SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT
Under
The Securities Act of 1933
GimmeaBid.com, Inc.
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<S> <C> <C>
Delaware 8400 91-2028529
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
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174-G World Trade Center
2050 Stemmons Freeway
P. O. Box 420132
Dallas, Texas 75342
(214)752-6070
(Address, including zip code, and telephone number,
including area code, of Registrant's
principal executive offices)
J. Michael Wood
GimmeaBid.com, Inc.
2050 Stemmons Freeway
P. O. Box 420132
Dallas, Texas 75342
(214)752-6070
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
GARY R. HENRIE, ESQ.
FABIAN & CLENDENIN
215 South State, 12th. Floor
Salt Lake City, Utah 84111
(801) 531-8900
Fax: (801) 531-1716
Approximate date of commencement of proposed sale of the
securities to the public: from time to time after this
registration statement becomes effective.
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. ______
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.______
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. ______
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<CAPTION>
Calculation of Registration Fee
Title of Each Class Amount to be Proposed Maximum Proposed Maximum Amount of
of Securities to be Registered Offering Price Per Aggregate Offering Registration fee
Registered Unit Price
- ----------------------- --------------------- -------------------- --------------------- --------------------
<S> <C> <C> <C> <C>
Common Stock ($0.001 1,500,000 $ 19.00 $ 28,500,000 $ 7,524
par value)
Common Stock (1) 1,200,000 $ 19.00 $ 22,800,000 $ 6,019
- ----------------------- --------------------- -------------------- --------------------- --------------------
Total 2,700,000 $ 19.00 $ 51,300,000 $ 13,543
- ----------------------- --------------------- -------------------- --------------------- --------------------
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(1) Selling Stockholder's stock registration fee was calculated pursuant to Rule
457(c) of Regulation C using the current offering price of $19.00 per share.
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with section 8(a) of the
Securities Act of 1933, as amended, or until this registration statement shall
become effective on such date as the Commission, acting pursuant to said section
8(a), may determine.
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PRELIMINARY PROSPECTUS
SUBJECT TO COMPLETION, DATED MAY 1, 2000
(printed in red ink)
2,700,000 Shares
(Company Logo Printed in Color)
Common Stock
Of the 2,700,000 shares of Common Stock offered hereby, 1,500,000 are
being sold by GimmeaBid.com, Inc. ("GimmeaBid.com" or the "Company") and
1,200,000 are being registered for the benefit of the selling stockholders as
hereinafter defined. Prior to this offering (the "Offering"), there has been no
public market for the Common Stock of the Company. It is currently estimated
that the public offering price will be $19.00 per share. The Company will apply
for quotation on the Over-The-Counter Market of its Common Stock under the
symbol "GBID". At the present time neither any National Securities Exchange nor
the NASDAQ stock market lists the securities offered. This offering will expire
April 30, 2001. There is no minimum investment amount. There is also no minimum
offering amount and an escrow service will not be used. The proceeds from this
offering will be immediately available to the Company.
----------------------------------
The Common Stock offered hereby involves a high degree
of risk. See "Risk Factors" commencing on page 6 for a
discussion of certain factors that
should be considered by prospective investors.
----------------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THE PROSPECTUS. ANY REPRESENTATIONS TO THE
CONTRARY ARE A CRIMINAL OFFENSE.
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<CAPTION>
Title of Each Amount to be Proposed Proposed Commissions, Net Proceeds
Class of Registered Maximum Maximum Discounts, to the
Securities to be Offering Price Aggregate And Underwriting Company
Registered Per Unit Offering Price Expenses (2)
- -------------------- ------------------ ----------------- ----------------- ------------------- --------------
<S> <C> <C> <C> <C> <C>
Common Stock 1,500,000 $ 19.00 $ 28,500,000 15% $24,225,000
($0.001 par value)
Common Stock (1) 1,200,000 $ 19.00 $ 22,800,000 - -
- -------------------- ------------------ ----------------- ----------------- ------------------- --------------
Total 2,700,000 $ 19.00 $ 51,300,000 - $24,225,000
- -------------------- ------------------ ----------------- ----------------- ------------------- --------------
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(1) The selling security holders may from time to time sell the separate
shares on any securities exchange or automated quotation system on
which our common stock may be listed or traded, in negotiated
transactions or otherwise, at prices then prevailing or related to the
then correct market price or at negotiated prices. The separate shares
may be sold directly or through broker-dealers. We note that our common
stock is not listed on any exchange or quotation system at the present
time.
(2) There are no prior agreements for the purchase of these common shares.
GimmeaBid.com's officers and directors will attempt to offer and sell
all of the shares on a best efforts basis. We may use a registered
broker dealer to assist us, although at this time no such broker has
been identified. If a broker-dealer is used, we will allow a maximum
commission of 15% on broker sales.
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale
is not permitted. (Printed in red ink along left margin)
The date of this prospectus is ____________, 2000.
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PROSPECTUS SUMMARY
The following information is qualified in its entirety by the more
detailed information and the Financial Statements and Notes thereto appearing
elsewhere. This Prospectus may contain, in addition to historical information,
forward-looking statements that involve risks and uncertainties. The Company's
actual results and the timing of certain events could cause or contribute to
such differences including those discussed under "Risk Factors," as well as
those discussed elsewhere in this Prospectus.
The Company
The primary business purpose of GimmeaBid.com is to use the Internet to
create a real-time wholesale auction of used automobiles between auto dealers,
both independent and franchised. Until now, auto dealers have both bought and
sold vehicles through regional auctions located across the U.S. The process is
time consuming, expensive, and frequently requires dealers to travel for
extended periods of time. A recent survey found that approximately 17% of all
dealers travel in excess of 200 miles to attend these regional auctions. The
used auto industry represents $361 Billion in 1999 and is projected to grow to
$388 Billion by 2004.
GimmeaBid.com now presents the auto industry with a unique and
profoundly superior method to buy and sell vehicles of all types through an
on-line wholesale auction. For the first time, multiple buyers and sellers,
across the U.S. will be able to simultaneously interact and transact e-commerce
sales of virtually any type of vehicle on a more cost effective and productive
basis. It is a timely adaptation of Internet enabled technology to the existing
national dealer market. This auction will, for the first time ever, broaden the
scope of wholesale auctions from a fragmented and regionally limited level, to a
national scope.
GimmeaBid.com will create significant value by aggregating buyers and
sellers, creating marketplace liquidity, and driving down traditional
transaction costs. Buyers will benefit significantly by having the nation's used
vehicle inventory at their fingertips, giving them more choices, lower inventory
requirements, and driving down acquisition costs both in terms of time and
money. Sellers benefit significantly by having access to a larger pool of buyers
than has ever been available through traditional methods that significantly
increases their liquidity.
By capturing 1% market share of the nation's wholesale auto market,
GimmeaBid.com's gross revenue is projected to be approximately $22,500,000.00 by
December 31, 2001. We believe, however, by being first to revolutionize this
particular market through the power of the Internet, the process will be
compelling to dealers everywhere and we will exceed our goals. In addition, the
Internet auction site will allow almost any increase in volume without the
usually correlated increase in operating expense.
GimmeaBid.com envisions this auction to be comprehensive for the auto
dealer where they can meet their inventory and liquidity needs, buy parts and
accessories, purchase extended warranties, various insurance products, and make
shipping arrangements.
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The Offering
Securities Offered 2,700,000,000 common shares of GimmeaBid.com common
stock, of which 1,500,000 common shares are being
offered by the Company and 1,200,000 are being
offered by selling stockholders.
Use of Proceeds We will receive $ 24,225,000 if all of the 1,500,000
shares offered by the Company on a "best efforts"
basis are purchased. We intend to use any proceeds
from such sale for the approximations set forth
below:
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<CAPTION>
% of Total
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<S> <C> <C>
Sales, Marketing, & Advertising $15,585,000 55 %
General & Administrative Expense $ 1,001,598 3.5%
Research, Development, & Hardware $ 417,000 1.5%
Offering Expenses $ 4,347,043 (1) 15 %
Working Capital $ 7,149,359 25 %
------------
Total $28,500,000
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(1) Includes a commission allowance of 15% for commissions provided
that a broker-dealer is used in this offering that equates to $
4,275,000.
This offering This offering will close whenever all of the shares
will expire are sold, or April 30,2001, whichever comes first.
5
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RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW BEFORE MAKING
AN INVESTMENT DECISION. THE RISKS AND UNCERTAINTIES DESCRIBED BELOW ARE NOT THE
ONLY ONES FACING OUR COMPANY. ADDITIONAL RISKS AND UNCERTAINTIES NOT PRESENTLY
KNOWN TO US OR THAT WE CURRENTLY DEEM IMMATERIAL MAY ALSO IMPAIR OUR BUSINESS
OPERATIONS OR FINANCIAL CONDITION.
IF ANY OF THE FOLLOWING RISKS OCCUR, OUR BUSINESS FINANCIAL CONDITION
OR RESULTS OF OPERATIONS COULD BE MATERIALLY HARMED. IN SUCH CASE, THE TRADING
PRICE OF OUR COMMON STOCK COULD DECLINE, AND YOU MAY LOSE ALL OR PART OF YOUR
INVESTMENT.
THIS PROSPECTUS ALSO CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE
RISKS AND UNCERTAINTIES. OUR ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE
ANTICIPATED IN THESE FOREWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN FACTORS,
INCLUDING THE RISKS FACED BY US DESCRIBED BELOW AND ELSEWHERE IN THIS
PROSPECTUS.
IF OUR BUSINESS DOES NOT DEVELOP AS PLANNED IT IS LIKELY THAT INVESTORS
WILL LOSE THEIR MONEY.
OUR OPERATING HISTORY IS LIMITED AND OUR BUSINESS MODEL IS UNPROVEN
Because we have not yet begun operations, it is difficult to evaluate
our business or our prospects. Our web site development will be completed on or
around May 15, 2000 and we will begin beta testing it for reliability. We
anticipate launching the site on or around July 1, 2000. Our revenue and income
potential is unproven and our business model is still emerging. To date, we have
not earned any revenue from operations. Our historical financial information is
of limited value in projecting our future operating results because of our lack
of operating history and the emerging nature of our business model. We have lost
money since we began operations and, as of March 31, 2000, we had a loss of $
0.03 per share and a loss of $0.19 per share for 1999. We currently derive our
revenue for day-to-day operations from investment dollars. We plan to invest
heavily in sales, marketing, and advertising, infrastructure development, and
applications development. As a result, we expect that we will continue to lose
money through 2000. The Company may never achieve or sustain profitability.
WE DEPEND ON THE ADOPTION OF INTERNET SOLUTIONS
Our business model depends on the adoption of Internet solutions by
commercial users. The Internet may not prove to be a viable commercial
marketplace for a number of reasons, including:
- inadequate development of the necessary infrastructure for
communication speed, access and server reliability;
- security and confidentiality concerns;
- lack of development of complementary products, such as
high-speed modems and high-speed communication lines;
- implementation of competing technologies;
- delays in the development or adoption of new standards and
protocols required to handle increased levels of Internet
activity; and
- government regulation.
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We expect Internet use to grow in number of users and volume of
traffic. The Internet infrastructure may be unable to support the demands placed
on it by this continued growth. If these factors limit the acceptance or
effectiveness of Internet solutions, our business could suffer dramatically.
Growth in the demand for our applications and services depends on the
adoption of Internet solutions by automotive industry participants, which
requires the acceptance of a new way of conducting business and exchanging
information. The automotive industry participants, in particular, rely on
regional brick and mortar auctions to meet their liquidity needs. To realize the
benefits of our applications and services, automotive industry participants must
be willing to allow sensitive information such as credit card numbers and
personal preferences as to the types, make, models, and price ranges of vehicles
to be stored in our databases.
OUR BUSINESS IS AFFECTED BY RAPIDLY CHANGING TECHNOLOGIES
Automobile auctions, information exchange, and online transaction
processing is a relatively new and evolving market. The pace of change in our
market is rapid and we anticipate frequent new product introductions and
evolving industry standards. We may be unsuccessful in responding to
technological developments and changing customer needs in which case investor
capital may be lost. In addition, our application and service offerings may
become obsolete due to the adoption of new technologies or standards.
WE FACE SECURITY AND NETWORK RISKS
While we do not process the entire transaction for our customers, we
will be processing a 2.5% sales commission through credit card transactions via
the Internet. We retain confidential customer information in our processing
center. Therefore, it is critical that our facilities and infrastructure remain
secure and that our facilities and infrastructure are perceived by the
marketplace to be secure. Despite the implementation of security measures, our
infrastructure may be vulnerable to physical break-ins, computer viruses,
programming errors, attacks by third parties or similar disruptive problems. A
material security breach could damage our reputation or result in liability to
us.
In addition, we rely on the efficient operation of Internet connections
from customers to our systems. These connections, in turn, depend on the
efficient operation of Web browsers, Internet service providers and Internet
backbone service providers, all of which have had periodic operational problems
or experienced outages. Any system delays, failures or loss of data, whatever
the cause, could reduce customer satisfaction with our applications and services
and harm our business.
CHANGES IN THE AUTOMOTIVE INDUSTRY COULD AFFECT OUR BUSINESS
The automobile industry is highly subject to consumer spending which is
subject to political, economic, and regulatory influences. These factors affect
the purchasing practices and operation of both new and used auto dealerships,
and directly impact their purchasing habits. Any changes in consumer spending on
vehicles could directly and materially impact our activity with retail dealers.
Changes in current auto dealers' practices and operations could cause us to make
unplanned enhancements of applications or services, or result in delays or
cancellations of enhancements or developments of our applications and services.
If we are unable to keep our business in sync with the needs and circumstances
of the automobile industry generally, it is likely that investors will lose
their investment.
Many automobile retailers are consolidating to create dealerships with
greater market power. These dealerships may try to use their market power to
negotiate price reductions for our applications and services. If we were forced
to reduce our prices, our operating results would suffer. As the auto dealership
industry consolidates, competition for customers will become more intense and
the importance of acquiring each customer will become greater.
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GOVERNMENT REGULATION COULD AFFECT OUR BUSINESS
The retail auto industry is highly regulated and is subject to changing
political, economic, and regulatory influences. Federal and State legislatures
have periodically considered programs that would affect the retail auto
industry. These programs often contain proposals to increase governmental
involvement in auto sales or otherwise change the environment in which auto
industry participants operate. Auto industry participants may respond by
reducing their investment in the necessary hardware, software, and connectivity
that would allow them to access and utilize our applications and services. We do
not know what effect any proposals would have on our business.
Our business could become subject to government regulation. Laws and
regulations may be adopted with respect to the Internet or other on-line
services covering issues such as:
- - user privacy;
- - pricing
- - content;
- - copyrights;
- - distribution; and
- - characteristics and quality of products and services.
Moreover, the applicability to the Internet of existing laws in various
jurisdictions governing issues such as property ownership, licensing and
reporting requirements, licensing requirements for dealers, licensing
requirements for traditional auctions, reporting and licensing requirements for
brokering the sale of vehicles, licensing for shipping or transporting vehicles,
or brokering transportation services, sales and other taxes, libel and personal
privacy is uncertain and may take years to resolve.
OUR QUARTERLY OPERATING RESULTS MAY VARY
We expect that our quarterly revenue and operating results may
fluctuate as a result of a number of factors, including:
- - changes in our strategic relationships,
- - the cyclical nature of the automobile business,
- - future acquisitions;
- - our entry into new vehicle markets;
- - new customers;
- - new application and service offerings;
- - software defects, delays in development and other quality factors;
- - customer demand for our applications and services;
- - our ability to meet project milestones or customer expectations;
- - our mix of product sales, service revenues, and transaction commissions;
- - variability in demand for Internet-based solutions;
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- - changes within the automobile industry; and
- - seasonality of demand.
We expect to increase activities and spending in substantially all of
our operational areas. We base our expense levels in part upon our expectations
concerning future revenue and these expense levels are relatively fixed in the
short-term. If we have lower revenue, we may not be able to reduce our spending
in the short-term in response. Any shortfall in revenue would have a direct
impact on our results of operations. Fluctuations in our quarterly results could
affect the market price of our common stock in a manner unrelated to our
long-term operating performance. For these and other reasons, we may not meet
the earnings estimates of securities analysts or investors and our stock price
could suffer.
WE MAY FACE PRODUCT RELATED LIABILITES
While we, and our customers, test our applications, they may contain
defects or result in system failures. In addition, our applications and services
may experience problems in security, availability, scalability or other critical
features. These defects or problems could result in the loss of or delay in
generating revenue, loss of market share, failure to achieve market acceptance,
diversion of development resources, injury to our reputation or increased
insurance costs and/or subject the Company to suit in a civil court.
Many of our strategic relationships and services agreements involve
providing information technology services to our customers. If we fail to meet
our customers' expectations, our reputation could suffer and we could be liable
for damages. Finally, we could become liable if confidential information is
disclosed inappropriately.
Our user agreements limit our liability arising from our errors;
however, these provisions may not be enforceable and may not protect us from
liability. While we will plan to purchase general liability insurance that we
believe is adequate, including coverage for errors and omissions, we may not be
able to maintain this insurance on reasonable terms in the future. In addition,
our insurance may not be sufficient to cover large claims and our insurer could
disclaim coverage on claims. If we are liable for an uninsured or underinsured
claim or if our premiums increase significantly, our financial condition could
be materially harmed.
WE MAY NEED TO OBTAIN FUTURE CAPITAL
We expect that the money generated from this offering, combined with
our current cash resources, will be sufficient to meet our requirements for at
least the next twenty-four months. We will be facing the payment of $367,000.00
to Integrated Concepts, Inc. which is the remaining balance of a $1,500,000.00
obligation incurred for development and programming. If we are unsuccessful in
this offering, this debt could put the Company at risk financially. If this is
the case, we may be forced to seek out alternative financing which may include
debt or securities of another class, type or price. There can be no assurance
that this type of financing will be available to us or that it will be on terms
that make it practical.
However, we may raise additional financing to support expansion,
develop new or enhanced applications and services, respond to competitive
pressures, acquire complementary businesses or technologies or take advantage of
unanticipated opportunities. We may need to raise additional funds by selling
debt or equity securities, by entering into strategic relationships or through
other arrangements. We may be unable to raise any additional amounts on
reasonable terms when they are needed.
OUR COMMON STOCK PRICE MAY BE VOLATILE
You may not be able to resell your shares at or above the $19.00
offering price due to a number of factors, including:
- - the inability of GimmeaBid.com to development a public market in its common
shares;
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- - actual or anticipated quarterly variations in our operating results;
- - changes in expectations of future financial performance or changes in
estimates of securities analysts;
- - announcements of technological innovations;
- - announcements relating to strategic relationships;
- - customer relationship developments; and
- - conditions affecting the Internet or automobile industries, in general.
The trading price of our common stock may be volatile. The stock market
in general, and the market for technology and Internet-related companies in
particular, have experienced extreme volatility that often has been unrelated to
the operating performance of particular companies. These broad market and
industry fluctuations may adversely affect the trading price of our common
stock, regardless of our actual operating performance.
In the past, following periods of volatility in the market price of a
company's securities, securities class action litigation has often been
instituted. If this were to happen to GimmeaBid.com, litigation would be
expensive and would divert management's attention as well as create an
unanticipated expense which would directly impact any earnings.
WE DEPEND ON OUR KEY PERSONNEL
Our success will depend significantly on our senior management team and
other key employees. At the present time, we do not have key-man life insurance
on senior management. The loss of any member of senior management could lead to
an inability of the business of GimmeaBid.com to function and a loss of investor
money.
We need to attract, integrate, motivate and retain additional highly
skilled employees. In particular, we need to add two additional persons to our
team as quickly as possible and as soon as our budget makes this practical.
These additions will also increase our monthly operating expenses.
FUTURE SALES OF SHARES COULD AFFECT OUR STOCK PRICE
The market price for our common stock could fall dramatically if our
stockholders sell large amounts of our common stock in any public market that
may develop following this offering. These sales, or the possibility that these
sales may occur, could make it more difficult for us to sell equity or equity-
related securities in the future. After this offering, we will have outstanding
9,099,020 shares of common stock, based upon shares outstanding as of May 1,
2000.
OUR OFFICERS, DIRECTORS AND AFFILIATED ENTITIES WILL HAVE SIGNIFICANT CONTROL OF
THE COMPANY AND WILL BENEFIT FROM THE OFFERING
After this offering, our directors and management will own or control
approximately 75 % of our common stock. If these people act together, they will
be able to significantly influence the management and affairs of GimmeaBid.com
and will have the ability to control all matters requiring stockholder approval.
This concentration of ownership may have the effect of delaying, deferring, or
preventing an acquisition of GimmeaBid.com and may adversely affect the market
price of our common stock. Existing stockholders paid considerably less for
their shares than the amount to be paid by investors who purchase in this
offering. This offering may also create a public market for the resale of shares
held by existing investors, and substantially increase the market value of those
shares.
THE AUTO INDUSTRY MAY NOT ACCEPT OUR SOLUTIONS
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To be successful, we must attract a significant number of customers
throughout the auto industry. To date, the automobile industry has been
gradually accepting new information technology solutions. Electronic information
exchange and transaction processing by the auto industry is still developing.
Conversion from traditional methods to electronic information exchange may not
occur rapidly. Even if the conversion does occur as rapidly as we expect, auto
industry participants may use applications and services offered by others.
We believe that we must gain significant market share with our
applications and services before our competitors introduce alternative products,
applications or services with features similar to our current or proposed
offerings. Our business plan is based on our belief that the value and market
appeal of our solution will grow as the number of participants and the scope of
the Internet penetration increases. We may not achieve the critical mass of
users we believe is necessary to become successful. In addition, we expect to
generate a significant portion of our revenue from successfully completed
transactions. Consequently, any significant shortfall in the number of users or
transactions occurring over our platform would adversely affect our financial
results.
WE RELY ON STRATEGIC RELATIONSHIPS
In particular, we rely on a third party for our Internet hosting needs.
Therefore, we are subject to their reliability and their continued operations.
Should this party fail financially or become unable maintain a reliable network,
it could impair our service delivery and significantly impact the market price
of our shares. There can be no assurance that this or any other third party will
prove to be reliable or will not experience outages from time to time.
There can be no assurance that the necessary partnerships or
relationships can be formed with appropriate company's to provide the additional
products and services that the Company currently has planned. Even if these
partnerships can be forged, there can be no assurance that they can be completed
on terms that will allow the Company to realize any revenue or financial gains.
COMPETITION
Many of the companies with which the Company competes, or which are
expected to offer applications and services based on alternatives to the
Company's technologies have substantially greater financial resources, research
and development capabilities, sales and marketing staffs, and better developed
distribution channels than the Company. There can be no assurance that the
services and products that the Company offers will achieve sufficient quality,
functionality or cost effectiveness to compete with existing or future
alternatives. Furthermore, there can be no assurance that the Company's
competitors will not succeed in developing applications and services which are
more effective and lower cost than those offered by the Company. The Company
believes that its ability to compete depends on factors both within and outside
its control. The principal competitive factors affecting the market for the
Company's applications and services are the availability of the Company's
products and services; the quality, performance and functionality of the
service; the effectiveness of the Company in marketing and distributing both its
products and services; and price. There can be no assurance that the Company
will be successful in the face of increasing competition from new technologies,
products or services introduced by existing competitors and by new companies
entering the market.
DEPENDENCE ON THIRD PARTY TECHNOLOGY AND PRODUCTS
To develop its technology and services, the Company has incorporated
and will continue to incorporate technology developed by third parties. In
addition to all the risks associated with the development of complex
technologies, the Company has limited control over whether or when such third
party technologies will be developed or enhanced. Moreover, the Company has
limited control over whether or to what extent interests in such third parties
or third party technologies are acquired by companies with which the Company may
now or in the future compete. A third parties' failure or refusal, for any
reason, to timely develop, license or support the software technology, or the
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occurrence of errors in such technology, could prevent or delay introduction or
market acceptance, or continued maintenance and support, of the Company's
service, which could have a material adverse effect on the Company's business,
operating results and financial condition.
USE OF PROCEEDS
As of May 1, 2000, the Company has sufficient capital to meet its
operating requirements for the next 12 months. Should we raise less than the
full offering, we intend to scale down our budget significantly. In particular,
if we are only able to successfully complete 50% of this Offering, it is our
intention to significantly reduce our proposed advertising and marketing
schedule. While we feel this is a very important aspect to the company's growth,
we will still be able to sustain operations for approximately twenty-four months
but our growth rate will be significantly impacted. An expense that we feel is
of primary importance is the completion of our development costs which is our
Internet application. The completion of this application underpins the entire
company. If we are only able to complete some small fraction of the offering, we
feel we could sustain operations with the current resources for twelve months
but with little or no marketing and advertising budget. The Company might still
be able to seek out strategic partnerships and alliances on a commission basis
to meet the necessary marketing requirements, although they may prove to be
unreliable as well as unpredictable and in the capacity of a independent
contractor; the company would forfeit almost all control of its marketing
efforts. With the launch of the site on or around July 1, 2000, we expect to
begin realizing revenue which will significantly aid us in meeting our current
obligations.
We will not receive any proceeds from the sale of Shares offered by the
Selling Stockholders. We will receive up to $24,225,000, which is net of a 15%
commission if a broker-dealer is used to sell the offering and if all of the
1,500,000 common shares offered by us on a "best efforts" basis at $19.00 per
share are purchased, and we intend to use any proceeds from such sale for the
approximated expenses set forth below:
Sales & Marketing Expense
$ 6,500,000.00
Advertising
Direct Mail $ 1,500,000.00
Entertainment $ 60,000.00
Literature $ 200,000.00
Promotions $ 2,770,000.00
Sales Staff $ 250,000.00
Seminars $ 3,500,000.00
Support Staff $ 105,000.00
Trade Shows $ 500,000.00
Travel $ 200,000.00
-------------------
Total Sales & Marketing $ 15,585,000.00
-------------------
General & Administrative Expenses
Accounting Services $ 20,000.00
Connectivity $ 10,800.00
Credit Card Processing $ 585,000.00
Customer Support $ 9,000.00
Entertainment $ 25,000.00
Hosting Fees $ 48,000.00
Legal Services $ 30,000.00
Long Distance $ 8,000.00
Management Salaries $ 215,000.00
Office Rent $ 22,200.00
Office Supplies $ 5,000.00
Payroll Tax $ 18,598.00
Phone $ 5,000.00
-------------------
Total G & A Expense $ 1,001,598.00
-------------------
Research & Development Expenses
Application Development $ 367,000.00
Hardware & Equipment $ 50,000.00
-------------------
Total R & D Expense $ 417,000.00
-------------------
12
<PAGE>
Offering Costs
Accounting $ 10,000.00
Attorney fees $ 25,000.00
NASDAQ Application $ 5,000.00
Printing Expense - Final Prospectus $ 5,000.00
Printing Expense - Red
Herring $ 5,000.00
Standard & Poor's Application $ 8,500.00
SEC registration $ 13,543.00
Transfer Agent $ 15,000.00
-------------------
Total Registration/Filing fees $ 87,043.00
-------------------
Working Capital $ 7,134,359.00
===================
Total Gross Proceeds $ 24,225,000.00
===================
DETERMINATION OF OFFERING PRICE
The offering price of the selling stockholders' shares was calculated
pursuant to rule 457 (c) of Regulation C with a good faith estimate that the
price will be the same as the price GimmeaBid.com is offering its 1,500,000
shares for.
