SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
Amendment No. 1
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the fiscal year ended April 30, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the transition period from ------- to ------
Commission File No. 000-26729
WORLDBID CORPORATION
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(Exact name of Registrant as specified in its charter)
NEVADA 88-0427619
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(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
Suite 1100, 1175 Douglas Street
Victoria, British Columbia, Canada V8W 2E1
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 250-475-2248
Securities registered pursuant to Section 12(b) of the Act:
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NONE
Securities registered pursuant to Section 12 (g) of the Act:
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Common Stock, $0.001 Par Value
Check whether the issuer (l) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
[X] Yes [ ] No
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]
Revenues for year ended April 30, 2000 were $87,729.
The aggregate market value of the voting stock held by non-affiliates computed
by reference to the last reported sale price of such stock as of July 25, 2000
is $24,602,500.
The number of shares of the issuer's Common Stock outstanding as of June 13,
2000 is 14,500,000.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [ X ]
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PART I
This report contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended and Section 21E of the Securities
Exchange Act of 1934, as amended. Actual results could differ materially from
those projected in the forward-looking statements as a result of the
risk-related factors set forth herein.
ITEM 1. Description of Business
Worldbid Corporation (the "Company") is an electronic commerce company that owns
and operates an on-line business-to-business world trade Internet web site. Our
principal web site is located on the Internet at "www.worldbid.com" and is
referred to us as the Worldbid web site. We facilitate business transactions on
the Internet through our Worldbid web site by providing an organized and
systematic tool for businesses to post notices of goods offered for sale and
notices for the request for tender of goods. We use e-mail notifications in
order to enable businesses to connect to each other and to facilitate
transactions. Our focus is on the international trade market and our goal is to
provide an economical means of enabling businesses from around the world to meet
and transact business.
The Worldbid web site solicits businesses that have products for sale or who are
interested in procuring products for purchase. The Worldbid web site enables
businesses to post notices, offers and requests for merchandise, services and
trade leads on the Worldbid web site in a systematic and organized manner. We
connect these businesses by categorizing and matching potential buyers and
sellers and notify these businesses of potential trade partners 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
with minimal involvement from us.
Corporate Organization
Incorporation
We were incorporated pursuant to the laws of the State of Nevada on August 10,
1998. We were originally incorporated as "TetherCam Systems Corp." and changed
of our name to "Worldbid Corporation" on January 20, 1999.
Subsidiaries
Our web site development activities are conducted by our subsidiary, Worldbid
Corporation (formerly Worldbid Networks Ltd.), a British Columbia company that
was incorporated on November 5, 1999.
Acquisition Of The Worldbid Internet Business
Acquisition Agreement
We acquired the Worldbid web site pursuant to an agreement dated February 2,
1999 with Global Internet Holdings Ltd. (formerly Databoat International
Limited) and Scott Wurtele, the principal shareholder of Global Internet
Holdings. Mr. Wurtele is our chief executive officer and is one of our
directors.
We issued a total of 3,000,000 restricted shares of our common stock to Global
Internet Holdings upon closing of the acquisition. These 3,000,000 shares were
placed into escrow on closing and
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are to be released to Global Internet Holdings over a period of four years under
the terms of an escrow agreement between Global Internet Holdings and us. A
total of 300,000 shares was released to Global Internet Holdings Company on
February 2, 2000. A total of 2,700,000 shares remain in escrow and are scheduled
to be released as follows: (i) 700,000 shares on February 2, 2001; (ii)
1,000,000 shares on February 2, 2002; and (iii) 1,000,000 shares on February 2,
2003.
In connection with our acquisition of the Worldbid web site from Global Internet
Holdings, we entered into a consulting agreement with Mr. Wurtele and On Line
Design Ltd. for the services of Mr. Wurtele as our Chief Executive Officer. Mr.
Wurtele was also appointed as a director. On Line Design is a private British
Columbia company, wholly owned by Mr. Wurtele. See "Employees."
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 as 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 Internet.
The World Trade Market on the Internet
We believe we have identified a need in the international business community for
an Internet web site that 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:
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 has the potential to provide a medium for businesses throughout the
world to communicate and facilitate business transactions. We developed the
Worldbid web site with the objective of capitalizing on the demand for a world
trade Internet web site.
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The Worldbid Web Site
The Worldbid web site has been designed by us to enable businesses throughout
the world to locate trade leads for products and services. Businesses who use
the Worldbid Web site are able to post notices to buy or sell products or
services in an organized and categorized manner. The Worldbid web site enables
businesses to locate valuable information regarding the products and services,
including: (i) the identities of potential buyers; (ii) the identities of
potential sellers; and (iii) descriptions of products and services that are
presented in an organized manner by category.
We notify businesses of potential trade leads using a system of e-mail
notifications to inform potential trade partners of notices to buy or sell
products and services that are posted by other businesses on the Worldbid web
site.
Registration
Each business that wishes to take advantage of the Worldbid web site is required
to register with us prior to posting any offer to sell or request for tender.
Businesses are required to register during an on-line Internet session. Each
business is required to provide basic information regarding their business and
identity and to complete a simple questionnaire. We presently do not charge any
fee to register. After registration, a business is permitted to post notices of
offers, view notices posted by other businesses and receive e-mail notifications
of offers from other businesses.
As of April 30, 2000, more than 18,000 businesses registered to use the Worldbid
web site.
Buyers
Each business interested in purchasing a product is given the opportunity to
place a request for tender or procurement or an offer to buy on the Worldbid 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 their contact and e-mail information. Each request for tender is
automatically delivered by e-mail to each business that has entered the Worldbid
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 Worldbid 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 Worldbid web site and entered its contact
information with the request that they receive information regarding specific
products or services that are offered for sale. Each business that 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 Worldbid 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
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in order to receive notifications of any request for tender or offer to sell
within a category of interest.
Categories
The format of the Worldbid 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 sub-categories at the Worldbid
web site by e-mailing us via the Worldbid web site. We believe that this
flexible format will enable us to attract a broad range of businesses that
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 throughout the world enables the Worldbid web site to
be used by businesses to access markets outside their geographic region. Our
experience is that approximately 60% of the businesses that have registered to
use the Worldbid web site are residents of countries outside of the United
States.
Development Focus
We developed the format of the Worldbid web site in order to encourage use by
businesses from around the world in the international trade community. We
believe that the international focus of the Worldbid web site offers a
competitive advantage over competing trade sites that often limit their focus to
specific geographic regions. We have also focused on enabling the Worldbid web
site to facilitate trade in goods that are often the subject of international
trade, such as industrial goods and commodities.
International Worldbid Sites
We have developed a number of international Worldbid web sites and we are
continuing to develop additional international sites. The network of Worldbid
web sites now includes: (i) worldbidgermany.com; (ii) worldbidafrica.com; (iii)
worldbidchina.com; (iv) worldbidmexico.com; (v) worldbiditaly.com; (vi)
worldbidfrance.com; (vii) worldbidindia.com; (viii) worldbidkorea.com; (ix)
worldbiduk.com; (x) worldbidjapan.com; and (xi) worldbidargentina.com.
We developed our international web sites as a means of attracting international
businesses that want to deal in a local country market or in a local language,
rather than English. Usage of our international web sites now accounts for
approximately 10% of the total usage of the Worldbid web sites.
We developed a proprietary database architecture which enables our international
web sites to be linked to our main Worldbid web site, while remaining
independent. Linking the international web sites to our main web site enables us
to allow trade lead data from our main site to be posted on relevant
international web sites and to allow trade lead data received from international
web sites to be posted on our main web site. Trade lead data that is shared
across web sites can be restricted based on defined parameters, such as trade
opportunities within a defined area or trade opportunities within a particular
category.
Auctions
We recently expanded the capabilities of the Worldbid web site to allow auctions
to be conducted on our Worldbid web site. We enable businesses to post products
for auction and our Worldbid web site facilitates bidding by potential buyers.
The successful bidder is notified by e-
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mail. We do not participate in the auction process or any transaction completing
process once an auction item is purchased.
Transaction Completion Process
We presently do not engage in completing transactions between businesses that
have agreed to contracts through the Worldbid web site. The Worldbid web site is
a means for interested parties to make contacts and pursue negotiations between
themselves. We are not involved in the negotiation of the price or any terms of
any contract between potential purchasers and suppliers.
Screening of Notices
We screen notices of products and services which are posted on the Worldbid web
site at our option in order to ensure that notices are appropriate for each
category and do not contain inappropriate content. We have implemented screening
of notices as a means of ensuring that businesses using the Worldbid web site
receive notices that are relevant to their businesses.
Development Of The Worldbid Web Site
Global Internet Holdings started the development of the Worldbid web site in
September 1998. While the Worldbid web site was operational at the time of its
acquisition by us in February 1999, we determined that the functionality and
presentation of the Worldbid web site required upgrading prior to us being able
to market and solicit advertisements for the Worldbid web site. Accordingly, we
proceeded with the development and upgrading of the Worldbid web site upon
completion of its acquisition from Global Internet Holdings. Our development of
the Worldbid web site included a complete restructuring of the Worldbid web
site. This restructuring was comprised of the following elements:
- Re-design of the graphics and presentation of the Worldbid web site;
- Expansion of the functionality of the Worldbid web site to include
additional features, including posting of goods offered for sale and
expanded e-mail notification capabilities;
- Expansion and upgrading of our computer hardware and programming in
order to expand the functionality and capacity of the Worldbid web
site;
- Addition of search capabilities in order that users can search for
products by description or product codes;
- Expansion of the number of categories within the Worldbid web site.
