,
on August 31, 1999. See Item 6. - "Description of Business -
Employees".
The Company pays an amount of $680 per month to Ms. Wendy Wurtele,
the spouse of Mr. Scott Wurtele, a director of the Company, for
rental of the portion of the premises at 6117 Eagle Road, Unit 122,
Whistler, British Columbia which is used as office space by On-Line
Design Ltd. and Ms. Wendy Wurtele in providing consulting services to
the Company. The rental is on a month to month basis and is not the
subject of any written agreement.
Item 12. Securities Being Registered
The securities being registered are the shares of the Company's
common stock, par value $0.001 per share. Under the Company's
Articles of Incorporation, the total number of shares of all classes
of stock that the Company shall have authority to issue is
100,000,000 shares of common stock, par value $0.001 per share (the "
Common Stock"). As of November 23, 1999, a total of 6,000,000 shares
of Common Stock are issued and outstanding.
Common Stock
Holders of Common Stock have the right to cast one vote for each
share held of record on all matters submitted to a vote of holders of
Common Stock, other than votes for the election of directors.
Holders of a majority of the voting power of the capital stock issued
and outstanding and entitled to vote, represented in person or by
proxy, are necessary to constitute a quorum at any meeting of the
Company's stockholders, and the vote by the holders of a majority of
such outstanding shares is required to effect certain fundamental
corporate changes such as liquidation, merger or amendment of the
Company's Articles of Incorporation.
In any vote for the election of directors, holders of Common Stock
are entitled to exercise a number of votes equal to the number of
directors to be elected multiplied by the number of shares held by the
31
<PAGE>
stockholder. Each holder of Common Stock may cast all of such
votes for a single director or may distribute them among the number
of directors to be voted upon or any or any two or more of them, as
the stockholder may see fit.
Holders of Common Stock are entitled to receive dividends pro rata
based on the number of shares held, when, as and if declared by the
Board of Directors, from funds legally available therefor. In the
event of the liquidation, dissolution or winding up of the affairs of
the Company, all assets and funds of the Company remaining after the
payment of all debts and other liabilities shall be distributed, pro
rata, among the holders of the Common Stock. Holders of Common Stock
are not entitled to pre-emptive or subscription or conversion rights,
and there are no redemption or sinking fund provisions applicable to
the Common Stock.
Transfer Agent
Pacific Stock Transfer Company of Las Vegas, Nevada is the transfer
agent for the Shares.
32
<PAGE>
PART II
Item 1. Market Price of and Dividends on the Registrant's Common
Equity and Other Stockholder Matters
There is no present public market for the Company's Common Stock.
The Company anticipates applying to have the Common Stock traded on
the OTC Bulletin Board upon effectiveness of this registration
statement. There is no assurance that a public market will
materialize.
As of the date of this registration statement, there were thirty four
(34) registered shareholders in the Company. The issued and
outstanding shares of the Company's Common Stock consists of
6,000,000 shares. Of these issued and outstanding shares, the
3,000,000 shares of the Common Stock beneficially owned by Databoat
are the only "restricted shares", as defined pursuant to the
Securities Act of 1933 (the "1933 Act"). None of the "restricted
shares" held by Databoat may be sold pursuant to Rule 144 of the 1933
Act as of the date of this registration statement.
None of the holders of the Company's Common Stock have any right to
require the Company to register any shares of the Company's Common
Stock pursuant to the 1933 Act.
The Company has not declared any dividends on its Common Stock since
its inception in August, 1998. There are no dividend restrictions
that limit the Company's ability to pay dividends on Common Stock in
the Company's Articles of Incorporation or By-Laws. The Company's
governing statute, Chapter 78 - "Private Corporations" of the Nevada
Revised Statutes (the "NRS"), does provide limitations on the ability
of the Company to declare dividends. Section 78.288 of Chapter 78 of
the NRS prohibits the Company from declaring dividends where, after
giving effect to the distribution of the dividend:
(A) the Corporation would not be able to pay its debts as they
become due in the usual course of business; or
(B) the Corporation's total assets would be less than the sum
of its total liabilities plus the amount that would be
needed, if the corporation were to be dissolved at the time
of distribution, to satisfy the preferential rights upon
dissolution of stockholders who may have preferential
rights and whose preferential rights are superior to those
receiving the distribution. (except as otherwise
specifically allowed by the articles of incorporation)
Item 2. Legal Proceedings
The Company is not currently a party to any legal proceedings.
Item 3. Changes in and Disagreements with Accountants
The Company has had no changes in or disagreements with its
accountants since its incorporation in August, 1998.
33
<PAGE>
Item 4. Recent Sales of Unregistered Securities
The Company completed the issuance of 3,000,000 common shares to
Databoat International Limited at a deemed price of $0.01 per share
pursuant to the Acquisition Agreement dated February 2, 1999. These
shares were issued Databoat pursuant to Section 4(2) of the 1933 Act.
Databoat is the registered and beneficial owner or more than 10% of
the Company's issued and outstanding Common Stock. The 3,000,000
shares of Common Stock issued to Databoat are "restricted" shares, as
defined in the 1933 Act. Databoat is a private company a controlled
by Mr. Scott Wurtele, a director of the Company.