The offering price of the 1,500,000 shares being offered on a "best
efforts" basis has been determined primarily by the capital requirements of the
Company and has no relationship to any established criteria of value, such as
book value or earnings per share. Additionally, because we have no significant
operating history and have not generated any revenues to date, the price of the
Shares is not based on past earnings, nor is the price of the Shares indicative
of current market value for the assets owned by the Company. No valuation or
appraisal has been prepared for the business and potential business expansion of
the Company. Prior to this Offering, there has been no public market for the
Common shares of GimmeaBid.com, nor is it certain a public market will develop
after the offering.
DILUTION
On March 31, 2000, GimmeaBid.com had a net book value of $1,180,874 or
$0.16 per share (based on 7,612,120 common shares outstanding). The net tangible
book value per share is equal to GimmeBid.com's total tangible assets, less its
total liabilities and divided by its total number of shares of common stock
outstanding. After giving effect to the sale of the shares at the public
offering price of $19.00 per share after the application of the estimated net
offering proceeds, the net tangible book value of GimmaBid.com, as of March 31,
2000, would have been $25,405,874 or $2.79 per share. This represents an
immediate increase in net tangible book value of $18.84 per share attributable
to new investors purchasing shares in this offering. The following table
illustrates the per share dilution in net tangible book value per share to new
investors:
Public offering price per unit $19.00
Net tangible book value per share
As of March 31, 2000 $ 0.16
Increase per share attributed to
Investors in this Offering $18.84
13
<PAGE>
Net tangible book value per share
As of March 31, 2000, after this
Offering $ 2.79
Net tangible book value dilution
Per share to new investors $16.21
The information set forth above regarding dilution assumes the sale of
all shares offered. If less than all shares offered are purchased, those who do
invest in the offering will undergo even greater dilution of their investment
dollar than the amounts stated. The 1,200,000 shares being offered by the
selling stockholders are outstanding shares of common stock and, therefore, do
not contribute to dilution.
SELLING SECURITY HOLDERS
The following table sets forth the number of common shares which may be
offered for sale from time to time by the selling security holders. The shares
offered for sale constitute all of the shares known to GimmeaBid.com to be
beneficially owned by the selling security holders.
Selling Stockholders Shares
-------------------- ------
Bartok, Marjorie & Robert 2,000
Bimson, John 500
Bimson, Margaret 1,000
Bimson, Steve 500
Brown, Bruce J. 1,200
Brown, Sylvia Ann 200
Brown, Thasunda 200
Bryant, Ronald R. 2,000
Bulsei, Paul 200
Campbell, Delaine 100
Campbell, Michael 200
Cannaday, Kim & Deborah 100
Casey, James G. 12,193
Castro & Davis, L.L.P.(1) 2,427
Castro, Isaac M. (1) 2,000
Catambay Diversified Services, Inc. 5,000
Catambay, Judy 1,000
Catambay, William 4,000
Catambay, William & Ruthann Reese 5,000
Corgliano, Pat 200
Cox, James Allen 1,500
Crowell, John (2) 10,000
Darden, Robert L. 1,000
Daves, Edward B. 1,000
Davidson, Corbett E. & Billye A. 200
Davis, Jeffrey Scott & Wendy Cheryl (1) 1,000
Davis, Renee P. 2,000
Day, Krista 300
Dodd, Ava (3) 4,000
Dodson, Carolyn 300
Efurd, Richard 3,300
Erskine, Louis G. & Julie L. 200
Evans, Kimberly 200
Fidelity Transfer Company (4) 3,000
Friendstein, Laura L. 500
Geeslin, David G. 20,000
Glass, B. J. 1,000
14
<PAGE>
Glazer, Marcus J. 1,000
Goza, Frank D. 1,500
Grau, Ray 200
Gray, Nancy 100
Hackler, Cecil W. 200
Halland, Alice 1,000
Harris, John R. 2,770
Henrie, Paula (5) 10,000
Herrinton, Lawrence D. 200
Hobson, Phillip R. 2,000
Hobson, Phillip Trust 72,000
Holt, Fred 200
Howard, Tom 100
Hughes, Barbara 200
Image Is Everything% Gilda Cohen 416
Integrated Concepts, Inc. (6) 200,000
Johnson, Tim & Cynthia 18,000
Jolla, Monica 150
Jones, Delbert 72,000
Jones, Delaine 200
Jones, Kenneth 72,000
Jones, Rodney E. 4,000
Kauffmann, Adolph F. & Shirly A. 500
Kerry, Connie (7) 2,000
Landis, Kevin 290
Laux, Edward E. 1,000
Lavdas, Georgia 300
Lien, Martha E. 300
Line, John W. 1,000
Longstaff, Richard J. 1,000
Martin, Charles T. 1,000
Metalla Family Trust (8) 10,000
Mock, R.W. & Bivra J. 1,000
Montemayor, Enfrain 1,000
Neill, Jon % Jyrographix 700
Neilsen, Roberta R. & Grant E. 1,000
Nelson, Karan A. 200
Oakley, Sundra N. 200
O'Neill, Gerald T 800
Patel, Mahipat M. & Rekha M 500
Peters, Ellen E. 1,000
Porter, Rufus C. 1,000
Prestwood, Andrew 100
Price, John L. & Gayla S. 430
Prober, Jack 3,000
Purdon, Kevin E. 1,000
Pyle Machine Company, Inc. 1,000
Reddy, Brian 1,280
Reddy, John J. & Kathryn M. 1,000
Reed, Lisa 4,000
15
<PAGE>
Reese, Ruthann 1,000
Richardson, Thomas W. 1,000
Ruffin, Danny J. 100
Scott, Paul % Jyrographix 700
Sexton, Joseph Edward & Susan B (9) 400
Shaffer, Jeff N. & Terri L. 500
Siebert, Harvey E. 1,000
Simmons, Kurt 1,000
Skaar, Lance D 100
Smith, Jack & Betty Bell 1,500
Smith, Ricky L. & Krystal G. 200
Smith, Shawn 1,340
Stark, Marie B. 1,000
Stark, Richard L. 1,000
Steel, Betty J. & Donald L. 400
Stephens Specialties, Inc. % Stephen Johns (10) 954
Stephens, Dewey D. 200
Taylor, Erika 100
Taylor, Larry 200
Taylor, Ruth 200
Thomas, William M 3,400
Thomason, A. A. 200
Thurman Larry 8,000
Tiller, Bobby F. Jr. & Amy J. 3,000
Tolliver, Will A. 500
Wallace, Debbie 3,000
Wegener, R. Blake 2,000
Wehrenberg, Gloria I. 200
Wehrenberg, Harold R. Tr. Harold TTEE 400
Whiting, Bill 660
Wiesehan, Janet E. 2,000
Williams Chrysler Plymouth, Inc. 1,000
Williamson, Ralph Charles 1,600
Wilson, Carolyn S. 500
Wilson, Dink 200
Wood, Ann (11) 143,273
Wood, Charles (12) 143,272
Wood, Floyd (13) 3,000
Wood, Michael (14) 286,545
------------
Total Shares 1,200,000
<PAGE>
(1) The firm of Castro & Davis, L.L.P. is the Company's legal counsel. Mr.
Isaac Castro and Jeffrey Davis are the partners of Castro & Davis
L.L.P.
(2) John Crowell currently serves in the capacity of Chief Technical
Officer.
(3) Mrs. Ava Dodd is a sister of Charles Wood, our Vice-President.
(4) Fidelity Transfer Company is the Company's Transfer Agent.
(5) Mrs. Paula Henrie is the wife of our securities attorney, Mr. Gary
Henrie.
(6) Integrated Concepts, Inc. is the Company's technology developer & host.
(7) Mrs. Connie Kerry is also a sister of Charles Wood, our Vice-President.
(8) Dr. Metalla is our Chief Technical Advisor and is in charge of the
Company's technology development.
(9) Joseph Sexton serves on our Advisory Board in the capacity of Sales &
Marketing advisor.
16
<PAGE>
(10) Stephen Johns or Stephens Specialties is the Company's accountant and
is in charge of the day-to-day bookkeeping.
(11) Ann Wood is the present and acting Secretary of the Corporation and a
Director. She is also the wife of Charles Wood.
(12) Charles Wood is the current Vice-President of the Corporation and a
Director and husband of Ann Wood.
(13) Floyd Wood is a brother to Charles Wood, our Vice-President.
(14) Michael Wood is the present President and CEO and serves as the
Chairman of the Board and is the son of Charles and Ann Wood.
PLAN OF DISTRIBUTION
GimmeaBid.com is offering 1,500,000 shares through its officers and
directors on a "best-efforts" basis at a purchase price of $ 19 per share.
GimmeaBid.com is managing the offering without any underwriter. The shares will
be offered and sold by GimmeaBid.com's officers and directors who will receive
no sales commissions or other compensation, except for reimbursement of expenses
actually incurred on behalf of GimmeaBid.com for such activities. In connection
with their efforts, they will rely on the safe harbor provisions of Rule 3a4-1
of the Securities and Exchange Act of 1934 (the "1934 Act). Generally speaking,
Rule 314-1 provides an exemption from the broker/dealer registration
requirements of the 1934 Act for associated persons of an issuer. There is no
minimum offering; therefore all subscriptions will be paid directly to
GimmeaBid.com upon receipt. No one, including GimmeaBid.com has made any
commitment to purchase any or all of the shares. Rather, the officers and
directors will use their best efforts to find purchasers for the shares.
GimmeaBid.com cannot state how many shares will be sold.
GimmeaBid.com anticipates selling the shares to persons whom it
believes may be interested or who have contacted GimmeaBid.com with interest in
purchasing the securities. GimmeaBid.com may sell shares to such persons if they
reside in a state in which the shares legally may be sold and in which
GimmeaBid.com is permitted to sell the shares. GimmeaBid.com is not obligated to
sell shares to any such persons.
GimmeaBid.com has established no minimum offering amount and no escrow
of investor money pending a certain minimum number of shares being sold. Each
subscription for shares in this offering that is accepted by GimmeaBid.com will
be credited immediately to the cash accounts of GimmeaBid.com and such investor
funds may be spent by GimmeaBid.com without any waiting period or other
contingency.
GimmeaBid.com reserves the right to reject any subscription in full or
in part and to terminate the offering at any time. Officers, directors present
stockholders of GimmeaBid.com and persons associated with them may be sold some
of the shares. However, officers, directors, and their affiliates shall not be
permitted to purchase more than 20% of the units sold hereunder and such
purchases will be held for investment and not for resale. In addition, no
proceeds from this offering will be used to finance any such purchases.
No person has been authorized to give any information or to make any
representations in connection with this offering other than those contained in
this prospectus and if given or made, that information or representation must
not be relied on as having been authorized by GimmeaBid.com. This prospectus is
not an offer to sell or a solicitation of an offer to buy any of the securities
it offers to any person in any jurisdiction in which that offer or solicitation
is unlawful. Neither the delivery of this prospectus nor any sale hereunder
shall under any circumstances, create any implication that the information in
this prospectus is correct as of any date later than the date of this
prospectus.
Purchasers of shares either in this offering or in any subsequent
trading market that may develop must be residents of states in which the
securities are registered or exempt from registration. Some of the exemptions
are self-executing, that is to say that there are no notice or filing
requirements, and compliance with the conditions of the exemption render the
exemption applicable.
17
<PAGE>
The Selling stockholders may from time to time sell all or a portion of
their shares in the over-the-counter market, or on any other national securities
exchange on which the common stock is or becomes listed or traded, in negotiated
transactions or otherwise, at prices then prevailing or related to the then
current market price or at negotiated prices. The Shares will not be sold in an
underwritten public offering. The Shares may be sold directly or through brokers
or dealers. The methods by which the Shares may be sold include: (a) a block
trade (which may involve crosses) in which the broker or dealer so engaged will
attempt to sell the securities as agent but may position and resell a portion of
the block as principal to facilitate the transaction; (b) purchases by a broker
or dealer as principal and resale by such broker or dealer for its account
pursuant to this Prospectus; (c) ordinary brokerage transactions and
transactions in which the broker solicits purchasers; and (d) privately selling
stockholders may arrange for other brokers or dealers to participate. Brokers or
dealers may receive commissions or discounts from selling stockholders (or, if
any such broker-dealer acts as agent for the purchaser of such shares, from such
purchaser) in amounts to be negotiated which are not expected to exceed those
customary in the types of transactions involved. Broker-dealers may agree with
the Selling Stockholders to sell a specified number of such shares at a
stipulated price per share, and, to the extent such Broker-Dealer is unable to
do so acting as agent for a selling stockholder, to purchase as principal any
unsold shares at the price required to fulfill the broker-dealer commitment to
such Selling Stockholder. Broker-dealers who acquire shares as principal may
thereafter resell such shares from time to time in transactions which may
involve crosses and block transactions and sales to and through other
broker-dealers (including transactions of the nature described above) in the
over-the-counter market or otherwise at prices and on terms prevailing at the
time of sale, at prices then related to the then-current market price or in
negotiated transactions and`, in connection with such re-sales, may pay or
receive from the purchasers of such shares commissions as described above.
In connection with the distribution of the Shares, the Selling
Stockholders may enter into hedging transactions with broker-dealers. In
connection with such transactions, broker-dealers may engage in short sales of
the shares in the course of hedging the positions they assume with the selling
stockholders. The selling stockholders may also sell the shares short and
redeliver the shares to close out the short positions. The selling stockholders
may also loan or pledge the shares to a broker-dealer and the broker-dealer may
sell the shares so loaned or upon a default the broker-dealer may effect sales
of the pledged shares. In addition to the foregoing, the selling stockholders
may enter into, from time to time, other types of hedging transactions.
The selling stockholders and any broker-dealers participating in the
distribution of the Shares may be deemed to be "underwriters" within the meaning
of Section 2(11) of the 1933 Act and any profit on the sale of shares by the
selling stockholders and any commissions or discounts given to any such
broker-dealer may be deemed to be underwriting commissions or discounts under
the 1933 Act. The shares may also be sold pursuant to Rule 144 under the 1933
Act beginning one year after the shares were issued.
We have filed the registration statement, of which this prospectus
forms a part, with respect to the sale of the shares. There can be no assurance
that the Selling Stockholders will sell any or all of the shares they desire to
sell, or that we will sell any of the share we desire to sell.
Under the Securities Exchange Act of 1934 ("Exchange Act") and the
regulations thereunder, any person engaged in a distribution of the shares
offered by this Prospectus may not simultaneously engage in market making
activities with respect to the common stock of the Company during the applicable
"cooling off" periods prior to the commencement of such distribution. In
addition, and without limiting the foregoing, the selling Stockholders will be
subject to applicable provisions of the Exchange Act and the rules and
regulations thereunder, which provisions may limit the timing of purchases and
sales of common stock by the Selling Stockholders. We will pay all of the
expenses incident to the offering and sale of the Shares, other than
commissions, discounts and fees of underwriters, dealers, or agents.
We have advised the selling stockholders that, during such time as they
may be engaged in a distribution of any of the shares we are registering by this
Registration Statement, they are required to comply with Regulation M
promulgated under the Securities Exchange Act of 1934. In general, Regulation M
precludes any Selling Stockholder, any affiliated purchasers and any
broker-dealer or other person who participates in such distribution from bidding
for or purchasing, or attempting to induce any person to bid for or purchase,
any security which is the subject of the distribution until the entire
distribution is complete. Regulation M defines a "distribution" as an offering
of securities that is distinguished from ordinary trading activities by the
magnitude of the offering and the presence of special selling efforts and
selling methods. Regulation M also defines a "distribution participant" as an
underwriter, prospective underwriter, broker, dealer, or other person who has
agreed to participate or who is participating in a distribution.
18
<PAGE>
Regulation M prohibits any bids or purchases made in order to stabilize
the price of a security in connection with the distribution of that security,
except as specifically permitted by Rule 104 of Regulation M. These stabilizing
transactions may cause the price of the common stock to be higher than it would
otherwise be in the absence of those transactions. We have advised the Selling
Stockholders that stabilizing transactions permitted by Regulation M allow bids
to purchase our common stock so long as the stabilizing bids do not exceed a
specified maximum, and that Regulation M specifically prohibits stabilizing that
is the result of fraudulent, manipulative, or deceptive practices. Selling
Stockholders and distribution participants will be required to consult with
their own legal counsel to ensure compliance with Regulation M.
It should be noted that notwithstanding any of the foregoing discussion
in this section on plan of distribution, at the present time the common shares
of GimmeaBid.com are not listed on any exchange or quoting service nor does any
public market exist for the shares. It remains uncertain at the present time
whether this offering will create a public market for the common shares.
LEGAL PROCEEDINGS
As of the date of this prospectus, there is no pending or threatened
litigation involving GimmeaBid.com.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS
The executive officers, directors and key employees of the Company as
of May 1, 2000 are as follows:
<TABLE>
<CAPTION>
Name Age Positions
---- --- ---------
<S> <C> <C>
J. Michael Wood (3).......................31 President, CEO, and Chairman
Charles Wood (3)..........................55 Vice-President
Ann Wood (1) (3)..........................59 Corporate Secretary
Maegan Anders (1) (3).....................22 CFO & Treasurer
John Crowell (1)..........................50 Chief Technical Officer
Advisory Board
Erik Mettala (2)..........................50 Chief Technical Advisor
Kent Bimson (2)...........................51 Technical Advisor
John Harris (2)...........................49 Operations Advisor
Joe Sexton (2)............................41 Sales & Marketing Advisor
</TABLE>
(1) These officers and directors currently serve without compensation but
are stockholders.
(2) All members of the advisory board serve without compensation but are
also stockholders.
(3) All of the current officers and directors of the Company are family
members with the exception of Mr. John Crowell.
The current Board of Directors and Officers have served in the same
capacity since the inception of the Company and were recently confirmed for an
additional term of one year at the annual stockholders meeting on April 3, 2000.
J. Michael Wood - President
Mr. Wood is a former securities broker who was most recently employed
with Merrill Lynch. Prior to his employment with Merrill Lynch, he was
a financial advisor with Investment Management & Research from 1998 to
1996. He was a financial advisor with Advantage Capital Corporation
from 1994 to 1995. Mr. Wood is a graduate of Abilene Christian
University.
Charles Wood - Vice-President
Mr. Wood is the former owner of Wood's Auto, Trucks, & Trailers where
he was the owner of a used auto dealership in Abilene and Brownwood,
Texas from 1993 to 1998. Mr. Wood has had approximately 30 years of
experience in all aspects of the used auto industry.
19
<PAGE>
Ann Wood - Corporate Secretary
The Company's Corporate Secretary, Ann Wood serves has approximately
thirty years of senior level experience in marketing and sales. She was
the Director of Membership for Sam's Wholesale Clubs where she managed
approximately forty employees. She was responsible for writing,
designing, and implementing the marketing plan for Sam's Clubs. During
her employment with Sam's, she was the top sales person. Mrs. Wood has
also been the owner of her own auto dealership, and has substantial
experience in managing all aspects of such an enterprise.
Maegan Anders - Treasurer & Chief Financial Officer
Ms. Anders was most recently employed by a private investment firm that
manages approximately $2 Billion in assets. Ms. Anders is a recent
graduate of Abilene Christian University where she received a bachelors
of science in finance. She also had the honor of being the top graduate
of the college of business and was awarded the University Scholars
Medal.
John Crowell - Chief Technical Officer
Mr. Crowell is the previous owner and founder of a national chain of
computer repair/upgrade/training stores named Dr. Computer. Prior to
his development of Dr. Computer, he built and sold American Employee
Benefits Association, an insurance company. He served as the Chief
Financial Officer and Chief Technical Officer of World Television
Networking from 1991-1995. From 1995-1996, Mr. Crowell developed and
launched d'Essence, a perfume manufacturing and distribution company.
Mr. Crowell is a Certified Public Accountant and a CDP. In 1998, he
chose to retire, but has come out of retirement to devote his time and
efforts to the marketing of GimmeaBid.com.
Advisory Board
In addition to the current Board of Directors, it is the policy of the
Company to seek advice and counsel of highly qualified business and industry
professionals and experts to assist the management team to make appropriate
decisions and choose the most effective course of action. These individuals are
not responsible for management decisions nor are they compensated for their
participation on the Company's advisory board. The current Advisory Board is
comprised of the following individuals:
Erik Mettala, PhD. - Chief Technical Advisor
Dr. Mettala is presently the Chief Technical Advisor to GimmeaBid.com
and also serves as the Chief Technical Officer to Integrated Concepts,
Inc. in Dallas, Texas. Prior to his employment with ICI, he served as
Vice-President of Advanced Programs and Chief Technology Officer of
Microelectronics and Computer Technology Corporation in Austin, Texas
from 1995 to 1998. From 1993 to 1995, he was the Associate Dean of
Engineering for Research and Professor of Computer Science and
Engineering at the University of Texas at Arlington. From 1991 to 1993,
he served as Deputy Director of Software and Intelligent Systems
Technology Office at the Defense Advanced Research Projects Agency
(DARPA) in Arlington, Virginia. During his tenure at DARPA, he served
as a program manager for Software Engineering Environments and Tools,
Persistent Object Bases (which supported the development of CORBA),
Manufacturing Automation and Design Engineering (which supported the
development of Mosaic, S-HTTP, AND HTTP-S), and Domain Specific
Software Architectures, which supported the development of TCP/IP.
During his tenure with the Defense Department, he received top secret
security clearance. Dr. Mettala has received a number of patents as
well as being printed in numerous publications. He brings more than 25
years of experience in Information Technology to the Company. Dr.
Mettala has an undergraduate degree in marketing and transportation
administration from Michigan State University. He has a Master of
Science degree in Computer science and management system engineering
from Central Texas University, though most of his coursework was
completed at the University of California in Los Angeles. Dr. Mettala
also earned a Ph.D. in industrial and management systems, in
conjunction with Computer Science from Penn State University.
20
<PAGE>
Kent Bimson - Technical Advisor
Dr. Bimson is currently Executive Vice President of ICI, focused on
developing a Knowledge Integration Tool that will support integration
of heterogeneous enterprise databases and presentation of this
integrated information over the web. Dr. Bimson established the Florida
office for ICI in Cape Canaveral, Florida, to support local projects
and Managed Electronic Commerce business. Previously, Dr. Bimson served
as Assistant Vice President of Science Applications International
Corporation, where he was Program Manager on the Launch Operations and
Support Contract at Cape Canaveral Air Station in Florida. He also
served as the Director of Information Technology, responsible for
developing a Spaceport Intranet Information System (SIIS) for the US
Air Force. SIIS features web-enabled databases, streaming video,
on-line drawings and schematics, documents, and ScreenCams. Dr. Bimson
oversaw the Integrated Resource Management (IRM) capability, which
integrates many of the Cape's heterogeneous databases into a common
enterprise model using CORBA technology. IRM provides stakeholders with
an integrated view of the enterprise over the SIIS using a Java
browser, including access to integrated data, documents, databases,
videos and drawings. Dr. Bimson is a facilitator for Stephen Covey's "4
Roles of Leadership" workshop and helped lead this training on the 500
person LOSC contract.
John Harris - Operations Advisor
Chief Operating Officer of Airtech since February 2000, Member of the
Board of Directors since November 1999. Member of the Board of Advisors
for GimmeaBid.com effective December, 1999. Chief Administrative
Officer of Integrated Concepts, Inc. from June 1998 to October 1999.
Chief Executive Officer of PreventCo Inc. from June 1996 to May 1998.
Vice President and Medical Director of Airtech International Group,
Inc. from May, 1994 to May 1996. Prior to that, Mr. Harris spent twenty
years in various senior management capacities, and as an international
consultant, in the field of acute medical/surgical hospital
administration for leading hospital management companies such as
Hospital Corporation of America and Hospital Management Professionals.
Bachelors of Science from Oregon State University. Masters of Hospital
Administration from University of Alabama in Birmingham 1975.
Joe Sexton - Sales & Marketing Advisor
Mr. Sexton is a former Senior Divisional Vice-President of Computer
Associates for Texas, Oklahoma and Arkansas. Mr. Sexton was one of the
most successful sales executives in CA's history, and managed a sales
quota in excess of $300 million per year.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
<TABLE>
<CAPTION>
Title of Class Name and Address of Owner Amount and Nature Percent of Class
of Owner
- ---------------------------- -------------------------------- -------------------- --------------------------
<S> <C> <C> <C>
Common Stock Michael Wood Approximately 40% (1)
174-G World Trade Center 3,005,000 shares Approximately 33% (2)
P. O. Box 420132
Dallas, Texas 75342
Common Stock Charles Wood Approximately 10%(1)
174-G World Trade Center 796,471 shares(3) Approximately 8.7% (2)
P.O. Box 420132
Dallas, Texas 75342
Common Stock Ann Wood Approximately 40%(1)
174-G World Trade Center 3,000,000 shares(4) Approximately 33% (2)
P. O. Box 420132
Dallas, Texas 75342
Common Stock John Crowell 410,000 shares (5) Less than 1% (1)
174-G World Trade Center Approximately 4.5% (2)
P. O. Box 420132
Dallas, Texas 75342
Common Stock All officers and directors as 7,211,471(6) Approximately 90%(1)
a group (five) Approximately 76%(2)
</TABLE>
(1) Represents ownership % prior to this offering.
(2) Represents ownership % after this offering, assuming that all of the
shares offered are purchased.
(3) Total includes beneficial ownership of 3,000,000 shares owned by his
spouse, Ann Wood.
(4) Total includes beneficial ownership of 796,471 shares owned by her
spouse, Charles Wood.
(5) Total includes the options described in footnote (5) immediately above.
DESCRIPTION OF THE SECURITIES OF GIMMEABID.COM
Common Stock
The authorized common stock of GimmeaBid.com consists of 10,000,000
shares, with each share having a par value of $0.001 (the "common stock" or
"common shares" or "shares"), of which 7,599,020 shares were issued and
outstanding on May 1, 2000. There were 462 holders of common stock as of May 1,
2000.
Holders of common stock are entitled to one vote per share on all
matters submitted to a vote of stockholders of GimmeaBid.com and may not
cumulate votes for the election of directors. Holders of the common stock have
the right to receive dividends when, as, and if declared by the board of
directors from funds legally available therefore. Upon liquidation of
GimmeaBid.com, holders of the common stock are entitled to share pro rata in any
assets available for distribution to stockholders after payment of all
obligations of GimmeaBid.com. Holders of common stock have no preemptive rights
and have no rights to convert their common stock into any other securities. All
shares of common stock have equal rights and preferences. All shares of common
stock now outstanding are fully paid for and non-assessable.
GimmeaBid.com has never paid a cash dividend on the common stock.
GimmeaBid.com currently intends to retain all earnings, if any, to increase the
capital of GimmeaBid.com to effect planned development activities and to pay
dividends only when it is prudent to do so and GimmeaBid.com's performance
justifies such action. Holders of common stock are entitled to receive dividends
out of funds legally available therefore when, as and if declared by
GimmeaBid.com's board of directors.
OTHER SECURITIES
There are currently no preferred shares or other securities issued,
outstanding, or authorized.
TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for the common stock will be:
Fidelity Transfer Company
1800 S. W. Temple
Suite 301
Salt Lake City, Utah 84115
The Company's Registered Agent is:
CT Corporation Systems
1717 N. Akard Street
Dallas, Texas 75201
21
<PAGE>
INTEREST OF NAMED EXPERTS AND COUNSEL
No "expert" as that term is defined pursuant to section 228.509(a) of
Regulation S-B, or GimmeaBid.com's counsel as that term is defined pursuant to
section 228.509 (b) of Regulation S-B was hired on a contingent basis, or will
receive a direct or indirect interest in GimmeaBid.com through the offering or
was a promoter, underwriter, voting trustee, director, officer, or employee of
GimmeaBid.com at any time prior to the filing of this registration statement,
however, Paula Henrie, the spouse of Gary R. Henrie, securities counsel to
GimmeaBid.com is the holder of 10,000 common shares.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
GimmeaBid.com, Inc.'s articles of incorporation provide that
GimmeaBid.com will indemnify an officer, director, or former officer or
director, to the full extent permitted by law. This could include
indemnification for liabilities under securities laws enacted for stockholder
protection.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the small business issuer pursuant to the foregoing provisions, or
otherwise, the small business issuer has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the small business issuer of expenses incurred or paid by a director, officer or
controlling person of the small business issuer in the successful defense of any
action, suit or proceeding) is asserted by such director, officer, or
controlling person in connection with the securities being registered, the small
business issuer will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
DESCRIPTION OF BUSINESS
History
GimmeaBid.com was incorporated on May 15, 1986, pursuant to the laws of
the state of Delaware under the name Life Systems International, Inc. On July
17, 1990, the name was changed to Mesquite Country, Inc. to reflect the business
being conducted by the company of harvesting and selling mesquite wood. In 1992
the company discontinued its operations and in 1993 sold all of its operating
assets. Some of the assets were sold at auction for the benefit of creditors.
The corporation then lay dormant from 1993 until 1998 without assets or business
activity.
In December of 1998, the controlling stockholders Michael and Charles
Wood decided to operate a new business within the company and took the steps
necessary to revitalize the corporation. On June 16, 1999, the name of the
company was changed to GimmeaBid.com. The business purpose of GimmeaBid.com is
to maintain an on-line trading hub on the Internet for business to business
e-commerce. GimmeaBid.com's initial focus is providing a dealer to dealer
auction for used vehicles.
Business
The Internet has proven itself as an effective and efficient medium for
auctioning goods across the U.S. marketplace. GimmeaBid.com has acquired the
hardware and developed the software necessary to serve as an Internet auction
site. GimmeaBid.com believes it will be the first to apply the power of the
Internet to the auction market between auto dealers for used vehicles.
In 1999, a total of more than 40 million used vehicles were sold in the
U.S. representing 71% of all vehicle sales in the U.S. A function central to the
used vehicle industry is the auction of vehicles between dealers. Many new car
dealers take used vehicles in on trade and yet do not market the used vehicles
themselves. Used car dealers need a constant supply of inventory. Used car
dealers are often looking for a specific type of vehicle to meet a particular
purchase request. Until now, the wholesale auto trade between dealers to satisfy
the needs described above has been met by physical auto auction sites
established around the country. Some of the larger actions trade as many as
5,000 vehicles per week. It has ever the lifestyle of used auto dealers to spend
22
<PAGE>
a significant amount of business and personal time traveling and attending auto
auctions to acquire inventory. Included in the cost of acquiring used vehicles,
in addition to the expenses of time and travel, is the fee charged by the
auction of usually ranging from 1% to 5% of the vehicle's selling price not
including buyer fees, "PO" fees, and other related fees and charges.
Not only has the Internet proven itself as a viable mechanism for the
auctioning of goods between two or more biding parties, it has also proven
itself as a selling tool for automobiles. In 1999, Internet based sales of both
new and used vehicles to the public reached 1,500,000 units.
As has happened in other industries, it is only natural that the
Internet will now supply the tools to transform the business to business used
vehicle auction format to a more efficient electronic format. From a computer
terminal at home or office, a used car dealer will instantly be able to
determine vehicles available in the market and to bid on any of those vehicles.
GimmeaBid.com will charge a 2.5% sales commission on all transactions which
equals approximately one-half that charged by the brick and mortar auction
sites. By capturing 1% of the market, GimmeaBid.com expects to be profitable in
its first year of operations. GimmeaBid.com's target date for commencing live
trading between dealers is July 1, 2000.
Just as the Internet has proven effective as an auction hub and as a
market medium for vehicles, the Internet has proven effective as a new type of
intermediary that is emerging to facilitate business-to-business e-commerce.
These new intermediaries are often referred to as "Vortexes", "Butterfly
Markets", "Net Market Makers", or even "Digital Marketplaces". The Company will
create significant value by aggregating buyers and sellers, creating marketplace
liquidity, and driving down traditional transaction costs. Buyers will benefit
significantly by having the nations used vehicle inventory at their fingertips,
giving them more choices, lower inventory requirements, and driving down
acquisition costs both in terms of time and money expended. Sellers benefit
significantly by having access to a larger pool of buyers than has ever been
available thereby increasing their liquidity significantly. Accordingly, we
expect GimmeaBid.com's services to be accepted into the marketplace.
Market
The market for used auto auctions is comprised of approximated 82,000
dealerships of which approximately 60,000 are used dealers. There is also a
significant market for used vehicles from fleets, off-lease vehicles, program
cars, finance companies, banks, and insurance companies, along with various
government and municipal vehicles.
Used Vehicles Market
<TABLE>
<CAPTION>
Volume Average Value
(000) Price ($Billions)
------ ------- -----------
<S> <C> <C> <C>
Franchised Dealers 15,920 $12,150 $ 193
Independent Dealers 13,650 $ 7,172 $ 98
Casual Sales by Individuals 10,660 $ 4,195 $ 45
------ ------- -----
Totals 40,230 $ 8,353 $ 336
</TABLE>
In a recent dealer survey, 56% of franchised dealers and 43% of
independent dealers stated that they were comfortable using the Internet, which
supports the growing use of this medium at both the wholesale and retail levels.
Competition
While we believe that we will be first to market with this concept, we
also feel certain that competition will arise given the ongoing expansion of
Internet applications. The vehicle auction market has been dominated by three
major companies, two of which are in the process of merging which will give them
approximately a 60% market share. We are certain that if this concept becomes
viable, the major competitors will develop and launch their own individual
applications.
23
<PAGE>
Patents and Trademarks
The Company does not, at the present time, own any patents but has
applied to trademark "GimmeaBid.com".
Government Regulations
While the company is not regulated nor required to seek any approvals,
it may be the position of some states to require the Company to apply for either
a license as a dealer or even require an auction license. Many states do not
have any regulations in regard to the sales of vehicles over the Internet.
Employees
The Company presently has four employees, of which, only two receive a
salary. We anticipate one of the current employees joining the Company full time
after the completion of this offering. At present, the Company is not considered
"fully reporting" but has voluntarily complied with many of the regulations such
as holding annual stockholder meetings and providing stockholders with an
annually audited financial report. After the filing of this registration
statement, the Company will be fully reporting and will provide our stockholders
with the required annual reports.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Business plan for next 12 months
GimmeaBid.com expects to complete the development of its Internet
application on or about May 15, 2000. Beta testing will take place following
completion of the Internet application. The present time table is for the
on-line trading by auto dealers to commence on July 1, 2000. At this point
GimmeaBid.com will begin to generate revenue. For the balance of the plan,
GimmeaBid.com will maintain the auction site and:
. Seek out lane sponsors (advertisers)
. Secure partnerships/suppliers for parts and accessories catalog
. Launch marketing plan
. Hire 2 full time employees
. Design and print marketing materials.
Cash Requirements
The Company is able to maintain operations for the next 12 months but
will be facing the payment to Integrated Concepts of $367,000 during this period
for the remaining balance of development costs on a $1,500,000.00 obligation. If
the Company is unable to raise additional capital, it will be forced to come
some other arrangement with Integrated Concepts, Inc. for payment or seek out
some other form of financing which may include borrowing or the issuance of
securities. The Company expects to realize sufficient funds from this offering
combined with operating revenues to meet its obligations and continue
operations. The Company's largest and most subjective expense will be the amount
dedicated to marketing and advertising. If the Company is successful is selling
the entire offering of 1.5 million shares, we will have sufficient resources to
meet our obligations and objectives for the next 24 months. If we are unable to
raise the full amount, we will significantly reduce our advertising and
marketing budget which includes inside and outside sales staff.
Research & Development
All development is being and will be completed by ICI. The Company
currently has the project in development which includes two auctions, a catalog,
a sales & marketing database, other interactive features and functionality.
24
<PAGE>
Purchase of Equipment
The Company intends to purchase $50,000 of additional computer hardware and
peripherals in both 2000 and 2001 for a total of approximately $100,000.
Employees
The Company intends to hire two additional staff members on a full time
basis and, provided the Company is successful in this offering, we will hire
five additional sales persons and three in house support persons to meet and
manage the Company's marketing needs. In the event that the Company is not
successful in this offering, we will attempt to meet our marketing needs through
contractual arrangements with various Company's with which we have some
marketing synergies. The disadvantage is the lack of control of the sales staff
and schedule.
The Company realized a loss per share of ($0.19) in 1999 and a loss of
($.03) per share for the first quarter of 2000. Stockholder's Equity increased
from ($102,689.00) in 1999 to $1,180,874.00 in the first quarter of 2000. Total
current assets reached $ 1,289,443.00 in the first quarter of 2000, from $7,845
at the end of 1999. Financial projections for the last six months of the year
2000 and for five years thereafter are attached to the registration statement as
Exhibit 99 and included in this prospectus. An investor should observe the
cautions with respect to forward looking statements set forth in the third
paragraph under the heading risk factors when reviewing the financial
projections.
DESCRIPTION OF PROPERTY
The Company currently offices in the World Trade Center in Dallas,
Texas and occupies approximately 300 square feet. In its plans for expansion,
the Company has leased an additional 600 square feet of space within the same
building. The Company is currently finishing out the office and plans to move
into this new space by June, 2000.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company entered into a unique marketing agreement with Mr. John
Crowell who, as a condition of the agreement, accepted the responsibility of
marketing in eight (8) western states. As a condition of this agreement, there
is a trial period of ninety days. During this ninety-day trial period, the
Company has agreed to reimburse Mr. Crowell for out-of-pocket expenses up to a
maximum of $2,000.00 per month. At the end of the 90 day period, the Company
will issue Mr. Crowell 10,000 common shares for consideration. If the Company
chooses to continue its marketing arrangement with Mr. Crowell, he will be given
an option on 400,000 common shares at a price of $5.00 per share. Mr. Crowell
will be prohibited from selling any of these shares until GimmeaBid.com has
completed the sale of 100% of this offering of shares.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
There is no public trading market for the common stock of
GimmeaBid.com. There are outstanding 7,599,020 shares as of May 1, 2000. The
Company is currently offering 1,500,000 common shares through this offering. We
have also agreed to register an additional 1,200,000 for selling stockholders.
The remaining stockholders will also be able to sell their shares having met the
holding requirements of Rule 144. GimmeaBid.com has issued an option to purchase
400,000 shares of common stock at the purchase price of $5.00 per share.
Since its inception, no dividends have been paid on the Company's
common stock. The Company intends to retain any earnings for use in its business
activities, so it is not expected that any dividends on the common stock will be
declared and paid in the foreseeable future.
At May 1, 2000, there were approximately 462 stockholders of record
holding the Company's common stock.
25
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information concerning the aggregate
compensation paid or to be paid by the Company to the Company's Chief Executive
Officer and each of the other executive officers for 1999 (the "Named Executive
Officers") for services rendered in all capacities to the Company for the fiscal
year ended December 31, 1999 and 2000.
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
---------------------------- ------------------------
Awards Payouts
------------------------ -------
Name and Year Salary Bonus Other Restricted Securities LTIP All Other
Principal ($) Annual Stock Underlying payouts Comp.
Position Compensation Award Options/SARs
(a) (b) (c) (d) (e) (f) (g) (h)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
J. Michael Wood
CEO 2000 60,000 -0- -0- -0- -0- -0- -0-
1999 24,000 -0- -0- -0- -0- -0- -0-
Ann Wood
Secretary 2000 60,000 -0- -0- -0- -0- -0- -0-
1999 22,000 -0- -0- -0- -0- -0- -0-
Charles Wood
V.Pres 2000 -0- -0- -0- -0- -0- -0- -0-
1999 -0- -0- -0- -0- -0- -0- -0-
Maegan Anders
CFO 2000 30,000 -0- -0- -0- -0- -0- -0-
Treasurer 1999 -0- -0- -0- -0- -0- -0- -0-
</TABLE>
Stock Options
The Company granted no stock options or stock appreciation rights
("SARs") during the Company's prior fiscal year or the current year to the Named
Executive Officers. On April 10,2000, the Company did enter into an agreement in
which it may grant an option on 400,000 common shares at $5.00 per share to Mr.
John Crowell. This option was subject the completion of several conditions and
the Company has the pure discretion over whether to allow this option to be
executed provided these conditions are not satisfactorily met.
Employment Arrangements & Benefit Plans
GimmeaBid.com does not have employment agreements with any of its Named
Executive Officers. The Company does not currently offer any benefit plans
(whether retirement, ESOP, health, or otherwise) to any of its Named Executive
Officers, Employees, or Directors in any form.
GimmeaBid.com does not compensate any of its Directors for serving on
the Board. The Company does reimburse its Directors for any expenses related or
in connection with their attendance at meetings of the Board.
26
<PAGE>
FINANCIAL STATEMENTS
GIMMEABID.COM, INC.
(Formerly Mesquite Country, Inc.)
(A Development Stage Company)
FINANCIAL STATEMENTS
March 31, 2000 and December 31, 1999
<PAGE>
C O N T E N T S
Independent Accountants' Review Report...................................... 3
Balance Sheets.............................................................. 4
Statements of Operations.................................................... 5
Statements of Stockholders' Equity (Deficit)................................ 6
Statements of Cash Flows.................................................... 9
Notes to the Financial Statements.......................................... 11
<PAGE>
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
--------------------------------------
To the Board of Directors
Gimmeabid.com, Inc.
Dallas, Texas
We have reviewed the accompanying balance sheet of Gimmeabid.com, Inc. as of
March 31, 2000 and the related statements of operations, stockholders' equity
and cash flows for the periods ended March 31, 2000 and 1999. These financial
statements are the responsibility of the Company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data, and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, which will be performed
for the full year with the objective of expressing an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such an
opinion.
Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying condensed financial statements referred to above for
them to be in conformity with accounting principles generally accepted in the
United States.
We have previously audited, in accordance with auditing standards generally
accepted in the United States, the balance sheet of Gimmeabid.com, Inc. as of
December 31, 1999, and the related statements of operations, stockholders'
equity, and cash flows for the year then ended (not presented herein) and in our
report dated April 27, 2000, we expressed an unqualified opinion on those
financial statements.
HJ & Associates, LLC
Salt Lake City, Utah
May 4, 2000
<PAGE>
<TABLE>
<CAPTION>
GIMMEABID.COM, INC.
(Formerly Mesquite Country, Inc.)
(A Development Stage Company)
Balance Sheets
March 31, December 31,
2000 1999
------------------ -----------------
CURRENT ASSETS
<S> <C> <C>
Cash and cash equivalents $ 126,826 $ 545
Prepaid expenses 12,881 2,881
------------------ -----------------
Total Current Assets 139,707 3,426
------------------ ----------------
PROPERTY AND EQUIPMENT 1,149,736 4,419
------------------ ----------------
TOTAL ASSETS $ 1,289,443 $ 7,845
================== ================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
CURRENT LIABILITIES
Accounts payable $ 45,940 $ 47,070
Accrued expenses 62,629 63,464
------------------ ----------------
Total Current Liabilities 108,569 110,534
------------------ ----------------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $0.001 par value: 10,000,000 shares
authorized, 7,564,215 and 7,269,915 shares issued
and outstanding, respectively 7,564 7,270
Capital in excess of par value 5,359,578 3,888,372
Deficit accumulated prior to January 1, 1993 (716,629) (716,629)
Deficit accumulated during the development stage
(from January 1, 1993) (3,469,639) (3,281,702)
------------------ ----------------
Total Stockholders' Equity (Deficit) 1,180,874 (102,689)
------------------ ----------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 1,289,443 $ 7,845
================== ================
</TABLE>
See Accountants' Review Report and the accompanying notes to the
reviewed financial statements.
4
<PAGE>
GIMMEABID.COM, INC.
(Formerly Mesquite Country, Inc.)
(A Development Stage Company)
Statements of Operations
<TABLE>
<CAPTION>
From
Inception of
Development
Stage on
For the Three Months Ended January 1,
March 31, 1993 Through
-------------------------- March 31,
2000 1999 2000
------ ----- --------------
<S> <C> <C> <C>
REVENUE $ - $ - $ -
EXPENSES - - -
General and administrative 185,337 1,367,718 1,681,580
Depreciation 183 - 618
------------------ --------------- --------------
Total Expenses 185,520 1,367,718 1,682,198
------------------ --------------- --------------
Loss from continuing operations before
loss on discontinued operations (185,520) (1,367,718) (1,682,198)
------------------ --------------- --------------
LOSS ON DISCONTINUED OPERATIONS - - (1,774,612)
------------------ --------------- --------------
OTHER INCOME (EXPENSE)
Interest expense (2,530) (2,600) (12,942)
Interest income 113 - 113
------------------ --------------- --------------
Total Other Income (Expense) (2,417) (2,600) (12,829)
------------------ --------------- --------------
NET LOSS $ (187,937) $ (1,370,318) $ (3,469,639)
================== =============== ==============
BASIC LOSS PER COMMON SHARE $ (0.03) $ (0.19)
================== ===============
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 7,484,805 7,173,598
================== ===============
</TABLE>
See Accountants' Review Report and the accompanying notes to the
reviewed financial statements.
5
<PAGE>
<TABLE>
<CAPTION>
GIMMEABID.COM, INC.
(Formerly Mesquite Country, Inc.)
(A Development Stage Company)
Statements of Stockholders Equity (Deficit)
Deficit
Accumulated
Common Stock Capital in During the
--------------------------------- Excess of Development
Shares Amount Par Value Stage
--------------- --------------- ----------------- -------------
<S> <C> <C> <C> <C>
Balance at inception of
development stage on
January 1, 1993 722,167 $ 722 $ 2,251,680 $ (716,629)
Common stock issued for
services at $0.58 per share 253,868 254 146,990 -
Net loss for the year ended
December 31, 1993 - - - (1,740,571)
--------------- --------------- ----------------- --------------
Balance, December 31, 1993 976,035 976 2,398,670 (2,457,200)
Net loss for the year ended
December 31, 1994 - - - (1,289)
--------------- --------------- ----------------- -------------
Balance, December 31, 1994 976,035 976 2,398,670 (2,458,489)
Net loss for the year ended
December 31, 1995 - - - (6,594)
--------------- --------------- ----------------- -------------
Balance, December 31, 1995 976,035 976 2,398,670 (2,465,083)
Net loss for the year ended
December 31, 1996 - - - (7,381)
--------------- --------------- ----------------- -------------
Balance, December 31, 1996 976,035 976 2,398,670 (2,472,464)
Net loss for the year ended
December 31, 1997 - - - (9,373)
--------------- --------------- ----------------- -------------
Balance, December 31, 1997 976,035 976 2,398,670 (2,481,837)
Net loss for the year ended
December 31, 1998 - - - (9,404)
--------------- --------------- ----------------- -------------
Balance, December 31, 1998 976,035 $ 976 $ 2,398,670 $ (2,491,241)
--------------- --------------- ----------------- -------------
</TABLE>
See Accountants' Review Report and the accompanying notes to the
reviewed financial statements.
6
<PAGE>
<TABLE>
<CAPTION>
GIMMEABID.COM, INC.
(Formerly Mesquite Country, Inc.)
(A Development Stage Company)
Statements of Stockholders Equity (Deficit)(continued)
Deficit
Accumulated
Common Stock Capital in During the
--------------------------------- Excess of Development
Shares Amount Par Value Stage
--------------- --------------- ----------------- -------------
<S> <C> <C> <C> <C>
Balance, December 31, 1998 976,035 $ 976 $ 2,398,670 $ (2,491,241)
Common stock issued for
services at $0.22 per share 6,173,400 6,173 1,335,923 -
Common stock issued for
cash at $0.21 per share 72,000 72 14,928 -
Common stock issued for
cash at $0.25 per share 20,000 20 4,980 -
Common stock issued for
debt at $0.50 per share 2,467 3 1,230 -
Common stock issued for
services at $0.50 per share 533 1 266 -
Common stock issued for
fixed assets at $5.00 per share 290 - 1,450 -
Common stock issued for
prepaid expenses at $5.00
per share 1,000 1 4,999 -
Common stock issued for
services at $5.00 per share 7,790 8 38,942 -
Common stock issued for
cash at $5.00 per share 16,400 16 81,984 -
Capital contribution of services - - 5,000 -
Net loss for the year ended
December 31, 1999 (1,507,090)
--------------- --------------- ----------------- -------------
Balance, December 31, 1999 7,269,915 $ 7,270 $ 3,888,372 $ (3,998,331)
--------------- --------------- ----------------- -------------
</TABLE>
See Accountants' Review Report and the accompanying notes to the
reviewed financial statements.
7
<PAGE>
<TABLE>
<CAPTION>
GIMMEABID.COM, INC.
(Formerly Mesquite Country, Inc.)
(A Development Stage Company)
Statements of Stockholders Equity (Deficit) (continued)
Deficit
Accumulated
Common Stock Capital in During the
--------------------------------- Excess of Development
Shares Amount Par Value Stage
--------------- --------------- ----------------- -------------
<S> <C> <C> <C> <C>
Balance, December 31, 1999 7,269,915 $ 7,270 $ 3,888,372 $ (3,998,331)
Common stock issued for
cash at $5.00 per share 55,500 55 277,445 -
Common stock issued for
services at $5.00 per share 27,700 28 138,472 -
Common stock issued for
fixed assets at $5.00 per
share 100 - 500 -
Common stock issued for
software at $5.00 per share 209,000 209 1,044,791 -
Common stock issued for
prepaid expenses at $5.00
per share 2,000 2 9,998 -
Net loss for the three
months ended March 31,
2000 - - - (187,937)
--------------- --------------- ----------------- ------------- ---------
Balance, March 31, 2000 7,564,215 $ 7,564 $ 5,359,578 $ (4,186,268)
=============== =============== ================= =============
</TABLE>
See Accountants' Review Report and the accompanying notes to the
reviewed financial statements.
8
<PAGE>
<TABLE>
<CAPTION>
GIMMEABID.COM, INC.
(Formerly Mesquite Country, Inc.)
(A Development Stage Company)
Statements of Cash Flows
From
Inception of
Development
Stage on
For the Three Months Ended January 1,
March 31, 1993 Through
--------------------------------------- March 31,
2000 1999 2000
------------------ ------------------ ----------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES
Net loss $ (187,937) $ (1,370,318) $ (3,469,639)
Adjustments to reconcile net loss
to net cash used by operating
activities:
Common stock issued for services 138,500 1,347,947 1,672,057
Loss on disposition of assets - - 1,535,773
Depreciation expense 183 - 618
Changes in operating assets and liabilities:
(Increase) in advances to related parties - (4,300) -
Decrease in prepaid expense - - 2,119
Increase in cash overdraft - 5,000 -
Increase (decrease) in accounts payable
and accrued expenses (1,965) 3,801 109,802
------------------ ------------------ ----------------
Net Cash Used by Operating Activities (51,219) (17,870) (149,270)
------------------ ------------------ ----------------
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of fixed assets - (1,450) (3,404)
Purchase of software (100,000) - (100,000)
------------------ ------------------ ----------------
Net Cash Used by Investing Activities (100,000) (1,450) (103,404)
------------------ ------------------ ----------------
CASH FLOWS FROM FINANCING
ACTIVITIES
Common stock issued for cash 277,500 20,000 379,500
------------------ ------------------ ----------------
Net Cash Provided by Financing Activities 277,500 20,000 379,500
------------------ ------------------ ----------------
INCREASE IN CASH AND CASH
EQUIVALENTS 126,281 680 126,826
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 545 - -
------------------ ------------------ ----------------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 126,826 $ 680 $ 126,826
================== ================== ================
</TABLE>
See Accountants' Review Report and the accompanying notes to the
reviewed financial statements.
9
<PAGE>
<TABLE>
<CAPTION>
GIMMEABID.COM, INC.
(Formerly Mesquite Country, Inc.)
(A Development Stage Company)
Statements of Cash Flows (Continued)
From
Inception of
Development
Stage on
For the Three Months Ended January 1,
March 31, 1993 Through
--------------------------------------- March 31,
2000 1999 2000
------------------ ------------------ ----------------
<S> <C> <C> <C>
Cash Paid For:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
Non-Cash Financing Activities:
Issuance of common stock for services $ 138,500 $ 1,347,947 $ 1,672,057
Issuance of common stock for debt $ - $ 868 $ 1,233
Issuance of common stock for prepaid
expenses $ 10,000 $ 5,000 $ 15,000
Issuance of common stock for fixed assets $ 500 $ 1,450 $ 1,950
Issuance of common stock for software $ 1,045,000 $ - $ 1,045,000
</TABLE>
See Accountants' Review Report and the accompanying notes to the
reviewed financial statements.
10
<PAGE>
GIMMEABID.COM, INC.
(Formerly Mesquite Country, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2000 and December 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
Life Systems International, Inc. (the Company) was incorporated on
May 15, 1986 under the laws of the State of Delaware. On July 17,
1990, the Company changed its name to Mesquite Country, Inc. On
June 16, 1999, the Company changed its name to Gimmeabid.com, Inc.
The Company is considered a development stage enterprise whose
principal business activity will be to provide e-commerce services
to commercial enterprises, initially automobile dealers and parts
distributors.
The Company has not engaged in any business operations since 1992
and it was reclassified as a development stage company as of
January 1, 1993. The Company presently has only minimal assets.
b. Accounting Method
The Company's financial statements are prepared using the accrual
method of accounting. The Company has elected a calendar year end.
c. Cash Equivalents
The Company considers all highly liquid investments with a
maturity of three months or less when purchased to be cash
equivalents.
d. Property and Equipment
Property and equipment are recorded at cost. Major additions and
improvements are capitalized. The cost and related accumulated
depreciation of equipment retired or sold are removed from the
accounts and any differences between the undepreciated amount and
the proceeds from the sale are recorded as a gain or loss on sale
of equipment. Depreciation is computed using the straight-line
method over the estimated useful lives as follows:
Useful
Description Lives
----------- ------
Office equipment 5 to 7 years
Office furniture 7 years
The Company has contracted with various third parties to acquire
software developed by those parties to be used in the normal
course of its operations (See Note 3). When installed and
operational, this software will be amortized over a 5 year period.
11
<PAGE>
GIMMEABID.COM, INC.
(Formerly Mesquite Country, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2000 and December 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
e. Income Taxes
No provision for income taxes has been accrued because the Company
has incurred losses from inception. The Company has elected a
December 31 year end and has a net operating loss carryover of
approximately $2,400,000 for tax purposes, which expires in 2020.
f. Basic Loss per Share
During the Company's fiscal year ended 1998, the Company
implemented Statement of Financial Accounting Standards ("SFAS")
No. 128, "Earnings Per Share." SFAS No. 128 provides for the
calculation of "Basic" and "Diluted" earnings per share. Basic
earnings per share includes no dilution and is computed by
dividing income available to common stockholders by the weighted
average number of common shares outstanding for the period.
Diluted earnings per share reflects the potential dilution of
securities that could share in the earnings of an entity that were
outstanding for the period, similar to fully diluted earnings per
share.
The computation of basic loss per share of common stock is based
on the weighted average number of shares outstanding during the
period of the financial statements.
