U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Under Section 12(g) of
The Securities Exchange Act of 1934
BIDHIT.COM, INC.
(Name of Small Business Issuer in its charter)
Nevada 91-1973193
(State or other jurisdiction of (I.R.S. Employer
Incorporation of organization) Identification No.)
Suite 204
18702 North Creek Parkway
Bothell, Washington 98011
(Address of principal executive offices) (Zip code)
(425)424-3660
(Issuer's telephone number)
Securities to be registered pursuant to Section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Shares
(Title of Class)
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ITEM 1 - DESCRIPTION OF BUSINESS..........................................................................3
ITEM 2 - DESCRIPTION OF PROPERTY..........................................................................4
ITEM 3 - LEGAL PROCEEDINGS................................................................................4
ITEM 4 - MARKET FOR COMMON EQUITY AND RELATED STOCHOLDER MATTERS..........................................4
ITEM 5 - DESCRIPTION OF SECURITIES........................................................................5
ITEM 6 - MANAGEMENT'S PLAN OF OPERATION...................................................................6
ITEM 7 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS....................................................6
ITEM 8 - DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.....................................6
ITEM 9 - EXECUTIVE COMPENSATION...........................................................................9
ITEM 10 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.................................10
ITEM 11 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.................................................10
ITEM 12 - FINANCIAL STATEMENTS...........................................................................11
ITEM 13 - EXHIBITS.......................................................................................11
</TABLE>
<PAGE>
ITEM 1 - DESCRIPTION OF BUSINESS
The Issuer was incorporated under the laws of the State of Nevada on October 13,
1995 under the name "Painted Desert Farms, Inc.". The Issuer changed its name to
"Third Millennium Software Corp." on January 5, 1998, and then to "BidHit.com,
Inc." on May 7, 1999. The Issuer has not been involved in any bankruptcy,
receivership or similar proceedings. There has been no material
reclassification, merger, consolidation or purchase or sale of significant
assets not in the ordinary course of the Issuer's business.
The Issuer is an internet service provider which has developed an interactive
online auction house business. Through the Issuer's web site located at
www.BidHit.com, the Issuer operates a live Internet auction which retails
computers and consumer electronics.
There is no requirement for any government approval of the Issuer's principal
products or services. There are no existing or probable governmental regulations
which will have a material affect on the current business of the Issuer.
The Issuer specializes in providing leading business-to-business and
business-to-consumer auction services for brand name consumer electronics and
computer products, and has recently expanded its offerings to include sports
memorabilia.
Presently, the Issuer offers close to 1,000 products for sale each week, during
two auction periods. The Issuer derives commission revenue from its
pre-qualified vendors based on completed product sales. At the close of each
auction, each pre-qualified vendor is forwarded their respective order
information, and the items are drop-shipped directly to the customer. The Issuer
holds no inventory and assumes no liability for the items offered for auction.
Although the Issuer has several new services in the design process, none have
been publicly announced to date.
Industry research makes it clear that there is considerable upside potential in
the Online Auction business. However, the quality of service and the number of
providers in the Online Auction industry constantly fluctuate. The Issuer's
research indicates that many online auction customers find it difficult to
obtain reliable and authoritative product and category information and that they
are often disappointed with the nature and quality of the product and the
reliability of the vendor. The Issuer is focusing on meeting these consumer
needs to develop a strong return-customer base. The Issuer's commitment to
enable its members to make smart and informed decisions will keep them coming
back to the Issuer.
The Issuer's competitive edge will be in building its online community and in
attracting and retaining its customers with the industry's most highly focused
and effective consumer education and customer service programs. The Issuer is
also offering an unparalleled commitment to a vendor and product validation
process to ensure that its products and services adhere to rigid quality
standards. The Issuer is combining this strategy with cutting-edge database
reporting and tracking capabilities, consistent with its privacy and permission
marketing policies, to institute a smart and innovative database-driven
relational marketing program to serve the needs and interests of its community.
<PAGE>
There are a number of well-known and well-financed companies in the online
auction industry. However, the Issuer believes that by focusing on providing
services of real benefit and interest to its customers, the Issuer can create
and sustain a significant and growing market niche within the burgeoning online
electronic commerce industry.
The Issuer is not a manufacturer and does not deal with any raw materials. The
suppliers of goods listed for auction include Mirage Monitors of California,
Telecom Corporation of Chicago, Liage International of New York, Leasure Time
Industries of Florida, and Purplus Soft of California. As an Internet sales
company with a broad customer base, the Issuer does not have a dependence on one
customer.
The Issuer has no patents or trademarks in place or pending at this time. The
Issuer has no franchises and does not have any royalty agreements in place. Both
Tim Black, President and Jeff Mendenhall, Vice-President of the Issuer, are
under 2 year employment contracts. Also see item 9 "Executive Compensation".
The Issuer does not require government approval for any of its products or
services. There are no government regulations being imposed or considered for
the online auction industry. The Issuer is compliant with all government
regulations to date.
The Issuer has spent approximately 120 hours over the past two years on research
and development. None of the costs of this R & D was borne directly by the
Issuer's customers.
There are no federal, state or local environmental laws with which the Issuer is
not in compliance.
The Issuer has 4 full-time employees and no part-time employees.
The Issuer owns no real property.
ITEM 2 - DESCRIPTION OF PROPERTY
The Issuer leases approximately 1900 square feet of commercial space at 18702
North Creek Parkway, Bothell, Washington, 98011 which serves as the Issuer's
principal operations office. The Issuer's President, Mr. Tim Black and
Vice-President, Mr. Jeff Mendenhall service the Issuer's web site,
administration and accounting from this location.
The Issuer is not engaged in real estate activities.
ITEM 3 - LEGAL PROCEEDINGS
The Issuer is not a party to any pending or threatened legal proceedings.
ITEM 4 - MARKET FOR COMMON EQUITY AND RELATED STOCHOLDER MATTERS
<PAGE>
(A) MARKET INFORMATION
The Issuer's shares have been quoted on the NASD OTC Bulletin Board since May
13, 1999 under the symbol "BHIT". The Issuer's shares were previously quoted
under the symbol "TMSW"
<TABLE>
<CAPTION>
QUARTER PERIOD HIGH BID LOW BID SOURCE
- -------------- -------- ------- ------
<S> <C> <C> <C>
October, 1997 21 1/4 8-1/8 Bloomberg
to December, 1997
January, 1998 10 2-7/16 Bloomberg
to March, 1998
April, 1998 Not Available Not Available Not Available
to June, 1998
July, 1998 1 1/4 1 1/4 Not Available
to September, 1998
October, 1998 1 1/4 5/8 Not Available
to December, 1998
January, 1999 Not Available Not Available Not Available
to March, 1999
April, 1999 6.50 4.00 PC Quote
to June, 1999
July, 1999 6.50 2.75 PC Quote
to September, 1999
</TABLE>
Quotations for the Issuer's common shares reflect inter-dealer prices, without
retail markup, markdown or commission and may not represent actual transactions.
(B) STOCKHOLDERS
The Issuer has approximately 42 holders of common shares.
No dividends have been declared on the Issuer's common shares. There are no
restrictions that limit the ability to pay dividends on the Issuer's common
shares.
ITEM 5 - DESCRIPTION OF SECURITIES
The Issuer's authorized capital stock consists of 50,000,000 shares of Common
stock, par value $0.001 per share. There are 10,788,750 shares of Common stock
issued and outstanding as of the date of this filing.
Common Stock
All shares of Common stock have equal voting rights and, when validly issued and
outstanding, are entitled to one vote per share in all matters to be voted upon
by shareholders. The shares of Common stock have no pre-emptive, subscription,
conversion or redemption rights and may be issued only as fully paid and
non-assessable shares. Cumulative voting in the election of directors is not
permitted, which means that the holders of a majority of the issued and
outstanding shares of Common stock represented at any meeting at which a quorum
is present will be able to elect the entire Board of Directors if they so choose
and, in such event, the holders
<PAGE>
of the remaining shares of Common stock will not be able to elect any director.
In the event of liquidation of the Issuer, each shareholder is entitled to
receive a proportionate share of the Issuer's assets available for distribution
to shareholders after the payment of liabilities and after distribution in full
of preferential amounts, if any. All shares of the Issuer's Common stock issued
and outstanding are fully paid and non-assessable. Holders of the Common stock
are entitled to share pro rata in dividends and distributions with respect to
the Common stock, as may be declared by the Board of Directors out of funds
legally available.
The Issuer has not offered any debt securities.
The Issuer has not registered any securities.
ITEM 6 - MANAGEMENT'S PLAN OF OPERATION
The Issuer's plan of operation for the next twelve months is as follows:
(i) At its current and 12 month projected rate of expenditure, the Issuer
can satisfy all of its cash requirements and does not anticipate
raising additional funds during the period.
(ii) The Issuer plans no product research and development over the course
of the next 12 months.
iii) The Issuer does not expect to purchase any operation or sell any of
its current operation for the term of the plan.
(iv) The Issuer plans to add employees only as needed and projects growth
of 8 full-time employees in the next 12 months.
ITEM 7 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
On April 30, 1999, the Issuer's former auditor, Barry L. Friedman, was asked to
resign to permit the appointment of Davidson & Company as auditors.
Mr. Friedman's report on the financial statements of the Issuer for both of the
past two fiscal years contained no adverse opinion or disclaimer of opinion nor
was it modified as to uncertainty, audit scope or accounting principles.
The decision to change accountants of the Issuer was recommended and approved by
the Issuer's board of directors.
There were no disagreements with Mr. Friedman on any matter of accounting
principles or practices, financial statement disclosure or auditing scope or
procedure.
ITEM 8 - DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The directors and officers of the Issuer are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<PAGE>
<S> <C> <C>
Tim Black 31 President, Secretary and Director
Jeff Mendenhall 27 Vice-President and Director
Alan Gerson 53 Director
</TABLE>
The above listed officers and directors will serve until the next annual meeting
of the shareholders or until their death, resignation, retirement, removal, or
disqualification, or until their successors have been duly elected and
qualified. Vacancies in the existing Board of Directors are filled by majority
vote of the remaining directors. Officers of the Issuer serve at the will of the
Board of Directors. There are no family relationships between any executive
officer or director of the Issuer.
Mr. Tim Black, Mr. Jeff Mendenhall and Mr. Alan Gerson are the directors of the
Issuer. Messrs. Black, Mendenhall and Gerson have been directors of the Issuer
since May 28, 1999. Mr. Tim Black holds offices of president, secretary and
treasurer.
Messrs. Black, Mendenhall and Gerson hold no other directorships in any other
reporting companies. The following are descriptions of Messrs. Black, Mendenhall
and Gerson's business experience for the past five years.
TIM BLACK
Timothy J. Black founded Interactive Auction Online (IAO) in February of 1997.
Prior to forming IAO, Mr. Black headed the Materials department of Midisoft
Corporation (OTCBB:MIDI) located in Issaquah, Washington. While with Midisoft,
Mr. Black's team was responsible for the procurement, planning, scheduling and
implementation of the entire Midisoft software and hardware product base. Before
joining Midisoft, he was a Senior Purchasing Agent for software giant Attachmate
Corporation, located in Bellevue, Washington.
Since the formation of IAO, Mr. Black has been responsible for the development,
planning and execution of all major aspects of the business, including supplier
negotiation, product planning and development, Internet marketing, and strategic
alliance positioning. In May of 1999, IAO changed its name to BidHit.com
(http://www.Bidhit.com). BidHit.com is now publicly traded (OTC BB: BHIT), and
has set forth a marketing campaign and expansion plan to become one of the
market share leaders in the online auction industry. Mr. Black has stayed on as
President and CEO, and is overseeing the operations and further growth of the
company.
Mr. Black has over 10 years experience in the high tech field, including over
two years in Internet retail auction sales with IAO. In addition, his career has
included extensive working knowledge of computer systems, hardware, software and
consumer electronics. He is a Certified Purchasing Manager (CPM) and has held a
membership with the National Association of Purchasing Management (NAPM).
JEFF MENDENHALL
<PAGE>
Jeffrey Mendenhall has an extensive career in the Information Technology field,
starting with US West Corporation. As an Information Technology Learning Systems
Coordinator at US West, he supported a 25 employee team of Software Training
Brokers. In 1995, Mr. Mendenhall continued his career at Microsoft's global
headquarters in Redmond, Washington. Starting in Microsoft's Internet Technology
Group as a Network Engineer, Mr. Mendenhall advanced to a lead position in
Microsoft's worldwide data center. He was responsible for training and leading a
team of System Engineers, while supporting, testing, consulting and documenting
Microsoft's Intranet software and database client/server hardware standards.
Subsequently, Mr. Mendenhall consulted for two years as an industry certified
Computer Systems Engineer in Microsoft's Personal Business Systems Training
group. He was solely responsible for six state-of-the-art-training labs, while
testing and auditing of all Microsoft's MOC Courseware before final release. Mr.
Mendenhall continued to consult to Microsoft on new technologies and train key
employees on the internal infrastructures and new business practices of the
company until joining BidHit.
Mr. Mendenhall joined BidHit.com in June of 1999 as Vice President and Director
of Vendor Relations. Bringing his vast knowledge and technical expertise, Mr.
Mendenhall is responsible for strengthening the strategic alliances BidHit.com
has in place, as well as forging new partnerships and creating new revenue
models to help propel BidHit.com into an industry leader.
ALAN GERSON
Alan Gerson has had a long and prestigious career in broadcast television,
interactive cable, Internet advertising and direct marketing, and Internet
services. Trained as a communications attorney, he spent almost nineteen years
at NCB, where he was responsible for Program Standards and Broadcast
Administration, as well as for interactive programming and promotions He left
NBC to become the Executive Vice-President of the Home Shopping network, Inc.,
and President of its Diversified Marketing and Media Services Division. After
leaving HSN in 1994, he formed Gerson and Associates, a private consulting
business specializing in transactional television and interactive marketing. In
1995 he joined Ticketmaster, Inc., one of his consulting clients, as Senior Vice
President, Television and Business Development. In 1996, Gerson made the move to
the Internet business full time as President, Marketing Products Group for
SOFTBANK Interactive Marketing, where he designed the SOFTBANK Advertising
Network and Internet-based direct marketing programs. After leaving SOFTBANK in
1997, Gerson served as President and CEO of WorldSite Networks, Inc., an
Internet business solutions provider in Beverly Hills, California, under an
executive consulting arrangement.
Gerson is currently the president of, and a principal in, Interactive Marketing,
Inc. IMI is a leading interactive promotional marketing and consulting firm
serving interactive and broadband media clients. IMI offers strategic and
tactical consulting services in a variety of areas including marketing and
promotions, electronic commerce, Internet advertising and Internet and broadband
business development strategies.
Gerson is a recognized expert in electronic commerce and interactive marketing
and has been a frequent speaker and panellist at Industry seminars and
convocations. He has consulted for some
<PAGE>
of the world's leading media, interactive marketing and electronic commerce
companies, including Apple Computer, Pro Seiben Television GmbH, Transactional
Media Inc., Ticketmaster Corp., EDS, the Times Mirror Company, Home Order
Television (Germany's first 24 hour a day Home Shopping Network), and Redgate
Communications, Inc.
Interactive Marketing Inc., Mr. Gerson's company, provides strategic marketing
consulting services to BidHit under a long-term agreement.
SIGNIFICANT EMPLOYEES
The Issuer has four full time employees. Mr. Tim Black is President, Mr. Jeff
Mendenhall is Vice President, Ms. Sheryl Dwyer is the Accounting Coordinator and
Ms. Jennica Watson is the Administrative Assistant for the Issuer. All of Mr.
Black, Mr. Mendenhall, Ms. Dwyer and Ms. Watson work for the Issuer on a full
time basis
There are no family relationships among the directors, executive officers or
persons nominated or chosen by the Issuer to become directors or executive
officers.
No bankruptcy petition has been filed by or against any business of which Tim
Black, Jeff Mendenhall and Alan Gerson were general partners or executive
officers either at the time of the bankruptcy or within two years prior to that
time.
Tim Black, Jeff Mendenhall and Alan Gerson have never been convicted in a
criminal proceeding and are not subject to a pending criminal proceeding.
Tim Black, Jeff Mendenhall and Alan Gerson have never been subject to any order,
judgement, or decree, not subsequently reversed, suspended or vacated, of any
court of competent jurisdiction, permanently or temporarily enjoining, barring,
suspending or otherwise limiting their involvement in any type of business,
securities or banking activities.
Tim Black, Jeff Mendenhall and Alan Gerson have never been found by a court of
competent jurisdiction (in a civil action), the Commission or the Commodity
Futures Trading Commission to have violated a federal or state securities or
commodities law.
ITEM 9 - EXECUTIVE COMPENSATION
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation Awards
<S> <C> <C> <C> <C> <C> <C>
(a) (b) (c) (d) (e) (f) (g)
Name and Year Salary ($) Bonus ($) Other Annual Restricted SARs
Position Compensation Stock Awards
- ----------------------- ------------ --------------- ------------- ------------------ ---------------- --------------
Timothy Black 1999 $48,000 $0 $0 (1) $0
President/CEO
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Jeff Mendenhall 1999 $48,000 $5,000 $0 (2) $0
Vice-President
</TABLE>
(1) Mr. Tim Black and Mr. Jeff Mendenhall are parties to Employment and
Services Agreements dated May 20, 1999 (the "Agreements"). The terms of
the Agreements with respect to stock options are identical for Messrs.
Black and Mendenhall. Messrs. Black and Mendenhall each have options to
acquire 277,875 common shares of the Company at $4.00 per share with
25% of the total options vesting at the end of the third, sixth, ninth
and twelfth months of the first year of the Agreements.