The Company completed an offering of 2,000,000 shares of Common Stock
to nine (9) purchasers at a price of $0.01 per share on February 15,
1999 pursuant to Rule 504 of Regulation D of the Act. The offering
was completed to persons known to the officers and directors of the
Company. Mr. Logan Anderson, a director and President of the
Company, purchased 450,000 shares of the Company's common stock
pursuant to this offering. Mr. Howard Thomson, a director and
Secretary and Treasurer of the Company, purchased 50,000 shares of
the Company's common stock pursuant to this offering.
The Company completed an offering of 700,000 shares of Common Stock
to twenty-one (21) purchasers at a price of $0.20 per share on
February 17, 1999 pursuant to Rule 504 of Regulation D of the Act.
The offering was completed to persons known to the officers and
directors of the Company.
The Company completed an offering of 300,000 common shares to twelve
(12) purchasers at a price of $1.00 per share on March 31, 1999
pursuant to Rule 504 of Regulation D of the Act. The offering was
completed to persons known to the officers and directors of the
Company. Mr. Howard Thomson, a director and Secretary and Treasurer
of the Company, purchased 5,000 shares of the Company's common stock
pursuant to this offering.
Item 5. Indemnification of Directors and Officers
The officers and directors of the Company are indemnified as provided
under the Nevada Revised Statutes (the "NRS") and the Bylaws of the
Company.
Under the NRS, director immunity from liability to a Company or its
shareholders for monetary liabilities applies automatically unless it
is specifically limited by a Company's articles of incorporation
(which is not the case with the Company's Articles of Incorporation).
Excepted from that immunity are: (i) a willful failure to deal fairly
with the Company or its shareholders in connection with a matter in
which the director has a material conflict of interest; (ii) a
violation of criminal law (unless the director had reasonable cause
to believe that his or her conduct was lawful or no reasonable cause
to believe that his or her conduct was unlawful); (iii) a transaction
from which the director derived an improper personal profit; and (iv)
willful misconduct.
The By-laws of the Company provide that the Company will indemnify
its directors and officers to the fullest extent not prohibited by
the Nevada General Company Law; provided, however, that the Company
may modify the extent of such indemnification by individual contracts
with its directors and
34
<PAGE>
officers; and, provided, further, that the Company shall not be
required to indemnify any director or officer in connection with
any proceeding (or part thereof) initiated by such person unless
(i) such indemnification is expressly required to be made by law,
(ii) the proceeding was authorized by the Board of Directors
of the Company, (iii) such indemnification is provided by the
Company, in its sole discretion, pursuant to the powers vested in
the Company under the Nevada General Company Law or (iv) such
indemnification is required to be made pursuant to the By-laws.
The By-laws of the Company provide that the Company will advance to
any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason
of the fact that he is or was a director or officer, of the Company,
or is or was serving at the request of the Company as a director or
executive officer of another Company, partnership, joint venture,
trust or other enterprise, prior to the final disposition of the
proceeding, promptly following request therefor, all expenses
incurred by any director or officer in connection with such
proceeding upon receipt of an undertaking by or on behalf of such
person to repay said amounts if it should be determined ultimately
that such person is not entitled to be indemnified under the By-laws
of the Company or otherwise.
The By-laws of the Company provide that no advance shall be made by
the Company to an officer of the Company (except by reason of the
fact that such officer is or was a director of the Company in which
event this paragraph shall not apply) in any action, suit or
proceeding, whether civil, criminal, administrative or investigative,
if a determination is reasonably and promptly made (i) by the Board
of Directors by a majority vote of a quorum consisting of directors
who were not parties to the proceeding, or (ii) if such quorum is not
obtainable, or, even if obtainable, a quorum of disinterested
directors so directs, by independent legal counsel in a written
opinion, that the facts known to the decision-making party at the
time such determination is made demonstrate clearly and convincingly
that such person acted in bad faith or in a manner that such person
did not believe to be in or not opposed to the best interests of the
Company.
35
<PAGE>
PART F/S
FINANCIAL STATEMENTS
The Company's audited Financial Statements, as described below, are
attached hereto.
1. Audited financial statements for the period ending April 30,
1999, including:
(a) Balance Sheet;
(b) Statement of Operations and Accumulated Deficit;
(c) Statement of Changes in Stockholders' Equity;
(d) Statement of Cash Flows;
(e) Notes to Financial Statements.
2. Unaudited financial statements for the three months ending July
31, 1999, including:
(a) Balance Sheet;
(b) Statement of Operations and Accumulated Deficit;
(c) Statement of Changes in Stockholders' Equity;
(d) Statement of Cash Flows;
(e) Notes to Financial Statements.