<TABLE>
<CAPTION>
For the Three
Months Ended
March 31, 2000
--------------
(unaudited)
Loss Shares Per Share
(Numerator) (Denominator) Amount
------------------ ----------------- -----------------
<S> <C> <C> <C>
Net Loss $ (187,937) 7,484,805 $ (0.03)
================== ================= =================
For the Three
Months Ended
March 31, 1999
--------------
(unaudited)
Loss Shares Per Share
(Numerator) (Denominator) Amount
------------------ ----------------- -----------------
Net loss $ (1,370,318) 7,173,598 $ (0.19)
================== ================= =================
</TABLE>
g. Reverse Stock Split
In 1993, the Company reverse split its shares of common stock on a
1-for-20 basis. All references to shares outstanding and losses
per share have been adjusted to reflect the effect of the reverse
split on a retroactive basis.
12
<PAGE>
GIMMEABID.COM, INC.
(Formerly Mesquite Country, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2000 and December 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICES (Continued)
h. 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 amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
i. Revenue Recognition
As the Company is in the development stage and has no sources of
revenue, such policies have not been established. The Company will
develop policies for revenue recognition when normal operations
and sales commence.
j. Long Lived Assets
All long lived assets are evaluated yearly for impairment per SFAS
121. Any impairment in value is recognized as an expense in the
period when the impairment occurs.
NOTE 2 - PROPERTY AND EQUIPMENT
Property and equipment consists of the following:
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
------------------ ------------------
<S> <C> <C>
Office Equipment $ 3,604 $ 3,604
Office Furniture 1,250 1,250
Leasehold improvements 500 -
Software 1,145,000 -
------------------ ------------------
1,150,354 4,854
Accumulated depreciation (618) (435)
------------------ ------------------
Net Property and Equipment $ 1,149,736 $ 4,419
================== ==================
</TABLE>
Depreciation expense for the three months ended March 31, 2000 and
1999 was $183 and $-0-, respectively.
NOTE 3 - COMMITMENTS AND CONTINGENCIES
The Company leases certain office equipment used in its operations
under a non-cancellable operating lease. The lease term expires in
June 2003. The monthly rental payment for the lease is $67.
13
<PAGE>
GIMMEABID.COM, INC.
(Formerly Mesquite Country, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2000 and December 31, 1999
NOTE 3 - COMMITMENTS AND CONTINGENCIES (Continued)
The Company leases certain office furniture used in its operations
under non-cancellable operating leases. The lease terms expire in
March 2000 and April 2000. At the end of the lease terms, the
Company has the option to continue to lease the furniture on a
month-to-month basis. The monthly rental payment for the leases is
$382.
The Company leases office space located in Dallas, Texas under a
non-cancellable operating lease. The lease term expires in July
2000. The monthly rental payment for the lease is $248.
Minimum future lease payments on the leases as of March 31, 2000
are as follows:
Year Ended
December 31, Amount
------------ ------
2000 $ 1,838
2001 801
2002 801
2003 400
2004 and thereafter -
-----------------
Total $ 3,840
=================
On January 15, 2000, the Company entered into an agreement with
Integrated Concepts, Inc. to develop a custom e-commerce internet
application for the Company for $1.5 million. The Company agreed
to pay $1.0 million in common stock at a price of $5.00 per share
totaling 200,000 shares. The remaining $500,000 is to be paid over
the development of the project. In accordance with the terms of
the agreement, the Company paid $100,000 to Integrated Concepts,
Inc. upon their acceptance of the contract.
NOTE 4 - COMMON STOCK
In January 1999, the Company issued 6,173,400 shares of its common
stock to officers and other individuals for services rendered to
the Company, valued at $1,342,097 at a price of $0.22 per share.
In January 1999, the Company sold 72,000 shares of its common
stock for cash proceeds of $15,000 at a price of $0.21 per share.
In January 1999, the Company sold 20,000 shares of its common
stock for cash proceeds of $5,000 at a price of $0.25 per share.
14
<PAGE>
GIMMEABID.COM, INC.
(Formerly Mesquite Country, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2000 and December 31, 1999
NOTE 4 - COMMON STOCK (Continued)
In January 1999, the Company issued 3,000 shares of its common
stock in settlement of debt of $1,233 and for services rendered to
the Company valued at $267 at a price of $0.50 per share.
In March 1999, the Company issued 290 shares of its common stock
at $1,450 at a price of $5.00 per share and a payable in the
amount of $1,450 for equipment valued at $2,900.
In March 1999, the Company issued 1,000 shares of its common stock
at $5,000 at a price of $5.00 per share for services to be
rendered to the Company in future periods.
From March 1999 to October 1999, the Company issued 7,790 shares
of its common stock for services rendered to the Company valued at
$38,950 at a price of $5.00 per share.
From April 1999 to October 1999, the Company sold 16,400 shares of
its common stock for cash proceeds of $82,000 at a price of $5.00
per share.
On January 15, 2000, the Company issued 200,000 shares of its
common stock and made the initial payment of $100,000 to
Integrated Concepts, Inc. upon that company's acceptance of the
contract (see Note 3).
From January 1 to March 31, 2000, the Company issued 38,800 shares
of its common stock for services rendered to the Company, prepaid
expenses, fixed assets and software development costs valued at
$194,000 at a price of $5.00 per share.
From January 1 to March 31, 2000, the Company sold 55,500 shares
of its common stock for cash proceeds of $277,500 at a price of
$5.00 per share.
NOTE 5 - GOING CONCERN
The accompanying financial statements have been prepared assuming
the Company will continue as a going concern. The Company has been
in the development stage since January 1, 1993 and does not have a
significant operating history. In order to carry out its operating
plans, the Company will need to obtain additional funding from
outside sources. The Company is pursuing new business
opportunities through merger or purchase of existing, operating
companies. Due to the extremely limited assets and resources of
the Company, no assurance can be given that the Company will be
successful in its pursuit of new business opportunities.
NOTE 6 - DISCONTINUED OPERATIONS
In 1992, the Company discontinued its operations and, in 1993,
sold all of its operating assets. The operating results for the
periods from 1993 through 1998 have been reclassified and reported
as discontinued operations.
15
<PAGE>
GIMMEABID.COM, INC.
(Formerly Mesquite Country, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2000 and December 31, 1999
NOTE 7 - SUBSEQUENT EVENTS
From April 1 to April 30, 2000, the Company issued 15,745 shares
of its common stock for services rendered to the Company valued at
$78,725 at a price of $5.00 per share.
From April 1 to April 30, 2000, the Company sold 19,060 shares of
its common stock for cash proceeds totaling $95,300 at a price of
$5.00 per share.
On April 10, 2000, the Company entered into an agreement with an
individual to market the Company's e-commerce websites to dealers
and transporters of motor vehicles, water craft, aircraft,
agricultural equipment, recreational vehicles and heavy equipment
in the western United States.
The term of the agreement is 5 years, but may be terminated by the
Company due to non-performance by the individual. In addition to a
pre-determined commission schedule and in accordance with the
terms of the agreement, the individual has 90 days from the
effective date of the agreement to make "substantial performance
"in signing up dealers. Should the individual make such
performance, the Company will provide to the individual 10,000
shares of the Company's common stock, options to purchase 400,000
shares of the Company's common stock at $5.00 per share for a
period of three years from the date the Company provides the
individual the initial 10,000 common shares, and make the
individual a member of the board of directors.
16
<PAGE>
GIMMEABID.COM, INC.
(Formerly Mesquite Country, Inc.)
(A Development Stage Company)
FINANCIAL STATEMENTS
December 31, 1999
<PAGE>
C O N T E N T S
Independent Auditors' Report................................................ 3
Balance Sheet............................................................... 4
Statements of Operations.................................................... 5
Statements of Stockholders' Equity (Deficit)................................ 6
Statements of Cash Flows.................................................... 8
Notes to the Financial Statements.......................................... 10
<PAGE>
INDEPENDENT AUDITORS' REPORT
----------------------------
Board of Directors
Gimmeabid.com, Inc.
(Formerly Mesquite Country, Inc.)
(A Development Stage Company)
Dallas, Texas
We have audited the accompanying balance sheet of Gimmeabid.com, Inc. (formerly
Mesquite Country, Inc.) (a development stage company) as of December 31, 1999
and the related statements of operations, stockholders' equity (deficit) and
cash flows for the years ended December 31, 1999 and 1998 and from inception of
the development stage on January 1, 1993 through December 31, 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 audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, in the financial position of Gimmeabid.com, Inc.
(formerly Mesquite Country, Inc.) (a development stage company) as of December
31, 1999 and the results of its operations and its cash flows for the years
ended December 31, 1999 and 1998 and from inception of the development stage on
January 1, 1993 through December 31, 1999, in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 5 to the
financial statements, the Company is a development stage company with no
significant operating revenues to date, which raises substantial doubt about its
ability to continue as a going concern. Management's plans in regard to these
matters are also described in Note 5. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
Jones, Jensen & Company
Salt Lake City, Utah
April 27, 2000
3
<PAGE>
GIMMEABID.COM, INC.
(Formerly Mesquite Country, Inc.)
(A Development Stage Company)
Balance Sheet
<TABLE>
<CAPTION>
December 31,
1999
-----------------
<S> <C>
CURRENT ASSETS
Cash and cash equivalents $ 545
Prepaid expenses 2,881
-----------------
Total Current Assets 3,426
PROPERTY AND EQUIPMENT, NET (Notes 1 and 2) 4,419
-----------------
TOTAL ASSETS $ 7,845
=================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 47,070
Accrued expenses 63,464
-----------------
Total Current Liabilities 110,534
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $0.001 par value: 10,000,000 shares
authorized, 7,269,915 shares issued and outstanding 7,270
Capital in excess of par value 3,888,372
Deficit accumulated prior to January 1, 1993 (716,629)
Deficit accumulated during the development stage (from January 1, 1993) (3,281,702)
-----------------
Total Stockholders' Equity (Deficit) (102,689)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 7,845
=================
</TABLE>
The accompanying notes are an integral part of these
financial statements.
4
<PAGE>
GIMMEABID.COM, INC.
(Formerly Mesquite Country, Inc.)
(A Development Stage Company)
Statements of Operations
<TABLE>
<CAPTION>
From
Inception of
Development
Stage on
January 1,
For the Years Ended 1993 Through
December 31, December 31,
1999 1998 1999
----------- ----------- -------------
<S> <C> <C> <C>
REVENUE $ - $ - $ -
EXPENSES - - -
General and administrative 1,496,243 - 1,496,243
Depreciation 435 - 435
----------- ------------ -------------
Total Expenses 1,496,678 - 1,496,678
----------- ------------ -------------
Loss from continuing operations before
loss on discontinued operations (1,496,678) - (1,496,678)
----------- ------------ -------------
LOSS ON DISCONTINUED OPERATIONS - (9,404) (1,774,612)
----------- ------------ -------------
OTHER EXPENSE
Interest Expense (10,412) - (10,412)
----------- ------------ -------------
Total Other Expense (10,412) - (10,412)
----------- ------------ -------------
NET LOSS $(1,507,090) $ (9,404) $ (3,281,702)
=========== ============ =============
BASIC LOSS PER COMMON SHARE $ (0.21) $ (0.00)
=========== ============
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 7,235,438 976,035
=========== ============
</TABLE>
The accompanying notes are an integral part of these
financial statements.
5
<PAGE>
GIMMEABID.COM, INC.
(Formerly Mesquite Country, Inc.)
(A Development Stage Company)
Statements of Stockholders Equity (Deficit)
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Capital in During the
--------------------------------- Excess of Development
Shares Amount Par Value Stage
--------------- --------------- ----------------- -------------
<S> <C> <C> <C> <C>
Balance at inception of
development stage on
January 1, 1993 722,167 $ 722 $ 2,251,680 $ (716,629)
Common stock issued for
services at $0.58 per share 253,868 254 146,990 -
Net loss for the year ended
December 31, 1993 - - - (1,740,571)
--------------- --------------- ----------------- -------------
Balance, December 31, 1993 976,035 976 2,398,670 (2,457,200)
Net loss for the year ended
December 31, 1994 - - - (1,289)
--------------- --------------- ----------------- -------------
Balance, December 31, 1994 976,035 976 2,398,670 (2,458,489)
Net loss for the year ended
December 31, 1995 - - - (6,594)
--------------- --------------- ----------------- -------------
Balance, December 31, 1995 976,035 976 2,398,670 (2,465,083)
Net loss for the year ended
December 31, 1996 - - - (7,381)
--------------- --------------- ----------------- -------------
Balance, December 31, 1996 976,035 976 2,398,670 (2,472,464)
Net loss for the year ended
December 31, 1997 - - - (9,373)
--------------- --------------- ----------------- -------------
Balance, December 31, 1997 976,035 976 2,398,670 (2,481,837)
Net loss for the year ended
December 31, 1998 - - - (9,404)
--------------- --------------- ----------------- -------------
Balance, December 31, 1998 976,035 $ 976 $ 2,398,670 $ (2,491,241)
--------------- --------------- ----------------- -------------
</TABLE>
The accompanying notes are an integral part of these
financial statements.
6
<PAGE>
GIMMEABID.COM, INC.
(Formerly Mesquite Country, Inc.)
(A Development Stage Company)
Statements of Stockholders Equity (Deficit)(Continued)
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Capital in During the
--------------------------------- Excess of Development
Shares Amount Par Value Stage
--------------- --------------- ----------------- -------------
<S> <C> <C> <C> <C>
Balance, December 31, 1998 976,035 $ 976 $ 2,398,670 $ (2,491,241)
Common stock issued for
services at $0.22 per share 6,173,400 6,173 1,335,923 -
Common stock issued for
cash at $0.21 per share 72,000 72 14,928 -
Common stock issued for
cash at $0.25 per share 20,000 20 4,980 -
Common stock issued for
debt at $0.50 per share 2,467 3 1,230 -
Common stock issued for
services at $0.50 per share 533 1 266 -
Common stock issued for
fixed assets at $5.00 per share 290 - 1,450 -
Common stock issued for
prepaid expenses at $5.00
per share 1,000 1 4,999 -
Common stock issued for
services at $5.00 per share 7,790 8 38,942 -
Common stock issued for
cash at $5.00 per share 16,400 16 81,984 -
Capital contribution of services - - 5,000 -
Net loss for the year ended
December 31, 1999 (1,507,090)
--------------- --------------- ----------------- -------------
Balance, December 31, 1999 7,269,915 $ 7,270 $ 3,888,372 $ (3,998,331)
=============== =============== ================= =============
</TABLE>
The accompanying notes are an integral part of these
financial statements.
7
<PAGE>
GIMMEABID.COM, INC.
(Formerly Mesquite Country, Inc.)
(A Development Stage Company)
Statements of Cash Flows
<TABLE>
<CAPTION>
From
Inception of
Development
Stage on
For the Years Ended January 1,
December 31, 1993 Through
--------------------------------------- December 31,
1999 1998 1999
------------------ ------------------ ----------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES
Net loss $ (1,507,090) $ (9,404) $ (3,281,702)
Adjustments to reconcile net loss
to net cash used by operating
activities:
Common stock issued for services 1,386,313 - 1,533,557
Loss on disposition of assets - - 1,535,773
Depreciation expense 435 - 435
Changes in operating assets and liabilities:
Decrease in prepaid expense 2,119 - 2,119
Increase in accounts payable and
accrued expenses 20,172 9,404 111,767
------------------ ------------------ ----------------
Net Cash Used by Operating Activities (98,051) - (98,051)
------------------ ------------------ ----------------
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of fixed assets (3,404) - (3,404)
------------------ ------------------ ----------------
Net Cash Used by Investing Activities (3,404) - (3,404 )
------------------ ------------------ ----------------
CASH FLOWS FROM FINANCING
ACTIVITIES
Common stock issued for cash 102,000 - 102,000
------------------ ------------------ ----------------
Net Cash Provided by Financing Activities 102,000 - 102,000
------------------ ------------------ ----------------
INCREASE IN CASH AND CASH
EQUIVALENTS 545 - 545
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD - - -
------------------ ------------------ ----------------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 545 $ - $ 545
================== ================== ================
</TABLE>
The accompanying notes are an integral part of these
financial statements.
8
<PAGE>
GIMMEABID.COM, INC.
(Formerly Mesquite Country, Inc.)
(A Development Stage Company)
Statements of Cash Flows (Continued)
<TABLE>
<CAPTION>
From
Inception of
Development
Stage on
For the Years Ended January 1,
December 31, 1993 Through
--------------------------------------- December 31,
1999 1998 1999
------------------ ------------------ ----------------
<S> <C> <C> <C>
Cash Paid For:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
Non-Cash Financing Activities:
Issuance of common stock for services $ 1,386,313 $ - $ 1,533,557
Issuance of common stock for debt $ 1,233 $ - $ 1,233
Issuance of common stock for prepaid
expenses $ 5,000 $ - $ 5,000
Issuance of common stock for fixed
assets $ 1,450 $ - $ 1,450
</TABLE>
The accompanying notes are an integral part of these
financial statements.
9
<PAGE>
GIMMEABID.COM, INC.
(Formerly Mesquite Country, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
Life Systems International, Inc. (the Company) was incorporated on
May 15, 1986 under the laws of the State of Delaware. On July 17,
1990, the Company changed its name to Mesquite Country, Inc. On
June 16, 1999, the Company changed its name to Gimmeabid.com, Inc.
The Company is considered a development stage enterprise whose
principal business activity will be to provide e-commerce services
to commercial enterprises, initially automobile dealers and parts
distributors.
The Company has not engaged in any business operations since 1992
and it was reclassified as a development stage company as of
January 1, 1993. The Company presently has only minimal assets.
b. Accounting Method
The Company's financial statements are prepared using the accrual
method of accounting. The Company has elected a calendar year end.
c. Cash Equivalents
The Company considers all highly liquid investments with a
maturity of three months or less when purchased to be cash
equivalents.
d. Property and Equipment
Property and equipment are recorded at cost. Major additions and
improvements are capitalized. The cost and related accumulated
depreciation of equipment retired or sold are removed from the
accounts and any differences between the undepreciated amount and
the proceeds from the sale are recorded as a gain or loss on sale
of equipment. Depreciation is computed using the straight-line
method over the estimated useful lives as follows:
Useful
Description Lives
----------- ------
Office equipment 5 to 7 years
Office furniture 7 years
10
<PAGE>
GIMMEABID.COM, INC.
(Formerly Mesquite Country, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
e. Income Taxes
No provision for income taxes has been accrued because the Company
has incurred losses from inception. The Company has elected a
December 31 year end and has a net operating loss carryover of
approximately $2,200,000 for tax purposes, which expires in 2019.
f. Basic Loss per Share
During the Company's fiscal year ended 1998, the Company
implemented Statement of Financial Accounting Standards ("SFAS")
No. 128, "Earnings Per Share." SFAS No. 128 provides for the
calculation of "Basic" and "Diluted" earnings per share. Basic
earnings per share includes no dilution and is computed by
dividing income available to common stockholders by the weighted
average number of common shares outstanding for the period.
Diluted earnings per share reflects the potential dilution of
securities that could share in the earnings of an entity that were
outstanding for the period, similar to fully diluted earnings per
share.
The computation of basic loss per share of common stock is based
on the weighted average number of shares outstanding during the
period of the financial statements.
<TABLE>
<CAPTION>
For the
Year Ended
December 31,
--------------
1999
Loss Shares Per Share
(Numerator) (Denominator) Amount
------------------ ----------------- -----------------
<S> <C> <C> <C>
Loss from continuing
operations $ (1,507,090) 7,235,438 $ (0.21)
Loss from discontinued
operations - 7,235,438 0.00
------------------ ----------------- -----------------
Net loss $ (1,507,090) 7,235,438 $ (0.21)
================== ================= =================
For the
Year Ended
December 31, 1998
--------------
Loss Shares Per Share
(Numerator) (Denominator) Amount
------------------ ----------------- -----------------
Loss from continuing
operations $ - 976,035 $ 0.00
Loss from discontinued
operations (9,404) 976,035 (0.00)
------------------ ----------------- -----------------
Net loss $ (9,404) 976,035 $ (0.00)
================== ================= =================
</TABLE>
11
<PAGE>
GIMMEABID.COM, INC.
(Formerly Mesquite Country, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICES (Continued)
f. Reverse Stock Split
In 1993, the Company reverse split its shares of common stock on a
1-for-20 basis. All references to shares outstanding and losses
per share have been adjusted to reflect the effect of the reverse
split on a retroactive basis.
g. 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 amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
h. Revenue Recognition
As the Company is in the development stage and has no sources of
revenue, such policies have not been established. The Company will
develop policies for revenue recognition when normal operations
and sales commence.
NOTE 2 - PROPERTY AND EQUIPMENT
Property and equipment consists of the following:
December 31,
1999
------------
Office Equipment $ 3,604
Office Furniture 1,250
-----------
4,854
Accumulated depreciation (435)
Net Property and Equipment $ 4,419
===========
Depreciation expense for the years ended December 31, 1999 and
1998 was $435 and $-0-, respectively.
NOTE 3 - COMMITMENTS AND CONTINGENCIES
The Company leases certain office equipment used in its operations
under a non-cancellable operating lease. The lease term expires in
June 2003. The monthly rental payment for the lease is $67.
12
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GIMMEABID.COM, INC.
(Formerly Mesquite Country, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1999
NOTE 3 - COMMITMENTS AND CONTINGENCIES (Continued)
The Company leases certain office furniture used in its operations
under non-cancellable operating leases. The lease terms expire in
March 2000 and April 2000. At the end of the lease terms, the
Company has the option to continue to lease the furniture on a
month-to-month basis. The monthly rental payment for the leases is
$382.
The Company leases office space located in Dallas, Texas under a
non-cancellable operating lease. The lease term expires in July
2000. The monthly rental payment for the lease is $248.
Minimum future lease payments on the leases as of December 31,
1999 are as follows:
Year Ended
December 31, Amount
------------ -----------
2000 $ 3,530
2001 801
2002 801
2003 400
2004 and thereafter -
-----------
Total $ 5,532
===========
On December 28, 1999, the board of directors authorized the
Company to enter into an agreement with Integrated Concepts, Inc.
to develop a custom e-commerce internet application for the
Company for $1.5 million. The board of directors authorized the
Company to pay $1.0 million in common stock at a price of $5.00
per share totaling 200,000 shares. The remaining $500,000 is to be
paid over the development of the project, with $100,000 due upon
acceptance of the contract by Integrated Concepts, Inc.
NOTE 4 - COMMON STOCK
In January 1999, the Company issued 6,173,400 shares of its common
stock to officers and other individuals for services rendered to
the Company, valued at $1,342,097 at a price of $0.22 per share.
In January 1999, the Company sold 72,000 shares of its common
stock for cash proceeds of $15,000 at a price of $0.21 per share.
In January 1999, the Company sold 20,000 shares of its common
stock for cash proceeds of $5,000 at a price of $0.25 per share.
In January 1999, the Company issued 3,000 shares of its common
stock in settlement of debt of $1,233 and for services rendered to
the Company valued at $267 at a price of $0.50 per share.
In March 1999, the Company issued 290 shares of its common stock
at $1,450 at a price of $5.00 per share and a payable in the
amount of $1,450 for equipment valued at $2,900.
13
<PAGE>
GIMMEABID.COM, INC.
(Formerly Mesquite Country, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1999
NOTE 4 - COMMON STOCK (Continued)
In March 1999, the Company issued 1,000 shares of its common stock
at $5,000 at a price of $5.00 per share for services to be
rendered to the Company in future periods.
From March 1999 to October 1999, the Company issued 7,790 shares
of its common stock for services rendered to the Company valued at
$38,950 at a price of $5.00 per share.
From April 1999 to October 1999, the Company sold 16,400 shares of
its common stock for cash proceeds of $82,000 at a price of $5.00
per share.
NOTE 5 - GOING CONCERN
The accompanying financial statements have been prepared assuming
the Company will continue as a going concern. The Company has been
in the development stage since January 1, 1993 and does not have a
significant operating history. In order to carry out its operating
plans, the Company will need to obtain additional funding from
outside sources. The Company is pursuing new business
opportunities through merger or purchase of existing, operating
companies. Due to the extremely limited assets and resources of
the Company, no assurance can be given that the Company will be
successful in its pursuit of new business opportunities.
NOTE 6 - DISCONTINUED OPERATIONS
In 1992, the Company discontinued its operations and, in 1993,
sold all of its operating assets. The operating results for the
periods from 1993 through 1998 have been reclassified and reported
as discontinued operations.
NOTE 7 - SUBSEQUENT EVENTS
On January 15, 2000, the Company issued 200,000 shares of its
common stock and made the initial payment of $100,000 to
Integrated Concepts, Inc. upon that company's acceptance of the
contract (see Note 3).
From January 1 to April 27, 2000, the Company issued 54,545 shares
of its common stock for services rendered to the Company, pre-paid
expenses, fixed assets, and software development costs valued at
$272,725 at a price of $5.00 per share.
From January 1 to April 27, 2000, the Company sold 74,560 shares
of its common stock for cash proceeds totaling $372,800 at a price
of $5.00 per share.
On April 10, 2000, the Company entered into an agreement with an
individual to market the Company's e-commerce websites to dealers
and transporters of motor vehicles, water craft, aircraft,
agricultural equipment, recreational vehicles and heavy equipment
in the western United States.
14
<PAGE>
GIMMEABID.COM, INC.
(Formerly Mesquite Country, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1999
NOTE 7 - SUBSEQUENT EVENTS (Continued)
The term of the agreement is 5 years, but may be terminated by the
Company due to non-performance by the individual. In addition to a
pre-determined commission schedule and in accordance with the
terms of the agreement, the individual has 90 days from the
effective date of the agreement to make "substantial performance
"in signing up dealers. Should the individual make such
performance, the Company will provide to the individual 10,000
shares of the Company's common stock, options to purchase 400,000
shares of the Company's common stock at $5.00 per share for a
period of three years from the date the Company provides the
individual the initial 10,000 common shares, and make the
individual a member of the board of directors.
15
<PAGE>
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
There have been no changes in or disagreements with the Company's
accountants since the formation of the Company required to be disclosed pursuant
to Item 304 of Regulation S-B.
LEGAL MATTERS
The validity of the issuance of shares of GimmeaBid.com's common stock
offered hereby has been passed upon for GimmeaBid.com by Fabian & Clendenin,
located in Salt Lake City, Utah.
EXPERTS
The audited financial statements of GimmeaBid.com at December 31, 1999,
and 1998, and for the years then ended, and for the period from incorporation to
December 31, 1999, and the reviewed but unaudited interim financial statements
through March 31, 2000, appearing in this prospectus and registration statement
have been audited and reviewed respectively by Jones, Jensen and Co., Certified
Public Accountants, and are included in reliance upon such reports given upon
the authority of Jones, Jensen and Co. as experts in accounting and auditing.
WHERE CAN YOU FIND ADDITIONAL INFORMATION
A registration statement on Form SB-2, including amendments thereto,
relating to the shares offered hereby has been filed with the Securities and
Exchange Commission. This prospectus does not contain all of the information set
forth in the registration statement and the exhibits and schedules thereto.
Statements contained in the prospectus as to the contents of any contract or
other document referred to are not necessarily complete and in each instance
reference is made to the copy of such contract or other document filed as an
exhibit to the registration statement, each such statement being qualified in
all respects by such reference. For further information with respect to
GimmeaBid.com and the shares offered hereby, reference is made to such
registration statement, exhibits and schedules. A copy of the registration
statement may be inspected by anyone without charge at the Commission's
principal office location at 450 Fifth Street, N.W., Washington, D.C. 20549, the
Northeast Regional Office location at 7 World Trade Center, 13th. Floor, New
York, New York, 10048, and the Midwest Regional Office location at Northwest
Atrium Center, 500 Madison Street, Chicago, Illinois 60661-2511 and copies of
all or any part thereof may be obtained from the Public Reference Branch of the
Commission upon the payment of certain fees prescribed by the Commission. You
may also obtain information on the Public Reference Room by calling the SEC at
1-800-SEC-0330. The Commission also maintains a site on the world wide web at
http://www.sec.gov that contains information regarding registrants that file
electronically with the Commission.