We are continuing to develop additional features for the Worldbid web site and
to enhance the functionality and operation of the web sites. This is an ongoing
process and is required in order to maintain our existing user base in response
to competitive pressures, to attract new businesses and to enable us to earn
revenues from the Worldbid web site, as discussed below.
The Worldbid Business
We have focused most of our business activity to date on the development of the
Worldbid web sites. During this development stage of our business, we reached
the following milestones:
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(a) we commenced earning revenues from advertisements on e-mail trade
notifications in November, 1999;
(b) in excess of 18,000 businesses have registered in order to use the
Worldbid web sites;
(c) we presently transmit in excess of 5,000,000 e-mail trade
notifications in each month to businesses that are using the Worldbid
web sites;
(d) the Worldbid web sites presently receive in excess of 1,000,000 page
views per month.
The achievement of these milestones is important, as the usage of the Worldbid
web site by businesses is an essential element of the implementation of our
business plan. We have offered the Worldbid web site as a free site to date in
order to maximize the number of businesses using our web site and receiving
e-mail trade notifications. As the Worldbid web site is now being used by a
significant number of businesses and contains business information which we
believe to be unique and of value, we are now focusing on generating revenue
from the Worldbid web site.
Revenues
We have identified the following as the primary sources of revenues that we
anticipate that we may be able to earn from the Worldbid web site:
1. sales of advertising placed on e-mail trade notifications which are
transmitted via the Worldbid web site to businesses;
2. selling membership fees and charging usage fees charged to businesses
for using the Worldbid web site and posting requests for tender and
offers for sale on the Worldbid web site;
3. earning commissions and referral fees from referral arrangements with
other companies who generate sales as a result of referrals of
businesses by us;
4. fees charged to partners for partnership arrangements for the joint
marketing and development of our Worldbid international web sites.
Advertising Revenues
We are presently selling space for advertisements to be placed on the e-mail
trade notifications that are transmitted to businesses that are using the
Worldbid web site. We entered into our first advertising sales contracts in
August 1999. Sales of advertising on e-mail trade notifications account for
substantially all of our revenue earned to date.
Advertising on e-mails is a new and emerging means of advertising products and
services using the Internet. We are targeting advertisers involved in the
business of trade and international trade and advertising agencies with clients
involved in the business of trade and international
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trade. We target companies such as over-night courier services, insurance agents
and customs brokers as potential advertisers on the Worldbid web site.
Advertising on e-mail transmissions is a new form of advertising that has yet to
achieve broad-based commercial acceptance. We are undertaking significant market
efforts in order to persuade potential advertisers of the benefits of
advertising on e-mail transmissions that we send to businesses using the
Worldbid web site. Our marketing strategy includes marketing our ability to
focus advertisements for each advertising purchaser on the basis of the various
categories of goods and services on the Worldbid web site. In undertaking these
marketing efforts, we have been pursuing negotiations with advertising agencies
that have multiple clients as a means of concentrating our market efforts.
We have determined that independent verification of use of the Worldbid web site
and e-mail notifications is an essential element of our ability to market the
advertising potential of the Worldbid web site. Accordingly, we have retained an
independent auditor to verify the e-mail notifications sent by us via the
Worldbid web site. Independent audit reports are used by us to substantiate our
e-mail transmission rates to advertising agencies and potential advertisers.
Membership and Usage Fees
We are evaluating the implementation of mandatory membership fees for businesses
that are using the Worldbid web site. In addition, we are also evaluating the
implementation of usage fees which would be charged to business for the benefits
of the Worldbid web site, such as receiving e-mail trade notifications. We have
not charged any membership or usage fees to date in order to encourage
businesses to use the Worldbid web site and to expand the base of businesses
using the Worldbid web site and receiving e-mail notifications. We are in the
process of evaluating this revenue opportunity as usage of the Worldbid web site
increases. We plan to charge fees to businesses once the volume of usage on the
Worldbid web site has increased to a level where businesses are prepared to pay
a fee to post requests for tenders and offers for sale and to receive e-mail
information.
Partnership Programs
We are pursuing partnership arrangements with international businesses that
already engage in electronic commerce. The objective of these partnerships is to
enable us to increase usage of the Worldbid international web sites. We plan to
enter into partnership arrangements with partners who have a combination of
established local business contacts, existing electronic commerce web sites,
local content for web sites and existing electronic commerce clients. We would
offer to our partner access to the Worldbid web site format with the objective
of enhancing the service that the partner would be able to provide through its
existing electronic commerce business. We anticipate that we would enter into
revenue sharing arrangements with our partners for revenues generated on the
Worldbid international web sites in which a partner participates. We also
anticipate charging fees to partners in consideration for us entering into the
partnership arrangement.
Future Revenue Streams
We will continually evaluate alternate revenue streams for the Worldbid web
sites. As usage of the Worldbid web sites grows, the amount of relevant trade
information on our web sites increases. We view this information of potential
value to businesses and we will continually evaluate means to earn revenue from
this opportunity.
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The Internet electronic commerce market is rapidly evolving and presenting us
with new revenue opportunities. However, this rapid evolution could also result
in existing revenue streams being reduced or eliminated due to technological
change and competition.
Employees
As of June 30, 2000, we had a total of sixteen (16) employees, of which fifteen
(15) are full-time employees and one is a part-time employee. In addition, we
have eight (8) full-time equivalent contract personnel and five (5) part-time
contract personnel.
The services of Mr. Scott Wurtele as our chief executive officer are provided
pursuant to an agreement dated September 10, 1999 between us, On Line Design and
Mr. Wurtele. The services provided by Mr. Wurtele include management of our
day-to-day business operations. The term of our agreement with Mr. Wurtele is
for a term expiring on February 15, 2001. We currently pay On Line Design a
consultant fee of $7,500 per month for Mr. Wurtele's services. Mr. Wurtele's
consulting agreement may only be renewed for additional terms upon written
agreement between Mr. Wurtele and us. Any agreement for an extension of the term
would include agreement upon the consulting fee for the subsequent term.
The services of Mr. Logan Anderson as our president are provided pursuant to an
employment agreement dated August 31, 1999 between Mr. Anderson and us. The
services provided by Mr. Anderson include exercising general direction and
supervision over our business and financial affairs, providing overall direction
to our management and performing such other duties and observing such
instructions as may be reasonably assigned to his from time to time in his
capacity of our president. Mr. Anderson is required to devote approximately 15%
of his business time to our business until such time our positive working
capital equals or exceeds $750,000 at which time Mr. Anderson has agreed to
devote approximately 80% of his business time to our business. We currently pay
Mr. Anderson a salary of $1,000 per month. Mr. Anderson's salary will increase
to $7,500 per month upon Mr. Anderson being required to devote 80% of his
business time to our business. The term of our agreement with Mr. Anderson is
for a term of one year, provided that we 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 his employment agreement upon three
months written notice to us. The employment agreement may only be renewed for
additional terms upon written agreement between Mr. Anderson and us. Any
agreement for an extension of the term would include agreement upon the salary
for the subsequent term. Mr. Anderson presently devotes approximately 15% of his
business time to our business.
The services of Mr. Howard Thomson as our secretary and treasurer are provided
pursuant to a written employment agreement dated August 31, 1999 between Mr.
Thomson and us. The services provided by Mr. Thomson include ensuring that
proper corporate, financial and administrative records are maintained by us,
supervising and advising on the conduct of our financial affairs, and
coordinating all our auditing functions. Mr. Thomson is required to devote
approximately 15% of his business time to our business until such time as our
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 our
business. We currently pay Mr. Thomson a salary of $750 per month. Mr. Thomson's
salary will increase to $5,000 per month upon Mr. Thomson being required to
devote 80% of his business time to our business. The term of our agreement with
Mr. Thomson is for a term of one year, provided that we can terminate without
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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 his employment agreement
upon three months written notice to us. The employment agreement may only be
renewed for additional terms upon written agreement between Mr. Thomson and us.
Any agreement for an extension of the term would include agreement upon the
salary for the subsequent term. Mr. Thomson presently devotes approximately 15%
of his business time to our business.
The services of Mr. Paul Wagorn as our chief operating officer are provided
pursuant to a written employment agreement dated March 1, 2000 between our
subsidiary, Worldbid Networks, and Mr. Wagorn. Mr. Wagorn is paid a salary of
$5,220 CDN per month and supervises our web site development and operations. Our
agreement with Mr. Wagorn may be terminated by either us or Mr. Wagorn
delivering written notice of termination, subject to a minimum notice period
which is currently less than 60 days.
Our future performance depends upon the continued contributions of members of
senior management and other key personnel. We do not have long-term employment
agreements with any of our key personnel, other than set forth above and we do
not maintain key person life insurance. Competition for attracting and retaining
personnel in the industry is intense, and we need to be successful in attracting
qualified employees in order for our business to succeed in the future. If one
or more of our key personnel leaves and/or joins or forms a competitor, this
could have a harmful effect on our business.
Technology
We use a combination of proprietary technology and commercially available
licensed technology to operate the Worldbid web sites.