36
<PAGE>
WORLDBID CORPORATION
FINANCIAL STATEMENTS
APRIL 30, 1999
WITH
INDEPENDENT AUDITOR'S REPORT THEREON
<PAGE>
INDEX TO FINANCIAL STATEMENTS
-----------------------------
Page
----
Independent Auditor's Report. . . . . . . . . . . . . . 1
Financial Statements:
Balance Sheet . . . . . . . . . . . . . . . . . . . . 2
Statement of Operations
and Accumulated Deficit . . . . . . . . . . . . . . 3
Statement of Changes in Stockholders' Equity. . . . . 4
Statement of Cash Flows . . . . . . . . . . . . . . . 5
Notes to Financial Statements . . . . . . . . . . . . 6-12
Supplemental Statement:
Statement of Operating Expenses . . . . . . . . . . . 14
<PAGE>
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Board of Directors
Worldbid Corporation
We have audited the accompanying balance sheet of Worldbid
Corporation, ("WBC"), a development stage company, as of April
30, 1999 and the related statements of operations and accumulated
deficit, changes in stockholders' equity, and statement of cash
flows for the period August 10, 1998 (INCEPTION) through April
30, 1999. These financial statements are the responsibility of
WBC's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Worldbid Corporation as of April 30, 1999, and the results of
its operations, changes in stockholders' equity and cash flows
for period August 10, 1998 (INCEPTION) through April 30, 1999, in
conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental
statement of operating expenses is presented for the purposes of
additional analysis and is not a required part of the basic
financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements
taken as a whole.
\s\ Sarna & Company
Sarna & Company
Westlake Village, California
May 7, 1999
<PAGE>
WORLDBID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
APRIL 30, 1999
ASSETS
Current Assets
Cash $ 366,239
---------
Total Current Assets $ 366,239
Property and Equipment
Web Site 30,000
Software Development 15,461
Web Site Development 14,840
---------
Net Property and Equipment 60,301
----------
TOTAL ASSETS $ 426,540
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable and Accrued Expenses $ 5,612
---------
Total Current Liabilities $ 5,612
Stockholders' Equity
Common Stock, $0.001 par value
100,000,000 shares authorized,
6,000,000 shares issued 6,000
Additional Paid in Capital 486,500
Accumulated deficit <71,572>
---------
Total Stockholders' Equity 420,928
---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 426,540
==========
See Notes to Financial Statements
F-2
<PAGE>
WORLDBID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
FOR THE PERIOD AUGUST 10, 1998 (INCEPTION) THROUGH APRIL 30, 1999
Revenues $ 0
Operating Expenses <71,572>
-----------
Loss Before Provision for <71,572>
Income Taxes
Provision for Income Taxes <0>
-----------
Net Loss <71,572>
Deficit, August 10, 1999 (INCEPTION) <0>
-----------
Accumulated Deficit, April 30, 1999 $ <71,572>
===========
Net Loss per Share $ <0.01>
===========
Weighted Average Shares Outstanding 5,025,000
===========
See Notes to Financial Statements
F-3
<PAGE>
WORLDBID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD AUGUST 10, 1998 (INCEPTION) THROUGH APRIL 30, 1999
Common Stock Additional Accumulated Total
Dollar Paid in Deficit Stockholders'
Shares Amount Capital Equity
------ ------ ---------- ----------- ------------
Balances
(INCEPTION) ---- $ ---- $ ---- $ ---- $ ----
August 10, 1998
Common Stock
Issued
Worldbid.Com
Web Site
Acquisition
February
2, 1999
$.01 per
share 3,000,000 3,000 27,000 ---- 30,000
Common Stock
Issued
First
Offering
February
15, 1999
$.01 per
share 2,000,000 2,000 18,000 ---- 20,000
Common Stock
Issued
Second
Offering
February
17,1999
$.20 per
share 700,000 700 139,300 ---- 140,000
Common Stock
Issued
Third
Offering
March 31,
1999
$1.00 per
share 300,000 300 299,700 ---- 300,000
Contributed
Surplus
Fair Market
Value of
Officer's
Services
Provided from
February 15,
1999 to April
30, 1999 ---- ---- 2,500 ---- 2,500
Net Loss
Period
Ended
April 30,
1999 ---- ---- ---- (71,572) (65,572)
--------------------------------------------------
Balances
April 30,
1999 6,000,000 $ 6,000 $ 486,500 $ (71,572) $ 420,928
====================================================
See Notes to Financial Statements
F-4
<PAGE>
WORLDBID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE PERIOD AUGUST 10, 1998 (INCEPTION) THROUGH APRIL 30, 1999
Cash Flows from Operating Activities:
Net Loss $ <71,572>
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities
Consulting Expense - Non Cash 2,500
Increase <Decrease> in:
Accounts Payable and
Accrued Expenses 5,612
--------
Net Cash Used by Operating Activities <63,460>
Cash Flows from Investing Activities:
Software Development Costs $ <15,461>
Web Site Development Costs <14,840>
---------
Net Cash Used by Investing Activities <30,301>
Cash Flows from Financing Activities:
Net Proceeds from the Issuance of
Common Stock 460,000
---------
Net Cash Provided by Financing Activities 460,000
--------
Net Increase in Cash 366,239
Cash at Beginning of Period 0
--------
Cash at End of Period $ 366,239
=========
Supplemental Disclosure of
Cash Flow Information:
Non-cash Investing Activities:
Assets Acquired for Stock $ 30,000
=========
See Notes to Financial Statements
F-5
<PAGE>
WORLDBID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
---------------------------------------------------
General
-------
Worldbid Corporation (the "Company" or "WBC") was originally
incorporated on August 10, 1998 in the state of Nevada as
"Tethercam Systems, Inc.". On January 15, 1999 the Company
changed its name to Worldbid Corporation.