- ---------------------
TABLE OF CONTENTS
Page
Prospectus Summary.....................4
Risk Factors...........................6
Use of Proceeds.......................12
Dilution..............................13
Selling Stockholders..................14
Plan of Distribution..................17
Legal Proceedings.....................19
Directors, Officers,
Promoters, and Control Persons........19
27
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Description of Securities.............21
Indemnification.......................22
Description of Business...............22
Management's Discussion and
Analysis of Financial Condition and
Results of Operations................24
Certain Relationships.................25
Executive Compensation................26
!st Quarter Financial Statements......27
1999 Audited Financial Statements.....43
Financial Projections.................58
[GRAPHIC OMITTED]
Until the effective date, all dealers effecting transactions in the
Common Stock, whether or not participating in this distribution, may be required
to deliver a Prospectus. This delivery requirement is in addition to the
obligation of dealers to deliver a Prospectus when acting as Underwriters and
with respect to their unsold allotments of subscriptions.
No dealer, salesperson or other individual has been authorized to give
any information or to make any representation not contained in this Prospectus
in connection with the Offering. If given or made, such information or
representation must not be relied upon as having been authorized by the Company
or any of the Underwriters. This Prospectus does not constitute an offer to
sell, or a solicitation of an offer to buy, the Common Stock in any jurisdiction
where, or to any person to whom, it is unlawful to make such offer or
solicitation. Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create an implication that there has
not been any change in the facts set forth in this Prospectus or in the affairs
of the Company since the date hereof.
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Certificate of Incorporation eliminates, subject to
certain exceptions, directors' personal liability to the Company or its
stockholders for monetary damages for breaches of fiduciary duties. The
Certificate of Incorporation does not, however, eliminate or limit the personal
liability of a director for (i) any breach of the director's duty of loyalty to
the Company or its stockholders, (ii) acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii)
unlawful payments of dividends or unlawful stock repurchases or redemptions as
provided in Section 174 of the Delaware General Corporation Law or (iv) for any
transaction from which the director derived an improper personal benefit.
The Company's Bylaws provide that the Company shall indemnify its
directors, officers, employees, and against to the fullest extent permitted
under the General Corporation Law of Delaware. In addition, the Company has
entered or will enter into indemnification agreements with its directors and
officers that provide for indemnification in addition to the indemnification
provided in the Company's Bylaws. The indemnification agreements contain
provisions that may require the Company, among other things, to indemnify its
directors and executive officers against certain liabilities (other than
liabilities arising from intentional or knowing and culpable violations of law)
that may arise by reason of their status or service as directors or executive
officers of the Company or other entities to which they provide service at the
request of the Company and to advance expenses they may incur as a result of any
proceeding against them as to which they could be indemnified. The Company
believes that these provisions and agreements are necessary to attract and
retain qualified directors and officers. The Company will obtain an insurance
policy covering directors and officers for claims that such directors and
officers may otherwise be required to pay or for which the Company is required
to indemnify them, subject to certain exclusions.
28
<PAGE>
OTHER EXPENSES OF ISSUANCE AND DISTRIBTUION
Accounting $ 10,000 *
Attorney Fees $ 25,000 *
Commissions (if B/D is used) $ 4,275,000
NASDAQ application $ 5,000 *
Printing Expense $ 5,000 *
Printing Expense $ 5,000 *
Standard & Poor's Listing $ 8,500 *
Registration Fees - SEC (1) $ 13,543
Transfer Agent $ 15,000 *
Total Offering Expense $ 4,362,043
(1) The Company is offering 1,500,000 shares through this Offering
that will incur $7,524 in registration fees; while, the selling
shareholders are offering 1,200,000 shares which will incur $6,019
in registration fees which the Company has agreed to pay on their
behalf.
* These figures represent estimations by management.
RECENT SALES OF UNREGISTERED SECURITIES
In January, 1999, GimmeaBid.com issued 6,173,400 shares of GimmeaBid.com's
common stock to officers and other individuals for services rendered to
GimmeaBid.com valued at $1,342,097 or $0.22 per share. The transactions were
isolated transactions with less than ten persons having a close affiliation with
either the Company or with an officer of the Company and was exempt from
registration under the Securities Act of 1933 (the "Act") pursuant to Section
4(2) of the Act because of not being part of a public offering.
In January, 1999, GimmeaBid.com sold 72,000 shares of GimmeaBid.com's
common stock for cash of $15,000. The transaction was an isolated transaction
with a person having a close affiliation with either the Company or with an
officer of the Company and was exempt from registration under the Securities Act
of 1933 (the "Act") pursuant to Section 4(2) of the Act because of not being
part of a public offering.
In January, 1999, GimmeaBid.com sold 20,000 shares of GimmeaBid.com's
common stock for cash at $0.25 per share, or $5,000. The transaction was an
isolated transaction with a person having a close affiliation with either the
Company or with an officer of the Company and was exempt from registration under
the Securities Act of 1933 (the "Act") pursuant to Section 4(2) of the Act
because of not being part of a public offering.
In January, 1999, GimmeaBid.com issued 3,000 shares of GimmeaBid.com's
common stock in settlement of debt of $1,233 and for services rendered to
GimmeaBid.com valued at $267 for a price of $0.50 per share. The transaction was
an isolated transaction with a person having a close affiliation with the
Company and was exempt from registration under the Securities Act of 1933 (the
"Act") pursuant to Section 4(2) of the Act because of not being part of a public
offering.
Beginning in February, 1999, and ending on October 30, 1999,
GimmeaBid.com sold 37,216 common shares in a series of transactions not
involving any public offering within the meaning of section 4(2) of the
Securities Act of 1933 (the "Act") and therefore exempt from registration under
section 5(a) of the Act. The shares were sold to a total of 25 persons close to
GimmeaBid.com and/or its officers and directors, no public solicitation took
place and no selling commissions were received by the officers and directors who
sold the shares. 16,400 of the shares were sold for cash at $5.00 per share. The
remaining 20,816 shares were exchanged for goods and services provided to
GimmeaBid.com at the exchange rate of one share for $5.00 of goods and services
29
<PAGE>
provided. The goods and services exchanged included graphic design, accounting
and tax preparations, printing, computer hardware & repairs, market research, a
copier and phone system, as well as marketing services, and general consulting.
The total value of cash, goods and services received in the private placement
totaled $186,080.00. The non-public offering was also exempt from registration
under section 5(6) of the Act pursuant to rule 504 promulgated under Regulation
D in that:
. GimmeaBid.com was not subject to the reporting requirements of section 13
or 15(d) of the Securities and Exchange Act of 1934;
. GimmeaBid.com was not an investment company;
. GimmeaBid.com was not a development stage company that either had no
specific business plan or purpose or had indicated that its business plan
was to engage in a merger or acquisition with an unidentified company or
companies, or other entity or person;
. The aggregate selling price for the Shares did not exceed $1,000,000, less
the aggregate offering price for all securities sold within the twelve
months before the start of and during the offering, in reliance on any
exemption under the section 3(b) of the Act, or in violation of section
5(a) of the Act.
Beginning in November, 1999, and ending on April 30, 2000,
GimmeaBid.com sold 321,605 common shares pursuant to rule 506 promulgated under
Regulation D. Accordingly the offering was exempt from registration under
section 5(a) of the Act. The shares were sold to a total of 45 who were all
accredited investors as that term is defined in rule 501 of Regulation D. No
public solicitation took place and no selling commissions were received by the
officers and directors who sold the shares. 67,160 of the shares were sold for
cash at $5.00 per share. The remaining 254,445 shares were exchanged for goods
and services provided to GimmeaBid.com at the exchange rate of one share for
every $5.00 of goods and services provided. The goods and services provided were
primarily part of our transaction with Integrated Concepts, Inc. wherein it was
issued 200,000 common shares in exchange for the development, hosting, design,
and launch of our Internet applications. The remaining shares were issued for
various services which included software, temporary hosting, market research,
content development, legal services, accounting services, business plan editing,
printing, data entry, and general consulting and research. The total value of
cash, goods and services received in the rule 506 offering totaled
$1,608,025.00.
EXHIBITS
Copies of the following documents are filed with this Registration
Statement, Form SB-2, as exhibits:
Exhibit No.
3.1 Articles of Incorporation
3.2 By-Laws
5 Opinion Re: Legality
10.1 Integrated Concepts Agreement
10.2 John Crowell Marketing Agreement
11 Statement re: computation of per share earnings
15 Letter on Un-Audited Interim Financial Information
23.1 Consent of Experts & Counsel
23.2 Consent of Experts & Counsel
27 Financial Data Schedule
99 Financial Projections
UNDERTAKINGS
GimmeaBid.com will:
(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this registration to:
(i) Include any prospectus required by section 10(a)(3) of the
Securities Act;
30
<PAGE>
(ii) Reflect in the prospectus any facts or events which, individually
or together, represent a fundamental change in the information in the
registration statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20% change
in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) Include any additional or changed material information on the
plan of distribution.
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
(3) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
If an underwriter is used in the offering, GimmeaBid.com will provide
to the underwriter at the closing specified in the underwriting agreement
certificates in such denominations and registered in such names as required by
the underwriter to permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities
act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the small business issuer pursuant to the foregoing provisions, or
otherwise, the small business issuer has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the small business issuer of expenses incurred or
paid by a director, officer or controlling person of the small business issuer
in the successful defense of any action, suit or proceeding) is asserted by
director, officer or controlling person in connection with the securities being
registered, the small business issuer will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, in the City of Dallas,
State of Texas, on May 8, 2000.
GimmeaBid.com, Inc., a Delaware corporation
By: /s/ Michael Wood
-------------------------------------------
Michael Wood, President
In accordance with the requirements of the Securities Act of 1933, the
registration statement was signed by the following persons in the capacities and
on the dates stated.
/s/ Michael Wood May 8, 2000
- -----------------------------------------
Michael Wood, Principal Executive Officer
and Director
/s/ Charles Wood May 8, 2000
- -----------------------------------------
Charles Wood, Vice President and Director
31
<PAGE>
/s/ Ann Wood May 8, 2000
- -----------------------------------------
Ann Wood, Secretary and Director
/s/ Maegan Anders May 8, 2000
- -----------------------------------------
Maegan Anders, Principal Financial Officer,
Principal Accounting Officer and Director
Exhibit 3.1
CERTIFICATE OF INCORPORATION
OF
LIFE SYSTEMS INTERNATIONAL, INC.
FIRST. The name of this corporation shall be:
LIFE SYSTEMS INTERNATIONAL, INC.
SECOND. Its registered office in the State of Delaware is to be located
at 4305 Lancaster Pike, in the City of Wilmington County of New Castle 19805,
and its registered agent at such address is CORPORATION SERVICE COMPANY.
THIRD. The purpose or purposes of the corporation shall be:
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
FOURTH. The total number of shares of stock which this corporation is
authorized to issue is:
Two Hundred Million (200,000,000) shares of the par value of $.001
each, amounting to Two Hundred Thousand Dollars ($200,000.00(.
FIFTH. The name and mailing address of the incorporator is as follows:
JANE S. KRAYER
Corporation Service Company
4305 Lancaster Pike
Wilmington, Delaware 19805
SIXTH. The Board of Directors shall have the power to adopt, amend or
repeal the by-laws.
IN WITNESS WHEREOF, the undersigned, being the incorporator herein
before named, has executed, signed and acknowledged this certificate of
incorporation this fifteenth day of May, A.D. 1986.
(Signature)
Jane S. Krayer, Incorporator
32
<PAGE>
CERTIFICATE OF AMENDMENT
of
CERTIFICATE OF INCORPORATION
LIFE SYSTEMS INTERNATIONAL, INC.
Life Systems International, Inc., a corporation organized and existing
under and by virtue of the General Corporation law of the state of Delaware.
DOES HEREBY CERTIFY:
FIRST: That the board of directors of said corporation at a meeting
duly held, adopted a resolution proposing and declaring advisable the following
amendment to the Certificate of Incorporation of said corporation.
RESOLVED, that the Certificate of Incorporation of Gordon
Corporation be amended by changing the first Article thereof so that,
as amended, said Article shall be and read as follows:
"The name of the corporation is Mesquite Country, Inc."
SECOND:That at a meeting of the stockholders duly held, stockholders
holding a majority of the outstanding stock entitled to vote thereon voted in
favor of the foregoing amendment.
THIRD:That the aforesaid amendment was duly adopted in accordance with
the applicable provisions of Section 242 and 228 of the General Corporation Law
of the state of Delaware.
IN WITNESS WHEREOF, said Life Systems International, Inc. has caused
this certificate to be signed by Marion Eversdyk, its president, and attested by
J. Michael Wood, its secretary, this 13th day of July, 1990.
Attest: LIFE SYSTEMS
INTERNATIONAL, INC.
By: (Signature) By: (Signature)
J. Michael Wood Marion Eversdyk
Secretary President
33
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
MESQUITE COUNTRY, INC., a corporation organized and existing under and
by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY
CERTIFY:
FIRST: That at a meeting of the Board of Directors of MESQUITE COUNTRY,
INC. resolutions were duly adopted setting forth a proposed amendment to the
Certificate of Incorporation of said corporation, declaring said amendment to be
advisable and calling a meeting of the stockholders of said corporation for
consideration thereof. The resolution setting forth the proposed amendment is as
follows:
RESOLVED,that the Certificate of Incorporation of this
corporation be amended by changing the 4. Article thereof so that, as
amended said Article shall be and read as follows:
"4. The total authorized stock of the corporation is Five
Million (5,000,0000) Common shares of the par value of One Tenth of One
Cent ($.001) amounting in the aggregate to Five Thousand Dollars
($5,000.00)
SECOND: That thereafter, pursuant to resolution of its Board of
Directors, a special meeting of the stockholders of said corporation was duly
called and held upon notice in accordance with Section 222 of the General
Corporation Law of the State of Delaware at which meeting the necessary number
of shares as required by statute were voted in favor of the amendment.
THIRD:That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, said MESQUITE COUNTRY, INC. has caused this
certificate to be signed by Charles Wood, its President, and attested by Michael
Wood, its Secretary, this 30th day of July, 1993.
By: (Signature)
Charles Wood, President
ATTEST:
By: (Signature)
Michael Wood, Secretary
34
<PAGE>
STATE OF DELAWARE
CERTIFICATE OF AMENDMENT
OF CERTIFICATE OF INCORPORATION
OF MESQUITE COUNTRY, INC.
- --------------------------------------------------------------------------------
a corporation organized and existing under and by virtue of the General
Corporation Law of the State of Delaware.
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of Mesquite Country, Inc.
resolutions were duly adopted setting forth a proposed amendment of the
Certificate of Incorporation of said corporation, declaring said amendment to be
advisable and calling a meeting of the stockholders of said corporation for
consideration thereof. The resolutions setting forth the proposed amendments are
as follows:
RESOLVED, that the Certificate of Incorporation of this corporation be amended
by changing the Article thereof number "FIRST" so that, as amended, said
Articles shall be and read as follows:
"The name of this corporation shall be GimmeaBid.com Inc."
RESOLVED, that the Certificate of Incorporation of this corporation be amended
by changing the Article thereof number "FOURTH" so that, as amended, said
Articles shall be and read as follows: "The total number of shares of stock
which this corporation is authorized to issue is Ten Million (10,000,000) shares
common having a par value of $0.001 each."
SECOND: That thereafter, pursuant to resolution of its Board of Directors, the
majority stockholder of said corporation executed a consent resolution in
accordance with Section 228 of the General Corporation Law of the State of
Delaware:
THIRD: That said amendment was duly adopted in accordance with the provisions of
Section 228 of the General Corporate Law of the State of Delaware:
FOURTH: That the capital of said corporation shall not be reduced under or by
reasons of said amendment.
IN WITNESS WHEREOF, said Mesquite Country, Inc. has caused this certificate to
be signed by Charles L. Wood, an Authorized Officer, this 16th day of June,
1999,
BY: /Charles L. Wood
---------------------------
TITLE OF OFFICER: President
35
<PAGE>
Exhibit 3.2
BY-LAWS
GimmeaBid.com, Inc.
(Delaware)
BY-LAWS
ARTICLE ONE
STOCKHOLDERS
SECTION 1.1. Annual Meeting. An annual meeting of stockholders for the
election of directors and for the transaction of such other business as may
properly be presented at the meeting shall be held on such date and at such time
as may from time to time be designated by resolution duly adopted by the Board
of Directors, at such place (within or without the State of Delaware) as the
Board of Directors, the Executive Committee, if any, or the President may fix.
SECTION 1.2. Special Meetings. A special meeting of stockholders may be
called for any proper purpose, notice of which was given in the notice of
meeting, at any time by the Board of Directors, the Executive Committee, if any,
or the President and shall be called by any of them or by the Secretary upon
receipt of a written request to do so specifying the matter or matters,
appropriate for action at such a meeting, that proposed to be presented at the
meeting, signed by holders of record of a majority of the shares of stock that
would be entitled to be voted on such matter or matters if the meeting were held
on the day such request is received and the record date for such meeting were
the close of business on the preceding day. Any such meeting shall be held on
such date, at such time and at such place, within or without the State of
Delaware, as shall be determined by the body person calling such meeting and as
shall be stated in the notice of such meeting.
SECTION 1.3. Notice of Meeting. For each meeting of stockholders
written notice shall be given stating the place, date and hour and, in the case
of a special meeting, the purpose or purposes for which the meeting is called
and, if other than the place where the meeting is to be held, the place within
the city in which the meeting is to be held where the list of stockholders
required by Section 1.10 is to be open for examination at least 10 day prior to
the meeting. Except as otherwise provided by Delaware law, the written notice of
any meeting shall be given not less than 10 nor more than 60 days before the
date of the meeting to each stockholder entitled to vote at such meeting. If
mailed, notice shall be deemed to be given when deposited in the United States
mail, postage prepaid, directed to the stockholder at his address as it appears
on the records of the Corporation.
SECTION 1.4. Quorum. Except as otherwise required by law or in the
Certificate of Incorporation, the holders of record of a majority of the shares
of stock entitled to be voted present in person or represented by proxy at a
meeting shall constitute a quorum for the transaction of business at the
meeting, but, in the absence of a quorum, the holders of record present in
person or represented by proxy at such meeting may vote to adjourn the meeting
from time to time until a quorum is obtained.
SECTION 1.5. Presiding Officer and Secretary at Meetings. Each meeting
of stockholders shall be presided over by the President or, if he is not
present, by the person designated in writing by the President or, if no such
person is present, then by a person designated by the Board of Directors; if no
such person is present , then the stockholders at the meeting present in person
or represented by proxy shall by plurality vote elect a person to act as
chairman of the meeting. The Secretary, or in his absence an Assistant
Secretary, shall act as secretary of the meeting, or, if no such officer is
present, a secretary of the meeting shall be designated by the chairman of the
meeting.
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SECTION 1.6. Voting. Except as otherwise provided by law or in the
Certificate of Incorporation, and subject to the provisions of Section 1.11:
(a) each stockholder of record shall be entitled at every
meeting of stockholders to one vote for each share standing in this
name on the books of the Corporation.
(b) directors shall be elected by a plurality vote;
(c) each matter, other than election of directors, properly
presented to any meeting, shall be decided by a majority of the votes
cast on the matter; and
(d) election of directors and the vote on any other matter
presented to a meeting shall be written ballot only if so ordered by
the chairman of the meeting or if so requested by any stockholder at
the meeting present in person or represented by proxy entitled to vote
in such election or on such matter, as the case may be.
SECTION 1.7. Proxies. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for him by
proxy, but no such proxy shall be voted or acted upon after three years from its
date, unless the proxy provides for a longer period.
SECTION 1.8. Adjourned Meetings. A meeting of stockholders may be
adjourned to another time or place as provided in Section 1.4 or 1.6(c). Unless
the Board of Directors fixes a new record date, stockholders of record for an
adjourned meeting shall be as originally determined for the meeting from which
the adjournment was taken. If the adjournment is for more than 30 days, or if
after the adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given to each stockholder of record
entitled to vote at the meeting. At the adjourned meeting, provided a quorum is
present, any business may be transacted that might have been transacted at the
meeting as originally called.
SECTION 1.9. Consent of Stockholders in Lieu of Meeting. Any action
that may be taken at any annual or special meeting of stockholders may be taken
without a meeting, without prior notice and without a vote, if a consent in
writing, setting forth the action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted. Notice of the taking such
action shall be given promptly to each stockholder, if any, that would have been
entitled to vote thereon at a meeting of stockholders and that did not consent
thereto in writing.
SECTION 1.10. List of Stockholders Entitled to Vote. A complete list of
the stockholders entitled to vote at every meeting of stockholders, arranged in
alphabetical order and showing the address of each stockholder and the number of
shares registered in the name of each stockholder, shall be prepared and shall
be open to the examination of any stockholder for any purpose germane to the
meeting, during ordinary business hours, for a period of at least 10 days prior
to the meeting, either at a place within the city where the meeting is to be
held, which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. Such list shall be
produced and kept at the time and place of the meeting during the whole time
thereof and may be inspected by any stockholder who is present.
SECTION 1.11. Fixing of Record Date. In order that the Corporation may
determine the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action, the Board of Directors may fix, in
advance, a record date, which shall not be more than 60 nor less than 10 days
before the date of such meeting, nor more than 60 days prior to any other
action. If no record date is fixed, the record date for determining stockholders
entitled to notice of or to vote at a meeting of stockholders shall be at the
close of business on the day next preceding the day on which notice is given,
or, if notice is waived, at the close of business on the day next preceding the
day on which the meeting is held; the record date for determining stockholders
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entitled to express consent to corporate action I writing without a meeting,
when no prior action by the Board of Directors is necessary, shall be the day on
which the first written consent is expressed; and the record date for any other
purpose shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto.
ARTICLE TWO
DIRECTORS
SECTION 2.1. General Powers. The business and affairs of the
Corporation shall be managed by or under the direction of the Board of
Directors.
SECTION 2.2. Number; Term of Office. The number of directors that shall
constitute the whole Board of Directors shall be determined by action of the
Board of Directors taken by the affirmative vote of a majority of the whole
board of Directors or, if the Board of Directors shall not have taken such
action, it shall be the number of directors elected by the sole incorporator.
Directors shall be elected at the annual meeting of stockholders to hold office,
subject to Sections 2.3 and 2.4, until the next annual meeting of stockholders
and until their respective successors are elected and qualified.
SECTION 2.3. Resignation. Any director of the Corporation may resign at
any time by giving written notice of such resignation to the Board of Directors,
the President or the Secretary of the Corporation. Any such resignation shall
take effect at the time specified therein or, if no time is specified, upon
receipt thereof by the Board of Directors or one of the above-named officers.
Unless specified therein, the acceptance of such resignation shall not be
necessary to make it effective. When one or more directors shall resign from the
Board of Directors effective at a future date, a majority of the directors then
in office, including those who have so resigned, shall have power to fill such
vacancy or vacancies, the vote thereon to take effect when such resignation or
resignations shall become effective, and each director so chosen shall hold
office as provided in these By-Laws in the filling of other vacancies.
SECTION 2.4. Removal. Any one or more directors may be removed, with or
without cause, by the holders of a majority of the shares entitled to vote at an
election of directors.
SECTION 2.5. Vacancies; Newly Created Directorships. Vacancies and
newly created directorships resulting from any increase in the authorized number
of directors may be filled by a vote of a majority of the directors then in
office, although less than a quorum, or by the sole remaining director, and the
directors so chosen shall hold office, subjection Sections 2.3 and 2.4, until
the next annual meeting of stockholders and until their respective successors
are elected and qualified.
SECTION 2.6. Regular and Annual meetings; Notice. Regular meetings of
the Board of Directors shall be held at such time and at such place (within or
without the State of Delaware) as the Board of Directors may from time to time
Prescribe. No notice need be given of any regular meeting, and a notice, if
given, need not specify the purposes thereof. A meeting of the Board of
Directors may be held without notice immediately after an annual meeting of
stockholders at the same place as that at which such meeting was held.
SECTION 2.7. Special Meeting; Notice. A special meeting of the Board of
Directors may be called at any time by the Board of Directors, the Executive
Committee, if any, the President or any person acting in the place of the
President and shall be called by any one of them or by the Secretary upon
receipt of a written request to do so specifying the matter or matters,
appropriate for action at such a meeting, proposed to be presented at the
meeting and signed by at least two directors, except when there is only one
director, in which case signed by such director. Any such meeting shall be held
at such time and at such place (within or without the State of Delaware) as
shall be determined by the body or person calling such meeting. Notice of such
meeting stating the time and place thereof shall be given (a) by deposit of the
notice in the United States mail, first class, postage prepaid, at least seven
days before the day fixed for the meeting, addressed to each director at his
address as it appears on the Corporation's records or at such other address as
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the director may have furnished the Corporation for that purpose, or (b) by
delivery of the notice similarly addressed for dispatch by telegraph, cable or
radio or by delivery of the notice by telephone or in person, in each case at
least 24 hours before the time fixed for the meeting.
SECTION 2.8. Presiding Officer and Secretary at Meetings. Each meeting
of the Board of Directors shall be presided over by the President, if a
director, or if the President is not a director, by such member of the Board of
Directors as shall be chosen by a majority of the directors present. The
Secretary, or in his absence an Assistant Secretary, shall act as secretary of
the meeting, or if not such officer is present, a secretary of the meeting shall
be designated by the person presiding over the meeting.
SECTION 2.9. Quorum; Voting. A majority of the whole Board of Directors
shall constitute a quorum for the transaction of business, but in the absence of
a quorum a majority of those present (or if only one be present, then that one)
may adjourn the meeting, without notice other than announcement at the meeting,
until such time as a quorum is present. Except as otherwise required by law, the
Certificate of Incorporation or the By-Laws, the vote of a majority of the
directors present at a meeting at which a quorum is present shall be the acted
of the Board of Directors.
SECTION 2.10. Meeting by Telephone. Members of the Board of Directors
or of any committee thereof may participate in meetings of the Board of
Directors or of such committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and such participation shall constitute presence in
Person at such meeting.
SECTION 2.11. Action Without Meeting. Any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting if all members of he Board of Directors or of
such committee, as the case may be, consent thereto in writing and the writing
or writings are filed with the minutes of proceedings of the Board of Directors
or of such committee.
SECTION 2.12. Executive and Other Committees. The Board of Directors
may, by resolution passed by a majority of the whole Board of Directors,
designate an Executive Committee or one or more other committees, each such
committee to consist of one or more directors as the Board of Directors may from
time to time determine. Any such committee, to the extent provided in such
resolution or resolutions, shall have and may exercise all the powers and
authority of the Board of Directors in the management of the business and
affairs of the Corporation, including the power to authorize the seal of the
Corporation to be affixed to all papers that may require it; but no such
committee shall have such power or authority in reference to amending the
Certificate of Incorporation (except for such amendments as by law are expressly
permitted to be made by committees of the Board of Directors), adopting an
agreement of merger or consolidation, recommending to the stockholders the sale,
lease or exchange of all or substantially all of the Corporation's property and
assets, recommending to the stockholders a dissolution of the Corporation's
property and assets, recommending to the stockholders a dissolution of the
Corporation or a revocation of a dissolution, or amending the By-Laws; and
unless the resolution shall expressly so provide, no such committee shall have
the power or authority to declare a dividend or to authorize the issuance of
stock or to adopt a certificate of ownership and merger. The Board of Directors
may designate one or more directors as alternate members of any committee who,
in the absence or disqualification of a member or members of a committee at a
meeting, may replace such absent or disqualified member or members at such
meeting. In the absence of such a designation, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of any such absent or disqualified
member. Each such committee other than the Executive Committee shall have such
name as may be determined from time to time by the Board of Directors.