Software
We are the owner of proprietary software that has been developed by us and is
incorporated into the Worldbid web sites. This proprietary software includes
search engine software, advertising management software and certain web site
management tools. We continue to develop proprietary software to enhance and
expand the capabilities of the Worldbid web sites in circumstances where
commercial third party software does not meet our requirements or is too
expensive. We believe that the continued development of our own proprietary
software is essential to the success of our business.
The operation of our computer network servers that host the Worldbid web site
depends on operating system software, database software, and server software
that has been developed, produced by and licensed from third parties. Software
that we acquire from third parties is software that is commercially available
software and is not software developed specifically for the Company.
Operations
We own the servers that host the Worldbid web sites. Our computer network
servers are presently located in Vancouver, British Columbia on the premises of
NetNation Communications Inc., our Internet service provider, at 2040-555 West
Hastings Street, Vancouver, British Columbia. NetNation Communications presently
provides us with the following services: Internet connection services, Internet
band-with, and storage of our servers at NetNation
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Communications premises. We do not have any agreement directly with NetNation
Communications but receive services through an Internet service provider
agreement between NetNation Communications and Global Internet Holdings. We pay
a monthly fee to Global Internet Holdings as reimbursement to Global Internet
Holdings of the expenses incurred by Global Internet Holdings in connection with
the services provided by NetNation. This expense is approximately $4,000 per
month and varies according to bandwidth consumed by us. We anticipate that this
expense will increase as usage of the Worldbid web sites and the volume of
e-mail notifications delivered increases.
We are currently in the process of upgrading our computer network operations in
order that we can accommodate increased use of the Worldbid web sites and
increased e-mail transmissions. The upgrade will consist of the addition of two
additional computer servers and associated computer hardware that will be
located at our head office in Victoria, British Columbia. This computer
equipment has been purchased and is in the process of being integrated into our
operations. Our new computer servers will be connected to the Internet via a
fiber-optic cable connection. The upgrade to our computer network operations
will enable us to accommodate a ten-fold increase in the usage of the Worldbid
web sites without the acquisition of any new computer hardware. We intend to
maintain our existing servers at NetNation Communications as back-up servers
once we have switched operations to the new computer servers.
Internet Gateway
We do not own a gateway onto the Internet, but instead rely on an Internet
service provider to connect the Worldbid web site to the Internet. We use
Internet service providers to provide connectivity to the Internet, Internet
traffic and data routing services and e-mail services. The Internet service
provider provides us with a high speed Internet access line to the World Wide
Web. As discussed above, we are in the process of upgrading these
telecommunication and Internet service facilities in order to enable our
computer systems to handle increased usage of the Worldbid web sites.
Intellectual Property And Other Proprietary Rights
Our performance and ability to compete are dependent to a significant degree on
the continued protection of our proprietary technology. We rely upon 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 our proprietary rights.
We have applied for registration of the "Worldbid" trademark in the United
States. We 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 that we provide. There can be no assurance that we will be able
obtain a trademark for "Worldbid" or to secure significant protection for our
service marks or trademarks. If granted, the issuance of a trademark will not be
definitive of our right to use the trademark in conjunction with our services.
Our rights would be subject to (i) the patent and trademark 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.
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We have applied to the United States Patent Office for a patent of the
customized trade facilitation system and associated custom advertising and
notifications systems that we have developed and incorporated into the Worldbid
web sites. There is no assurance that patent protection will be granted by the
United States Patent Office.
We are the owner of the "www.worldbid.com" domain name. It is possible that our
competitors or others will adopt Internet domain names or product or service
names similar to "Worldbid", thereby impeding our ability to establish
recognition and usage of the Worldbid web sites and creating confusion amongst
users and potential users of the Worldbid web sites.
Research And Development Expenditures
We have spent the following amounts on research and development activities since
the acquisition of the Worldbid web sites in February, 1999:
February 16, 1999 to
April 30, 2000
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Research and Development Operating Expenditures: $94,081
Development Expenditures Capitalized as Assets: $158,355
Total Research and Development Expenditure $252,436
Research and development activities have consisted of the development of the
Worldbid web sites and programming and software developments associated with the
Worldbid web sites.
Competition
We currently or potentially compete with a variety of other companies involved
in facilitating business transactions via the Internet. These competitors
include: (i) direct competing Internet web sites involved in facilitating
business to business transactions, including VerticalNet.Com, Inc.,
Tradecompass.com and Alibaba.com; (ii) competing Internet web sites focused on
specific industries, including Plasticnet.com and Ventro Corporation; (iii)
traditional business to business competitors that are attempting to expand their
existing businesses to electronic commerce; and (iv) traditional business to
business advertising and commerce competitors, including trade magazines and
trade associations. The presence of existing or future competition may impair
our ability to charge user fees or other services charges to businesses that use
the Worldbid web sites.
Our business plan anticipates that revenue will be earned from sales of
advertising on e-mail transmissions. We face competition for advertising revenue
from a broad spectrum of businesses using the Internet that are attempting to
sell advertising on their web sites or on e-mails transmitted from their web
sites. 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 our
ability to earn revenue from advertising fees.
We anticipate that competition in the electronic commerce market will increase
in the future as low barriers to entry characterize electronic commerce.
Moreover, current and potential competitors may expand the capabilities of their
web sites to compete directly with our Worldbid web sites. Accordingly, it is
possible that new competitors or alliances among competitors may
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emerge and attract users and potential users from the Worldbid web sites. In
addition, potential users may elect to sell their products directly without use
of the Worldbid web sites.
Increased competition may result in the reduction in potential advertising and
usage fees, the reduction of usage of the Worldbid web sites and our inability
to generate business acceptance of the Worldbid web sites. Each of these factors
would likely result in increased operating costs and our inability to generate
revenues, any one of which could materially adversely affect our business,
results of operations and financial condition. Many of our current and potential
competitors have significantly greater financial, marketing, customer support,
technical and other resources than we do. As a result, such competitors may be
able to attract potential users away from the Worldbid web sites, 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
we can.
Government Regulation
Our experience is that users from multiple state and international jurisdictions
use the Worldbid web sites. While we do not directly participate in any
transaction completed between businesses using the Worldbid web site, we
transmit 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 our business. Applicability of these laws may have the result
that we are prohibited from transmitting e-mails to users in certain states or
countries or that we 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.
We may have to qualify to do business in other jurisdictions. As the Worldbid
web sites are available over the Internet in multiple states and foreign
countries, and as the users of our Worldbid web sites are resident in such
states and foreign countries, such jurisdictions may claim that we are 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 us to taxes and penalties.
We are not aware of any environmental laws that are applicable to the operation
of our 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.
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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.
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.
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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 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.
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
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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 2. Description of Property
We are presently in the process of locating our corporate head office in the
United States. We have not determined the location of our corporate head office
or entered into any lease for our corporate head office.
The business operations of our operating subsidiary, Worldbid Networks Ltd., are
conducted from leased premises in Victoria, British Columbia, Canada. Worldbid
Networks leases approximately 5,000 square feet of office space at Suite 1100,
1175 Douglas Street, Victoria, British Columbia, for a term expiring July 31,
2003. Our Worldbid web site operations and development activities are carried
from these premises.
We do not have any policies with respect to investments in real estate, real
estate mortgages or securities of or interests in real estate investments. We do
not intend to engage in such activities.
ITEM 3. Legal Proceedings
We are not a party to any pending legal proceedings and to our knowledge, no
legal proceedings are threatened or contemplated.
ITEM 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to our security holders for a vote during the fiscal
year ended April 30, 2000.
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PART II
ITEM 5. Market for Registrant's Common Equity and Related Stockholders Matters
Market Information
Our shares are currently trading on the OTC Bulletin Board under the stock
symbol WBID. The first day on which our shares were traded was July 6, 2000. The
high and the low bid prices for our shares for each quarter of actual trading
were:
Quarter High Low
------- ---- ---
1st Quarter 2000 N/A N/A
2nd Quarter 2000 N/A N/A
3rd Quarter 2000 $4.00 $2.00
The quotations reflect inter-dealer prices, without retail mark-up, markdown or
commission and may not represent actual transactions.
The closing price of our common stock was $1.4375 on October 20, 2000.
There were 39 registered shareholders of our common stock as at July 24, 2000.
Dividends
We issued a stock dividend to our shareholders of record on June 26, 2000. Each
shareholder of record was issued an additional one share of our common stock for
each share held prior to the record date. Our common stock was approved for
trading on a post-split basis effective as of June 27, 2000. As a result of this
stock dividend, the issued and outstanding shares of our common stock increased
from 7,250,000 shares to 14,500,000 shares.
The issuance of dividends to shareholders is at the discretion of our board of
directors. We have not issued any cash dividends since our inception and we do
not have plans to do so in the foreseeable future.
Recent Sales of Unregistered Securities
We completed the issuance of 3,000,000 common shares to Global Internet Holdings
at a deemed price of $0.01 per share pursuant to the acquisition agreement for
the Worldbid web site dated February 2, 1999. These shares were issued to Global
Internet Holdings pursuant to Section 4(2) of the 1933 Act. Global Internet
Holdings 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 Global Internet Holdings are "restricted" shares, as defined in
the 1933 Act. Global Internet Holdings is a private company a controlled by Mr.
Scott Wurtele, a director of the Company.
We completed an offering of 2,000,000 shares of our 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
our officers and directors. We received total proceeds of $20,000 from this
offering. No commissions or fees were paid in connection with the offering. Mr.