The Company is engaged in the acquisition and development of
proprietary commercial web sites. WBC plans to earn revenues
from advertising generated on these sites and through e-mail that
targets potential suppliers. The Company's initial business is
transacted through its current Internet web site located at
"www.worldbid.com". This site is still in the development stage.
Basis of Presentation
---------------------
The Company reports revenue and expenses using the accrual method
of accounting for financial and tax reporting purposes.
Use of Estimates
----------------
Management uses estimates and assumptions in preparing these
financial statements in accordance with generally accepted
accounting principles. Those estimates and assumptions affect
the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities, and the reported revenues and
expenses.
Development Stage Company
-------------------------
WBC meets the guidelines of SFAS No. 7 and as such is classified
as a development stage company.
F-6
<PAGE>
WORLDBID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
---------------------------------------------------------------
Pro Forma Compensation Expense
------------------------------
WBC accounts for costs of stock-based compensation in accordance
with APB No. 25, "Accounting for Stock Based Compensation"
instead of the fair value based method in SFAS No. 123. No stock
options have been issued by WBC. Accordingly, no pro forma
compensation expense is reported in these financial statements.
Depreciation, Amortization and Capitalization
---------------------------------------------
The Company records depreciation and amortization when
appropriate using both straight-line and declining balance
methods over the estimated useful life of the assets (five to
seven years).
Expenditures for maintenance and repairs are charged to expense
as incurred. Additions, major renewals and replacements that
increase the property's useful life are capitalized. Property
sold or retired, together with the related accumulated
depreciation, is removed from the appropriate accounts and the
resultant gain or loss is included in net income.
Depreciation and amortization were not recorded at April 30,1999
as the Company assets were not at the point of being ready for
their intended use.
Income Taxes
------------
The Company accounts for its income taxes in accordance with
Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes". Under Statement 109, a liability method is
used whereby deferred tax assets and liabilities are determined
based on temporary differences between basis used for financial
reporting and income tax reporting purposes. Income taxes are
provided based on tax rates in effect at the time such temporary
differences are expected to reverse. A valuation allowance is
provided for certain deferred tax assets if it is more likely
than not, that the Company will not realize the tax assets
through future operations.
F-7
<PAGE>
WORLDBID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
---------------------------------------------------------------
Fair Value of Financial Instruments
-----------------------------------
Financial accounting Standards Statement No. 107, "Disclosures
About Fair Value of Financial Instruments", requires the Company
to disclose, when reasonably attainable, the fair market values
of its assets and liabilities which are deemed to be financial
instruments. The Company's financial instruments consist
primarily of cash and certain investments.
Per Share Information
---------------------
The Company computes per share information by dividing the net
loss for the period presented by the weighted average number of
shares outstanding during such period.
Year 2000 Compliance
--------------------
The Year 2000 issue is the result of computer programs having
been written using two digits (rather than four) to define years.
Computers or other equipment with date-sensitive software may
recognize "00" as 1900 rather than 2000. This could result in
system failures or miscalculations. If the Company or
significant customers, suppliers or other third parties fail to
correct Year 2000 issues, the Company's ability to operate could
be affected.
The following disclosure is pursuant to the Year 2000 Readiness
and Disclosure Act.
Worldbid's Year 2000 program is designed to minimize the
possibility of Year 2000 interruptions. Any such interruption
may have a material adverse impact on the Company's future
operating results. In 1999, the Company established procedures
to identify and assess systems and processes vulnerable to Year
2000 problems. The Company also developed procedures to monitor
levels of compliance within its stated goals of compliance.
F-8
<PAGE>
WORLDBID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
---------------------------------------------------------------
In each area of vulnerability, various testing and readiness
methodologies are being used to identify and correct suspect
systems, processes or supplier interfaces. The Company projects
to meet its Year 2000 compliance goals prior to the end of third
quarter 1999.
Recently Issued Accounting Pronouncements
-----------------------------------------
Recently issued accounting pronouncements will have no
significant impact on the Company and its reporting methods.
NOTE 2 - ACQUISITION OF WORLDBID.COM
------------------------------------
On February 2, 1999 the Company acquired the web site
"worldbid.com" together with all software, tangible and
intellectual assets and rights associated with that site from
Databoat International Limited (Databoat). This web site which
consists of software and registered rights, was accounted for as
an asset acquisition as are other software purchases and
development costs. The Company has issued to Databoat a total of
3,000,000 restricted shares of common stock (Databoat Shares-Fair
Market Value $30,000) pursuant to an acquisition agreement. The
Company has also entered into a one year consulting agreement
with Databoat's principal stockholder, Mr. Scott Wurtele and on-
line Design, a company controlled by him.