SECTION 2.13. Compensation. No director shall receive any stated salary
for his services as a director or as a member of a committee but shall receive
such sum, if any, as may from time to time by fixed by the Board of Directors
for attendance at each meeting of the Board of Directors or of a committee. He
may also be reimbursed for his expenses in attending any meeting. However, any
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director who serves the Corporation in any capacity other than as a member of
the Board of Directors or of a committee may receive compensation therefor.
ARTICLE THREE
OFFICERS
SECTION 3.1. Election; Qualification. The officers of the Corporation
shall be a President, a Secretary and a Treasurer, each of whom shall be elected
by the Board of Directors. Two or more offices may be held by the same person.
SECTION 3.2. Term of Office. Each officer shall hold office from the
time of his election and qualification until the expiration of the term for
which he is elected and until the time his successor is elected and qualified,
unless sooner he shall die or resign or shall be removed pursuant to Section
3.4.
SECTION 3.3. Resignation. Any officer of the Corporation may resign at
any time by giving written notice of such resignation to the Board of Directors,
the President or the Secretary of the Corporation. Any such resignation shall
take effect at the time specified therein or, if no time be specified, upon
receipt thereof by the Board of Directors or one of the above-named officers.
Unless specified therein, the acceptance of such resignation shall not be
necessary to make it effective.
SECTION 3.4. Removal. Any officer of the Corporation may be removed at
any time, with or without cause, by the vote of a majority of the whole Board of
Directors.
SECTION 3.5. Vacancies. Any vacancy, however caused, in any office of
the Corporation may be filled by the Board of Directors.
SECTION 3.3. Compensation. The compensation of each officer shall be
such as the Board of Directors may from time to time determine.
SECTION 3.7. President. The President shall have charge of the general
business and affairs of the Corporation under the supervision of the Chairman of
the Board, subject to the right of the Board of Directors to confer specified
powers on officers and subject generally to the direction of the Board of
Directors and the Executive Committee, if any.
SECTION 3.8. Secretary. The Secretary shall keep the minutes of all
meetings of stockholders and of the Board of Directors. He shall be custodian of
the corporate seal and shall affix it or cause it to be affixed to such
instruments as require such seal and attest the same and shall exercise the
powers and shall perform the duties incident to the office of the Secretary,
subject to the direction of the Board of Directors and the Executive Committee,
if any.
SECTION 3.9. Treasurer. The Treasurer shall have care of all funds and
securities of the Corporation and shall exercise the powers and shall perform
the duties incident to the office of Treasurer, subject to the direction of the
Board of Directors and the Executive Committee, if any.
SECTION 3.12. Other Officers. The Board of Directors may designate any
other officers of the Corporation, including one or more Assistant Secretaries
and one or more Assistant Treasurers, who shall exercise the powers and shall
perform the duties incident to their offices, subject to direction of the Board
of Directors and the Executive Committee, if any.
ARTICLE FOUR
INDEMNIFICATION OF OFFICERS AND DIRECTORS
SECTION 4.1. Indemnification. (a) The Corporation shall indemnify,
subject to the requirements of subsection (d) of this Section, any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the Corporation),
by reason of the fact that he is or was a director, officer, employee or agent
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of the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of other corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed tot
he best interests of the Corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Corporation and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(b) The Corporation shall indemnify, subject to the requirements of
subsection (d) of this Section, any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorney's fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the Corporation unless and only to the extent that he Court of
Chancery of the State of Delaware or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the Court of
Chancery of the State of Delaware or such other court shall deem proper.
(c) To the extent that a director, officer, employee or agent of the
Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
Section, or in defense of any claim, issue or matter therein, the Corporation
shall indemnify him against expenses (including attorney's fees) actually and
reasonably incurred by him in connection therewith.
(d) Any indemnification under subsection (a) and (b) of this Section
(unless ordered by a court) shall be made by the Corporation only as authorized
in the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in subsections (a) and (b) of this
Section. Such determination shall be made (1) by the Board of Directors by a
majority vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding, or (2) if such a quorum is not obtainable, or, even
if obtainable a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, or (3) by the stockholders.
(e) Expenses incurred by a director, officer, employee or agent in
defending a civil or criminal action, suit or proceeding may be paid by the
Corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the Corporation as authorized in this Section.
Such expenses incurred by other employees and agents may be so paid upon such
terms and conditions, if any, as the Board of Directors deems appropriate.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this Section shall not limit the
Corporation from providing any other indemnification or advancement of expenses
permitted by law nor shall they be deemed exclusive of any rights to which a
person seeking indemnification or advancement of expenses may be entitled under
any by-law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity whole holding such office.
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(g) The Corporation may purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him against
such liability under the provisions of this Section.
(h) For the purposes of this Section, references to "the Corporation"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, employees or
agents, so that any person who is or was a director, officer, employee or agent
of such constituent corporation, or is or was serving at the request of such
constituent corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, shall stand
in the same position under the provisions of this Section with respect to the
resulting or surviving corporation as he would have with respect to such
constituent corporation if its separate existence had continued.
(i)For purposes of this Section, reference to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the Corporation" shall include any
service as director, officer, employee or agent of the Corporation which imposes
duties on, or involves services by, such director, officer, employee, or agent
with respect to any employee benefit plan' its participants, or beneficiaries;
and a person who acted in good faith and in a manner he reasonably believed to
be in the interest of the participants and beneficiaries of an employee benefit
plan shall be deemed to have acted in a manner "not opposed to the best
interests of the Corporation" as referred to in this Section.
(j) The indemnification of advancement of expenses provided by, or
granted pursuant to, this Section shall, unless otherwise provided when
authorized or ratified by the Board of Directors, continue as to a person who
has cased to be a director, officer, employee or agent of the Corporation and
shall inure to the benefit of the heirs, executors and administrators of such a
person.
ARTICLE FIVE
CAPITAL STOCK
SECTION 5.1. Stock Certificates. The interest of each holder of stock
of the Corporation shall be evidenced by a certificate or certificates in such
from as the Board of Directors may from time to time prescribe, provided the
Board of Directors may by resolution provide that some or all of any or all
classes or series of its stock shall be uncertified shares. Notwithstanding the
adoption of such a resolution by the Board of Directors, every holder of
uncertified shares, upon request, shall be entitled to receive from the
Corporation a certificate representing the number of shares registered in such
stockholder's name on the books of the Corporation. Each stock certificate and
certificate representing previously uncertified shares shall be signed by or in
the name of the Corporation by the President and by the Treasurer or an
Assistant Treasurer or the Secretary or an Assistant Secretary. Any or all of
the signatures appearing on any such certificate or certificates may be a
facsimile. If any officer, transfer agent or agent or registrar who has signed
or whose facsimile signature has been placed upon any such certificate shall
have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the Corporation with the same effect
as if he were such officer, transfer agent or registrar at the date of issue.
SECTION 5.2. Transfer of Stock. Shares of stock of the Corporation
shall be transferable on the books of the Corporation by the holder of record
thereof or by his attorney, pursuant to applicable law and such rules and
regulations as the Board of Directors shall form time to time prescribe. Any
shares represented by a certificate shall be transferable only upon surrender of
the certificate with an assignment endorsed thereon or attached thereto duly
executed and with such proof of authenticity of signatures as the Corporation
may reasonably require.
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SECTION 5.3. Holders of Record. Prior to due presentment for
registration of transfer, the Corporation may treat the holder of record of a
share of its stock as the complete owner thereof exclusively entitled to vote to
receive notifications and otherwise entitled to all the rights and powers of a
complete owner thereof, notwithstanding notice to the contrary.
SECTION 5.4. Lost, Destroyed, Mutilated or Stolen Certificates. The
Corporation shall issue a new certificate of stock or uncertified shares to
replace a certificate therefore issued by it alleged to have been lost,
destroyed, mutilated or stolen, of the owner or his legal representative (i)
submits a written request for the replacement of the certificate, together with
the mutilated certificate of such evidence as the Board of Directors may deem
satisfactory of the loss, destruction or theft of the certificate, and such
request is received by the Corporation before the Corporation has notice that
the certificate has been acquired by a bona fide purchaser, (ii) files with the
Corporation a bond sufficient to indemnify the Corporation against any claim
that may be made against it on account of the alleged loss, destruction,
mutilation or theft of any such certificate or the issuance of any such new
certificate and (iii) satisfies such other terms and conditions as the Board of
Directors may from time to time prescribe.
ARTICLE SIX
MISCELLANEOUS
SECTION 6.1. Waiver of Notice. Whenever notice is required to be given
by the Certificate of Incorporation, the By-Laws or any provisions of the
General Corporation Law of the State of Delaware, a written waiver thereof,
signed by the person entitled to notice, whether before or after the time
required for such notice, shall be deemed equivalent to notice. Attendance of a
person at a meeting shall constitute a waiver of notice of such meeting, except
when the person attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened. Neither the business to be transacted at,
nor the purpose of, any regular or special meeting of the stockholders,
directors or members of a committee of directors need be specified in any
written waiver of notice.
SECTION 6.2. Fiscal Year. The fiscal year of the Corporation shall
start on such date as the Board of Directors shall from time to time prescribe.
SECTION 6.3. Corporate Seal. The corporate seal shall be in such from
as the Board of Directors may from time to time prescribe, and the same may be
used by causing it or a facsimile thereof to be impressed or affixed or in any
other manner reproduced.
ARTICLE SEVEN
AMENDMENT OF BY-LAWS
SECTION 7.1. Amendment. The By-Laws may be adopted, amended or repealed
by the stockholders of the Corporation or by the Board of Directors by a
majority vote of the whole Board of Directors.
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Exhibit 5
OPINION Re: LEGALITY
OPINION OF FABIAN & CLENDENIN AS TO
THE LEGALITY OF THE SHARES BEING REGISTERED
March 1, 2000
GimmeaBid.com, Inc.
174-G World Trade Center
2050 Stemmons Freeway
P. O. Box 420132
Dallas, Texas 75342
Re: Registration and Issuance of GimmeaBid.com, Inc. Common Stock to
Public Investors
Dear Mr. Wood:
This firm has acted as counsel to GimmeaBid.com, Inc., a Delaware
corporation ("the Company"), in connection with its registration of 1,500,000
shares of its common stock ("the Shares") for sale to the public through the
Company's Prospectus included within its Registration Statement on Form SB-2 as
filed with the Securities and Exchange Commission on May 5, 2000.
In connection with this representation, we have examined the originals,
or copies identified to our satisfaction, of such minutes, agreements, corporate
records and filings and other documents necessary to our opinion contained in
this letter. The Company has also relied as to certain matters of fact upon
representations made to us by officers and agents of the Company. Based upon and
in reliance on the foregoing, it is our opinion that:
1. The Company has been duly incorporated and is validly existing
and in good standing as a corporation under the laws of the
State of Delaware; and has full corporate power and authority
to own its properties and conduct its business as described in
the Prospectus referred to above.
2. When issued and distributed to the purchasers thereof, the
Shares will be duly and validly issued and will be fully paid
and non-assessable.
3. The stockholders of the Company have no pre-emptive rights to
acquire additional Shares of the Company's Common Stock.
The Company hereby consents to the use of our name in the Prospectus
and therein being disclosed by counsel to the Company in this matter.
Very Truly Yours,
Fabian & Clendenin
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Exhibit 10.1
MATERIAL CONTRACTS
INTERNET SERVICES AGREEMENT FOR DEVELOPMENT, HOSTING,
AND MAINTENANCE OF AN INTERNET SITE
THIS SERVICES AGREEMENT (the "Agreement") is entered into as of
December 30, 1999 (the "Effective Date") by and between Integrated Concepts,
Inc. ("ICI"), a Texas Corporation, with offices located at 14683 Midway Road,
Suite 200, Addison, Texas 75001 and GimmeaBid.com Inc., by and on behalf of
itself and its affiliates ("collectively GBC"), a Delaware Corporation, with
offices located at 176 World Trade Center, 2050 Stemmons Freeway Dallas, Texas
75342.
WHEREAS, ICI provides a variety of technical services relating to the
development and integration of software into Internet applications and to the
hosting and maintenance of Internet sites;
WHEREAS, GBC desires to establish a wholesale/retail presence on the
Internet with three (3), World Wide Web (WWW) sites providing a digital
marketplace.
WHEREAS, GBC has requested that ICI develop, host, and maintain such
Internet sites for GBC;
NOW, THEREFORE, in consideration of the above premises, the parties
hereby agree as follows:
1. Definitions. The terms used in this Agreement have the following
meanings:
o Additional Work Order. The term "Additional Work Order" means a work
order that is entered into by the parties subsequent to and in
accordance with this Agreement.
o Confidential Information. The term "Confidential Information" means
any written or oral information, including but not limited to,
documentation and other tangible or intangible discoveries, ideas,
concepts, software, designs, drawings, specifications, techniques,
models, information data, source code, object code, diagrams, flow
charts, procedures and "know-how" supplied by one party to the
other.
o Deliverables. Deliverables are items identified in the Initial or
Additional Work Orders and/or the Maintenance Agreement as being
constructed by ICI and delivered to GBC pursuant to the
specifications in the Initial or Additional Work Orders and/or the
Maintenance Agreement.
o Developments. The term "Developments" means all Deliverables
provided by ICI to GBC under the terms of this Agreement, as well as
all inventions, improvements, discoveries, methods, services,
software, documents, materials, and works of authorship, whether
patentable or copyrightable or not, that are associated with the
Deliverables and that are created, made, conceived, reduced to
practice, or suggested by ICI, individually or jointly with GBC,
during the term of this Agreement.
o Initial Work Order. The term "Initial Work Order" means the work
order that is entered into by the parties as part of this Agreement.
The Initial Work Order is provided in Exhibit A.
o Intellectual Property Rights. The term "Intellectual Property
Rights" means any and all rights that may exist from time to time in
a specified jurisdiction under patent law, copyright law, publicity
rights law, moral rights law, trade secret law, trademark law,
unfair competition law, or other similar protections.
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o Trademarks. The term "Trademarks" means any and all trademarks,
trade names, logos, service marks, quality designations and other
proprietary words and symbols that either party uses to identify its
products, services, or business.
o Maintenance Agreement. The term " Maintenance Agreement" means the
agreement for maintenance of the Deliverables that is entered into
by the parties as part of this Agreement. The Maintenance Agreement
is provided in Exhibit B.
o Web. The term "Web" means that part of the Internet called the World
Wide Web, which uses the hypertext markup language ("HTML") and
hypertext transport protocol ("HTTP") and their derivatives or
equivalents.
o Web Page. The term "Web Page" means an HTML-based computer file that
is designed to be exhibited on the Web and includes text, graphics,
or forms.
o Web Site. The term "Web Site" means a group of Web Pages, together
with supporting files and programming.
o Year 2000 Compliant. The term "Year 2000 Compliant" means that the
item described will manage and manipulate data involving dates and
will include the proper century designation in date-related user and
data interface functionality, including single century formulas,
multi-century formulas, and leap years, and will not abnormally
terminate or provide invalid or incorrect results as a result of
date data representing or referencing different centuries or more
than one century.
2. Services to be Performed by ICI. ICI will perform services and provide
the Deliverables described in the Initial Work Order, the Maintenance
Agreement, and any Additional Work Orders entered into by the parties.
The Initial Work Order will consist of Phases 1-5 with a total cost to
GBC of $1,496,849. ICI will use all reasonable efforts to provide the
Deliverables for each milestone specified in the Initial Work Order,
the Maintenance Agreement, and any Additional Work Orders within the
milestone scheduled completion period for each Phase.
o Right to Subcontract. ICI may assign or subcontract its work to be
performed under this Agreement to one or more qualified third
parties who may be operating on a consulting or subcontracting basis
for ICI.
o Modification of Services. Services may be added or changed from time
to time upon both parties' execution of a revised or supplemental
version of the Initial Work Order or the Maintenance Agreement,
and/or upon both parties entering into an Additional Work Order.
3. Delivery and Acceptance. Upon the completion of each milestone, ICI
will deliver all Deliverables for the Phase to GBC for written
acceptance in a milestone and delivery acceptance agreement at the
Technical Interchange Meeting between the parties as defined in the
Initial Work Order, the Maintenance Agreement, and/or an Additional
Work Order. The total cost to develop the Deliverables within each
milestone shall not exceed $100,000. At the meeting, GBC will give any
reason for rejection of the Deliverables in reasonable detail. ICI will
use reasonable efforts to correct any deficiencies or non-conformities
and promptly resubmit the rejected items. GBC will have the option to
request up to, two (2) revisions of any deficiencies or
non-conformities per each milestone and must respond to any resubmital
within five (5) business days. Failure to respond within five (5)
business days will mean the milestone has been accepted without defects
by GBC.
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4. Compensation. GBC will pay ICI for work performed in accordance with
the Initial Work Order, the Maintenance Agreement, and any Additional
Work Orders entered into by the parties, and for additional work
mutually agreed upon by the parties.
o Initial Payment. Upon execution of this Agreement, GBC will pay ICI
an Initial Payment of $100,000.00 of the Total Fee set forth in the
Initial Work Order. The Initial Payment will be applied against
subsequent services provided by ICI in accordance with the Initial
Work Order. In addition to the Initial Payment, GBC will transfer
ownership and assign 200,000 shares of GBC common stock and all
registration rights for the common stock at a value of $5.00 per
share to ICI upon execution of this Agreement.
In the event that GBC completes a initial public offering by filing
the appropriate documentation with the US Securities and Exchange
Commission; ICI shall have the right to (i) sell, transfer, assign,
or otherwise dispose of 100,000 shares of common stock at the time
GBC's common stock becomes available for public trading and (ii)
sell, transfer, assign, or otherwise dispose of 100,000 shares of
common stock after the one year anniversary date of the initial
public offering. GBC warrants that ICI shall irrevocably have no
restrictions or limitations on the common stock except those
mutually agreed to by both parties and except those that are in
compliance with applicable federal and state securities laws. In the
event GBC does not complete its initial public offering, ICI shall
have the right to present a written request to GBC to purchase the
200,000 shares of common stock from ICI at a price to be mutually
agreed to by both parties and shall not be less than the value of
the common stock as set forth in Section 4.1 Initial Payment.
Further, GBC shall not reasonably withhold written consent to comply
with the purchase request presented by ICI and warrants and
represents that the transaction shall take place not later than
thirty (30) days from a date mutually agreed to by both parties.
o Further Initial Payments. Unless otherwise specified in an
Additional Work Order, GBC will upon execution of the Additional
Work Order pay ICI a Further Initial Payment equal to fifty percent
(50%) of the Total Fee set forth in the Additional Work Order. In
addition, upon modification of an existing Work Order, GBC will pay
ICI a Further Initial Payment equal to fifty (50%) of any increase
in the Total Fee for the Work Order.
o Maintenance Fee. Beginning one year after the completion of the
Deliverables as set forth in the initial Work Order following
execution of this Agreement, GBC will in consideration for the
services performed by ICI in accordance with the Maintenance
Agreement pay ICI an Annual Maintenance Fee equal to fifteen percent
(15%) of the Total Fee set forth in the Initial Work Order. ICI will
invoice GBC for the Annual Maintenance Fee annually, beginning one
year after the completion date of the Deliverables as set forth in
the Initial Work Order and any Additional Work Orders following the
execution of the Agreement.
o Invoicing. For each milestone, ICI will submit invoices to GBC for
services furnished and other expenses covered by the Agreement. All
invoices will specifically refer to the Phase to which they relate
and will separately set forth-additional expenses, and all
applicable taxes, if any, authorized by GBC for reimbursement.
o Additional Work. Unless otherwise agreed in advance, any follow-on
or additional work not described in a Work Order will be performed
by ICI on a time and material basis at ICI's then-current rates for
such work.
o Payment. Payment will be made by GBC within 15 days of receipt of
ICI's invoice. GBC agrees to pay a late charge of one (1.5) percent
per month on amounts not timely paid and to be responsible for any
collection fees.
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5. Ownership Rights.
o Ownership of Developments. Except as set forth below in this Section
5, ICI will own all Intellectual Property Rights in and to the
Developments produced or provided by ICI under this Agreement. To
the extent GBC has any interest in Intellectual Property Rights to
the Developments, GBC agrees to assign, and upon its creation,
automatically assigns to ICI the ownership of such Intellectual
Property Rights without the necessity of any further consideration.
GBC will fully cooperate with ICI by executing and delivering to ICI
all applications, certificates, instruments, and other documents
requested by ICI in order to obtain any patents or copyright
registrations for the Developments in the United States or foreign
countries.
o GBC License. The parties contemplate that the Deliverables will be
initially hosted on ICI's equipment. Effective upon the payment of
fees and expenses invoiced by ICI with respect to the Deliverables,
GBC will have a nonexclusive and royalty free license ("GBC
License") under the Intellectual Property Rights for such use of the
Deliverables. Pursuant to this license, GBC may connect to the Web
Site through the Internet and alter products and service offerings
and assorted information. In no case will GBC be provided with
direct access, by modem or otherwise, to ICI's computer system,
other than access that is generally available to third parties
through the Internet.
o License Option. Effective upon the payment of the fees and expenses
invoiced by ICI with respect to the Deliverables, GBC will have a
nonexclusive license ("GBC Site License") to install and use the
Deliverables in machine-readable form at a single site within GBC's
organization. Pursuant to such license, GBC may make additional
copies of the Deliverables, modify, alter, enhance, update or
upgrade the Deliverables for internal use and installation by GBC.
ICI will also make available the source code version of the
Deliverables, as requested by GBC, for internal support and
maintenance purposes only. GBC agrees to treat such source code as
Confidential Information of ICI. In the event GBC exercises its
option, GBC may at its sole discretion modify, alter, enhance,
update or upgrade such source code, and is cautioned that migrating
the Deliverables to a GBC platform may disrupt or impair the
functioning of the Deliverables. In the event GBC does migrate the
Deliverables, ICI will, unless otherwise agreed in advance, provide
technical support assistance during such migration on a follow-on or
additional work basis. GBC will be solely responsible for obtaining
any third-party licenses required to have full functionality of the
Deliverables at GBC's site.
o Suspension of Licenses. The GBC License, option for the GBC Site
License, and/or GBC Site License will be suspended automatically
upon non-payment by GBC of the any fees invoiced by ICI in
accordance with this Agreement. Suspension of the GBC License,
option for the GBC Site License, and/or GBC Site License will not
relieve GBC of its payment obligations to ICI.
o GBC Property. All right, title, and interest in and to any graphics
uniquely associated with GBC, data relating to GBC's business, and
data collected by GBC through the Web Site are and will remain or
become the property of GBC.
o Trademarks. Each party will retain full and exclusive right and
control over its Trademarks. Neither party is granted any rights to
own or use the Trademarks of the other party and nothing in this
Agreement will be deemed to grant either party any right, title, or
interest in the Trademarks of the other. To the extent a party
obtains any rights in the Trademarks of the other, that party agrees
to assign, and upon obtaining such rights, automatically assigns the
rights back to the other without the necessity of any further
consideration.
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o Third Party Interest. GBC's interest in and obligations with respect
to any programming, materials, or data to be obtained from
third-party vendors, whether or not obtained with the assistance of
ICI, will be determined in accordance with the agreements and
policies of such vendors.
6. Confidentiality.
o GBC Acknowledgment. GBC acknowledges that in order to perform the
services called for in this Agreement, it will be necessary for ICI
to disclose to GBC certain Confidential Information that has been
developed by ICI at great expense and that has required considerable
effort on the part of skilled professionals. GBC further
acknowledges that the Deliverables will necessarily incorporate such
Confidential Information.
o ICI Acknowledgment. ICI acknowledges that customer data provided or
collected by GBC represents Confidential Information of GBC.
o Duty to Keep Confidential. Each party agrees not to disclose,
transfer, use, copy, or allow access to any Confidential Information
of the other party except as provided under this Agreement. In no
event will either party disclose Confidential Information of the
other party to any competitors of the disclosing party.
o Limitation. Neither party will have an obligation of confidentiality
with respect to any portion of the Confidential Information of the
other party that: (1) the receiving party can establish with
documentary evidence that it independently knew or developed without
using information obtained from the disclosing party; (2) the
receiving party lawfully obtained from a third party under no
obligation of confidentiality; or (3) became available to the public
other than as a result of an act or omission of the receiving party
or any of its employees, agents, representatives, or contractors.
7. Web Page Content. GBC will have sole responsibility for all content in
its Web Pages and for all information or data disseminated thereby.
o Responsibility for Images. GBC accepts final responsibility, except
for ICI's development credit, for the selection and use of all
creative, audiovisual, and personal works and images, including
graphics, text, formats, characters, icons, information, data, sound
recordings, links, and Trademarks (collectively, the "Images"),
which are included in any Web Pages.
o Responsibility for Disclaimers. GBC will have the sole right and
responsibility, except for in connection with ICI's development
credit, to determine the scope of copyright notices, Trademark
notices, date of release warnings that information may not be kept
up-to-date, content disclaimers and limitations of liability,
statements of policy regarding permitted uses, instructions for
contacting GBC if additional use is sought, and warranty disclaimers
for offered goods and services (collectively, the "Disclaimers"),
included at its Web Site
o Approval by GBC. ICI agrees not to make GBC's Web Pages accessible
to the public until after they are approved by GBC. Following such
approval, ICI agrees not to modify GBC's Web Site (except for
routine or technical modifications such as spelling corrections or
link changes) without approval of GBC.
o Right of Refusal. ICI reserves the right, in its sole discretion, to
refuse to include in any Web Page created under this Agreement any
content that ICI, in its sole discretion, deems inappropriate or
suspect under applicable laws or community standards. This includes,
without limitation, copyright infringement, material legally judged
threatening or obscene or material protected by trade secret or
other Intellectual Property Right. However, it is expressly
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acknowledged that ICI is a service technician only, and not an
editor, manager, or publisher, of any features, contributions, or
content selected, used, or approved by GBC. ICI has, and can be
expected to exercise, no control over such matters. ICI specifically
denies any responsibility for screening, policing, editing, or
monitoring such content.
o Development Credit. ICI may place its own Trademarks on the home
page of the Web Site designed or developed under this Agreement so
as to identify ICI's work on such Web Page, along with any
disclaimer ICI or its legal counsel deems necessary or advisable. In
addition, ICI may include hypertext links from the initial home page
of the Web Site created hereunder to ICI's Web Site and home page.
8. Web Site Hosting. ICI will provide Web Site hosting services in
accordance with the Initial Work Order, the Use and Maintenance
Agreement, and any Additional Work Orders entered into by the parties.
ICI's hosting standards will conform to applicable industry standards.
o Traffic Reporting. ICI will configure its web servers to capture
standard visitor log information needed to provide reports to GBC in
accordance with the Initial Work Order, the Maintenance Agreement,
and any Additional Work Orders entered into by the parties. At GBC's
request, ICI can help interpret the reports and make recommendations
to GBC based on the reports.
o Credit Card Clearing and Authorization All credit card, bank and
other financial institutions and agencies used in connection with
the Web Site to authorize, clear, or otherwise approve user
transactions will be directed by the developed software, the credit
card clearing and authorizations will be directed by ICI for three
years from the date of this contract. If GBC continues to contract
with the clearing or authorizing company utilized by ICI's software
solutions under this contract, the clearing and authorization
transactions will continue to be represented by ICI.
o Security. ICI will take all reasonable measures to prevent
unauthorized access to GBC's Web Site, any database or other
sensitive material generated from or used in connection with the Web
Site. ICI will notify GBC of any known security breaches or
vulnerabilities.
o Suspension of Hosting Services. ICI reserves the right at any time
without notice to GBC to suspend or terminate hosting services for
the Web Site or remove one or more Web Pages if ICI becomes aware of
or reasonably suspects inappropriate use, display, or transmission
of information on or from the Web Site.