(2) Under Mr. Jeff Mendenhall's employment and services agreement dated May
20, 1999, Mr. Mendenhall will receive 400,000 common shares of the
Issuer from treasury at the rate of 100,000 shares at the end of the
third, sixth, ninth and twelfth months of the term of the employment
and services agreement as additional consideration for Mr. Mendenhall's
services.
ITEM 10 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(A) SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS (5% AND OVER)
<TABLE>
<CAPTION>
(1) (2) (3) (4)
TITLE OF CLASS NAME AND ADDRESS OF BENEFICIAL AMOUNT AND PERCENT
OWNER NATURE OF OF CLASS
BENEFICIAL
OWNER
- --------------- ------------------------------- ---------------- --------
<S> <C> <C> <C>
Common Shares Tim Black 926,250 8.58%
Suite 204
18702 North Creek Parkway
Bothell, Washington 98011
</TABLE>
(B) SECURITY OWNERSHIP OF MANAGEMENT
<TABLE>
<CAPTION>
(1) (2) (3) (4)
TITLE OF CLASS NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNER OF CLASS
- ---------------- ---------------- ---------------- --------
<S> <C> <C> <C>
Common Shares Tim Black 926,250 8.58%
Suite 204
18702 North Creek Parkway
Bothell, Washington 98011
Common Shares Jeff Mendenhall Nil N/A
12221 - 100th Avenue NE
Kirkland WA 98034
Common Shares Alan Gerson Nil N/A
Suite 360
225 South Sepulveda Blvd.
Manhattan Beach CA 90266
</TABLE>
There are no arrangements in place which may result in a change of control of
the Issuer.
Mr. Tim Black and Mr. Jeff Mendenhall are parties to Employment and Services
Agreements dated May 20, 1999 (the "Agreements"). The terms of the Agreements
with respect to stock
<PAGE>
options are identical for Messrs. Black and Mendenhall. Messrs. Black and
Mendenhall each have options to acquire 277,875 common shares of the Company at
$4.00 per share with 25% of the total options vesting at the end of the third,
sixth, ninth and twelfth months of the first year of the Agreements.
ITEM 11 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Under share exchange agreement dated May 19, 1999, Mr. Tim Black, President and
Director of the Issuer sold 100% of his interest in BidHit.com, Inc.
(Washington) to the Issuer in exchange for 926,250 common shares of the Issuer
and $300,000 in cash. The Issuer's wholly owned subsidiary, BidHit.com, Inc.
(Washington), owns 100% of the assets and liabilities of Interactive Auction
Online, a sole proprietorship, which developed the online auction business
currently operated by the Issuer.
Mr. Tim Black is the promoter of the Issuer. During the past five years, Mr. Tim
Black has received only the common shares of the Issuer and cash described in
the paragraph above above.
ITEM 12 - FINANCIAL STATEMENTS
The Issuer's financial statements are attached as Schedule "A".
ITEM 13 - EXHIBITS
Index of Exhibits
1. Share Exchange Agreement dated May 19, 1999 among BidHit.com, Inc.
(Washington), Bidhit.com, Inc. (Nevada) and Tim Black.
2. Articles of Incorporation.
3. Bylaws.
4. Employment contracts for Tim Black and Jeff Mendenhall.
5.1 Consent of the Issuer's auditors, Davidson & Company.
5.2 Consent of the Issuer's auditors, Barry L. Freidman, P.C.
6. Subsidiaries of the registrant.
7. Financial data schedule.
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized.
<PAGE>
Dated October 15, 1999
REGISTRANT
BidHit.com, Inc.
Per: /s/ Tim Black, Director and President
-----------------------------------------
<PAGE>
THIRD MILLENNIUM SOFTWARE CORP.
(Formerly Painted Desert Farms, Inc.)
(A Development Stage Company)
FINANCIAL STATEMENTS
December 31, 1998
December 31, 1997
December 31, 1996
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
PAGE #
------
<S> <C>
INDEPENDENT AUDITORS REPORT 1
ASSETS 2
LIABILITIES AND STOCKHOLDERS' EQUITY 3
STATEMENT OF OPERATIONS 4
STATEMENT OF STOCKHOLDERS' EQUITY 5
STATEMENT OF CASH FLOWS 6
NOTES TO FINANCIAL STATEMENTS 7-13
</TABLE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors September 30, 1999
Third Millennium Software Corp.
Las Vegas, Nevada
I have audited the accompanying Balance Sheets of Third Millennium
Software Corp. (Formerly Painted Desert Farms, Inc.), (A Development Stage
Company), as of December 31, 1998, December 31, 1997, and December 31, 1996, and
the related statements of operations, stockholders' equity and cash flows for
the three years ended December 31, 1998, December 31, 1997, and December 31,
1996. These financial statements are the responsibility of the Company's
management. My responsibility is to express an opinion on these financial
statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Third Millennium
Software Corp. (Formerly Painted Desert Farms, Inc.), (A Development Stage
Company), as of December 31, 1998, December 31, 1997, and December 31, 1996, and
the results of its operations and cash flows for the three years ended December
31, 1998, December 31, 1997, and December 31, 1996, in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note #5 to the
financial statements, the Company has suffered recurring losses from operations
and has no established source of revenue. This raises substantial doubt about
its ability to continue as a going concern. Management's plan in regard to these
matters is described in Note #5. These financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Barry L. Friedman
Certified Public Accountant
1582 Tulita Drive
Las Vegas, NV 89123
(702) 361-8414
<PAGE>
THIRD MILLENNIUM SOFTWARE CORP.
(Formerly Painted Desert Farms, Inc.)
(A Development Stage Company)
BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
December December December
31, 1998 31, 1997 31, 1996
-------- -------- --------
<S> <C> <C> <C>
CURRENT ASSETS
Cash $ 0 $ 0 $ 3,924
Note Receivable (Note #4) 70,000 70,000 0
---------------- --------------- ----------------
TOTAL CURRENT ASSETS $ 70,000 $ 70,000 $ 3,924
---------------- --------------- ----------------
FIXED ASSETS
Horse Trailer $ 0 $ 0 $ 2,675
Horses 0 0 70,500
Less: Depreciation 0 0 -8,226
---------------- --------------- ----------------
TOTAL FIXED ASSETS $ 0 $ 0 $ 64,949
---------------- --------------- ----------------
OTHER ASSETS
Prepaid Expenses $ 0 $ 0 $ 19
---------------- --------------- ----------------
TOTAL OTHER ASSETS $ 0 $ 0 $ 19
---------------- --------------- ----------------
TOTAL ASSETS $ 70,000 $ 70,000 $ 68,892
---------------- --------------- ----------------
</TABLE>
The accompanying footnotes are an integral part of these
financial statements
- 2 -
<PAGE>
THIRD MILLENNIUM SOFTWARE CORP.
(Formerly Painted Desert Farms, Inc.)
(A Development Stage Company)
BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
December December December
31, 1998 31, 1997 31, 1996
-------- -------- --------
<S> <C> <C> <C>
CURRENT LIABILITIES
Officer's Advances (Note #6) $ 0 $ 0 $ 35,378
Notes Payable (Note #5) 70,000 70,000 352
---------------- --------------- ----------------
TOTAL CURRENT LIABILITIES $ 70,000 $ 70,000 $ 35,730
---------------- --------------- ----------------
STOCKHOLDERS' EQUITY (Note #1)
Common stock Par value $0.001
Authorized 50,000,000 shares
Issued and outstanding at
December 31, 1996 -
203,750 shares $ 204
December 31, 1997 -
2,500,000 shares $ 2,500
December 31, 1998 -
2,500,000 shares $ 2,500
Additional Paid-In Capital 25,500 25,500 69,296
Defecit Accumulated During
The Development Stage -28,000 -28,000 -36,338
TOTAL STOCKHOLDERS' EQUITY $ 0 $ 0 $ 33,162
---------------- --------------- ----------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 70,000 $ 70,000 $ 68,892
---------------- --------------- ----------------
</TABLE>
The accompanying footnotes are an integral part of these
financial statements
- 3 -
<PAGE>
THIRD MILLENNIUM SOFTWARE CORP.
(Formerly Painted Desert Farms, Inc.)
(A Development Stage Company)
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Year Year Year Oct. 13,1995
Ended Ended Ended (Inception)
Dec. 31, Dec. 31, Dec. 31, to Dec. 31,
1998 1997 1996 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
INCOME
Revenue $ 0 $ 0 $ 2,708 $ 2,708
Debt Forgiveness
(Note #7) 0 8,632 0 8,632
--------------- ---------------- --------------- ----------------
TOTAL INCOME $ 0 $ 8,632 $ 2,708 $ 11,340
--------------- ---------------- --------------- ----------------
EXPENSES
Operating Expenses $ 0 $ 294 $ 35,706 $ 39,340
--------------- ---------------- --------------- ----------------
TOTAL EXPENSES $ 0 $ 294 $ 35,706 $ 39,340
--------------- ---------------- --------------- ----------------
NET PROFIT(+)/LOSS(-) $ 0 $ +8,338 $ -32,998 $ -28,000
--------------- ---------------- --------------- ----------------
Net Profit/Loss(-)
per weighted share
(Note #1) $ NIL $ +.0031 $ -.0132 $ -.0120
--------------- ---------------- --------------- ----------------
Weighted average
Number of common
shares outstanding 2,500,000 2,500,000 2,500,000 2,500,000
--------------- ---------------- --------------- ----------------
</TABLE>
The accompanying footnotes are an integral part of these
financial statements
- 4 -
<PAGE>
THIRD MILLENNIUM SOFTWARE CORP.
(Formerly Painted Desert Farms, Inc.)
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Additional Accumu-
Common Stock paid-in lated
Shares Amount Capital Deficit
------ ------ ------- -------
<S> <C> <C> <C> <C>
Balance,
December 31, 1995 85,000 $ 85 $ 33,915 $ -3,340
February 2, 1996
February 16, 1996
February 21, 1996
Issued For Cash 18,750 $ +19 $ +7,481
August 27, 1996
Issued For Cash 100,000 +100 +27,900
Net income year ended
December 31, 1996 -32,998
Balance,
December 31, 1996 203,750 $ 204 $ 69,296 $ -36,338
January 17, 1997
Stock Rescission
Note #1 -85,000 -85 -33,915
Note #1 -18,750 -19 -7,481
January 17, 1997
Forward Stock Split
25:1 2,400,000 +2,400 -2,400
Net income year ended
December 31, 1997 +8,338
Balance,
December 31, 1997 2,500,000 $ 2,500 $ 25,500 $ -28,000
Net loss year ended
December 31, 1998 0
----------- ----------- ----------- -----------
Balance,
December 31, 1998 2,500,000 $ 2,500 $ 25,500 $ -28,000
----------- ----------- ----------- -----------
</TABLE>
The accompanying footnotes are an integral part of these
financial statements
- 5 -
<PAGE>
THIRD MILLENNIUM SOFTWARE CORP.
(Formerly Painted Desert Farms, Inc.)
(A Development Stage Company)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Year Year Year Oct.13,1995
Ended Ended Ended (Inception)
Dec. 31, Dec. 31, Dec. 31, to Dec. 31,
1998 1997 1996 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net Loss(-), Gain(+) $ 0 $ +8,338 $ -32,998 $ -28,000
Items Not Affecting
Cash
Depreciation 0 0 +7,619 0
Stock Rescission 0 0 0 -41,500
Changes in assets and
Liabilities
Officers Advances 0 0 +32,645 0
Prepaid Expenses 0 0 -19 0
Notes Receivable 0 -70,000 0 -70,000
Notes Payable 0 +57,738 +352 +70,000
--------------- ---------------- --------------- ----------------
NET CASH USED IN
OPERATING ACTIVITIES $ 0 $ -3,924 $ +7,599 $ -69,500
CASH FLOWS FROM
INVESTING ACTIVITIES 0 0 0 0
Purchase of Assets 0 0 -39,175 0
CASH FLOWS FROM
FINANCING ACTIVITIES
Issuance of Common
Stock for Cash 0 0 +35,500 +69,500
--------------- ---------------- --------------- ----------------
Net Increase (decrease)
in Cash $ 0 $ -3,924 $ +3,924 $ 0
Cash,
Beginning of period 0 +3,924 0 0
--------------- ---------------- --------------- ----------------
Cash, End of period $ 0 $ 0 $ 3,924 $ 0
--------------- ---------------- --------------- ----------------
</TABLE>
The accompanying footnotes are an integral part of these
financial statements
- 6 -
<PAGE>
THIRD MILLENNIUM SOFTWARE CORP.
(Formerly Painted Desert Farms, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1998, December 31, 1997, and December 31, 1996
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized October 13, 1995, under the laws of the State
of Nevada as Painted Desert Farms, Inc. The Company currently has no
operations and in accordance with Statement of Financial Accounting
Standards #7, "Accounting and Reporting by Development State
Enterprises", is considered a development stage company.
On October 13, 1995, the company issued 85,000 of its common shares for
the contribution of four horses appraised at $34,000 or $0.016 per
share.
In February 1996, the Company received $7,500 in cash and issued 18,750
of its common shares at a value of $0.016 per share.
On August 17, 1996, the Company issued 100,000 of its common shares for
cash of $28,000.
On January 17, 1997, at a special meeting of shareholders, the
shareholders approved rescinding the 2,125,000 shares that had been
issued on October 13, 1995, for the contribution of four horses to the
Company (see above). It also rescinded the issuance of 18,750 shares
issued in the February 1996 transaction of $7,500 (see above).
On January 17, 1997, the Company approved a 25:1 forward stock split,
thus increasing the total number of common shares outstanding from
100,000 shares to 2,500,000 shares.
As of January 17, 1997, officers have loaned the Company $31,748 with
zero interest (Note #6). On January 17, 1997, this debt was cancelled
for $23,116 causing income for forgiveness of debt of $8,632 to the
Company.
On January 5, 1998, the Company changed its name to Third Millennium
Software Corp.
- 7 -
<PAGE>
THIRD MILLENNIUM SOFTWARE CORP.
(Formerly Painted Desert Farms, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1998, December 31, 1997, and December 31, 1996
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amount of assets and liabilities, disclosure of contingent
assets and liabilities at the date of the financial
statements and the reported amount of revenues and expenses
during the period. Actual results could differ from these
estimates.
Cash and Cash Equivalents
The Company considers all investments with a maturity or
three months or less to be cash equivalents.
Loss Per Share
Earnings per share are provided in accordance with Statement
of Financial Accounting Standards No 128, "Earnings Per
Share". Due to the Company's simple capital structure, with
only common stock outstanding, only basic loss per share must
be presented. Basic loss per share is computed by dividing
losses available to common stockholders by the weighted
average number of common shares outstanding during the
period.
- 8 -
<PAGE>
THIRD MILLENNIUM SOFTWARE CORP.
(Formerly Painted Desert Farms, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998, December 31, 1997, and December 31, 1996
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income Taxes
Income taxes are provided in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for
Income Taxes". A deferred tax asset or liability is recorded
for all temporary differences between financial and tax
reporting and net operating loss carry-forwards. Deferred tax
expenses (benefit) results from the net change during the
year of deferred tax assets and liabilities.
Deferred tax assets are reduced by a valuation allowance
when, in the opinion of management, it is more likely than
not that some portion or all of the deferred tax assets will
not be realized. Deferred tax assets and liabilities are
adjusted for the effects of changes in tax laws and rates on
the date of enactment.
Accounting for Derivative Instruments and Hedging Activities
In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133 ("SFAS
133"), "Accounting for Derivative Instruments and for Hedging
Activities" which establishes accounting and reporting
standards for derivative instruments and for hedging
activities. SFAS 133 is effective for all fiscal quarters of
fiscal years beginning after June 15, 1999. The Company does
not anticipate that the adoption of the statement will have a
significant impact on its financial statements.
- 9 -
<PAGE>
THIRD MILLENNIUM SOFTWARE CORP.
(Formerly Painted Desert Farms, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998, December 31, 1997, and December 31, 1996
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Reporting on costs of start-up activities
In April 1998, the American Institute of Certified Public
Accountants issued Statement of Position 98-5 ("SOP 98-5"),
"Reporting on the Costs of Start-Up Activities" which
provides guidance on the financial reporting of start-up
costs and organization costs. It requires costs of start-up
activities and organization costs to be expensed as incurred.
SOP 98-5 is effective for fiscal years beginning after
December 15, 1998 with initial adoption reported as the
cumulative effect of a change in accounting principle. The
Company does not anticipate that the adoption of the
statement will have a significant impact on its financial
statements.
Stock-based compensation
Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation" encourages but does
not require, companies to record compensation cost for
stock-based employee compensation plans at fair value. The
Company has chosen to account for stock-based compensation
using Accounting Principles Board Opinion No. 25, "Accounting
for Stock Issued to Employees". Accordingly, compensation
costs for stock options is measured as the excess, if any, of
the quoted market price of the Company's stock at the date of
the grant over the amount an employee to required to pay for
the stock.
Comprehensive Income
In 1998, the Company adopted Statement of Financial Accounting
Standards No. 130 ("SFAS 130"), "Reporting Comprehensive
Income". This statement establishes rules for the reporting of
comprehensive income and its components. The adoption of SFAS
130 had no impact on total shareholders' equity as of December
31, 1998.
- 10 -
<PAGE>
THIRD MILLENNIUM SOFTWARE CORP.
(Formerly Painted Desert Farms, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998, December 31, 1997, and December 31, 1996
NOTE 3 - GOING CONCERN
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern,
which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. However, the
Company has no current source of revenue. Without realization of
additional capital, it would be unlikely for the Company to
continue as a going concern. It is management's plan to seek
additional capital through a merger with an existing operating
company.
NOTE 4 - NOTE RECEIVABLE
On March 17, 1997, the Company received $70,000 from Ardrail
Services, Ltd., as part of a loan agreement between the Company
and Peat Moss International, Ltd. ("PMI"). These funds were used
as a bridge financing for PMI prior to completion of a merger.