The Company and Databoat have agreed that the Databoat Shares
will be held in escrow for a period of one year on the terms and
conditions of an escrow agreement between the Company, Databoat
and Cane & Company, the attorneys for the company (the "Escrow
Agreement"). The Databoat Shares will be released to Databoat in
accordance with the Escrow Agreement, commencing on the date
which is one year from the date of closing on the following
schedule:
Anniversary of Closing Date Number of Shares
--------------------------- ----------------
One Year 300,000 shares
Two Year 700,000 shares
Three Year 1,000,000 shares
F-9
<PAGE>
WORLDBID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2 - ACQUISITION OF WORLDBID.COM - CONTINUED
------------------------------------------------
In the event that the Company determines prior to the date which
is one year from the date of closing not to pursue development
and commercialization of the Worldbid business, the Company will
have the option to cause Databoat to deliver all of the Databoat
Shares to the Company for cancellation.
In the event that the Company exercises its right to cause the
Databoat Shares to be delivered to the Company in accordance with
the terms and conditions of the Escrow Agreement, Databoat will
have the right to acquire the Worldbid web site and related
business for a purchase price of $10.00. In the event of
delivery of the Databoat Shares to the Company pursuant to the
Escrow Agreement and exercise by Databoat of its option to
acquire the Worldbid web site and related business, each of the
Company and Databoat will have no further liability or obligation
to the other.
In the event that, during the one year period commencing on the
Closing Date, the Company does not advance towards the Worldbid
web site and related business sufficient funds for the Company to
complete the expenditures set forth in the Company's business
plan ($300,000), as attached to the Acquisition Agreement or in
any revised business plan approved by the board of directors of
the Company, then Databoat will be entitled to deliver notice to
the Company demanding that the Company advance to the Worldbid
web site and related business sufficient funds to enable the
Company to meet the objectives of the business plan (a "Demand
Notice"). Upon receipt of a Demand Notice, the Company will have
a period of thirty (30) days in which to provide the required
funding to bring the Company current with the expenditures
required under the business plan.
F-10
<PAGE>
WORLDBID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2 - ACQUISITION OF WORLDBID.COM - CONTINUED
------------------------------------------------
The Company has agreed with Databoat pursuant to the Acquisition
Agreement that in the event that, during the one year period
commencing on the closing date, the Company elects not to or
fails to provide the necessary funding to the Worldbid business
or in the event Mr. Wurtele terminates the Management Consulting
Agreement, pursuant to Section 6.3 of the Management Consulting
Agreement as a result of a material breach by the Company,
Databoat will have the option to put the Databoat Shares to the
Company in exchange for the transfer by the Company to Databoat
of the Worldbid web site and related business to Databoat, the
Databoat Shares will be released to the Company and each of the
Company, Mr. Wurtele and Databoat will have no further liability
or obligation to the other.
The Company has also agreed with Databoat pursuant to the
Acquisition Agreement that in the event that the shares of the
Company or any successor are not listed or quoted for trading on
any public trading market, including NASDAQ Small Cap Market, the
OTC Bulletin Board or an electronic quotation service, within the
date which is eighteen months from the closing date, then
Databoat will have the right to purchase the Worldbid web site
and related business from the Company in consideration for the
transfer of the Databoat Shares to the Company. Databoat must
give notice of its election within 30 days of the date which is
eighteen months from the closing date. Upon receipt of notice of
election, the Company will execute and deliver an executed
general conveyance of specific business assets to Databoat upon
presentation of the Databoat Shares released from escrow. Each
party will give joint instruction to the escrow agent as required
to deliver the balance of the Databoat Shares to the Company.
NOTE 3 - PROVISION FOR INCOME TAXES
-----------------------------------
The provision for income taxes for the period ended April 30,
1999 represents the minimum state income tax expense of the
Company, which is not considered significant.
F-11
<PAGE>
WORLDBID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 4 - COMMITMENTS AND CONTINGENCIES
--------------------------------------
Operating Leases
----------------
The Company currently rents administrative office space under a
monthly renewable contract.
Management Consulting Agreement
-------------------------------
The Company has entered into a consulting agreement with On-Line
Design, a British Columbia company owned 100% by Mr. Wurtele.
The Company will pay $5,000 per month for a period of one year
expiring February 16, 2000. In exchange for these payments, On-
Line Design will provide management and continued development of
the Company's business.
Litigation
----------
The Company is not presently involved in any litigation.
NOTE 5 - RELATED PARTY TRANSACTIONS
-----------------------------------
The Company has entered into a one year consulting agreement (see
management consulting agreement), with on-line Design, a company
controlled by Mr. Scott Wurtele. Databoat, a major stockholder
of WBC, is also controlled by Mr. Scott Wurtele (see Acquisition
of Worldbid.Com).
NOTE 6 - SUBSEQUENT EVENT
-------------------------
Subsequent to April 30,1999, the Company, Mr. Wurtele and
Databoat agreed to cancel all put and call option rights as
detailed in Note 2.