Logan Anderson, a director and our president, purchased 450,000 shares of our
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common stock pursuant to this offering. Mr. Howard Thomson, a director and our
secretary and treasurer, purchased 50,000 shares of our common stock pursuant to
this offering.
We completed an offering of 700,000 shares of our 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 our officers and directors. We received total proceeds of $140,000 from this
offering. No commissions or fees were paid in connection with the offering.
We 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 our officers and
directors. We received total proceeds of $300,000 from this offering. No
commissions or fees were paid in connection with the offering. Mr. Howard
Thomson, a director and our secretary and treasurer, purchased 5,000 shares of
our common stock pursuant to this offering.
We completed the sale of 1,250,000 units during the period from January 2000 to
June 2000 at a price of $1.25 per unit. We raised total proceeds of $1,203,750
from this offering. No commissions or fees were paid in connection with the
offering. All sales were completed pursuant to Rule 506 of Regulation D of the
Act. Each unit was comprised of one share of our common stock and one share
purchase warrant. In aggregate, a total of 1,250,000 shares and warrants to
purchase an additional 1,250,000 shares were issued. As a result of the stock
dividend described below, each purchaser was issued one additional share for
each share purchased and the terms of the warrants were amended in accordance
with the anti-dilution provisions of each warrant. As a result of these
anti-dilution provisions, the warrants now represent the right to purchase a
total of 2,500,000 shares of our common stock at a price of $0.75 during the
first year following the closing and at a price of $0.875 during the second year
following the closing.
We approved an incentive stock option plan on January 17, 2000 that provides for
the grant of incentive stock options to purchase our common stock to our
directors, officers, employees and permitted consultants. Options to purchase a
total of up to 2,175,000 shares of our common stock may presently be granted
under the stock option plan.
We granted options to purchase a total of 915,000 shares of our common stock
under the stock option plan during the period from January 2000 through the end
of June 2000. These options were doubled after the stock dividend as a result of
the anti-dilution provisions of the option agreements. Thus there are currently
options to purchase 1,830,000 shares of our common stock outstanding. Each
option granted is for a term of four years from the date of grant and is
exercisable at price of $0.75 per share. Of the options granted, options to
purchase a total of 715,000 shares of our common stock are held by our officers
and directors. Additional options to purchase a total of 1,115,000 shares are
held by our employees and eligible consultants, each of which options is subject
to vesting over a period of four years from the date the employee or consultant
joined us as an employee or consultant.
We completed the issue of 7,250,000 shares of our common stock upon completion
of our stock dividend on June 26, 2000. Each of our shareholders received one
additional share of our common stock for each share held as of June 26, 2000. We
did not receive any proceeds from the issue of these shares of our common stock
to our shareholders.
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ITEM 6. Management's Discussion and Analysis or Plan of Operation
Plan of Operation
Our objective is to establish the Worldbid web sites as the premier
business-to-business internet websites for world trade. We believe that the
achievement of this objective will result in increased usage of the Worldbid web
sites by businesses and increased volumes of e-mail notifications being
transmitted by us. The achievement of increased use of the Worldbid web sites
and transmission of e-mail notifications are essential components of our ability
to earn revenues and to be profitable.
Our plan of operations for the next 12-month period involves completion of the
following business objectives:
Increasing Sales of Advertising
The Worldbid web sites presently receive more than one million page views per
month. In addition, we are transmitting in excess of 5 million e-mail
notifications in each month. The primary source of our current revenue comes
from advertising on e-mail notifications; however, we are only earning revenue
on advertisements on a portion of the e-mail notifications that we transmit. Our
objective is to increase the amount of advertising revenue we receive through
advertising on e-mail transmissions in order to maximize the revenue potential
of this income source. We plan to develop relationships and arrangements with
advertising agencies and advertisers who are prepared to advertise on e-mail
notifications transmitted via the Worldbid web sites. We intend to use our
independent audit reports of the usage of our Worldbid web sites as a basis for
increasing sales to advertisers directly and through advertising agencies. A key
component of our marketing program will be our ability to focus advertising on
targeted markets.
Implementation of Usage Fees for the Worldbid Web Sites
We are continuing to evaluate the implementation of usage fees to be charged to
businesses using the Worldbid web sites. Our plan is to continue to upgrade the
Worldbid web sites to enable us to charge usage fees for various services
offered by us through the Worldbid web sites. We plan to develop software that
will enable us to invoice businesses and collect payments electronically through
our Worldbid web sites.
We will continue to assess the implementation of various different forms of
usage fees through the next twelve months. Specific usage fees that we are
considering include charging businesses a monthly fee for access to the Worldbid
web sites, charging businesses for e-mail trade notifications received in
response to postings on the Website, and charging businesses for the ability to
access information on trade notifications via the Worldbid web sites. The
implementation of usage fees will depend on a number of factors, including the
time at which competitors begin charging for their services and the time at
which we consider that the information available to businesses on our Website is
of sufficient value to convince businesses to pay for access to this
information.
In order to enable us to begin charging businesses for access to information on
our Website, we have recently modified our Website to require businesses to
register with us prior to posting any offers for sales or requests for tender on
our Website. This registration process is an initial step in being able to
charge businesses for access to information on our Website.
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Marketing of the Worldbid Web Sites
We will attempt to increase the visibility and brand recognition of the Worldbid
web sites through a variety of marketing and promotional campaigns. The purpose
of the marketing and promotional campaigns will be to increase the number of
businesses that are using the Worldbid web sites. The advertising campaigns may
involve advertising in conventional print media and on complimentary Internet
web sites. The nature and extent of any marketing and promotional campaigns
conducted by us for the Worldbid web sites will depend on the availability of
funding.
Partnerships for International Web Sites
We plan to initiate partnership programs over the next twelve months for the
development of our Worldbid international web sites. We are attempting to enter
into partnership arrangements with electronic commerce businesses in other
countries for the development and marketing of these web sites. Specific web
sites which may be operated under a partnership program include the
worldbiduk.com, worldbidafrica.com, and worldbidspain.com web sites. We are
pursuing partnership programs with potential e-commerce partners who have any of
the following:
(i) A developed user base of businesses;
(ii) Internet design and e-commerce experience;
(iii) International trade connections;
(iv) Existing business-to-business e-commerce websites; and
(v) Local market business connections.
We believe that we can offer potential partners a sophisticated means of
enabling their clients to access valuable international trade information. Any
partnership program would be operated on a revenue sharing basis.
Upgrade of the Worldbid Web Sites
We plan to continually upgrade the Worldbid web sites over the next twelve
months in order to maintain our competitive position and to take advantage of
new technology. We plan to introduce a redesigned version of the Worldbid web
sites by August, 2000. The redesigned Website will offer users faster access and
more intuitive ease of use of the Worldbid web sites.
We anticipate that we will spend a minimum of $3,000,000 over the next
twelve-month period in pursing our stated plan of operations. Of these
anticipated expenditures, we anticipate that approximately $1,200,000 will be
spent over the next six months. We may spend up to $6,000,000 over the next
twelve-month period in pursuing our stated plan of operations if we are
successful in achieving sufficient financing to support the expenditures. If we
are successful in achieving sufficient financing, we anticipate that the
majority of the increase in expenditures would be directed toward marketing and
promotion of the Worldbid web sites generally. If we do not achieve sufficient
funding, then this marketing and promotional campaign would be scaled back to
reflect available funding.
We anticipate that we will hire approximately twenty additional employees over
the next twelve-month period in implementing our stated plan of operations. We
anticipate that these employees
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will include be distributed equally between the business development, web site
operations, support staff and sales areas of our business.
Results Of Operations
We earned revenues of $87,729 for the year ended April 30, 2000. Our revenues
consisted primarily of revenues from advertising on the e-mail trade
notifications. Revenues from advertising commenced in August 1999. Of the
revenues earned during the year, revenues earned during the last quarter of the
year totaled $56,568, representing 64.5% of total revenues for the year. We
anticipate that revenue from advertising will increase if the number of e-mail
trade notifications that we send continues to increase and if we can increase
the rate of paid advertising on our e-mail trade notifications.
Our operating expenses were $1,195,217 for the year ended April 30, 2000,
compared to operating expenses of $71,572 for the period ended April 30, 1999.
Our increased operating expenses are the result of the expansion of our business
operations during the year. Significant expenses included the hiring of new
employees, the establishment of our operating office in Victoria, British
Columbia and the increased cost of managing and developing the Worldbid web
sites. The increase in operating expenses compared to the period ended April 30,
1999 reflects that fact that the operating expenses for the period ended April
30, 1999 reflect only three months of active operations. We expect that our
operating expenses and research and development costs will increase
substantially as we attempt to expand our business operations in accordance with
our business plan and our stated plan of operations.
We recorded a net loss of $1,104,640 for the year ended April 30, 2000, compared
to a net loss of $71,571 for the period ending April 30, 1999. This loss
reflects our increased operating expenses during the year and the fact that we
did not achieve material revenues during the year. The increase in loss compared
to the loss for the period ended April 30, 1999 also reflects the fact that the
period ended April 30, 1999 reflects only three months of active operations. We
anticipate that losses will increase as we increase our operating expenses to
carry out our plan of operations. In particular, we recently increased our
advertising expenses associated with carrying out a marketing campaign of our
business and the Worldbid web sites. There is no assurance that these
advertising expenses will result in increased revenues.