The merger was subsequently not completed and the funds remained
outstanding as a loan receivable.
NOTE 5 - NOTE PAYABLE
The Company is liable for $70,000 to Ardrail Services, Ltd. For
the funds advanced for the above-mentioned loan receivable (Note
#11). On March 30, 1996, the Company purchased a horse trailer
for $2,675.00. The Company made a cash down payment of
$1,337.50. It financed the balance of $1,337.50 plus interest of
$73.46 payable over 12 months at $117.58 per month. At December
31, 1996, there were three payments remaining.
NOTE 6 - OFFICER'S ADVANCES
While the Company is seeking additional capital through a merger
with and existing operating company, an officer of the Company
has advanced funds on behalf of the Company to pay for any costs
incurred by it. These funds are interest free. As of December
31, 1996, officers had advanced the company $35,378.00.
- 11 -
<PAGE>
THIRD MILLENNIUM SOFTWARE CORP.
(Formerly Painted Desert Farms, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998, December 31, 1997, and December 31, 1996
NOTE 7 - INCOME TAXES
The Company's total deferred tax asset is as follows:
<TABLE>
<CAPTION>
Dec. 31, 1998 Dec. 31, 1997
------------- -------------
<C> <C>
<S>
Net operating loss $ 28,000 $ 28,000
Carry forward
Valuation Allowance $ -28,000 $ -28,000
</TABLE>
The Company has a net operating loss carry forward of
approximately $28,000 which expires between the years 2015 and
2017. The Company provided a full valuation allowance on the
deferred tax asset because of the uncertainty regarding
reliability.
NOTE 8 - SUPPLIMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Cash paid during the year for interest - - -
Cash paid during the year for income taxes - - -
</TABLE>
There were no non-cash transactions for the years ended December 31, 1998, 1997
and 1996.
NOTE 9 - FINANCIAL INSTRUMENTS
The Company's financial instruments consist of note receivable and note
payable. Unless otherwise noted, it is management's opinion that the
Company is not exposed to significant interest, currency or credit
risks arising from these financial instruments. The fair value of these
financial instruments approximate their carrying values, unless
otherwise noted.
- 12 -
<PAGE>
THIRD MILLENNIUM SOFTWARE CORP.
(Formerly Painted Desert Farms, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998, December 31, 1997, and December 31, 1996
NOTE 10 - UNCERTAINTY DUE TO THE YEAR 2000 ISSUE
The Year 2000 Issue arises because many computerized systems use two
digits rather than four to identify a year. Date-sensitive systems may
incorrectly recognize the year 2000 as some other date, resulting in
errors. The effects of the Year 2000 Issue may be experienced before,
on, or after January 1, 2000 and, if not addressed, the impact on
operations and financial reporting may range from minor errors to
significant systems failure which could affect an entity's ability to
conduct normal business operations. It is not possible to be certain
that all aspects of the Year 2000 Issue affecting the Company,
including those related to the efforts of customers, suppliers, or
other third parties, will be fully resolved.
NOTE 11 - SUBSEQUENT EVENTS
The following events occurred subsequent to December 31, 1998:
a) On April 6, 1999, the Company issued 2,750,000 common shares
pursuant to a private placement for proceeds of $55,000 cash.
b) The Company repaid $25,500 to Ardrail Services, Ltd. in
settlement of the outstanding note payable (Note #5). Repayment
of the balance of the note payable was forgiven creating a gain
to the Company of $44,500.
- 13 -
<PAGE>
To Whom It May Concern: September 30, 1999
The firm of Barry L. Friedman, P.C., Certified Public Accountant
consents to the inclusion of their report of September 30, 1999, on the
Financial Statements of Third Millennium Software Corp., as of December 31,
1998, in any filings that are necessary now or in the near future with the U.S.
Securities and Exchange Commission.
Very truly yours,
/s/ Barry L. Friedman
Certified Public Accountant
<PAGE>
BIDHIT.COM INC.
(FORMERLY THIRD MILLENIUM SOFTWARE CORP.)
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED FINANCIAL STATEMENTS
(PREPARED BY MANAGEMENT)
SIX MONTH PERIOD ENDED JUNE 30, 1999
<PAGE>
BIDHIT.COM INC.
(formerly Third Millenium Software Corp.)
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
(Prepared by Management)
<TABLE>
<CAPTION>
(Audited)
June 30, December 31,
1999 1998
---- ----
<S> <C> <C>
ASSETS
CURRENT
Cash and cash equivalents $ 3,297,517 $ -
Accounts receivable 2,317 -
Prepaid expenses 16,919 -
-------------- -------------
Total current assets 3,316,753 -
NOTE RECEIVABLE (Note 3) - 70,000
CAPITAL ASSETS (Note 5) 16,438 -
DOMAIN NAME RIGHTS (Note 6) 552,078 -
SOFTWARE DEVELOPMENT COSTS (Note 7) 16,023 -
-------------- -------------
TOTAL ASSETS $ 3,901,292 $ 70,000
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT
Due to shareholder $ 259,608 $ -
Note payable (Note 4) - 70,000
-------------- --------------
Total current liabilities 259,608 70,000
-------------- --------------
STOCKHOLDERS' EQUITY (Note 8)
Common stock
Authorized
50,000,000 common shares with a par value of $0.001
Issued and outstanding
June 30, 1999 - 9,262,500 common shares
December 31, 1998 - 125,000 common shares 9,263 125
Additional paid-in capital 973,737 27,875
Share subscription funds received, net 2,900,000 -
Deficit accumulated during the development stage (158,316) -
Deficit (83,000) (28,000)
-------------- --------------
TOTAL STOCKHOLDERS' EQUITY 3,641,684 -
-------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,901,292 $ 70,000
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
<PAGE>
BIDHIT.COM INC.
(formerly Third Millenium Software Corp.)
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Prepared by Management)
<TABLE>
<CAPTION>
From Start of
Development
Stage
on May 1, Three Month Three Month Six Month Six Month
1999 to Period Ended Period Ended Period Ended Period Ended
June 30, June 30, June 30, June 30, June 30,
1999 1999 1998 1999 1998
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
REVENUE
Sales commission $ 3,204 $ 3,204 $ -- $ 3,204 $ --
--------- ----------- -------- ---------- --------
EXPENSES
Amortization 6,272 6,272 -- 6,272 --
Bad debt (Note 3) -- -- -- 70,000 --
Consulting fees 34,847 34,847 -- 34,847 --
Depreciation 46 46 -- 46 --
Directors fees -- -- -- 5,000 --
Legal fees -- -- -- 15,000 --
Listing and filing fees 13,919 13,919 -- 13,919 --
Marketing materials 84,849 84,849 -- 84,849 --
Office and administration 2,850 2,850 -- 2,850 --
Professional fees 8,103 8,103 -- 17,603 --
Salaries and bonuses 9,110 9,110 -- 9,110 --
Website/internet fees 3,608 3,608 -- 3,608 --
--------- ----------- -------- ---------- --------
163,604 163,604 -- 263,104 --
--------- ----------- -------- ---------- --------
OTHER ITEM
Interest income 2,084 2,084 -- 2,084 --
--------- ----------- -------- ---------- --------
LOSS BEFORE EXTRAORDINARY ITEM (158,316) (158,316) -- (257,816) --
EXTRAORDINARY ITEM
Gain on forgiveness of debt
(net of tax) (Note 4) -- -- -- 44,500 --
--------- ----------- -------- ---------- --------
LOSS FOR THE PERIOD $(158,316) $ (158,316) $ -- $ (213,316) $ --
BASIC AND DILUTED LOSS PER SHARE
BEFORE EXTRAORDINARY ITEM $ (0.04) -- $ (0.13) $ --
EXTRAORDINARY ITEM -- 0.02 --
----------- -------- ---------- --------
BASIC AND DILUTED LOSS PER SHARE $ (0.04) $ -- $ (0.11) $ --
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 3,776,099 125,000 $1,960,635 $125,000
</TABLE>
The accompanying notes are an integral part of
these consolidated financial statements.
<PAGE>
BIDHIT.COM INC.
(formerly Third Millenium Software Corp.)
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Prepared by Management)
<TABLE>
<CAPTION>
Deficit
Accumu-
lated
Share During the Total
Common Stock Additional Subscrip- Develop- Stock-
-------------------------- Paid-in tions ment holders'
Shares Amount Capital Received Stage Deficit Equity
------------- ------------ ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
REVERSE STOCK SPLIT 20:1
EFFECTIVE MAY 17, 1999
(Note 8)
BALANCE, DECEMBER 31,
1996 254,688 $ 254 $ 69,246 $ - $ - $ (36,338) $ 33,162
January 17, 1997
Stock Recision
Note 1 (106,250) (106) (33,894) - - - (34,000)
Note 1 (23,438) (23) (7,477) - - - (7,500)
Income for the year - - - - - 8,338 8,338
------------ ----------- ------------ ------------ ------------ ------------ ------------
BALANCE, DECEMBER 31,
1997 AND 1998 125,000 125 27,875 - - (28,000) -
Common stock issued
for cash 9,137,500 9,138 945,862 - - - 955,000
Share subscriptions
received - - - 2,900,000 - - 2,900,000
Loss for the period - - - - (158,316) (55,000) (213,316)
------------ ----------- ------------ ------------ ------------ ------------ ------------
BALANCE, JUNE 30, 1999 9,262,500 $ 9,263 $ 973,737 $ 2,900,000 $ (158,316) $ (83,000) $ 3,641,684
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
<PAGE>
BIDHIT.COM INC.
(formerly Third Millenium Software Corp.)
(A Development Stage Company)
NOTES TO THE CONSOLIDATED STATEMENTS OF CASH FLOWS
(Prepared by Management)
<TABLE>
<CAPTION>
From Start of
Development
Stage
on May 1, Six Month Six Month
1999 to Period Ended Period Ended
June 30, June 30, June 30,
1999 1999 1998
---- ---- ----
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the period $ (158,316) $ (213,316) $ -
Items not involving cash outlay:
Bad debt - 70,000 -
Gain on settlement of debt - (44,500) -
Depreciation and amortization 6,318 6,318 -
Changes in non-cash working capital items:
Decrease in accounts receivable 957 957 -
Increase in prepaid expenses (16,919) (16,919) -
Decrease in loan payable (4,599) (4,599) -
Decrease in accounts payable and accrued liabilities (110) (110) -
--------------- --------------- --------------
Net cash used in operating activities (172,669) (202,169) -
--------------- --------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash acquired on acquisition of subsidiary 1,655 1,655 -
Domain name rights (300,000) (300,000) -
Capital assets (15,704) (15,704) -
Software development costs (16,023) (16,023) -
--------------- --------------- --------------
Net cash used in investing activities (330,072) (330,072) -
--------------- --------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES
Due to shareholder 258 258 -
Issuance of common stock 900,000 955,000 -
Subscription funds received, net 2,900,000 2,900,000 -
Note payable - (25,500) -
--------------- --------------- --------------
Net cash provided by financing activities 3,800,258 3,829,758 -
--------------- --------------- --------------
INCREASE IN CASH POSITION FOR THE PERIOD 3,297,517 3,297,517 -
CASH AND EQUIVALENTS, BEGINNING OF PERIOD - - -
--------------- --------------- --------------
CASH AND EQUIVALENTS, END OF PERIOD $ 3,297,517 $ 3,297,517 $ -
</TABLE>
SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS (Note 12)
The accompanying notes are an integral part of these
consolidated financial statements.
<PAGE>
BIDHIT.COM INC.
(formerly Third Millenium Software Corp.)
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Prepared by Management)
JUNE 30, 1999
1. HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized October 13, 1995, under the laws of the
State of Nevada, as Painted Desert Farms, Inc. The Company currently
has no operations and, in accordance with Statement of Financial
Accounting Standards No. 7, "Accounting and Reporting by Development
Stage Enterprises", is considered a development stage company.
On October 13, 1995, the company issued 106,250 of its common shares
for the contribution of four horses appraised at $34,000 or $0.32 per
share.
In February 1996, the Company received $7,500 in cash and issued
23,438 of its common shares at a value of $0.32 per share.
On August 17, 1996, the Company issued 125,000 of its common shares
for cash of $28,000.
On January 17, 1997, at a special meeting of shareholders, the
shareholders approved rescinding the 106,250 shares that had been
issued on October 13, 1995, for the contribution of four horses to the
Company (see above). It also rescinded the issuance of 23,438 shares
issued for the February 1996 transaction of $7,500 (see above).
On January 17, 1997, the Company approved a 25:1 forward stock split,
thus increasing the total number of common shares outstanding from
100,000 shares to 2,500,000 shares.
As of January 17, 1997, stockholders had loaned the Company $31,748
with zero interest. On January 17, 1997, this debt was settled for
$23,116 causing a gain on forgiveness of debt of $8,632 to the
Company.
On January 5, 1998, the Company changed its name to Third Millennium
Software Corp.
On May 17, 1999, the Company approved a 20:1 reverse stock split, thus
decreasing the total number of shares from 5,250,000 issued and
outstanding to 262,500 issued and outstanding common shares.
On May 7, 1999, the Company changed its name to Bidhit.com Inc.
On May 19, 1999, the Company acquired all of the issued and
outstanding shares of Bidhit.com Inc. (Washington), a Washington
corporation.
On May 25, 1999, the Company issued 9,000,000 shares of common stock
under Rule 504 of Regulation D of the Securities Act of 1933 for
proceeds of $900,000.
In the opinion of management, the accompanying consolidated financial
statements contain all adjustments necessary (consisting only of
normal recurring accruals) to present fairly the financial information
contained therein. These statements do not include all disclosures
required by generally accepted accounting principles and should be
read in conjunction with the audited financial statements of the
Company for the year ended December 31, 1998. The results of
operations for the period ended June 30, 1999 are not necessarily
indicative of the results to be expected for the year ending December
31, 1999.
2. ACCOUNTING POLICIES AND PROCEDURES
PRINCIPLES OF CONSOLIDATION
These consolidated financial statements include Bidhit.com Inc.
(Nevada) and its wholly-owned subsidiary, Bidhit.com Inc. (Washington)
("BHcW"), which was incorporated in the state of Washington on May 19,
1999. All significant inter-company balances and transactions have
been eliminated upon consolidation.
<PAGE>
BIDHIT.COM INC.
(formerly Third Millenium Software Corp.)
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Prepared by Management)
JUNE 30, 1999
2. ACCOUNTING POLICIES AND PROCEDURES (cont'd.....)
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amount of assets and
liabilities, disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amount of revenues
and expenses during the year. Actual results could differ from these
estimates.
LOSS PER SHARE
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings Per
Share" ("SFAS 128"). Under SFAS 128, basic and diluted earnings per
share are to be presented. Basic earnings per share is computed by
dividing income available to common shareholders by the weighted
average number of common shares outstanding in the period. Diluted
earnings per share takes into consideration common shares outstanding
(computed under basic earnings per share) and potentially dilutive
common shares.
CAPITAL ASSETS AND DEPRECIATION
Capital assets will be recorded at cost less accumulated depreciation.
The cost of capital assets is depreciated over the estimated useful
lives, ranging from four to ten years, of the related assets.
INCOME TAXES
Income taxes are provided in accordance with Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes". A deferred
tax asset or liability is recorded for all temporary differences
between financial and tax reporting and net operating loss
carryforwards. Deferred tax expenses (benefit) result from the net
change during the year of deferred tax assets and liabilities.
Deferred tax assets are reduced by a valuation allowance when, in the
opinion of management, it is more likely than not that some portion or
all of the deferred tax assets will not be realized. Deferred tax
assets and liabilities are adjusted for the effects of changes in tax
laws and rates on the date of enactment.
ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133 ("SFAS 133"), "Accounting for
Derivative Instruments and Hedging Activities" which establishes
accounting and reporting standards for derivative instruments and for
hedging activities. SFAS 133 is effective for all fiscal quarters of
fiscal years beginning after June 15, 1999. The Company does not
anticipate that the adoption of the statement will have a significant
impact on its financial statements.
REPORTING ON COSTS OF START-UP ACTIVITIES
In April 1998, the American Institute of Certified Public Accountant's
issued Statement of Position 98-5 ("SOP 98-5"), "Reporting on the Costs
of Start-Up Activities" which provides guidance on the financial
reporting of start-up costs and organization costs. It requires costs
of start-up activities and organization costs to be expensed as
incurred. SOP 98-5 is effective for fiscal years beginning after
December 15, 1998 with initial adoption reported as the cumulative
effect of a change in accounting principle.
BIDHIT.COM INC.
<PAGE>
(formerly Third Millenium Software Corp.)
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Prepared by Management)
JUNE 30, 1999
2. ACCOUNTING POLICIES AND PROCEDURES (cont'd.....)
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include highly liquid investments with
original maturities of three months or less.
SOFTWARE DEVELOPMENT
The Company has adopted Statement of Position 98-1 ("SOP 98-1")
"Accounting for the Costs of Computer Software Developed or Obtained
for Internal Use", as its accounting policy for internally developed
computer software costs. Under SOP 98-1, computer software costs
incurred in the preliminary development stage are expensed as incurred.
Computer software costs incurred during the application development
stage are capitalized and amortized over the software's estimated
useful life of three years.
REVENUE RECOGNITION
The Company will be recognizing sales commission revenues as items are
sold on its internet site and as collection of these amounts is
reasonably assured.
ADVERTISING COSTS
The Company recognizes advertising expenses in accordance with
Statement of Position 98-7, "Reporting on Advertising Costs". As such,
the Company expenses the cost of communicating advertising in the
period in which the advertising space or airtime is used.
DOMAIN RIGHTS
The cost of domain name rights are amortized over 10 years from the
date of commencement of operations.