F-12
<PAGE>
SUPPLEMENTAL STATEMENT
<PAGE>
WORLDBID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATING EXPENSES
FOR THE PERIOD AUGUST 10, 1998 (INCEPTION) THROUGH APRIL 30, 1999
Operating Expenses
Accounting $ 4,870
Consulting 2,500
Legal Fees 24,962
Market Research and Development 29,137
Office Supplies 796
Postage & Delivery 348
Start-up costs expensed 4,024
Telephone 1,935
Web Site Management 3,000
--------
Total Operating Expenses $ 71,572
=========
See Notes to Financial Statements
F-14
<PAGE>
WORLDBID CORPORATION
FINANCIAL STATEMENTS
JULY 31, 1999
<PAGE>
INDEX TO FINANCIAL STATEMENTS
-----------------------------
Page
----
Independent Auditor's Report. . . . . . . . . . . . . . 1
Financial Statements:
Balance Sheet . . . . . . . . . . . . . . . . . . . . 2
Statement of Operations
and Accumulated Deficit . . . . . . . . . . . . . . 3
Statement of Changes in Stockholders' Equity. . . . . 4
Statement of Cash Flows . . . . . . . . . . . . . . . 5
Notes to Financial Statements . . . . . . . . . . . . 6-11
Supplemental Statement:
Statement of Operating Expenses . . . . . . . . . . . 13
<PAGE>
ACCOUNTANTS' REVIEW REPORT
--------------------------
To the Board of Directors
Worldbid Corporation
Las Vegas, Nevada
We have reviewed the accompanying balance sheet of Worldbid
Corporation, a development stage company, as of July 31, 1999 and
the related statements of operations and accumulated deficit,
changes in stockholders' equity, and statement of cash flows for
the three months then ended, in accordance with standards
established by the American Institute of Certified Public
Accountants. All information included in these financial
statements is the representation of the management of Worldbid
Corporation.
A review consists principally of inquiries of Company personnel
and analytical procedures applied to financial data. It is
substantially less in scope than an examination in accordance
with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such
an opinion.
Based on our review, we are not aware of any material
modifications that should be made to the accompanying financial
statements in order for them to be in conformity with generally
accepted accounting principles.
Our review was made for the purpose of expressing limited
assurance that there are no material modifications that should be
made to the financial statements in order for them to be in
conformity with generally accepted accounting principles. The
supplemental statement of operating expenses is presented for the
purposes of additional analysis and is not a required part of the
basic financial statements. Such information has been subjected
to the inquiry and analytical procedures applied in the review of
the basic financial statements, and we are not aware of any
material modifications that should be made thereto.
\s\ Sarna & Company
Sarna & Company
Westlake Village, California
October 25, 1999
<PAGE>
WORLDBID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
JULY 31, 1999
ASSETS
Current Assets
Cash $ 142,290
---------
Total Current Assets $ 142,290
Property and Equipment
Computer Software 62,077
Computer Equipment 43,378
Office Equipment 1,434
---------
Total Property and Equipment 106,889
Less Accumulated Depreciation <2,663>
---------
Net Property and Equipment 104,226
Other Assets - Domain Names 1,638
----------
TOTAL ASSETS $ 248,154
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable and Accrued Expenses $ 5,722
---------
Total Current Liabilities $ 5,722
Stockholders' Equity
Common Stock, $0.001 par value
100,000,000 shares authorized,
6,000,000 shares issued 6,000
Additional Paid in Capital 486,500
Accumulated deficit <250,068>
---------
Total Stockholders' Equity 242,432
----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 248,154
==========
See Notes to Financial Statements
2
<PAGE>
WORLDBID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
FOR THE THREE MONTHS ENDED JULY 31, 1999
Revenues $ 0
Operating Expenses <179,219>
-----------
Loss Before Other Income <179,219>
Other Income - Interest 723
-----------
Loss Before Provision for <178,496>
Income Taxes
Provision for Income Taxes <0>
-----------
Net Loss <178,496>
Accumulated Deficit, April 30, 1999 <71,572>
-----------
Accumulated Deficit, July 31, 1999 $ <250,068>
===========
Net Loss per Share $ <0.03>
===========
Weighted Average Shares Outstanding 6,000,000
===========
See Notes to Financial Statements
3
<PAGE>
WORLDBID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED JULY 31, 1999
Common Stock Additional Accumulated Total
Dollar Paid in Deficit Stockholders'
Shares Amount Capital Equity
------ ------ ---------- ----------- ------------
Balances
April 30, 1999 6,000,000$ 6,000 $ 486,500 $ <71,572> $ 420,928
Net Loss
Period Ended
July 31, 1999 ------ ---- ----- <178,496> <178,496>
----------------------------------------------------
Balances
July 31, 1999 6,000,000$ 6,000 $ 486,500 $ <250,068> $ 242,432
====================================================
See Notes to Financial Statements
4
<PAGE>
WORLDBID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED JULY 31, 1999
Cash Flows from Operating Activities:
Net Loss $ <178,496>
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities
Amortization 1,550
Depreciation 1,155
Increase <Decrease> in:
Accounts Payable and
Accrued Expenses 110
----------
Net Cash Used by Operating Activities <175,681>
Cash Flows from Investing Activities:
Computer Equipment/Software Purchases $ <45,154>
Office Equipment Purchases <1,434>
Domain Name Registrations <1,680>
---------
Net Cash Used by Investing Activities <48,268>
---------
Net Decrease in Cash <223,949>
Cash, April 30, 1999 366,239
---------
Cash, July 31, 1999 $ 142,290
=========
Supplemental Disclosure of
Cash Flow Information: None
See Notes to Financial Statements
5
<PAGE>
WORLDBID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
---------------------------------------------------
General
-------
Worldbid Corporation (the "Company" or "WBC") was originally
incorporated on August 10, 1998 in the state of Nevada as
"Tethercam Systems, Inc.". On January 15, 1999 the Company
changed its name to Worldbid Corporation.