Liquidity And Capital Resources
We had cash on hand of $86,911 and working capital of $34,186 as of April 30,
2000. Our monthly operating expenses have increased to approximately $200,000
per month. Our revenues have increased to approximately $30,000 per month and
are not sufficient to support our stated plan of operations or our existing
operating expenses.
We completed the sale of units consisting of shares of our common stock and
share purchase warrants during the year ended April 30, 2000 for total proceeds
of $912,500. We completed the sale of additional units subsequent to April 30,
2000 for additional proceeds of $291,250. The funds raised from the offering
have been applied to fund our working capital requirements and to fund our
increased marketing campaign.
Our current cash reserves are only sufficient to enable us to operate for an
additional 2 months, assuming that our revenues remain constant. Accordingly, we
will shortly require additional financing if we are to continue our business
operations. We anticipate that any additional financing would be through the
sales of our common stock. We do not have any arrangements in
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place for the sale of any of our common stock and there is no assurance that we
will be able to achieve funding through the sales of our common stock.
We anticipate that we will continue to incur losses for the foreseeable future.
We base this expectation in part on the expectation that we will incur
substantial marketing and operating expenses in completing our stated plan of
operations. Our future financial results are also uncertain due to a number of
factors, many of which are outside of our control. These factors include, but
are not limited to:
(i) our ability to increase revenue from advertisements from e-mail
notifications transmitted via the Worldbid web sites
(ii) our ability to implement usage fees for the Worldbid web sites without
significantly reducing use of the Worldbid web sites and the number of
e-mail trade notifications.;
(iii) our ability to achieve funding, which is necessary to achieve our
stated plan of operations;
(iv) our ability to compete with existing and new business-to-business
electronic commerce web sites and the success of any marketing and
promotional campaign which we conduct for the Worldbid web sites.
Our stated plan of operations includes forward-looking statements. Our actual
results may differ materially from this stated plan of operations. Factors which
may cause our actual results or our actual plan of operations to vary include
decisions of the board of directors not to pursue the stated plan of operations
based on a reassessment by our board of directors of the plan which is in our
best interest, change in the internet business environment and changes in
general economic conditions and those factors which we have identified as risk
factors in this Form 10-KSB Annual Report.
Impact of the Year 2000 Issue
The "Year 2000 problem" arose because many existing computer programs use only
the last two digits to refer to a year. Therefore, these computer programs were
not expected to properly recognize a year that begins with "20" instead of the
familiar "19". Many experts believed that if not corrected this problem would
lead to widespread computer failures. The New Year commenced in January,
however, we have not experienced any adverse effects of this Year 2000 problem.
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ITEM 7. Financial Statements
INDEX TO FINANCIAL STATEMENTS
Page
----
Independent Auditor's Report ................................................24
Consolidated Financial Statements:
Consolidated Balance Sheet ................................................25
Consolidated Statement of Operations
and Accumulated Deficit .................................................26
Consolidated Statement of Changes
in Stockholders' Equity .................................................27
Consolidated Statement of Cash Flows ......................................28
Notes to Consolidated Financial Statements ................................29
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INDEPENDENT AUDITORS' REPORT
To the Board of Directors
And Stockholders
Worldbid Corporation
In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of operations and accumulated deficit, changes in
stockholders' equity, and statement of cash flows present fairly, in all
material respects, the financial position of Worldbid Corporation and its
subsidiary for the year ended April 30, 2000 and for the period ended April 30,
1999, in conformity with accounting principles generally accepted in the United
States. These consolidated financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
consolidated financial statements based on our audits. We conducted our audits
of these statements in accordance with auditing standards generally accepted in
the United States, which 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 consolidated financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental consolidated 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
Westlake Village, California
June 26, 2000
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WORLDBID CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
APRIL 30
ASSETS ------------------------
2000 1999
----------- -----------
Current Assets
Cash $ 86,911 $ 366,239
Accounts Receivable 39,772 0
----------- -----------
Total Current Assets 126,683 366,239
Property and Equipment
Computer Software 62,077 15,461
Computer Equipment 155,886 0
Web Site 69,573 44,840
Office Equipment 43,073 0
----------- -----------
Total Property and Equipment 330,609 60,301
Less Accumulated Depreciation (66,122) 0
----------- -----------
Net Property and Equipment 264,487 60,301
Other Assets - Domain Names 9,865 0
----------- -----------
TOTAL ASSETS $ 401,035 $ 426,540
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable and Accrued Expenses $ 92,497 $ 5,612
----------- -----------
Total Current Liabilities 92,497 5,612
Stockholders' Equity
Common Stock, $0.001 par value
100,000,000 shares authorized,
6,730,000 and 6,000,000 shares issued 6,730 6,000
Additional Paid in Capital 1,478,020 486,500
Accumulated deficit (1,176,212) (71,572)
----------- -----------
Total Stockholders' Equity 308,538 420,928
----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 401,035 $ 426,540
=========== ===========
See Notes to Consolidated Financial Statements
25
<PAGE>
WORLDBID CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
YEAR ENDED INCEPTION
APRIL 30 8/10/98 TO
2000 4/30/99
------------ ------------
Revenues $ 87,729 0
Operating Expenses (1,195,217) (71,572)
------------ ------------
Loss Before Other Income (1,107,488) (71,572)
Other Income - Interest 2,848 (0)
------------ ------------
Loss Before Provision for
Income Taxes (1,104,640) (71,572)
Provision for Income Taxes (0) (0)
------------ ------------
Net Loss (1,104,640) (71,572)
Accumulated Deficit, Beginning of Period (71,572) (0)
------------ ------------
Accumulated Deficit, End of Period $(1,176,212) $ (71,572)
============ ============
Net Loss per Share $ (0.18) $ (0.01)
============ ============
Weighted Average Shares Outstanding 6,020,000 5,025,000
============ ============
See Notes to Consolidated Financial Statements
26
<PAGE>
WORLDBID CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
Common Stock
-----------------
Additional Accumulated Total
Dollar Paid in Deficit Stockholders'
Shares Amount Capital Equity
-------- -------- ------------ ------------- --------------
<S> <C> <C> <C> <C> <C>
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
February 15, 1999
$.01 per share 2,000,000 2,000 18,000 -- 20,000
Common Stock Issued
February 17,1999
$.20 per share 700,000 700 139,300 -- 140,000
Common Stock Issued
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
------------------------------------------------------------------------
Balances
April 30, 1999 6,000,000 $ 6,000 $ 486,500 $ (71,572) $ 420,928
Common Stock Issued
April 20, 2000
$1.25 per share 730,000 730 991,520 -- --
Net Loss
Period Ended
April 30, 2000 -- -- -- (1,104,640) (112,390)
Balances
April 30, 2000 6,730,000 $ 6,730 $1,478,020 $ (1,176,212) $ 308,538
========================================================================
</TABLE>
See Notes to Consolidated Financial Statements
27
<PAGE>
WORLDBID CORPORATION AN SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
YEAR ENDED INCEPTION
APRIL 30 8/10/98 TO
2000 4/30/99
------------- ------------
Cash Flows from Operating Activities:
Net Loss $ (1,104,640) $ (71,572)
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities
Amortization 1,096 --
Depreciation 66,122 --
(Increase) Decrease in:
Accounts Receivable 39,772) --
Increase (Decrease) in:
Accounts Payable and
Accrued Expenses 86,885 5,612
------------- ------------
Net Cash Used by Operating Activities (990,309) (63,460)
Cash Flows from Investing Activities:
Purchases of Property and Equipment (270,308) (30,301)
Acquisition of Domain Names (10,961) --
------------- ------------
Net Cash Used by Investing Activities (281,269) (30,301)
Cash Flows from Financing Activities:
Net Proceeds from the Issuance of
Common Stock 992,250 460,000
------------- ------------
Net Cash Provided by Financing Activities 992,250 460,000
------------- ------------
Net Increase (Decrease) in Cash (279,328) 366,239
Cash at Beginning of Period 366,239 --
------------- ------------
Cash at End of Period $ 86,911 $ 366,239
============= ============
See Notes to Consolidated Financial Statements
28
<PAGE>
WORLDBID CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED 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 business of facilitating electronic commerce via
the Internet. The company owns and operates an online business-to-business world
trade web site, which is located on the Internet at "www.Worldbid.com". The
Worldbid web site facilitates business transactions on the Internet by providing
an organized and systematic tool for business to post notices of goods for sale
and notices for the request for tender of goods. The Company uses electronic
e-mail notifications in order to enable businesses to connect and transact
business. The Company currently earns revenues from advertising on e-mail
notifications, which are transmitted to businesses using the worldwide web site.
The Company plans to increase the revenue generating capabilities of its
Worldbid web site by charging fees to businesses for services provided via the
Worldbid web site.
Basis of Presentation
---------------------
The consolidated financial statements as presented include the accounts of
Worldbid Corporation and its subsidiary Worldbid Networks, Inc. All intercompany
balances have been eliminated.
The Company reports revenue and expenses using the accrual method of accounting
for financial and tax reporting purposes. All reported amounts are in U.S.
dollars.
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.
29
<PAGE>
WORLDBID CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED 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 pro forma compensation expense is reported in these
financial statements.
Accounts Receivable
-------------------
No allowance for uncollectable accounts has been provided. Management has
evaluated the accounts and believes they are all collectable.
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.
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.
30
<PAGE>
WORLDBID CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
---------------------------------------------------------------
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.
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.