STOCK-BASED COMPENSATION
Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation," encourages, but does not require, companies
to record compensation cost for stock-based employee compensation plans
at fair value. The Company has chosen to account for stock-based
compensation using Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees." Accordingly compensation
cost for stock options is measured as the excess, if any, of the quoted
market price of the Company's stock at the date of the grant over the
amount an employee is required to pay for the stock.
COMPREHENSIVE INCOME
In 1998, the Company adopted Statement of Financial Accounting
Standards No. 130 ("SFAS 130"), "Reporting Comprehensive Income". This
statement establishes rules for the reporting of comprehensive income
and its components. The adoption of SFAS 130 had no impact on total
stockholders' equity as of June 30, 1999.
3. NOTE RECEIVABLE
On March 17, 1997, the Company received $70,000 from Ardrail Services
Ltd., as part of a loan agreement between the Company and Peat Moss
International Ltd. ("PMI"). These funds were advanced to PMI as bridge
financing prior to completion of a merger. The merger was subsequently
not completed and the funds remained outstanding as a loan receivable.
Continued communications and correspondence with PMI indicate that the
loan will not be repaid. The Company has made every effort to collect
the loan and deemed the loan to be uncollectible. During the period,
loss has been recorded for the full amount of the loan receivable.
<PAGE>
BIDHIT.COM INC.
(formerly Third Millenium Software Corp.)
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Prepared by Management)
JUNE 30, 1999
4. NOTE PAYABLE
The Company is liable for $70,000 payable to Ardrail Services Ltd., for
the funds advanced for the loan receivable mentioned in Note 3. During
the period, the Company repaid $25,500 to Ardrail Services Ltd. as
settlement of the outstanding payable. Repayment of the balance of the
loan payable has been forgiven creating a gain on forgiveness of debt.
5. CAPITAL ASSETS
<TABLE>
<CAPTION>
Net Book Value
----------------------------------
(Audited)
Accumulated June 30, December 31,
Cost Depreciation 1999 1998
----------------- ------------- ---------------- --------------
<S> <C> <C> <C> <C>
Office furniture and equipment $ 16,484 $ 46 $ 16,438 $ -
</TABLE>
6. DOMAIN NAME RIGHTS
<TABLE>
<CAPTION>
(Audited)
Accumulated June 30, December 31,
Domain name Cost Amortization 1999 1998
----------- ----------------- ------------- ---------------- --------------
<S> <C> <C> <C> <C>
Bidhit.com $ 558,350 $ (6,272) $ 552,078 $ -
================= ============= =============== =============
</TABLE>
The cost of the domain name rights will be amortized over 10 years from
the date of commencement of operations.
7. SOFTWARE DEVELOPMENT COSTS
Software development costs of $16,023 (December 31, 1998 - $Nil)
represent amounts incurred to develop the Company's portal website.
8. STOCKHOLDERS' EQUITY
REVERSE STOCK SPLIT
On May 17, 1999, the Company implemented a 20:1 reverse stock split
(Note 1). The consolidated statements of changes in stockholders'
equity has been restated to give retroactive recognition of the reverse
stock split for all periods presented by reclassifying from common
stock to additional paid-in capital the par value of consolidated
shares arising from the split. In addition, all references to number of
shares and per share amounts of common stock have been restated to
reflect the stock split.
<PAGE>
BIDHIT.COM INC.
(formerly Third Millenium Software Corp.)
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Prepared by Management)
JUNE 30, 1999
8. STOCKHOLDERS' EQUITY (cont'd.....)
COMMON STOCK
In connection with a private placement offering made in April 1999, the
Company issued 137,500 shares of common stock under Rule 504 Regulation
D of the Securities Act of 1933 for proceeds of $55,000.
In connection with a private offering made in May 1999, the Company
issued 9,000,000 shares of common stock under Rule 504 of Regulation D
of the Securities Act of 1933 for proceeds of $900,000.
9. BUSINESS COMBINATION
Pursuant to a share exchange agreement, the Company purchased all of
the issued and outstanding shares of BHcW in consideration for $300,000
in cash and 926,250 common shares of the Company at a deemed value of
$259,350. As at June 30, 1999, the above shares have not been issued.
The total purchase price of $559,350 has been allocated as follows:
<TABLE>
<CAPTION>
<S> <C>
Cash $ 1,655
Accounts receivable 3,274
Capital assets 780
Domain name 558,350
Accounts payable and accrued liabilities (110)
Loan payable, shareholder (4,599)
-------------
$ 559,350
=============
</TABLE>
The 926,250 common shares to be issued pursuant to the share exchange
agreement were deemed to have a value of $0.28 per share, based on the
closing market value quotation of the shares on the date of
acquisition.
10. PRO-FORMA FINANCIAL INFORMATION
A pro-forma combined balance sheet has not been provided, as these
statements already reflect the business combination described above.
Had the acquisition occurred at the beginning of the periods ended
December 31, 1998 and June 30, 1999, the loss for the periods would be
$55,835 and $234,962, respectively.
The $55,835 pro-forma loss for the year ended December 31, 1998,
consists entirely of the amortization of the domain name for the year,
obtained upon acquisition of BHcW. The $234,962 pro-forma loss for the
period ended June 30, 1999 includes a loss of $118,127 for the Company,
a loss of $95,189 for BHcW, and $21,646 for the amortization of the
domain name for the six month period.
<PAGE>
BIDHIT.COM INC.
(formerly Third Millenium Software Corp.)
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Prepared by Management)
JUNE 30, 1999
11. INCOME TAXES
The Company's total deferred tax asset is as follows:
<TABLE>
<CAPTION>
(Audited)
June 30, December 31,
1999 1998
---- ----
<S> <C> <C>
Net operating loss carryforward $ 36,197 $ 4,200
Valuation allowance (36,197) (4,200)
------------- -------------
$ - $ -
</TABLE>
The Company has a net operating loss carryforward of approximately
$241,316 which expires between the years 2002 and 2006. The Company
provided a full valuation allowance on the deferred tax asset because
of the uncertainty regarding realizability.
12. SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS
<TABLE>
<CAPTION>
June 30, June 30,
1999 1998
---- ----
<S> <C> <C>
Cash paid for income taxes $ - $ -
Cash paid for interest - -
</TABLE>
The following non-cash transactions occurred during the six month
period ended June 30, 1999:
The Company acquired BHcW for a purchase price of $559,350, of which
$300,000 was paid in cash and $259,350 was included in due to
shareholder at the end of the period.
There were no non-cash transactions for the six month periods ended
June 30, 1999 and 1998.
13. FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash, accounts
receivable, due to shareholder and subscription funds received. Unless
otherwise noted, it is management's opinion that the Company is not
exposed to significant interest, currency or credit risks arising from
these financial instruments. The fair value of these financial
instruments approximate their carrying values, unless otherwise noted.
14. UNCERTAINTY DUE TO THE YEAR 2000 ISSUE
The Year 2000 Issue arises because many computerized systems use two
digits rather than four to identify a year. Date-sensitive systems may
incorrectly recognize the year 2000 as some other date, resulting in
errors. The effects of the Year 2000 Issue may be experienced before,
on, or after January 1, 2000 and, if not addressed, the impact on
operations and financial reporting may range from minor errors to
significant systems failure which could affect an entity's ability to
conduct normal business operations. It is not possible to be certain
that all aspects of the Year 2000 Issue affecting the Company,
including those related to the efforts of customers, suppliers, or
other third parties, will be fully resolved.
BIDHIT.COM INC.
(formerly Third Millenium Software Corp.)
<PAGE>
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Prepared by Management)
JUNE 30, 1999
15. SUBSEQUENT EVENTS
The following transactions occurred subsequent to June 30, 1999:
a) The Company issued 600,000 shares of common stock for proceeds of
$2,900,000, which is net of share issuance costs of $100,000.
b) The Company issued 926,250 shares of common stock, pursuant to
the share exchange agreement described in Note 9 above.
<PAGE>
BIDHIT.COM INC. (WASHINGTON)
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
JUNE 30, 1999
<PAGE>
- --------------------------------------------------------------------------------
DAVIDSON & COMPANY Chartered Accountants A Partnership of Incorporated
Professionals
- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of
BidHit.Com Inc. (Washington)
(A Development Stage Company)
We have audited the balance sheet of BidHit.Com Inc. (Washington) as at June 30,
1999 and the statements of operations, changes in stockholders' equity and cash
flows for the period from incorporation on May 19, 1999 to June 30, 1999. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of BidHit.Com Inc. (Washington) as
at June 30, 1999 and the results of its operations, changes in its stockholders'
equity and its cash flows for the period from incorporation on May 19, 1999 to
June 30, 1999 in conformity with generally accepted accounting principles.
"DAVIDSON & COMPANY"
Vancouver, Canada Chartered Accountants
September 16, 1999
A Member of Accounting Group International
Suite 1200, Stock Exchange Tower, 609 Granville Street, P.O. Box 10372,
Pacific Centre, Vancouver, BC, Canada, V7Y 1G6
Telephone (604) 687-0947 Fax (604) 687-6172
<PAGE>
BIDHIT.COM INC. (WASHINGTON)
BALANCE SHEET
AS AT JUNE 30, 1999
<TABLE>
ASSETS
<S> <C>
CURRENT
Cash $ 3,296,832
Accounts receivable 2,317
Prepaid expenses 16,919
--------------
3,316,068
CAPITAL ASSETS (NOTE 3) 16,438
SOFTWARE DEVELOPMENT COSTS (NOTE 4) 16,023
--------------
TOTAL ASSETS $ 3,348,529
============================================================================================ ================ ================
LIABILITIES AND STOCKHOLDERS' EQUITY
DUE TO PARENT $ 3,442,460
LOAN PAYABLE, STOCKHOLDER 258
--------------
3,442,718
--------------
STOCKHOLDERS' EQUITY
Common stock, no par value
Authorized
100 common shares
Issued and outstanding
100 common shares 1,000
Deficit accumulated during the development stage (95,189)
--------------
(94,189)
--------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,348,529
============================================================================================ ================ ================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
BIDHIT.COM INC. (WASHINGTON)
STATEMENT OF OPERATIONS
PERIOD FROM INCORPORATION ON MAY 19, 1999 TO JUNE 30, 1999
<TABLE>
<S> <C>
REVENUE
Sales commissions $ 3,204
---------------
EXPENSES
Advertising and marketing 64,849
Depreciation 46
Office supplies 1,752
Professional fees 18,100
Rent 2,804
Telephone 208
Wages and salaries 9,110
Website, internet fees 3,608
---------------
100,477
---------------
LOSS BEFORE OTHER ITEM (97,273)
---------------
OTHER ITEM
Interest income 2,084
---------------
LOSS FOR THE PERIOD $ (95,189)
============================================================================================ ================ ================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
BIDHIT.COM INC. (WASHINGTON)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
PERIOD FROM INCORPORATION ON MAY 19, 1999 TO JUNE 30, 1999
<TABLE>
<CAPTION>
Deficit
Accumulated
During
the Total
Common Stock Development Stockholders'
---------------- ---------------
Shares Amount Stage Equity
------------------------------------- ---------------- --------------- ---------------- ----------------
------------------------------------- ---------------- --------------- ---------------- ----------------
<S> <C> <C> <C> <C>
BALANCE, MAY 19, 1999 - $ - $ - $ -
Shares issued for cash 100 1,000 - 1,000
Loss for the period - - (95,189) (95,189)
-------------- -------------- -------------- --------------
BALANCE, JUNE 30, 1999 100 $ 1,000 $ (95,189) $ (94,189)
===================================== ================ =============== ================ ================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
BIDHIT.COM INC. (WASHINGTON)
STATEMENT OF CASH FLOWS
PERIOD FROM INCORPORATION ON MAY 19, 1999 TO JUNE 30, 1999
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the period $ (95,189)
Item not affecting cash:
Depreciation 46
Changes in non-cash working capital items:
Increase in accounts receivable (2,317)
Increase in prepaid expenses (32,942)
Net cash used in operating activities (130,402)
---------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of capital assets (16,484)
---------------
Net cash used in investing activities (16,484)
---------------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock 1,000
Due to parent 3,442,460
Loan payable, stockholder 258
---------------
Net cash provided by financing activities 3,443,718
---------------
INCREASE IN CASH POSITION FOR THE PERIOD 3,296,832
CASH POSITION, BEGINNING OF PERIOD -
---------------
CASH POSITION, END OF PERIOD $ 3,296,832
============================================================================================ ================ ================
SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS
Cash paid for income taxes $ -
Cash paid for interest -
============================================================================================ ================ ================
</TABLE>
There were no non-cash transactions during the period.
The accompanying notes are an integral part of these financial statements.
<PAGE>
BIDHIT.COM INC. (WASHINGTON)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
1. HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized on May 19, 1999, under the laws of the State
of Washington. The Company issued 100 of its common shares at a total
deemed value of $1,000.
The Company is an internet service provider that has developed an
interactive online auction house business. Through the Company's
website located at www.BidHit.com, the Company operates a live internet
auction which retails computers and consumer electronics.
2. ACCOUNTING POLICIES AND PROCEDURES
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amount of assets and
liabilities, disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amount of revenues
and expenses during the period. Actual results could differ from these
estimates.
CASH AND CASH EQUIVALENTS
The Company considers all investments with a maturity of three months or
less to be cash equivalents.
INCOME TAXES
Income taxes are provided in accordance with Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes". A deferred
tax asset or liability is recorded for all temporary differences between
financial and tax reporting and net operating loss carryforwards.
Deferred tax expenses (benefit) results from the net change during the
year of deferred tax assets and liabilities.
Deferred tax assets are reduced by a valuation allowance when, in the
opinion of management, it is more likely than not that some portion or
all of the deferred tax assets will not be realized. Deferred tax assets
and liabilities are adjusted for the effects of changes in tax laws and
rates on the date of enactment.
ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133 ("SFAS 133"), "Accounting for
Derivative Instruments and Hedging Activities" which establishes
accounting and reporting standards for derivative instruments and for
hedging activities. SFAS 133 is effective for all fiscal quarters of
fiscal years beginning after June 15, 1999. The Company does not
anticipate that the adoption of the statement will have a significant
impact on its financial statements.
REPORTING ON COSTS OF START-UP ACTIVITIES
In April 1998, the American Institute of Certified Public Accountant's
issued Statement of Position 98-5 ("SOP 98-5"), "Reporting on the Costs
of Start-Up Activities" which provides guidance on the financial
reporting of start-up costs and organization costs. It requires costs of
start-up activities and organization costs to be expensed as incurred.
SOP 98-5 is effective for fiscal years beginning after December 15, 1998
with initial adoption reported as the cumulative effect of a change in
accounting principle.
<PAGE>
BIDHIT.COM INC. (WASHINGTON)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
2. SIGNIFICANT ACCOUNTING POLICIES (cont'd.....)
COMPREHENSIVE INCOME
The Company adopted Statement of Financial Accounting Standards No. 130
("SFAS 130"), "Reporting Comprehensive Income". This statement
establishes rules for the reporting of comprehensive income and its
components. The adoption of SFAS 130 had no impact on total
stockholders' equity as of June 30, 1999.
STOCK-BASED COMPENSATION
Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation," encourages, but does not require, companies
to record compensation cost for stock-based employee compensation plans
at fair value. The Company has chosen to account for stock-based
compensation using Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees." Accordingly compensation
cost for stock options is measured as the excess, if any, of the quoted
market price of the Company's stock at the date of the grant over the
amount an employee is required to pay for the stock.
SOFTWARE DEVELOPMENT
The Company has adopted Statement of Position 98-1 ("SOP 98-1"),
"Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use", as its accounting policy for internally developed
computer software costs. Under SOP 98-1, computer software costs
incurred in the preliminary development stage are expensed as incurred.
Computer software costs incurred during the application development
stage are capitalized and amortized over the software's estimated useful
life.
CAPITAL ASSETS
Capital assets will be recorded at cost less accumulated depreciation.
The cost of capital assets is depreciated over the estimated useful life
of four to ten years on a straight-line basis of the related assets.
REVENUE RECOGNITION
The Company will be recognizing sales commission revenues as items are
sold on its internet site.
ADVERTISING COSTS
The Company recognizes advertising expenses in accordance with Statement
of Position 98-7, "Reporting on Advertising Costs". As such, the Company
expenses the cost of communicating advertising in the period in which
the advertising space or airtime is used.
3. CAPITAL ASSETS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------- --------------- -------------- ---------------
Accumulated Net Book
Cost Depreciation Value
- ---------------------------------------------------------------------- --------------- -------------- ---------------
<S> <C> <C> <C>
Office furniture and equipment $ 16,484 $ 46 $ 16,438
====================================================================== =============== ============== ===============
</TABLE>
<PAGE>
BIDHIT.COM INC. (WASHINGTON)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
4. SOFTWARE DEVELOPMENT COSTS
Software development costs of $16,023 represent amounts incurred to
develop the Company's portal website.
5. INCOME TAXES
To date, the Company has $95,189 of operating losses available to
reduce future income taxes payable. Future tax benefits which may arise
as a result of these losses have not been recognized in these financial
statements. These losses expire in 2008.
6. FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash, accounts
receivable, due to parent and loan payable, stockholder. Unless
otherwise noted, it is management's opinion that the Company is not
exposed to significant interest, currency or credit risks arising from
these financial instruments. The fair value of these financial
instruments approximate their carrying values, unless otherwise noted.
7. UNCERTAINTY DUE TO THE YEAR 2000 ISSUE
The Year 2000 Issue arises because many computerized systems use two
digits rather than four to identify a year. Date-sensitive systems may
incorrectly recognize the year 2000 as some other date, resulting in
errors. The effects of the Year 2000 Issue may be experienced before,
on, or after January 1, 2000 and, if not addressed, the impact on
operations and financial reporting may range from minor errors to
significant systems failure which could affect an entity's ability to
conduct normal business operations. It is not possible to be certain
that all aspects of the Year 2000 Issue affecting the Company,
including those related to the efforts of customers, suppliers, or
other third parties, will be fully resolved.