The Company is engaged in the acquisition and development of
proprietary commercial web sites. WBC plans to earn revenues
from advertising generated on these sites and through e-mail that
targets potential suppliers. The Company's initial business is
transacted through its current Internet web site located at
"www.worldbid.com". This site is still in the development stage.
Basis of Presentation
---------------------
The Company reports revenue and expenses using the accrual method
of accounting for financial and tax reporting purposes.
Use of Estimates
----------------
Management uses estimates and assumptions in preparing these
financial statements in accordance with generally accepted
accounting principles. Those estimates and assumptions affect
the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities, and the reported revenues and
expenses.
Development Stage Company
-------------------------
WBC meets the guidelines of SFAS No. 7 and as such is classified
as a development stage company.
Pro Forma Compensation Expense
------------------------------
WBC accounts for costs of stock-based compensation in accordance
with APB No. 25, "Accounting for Stock Based Compensation"
instead of the fair value based method in SFAS No. 123. No stock
options have been issued by WBC. Accordingly, no pro forma
compensation expense is reported in these financial statements.
6
<PAGE>
WORLDBID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
---------------------------------------------------------------
Depreciation, Amortization and Capitalization
---------------------------------------------
The Company records depreciation and amortization when
appropriate using both straight-line and declining balance
methods over the estimated useful life of the assets (five to
seven years).
Expenditures for maintenance and repairs are charged to expense
as incurred. Additions, major renewals and replacements that
increase the property's useful life are capitalized. Property
sold or retired, together with the related accumulated
depreciation, is removed from the appropriate accounts and the
resultant gain or loss is included in net income.
The Company has capitalized computer software costs incurred
during the application development stage in accordance with SOP
No. 98-1 issued by the American Institute of Certified Public
Accountants. Costs incurred subsequent to this stage to enhance,
manage, monitor and operate the company's website are expensed as
incurred.
Impairment of Long-Lived Assets
-------------------------------
The Company evaluates the recoverability of long-lived assets in
accordance with Statement of Financial Accounting Standards No.
121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be disposed of". SFAS No. 121 requires
recognition of impairment of long-lived assets in the event the
net book value of such assets exceeds the future non-discounted
cash flows attributable to such assets.
Income Taxes
------------
The Company accounts for its income taxes in accordance with
Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes". Under Statement 109, a liability method is
used whereby deferred tax assets and liabilities are determined
based on temporary differences between basis used for financial
reporting and income tax reporting purposes. Income taxes are
provided based on tax rates in effect at the time such temporary
differences are expected to reverse. A valuation allowance is
provided for certain deferred tax assets if it is more likely
than not, that the Company will not realize the tax assets
through future operations.
7
<PAGE>
WORLDBID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
---------------------------------------------------------------
Fair Value of Financial Instruments
-----------------------------------
Financial accounting Standards Statement No. 107, "Disclosures
About Fair Value of Financial Instruments", requires the Company
to disclose, when reasonably attainable, the fair market values
of its assets and liabilities which are deemed to be financial
instruments. The Company's financial instruments consist
primarily of cash and certain investments.
Per Share Information
---------------------
The Company computes per share information by dividing the net
loss for the period presented by the weighted average number of
shares outstanding during such period.
Year 2000 Compliance
--------------------
The Year 2000 issue is the result of computer programs having
been written using two digits (rather than four) to define years.
Computers or other equipment with date-sensitive software may
recognize "00" as 1900 rather than 2000. This could result in
system failures or miscalculations. If the Company or
significant customers, suppliers or other third parties fail to
correct Year 2000 issues, the Company's ability to operate could
be affected.
The following disclosure is pursuant to the Year 2000 Readiness
and Disclosure Act.
Worldbid's Year 2000 program is designed to minimize the
possibility of Year 2000 interruptions. Any such interruption
may have a material adverse impact on the Company's future
operating results. In 1999, the Company established procedures
to identify and assess systems and processes vulnerable to Year
2000 problems. The Company also developed procedures to monitor
levels of compliance within its stated goals of compliance.
8
<PAGE>
WORLDBID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
---------------------------------------------------------------
In each area of vulnerability, various testing and readiness
methodologies are being used to identify and correct suspect
systems, processes or supplier interfaces. The Company projects
to meet its Year 2000 compliance goals prior to the end of 1999.
Recently Issued Accounting Pronouncements
-----------------------------------------
Effective at inception, the Company has adopted the provisions of
SOP No. 98-1, "Software for Internal Use", issued by the American
Institute of Certified Public Accountants.
Other recently issued accounting pronouncements will have no
significant impact on the Company and its reporting methods.
Capitalized Software
--------------------
The Company has capitalized computer software costs incurred
during the application development stage in accordance with
SOP No. 98-1 issued by the American Institute of Certified
Public Accountants. These capitalized costs consist primarily
of direct materials, services and payroll related
costs associated with the coding, installation to hardware and
testing of the Company's software. Costs incurred subsequent
to the Company's application development stage to enhance,
manage, monitor and operate the Company's website will be
expensed as incurred.