Earnings Per Share Information
------------------------------
The Company computes basic earnings per share information by dividing the net
loss for the period presented by the weighted average number of shares
outstanding during such period. Common share equivalents are not included in
this calculation if the effect of their inclusion is anti-dilutive.
Advertising Expense
-------------------
The company recognizes advertising expenses when incurred in accordance with SOP
93-7 "Reporting on Advertising Costs." As such, the Company expenses the cost of
producing advertisements at the time the production occurs, and expenses the
costs of communicating advertising in the period in which the advertising space
or airtime is used.
Comprehensive Income
--------------------
Effective at inception, the Company adopted the provisions of SFAS No. 130,
"Reporting Comprehensive Income." SFAS No. 130 establishes standards for
reporting comprehensive income and its components in financial statements.
Comprehensive income, as defined, includes all changes in equity (net assets)
during a period from non-owner sources. At April 30, 2000 and 1999, the Company
did not have transactions that were required to be reported in comprehensive
income.
31
<PAGE>
WORLDBID CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
---------------------------------------------------------------
Recently Issued Accounting Pronouncements
-----------------------------------------
Recently issued accounting pronouncements will have no significant impact on the
Company and its reporting methods.
Capitalized Software
--------------------
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. Accordingly the Company has capitalized computer software
costs incurred during the application development stage in accordance with this
standard. These capitalized costs consist primarily of direct materials,
services and payroll related costs associated with 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 are expensed as incurred.
NOTE 2 - ACQUISITION OF WORLDBID.COM
------------------------------------
On February 15, 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.
32
<PAGE>
WORLDBID CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED 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
--------------------------- ----------------
February 15, 2000 300,000 (Released on Schedule)
February 15, 2001 700,000 shares
February 15, 2002 1,000,000 shares
February 15, 2003 1,000,000 shares
Subsequent to the acquisition of Worldbid.com, Databoat International Limited
changed its name to Global Internet Holdings Ltd.
NOTE 3 - PROVISION FOR INCOME TAXES
-----------------------------------
The provision for income taxes for the year ended April 30, 2000 and for the
period ended April 30, 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 leases office space under a noncancelable-operating lease. This
operating lease terminates July 31, 2003. In connection with the lease
arrangement, the Company is obligated to make rental payments of $1,280 per
month with a scheduled increase to $1,365 effective August 1, 2002.
Future annual minimum rental commitments are as follows:
Year
2000 $10,240
2001 $15,360
2002 $15,785
2003 $ 9,555
33
<PAGE>
WORLDBID CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 4 - COMMITMENTS AND CONTINGENCIES - CONTINUED
--------------------------------------------------
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 has paid $5,000
per month for the contract term expiring February 16, 2000. This obligation has
increased to $7,500 per month expiring February 16, 2001. In exchange for these
payments, On-Line Design provides 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 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 - STOCK OPTION SUMMARY
-----------------------------
The following table summarizes information about stock options outstanding at
April 30, 2000:
Options Outstanding at April 30, 2000
-------------------------------------
Exercise Number of Shares Remaining
Prices Outstanding Contractual Life
-------- ---------------- -----------------
Directors Plan $ 1.50 317,500 4 Years
Employees &
Consultants $ 1.50 285,000 4 Years
-------
602,500
=======
34
<PAGE>
WORLDBID CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 6 - STOCK OPTION SUMMARY - CONTINUED
-----------------------------------------
2000 Employee & Consultants Stock Option Plan
---------------------------------------------
On January 17, 2000, the Board of Directors and the Company adopted the 2000
Stock Option Plan and reserved 285,000 shares of Common Stock for issuance to
the employees and consultants of the Company. Each option will entitle the
holder to purchase one share of common stock of the Company at a price of $1.50
per share for a four year term expiring on February 1, 2004, subject to vesting
at 25% per year.
2000 Directors Stock Option Plan
--------------------------------
On January 17, 2000, the Board of Directors and the Company adopted the 2000
Directors Stock Option Plan and reserved 317,500 shares of Common Stock for
issuance to the directors of the Company. Each option will entitle the holder to
purchase one share of common stock of the Company at a price of $1.50 per share
for a four-year term expiring on February 1, 2004. All options will vest upon
execution of the option agreement.
NOTE 7 - SUBSEQUENT EVENTS
--------------------------
The Company has issued options to purchase an additional 312,500 shares to
employees and consultants during the period May 1, 2000 to June 23, 2000. Each
option is exercisable at a price of $1.50 per share for a four-year period. Of
the 312,500 options, 100,000 will vest upon execution of the option agreement
and 212,500 are subject to vesting at 25% per year.
The Company completed the sale of an additional 520,000 units during the period
from May 1, 2000 - June 23, 2000. Each unit consists of one share of the
Company's Common Stock, $0.001 par value and one share purchase warrant. Each
warrant is exercisable for a period of two years at a price of $1.50 per share
during the first year following closing and at a price of $1.75 during the
second year following closing.
On June 26, 2000, the Company issued to each of the shareholders of the Company
a total of one additional share of the Company's common stock for each
outstanding share of the Company's common stock held by each shareholder. Each
share will be deemed to be a validly issued, fully paid and non-assessable share
of the Company's common stock.
35
<PAGE>
PART III
ITEM 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
Directors and Officers
The following information sets forth the names of our officers and directors,
their present positions, and their biographical information.
Name Age Office(s) Held
---- --- --------------
Scott Wurtele 54 Director and Chief Executive Officer
Logan Anderson 45 Director and President
Howard Thomson 53 Director, Chief Financial Officer,
Secretary and Treasurer
Paul Wagorn 31 Director and Chief Operating Officer
Scott Wurtele is the Company's chief executive officer. Mr. Wurtele was
appointed as a director of the Company on September 10, 1999. Mr. Wurtele was
appointed as the Company's chief executive officer on February 17, 2000. From
1992 to present, Mr. Wurtele has been the president and controlling shareholder
of Global Internet Holdings, a private company founded by Mr. Wurtele in 1992.
Among other things, Global Internet Holdings developed an Internet boating book
Worldbid web site and operated it for several years before selling it. Mr.
Wurtele was responsible for the development of Global Internet Holdings as an
electronic commerce company, the production of a multi-media CD for boating book
publications and the establishment of the Global Internet Holdings' Worldbid web
site. Prior to establishing Global Internet Holdings in 1992, Mr. Wurtele was
involved in construction and project management for approximately 20 years. Mr.
Wurtele provides consulting services to the Company through On Line Design Ltd.,
a company of which Mr. Wurtele is sole shareholder, director, and officer.
Logan Anderson is the Company's president. Mr. Anderson was appointed as a
director of the Company and the Company's 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 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
36
<PAGE>
and director of a number of private and public companies in the past 12 years,
including PLC Systems, Inc. and 3D-Systems Inc.
Howard Thomson is the Company's chief financial officer, secretary and
treasurer. Mr. Thomson was appointed a director of the Company and the Company's
secretary and treasurer on February 12, 1999. Mr. Thomson was appointed as the
Company's chief financial officer on February 17, 2000. 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 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 quoted on the National Association of Securities Dealers' OTC
Bulletin Board.
Paul Wagorn is the Company's chief operating officer. Mr. Wagorn was appointed
as a director of the Company and chief operating officer on February 17, 2000.
Mr. Wagorn has been working in the computer field for the past 12 years, in
which he has served in both the public and private sectors as a software and
database engineer, project manager, and support specialist. From 1987 to 1989,
Mr. Wagorn worked for Consumer and Corporate Affairs Canada, leading a team to
computerize the data retrieval system for Canadian Patents and develop a quality
assurance system for Canadian Patent Examiners. Mr. Wagorn subsequently worked
on various small and large database-systems projects integrating new technology
with existing data. From 1991 to 1999, Mr. Wagorn worked for JD Micro Devices
Inc., a computer firm, as the Corporate Sales Manager and a Network Engineer and
Software Engineer.
Dr. Lloyd Baron is an independent director, appointed to the Board of Directors
on September 20, 2000. Dr. Baron has been involved with international business
development for over 25 years. He has served as advisor to private and public
organizations throughout North America as well as in Asia, Africa, the Caribbean
and Latin America. In 1985, he founded Horizon Pacific International and, as its
managing director, assembled a team of consultants to facilitate joint ventures
between emerging Asian enterprises and their counterparts in North America.
Since 1996, Dr. Baron has been President and CEO of Autoship Systems
Corporation, a software development company that is a market leader in several
marine industry niches. Dr. Baron is a graduate of Michigan University, M.A.
Economics, and McGill University, Ph.D. Economics.
Committees Of The Board Of Directors
The Company does not have an audit committee, compensation committee, nominating
committee, an executive committee of the Board of Directors, Stock Plan
Committee or any other committees. However, the Board of Directors may establish
various committees during the current fiscal year.
Compensation Of Directors
Directors of the Company do not receive cash compensation for their services as
directors or members of committees of the Board, but are reimbursed for their
reasonable expenses incurred in attending Board or Committee meetings. The
Company's 2000 Stock Option Plan permits the grant of options for the purchase
of shares of Common Stock to directors of the Company. See below "Summary
Compensation Table, Stock Option Grants" for information about options granted
to Directors for the fiscal year ended April 30, 2000.
37
<PAGE>
Terms of Office
Our directors are appointed for one year terms to hold office until the next
annual general meeting of the holders of our 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 the our by-laws. Our officers
are appointed by our board of directors and hold office until removed by our
board of directors.