9. Indemnification.
o Indemnification of ICI. GBC, at its own expense, will defend,
indemnify, and hold harmless ICI, its agents, affiliates,
successors, and assigns with respect to any claim or action brought
against ICI, its agents, affiliates, successors, and assigns arising
out of or in connection with the operation, condition, or content,
including without limitation Images and Disclaimers, of GBC's Web
Pages or Web Site, any use of Internet facilities conducted or
permitted by GBC, the conduct of any business, advertising,
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marketing, or sales in connection therewith, any breach of warranty,
and any negligent or illegal act or omission of GBC or any of its
agents, contractors, servants, employees, or other users or
accesses. ICI will promptly notify GBC of any such claim, will
provide reasonable assistance in connection with the defense and/or
settlement thereof, and will permit GBC to control the defense
and/or settlement thereof.
o Indemnification of GBC. ICI represents that to the best of its
knowledge, all software included in the Deliverables, except for
that for which GBC is responsible, do not infringe any Intellectual
Property Rights of any third party, nor has any claim of such
infringement been threatened or asserted against ICI. ICI agrees, at
its own expense, to defend, indemnify and hold harmless GBC and its
employees and agents from and against any and all claims, actions,
damages, and other liabilities caused by or arising from any known
infringements by the software in the Deliverables. GBC will promptly
notify ICI of any infringement claim for which GBC is seeking
indemnification, will provide reasonable assistance in connection
with the defense and/or settlement thereof, and will permit ICI to
control the defense and/or settlement thereof.
10. Warranty.
10.1 GBC Warranties.
o Web Page Content. GBC represents and warrants that GBC is authorized
and has the right: (1) to provide the product or services to be
advertised; and (2) to use any copy, illustration, personal or
corporate name, copyrighted material, graphic or pictorial
reproduction, Trademarks, endorsements, language, links, Images,
Disclaimers, and any additional content or items used in the Web
Site.
o Indemnification Funding. GBC represents and warrants that to the
extent it is not sufficiently capitalized at any time to itself
fully and completely bear the cost of defending and indemnifying ICI
as required by Section 9.1 of this Agreement, it will maintain
insurance to provide any additional funding necessary to fully and
completely defend and indemnify ICI.
10.2 ICI Warranties.
o Performance of Services. Services provided by ICI hereunder will be
performed in a professional and workmanlike manner and will
substantially conform with the description of services set forth in
the Initial Work Order, the Use and Maintenance Agreement, and any
Additional Work Orders entered into by the parties.
o Year 2000 Warranty. ICI represents and warrants that the
Deliverables will be Year 2000 Compliant.
o Exclusions. EXCEPT AS PROVIDED IN THIS PARAGRAPH, ALL SERVICES AND
DELIVERABLES ARE PROVIDED BY ICI WITHOUT WARRANTY OF ANY KIND,
INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF TITLE,
MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT
SHALL ICI BE LIABLE FOR INDIRECT, SPECIAL, INCIDENTAL, OR
CONSEQUENTIAL DAMAGES, INCLUDING, WITHOUT LIMITATION, LOSS OF
PROFITS OR INTERRUPTION OF BUSINESS, WHETHER SUCH DAMAGES ARE
ALLEGED IN TORT, CONTRACT, INDEMNITY, OR OTHERWISE, EVEN IF SUCH
PARTY HAS BEEN APPRISED OF THE POSSIBILITY OF SUCH DAMAGES.
o Limitation of Liability. In no event will ICI be liable to GBC for
any amount in excess of the fees actually paid by GBC to ICI for
services provided hereunder. The foregoing limitation includes and
applies to, without limitation, any liability arising out of the
performance or failure to perform of any hardware, software, or
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Internet connection, from any errors, omissions, interruptions in or
failure to provide Internet service; from interruptions in Web Page
availability; from the consequences of computer viruses transferred
over the Internet or otherwise; or from communication line failure,
breach of security due to use of the Internet, or any loss of
information or confidentiality due thereto.
11. Term and Termination.
o Term. This Agreement will commence on the Effective Date and will
continue until terminated by either party. ICI or GBC may each
terminate this Agreement, with or without cause, at any time upon
thirty- (30) days' prior notice. If the Agreement is terminated by
ICI before the completion of any work offsetting to an Initial
Payment, ICI will refund to GBC the amounts corresponding to work
not yet performed.
o Licenses. The GBC License, option for the GBC Site License, and/or
GBC Site License will automatically terminate upon termination of
this Agreement.
o Survival. Those rights and obligations which by their nature are
intended to survive expiration or termination of this Agreement
shall survive the expiration of this Agreement, including without
limitation Sections 5, 6, 9, 10, 11, and 12.
12. Miscellaneous Provisions.
o No Agency. The parties are independent contractors, and nothing in
this Agreement will be construed to create any employment, agency,
franchise, joint venture, partnership, or other similar legal
relationship between the parties. Neither party is granted any
authority under this Agreement to enter into agreements of any kind
on behalf of the other party, or to bind or obligate the other party
in any manner to any third party.
o No Conflict of Interest. Each party represents and warrants that it
has full power and authority to undertake its obligations under this
Agreement, and that it has not entered into any other agreement, nor
will it enter into any other agreement, that would render it
incapable of satisfactorily performing its obligations hereunder or
that would place it in a position of conflict of interest or be
inconsistent with its obligations hereunder.
o No Assignment. Each party represents that it is acting on its own
behalf and is not acting as an agent for or on behalf of any third
party, and further agrees that it may not assign its rights or
obligations under this Agreement without prior written consent of
the other party. Any attempt by one party to assign, delegate, or
otherwise transfer this Agreement in violation of this section will
be void.
o Notice. Any notice, approval, or other communication required or
permitted under this Agreement between the parties will be given in
writing and will be sent by telex, telefax, electronic mail, or
airmail, postage prepaid, to the address specified below or to any
other address that may be designated by prior notice. If to ICI,
14683 Midway Road, Suite 200, Addison, Texas 75001, Attn: Dan Allen,
facsimile number (972) 726-6307. If to GBC, 176 World Trade Center
2050 Stemmons Freeway Dallas, Texas; Attn.: J. Michael Wood,
facsimile number 214-752-6071
o Compliance With Law. Each party agrees that it shall comply with all
applicable laws and regulations of local, state, and federal
governmental bodies or agencies in its performance under this
Agreement.
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o Governing Law. THIS AGREEMENT WILL BE INTERPRETED AND ENFORCED IN
ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF TEXAS, WITHOUT
REGARD TO THE CHOICE OF LAW RULES, STATUTES, OR REGULATIONS OF THIS
OR ANY JURISDICTION, AS THOUGH ENTERED INTO BETWEEN TEXAS RESIDENTS
AND TO BE PERFORMED ENTIRELY WITHIN THE STATE OF TEXAS.
o Jurisdiction and Venue. Suit to enforce this Agreement or any
provision thereof will be brought exclusively in the state or
federal courts located in or having jurisdiction over Dallas County,
Texas. Each party consents to jurisdiction and venue in such court
and waives any defense of forum non-conveniens, improper venue, and
lack of personal jurisdiction.
o No Waiver. Neither party shall, by mere lapse of time, without
giving notice or taking other action hereunder, be deemed to have
waived any breach by the other party of any of the provisions of
this Agreement. Further, the waiver by either party of a particular
breach of this Agreement by the other shall neither be construed as
nor constitute a continuing waiver of such breach or of other
breaches of the same or any other provision of this Agreement.
o Severability. Any holding that a provision of this Agreement is
unenforceable, in whole or in part, will not affect the validity of
the other provisions of this Agreement.
o Force Majeure. Neither party shall be in default if failure to
perform any obligation hereunder is caused solely by supervening
conditions beyond that party's reasonable control, including acts of
God, civil commotion, strikes, labor disputes, and governmental
demands or requirements.
o Scope of the Agreement. The parties hereto acknowledge that each has
read this Agreement, understands it, and agrees to be bound by its
terms. The parties further agree that this Agreement is the complete
and exclusive statement of the agreement between the parties and
supersedes all proposals (oral or written), understandings,
representations, conditions, warranties, covenants, and all other
communications between the parties relating to this subject matter.
o Amendment. This Agreement may be amended only by a subsequent
writing that specifically refers to this Agreement and that is
signed by both parties, and no other act, document, usage, or custom
shall be deemed to amend this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective duly authorized representatives as set forth below:
INTEGRATED CONCEPTS, INC. GIMMEABID.COM, INC.
14683 Midway Road, Suite 200 174-G World Trade Center
Addison, Texas 75001 2050 Stemmons Freeway
Dallas, Texas 75342-0132
By:___(signature)_____________________ By:
Title:____________________________ Title:
Date:____________________________ Date:
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Exhibit 10.2
MATERIAL CONTRACTS
AGREEMENT
This Agreement is entered into by and between GimmeaBid.com, Inc., a Delaware
Corporation, and John Crowell, an individual, hereinafter referred to as
"Marketer".
WHEREAS, there is located in the states of Washington, Oregon, California,
Idaho, Nevada, Utah, Colorado, and Arizona dealers and transporters of new and
used motor vehicles, water craft, aircraft, agricultural equipment, recreational
vehicles, and heavy equipment;
WHEREAS, GimmeaBid.com, Inc., is in need of a person to contact dealers and
transporters of new and used motor vehicles, water craft, aircraft, agricultural
equipment, recreational vehicles, and heavy equipment; and
WHEREAS, Marketer desires to contact dealers and transporters of new and used
motor vehicles, water craft, aircraft, agricultural equipment, recreational
vehicles, and heavy equipment located in the states of Washington, Oregon,
California, Idaho, Nevada, Utah, Colorado, and Arizona;
NOW, THEREFORE, It is agreed as follows:
Marketing
----------
GimmeaBid.com, Inc., hereby assigns to Marketer the West Sales Region, being the
states of Washington, Oregon, California, Idaho, Nevada, Utah, Colorado, and
Arizona. Marketer shall contact, in person, each and every dealer and
transporter of new and used motor vehicles, water craft, aircraft, agricultural
equipment, recreational vehicles, and heavy equipment located in the West Sales
Region in order to sign them up as users of the websites GimmeaBid.com and
DealersAutoAuction.com. Marketer shall use the sign-up forms and dealer
agreement form provided him by GimmeaBid.com, Inc. A dealer is hereby defined as
a person or business whose regular course of business includes buying and/or
selling new and/or used motor vehicles, water craft, aircraft, agricultural
equipment, recreational vehicles, or heavy equipment, or any combination
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thereof. A transporter is hereby defined as a person or business whose regular
course of business includes transportation of one or more new and/or used motor
vehicles, water craft, aircraft, agricultural equipment, recreational vehicles,
or heavy equipment, or any combination thereof.
Marketer has a continuing duty to make face-to-face contact with each and every
dealer and transporter in the West Sales Region for the term of this Agreement.
Marketer shall provide GimmeaBid.com, Inc., by the 15th day of the each month a
report for the preceding month stating the names, addresses, and telephone
numbers of all dealers and transporters contacted, all dealers and transporters
signed up as users, all dealers and transporters who refused to sign us as
users, and all new dealers and transporters who began operation.
GimmeaBid.com, Inc., its agents, employees, or officers, may, at its discretion,
contact any dealer or transporter who refuses to sign up as a user. Such contact
by GimmeaBid.com, Inc., its agents, employees, or officers, shall not constitute
a breach of this Agreement.
In the event Marketer fails to make a concerted effort to contact, in person,
all dealers and transporters in the West Sales Region, GimmeaBid.com, Inc.,
shall have the right to terminate this Agreement by giving written notice to
Marketer.
Marketer shall receive from GimmeaBid.com, Inc., the sum of $2,000.00, per month
to cover travel expenses. Marketer shall be solely responsible for all expenses
incurred in excess of $2,000.00, per month.
Marketer agrees and understands that he is an independent contractor and not an
agent, assign, employee, or partner of GimmeaBid.com, Inc., and he has no power
to bind GimmeaBid.com. Inc., to any contract or agreement other than the
contracts and agreements, relating to signing up dealers as users of the
websites GimmeaBid.com and DealersAutoAuction.com, provided to him by
GimmeaBid.com, Inc.
Marketer shall indemnify and save harmless GimmeaBid.com, Inc., its agents,
assigns, employees, directors, officers, and partners, from all suits, actions,
or claims of any character, type, or description brought or made for or on
account of any injuries or damages received or sustained by any person or
business entity, arising out of, or occasioned by, the acts of Marketer, his
agents, employees, assigns, partners, officers, or directors, in the execution
or performance of this contract.
55
<PAGE>
As consideration for entering into this Agreement, GimmeaBid.com, Inc., shall
pay to Marketer the sum of $75.00, for each dealer, signed up by Marketer, for
the services offered by GimmeaBid.com, who sells ten (10) or more motor
vehicles, water craft, aircraft, agricultural equipment, recreational vehicles,
or heavy equipment, or any combination thereof, through the websites of
GimmeaBid.com or DealersAutoAuction.com. Said sum is payable on a monthly basis
for each such dealer who maintains the sales quota. GimmeaBid.com, Inc., shall
also pay to Marketer the sum of $25.00, for each dealer, signed up by Marketer,
for the services offered by GimmeaBid.com, who purchases three (3) or more motor
vehicles, water craft, aircraft, agricultural equipment, recreational vehicles,
or heavy equipment, or any combination thereof, through the websites of
GimmeaBid.com or DealersAutoAuction.com. Said sum is payable on a monthly basis
for each such dealer who maintains the purchase quota. GimmeaBid.com, Inc.,
shall additionally pay to Marketer the sum of $15.00 for each transport company
signed up by Marketer. Ninety (90) days after the effective date of this
Agreement, GimmeaBid.com, Inc., shall deliver to Marketer, as additional
consideration, 10,000 shares of common stock in GimmeaBid.com, Inc., provided
Marketer has made substantial performance in signing up dealers. The President
of GimmeaBid.com, Inc., shall be the sole determiner of that factors that
constitute substantial performance. As further consideration, Marketer shall
have a seat on the Board of Directors of GimmeaBid.com, Inc.
This Marketing section of the Agreement shall remain in full force and effect
for a period of five (5) years and shall terminate automatically at the end of
such period unless GimmeaBid.com, Inc., shall give written notice of its
intention to renew the Agreement for a like period to Marketer, such notice to
be given at least ninety (90) days prior to the expiration of such initial term.
Option
------
If, after the expiration of ninety (90) days after the effective date of this
Agreement, GimmeaBid.com, Inc., provides to Marketer the 10,000 shares of common
stock in GimmeaBid.com, Inc., referenced above, then Marketer shall have the
option to purchase from GimmeaBid.com, Inc., 400,000 shares of common stock in
GimmeaBid.com, Inc., at $5.00, per share. Marketer has three (3) years from the
date GimmeaBid.com, Inc., provides to Marketer the 10,000 shares, if provided,
to exercise the option.
As consideration for this option, Marketer hereby agrees to pay to
GimmeaBid.com, Inc., the sum of $1.00, which GimmeaBid.com, Inc., acknowledges
receipt of.
56
<PAGE>
In the event Marketer exercises the option, Marketer shall not sale, transfer,
or convey, nor cause to be sold, transferred, or conveyed, any portion of the
shares of common stock purchased pursuant to the option until such time as
one-hundred (100%) percent of the shares of GimmeaBid.com, Inc., common stock
offered for sale in the initial public offering are sold. The number of shares
to be offered in the public stock offering shall be determined on or before May
8, 2000, which is the date the private placement of GimmeaBid.com, Inc., common
stock ends.
In the event Marketer sales, or causes to be sold, any portion of the shares of
common stock purchased pursuant to the option prior to the time one-hundred
(100%) percent of the public stock offering of GimmeaBid.com, Inc., common stock
is sold, then Marketer shall owe and pay to GimmeaBid.com, Inc., as liquidated
damages the published market price of one share of GimmeaBid.com, Inc., common
stock multiplied by the number of shares Marketer purchased pursuant to the
option, which market value shall be determined as of 3:00 p.m. Central Standard
Time on the date of the sale. Marketer hereby agrees to pay said sum and
GimmeaBid.com, Inc., agrees to accept such sum as liquidated damages, and not as
a penalty, in the event of such breach.
In the event Marketer exercises the Option, then GimmeaBid.com, Inc., shall
notify Marketer within forty-eight (48) hours of the time that one-hundred
(100%) percent of the public stock offering of GimmeaBid.com, Inc., common
stock, as referenced above, is sold.
Notwithstanding any provision in this Agreement, in the event of a breach of the
Option section of this Agreement by Marketer, GimmeaBid.com, Inc., shall be
entitled to injunctive relief, as well as to the liquidated damages and the
recovery of a reasonable attorney's fees which shall be deemed to be ten (10%)
of the published market price of one share of GimmeaBid.com, Inc., common stock
multiplied by the number of shares Marketer purchased pursuant to the option,
which market value shall be determined as of 3:00 p.m. Central Standard Time on
the date of the breach, unless GimmeaBid.com, Inc., pleads otherwise.
Non-Competition
---------------
Marketer, his agents, representatives, or assigns shall not directly or
indirectly engage in, participate in, and shall have no interest in any
business, firm, person, venture, organization, partnership, or corporation,
whether as an employee, consultant, officer, director, agent, security holder,
creditor, consultant, marketer, or otherwise, that engages or intends to engage
in any activity that is the same or similar to, or competitive, directly or
indirectly, with any activity now engaged in by GimmeaBid.com, Inc., within five
(5) years from the effective date of this Agreement.
57
<PAGE>
Marketer shall not place himself or one or more of his representatives, agents,
employees, officers, directors, or partners on the board of directors or other
governing body of a business, firm, venture, organization, partnership, or
corporation that engages or intends to engage in any activity that is the same
or similar to, or competitive, directly or indirectly, with any activity now
engaged in by GimmeaBid.com, Inc. Marketer shall not position himself or one or
more of his representatives, agents, employees, officers, directors, or partners
as a partner, or other business associate, with any person or business, firm,
venture, organization, partnership, or corporation that engages or intends to
engage in any activity that is the same or similar to, or competitive, directly
or indirectly, with any activity now engaged in by GimmeaBid.com, Inc.
Indirect competition shall be deemed to include Marketer's position as a
partner, officer, consultant, agent, assign, employee, or subsidiary of a
competing business, or Marketer's position as a holding company for any
corporation, partnership, venture, or other business organization. Indirect
competition shall also be deemed to include providing one or more servers,
building a website, and/or hosting a website for any business, firm, person,
venture, organization, partnership, or corporation that engages or intends to
engage in any activity that is the same or similar to, or competitive with any
activity now engaged in by GimmeaBid.com, Inc. Indirect competition shall
additionally be deemed to include the raising of venture capital, locating and
providing names of potential investors, and the promotion of stock in any
business, firm, venture, organization, partnership, or corporation that engages
or intends to engage in any activity that is the same or similar to, or
competitive with any activity now engaged in by GimmeaBid.com, Inc. Indirect
competition shall further be deemed to include the raising of venture capital,
locating and providing names of potential investors, and the promotion of stock
for any person that engages or intends to engage in any activity that is the
same or similar to, or competitive with any activity now engaged in by
GimmeaBid.com, Inc.
This Agreement shall not be construed to limit or restrict Marketer from owning
shares of a business, firm, venture, organization, partnership, or corporation
that engages in any activity that is the same or similar to, or competitive with
any activity now engaged in by GimmeaBid.com, Inc., so long as Marketer, his
agents, representatives, or assigns, takes no part, directly or indirectly, in
the operations of the business, firm, venture, organization, partnership, or
corporation other than through a vote called for by the partners, board of
directors, or other governing body of the business, firm, venture, organization,
partnership, or corporation.
On the effective date of this Agreement, GimmeaBid.com, Inc., is engaged in the
following activities:
58
<PAGE>
on-line trading services via an Internet website to facilitate the sale of goods
and services in which a seller posts one or more items to be auctioned and
bidding is done electronically, and providing evaluative feedback and ratings of
sellers' goods and services, the value and prices of sellers' good and services,
buyers' and sellers' performance, delivery, and overall trading experience in
connection therewith; providing sellers who post items to be auctioned and bid
upon to determine the terms and conditions of the auction; providing an on-line
searchable database for the sale of goods and services of others via an Internet
website; providing an on-line searchable ordering guide for locating,
organizing, and presenting goods and services of others via an Internet website;
providing an on-line searchable catalog featuring goods and services of others;
providing on-line trading services via an Internet website to facilitate the
retail sale of goods and services; providing on-line trading and information
services via an Internet website whereby a retailer may obtain information about
goods and services and order, purchase and obtain goods and services directly
from manufacturers and service providers; retail sales services for others
provided by means of an Internet website; providing computerized searching,
ordering, and on-line retail and wholesale distributorship services for others
via an Internet website; providing on-line trading services via an Internet
website for dealers of new and used motor vehicles, water craft, aircraft,
agricultural equipment, recreational vehicles, and heavy equipment to facilitate
the sale of new and used motor vehicles, water craft, aircraft, agricultural
equipment, recreational vehicles, and heavy equipment by means of an auction
where bidding is done electronically; providing dealers of new and used motor
vehicles, water craft, aircraft, agricultural equipment, recreational vehicles,
and heavy equipment on-line access to multiple sources of financing for their
retail customers; providing the ability for dealers in new and used motor
vehicles, water craft, aircraft, agricultural equipment, recreational vehicles,
and heavy equipment to search on-line for motor vehicles nationally, by region,
by state, and by city; providing the ability for dealers in new and used motor
vehicles, water craft, aircraft, agricultural equipment, recreational vehicles,
and heavy equipment to search on-line for motor vehicles by make, model, year,
condition, dollar amount, auction time remaining, auction type, and mileage;
providing dealers of used motor vehicles, water craft, aircraft, agricultural
equipment, recreational vehicles, and heavy equipment an on-line rating system
for the motor vehicles, water craft, aircraft, agricultural equipment,
recreational vehicles, and heavy equipment listed on the website; providing
dealers of new and used motor vehicles, water craft, aircraft, agricultural
equipment, recreational vehicles, and heavy equipment on-line access to extended
warranties for their retail customers; providing dealers of new and used motor
vehicles, water craft, aircraft, agricultural equipment, recreational vehicles,
and heavy equipment the ability to place the shipping of the motor vehicles,
water crafts, aircrafts, agricultural equipment, recreational vehicles, and
heavy equipment they purchase up for competitive bidding; providing on-line
tracking and reporting on each buyer and seller; providing an on-line monitor
which will inform a registered buyer each time an item is listed which matches
the buyer's pre-defined criteria; providing buyers the ability to contact a
seller by electronic mail before purchasing an item
Notwithstanding any provision in this Agreement, in the event of the breach of
the Non- Competition section of this Agreement by Marketer, GimmeaBid.com, Inc.,
shall be entitled to injunctive relief, as well as to damages sustained and the
recovery of a reasonable attorney's fees which shall be deemed to be ten (10%)
59
<PAGE>
of the published market price of one share of GimmeaBid.com, Inc., common stock
multiplied by the number of shares held by Marketer on the date of the breach,
which market value and number of shares owned shall be determined as of 3:00
p.m. Central Standard Time on the date of the breach, unless GimmeaBid.com,
Inc., pleads otherwise.
General Provisions
------------------
The Marketing and Option sections of this Agreement are binding and inure to the
benefit of any successor of GimmeaBid.com, Inc. The Marketing and Option
sections of this Agreement terminate upon the death or incapacity resulting in
the necessity of life support of Marketer and, upon such death or incapacity,
GimmeaBid.com, Inc., is relieved from any and all duties imposed upon it in
those sections.
The Non-Competition section of this Agreement is binding and inures to the
benefit of any successor of GimmeaBid.com, Inc., or Marketer, respectively, and
any such successor shall be deemed substituted for GimmeaBid.com, Inc., or
Marketer, respectively, under the terms of this Agreement. As used herein, the
term successor shall include any person, representative, agent, assign, heir,
firm, corporation, venture, partnership, organization, holding company,
subsidiary, or other business entity which, at any time, by merger, purchase, or
otherwise, either directly or indirectly, acquires all or substantially all of
the assets or business of GimmeaBid.com, Inc., or Marketer.
Marketer or one or more of his employees, officers, directors, or partners shall
not have a seat on the board of directors of GimmeaBid.com, Inc., and on the
board of directors or other governing body of a business, firm, venture,
organization, partnership, or corporation that engages or intends to engage in
any activity that is the same or similar to, or competitive, directly or
indirectly, with any activity now engaged in by GimmeaBid.com, Inc.
Marketer shall not position himself or one or more of his representatives,
agents, employees, officers, directors, or partners as a partner, or other
business associate, with any person or business, firm, venture, organization,
partnership, or corporation that engages or intends to engage in any activity
that is the same or similar to, or competitive, directly or indirectly, with any
activity now engaged in by GimmeaBid.com, Inc., while having a seat on the Board
of Directors of GimmeaBid.com, Inc.
Indirect competition and activities now engaged by GimmeaBid.com, Inc., as used
in the General Provisions section, have the same meaning as defined in the
Non-Competition section.
60
<PAGE>
In the event of default or breach of any section of this Agreement by Marketer,
Marketer, if presently having a seat on the Board of Directors of GimmeaBid.com,
Inc., shall immediately resign his seat on the Board of Directors of
GimmeaBid.com, Inc. Marketer's resignation shall be effective upon either
written notice provided by Marketer or upon written notice, to Marketer, of
Marketer's default or breach.
No sale, assignment, transfer or pledge of the rights and duties in the
Marketing or Option sections of this Agreement shall be made, in whole or in
part, by Marketer without the prior written consent of GimmeaBid.com, Inc. This
Agreement shall terminate automatically upon any sale, assignment, transfer or
pledge without the prior written approval of GimmeaBid.com, Inc. Any sale,
assignment, transfer or pledge without the prior written consent of
GimmeaBid.com, Inc., shall constitute a breach
The rights and remedies granted to GimmeaBid.com, Inc., in this Agreement in the
event of breach or default are cumulative, and the exercise of such rights shall
be without prejudice to the enforcement of any other right or remedy authorized
by law or this Agreement. No waiver of any violation of the terms provisions,
and covenants in this Agreement shall be deemed to constitute a waiver of any
other violation, default, or breach of any terms, provisions, and covenants
contained in this agreement and forbearance to enforce one or more of the
remedies provided upon an event of default or breach shall not be deemed or
construed to constitute a waiver of such default or breach.
If any action, at law or in equity, including an action for declaratory relief,
is brought to enforce or interpret the provisions of this Agreement, the
prevailing party shall be entitled to recover reasonable attorney's fees from
the other party, which fees shall be set by the court in the trial of such
action and which fees shall be in addition to any other relief which may be
awarded.
All notices required by this Agreement or by the laws of the State of Texas
shall be in writing and delivered by certified mail, return receipt requested.
Notice to GimmeaBid.com, Inc., shall be sufficient if made or addressed to
GimmeaBid.com, Inc., 174-G World Trade Center, 2050 Stemmons Freeway, P.O. Box
420132, Dallas, Texas 75342, and to John Crowell, Marketer, at 76 Chandon,
Newport, California 92657-1111. Each party may change the address for notice by
giving notice of such change in accordance with the provisions of this
paragraph.