EXHIBIT 1
SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT, dated May 19, 1999, is among BIDHIT.COM, INC., a
Washington corporation ("BidHit Washington"), BIDHIT.COM, INC., a Nevada
corporation ("BidHit Nevada"), and TIM BLACK ("Black") (collectively, the
"Parties").
WHEREAS:
A. BidHit Washington has acquired all right, title and interest to Interactive
Auction Online which was previously operated as a sole proprietorship by Black.
B. Black is the sole shareholder of BidHit Washington.
C. BidHit Nevada wishes to acquire all of the issued and outstanding common
shares of BidHit Washington in consideration for cash and shares of BidHit
Nevada.
THIS AGREEMENT WITNESSES THAT in consideration of the mutual premises, covenants
and agreements set forth in this Agreement, the Parties hereto covenant and
agree as follows:
ARTICLE ONE
SHARE EXCHANGE
1.1 SHARE EXCHANGE. Black shall exchange all of the issued and outstanding
common shares of BidHit Washington (the "BidHit Washington Shares") for $300,000
and 926,250 common shares of BidHit Nevada (the "BidHit Nevada Shares").
1.2 INSTRUMENTS OF CONVEYANCE AND TRANSFER. Upon closing, Black shall deliver a
share certificate for 100 shares registered in the name of BidHit Nevada
representing the BidHit Washington Shares. BidHit Nevada has advanced $300,000
to Black prior to execution of this Agreement and shall deliver a share
certificate representing the BidHit Nevada Shares.
ARTICLE TWO
REPRESENTATIONS AND WARRANTIES OF
BLACK AND BIDHIT WASHINGTON
2.1 Black and BidHit Washington represent and warrant to BidHit Nevada, with the
intent that BidHit Nevada will rely upon representations and warranties in
entering into this Agreement and completing the transaction contemplated that:
(a) BidHit Washington is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
Washington. It has all requisite corporate power, franchises,
licenses, permits, and authority to own its properties and
assets and to carry on its business as it has been and is
being conducted. BidHit Washington is duly qualified and in
good standing in each jurisdiction in which it conducts
business.
(b) OWNERSHIP OF COMPANY SHARES. BidHit Washington is authorized
to issue 100 common shares of which 100 common shares are
validly issued and outstanding
<PAGE>
as fully paid and non-assessable shares. Black is the
registered and beneficial owner of the BidHit Washington
Shares and owns the BidHit Washington Shares free and clear of
any liens, charges, pledges, encumbrances, restrictions on
transfer and adverse claims whatsoever.
(c) NO OPTION. No person, firm or corporation has any agreement or
option or any right capable of becoming an agreement or option
for the acquisition of any of the BidHit Washington Shares or,
to the knowledge of Black, for the purchase, subscription or
issuance of any of the unissued shares in the capital of
BidHit Washington.
(d) CAPACITY. Black has full right, power and authority to enter
into this Agreement on the terms and conditions contained and
to transfer and cause the transfer of full legal, registered
and beneficial title and ownership of the BidHit Washington
Shares to BidHit Nevada.
(e) NO RESTRICTIONS. There are no restrictions on the transfer,
sale or other disposition of the BidHit Washington Shares
contained in the charter documents of BidHit Washington or
under any agreement, and the BidHit Washington Shares may be
freely traded and transferred to BidHit Nevada under all
applicable laws and regulations.
(f) AUTHORIZATION AND ENFORCEABILITY. The execution and delivery
of this Agreement, and the transfer of the BidHit Washington
Shares contemplated , have been duly and validly authorized by
all necessary corporate action on the part of BidHit
Washington and this Agreement constitutes a legal, valid and
binding obligation of Black and BidHit Washington and is
enforceable against them in accordance with its terms.
(g) NO COMPANY DEBT TO RELATED PARTIES. BidHit Washington is not,
and on Closing will not be, indebted to Black, any officer or
director of BidHit Washington, nor to any corporation or other
business entity in which Black holds a direct or indirect
interest.
(h) NO RELATED PARTY DEBT TO BIDHIT WASHINGTON. Black is not
indebted to or under financial obligation to BidHit Washington
on any account whatsoever.
(i) NO MATERIAL CONTRACTS WITH BLACK. With the exception of his
employment contract, Black is not a party to any material
contract with BidHit Washington, whether directly or
indirectly or through any corporation owned or controlled by
Black.
(j) NO CHARGE ON ASSETS. Black has no claim to any of the assets
of BidHit Washington.
2.2 BidHit Nevada represents and warrants to BidHit Washington and Black, with
the intent that BidHit Washington and Black will rely upon representations and
warranties in entering into this Agreement and completing the transaction
contemplated that:
<PAGE>
(a) BidHit Nevada is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
Nevada. It has all requisite corporate power, franchises,
licenses, permits, and authority to own its properties and
assets and to carry on its business as it has been and is
being conducted.
(b) BidHit Nevada is an "Accredited Investor" as defined in
Regulation D of the United States Securities Act of 1933 (the
"Act").
(c) BidHit Nevada is acquiring the BidHit Washington Shares solely
for BidHit Nevada's own account as principal, for investment
purposes only and not with a view to the resale or
distribution, in whole or in part, and no other person or
entity has a direct or indirect beneficial interest in the
BidHit Washington Shares.
(d) BidHit Nevada will not sell or otherwise transfer the BidHit
Washington Shares without registration under the Act or an
exemption therefrom and fully understands that BidHit Nevada
must bear the economic risk of BidHit Nevada's purchase for an
indefinite period of time because, among other reasons, the
Shares have not been registered under the Act or under the
securities laws of any state and, therefore, cannot be resold,
pledged, assigned or otherwise disposed of unless they are
registered under the Act and under the applicable securities
laws of such states or unless an exemption from that
registration is available.
(e) At Closing as defined in Section 4.1 below, Black shall
transfer title in and to the BidHit Washington Shares to
BidHit Nevada free and clear of all liens, security interests,
pledges, encumbrances, charges, restrictions, demands and
claims, of any kind, whether direct or indirect or contingent,
other than any legends required by securities laws and
regulations.
ARTICLE THREE
CONDITIONS PRECEDENT
CONDITIONS PRECEDENT OF BLACK AND BIDHIT WASHINGTON
3.1 Black and BidHit Washington's obligations to carry out the transactions
contemplated hereby is subject to the fulfilment of each of the following
conditions precedent on or before the Closing:
(a) all documents or copies of documents required to be executed
and delivered to Black and BidHit Washington hereunder will
have been so executed and delivered;
(b) all of the terms, covenants and conditions of this Agreement
to be complied with or performed by BidHit Nevada at or prior
to the Closing will have been complied with or performed; and
<PAGE>
(c) the representations and warranties of BidHit Nevada set forth
in section 2.2 will be true and correct at the Closing with
the same effect as if made as of the Closing.
WAIVER BY BIDHIT WASHINGTON AND BLACK
3.2 The conditions precedent set out in section 3.1 are inserted for the
exclusive benefit of Black and BidHit Washington and any condition may be waived
in whole or in part by Black and BidHit Washington at or prior to the Closing by
delivering to BidHit Nevada a written waiver to that effect signed by Black and
BidHit Washington. If Black and BidHit Washington waive compliance with any
condition, Black and BidHit Washington may not allege any breach of that
condition so waived.
CONDITIONS PRECEDENT OF BIDHIT NEVADA
3.3 The obligation of BidHit Nevada to carry out the transactions contemplated
hereby is subject to the fulfilment of each of the following conditions
precedent on or before the Closing:
(a) all funds, documents or copies of documents required to be
executed and delivered to BidHit Nevada hereunder have been
executed and delivered;
(b) all of the terms, covenants and conditions of this Agreement
to be complied with or performed by Black and BidHit
Washington by the Closing have been complied with or
performed; and
(c) the representations and warranties of Black and BidHit
Washington set forth in section 2.1 will be true and correct
at the Closing with the same effect as if made as of the
Closing.
WAIVER BY BIDHIT NEVADA
3.4 The conditions precedent set out in section 3.3 are inserted for the
exclusive benefit of BidHit Nevada and any condition may be waived in whole or
in part by BidHit Nevada before the Closing by delivering to Black and BidHit
Washington a written waiver to that effect signed by BidHit Nevada. If BidHit
Nevada waives compliance with any condition, BidHit Nevada may not allege any
breach of that condition so waived.
NATURE OF CONDITIONS PRECEDENT
3.5 The conditions precedent set forth in this Article 3 are conditions of
completion of the transactions contemplated by this Agreement and are not
conditions precedent to the existence of a binding agreement. Each party
acknowledges receipt of the sum of $1.00 and other good and valuable
consideration as separate and distinct consideration for agreeing to the
conditions precedent in favour of the other party or parties set forth in this
Article 3.
ARTICLE FOUR
CLOSING AND DELIVERY OF DOCUMENTS
<PAGE>
4.1 The exchange of BidHit Washington Shares for BidHit Nevada Shares and the
other transactions contemplated by this Agreement will be closed on the 10th
business day following the date on which all conditions precedent in this
Agreement have been satisfied or waived by the Parties (the "Closing"). The
Closing will take place at 10:00 a.m. at the offices of Jeffs & Company being
Suite 420, 1090 West Pender Street, Vancouver, B.C.
DOCUMENTS TO BE DELIVERED BY BLACK AND BIDHIT WASHINGTON
4.2 By the Closing, Black and BidHit Washington will deliver or cause to be
delivered to BidHit Nevada:
(a) the records book for BidHit Washington containing all original
share certificates representing previous issuances of shares
of BidHit Washington duly endorsed for transfer to BidHit
Nevada as required, together with a duly executed share
certificate representing the BidHit Washington Shares issued
to BidHit Nevada and recorded in the share register of BidHit
Washington;
(b) certified copies of resolutions of the shareholders and
directors of BidHit Washington as are required to be passed to
authorize the execution, delivery and implementation of this
Agreement and the appointment of Mr. Tim Black as President,
Secretary, Treasurer and the sole director of BidHit
Washington;
(c) all other documents as BidHit Nevada may reasonably require to
give effect to the terms and intention of this Agreement.
DOCUMENTS TO BE DELIVERED BY BIDHIT NEVADA
4.3 By the Closing, BidHit Nevada shall deliver or cause to be delivered to
BidHit Washington and Black:
(a) a certified resolution of the directors of BidHit Nevada
approving the transactions contemplated by this Agreement;
(b) a share certificate of BidHit Nevada registered in the name of
Tim Black for 926,250 common shares of BidHit Nevada bearing a
legend restricting their trading under Rule 144 of the Act;
(c) all other documents as BidHit Washington or Black may
reasonably require to give effect to the terms and intention
of this Agreement.
DELIVERY OF DOCUMENTS IN ESCROW
4.4 Upon execution of this Agreement, BidHit Nevada, Black and BidHit Washington
shall use their best efforts to deliver the closing documents set out in
subparagraphs 4.2 and 4.3 to BidHit Nevada's solicitor in escrow. All closing
documents delivered to BidHit Nevada's solicitors in escrow will be held until
all conditions precedent set out in Article 3 of this Agreement have been
satisfied or waived by Black, BidHit Nevada and BidHit Washington as
<PAGE>
applicable. Upon satisfaction of all conditions precedent, BidHit Nevada's
solicitors shall be entitled to release the closing documents to BidHit Nevada,
BidHit Washington and Black.
ARTICLE FIVE
GENERAL PROVISIONS
5.1 ENTIRE AGREEMENT. This Agreement sets forth the entire agreement and
understanding of the Parties with respect to the transactions contemplated, and
supersedes all prior agreements, arrangements and understandings related to the
subject matter. No understanding, promise, inducement, statement of intention,
representation, warranty, covenant or condition, written or oral, express or
implied, whether by statute or otherwise, has been made by any party hereto
which is not embodied in this Agreement or the written statements, certificates,
or other documents delivered pursuant hereto or in connection with the
transactions contemplated hereby, and no party hereto shall be bound by or
liable for any alleged understanding, promise, inducement, statement,
representation, warranty, covenant or condition not so set forth.
5.2 NOTICES. Any notice, request, instruction, or other document required by
the terms of this Agreement, or deemed by any of the Parties be desirable, to be
given to any other Party hereto must be in writing and delivered personally by
facsimile to the following addresses:
If to BidHit Washington or Black: BidHit.com, Inc. (Washington)
Suite 204
18702 North Creek Parkway
Bothell, Washington 98011
Attention: Mr. Tim Black
Fax: (425)424-3661
If to BidHit Nevada: BidHit.com, Inc. (Nevada)
Suite 2500
1177 West Hastings Street
Vancouver, B.C.
V6E 2K3
Attention: Mr. Jason John
Fax: (604)687-0853
With copies to: Jeffs & Company
Law Corporation
Suite 420
1090 West Pender Street
Vancouver, B.C.
V6E 2N7
Attention: Mr. Gerald R. Tuskey
Fax: (604)664-0671
<PAGE>
The persons and addresses set forth above may be changed from time to time by a
notice sent as previously referred to. If notice is given by facsimile, personal
delivery, or overnight delivery in accordance with the provisions of this
Section, the notice is conclusively deemed given at the time of delivery.
5.3 WAIVER AND AMENDMENT. Any term, provision, covenant, representation,
warranty of condition of this Agreement may be waived, but only by a written
instrument signed by the party entitled to the benefits. The failure or delay of
any party at any time to require performance of any provision or to exercise its
rights with respect to any provision in no manner operates as a waiver of or
affects the party's right at a later time to enforce the performance. No waiver
by any party of any condition, or of the breach of any term, provision,
covenant, representation or warranty contained in this Agreement, in any one or
more instances, is deemed to be a further or continuing waiver of any condition
or breach or waiver of any other condition or of the breach of any other term,
provision, covenant, representation or warranty. No modification or amendment of
this Agreement is valid and binding unless it is in writing and signed by the
Parties.
5.4 CHOICE OF LAW. This Agreement and the rights of the Parties are governed by
the laws of the State of Washington including all matters of construction,
validity, performance, and enforcement and without giving effect to the
principles of conflict of laws.
5.5 JURISDICTION. The parties submit to the jurisdiction of the courts of the
State of Washington for the resolution of all legal disputes arising under the
terms of this Agreement.
5.6 COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement may be executed in one or
more counterparts, each of which is deemed an original, but all of which
together constitute one instrument. Facsimile signatures of this Agreement are
deemed a valid and binding execution of this Agreement.
5.7 ATTORNEYS' FEES. Except as otherwise provided herein, if a dispute should
arise between the parties including, but not limited to arbitration, the
prevailing party shall be reimbursed by the non-prevailing party for all
reasonable expenses incurred in resolving such dispute, including reasonable
attorneys' fees exclusive of such amount of attorneys' fees as shall be a
premium for result or for risk of loss under a contingency fee arrangement.
5.8 TAXES. Any income taxes required to be paid in connection with the payments
due hereunder, shall be borne by the party required to make such payment. Any
withholding taxes in the nature of a tax on income shall be deducted from
payments due, and the party required to withhold such tax shall furnish to the
party receiving such payment all documentation necessary to prove the proper
amount to withhold of such taxes and to prove payment to the tax authority of
such required withholding.
5.9 SHAREHOLDER AND DIRECTOR APPROVAL. All of the provisions of this Agreement,
including the Closing, are expressly contingent upon the approval of the
shareholders and directors of both BidHit Nevada and BidHit Washington. These
approvals must be evidenced by an executed certificate of the respective
corporate secretaries. If any required approvals are not received, this
Agreement automatically and immediately terminates and all Parties shall
<PAGE>
return or cause to be returned any documents or items of value received in
connection with this Agreement. Further, the Parties will keep the terms and
subject of this Agreement confidential.
IN WITNESS WHEREOF, the Parties have executed this Agreement, as of the
date first written above.
BIDHIT NEVADA BIDHIT WASHINGTON
BIDHIT.COM, INC., BIDHIT.COM, INC.,
A Nevada corporation A Washington corporation
/s/ Jason John, President /s/ Tim Black, President
- ------------------------- ------------------------
/s/ Tim Black
- -------------------------
EXHIBIT 2
FILED
IN THE OFFICE OF THE CERTIFICATE OF AMENDMENT
SECRETARY OF STATE OF THE
STATE OF NEVADA TO THE ARTICLES OF INCORPORATION OF
MAY 07, 1999
NO. C17836-95 THIRD MILLENIUM SOFTWARE CORP.
---------
DEAN HELLER
DEAN HELLER, SECRETARY OF STATE
The undersigned certify that, pursuant to the provisions of the Nevada
Revised Statutes, the stockholders of THIRD MILLENIUM SOFTWARE CORP., a Nevada
corporation, adopted the following resolutions to amend its articles of
incorporation May 6, 1999:
1. All of the directors consented in writing to the following resolution dated
May 6, 1999:
"RESOLVED that the secretary of the Corporation is directed to obtain from
the stockholders owning at least a majority of the voting power of the
outstanding stock of the Corporation their written consent to the amendment
of article one of the articles of incorporation to change the name of the
corporation from THIRD MILLENIUM SOFTWARE CORP. to BIDHIT.COM, INC."
2. A majority of the stockholders holding 52% of the common shares outstanding
of Third Millenium Software Corp. consented in writing to the following
resolution dated May 6, 1999:
RESOLVED that the Corporation's articles of incorporation be amended as
follows:
"1. The name of the corporation is
BIDHIT.COM, INC.
Dated this 6th day of May, 1999.
THIRD MILLENIUM SOFTWARE CORP.
/s/ Jason John
- -----------------------------------
Jason John, President and Secretary
City of Vancouver, Province of British
Columbia, Canada
This instrument was acknowledged before
me on May 6th, 1999 by JASON JOHN, as
President as designated to sign this
certificate of THIRD MILLENIUM SOFTWARE
CORP.