Section 16(a) Beneficial Ownership Reporting Compliance
The following persons have failed to file, on a timely basis, the identified
reports required by section 16(a) of the Exchange Act during the most recent
fiscal year.
Number Transactions Known Failures
of Late Not Timely To File a Required
Name and Principal Position Reports Reported Form
--------------------------- ------- -------- ------------------
Logan Anderson, Director 2 0 None
President
Howard Thomson, Director 2 0 None
Chief Financial Officer
Secretary and Treasurer
Scott Wurtele, Director 2 0 None
Chief Executive Officer
Paul Wagorn, Director 2 0 None
Chief Operating Officer
ITEM 10. Executive Compensation
The following table sets forth certain information as to the Company's highest
paid executive officers and directors for the Company's fiscal year ended April
30, 2000. No other compensation was paid to any such officer or directors other
than the cash and stock option compensation set forth below.
38
<PAGE>
<TABLE>
SUMMARY COMPENSATION TABLE
-------------------------------------------------------------------------------------------------------------
Annual Compensation Long-Term Compensation
------------------------------ -------------------------------------
Pay-
Awards outs
----------------------- --------
Other Securities All
Annual Resticted Under- Other
Name and Compen- Stock lying Compen-
Principal Salary Bonus sation Award(s) Options/ LTIP sation
Position Year ($) ($) ($) ($) SARs (#) Payouts ($)
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Scott April $66,250 nil nil nil 115,000 nil nil
Wurtele,(1) 2000
Chief Executive
Officer and
Director
-------------------------------------------------------------------------------------------------------------
Logan April $8,000 nil nil nil 300,000 nil nil
Anderson, 2000
President and
Director
-------------------------------------------------------------------------------------------------------------
Howard April $9,750 nil nil nil 150,000 nil nil
Thomson,(2) 2000
Chief Financial
Officer,
Secretary/
Treasurer and
Director
-------------------------------------------------------------------------------------------------------------
Paul April $40,000 nil nil nil 150,000 nil nil
Wagorn,(3) 2000
Chief Operating
Officer and
Director
-------------------------------------------------------------------------------------------------------------
</TABLE>
Notes:
1) Cash compensation attributed to Scott Wurtele was paid pursuant to a
consulting agreement with On Line Design Ltd., a company wholly-owned
by Mr. Wurtele. Mr. Wurtele was appointed as the Company's chief
executive officer on February 17, 2000.
2) Mr. Thomson was secretary and treasurer on February 12, 1999. Mr.
Thomson was appointed as the Company's chief financial officer on
February 17, 2000.
3) Mr. Wagorn was appointed chief operating officer on February 17, 2000.
Stock Option Grants
The following table sets forth information with respect to stock options granted
to each of the Company's directors and officers during the Company's most recent
fiscal year ended April 30, 2000:
39
<PAGE>
<TABLE>
Common Shares % of Total
under Options/SARs Exercise or Base
Options/SARs Granted to Price
Granted Employees in ($/Common Share)
Name #(1) Financial Year Expiration Date
=======================================================================================================
<S> <C> <C> <C> <C>
Scott Wurtele,(2) 115,000 9.5% $0.75 February 1, 2004
Chief Executive
Officer and Director
-------------------------------------------------------------------------------------------------------
Logan Anderson, 300,000 24.9% $0.75 February 1, 2004
President and Director
-------------------------------------------------------------------------------------------------------
Howard 150,000 12.5% $0.75 February 1, 2004
Thomson,(3)
Chief Financial
Officer, Secretary/
Treasurer and Director
-------------------------------------------------------------------------------------------------------
Paul Wagorn,(4) 150,000 12.5% $0.75 February 1, 2004
Chief Operating Officer
and Director
-------------------------------------------------------------------------------------------------------
</TABLE>
Notes:
1) Gives effect to the 2 share for 1 share stock dividend issued to
shareholders of the Company on June 26, 2000.
2) Mr. Wurtele was appointed as the Company's chief executive officer on
February 17, 2000.
3) Mr. Thomson was secretary and treasurer on February 12, 1999. Mr.
Thomson was appointed as the Company's chief financial officer on
February 17, 2000.
4) Mr. Wagorn was appointed chief operating officer on February 17, 2000.
Exercises of Stock Options and Year-End Option Values
None of the options granted to any of the Company's officers and directors have
been exercised.
The following is a summary of the share purchase options exercised by our
officers, directors and employees during the financial year ended December 31,
1999:
40
<PAGE>
<TABLE>
AGGREGATED OPTION/SAR EXERCISES DURING THE LAST
FINANCIAL YEAR END AND FINANCIAL YEAR-END OPTION/SAR VALUES
Value of Unexercised
Common Shares Unexercised Options in-the-Money
Acquired on Aggregate at Financial Options/SARs at
Exercise Value Realized Year-End (#) Financial Year-End
Name (#) ($) ($) (1)
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Scott Wurtele,(2) Nil N/A 115,000 N/A
Chief Executive Officer
and Director
----------------------------------------------------------------------------------------------------------------
Logan Anderson, Nil N/A 300,000 N/A
President and Director
----------------------------------------------------------------------------------------------------------------
Howard Thomson,(3) Nil N/A 150,000 N/A
Chief Financial Officer,
Secretary/ Treasurer and
Director
----------------------------------------------------------------------------------------------------------------
Paul Wagorn,(4) Nil N/A 150,000 N/A
Chief Operating Officer
and Director
----------------------------------------------------------------------------------------------------------------
</TABLE>
Note:
1) There was no trading market for our shares at April 30, 2000.
Outstanding Stock Options
The following table shows the issued and outstanding stock options held by the
Company's officers and directors, and by each person known by the Company to
beneficially own more than 5% of the Company's common stock as of October 1,
2000.
<TABLE>
Name Exercise Price No. of Options Date of Grant Vesting Date Expiry Date
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Scott Wurtele $0.75 115,000 Feb. 1, 2000 Feb. 1, 2000 Feb. 1, 2004
Logan Anderson $0.75 300,000 Feb. 1, 2000 Feb. 1, 2000 Feb. 1, 2004
Howard Thomson $0.75 150,000 Feb. 1, 2000 Feb. 1, 2000 Feb. 1, 2004
Paul Wagorn $0.75 70,000 Feb. 17, 2000 Feb. 17, 2000 Feb. 1, 2004
Lloyd Baron $0.75 80,000 Jun. 24, 2000 Sep. 20, 2000 Jun. 24, 2004
Paul Wagorn $0.75 20,000 Feb. 1, 2000 Sep. 20, 2000 Feb. 1, 2004
Paul Wagorn $0.75 20,000 Feb. 1, 2000 May 1, 2001 Feb. 1, 2004
Paul Wagorn $0.75 20,000 Feb. 1, 2000 May 1, 2001 Feb. 1, 2004
Paul Wagorn $0.75 20,000 Feb. 1, 2000 May 1, 2001 Feb. 1, 2004
Harold Moll $0.75 150,000 Jun.23, 2000 Jun. 23, 2000 Jun. 23, 2004
</TABLE>
In addition, options have been granted pursuant to the Company's stock option
plan to Wendy Wurtele to purchase a total of 60,000 shares of the Company's
common stock and to Daniel Wurtele to purchase a total of 60,000 shares of the
Company's common stock. Wendy Wurtele is the spouse of Scott Wurtele. Daniel
Wurtele is the son of Scott Wurtele and Wendy Wurtele. Each option is
exercisable at a price of $0.75 per share for a four-year term from the date of
grant. In addition, each option is subject to vesting over a period of four
years from the
41
<PAGE>
respective date on which Wendy Wurtele or Daniel Wurtele joined the Company as
an employee or consultant. Wendy Wurtele provides administration services to the
Company on a full-time basis. Daniel Wurtele provides computer programming and
web site development services to the Company on a full-time basis.
ITEM 11. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information concerning the number of
shares of our common stock owned beneficially as of October 1, 2000 by: (i) each
person (including any group) known to us to own more than five percent (5%) of
any class of our voting securities, (ii) each of our directors, and (iii)
officers and directors as a group. Unless otherwise indicated, the shareholders
listed possess sole voting and investment power with respect to the shares
shown.