NOTE 2 - ACQUISITION OF WORLDBID.COM
------------------------------------
On February 2, 1999 the Company acquired the web site
"worldbid.com" together with all software, tangible and
intellectual assets and rights associated with that site from
Databoat International Limited (Databoat). This web site which
consists of software and registered rights, was accounted for as
an asset acquisition as are other software purchases and
development costs. The Company has issued to Databoat a total of
3,000,000 restricted shares of common stock (Databoat Shares-Fair
Market Value $30,000) pursuant to an acquisition agreement. The
Company has also entered into a consulting agreement with
Databoat's principal stockholder, Mr. Scott Wurtele and on-line
Design, a company controlled by him.
9
<PAGE>
WORLDBID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2 - ACQUISITION OF WORLDBID.COM (CONTINUED)
------------------------------------------------
The Company and Databoat have agreed that the Databoat Shares
will be held in escrow for a period of four years on the terms
and conditions of an escrow agreement between the Company,
Databoat and Cane & Company, the attorneys for the company (the
"Escrow Agreement"). The Databoat shares will be released to
Databoat in accordance with the Escrow Agreement, commencing on
the date which is one year from the date of closing on the
following schedule.
Anniversary of Closing Date Number of Shares
--------------------------- ----------------
One Year 300,000 shares
Two Year 700,000 shares
Three Year 1,000,000 shares
NOTE 3 - PROVISION FOR INCOME TAXES
-----------------------------------
The provision for income taxes for the period ended July 31, 1999
represents the minimum state income tax expense of the Company,
which is not considered significant.
NOTE 4 - COMMITMENTS AND CONTINGENCIES
--------------------------------------
Operating Leases
----------------
The Company currently rents administrative office space from Ms.
Wendy Wurtele, the spouse of a company director Mr. Scott
Wurtele. Current rent under this monthly renewal contract is
$650 per month.
Management Consulting Agreement
-------------------------------
The Company has entered into a consulting agreement, with On-Line
Design, a British Columbia company owned 100% by Mr. Wurtele.
The Company will pay $5,000 per month expiring February 16, 2000
and then $7,500 per month expiring February 16, 2001. In
exchange for these payments, On-Line Design will provide
management and continued development of the Company's business.
Litigation
----------
The Company is not presently involved in any litigation.
10
<PAGE>
WORLDBID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 5 - RELATED PARTY TRANSACTIONS
-----------------------------------
The Company has entered into a consulting agreement (see
management consulting agreement), with on-line Design, a company
controlled by Mr. Scott Wurtele. Databoat, a major stockholder
of WBC, is also controlled by Mr. Scott Wurtele (see Acquisition
of Worldbid.Com).
The company rents its office space from Ms. Wendy Wurtele, the
spouse of a director, Mr. Scott Wurtele.
11
<PAGE>
SUPPLEMENTAL STATEMENT
<PAGE>
WORLDBID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATING EXPENSES
FOR THE THREE MONTHS ENDED JULY 31, 1999
Operating Expenses
Accounting $ 1,800
Amortization 1,550
Bank Charges 112
Consulting 17,040
Depreciation 1,155
Directors Fees 1,500
Legal Fees 16,880
Market Research and Development 31,878
Office Administration 6,120
Office Supplies 579
Postage and Delivery 792
Professional Development 4,880
Programming Efforts Expensed 49,939
Telephone 3,260
Travel and Entertainment 8,358
Web Site Management 33,376
--------
Total Operating Expenses $ 179,219
=========
See Notes to Financial Statements
13
<PAGE>
PART III
INDEX TO EXHIBITS
Exhibit 2.1: Articles of Incorporation
Exhibit 2.2: Certificate of Amendment of Articles of
Incorporation
Exhibit 2.3: By-Laws of the Company
Exhibit 3.1: Specimen Stock Certificate
Exhibit 6.1: Acquisition Agreement between the Company,
Databoat International Limited and Scott
Wurtele dated February 1, 1999
Exhibit 6.2: Original Management Consulting Agreement between
the Company and On Line Design Ltd. dated
February 16, 1999
Exhibit 6.3: Acquisition Amendment Agreement between the
Company, Databoat International Limited, On Line
Design Ltd. and Scott Wurtele dated September 10,
1999
Exhibit 6.4: Employment Agreement between the Company and
Logan Anderson dated August 31, 1999
Exhibit 6.5: Employment Agreement between the Company and
Howard Thomson dated August 31, 1999
Exhibit 6.6: Amended Management Consulting Agreement between
the Company, On Line Design Ltd. and Scott
Wurtele dated September 10, 1999
Exhibit 9.1: Escrow Agreement between the Company, Cane &
Company, LLC and Databoat International Limited
dated February 16, 1999
Exhibit 9.2: Amended Escrow Agreement between the Company,
Cane & Company, LLC and Databoat International
Limited dated September 10, 1999
Exhibit 10.1: Consent of Sarna & Company, Certified Public
Accountants
37
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized.
Date: November 29, 1999
WORLDBID CORPORATION
\s\ Howard Thomson
By: _______________________________
HOWARD THOMSON
Director, Secretary and Treasurer
38