/s/ Jeffrey G. Sheremeta
- ----------------------------------------
Notary Public
JEFFREY G. SHEREMETA
BARRISTER & SOLICITOR
SUITE 430, 1090 WEST PENDER STREET
VANCOUVER, B.C. V6E 2N7
TEL: (604) 664-0523
<PAGE>
FILED
IN THE OFFICE OF THE CERTIFICATE AMENDING ARTICLES OF IN
SECRETARY OF STATE OF THE
STATE OF NEVADA OF
JAN 05, 1998
NO. C17836-95 PAINTED DESERT FARMS, INC
-------------
DEAN HELLER A NEVADA CORPORATION
DEAN HELLER, SECRETARY OF STATE
The undersigned, being the President and the Secretary of PAINTED
DESERT FARMS, INC. a Nevada corporation, hereby certify that by majority vote of
the Stockholders at a Special Meeting of Stockhoolders held on Decemnber 15,
1997, it was agreed by unanimous vote that this CERTIFICATE AMENDING ARTICLES OF
INCORPORATION be filed.
The undersigned further certify that the original Articles of
Incorporation of PAINTED DESERT FARMS, INC. were filed with the Secretary of
State of Nevada on the 13th day of October 1995. The undersigned further certify
that ARTICLE ONE of the Articles of Incorporation filed on the 13th day of
October, herein is amended to read as follows:
"The name of the corporation is THIRD MILLENIUM SOFTWARE CORP"
The undersigned hereby certify that they have executed this Certificate
Amending the Article of Incorporation heretofore filed with the Secretary of
State of Nevada.
<TABLE>
<S> <C>
DATED this 19th day of December 1997
/s/ JIM ANDREWS
Sworn before me in the City of Kelowna, --------------------------------
Province of British Columbia, this 23 JIM ANDREWS, President
day of December 1997
/s/ ????????
- ------------------------------------------------------
??????? 102 ?????? Hwy. 97 N. Kelowna, B.C. --------------------------------
Notary Public and For The Province of British Columbia ROBERT REELEDER, Secretary
</TABLE>
PERMANENT COMMISSION
<PAGE>
FILED
IN THE OFFICE OF THE ARTICLE OF INCORPORATION
SECRETARY OF STATE OF THE
STATE OF NEVADA OF
OCT 13, 1995
NO. C17836-95 PAINTED DESERT FARMS, INC.
Know all men by these present;
That the undersigned, have this day voluntarily associated ourselves together
for the purpose of forming a corporation under and pursuant to the provisions of
Nevada Revised Statutes 78.010. to Nevada Revised Statutes 78.090 inclusive, as
amended, and certify that;
1. The name of this corporaton is:
Painted Desert Farms, Inc.
2. Offices for the transaction of any business of the Corporation, and where
meetings of the Board of Directors and of Stockholders may be held, may be
established and maintained in any part of the State of Nevada, or in any
other state, territory, or possession of the United States.
3. The nature of the business is to engage in any lawful activity.
4. The Capital Stock shall consist of 50,000,000 shares of common stock,
$0.001 par value.
5. The members of the governing board of the corporation shall be styled
directors, of which there shall be no less than 1. The Directors of this
corporation need not be stockholders. The first Board of Directors is:
Carrie Cooper Thurman, whose address is 7555 La Madre Way, Las Vegas, NV
89129.
6. This corporation shall have perpetual existence.
7. The name and address of each of the incorporators signing these Articles of
Incorporation are as follows: Carrie Cooper Thurman, whose address is 7555
La Madre Way, Las Vegas, NV 89129.
<PAGE>
8. This Corporation shall have a president, a secretary, a treasurer, and
resident agent, to be chosen by the Board of Directors, any person may hold
two or more offices.
9. The resident agent of this Corporation shall be Carrie Cooper Thurman, 7555
La Madre Way, Las Vegas, NV 89129.
10. The Capital Stock of the corporation, after the fixed consideration thereof
has been paid or performed, shall not be subject to assessment, and the
individual liable for the debts and liabilities of the Corporation, and the
Articles of Incorporation shall never be amended as the aforesaid
provisions.
11. No director or officer of the corporation shall be personally liable to the
corporation of any of its stockholders for damages for breach of fiduciary
duty as a director or officer involving any act or omission of any such
director or officer provided, however, that the foregoing provision shall
not eliminate or limit the liability of a director or officer for acts or
omissions which involve intentional misconduct, fraud or a knowing
violation of law, or the payment of dividends in violation of Section
78.300 of the Nevada Revised Statutes. Any repeal or modification of this
Article of the Stockholders of the Corporation shall be prospective only,
and shall not adversely affect any limitation on the personal liability of
a director of officer of the Corporation for acts or omissions prior to
such repeal or modification.
<PAGE>
I, undersigned, being the incorporator herein above named for the purpose of
forming a corporation pursuant to the general corporation law of the State of
Nevada, do make and file these Aricles of Incorporation, hereby declaring and
certifying that the facts within stated are true, and accordingly have hereunto
set my hand this 2 day of Oct, 1995.
/s/ Carrie Cooper Thurman
-------------------------
Carrie Cooper Thurman
7555 La Madre Way
Law Vegas, NV 89129
State of NEVADA )
)ss
County of CLARK )
On 10/2/95, personally appeared before me, a notary public, personally known to
me to be the person whose name is subscribed to the above instrument who
acknowledged that he/she executed the instrument.
NETTA GIRARD
Notary Public /s/ Netta Girard
[LOGO] State of Nevada -------------------------
Clark County Signature
My Appointment Expires Nov. 5, 1997
<PAGE>
FILED
IN THE OFFICE OF THE CERTIFICATE OF ACCEPTANCE OF APPOINTMENT
SECRETARY OF STATE OF THE
STATE OF NEVADA BY RESIDENT AGENT
OCT 13, 1995
NO. C17836-95
In the matter of Painted Desert Farms, Inc., I, Carrie Cooper Thurman, with
address at: 7555 La Madre Way, City of LAS VEGAS, County of CLARK, State of
NEVADA 89129, hereby accept appointment as Resident Agent of the above-entitled
corporation in accordance with NRS 78.090.
FURTHERMORE, that the principal office in this State is located at 7555 La Madre
Way, City of LAS VEGAS, County of CLARK, State of NEVADA 89129.
IN WITNESS WHEREOF, I have hereunto set my hand this 2 day of October, 1995.
/s/ Carrie Cooper Thurman
-------------------------
RESIDENT AGENT
NRS 78.090 Except any period of vacancy described in NRS 78.097, every
corporation shall have a resident agent, who may wither a natural person or a
corporation, resident or located in this state, in charge of its principal
office. The resident agent may be any bank or banking corporation, or other
corporation, located and doing business in this state...The certificate of
acceptance must be filed at the time of the initial filing of the corporate
papers.
<PAGE>
AMENDMENT TO THE
BY-LAWS
OF
PAINTED DESERT FARMS, INC.
A Special Meeting of the Shareholders was held on January 17, 1997, at which the
following Amendment was duly presented and passed by the shareholders, pursuant
Article VII, Section 1, Amendment of Bylaws.
ARTICLE IV
CAPITAL STOCK
Section 7 - A unanimous vote by the shareholders shall be required to reverse
split the stock of the corporation for the period beginning January 17, 1997,
and ending January 17, 1998. Furthermore, that preceding amendment shall only be
amended by a unanimous vote of shareholders and Board of Directors. This
supercedes the provisions provided in Article VII, Section 1, Amendment of
Bylaws.
/s/ William Ted Thurman
-----------------------
William "Ted" Thurman
Secretary
ATTEST:
/s/ William Ted Thurman
- -----------------------
William "Ted" Thurman
Director
/s/ Carrie Cooper Thurman
- -------------------------
Carrie Cooper Thurman
Director
BY-LAWS
OF
PAINTED DESERT FARMS INC.
ARTICLE I
MEETING OF STOCKHOLDERS
SECTION 1. The annual meeting of the stockholders of the Company shall be
held at its office in the City of Las Vegas, Clark County, Nevada, at 10:00
o'clock in the Morning on the thirteenth day of October in each year, if not a
legal holiday, and if a legal holiday, then on the next suceeding day not a
legal holiday, for the purpose of electing directors of the company to serve
during the ensuing year and for the transaction of such other business as may be
brought before the meeting.
At least five days' written notice specifying the time and place, when and
where, the annual meeting shall be convened, shall be mailed in a United States
Post Office addressed to each of the stockholders of record at the time of
issuing the notice at his or her, or its address last known, as the same appears
on the books of the company.
SECTION 2. Special meetings of the stockholders may be held at the office
of the company in the State of Nevada, or elsewhere, whenever called by the
President, or by the Board of Directors, or by vote of, or by an instrument in
writing signed by the holders of 10% of the issued and outstanding capital stock
of the company. At least ten days' written notice of such meeting, specifying
the day and hour and place, when and where such meeting shall be convened, and
objects for calling the same, shall be mailed in a United States Post Office,
addressed to each of the stockholders of record at the time of issuing the
notice, at his or her or its address last known, as the same appears on the
books of the company.
SECTION 3. If all the stockholders of the company shall waive notice of a
meeting, no notice of such meeting shall be required, and whenever all of the
stockholders shall meet in person or by proxy, such meeting shall be valid for
all purposes without call or notice, and at such meeting any corporate action
may be taken.
The written certificate of the officer or officers calling any meeting
setting forth the substance of the notice, and the time and place of the mailing
of the same to the several stockholders, and the respective addresses to which
the same were mailed, shall be prima facie evidence of the manner and fact of
the calling and giving such notice.
If the address of any stockholder does not appear upon the books of the
company, it will be sufficient to address any notice to such stockholder at the
principal office of the corporation.
SECTION 4. All business lawful to be transacted by the stockholders of the
company, may be transacted at any special meeting or at any adjournment thereof.
Only such business, however, shall be acted upon at special meeting of the
stockholders as shall have been referred to in the notice calling such meetings,
but at any stockholders' meeting at which all of the outstanding capital stock
of the company is represented, either in person or by proxy, any lawful business
may be transacted, and such meeting shall be valid for all purposes.
SECTION 5. At the stockholders' meetings the holders of fifty-one percent
(51%) in amount of the entire issued and outstanding capital stock of the
company, shall constitute a quorum for all purposes of such meetings.
-1-
<PAGE>
If the holders of the amount of stock necessary to constitute a quorum
shall fail to attend, in person or by proxy, at the time and place fixed by
these By-Laws for any annual meeting, or fixed by a notice as above provided for
a special meeting, a majority in interest of the stockholders present in person
or by proxy may adjourn from time to time without notice other than by
announcement at the meeting, until holders of the amount of stock requisite to
constitute a quorum shall attend. At any such adjourned meeting at which a
quorum shall be present, any business may be transacted which might have been
transacted as originally called.
SECTION 6. At each meeting of the stockholders every stockholder shall be
entitled to vote in person or by his duly authorized proxy appointed by
instrument in writing subscribed by such stockholder or by his duly authorized
attorney. Each stockholder shall have one vote for each share of stock standing
registered in his or her or its name on the books of the corporation, ten days
preceding the day of such meeting. The votes for directors, and upon demand by
any stockholder, the votes upon any question before the meeting, shall be viva
voce.
At each meeting of the stockholders, a full, true and complete list, in
alphabetical order, of all the stockholders entitled to vote at such meeting,
and indicating the number of shares held by each, certified by the Secretary of
the Company, shall be furnished, which list shall be prepared at least ten days
before such meeting, and shall be open to the inspection of the stockholders, or
their agents or proxies, at the place where such meeting is to be held, and for
ten days prior thereto. Only the persons in whose names shares of stock are
registered on the books of the company for ten days preceding the date of such
meeting, as evidenced by the list of stockholders, shall be entitled to vote at
such meeting. Proxies and powers of Attorney to vote must be filed with the
Secretary of the Company before an election or a meeting of the stockholders, or
they cannot be used at such election or meeting.
SECTION 7. At each meeting of the stockholders the polls shall be opened
and closed; the proxies and ballots issued, received, and be taken in charge of,
for the purpose of the meeting, and all questions touching the qualifications of
voters and the validity of proxies, and the acceptance or rejection of votes,
shall be decided by two inspectors. Such inspectors shall be appointed at the
meeting by the presiding officer of the meeting.
SECTION 8. At the stockholders' meetings, the regular order of business
shall be as follows:
1. Reading and approval of the Minutes of previous meeting or meetings;
2. Reports of the Board of Directors, the President, Treasurer and
Secretary of the Company in the order named;
3. Reports of Committee;
4. Election of Directors;
5. Unfinished Business;
6. New Business;
7. Adjournment.
-2-
<PAGE>
ARTICLE II
DIRECTORS AND THEIR MEETINGS
SECTION 1. The Board of Directors of the Company shall consist of no less
than one person who shall be chosen by the stockholders annually, at the anmnual
meeting of the Company, and who shall hold office for one year, and until their
successors are elected and qualify.
SECTION 2. When any vacancy occurs among the Directors by death,
resignation, disqualification or other cause, the stockholders, at any regular
or special meeting, or at any adjourned meeting thereof, or the remaining
Directors, by the affirmative vote of a majority thereof, shall elect a
successor to hold office for the unexpired portion of the term of the Director
whose place shall have become vacant and until his successor shall have been
elected and shall qualify.
SECTION 3. Meeting of the Directors may be held at the principal office of
the company in the state of Nevada, or elsewhere, at such place or places as the
Board of Directors may, from time to time, determine.
SECTION 4. Without notice or call, the Board of Directors shall hold its
first annual meeting for the year immediately after the annual meeting of the
stockholders or immediately after the election of Directors at such annual
meeting.
Regular meetings of the Board of Directors shall be held at the office of
the company in the City of Las Vegas, State of Nevada on 13th of October at
10:00 o'clock in the Morning. Notice of such regular meetings shall be mailed to
each Director by the Secretary at least three days previous to the day fixed for
such meetings, but no regular meeting shall be held void or invalid if such
notice is not given, provided the meeting is held at the time and place fixed by
these By-Laws for holding such regular meetings.
Special meetings of the Board of Directors may be held on the call of the
President or Secretary on at least three days notice by mail or telegraph.
Any meeting of the Board, no matter where held, at which all of the members
shall be present, even though without or of which notice shall have been waived
by all absentees, provided a quorum shall be present, shall be valid for all
purposes unless otherwise indicated in the notice calling the meeting or in the
waiver of notice.
Any and all business may be transacted by any meeting of the Board of
Directors, either regular or special.
SECTION 5. A majority of the Board of Directors in office shall constitute
a quorum for the transaction of business, but if at any meeting of the Board
there be less than a quorum present, a majority of those present may adjourn
from time to time, until a quorum shall be present, and no notice of such
adjournment shall be required. The Board of Directors may prescribe rules not in
conflict with these By-Laws for the conduct of its business; provided, however,
that in the fixing of salaries of the officers of the corporation, the unanimous
action of all of the Directors shall be required.
SECTION 6. A Director need not be a stockholder of the corporation.
SECTION 7. The Directors shall be allowed and paid all necessary expenses
incurred in attending any meeting of the Board, but shall not receive any
compensation for their services as Directors until such time as the company is
able to declare and pay dividends on its capital stock.
-3-
<PAGE>
SECTION 8. The Board of Directors shall make a report to the stockholders
at annual meetings of the stockholders of the condition of the company, and
shall, at request, furnish each of the stockholders with a true copy thereof.
The Board of Directors in its discretion may submit any contract or act for
approval or ratification at any annual meeting of the stockholders called for
the purpose of considering any such contract or act, which, it approved, or
ratified by the vote of the holders of a majority of the capital stock of the
company represented in person or by proxy at such meeting, provided that a
lawful quorum of stockholders be there represented in person or by proxy, shall
be valid and binding upon the corporation and upon all the stockholders thereof,
as if it had been approved or ratified by every stockholder of the corporation.
SECTION 9. The Board of Directors shall have the power from time to time to
provide for the management of the offices of the company in such manner as they
see fit, and in particular from time to time to delegate any of the powers of
the Board in the course of the current business of the company to any standing
or special committee or to any officer or agent and to appoint any persons to be
agents of the company with such powers (including the power to subdelegate), and
upon such terms as may be deemed fit.
SECTION 10. The Board of Directors is vested with the complete and
unrestrained authority in the management of all the affairs of the company, and
is authorized to exercise for such purpose as the General Agent of the Company,
its entire corporate authority.
SECTION 11. The regular order of business at meetings of the Board of
Directors shall be as follows:
1. Reading and approval of the minutes of any previous meeting or meetings;
2. Reports of officers and committeemen;
3. Election of officers;
4. Unfinished business;
5. New business;
6. Adjournment.
-4-
<PAGE>
ARTICLE III
OFFICERS AND THEIR DUTIES
SECTION 1. The Board of Directors, at its first and after each meeting
after the annual meeting of stockholders, shall elect a President, A
Vice-President, a Secretary and a Treasurer, to hold office for one year next
coming, and until their successors are elected and qualify. The offices of the
Secretary and Treasurer may be held by one person.
Any vacancy in any of said offices may be filled by the Board of Directors.
The Board of Directors may from time to time, by resolution, appoint such
additional Vice Presidents and additional Assistant Secretaries, Assistant
Treasurer and Transfer Agents of the company as it may deem advisable; prescribe
their duties, and fix their compensation, and all such appointed officers shall
be subject to removal at any time by the Board of Directors. All officers,
agents, and factors of the company shall be chosen and appointed in such manner
and shall hold their office for such terms as the Board of Directors may by
resolution prescribe.