<TABLE>
Title of Class Name and Address of Amount and Percentage of Class(1)
Beneficial Owner Nature of
Beneficial
Ownership
------------------------------------------------------------------------------------------------------------
Officers and Directors
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock Global Internet Holdings Ltd./ 5,975,540(3) 40.75%(3)
Scott Wurtele, (2)
1110 - 1175 Douglas Street
Victoria, British Columbia
Canada V8W 2E1
------------------------------------------------------------------------------------------------------------
Common Stock Logan Anderson, 1,200,000(4) 8.08%(4)
1110 - 1175 Douglas Street
Victoria, British Columbia
Canada V8W 2E1
------------------------------------------------------------------------------------------------------------
Common Stock Howard Thomson, 260,000(5) 1.77%(5)
1110 - 1175 Douglas Street
Victoria, British Columbia
Canada V8W 2E1
------------------------------------------------------------------------------------------------------------
Common Stock Paul Wagorn, 90,000(6) 0.62%(6)
1110 - 1175 Douglas Street
Victoria, British Columbia
Canada V8W 2E1
------------------------------------------------------------------------------------------------------------
Common Stock Lloyd Baron, 80,000(7) 0.55%(7)
1110 - 1175 Douglas Street
Victoria, British Columbia
Canada V8W 2E1
------------------------------------------------------------------------------------------------------------
5% Shareholders
------------------------------------------------------------------------------------------------------------
Common Stock Harold C. Moll, 1,600,000(8) 10.77%(8)
1110 - 1175 Douglas Street
Victoria, British Columbia
Canada V8W 2E1
------------------------------------------------------------------------------------------------------------
Common Stock Tibet Ltd., 1,580,000(9) 10.30%(9)
73 Front Street,
P.O. Box HM2908
Hamilton, Bermuda HM LX
------------------------------------------------------------------------------------------------------------
Common Stock Zebrawood Holdings 1,468,000(10) 9.60(10)
Saint Andrews Court
Fredrick Street Steps
Nassau, Bahamas N4805
------------------------------------------------------------------------------------------------------------
Common Stock Abaderra Ltd. 1,400,000(11) 9.30%(11)
27 Reid Street
Hamilton, Bermuda
------------------------------------------------------------------------------------------------------------
</TABLE>
42
<PAGE>
<TABLE>
Title of Class Name and Address of Amount and Percentage of Class(1)
Beneficial Owner Nature of
Beneficial
Ownership
------------------------------------------------------------------------------------------------------------
Officers and Directors as a Group
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock Officers and Directors as a 7,620,000(12) 49.80%(12)
Group
(8 persons)
------------------------------------------------------------------------------------------------------------
</TABLE>
Notes:
(1) Based on 14,550,000 shares of Common Stock of the Company issued and
outstanding on October 1, 2000.
(2) Global Internet Holdings Ltd. (formerly, Databoat International
Limited) is a private company controlled by Scott Wurtele, CEO and a
director of the Company. Global Internet Holdings Ltd. owns 5,860,540
shares of the Company. Scott Wurtele is the President of Global
Internet Holdings Ltd. and the beneficial owner of shares held by
Global Internet Holdings Ltd.
(3) Includes 5,860,540 shares held by Global Internet Holdings Ltd. and
115,000 shares that are acquirable upon the exercise of stock options
held by Scott Wurtele within 60 days of October 1, 2000. Does not
include shares that are acquirable upon the exercise of stock options,
which Mr. Wurtele does not control, held by Wendy Wurtele, Mr.
Wurtele's wife, or Daniel Wurtele, his son.
(4) Includes 900,000 shares held by Logan Anderson and 300,000 shares that
are acquirable upon the exercise of stock options by Logan Anderson
within 60 days of October 1, 2000.
(5) Includes 110,000 shares held by Howard Thomson and 150,000 shares that
are immediately acquirable upon the exercise of stock options by
Howard Thomson within 60 days of October 1, 2000.
(6) Consists of 90,000 shares that are immediately acquirable upon the
exercise of stock options by Paul Wagorn within 60 days of October 1,
2000.
(7) Consists of 80,000 shares that are immediately acquirable upon the
exercise of stock options by Lloyd Baron within 60 days of October 1,
2000.
(8) Includes 1,300,000 shares held by Harold Moll and 150,000 shares that
are immediately acquirable upon the exercise of stock options and
150,000 shares that are acquirable upon the exercise of warrants by
Harold Moll within 60 days of October 1, 2000.
(9) Includes 790,000 shares held by Tibet Ltd. and 790,000 shares
acquirable upon the exercise of warrants within 60 days of October 1,
2000.
(10) Includes 734,000 shares held by Zebrawood Holdings and 734,000 shares
acquirable upon the exercise of warrants within 60 days of October 1,
2000.
(11) Includes 900,000 shares held by Abaderra Ltd. and 500,000 shares
acquirable upon the exercise of warrants within 60 days of October 1,
2000.
(12) Includes (a) 5,860,540 shares held by Global Internet Holdings Ltd.
and 115,000 shares that are acquirable upon the exercise of stock
options held by Scott Wurtele within 60 days of October 1, 2000; (b)
900,000 shares held by Logan Anderson and 300,000 shares that are
acquirable upon the exercise of stock options by Logan Anderson within
60 days of October 1, 2000; (c) 110,000 shares held by Howard Thomson
and 150,000 shares that are immediately acquirable upon the exercise
of stock options by Howard Thomson within 60 days of October 1, 2000;
(d) 90,000 shares that are immediately acquirable upon the exercise of
stock options by Paul Wagorn within 60 days of October 1, 2000; (e)
80,000 shares that are acquirable upon the exercise of stock options
by Lloyd Baron within 60 days of October 1, 2000; and (f) 15,000
shares that are immediately acquirable upon the exercise of stock
options by other officers of the Company within 60 days of October 1,
2000
43
<PAGE>
Except as otherwise noted, it is believed by the Company that all persons have
full voting and investment power with respect to the shares indicated. Under the
rules of the Securities and Exchange Commission, a person (or group of persons)
is deemed to be a "beneficial owner" of a security if he or she, directly or
indirectly, has or shares the power to vote or to direct the voting of such
security, or the power to dispose of or to direct the disposition of such
security. Accordingly, more than one person may be deemed to be a beneficial
owner of the same security. A person is also deemed to be a beneficial owner of
any security, which that person has the right to acquire within 60 days, such as
options or warrants to purchase the Common Stock of the Company.
Security Ownership of Management.
We not aware of any arrangement that might result in a change in control in the
future.
ITEM 12. Certain Relationships and Related Transactions.
Except as set forth below, none of the directors or officers of the Company, nor
any proposed nominee for election as a director of the Company, nor any person
who beneficially owns, directly or indirectly, shares carrying more than 10% of
the voting rights attached to all outstanding shares of the Company, nor any
promoter of the Company, nor any relative or spouse of any of the foregoing
persons has any material interest, direct or indirect, in any transaction since
the date of the Company's incorporation or in any presently proposed transaction
which, in either case, has or will materially affect the Company.
We acquired the Worldbid web site from Global Internet Holdings in consideration
for the issue to Global Internet Holdings of a total of 3,000,000 restricted
shares of our common stock. See Item 1. - Description of Business - Acquisition
of Worldbid Internet Business. Global Internet Holdings is a private company
controlled by Scott Wurtele, our chief executive officer and a director. Mr.
Wurtele is the sole director of Global Internet Holdings and is the president of
Global Internet Holdings. Mr. Wurtele is the registered owner of 70.5% of the
voting common shares of Global Internet Holdings. Wendy Wurtele, the spouse of
Scott Wurtele, is the owner of 13.1% of the voting common shares of Global
Internet Holdings. Daniel Wurtele, the son of Scott Wurtele and Wendy Wurtele,
is the owner of 2.6% of the voting common shares of Global Internet Holdings.
We have entered into a consulting agreement with Mr. Wurtele. See Item 1. -
Description of Business - Employees.
We have entered into an employment agreement with Logan Anderson, our president
and a director. See Item 1. - Description of Business - Employees.
We have entered into an employment agreement with Howard Thomson, our chief
financial officer, secretary and treasurer and a director. See Item 1. -
Description of Business - Employees.
We have entered into an employment agreement with Paul Wagorn, our chief
operating officer and a director. See Item 1. - Description of Business -
Employees.
44
<PAGE>
ITEM 13. Exhibits, Financial Statement Schedules and Reports on Form 8-K
Exhibits Description
-------- -----------
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, Global Internet
Holdings 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, Global
Internet Holdings 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 Global Internet Holdings International Limited dated
February 16, 1999*
Exhibit 9.2: Amended Escrow Agreement between the Company, Cane &
Company, LLC and Global Internet Holdings International
Limited dated September 10, 1999*
Exhibit 23.1: Consent of Sarna & Company, Certified Public Accountants
Exhibit 27.1: Financial Data Schedule
----------------
* Incorporated by reference from our registration statement on Form
10-SB12G/A filed with the commission on November 30, 1999 (File No.
0-26729)
45
<PAGE>
Financial Statements
See Part II, Item 7.
Reports on Form 8-K
None.
46
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
WORLDBID CORPORATION
By: /s/ Logan Anderson
---------------------------------
Logan Anderson, Director Date: October 20, 2000
President
In accordance with the Securities Exchange Act, this report has been signed
below by the following persons on behalf of the registrant and in the capacities
and on the dates indicated.
By: /s/ Logan Anderson
---------------------------------
Logan Anderson, Director Date: October 20, 2000
President
By: /s/ Scott Wurtele
---------------------------------
Scott Wurtele, Director Date: October 20, 2000
Chief Executive Officer
By: /s/ Howard Thomson
---------------------------------
Howard Thomson, Director Date: October 20, 2000
Chief Financial Officer, Secretary
and Treasurer
By: /s/ Paul Wagorn
---------------------------------
Paul Wagorn, Director Date: October 20, 2000
Chief Operating Officer
47
<PAGE>
EXHIBIT INDEX
Exhibits Description
-------- -----------
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, Global Internet
Holdings 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, Global
Internet Holdings 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 Global Internet Holdings International Limited dated
February 16, 1999*
Exhibit 9.2: Amended Escrow Agreement between the Company, Cane &
Company, LLC and Global Internet Holdings International
Limited dated September 10, 1999*
Exhibit 23.1: Consent of Sarna & Company, Certified Public Accountants
Exhibit 27.1: Financial Data Schedule
----------------
* Incorporated by reference from our registration statement on Form
10-SB12G/A filed with the commission on November 30, 1999 (File No.
0-26729)