61
<PAGE>
In the event this Agreement is deemed to exceed the time or geographic
limitations permitted by applicable laws, then such provisions shall be reformed
to the maximum time or geographic limitations permitted by the applicable laws.
This Agreement constitutes the sole and only agreement of the parties hereto
relating to the contact and signing up of dealers and transporters of new and/or
used motor vehicles, water craft, aircraft, agricultural equipment, recreational
vehicles, and/or heavy equipment as users of the websites GimmeaBid.com and
DealersAutoAuction.com and correctly sets forth the rights, duties, and
obligations of each to the other as of the effective date of this Agreement. Any
prior agreements, promises, negotiations, or representations, written or oral,
not expressly set forth in this Agreement are of no force or effect. This
Agreement may not be modified unless both parties agree and the modification is
placed in writing and signed and notarized by both parties.
This Agreement is entire as to all of the performances to be rendered under it.
Breach of any obligation to be performed by Marketer shall constitute a breach
of the entire Agreement and shall give GimmeaBid.com, Inc., the right to
terminate the Marketing section of this Agreement.
If any term, provision, covenant, or condition of this Agreement is held by a
court of competent jurisdiction to be invalid, void, or unenforceable, it is the
express intent of the parties that the remainder of the provisions shall remain
in full force and effect and shall in no way be affected, impaired, or
invalidated.
The parties agree that this Agreement is governed solely by the laws of the
State of Texas and that all causes of action based upon the provisions in this
Agreement shall be brought solely in the 259th District Court in Jones County,
Texas. The parties agree that the 259th District Court in Jones County, Texas,
holds exclusive jurisdiction over any dispute arising out of this Agreement. The
parties consent to personal jurisdiction in said court.
By their signatures below, the parties acknowledge that they have read the
Agreement and that they understand the terms and conditions as stated therein.
This Agreement is effective the __________ day of _______________, 2000, and is
signed in Addison, Dallas County, Texas.
62
<PAGE>
GimmeaBid.com, Inc.
BY:______(signature)_____________________
J. Michael Wood, President
BY:______(signature)______________________
John Crowell
STATE OF TEXAS
ss.
ss.
COUNTY OF DALLAS
ss.
This instrument was acknowledged before me on , 2000, by J. Michael Wood, as
authorized representative of GimmeaBid.com, Inc.
63
<PAGE>
Notary Public, State of Texas
STATE OF TEXAS
ss.
ss.
COUNTY OF DALLAS
ss.
This instrument was acknowledged before me on , 2000, by John Crowell.
Notary Public, State of Texas
64
<PAGE>
Exhibit 11
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
Any reference to earnings per share within this prospectus, including
any forward-looking statements, utilized the following formula to calculate that
number.
Gross Revenue
- Total Operating Expenses
- Taxes
--------------------------------------
Net Revenue (or Net Income)
Net Revenues/Number of Shares Issued & Outstanding = Earnings Per Share
Exhibit 15
LETTER ON UN-AUDITED INTERIM FINANCIAL INFORMATION
SEE EXHIBIT 23.2
Exhibit 23
CONSENT OF EXPERTS AND COUNSEL
See Exhibit Number 5 for consent of counsel
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the use of our audit report dated April 27, 2000 in this
Form SB-2 of Gimmeabid.com, Inc. (formerly Mesquite Country, Inc.) for the year
ended December 31, 1999, which is part of this Form SB-2 and all references to
our firm included in this Form SB- 2. We also acknowledge awareness of the use
in this Form SB-2 of our report on the unaudited interim financial information.
Jones, Jensen & Company
Salt Lake City, Utah
May 15, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
GIMMEABID.COM, INC. FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 12-MOS
<FISCAL-YEAR-END> MAR-31-2000 DEC-31-1999
<PERIOD-END> DEC-31-2000 DEC-31-1999
<CASH> 126,826 545
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 139,707 3,426
<PP&E> 1,150,354 4,854
<DEPRECIATION> 618 435
<TOTAL-ASSETS> 1,289,443 7,845
<CURRENT-LIABILITIES> 108,569 110,534
<BONDS> 0 0
0 0
0 0
<COMMON> 7,564 7,270
<OTHER-SE> 1,173,310 (109,959)
<TOTAL-LIABILITY-AND-EQUITY> 1,289,443 7,845
<SALES> 0 0
<TOTAL-REVENUES> 0 0
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 185,520 1,496,678
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 2,530 10,412
<INCOME-PRETAX> (187,937) (1,507,090)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (187,937) (1,507,090)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (187,937) (1,507,090)
<EPS-BASIC> (0.03) (0.21)
<EPS-DILUTED> (0.03) (0.21)
</TABLE>
Exhibit 99
FINANCIAL PROJECTIONS
<TABLE>
<CAPTION>
Financial Projections - Income Statement
Summary (2000-2005)
2000 2001 2002 2003
Revenue
<S> <C> <C> <C> <C>
Vehicle Sales (Dollars) $ 450,000,000.00 $ 900,000,000.00 $ 1,800,000,000.00 $ 2,700,000,000.00
Vehicle Sales (Units) 90,000 180,000 360,000 540,000
Commission Rate 2.50% 2.50% 2.50% 2.50%
==========================================================================
Total Gross Revenue $ 11,250,000.00 $ 22,500,000.00 $ 45,000,000.00 $ 67,500,000.00
==========================================================================
Operating Expenses
Sales & Marketing Expense
Advertising $ 6,500,000.00 $ 300,000.00 $ 400,000.00 $ 500,000.00
Direct Mail $ 1,500,000.00 $ 45,000.00 $ 45,000.00 $ 45,000.00
Entertainment $ 60,000.00 $ 60,000.00 $ 120,000.00 $ 240,000.00
Literature $ 200,000.00 $ 25,000.00 $ 25,000.00 $ 25,000.00
Promotions $ 2,770,000.00 $ 135,000.00 $ 135,000.00 $ 135,000.00
Sales Staff $ 250,000.00 $ 250,000.00 $ 500,000.00 $ 1,000,000.00
Seminars $ 3,500,000.00
Support Staff $ 105,000.00 $ 105,000.00 $ 210,000.00 $ 350,000.00
Trade Shows $ 500,000.00 $ 24,000.00 $ 24,000.00 $ 24,000.00
Travel $ 200,000.00 $ 60,000.00 $ 120,000.00 $ 240,000.00
--------------------------------------------------------------------------
Total Sales & Marketing $ 15,585,000.00 $ 1,004,000.00 $ 1,579,000.00 $ 2,559,000.00
--------------------------------------------------------------------------
% of Total Sales 138.53% 4.46% 3.51% 3.79%
General & Admisitrative Expenses
Accounting Services $ 10,000.00 $ 20,000.00 $ 25,000.00 $ 30,000.00
Connectivity $ 5,400.00 $ 10,800.00 $ 10,800.00 $ 10,800.00
Credit Card Processing $ 292,500.00 $ 585,000.00 $ 1,170,000.00 $ 1,755,000.00
Customer Support $ 4,500.00 $ 9,000.00 $ 12,000.00 $ 15,000.00
Depreciation $ - $331,000.00 $361,000.00 $376,000.00
Entertainment $ 12,500.00 $ 25,000.00 $ 25,000.00 $ 25,000.00
Hosting Fees $ 24,000.00 $ 48,000.00 $ 48,000.00 $ 48,000.00
Legal Services $ 15,000.00 $ 30,000.00 $ 30,000.00 $ 30,000.00
Long Distance $ 4,000.00 $ 8,000.00 $ 10,000.00 $ 12,000.00
Management Salaries $ 107,500.00 $ 215,000.00 $ 215,000.00 $ 215,000.00
Office Rent $ 11,100.00 $ 22,200.00 $ 22,200.00 $ 22,200.00
Office Supplies $ 2,500.00 $ 5,000.00 $ 5,000.00 $ 5,000.00
Payroll Tax $ 9,298.75 $ 18,597.50 $ 18,597.50 $ 18,597.50
Phone $ 2,500.00 $ 5,000.00 $ 6,000.00 $ 7,000.00
--------------------------------------------------------------------------
Total G & A Expense $ 500,798.75 $ 1,332,597.50 $ 1,958,597.50 $ 2,569,597.50
--------------------------------------------------------------------------
% of Total Sales 4.45% 5.92% 4.35% 3.81%
Research & Development Expenses
Application Development $ 367,000.00 $ 100,000.00 $ 25,000.00 $ 25,000.00
Equipment $ 50,000.00 $ 50,000.00 $ 50,000.00 $ 50,000.00
--------------------------------------------------------------------------
Total R & D Expense $ 417,000.00 $ 150,000.00 $ 75,000.00 $ 75,000.00
--------------------------------------------------------------------------
% of Total Sales 3.71% 0.67% 0.17% 0.11%
==========================================================================
Total Operating Expenses $ 16,502,799.46 $ 2,486,597.55 $ 3,612,597.54 $ 5,203,597.54
==========================================================================
% of Total Sales 147% 11% 8% 8%
Gross Income $ (5,252,799.46) $ 20,013,402.45 $ 41,387,402.46 $ 62,296,402.46
Income Tax $ - $ 7,004,690.85 $ 14,485,590.85 $ 21,803,740.85
==========================================================================
Net Income $ (5,252,799.46) $ 13,008,711.60 $ 26,901,811.61 $ 40,492,661.61
==========================================================================
Shares Issued and Outstanding 9,112,645 9,112,645 9,112,645 9,112,645
Earnings per Share $ (0.58) $ 1.43 $ 2.95 $ 4.44
Calculation of Estimated Income Tax
Year to Date Taxable Income $ (5,252,799.46) $ 20,013,402.45 $ 41,387,402.46 $ 62,296,402.46
Income Tax Brackets
- 50,000 15% NONE $ 7,500.00 $ 7,500.00 $ 7,500.00
50,000 75,000 25% NONE $ 6,250.00 $ 6,250.00 $ 6,250.00
75,000 100,000 34% NONE $ 8,500.00 $ 8,500.00 $ 8,500.00
100,000 335,000 39% NONE $ 91,650.00 $ 91,650.00 $ 91,650.00
335,000 10,000,000 34% NONE $ 3,286,100.00 $ 3,286,100.00 $ 3,286,100.00
10,000,000 15,000,000 35% NONE $ 1,750,000.00 $ 1,750,000.00 $ 1,750,000.00
15,000,000 18,333,333 38% NONE $ 1,266,666.54 $ 1,266,666.54 $ 1,266,666.54
18,333,333 35% NONE $ 588,024.31 $ 8,068,924.31 $ 15,387,074.31
==========================================================================
Tax Attributable to Current Month $ - $ 7,004,690.85 $ 14,485,590.85 $ 21,803,740.85
==========================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Financial Projections - Income Statement
Summary (2000-2005)
(Continued)
2004 2005 Total
Revenue
<S> <C> <C> <C>
Vehicle Sales (Dollars) $ 3,600,000,000.00 $ 4,500,000,000.00 $ 13,950,000,000.00
Vehicle Sales (Units) 720,000 900,000 2,790,000
Commission Rate 2.50% 2.50% 2.50%
=============================================================
Total Gross Revenue $ 90,000,000.00 $ 112,500,000.00 $ 348,750,000.00
=============================================================
Operating Expenses
Sales & Marketing Expense
Advertising $ 600,000.00 $ 700,000.00 $ 9,000,000.00
Direct Mail $ 45,000.00 $ 45,000.00 $ 1,725,000.00
Entertainment $ 240,000.00 $ 240,000.00 $ 960,000.00
Literature $ 25,000.00 $ 25,000.00 $ 325,000.00
Promotions $ 135,000.00 $ 135,000.00 $ 3,445,000.00
Sales Staff $ 1,000,000.00 $ 1,000,000.00 $ 4,000,000.00
Seminars
Support Staff $ 350,000.00 $ 350,000.00 $ 1,470,000.00
Trade Shows $ 24,000.00 $ 24,000.00 $ 620,000.00
Travel $ 240,000.00 $ 240,000.00 $ 1,100,000.00
-------------------------------------------------------------
Total Sales & Marketing $ 2,659,000.00 $ 2,759,000.00 $ 22,645,000.00
-------------------------------------------------------------
% of Total Sales 2.95% 2.45% 6.49%
General & Admisitrative Expenses
Accounting Services $ 35,000.00 $ 40,000.00 $ 160,000.00
Connectivity $ 10,800.00 $ 10,800.00 $ 59,400.00
Credit Card Processing $ 2,340,000.00 $ 2,925,000.00 $ 9,067,500.00
Customer Support $ 18,000.00 $ 21,000.00 $ 79,500.00
Depreciation $391,000.00 $404,000.00 $ 1,863,000.00
Entertainment $ 25,000.00 $ 25,000.00 $ 137,500.00
Hosting Fees $ 48,000.00 $ 48,000.00 $ 264,000.00
Legal Services $ 30,000.00 $ 30,000.00 $ 165,000.00
Long Distance $ 14,000.00 $ 16,000.00 $ 64,000.00
Management Salaries $ 215,000.00 $ 215,000.00 $ 1,182,500.00
Office Rent $ 22,200.00 $ 22,200.00 $ 122,100.00
Office Supplies $ 5,000.00 $ 5,000.00 $ 27,500.00
Payroll Tax $ 18,597.50 $ 18,597.50 $ 102,286.25
Phone $ 8,000.00 $ 9,000.00 $ 37,500.00
-------------------------------------------------------------
Total G & A Expense $ 3,180,597.50 $ 3,789,597.50 $ 13,331,786.25
-------------------------------------------------------------
% of Total Sales 3.53% 3.37% 3.82%
Research & Development Expenses
Application Development $ 25,000.00 $ 25,000.00 $ 567,000.00
Equipment $ 50,000.00 $ 50,000.00 $ 300,000.00
-------------------------------------------------------------
Total R & D Expense $ 75,000.00 $ 75,000.00 $ 867,000.00
-------------------------------------------------------------
% of Total Sales 0.08% 0.07% 0.25%
=============================================================
Total Operating Expenses $ 5,914,597.53 $ 6,623,597.53 $ 36,843,786.30
=============================================================
% of Total Sales 7% 6% 11%
Gross Income $ 84,085,402.47 $ 105,876,402.47 $ 308,406,212.86
Income Tax $ 29,429,890.85 $ 37,056,740.85 $ 109,780,654.26
=============================================================
Net Income $ 54,655,511.62 $ 68,819,661.62 $ 198,625,558.60
=============================================================
Shares Issued and Outstanding 9,112,645 9,112,645 $ 9,500,000.00
Earnings per Share $ 6.00 $ 7.55 $ 20.91
Calculation of Estimated Income Tax
Year to Date Taxable Income $ 84,085,402.47 $ 105,876,402.47 $ 308,406,212.84
Income Tax Brackets
- 50,000 15% $ 7,500.00 $ 7,500.00 $ 30,000.00
50,000 75,000 25% $ 6,250.00 $ 6,250.00 $ 25,000.00
75,000 100,000 34% $ 8,500.00 $ 8,500.00 $ 34,000.00
100,000 335,000 39% $ 91,650.00 $ 91,650.00 $ 366,600.00
335,000 10,000,000 34% $ 3,286,100.00 $ 3,286,100.00 $ 13,144,400.00
10,000,000 15,000,000 35% $ 1,750,000.00 $ 1,750,000.00 $ 7,000,000.00
15,000,000 18,333,333 38% $ 1,266,666.54 $ 1,266,666.54 $ 5,066,666.16
18,333,333 35% $ 23,013,224.31 $ 30,640,074.31 $ 47,057,247.24
=============================================================
Tax Attributable to Current Month $ 29,429,890.85 $ 37,056,740.85 $ 72,723,913.40
=============================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Financial Projections - Cash Flow
For Years 2000-2005
2000 2001 2002 2003
Beginning Cash $ - $ 19,157,643.25 $ 32,392,354.90 $ 59,543,166.55
Cash Receipts
<S> <C> <C> <C> <C>
Commission $ 11,250,000.00 $ 22,500,000.00 $ 45,000,000.00 $ 67,500,000.00
=====================================================================
Total Cash Receipts $ 11,250,000.00 $ 22,500,000.00 $ 45,000,000.00 $ 67,500,000.00
=====================================================================
Cash Disbursements
Sales & Marketing Expense
Advertising $ 6,500,000.00 $ 300,000.00 $ 400,000.00 $ 500,000.00
Direct Mail $ 1,500,000.00 $ 45,000.00 $ 45,000.00 $ 45,000.00
Entertainment $ 60,000.00 $ 60,000.00 $ 120,000.00 $ 240,000.00
Literature $ 200,000.00 $ 25,000.00 $ 25,000.00 $ 25,000.00
Promotions $ 2,770,000.00 $ 135,000.00 $ 135,000.00 $ 135,000.00
Sales Staff $ 250,000.00 $ 250,000.00 $ 500,000.00 $ 1,000,000.00
Support Staff $ 105,000.00 $ 105,000.00 $ 210,000.00 $ 350,000.00
Trade Shows $ 500,000.00 $ 24,000.00 $ 24,000.00 $ 24,000.00
Travel $ 200,000.00 $ 60,000.00 $ 120,000.00 $ 240,000.00
---------------------------------------------------------------------
Total Sales & Marketing $ 12,085,000.00 $ 1,004,000.00 $ 1,579,000.00 $ 2,559,000.00
---------------------------------------------------------------------
General & Admisitrative Expenses
Accounting Services $ 10,000.00 $ 20,000.00 $ 25,000.00 $ 30,000.00
Connectivity $ 5,400.00 $ 10,800.00 $ 10,800.00 $ 10,800.00
Credit Card Processing $ 292,500.00 $ 585,000.00 $ 1,170,000.00 $ 1,755,000.00
Customer Support $ 4,500.00 $ 9,000.00 $ 12,000.00 $ 15,000.00
Entertainment $ 12,500.00 $ 25,000.00 $ 25,000.00 $ 25,000.00
Hosting Fees $ 24,000.00 $ 48,000.00 $ 48,000.00 $ 48,000.00
Legal Services $ 15,000.00 $ 30,000.00 $ 30,000.00 $ 30,000.00
Long Distance $ 4,000.00 $ 8,000.00 $ 10,000.00 $ 12,000.00
Management Salaries $ 107,500.00 $ 215,000.00 $ 215,000.00 $ 215,000.00
Office Rent $ 11,100.00 $ 22,200.00 $ 22,200.00 $ 22,200.00
Office Supplies $ 2,500.00 $ 5,000.00 $ 5,000.00 $ 5,000.00
Payroll Tax $ 9,298.75 $ 18,597.50 $ 18,597.50 $ 18,597.50
Phone $ 2,500.00 $ 5,000.00 $ 6,000.00 $ 7,000.00
---------------------------------------------------------------------
Total G & A Expense $ 500,798.75 $ 1,001,597.50 $ 1,597,597.50 $ 2,193,597.50
---------------------------------------------------------------------
Research & Development Expenses
Application Development $ 367,000.00 $ 100,000.00 $ 25,000.00 $ 25,000.00
Equipment $ 50,000.00 $ 50,000.00 $ 50,000.00 $ 50,000.00
---------------------------------------------------------------------
Total R & D Expense $ 417,000.00 $ 150,000.00 $ 75,000.00 $ 75,000.00
---------------------------------------------------------------------
=====================================================================
Total Cash Disbursements $ 13,002,798.75 $ 2,155,597.50 $ 3,251,597.50 $ 4,827,597.50
=====================================================================
Gross proceeds from sale of stock $ 28,500,000.00 $ - $ - $ -
15% commission (if b/d is used) $ 4,275,000.00 $ - $ - $ -
Net proceeds from sale of stock $ 24,225,000.00 $ - $ - $ -
Income Tax $ 3,314,558.00 $ 7,109,690.85 $ 14,597,590.85 $ 21,917,490.85
=====================================================================
Ending Cash $ 19,157,643.25 $ 32,392,354.90 $ 59,543,166.55 $ 100,298,078.20
=====================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Financial Projections - Cash Flow
For Years 2000-2005
(Continued)
2004 2005 Total
<S> <C> <C> <C>
Beginning Cash $ 100,298,078.20 $ 155,229,089.84 $ -
Cash Receipts
Commission $ 90,000,000.00 $ 112,500,000.00 $ 348,750,000.00
=====================================================
Total Cash Receipts $ 90,000,000.00 $ 112,500,000.00 $ 348,750,000.00
=====================================================
Cash Disbursements
Sales & Marketing Expense
Advertising $ 600,000.00 $ 700,000.00 $ 9,000,000.00
Direct Mail $ 45,000.00 $ 45,000.00 $ 1,725,000.00
Entertainment $ 240,000.00 $ 240,000.00 $ 960,000.00
Literature $ 25,000.00 $ 25,000.00 $ 325,000.00
Promotions $ 135,000.00 $ 135,000.00 $ 3,445,000.00
Sales Staff $ 1,000,000.00 $ 1,000,000.00 $ 4,000,000.00
Support Staff $ 350,000.00 $ 350,000.00 $ 1,470,000.00
Trade Shows $ 24,000.00 $ 24,000.00 $ 620,000.00
Travel $ 240,000.00 $ 240,000.00 $ 1,100,000.00
-----------------------------------------------------
Total Sales & Marketing $ 2,659,000.00 $ 2,759,000.00 $ 22,645,000.00
-----------------------------------------------------
General & Admisitrative Expenses
Accounting Services $ 35,000.00 $ 40,000.00 $ 160,000.00
Connectivity $ 10,800.00 $ 10,800.00 $ 59,400.00
Credit Card Processing $ 2,340,000.00 $ 2,925,000.00 $ 9,067,500.00
Customer Support $ 18,000.00 $ 21,000.00 $ 79,500.00
Entertainment $ 25,000.00 $ 25,000.00 $ 137,500.00
Hosting Fees $ 48,000.00 $ 48,000.00 $ 264,000.00
Legal Services $ 30,000.00 $ 30,000.00 $ 165,000.00
Long Distance $ 14,000.00 $ 16,000.00 $ 64,000.00
Management Salaries $ 215,000.00 $ 215,000.00 $ 1,182,500.00
Office Rent $ 22,200.00 $ 22,200.00 $ 122,100.00
Office Supplies $ 5,000.00 $ 5,000.00 $ 27,500.00
Payroll Tax $ 18,597.50 $ 18,597.50 $ 102,286.25
Phone $ 8,000.00 $ 9,000.00 $ 37,500.00
-----------------------------------------------------
Total G & A Expense $ 2,789,597.50 $ 3,385,597.50 $ 11,468,786.25
-----------------------------------------------------
Research & Development Expenses
Application Development $ 25,000.00 $ 25,000.00 $ 567,000.00
Equipment $ 50,000.00 $ 50,000.00 $ 300,000.00
-----------------------------------------------------
Total R & D Expense $ 75,000.00 $ 75,000.00 $ 867,000.00
-----------------------------------------------------
=====================================================
Total Cash Disbursements $ 5,523,597.50 $ 6,219,597.50 $ 34,980,786.25
=====================================================
Gross proceeds from sale of stock $ - $ - $ 28,500,000.00
15% commission (if b/d is used) $ - $ - $ 4,275,000.00
Net proceeds from sale of stock $ - $ - $ 24,225,000.00
Income Tax $ 29,545,390.85 $ 37,173,990.86 $ 113,658,712.26
=====================================================
Ending Cash $ 155,229,089.84 $ 224,335,501.49 $ 224,335,501.49
=====================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Financial Projections - Balance Sheet
For Years Ending December 2000-2005
2000 2001 2002
Assets
Current Assets
<S> <C> <C> <C>
Cash $ 10,000,000.00 $ 10,000,000.00 $ 10,000,000.00
Marketable Securities $ 9,157,643.25 $ 22,392,354.90 $ 49,543,166.55
Computer Hardware $ 120,000.00 $120,000.00 $ 170,000.00
Accumulated Depreciation - Computer Hardware $ (24,000.00) $ (58,000.00)
Computer Software $ 1,500,000.00 $ 1,600,000.00 $ 1,625,000.00
Accumulated Depreciation - Computer Software $ (300,000.00) $ (620,000.00)
Office Equipmemt $ 25,000.00 $ 25,000.00 $ 25,000.00
Accumulated Depreciation - Office Equipment $ (5,000.00) $(10,000.00)
Office Furniture $ 10,000.00 $ 10,000.00 $ 10,000.00
Accumulated Depreciation - Office Furniture $ (2,000.00) $ (4,000.00)
-----------------------------------------------------
Total Current Assets $ 20,812,643.25 $ 33,923,354.90 $ 60,902,166.55
=====================================================
Total Assets $ 20,812,643.25 $ 33,923,354.90 $ 60,902,166.55
=====================================================
Liabilities
Current Liabilities
Accounts/Notes Payable $ - $ - $ -
-----------------------------------------------------
Total Liabilities $ - $ - $ -
Stockholder's Equity
9,500,000 shares issued and
outstanding par value of $.001 $ 9,500.00 $ 9,500.00 $ 9,500.00
Capital in excess of par value $ 20,803,143.25 $ 33,913,854.90 $ 61,892,666.55
-----------------------------------------------------
Total Stockholder's Equity $ 20,812,643.25 $ 33,923,354.90 $ 60,902,166.55
=====================================================
Total Liabilities and Stockholder's Equity $ 20,812,643.25 $ 33,923,354.90 $ 60,902,166.55
=====================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Financial Projections - Balance Sheet
For Years Ending December 2000-2005
(Continued)
2003 2004 2005
Assets
Current Assets
<S> <C> <C> <C>
Cash $ 10,000,000.00 $ 10,000,000.00 $ 10,000,000.00
Marketable Securities $ 90,298,078.20 $ 145,229,089.84 $ 214,335,501.49
Computer Hardware $ 220,000.00 $ 270,000.00 $ 320,000.00
Accumulated Depreciation - Computer Hardware $(102,000.00) $(156,000.00) $ (218,000.00)
Computer Software $ 1,650,000.00 $ 1,675,000.00 $ 1,700,000.00
Accumulated Depreciation - Computer Software $ (945,000.00) $(1,275,000.00) $(1,610,000.00)
Office Equipmemt $ 25,000.00 $ 25,000.00 $ 25,000.00
Accumulated Depreciation - Office Equipment $ (15,000.00) $ (20,000.00) $ (25,000.00)
Office Furniture $ 10,000.00 $ 10,000.00 $ 10,000.00
Accumulated Depreciation - Office Furniture $ (6,000.00) $ (8,000.00) $ (10,000.00)
--------------------------------------------------------------------------
Total Current Assets $ 101,471,828.20 $ 156,204,339.84 $ 225,101,001.49
==========================================================================
Total Assets $ 101,471,828.20 $ 156,204,339.84 $ 225,101,001.49
==========================================================================
Liabilities
Current Liabilities
Accounts/Notes Payable $ - $ - $ -
-------------------------------------------------------------------------
Total Liabilities $ - $ - $ -
Stockholder's Equity
9,500,000 shares issued and
outstanding par value of $.00 $ 9,500.00 $ 9,500.00 $ 9,500.00
Capital in excess of par value $ 101,462,328.20 $ 156,194,839.84 $ 225,091,501.49
-------------------------------------------------------------------------
Total Stockholder's Equity $ 101,471,828.20 $ 156,204,339.84 $ 225,101,001.49
=========================================================================
Total Liabilities and Stockholder's Equity $ 101,471,828.20 $ 156,204,339.84 $ 225,101,001.49
=========================================================================
</TABLE>