SECTION 2. The President shall be the executive officer of the company and
shall have the supervision and, subject to the control of the Board of
Directors, the direction of the Company's affairs, with full power to execute
all resolutions and orders of the Board of Directors not especially entrusted to
some other officer of the company. He shall be a member of the Executive
Committee, and the Chairman thereof; he shall preside at all meetings of the
Board of Directors, and at all meetings of the stockholders, and shall sign the
Certificates of Stock issued by the company, and shall perform such other duties
as shall be prescribed by the Board of Directors.
SECTION 3. The Vice-President shall be vested with all the powers and
perform all the duties of the President in his absence or inability to act,
including the signing of the Certificates of Stock issued by the company, and he
shall so perform such other duties as shall be prescribed by the Board of
Directors.
SECTION 4. The Treasurer shall have the custody of all the funds and
securities of the company. When necessary or proper he shall endorse on behalf
of the company for collection checks, notes, and other obligations; he shall
deposit all monies to the credit of the company in such bank or banks or other
depository as the Board of Directors may designate; he shall sign all receipts
and vouchers for payments made by the company, except as herein otherwise
provided. He shall sign with the President all bills of exchange and promissory
notes of the company; he shall also have the care and custody of the stocks,
bonds, certificates, vouchers, evidence of debts, securities, and such other
property belonging to the company as the Board of Directors shall designate; he
shall sign all papers required by law or by those By-Laws or the Board of
Directors to be signed by the Treasurer. Whenever required by the Board of
Directors, he shall render a statement of his cash account; he shall enter
regularly in the books of the company to be kept by him for the purpose, full
and accurate accounts of all monies received and paid by him on account of the
company. He shall at all reasonable times exhibit the books of account to any
Directors of the company during business hours, and he shall perform all acts
incident to the position of Treasurer subject to the control of the Board of
Directors.
The Treasurer shall, if required by the Board of Directors, give bond to
the company conditioned for the faithful performance of all his duties as
Treasurer in such sum, and with such surety as shall be approved by the Board of
Directors, with expense of such bond to be borne by the company.
-5-
<PAGE>
SECTION 5. The Board of Directors may appoint an Assistant Treasurer who
shall have such powers and perform such duties as may be prescribed for him by
the Treasurer of the company or by the Board of Directors, and the Board of
Directors shall require the Assistant Treasurer to give a bond to the company in
such sum and with such security as it shall approve, as conditioned for the
faithful performance of his duties as Assistant Treasurer, the expense of such
bond to be borne by the company.
SECTION 6. The Secretary shall keep the Minutes of all meetings of the
Board of Directors and the Minutes of all meetings of the stockholders and of
the Executive Committee in books provided for that purpose. He shall attend to
the giving and serving of all notices of the company; he may sign with the
President or Vice-President, in the name of the Company, all contracts
authorized by the Board of Directors or Executive Committee; he shall affix the
corporate seal of the company thereto when so authorized by the Board of
Directors or Executive Committee; he shall have the custody of the corporate
seal of the company; he shall affix the corporate seal to all certificates of
stock duly issued by the company; he shall have charge of Stock Certificate
Books, Transfer books and Stock Ledgers, and such other books and papers as the
Board of Directors or the Executive Committee may direct, all of which shall at
all reasonable times be open to the examination of any Director upon application
at the office of the company during business hours, and he shall, in general
perform all duties incident to the office of Secretary.
SECTION 7. The Board of Directors may appoint an Assistant Secretary who
shall have such powers and perform such duties as may be prescribed for him by
the Secretary of the company or by the Board of Directors.
SECTION 8. Unless otherwise ordered by the Board of Directors, the
President shall have full power and authority in behalf of the company to attend
and to act and to vote at any meetings of the stockholders of any corporation in
which the company may hold stock, and at any such meetings, shall possess and
may exercise any and all rights and powers incident to the ownership of such
stock, and which as the new owner thereof, the company might have possessed and
exercised if present. The Board of Directors, by resolution, from time to time,
may confer like powers on any person or persons in place of the President to
represent the company for the purposes in this section mentioned.
-6-
<PAGE>
ARTICLE IV
CAPITAL STOCK
SECTION 1. The capital stock of the company shall be issued in such manner
and at such times and upon such conditions as shall be prescribed by the Board
of Directors.
SECTION 2. Ownership of stock in the company shall be evidenced by
certificates of stock in such forms as shall be prescribed by the Board of
Directors, and shall be under the seal of the company and signed by the
President or the Vice-President and also by the Secretary or by an Assistant
Secretary.
All certificates shall be consecutively numbered; the name of the person
owning the shares represented thereby with the number of such shares and the
date of issue shall be entered on the company's books.
No certificates shall be valid unless it is signed by the President or
Vice-President and by the Secretary or Assistant Secretary.
All certificates surrendered to the company shall be canceled and no new
certificate shall be issued until the former certificate for the same number of
shares shall have been surrendered or canceled.
SECTION 3. No transfer of stock shall be valid as against the company
except on surrender and cancellation of the certificate therefor, accompanied by
an assignment or transfer by the owner therefor, made either in person or under
assignment, a new certificate shall be issued therefor.
Whenever any transfer shall be expressed as made for collateral security
and not absolutely, the same shall be so expressed in the entry of said transfer
on the books of the company.
SECTION 4. The Board of Directors shall have power and authority to make
all such rules and regulations not inconsistent herewith as it may deem
expedient concerning the issue, transfer and registration of certificates for
shares of the capital stock of the company.
The Board of Directors may appoint a transfer agent and a registrar of
transfers and may require all stock certificates to bear the signature of such
transfer agent and such registrar of transfer.
SECTION 5. The Stock Transfer Books shall be closed for all meetings of the
stockholders for the period of ten days prior to such meetings and shall be
closed for the payment of dividends during such periods as from time to time may
be fixed by the Board of Directors, and during such periods no stock shall be
transferable.
SECTION 6. Any person or persons applying for a certificate of stock in
lieu of one alleged to have been lost or destroyed, shall make affidavit or
affirmation of the fact, and shall deposit with the company an affidavit.
Whereupon, at the end of six months after the deposit of said affidavit and upon
such person or persons giving Bond of Indemnity to the company with surety to be
approved by the Board of Directors in double the current value of stock against
any damage, loss or inconvenience to the company, which may or can arise in
consequence of a new or duplicate certificate being issued in lieu of the one
lost or missing, the Board of Directors may cause to be issued to such person or
persons a new certificate, or a duplicate of the certificate, so lost or
destroyed. The Board of Directors may, in its discretion refuse to issue such
new or duplicate certificate save upon the order of some court having
juridsiction in such matter, anything herein to the contrary notwithstanding.
-7-
<PAGE>
ARTICLE V
OFFICES AND BOOKS
SECTION 1. The principal office of the corporation, in Nevada shall be at
7555 La Madre Way, Las Vegas, and the company may have a principal office in any
other state or territory as the Board of Directors may designate.
SECTION 2. The Stock and Transfer Books and a copy of the By-Laws and
Articles of Incorporation of the company shall be kept at its principal office
in the County of Clark, state of Nevada, for the inspection of all who are
authorized or have the right to see the same, and for the transfer of stock. All
other books of the company shall be kept at such places as may be prescribed by
the Board of Directors
-8-
<PAGE>
ARTICLE VI
MISCELLANEOUS
SECTION 1. The Board of Directors shall have power to reserve over and
above the capital stock paid in, such an amount in its discretion as it may deem
advisable to fix as a reserve fund, and may, from time to time, declare
dividends from the accumulated profits of the company in excess of the amounts
so reserved, and pay the same to the stockholders of the company, and may also,
if it deems the same advisable, declare stock dividends of the unissued capital
stock of the company.
SECTION 2. No agreement, contract or obligation (other than checks in
payment of indebtedness incurred by authority of the Board of Directors)
involving the payment of monies or the credit of the company for more than
$10,000 dollars, shall be made without the authority of the Board of Directors,
or of the Executive acting as such.
SECTION 3. Unless otherwise ordered by the Board of Directors, all
agreements and contracts shall be signed by the President and the Secretary in
the name and on behalf of the company, and shall have the corporate seal thereto
affixed.
SECTION 4. All monies of the corporation shall be deposited when and as
received by the Treasurer in such bank or banks or other depository as may from
time to time be designated buy the Board of Directors, and such deposits shall
be made in the name of the company.
SECTION 5. No note, draft, acceptance, endorsement or other evidence of
indebtedness shall be valid or against the company unless the same shall be
signed by the President or a Vice-President, and attested by the Secretary or an
Assistant Secretary, or signed by the Treasurer or an Assistant Treasurer, and
countersigned by the President, Vice-President, or Secretary, except that the
Treasurer or an Assistant Treasurer may, without countersignature, make
endorsements for deposit to the credit of the company in all its duly authorized
depositories.
SECTION 6. No loan or advance of money shall be made by the company to any
stockholder or officer therein, unless the Board of Directors shall otherwise
authorize.
SECTION 7. No director nor executive officer of the company shall be
entitled to any salary or compensation for any services performed for the
company, unless such salary or compensation shall be fixed by resolution of the
Board of Directors, adopted by the unanimous vote of all the Directors voting in
favor thereof.
SECTION 8. The company make take, acquire, hold, mortgage, sell, or
otherwise deal in stocks or bonds or securities of any other corporation, if and
as often as the Board of Directors shall so elect.
SECTION 9. The Directors shall have power to authorize and cause to be
executed, mortgages, and liens without limit as to amount upon the property and
franchise of this corporation, and pursuant to the affirmative vote, either in
person or by proxy, of the holders of a majority of the capital stock issued and
outstanding; the Directors shall have the authority to dispose in any manner of
the whole property of this corporation.
SECTION 10. The company shall have a corporate seal, the design thereof
being as follows:
-9-
<PAGE>
ARTICLE VII
AMENDMENT OF BY-LAWS
SECTION 1. Amendments and changes of these By-Laws may be made at any
regular or special meeting of the Board of Directors by a vote of not less than
all of the entire Board, or may be made by a vote of, or a consent in writing
signed by the holders of fifty-one percent (51%) of the issued and outstanding
capital stock.
KNOW ALL MEN BY THESE PRESENTS: That we, the undersigned, being the
directors of the above named corporation, do hereby consent to the foregoing
By-Laws and adopt the same as and for the By-Laws of said corporation.
IN WITNESS WHEREOF, we have hereunto set our hands this 13th day of
October, 1995.
/s/ Carrie Cooper Thurman
-------------------------
Carrie Cooper Thurman
/s/ William Ted Thurman
-------------------------
William "Ted" Thurman
EMPLOYMENT AND SERVICES AGREEMENT
THIS AGREEMENT dated for reference May 20, 1999
BETWEEN:
BIDHIT.COM, INC.,
A Washington state corporation having an office at Suite 204,
18702 North Creek Parkway, Bothel, Washington 98011
(herein called "BidHit")
OF THE FIRST PART
AND:
JEFF MENDENHALL,
of 12221 - 100th Avenue, N.E., Kirkland, WA 98034 USA
("Mendenhall")
OF THE SECOND PART
WHEREAS:
A. BidHit wishes to retain the services of Mendenhall as Vice-President for
BidHit to assist in the development and operation of BidHit's principal trading
activity "Interactive Auction Online" upon the terms and conditions contained in
this Agreement; and
B. Mendenhall has agreed to enter into this Agreement for the purpose of
providing certain covenants.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration
of the premises and the covenants and agreements herein contained, the parties
hereto do mutually covenant and agree as follows:
1. Engagement. BidHit hereby engages Mendenhall to provide the Services (as
hereinafter defined) and Mendenhall accepts such engagement.
2. Services. Mendenhall covenants to provide his services to BidHit during the
Term and any renewal thereof and covenants and agrees as follows:
(a) to provide his management expertise and experience in the
capacity of Vice-President and in the capacity of Director of
BidHit's parent, BidHit.com Inc. (Nevada);
(b) to establish operational strategies for the implementation of
BidHit's business plan, principally, the operation and
expansion of BidHit's "Interactive Auction Online" business;
<PAGE>
(c) subject to the direction of BidHit, to perform all such acts
as are necessary to properly and efficiently carry out the
foregoing and any other functions or duties requested by
BidHit,
(collectively, the "Services").
3. Provision of Services. Mendenhall covenants and agrees to provide his
services on a full-time basis, 49 weeks per year upon the terms and conditions
contained in this Agreement.
4. Term. The term of this Agreement (the "Term") shall commence on June 1, 1999
and shall end on June 1, 2001. Upon the expiration of the Term, this Agreement
may be renewed for a further one (1) year term at the sole option of BidHit. In
the event that BidHit wishes to renew this Agreement upon the expiration of the
Term, BidHit shall give notice of its intention to renew this Agreement to
Mendenhall not less than two (2) months prior to the expiration of the Term. If
notice of renewal is given by BidHit to Mendenhall as provided herein, this
Agreement will be extended for a further term of one (1) year upon such terms
and conditions as may be negotiated by the Parties.
5. Remuneration. BidHit shall pay Mendenhall a remuneration package as follows:
(1) a signing bonus of $5,000 to be paid on the first day of
Mendenhall's employment at BidHit;
(2) a salary of $4,000 per month until the earlier of the 12th
month of the Term or closing of a secondary financing by
BidHit. Upon the occurrence of either a secondary financing by
BidHit or the end of the 12th month of the Term, Mendenhall's
salary shall be renegotiated by the Parties;
(3) stock options to acquire up to 277,875 common shares of BidHit
at a price of $4.00 per share with 25% of the total options
vesting with Mendenhall at the end of the third, sixth, ninth
and twelfth months of the first year of the Term;
(4) 400,000 common shares of BidHit vesting with Mendenhall at the
rate of 100,000 shares at the end of the third, sixth, ninth
and twelfth months of the Term;
(5) enrollment in a medical benefits plan to be determined at the
discretion of BidHit's President.
6. Expenses. BidHit shall reimburse Mendenhall for all travelling and other
expenses actually and properly incurred by him in connection with his duties
hereunder, provided that such expenses are supported by proper statements or
vouchers supplied to BidHit within 45 days of the date the expense was incurred.
<PAGE>
7. Direction. Mendenhall shall report to and be subject to the direction of the
President of BidHit or to such person or persons as the Board of Directors of
BidHit may designate from time to time.
8. Termination. Notwithstanding any provision contained herein to the contrary,
BidHit may terminate this Agreement without notice in the event that Mendenhall
is in breach of any of the terms or conditions contained herein. In addition,
BidHit may terminate this Agreement without notice for cause at any time without
liability for damages or otherwise or without cause upon payment of two month's
remuneration. Upon termination of this Agreement in the event that Mendenhall is
in breach of any of the terms or conditions herein contained or for cause,
Mendenhall will cease to be entitled to receive any further compensation
pursuant to this Agreement including, without limitation, the remuneration
provided for in paragraph 5. Nothing contained herein shall prejudice BidHit's
other rights and remedies upon termination of this Agreement, at law, in equity
or otherwise.
9. Confidential Information and Restrictive Covenant. Mendenhall acknowledges
that in the course of his duties hereunder, he shall acquire access to data and
information relating to the operation of the business of BidHit and, in
particular, the operation of BidHit's "Interactive Auction Online" business.
Mendenhall further acknowledges that if he was to compete against BidHit or be
employed or in any way involved with a person or company that was in competition
with BidHit during or following the termination of this Agreement, BidHit would
suffer irreparable damage. Accordingly, Mendenhall hereby covenants and agrees
that he will not, during the Term of this Agreement or any renewal thereof or
for a period of two (2) years following the termination of this Agreement,
either alone or in partnership or in conjunction with any other person or
persons, firm, association, syndicate, company, as principal, agent,
shareholder, officer, director or in any other manner whatsoever, carry on or be
engaged in or concerned with or interested in, or advise, any person or persons,
firm, association, syndicate or company engaged in any aspect of the business of
BidHit or the Services provided hereunder.
10. No Disclosure. Except as required in the performance of the Services and
duties of Mendenhall to BidHit, Mendenhall shall not at any time during the Term
of this Agreement or any renewal thereof, or at any time thereafter, directly,
indirectly, or otherwise, use, communicate, disclose, disseminate, discuss,
lecture upon or publish articles concerning confidential, proprietary and trade
secret information of BidHit without the prior written consent of BidHit.
11. Meaning of "Confidential". "Confidential, proprietary and trade secret
information" as used herein means any information and practices not generally
known or recognized or in the public domain in the industry in which BidHit is
engaged, which information or practices are disclosed to, developed, known or
contributed by Mendenhall as a consequence of, or during the Term of this
Agreement or any renewal thereof, and concerning any acquisition, assessments,
analysis or engineering, technology, research, test procedures and results,
equipment, computer hardware and software programs, services used, marketing,
selling and servicing, or business methods used, manufactured, developed or
acquired by or for BidHit including, without limitation, the Services provided
hereunder.
<PAGE>
12. Confidentiality of Documents. All documents, computer programs or software,
records, notebooks, work papers, notes, memoranda and similar repositories of or
containers of confidential, proprietary or trade secret information, made or
compiled by Mendenhall at any time, or made available to Mendenhall during the
Term of this Agreement and any renewal thereof, including any and all copies
thereof, shall be the property of BidHit and belong solely to BidHit and shall
be held by Mendenhall in trust and solely for the benefit of BidHit and shall be
delivered to BidHit by Mendenhall upon the termination of this Agreement or at
any other time upon request by BidHit.
13. Notification of Actions. Mendenhall shall promptly notify BidHit of any
suit, proceeding or other action commenced or taken against BidHit or of any
facts or circumstances of which Mendenhall is aware which may reasonably form
the basis of any suit, proceeding or action against BidHit.
14. Currency. All monetary amounts expressed herein and all payments made
hereunder shall be in U.S. dollars.
15. Notices. Any notice or other communication required or permitted to be given
hereunder shall (with the exception of dismissal effected pursuant to paragraph
8 hereof) be in writing and shall be deemed to have been duly given if delivered
by hand or if sent by registered mail with postage prepaid addressed as follows
or if telecopied to the telecopier numbers as follows:
If to BidHit:
BidHit.com, Inc.
Suite 204
18702 North Creek Parkway
Bothel, Washington 98011
Attention: Mr. Tim Black
Facsimile: (425)424-3661
If to Mendenhall:
Jeff Mendenhall
12221 - 100th Avenue, N.E.
Kirkland, WA 98034 USA
or to such other address as any party may specify in writing to the others and
shall be deemed to have been received if delivered by hand, on the date of
delivery, or if mailed as aforesaid, on the fourth business day following the
date of mailing thereof or if telecopied, on the business day next following the
date of telecopying; provided that if there shall be an interruption of postal
services which affects the delivery of mail, notice shall be delivered by hand
or telecopier only.
16. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Washington.
<PAGE>
17. No Assignment. This Agreement is personal to Mendenhall and may not be
assigned by it.
18. Enurement. This Agreement shall enure to the benefit of and be binding upon
the parties hereto and their respective heirs, executors, administrators,
successors and permitted assigns.
19. Time of Essence. Time is of the essence of this Agreement and each of its
terms.
20. Entire Agreement. This Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof and supersedes all
previous agreements, negotiations, and discussions between the parties. This
Agreement may only be amended or varied by written agreement executed by all of
the parties hereto.
21. Severability. Any determination by a court of competent jurisdiction that
any provision or part thereof contained in this Agreement is invalid or
unenforceable shall not affect the validity or enforceability of the remaining
portion of this Agreement, which remaining portion shall remain in full force
and effect as if this Agreement had been executed with the invalid or
unenforceable portion thereof eliminated and it is hereby declared the intention
of the parties hereto that they would have executed the remaining portion of
this Agreement without including therein any such part or parts or portion which
may for any reason be hereafter declared invalid or unenforceable.
22. Further Assurances. Each of the parties shall execute such further and other
documents and instruments and do such further and other things as may be
necessary to implement and carry out the intent of this Agreement.
23. Survival. The parties agree that the provisions of paragraphs 9, 10, 11 and
12 shall continue in full force and effect for the benefit of BidHit
notwithstanding the termination of this Agreement for any reason whatsoever.
24. Injunctive Remedies. In the event of a breach or a threatened breach of, or
a default or a threatened default under, any of the terms of this Agreement by
Mendenhall, Mendenhall acknowledges and agrees with BidHit that such breach,
threatened breach, default or threatened default, as the case may be, may cause
irreparable harm to BidHit and BidHit shall be entitled to an injunction
restraining such breach, threatened breach, default or threatened default, as
the case may be, without showing or proving any actual damage. The right to an
injunction shall be cumulative and in addition to whatever other remedies BidHit
may have available at law or in equity.
25. No Waiver. No waiver by any party hereto of any default in performance on
the part of the other party and no waiver by any party of any breach or of a
series of breaches of any of the terms, covenants or conditions of this
Agreement shall constitute a waiver of any subsequent or continuing breach of
such terms, covenants or conditions. The failure of any party hereto to assert
any claim in a timely fashion with respect to any of its rights or remedies
under
<PAGE>
this Agreement shall not be construed as a waiver of any such claim and shall
not serve to modify, alter or restrict any such party's right to assert such
claim at any time thereafter.
26. Counterparts. This Agreement may be executed in one or more counterparts
and/or by facsimile, each of which when executed by any party hereto will be
deemed to be an original and such counterparts will together constitute one and
the same instrument.
IN WITNESS WHEREOF the parties hereto have executed this
Agreement as of the day first above written.
BIDHIT.COM, INC.
Per: /s/ Tim Black
---------------------------------------
/s/ Jeff Mendenhall
----------------------------------------
<PAGE>
EMPLOYMENT AND SERVICES AGREEMENT
THIS AGREEMENT dated for reference May 20, 1999
BETWEEN:
BIDHIT.COM, INC.,
A Washington state corporation having an office at Suite 204,
18702 North Creek Parkway, Bothel, Washington 98011
(herein called "BidHit")
OF THE FIRST PART
AND:
TIM BLACK,
of 512 - 225th Place, S.E., Bothel, Washington, 98021 USA
("Black")
OF THE SECOND PART
WHEREAS:
A. BidHit wishes to retain the services of Black as President for BidHit to
assist in the development and operation of BidHit's principal trading activity
"Interactive Auction Online" upon the terms and conditions contained in this
Agreement; and
B. Black has agreed to enter into this Agreement for the purpose of providing
certain covenants.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration
of the premises and the covenants and agreements herein contained, the parties
hereto do mutually covenant and agree as follows:
1. Engagement. BidHit hereby engages Black to provide the Services (as
hereinafter defined) and Black accepts such engagement.
2. Services. Black covenants to provide his services to BidHit during the Term
and any renewal thereof and covenants and agrees as follows:
(a) to provide his management expertise and experience in the
capacity of President and Chief Executive Officer and in the
capacity of Chairman of BidHit's parent, BidHit.com, Inc.
(Nevada);
(b) to manage the development and establishment of operational
strategies for the implementation of BidHit's business plan,
principally, the operation and expansion of BidHit's
"Interactive Auction Online" business;
<PAGE>
(c) subject to the direction of BidHit, to perform all such acts
as are necessary to properly and efficiently carry out the
foregoing and any other functions or duties requested by
BidHit,
(collectively, the "Services").
3. Provision of Services. Black covenants and agrees to provide his services on
a full-time basis, 49 weeks per year upon the terms and conditions contained in
this Agreement.
4. Term. The term of this Agreement (the "Term") shall commence on June 1, 1999
and shall end on June 1, 2001. Upon the expiration of the Term, this Agreement
may be renewed for a further one (1) year term at the sole option of BidHit. In
the event that BidHit wishes to renew this Agreement upon the expiration of the
Term, BidHit shall give notice of its intention to renew this Agreement to Black
not less than two (2) months prior to the expiration of the Term. If notice of
renewal is given by BidHit to Black as provided herein, this Agreement will be
extended for a further term of one (1) year upon such terms and conditions as
may be negotiated by the Parties.
5. Remuneration. BidHit shall pay Black a remuneration package as follows:
(1) a salary of $4,000 per month until the earlier of the 12th
month of the Term or closing of a secondary financing by
BidHit. Upon the occurrence of either a secondary financing by
BidHit or the end of the 12th month of the Term, Black's
salary shall be renegotiated by the Parties; and
(2) stock options to acquire up to 277,875 common shares of BidHit
at a price of $4.00 per share with 25% of the total options
vesting with Black at the end of the third, sixth, ninth and
twelfth months of the first year of the Term.
6. Expenses. BidHit shall reimburse Black for all travelling and other expenses
actually and properly incurred by him in connection with his duties hereunder,
provided that such expenses are supported by proper statements or vouchers
supplied to BidHit within 45 days of the date the expense was incurred.
7. Direction. Black shall report to and be subject to the direction of the Board
of Directors of BidHit.
8. Termination. Notwithstanding any provision contained herein to the contrary,
BidHit may terminate this Agreement without notice in the event that Black is in
breach of any of the terms or conditions contained herein. In addition, BidHit
may terminate this Agreement without notice for cause at any time without
liability for damages or otherwise or without cause upon payment of two month's
remuneration. Upon termination of this Agreement in the event that Black is in
breach of any of the terms or conditions herein contained or for cause, Black
will cease to be entitled to receive any further compensation pursuant to this
Agreement including, without limitation, the remuneration provided for in
paragraph 5. Nothing contained herein shall
<PAGE>
prejudice BidHit's other rights and remedies upon termination of this Agreement,
at law, in equity or otherwise.
9. Confidential Information and Restrictive Covenant. Black acknowledges that in
the course of his duties hereunder, he shall acquire access to data and
information relating to the operation of the business of BidHit and, in
particular, the operation of BidHit's "Interactive Auction Online" business.
Black further acknowledges that if he was to compete against BidHit or be
employed or in any way involved with a person or company that was in competition
with BidHit during or following the termination of this Agreement, BidHit would
suffer irreparable damage. Accordingly, Black hereby covenants and agrees that
he will not, during the Term of this Agreement or any renewal thereof or for a
period of two (2) years following the termination of this Agreement, either
alone or in partnership or in conjunction with any other person or persons,
firm, association, syndicate, company, as principal, agent, shareholder,
officer, director or in any other manner whatsoever, carry on or be engaged in
or concerned with or interested in, or advise, any person or persons, firm,
association, syndicate or company engaged in any aspect of the business of
BidHit or the Services provided hereunder.
10. No Disclosure. Except as required in the performance of the Services and
duties of Black to BidHit, Black shall not at any time during the Term of this
Agreement or any renewal thereof, or at any time thereafter, directly,
indirectly, or otherwise, use, communicate, disclose, disseminate, discuss,
lecture upon or publish articles concerning confidential, proprietary and trade
secret information of BidHit without the prior written consent of BidHit.
11. Meaning of "Confidential". "Confidential, proprietary and trade secret
information" as used herein means any information and practices not generally
known or recognized or in the public domain in the industry in which BidHit is
engaged, which information or practices are disclosed to, developed, known or
contributed by Black as a consequence of, or during the Term of this Agreement
or any renewal thereof, and concerning any acquisition, assessments, analysis or
engineering, technology, research, test procedures and results, equipment,
computer hardware and software programs, services used, marketing, selling and
servicing, or business methods used, manufactured, developed or acquired by or
for BidHit including, without limitation, the Services provided hereunder.
12. Confidentiality of Documents. All documents, computer programs or software,
records, notebooks, work papers, notes, memoranda and similar repositories of or
containers of confidential, proprietary or trade secret information, made or
compiled by Black at any time, or made available to Black during the Term of
this Agreement and any renewal thereof, including any and all copies thereof,
shall be the property of BidHit and belong solely to BidHit and shall be held by
Black in trust and solely for the benefit of BidHit and shall be delivered to
BidHit by Black upon the termination of this Agreement or at any other time upon
request by BidHit.
13. Notification of Actions. Black shall promptly notify BidHit of any suit,
proceeding or other action commenced or taken against BidHit or of any facts or
circumstances of which Black is aware which may reasonably form the basis of any
suit, proceeding or action against BidHit.
<PAGE>
14. Currency. All monetary amounts expressed herein and all payments made
hereunder shall be in U.S. dollars.
15. Notices. Any notice or other communication required or permitted to be given
hereunder shall (with the exception of dismissal effected pursuant to paragraph
8 hereof) be in writing and shall be deemed to have been duly given if delivered
by hand or if sent by registered mail with postage prepaid addressed as follows
or if telecopied to the telecopier numbers as follows:
If to BidHit:
BidHit.com, Inc.
Suite 204
18702 North Creek Parkway
Bothel, Washington 98011
Attention: Mr. Tim Black
Facsimile: (425)424-3661
If to Black:
Tim Black
512 - 225th Place, S.E.
Bothel, Washington 98021
or to such other address as any party may specify in writing to the others and
shall be deemed to have been received if delivered by hand, on the date of
delivery, or if mailed as aforesaid, on the fourth business day following the
date of mailing thereof or if telecopied, on the business day next following the
date of telecopying; provided that if there shall be an interruption of postal
services which affects the delivery of mail, notice shall be delivered by hand
or telecopier only.
16. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Washington.
17. No Assignment. This Agreement is personal to Black and may not be assigned
by it.
18. Enurement. This Agreement shall enure to the benefit of and be binding upon
the parties hereto and their respective heirs, executors, administrators,
successors and permitted assigns.
19. Time of Essence. Time is of the essence of this Agreement and each of its
terms.
20. Entire Agreement. This Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof and supersedes all
previous agreements,
<PAGE>
negotiations, and discussions between the parties. This Agreement may only be
amended or varied by written agreement executed by all of the parties hereto.
21. Severability. Any determination by a court of competent jurisdiction that
any provision or part thereof contained in this Agreement is invalid or
unenforceable shall not affect the validity or enforceability of the remaining
portion of this Agreement, which remaining portion shall remain in full force
and effect as if this Agreement had been executed with the invalid or
unenforceable portion thereof eliminated and it is hereby declared the intention
of the parties hereto that they would have executed the remaining portion of
this Agreement without including therein any such part or parts or portion which
may for any reason be hereafter declared invalid or unenforceable.
22. Further Assurances. Each of the parties shall execute such further and other
documents and instruments and do such further and other things as may be
necessary to implement and carry out the intent of this Agreement.
23. Survival. The parties agree that the provisions of paragraphs 9, 10, 11 and
12 shall continue in full force and effect for the benefit of BidHit
notwithstanding the termination of this Agreement for any reason whatsoever.
24. Injunctive Remedies. In the event of a breach or a threatened breach of, or
a default or a threatened default under, any of the terms of this Agreement by
Black, Black acknowledges and agrees with BidHit that such breach, threatened
breach, default or threatened default, as the case may be, may cause irreparable
harm to BidHit and BidHit shall be entitled to an injunction restraining such
breach, threatened breach, default or threatened default, as the case may be,
without showing or proving any actual damage. The right to an injunction shall
be cumulative and in addition to whatever other remedies BidHit may have
available at law or in equity.
25. No Waiver. No waiver by any party hereto of any default in performance on
the part of the other party and no waiver by any party of any breach or of a
series of breaches of any of the terms, covenants or conditions of this
Agreement shall constitute a waiver of any subsequent or continuing breach of
such terms, covenants or conditions. The failure of any party hereto to assert
any claim in a timely fashion with respect to any of its rights or remedies
under this Agreement shall not be construed as a waiver of any such claim and
shall not serve to modify, alter or restrict any such party's right to assert
such claim at any time thereafter.
26. Counterparts. This Agreement may be executed in one or more counterparts
and/or by facsimile, each of which when executed by any party hereto will be
deemed to be an original and such counterparts will together constitute one and
the same instrument.
IN WITNESS WHEREOF the parties hereto have executed this
Agreement as of the day first above written.
BIDHIT.COM, INC.
<PAGE>
Per: /s/ Tim Black
---------------------------------------
/s/ Tim Black
----------------------------------------
EXHIBIT 5.1
A PARTNERSHIP OF INCORPORATED PROFESSIONALS
DAVIDSON & COMPANY CHARTERED ACCOUNTANTS
October 13, 1999
BIDHIT.COM INC.
18702 North Creek Parkway
Suite 204
Bothell, Washington
USA 98011
RE: FORM 10-SB
Dear Sirs:
We refer to the Form 10-SB Registration Statement of Bidhit.com Inc. (the
"Company") filed pursuant to Section 12(g) of the Securities Exchange Act of
1934, as amended.
We conducted an audit of the Company's financial statements and have provided an
audit report dated September 16, 1999 in connection with the preparation of the
Form 10-SB. We hereby consent to the filing of our audit report as part of the
aforementioned registration Statement.
"DAVIDSON & COMPANY"
Vancouver, Canada Chartered Accountants
A Member of Accounting Group International
------------------------------------------
Suite 1200, Stock Exchange Tower, 609 Granville Street, P.O. Box 10372,
Pacific Centre, Vancouver, BC, Canada, V7Y 1G6
Telephone (604) 687-0947 Fax (604) 687-6172
Barry L. Friedman, P.C.
Certified Public Accountant
1582 Tulita Drive
Las Vegas, Nevada 89123
Telephone: (702)361-8414
Facsimile: (702)896-0278
October 20, 1999
U.S. Securities and Exchange Commission
Division of Corporation Finance
Mail Stop 3-4
450 - 5th Street, N.W.
Washington, D.C. 20549
Dear Sir/Madam:
Re: Form 10SB filed by BidHit.com, Inc. (the "Company")
(formerly Third Millennium Software Corp.)
I am the former accountant/auditor for the Company. I have
received and reviewed a copy of the Company's Form 10SB which was filed with the
Securities and Exchange Commission on October 15, 1999.
I agree with the disclosure and all statements in the
Company's Form 10SB as they relate to the Company's financial matters.
Should you have any questions, please do not hesitate to
contact the writer.
Yours truly,
/s/ Barry L. Friedman
----------------------------
Barry L. Friedman, P.C.
EXHIBIT 6
SUBSIDIARIES OF
BIDHIT.COM, INC. (NEVADA)
BidHit.com, Inc. (Nevada) has one subsidiary being BidHit.com, Inc. (Washington)
which was incorporated in the State of Washington.
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
FINANCIAL DATA SCHEDULE
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED FINANCIAL STATEMENTS FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1999 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<CIK> 0001087356
<NAME> BIDHIT.COM, INC.
<MULTIPLIER> 1
<CURRENCY> US
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<EXCHANGE-RATE> 1
<CASH> 3,297,517
<SECURITIES> 0
<RECEIVABLES> 2,317
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,316,753
<PP&E> 16,484
<DEPRECIATION> 46
<TOTAL-ASSETS> 3,901,292
<CURRENT-LIABILITIES> 259,608
<BONDS> 0
0
0
<COMMON> 9,263
<OTHER-SE> 3,632,421
<TOTAL-LIABILITY-AND-EQUITY> 3,901,292
<SALES> 3,204
<TOTAL-REVENUES> 49,788
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 263,104
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (213,316)
<EPS-BASIC> (0.11)
<EPS-DILUTED> (0.11)
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
FINANCIAL DATA SCHEDULE
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORAMTION EXTRACTED FROM THE AUDITED
FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFEREENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<CIK> 0001087356
<NAME> BIDHIT.COM, INC.
<MULTIPLIER> 1
<CURRENCY> US
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<EXCHANGE-RATE> 1
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 70,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 70,000
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 70,000
<CURRENT-LIABILITIES> 70,000
<BONDS> 0
0
0
<COMMON> 2,500
<OTHER-SE> (2,500)
<TOTAL-LIABILITY-AND-EQUITY> 70,000
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
